Regulatory Alerts2012-07-17 | 2012-17357Clearing Exemption for Certain Swaps Entered Into by Cooperatives
The Commodity Futures Trading Commission proposes a rule under Section 4(c) of the Commodity Exchange Act to exempt certain cooperatives from mandatory swap clearing requirements. This exemption allows qualifying cooperatives to elect not to clear swaps with members or swaps hedging member loan risks, effectively passing through the end-user exception available to their non-financial or small financial institution members. The proposal restricts eligibility to cooperatives whose members are entities that could themselves elect the end-user exception, ensuring the relief is narrowly drawn to mitigate financial system risk.
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