Regulatory Alerts2012-08-21 | 2012-20508Clearing Exemption for Swaps Between Certain Affiliated Entities
The Commodity Futures Trading Commission proposes a rule to exempt swaps between certain majority-owned affiliated entities from the mandatory clearing requirement under the Commodity Exchange Act. The proposal establishes specific conditions counterparties must satisfy to elect this inter-affiliate clearing exemption and mandates reporting requirements for entities availing themselves of the exemption. This rule aims to reduce systemic risk while allowing corporate groups to manage risk internally through centralized treasury or conduit structures without the burden of clearing uncleared swaps with third parties.
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