Regulatory Alerts2020-07-22 | 2020-14390Added · Updated
Exemption From the Swap Clearing Requirement for Certain Affiliated Entities-Alternative Compliance Frameworks for Anti-Evasionary Measures
The Commodity Futures Trading Commission amends regulation 50.52 to permanently adopt alternative compliance frameworks for the anti-evasionary condition of the Inter-Affiliate Exemption from the swap clearing requirement. These amendments allow eligible affiliate counterparties located in specific non-U.S. jurisdictions, including the European Union, Japan, Singapore, Australia, Canada, Hong Kong, Mexico, Switzerland, and the United Kingdom, to comply with the exemption without clearing swaps with unaffiliated counterparties, provided they meet variation margin and risk management conditions. The rule also revises the five percent test for U.S. affiliates by removing certain jurisdictions from the 'other jurisdictions' category, thereby permitting a higher notional amount of uncleared swaps with affiliates in those specified jurisdictions while maintaining the five percent threshold relative to total cleared swaps.
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