The CFTC Further Clarifies End-User Exception to the Mandatory Clearing Requirement for Swaps
The Dodd-Frank Act imposes a mandatory clearing requirement on certain swaps to be designated by the CFTC. To mitigate the burden of this requirement, Dodd-Frank provides an exception to such clearing requirement for certain non-financial end-users. In a final rule, released on July 11, 2012, the CFTC outlines the requirements that must be met in order for a person to elect the so-called “end-user exception” to the mandatory clearing requirement. This memo discusses the final rule published by the CFTC, outlines which parties are eligible to take advantage of the end-user exception, and summarizes the procedures for making such election.