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No-Action Relief from Clearing Requirement for Swaps Entered into by Certain Treasury Affiliates
7 June 2013
The CFTC granted no-action relief to certain "eligible treasury affiliates" from the mandatory clearing requirement for outward-facing swaps entered into by such treasury affiliates on behalf of non-financial entities within a corporate group, subject to certain conditions.
In order to qualify as an "eligible treasury affiliate" the treasury affiliate must be a financial entity solely as a result of acting as a principal to swaps with, or on behalf of, non-financial entities that are wholly- or majority-owned by certain "related affiliates," must be directly wholly-owned by a non-financial entity or another eligible treasury affiliate and must not be indirectly majority-owned by a financial entity.
Additionally, the treasury affiliate must enter into the exempted swap for the sole purpose of hedging or mitigating the commercial risk of one or more related affiliates that was transferred to the treasury affiliate by one or more swaps with such related affiliate.
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