The Shape of Swaps to Come

Corporate users of derivatives brace for coming regulations.

Regulators are expected to crank up output of Dodd-Frank Act rules in the months ahead, leaving corporate end users of derivatives waiting to see how the regulations will affect their use of over-the-counter swaps.

Two of the most controversial issues that regulators will tackle—whether end users will have to post margin and whether their inter-affiliate swaps will be exempted from new requirements—may also be addressed by Congress. In late July, Rep. Michael Grimm (R-NY) introduced legislation that seeks to clarify that swap end users are exempt from margin requirements. And Rep. Steve Stivers (R-OH) introduced a bill in August that would ensure that companies using swaps internally among affiliates were exempted from Dodd-Frank rules.

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