CFTC May Exempt Interaffiliate Swaps

Under proposal, trades between units of the same company would not have to go through clearinghouses.

The U.S. Commodity Futures Trading Commission proposed exempting trades between units of the same company from Dodd-Frank Act clearinghouse rules designed to limit risk in the $648 trillion swaps market.

In a 3-2 private vote, CFTC commissioners proposed freeing so-called interaffiliate trades from requirements that swaps be guaranteed at central clearinghouses that protect buyers and sellers against defaults. The proposal would require collateral to be exchanged between affiliates to reduce trade risks.

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