Corporate end users of swaps are breathing easier after the Commodity Futures Trading Commission (CFTC) earlier this month proposed definitions to categorize swap users that are unlikely to affect companies using swaps to hedge commercial risk. However, other concerns remain for companies, such as the CFTC's contention that it has the authority to impose margin requirements directly on end users.

Currently, corporate end users don't post margin on swap transactions they use to hedge or mitigate business risks related to changing interest- and foreign-currency rates, commodity prices and other factors. The Dodd-Frank financial reform legislation creates a new category of swap users, called major swap participants (MSPs), that will be subject to margin requirements and regulations similar to those imposed on swap dealers, and end users worried they could fall into that category.

The CFTC proposal sets two thresholds for determining MSP status: companies with $5 billion in current uncollateralized exposure and with $8 billion in current uncollateralized exposure plus potential future exposure.