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

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

The CFTC proposal sets two thresholds for determining MSPstatus: companies with $5 billion in current uncollateralizedexposure and with $8 billion in current uncollateralized exposureplus potential future exposure.