After months of fretting, non-financial companies that useover-the-counter swaps should find out this week what regulatorsare proposing in terms of margin requirements, which are expectedto affect at least some corporate end-users.

In fact, Tuesday will be jam-packed with margin-related events.At a Commodity Futures Trading Commission (CFTC) meeting at 9:30 ETTuesday morning, the commission is set to vote on a proposal thatis expected to exclude corporate end users from marginrequirements.

At a meeting that begins half an hour later, the Federal DepositInsurance Corp. (FDIC) will vote on a proposal to require banks itregulates to subject at least some corporate customers tocollateral requirements on swaps trades. Other banking regulators,including the Federal Reserve, are expected to follow the FDIC'slead and issue similar proposals.

Tuesday afternoon, the Senate Committee on Banking, Housing andUrban Affairs will address the issue, listening to top regulatorsas well as swap industry executives. Earlier this month, thecommittee chairman, Tim Johnson (D-S.D.), and the heads of threeother congressional committees with jurisdiction over derivativessent a letter to the CFTC, the Fed, the Securities and ExchangeCommission and Treasury expressing their support for an end-userexclusion from margin requirements.

CFTC chairman Gary Gensler has stated his support for acorporate exclusion–a stance expected to be reflected the CFTC'sproposal. However, the CFTC regulates only nonbank financialinstitutions, which typically deal in energy and agriculturalswaps.

Companies that are hedging interest-rate and currency risks–twoof the biggest over-the-counter derivatives markets–use bankcounterparties, whose regulators are expected to require them toimpose margin requirements on corporate customers if the swaps arenot cleared by a registered clearing agency.

The requirements, however, are expected to be limited tocircumstances in which the corporate customer's net mark-to-marketderivatives exposure exceeds specified thresholds.

“This is where the only silver lining shows up,” says LukeZubrod, director at Chatham Financial. “So even though the[banking] regulators believe they are required to impose margin,given the legislative text, their proposal will attempt to reflectthat end users don't contribute meaningfully to systemic risk.”

Tom Deas, treasurer at FMC Corp. and president of the NationalAssociation of Corporate Treasurers, says for corporate users, acontinuing concern is “when at the very time companies could leastafford demand on their liquidity–during a crisis–the [regulators]would lower that threshold.”

Deas will represent corporate end users at the Senatehearing.