Regulators are expected to crank up output of Dodd-Frank Actrules in the months ahead, leaving corporate end users ofderivatives waiting to see how the regulations will affect theiruse of over-the-counter swaps.

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

Pat Ryder, director of financial risk management at EastmanChemical, says his company fought hard for the end-user exemptionfrom margin requirements when the Dodd-Frank legislation was beingwritten. The exemption was included in the legislation, along withan exemption from clearing the transactions. Since the legislationbecame law, however, the FDIC has proposed giving prudentialregulators the authority to require banks to post margin on swapsand collect margin from their clients.

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