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.
“Though transactions between affiliates pose risk, much of the risk relates to their affiliates rather than external parties,” CFTC Chairman Gary Gensler said in a statement yesterday.
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