On January 12, 2015 President Obama signed S.2244 which included an unrelated provision of critical importance to derivatives end-users. Under the original language of Dodd Frank, derivatives end-users were exempt from mandatory initial margin requirement. However, under Basel III, banking regulators were proceeding down a path to impose them. In a timely and important move, this new legislation cleanly resolves the issue in a way favorable to business generally and derivatives end-users in specific.
Terrorism Risk Insurance Program Reauthorization Act of 2014. Title III: Business Risk Mitigation and Price Stabilization Act of 2014 - (Sec. 302) Amends the Commodity Exchange Act to exempt, from the rules of prudential regulators for swap dealers and major swap participants with respect to initial and variation margin requirements for swaps not cleared by a registered derivatives clearing organization, those swaps in which one of the counterparties: (1) is eligible for an exception from clearing requirements because it is not a financial entity, uses swaps to hedge or mitigate commercial risk, and notifies the Commodity Futures Trading Commission how it meets financial obligations associated with entering into non-cleared swaps; (2) is eligible for a public interest exemption from swap clearing requirements for certain cooperative entities; or (3) satisfies specified criteria governing treatment of affiliates in connection with clearing requirements.