In an expected move, the US CFTC voted unanimously to expand the clearing requirement for Interest Rate swaps denominated in certain foreign currtencies [i.e. AUD, CAD, HKD]. The requirement does not apply to otherwise exempt parties and transactions [such as those complying with the End-User Clearing Exception] and will be phased in over 2 years.
The U.S. Commodity Futures Trading Commission today expanded the existing clearing requirement for interest rate swaps. The Dodd-Frank Act amended the Commodity Exchange Act (CEA) to prevent market participants from entering into a swap that the Commission has required to be cleared unless that market participant submits the swap for clearing to a DCO. [T]he clearing requirement determination does not apply to those entities that are eligible to elect an exception or exemption from clearing, such as non-financial entities and small banks hedging commercial risk, certain affiliated counterparties, and certain cooperatives. The determination requires that swaps denominated in particular currencies in each of the four interest rate swap classes described in regulation 50.4(a) be cleared under section 2(h) of the CEA.