President Signs Bill Granting Commercial End-Users and Financial Cooperatives Relief from Mandatory Margin Requirements for Uncleared Swaps
20 January 2015Swaps Update
On January 12, 2015, President Obama signed into law the Business Risk Mitigation and Price Stabilization Act of 2015 (the Amendment), which amends Section 731 of the Dodd-Frank Wall Street Reform and Consumer Protection (the Dodd-Frank Act). The Amendment, which contains language identical to that included in several bills that were approved in previous sessions of the House of Representatives but failed to make it to the president’s desk, was attached to a bill that extended the Terrorism Insurance Program. The new law should address uncertainty that arose as a result of last year’s release of proposed rules in relation to margin requirements for uncleared swaps. The Amendment will allow manufacturers, retailers, transportation companies, and other non-financial users of swaps (along with certain types of financial cooperatives) to continue to hedge their assets and liabilities without a legal requirement to have collateral arrangements in place.