Federal Register: End-User Exception to Mandatory Clearing of Security-Based Swaps

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Dodd-Frank Timeline, End-User Exception to Mandatory Clearing of Swaps, SEC
Proposal Date Comment Deadline Reopened Comment Period Deadline
December 21, 2010 February 4, 2011 July 22, 2013

On December 15, 2010, the SEC held an open meeting concerning end-user requirements for security-based swaps exempt from mandatory clearing under the Dodd-Frank Act. Among the topics at this meeting were end-user procedure for SEC notification regarding security-based swap transactions exempt from the mandatory clearing requirement, and the need for an additional exemption for certain financial institutions.[1] Proposed rules were added to the Federal Register on December 21, 2010.

Note: On May 1, 2013, the comment periods were reopened for SEC proposed rules related to security-based swaps and security-based swap entities. The extended comment deadline is July 22, 2013. To submit a comment, click HERE.

Summary of the Proposed Rule

In order to qualify for the end-user clearing exception, a non-financial entity that uses security-based swaps to hedge or mitigate commercial risk must notify the Commission how it generally meets its financial obligations associated with non-cleared security- based swaps.

Transactions in security-based swaps must:

  • be cleared through a clearing agency if they are of a type that the Commission determines must be cleared, unless an exemption from mandatory clearing applies;
  • be reported to a registered security-based swap data repository (SDR) or to the commission; and
  • if subject to a clearing requirement, be traded on a registered exchange or a registered or exempt security-based swap execution facility, unless no facility makes such security-based swap available for trading (MATT).

The rules will be designed to prevent abuse of the end-user exception.


  1. SEC Announcements - SEC Proposes End-User Requirements Under Dodd-Frank Act for Security-Based Swaps Exempt From Mandatory Clearing. SEC. Retrieved on December 15, 2010.

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