CFTC Announces Beginning of the Third Phase of Mandatory Clearing of Certain CDS and Interest Rate Swaps

The CFTC Division of Clearing and Risk announced that the third phase of required clearing for certain credit default swaps ("CDS") and interest rate swaps begins today, September 9. The CFTC adopted its first clearing requirement determination for four classes of interest rate swaps and two classes of CDS on November 29, 2012. The specifications for the CDS and interest rate swaps required to be cleared are set forth in CFTC Rule 50.4 ("Classes of Swaps to Be Cleared"). Market participants are required to clear swaps subject to a clearing requirement determination unless an exception, exemption or other relief from required clearing applies.

See: CFTC Press Release. See also: CFTC Final Rule on Clearing Exemption for Certain Swaps Entered into by Cooperatives (Fed. Reg.) (August 22, 2013); CFTC Announces Mandatory Clearing of iTraxx CDS Indices for Category 2 Entities (July 25, 2013); CFTC Announces That Mandatory Clearing for Category 2 Entities Begins Today (June 10, 2013) Clearing Exemption under Part 50 for Swaps between Certain Affiliated Entities (CFTC Final Rule; Fed. Reg. Version) (April 11, 2013); CFTC Announces the Beginning of Mandatory Clearing for Certain Swap Classes (with Lofchie Comment) (March 11, 2013); CFTC Issues Clearing Determination for Certain Credit Default Swaps and Interest Rate Swaps (November 28, 2012); CFTC Issues Two Temporary Exemptions from the Clearing Requirement for Swaps: (i) Affiliated Counterparties and (ii) Cooperatives (November 28, 2012).