Bill > S2976

This bill, known as the Derivatives End-Users Clarification Act, amends the Commodity Exchange Act and the Securities Exchange Act of 1934 to clarify how certain clearing requirements apply to transactions between affiliated companies. Specifically, it modifies rules that allow certain companies to be exempt from clearing requirements for financial derivatives, known as "swaps" under the Commodity Exchange Act and "security-based swaps" under the Securities Exchange Act. The bill states that an affiliate of a company that qualifies for an exception can also qualify, but only if the affiliate uses the swap to hedge or mitigate the commercial risk of the original company or another non-financial affiliate. This clarification also applies to affiliates primarily involved in financing the purchase of merchandise or manufactured goods. If this hedging is done through a swap with a "swap dealer" or "major swap participant" (entities that trade swaps in large volumes), an appropriate credit support measure or other mechanism must be used to manage risk. These new requirements will not apply to swaps entered into before the bill becomes law.