US Derivatives Regulation: The Eligible Contract Participant (ECP) Requirement for OTC Derivatives and Implications for Secured Lending | Practical Law

US Derivatives Regulation: The Eligible Contract Participant (ECP) Requirement for OTC Derivatives and Implications for Secured Lending | Practical Law

A Practice Note explaining how the CFTC interprets the status of guarantors and pledgors in swap arrangements under the Commodity Exchange Act (CEA), which requires all swap guarantors to be eligible contract participants (ECPs) under the CEA. This Note discusses the consequences of that interpretation for secured bank financings and related credit support features, and suggests certain steps parties may take to address these potential consequences.

US Derivatives Regulation: The Eligible Contract Participant (ECP) Requirement for OTC Derivatives and Implications for Secured Lending

by Milbank, Tweed, Hadley & McCloy LLP and Practical Law Finance
Maintained • USA (National/Federal)
A Practice Note explaining how the CFTC interprets the status of guarantors and pledgors in swap arrangements under the Commodity Exchange Act (CEA), which requires all swap guarantors to be eligible contract participants (ECPs) under the CEA. This Note discusses the consequences of that interpretation for secured bank financings and related credit support features, and suggests certain steps parties may take to address these potential consequences.