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Entities that are non-financial end-users of swaps (i.e., that are not financial entities) are allowed to rely on the end-user exception.
Regulation around UMR came about as a response to the financial crisis of 2008-2009. One of the r that was recommended was the implementation of margin requirements for non-centrally cleared derivatives. The in-scope OTC derivatives include FX options, NDFs, physical FX forwards, swaptions and hedging trades.
Under the CFTC's rules, financial end user means anycounterparty that is not a swap dealer or a major swap.
The counterparty is registered with the CFTC as a swap dealer. The end user is a Financial End User (as defined in the PR or the CFTC IM Rules). The end user is not an affiliate of its swap dealer counterparty.
1. Under the U.S. prudential regulators' rules, financial end. user means any counterparty that is not a swap dealer, a. security-based swap dealer, a major swap participant or.