Impact of New Derivatives Regulations on Nonfinancial Companies

Impact of New Derivatives Regulations on Nonfinancial Companies

Blog Keeping Current: Disclosure and Governance Developments

Companies that use derivatives should note that the Dodd-Frank Act’s sweeping new derivatives provisions are beginning to be implemented. Many of the Dodd-Frank Act’s requirements apply to nonfinancial public and private companies that use derivatives. Some companies may be able to rely on an “end user” exception from some of the regulations’ requirements, especially the requirements that derivative transactions be cleared through a registered derivatives clearing organization and traded on a regulated exchange or exchange-equivalent. Importantly, a public company that wishes to rely on this exception will need approval by its board of directors or a committee to which the decision is specifically delegated. For more information, see WilmerHale’s new guide, The New Swaps Regime: A Primer for Nonfinancial Companies. WilmerHale will also present a webinar on this subject on January 22, which will address in greater detail the Dodd-Frank Act’s implications for nonfinancial corporations that use derivatives. Register for the webinar.

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