CFTC Modifies Clearing Requirement for Canadian Dollar and Mexican Peso Interest Rate Swaps

The Commodity Futures Trading Commission (CFTC) today issued a final rule to modify its interest rate swap clearing requirement, updating the types of swaps that must be submitted for clearing to a derivatives clearing organization or an exempt DCO under part 50 of the CFTC’s regulations.

The final rule specifically removes the clearing requirement for interest rate swaps referencing the Canadian Dollar Offered Rate (CADOR) and the Interbank Equilibrium Interest Rate (TIIE). These have been replaced with a new requirement to clear Canadian dollar (CAD)- and Mexican peso (MXN)-denominated interest rate swaps that reference overnight, nearly risk-free rates.