(Reuters) - U.S. lawmakers worked through the night to finalize on Friday new legislation for the $615 trillion over-the-counter derivatives market.
Here are some of the key agreements for swaps rules agreed to by a conference panel of Senate and House of Representatives members:
* Banks can trade foreign exchange and interest rate swaps in house, as well as gold and silver swaps, and derivatives deigned to hedge their own risk.
* Banks need to spin off desks to affiliates to handle agricultural, energy and metals swaps, equity swaps, and uncleared credit default swaps.
* Non-financial companies “using swaps to hedge or mitigate commercial risk” are exempt from clearing the trades, as long as they explain to regulators how they are meeting financial obligations.
* The financing arms of manufacturers like Ford Motor Co, Deere & Co, Caterpillar Inc and Boeing and other “end users” do not have to clear swaps when they assist in selling the parent company’s products.
* Clearinghouses will not be forced to accept credit risk from other clearinghouses — interpreted as a win for the CME Group, the world’s biggest operator of futures exchanges.
* Federal Reserve governors and the Treasury secretary would need to agree before a clearinghouse could access the Fed’s emergency funds.
* Firms engaged in a “de minimis” amount of swap dealing with or on behalf of customers will be exempt from new rules for swaps dealers.
* Capital and margin requirements for uncleared swaps done by non-bank swap dealers and major players will be set at “appropriate” levels, softening earlier language that said levels would be as strict or stricter than those set for banks.
* Traders can use non-cash collateral to meet margin requirements.
* Regulators “shall” set limits on speculative positions “as appropriate” but have authority to exempt traders or types of swaps from the limits.
* Movie futures will be banned.
* There will be no ownership restrictions set for major swaps players, banks and financial companies involved in clearinghouses, exchanges, or swap execution facilities.
* Regulators will have at least a year after the time of passage to implement the legislation.
Reporting by Roberta Rampton and Charles Abbott, editing by Jackie Frank