What is an eligible contract participant under the Commodity Exchange Act?
What is an eligible contract participant under the Commodity Exchange Act?
An eligible contract participant (ECP) is an entity or individual allowed to engage in certain financial transactions that are not open to the average investor. ECPs are often corporations, partnerships, organizations, trusts, brokerage firms, or investors that have total assets in the millions.
Is a commodity pool operator an eligible contract participant?
Eligible Contract Participant: An entity, such as a financial institution, insurance company, or commodity pool, that is classified by the Commodity Exchange Act as an eligible contract participant based upon its regulated status or amount of assets.
What is a major swap participant?
Definition of “Major Swap Participant” (MSP) A person whose outstanding swaps create “substantial counterparty exposure that could have serious adverse effects on the financial stability of the United States banking system or financial markets.”
What is a swap participant?
A Major Swap Participant is a person or entity that maintains a substantial net position in swaps, exclusive of hedging for commercial risk, or whose positions creates such significant exposure to others that it requires monitoring.
What is a major swap participant under Dodd Frank?
What is a commercial entity example?
Commercial Entity means any corporation, partnership, limited partnership, proprietorship, sole proprietorship, firm, enterprise, franchise, or association that performs a commercial activity in this state. Academic universities and other bona fide non-profit entities are not Commercial Entities.
Does an entity must be an eligible contract participant to trade a swap on a designated contract market?
Yes. A borrower must be an “eligible contract participant,” as defined in section 1a(18) of the Commodity Exchange Act (“CEA”), in order to use an interest rate swap to hedge interest rate risk incurred by that borrower in a commercial lending transaction.
What is a swap dealer under Dodd-Frank?
According to Section 721 of the Dodd-Frank Act, a swap dealer is an entity that: Holds itself out as dealer in swaps; Makes a market in swaps; Regularly enters into swaps with counterparties as an ordinary course of business for its own account; or.
