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CFTC Representations: Difference between revisions
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==Introduction== | ==Introduction== | ||
The U.S. [[Commodity Futures Trading Commission]] (“'''{{tag|CFTC}}'''”) has jurisdiction over ALL products traded on any US exchange (this captures virtually all financial products, except for foreign jurisdiction specific products that are not traded in the US). | The U.S. [[Commodity Futures Trading Commission]] (“'''{{tag|CFTC}}'''”) has jurisdiction over ALL products traded on any US exchange (this captures virtually all financial products, except for foreign jurisdiction specific products that are not traded in the US). | ||
All {{tag|ISDA}}s must include certain representations in the {{ | All {{tag|ISDA}}s must include certain representations in the {{tag|ISDA}} Schedule to ensure that the {{isdama}} and the underlying Transactions fall into a safe harbor exempting the {{isdama}} / Transactions from regulation by the [[Commodity Futures Trading Commission]] (“'''{{tag|CFTC}}'''”) and are not deemed illegal off-exchange transactions. | ||
==Background== | ==Background== | ||
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Accordingly, the '''[[Eligible Contract Participant]]''' (“'''ECP'''”) representation is included in our ISDA Schedule to ensure we can meet the standard of having a “reasonable belief” that our counterparty is an ECP, and therefore the transaction in question is considered to be of a class of transaction to be exempt or excluded from the regulatory framework of the CEA and its primary enforcer, the {{tag|CFTC}}. | Accordingly, the '''[[Eligible Contract Participant]]''' (“'''ECP'''”) representation is included in our ISDA Schedule to ensure we can meet the standard of having a “reasonable belief” that our counterparty is an ECP, and therefore the transaction in question is considered to be of a class of transaction to be exempt or excluded from the regulatory framework of the CEA and its primary enforcer, the {{tag|CFTC}}. | ||
The definition of '''Eligible Contract Participant''' includes most entities having, or being guaranteed by entities having, total assets exceeding USD 10 million, ERISA plans having total assets exceeding USD 5 million, governmental entities, and some other categories of investors. | The definition of '''Eligible Contract Participant''' includes most entities having, or being guaranteed by entities having, total assets exceeding USD 10 million, {{tag|ERISA}} plans having total assets exceeding USD 5 million, governmental entities, and some other categories of investors. | ||
===[[ECP]] Rep wording=== | ===[[ECP]] Rep wording=== | ||