Financial Sector Seeks to Exempt Swap Payments From Loan Treatment

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A coalition of financial industry groups is asking the Treasury Department to issue guidance that exempts upfront payments on swaps cleared through a derivatives clearing organization from rules that treat “significant” nonperiodic payments with respect to swaps as loans.

Instead, such payments should be treated as nonsignificant payments under Treasury Regulations Section 1.446-3, the groups said in a comment letter issued June 13.
The coalition includes CME Group Inc., the Securities Industry and Financial Markets Association (SIFMA), the North American Tax Committee of the International Swaps and Derivatives Association (ISDA) and the Futures Industry Association (FIA).