[Code of Federal Regulations]
[Title 17, Volume 1]
[Revised as of April 1, 2006]
From the U.S. Government Printing Office via GPO Access
[CITE: 17CFR35.2]

[Page 407-408]
 
              TITLE 17--COMMODITY AND SECURITIES EXCHANGES
 
             CHAPTER I--COMMODITY FUTURES TRADING COMMISSION
 
PART 35_EXEMPTION OF SWAP AGREEMENTS--Table of Contents
 
Sec.  35.2  Exemption.

    A swap agreement is exempt from all provisions of the Act and any 
person or class of persons offering, entering into, rendering advice, or 
rendering other services with respect to such agreement, is exempt for 
such activity from all provisions of the Act (except in each case the 
provisions of sections 2(a)(1)(B), 4b, and 4o of the Act and Sec.  32.9 
of this chapter as adopted under section 4c(b) of the Act, and the 
provisions of sections 6(c) and 9(a)(2) of the Act to the extent these 
provisions prohibit manipulation of the market price of any commodity in 
interstate commerce or for future delivery on or subject to the rules of 
any contract market), provided the following terms and conditions are 
met:
    (a) The swap agreement is entered into solely between eligible swap 
participants at the time such persons enter into the swap agreement;
    (b) The swap agreement is not part of a fungible class of agreements 
that are standardized as to their material economic terms;
    (c) The creditworthiness of any party having an actual or potential 
obligation under the swap agreement would be a material consideration in 
entering into or determining the terms of the swap agreement, including 
pricing, cost, or credit enhancement terms of the swap agreement; and
    (d) The swap agreement is not entered into and traded on or through 
a multilateral transaction execution facility;

Provided, however, That paragraphs (b) and (d) of Rule 35.2 shall not be 
deemed to preclude arrangements or facilities between parties to swap 
agreements, that provide for netting of payment obligations resulting 
from such swap agreements nor shall these subsections be deemed to 
preclude arrangements or facilities among parties to swap agreements, 
that provide for netting of payments resulting from such swap 
agreements; Provided further, That any person may apply to the 
Commission for

[[Page 408]]

exemption from any of the provisions of the Act (except 2(a)(1)(B)) for 
other arrangements or facilities, on such terms and conditions as the 
Commission deems appropriate, including but not limited thereto, the 
applicability of other regulatory regimes.