Text extracted via OCR from the original document. May contain errors from the scanning process.
-Hedging Individual ECP" means an individual who has amounts invested on a discretionary basis, the
aggregate of which is in excess of $5 million, and enters into swaps to manage the risk associated with an
asset or liability that is or is reasonably likely to be owned or incurred by such individual.
"Hedging or Mitigating Commercial Risk" has the meaning set out in CFTC Regulation 50.50(c) and
includes the following swaps:
(i)
a swap that either:
(A)
is economically appropriate to the reduction of risks in the conduct and
management of a commercial enterprise. where the risks arise from: (1) the
potential change in the value of assets that a person owns, produces,
manufactures, processes, or merchandises or reasonably anticipates owning,
producing, manufacturing, processing, or merchandising in the ordinary course of
business of the enterprise; (2) the potential change in the value of liabilities that a
person has incurred or reasonably anticipates incurring in the ordinary• course of
business of the enterprise; (3) the potential change in the value of services that a
person provides, purchases. or reasonably anticipates providing or purchasing in
the ordinary course of business of the enterprise; (4) the potential change in the
value of assets, services, inputs, products, or commodities that a person owns,
produces, manufactures, processes, merchandises, leases, or sells, or reasonably
anticipates owning, producing, manufacturing, processing, merchandising,
leasing, or selling in the ordinary course of business of the enterprise; (5) any
potential change in value related to any of the foregoing arising from interest,
currency, or %reign exchange rate movements associated with such assets.
liabilities, services. inputs, products. or commodities; or (6) any fluctuation in
interest, currency, or foreign exchange rate exposures arising from a person's
current or anticipated assets or liabilities; or
(B)
qualifies as bona fide hedging for purposes of an exemption from position limits
under the CEA; or
(C)
qualifies for hedging treatment under: (I) Financial Accounting Standards Board
Accounting Standards Codification Topic 815, Derivatives and Hedging
(formerly known as Statement No. 133); or (2) Governmental Accounting
Standards Board Statement 53, Accounting and Financial Reporting for
Derivative Instruments; w.4
(ii)
such swap is:
(A)
not used for a purpose that is in the nature of speculation, investing, or trading;
and
(B)
not used to hedge or mitigate the risk of another swap or security-based swap
position, unless that other position itself is used to hedge or mitigate commercial
risk as described above or as set out in Exchange Act Rule 3a67-4.
"Insurance Company" means an insurance company regulated by a State or by a foreign government
subject to comparable regulation as determined by the CFTC (or a regulated subsidiary or affiliate of such
an insurance company).
"Insured Depository Institution" is defined in Section 3(c) of the Federal Deposit Insurance Act and
includes any bank or savings association the deposits of which are insured by the Federal Deposit
Insurance Corporation pursuant to that Act, as well as any uninsured branch or agency of a foreign bank
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CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e)
DB-SDNY-0093401
CONFIDENTIAL
SDNY GM_00239585
EFTA01389106