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On March 20, the Commodity Futures Trading Commission (CFTC) adopted a final rule regarding customer clearing documentation for swaps. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, requires that many swaps be cleared through derivatives clearing organizations (DCOs). When a swap is cleared, the original swap is extinguished and is replaced by equal and opposite swaps between each counterparty (or their clearing members) and the DCO. This enables each counterparty to substitute the credit of the other party for that of the DCO through the process of novation.

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