CFTC petitioned to allow clearing of OTC agricultural contracts

The petition calls on the CFTC to amend Regulation 35 (Part 35) to allow for swap and swaption (option on swap) agreements – two-party OTC contracts priced off of agricultural commodity futures – to be cleared through a registered derivative clearing organization (DCO) such as CME or Nymex. Currently, specific permission from the CFTC is required.

According to Agora-X, enacting this amendment would promote the clearing of agricultural derivatives, reduce counterparty credit risks and enhance