Key takeaways:

• On October 12, 2012, the Office of General Counsel of the CFTC issued a No-Action and Interpretation Letter providing additional interpretative guidance of, and certain no-action relief with respect to, the application of the “eligible contract participant" ("ECP") definition.
• This letter provided three interpretations: (1) swap guarantors must be ECPs, (2) cash proceeds from a loan may be included in the calculation of total assets in determining one’s ECP status, and (3) non-ECPs may not be jointly and severally liable for swap obligations.
• This letter provided three no-action reliefs: (1) a guarantor that satisfies certain conditions may guarantee swap obligations of a third party that is not an ECP, (2) under certain limited circumstances, a non-ECP could enter into a swap prior to achieving ECP status, and (3) in calculating the “amounts invested on a discretionary basis” for purpose of determining ECP status, one may use the same standards for calculating the amount of “investments” under the Investment Company Act of 1940 for purposes of determining “qualified purchaser” status.