Key takeaways:

• The CFTC has adopted final rules to exempt swaps between certain affiliated entities, with certain modifications to and clarifications from the proposed rules.
• The final rules permit "eligible affiliate counterparties" to elect not to clear a swap if: both counterparties elect not to clear the swap, the terms of the swap are documented, the swap is subject to a centralized risk management program and the counterparties comply with certain reporting requirements and certain additional requirements when entering into swaps with an unaffiliated counterparty.
• In order to elect the exemption, when entering into a swap with an unaffiliated counterparty, each eligible affiliate counterparty must either (1) comply with the U.S. clearing requirements or an exception or exemption therefrom, (2) comply with a foreign jurisdiction's clearing mandate or an exception or exemption therefrom (subject to certain determinations by the CFTC), (3) clear the swap through a clearing organization subject to supervision in its home country, or (4) comply with certain temporary alternative compliance frameworks.