IRS Rules on Notional Principal Contracts May Clear `Significant Obstacle’ for Swaps

New Internal Revenue Service final and temporary rules (T.D. 9719, RIN 1545-BM62) on notional principal contracts with nonperiodic payments will clear the way for greater clearing of swaps, an industry representative said.

Issued May 7, the rules remove a “significant obstacle” for such clearing under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L. No. 111-203), according to Payson Peabody, managing director and tax counsel for the Securities Industry and Financial Markets Association.

“We’re really pleased with the regulations,” he told Bloomberg BNA by phone May 7. “They respond to an inconsistency between Dodd-Frank ...