Adding clarity and precision to derivative valuations Failure to properly measure the fair value of a derivative instrument can result in significant losses for a company. It can also lead to sub-optimal pricing when executing a derivative transaction. This translates into real economic losses over the life of the instrument. In addition, using outdated valuation modeling techniques or not understanding how derivative fair values are measured often lead to additional scrutiny from management, auditors, and regulators, further increasing costs to a company. Benefits of Chatham Derivative Valuation Services Independent third-party perspective: We cover all types of interest rate, foreign currency, and commodity derivatives, from caps and all types of swaps including cross-currency to FX forwards, options, and exotic derivatives. As a trusted third party that is independent and objective, Chatham offers a robust platform with proprietary methodology that provides real-time…

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On April 18 the Commodity Futures Trading Commission (“CFTC”) and the Securities and Exchange Commission (“SEC”) approved a final rule defining the terms “swap dealers,” “major swap participants,” and “eligible contract participants.” Many market participants were pleased that the regulators appeared to have listened to their concerns and defined the terms “swap dealers” and “major swap participants” in such a way that will not capture the vast majority of derivatives end users. The final rule provided less comfort to small end users, however, who may find that they will no longer be able to enter into over-the-counter derivative transactions because they do not qualify as “eligible contract participants.” – Major Swap Participants (“MSPs”): The final rule appears to be consistent with Congressional intent to focus the MSP definition on entities whose derivatives use is so material that the failure of…

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