Under Dodd Frank Act, MSP is a person that satisfies any of the following: 1. It maintains a ?substantial position? in any of the major swap categories, excluding positions held for hedging or mitigating commercial risk; 2. A person whose outstanding swaps create ?substantial counterparty exposure that could have serious adverse effects on the financial stability of the United States banking system or financial markets.?. It is ?highly leveraged relative to the amount of capital such entity holds and that is not subject to capital requirements.”
