SIFMA provides comments with  to the U.S. Department of Treasury and the Internal Revenue Service (IRS) on guidance under Section 956 of the Internal Revenue Code (the Code) relating to cross-border cash-collateralized derivatives transactions.  SIFMA responds to a request for comments made in the preamble to Temporary Treasury regulation section 1.956-2T(b)(1)(xi), relating to the definition of “United States property” in connection with certain swaps that are cleared by a U.S.-registered clearing organization.

SIFMA requests that regulations be issued confirming that an “upfront payment” on a swap or other derivative financial instrument made by a controlled foreign corporation (CFC) to a U.S. affiliate in the ordinary course of a swaps dealer business is not treated as an investment in United States property to the extent that the U.S. affiliate provides cash or readily marketable securities to the CFC as collateral for the swap.