Disclosure of Material Information for Swaps

KeyBank National Association (“KBNA,” “we,” “us” or “our”) will be registered as a swap dealer with the Commodity Futures Trading Commission (“CFTC”) as of November 30, 2013.  CFTC Regulation § 23.431 requires that before a registered swap dealer enters into any “swap,” as defined in Section 1a(47) of the Commodity Exchange Act, as amended (the “CEA”) and CFTC Regulation §1.3(xxx) (a “Swap” or, alternatively, a “Transaction”) with someone other than another swap dealer, major swap participant, security-based swap dealer, or major security-based swap participant (“you”), the registered swap dealer discloses to you certain material information regarding the proposed Swap, sufficient for you to evaluate:

  1. the material risks of the Swap, including market, credit, liquidity, foreign currency, legal, operational and other applicable risks,
  2. the material characteristics of the Swap, including the material economic terms, operational terms, and the rights and obligations of the parties during the term of the Swap, and
  3. the material incentives and conflicts of interest that may apply with respect to the Swap, including the price and pre-trade mid-market mark of the Swap and any compensation or other incentive we may receive from any source other than you in connection with the Swap.

Accordingly, this website provides certain disclosures (“Material Information”) to you on or through this website, or websites of others, via one or more documents, URLs or hyperlinks specified herein. 

If you will enter into or contemplate entering into a “swap” with us and you are not a “swap dealer,” “major swap participant,” “security-based swap dealer,” or “major security-based swap participant” (each as defined in the CEA or the regulations of the CFTC), we request that you carefully review all Material Information provided on this website prior to entering into any Swap with us.  The Material Information is provided pursuant to our Terms of Service.

The Material Information is organized by asset class, which you can access by selecting the appropriate link from the menu in the left side-bar.  If, for example, you are entering into an interest rate swap, please review the disclosures on the “Interest Rate Swaps” page; and if you are entering into a foreign exchange transaction please review the disclosures on the “FX” page. 

The General Disclosure Statement for Transactions that appears on each asset class page, together with each Disclosure Annex relevant to a particular asset class, contains important information and disclosures about the associated material risks, characteristics, incentives and conflicts of interest. If a Swap has characteristics of more than one asset class, then you should read the General Disclosure Statement for Transactions together with each relevant Disclosure Annex. 

Copies of pre-printed forms of International Swaps and Derivatives Association, Inc. (“ISDA”) master agreements, credit support documentation and definitions and other forms of governing documentation are included on each asset class page and should be reviewed when a Swap transaction is governed by, or incorporates by reference, such a document. 

Daily Marks

For each un-cleared Swap executed between us, we will provide you with a daily mid-market mark (the “Daily Mark”) through a password-protected web page.  Disclosures regarding the calculation of, and certain assumptions and variables underlying, Daily Marks are provided on that page.  If you have a Swap with us, but haven’t already established a password to access the Daily Mark information, please contact your KeyBank marketer, or call the phone number on the relevant asset class page to establish your password.  For Swaps originally executed between you and us, but which were subsequently cleared through a designated clearing organization ("DCO"), you have the right to receive the Daily Mark for the cleared Swap from the DCO.

Clearing

With respect to any Swap entered into between you and us that is subject to the mandatory clearing requirements under CEA §2(h), you have the sole right to select the DCO at which the Swap will be cleared.

With respect to any Swap that is not subject to the mandatory clearing requirements, you may elect to clear such Swap and you have the sole right to select the DCO at which the Swap will be cleared.

Upon acceptance of a Swap by a DCO:  (a) the original Swap between you and us is extinguished, (b) the original Swap between you and us is replaced by equal and opposite Swaps with the DCO; and (c) all terms of the Swap shall conform to the product specifications of the cleared Swaps established under the DCO’s rules.

Please note that prior to entering into any Swap that will be cleared, you must (1) notify us in writing of your preference of the DCO on which the Swap may be cleared, and (2) have taken all necessary action on your part for the Swap to be submitted for clearing, including engaging an appropriate futures commission merchant.  We may be unable to enter into any such Swap if we do not have clearing arrangements or capabilities with respect to that DCO or in that type of Swap.

You may be eligible for an exception to any clearing requirement.  Please contact your KeyBank marketer for further information regarding eligibility for the exception to clearing and/or the legal and operational requirements necessary to clear a Swap.

Scenario Analysis

Prior to entering into any Swap that is not “available for trading” (as such term is defined in CFTC Regulations) on a designated contract market or swap execution facility, you can request in writing, and consult on the design of, a scenario analysis to allow you to assess your potential exposure in connection with such Swap.

Updates

We may provide additional disclosures to supplement or supersede the Material Information provided herein.  Material Information owned or controlled by others, including ISDA, may likewise change from time to time on their websites or otherwise.  Revisit this website and relevant web pages regularly to ensure that you have the most up to date information and disclosures before entering into each Swap.

Conflicting Terms

Nothing herein or contained in any Material Information shall amend or supersede the express terms of any written or oral agreement between you and us, including any Swap confirmation or Swap trading relationship documentation. 

No Offer, Commitment, Advice or Recommendation

Furnishing you with the Material Information made available on or through this website, or the website of another organization, shall not be construed as an offer or commitment to enter into any Swap.  Furthermore, Material Information made available on or through this website, or the website of another organization, should not be considered advice or recommendations regarding any potential or existing Swap.   In respect of each Swap, and all interactions between you and us regarding Swaps, we are acting in our capacity as a counterparty and are not undertaking to assess the suitability of any Swap or strategy involving a Swap for you.  You must make your own, independent decision to enter into a Swap with us, and whether the Swap is suitable for you, based on your own judgment and the advice of any advisors you deem necessary.

ISDA Copyrights & Disclaimer

Please note that materials from ISDA referred to herein are subject to the ISDA Copyrights and ISDA Disclaimer of Liability, which we are furnishing you via this ISDA Copyrights link.

Questions

If you do not feel that the Material Information displayed on or made available to you through our website allows you to assess the material risks, characteristics, conflicts of interest or incentives of a proposed Swap, or you have any questions regarding the Material Information, please contact your KeyBank marketer on the relevant swap or foreign exchange desk.