---
kind: "section"
citation: "17 C.F.R. § 23.430"
title: "17"
number: "23.430"
heading: "Verification of counterparty eligibility."
url: "https://uscodex.org/cfr/17/23.430"
---

# §23.430. Verification of counterparty eligibility.

- (a) **Eligibility.** A swap entity shall verify that a counterparty meets the eligibility standards for an eligible contract participant, as defined in section 1a(18) of the Act and [§ 1.3](/cfr/17/1.3.md) of this chapter, before offering to enter into or entering into a swap with that counterparty.
- (b) **Special Entity.** In verifying the eligibility of a counterparty pursuant to [paragraph (a)](#a) of this section, a swap entity shall also verify whether the counterparty is a Special Entity.
- (c) **Special Entity election.** In verifying the eligibility of a counterparty pursuant to [paragraph (a)](#a) of this section, a swap entity shall verify whether a counterparty is eligible to elect to be a Special Entity under [§ 23.401(h)(6)](/cfr/17/23.401.md?p=h-6) and, if so, notify such counterparty of its right to make such an election.
- (d) **Safe harbor.** A swap entity may rely on written representations of a counterparty to satisfy the requirements of this section as provided in [§ 23.402(d)](/cfr/17/23.402.md?p=d). A swap entity will have a reasonable basis to rely on such written representations for purposes of the requirements in paragraphs [(a)](#a) and [(b)](#b) of this section if the counterparty specifies in such representations the provision(s) of section 1a(18) of the Act or [paragraph(s)](/cfr/17/1.3.md) of § 1.3 of this chapter that describe its status as an eligible contract participant and, in the case of a Special Entity, the paragraph(s) of the Special Entity definition in [§ 23.401(h)](/cfr/17/23.401.md?p=h) that define its status as a Special Entity.
- (e) **Exceptions.** This section shall not apply with respect to a transaction that is:
  - (1) Initiated on a designated contract market;
  - (2) Initiated with a counterparty whose identity is not known to the swap entity prior to execution on a swap execution facility, or a trading facility currently exempted from registration as a swap execution facility by the Commission pursuant to section 5h(g) of the Act;
  - (3) An A-ITBC Swap; or
  - (4) An ITBC Swap initiated on a swap execution facility, or a trading facility currently exempted from registration as a swap execution facility by the Commission pursuant to [section 5h(g)](/cfr/17/5h.md?p=g) of the Act.

## Notes

### Source

Source: 90 FR 61252, Dec. 30, 2025, unless otherwise noted.

### Authority

Authority: 7 U.S.C. 1a, 2, 6, 6a, 6b, 6b-1, 6c, 6p, 6r, 6s, 6t, 9, 9a, 12, 12a, 13b, 13c, 16a, 18, 19, 21. Section 23.160 also issued under 7 U.S.C. 2(i); Sec. 721(b), Pub. L. 111-203, 124 Stat. 1641 (2010).

### Source

Source: 77 FR 2628, Jan. 19, 2012, unless otherwise noted.