November 18, 2015
Washington, DC — Staff from the Division of Swap Dealer and Intermediary Oversight and the Office of the Chief Economist of the U.S. Commodity Futures Trading Commission (CFTC or Commission) today issued a Preliminary Report regarding the swap dealer de minimis exception. Under CFTC rules, market participants who exceed $8 billion in gross notional swap dealing activity over a twelve-month period are required to register with the Commission as swap dealers during the phase-in period currently in effect. This phase-in period is scheduled to end, and the threshold will fall, to $3 billion in December 2017, unless the Commission takes action to amend the de minimis exception.
The Dodd-Frank Act directed the CFTC to require registration and oversight of swap dealers and to establish a de minimis exception. Under that oversight regime, a registered swap dealer must comply with a variety of regulations designed to reduce systemic risk, increase customer protections, and promote market integrity within the financial system. The regulations include requirements applicable to internal and external business conduct, reporting and recordkeeping, risk management, and chief compliance officer designation and responsibilities. Today, more than 100 swap dealers are provisionally registered with the Commission.
The Preliminary Report is being issued pursuant to CFTC rules defining “swap dealer,” which direct staff to publish a report that analyzes swap data to assess the exception. The Preliminary Report discusses the background of the de minimis exception and swap dealer regulation, as well as the available swap data used in developing estimates of swap dealing activity. The Preliminary Report also discusses the potential effects of raising or lowering the threshold and several possible alternative approaches to the de minimis exception.
In the interest of ensuring that the Commission has as much information and data as practicable for purposes of its consideration with respect to the de minimis exception, the Preliminary Report will be open for public comment for 60 days after publication on the Commission’s website. Comments on the Preliminary Report may be submitted electronically through the Commission’s Comments Online process.
Last Updated: November 18, 2015