Public Statements & Remarks

Statement of Commissioner J. Christopher Giancarlo on the
Swap Dealer De Minimis Exception Final Report

August 15, 2016

Today’s final staff report regarding the swap dealer de minimis exception contains no recommendations to the Commission. That is not helpful. However, I understand that the Commission will now undertake a proposed rulemaking to determine the swap dealer registration threshold. While I support a notice and comment rulemaking, I am disappointed that the Commission has not acted to eliminate, or at least extend, the automatic phase-in of the $3 billion threshold.

Given that the Commission has provided no clarity to the marketplace of its intention with respect to the de minimis threshold, market participants have no practical choice but to prepare for the threshold lowering to $3 billion. Their efforts would be a waste of time and energy if the Commission ultimately decides a different outcome.

In addition, the potential drop in the threshold is already having a negative impact on the marketplace and hurting smaller players who have fewer swap counterparties with which to hedge. As I previously said, a drop in the threshold would have the effect of causing many non-financial companies to curtail or terminate risk-hedging activities with their customers, limiting risk-management options for end-users and ultimately consolidating marketplace risk in only a few large swap dealers.1 The Commission has already witnessed the negative results of setting a de minimis threshold too low as was the case with utility special entities.2 The Commission should learn from that mistake. It should follow Congress’s clear instruction and keep the registration threshold at $8 billion.3

1 Statement of Commissioner J. Christopher Giancarlo Swap Dealer De Minimis Exception Preliminary Report, Nov. 18, 2015.

2 Opening Statement of Commissioner J. Christopher Giancarlo, Open Meeting on Proposed Rule on Margin Requirements for Uncleared Swaps and Final Rule on Utility Special Entities, Sept. 17, 2014.

3 H.R. Rep. No. 114-205 at 76 (2015), available at

Last Updated: August 15, 2016