The Commodity Futures Trading Commission today issued an order delaying the termination date of the phase-in period of the swap dealer de minimis threshold until Dec. 31, 2018. In doing so, the CFTC prevented the de minimis threshold from dropping to $3 billion at the end of 2017. ABA has previously noted that lowering the de minimis threshold could limit the ability of many commercial end users to access the swaps market in order to manage risk responsibly. (Entities that deal in notional amounts greater than the de minimis threshold are required to register with the CFTC as swaps dealers.)
The CFTC order follows the publication of a final staff report on the swap dealer de minimis exception in which CFTC staff provided analysis of available swaps data and the effects of a lower or higher de minimis threshold. As recognized by the CFTC, however, the current data set available to the CFTC is incomplete and unreliable. The commission said that during the delay, it will continue to evaluate data and the effects of new regulations, particularly capital requirements for swap dealers. The order also noted that “prior to the termination of the phase-in period, the commission may take further action regarding the de minimis threshold by rule amendment, order, or other appropriate action.”
In its comment letter to the agency, ABA urged the CFTC to provide market certainty while it continues to analyze data by, at a minimum, maintaining the current $8 billion threshold level. ABA will continue to engage with the CFTC as it deliberates over the proper threshold level.