On November 5, 2018, the Commodity Futures Trading Commission unanimously voted to adopt a final rule that would permanently set the swap dealer de minimis registration threshold at $8 billion. Absent further action by the CFTC, the de minimis threshold was previously scheduled to drop to $3 billion on December 31, 2019.
Under the final rule, as under current requirements, firms with swap dealing activity below the aggregate gross notional amount (AGNA) threshold of $8 billion over the previous 12 months would be exempt from the CFTC's swap dealer registration requirements. The CFTC said its analysis concluded that the $8 billion threshold subjects approximately 98% of swap transactions to swap dealer regulations. In the CFTC's determination, a $3 billion threshold would only subject a small number of additional swap transactions to such regulation, but would likely decrease swap market liquidity.
The CFTC had also previously proposed several other measures for the de minimis threshold, such as excluding swaps of insured depository institutions made in connection with loans from a firm's AGNA calculation. Although the CFTC did not adopt any of these additional proposals in the final rule, CFTC Chairman J. Christopher Giancarlo said he will direct CFTC staff to continue their analysis of these measures and other issues raised in comments on the rule.
The final rule is available at: https://www.cftc.gov/sites/default/files/2018-11/federalregister110518.pdf, the CFTC's fact sheet on the final rule is available at: https://www.cftc.gov/sites/default/files/2018-11/AdoptingRelease_factsheet110518.pdf, the CFTC Chairman Giancarlo's statement is available at: https://www.cftc.gov/PressRoom/SpeechesTestimony/giancarlostatement110518 and CFTC Commissioner Dan Berkovitz's statement is available at: https://www.cftc.gov/PressRoom/SpeechesTestimony/berkovitzstatement110518.
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