CFTC Proposes Amendments to Swap Dealer De Minimis Exception
June 18, 2018
On June 5, 2018, the CFTC released proposed amendments to the de minimis exception to the “swap dealer” definition.
The proposed amendments would permanently fix the threshold below which a person qualifies for the exception at $8 billion aggregate gross notional amount of swaps entered into as part of dealing activity by the person or any of its affiliates not registered as swap dealers over a rolling, 12-month period. The CFTC also proposed to expand or codify exclusions for (1) certain swaps between an insured depository institution and its customer in connection with loan origination, (2) certain swaps entered into to hedge physical or financial positions and (3) swaps resulting from multilateral compression exercises. In addition, the CFTC requested comments on the possible addition of a dealing counterparty count and/or dealing transaction count threshold as new components of the de minimis threshold and possible exclusions for non-deliverable foreign exchange forwards and exchange-traded and/or cleared swaps.