CFTC staff 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 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.

CFTC Commissioner J. Christopher Giancarlo said “The issuance of this report is a reminder that the CFTC botched the policy analysis in 2012 when it implemented its current swap dealer registration de minimis rules. Dodd-Frank’s remedy for swap dealer counterparty risk is to move more swaps from bilateral to central counterparty clearing, not to make it more burdensome to transact cleared swaps.”