Staff of the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight issued a final report evaluating the CFTC’s current requirement that a person is not to be considered a swap dealer unless its swap dealing activities for the prior 12-month period exceed a gross notional threshold amount of US $3 billion after a phase-in requirement of US $8 billion. The phase-in period expires on December 31, 2017, unless the CFTC extends it, or modifies what is known as the “de minimis” exception. In its final report, staff makes no recommendation on what action the CFTC should take, but instead projects what impact lowering or increasing the de minimis threshold might have on the interest rate and credit default swap activity (insignificant, says staff, absent a “substantial” increase or decrease). Staff also estimates that if the de minimis threshold were lowered to US $3 billion, 84 additional entities trading IRS and CDS would have to register as swap dealers. In a statement on the staff’s final report, Commissioner J. Christopher Giancarlo indicated that the Commission would now seek public comment on a CFTC rule proposal regarding the de minimis threshold. However, he bemoaned that the delayed process leaves market participants “no practical choice” but to prepare for the scheduled lower threshold that could turn out to be “a waste of time and energy if the Commission ultimately decides a different outcome.” Staff of the CFTC issued a preliminary report on the de minimis threshold in November 2015. (Click here for details in the article, “Staff Issues Report on CFTC De Minimis Exception for Swap Dealer Registration But Makes No Recommendations” in the November 22, 2015 edition of Bridging the Week.)