2018-12362: De Minimis Exception to the Swap Dealer Definition

Summary

The Commodity Futures Trading Commission ("Commission" or "CFTC") is proposing to amend the de minimis exception within the "swap dealer" definition in the Commission's regulations by: Setting the aggregate gross notional amount threshold for the de minimis exception at $8 billion in swap dealing activity entered into by a person over the preceding 12 months; excepting from consideration when calculating the aggregate gross notional amount of a person's swap dealing activity for purposes of the de minimis threshold: Swaps entered into with a customer by an insured depository institution in connection with originating a loan to that customer; swaps entered into to hedge financial or physical positions; and swaps resulting from multilateral portfolio compression exercises; and providing that the Commission may determine the methodology to be used to calculate the notional amount for any group, category, type, or class of swaps, and delegating to the Director of the Division of Swap Dealer and Intermediary Oversight ("DSIO") the authority to make such determinations (collectively, the "Proposal"). In addition, the Commission is seeking comment on the following additional potential changes to the de minimis exception: Adding a minimum dealing counterparty count threshold and a minimum dealing transaction count threshold; excepting from consideration when calculating the aggregate gross notional amount for purposes of the de minimis threshold swaps that are exchange-traded and/or cleared; and excepting from consideration when calculating the aggregate gross notional amount for purposes of the de minimis threshold swaps that are categorized as non- deliverable forward transactions.

The agency’s own summary, as published.

What this changes

Amends 1 part of the Code of Federal Regulations — the standing rules this notice rewrites.

• 17 CFR 1 General Regulations Under the Commodity Exchange Act