Commodity Futures Trading Commission ♦ Office of Public Affairs ♦ 202-418-5080 

Commodity Futures Trading Commission

Office of Public Affairs

Three Lafayette Centre

1155 21st Street, NW

Washington, DC 20581

www.cftc.gov

November 18, 2015

Swap Dealer De Minimis Exception Preliminary Report 

Staff from the Division of Swap Dealer and Intermediary Oversight and the Office of the Chief Economist of the 

U.S. Commodity Futures Trading Commission (Commission) is issuing a swap dealer de minimis exception 

preliminary report (Preliminary Report).

Overview of the Preliminary Report 

The Preliminary Report is prepared pursuant to Regulation 1.3(ggg)(4)(ii)(B), which directs staff to publish for 

public comment a report that analyzes swap data to assess the de minimis exception. 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 Regulation 1.3(ggg)(4)(i).

Swap dealers must comply with a variety of regulations designed to reduce systemic risk, increase customer 

protections, and promote market integrity within the financial system. These regulations include requirements 

applicable to internal and external business conduct, reporting and recordkeeping, risk management, and chief 

compliance officer designation and responsibilities. Today, more than 100 swap dealers are provisionally 

registered with the Commission.

The Preliminary Report has five sections. Sections I and II provide an overview of the Preliminary Report and 

the statutory and regulatory provisions relevant to the de minimis exception. Section III discusses the data 

available, the methodology for analyzing the data, and certain observations from this analysis. Section IV 

discusses the policy considerations underlying swap dealer regulation and the de minimis exception.

Section V considers the data in light of the current $8 billion de minimis threshold, the potential effects of 

raising or lowering the threshold, and several possible alternatives to the current de minimis exception. The 

alternative approaches considered are largely derived from alternatives considered during the swap dealer 

definition rulemaking process as well as staff’s observations from the data analysis. The following alternatives 

are discussed: (1) a notional de minimis threshold specific to each asset class; (2) a multi-factor approach that 

would potentially include counterparty count and/or transaction count metrics in the de minimis exception, in 

addition to a gross notional dealing threshold; (3) a multi-tiered approach where the regulatory requirements 

associated with swap dealer registration are commensurate with an entity’s level of dealing activity; and (4) the 

exclusion from an entity’s de minimis calculation of swaps that are traded on a registered or exempted swap 

execution facility or designated contract market and/or cleared.

The report is preliminary in nature and does not make recommendations to the Commission on the appropriate 

de minimis level or alternatives to the current de minimis exception. Rather, the Preliminary Report uses the 

extensive data available since swap transaction reporting requirements were implemented pursuant to the 

Dodd-Frank Act to further explore the general policy issues that may be relevant for additional analysis of the 

de minimis exception. The report is designed to seek public comment and to consider those comments before 

making a final report to the Commission.