The $8 billion swap dealer de minimis threshold adopted by the Commodity Futures Trading Commission (CFTC) five years ago will remain in place until at least the end of 2019, following a CFTC vote Thursday.
In April 2012, the CFTC and the Securities and Exchange Commission set the de minimis level at $8 billion, with the expectation that it would remain in effect during a phase-in period and then fall to $3 billion after CFTC conducted a study on the swap markets. The de minimis rules were included in Dodd-Frank Wall Street regulatory reforms that became effective at the end of 2012.
The order issued by CFTC Thursday pushes the swap dealer de minimis threshold phase-in termination date to the end of 2019.
"Because of this action, the de minimis threshold will remain at $8 billion until Dec. 31, 2019, instead of decreasing to $3 billion on Dec. 31, 2018," CFTC said. The extension gives CFTC "additional time to complete the current data analysis and for the CFTC to consider appropriate further action."
Earlier this month CFTC Chairman Christopher Giancarlo said he would request the regulatory agency postpone a decision on the de minimis threshold by a year, effectively delaying implementation until the end of 2018. Giancarlo said he intended to propose in the first half of next year a final resolution of swap dealer de minimis issues, and did not intend to roll the decision over again beyond 2018.
CFTC said in its order that "significant progress is being made in analyzing additional swap data that will be useful for the commission to assess appropriate amendments to the de minimis exception rule.
"However, any such modifications, if implemented, would not become effective until some point in 2018, after the CFTC completes the proposal, public comment, and final rule amendment process as required by the Administrative Procedure Act."