U.S. – CFTC Cleared De Minimis Report

U.S. – CFTC Cleared De Minimis Report

On 8 July 2019 CFTC report on exempting cleared swaps from de minimis.

  • Follows final amendment of de minimis requirements for bank dealers.
  • Also follows permanent de minimis threshold at $8bn for swap dealers.

Study Analysis

  • Present data and specific analysis, focus is regarding on-venue and cleared swaps.
  • To study alternative metrics for calculating swap dealer (SD) de minimis threshold.
  • Giancarlo instructed DSIO to carry out study, see if cleared swaps can be removed.
  • Measures estimated 'regulatory coverage' of market (percentage of market subject to swap dealer regulation) under various 'exclusion scenarios' from $8bn threshold.
  • If removed cleared on exchange, 99.95% of market still covered by SD regulation.

Quintenz Speech

  • Commissioner Quintenz spoke, said study confirms cleared and exchange-traded
    swaps could be removed from calculation with no lowering of regulatory coverage.
  • Can be done without sacrificing the regulatory protections at core of swap regime.
  • Floor traders have removed these per June 2019 rule, should extend.
  • Also highlights glaring deficiency of using notional value as registration threshold
    triggering swap dealer registration, need to move toward adopting better metrics.