FIA PTG issued a statement in response to the Commodity Futures Trading Commission‘s release of a Final Staff Report on the Swap Dealer De Minimis Exception.
“It’s disappointing that, after months of review, the staff report indicated that still more time is necessary to determine whether cleared swaps and/or those executed on a SEF or DCM should be excluded from an organization’s de minimis calculation. Such an exemption would help reduce barriers that make it difficult for FIA PTG members to provide much-needed liquidity in these markets. In the wake of the financial crisis, the G20 committed to central clearing and open, transparent trading of swaps in order to mitigate risk. It is critical that, instead of simply attempting to achieve these objectives through mandate, regulations are also designed to incentivize them. Excluding these swaps from the de minimis calculation would be a helpful step in that direction. Given the benefits of this policy and the number of comments in support of it, we remain hopeful that the Commission will choose to address this critical issue in the near future to help create diverse, transparent, liquid swap markets.”
FIA PTG responded to the CFTC’s preliminary staff report in January 2016, noting that that exchange traded and cleared swaps are already subject to rules—including capital and reporting requirements—that achieve the regulatory goals of swap dealer regulation.