The Commodity Futures Trading Commission approved an order on Oct. 13 to extend the current threshold for requiring swap dealer registration by a year. The extension effectively means that the current threshold of $8 billion will not be reduced to $3 billion at the end of 2017, as the CFTC originally had intended.
CFTC Chairman Tim Massad explained that lowering the threshold would require many additional firms to register but would not significantly increase the number of interest rate and credit default swaps covered by swap dealer registration. He also said that the delay would give the CFTC more time to consider the potential effects on the commodity swap market.
CFTC Commissioner Sharon Bowen said she supported the extension but emphasized that the threshold should fall to $3 billion at the end of that period unless the agency receives "hard data" supporting a different threshold. She also suggested that the CFTC should consider exempting cleared swaps from being counted toward the threshold.
Senate Agriculture Committee Chairman Pat Roberts (R-Kansas) issued a statement applauding the CFTC action and urging the agency to reach a final decision on the threshold issue to provide market participants with certainty.