On Oct. 26, the Commodity Futures Trading Commission issued an order that will keep the swap dealer de minimis threshold at $8 billion until December 2019.
Under CFTC rules, any market participants with more than that amount of swap dealing activity must register as a swap dealer. If the order had not been issued, the registration threshold would have dropped to $3 billion in December 2018, and the impact on the compliance obligations of swap market participants would have started in January 2018.
The CFTC said the one-year extension will provide the agency with additional time to analyze swap data and consider further action. The CFTC also noted that a delay would provide additional time for the two new Commissioners and the new director of the division of swap dealer and intermediary oversight, all of whom joined the CFTC in the last two months, to "better familiarize themselves with the issues" and the results of the swap data analysis currently underway.
The order had been expected since Oct. 11, when CFTC Chairman Chris Giancarlo announced during a Congressional hearing that he wanted to get "the right result, not a rushed result" on this issue. Giancarlo also stressed at that hearing that he expects to propose a "final resolution" in the first half of the year through the normal rulemaking process.
Senator Pat Roberts (R-Kans.), the chairman of the Senate Agriculture Committee, issued a statement saying he was pleased by the decision. “If the CFTC had not acted, it would be to the detriment of many community banks and agricultural co-ops and would remove market liquidity from agriculture and energy markets,” Roberts said.