WASHINGTON Smaller swap-dealing firms were granted a one-year reprieve from oversight, with the regulator for the U.S. market delaying a planned expansion of the dealers who must register with the federal government.
Since 2012, any dealer with more than $8 billion in swap activity has been required to register with the Commodity Futures Trading Commission, which subjects it to stricter federal oversight.
That swap activity value in dollars, known as the "de minimis" threshold, had been poised to fall to $3 billion by the end of 2017. In order to determine if they complied, smaller dealers would have had to take on more recordkeeping and track trades more closely starting in January.
CFTC Chairman Timothy Massad said in a statement that the commission had found that lowering the threshold would not make more interest rate and credit default swaps subject to regulation, but would require many firms with a small role in the market to register.
He added that the CFTC should adopt a rule on capital requirements for swap dealers before lowering the threshold, which he hopes will happen soon.
Commissioner Sharon Bowen, meanwhile, said the delay would allow the regulator to collect more comprehensive data on the market.
"But I wish to make something clear: We need to see hard data backing up the opinions we will receive during this delay about why we should not just allow the threshold to be $3 billion as established in the rule," she said in a statement. "I know that there is a great deal of disagreement about this issue, and I do not think we will be able to reach a consensus unless we have real economic analysis and evidence."
(Reporting by Lisa Lambert)