In testimony earlier today before the House Agricultural Committee, CFTC Chairman Christopher Giancarlo announced his advocacy of a one-year delay in the implementation of the reduction in swap dealer de minimis level. As background, a bank or other market participant can engage in a de minimis level of swap dealing activity without having to register as a swap dealer. Presently, the de minimis level is set at $8 billion, and scheduled to fall to $3 billion at the end of 2018.
As noted, in today’s testimony, CFTC Chairman Giancarlo announced that he feels that a one-year delay (until the end of 2019) to any change in the present level is warranted, particularly in light of the fact that there are two new commissioners who should be given time to study the effects of any reduction in de minimis levels.
In corresponding public statements, CFTC Commissioners Benham and Quintenz shared divergent views on Chairman Giancarlo’s announcement. In short, Commissioner Benham did not support a deferral of the reduction, but rather favored making a decision now or letting the scheduled reduction go into effect as planned. By comparison, Commissioner Quintenz analogized a reduction of the de minimis level as a “black hole” into which community banks and relatively smaller financial institutions could be drawn unnecessarily.
More to come, no doubt. In the meantime, the statements of Commissioners Benham and Quintenz are available here.
Good day. Good surprise? DR2