ISDA and SIFMA Urge SEC Not to Lower Security-Based Swap Dealer Thresholds

ISDA and SIFMA urged the SEC to make permanent the current thresholds that trigger registration as a security-based swap dealer.

The comment letter responded to an SEC staff report on the definitions of "security-based swap dealer" and "major security-based swap participant" (see prior coverage). A firm that exceeds specified levels of dealing transactions must register as a security-based swap dealer.

The groups said the SEC should keep the thresholds at $8 billion for credit default swaps and $400 million for other security-based swaps. The groups praised the SEC's January 2026 action extending the current thresholds to May 8, 2028.

The groups made four arguments:

• The SEC's own data shows the thresholds work. The groups argued the thresholds already capture nearly all meaningful activity, so lowering them would force smaller firms to register, even though they pose little risk.
• The SEC's "arranged, negotiated, or executed" test distorts the data. That test counts a trade between two non-U.S. parties toward the thresholds if U.S.-based staff arrange, negotiate, or execute it. The groups said the CFTC dropped the concept six years ago, and they urged the SEC to do the same.
• The SEC and CFTC are still reviewing which products count as security-based swaps and argued that lowering the thresholds now would be premature, since the set of counted products could change.
• Changing the thresholds creates regulatory uncertainty.