FIA PTG Supports Exclusion of Certain Swaps from De Minimis Calculation
Responding to the CFTC's "Swap Dealer De Minimis Exception Preliminary Report," the Futures Industry Association Principal Traders Group ("FIA PTG") stated that it hoped the findings will lead to the removal of barriers to entry to the swaps market and allow FIA members to "become active providers of liquidity in those markets."
As to the exclusion of SEFs, DCMs and cleared swaps from the de minimis exemption contained in the section of the Report titled: "Swaps Executed on a SEF or DCM and/or Cleared," FIA made the following assertions:
- Trading swaps on a SEF or DCM and clearing these swaps "achieve the regulatory goals of swap dealer regulation in and of itself" (i.e., without dealer registration);
- Anonymity should not be determinative of how such swaps are treated because the CFTC-approved SEF/DCM rulebooks prescribe the various ways a swap can be executed on an exchange;
- Reducing "unnecessary and duplicative regulatory burdens" related to swap dealer regulation by excluding exchange traded and cleared swaps from the de minimis exemption would increase growth of their markets; and
- Excluding exchange-traded and/or cleared swaps from de minimis calculation would: (i) "reduce unnecessary costs"; and (ii) "lead to greater participation and competition" in exchange-traded and cleared swaps "resulting in lower trading costs for end users and a systemically safer and more diverse swap marketplace."
