CFTC Provides SD De Minimis Relief To Floor Traders

The CFTC Division of Swap Dealer and Intermediary Oversight ("DSIO") provided no-action relief to floor traders from counting certain swaps towards the de minimis threshold for purposes of determining whether registration as a "swap dealer" is required.

The relief came in response to a request from the FIA Principal Traders Group ("FIA PTG"). According to FIA PTG, the existing conditions for a floor trader exemption under the definition of "swap dealer" in CFTC Rule 1.3(6)(iv) ("Definitions") are "unclear or unnecessarily restrictive." In particular, the FIA PTG cited the condition that floor traders must file risk reports as though subject to CFTC Rule 23.600(c)(2) ("Risk Management Program for swap dealers and major swap participants"). The letter provides for this aspect of the exception, as well as permitting a floor trader to (i) enter into swaps other than derivatives contract market and swap execution facility ("DCM/SEF") cleared swaps and (ii) negotiate