Staff No-Action Relief: Revised Relief from the De Minimis Threshold for Certain Swaps with Utility Special Entities

U.S. COMMODITY FUTURES TRADING COMMISSION
Three Lafayette Centre
1155 21st Street, NW, Washington, DC 20581
Telephone: (202) 418-5977
Facsimile: (202) 418-5407 gbarnett@cftc.gov
Division of Swap Dealer and
Intermediary Oversight
Gary Barnett
Director
CFTC Letter No. 14-34
No-Action
March 21, 2014
Division of Swap Dealer and Intermediary Oversight Re: Staff No-Action Relief: Revised Relief from the De Minimis Threshold for Certain Swaps with Utility Special Entities Ladies and Gentlemen:
Section 1.3(ggg) of the regulations of the Commodity Futures Trading Commission (the
“Commission”) further defines certain terms, including the term “swap dealer.”1
Section
1.3(ggg) includes an exception for a person that has entered into swap positions connected with its swap dealing activities that, in the aggregate, do not exceed either of two gross notional amount thresholds. The two gross notional amount thresholds are (i) $3 billion, subject to a phase in level of $8 billion (referred to herein as the “general de minimis threshold”), and (ii) $25 million with regard to swaps in which the counterparty is a “special entity”3 (referred to herein as the “special entity de minimis threshold”). On October 12, 2012, the Division of Swap Dealer and Intermediary Oversight (“Division”) of the Commission published CFTC Letter No. 12-18 (the “2012 No-Action Letter”). 4 The 2012 No-Action Letter provided no-action relief, subject to certain conditions, from the swap dealer (“SD”) registration requirement if the “utility commodity swaps” connected with a person’s swap dealing activities into which the person – or any other entity controlling, controlled by or under common control with the person – enters with “utility special entities” over the course of the immediately preceding 12 months have an aggregate gross notional amount of no more than $800 million.