On March 15, the SEC released an economic analysis that they will use to justify imposing new derivatives regulations on certain companies. Regulators have debated over what threshold should be used to determine which companies will be classified as swap dealers. The SEC and CFTC are still contesting final rules that will define “swap dealer” and “major swap participant.”
Earlier in March, the CFTC and SEC considered setting the threshold at $3 billion, higher than the $100 million figure first proposed in December 2010. The SEC’s 41-page analysis of the credit-default swap market clarifies certain information needed to define a dealer. It also provides CDS gross notional position data to predict how many firms will qualify as dealers.
The CFTC has not yet issued any studies on the swap dealer definition rule. The SEC is seeking public comments on the economic data, indicating that a vote on the rule is nearing. The SEC said it hopes to consider adopting the rule in “the next several weeks.”