March 21, 2014

CFTC Division of Swap Dealer and Intermediary Oversight Issues No-Action Letter Regarding the De Minimis Threshold for Swaps with Utility Special Entities

Washington, DC — The Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (Division) issued a letter today providing no-action relief from certain requirements in the de minimis exception from the definition of the term “swap dealer.” The no-action relief allows an entity to deal in utility operations-related swaps, as that term is defined in the letter, and not be required to register as a swap dealer, provided that the aggregate gross notional amount of swap dealing activity does not exceed $8 billion per year.

The Commission previously received a petition from the American Public Power Association, the Large Public Power Council, the American Public Gas Association, the Transmission Access Policy Study Group and the Bonneville Power Administration requesting that the Commission provide relief for certain swaps that utility special entities rely upon to hedge risks arising from their electric or natural gas operations or obligations.

The letter issued today by the Division provides temporary no-action relief while the Commission considers the issues that were raised in the aforementioned petition.

This no-action letter supersedes a 2012 no-action letter issued by the Division (CFTC Letter No. 12-18), and no person may rely upon the relief provided in the 2012 letter after today.

Last Updated: March 21, 2014