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August 14, 2018

The CFTC’S Loophole-Laden Proposed “De Minimis” Rule Baselessly Deregulates Derivatives


Tuesday, August 14th, 2018

Contact: Brandon Richards at or at 202-618-6433

The CFTC’S Loophole-Laden Proposed “De Minimis” Rule Baselessly Deregulates Derivatives in Violation of the Dodd-Frank Financial Reform Law

Washington, DC — Better Markets’ President and CEO, Dennis Kelleher, issued the following statement regarding the Commodity Futures Trading Commission’s (CFTC) proposed changes to the “de minimis” Exception to Swap Dealer Definition and the comment letter it filed yesterday:

“The CFTC’s proposed “de minimis” rule opens so many loopholes for Wall Street’s biggest derivative dealing banks that it will look like Swiss cheese.  Worse, the CFTC is proposing to do this without properly or clearly disclosing what they are doing and by seriously mischaracterizing the CFTC’s own prior actions regarding swaps.  This dangerous and unjustified deregulation, that needlessly puts our economy and financial system at risk, is no way to celebrate the 10th anniversary of the 2008 crash.

“Swaps were the very high-risk, complex, unregulated derivatives that were time bombs embedded throughout the financial system by Wall Street’s biggest banks and were a primary cause of the catastrophic 2008 financial crash just ten years ago.  That’s why Warren Buffett called them “weapons of mass financial destruction.”  That’s also why the Dodd-Frank financial reform law required swaps and Wall Street’s swaps dealers to be transparent and carefully regulated.

“Dodd-Frank also sensibly provided for a very narrow exception to the swaps rules for entities that only did a very little bit of swaps dealing.  That was the so-called “de minimis” exception.  Contrary to the letter and spirit of the law, the CFTC proclaimed in 2012 that $8 billion in swaps trading a year was “de minimis.”  We argued then that was an unjustified “de maximis” exception, but at least it was supposed to drop to $3 billion. 

“However, the CFTC has repeatedly prevented the threshold from dropping to $3 billion, leaving it at $8 billion and allowing lots of swaps and swap dealers to go unregulated.  The CFTC now proposes a modification to that rule that would keep the threshold at $8 billion forever and at the same time open lots of loopholes and exceptions that it acknowledges will result in additional swaps and swaps dealers going unregulated.

“Those unwarranted and unjustified actions are compounded by the CFTC’s violations of the Administrative Procedures Act for failing to provide the public with adequate notice of what it is proposing to do and depriving the public of a meaningful opportunity to comment.   Regrettably, as detailed in the comment letter, the CFTC also mischaracterizes its own prior record regarding swaps in an attempt to justify its flawed proposal.”


Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit

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