U.S. Securities & Exchange Commission to assess relief from security-based swap dealer de minimis phase-in termination date

The U.S. Securities & Exchange Commission issued a chairman’s statement on the scheduled end of the phase-in for the de minimis exception to the security-based swap dealer (SBSD) definition, signalling it may consider relief so the lower SBSD registration thresholds do not begin applying before the Commission can review a staff report and associated public comments. SBSD registration is triggered when a firm exceeds a de minimis amount of security-based swap (SBS) dealing activity over the immediately preceding 12 months. The phase-in is set to expire on November 8, 2026, meaning the 12-month look-back period for the lower thresholds would begin on November 8, 2025, with thresholds of USD 3 billion (aggregate gross notional) for credit default swaps and USD 150 million for non-credit-default SBSs, versus the current phase-in levels of USD 8 billion and USD 400 million. Staff have begun preparing a transaction-data-based report that will analyse the thresholds, but the statement notes this work may not continue during a lapse in appropriations; under the Commission’s rule, the Commission may propose revisions to the thresholds and the phase-in termination date after reviewing the report and public comments. Once appropriations-related restrictions are lifted, the chairman plans to direct staff to evaluate whether relief from the phase-in termination date is necessary or appropriate to prevent the lower-threshold look-back period from applying before the Commission has considered the staff report and public input.