Certain US banks engaged in limited swap dealing activities were granted relief from swap dealer registration by the Commodity Futures Trading Commission (CFTC) on December 20, 2012. Without this relief, these US banks were facing the prospect of either registering as a swap dealer, modifying their activities to fit into registration exemptions, or ceasing swap dealing all together. The relief permits these US banks to disregard the swap dealing activities of their registered foreign bank parent when determining whether they are under the CFTC’s de minimis threshold for registration. In order to qualify for the relief, banks must meet a seven part test and file a claim for relief – relief is not automatic.
This FS Regulatory Brief provides a description of the aggregation rule and the relief provided to US banks with registered foreign bank parents.