Statement Regarding Phase-In Termination Date for the De Minimis Exception to the Security-Based Swap Dealer Definition

Security-based swap dealers (SBSDs) are required to register with the Commission and become subject to Commission regulations for SBSDs if they exceed a de minimis amount of security-based swap (SBS) dealing activity over the course of the immediately preceding 12 months. The de minimis exception is currently subject to a phase-in period, during which the de minimis thresholds for two categories of security-based swaps have been temporarily set at higher levels.[1]  

The phase-in period is currently set to expire on November 8, 2026. Accordingly, the 12-month look-back period for the lower thresholds of $3 billion for credit default swaps (“CDSs”) and $150 million for non-CDSs would begin to apply as of November 8, 2025.

As required by Commission rule, the staff have started preparing a report using SBS transaction data that will, among other things, analyze the de minimis thresholds. However, the staff may not continue its work on the report during a lapse in appropriations. The Commission rule further provides that after review of the report and consideration of public comments, the Commission may determine to propose rules to revise the thresholds and the phase-in termination date.

Once restrictions imposed by the current lapse in appropriations are lifted, I will direct staff to evaluate whether relief from the phase-in termination date would be necessary or appropriate so that the lookback period for the $3 billion and $150 million thresholds would not apply before the Commission has had time to consider the staff report and associated public comments.

During the current lapse in appropriations, staff are limited in their ability to respond to pending or upcoming matters;[2] however, should market participants have specific concerns relating to the impact of the de minimis exception or the expiration of the phase-in period on their operations, they may email TMEmergency@sec.gov.