On 21 March 2014, the Commodity Futures Trading Commission (CFTC) issued No-Action Letter No 14-32, providing relief in relation to the swap dealer (SD) registration rules for firms entering into “utility commodity swaps” with “utility special entities”.
SD registration rules require firms to register as SDs if their trading activity, measured in terms of gross notional amounts, exceeds:
- USD 3 billion, subject to a phase in level of USD 8 billion (the “general de minimis threshold”), and
- USD 25 million with regard to swaps in which the counterparty is a “special entity” (the “special entity de minimis threshold”).
The electric power industry had raised concerns that certain aspects of previous no-action relief, in the form of CFTC Letter No 12-18, had inhibited counterparties’ willingness to enter into swap transactions with utility special entities. In light of this the CFTC has decided that it will not enforce an action against a person for failure to apply to be registered as an SD if the person fails to include utility operations-related swaps in its calculations in determining whether it has exceeded the special entity de minimus threshold; provided that it has not entered into swaps as a result of its swap dealing activities in excess of:
- the general de minimis threshold (factoring utility operations-related swaps into its calculations); or
- the special entity de minimis threshold (excluding utility operations-related swaps from its calculations).
 Which provided no-action relief from the SD registration requirement if the aggregate gross notional amount (measured on a consolidated basis) of “utility commodity swaps” connected with a person’s swap dealing activities with “utility special entities” over the course of the immediately preceding 12 months did not exceed USD 800 million