Swap Dealer

This Issue in United States

Concept of Swap Dealer in Futures Trading

In this context of financial law, the following is a definition of Swap Dealer: The Dodd-Frank Act and subsequent CFTC rules, in general, identify a “swap dealer” as any person who:1. holds itself out as a dealer in swaps, 2. makes a market in swaps; 3. regularly enters into swaps with counterparties as an ordinary course of business for its own account, or 4. engages in activity causing itself to be commonly known in the trade as a dealer or market maker in swaps.The CFTC requires that persons engaged in these activities register as swaps dealers after they have reached a “de minimis” threshold, meaning that, the aggregate gross notional amount of the swaps, with certain exceptions, that the person enters into over the prior 12 months in connection with dealing activities exceeds $3 billion. (This threshold is currently set at $8 billion, as part of a phase-in period.) See 7 USC 1a(49)