The Commodity Futures Trading Commission (CFTC) has approved an order granting limited purpose swap dealer (SD) designations to Cargill Incorporated and an affiliate, Cargill Financial Services International.
This is the first time that limited purpose SD designations have been granted.
Limited purpose designations involve circumstances in which the Commission, by order, designates a person as an SD for one type, class or category of swap or activities without the person being considered an SD for other types, classes, categories or activities. The Commission’s authority to grant limited purpose SD designations derives from Section 1a(49)(B) of the Commodity Exchange Act (CEA), as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Cargill is an international producer and marketer of food, agricultural, financial and industrial products and services that engages in swap dealing through its Cargill Risk Management (CRM) Business Unit.
Under the two designations granted today, the Commission will have regulatory oversight of the SD activities of Cargill and Cargill Financial Services International in connection with the CRM Business Unit. The CRM Business Unit already operates as a stand-alone SD within the larger global agribusiness company, a fact that allowed for the clear separation of the swap dealing business from Cargill’s non-dealing activities, and for the CFTC to determine that it could exercise sufficient oversight of the CRM Business Unit.