security-based swaps

SEC Adopts Registration Rules for Security-Based Swap Dealers and Major Security-Based Swap Participants

On August 5, the SEC proposed new rules to provide a comprehensive, efficient process for security-based swap dealers and major security-based swap participants to register with the SEC.  The new rules address all aspects of the registration regime for security-based swap dealers and major security-based swap participants, setting forth the extensive set of information required to be provided and kept up to date by a registrant.  Comments must be received on or before 60 days after publication in the Federal Register.  ReleaseProposed Rule.

Extension of Exemptions for Security-Based Swaps

On February 5, the SEC extended interim final rules that exempt security-based swaps that were security-based swap agreements  prior to July 16, 2011, and are defined as “securities” under the Securities Act and the Exchange Act as of July 16, 2011, due solely to the provisions of Title VII of Dodd-Frank. Under the extension, the expiration dates in the interim final rules will change from February 11, 2014, to February 11, 2017.   ReleasePolicy Statement.

SEC Extends Exemptions for Security-Based Swaps

On January 29, the SEC amended the expiration dates in its interim final rules that provide exemptions for security-based swaps that, prior to July 16, 2012, were security-based swap agreements and are defined as “securities” under the Securities Act and the Securities Exchange Act due solely to Article VII of the Dodd-Frank Act.  Under the amendments, the expiration dates will be extended to February 11, 2014.  SEC Rule.

SEC Final Rules on Procedures for Reviewing Clearing Submissions

On June 28, in accordance with Section 763(a) of the Dodd-Frank Act, the SEC adopted final rules regarding submissions of security-based swaps for clearing with registered clearing agencies. The SEC also adopted rules to define and describe when notices of proposed changes to rules, procedures or operations are required to be filed by designated financial market utilities in accordance with Section 806(e) of Title VIII of the Dodd-Frank Act. Most of the rules will become effective 60 days after publication in the Federal Register. Release. Final Rules.

SEC Proposed Sequencing of Derivatives Regulation

On June 11, the SEC issued a policy statement and request for comment on the anticipated sequencing of compliance dates of final rules to be adopted by the SEC pursuant to certain provisions of Title VII of the Dodd-Frank Act, regarding the regulation of security-based swaps and security-based swap market participants under the Exchange Act. Comments must be submitted on or before 60 days from publication in the Federal Register. SEC Release.  Policy Statement with Request for Comment.

SEC Guidance, Relief, and Exemptions for Security-Based Swaps

On July 1, the SEC clarified which securities laws will apply to security-based swaps starting July 16, the effective date of Title VII of the Dodd-Frank Act. The SEC approved an order granting temporary relief and interpretive guidance clarifying that a substantial number of the Exchange Act requirements applicable to securities will not apply to security-based swaps when the revised definition of “security” goes into effect on July 16. Comments on the order must be submitted by July 15. The SEC also approved an interim final rule giving exemptions from the Securities Act, Trust Indenture Act, and other federal securities laws to allow certain security-based swaps to continue to trade and be cleared as they have before the enactment of the Dodd-Frank Act. Comments on the interim final rule must be submitted 45 days after it is posted on the website. SEC Release. Exemptive Order. Interim Final Rule.

SEC Proposed Rules on Registration Exemption for Security-Based Swaps

On June 10, the SEC proposed rules that would provide clearing agencies functioning as central counterparties with exemptions from the registration requirements of the Securities Act of 1933 and the Securities Exchange Act of 1934 for the security-based swaps they issue. Comments must be submitted by July 25. Press Release. Proposed Rules.

CFTC and SEC Roundtable on Dodd-Frank Implementation

On April 12, the SEC and the CFTC announced that they will hold a joint public roundtable on May 2-3 to discuss the schedule for implementing final rules for swaps and security-based swaps under the Dodd-Frank Act. Public comments on the effective dates and phased implementation for compliance with final rules may be submitted through the CFTC website prior to the roundtable. CFTC Release.

SEC Proposed Rules on Beneficial Ownership for Security-Based Swaps

On March 17, the SEC proposed to readopt without change the relevant portions of Rules 13d-3 and 16a-1, in order to clarify that following the July 16 statutory effective date of Section 13(o) of the Exchange Act, which was added by Section 766 of the Dodd-Frank Act, the existing beneficial ownership rules will continue to apply to persons who buy or sell security-based swaps. Comments must be submitted by April 15. Proposed Rule.

SEC Proposed Clearing Agency Standards for Operations and Governance

On March 3, the SEC proposed rules, as required under the Dodd-Frank Act, regarding the operation and governance of clearing agencies. Under the proposed rules, clearing agencies would be required to: (i) maintain standards with respect to risk management and operations; (ii) have adequate safeguards and procedures to protect the confidentiality of trading information; (iii) have procedures to identify and address conflicts of interest; (iv) require minimum governance standards for their boards of directors; (v) designate a chief compliance officer; and (vi) disseminate pricing and valuation information if they are a central counterparty for security-based swaps. The SEC also reopened the public comment period for rules proposed in October to mitigate conflicts of interest for security-based swap clearing agencies and execution facilities and national securities exchanges that post or make available for trading security-based swaps. Comments on the proposed rules must be submitted by April 29. SEC Release. SEC Proposed Rule. SEC Proposed October Rules.