SEC Adopts New Procedures for Reviewing Clearing Submissions Under Dodd-Frank Act
The Securities and Exchange Commission has adopted rules that establish procedures for its review of certain clearing agency actions. The rules were required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, which called for a new regulatory framework for trading in over-the-counter derivatives, including swap agreements.
The rules detail how clearing agencies will provide information to the SEC about security-based swaps that the clearing agencies plan to accept for clearing. The information is intended to aid the SEC in determining whether such security-based swaps are required to be cleared.
"This is an important step in laying the groundwork for the SEC's ability to determine which security-based swap contracts are required to be cleared," said SEC Chairman Mary L. Schapiro. "This step advances a major goal of the Dodd-Frank Act and the commitment of the G-20 countries to reduce systemic risk by increasing the clearing of over-the-counter derivatives."
The SEC also adopted rules requiring clearing agencies that are designated as "systemically important" to submit advance notice of changes to their rules, procedures, or operations if the changes could materially affect the nature or level of risk at those clearing agencies.
Most of the final rules will become effective 30 days after the date of publication in the Federal Register.