SEC Proposes Rules for Security-Based Swap Dealers and Major Security-Based Swap Participants
Proposing Rules Governing Capital, Margin, and Segregation Requirements for Security-Based Swap Dealers and Major Security-Based Swap Participants
The Securities and Exchange Commission today voted unanimously to propose capital, margin, and segregation requirements for security-based swap dealers and major security-based swap participants.
The proposed rules are required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, which authorizes the SEC and other regulators to put in place a comprehensive framework for regulating the over-the-counter swaps markets.
Under the Dodd-Frank Act, the SEC must impose margin and capital requirements to help ensure the safety and soundness of security-based swap dealers and major security-based swap participants. The margin rules are required to be appropriate for the risk associated with security-based swaps that are not “cleared” by a security-based swap clearing agency. The proposed segregation rules are intended to facilitate the prompt return of customer property to customers before or during a liquidation proceeding if a security-based swap dealer fails.
“The SEC has now proposed — and in some cases adopted — substantially all of the rules that create the new regulatory regime for derivatives within our jurisdiction,” said SEC Chairman Mary L. Schapiro. “These rules are intended to make the financial system safer and the derivative markets fairer, more efficient, and more transparent.”
The SEC is seeking public comment on the proposed rules for 60 days following their publication in the Federal Register.
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The following webpage — http://www.sec.gov/swaps-chart/swaps-chart.shtml — depicts the regulatory regime for security-based swaps and details what happens as a transaction occurs.