U.S. Securities & Exchange Commission
SEC Seal
Home | Previous Page
U.S. Securities and Exchange Commission

Speech by SEC Commissioner:
Effective Antifraud Rules Must Address Cross-Market Activity


Commissioner Luis A. Aguilar

U.S. Securities and Exchange Commission

SEC Open Meeting
Washington, D.C.
November 3, 2010

The Dodd-Frank Act has given the Commission broad authority to oversee the market for security-based swaps, which has operated without adequate regulation or transparency. One important aspect of the Commission's new regulatory powers is enhanced authority to prohibit misconduct with respect to security-based swaps.

The antifraud rule we propose today is intended to address the unique nature of security-based swaps — in particular, the potential for fraud and manipulation both within markets and across markets. The rule would address not only fraud or manipulation with respect to security-based swaps, but also fraudulent or manipulative conduct regarding an underlying reference security that affects the value of a security-based swap.1

This would be the Commission's first antifraud rule specifically addressing security-based swaps, and I am particularly interested in comment on the following two issues.

  • First, as the release asks, is there potential fraudulent conduct that the rule does not capture? And if so, how we should modify the rule to address this?

  • And, second, is the rule sufficiently flexible that it will continue to be effective as the market for security-based swaps evolves?

Finally, I join my colleagues in thanking the staff across the agency for their work on this proposal.



Modified: 11/03/2010