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U.S. Securities and Exchange Commission

Speech by SEC Commissioner:
Bringing Trading in Security-Based Swaps Under Regulatory Oversight


Commissioner Luis A. Aguilar

U.S. Securities and Exchange Commission

SEC Open Meeting
Washington, D.C.
February 2, 2011

I join my colleagues in thanking the staff for their continued hard work in crafting rule proposals to implement Title VII of the Dodd-Frank Act. To establish the regulatory regime required by Title VII, the Commission has already proposed rules regarding the central clearing of security-based swaps, the delivery of trade acknowledgements, and the reporting of transactions to data repositories and the public.

Today proposal's continues this work, addressing the Dodd-Frank Act's clear mandate to move trading in security-based swaps from the opaque over-the-counter market to regulated trading platforms. The proposal also seeks to ensure that security-based swap execution facilities implement the fourteen core principles enumerated in the Dodd-Frank Act.

Given this mandate, I am particularly interested in public comment on two issues. First, how can a security-based swap execution facility best be defined so that trading on security-based swap execution facilities represents a meaningful improvement over the current OTC market and promotes price discovery and competition?

And second, would the proposal achieve the Dodd-Frank mandate that trading on a regulated platform will be the rule, rather than the exception? The pertinent statutory language concerns whether a security-based swap is "available to trade." Today's proposal seeks extensive comment on this issue, and I urge commenters to provide their thoughts and any supporting data. This issue is central to the rules we propose today, and I look forward to the comments we will receive.

Again, I thank the staff for their efforts, and I support the proposed release.


Modified: 02/02/2011