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Statement at Open Meeting Regarding Amendments to Regulation SBSR - Reporting and Dissemination of Security-Based Swap Information

Commissioner Michael S. Piwowar

July 13, 2016

Thank you, Chair White.

I am pleased to support today’s final rule, and I want to join my fellow Commissioners in thanking staff for their excellent work on this project.

This release represents the culmination of a years-long effort to develop rules requiring the regulatory reporting and public dissemination of security-based swap information, which is the cornerstone of the swaps oversight regime mandated by Title VII of the Dodd-Frank Act.

This rulemaking contains a series of amendments to previously adopted Regulation SBSR.[1] These amendments highlight both the complexity of the security-based swap market and the challenges that arise when adding transparency to a previously opaque market. At the same time, they underscore the dedication of Commission staff to developing a deep understanding of how the security-based swap market operates and to tailoring our rules so that they will most effectively achieve their purposes under Title VII.

The Commission first proposed Regulation SBSR in 2010,[2] and subsequently proposed or re-proposed related rules on multiple occasions.[3] In each case, we sought feedback from market participants regarding how our proposed rules would operate in practice. This multi-stage dialogue with market participants resulted in an increasingly refined approach to capturing security-based swap data, including today’s amendments. I commend staff for their drive to continue improving on Regulation SBSR, and for the way they have successfully incorporated feedback from market participants.

One key example of this responsiveness to commenter concerns can be found in the revised compliance schedule contained in these amendments. We heard loud and clear from commenters that they were concerned about the excessive costs and burdens that would fall on market participants if the Commission initiated the Title VII reporting regime before requiring dealers to register. In response to these concerns, we have altered our approach to compliance so that security-based swap reporting will not be required until after the compliance date for dealer registration.

While I agree with this change and believe it is essential that we provide this type of certainty to market participants, the decision comes with its own risks. One of the greatest lessons we learned during the financial crisis was that both regulators and the public did not understand the risks posed by the over-the-counter derivatives markets, due in large part to a lack of quality data. It has now been six years since the Dodd-Frank Act mandated the collection and dissemination of such data, and yet we still have not commenced reporting of security-based swap information. By triggering the start of reporting under Regulation SBSR on dealer registration, we may unwittingly add to the already outrageous delay in collecting much-needed data.

Of course, given the compliance schedule set forth in today’s amendments, the true cause of any additional reporting delay would be the failure of the Commission to finalize the Title VII rules necessary to complete the security-based swap dealer regime. In particular, the Commission has yet to adopt final rules regarding capital and margin requirements for security-based swap dealers, which are necessary for dealers to determine how they will structure their security-based swap business.

There is simply no excuse for our lack of final rules in this space. In September of last year, former Commissioner Dan Gallagher and I urged action on these rules, specifically calling out the need to adopt dealer capital and margin requirements.[4] In doing so, we joined the calls of Commissioner Kara Stein and former Commissioner Luis Aguilar who also urged the Commission to complete its Title VII mandates.[5] Yet we still have no idea when final rules on capital and margin will make their way onto the Commission agenda, much less when the entire regime will be up and running.

The calls of a bipartisan majority of the Commission have not been enough to influence the Chair into prioritizing our Title VII mandates. I hope that the increased pressure that today’s amendments place on us to complete our dealer regime will spur a heightened level of action.

I have no questions.

[1] See Securities Exchange Act Release No. 74244 (Feb. 11, 2015), 80 FR 14564 (Mar. 19, 2015), available at

[2] See Securities Exchange Act Release No. 63346 (Nov. 19, 2010), 75 FR 75207 (Dec. 2, 2010), available at

[3] See Securities Exchange Act Release No. 69490 (May 1, 2013), 78 FR 30967 (May 23, 2013), available at; Securities Exchange Act Release No. 74244 (Feb. 11, 2015), 80 FR 14740 (Mar. 19, 2015), available at; Securities Exchange Act Release No. 74834 (Apr. 29, 2015), 80 FR 27444 (May 13, 2015), available at

[4] See Commissioner Daniel M. Gallagher and Commissioner Michael S. Piwowar, Statement Regarding Security-Based Swap Rules (Sept. 25, 2015), available at

[5] See Commissioner Kara M. Stein, Statement on Final Rules for Security-Based Swap Dealer and Major Swap Participant Registration and on Proposed Rules for Applications to Waive Title VII Statutory Disqualifications (Aug. 5, 2015), available at; Commissioner Luis A. Aguilar, Finishing the Work of Regulating Security-Based Derivatives (Sept. 16, 2015), available at

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