Statement on Public Dissemination of Security-Based Swap Transactions

On Monday, the Securities and Exchange Commission took another step to promote transparency in our markets. The public now has access to critical information about security-based swap transactions, including the key economic terms, price, and notional value. This development strengthens post-trade transparency and efficiency in the security-based swaps market, which historically has operated in the dark.

The 2008 financial crisis had many chapters, but a form of security-based swaps — credit default swaps, particularly those used in the mortgage market — played a lead role throughout the story. Under Title VII the Dodd-Frank Act, Congress determined that the security-based swap markets would benefit from more transparency, which would promote more efficient markets and lower risks.

As the collapse of the family office Archegos Capital Management last March showed, security-based swaps continue to have an important impact on our markets. Total return swaps, a type of security-based swaps, contributed to the transmission of risk during the firm’s failure last year.

Thus, this week’s milestone builds on additional work the SEC completed in the fall with respect to security-based swaps. In November, security-based swap dealers and major security-based swap participants started registering with the Commission, and market participants started reporting post-trade transaction data to the SEC and, under appropriate circumstances, other regulators. In December, the Commission proposed a rule to require public reporting of certain information relating to large security-based swap positions.

Altogether, these new requirements will greatly enhance post-trade transparency in the security-based swaps market on a transaction-by-transaction basis.

I’d like to thank the SEC’s staff on the work they’ve done in standing up the Commission’s security-based swap regime. I continue to be impressed by the dedication the staff has brought to this work.