Statement on Proposed Rules Relating to Security-Based Swap Execution Facilities

Thank you, Chair Gensler. Thank you also to the staff in Trading and Markets, Economic and Risk Analysis, and General Counsel for your work on this rulemaking. The markets we regulate and the markets regulated by the Commodity Futures Trading Commission (“CFTC”) share many market participants, and the CFTC’s rules on Swap Execution Facilities (“SEFs”) have been in place for years. Therefore, the general approach of harmonizing with the CFTC’s rules for Swap Execution Facilities seems to make sense, even though I would not have written the same set of rules were I writing them from scratch.

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I look forward to hearing from commenters whether they agree that harmonization is the right approach. I also hope that commenters will weigh in on whether we have justified adequately the departures that we have made from the CFTC’s rules. Commenters also can help us think through any consequences of importing language and concepts from the CFTC’s rulebook into our own. Similarly, will codifying CFTC guidance in our rules be problematic, particularly because the CFTC will have greater flexibility to change the guidance than we will once it is embedded in our rules? We need to ensure that an effort at harmonization in this context does not inadvertently undermine the operation of our rules in other contexts.

Thank you to the staff for your efforts on this rulemaking and for answering so many questions. In addition, I would like to express my appreciation to the CFTC staff for their extensive engagement with our staff as they worked to harmonize these proposed rules with the existing CFTC framework.