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SEC Implements Dodd-Frank Reporting and Dissemination Rules for Security-Based Swaps

SEC Implements Dodd-Frank Reporting and Dissemination Rules for Security-Based Swaps Posted by Kobi Kastiel, Co-editor, HLS Forum on Corporate Governance and Financial Regulation, on

“Implementation of the derivatives market reforms contained in Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) may fairly be characterized as a herculean effort. The Commodity Futures Trading Commission (CFTC) has finalized dozens of new rules to implement Title VII’s provisions governing “swaps.” Although Title VII requires the Securities and Exchange Commission (SEC or Commission) to implement similar provisions for “security-based swaps” (SBSs), the SEC’s rulemaking process has lagged the CFTC’s. Earlier this year, the SEC finalized two of its required rules: one (Final Regulation SBSR) governs the reporting of SBS information to registered security-based swap data repositories (SDRs) and related public dissemination requirements; the other covers the registration and duties of SDRs (SDR Registration Rule). Additionally, the SEC published a proposed rule to supplement Final Regulation SBSR that addresses, among other things, an implementation timeframe, the reporting of cleared SBSs and platform-executed SBSs, and rules relating to SDR fees (Proposed Regulation SBSR). Comments on Proposed Regulation SBSR must be submitted to the SEC by May 4, 2015. This post focuses on Final Regulation SBSR and Proposed Regulation SBSR, which create a reporting and public dissemination regime for market participants that engage in SBSs akin to Parts 43, 45 and 46 of the CFTC’s swap regulations. We discuss the key aspects of these rules and how they will affect SBS market participants. Because many market participants have already gone through the implementation process with respect to the CFTC’s swap reporting rules, we also discuss some of the key differences between Final Regulation SBSR and the final CFTC reporting rules: a comparison of the SEC and CFTC rules is contained in a chart at the end of the full publication, available here.”

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