Co-authored by Avi Badash.
Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, on June 28, the Securities and Exchange Commission adopted final rules that establish new procedures for the SEC’s review of certain clearing agency actions. Most of the rules become effective 60 days after the date of publication in the Federal Register.
Among other things, the rules require clearing agencies to electronically submit information to the SEC regarding security-based swaps that such clearing agencies plan to accept for clearing. The requested information is intended to aid the SEC’s determination of whether the security-based swaps should be subject to mandatory clearing. The rules also require clearing agencies to post such submissions on their public websites within two business days.
In addition, the rules describe when a “systematically important” clearing agency must electronically submit advance notice to the SEC of certain changes to its rules, procedures or operations. Generally, advance notice will be required if: (1) the proposed change would affect the risk management functions performed by the clearing agency that are related to systematic risk and/or (2) the proposed change could affect the clearing agency’s ability to continue performing its core clearing and settlement functions. The rules require such “systematically important” clearing agencies to post such advance notices on their public websites within two business days.
Click here to read the Final Rule.