On December 16, the Securities and Exchange Commission announced that it adopted a rule to limit the potential for overlapping or duplicative regulation within its security-based swap regulatory regime. Specifically, the rule exempts certain activities of security-based swap execution facilities (SEFs) and security-based swap dealers from triggering the requirement also to register as a clearing agency. The adopted rule is in line with similar exemptions for broker-dealers and national securities exchanges.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 created new regulatory categories of entities for the security-based swap market. The adopted rule helps ensure that those entities are treated similarly to national securities exchanges and broker-dealers. Both the exemptions from and exclusions to the definition of clearing agency are designed to ensure that the entities are subject to appropriate regulation.
The adopted rule will become effective 60 days after publication in the Federal Register.
The SEC’s press release is available here.