The US Securities and Exchange Commission has proposed rules that would exempt clearing agencies from having to register security-based swaps trades.
Exempting central counterparty clearing houses (CCPs) from the registration requirements of the Securities Act of 1933 and the Securities Exchange Act of 1934 for security-based swaps eases the clearing of swaps trades, the SEC says.
Many of the pieces of the Dodd-Frank Act, of which mandatory central clearing of OTC derivatives is a key tenet, are scheduled to go into effect July 16. Yet the SEC, which under Dodd-Frank is charged with regulating security-based swaps, and the Commodity Futures Trading Commission (CFTC), which governs other types of derivatives, have suggested they need more time to define how they will carry out Title VII of Dodd-Frank, which covers the changes to OTC derivatives regulation.
The SEC says it has already implemented about two-thirds of the 90-plus provisions it is charged with carrying out under Dodd-Frank. The SEC and CFTC held a joint public roundtable in April to discuss security-based swap regulations, but both regulators to date have been less than clear about when and how, and which parts, of Title VII will be enacted.
The SEC has temporarily suspended the registration requirement for credit default swaps and security-based swaps until the proposed exemptions are made permanent (or not). The regulator is seeking public comment on the proposal until July 25.
The proposal is part of a multi-step effort by the SEC to clarify the requirements that will apply to security-based swap transactions from July 16, and to provide temporary relief on some parts of the regulation.
The SEC says it will soon provide guidance regarding which provisions of Title VII will go into effect July 16, and, where appropriate, provide temporary relief from several of these provisions.
The CFTC, for its part, is considering delaying its own July 16 implementation date, according to news reports.
After proposing all of the key rules under Title VII, the SEC intends to consider publishing a detailed implementation plan in order to enable the commission to move forward expeditiously with the roll-out of the new securities-based swap requirements in the most efficient manner, while minimizing unnecessary disruption and costs to the markets, the SEC said in a statement today.
(CG)