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SEC adopts cross-border security-based swap rules

  • SEC (US Securities and Exchange Commission) Image

Jun 26, 2014

The SEC has issued final rules on cross-border security-based swap activities for market participants. As indicated in the SEC’s press release, the rules, which are the first in a series on cross-border security-based swap activities, “explain when a cross-border transaction must be counted toward the requirement to register as a security-based swap dealer or major security-based swap participant. The rules also address the scope of the SEC’s cross-border anti-fraud authority.”

The rules state that non-U.S. persons are required to register with the SEC as a security-based swap dealer and specify or describe:

  • Transactions included in the dealer calculation.
  • The definition of a U.S. person
  • The definition of a principal place of business.
  • Non-U.S. dealers whose counterparties have rights of recourse against a U.S. person affiliate.
  • Conduit affiliates.
  • Aggregating transactions involving dealing activity of affiliates.
  • Cleared anonymous transactions.
  • Further consideration of activity in the United States involving only non-U.S. persons.

The rules also state that non-U.S. persons are required to register with the SEC as a major security-based swap participant and discuss:

  • Transactions included in the major participant calculations.
  • Attribution of guaranteed positions.
  • The anti-fraud rule.

The final rules is effective on September 8, 2014.

For more information, see Final Rule 34-72472, Application of “Security-Based Swap Dealer” and “Major Security-Based Swap Participant” Definitions to Cross-Border Security-Based Swap Activities, and the press release on the SEC’s Web site. Speeches by the following individuals from yesterday’s open meeting about the final rules are also available on the SEC’s Web site:

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