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SEC issues final rule on trade acknowledgment and verification rules for security-based swap transactions

  • SEC document Image

Jun 08, 2016

The SEC has issued a final rule, “Trade Acknowledgment and Verification of Security-Based Swap Transactions.”

Under the final rule, which is being issued in re­sponse to a mandate of the Dodd-Frank Wall Street Reform and Con­sumer Pro­tec­tion Act, security-based swap (SBS) entities that enter into SBS transactions are required to:

  • “Provide a trade acknowledgment electronically to its transaction counterparty promptly, and no later than the end of the first business day following the day of execution.”
  • “Promptly verify or dispute with its counterparty the terms of a trade acknowledgment it receives.”
  • “Have written policies and procedures in place that are reasonably designed to obtain verification of the terms outlined in any trade acknowledgment that it provides.”

In addition, certain broker-dealers that are SBS entities will be exempt from the requirements in Exchange Act Rule 10b-10 if they meet the requirements of this final rule.

The final rule is effective August 16, 2016. For more in­for­ma­tion, see the press release and final rule on the SEC’s Web site.

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