SEC Adopts Final Set of Rules to Start the Clock for Registration of Security-Based Swap Dealers

8 January 2020
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Key takeaways:
  • On December 18, 2019, the Securities and Exchange Commission adopted a package of rule amendments and interpretations (the “Cross-Border Amendments”) to remedy certain issues that had arisen in its framework for the cross-border regulation of security-based swaps (“SBS”), SBS dealers and major SBS participants (“SBS Entities”). The amendments are designed to facilitate the registration of non-U.S. SBS Entities and create a safe harbor from registration for entities with limited U.S. contacts.
  • The effective date of the Cross-Border Amendments (expected to be March 1, 2020) will set the compliance date for the SBS Entity registration rule and a variety of other SBS Entity rules. The compliance date is expected to be September 1, 2021.
  • Also on December 18, 2019, the SEC adopted rules requiring SBS Entities to execute “trading relationship documentation” and to engage in portfolio reconciliation and compression exercises for certain portfolios of uncleared SBS, which rules are intended to be largely consistent with rules previously adopted by the Commodity Futures Trading Commission.