Featured Product

    SEC Adopts Final Rules and Guidance Related to Security-Based Swaps

    February 04, 2020

    SEC adopted final rules and guidance related to the security-based swaps (SBS) regime in the US. One set of the adopted rules concerns the application of specific risk-mitigation techniques to portfolios of uncleared security-based swaps. The compliance date is discussed in Section V of the adopting release. Additionally, SEC adopted a package of rule amendments, guidance, and a related order to expand and improve the framework for regulating cross-border security-based swaps, including single-name credit default swaps. The final rules on risk mitigation techniques and the cross-border regulation of security-based swaps will become effective on April 06, 2020.

    Rule on Risk Mitigation Techniques—These rules establish a coherent approach to the regulation of margin, capital, segregation, recordkeeping and reporting, and business conduct for security-based swaps. The compliance dates for this set of rules have been discussed in Part X.B of the final release. The new rules 15Fi-3, 15Fi-4, and 15Fi-5 establish requirements for registered security-based swap dealers and major security-based swap participants to:

    • Periodically reconcile outstanding security-based swaps with counterparties
    • Engage in certain forms of portfolio compression exercises, as appropriate
    • Execute written trading relationship documentation with each of their counterparties prior to, or contemporaneously with, executing a security-based swap transaction

    Rule on Cross-Border Application of SBS Requirements—The adoption of this package also stands up the broad security-based swap regulatory regime as it triggers the compliance date for security-based swap entities to register with SEC and the implementation period for previously adopted rules under the Dodd-Frank Act. The compliance dates have been discussed in Part X.B of the final release. The final rule amendments and guidance build on the experience with the multi-faceted, multi-jurisdictional security-based swap market, and prior SEC actions, in four key areas:

    • Use of transactions that have been “arranged, negotiated, or executed” by personnel located in the United States as a trigger for enhanced U.S. regulation of security-based swaps and market participants
    • Requirement that nonresident security-based swap dealers and major security-based swap participants (collectively known as SBS entities) provide a certification and opinion of counsel regarding the ability of SEC to access information and conduct onsite examinations
    • Cross-border application of statutory disqualification provisions
    • Questionnaires or employment applications that registered SBS entities must maintain with regard to their foreign associated persons

     

    Related Links

    Effective Date: April 06, 2020

    Keywords: Americas, US, Banking, Securities, Security-Based Swaps, Swap Participants, Dodd Frank Act, Risk Mitigation, Reporting, Swaps, Credit Default Swap, SEC

    Featured Experts
    Related Articles
    News

    HKMA Announces Repayment Deferment Under Payment Holiday Scheme

    HKMA, together with the Banking Sector Small and Medium-Size Enterprise (SME) Lending Coordination Mechanism, announced a ninety-day repayment deferment for trade facilities under the Pre-approved Principal Payment Holiday Scheme.

    August 05, 2020 WebPage Regulatory News
    News

    ESRB Paper Presents Alternative Approach to EBA Stress Test Proposal

    The Advisory Scientific Committee of ESRB published a response, in the form of an Insights Paper, to the EBA proposals for reforms to the stress testing framework in EU.

    August 05, 2020 WebPage Regulatory News
    News

    MAS Announces Key Initiatives to Support Adoption of SORA

    MAS announced several initiatives to support adoption of the Singapore Overnight Rate Average (SORA), which is administered by MAS.

    August 05, 2020 WebPage Regulatory News
    News

    BoE Updates Template and Definitions for Form ER

    BoE updated the reporting template for Form ER as well as the Form ER definitions, which contain guidance on the methodology to be used in calculating annualized interest rates.

    August 05, 2020 WebPage Regulatory News
    News

    PRA to Extend Temporary High Balance Coverage Amid COVID Crisis

    PRA published the policy statement PS19/20 on the final policy for extending coverage under the Financial Services Compensation Scheme (FSCS) for Temporary High Balance.

    August 04, 2020 WebPage Regulatory News
    News

    EBA Publishes Standards on Disclosure and Reporting of MREL and TLAC

    EBA published the final draft implementing technical standards for disclosures and reporting on the minimum requirements for own funds and eligible liabilities (MREL) and the total loss-absorbing capacity (TLAC) requirements in EU.

    August 03, 2020 WebPage Regulatory News
    News

    EBA Releases Erratum for Phase 2 Package on Reporting Framework 2.10

    EBA published an erratum for the phase 2 of technical package on the reporting framework 2.10.

    August 03, 2020 WebPage Regulatory News
    News

    EC Sets Out Updated Technical Information for Solvency II Calculations

    EC published the Implementing Regulation 2020/1145, which lays down technical information for calculation of technical provisions and basic own funds.

    August 03, 2020 WebPage Regulatory News
    News

    US Agencies Issue Statement on Additional COVID-19 Loan Accommodations

    FFIEC, on behalf of its members that include US Agencies such as CFPB, FDIC, FED, NCUA, and OCC, issued a joint statement that sets out prudent risk management and consumer protection principles for financial institutions to consider while working with borrowers.

    August 03, 2020 WebPage Regulatory News
    News

    PRA Consults on Implementation of Certain Provisions of CRD5

    PRA, via the consultation paper CP12/20, proposed changes to its rules, supervisory statements, and statements of policy to implement certain elements of the Capital Requirements Directive (CRD5).

    July 31, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5626