SEC Statement on Certain Provisions of Business Conduct Standards
SEC issued a statement setting out its position, for a limited time period, that certain actions with respect to specific provisions of the SEC Business Conduct Standards for security-based swap dealers (SBSDs) and major security-based swap participants (MSBSPs) will not provide a basis for SEC enforcement action. The statement also addresses the position on the ability of parties to security-based swaps to rely on written representations previously provided in relation to swaps—also for a limited time period. The statement applies only until five years after the compliance date for security-based swap entity registration rules. The statement will be effective from November 06, 2018.
CFTC, in 2012, adopted business conduct rules for swap dealers and major swap participants. To assist the swaps industry in implementing and complying with the CFTC’s Business Conduct Rules, industry participants developed standardized counterparty relationship. In 2016, pursuant to Section 15F of the Securities Exchange Act of 1934, SEC adopted final rules imposing business conduct standards for security-based swap dealers and major security-based swap participants. SEC endeavored to harmonize its rules with analogous CFTC requirements where possible to create efficiencies for entities that have already established infrastructure for compliance with analogous CFTC requirements. In certain instances, however, the SEC requirements and the associated representations, which would be required under standardized counterparty relationship documentation, diverge from those of the analogous CFTC requirements, which are reflected in the existing standardized counterparty relationship documentation. Market participants have expressed concerns about practical compliance difficulties presented by certain differences.
The SEC statement is intended to minimize potential market disruptions to the existing counterparty relationships resulting solely from documentation implementation issues that may arise when security-based swap dealers and major security-based swap participants are required to register with SEC. Upon registration with SEC, entities that are also registered with CFTC will be required to comply with both the SEC Business Conduct Standards as well as the analogous rules adopted by CFTC in 2012.
Related Links
Effective Date: November 06, 2018
Keywords: Americas, US, Securities, SBSD, MSBSP, Business Conduct, CFTC, SEC
Previous Article
IMF Board Decides to Formally Recognize CPIFR for Banking SectorRelated Articles
EC Adopts Financial Reporting Changes Arising from Benchmark Reforms
EC published Regulation 2021/25 that addresses amendments related to the financial reporting consequences of replacement of the existing interest rate benchmarks with alternative reference rates.
BIS Bulletin Examines Key Elements of Policy Response to Cyber Risk
BIS published a bulletin, or a note, that examines the cyber threat landscape in the context of the pandemic and discusses policies to reduce risks to financial stability.
HMT Updates List of Post-Brexit Equivalence Decisions in UK
HM Treasury, also known as HMT, has updated the table containing the list of the equivalence decisions that came into effect in UK at the end of the transition period of its withdrawal from EU.
EBA Issues Erratum for Technical Package on Reporting Framework 3.0
EBA published an erratum for technical package on phase 1 of the reporting framework 3.0.
APRA Publishes FAQ on Measurement of Credit Risk Weighted Assets
APRA updated a frequently asked question (FAQ), for authorized deposit-taking institutions, on the measurement of credit risk weighted assets.
EBA Publishes Risk Dashboard for Third Quarter of 2020
EBA published the quarterly risk dashboard, along with the results of the Risk Assessment Questionnaire survey among 60 banks and 15 market analysts.
ECB Analysis Shows Privacy as Biggest Concern in Use of Digital Euro
ECB concluded the public consultation on the introduction of a digital euro in EU.
ECB Finalizes Guide on Supervisory Approach to Bank Consolidation
ECB published a guide that sets out the supervisory approach to consolidation in the banking sector.
SRB Chair Outlines Work Priorities for 2021
The SRB Chair Elke König published an article setting out work priorities for 2021.
FDIC Selects Companies to Compete in Final Phase of Tech Sprint
FDIC has selected 11 technology companies—including BearingPoint, Fed Reporter, Inc, and S&P Global Market Intelligence, LLC—for inclusion in the third and final phase of the rapid prototyping competition.
