SEC published corrections to certain sections of the final rule on capital and margin requirements for security-based swap dealers and major security-based swap participants, segregation requirements for security-based swap dealers, and notification requirements with respect to segregation for security-based swap dealers and major security-based swap participants. The final rule was published in the Federal Register on August 22, 2019 and became effective on October 21, 2019.
The rule on capital and margin requirements for swaps addresses the following key areas:
- It establishes minimum capital requirements for security-based swap dealers and major security-based swap participants, for which there is no prudential regulator (non-bank security-based swap dealers and major security-based swap participants). This also increases the minimum net capital requirements for broker-dealers that use internal models to compute net capital (ANC broker-dealers). In addition, it establishes capital requirements tailored to security-based swaps and swaps for broker-dealers that are not registered as an security-based swap dealer or major security-based swap participant to the extent they trade these instruments.
- It establishes margin requirements for non-bank security-based swap dealers and major security-based swap participants with respect to non-cleared security-based swaps.
- It establishes segregation requirements for security-based swap dealers and stand-alone broker-dealers for cleared and non-cleared security-based swaps.
- It amends the existing cross-border rule of SEC to provide a means to request substituted compliance with respect to the capital and margin requirements for foreign security-based swap dealers and major security-based swap participants and provide guidance on how SEC will evaluate requests for substituted compliance.
Effective Date: October 21, 2019
Keywords: Americas, US, Banking, Securities, Capital Requirements, Dodd-Frank Act, Security-Based Swaps, Margin Requirements, Segregation Requirements, Reporting, Swap Dealers, Swap Participants, Cross-Border Treatment, SEC
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