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
ECB Finds Banks Unprepared for Pillar 3 Climate Risk Disclosures
The European Central Bank (ECB) published results of the 2022 supervisory assessment of climate-related and environmental risk disclosures among significant institutions (103) and a selected number of less significant institutions (28).
NCUA Assesses Credit Union Exposure to Climate-Related Physical Risks
The National Credit Union Administration (NCUA) released a Research Note that examines the exposure of credit unions to climate-related physical risks. In a related development
EBA Issues Multiple Regulatory and Reporting Updates for Banks
The European Banking Authority (EBA) is seeking comments, until July 31, 2023, on the draft Guidelines on the proposed common approach to the resubmission of historical data under the EBA reporting framework.
EC Adopts Regulation on Own Funds, Issues Other Updates
The European Commission adopted Delegated Regulations on own funds and eligible liabilities, on requirements for the internal methodology under the internal default risk model
CDP Platform to Report Plastic-Related Impact, Issues Other Updates
The Carbon Disclosure Project (CDP) announced that its global environmental disclosure platform has enabled reporting on plastic-related impact for nearly 7,000 companies worldwide
IASB to Enhance Reporting of Climate Risks, Proposes IFRS 9 Amendments
The International Accounting Standards Board (IASB) updated its work plan to enhance the reporting of climate-related risks in the financial statements,
BIS Addresses Data Gaps and Macro-Prudential Policy for Climate Risks
The Financial Stability Institute (FSI) of the Bank for International Settlements (BIS) published a brief paper that examines challenges associated with the use of macro-prudential policies to address climate-related financial risks.
FCA Sets Out Business Plan, Launches TechSprint on Greenwashing
The Financial Conduct Authority (FCA) published its business plan for 2023-24. The plan sets out details of the work planned for the next 12 months to achieve better outcomes for consumers and markets
UK Committee Sets Out Recommendations for Next Phase of Open Banking
The Joint Regulatory Oversight Committee (JROC), comprising the Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR) as co-chairs and the HM Treasury and the Competition and Markets Authority (CMA) as members
ECB Publishes Multiple Regulatory Updates for Banking Institutions
The European Central Bank (ECB) published the results of the 2022 climate risk stress test of the Eurosystem balance sheet,
