SEC Issues “Roadmap” on Phase in of Derivatives Regulation

June 11, 2012

The SEC issued a policy statement that describes the order in which it expects new rules regulating the derivatives market to take effect. The statement covers final rules to be adopted by the SEC under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”).

Title VII of the Dodd-Frank Act establishes a comprehensive framework to regulate over-the-counter derivatives, authorizing the Commodity Futures Trading Commission to regulate “swaps,” and the SEC to regulate “security-based swaps.”

The SEC is requesting public comment on its plan to phase in final rules regulating security-based swaps and security-based swap market participants. The policy statement does not estimate when the rules would be put in place, but describes the sequence in which they would take effect. The phased-in approach is intended to avoid the disruption that could occur if all the new rules took effect simultaneously. To date, the SEC has proposed nearly all the rules required under the Act and already has begun to adopt those rules.

The statement also discusses the expiration of exemptions granted to securities-based swaps market participants from certain provisions of the Securities Act of 1933, the Securities Exchange Act of 1934, and the Trust Indenture Act of 1939 that were, most of which expire when certain final rules under Title VII become effective.

The SEC will seek public comments for 60 days after the date of the policy statement’s publication in the Federal Register.

Click to access the policy statement.


Investment Advisers, Investment Companies, Regulatory