SEC Stays Vague on Derivatives Regulation Timeframe
The US Securities Exchange Commission (SEC) has released a document detailing the order in which it desires incoming regulation of the derivatives market to take effect, but has declined to outline precise dates.
The policy statement, which also seeks public comment on the proposed rules, aims to attenuate industry anxiety over a perceived lack of direction on the part of the regulators regarding derivatives reform. As part of the Dodd-Frank Act, some of the major changes proposed under Title VII provisions will include the centralized trading of standardized derivatives contracts through so-called Swap Execution Facilities (SEFs).
"The policy statement seeks to provide a ‘roadmap' to market participants and the public on how we expect to implement the various regulatory requirements for this market," says Mary L Schapiro, chairman at the SEC. "We look forward to public comment on our anticipated sequencing as we continue to adopt and implement the rules under the law."
Missed Deadlines
However, both the SEC and the Commodity Futures Trading Commission (CFTC) have repeatedly missed deadlines for finalizing the specific rules, which were initially meant to be completed last year. In the policy statement, the SEC has declined to name specific dates for finalization, although the CFTC has already set a tentative date of 31 December 2012 for its own rulemaking process.
The foundation of the SEC's delays rest on standardizing definitions for various terms that are crucial to effectively implementing the regulation. These include defining security-based swaps and other areas in a legal context, pursuant to the Dodd-Frank Act as a whole. Other areas that have proved difficult to codify include the extraterritorial applications of Dodd-Frank, for example, regarding how US banks operating overseas will be affected.
Both the SEC and the CFTC have repeatedly missed deadlines for finalizing the specific rules, which were initially meant to be completed last year.
Earlier in the year, both the SEC and CFTC finalized rules which will identify companies as swap dealers. The SEC also stated that it intends for data warehouses, which collect information on the derivatives market, to register with the regulators. Part of the policy statement's objective is to introduce and reinforce the SEC's phased approach to delivering and implementing rules, so as to avoid operational difficulties with overall compliance.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Regulation
Bank-led consortium takes aim at position reporting
Five banks, including Barclays, BNP Paribas, Goldman Sachs and HSBC, have joined forces to mitigate interpretation and implementation errors in position reporting disclosures.
Verafin launches genAI copilot for fincrime investigators
Features include document summarization and improved research tools.
Waters Wrap: Open source and storm clouds on the horizon
Regulators and politicians in America and Europe are increasingly concerned about AI—and, by extension, open-source development. Anthony says there are real reasons for concern.
DSB says industry is ready to meet UPI mandate ahead of deadline
The Unique Product Identifier will be required for certain OTC derivatives in the EU at the end of April, following US adoption in January.
‘Very careful thought’: T+1 will introduce costs, complexities for ETF traders
When the US moves to T+1 at the end of May 2024, firms trading ETFs will need to automate their workflows as much as possible to avoid "settlement misalignment" and additional costs.
Court case probes open-source licenses as movement stands at crossroads
The Software Freedom Conservancy’s lawsuit against TV-maker Vizio begins trial in California, raising questions about open-source licenses and the risks posed by adhering to them.
Waters Wavelength Podcast: Countdown to T+1
DTCC’s Val Wotton joins the podcast this week to discuss the impending move to T+1 in the US.
Consolidated tape hopefuls gear up for uncertain tender process
The bond tapes in the UK and EU are on track to be authorized in 2025. Prospective bidders for the role of provider must choose where to focus their efforts in anticipation of more regulatory clarity on the tender process.
Most read
- Waters Wavelength Podcast: Bloomberg’s Tony McManus
- IMD & IRD Awards 2024: All the winners
- Waters Wavelength Podcast: S&P’s CTO on AI, data, and the future of datacenters