[Federal Register Volume 78, Number 100 (Thursday, May 23, 2013)]
[Proposed Rules]
[Pages 30800-30803]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-10836]
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SECURITIES AND EXCHANGE COMMISSION
17 CFR Parts 240, 242, and 249
[Release No. 34-69491; File Nos. S7-27-10, S7-32-10, S7-34-10, S7-35-
10, S7-43-10, S7-03-11, S7-06-11, S7-08-11, S7-25-11, S7-40-11, S7-05-
12, S7-08-12]
RIN 3235-AK74, 3235-AK77, 3235-AK80, 3235-AK79, 3235-AK88, 3235-AK91,
3235-AK93, 3235-AL13, 3235-AL10, 3235-AL05, 3235-AL12
Reopening of Comment Periods for Certain Proposed Rulemaking
Releases and Policy Statements Applicable to Security-Based Swaps
AGENCY: Securities and Exchange Commission.
ACTION: Reopening of comment periods.
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SUMMARY: The Securities and Exchange Commission (``Commission'') is
reopening the comment periods for its outstanding rulemaking releases,
published in the Federal Register and listed herein, that concern
security-based swaps (``SB swaps'') and SB swap market participants and
were proposed pursuant to certain provisions of Title VII of the Dodd-
Frank Wall Street Reform and Consumer Protection Act (the ``Dodd-Frank
Act'') and the Securities Exchange Act of 1934 (the ``Exchange Act''),
among other provisions (together, the ``Proposed Rules''). The
Commission is also reopening the comment period for its Statement of
General Policy on the Sequencing of the Compliance Dates for Final
Rules Applicable to Security-Based Swaps adopted pursuant to the
Exchange Act and the Dodd-Frank Act,
[[Page 30801]]
published in the Federal Register on June 14, 2012 (the ``Policy
Statement''). The reopening of these comment periods is intended to
allow interested persons additional time to analyze and comment upon
the Proposed Rules and the Policy Statement in light of the
Commission's proposal of substantially all of the rules required to be
adopted by Title VII of the Dodd-Frank Act, its proposal of rules and
interpretations addressing the application of the SB swap provisions of
Title VII of the Dodd-Frank Act to cross-border SB swap transactions
and non-U.S. persons that act in capacities regulated under the Dodd-
Frank Act (the ``Cross-Border Proposed Rules''), and the Commodity
Futures Trading Commission's (the ``CFTC'') adoption of substantially
all of the rulemakings establishing the new regulatory framework for
swaps. All comments received to date on the Proposed Rules and the
Policy Statement will be considered and need not be resubmitted.
DATES: For the Proposed Rules and the Policy Statement, the comment
periods are reopened until July 22, 2013.
ADDRESSES: Comments may be submitted by any of the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/proposed.shtml);
Send an email to [email protected]. Please include the
file number for the specific action being commented upon on the subject
line; or
Use the Federal Rulemaking portal (http://www.regulations.gov). Follow the instructions for submitting comments.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to the file number for the specific action
being commented upon. This file number should be included on the
subject line if email is used. To help us process and review your
comments more efficiently, please use only one method. We will post all
comments on the Commission's Internet Web site (http://www.sec.gov).
Comments also are available for Web site viewing and printing at the
Commission's Public Reference Room, 100 F Street NE., Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. All comments received will be posted without change; we do
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly.
FOR FURTHER INFORMATION CONTACT: With respect to this release, Ann
Parker McKeehan, Special Counsel, at (202) 551-5797, or Jason Williams,
Attorney-Adviser, at (202) 551-5763, Office of Derivatives Policy,
Division of Trading and Markets, Securities and Exchange Commission,
100 F Street NE., Washington, DC 20549. With respect to a particular
action discussed herein, the Commission staff member listed in the
action.
SUPPLEMENTARY INFORMATION:
I. Background
Subtitle B of Title VII of the Dodd-Frank Act \1\ (``Title VII'')
amends the Securities Act of 1933 (``Securities Act'') \2\ and the
Exchange Act \3\ to substantially expand the regulation of the SB swap
market with a goal of establishing a new regulatory framework within
which this market can evolve in a more transparent, efficient, fair,
accessible, and competitive manner.\4\ Under the Dodd-Frank Act,
regulatory authority over derivatives is divided between the Commission
and the CFTC, with the Commission having authority over SB swaps, the
CFTC having authority over swaps, which represent the overwhelming
majority of the overall market for derivatives subject to the Dodd-
Frank Act, and the Commission and the CFTC jointly regulating mixed
swaps.\5\
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\1\ Dodd-Frank Wall Street Reform and Consumer Protection Act,
Public Law 111-203, 124 Stat. 1376 (2010).
\2\ 15 U.S.C. 77a et seq.
\3\ 15 U.S.C. 78a et seq.
\4\ See generally Subtitle B of Title VII.
\5\ Section 712(d) of the Dodd-Frank Act provides that the
Commission and the CFTC, in consultation with the Board of Governors
of the Federal Reserve System, shall further define the terms
``swap'' and ``security-based swap,'' among others. These terms are
defined in sections 721 and 761 of the Dodd-Frank Act and the
Commission and the CFTC have adopted further definitions of these
terms in a joint rulemaking. See Further Definition of ``Swap,''
``Security-Based Swap,'' and ``Security-Based Swap Agreement'';
Security-Based Swap Agreement Recordkeeping, Release No. 33-9338
(July 18, 2012); 77 FR 48208 (Aug. 13, 2012) (``Product Definitions
Rules'').
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The Title VII amendments to the Exchange Act generally require,
among other things: (1) The registration and comprehensive oversight of
security-based swap dealers and major security-based swap participants;
\6\ (2) the reporting of SB swaps to a registered security-based swap
data repository (``SDR''), or to the Commission (if the SB swap is
uncleared and no SDR will accept the SB swap), and dissemination of SB
swap information to the public; \7\ (3) the clearing of SB swaps at a
registered clearing agency (or a clearing agency that is exempt from
registration) if the Commission makes a determination that such SB
swaps are required to be cleared, unless an exception from the
mandatory clearing requirement applies; \8\ and (4) if an SB swap is
subject to the clearing requirement, the execution of the SB swap
transaction on an exchange, on a security-based swap execution facility
(``SB SEF'') registered under the Exchange Act,\9\ or on an SB SEF that
has been exempted from registration by the Commission under the
Exchange Act,\10\ unless no SB SEF or exchange makes such SB swap
available for trading.\11\
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\6\ See section 15F of the Exchange Act, 15 U.S.C. 78o-10.
\7\ See section 3(a)(75) of the Exchange Act, 15 U.S.C.
78c(a)(75) (defining the term ``security-based swap data
repository''); section 13(m) of the Exchange Act (regarding public
availability of SB swap data); section 13(n) of the Exchange Act
(regarding requirements related to SDRs); and section 13A of the
Exchange Act (regarding reporting and recordkeeping requirements for
certain SB swaps). See also Security-Based Swap Data Repository
Registration, Duties, and Core Principles, Release No. 34-63347
(Nov. 19, 2010), 75 FR 77306 (Dec. 10, 2010); corrected at 75 FR
79320 (Dec. 20, 2010) and 76 FR 2287 (Jan. 13, 2011); and Regulation
SBSR--Reporting and Dissemination of Security-Based Swap
Information, Release No. 34-63346 (Nov. 19, 2010), 75 FR 75208 (Dec.
2, 2010).
\8\ See section 3C(a)(1) of the Exchange Act, 15 U.S.C. 78c-
3(a)(1). See also Process for Submissions for Review of Security-
Based Swaps for Mandatory Clearing and Notice Filing Requirements
for Clearing Agencies; Technical Amendments to Rule 19b-4 and Form
19b-4 Applicable to All Self-Regulatory Organizations, Release No.
34-63557 (Dec. 15, 2010), 75 FR 82490 (Dec. 30, 2010).
\9\ 15 U.S.C. 78c-4.
\10\ Id. at 78c-4(e).
\11\ See section 3C(g) of the Exchange Act, 15 U.S.C. 78c-3(g)
and section 3C(h) of the Exchange Act, 15 U.S.C. 78c-3(h). See also
section 3(a)(77) of the Exchange Act, 15 U.S.C. 78c(77) (defining
the term ``security-based swap execution facility''). See also
Registration and Regulation of Security-Based Swap Execution
Facilities, Release No. 34-63825 (Feb. 2, 2011), 76 FR 10948 (Feb.
28, 2011).
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The Commission has proposed substantially all of the rules required
to be adopted by Title VII.\12\ The Commission also has adopted the
following rules:
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\12\ The Commission has not yet proposed rules regarding the
reporting and recordkeeping requirements to which security-based
swap dealers and major security-based swap participants will be
subject pursuant to Exchange Act section 15F(f). 15 U.S.C. 78o-
10(f).
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Joint rules with the CFTC that further define the terms
``swap dealer,'' ``security-based swap dealer,'' ``major swap
participant,'' ``major security-based swap participant,'' and
``eligible contract participant;'' \13\
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\13\ See Further Definition of ``Swap Dealer,'' ``Security-Based
Swap Dealer,'' ``Major Swap Participant,'' ``Major Security-Based
Swap Participant'' and ``Eligible Contract Participant'', Release
No. 34-66868 (Apr. 27, 2012), 77 FR 30596 (May 23, 2012) (``Entity
Definitions Rules'').
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[[Page 30802]]
Rules that establish the procedure by which clearing
agencies submit SB swaps for a determination as to whether those
instruments should be subject to mandatory clearing; \14\
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\14\ See Process for Submissions for Review of Security-Based
Swaps for Mandatory Clearing and Notice Filing Requirements for
Clearing Agencies; Technical Amendments to Rule 19b-4 and Form 19b-4
Applicable to All Self-Regulatory Organizations, Release No. 34-
67286 (June 28, 2012), 77 FR 41602 (July 13, 2012) (``Clearing
Procedures Rules'').
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Joint rules with the CFTC that further define the terms
``swap,'' ``security-based swap,'' and ``security-based swap
agreement'' and regarding the regulation of mixed swaps and SB swap
agreement recordkeeping; \15\ and
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\15\ See Product Definitions Rules, supra note 5.
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Rules that establish standards for how registered clearing
agencies should manage their risks and run their operations.\16\
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\16\ See Clearing Agency Standards, Release No. 34-68080 (Oct.
22, 2012), 77 FR 66219 (Nov. 2, 2012) (``Clearing Agency
Standards'').
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Most recently, the Commission has proposed the Cross-Border
Proposed Rules, which address the treatment of cross-border SB swap
transactions and non-U.S. persons acting in capacities regulated under
Title VII.\17\ While the Commission may propose additional rules
pertaining to SB swaps that are not mandated by Title VII, SB swap
market participants and other members of the public now have a
substantially complete picture of the Commission's proposed regulatory
framework for SB swaps. Additionally, the CFTC has adopted nearly all
of the rules establishing the swaps regulatory regime.\18\
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\17\ See Cross-Border Application of Title VII of the Dodd-Frank
Wall Street Reform and Consumer Protection Act; Re-Proposal of
Regulation SBSR and Certain Rules and Forms Relating to the
Registration of Security-Based Swap Dealers and Major Security-Based
Swap Participants, Release No. 34--------------- (--------, 2013).
\18\ CFTC Chairman Gary Gensler has noted that the CFTC has
``largely completed the swaps market rulemaking, with 80 percent
behind us. . . .'' Gary Gensler, Chairman, Commodity Futures Trading
Comm'n, Opening Remarks at CFTC Public Roundtable on ``Futurization
of Swaps'' (Jan. 31, 2013) (transcript available at http://www.cftc.gov/PressRoom/SpeechesTestimony/opagensler-130).
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II. Reopening of Comment Periods
In light of the substantially complete picture of the proposed SB
swap regulatory regime and the CFTC's adoption of many of the
rulemakings creating the swaps regulatory regime, the Commission is
reopening the comment period of the Proposed Rules and the Policy
Statement until July 22, 2013 to provide the public with an additional
opportunity to analyze and comment upon the proposed SB swap regulatory
framework, either in part or as a whole. Commenters may submit, and the
Commission will consider, comments on any aspect of the Proposed Rules
and the Policy Statement. In addition to the questions raised in the
Proposed Rules and the Policy Statement, the Commission specifically
seeks comments on the following:
The economic consequences and effects, including costs and
benefits, of the Proposed Rules, either individually or as a whole,
including any related quantitative or qualitative information. Please
specify whether such information includes the costs and benefits of
systems, policies, or procedures already implemented to comply with the
CFTC's adoption of final rules and interpretive orders pertaining to
Title VII (together, the ``CFTC Rules'');
The overall framework and approach to implementation
detailed in the Proposed Rules and the Policy Statement;
The relationship of the Proposed Rules to any parallel
requirements of other authorities, including the CFTC and relevant
foreign regulatory authorities;
With respect to the CFTC Rules, whether and to what extent
the Commission in adopting its own rules should emphasize consistency
with the CFTC Rules versus adopting rules that are more tailored to the
SB swap market, with inclusion of any specific examples where
consistency or tailoring of a particular rule or rule set is more
critically important; and
Whether there are any areas where additional rules or
interpretations should be proposed or formal guidance provided and if
so, why.
The comment periods for the following actions are being reopened
until July 22, 2013: \19\
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\19\ The comment periods for the Entity Definitions Rules, the
Clearing Procedures Rules, the Product Definitions Rules, and the
Clearing Agency Standards are not being reopened given that, as
noted in Section I above, these rules have been adopted by the
Commission.
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Date published in the Federal Title and release
Register number of rulemaking Date closed
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10/26/2010..................... Ownership Limitations 4/29/2011
and Governance
Requirements for
Security-Based Swap
Clearing Agencies,
Security-Based Swap
Execution Facilities,
and National
Securities Exchanges
with Respect to
Security-Based Swaps
under Regulation MC
(Release No. 34-63107,
File No. S7-27-10) and
Reopening of Comment
Period (Release No. 34-
64018).
11/8/2010...................... Prohibition Against 12/23/2010
Fraud, Manipulation,
and Deception in
Connection with
Security-Based Swaps
(Release No. 34-63236,
File No. S7-32-10).
12/2/2010...................... Regulation SBSR-- 1/18/2011
Reporting and
Dissemination of
Security-Based Swap
Information (Release
No. 34-63346, File No.
S7-34-10).
12/10/2010..................... Security-Based Swap 1/24/2011
Data Repository
Registration, Duties,
and Core Principles
(Release No. 34-63347,
File No. S7-35-10).
12/21/2010..................... End-User Exception to 2/4/2011
Mandatory Clearing of
Security-Based Swaps
(Release No. 34-63556,
File No. S7-43-10).
1/21/2011...................... Trade Acknowledgement 2/22/2011
and Verification of
Security-Based Swap
Transactions (Release
No. 34-63727, File No.
S7-03-11).
2/28/2011...................... Registration and 4/4/2011
Regulation of Security-
Based Swap Execution
Facilities (Release
No. 34-63825, File No.
S7-06-11).
3/16/2011...................... Clearing Agency 4/29/2011
Standards for
Operation and
Governance (Release
No. 34-64017, File No.
S7-08-11), other than
those portions adopted
by the Clearing Agency
Standards (Release No.
34-68080).
7/18/2011...................... Business Conduct 8/29/2011
Standards for Security-
Based Swap Dealers and
Major Security-Based
Swap Participants
(Release No. 34-64766,
File No. S7-25-11).
10/24/2011..................... Registration of 12/19/2011
Security-Based Swap
Dealers and Major
Security-Based Swap
Participants (Release
No. 34-65543, File No.
S7-40-11).
[[Page 30803]]
6/14/2012...................... Statement of General 8/13/2012
Policy on the
Sequencing of the
Compliance Rules
Applicable to the
Security-Based Swaps
Adopted Pursuant to
the Securities
Exchange Act of 1934
and the Dodd-Frank
Wall Street Reform and
Consumer Protection
Act (Release No. 34-
67177, File No. S7-05-
12).
11/23/2012..................... Capital, Margin, and 2/22/2013
Segregation
Requirements for
Security-Based Swap
Dealers and Major
Security-Based Swap
Participants and
Capital Requirements
for Broker-Dealers
(Release No. 34-68071,
File No. S7-08-12) and
Extension of Comment
Period (Release No. 34-
68660).
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All comments received to date on the Proposed Rules and the Policy
Statement will be considered and need not be resubmitted.
Dated: May 1, 2013.
By the Commission.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013-10836 Filed 5-7-13; 8:45 am]
BILLING CODE 8011-01-P