SEC Adopts New Regulations for Security-Based Swap Trading, Increasing Market Transparency and Alignment with CFTC Rules

New regulations in line with the Dodd-Frank Act permit security-based swaps trading platforms to officially register with the SEC, a step expected to increase market efficiency and integrity, with an annual worth of over $8 trillion.

• The U.S. Securities and Exchange Commission (SEC) recently adopted new regulations allowing security-based swaps trading platforms to officially register with the SEC, in a move aimed at aligning the SEC's rules with those of the U.S. Commodity Futures Trading Commission (CFTC).
• The new rules are expected to lead to more transparency in the security-based swap market, with an annual worth of over $8 trillion. They also increase the market’s efficiency and integrity.
• Security-based swaps are used as a hedge against firms' existing positions, betting on the future performance of a security or commodity without the need to own the underlying commodity.
• The SEC officials expect around five entities to register under the new rules, and are part of ongoing efforts to increase transparency on Wall Street, following the 2008 financial crisis.
• The updated regulations, effective 60 days post-publication in the Federal Register, require any entity that falls under the definition of security-based swap execution facilities (SBSEFs) to file an application for registration with the SEC.

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