The Securities and Exchange Commission yesterday voted unanimously to re-propose a rule regarding the allocation of Dodd-Frank requirements to cross-border security-based swap transactions. The proposed rule would not impose mandatory clearing or mandatory trade execution on a security-based swap transaction between two non-U.S. persons solely because one or both counterparties arrange, negotiate or execute the security-based swap using personnel located in the United States.
However, for purposes of counting transactions to determine whether it must register with the SEC, the proposal would require a non-U.S. person to include any dealing transactions that it arranges, negotiates or executes using its personnel or personnel of its agent located in the United States.
The proposed rule would also subject the “U.S. business” of a registered security-based swap dealer to external business conduct standards and would broaden the number of security-based swaps subject to Regulation SBSR, which imposes reporting requirements. Comments are due 60 days after publication in the Federal Register. For more information, contact ABA’s Jason Shafer.