Credit Default Swaps Regulation

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Dodd-Frank Timeline, Credit Default Swaps, SEC Extension/Final Temporary Rule
Proposal Date Effective Date
July 8, 2011 until August 16, 2012

On July 1, 2011, the SEC provided guidance on the passage of security-based swaps rules, affecting credit default swaps (CDS) under Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act.<ref>SEC Extends Credit Default Swaps, Again. Courthouse News Service. Retrieved on July 11, 2011.</ref>

The Act authorizes the SEC to finalize rules regarding security-based swaps and the CFTC to regulate other types of swaps. Beginning July 16, 2011, security-based swaps are defined as "securities" and fall under the jurisdiction of federal laws such as the Securities Act of 1933 and the Securities Exchange Act of 1934.

Final Temporary Rule[edit]

"As one part of today’s action, the Commission approved an order granting temporary relief and interpretive guidance to make clear that a substantial number of the requirements of the Exchange Act applicable to securities will not apply to security-based swaps when the revised definition of 'security' goes into effect on July 16. Nevertheless, federal securities laws prohibiting fraud and manipulation will continue to apply to security-based swaps after that date. To enhance legal certainty for market participants, the Commission also provided temporary relief from provisions of U.S. securities laws that allow the voiding of contracts made in violation of those laws."<ref>SEC Provides Additional Guidance, Interim Relief and Exemptions for Security-Based Swaps Under Dodd-Frank Act. SEC. Retrieved on July 1, 2011.</ref>

The final temporary rule/extension entered the Federal Register on July 8, 2011. The rule is effective until August 16, 2012.

Extension of Temporary Exemptions for Eligible Credit Default Swaps To Facilitate Operation of Central Counterparties To Clear and Settle Credit Default Swaps


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