SEC Proposed Rule and Guidance - Regulation SBSR - Reporting and Dissemination of Security-Based Swap Information

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Dodd-Frank Timeline, Real Time Public Reporting of Swap Transaction and Pricing Data, SEC
Final Rule Issue/New Proposal Proposal Comment Deadline Effective Date, Final Rule
March 19, 2015 May 4, 2015 May 18, 2015

On January 14, 2015, the SEC approved a set of final rules Regulation SBSR. The first rule establishes registration, duties and core principles of security-based swap data repositories and the second, Regulation SBSR, outlines the reporting and dissemination procedures for security-based swap information.

At the January meeting, the commission also proposed new rules and rule amendments and guidance on the reporting and dissemination of swap data.[1] The proposed rules also include an updated compliance schedule for sections of Regulation SBSR not covered under the final rules on duties and core principles.

The proposed rules entered the Federal Register on March 19, 2015 and the deadline for public comment is May 4, 2015. A proposed schedule of phased compliance schedule is explained below, and detailed in the attached document on pages 14763-14766

Background

On November 19, 2010, the SEC held an open meeting concerning rules entailing how security-based swap transactions should be reported and publicly disseminated under the Dodd-Frank Act. Among the topics at this meeting were the parties responsible for reporting security-based swap information, the specific information to be reported, and the destination of the reported information.[2] Proposed rules were added to the Federal Register on December 2, 2010.

Regulation SBSR was re-proposed in May 2013 in conjunction with the agency's rules on cross-border activities. The cross-border rules were finalized in June 2014.

Reg. SBSR applies to transactions involving U.S. persons and registered broker-dealers and designed to "promote transparency" in the dissemination of swap data. Under the final rules, security-based swap information must be reported to an SDR within 24 hours of execution, with data accessible by the commission. The regulation also requires SDRs to publicly disseminate a report of any transaction they receive, immediately upon receipt.

Reg. SBSR also mandates a global legal entity identifier system to facilitate reporting and analysis across multiple swap data repositories. The LEI system calls for unique trader identification to allow the SEC and other regulators to monitor swap activity for systemic risks.

Rule Summary

According to the press release, the proposed rule "would assign reporting duties for certain security-based swaps not addressed by the adopted rules, prohibit registered SDRs from charging fees to or imposing usage restrictions on the users of publicly disseminated security-based swap transaction data, and provide a compliance schedule for certain provisions of Regulation SBSR."

The proposal also offers guidance in the application of the rules to prime brokerage transactions, as well as for the reporting and public dissemination of allocations of cleared security-based swaps.

The proposal also changes the compliance phase in from four phases to two, as follows:

  • Compliance Date 1: six months after the first registered SDR that accepts reports of security-based swaps in a particular asset class commences operations as a registered SDR, all newly executed swaps will be required to be reported to an SDR.
  • Compliance Date 2: nine months after the first commencement (or three months after Compliance Date 1), any corrected transaction reports must also be reported to an SDR. According to the commission, "This will allow registered SDRs a period of three months after they begin receiving reports of individual security-based swap transactions to identify and resolve any issues related to trade-by-trade reporting by participants and further test their data dissemination systems.

Related Documents: Proposed Rule, Guidance and Compliance Schedule


References

  1. SEC Adopts Rules to Increase Transparency in Security-Based Swap Market. SEC. Retrieved on March 20, 2015.
  2. Press Release - SEC Proposes Rules on Security-Based Swap Reporting. SEC. Retrieved on November 19, 2010.

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