SEC: Rules for security-based swap dealers and major security-based swap participants

SEC has voted unanimously to propose capital, margin, and segregation requirements for security-based swap dealers and major security-based swap participants. Under the Dodd-Frank Act, SEC must impose margin and capital requirements to help ensure the safety and soundness of security-based swap dealers and major security-based swap participants. The margin rules are required to be appropriate for the risk associated with security-based swaps that are not “cleared” by a security-based swap clearing agency. The proposed segregation rules are intended to facilitate the prompt return of customer property to customers before or during a liquidation proceeding if a security-based swap dealer fails. SEC has now proposed — and in some cases adopted — substantially all of the rules that create the new regulatory regime for derivatives within its jurisdiction.