SEC Issues Proposed Rules On Cross-Border Security-Based Swap Activities

The SEC has proposed a long-awaited set of rules that provides its own contribution to the running debate over how US rules should apply to cross-border activity in derivatives. In a single release, the SEC's proposed rules (the "Proposed Rules"),¹ issued on May 1, 2013, take a comprehensive approach to addressing the application of Title VII of the Dodd-Frank Act ("Dodd-Frank" or "DFA") to cross-border activity in security-based swaps ("SBS") in a number of areas, including dealer registration and regulation, clearing, exchange trading and reporting. The SEC's Proposed Rules come in the midst of significant discussion, and criticism, of the approach taken by the Commodity Futures Trading Commission (the "CFTC") in its own proposed guidance on cross-border issues (issued approximately 10 months ago) by market participants and non-US regulators.