SEC Proposes Rules for Cross-Border Security-Based Swap Activities

The Securities and Exchange Commission ("SEC" or "Commission") voted unanimously today to propose rules and interpretive guidance for the application of its regulations under Title VII of the Dodd-Frank Act¹ to cross-border security-based swaps ("SBS"). Although the SEC has issued a number of proposed rules to regulate the SBS markets, none of them addresses extraterritoriality. Today's comprehensive proposal describes the regulatory requirements that will apply when a transaction occurs in part within and in part outside the United States or involves U.S. persons.² The proposal is complex and lengthy (the release, which has not yet been published, is over 1,000 pages) and addresses ten areas of SBS regulation: (1) registration of SBS dealers and major SBS participants; (2) data repositories; (3) clearing agencies; (4) SBS execution facilities; (5) regulatory reporting; (6) public dissemination of trade data; (7) mandatory clearing; (8) mandatory trading; (9)