SEC Adopts Recordkeeping And Reporting Requirements For Security-Based Swaps Dealers

The SEC adopted a final rule under the Dodd-Frank Act, establishing recordkeeping and financial reporting requirements applicable to (i) broker-dealers, (ii) SBSDs that are primarily regulated by a "prudential regulator" ("bank SBSDs"), and (iii) SBSDs that are neither broker-dealers nor bank SBSDs ("standalone SBSDS").

Broker-dealers generally will be subject to existing Rules adopted under Section 17(a) of the Exchange Act as amended to account for SBS transactions. Bank SBSDs and standalone SBSDs will be subject to newly adopted Rules 18a-5 through 18a-10. Although the newly adopted rules significantly parallel the existing amended rules, there are some meaningful differences reflecting the fact that (i) bank SBSDs and standalone SBSDs can engage in a lesser range of activities than broker-dealers, and (ii) the SEC's authority over bank SBSDs is materially less than its authority over the types of firms. That is, as to bank SBSDs, the SEC's authority is limited to