On June 21, 2019, the Securities and Exchange Commission (the
"SEC") adopted final rules (the
"Final Rules") that set forth: (1)
capital and margin requirements for security‑based swap
("SBS") dealers
("SBSDs") and major SBS participants
("MSBSPs") for which there is not a
Prudential Regulator1 ("nonbank
SBSDs" and "nonbank
MSBSPs"); (2) revised capital requirements for
broker‑dealers ("BDs") (including
with respect to their SBS and swaps); (3) segregation requirements
for SBSDs, MSBSPs, and BDs with respect to collateral for SBS; and
(4) the cross-border application of these capital, margin, and
segregation requirements.
OVERVIEW OF THE FINAL RULES
Capital. The Final Rules' capital
requirements for nonbank SBSDs are generally modeled on the net
liquid asset requirements that apply to BDs under SEC Rule 15c3-1,
but with a minimum net capital requirement that increases in
proportion to the volume of a nonbank SBSD's SBS business and
certain other modifications
