Security-Based Swaps Meet Rule 15a-6 - Potential New Exemptions For Security-Based Swaps And SBSDs

The Securities and Exchange Commission (the “SEC”) has proposed a number of amendments to its rules and guidance governing security-based-swaps (“SBS”) entered into by non-U.S. firms. The proposals would increase the activities that a U.S. agent could conduct without the SEC deeming the SBS to have been “arranged, negotiated or executed” in the United States and thus without triggering U.S. regulatory requirements.¹ Even when an SBS entered into by a non-U.S. SBS dealer has been arranged, negotiated or executed in the United States, the SEC proposes to reduce the regulatory requirements that would apply when the non-U.S. dealer is trading with another non-U.S. counterparty.

The Proposal represents a rethink of certain requirements adopted a few years ago (although not yet implemented, as the entire SBS regulatory regime has yet to go into effect) and, as a general matter, moves the SEC’s treatment of cross-border SBS in the direction of its treatment of cross-border