SEC’s Take on Cross-Border Derivatives Rules – Catalyst for global moderation or unwelcome complication?

May 2013

On May 1, 2013, the Securities and Exchange Commission (SEC) issued proposed rules and guidance that would apply to cross-border security-based swap transactions. The SEC's release now shares the spotlight with the Commodity Futures Trading Commission's (CFTC) proposed cross-border guidance related to swap transactions, issued nearly a year ago; the US has two competing releases describing possible approaches to cross-border rules.

This FS Regulatory Brief focuses on (a) the broad principles underlying the SEC and CFTC releases, with a focus on the obligations of dealers; (b) the primary discrepancies between the two regulators' approaches to cross-border transactions and substituted compliance; (c) whether (and the extent to which) the SEC proposal may shape final CFTC cross-border rules and guidance or simply complicate the picture; and (d) operational implications of the dueling proposals and what institutions should be doing now.