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

May 2013
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SEC’s Take on Cross-Border Derivatives Rules – Catalyst for global moderation or unwelcome complication?

At a glance

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.

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.