Document ID: SEC-2014-0245-0001
Agency: sec
Document Type: Notice
Title: Temporary Exemption Orders: Definition of Security to Encompass Security-Based Swaps
Posted Date: 2014-02-10T05:00Z

[Federal Register Volume 79, Number 27 (Monday, February 10, 2014)]
[Notices]
[Pages 7731-7735]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-02834]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71485; File No. S7-27-11]

Order Extending Temporary Exemptions Under the Securities 
Exchange Act of 1934 in Connection with the Revision of the Definition 
of ``Security'' to Encompass Security-Based Swaps, and Request for 
Comment

I. Introduction

    The Securities and Exchange Commission (``Commission'') is 
extending certain temporary exemptive relief contained in a prior 
Commission order (``Exchange Act Exemptive Order'') \1\ in connection 
with the revision of the Exchange Act definition of ``security'' to 
encompass security-based swaps. These temporary exemptions were 
provided by the Commission on July 1, 2011 and are set to expire on 
February 11, 2014 (``Expiring Temporary Exemptions'').
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    \1\ See Order Granting Temporary Exemptions under the Securities 
Exchange Act of 1934 in Connection with the Pending Revisions of the 
Definition of ``Security'' to Encompass Security-Based Swaps, 
Exchange Act Release No. 64795 (Jul. 1, 2011), 76 FR 39927 (Jul. 7, 
2011) (``Exchange Act Exemptive Order'').
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    As described in more detail below, the Commission is extending the 
expiration date for the Expiring Temporary Exemptions. Specifically, 
for those Expiring Temporary Exemptions that are not directly linked to 
pending security-based swap rulemakings, the Commission is extending 
the expiration date until the earlier of such time as the Commission 
issues an order or rule determining whether any continuing exemptive 
relief is appropriate for security-based swap activities with respect 
to any of these Exchange Act provisions or until three years following 
the effective date of this Order. For each Expiring Temporary Exemption 
that is related to pending security-based swap rulemakings, the 
Commission is extending the expiration date until the compliance date 
for the related security-based swap-specific rulemaking.
    The approach for extending the exemptions related to security-based 
swap rulemakings reflected in this Order is intended to facilitate a 
timely phased-in determination regarding the application of the 
relevant provisions of the Exchange Act to security-based swaps based 
on the development of the relevant rules mandated by the Dodd-Frank 
Wall Street Reform and Consumer Protection Act (``Dodd-Frank Act'') \2\ 
as the Commission moves toward finalizing those rules. This approach 
also provides the Commission flexibility while Dodd-Frank Act 
rulemaking is still in progress to determine whether continuing relief 
should be provided for any Exchange Act provisions that are not 
directly linked to specific security-based swap rulemaking.
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    \2\ The Dodd-Frank Wall Street Reform and Consumer Protection 
Act, Public Law 111-203, 124, Stat. 1376 (2010).
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II. Discussion

A. Background

    Title VII of the Dodd-Frank Act amended the Exchange Act definition 
of ``security'' to expressly encompass security-based swaps.\3\ The 
expansion of the definition of the term ``security'' has changed the 
scope of the Exchange Act regulatory provisions that apply to security-
based swaps and has raised certain complex questions that require 
further consideration.
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    \3\ Exchange Act Section 3(a)(10), 15 U.S.C. 78c(a)(10), as 
revised by Section 761(a)(2) of the Dodd-Frank Act.
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    On July 1, 2011, the Commission issued an order granting temporary 
exemptive relief from compliance with certain provisions of the 
Exchange Act in connection with the revision of the Exchange Act 
definition of ``security'' to encompass security-based swaps.\4\ The 
overall approach of the Exchange Act Exemptive Order was directed 
toward maintaining the status quo during the implementation process for 
the Dodd-Frank Act, by preserving the application of particular 
Exchange Act requirements that were already applicable in connection 
with instruments that became ``security-based swaps'' following the 
effective date of the Dodd-Frank Act,\5\ but deferring the 
applicability of additional Exchange Act requirements in connection 
with those instruments explicitly being defined as ``securities'' as of 
the effective date.\6\ The Expiring Temporary Exemptions generally 
provide for the following exemptions from Exchange Act: (a) Temporary 
exemptions in connection with security-based swap activity by certain 
``eligible contract participants''; and (b) temporary exemptions 
specific to security-based swap activities by registered brokers and 
dealers.\7\ These Expiring Temporary Exemptions\8\ are

[[Page 7732]]

currently scheduled to expire on February 11, 2014.\9\
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    \4\ See Exchange Act Exemptive Order.
    \5\ Id. The Title VII amendments of the Dodd-Frank Act generally 
became effective on July 16, 2011 (360 days after the enactment of 
the Dodd-Frank Act).
    \6\ See Exchange Act Exemptive Order at 5-6.
    \7\ See Exchange Act Exemptive Order at 39-44.
    \8\ The Exchange Act Exemptive Order provided a temporary 
exemption from Sections 5 and 6 of the Exchange Act until the 
earliest compliance date set forth in any of the final rules 
regarding registration of security-based swap execution facilities. 
The Exchange Act Exemptive Order also provided that no security-
based swap contract entered into on or after July 16, 2011 shall be 
void or considered voidable by reason of Section 29(b) of the 
Exchange Act because any person that is a party to the contract 
violated a provision of the Exchange Act for which the Commission 
has provided exemptive relief in the Exchange Act Exemptive Order, 
until such time as the underlying exemptive relief expires. This 
extension order does not affect either of these expiration dates.
    \9\ See Further Definition of ``Swap,'' ``Security-Based Swap,'' 
and ``Security-Based Swap Agreement''; Mixed Swaps; Security-Based 
Swap Agreement Recordkeeping, Exchange Act Release No. 67453 (Jul. 
18, 2012), 77 FR 48207 (Aug. 13, 2012) (``Product Definitions 
Adopting Release'') (extending the expiration date of the Expiring 
Temporary Exemptions to February 11, 2013) and Order Extending 
Temporary Exemptions under the Securities Exchange Act of 1934 in 
Connection with the Revision of the Definition of ``Security'' to 
Encompass Security-Based Swaps, and Request for Comment, Exchange 
Act Release No. 68864 (Feb. 7, 2013), 78 FR 10218 (Feb. 13, 2013) 
(``Extension Release'') (extending the expiration date to February 
11, 2014). Before issuing the Extension Release, the Commission 
received a request to extend the Expiring Temporary Exemptions from 
market participants, citing concerns that key issues and questions 
regarding the application of the federal securities laws remained 
unresolved and continuing concerns about the potential for 
unnecessary disruption to the security-based swap market. See SIFMA 
Request for Extension of the Expiration Date of the SEC's Exchange 
Act Exemptive Order and SBS Interim final Rules (Dec. 20, 2012) 
(``SIFMA Extension Request''), which is available at http://www.sec.gov/comments/s7-27-11/s72711-12.pdf.
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    To date, the Commission has proposed substantially all of the rules 
related to the new regulatory regime for derivatives under Title VII 
and has begun the process of adopting these rules.\10\ Keeping with the 
Dodd-Frank Act's stated objective of promoting financial stability in 
the U.S. financial system, the Commission has expressed its intent to 
move forward deliberatively in implementing the requirements of the 
Dodd-Frank Act, while minimizing unnecessary disruption and costs to 
the markets.\11\ Among the rules for this new regulatory framework that 
the Commission has proposed are rules relating to (i) capital, margin, 
and segregation requirements for security-based swap dealers and major 
security-based swap participants,\12\ (ii) security-based swap trade 
acknowledgement,\13\ and (iii) security-based swap execution facilities 
registration requirements.\14\ In addition, the Commission has also 
been mandated by the Dodd-Frank Act to promulgate recordkeeping and 
reporting requirements for security-based swap dealers and major 
security-based swap participants.\15\
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    \10\ See Statement of General Policy on the Sequencing of the 
Compliance Dates for Final Rules Applicable to Security-Based Swaps 
Adopted Pursuant to the Securities Exchange Act of 1934 and the 
Dodd-Frank Wall Street Reform and Consumer Protection Act, Exchange 
Act Release No. 67177 (Jun. 11, 2012), 77 FR 35625 (Jun. 14, 2012). 
See also Reopening of Comment Periods for Certain Rulemaking 
Releases and Policy Statement Applicable to Security-Based Swaps 
Proposed Pursuant to the Securities Exchange Act of 1934 and the 
Dodd-Frank Wall Street Reform and Consumer Protection Act, Exchange 
Act Release No. 69491 (May 1, 2013), 78 FR 30800 (May 23, 2013) 
(``Reopening Release'') which reopened the comment period until July 
22, 2013. See also e.g. Product Definitions Adopting Release; 
Further Definition of ``Swap Dealer,'' ``Security-Based Swap 
Dealer,'' ``Major Swap Participant,'' ``Major Security-Based Swap 
Participant'' and ``Eligible Contract Participant'', Exchange Act 
Release No. 66868 (Apr. 27, 2012), 77 FR 30596 (May 23, 2012); 
Process for Submissions for Review of Security-Based Swaps for 
Mandatory Clearing and Notice Filing Requirements for Clearing 
Agencies; Technical Amendments to Rule 19b-4 and Form 19b-4 
Applicable to all Self-Regulatory Organizations, Exchange Act 
Release No. 67286 (Jun. 28, 2012), 88 FR 41602 (Jul. 13, 2012); 
Clearing Agency Standards, Exchange Act Release No. 68080 (Oct. 22, 
2012), 77 FR 66219 (Nov. 2, 2012).
    \11\ See Exchange Act Exemptive Order.
    \12\ See Capital, Margin, and Segregation Requirements for 
Security-Based Swap Dealers and Major Security-Based Swap 
Participants and Capital Requirements for Broker-Dealers, Exchange 
Act Release No. 68071 (Oct. 18, 2012), 77 FR 70213 (Nov. 23, 2012) 
(``Security-Based Swap Capital and Margin Rules''). See also 
Reopening Release.
    \13\ See Trade Acknowledgement and Verification of Security-
Based Swap Transactions, Exchange Act Release No. 63727 (Jan. 14, 
2011), 76 FR 3859 (Jan. 21, 2011) (``Trade Acknowledgement Rule''). 
See also Reopening Release.
    \14\ See Registration and Regulation of Security-Based Swap 
Execution Facilities, Exchange Act Release No. 63825 (Feb. 2, 2011), 
76 FR 10948 (Feb. 28, 2011) (``Security-Based Swap Execution 
Facility Rules''). See also Reopening Release.
    \15\ See 15 U.S.C. 78o-10(f).
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B. Extension of Temporary Exemptions

    The Commission believes it is necessary or appropriate in the 
public interest, and consistent with the protection of investors to 
extend the Expiring Temporary Exemptions in order to avoid any 
potential market disruption stemming from the application of existing 
rules to security-based swap activities. Although the Commission is 
making significant progress in establishing and finalizing the new 
regulatory regime for securities-based swaps, key issues and questions 
regarding the application of the federal securities laws to security-
based swaps remain unresolved. However, because the Commission has 
proposed substantially all of the rules related to the new regulatory 
regime for derivatives under Title VII, the Commission is able to 
better calibrate the need for extensions of the Expiring Temporary 
Exemptions based on how those exemptions relate to ongoing rulemaking. 
Accordingly, under this approach an extension of the Expiring Temporary 
Exemptions will provide the Commission with additional time to consider 
the potential impact of the revision of the Exchange Act definition of 
``security'' on the scope of Exchange Act provisions applicable to 
security-based swaps, as well as the appropriateness of applying 
certain Exchange Act provisions to security-based swap activities in 
light of the Commission's continuing rulemaking efforts.\16\
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    \16\ This is also consistent with previous requests to extend 
the Expiring Temporary Exemptions. See SIFMA Extension Request. The 
Commission has also received a request for certain permanent 
exemptions upon the expiration of the exemptions contained in the 
Exchange Act Exemptive Order. See SIFMA SBS Exemptive Relief Request 
(Dec. 5, 2011), which is available at http://www.sec.gov/comments/s7-27-11/s72711-10.pdf.
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    While the Commission is generally extending the Expiring Temporary 
Exemptions, it is refining the applicable expiration dates for these 
exemptions by (1) extending the expiration date of certain Expiring 
Temporary Exemptions that are generally not directly related to 
specific security-based swap rulemakings until the earlier of such time 
that the Commission issues an order or rule determining whether any 
continuing exemptive relief is appropriate for security-based swap 
activities with respect to any of these Exchange Act provisions or 
until three years following the effective date of this Order, and (2) 
extending the expiration date of other Expiring Temporary Exemptions 
that are directly related to specific security-based swap rulemakings, 
until the compliance date for the relevant security-based swap 
rulemaking.\17\
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    \17\ Subsequent to the issuance of the Exchange Act Exemptive 
Order, the Commission adopted rules related to certain requirements 
applicable to municipal advisors. See Registration of Municipal 
Advisors, Exchange Act Release No. 70462 (Sep. 20, 2013), 78 FR 
67467 (Nov. 12, 2013). The temporary exemptions provided in this 
order do not apply to these recently adopted rules.
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    This approach recognizes the continuing development of the new 
regulatory regime for security-based swaps and takes into consideration 
the interrelation of certain existing Exchange Act provisions with this 
new regime. Specifically, the Commission believes it is necessary or 
appropriate in the public interest, and consistent with the protection 
of investors for the subset of Expiring Temporary Exemptions that are 
related to certain ongoing rulemakings to be addressed within any such 
rulemakings that are finalized in order to determine what, if any, 
exemptions would be appropriate based on the structure of the 
regulatory framework. The expiration dates of this subset of Expiring 
Temporary Exemptions will be extended until they are addressed within 
any relevant rulemakings relating to: (i) Capital, margin, and 
segregation requirements

[[Page 7733]]

for security-based swap dealers and major security-based swap 
participants, (ii) recordkeeping and reporting requirements for 
security-based swap dealers and major security-based swap participants, 
(iii) security-based swap trade acknowledgement rules, and/or (iv) 
registration requirements for security-based swap execution facilities.
    In addition, with respect to the subset of Expiring Temporary 
Exemptions that are not directly related to specific security-based 
swap rulemakings, the Commission believes it would be appropriate for 
these exemptions to continue for three years or until such time as the 
Commission issues an order or rule determining whether any continuing 
exemption is applicable to any of these provisions. This approach is 
designed to limit the potential for market disruptions. Moreover, this 
approach is designed to provide sufficient time for the Commission to 
explore and potentially develop an appropriate framework for regulating 
security based swap activities and to provide sufficient time for 
public input regarding any such potential framework. Accordingly, 
pursuant to its authority under Section 36 of the Exchange Act,\18\ the 
Commission believes it is necessary or appropriate in the public 
interest, and consistent with the protection of investors to extend the 
Expiring Temporary Exemptions that are not related to specific 
securities-based swap rulemakings until the earlier of the time that 
the Commission issues an order or rule determining whether continuing 
exemptive relief is appropriate or until three years after the 
effective date of this Order.
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    \18\ 15 U.S.C. 78mm. Section 36 of the Exchange Act authorizes 
the Commission to conditionally or unconditionally exempt, by rule, 
regulation, or order any person, security, or transaction (or any 
class or classes of persons, securities, or transactions) from any 
provision or provisions of the Exchange Act or any rule or 
regulation thereunder, to the extent such exemption is necessary or 
appropriate in the public interest, and is consistent with the 
protection of investors.
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    The Commission is also, pursuant to its authority under Section 36, 
extending the below outlined Expiring Temporary Exemptions, until the 
earliest compliance dates established in applicable rulemakings.
1. Expiring Temporary Exemptions Relating to Security-Based Swap 
Capital and Margin Rules
    The Commission is extending the Expiring Temporary Exemptions for 
the following Exchange Act provisions until the earliest compliance 
date set forth in any final security-based swap capital, margin, and 
segregation rules: \19\
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    \19\ In late 2012, the Commission proposed the Security-Based 
Swap Capital and Margin Rules. The proposed rules, if adopted, will 
clarify how certain Exchange Act provisions relating to the capital, 
margin, and segregation requirements of registered broker-dealers 
will apply to the security-based swap activities of registered 
broker-dealers.
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     Section 7,\20\ regarding the margin requirements for 
broker-dealers; and Regulation T,\21\ a Federal Reserve Board 
regulation regarding broker-dealer extension of credit.\22\
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    \20\ 15 U.S.C. 78g.
    \21\ 12 CFR 220.1 et seq.
    \22\ Under the approach of preserving the status quo, the 
Exchange Act Exemptive Order provided registered broker-dealers a 
limited exemption from Section 7(c) and Regulation T only to the 
extent that these provisions did not apply to the broker-dealer's 
security-based swap positions or activities prior to expansion of 
the definition of ``security'' to include security-based swaps.
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     Section 15(c)(3),\23\ which provides the Commission with 
rulemaking authority in connection with broker-dealer financial 
responsibility; Exchange Act Rule 15c3-1,\24\ including Appendices A-G 
(Exchange Act Rules 15c3-1a through 15c3-1g) \25\ regarding net capital 
requirements for brokers and dealers; Exchange Act Rule 15c3-3,\26\ 
including 15c3-3a,\27\ regarding broker-dealer reserves and custody of 
securities; and Exchange Act Rule 15c3-4,\28\ regarding internal risk 
management control systems for OTC derivatives dealers.\29\
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    \23\ 15 U.S.C. 78o(c)(3).
    \24\ 17 CFR 240.15c3-1.
    \25\ 17 CFR 240.15c3-1a through 15c3-1g.
    \26\ 17 CFR 240.15c3-3.
    \27\ 17 CFR 240.15c3-3a.
    \28\ 17 CFR 240.15c3-4.
    \29\ Under the approach of preserving the status quo, the 
Exchange Act Exemptive Order provided registered broker-dealers a 
limited exemption from Section 15(c)(3) and Rules 15c3-1 and 15c3-3 
only to the extent that these provisions did not apply to the 
broker-dealer's security-based swap positions or activities prior to 
expansion of the definition of ``security'' to include security-
based swaps. However, the limited exemption from Rule 15c3-3 is not 
available for registered broker-dealers' activities and positions 
related to cleared security-based swaps, to the extent that a 
broker-dealer is a member of a clearing agency that functions as a 
central counterparty for security-based swaps, and holds customer 
funds or securities in connection with cleared security-based swaps.
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2. Expiring Temporary Exemptions Relating to Security-Based Swap 
Recordkeeping Rules
    The Commission is extending the Expiring Temporary Exemptions for 
the following Exchange Act provisions until the earliest compliance 
date set forth in any final rules regarding recordkeeping and reporting 
requirements for security-based swap dealers and major security-based 
swap participants: \30\
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    \30\ See 15 U.S.C. 78o-10(f).
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     Section 17(a),\31\ regarding broker-dealer obligations to 
make, keep and furnish information; Section 17(b),\32\ regarding 
broker-dealer records subject to examination; Exchange Act Rules 17a-3 
through 17a-5,\33\ regarding records to be made and preserved by 
broker-dealers and reports to be made by broker-dealers; Exchange Act 
Rule 17a-11,\34\ regarding notifications that broker-dealers are 
required to make; and Exchange Act Rule 17a-13,\35\ regarding quarterly 
security counts to be made by certain exchange members and broker-
dealers.\36\
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    \31\ 15 U.S.C. 78q(a).
    \32\ 15 U.S.C. 78q(b).
    \33\ 17 CFR 240.17a-3 through 17a-5.
    \34\ 17 CFR 240.17a-11.
    \35\ 17 CFR 240.17a-13.
    \36\ Under the approach of preserving the status quo, the 
Exchange Act Exemptive Order provided registered broker-dealers a 
limited exemption from Sections 17(a) and (b), Rules 17a-3 through 
17a-5, and Rule 17a-13 only to the extent that these provisions did 
not apply to the broker-dealer's security-based swap positions or 
activities prior to expansion of the definition of ``security'' to 
include security-based swaps.
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3. Expiring Temporary Exemptions Relating to Broker-Dealer Registration 
Requirements
    The Commission is extending the Expiring Temporary Exemptions that 
relate to the registration requirements under section 15(a)(1) of the 
Exchange Act \37\ and the other requirements of the Exchange Act and 
the rules and regulations thereunder that apply to a broker or dealer 
that is not registered with the Commission \38\ until the later of the 
compliance dates set forth in (i) any final rules regarding capital, 
margin and segregation requirements for security-based swap dealers and 
major security-based swap participants \39\ or (ii) any final rules 
regarding recordkeeping and reporting requirements for security-based 
swap dealers and major security-based swap participants.\40\
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    \37\ 15 U.S.C. 78o(a)(1).
    \38\ The Exchange Act Exemptive Order excluded from the 
exemption (1) the ``broker'' registration requirements of Section 
15(a)(1) (and other Exchange Act requirements that apply to a non-
registered broker) for broker activities involving security-based 
swaps by persons that are members of a clearing agency that 
functions as a central counterparty for security-based swaps and 
that holds customer funds and securities in connection with 
security-based swaps; and (2) the ``dealer'' registration 
requirements of Section 15(a)(1) (and other Exchange Act 
requirements that apply to a non-registered dealer) for security-
based swaps dealing activities unless those activities involve 
counterparties that meet the definition of an eligible contract 
participant.
    \39\ See supra note 19.
    \40\ See 15 U.S.C. 78o-10(f).

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[[Page 7734]]

4. Expiring Temporary Exemption Relating to Trade Acknowledgement Rule
    The Commission is extending the Expiring Temporary Exemption for 
Exchange Act Rule 10b-10,\41\ regarding confirmation of transactions, 
until the earliest compliance date set forth in any final rules 
regarding trade acknowledgement and verification of security-based swap 
transactions.\42\
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    \41\ 17 CFR 240.10b-10.
    \42\ In January 2011, the Commission proposed the Trade 
Acknowledgement Rule which would govern the way in which certain 
security-based swap transactions would be acknowledged and verified 
by the parties. Under the proposed rule, security-based swap dealers 
and major security-based swap participants would have to provide to 
their counterparties a trade acknowledgement detailing information 
specific to the transaction. The Commission also proposed a limited 
exemption from the requirements of Exchange Act Rule 10b-10 for 
security-based swap dealers and major security-based swap 
participants that confirm their security-based swap transactions in 
compliance with the Trade Acknowledgement Rule. The proposed 
exemption is intended to avoid the duplicative requirements of 
having to comply with both Exchange Act Rule 10b-10 and the proposed 
Trade Acknowledgement Rule.
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5. Expiring Temporary Exemption Relating to Regulation ATS
    The Commission is extending the Expiring Temporary Exemption for 
Regulation ATS,\43\ regarding the regulatory requirements that apply to 
alternative trading systems, until the earliest compliance date set 
forth in any final rules regarding the registration of the security-
based swap execution facilities.\44\
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    \43\ 17 CFR 242.300 et seq.
    \44\ In February 2011, the Commission proposed the Security-
Based Swap Execution Facility Rules which, if adopted, will create a 
registration framework for security-based swap execution facilities, 
as well as, establish rules governing these entities.
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III. Solicitation of Comments

    The Commission believes that it would be useful to continue to 
provide interested parties the opportunity to comment on any aspect of 
the temporary exemptions contained in the Exchange Act Exemptive Order, 
this Order extending the Expiring Temporary Exemptions, and any 
additional relief that should be granted upon the expiration of the 
extension of the Expiring Temporary Exemptions, including:
    1. Is the distinction between whether an exemption is ``not 
directly linked'' to any security-based swap rulemaking or is 
``related'' to security-based swap rulemaking appropriate in connection 
with the extension of the Expiring Temporary Exemptions? Are there 
additional Expiring Temporary Exemptions that should be linked to the 
adoption of any specific security-based swap rulemakings?
    2. Is additional exemptive relief necessary or appropriate in light 
of the ongoing implementation of the Dodd-Frank Act? Are there 
particular Exchange Act provisions, for which relief has already been 
granted, that do not warrant a continuing exemption? Are there 
particular Exchange Act provisions, for which relief has not previously 
been granted, that warrant exemptions?
    Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/exorders.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number S7-27-11 on the subject line; or
     Use the Federal eRulemaking Portal (http://www.regulations.gov). Follow the instructions for submitting comments.
Paper Comments
     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F St. NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number S7-27-11. This file number 
should be included on the subject line if email is used. To help us 
process and review your comments more efficiently, please use only one 
method. The Commission will post all comments on the Commission's 
Internet Web site (http://www.sec.gov/rules/exorders.shtml). Comments 
are also available for Web site viewing and printing in the 
Commission's Public Reference Room, 100 F St. NE., Washington, DC 20549 
on official business days between the hours of 10 a.m. and 3 p.m. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly.

IV. Conclusion

    It Is Hereby Ordered, pursuant to Section 36 of the Exchange Act, 
that the Expiring Temporary Exemptions contained in the Exchange Act 
Exemptive Order in connection with the revisions of the Exchange Act 
definition of ``security'' to encompass security-based swaps are 
extended until the earlier of three years following the effective date 
of this Order or, until such time that the Commission issues an order 
or rule determining whether continuing exemptive relief is appropriate 
for security-based swap activities with respect to any of the Expiring 
Temporary Exemptions, except as set forth below:
    (a) The following exemptions are extended until the compliance date 
set forth in any final rules regarding capital, margin and segregation 
requirements for security-based swap dealers and major security-based 
swap participants:
    (1) Section 7;
    (2) Section 15(c)(3);
    (3) Regulation T, 12 CFR 220.1 et seq.;
    (4) Rule 15c3-1;
    (5) Rule 15c3-3; and
    (6) Rule 15c3-4.
    (b) The following exemptions are extended until the compliance date 
set forth in any final rules regarding recordkeeping and reporting 
requirements for security-based swap dealers and major security-based 
swap participants:
    (1) Section 17(a);
    (2) Section 17(b);
    (3) Rule 17a-3;
    (4) Rule 17a-4;
    (5) Rule 17a-5;
    (6) Rule 17a-11; and
    (7) Rule 17a-13.
    (c) The exemption pertaining to Rule 10b-10 is extended until the 
compliance date set forth in any final rules regarding trade 
acknowledgement and verification of security-based swap transactions.
    (d) The exemption pertaining to Regulation ATS, 17 CFR 242.300 et 
seq., is extended until the compliance date set forth in any final 
rules regarding the registration of security-based swap execution 
facilities.
    (e) The following exemptions are extended until the later of the 
compliance dates set forth in (i) any final rules regarding capital, 
margin and segregation requirements for security-based swap dealers and 
major security-based swap participants and (ii) any final rules 
regarding recordkeeping and reporting requirements for security-based 
swap dealers and major security-based swap participants:
    (1) Exemptions pertaining to the ``broker'' registration 
requirements of section 15(a)(1) of the Exchange Act, and the other 
requirements of the Exchange Act and the rules and regulations 
thereunder that apply to a broker that is not registered with the 
Commission, solely in connection with broker activities involving 
security-based swaps, and
    (2) Exemptions pertaining to the ``dealer'' registration 
requirements of section 15(a)(1) of the Exchange Act, and the other 
requirements of the

[[Page 7735]]

Exchange Act and the rules and regulations thereunder that apply to a 
dealer that is not registered with the Commission, solely in connection 
with dealing activities involving security-based swaps with 
counterparties that meet the definition of eligible contract 
participant as set forth in section 1a(12) of the Commodity Exchange 
Act.

    By the Commission.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2014-02834 Filed 2-7-14; 8:45 am]
BILLING CODE 8011-01-P