Document ID: SEC-2013-0973-0001
Agency: sec
Document Type: Proposed Rule
Title: Security-Based Swaps: Rulemaking Releases and Statement of General Policy; Reopening Comment Periods
Posted Date: 2013-05-23T00:00Z

[Federal Register Volume 78, Number 100 (Thursday, May 23, 2013)]
[Proposed Rules]
[Pages 30800-30803]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-10836]

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SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 240, 242, and 249

[Release No. 34-69491; File Nos. S7-27-10, S7-32-10, S7-34-10, S7-35-
10, S7-43-10, S7-03-11, S7-06-11, S7-08-11, S7-25-11, S7-40-11, S7-05-
12, S7-08-12]
RIN 3235-AK74, 3235-AK77, 3235-AK80, 3235-AK79, 3235-AK88, 3235-AK91, 
3235-AK93, 3235-AL13, 3235-AL10, 3235-AL05, 3235-AL12

Reopening of Comment Periods for Certain Proposed Rulemaking 
Releases and Policy Statements Applicable to Security-Based Swaps

AGENCY: Securities and Exchange Commission.

ACTION: Reopening of comment periods.

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SUMMARY: The Securities and Exchange Commission (``Commission'') is 
reopening the comment periods for its outstanding rulemaking releases, 
published in the Federal Register and listed herein, that concern 
security-based swaps (``SB swaps'') and SB swap market participants and 
were proposed pursuant to certain provisions of Title VII of the Dodd-
Frank Wall Street Reform and Consumer Protection Act (the ``Dodd-Frank 
Act'') and the Securities Exchange Act of 1934 (the ``Exchange Act''), 
among other provisions (together, the ``Proposed Rules''). The 
Commission is also reopening the comment period for its Statement of 
General Policy on the Sequencing of the Compliance Dates for Final 
Rules Applicable to Security-Based Swaps adopted pursuant to the 
Exchange Act and the Dodd-Frank Act,

[[Page 30801]]

published in the Federal Register on June 14, 2012 (the ``Policy 
Statement''). The reopening of these comment periods is intended to 
allow interested persons additional time to analyze and comment upon 
the Proposed Rules and the Policy Statement in light of the 
Commission's proposal of substantially all of the rules required to be 
adopted by Title VII of the Dodd-Frank Act, its proposal of rules and 
interpretations addressing the application of the SB swap provisions of 
Title VII of the Dodd-Frank Act to cross-border SB swap transactions 
and non-U.S. persons that act in capacities regulated under the Dodd-
Frank Act (the ``Cross-Border Proposed Rules''), and the Commodity 
Futures Trading Commission's (the ``CFTC'') adoption of substantially 
all of the rulemakings establishing the new regulatory framework for 
swaps. All comments received to date on the Proposed Rules and the 
Policy Statement will be considered and need not be resubmitted.

DATES: For the Proposed Rules and the Policy Statement, the comment 
periods are reopened until July 22, 2013.

ADDRESSES: Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/proposed.shtml);

     Send an email to rule-comments@sec.gov. Please include the 
file number for the specific action being commented upon on the subject 
line; or
     Use the Federal Rulemaking 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 Street NE., 
Washington, DC 20549-1090.

All submissions should refer to the file number for the specific action 
being commented upon. 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. We will post all 
comments on the Commission's Internet Web site (http://www.sec.gov). 
Comments also are available for Web site viewing and printing at the 
Commission's Public Reference Room, 100 F Street NE., Washington, DC 
20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. All comments received will be posted without change; we do 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly.

FOR FURTHER INFORMATION CONTACT: With respect to this release, Ann 
Parker McKeehan, Special Counsel, at (202) 551-5797, or Jason Williams, 
Attorney-Adviser, at (202) 551-5763, Office of Derivatives Policy, 
Division of Trading and Markets, Securities and Exchange Commission, 
100 F Street NE., Washington, DC 20549. With respect to a particular 
action discussed herein, the Commission staff member listed in the 
action.

SUPPLEMENTARY INFORMATION: 

I. Background

    Subtitle B of Title VII of the Dodd-Frank Act \1\ (``Title VII'') 
amends the Securities Act of 1933 (``Securities Act'') \2\ and the 
Exchange Act \3\ to substantially expand the regulation of the SB swap 
market with a goal of establishing a new regulatory framework within 
which this market can evolve in a more transparent, efficient, fair, 
accessible, and competitive manner.\4\ Under the Dodd-Frank Act, 
regulatory authority over derivatives is divided between the Commission 
and the CFTC, with the Commission having authority over SB swaps, the 
CFTC having authority over swaps, which represent the overwhelming 
majority of the overall market for derivatives subject to the Dodd-
Frank Act, and the Commission and the CFTC jointly regulating mixed 
swaps.\5\
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    \1\ Dodd-Frank Wall Street Reform and Consumer Protection Act, 
Public Law 111-203, 124 Stat. 1376 (2010).
    \2\ 15 U.S.C. 77a et seq.
    \3\ 15 U.S.C. 78a et seq.
    \4\ See generally Subtitle B of Title VII.
    \5\ Section 712(d) of the Dodd-Frank Act provides that the 
Commission and the CFTC, in consultation with the Board of Governors 
of the Federal Reserve System, shall further define the terms 
``swap'' and ``security-based swap,'' among others. These terms are 
defined in sections 721 and 761 of the Dodd-Frank Act and the 
Commission and the CFTC have adopted further definitions of these 
terms in a joint rulemaking. See Further Definition of ``Swap,'' 
``Security-Based Swap,'' and ``Security-Based Swap Agreement''; 
Security-Based Swap Agreement Recordkeeping, Release No. 33-9338 
(July 18, 2012); 77 FR 48208 (Aug. 13, 2012) (``Product Definitions 
Rules'').
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    The Title VII amendments to the Exchange Act generally require, 
among other things: (1) The registration and comprehensive oversight of 
security-based swap dealers and major security-based swap participants; 
\6\ (2) the reporting of SB swaps to a registered security-based swap 
data repository (``SDR''), or to the Commission (if the SB swap is 
uncleared and no SDR will accept the SB swap), and dissemination of SB 
swap information to the public; \7\ (3) the clearing of SB swaps at a 
registered clearing agency (or a clearing agency that is exempt from 
registration) if the Commission makes a determination that such SB 
swaps are required to be cleared, unless an exception from the 
mandatory clearing requirement applies; \8\ and (4) if an SB swap is 
subject to the clearing requirement, the execution of the SB swap 
transaction on an exchange, on a security-based swap execution facility 
(``SB SEF'') registered under the Exchange Act,\9\ or on an SB SEF that 
has been exempted from registration by the Commission under the 
Exchange Act,\10\ unless no SB SEF or exchange makes such SB swap 
available for trading.\11\
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    \6\ See section 15F of the Exchange Act, 15 U.S.C. 78o-10.
    \7\ See section 3(a)(75) of the Exchange Act, 15 U.S.C. 
78c(a)(75) (defining the term ``security-based swap data 
repository''); section 13(m) of the Exchange Act (regarding public 
availability of SB swap data); section 13(n) of the Exchange Act 
(regarding requirements related to SDRs); and section 13A of the 
Exchange Act (regarding reporting and recordkeeping requirements for 
certain SB swaps). See also Security-Based Swap Data Repository 
Registration, Duties, and Core Principles, Release No. 34-63347 
(Nov. 19, 2010), 75 FR 77306 (Dec. 10, 2010); corrected at 75 FR 
79320 (Dec. 20, 2010) and 76 FR 2287 (Jan. 13, 2011); and Regulation 
SBSR--Reporting and Dissemination of Security-Based Swap 
Information, Release No. 34-63346 (Nov. 19, 2010), 75 FR 75208 (Dec. 
2, 2010).
    \8\ See section 3C(a)(1) of the Exchange Act, 15 U.S.C. 78c-
3(a)(1). See also 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, Release No. 
34-63557 (Dec. 15, 2010), 75 FR 82490 (Dec. 30, 2010).
    \9\ 15 U.S.C. 78c-4.
    \10\ Id. at 78c-4(e).
    \11\ See section 3C(g) of the Exchange Act, 15 U.S.C. 78c-3(g) 
and section 3C(h) of the Exchange Act, 15 U.S.C. 78c-3(h). See also 
section 3(a)(77) of the Exchange Act, 15 U.S.C. 78c(77) (defining 
the term ``security-based swap execution facility''). See also 
Registration and Regulation of Security-Based Swap Execution 
Facilities, Release No. 34-63825 (Feb. 2, 2011), 76 FR 10948 (Feb. 
28, 2011).
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    The Commission has proposed substantially all of the rules required 
to be adopted by Title VII.\12\ The Commission also has adopted the 
following rules:
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    \12\ The Commission has not yet proposed rules regarding the 
reporting and recordkeeping requirements to which security-based 
swap dealers and major security-based swap participants will be 
subject pursuant to Exchange Act section 15F(f). 15 U.S.C. 78o-
10(f).
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     Joint rules with the CFTC that further define the terms 
``swap dealer,'' ``security-based swap dealer,'' ``major swap 
participant,'' ``major security-based swap participant,'' and 
``eligible contract participant;'' \13\
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    \13\ See Further Definition of ``Swap Dealer,'' ``Security-Based 
Swap Dealer,'' ``Major Swap Participant,'' ``Major Security-Based 
Swap Participant'' and ``Eligible Contract Participant'', Release 
No. 34-66868 (Apr. 27, 2012), 77 FR 30596 (May 23, 2012) (``Entity 
Definitions Rules'').

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[[Page 30802]]

     Rules that establish the procedure by which clearing 
agencies submit SB swaps for a determination as to whether those 
instruments should be subject to mandatory clearing; \14\
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    \14\ See 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, Release No. 34-
67286 (June 28, 2012), 77 FR 41602 (July 13, 2012) (``Clearing 
Procedures Rules'').
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     Joint rules with the CFTC that further define the terms 
``swap,'' ``security-based swap,'' and ``security-based swap 
agreement'' and regarding the regulation of mixed swaps and SB swap 
agreement recordkeeping; \15\ and
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    \15\ See Product Definitions Rules, supra note 5.
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     Rules that establish standards for how registered clearing 
agencies should manage their risks and run their operations.\16\
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    \16\ See Clearing Agency Standards, Release No. 34-68080 (Oct. 
22, 2012), 77 FR 66219 (Nov. 2, 2012) (``Clearing Agency 
Standards'').
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    Most recently, the Commission has proposed the Cross-Border 
Proposed Rules, which address the treatment of cross-border SB swap 
transactions and non-U.S. persons acting in capacities regulated under 
Title VII.\17\ While the Commission may propose additional rules 
pertaining to SB swaps that are not mandated by Title VII, SB swap 
market participants and other members of the public now have a 
substantially complete picture of the Commission's proposed regulatory 
framework for SB swaps. Additionally, the CFTC has adopted nearly all 
of the rules establishing the swaps regulatory regime.\18\
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    \17\ See Cross-Border Application of Title VII of the Dodd-Frank 
Wall Street Reform and Consumer Protection Act; Re-Proposal of 
Regulation SBSR and Certain Rules and Forms Relating to the 
Registration of Security-Based Swap Dealers and Major Security-Based 
Swap Participants, Release No. 34--------------- (--------, 2013).
    \18\ CFTC Chairman Gary Gensler has noted that the CFTC has 
``largely completed the swaps market rulemaking, with 80 percent 
behind us. . . .'' Gary Gensler, Chairman, Commodity Futures Trading 
Comm'n, Opening Remarks at CFTC Public Roundtable on ``Futurization 
of Swaps'' (Jan. 31, 2013) (transcript available at http://www.cftc.gov/PressRoom/SpeechesTestimony/opagensler-130).
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II. Reopening of Comment Periods

    In light of the substantially complete picture of the proposed SB 
swap regulatory regime and the CFTC's adoption of many of the 
rulemakings creating the swaps regulatory regime, the Commission is 
reopening the comment period of the Proposed Rules and the Policy 
Statement until July 22, 2013 to provide the public with an additional 
opportunity to analyze and comment upon the proposed SB swap regulatory 
framework, either in part or as a whole. Commenters may submit, and the 
Commission will consider, comments on any aspect of the Proposed Rules 
and the Policy Statement. In addition to the questions raised in the 
Proposed Rules and the Policy Statement, the Commission specifically 
seeks comments on the following:
     The economic consequences and effects, including costs and 
benefits, of the Proposed Rules, either individually or as a whole, 
including any related quantitative or qualitative information. Please 
specify whether such information includes the costs and benefits of 
systems, policies, or procedures already implemented to comply with the 
CFTC's adoption of final rules and interpretive orders pertaining to 
Title VII (together, the ``CFTC Rules'');
     The overall framework and approach to implementation 
detailed in the Proposed Rules and the Policy Statement;
     The relationship of the Proposed Rules to any parallel 
requirements of other authorities, including the CFTC and relevant 
foreign regulatory authorities;
     With respect to the CFTC Rules, whether and to what extent 
the Commission in adopting its own rules should emphasize consistency 
with the CFTC Rules versus adopting rules that are more tailored to the 
SB swap market, with inclusion of any specific examples where 
consistency or tailoring of a particular rule or rule set is more 
critically important; and
     Whether there are any areas where additional rules or 
interpretations should be proposed or formal guidance provided and if 
so, why.
    The comment periods for the following actions are being reopened 
until July 22, 2013: \19\
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    \19\ The comment periods for the Entity Definitions Rules, the 
Clearing Procedures Rules, the Product Definitions Rules, and the 
Clearing Agency Standards are not being reopened given that, as 
noted in Section I above, these rules have been adopted by the 
Commission.

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 Date published in the Federal      Title and release
            Register               number of rulemaking     Date closed
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10/26/2010.....................  Ownership Limitations         4/29/2011
                                  and Governance
                                  Requirements for
                                  Security-Based Swap
                                  Clearing Agencies,
                                  Security-Based Swap
                                  Execution Facilities,
                                  and National
                                  Securities Exchanges
                                  with Respect to
                                  Security-Based Swaps
                                  under Regulation MC
                                  (Release No. 34-63107,
                                  File No. S7-27-10) and
                                  Reopening of Comment
                                  Period (Release No. 34-
                                  64018).
11/8/2010......................  Prohibition Against          12/23/2010
                                  Fraud, Manipulation,
                                  and Deception in
                                  Connection with
                                  Security-Based Swaps
                                  (Release No. 34-63236,
                                  File No. S7-32-10).
12/2/2010......................  Regulation SBSR--             1/18/2011
                                  Reporting and
                                  Dissemination of
                                  Security-Based Swap
                                  Information (Release
                                  No. 34-63346, File No.
                                  S7-34-10).
12/10/2010.....................  Security-Based Swap           1/24/2011
                                  Data Repository
                                  Registration, Duties,
                                  and Core Principles
                                  (Release No. 34-63347,
                                  File No. S7-35-10).
12/21/2010.....................  End-User Exception to          2/4/2011
                                  Mandatory Clearing of
                                  Security-Based Swaps
                                  (Release No. 34-63556,
                                  File No. S7-43-10).
1/21/2011......................  Trade Acknowledgement         2/22/2011
                                  and Verification of
                                  Security-Based Swap
                                  Transactions (Release
                                  No. 34-63727, File No.
                                  S7-03-11).
2/28/2011......................  Registration and               4/4/2011
                                  Regulation of Security-
                                  Based Swap Execution
                                  Facilities (Release
                                  No. 34-63825, File No.
                                  S7-06-11).
3/16/2011......................  Clearing Agency               4/29/2011
                                  Standards for
                                  Operation and
                                  Governance (Release
                                  No. 34-64017, File No.
                                  S7-08-11), other than
                                  those portions adopted
                                  by the Clearing Agency
                                  Standards (Release No.
                                  34-68080).
7/18/2011......................  Business Conduct              8/29/2011
                                  Standards for Security-
                                  Based Swap Dealers and
                                  Major Security-Based
                                  Swap Participants
                                  (Release No. 34-64766,
                                  File No. S7-25-11).
10/24/2011.....................  Registration of              12/19/2011
                                  Security-Based Swap
                                  Dealers and Major
                                  Security-Based Swap
                                  Participants (Release
                                  No. 34-65543, File No.
                                  S7-40-11).

[[Page 30803]]

 
6/14/2012......................  Statement of General          8/13/2012
                                  Policy on the
                                  Sequencing of the
                                  Compliance Rules
                                  Applicable to the
                                  Security-Based Swaps
                                  Adopted Pursuant to
                                  the Securities
                                  Exchange Act of 1934
                                  and the Dodd-Frank
                                  Wall Street Reform and
                                  Consumer Protection
                                  Act (Release No. 34-
                                  67177, File No. S7-05-
                                  12).
11/23/2012.....................  Capital, Margin, and          2/22/2013
                                  Segregation
                                  Requirements for
                                  Security-Based Swap
                                  Dealers and Major
                                  Security-Based Swap
                                  Participants and
                                  Capital Requirements
                                  for Broker-Dealers
                                  (Release No. 34-68071,
                                  File No. S7-08-12) and
                                  Extension of Comment
                                  Period (Release No. 34-
                                  68660).
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    All comments received to date on the Proposed Rules and the Policy 
Statement will be considered and need not be resubmitted.

    Dated: May 1, 2013.

    By the Commission.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013-10836 Filed 5-7-13; 8:45 am]
BILLING CODE 8011-01-P