SEC Proposes Recordkeeping and Reporting Requirements for Security-Based Swap Dealers, Major Security-Based Swap Participants and Broker-Dealers as well as an Addition to the Proposed Capital Rules for Certain Security-Based Swap Dealers

On April 17, 2014, the Securities and Exchange Commission (the “SEC”) proposed several new rules and amendments (the “Proposal”) to a number of its existing and proposed rules regarding recordkeeping, reporting and notification requirements applicable to security-based swap dealers (“SBSDs”) and major security-based swap participants (“MSBSPs”). The Proposal is part of the SEC’s wider effort to implement the recordkeeping, reporting and notification requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act. It remains unclear when the SEC will actually begin requiring SBSDs and MSBSPs to register as such. 

Key Takeaways

  • The proposed rules would amend existing broker-dealer recordkeeping, reporting, and notification requirements to account for the security-based swap activities of broker-dealers.
  • The proposed rules would establish a similar recordkeeping, reporting and notification regime for Stand-alone SBSDs, Stand-alone MSBSPs, Bank SBSDs and Bank MSBSPs.
  • The SEC has proposed a new FOCUS Report Form SBS to be used by all types of SBSDs and MSBSPs to report financial and operational information.
  • The proposed rules would add a capital charge provision to the proposed capital rules for certain Stand-alone SBSDs, whereby such SBSDs would take a capital charge for certain securities discrepancies that were not resolved within a prescribed time period. 

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For more information about anything covered in this memorandum, please contact Caird Forbes-Cockell or Jeffrey Cohen.