The new rules attempt to unify an increasingly globalized set of rules and alert swap dealers, participants, clearing agencies and data repositories must register with the financial regulator.
Before the commission’s 5-0 vote on the proposal, White said the international nature of the swaps market requires uniform regulatory requirements.
“Market participants need to know which rules to follow, and I believe that this proposal will serve as the road map,” she said.
Other pending Dodd-Frank swaps rules include ones that define what transaction information needs to be included in the centralized “data repository” and what information those databases would have to make public.
“The proposal before us seeks to address these issues and better facilitate regulator access to data held in the data repositories we regulate in a manner consistent with the Dodd-Frank Act,” said SEC Chairwoman Mary Jo White during the agency’s meeting on Wednesday.
The Dodd-Frank sweeping financial reform law passed in 2010 gave the SEC authority of security-based swaps.
Swaps, a kind of derivative, are a type of contract where value is “derived” from underlying asset such as a commodity, bond or loan. A security-based swap is connected to an individual loan or a single financial product issuer.
“Derivatives provide a way to transfer risk related to the underlying assets between two counterparties. They are flexible products that can be designed to achieve almost any financial purpose,” the SEC says.
Many of the SEC’s Dodd-Frank-mandated swaps rules, which fall under Title VII of the law, have already been proposed, according to White.
Comments on the other swaps rules will be delayed for another 60 days. Comments on the new proposals will be due 90 days after being published in the Federal Register.