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28 September 2016

SEC adopts rules for enhanced regulatory framework for securities clearing agencies

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SEC voted to adopt new rules to establish enhanced standards for the operation and governance of securities clearing agencies that are deemed systemically important or that are involved in complex transactions, such as security-based swaps.

The Commission also voted to propose to apply the enhanced standards established by the new rules to other categories of securities clearing agencies, including all SEC-registered central counterparties.

“Securities clearing agencies are a vital part of the infrastructure underpinning the U.S. financial system,” said SEC Chair Mary Jo White.  “The Commission has taken an important step today toward enhancing investor protection and ensuring that clearing agencies continue to be subject to effective regulations that appropriately address the risks they pose to the financial system.”  

The Dodd-Frank Wall Street Reform and Consumer Protection Act called for an enhanced regulatory framework for certain securities clearing agencies, which perform a range of services critical to the effective operation of the securities markets, including acting as intermediaries between the parties to a securities transaction, ensuring that funds and securities are correctly transferred between parties and, in some cases, assuming the risks of a party defaulting on a transaction by acting as a central counterparty. 

The rules apply to SEC-registered securities clearing agencies that have been designated as systemically important by the Financial Stability Oversight Council (FSOC) or that are involved in more complex transactions.  Securities clearing agencies covered by the new rules will be subject to new requirements regarding, among other things, their financial risk management, governance, recovery planning, operations, and disclosures to market participants and the public. 

The Commission’s proposal would apply the newly-adopted rules to other categories of securities clearing agencies, including all SEC-registered securities clearing agencies that are central counterparties, central securities depositories, or securities settlement systems.  

Full press release


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