From the Regulators

Two new rules aim to enhance transparency in the swaps market

By James Langton |

U.S. securities regulators have taken additional steps towards improved transparency in the derivatives markets with new rules on the reporting and disclosure of swaps data.

The U.S. Securities and Exchange Commission (SEC) adopted two new sets of rules Wednesday that aim to enhance transparency in the swaps market. The rules will require security-based swap data repositories (SDRs) to register with the commission; and, they set requirements for the reporting, and public disclosure of, transaction data. The new rules are designed to increase transparency in the security-based swap market, and to ensure that data repositories maintain complete transaction records that can be accessed by regulators.

"These rules go to the core of derivatives reform by establishing a strong foundation for transparency and efficiency in the market," said Mary Jo White, SEC chairwoman. "They provide a powerful framework for trade reporting and the public dissemination of information that addresses blind spots exposed by the financial crisis."

The rules also provide an exemption from registration for foreign data repositories that meet certain conditions. Additionally, they deal with cross-border activity, and allow market participants to comply with the SEC's requirements through compliance with comparable regulations in a foreign jurisdiction.

"We carefully considered comments received and the workability of the rules and rule proposal in the context of the existing CFTC regimes for swap data repositories, swap data reporting and public dissemination," said Steve Luparello, director of the SEC's division of trading and markets.  "Today's measures are robust and appropriately tailored to the security-based swap market."

The new rules will become effective in 60 days. Data repositories will then have a year to comply with the registration rules.