Proposed SEC Rule May Boost Swaps Collateral Costs

SEC seeks public comment on collateral requirements for swaps not settled at clearinghouses.

Goldman Sachs Group Inc., Morgan Stanley and other trading firms would face higher collateral costs under swaps-market rules proposed by the U.S. Securities and Exchange Commission.

SEC commissioners voted 5-0 today to seek public comment on collateral requirements for swaps that remain in the over-the-counter market instead of being settled at third-party clearinghouses. The proposal, part of the agency’s rulemaking under the Dodd-Frank Act, would also increase capital requirements for dealers of swaps tied to single securities or loans or a narrow index of swaps.

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