SEC Weighs Cross-Border Swap Rules

Regulators face calls to limit the rules’ international reach.

The Securities and Exchange Commission plans to propose measures determining when U.S. rules apply to cross-border swap trades amid calls from foreign counterparts to limit the reach of Dodd-Frank Act oversight.

SEC commissioners meeting in Washington today probably will approve a 1,000-page proposal that could influence how global regulators address rule differences while working to reduce risk and increase transparency in the swaps market. The SEC is writing rules for equity and some credit-default swaps, while the Commodity Futures Trading Commission is the predominant U.S. regulator for the $639 trillion global market.

Substituted Compliance

The proposal being considered today would govern how other SEC swap rules, many of which haven’t been completed, apply in cross-border transactions. Commissioners also will vote on whether to redraft a rule, initially proposed in November 2010, that would require public reporting of swaps data to central record-keeping facilities. The SEC’s vote would be followed by a public-comment period to solicit views on its ideas.

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