On August 29, the Securities and Exchange Commission announced the adoption of amendments to the Securities Exchange Act of 1934 (Exchange Act) Rule 13n-4 (Amended Rule) that implement the statutory requirement that security-based swap data repositories (SBSDR) provide certain data involving security-based swaps, including individual counterparty trade and position data (Data), to certain regulators and other entities provided that certain conditions are met.
Pursuant to the Amended Rule, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Farm Credit Administration, the Federal Housing Finance Agency and Federal Reserve Banks are eligible to access Data. The Amended Rule also identifies other entities, including the Commodity Futures Trading Commission and the Department of Justice, that may access Data under certain conditions and provides broad language that gives the SEC authority to determine when it would be appropriate for Data to be available to any other person, including foreign authorities (Determination). In making a Determination, the SEC expects to consider, among other things, (1) whether Data would be subject to robust confidentiality safeguards, such as safeguards set forth in the relevant jurisdiction’s statutes, rules or regulations; (2) the relevant entity’s interest in access to Data based on its regulatory mandate or legal responsibility or authority; and (3) how the entity would be expected to use the information. Additionally, the SEC may issue a Determination that is of a limited duration and may revoke a Determination at any time, if for example, a relevant authority fails to keep Data confidential.
The Amended Rule provides that an SBSDR is required to inform the SEC of its receipt of a request for Data from a particular entity (which may include any request that the entity be provided ongoing online or electronic access to Data) and must maintain records of all information provided in connection with the request or access related to the initial and all subsequent requests for Data from that entity. Such records should include the identity of the requestor or person accessing Data; the date, time and substance of the request or access; the date and time access is provided; and copies of all data reports or other aggregations of Data. Before any Data is provided to an entity, such entity needs to have entered into an agreement with the SEC (in the form of a memorandum of understanding or otherwise) to address the confidentiality of Data made available to the regulator.
To see the Amended Rule, click here.