On April 15, 2016, the US Securities and Exchange Commission, in its ongoing effort to regulate the over-the-counter security-based swap markets, adopted final rules under Title VII of the Dodd-Frank Act implementing comprehensive business conduct standards and chief compliance officer requirements for security-based swap dealers and major security-based swap participants (collectively, security-based swap entities). As a general matter, the SEC’s final rules impose upon security-based swap entities (i) an obligation to facilitate informed customer decision-making, (ii) requirements to enhance transparency with customers and (iii) supervision and chief compliance officer requirements, among other enhanced professional standards of conduct. The rules also address their cross-border application and the availability of substituted compliance.
The final rules become effective 60 days after publication in the Federal Register. The compliance date for the customer protection rules will be based on the compliance date of the registration rules for security-based swap dealers and major security-based swap participants.
The full text of the SEC final rules is available at: https://www.sec.gov/rules/final/2016/34-77617.pdf.