On May 1, the U.S. Securities and Exchange Commission proposed new rules and interpretive guidance setting out how the comprehensive regime for regulating swaps introduced by Dodd-Frank would apply to cross-border activities involving securities based swaps regulated by the SEC.

Of interest to Canadian market participants is that the SEC's proposals adopt a substituted compliance approach and provide some detail around how that will work in cross-border transactions. It proposes a regime whereby there may be substituted compliance accepted for some purposes (e.g. registration) but not others (e.g. trade reporting) depending on the SEC’s position with respect to regulation of that area in the substituted jurisdiction.

The SEC is accepting public comments on the proposed rules, including potential alternatives, for 90 days after publication in the Federal Register. For more information, see SEC Release No. 34-69490.