On June 21, the Securities and Exchange Commission adopted a package of new rules and rule amendments to establish capital, margin and segregation requirements under Title VII of the Dodd-Frank Act.
The new rules address the following areas:
- Capital requirements for security-based swap dealers (SBSDs) and major security-based swap participants (MSBSP), for which there is not a prudential regulator (nonbank SBSDs and MSBSPs).
- Capital requirements for broker-dealers that trade security-based swaps or swaps and are not registered as an SBSD or MSBSP.
- Minimum net capital requirements for broker-dealers that use internal models to compute net capital.
- Margin requirements for nonbank SBSDs and MSBSPs with respect to non-cleared security-based swaps.
- Segregation requirements for SBSDs and stand-alone broker-dealers for cleared and non-cleared security-based swaps.
The new rules also amend the SEC’s existing cross-border rule to provide a mechanism for substituted compliance with respect to the capital and margin requirements for foreign SBSDs and MSBSPs.
The SEC’s press release is available here.