After all, SEC finalises derivatives definition rules

After all, SEC finalises derivatives definition rules

The Securities and Exchange Commission (SEC) define what type of derivatives products will be regulated under the new regime created by the 2010 Dodd-Frank Wall Street reform law.

The SEC took another step towards regulating the over-the-counter (OTC) derivatives market by approving rules and interpretations for key definitions of certain derivative products. The SEC rules and interpretations define the terms "swaps" and "security-based swaps" (SBWs) and whether a particular instrument is a "swap" regulated by the Commodity Futures Trading Commission (CFTC) or a "security-based swap" regulated by the SEC. In addition, the SEC has addressed "mixed swaps", which are regulated by both agencies, and "security-based swap agreements", which are regulated by the CFTC but over which the SEC has anti-fraud and other authority. The CFTC will also propose a rule related to Clearing Exemption for Certain Swaps entered into by Cooperatives.


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