The SEC is moving toward new recordkeeping, reporting, and notification requirements for what the regulator defines as “security-based swap dealers” and “major security-based swap market participants,” officials say.
“The SEC’s proposed rules will require security-based swaps dealers to record and archive all communications related to swaps transactions including emails, instant messages and recordings of phone calls,” says Mark Whiteman, CEO of vendor Citicom Solutions in a statement.
The proposed rules stem from the rulemaking stipulations of the Dodd-Frank Act, which authorizes the SEC and other regulators to implement a comprehensive framework for over-the-counter (OTC) swaps and security-based swaps markets, officials say.
The SEC is also proposing an additional capital charge provision that would be added to the proposed capital rule for certain security-based swap dealers, officials say. In addition, the commission is proposing technical amendments to the broker-dealer recordkeeping, reporting, and notification requirements. Over the next two months, the SEC is seeking public comment on the proposed rules.
“Compliance with these regulations will require swaps dealers to institute data and voice capture procedures across their trading desks that can record and analyze all of the communications related to swaps transactions in real-time,” Whiteman adds. “Swaps dealers should take advantage of the time between the proposal of the new rules and eventual enforcement to ensure best practices and procedures are established when the requirements go into effect.”
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