SEC Proposes Changes to Derivatives Regulatory Framework

The Securities and Exchange Commission last week issued a proposal and interpretive guidance aimed at improving its framework for regulating cross-border security-based swaps transactions and market participants. Among other things, the proposal addresses the use of transactions that have been “arranged, negotiated, or executed” by personnel located in the U.S. as a trigger for regulating security-based swaps and market participants.
 
It also addresses the requirement that non-U.S. resident security-based swap dealers and major security-based swap participants certify and provide an opinion of counsel that the SEC can access their books and records and conduct onsite inspections and examinations. In addition, the proposal covers the cross-border application of statutory disqualification provisions and the questionnaires or employment applications that security-based swap dealers and major security-based swap participants must maintain with regard to their foreign associated persons.

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