SEC Amends Filing Requirements for Dually Registered Clearing Agencies

The Securities and Exchange Commission issued a final rule affecting clearing agencies registered with both the SEC and the Commodity Futures Trading Commission. The final rule allows certain rule changes by such dually registered clearing agencies to become effective upon filing with the SEC, which is an expansion of an interim rule adopted by the SEC on July 7, 2011.

To become effective upon filing with the SEC, the dually registered clearing agency’s rule change must primarily affect the clearing of non-securities products, such as futures, swaps and forwards that do not reference any securities. If a rule change applies generally to the operations of the entire clearing agency, such as a change to a general provision of the clearing agency’s bylaws, then the change would not be considered to primarily affect the clearing of non-securities products.

In addition to the “primarily affects” requirement, the rule change also must not significantly affect the clearing agency’s securities clearing operations, even if such effects are indirect. It is important to note that there is an exception to this restriction for rule changes that are necessary to maintain fair and orderly markets for non-securities products. However, the SEC would retain the power to summarily temporarily suspend such rule changes until the SEC is able to enter an order approving or disapproving such change.

The SEC also adopted corresponding amendments to the instructions to Form 19b-4.

The SEC’s final rule release is available here.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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