SEC Further Extends Securities Law Exemptions for Security-Based Swaps

The SEC adopted amendments to the expiration dates of certain interim final rules adopted in July 2011 (that were described in the July 5, 2011 Financial Services Alert).  The interim final rules provide exemptions under the Securities Act of 1933, the Securities Exchange Act of 1934, and the Trust Indenture Act of 1939 to security-based swaps that were security-based swap agreements prior to the effective date of Title VII of the Dodd-Frank Act.  Because the Dodd-Frank Act defines security-based swap agreements as “securities,” such instruments would have become subject to various requirements applicable to securities in the absence of the interim final rules.  The interim final rules, however, generally exempt such instruments from the requirements of the relevant statutes, other than certain anti-fraud provisions.  The interim final rules were originally scheduled to expire on February 11, 2013.  The expiration dates were previously extended to February 11, 2014 (as described in the February 12, 2013 Financial Services Alert).  The latest amendments further extend the expiration dates to February 11, 2017. 

IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this informational piece (including any attachments) is not intended or written to be used, and may not be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

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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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