SEC Proposes Recordkeeping and Reporting Rules for Security-based Swaps


On April 17, the Securities and Exchange Commission proposed several new rules relating to security-based swaps. The rules deal with “recordkeeping, reporting, and notification requirements applicable to security-based swap dealers (‘SBSDs’) and major security-based swap participants (‘MSBSPs’), securities count requirements applicable to certain SBSDs, and additional recordkeeping requirements applicable to broker-dealers to account for their security-based swap and swap activities.”

Specifically, the SEC is proposing to amend Rules 17a-3, 17a-4, 17a-5 and 17a-11 to establish a recordkeeping, reporting and notification program for broker-dealer SBSDs and broker-dealer MSBSPs. The proposed amendments to Rules 17a-3 and 17a-4 also establish additional recordkeeping requirements applicable to broker-dealers that are not dually registered as SBSDs or MSBSPs to the extent they engage in security-based swaps or swap activities. 

The SEC is also proposing new Rules 18a-5 through 18a-9. These new rules would establish a recordkeeping, reporting and notification program for stand-alone SBSDs, stand-alone MSBSPs, bank SBSDs and bank MSBSPs, and securities count requirements for stand-alone SBSDs. (Note: it will be impossible for a bank to be an SBSD once the swap push-out rule takes effect this summer.) In addition, pursuant to Sections 15F and 17(a) of the Exchange Act, the SEC is proposing a new FOCUS Report Form SBS (Form SBS) that is to be used by all types of SBSDs and MSBSPs to report financial and operational information and, in the case of broker-dealer SBSDs and broker-dealer MSBSPs, replace their use of Part II, Part IIA, Part IIB or Part II CSE of the Financial and Operational Combined Uniform Single Report (FOCUS Report). 

The new rules also include a proposed capital charge provision for stand-alone SBSDs that “was inadvertently omitted from the proposed Rule 18a-1” when it was originally proposed in 2012.   

This 510-page proposal contains numerous specific requests for comments and information. Comments are due 60 days after publication of the proposal in the Federal Register, which has not yet occurred. Over 130 pages of the proposal are dedicated to economic analysis of the costs and benefits of the proposed rules and another 60+ pages are used for a new Form SBS. Many of the new informational and recordkeeping requirements are summarized in chart form on pages 217–219 and 222–223.   

The SEC estimates that there will be a total of 50 SBSDs and five MSBSPs. 

The text of the rules can be found 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.

© Katten Muchin Rosenman LLP | Attorney Advertising

Written by:


Katten Muchin Rosenman LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.