June 11, 2012 / 5:11 PM / 7 years ago

US SEC issues derivatives regulation roadmap

WASHINGTON (Reuters) - The U.S. Securities and Exchange Commission released a “roadmap” on Monday that shows the order in which it expects new rules for the over-the-counter derivatives market to take effect.

The rules, which are required by the 2010 Dodd-Frank Wall Street reform law, are aimed at bringing greater transparency to the $708 trillion over-the-counter market.

They will subject swap dealers and other large traders to capital and margin requirements, and also move a large amount of swaps onto trading platforms and into clearinghouses, which stand in between two parties to guarantee trades.

The SEC said the road map describes the sequence in which the various rules will take effect, but it does not estimate a timeline for when the agency will finalize the rules.

The roadmap can be found at: here

Large swap dealers such as Goldman Sachs and JPMorgan have been concerned about the uncertainty facing the derivatives market as the SEC and Commodity Futures Trading Commission finalize new rules but miss numerous deadlines.

The SEC and CFTC in April finally completed rules defining which kinds of companies will be regulated as swap dealers after disagreements between the two agencies led to multiple delays.

In its roadmap, the SEC said that rules finalizing other important definitions, such as the definition of a swap, and rules outlining the cross-border reach of Dodd-Frank must be completed first before compliance dates for other provisions can kick in.

After those two rules go into effect, the SEC expects that new rules requiring swap data warehouses to register with regulators will come next on the list.

The roadmap also lays out the sequencing for the mandatory clearing and trading requirements as well.

The SEC said that anyone who will be subject to the new rules “should be given adequate, but not excessive, time to come into compliance.”

The SEC is seeking public comment on its derivatives roadmap.

Reporting By Sarah N. Lynch; Editing by Tim Dobbyn

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