The Dodd-Frank Act required that security based swap dealers or major security based swap participants to register with the SEC. These swap based entities are required to register with the SEC while all others are under the jurisdiction of the CFTC.
The SEC proposed rules requiring these entities to register electronically with the SEC on a Form SBSE, similar to the Form BD for broker-dealer registration. CFTC swap entities register using the shorter Form SBSE-A. Additionally, the SEC will require that these forms be updated promptly if there are any inaccuracies. There will also be something new according to one SEC Commissioner. The rules may require a knowledgeable senior officer to provide a certification as to the firm’s financial, operational and compliance capabilities. This person will also have to disclose how the firm arrived at those conclusions. Further, non-U.S. swap entities will have to identify a U.S. Agent, and submit an opinion of counsel that the SEC will be able to access its books and records, as well as a requirement to submit to an on-site inspection.
The swap dealer registration proposal will be open for a 60 day comment period, and all are encouraged to consider commenting.