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SEC Publishes SBS Reporting Rules

On February 11, 2015, the SEC published final rules regarding (i) the registration of security-based swap data repositories ("SBSDRs") (the "SBSDR Rules") and (ii) requirements for reporting and the public dissemination of security-based swap ("SBS") data ("Reg. SBSR"). The SEC also proposed additional rules for implementing Reg. SBSR that primarily focus on cleared SBS but also include a proposed compliance timeline for Reg. SBSR generally (the "Reg. SBSR Proposal").

General Overview

The rules generally require market participants to report creation and life-cycle data regarding SBS transactions. As with the CFTC reporting requirements for swaps, the rules provide a "waterfall" approach for determining who is required to report. Generally, security-based swap dealers ("SBSDs") would be responsible for reporting SBS in which they are a counterparty, followed by major security-based swap participants ("MSBSPs"). For transactions between two end-users, where only one is a U.S. person, that person is responsible for reporting. Unlike the CFTC rules, the SEC rules do not look to whether an entity is a "financial entity."

The party responsible for reporting would be required to report the data specified in Rule 901(c)-(d) as "primary trade information" and "secondary trade information." With some distinctions, the set of data is similar to required data under the CFTC rules.

Following reporting, SBSDRs would be required to publicly disseminate SBS trade information, with carve-outs for, inter alia, (i) party identifying information, (ii) pre-enactment and transition swaps, (iii) non-mandatory reports, and (iv) allocation information.

As adopted, Reg. SBSR largely does not address the reporting of cleared and on-platform SBS. Such transactions are primarily addressed in the Reg. SBSR Proposal.

Pre-Enactment and Transition Swaps

As required by Title VII, Reg. SBSR requires market participants to report so-called "pre-enactment" SBS (transactions entered into before July 21, 2010 but not expired by that date) and "transition" SBS (transactions entered into after July 21, 2010 but before the date on which compliance with Reg. SBSR is required for that transaction). Such transactions would be required to be reported by the compliance date for SBS generally.

Additional Distinctions from CFTC Requirements

While generally similar to the CFTC approach to swap data reporting, Reg. SBSR differs from the CFTC requirements in a number of ways:

  • Timing. The SEC Rules generally require market participants to report SBS within 24 hours after execution (including block trades). This period is significantly longer than the 30 minutes allowed under CFTC requirements for transactions involving registrants.
  • Entity Data in Reporting. The SEC rules generally require information on a number of additional types of entities involved in SBS transactions. The rules would require reporting the legal identifier for (i) guarantors; (ii) execution agents (if any); and (iii) the following information as to the reporting party: (a) the branch or unincorporated office (if any) involved in the transaction; (b) the person acting as broker (if any) for a participant; (c) the trader who executes the SBS; and (d) the trading desk that purchases or sells the SBS for the participant.
  • Cross-Border Application. The SEC rules make clear that SBS will only need to be reported where at least one (direct or indirect) counterparty is a U.S. person, an SBSD or an MSBSP (See 79 FR 47278). Substituted compliance will be available - pending relevant substituted compliance determinations by the SEC - for non-U.S. persons and foreign branches of U.S. persons.

Effective Dates, Compliance Dates, Comment Periods

The SBSDR Rules will become effective 60 days from publication of the final rules in the Federal Register. The compliance date for the rules will be 365 days from publication of the final rules in the Federal Register.

Reg. SBSR will become effective 60 days from publication of the final rules in the Federal Register. Several rules (Rules 900, 907, and 909 - definitions, policies and procedures for registered entities, and securities information processor registration) will require compliance on the effective date. For the remainder of the rules - i.e., the bulk of the substantive requirements - the compliance dates are proposed in the Reg. SBSR Proposal. Under the proposal, compliance would be required for an asset class by six months following the date on which a registered SBSDR accepts reports for that asset class. The public dissemination requirements of the rules go into effect nine months following that date.

Comments on the Reg. SBSR Proposal are due to the SEC within 45 days following publication of the proposal in the Federal Register.


The SBS reporting rules were adopted over the dissents of SEC commissioners Daniel Gallagher and Michael Piwowar at the open meeting, as well as a further dissent from those commissioners on procedural grounds. Specifically, the dissenters noted that the SEC staff had inadvertently failed to consider or publish the comment letter of an "organization whose membership will be responsible for reporting nearly all [SBS] subject to reporting under [Reg. SBSR]," and that, in light of that failure, the SEC should have re-opened the comment period.

For further questions on the new rules, please contact Jeffrey Robins, Steven Lofchie or Nihal Patel.

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