Comment Deadline Set for SEC-Proposed Regulatory Framework for SBS Execution Facilities

An SEC-proposed regulatory framework for the registration and regulation of security-based swap execution facilities ("SBSEFs") was published in the Federal Register. Comments on the proposal are due by June 10, 2022.

As previously covered, under the proposal the SEC would (i) establish a new scheme for the registration and regulation of SBSEFs, (ii) adopt exemptions from the definition of "exchange" under the Exchange Act for SBSEFs that provide execution only for SBS (not other securities), (iii) adopt exemptions from certain requirements applicable to "brokers" under the Exchange Act for registered SBSEFs, and (iv) adopt new rules of practice pursuant to which users can request SEC review of SBSEF actions.

Effective May 11, 2022, the SEC also withdrew previously issued related proposals. Those proposals include (i) Regulation MC (relating to conflicts between clearing agencies, SBSEFs and exchanges trading SBS), (ii) a 2011 proposal for SBSEF registration and regulation, and (iii) aspects of an SEC cross-border proposal relating to SBSEFs and trade execution.