SEC Approves Rules and Interpretations on Key Terms for Regulating Derivatives (Press Release and Q&A)

The SEC took a step toward regulating the OTC derivatives market by unanimously approving rules and interpretations for key definitions of certain derivative products.

The SEC rules and interpretations further define the terms "swap" and "security-based swap" and whether a particular instrument is a "swap" regulated by the CFTC or a "security-based swap" regulated by the SEC. The SEC action also addresses "mixed swaps" and "security-based swap agreements," which are regulated by the CFTC but over which the SEC has antifraud and other authority.

View press release in full here (links externally to SEC website).