SEC Extends Period for a Decision on Proposal Enhancing Capital Requirements for Clearing Organizations
Commentary by Steven Lofchie
The SEC extended the period for action on a proposed rule change enhancing capital requirements for clearing organizations. The SEC designated March 29, 2022 as the new date by which it will "either approve, disapprove, or institute proceedings to determine whether to disapprove" the proposed rule change.
As previously covered, in separate filings, the Fixed Income Clearing Corporation, the Depository Trust Company and the National Securities Clearing Corporation proposed changes to their respective rules, bylaws and procedures to raise the capital requirements of their members. Clearing organizations are permitted to condition member participation on meeting the net capital requirements under Exchange Act Section 17A(b)(4)(B).
The SEC said that extending the 45-day period for action was appropriate, since that would give the SEC "sufficient time to consider and take action on the Proposed Rule Change."
Commentary
Just as the SEC allows itself more time to consider difficult issues, the SEC ought to be allowing market participants much more time to consider and respond to the rule proposals. This is complicated stuff, both for the regulator and the regulated.