As part of the Securities and Exchange Commission’s (SEC’s) ongoing mission to create more transparency in markets in the U.S., the SEC voted unanimously on Wednesday in favor of proposing rules on “security-based swap execution facilities (SEFs).”
The SEC will define, set requirements for registration and set forth “duties and core principles,” for the security-based SEFs, according to an announcement and fact sheet released Wednesday.
The Dodd-Frank Act tasked the SEC with implementing a “framework” for regulating security-based swaps, which the SEC says “currently trade exclusively in the over-the-counter markets with little transparency or oversight,” according to the release.
Part of the intent of the framework is to provide places for the swaps to trade and access for more entities to trade them, providing better pricing and liquidity, as well as oversight.
“Trading on registered security-based SEFs rather than in the over-the-counter markets should serve to enhance the transparency, efficiency, and competitiveness of the trading of security-based swaps,” said SEC Chairman Mary Schapiro (left), in remarks for an SEC Open Meeting on Wednesday.