The SEC adopted Securities Exchange Act Rules 15Fi-1 and 15Fi-2, which require that security-based swap dealers ("SBSDs") and major SBS participants ("MSBPs" and, collectively, "SBS Entities") provide and verify trade acknowledgments in security-based swap transactions. The SEC also amended Securities Exchange Act Rule 3a71-6 to address the potential availability of substituted compliance in connection with the trade acknowledgment and verification requirements.
The final rules require an SBS Entity to, among other things:
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promptly and electronically submit a trade acknowledgment to its counterparty no later than by the end of the first business day following the day of execution;
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promptly verify or dispute the terms of trade acknowledgment received with its counterparty; and
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maintain written policies and procedures reasonably designed to obtain verification of terms outlined in any trade acknowledgment that it provides.
The final rules also exempt broker-dealers who are SBS Entities and satisfy the final rules' trade acknowledgment and verification requirements from the confirmation requirements under Exchange Act Rule 10b-10 requirements.
The final rules will become effective after 60 days following their publication in the Federal Register.
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