The SEC adopted a final rule conditionally exempting certain security-based swap execution facilities ("SBSEF") and security-based swap dealers ("SBSD") from the requirement to also register as clearing agencies. The rule, which the SEC said was intended to "limit the potential for overlapping or duplicative regulation," was originally proposed in 2011.

Under new Exchange Act Rule 17Ad-24 ("Exemption from Clearing Agency Definition for Certain Registered Securities-Based Swap Dealers and Registered Security-Based Swap Execution Facilities"), a registered SBSD (or a person engaging in de minimis SBS dealing) or a registered SBSEF will not be deemed to be a "clearing agency" for purposes of the Exchange Act if the relevant entity would only be deemed a clearing agency as a result of:

  • operations performed for the purposes of (i) customer dealing activities or (ii) "providing facilities for comparison of data respecting the terms of settlement of securities transactions effected on such registered security-based swap execution facility, respectively"; or
  • its operations on behalf of a clearing agency in relation to (i) the clearing agency's provision of its services to participants or (ii) the use of the clearing agency's services by participants.

The final rule will go into effect 60 days after its publication in the Federal Register.

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