Alert February 15, 2011

SEC Proposes Registration of Security-Based Swap Execution Facilities

The SEC issued a release proposing Regulation SB SEF under the Securities Exchange Act of 1934 (the “1934 Act”) that will create a registration framework for security-based swap execution facilities (“SB SEFs”); establish rules consistent with the Dodd-Frank Act’s fourteen enumerated core principles for SB SEFs; and implement a process for an SB SEF to submit proposed changes to its rules. The proposal provides interpretive guidance on the definition of “security-based swap execution facility” in Section 3(a)(77) of the 1934 and establishes exemptions for a registered SB SEF from  the 1934 Act’s definition of “exchange” and from regulation as a broker pursuant to Section 15(b) of the 1934 Act.  Comments must be received by April 4, 2011.