SEC, CFTC Seek Comments on 'Mixed Swaps'

As required by Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) published Friday, August 13, a joint advance notice of proposed rulemaking requesting public comment to assist the agencies in further defining certain key terms and prescribing regulations regarding “mixed swaps.”

Title VII, the two agencies say, provides for the comprehensive regulation of swaps and security-based swaps and includes definitions of key terms relating to such regulation. The title of the Dodd-Frank Act “requires the CFTC and the SEC, in consultation with the Board of Governors of the Federal Reserve System, to jointly further define the terms ‘swap,’ ‘security-based swap,’ ‘swap dealer,’ ‘security-based swap dealer,’ ‘major swap participant,’ ‘major security-based swap participant,’ ‘eligible contract participant’ and ‘security-based swap agreement,’ ” the two agencies say in their release requesting public comments.

Title VII also requires the CFTC and SEC to jointly prescribe regulations regarding “mixed swaps” as necessary to carry out the purposes of Title VII.