SEC Extends Swap Dealer Fair Play Rules for Comments
Published Date: 5/28/2025
Notice
Summary
The SEC is asking for comments to keep the rules that guide how security-based swap dealers and big players treat their clients, especially special government and retirement groups. These rules help make sure everyone plays fair in complex financial deals. No big changes or costs are planned, but your feedback helps keep things clear and safe!
Analyzed Economic Effects
3 provisions identified: 1 benefits, 1 costs, 1 mixed.
Large Compliance Burden on SBS Entities
The Business Conduct Standards require security-based swap dealers and major participants to carry out ongoing reporting, disclosures, supervision, and compliance tasks. Commission staff estimate the industry-wide annual burden at approximately 535,595 hours and $2,522,058, based on 53 registered SBS Dealers (0 Major SBS Participants) as of December 31, 2024.
Protections for Special Entities (Retirement & Government)
If you are a 'special entity' (for example, a federal or state agency, municipality, employee benefit plan subject to ERISA, governmental plan, or an endowment), SBS Dealers acting as advisors must reasonably determine that any recommended security-based swap or trading strategy is in the special entity's best interests and must make reasonable efforts to obtain information needed for that determination.
Independent Representative and ERISA Fiduciary Rules
The rules require that special entities have an independent representative who meets defined requirements (sufficient knowledge, no statutory disqualification, duty to act in the special entity's best interests, timely disclosure of material information, evaluation of fair pricing and appropriateness, and independence from the SBS counterparty). For ERISA plans, an independent representative must be an ERISA fiduciary. The staff estimates there are 283 third‑party and 22 in‑house independent representatives (305 total).
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