§8343 — Title 15 Commerce and Trade | U.S. Code

Summary

The Securities and Exchange Commission must write rules within 180 days after July 21, 2010 to reduce conflicts of interest in security-based swap markets. The rules can limit how much control or voting power large firms have over clearing agencies, swap trading platforms, or exchanges. Covered firms include bank holding companies with total consolidated assets of $50,000,000,000 or more, certain nonbank firms supervised by the Federal Reserve, their affiliates, swap dealers, major swap participants, and related persons. If the SEC finds rules are needed after its review, it must make them to improve governance, lower risk to the whole financial system, promote competition, or reduce conflicts when those firms have significant debt or equity stakes. The SEC must consider single-owner holdings, voting power, and governance arrangements when making the rules.

Title 15, §8343

Commerce and Trade — Source: USLM XML via OLRC

(a)In order to mitigate conflicts of interest, not later than 180 days after July 21, 2010, the Securities and Exchange Commission shall adopt rules which may include numerical limits on the control of, or the voting rights with respect to, any clearing agency that clears security-based swaps, or on the control of any security-based swap execution facility or national securities exchange that posts or makes available for trading security-based swaps, by a bank holding company (as defined in section 1841 of title 12) with total consolidated assets of $50,000,000,000 or more, a nonbank financial company (as defined in section 5311 of title 12) supervised by the Board of Governors of the Federal Reserve System, affiliate of such a bank holding company or nonbank financial company, a security-based swap dealer, major security-based swap participant, or person associated with a security-based swap dealer or major security-based swap participant.

(b)The Securities and Exchange Commission shall adopt rules if the Commission determines, after the review described in subsection (a), that such rules are necessary or appropriate to improve the governance of, or to mitigate systemic risk, promote competition, or mitigate conflicts of interest in connection with a security-based swap dealer or major security-based swap participant’s conduct of business with, a clearing agency, national securities exchange, or security-based swap execution facility that clears, posts, or makes available for trading security-based swaps and in which such security-based swap dealer or major security-based swap participant has a material debt or equity investment.

(c)In adopting rules pursuant to this section, the Securities and Exchange Commission shall consider any conflicts of interest arising from the amount of equity owned by a single investor, the ability to vote, cause the vote of, or withhold votes entitled to be cast on any matters by the holders of the ownership interest, and the governance arrangements of any derivatives clearing organization that clears swaps, or swap execution facility or board of trade designated as a contract market that posts swaps or makes swaps available for trading.

Statutory Notes and Related Subsidiaries

Definitions For definitions of terms used in this section, see section 5301 of Title 12, Banks and Banking.

§8343 Rulemaking on conflict of interest

Summary

Title 15, §8343

Notes & Related Subsidiaries

Statutory Notes and Related Subsidiaries

Citations & Metadata