SEC Streamlines Trades: Extending Rule to Cut Global Paperwork
Published Date: 12/16/2025
Notice
Summary
The SEC is asking for feedback on extending a rule that helps banks and traders decide if their deals count as foreign or U.S. transactions. This rule lets parties share info once per trading relationship, saving time and cutting paperwork. No big costs or changes are expected, but folks involved in security-based swaps should keep an eye on this to stay in the know.
Analyzed Economic Effects
3 provisions identified: 1 benefits, 2 costs, 0 mixed.
Costs for ~4,200 non‑U.S. counterparties
The SEC estimates about 4,200 non-U.S. counterparties will provide representations that they are not U.S. persons. The Commission estimates up to 5 hours each to develop disclosures (about 21,000 hours total), outside-professional cost per respondent of about $2,715 (five hours at $543/hour), an annualized labor cost per respondent of $905, and aggregate annualized costs of about $3.8 million (total $11.4 million over three years).
Once‑per‑relationship paperwork rule
If you are a party to security-based swaps, Rule 3a71-3 allows you to make representations once per trading relationship (not for each trade) about whether a deal is through a foreign branch or whether a counterparty is a U.S. person. The rule lets counterparties exchange this language in representation letters or trading documentation to reduce repeated paperwork and operational costs.
Compliance burden on nine U.S. banks
The SEC estimates nine U.S. banks (registered as security-based swap dealers) will incur burdens under this collection. The Commission previously estimated a one-time disclosure development of up to 5 hours and up to $2,000 in outside-professional costs per U.S. bank, and it now estimates an ongoing verification burden of about 10 hours per U.S. bank (about 90 hours total across the nine banks).
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