§8343 Rulemaking on Conflict of Interest

Summary

The Securities and Exchange Commission must write rules no later than 180 days after July 21, 2010. The rules can limit how much control or voting power big firms have over clearinghouses or trading venues that handle security-based swaps. Those limits can apply to bank holding companies with total consolidated assets of $50,000,000,000 or more, nonbank financial companies supervised by the Federal Reserve, their affiliates, security-based swap dealers, major security-based swap participants, and people tied to those firms. The SEC must put rules in place if it finds they are needed to improve governance, reduce systemic risk, promote competition, or cut conflicts of interest when a swap dealer or major participant has a material debt or equity investment in a clearinghouse, exchange, or swap trading facility. In making rules, the SEC must consider how much equity one investor owns, voting power or the ability to block votes, and how the clearinghouse or trading venue is governed.