SEC News: Regulator Proposes Amendment For Settling Securities Transactions, Adopts Rules to Improve Regulatory Framework for Clearing Agencies, Gives Authorities Access to Information from Security-Based Swap Data Repositories, and Enhances Investment Adviser Requirements for Providing Information

New Proposed Amendment Would Shorten Period for Settling Securities Transactions 

The SEC has voted to propose a rule amendment that would abbreviate the typical length of a settlement cycle period for the majority of broker-dealer securities transactions. Instead of having this period run from three business day following the trade date it would be reduced to two days. The hope is that the amendment, if approved, would lower the risks that can occur due to the value and quantity of unresolved securities transactions before a settlement is completed. 

The proposal would modify the Exchange Act’s Rule 15c6-1(a). Under the amendment, a broker-dealer would not be allowed to get into a contract for the sale or purchase of a security that provides fund payments unless it is an exempted security, municipal security, government security, banker’s acceptance, commercial paper, or commercial bill. The regulator hopes that the proposed amendment would reduce the market,  credit, and liquidity risks for all participants in the U.S. market.

 

SEC Adopts Rules Impacting Securities Clearing Agencies

The Commission has adopted rules to enhance the regulatory framework for securities clearing agencies. The improved standards would preside over the running of and overseeing of securities clearing agencies that are either systemically important or are taking part in security-based swaps and other complex transactions. The SEC also voted to propose that the enhanced standards be applied to other securities clearing agency categories.

 

SEC Adopts Amendments Related to Security-Based Swap Data Repositories 

The regulator also adopted amendments that give authorities access to information from security-based swap data repositories. The amendments mandate that security-based swap data repositories make data available to authorities, including regulators. 

 

SEC Chair Mary Jo White said the rules are “fundamental” to effective supervision of the securities-based swap market.” She noted that regulators must have “timely reliable” access to these repositories so that they can do their job of oversight, decrease threats to financial stability, improve market integrity, and enhance transparency. It was the Dodd–Frank Act that set up provision for regulators to be able to access this data from the repositories. 

The final rule amendments, based on a proposal made last year, mandate an arrangement between the data recipient and the Commission when dealing with the confidentiality of the security-based swap data provided by the recipient, identify “the five prudential regulators” that can access the data, and tackle what the regulator is allowed to consider when deciding whether to let  entities to gain access to the information.

 

New SEC Amendments Look to Improve Information Provided by Investment Advisers 

The Commission has adopted amendments to a number of Investment Advisers Act rules, as well as to the investment adviser registration and reporting forms. The amendments seek to improve the quality of information that IAs give to the SEC and investors. 

 

With the new amendments, investment advisers must give more information about the managed account business that they separately oversee. Also, the amendments would streamline reporting and registration for groups of private fund adviser entities that run as one advisory business.

Under the amendments to Rule 204-2 of the Investment Advisers Act, advisers will have to keep extra records about the distribution and calculation of information regarding performance. Such records would be helpful when the SEC’s examination’s staff is assessing an adviser performance claim and ideally would lower the incidents of fraudulent or misleading communications and ads put out by IAs.