The Securities and Exchange Commission has proposed new rules to enhance its oversight of clearing agencies deemed to be systemically important—meaning that their insolvency could drag down the entire financial system—by the Financial Stability Oversight Council. Included in the proposal are capital requirements, liquidity standards, and ongoing stress tests similar to those conducted at the nation’s largest banks.
The Dodd-Frank Act required an enhanced regulatory framework for certain clearing agencies. Building upon previous rules issued in 2012, the new proposal, approved by SEC commissioners on March 12, imposes new requirements for financial risk management, operations, governance, and disclosures to market participants and the public. Also covered by the rule are clearing agencies involved in complex transactions, such as security-based swaps.
