With a unanimous vote on Wednesday, the Securities and Exchange Commission moved forward with proposed rules detailing its efforts to reduce the risks posed by large, un-collateralized derivatives positions.
In response to the financial crisis, notably the $182 billion bailout of American International Group following crippling losses on credit default swaps, Title VII of the Dodd-Frank Act divided the obligation to craft new derivatives rules among the SEC, the Commodity Futures Trading Commission and banking regulators. The SEC’s purview extends to securities-based derivatives.
