The SEC final rule to establish security-based swap capital, margin and segregation requirements was published in the Federal Register. The effective date is October 21, 2019. The compliance date for both the new rules and rule amendments will be 18 months after the later of either (i) the effective date of the final rules establishing recordkeeping and reporting requirements for SBSDs, or (ii) the effective date of the final rules concerning the cross-border application of certain security-based swap requirements.

As previously covered, the adopted rules will, among other things:

  • establish minimum capital requirements, where there is not a prudential regulator, for security-based swap dealers ("nonbank SBSDs");
  • increase the minimum net capital requirements for broker-dealers that use internal models to compute net capital;
  • adopt capital requirements for security-based swap dealers and swap-related amendments to the rules for broker-dealers that are not registered as SBSDs;
  • adopt security-based swap margin requirements for nonbank SBSDs;
  • adopt segregation requirements for SBSDs and stand-alone broker-dealers for cleared and non-cleared security-based swaps; and
  • allow foreign SBSDs to request substituted compliance regarding capital and margin requirements.


Steven Lofchie

The time for registration as a security-based swap dealer is within sight.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.