SEC Proposes Capital, Margin, and Segregation Rules for Security-Based Swap Dealers

On October 17, 2012, the SEC unanimously approved proposed capital, margin, and segregation rules for security-based swap dealers and major security-based swap participants. The Proposal draws heavily on the SEC’s existing capital, margin, and segregation requirements for registered broker-dealers.

The Proposal’s capital and margin requirements would apply only to security-based swap dealers and major security-based swap participants that are neither banks nor bank holding companies, whereas the segregation requirements would apply to all security-based swap dealers and major security-based swap participants. In addition, the Proposal would enhance the capital requirements that apply to all large broker-dealers that have been approved to use internal models to compute net capital, regardless of whether they are security-based swap dealers.