Commission's proposed approach and the CFTC's approach.
    The Commission also seeks comment on the relevant economic
considerations for the Commission if we modify our proposed approach to
conform to the CFTC's [proposed/final] guidance. Similarly, what would
the economic considerations be for the Commission to adopt any cross-
border interpretations proposed by the CFTC, but not proposed by the
Commission?

XVI. Consideration of Impact on the Economy

    For purposes of the Small Business Regulatory Enforcement Fairness
Act of 1996 (``SBREFA'')\1959\ the Commission must advise the OMB
whether the proposed regulation constitutes a ``major'' rule. Under
SBREFA, a rule is considered ``major'' where, if adopted, it results or
is likely to result in: (1) An annual effect on the economy of $100
million or more (either in the form of an increase or a decrease); (2)
a major increase in costs or prices for consumers or individual
industries; or (3) significant adverse effect on competition,
investment or innovation. If a rule is ``major,'' its effectiveness
will generally be delayed for 60 days pending Congressional review.
---------------------------------------------------------------------------

    \1959\ Public Law 104-121, Title II, 110 Stat. 857 (1996)
(codified in various sections of 5 U.S.C., 15 U.S.C. and as a note
to 5 U.S.C. 601).
---------------------------------------------------------------------------

    The Commission requests comment on the potential impact of these
proposed rules on the economy on an annual basis, on the costs or
prices for consumers or individual industries, and on competition,
investment, or innovation. Commenters are requested to provide
empirical data and other factual support for their view to the extent
possible.

XVII. Regulatory Flexibility Act Certification

    The Regulatory Flexibility Act (``RFA'') \1960\ requires Federal
agencies, in promulgating rules, to consider the impact of those rules
on small entities. Section 603(a) of the Administrative Procedure
Act,\1961\ as amended by the RFA, generally requires the Commission to
undertake a regulatory flexibility analysis of all proposed rules, or
proposed rule amendments, to determine the impact of such rulemaking on
``small entities.'' \1962\ Section 605(b) of the RFA \1963\ provides
that this requirement shall not apply to any proposed rule or proposed
rule amendment which, if adopted, would not have a significant economic
impact on a substantial number of small entities.
---------------------------------------------------------------------------

    \1960\ 5 U.S.C. 601 et seq.
    \1961\ 5 U.S.C. 603(a).
    \1962\ Although Section 601(b) of the RFA defines the term
``small entity,'' the statute permits agencies to formulate their
own definitions. The Commission has adopted definitions for the term
``small entity'' for the purposes of Commission rulemaking in
accordance with the RFA. Those definitions, as relevant to this
proposed rulemaking, are set forth in Rule 0-10 under the Exchange
Act, 17 CFR 240.0-10. See Exchange Act Release No. 18451 (Jan. 28,
1982), 47 FR 5215 (Feb. 4, 1982) (File No. AS-305).
    \1963\ 5 U.S.C. 605(b).
---------------------------------------------------------------------------

    For purposes of Commission rulemaking in connection with the RFA, a
small entity includes: (1) When used with reference to an ``issuer'' or
a ``person,'' other than an investment company, an ``issuer'' or
``person'' that, on the last day of its most recent fiscal year, had
total assets of $5 million or less; \1964\ or (2) a broker-dealer with
total capital (net worth plus subordinated liabilities) of less than
$500,000 on the date in the prior fiscal year as of which its audited
financial statements were prepared pursuant to Rule 17a-5(d) under the
Exchange Act,\1965\ or, if not required to file such statements, a
broker-dealer with total capital (net worth plus subordinated
liabilities) of less than $500,000 on the last day of the preceding
fiscal year (or in the time that it has been in business, if shorter);
and is not affiliated with any person (other than a natural person)
that is not a small business or small organization.\1966\ Under the
standards adopted by the Small Business Administration, small entities
in the finance and insurance industry include the following: (i) For
entities engaged in credit intermediation and related activities,
entities with $175 million or less in assets; \1967\ (ii) for entities
engaged in non-depository credit intermediation and certain other
activities, entities with $7 million or less in annual receipts; \1968\
(iii) for entities engaged in financial investments and related
activities, entities with $7 million or less in annual receipts; \1969\
(iv) for insurance carriers and entities engaged in related activities,
entities with $7 million or less in annual receipts; \1970\ and (v) for
funds, trusts, and other financial vehicles, entities with $7 million
or less in annual receipts.\1971\
---------------------------------------------------------------------------

    \1964\ See 17 CFR 240.0-10(a).
    \1965\ 17 CFR 240.17a-5(d).
    \1966\ See 17 CFR 240.0-10(c).
    \1967\ See 13 CFR 121.201 (Subsector 522).
    \1968\ See id. at Subsector 522.
    \1969\ See id. at Subsector 523.
    \1970\ See id. at Subsector 524.
    \1971\ See id. at Subsector 525.
---------------------------------------------------------------------------

    Based on feedback from industry participants and our own
information about the security-based swap markets, the Commission
preliminarily believes that non-U.S. entities that would be required to
register and be regulated as

security-based swap dealers and major security-based swap participants
exceed the thresholds defining ``small entities'' set out above. Thus,
the Commission preliminarily believes it is unlikely that the proposed
rules regarding registration of security-based swap dealers and major
security-based swap market participants would have a significant
economic impact any small entity.
    In addition, based on the Commission's own information about the
cross-border security-based swap market, the Commission believes that
only persons or entities with assets significantly in excess of $5
million participate in the security-based swap market, and such persons
or entities would thus not qualify as ``small entities.'' Therefore,
the Commission preliminarily believes that the application of the
mandatory clearing requirement to cross-border security-based swap
transactions is unlikely to impact any small entities. Moreover, the
Commission preliminarily believes that the entities likely to register
as a security-based swap clearing agency located outside the United
States are not likely to qualify as a ``small entity'' as defined
above. Thus, the Commission preliminarily believes it is unlikely that
the proposed rules regarding registration of security-based swap
clearing agencies located outside the United States would have a
significant economic impact any small entity.
    In addition, as discussed in the Regulation SBSR Proposing Release,
the Commission believes that the number of security based swap
transactions involving a ``small entity'' is de minimis. Therefore, the
Commission preliminarily believes that the application of the mandatory
trade reporting requirement to cross-border security-based swap
transactions is unlikely to impact any small entities. Moreover, the
Commission preliminarily believes that the entities likely to register
as a SDR located outside the United States are not likely to qualify as
a ``small entity'' as defined above. Thus, the Commission preliminarily
believes it is unlikely that the proposed rules regarding registration
of SDRs located outside the United States would have a significant
economic impact any small entity.
    In addition, based on the Commission's own information about the
cross-border security-based swap market, the Commission preliminarily
believes that the proposed application of the mandatory trade execution
requirement to cross-border security-based swap transactions is not
likely to impact any small entities. Moreover, as discussed in the SB
SEF Proposing Release, based on our understanding of the market and
conversations with industry sources, the Commission preliminarily
believes that approximately 20 SB SEFs could be subject to the
requirements of proposed Regulation SB SEF. Based on the Commission's
existing information about the security-based swap market and the
entities likely to register as SB SEFs, the Commission preliminarily
believes that the entities likely to register as SB SEFs would not be
considered small entities. The Commission preliminarily believes that
most, if not all, of the SB SEFs would be large business entities or
subsidiaries of large business entities, and that all SB SEFs would
have assets in excess of $5 million and annual receipts in excess of
$7,000,000. Therefore, the Commission preliminarily believes that none
of the potential SB SEFs would be considered small entities.
    For the foregoing reasons, the Commission certifies that the
proposed rules would not have a significant economic impact on a
substantial number of small entities for purposes of the RFA. The
Commission encourages written comments regarding this certification. In
particular, the Commission encourages written comments regarding the
Commission's preliminary belief that the proposed application of the
mandatory clearing requirement and the mandatory trade reporting
requirement to cross-border security-based swap transactions is
unlikely to impact any small entities. The Commission requests that
commenters describe the nature of any impact on small entities and
provide empirical data to illustrate the extent of the impact.

Statutory Basis and Text of Proposed Rules

    Pursuant to the Exchange Act, 15 U.S.C. 78a et seq., and
particularly, Section 3(b), Section 15(d)(1), Section 23(a)(1), Section
30(c) thereof, Sections 712(a)(2), (6), and 761(b) of the Dodd-Frank
Act, the SEC is proposing to adopt rules 0-13, 3a67-10, 3a71-3, 3a71-4,
3a71-5, 3Ca-3, 3Ch-1, 3Ch-2, 13n-4(d), 13n-12, 18a-4, and 900 through
911, and Forms SBSE, SBSE-A, and SBSE-BD, under the Exchange Act.

List of Subjects

17 CFR Part 240

    Brokers, Confidential business information, Fraud, Reporting and
recordkeeping requirements, Securities.

17 CFR Part 242

    Brokers, Fraud, Reporting and recordkeeping requirements,
Securities.

17 CFR Part 249

    Brokers, Reporting and recordkeeping requirements, Securities.

Text of Proposed Rules

    For the reasons stated in the preamble, the SEC is proposing to
amend Title 17, Chapter II of the Code of the Federal Regulations as
follows:

PART 240--GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF
1934

0
1. The authority citation for part 240 is amended by adding an
authority for Sec. Sec.  240.3a67-10, 240.3a71-3, 240.3a71-4, and
240.3a71-5 in numerical order to read as follows:

    Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3,
77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78c-3, 78c-5, 78d, 78e, 78f,
78g, 78i, 78j, 78j-1, 78k, 78k-1, 78l, 78m, 78n, 78n-1, 78o, 78o-4,
78o-10, 78p, 78q, 78q-1, 78s, 78u-5, 78w, 78x, 78ll, 78mm, 80a-20,
80a-23, 80a-29, 80a-37, 80b-3, 80b-4, 80b-11, and 7201 et seq., 12
U.S.C. 5221(e)(3), 15 U.S.C. 8302, and 18 U.S.C. 1350, unless
otherwise noted.
* * * * *
    Sections 240.3a67-10, 240.3a71-3, 240.3a71-4, and 240.3a71-5 are
also issued under Public Law 111-203, secs. 712, 761(b), 124 Stat.
1754 (2010).
* * * * *
0
2. Add Sec.  240.0-13 to read as follows:

Sec.  240.0-13  Commission procedures for filing applications to
request a substituted compliance order under the Exchange Act.

    (a) The application shall be in writing in the form of a letter,
must include any supporting documents necessary to make the application
complete, and otherwise must comply with Sec.  240.0-3. All
applications must be submitted to the Office of the Secretary of the
Commission. Requestors may seek confidential treatment of their
applications to the extent provided under Sec.  200.81 of this chapter.
If an application is incomplete, the Commission, through the Division
of Trading and Markets, may request that the application be withdrawn
unless the applicant can justify, based on all the facts and
circumstances, why supporting materials have not been submitted and
undertakes to submit the omitted materials promptly.
    (b) An applicant may submit a request electronically. The
electronic mailbox to use for these applications is described on the
Commission's Web site at www.sec.gov in the ``Exchange Act Substituted
Compliance Applications''

section. In the event electronic mailboxes are revised in the future,
applicants can find the appropriate mailbox by accessing the
``Electronic Mailboxes at the Commission'' section.
    (c) All filings and submissions filed pursuant to this rule must be
in the English language. If a filing or submission filed pursuant to
this rule requires the inclusion of a document that is in a foreign
language, a party must submit instead a fair and accurate English
translation of the entire foreign language document. A party may submit
a copy of the unabridged foreign language document when including an
English translation of a foreign language document in a filing or
submission filed pursuant to this rule. A party must provide a copy of
any foreign language document upon the request of Commission staff.
    (d) An applicant also may submit a request in paper format. Five
copies of every paper application and every amendment to such an
application must be submitted to the Office of the Secretary at 100 F
Street NE., Washington, DC 20549-1090. Applications must be on white
paper no larger than 8\1/2\ by 11 inches in size. The left margin of
applications must be at least 1\1/2\ inches wide, and if the
application is bound, it must be bound on the left side. All
typewritten or printed material must be set forth in black ink so as to
permit photocopying.
    (e) Every application (electronic or paper) must contain the name,
address, telephone number, and email address of each applicant and the
name, address, telephone number, and email address of a person to whom
any questions regarding the application should be directed. The
Commission will not consider hypothetical or anonymous requests for a
substituted compliance order. Each applicant shall provide the
Commission with any supporting documentation it believes necessary for
the Commission to make such determination, including information
regarding applicable requirements established by the foreign financial
regulatory authority or authorities, as well as the methods used by the
foreign financial regulatory authority or authorities to monitor
compliance with such rules. Applicants should also cite to and discuss
applicable precedent.
    (f) Amendments to the application should be prepared and submitted
as set forth in these procedures and should be marked to show what
changes have been made.
    (g) After the filing is complete, the Division of Trading and
Markets will review the application. Once all questions and issues have
been answered to the satisfaction of the Division of Trading and
Markets, the staff will make an appropriate recommendation to the
Commission. After consideration of the recommendation by the
Commission, the Commission's Office of the Secretary will issue an
appropriate response and will notify the applicant.
    (h) The Commission, in its sole discretion, may choose to publish
in the Federal Register a notice that the application has been
submitted. The notice would provide that any person may, within the
period specified therein, submit to the Commission any information that
relates to the Commission action requested in the application. The
notice also would indicate the earliest date on which the Commission
would take final action on the application, but in no event would such
action be taken earlier than 25 days following publication of the
notice in the Federal Register.
    (i) The Commission may, in its sole discretion, schedule a hearing
on the matter addressed by the application.
    [ssbox] 3a. Add Sec.  240-3a67-10 to read as follows:

Sec.  240.3a67-10  Foreign major security-based swap participants.

    (a) Definitions. As used in this rule, the following terms shall
have the meanings indicated:
    (1) Foreign major security-based swap participant means a major
security-based swap participant, as defined in section 3(a)(67) of the
Act (15 U.S.C. 78c(a)(67)), and the rules and regulations thereunder,
that is not a U.S. person.
    (2) U.S. person has the meaning set forth in Sec.  240.3a71-
3(a)(7).
    (b) Application of customer protection requirements. A registered
foreign major security-based swap participant shall not be subject,
with respect to its security-based swap transactions with
counterparties that are not U.S. persons, to the requirements relating
to business conduct standards described in section 15F(h) of the Act
(15 U.S.C. 78o-10(h)), and the rules and regulations thereunder, other
than rules and regulations prescribed by the Commission pursuant to
section 15F(h)(1)(B) of the Act (15 U.S.C. 78o-10(h)(1)(B)).
    (c) Application of major security-based swap participant tests in
the cross-border context. For purposes of calculating a person's status
as a major security-based swap participant as defined in section
3(a)(67) of the Act (15 U.S.C. 78c(a)(67)), and the rules and
regulations thereunder, a person shall include the following security-
based swap transactions:
    (1) If such person is a U.S. person, all security-based swap
transactions entered into by such person; or
    (2) If such person is a non-U.S. person, all security-based swap
transactions entered into by such person with U.S. persons.
    [ssbox] 3b. Add Sec. Sec.  240.3a71-3, 240.3a71-4, and 240.3a71-5
to read as follows:

Sec.
240.3a71-3 Cross-border security-based swap dealing activity.
240.3a71-4 Exception from aggregation for affiliated groups with
registered security-based swap dealers.
240.3a71-5 Substituted compliance for foreign security-based swap
dealers.
* * * * *

Sec.  240.3a71-3  Cross-border security-based swap dealing activity.

    (a) Definitions. As used in this rule, the following terms shall
have the meanings indicated:
    (1) Foreign branch means any branch of a U.S. bank if:
    (i) The branch is located outside the United States;
    (ii) The branch operates for valid business reasons; and
    (iii) The branch is engaged in the business of banking and is
subject to substantive banking regulation in the jurisdiction where
located.
    (2) Foreign business means security-based swap transactions that
are entered into, or offered to be entered into, by or on behalf of, a
foreign security-based swap dealer or a U.S. security-based swap
dealer, other than the U.S. Business of such person.
    (3) Foreign security-based swap dealer means a security-based swap
dealer, as defined in section 3(a)(71) of the Act (15 U.S.C.
78c(a)(71)), and the rules and regulations thereunder, that is not a
U.S. person.
    (4) Transaction conducted through a foreign branch--(i) Definition.
Transaction conducted through a foreign branch means a security-based
swap transaction that is solicited, negotiated, or executed by a U.S.
person through a foreign branch of such U.S. person if:
    (A) The foreign branch is the counterparty to such security-based
swap transaction; and
    (B) The security-based swap transaction is not solicited,
negotiated, or executed by a person within the United States on behalf
of the foreign branch or its counterparty.
    (ii) Representations. A person shall not be required to consider
its counterparty's activity in connection with paragraph (a)(4)(i)(B)
of this

section in determining whether a security-based swap transaction is a
transaction conducted through a foreign branch if such person receives
a representation from its counterparty that no person within the United
States is directly involved in soliciting, negotiating, or executing
the security-based swap transaction on behalf of such counterparty,
unless such person knows that the representation is not accurate.
    (5) Transaction conducted within the United States--(i) Definition.
Transaction conducted within the United States means a security-based
swap transaction that is solicited, negotiated, executed, or booked
within the United States, by or on behalf of either counterparty to the
transaction, regardless of the location, domicile, or residence status
of either counterparty to the transaction.
    (ii) Foreign branch exception. Notwithstanding paragraph (a)(5)(i)
of this section, a transaction conducted within the United States shall
not include a transaction conducted through a foreign branch.
    (iii) Representations. A person shall not be required to consider
its counterparty's activity in connection with a transaction in
determining whether such transaction is conducted within the United
States if such person receives a representation from its counterparty
that the transaction is not solicited, negotiated, executed, or booked
within the United States by or on behalf of such counterparty, unless
such person knows that the representation is not accurate.
    (6) U.S. business means:
    (i) With respect to a foreign security-based swap dealer:
    (A) Any transaction entered into, or offered to be entered into, by
or on behalf of such foreign security-based swap dealer, with a U.S.
person (other than with a foreign branch); or
    (B) Any transaction conducted within the United States; and
    (ii) With respect to a U.S. security-based swap dealer, any
transaction by or on behalf of such U.S. security-based swap dealer,
wherever entered into or offered to be entered into, other than a
transaction conducted through a foreign branch with a non-U.S. person
or another foreign branch.
    (7) U.S. person. (i) Except as provided in paragraph (a)(7)(ii) of
this section, U.S. person means:
    (A) Any natural person resident in the United States;
    (B) Any partnership, corporation, trust, or other legal person
organized or incorporated under the laws of the United States or having
its principal place of business in the United States; and
    (C) Any account (whether discretionary or non-discretionary) of a
U.S. person.
    (ii) The term U.S. person does not include the International
Monetary Fund, the International Bank for Reconstruction and
Development, the Inter-American Development Bank, the Asian Development
Bank, the African Development Bank, the United Nations, and their
agencies and pension plans, and any other similar international
organizations, their agencies and pension plans.
    (8) U.S. security-based swap dealer means a security-based swap
dealer, as defined in section 3(a)(71) of the Act (15 U.S.C.
78c(a)(71)), and the rules and regulations thereunder, that is a U.S.
person.
    (9) United States means the United States of America, its
territories and possessions, any State of the United States, and the
District of Columbia.
    (b) Application of de minimis exception to cross-border dealing
activity. For purposes of calculating the amount of security-based swap
positions connected with dealing activity under Sec.  240.3a71-2(a)(1),
a person shall include the following security-based swap transactions:
    (1)(i) If such person is a U.S. person, all security-based swap
transactions connected with the dealing activity in which such person
engages, including transactions conducted through a foreign branch; or
    (ii) If such person is a non-U.S. person, security-based swap
transactions connected with the dealing activity in which such person
engages that are entered into with a U.S. person (other than with a
foreign branch) or that are transactions conducted within the United
States; and
    (2) If such person engages in transactions described in paragraph
(b)(1)(i) or (ii) of this section,
    (i) All security-based swap transactions connected with the dealing
activity in which any U.S. person controlling, controlled by, or under
common control with such person engages, including transactions
conducted through a foreign branch; and
    (ii) All security-based swap transactions connected with the
dealing activity in which any non-U.S. person controlling, controlled
by, or under common control with such person engages that are entered
into with U.S. persons (other than with a foreign branch) or that are
transactions conducted within the United States.
    (c) Application of customer protection requirements. A registered
foreign security-based swap dealer and a registered U.S. security-based
swap dealer, with respect to their Foreign Business, shall not be
subject to the requirements relating to business conduct standards
described in section 15F(h) of the Act (15 U.S.C. 78o-10(h)), and the
rules and regulations thereunder, other than the rules and regulations
prescribed by the Commission pursuant to section 15F(h)(1)(B) of the
Act (15 U.S.C. 78o-10(h)(1)(B)).

Sec.  240.3a71-4  Exception from aggregation for affiliated groups with
registered security-based swap dealers.

    Notwithstanding Sec. Sec.  240.3a71-2(a)(1) and 240.3a71-3(b)(2), a
person shall not include the security-based swap transactions of
another person controlling, controlled by, or under common control with
such person where such other person is registered with the Commission
as a security-based swap dealer, provided that the security-based swap
dealing activity of such person is operationally independent of the
security-based swap dealing activity of such registered security-based
swap dealer.

Sec.  240.3a71-5  Substituted compliance for foreign security-based
swap dealers.

    (a) Determinations--(1) In general. Subject to paragraph (a)(2) of
this section and except as provided in paragraph (a)(3) of this
section, the Commission may, conditionally or unconditionally, by
order, make a determination with respect to a foreign financial
regulatory system that compliance with specified requirements under
such foreign financial regulatory system by a registered foreign
security-based swap dealer (or class thereof) may satisfy the
corresponding requirements in section 15F of the Act (15 U.S.C. 78o-
10), and the rules and regulations thereunder, that would otherwise
apply to such foreign security-based swap dealer (or class thereof).
    (2) Standard. The Commission shall not make a substituted
compliance determination under paragraph (a)(1) of this section unless
the Commission:
    (i) Determines that the requirements of such foreign financial
regulatory system applicable to such foreign security-based swap dealer
(or class thereof) are comparable to otherwise applicable requirements,
after taking into account such factors as the Commission determines are
appropriate, such as the scope and objectives of the relevant foreign
regulatory requirements, as well as the

effectiveness of the supervisory compliance program administered, and
the enforcement authority exercised, by a foreign financial regulatory
authority or authorities in such system to support its oversight of
such foreign security-based swap dealer (or class thereof); and
    (ii) Has entered into a supervisory and enforcement memorandum of
understanding or other arrangement with the relevant foreign financial
regulatory authority or authorities under such foreign financial
regulatory system addressing oversight and supervision of applicable
security-based swap dealers under the substituted compliance
determination.
    (3) Limitation. The Commission will not make a substituted
compliance determination under paragraph (a)(1) of this section with
respect to the requirements relating to the registration process
described in sections 15F(a) through (d) of the Act (15 U.S.C. 78o-
10(a) through (d)) and the rules and regulations thereunder.
    (4) Withdrawal or modification. The Commission may, on its own
initiative, by order, modify or withdraw a substituted compliance
determination under paragraph (a)(1) of this section, after appropriate
notice and opportunity for comment.
    (b) Reliance by foreign security-based swap dealers. A registered
foreign security-based swap dealer may satisfy requirements in section
15F of the Act (15 U.S.C. 78o-10), and the rules and regulations
thereunder, by complying with corresponding legislative requirements
and rules and regulations under a foreign financial regulatory system,
provided:
    (1) The Commission has made a substituted compliance determination
pursuant to paragraph (a)(1) of this section regarding such foreign
financial regulatory system providing that compliance with specified
requirements under such foreign financial regulatory system by such
registered foreign security-based swap dealer (or a class of registered
foreign security-based swap dealers that includes such registered
foreign security-based swap dealer) may satisfy the corresponding
requirements in section 15F of the Act (15 U.S.C. 78o-10) and the rules
and regulations thereunder; and
    (2) Such registered foreign security-based swap dealer satisfies
any conditions set forth in a substituted compliance determination made
by the Commission pursuant to paragraph (a)(1) of this section.
    (c) Requests for determinations. (1) A foreign security-based swap
dealer or group of foreign security-based swap dealers of the same
class may file an application, pursuant to the procedures set forth in
Sec.  240.0-13, requesting that the Commission make a substituted
compliance determination pursuant to paragraph (a)(1) of this section,
with respect to one or more requirements in section 15F of the Act (15
U.S.C. 78o-10), and the rules and regulations thereunder, and provide
the reasons therefor and such other supporting documentation as the
Commission may request.
    (2) A foreign security-based swap dealer or group of foreign
security-based swap dealers may make a request under paragraph (a)(1)
of this section only if the foreign security-based swap dealer(s):
    (i) Is directly supervised by the foreign financial regulatory
authority or authorities under the system with respect to the foreign
regulatory requirements relating to the applicable requirements in
section 15F of the Act (15 U.S.C. 78o-10) and the rules and regulations
thereunder; and
    (ii) Provides the certification and opinion of counsel as described
in Sec.  240.15Fb2-4(c).
0
4. Add Sec.  240.3Ca-3 to read as follows:

Sec.  240.3Ca-3  Application of the mandatory clearing requirement to
cross-border security-based swap transactions.

    (a) Application. Subject to paragraph (b) of this section, the
clearing requirement in section 3C(a)(1) of the Act (15 U.S.C. 78c-
3(a)(1)), and the rules and regulations thereunder, shall apply to a
person that engages in a security-based swap transaction if:
    (1) A counterparty to the transaction is:
    (i) A U.S. person; or
    (ii) A non-U.S. person whose performance under the security-based
swap is guaranteed by a U.S. person; or
    (2) Such transaction is a transaction conducted within the United
States.
    (b) Exceptions. The clearing requirement in section 3C(a)(1) of the
Act (15 U.S.C. 78c-3(a)(1)), and the rules and regulations thereunder,
shall not apply to a transaction described in paragraph (a) of this
section if:
    (1) With respect to a security-based swap transaction that is not a
transaction conducted within the United States,
    (i) One counterparty to the transaction is:
    (A) A foreign branch; or
    (B) A non-U.S. person whose performance under the security-based
swap is guaranteed by a U.S. person; and
    (ii) The other counterparty to the transaction is a non-U.S.
person:
    (A) Whose performance under the security-based swap is not
guaranteed by a U.S. person; and
    (B) Who is not a foreign security-based swap dealer; or
    (2) With respect to a security-based swap transaction that is a
transaction conducted within the United States,
    (i) Neither counterparty to the transaction is a U.S. person;
    (ii) Neither counterparty's performance under the security-based
swap is guaranteed by a U.S. person; and
    (iii) Neither counterparty to the transaction is a foreign
security-based swap dealer.
    (c) For purposes of this section, the terms foreign branch, foreign
security-based swap dealer, transaction conducted within the United
States, and U.S. person shall have the meanings set forth in Sec.
240.3a71-3(a).
0
5. Add an undesignated center heading following Sec.  240.3Ca-2, and
add Sec. Sec.  240.3Ch-1 and 240.3Ch-2 to read as follows:

Trade Execution of Security-Based Swaps

* * * * *
Sec.
240.3Ch-1 Application of the mandatory trade execution requirement
to cross-border security-based swap transactions.
240.3Ch-2 Substituted compliance for mandatory trade execution.

Sec.  240.3Ch-1  Application of the mandatory trade execution
requirement to cross-border security-based swap transactions.

    (a) Application. Subject to paragraph (b) of this section, the
mandatory trade execution requirement in section 3C(h) of the Act (15
U.S.C. 78c-3(h)), and the rules and regulations thereunder, shall apply
to a person that engages in a security-based swap transaction if:
    (1) A counterparty to the transaction is:
    (i) A U.S. person; or
    (ii) A non-U.S. person whose performance under the security-based
swap is guaranteed by a U.S. person; or
    (2) Such transaction is a transaction conducted within the United
States.
    (b) Exceptions. The mandatory trade execution requirement in
section 3C(h) of the Act (15 U.S.C. 78c-3(h)), and the rules and
regulations thereunder, shall not apply to a transaction described in
paragraph (a) of this section if:
    (1) With respect to a security-based swap transaction that is not a
transaction conducted within the United States,
    (i) One counterparty to the transaction is:
    (A) A foreign branch; or
    (B) A non-U.S. person whose performance under the security-based

swap is guaranteed by a U.S. person; and
    (ii) The other counterparty to the transaction is a non-U.S.
person:
    (A) Whose performance under the security-based swap is not
guaranteed by a U.S. person; and
    (B) Who is not a foreign security-based swap dealer; or
    (2) With respect to a security-based swap transaction that is a
transaction conducted within the United States,
    (i) Neither counterparty to the transaction is a U.S. person;
    (ii) Neither counterparty's performances under the security-based
swap is guaranteed by a U.S. person; and
    (iii) Neither counterparty to the transaction is a foreign
security-based swap dealer.
    (c) For purposes of this section, the terms foreign branch, foreign
security-based swap dealer, and transaction conducted within the United
States, and U.S. person shall have the meanings set forth in Sec.
240.3a71-3(a).

Sec.  240.3Ch-2  Substituted compliance for mandatory trade execution.

    (a) A person that is subject to the mandatory trade execution
requirement in section 3C(h) of the Act (15 U.S.C. 78c-3(h)), and the
rules and regulations thereunder, with respect to a security-based swap
transaction may execute such transaction, or have such transaction
executed on its behalf, on a security-based swap market that is neither
registered under the Act nor exempt from registration under the Act if
such security-based swap market is covered by, or is in a class of
markets that is covered by, a Commission order described in paragraph
(b) of this section, provided that with respect to at least one of the
counterparties to the transaction:
    (1) Such counterparty is either a non-U.S person or a foreign
branch; and
    (2) The security-based swap transaction is not solicited,
negotiated, or executed by a person within the United States on behalf
of such counterparty.
    (b)(1) The Commission may, conditionally or unconditionally, by
order, make a substituted compliance determination with respect to a
foreign jurisdiction to permit a person subject to the mandatory trade
execution requirement in section 3C(h) of the Act (15 U.S.C. 78c-3(h)),
and the rules and regulations thereunder, with respect to a security-
based swap transaction to execute such transaction, or have such
transaction executed on its behalf, on a security-based swap market (or
class of markets) if it determines that such security-based swap market
(or class of markets) is subject to comparable, comprehensive
supervision and regulation by the relevant foreign financial regulatory
authority or authorities in such foreign jurisdiction.
    (2) In making a determination under paragraph (b)(1) of this
section, the Commission shall take into account such factors as the
Commission determines are appropriate, such as the scope and objectives
of the relevant foreign regulatory requirements, as well as the
effectiveness of the supervisory compliance program administered, and
the enforcement authority exercised, by the relevant foreign financial
regulatory authority or authorities in the foreign jurisdiction to
support the oversight of the security-based swap market (or class of
markets).
    (3) Before issuing a substituted compliance order pursuant to
paragraph (b)(1) of this section, the Commission shall have entered
into a supervisory and enforcement memorandum of understanding or other
arrangement with the relevant foreign regulatory authority or
authorities in the foreign jurisdiction addressing the oversight and
supervision of the security-based swap market (or class of markets).
    (4) The Commission may, on its own initiative, modify or withdraw
such order at any time, after appropriate notice and opportunity for
comment.
    (c) One or more security-based swap markets in a foreign
jurisdiction may file an application, in writing, pursuant to the
procedures set forth in Sec.  240.0-13, requesting that the Commission
make a substituted compliance determination with respect to such
foreign jurisdiction pursuant to paragraph (b)(1) of this section. Such
application must include the reasons therefor and such other
documentation as the Commission may request.
    (d) For purposes of this section, the terms foreign branch and U.S.
person shall have the meanings set forth in Sec.  240.3a71-3(a).
0
6. Add paragraph (d) to Sec.  240.13n-4 as previously proposed at 75 FR
77367, Dec. 10, 2010, to read as follows:

Sec.  240.13n-4  Duties and core principles of security-based swap data
repository.

* * * * *
    (d) Exemption from the indemnification requirement. A registered
security-based swap data repository is not required to comply with the
indemnification requirement set forth in Section 13(n)(5)(H)(ii) of the
Act (15 U.S.C. 78m(n)(5)(H)(ii)) and paragraph (b)(10) of this section
with respect to disclosure of security-based swap information by the
security-based swap data repository if:
    (1) An entity described in paragraph (b)(9) of this section
requests security-based swap information from the security-based swap
data repository to fulfill a regulatory mandate and/or legal
responsibility of the entity;
    (2) The request of such entity pertains to a person or financial
product subject to the jurisdiction, supervision, or oversight of the
entity; and
    (3) Such entity has entered into a supervisory and enforcement
memorandum of understanding or other arrangement with the Commission
that addresses the confidentiality of the security-based swap
information provided and any other matters as determined by the
Commission.
0
7. Add Sec.  240.13n-12 following Sec.  240.13n-11 as previously
proposed at 75 FR 77366, Dec. 10, 2010, to read as follows:

Sec.  240.13n-12  Exemption from requirements governing security-based
swap data repositories for certain non-U.S. persons.

    (a) Definitions. For purposes of this section--
    (1) Non-U.S. person means a person that is not a U.S. person.
    (2) U.S. person shall have the same meaning as set forth in Sec.
240.3a71-3(a)(7).
    (b) A non-U.S. person that performs the functions of a security-
based swap data repository within the United States shall be exempt
from the registration and other requirements set forth in Section 13(n)
of the Act (15 U.S.C. 78m(n)), and the rules and regulations
thereunder, provided that each regulator with supervisory authority
over such non-U.S. person has entered into a supervisory and
enforcement memorandum of understanding or other arrangement with the
Commission that addresses the confidentiality of data collected and
maintained by such non-U.S. person, access by the Commission to such
data, and any other matters determined by the Commission.
0
8. Add paragraphs (e) and (f) to Sec.  240.18a-4 as previously proposed
at 77 FR 70350, Nov. 23, 2012, to read as follows:

Sec.  240.18a-4  Segregation requirements for security-based swap
dealers and major security-based swap participants

* * * * *
    (e) Segregation requirements for foreign security-based swap
dealers--(1) Non-cleared security-based swaps. (i) A registered foreign
security-based swap dealer (as defined in Sec.  240.3a71-3(a)(3)) that
is a registered broker-dealer shall be subject to the requirements
relating to

segregation of assets held as collateral set forth in section 3E of the
Act (15 U.S.C. 78c-5) and paragraphs (a) through (d) of this section,
with respect to any assets received from, for, or on behalf of a
counterparty to margin, guarantee, or secure a non-cleared security-
based swap (including money, securities, or property accruing to such
counterparty as the result of such a security-based swap transaction).
    (ii) A registered foreign security-based swap dealer (as defined in
Sec.  240.3a71-3(a)(3)) that is not a registered broker-dealer shall be
subject to the requirements relating to segregation of assets held as
collateral set forth in section 3E of the Act (15 U.S.C. 78c-5) and
paragraphs (a) through (d) of this section, with respect to non-cleared
security-based swap transactions, solely with respect to any assets
received from, for, or on behalf of a counterparty that is a U.S.
person (as defined in Sec.  240.3a71-3(a)(7)) to margin, guarantee, or
secure a non-cleared security-based swap (including money, securities,
or property accruing to such U.S. person counterparty as the result of
such a security-based swap transaction).
    (2) Cleared security-based swaps. (i) A registered foreign
security-based swap dealer (as defined in Sec.  240.3a71-3(a)(3)) that
is a registered broker-dealer shall be subject to the requirements
relating to segregation of assets held as collateral set forth in
section 3E of the Act (15 U.S.C. 78c-5) and paragraphs (a) through (d)
of this section, with respect to any assets received from, for, or on
behalf of a counterparty to margin, guarantee, or secure a cleared
security-based swap (including money, securities, or property accruing
to such counterparty as the result of such a security-based swap
transaction).
    (ii) A registered foreign security-based swap dealer (as defined in
Sec.  240.3a71-3(a)(3)) that is not a registered broker-dealer and is
not a person described in 11 U.S.C. 109(b)(3) shall be subject to the
requirements relating to segregation of assets held as collateral set
forth in section 3E of the Act (15 U.S.C. 78c-5) and paragraphs (a)
through (d) of this section, with respect to cleared security-based
swap transactions with any counterparty if such registered foreign
security-based swap dealer accepts any assets from, for, or on behalf
of a counterparty that is a U.S. person (as defined in Sec.  240.3a71-
3(a)(7)) to margin, guarantee, or secure a security-based swap
(including money, securities, or property accruing to such U.S. person
counterparty as the result of such a security-based swap).
    (iii) A registered foreign security-based swap dealer (as defined
in Sec.  240.3a71-3(a)(3)) that is a person described in 11 U.S.C.
109(b)(3) shall be subject to the requirements relating to segregation
of assets held as collateral set forth in section 3E of the Act (15
U.S.C. 78c-5) and paragraphs (a) through (d) of this section, with
respect to cleared security-based swap transactions, solely with
respect to any assets received from, for, or on behalf of a
counterparty who is a U.S. person (as defined in Sec.  240.3a71-
3(a)(7)) to margin, guarantee, or secure a security-based swap cleared
by or through a clearing agency (including money, securities, or
property accruing to such U.S. person counterparty as the result of
such a security-based swap transaction). The special account maintained
by a registered foreign security-based swap dealer that is a person
described in 11 U.S.C. 109(b)(3) in accordance with paragraph (c) of
this section shall be designated for the exclusive benefit of U.S.
person security-based swap customers.
    (3) Disclosures. A registered foreign security-based swap dealer
(as defined in Sec.  240.3a71-3(a)(3)) must disclose to its
counterparty that is a U.S. person, prior to accepting any assets from,
for, or on behalf of such counterparty to margin, guarantee, or secure
a security-based swap, the potential treatment of the assets segregated
by such registered foreign security-based swap dealer pursuant to
section 3E of the Act (15 U.S.C. 78c-5), and the rules and regulations
thereunder, in insolvency proceedings under U.S. bankruptcy law and any
applicable foreign insolvency laws. Such disclosure shall include
whether the foreign security-based swap dealer is subject to the
segregation requirement set forth in Section 3E of the Act, and the
rules and regulations thereunder, with respect to the assets collected
from the U.S. person counterparty who will receive the disclosure,
whether the foreign security-based swap dealer could be subject to the
stockbroker liquidation provisions in the U.S. Bankruptcy Code, whether
the segregated assets could be afforded customer property treatment
under the U.S. bankruptcy law, and any other relevant considerations
that may affect the treatment of the assets segregated under Section 3E
of the Act in insolvency proceedings of the foreign security-based swap
dealer.
    (f) Segregation requirements for foreign major security-based swap
participants. A registered foreign major security-based swap
participant (as defined in Sec.  240.3a67-10(a)(1)) that is not a
registered broker-dealer shall not be subject to the requirements
relating to segregation of assets held as collateral set forth in
section 3E(f) of the Act (15 U.S.C. 78c-5(f)) and paragraph (d) of this
section, with respect to non-cleared security-based swap transactions,
solely with respect to any assets received from, for, or on behalf of a
counterparty that is a not a U.S. person (as defined in Sec.  240.3a71-
3(a)(7)) to margin, guarantee, or secure a non-cleared security-based
swap (including money, securities, or property accruing to such non-
U.S. person counterparty as the result of such a security-based swap
transaction).

PART 242--REGULATIONS M, SHO, ATS, AC, NMS, AND SBSR AND CUSTOMER
MARGIN REQUIREMENTS FOR SECURITY FUTURES

0
9. The authority citation for part 242 continues to read as follows:

    Authority: 15 U.S.C. 77g, 77q(a), 77s(a), 78b, 78c, 78g(c)(2),
78i(a), 78j, 78k-l(c), 78l, 78m, 78n, 78o(b), 78o(c), 78o(g),
78q(a), 78q(b), 78q(h), 78w(a), 78dd-1, 78mm, 80a-23, 80a-29, and
80a-37.

0
10a. Revise the heading of part 242 to read as set forth above.
0
10b. Add an undesignated center heading and revise Sec. Sec.  242.900
through 242.911 as previously proposed at 75 FR 75283, Dec. 2, 2010, to
read as follows:

Regulation SBSR--Regulatory Reporting and Public Dissemination of
Security-Based Swap Information

Sec.
242.900 Definitions
242.901 Reporting obligations.
242.902 Public dissemination of transaction reports.
242.903 Coded information.
242.904 Operating hours of registered security-based swap data
repositories.
242.905 Correction of errors in security-based swap information.
242.906 Other duties of participants.
242.907 Policies and procedures of registered security-based swap
data repositories.
242.908 Cross-border matters.
242.909 Registration of security-based swap data repository as a
securities information processor.
242.910 Implementation of security-based swap reporting and
dissemination.
242.911 Prohibition during phase-in period.
* * * * *

Sec.  242.900  Definitions.

    Terms used in Sec. Sec.  242.900 through 242.911 that appear in
Section 3 of the Exchange Act (15 U.S.C. 78c) have the same meaning as
in Section 3 of the Exchange Act and the rules or regulations
thereunder. In addition, for purposes of Regulation SBSR (Sec. Sec.
242.900 through 242.911), the following definitions shall apply:
    (a) Affiliate means any person that, directly or indirectly,
controls, is

controlled by, or is under common control with, a person.
    (b) Asset class means those security-based swaps in a particular
broad category, including, but not limited to, credit derivatives,
equity derivatives, and loan-based derivatives.
    (c) Block trade means a large notional security-based swap
transaction that meets the criteria set forth in Sec.  242.907(b).
    (d) Broker ID means the UIC assigned to a person acting as a broker
for a participant.
    (e) Confirm means the production of a confirmation that is agreed
to by the parties to be definitive and complete and that has been
manually, electronically, or, by some other legally equivalent means,
signed.
    (f) Control means, for purposes of Sec. Sec.  242.900 through
242.911, the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a person, whether
through the ownership of voting securities, by contract, or otherwise.
A person is presumed to control another person if the person:
    (1) Is a director, general partner or officer exercising executive
responsibility (or having similar status or functions);
    (2) Directly or indirectly has the right to vote 25 percent or more
of a class of voting securities or has the power to sell or direct the
sale of 25 percent or more of a class of voting securities; or
    (3) In the case of a partnership, has the right to receive, upon
dissolution, or has contributed, 25 percent or more of the capital.
    (g) Counterparty means a person that is a direct counterparty or
indirect counterparty of a security-based swap.
    (h) Derivatives clearing organization means the same as provided
under the Commodity Exchange Act.
    (i) Desk ID means the UIC assigned to the trading desk of a
participant or of a broker of a participant.
    (j) Direct counterparty means a person that is a primary obligor on
a security-bases swap.
    (k) Direct electronic access has the same meaning as in Sec.
240.13n-4(a)(5) of this chapter.
    (l) Effective reporting date, with respect to a registered
security-based swap data repository, means the date six months after
the registration date.
    (m) Exchange Act means the Securities Exchange Act of 1934 (15
U.S.C. 78a, et seq.), as amended.
    (n) Foreign branch has the same meaning as in Sec.  240.3a71-
3(a)(1) of this chapter.
    (o) Indirect counterparty means a guarantor of a direct
counterparty's performance of any obligation under a security-based
swap.
    (p) Life cycle event means, with respect to a security-based swap,
any event that would result in a change in the information reported to
a registered security-based swap data repository under Sec.  242.901,
including a counterparty change resulting from an assignment or
novation; a partial or full termination of the security-based swap; a
change in the cash flows originally reported; for a security-based swap
that is not cleared, any change to the collateral agreement; or a
corporate action affecting a security or securities on which the
security-based swap is based (e.g., a merger, dividend, stock split, or
bankruptcy). Notwithstanding the above, a life cycle event shall not
include the scheduled expiration of the security-based swap, a
previously described and anticipated interest rate adjustment (such as
a quarterly interest rate adjustment), or other event that does not
result in any change to the contractual terms of the security-based
swap.
    (q) Non-U.S. person means a person that is not a U.S. person.
    (r) Parent means a legal person that controls a participant.
    (s) Participant means a person that is a counterparty to a
security-based swap that meets the criteria of Sec.  242.908(b).
    (t) Participant ID means the UIC assigned to a participant.
    (u) Phase-in period means the period immediately after a security-
based swap data repository has registered with the Commission during
which it is not required to disseminate security-based swap data
pursuant to an implementation schedule, as provided in Sec.  242.910.
    (v) Pre-enactment security-based swap means any security-based swap
executed before July 21, 2010 (the date of enactment of the Dodd-Frank
Act (Pub. L. 111-203, H.R. 4173)), the terms of which had not expired
as of that date.
    (w) Price means the price of a security-based swap transaction,
expressed in terms of the commercial conventions used in that asset
class.
    (x) Product ID means the UIC assigned to a security-based swap
instrument.
    (y) Publicly disseminate means to make available through the
Internet or other electronic data feed that is widely accessible and in
machine-readable electronic format.
    (z) Real time means, with respect to the reporting of security-
based swap information, as soon as technologically practicable, but in
no event later than 15 minutes after the time of execution of the
security-based swap transaction.
    (aa) Registered security-based swap data repository means a person
that is registered with the Commission as a security-based swap data
repository pursuant to section 13(n) of the Exchange Act (15 U.S.C.
78m(n)) and any rules or regulations thereunder.
    (bb) Registration date, with respect to a security-based swap data
repository, means the date on which the Commission registers the
security-based swap data repository, or, if the Commission registers
the security-based swap data repository before the effective date of
Sec. Sec.  242.900 through 242.911, the effective date of Sec. Sec.
242.900 through 242.911.
    (cc) Reporting side means the side of a security-based swap having
the duty to report information in accordance with Sec. Sec.  242.900
through 242.911 to a registered security-based swap data repository, or
if there is no registered security-based swap data repository that
would receive the information, to the Commission.
    (dd) Security-based swap instrument means each security-based swap
in the same asset class, with the same underlying reference asset,
reference issuer, or reference index.
    (ee) Side means a direct counterparty and any indirect counterparty
that guarantees the direct counterparty's performance of any obligation
under a security-based swap.
    (ff) Time of execution means the point at which the counterparties
to a security-based swap become irrevocably bound under applicable law.
    (gg) Trader ID means the UIC assigned to a natural person who
executes security-based swaps.
    (hh) Transaction conducted through a foreign branch has the same
meaning as in Sec.  240.3a71-3(a)(4) of this chapter.
    (ii) Transaction conducted within the United States has the same
meaning as in Sec.  240.3a71-3(a)(5) of this chapter.
    (jj) Transaction ID means the unique identification code assigned
by a registered security-based swap data repository to a specific
security-based swap.
    (kk) Transitional security-based swap means a security-based swap
executed on or after July 21, 2010, and before the effective reporting
date.
    (ll) Ultimate parent means a legal person that controls a
participant and that itself has no parent.
    (mm) Ultimate parent ID means the UIC assigned to an ultimate
parent of a participant.
    (nn) Unique Identification Code or UIC means the unique
identification code assigned to a person, unit of a person, or product
by or on behalf of an internationally recognized standards-

setting body that imposes fees and usage restrictions that are fair and
reasonable and not unreasonably discriminatory. If no standards-setting
body meets these criteria, a registered security-based swap data
repository shall assign all necessary UICs using its own methodology.
If a standards-setting body meets these criteria but has not assigned a
UIC to a particular person, unit of a person, or product, a registered
security-based swap data repository shall assign a UIC to that person,
unit of a person, or product using its own methodology.
    (oo) United States has the same meaning as in Sec.  240.3a71-
3(a)(9) of this chapter.
    (pp) U.S. person has the same meaning as in Sec.  240.3a71-3(a)(7)
of this chapter.

Sec.  242.901  Reporting obligations.

    (a) Reporting side. The reporting side for a security-based swap
shall be as follows:
    (1) If both sides of the security-based swap include a security-
based swap dealer, the sides shall select the reporting side.
    (2) If only one side of the security-based swap includes a
security-based swap dealer, that side shall be the reporting side.
    (3) If both sides of the security-based swap include a major
security-based swap participant, the sides shall select the reporting
side.
    (4) If one side of the security-based swap includes a major
security-based swap participant and the other side includes neither a
security-based swap dealer nor a major security-based swap participant,
the side including the major security-based swap participant shall be
the reporting side.
    (5) If neither side of the security-based swap includes a security-
based swap dealer or major security-based swap participant:
    (i) If both sides include a U.S. person or neither side includes a
U.S. person, the sides shall select the reporting side.
    (ii) If only one side includes a U.S. person, that side shall be
the reporting side.
    (b) Recipient of security-based swap information. For each
security-based swap for which it is the reporting side, the reporting
side shall provide the information required by Sec. Sec.  242.900
through 242.911 to a registered security-based swap data repository or,
if there is no registered security-based swap data repository that
would accept the information, to the Commission.
    (c) Primary trade information. For any security-based swap that
must be publicly disseminated pursuant to Sec. Sec.  242.902 and
242.908 and for which it is the reporting side, the reporting side
shall report the following information in real time. If a security-
based swap is required by Sec. Sec.  242.901 and 242.908 to be reported
but not publicly disseminated, the reporting side shall report the
following information no later than the time that the reporting side is
required to comply with paragraph (d) of this section:
    (1) The asset class of the security-based swap and, if the
security-based swap is an equity derivative, whether it is a total
return swap or is otherwise designed to offer risks and returns
proportional to a position in the equity security or securities on
which the security-based swap is based;
    (2) Information that identifies the security-based swap instrument
and the specific asset(s) or issuer(s) of any security on which the
security-based swap is based;
    (3) The notional amount(s), and the currenc(ies) in which the
notional amount(s) is expressed;
    (4) The date and time, to the second, of execution, expressed using
Coordinated Universal Time (UTC);
    (5) The effective date;
    (6) The scheduled termination date;
    (7) The price;
    (8) The terms of any fixed or floating rate payments, and the
frequency of any payments;
    (9) Whether or not the security-based swap will be cleared by a
clearing agency;
    (10) If both sides of the security-based swap include a security-
based swap dealer, an indication to that effect;
    (11) If applicable, an indication that the transaction does not
accurately reflect the market; and
    (12) If the security-based swap is customized to the extent that
the information provided in paragraphs (c)(1) through (11) of this
section does not provide all of the material information necessary to
identify such customized security-based swap or does not contain the
data elements necessary to calculate the price, an indication to that
effect.
    (d) Secondary trade information. (1) In addition to the information
required under paragraph (c) of this section, for each security-based
swap for which it is the reporting side, the reporting side shall
report:
    (i) The participant ID of each counterparty;
    (ii) As applicable, the broker ID, desk ID, and trader ID of the
direct counterparty on the reporting side;
    (iii) The amount(s) and currenc(ies) of any up-front payment(s) and
a description of the terms and contingencies of the payment streams of
each direct counterparty to the other;
    (iv) The title of any master agreement, or any other agreement
governing the transaction (including the title of any document
governing the satisfaction of margin obligations), incorporated by
reference and the date of any such agreement;
    (v) The data elements necessary for a person to determine the
market value of the transaction;
    (vi) If the security-based swap will be cleared, the name of the
clearing agency;
    (vii) If the security-based swap is not cleared, whether the
exception in Section 3C(g) of the Exchange Act (15 U.S.C. 78c-3(g)) was
invoked;
    (viii) If the security-based swap is not cleared, a description of
the settlement terms, including whether the security-based swap is
cash-settled or physically settled, and the method for determining the
settlement value; and
    (ix) The venue where the security-based swap was executed.
    (2) Any information required to be reported pursuant to paragraph
(d)(1) of this section must be reported promptly, but in no event later
than:
    (i) Fifteen minutes after the time of execution for a security-
based swap that is executed and confirmed electronically;
    (ii) Thirty minutes after the time of execution for a security-
based swap that is confirmed electronically but not executed
electronically; or
    (iii) Twenty-four hours after the time of execution for a security-
based swap that is not executed or confirmed electronically.
    (e) Duty to report any life cycle event of a security-based swap.
For any life cycle event, and any adjustment due to a life cycle event,
that results in a change to information previously reported pursuant to
paragraph (c), (d), or (i) of this section, the reporting side shall
promptly provide updated information reflecting such change to the
entity to which it reported the original transaction, using the
transaction ID, subject to the following exceptions:
    (1) If a reporting side ceases to be a counterparty to a security-
based swap due to an assignment or novation, the new side shall be the
reporting side following such assignment or novation, if the new side
includes a U.S. person, a security-based swap dealer, or a major
security-based swap participant.
    (2) If, following an assignment or novation, the new side does not
include a U.S. person, a security-based swap dealer, or a major
security-based swap participant, the other side shall be the reporting
side following such assignment or novation.

    (f) Time stamping incoming information. A registered security-based
swap data repository shall time stamp, to the second, its receipt of
any information submitted to it pursuant to paragraph (c), (d), (e), or
(i) of this section.
    (g) Assigning transaction ID. A registered security-based swap data
repository shall assign a transaction ID to each security-based swap.
    (h) Format of reported information. The reporting side shall
electronically transmit the information required under this section in
a format required by the registered security-based swap data
repository, and in accordance with any applicable policies and
procedures of the registered security-based swap data repository.
    (i) Reporting of pre-enactment and transitional security-based
swaps. With respect to any pre-enactment security-based swap or
transitional security-based swap, the reporting side shall report all
of the information required by paragraphs (c) and (d) of this section,
to the extent such information is available.

Sec.  242.902  Public dissemination of transaction reports.

    (a) General. Unless a security-based swap is a block trade or a
cross-border security-based swap that is required to be reported but
not publicly disseminated, a registered security-based swap data
repository shall publicly disseminate a transaction report of the
security-based swap immediately upon receipt of information about the
security-based swap, or upon re-opening following a period when the
registered security-based swap data repository was closed. The
transaction report shall consist of all the information reported
pursuant to Sec.  242.901, plus any indicator or indicators
contemplated by the registered security-based swap data repository's
policies and procedures that are required by Sec.  242.907.
    (b) Dissemination of block trades. A registered security-based swap
data repository shall publicly disseminate a transaction report of a
security-based swap that constitutes a block trade immediately upon
receipt of information about the block trade from the reporting side.
The transaction report shall consist of all the information reported by
the reporting side pursuant to Sec.  242.901(c), except for the
notional size, plus the transaction ID and an indicator that the report
represents a block trade. The registered security-based swap data
repository shall publicly disseminate a complete transaction report for
such block trade (including the transaction ID and the full notional
size) as follows:
    (1) If the security-based swap was executed on or after 05:00 UTC
and before 23:00 UTC of the same day, the transaction report (including
the transaction ID and the full notional size) shall be disseminated at
07:00 UTC of the following day.
    (2) If the security-based swap was executed on or after 23:00 UTC
and up to 05:00 UTC of the following day, the transaction report
(including the transaction ID and the full notional size) shall be
disseminated at 13:00 UTC of that following day.
    (3) Notwithstanding the foregoing, if a registered security-based
swap data repository is in normal closing hours or special closing
hours at a time when it would be required to disseminate information
about a block trade pursuant to this section, the registered security-
based swap data repository shall instead disseminate information about
the block trade immediately upon re-opening.
    (c) Non-disseminated information. A registered security-based swap
data repository shall not disseminate:
    (1) The identity of either counterparty to a security-based swap;
    (2) With respect to a security-based swap that is not cleared at a
registered clearing agency and that is reported to the registered
security-based swap data repository, any information disclosing the
business transactions and market positions of any person; or
    (3) Any information regarding a security-based swap reported
pursuant to Sec.  242.901(i).
    (d) Temporary restriction on other market data sources. No person
other than a registered security-based swap data repository shall make
available to one or more persons (other than a counterparty)
transaction information relating to a security-based swap before the
earlier of 15 minutes after the time of execution of the security-based
swap; or the time that a registered security-based swap data repository
publicly disseminates a report of that security-based swap.

Sec.  242.903  Coded information.

    The reporting side may provide information to a registered
security-based swap data repository pursuant to Sec.  242.901 and a
registered security-based swap data repository may publicly disseminate
information pursuant to Sec.  242.902 using codes in place of certain
data elements, provided that the information necessary to interpret
such codes is widely available on a non-fee basis.

Sec.  242.904  Operating hours of registered security-based swap data
repositories.

    A registered security-based swap data repository shall have systems
in place to continuously receive and disseminate information regarding
security-based swaps pursuant to Sec. Sec.  242.900 through 242.911,
subject to the following exceptions:
    (a) A registered security-based swap data repository may establish
normal closing hours during periods when, in its estimation, the U.S.
market and major foreign markets are inactive. A registered security-
based swap data repository shall provide reasonable advance notice to
participants and to the public of its normal closing hours.
    (b) A registered security-based swap data repository may declare,
on an ad hoc basis, special closing hours to perform system maintenance
that cannot wait until normal closing hours. A registered security-
based swap data repository shall, to the extent reasonably possible
under the circumstances, avoid scheduling special closing hours during
periods when, in its estimation, the U.S. market and major foreign
markets are most active; and provide reasonable advance notice of its
special closing hours to participants and to the public.
    (c) During normal closing hours, and to the extent reasonably
practicable during special closing hours, a registered security-based
swap data repository shall have the capability to receive and hold in
queue information regarding security-based swaps that has been reported
pursuant to Sec. Sec.  242.900 through 242.911.
    (d) When a registered security-based swap data repository re-opens
following normal closing hours or special closing hours, it shall
disseminate transaction reports of security-based swaps held in queue,
in accordance with the requirements of Sec.  242.902.
    (e) If a registered security-based swap data repository could not
receive and hold in queue transaction information that was required to
be reported pursuant to Sec. Sec.  242.900 through 242.911, it must
immediately upon re-opening send a message to all participants that it
has resumed normal operations. Thereafter, any participant that had an
obligation to report information to the registered security-based swap
data repository pursuant to Sec. Sec.  242.900 through 242.911, but
could not do so because of the registered security-based swap data
repository's inability to receive and hold in queue data, must
immediately report the information to the registered security-based
swap data repository.

Sec.  242.905  Correction of errors in security-based swap information.

    (a) Duty of counterparties to correct. Any counterparty to a
security-based swap that discovers an error in information previously
reported pursuant to Sec. Sec.  242.900 through 242.911 shall correct
such error in accordance with the following procedures:
    (1) If a side that was not the reporting side for a security-based
swap transaction discovers an error in the information reported with
respect to such security-based swap, the counterparty shall promptly
notify the reporting side of the error; and
    (2) If the reporting side for a security-based swap transaction
discovers an error in the information reported with respect to a
security-based swap, or receives notification from its counterparty of
an error, the reporting side shall promptly submit to the entity to
which the security-based swap was originally reported an amended report
pertaining to the original transaction report. If the reporting side
reported the initial transaction to a registered security-based swap
data repository, the reporting side shall submit an amended report to
the registered security-based swap data repository in a manner
consistent with the policies and procedures contemplated by Sec.
242.907(a)(3).
    (b) Duty of security-based swap data repository to correct. A
registered security-based swap data repository shall:
    (1) Upon discovery of the error or receipt of a notice of the error
from the reporting side, verify the accuracy of the terms of the
security-based swap and, following such verification, promptly correct
the erroneous information regarding such security-based swap contained
in its system; and
    (2) If such erroneous information relates to a security-based swap
that the registered security-based swap data repository previously
disseminated and falls into any of the categories of information
enumerated in Sec.  242.901(c), publicly disseminate a corrected
transaction report of the security-based swap promptly following
verification of the trade by the counterparties to the security-based
swap, with an indication that the report relates to a previously
disseminated transaction.

Sec.  242.906  Other duties of participants and guarantors.

    (a) Reporting by non-reporting-side. A registered security-based
swap data repository shall identify any security-based swap reported to
it for which the registered security-based swap data repository does
not have the participant ID and (if applicable) the broker ID, desk ID,
and trader ID of each direct counterparty. Once a day, the registered
security-based swap data repository shall send a report to each
participant identifying, for each security-based swap to which that
participant is a counterparty, the security-based swap(s) for which the
registered security-based swap data repository lacks participant ID and
(if applicable) broker ID, desk ID, and trader ID. A participant that
receives such a report shall provide the missing information to the
registered security-based swap data repository within 24 hours.
    (b) Duty to provide ultimate parent and affiliate information. Each
participant of a registered security-based swap data repository shall
provide to the registered security-based swap data repository
information sufficient to identify its ultimate parent(s) and any
affiliate(s) of the participant that also are participants of the
registered security-based swap data repository, using ultimate parent
IDs and participant IDs. A participant shall promptly notify the
registered security-based swap data repository of any changes to that
information.
    (c) Policies and procedures of security-based swap dealers and
major security-based swap participants. Each participant that is a
security-based swap dealer or major security-based swap participant
shall establish, maintain, and enforce written policies and procedures
that are reasonably designed to ensure that it complies with any
obligations to report information to a registered security-based swap
data repository in a manner consistent with Sec. Sec.  242.900 through
242.911 and the registered security-based swap data repository's
applicable policies and procedures. Each such participant shall review
and update its policies and procedures at least annually.

Sec.  242.907  Policies and procedures of registered security-based
swap data repositories.

    (a) General policies and procedures. With respect to the receipt,
reporting, and dissemination of data pursuant to Sec. Sec.  242.900
through 242.911, a registered security-based swap data repository shall
establish and maintain written policies and procedures:
    (1) That enumerate the specific data elements of a security-based
swap or a life cycle event that the reporting side must report, which
shall include, at a minimum, the data elements specified in Sec.
242.901(c) and (d);
    (2) That specify one or more acceptable data formats (each of which
must be an open-source structured data format that is widely used by
participants), connectivity requirements, and other protocols for
submitting information;
    (3) For specifying how reporting sides are to report corrections to
previously submitted information, making corrections to information in
its records that is subsequently discovered to be erroneous, and
applying an appropriate indicator to any transaction report required to
be disseminated by Sec.  242.905(b)(2) that the report relates to a
previously disseminated transaction;
    (4) Describing how reporting sides shall report and, consistent
with the enhancement of price discovery, how the registered security-
based swap data repository shall publicly disseminate, reports of, and
adjustments due to, life cycle events; security-based swap transactions
that do not involve an opportunity to negotiate any material terms,
other than the counterparty; and any other security-based swap
transactions that, in the estimation of the registered security-based
swap data repository, do not accurately reflect the market;
    (5) For assigning:
    (i) A transaction ID to each security-based swap that is reported
to it; and
    (ii) UICs established by or on behalf of an internationally
recognized standards-setting body that imposes fees and usage
restrictions that are fair and reasonable and not unreasonably
discriminatory (or, if no standards-setting body meets these criteria
or a standards-setting body meets these criteria but has not assigned a
UIC to a particular person, unit of a person, or product, using its own
methodology); and
    (6) For periodically obtaining from each participant information
that identifies the participant's ultimate parent(s) and any
participant(s) with which the participant is affiliated, using ultimate
parent IDs and participant IDs.
    (b) Policies and procedures regarding block trades. (1) A
registered security-based swap data repository shall establish and
maintain written policies and procedures for calculating and
publicizing block trade thresholds for all security-based swap
instruments reported to the registered security-based swap data
repository, in accordance with the criteria and formula for determining
block size as specified by the Commission.
    (2) Exceptions. Notwithstanding the above, a registered security-
based swap data repository shall not designate as a block trade any
security-based swap:
    (i) That is an equity total return swap or is otherwise designed to
offer risks and returns proportional to a position in

the equity security or securities on which the security-based swap is
based; or
    (ii) Contemplated by Section 13(m)(1)(C)(iv) of the Exchange Act
((15 U.S.C. 78m(m)(1)(C)(iv)).
    (c) Public availability of policies and procedures. A registered
security-based swap data repository shall make the policies and
procedures required by Sec. Sec.  242.900 through 242.911 publicly
available on its Web site.
    (d) Updating of policies and procedures. A registered security-
based swap data repository shall review, and update as necessary, the
policies and procedures required by Sec. Sec.  242.900 through 242.911
at least annually. Such policies and procedures shall indicate the date
on which they were last reviewed.
    (e) A registered security-based swap data repository shall have the
capacity to provide to the Commission, upon request, information or
reports related to the timeliness, accuracy, and completeness of data
reported to it pursuant to Sec. Sec.  242.900 through 242.911 and the
registered security-based swap data repository's policies and
procedures thereunder.

Sec.  242.908  Cross-border matters.

    (a) Application of Regulation SBSR to cross-border transactions--
(1) Regulatory reporting. A reporting side shall report a security-
based swap if:
    (i) The security-based swap is a transaction conducted within the
United States;
    (ii) There is a direct or indirect counterparty that is a U.S.
person on either side of the transaction;
    (iii) There is a direct or indirect counterparty that is a
security-based swap dealer or major security-based swap participant on
either side of the transaction; or
    (iv) The security-based swap is cleared through a clearing agency
having its principal place of business in the United States.
    (2) Public dissemination. A security-based swap shall be subject to
public dissemination if:
    (i) The security-based swap is a transaction conducted within the
United States;
    (ii) There is a direct or indirect counterparty that is a U.S.
person on each side of the transaction;
    (iii) At least one direct counterparty is a U.S. person (except in
the case of a transaction conducted through a foreign branch);
    (iv) One side includes a U.S. person and the other side includes a
non-U.S. person that is a security-based swap dealer; or
    (v) The security-based swap is cleared through a clearing agency
having its principal place of business in the United States.
    (b) Limitation on counterparty duties. Notwithstanding any other
provision of Sec. Sec.  242.900 through 242.911, a counterparty to a
security-based swap shall not incur any obligation under Sec. Sec.
242.900 through 242.911 unless it is:
    (1) A U.S. person;
    (2) A security-based swap dealer or major security-based swap
participant; or
    (3) A counterparty to a transaction conducted within the United
States.
    (c) Substituted compliance--(1) General. Compliance with the
regulatory reporting and public dissemination requirements in sections
13(m) and 13A of the Act (15 U.S.C. 78m(m) and 78m-1), and the rules
and regulations thereunder, may be satisfied by compliance with the
rules of a foreign jurisdiction that is the subject of a Commission
order described in paragraph (c)(2) of this section, provided that with
respect to at least one of the direct counterparties to the security-
based swap:
    (i) Such counterparty is either a non-U.S. person or a foreign
branch; and
    (ii) The security-based swap transaction is not solicited,
negotiated, or executed by a person within the United States on behalf
of such counterparty.
    (2) Procedure. (i) The Commission may, conditionally or
unconditionally, by order, make a substituted compliance determination
regarding regulatory reporting and public dissemination of security-
based swaps with respect to a foreign jurisdiction if that
jurisdiction's requirements for the regulatory reporting and public
dissemination of security-based swaps are comparable to otherwise
applicable requirements.
    (ii) Any person that executes security-based swaps that would, in
the absence of a substituted compliance order, be required to be
reported pursuant to Sec. Sec.  242.900 through 242.911 may file an
application, pursuant to the procedures set forth in Sec.  240.0-13 of
this chapter, requesting that the Commission make a substituted
compliance determination regarding regulatory reporting and public
dissemination with respect to a foreign jurisdiction the rules of which
also would require reporting and public dissemination of those
security-based swaps. Such application shall include the reasons
therefor and such other information as the Commission may request.
    (iii) In making such a substituted compliance determination, the
Commission shall take into account such factors as the Commission
determines are appropriate, such as the scope and objectives of the
relevant foreign regulatory requirements, as well as the effectiveness
of the supervisory compliance program administered, and the enforcement
authority exercised, by the foreign financial regulatory authority to
support oversight of its regulatory reporting and public dissemination
system for security-based swaps. The Commission shall not make such a
substituted compliance determination unless it finds that:
    (A) The data elements that are required to be reported pursuant to
the rules of the foreign jurisdiction are comparable to those required
to be reported pursuant to Sec.  242.901;
    (B) The rules of the foreign jurisdiction require the security-
based swap to be reported and publicly disseminated in a manner and a
timeframe comparable to those required by Sec. Sec.  242.900 through
242.911;
    (C) The Commission has direct electronic access to the security-
based swap data held by a trade repository or foreign regulatory
authority to which security-based swaps are reported pursuant to the
rules of that foreign jurisdiction; and
    (D) Any trade repository or foreign regulatory authority in the
foreign jurisdiction that receives and maintains required transaction
reports of security-based swaps pursuant to the laws of that foreign
jurisdiction is subject to requirements regarding data collection and
maintenance; systems capacity, resiliency, and security; and
recordkeeping that are comparable to the requirements imposed on
security-based swap data repositories by Sec. Sec.  240.13n-5 through
240.13n-7 of this chapter.
    (iv) Before issuing a substituted compliance order pursuant to this
section, the Commission shall have entered into a supervisory and
enforcement memorandum of understanding or other arrangement with the
relevant foreign financial regulatory authority or authorities under
such foreign financial regulatory system addressing oversight and
supervision of the applicable security-based swap market under the
substitute compliance determination.
    (v) The Commission may, on its own initiative, modify or withdraw
such order at any time, after appropriate notice and opportunity for
comment.

Sec.  242.909  Registration of security-based swap data repository as a
securities information processor.

    A registered security-based swap data repository shall also
register with the

Commission as a securities information processor on Form SIP (Sec.
249.1001 of this chapter).

Sec.  242.910  Implementation of security-based swap reporting and
dissemination.

    (a) Reporting of pre-enactment security-based swaps. The reporting
side shall report to a registered security-based swap data repository
any pre-enactment security-based swaps no later than January 12, 2012
(180 days after the effective date of the Dodd-Frank Act (Pub. L. 111-
203, H.R. 4173)).
    (b) Phase-in of compliance dates. A registered security-based swap
data repository and its participants shall be subject to the following
phased-in compliance schedule:
    (1) Phase 1, six months after the registration date (i.e., the
effective reporting date):
    (i) Reporting sides shall report to the registered security-based
swap data repository any transitional security-based swaps.
    (ii) With respect to any security-based swap executed on or after
the effective reporting date, reporting sides shall comply with Sec.
242.901.
    (iii) Participants and the registered security-based swap data
repository shall comply with Sec.  242.905 (except with respect to
public dissemination) and Sec.  242.906(a) and (b).
    (iv) Participants that are security-based swap dealers or major
security-based swap participants shall comply with Sec.  242.906(c).
    (2) Phase 2, nine months after the registration date: Wave 1 of
public dissemination--The registered security-based swap data
repository shall comply with Sec. Sec.  242.902 and 242.905 (with
respect to public dissemination of corrected transaction reports) for
50 security-based swap instruments.
    (3) Phase 3, 12 months after the registration date: Wave 2 of
public dissemination--The registered security-based swap data
repository shall comply with Sec. Sec.  242.902 and 242.905 (with
respect to public dissemination of corrected transaction reports) for
an additional 200 security-based swap instruments.
    (4) Phase 4, 18 months after the registration date: Wave 3 of
public dissemination--All security-based swaps received by the
registered security-based swap data repository shall be treated in a
manner consistent with Sec. Sec.  242.902, 242.905, and 242.908.

Sec.  242.911  Prohibition during phase-in period.

    A reporting side shall not report a security-based swap to a
registered security-based swap data repository in a phase-in period
described in Sec.  242.910 during which the registered security-based
swap data repository is not yet required or able to publicly
disseminate transaction reports for that security-based swap instrument
unless:
    (a) The security-based swap is also reported to a registered
security-based swap data repository that is disseminating transaction
reports for that security-based swap instrument consistent with Sec.
242.902; or
    (b) No other registered security-based swap data repository is able
to receive, hold, and publicly disseminate transaction reports
regarding that security-based swap instrument.

PART 249--FORMS, SECURITIES EXCHANGE ACT OF 1934

0
11. The authority citation for Part 249 continues to read, in part, as
follows:

    Authority: 15 U.S.C. 78a et seq. and 7201 et seq.; 12 U.S.C.
5461 et seq.; and 18 U.S.C. 1350, unless otherwise noted.
* * * * *
0
12. Section 249.1600, Sec.  249.1600a, and Sec.  249.1600b as
previously proposed to be added at 76 FR 65824, Oct. 24, 2011, are
further revised to read as follows:

Subpart Q--Registration of Security-Based Swap Dealers and Major
Security-Based Swap Participants

Sec.
249.1600 Form SBSE, for application for registration as a security-
based swap dealer or major security-based swap participant or to
amend such an application for registration.
249.1600a Form SBSE-A, for application for registration as a
security-based swap dealer or major security-based swap participant
or to amend such an application for registration by firms registered
or registering with the Commodity Futures Trading Commission as a
swap dealer or major swap participant that are not also registered
or registering with the Commission as a broker or dealer.
249.1600b Form SBSE-BD, for application for registration as a
security-based swap dealer or major security-based swap participant
or to amend such an application for registration by firms registered
or registering with the Commission as a broker or dealer.
* * * * *

Sec.  249.1600  Form SBSE, for application for registration as a
security-based swap dealer or major security-based swap participant or
to amend such an application for registration.

    This form shall be used for application for registration as a
security-based swap dealer or major security-based swap participant by
firms that are not registered with the Commission as a broker or dealer
and that are not registered or registering with the Commodity Futures
Trading Commission as a swap dealer or major swap participant, pursuant
to Section 15F(b) of the Securities Exchange Act of 1934 (15 U.S.C.
78o-10(b)) and to amend such an application for registration.

Sec.  249.1600a  Form SBSE-A, for application for registration as a
security-based swap dealer or major security-based swap participant or
to amend such an application for registration by firms registered or
registering with the Commodity Futures Trading Commission as a swap
dealer or major swap participant that are not also registered or
registering with the Commission as a broker or dealer.

    This form shall be used instead of Form SBSE (Sec.  249.1600) to
apply for registration as a security-based swap dealer or major
security-based swap participant by firms that are not registered or
registering with the Commission as a broker or dealer but that are
registered or registering with the Commodity Futures Trading Commission
as a swap dealer or major swap participant, pursuant to Section 15F(b)
of the Securities Exchange Act of 1934 (15 U.S.C. 78o-10(b)) and to
amend such an application for registration. An entity that is
registered or registering with the Commission as a broker or dealer and
is also registered or registering with the Commodity Futures Trading
Commission as a swap dealer or major swap participant shall apply for
registration as a security-based swap dealer or major security-based
swap participant on Form SBSE-BD (Sec.  249.1600b) and not on this Form
SBSE-A.

Sec.  249.1600b  Form SBSE-BD, for application for registration as a
security-based swap dealer or major security-based swap participant or
to amend such an application for registration by firms registered or
registering with the Commission as a broker or dealer.

    This form shall be used instead of either Form SBSE (Sec.
249.1600) or SBSE-A (Sec.  249.1600a) to apply for registration as a
security-based swap dealer or major security-based swap participant
solely by firms registered or registering with the Commission as a
broker or dealer, pursuant to Section 15F(b) of the Securities Exchange
Act of 1934 (15 U.S.C. 78o-10(b)) and to amend such an application for
registration. An entity that is registered or registering with the
Commission as a broker or dealer and is also registered or registering
with the Commodity Futures Trading Commission as a swap dealer or major
swap participant, the entity shall apply for registration as a
security-based swap dealer or major security-based swap participant on
this Form SBSE-BD and not on Form SBSE-A.

    Note: The following Appendices will not appear in the Code of
Federal Regulations.

Appendix A: Application of Subtitle B of Title VII in the Cross-Border
Context

    The following tables summarize the Commission's proposed
approach to applying requirements in Subtitle B of Title VII of the
Dodd-Frank Act in the cross-border context.\1972\ Specifically, as
explained more fully in the main body of the release, the tables
show how the entity-level requirements in Title VII apply to various
dealing entities (identified in row 1 of each of the tables).\1973\
The tables also show how various transaction-level requirements in
Title VII apply to transactions between such dealing entities and
various transaction counterparties (identified in row 8 of each of
the tables), depending on the location of the dealer or the dealer's
agent (identified in row 7). For the sake of completeness, these
tables may include transaction scenarios that are unlikely to occur
in practice.
---------------------------------------------------------------------------

    \1972\ The tables in this appendix are only a summary of the
rules and interpretations proposed in this release and are provided
for ease of reference. They do not supersede, and should be read in
conjunction with, the proposed rules and interpretations discussed
in the release. All defined terms used in the tables have the same
meaning as set forth in the release, unless otherwise indicated.
    \1973\ Tables III and V also apply to non-U.S. dealers and other
non-U.S. market participants.
---------------------------------------------------------------------------

Guide to Reading the Title VII Tables

    The following provides a guide to reading the tables below.
     ``Yes''--Indicates that the Commission is proposing to
apply a particular transaction-level requirement in Title VII to a
security-based swap transaction between the dealing entity
identified in row 1 and the transaction counterparty identified in
row 8, or that the Commission is proposing to apply a particular
entity-level requirement in Title VII to the dealing entity
identified in row 1, and that substituted compliance would not be
permitted.
     ``No''--Indicates that the Commission is not proposing
to apply the particular Title VII requirement.
     ``N/A''--Indicates that the Title VII requirement is
not applicable because it applies only to registered security-based
swap dealers.
     ``Substituted Compliance'' (or ``Sub Comp'')--Indicates
that the Commission is proposing to apply the Title VII requirement,
but that we also are proposing to establish a policy and procedural
framework under which we would consider permitting compliance with
comparable regulatory requirements in a foreign jurisdiction to
substitute for compliance with requirements of the Exchange Act, and
the rules and regulations thereunder, relating to security-based
swaps.
     ``Location of Dealer/Agent''--Refers to the location of
the dealing entity booking the transaction or its agent.
    [cir] Table I describes the application of Title VII to
registered U.S. security-based swap dealers and is divided between
security-based swap transactions that are conducted:
    [ssquf] Other than through a U.S. bank's foreign branch (columns
2 through 6); or
    [ssquf] Through a U.S. bank's foreign branch (columns 7 through
11).\1974\
---------------------------------------------------------------------------

    \1974\ The transactions identified in columns 7 and 8 of Table I
are transactions in which a foreign branch of a U.S. bank is the
counterparty to the transaction, but such transactions would not
fall within the definition of ``transaction conducted through a
foreign branch'' in proposed Rule 3a71-3(a)(4) under the Exchange
Act.
---------------------------------------------------------------------------

    [cir] Tables II-V are divided between transactions in which the
dealing entity or its agent is:
    [ssquf] ``Within the U.S.''--Indicates that a person within the
United States acting on behalf of such non-U.S. dealer has
solicited, negotiated, executed, or booked the transaction within
the United States; or
    [ssquf] ``Outside the U.S.''--Indicates that such non-U.S.
dealer has solicited, negotiated, executed, and booked the
transaction, without involving any person within the United States
acting on its behalf.\1975\
---------------------------------------------------------------------------

    \1975\ A transaction in which the non-U.S. dealing entity and
its agent are outside the United States may still be a ``transaction
conducted within the United States,'' as defined in proposed Rule
3a71-3(a)(5) under the Exchange Act. For example, the non-U.S.
dealing entity may direct its solicitation activity to a U.S. or
non-U.S. person counterparty located within the United States.
---------------------------------------------------------------------------

     ``Transaction counterparty''--Refers to the
counterparty with which the dealing entity (identified in row 1)
enters into a transaction and whose counterparty credit risk the
dealing entity ultimately bears. Therefore, the transaction
counterparty is the booking location or booking entity of the
trading counterparty with which the dealing entity transacts. A
transaction counterparty may use personnel or an agent in a
different location than the booking location or booking entity to
negotiate the transaction with the dealing entity. The five
transaction counterparties identified in the tables are as follows:
    [cir] ``U.S. Person (other than Foreign Branch)''--Indicates the
transaction counterparty of the dealing entity (identified in row 1)
is a U.S. person (other than a foreign branch of a U.S. bank);
    [cir] ``Non-U.S. Person Within the U.S.''--Indicates the
transaction counterparty of the dealing entity (identified in row 1)
is a non-U.S. person and the security-based swap transaction is
conducted (i.e., solicited, negotiated, executed, or booked) by or
on behalf of the non-U.S. person transaction counterparty within the
United States. This includes a non-U.S. person counterparty that
uses its own personnel in its U.S. branch or office to conduct the
transaction or that uses a U.S. affiliate or third party acting as
its agent to conduct the transaction on its behalf; \1976\
---------------------------------------------------------------------------

    \1976\ If the non-U.S. person transaction counterparty is a
registered security-based swap dealer, see Table II or IV for
application of other transaction-level requirements. If the non-U.S.
person transaction counterparty is an unregistered dealer or market
participant that receives a U.S. guarantee, see Table II or III for
application of other transaction-level requirements.
---------------------------------------------------------------------------

    [cir] ``Foreign Branch of U.S. Bank''--Indicates the transaction
counterparty of the dealing entity (identified in row 1) is a
foreign branch of a U.S. bank and the security-based swap
transaction is conducted (i.e., solicited, negotiated, executed, and
booked) by or on behalf of such foreign branch without involving any
person within the United States acting on behalf of the foreign
branch;
    [cir] ``Non-U.S. Person w/U.S. Guarantee Outside the U.S.''--
Indicates the transaction counterparty of the dealing entity
(identified in row 1) is a non-U.S. person whose performance under
the security-based swap is guaranteed by a U.S. person (the ``U.S.
Guarantor'') such that its counterparty has direct recourse to the
U.S. Guarantor for performance of obligations owed by such non-U.S.
person (i.e., the guaranteed entity) under the security-based swap,
and the security-based swap transaction is conducted (i.e.,
solicited, negotiated, executed, and booked) by or on behalf of such
non-U.S. person counterparty without involving any person within the
United States acting on behalf of such non-U.S. person; and
    [cir] ``Non-U.S. Person w/o U.S. Guarantee Outside the U.S.''--
Indicates the transaction counterparty of the dealing entity
(identified in row 1) is a non-U.S. person whose performance under
the security-based swap is not guaranteed by a U.S. person, and the
security-based swap transaction is conducted (i.e., solicited,
negotiated, executed, and booked), by or on behalf of such non-U.S.
person counterparty, without involving any person within the United
States acting on behalf of such non-U.S. person.\1977\
---------------------------------------------------------------------------

    \1977\ If the non-U.S. person counterparty is a registered
security-based swap dealer, see Table IV for application of other
transaction-level requirements.
---------------------------------------------------------------------------

BILLING CODE 8011-01-P

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BILLING CODE 8011-01-C

Appendix B: Registration of Security-Based Swap Dealers

    This table shows the Commission's proposed approach to applying
the de minimis threshold in the security-based swap dealer
definition in the cross-border context.\1978\ Specifically, it
indicates whether a potential security-based swap dealer listed
along the top of the table would be required to count a transaction
conducted in a dealing capacity with the various counterparties
listed along the left hand column of the table toward its de minimis
threshold.

    \1978\ This table in this appendix is only a summary of the
rules and interpretations proposed in this release and is provided
for ease of reference. It does not supersede, and should be read in
conjunction with, the proposed rules and interpretations discussed
in the release. All defined terms used in this table have the same
meaning as set forth in the release, unless otherwise indicated.

---------------------------------------------------------------------------

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Appendix C: Re-Proposal of Registration Forms

    Form SBSE
    Form SBSE-A
    Form SBSE-BD

[GRAPHIC] [TIFF OMITTED] TP23MY13.011

Form SBSE Instructions

A. General Instructions

    1. FORM--Form SBSE is the Application for Registration as either a
Security-based Swap Dealer or Major Security-based Swap Participant
(collectively, ``SBS Entities''). SBS Entities that are not registered
with the Commission as broker-dealers nor registered or registering
with the Commodity Futures Trading Commission (``CFTC'') as a swap
dealer or major swap participant must file this form to register with
the Securities and Exchange Commission. An applicant must also file
Schedules A, B, D, E, F, and G as appropriate. There is no Schedule C.
    2. ELECTRONIC FILING--The applicant must file Form SBSE through the
EDGAR system, and must utilize the EDGAR Filer Manual (as defined in 17
CFR 232. 11) to file and amend Form SBSE electronically to assure the
timely acceptance and processing of those filings.\1979\
---------------------------------------------------------------------------

    \1979\ As discussed in the release proposing this Form, the
Commission is currently developing a system to facilitate receipt of
applications electronically. More specific instructions on how to
file this Form may be included in the final version of the Form.
---------------------------------------------------------------------------

    3. UPDATING--By law, the applicant must promptly update Form SBSE
information by submitting amendments whenever the information on file
becomes inaccurate or incomplete for any reason [17 CFR 240.15Fb2-2].
In addition, the applicant must update any incomplete or inaccurate
information contained on Form SBSE prior to filing a notice of
withdrawal from registration on Form SBSE-W [17 CFR 15Fb3-2(a)].
    4. CONTACT EMPLOYEE--The individual listed as the contact employee
must be authorized to receive all compliance information,
communications, and mailings, and be responsible for disseminating it
within the applicant's organization.
    5. FEDERAL INFORMATION LAW AND REQUIREMENTS--An agency may not
conduct or sponsor, and a person is not required to respond to, a
collection of information unless it displays a currently valid control
number. Sections

15F, 17(a) and 23(a) of the Exchange Act authorize the SEC to collect
the information on this form from registrants. See 15 U.S.C. Sec. Sec.
78o-10, 78q and 78w. Filing of this form is mandatory; however, the
social security number information, which aids in identifying the
applicant, is voluntary. The principal purpose of this Form is to
permit the Commission to determine whether the applicant meets the
statutory requirements to engage in the security-based swap business.
The Commission maintain[s] a file of the information on this form and
will make certain information collected via the form publicly
available. Any member of the public may direct to the Commission any
comments concerning the accuracy of the burden estimate on this Form,
and any suggestions for reducing this burden. This collection of
information has been reviewed by the Office of Management and Budget in
accordance with the clearance requirements of 44 U.S.C. Sec.  3507. The
information contained in this form is part of a system of records
subject to the Privacy Act of 1974, as amended. The Securities and
Exchange Commission has published in the Federal Register the Privacy
Act Systems of Records Notice for these records.

B. Filing Instructions

    1. FORMAT
    a. Sections 1-14 must be answered and all fields requiring a
response must be completed before the filing will be accepted.
    b. Failure to follow instructions or properly complete the form may
result in the application being delayed or rejected.
    c. Applicant must complete the execution screen certifying that
Form SBSE and amendments thereto have been executed properly and that
the information contained therein is accurate and complete.
    d. To amend information, the applicant must update the appropriate
Form SBSE screens.
    e. A paper copy, with original signatures, of the initial Form SBSE
filing and amendments to Disclosure Reporting Pages (DRPs) must be
retained by the applicant and be made available for inspection upon a
regulatory request.
    2. DISCLOSURE REPORTING PAGE (DRP)--Information concerning the
applicant or control affiliate that relates to the occurrence of an
event reportable under Item 12 must be provided on the applicant's
appropriate DRP.
    3. DIRECT AND INDIRECT OWNERS--Amend the Direct Owners and
Executive Officers screen and the Indirect Owners screen when changes
in ownership occur.
    The mailing address for questions and correspondence is:

Explanation of Terms

(The Following Terms are Italicized Throughout This Form.)

1. General

    APPLICANT--The security-based swap dealer or major security-based
swap participant applying on or amending this form.
    CONTROL--The power, directly or indirectly, to direct the
management or policies of a company, whether through ownership of
securities, by contract, or otherwise. Any person that (i) is a
director, general partner or officer exercising executive
responsibility (or having similar status or functions); (ii) directly
or indirectly has the right to vote 25% or more of a class of a voting
security or has the power to sell or direct the sale of 25% or more of
a class of voting securities; or (iii) in the case of a partnership,
has the right to receive upon dissolution, or has contributed, 25% or
more of the capital, is presumed to control that company.
    STATE--Any state of the United States, the District of Columbia,
the Commonwealth of Puerto Rico, the U.S. Virgin Islands, any other
territory of the United States, or any subdivision or regulatory body
thereof.
    PERSON--An individual, partnership, corporation, trust, or other
organization.
    SELF-REGULATORY ORGANIZATION (SRO)--Any national securities or
futures exchange, registered securities or futures association,
registered clearing agency, or derivatives clearing organization.
    SUCCESSOR--The term ``successor'' is defined to be an unregistered
entity that assumes or acquires substantially all of the assets and
liabilities, and that continues the business of, a predecessor
security-based swap dealer or major security-based swap participant
that ceases its security-based swap activities. [See Exchange Act Rule
15Fb2-5 (17 CFR 240.15Fb2-5]

2. FOR THE PURPOSE OF ITEM 12 AND THE CORRESPONDING DISCLOSURE
REPORTING PAGES (DRPs)

    CHARGED--Being accused of a crime in a formal complaint,
information, or indictment (or equivalent formal charge).
    CONTROL AFFILIATE--A person named in Items 10 or 11 as a control
person or any other individual or organization that directly or
indirectly controls, is under common control with, or is controlled by,
the applicant, including any current employee of the applicant except
one performing only clerical, administrative, support or similar
functions, or who, regardless of title, performs no executive duties or
has no senior policy making authority.
    ENJOINED--Includes being subject to a mandatory injunction,
prohibitory injunction, preliminary injunction, or a temporary
restraining order.
    FELONY--For jurisdictions that do not differentiate between a
felony and a misdemeanor, a felony is an offense punishable by a
sentence of at least one year imprisonment and/or a fine of at least
$1,000. The term also includes a general court martial.
    FOUND--Includes adverse final actions, including consent decrees in
which the respondent has neither admitted nor denied the findings, but
does not include agreements, deficiency letters, examination reports,
memoranda of understanding, letters of caution, admonishments, and
similar informal resolutions of matters.
    INVESTMENT OR INVESTMENT-RELATED--Pertaining to securities,
commodities, banking, savings association activities, credit union
activities, insurance, or real estate (including, but not limited to,
acting as or being associated with a broker-dealer, municipal
securities dealer, government securities broker or dealer, issuer,
investment company, investment adviser, futures sponsor, bank,
security-based swap dealer, major security-based swap participant,
savings association, credit union, insurance company, or insurance
agency).
    INVOLVED--Doing an act or aiding, abetting, counseling, commanding,
inducing, conspiring with or failing reasonably to supervise another in
doing an act.
    MINOR RULE VIOLATION--A violation of a self-regulatory organization
rule that has been designated as ``minor'' pursuant to a plan approved
by the SEC or CFTC. A rule violation may be designated as ``minor''
under a plan if the sanction imposed consists of a fine of $2,500 or
less, and if the sanctioned person does not contest the fine. (Check
with the appropriate self-regulatory organization to determine if a
particular rule violation has been designated as ``minor'' for these
purposes).
    MISDEMEANOR--For jurisdictions that do not differentiate between a
felony and a misdemeanor, a misdemeanor is an offense punishable by a
sentence of less than one year imprisonment and/or a fine of less than

$1,000. The term also includes a special court martial.
    ORDER--A written directive issued pursuant to statutory authority
and procedures, including orders of denial, suspension, or revocation;
does not include special stipulations, undertakings or agreements
relating to payments, limitations on activity or other restrictions
unless they are included in an order.
    PROCEEDING--Includes a formal administrative or civil action
initiated by a governmental agency, self-regulatory organization or a
foreign financial regulatory authority; a felony criminal indictment or
information (or equivalent formal charge); or a misdemeanor criminal
information (or equivalent formal charge). Does not include other civil
litigation, investigations, or arrests or similar charges effected in
the absence of a formal criminal indictment or information (or
equivalent formal charge).
BILLING CODE 8011-01-P

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BILLING CODE 8011-01-C

Form SBSE-A Instructions

A. General Instructions

    1. FORM--Form SBSE-A is the Application for Registration as either
a Security-based Swap Dealer or Major Security-based Swap Participant
(collectively, ``SBS Entities'') by an entity that is not registered or
registering with the Commission as a broker-dealer but is registered or
registering with the Commodity Futures Trading Commission (``CFTC'') as
a swap dealer or major swap participant. These SBS Entities must file
this form and a copy of the Form 7-R they file with the CFTC (or its
designee) to register with the Securities and Exchange Commission. An
applicant must also file Schedules A, B, C, F, and G, as appropriate.
There are no Schedules D, or E. An entity that is registered with the
Commission as a broker-dealer and also is registered or registering
with the Commodity Futures Trading Commission (``CFTC'') as a swap
dealer or major swap participant should file Form SBSE-BD to register
with the Commission as an SBS Entity.
    2. ELECTRONIC FILING--This Form SBSE-A must be filed electronically
with the Commission through the EDGAR system, and must utilize the
EDGAR Filer Manual (as defined in 17 CFR 232. 11) to file and amend
Form SBSE-A electronically to assure the timely acceptance and
processing of those filings.\1980\ Additional documents shall be
attached to this electronic application.
---------------------------------------------------------------------------

    \1980\ As discussed in the release proposing this Form, the
Commission is currently developing a system to facilitate receipt of
applications electronically. More specific instructions on how to
file this Form may be included in the final version of the Form.
---------------------------------------------------------------------------

    3. UPDATING--By law, the applicant must promptly update Form SBSE-A
information by submitting amendments whenever the information on file
becomes inaccurate or incomplete for any reason [17 CFR 240.15Fb2-2].
In addition, the applicant must update any incomplete or inaccurate
information contained on Form SBSE-A prior to filing a notice of
withdrawal from registration on Form SBSE-W [17 CFR 15Fb3-2(a)].
    4. CONTACT EMPLOYEE--The individual listed as the contact employee
must be authorized to receive all compliance information,
communications, and mailings, and be responsible for disseminating it
within the applicant's organization.
    5. FEDERAL INFORMATION LAW AND REQUIREMENTS--An agency may not
conduct or sponsor, and a person is not required to respond to, a
collection of information unless it displays a currently valid control
number. Sections 15F, 17(a) and 23(a) of the Exchange Act authorize the
SEC to collect the information on this form from registrants. See 15
U.S.C. Sec. Sec.  78o-10, 78q and 78w. Filing of this form is
mandatory; however, the social security number information, which aids
in identifying the applicant, is voluntary. The principal purpose of
this Form is to permit the Commission to determine whether the
applicant meets the statutory requirement to engage in the security-
based swap business. The Commission maintain[s] a file of the
information on this form and will make certain information collected
via the form publicly available. Any member of the public may direct to
the Commission any comments concerning the accuracy of the burden
estimate on this Form, and any suggestions for reducing this burden.
This collection of information has been reviewed by the Office of
Management and Budget in accordance with the clearance requirements of
44 U.S.C. Sec.  3507. The information contained in this form is part of
a system of records subject to the Privacy Act of 1974, as amended. The
Securities and Exchange Commission has published in the Federal
Register the Privacy Act Systems of Records Notice for these records.

B. Filing Instructions

    1. FORMAT
    a. Items 1-16 and the accompanying Schedules and DRP pages must be
answered and all fields requiring a response must be completed before
the filing will be accepted.
    b. Failure to follow instructions or properly complete the form may
result in the application being delayed or rejected.
    c. Applicant must complete the execution screen certifying that
Form SBSE-A and amendments thereto have been executed properly and that
the information contained therein is accurate and complete.
    d. To amend information, the applicant must update the appropriate
Form SBSE-A screens.
    e. A paper copy, with original signatures, of the initial Form
SBSE-A filing [and amendments to Disclosure Reporting Pages (DRPs)]
must be retained by the applicant and be made available for inspection
upon a regulatory request.
    2. DISCLOSURE REPORTING PAGE (DRP)--Information concerning a
principal that relates to the occurrence of an event reportable in
Schedule C must be provided on the appropriate DRP.
    The mailing address for questions and correspondence is:

Explanation of Terms

(The following terms are italicized throughout this form.)

1. General

    Terms used in this Form SBSE-A that are defined in the form the
CFTC requires that swap dealers and major swap participants use to
apply for registration with the CFTC shall have the same meaning as set
forth in that form.
    APPLICANT--The security-based swap dealer or major security-based
swap participant applying on or amending this form.
    CONTROL--The power, directly or indirectly, to direct the
management or policies of a company, whether through ownership of
securities, by contract, or otherwise. Any person that (i) is a
director, general partner or officer exercising executive
responsibility (or having similar status or functions); (ii) directly
or indirectly has the right to vote 25% or more of a class of a voting
security or has the power to sell or direct the sale of 25% or more of
a class of voting securities; or (iii) in the case of a partnership,
has the right to receive upon dissolution, or has contributed, 25% or
more of the capital, is presumed to control that company.
    JURISDICTION--A state, the District of Columbia, the Commonwealth
of Puerto Rico, the U.S. Virgin Islands, or any subdivision or
regulatory body thereof.
    SUCCESSOR--The term ``successor'' is defined to be an unregistered
entity that assumes or acquires substantially all of the assets and
liabilities, and that continues the business of, a predecessor
security-based swap dealer or major security-based swap participants
that ceases its security-based swap activities. [See Exchange Act Rule
15b2-5 (17 CFR 240.15Fb2-5)]

3. For the Purpose of Schedule C and the Corresponding Disclosure
Reporting Pages (DRPs)

    FOREIGN FINANCIAL REGULATORY AUTHORITY--Includes (1) a foreign
securities authority; (2) other governmental body or foreign equivalent
of a self-regulatory organization empowered by a foreign government to
administer or enforce its laws relating to the regulation of financial
services industry-related activities; and (3) a foreign membership
organization, a function of which is to regulate the participation of
its members in the activities listed above.

    FINANCIAL SERVICES INDUSTRY-RELATED--Pertaining to securities,
commodities, banking, savings association activities, credit union
activities, insurance, or real estate (including, but not limited to,
acting as or being associated with a broker-dealer, municipal
securities dealer, government securities broker or dealer, issuer,
investment company, investment adviser, futures sponsor, bank,
security-based swap dealer, major security-based swap participant,
savings association, credit union, insurance company, or insurance
agency). (This definition is used solely for the purpose of Form SBSE-
A.)
    INVOLVED--Doing an act or aiding, abetting, counseling, commanding,
inducing, conspiring with or failing reasonably to supervise another in
doing an act.
    ORDER--A written directive issued pursuant to statutory authority
and procedures, including orders of denial, suspension, or revocation;
does not include special stipulations, undertakings or agreements
relating to payments, limitations on activity or other restrictions
unless they are included in an order.
    PROCEEDING--Includes a formal administrative or civil action
initiated by a governmental agency, self-regulatory organization or a
foreign financial regulatory authority; a felony criminal indictment or
information (or equivalent formal charge); or a misdemeanor criminal
information (or equivalent formal charge). Does not include other civil
litigation, investigations, or arrests or similar charges effected in
the absence of a formal criminal indictment or information (or
equivalent formal charge).
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BILLING CODE 8011-01-C

Form SBSE-BD Instructions

A. General Instructions

    1. FORM--Form SBSE-BD is the Application for Registration as either
a Security-based Swap Dealer or Major Security-based Swap Participant
(collectively, ``SBS Entities'') by an entity that is registered or
registering with the Commission as a broker or dealer. These SBS
Entities must file this form to register with the Securities and
Exchange Commission. An applicant must also file Schedules F and G, as
appropriate. There are no Schedules A, B, C, D, or E.
    2. DEFINITIONS--Form SBSE-BD uses the same definitions as in Form
BD.
    3. ELECTRONIC FILING--This Form SBSE-BD must be filed
electronically with the Commission through the EDGAR system, and must
utilize the EDGAR Filer Manual (as defined in 17 CFR 232.11) to file
and amend Form SBSE-BD electronically to assure the timely acceptance
and processing of those filings.\1981\ Additional documents shall be
attached to this electronic application.
---------------------------------------------------------------------------

    \1981\ As discussed in the release proposing this Form, the
Commission is currently developing a system to facilitate receipt of
applications electronically. More specific instructions on how to
file this Form may be included in the final version of the Form.
---------------------------------------------------------------------------

    4. UPDATING--By law, the applicant must promptly update Form SBSE-
BD information by submitting amendments whenever the information on
file becomes inaccurate or incomplete for any reason [17 CFR 240.15Fb2-
2]. In addition, the applicant must update any incomplete or inaccurate
information contained on Form SBSE-BD prior to filing a notice of
withdrawal from

registration on Form SBSE-W [17 CFR 15Fb3-2(a)].
    5. FEDERAL INFORMATION LAW AND REQUIREMENTS--An agency may not
conduct or sponsor, and a person is not required to respond to, a
collection of information unless it displays a currently valid control
number. Sections 15F, 17(a) and 23(a) of the Exchange Act authorize the