SEC adopts new risk management rules for clearing agencies
Securities regulators on Monday adopted rules designed to bolster risk management practices for clearing agencies.
The new rules, which are required by the 2010 Dodd-Frank Wall Street reform law, mark the latest effort by the Securities and Exchange Commission to finalize regulations for the 640 trillion dollar over-the-counter derivatives market.
A centerpiece of the Dodd-Frank law, the new rules require standard swap contracts to be routed through clearinghouses, which stand in between parties to guarantee trades in the event of a default.
Regulators like the SEC and the Commodity Futures Trading Commission have also written new rules to ensure these clearing firms have the risk management and financial backing in place to handle a major spike in activity.