More than six years after the enactment of the Dodd-Frank Act, and more than three years after the US Commodity Futures Trading Commission (CTFC) required swap dealers to register in accordance with Title VII of that Act, it remains unclear when exactly the US Securities and Exchange Commission (SEC) will require the registration of security-based swap (SBS) dealers. But while the timing for registration is unclear, SBS dealing entities can now begin to take steps to facilitate their SEC registration.

Despite the SEC’s progress in recent months in finalising its rules for SBS dealers – it has, among other things, recently issued amendments to its Regulation SBSR and finalised its business conduct rules for SBS dealers – several more dominoes need to fall before SBS dealer registration will be required. Of particular note, the SEC’s SBS dealer registration rules provide that registration will not be required until at least six months after the publication in the Federal Register of the SEC’s final margin rules for SBS dealers. The SEC proposed those rules in 2012 but, after that proposal, the Basel Committee on Banking Supervision and the International Organization of Securities Commissions released their widely influential international framework for margin for uncleared derivatives. As a result, it seems likely, though perhaps not inevitable, that the SEC will re-propose its margin rules. In view of that likely reproposal, the required six-month waiting period after the final margin rules’ publication, and SEC Chair Mary Jo White’s recent statement at an open meeting that the SEC’s goal is to complete its regulations for SBS dealers by the end of 2016, an SBS dealer registration compliance date toward the middle or end of 2017 seems likely.

Originally published in International Financial Law Review on August 30, 2016.