Manager Amendments to Senate Reform Bill Give Systemic Risk Regulator Derivatives Role and Streamline SRO Process

The Managers Amendment to the Senate Banking Committee draft reform bill gives the new Financial Stability Oversight Council veto power over SEC and CFTC exemptions from the derivatives regulation regime. For example, the amendment provides that the Commission can exempt a security-based swap only of if the Commission has provided a written notice to the Council describing the proposed exemption and the Council has not made a determination that the exemption would pose a threat to the stability of the US financial system The Council has 60 days to make such a determination.

Another Managers Amendment would help streamline the process for SRO rule approvals. The amendment provides that if, after filing a proposed rule change with the SEC, a self-regulatory organization publishes a notice of the filing of such proposedrule change, together with the substantive terms of the change, on a publicly accessible website, the Commission must send the notice to the Federal Register for publication within 15 days of the date on which the website publication is made. If the Commission fails to send the notice for publication within such 15 day period, then the date of publication must be deemed to be the date on which such website publication was made.

An amendment to the SEC whistleblower provisions would deny an award to any whistleblower who gains the information through the performance of an audit of financial statements required under the securities laws and for whom such submission would be contrary to the requirements of section 10A of the Securities Exchange Act.

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