Proposed Collection; Comment Request; Extension: Business Conduct Standards for Security-Based Swap Dealers and Major Security-Based Swap Participants, 22551-22552 [2025-09476]
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Federal Register / Vol. 90, No. 101 / Wednesday, May 28, 2025 / Notices
submissions should refer to file number
SR–CboeBZX–2025–066 and should be
submitted on or before June 18, 2025.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.32
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025–09489 Filed 5–27–25; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[OMB Control No. 3235–0732]
Proposed Collection; Comment
Request; Extension: Business
Conduct Standards for Security-Based
Swap Dealers and Major SecurityBased Swap Participants
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.), the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) is soliciting comments
on the proposed collection of
information provided for in Business
Conduct Standards for Security-Based
Swap Dealers and Major Security-Based
Swap Participants 1 (17 CFR 240.3a67–
10, 240.3a71–3, 240.3a71–6, 240.15Fh–
1 through 15Fh–6 and 240.15Fk–1),
under the Securities Exchange Act of
1934 (15 U.S.C. 78a et seq.) (‘‘Exchange
Act’’).
In 2010, Congress enacted the DoddFrank Act, establishing a comprehensive
framework for regulating the over-thecounter swaps markets.2 As required by
Title VII of the Dodd-Frank Act, new
section 15F(h) of the Exchange Act
established business conduct standards
for security-based swap Dealers (‘‘SBS
Dealers’’) and Major security-based
swap Participants (‘‘collectively ‘‘SBS
Entities’’) in their dealings with
counterparties, including special
entities.3
32 17
CFR 200.30–3(a)(12).
Conduct Standards for Security-Based
Swap Dealers and Major Security-Based Swap
Participants, Exchange Act Release 77617 (Apr. 14,
2016), 81 FR 29959 (May 13, 2016). See also
Business Conduct Standards for Security-Based
Swap Dealers and Major Security-Based Swap
Participants; Correction, Exchange Act Release
77617A (May 19, 2016), 81 FR 32643 (May 24,
2016) (together, the ‘‘BCS Rules’’).
2 Dodd-Frank Wall Street Reform and Consumer
Protection Act, Public Law 111–203, 124 Stat. 1376
(2010) (‘‘Dodd-Frank Act’’).
3 ‘‘Special Entity’’ means: a federal agency; State,
State agency, city, county, municipality, other
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In 2016, in order to implement the
Dodd-Frank Act, the Commission
adopted the BCS Rules for SBS Dealers
and Major SBS Participants,4 a
comprehensive set of business conduct
standards and chief compliance officer
(‘‘CCO’’) requirements applicable to SBS
Entities, that are designed to enhance
transparency, facilitate informed
customer decision-making, and heighten
standards of professional conduct to
better protect investors.
Rules 15Fh–1 through 15Fh–6 and
15Fk–1 require SBS Entities to:
• Verify whether a counterparty is an
eligible contract participant and
whether it is a special entity;
• Disclose to the counterparty
material information about the securitybased swap, including material risks,
characteristics, incentives and conflicts
of interest;
• Provide the counterparty with
information concerning the daily mark
of the security-based swap;
• Provide the counterparty with
information regarding the ability to
require clearing of the security-based
swap;
• Communicate with counterparties
in a fair and balanced manner based on
principles of fair dealing and good faith;
• Establish a supervisory and
compliance infrastructure; and
• Designate a CCO that is required to
fulfill the described duties and provide
an annual compliance report.
The rules also require SBS Dealers to:
• Determine that recommendations
they make regarding security-based
swaps are suitable for their
counterparties.
• Establish, maintain and enforce
written policies and procedures
reasonably designed to obtain and retain
a record of the essential facts concerning
each known counterparty that are
necessary to conduct business with such
counterparty; and
• Comply with rules designed to
prevent ‘‘pay-to-play.’’
political subdivision of a State, or any
instrumentality, department, or a corporation of or
established by a State or political subdivision of a
State; any employee benefit plan subject to Title I
of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1002); any governmental plan, as
defined in Section 3 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1002); any
endowment, including an endowment that is an
organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986 (26 U.S.C. 501(c)(3));
or any employee benefit plan defined in Section 3
of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1002), not otherwise defined as a
Special Entity, that elects to be a Special Entity by
notifying a swap dealer or major swap participant
of its election prior to entering into a swap with the
particular swap dealer or major swap participant.
17 CFR 23.401(c).
4 See supra note 1.
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Fmt 4703
Sfmt 4703
22551
The rules also define what it means to
‘‘act as an advisor’’ to a special entity,
and require an SBS Dealer who acts as
an advisor to a special entity to:
• Make a reasonable determination
that any security-based swap or trading
strategy involving a security-based swap
recommended by the SBS Dealer is in
the best interests of the special entity
whose identity is known at a reasonably
sufficient time prior to the execution of
the transaction to permit the SBS Dealer
to comply with this obligation; and
• Make reasonable efforts to obtain
such information that the SBS Dealer
considers necessary to make a
reasonable determination that a
security-based swap or trading strategy
involving a security-based swap is in
the best interests of the known special
entity.
In addition, the rules require SBS
Entities acting as counterparties to
special entities to reasonably believe
that the counterparty has an
independent representative who meets
the following requirements:
• Has sufficient knowledge to
evaluate the transaction and risks;
• Is not subject to a statutory
disqualification;
• Undertakes a duty to act in the best
interests of the special entity;
• Makes appropriate and timely
disclosures to the special entity of
material information concerning the
security-based swap;
• Evaluates, consistent with any
guidelines provided by the special
entity, the fair pricing and the
appropriateness of the security-based
swap;
• Is independent of the security-based
swap dealer or major security-based
swap participant that is the
counterparty to a proposed securitybased swap.
Under the rules, the special entity’s
independent representative must also be
subject to pay-to-play regulations, and if
the special entity is an ERISA plan, the
independent representative must be an
ERISA fiduciary.
The information that must be
collected pursuant to the BCS Rules is
intended to increase accountability and
transparency in the market. The
information should therefore help
establish a framework that protects
investors and promotes efficiency,
competition and capital formation.
Based on a review of recent data, as
of 2025, the Commission staff estimate
the number of respondents to be as
follows: 53 SBS Dealers, 0 Major SBS
Participants, for a total of 53 ‘‘SBS
E:\FR\FM\28MYN1.SGM
28MYN1
22552
Federal Register / Vol. 90, No. 101 / Wednesday, May 28, 2025 / Notices
Entities.’’ 5 Further, The Commission
staff estimate that approximately 46 of
these 53 SBS Entities will be dually
registered with the CFTC as Swap
Entities. The Commission staff also
estimate that there are currently 16,061
security-based swap market participants
of which 12,406 are also swap market
participants.6 From October 2021
through September 2022, the
Commission staff estimate that there
were approximately 377,271 securitybased swap transactions between an
SBS Dealer and counterparty that is not
an SBS Dealer of which approximately
234,654 were new and 5,559 amended
trades (totaling 240,213). The
Commission staff estimate there are 283
independent, third-party representatives
and 22 in-house independent
representatives, for a total of 305
independent representatives.7 The
Commission staff estimate that there are
approximately 14,005 unique SBS
Dealer and non-SBS-Dealer pairs.8 The
Commission staff have used these
IC Title
Type of burden
15Fh–3(b), (c), (d):
Disclosures—SBS Entities ..............................
15Fh–3(b), (c), (d):
Disclosures—SBS Transactions Between
SBS Dealer and Non-SBSD Counterparty.
15Fh–3(e), (f):
Know Your Counterparty and Recommendations (SBS Dealers).
15Fh–3(g):
Fair and Balanced Communications ...............
15Fh–3(h):
Supervision ......................................................
15Fh–5:
SBS Entities Acting as Counterparties to Special Entities.
15Fh–5:
SBS Entities Acting as Counterparties to Special Entities.
15Fh–6:
Political Contributions ......................................
15Fk–1:
Chief Compliance Officer ................................
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16:10 May 27, 2025
Jkt 265001
Ongoing
annual burden
Industry-wide
annual burden
Industry-wide
annual burden
Hours
Cost
Hours
Cost
53
4,120
$0
218,360
$0
Reporting ...............
53
4,427.4
0
234,654
0
Reporting ...............
53
132.1
0
7,003
0
Reporting ...............
53
2
4,158
106
220,374
Reporting ...............
53
540
5,544
28,620
293,832
Reporting ...............
53
305
0
16,165
0
Third-Party Disclosure.
53
305
0
16,165
0
Reporting ...............
53
1
29,568
53
1,567,104
Reporting ...............
53
273
8,316
14,469
440,748
................................
..........................
..........................
..........................
535,595
2,522,058
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 OMB
Control Number.
Written comments are invited on: (a)
whether this proposed collection of
information is necessary for the proper
performance of the functions of the SEC,
including whether the information will
have practical utility; (b) the accuracy of
the SEC’s estimate of the burden
imposed by the proposed collection of
information, including the validity of
the methodology and the assumptions
used; (c) ways to enhance the quality,
utility, and clarity of the information to
be collected; and (d) ways to minimize
the burden of the collection of
information on respondents, including
through the use of automated, electronic
VerDate Sep<11>2014
Ongoing
annual burden
Reporting ...............
Total ..........................................................
5 List of Registered Security-Based Swap Dealers
and Major Security-Based Swap Participants,
available at: https://www.sec.gov/about/divisionsoffices/division-trading-markets/list-registeredsecurity-based-swap-dealers-major-security-basedswap-participants (providing the list of registered
security-based swap dealers and major securitybased swap participants that was updated as of
December 31, 2024). Information concerning Swap
Respondents
estimates in calculating the hour and
cost burdens for the rule provisions that
the Commission staff anticipate have a
‘‘collection of information’’ burden
within the meaning of the PRA.
The Commission staff estimate that
the aggregate burden of the ongoing
reporting and disclosures required by
the BCS Rules, as described above, is
approximately 535,595 hours and
$2,522,058 calculated as follows:
collection techniques or other forms of
information technology.
Please direct your written comment to
Austin Gerig, Director/Chief Data
Officer, Securities and Exchange
Commission, c/o Tanya Ruttenberg, 100
F Street NE, Washington, DC 20549 and
send it by email to
PaperworkReductionAct@sec.gov within
60 days of publication of this notice, by
July 28, 2025.
Dated: May 21, 2025.
Sherry R. Haywood,
Assistant Secretary.
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
35605; File No. 812–15512]
Eagle Point Credit Company Inc., et al.
May 22, 2025.
Securities and Exchange
Commission (‘‘Commission’’ or ‘‘SEC’’).
AGENCY:
ACTION:
Notice.
BILLING CODE 8011–01–P
Notice of application for an order
under sections 17(d) and 57(i) of the
Investment Company Act of 1940 (the
‘‘Act’’) and rule 17d–1 under the Act to
permit certain joint transactions
otherwise prohibited by sections 17(d)
and 57(a)(4) of the Act and rule 17d–1
under the Act.
Entities registered with the CFTC available at:
(https://www.cftc.gov/IndustryOversight/
Intermediaries/MajorSwapParticipantMSP/
index.htm).
6 Unless otherwise noted, estimates were derived
from the DTCC–TIW data set (November 30, 2006
through September 2022). In October 2022, DTCC–
TIW transaction data went through a major
structural change. Commission staff are still in the
process of resolving the consistency issue
associated with this data.
7 See Information About Registered Municipal
Advisors as of January 1, 2025 (https://
www.sec.gov/data-research/sec-markets-data/
information-about-registered-municipal-advisors).
8 See supra note 6.
[FR Doc. 2025–09476 Filed 5–27–25; 8:45 am]
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E:\FR\FM\28MYN1.SGM
28MYN1
]]>Agencies
[Federal Register Volume 90, Number 101 (Wednesday, May 28, 2025)]
[Notices]
[Pages 22551-22552]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-09476]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[OMB Control No. 3235-0732]
Proposed Collection; Comment Request; Extension: Business Conduct
Standards for Security-Based Swap Dealers and Major Security-Based Swap
Participants
Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of FOIA Services, 100 F Street NE, Washington, DC
20549-2736
Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501 et seq.), the Securities and Exchange
Commission (``SEC'' or ``Commission'') is soliciting comments on the
proposed collection of information provided for in Business Conduct
Standards for Security-Based Swap Dealers and Major Security-Based Swap
Participants \1\ (17 CFR 240.3a67-10, 240.3a71-3, 240.3a71-6, 240.15Fh-
1 through 15Fh-6 and 240.15Fk-1), under the Securities Exchange Act of
1934 (15 U.S.C. 78a et seq.) (``Exchange Act'').
---------------------------------------------------------------------------
\1\ Business Conduct Standards for Security-Based Swap Dealers
and Major Security-Based Swap Participants, Exchange Act Release
77617 (Apr. 14, 2016), 81 FR 29959 (May 13, 2016). See also Business
Conduct Standards for Security-Based Swap Dealers and Major
Security-Based Swap Participants; Correction, Exchange Act Release
77617A (May 19, 2016), 81 FR 32643 (May 24, 2016) (together, the
``BCS Rules'').
---------------------------------------------------------------------------
In 2010, Congress enacted the Dodd-Frank Act, establishing a
comprehensive framework for regulating the over-the-counter swaps
markets.\2\ As required by Title VII of the Dodd-Frank Act, new section
15F(h) of the Exchange Act established business conduct standards for
security-based swap Dealers (``SBS Dealers'') and Major security-based
swap Participants (``collectively ``SBS Entities'') in their dealings
with counterparties, including special entities.\3\
---------------------------------------------------------------------------
\2\ Dodd-Frank Wall Street Reform and Consumer Protection Act,
Public Law 111-203, 124 Stat. 1376 (2010) (``Dodd-Frank Act'').
\3\ ``Special Entity'' means: a federal agency; State, State
agency, city, county, municipality, other political subdivision of a
State, or any instrumentality, department, or a corporation of or
established by a State or political subdivision of a State; any
employee benefit plan subject to Title I of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1002); any governmental plan,
as defined in Section 3 of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1002); any endowment, including an endowment
that is an organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986 (26 U.S.C. 501(c)(3)); or any employee
benefit plan defined in Section 3 of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1002), not otherwise defined as a
Special Entity, that elects to be a Special Entity by notifying a
swap dealer or major swap participant of its election prior to
entering into a swap with the particular swap dealer or major swap
participant. 17 CFR 23.401(c).
---------------------------------------------------------------------------
In 2016, in order to implement the Dodd-Frank Act, the Commission
adopted the BCS Rules for SBS Dealers and Major SBS Participants,\4\ a
comprehensive set of business conduct standards and chief compliance
officer (``CCO'') requirements applicable to SBS Entities, that are
designed to enhance transparency, facilitate informed customer
decision-making, and heighten standards of professional conduct to
better protect investors.
---------------------------------------------------------------------------
\4\ See supra note 1.
---------------------------------------------------------------------------
Rules 15Fh-1 through 15Fh-6 and 15Fk-1 require SBS Entities to:
Verify whether a counterparty is an eligible contract
participant and whether it is a special entity;
Disclose to the counterparty material information about
the security-based swap, including material risks, characteristics,
incentives and conflicts of interest;
Provide the counterparty with information concerning the
daily mark of the security-based swap;
Provide the counterparty with information regarding the
ability to require clearing of the security-based swap;
Communicate with counterparties in a fair and balanced
manner based on principles of fair dealing and good faith;
Establish a supervisory and compliance infrastructure; and
Designate a CCO that is required to fulfill the described
duties and provide an annual compliance report.
The rules also require SBS Dealers to:
Determine that recommendations they make regarding
security-based swaps are suitable for their counterparties.
Establish, maintain and enforce written policies and
procedures reasonably designed to obtain and retain a record of the
essential facts concerning each known counterparty that are necessary
to conduct business with such counterparty; and
Comply with rules designed to prevent ``pay-to-play.''
The rules also define what it means to ``act as an advisor'' to a
special entity, and require an SBS Dealer who acts as an advisor to a
special entity to:
Make a reasonable determination that any security-based
swap or trading strategy involving a security-based swap recommended by
the SBS Dealer is in the best interests of the special entity whose
identity is known at a reasonably sufficient time prior to the
execution of the transaction to permit the SBS Dealer to comply with
this obligation; and
Make reasonable efforts to obtain such information that
the SBS Dealer considers necessary to make a reasonable determination
that a security-based swap or trading strategy involving a security-
based swap is in the best interests of the known special entity.
In addition, the rules require SBS Entities acting as
counterparties to special entities to reasonably believe that the
counterparty has an independent representative who meets the following
requirements:
Has sufficient knowledge to evaluate the transaction and
risks;
Is not subject to a statutory disqualification;
Undertakes a duty to act in the best interests of the
special entity;
Makes appropriate and timely disclosures to the special
entity of material information concerning the security-based swap;
Evaluates, consistent with any guidelines provided by the
special entity, the fair pricing and the appropriateness of the
security-based swap;
Is independent of the security-based swap dealer or major
security-based swap participant that is the counterparty to a proposed
security-based swap.
Under the rules, the special entity's independent representative
must also be subject to pay-to-play regulations, and if the special
entity is an ERISA plan, the independent representative must be an
ERISA fiduciary.
The information that must be collected pursuant to the BCS Rules is
intended to increase accountability and transparency in the market. The
information should therefore help establish a framework that protects
investors and promotes efficiency, competition and capital formation.
Based on a review of recent data, as of 2025, the Commission staff
estimate the number of respondents to be as follows: 53 SBS Dealers, 0
Major SBS Participants, for a total of 53 ``SBS
[[Page 22552]]
Entities.'' \5\ Further, The Commission staff estimate that
approximately 46 of these 53 SBS Entities will be dually registered
with the CFTC as Swap Entities. The Commission staff also estimate that
there are currently 16,061 security-based swap market participants of
which 12,406 are also swap market participants.\6\ From October 2021
through September 2022, the Commission staff estimate that there were
approximately 377,271 security-based swap transactions between an SBS
Dealer and counterparty that is not an SBS Dealer of which
approximately 234,654 were new and 5,559 amended trades (totaling
240,213). The Commission staff estimate there are 283 independent,
third-party representatives and 22 in-house independent
representatives, for a total of 305 independent representatives.\7\ The
Commission staff estimate that there are approximately 14,005 unique
SBS Dealer and non-SBS-Dealer pairs.\8\ The Commission staff have used
these estimates in calculating the hour and cost burdens for the rule
provisions that the Commission staff anticipate have a ``collection of
information'' burden within the meaning of the PRA.
---------------------------------------------------------------------------
\5\ List of Registered Security-Based Swap Dealers and Major
Security-Based Swap Participants, available at: https://www.sec.gov/about/divisions-offices/division-trading-markets/list-registered-security-based-swap-dealers-major-security-based-swap-participants
(providing the list of registered security-based swap dealers and
major security-based swap participants that was updated as of
December 31, 2024). Information concerning Swap Entities registered
with the CFTC available at: (https://www.cftc.gov/IndustryOversight/Intermediaries/MajorSwapParticipantMSP/index.htm).
\6\ Unless otherwise noted, estimates were derived from the
DTCC-TIW data set (November 30, 2006 through September 2022). In
October 2022, DTCC-TIW transaction data went through a major
structural change. Commission staff are still in the process of
resolving the consistency issue associated with this data.
\7\ See Information About Registered Municipal Advisors as of
January 1, 2025 (https://www.sec.gov/data-research/sec-markets-data/information-about-registered-municipal-advisors).
\8\ See supra note 6.
---------------------------------------------------------------------------
The Commission staff estimate that the aggregate burden of the
ongoing reporting and disclosures required by the BCS Rules, as
described above, is approximately 535,595 hours and $2,522,058
calculated as follows:
--------------------------------------------------------------------------------------------------------------------------------------------------------
Ongoing annual Ongoing annual Industry-wide Industry-wide
burden burden annual burden annual burden
IC Title Type of burden Respondents -------------------------------------------------------------------
Hours Cost Hours Cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
15Fh-3(b), (c), (d):
Disclosures--SBS Entities.......... Reporting................. 53 4,120 $0 218,360 $0
15Fh-3(b), (c), (d):
Disclosures--SBS Transactions Reporting................. 53 4,427.4 0 234,654 0
Between SBS Dealer and Non-SBSD
Counterparty.
15Fh-3(e), (f):
Know Your Counterparty and Reporting................. 53 132.1 0 7,003 0
Recommendations (SBS Dealers).
15Fh-3(g):
Fair and Balanced Communications... Reporting................. 53 2 4,158 106 220,374
15Fh-3(h):
Supervision........................ Reporting................. 53 540 5,544 28,620 293,832
15Fh-5:
SBS Entities Acting as Reporting................. 53 305 0 16,165 0
Counterparties to Special Entities.
15Fh-5:
SBS Entities Acting as Third-Party Disclosure.... 53 305 0 16,165 0
Counterparties to Special Entities.
15Fh-6:
Political Contributions............ Reporting................. 53 1 29,568 53 1,567,104
15Fk-1:
Chief Compliance Officer........... Reporting................. 53 273 8,316 14,469 440,748
------------------------------------------------------------------------------------
Total.......................... .......................... ............... ............... ............... 535,595 2,522,058
--------------------------------------------------------------------------------------------------------------------------------------------------------
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 OMB Control Number.
Written comments are invited on: (a) whether this proposed
collection of information is necessary for the proper performance of
the functions of the SEC, including whether the information will have
practical utility; (b) the accuracy of the SEC's estimate of the burden
imposed by the proposed collection of information, including the
validity of the methodology and the assumptions used; (c) ways to
enhance the quality, utility, and clarity of the information to be
collected; and (d) ways to minimize the burden of the collection of
information on respondents, including through the use of automated,
electronic collection techniques or other forms of information
technology.
Please direct your written comment to Austin Gerig, Director/Chief
Data Officer, Securities and Exchange Commission, c/o Tanya Ruttenberg,
100 F Street NE, Washington, DC 20549 and send it by email to
[email protected] within 60 days of publication of this
notice, by July 28, 2025.
Dated: May 21, 2025.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-09476 Filed 5-27-25; 8:45 am]
BILLING CODE 8011-01-P
