Securities and Exchange Commission July 2012 – Federal Register Recent Federal Regulation Documents

On July 13, 2012, the Securities and Exchange Commission (``Commission'') published a document in the Federal Register (77 FR 41602), concerning, among other things, the process for submissions for review of security-based swaps for mandatory clearing and notice filing requirements for clearing agencies. The document contained typographical errors in the preamble and in the general authority for Part 240. The Commission is publishing corrections to the preamble and the general authority as well as a clarification concerning the Office of Management and Budget (``OMB'') control number for Rule 3Ca-1 under the Securities Exchange Act of 1934 (``Exchange Act'').

The Securities and Exchange Commission (the ``Commission'') is publishing interpretive guidance with respect to sections 3(a)(41) (the definition of ``mortgage related security'') and 3(a)(53)(A) (the definition of ``small business related security'') of the Securities Exchange Act of 1934 (the ``Exchange Act''), in light of section 939(e) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the ``Dodd-Frank Act''). Section 939(e) strikes provisions in sections 3(a)(41) and 3(a)(53)(A) of the Exchange Act that reference credit ratings issued by nationally recognized statistical rating organizations (``NRSROs''), and inserts new text that provides that in order to satisfy these definitions a security must meet ``standards of credit-worthiness as established by the Commission.'' Because more time is needed to develop and establish standards of creditworthiness for purposes of these definitions, the Commission is providing a transitional interpretation that will be applicable on and after July 20, 2012, and until such time as final Commission rules establishing new standards of creditworthiness become effective. The Commission also is seeking comment on potential standards of creditworthiness that could be established to replace the use of NRSRO credit ratings in the definitions of the terms ``mortgage related security'' and ``small business related security.''