On December 18, 2020, the SEC announced the creation of the Security-Based Swaps Joint Venture (SBS JV), under which several SEC divisions and offices will be responsible for coordinating functions related to the regulation of security-based swaps (SBS) and oversight of certain entities that will be required to register with the SEC (SBS entities), including security-based swap dealers (SBSDs). The registration period for SBS entities is scheduled for November 2021 (see US Derivatives Regulation: Swaps & Derivatives Calendar: November 1, 2021).

The SBS JV will include participation from staff across the agency, including from the Division of Enforcement, the Division of Economic Risk and Analysis, the Office of International Affairs, and the Office of the Chief Data Officer. According to the release, SBS JV will be an important part of the agency's efforts to regulate and oversee the SBS market, including by positioning the agency to effectively monitor SBS transaction data for regulatory purposes, as the SEC implements the SBS regulatory regime established under Title VII of the Dodd-Frank Act.

In December 2019, the SEC adopted the final rule amendments that underpinned the SEC's broad SBS regulatory regime and triggered the compliance date for SBS entities to register with the SEC (see Legal Update, SEC Adopts Final Cross-Border Security-Based Swap (SBS) Amendments and Guidance; SBS Registration and Compliance Requirements Triggered).

Beginning in November 2021, SBS entities will be required to register with the SEC and will be subject to various requirements, which, among others things, include capital, margin, and segregation requirements (see Practice Note, US Derivatives Regulation: SEC Capital, Margin, and Segregation Requirements for Security-Based Swaps). SBS entities will also be required to report their SBS transaction data, which will be used for various regulatory purposes (see Practice Note, US Derivatives Regulation: SEC Recordkeeping, Reporting, and Notification Requirements for Security-Based Swaps).

According to the SEC, the goal of the SBS JV is to "stand up" the SBS regime and help prepare SBS dealers to fulfill all necessary requirements prior to the November 2021 deadline.

For further details on the SEC's SBS regulatory regime, see US Derivatives Regulation: Swaps Regulatory Tracker: Security-Based Swaps (SBS).