Non-Security-Based Swap (NSBS) | Practical Law

Non-Security-Based Swap (NSBS) | Practical Law

Non-Security-Based Swap (NSBS)

Non-Security-Based Swap (NSBS)

Practical Law Glossary Item 7-554-9665 (Approx. 3 pages)

Glossary

Non-Security-Based Swap (NSBS)

A swap in which the underlying payments are not based on a narrow index of equity or debt securities. Non-security-based swaps (NSBS) include foreign exchange (FX) swaps and interest rate swaps, as well as credit default swaps (CDS) that reference broad-based indices. NSBS are commonly referred to by regulators and market participants simply as swaps. The regulation of swaps under Title VII of the Dodd-Frank Act is broken down between NSBS, which are regulated by the CFTC, and security-based swaps (SBS), which are regulated by the SEC. For more detail on the breakdown of swaps regulation under Title VII, as well as what constitutes an NSBS and what is an SBS, see Practice Note, Summary of the Dodd-Frank Act: Swaps and Derivatives: Types of Swaps Under Title VII.