On April 5, 2021, the SEC issued requests for public comment on two substituted compliance orders relating to non-U.S. security-based swap dealers (SBSD) and major security-based swap participants (MSBSP) (together, security-based swap entities (SBS entities)) in the United Kingdom (UK) and France.

SEC Release No. 34-91477 reopens the comment period on a proposed conditional substituted compliance order, published on December 29, 2020, in connection with an application made by French financial authorities as to whether applicable non-US SBS entities may satisfy Exchange Act requirements by complying with comparable French or European Union (EU) regulations. The SEC is reopening the comment period in response to comments received and to present potential changes. In particular, the re-opening of the comment period focuses on EMIR-related general conditions as well as risk control and capital requirements under the Exchange Act.

The comment period is re-opened until May 3, 2021.

SEC Release No. 34-91476 solicits public comment on a recent application by the UK Financial Conduit Authority (FCA) requesting the SEC determine whether non-US SBS entities that are subject to certain UK regulations may comply with Exchange Act requirements via compliance with comparable UK requirements. The application concerns several requirements under Exchange Act Section 15F relating to risk control, capital and margin, internal supervision, counterparty protection, and recordkeeping requirements.

Public comment must be submitted by May 3, 2021.

In 2014, the SEC adopted Exchange Act Rule 0-13, under the SEC's 2014 SBS cross-border rules (79 Fed. Reg. 47278), which sets out the procedures for submitting an application for substituted compliance. For more information, see Practice Note, US Derivatives Regulation: Cross-Border Application of Swap Rules: SEC Cross-Border Security-Based Swaps Rules: SBS Substituted Compliance.