SEC Advances Rules On OTC Derivatives Market

Law360 (December 15, 2010, 6:02 PM EST) -- The U.S. Securities and Exchange Commission on Wednesday advanced rules designed to rein in the over-the-counter derivatives market by funneling most transactions through a central clearinghouse.

To tighten regulation over the $600 trillion OTC derivatives market as required under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the proposals — approved by SEC commissioners at a meeting and released for public comment — describe the mandatory clearing of securities-based swaps and its exceptions.

A clearing agency would essentially act as a middleman between the parties...
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