Derivatives in Review – July 2016

SEC Amends Rules on Security-Based Swap Reporting

On July 13, 2016, the Securities Exchange Commission approved certain amendments and guidance to the rules governing the reporting and public dissemination of security-based swaps, known as “Regulation SBSR,” which were adopted in February 2015. The amendments and guidance are intended to increase transparency in the security-based swap market. Read more here.

CFTC Considers Blockchain Technology

The disruptive effects of blockchain technology on the financial system may take several years to materialize. Nevertheless, in preparation, regulators are increasingly focused on understanding potential uses of blockchain technology and considering related legal issues. Many regulators are already familiar with bitcoin, the popular virtual currency underpinned by blockchain technology. It is widely expected that “distributed ledger technology,” such as that used with bitcoin, will be used in the future to track the ownership of financial, legal, physical, electronic, and other types of assets and to automate the performance of certain contracts.

The CFTC has begun to consider the implications of distributed ledger technology with respect to the derivatives markets. Read more here.

An Overview of Proposed Regulation AT

Orrick attorneys authored an overview of Regulation Automated Trading (known as “Regulation AT”) proposed by the Commodity Futures Trading Commission (“CFTC”) in the May/June 2016 issue of the Journal of Taxation and Regulation of Financial Institutions. The “overarching goal” of proposed Regulation AT is to update the CFTC’s rules in response to the development and prevalence of electronic trading. The article is titled “Regulation Automated Trading in Derivatives: An Overview of the CFTC’s Proposed Regulation AT” and is available here.

Proposed Regulations Under §385 Classifying Interests in a Corporation

Orrick attorneys authored an article, titled “Proposed Regulations Under §385 Classifying Interests in a Corporation,” addressing Section 385 regulations proposed by the Internal Revenue Service and the U.S. Treasury Department to address the excessive use of debt to reduce the U.S. tax base. The article was published in the Tax Management International Journal and is available

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