Robert Dilworth, Bank of America Merrill Lynch James Schwartz, Morrison & Foerster LLP May 1, 2013 NY2 716883 © 2013 Morrison & Foerster LLP All Rights Reserved | mofo.com The SEC’s Extensions of Exemptions for Security-Based Swaps Caveat • This outline is for informational purposes only and does not constitute legal advice or create an attorney-client relationship. • Consult your own attorney for legal advice on the issues discussed in this outline. • IRS Circular 230 Disclosure • To ensure compliance with the requirements imposed by the IRS, we inform you that any tax advice contained in this communication was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any matters addressed herein. • This outline may constitute attorney advertising. This is MoFo. | 2 2 Topics for Presentation • Background regarding security-based swaps and Dodd-Frank • SEC Roadmap and final rules to date • Timeline of relief granted by SEC • Industry commentary • Relief granted • Interim final rules • General exemptive order • Exchange Act exemptive order This is MoFo. | 3 3 Swaps and Security-Based Swaps • Swaps are subject to the jurisdiction of the CFTC and include interest rate swaps, floors, caps and collars, commodity swaps, cross-currency swaps, total return swaps on broad-based security indices or two or more loans and credit default swaps on broad-based security indices. • Security-based swaps are subject to the jurisdiction of the SEC and include swaps on a single security, loan, or narrow-based securities index. This is MoFo. | 4 4 Swaps and Security-Based Swaps • “Narrow based security index” means, among other things, an index with nine or fewer components, or in which a component security comprises more than 30 percent of the index’s weighting. • The SEC and CFTC have adopted joint rules for the regulation of mixed swaps, which combine characteristics of both swaps and security-based swaps. This is MoFo. | 5 5 Dodd-Frank Treatment of Security-Based Swaps • Title VII of Dodd-Frank amended the Securities Act of 1933 (the “Securities Act”) and the Securities Exchange Act of 1934 (the “Exchange Act”) to include “security-based swaps” in the definition of “security” for purposes of those statutes. This is MoFo. | 6 6 Dodd-Frank Treatment of Security-Based Swaps • Section 761 of Dodd-Frank amends the definition of “security” contained in the Exchange Act to include security-based swaps. • Section 768 of Dodd-Frank amends the definition of “security” contained in the Securities Act to include security-based swaps. • Trust Indenture Act of 1939 (the “Trust Indenture Act”) incorporates the definition of “security” contained in the Securities Act. • As a result, “security-based swaps” became subject to the provisions of the Securities Act, the Exchange Act and the Trust Indenture Act, and the rules and regulations thereunder that are applicable to “securities.” This is MoFo. | 7 7 Dodd-Frank Treatment of Security-Based Swaps • Dodd-Frank did not amend the definition of “security” for purposes of the Investment Company Act of 1940. • Not clear why this amendment did not occur. • Historically, definition of “security” under ’40 Act has been broader than under Securities Act and Exchange Act. This is MoFo. | 8 8 Current Status • As further described below, the SEC has granted broad relief with respect to many of the consequences that arise from the treatment of security-based swaps as “securities”. • The relief that the SEC has granted in its interim final rules and in its exemptive orders is still in place and has been extended to February 11, 2014. This is MoFo. | 9 9 SEC Roadmap • The time frame for the SEC to complete its work under Title VII is not clear. • The SEC’s proposal regarding cross-border issues and the parameters of the extraterritorial effect of Dodd-Frank with respect to security-based swaps is expected this week. • Expected to be lengthy, more than 1,000 pages. • Last June, the SEC issued a “roadmap” for its rulemaking, a “general sequence” for anticipated compliance dates of final rules to be adopted by the SEC. • The anticipated proposed cross-border rules, when finalized, will complete the first of the five categories of rulemakings that the roadmap identified. • Many of the SEC rules have been proposed, but few have been finalized. This is MoFo. | 1010 SEC Roadmap • First category: rules further defining (i) the terms ‘‘security-based swap,’’ ‘‘security-based swap agreement,’’ ‘‘mixed swap,’’ ‘‘securitybased swap dealer,’’ ‘‘major security-based swap participant,’’ and ‘‘eligible contract participant,’’ and (ii) the rules concerning the treatment of cross-border security-based swap transactions and nonU.S. persons acting in capacities regulated under Subtitle B of Title VII. • Second category: rules pertaining to the registration and regulation of swap data repositories, the reporting of security-based swap transaction data to swap data repositories, and the public dissemination of security-based swap transaction data. This is MoFo. | 1111 SEC Roadmap • Third category: rules pertaining to the mandatory clearing process of security-based swap transactions, clearing agency standards, and the end-user exception from mandatory clearing. • Fourth category: rules pertaining to the registration and regulation of security-based swap dealers and major security-based swap participants. • Fifth category: rules pertaining to the mandatory trading of securitybased swap transactions, including the rules pertaining to the registration and regulation of security-based swap execution facilities. This is MoFo. | 1212 SEC Final Rules • As of today, relatively few SEC rules have been finalized under Title VII of Dodd-Frank. • The finalized rules include: • Certain rules in relation to risk management procedures, controls and rule changes for clearing agencies (such as central counterparties, or “CCPs”); • Further definitions of “Swap,” “Security-Based Swap,” “Security-Based Swap Agreement”; Mixed Swaps, Security-Based Swap Agreement Recordkeeping (jointly with CFTC); • Process of Submissions for Review of Security-Based Swaps for Mandatory Clearing; and • Further definitions of “Swap Dealer,” “Security-Based Swap Dealer,” “Major Swap Participant,” “Major Security-Based Swap Participant” and “Eligible Contract Participant” (jointly with CFTC). This is MoFo. | 1313 SEC Final Rules • In addition, the SEC finalized a permanent exemption that applies to security-based swaps that are cleared by a CCP. • Under the permanent exemption, subject to conditions, securitybased swaps that are cleared by a CCP are exempt from the provisions of the Securities Act, the Exchange Act and the Trust Indenture Act (other than with respect to antifraud provisions). • The exemption’s conditions include (i) that the CCP’s counterparties to the relevant security-based swap are eligible contract participants and (ii) in the case of the exemption from the Securities Act, that the CCP makes available certain information regarding the swap, including identification of the underlying asset relating to the securitybased swap in question. This is MoFo. | 1414 Timeline of SEC Exemptive Relief • Under section 774 of Dodd-Frank, the provisions of Subtitle B of Title VII of Dodd-Frank were to take effect, unless a provision required a rulemaking, 360 days after the date of enactment of Dodd-Frank, or July 16, 2011. • However, prior to July 16, 2011, the SEC took actions to provide relief from the security-based swap provisions of Dodd-Frank. This is MoFo. | 1515 Timeline of SEC Exemptive Relief • On June 15, 2011, the SEC issued a general exemptive order (the “General Exemptive Order”). • The General Exemptive Order does not contain any “sunset” provision, but, instead, its exemptions generally expire on the compliance date of rules relating to each provision with respect to which relief is granted. This is MoFo. | 1616 Timeline of SEC Exemptive Relief • In addition, on July 1, 2011, the SEC issued both (i) interim final rules (the “Interim Final Rules”) and (ii) another exemptive order, specifically under the Exchange Act (the “Exchange Act Exemptive Order”). • In its release of the Interim Final Rules, the SEC stated that the rules would remain in effect until the compliance date for final rules further defining the terms “security-based swap” and “eligible contract participant”. • Similarly, by the terms of the Exchange Act Exemptive Order, the relief granted in the order was to expire upon the compliance date for final rules, as applicable, (i) further defining the terms “securitybased swap” and “eligible contract participant” or (ii) regarding registration of security-based swap facilities. This is MoFo. | 1717 Timeline of SEC Exemptive Relief • In April 2012, the SEC and the CFTC adopted regulations further defining, among other things, the term “eligible contract participant.” • In July 2012, the SEC and the CFTC adopted regulations further defining, among other things, the term “security-based swap.” • In the adopting release for these regulations, the SEC stated that solely for the purposes of the Exchange Act Exemptive Order and the Interim Final Rules, the compliance date for the final rules further defining the term ‘‘security-based swap’’ would be February 11, 2013. • There was no need to extend General Exemptive Order because expiration of the relief that it provides is generally linked to compliance dates for rules that had not yet gone into effect. This is MoFo. | 1818 Timeline of SEC Exemptive Relief • Prior to February 11, 2013, the SEC took the following actions: • Issued an extension of the Interim Final Rules; and • Issued an extension of the Exchange Act Exemptive Order. • The two extensions extend until February 11, 2014, the expiration date of the relief granted in the Interim Final Rules and the Exchange Act Exemptive Order. • Still no need to extend General Exemptive Order because expiration of the relief that it provides is generally linked to compliance dates for rules that have not yet gone into effect. This is MoFo. | 1919 Why Extend Rules and Exemptive Order? • SEC had not completed its evaluation of the implications of treating security-based swaps as securities. • Intent to move forward deliberatively in implementing Dodd-Frank requirements. • Necessary to keep status quo to allow market participants to continue to enter into security-based swaps. This is MoFo. | 2020 Why Extend Rules and Exemptive Order? • Concern about market disruptions in relation to securitybased swaps in relation to Dodd-Frank requirements, including requirements to: • Register offer and sale of security-based swaps under the Securities Act; • Comply with provisions of Exchange Act applicable to classes of securities; and • Comply with the indenture provisions of the Trust Indenture Act. This is MoFo. | 2121 Contrast with CFTC’s Approach • CFTC has finalized many more rulemakings than SEC. • Among the rulemakings that the CFTC has finalized are: • Swap dealer registration (about 75 swap dealers have registered with CFTC); • Business conduct (many external business conduct rules are scheduled to go into effect today); • Swap data reporting and recordkeeping; • Mandatory clearing (in effect for certain rate swaps and CDS for category 1 entities such as dealers; will be phased in for category 2 entities next month and for all others in September of this year); • End-user exception to mandatory clearing requirement; and • Affiliate exception to mandatory clearing. This is MoFo. | 2222 Contrast with CFTC’s Approach • However, although the CFTC has implemented many more rules than the SEC, some of those rules have proven difficult to implement in practice. • CFTC has issued dozens of no-action letters, many of them providing temporary relief. • Value and use of reported swap data have been called into question. • Immediately after recent no-action relief was granted, CFTC Commissioner O’Malia issued a statement listing various complaints, including his concern that the CFTC is facing immense challenges in using data that the three SDRs are reporting because of inconsistent and incomplete reporting, technology shortfalls and integration issues. This is MoFo. | 2323 Contrast with CFTC’s Approach • Notwithstanding its different approach to rulemaking, the CFTC still has a number of important rulemakings to finalize: • Margin Requirements for uncleared OTC swaps • The margin requirements have not been finalized, although it is widely anticipated that levels will be higher than for cleared swaps (keeping in mind, however, that clearing houses and FCMs can increase the level of margin on a cleared swap). • Cross-jurisdiction harmonization will be needed. • Swap Execution Facility (“SEF)” Rules • Dodd-Frank requires that all swaps that are required to be cleared be executed on a designated contract market (“DCM”) or a SEF, unless the swap type is not available for trading on any DCM or SEF, or another clearing exception applies. • The CFTC has proposed rules governing SEFs that subject SEFs to specific transparency requirements related to making bids, offers and trades available to all market participants. This is MoFo. | 2424 Contrast with CFTC’s Approach • Extraterritoriality • In June 2012, the CFTC issued an exemptive order and also proposed cross-border guidance, which permitted delayed compliance with certain Title VII requirements for foreign entities. • In December 2012, the CFTC extended the exemptive order delaying compliance and modifying the “U.S. person” definition. The SEC staff has stated that finalizing cross-border guidance is an important priority for the agency. • Considerable public debate is ongoing (and may be advanced by the SEC’s upcoming release of extraterritorial guidance). This is MoFo. | 2525 Scope of SEC Exemptive Relief • Together, the General Exemptive Order, the Interim Final Rules and the Exchange Act Exemptive Order provide broad relief for entities transacting in security-based swaps. • However, certain provisions of the securities laws do apply to security-based swaps, notably antifraud and antimanipulation provisions (Section 17(a) of the Securities Act). This is MoFo. | 2626 Industry Commentary • Broad current relief, plus a deliberative approach, means that industry has a comfort level with SEC’s process. • However, it is still not clear how much relief will be granted on a permanent basis. • Industry participants have argued that permanent relief from certain provisions would be appropriate. This is MoFo. | 2727 Industry Commentary • In particular, relief from Section 5 of the Securities Act, which requires a registration statement to be in effect as to a security, is seen as necessary. • The primary issue that Section 5 seeks to address, adequate disclosure, would in many cases not be an issue for a security-based swap. • SEC business conduct standards are expected to require disclosures of material information. • Requiring registration statements in the context of security-based swaps would be unduly burdensome and expensive. This is MoFo. | 2828 Industry Commentary • The industry also seeks permanent relief from certain provisions of the Exchange Act. • SIFMA has submitted to the SEC a letter dividing the provisions of the Exchange Act into different categories: • Provisions that should apply to security-based swaps (such as antifraud provisions and certain entity-level requirements, such as capital rules and financial reporting rules) • Provisions that seem inapplicable or unworkable for securitybased swaps (such as issuer disclosures, rules on missing or stolen securities) • Provisions that are unnecessary for registered broker-dealers’ dealing and brokering activities because they overlap with existing broker-dealer regulations (such as business conduct rules) This is MoFo. | 2929 Relief Under Interim Final Rules • Interim Final Rules provide relief under each of the • Securities Act • Exchange Act, and • Trust Indenture Act of 1939 • The postponements of expiration dates aim to maintain status quo. • They apply to those security-based swaps that prior to July 16, 2011 were security-based swap agreements and are defined as “securities” under the Securities Act and the Exchange Act as of July 16, 2011 due solely to the provisions of Title VII of Dodd-Frank. This is MoFo. | 3030 Relief Under Interim Final Rules • Specifically, the Interim Final Rules, subject to conditions, exempt offers and sales of security-based swap agreements that became security-based swaps on the effective date of Title VII from: • All provisions of the Securities Act (other than antifraud provisions); • Exchange Act registration requirements; and • Provisions of the Trust Indenture Act. This is MoFo. | 3131 Relief Under Interim Final Rules • Securities Act Rule 240 • Provides that, other than antifraud provisions contained in Section 17(a) of the Securities Act, the Securities Act does not apply to the offer or sale of any security-based swap that is: • a security-based swap agreement, as defined in the Securities Act as in effect prior to July 16, 2011; and • entered into between eligible contract participants (as defined in the Commodity Exchange Act as in effect prior to July 16, 2011). • Rule will permit the offer or sale of these security-based swaps between eligible contract participants without requiring compliance with Securities Act Section 5, which requires a registration statement to be in effect as to a security. This is MoFo. | 3232 Relief Under Interim Final Rules • In Securities Act Rule 240, the use of definitions in effect prior to July 16, 2011 (“security-based swap agreement” and “eligible contract participant”) is intended to preserve the status quo ante and avoid uncertainty as to the applicability of the Securities Act registration requirements. • In order to qualify as a “security-based swap agreement,” an agreement had to be entered into between eligible contract participants and subject to individual negotiation. This is MoFo. | 3333 Relief Under Interim Final Rules • Exchange Act Rule 12a–11 • Provides that the provisions of Section 12(a) of the Exchange Act do not apply to any security-based swap offered and sold in reliance on Rule 240 under the Securities Act. • Section 12(a) of the Exchange Act provides that it is unlawful for a member, broker, or dealer to effect any transaction in any security (other than an exempted security) on a national securities exchange unless a registration is effective as to such security for such exchange. • Exemption is intended to allow trading activities relating to those security-based swaps that are security-based swap agreements with eligible contract participants to continue, provided the parties rely on the Rule 240 Securities Act exemption with respect to such securitybased swaps. This is MoFo. | 3434 Relief Under Interim Final Rules • Exchange Act Rule 12h–1(i) • Adds an exemption for registration under Section 12(g) of the Exchange Act for any security-based swap offered and sold in reliance on Rule 240 under the Securities Act. • Section 12(g) requires certain issuers engaged in interstate commerce, one of whose classes of securities is held by either 2,000 persons or 500 persons who are not accredited investors, to register such security with the SEC by filing a registration statement. • SEC noted that, while it was not sure that there would be a class of security-based swaps that would be subject to registration under Exchange Act Section 12(g), it was appropriate to provide this exemption while the SEC learns about and evaluates the types of security-based swap transactions that have been and will be transacted. This is MoFo. | 3535 Relief Under Interim Final Rules • Trust Indenture Act Rule 4d-12 • Provides that any security-based swap offered and sold in reliance on Securities Act Rule 240, whether or not issued under an indenture, is exempt from the Trust Indenture Act. • SEC does not believe the protections contained in the Trust Indenture Act are currently needed with respect to security-based swaps. • Trust Indenture Act is aimed at addressing problems that unregulated debt offerings pose for investors and the public, and provides a mechanism for debt holders to protect and enforce their rights with respect to the debt. This is MoFo. | 3636 Relief Under Interim Final Rules • Protections contained in the Trust Indenture Act are not needed to protect eligible contract participants to whom a sale of security-based swaps is made in reliance on Securities Act Rule 240. • Security-based swaps are contracts between two parties and, as a result, do not raise the same problem regarding the ability of parties to enforce their rights under the instruments as would, for example, a debt offering to the public. • Enforcement of contractual rights and obligations under securitybased swaps would occur directly between the parties, and Trust Indenture Act provisions would probably not provide any additional meaningful substantive or procedural protections. This is MoFo. | 3737 General Exemptive Order • Unlike the relief under the Interim Final Rules, the relief provided by the General Exemptive Order is aimed not at relieving concerns arising from the treatment of securitybased swaps as “securities” under the Securities Act, the Exchange Act and the Trust Indenture Act, but instead assuring that market participants are not required prematurely to come into compliance with requirements imposed by Dodd-Frank. • Relief is aimed at particular Dodd-Frank requirements. This is MoFo. | 3838 Relief Under General Exemptive Order • Relief for Security-based Swap Dealers and Major Security-based Swap Participants – Swap Reporting: • No reporting party for a security-based swap is required to report any pre-enactment security-based swap until the date that is six (6) months after the date on which security-based swap data repository that is capable of accepting the asset class of such security-based swap is registered with the SEC. • Security-based swap dealers are expected generally to be reporting parties for the security-based swaps to which they are parties. This is MoFo. | 3939 Relief Under General Exemptive Order • Relief for Security-based Swap Dealers and Major Security-based Swap Participants – Associated Persons • Security-based swap dealers and major security-based swap participants are excepted from a prohibition with respect to permitting persons who are associated with the security-based swap dealer or major security-based swap participant, and are subject to a statutory disqualification, to effect or be involved in effecting security-based swaps on behalf of such security-based swap dealer or major security-based swap participant, but only until the date upon which rules adopted by the SEC to register security-based swap dealers and major security-based swap participants become effective. This is MoFo. | 4040 Relief Under General Exemptive Order • Relief for Security-based Swap Dealers and Major Security-based Swap Participants – Segregation of Collateral • Security-based swap dealers and major security-based swap participants are exempt from the requirement to segregate their counterparty’s initial margin in relation to non-cleared swaps upon the counterparty’s request until the date upon which the rules adopted by the SEC to register security-based swap dealers and major security-based swap participants become effective. This is MoFo. | 4141 Relief Under General Exemptive Order • Relief in Relation to Security-Based SEFs – Operation without Registration • Persons that operate a facility for the trading or processing of security-based swaps that is not registered as a national securities exchange or that cannot yet register as a securitybased swap execution facility because final rules for such registration have not yet been adopted are exempt from the prohibition on operating such a facility unless such facility is registered as a security-based swap execution facility or national securities exchange until the earliest compliance date set forth in any of the final rules regarding registration of security-based swap execution facilities. This is MoFo. | 4242 Relief Under General Exemptive Order • Relief in Relation to Security-Based SEFs – Identification of Trading Venue • Registered clearing agencies under section 17A of the Exchange Act are exempt from the requirement that a national securities exchange, if it also operates a security-based swap execution facility, and employs the same electronic trade execution system for securities-based swaps on both the exchange and the facility, identify whether trading of such swaps is occurring on the national securities exchange or on the execution facility, until the earliest compliance date set forth in any of the final rules regarding registration of security-based swap execution facilities. This is MoFo. | 4343 Relief Under General Exemptive Order • Relief for Security-based Swap Data Repositories – Data confidentiality • Entities meeting the definition of security-based swap data repository are exempt from certain requirements contained in section 13(n) of the Exchange Act relating, in part, to data access, confidentiality and sharing, until the earlier of (1) the date the SEC grants registration to the security-based swap data repository and (2) the earliest compliance date for any of the final rules regarding the registration of security-based swap data repositories. This is MoFo. | 4444 Relief Under General Exemptive Order • Registered Clearing Agencies – Chief Compliance Officer • Registered clearing agencies under section 17A of the Exchange Act are exempt from the requirement to appoint a chief compliance officer until the earliest compliance date set forth in any of the final rules regarding the duties of a chief compliance officer under section 3C(j)(2) of the Exchange Act. This is MoFo. | 4545 Relief Under General Exemptive Order • Non-Voidability: • No contract entered into on or after July 16, 2011 will be void by reason of section 29(b) of the Exchange Act (which provides generally that contracts made in violation of the Exchange Act are void) because any person that is a party to the contract violated a provision of the Exchange Act that was amended or added by Subtitle B of Title VII of Dodd-Frank and for which the SEC has taken the view that compliance will be triggered by registration of a person or by adoption of final rules by the SEC, or for which the SEC has provided an exception or exemptive relief, until such date as the SEC specifies. This is MoFo. | 4646 Relief Under General Exemptive Order • Eligible Contract Participant Requirement: • A person meeting the definition of eligible contract participant as set forth in section 1a(12) of the Commodity Exchange Act (as in effect on July 20, 2010) was exempt from the requirement that, unless a security-based swap is transacted on a registered national securities exchange, each party to such swap must be an eligible contract participant, until the effective date for the final rules further defining the term eligible contract participant, provided that such person effects such transaction with or for a person that also meets the definition of eligible contract participant as set forth in section 1a(12) of the Commodity Exchange Act (as in effect on July 20, 2010). • The CFTC and SEC released joint rules further defining “eligible contract participant” in May 2012, and this temporary relief is no longer available. This is MoFo. | 4747 Relief Under General Exemptive Order • Relief for Security-based Swap Dealers and Major Security-based Swap Participants – Swap Clearing: • Security-based swap dealers and major security-based swap participants were exempt from the requirement to clear security-based swaps at the request of their counterparties until the earliest compliance date set forth in any of the final rules regarding the procedures according to which the SEC will determine which security-based swaps should be designated for mandatory clearing. • The SEC issued rules relating to the process for submissions for the review of security-based swaps for mandatory clearing June 2012, and it appears that this temporary exemption is no longer available. This is MoFo. | 4848 Exchange Act Exemptive Order • Exchange Act Exemptive Order addresses matters pertaining to Exchange Act other than the registrationrelated matters addressed in the Interim Final Rules. This is MoFo. | 4949 Relief Under Exchange Act Exemptive Order • First exemption is a broad temporary exemption in connection with security-based swap activity. • Subject to exclusions, each eligible person is exempt from the provisions of the Exchange Act, and the rules and regulations thereunder, solely in connection with the person’s activities involving security-based swaps. • Exemption is available to any person that meets the definition of “eligible contract participant” as set forth in section 1a(12) of the Commodity Exchange Act (as in effect on July 20, 2010), other than registered broker-dealers (addressed in the second exemption, below) and self-regulatory organizations. This is MoFo. | 5050 Relief Under Exchange Act Exemptive Order • Second exemption is a temporary exemption specific to securitybased swap activities of registered brokers and dealers. • Subject to exclusions, a broker or dealer registered under section 15(b) of the Exchange Act is exempt from certain provisions of the Exchange Act solely with respect to security-based swaps. • A registered broker or dealer will be exempt from the following provisions in connection with security-based swaps solely to the extent that those provisions or rules do not apply to the broker’s or dealer’s security-based swap positions or activities as of July 15, 2011: • Sections 7c, 15(c)(3), and 17(a) and (b), Regulation T, 12 CFR 220.1 et seq., Rule 240.15c3–1, Rule 240.15c3–3, Rule 240.17a–3, Rule 240.17a–4, Rule 240.17a–5, Rule 240.17a–8, and Rule 240.17a–13. This is MoFo. | 5151 Relief Under Exchange Act Exemptive Order • Third temporary exemption provides partial relief from sections 5 and 6 of the Exchange Act for market participants, including certain brokers and dealers and central counterparties, in connection with their security-based swap activities. • Section 5 of the Exchange Act makes it unlawful for any broker, dealer or exchange to use any facility of an exchange to effect a transaction in a security unless the exchange is either registered as a national securities exchange or exempted from registration. • Section 6 of the Exchange Act states the conditions upon which an exchange may be registered as a national securities exchange. This is MoFo. | 5252 Relief Under Exchange Act Exemptive Order • The expiration of this exemption is tied to the earliest compliance date for rules regarding the registration of security-based swap execution facilities (not the compliance date for rules further defining “security-based swap” and “eligible contract participant”). • As a technical matter, this exemption was not extended by the SEC’s February 2013 order extending other exemptions under the Exchange Act Exemptive Order, but it remains in effect. This is MoFo. | 5353
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