Gensler Delivers Remarks Covering Derivatives Markets at ISDA Annual Meeting
On May 11, SEC Chair Gary Gensler spoke at the International Swaps and Derivatives Association (ISDA) Annual Meeting on new risks in the derivatives markets. The majority of his remarks covered securities-based swaps and the implementation of new rules around swaps including dealer registration, central clearing, security-based swap execution facilities, post-trade transparency, and new fraud provisions. Gensler also highlighted crypto-based derivatives, stating plainly: “Make no mistake: If a swap is based upon a crypto asset that is a security, then that is a security-based swap” and the offer and platform that is hosting the offer fall under the Commission’s veil. The second part of Gensler’s speech focuses on ETFs and complex products use of swaps, including the rise of bitcoin ETFs. Gensler noted “I’ve asked our Division of Investment Management and Division of Examinations to take a renewed and focused look at the use of derivatives by registered investment companies so that they’re compliant with our rules.” Additionally, the re-emphasized the compliance date for the October 2020 “Use of Derivatives” rule comes later this year. Click here to read an article from Stradley Ronon lawyers summarizing the fund board’s role under the derivatives rule which will go into effect in August.