Opening Statement at the SEC Open Meeting


Commissioner Daniel M. Gallagher

U.S. Securities and Exchange Commission

Washington, D.C.
October 17, 2012

Thank you, Chairman Schapiro. I´d like to join my colleagues in thanking the staff for all of the hard work that went into today´s proposing release. In particular, I´d like to acknowledge the tremendous efforts of Randall Roy, Mark Attar, Sheila Swartz and their colleagues in the Division of Trading and Markets´ net capital group in putting together this tremendously complex and weighty document. Also, I want to acknowledge the hard, excellent work of the staff of the Division Risk, Strategy, and Financial Innovation.

Substantial as today´s proposing release is, however, it´s important to note, as the Chairman did in her remarks, that this is merely part of an ongoing process involving our fellow regulators at the CFTC, the banking agencies, and in the international community as well. It is incumbent on us to be apprised of, and have a working understanding of, the efforts of those other regulators as, in the end, some market participants will be subject to many or all of the regulations that are ultimately adopted.

As discussed in the release, the prudential regulators have proposed capital and margin requirements for bank swap dealers, bank security-based swap dealers, bank swap participants, and bank major security-based swap participants, while the CFTC has proposed capital and margin requirements for nonbank swap dealers and nonbank major swap participants as well as segregation requirements for non-cleared swaps and has adopted segregation requirements for cleared swaps. Furthermore, in response to the publication of a consultative document on margin requirements for noncentrally-cleared derivatives by the Basel Committee and IOSCO, the prudential regulators and the CFTC recently re-opened their comment periods for their capital and margin rule proposals for swaps.

As we have seen, action taken by any of those other regulators can fundamentally affect what we are doing at the SEC. Today´s proposing release will add our voice to the ongoing conversations on these critical subjects, and I´m pleased to be able to support it.