SEC Reopens Comment Period for Position Reporting of Large Security-Based Swap Positions

On June 21, 2023, the U.S. Securities and Exchange Commission (SEC) announced on its website the reopening of a consultation as regards the implementation of new Rule § 240.10B-1 relating to the disclosure of material security-based swap positions. The consultation was originally launched in December 2021.
Due to the issuance of „supplemental data and analysis“ by the SEC’s Division of Economic and Risk Analysis with respect to the reporting thresholds outlined in the proposed rule, the comment period will be reopened as outlined in the timeline following the publication of a corresponding notice in the Federal Register.
To recall, the new proposed rule would require Security-Based Swaps (SBS) position holders to report on their positions to the SEC once certain thresholds are exceeded. Latter depend upon the type of instrument covered and underlying the SBS: for debt securities (other than credit default swaps (CDS)), the gross notional threshold amount would be $300 million; for CDS the thresholds would be different depending upon the position the holder is taking in the underlying security (net long, net short, or net neutral). Equity based SBS would have to be reported based on two parameters: „the notional amount of the Security-Based Swap Position, and a threshold based on the total number of shares attributable to the Security-Based Swap Position as a percentage of the outstanding number of shares of that class of equity securities“. The report would have to be filed within one business day following a transaction that results in the security-based swap position exceeding the threshold and would require information on the SBS position holder, the position concerned, and information on the underlying securities.