Overview
Title
Submission for OMB Review; Comment Request; Extension: Rule 239
Agencies
ELI5 AI
The SEC wants to keep checking on a special kind of financial trade called security-based swaps. They want to make sure certain rules are followed, and they need permission to continue getting information about it. People can share their thoughts about this until April 4, 2025.
Summary AI
The Securities and Exchange Commission (SEC) has asked the Office of Management and Budget (OMB) to extend their approval for collecting specific information as outlined in Rule 239, which involves exemptions for security-based swaps by clearing agencies. This rule ensures that information about these swaps is available to relevant market participants. The SEC estimates that each clearing agency will spend about 2 hours updating this information 20 times a year, resulting in a total of 180 annual reporting hours. The public is invited to comment on the necessity and impact of this information collection by April 4, 2025.
Keywords AI
Sources
AnalysisAI
The submission for OMB Review by the Securities and Exchange Commission (SEC) involves a request to extend the approval for collecting certain information related to securities trading. This information collection is specifically related to Rule 239, which provides certain exemptions for security-based swaps that are issued by clearing agencies. The purpose of this rule is to ensure that important information about these swaps reaches eligible market participants. In essence, the SEC is seeking to extend permission to continue requiring this information as per past practice, accounting for an estimated annual burden of 180 hours across six respondents.
Key Issues and Concerns
Several issues arise from the review of the document:
Lack of Practical Utility Explanation: The document references the need for collecting information but does not clearly articulate the practical utility or benefit that the information brings. It would improve understanding if the document outlined specific reasons or examples of how this information is useful to the market or to regulatory agencies.
Unclear Respondent Numbers: The document calculates the burden based on six respondents but fails to justify why this particular number was chosen. A more detailed explanation or context around the choice of these respondents could enhance the clarity and reliability of the estimates provided.
Vague Internal Preparation Details: While the document quantifies the preparation time for information updates, it lacks specifics on what the preparation entails. Understanding what the process involves can provide a better gauge of whether the estimated time is realistic.
Undefined Remaining Time Utilization: The document states that 75% of the preparation time is spent internally but does not explain how the remaining 25% is used. Detailing this could provide a fuller picture of how burdensome the requirement truly is.
Encouraging Stakeholder Feedback: While the document does invite comments on various aspects, it could do more to facilitate or encourage feedback from stakeholders. This might involve offering clearer guidance on how to submit feedback or emphasizing the importance of stakeholder insights.
Complex Legal Language: The document uses dense legal jargon and references numerous specific statutes and regulations. This complexity can make it difficult for a general audience to fully grasp what is being discussed or required.
Economic Impact Analysis: The potential economic impact or financial burden on the respondents, such as financial costs to the clearing agencies, are not addressed. An exploration of these implications would benefit those trying to understand the full impact of the requirement.
Public and Stakeholder Impact
For the general public, this document may hold limited direct impact since it concerns specific procedural and regulatory actions related to securities trading, which may be outside the purview of everyday activities. However, it indirectly influences the transparency and safety of financial markets, which is a common interest for many, particularly investors.
For stakeholders, particularly the six identified clearing agencies, the document outlines requirements that could impact their operational procedures and resource allocation. The potential need to dedicate significant time to compliance, without clear financial compensation or benefit, might be seen as a burden. Conversely, the consistent updating of security-based swap information could positively impact these agencies by promoting transparency and trust in their operations among market participants.
Overall, while the document aims to continue a necessary regulatory practice, clearer communication and consideration of its broader impacts and the burden it places on specific participants would be beneficial.
Issues
• The document lacks a clear explanation of the practical utility of the information collected under Rule 239, which could help ascertain its necessity.
• It's not clear why the document uses 6 respondents for the burden calculation; more context or justification might be helpful to understand accuracy.
• The exact process of how the clearing agency prepares the information internally seems vague; more details would help assess the estimation of preparation time.
• The document mentions 75% of the time spent is prepared internally, yet it does not detail how the remaining 25% of the time is utilized, creating an incomplete understanding of the effort involved.
• While the submission mentions that comments can be made on various factors like utility and burden, it could benefit from more encouragement or facilities for stakeholders to voice concerns or suggestions.
• The complex language, such as detailed legal references and provisions, may make it difficult for an average reader to fully comprehend the obligations and expectations set forth.
• The economic impact or financial implications of this burden on the six clearing agency respondents are not addressed clearly, leaving potential cost concerns unexplored.