SEC Adopts Amended Cross-Border Rule concerning "ANE" Transactions (Fed. Reg.)

The SEC adopted amendments to SEA Rule 3a71-3 that affect a non-U.S. firm with personnel located in a U.S. branch or office who are used to "arrange, negotiate, or execute" ("ANE") a security-based swap ("SBS") transaction in connection with the firm's dealing activity ("ANE Transaction"). The amended cross-border rule requires these non-U.S. firms to count such transactions when determining whether the firm's threshold of dealing requires it to register as an SBS dealer. The SEC also adopted changes to related rules. The SEC's adoption of the amendments was published in the Federal Register.

The SEC did not adopt aspects of the proposal relating to the implications of ANE Transactions beyond SBS dealer registration (i.e., whether business conduct and other requirements would be implicated). Instead, it reopened the comment periods for those aspects of the proposal.

The SEC indicated that the final rule amendments are "generally consistent with [the] proposal." A Cadwalader memorandum summarizing the SEC proposal is available here.

The final amendments will be effective on April 19, 2016. The compliance date for the amendments is the later of: (i) February 21, 2017; or (ii) two months prior to the Registration Compliance Date ("SBS Entity Counting Date").