Securities and Exchange Commission Adopts New Rules for Clearing Agencies to “Mitigate Systemic Risks that Emerged during the Financial Crisis”


The Securities and Exchange Commission (“SEC”) announced new rules for risk management and operations of clearing firms. Clearing firms are essential to the proper function of the securities markets, playing an important role of clearing securities transactions between parties.  Many people with brokerage accounts will notice that their account statements identify a firm, other than the brokerage firm they deal with directly, as their clearing agent or firm.  Such firms handle trillions of dollars in transactions.

According to the SEC:

The new rule would require registered clearing agencies that provide central counterparty services to maintain certain standards with respect to risk management and operations. Among other things, the rules would set standards with respect to measurement and management of credit exposures, margin requirements, financial resources and margin model validation. The rule also establishes certain recordkeeping and financial disclosure requirements for all registered clearing agencies as well as several new operational standards for these entities.

Hopefully these new rules will serve to lower the risks relating to these clearing firms and build investor confidence in the markets.

Posted by Vincent D. Slavens who can be reached at