SEC Exemptive Relief in Connection with Effective Date of Title VII of Dodd-Frank: SEC Issues Order to Provide Relief from Certain Provisions of Title VII That Would Be Effective on July 16, 2011

Sullivan & Cromwell LLP - June 22, 2011

On June 15, the Securities and Exchange Commission issued an order (the “Order”) providing temporary relief from most of the requirements of Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) relating to security-based swaps (“SBS”) that would otherwise have applied on July 16, 2011 (the “Effective Date”). The Order makes clear that substantially all of Title VII’s requirements applicable to SBS will not go into effect on the Effective Date. Although the Order is now in effect, the SEC is soliciting public comments until July 6, 2011.

On June 10, the SEC announced that it was taking a series of actions in the coming weeks to clarify the requirements that will apply to SBS transactions as of the Effective Date. The release accompanying the Order notes that the SEC intends to take other action to address SBS under various provisions of the federal securities laws, and that it intends to consider adopting a detailed implementation plan once all of the key rules have been proposed under Title VII. In addition, on June 14, the Commodity Futures Trading Commission issued a proposed order providing temporary relief from certain swaps-related provisions of Title VII of Dodd-Frank that would otherwise have taken effect on the Effective Date.