SEC Votes to Limit Ownership of Derivatives Clearinghouses


U.S. regulators voted in favor of limiting financial institution ownership of derivatives clearinghouses, exchanges and trading platforms to 20% and capping ownership of venues that clear securities-based swaps at 40%, Bloomberg News reported.

Securities and Exchange Commission members voted unanimously to approve the proposal, which is designed to stop conflicts of interest in the derivatives market.

Regulators are looking to strengthen ownership limits within the $615 trillion derivatives market in an effort to enhance government response to the type of financial crises that struck the global markets two years ago, according to Bloomberg. Five banks, led by Goldman Sachs Group Inc. (GS) and JPMorgan Chase & Co. (JPM) control 97% of the U.S. derivatives market, Bloomberg said.

The Commodity Futures Trading Commission made a similar proposal to the SEC's earlier this month.