The Securities and Exchange Commission (SEC) has proposed amendments to Rule 3a12-8 that would add the debt obligations of the European Union to the list of foreign government debt obligations designated as “exempt securities.”
The proposed amendments would place futures contracts on European Union debt obligations under the jurisdiction of the CFTC. The move would be consistent with the regulatory treatment of futures on the debt obligations of several EU member states currently listed under the rule. The offerings of the underlying debt obligations would remain subject to federal securities laws, the commission said.
“For too long, gaps like this one—where the debt of several EU member states was covered but debt of the European Union itself was not—have created exactly the kind of inconsistency that breeds confusion rather than confidence in the markets,” SEC Chairman Paul S. Atkins said. “This proposal is harmonization in practice and builds on our efforts with the CFTC to preserve investor protection while closing regulatory gaps.”
According to the commission the proposed amendments would also leave unchanged the existing substantive requirements and provisions of Rule 3a12-8, including its application to the debt obligations of several EU member states and other foreign governments listed in the rule.
The proposal is being published on SEC.gov and will be published in the Federal Register. Once published to the Federal Register, it will be open for public comment for 60 days.