Nearly two thousand years ago, the Stoic philosopher and statesman Seneca the Younger observed that “every new beginning comes from some other beginning’s end.”  This remains as true today as it was then, and as it was in the 1990s when the band Semisonic built a song around it. 

I vote today in support of withdrawing the remaining unadopted portions of the November 2018 Swap Execution Facilities (SEF) and Trade Execution Requirement proposal (SEF Proposal).  With the beginning of a new SEF landscape based on other rules we are announcing today, it is appropriate to bring that proposal—which was itself a beginning of sorts—to an end. 

The SEF Proposal, which was championed by my predecessor Chairman Chris Giancarlo, was comprehensive in that it sought to codify staff no-action relief and otherwise resolve operational concerns of SEFs and market participants.  It also set forth structural reforms to the SEF regime beyond these operational fixes.  The SEF Proposal reflected a great deal of time, effort, and thought, and resulted in several rules ultimately adopted by the Commission.  I am grateful indeed for Chairman Giancarlo’s thought leadership and the path that the SEF Proposal set our agency upon.

In particular, our Commission yesterday adopted from the SEF Proposal: (1) two exemptions, pursuant to Commodity Exchange Act (CEA) section 4(c), from the trade execution requirement in CEA section 2(h)(8); and (2) final rules related to audit trail requirements for post-trade allocations, SEF financial resource requirements, and SEF chief compliance officer requirements.  With respect to the unadopted portions of the SEF Proposal, the feedback received from market participants and the public made clear that moving forward would require significantly more work and a re-proposal of the rules.  Therefore, I believe it is appropriate to withdraw those unadopted elements.  Doing so is also consistent with our Commission’s reasoning for withdrawing Regulation AT a few months ago—we can start a new beginning only once we have ended the prior beginning.