[ by Melanie Gretchen and Howard Haykin ] An SEC policy statement on Monday details the order in which it expects to roll out the new rules governing the derivatives market.  The "roadmap," nicknamed by SEC Chairman Mary Schapiro, covers final rules to be adopted by the SEC under the 2010 Dodd-Frank Reform Act. Dodd-Frank. The policy statement does not estimate when the rules would be put in place, but describes the sequence in which they would take effect.  And so, the SEC is seeking public comment on its plan to phase in these final rules.  The phased-in approach is intended to avoid the disruption that could occur if all the new rules took effect simultaneously. Comments are requested over the next 60 or so days. Policy Statement - 5 Rule Categories. The policy statement, which is 69 pages long, deals with provisions that establish a framework for the regulation of security-based swaps and security-based swap market participants under the Exchange Act.  It also presents a sequencing of the compliance dates for these final rules by grouping the rules into five categories and describes the interconnectedness of the compliance dates for these rules, both within and among the five categories.  The Statement also describes the timing of the expiration of the relief previously granted by the Commission that provided exemptions from certain provisions of the Exchange Act, the Securities Act of 1933, and the Trust Indenture Act of 1939. The issues discussed in this Statement are set out in relation to the following 5 categories of rules:

1. rules further defining the terms “security-based swap,” “security-based swap agreement,” “mixed swap,” “security-based swap dealer,” “major security-based swap participant,” and “eligible contract participant,” (the “Definitional Rules”) and the rules concerning the treatment of cross-border SB swap transactions and non-U.S. persons acting in capacities regulated under Subtitle B of Title VII (the “Cross-Border Rules”);
2. rules pertaining to registration and regulation of SDRs ("registered security-based swap data repository"), the reporting of SB swap transaction data to SDRs, and the public dissemination of SB swap transaction data;
3. rules pertaining to mandatory clearing process of SB swap transactions, clearing agency standards, and end-user exception from mandatory clearing;
4. rules pertaining to registration and regulation of SBSDs ("security-based swap dealers") and MSBSPs ("major security-based swap participants"); and
5. rules pertaining to mandatory trading of SB swap transactions, including rules pertaining to registration and regulation of SB SEFs ("security-based swap execution facility").

Foundation. Title VII of the Dodd-Frank Act establishes a framework to regulate OTC derivatives, authorizing the CFTC to regulate "swaps," and the SEC to regulate "security-based swaps."  To date, the Commission has proposed nearly all the rules required under the Act and already has begun to adopt those rules. The policy statement also delves into the timing of the expiration of the temporary relief the SEC previously granted to securities-based swaps market participants.  The relief exempts these market participants from certain provisions of the Securities Act of 1933, the Securities Exchange Act of 1934, and the Trust Indenture Act of 1939 — much of which is due to expire when certain final rules under Title VII become effective. For further details, go to [SEC], the [SEC's Policy Statement], and the [Submit Comments form].