The U.S. Securities and Exchange Commission (SEC) on Wednesday proposed new rules intended to mitigate conflicts of interests, as the watchdog mulls over giving a cap to the stake that market players can hold in exchanges.
"Prior to passage of the Dodd-Frank Act, the over-the-counter derivatives market was largely unregulated. The new law fills a number of significant regulatory gaps and gives the SEC important new tools to better protect investors," the SEC said in a statement.
The new rules eyed to restrict an individual clearing agency participant from beneficially owning or voting more than 20 percent of any voting interest in the security-based swap clearing agency.
"The concern about conflicts of interest stems from the fact that the over-the-counter derivatives markets have a relatively high concentration of market activity through a limited number of dealers who earn significant revenues from their transactions," said SEC Chairman Mary L. Schapiro.
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