SEC's Stein blasts capital, margin plan for swap dealers as 'shadow rulemaking'

12 October 2018 7:31am
US Securities and Exchange Commission member Kara Stein issued a blistering critique of the agency’s long-awaited proposal Thursday on capital and margin standards for security-based swap dealers, calling it “shadow rulemaking.”

Stein, a Democrat who was instrumental as a Senate staffer in drafting the Dodd-Frank Act, said the plan “buried” major policy shifts from a never-enacted 2012 proposal now being reopened for comment.

The policy changes “could mean that fewer financial resources would be available if problems arise,” the commissioner said. “And more broadly, this could trigger a lack of confidence in the adequacy of resources, or spark a run in the market, creating asset calls that spiral out of control.”