SEC Proposes Rules to Improve Clearing Agency Governance and to Mitigate Conflicts of Interest

The Securities and Exchange Commission today proposed new rules to help improve governance arrangements across all registered clearing agencies by reducing the likelihood that conflicts of interest may influence the board of directors or equivalent governing body of a registered clearing agency. "I was pleased to support this proposal because, if adopted, it would enhance governance standards for all registered clearinghouses, particularly with regards to conflicts of interest," said SEC Chair Gary Gensler. "I think these rules would help to build more transparent and reliable clearinghouses. This in turn would help ensure our markets are more resilient, protecting investors and building trust in our markets." The proposed rule would establish new governance requirements on board composition, independent directors, nominating committees, and risk management committees.