By Katanga Johnson

WASHINGTON, (Reuters) – A U.S. market regulator voted Wednesday to approve new rules. The agency would require security-based trading platforms to register as a result of increasing transparency in the OTC derivatives market.

According to the U.S Securities and Exchange Commission, these proposals would be in compliance with the Dodd-Frank Financial Reform Law. It was passed after the global financial crisis of 2007-09. The law mandates that there should be greater oversight over the multitrillion-dollar derivatives markets.

Public consultation is required for these measures. Swaps execution facilities (SEFs) are platforms who must register with the SEC. This would allow the agency to regulate more closely platforms that trade security-based options.

Wednesday’s proposal package, also known as Regulation Swaps Execution (or Regulation Swaps Execution), was approved unanimously by all three Democratic officers and the Agency’s lone Republican Commissioner.

They could better coordinate the SEC’s rules and a comparable but larger rule from the Commodities Future Trading Commission.

While the CFTC oversees all financial contracts in which two counterparties agree to exchange or “swap” payments with each other as a result of changes in interest rates or commodity prices, the SEC’s rules would focus on swaps based on a security or a credit default swap.

Gary Gensler (SEC Chair) stated the rules were designed to help buyers and sellers find transparency in pre-trade pricing. This will lower risk and protect investors.

SEC proposed that SEFs would implement the trade execution requirement and cross-border application. It makes it illegal for a Swap transaction to be entered into without it being submitted to clearing organizations.

This move is designed to minimize conflicts of interests at security-based SEFs that are newly registered, clearing agencies, and exchanges. It also promotes competition and market integrity.

It stated that the measures will not be applied to existing platforms registered with the SEC to act as clearing agencies or those whose operations aim to improve the accuracy of valuations at the end of the day.