Strategic Shareholder Climate and Risk Financial Financial Barclays PLC 375 report information sustainability report Governance review review statements Annual Report 2022 Supervision and regulation (continued) and SEC rules. Barclays Bank PLC is also Many of the regulations under the CFTC matching service providers; (ii) a proposed subject to regulation by the FRB, and is and SEC regimes are similar in scope of rule that would mandate central clearing of many US Treasury securities transactions both provisionally registered with the application. The rules of both the SEC and CFTC as a swap dealer and conditionally the CFTC are roughly divided into and would amend the broker-dealer registered with the SEC as a security- “transaction-level rules” and “entity-level customer protection rule as it applies to based swap dealer. In addition, Barclays rules”. Transaction-level rules apply only in margin posted for transactions in US Bank Ireland PLC is provisionally registered circumstances in which at least one of the Treasury securities, which could impose additional costs on the Group’s Treasury as a Swap Dealer with the CFTC. parties to the swap or security-based swap transaction has sufficient nexus to the securities trading activity; and (iii) a series Accordingly, Barclays Bank PLC and United States. Entity-level rules apply to of market structure proposals which would Barclays Bank Ireland PLC are subject to swap dealers or security-based swap have a significant impact on securities CFTC rules on business conduct, record- dealers across all their swap or security- trading activity by BCI and other Group keeping and reporting and to FRB rules on entities, as the SEC proposals would (a) based swaps without distinction as to the capital and margin. The CFTC has counterparty or location of the impose a new SEC best execution approved certain comparability transaction. Unlike the CFTC, certain SEC obligation on securities broker-dealers, determinations that permit substituted rules apply to transactions entered into by including BCI, (b) require that certain compliance with non-US regulatory non-US security-based swap dealers individual investor orders be exposed to regimes for certain swap regulations. auctions before they could be executed based on the location from which certain Substituted compliance is a recognition activities are undertaken. These SEC rules internally by certain trading centres, and (c) program whereby compliance with a apply to security-based swap transactions amend certain rules under Regulation NMS comparable regulatory requirement of a facing non-US person counterparties that (National Market System) to adopt variable foreign jurisdiction is deemed to serve as a are “arranged, negotiated or executed” by minimum pricing increments, reduce substitute for compliance with comparable US-based security-based swap dealer access fee caps for protected quotations, requirements of the U.S. Commodity personnel. This distinction expands the require that the amount of exchange fees Exchange Act and the CFTC’s regulations. scope and impact of the SEC regime to and rebates be determinable at the time of Substituted compliance has been granted transactions with a greater number of execution, and update and expand to only in respect of certain requirements non-US counterparties. certain broker-dealers the disclosures promulgated by regulatory authorities in required for order executions in NMS As noted above, Barclays Bank PLC and certain identified jurisdictions that the stocks, among other changes. CFTC believes are sufficiently comparable Barclays Bank Ireland PLC are subject to to its own requirements. Substituted FRB rules on capital and margin. Other regulation compliance was granted in respect of Consumer protection, culture, and In 2022, the SEC proposed Rule 10B-1 that certain European Union requirements in diversity and inclusion would require any person with a security- December 2013. In December 2022, the based swap position (aggregated across all In May 2021, the FCA published a CFTC extended temporary relief that affiliated persons) that exceeds any of the consultation paper proposing the would permit swap dealers located in the thresholds specified by the SEC to imposition of a new consumer duty on UK to continue to rely on existing CFTC promptly report certain information by the firms. The duty looks to set higher substituted compliance determinations next business day, including the identity of expectations for the standard of care that with respect to EU requirements in the the reporting person and the security- firms provide to customers and will impact event of a withdrawal of the UK from the based swap position, as well as the all aspects of Barclays' retail businesses, EU. Barclays Bank PLC and Barclays Bank ownership of securities positions related including every customer journey, product Ireland PLC rely upon the CFTC’s grant of to the security-based swap position. Such and service as well as our relationships with substituted compliance as a means to reports would be available publicly. If partners, suppliers and third parties. This comply with certain swap dealer adopted as proposed, this rule could will result in significant implementation requirements. increase the burden and cost to Barclays costs and there will also be higher ongoing Barclays Bank PLC conditionally registered Bank PLC of utilising security-based costs for the industry as a result of as a security-based swap dealer with the swaps. extensive monitoring and evidential SEC as of 1 November 2021. As a requirements. Final rules were published in Other regulatory developments in the registered security-based swap dealer, July 2022 and will come into force on 31 US Barclays Bank PLC is subject to SEC July 2023 for new and existing products or The SEC has also put forth a number of business conduct, recordkeeping and services that are open to sale or renewal, other recent proposals that, if adopted, reporting rules similar to the CFTC rules and on 31 July 2024 for closed products or could have a significant impact on the noted above. Like the CFTC, the SEC services. Group’s business and operations, approved certain comparability Our regulators have enhanced their focus including: (i) proposed amendments to determinations that permit conditional on the promotion of cultural values as a Exchange Act Rule 15c6-1 that would substituted compliance with non-US key area for banks, although they generally shorten the standard settlement cycle for regulatory regimes for certain security- view the responsibility for reforming most broker-dealer transactions in based swap regulations. Due to the culture as primarily sitting with the securities from two business days after the imposition by the SEC of more stringent industry. The UK regulators have also trade (T+2) to one business day after the requirements on which its grant of begun focusing on diversity and inclusion in trade (T+1), which could require significant substituted compliance is conditioned, financial services firms, with the Bank of changes to BCI’s settlement procedures Barclays Bank PLC is relying on substituted England, PRA and FCA having published a and practices, and new Exchange Act Rule compliance only with respect to a limited joint discussion paper and the FCA having 15c6-2 which would generally require number of SEC security-based swap published a policy statement on this topic market-wide improvements in the rate of dealer rules. in April 2022. same-day affirmations and on central