Subcommittee Discusses Bipartisan Bills to Fix Dodd-Frank Derivatives Provisions and to Require Cost-Benefit Analyses

Various measures to fix the unexpected consequences of derivatives provisions in the Dodd-Frank Act, and to require the Securities and Exchange Commission (“SEC”) to conduct cost-benefit analyses of regulations, were discussed during a hearing today of the Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises.

The following is a summary of the legislation which the subcommittee discussed:

  • H.R. 634, the Business Risk Mitigation and Price Stabilization Act of 2013, introduced by Reps. Michael Grimm (R-NY), Gary Peters (D-MI), Austin Scott (R-GA) and Mike McIntyre (D-NY), would exempt end users from the margin and capital requirements of Title VII of the Dodd-Frank Act.
  • H.R. 677, the Inter-Affiliate Swap Clarification Act, introduced by Reps. Steve Stivers (R-OH), Marcia Fudge (D-OH), Chris Gibson (R-NY) and Gwen Moore (D-WI), would exempt inter-affiliate trades from the Dodd-Frank Act’s margin, clearing, and reporting requirements.
  • H.R. 742, the Swap Data Repository and Clearinghouse Indemnification Act of 2013, introduced by Reps. Rick Crawford (R-AR), Sean Patrick Maloney (D-NY), Bill Huizenga (R-MI) and Gwen Moore (D-WI), would remove an indemnification requirement imposed on foreign regulators by the Dodd-Frank Act as a condition of obtaining access to data repositories.
  • H.R. 992, the Swaps Regulatory Improvement Act, introduced by Reps. Randy Hultgren (R-IL), James Himes (D-CT), Richard Hudson (R-NC) and Sean Patrick Maloney (D-NY), would repeal most of Section 716 of the Dodd-Frank Act. Section 716 (also referred to as “Lincoln” or “push-out”) prohibits “federal assistance” – defined as “the use of any advances from any Federal Reserve credit facility or discount window . . . [or] Federal Deposit Insurance Corporation insurance or guarantees” – to “swaps entities,” which include swap dealers and major swap participants, securities and futures exchanges, swap-execution facilities, and clearing organizations.
  • H.R. 1062, the SEC Regulatory Accountability Act, introduced by Capital Markets Subcommittee Chairman Garrett (R-NJ), would direct the SEC to follow President Obama’s Executive Order No. 13563, which requires government agencies to conduct cost-benefit analyses to ensure that the benefits of any rulemaking outweigh the costs.
  • H.R. 1256, the Swap Jurisdiction Certainty Act, introduced by Reps. Garrett (R-NJ), John Carney (D-DE), Michael Conaway (R-TX) and David Scott (D-GA), would require the SEC and CFTC to jointly issue rules relating to swaps transacted between U.S. persons and non-U.S. persons.
  • H.R. 1341, the Financial Competitive Act of 2013, introduced by Rep. Stephen Fincher (R-TN), requires the Financial Stability Oversight Council (“FSOC”) to study the likely effects of the differences between the U.S. and other jurisdictions in implementing the derivatives credit valuation adjustment (“CVA”) capital requirement.

View Press Release in full here (links externally to Financial Services website).