The Committee on Financial Services is meeting to mark up the following nine bills:
- H.R. 634, the Business Risk Mitigation and Price Stabilization Act of 2013: this amendment seems intended to fix an inconsistency in Dodd-Frank where (i) certain end users are specifically not required to provide collateral for OTC swaps but (ii) swap dealers are required to collect the collateral;
- H.R. 677, the Inter-Affiliate Swap Clarification Act: this amendment is intended to exempt certain swaps between affiliates from the clearing and SEF-execution requirements of Dodd-Frank;
- H.R. 701, To amend a provision of the Securities Act of 1933 directing the Securities and Exchange Commission to add a particular class of securities to those exempted under such Act to provide a deadline for such action: this provision amends Section 3(b) of the Securities Act to require the SEC to implement certain of the JOBS Act exemptions by October 31, 2013.
- H.R. 742, the Swap Data Repository and Clearinghouse Indemnification Correction Act of 2013: this amendment is essentially intended to facilitate cross-border sharing of swaps information between global financial regulators;
- H.R. 801, Holding Company Registration Threshold Equalization Act of 2013: would amend Section 12(g) of the Exchange Act to provide the same treatment for savings and loans, as is allowed for banks (and thus would allow more savings and loans to deregister under the Exchange Act);
- H.R. 992, the Swaps Regulatory Improvement Act; would amend Section 716 of Dodd-Frank to remove the provisions of the Section that discriminate against the U.S. branches of non-U.S. banks;
- H.R. 1062, the SEC Regulatory Accountability Act: to require the SEC to further explain the purposes for any new rules, to consider the cost-benefit of its rules, both before and after they are adopted; and also indicating that the various SROs should follow similar procedures as to their own rules;
- H.R. 1256, the Swap Jurisdiction Certainty Act: requiring the SEC and the CFTC to issue joint rules as to the cross-border application of the derivatives legislation;
- H.R. 1341, the Financial Competitive Act of 201: requiring the Financial Stability Oversight Council (“FSOC”) to conduct a study of the capital charges that U.S. financial regulators and non-U.S. regulators apply as to use of derivatives by financial institutions.
Lofchie Comment: It would be a long stretch to describe these proposals as generally deregulatory. H.R. 634 and H.R. 992 would make corrections to material mistakes in the drafting of Dodd-Frank that were pointed out by the Congressional supporters of the legislation immediately after the statute was adopted. H.R. 742 is intended to facilitate cross-border financial regulation. H.R. 801 treats savings and loans in the same manner as banks under the Exchange Act. H.R. 1341 requires a study. H.R. 701 imposes a deadline on certain SEC rulemaking that is required by the JOBS Act (I don’t know whether the deadline is realistic). H.R. 677 gives a limited exemption from regulation for swaps between corporate affiliates.
The requirement that the SEC and the CFTC coordinate their rules on cross-border regulation of swaps seems like good public policy, and something that the two Commissions could, and I believe should, do even in the absence of legislation.
The only measure which is really “deregulatory” is H.R. 1062, which imposes a good number of requirements on the SEC rulemaking process.