The House Financial Services Committee passed bipartisan bills to amend the derivatives provisions in the Dodd-Frank Act, to require cost-benefit analyses to be done at the SEC, and to require faster implementation of the JOBS Act.
The following is a summary of the legislation that the committee passed today including the vote count.
H.R. 634 (59-0): 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 Dodd-Frank Title VII (“Wall Street Transparency and Accountability”).
H.R. 677 (50-10): 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. 701 (passed by voice vote): To amend a provision of the Securities Act of 1933 directing the SEC to add a particular class of securities to those exempted under such Act to provide a deadline for such action, introduced by Reps. Patrick McHenry (R-NC), Anna Eshoo (D-CA), David Scott (D-GA), David Schweikert (R-AZ), and Scott Garrett (R-NJ). H.R. 701 would require the SEC to finalize the rules to implement JOBS Act Title IV also known as “Regulation A+” by October 31, 2013.
H.R. 742 (52-0): 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. 801 (passed by voice vote): The Holding Company Registration Threshold Equalization Act of 2013, introduced by Reps. Steve Womack (R-AR), James Himes (D-CT), and Ann Wagner (R-MO). H.R. 801 would amend JOBS Act Title VI (“Capital Expansion”).
H.R. 992 (53-6): 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 Dodd-Frank Section 716 (“Prohibition against Federal Government bailouts of swaps entities”).
H.R. 1062 (31-28): The SEC Regulatory Accountability Act, introduced by Capital Markets Subcommittee Chairman Scott 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. The Executive Order also requires that regulations be accessible, consistent, written in plain language, and easy to understand. Because the SEC is an independent agency, it is not required to follow the Executive Order. Former SEC Chairman Mary Schapiro indicated that the SEC will abide by the Executive Order. This bill codifies the Executive Order.
H.R. 1256 (48-11): 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. 1256 would also exempt a non-U.S. person in compliance with the swaps regulatory requirements of a G20 member nation from U.S. swaps requirements unless the SEC and CFTC jointly determine that the regulatory requirements are not “broadly equivalent” to U.S. swaps requirements.
H.R. 1341 (59-0): 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.
Lofchie Comment: We also summarized these bills in yesterday’s news. Link here. Some press reports have described these bills as deregulatory. With the arguable exception of H.R. 1062 (which requires cost-benefit analyses), that really is not a fair description for the reasons set out yesterday. Further, H.R. 634 and H.R. 992 fix what everyone, including supporters, has agreed were mistakes in the legislation. It’s hard for someone who does not live in Washington, D.C., to understand why these mistakes cannot be fixed.