Group of professionals discuss finance

Breaking news and expert analysis on legal and compliance issues

[Back To Home][Back To Archives]

From Banking and Finance Law Daily, May 7, 2013

House Panel Approves Changes to Dodd-Frank Derivatives Provisions

By Sarah Borchersen-Keto, Washington News Bureau

The House Financial Services Committee approved a number of measures that would amend the derivatives provisions of the Dodd-Frank Act, ignoring a request from the Treasury Department not to tinker with the law until regulators had finished their work.

At a May 7, 2013, markup, the committee approved six bills relating to Title VII of Dodd-Frank, as well as two bills to amend the JOBS Act, and a bill to enhance the economic analysis carried out by the Securities and Exchange Commission.

Not chiseled into stone. Hensarling told the markup that the committee would be “negligent in its duties” if it did not continue to monitor and improve Dodd-Frank, emphasizing that it “was not chiseled into stone, it did not come down from Mount Sinai.” Ranking member, Rep. Maxine Waters (D-Calif.), added that while she was not opposed to true technical corrections to Dodd-Frank, “I am exceedingly nervous about re-opening the bill and making major adjustments to what is still an unfinished project, particularly with regard to…derivatives reform.” Waters expressed concern that legislation might tie the hands of regulators, or constrain their ability to respond to evolving markets.

Swaps. Bills that cleared the committee included H.R. 742, the Swap Data Repository and Clearinghouse Indemnification Correction Act of 2013, which would remove an indemnification requirement imposed on foreign regulators under Dodd-Frank as a condition of obtaining access to data repositories. H.R. 677, the Inter-Affiliate Swap Clarification Act, exempting inter-affiliate trades from Dodd-Frank’s margin, clearing, and reporting requirements, also cleared the committee.

Another bill that members approved, H.R. 992, would require covered depository institutions to “push-out” structured-finance swaps to a separately capitalized entity, defined by the legislation as a “swap or security-based swap based on an asset-backed security.”

Treasury plea. By passing the bills the committee chose to ignore a letter from Treasury Secretary Jacob Lew, which urged restraint. “The derivatives provisions in the Wall Street Reform Act constitute an important part of the reforms being put in place to strengthen our financial system by improving transparency and reducing risks for market participants. These reforms should not be weakened or repealed,” Lew wrote to Hensarling. He stressed that regulators should be allowed to complete their rulemakings, “and then determine what changes, if any, might be necessary in certain areas to improve the effectiveness of these reforms.”

LegislativeActivity: DoddFrankAct SecuritiesDerivatives

Banking and Finance Law Daily

Introducing Wolters Kluwer Banking and Finance Law Daily — a daily reporting service created by attorneys, for attorneys — providing same-day coverage of breaking news, court decisions, legislation, and regulatory activity.

A complete daily report of the news that affects your world

  • View full summaries of federal and state court decisions.
  • Access full text of legislative and regulatory developments.
  • Customize your daily email by topic and/or jurisdiction.
  • Search archives for stories of interest.

Not just news — the right news

  • Get expert analysis written by subject matter specialists—created by attorneys for attorneys.
  • Track law firms and organizations in the headlines with our new “Who’s in the News” feature.
  • Promote your firm with our new reprint policy.

24/7 access for a 24/7 world

  • Forward information with special copyright permissions, encouraging collaboration between counsel and colleagues.
  • Save time with mobile apps for your BlackBerry, iPhone, iPad, Android, or Kindle.
  • Access all links from any mobile device without being prompted for user name and password.