SIFMA today released the following statement from Acting President and CEO Kenneth E. Bentsen, Jr. after the House Financial Services Committee passed, by large, bi-partisan margins, several derivatives-related bills aimed at clarifying and amending Title VII of the Dodd-Frank Act.
"We applaud the Committee on their bi-partisan efforts to make necessary technical and clarifying amendments to Title VII of Dodd-Frank. Dodd-Frank created an entirely new regulatory structure for derivatives, and after three years since the law's passage, Congress is correctly addressing areas of Title VII that needed revision."
Cross-Border:
"Derivatives markets are global, and the regulatory structures that govern them must be coordinated and harmonized on a global level. H.R. 1256 would harmonize cross-border approaches by requiring the CFTC and SEC to jointly issue rules regarding cross-border application of Dodd-Frank.
"Currently, the two agencies have approached this issue in dramatically different ways, which highlights the need for this legislation. The CFTC chose to issue regulatory guidance instead of going through the normal rulemaking process as the SEC has recently done. The CFTC has also rushed to issue the guidance, unlike the SEC's deliberate rulemaking process, which has resulted in numerous 'no action' letters being issued right against certain rules' deadlines.
"The CFTC has also taken a rule-by-rule, transaction-by-transaction approach to judging foreign regulator's rulemakings, versus the SEC's more reasoned and appropriate comprehensive, ultimate outcome-level basis. This has already led to real world consequences, with business leaving our shores. Congress should ensure regulatory rulemaking on this critical issue is coordinated and pass this legislation to ensure the CFTC and SEC are in lock-step."
Swaps Push-Out:
"H.R. 992 makes necessary changes to Section 716 of Dodd-Frank-the so-called swaps push out provision. Both Federal Reserve Chairman Ben Bernanke and former FDIC Chairwoman Sheila Bair opposed the provision, believing it would actually increase risk, not reduce it. We urge the House to pass this bill."
End User Margin:
"While the authors of Dodd-Frank explicitly stated that end-users would be exempt from margin requirements when using derivatives, it was never explicitly said in statute. H.R. 634 would put that exemption into statue, provided much needed regulatory certainly and relief from non-financial businesses who rely on derivatives for their operations."
