SIFMA Applauds Introduction Of Swaps Push-Out Reform Legislation

SIFMA today released the following statement from Kenneth E. Bentsen, Jr., acting president and CEO, after legislation was introduced to amend Section 716 of Dodd-Frank, which would force financial institutions to “push-out” their derivatives operations into a separate entity. The Swaps Regulatory Improvement Act was introduced in both houses of Congress by Senators Kay Hagan (D-NC) and Pat Toomey (R-PA) and Representatives Randy Hultgren (R-IL) and Jim Himes (D-CT).

“This action is a bipartisan, bi-cameral recognition that Section 716 was an ill conceived provision, one that elicited strong reservations from multiple federal prudential regulators when originally adopted and still today.  Adoption of the Hultgren-Himes-Hagan-Toomey legislation will forestall a misguided action that would force swaps to migrate to other entities that are not subject to prudential regulation, and could likely increase systemic risk instead of reducing it. We urge the House and Senate to address, on a bi-partisan basis, the need for amending this section of Dodd-Frank and pass this legislation.”