In Dodd-Frank Slap, Looser Derivatives Rules Approved by House Panel

Three pieces of legislation approved to move out of committee

More On Legal & Compliance

from The Advisor's Professional Library
  • Preventing and Dealing with Client Complaints Although the SEC has not provided specific guidance on how client complaints should be handled, a firm’s policies and procedures should provide clear direction how to do so, as neglecting complaints can exacerbate a bad situation.
  • U.S. Securities and Exchange Commission Information This information sheet contains general information about certain provisions of the Investment Advisers Act of 1940 and selected rules under the Adviser’s Act.  It also provides information about the resources available from the SEC to help advisors understand and comply with these laws and rules.

On Wednesday, the House Financial Services Committee voted to send on three pieces of legislation that are designed to loosen derivatives rules put in place by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

They are H.R. 2586, the Swap Execution Facility Clarification Act; H.R. 2682, the Business Risk Mitigation and Price Stabilization Act; and H.R. 2779, to exempt inter-affiliate swaps from certain regulatory requirements put in place by the Dodd-Frank Wall Street Reform and Consumer Protection Act. The three bills will now move on for a full House vote.

Rep. Barney Frank, D-Mass., ranking Democrat on the House Financial Services Committee who co-authored the landmark Dodd-Frank financial reform legislation, had announced Monday that he would not seek reelection in 2012, and will retire after completion of his term next December.

H.R. 2586, according to the committee’s website, directs the CFTC and SEC to devise rules for swap execution facilities and security-based swap execution facilities (SEFs) to carry out congressional intent for SEFs to serve as an alternative to exchanges and to provide an execution facility for illiquid or thinly traded swaps.

H.R. 2682 clarifies the derivatives title of the Dodd-Frank Act by reconfirming the end user exemption from margin and capital requirements, and defines end users as firms and companies that use derivatives to manage their risks and not to speculate.

H.R. 2779 clarifies the Dodd-Frank Act derivatives title and exempts inter-affiliate swaps from the margin, clearing and reporting requirements of the Dodd-Frank Act.

The Securities Industry and Financial Markets Association (SIFMA) issued a statement in support of the three measures on Wednesday, and urged full House and Senate approval.

Reprints Discuss this story
This is where the comments go.