NEW YORK (HedgeWorld.com)–The International Swaps and Derivatives Association announced that it is prepared again to fight efforts to expand regulatory oversight of energy derivatives transactions, efforts that may now be revived in Congress, at the behest of Senators Tom Harkin (D-Iowa) and Richard Lugar (R-Ind.).
The Harkin/Lugar bill, which would be introduced as an amendment to a bill introduced by Senator Dianne Feinstein (D-Calif.) in July, would subject participants in the energy derivatives markets to the disclosure of proprietary trading information and new capital requirements.
This is an “unnecessary and flawed legislative approach,” said Robert G. Pickel, chief executive and executive director of ISDA, Monday.
Mr. Pickel also praised a letter issued Sept. 18, addressing the Harkin/Lugar proposal, signed by the Secretary of the Treasury and the heads of the Federal Reserve, the Securities and Exchange Commission, and the Commodity Futures Trading Commission. The four regulators warned that the proposed re-regulation of energy derivatives could increase the vulnerability of the U.S. economy to future stresses.
“This letter signed by the chief financial regulators … recognizes the positive contributions of [over the counter] derivatives to the economy and presents a clear and convincing case against the adoption of this unnecessary and flawed legislative approach,” Mr. Pickel said.
History of the Feinstein Bill