Reps. Lucas, R-Okla., Bachus, R-Ala., Conaway, R-Texas, and Garrett R-N.J., introduced H.R. 1573, which would extend the deadline by 18 months for implementing Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
A House Agriculture Committee news release stated the bill gives the regulatory agencies more time to meet the objectives of the derivatives title, to consider the costs and benefits, and to understand the cumulative impact of the rules that will be applied to the marketplace. The derivatives provisions of Dodd-Frank will affect every economy segment. The bill reflects the concerns of thousands of US businesses that use derivatives to manage risks. For example, farmers use derivatives to lock in the prices of their crops for the coming season. Manufacturers hedge against fluctuating prices in the raw materials that go into production. Hospitals hedge against rising interest rates on financing medical equipment and technology.
The release also stated that to provide clarity to market participants, the bill maintains the current timeframe for the Commodity Futures Trading Commission (CFTC) and the US Securities and Exchange Commission (SEC) to issue final rules regarding regulatory designations that will define the market, and maintains the current timeframe for rules that require record retention and regulatory reporting. It also requires additional public forums to take input from stakeholders before the rules can be made final.
The following information also is included in a House Agriculture Committee summary of the statutory extension:
- Extends the statutory deadline by 18 months, including 1) providing additional time to write and vet the rules, conduct cost-benefit analysis, consider the interdependence and cumulative impact of the rules and determine the appropriate sequencing of effective dates; and 2) realigning the United States with the G20 agreement to move to reporting and central clearing by Dec. 2012.
- Maintains the current timeframe for the SEC and CFTC to issue final rules defining swap, swap dealer, security-based swap dealer, major swap participant, major security-based swap participant and eligible contract participant.
- Maintains the current timeframe for the rules requiring record retention and regulatory reporting for swaps, and provides for interim authority to designate swap data repositories for the purposes of receiving the data, including 1) providing regulators with swaps data to monitor for systemic risk; and 2) providing regulatory staff with access to swaps data to further instruct the rulemaking process.
- Requires the commissions to hold public hearings to take testimony and comment on proposed rules before they are made final, and factor those comments into cost-benefit analysis and the timing of effective dates.
- Provides the SEC and CFTC authority to exempt certain persons from registration and/or other regulatory requirements if they are subject to comparable supervision by another regulatory authority, if there are information sharing arrangements in effect between the commissions and that regulatory authority, and if it is in the public interest.