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Public Statements

Swap Data Repository and Clearinghouse Indemnification Correction Act of 2013

Floor Speech

By:
Date:
Location: Washington, DC

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Mr. HUIZENGA of Michigan. Madam Speaker, I appreciate that from my friend from Arkansas, who has shown great leadership on this issue.

Madam Speaker, thousands of companies across this country and in my State of Michigan utilize derivatives to better manage the risks that they face every day. The proper use of derivatives to lower risk benefits the global economy by allowing a range of businesses, from manufacturing to health care, agriculture and a myriad of others, to improve their planning and forecasting and offer more stable prices to customers.

By imposing over-the-top regulatory burdens on end users, this could increase costs and reduce liquidity that would prevent these companies from using derivatives markets efficiently, effectively, and properly. That is why I am a proud sponsor of H.R. 742, the Data Swap Repository and Clearinghouse Indemnification Correction Act--quite a mouthful, but an important piece of bipartisan legislation--which unanimously passed both the Agriculture and the Financial Services Committees--a rare feat in Washington these days--and it would remove the unrealistic requirement to secure against future losses, which some have noted is a concept unique to U.S. law. But it would remove these unrealistic requirements imposed on foreign regulators by Dodd-Frank as a condition of obtaining access to the data repositories that we need to share.

In fact, earlier this year, the CFTC and the SEC--the regulatory agencies--issued a Joint Report on International Swap Regulation acknowledging the problems with indemnification provisions in Dodd-Frank. The SEC and CFTC staff report said that the indemnification provisions have ``caused concern among foreign regulators, some of which have expressed unwillingness to register or recognize (a swaps data repository) unless able to have direct access to necessary information.''

Additionally, the report noted:

Congress may determine that a legislative amendment to the indemnification provision is appropriate.

Folks, despite opposition from the Secretary of the Treasury and the White House, here is the bipartisan answer to this problem, and we are glad to see that people on all sides--right, left, and center--have agreed that this is a proper measured step to solve this issue. As you can see, this legislative solution is a small technical fix to the Dodd-Frank Act, but it's desperately needed and is vital to maintaining the integrity of domestic and global derivatives market regulations, so I urge the swift passage of H.R. 742.

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