Promoting Job Creation and Reducing Small Business Burdens Act

Floor Speech

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Mr. CRAWFORD. I thank my colleague from Pennsylvania (Mr.
Fitzpatrick) for his leadership on this.

Mr. Speaker, I rise in strong support of H.R. 37 and would
particularly like to comment on title V. In order to provide market
transparency, the Dodd-Frank law requires post-trade reporting to Swap
Data Repositories, or SDRs, as they are called, so that regulators and
market participants have access to realtime market data that help
identify systemic risk in the financial system. So far, we have made
great strides in reaching this goal, but unfortunately, a provision in
the law threatens to undermine our progress unless we fix it.

Currently, Dodd-Frank includes a provision requiring a foreign
regulator to indemnify a U.S.-based SDR for any expenses arising from
litigation relating to a request for market data. Unlike the rest of
the world, though, the concept of indemnification is only established
within U.S. tort law. As a result, foreign regulators have been
reluctant to comply with this provision, and international regulatory
coordination is being thwarted.

While the intent of the provision was to protect market
confidentiality, in practice, it threatens to fragment global data on
swap markets. Without effective coordination between international
regulators and SDRs, monitoring and mitigating global systemic risk is
severely limited.

H.R. 37 fixes this problem by removing the indemnification provisions
in Dodd-Frank. This has broad bipartisan support, and a separate bill
to do this was unanimously approved last year by the House Ag Committee
and the House Financial Services Committee. Additionally, last year,
the SEC testified to the Financial Services Committee that a
legislative solution was needed, saying: ``In removing the
indemnification requirement, Congress would assist the SEC, as well as
other regulators, in securing the access it needs to data held in
global trade repositories.''

If left unresolved, the indemnification provision in Dodd-Frank has
the potential to effectively reduce transparency and undo the great
progress already being made through the cooperative efforts of more
than 50 regulators worldwide. In passing this legislation, we will
ensure that regulators will have access to a global set of swap market
data, which is essential to maintaining the highest degree of market
transparency and risk mitigation. I strongly urge my colleagues to vote
``yes'' on this bill.

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