WASHINGTON — Key Republican lawmakers introduced a bill Friday to delay implementation of derivatives rules by regulators and require them to hold hearings about compliance costs and regulatory alternatives.
Specifically, the measure would grant the Securities and Exchange Commission and the Commodity Futures Trading Commission an 18-month reprieve for derivatives rulemaking mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Under that law, the CFTC has authority to regulate swaps, swap dealers, and major swap participants. The SEC has authority to regulate security-based swaps, security-based swap dealers, and major security-based swap participants.
The bill was introduced by four congressmen: Rep. Spencer Bachus of Alabama, chairman of the House Financial Services Committee; Rep. Frank Lucas of Oklahoma, chairman of the House Agriculture Committee; Rep. K. Michael Conaway of Texas, who chairs the House Agriculture subcommittee on general farm commodities and risk management; and Rep. Scott Garrett of New Jersey, chairman of the House Financial Services’ capital markets panel.
“This bill will restore order to the rulemaking process to implement the Dodd-Frank derivatives title,” Bachus said in a statement. “Hopefully, the additional time and information provided by this bill will allow the regulators to engage in the proper due diligence to get the derivatives rules right from the start.”
In addition, the bill would require both agencies, before issuing any final rules, to hold public hearings and take testimony from market participants about the proposed regulations. In particular, they would have to seek input about compliance burdens associated with the proposals and the availability of alternatives.
The SEC and CFTC would have to consider this testimony when preparing cost-benefit analyses of any proposed rules.
The bill would also require the SEC and the CFTC to coordinate their Dodd-Frank derivatives rulemaking.
“We need to ensure that our end-users are not caught up in a regulatory regime that imposes upon them unjustified and unnecessary costs,” Lucas said in a statement.
