ABA Dodd-Frank Tracker

CFTC Approves Dodd-Frank Mandated Rules

2013-05-17T09:48:00.000-04:00

The CFTC voted 4-1 today to finalize requirements under the Dodd-Frank Act for derivatives trading platforms called swap execution facilities. The final rule relaxed restrictions from the proposed version of the rule.

In addition, the CFTC approved an additional final rulemaking on procedures to establish appropriate minimum block sizes for large notional off-facility swaps and block trades, an other requirement of the Dodd-Frank Act.

The CFTC staff have made Question & Answer sheets available with additional information on both of these rules.

Read more.

CFTC Commissioner: Understand Markets, Fix ‘Broken’ Rules

2013-05-15T10:05:00.003-04:00

The CFTC should fix its cross-border guidance and swaps dealer rule, said CFTC Commissioner Scott O’Malia.

He said he had noted that the CFTC’s cross-border application of Dodd-Frank rules had drawn “strong and vocal opposition” and added that the rule would likely foster regulatory uncertainty, fragment the market and make it less appealing for foreign traders.

O’Malia also noted that the CFTC “has not done its best to protect end users” in swap transactions. The rule, he said, makes it hard to determine who qualifies as a swap dealer subject to CFTC registration, and thus limits the market to -- and concentrates risks among -- large Wall Street banks.

In a letter Friday, ABA asked Congress to clarify cross-border rules and to clearly define “eligible contract participants” in over-the-counter swaps.

Read the speech.
Read ABA’s letter.

The Week Ahead: May 13 - May 17

2013-05-10T10:17:00.000-04:00

Tuesday

SEC: Roundtable on Credit Ratings Read more.

Wednesday

FDIC Teleconference: CFPB Mortgage-Related Rules Read more.
Hearing Capital Markets Committee: GSEs Read more.
Meeting: CFPBs Consumer Advisory Board Read more.
Hearing: "Who Is Too Big Too to Fail: Does Title II of the Dood-Frank Act Enshrine Taxpayer-Funded Bailouts?" Read more.

Thursday

Meeting: FDIC Advisory Committee on Economic Inclusion Read more.
Hearing HRS: SEC Oversight Read more.
Meeting: CFPBs Consumer Advisory Board Read more.

All times in Eastern Standard Time. See future events on the Dodd-Frank Calendar.

Join us at the 2013 ABIA Annual Conference
The 2013 ABIA Annual Conference is the only national event devoted exclusively to the issues and concerns of the bank-insurance industry. Our 2013 conference will offer numerous networking opportunities with industry peers and top providers.Read more and join us!

Derivatives Bills Clear Financial Services Committee

2013-05-08T08:24:00.004-04:00

The House Financial Services Committee yesterday approved nine bills, most related to derivatives. ABA supported several of the bills, which would amend the Dodd-Frank Act and the JOBS Act.

On H.R. 634, the committee voted unanimously that end users do not have to meet margin requirements for uncleared swaps. H.R. 992, which clarifies that banks can continue to engage in swaps without having to move structured finance products to a separately capitalized affiliate, passed 53-6.

The committee approved H.R. 801, which corrects a technical error to extend updated SEC shareholder registration and deregistration thresholds to savings and loan holding companies, by a voice vote.

H.R. 1062, which requires a full cost-benefit analysis for all SEC regulations, passed 31-28 along party lines. House Majority Leader Eric Cantor (R-Va.) has indicated he will bring H.R. 1062 to the House floor this month.

ABA outlined its positions on the bills in a letter to committee members on Monday.

SEC Hosts Credit Ratings Roundtable

2013-05-07T14:34:00.001-04:00

The SEC announced the panelists and agenda for its Credit Ratings Roundtable, which will be held on May 14.

There will be three panels. The first will discuss the potential creation of a credit rating assignment system for asset-backed securities. The second will discuss the effectiveness of the SEC’s current system to encourage unsolicited ratings of asset-backed securities. The third will discuss other alternatives to the current issuer-pay business model in which the issuer selects and pays the firm it wants to provide credit ratings for its securities.

The roundtable will be webcast live on the SEC’s website.

Read more.

ABA-Supported Legislation in Markup Today

2013-05-07T08:33:00.001-04:00

The House Financial Services Committee today will mark up nine bills relating to derivatives and the JOBS Act. ABA wrote to committee members yesterday to outline ABA’s positions on the legislation. Among the bills ABA supports are:

H.R. 634, which clarifies that end users do not have to meet margin requirements for uncleared swaps.
H.R. 801, which corrects a technical error in the JOBS Act to extend SEC shareholder registration and deregistration thresholds to savings and loan holding companies.
H.R. 992, which clarifies that banks can continue to engage in swaps -- without having to move structured finance products to a separately capitalized affiliate that may be less-regulated.
H.R. 1062, which requires a full cost-benefit analysis for all SEC regulations.

Other bills to be marked up address inter-affiliate swaps, cross-border transactions and Basel III.

Read the letter.

House Committee to Mark Up Derivatives Legislation

2013-05-03T11:22:00.000-04:00

Next week’s House Financial Services Committee markup of derivatives and JOBS Act legislation, on which we reported yesterday, will include the following bills:

H.R. 801, the Holding Company Registration Threshold Equalization Act of 2013, ABA-supported legislation which would extend to savings and loan holding companies the new SEC shareholder registration and deregistration thresholds under the JOBS Act.
H.R. 634, the Business Risk Mitigation and Price Stabilization Act of 2013, ABA-supported legislation to clarify that end users would not be subject to margin requirements for un-cleared swaps.
H.R. 677, the Inter-Affiliate Swap Clarification Act, which would exempt inter-affiliate swaps from certain regulatory requirements that the Dodd-Frank Act put in place. ABA said in a March letter to the House Agriculture Committee that we support provisions to clarify that inter-affiliate swaps should be exempt from many of the anticipated swap regulations, but we urged the Committee “to remove the limitation on transactions involving swap dealers and major swap participants that are insured depository institutions.”
H.R. 992, the Swaps Regulatory Improvement Act, ABA-supported legislation to reform the swaps “push-out” requirement by keeping banks from having to form separate affiliates to conduct some swaps, allowing them to continue to offer “one-stop shopping” for customers who want it.
H.R. 701, to amend a provision of the Securities Act of 1933 directing the SEC to add a particular class of securities to those exempted under such Act to provide a deadline for such action.
H.R. 742, the Swap Data Repository and Clearinghouse Indemnification Correction Act.
H.R. 1341, the Financial Competitive Act of 2013, which would require a study of the effects on the Basel III proposals in regard to derivatives exposures.
H.R. 1256, the Swap Jurisdiction Certainty Act, which would require the SEC and the CFTC to conduct joint rulemaking on cross-border swaps.
H.R. 1062, the SEC Regulatory Accountability Act, which would require the SEC to do a thorough cost-benefit analysis before proposing a new regulation.

ABA Asks Congress to Clarify Law on Non-Deliverable Forwards

2013-05-03T10:14:00.003-04:00

ABA, its ABA Securities Association subsidiary, and other trade groups asked Congress to clarify that non-deliverable forwards should be subject to the same regulation as other foreign exchange forwards.

In a letter to the Senate Agriculture Committee, which oversees commodity trading regulation, the groups explained that an unintentional oversight in the language of the Dodd-Frank Act resulted in NDFs being regulated more heavily than similar forwards.

An NDF is a type of foreign exchange forward contract that is settled in a single currency (usually U.S. dollars) due to difficulties in moving another currency outside the home country of one of the parties. Under Dodd-Frank, the Treasury Department exempted most foreign exchange forwards from regulation as swaps, but not NDFs; the groups said that “this result was unintended by Congress.”

Read the letter.

SEC Reopens Comment Period for Title VII Dodd-Frank Rules

2013-05-01T14:33:00.002-04:00

The SEC voted unanimously to reopen the public comment period for all rules not yet finalized, stemming from Title VII of the Dodd-Frank Act. The comment periods for these rules—and a policy statement describing the expected order for these new rules to take effect—will be reopened for 60 days after notice is published in the Federal Register.

Separately, the SEC voted unanimously to propose rules and interpretive guidance for parties to cross-border security-based swap transactions.

The proposal explains which regulatory requirements apply when a transaction occurs partially within and partially outside the U.S. The proposed rules also set forth when security-based swap dealers, major security-based swap participants, and other entities—such as clearing agencies, execution facilities, and data repositories—must register with the SEC.

The comment period for the proposed rules and interpretive guidance for cross-border security-based swap activities will occur for 90 days after they are published in the Federal Register.

Read more.

SEC to vote on cross-border rule Wednesday

2013-04-29T13:46:00.000-04:00

The SEC will vote on May 1 to propose new rules and interpretive guidance for cross-border security-based swap activities. The SEC will also consider whether to reopen the comment periods and receive new information for certain security-based swaps rulemaking proposed pursuant to the Dodd-Frank Act. In addition, the SEC will consider whether to reopen comment periods for certain other rules.

Read more.

President's Budget Increases CFTC, SEC Funding

2013-04-11T12:18:00.001-04:00

The President’s Fiscal Year 2014 Budget would significantly increase the budgets of the SEC and CFTC. The President has requested a budget of $1.6 billion in fiscal year 2014 for the SEC, about $350 million (27%) more than the agency’s current funding level, and a budget of $315 million for the CFTC, about $100 million (54%) more than the agency’s current funding level. Both the CFTC and SEC have previously stressed the need for additional funds in order to meet their responsibilities under the Dodd-Frank Act.

CFTC Swaps Reporting Requirements

2013-04-10T11:33:00.000-04:00

The CFTC has issued a no-action letter on reporting requirements that applies to non-SD/MSP counterparties. Counterparties that are not “financial entities” will have relief from reporting requirements until (i) July 1, 2013 for interest rate and commodity swaps; and (ii) August 19, 2013 for equity, foreign exchange, and other commodity swaps. This relief applies to commercial entities and to banks with $10 billion or less in assets.

Financial entities with more than $10 billion in assets will have to start reporting interest rate and credit swaps as scheduled on April 10. However, they have relief from reporting equity, foreign exchange, and other commodity swaps until May 29, 2013. Financial entities also have relief from reporting historical swaps until September 30, 2013.

Read the CFTC press release.
Read the CFTC’s no-action letter.

CFTC Approves Exemption of Certain Swaps from Clearing Requirements

2013-04-02T09:03:00.000-04:00

The CFTC issued a final rule to exempt swaps between certain affiliated entities within a corporate group from the clearing requirement under section 2(h)(1)(A) of the Commodity Exchange Act (CEA) and CFTC regulations, subject to a number of conditions. The Dodd-Frank Act amended the CEA to require clearing of certain swaps.

The approved rule permits affiliated counterparties to elect not to clear a swap subject to the clearing requirement if those counterparties are majority-owned affiliates whose financial statements are included in the same consolidated financial statements and meet a number of additional conditions.

Read more.

House Financial Services Committee’s Tentative Hearing Schedule

2013-03-22T07:52:00.002-04:00

House Financial Services Committee Chairman Jeb Hensarling (R-TX) announced his panel’s tentative April schedule that includes Financial Institutions Subcommittee hearings April 10 and 16 on regulatory relief for small community financial institutions.

Other scheduled hearings are:

April 11, Capital Markets Subcommittee -- review of legislation to reform Dodd-Frank Act derivatives provisions.
April 16, Oversight and Investigation Subcommittee -- the need to end “Too Big to Fail.”
April 17, full committee -- impediments to private capital in the housing finance system.

House Ag Committee Approves Seven Swaps Bills

2013-03-21T08:30:00.003-04:00

The House Agriculture Committee yesterday approved seven bills that would amend the Dodd-Frank Act’s swaps provisions.

The bills include the following:

H.R. 634, the Business Risk Mitigation and Price Stabilization Act, ensures that end-users can continue to use derivatives to manage business risks without being subject to costly margin requirements.

H.R. 677, the Inter-Affiliate Swap Clarification Act, ensures that transactions between affiliates within a single corporate group are not regulated as swaps.

H.R. 742, the Swap Data Repository and Clearinghouse Indemnification Correction Act of 2013, would allow data sharing between U.S. and international regulators and swap data repositories without adding an unnecessary layer of legal bureaucracy.

H.R. 992, the Swaps Regulatory Improvement Act, amends Section 716 of the Dodd-Frank Act to limit the swap desk push-out requirement so that it only applies to certain swaps based on certain asset-backed securities.

H.R. 1003 would require the CFTC to assess the costs and benefits of its actions.

H.R. 1038, the Public Power Risk Management Act, would allow producers, utility companies, and other non-financial entities to continue entering into energy swaps with government-owned utilities without being required to register with the CFTC as a swap dealer.

H.R. 1256, the Swap Jurisdiction Certainty Act, would direct the CFTC SEC to adopt a joint rule on how they will regulate cross-border swaps transactions as part of the new requirements created in the Dodd-Frank Act.

ABA in a memo outlined its positions on five of the measures.

Read the committee’s press release.

ABA Comments on Swap Bills

2013-03-20T11:44:00.001-04:00

ABA wrote to the House Agriculture Committee to outline our positions on bills the Committee will be marking-up today, including ABA-supported legislation to clarify that end users would not be subject to margin requirements for un-cleared swaps (H.R. 634), to reform the swaps “push-out” requirement (H.R. 992), and to provide for a full assessment of the costs and benefits of CFTC regulations (H.R. 1003).

Regarding a bill (H.R. 677) that would exempt inter-affiliate swaps from certain regulatory requirements that the Dodd-Frank Act put in place, ABA stated support for provisions to clarify that inter-affiliate swaps should be exempt from many of the anticipated swap regulations, but urged the Committee “to remove the limitation on transactions involving swap dealers and major swap participants that are insured depository institutions.”

In addition, ABA provided comments on a discussion draft of legislation to require the CFTC and SEC to jointly adopt rules setting forth the application of Title VII to cross-border transactions.

Read the letter.

House Ag Committee to Consider Swaps ‘Pushout’ Reform Bill

2013-03-20T08:52:00.001-04:00

The House Agriculture Committee today is scheduled to consider a bill (H.R. 992) that would reform the Dodd-Frank Act’s Section 716 -- the so-called swaps “pushout” provision -- that requires banks to move some swaps into separately capitalized and funded affiliates.

The legislation -- introduced Rep. Randy Hultgren (R-Ill.) -- would allow banks to continue engaging in commodity, equity and some structured finance products, and it also would clarify that non-U.S. banks would be treated the same as U.S. institutions.

House Ag Committee to Mark up Derivatives Regulations

2013-03-15T08:13:00.002-04:00

The House Agriculture Committee will meet next week, March 20, to mark up seven bills impacting derivatives regulation, including rules stemming from the 2010 Dodd-Frank Act.

H.R. 634, the Business Risk Mitigation and Price Stabilization Act of 2013
H.R. 677, the Inter-Affiliate Swap Clarification Act
H.R. 742, the Swap Data Repository and Clearinghouse Indemnification Correction Act of 2013
H.R. 992, the Swaps Regulatory Improvement Act
H.R. 1003, To improve consideration by the Commodity Futures Trading Commission of the costs and benefits of its regulations and orders.
H.R. 1038, the Public Power Risk Management Act of 2013
H.R. ___, the Swap Jurisdiction Certainty Act

CFTC to Possibly Rethink Cross-Border Implementation Deadline

2013-03-13T08:24:00.000-04:00

News sources are reporting that at a Futures Industry Association conference CFTC Commissioner Mark Wetjen said the CFTC may consider extending the July implementation deadline for its new Dodd-Frank derivatives rules that will begin to apply to cross-border activities, as European officials signal that their own implementation timeline could stretch into next year.

The announcement from the European Securities and Markets Authority "creates a problem," Wetjen said.

Reports indicate Wetjen said the CFTC has to be mindful of competition and risk considerations. "It's going to make that decision about whether to extend it maybe a little more tricky than we would like, but it almost seems inevitable that we're probably going to have to consider extending it."

House and Senate Introduce Legislation to Reform Swaps Push-Out Requirement

2013-03-07T10:18:00.002-05:00

Bipartisan legislation introduced by House and Senate lawmakers would reform the swaps push-out requirement to allow banks to continue engaging in commodity, equity, and some structured finance products. The legislation would also clarify that non-U.S. banks would be treated the same as U.S. banks.

The push-out requirement applies only to swap dealers and some major swaps participants, but it has been the focus of broad debate because it will affect the ability of both banks and their customers to centralize risk management. Banks will have to form a separately-capitalized and funded affiliate to conduct some swaps. Customers would lose the ability to do “one-stop shopping” with a bank for loans and swaps to offset their credit risk even if they prefer to have a bank as a counterparty. Regulators have argued that the requirement would move derivatives trading out of banks and into less-regulated entities.

ABA supports push-out reform legislation and appreciates the leadership of Senators Hagan (D-NC), Toomey (R-PA), Warner (D-VA), and Johanns (R-NE) as well as Representatives Hultgren (R-IL), Himes (D-CT), Hudson (R-NC), and Maloney (D-NY) on this issue.

ABA, ABASA Ask CFTC to Exempt NDFs

2013-02-28T08:13:00.003-05:00

ABA, its ABA Securities Association subsidiary and two other trade groups this week asked the CFTC to use its Commodity Exchange Act authority to exempt nondeliverable foreign exchange forwards (NDFs) so that they’re regulated the same as foreign exchange forwards and swaps.

The trade groups noted that the Treasury Department in November issued a final determination that exempted foreign exchange swaps and forwards from certain Dodd-Frank Act rules that apply to swaps generally. “[W]e believe NDFs should receive the same regulatory treatment as FX forwards. An NDF is economically and functionally the same transaction as an FX forward,” they said.

The trade groups argued, among other things, that facilitating the hedging of deliverable currencies by exempting deliverable FX forwards, while increasing the costs of hedging restricted currencies by not similarly exempting NDFs serves no discernible public policy purpose.

“Exemptive relief for NDFs would promote responsible economic and financial innovation by allowing this important market to continue to use and develop market infrastructure designed specifically to meet the unique needs of FX transactions,” they said.

Read the letter.

The Week Ahead: February 18 - February 22

2013-02-15T09:05:00.000-05:00

Tuesday

ABA Telephone Briefing: In Depth: Parsing CFPB’s New Servicing Rule Read more.
Final Rule CFTC: Swaps-Record of Transactions Requirements Read more.

Wednesday

ABA Telephone Briefing: Banks and Insurance Government Relations Update: A Dialogue with Regulators Read more.

All times in Eastern Standard Time. See future events on the Dodd-Frank Calendar.

Join us at the ABA Government Relations Summit The ABA Government Relations Summit is your opportunity to educate lawmakers and regulators about the vital role banks play in the economy. It’s also a time to meet with new leadership and advocate for policy change to support the banking industry. Read more and join us this April!

Chairman Johnson Releases Senate Banking Panel Agenda

2013-02-13T08:13:00.002-05:00

The Senate Banking Committee’s agenda during the 113th Congress will include supporting the economic recovery and overseeing implementation of the Dodd-Frank Act, panel Chairman Tim Johnson (D-S.D.) said in a memo.

Johnson remarked that “while a tremendous amount of that work [implementing Dodd-Frank] has been completed to date by the regulators, a number of significant rulemakings have yet to be finalized, including the Volcker Rule and the new derivatives regulatory framework.” Johnson noted the Committee will continue to oversee the regulatory agencies as they move forward on Dodd-Frank implementation requirements.

Read the memo.

George S. Canellos Named SEC Acting Director of Enforcement

2013-02-01T11:43:00.002-05:00

The SEC has announced that George S. Canellos, currently Deputy Director of the Division of Enforcement, has been named Acting Director. The appointment is effective February 8.

Mr. Canellos, 48, has been the division’s Deputy Director since June 2012. He served as Director of the SEC’s New York Regional Office from July 2009 to June 2012, overseeing 400 enforcement attorneys, accountants, investigators, and compliance examiners involved in the investigation and prosecution of enforcement actions and the performance of compliance inspections in the New York region.

Read more.

David P. Bergers Named SEC Acting Deputy Director of Enforcement

2013-02-01T11:39:00.002-05:00

The SEC has announced that David P. Bergers, Director of the SEC’s Boston Regional Office, has been named Acting Deputy Director of the Enforcement Division, effective February 8, when Deputy Director George Canellos becomes the division’s Acting Director.

Mr. Bergers, 45, has headed the SEC’s Boston Regional Office since 2006. The office oversees more than 1100 investment advisers, 60 mutual fund complexes, and 375 broker-dealers in Massachusetts, Connecticut, New Hampshire, Maine, Vermont, and Rhode Island.

Read more.