(Bloomberg News) U.S. House lawmakers approved six bills to limit the reach of Dodd-Frank Act derivatives rules, including measures to define which firms are swap dealers, subjecting them to higher capital and margin requirements.
The House Agriculture Committee voted unanimously yesterday for two bills to limit the Commodity Futures Trading Commission's definition of which firms can be designated as dealers, and two measures to limit application of margin on certain firms and bar regulators from dictating how many traders would have to compete in swap transactions.
The latter two bills, which would amend the 2010 regulatory law, were approved in November by the Financial Services Committee, which shares jurisdiction over the $708 trillion global over-the-counter swaps market.
The measures approved yesterday, stemming from Republican efforts to limit the reach of the CFTC rules, have little chance of winning congressional approval, said Representative Collin Peterson of Minnesota, the Agriculture Committee's top Democrat.
Representative Randy Hultgren, an Illinois Republican, sponsored a measure to exempt from the swap-dealer designation institutions with outstanding swaps of less than $3 billion, as well as non-financial firms that use them to hedge or mitigate commercial risk. The panel adopted an amendment clarifying that the exemptions don't apply to financial firms.
A second measure on the swap-dealer definition would exempt banks and farm credit lenders that can show their swaps activity allows them to increase lending.
The committee also approved by voice vote legislation to bar regulators from imposing margin requirements on commercial and manufacturing end-users of derivatives. The Coalition for Derivatives End-Users, which includes brewer MillerCoors LLC, has lobbied Congress and regulators to exempt end-users from collateral requirements.
The panel followed the House Financial Services Committee in unanimously approving a measure exempting swaps between subsidiaries of the same company from Dodd-Frank clearing and trading regulations.