Bill would limit Dodd-Frank’s global reach

Four House lawmakers on Wednesday introduced legislation that would impose new conditions on the regulators who are implementing the Dodd-Frank reform law.

The bill, the Swap Jurisdictional Certainty Act, would require the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) to issue identical rules pertaining to derivatives regulations that could apply to overseas activity.

The legislation would also require any such rules to go through the formal rule-making process, including a proposal and public comment period, and exempt G-20 nations with "broadly equivalent" regulatory arrangements for swaps from new U.S. regulations.

The bill has bipartisan backing, with two Republicans and two Democratic co-sponsors: Reps. Scott Garrett (R-N.J.), Mike Conaway (R-Texas), John Carney (D-Del.) and David Scott (D-Ga.). All four are members of the House Financial Services Committee, and Garrett chairs the subcommittee overseeing capital markets.

The quartet touted the bill as ensuring a level playing field for U.S. financial institutions working in a global market.

"Congress and regulators must ensure that we’re protecting American consumers, ending future bailouts and maintaining American competitiveness in an increasingly global economy," Carney said. "This legislation will give U.S. companies the certainty they need to compete overseas, while maintaining important provisions from Dodd-Frank that will increase transparency in the U.S. derivatives market.”

Financial regulators are working to implement the sweeping Wall Street overhaul. Among the provisions being implemented are new regulations pertaining to derivatives, and regulators are working to determine how those rules would be enforced when it comes to trading activity that occurs on foreign soil, but involve institutions based in the U.S.

A similar bill was introduced in the last Congress, and the new measure has been referred to the House Financial Services Committee.

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