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Eric C.
Republican AR 1

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  • Promoting Job Creation and Reducing Small Business Burdens Act

    by Representative Eric A. "Rick" Crawford

    Posted on 2015-01-07

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    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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