US House Panel Alters Derivatives Bill To Include More Big Cos
October 14 2009 - 12:51PM
Dow Jones News
Democrats on the House Financial Services Committee Wednesday
agreed to alter a provision in a derivatives bill to ensure that
major companies will not be able to evade new regulations.
The changes, approved in a voice vote, were made in response to
concerns voiced last week by the U.S. Securities and Exchange
Commission and the Commodity Futures Trading Commission. Both
regulators said they worried the draft bill on derivatives created
exemptions that were so wide, it would allow companies such as
Fannie Mae (FNM) and Freddie Mac (FRE) to circumvent
regulations.
House Financial Services Chairman Barney Frank, D-Mass., offered
to change the language in the bill to clarify that major market
players that could cause ripple effects in the derivatives markets
would still be subject to some requirements to have their routine
derivatives cleared by clearinghouses, which guarantee trades.
The bill still needs the committee's full approval, but even
then more changes may be made in discussions with the House
Agriculture Committee, which has jurisdiction over the CFTC.
-By Sarah N. Lynch, Dow Jones Newswires; 202-862-6634;
sarah.lynch@dowjones.com
(Michael R. Crittenden contributed to this article.)