House Agriculture Committee Considers Testimony on Global Derivatives Reforms (with Delta Strategy Group Summary and Lofchie Comment)

The House Committee on Agriculture considered expert testimony on the progress of global derivatives reforms made during the years that followed the enactment of the Dodd-Frank Act. Committee Chair K. Michael Conaway (R-TX) stated that the testimony from the hearing "confirm[ed] the committee's concerns over the lack of coordination and harmonization that jeopardizes the implementation of reforms to global swaps markets."

The following witnesses testified:

• Mr. Terrence A. Duffy, Executive Chairman and President, CME Group, Chicago, IL
• Mr. Scott O'Malia, Chief Executive Officer, International Swaps and Derivatives Association, Inc., New York, NY
• Mr. Christopher S. Edmonds, Senior Vice President, Financial Markets, Intercontinental Exchange, Chicago, IL
• Mr. Larry E. Thompson, Vice Chairman and General Counsel, Depository Trust and Clearing Corporation, New York, NY
• Dr. John E. Parsons, Senior Lecturer, MIT Sloan School of Management, Cambridge, MA

Lofchie Comment: The Delta Strategy Group summary linked below contains an outline of the principal issues covered by each of the witnesses. In general, the witnesses were critical of Dodd-Frank in tone, but not hostile to the Act itself. (Perhaps that is a result of the fact that three of the witnesses represented organizations that arguably benefited materially from the statute). However, the common theme from the testimony is that the CFTC rushed adoption, and attempted imposition, of rules on market participants in the United States and other regulators around the world. As a result, the regulatory system is more burdensome to U.S. market participants and uninviting to non-U.S. parties. Further, European regulators continue to push back by not recognizing the U.S. regulation of clearinghouses as comparable to their own.

Click here to view the hearing summary by Delta Strategy Group.

See: Webcast of Hearing; Chair Conaway's Opening Statement; Committee Press Release.