Bipartisan Letter Advises Regulators to Exempt End-Users from Margin Requirements

U.S. Congress

April 6, 2011

Senators Tim Johnson (D-SD) and Debbie Stabenow (D-MI) and Representatives Frank Lucas (R-OK) and Spencer Bachus (R-AL) sent a letter to Treasury Secretary Timothy Geithner, Board of Governors of the Federal Reserve System Chairman Ben Bernanke, SEC Chairman Mary Schapiro, and CFTC Chairman Gary Gensler advising regulators to provide an exemption from margin requirements for end-user derivatives transactions.

The letter states: "Regulators should exempt end-users from margin requirements and seek to limit other regulatory burdens that could have the unintended effect of driving up costs for end-users and increasing systemic risk for our economy." The letter also states that U.S. regulators should continue to work closely with each other and their international counterparts to ensure that Dodd-Frank Act Title VII regulations "reduce unnecessary expenses, maximize certainty for companies, and minimize regulatory arbitrage."

Cross References

Dodd-Frank Act, Title VII, Sec. 723