On Tuesday, June 24, the House voted on H.R. 4413, legislation that reauthorizes the CFTC for five years, and passed the bill by a bipartisan vote of 265 to 144. The overall directive of CFTC reauthorization is to fund and reform the agency, but it also can be used as a vehicle for lawmakers to pass legislation pertaining to the oversight of the derivatives industry. Earlier this year, the House Agriculture Committee included key derivatives reform language in H.R. 4413, incorporating the text of another bill, H.R. 634, the Business Risk Mitigation and Price Stabilization Act of 2013 as well as provisions of H.R. 677, the Inter-Affiliate Swap Clarification Act.
FEI has strongly advocated for H.R 634, which ensures that non-financial derivatives end-users are not subject to unnecessary margin requirements, and H.R. 677, which would exempt swaps with centralized treasury units (“CTUs”) of non-financial end-users from clearing requirements. Without a clear exemption from margin and clearing requirements, non-financial companies who use derivatives would have to divert billions of dollars away from much-needed investments, such as business expansion and job creation.
Many FEI members helped to engage Congress on this issue, writing their Representatives to express their support of this legislation, using our new grassroots system, FEI Grassroots. FEI is grateful for our members’ willingness to help advance advocacy priorities like this one.
Up next is the Senate Agriculture Committee’s consideration of their version of CFTC reauthorization. FEI and the Coalition for Derivatives End-Users are pressing the Senate to act on CFTC reauthorization this summer, and to include similar derivatives provisions in the final Senate bill.