News Column

America's Business Leaders Applaud House Passage of Meaningful Derivatives Regulation Reform; Call on Senate to Act

June 24, 2014



WASHINGTON, June 24 -- Business Roundtable issued the following news release:

Business Roundtable (http://www.brt.org/) today welcomed passage by the U.S. House of Representatives of H.R. 4413, the Customer Protection and End User Relief Act, which includes key end-user provisions that would ease the regulatory burden on companies that use derivatives to manage their operations and mitigate risk from fluctuations in commodities, foreign currencies, interest rates and other similar financial risks.

"America's business leaders applaud the U.S. House of Representatives, and particularly thank Agriculture Committee Chairman Frank Lucas (R-OK) and Ranking Member Collin Peterson (D-MN), for championing reform that protects derivatives end-users that use these instruments to reduce financial risk," said Alexander M. (Sandy) Cutler, Chairman and CEO of Eaton and Chair of Business Roundtable's Corporate Governance Committee. "We urge the Senate to swiftly follow suit."

Subjecting companies to unnecessary margin and clearing requirements prevents them from investing in their operations, creating U.S. jobs and supporting economic growth. This legislation would remove those margin and clearing requirements.

In a letter (http://businessroundtable.org/resources/brt-letter-house-customer-protection-and-end-user-relief-act) sent to House leaders earlier this week, Cutler wrote, "Business Roundtable supports efforts to increase transparency in the derivatives markets and enhance financial stability for the U.S. economy through thoughtful new regulation while avoiding needless costs."

H.R. 4413, which would reauthorize the U.S. Commodity Futures Trading Commission, includes important provisions that will reform derivatives regulation to focus more effectively on addressing potential systemic economic risk, including:

* Ensuring that non-financial derivatives end-users, who pose no systemic risk to the U.S. economy, are not subject to unnecessary margin requirements; and

* Guaranteeing that end-users are not subject to clearing requirements applicable to banks simply because they trade through efficient, cost-effective centralized treasury units.

Click (http://businessroundtable.org/resources/brt-letter-house-customer-protection-and-end-user-relief-act) here to read Cutler's letter.

[Category: Business]

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