Fixing Dodd-Frank to Make It Easier to Share Data With Regulators (H.R. 1847)

What is H.R. 1847?

(Updated April 13, 2019)

This bill would repeal the indemnification requirements imposed on derivatives trading organizations that was imposed by the Dodd-Frank Act.

The indemnification process requires any U.S. or foreign entity other than the Securities and Exchange Commission (SEC) that wants to access data from a security-based swap data repository (i.e. data related to derivatives markets) to provide indemnity (protection) for any litigation expenses arising from the information provided.

Before a swap data repository can share information with any entity, it must receive a written confidentiality agreement from each entity that requests access.

This legislation would take effect as if it had been part of the original Dodd-Frank Act -- meaning that it would immediately be applicable to swap data repositories and entities requesting access to that data.

Argument in favor

This reform is necessary to correct an unintended consequence of a misguided portion of the Dodd-Frank Act. Even the SEC thinks the indemnification requirements should be changed.

Argument opposed

The U.S. shouldn’t be concerned with the ability of foreign regulators to access international derivatives information stored in the U.S. As long as the SEC can access it, there shouldn’t be a problem.

Impact

Swap data repositories, regulators in the derivatives market -- particularly the SEC.

Cost of H.R. 1847

The CBO estimates that this bill would have an insignificant impact on direct spending.

Additional Info

In-Depth: Discussions about removing the indemnification requirement has been ongoing since at least March 2012, when the SEC recommended that Congress consider eliminating the indemnification requirement as it inhibits the ability of regulators to access data they need

The text of this bill was included in H.R. 37 which passed the House of Representatives on a vote of 271 to 154, but has yet to be considered by the Senate.

As a standalone piece of legislation, the House Financial Services Committee passed this bill on a unanimous vote of 60 to 0. An amendment put forward by cosponsoring Rep. Gwen Moore (D-WI) which clarified that swap data repositories only have to share data related to swap trades was passed by voice vote.

Media:

• House Financial Services Committee Press Release
• CBO Cost Estimate
  
• Securities Industry and FInancial Markets Association
• SEC (Context - In Favor)
  

Summary by Eric Revell
(Photo Credit: Flickr user Joan Campderrós-i-Canas)