[Congressional Record (Bound Edition), Volume 161 (2015), Part 8]
[House]
[Pages 11451-11453]
[From the U.S. Government Publishing Office, www.gpo.gov]




 SWAP DATA REPOSITORY AND CLEARINGHOUSE INDEMNIFICATION CORRECTION ACT 
                                OF 2015

  Mr. HURT of Virginia. Mr. Speaker, I move to suspend the rules and 
pass the bill (H.R. 1847) to amend the Securities Exchange Act of 1934 
and the Commodity Exchange Act to repeal the indemnification 
requirements for regulatory authorities to obtain access to swap data 
required to be provided by swaps entities under such Acts, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 1847

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Swap Data Repository and 
     Clearinghouse Indemnification Correction Act of 2015''.

     SEC. 2. REPEAL OF INDEMNIFICATION REQUIREMENTS.

       (a) Derivatives Clearing Organizations.--Section 5b(k)(5) 
     of the Commodity Exchange Act (7 U.S.C. 7a-1(k)(5)) is 
     amended to read as follows:
       ``(5) Confidentiality agreement.--Before the Commission may 
     share information with

[[Page 11452]]

     any entity described in paragraph (4), the Commission shall 
     receive a written agreement from each entity stating that the 
     entity shall abide by the confidentiality requirements 
     described in section 8 relating to the information on swap 
     transactions that is provided.''.
       (b) Swap Data Repositories.--Section 21 of such Act (7 
     U.S.C. 24a) is amended--
       (1) in subsection (c)(7)--
       (A) in the matter preceding subparagraph (A), by striking 
     ``all'' and inserting ``swap''; and
       (B) in subparagraph (E)--
       (i) in clause (ii), by striking ``and'' at the end; and
       (ii) by adding at the end the following:
       ``(iv) other foreign authorities; and''; and
       (2) by striking subsection (d) and inserting the following:
       ``(d) Confidentiality Agreement.--Before the swap data 
     repository may share information with any entity described in 
     subsection (c)(7), the swap data repository shall receive a 
     written agreement from each entity stating that the entity 
     shall abide by the confidentiality requirements described in 
     section 8 relating to the information on swap transactions 
     that is provided.''.
       (c) Security-based Swap Data Repositories.--Section 
     13(n)(5) of the Securities Exchange Act of 1934 25 (15 U.S.C. 
     78m(n)(5)) is amended--
       (1) in subparagraph (G)--
       (A) in the matter preceding clause (i), by striking ``all'' 
     and inserting ``security-based swap''; and
       (B) in subclause (v)--
       (i) in subclause (II), by striking ``; and'' and inserting 
     a semicolon;
       (ii) in subclause (III), by striking the period at the end 
     and inserting ``; and''; and
       (iii) by adding at the end the following:

       ``(IV) other foreign authorities.''; and

       (2) by striking subparagraph (H) and inserting the 
     following:
       ``(H) Confidentiality agreement.--Before the security-based 
     swap data repository may share information with any entity 
     described in subparagraph (G), the security-based swap data 
     repository shall receive a written agreement from each entity 
     stating that the entity shall abide by the confidentiality 
     requirements described in section 24 relating to the 
     information on security-based swap transactions that is 
     provided.''.
       (d) Effective Date.--The amendments made by this Act shall 
     take effect as if enacted as part of the Dodd-Frank Wall 
     Street Reform and Consumer Protection Act (Public Law 111-
     203) on July 21, 2010.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Virginia (Mr. Hurt) and the gentlewoman from California (Ms. Maxine 
Waters) each will control 20 minutes.
  The Chair recognizes the gentleman from Virginia.


                             General Leave

  Mr. HURT of Virginia. Mr. Speaker, I ask unanimous consent that all 
Members may have 5 legislative days in which to revise and extend their 
remarks and to include extraneous material on the bill.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Virginia?
  There was no objection.
  Mr. HURT of Virginia. Mr. Speaker, I ask unanimous consent to yield 
all remaining time to the gentleman from Georgia (Mr. Austin Scott) and 
ask unanimous consent that he be allowed to control the time.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Virginia?
  There was no objection.
  Mr. AUSTIN SCOTT of Georgia. Mr. Speaker, I yield myself such time as 
I may consume.
  I rise today in support of H.R. 1847, the Swap Data Repository and 
Clearinghouse Indemnification Correction Act of 2015.
  I want to thank Mr. Hurt and Chairman Hensarling for allowing the 
Agriculture Committee to manage time with them today. The members of 
our committee have always appreciated the close working relationship 
that we have with the Financial Services Committee on these financial 
and regulatory issues.
  H.R. 1847 is a targeted correction to remove barriers to information 
sharing. Dodd-Frank currently requires indemnification agreements from 
foreign regulators requesting information from U.S. swap data 
repositories or derivatives clearing organizations.
  The agreements state that the foreign regulators will abide by 
certain confidentiality requirements and indemnify the U.S. commissions 
for any expenses arising from litigation relating to the request for 
information.
  Unfortunately, the concept of indemnification does not exist in many 
foreign jurisdictions. Therefore, some foreign regulators cannot agree 
to these requirements. This may hinder our ability to make workable 
data sharing arrangements with those regulators and, ultimately, 
fragment the marketplace by encouraging them to establish their own 
data repositories.
  H.R. 1847 addresses this potential data sharing problem by removing 
the indemnification requirements from current law, while maintaining 
existing provisions requiring confidentiality obligations.
  This technical correction has been a longstanding priority for 
Congress. Similar legislation passed the House in the 113th Congress by 
a vote of 420-2 and passed the House again this year as part of H.R. 
37, the Promoting Job Creation and Reducing Small Business Burdens Act.
  Additionally, this identical language was included in H.R. 2289, the 
Commodity End-User Relief Act, after a small technical change was 
offered by Ms. Moore and Mr. Crawford and accepted by the House.
  I urge my colleagues to join me in supporting H.R. 1847 to ensure 
that regulators and market participants have access to a global set of 
swap market data.
  I reserve the balance of my time.

                                         House of Representatives,


                                     Committee on Agriculture,

                                    Washington, DC, July 13, 2015.
     Hon. Jeb Hensarling,
     Chairman, Committee on Financial Services, House of 
         Representatives, Washington, DC.
       Dear Chairman Hensarling: I am writing concerning H.R. 
     1847, the ``Swap Data Repository and Clearinghouse 
     Indemnification Correction Act of 2015.''
       This legislation contains provisions within the Committee 
     on Agriculture's Rule X jurisdiction. As a result of your 
     having consulted with the Committee and in order to expedite 
     this bill for floor consideration, the Committee on 
     Agriculture will forego action on the bill. This is being 
     done on the basis of our mutual understanding that doing so 
     will in no way diminish or alter the jurisdiction of the 
     Committee on Agriculture with respect to the appointment of 
     conferees, or to any future jurisdictional claim over the 
     subject matters contained in the bill or similar legislation.
       I would appreciate your response to this letter confirming 
     this understanding, and would request that you include a copy 
     of this letter and your response in the Committee Report and 
     in the Congressional Record during the floor consideration of 
     this bill. Thank you in advance for your cooperation.
           Sincerely,
                                               K. Michael Conaway,
     Chairman.
                                  ____

                                         House of Representatives,


                              Committee on Financial Services,

                                    Washington, DC, July 14, 2015.
     Hon. Michael Conaway,
     Chairman, Committee on Agriculture,
     Washington, DC.
       Dear Chairman Conaway: Thank you for your July 13 letter 
     regarding H.R. 1847, the ``Swap Data Repository and 
     Clearinghouse Indemnification Correction Act of 2015''.
       I am most appreciative of your decision to forego action on 
     H.R. 1847 so that it may move expeditiously to the House 
     floor. I acknowledge that although you are waiving action on 
     the bill, the Committee on Agriculture is in no way waiving 
     its jurisdiction over any subject matter contained in the 
     bill that falls within its jurisdiction. In addition, if a 
     conference is necessary on this legislation, I will support 
     any request that your committee be represented therein.
       Finally, I shall be pleased to include your letter and this 
     letter in our committee's report on H.R. 1847 and in the 
     Congressional Record during floor consideration of the same.
           Sincerely,
                                                   Jeb Hensarling,
                                                         Chairman.

  Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself such 
time as I may consume.
  Mr. Speaker, transparent trading of derivatives, along with realtime 
reporting of trades to swap data repositories, is a crucial element of 
the Dodd-Frank Act.
  This bill makes necessary technical changes to better enable our 
Nation's regulators to share that data about derivatives with one 
another and with their foreign counterparts.
  An unintended result in Dodd-Frank of trying to protect both 
regulators

[[Page 11453]]

and the data repositories from burdensome litigation was that other 
regulators lacked the authority to pay future legal expenses, thus 
threatening to prevent the sharing of information.
  This was clearly not intended as one of the primary goals of title 
VII, to enable regulators and the public to better understand the 
derivatives market. H.R. 1847 addresses those concerns and is supported 
by the industry and advocates, like Americans for Financial Reform, 
alike.
  I also understand that the bill includes additional changes to the 
legislation requested by the SEC to better target the statutory change.
  I thank Representative Moore and Representative Crawford for working 
together in a bipartisan manner to address these issues and solve a 
very real threat to cross-border regulatory cooperation and oversight.
  I urge support of this legislation, and I reserve the balance of my 
time.
  Mr. AUSTIN SCOTT of Georgia. I yield such time as he may consume to 
the gentleman from Arkansas (Mr. Crawford) and thank him for his 
continued work on this technical but critical issue.
  Mr. CRAWFORD. Mr. Chairman, I thank the distinguished chairman of the 
subcommittee, Mr. Scott, and I would like to thank the other cosponsors 
of this bill, Mr. Huizenga, Ms. Moore, and Mr. Maloney, for joining me 
in this bipartisan effort to help bring transparency to the global swap 
markets. I certainly appreciate the subcommittee chairman's support as 
well.
  While I might not agree with every provision in the Dodd-Frank law 
today, I believe we are working towards its bipartisan goal of giving 
regulators the tools they need to improve systemic risk mitigation in 
the global financial markets.
  I think everyone agrees that the lack of transparency and the over-
the-counter derivatives markets escalated the financial crisis of 2008. 
In order to provide market transparency, the Dodd-Frank law requires 
posttrade reporting to swap data repositories, or SDRs as they are 
called, so that regulators and market participants have access to 
realtime market data that will help identify systemic risk in the 
financial system. So far, we have made great strides in reaching this 
goal, but, unfortunately, a provision in the law threatens to undermine 
our progress unless we fix it.
  Currently, Dodd-Frank requires a provision requiring a foreign 
regulator to indemnify a U.S.-based SDR from any expenses arising from 
litigation relating to a request from market data. While the intent of 
the provision was to protect market confidentiality, in practice, it 
threatens to fragment global data on swap markets because it is a major 
stumbling block to our regulators' abilities to coordinate with foreign 
counterparts.
  The intended result is a fragmented global data framework where 
regulators were unable to see a complete picture of the marketplace. 
Without effective coordination between international regulators and 
SDRs, monitoring and mitigating global systematic risk is severely 
limited.
  My bill fixes this problem by removing the indemnification provisions 
in Dodd-Frank. This legislation has broad bipartisan support and passed 
the House by an overwhelming vote of 420-2 in the last Congress, as 
Chairman Scott indicated. Additionally, both the SEC and CFTC are on 
record supporting this bill.
  If left unresolved, the indemnification provision in Dodd-Frank has 
the potential to reduce transparency in the over-the-counter 
derivatives markets and undo the great progress already being made 
through the cooperative efforts of more than 50 regulators worldwide.
  In passing this legislation, we ensure that regulators will have 
access to a global set of swap market data, which is essential to 
maintaining the highest degree of market transparency and risk 
mitigation.
  I strongly urge my colleagues to vote ``yes'' on this bill.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield such time as 
she may consume to the gentlewoman from Wisconsin (Ms. Moore), who 
happens to be the ranking member for the Subcommittee on Monetary 
Policy and Trade.

                              {time}  1445

  Ms. MOORE. Mr. Speaker, I thank the madam ranking member for this 
opportunity to speak on H.R. 1847.
  I also want to thank all of my cosponsors on this legislation: 
Representative Huizenga, Representative Crawford, and Representative 
Sean Patrick Maloney.
  Mr. Speaker, the House Financial Services and Agriculture Committees 
passed this legislation with bipartisan support and without controversy 
in 2013, 2014, and 2015. This bill has passed the House several times 
with overwhelming margins, and it is supported by the SEC.
  At the Bipartisan Policy Center's 5-year look-back at Dodd-Frank just 
last week, the question was put to former Commodity Futures Trading 
Commissioner Jill Sommers: What is yet to be done in Dodd-Frank that 
needs to be done? Her answer: fixing the indemnification provision.
  Here we are today, and we have an opportunity to do this with that 
bill. Let me try to make this really simple.
  A major objective of the Dodd-Frank Act was to improve transparency 
and to eliminate systemic risk mitigation in global derivatives 
markets. This bill is a technical fix to ensure that the goal of swaps 
transparency is realized.
  In fact, Dodd-Frank requires post-trade reporting to swap data 
repositories. During the crisis, these SDRs did not exist.
  As a matter of fact, to quote Warren Buffett when he described the 
situation we were in, he said:

       Only when the tide goes out do you discover who has been 
     swimming naked.

  This is a really important feature in Dodd-Frank. However, as 
written, a provision threatens the reporting regime and threatens to 
fragment the collection of data by imposing an unnecessary requirement 
on foreign SDRs and regulators that would impede compliance.
  By eliminating this unnecessary requirement, this bill makes it 
possible to achieve the goal of bringing comprehensive swap trade 
information, transparency, and oversight to the global derivatives 
markets.
  Regardless of your position on derivatives or on Dodd-Frank, this 
bill makes sense, and I urge all of my colleagues to support it.
  Ms. MAXINE WATERS of California. Mr. Speaker, I have no additional 
speakers.
  I yield back the balance of my time.
  Mr. AUSTIN SCOTT of Georgia. Mr. Speaker, in closing, I want to thank 
both the Democrats and the Republicans who have worked on this.
  The House has acted several times in a bipartisan manner on this 
legislation--420-2 on very similar legislation. We have passed this 
multiple times; so I would just encourage all Members to support this 
piece of legislation.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Virginia (Mr. Hurt) that the House suspend the rules and 
pass the bill, H.R. 1847, as amended.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

                          ____________________