Amendment Introduced to Ensure Well-Functioning Swaps Market

This story appeared in Bank Digest.

Rep. Scott Garrett, R-N.J., Chairman of the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, has introduced an amendment to the 2012 Agriculture Appropriations bill that would require swap data reporting rules to be finalized and in effect for 12 months before the Commodity Futures Trading Commission can promulgate block trade and real-time reporting rules. With this change, the CFTC would have the ability to collect transaction data it needs to determine reasonable standards for block trade levels and real-time reporting without disrupting the marketplace, according to Garrett, who stated that “It's unreasonable to think we can try to regulate a multifaceted and complex industry without fully understanding the dynamics of the marketplace...Finalizing any numerical determination of block trade sizes or setting real-time reporting time frames prior to having the necessary data is arbitrary, encourages litigation, and will likely have unintended consequences on pension funds' ability to protect their investors as well as on economic growth and job creation at a time when we can least afford it.”