Date: 2015-01-13
Speaker: AUSTIN SCOTT (republican)
Chamber: H
State: Georgia

Mr. Speaker. I rise in support of H.R. 37. the Promoting Job Creation and Reducing Small Business Burdens Act. As chairman of the Agriculture Subcommittee on Commodity Exchanges. Energy and Credit. I specifically want to highlight and voice my support for the past work of the Agriculture Committee on the three titles of this bill that we worked on. First of all. title I of this bill. the Business Risk Mitigation and Price Stabilization Act. will provide muchneeded relief to American farmers. businesses. and job creators who rely on derivatives to manage the risk inherent in the daily operation of their farms and businesses. It will do so by reinforcing congressional intent that those market participants who have been exempted from clearing their trades are also exempted from corresponding margin requirements. These exemptions make sure that end users do not have to divert working capital to margin requirements. thus keeping those dollars at work in the economy. I am pleased that this provision was included in this package. as well as in the TRIA authorization that was recently approved by both the House and the Senate. Also under the Ag Committees jurisdiction is title II of H.R. 37. pertaining to the treatment of interaffiliate transactions. This wellreasoned provision was passed by the Congress multiple times in the 113th Congress and also will prevent the tieup of working capital. It will do so by ensuring that transactions between affiliates within a single corporate group are not regulated as swaps. If such transactions are subject to the same regulations as swaps. companies could be subject to double margin requirements. Since interaffiliate swaps pose no systemic risk to the economy or the marketplace. such redundant regulation would provide no additional risk reduction while substantially raising costs that would ultimately be passed on to the consumers. Title II of H.R. 37 will prevent that misguided regulatory scheme and allow American businesses to continue utilizing their established and efficient centralized trading models. Finally. the corrections made by title V of H.R. 37 will ensure that regulators and market participants have access to a global set of swap market data. DoddFrank currently requires indemnification agreements from foreign regulators requesting information from U.S. swap data repositories or derivatives clearing organizations. These agreements state that the foreign regulator will abide by certain confidentiality requirements and indemnify the U.S. Commission for any expenses arising from litigation relating to the request for information. Unfortunately. the concept of indemnification does not exist in many foreign jurisdictions. As such. some foreign regulators cannot agree to these indemnification requirements. This may hinder our ability to make a workable datasharing arrangement with those regulators and ultimately fragment the marketplace by encouraging them to establish their own data repositories. H.R. 37 narrowly addresses this potential datasharing problem by simply removing the indemnification requirements from current law. Existing provisions requiring certain confidentiality obligations will remain in place. Mr. Speaker. I would like to thank