Making Progress on OTC Derivatives

By October 6, 2009Economy, Regulations

From Bloomberg, “Manufacturers Win Exemption in Frank Derivatives Plan,” reporting on House Financial Services Chairman Barney Frank’s draft plan to regulate over-the-counter (OTC) derivates.

The National Association of Manufacturers, U.S. Chamber of Commerce and the Business Roundtable, three of the biggest trade associations in Washington, lobbied Congress and the administration to exempt end-users from new rules and collateral requirements. End-users employ derivatives to hedge a risk to their operations, such as swings in interest rates, foreign currencies or commodities prices.

“This bill is certainly very positive,” said Dorothy Coleman, vice president of tax and domestic economic policy at the manufacturers organization, in an interview today. “It has clearer exemptions for end-users, which is something we’ve been pushing for.”

Chairman Frank announced the legislative developments on Friday as described in his news release, “Frank Circulates Discussion Draft of Legislation to Regulate OTC Derivatives.”

Also, the House Financial Services Committee holds a hearing Wednesday, “Reform of the Over-the-Counter Derivative Market: Limiting Risk and Ensuring Fairness

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