Patrick McHenryChairman

Representatives Spencer Bachus (R-AL), Frank Lucas (R-OK), K. Michael Conaway (R-TX), and Scott Garrett (R-NJ) introduced H.R. 1573, which would extend the deadline by 18 months for implementing Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The bill gives the regulatory agencies more time to effectively meet the objectives of the derivatives title, to prioritize deliberation over speed, to consider the costs and benefits, and to understand the cumulative impact of the rules that will be applied to the marketplace. Additionally, the bill realigns the U.S. with the G20 agreement to implement reform by December 2012.

The derivatives provisions of Dodd-Frank will impact every segment of the economy. The bill reflects the concerns of thousands of U.S. businesses, i.e., end-users, that use derivatives to manage the risks they face every day. For example, farmers use derivatives to lock in the prices of their crops for the coming season. Manufacturers hedge against fluctuating prices in the raw materials that go into production. Hospitals hedge against rising interest rates on financing medical equipment and technology.

To provide clarity to market participants, the bill maintains the current timeframe for the Commodity Futures Trading Commission (CFTC) and the U.S. Securities and Exchange Commission (SEC) to issue final rules regarding regulatory designations that will define the market, and maintains the current timeframe for rules requiring record retention and regulatory reporting. It also requires additional public forums to take input from stakeholders before the rules can be made final.