Oct 15 (Reuters) - The U.S. House of Representatives Financial Services Committee on Thursday approved proposed new rules for over-the-counter derivatives, marking the first major step forward in months for the Obama administration's sweeping program to tighten bank and capital market regulations.
The following is a summary of pending reform proposals. Companies whose businesses could be at risk are listed under 'political risk exposure.'
OTC DERIVATIVES: The House Financial Services Committee approved a bill to impose regulations on the $450 trillion OTC derivatives market. Like other bills before the committee, the OTC derivatives measure was expected to be folded into a single bill before going to the House floor for a November vote.
A competing, somewhat tougher bill in the House Agriculture Committee is expected to undergo a committee vote next week.
The bill approved by financial services, authored by Democratic committee Chairman Barney Frank, is weaker than one proposed earlier this year by President Barack Obama.
The president wants clearing of standardized OTC derivatives and would move them, as much as possible, on to regulated exchanges, while reporting would be required for transactions in 'customized' derivatives.
Related legislation has been introduced in the Senate, but no action has been taken.
Political risk exposure: JPMorgan Chase, Bank of America, Citigroup, Goldman Sachs, CME Group Inc, IntercontinentalExchange.
(For the Oct. 2 draft of the House Financial Services Committee's bill, double-click on: http://www.house.gov/apps/list/speech/financialsvcs_dem/otc_discussion_draft_for_markup.pdf)
(For the Obama administration's bill, double-click on: http://www.financialstability.gov/docs/regulatoryreform/titleVII.pdf)
(For the House Agriculture Committee's draft bill, double-click on: http://agriculture.house.gov/inside/Legislation/111/JDG_372_xml. pdf)
EXECUTIVE PAY: The House has approved a bill to give shareholders in public corporations annual, nonbinding votes on executive pay, and to ban compensation structures at major financial institutions that encourage excessive risk-taking.
Obama is pleased with the House bill, although the administration's proposal is more modest. It would give shareholders more 'say on pay,' like the House measure, but not empower regulators to ban risk-inducing pay structures.
The Senate has not yet taken action on the issue.
(For the administration's bill, double-click on: http://www.treas.gov/press/releases/docs/tg_218IX.pdf)
(For the House bill, double-click on: http://www.house.gov/apps/list/press/financialsvcs_dem/hr3269.pdf)
SYSTEMIC RISK REGULATION: Congress is moving toward empowering an inter-agency council of regulators to oversee risks to the economy from large, interconnected firms, with the Federal Reserve and Treasury Department in key roles.
The Obama administration had wanted to give the Fed a dominant position as systemic risk regulator, but that stance has softened in the face of widespread lawmaker skepticism.
The Senate has taken no action on the matter.
(For the administration's bill, double-click on: http://www.financialstability.gov/roadtostability/regulatoryreform.html)
(For the House bill, double-click on: http://financialservices.house.gov/Key_Issues/Financial_Regulatory_Reform/FinancialRegulatoryReform/Titles/title_I_FSOC_7-22-2009_fnl.pdf)
Keywords: FINANCIAL REGULATION/PROPOSALS
COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The following is a summary of pending reform proposals. Companies whose businesses could be at risk are listed under 'political risk exposure.'
OTC DERIVATIVES: The House Financial Services Committee approved a bill to impose regulations on the $450 trillion OTC derivatives market. Like other bills before the committee, the OTC derivatives measure was expected to be folded into a single bill before going to the House floor for a November vote.
A competing, somewhat tougher bill in the House Agriculture Committee is expected to undergo a committee vote next week.
The bill approved by financial services, authored by Democratic committee Chairman Barney Frank, is weaker than one proposed earlier this year by President Barack Obama.
The president wants clearing of standardized OTC derivatives and would move them, as much as possible, on to regulated exchanges, while reporting would be required for transactions in 'customized' derivatives.
Related legislation has been introduced in the Senate, but no action has been taken.
Political risk exposure: JPMorgan Chase, Bank of America, Citigroup, Goldman Sachs, CME Group Inc, IntercontinentalExchange.
(For the Oct. 2 draft of the House Financial Services Committee's bill, double-click on: http://www.house.gov/apps/list/speech/financialsvcs_dem/otc_discussion_draft_for_markup.pdf)
(For the Obama administration's bill, double-click on: http://www.financialstability.gov/docs/regulatoryreform/titleVII.pdf)
(For the House Agriculture Committee's draft bill, double-click on: http://agriculture.house.gov/inside/Legislation/111/JDG_372_xml. pdf)
EXECUTIVE PAY: The House has approved a bill to give shareholders in public corporations annual, nonbinding votes on executive pay, and to ban compensation structures at major financial institutions that encourage excessive risk-taking.
Obama is pleased with the House bill, although the administration's proposal is more modest. It would give shareholders more 'say on pay,' like the House measure, but not empower regulators to ban risk-inducing pay structures.
The Senate has not yet taken action on the issue.
(For the administration's bill, double-click on: http://www.treas.gov/press/releases/docs/tg_218IX.pdf)
(For the House bill, double-click on: http://www.house.gov/apps/list/press/financialsvcs_dem/hr3269.pdf)
SYSTEMIC RISK REGULATION: Congress is moving toward empowering an inter-agency council of regulators to oversee risks to the economy from large, interconnected firms, with the Federal Reserve and Treasury Department in key roles.
The Obama administration had wanted to give the Fed a dominant position as systemic risk regulator, but that stance has softened in the face of widespread lawmaker skepticism.
The Senate has taken no action on the matter.
(For the administration's bill, double-click on: http://www.financialstability.gov/roadtostability/regulatoryreform.html)
(For the House bill, double-click on: http://financialservices.house.gov/Key_Issues/Financial_Regulatory_Reform/FinancialRegulatoryReform/Titles/title_I_FSOC_7-22-2009_fnl.pdf)
Keywords: FINANCIAL REGULATION/PROPOSALS
COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.