Lawmakers Urge Regulators To Exempt Some Businesses From Derivatives Rules


WASHINGTON -(Dow Jones)- U.S. lawmakers in charge of overseeing implementation of the Dodd-Frank financial-overhaul law urged regulators to exempt “end-user” businesses from new rules on customized over-the-counter derivatives, in a letter released Thursday.

Certain end users–corporations that use derivatives to hedge against business risks–are exempt from some of the new Dodd-Frank requirements, but regulators are still writing the rules that will define who qualifies for the exemption.

“Regulators should exempt end users from margin requirements and seek to limit other regulatory burdens that could have the unintended effect of driving up costs for end users,” lawmakers said in the letter.

Sen. Debbie Stabenow (D., Mich.), Sen. Tim Johnson (D., S.D.), Rep. Frank Lucas (R., Okla.) and Rep. Spencer Bachus (R., Ala.) sent the letter Wednesday to heads of the agencies writing the derivatives rules mandated by Dodd-Frank. These agencies include the Treasury Department, the Federal Reserve, the Securities and Exchange Commission and the Commodity Futures Trading Commission.

“If end-user transactions are subject to margin requirements, costs for consumers could increase, and end-users may divert working capital from activities that promote economic growth and job creation,” the lawmakers, chairmen of the committees that oversee Dodd-Frank implementation, said in the letter.

Lawmakers also urged regulators to coordinate with each other “especially on rules that will impact end-user costs” and with international efforts to regulate derivatives.

-By Jamila Trindle, Dow Jones Newswires; 202-862-6684; jamila.trindle@


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