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Financial Reform Still High on Congressional Agenda, Says Wolters Kluwer Law & Business
New White Paper Examines Prospects for Financial Regulatory Legislation in 112th Congress
(RIVERWOODS, ILL., January 17, 2011) – The reform of government-sponsored enterprises such as Fannie Mae and Freddie Mac is at the top of the agenda for the financial oversight committees of the new Congress, according to the new white paper, Prospects for Financial Legislation in the 112th Congress, from Wolters Kluwer Law & Business. Wolters Kluwer Law & Business is a leading provider of information and software solutions in key specialty areas for legal and business professionals, with products under the CCH and Aspen names (wolterskluwerlb.com).
“Although the continuing legislative agenda for financial regulation will be modified under a new Republican majority in the House, there is still an opportunity for reform legislation this year,” said Wolters Kluwer Law & Business Principal Securities Law Analyst James Hamilton, JD, LLM. Hamilton is the author of Prospects for Financial Legislation in the 112th Congress, as well as one of the lead analysts for Wolters Kluwer Law & Business’ Dodd-Frank Wall Street Reform and Consumer Protection Act: Law, Explanation and Analysis. Hamilton’s well-known industry blog: Jim Hamilton’s World of Securities Regulation offers unique analysis on securities law and regulation. For a copy of the new white paper, please click here.
GSE Reform and Covered Bonds
There is growing, bipartisan support for reform of government-sponsored enterprises (GSEs), including Fannie Mae and Freddie Mac, as part of the overall reform of the securitized secondary mortgage market. As part of GSE reform, legislation creating a U.S. covered bond market under SEC supervision would replace the mortgage securitization function that GSEs currently perform. Covered bonds have been used in Europe to help provide additional funding options for the issuing institutions and are a major source of liquidity for many European nations’ mortgage markets. The legislation would seek to provide the same benefits to the U.S. market.
“The covered bond provisions narrowly missed being included in the Dodd-Frank Act,” Hamilton explained. “It’s likely that new legislation would provide for the regulatory oversight of covered bond programs, including provisions for default and insolvency of covered bond issuers, and could subject covered bonds to SEC regulation.”
The new chair of the House Financial Services Committee, Rep. Spencer Bachus (R-Ala), said Congress will consider legislation to delay the statutory deadlines in Dodd-Frank if that will allow the SEC and CFTC to move deliberately and carefully to ensure that the derivatives regulatory regime is correctly implemented.
In a letter to the SEC and CFTC on derivatives regulation, Chairman Bachus stressed that it’s critical for both commissions to implement the commercial end-user exemption consistently with legislative intent and allow companies to hedge legitimate business risks. He also urged each commission to carefully consider the scope of the definitions of “swap dealer,” “security-based swap dealer,” “major swap participant” and “security-based swap participant,” to prevent overly broad definitions from forcing smaller participants out of the market and for eliminating some types of hedging contracts – exposing businesses to market volatility rather than insulating them from it.
PCAOB Disciplinary Proceedings
The Public Company Accounting Oversight Board (PCAOB) has requested legislation amending the Sarbanes-Oxley Act so that Board disciplinary hearings against individual auditors and accounting firms will be public. Currently, these proceedings take place behind closed doors and contrast with similar SEC proceedings against auditors.
For More Information
For members of the press interested in speaking with Wolters Kluwer Law & Business securities and banking law experts about Prospects for Financial Legislation in the 112th Congress, should contact Eric Scott at 847-267-2179, firstname.lastname@example.org or Brenda Au at 847-267-2046, email@example.com.
More detail on financial and securities reform can be found at the Financial Reform News Center at http://financialreform.wolterskluwerlb.com, providing the legal community and others with a cohesive and robust selection of new developments and analysis. To order Dodd-Frank Wall Street Reform and Consumer Protection Act: Law, Explanation and Analysis, visit http://onlinestore.cch.com or call 1-800-248- 3248.
About Wolters Kluwer Law & Business
Wolters Kluwer Law & Business is a leading provider of research products and software solutions in key specialty areas for legal and business professionals, as well as casebooks and study aids for law students. Its major product lines include Aspen Publishers, CCH, Kluwer Law International and Loislaw. Its markets include health care organizations, law firms, law schools, corporate counsel and professionals requiring legal and compliance information. Wolters Kluwer Law & Business, a unit of Wolters Kluwer, is based in New York City and Riverwoods, Ill. Wolters Kluwer is a market-leading global information services company.
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