This was a vote on an amendment by Rep. Scott Garrett (R-NJ) that would require the Commodity Futures Trading Commission (CFTC) to finalize data swap reporting rules (disclosure rules governing the trading of financial information between companies) one year prior to issuing final regulations on block trading (in which one business can privately trade shares of a company with another business). This amendment was offered to legislation providing annual funding for Agriculture Department programs.
Garrett urged support for his amendment: “…My amendment would simply require the CFTC to finalize important data-reporting rules before they implement new rules for certain swap transactions. See, with this change, it would be able to collect the transaction data that it needs to determine the reasonable standards for block trade levels and real-time reporting requirements without first disrupting the marketplace. You see, finalizing any numerical determination of block trade sizes or setting real-time reporting requirement timeframes prior to having necessary data, really, if you think about it, would be arbitrary, would encourage litigation, and will likely have the unintended consequences on those very same pension funds I talked about--their ability to protect their investors, as well as on the economic growth of our country and job creation. So, what this amendment would do is require swap data-reporting rules to be finalized and be in place before promulgating the final block trade rules or those real-time reporting criteria rules.”
Rep. Colin Peterson (D-MN) opposed the amendment: “If the market participants know more, like what we do in the exchange trading and so forth, the margins are going to come down and the profits of these big banks are going to shrink. In fact, some people have said that they think that once this is implemented that it's probably going to reduce the profits of the Wall Street banks 40 percent. And they don't like it, and they want to delay it. So some would argue that we need more data collection, and I guess that's what you are arguing before this public reporting. I think for some swaps, that is the case, and I will agree with that. But on other swaps, the institutions are already collecting this data. They can go forward with this public reporting. We have the information. There's no reason to delay it. In other cases where we don't have the information, it probably isn't appropriate to delay it.”
The House agreed to this amendment by a vote of 231-189. Voting “yea” were 229 Republicans and 2 Democrats. 182 Democrats and 7 Republicans voted “nay.” As a result, the House agreed to an amendment that would require the Commodity Futures Trading Commission to finalize data swap reporting rules one year prior to issuing final regulations on block trading. In order for this amendment to become law, however, it would have to pass the Senate.