Securities/Commodities Regulatory Reform

In other provisions we have analyzed in the Hensarling draft legislation, the chairman of the House Financial Services Committee has restructured the FSOC1 and CFPB2 in addition to altering the way stress would be handled so that only bankruptcy could apply to parent-company failure.3 Title IV of his bill tackles the SEC and CFTC, repealing and revising much of what Dodd-Frank did to U.S. securities and commodity regulation, as well as provisions affecting executive compensation, credit rating agencies, and private-equity funds. The bill does not repeal the new margin requirements4 – perhaps due to the fact that these are promulgated under broad authority not dependent on Dodd-Frank – but it does significantly alter the CFTC’s current approach to extraterritorial application of these and other OTC-derivatives trading rules and constrains SEC efforts to govern the conduct of broker-dealers. SEC enforcement powers would also be rolled back.