Swat Data Repository and Clearinghouse Indemnification Correction Act

Floor Speech

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Mr. CRAWFORD. Mr. Chairman, I thank the distinguished chairman of the
subcommittee, Mr. Scott, and I would like to thank the other cosponsors
of this bill, Mr. Huizenga, Ms. Moore, and Mr. Maloney, for joining me
in this bipartisan effort to help bring transparency to the global swap
markets. I certainly appreciate the subcommittee chairman's support as
well.

While I might not agree with every provision in the Dodd-Frank law
today, I believe we are working towards its bipartisan goal of giving
regulators the tools they need to improve systemic risk mitigation in
the global financial markets.

I think everyone agrees that the lack of transparency and the over-
the-counter derivatives markets escalated the financial crisis of 2008.
In order to provide market transparency, the Dodd-Frank law requires
posttrade reporting to swap data repositories, or

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SDRs as they are called, so that regulators and market participants
have access to realtime market data that will help identify systemic
risk in the financial system. So far, we have made great strides in
reaching this goal, but, unfortunately, a provision in the law
threatens to undermine our progress unless we fix it.

Currently, Dodd-Frank requires a provision requiring a foreign
regulator to indemnify a U.S.-based SDR from any expenses arising from
litigation relating to a request from market data. While the intent of
the provision was to protect market confidentiality, in practice, it
threatens to fragment global data on swap markets because it is a major
stumbling block to our regulators' abilities to coordinate with foreign
counterparts.

The intended result is a fragmented global data framework where
regulators were unable to see a complete picture of the marketplace.
Without effective coordination between international regulators and
SDRs, monitoring and mitigating global systematic risk is severely
limited.

My bill fixes this problem by removing the indemnification provisions
in Dodd-Frank. This legislation has broad bipartisan support and passed
the House by an overwhelming vote of 420-2 in the last Congress, as
Chairman Scott indicated. Additionally, both the SEC and CFTC are on
record supporting this bill.

If left unresolved, the indemnification provision in Dodd-Frank has
the potential to reduce transparency in the over-the-counter
derivatives markets and undo the great progress already being made
through the cooperative efforts of more than 50 regulators worldwide.
In passing this legislation, we ensure that regulators will have
access to a global set of swap market data, which is essential to
maintaining the highest degree of market transparency and risk
mitigation.

I strongly urge my colleagues to vote ``yes'' on this bill.

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