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Legislative Updates: September 2010

 

Capitol Call

Traditionally, August is one of the slowest months of the year for both legislative and regulatory actions. With record heat and humidity, Members of Congress and their staffs were eager to leave Washington, D.C. for cooler locations, to reconnect with their constituents and to go on vacation. This year was no exception, though a few surprises were in store for them.

For the first time in many years, the House of Representatives was called back into session during the August recess to vote on a measure that provided an additional $16 billion to cover Medicaid costs and $10 billion for school districts. In this election year, Members of Congress have passed many bills designed to help states and localities that are facing funding challenges. The Senate had already approved the measure earlier in August and President Obama quickly signed it into law.

Later in the month, the CFTC and SEC held a Roundtable on conflicts related to clearing and trading of swaps and security-based swaps. With just one week of notice, the Roundtable was well-attended with about 15 industry professionals participating in two panels. Although CFTC Chairman Gensler observed the Roundtable, critical CFTC and SEC Staff oversaw the entire event. OCC General Counsel William Navin participated as a Roundtable panelist.

The SEC and CFTC recently announced that another Roundtable on Swap Data, Swap Data Repositories and Real-Time Reporting will occur on September 14, 2010.

At the end of the month, House Financial Services Committee Ranking Member Spencer Bachus (R-AL) and Subcommittee on Financial Institutions Ranking Member Jeb Hensarling (R-TX) sent a letter with twenty questions to the SEC related to the many events that disrupted the markets on May 6, 2010. Several of these questions were related to the options market. Responses for this letter were expected on September 10, 2010.

When Congress reconvenes in September, they will be faced with many competing priorities. They are expected to consider individual appropriations bills and tax legislation for expiring tax provisions. It remains to be seen however, whether any legislation will be approved before the members head back to their districts to campaign for re-election or they will wait until after the elections to tackle the controversial issues facing them.

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