FAST Act Fixes Dodd-Frank Swap Glitch
Although primarily a transportation bill, the FAST Act contains other provisions, including provisions simplifying securities laws and another provision fixing the Dodd-Frank Act. As describe by CFTC Commissioner J. Christopher Giancarlo “The Dodd-Frank Act created the vehicle of swap data repositories to compile data on global swaps transactions providing international regulators with essential information necessary in the event of a future crisis. Yet, a major flaw in Dodd-Frank imposed indemnification obligations on overseas regulators in order to share this critical information, which has been preventing international data sharing for swaps transactions. As a result, seven years after the financial crisis, regulators still do not have full transparency into global counterparty credit exposure that Dodd-Frank was designed to provide.”
Section 86001 of the FAST Act addresses this by eliminating the indemnification requirement and replacing it with a requirement that a written agreement be obtained which requires compliance with certain statutory confidentiality obligations.
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