Wednesday, November 26, 2014

Dold and Schweikert Will Join Financial Services Committee for 114th Congress

Rep. Jeb Hensarling (R-TX), Chair of the House Financial Services Committee, announced that Rep. Robert Dold (R-IL) and Rep. David Schweikert (R-AZ), two House members with a strong interest in federal securities legislation, will be joining the Committee in the 114th Congress. Rep. Schweikert is a principal architect of the Jumpstart Our Business Startups (JOBS) Act. He is the author of Title IV of the Act, which increases the offering threshold for companies exempted from SEC registration under Regulation A from $5 million to $50 million.

In the 113th Congress, Rep. Schweikert introduced the Spread Pricing Liquidity Act, HR 1952, to give small companies with limited market capitalization greater access to public equity. According to Rep. Schweikert, the bill responds to overwhelming evidence that wider ticks for small-cap companies will stimulate liquidity, encourage capital formation, and grow jobs. The Spread Pricing Liquidity Act allows companies with public float of less than $500 million and average daily trading volume under 500,000 shares to select to have their securities quoted at increments of either 5 or 10 cents, while maintaining trading between the quoted ticks.

Rep. Dold is best known for his co-authorship of the bi-partisan Swap Data Repository and Clearinghouse Indemnification Correction Act, HR 742, which is designed to ensure that U.S. and foreign regulators can share necessary swaps data to increase market transparency and facilitate global regulatory cooperation. The Act passed the House by a vote of 420-2.

The Dodd-Frank Act requires swap data repositories and clearing organizations to make data available to foreign regulators. But this data-sharing can happen only if foreign regulators agree to indemnify the U.S. entity and U.S. regulators for any corresponding litigation expenses that might arise. Foreign regulators have been unwilling or unable to agree to such indemnification agreements under their own legal structures, noted Rep. Dold, so the indemnification provisions would prevent the necessary data-sharing. To ensure that U.S. and foreign regulators have access to derivatives data, H.R. 742 (HR 4235 in the 112th Congress when Rep. Dold first introduced it) would eliminate the indemnification provisions that would otherwise impede the necessary data-sharing arrangements.