Many regulators worldwide have expressed deep concerns that the provision may force jurisdictions outside the United States to establish their own “national” repositories to avoid indemnification. This would fragment the current global data set and limit the ability of regulators worldwide to obtain a comprehensive view of market activity.
Recognizing this risk, foreign jurisdictions have widely rejected the Dodd-Frank approach. For example, European lawmakers did not include an indemnification requirement in its derivatives reform package, known as European Market Infrastructure Regulation.
The unintended consequences of indemnification and plenary access have gained considerable attention among U.S. lawmakers. There now appears to be broad bipartisan and bicameral support in Congress for a legislative measure to correct these technical drafting errors. With concerns over extraterritoriality growing here and overseas, Congress must act to ensure that regulators continue to have access to as much information tomorrow as they do today.
Dan Cohen is managing director and head of government relations for the Depository Trust and Clearing Corp., a noncommercial cooperative that serves as the primary post-trade infrastructure organization for U.S. capital markets.