Week InAdvance: December 7, 2015
The House Financial Services Committee will hold a hearing Tuesday on "Oversight of the Financial Stability Oversight Council" with all the members of the regulators' panel in attendance except Treasury Secretary Jack Lew, its chairman, and Fed Chair Janet Yellen. The Securities and Exchange Commission meets Friday to propose rules for use of derivatives by investment companies and disclosure of government payments by "resource-extraction issuers" such as oil companies and mining firms. The two matters are unrelated, but each has been controversial in its own way. The derivatives measure addresses a gray area in U.S. securities laws governing how much collateral fund managers must set aside to cover potential losses on swaps contracts. Since 2011, the SEC has urged - but not required - mutual funds to set aside a dollar of physical assets for every dollar of bonds they insure through swaps contracts. The approach the SEC is considering could force changes by investment funds that have told the agency they would use different criteria in setting collateral. The payments proposal - required by the Dodd-Frank Act - will be the SEC's second attempt at the measure after an initial version prompted a successful industry lawsuit. The new version will require companies such as Exxon Mobil and Chevron to report how much they spend to develop specific projects, as opposed to simply providing totals for each country as the industry wanted. The approach could set off a new battle between energy firms that sued the SEC to overturn an earlier version and groups like Oxfam America, which filed its own lawsuit to force the regulator to complete the regulation.
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