One of the world’s most powerful financial institutions is trying to change the indemnification provision in Dodd-Frank and has promised to relocate some operations to Europe if it fails.
The Depository Trust and Clearing Corporation, the U.S.’s main clearing and settlement provider that provides data on trading, said it has strong political support behind its effort to change the provision that discourages regulators from sharing data, EFinancialNews.com reports.
The provision limits trade repositories from sharing information, which the DTCC said will interfere with the ability of regulators to monitor trading activity and hinder their chances of identifying whether a trading firm is building up a systemically risky derivatives position.
“The indemnification provision is one area that needs to be addressed,” Larry Thompson, the general counsel of the DTCC, said, according to EFinancialNews.com. “It creates unintended consequences that can limit transparency… leading to increased systemic risk. There are opportunities for technical corrections to Dodd-Frank, and it’s a debate that Congress will likely have after the presidential election next year. We have bipartisan support in Congress to address indemnification, and we’re hopeful that after the election it will be altered.”
If the DTCC is unable to change the provision, it said that it will be forced to relocate some of its operations to Europe.