9.22.2009 U.S. Senator Jack Reed (D-RI), Chairman of the Banking Subcommittee on Securities, Insurance, and Investment, introduced the Comprehensive Derivatives Regulation Act of 2009 (CDRA). The legislation would establish a comprehensive regulatory framework to prevent derivatives trading activities from ever again contributing to catastrophic failures in our financial system.

The CDRA would:

  • Require standardized credit default swaps and other unregulated derivatives to be cleared through a clearinghouse.
  • Establish robust capital and margin requirements for derivatives dealers and other major market participants, and subject them to higher standards for products that are not traded on clearinghouses.
  • Subject firms to new conduct requirements to protect investors from abusive practices in the market.
  • Combat fraud and manipulation in derivatives markets by giving regulators new authority to set position limits and oversee the marketing of products to certain investors.
  • Rationalize the sharing of jurisdiction between the Securities and Exchange Commission and the Commodity Futures Trading Commission, and establish a process for quickly assigning responsibility for new products so that they do not fall through the cracks.

Click http://reed.senate.gov/newsroom/details.cfm?id=318087 to access the release.