Coalition Companies Request Important Legislative Clarification on Derivatives End-User Exemptions

Corporate Treasurers and Company Representatives Meet with Legislators and Regulators During Fly-In

WASHINGTON, D.C.—On behalf of the Coalition for Derivatives End-Users, Jess Sharp, executive director of the U.S. Chamber’s Center for Capital Markets Competitiveness (CCMC), issued the following statement today during a fly-in that brought together companies from a wide range of industries to meet with key legislative and regulatory officials and reiterate companies’ concerns about the need for the right approach to reforming the derivatives market:

“End-users rely on derivatives to reduce risk and bring certainty and stability to their businesses. This puts them in a stronger position to focus on growth and investment, thereby enhancing their role in our economic recovery. These companies did not contribute to the financial crisis, and do not pose a threat to the financial system.

“As regulatory agencies work to finalize most of their derivatives rules and Congressional committees gear up to consider derivatives legislation that will be helpful to end-user companies, the broad business community is staying engaged to ensure new regulations do not undermine their ability to efficiently manage risk. Today is an opportunity for members of Congress and regulators to hear directly from the companies that will be impacted by these regulations.

“This is a critical time to reiterate our belief that robust end-user exemptions from government mandated derivatives regulations, such as margining requirements are urgently needed. Without such protections, end-users would be required to take on more risk by hedging less, or to divert limited working capital away from more productive uses such as expanding plants and equipment, reducing leverage, investing in research and development, and most importantly, creating jobs.

“We urge those implementing these changes to work together to achieve an outcome that will bring stability and transparency to the derivatives markets without unduly undermining the responsible risk management practices of companies across the country.”

Since its inception three years ago, the Center for Capital Markets Competitiveness has led a bipartisan effort to modernize and strengthen the outmoded regulatory systems that have governed our capital markets. The CCMC is committed to working aggressively with the administration, Congress, and global leaders to implement reforms to strengthen the economy, restore investor confidence, and ensure well-functioning capital markets.

The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.