The Hill News

A key goal of Congress in enacting the Dodd-Frank Act was to increase transparency into the over-the-counter (OTC) derivatives market, which many lawmakers had blamed for igniting the financial crisis and nearly bringing down the global financial system. 

It’s ironic, then, that some provisions in the law attempt to solve problems that did not exist â€" and, in doing so, have created several new problems that threaten to undermine data sharing among regulators globally and their ability to mitigate systemic risk in this market.

The first issue, indemnification, is an immediate problem. Dodd-Frank requires U.S.-based trade repositories to receive a written indemnification agreement from non-U.S. regulators before sharing critical market data with them. However, many regulators worldwide have indicated that they would be unable or unwilling to provide such an agreement because the concept of indemnification is unfamiliar to many of them and inconsisten! t with their traditions and legal structures. 

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