The Senate on Thursday approved — 60-39 — sweeping legislation to reform the nation's financial regulation. The bill waits President Barack Obama's signature, which is expected.
The bill creates a new consumer watchdog agency within the Federal Reserve system, the Consumer Financial Protection Bureau. That agency would regulate services that record keepers, investment consultant and others provide to defined benefit and defined contribution plans — with the approval of the Department of Labor and the Department of Treasury.
Also, pension plans will face new restrictions when using swaps and other derivatives. But the plans will not be subject to capital and margin requirements — as long as they're using swaps only to hedge risks.
In addition, swap dealers would have a fiduciarylike duty to plans only when acting as an adviser. When not acting as an adviser, the swap dealer would have to comply with a series of business conduct regulations requiring disclosure of conflicts and risks.
The bill also charges the SEC and CFTC with conducting a study — within 15 months — to determine whether stable value contracts should be considered to be swaps. The contracts would not be subject to swap regulations unless the agencies say they should be.
Also under the legislation, hedge funds and private equity firms with more than $150 million in assets under management would be required to register with the SEC.