Factbox: Reform bill gives new roles to some regulators

(BestGrowthStock) – The Senate on Thursday gave final approval to a sweeping bill to revamp U.S. financial regulation, sending it to President Barack Obama to sign into law.

The bill is the most significant piece of legislation on financial regulation since the 1929 market crash created the Securities and Exchange Commission and ushered in rules for markets and companies.

Under the Dodd-Frank bill, every financial regulator will be reshaped and get more authority to oversee Wall Street.

Below are the key regulators and their new roles.

SECURITIES AND EXCHANGE COMMISSION

* Will supervise advisers to hedge funds and private equity funds

* Will jointly supervise the $615 trillion over-the-counter derivatives market with the CFTC

* Required to adopt a number of new rules to improve shareholder rights, including giving shareholders a nonbinding vote on executive pay at least once every three years

* Gets authority to restrict mandatory arbitration

* Will get additional authority to pursue and fine those that aid and abet in securities fraud

* Required to conduct a number of studies, including one on whether brokers should have fiduciary duties or be required to put their clients’ interest first

* Will have a role on the Financial Stability Oversight Council to monitor risk in the financial system.

* Gets access to more of the fees it collects from the financial entities it supervises

COMMODITY FUTURES TRADING COMMISSION

* Takes the lead role on writing new rules to flesh out oversight of over-the-counter derivatives

* Sets minimum capital and margin requirements for swaps dealers and major swap participants

* Determines what types of swaps are required to move through clearinghouses and what players are granted exemptions from the rules.

* Oversees new data repositories for the $615 trillion market and new swap execution facilities — a new class of trading platform for the OTC market.

* Has the ability to set limits on control of clearinghouses, SEFs and exchanges by large banks, financial companies, swap dealers and major swaps participants.

* Gets authority to set position limits for physical commodities.

* New whistle-blower protection powers.

* Will have a role on the Financial Stability Oversight Council to monitor risk in the financial system.

FEDERAL RESERVE

* Gains oversight over large nonbank financial firms deemed systemically important

* May set more stringent regulatory standards for systemically important firms than for banks

* With approval from the new Stability Oversight Council, of which it will be a member, may require systemically important firms to sell assets or stop some activities

* May require each systemically important firm to have plans for its own orderly resolution in the event of failure

* Conducts annual stress tests for systemically important firms

* Must allow a congressional audit of emergency lending facilities

* Creates a new position on the Board of Governors for a vice chairman for supervision

* Will be subject to a congressional audit of the regional Federal Reserve banks

FEDERAL DEPOSIT INSURANCE CORP

* Gains the power to unwind insolvent financial firms and must help establish orderly liquidation rules

* Will have power to carry out post-funding assessments on financial firms in the wake of a liquidation

* Must establish, along with other federal banking regulators, minimum leverage and risk-based capital requirements

* Will change the fees it charges banks for the deposit insurance fund, shifting the basis of the fees to the amount of a bank’s assets instead of deposits

* Will have a role on the Financial Stability Oversight Council to monitor risk in the financial system.

CONSUMER FINANCIAL PROTECTION BUREAU

* Will have power to write rules for a wide range of consumer products, including mortgages and credit cards

* Will have authority to examine and enforce consumer rules for banks and credit unions with assets over $10 billion and all mortgage-related businesses

* Will have backup authority to enforce rules for community banks and credit unions with less than $10 billion in assets

* Consolidates consumer protection responsibilities from federal banking and housing regulators

* Creates a hotline for consumers to report problems with financial products and services

* Auto dealers will be exempt from the consumer regulator’s oversight

* Will have a role on the Financial Stability Oversight Council to monitor risk in the financial system.

(Reporting by Roberta Rampton, Rachelle Younglai, Mark Felsenthal and Karey Wutkowski)

Factbox: Reform bill gives new roles to some regulators