WASHINGTON Dec 10 The U.S. House of
Representatives on Thursday amended a sweeping financial reform
bill to limit financial firms to 20 percent ownership stakes in
clearinghouses for over-the-counter derivatives.
The amendment is designed to avoid possible conflicts of
interest at financial firms that also trade derivatives, but
has been criticized by NYSE Euronext NYX.N, LCH.Clearnet,
BATS Global Markets and other firms partnered with banks.
They have said "overly restrictive" ownership limits would
hurt development of derivatives clearinghouses.
"My amendment would prevent those big banks and firms like
AIG from taking over the police station," Democratic
Representative Stephen Lynch, who put forward the amendment,
said during floor debate.
The overall reform bill, still pending a final House vote,
calls for sending more OTC derivatives trades through
clearinghouses to increase transparency and accountability.
NYSE Euronext, which runs the New York Stock Exchange,
recently sold a big stake in its U.S. derivatives venue to five
banks including Goldman Sachs (GS.N) and Morgan Stanley (MS.N).
LCH.Clearnet, Europe's top independent clearinghouse, is
majority owned by its users.
Exchange firm Nasdaq OMX (NDAQ.O) supported the Lynch
Democratic Representative Mike McMahon said during debate
that the proponents of this amendment are using the legislative
process to promote one business model over another.
A handful of Wall Street giants dominate OTC derivatives
dealing -- Goldman Sachs, JPMorgan Chase (JPM.N), Citigroup
(C.N), Bank of America (BAC.N) and Morgan Stanley.
> US House closer to financial rules overhaul..
(Reporting by Kevin Drawbaugh and Rachelle Younglai; Editing
by Neil Fullick)