House passes bill that would exempt foreign trades

AP News
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Posted: Jun 12, 2013 5:40 PM

WASHINGTON (AP) — The U.S. House passed legislation Wednesday that would exempt the trading of derivatives from federal oversight if it occurs outside the United States.

A bipartisan group of lawmakers supported the carve-out on a 301-124 vote.

Supporters say the exemption is necessary to allow U.S. firms to remain competitive in foreign markets. But opponents say the regulations outside the U.S. tend to be weaker and the exemption would put the broader financial system at risk.

Derivatives are investments whose value is based on some other investment, such as oil and currencies. The market was largely unregulated around the globe before the 2008 financial crisis and contributed to the meltdown.

The legislation's prospects in the Senate are uncertain. The White House has signaled it would veto the legislation.