On May 5, 2010, Davis Polk partner Daniel Budofsky testified on behalf of the Securities Industry and Financial Markets Association (SIFMA) at a Pennsylvania Senate Finance Committee hearing to address proposed derivatives regulation. Specifically under discussion at the hearing were Senate Bills 1277 and 1278, which would repeal the authority granted to local governmental units to enter into derivatives known as “qualified interest rate management agreements." Together, the bills address three of the recommendations put forth in a report by the Pennsylvania Auditor General by banning the use of swaps by all local government units, requiring local governmental units to use a competitive selection process for the hiring of financial advisers and requiring a quarterly evaluation of financial advisers. Budofsky was invited to testify before the Committee as a resource on the derivatives markets and proposed legislative and regulatory reforms, as the Committee considers the measures.

Click here to read a transcript of Budofsky's testimony.

Click here to watch the hearing in its entirety.