Washington – The Coalition for Derivatives End-Users today sent a letter signed by more than 170 organizations to every member of Congress urging them to preserve the ability of companies to manage their individual risk exposures by ensuring access to reasonably priced and customized over-the-counter (OTC) derivative products.

The Coalition supports current efforts to improve transparency, accountability and stability in the derivatives market. However, it is concerned that some reform proposals would significantly increase costs for companies seeking to hedge risks through OTC products and limit, or eliminate altogether, needed customized products used for risk management.

“OTC derivatives provide U.S. businesses access to lower cost capital. Suggested reforms that would force substantially all derivatives into clearinghouses or onto exchanges or that would subject end-users to capital charges are counterintuitive to our shared goal of economic recovery and growth,” said John J. Castellani, President of Business Roundtable.

“Ensuring there is greater clearing of derivatives will provide needed transparency and accountability to our capital markets; however, it is critical that we do not strip end-users of their ability to use customized OTC products – only 10-15% of the overall market – to manage risk.” said David Hirschmann, President and CEO of the U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness.

“Manufacturers in a wide range of industries use customized OTC derivatives to manage the risks of operating their businesses, including fluctuating currency exchange, interest rates and commodity prices. It is critical that policy makers ensure companies' continued access to OTC derivatives, providing them with greater financial certainty and allowing them to allocate resources to core business activities,” said John Engler, President of the National Association of Manufacturers.

In the letter, the Coalition urges Congress to consider the positive role OTC derivatives play in risk management, access to capital, and economic recovery. “In order to promote U.S. competitiveness and economic growth, policymakers must ensure that any financial services reform effort allows U.S. business to manage the risks inherent to their businesses.”