IB 

Union Calendar No. 629 

115TH CONGRESS 

2D SESSION H. R. 5749 

[Report No. 115–810] 

To require the appropriate Federal banking agencies to increase the risksensitivity of the capital treatment of certain centrally cleared options, 

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 10, 2018 

Mr. HULTGREN introduced the following bill; which was referred to the 

Committee on Financial Services 

JULY 10, 2018 

Additional sponsor: Mr. FOSTER

JULY 10, 2018 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on May 10, 2018] 


lotter on DSKBCFDHB2PROD with BILLS
2 

•HR 5749 RH

A BILL 

To require the appropriate Federal banking agencies to increase the risk-sensitivity of the capital treatment of 

certain centrally cleared options, and for other purposes. 


lotter on DSKBCFDHB2PROD with BILLS
3 

•HR 5749 RH

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Options Markets Sta5 bility Act’’. 

6 SECTION 2. RULEMAKING. 

7 Within 180 days of the date of enactment of this Act, 

8 the Board of Governors of the Federal Reserve System, the 

9 Federal Deposit Insurance Corporation, and the Comp10 troller of the Currency shall, jointly, issue a proposed rule, 

11 and finalize such rule within 360 days of the date of enact12 ment of this Act, to adopt a methodology for calculating 

13 the counterparty credit risk exposure, at default, of a depos14 itory institution, depository institution holding company, 

15 or affiliate thereof to a client arising from a guarantee pro16 vided by the depository institution, depository institution 

17 holding company, or affiliate thereof to a central 

18 counterparty in respect of the client’s performance under 

19 a derivative contract cleared through that central 

20 counterparty pursuant to the risk-based and leverage-based 

21 capital rules applicable to depository institutions and de22 pository institution holding companies under parts 3, 217, 

23 and 324 of title 12, Code of Federal Regulations. In issuing 

24 such rule, the Board of Governors of the Federal Reserve 


lotter on DSKBCFDHB2PROD with BILLS
4 

•HR 5749 RH

1 System, the Federal Deposit Insurance Corporation, and 

2 the Comptroller of the Currency shall consider— 

3 (1) the availability of liquidity provided by mar4 ket makers during times of high volatility in the cap5 ital markets; 

6 (2) the spread between the bid and the quote of7 fered by market makers; 

8 (3) the preference for clearing through central 

9 counterparties; 

10 (4) the safety and soundness of the financial sys11 tem and financial stability, including the benefits of 

12 central clearing; 

13 (5) the safety and soundness of individual insti14 tutions that may centrally clear derivatives or options 

15 on behalf of a client, including concentration of mar16 ket share; 

17 (6) the economic value of delta weighting a 

18 counterparty’s position and netting of a counter19 party’s position; 

20 (7) the inherent risk of the positions; 

21 (8) barriers to entry for depository institutions, 

22 depository institution holding companies, affiliates 

23 thereof, and entities not affiliated with a depository 

24 institution or depository institution holding company 


lotter on DSKBCFDHB2PROD with BILLS
5 

•HR 5749 RH

1 to centrally clear derivatives or options on behalf of 

2 market makers; 

3 (9) the impact any changes may have on the 

4 broader capital regime and aggregate capital in the 

5 system; and 

6 (10) consideration of other potential factors that 

7 impact market making in the options market, includ8 ing changes in market structure. 

9 SEC. 3. REPORT TO CONGRESS. 

10 At the end of the 5-year period beginning on the date 

11 the final rule is issued under section 1, the Board of Gov12 ernors of the Federal Reserve System shall submit to the 

13 Committee on Financial Services of the House of Represent14 atives and the Committee on Banking, Housing, and Urban 

15 Affairs of the Senate a report detailing the impact of the 

16 final rule during such period on the factors described under 

17 paragraphs (1) through (10) of section 2. 


lotter on DSKBCFDHB2PROD with BILLS
Union Calendar No. 629 

115TH CONGRESS 

2D SESSION H. R. 5749 

[Report No. 115–810] 

A BILL 

To require the appropriate Federal banking agenand for other purposes. treatment of certain centrally cleared options, cies to increase the risk-sensitivity of the capital 

JULY 10, 2018 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union, 


lotter on DSKBCFDHB2PROD with BILLS