I 

115TH CONGRESS 

2D SESSION H. R. 5749 

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 

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. 

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 SEC. 2. CREDIT EXPOSURE FOR GUARANTEES OF CEN7 TRALLY CLEARED OPTIONS. 

8 (a) DEFINITIONS.—In this section, the terms ‘‘affil9 iate’’, ‘‘appropriate Federal banking agency’’, ‘‘depository 


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1 institution’’, and ‘‘depository institution holding company’’ 

2 have the meanings given those terms, respectively, in sec3 tion 3 of the Federal Deposit Insurance Act (12 U.S.C. 

4 1813). 

5 (b) TREATMENT OF CERTAIN CENTRALLY CLEARED

6 OPTION DERIVATIVES EXPOSURES.—For purposes of cal7 culating the counterparty credit risk exposure of a deposi8 tory institution, depository institution holding company, or 

9 affiliate thereof, to a client arising from a guarantee pro10 vided by the depository institution, depository institution 

11 holding company, or affiliate thereof to a central 

12 counterparty in respect of the client’s performance under 

13 a derivative contract cleared through that central 

14 counterparty pursuant to the risk-based and leverage15 based capital rules applicable to depository institutions 

16 and depository institution holding companies under parts 

17 3, 217, and 324 of title 12, Code of Federal Regulations, 

18 the term ‘‘effective notional principal amount’’ with re19 spect to such centrally cleared derivative contract means 

20 the hypothetical on-balance sheet position in the under21 lying asset that would evidence the same change in fair 

22 value (measured in dollars) given a small change in the 

23 price of the underlying asset. 

24 (c) CALCULATION OF EXPOSURE FOR CENTRALLY

25 CLEARED DERIVATIVES.—For purposes of calculating the 


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1 counterparty credit risk exposure of a depository institu2 tion, depository institution holding company, or affiliate 

3 thereof to a client arising from a guarantee provided by 

4 the depository institution, depository institution holding 

5 company, or affiliate thereof to a central counterparty in 

6 respect of the client’s performance under a derivative con7 tract cleared through that central counterparty pursuant 

8 to the risk-based and leverage-based capital rules applica9 ble to depository institutions and depository institution 

10 holding companies under parts 3, 217 and 324 of title 12, 

11 Code of Federal Regulations, the offsetting nature of sig12 nificantly and reliably correlated positions within a netting 

13 set must be reflected in a manner consistent with the risk 

14 offsets provided by the central counterparty. 

Æ 


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