I 

113TH CONGRESS 

2D SESSION H. R. 5471 

To amend the Commodity Exchange Act and the Securities Exchange Act 

of 1934 to specify how clearing requirements apply to certain affiliate 

transactions, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 15, 2014 

Ms. MOORE (for herself, Mr. STIVERS, Mr. GIBSON, and Ms. FUDGE) introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committee on Agriculture, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Commodity Exchange Act and the Securities 

Exchange Act of 1934 to specify how clearing requirements apply to certain affiliate transactions, 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. TREATMENT OF AFFILIATE TRANSACTIONS. 

4 (a) IN GENERAL.— 

5 (1) COMMODITY EXCHANGE ACT AMEND6 MENT.—Section 2(h)(7)(D)(i) of the Commodity ExVerDate Sep 11 2014 03:35 Sep 17, 2014 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H5471.IH H5471

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1 change Act (7 U.S.C. 2(h)(7)(D)(i)) is amended to 

2 read as follows: 

3 ‘‘(i) IN GENERAL.—An affiliate of a 

4 person that qualifies for an exception 

5 under subparagraph (A) (including affiliate 

6 entities predominantly engaged in pro7 viding financing for the purchase of the 

8 merchandise or manufactured goods of the 

9 person) may qualify for the exception only 

10 if the affiliate enters into the swap to 

11 hedge or mitigate the commercial risk of 

12 the person or other affiliate of the person 

13 that is not a financial entity, provided that 

14 if the hedge or mitigation of such commer15 cial risk is addressed by entering into a 

16 swap with a swap dealer or major swap 

17 participant, an appropriate credit support 

18 measure or other mechanism must be uti19 lized.’’. 

20 (2) SECURITIES EXCHANGE ACT OF 1934

21 AMENDMENT.—Section 3C(g)(4)(A) of the Securities 

22 Exchange Act of 1934 (15 U.S.C. 78c–3(g)(4)(A)) 

23 is amended to read as follows: 

24 ‘‘(A) IN GENERAL.—An affiliate of a per25 son that qualifies for an exception under paraVerDate Sep 11 2014 03:35 Sep 17, 2014 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5471.IH H5471

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1 graph (1) (including affiliate entities predomi2 nantly engaged in providing financing for the 

3 purchase of the merchandise or manufactured 

4 goods of the person) may qualify for the excep5 tion only if the affiliate enters into the security6 based swap to hedge or mitigate the commercial 

7 risk of the person or other affiliate of the per8 son that is not a financial entity, provided that 

9 if the hedge or mitigation such commercial risk 

10 is addressed by entering into a security-based 

11 swap with a security-based swap dealer or 

12 major security-based swap participant, an ap13 propriate credit support measure or other 

14 mechanism must be utilized.’’. 

15 (b) APPLICABILITY OF CREDIT SUPPORT MEASURE

16 REQUIREMENT.—The requirements in section 

17 2(h)(7)(D)(i) of the Commodity Exchange Act and section 

18 3C(g)(4)(A) of the Securities Exchange Act of 1934, as 

19 amended by subsection (a), requiring that a credit support 

20 measure or other mechanism be utilized if the transfer of 

21 commercial risk referred to in such sections is addressed 

22 by entering into a swap with a swap dealer or major swap 

23 participant or a security-based swap with a security-based 

24 swap dealer or major security-based swap participant, as 

25 appropriate, shall not apply with respect to swaps or secuVerDate Sep 11 2014 03:35 Sep 17, 2014 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5471.IH H5471

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1 rity-based swaps, as appropriate, entered into before the 

2 date of the enactment of this Act. 

Æ 


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