IIB 

113TH CONGRESS 

2D SESSION H. R. 5471 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 3, 2014 

Received; read twice and referred to the Committee on Banking, Housing, and 

Urban Affairs 

AN ACT 

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, 


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1 SECTION 1. TREATMENT OF AFFILIATE TRANSACTIONS. 

2 (a) IN GENERAL.— 

3 (1) COMMODITY EXCHANGE ACT AMEND4 MENT.—Section 2(h)(7)(D)(i) of the Commodity Ex5 change Act (7 U.S.C. 2(h)(7)(D)(i)) is amended to 

6 read as follows: 

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

8 person that qualifies for an exception 

9 under subparagraph (A) (including affiliate 

10 entities predominantly engaged in pro11 viding financing for the purchase of the 

12 merchandise or manufactured goods of the 

13 person) may qualify for the exception only 

14 if the affiliate enters into the swap to 

15 hedge or mitigate the commercial risk of 

16 the person or other affiliate of the person 

17 that is not a financial entity, provided that 

18 if the hedge or mitigation of such commer19 cial risk is addressed by entering into a 

20 swap with a swap dealer or major swap 

21 participant, an appropriate credit support 

22 measure or other mechanism must be uti23 lized.’’. 

24 (2) SECURITIES EXCHANGE ACT OF 1934

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


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

2 is amended to read as follows: 

3 ‘‘(A) IN GENERAL.—An affiliate of a per4 son that qualifies for an exception under para5 graph (1) (including affiliate entities predomi6 nantly engaged in providing financing for the 

7 purchase of the merchandise or manufactured 

8 goods of the person) may qualify for the excep9 tion only if the affiliate enters into the security10 based swap to hedge or mitigate the commercial 

11 risk of the person or other affiliate of the per12 son that is not a financial entity, provided that 

13 if the hedge or mitigation such commercial risk 

14 is addressed by entering into a security-based 

15 swap with a security-based swap dealer or 

16 major security-based swap participant, an ap17 propriate credit support measure or other 

18 mechanism must be utilized.’’. 

19 (b) APPLICABILITY OF CREDIT SUPPORT MEASURE

20 REQUIREMENT.—The requirements in section 

21 2(h)(7)(D)(i) of the Commodity Exchange Act and section 

22 3C(g)(4)(A) of the Securities Exchange Act of 1934, as 

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

24 measure or other mechanism be utilized if the transfer of 

25 commercial risk referred to in such sections is addressed 


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

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

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

4 appropriate, shall not apply with respect to swaps or secu5 rity-based swaps, as appropriate, entered into before the 

6 date of the enactment of this Act. 

Passed the House of Representatives December 2, 

2014. 

Attest: KAREN L. HAAS, 

Clerk. 


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