II 

113TH CONGRESS 

1ST SESSION S. 474 

To amend provisions in section 716 of the Dodd-Frank Wall Street Reform 

and Consumer Protection Act relating to Federal assistance for swaps entities. 

IN THE SENATE OF THE UNITED STATES 

MARCH 6, 2013 

Mrs. HAGAN (for herself, Mr. TOOMEY, Mr. WARNER, and Mr. JOHANNS) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To amend provisions in section 716 of the Dodd-Frank Wall 

Street Reform and Consumer Protection Act relating 

to Federal assistance for swaps entities. 

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 ‘‘Swaps Regulatory Im5 provement Act’’. 


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1 SEC. 2. REFORM OF PROHIBITION ON SWAP ACTIVITY AS2 SISTANCE. 

3 Section 716 of the Dodd-Frank Wall Street Reform 

4 and Consumer Protection Act (15 U.S.C. 8305) is amend5 ed— 

6 (1) in subsection (b)— 

7 (A) in paragraph (2)(B), by striking ‘‘in8 sured depository institution’’ and inserting 

9 ‘‘covered depository institution’’; and 

10 (B) by adding at the end the following: 

11 ‘‘(3) COVERED DEPOSITORY INSTITUTION.— 

12 The term ‘covered depository institution’ means— 

13 ‘‘(A) an insured depository institution, as 

14 that term is defined in section 3 of the Federal 

15 Deposit Insurance Act (12 U.S.C. 1813); and 

16 ‘‘(B) a United States uninsured branch or 

17 agency of a foreign bank.’’; 

18 (2) in subsection (c)— 

19 (A) in the heading for such subsection, by 

20 striking ‘‘INSURED’’ and inserting ‘‘COVERED’’; 

21 (B) by striking ‘‘an insured’’ and inserting 

22 ‘‘a covered’’; 

23 (C) by striking ‘‘such insured’’ and insert24 ing ‘‘such covered’’; and 

25 (D) by striking ‘‘or savings and loan hold26 ing company’’ and inserting ‘‘savings and loan 


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1 holding company, or foreign banking organiza2 tion (as such term is defined under Regulation 

3 K of the Board of Governors of the Federal Re4 serve System (12 C.F.R. 211.21(o)))’’; 

5 (3) by amending subsection (d) to read as fol6 lows: 

7 ‘‘(d) ONLY BONA FIDE HEDGING AND TRADITIONAL

8 BANK ACTIVITIES PERMITTED.— 

9 ‘‘(1) IN GENERAL.—The prohibition in sub10 section (a) shall not apply to any covered depository 

11 institution that limits its swap and security-based 

12 swap activities to the following: 

13 ‘‘(A) HEDGING AND OTHER SIMILAR RISK

14 MITIGATION ACTIVITIES.—Hedging and other 

15 similar risk mitigating activities directly related 

16 to the covered depository institution’s activities. 

17 ‘‘(B) NON-STRUCTURED FINANCE SWAP

18 ACTIVITIES.—Acting as a swaps entity for 

19 swaps or security-based swaps other than a 

20 structured finance swap. 

21 ‘‘(C) CERTAIN STRUCTURED FINANCE

22 SWAP ACTIVITIES.—Acting as a swaps entity for 

23 swaps or security-based swaps that are struc24 tured finance swaps, if— 


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1 ‘‘(i) such structured finance swaps are 

2 undertaken for hedging or risk manage3 ment purposes; or 

4 ‘‘(ii) each asset-backed security under5 lying such structured finance swaps is of a 

6 credit quality and of a type or category 

7 with respect to which the prudential regu8 lators have jointly adopted rules author9 izing swap or security-based swap activity 

10 by covered depository institutions. 

11 ‘‘(2) DEFINITIONS.—For purposes of this sub12 section: 

13 ‘‘(A) STRUCTURED FINANCE SWAP.—The 

14 term ‘structured finance swap’ means a swap or 

15 security-based swap based on an asset-backed 

16 security (or group or index primarily comprised 

17 of asset-backed securities). 

18 ‘‘(B) ASSET-BACKED SECURITY.—The 

19 term ‘asset-backed security’ has the meaning 

20 given such term under section 3(a) of the Secu21 rities Exchange Act of 1934 (15 U.S.C. 

22 78c(a)).’’; 

23 (4) in subsection (e), by striking ‘‘an insured’’ 

24 and inserting ‘‘a covered’’; and 

25 (5) in subsection (f)— 


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1 (A) by striking ‘‘an insured depository’’ 

2 and inserting ‘‘a covered depository’’; and 

3 (B) by striking ‘‘the insured depository’’ 

4 each place such term appears and inserting 

5 ‘‘the covered depository’’. 

Æ 


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