II 

114TH CONGRESS 

1ST SESSION S. 876 

To amend the Commodity Exchange Act to specify how clearing requirements 

apply to certain affiliate transactions. 

IN THE SENATE OF THE UNITED STATES 

MARCH 26, 2015 

Mr. ROBERTS introduced the following bill; which was read twice and referred 

to the Committee on Agriculture, Nutrition, and Forestry 

A BILL 

To amend the Commodity Exchange Act to specify how 

clearing requirements apply to certain affiliate transactions. 

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) of the Commodity Ex7 change Act (7 U.S.C. 2(h)(7)(D)) is amended by 

8 striking clause (i) and inserting the following: 

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

10 person that qualifies for an exception 


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•S 876 IS

1 under subparagraph (A) (including affiliate 

2 entities predominantly engaged in pro3 viding financing for the purchase of the 

4 merchandise or manufactured goods of the 

5 person) may qualify for the exception only 

6 if the affiliate enters into the swap to 

7 hedge or mitigate the commercial risk of 

8 the person or other affiliate of the person 

9 that is not a financial entity, provided that 

10 if the hedge or mitigation of the commer11 cial risk is addressed by entering into a 

12 swap with a swap dealer or major swap 

13 participant, an appropriate credit support 

14 measure or other mechanism must be 

15 used.’’. 

16 (2) CONFORMING AMENDMENT.—Section 

17 3C(g)(4) of the Securities Exchange Act of 1934 (15 

18 U.S.C. 78c–3(g)(4)) is amended by striking subpara19 graph (A) and inserting the following: 

20 ‘‘(A) IN GENERAL.—An affiliate of a per21 son that qualifies for an exception under para22 graph (1) (including affiliate entities predomi23 nantly engaged in providing financing for the 

24 purchase of the merchandise or manufactured 

25 goods of the person) may qualify for the excepVerDate Sep 11 2014 23:11 Apr 03, 2015 Jkt 049200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S876.IS S876

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•S 876 IS

1 tion only if the affiliate enters into the security2 based swap to hedge or mitigate the commercial 

3 risk of the person or other affiliate of the per4 son that is not a financial entity, provided that 

5 if the hedge or mitigation of the commercial 

6 risk is addressed by entering into a security7 based swap with a security-based swap dealer 

8 or major security-based swap participant, an 

9 appropriate credit support measure or other 

10 mechanism must be used.’’. 

11 (b) APPLICABILITY OF CREDIT SUPPORT MEASURE

12 REQUIREMENT.—The requirements in section 

13 2(h)(7)(D)(i) of the Commodity Exchange Act and section 

14 3C(g)(4)(A) of the Securities Exchange Act of 1934, as 

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

16 measure or other mechanism be used if the transfer of 

17 commercial risk referred to in those sections is addressed 

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

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

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

21 appropriate, shall not apply with respect to swaps or secu22 rity-based swaps, as appropriate, entered into before the 

23 date of enactment of this Act. 

Æ 


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