IB 

Union Calendar No. 268 

112TH CONGRESS 

2D SESSION H. R. 2779 

[Report No. 112–344, Parts I and II] 

To exempt inter-affiliate swaps from certain regulatory requirements put 

in place by the Dodd-Frank Wall Street Reform and Consumer Protection Act. 

IN THE HOUSE OF REPRESENTATIVES 

AUGUST 1, 2011 

Mr. STIVERS (for himself 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 

DECEMBER 23, 2011 

Reported from the Committee on Financial Services with an amendment 

[Strike out all after the enacting clause and insert the part printed in italic] 

DECEMBER 23, 2011 

Referral to the Committee on Agriculture extended for a period not ending 

later than February 1, 2012 

FEBRUARY 1, 2012 

Referral to the Committee on Agriculture extended for a period not ending 

later than February 8, 2012 


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FEBRUARY 8, 2012 

Additional sponsors: Ms. MOORE, Mr. DOLD, and Mr. GIBSON

FEBRUARY 8, 2012 

Reported from the Committee on Agriculture with an amendment; committed 

to the Committee of the Whole House on the State of the Union and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in boldface roman] 

A BILL 

To exempt inter-affiliate swaps from certain regulatory requirements put in place by the Dodd-Frank Wall Street 

Reform and Consumer Protection Act. 


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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) COMMODITY EXCHANGE ACT AMENDMENTS.— 

5 Section 1a(47) of the Commodity Exchange Act (7 U.S.C. 

6 1(a)(47)), as added by section 721(a)(21) of the Dodd7 Frank Wall Street Reform and Consumer Protection Act, 

8 is amended by adding at the end the following: 

9 ‘‘(G) TREATMENT OF AFFILIATE TRANS10 ACTIONS.— 

11 ‘‘(i) IN GENERAL.—The term ‘swap’ 

12 does not include any agreement, contract, 

13 or transaction that— 

14 ‘‘(I) would otherwise be included 

15 as a ‘swap’ under subparagraph (A); 

16 and 

17 ‘‘(II) is entered into by a party 

18 that is controlling, controlled by, or 

19 under common control with its 

20 counterparty. 

21 ‘‘(ii) REPORTING.—All agreements, 

22 contracts, or transactions described in 

23 clause (i) shall be reported to either a 

24 swap data repository, or, if there is no 

25 swap data repository that would accept 


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1 such swaps, to the Commission pursuant 

2 to section 4r within such time period as 

3 the Commission may by rule or regulation 

4 prescribe.’’. 

5 (b) SECURITIES EXCHANGE ACT OF 1934 AMEND6 MENTS.—Section 3(a)(68) of the Securities Exchange Act 

7 of 1934 (15 U.S.C. 78c(3)(a)(68)), as added by section 

8 761(a)(6) of the Dodd-Frank Wall Street Reform and 

9 Consumer Protection Act, is amended by adding at the 

10 end the following: 

11 ‘‘(F) TREATMENT OF AFFILIATE TRANS12 ACTIONS.— 

13 ‘‘(i) IN GENERAL.—The term ‘secu14 rity-based swap’ does not include any 

15 agreement, contract, or transaction that— 

16 ‘‘(I) would otherwise be included 

17 as a ‘security-based swap’ under sub18 paragraph (A); and 

19 ‘‘(II) is entered into by a party 

20 that is controlling, controlled by, or 

21 under common control with its 

22 counterparty. 

23 ‘‘(ii) REPORTING.—All agreements, 

24 contracts, or transactions described in 

25 clause (i) shall be reported to either a seVerDate Mar 15 2010 00:39 Feb 09, 2012 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6401 E:\BILLS\H2779.RH H2779

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1 curity-based swap data repository, or, if 

2 there is no security-based swap data repos3 itory that would accept such security-based 

4 swaps, to the Commission pursuant to sec5 tion 13A within such time period as the 

6 Commission may by rule or regulation pre7 scribe.’’. 

8 SECTION 1. TREATMENT OF AFFILIATE TRANSACTIONS. 

9 (a) COMMODITY EXCHANGE ACT AMENDMENTS.—Sec10 tion 1a(47) of the Commodity Exchange Act (7 U.S.C. 

11 1(a)(47)), as added by section 721(a)(21) of the Dodd12 Frank Wall Street Reform and Consumer Protection Act, 

13 is amended by adding at the end the following: 

14 ‘‘(G) TREATMENT OF AFFILIATE TRANS15 ACTIONS.— 

16 ‘‘(i) IN GENERAL.—The term ‘swap’ 

17 does not include any agreement, contract, or 

18 transaction that— 

19 ‘‘(I) would otherwise be included 

20 as a ‘swap’ under subparagraph (A); 

21 and 

22 ‘‘(II) is entered into by a party 

23 that is controlling, controlled by, or 

24 under common control with its 

25 counterparty. 


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1 ‘‘(ii) REPORTING.—All agreements, 

2 contracts, or transactions described in 

3 clause (i) shall be reported to either a swap 

4 data repository, or, if there is no swap data 

5 repository that would accept such swaps, to 

6 the Commission pursuant to section 4r 

7 within such time period as the Commission 

8 may by rule or regulation prescribe.’’. 

9 (b) SECURITIES EXCHANGE ACT OF 1934 AMEND10 MENTS.—Section 3(a)(68) of the Securities Exchange Act 

11 of 1934 (15 U.S.C. 78c(3)(a)(68)), as added by section 

12 761(a)(6) of the Dodd-Frank Wall Street Reform and Con13 sumer Protection Act, is amended by adding at the end the 

14 following: 

15 ‘‘(F) TREATMENT OF AFFILIATE TRANS16 ACTIONS.— 

17 ‘‘(i) IN GENERAL.—For the purposes of 

18 any clearing and execution requirements 

19 under sections 3C and any applicable mar20 gin and capital requirements of section 

21 15F(e), and for purposes of defining a secu22 rity-based swap dealer or a major security23 based swap participant, and reporting re24 quirements other than those set forth in 

25 clause (ii), the term ‘security-based swap’ 


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1 does not include any agreement, contract, or 

2 transaction that— 

3 ‘‘(I) would otherwise be included 

4 as a ‘security-based swap’ under sub5 paragraph (A); and 

6 ‘‘(II) is entered into by parties 

7 that report information or prepare fi8 nancial statements on a consolidated 

9 basis, or for which an affiliated com10 pany reports information or prepares 

11 financial statements on a consolidated 

12 basis for both parties. 

13 ‘‘(ii) REPORTING.—All agreements, 

14 contracts, or transactions described in 

15 clause (i) shall be reported to either a secu16 rity-based swap data repository, or, if there 

17 is no security-based swap data repository 

18 that would accept such security-based 

19 swaps, to the Commission pursuant to sec20 tion 13A within such time period as the 

21 Commission may by rule or regulation pre22 scribe. 

23 ‘‘(iii) PRESERVATION OF FEDERAL RE24 SERVE ACT AUTHORITY.—Nothing in this 

25 subparagraph shall exempt a transaction 


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1 described in this subparagraph from sec2 tions 23A or 23B of the Federal Reserve Act 

3 or implementing regulations thereunder. 

4 ‘‘(iv) PROTECTION OF INSURANCE

5 FUNDS.—Nothing in this subparagraph 

6 shall be construed to prevent the regulator of 

7 a Federal or State insurance fund or guar8 anty fund from exercising its other existing 

9 authority to protect the integrity of such a 

10 fund, except that such regulator shall not 

11 subject security-based swap transactions be12 tween affiliated companies to clearing and 

13 execution requirements under section 3C, to 

14 any applicable margin and capital require15 ments of section 15F(e), or to reporting re16 quirements other than those set forth in 

17 clause (ii). 

18 ‘‘(v) PREVENTION OF EVASION.—The 

19 Commission may prescribe rules under this 

20 subparagraph (and issue interpretations of 

21 rules prescribed under this subparagraph) 

22 as determined by the Commission to be nec23 essary to include in the definition of secu24 rity-based swap under this paragraph any 

25 agreement, contract, or transaction that has 


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1 been structured as an affiliate transaction 

2 to evade the requirements of this Act appli3 cable to security-based swaps.’’. 

4 SECTION 1. TREATMENT OF AFFILIATE TRANSACTIONS. 

5 (a) COMMODITY EXCHANGE ACT AMEND6 MENTS.—Section 1a(47) of the Commodity Ex7 change Act (7 U.S.C. 1a(47)), as added by sec8 tion 721(a)(21) of the Dodd-Frank Wall Street 

9 Reform and Consumer Protection Act, is 

10 amended by adding at the end the following: 

11 ‘‘(G) TREATMENT OF AFFILIATE

12 TRANSACTIONS.— 

13 ‘‘(i) IN GENERAL.—For the pur14 poses of any clearing and execu15 tion requirements under section 

16 2(h) and any applicable margin 

17 and capital requirements of sec18 tion 4s(e) and for purposes of de19 fining a swap dealer or a major 

20 swap participant, and reporting 

21 requirements other than those set 

22 forth in clause (ii), the term 

23 ‘swap’ does not include any agree24 ment, contract, or transaction 

25 that— 


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1 ‘‘(I) would otherwise be in2 cluded as a ‘swap’ under sub3 paragraph (A); and 

4 ‘‘(II) is entered into by 

5 parties that report informa6 tion or prepare financial 

7 statements on a consolidated 

8 basis, or for which an affili9 ated company reports infor10 mation or prepares financial 

11 statements on a consolidated 

12 basis. 

13 ‘‘(ii) REPORTING.—All agree14 ments, contracts, or transactions 

15 described in clause (i) shall be re16 ported to either a swap data re17 pository, or, if there is no swap 

18 data repository that would accept 

19 such agreements, contracts or 

20 transactions, to the Commission 

21 pursuant to section 4r, or to a 

22 swap data repository or to the 

23 Commission pursuant to section 

24 2(h)(5) within such time period as 

25 the Commission may by rule or 


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1 regulation prescribe. Nothing in 

2 this subparagraph shall prohibit 

3 a swap data repository from pub4 lically reporting the information 

5 submitted pursuant to this clause. 

6 ‘‘(iii) PROTECTION OF INSUR7 ANCE FUNDS.—Nothing in this sub8 paragraph shall be construed to 

9 prevent the regulator of a Federal 

10 or State insurance fund or guar11 anty fund from exercising its 

12 other existing authority to pro13 tect the integrity of such a fund, 

14 except that such regulator shall 

15 not subject agreements, contracts, 

16 or transactions between affiliated 

17 companies to clearing and execu18 tion requirements under section 

19 2, to any applicable margin and 

20 capital requirements of section 

21 4s(e), or to reporting require22 ments of the Wall Street Trans23 parency and Accountability Act of 

24 2010 other than those set forth in 

25 clause (ii). 


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1 ‘‘(iv) PRESERVATION OF FED2 ERAL BANKING AGENCIES’ AUTHOR3 ITY.—Nothing in this section shall 

4 affect the Federal banking agen5 cies’ safety-and-soundness au6 thorities established in law other 

7 than title VII of P.L. 111-203, in8 cluding with respect to the au9 thority of the agencies to impose 

10 capital requirements on a bank 

11 with regard to swaps. For pur12 poses of this clause, the term 

13 ‘bank’ shall be defined pursuant 

14 to section 3(6) of the Securities 

15 Exchange Act of 1934, and the 

16 term ‘swap’ shall be defined pur17 suant to title VII of P.L. 111-203.’’. 

18 (b) SECURITIES EXCHANGE ACT OF 1934 

19 AMENDMENTS.—Section 3(a)(68) of the Securi20 ties Exchange Act of 1934 (15 U.S.C. 

21 78c(a)(68)), as added by section 761(a)(6) of 

22 the Dodd-Frank Wall Street Reform and Con23 sumer Protection Act, is amended by adding 

24 at the end the following: 


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1 ‘‘(F) TREATMENT OF AFFILIATE

2 TRANSACTIONS.— 

3 ‘‘(i) IN GENERAL.—The term ‘se4 curity-based swap’ does not in5 clude any agreement, contract, or 

6 transaction that— 

7 ‘‘(I) would otherwise be in8 cluded as a ‘security-based 

9 swap’ under subparagraph 

10 (A); and 

11 ‘‘(II) is entered into by a 

12 party that is controlling, con13 trolled by, or under common 

14 control with its counterparty. 

15 ‘‘(ii) REPORTING.—All agree16 ments, contracts, or transactions 

17 described in clause (i) shall be re18 ported to either a security-based 

19 swap data repository, or, if there 

20 is no security-based swap data re21 pository that would accept such 

22 security-based swaps, to the Com23 mission pursuant to section 13A 

24 within such time period as the 


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1 Commission may by rule or regu2 lation prescribe.’’. 

3 SEC. 2. IMPLEMENTATION. 

4 The amendments made by this Act shall 

5 be implemented— 

6 (1) without regard to— 

7 (A) chapter 35 of title 44, United 

8 States Code; and 

9 (B) the notice and comment provi10 sions of section 553 of title 5, United 

11 States Code; and 

12 (2) through the promulgation of an 

13 interim final rule. 


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Union Calendar No. 268 

112TH CONGRESS 

2D SESSION H. R. 2779 

[Report No. 112–344, Parts I and II] 

A BILL 

To exempt inter-affiliate swaps from certain regution Act. Frank Wall Street Reform and Consumer Protec- latory requirements put in place by the DoddFEBRUARY 8, 2012 

Reported from the Committee on Agriculture with an 

printed House on the State of the Union and ordered to be amendment; committed to the Committee of the Whole 


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