112TH CONGRESS 

2D SESSION H. R. 2779 

AN ACT 

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

Reform and Consumer Protection Act. 

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) COMMODITY EXCHANGE ACT AMENDMENTS.— 

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

4 1a(47)), as added by section 721(a)(21) of the Dodd5 Frank Wall Street Reform and Consumer Protection Act, 

6 is amended by adding at the end the following: 

7 ‘‘(G) TREATMENT OF AFFILIATE TRANS8 ACTIONS.— 

9 ‘‘(i) IN GENERAL.—For the purposes 

10 of any clearing and execution requirements 

11 under section 2(h) and any applicable mar12 gin and capital requirements of section 

13 4s(e) and for purposes of defining ‘swap 

14 dealer’ or ‘major swap participant’, and re15 porting requirements other than those set 

16 forth in clause (ii), the term ‘swap’ does 

17 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 parties 

23 that report information or prepare fi24 nancial statements on a consolidated 

25 basis, or for which a company affili26 ated with both parties reports infor-
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1 mation or prepares financial state2 ments on a consolidated basis. 

3 ‘‘(ii) REPORTING.—All agreements, 

4 contracts, or transactions described in 

5 clause (i) shall be reported to either a 

6 swap data repository, or, if there is no 

7 swap data repository that would accept 

8 such agreements, contracts, or trans9 actions, to the Commission pursuant to 

10 section 4r, or to a swap data repository or 

11 to the Commission pursuant to section 

12 2(h)(5), within such time period as the 

13 Commission may by rule or regulation pre14 scribe. Nothing in this subparagraph shall 

15 prohibit the Commission from establishing 

16 public reporting requirements for covered 

17 transactions between affiliates as described 

18 in sections 23A and 23B of the Federal 

19 Reserve Act in a manner consistent with 

20 rules governing the treatment of such cov21 ered transactions pursuant to section 

22 2(a)(13) of this Act. 

23 ‘‘(iii) PROTECTION OF INSURANCE

24 FUNDS.—Nothing in this subparagraph 

25 shall be construed to prevent the regulator 
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1 of a Federal or State insurance fund or 

2 guaranty fund from exercising its other ex3 isting authority to protect the integrity of 

4 such a fund, except that such regulator 

5 shall not subject agreements, contracts, or 

6 transactions described in clause (i) to 

7 clearing and execution requirements under 

8 section 2 of this Act, to any applicable 

9 margin and capital requirements of section 

10 4s(e) of this Act, or to reporting require11 ments of title VII of Public Law 111–203 

12 other than those set forth in clause (ii) of 

13 this subparagraph. 

14 ‘‘(iv) PRESERVATION OF FEDERAL RE15 SERVE ACT AUTHORITY.—Nothing in this 

16 subparagraph shall exempt a transaction 

17 described in this subparagraph from sec18 tions 23A or 23B of the Federal Reserve 

19 Act or implementing regulations there20 under. 

21 ‘‘(v) PRESERVATION OF FEDERAL

22 AND STATE REGULATORY AUTHORITIES.— 

23 Nothing in this subparagraph shall affect 

24 the Federal banking agencies’ safety-and25 soundness authorities over banks estab-
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1 lished in law other than title VII of Public 

2 Law 111–203 or the authorities of State 

3 insurance regulators over insurers, includ4 ing the authority to impose capital require5 ments with regard to swaps. For purposes 

6 of this clause, the term ‘bank’ shall be de7 fined pursuant to section 3(a)(6) of the Se8 curities Exchange Act of 1934, ‘insurer’ 

9 shall be defined pursuant to title V of Pub10 lic Law 111–203, and ‘swap’ shall be de11 fined pursuant to title VII of Public Law 

12 111–203. 

13 ‘‘(vi) PREVENTION OF EVASION.—The 

14 Commission may prescribe rules under this 

15 subparagraph (and issue interpretations of 

16 such rules) as determined by the Commis17 sion to be necessary to include in the defi18 nition of swaps under this paragraph any 

19 agreement, contract, or transaction that 

20 has been structured to evade the require21 ments of this Act applicable to swaps.’’. 

22 (b) SECURITIES EXCHANGE ACT OF 1934 AMEND23 MENTS.—Section 3(a)(68) of the Securities Exchange Act 

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

25 761(a)(6) of the Dodd-Frank Wall Street Reform and 
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1 Consumer Protection Act, is amended by adding at the 

2 end the following: 

3 ‘‘(F) TREATMENT OF AFFILIATE TRANS4 ACTIONS.— 

5 ‘‘(i) IN GENERAL.—For the purposes 

6 of any clearing and execution requirements 

7 under section 3C and any applicable mar8 gin and capital requirements of section 

9 15F(e), and for purposes of defining ‘secu10 rity-based swap dealer’ or a ‘major secu11 rity-based swap participant’, and reporting 

12 requirements other than those set forth in 

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

14 does not include any agreement, contract, 

15 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 parties 

20 that report information or prepare fi21 nancial statements on a consolidated 

22 basis, or for which a company affili23 ated with both parties reports infor24 mation or prepares financial state25 ments on a consolidated basis. 
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1 ‘‘(ii) REPORTING.—All agreements, 

2 contracts, or transactions described in 

3 clause (i) shall be reported to either a se4 curity-based swap data repository, or, if 

5 there is no security-based swap data repos6 itory that would accept such agreements, 

7 contracts, or transactions, to the Commis8 sion pursuant to section 13A, within such 

9 time period as the Commission may by rule 

10 or regulation prescribe. 

11 ‘‘(iii) PRESERVATION OF FEDERAL

12 RESERVE ACT AUTHORITY.—Nothing in 

13 this subparagraph shall exempt a trans14 action described in this subparagraph from 

15 sections 23A or 23B of the Federal Re16 serve Act or implementing regulations 

17 thereunder. 

18 ‘‘(iv) PROTECTION OF INSURANCE

19 FUNDS.—Nothing in this subparagraph 

20 shall be construed to prevent the regulator 

21 of a Federal or State insurance fund or 

22 guaranty fund from exercising its other ex23 isting authority to protect the integrity of 

24 such a fund, except that such regulator 

25 shall not subject security-based swap 
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1 transactions between affiliated companies 

2 to clearing and execution requirements 

3 under section 3C, to any applicable margin 

4 and capital requirements of section 15F(e), 

5 or to reporting requirements of title VII of 

6 Public Law 111–203 other than those set 

7 forth in clause (ii). 

8 ‘‘(v) PRESERVATION OF FEDERAL

9 AND STATE REGULATORY AUTHORITIES.— 

10 Nothing in this subparagraph shall affect 

11 the Federal banking agencies’ safety-and12 soundness authorities over banks estab13 lished in law other than title VII of Public 

14 Law 111–203 or the authorities of State 

15 insurance regulators over insurers, includ16 ing the authority to impose capital require17 ments with regard to security-based swaps. 

18 For purposes of this clause, the term 

19 ‘bank’ shall be defined pursuant to section 

20 3(a)(6) of the Securities Exchange Act of 

21 1934, ‘insurer’ shall be defined pursuant 

22 to title V of Public Law 111–203, and ‘se23 curity-based swap’ shall be defined pursu24 ant to title VII of Public Law 111–203. 
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1 ‘‘(vi) PREVENTION OF EVASION.—The 

2 Commission may prescribe rules under this 

3 subparagraph (and issue interpretations of 

4 such rules) as determined by the Commis5 sion to be necessary to include in the defi6 nition of security-based swap under this 

7 paragraph any agreement, contract, or 

8 transaction that has been structured to 

9 evade the requirements of this Act applica10 ble to security-based swaps.’’. 

11 SEC. 2. IMPLEMENTATION. 

12 The amendments made by this Act to the Commodity 

13 Exchange Act shall be implemented— 

14 (1) without regard to— 

15 (A) chapter 35 of title 44, United States 

16 Code; and 

17 (B) the notice and comment provisions of 

18 section 553 of title 5, United States Code; 

19 (2) through the promulgation of an interim 

20 final rule, pursuant to which public comment will be 

21 sought before a final rule is issued, and 

22 (3) such that paragraph (1) shall apply solely 

23 to changes to rules and regulations, or proposed 
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1 rules and regulations, that are limited to and di2 rectly a consequence of such amendments. 

Passed the House of Representatives March 26, 

2012. 

Attest: 

Clerk. 

112TH CONGRESS 

2D SESSION H. R. 2779 

AN ACT 

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