II 

Calendar No. 343 

112TH CONGRESS 

2D SESSION H. R. 2779 

IN THE SENATE OF THE UNITED STATES 

MARCH 27, 2012 

Received; read the first time 

MARCH 28, 2012 

Read the second time and placed on the calendar 

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, 

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 1a(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: 


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1 ‘‘(G) TREATMENT OF AFFILIATE TRANS2 ACTIONS.— 

3 ‘‘(i) IN GENERAL.—For the purposes 

4 of any clearing and execution requirements 

5 under section 2(h) and any applicable mar6 gin and capital requirements of section 

7 4s(e) and for purposes of defining ‘swap 

8 dealer’ or ‘major swap participant’, and re9 porting requirements other than those set 

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

11 not include any agreement, contract, or 

12 transaction that— 

13 ‘‘(I) would otherwise be included 

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

15 and 

16 ‘‘(II) is entered into by parties 

17 that report information or prepare fi18 nancial statements on a consolidated 

19 basis, or for which a company affili20 ated with both parties reports infor21 mation or prepares financial state22 ments on a consolidated basis. 

23 ‘‘(ii) REPORTING.—All agreements, 

24 contracts, or transactions described in 

25 clause (i) shall be reported to either a 


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1 swap data repository, or, if there is no 

2 swap data repository that would accept 

3 such agreements, contracts, or trans4 actions, to the Commission pursuant to 

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

6 to the Commission pursuant to section 

7 2(h)(5), within such time period as the 

8 Commission may by rule or regulation pre9 scribe. Nothing in this subparagraph shall 

10 prohibit the Commission from establishing 

11 public reporting requirements for covered 

12 transactions between affiliates as described 

13 in sections 23A and 23B of the Federal 

14 Reserve Act in a manner consistent with 

15 rules governing the treatment of such cov16 ered transactions pursuant to section 

17 2(a)(13) of this Act. 

18 ‘‘(iii) 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 agreements, contracts, or 


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1 transactions described in clause (i) to 

2 clearing and execution requirements under 

3 section 2 of this Act, to any applicable 

4 margin and capital requirements of section 

5 4s(e) of this Act, or to reporting require6 ments of title VII of Public Law 111–203 

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

8 this subparagraph. 

9 ‘‘(iv) PRESERVATION OF FEDERAL RE10 SERVE ACT AUTHORITY.—Nothing in this 

11 subparagraph shall exempt a transaction 

12 described in this subparagraph from sec13 tions 23A or 23B of the Federal Reserve 

14 Act or implementing regulations there15 under. 

16 ‘‘(v) PRESERVATION OF FEDERAL

17 AND STATE REGULATORY AUTHORITIES.— 

18 Nothing in this subparagraph shall affect 

19 the Federal banking agencies’ safety-and20 soundness authorities over banks estab21 lished in law other than title VII of Public 

22 Law 111–203 or the authorities of State 

23 insurance regulators over insurers, includ24 ing the authority to impose capital require25 ments with regard to swaps. For purposes 


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1 of this clause, the term ‘bank’ shall be de2 fined pursuant to section 3(a)(6) of the Se3 curities Exchange Act of 1934, ‘insurer’ 

4 shall be defined pursuant to title V of Pub5 lic Law 111–203, and ‘swap’ shall be de6 fined pursuant to title VII of Public Law 

7 111–203. 

8 ‘‘(vi) PREVENTION OF EVASION.—The 

9 Commission may prescribe rules under this 

10 subparagraph (and issue interpretations of 

11 such rules) as determined by the Commis12 sion to be necessary to include in the defi13 nition of swaps under this paragraph any 

14 agreement, contract, or transaction that 

15 has been structured to evade the require16 ments of this Act applicable to swaps.’’. 

17 (b) SECURITIES EXCHANGE ACT OF 1934 AMEND18 MENTS.—Section 3(a)(68) of the Securities Exchange Act 

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

20 761(a)(6) of the Dodd-Frank Wall Street Reform and 

21 Consumer Protection Act, is amended by adding at the 

22 end the following: 

23 ‘‘(F) TREATMENT OF AFFILIATE TRANS24 ACTIONS.— 


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1 ‘‘(i) IN GENERAL.—For the purposes 

2 of any clearing and execution requirements 

3 under section 3C and any applicable mar4 gin and capital requirements of section 

5 15F(e), and for purposes of defining ‘secu6 rity-based swap dealer’ or a ‘major secu7 rity-based swap participant’, and reporting 

8 requirements other than those set forth in 

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

10 does not include any agreement, contract, 

11 or transaction that— 

12 ‘‘(I) would otherwise be included 

13 as a ‘security-based swap’ under sub14 paragraph (A); and 

15 ‘‘(II) is entered into by parties 

16 that report information or prepare fi17 nancial statements on a consolidated 

18 basis, or for which a company affili19 ated with both parties reports infor20 mation or prepares financial state21 ments on a consolidated basis. 

22 ‘‘(ii) REPORTING.—All agreements, 

23 contracts, or transactions described in 

24 clause (i) shall be reported to either a se25 curity-based swap data repository, or, if 


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1 there is no security-based swap data repos2 itory that would accept such agreements, 

3 contracts, or transactions, to the Commis4 sion pursuant to section 13A, within such 

5 time period as the Commission may by rule 

6 or regulation prescribe. 

7 ‘‘(iii) PRESERVATION OF FEDERAL

8 RESERVE ACT AUTHORITY.—Nothing in 

9 this subparagraph shall exempt a trans10 action described in this subparagraph from 

11 sections 23A or 23B of the Federal Re12 serve Act or implementing regulations 

13 thereunder. 

14 ‘‘(iv) PROTECTION OF INSURANCE

15 FUNDS.—Nothing in this subparagraph 

16 shall be construed to prevent the regulator 

17 of a Federal or State insurance fund or 

18 guaranty fund from exercising its other ex19 isting authority to protect the integrity of 

20 such a fund, except that such regulator 

21 shall not subject security-based swap 

22 transactions between affiliated companies 

23 to clearing and execution requirements 

24 under section 3C, to any applicable margin 

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


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1 or to reporting requirements of title VII of 

2 Public Law 111–203 other than those set 

3 forth in clause (ii). 

4 ‘‘(v) PRESERVATION OF FEDERAL

5 AND STATE REGULATORY AUTHORITIES.— 

6 Nothing in this subparagraph shall affect 

7 the Federal banking agencies’ safety-and8 soundness authorities over banks estab9 lished in law other than title VII of Public 

10 Law 111–203 or the authorities of State 

11 insurance regulators over insurers, includ12 ing the authority to impose capital require13 ments with regard to security-based swaps. 

14 For purposes of this clause, the term 

15 ‘bank’ shall be defined pursuant to section 

16 3(a)(6) of the Securities Exchange Act of 

17 1934, ‘insurer’ shall be defined pursuant 

18 to title V of Public Law 111–203, and ‘se19 curity-based swap’ shall be defined pursu20 ant to title VII of Public Law 111–203. 

21 ‘‘(vi) PREVENTION OF EVASION.—The 

22 Commission may prescribe rules under this 

23 subparagraph (and issue interpretations of 

24 such rules) as determined by the Commis25 sion to be necessary to include in the defiVerDate Mar 15 2010 03:48 Mar 29, 2012 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2779.PCS H2779

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1 nition of security-based swap under this 

2 paragraph any agreement, contract, or 

3 transaction that has been structured to 

4 evade the requirements of this Act applica5 ble to security-based swaps.’’. 

6 SEC. 2. IMPLEMENTATION. 

7 The amendments made by this Act to the Commodity 

8 Exchange Act shall be implemented— 

9 (1) without regard to— 

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

11 Code; and 

12 (B) the notice and comment provisions of 

13 section 553 of title 5, United States Code; 

14 (2) through the promulgation of an interim 

15 final rule, pursuant to which public comment will be 

16 sought before a final rule is issued, and 

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

18 to changes to rules and regulations, or proposed 

19 rules and regulations, that are limited to and di20 rectly a consequence of such amendments. 

Passed the House of Representatives March 26, 

2012. 

Attest: KAREN L. HAAS, 

Clerk. 


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Calendar No. 343 

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 DoddMARCH 28, 2012 

Read the second time and placed on the calendar 


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