I 
111TH CONGRESS 
1ST SESSION H. R. 3795 
To enact the Over-the-Counter Derivatives Markets Act of 2009. 
IN THE HOUSE OF REPRESENTATIVES 
OCTOBER 13, 2009 
Mr. FRANK of Massachusetts 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 Speak-
er, in each case for consideration of such provisions as fall within the ju-
risdiction of the committee concerned 
A BILL 
To enact the Over-the-Counter Derivatives Markets Act of 
2009. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
TITLE 
I—IMPROVEMENTS 
TO 
REGULATION OF OVER-THE- 
COUNTER DERIVATIVES MAR-
KETS 
SECTION 101. SHORT TITLE. 
This title may be cited as the ‘‘Over-the-Counter De-
rivatives Markets Act of 2009’’. 
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Subtitle A—Regulation of Swap 
Markets 
SEC. 111. DEFINITIONS. 
(a) AMENDMENTS TO DEFINITIONS IN THE COM-
MODITY EXCHANGE ACT.—Section 1a of the Commodity 
Exchange Act (7 U.S.C. 1a) is amended— 
(1) by redesignating paragraphs (9) through 
(34) as paragraphs (10) through (35), respectively; 
(2) by adding after paragraph (8) the following: 
‘‘(9) 
DERIVATIVE.—The 
term 
‘derivative’ 
means— 
‘‘(A) a contract of sale of a commodity for 
future delivery; or 
‘‘(B) a swap.’’; 
(3) by redesignating paragraph (35) (as redes-
ignated by subsection (a)) as paragraph (36); 
(4) by adding after paragraph (34) (as redesig-
nated by subsection (a)) the following: 
‘‘(35) SWAP.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), the term ‘swap’ means any 
agreement, contract, or transaction that— 
‘‘(i) is a put, call, cap, floor, collar, or 
similar option of any kind for the purchase 
or sale of, or based on the value of, one or 
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value or level without also conveying a cur-
rent or future direct or indirect ownership 
interest in an asset (including any enter-
prise or investment pool) or liability that 
incorporates the financial risk so trans-
ferred, including any agreement, contract, 
or transaction commonly known as an in-
terest rate swap, a rate floor, rate cap, 
rate collar, cross-currency rate swap, basis 
swap, currency swap, total return swap, 
equity index swap, equity swap, debt index 
swap, debt swap, credit spread, credit de-
fault swap, credit swap, weather swap, en-
ergy swap, metal swap, agricultural swap, 
emissions swap, or commodity swap; 
‘‘(iv) is an agreement, contract, or 
transaction that is, or in the future be-
comes, commonly known to the trade as a 
swap; or 
‘‘(v) is any combination or permuta-
tion of, or option on, any agreement, con-
tract, or transaction described in any of 
clauses (i) through (iv). 
‘‘(B) EXCLUSIONS.—The term ‘swap’ does 
not include: 
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‘‘(i) any contract of sale of a com-
modity for future delivery or security fu-
tures product traded on or subject to the 
rules of any board of trade designated as 
a contract market under section 5 or 5f; 
‘‘(ii) any sale of a nonfinancial com-
modity for deferred shipment or delivery, 
so long as such transaction is physically 
settled; 
‘‘(iii) any put, call, straddle, option, or 
privilege on any security, certificate of de-
posit, or group or index of securities, in-
cluding any interest therein or based on 
the value thereof, that is subject to the Se-
curities Act of 1933 (15 U.S.C. 77a et 
seq.) and the Securities Exchange Act of 
1934 (15 U.S.C. 78a et seq.); 
‘‘(iv) any put, call, straddle, option, or 
privilege relating to foreign currency en-
tered into on a national securities exchange 
registered pursuant to section 6(a) of the 
Securities Exchange Act of 1934 (15 
U.S.C. 78f(a)); 
‘‘(v) any agreement, contract, or 
transaction providing for the purchase or 
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sale of one or more securities on a fixed 
basis that is subject to the Securities Act 
of 1933 (15 U.S.C. 77a et seq.) and the 
Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.); 
‘‘(vi) any agreement, contract, or 
transaction providing for the purchase or 
sale of one or more securities on a contin-
gent basis that is subject to the Securities 
Act of 1933 (15 U.S.C. 77a et seq.) and 
the Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.), unless such agree-
ment, contract, or transaction predicates 
such purchase or sale on the occurrence of 
a bona fide contingency that might reason-
ably be expected to affect or be affected by 
the creditworthiness of a party other than 
a party to the agreement, contract, or 
transaction; 
‘‘(vii) any note, bond, or evidence of 
indebtedness that is a security as defined 
in section 2(a)(1) of the Securities Act of 
1933 (15 U.S.C. 77b(a)(1)); 
‘‘(viii) any agreement, contract, or 
transaction that is— 
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‘‘(I) based on a security; and 
‘‘(II) entered into directly or 
through an underwriter (as defined in 
section 2(a)(11) of the Securities Act 
of 1933) (15 U.S.C. 77b(a)(11)) by 
the issuer of such security for the 
purposes of raising capital, unless 
such agreement, contract, or trans-
action is entered into to manage a 
risk associated with capital raising; 
‘‘(ix) any foreign exchange swap; 
‘‘(x) any foreign exchange forward; 
‘‘(xi) any agreement, contract, or 
transaction a counterparty of which is a 
Federal Reserve bank or the United States 
Government, or an agency of the United 
States 
Government 
that 
is 
expressly 
backed by the full faith and credit of the 
United States; and 
‘‘(xii) any security-based swap, other 
than a security-based swap as described in 
paragraph (38)(C). 
‘‘(C) RULE OF CONSTRUCTION REGARDING 
MASTER AGREEMENTS.—The term ‘swap’ shall 
be construed to include a master agreement 
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that provides for an agreement, contract, or 
transaction that is a swap pursuant to subpara-
graph (A), together with all supplements to any 
such master agreement, without regard to 
whether the master agreement contains an 
agreement, contract, or transaction that is not 
a swap pursuant to subparagraph (A), except 
that the master agreement shall be considered 
to be a swap only with respect to each agree-
ment, contract, or transaction under the master 
agreement that is a swap pursuant to subpara-
graph (A).’’; 
(5) in paragraph (13) (as redesignated by sub-
section (a))— 
(A) in subparagraph (A)— 
(i) 
in 
clause 
(vii), 
by 
striking 
‘‘$25,000,000’’ 
and 
inserting 
‘‘$50,000,000’’; and 
(ii) in clause (xi), by striking ‘‘total 
assets in an amount’’ and inserting 
‘‘amounts invested on a discretionary 
basis’’; and 
(B) in paragraph (C), by striking ‘‘deter-
mines’’ and inserting ‘‘and the Securities and 
Exchange Commission may jointly determine’’; 
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(6) in paragraph (30) (as redesignated by sub-
section (a)), by— 
(A) redesignating subparagraph (E) as 
subparagraph (G); 
(B) in subparagraph (D), by striking 
‘‘and’’; and 
(C) inserting after subparagraph (D) the 
following: 
‘‘(E) a swap execution facility registered 
under section 5h; 
‘‘(F) a swap repository; and’’; 
(7) by adding after paragraph (36) (as redesig-
nated by subsection (c)) the following: 
‘‘(37) BOARD.—The term ‘Board’ means the 
Board of Governors of the Federal Reserve Sys-
tem.’’; 
(8) by adding after paragraph (37) the fol-
lowing: 
‘‘(38) SECURITY-BASED SWAP.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), the term ‘security-based 
swap’ means any agreement, contract, or trans-
action that would be a swap under paragraph 
(35) 
(without 
regard 
to 
paragraph 
(35)(B)(xii)), and that— 
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‘‘(i) is based on an index that is a 
narrow-based security index, including any 
interest therein or based on the value 
thereof; 
‘‘(ii) is based on a single security or 
loan, including any interest therein or 
based on the value thereof; or 
‘‘(iii) is based on the occurrence, non- 
occurrence, or extent of the occurrence of 
an event relating to a single issuer of a se-
curity or the issuers of securities in a nar-
row-based security index, provided that 
such event must directly affect the finan-
cial statements, financial condition, or fi-
nancial obligations of the issuer. 
‘‘(B) EXCLUSION.—The term ‘security- 
based swap’ does not include any agreement, 
contract, or transaction that meets the defini-
tion of security-based swap only because it ref-
erences or is based upon a government security. 
‘‘(C) MIXED
SWAP.—The term ‘security- 
based swap’ includes any agreement, contract, 
or transaction that is as described in subpara-
graph (A) and also is based on the value of one 
or more interest or other rates, currencies, com-
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modities, instruments of indebtedness, indices, 
quantitative measures, other financial or eco-
nomic interest or property of any kind (other 
than a single security or a narrow-based secu-
rity index), or the occurrence, non-occurrence, 
or the extent of the occurrence of an event or 
contingency associated with a potential finan-
cial, economic, or commercial consequence 
(other than an event described in subparagraph 
(A)(iii)). 
‘‘(D) RULE OF CONSTRUCTION REGARDING 
MASTER
AGREEMENTS.—The term ‘security- 
based swap’ shall be construed to include a 
master agreement that provides for an agree-
ment, contract, or transaction that is a secu-
rity-based swap pursuant to subparagraph (A), 
together with all supplements to any such mas-
ter agreement, without regard to whether the 
master agreement contains an agreement, con-
tract, or transaction that is not a security-based 
swap pursuant to subparagraph (A), except 
that the master agreement shall be considered 
to be a security-based swap only with respect to 
each agreement, contract, or transaction under 
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the master agreement that is a security-based 
swap pursuant to subparagraph (A).’’; 
(9) by adding after paragraph (38) the fol-
lowing: 
‘‘(39) SWAP DEALER.— 
‘‘(A) IN GENERAL.—The term ‘swap deal-
er’ means any person engaged in the business 
of buying and selling swaps for such person’s 
own account, through a broker or otherwise. 
‘‘(B) EXCEPTION.—The term ‘swap dealer’ 
does not include a person that buys or sells 
swaps for such person’s own account, either in-
dividually or in a fiduciary capacity, but not as 
a part of a regular business.’’; 
(10) by adding after paragraph (39) the fol-
lowing: 
‘‘(40) MAJOR SWAP PARTICIPANT.— 
‘‘(A) IN GENERAL.—The term ‘major swap 
participant’ means any person who is not a 
swap dealer and who maintains a substantial 
net position in outstanding swaps, excluding po-
sitions held primarily for hedging (including 
balance sheet hedging) or risk management 
purposes. A person may be designated as a 
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major swap participant for 1 or more individual 
types of swaps. 
‘‘(B) DEFINITION OF ‘SUBSTANTIAL NET 
POSITION’.—The Commission and the Securi-
ties and Exchange Commission shall jointly de-
fine by rule or regulation the term ‘substantial 
net position’ at a threshold that the regulators 
determine prudent for the effective monitoring, 
management and oversight of the financial sys-
tem. In the event that the regulators are unable 
to agree upon a level within 60 days of the 
commencement of such consultations, the Sec-
retary of the Treasury shall make such deter-
mination, which shall be binding on and adopt-
ed by such regulators.’’; 
(11) by adding after paragraph (40) the fol-
lowing: 
‘‘(41) MAJOR SECURITY-BASED SWAP PARTICI-
PANT.— 
‘‘(A) IN GENERAL.—The term ‘major secu-
rity-based swap participant’ means any person 
who is not a security-based swap dealer and 
who maintains a substantial net position in out-
standing security-based swaps, excluding posi-
tions held primarily for hedging (including bal-
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ance sheet hedging) or risk management pur-
poses. A person may be designated as a major 
security-based swap participant for 1 or more 
individual types of security-based swaps. 
‘‘(B) DEFINITION OF ‘SUBSTANTIAL NET 
POSITION’.—The Commission and the Securi-
ties and Exchange Commission shall jointly de-
fine by rule or regulation the term ‘substantial 
net position’ at a threshold that the regulators 
determine prudent for the effective monitoring, 
management and oversight of the financial sys-
tem. In the event that the regulators are unable 
to agree upon a level within 60 days of the 
commencement of such consultations, the Sec-
retary of the Treasury shall make such deter-
mination, which shall be binding on and adopt-
ed by such regulators.’’; 
(12) by adding after paragraph (41) the fol-
lowing: 
‘‘(42) APPROPRIATE FEDERAL BANKING AGEN-
CY.—The term ‘appropriate Federal banking agency’ 
has the same meaning as in section 3(q) of the Fed-
eral Deposit Insurance Act (12 U.S.C. 1813(q)).’’; 
(13) by adding after paragraph (42) the fol-
lowing: 
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‘‘(43) PRUDENTIAL
REGULATOR.—The term 
‘Prudential Regulator’ means— 
‘‘(A) the Board in the case of a swap deal-
er, major swap participant, security-based swap 
dealer or major security-based swap participant 
that is— 
‘‘(i) a State-chartered bank that is a 
member of the Federal Reserve System; or 
‘‘(ii) a State-chartered branch or 
agency of a foreign bank; 
‘‘(B) the Office of the Comptroller of the 
Currency in the case of a swap dealer, major 
swap participant, security-based swap dealer or 
major security-based swap participant that is— 
‘‘(i) a national bank; or 
‘‘(ii) a federally chartered branch or 
agency of a foreign bank; and 
‘‘(C) the Federal Deposit Insurance Cor-
poration in the case of a swap dealer, major 
swap participant, security-based swap dealer or 
major security-based swap participant that is a 
State-chartered bank that is not a member of 
the Federal Reserve System.’’; 
(14) by adding after paragraph (43) the fol-
lowing: 
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‘‘(44) SECURITY-BASED SWAP DEALER.— 
‘‘(A) IN
GENERAL.—The term ‘security- 
based swap dealer’ means any person engaged 
in the business of buying and selling security- 
based swaps for such person’s own account, 
through a broker or otherwise. 
‘‘(B) EXCEPTION.—The term ‘security- 
based swap dealer’ does not include a person 
that buys or sells security-based swaps for such 
person’s own account, either individually or in 
a fiduciary capacity, but not as a part of a reg-
ular business.’’; 
(15) by adding after paragraph (44) the fol-
lowing: 
‘‘(45) GOVERNMENT
SECURITY.—The term 
‘government security’ has the same meaning as in 
section 3(a)(42) of the Securities Exchange Act of 
1934 (15 U.S.C. 78c(a)(42)).’’; 
(16) by adding after paragraph (45) the fol-
lowing: 
‘‘(46) FOREIGN
EXCHANGE
FORWARD.—The 
term ‘foreign exchange forward’ means a transaction 
that solely involves the exchange of 2 different cur-
rencies on a specific future date at a fixed rate 
agreed at the inception of the contract.’’; 
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rity-based swap participant, or any employee of such 
security-based swap dealer or major security-based 
swap participant, except that any person associated 
with a security-based swap dealer or major security- 
based swap participant whose functions are solely 
clerical or ministerial shall not be included in the 
meaning of such term other than for purposes of 
section 15F(e)(2) of the Securities Exchange Act of 
1934 (15 U.S.C. 78o–10).’’; 
(19) by adding after paragraph (48) the fol-
lowing: 
‘‘(49) PERSON
ASSOCIATED
WITH
A
SWAP 
DEALER OR MAJOR SWAP PARTICIPANT.—The term 
‘person associated with a swap dealer or major swap 
participant’ or ‘associated person of a swap dealer or 
major swap participant’ means any partner, officer, 
director, or branch manager of such swap dealer or 
major swap participant (or any person occupying a 
similar status or performing similar functions), any 
person directly or indirectly controlling, controlled 
by, or under common control with such swap dealer 
or major swap participant, or any employee of such 
swap dealer or major swap participant, except that 
any person associated with a swap dealer or major 
swap participant whose functions are solely clerical 
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or ministerial shall not be included in the meaning 
of such term other than for purposes of section 
4s(b)(6).’’; and 
(20) by adding after paragraph (49) the fol-
lowing: 
‘‘(50) SWAP REPOSITORY.—The term ‘swap re-
pository’ means an entity that collects and maintains 
the records of the terms and conditions of swaps or 
security-based swaps entered into by third parties.’’. 
(b) JOINT RULEMAKING ON FURTHER DEFINITION 
OF TERMS.— 
(1) IN
GENERAL.—The Commodity Futures 
Trading Commission and the Securities and Ex-
change Commission shall jointly adopt a rule further 
defining the terms ‘‘swap’’, ‘‘security-based swap’’, 
‘‘swap dealer’’, ‘‘security-based swap dealer’’, ‘‘major 
swap participant’’,‘‘major security-based swap par-
ticipant’’, and ‘‘eligible contract participant’’ no 
later than 180 days after the effective date of this 
Act. 
(2) PREVENTION
OF
EVASIONS.—The Com-
modity Futures Trading Commission and the Securi-
ties and Exchange Commission may prescribe rules 
defining the term ‘‘swap’’ or ‘‘security-based swap’’ 
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to include transactions that have been structured to 
evade this Act. 
(c) JOINT RULEMAKING UNDER THIS ACT.— 
(1) UNIFORM
RULES.—Rules and regulations 
prescribed jointly under this Act by the Commodity 
Futures Trading Commission and the Securities and 
Exchange Commission shall be uniform. 
(2) TREASURY
DEPARTMENT.—In the event 
that the Commodity Futures Trading Commission 
and the Securities and Exchange Commission fail to 
jointly prescribe uniform rules and regulations under 
any provision of this Act in a timely manner, the 
Secretary of the Treasury, in consultation with the 
Commodity Futures Trading Commission and the 
Securities and Exchange Commission, shall prescribe 
rules and regulations under such provision. A rule 
prescribed by the Secretary of the Treasury shall be 
enforced as if prescribed jointly by the Commodity 
Futures Trading Commission and the Securities and 
Exchange Commission and shall remain in effect 
until the Secretary rescinds the rule or until the ef-
fective date of a corresponding rule prescribed joint-
ly by the Commodity Futures Trading Commission 
and the Securities and Exchange Commission in ac-
cordance with this section, whichever is later. 
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(3) DEADLINE.—The Secretary of the Treasury 
shall adopt rules and regulations under paragraph 
(2) within 180 days of the time that the Commodity 
Futures Trading Commission and the Securities and 
Exchange Commission failed to adopt uniform rules 
and regulations. 
(4) TREATMENT
OF
SIMILAR
PRODUCTS.—In 
adopting joint rules and regulations under this Act, 
the Commodity Futures Trading Commission and 
the Securities and Exchange Commission shall pre-
scribe requirements to treat functionally or economi-
cally similar products similarly. 
(5) TREATMENT OF DISSIMILAR PRODUCTS.— 
Nothing in this Act shall be construed to require the 
Commodity Futures Trading Commission and the 
Securities and Exchange Commission to adopt joint 
rules that treat functionally or economically different 
products identically. 
(6) JOINT INTERPRETATION.—Any interpreta-
tion of, or guidance regarding, a provision of this 
Act, shall be effective only if issued jointly by the 
Commodity Futures Trading Commission and the 
Securities and Exchange Commission if this Act re-
quires the Commodity Futures Trading Commission 
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and the Securities and Exchange Commission to 
issue joint regulations to implement the provision. 
(d) EXEMPTIONS.—Section 4(c) of the Commodity 
Exchange Act (7 U.S.C. 4(c)) is amended by adding at 
the end the following: ‘‘The Commission shall not have 
the authority to grant exemptions from the swap-related 
provisions of the Over-the-Counter Derivatives Markets 
Act of 2009, except as expressly authorized under the pro-
visions of that Act.’’. 
SEC. 112. JURISDICTION. 
(a) EXCLUSIVE JURISDICTION.—The first sentence 
of section 2(a)(1)(A) of the Commodity Exchange Act (7 
U.S.C. 2(a)(1)(A)) is amended— 
(1) by striking ‘‘(C) and (D)’’ and inserting 
‘‘(C), (D), and (G)’’; 
(2) by striking ‘‘subsections (c) through (i)’’ 
and inserting ‘‘subsections (c) and (f)’’; and 
(3) by striking ‘‘involving contracts of sale’’ and 
inserting ‘‘involving swaps or contracts of sale’’. 
(b) NO LIMITATION.—Section 2(a)(1) of the Com-
modity Exchange Act (7 U.S.C. 2(a)(1)) is amended by 
inserting after subparagraph (F) the following: 
‘‘(G) Nothing contained in this paragraph 
shall supersede or limit the jurisdiction con-
ferred on the Securities and Exchange Commis-
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sion or other regulatory authority by, or other-
wise restrict the authority of the Securities and 
Exchange Commission or other regulatory au-
thority under, the Over-the-Counter Derivatives 
Markets Act of 2009, including with respect to 
a security-based swap as described in section 
1a(38)(C) of this Act.’’. 
(c) ADDITIONS.—Section 2(c)(2)(A) of the Com-
modity Exchange Act (7 U.S.C. 2(c)(2)(A)) is amended— 
(1) in clause (i), by striking ‘‘or’’ at the end; 
(2) by redesignating clause (ii) as clause (iii); 
and 
(3) by inserting after clause (i) the following: 
‘‘(ii) a swap; or’’. 
SEC. 113. CLEARING. 
(a) CLEARING REQUIREMENT.— 
(1) Sections 2(d), 2(e), 2(g), and 2(h) of the 
Commodity Exchange Act (7 U.S.C. 2(d), 2(e), 2(g), 
and 2(h)) are repealed. 
(2) Section 2 of the Commodity Exchange Act 
(7 U.S.C. 2) is further amended by inserting after 
subsection (c) the following: 
‘‘(d) SWAPS.—Nothing in this Act (other than sub-
sections (a)(1)(A), (a)(1)(B), (f), and (j), sections 4a, 4b, 
4b-1, 4c(a), 4c(b), 4o, 4r, 4s, 4t, 4u, 5b, 5c, 5h, 6(c), 6(d), 
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6c, 6d, 8, 8a, 9, 12(e)(2), 12(f), 13(a), 13(b), 21, and 
22(a)(4) and such other provisions of this Act as are appli-
cable by their terms to registered entities and Commission 
registrants) governs or applies to a swap. 
‘‘(e) LIMITATION ON PARTICIPATION.—It shall be 
unlawful for any person, other than an eligible contract 
participant, to enter into a swap unless the swap is en-
tered into on or subject to the rules of a board of trade 
designated as a contract market under section 5.’’. 
(3) Section 2 of the Commodity Exchange Act 
(7 U.S.C. 2) is further amended by inserting after 
subsection (i) the following: 
‘‘(j) CLEARING OF SWAPS.— 
‘‘(1) CLEARING REQUIREMENT.—The Commis-
sion shall monitor swap activity and transaction data 
and by rule or regulation identify specific swap con-
tracts that it determines are required to be cleared 
consistent with the public interest, after taking into 
account the following factors: 
‘‘(A) the existence of significant out-
standing notional exposures, trading liquidity 
and adequate pricing data; 
‘‘(B) the availability of one or more swap 
clearinghouses with the rule framework, capac-
ity, operational expertise and resources, and 
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credit support infrastructure to clear the con-
tract on terms that are consistent with the ma-
terial terms and trading conventions on which 
the contract is then traded; 
‘‘(C) the impact on the mitigation of sys-
temic risk, taking into account the size of the 
market for such contract and the resources of 
the swap clearinghouses available to clear the 
contract; 
‘‘(D) the impact on competition; and 
‘‘(E) the existence of reasonable legal cer-
tainty in the event of the insolvency of the rel-
evant swap clearinghouse or one or more of its 
clearing members with regard to the treatment 
of customer and swap counterparty positions, 
funds, and property. 
‘‘(2) SCOPE
OF
CLEARING
FUNCTIONS.—The 
Commission shall by rule or regulation define the 
scope of the clearing functions that are necessary to 
satisfy the requirements of paragraph (1). 
‘‘(3) PREVENTION OF EVASION.—The Commis-
sion and the Securities and Exchange Commission 
shall have authority to prescribe rules under this 
subsection, or issue interpretations of such rules, as 
necessary to prevent evasions of this Act provided 
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that any such rules or interpretations must be issued 
jointly to be effective. 
‘‘(4) REQUIRED REPORTING.— 
‘‘(A) IN GENERAL.—All swap transactions 
that are not accepted for clearing by any de-
rivatives clearing organization shall be reported 
to either a swap repository described in section 
21 or, if there is no repository that would ac-
cept the swap, to the Commission pursuant to 
section 4r within such time period as the Com-
mission may by rule or regulation prescribe. 
‘‘(B) AUTHORITY OF SWAP DEALER TO RE-
PORT.—Counterparties 
may 
agree 
which 
counterparty will report the swap transaction. 
In transactions where only 1 counterparty is a 
swap dealer, the swap dealer will report the 
transaction. 
‘‘(5) TRANSITION
RULES.—Rules adopted by 
the Commission under this section shall provide for 
the reporting of data, as follows: 
‘‘(A) Swaps that were entered into before 
the date of enactment of the Over-the-Counter 
Derivatives Markets Act of 2009 shall be re-
ported to a registered swap repository or the 
Commission no later than 180 days after the 
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effective date of the Over-the-Counter Deriva-
tives Markets Act of 2009. 
‘‘(B) Swaps that were entered into on or 
after the date of enactment of the Over-the- 
Counter Derivatives Markets Act of 2009 shall 
be reported to a registered swap repository or 
the Commission no later than the later of— 
‘‘(i) 90 days after the effective date of 
the Over-the-Counter Derivatives Markets 
Act of 2009; or 
‘‘(ii) such other time after entering 
into the swap as the Commission may pre-
scribe by rule or regulation. 
‘‘(6) TRADE
EXECUTION.—With respect to 
transactions involving swaps subject to the require-
ment of paragraph (1) and where both counterpar-
ties are either swap dealers or major swap partici-
pants, such counterparties must either: 
‘‘(A) Execute the transaction on a board of 
trade designated as a contract market under 
section 5 (in which event, such transaction shall 
be subject to regulation under this Act as a 
transaction in a contract of sale of a commodity 
for future delivery or commodity option, as ap-
plicable); 
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‘‘(B) Execute the transaction on a swap 
execution facility registered with the Commis-
sion; 
‘‘(C) Execute the transaction on a foreign 
swap execution facility that is subject to regula-
tion as such under the laws of a foreign juris-
diction; or 
‘‘(D) If the transaction is not executed on 
an entity listed in subparagraph (A), (B), or 
(C), comply with any recordkeeping and end-of- 
day transaction reporting requirements— 
‘‘(i) as may be prescribed by the Com-
mission with respect to commodity swaps 
subject to the requirements of paragraph 
(3); or 
‘‘(ii) as may be prescribed by the rel-
evant foreign regulator in the case of com-
modity swaps subject to the requirements 
of paragraph (3) entered into by— 
‘‘(I) a foreign swap dealer or a 
foreign swap market participant; or 
‘‘(II) a U.S. swap dealer or U.S. 
major swap participant that is enter-
ing into the commodity swap either 
outside of the United States, its terri-
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tories and possessions or with a for-
eign counterparty. 
‘‘(7) EXCHANGE TRADING.—In adopting rules 
and regulations, the Commission shall endeavor to 
eliminate unnecessary impediments to the trading on 
boards of trade designated as contract markets 
under section 5 of contracts, agreements or trans-
actions that would be security-based swaps but for 
the trading of such contracts, agreements or trans-
actions on such a designated contract market. 
‘‘(8) EXCEPTIONS.—The requirements of para-
graph (1) shall not apply to a swap if— 
‘‘(A) no derivatives clearing organization 
registered under this Act will accept the swap 
for clearing; or 
‘‘(B) one of the counterparties to the swap 
is not a swap dealer or major swap partici-
pant.’’. 
(b) DERIVATIVES CLEARING ORGANIZATIONS.— 
(1) Subsections (a) and (b) of section 5b of the 
Commodity Exchange Act (7 U.S.C. 7a–1) are 
amended to read as follows: 
‘‘(a) REGISTRATION REQUIREMENT.—It shall be un-
lawful for a derivatives clearing organization, unless reg-
istered with the Commission, directly or indirectly to make 
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use of the mails or any means or instrumentality of inter-
state commerce to perform the functions of a derivatives 
clearing organization described in section 1a(10) of this 
Act with respect to— 
‘‘(1) a contract of sale of a commodity for fu-
ture delivery (or option on such a contract) or option 
on a commodity, in each case unless the contract or 
option is— 
‘‘(A) excluded from this Act by section 
2(a)(1)(C)(i), 2(c), or 2(f); or 
‘‘(B) a security futures product cleared by 
a clearing agency registered with the Securities 
and Exchange Commission under the Securities 
Exchange Act of 1934 (15 U.S.C. 78a et seq.); 
or 
‘‘(2) a swap. 
‘‘(b) VOLUNTARY REGISTRATION.— 
‘‘(1) 
DERIVATIVES
CLEARING
ORGANIZA-
TIONS.—A person that clears agreements, contracts, 
or transactions that are not required to be cleared 
under this Act may register with the Commission as 
a derivatives clearing organization. 
‘‘(2) CLEARING AGENCIES.—A derivatives clear-
ing organization may clear security-based swaps that 
are required to be cleared by a person who is reg-
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istered as a clearing agency under the Securities Ex-
change Act of 1934 (15 U.S.C. 78a et seq.).’’. 
(2) Section 5b of the Commodity Exchange Act 
(7 U.S.C. 7a–1) is amended by adding at the end 
the following: 
‘‘(g) REQUIRED REGISTRATION
FOR BANKS
AND 
CLEARING AGENCIES.—A person that is required to be 
registered as a derivatives clearing organization under this 
section shall register with the Commission regardless of 
whether the person is also a bank or a clearing agency 
registered with the Securities and Exchange Commission 
under the Securities Exchange Act of 1934 (15 U.S.C. 
78a et seq.). 
‘‘(h) HARMONIZATION OF RULES.—Not later than 
180 days after the effective date of the Over-the-Counter 
Derivatives Markets Act of 2009, the Commission and the 
Securities and Exchange Commission shall jointly adopt 
uniform rules governing persons that are registered as de-
rivatives clearing organizations for swaps under this sub-
section and persons that are registered as clearing agen-
cies for security-based swaps under the Securities Ex-
change Act of 1934 (15 U.S.C. 78a et seq.). 
‘‘(i) CONSULTATION.—The Commission and the Se-
curities and Exchange Commission shall consult with the 
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appropriate Federal banking agencies prior to adopting 
rules under this section with respect to swaps. 
‘‘(j) EXEMPTIONS.—The Commission may exempt, 
conditionally or unconditionally, a derivatives clearing or-
ganization from registration under this section for the 
clearing of swaps if the Commission finds that such de-
rivatives clearing organization is subject to comparable, 
comprehensive supervision and regulation on a consoli-
dated basis by the Securities and Exchange Commission, 
a Prudential Regulator or the appropriate governmental 
authorities in the organization’s home country. 
‘‘(k) DESIGNATION OF COMPLIANCE OFFICER.— 
‘‘(1) IN GENERAL.—Each derivatives clearing 
organization shall designate an individual to serve as 
a compliance officer. 
‘‘(2) DUTIES.—The compliance officer— 
‘‘(A) shall report directly to the board or 
to the senior officer of the derivatives clearing 
organization; and 
‘‘(B) shall— 
‘‘(i) review compliance with the core 
principles in section 5b(c)(2); 
‘‘(ii) in consultation with the board of 
the derivatives clearing organization, a 
body performing a function similar to that 
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of a board, or the senior officer of the de-
rivatives clearing organization, resolve any 
conflicts of interest that may arise; 
‘‘(iii) be responsible for administering 
the policies and procedures required to be 
established pursuant to this section; and 
‘‘(iv) ensure compliance with com-
modity laws and the rules and regulations 
issued thereunder, including rules pre-
scribed by the Commission pursuant to 
this section; and 
‘‘(C) shall establish procedures for remedi-
ation of noncompliance issues found during 
compliance office reviews, lookbacks, internal or 
external audit findings, self-reported errors, or 
through validated complaints. Procedures will 
establish the handling, management response, 
remediation, retesting, and closing of non-
compliant issues. 
‘‘(3) ANNUAL REPORTS REQUIRED.—The com-
pliance officer shall annually prepare and sign a re-
port on the compliance of the derivatives clearing or-
ganization with the commodity laws and its policies 
and procedures, including its code of ethics and con-
flict of interest policies, in accordance with rules pre-
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scribed by the Commission. Such compliance report 
shall accompany the financial reports of the deriva-
tives clearing organization that are required to be 
furnished to the Commission pursuant to this sec-
tion and shall include a certification that, under pen-
alty of law, the report is accurate and complete.’’. 
(3) Section 5b(c)(2) of the Commodity Ex-
change Act (7 U.S.C. 7a–1(c)(2)) is amended to 
read as follows: 
‘‘(2) CORE
PRINCIPLES
FOR
DERIVATIVES 
CLEARING ORGANIZATIONS.— 
‘‘(A) IN GENERAL.—To be registered and 
to maintain registration as a derivatives clear-
ing organization, a derivatives clearing organi-
zation shall comply with the core principles 
specified in this paragraph, and any require-
ment that the Commission may impose by rule 
or regulation pursuant to section 8a(5). The 
Commission may conform the core principles to 
reflect evolving United States and international 
standards. Except where the Commission deter-
mines otherwise by rule or regulation, a deriva-
tives clearing organization shall have reasonable 
discretion in establishing the manner in which 
it complies with the core principles. 
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‘‘(B) FINANCIAL RESOURCES.— 
‘‘(i) The derivatives clearing organiza-
tion shall have adequate financial, oper-
ational, and managerial resources to dis-
charge its responsibilities. 
‘‘(ii) Financial resources shall at a 
minimum exceed the total amount that 
would— 
‘‘(I) enable the derivatives clear-
ing organization to meet its financial 
obligations to its members and par-
ticipants notwithstanding a default by 
the member or participant creating 
the largest financial exposure for that 
derivatives clearing organization in ex-
treme but plausible market conditions; 
and 
‘‘(II) enable the derivatives clear-
ing organization to cover its operating 
costs for a period of one year, cal-
culated on a rolling basis. 
‘‘(C) PARTICIPANT AND PRODUCT ELIGI-
BILITY.— 
‘‘(i) The derivatives clearing organiza-
tion shall establish— 
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‘‘(I) appropriate admission and 
continuing eligibility standards (in-
cluding sufficient financial resources 
and operational capacity to meet obli-
gations arising from participation in 
the derivatives clearing organization) 
for members of and participants in 
the organization; and 
‘‘(II) appropriate standards for 
determining eligibility of agreements, 
contracts, or transactions submitted 
to the derivatives clearing organiza-
tion for clearing. 
‘‘(ii) The derivatives clearing organi-
zation shall have procedures in place to 
verify that participation and membership 
requirements are met on an ongoing basis. 
‘‘(iii) The derivatives clearing organi-
zation’s participation and membership re-
quirements shall be objective, publicly dis-
closed, and permit fair and open access. 
‘‘(iv) The rules of the derivatives 
clearing organization shall provide for ac-
ceptance of a standardized swap regardless 
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