SEC. 356. CAPITAL REQUIREMENTS FOR NON-BANK SWAP 
DEALERS. 
Section 4s(e) of the Commodity Exchange Act (7 
U.S.C. 6s(e)) is amended— 
(1) in paragraph (2)(B), by inserting ‘‘, in con-
sultation with the prudential regulators and the Se-
curities and Exchange Commission,’’ before ‘‘shall’’; 
and 
(2) in paragraph (3)(D)— 
(A) in clause (ii), by striking ‘‘shall, to the 
maximum extent practicable,’’ and inserting 
‘‘shall’’; and 
(B) by adding at the end the following: 
‘‘(iii) FINANCIAL
MODELS.—To the 
extent that swap dealers and major swap 
participants that are banks are permitted 
to use financial models approved by the 
prudential regulators or the Securities and 
Exchange Commission to calculate min-
imum capital requirements and minimum 
initial and variation margin requirements, 
including the use of non-cash collateral, 
the Commission shall, in consultation with 
the prudential regulators and the Securi-
ties and Exchange Commission, permit the 
use of comparable financial models by 
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swap dealers and major swap participants 
that are not banks.’’. 
SEC. 357. HARMONIZATION WITH THE JUMPSTART OUR 
BUSINESS STARTUPS ACT. 
Within 90 days after the date of the enactment of 
this Act, the Commodity Futures Trading Commission 
shall— 
(1) revise section 4.7(b) of title 17, Code of 
Federal Regulations, in the matter preceding para-
graph (1), to read as follows: 
‘‘(b) Relief available to commodity pool operators. 
Upon filing the notice required by paragraph (d) of this 
section, and subject to compliance with the conditions 
specified in paragraph (d) of this section, any registered 
commodity pool operator who sells participations in a pool 
solely to qualified eligible persons in an offering which 
qualifies for exemption from the registration requirements 
of the Securities Act pursuant to section 4(2) of that Act 
or pursuant to Regulation S, 17 CFR 230.901 et seq., and 
any bank registered as a commodity pool operator in con-
nection with a pool that is a collective trust fund whose 
securities are exempt from registration under the Securi-
ties Act pursuant to section 3(a)(2) of that Act and are 
sold solely to qualified eligible persons, may claim any or 
all of the following relief with respect to such pool:’’; and 
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(2) revise section 4.13(a)(3)(i) of such title to 
read as follows: 
‘‘(i) Interests in the pool are exempt from registration 
under the Securities Act of 1933, and such interests are 
offered and sold pursuant to section 4 of the Securities 
Act of 1933 and the regulations thereunder;’’. 
SEC. 358. BONA FIDE HEDGE DEFINED TO PROTECT END 
USER RISK MANAGEMENT NEEDS. 
Section 4a(c) of the Commodity Exchange Act (7 
U.S.C. 6a(c)) is amended— 
(1) in paragraph (1)— 
(A) by striking ‘‘may’’ and inserting 
‘‘shall’’; and 
(B) by striking ‘‘future for which’’ and in-
serting ‘‘future, to be determined by the Com-
mission, for which either an appropriate swap is 
available or’’; 
(2) in paragraph (2)— 
(A) in the matter preceding subparagraph 
(A), by striking ‘‘subsection (a)(2)’’ and all that 
follows through ‘‘position as’’ and inserting 
‘‘paragraphs (2) and (5) of subsection (a) for 
swaps, contracts of sale for future delivery, or 
options on the contracts or commodities, a bona 
fide hedging transaction or position is’’; and 
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(B) in subparagraph (A)(ii), by striking 
‘‘of risks’’ and inserting ‘‘or management of 
current or anticipated risks’’; and 
(3) by adding at the end the following: 
‘‘(3) The Commission may further define, by 
rule or regulation, what constitutes a bona fide 
hedging transaction, provided that the rule or regu-
lation is consistent with the requirements of sub-
paragraphs (A) and (B) of paragraph (2).’’. 
SEC. 359. CROSS-BORDER REGULATION OF DERIVATIVES 
TRANSACTIONS. 
(a) RULES REQUIRED.—Within 180 days after the 
date of the enactment of this Act, the Commodity Futures 
Trading Commission shall issue rules that address— 
(1) the nature of the connections to the United 
States that require a non-U.S. person to register as 
a swap dealer or major swap participant under the 
Commodity Exchange Act and the regulations issued 
under such Act; 
(2) which of the United States swaps require-
ments shall apply to the swap activities of non-U.S. 
persons, U.S. persons, and their branches, agencies, 
subsidiaries, and affiliates outside of the United 
States and the extent to which such requirements 
shall apply; and 
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(3) the circumstances under which a non-U.S. 
person in compliance with the regulatory require-
ments of a foreign jurisdiction shall be exempt from 
United States swaps requirements. 
(b) RULE IN ACCORDANCE WITH APA REQUIRED.— 
No guidance, memorandum of understanding, or any such 
other agreement may satisfy the requirement to issue a 
rule from the Commission in accordance with section 553 
of title 5, United States Code. 
(c) GENERAL APPLICATION TO COUNTRIES OR AD-
MINISTRATIVE REGIONS HAVING 9 LARGEST MARKETS.— 
(1) GENERAL APPLICATION.—In issuing rules 
under this section, the Commission shall provide 
that a non-U.S. person in compliance with the swaps 
regulatory requirements of a country or administra-
tive region that has 1 of the 9 largest swap markets 
by notional amount in the calendar year preceding 
issuance of such rules, or other foreign jurisdiction 
as determined by the Commission, shall be exempt 
from United States swaps requirements in accord-
ance with the schedule set forth in paragraph (2), 
unless the Commission determines that the regu-
latory requirements of the country or administrative 
region or other foreign jurisdiction are not broadly 
equivalent to United States swaps requirements. 
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(2) EFFECTIVE DATE SCHEDULE.—The exemp-
tion described in paragraph (1) and set forth under 
the rules required by this section shall apply to per-
sons or transactions relating to or involving— 
(A) countries or administrative regions de-
scribed in such paragraph, or any other foreign 
jurisdiction as determined by the Commission, 
accounting for the 5 largest swap markets by 
notional amount in the calendar year preceding 
issuance of such rules, on the date on which 
final rules are issued under this section; and 
(B) the remaining countries or administra-
tive regions described in such paragraph, and 
any other foreign jurisdiction as determined by 
the Commission, 1 year after the date on which 
such rules are issued. 
(3) CRITERIA.—In such rules, the Commission 
shall establish criteria for determining that 1 or 
more categories of regulatory requirements of a 
country or administrative region described in para-
graph (1) or other foreign jurisdiction is not broadly 
equivalent to United States swaps requirements and 
shall determine the appropriate application of cer-
tain United States swap requirements to persons or 
transactions relating to or involving the country or 
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administrative region or other foreign jurisdiction. 
The criteria shall include the scope and objectives of 
the regulatory requirements of a country or adminis-
trative region described in paragraph (1) or other 
foreign jurisdiction as well as the effectiveness of the 
supervisory compliance program administered, and 
the enforcement authority exercised, by the country 
or administrative region or other foreign jurisdiction, 
and such other factors as the Commission, by rule, 
determines to be necessary or appropriate in the 
public interest. 
(4) REQUIRED ASSESSMENT.—Beginning on the 
date on which final rules are issued under this sec-
tion, the Commission shall begin to assess the regu-
latory requirements of countries or administrative 
regions described in paragraph (1), as the Commis-
sion determines appropriate, in accordance with the 
criteria established pursuant to this subsection, to 
determine if 1 or more categories of regulatory re-
quirements of such a country or administrative re-
gion or other foreign jurisdiction is not broadly 
equivalent to United States swaps requirements. 
(d) REPORT
TO CONGRESS.—If the Commission 
makes the determination described in subsection (c)(1) 
that the regulatory requirements of a country or adminis-
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trative region described in such subsection or other foreign 
jurisdiction are not broadly equivalent to United States 
swaps requirements, the Commission shall articulate the 
basis for the determination in a written report transmitted 
to the Committee on Agriculture of the House of Rep-
resentatives and the Committee on Agriculture, Nutrition, 
and Forestry of the Senate within 30 days of the deter-
mination. The determination shall not be effective until 
the transmission of the report. 
(e) DEFINITIONS.—As used in this section and for 
purposes of the rules issued pursuant to this section, the 
following definitions apply: 
(1) The term ‘‘U.S. person’’— 
(A) means— 
(i) any natural person resident in the 
United States; 
(ii) 
any 
partnership, 
corporation, 
trust, or other legal person organized or 
incorporated under the laws of the United 
States or having its principal place of busi-
ness in the United States; 
(iii) any account (whether discre-
tionary or non-discretionary) of a U.S. per-
son; and 
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(iv) any other person as the Commis-
sion may further define to more effectively 
carry out the purposes of this section; and 
(B) does not include the International 
Monetary Fund, the International Bank for Re-
construction and Development, the Inter-Amer-
ican Development Bank, the Asian Development 
Bank, the African Development Bank, the 
United Nations, their agencies and pension 
plans, and any other similar international orga-
nizations and their agencies and pension plans. 
(2) The term ‘‘United States swaps require-
ments’’ means the provisions relating to swaps con-
tained in the Commodity Exchange Act (7 U.S.C. 1a 
et seq.) that were added by title VII of the Dodd- 
Frank Wall Street Reform and Consumer Protection 
Act, and any rules or regulations prescribed by the 
Commodity Futures Trading Commission pursuant 
to such provisions. 
(f) CONFORMING AMENDMENT.—Section 4(c)(1)(A) 
of the Commodity Exchange Act (7 U.S.C. 6(c)(1)(A)) is 
amended by inserting ‘‘or except as necessary to effectuate 
section 361 of the Customer Protection and End User Re-
lief Act,’’ after ‘‘to grant exemptions,’’. 
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Subtitle F—Effective Date 
SEC. 371. EFFECTIVE DATE. 
The amendments made by this title shall take effect 
as if enacted on July 21, 2010. 
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Union Calendar No. 348 
113TH CONGRESS 
2D SESSION 
H. R. 4413 
[Report No. 113–469] 
A BILL 
To reauthorize the Commodity Futures Trading 
Commission, to better protect futures customers, 
to provide end users with market certainty, to 
make basic reforms to ensure transparency and 
accountability at the Commission, to help farm-
ers, ranchers, and end users manage risks to 
help keep consumer costs low, and for other pur-
poses. 
JUNE 5, 2014 
Committed to the Committee of the Whole House on the 
State of the Union and ordered to be printed 
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