616 
of the organization with respect to physical 
deliveries, including how risks from these 
obligations shall be identified and man-
aged. 
‘‘(F) TREATMENT OF FUNDS.— 
‘‘(i) The derivatives clearing organiza-
tion shall have standards and procedures 
designed to protect and ensure the safety 
of member and participant funds and as-
sets. 
‘‘(ii) The derivatives clearing organi-
zation shall hold member and participant 
funds and assets in a manner whereby risk 
of loss or of delay in the access of the or-
ganization to the assets and funds is mini-
mized. 
‘‘(iii) Assets and funds invested by the 
derivatives clearing organization shall be 
held in instruments with minimal credit, 
market, and liquidity risks. 
‘‘(G) 
DEFAULT
RULES
AND
PROCE-
DURES.— 
‘‘(i) The derivatives clearing organiza-
tion shall have rules and procedures de-
signed to allow for the efficient, fair, and
617 
safe management of events when members 
or participants become insolvent or other-
wise default on their obligations to the or-
ganization. 
‘‘(ii) The default procedures of the de-
rivatives clearing organization shall be 
clearly stated, and they shall ensure that 
the organization can take timely action to 
contain losses and liquidity pressures and 
to continue meeting the obligations of the 
organization. 
‘‘(iii) The default procedures shall be 
publicly available. 
‘‘(H) RULE ENFORCEMENT.—The deriva-
tives clearing organization shall— 
‘‘(i) maintain adequate arrangements 
and resources for the effective monitoring 
and enforcement of compliance with rules 
of the organization and for resolution of 
disputes; and 
‘‘(ii) have the authority and ability to 
discipline, limit, suspend, or terminate the 
activities of a member or participant for 
violations of rules of the organization.
618 
‘‘(I) SYSTEM
SAFEGUARDS.—The deriva-
tives clearing organization shall— 
‘‘(i) establish and maintain a program 
of risk analysis and oversight to identify 
and minimize sources of operational risk 
through the development of appropriate 
controls and procedures, and the develop-
ment of automated systems, that are reli-
able, secure, and have adequate scalable 
capacity; 
‘‘(ii) establish and maintain emer-
gency procedures, backup facilities, and a 
plan for disaster recovery that allows for 
the timely recovery and resumption of op-
erations and the fulfillment of the respon-
sibilities and obligations of the organiza-
tion; and 
‘‘(iii) periodically conduct tests to 
verify that backup resources are sufficient 
to ensure continued order processing and 
trade matching, price reporting, market 
surveillance, and maintenance of a com-
prehensive and accurate audit trail. 
‘‘(J) REPORTING.—The derivatives clear-
ing organization shall provide to the Commis-
619 
sion all information necessary for the Commis-
sion to conduct oversight of the organization. 
‘‘(K) RECORDKEEPING.—The derivatives 
clearing organization shall maintain records of 
all activities related to the business of the orga-
nization as a derivatives clearing organization 
in a form and manner acceptable to the Com-
mission for a period of 5 years. 
‘‘(L) PUBLIC INFORMATION.— 
‘‘(i) The derivatives clearing organiza-
tion shall provide market participants with 
sufficient information to identify and 
evaluate accurately the risks and costs as-
sociated with using the services of the or-
ganization. 
‘‘(ii) The derivatives clearing organi-
zation shall make information concerning 
the rules and operating procedures gov-
erning the clearing and settlement systems 
(including default procedures) of the orga-
nization available to market participants. 
‘‘(iii) The derivatives clearing organi-
zation shall disclose publicly and to the 
Commission information concerning—
620 
‘‘(I) the terms and conditions of 
contracts, agreements, and trans-
actions cleared and settled by the or-
ganization; 
‘‘(II) clearing and other fees that 
the organization charges the members 
of, and participants in, the organiza-
tion; 
‘‘(III) the margin-setting method-
ology and the size and composition of 
the financial resource package of the 
organization; 
‘‘(IV) other information relevant 
to participation in the settlement and 
clearing activities of the organization; 
and 
‘‘(V) daily settlement prices, vol-
ume, and open interest for all con-
tracts settled or cleared by the organi-
zation. 
‘‘(M) INFORMATION-SHARING.—The de-
rivatives clearing organization shall— 
‘‘(i) enter into and abide by the terms 
of all appropriate and applicable domestic
621 
and 
international 
information-sharing 
agreements; and 
‘‘(ii) use relevant information obtained 
from the agreements in carrying out the 
risk management program of the organiza-
tion. 
‘‘(N) ANTITRUST
CONSIDERATIONS.—The 
derivatives clearing organization shall avoid— 
‘‘(i) adopting any rule or taking any 
action that results in any unreasonable re-
straint of trade; or 
‘‘(ii) imposing any material anti-
competitive burden. 
‘‘(O) 
GOVERNANCE
FITNESS
STAND-
ARDS.— 
‘‘(i) The derivatives clearing organiza-
tion shall establish governance arrange-
ments that are transparent in order to ful-
fill public interest requirements and to 
support the objectives of the owners of, 
and participants in, the organization. 
‘‘(ii) The derivatives clearing organi-
zation shall establish and enforce appro-
priate fitness standards for the directors, 
members of any disciplinary committee,
622 
and members of the organization, and any 
other persons with direct access to the set-
tlement or clearing activities of the organi-
zation, including any parties affiliated with 
any of the persons described in this sub-
paragraph. 
‘‘(P) CONFLICTS OF INTEREST.—The de-
rivatives clearing organization shall establish 
and enforce rules to minimize conflicts of inter-
est in the decision-making process of the orga-
nization and establish a process for resolving 
the conflicts of interest. 
‘‘(Q) COMPOSITION OF THE BOARDS.—The 
derivatives clearing organization shall ensure 
that the composition of the governing board or 
committee includes market participants. 
‘‘(R) LEGAL RISK.—The derivatives clear-
ing organization shall have a well founded, 
transparent, and enforceable legal framework 
for each aspect of its activities.’’. 
(4) Section 5b of such Act (7 U.S.C. 7a–1) is 
further amended by adding after subsection (i), as 
added by this section, the following: 
‘‘(j) REPORTING.—
623 
‘‘(1) IN GENERAL.—A derivatives clearing orga-
nization that clears swaps shall provide to the Com-
mission all information determined by the Commis-
sion to be necessary to perform the responsibilities 
of the Commission under this Act. The Commission 
shall adopt data collection and maintenance require-
ments for swaps cleared by derivatives clearing orga-
nizations that are comparable to the corresponding 
requirements for swaps accepted by swap reposi-
tories and swaps traded on swap execution facilities. 
The Commission shall share the information, upon 
request, with the Board, the Securities and Ex-
change Commission, the appropriate Federal bank-
ing agencies, the Financial Services Oversight Coun-
cil, and the Department of Justice or other persons 
the Commission deems appropriate, including for-
eign financial supervisors (including foreign futures 
authorities), foreign central banks, and foreign min-
istries that comply with the provisions of section 8. 
‘‘(2) PUBLIC
INFORMATION.—A derivatives 
clearing organization that clears swaps shall provide 
to the Commission, or its designee, such information 
as is required by, and in a form and at a frequency 
to be determined by, the Commission, in order to
624 
comply with the public reporting requirements con-
tained in section 8(j). 
‘‘(3) A derivatives clearing organization shall 
keep any such books and records relating to swaps 
defined in section 1a(35)(A)(v) open to inspection 
and examination by the Securities and Exchange 
Commission.’’. 
(5) Section 8(e) of such Act (7 U.S.C. 12(e)) 
is amended in the last sentence by inserting ‘‘central 
bank and ministries’’ after ‘‘department’’ each place 
it appears. 
(c) LEGAL CERTAINTY FOR IDENTIFIED BANKING 
PRODUCTS.— 
(1) REPEAL.—Sections 402(d), 404, 407, 
408(b), and 408(c)(2) of the Legal Certainty for 
Bank Products Act of 2000 (7 U.S.C. 27(d), 27b, 
27e, 27f(b), and 27f(c)(2)) are repealed. 
(2) LEGAL
CERTAINTY.—Section 403 of the 
Legal Certainty for Bank Products Act of 2000 (7 
U.S.C. 27a) is amended to read as follows: 
‘‘SEC. 403. EXCLUSION OF IDENTIFIED BANKING PRODUCT. 
‘‘(a) EXCLUSION.—Except as provided in subsection 
(b) or (c)— 
‘‘(1) the Commodity Exchange Act shall not 
apply to, and the Commodity Futures Trading Com-
625 
mission shall not exercise regulatory authority under 
such Act with respect to, an identified banking prod-
uct; and 
‘‘(2) the definitions of ‘security-based swap’ in 
section 3(a)(68) of the Securities Exchange Act of 
1934 and ‘security-based swap agreement’ in section 
3(a)(76) of the Securities Exchange Act of 1934 do 
not include any identified banking product. 
‘‘(b) EXCEPTION.—An appropriate Federal banking 
agency may except an identified banking product of a 
bank under its regulatory jurisdiction from the exclusions 
in subsection (a) if the agency determines, in consultation 
with the Commodity Futures Trading Commission and the 
Securities and Exchange Commission, that the product— 
‘‘(1) would meet the definition of swap in sec-
tion 1a(35) of the Commodity Exchange Act (7 
U.S.C. 1a(35)) or security-based swap in section 
3(a)(68) of the Securities and Exchange Act of 
1934; and 
‘‘(2) has become known to the trade as a swap 
or security-based swap, or otherwise has been struc-
tured as an identified banking product for the pur-
pose of evading the provisions of the Commodity Ex-
change Act (7 U.S.C. 1 et seq.), the Securities Act
626 
of 1933 (15 U.S.C. 77a et seq.), or the Securities 
Exchange Act of 1934 (15 U.S.C. 78a et seq.). 
‘‘(c) EXCEPTION.—The exclusions in subsection (a) 
shall not apply to an identified banking product that— 
‘‘(1) is a product of a bank that is not under 
the regulatory jurisdiction of an appropriate Federal 
banking agency; 
‘‘(2) meets the definition of swap in section 
1a(35) of the Commodity Exchange Act or security- 
based swap in section 3(a)(68) of the Securities and 
Exchange Act of 1934; and 
‘‘(3) has become known to the trade as a swap 
or security-based swap, or otherwise has been struc-
tured as an identified banking product for the pur-
pose of evading the provisions of the Commodity Ex-
change Act (7 U.S.C. 1 et seq.), the Securities Act 
of 1933 (15 U.S.C. 77a et seq.), or the Securities 
Exchange Act of 1934 (15 U.S.C. 78a et seq.).’’. 
SEC. 3104. PUBLIC REPORTING OF AGGREGATE SWAP 
DATA. 
Section 8 of the Commodity Exchange Act (7 U.S.C. 
12) is amended by adding at the end the following: 
‘‘(j) PUBLIC
REPORTING
OF
AGGREGATE
SWAP 
DATA.—
627 
‘‘(1) IN GENERAL.—The Commission, or a per-
son designated by the Commission pursuant to para-
graph (2), shall make available to the public, in a 
manner that does not disclose the business trans-
actions and market positions of any person, aggre-
gate data on swap trading volumes and positions 
from the sources set forth in paragraph (3). 
‘‘(2) DESIGNEE
OF
THE
COMMISSION.—The 
Commission may designate a derivatives clearing or-
ganization or a swap repository to carry out the 
public reporting described in paragraph (1). 
‘‘(3) SOURCES OF INFORMATION.—The sources 
of the information to be publicly reported as de-
scribed in paragraph (1) are— 
‘‘(A) derivatives clearing organizations 
pursuant to section 5b(j)(2); 
‘‘(B) swap repositories pursuant to section 
21(c)(3); and 
‘‘(C) reports received by the Commission 
pursuant to section 4r.’’. 
SEC. 3105. SWAP REPOSITORIES. 
The Commodity Exchange Act (7 U.S.C. 1 et seq.) 
is amended by inserting after section 20 the following: 
‘‘SEC. 21. SWAP REPOSITORIES. 
‘‘(a) REGISTRATION REQUIREMENT.—
628 
‘‘(1) IN GENERAL.—It shall be unlawful for any 
person, unless registered with the Commission, di-
rectly or indirectly to make use of the mails or any 
means or instrumentality of interstate commerce to 
perform the functions of a swap repository. 
‘‘(2) INSPECTION
AND
EXAMINATION.—Reg-
istered swap repositories shall be subject to inspec-
tion and examination by any representative of the 
Commission. 
‘‘(b) STANDARD SETTING.— 
‘‘(1) DATA IDENTIFICATION.—The Commission 
shall prescribe standards that specify the data ele-
ments for each swap that shall be collected and 
maintained by each registered swap repository. 
‘‘(2) DATA COLLECTION AND MAINTENANCE.— 
The Commission shall prescribe data collection and 
data maintenance standards for swap repositories. 
‘‘(3) COMPARABILITY.—The standards pre-
scribed by the Commission under this subsection 
shall be comparable to the data standards imposed 
by the Commission on derivatives clearing organiza-
tions that clear swaps. 
‘‘(c) DUTIES.—A swap repository shall— 
‘‘(1) accept data prescribed by the Commission 
for each swap under subsection (b);
629 
‘‘(2) maintain the data in such form and man-
ner and for such period as may be required by the 
Commission; 
‘‘(3) provide to the Commission, or its designee, 
such information as is required by, and in a form 
and at a frequency to be determined by, the Com-
mission, in order to comply with the public reporting 
requirements contained in section 8(j); and 
‘‘(4) make available, on a confidential basis 
pursuant to section 8, all data obtained by the swap 
repository, including individual counterparty trade 
and position data, to the Commission, the appro-
priate Federal banking agencies, the Financial Serv-
ices Oversight Council, the Securities and Exchange 
Commission, and the Department of Justice or to 
other persons the Commission deems appropriate, 
including foreign financial supervisors (including for-
eign futures authorities), foreign central banks, and 
foreign ministries. 
‘‘(d) RULES.—Not later than 1 year after the date 
of the enactment of the Derivative Markets Transparency 
and Accountability Act of 2009, the Commission shall 
adopt rules governing persons that are registered under 
this section, including rules that specify the data elements 
that shall be collected and maintained.
630 
‘‘(e) EXEMPTIONS.—The Commission may exempt, 
conditionally or unconditionally, a swap repository from 
the requirements of this section if the Commission finds 
that the swap repository is subject to comparable, com-
prehensive supervision and regulation on a consolidated 
basis by the Securities and Exchange Commission, a Pru-
dential Regulator or the appropriate governmental au-
thorities in the organization’s home country.’’. 
SEC. 3106. REPORTING AND RECORDKEEPING. 
The Commodity Exchange Act (7 U.S.C. 1 et seq.) 
is amended by inserting after section 4q the following: 
‘‘SEC. 4r. REPORTING AND RECORDKEEPING FOR CERTAIN 
SWAPS. 
‘‘(a) IN GENERAL.—Any person who enters into a 
swap and— 
‘‘(1) did not have the swap cleared in accord-
ance with section 2(j)(1); and 
‘‘(2) did not have data regarding the swap ac-
cepted by a swap repository in accordance with rules 
(including timeframes) adopted by the Commission 
under section 21, 
shall meet the requirements in subsection (b). 
‘‘(b) REPORTS.—Any person described in subsection 
(a) shall—
631 
‘‘(1) make such reports in such form and man-
ner and for such period as the Commission shall pre-
scribe by rule or regulation regarding the swaps held 
by the person; and 
‘‘(2) keep books and records pertaining to the 
swaps held by the person in such form and manner 
and for such period as may be required by the Com-
mission, which books and records shall be open to 
inspection by any representative of the Commission, 
an appropriate Federal banking agency, the Securi-
ties and Exchange Commission, the Financial Serv-
ices Oversight Council, and the Department of Jus-
tice. 
‘‘(c) IDENTICAL DATA.—In adopting rules under this 
section, the Commission shall require persons described in 
subsection (a) to report the same or a more comprehensive 
set of data than the Commission requires swap reposi-
tories to collect under section 21.’’. 
SEC. 3107. REGISTRATION AND REGULATION OF SWAP 
DEALERS AND MAJOR SWAP PARTICIPANTS. 
The Commodity Exchange Act (7 U.S.C. 1 et seq.) 
is amended by inserting after section 4r (as added by sec-
tion 3106) the following:
632 
‘‘SEC. 4s. REGISTRATION AND REGULATION OF SWAP DEAL-
ERS AND MAJOR SWAP PARTICIPANTS. 
‘‘(a) REGISTRATION.— 
‘‘(1) It shall be unlawful for any person to act 
as a swap dealer unless the person is registered as 
a swap dealer with the Commission. 
‘‘(2) It shall be unlawful for any person to act 
as a major swap participant unless the person is 
registered as a major swap participant with the 
Commission. 
‘‘(b) REQUIREMENTS.— 
‘‘(1) IN GENERAL.—A person shall register as 
a swap dealer or major swap participant by filing a 
registration application with the Commission. 
‘‘(2) CONTENTS.—The application shall be 
made in such form and manner as prescribed by the 
Commission, giving any information and facts as the 
Commission may deem necessary concerning the 
business in which the applicant is or will be engaged. 
The person, when registered as a swap dealer or 
major swap participant, shall continue to report and 
furnish to the Commission such information per-
taining to the person’s business as the Commission 
may require.
633 
‘‘(3) EXPIRATION.—Each registration shall ex-
pire at such time as the Commission may by rule or 
regulation prescribe. 
‘‘(4) RULES.—Except as provided in sub-
sections (c), (d) and (e), the Commission may pre-
scribe rules applicable to swap dealers and major 
swap participants, including rules that limit the ac-
tivities of swap dealers and major swap participants. 
Except with regard to subsection (d)(1)(A), the 
Commission may provide conditional or uncondi-
tional exemptions from some or all of the rules or 
requirements prescribed under this section for swap 
dealers and major swap participants. 
‘‘(5) TRANSITION.—Rules adopted under this 
section shall provide for the registration of swap 
dealers and major swap participants no later than 1 
year after the effective date of the Derivative Mar-
kets Transparency and Accountability Act of 2009. 
‘‘(6) STATUTORY
DISQUALIFICATION.—Except 
to the extent otherwise specifically provided by rule, 
regulation, or order, it shall be unlawful for a swap 
dealer or a major swap participant to permit any 
person associated with a swap dealer or a major 
swap participant who is subject to a statutory dis-
qualification to effect or be involved in effecting
634 
swaps on behalf of the swap dealer or major swap 
participant, if the swap dealer or major swap partici-
pant knew, or in the exercise of reasonable care 
should have known, of the statutory disqualification. 
‘‘(c) RULES.— 
‘‘(1) IN GENERAL.—Not later than 1 year after 
the date of the enactment of this section, the Com-
mission shall adopt rules for persons that are reg-
istered as swap dealers or major swap participants 
under this section. 
‘‘(2) EXCEPTION FOR PRUDENTIAL REQUIRE-
MENTS.—The Commission shall not prescribe rules 
imposing prudential requirements on swap dealers or 
major swap participants for which there is a Pru-
dential Regulator. This provision shall not be con-
strued as limiting the authority of the Commission 
to prescribe appropriate business conduct, reporting, 
and recordkeeping requirements to protect investors. 
‘‘(d) CAPITAL AND MARGIN REQUIREMENTS.— 
‘‘(1) IN GENERAL.— 
‘‘(A) BANK
SWAP
DEALERS
AND
MAJOR 
SWAP
PARTICIPANTS.—Each registered swap 
dealer and major swap participant for which 
there is a Prudential Regulator shall meet such 
minimum capital requirements and minimum
635 
initial and variation margin requirements as the 
Prudential Regulators shall by rule or regula-
tion jointly prescribe that: 
‘‘(i) help ensure the safety and sound-
ness of the swap dealer or major swap par-
ticipant; and 
‘‘(ii) are appropriate for the risk asso-
ciated with the non-cleared swaps held as 
a swap dealer or major swap participant. 
‘‘(B) NON-BANK
SWAP
DEALERS
AND 
MAJOR SWAP PARTICIPANTS.—Each registered 
swap dealer and major swap participant for 
which there is not a Prudential Regulator shall 
meet such minimum capital requirements and 
minimum initial and variation margin require-
ments as the Commission shall by rule or regu-
lation prescribe that— 
‘‘(i) help ensure the safety and sound-
ness of the swap dealer or major swap par-
ticipant; and 
‘‘(ii) are appropriate for the risk asso-
ciated with the non-cleared swaps held as 
a swap dealer or major swap participant. 
‘‘(2) RULES.—
636 
‘‘(A) BANK
SWAP
DEALERS
AND
MAJOR 
SWAP
PARTICIPANTS.—No later than 1 year 
after the date of the enactment of the Deriva-
tive Markets Transparency and Accountability 
Act of 2009, the Prudential Regulators, in con-
sultation with the Commission, shall jointly 
adopt rules imposing capital and margin re-
quirements under this subsection for swap deal-
ers and major swap participants, with respect 
to their activities as a swap dealer or major 
swap participant for which there is a Prudential 
Regulator. 
‘‘(B) NON-BANK
SWAP
DEALERS
AND 
MAJOR SWAP PARTICIPANTS.—No later than 1 
year after the date of the enactment of the De-
rivative Markets Transparency and Account-
ability Act of 2009, the Commission shall adopt 
rules imposing capital and margin requirements 
under this subsection for swap dealers and 
major swap participants for which there is no 
Prudential Regulator. 
‘‘(3) AUTHORITY.—Nothing in this section shall 
limit the authority of the Commission to set capital 
requirements for a registered futures commission
637 
merchant or introducing broker in accordance with 
section 4f. 
‘‘(e) REPORTING AND RECORDKEEPING.— 
‘‘(1) IN GENERAL.—Each registered swap deal-
er and major swap participant— 
‘‘(A) shall make such reports as are pre-
scribed by the Commission by rule or regulation 
regarding the transactions and positions and fi-
nancial condition of the person; 
‘‘(B) for which— 
‘‘(i) there is a Prudential Regulator, 
shall keep books and records of all activi-
ties related to its business as a swap dealer 
or major swap participant in such form 
and manner and for such period as may be 
prescribed by the Commission by rule or 
regulation; 
‘‘(ii) there is no Prudential Regulator, 
shall keep books and records in such form 
and manner and for such period as may be 
prescribed by the Commission by rule or 
regulation; 
‘‘(C) shall keep the books and records open 
to inspection and examination by any represent-
ative of the Commission; and
638 
‘‘(D) shall keep any such books and 
records relating to swaps defined in section 
1a(35)(A)(v) open to inspection and examina-
tion by the Securities and Exchange Commis-
sion. 
‘‘(2) RULES.—No later than 1 year after the 
date of the enactment of the Derivative Markets 
Transparency and Accountability Act of 2009, the 
Commission shall adopt rules governing reporting 
and recordkeeping for swap dealers and major swap 
participants. 
‘‘(f) DAILY TRADING RECORDS.— 
‘‘(1) IN GENERAL.—Each registered swap deal-
er and major swap participant shall maintain daily 
trading records of its swaps and all related records 
(including related cash or forward transactions) and 
recorded communications including but not limited 
to electronic mail, instant messages, and recordings 
of telephone calls, for such period as may be pre-
scribed by the Commission by rule or regulation. 
‘‘(2) INFORMATION REQUIREMENTS.—The daily 
trading records shall include such information as the 
Commission shall prescribe by rule or regulation. 
‘‘(3) CUSTOMER
RECORDS.—Each registered 
swap dealer and major swap participant shall main-
639 
tain daily trading records for each customer or 
counterparty in such manner and form as to be 
identifiable with each swap transaction. 
‘‘(4) AUDIT TRAIL.—Each registered swap deal-
er and major swap participant shall maintain a com-
plete audit trail for conducting comprehensive and 
accurate trade reconstructions. 
‘‘(5) RULES.—No later than 1 year after the 
date of the enactment of the Derivative Markets 
Transparency and Accountability Act of 2009, the 
Commission shall adopt rules governing daily trad-
ing records for swap dealers and major swap partici-
pants. 
‘‘(g) BUSINESS CONDUCT STANDARDS.— 
‘‘(1) IN GENERAL.—Each registered swap deal-
er and major swap participant shall conform with 
business conduct standards as may be prescribed by 
the Commission by rule or regulation addressing— 
‘‘(A) fraud, manipulation, and other abu-
sive practices involving swaps (including swaps 
that are offered but not entered into); 
‘‘(B) diligent supervision of its business as 
a swap dealer; 
‘‘(C) adherence to all applicable position 
limits; and
640 
‘‘(D) such other matters as the Commis-
sion shall determine to be necessary or appro-
priate. 
‘‘(2) BUSINESS
CONDUCT
REQUIREMENTS.— 
Business conduct requirements adopted by the Com-
mission shall— 
‘‘(A) establish the standard of care for a 
swap dealer or major swap participant to verify 
that any counterparty meets the eligibility 
standards for an eligible contract participant; 
‘‘(B) require disclosure by the swap dealer 
or major swap participant to any counterparty 
to the transaction (other than a swap dealer or 
major swap participant) of— 
‘‘(i) information about the material 
risks and characteristics of the swap; 
‘‘(ii) for cleared swaps, upon the re-
quest of the counterparty, the daily mark 
from the appropriate derivatives clearing 
organization, and for non-cleared swaps, 
upon request of the counterparty, the daily 
mark of the swap dealer or major swap 
participant; and 
‘‘(iii) any other material incentives or 
conflicts of interest that the swap dealer or
641 
major swap participant may have in con-
nection with the swap; and 
‘‘(C) establish such other standards and 
requirements as the Commission may determine 
are necessary or appropriate in the public inter-
est, for the protection of investors, or otherwise 
in furtherance of the purposes of this Act. 
‘‘(3) RULES.—The Commission shall prescribe 
rules under this subsection governing business con-
duct standards for swap dealers and major swap 
participants no later than 1 year after the date of 
the enactment of the Derivative Markets Trans-
parency and Accountability Act of 2009. 
‘‘(h) DOCUMENTATION STANDARDS.— 
‘‘(1) IN GENERAL.—Each registered swap deal-
er and major swap participant shall conform with 
standards, as may be prescribed by the Commission 
by rule or regulation, addressing timely and accurate 
confirmation, processing, netting, documentation, 
and valuation of all swaps. 
‘‘(2) RULES.—No later than 1 year after the 
date of the enactment of the Derivative Markets 
Transparency and Accountability Act of 2009, the 
Commission shall adopt rules governing the stand-
642 
ards described in paragraph (1) for swap dealers 
and major swap participants. 
‘‘(i) DEALER RESPONSIBILITIES.—Each registered 
swap dealer and major swap participant at all times shall 
comply with the following requirements: 
‘‘(1) MONITORING
OF
TRADING.—The swap 
dealer or major swap participant shall monitor its 
trading in swaps to prevent violations of applicable 
position limits. 
‘‘(2) DISCLOSURE
OF
GENERAL
INFORMA-
TION.—The swap dealer or major swap participant 
shall disclose to the Commission or to the Prudential 
Regulator for the swap dealer or major swap partici-
pant, as applicable, information concerning— 
‘‘(A) terms and conditions of its swaps; 
‘‘(B) swap trading operations, mechanisms, 
and practices; 
‘‘(C) financial integrity protections relating 
to swaps; and 
‘‘(D) other information relevant to its trad-
ing in swaps. 
‘‘(3) ABILITY TO OBTAIN INFORMATION.—The 
swap dealer or major swap participant shall— 
‘‘(A) establish and enforce internal systems 
and procedures to obtain any necessary infor-
643 
mation to perform any of the functions de-
scribed in this section; and 
‘‘(B) provide the information to the Com-
mission or to the Prudential Regulator for the 
swap dealer or major swap participant, as ap-
plicable, upon request. 
‘‘(4) CONFLICTS
OF
INTEREST.—The swap 
dealer and major swap participant shall implement 
conflict-of-interest systems and procedures that— 
‘‘(A) establish structural and institutional 
safeguards to assure that the activities of any 
person within the firm relating to research or 
analysis of the price or market for any com-
modity are separated by appropriate informa-
tional partitions within the firm from the re-
view, pressure, or oversight of those whose in-
volvement in trading or clearing activities might 
potentially bias their judgment or supervision; 
and 
‘‘(B) address such other issues as the 
Commission determines appropriate. 
‘‘(5) ANTITRUST CONSIDERATIONS.—The swap 
dealer or major swap participant shall avoid—
644 
‘‘(A) adopting any processes or taking any 
actions that result in any unreasonable re-
straints of trade; or 
‘‘(B) imposing any material anticompeti-
tive burden on trading.’’. 
SEC. 3108. CONFLICTS OF INTEREST. 
Section 4d of the Commodity Exchange Act (7 U.S.C. 
6d) is amended by— 
(1) redesignating subsection (c) as subsection 
(d); and 
(2) inserting after subsection (b) the following: 
‘‘(c) CONFLICTS
OF INTEREST.—The Commission 
shall require that futures commission merchants and in-
troducing brokers implement conflict-of-interest systems 
and procedures that— 
‘‘(1) establish structural and institutional safe-
guards to assure that the activities of any person 
within the firm relating to research or analysis of 
the price or market for any commodity are separated 
by appropriate informational partitions within the 
firm from the review, pressure, or oversight of those 
whose involvement in trading or clearing activities 
might potentially bias their judgment or supervision; 
and
645 
‘‘(2) address such other issues as the Commis-
sion determines appropriate.’’. 
SEC. 3109. SWAP EXECUTION FACILITIES. 
The Commodity Exchange Act (7 U.S.C. 1 et seq.) 
is amended by inserting after section 5g the following: 
‘‘SEC. 5h. SWAP EXECUTION FACILITIES. 
‘‘(a) REGISTRATION.—A person may not operate a 
swap execution facility unless the facility is registered 
under this section or is registered with the Commission 
as a designated contract market under section 5 or a swap 
execution facility under section 5. 
‘‘(b) REQUIREMENTS FOR TRADING.— 
‘‘(1) A swap execution facility that is registered 
under subsection (a) may make available for trading 
any swap. 
‘‘(2) RULES FOR TRADING THROUGH THE FA-
CILITY.—Not later than 1 year after the date of the 
enactment of the Derivative Markets Transparency 
and Accountability Act of 2009, the Commission 
shall adopt rules to allow a swap to be traded 
through the facilities of a designated contract mar-
ket or a swap execution facility. Such rules shall 
permit an intermediary, acting as principal or agent, 
to enter into or execute a swap, notwithstanding sec-
tion 2(k), if the swap is executed, reported, recorded,
646 
or confirmed in accordance with the rules of the des-
ignated contract market or swap execution facility. 
‘‘(3) AGRICULTURAL SWAPS.—A swap execution 
facility may not list for trading or confirm the exe-
cution of any swap in an agricultural commodity (as 
defined by the Commission) except pursuant to a 
rule or regulation of the Commission allowing the 
swap under such terms and conditions as the Com-
mission shall prescribe. 
‘‘(c) TRADING BY CONTRACT MARKETS.—A board of 
trade that operates a contract market shall, to the extent 
that the board of trade also operates a swap execution fa-
cility and uses the same electronic trade execution system 
for trading on the contract market and the swap execution 
facility, identify whether the electronic trading is taking 
place on the contract market or the swap execution facil-
ity. 
‘‘(d) CORE PRINCIPLES FOR SWAP EXECUTION FA-
CILITIES.— 
‘‘(1) IN GENERAL.—To be registered as, and to 
maintain its registration as, a swap execution facil-
ity, the facility shall comply with the core principles 
specified in this subsection and any requirement that 
the Commission may impose by rule or regulation 
pursuant to section 8a(5). Except where the Com-
647 
mission determines otherwise by rule or regulation, 
the facility shall have reasonable discretion in estab-
lishing the manner in which it complies with these 
core principles. 
‘‘(2) COMPLIANCE
WITH
RULES.—The swap 
execution facility shall— 
‘‘(A) monitor and enforce compliance with 
any of the rules of the facility, including the 
terms and conditions of the swaps traded on or 
through the facility and any limitations on ac-
cess to the facility; and 
‘‘(B) establish and enforce trading and 
participation rules that will deter abuses and 
have the capacity to detect, investigate, and en-
force those rules, including means to— 
‘‘(i) provide market participants with 
impartial access to the market; and 
‘‘(ii) capture information that may be 
used in establishing whether rule violations 
have occurred. 
‘‘(3) SWAPS NOT READILY SUSCEPTIBLE TO MA-
NIPULATION.—The swap execution facility shall per-
mit trading only in swaps that are not readily sus-
ceptible to manipulation.
648 
‘‘(4) MONITORING
OF
TRADING.—The swap 
execution facility shall— 
‘‘(A) establish and enforce rules or terms 
and conditions defining, or specifications detail-
ing, trading procedures to be used in entering 
and executing orders traded on or through its 
facilities; and 
‘‘(B) monitor trading in swaps to prevent 
manipulation, price distortion, and disruptions 
of the delivery or cash settlement process 
through surveillance, compliance, and discipli-
nary practices and procedures, including meth-
ods for conducting real-time monitoring of trad-
ing and comprehensive and accurate trade re-
constructions. 
‘‘(5) ABILITY TO OBTAIN INFORMATION.—The 
swap execution facility shall— 
‘‘(A) establish and enforce rules that will 
allow the facility to obtain any necessary infor-
mation to perform any of the functions de-
scribed in this section; 
‘‘(B) provide the information to the Com-
mission upon request; and
649 
‘‘(C) have the capacity to carry out such 
international information-sharing agreements as 
the Commission may require. 
‘‘(6) POSITION LIMITS OR ACCOUNTABILITY.— 
‘‘(A) To reduce the potential threat of 
market manipulation or congestion, especially 
during trading in the delivery month, a swap 
execution facility that is a trading facility shall 
adopt for each of its contracts made available 
for trading on the trading facility, where nec-
essary and appropriate, position limitations or 
position accountability for speculators who es-
tablish positions in the contract. 
‘‘(B) For any contract of a swap execution 
facility that is subject to a position limitation 
established by the Commission pursuant to sec-
tion 4a(a), the swap execution facility— 
‘‘(i) may set a position limitation at a 
level that is lower than the Commission 
limitation; and 
‘‘(ii) shall monitor positions estab-
lished on or through the swap execution fa-
cility for compliance with the limit set by 
the Commission and the limit, if any, set 
by the swap execution facility.
650 
‘‘(7) 
FINANCIAL
INTEGRITY
OF
TRANS-
ACTIONS.—The swap execution facility shall estab-
lish and enforce rules and procedures for ensuring 
the financial integrity of swaps entered on or 
through its facilities, including the clearance and 
settlement of the swaps pursuant to section 2(j)(1). 
‘‘(8) EMERGENCY AUTHORITY.—The swap exe-
cution facility shall adopt rules to provide for the ex-
ercise of emergency authority, in consultation or co-
operation with the Commission, where necessary and 
appropriate, including the authority to liquidate or 
transfer open positions in any swap or to suspend or 
curtail trading in a swap. 
‘‘(9) TIMELY PUBLICATION OF TRADING INFOR-
MATION.—The swap execution facility shall make 
public timely information on price, trading volume, 
and other trading data on swaps to the extent pre-
scribed by the Commission. The Commission shall 
evaluate the impact of public disclosure on market 
liquidity in the relevant market, and shall seek to 
avoid public disclosure of information in a manner 
that would significantly reduce market liquidity. The 
Commission shall not disclose information related to 
the internal business decisions of particular market 
participants.
651 
‘‘(10) RECORDKEEPING AND REPORTING.—The 
swap execution facility shall maintain records of all 
activities related to the business of the facility, in-
cluding a complete audit trail, in a form and manner 
acceptable to the Commission for a period of 5 
years, and report to the Commission all information 
determined by the Commission to be necessary or 
appropriate for the Commission to perform its re-
sponsibilities under this Act in a form and manner 
acceptable to the Commission. The swap execution 
facility shall keep any such records relating to swaps 
defined in section 1a(35)(A)(v) open to inspection 
and examination by the Securities and Exchange 
Commission. The Commission shall adopt data col-
lection and reporting requirements for swap execu-
tion facilities that are comparable to corresponding 
requirements for derivatives clearing organizations 
and swap repositories. 
‘‘(11) 
ANTITRUST
CONSIDERATIONS.—The 
swap execution facility shall avoid— 
‘‘(A) adopting any rules or taking any ac-
tions that result in any unreasonable restraints 
of trade; or
652 
‘‘(B) imposing any material anticompeti-
tive burden on trading on the swap execution 
facility. 
‘‘(12) CONFLICTS
OF
INTEREST.—The swap 
execution facility shall— 
‘‘(A) establish and enforce rules to mini-
mize conflicts of interest in its decision-making 
process; and 
‘‘(B) establish a process for resolving the 
conflicts of interest. 
‘‘(13) FINANCIAL RESOURCES.— 
‘‘(A) The swap execution facility shall have 
adequate financial, operational, and managerial 
resources to discharge its responsibilities. 
‘‘(B) The financial resources of the swap 
execution facility shall be considered adequate if 
their value exceeds the total amount that would 
enable the facility to cover its operating costs 
for a period of 1 year, calculated on a rolling 
basis. 
‘‘(14) SYSTEM SAFEGUARDS.—The swap execu-
tion facility shall— 
‘‘(A) establish and maintain a program of 
risk analysis and oversight to identify and mini-
mize sources of operational risk, through the
653 
development of appropriate controls and proce-
dures, and the development of automated sys-
tems, that are reliable, secure, and have ade-
quate scalable capacity; 
‘‘(B) establish and maintain emergency 
procedures, backup facilities, and a plan for dis-
aster recovery that allow for the timely recovery 
and resumption of operations and the fulfill-
ment of the swap execution facility’s respon-
sibilities and obligation; and 
‘‘(C) periodically conduct tests to verify 
that backup resources are sufficient to ensure 
continued order processing and trade matching, 
price reporting, market surveillance, and main-
tenance of a comprehensive and accurate audit 
trail. 
‘‘(15) DESIGNATION
OF
COMPLIANCE
OFFI-
CER.— 
‘‘(A) IN GENERAL.—Each swap execution 
facility shall designate an individual to serve as 
a compliance officer. 
‘‘(B) DUTIES.—The compliance officer— 
‘‘(i) shall report directly to the board 
or to the senior officer of the facility; 
‘‘(ii) shall—
654 
‘‘(I) review compliance with the 
core principles in this subsection; 
‘‘(II) in consultation with the 
board of the facility, a body per-
forming a function similar to that of 
a board, or the senior officer of the 
facility, resolve any conflicts of inter-
est that may arise; 
‘‘(III) be responsible for admin-
istering the policies and procedures 
required to be established pursuant to 
this section; and 
‘‘(IV) ensure compliance with 
this Act and the rules and regulations 
issued under this Act, including rules 
prescribed by the Commission pursu-
ant to this section; and 
‘‘(iii) shall establish procedures for re-
mediation of non-compliance issues found 
during 
compliance 
office 
reviews, 
lookbacks, internal or external audit find-
ings, self-reported errors, or through vali-
dated complaints, and for the handling, 
management response, remediation, re-
655 
testing, and closing of non-compliant 
issues. 
‘‘(C) ANNUAL REPORTS REQUIRED.—The 
compliance officer shall annually prepare and 
sign a report on the compliance of the facility 
with this Act and its policies and procedures, 
including its code of ethics and conflict of inter-
est policies, in accordance with rules prescribed 
by the Commission. The compliance report shall 
accompany the financial reports of the facility 
that are required to be furnished to the Com-
mission pursuant to this section and shall in-
clude a certification that, under penalty of law, 
the report is accurate and complete. 
‘‘(e) EXEMPTIONS.—The Commission may exempt, 
conditionally or unconditionally, a swap execution facility 
from registration under this section if the Commission 
finds that the facility is subject to comparable, comprehen-
sive supervision and regulation on a consolidated basis by 
the Securities and Exchange Commission, a Prudential 
Regulator or the appropriate governmental authorities in 
the organization’s home country. 
‘‘(f) RULES.—No later than 1 year after the date of 
the enactment of the Derivative Markets Transparency 
and Accountability Act of 2009, the Commission shall pre-
656 
scribe rules governing the regulation of swap execution fa-
cilities under this section.’’. 
SEC. 3110. DERIVATIVES TRANSACTION EXECUTION FACILI-
TIES AND EXEMPT BOARDS OF TRADE. 
(a) Sections 5a and 5d of the Commodity Exchange 
Act (7 U.S.C. 1 et seq.) are repealed. 
(b)(1) Prior to the final effective dates in this title, 
a person may petition the Commodity Futures Trading 
Commission to remain subject to the provisions of section 
5d of the Commodity Exchange Act, as such provisions 
existed prior to the effective date of this subtitle. 
(2) The Commodity Futures Trading Commission 
shall consider any petition submitted under paragraph (1) 
in a prompt manner and may allow a person to continue 
operating subject to the provisions of section 5d of the 
Commodity Exchange Act for up to 1 year after the effec-
tive date of this subtitle. 
SEC. 3111. DESIGNATED CONTRACT MARKETS. 
(a) Section 5(d) of the Commodity Exchange Act (7 
U.S.C. 7(d)) is amended by striking paragraphs (1) and 
(2) and inserting the following: 
‘‘(1) IN GENERAL.—To be designated as, and 
to maintain the designation of a board of trade as 
a contract market, the board of trade shall comply 
with the core principles specified in this subsection
657 
and any requirement that the Commission may im-
pose by rule or regulation pursuant to section 8a(5). 
Except where the Commission determines otherwise 
by rule or regulation, the board of trade shall have 
reasonable discretion in establishing the manner in 
which it complies with the core principles. 
‘‘(2) COMPLIANCE WITH RULES.— 
‘‘(A) The board of trade shall monitor and 
enforce compliance with the rules of the con-
tract market, including access requirements, the 
terms and conditions of any contracts to be 
traded on the contract market and the contract 
market’s abusive trade practice prohibitions. 
‘‘(B) The board of trade shall have the ca-
pacity to detect, investigate, and apply appro-
priate sanctions to, any person or entity that 
violates the rules. 
‘‘(C) The rules shall provide the board of 
trade with the ability and authority to obtain 
any necessary information to perform any of 
the functions described in this subsection, in-
cluding the capacity to carry out such inter-
national information-sharing agreements as the 
Commission may require.’’.
658 
(b) Section 5(d) of such Act (7 U.S.C. 7(d)) is 
amended by striking paragraphs (4) and (5) and inserting 
the following: 
‘‘(4) PREVENTION OF MARKET DISRUPTION.— 
The board of trade shall have the capacity and re-
sponsibility to prevent manipulation, price distortion, 
and disruptions of the delivery or cash-settlement 
process through market surveillance, compliance, 
and enforcement practices and procedures, including 
methods for conducting real-time monitoring of trad-
ing and comprehensive and accurate trade recon-
structions. 
‘‘(5) POSITION
LIMITATIONS
OR
ACCOUNT-
ABILITY.— 
‘‘(A) To reduce the potential threat of 
market manipulation or congestion, especially 
during trading in the delivery month, the board 
of trade shall adopt for each of its contracts, 
where necessary and appropriate, position limi-
tations or position accountability for specu-
lators. 
‘‘(B) For any contract that is subject to a 
position limitation established by the Commis-
sion pursuant to section 4a(a), the board of 
trade shall set its position limitation at a level
659 
no higher than the Commission-established limi-
tation.’’. 
(c) Section 5(d) of such Act (7 U.S.C. 7(d)) is 
amended by striking paragraph (7) and inserting the fol-
lowing: 
‘‘(7) AVAILABILITY
OF
GENERAL
INFORMA-
TION.—The board of trade shall make available to 
market authorities, market participants, and the 
public accurate information concerning— 
‘‘(A) the terms and conditions of the con-
tracts of the contract market; and 
‘‘(B) the rules, regulations and mecha-
nisms for executing transactions on or through 
the facilities of the contract market, and the 
rules and specifications describing the operation 
of the board of trade’s electronic matching plat-
form or other trade execution facility.’’. 
(d) Section 5(d) of such Act (7 U.S.C. 7(d)) is 
amended by striking paragraph (9) and inserting the fol-
lowing: 
‘‘(9) EXECUTION OF TRANSACTIONS.— 
‘‘(A) The board of trade shall provide a 
competitive, open, and efficient market and 
mechanism for executing transactions that pro-
660 
tects the price discovery process of trading in 
the board of trade’s centralized market. 
‘‘(B) The rules may authorize, for bona 
fide business purposes— 
‘‘(i) transfer trades or office trades; 
‘‘(ii) an exchange of— 
‘‘(I) futures in connection with a 
cash commodity transaction; 
‘‘(II) futures for cash commod-
ities; or 
‘‘(III) futures for swaps; or 
‘‘(iii) A futures commission merchant, 
acting as principal or agent, to enter into 
or confirm the execution of a contract for 
the purchase or sale of a commodity for fu-
ture delivery if the contract is reported, re-
corded, or cleared in accordance with the 
rules of the contract market or a deriva-
tives clearing organization.’’. 
(e) Section 5(d)(17) of such Act (7 U.S.C. 7(d)(17)) 
is amended by adding at the end the following: ‘‘The board 
of trade shall keep any such records relating to swaps de-
fined in section 1a(35)(A)(v) open to inspection and exam-
ination by the Securities and Exchange Commission.’’.
661 
(f) Section 5(d) of such Act (7 U.S.C. 7(d)) is amend-
ed by adding at the end the following: 
‘‘(19) FINANCIAL RESOURCES.—The board of 
trade shall have adequate financial, operational, and 
managerial resources to discharge the responsibil-
ities of a contract market. For the financial re-
sources of a board of trade to be considered ade-
quate, their value shall exceed the total amount that 
would enable the contract market to cover its oper-
ating costs for a period of 1 year, calculated on a 
rolling basis. 
‘‘(20) SYSTEM
SAFEGUARDS.—The board of 
trade shall— 
‘‘(A) establish and maintain a program of 
risk analysis and oversight to identify and mini-
mize sources of operational risk through the de-
velopment of appropriate controls and proce-
dures, and the development of automated sys-
tems, that are reliable, secure, and give ade-
quate scalable capacity; 
‘‘(B) establish and maintain emergency 
procedures, backup facilities, and a plan for dis-
aster recovery that allow for the timely recovery 
and resumption of operations and the fulfill-
662 
ment of the board of trade’s responsibilities and 
obligations; and 
‘‘(C) periodically conduct tests to verify 
that back-up resources are sufficient to ensure 
continued order processing and trade matching, 
price reporting, market surveillance, and main-
tenance of a comprehensive and accurate audit 
trail. 
‘‘(21) DIVERSITY OF BOARDS OF DIRECTORS.— 
The board of trade, if a publicly traded company, 
shall endeavor to recruit individuals to serve on the 
board of directors and the other decision-making 
bodies (as determined by the Commission) of the 
board of trade from among, and to have the com-
position of the bodies reflect, a broad and culturally 
diverse pool of qualified candidates. 
‘‘(22) DISCIPLINARY PROCEDURES.—The board 
of trade shall establish and enforce disciplinary pro-
cedures that authorize the board of trade to dis-
cipline, suspend, or expel members or market par-
ticipants that violate the rules of the board of trade, 
or similar methods for performing the same func-
tions, including delegation of the functions to third 
parties.’’.
663 
(g) Section 5 of such Act (7 U.S.C. 7) is amended 
by striking subsection (b). 
SEC. 3112. MARGIN. 
(a) Section 8a(7)(C) of the Commodity Exchange Act 
(7 U.S.C. 12a(7)(C)) is amended by striking ‘‘, excepting 
the setting of levels of margin’’. 
(b) Section 8a(7) of such Act (7 U.S.C. 12a(7)) is 
amended by redesignating subparagraphs (D) through (F) 
as subparagraphs (E) through (G), respectively, and in-
serting after subparagraph (C) the following: 
‘‘(D) margin requirements, provided that 
such rules, regulations, or orders shall— 
‘‘(i) be limited to protecting the finan-
cial integrity of the derivatives clearing or-
ganization; 
‘‘(ii) be designed for risk management 
purposes in order to protect the financial 
integrity of transactions; and 
‘‘(iii) 
not 
set 
specific 
margin 
amounts.’’. 
SEC. 3113. POSITION LIMITS. 
(a) Section 4a(a) of the Commodity Exchange Act (7 
U.S.C. 6a(a)) is amended by— 
(1) inserting ‘‘(1)’’ after ‘‘(a)’’;
664 
(2) striking ‘‘on electronic trading facilities with 
respect to a significant price discovery contract’’ in 
the first sentence and inserting ‘‘swaps that perform 
or affect a significant price discovery function with 
respect to registered entities’’; 
(3) inserting ‘‘, including any group or class of 
traders,’’ in the second sentence after ‘‘held by any 
person’’; 
(4) striking ‘‘on an electronic trading facility 
with respect to a significant price discovery con-
tract,’’ in the second sentence and inserting ‘‘swaps 
that perform or affect a significant price discovery 
function with respect to registered entities,’’; and 
(5) inserting at the end the following: 
‘‘(2)(A) In accordance with the standards set 
forth in paragraph (1) of this subsection and con-
sistent with the good faith exception cited in sub-
section (b)(2), with respect to physical commodities 
other than excluded commodities as defined by the 
Commission, the Commission shall by rule, regula-
tion, or order establish limits on the amount of posi-
tions, as appropriate, other than bona fide hedge po-
sitions, that may be held by any person with respect 
to contracts of sale for future delivery or with re-
spect to options on the contracts or commodities
665 
traded on or subject to the rules of a designated 
contract market. 
‘‘(B)(i) For exempt commodities, the limits 
shall be established within 180 days after the date 
of the enactment of this paragraph. 
‘‘(ii) For agricultural commodities, the limits 
shall be established within 270 days after the date 
of the enactment of this paragraph. 
‘‘(C) In establishing the limits, the Commission 
shall strive to ensure that trading on foreign boards 
of trade in the same commodity will be subject to 
comparable limits and that any limits to be imposed 
by the Commission will not cause price discovery in 
the commodity to shift to trading on the foreign 
boards of trade. 
‘‘(3) In establishing the limits required in para-
graph (2), the Commission, as appropriate, shall set 
limits— 
‘‘(A) on the number of positions that may 
be held by any person for the spot month, each 
other month, and the aggregate number of posi-
tions that may be held by any person for all 
months; and 
‘‘(B) to the maximum extent practicable, 
in its discretion—
666 
‘‘(i) to diminish, eliminate, or prevent 
excessive speculation as described under 
this section; 
‘‘(ii) to deter and prevent market ma-
nipulation, squeezes, and corners; 
‘‘(iii) to ensure sufficient market li-
quidity for bona fide hedgers; and 
‘‘(iv) to ensure that the price dis-
covery function of the underlying market is 
not disrupted. 
‘‘(4)(A) Not later than 150 days after the es-
tablishment of position limits pursuant to paragraph 
(2), and biannually thereafter, the Commission shall 
hold 2 public hearings, 1 for agriculture commodities 
and 1 for energy commodities as such terms are de-
fined by the Commission, in order to receive rec-
ommendations regarding the position limits to be es-
tablished in paragraph (2). 
‘‘(B) Each public hearing held pursuant to sub-
paragraph (A) shall, at a minimum providing there 
is 
sufficient 
interest, 
receive 
recommendations 
from— 
‘‘(i) 7 predominantly commercial short 
hedgers of the actual physical commodity for 
future delivery;
667 
‘‘(ii) 7 predominantly commercial long 
hedgers of the actual physical commodity for 
future delivery; 
‘‘(iii) 4 non-commercial participants in 
markets for commodities for future delivery; 
and 
‘‘(iv) each designated contract market 
upon which a contract in the commodity for fu-
ture delivery is traded. 
‘‘(C) Within 60 days after each public hearing 
held pursuant to subparagraph (A), the Commission 
shall publish in the Federal Register its response to 
the recommendations regarding position limits heard 
at the hearing. 
‘‘(5) SIGNIFICANT
PRICE
DISCOVERY
FUNC-
TION.—In making a determination whether a swap 
performs or affects a significant price discovery 
function with respect to regulated markets, the Com-
mission shall consider, as appropriate: 
‘‘(A) PRICE
LINKAGE.—The extent to 
which the swap uses or otherwise relies on a 
daily or final settlement price, or other major 
price parameter, of another contract traded on 
a regulated market based upon the same under-
lying commodity, to value a position, transfer or
668 
convert a position, financially settle a position, 
or close out a position; 
‘‘(B) ARBITRAGE.—The extent to which 
the price for the swap is sufficiently related to 
the price of another contract traded on a regu-
lated market based upon the same underlying 
commodity so as to permit market participants 
to effectively arbitrage between the markets by 
simultaneously maintaining positions or exe-
cuting trades in the swaps on a frequent and 
recurring basis; 
‘‘(C) MATERIAL PRICE REFERENCE.—The 
extent to which, on a frequent and recurring 
basis, bids, offers, or transactions in a contract 
traded on a regulated market are directly based 
on, or are determined by referencing, the price 
generated by the swap; 
‘‘(D) MATERIAL
LIQUIDITY.—The extent 
to which the volume of swaps being traded in 
the commodity is sufficient to have a material 
effect on another contract traded on a regulated 
market; and 
‘‘(E) OTHER
MATERIAL
FACTORS.—Such 
other material factors as the Commission speci-
fies by rule or regulation as relevant to deter-
669 
mine whether a swap serves a significant price 
discovery function with respect to a regulated 
market. 
‘‘(6) 
ECONOMICALLY
EQUIVALENT
CON-
TRACTS.— 
‘‘(A) Notwithstanding any other provision 
of this section, the Commission shall establish 
limits on the amount of positions, including ag-
gregate position limits, as appropriate, other 
than bona fide hedge positions, that may be 
held by any person with respect to swaps that 
are economically equivalent to contracts of sale 
for future delivery or to options on the con-
tracts or commodities traded on or subject to 
the rules of a designated contract market sub-
ject to paragraph (2). 
‘‘(B) In establishing limits pursuant to 
subparagraph (A), the Commission shall— 
‘‘(i) develop the limits concurrently 
with limits established under paragraph 
(2), and the limits shall have similar re-
quirements as under paragraph (3)(B); 
and
670 
‘‘(ii) establish the limits simulta-
neously with limits established under para-
graph (2). 
‘‘(7) AGGREGATE POSITION LIMITS.—The Com-
mission shall, by rule or regulation, establish limits 
(including related hedge exemption provisions) on 
the aggregate number or amount of positions in con-
tracts based upon the same underlying commodity 
(as defined by the Commission) that may be held by 
any person, including any group or class of traders, 
for each month across— 
‘‘(A) contracts listed by designated con-
tract markets; 
‘‘(B) with respect to an agreement con-
tract, or transaction that settles against any 
price (including the daily or final settlement 
price) of 1 or more contracts listed for trading 
on a registered entity, contracts traded on a 
foreign board of trade that provides members or 
other participants located in the United States 
with direct access to its electronic trading and 
order matching system; and 
‘‘(C) swap contracts that perform or affect 
a significant price discovery function with re-
spect to regulated entities.
671 
‘‘(8) EXEMPTIONS.—The Commission, by rule, 
regulation, or order, may exempt, conditionally or 
unconditionally, any person or class of persons, any 
swap or class of swaps, any contract of sale of a 
commodity for future delivery or class of such con-
tracts, any option or class of options, or any trans-
action or class of transactions from any requirement 
it may establish under this section with respect to 
position limits.’’. 
(b) Section 4a(b) of such Act (7 U.S.C. 6a(b)) is 
amended— 
(1) in paragraph (1), by striking ‘‘or derivatives 
transaction execution facility or facilities or elec-
tronic trading facility’’ and inserting ‘‘or swap exe-
cution facility or facilities’’; and 
(2) in paragraph (2), by striking ‘‘or derivatives 
transaction execution facility or facilities or elec-
tronic trading facility’’ and inserting ‘‘or swap exe-
cution facility’’. 
(c) Section 4a(c) of such Act is amended— 
(1) by inserting ‘‘(1)’’ after ‘‘(c)’’; and 
(2) by adding after and below the end the fol-
lowing: 
‘‘(2) For the purposes of implementation of 
subsection (a)(2) for contracts of sale for future de-
672 
livery or options on the contracts or commodities, 
the Commission shall define what constitutes a bona 
fide hedging transaction or position as a transaction 
or position that— 
‘‘(A)(i) represents a substitute for trans-
actions made or to be made or positions taken 
or to be taken at a later time in a physical mar-
keting channel; 
‘‘(ii) is economically appropriate to the re-
duction of risks in the conduct and manage-
ment of a commercial enterprise; and 
‘‘(iii) arises from the potential change in 
the value of— 
‘‘(I) assets that a person owns, pro-
duces, manufactures, processes, or mer-
chandises or anticipates owning, producing, 
manufacturing, processing, or merchan-
dising; 
‘‘(II) liabilities that a person owns or 
anticipates incurring; or 
‘‘(III) services that a person provides, 
purchases, or anticipates providing or pur-
chasing; or 
‘‘(B) reduces risks attendant to a position 
resulting from a swap that—
673 
‘‘(i) 
was 
executed 
opposite 
a 
counterparty for which the transaction 
would qualify as a bona fide hedging trans-
action pursuant to subparagraph (A); or 
‘‘(ii) meets the requirements of sub-
paragraph (A).’’. 
(d) This section shall become effective on the date 
of its enactment. 
SEC. 3114. ENHANCED AUTHORITY OVER REGISTERED EN-
TITIES. 
(a) Section 5c(a) of the Commodity Exchange Act (7 
U.S.C. 7a–2(a)) is amended— 
(1) in paragraph (1), by striking ‘‘5a(d) and 
5b(c)(2)’’ and inserting ‘‘5b(c)(2) and 5h(e)’’; and 
(2) in paragraph (2), by striking ‘‘shall not’’ 
and inserting ‘‘may’’. 
(b) Section 5c(b) of such Act (7 U.S.C. 7a–2(b)) is 
amended in each of paragraphs (1), (2), and (3) by insert-
ing ‘‘or swap execution facility’’ after ‘‘contract market’’ 
each place it appears. 
(c) Section 5c(c)(1) of such Act (7 U.S.C. 7a– 
2(c)(1)) is amended— 
(1) by inserting ‘‘(A)’’ after ‘‘IN GENERAL.—’’; 
and 
(2) by adding at the end the following:
674 
‘‘(B) The new rule or rule amendment shall be-
come effective, pursuant to the registered entity’s 
certification and notice of such certification to its 
members (in a manner to be determined by the 
Commission), 10 business days after the Commis-
sion’s receipt of the certification (or such shorter pe-
riod determined by the Commission by rule or regu-
lation) unless the Commission notifies the registered 
entity within such time that it is staying the certifi-
cation because there exist novel or complex issues 
that require additional time to analyze, an inad-
equate explanation by the submitting registered enti-
ty, or a potential inconsistency with this Act (includ-
ing regulations under this Act). 
‘‘(C)(i) A notification by the Commission pursu-
ant to subparagraph (B) shall stay the certification 
of the new contract or instrument or clearing of the 
new contract or instrument, new rule or new amend-
ment for up to an additional 90 days from the date 
of the notification. 
‘‘(ii) The Commission shall provide at least a 
30-day public comment period, within the 90-day pe-
riod in which the stay is in effect described in clause 
(i), whenever it reviews a rule or rule amendment
675 
pursuant to a notification by the Commission under 
this paragraph.’’. 
(d) Section 5c(d) of such Act (7 U.S.C. 7a–2(d)) is 
repealed. 
SEC. 3115. FOREIGN BOARDS OF TRADE. 
(a) IN GENERAL.—Section 4 of the Commodity Ex-
change Act (7 U.S.C. 6) is amended by adding at the end 
the following: 
‘‘(e) FOREIGN BOARDS OF TRADE.— 
‘‘(1) IN GENERAL.—The Commission may not 
permit a foreign board of trade to provide to the 
members of the foreign board of trade or other par-
ticipants located in the United States direct access 
to the electronic trading and order-matching system 
of the foreign board of trade with respect to an 
agreement, contract, or transaction that settles 
against any price (including the daily or final settle-
ment price) of 1 or more contracts listed for trading 
on a registered entity, unless the Commission deter-
mines that— 
‘‘(A) the foreign board of trade makes pub-
lic daily trading information regarding the 
agreement, contract, or transaction that is com-
parable to the daily trading information pub-
lished by the registered entity for the 1 or more
676 
contracts against which the agreement, con-
tract, or transaction traded on the foreign 
board of trade settles; and 
‘‘(B) the foreign board of trade (or the for-
eign futures authority that oversees the foreign 
board of trade)— 
‘‘(i) adopts position limits (including 
related hedge exemption provisions) for the 
agreement, contract, or transaction that 
are comparable, taking into consideration 
the relative sizes of the respective markets, 
to the position limits (including related 
hedge exemption provisions) adopted by 
the registered entity for the 1 or more con-
tracts against which the agreement, con-
tract, or transaction traded on the foreign 
board of trade settles; 
‘‘(ii) has the authority to require or 
direct market participants to limit, reduce, 
or liquidate any position the foreign board 
of trade (or the foreign futures authority 
that oversees the foreign board of trade) 
determines to be necessary to prevent or 
reduce the threat of price manipulation, 
excessive speculation as described in sec-
677 
tion 4a, price distortion, or disruption of 
delivery or the cash settlement process; 
‘‘(iii) agrees to promptly notify the 
Commission, with regard to the agreement, 
contract, or transaction that settles against 
any price (including the daily or final set-
tlement price) of 1 or more contracts listed 
for trading on a registered entity, of any 
change regarding— 
‘‘(I) the information that the for-
eign board of trade will make publicly 
available; 
‘‘(II) the position limits that the 
foreign board of trade or foreign fu-
tures authority will adopt and enforce; 
‘‘(III) the position reductions re-
quired to prevent manipulation, exces-
sive speculation as described in sec-
tion 4a, price distortion, or disruption 
of delivery or the cash settlement 
process; and 
‘‘(IV) any other area of interest 
expressed by the Commission to the 
foreign board of trade or foreign fu-
tures authority;
678 
‘‘(iv) provides information to the 
Commission regarding large trader posi-
tions in the agreement, contract, or trans-
action that is comparable to the large trad-
er position information collected by the 
Commission for the 1 or more contracts 
against which the agreement, contract, or 
transaction traded on the foreign board of 
trade settles; and 
‘‘(v) provides the Commission with in-
formation necessary to publish reports on 
aggregate trader positions for the agree-
ment, contract, or transaction traded on 
the foreign board of trade that are com-
parable to the reports on aggregate trader 
positions for the 1 or more contracts 
against which the agreement, contract, or 
transaction traded on the foreign board of 
trade settles. 
‘‘(2) EXISTING FOREIGN BOARDS OF TRADE.— 
Paragraph (1) shall not be effective with respect to 
any foreign board of trade to which the Commission 
has granted direct access permission before the date 
of the enactment of this subsection until the date 
that is 180 days after such date of enactment.
679 
‘‘(3) PERSONS
LOCATED
IN
THE
UNITED 
STATES.—’’. 
(b) LIABILITY OF REGISTERED PERSONS TRADING 
ON A FOREIGN BOARD OF TRADE.— 
(1) Section 4(a) of such Act (7. U.S.C. 6(a)) is 
amended by inserting ‘‘or by subsection (f)’’ after 
‘‘Unless exempted by the Commission pursuant to 
subsection (c)’’; and 
(2) Section 4 of such Act (7 U.S.C. 6) is fur-
ther amended by adding at the end the following: 
‘‘(f)(1) A person registered with the Commission, or 
exempt from registration by the Commission, under this 
Act may not be found to have violated subsection (a) with 
respect to a transaction in, or in connection with, a con-
tract of sale of a commodity for future delivery if the per-
son— 
‘‘(A) has reason to believe that the transaction 
and the contract is made on or subject to the rules 
of a foreign board of trade that is— 
‘‘(i) legally organized under the laws of a 
foreign country; 
‘‘(ii) authorized to act as a board of trade 
by a foreign futures authority; and 
‘‘(iii) subject to regulation by the foreign 
futures authority; and
680 
‘‘(B) has not been determined by the Commis-
sion to be operating in violation of subsection (a). 
‘‘(2) Nothing in this subsection shall be construed as 
implying or creating any presumption that a board of 
trade, exchange, or market is located outside the United 
States, or its territories or possessions, for purposes of 
subsection (a).’’. 
(c) CONTRACT ENFORCEMENT FOR FOREIGN FU-
TURES CONTRACTS.—Section 22(a) of such Act (7 U.S.C. 
25(a)) is amended by adding at the end the following: 
‘‘(5) CONTRACT ENFORCEMENT FOR FOREIGN 
FUTURES CONTRACTS.—A contract of sale of a com-
modity for future delivery traded or executed on or 
through the facilities of a board of trade, exchange, 
or market located outside the United States for pur-
poses of section 4(a) shall not be void, voidable, or 
unenforceable, and a party to such a contract shall 
not be entitled to rescind or recover any payment 
made with respect to the contract, based on the fail-
ure of the foreign board of trade to comply with any 
provision of this Act.’’. 
SEC. 3116. LEGAL CERTAINTY FOR SWAPS. 
Section 22(a)(4) of the Commodity Exchange Act (7 
U.S.C. 25(a)(4)) is amended to read as follows:
681 
‘‘(4) CONTRACT ENFORCEMENT BETWEEN ELI-
GIBLE COUNTERPARTIES.— 
‘‘(A) A hybrid instrument sold to any in-
vestor shall not be void, voidable, or unenforce-
able, and a party to such a hybrid instrument 
shall not be entitled to rescind, or recover any 
payment made with respect to, such a hybrid 
instrument under this section or any other pro-
vision of Federal or State law, based solely on 
the failure of the hybrid instrument to comply 
with the terms or conditions of section 2(f) or 
regulations of the Commission; and 
‘‘(B) An agreement, contract, or trans-
action between eligible contract participants or 
persons reasonably believed to be eligible con-
tract participants shall not be void, voidable, or 
unenforceable, and a party thereto shall not be 
entitled to rescind, or recover any payment 
made with respect to, such an agreement, con-
tract, or transaction under this section or any 
other provision of Federal or State law, based 
solely on the failure of the agreement, contract, 
or transaction to meet the definition of a swap 
set forth in section 1a, be traded in the manner 
set forth in section 2(k)(1), or be cleared pursu-
682 
ant to 2(j)(1) or regulations of the Commission 
pursuant thereto.’’. 
SEC. 3117. FDICIA AMENDMENTS. 
Sections 408 and 409 of the Federal Deposit Insur-
ance Corporation Improvement Act of 1991 (12 U.S.C. 
4421 and 4422) are repealed. 
SEC. 3118. ENFORCEMENT AUTHORITY. 
(a) The Commodity Exchange Act (7 U.S.C. 1 et 
seq.) is amended by inserting after section 4b the fol-
lowing: 
‘‘SEC. 4b–1. ENFORCEMENT AUTHORITY. 
‘‘(a) CFTC.—Except as provided in subsection (b), 
the Commission shall have exclusive authority to enforce 
the provisions of subtitle A of the Derivative Markets 
Transparency and Accountability Act of 2009 with respect 
to any person. 
‘‘(b) PRUDENTIAL REGULATORS.—The Prudential 
Regulators shall have exclusive authority to enforce the 
provisions of section 4s(d) and other prudential require-
ments of this Act with respect to banks, and branches or 
agencies of foreign banks that are swap dealers or major 
swap participants. 
‘‘(c) REFERRAL.—(1) If the Prudential Regulator for 
a swap dealer or major swap participant has cause to be-
lieve that the swap dealer or major swap participant may
683 
have engaged in conduct that constitutes a violation of the 
nonprudential requirements of section 4s or rules adopted 
by the Commission thereunder, that Prudential Regulator 
may recommend in writing to the Commission that the 
Commission initiate an enforcement proceeding as author-
ized under this Act. The recommendation shall be accom-
panied by a written explanation of the concerns giving rise 
to the recommendation. 
‘‘(2) If the Commission has cause to believe that a 
swap dealer or major swap participant that has a Pruden-
tial Regulator may have engaged in conduct that con-
stitutes a violation of the prudential requirements of sec-
tion 4s or rules adopted thereunder, the Commission may 
recommend in writing to the Prudential Regulator that 
the Prudential Regulator initiate an enforcement pro-
ceeding as authorized under this Act. The recommenda-
tion shall be accompanied by a written explanation of the 
concerns given rise to the recommendation.’’. 
(b)(1) Section 4c(a) of such Act (7 U.S.C. 6c(a)) is 
amended by adding at the end the following: 
‘‘(3) DISRUPTIVE PRACTICES.—It shall be un-
lawful for any person to engage in any trading or 
practice on or subject to the rules of a registered en-
tity that—
684 
‘‘(A) violates bids and offers (intentionally 
bidding at a price higher than the lowest offer, 
or offering at a price lower than the highest 
bid); 
‘‘(B) is, is of the character of, or is com-
monly known to the trade as ‘marking the 
close’ (bidding or offering during or near the 
market’s closing period with the intent to influ-
ence the settlement price); 
‘‘(C) is, is of the character of, or is com-
monly known to the trade as ‘spoofing’ (bidding 
or offering with the intent to cancel the bid or 
offer before execution); or 
‘‘(D) constitutes uneconomic trading (trad-
ing that has no legitimate economic purpose but 
for the effect on price). 
‘‘(4) The Commission may make and promul-
gate such rules and regulations as, in the judgment 
of the Commission, are reasonably necessary to pro-
hibit any other trading practice that is disruptive of 
fair and equitable trading.’’. 
(2) The amendment made by paragraph (1) shall be-
come effective upon enactment.
685 
SEC. 3119. ENFORCEMENT. 
(a) Section 4b(a)(2) of the Commodity Exchange Act 
(7 U.S.C. 6b(a)(2)) is amended by striking ‘‘or other 
agreement, contract, or transaction subject to paragraphs 
(1) and (2) of section 5a(g),’’ and inserting ‘‘or swap,’’. 
(b) Section 4b(b) of such Act (7 U.S.C. 6b(b)) is 
amended by striking ‘‘or other agreement, contract or 
transaction subject to paragraphs (1) and (2) of section 
5a(g),’’ and inserting ‘‘or swap,’’. 
(c) Section 4c(a) of such Act (7 U.S.C. 6c(a)) is 
amended by inserting ‘‘or swap’’ before ‘‘if the transaction 
is used or may be used’’. 
(d) Section 9(a)(2) of such Act (7 U.S.C. 13(a)(2)) 
is amended by inserting ‘‘or of any swap,’’ before ‘‘or to 
corner’’. 
(e) Section 9(a)(4) of such Act (7 U.S.C. 13(a)(4)) 
is amended by inserting ‘‘swap repository,’’ before ‘‘or fu-
tures association’’. 
(f) Section 9(e)(1) of such Act (7 U.S.C. 13(e)(1)) 
is amended by inserting ‘‘swap repository,’’ before ‘‘or reg-
istered futures association’’ and by inserting ‘‘, or swaps,’’ 
before ‘‘on the basis’’. 
(g) Section 8(b) of the Federal Deposit Insurance Act 
(12 U.S.C. 1818(b)) is amended by redesignating para-
graphs (6) through (10) as paragraphs (7) through (11),
686 
respectively, and inserting after paragraph (5) the fol-
lowing: 
‘‘(6) This section shall apply to any swap deal-
er, major swap participant, security-based swap 
dealer, major security-based swap participant, de-
rivatives clearing organization, swap repository, se-
curity-based swap repository, or swap execution fa-
cility, whether or not it is an insured depository in-
stitution, for which the Board, the Corporation, or 
the Office of the Comptroller of the Currency is the 
appropriate Federal banking agency or Prudential 
Regulator for purposes of the Derivative Markets 
Transparency and Accountability Act of 2009.’’. 
SEC. 3120. RETAIL COMMODITY TRANSACTIONS. 
(a) Section 2(c) of the Commodity Exchange Act (7 
U.S.C. 2(c)) is amended— 
(1) in paragraph (1), by striking ‘‘(other than 
section 5a (to the extent provided in section 5a(g)), 
5b, 5d, or 12(e)(2)(B))’’ and inserting ‘‘(other than 
section 5b or 12(e)(2)(B))’’; and 
(2) in paragraph (2), by inserting after sub-
paragraph (C) the following: 
‘‘(D) 
RETAIL
COMMODITY
TRANS-
ACTIONS.—
687 
‘‘(i) This subparagraph shall apply to, 
and the Commission shall have jurisdiction 
over, any agreement, contract, or trans-
action in any commodity that is— 
‘‘(I) entered into with, or offered 
to (even if not entered into with), a 
person that is not an eligible contract 
participant or eligible commercial en-
tity; and 
‘‘(II) entered into, or offered 
(even if not entered into), on a lever-
aged or margined basis, or financed 
by the offeror, the counterparty, or a 
person acting in concert with the of-
feror or counterparty on a similar 
basis. 
‘‘(ii) Clause (i) shall not apply to— 
‘‘(I) an agreement, contract, or 
transaction described in paragraph (1) 
or subparagraphs (A), (B), or (C), in-
cluding any agreement, contract, or 
transaction specifically excluded from 
subparagraph (A), (B), or (C); 
‘‘(II) any security; 
‘‘(III) a contract of sale that—
688 
‘‘(aa) results in actual deliv-
ery within 28 days or such other 
longer period as the Commission 
may determine by rule or regula-
tion based upon the typical com-
mercial practice in cash or spot 
markets for the commodity in-
volved; or 
‘‘(bb) creates an enforceable 
obligation to deliver between a 
seller and a buyer that have the 
ability to deliver and accept deliv-
ery, respectively, in connection 
with their line of business. 
‘‘(IV) an agreement, contract, or 
transaction that is listed on a national 
securities exchange registered under 
section 6(a) of the Securities Ex-
change Act of 1934 (15 U.S.C. 
78f(a)); or 
‘‘(V) an identified banking prod-
uct, as defined in section 402(b) of 
the Legal Certainty for Bank Prod-
ucts Act of 2000 (7 U.S.C. 27(b)).
689 
‘‘(iii) Sections 4(a), 4(b) and 4b shall 
apply to any agreement, contract or trans-
action described in clause (i), that is not 
excluded from clause (i) by clause (ii), as 
if the agreement, contract, or transaction 
were a contract of sale of a commodity for 
future delivery. 
‘‘(iv) This subparagraph shall not be 
construed to limit any jurisdiction that the 
Commission may otherwise have under any 
other provision of this Act over an agree-
ment, contract, or transaction that is a 
contract of sale of a commodity for future 
delivery; 
‘‘(v) This subparagraph shall not be 
construed to limit any jurisdiction that the 
Commission or the Securities and Ex-
change Commission may otherwise have 
under any other provisions of this Act with 
respect to security futures products and 
persons effecting transactions in security 
futures products; 
‘‘(vi) For the purposes of this sub-
paragraph, an agricultural producer, pack-
er, or handler shall be considered an eligi-
690 
ble commercial entity for any agreement, 
contract, or transaction for a commodity in 
connection with its line of business.’’. 
(b) The amendments made by subsection (a) shall be-
come effective on the date of the enactment of this section. 
SEC. 3121. LARGE SWAP TRADER REPORTING. 
The Commodity Exchange Act (7 U.S.C. 1 et seq.) 
is amended by inserting after section 4s (as added by sec-
tion 3107 of this Act) the following: 
‘‘SEC. 4t. LARGE SWAP TRADER REPORTING. 
‘‘(a) It shall be unlawful for any person to enter into 
any swap that performs or affects a significant price dis-
covery function with respect to registered entities if— 
‘‘(1) the person directly or indirectly enters into 
such swaps during any 1 day in an amount equal to 
or in excess of such amount as shall be fixed from 
time to time by the Commission; and 
‘‘(2) such person directly or indirectly has or 
obtains a position in such swaps equal to or in ex-
cess of such amount as shall be fixed from time to 
time by the Commission, 
unless the person files or causes to be filed with the prop-
erly designated officer of the Commission such reports re-
garding any transactions or positions described in para-
graphs (1) and (2) as the Commission may by rule or reg-
691 
ulation require and unless, in accordance with the rules 
and regulations of the Commission, the person keeps 
books and records of all such swaps and any transactions 
and positions in any related commodity traded on or sub-
ject to the rules of any board of trade, and of cash or 
spot transactions in, inventories of, and purchase and sale 
commitments of, such a commodity. 
‘‘(b) The books and records shall show complete de-
tails concerning all transactions and positions as the Com-
mission may by rule or regulation prescribe. 
‘‘(c) The books and records shall be open at all times 
to inspection and examination by any representative of the 
Commission. 
‘‘(d) For the purpose of this subsection, the swaps, 
futures and cash or spot transactions and positions of any 
person shall include the transactions and positions of any 
persons directly or indirectly controlled by the person. 
‘‘(e) In making a determination whether a swap per-
forms or affects a significant price discovery function with 
respect to regulated markets, the Commission shall con-
sider the factors set forth in section 4a(a)(3).’’.
692 
SEC. 3122. SEGREGATION OF ASSETS HELD AS COLLAT-
ERAL IN SWAP TRANSACTIONS. 
The Commodity Exchange Act (7 U.S.C. 1 et seq.) 
is further amended by inserting after section 4t the fol-
lowing: 
‘‘SEC. 4u. SEGREGATION OF ASSETS HELD AS COLLATERAL 
IN 
OVER-THE-COUNTER 
SWAP 
TRANS-
ACTIONS. 
‘‘(a) SEGREGATION.—At the request of a swap 
counterparty who provides funds or other property to a 
swap dealer initial margin or collateral to secure the obli-
gations of the counterparty under a swap between the 
counterparty and the swap dealer that is not submitted 
for clearing to a derivatives clearing organization, the 
swap dealer shall segregate the funds or other property 
for the benefit of the counterparty, and maintain the ini-
tial margin or collateral in an account which is carried 
by an independent third-party custodian and designated 
as a segregated account for the counterparty, in accord-
ance with such rules and regulations as the Commission 
or Prudential Regulator may prescribe. If a swap 
counterparty is a swap dealer or major swap participant 
who owns more than 20 percent of, or has more than 50 
percent representation on the board of directors of a cus-
todian, the custodian shall not be considered independent 
from the swap counterparties for purposes of the pre-
693 
ceding sentence. This subsection shall not be interpreted 
to preclude commercial arrangements regarding the in-
vestment of the segregated funds or other property and 
the related allocation of gains and losses resulting from 
any such investment. 
‘‘(b) FURTHER AUDIT REPORTING.—If a swap dealer 
does not segregate funds pursuant to the request of a 
swap counterparty in accordance with subsection (a), the 
swap dealer shall report to its counterparty on a quarterly 
basis that its procedures relating to margin and collateral 
requirements are in compliance with the agreement of the 
counterparties.’’. 
SEC. 3123. OTHER AUTHORITY. 
Unless otherwise provided by its terms, this subtitle 
does not divest any appropriate Federal banking agency, 
the Commission, the Securities and Exchange Commis-
sion, or other Federal or State agency, of any authority 
derived from any other applicable law. 
SEC. 3124. ANTITRUST. 
Nothing in the amendments made by this subtitle 
shall be construed to modify, impair, or supersede the op-
eration of any of the antitrust laws. For purposes of this 
subtitle, the term ‘‘antitrust laws’’ has the same meaning 
given the term in subsection (a) of the first section of the 
Clayton Act, except that the term includes section 5 of
694 
the Federal Trade Commission Act to the extent that such 
section 5 applies to unfair methods of competition. 
SEC. 3125. REVIEW OF PRIOR ACTIONS. 
Notwithstanding any other provision of the Com-
modity Exchange Act, the Commodity Futures Trading 
Commission shall review, as appropriate, all regulations, 
rules, exemptions, exclusions, guidance, no action letters, 
orders, other actions taken by or on behalf of the Commis-
sion, and any action taken pursuant to the Commodity 
Exchange Act by an exchange, self-regulatory organiza-
tion, or any other registered entity, that are currently in 
effect, to ensure that such prior actions are in compliance 
with the provisions of this title. 
SEC. 3126. EXPEDITED PROCESS. 
The Commodity Futures Trading Commission may 
use emergency and expedited procedures (including any 
administrative or other procedure as appropriate) to carry 
out this title if, in its discretion, it deems it necessary to 
do so. 
SEC. 3127. EFFECTIVE DATE. 
(a) Unless otherwise provided, the provisions of this 
subtitle shall become effective the later of 270 days after 
the date of the enactment of this subtitle or, to the extent 
a provision of this subtitle requires rulemaking, no less
695 
than 60 days after publication of a final rule or regulation 
implementing such provision of this subtitle. 
(b) Subsection (a) shall not preclude the Commodity 
Futures Trading Commission from any rulemaking re-
quired or directed under this subtitle to implement the 
provisions of this subtitle. 
Subtitle B—Regulation of Security- 
Based Swap Markets 
SEC. 3201. DEFINITIONS UNDER THE SECURITIES EX-
CHANGE ACT OF 1934. 
(a) DEFINITIONS.—Section 3(a) of the Securities Ex-
change Act of 1934 (15 U.S.C. 78c(a)) is amended— 
(1) in paragraph (5)(A) and (B), by inserting 
‘‘(but not security-based swaps, other than security- 
based swaps with or for persons that are not eligible 
contract participants)’’ after the word ‘‘securities’’ 
in each place it appears; 
(2) in paragraph (10), by inserting ‘‘security- 
based swap,’’ after ‘‘security future,’’; 
(3) in paragraph (13), by adding at the end the 
following: ‘‘For security-based swaps, such terms in-
clude the execution, termination (prior to its sched-
uled maturity date), assignment, exchange, or simi-
lar transfer or conveyance of, or extinguishing of
696 
rights or obligations under, a security-based swap, 
as the context may require.’’; 
(4) in paragraph (14), by adding at the end the 
following: ‘‘For security-based swaps, such terms in-
clude the execution, termination (prior to its sched-
uled maturity date), assignment, exchange, or simi-
lar transfer or conveyance of, or extinguishing of 
rights or obligations under, a security-based swap, 
as the context may require.’’; 
(5) in paragraph (39)— 
(A) by striking ‘‘or government securities 
dealer’’ and adding ‘‘government securities 
dealer, security-based swap dealer or major se-
curity-based swap participant’’ in its place in 
subparagraph (B)(i)(I); 
(B) by adding ‘‘security-based swap dealer, 
major security-based swap participant,’’ after 
‘‘government securities dealer,’’ in subpara-
graph (B)(i)(II); 
(C) by striking ‘‘or government securities 
dealer’’ and adding ‘‘government securities 
dealer, security-based swap dealer or major se-
curity-based swap participant’’ in its place in 
subparagraph (C); and
697 
(D) by adding ‘‘security-based swap dealer, 
major security-based swap participant,’’ after 
‘‘government securities dealer,’’ in subpara-
graph (D); and 
(6) by adding at the end the following: 
‘‘(65) ELIGIBLE CONTRACT PARTICIPANT.—The 
term ‘eligible contract participant’ has the same 
meaning as in section 1a(12) of the Commodity Ex-
change Act (7 U.S.C. 1a(12)). 
‘‘(66) MAJOR SWAP PARTICIPANT.—The term 
‘major swap participant’ has the same meaning as in 
section 1a(39) of the Commodity Exchange Act (7 
U.S.C. 1a(39)). 
‘‘(67) 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— 
‘‘(i) maintains a substantial net posi-
tion in outstanding security-based swaps, 
excluding positions held primarily for hedg-
ing, reducing or otherwise mitigating its 
commercial risk, including operating and 
balance sheet risk; or
698 
‘‘(ii) whose outstanding security-based 
swaps create substantial net counterparty 
exposure among the aggregate of its 
counterparties that could expose those 
counterparties to significant credit losses. 
‘‘(B) DEFINITION OF ‘SUBSTANTIAL NET 
POSITION’.—The Commission shall define by 
rule or regulation the terms ‘substantial net po-
sition’, ‘substantial net counterparty exposure’, 
and ‘significant credit losses’ at thresholds that 
the Commission determines prudent for the ef-
fective monitoring, management and oversight 
of entities which are systemically important or 
can significantly impact the financial system 
through counterparty credit risk. In setting the 
definitions, the Commission shall consider the 
person’s relative position in uncleared as op-
posed to cleared swaps. 
‘‘(C) A person may be designated a major 
security-based swap participant for 1 or more 
individual types of security-based swaps without 
being classified as a major security-based swap 
participant for all classes of security-based 
swaps. 
‘‘(68) SECURITY-BASED SWAP.—
699 
‘‘(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 section 
1a(35) of the Commodity Exchange Act, and 
that— 
‘‘(i) is primarily based on an index 
that is a narrow-based security index, in-
cluding any interest therein or based on 
the value thereof; 
‘‘(ii) is primarily based on a single se-
curity or loan, including any interest there-
in or based on the value thereof; or 
‘‘(iii) is primarily based on the occur-
rence, non-occurrence, or extent of the oc-
currence of an event relating to a single 
issuer of a security or the issuers of securi-
ties in a narrow-based security index, pro-
vided that such event must directly affect 
the financial statements, financial condi-
tion, or financial obligations of the issuer. 
‘‘(B) RULE OF CONSTRUCTION REGARDING 
MASTER
AGREEMENTS.—The term ‘security- 
based swap’ shall be construed to include a 
master agreement that provides for an agree-
700 
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 
the master agreement that is a security-based 
swap pursuant to subparagraph (A). 
‘‘(C) EXCLUSION.—The term ‘security- 
based swap’ does not include any agreement, 
contract, or transaction that meets the defini-
tion of a security-based swap only because it 
references, is based upon, or settles through the 
transfer, delivery, or receipt of an exempted se-
curity under section 3(a)(12) of the Securities 
Exchange Act of 1934 as in effect on the date 
of enactment of the Futures Trading Act of 
1982 (other than any municipal security as de-
fined in section 3(a)(29) as in effect on the date 
of enactment of the Futures Trading Act of 
1982), unless such agreement, contract, or
701 
transaction is of the character of, or is com-
monly known in the trade as, a put, call, or 
other option. 
‘‘(69) SWAP.—The term ‘swap’ has the same 
meaning as in section 1a(35) of the Commodity Ex-
change Act (7 U.S.C. 1a(35)). 
‘‘(70) PERSON ASSOCIATED WITH A SECURITY- 
BASED SWAP DEALER OR MAJOR SECURITY-BASED 
SWAP PARTICIPANT.—The term ‘person associated 
with a security-based swap dealer or major security- 
based swap participant’ or ‘associated person of a 
security-based swap dealer or major security-based 
swap participant’ means any partner, officer, direc-
tor, or branch manager of such security-based swap 
dealer or major security-based 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 security-based swap dealer or major secu-
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
702 
meaning of such term other than for purposes of 
section 15F(e)(2). 
‘‘(71) SECURITY-BASED SWAP DEALER.— 
‘‘(A) IN
GENERAL.—The term ‘security- 
based swap dealer’ means any person that— 
‘‘(i) holds itself out as a dealer in se-
curity-based swaps; 
‘‘(ii) makes a market in security-based 
swaps; 
‘‘(iii) regularly engages in the pur-
chase of security-based swaps and their re-
sale to customers in the ordinary course of 
a business; or 
‘‘(iv) engages in any activity causing 
it to be commonly known in the trade as 
a dealer or market maker in security-based 
swaps. 
‘‘(B) DESIGNATION BY TYPE OR CLASS.— 
A person may be designated a security-based 
swap dealer for a single type or single class or 
category of security-based swap and considered 
not a security-based swap dealer for other 
types, classes, or categories of security-based 
swaps.
703 
‘‘(C) DE MINIMUS EXCEPTION.—The Com-
mission shall make a determination to exempt 
from designation as a security-based swap deal-
er an entity that engages in a de minimus 
amount of security-based swap dealing in con-
nection with transactions with or on the behalf 
of its customers. 
‘‘(72) 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)). 
‘‘(73) BOARD.—The term ‘Board’ means the 
Board of Governors of the Federal Reserve System. 
‘‘(74) 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
705 
‘‘(B) EXCLUSIONS.—The term ‘security- 
based swap agreement’ does not include any se-
curity-based swap. 
‘‘(76) SECURITY-BASED
SWAP
REPOSITORY.— 
The term ‘security-based swap repository’ means any 
person that collects, calculates, prepares or main-
tains information or records with respect to trans-
actions or positions in, or the terms and conditions 
of, security-based swaps entered into by third par-
ties. 
‘‘(77) SWAP EXECUTION FACILITY.—The term 
‘swap execution facility’ means a person or entity 
that facilitates the execution or trading of security- 
based swaps between two persons through any 
means of interstate commerce, but which is not a 
national securities exchange, including any electronic 
trade execution or voice brokerage facility.’’. 
(b) AUTHORITY TO FURTHER DEFINE TERMS.—The 
Securities and Exchange Commission may adopt a rule 
further defining the terms ‘‘security-based swap’’, ‘‘secu-
rity-based swap dealer’’, ‘‘major security-based swap par-
ticipant’’, and ‘‘eligible contract participant’’ with regard 
to security-based swaps (as such terms are defined in the 
amendments made by subsection (a)) for the purpose of
706 
including transactions and entities that have been struc-
tured to evade this title. 
SEC. 3202. REPEAL OF PROHIBITION ON REGULATION OF 
SECURITY-BASED SWAPS. 
(a) REPEAL OF LAW.—Section 206B of the Gramm- 
Leach-Bliley Act (15 U.S.C. 78c note) is repealed. 
(b) CONFORMING AMENDMENTS TO THE SECURITIES 
ACT OF 1933.— 
(1) Section 2A(b) of the Securities Act of 1933 
(15 U.S.C. 77b–1) is amended by striking ‘‘(as de-
fined in section 206B of the Gramm-Leach-Bliley 
Act)’’ each place that such term appears. 
(2) Section 17 of the Securities Act of 1933 (15 
U.S.C. 77q) is amended— 
(A) in subsection (a)— 
(i) by inserting ‘‘(including security- 
based swaps)’’ after ‘‘securities’’; and 
(ii) by striking ‘‘206B of the Gramm- 
Leach-Bliley Act’’ and inserting ‘‘3(a)(76) 
of the Securities Exchange Act of 1934’’; 
and 
(B) in subsection (d), by striking ‘‘206B of 
the Gramm-Leach-Bliley Act’’ and inserting 
‘‘3(a)(76) of the Securities Exchange Act of 
1934’’.
707 
(c) CONFORMING AMENDMENTS TO THE SECURITIES 
EXCHANGE ACT OF 1934.—The Securities Exchange Act 
of 1934 (15 U.S.C. 78a et seq.) is amended as follows: 
(1) Section 3A (15 U.S.C. 78c–1) is amended 
by striking ‘‘(as defined in section 206B of the 
Gramm-Leach-Bliley Act)’’ each place that the term 
appears. 
(2) Section 9(a) (15 U.S.C. 78i(a)) is amended 
by striking paragraphs (2) through (5) and insert-
ing: 
‘‘(2) To effect, alone or with one or more other per-
sons, a series of transactions in any security registered 
on a national securities exchange or in connection with 
any security-based swap or security-based swap agreement 
with respect to such security creating actual or apparent 
active trading in such security, or raising or depressing 
the price of such security, for the purpose of inducing the 
purchase or sale of such security by others. 
‘‘(3) If a dealer, broker, security-based swap dealer, 
major security-based swap participant or other person sell-
ing or offering for sale or purchasing or offering to pur-
chase the security, or a security-based swap or security- 
based swap agreement with respect to such security, to 
induce the purchase or sale of any security registered on 
a national securities exchange or any security-based swap
708 
or security-based swap agreement with respect to such se-
curity by the circulation or dissemination in the ordinary 
course of business of information to the effect that the 
price of any such security will or is likely to rise or fall 
because of market operations of any one or more persons 
conducted for the purpose of raising or depressing the 
price of such security. 
‘‘(4) If a dealer, broker, security-based swap dealer, 
major security-based swap participant or other person sell-
ing or offering for sale or purchasing or offering to pur-
chase the security, or a security-based swap or security- 
based swap agreement with respect to such security, to 
make, regarding any security registered on a national se-
curities exchange or any security-based swap or security- 
based swap agreement with respect to such security, for 
the purpose of inducing the purchase or sale of such secu-
rity or such security-based swap or security-based swap 
agreement, any statement which was at the time and in 
the light of the circumstances under which it was made, 
false or misleading with respect to any material fact, and 
which he knew or had reasonable ground to believe was 
so false or misleading. 
‘‘(5) For a consideration, received directly or indi-
rectly from a dealer, broker, security-based swap dealer, 
major security-based swap participant or other person sell-
709 
ing or offering for sale or purchasing or offering to pur-
chase the security, or a security-based swap or security- 
based swap agreement with respect to such security, to 
induce the purchase of any security registered on a na-
tional securities exchange or any security-based swap or 
security-based swap agreement with respect to such secu-
rity by the circulation or dissemination of information to 
the effect that the price of any such security will or is 
likely to rise or fall because of the market operations of 
any one or more persons conducted for the purpose of rais-
ing or depressing the price of such security.’’. 
(3) Section 9(i) (15 U.S.C. 78i(i)) is amended 
by striking ‘‘(as defined in section 206B of the 
Gramm-Leach-Bliley Act)’’; 
(4) Section 10 (15 U.S.C. 78j) is amended by 
striking ‘‘(as defined in section 206B of the Gramm- 
Leach-Bliley Act)’’ each place that the term appears. 
(5) Section 15(c)(1) is amended— 
(A) in subparagraph (A), by striking ‘‘, or 
any security-based swap agreement (as defined 
in section 206B of the Gramm-Leach-Bliley 
Act),’’; and 
(B) in subparagraphs (B) and (C), by 
striking ‘‘agreement (as defined in section 206B
710 
of the Gramm-Leach-Bliley Act)’’ in each place 
that the term appears. 
(6) Section 15(i) (15 U.S.C. 78o(i), as added 
by section 303(f) of the Commodity Futures Mod-
ernization Act of 2000 (Public Law 106–554; 114 
Stat. 2763A–455) is amended by striking ‘‘(as de-
fined in section 206B of the Gramm-Leach-Bliley 
Act)’’. 
(7) Section 16 (15 U.S.C. 78p) is amended— 
(A) in subsection (a)(2)(C), by striking 
‘‘(as defined in section 206(b) of the Gramm- 
Leach-Bliley Act (15 U.S.C. 78c note))’’; 
(B) in subsection (b), by striking ‘‘(as de-
fined in section 206B of the Gramm-Leach-Bli-
ley Act)’’ in each place that the term appears; 
and 
(C) in subsection (g), by striking ‘‘(as de-
fined in section 206B of the Gramm-Leach-Bli-
ley Act)’’; 
(8) Section 20 (15 U.S.C. 78t) is amended— 
(A) in subsection (d), by striking ‘‘(as de-
fined in section 206B of the Gramm-Leach-Bli-
ley Act)’’; and
711 
(B) in subsection (f), by striking ‘‘(as de-
fined in section 206B of the Gramm-Leach-Bli-
ley Act)’’; and 
(9) Section 21A (15 U.S.C. 78u–1) is amend-
ed— 
(A) in subsection (a)(1), by striking ‘‘(as 
defined in section 206B of the Gramm-Leach- 
Bliley Act)’’; and 
(B) in subsection (g), by striking ‘‘(as de-
fined in section 206B of the Gramm-Leach-Bli-
ley Act)’’. 
SEC. 3203. AMENDMENTS TO THE SECURITIES EXCHANGE 
ACT OF 1934. 
(a) CLEARING FOR SECURITY-BASED SWAPS.—The 
Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) 
is amended by adding the following section after section 
3A: 
‘‘SEC. 3B. CLEARING FOR SECURITY-BASED SWAPS. 
‘‘(a) IN GENERAL.— 
‘‘(1) STANDARD
FOR
CLEARING.—A security- 
based swap shall be submitted for clearing if a clear-
ing agency that is registered under this Act will ac-
cept the security-based swap for clearing, and the 
Commission 
has 
determined 
under 
paragraph
712 
(2)(B)(ii) of subsection (b) that the security-based 
swap is required to be cleared. 
‘‘(2) OPEN ACCESS.—The rules of a clearing 
agency described in paragraph (1) shall— 
‘‘(A) prescribe that all security-based 
swaps submitted to the clearing agency with the 
same terms and conditions are economically 
equivalent within the clearing agency and may 
be offset with each other within the clearing 
agency; and 
‘‘(B) provide for non-discriminatory clear-
ing of a security-based swap executed bilaterally 
or on or through the rules of an unaffiliated na-
tional securities exchange or swap execution fa-
cility. 
‘‘(b) COMMISSION REVIEW.— 
‘‘(1) COMMISSION-INITIATED REVIEW.— 
‘‘(A) The Commission shall review each se-
curity-based swap, or any group, category, type 
or class of security-based swaps to make a de-
termination that such security-based swap, or 
group, category, type or class of security-based 
swaps should be required to be cleared.
713 
‘‘(B) The Commission shall provide at 
least a 30-day public comment period regarding 
any determination under subparagraph (A). 
‘‘(2) SWAP SUBMISSIONS.— 
‘‘(A) A clearing agency shall submit to the 
Commission each security-based swap, or any 
group, category, type or class of security-based 
swaps that it plans to accept for clearing and 
provide notice to its members (in a manner to 
be determined by the Commission) of such sub-
mission. 
‘‘(B) The Commission shall— 
‘‘(i) make available to the public any 
submission received under subparagraph 
(A); 
‘‘(ii) review each submission made 
under subparagraph (A), and determine 
whether the security-based swap, or group, 
category, type, or class of security-based 
swaps, described in the submission is re-
quired to be cleared; and 
‘‘(iii) provide at least a 30-day public 
comment period regarding its determina-
tion whether the clearing requirement
714 
under subsection (a)(1) shall apply to the 
submission. 
‘‘(3) DEADLINE.—The Commission shall make 
its determination under paragraph (2)(B) not later 
than 90 days after receiving a submission made 
under paragraph (2)(A), unless the submitting clear-
ing agency agrees to an extension for the time limi-
tation established under this paragraph. 
‘‘(4) DETERMINATION.— 
‘‘(A) In reviewing a submission made 
under paragraph (2), the Commission shall re-
view whether the submission is consistent with 
section 5b(c)(2). 
‘‘(B) In reviewing a security-based swap, 
group of security-based swaps or class of secu-
rity-based swaps pursuant to paragraph (1) or 
a submission made under paragraph (2), the 
Commission shall take into account the fol-
lowing factors: 
‘‘(i) The existence of significant out-
standing notional exposures, trading liquid-
ity and adequate pricing data. 
‘‘(ii) The availability of rule frame-
work, capacity, operational expertise and 
resources, and credit support infrastruc-
715 
ture to clear the contract on terms that are 
consistent with the material terms and 
trading conventions on which the contract 
is then traded. 
‘‘(iii) The effect on the mitigation of 
systemic risk, taking into account the size 
of the market for such contract and the re-
sources of the clearing agency available to 
clear the contract. 
‘‘(iv) The effect on competition, in-
cluding appropriate fees and charges ap-
plied to clearing. 
‘‘(v) The existence of reasonable legal 
certainty in the event of the insolvency of 
the relevant clearing agency or 1 or more 
of its clearing members with regard to the 
treatment of customer and security-based 
swap counterparty positions, funds, and 
property. 
‘‘(C) In making a determination under 
paragraph (2)(B) that the clearing requirement 
shall apply, the Commission may require such 
terms and conditions to the requirement as the 
Commission determines to be appropriate.
716 
‘‘(5) RULES.—Not later than 1 year after the 
date of the enactment of the Derivative Markets 
Transparency and Accountability Act of 2009, the 
Commission shall adopt rules for a clearing agency’s 
submission for review, pursuant to this subsection, 
of a security-based swap, or a group, category, type 
or class of security-based swaps, that it seeks to ac-
cept for clearing. 
‘‘(c) STAY OF CLEARING REQUIREMENT.— 
‘‘(1) After an determination pursuant to sub-
section (b)(2), the Commission, on application of a 
counterparty to a security-based swap or on its own 
initiative, may stay the clearing requirement of sub-
section (a)(1) until the Commission completes a re-
view of the terms of the security-based swap (or the 
group, category, type or class of security-based 
swaps) and the clearing arrangement. 
‘‘(2) DEADLINE.—The Commission shall com-
plete a review undertaken pursuant to paragraph (1) 
not later than 90 days after issuance of the stay, un-
less the clearing agency that clears the security- 
based swap, or group, category, type or class of se-
curity-based swaps, agrees to an extension of the 
time limitation established under this paragraph.
717 
‘‘(3) DETERMINATION.—Upon completion of 
the review undertaken pursuant to paragraph (1), 
the Commission may— 
‘‘(A) determine, unconditionally or subject 
to such terms and conditions as the Commis-
sion determines to be appropriate, that the se-
curity-based swap, or group, category, type or 
class of security-based swaps, must be cleared 
pursuant to this subsection if it finds that such 
clearing is consistent with subsection (b)(4); or 
‘‘(B) determine that the clearing require-
ment of subsection (a)(1) shall not apply to the 
security-based swap, or group, category, type or 
class of security-based swaps. 
‘‘(4) RULES.—Not later than 1 year after the 
date of the enactment of the Derivative Markets 
Transparency and Accountability Act of 2009, the 
Commission shall adopt rules for reviewing, pursu-
ant to this subsection, a clearing agency’s clearing of 
a security-based swap, or a group, category, type or 
class of security-based swaps, that it has accepted 
for clearing. 
‘‘(d) PREVENTION OF EVASION.—The Commission 
may prescribe rules under this subsection, or issue inter-
718 
pretations of the rules, as necessary to prevent evasions 
of this section. 
‘‘(e) REQUIRED REPORTING.— 
‘‘(1) IN
GENERAL.—All security-based swaps 
that are not accepted for clearing by any clearing 
agency shall be reported either to a security-based 
swap repository described in subsection 13(n) or, if 
there is no security-based swap repository that 
would accept the security-based swap, to the Com-
mission pursuant to section 13A within such time 
period as the Commission may by rule or regulation 
prescribe. Counterparties to a security-based swap 
may agree which counterparty will report the secu-
rity-based swap as required by this paragraph. 
‘‘(2) SWAP
DEALER
DESIGNATION.—With re-
gard 
to 
security-based 
swaps 
where 
only 
counterparty is a security-based swap dealer, the se-
curity-based swap dealer shall report the security- 
based swap as required by this subsection. 
‘‘(f) REPORTING TRANSITION RULES.—Rules adopt-
ed by the Commission under this section shall provide for 
the reporting of data, as follows: 
‘‘(1) Security-based swaps entered into before 
the date of the enactment of this section shall be re-
ported to a registered security-based swap repository
719 
or the Commission no later than 180 days after the 
effective date of this section; and 
‘‘(2) Security-based swaps entered into on or 
after such date of enactment shall be reported to a 
registered security-based swap repository or the 
Commission no later than the later of— 
‘‘(A) 90 days after such effective date; or 
‘‘(B) such other time after entering into 
the security-based swap as the Commission may 
prescribe by rule or regulation. 
‘‘(g) CLEARING TRANSITION RULES.— 
‘‘(1) Security-based swaps entered into before 
the date of the enactment of this section are exempt 
from the clearing requirements of this subsection if 
reported pursuant to subsection (f)(1). 
‘‘(2) Security-based swaps entered into before 
application of the clearing requirement pursuant to 
this section are exempt from the clearing require-
ments of this section if reported pursuant to sub-
section (f)(2). 
‘‘(h) EXCEPTIONS.— 
‘‘(1) IN GENERAL.—The requirements of sub-
section (a)(1) shall not apply to a security-based 
swap if one of the counterparties to the security- 
based swap—
720 
‘‘(A) is not a security-based swap dealer or 
major security-based swap participant; 
‘‘(B) is using security-based swaps to 
hedge or mitigate commercial risk, including 
operating or balance sheet risk; and 
‘‘(C) notifies the Commission, in a manner 
set forth by the Commission, how it generally 
meets its financial obligations associated with 
entering into non-cleared security-based swaps. 
‘‘(2) ABUSE OF EXCEPTION.—The Commission 
may prescribe rules under this subsection, or issue 
interpretations of the rules, as necessary to prevent 
abuse of the exemption in paragraph (1) by security- 
based swap dealers and major security-based swap 
participants. 
‘‘(3) OPTION
TO
CLEAR.—The application of 
the clearing exception in paragraph (1) is solely at 
the discretion the counterparty to the swap that 
meets the conditions of subparagraphs (A) through 
(C) of paragraph (1).’’. 
(b) CLEARING AGENCY REQUIREMENTS.—Section 
17A of the Securities Exchange Act of 1934 (15 U.S.C. 
78q) is amended by adding at the end the following new 
subsections:
721 
‘‘(g) REGISTRATION REQUIREMENT.—It shall be un-
lawful for a clearing agency, unless registered with the 
Commission, directly or indirectly to make use of the mails 
or any means or instrumentality of interstate commerce 
to perform the functions of a clearing agency with respect 
to a swap. 
‘‘(h) VOLUNTARY REGISTRATION.—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 clearing agency. 
‘‘(i) EXISTING BANKS AND DERIVATIVES CLEARING 
ORGANIZATIONS.—A bank or a derivatives clearing orga-
nization registered with the Commodity Futures Trading 
Commission under the Commodity Exchange Act required 
to be a registered as a clearing agency under this title, 
solely because it clears security-based swaps, is deemed to 
be a registered clearing agency under this title solely for 
the purpose of clearing security-based swaps to the extent 
that the bank cleared security-based swaps, as defined in 
this Act, as a multilateral clearing organization or the de-
rivatives clearing organization cleared security-based 
swaps, as defined in this title pursuant to an exemption 
from registration as a clearing agency, before the enact-
ment of this section. A bank or derivative clearing organi-
zation to which this subsection applies shall continue to
722 
comply with the requirements in section 17A(b)(3) of this 
title. A bank to which this subsection applies may, by the 
vote of the shareholders owning not less than 51 percent 
of the voting interests of such bank, be converted into a 
State corporation, partnership, limited liability company, 
or other similar legal form pursuant to a plan of conver-
sion, if the conversion is not in contravention of applicable 
State law. 
‘‘(j) REPORTING.— 
‘‘(1) IN
GENERAL.—A clearing agency that 
clears security-based swaps shall provide to the 
Commission all information determined by the Com-
mission to be necessary to perform its responsibil-
ities under this Act. The Commission shall adopt 
data collection and maintenance requirements for se-
curity-based swaps cleared by clearing agencies that 
are comparable to the corresponding requirements 
for security-based swaps accepted by security-based 
swap repositories and security-based swaps traded 
on swap execution facilities. Subject to section 24, 
the Commission shall share such information, upon 
request, with the Board, the Commodity Futures 
Trading Commission, the appropriate Federal bank-
ing agencies, the Financial Services Oversight Coun-
cil, and the Department of Justice or to other per-
723 
sons the Commission deems appropriate, including 
foreign financial supervisors (including foreign fu-
tures authorities), foreign central banks, and foreign 
ministries. 
‘‘(2) PUBLIC INFORMATION.—A clearing agency 
that clears security-based swaps shall provide to the 
Commission, or its designee, such information as is 
required by, and in a form and at a frequency to be 
determined by, the Commission, in order to comply 
with the public reporting requirements contained in 
section 13. 
‘‘(k) DESIGNATION OF COMPLIANCE OFFICER.— 
‘‘(1) IN GENERAL.—Each clearing agency that 
clears security-based swaps shall designate an indi-
vidual to serve as a compliance officer. 
‘‘(2) DUTIES.—The compliance officer shall— 
‘‘(A) report directly to the board or to the 
senior officer of the clearing agency; 
‘‘(B) in consultation with the board of the 
clearing agency, a body performing a function 
similar to that of a board, or the senior officer 
of the clearing agency, resolve any conflicts of 
interest that may arise;
724 
‘‘(C) be responsible for administering the 
policies and procedures required to be estab-
lished pursuant to this section; 
‘‘(D) ensure compliance with securities 
laws and the rules and regulations issued there-
under, including rules prescribed by the Com-
mission pursuant to this section; and 
‘‘(E) establish procedures for remediation 
of non-compliance issues found during compli-
ance office reviews, lookbacks, internal or exter-
nal audit findings, self-reported errors, or 
through validated complaints. Procedures will 
establish the handling, management response, 
remediation, re-testing, and closing of non-com-
pliant issues. 
‘‘(3) ANNUAL REPORTS REQUIRED.—The com-
pliance officer shall annually prepare and sign a re-
port on the compliance of the clearing agency with 
the securities laws and its policies and procedures, 
including its code of ethics and conflict of interest 
policies, in accordance with rules prescribed by the 
Commission. Such compliance report shall accom-
pany the financial reports of the clearing agency 
that are required to be furnished to the Commission 
pursuant to this section and shall include a certifi-
725 
cation that, under penalty of law, the report is accu-
rate and complete. 
‘‘(l) STANDARDS FOR CLEARING AGENCIES CLEAR-
ING SWAP TRANSACTIONS.—To be registered and to main-
tain registration as a clearing agency that clears swap 
transactions, a clearing agency shall comply with such 
standards as the Commission may establish by rule. In 
establishing any such standards, and in the exercise of its 
oversight of such a clearing agency pursuant to this title, 
the Commission may conform such standards or oversight 
to reflect evolving United States and international stand-
ards. Except where the Commission determines otherwise 
by rule or regulation, a clearing agency shall have reason-
able discretion in establishing the manner in which it com-
plies with any such standards. 
‘‘(m) RULES.—Not later than 1 year after the date 
of the enactment of the Derivative Markets Transparency 
and Accountability Act of 2009, the Commission shall 
adopt rules governing persons that are registered as clear-
ing agencies for security-based swaps under this Act. 
‘‘(n) EXEMPTIONS.— 
‘‘(1) IN GENERAL.—The Commission may ex-
empt, conditionally or unconditionally, a clearing 
agency from registration under this section for the 
clearing of security-based swaps if the Commission
726 
finds that such clearing agency is subject to com-
parable, comprehensive supervision and regulation 
on a consolidated basis by the Commodity Futures 
Trading Commission, a Prudential Regulator, or the 
appropriate governmental authorities in the organi-
zation’s home country or if necessary or appropriate 
in the public interest and consistent with the pur-
pose of this Act. 
‘‘(2) A person that is required to be registered 
as clearing agency under this section, whose prin-
cipal business is clearing commodity futures and op-
tions on commodity futures transactions and which 
is a derivatives clearing organization registered with 
the Commodity Futures Trading Commission under 
the Commodity Exchange Act (7 U.S.C. 1 et seq.), 
shall be unconditionally exempt from registration 
under this section solely for the purpose of clearing 
security-based swaps, unless the Commission finds 
that such derivatives clearing organization is not 
subject to comparable, comprehensive supervision 
and regulation by the Commodity Futures Trading 
Commission.’’. 
(c) EXECUTION OF SECURITY-BASED SWAPS.—The 
Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) 
is amended by inserting after section 5 the following:
727 
‘‘SEC. 5A. EXECUTION OF SECURITY-BASED SWAPS. 
‘‘(a) EXECUTION TRANSPARENCY.— 
‘‘(1) REQUIREMENT.—A security-based swap 
that is subject to the clearing requirement of section 
3B shall not be traded except on or through a na-
tional securities exchange or on or through an swap 
execution facility registered under section 5h, that 
makes the security-based swap available for trading. 
‘‘(2) EXCEPTIONS.—The requirement of para-
graph (1) shall not apply to a security-based swap 
if no national securities exchange or swap execution 
facility makes the security-based swap available for 
trading. 
‘‘(3) REQUIRED REPORTING.—If the exception 
of paragraph (2) applies and there is no national se-
curities exchange or swap execution facility that 
makes the security-based swap available to trade, 
the counterparties shall comply with any record-
keeping and transaction reporting requirements as 
may be prescribed by the Commission with respect 
to security-based swaps subject to the requirements 
of paragraph (1). 
‘‘(b) EXCHANGE TRADING.—In adopting rules and 
regulations, the Commission shall endeavor to eliminate 
unnecessary impediments to the trading on national secu-
rities exchanges of contracts, agreements, or transactions
728 
that would be swaps but for the trading of such contracts, 
agreements or transactions on such a national securities 
exchange.’’. 
(d) SWAP EXECUTION FACILITIES.—The Securities 
Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended 
by adding after section 3B (as added by subsection (a)) 
the following: 
‘‘SEC. 3C. SWAP EXECUTION FACILITIES. 
‘‘(a) REGISTRATION.—No person may operate a facil-
ity for the trading of security-based swaps unless the facil-
ity is registered as a swap execution facility under this 
section. 
‘‘(b) REQUIREMENTS FOR TRADING.— 
‘‘(1) IN GENERAL.—A swap execution facility 
that is registered under subsection (a) may list for 
trading any security-based swap. 
‘‘(2) RULES FOR TRADING THROUGH THE FA-
CILITY.—Not later than 1 year after the date of the 
enactment of the Derivative Markets Transparency 
and Accountability Act of 2009, the Commission 
shall adopt rules to allow a security-based swap to 
be traded through the facilities of an exchange or a 
swap execution facility. Such rules shall permit an 
intermediary, acting as principal or agent, to enter 
into or execute a security-based swap, notwith-
729 
standing section 3B(b), if the security-based swap is 
reported, recorded, or confirmed in accordance with 
the rules of the exchange or swap execution facility. 
‘‘(c) TRADING BY EXCHANGES.—An exchange shall, 
to the extent that the exchange also operates a swap exe-
cution facility and uses the same electronic trade execution 
system for trading on the exchange and the swap execu-
tion facility, identify whether the electronic trading is tak-
ing place on the exchange or the swap execution facility. 
‘‘(d) CORE PRINCIPLES FOR SWAP EXECUTION FA-
CILITIES.— 
‘‘(1) IN GENERAL.—To be registered as, and to 
maintain its registration as, a swap execution facil-
ity, the facility shall comply with the core principles 
specified in this subsection and any requirement that 
the Commission may impose by rule or regulation 
pursuant to section 8a(5). Except where the Com-
mission determines otherwise by rule or regulation, 
the facility shall have reasonable discretion in estab-
lishing the manner in which it complies with these 
core principles. 
‘‘(2) COMPLIANCE
WITH
RULES.—The swap 
execution facility shall— 
‘‘(A) monitor and enforce compliance with 
any of the rules of the facility, including the
730 
terms and conditions of the swaps traded on or 
through the facility and any limitations on ac-
cess to the facility; and 
‘‘(B) establish and enforce trading and 
participation rules that will deter abuses and 
have the capacity to detect, investigate, and en-
force those rules, including means to— 
‘‘(i) provide market participants with 
impartial access to the market; and 
‘‘(ii) capture information that may be 
used in establishing whether rule violations 
have occurred. 
‘‘(3) SECURITY-BASED
SWAPS
NOT
READILY 
SUSCEPTIBLE TO MANIPULATION.—The swap execu-
tion facility shall permit trading only in security- 
based swaps that are not readily susceptible to ma-
nipulation. 
‘‘(4) MONITORING
OF
TRADING.—The swap 
execution facility shall— 
‘‘(A) establish and enforce rules or terms 
and conditions defining, or specifications detail-
ing, trading procedures to be used in entering 
and executing orders traded on or through its 
facilities; and
731 
‘‘(B) monitor trading in swaps to prevent 
manipulation, price distortion, and disruptions 
of the delivery or cash settlement process 
through surveillance, compliance, and discipli-
nary practices and procedures, including meth-
ods for conducting real-time monitoring of trad-
ing and comprehensive and accurate trade re-
constructions. 
‘‘(5) ABILITY TO OBTAIN INFORMATION.—The 
swap execution facility shall— 
‘‘(A) establish and enforce rules that will 
allow the facility to obtain any necessary infor-
mation to perform any of the functions de-
scribed in this section; 
‘‘(B) provide the information to the Com-
mission upon request; and 
‘‘(C) have the capacity to carry out such 
international information-sharing agreements as 
the Commission may require. 
‘‘(6) 
FINANCIAL
INTEGRITY
OF
TRANS-
ACTIONS.—The swap execution facility shall estab-
lish and enforce rules and procedures for ensuring 
the financial integrity of security-based swaps en-
tered on or through its facilities, including the clear-
732 
ance and settlement of the security-based swaps pur-
suant to section 3B. 
‘‘(7) EMERGENCY AUTHORITY.—The swap exe-
cution facility shall adopt rules to provide for the ex-
ercise of emergency authority, in consultation or co-
operation with the Commission, where necessary and 
appropriate, including the authority to suspend or 
curtail trading in a security-based swap. 
‘‘(8) TIMELY PUBLICATION OF TRADING INFOR-
MATION.—The swap execution facility shall make 
public timely information on price, trading volume, 
and other trading data to the extent prescribed by 
the Commission. The Commission shall evaluate the 
impact of public disclosure on market liquidity in the 
relevant market, and shall seek to avoid public dis-
closure of information in a manner that would sig-
nificantly reduce market liquidity. The Commission 
shall not disclose information related to the internal 
business decisions of particular market participants. 
‘‘(9) RECORDKEEPING AND REPORTING.—The 
swap execution facility shall maintain records of all 
activities related to the business of the facility, in-
cluding a complete audit trail, in a form and manner 
acceptable to the Commission for a period of 5 
years, and report to the Commission all information
733 
determined by the Commission to be necessary or 
appropriate for the Commission to perform its re-
sponsibilities under this Act in a form and manner 
acceptable to the Commission. The Commission shall 
adopt data collection and reporting requirements for 
swap execution facilities that are comparable to cor-
responding requirements for clearing agencies and 
security-based swap repositories. 
‘‘(10) CONFLICTS
OF
INTEREST.—The swap 
execution facility shall— 
‘‘(A) establish and enforce rules to mini-
mize conflicts of interest in its decision-making 
process; and 
‘‘(B) establish a process for resolving the 
conflicts of interest. 
‘‘(11) FINANCIAL RESOURCES.—The swap exe-
cution facility shall have adequate financial, oper-
ational, and managerial resources to discharge its 
responsibilities. Such financial resources shall be 
considered adequate if their value exceeds the total 
amount that would enable the facility to cover its op-
erating costs for a period of one year, calculated on 
a rolling basis. 
‘‘(12) SYSTEM SAFEGUARDS.—The swap execu-
tion facility shall—
734 
‘‘(A) establish and maintain a program of 
risk analysis and oversight to identify and mini-
mize sources of operational risk, through the 
development of appropriate controls and proce-
dures, and the development of automated sys-
tems, that are reliable, secure, and have ade-
quate scalable capacity; 
‘‘(B) establish and maintain emergency 
procedures, backup facilities, and a plan for dis-
aster recovery that allow for the timely recovery 
and resumption of operations and the fulfill-
ment of the swap execution facility’s respon-
sibilities and obligation; and 
‘‘(C) periodically conduct tests to verify 
that backup resources are sufficient to ensure 
continued order processing and trade matching, 
price reporting, market surveillance, and main-
tenance of a comprehensive and accurate audit 
trail. 
‘‘(13) DESIGNATION
OF
COMPLIANCE
OFFI-
CER.— 
‘‘(A) IN GENERAL.—Each swap execution 
facility shall designate an individual to serve as 
a compliance officer. 
‘‘(B) DUTIES.—The compliance officer—
735 
‘‘(i) shall report directly to the board 
or to the senior officer of the facility; and 
‘‘(ii) shall— 
‘‘(I) review compliance with the 
core principles in section 3B(e). 
‘‘(II) in consultation with the 
board of the facility, a body per-
forming a function similar to that of 
a board, or the senior officer of the 
facility, resolve any conflicts of inter-
est that may arise; 
‘‘(III) be responsible for admin-
istering the policies and procedures 
required to be established pursuant to 
this section; and 
‘‘(IV) ensure compliance with se-
curities laws and the rules and regula-
tions issued thereunder, including 
rules prescribed by the Commission 
pursuant to this section; and 
‘‘(iii) shall establish procedures for re-
mediation of non-compliance issues found 
during 
compliance 
office 
reviews, 
lookbacks, internal or external audit find-
ings, self-reported errors, or through vali-
736 
dated complaints and to establish the han-
dling, management response, remediation, 
re-testing, and closing of non-compliant 
issues. 
‘‘(C) ANNUAL REPORTS REQUIRED.—The 
compliance officer shall annually prepare and 
sign a report on the compliance of the facility 
with the securities laws and its policies and pro-
cedures, including its code of ethics and conflict 
of interest policies, in accordance with rules 
prescribed by the Commission. Such compliance 
report shall accompany the financial reports of 
the facility that are required to be furnished to 
the Commission pursuant to this section and 
shall include a certification that, under penalty 
of law, the report is accurate and complete. 
‘‘(e) EXEMPTIONS.—The Commission may exempt, 
conditionally or unconditionally, a swap execution facility 
from registration under this section if the Commission 
finds that such organization is subject to comparable, 
comprehensive supervision and regulation on a consoli-
dated basis by the Commodity Futures Trading Commis-
sion, a Prudential Regulator or the appropriate govern-
mental authorities in the organization’s home country or
737 
if necessary or appropriate in the public interest and con-
sistent with the purpose of this Act. 
‘‘(f) RULES.—Not later than 1 year after the date 
of the enactment of the Derivative Markets Transparency 
and Accountability Act of 2009, the Commission shall pre-
scribe rules governing the regulation of swap execution fa-
cilities under this section.’’. 
(e) SEGREGATION OF ASSETS HELD AS COLLATERAL 
IN SWAP TRANSACTIONS.—The Securities Exchange Act 
of 1934 (15 U.S.C. 78a et seq.) is further amended by 
adding after section 3C (as added by subsection (b) the 
following: 
‘‘SEC. 3D. SEGREGATION OF ASSETS HELD AS COLLATERAL 
IN SECURITY-BASED SWAP TRANSACTIONS. 
‘‘(a) OVER-THE-COUNTER SWAPS.—At the request of 
a counterparty to a security-based swap who provides 
funds or other property to a security-based swap dealer 
as initial margin or collateral to secure the obligations of 
the counterparty under a security-based swap between the 
counterparty and the security-based swap dealer that is 
not submitted for clearing to a derivatives clearing agency, 
the security-based swap dealer shall segregate the funds 
or other property for the benefit of the counterparty, and 
maintain the funds or other property in an account which 
is carried by a third-party custodian and designated as
738 
a segregated account for the counterparty, in accordance 
with such rules and regulations as the Commission or Pru-
dential Regulator may prescribe. If a security-based swap 
counterparty is a security-based swap dealer or major se-
curity-based swap participant who owns more than 20 per-
cent of, or has more than 50 percent representation on 
the board of directors of a custodian, the custodian shall 
not be considered independent from the security-based 
swap counterparties for purposes of the preceding sen-
tence. This subsection shall not be interpreted to preclude 
commercial arrangements regarding the investment of the 
segregated funds or other property and the related alloca-
tion of gains and losses resulting from any such invest-
ment. 
‘‘(b) FURTHER AUDIT REPORTING.—If a security- 
based swap dealer does not segregate funds pursuant to 
the request of a security-based swap counterparty in ac-
cordance with subsection (a), the security-based swap 
dealer shall report to its counterparty on a quarterly basis 
that its procedures relating to margin and collateral re-
quirements are in compliance with the agreement of the 
counterparties.’’. 
(f) TRADING IN SECURITY-BASED SWAPS.—Section 6 
of the Securities Exchange Act of 1934 (15 U.S.C. 78f) 
is amended by adding at the end the following:
739 
‘‘(l) It shall be unlawful for any person to effect a 
transaction in a security-based swap with or for a person 
that is not an eligible contract participant unless such 
transaction is effected on a national securities exchange 
registered pursuant to subsection (b).’’. 
(g) ADDITIONS OF SECURITY-BASED SWAPS TO CER-
TAIN
ENFORCEMENT
PROVISIONS.—Paragraphs 
(1) 
through (3) of section 9(b) of the Securities Exchange Act 
of 1934 (15 U.S.C. 78i(b)(1)–(3)) are amended to read 
as follows: 
‘‘(1) any transaction in connection with any se-
curity whereby any party to such transaction ac-
quires (A) any put, call, straddle, or other option or 
privilege of buying the security from or selling the 
security to another without being bound to do so; 
(B) any security futures product on the security; or 
(C) any security-based swap involving the security or 
the issuer of the security; or 
‘‘(2) any transaction in connection with any se-
curity with relation to which he has, directly or indi-
rectly, any interest in any (A) such put, call, strad-
dle, option, or privilege; (B) such security futures 
product; or (C) such security-based swap; or 
‘‘(3) any transaction in any security for the ac-
count of any person who he has reason to believe
740 
has, and who actually has, directly or indirectly, any 
interest in any (A) such put, call, straddle, option, 
or privilege; (B) such security futures product with 
relation to such security; or (C) any security-based 
swap involving such security or the issuer of such se-
curity.’’. 
(h) RULEMAKING AUTHORITY TO PREVENT FRAUD, 
MANIPULATION AND DECEPTIVE CONDUCT IN SECURITY- 
BASED SWAPS.—Section 9 of the Securities Exchange Act 
of 1934 (15 U.S.C. 78i) is amended by adding at the end 
the following: 
‘‘(i) It shall be unlawful for any person, directly or 
indirectly, by the use of any means or instrumentality of 
interstate commerce or of the mails, or of any facility of 
any national securities exchange, to effect any transaction 
in, or to induce or attempt to induce the purchase or sale 
of, any security-based swap, in connection with which such 
person engages in any fraudulent, deceptive, or manipula-
tive act or practice, makes any fictitious quotation, or en-
gages in any transaction, practice, or course of business 
which operates as a fraud or deceit upon any person. The 
Commission shall, for the purposes of this paragraph, by 
rules and regulations define, and prescribe means reason-
ably designed to prevent, such transactions, acts, prac-
741 
tices, and courses of business as are fraudulent, deceptive, 
or manipulative, and such quotations as are fictitious.’’. 
(i) POSITION
LIMITS
AND
POSITION
ACCOUNT-
ABILITY FOR SECURITY-BASED SWAPS.—The Securities 
Exchange Act of 1934 is amended by inserting after sec-
tion 10A (15 U.S.C. 78j–1) the following new section: 
‘‘SEC. 10B. POSITION LIMITS AND POSITION ACCOUNT-
ABILITY FOR SECURITY-BASED SWAPS AND 
LARGE TRADER REPORTING. 
‘‘(a) POSITION LIMITS.—As a means reasonably de-
signed to prevent fraud and manipulation, the Commission 
may, by rule or regulation, as necessary or appropriate 
in the public interest or for the protection of investors, 
establish limits (including related hedge exemption provi-
sions) on the size of positions in any security-based swap 
that may be held by any person. In establishing such lim-
its, the Commission may require any person to aggregate 
positions in— 
‘‘(1) any security-based swap and any security 
or loan or group or index of securities or loans on 
which such security-based swap is based, which such 
security-based swap references, or to which such se-
curity-based swap is related as described in section 
3(a)(68), and any other instrument relating to such
742 
security or loan or group or index of securities or 
loans; or 
‘‘(2) any security-based swap and (A) any secu-
rity or group or index of securities, the price, yield, 
value, or volatility of which, or of which any interest 
therein, is the basis for a material term of such se-
curity-based swap as described in section 3(a)(76) 
and (B) any security-based swap and any other in-
strument relating to the same security or group or 
index of securities. 
‘‘(b) EXEMPTIONS.—The Commission, by rule, regu-
lation, or order, may conditionally or unconditionally ex-
empt any person or class of persons, any security-based 
swap or class of security-based swaps, or any transaction 
or class of transactions from any requirement it may es-
tablish under this section with respect to position limits. 
‘‘(c) SRO RULES.— 
‘‘(1) IN GENERAL.—As a means reasonably de-
signed to prevent fraud or manipulation, the Com-
mission, by rule, regulation, or order, as necessary 
or appropriate in the public interest, for the protec-
tion of investors, or otherwise in furtherance of the 
purposes of this title, may direct a self-regulatory 
organization—
743 
‘‘(A) to adopt rules regarding the size of 
positions in any security-based swap that may 
be held by— 
‘‘(i) any member of such self-regu-
latory organization; or 
‘‘(ii) any person for whom a member 
of such self-regulatory organization effects 
transactions in such security-based swap; 
and 
‘‘(B) to adopt rules reasonably designed to 
ensure compliance with requirements prescribed 
by the Commission under subsection (c)(1)(A). 
‘‘(2) REQUIREMENT
TO
AGGREGATE
POSI-
TIONS.—In establishing such limits, the self-regu-
latory organization may require such member or per-
son to aggregate positions in— 
‘‘(A) any security-based swap and any se-
curity or loan or group or index of securities or 
loans on which such security-based swap is 
based, which such security-based swap ref-
erences, or to which such security-based swap is 
related as described in section 3(a)(68), and 
any other instrument relating to such security 
or loan or group or index of securities or loans; 
or
744 
‘‘(B)(i) any security-based swap; and 
‘‘(ii) any security-based swap and any 
other instrument relating to the same security 
or group or index of securities. 
‘‘(d) LARGE TRADER REPORTING.—The Commis-
sion, by rule or regulation, may require any person that 
effects transactions for such person’s own account or the 
account of others in any securities-based swap or 
uncleared security-based swap agreement and any security 
or loan or group or index of securities or loans as set forth 
in paragraphs (1) and (2) of subsection (a) under this sec-
tion to report such information as the Commission may 
prescribe regarding any position or positions in any secu-
rity-based swap or uncleared security-based swap agree-
ment and any security or loan or group or index of securi-
ties or loans and any other instrument relating to such 
security or loan or group or index of securities or loans 
as set forth in paragraphs (1) and (2) of subsection (a) 
under this section.’’. 
(j) PUBLIC REPORTING AND REPOSITORIES FOR SE-
CURITY-BASED SWAPS.—Section 13 of the Securities Ex-
change Act of 1934 (15 U.S.C. 78m) is amended by add-
ing at the end the following: 
‘‘(m) PUBLIC REPORTING OF AGGREGATE SECURITY- 
BASED SWAP DATA.—
745 
‘‘(1) IN GENERAL.—The Commission, or a per-
son designated by the Commission pursuant to para-
graph (2), shall make available to the public, in a 
manner that does not disclose the business trans-
actions and market positions of any person, aggre-
gate data on security-based swap trading volumes 
and positions from the sources set forth in para-
graph (3). 
‘‘(2) DESIGNEE
OF
THE
COMMISSION.—The 
Commission may designate a clearing agency or a 
security-based swap repository to carry out the pub-
lic reporting described in paragraph (1). 
‘‘(3) SOURCES OF INFORMATION.—The sources 
of the information to be publicly reported as de-
scribed in paragraph (1) are— 
‘‘(A) clearing agencies pursuant to section 
3A; 
‘‘(B) security-based swap repositories pur-
suant to subsection (n); and 
‘‘(C) reports received by the Commission 
pursuant to section 13A. 
‘‘(n) SECURITY-BASED SWAP REPOSITORIES.— 
‘‘(1) REGISTRATION REQUIREMENT.— 
‘‘(A) IN GENERAL.—It shall be unlawful 
for a security-based swap repository, unless reg-
746 
istered with the Commission, directly or indi-
rectly to make use of the mails or any means 
or instrumentality of interstate commerce to 
perform the functions of a security-based swap 
repository. 
‘‘(B) INSPECTION
AND
EXAMINATION.— 
Registered security-based swap repositories 
shall be subject to inspection and examination 
by any representatives of the Commission. 
‘‘(2) STANDARD SETTING.— 
‘‘(A) DATA
IDENTIFICATION.—The Com-
mission shall prescribe standards that specify 
the data elements for each security-based swap 
that shall be collected and maintained by each 
security-based swap repository. 
‘‘(B) DATA
COLLECTION
AND
MAINTE-
NANCE.—The Commission shall prescribe data 
collection and data maintenance standards for 
security-based swap repositories. 
‘‘(C) 
COMPARABILITY.—The 
standards 
prescribed by the Commission under this sub-
section shall be comparable to the data stand-
ards imposed by the Commission on clearing 
agencies that clear security-based swaps.
747 
‘‘(3) DUTIES.—A security-based swap reposi-
tory shall— 
‘‘(A) accept data prescribed by the Com-
mission for each security-based swap under this 
paragraph (2); 
‘‘(B) maintain such data in such form and 
manner and for such period as may be required 
by the Commission; 
‘‘(C) provide to the Commission, or its des-
ignee, such information as is required by, and 
in a form and at a frequency to be determined 
by, the Commission, in order to comply with the 
public reporting requirements contained in sub-
section (m); and 
‘‘(D) make available, on a confidential 
basis, all data obtained by the security-based 
swap 
repository, 
including 
individual 
counterparty trade and position data, to the 
Commission, the appropriate Federal banking 
agencies, the Commodity Futures Trading 
Commission, the Financial Services Oversight 
Council, and the Department of Justice or to 
other persons the Commission deems appro-
priate, including foreign financial supervisors
748 
(including foreign futures authorities), foreign 
central banks, and foreign ministries. 
‘‘(4) RULES.—Not later than 1 year after the 
date of the enactment of the Derivative Markets 
Transparency and Accountability Act of 2009, the 
Commission shall adopt rules governing persons that 
are registered under this section, including rules 
that specify the data elements that shall be collected 
and maintained. 
‘‘(5) EXEMPTIONS.—The Commission may ex-
empt, conditionally or unconditionally, a security- 
based swap repository from the requirements of this 
section if the Commission finds that such security- 
based swap repository is subject to comparable, com-
prehensive supervision or regulation on a consoli-
dated basis by the Commodity Futures Trading 
Commission, a Prudential Regulator or the appro-
priate governmental authorities in the organization’s 
home country or if necessary or appropriate in the 
public interest and consistent with the purpose of 
this Act.’’.
749 
SEC. 3204. REGISTRATION AND REGULATION OF SWAP 
DEALERS AND MAJOR SWAP PARTICIPANTS. 
The Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.) is amended by inserting after section 15E (15 
U.S.C. 78o–7) the following: 
‘‘SEC. 15F. REGISTRATION AND REGULATION OF SECURITY- 
BASED SWAP DEALERS AND MAJOR SECU-
RITY-BASED SWAP PARTICIPANTS. 
‘‘(a) REGISTRATION.— 
‘‘(1) It shall be unlawful for any person to act 
as a security-based swap dealer unless such person 
is registered as a security-based swap dealer with 
the Commission. 
‘‘(2) It shall be unlawful for any person to act 
as a major security-based swap participant unless 
such person is registered as a major security-based 
swap participant with the Commission. 
‘‘(b) REQUIREMENTS.— 
‘‘(1) IN GENERAL.—A person shall register as 
a security-based swap dealer or major security-based 
swap participant by filing a registration application 
with the Commission. 
‘‘(2) CONTENTS.—The application shall be 
made in such form and manner as prescribed by the 
Commission, giving any information and facts as the 
Commission may deem necessary concerning the
750 
business in which the applicant is or will be engaged. 
Such person, when registered as a security-based 
swap dealer or major security-based swap partici-
pant, shall continue to report and furnish to the 
Commission such information pertaining to such 
person’s business as the Commission may require. 
‘‘(3) EXPIRATION.—Each registration shall ex-
pire at such time as the Commission may by rule or 
regulation prescribe. 
‘‘(4) RULES.—Except as provided in sub-
sections (c) and (d), the Commission may prescribe 
rules applicable to security-based swap dealers and 
major security-based swap participants, including 
rules that limit the activities of security-based swap 
dealers and major security-based swap participants. 
Except as provided in subsection (d)(1)(A), the 
Commission may provide conditional or uncondi-
tional exemptions from some or all of the rules or 
requirements prescribed under this section for secu-
rity-based swap dealers and major security-based 
swap participants. 
‘‘(5) TRANSITION.—Rules adopted under this 
section shall provide for the registration of security- 
based swap dealers and major security-based swap 
participants no later than 1 year after the effective
751 
date of the Derivative Markets Transparency and 
Accountability Act of 2009. 
‘‘(c) RULES.— 
‘‘(1) IN GENERAL.—Not later than 1 year after 
the date of the enactment of the Derivative Markets 
Transparency and Accountability Act of 2009, the 
Commission shall adopt rules for persons that are 
registered as security-based swap dealers or major 
security-based swap participants under this Act. 
‘‘(2) EXCEPTION FOR PRUDENTIAL REQUIRE-
MENTS.—The Commission shall not prescribe rules 
imposing prudential requirements on security-based 
swap dealers or major security-based swap partici-
pants for which there is a Prudential Regulator. 
This provision shall not be construed as limiting the 
authority of the Commission to prescribe appropriate 
business conduct, reporting, and recordkeeping re-
quirements to protect investors. 
‘‘(d) CAPITAL AND MARGIN REQUIREMENTS.— 
‘‘(1) IN GENERAL.— 
‘‘(A) BANK SECURITY-BASED SWAP DEAL-
ERS AND MAJOR SECURITY-BASED SWAP PAR-
TICIPANTS.—Each 
registered 
security-based 
swap dealer and major security-based swap par-
ticipant for which there is a Prudential Regu-
752 
lator shall meet such minimum capital require-
ments and minimum initial and variation mar-
gin requirements as the Prudential Regulators 
shall by rule or regulation jointly prescribe 
that— 
‘‘(i) help ensure the safety and sound-
ness of the security-based swap dealer or 
major security-based swap participant; and 
‘‘(ii) are appropriate for the risk asso-
ciated with the non-cleared swaps held as 
a swap dealer or major swap participant. 
‘‘(B) NON-BANK
SECURITY-BASED
SWAP 
DEALERS
AND
MAJOR
SECURITY-BASED
SWAP 
PARTICIPANTS.—Each registered security-based 
swap dealer and major security-based swap par-
ticipant for which there is not a Prudential 
Regulator shall meet such minimum capital re-
quirements and minimum initial and variation 
margin requirements as the Commission shall 
by rule or regulation prescribe that— 
‘‘(i) help ensure the safety and sound-
ness of the security-based swap dealer or 
major security-based swap participant; and
753 
‘‘(ii) are appropriate for the risk asso-
ciated with the non-cleared swaps held as 
the swap dealer or major swap participant. 
‘‘(2) RULES.— 
‘‘(A) BANK SECURITY-BASED SWAP DEAL-
ERS AND MAJOR SECURITY-BASED SWAP PAR-
TICIPANTS.—Not later than 1 year after the 
date of the enactment of the Derivative Markets 
Transparency and Accountability Act of 2009, 
the Prudential Regulators, in consultation with 
the Commission, shall jointly adopt rules impos-
ing capital and margin requirements under this 
subsection for security-based swap dealers and 
major security-based swap participants, with re-
spect to their activities as a security-based swap 
dealer or major security-based swap participant 
for which there is a Prudential Regulator. 
‘‘(B) NON-BANK
SECURITY-BASED
SWAP 
DEALERS
AND
MAJOR
SECURITY-BASED
SWAP 
PARTICIPANTS.—Not later than 1 year after the 
date of the enactment of the Derivative Markets 
Transparency and Accountability Act of 2009, 
the Commission shall adopt rules imposing cap-
ital and margin requirements under this sub-
section for security-based swap dealers and
754 
major security-based swap participants for 
which there is no Prudential Regulator. 
‘‘(3) AUTHORITY.—Nothing in this section shall 
limit the authority of the Commission to set capital 
requirements for a broker or dealer registered in ac-
cordance with section 15 of this Act. 
‘‘(e) REPORTING AND RECORDKEEPING.— 
‘‘(1) IN GENERAL.—Each registered security- 
based swap dealer and major security-based swap 
participant— 
‘‘(A) shall make such reports as are pre-
scribed by the Commission by rule or regulation 
regarding the transactions and positions and fi-
nancial condition of such person; 
‘‘(B) for which— 
‘‘(i) there is a Prudential Regulator 
shall keep books and records of all activi-
ties related to its business as a security- 
based swap dealer or major security-based 
swap participant in such form and manner 
and for such period as may be prescribed 
by the Commission by rule or regulation; 
‘‘(ii) there is no Prudential Regulator 
shall keep books and records in such form 
and manner and for such period as may be
755 
prescribed by the Commission by rule or 
regulation; and 
‘‘(C) shall keep such books and records 
open to inspection and examination by any rep-
resentative of the Commission. 
‘‘(2) RULES.—Not later than 1 year after the 
date of enactment of the Derivative Markets Trans-
parency and Accountability Act of 2009, the Com-
mission shall adopt rules governing reporting and 
recordkeeping for security-based swap dealers and 
major security-based swap participants. 
‘‘(f) DAILY TRADING RECORDS.— 
‘‘(1) IN GENERAL.—Each registered security- 
based swap dealer and major security-based swap 
participant shall maintain daily trading records of 
its security-based swaps and all related records (in-
cluding related transactions) and recorded commu-
nications including but not limited to electronic mail, 
instant messages, and recordings of telephone calls, 
for such period as may be prescribed by the Com-
mission by rule or regulation. 
‘‘(2) INFORMATION REQUIREMENTS.—The daily 
trading records shall include such information as the 
Commission shall prescribe by rule or regulation.
756 
‘‘(3) CUSTOMER RECORDS.—Each registered se-
curity-based swap dealer or major security-based 
swap participant shall maintain daily trading records 
for each customer or counterparty in such manner 
and form as to be identifiable with each security- 
based swap transaction. 
‘‘(4) AUDIT TRAIL.—Each registered security- 
based swap dealer or major security-based swap par-
ticipant shall maintain a complete audit trail for 
conducting comprehensive and accurate trade recon-
structions. 
‘‘(5) RULES.—Not later than 1 year after the 
date of the enactment of the Derivative Markets 
Transparency and Accountability Act of 2009, the 
Commission shall adopt rules governing daily trad-
ing records for security-based swap dealers and 
major security-based swap participants. 
‘‘(g) BUSINESS CONDUCT STANDARDS.— 
‘‘(1) IN GENERAL.—Each registered security- 
based swap dealer and major security-based swap 
participant shall conform with business conduct 
standards as may be prescribed by the Commission 
by rule or regulation addressing— 
‘‘(A) fraud, manipulation, and other abu-
sive practices involving security-based swaps
757 
(including security-based swaps that are offered 
but not entered into); 
‘‘(B) diligent supervision of its business as 
a security-based swap dealer; 
‘‘(C) adherence to all applicable position 
limits; and 
‘‘(D) such other matters as the Commis-
sion shall determine to be necessary or appro-
priate. 
‘‘(2) BUSINESS
CONDUCT
REQUIREMENTS.— 
Business conduct requirements adopted by the Com-
mission shall— 
‘‘(A) establish the standard of care for a 
security-based swap dealer or major security- 
based swap participant to verify that any secu-
rity-based swap counterparty meets the eligi-
bility standards for an eligible contract partici-
pant; 
‘‘(B) require disclosure by the security- 
based swap dealer or major security-based swap 
participant to any counterparty to the security- 
based swap (other than a security-based swap 
dealer or major security-based swap partici-
pant) of:
758 
‘‘(i) information about the material 
risks and characteristics of the security- 
based swap; 
‘‘(ii) for cleared security-based swaps, 
upon the request of the counterparty, the 
daily mark from the appropriate clearing 
agency, and for non-cleared security-based 
swaps, upon request of the counterparty, 
the daily mark of the security-based swap 
dealer or major security-based swap partic-
ipant; and 
‘‘(iii) any other material incentives or 
conflicts of interest that the security-based 
swap dealer or major security-based swap 
participant may have in connection with 
the security-based swap; and 
‘‘(C) establish such other standards and 
requirements as the Commission may determine 
are necessary or appropriate in the public inter-
est, for the protection of investors, or otherwise 
in furtherance of the purposes of this title. 
‘‘(3) RULES.—The Commission shall prescribe 
rules under this subsection governing business con-
duct standards for security-based swap dealers and 
major security-based swap participants not later
760 
swaps to prevent violations of applicable position 
limits. 
‘‘(2) DISCLOSURE
OF
GENERAL
INFORMA-
TION.—The security-based swap dealer or major se-
curity-based swap participant shall disclose to the 
Commission or to the Prudential Regulator for such 
security-based swap dealer or major security-based 
swap participant, as applicable, information con-
cerning— 
‘‘(A) terms and conditions of its security- 
based swaps; 
‘‘(B) security-based swap trading oper-
ations, mechanisms, and practices; 
‘‘(C) financial integrity protections relating 
to security-based swaps; and 
‘‘(D) other information relevant to its trad-
ing in security-based swaps. 
‘‘(3) ABILITY TO OBTAIN INFORMATION.—The 
security-based swap dealer or major swap security- 
based participant shall— 
‘‘(A) establish and enforce internal systems 
and procedures to obtain any necessary infor-
mation to perform any of the functions de-
scribed in this section; and
761 
‘‘(B) provide the information to the Com-
mission or to the Prudential Regulator for such 
security-based swap dealer or major security- 
based swap participant, as applicable, upon re-
quest. 
‘‘(4) CONFLICTS OF INTEREST.—The security- 
based swap dealer and major security-based swap 
participant shall implement conflict-of-interest sys-
tems and procedures that— 
‘‘(A) establish structural and institutional 
safeguards to assure that the activities of any 
person within the firm relating to research or 
analysis of the price or market for any security 
are separated by appropriate informational par-
titions within the firm from the review, pres-
sure, or oversight of those whose involvement in 
trading or clearing activities might potentially 
bias their judgment or supervision; and 
‘‘(B) address such other issues as the 
Commission determines appropriate. 
‘‘(j) STATUTORY DISQUALIFICATION.—Except to the 
extent otherwise specifically provided by rule, regulation, 
or order of the Commission, it shall be unlawful for a secu-
rity-based swap dealer or a major security-based swap par-
ticipant to permit any person associated with a security-
762 
based swap dealer or a major security-based swap partici-
pant who is subject to a statutory disqualification to effect 
or be involved in effecting security-based swaps on behalf 
of such security-based swap dealer or major security-based 
swap participant, if such security-based swap dealer or 
major security-based swap participant knew, or in the ex-
ercise of reasonable care should have known, of such stat-
utory disqualification. 
‘‘(k) ENFORCEMENT
AND ADMINISTRATIVE PRO-
CEEDING AUTHORITY.— 
‘‘(1) PRIMARY ENFORCEMENT AUTHORITY.— 
‘‘(A) SEC.—Except as provided in sub-
paragraph (B), the Commission shall have ex-
clusive authority to enforce the amendments 
made by subtitle B of the Derivative Markets 
Transparency and Accountability Act of 2009 
with respect to any person. 
‘‘(B) 
PRUDENTIAL
REGULATORS.—The 
Prudential Regulators shall have exclusive au-
thority to enforce the provisions of section 
15F(d) and other prudential requirements of 
this Act with respect to banks, and branches or 
agencies of foreign banks that are security- 
based swap dealers or major security-based 
swap participants.
763 
‘‘(C) REFERRAL.— 
‘‘(i) VIOLATIONS OF NONPRUDENTIAL 
REQUIREMENTS.—If the Prudential Regu-
lator for a security-based swap dealer or 
major security-based swap participant has 
cause to believe that such security-based 
swap dealer or major security-based swap 
participant may have engaged in conduct 
that constitutes a violation of the non-
prudential requirements of section 15F or 
rules adopted by the Commission there-
under, that Prudential Regulator may rec-
ommend in writing to the Commission that 
the Commission initiate an enforcement 
proceeding as authorized under this Act. 
The recommendation shall be accompanied 
by a written explanation of the concerns 
giving rise to the recommendation. 
‘‘(ii) VIOLATIONS OF PRUDENTIAL RE-
QUIREMENTS.—If the Commission has 
cause to believe that a securities-based 
swap dealer or major securities-based swap 
participant that has a Prudential Regu-
lator may have engaged in conduct that 
constitute a violation of the prudential re-
764 
quirements of section 15F(e) or rules 
adopted thereunder, the Commission may 
recommend in writing to the Prudential 
Regulator that the Prudential Regulator 
initiate an enforcement proceeding as au-
thorized under this Act. The recommenda-
tion shall be accompanied by a written ex-
planation of the concerns giving rise to the 
recommendation. 
‘‘(2) CENSURE, DENIAL, SUSPENSION; NOTICE 
AND
HEARING.—The Commission, by order, shall 
censure, place limitations on the activities, functions, 
or operations of, or revoke the registration of any se-
curity-based swap dealer or major security-based 
swap participant that has registered with the Com-
mission pursuant to subsection (b) if it finds, on the 
record after notice and opportunity for hearing, that 
such censure, placing of limitations, or revocation is 
in the public interest and that such security-based 
swap dealer or major security-based swap partici-
pant, or any person associated with such security- 
based swap dealer or major security-based swap par-
ticipant effecting or involved in effecting trans-
actions in security-based swaps on behalf of such se-
curity-based swap dealer or major security-based