IB 
Union Calendar No. 259 
114TH CONGRESS 
1ST SESSION H. R. 1317 
[Report No. 114–311, Parts I and II] 
To amend the Commodity Exchange Act and the Securities Exchange Act 
of 1934 to specify how clearing requirements apply to certain affiliate 
transactions, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 4, 2015 
Ms. MOORE (for herself, Ms. FUDGE, Mr. GIBSON, and Mr. STIVERS) intro-
duced the following bill; which was referred to the Committee on Finan-
cial Services, and in addition to the Committee on Agriculture, for a pe-
riod to be subsequently determined by the Speaker, in each case for con-
sideration of such provisions as fall within the jurisdiction of the com-
mittee concerned 
OCTOBER 26, 2015 
Reported from the Committee on Agriculture with an amendment 
[Strike out all after the enacting clause and insert the part printed in italic] 
NOVEMBER 16, 2015 
Reported from the Committee on Financial Services with an amendment; com-
mitted to the Committee of the Whole House on the State of the Union 
and ordered to be printed 
[Strike out all after the enacting clause and insert the part printed in boldface roman] 
[For text of introduced bill, see copy of bill as introduced on March 4, 2105] 
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A BILL 
To amend the Commodity Exchange Act and the Securities 
Exchange Act of 1934 to specify how clearing require-
ments apply to certain affiliate transactions, and for 
other purposes. 
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Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. TREATMENT OF AFFILIATE TRANSACTIONS. 
(a) COMMODITY EXCHANGE ACT AMENDMENTS.—Sec-
tion 2(h)(7)(D) of the Commodity Exchange Act (7 U.S.C. 
2(h)(7)(D)) is amended— 
(1) by redesignating clause (iii) as clause (v); 
(2) by striking clauses (i) and (ii) and inserting 
the following: 
‘‘(i) IN GENERAL.—An affiliate of a 
person that qualifies for an exception under 
subparagraph (A) (including affiliate enti-
ties predominantly engaged in providing fi-
nancing for the purchase of the merchandise 
or manufactured goods of the person) may 
qualify for the exception only if the affil-
iate— 
‘‘(I) enters into the swap to hedge 
or mitigate the commercial risk of the 
person or other affiliate of the person 
that is not a financial entity, and the 
commercial risk that the affiliate is 
hedging or mitigating has been trans-
ferred to the affiliate; 
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‘‘(II) is directly and wholly-owned 
by another affiliate qualified for the 
exception under this subparagraph or 
an entity that is not a financial enti-
ty; 
‘‘(III) is not indirectly majority- 
owned by a financial entity; 
‘‘(IV) is not ultimately owned by 
a parent company that is a financial 
entity; and 
‘‘(V) does not provide any serv-
ices, financial or otherwise, to any af-
filiate that is a nonbank financial 
company supervised by the Board of 
Governors (as defined under section 
102 of the Financial Stability Act of 
2010). 
‘‘(ii) LIMITATION ON QUALIFYING AF-
FILIATES.—The exception in clause (i) shall 
not apply if the affiliate is— 
‘‘(I) a swap dealer; 
‘‘(II) a security-based swap deal-
er; 
‘‘(III) a major swap participant; 
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‘‘(IV) a major security-based swap 
participant; 
‘‘(V) a commodity pool; 
‘‘(VI) a bank holding company; 
‘‘(VII) a private fund, as defined 
in section 202(a) of the Investment Ad-
visers Act of 1940 (15 U.S.C. 80-b- 
2(a)); 
‘‘(VIII) an employee benefit plan 
or government plan, as defined in 
paragraphs (3) and (32) of section 3 of 
the Employee Retirement Income Secu-
rity Act of 1974 (29 U.S.C. 1002); 
‘‘(IX) an insured depository insti-
tution; 
‘‘(X) a farm credit system institu-
tion; 
‘‘(XI) a credit union; 
‘‘(XII) a nonbank financial com-
pany supervised by the Board of Gov-
ernors (as defined under section 102 of 
the Financial Stability Act of 2010); 
or 
‘‘(XIII) an entity engaged in the 
business of insurance and subject to 
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such financial entity, except one that is an 
affiliate that qualifies for the exception 
under subparagraph (A).’’; and 
(3) by adding at the end the following: 
‘‘(F) RISK
MANAGEMENT
PROGRAM.—Any 
security-based swap entered into by an affiliate 
that qualifies for the exception in subparagraph 
(A) shall be subject to a centralized risk manage-
ment program of the affiliate, which is reason-
ably designed both to monitor and manage the 
risks associated with the security-based swap and 
to identify each of the affiliates on whose behalf 
a security-based swap was entered into.’’. 
SECTION 1. TREATMENT OF AFFILIATE TRANSACTIONS. 
(a) COMMODITY
EXCHANGE
ACT
AMEND-
MENT.—Section 2(h)(7)(D)(i) of the Commodity 
Exchange Act (7 U.S.C. 2(h)(7)(D)(i)) is amend-
ed to read as follows: 
‘‘(i) IN
GENERAL.—An affiliate 
of a person that qualifies for an 
exception 
under 
subparagraph 
(A) (including affiliate entities 
predominantly engaged in pro-
viding financing for the purchase 
of the merchandise or manufac-
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tured goods of the person) may 
qualify for the exception only if 
the affiliate enters into the swap 
to hedge or mitigate the commer-
cial risk of the person or other af-
filiate of the person that is not a 
financial entity, provided that if 
the hedge or mitigation of such 
commercial risk is addressed by 
entering into a swap with a swap 
dealer or major swap participant, 
an 
appropriate 
credit 
support 
measure 
or 
other 
mechanism 
must be utilized.’’. 
(b) SECURITIES
EXCHANGE
ACT
OF
1934 
AMENDMENT.—Section 3C(g)(4) of the Securi-
ties Exchange Act of 1934 (15 U.S.C. 78c– 
3(g)(4)) is amended to read as follows: 
(1) by redesignating subparagraph 
(C) as subparagraph (E); 
(2) by striking subparagraphs (A) and 
(B) and inserting the following: 
‘‘(A) IN GENERAL.—An affiliate of a 
person that qualifies for an exception 
under this subsection (including affil-
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iate entities predominantly engaged 
in providing financing for the pur-
chase of the merchandise or manufac-
tured goods of the person) may qual-
ify for the exception only if the affil-
iate— 
‘‘(i) enters into the security- 
based swap to hedge or mitigate 
the commercial risk of the person 
or other affiliate of the person 
that is not a financial entity, and 
the commercial risk that the affil-
iate is hedging or mitigating has 
been transferred to the affiliate; 
‘‘(ii) is directly and wholly- 
owned by another affiliate quali-
fied for the exception under this 
paragraph or an entity that is not 
a financial entity; 
‘‘(iii) is not indirectly major-
ity-owned by a financial entity; 
‘‘(iv) is not ultimately owned 
by a parent company that is a fi-
nancial entity; and 
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‘‘(v) does not provide any 
services, financial or otherwise, 
to any affiliate that is a nonbank 
financial company supervised by 
the Board of Governors (as de-
fined under section 102 of the Fi-
nancial Stability Act of 2010). 
‘‘(B) LIMITATION ON QUALIFYING AF-
FILIATES.—The exception in subpara-
graph (A) shall not apply if the affil-
iate is— 
‘‘(i) a swap dealer; 
‘‘(ii) a security-based swap 
dealer; 
‘‘(iii) a major swap partici-
pant; 
‘‘(iv) a major security-based 
swap participant; 
‘‘(v) a commodity pool; 
‘‘(vi) a bank holding company; 
‘‘(vii) a private fund, as de-
fined in section 202(a) of the In-
vestment Advisers Act of 1940 (15 
U.S.C. 80-b-2(a)); 
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‘‘(viii) an employee benefit 
plan or government plan, as de-
fined in paragraphs (3) and (32) of 
section 3 of the Employee Retire-
ment Income Security Act of 1974 
(29 U.S.C. 1002); 
‘‘(ix) an insured depository in-
stitution; 
‘‘(x) a farm credit system insti-
tution; 
‘‘(xi) a credit union; 
‘‘(xii) 
a 
nonbank 
financial 
company supervised by the Board 
of Governors (as defined under 
section 102 of the Financial Sta-
bility Act of 2010); or 
‘‘(xiii) an entity engaged in 
the business of insurance and 
subject to capital requirements 
established by an insurance gov-
ernmental authority of a State, a 
territory of the United States, the 
District of Columbia, a country 
other than the United States, or a 
political subdivision of a country 
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other than the United States that 
is engaged in the supervision of 
insurance companies under insur-
ance law. 
‘‘(C) LIMITATION ON AFFILIATES’ AF-
FILIATES.—Unless the Commission de-
termines, by order, rule, or regula-
tion, that it is in the public interest, 
the exception in subparagraph (A) 
shall not apply with respect to an af-
filiate if such affiliate is itself affili-
ated with— 
‘‘(i) a major security-based 
swap participant; 
‘‘(ii) a security-based swap 
dealer; 
‘‘(iii) a major swap partici-
pant; or 
‘‘(iv) a swap dealer. 
‘‘(D) 
CONDITIONS
ON
TRANS-
ACTIONS.—With respect to an affiliate 
that qualifies for the exception in 
subparagraph (A)— 
‘‘(i) such affiliate may not 
enter 
into 
any 
security-based 
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swap other than for the purpose 
of hedging or mitigating commer-
cial risk; and 
‘‘(ii) neither such affiliate nor 
any person affiliated with such af-
filiate that is not a financial enti-
ty may enter into a security-based 
swap with or on behalf of any af-
filiate that is a financial entity or 
otherwise assume, net, combine, 
or consolidate the risk of secu-
rity-based swaps entered into by 
any such financial entity, except 
one that is an affiliate that quali-
fies for the exception under sub-
paragraph (A).’’; and 
(3) by adding at the end the fol-
lowing: 
‘‘(F) RISK MANAGEMENT PROGRAM.— 
Any security-based swap entered into 
by an affiliate that qualifies for the 
exception in subparagraph (A) shall 
be subject to a centralized risk man-
agement program of the affiliate, 
which is reasonably designed both to 
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Union Calendar No. 259 
114TH CONGRESS 
1ST SESSION 
H. R. 1317 
[Report No. 114–311, Parts I and II] 
A BILL 
To amend the Commodity Exchange Act and the 
Securities Exchange Act of 1934 to specify how 
clearing requirements apply to certain affiliate 
transactions, and for other purposes. 
NOVEMBER 16, 2015 
Reported from the Committee on Financial Services with 
an amendment; committed to the Committee of the 
Whole House on the State of the Union and ordered 
to be printed 
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