‘‘(iv) Margin required from all mem-
bers and participants shall be sufficient to 
cover potential exposures in normal market 
conditions. 
‘‘(v) The models and parameters used 
in setting margin requirements shall be 
risk-based and reviewed regularly. 
‘‘(E) 
SETTLEMENT
PROCEDURES.—The 
derivatives clearing organization shall— 
‘‘(i) complete money settlements on a 
timely basis, and not less than once each 
business day; 
‘‘(ii) employ money settlement ar-
rangements that eliminate or strictly limit 
the derivatives clearing organization’s ex-
posure to settlement bank risks, such as 
credit and liquidity risks from the use of 
banks to effect money settlements; 
‘‘(iii) ensure money settlements are 
final when effected; 
‘‘(iv) maintain an accurate record of 
the flow of funds associated with each 
money settlement; 
‘‘(v) have the ability to comply with 
the terms and conditions of any permitted 
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netting or offset arrangements with other 
clearing organizations; and 
‘‘(vi) for physical settlements, estab-
lish rules that clearly state the derivatives 
clearing organization’s obligations with re-
spect to physical deliveries. The risks from 
these obligations shall be identified and 
managed. 
‘‘(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 derivatives clear-
ing organization’s access to the assets and 
funds is minimized. 
‘‘(iii) Assets and funds invested by the 
derivatives clearing organization shall be 
held in instruments with minimal credit, 
market, and liquidity risks. 
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‘‘(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 
safe management of events when members 
or participants become insolvent or other-
wise default on their obligations to the de-
rivatives clearing organization. 
‘‘(ii) The derivatives clearing organi-
zation’s default procedures shall be clearly 
stated, and they shall ensure that the de-
rivatives clearing organization can take 
timely action to contain losses and liquidity 
pressures and to continue meeting its obli-
gations. 
‘‘(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 derivatives clearing organization and 
for resolution of disputes; and 
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‘‘(ii) have the authority and ability to 
discipline, limit, suspend, or terminate a 
member’s or participant’s activities for vio-
lations of rules of the derivatives clearing 
organization. 
‘‘(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 deriva-
tives clearing organization’s responsibilities 
and obligations; and 
‘‘(iii) periodically conduct tests to 
verify that backup resources are sufficient 
to ensure continued order processing and 
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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-
sion all information necessary for the Commis-
sion to conduct oversight of the derivatives 
clearing organization. 
‘‘(K) RECORDKEEPING.—The derivatives 
clearing organization shall maintain records of 
all activities related to the business of the de-
rivatives clearing organization as a derivatives 
clearing organization in a form and manner ac-
ceptable to the Commission 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 derivatives clearing 
organization’s services. 
‘‘(ii) The derivatives clearing organi-
zation shall make information concerning 
the rules and operating procedures gov-
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erning its clearing and settlement systems 
(including default procedures) available to 
market participants. 
‘‘(iii) The derivatives clearing organi-
zation shall disclose publicly and to the 
Commission information concerning— 
‘‘(I) the terms and conditions of 
contracts, agreements, and trans-
actions cleared and settled by the de-
rivatives clearing organization; 
‘‘(II) clearing and other fees that 
the derivatives clearing organization 
charges its members and participants; 
‘‘(III) the margin-setting method-
ology and the size and composition of 
the financial resource package of the 
derivatives clearing organization; 
‘‘(IV) other information relevant 
to participation in the settlement and 
clearing activities of the derivatives 
clearing organization; and 
‘‘(V) daily settlement prices, vol-
ume, and open interest for all con-
tracts settled or cleared by it. 
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‘‘(M) INFORMATION-SHARING.—The de-
rivatives clearing organization shall— 
‘‘(i) enter into and abide by the terms 
of all appropriate and applicable domestic 
and 
international 
information-sharing 
agreements; and 
‘‘(ii) use relevant information obtained 
from the agreements in carrying out the 
clearing organization’s risk management 
program. 
‘‘(N) ANTITRUST
CONSIDERATIONS.—Un-
less appropriate to achieve the purposes of this 
chapter, 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 
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support the objectives of owners and par-
ticipants. 
‘‘(ii) The derivatives clearing organi-
zation shall establish and enforce appro-
priate fitness standards for directors, 
members of any disciplinary committee, 
and members of the derivatives clearing or-
ganization, and any other persons with di-
rect access to the settlement or clearing ac-
tivities of the derivatives clearing organiza-
tion, 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 decisionmaking process of the deriva-
tives clearing organization and establish a proc-
ess for resolving such 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, 
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transparent, and enforceable legal framework 
for each aspect of its activities.’’. 
(4) Section 5b of the Commodity Exchange Act 
(7 U.S.C. 7a–1) is further amended by adding after 
subsection (k), as added by paragraph (2), the fol-
lowing: 
‘‘(l) REPORTING.— 
‘‘(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 its responsibilities 
under this Act. The Commission shall adopt data 
collection and maintenance requirements for swaps 
cleared by derivatives clearing organizations that are 
comparable to the corresponding requirements for 
swaps accepted by swap repositories and swaps trad-
ed on swap execution facilities. Subject to section 8, 
the Commission shall share such 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 to other per-
sons the Commission deems appropriate, including 
foreign financial supervisors (including foreign fu-
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tures authorities), foreign central banks, and foreign 
ministries. 
‘‘(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 
comply with the public reporting requirements con-
tained in section 8(j).’’. 
(5) Section 8(e) of the Commodity Exchange 
Act (7 U.S.C. 12(e)) is amended in the last sentence 
by adding ‘‘central bank and ministries’’ after ‘‘de-
partment’’ 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), no provisions of the Commodity Exchange Act (7 
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U.S.C. 1 et seq.) shall apply to, and the Commodity Fu-
tures Trading Commission and the Securities and Ex-
change Commission shall not exercise regulatory authority 
under the Commodity Exchange Act with respect to, an 
identified banking product. 
‘‘(b) EXCEPTION.—An appropriate Federal banking 
agency may except an identified banking product from the 
exclusion in subsection (a) if the agency determines, in 
consultation with the Commodity Futures Trading Com-
mission 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 
1a(38) of the Commodity Exchange Act (7 U.S.C. 
1a(38)); 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 
of 1933 (15 U.S.C. 77a et seq.), or the Securities 
Exchange Act of 1934 (15 U.S.C. 78a et seq.).’’. 
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SEC. 114. PUBLIC REPORTING OF AGGREGATE SWAP DATA. 
Section 8 of the Commodity Exchange Act (7 U.S.C. 
12) is amended by adding after subsection (i) the fol-
lowing: 
‘‘(j) PUBLIC
REPORTING
OF
AGGREGATE
SWAP 
DATA.— 
‘‘(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(k)(2); 
‘‘(B) swap repositories pursuant to section 
21(c)(3); and 
‘‘(C) reports received by the Commission 
pursuant to section 4r.’’. 
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SEC. 115. 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.— 
‘‘(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 
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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); 
‘‘(2) maintain such 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. 
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‘‘(d) REQUIRED
REGISTRATION
FOR
SECURITY- 
BASED SWAP REPOSITORIES.—Any person that is re-
quired to be registered as a swap repository under this 
section shall register with the Commission regardless of 
whether that person also is registered with the Securities 
and Exchange Commission as a security-based swap re-
pository. 
‘‘(e) HARMONIZATION OF RULES.—Not later than 
180 days after the effective date of the Over-the-Counter 
Derivatives Markets Act of 2009, the Commission and the 
Securities and Exchange Commission shall jointly adopt 
uniform rules governing persons that are registered under 
this section and persons that are registered as security- 
based swap repositories under the Securities Exchange 
Act of 1934 (15 U.S.C. 78a et seq.), including uniform 
rules that specify the data elements that shall be collected 
and maintained by each repository. 
‘‘(f) EXEMPTIONS.—The Commission may exempt, 
conditionally or unconditionally, a swap repository from 
the requirements of this section if the Commission finds 
that such 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.’’. 
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SEC. 116. 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 clear the swap in accordance 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 time frames) adopted by the Commission 
under section 21, 
shall meet the requirements in subsection (b). 
‘‘(b) REPORTS.—Any person described in subsection 
(a) shall— 
‘‘(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-
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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. 117. REGISTRATION AND REGULATION OF SWAP DEAL-
ERS 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 116) the following: 
‘‘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 such 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 such person shall 
have registered as a major swap participant with the 
Commission. 
‘‘(b) REQUIREMENTS.— 
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‘‘(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. 
Such 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 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), (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. 
‘‘(5) TRANSITION.—Rules adopted under this 
section shall provide for the registration of swap 
dealers and major swap participants no later than 
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one year after the effective date of the Over-the- 
Counter Derivatives Markets 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 
swaps on behalf of such swap dealer or major swap 
participant, if such swap dealer or major swap par-
ticipant knew, or in the exercise of reasonable care 
should have known, of such statutory disqualifica-
tion. 
‘‘(c) DUAL REGISTRATION.— 
‘‘(1) SWAP DEALER.—Any person that is re-
quired to be registered as a swap dealer under this 
section shall register with the Commission regardless 
of whether that person also is a bank or is registered 
with the Securities and Exchange Commission as a 
security-based swap dealer. 
‘‘(2) MAJOR SWAP PARTICIPANT.—Any person 
that is required to be registered as a major swap 
participant under this section shall register with the 
Commission regardless of whether that person also 
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is a bank or is registered with the Securities and 
Exchange Commission as a major security-based 
swap participant. 
‘‘(d) JOINT RULES.— 
‘‘(1) IN GENERAL.—Not later than 180 days 
after the effective date of the Over-the-Counter De-
rivatives Markets Act of 2009, the Commission and 
the Securities and Exchange Commission shall joint-
ly adopt uniform rules for persons that are reg-
istered as swap dealers or major swap participants 
under this section and persons that are registered as 
security-based swap dealers or major security-based 
swap participants under the Securities Exchange Act 
of 1934 (15 U.S.C. 78a et seq.). 
‘‘(2) EXCEPTION FOR PRUDENTIAL REQUIRE-
MENTS.—The Commission and the Securities and 
Exchange Commission shall not prescribe rules im-
posing prudential requirements (including activity 
restrictions) on swap dealers, major swap partici-
pants, security-based swap dealers, or major secu-
rity-based swap participants for which there is a 
Prudential Regulator. This provision shall not be 
construed as limiting the authority of the Commis-
sion and the Securities and Exchange Commission to 
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quirements set by the Prudential Regulators 
under this subsection. 
‘‘(D) A futures commission merchant, in-
troducing broker, broker or dealer shall main-
tain sufficient capital to comply with the strict-
er of any applicable capital requirements to 
which it is subject. 
‘‘(4) MARGIN.— 
‘‘(A) BANK
SWAP
DEALERS
AND
MAJOR 
SWAP
PARTICIPANTS.—The Prudential Regu-
lators shall impose both initial and variation 
margin requirements under this subsection on 
all swaps that are not cleared by a registered 
derivatives clearing organization. 
‘‘(B) NON-SWAP DEALERS OR MAJOR SWAP 
PARTICIPANTS.—The 
Prudential 
Regulators 
may, but are not required to, impose margin re-
quirements with respect to swaps in which one 
of the counterparties is neither a swap dealer, 
major swap participant, security-based swap 
dealer nor a major security-based swap partici-
pant. Margin requirements for swaps set by the 
Commission and the Securities and Exchange 
Commission shall provide for the use of non- 
cash assets as collateral. 
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‘‘(C) 
NONBANK
SWAP
DEALERS
AND 
MAJOR SWAP PARTICIPANTS.—Margin require-
ments for swaps set by the Commission and the 
Securities and Exchange Commission under this 
subsection shall be as strict as or stricter than 
margin requirements for swaps set by the Pru-
dential Regulators. 
‘‘(f) 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 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 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 
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prescribed by the Commission by rule or 
regulation; 
‘‘(C) shall keep such books and records 
open to inspection and examination by any rep-
resentative of the Commission; and 
‘‘(D) shall keep any such books and 
records relating to transactions in swaps based 
on one or more securities open to inspection 
and examination by the Securities and Ex-
change Commission. 
‘‘(2) RULES.—Within 365 days of the enact-
ment of the Over-the-Counter Derivatives Markets 
Act of 2009, the Commission and the Securities and 
Exchange Commission, in consultation with the ap-
propriate Federal banking agencies, shall jointly 
adopt rules governing reporting and recordkeeping 
for swap dealers, major swap participants, security- 
based swap dealers, and major security-based swap 
participants. 
‘‘(g) 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 
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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-
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.—Within 365 days of the enact-
ment of the Over-the-Counter Derivatives Markets 
Act of 2009, the Commission and the Securities and 
Exchange Commission, in consultation with the ap-
propriate Federal banking agencies, shall jointly 
adopt rules governing daily trading records for swap 
dealers, major swap participants, security-based 
swap dealers, and major security-based swap partici-
pants. 
‘‘(h) BUSINESS CONDUCT STANDARDS.— 
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‘‘(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 
‘‘(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, 
major swap participant, security-based swap 
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dealer or major security-based swap partici-
pant) of— 
‘‘(i) information about the material 
risks and characteristics of the swap; 
‘‘(ii) the source and amount of any 
fees or other material remuneration that 
the swap dealer or major swap participant 
would directly or indirectly expect to re-
ceive in connection with the swap; and 
‘‘(iii) any other material incentives or 
conflicts of interest that the swap dealer or 
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 and the Securi-
ties and Exchange Commission, in consultation with 
the appropriate Federal banking agencies, shall 
jointly prescribe rules under this subsection gov-
erning business conduct standards for swap dealers, 
major swap participants, security-based swap deal-
ers, and major security-based swap participants 
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within 365 days of the enactment of the Over-the- 
Counter Derivatives Markets Act of 2009. 
‘‘(i) DOCUMENTATION AND BACK OFFICE STAND-
ARDS.— 
‘‘(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.—Within 365 days of the enact-
ment of the Over-the-Counter Derivatives Markets 
Act of 2009, the Commission and the Securities and 
Exchange Commission, in consultation with the ap-
propriate Federal banking agencies, shall adopt rules 
governing documentation and back office standards 
for swap dealers, major swap participants, security- 
based swap dealers, and major security-based swap 
participants. 
‘‘(j) 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 
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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 and to the Pruden-
tial Regulator for such swap dealer or major swap 
participant, 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-
mation to perform any of the functions de-
scribed in this section; and 
‘‘(B) provide the information to the Com-
mission and to the Prudential Regulator for 
such swap dealer or major swap participant, as 
applicable, upon request. 
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‘‘(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.—Unless 
necessary or appropriate to achieve the purposes of 
this Act, the swap dealer or major swap participant 
shall avoid— 
‘‘(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. 
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‘‘(k) RULES.—The Commission, the Securities and 
Exchange Commission, and the Prudential Regulators 
shall consult with each other prior to adopting any rules 
under the Over-the-Counter Derivatives Markets Act of 
2009. 
‘‘(l) RECOGNITION OF COMPARABLE NON-U.S. REGU-
LATION.—The Commission, in consultation with the Sec-
retary of the Treasury, the Securities and Exchange Com-
mission and the Prudential Regulators, shall adopt rules 
exempting from registration and the other requirements 
of the Over-the-Counter Derivatives Market Act of 2009 
foreign financial institutions that the Commission finds 
are subject to comparable regulation in the financial insti-
tution’s home country.’’. 
SEC. 118. SEGREGATION OF ASSETS HELD AS COLLATERAL 
IN SWAP TRANSACTIONS. 
The Commodity Exchange Act (7 U.S.C. 1 et seq.) 
is further amended by inserting after section 4s the fol-
lowing: 
‘‘SEC. 4t. SEGREGATION OF ASSETS HELD AS COLLATERAL 
IN SWAP TRANSACTIONS. 
‘‘(a) CLEARED SWAPS.—A swap dealer, futures com-
mission merchant, or derivatives clearing organization by 
or through which funds or other property are held as mar-
gin or collateral to secure the obligations of a counterparty 
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under a swap to be cleared by or through a derivatives 
clearing organization shall segregate, maintain, and use 
the funds or other property for the benefit of the 
counterparty, in accordance with such rules and relations 
as the Commission or Prudential Regulator shall pre-
scribe. Any such funds or other property shall be treated 
as customer property under this Act. 
‘‘(b) OVER-THE-COUNTER SWAPS.—At the request of 
a swap counterparty who provides funds or other property 
to a swap dealer as 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 funds 
or other property in an account which is carried by a 
third-party custodian and designated as a segregated ac-
count for the counterparty, in accordance with such rules 
and regulations as the Commission or Prudential Regu-
lator may prescribe. This subsection shall not be inter-
preted to preclude commercial arrangements regarding the 
investment of the segregated funds or other property and 
the related allocation of gains and losses resulting from 
any such investment.’’. 
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SEC. 119. 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 
‘‘(2) address such other issues as the Commis-
sion determines appropriate.’’. 
SEC. 120. 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.— 
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demonstrate to the Commission that it meets the 
criteria specified herein. 
‘‘(2) DETERRENCE OF ABUSES.—The swap exe-
cution facility shall establish and enforce trading 
and participation rules that will deter abuses and 
have the capacity to detect, investigate, and enforce 
those rules, including means to— 
‘‘(A) obtain information necessary to per-
form the functions required under this section; 
or 
‘‘(B) use 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) TRADING PROCEDURES.—The swap execu-
tion facility shall establish and enforce rules or 
terms and conditions defining, or specifications de-
tailing, trading procedures to be used in entering 
and executing orders traded on or through its facili-
ties. 
‘‘(4) 
FINANCIAL
INTEGRITY
OF
TRANS-
ACTIONS.—The swap execution facility shall estab-
lish and enforce rules and procedures for ensuring 
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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). 
‘‘(e) CORE PRINCIPLES FOR SWAP EXECUTION FA-
CILITIES.— 
‘‘(1) IN GENERAL.—To maintain its registra-
tion as a swap execution facility, the facility shall 
comply with the core principles specified in this sub-
section and any requirement that the Commission 
may impose by rule or regulation pursuant to section 
8a(5). Except where the Commission determines 
otherwise by rule or regulation, the facility shall 
have reasonable discretion in establishing the man-
ner in which it complies with these core principles. 
‘‘(2) COMPLIANCE
WITH
RULES.—The swap 
execution facility shall monitor and enforce compli-
ance 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 access to 
the facility. 
‘‘(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. 
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‘‘(4) MONITORING
OF
TRADING.—The swap 
execution facility shall monitor trading in swaps to 
prevent manipulation, price distortion, and disrup-
tions of the delivery or cash settlement process 
through surveillance, compliance, and disciplinary 
practices and procedures, including methods for con-
ducting real-time monitoring of trading and com-
prehensive and accurate trade reconstructions. 
‘‘(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 subsection; 
‘‘(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) 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 
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transfer open positions in any swap or to suspend or 
curtail trading in a swap. 
‘‘(7) 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. 
‘‘(8) 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 Commission shall 
adopt data collection and reporting requirements for 
swap execution facilities that are comparable to cor-
responding requirements for derivatives clearing or-
ganizations and swap repositories. 
‘‘(9) 
ANTITRUST
CONSIDERATIONS.—Unless 
necessary or appropriate to achieve the purposes of 
this Act, the swap execution facility shall avoid— 
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‘‘(A) adopting any rules or taking any ac-
tions that result in any unreasonable restraints 
of trade; or 
‘‘(B) imposing any material anticompeti-
tive burden on trading on the swap execution 
facility. 
‘‘(10) CONFLICTS
OF
INTEREST.—The swap 
execution facility shall— 
‘‘(A) establish and enforce rules to mini-
mize conflicts of interest in its decisionmaking 
process; and 
‘‘(B) establish a process for resolving the 
conflicts of interest. 
‘‘(11) 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 
shall— 
‘‘(i) report directly to the board or to 
the senior officer of the facility; and 
‘‘(ii) shall— 
‘‘(I) review compliance with the 
core principles in this subsection; 
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‘‘(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 
commodity laws and the rules and 
regulations issued thereunder, includ-
ing rules prescribed by the Commis-
sion pursuant to this section; and 
‘‘(iii) establish procedures for remedi-
ation of non-compliance issues found dur-
ing compliance office reviews, lookbacks, 
internal or external audit findings, self-re-
ported errors, or through validated com-
plaints. Procedures will establish the han-
dling, management response, remediation, 
re-testing, and closing of non-compliant 
issues. 
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‘‘(C) ANNUAL REPORTS REQUIRED.—The 
compliance officer shall annually prepare and 
sign a report on the compliance of the facility 
with the commodity laws and its policies and 
procedures, including its code of ethics and con-
flict of interest policies, in accordance with 
rules prescribed by the Commission. Such com-
pliance report shall accompany the financial re-
ports of the facility that are required to be fur-
nished to the Commission pursuant to this sec-
tion and shall include a certification that, under 
penalty of law, the report is accurate and com-
plete. 
‘‘(f) EXEMPTIONS.—The Commission may exempt, 
conditionally or unconditionally, a swap execution facility 
from registration under this section if the Commission 
finds that such facility 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. 
‘‘(g) HARMONIZATION OF RULES.—Within 180 days 
of the enactment of the Over-the-Counter Derivatives 
Markets Act of 2009, the Commission and the Securities 
and Exchange Commission shall jointly prescribe rules 
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governing the regulation of swap execution facilities under 
this section and section 3B of the Securities Exchange Act 
of 1934 (15 U.S.C. 78c–2).’’. 
SEC. 121. DERIVATIVES TRANSACTION EXECUTION FACILI-
TIES AND EXEMPT BOARDS OF TRADE. 
Sections 5a and 5d of the Commodity Exchange Act 
(7 U.S.C. 7 and 7a–3) are repealed. 
SEC. 122. DESIGNATED CONTRACT MARKETS. 
(a) Section 5(d) of the Commodity Exchange Act (7 
U.S.C. 7(d)) is amended by striking paragraph (9) and 
inserting the following: 
‘‘(9) EXECUTION OF TRANSACTIONS.— 
‘‘(A) The board of trade shall provide a 
competitive, open, and efficient market and 
mechanism for executing transactions that pro-
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 
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‘‘(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.’’. 
(b) Section 5(d) of the Commodity Exchange Act (7 
U.S.C. 7(d)) is amended by adding after paragraph (18) 
the following: 
‘‘(19) FINANCIAL RESOURCES.—The board of 
trade shall demonstrate that it has adequate finan-
cial, operational, and managerial resources to dis-
charge the responsibilities of a contract market. For 
the board of trade’s financial resources to be consid-
ered adequate, their value shall exceed the total 
amount that would enable the contract market to 
cover its operating costs for a period of one 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-
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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-
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.’’. 
SEC. 123. MARGIN. 
Section 8a of the Commodity Exchange Act (7 U.S.C. 
12a) is amended in paragraph (7)(C), by striking ‘‘, ex-
cepting the setting of levels of margin’’. 
SEC. 124. 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)’’; 
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(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 regulated markets’’; 
(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 regulated markets,’’; and 
(5) inserting at the end the following: 
‘‘(2) AGGREGATE POSITION LIMITS.—The Com-
mission may, 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; 
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‘‘(B) contracts traded on a foreign board 
of trade that provides members or other partici-
pants 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 markets. 
‘‘(3) 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 
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 
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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. 
‘‘(E) OTHER
MATERIAL
FACTORS.—Such 
other material factors as the Commission speci-
fies by rule or regulation as relevant to deter-
mine whether a swap serves a significant price 
discovery function with respect to a regulated 
market. 
‘‘(4) EXEMPTIONS.—The Commission, by rule, 
regulation, or order, may exempt, conditionally or 
unconditionally, any person or class of persons, any 
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swap or class of swaps, or any transaction or class 
of transactions from any requirement it may estab-
lish under this section with respect to position lim-
its.’’. 
(b) Section 4a(b) of the Commodity Exchange 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’’. 
SEC. 125. ENHANCED AUTHORITY OVER REGISTERED ENTI-
TIES. 
(a) Section 5(d)(1) of the Commodity Exchange Act 
(7 U.S.C. 7(d)(1)) is amended by striking ‘‘The board of 
trade shall have’’ and inserting ‘‘Except where the Com-
mission otherwise determines by rule or regulation pursu-
ant to section 8a(5), the board of trade shall have’’. 
(b) Section 5b(c)(2)(A) of the Commodity Exchange 
Act (7 U.S.C. 7a–1(c)(2)(A)) is amended by striking ‘‘The 
applicant shall have’’ and inserting ‘‘Except where the 
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Commission otherwise determines by rule or regulation 
pursuant to section 8a(5), the applicant shall have’’. 
(c) 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’’. 
(d) Section 5c(c)(1) of the Commodity Exchange Act 
(7 U.S.C. 7a–2(c)(1)) is amended by inserting ‘‘(A)’’ after 
‘‘IN GENERAL.—’’ and adding at the end the following: 
‘‘(B) Unless section 805(e) of the Pay-
ment, Clearing, and Settlement Supervision Act 
of 2009 applies, the new contract or instrument 
or clearing of the new contract or instrument, 
new rule, or rule amendment shall become ef-
fective, pursuant to the registered entity’s cer-
tification, 10 business days after the Commis-
sion’s receipt of the certification (or such short-
er period determined by the Commission by rule 
or regulation) unless the Commission notifies 
the registered entity within such time that it is 
staying the certification because there exist 
novel or complex issues that require additional 
time to analyze, an inadequate explanation by 
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the submitting registered entity, or a potential 
inconsistency with this Act (including regula-
tions under this Act). 
‘‘(C) A notification by the Commission 
pursuant 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 amendment for up to an addi-
tional 90 days from the date of such notifica-
tion.’’. 
(e) Section 5c(d) of the Commodity Exchange Act (7 
U.S.C. 7a–2(d)) is repealed. 
SEC. 126. FOREIGN BOARDS OF TRADE. 
(a) lll.—Section 4(b) of the Commodity Ex-
change Act (7 U.S.C. 6(b)) is amended by striking ‘‘No 
rule or regulation’’ and inserting ‘‘Except as provided in 
paragraphs (1) and (2), no rule or regulation’’. 
(b) lll.—Section 4(b) of the Commodity Ex-
change Act (7 U.S.C. 6(b)) is further amended by insert-
ing before ‘‘The Commission’’ the following: 
‘‘(1) REGISTRATION.—The Commission may 
adopt rules and regulations requiring registration 
with the Commission for a foreign board of trade 
that provides the members of the foreign board of 
trade or other participants located in the United 
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States direct access to the electronic trading and 
order matching system of the foreign board of trade, 
including rules and regulations prescribing proce-
dures and requirements applicable to the registration 
of such foreign boards of trade. For purposes of this 
paragraph, ‘direct access’ refers to an explicit grant 
of authority by a foreign board of trade to an identi-
fied member or other participant located in the 
United States to enter trades directly into the trade 
matching system of the foreign board of trade. 
‘‘(2) LINKED CONTRACTS.—It shall be unlawful 
for a foreign board of trade to provide to the mem-
bers of the foreign board of trade or other partici-
pants 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 agree-
ment, contract, 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, 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-
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lished by the registered entity for the 1 or more 
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 to the position limits (in-
cluding related hedge exemption provi-
sions) adopted by the registered entity for 
the 1 or more contracts against which the 
agreement, contract, 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-
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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; 
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until the date that is 180 days after such date of en-
actment. 
‘‘(4) PERSONS
LOCATED
IN
THE
UNITED 
STATES.—’’. 
(c) LIABILITY OF REGISTERED PERSONS TRADING 
ON A FOREIGN BOARD OF TRADE.— 
(1) Section 4(a) of the Commodity Exchange 
Act (7. U.S.C. 6(a)) is amended by inserting ‘‘or by 
subsection (f)’’ after ‘‘Unless exempted by the Com-
mission pursuant to subsection (c)’’; and 
(2) Section 4 of the Commodity Exchange Act 
(7 U.S.C. 6) is further amended by adding at the 
end the following: 
‘‘(f) A person registered with the Commission, or ex-
empt from registration by the Commission, under this Act 
may not be found to have violated subsection (a) with re-
spect to a transaction in, or in connection with, a contract 
of sale of a commodity for future delivery if the person 
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 has complied with subsections (b)(1) and 
(b)(2).’’. 
(d) CONTRACT ENFORCEMENT FOR FOREIGN FU-
TURES CONTRACTS.—Section 22(a) of the Commodity Ex-
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change 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. 127. 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: 
‘‘(4) CONTRACT ENFORCEMENT BETWEEN ELI-
GIBLE COUNTERPARTIES.— 
‘‘(A) No hybrid instrument sold to any in-
vestor shall be void, voidable, or unenforceable, 
and no party to such hybrid instrument shall be 
entitled to rescind, or recover any payment 
made with respect to, such a hybrid instrument 
under this section or any other provision of 
Federal or State law, based solely on the failure 
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of the hybrid instrument to comply with the 
terms or conditions of section 2(f) or regula-
tions of the Commission. 
‘‘(B) No agreement, contract, or trans-
action between eligible contract participants or 
persons reasonably believed to be eligible con-
tract participants shall be void, voidable, or un-
enforceable, and no party thereto shall be enti-
tled to rescind, or recover any payment made 
with respect to, such agreement, contract, or 
transaction under this section or any other pro-
vision of Federal or State law, based solely on 
the failure of the agreement, contract, or trans-
action to meet the definition of a swap set forth 
in section 1a or to be cleared pursuant to sec-
tion 2(j)(1).’’. 
SEC. 128. MULTILATERAL CLEARING ORGANIZATIONS. 
(a) Section 408(2)(C) of the Federal Deposit Insur-
ance Corporation Improvement Act of 1991 (12 U.S.C. 
4421(2)(C)) is amended by striking ‘‘section 2(c), 2(d), 
2(f), or 2(g) of such Act, or exempted under section 2(h) 
or 4(c) of such Act’’ and inserting ‘‘section 2(c) or 2(f) 
of such Act’’. 
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(b) Section 408 of the Federal Deposit Insurance 
Corporation Improvement Act of 1991 (12 U.S.C. 4421) 
is further amended by inserting at the end the following: 
‘‘(4) The term ‘over-the-counter derivative in-
strument’ does not include a swap or a security- 
based swap as defined in sections 1a(35) and 1a(38) 
of the Commodity Exchange Act (7 U.S.C. 1a(35) 
and 1a(38)).’’. 
SEC. 129. PRIMARY ENFORCEMENT AUTHORITY. 
The Commodity Exchange Act (7 U.S.C. 1 et seq.) 
is amended by adding the following new section after sec-
tion 4b: 
‘‘SEC. 4b–1. PRIMARY ENFORCEMENT AUTHORITY. 
‘‘(a) CFTC.—Except as provided in subsections (b), 
(c), and (d), the Commission shall have primary authority 
to enforce the provisions of Subtitle A of the Over-the- 
Counter Derivatives Markets 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(e) 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. 
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‘‘(c) REFERRAL.—If the Prudential Regulator for a 
swap dealer or major swap participant has cause to believe 
that such swap dealer or major swap participant may have 
engaged in conduct that constitutes a violation of the non-
prudential 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. 
‘‘(d) BACKSTOP ENFORCEMENT AUTHORITY.—If the 
Commission does not initiate an enforcement proceeding 
before the end of the 90-day period beginning on the date 
on which the Commission receives a recommendation 
under subsection (c), the Prudential Regulator may ini-
tiate an enforcement proceeding as permitted under Fed-
eral law.’’. 
SEC. 130. 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 the Commodity Exchange Act 
(7 U.S.C. 6b(b)) is amended by striking ‘‘or other agree-
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ment, contract or transaction subject to paragraphs (1) 
and (2) of section 5a(g),’’ and inserting ‘‘or swap,’’. 
(c) Section 4c(a) of the Commodity Exchange 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 the Commodity Exchange 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 the Commodity Exchange Act 
(7 U.S.C. 13(a)(4)) is amended by inserting ‘‘swap reposi-
tory,’’ before ‘‘or futures association’’. 
(f) Section 9(e)(1) of the Commodity Exchange Act 
(7 U.S.C. 13(e)(1)) is amended by inserting ‘‘swap reposi-
tory,’’ before ‘‘or registered 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 adding the following 
new paragraph (6) and renumber existing paragraphs (6) 
through (10) as (7) through (11): 
‘‘(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 or 
swap execution facility, whether or not it is an in-
sured depository institution, for which the Board, 
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100 
the Corporation, or the Office of the Comptroller of 
the Currency is the appropriate Federal banking 
agency or Prudential Regulator for purposes of the 
Over-the-Counter 
Derivatives 
Markets 
Act 
of 
2009.’’. 
SEC. 131. RETAIL COMMODITY TRANSACTIONS. 
Section 2(c) of the Commodity Exchange Act (7 
U.S.C. 2(c)) is amended— 
(1) in paragraph (1), by striking ‘‘(to the extent 
provided in section 5a(g), 5b, 5d, or 12(e)(2)(B))’’ 
and inserting ‘‘5b, or 12(e)(2)(B))’’; 
(2) in paragraph (2), by inserting after sub-
paragraph (C) the following: 
‘‘(D) 
RETAIL
COMMODITY
TRANS-
ACTIONS.— 
‘‘(i) This subparagraph shall apply to 
any agreement, contract, or transaction 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-
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101 
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— 
‘‘(aa) results in actual deliv-
ery within 28 days or such other 
period as the Commission may 
determine by rule or regulation 
based upon the typical commer-
cial practice in cash or spot mar-
kets for the commodity involved; 
or 
‘‘(bb) creates an enforceable 
obligation to deliver between a 
seller and a buyer that have the 
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102 
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)). 
‘‘(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 
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103 
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-
ble commercial entity for any agreement, 
contract, or transaction for a commodity in 
connection with its line of business.’’. 
SEC. 132. LARGE SWAP TRADER REPORTING. 
The Commodity Exchange Act (7 U.S.C. 1 et seq.) 
is amended by adding after section 4t (as added by section 
118) the following: 
‘‘SEC. 4u. 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 regulated markets if— 
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104 
‘‘(1) such person shall directly or indirectly 
enter into such swaps during any one 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 shall directly or indirectly 
have or obtain a position in such swaps equal to or 
in excess of such amount as shall be fixed from time 
to time by the Commission, 
unless such 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-
ulation require and unless, in accordance with the rules 
and regulations of the Commission, such person shall keep 
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) Such books and records shall show complete de-
tails concerning all transactions and positions as the Com-
mission may by rule or regulation prescribe. 
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105 
‘‘(c) Such 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 such transactions and positions of any 
persons directly or indirectly controlled by such 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).’’. 
SEC. 133. AUTHORITY TO BAN ABUSIVE SWAPS. 
The Commodity Futures Trading Commission and 
the Securities and Exchange Commission may jointly, by 
rule or order, prohibit transactions in any swap (as de-
fined in section 1a(35) of the Commodity Exchange Act) 
or security-based swap (as defined in section 1a(38) of 
such Act) which the Commodity Futures Trading Com-
mission and the Securities Exchange Commission find 
would be detrimental to the stability of a financial market 
or of participants in a financial market. 
SEC. 134. INTERNATIONAL HARMONIZATION. 
In order to promote effective and consistent global 
regulation of swaps, the Securities and Exchange Commis-
sion, the Commodity Futures Trading Commission, the 
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