H. R. 4173—351 
SEC. 738. FOREIGN BOARDS OF TRADE. 
(a) IN GENERAL.—Section 4(b) of the Commodity Exchange Act 
(7 U.S.C. 6(b)) is amended— 
(1) in the first sentence, by striking ‘‘The Commission’’ 
and inserting the following: 
‘‘(2) PERSONS LOCATED IN THE UNITED STATES.— 
‘‘(A) IN GENERAL.—The Commission’’; 
(2) in the second sentence, by striking ‘‘Such rules and 
regulations’’ and inserting the following: 
‘‘(B) DIFFERENT REQUIREMENTS.—Rules and regulations 
described in subparagraph (A)’’; 
(3) in the third sentence— 
(A) by striking ‘‘No rule or regulation’’ and inserting 
the following: 
‘‘(C) PROHIBITION.—Except as provided in paragraphs 
(1) and (2), no rule or regulation’’; 
(B) by striking ‘‘that (1) requires’’ and inserting the 
following: ‘‘that— 
‘‘(i) requires’’; and 
(C) by striking ‘‘market, or (2) governs’’ and inserting 
the following: ‘‘market; or 
‘‘(ii) governs’’; and 
(4) by inserting before paragraph (2) (as designated by 
paragraph (1)) the following: 
‘‘(1) FOREIGN BOARDS OF TRADE.— 
‘‘(A) 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 States with 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 para-
graph, ‘direct access’ refers to an explicit grant of authority 
by a foreign board of trade to an identified member or 
other participant located in the United States to enter 
trades directly into the trade matching system of the for-
eign board of trade. In adopting such rules and regulations, 
the commission shall consider— 
‘‘(i) whether any such foreign board of trade is 
subject to comparable, comprehensive supervision and 
regulation by the appropriate governmental authorities 
in the foreign board of trade’s home country; and 
‘‘(ii) any previous commission findings that the 
foreign board of trade is subject to comparable com-
prehensive supervision and regulation by the appro-
priate government authorities in the foreign board of 
trade’s home country. 
‘‘(B) LINKED
CONTRACTS.—The Commission may not 
permit a foreign board of trade to provide to the members 
of the foreign board of trade or other participants 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
H. R. 4173—352 
a registered entity, unless the Commission determines 
that— 
‘‘(i) the foreign board of trade makes public daily 
trading information regarding the agreement, contract, 
or transaction that is comparable to the daily trading 
information published 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 
‘‘(ii) the foreign board of trade (or the foreign 
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 (including related hedge exemp-
tion provisions) 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 pre-
vent or reduce the threat of price manipulation, 
excessive speculation as described in section 4a, 
price distortion, or disruption of delivery or the 
cash settlement process; 
‘‘(III) agrees to promptly notify the Commis-
sion, with regard to the agreement, 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 reg-
istered entity, of any change regarding— 
‘‘(aa) the information that the foreign 
board of trade will make publicly available; 
‘‘(bb) the position limits that the foreign 
board of trade or foreign futures authority will 
adopt and enforce; 
‘‘(cc) the position reductions required to 
prevent manipulation, excessive speculation as 
described in section 4a, price distortion, or 
disruption of delivery or the cash settlement 
process; and 
‘‘(dd) any other area of interest expressed 
by the Commission to the foreign board of 
trade or foreign futures authority; 
‘‘(IV) provides information to the Commission 
regarding large trader positions in the agreement, 
contract, or transaction that is comparable to the 
large trader 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 such informa-
tion as is necessary to publish reports on aggregate
H. R. 4173—353 
trader positions for the agreement, contract, or 
transaction traded on the foreign board of trade 
that are comparable to such 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. 
‘‘(C) EXISTING FOREIGN BOARDS OF TRADE.—Subpara-
graphs (A) and (B) shall not be effective with respect to 
any foreign board of trade to which, prior to the date 
of enactment of this paragraph, the Commission granted 
direct access permission until the date that is 180 days 
after that date of enactment.’’. 
(b) LIABILITY OF REGISTERED PERSONS TRADING ON A FOREIGN 
BOARD OF TRADE.—Section 4 of the Commodity Exchange Act (7 
U.S.C. 6) is amended— 
(1) in subsection (a), in the matter preceding paragraph 
(1), by inserting ‘‘or by subsection (e)’’ after ‘‘Unless exempted 
by the Commission pursuant to subsection (c)’’; and 
(2) by adding at the end the following: 
‘‘(e) LIABILITY OF REGISTERED PERSONS TRADING ON A FOREIGN 
BOARD OF TRADE.— 
‘‘(1) IN GENERAL.—A person registered with the Commis-
sion, 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 person— 
‘‘(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 
‘‘(B) has not been determined by the Commission to 
be operating in violation of subsection (a). 
‘‘(2) RULE OF CONSTRUCTION.—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
FUTURES
CON-
TRACTS.—Section 22(a) of the Commodity Exchange Act (7 U.S.C. 
25(a)) (as amended by section 739) is amended by adding at the 
end the following: 
‘‘(6) CONTRACT ENFORCEMENT
FOR FOREIGN FUTURES CON-
TRACTS.—A contract of sale of a commodity 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 purposes 
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 failure of the foreign board of trade to comply with any 
provision of this Act.’’.
H. R. 4173—354 
SEC. 739. LEGAL CERTAINTY FOR SWAPS. 
Section 22(a) of the Commodity Exchange Act (7 U.S.C. 25(a)) 
is amended by striking paragraph (4) and inserting the following: 
‘‘(4) CONTRACT ENFORCEMENT BETWEEN ELIGIBLE COUNTERPAR-
TIES.— 
‘‘(A) IN
GENERAL.—No hybrid instrument sold to any 
investor shall be void, voidable, or unenforceable, and no party 
to a hybrid instrument shall be entitled to rescind, or recover 
any payment made with respect to, the hybrid instrument 
under this section or any other provision 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. 
‘‘(B) SWAPS.—No agreement, contract, or transaction 
between eligible contract participants or persons reasonably 
believed to be eligible contract participants shall be void, void-
able, or unenforceable, and no party to such agreement, con-
tract, or transaction shall be entitled to rescind, or recover 
any payment made with respect to, the agreement, contract, 
or transaction under this section or any other provision of 
Federal or State law, based solely on the failure of the agree-
ment, contract, or transaction— 
‘‘(i) to meet the definition of a swap under section 
1a; or 
‘‘(ii) to be cleared in accordance with section 2(h)(1). 
‘‘(5) LEGAL CERTAINTY FOR LONG-TERM SWAPS ENTERED INTO 
BEFORE THE DATE OF ENACTMENT OF THE WALL STREET TRANS-
PARENCY AND ACCOUNTABILITY ACT OF 2010.— 
‘‘(A) EFFECT
ON
SWAPS.—Unless specifically reserved in 
the applicable swap, neither the enactment of the Wall Street 
Transparency and Accountability Act of 2010, nor any require-
ment under that Act or an amendment made by that Act, 
shall constitute a termination event, force majeure, illegality, 
increased costs, regulatory change, or similar event under a 
swap (including any related credit support arrangement) that 
would permit a party to terminate, renegotiate, modify, amend, 
or supplement 1 or more transactions under the swap. 
‘‘(B) POSITION LIMITS.—Any position limit established under 
the Wall Street Transparency and Accountability Act of 2010 
shall not apply to a position acquired in good faith prior to 
the effective date of any rule, regulation, or order under the 
Act that establishes the position limit; provided, however, that 
such positions shall be attributed to the trader if the trader’s 
position is increased after the effective date of such position 
limit rule, regulation, or order.’’. 
SEC. 740. MULTILATERAL CLEARING ORGANIZATIONS. 
Sections 408 and 409 of the Federal Deposit Insurance Corpora-
tion Improvement Act of 1991 (12 U.S.C. 4421, 4422) are repealed. 
SEC. 741. ENFORCEMENT. 
(a) ENFORCEMENT AUTHORITY.—The Commodity Exchange Act 
is amended by inserting after section 4b (7 U.S.C. 6b) the following: 
‘‘SEC. 4b–1. ENFORCEMENT AUTHORITY. 
‘‘(a) COMMODITY FUTURES TRADING COMMISSION.—Except as 
provided in subsections (b), (c), and (d), the Commission shall have 
exclusive authority to enforce the provisions of subtitle A of the
H. R. 4173—355 
Wall Street Transparency and Accountability Act of 2010 with 
respect to any person. 
‘‘(b) PRUDENTIAL REGULATORS.—The prudential regulators shall 
have exclusive authority to enforce the provisions of section 4s(e) 
with respect to swap dealers or major swap participants for which 
they are the prudential regulator. 
‘‘(c) REFERRALS.— 
‘‘(1) PRUDENTIAL REGULATORS.—If the prudential regulator 
for a swap dealer or major swap participant has cause to 
believe that the swap dealer or major swap participant, or 
any affiliate or division of the swap dealer or major swap 
participant, may have engaged in conduct that constitutes a 
violation of the nonprudential requirements of this Act 
(including section 4s or rules adopted by the Commission under 
that section), the prudential regulator may promptly notify 
the Commission in a written report that includes— 
‘‘(A) a request that the Commission initiate an enforce-
ment proceeding under this Act; and 
‘‘(B) an explanation of the facts and circumstances 
that led to the preparation of the written report. 
‘‘(2) COMMISSION.—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 constitutes 
a violation of any prudential requirement of section 4s or rules 
adopted by the Commission under that section, the Commission 
may notify the prudential regulator of the conduct in a written 
report that includes— 
‘‘(A) a request that the prudential regulator initiate 
an enforcement proceeding under this Act or any other 
Federal law (including regulations); and 
‘‘(B) an explanation of the concerns of the Commission, 
and a description of the facts and circumstances, that led 
to the preparation of the written report. 
‘‘(d) BACKSTOP ENFORCEMENT AUTHORITY.— 
‘‘(1) INITIATION OF ENFORCEMENT PROCEEDING BY PRUDEN-
TIAL
REGULATOR.—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 
written report under subsection (c)(1), the prudential regulator 
may initiate an enforcement proceeding. 
‘‘(2) INITIATION OF ENFORCEMENT PROCEEDING BY COMMIS-
SION.—If the prudential regulator does not initiate an enforce-
ment proceeding before the end of the 90-day period beginning 
on the date on which the prudential regulator receives a written 
report under subsection (c)(2), the Commission may initiate 
an enforcement proceeding.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 4b of the Commodity Exchange Act (7 U.S.C. 
6b) is amended— 
(A) in subsection (a)(2), by striking ‘‘or other agree-
ment, contract, or transaction subject to paragraphs (1) 
and (2) of section 5a(g),’’ and inserting ‘‘or swap,’’; 
(B) in subsection (b), by striking ‘‘or other agreement, 
contract or transaction subject to paragraphs (1) and (2) 
of section 5a(g),’’ and inserting ‘‘or swap,’’; and 
(C) by adding at the end the following:
H. R. 4173—356 
‘‘(e) 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 registered entity, in 
or in connection with any order to make, or the making of, any 
contract of sale of any commodity for future delivery (or option 
on such a contract), or any swap, on a group or index of securities 
(or any interest therein or based on the value thereof)— 
‘‘(1) to employ any device, scheme, or artifice to defraud; 
‘‘(2) to make any untrue statement of a material fact or 
to omit to state a material fact necessary in order to make 
the statements made, in the light of the circumstances under 
which they were made, not misleading; or 
‘‘(3) to engage in any act, practice, or course of business 
which operates or would operate as a fraud or deceit upon 
any person.’’. 
(2) Section 4c(a)(1) of the Commodity Exchange Act (7 
U.S.C. 6c(a)(1)) is amended by inserting ‘‘or swap’’ before ‘‘if 
the transaction is used or may be used’’. 
(3) Section 6(c) of the Commodity Exchange Act (7 U.S.C. 
9) is amended in the first sentence by inserting ‘‘or of any 
swap,’’ before ‘‘or has willfully made’’. 
(4) Section 6(d) of the Commodity Exchange Act (7 U.S.C. 
13b) is amended in the first sentence, in the matter preceding 
the proviso, by inserting ‘‘or of any swap,’’ before ‘‘or otherwise 
is violating’’. 
(5) Section 6c(a) of the Commodity Exchange Act (7 U.S.C. 
13a–1(a)) is amended in the matter preceding the proviso by 
inserting ‘‘or any swap’’ after ‘‘commodity for future delivery’’. 
(6) Section 9 of the Commodity Exchange Act (7 U.S.C. 
13) is amended— 
(A) in subsection (a)— 
(i) in paragraph (2), by inserting ‘‘or of any swap,’’ 
before ‘‘or to corner’’; and 
(ii) in paragraph (4), by inserting ‘‘swap data 
repository,’’ before ‘‘or futures association’’ and 
(B) in subsection (e)(1)— 
(i) by inserting ‘‘swap data repository,’’ before ‘‘or 
registered futures association’’; and 
(ii) by inserting ‘‘, or swaps,’’ before ‘‘on the basis’’. 
(7) Section 9(a) of the Commodity Exchange Act (7 U.S.C. 
13(a)) is amended by adding at the end the following: 
‘‘(6) Any person to abuse the end user clearing exemption 
under section 2(h)(4), as determined by the Commission.’’. 
(8) Section 2(c)(2)(B) of the Commodity Exchange Act (7 
U.S.C. 2(c)(2)(B)) is amended— 
(A) by striking ‘‘(dd),’’ each place it appears; 
(B) in clause (iii), by inserting ‘‘, and accounts or pooled 
investment vehicles described in clause (vi),’’ before ‘‘shall 
be subject to’’; and 
(C) by adding at the end the following: 
‘‘(vi) This Act applies to, and the Commission shall 
have jurisdiction over, an account or pooled investment 
vehicle that is offered for the purpose of trading, or 
that trades, any agreement, contract, or transaction 
in foreign currency described in clause (i).’’. 
(9) Section 2(c)(2)(C) of the Commodity Exchange Act (7 
U.S.C. 2(c)(2)(C)) is amended—
H. R. 4173—357 
(A) by striking ‘‘(dd),’’ each place it appears; 
(B) in clause (ii)(I), by inserting ‘‘, and accounts or 
pooled investment vehicles described in clause (vii),’’ before 
‘‘shall be subject to’’; and 
(C) by adding at the end the following: 
‘‘(vii) This Act applies to, and the Commission 
shall have jurisdiction over, an account or pooled 
investment vehicle that is offered for the purpose of 
trading, or that trades, any agreement, contract, or 
transaction in foreign currency described in clause (i).’’. 
(10) Section 1a(19)(A)(iv)(II) of the Commodity Exchange 
Act (7 U.S.C. 1a(19)(A)(iv)(II)) (as redesignated by section 
721(a)(1)) is amended by inserting before the semicolon at the 
end the following: ‘‘provided, however, that for purposes of 
section 2(c)(2)(B)(vi) and section 2(c)(2)(C)(vii), the term ‘eligible 
contract participant’ shall not include a commodity pool in 
which any participant is not otherwise an eligible contract 
participant’’. 
(11) Section 6(e) of the Commodity Exchange Act (7 U.S.C. 
9a) is amended by adding at the end the following: 
‘‘(4) Any designated clearing organization that knowingly 
or recklessly evades or participates in or facilitates an evasion 
of the requirements of section 2(h) shall be liable for a civil 
money penalty in twice the amount otherwise available for 
a violation of section 2(h). 
‘‘(5) Any swap dealer or major swap participant that know-
ingly or recklessly evades or participates in or facilitates an 
evasion of the requirements of section 2(h) shall be liable for 
a civil money penalty in twice the amount otherwise available 
for a violation of section 2(h).’’. 
(c) SAVINGS CLAUSE.—Notwithstanding any other provision of 
this title, nothing in this subtitle shall be construed as divesting 
any appropriate Federal banking agency of any authority it may 
have to establish or enforce, with respect to a person for which 
such agency is the appropriate Federal banking agency, prudential 
or other standards pursuant to authority granted by Federal law 
other than this title. 
SEC. 742. RETAIL COMMODITY TRANSACTIONS. 
(a) IN GENERAL.—Section 2(c) of the Commodity Exchange Act 
(7 U.S.C. 2(c)) is amended— 
(1) in paragraph (1), by striking ‘‘5a (to the extent provided 
in section 5a(g)), 5b, 5d, or 12(e)(2)(B))’’ and inserting ‘‘, 5b, 
or 12(e)(2)(B))’’; and 
(2) in paragraph (2), by adding at the end the following: 
‘‘(D) RETAIL COMMODITY TRANSACTIONS.— 
‘‘(i) APPLICABILITY.—Except as provided in clause 
(ii), 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 
entity; and 
‘‘(II) entered into, or offered (even if not 
entered into), on a leveraged or margined basis, 
or financed by the offeror, the counterparty, or
H. R. 4173—358 
a person acting in concert with the offeror or 
counterparty on a similar basis. 
‘‘(ii) EXCEPTIONS.—This subparagraph shall not 
apply to— 
‘‘(I) an agreement, contract, or transaction 
described in paragraph (1) or subparagraphs (A), 
(B), or (C), including any agreement, contract, or 
transaction specifically excluded from subpara-
graph (A), (B), or (C); 
‘‘(II) any security; 
‘‘(III) a contract of sale that— 
‘‘(aa) results in actual delivery within 28 
days or such other longer period as the 
Commission may determine by rule or regula-
tion based upon the typical commercial prac-
tice in cash or spot markets for the commodity 
involved; or 
‘‘(bb) creates an enforceable obligation to 
deliver between a seller and a buyer that have 
the ability to deliver and accept delivery, 
respectively, in connection with the line of 
business of the seller and buyer; or 
‘‘(IV) an agreement, contract, or transaction 
that is listed on a national securities exchange 
registered under section 6(a) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78f(a)); or 
‘‘(V) an identified banking product, as defined 
in section 402(b) of the Legal Certainty for Bank 
Products Act of 2000 (7 U.S.C.27(b)). 
‘‘(iii) ENFORCEMENT.—Sections 4(a), 4(b), and 4b 
apply to any agreement, contract, or transaction 
described in clause (i), as if the agreement, contract, 
or transaction was a contract of sale of a commodity 
for future delivery. 
‘‘(iv) ELIGIBLE COMMERCIAL ENTITY.—For purposes 
of this subparagraph, an agricultural producer, packer, 
or handler shall be considered to be an eligible commer-
cial entity for any agreement, contract, or transaction 
for a commodity in connection with the line of business 
of the agricultural producer, packer, or handler.’’. 
(b) GRAMM-LEACH-BLILEY ACT.—Section 206(a) of the Gramm- 
Leach-Bliley Act (Public Law 106–102; 15 U.S.C. 78c note) is 
amended, in the matter preceding paragraph (1), by striking ‘‘For 
purposes of’’ and inserting ‘‘Except as provided in subsection (e), 
for purposes of’’. 
(c) CONFORMING AMENDMENTS RELATING TO RETAIL FOREIGN 
EXCHANGE TRANSACTIONS.— 
(1) Section 2(c)(2)(B)(i)(II) of the Commodity Exchange Act 
(7 U.S.C. 2(c)(2)(B)(i)(II)) is amended— 
(A) in item (aa), by inserting ‘‘United States’’ before 
‘‘financial institution’’; 
(B) by striking items (dd) and (ff); 
(C) by redesignating items (ee) and (gg) as items (dd) 
and (ff), respectively; and 
(D) in item (dd) (as so redesignated), by striking the 
semicolon and inserting ‘‘; or’’.
H. R. 4173—359 
(2) Section 2(c)(2) of the Commodity Exchange Act (7 U.S.C. 
2(c)(2)) (as amended by subsection (a)(2)) is amended by adding 
at the end the following: 
‘‘(E) PROHIBITION.— 
‘‘(i) 
DEFINITION
OF
FEDERAL
REGULATORY 
AGENCY.—In this subparagraph, the term ‘Federal 
regulatory agency’ means— 
‘‘(I) the Commission; 
‘‘(II) the Securities and Exchange Commission; 
‘‘(III) an appropriate Federal banking agency; 
‘‘(IV) the National Credit Union Association; 
and 
‘‘(V) the Farm Credit Administration. 
‘‘(ii) PROHIBITION.— 
‘‘(I) IN GENERAL.—Except as provided in sub-
clause (II), a person described in subparagraph 
(B)(i)(II) for which there is a Federal regulatory 
agency shall not offer to, or enter into with, a 
person that is not an eligible contract participant, 
any agreement, contract, or transaction in foreign 
currency described in subparagraph (B)(i)(I) except 
pursuant to a rule or regulation of a Federal regu-
latory agency allowing the agreement, contract, 
or transaction under such terms and conditions 
as the Federal regulatory agency shall prescribe. 
‘‘(II) EFFECTIVE DATE.—With regard to persons 
described in subparagraph (B)(i)(II) for which a 
Federal regulatory agency has issued a proposed 
rule concerning agreements, contracts, or trans-
actions in foreign currency described in subpara-
graph (B)(i)(I) prior to the date of enactment of 
this subclause, subclause (I) shall take effect 90 
days after the date of enactment of this subclause. 
‘‘(iii) REQUIREMENTS OF RULES AND REGULATIONS.— 
‘‘(I) IN GENERAL.—The rules and regulations 
described in clause (ii) shall prescribe appropriate 
requirements with respect to— 
‘‘(aa) disclosure; 
‘‘(bb) recordkeeping; 
‘‘(cc) capital and margin; 
‘‘(dd) reporting; 
‘‘(ee) business conduct; 
‘‘(ff) documentation; and 
‘‘(gg) such other standards or require-
ments as the Federal regulatory agency shall 
determine to be necessary. 
‘‘(II) TREATMENT.—The rules or regulations 
described in clause (ii) shall treat all agreements, 
contracts, and transactions in foreign currency 
described in subparagraph (B)(i)(I), and all agree-
ments, contracts, and transactions in foreign cur-
rency that are functionally or economically similar 
to agreements, contracts, or transactions described 
in subparagraph (B)(i)(I), similarly.’’.
H. R. 4173—360 
SEC. 743. OTHER AUTHORITY. 
Unless otherwise provided by the amendments made by this 
subtitle, the amendments made by this subtitle do not divest any 
appropriate Federal banking agency, the Commodity Futures 
Trading Commission, the Securities and Exchange Commission, 
or other Federal or State agency of any authority derived from 
any other applicable law. 
SEC. 744. RESTITUTION REMEDIES. 
Section 6c(d) of the Commodity Exchange Act (7 U.S.C. 13a– 
1(d)) is amended by adding at the end the following: 
‘‘(3) EQUITABLE REMEDIES.—In any action brought under 
this section, the Commission may seek, and the court may 
impose, on a proper showing, on any person found in the 
action to have committed any violation, equitable remedies 
including— 
‘‘(A) restitution to persons who have sustained losses 
proximately caused by such violation (in the amount of 
such losses); and 
‘‘(B) disgorgement of gains received in connection with 
such violation.’’. 
SEC. 745. ENHANCED COMPLIANCE BY REGISTERED ENTITIES. 
(a) EFFECT
OF INTERPRETATION.—Section 5c(a) of the Com-
modity Exchange Act (7 U.S.C. 7a–2(a)) is amended by striking 
paragraph (2) and inserting the following: 
‘‘(2) EFFECT OF INTERPRETATION.—An interpretation issued 
under paragraph (1) may provide the exclusive means for com-
plying with each section described in paragraph (1).’’. 
(b) NEW CONTRACTS, NEW RULES, AND RULE AMENDMENTS.— 
Section 5c of the Commodity Exchange Act (7 U.S.C. 7a–2) is 
amended by striking subsection (c) and inserting the following: 
‘‘(c) NEW CONTRACTS, NEW RULES, AND RULE AMENDMENTS.— 
‘‘(1) IN
GENERAL.—A registered entity may elect to list 
for trading or accept for clearing any new contract, or other 
instrument, or may elect to approve and implement any new 
rule or rule amendment, by providing to the Commission (and 
the Secretary of the Treasury, in the case of a contract of 
sale of a government security for future delivery (or option 
on such a contract) or a rule or rule amendment specifically 
related to such a contract) a written certification that the 
new contract or instrument or clearing of the new contract 
or instrument, new rule, or rule amendment complies with 
this Act (including regulations under this Act). 
‘‘(2) RULE
REVIEW.—The new rule or rule amendment 
described in paragraph (1) shall become effective, pursuant 
to the certification of the registered entity and notice of such 
certification to its members (in a manner to be determined 
by the Commission), on the date that is 10 business days 
after the date on which the Commission receives the certifi-
cation (or such shorter period as determined by the Commission 
by rule or regulation) unless the Commission notifies the reg-
istered entity within such time that it is staying the certification 
because there exist novel or complex issues that require addi-
tional time to analyze, an inadequate explanation by the 
submitting registered entity, or a potential inconsistency with 
this Act (including regulations under this Act).
H. R. 4173—361 
‘‘(3) STAY OF CERTIFICATION FOR RULES.— 
‘‘(A) A notification by the Commission pursuant to 
paragraph (2) shall stay the certification of the new rule 
or rule amendment for up to an additional 90 days from 
the date of the notification. 
‘‘(B) A rule or rule amendment subject to a stay pursu-
ant to subparagraph (A) shall become effective, pursuant 
to the certification of the registered entity, at the expiration 
of the period described in subparagraph (A) unless the 
Commission— 
‘‘(i) withdraws the stay prior to that time; or 
‘‘(ii) notifies the registered entity during such 
period that it objects to the proposed certification on 
the grounds that it is inconsistent with this Act 
(including regulations under this Act). 
‘‘(C) The Commission shall provide a not less than 
30-day public comment period, within the 90-day period 
in which the stay is in effect as described in subparagraph 
(A), whenever the Commission reviews a rule or rule 
amendment pursuant to a notification by the Commission 
under this paragraph. 
‘‘(4) PRIOR APPROVAL.— 
‘‘(A) IN GENERAL.—A registered entity may request that 
the Commission grant prior approval to any new contract 
or other instrument, new rule, or rule amendment. 
‘‘(B) PRIOR APPROVAL REQUIRED.—Notwithstanding any 
other provision of this section, a designated contract market 
shall submit to the Commission for prior approval each 
rule amendment that materially changes the terms and 
conditions, as determined by the Commission, in any con-
tract of sale for future delivery of a commodity specifically 
enumerated in section 1a(10) (or any option thereon) traded 
through its facilities if the rule amendment applies to 
contracts and delivery months which have already been 
listed for trading and have open interest. 
‘‘(C) DEADLINE.—If prior approval is requested under 
subparagraph (A), the Commission shall take final action 
on the request not later than 90 days after submission 
of the request, unless the person submitting the request 
agrees to an extension of the time limitation established 
under this subparagraph. 
‘‘(5) APPROVAL.— 
‘‘(A) RULES.—The Commission shall approve a new 
rule, or rule amendment, of a registered entity unless the 
Commission finds that the new rule, or rule amendment, 
is inconsistent with this subtitle (including regulations). 
‘‘(B) CONTRACTS AND INSTRUMENTS.—The Commission 
shall approve a new contract or other instrument unless 
the Commission finds that the new contract or other 
instrument would violate this Act (including regulations). 
‘‘(C) SPECIAL RULE FOR REVIEW AND APPROVAL OF EVENT 
CONTRACTS AND SWAPS CONTRACTS.— 
‘‘(i) EVENT
CONTRACTS.—In connection with the 
listing of agreements, contracts, transactions, or swaps 
in excluded commodities that are based upon the occur-
rence, extent of an occurrence, or contingency (other 
than a change in the price, rate, value, or levels of
H. R. 4173—362 
a commodity described in section 1a(2)(i)), by a des-
ignated contract market or swap execution facility, the 
Commission may determine that such agreements, con-
tracts, or transactions are contrary to the public 
interest if the agreements, contracts, or transactions 
involve— 
‘‘(I) activity that is unlawful under any Federal 
or State law; 
‘‘(II) terrorism; 
‘‘(III) assassination; 
‘‘(IV) war; 
‘‘(V) gaming; or 
‘‘(VI) other similar activity determined by the 
Commission, by rule or regulation, to be contrary 
to the public interest. 
‘‘(ii) PROHIBITION.—No agreement, contract, or 
transaction determined by the Commission to be con-
trary to the public interest under clause (i) may be 
listed or made available for clearing or trading on 
or through a registered entity. 
‘‘(iii) SWAPS CONTRACTS.— 
‘‘(I) IN
GENERAL.—In connection with the 
listing of a swap for clearing by a derivatives 
clearing organization, the Commission shall deter-
mine, upon request or on its own motion, the initial 
eligibility, or the continuing qualification, of a 
derivatives clearing organization to clear such a 
swap under those criteria, conditions, or rules that 
the Commission, in its discretion, determines. 
‘‘(II) REQUIREMENTS.—Any such criteria, condi-
tions, or rules shall consider— 
‘‘(aa) the financial integrity of the deriva-
tives clearing organization; and 
‘‘(bb) any other factors which the Commis-
sion determines may be appropriate. 
‘‘(iv) DEADLINE.—The Commission shall take final 
action under clauses (i) and (ii) in not later than 90 
days from the commencement of its review unless the 
party seeking to offer the contract or swap agrees 
to an extension of this time limitation.’’. 
(c) VIOLATION OF CORE PRINCIPLES.—Section 5c of the Com-
modity Exchange Act (7 U.S.C. 7a–2) is amended by striking sub-
section (d). 
SEC. 746. INSIDER TRADING. 
Section 4c(a) of the Commodity Exchange Act (7 U.S.C. 6c(a)) 
is amended by adding at the end the following: 
‘‘(3) CONTRACT
OF
SALE.—It shall be unlawful for any 
employee or agent of any department or agency of the Federal 
Government who, by virtue of the employment or position of 
the employee or agent, acquires information that may affect 
or tend to affect the price of any commodity in interstate 
commerce, or for future delivery, or any swap, and which 
information has not been disseminated by the department or 
agency of the Federal Government holding or creating the 
information in a manner which makes it generally available 
to the trading public, or disclosed in a criminal, civil, or
H. R. 4173—363 
administrative hearing, or in a congressional, administrative, 
or Government Accountability Office report, hearing, audit, or 
investigation, to use the information in his personal capacity 
and for personal gain to enter into, or offer to enter into— 
‘‘(A) a contract of sale of a commodity for future 
delivery (or option on such a contract); 
‘‘(B) an option (other than an option executed or traded 
on a national securities exchange registered pursuant to 
section 6(a) of the Securities Exchange Act of 1934 (15 
U.S.C. 78f(a)); or 
‘‘(C) a swap. 
‘‘(4) NONPUBLIC INFORMATION.— 
‘‘(A) IMPARTING OF NONPUBLIC INFORMATION.—It shall 
be unlawful for any employee or agent of any department 
or agency of the Federal Government who, by virtue of 
the employment or position of the employee or agent, 
acquires information that may affect or tend to affect the 
price of any commodity in interstate commerce, or for future 
delivery, or any swap, and which information has not been 
disseminated by the department or agency of the Federal 
Government holding or creating the information in a 
manner which makes it generally available to the trading 
public, or disclosed in a criminal, civil, or administrative 
hearing, or in a congressional, administrative, or Govern-
ment Accountability Office report, hearing, audit, or inves-
tigation, to impart the information in his personal capacity 
and for personal gain with intent to assist another person, 
directly or indirectly, to use the information to enter into, 
or offer to enter into— 
‘‘(i) a contract of sale of a commodity for future 
delivery (or option on such a contract); 
‘‘(ii) an option (other than an option executed or 
traded on a national securities exchange registered 
pursuant to section 6(a) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78f(a)); or 
‘‘(iii) a swap. 
‘‘(B) KNOWING USE.—It shall be unlawful for any person 
who receives information imparted by any employee or 
agent of any department or agency of the Federal Govern-
ment as described in subparagraph (A) to knowingly use 
such information to enter into, or offer to enter into— 
‘‘(i) a contract of sale of a commodity for future 
delivery (or option on such a contract); 
‘‘(ii) an option (other than an option executed or 
traded on a national securities exchange registered 
pursuant to section 6(a) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78f(a)); or 
‘‘(iii) a swap. 
‘‘(C) THEFT OF NONPUBLIC INFORMATION.—It shall be 
unlawful for any person to steal, convert, or misappropriate, 
by any means whatsoever, information held or created 
by any department or agency of the Federal Government 
that may affect or tend to affect the price of any commodity 
in interstate commerce, or for future delivery, or any swap, 
where such person knows, or acts in reckless disregard 
of the fact, that such information has not been disseminated 
by the department or agency of the Federal Government
H. R. 4173—364 
holding or creating the information in a manner which 
makes it generally available to the trading public, or dis-
closed in a criminal, civil, or administrative hearing, or 
in a congressional, administrative, or Government Account-
ability Office report, hearing, audit, or investigation, and 
to use such information, or to impart such information 
with the intent to assist another person, directly or 
indirectly, to use such information to enter into, or offer 
to enter into— 
‘‘(i) a contract of sale of a commodity for future 
delivery (or option on such a contract); 
‘‘(ii) an option (other than an option executed or 
traded on a national securities exchange registered 
pursuant to section 6(a) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78f(a)); or 
‘‘(iii) a swap, provided, however, that nothing in 
this subparagraph shall preclude a person that has 
provided information concerning, or generated by, the 
person, its operations or activities, to any employee 
or agent of any department or agency of the Federal 
Government, voluntarily or as required by law, from 
using such information to enter into, or offer to enter 
into, a contract of sale, option, or swap described in 
clauses (i), (ii), or (iii).’’. 
SEC. 747. ANTIDISRUPTIVE PRACTICES AUTHORITY. 
Section 4c(a) of the Commodity Exchange Act (7 U.S.C. 6c(a)) 
(as amended by section 746) is amended by adding at the end 
the following: 
‘‘(5) DISRUPTIVE PRACTICES.—It shall be unlawful for any 
person to engage in any trading, practice, or conduct on or 
subject to the rules of a registered entity that— 
‘‘(A) violates bids or offers; 
‘‘(B) demonstrates intentional or reckless disregard for 
the orderly execution of transactions during the closing 
period; or 
‘‘(C) is, is of the character of, or is commonly known 
to the trade as, ‘spoofing’ (bidding or offering with the 
intent to cancel the bid or offer before execution). 
‘‘(6) RULEMAKING AUTHORITY.—The Commission may make 
and promulgate such rules and regulations as, in the judgment 
of the Commission, are reasonably necessary to prohibit the 
trading practices described in paragraph (5) and any other 
trading practice that is disruptive of fair and equitable trading. 
‘‘(7) USE OF SWAPS TO DEFRAUD.—It shall be unlawful for 
any person to enter into a swap knowing, or acting in reckless 
disregard of the fact, that its counterparty will use the swap 
as part of a device, scheme, or artifice to defraud any third 
party.’’. 
SEC. 748. COMMODITY WHISTLEBLOWER INCENTIVES AND PROTEC-
TION. 
The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended 
by adding at the end the following: 
‘‘SEC. 23. COMMODITY WHISTLEBLOWER INCENTIVES AND PROTEC-
TION. 
‘‘(a) DEFINITIONS.—In this section:
H. R. 4173—365 
‘‘(1) COVERED JUDICIAL OR ADMINISTRATIVE ACTION.—The 
term ‘covered judicial or administrative action’ means any 
judicial or administrative action brought by the Commission 
under this Act that results in monetary sanctions exceeding 
$1,000,000. 
‘‘(2) FUND.—The term ‘Fund’ means the Commodity 
Futures Trading Commission Customer Protection Fund estab-
lished under subsection (g). 
‘‘(3) MONETARY SANCTIONS.—The term ‘monetary sanctions’, 
when used with respect to any judicial or administrative action 
means— 
‘‘(A) any monies, including penalties, disgorgement, 
restitution, and interest ordered to be paid; and 
‘‘(B) any monies deposited into a disgorgement fund 
or other fund pursuant to section 308(b) of the Sarbanes- 
Oxley Act of 2002 (15 U.S.C. 7246(b)), as a result of such 
action or any settlement of such action. 
‘‘(4) ORIGINAL INFORMATION.—The term ‘original informa-
tion’ means information that— 
‘‘(A) is derived from the independent knowledge or 
analysis of a whistleblower; 
‘‘(B) is not known to the Commission from any other 
source, unless the whistleblower is the original source of 
the information; and 
‘‘(C) is not exclusively derived from an allegation made 
in a judicial or administrative hearing, in a governmental 
report, hearing, audit, or investigation, or from the news 
media, unless the whistleblower is a source of the informa-
tion. 
‘‘(5) RELATED ACTION.—The term ‘related action’, when used 
with respect to any judicial or administrative action brought 
by the Commission under this Act, means any judicial or 
administrative action brought by an entity described in sub-
clauses (I) through (VI) of subsection (h)(2)(C) that is based 
upon the original information provided by a whistleblower 
pursuant to subsection (a) that led to the successful enforcement 
of the Commission action. 
‘‘(6) SUCCESSFUL RESOLUTION.—The term ‘successful resolu-
tion’, when used with respect to any judicial or administrative 
action brought by the Commission under this Act, includes 
any settlement of such action. 
‘‘(7) WHISTLEBLOWER.—The term ‘whistleblower’ means any 
individual, or 2 or more individuals acting jointly, who provides 
information relating to a violation of this Act to the Commis-
sion, in a manner established by rule or regulation by the 
Commission. 
‘‘(b) AWARDS.— 
‘‘(1) IN GENERAL.—In any covered judicial or administrative 
action, or related action, the Commission, under regulations 
prescribed by the Commission and subject to subsection (c), 
shall pay an award or awards to 1 or more whistleblowers 
who voluntarily provided original information to the Commis-
sion that led to the successful enforcement of the covered 
judicial or administrative action, or related action, in an aggre-
gate amount equal to—
H. R. 4173—366 
‘‘(A) not less than 10 percent, in total, of what has 
been collected of the monetary sanctions imposed in the 
action or related actions; and 
‘‘(B) not more than 30 percent, in total, of what has 
been collected of the monetary sanctions imposed in the 
action or related actions. 
‘‘(2) PAYMENT OF AWARDS.—Any amount paid under para-
graph (1) shall be paid from the Fund. 
‘‘(c) DETERMINATION
OF
AMOUNT
OF
AWARD; DENIAL
OF 
AWARD.— 
‘‘(1) DETERMINATION OF AMOUNT OF AWARD.— 
‘‘(A) DISCRETION.—The determination of the amount 
of an award made under subsection (b) shall be in the 
discretion of the Commission. 
‘‘(B) CRITERIA.—In determining the amount of an 
award made under subsection (b), the Commission— 
‘‘(i) shall take into consideration— 
‘‘(I) the significance of the information pro-
vided by the whistleblower to the success of the 
covered judicial or administrative action; 
‘‘(II) the degree of assistance provided by the 
whistleblower and any legal representative of the 
whistleblower in a covered judicial or administra-
tive action; 
‘‘(III) 
the 
programmatic 
interest 
of 
the 
Commission in deterring violations of the Act 
(including regulations under the Act) by making 
awards to whistleblowers who provide information 
that leads to the successful enforcement of such 
laws; and 
‘‘(IV) such additional relevant factors as the 
Commission may establish by rule or regulation; 
and 
‘‘(ii) shall not take into consideration the balance 
of the Fund. 
‘‘(2) DENIAL OF AWARD.—No award under subsection (b) 
shall be made— 
‘‘(A) to any whistleblower who is, or was at the time 
the whistleblower acquired the original information sub-
mitted to the Commission, a member, officer, or employee 
of— 
‘‘(i) a appropriate regulatory agency; 
‘‘(ii) the Department of Justice; 
‘‘(iii) a registered entity; 
‘‘(iv) a registered futures association; 
‘‘(v) a self-regulatory organization as defined in 
section 3(a) of the Securities Exchange Act of 1934 
(15 U.S.C. 78c(a)); or 
‘‘(vi) a law enforcement organization; 
‘‘(B) to any whistleblower who is convicted of a criminal 
violation related to the judicial or administrative action 
for which the whistleblower otherwise could receive an 
award under this section; 
‘‘(C) to any whistleblower who submits information 
to the Commission that is based on the facts underlying 
the covered action submitted previously by another whistle-
blower;
H. R. 4173—367 
‘‘(D) to any whistleblower who fails to submit informa-
tion to the Commission in such form as the Commission 
may, by rule or regulation, require. 
‘‘(d) REPRESENTATION.— 
‘‘(1) PERMITTED REPRESENTATION.—Any whistleblower who 
makes a claim for an award under subsection (b) may be 
represented by counsel. 
‘‘(2) REQUIRED REPRESENTATION.— 
‘‘(A) IN
GENERAL.—Any whistleblower who anony-
mously makes a claim for an award under subsection (b) 
shall be represented by counsel if the whistleblower sub-
mits the information upon which the claim is based. 
‘‘(B) DISCLOSURE OF IDENTITY.—Prior to the payment 
of an award, a whistleblower shall disclose the identity 
of the whistleblower and provide such other information 
as the Commission may require, directly or through counsel 
for the whistleblower. 
‘‘(e) NO CONTRACT NECESSARY.—No contract with the Commis-
sion is necessary for any whistleblower to receive an award under 
subsection (b), unless otherwise required by the Commission, by 
rule or regulation. 
‘‘(f) APPEALS.— 
‘‘(1) IN GENERAL.—Any determination made under this sec-
tion, including whether, to whom, or in what amount to make 
awards, shall be in the discretion of the Commission. 
‘‘(2) APPEALS.—Any determination described in paragraph 
(1) may be appealed to the appropriate court of appeals of 
the United States not more than 30 days after the determina-
tion is issued by the Commission. 
‘‘(3) REVIEW.—The court shall review the determination 
made by the Commission in accordance with section 7064 of 
title 5, United States Code. 
‘‘(g) COMMODITY FUTURES TRADING COMMISSION CUSTOMER 
PROTECTION FUND.— 
‘‘(1) ESTABLISHMENT.—There is established in the Treasury 
of the United States a revolving fund to be known as the 
‘Commodity Futures Trading Commission Customer Protection 
Fund’. 
‘‘(2) USE OF FUND.—The Fund shall be available to the 
Commission, without further appropriation or fiscal year limita-
tion, for— 
‘‘(A) the payment of awards to whistleblowers as pro-
vided in subsection (a); and 
‘‘(B) the funding of customer education initiatives 
designed to help customers protect themselves against 
fraud or other violations of this Act, or the rules and 
regulations thereunder. 
‘‘(3) DEPOSITS AND CREDITS.—There shall be deposited into 
or credited to the Fund: 
‘‘(A) MONETARY SANCTIONS.—Any monetary sanctions 
collected by the Commission in any covered judicial or 
administrative action that is not otherwise distributed to 
victims of a violation of this Act or the rules and regulations 
thereunder underlying such action, unless the balance of 
the Fund at the time the monetary judgment is collected 
exceeds $100,000,000.
H. R. 4173—368 
‘‘(B) ADDITIONAL AMOUNTS.—If the amounts deposited 
into or credited to the Fund under subparagraph (A) are 
not sufficient to satisfy an award made under subsection 
(b), there shall be deposited into or credited to the Fund 
an amount equal to the unsatisfied portion of the award 
from any monetary sanction collected by the Commission 
in any judicial or administrative action brought by the 
Commission under this Act that is based on information 
provided by a whistleblower. 
‘‘(C) INVESTMENT
INCOME.—All income from invest-
ments made under paragraph (4). 
‘‘(4) INVESTMENTS.— 
‘‘(A) AMOUNTS
IN
FUND
MAY
BE
INVESTED.—The 
Commission may request the Secretary of the Treasury 
to invest the portion of the Fund that is not, in the Commis-
sion’s judgment, required to meet the current needs of 
the Fund. 
‘‘(B) ELIGIBLE
INVESTMENTS.—Investments shall be 
made by the Secretary of the Treasury in obligations of 
the United States or obligations that are guaranteed as 
to principal and interest by the United States, with matu-
rities suitable to the needs of the Fund as determined 
by the Commission. 
‘‘(C) INTEREST AND PROCEEDS CREDITED.—The interest 
on, and the proceeds from the sale or redemption of, any 
obligations held in the Fund shall be credited to, and 
form a part of, the Fund. 
‘‘(5) REPORTS TO CONGRESS.—Not later than October 30 
of each year, the Commission shall transmit to the Committee 
on Agriculture, Nutrition, and Forestry of the Senate, and 
the Committee on Agriculture of the House of Representatives 
a report on— 
‘‘(A) the Commission’s whistleblower award program 
under this section, including a description of the number 
of awards granted and the types of cases in which awards 
were granted during the preceding fiscal year; 
‘‘(B) customer education initiatives described in para-
graph (2)(B) that were funded by the Fund during the 
preceding fiscal year; 
‘‘(C) the balance of the Fund at the beginning of the 
preceding fiscal year; 
‘‘(D) the amounts deposited into or credited to the 
Fund during the preceding fiscal year; 
‘‘(E) the amount of earnings on investments of amounts 
in the Fund during the preceding fiscal year; 
‘‘(F) the amount paid from the Fund during the pre-
ceding fiscal year to whistleblowers pursuant to subsection 
(b); 
‘‘(G) the amount paid from the Fund during the pre-
ceding fiscal year for customer education initiatives 
described in paragraph (2)(B); 
‘‘(H) the balance of the Fund at the end of the preceding 
fiscal year; and 
‘‘(I) a complete set of audited financial statements, 
including a balance sheet, income statement, and cash 
flow analysis. 
‘‘(h) PROTECTION OF WHISTLEBLOWERS.—
H. R. 4173—369 
‘‘(1) PROHIBITION AGAINST RETALIATION.— 
‘‘(A) IN
GENERAL.—No employer may discharge, 
demote, suspend, threaten, harass, directly or indirectly, 
or in any other manner discriminate against, a whistle-
blower in the terms and conditions of employment because 
of any lawful act done by the whistleblower— 
‘‘(i) in providing information to the Commission 
in accordance with subsection (b); or 
‘‘(ii) in assisting in any investigation or judicial 
or administrative action of the Commission based upon 
or related to such information. 
‘‘(B) ENFORCEMENT.— 
‘‘(i) CAUSE OF ACTION.—An individual who alleges 
discharge or other discrimination in violation of 
subparagraph (A) may bring an action under this sub-
section in the appropriate district court of the United 
States for the relief provided in subparagraph (C), 
unless the individual who is alleging discharge or other 
discrimination in violation of subparagraph (A) is an 
employee of the Federal Government, in which case 
the individual shall only bring an action under section 
1221 of title 5, United States Code. 
‘‘(ii) 
SUBPOENAS.—A 
subpoena 
requiring 
the 
attendance of a witness at a trial or hearing conducted 
under this subsection may be served at any place in 
the United States. 
‘‘(iii) STATUTE OF LIMITATIONS.—An action under 
this subsection may not be brought more than 2 years 
after the date on which the violation reported in 
subparagraph (A) is committed. 
‘‘(C) RELIEF.—Relief for an individual prevailing in an 
action brought under subparagraph (B) shall include— 
‘‘(i) reinstatement with the same seniority status 
that the individual would have had, but for the 
discrimination; 
‘‘(ii) the amount of back pay otherwise owed to 
the individual, with interest; and 
‘‘(iii) compensation for any special damages sus-
tained as a result of the discharge or discrimination, 
including litigation costs, expert witness fees, and 
reasonable attorney’s fees. 
‘‘(2) CONFIDENTIALITY.— 
‘‘(A) IN
GENERAL.—Except as provided in subpara-
graphs (B) and (C), the Commission, and any officer or 
employee of the Commission, shall not disclose any informa-
tion, including information provided by a whistleblower 
to the Commission, which could reasonably be expected 
to reveal the identity of a whistleblower, except in accord-
ance with the provisions of section 552a of title 5, United 
States Code, unless and until required to be disclosed to 
a defendant or respondent in connection with a public 
proceeding instituted by the Commission or any entity 
described in subparagraph (C). For purposes of section 
552 of title 5, United States Code, this paragraph shall 
be considered a statute described in subsection (b)(3)(B) 
of such section 552.
H. R. 4173—370 
‘‘(B) EFFECT.—Nothing in this paragraph is intended 
to limit the ability of the Attorney General to present 
such evidence to a grand jury or to share such evidence 
with potential witnesses or defendants in the course of 
an ongoing criminal investigation. 
‘‘(C) AVAILABILITY TO GOVERNMENT AGENCIES.— 
‘‘(i) IN GENERAL.—Without the loss of its status 
as confidential in the hands of the Commission, all 
information referred to in subparagraph (A) may, in 
the discretion of the Commission, when determined 
by the Commission to be necessary or appropriate to 
accomplish the purposes of this Act and protect cus-
tomers and in accordance with clause (ii), be made 
available to— 
‘‘(I) the Department of Justice; 
‘‘(II) an appropriate department or agency of 
the Federal Government, acting within the scope 
of its jurisdiction; 
‘‘(III) a registered entity, registered futures 
association, or self-regulatory organization as 
defined in section 3(a) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78c(a)); 
‘‘(IV) a State attorney general in connection 
with any criminal investigation; 
‘‘(V) an appropriate department or agency of 
any State, acting within the scope of its jurisdic-
tion; and 
‘‘(VI) a foreign futures authority. 
‘‘(ii) MAINTENANCE OF INFORMATION.—Each of the 
entities, agencies, or persons described in clause (i) 
shall maintain information described in that clause 
as confidential, in accordance with the requirements 
in subparagraph (A). 
‘‘(iii) STUDY
ON
IMPACT
OF
FOIA
EXEMPTION
ON 
COMMODITY FUTURES TRADING COMMISSION.— 
‘‘(I) STUDY.—The Inspector General of the 
Commission shall conduct a study— 
‘‘(aa) on whether the exemption under sec-
tion 552(b)(3) of title 5, United States Code 
(known as the Freedom of Information Act) 
established in paragraph (2)(A) aids whistle-
blowers in disclosing information to the 
Commission; 
‘‘(bb) on what impact the exemption has 
had on the public’s ability to access informa-
tion about the Commission’s regulation of com-
modity futures and option markets; and 
‘‘(cc) to make any recommendations on 
whether the Commission should continue to 
use the exemption. 
‘‘(II) REPORT.—Not later than 30 months after 
the date of enactment of this clause, the Inspector 
General shall— 
‘‘(aa) submit a report on the findings of 
the study required under this clause to the 
Committee on Banking, Housing, and Urban 
Affairs of the Senate and the Committee on
H. R. 4173—371 
Financial Services of the House of Representa-
tives; and 
‘‘(bb) make the report available to the 
public through publication of a report on the 
website of the Commission. 
‘‘(3) RIGHTS RETAINED.—Nothing in this section shall be 
deemed to diminish the rights, privileges, or remedies of any 
whistleblower under any Federal or State law, or under any 
collective bargaining agreement. 
‘‘(i) RULEMAKING AUTHORITY.—The Commission shall have the 
authority to issue such rules and regulations as may be necessary 
or appropriate to implement the provisions of this section consistent 
with the purposes of this section. 
‘‘(j) IMPLEMENTING RULES.—The Commission shall issue final 
rules or regulations implementing the provisions of this section 
not later than 270 days after the date of enactment of the Wall 
Street Transparency and Accountability Act of 2010. 
‘‘(k) ORIGINAL INFORMATION.—Information submitted to the 
Commission by a whistleblower in accordance with rules or regula-
tions implementing this section shall not lose its status as original 
information solely because the whistleblower submitted such 
information prior to the effective date of such rules or regulations, 
provided such information was submitted after the date of enact-
ment of the Wall Street Transparency and Accountability Act of 
2010. 
‘‘(l) AWARDS.—A whistleblower may receive an award pursuant 
to this section regardless of whether any violation of a provision 
of this Act, or a rule or regulation thereunder, underlying the 
judicial or administrative action upon which the award is based 
occurred prior to the date of enactment of the Wall Street Trans-
parency and Accountability Act of 2010. 
‘‘(m) PROVISION OF FALSE INFORMATION.—A whistleblower who 
knowingly and willfully makes any false, fictitious, or fraudulent 
statement or representation, or who makes or uses any false writing 
or document knowing the same to contain any false, fictitious, 
or fraudulent statement or entry, shall not be entitled to an award 
under this section and shall be subject to prosecution under section 
1001 of title 18, United States Code. 
‘‘(n) NONENFORCEABILITY
OF CERTAIN PROVISIONS WAIVING 
RIGHTS AND REMEDIES OR REQUIRING ARBITRATION OF DISPUTES.— 
‘‘(1) WAIVER OF RIGHTS AND REMEDIES.—The rights and 
remedies provided for in this section may not be waived by 
any agreement, policy form, or condition of employment 
including by a predispute arbitration agreement. 
‘‘(2) PREDISPUTE ARBITRATION AGREEMENTS.—No predispute 
arbitration agreement shall be valid or enforceable, if the agree-
ment requires arbitration of a dispute arising under this sec-
tion.’’. 
SEC. 749. CONFORMING AMENDMENTS. 
(a) Section 4d of the Commodity Exchange Act (7 U.S.C. 6d) 
(as amended by section 724) is amended— 
(1) in subsection (a)— 
(A) in the matter preceding paragraph (1)— 
(i) by striking ‘‘engage as’’ and inserting ‘‘be a’’; 
and
H. R. 4173—372 
(ii) by striking ‘‘or introducing broker’’ and all that 
follows through ‘‘or derivatives transaction execution 
facility’’; 
(B) in paragraph (1), by striking ‘‘or introducing 
broker’’; and 
(C) in paragraph (2), by striking ‘‘if a futures commis-
sion merchant,’’; and 
(2) by adding at the end the following: 
‘‘(g) It shall be unlawful for any person to be an introducing 
broker unless such person shall have registered under this Act 
with the Commission as an introducing broker and such registration 
shall not have expired nor been suspended nor revoked.’’. 
(b) Section 4m(3) of the Commodity Exchange Act (7 U.S.C. 
6m(3)) is amended— 
(1) by striking ‘‘(3) Subsection (1) of this section’’ and 
inserting the following: 
‘‘(3) EXCEPTION.— 
‘‘(A) IN GENERAL.—Paragraph (1)’’; and 
(2) by striking ‘‘to any investment trust’’ and all that follows 
through the period at the end and inserting the following: 
‘‘to any commodity pool that is engaged primarily in trading 
commodity interests. 
‘‘(B) ENGAGED PRIMARILY.—For purposes of subparagraph 
(A), a commodity trading advisor or a commodity pool shall 
be considered to be ‘engaged primarily’ in the business of being 
a commodity trading advisor or commodity pool if it is or 
holds itself out to the public as being engaged primarily, or 
proposes to engage primarily, in the business of advising on 
commodity interests or investing, reinvesting, owning, holding, 
or trading in commodity interests, respectively. 
‘‘(C) COMMODITY INTERESTS.—For purposes of this para-
graph, commodity interests shall include contracts of sale of 
a commodity for future delivery, options on such contracts, 
security futures, swaps, leverage contracts, foreign exchange, 
spot and forward contracts on physical commodities, and any 
monies held in an account used for trading commodity 
interests.’’. 
(c) Section 5c of the Commodity Exchange Act (7 U.S.C. 7a– 
2) is amended— 
(1) in subsection (a)(1)— 
(A) by striking ‘‘, 5a(d),’’; and 
(B) by striking ‘‘and section (2)(h)(7) with respect to 
significant price discovery contracts,’’; and 
(2) in subsection (f)(1), by striking ‘‘section 4d(c) of this 
Act’’ and inserting ‘‘section 4d(e)’’. 
(d) Section 5e of the Commodity Exchange Act (7 U.S.C. 7b) 
is amended by striking ‘‘or revocation of the right of an electronic 
trading facility to rely on the exemption set forth in section 2(h)(3) 
with respect to a significant price discovery contract,’’. 
(e) Section 6(b) of the Commodity Exchange Act (7 U.S.C. 
8(b)) is amended in the first sentence by striking ‘‘, or to revoke 
the right of an electronic trading facility to rely on the exemption 
set forth in section 2(h)(3) with respect to a significant price dis-
covery contract,’’. 
(f) Section 12(e)(2)(B) of the Commodity Exchange Act (7 U.S.C. 
16(e)(2)(B)) is amended—
H. R. 4173—373 
(1) by striking ‘‘section 2(c), 2(d), 2(f), or 2(g) of this Act’’ 
and inserting ‘‘section 2(c) or 2(f) of this Act’’; and 
(2) by striking ‘‘2(h) or’’. 
(g) Section 17(r)(1) of the Commodity Exchange Act (7 U.S.C. 
21(r)(1)) is amended by striking ‘‘section 4d(c) of this Act’’ and 
inserting ‘‘section 4d(e)’’. 
(h) Section 22 of the Commodity Exchange Act is amended— 
(1) in subsection (a)(1)(B), by— 
(A) inserting ‘‘or any swap’’ after ‘‘commodity)’’; and 
(B) inserting ‘‘or any swap’’ after ‘‘such contract’’; 
(2) in subsection (a)(1)(C), by adding at the end the fol-
lowing: 
‘‘(iv) a swap; or’’; and 
(3) in subsection (b)(1)(A), by striking ‘‘section 2(h)(7) or 
sections 5 through 5c’’ and inserting ‘‘section 5, 5b, 5c, 5h, 
or 21’’. 
(i) Section 408(2)(C) of the Federal Deposit Insurance Corpora-
tion Improvement Act of 1991 (12 U.S.C. 4421(2)(C)) is amended— 
(1) by striking ‘‘section 2(c), 2(d), 2(f), or (2)(g) of such 
Act’’ and inserting ‘‘section 2(c), 2(f), or 2(i) of that Act’’; and 
(2) by striking ‘‘2(h) or’’. 
SEC. 750. STUDY ON OVERSIGHT OF CARBON MARKETS. 
(a) INTERAGENCY WORKING GROUP.—There is established to 
carry out this section an interagency working group (referred to 
in this section as the ‘‘interagency group’’) composed of the following 
members or designees: 
(1) The Chairman of the Commodity Futures Trading 
Commission (referred to in this section as the ‘‘Commission’’), 
who shall serve as Chairman of the interagency group. 
(2) The Secretary of Agriculture. 
(3) The Secretary of the Treasury. 
(4) The Chairman of the Securities and Exchange Commis-
sion. 
(5) The Administrator of the Environmental Protection 
Agency. 
(6) The Chairman of the Federal Energy Regulatory 
Commission. 
(7) The Commissioner of the Federal Trade Commission. 
(8) The Administrator of the Energy Information Adminis-
tration. 
(b) ADMINISTRATIVE SUPPORT.—The Commission shall provide 
the interagency group such administrative support services as are 
necessary to enable the interagency group to carry out the functions 
of the interagency group under this section. 
(c) CONSULTATION.—In carrying out this section, the inter-
agency group shall consult with representatives of exchanges, 
clearinghouses, self-regulatory bodies, major carbon market partici-
pants, consumers, and the general public, as the interagency group 
determines to be appropriate. 
(d) STUDY.—The interagency group shall conduct a study on 
the oversight of existing and prospective carbon markets to ensure 
an efficient, secure, and transparent carbon market, including over-
sight of spot markets and derivative markets. 
(e) REPORT.—Not later than 180 days after the date of enact-
ment of this Act, the interagency group shall submit to Congress 
a report on the results of the study conducted under subsection
H. R. 4173—374 
(b), including recommendations for the oversight of existing and 
prospective carbon markets to ensure an efficient, secure, and trans-
parent carbon market, including oversight of spot markets and 
derivative markets. 
SEC. 751. ENERGY AND ENVIRONMENTAL MARKETS ADVISORY COM-
MITTEE. 
Section 2(a) of the Commodity Exchange Act (7 U.S.C. 2(a)) 
(as amended by section 727) is amended by adding at the end 
the following: 
‘‘(15) ENERGY
AND
ENVIRONMENTAL
MARKETS
ADVISORY 
COMMITTEE.— 
‘‘(A) ESTABLISHMENT.— 
‘‘(i) IN GENERAL.—An Energy and Environmental 
Markets Advisory Committee is hereby established. 
‘‘(ii) MEMBERSHIP.—The Committee shall have 9 
members. 
‘‘(iii) ACTIVITIES.—The Committee’s objectives and 
scope of activities shall be— 
‘‘(I) to conduct public meetings; 
‘‘(II) to submit reports and recommendations 
to the Commission (including dissenting or 
minority views, if any); and 
‘‘(III) otherwise to serve as a vehicle for discus-
sion and communication on matters of concern to 
exchanges, firms, end users, and regulators 
regarding energy and environmental markets and 
their regulation by the Commission. 
‘‘(B) REQUIREMENTS.— 
‘‘(i) IN GENERAL.—The Committee shall hold public 
meetings at such intervals as are necessary to carry 
out the functions of the Committee, but not less fre-
quently than 2 times per year. 
‘‘(ii) MEMBERS.—Members shall be appointed to 
3-year terms, but may be removed for cause by vote 
of the Commission. 
‘‘(C) APPOINTMENT.—The Commission shall appoint 
members with a wide diversity of opinion and who rep-
resent a broad spectrum of interests, including hedgers 
and consumers. 
‘‘(D) REIMBURSEMENT.—Members shall be entitled to 
per diem and travel expense reimbursement by the 
Commission. 
‘‘(E) FACA.—The Committee shall not be subject to 
the Federal Advisory Committee Act (5 U.S.C. App.).’’. 
SEC. 752. INTERNATIONAL HARMONIZATION. 
(a) In order to promote effective and consistent global regulation 
of swaps and security-based swaps, the Commodity Futures Trading 
Commission, the Securities and Exchange Commission, and the 
prudential regulators (as that term is defined in section 1a(39) 
of the Commodity Exchange Act), as appropriate, shall consult 
and coordinate with foreign regulatory authorities on the establish-
ment of consistent international standards with respect to the regu-
lation (including fees) of swaps, security-based swaps, swap entities, 
and security-based swap entities and may agree to such informa-
tion-sharing arrangements as may be deemed to be necessary or
H. R. 4173—375 
appropriate in the public interest or for the protection of investors, 
swap counterparties, and security-based swap counterparties. 
(b) In order to promote effective and consistent global regulation 
of contracts of sale of a commodity for future delivery and options 
on such contracts, the Commodity Futures Trading Commission 
shall consult and coordinate with foreign regulatory authorities 
on the establishment of consistent international standards with 
respect to the regulation of contracts of sale of a commodity for 
future delivery and options on such contracts, and may agree to 
such information-sharing arrangements as may be deemed nec-
essary or appropriate in the public interest for the protection of 
users of contracts of sale of a commodity for future delivery. 
SEC. 753. ANTI-MANIPULATION AUTHORITY. 
(a) 
PROHIBITION
REGARDING
MANIPULATION
AND
FALSE 
INFORMATION.—Subsection (c) of section 6 of the Commodity 
Exchange Act (7 U.S.C. 9, 15) is amended to read as follows: 
‘‘(c) 
PROHIBITION
REGARDING
MANIPULATION
AND
FALSE 
INFORMATION.— 
‘‘(1) PROHIBITION
AGAINST
MANIPULATION.—It shall be 
unlawful for any person, directly or indirectly, to use or employ, 
or attempt to use or employ, in connection with any swap, 
or a contract of sale of any commodity in interstate commerce, 
or for future delivery on or subject to the rules of any registered 
entity, any manipulative or deceptive device or contrivance, 
in contravention of such rules and regulations as the Commis-
sion shall promulgate by not later than 1 year after the date 
of enactment of the Dodd-Frank Wall Street Reform and Con-
sumer Protection Act, provided no rule or regulation promul-
gated by the Commission shall require any person to disclose 
to another person nonpublic information that may be material 
to the market price, rate, or level of the commodity transaction, 
except as necessary to make any statement made to the other 
person in or in connection with the transaction not misleading 
in any material respect. 
‘‘(A) SPECIAL PROVISION FOR MANIPULATION BY FALSE 
REPORTING.—Unlawful manipulation for purposes of this 
paragraph shall include, but not be limited to, delivering, 
or causing to be delivered for transmission through the 
mails or interstate commerce, by any means of communica-
tion whatsoever, a false or misleading or inaccurate report 
concerning crop or market information or conditions that 
affect or tend to affect the price of any commodity in 
interstate commerce, knowing, or acting in reckless dis-
regard of the fact that such report is false, misleading 
or inaccurate. 
‘‘(B) EFFECT ON OTHER LAW.—Nothing in this para-
graph shall affect, or be construed to affect, the applicability 
of section 9(a)(2). 
‘‘(C) GOOD FAITH MISTAKES.—Mistakenly transmitting, 
in good faith, false or misleading or inaccurate information 
to a price reporting service would not be sufficient to violate 
subsection (c)(1)(A). 
‘‘(2) PROHIBITION REGARDING FALSE INFORMATION.—It shall 
be unlawful for any person to make any false or misleading 
statement of a material fact to the Commission, including in 
any registration application or any report filed with the
H. R. 4173—376 
Commission under this Act, or any other information relating 
to a swap, or a contract of sale of a commodity, in interstate 
commerce, or for future delivery on or subject to the rules 
of any registered entity, or to omit to state in any such state-
ment any material fact that is necessary to make any statement 
of a material fact made not misleading in any material respect, 
if the person knew, or reasonably should have known, the 
statement to be false or misleading. 
‘‘(3) OTHER MANIPULATION.—In addition to the prohibition 
in paragraph (1), it shall be unlawful for any person, directly 
or indirectly, to manipulate or attempt to manipulate the price 
of any swap, or of any commodity in interstate commerce, 
or for future delivery on or subject to the rules of any registered 
entity. 
‘‘(4) ENFORCEMENT.— 
‘‘(A) AUTHORITY OF COMMISSION.—If the Commission 
has reason to believe that any person (other than a reg-
istered entity) is violating or has violated this subsection, 
or any other provision of this Act (including any rule, 
regulation, or order of the Commission promulgated in 
accordance with this subsection or any other provision of 
this Act), the Commission may serve upon the person a 
complaint. 
‘‘(B) CONTENTS
OF
COMPLAINT.—A complaint under 
subparagraph (A) shall— 
‘‘(i) contain a description of the charges against 
the person that is the subject of the complaint; and 
‘‘(ii) have attached or contain a notice of hearing 
that specifies the date and location of the hearing 
regarding the complaint. 
‘‘(C) HEARING.—A hearing described in subparagraph 
(B)(ii)— 
‘‘(i) shall be held not later than 3 days after service 
of the complaint described in subparagraph (A); 
‘‘(ii) shall require the person to show cause 
regarding why— 
‘‘(I) an order should not be made— 
‘‘(aa) to prohibit the person from trading 
on, or subject to the rules of, any registered 
entity; and 
‘‘(bb) to direct all registered entities to 
refuse all privileges to the person until further 
notice of the Commission; and 
‘‘(II) the registration of the person, if registered 
with the Commission in any capacity, should not 
be suspended or revoked; and 
‘‘(iii) may be held before— 
‘‘(I) the Commission; or 
‘‘(II) an administrative law judge designated 
by the Commission, under which the administra-
tive law judge shall ensure that all evidence is 
recorded in written form and submitted to the 
Commission. 
‘‘(5) SUBPOENA.—For the purpose of securing effective 
enforcement of the provisions of this Act, for the purpose of 
any investigation or proceeding under this Act, and for the 
purpose of any action taken under section 12(f), any member
H. R. 4173—377 
of the Commission or any Administrative Law Judge or other 
officer designated by the Commission (except as provided in 
paragraph (7)) may administer oaths and affirmations, sub-
poena witnesses, compel their attendance, take evidence, and 
require the production of any books, papers, correspondence, 
memoranda, or other records that the Commission deems rel-
evant or material to the inquiry. 
‘‘(6) WITNESSES.—The attendance of witnesses and the 
production of any such records may be required from any place 
in the United States, any State, or any foreign country or 
jurisdiction at any designated place of hearing. 
‘‘(7) SERVICE.—A subpoena issued under this section may 
be served upon any person who is not to be found within 
the territorial jurisdiction of any court of the United States 
in such manner as the Federal Rules of Civil Procedure pre-
scribe for service of process in a foreign country, except that 
a subpoena to be served on a person who is not to be found 
within the territorial jurisdiction of any court of the United 
States may be issued only on the prior approval of the Commis-
sion. 
‘‘(8) REFUSAL TO OBEY.—In case of contumacy by, or refusal 
to obey a subpoena issued to, any person, the Commission 
may invoke the aid of any court of the United States within 
the jurisdiction in which the investigation or proceeding is 
conducted, or where such person resides or transacts business, 
in requiring the attendance and testimony of witnesses and 
the production of books, papers, correspondence, memoranda, 
and other records. Such court may issue an order requiring 
such person to appear before the Commission or member or 
Administrative Law Judge or other officer designated by the 
Commission, there to produce records, if so ordered, or to give 
testimony touching the matter under investigation or in ques-
tion. 
‘‘(9) FAILURE TO OBEY.—Any failure to obey such order 
of the court may be punished by the court as a contempt 
thereof. All process in any such case may be served in the 
judicial district wherein such person is an inhabitant or trans-
acts business or wherever such person may be found. 
‘‘(10) EVIDENCE.—On the receipt of evidence under para-
graph (4)(C)(iii), the Commission may— 
‘‘(A) prohibit the person that is the subject of the 
hearing from trading on, or subject to the rules of, any 
registered entity and require all registered entities to refuse 
the person all privileges on the registered entities for such 
period as the Commission may require in the order; 
‘‘(B) if the person is registered with the Commission 
in any capacity, suspend, for a period not to exceed 180 
days, or revoke, the registration of the person; 
‘‘(C) assess such person— 
‘‘(i) a civil penalty of not more than an amount 
equal to the greater of— 
‘‘(I) $140,000; or 
‘‘(II) triple the monetary gain to such person 
for each such violation; or 
‘‘(ii) in any case of manipulation or attempted 
manipulation in violation of this subsection or section
H. R. 4173—378 
9(a)(2), a civil penalty of not more than an amount 
equal to the greater of— 
‘‘(I) $1,000,000; or 
‘‘(II) triple the monetary gain to the person 
for each such violation; and 
‘‘(D) require restitution to customers of damages proxi-
mately caused by violations of the person. 
‘‘(11) ORDERS.— 
‘‘(A) NOTICE.—The Commission shall provide to a per-
son described in paragraph (10) and the appropriate gov-
erning board of the registered entity notice of the order 
described in paragraph (10) by— 
‘‘(i) registered mail; 
‘‘(ii) certified mail; or 
‘‘(iii) personal delivery. 
‘‘(B) REVIEW.— 
‘‘(i) IN GENERAL.—A person described in paragraph 
(10) may obtain a review of the order or such other 
equitable relief as determined to be appropriate by 
a court described in clause (ii). 
‘‘(ii) PETITION.—To obtain a review or other relief 
under clause (i), a person may, not later than 15 days 
after notice is given to the person under clause (i), 
file a written petition to set aside the order with the 
United States Court of Appeals— 
‘‘(I) for the circuit in which the petitioner car-
ries out the business of the petitioner; or 
‘‘(II) in the case of an order denying registra-
tion, the circuit in which the principal place of 
business of the petitioner is located, as listed on 
the application for registration of the petitioner. 
‘‘(C) PROCEDURE.— 
‘‘(i) DUTY OF CLERK OF APPROPRIATE COURT.—The 
clerk of the appropriate court under subparagraph 
(B)(ii) shall transmit to the Commission a copy of a 
petition filed under subparagraph (B)(ii). 
‘‘(ii) DUTY
OF
COMMISSION.—In accordance with 
section 2112 of title 28, United States Code, the 
Commission shall file in the appropriate court 
described in subparagraph (B)(ii) the record theretofore 
made. 
‘‘(iii) JURISDICTION OF APPROPRIATE COURT.—Upon 
the filing of a petition under subparagraph (B)(ii), the 
appropriate court described in subparagraph (B)(ii) 
may affirm, set aside, or modify the order of the 
Commission.’’. 
(b) CEASE
AND DESIST ORDERS, FINES.—Section 6(d) of the 
Commodity Exchange Act (7 U.S.C. 13b) is amended to read as 
follows: 
‘‘(d) If any person (other than a registered entity), is violating 
or has violated subsection (c) or any other provisions of this Act 
or of the rules, regulations, or orders of the Commission thereunder, 
the Commission may, upon notice and hearing, and subject to 
appeal as in other cases provided for in subsection (c), make and 
enter an order directing that such person shall cease and desist 
therefrom and, if such person thereafter and after the lapse of 
the period allowed for appeal of such order or after the affirmance
H. R. 4173—379 
of such order, shall knowingly fail or refuse to obey or comply 
with such order, such person, upon conviction thereof, shall be 
fined not more than the higher of $140,000 or triple the monetary 
gain to such person, or imprisoned for not more than 1 year, 
or both, except that if such knowing failure or refusal to obey 
or comply with such order involves any offense within subsection 
(a) or (b) of section 9, such person, upon conviction thereof, shall 
be subject to the penalties of said subsection (a) or (b): Provided, 
That any such cease and desist order under this subsection against 
any respondent in any case of manipulation shall be issued only 
in conjunction with an order issued against such respondent under 
subsection (c).’’. 
(c) MANIPULATIONS; PRIVATE
RIGHTS
OF
ACTION.—Section 
22(a)(1) of the Commodity Exchange Act (7 U.S.C. 25(a)(1)) is 
amended by striking subparagraph (D) and inserting the following: 
‘‘(D) who purchased or sold a contract referred to in 
subparagraph (B) hereof or swap if the violation constitutes— 
‘‘(i) the use or employment of, or an attempt to use 
or employ, in connection with a swap, or a contract of 
sale of a commodity, in interstate commerce, or for future 
delivery on or subject to the rules of any registered entity, 
any manipulative device or contrivance in contravention 
of such rules and regulations as the Commission shall 
promulgate by not later than 1 year after the date of 
enactment of the Dodd-Frank Wall Street Reform and Con-
sumer Protection Act; or 
‘‘(ii) a manipulation of the price of any such contract 
or swap or the price of the commodity underlying such 
contract or swap.’’. 
(d) EFFECTIVE DATE.— 
(1) The amendments made by this section shall take effect 
on the date on which the final rule promulgated by the Com-
modity Futures Trading Commission pursuant to this Act takes 
effect. 
(2) Paragraph (1) shall not preclude the Commission from 
undertaking prior to the effective date any rulemaking nec-
essary to implement the amendments contained in this section. 
SEC. 754. EFFECTIVE DATE. 
Unless otherwise provided in this title, the provisions of this 
subtitle shall take effect on the later of 360 days after the date 
of the enactment of this subtitle or, to the extent a provision 
of this subtitle requires a rulemaking, not less than 60 days after 
publication of the final rule or regulation implementing such provi-
sion of this subtitle. 
Subtitle B—Regulation of Security-Based 
Swap Markets 
SEC. 761. DEFINITIONS UNDER THE SECURITIES EXCHANGE ACT OF 
1934. 
(a) DEFINITIONS.—Section 3(a) of the Securities Exchange Act 
of 1934 (15 U.S.C. 78c(a)) is amended—
H. R. 4173—380 
(1) in subparagraphs (A) and (B) of paragraph (5), by 
inserting ‘‘(not including security-based swaps, other than secu-
rity-based swaps with or for persons that are not eligible con-
tract participants)’’ after ‘‘securities’’ each place that term 
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 include the execution, 
termination (prior to its scheduled maturity date), assignment, 
exchange, or similar transfer or conveyance of, or extinguishing 
of 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 include the execution, 
termination (prior to its scheduled maturity date), assignment, 
exchange, or similar 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) in subparagraph (B)(i)— 
(i) in subclause (I), by striking ‘‘or government 
securities dealer’’ and inserting ‘‘government securities 
dealer, security-based swap dealer, or major security- 
based swap participant’’; and 
(ii) in subclause (II), by inserting ‘‘security-based 
swap dealer, major security-based swap participant,’’ 
after ‘‘government securities dealer,’’; 
(B) in subparagraph (C), by striking ‘‘or government 
securities dealer’’ and inserting ‘‘government securities 
dealer, security-based swap dealer, or major security-based 
swap participant’’; and 
(C) in subparagraph (D), by inserting ‘‘security-based 
swap dealer, major security-based swap participant,’’ after 
‘‘government securities dealer,’’; 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 
of the Commodity Exchange Act (7 U.S.C. 1a). 
‘‘(66) MAJOR
SWAP
PARTICIPANT.—The term ‘major swap 
participant’ has the same meaning as in section 1a of the 
Commodity Exchange Act (7 U.S.C. 1a). 
‘‘(67) MAJOR SECURITY-BASED SWAP PARTICIPANT.— 
‘‘(A) IN
GENERAL.—The term ‘major security-based 
swap participant’ means any person— 
‘‘(i) who is not a security-based swap dealer; and 
‘‘(ii)(I) who maintains a substantial position in 
security-based swaps for any of the major security- 
based swap categories, as such categories are deter-
mined by the Commission, excluding both positions 
held for hedging or mitigating commercial risk and 
positions maintained by any employee benefit plan (or 
any contract held by such a plan) as defined in para-
graphs (3) and (32) of section 3 of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C. 1002) 
for the primary purpose of hedging or mitigating any 
risk directly associated with the operation of the plan;
H. R. 4173—381 
‘‘(II) whose outstanding security-based swaps 
create substantial counterparty exposure that could 
have serious adverse effects on the financial stability 
of the United States banking system or financial mar-
kets; or 
‘‘(III) that is a financial entity that— 
‘‘(aa) is highly leveraged relative to the amount 
of capital such entity holds and that is not subject 
to capital requirements established by an appro-
priate Federal banking agency; and 
‘‘(bb) maintains a substantial position in out-
standing security-based swaps in any major secu-
rity-based swap category, as such categories are 
determined by the Commission. 
‘‘(B) DEFINITION OF SUBSTANTIAL POSITION.—For pur-
poses of subparagraph (A), the Commission shall define, 
by rule or regulation, the term ‘substantial position’ at 
the threshold that the Commission determines to be pru-
dent for the effective monitoring, management, and over-
sight of entities that are systemically important or can 
significantly impact the financial system of the United 
States. In setting the definition under this subparagraph, 
the Commission shall consider the person’s relative position 
in uncleared as opposed to cleared security-based swaps 
and may take into consideration the value and quality 
of collateral held against counterparty exposures. 
‘‘(C) SCOPE OF DESIGNATION.—For purposes of subpara-
graph (A), a person may be designated as a major security- 
based swap participant for 1 or more categories 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.— 
‘‘(A) IN GENERAL.—Except as provided in subparagraph 
(B), the term ‘security-based swap’ means any agreement, 
contract, or transaction that— 
‘‘(i) is a swap, as that term is defined under section 
1a of the Commodity Exchange Act (without regard 
to paragraph (47)(B)(x) of such section); and 
‘‘(ii) is based on— 
‘‘(I) an index that is a narrow-based security 
index, including any interest therein or on the 
value thereof; 
‘‘(II) a single security or loan, including any 
interest therein or on the value thereof; or 
‘‘(III) the occurrence, nonoccurrence, or extent 
of the occurrence of an event relating to a single 
issuer of a security or the issuers of securities 
in a narrow-based security index, provided that 
such event directly affects the financial state-
ments, financial condition, or financial obligations 
of the issuer. 
‘‘(B) RULE
OF
CONSTRUCTION
REGARDING
MASTER 
AGREEMENTS.—The term ‘security-based swap’ shall be con-
strued to include a master agreement that provides for 
an agreement, contract, or transaction that is a security- 
based swap pursuant to subparagraph (A), together with
H. R. 4173—382 
all supplements to any such master agreement, without 
regard to whether the master agreement contains an agree-
ment, contract, 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 trans-
action under the master agreement that is a security- 
based swap pursuant to subparagraph (A). 
‘‘(C) EXCLUSIONS.—The term ‘security-based swap’ does 
not include any agreement, contract, or transaction that 
meets the definition of a security-based swap only because 
such agreement, contract, or transaction references, is 
based upon, or settles through the transfer, delivery, or 
receipt of an exempted security under paragraph (12), as 
in effect on the date of enactment of the Futures Trading 
Act of 1982 (other than any municipal security as defined 
in paragraph (29) as in effect on the date of enactment 
of the Futures Trading Act of 1982), unless such agreement, 
contract, or transaction is of the character of, or is com-
monly known in the trade as, a put, call, or other option. 
‘‘(D) MIXED
SWAP.—The term ‘security-based swap’ 
includes any agreement, contract, or transaction that is 
as described in subparagraph (A) and also is based on 
the value of 1 or more interest or other rates, currencies, 
commodities, instruments of indebtedness, indices, quan-
titative measures, other financial or economic interest or 
property of any kind (other than a single security or a 
narrow-based security index), or the occurrence, non-occur-
rence, or the extent of the occurrence of an event or contin-
gency associated with a potential financial, economic, or 
commercial consequence (other than an event described 
in subparagraph (A)(ii)(III)). 
‘‘(E) RULE OF CONSTRUCTION REGARDING USE OF THE 
TERM INDEX.—The term ‘index’ means an index or group 
of securities, including any interest therein or based on 
the value thereof. 
‘‘(69) SWAP.—The term ‘swap’ has the same meaning as 
in section 1a of the Commodity Exchange Act (7 U.S.C. 1a). 
‘‘(70) PERSON
ASSOCIATED
WITH
A
SECURITY-BASED
SWAP 
DEALER OR MAJOR SECURITY-BASED SWAP PARTICIPANT.— 
‘‘(A) IN GENERAL.—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— 
‘‘(i) any partner, officer, director, or branch man-
ager of such security-based swap dealer or major secu-
rity-based swap participant (or any person occupying 
a similar status or performing similar functions); 
‘‘(ii) any person directly or indirectly controlling, 
controlled by, or under common control with such secu-
rity-based swap dealer or major security-based swap 
participant; or 
‘‘(iii) any employee of such security-based swap 
dealer or major security-based swap participant. 
‘‘(B) EXCLUSION.—Other than for purposes of section 
15F(l)(2), the term ‘person associated with a security-based 
swap dealer or major security-based swap participant’ or
H. R. 4173—383 
‘associated person of a security-based swap dealer or major 
security-based swap participant’ does not include any per-
son associated with a security-based swap dealer or major 
security-based swap participant whose functions are solely 
clerical or ministerial. 
‘‘(71) SECURITY-BASED SWAP DEALER.— 
‘‘(A) IN
GENERAL.—The term ‘security-based swap 
dealer’ means any person who— 
‘‘(i) holds themself out as a dealer in security- 
based swaps; 
‘‘(ii) makes a market in security-based swaps; 
‘‘(iii) regularly enters into security-based swaps 
with counterparties as an ordinary course of business 
for its own account; or 
‘‘(iv) engages in any activity causing it to be com-
monly 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 as a security-based swap dealer for a single 
type or single class or category of security-based swap 
or activities and considered not to be a security-based swap 
dealer for other types, classes, or categories of security- 
based swaps or activities. 
‘‘(C) 
EXCEPTION.—The 
term 
‘security-based 
swap 
dealer’ does not include a person that enters into security- 
based swaps for such person’s own account, either individ-
ually or in a fiduciary capacity, but not as a part of regular 
business. 
‘‘(D) DE MINIMIS EXCEPTION.—The Commission shall 
exempt from designation as a security-based swap dealer 
an entity that engages in a de minimis quantity of security- 
based swap dealing in connection with transactions with 
or on behalf of its customers. The Commission shall promul-
gate regulations to establish factors with respect to the 
making of any determination to exempt. 
‘‘(72) APPROPRIATE FEDERAL BANKING AGENCY.—The term 
‘appropriate Federal banking agency’ has the same meaning 
as in section 3(q) of the Federal Deposit Insurance Act (12 
U.S.C. 1813(q)). 
‘‘(73) BOARD.—The term ‘Board’ means the Board of Gov-
ernors of the Federal Reserve System. 
‘‘(74) PRUDENTIAL REGULATOR.—The term ‘prudential regu-
lator’ has the same meaning as in section 1a of the Commodity 
Exchange Act (7 U.S.C. 1a). 
‘‘(75) SECURITY-BASED SWAP DATA REPOSITORY.—The term 
‘security-based swap data repository’ means any person that 
collects and maintains information or records with respect to 
transactions or positions in, or the terms and conditions of, 
security-based swaps entered into by third parties for the pur-
pose of providing a centralized recordkeeping facility for secu-
rity-based swaps. 
‘‘(76) SWAP DEALER.—The term ‘swap dealer’ has the same 
meaning as in section 1a of the Commodity Exchange Act 
(7 U.S.C. 1a). 
‘‘(77) SECURITY-BASED
SWAP
EXECUTION
FACILITY.—The 
term ‘security-based swap execution facility’ means a trading 
system or platform in which multiple participants have the
H. R. 4173—384 
ability to execute or trade security-based swaps by accepting 
bids and offers made by multiple participants in the facility 
or system, through any means of interstate commerce, including 
any trading facility, that— 
‘‘(A) facilitates the execution of security-based swaps 
between persons; and 
‘‘(B) is not a national securities exchange. 
‘‘(78) SECURITY-BASED SWAP AGREEMENT.— 
‘‘(A) IN GENERAL.—For purposes of sections 9, 10, 16, 
20, and 21A of this Act, and section 17 of the Securities 
Act of 1933 (15 U.S.C. 77q), the term ‘security-based swap 
agreement’ means a swap agreement as defined in section 
206A of the Gramm-Leach-Bliley Act (15 U.S.C. 78c note) 
of which a material term is based on the price, yield, 
value, or volatility of any security or any group or index 
of securities, or any interest therein. 
‘‘(B) EXCLUSIONS.—The term ‘security-based swap 
agreement’ does not include any security-based swap.’’. 
(b) AUTHORITY TO FURTHER DEFINE TERMS.—The Securities 
and Exchange Commission may, by rule, further define— 
(1) the term ‘‘commercial risk’’; 
(2) any other term included in an amendment to the Securi-
ties Exchange Act of 1934 (15 U.S.C. 78c(a)) made by this 
subtitle; and 
(3) the terms ‘‘security-based swap’’, ‘‘security-based swap 
dealer’’, ‘‘major security-based swap participant’’, 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 including transactions and entities that 
have been structured to evade this subtitle or the amendments 
made by this subtitle. 
SEC. 762. REPEAL OF PROHIBITION ON REGULATION OF SECURITY- 
BASED SWAP AGREEMENTS. 
(a) REPEAL.—Sections 206B and 206C of the Gramm-Leach- 
Bliley Act (Public Law 106–102; 15 U.S.C. 78c note) are repealed. 
(b) CONFORMING AMENDMENTS TO GRAMM-LEACH-BLILEY.—Sec-
tion 206A(a) of the Gramm-Leach-Bliley Act (15 U.S.C. 78c note) 
is amended in the material preceding paragraph (1), by striking 
‘‘Except as’’ and all that follows through ‘‘that—’’ and inserting 
the following: ‘‘Except as provided in subsection (b), as used in 
this section, the term ‘swap agreement’ means any agreement, 
contract, or transaction that—’’. 
(c) CONFORMING AMENDMENTS
TO
THE SECURITIES ACT
OF 
1933.— 
(1) Section 2A of the Securities Act of 1933 (15 U.S.C. 
77b–1) is amended— 
(A) by striking subsection (a) and reserving that sub-
section; and 
(B) by striking ‘‘(as defined in section 206B of the 
Gramm-Leach-Bliley Act)’’ each place that such term 
appears and inserting ‘‘(as defined in section 3(a)(78) of 
the Securities Exchange Act of 1934)’’. 
(2) Section 17 of the Securities Act of 1933 (15 U.S.C. 
77q) is amended— 
(A) in subsection (a)—
H. R. 4173—385 
(i) by inserting ‘‘(including security-based swaps)’’ 
after ‘‘securities’’; and 
(ii) by striking ‘‘(as defined in section 206B of 
the Gramm-Leach-Bliley Act)’’ and inserting ‘‘(as 
defined in section 3(a)(78) of the Securities Exchange 
Act)’’; and 
(B) in subsection (d), by striking ‘‘206B of the Gramm- 
Leach-Bliley Act’’ and inserting ‘‘3(a)(78) of the Securities 
Exchange Act of 1934’’. 
(d) CONFORMING AMENDMENTS TO THE SECURITIES EXCHANGE 
ACT OF 1934.—The Securities Exchange Act of 1934 (15 U.S.C. 
78a et seq.) is amended— 
(1) in section 3A (15 U.S.C. 78c–1)— 
(A) by striking subsection (a) and reserving that sub-
section; and 
(B) by striking ‘‘(as defined in section 206B of the 
Gramm-Leach-Bliley Act)’’ each place that the term 
appears; 
(2) in section 9 (15 U.S.C. 78i)— 
(A) in subsection (a), by striking paragraphs (2) 
through (5) and inserting the following: 
‘‘(2) To effect, alone or with 1 or more other persons, a series 
of transactions in any security registered on a national securities 
exchange, any security not so registered, 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 secu-
rity-based swap participant, or other person selling or offering 
for sale or purchasing or offering to purchase the security, a secu-
rity-based swap, or a security-based swap agreement with respect 
to such security, to induce the purchase or sale of any security 
registered on a national securities exchange, any security not so 
registered, any security-based swap, or any security-based swap 
agreement with respect to such security 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 1 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 secu-
rity-based swap participant, or other person selling or offering 
for sale or purchasing or offering to purchase the security, a secu-
rity-based swap, or security-based swap agreement with respect 
to such security, to make, regarding any security registered on 
a national securities exchange, any security not so registered, any 
security-based swap, or any security-based swap agreement with 
respect to such security, for the purpose of inducing the purchase 
or sale of such security, such security-based swap, or such 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 that 
person knew or had reasonable ground to believe was so false 
or misleading.
H. R. 4173—386 
‘‘(5) For a consideration, received directly or indirectly from 
a broker, dealer, security-based swap dealer, major security-based 
swap participant, or other person selling or offering for sale or 
purchasing or offering to purchase the security, a security-based 
swap, or security-based swap agreement with respect to such secu-
rity, to induce the purchase of any security registered on a national 
securities exchange, any security not so registered, any security- 
based swap, or any security-based swap agreement with respect 
to such security 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 1 or more 
persons conducted for the purpose of raising or depressing the 
price of such security.’’; and 
(B) in subsection (i), by striking ‘‘(as defined in section 
206B of the Gramm-Leach-Bliley Act)’’; 
(3) in section 10 (15 U.S.C. 78j)— 
(A) in subsection (b), by striking ‘‘(as defined in section 
206B of the Gramm-Leach-Bliley Act),’’ each place that 
term appears; and 
(B) in the matter following subsection (b), by striking 
‘‘(as defined in section 206B of the Gramm-Leach-Bliley 
Act), in each place that such terms appear’’; 
(4) in section 15 (15 U.S.C. 78o)— 
(A) in subsection (c)(1)(A), by striking ‘‘(as defined in 
section 206B of the Gramm-Leach-Bliley Act),’’; 
(B) in subparagraphs (B) and (C) of subsection (c)(1), 
by striking ‘‘(as defined in section 206B of the Gramm- 
Leach-Bliley Act)’’ each place that term appears; 
(C) by redesignating subsection (i), as added by section 
303(f) of the Commodity Futures Modernization Act of 2000 
(Public Law 106–554; 114 Stat. 2763A–455)), as subsection 
(j); and 
(D) in subsection (j), as redesignated by subparagraph 
(C), by striking ‘‘(as defined in section 206B of the Gramm- 
Leach-Bliley Act)’’; 
(5) in section 16 (15 U.S.C. 78p)— 
(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 (a)(3)(B), by inserting ‘‘or security- 
based swaps’’ after ‘‘security-based swap agreement’’; 
(C) in the first sentence of subsection (b), by striking 
‘‘(as defined in section 206B of the Gramm-Leach-Bliley 
Act)’’; 
(D) in the third sentence of subsection (b), by striking 
‘‘(as defined in section 206B of the Gramm-Leach Bliley 
Act)’’ and inserting ‘‘or a security-based swap’’; and 
(E) in subsection (g), by striking ‘‘(as defined in section 
206B of the Gramm-Leach-Bliley Act)’’; 
(6) in section 20 (15 U.S.C. 78t), 
(A) in subsection (d), by striking ‘‘(as defined in section 
206B of the Gramm-Leach-Bliley Act)’’; and 
(B) in subsection (f), by striking ‘‘(as defined in section 
206B of the Gramm-Leach-Bliley Act)’’; and 
(7) in section 21A (15 U.S.C. 78u–1)— 
(A) in subsection (a)(1), by striking ‘‘(as defined in 
section 206B of the Gramm-Leach-Bliley Act)’’; and
H. R. 4173—387 
(B) in subsection (g), by striking ‘‘(as defined in section 
206B of the Gramm-Leach-Bliley Act)’’. 
SEC. 763. 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 
inserting after section 3B (as added by section 717 of this Act): 
‘‘SEC. 3C. CLEARING FOR SECURITY-BASED SWAPS. 
‘‘(a) IN GENERAL.— 
‘‘(1) STANDARD
FOR
CLEARING.—It shall be unlawful for 
any person to engage in a security-based swap unless that 
person submits such security-based swap for clearing to a 
clearing agency that is registered under this Act or a clearing 
agency that is exempt from registration under this Act if 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 clearing of a secu-
rity-based swap executed bilaterally or on or through the 
rules of an unaffiliated national securities exchange or 
security-based swap execution facility. 
‘‘(b) COMMISSION REVIEW.— 
‘‘(1) COMMISSION-INITIATED REVIEW.— 
‘‘(A) The Commission on an ongoing basis shall review 
each security-based swap, or any group, category, type, 
or class of security-based swaps to make a determination 
that such security-based swap, or group, category, type, 
or class of security-based swaps should be required to be 
cleared. 
‘‘(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 submission. 
‘‘(B) Any security-based swap or group, category, type, 
or class of security-based swaps listed for clearing by a 
clearing agency as of the date of enactment of this sub-
section shall be considered submitted to the Commission. 
‘‘(C) The Commission shall— 
‘‘(i) make available to the public any submission 
received under subparagraphs (A) and (B); 
‘‘(ii) review each submission made under subpara-
graphs (A) and (B), and determine whether the secu-
rity-based swap, or group, category, type, or class of 
security-based swaps, described in the submission is 
required to be cleared; and 
‘‘(iii) provide at least a 30-day public comment 
period regarding its determination whether the
H. R. 4173—388 
clearing requirement under subsection (a)(1) shall 
apply to the submission. 
‘‘(3) DEADLINE.—The Commission shall make its determina-
tion under paragraph (2)(C) not later than 90 days after 
receiving a submission made under paragraphs (2)(A) and 
(2)(B), unless the submitting clearing agency agrees to an exten-
sion for the time limitation established under this paragraph. 
‘‘(4) DETERMINATION.— 
‘‘(A) In reviewing a submission made under paragraph 
(2), the Commission shall review whether the submission 
is consistent with section 17A. 
‘‘(B) In reviewing a security-based swap, group of secu-
rity-based swaps or class of security-based swaps pursuant 
to paragraph (1) or a submission made under paragraph 
(2), the Commission shall take into account the following 
factors: 
‘‘(i) The existence of significant outstanding 
notional exposures, trading liquidity and adequate 
pricing data. 
‘‘(ii) The availability of rule framework, capacity, 
operational expertise and resources, and credit support 
infrastructure to clear the contract on terms that are 
consistent with the material terms and trading conven-
tions 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 resources of the clearing agency avail-
able to clear the contract. 
‘‘(iv) The effect on competition, including appro-
priate fees and charges applied 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 subsection (b)(1) 
or paragraph (2)(C) that the clearing requirement shall 
apply, the Commission may require such terms and condi-
tions to the requirement as the Commission determines 
to be appropriate. 
‘‘(5) RULES.—Not later than 1 year after the date of the 
enactment of this section, 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 accept for 
clearing. Nothing in this paragraph limits the Commission 
from making a determination under paragraph (2)(C) for secu-
rity-based swaps described in paragraph (2)(B). 
‘‘(c) STAY OF CLEARING REQUIREMENT.— 
‘‘(1) IN GENERAL.—After making a determination pursuant 
to subsection (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 subsection (a)(1) until 
the Commission completes a review of the terms of the security- 
based swap (or the group, category, type, or class of security- 
based swaps) and the clearing arrangement.
H. R. 4173—389 
‘‘(2) DEADLINE.—The Commission shall complete a review 
undertaken pursuant to paragraph (1) not later than 90 days 
after issuance of the stay, unless the clearing agency that 
clears the security-based swap, or group, category, type, or 
class of security-based swaps, agrees to an extension of the 
time limitation established under this paragraph. 
‘‘(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 Commission determines to 
be appropriate, that the security-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 requirement of sub-
section (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 this section, the Commission shall adopt rules 
for reviewing, pursuant 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.— 
‘‘(1) IN GENERAL.—The Commission shall prescribe rules 
under this section (and issue interpretations of rules prescribed 
under this section), as determined by the Commission to be 
necessary to prevent evasions of the mandatory clearing 
requirements under this Act. 
‘‘(2) DUTY OF COMMISSION TO INVESTIGATE AND TAKE CER-
TAIN
ACTIONS.—To the extent the Commission finds that a 
particular security-based swap or any group, category, type, 
or class of security-based swaps that would otherwise be subject 
to mandatory clearing but no clearing agency has listed the 
security-based swap or the group, category, type, or class of 
security-based swaps for clearing, the Commission shall— 
‘‘(A) investigate the relevant facts and circumstances; 
‘‘(B) within 30 days issue a public report containing 
the results of the investigation; and 
‘‘(C) take such actions as the Commission determines 
to be necessary and in the public interest, which may 
include requiring the retaining of adequate margin or cap-
ital by parties to the security-based swap or the group, 
category, type, or class of security-based swaps. 
‘‘(3) EFFECT ON AUTHORITY.—Nothing in this subsection— 
‘‘(A) authorizes the Commission to adopt rules 
requiring a clearing agency to list for clearing a security- 
based swap or any group, category, type, or class of secu-
rity-based swaps if the clearing of the security-based swap 
or the group, category, type, or class of security-based 
swaps would threaten the financial integrity of the clearing 
agency; and 
‘‘(B) affects the authority of the Commission to enforce 
the open access provisions of subsection (a)(2) with respect 
to a security-based swap or the group, category, type, or 
class of security-based swaps that is listed for clearing 
by a clearing agency.
H. R. 4173—390 
‘‘(e) REPORTING TRANSITION RULES.—Rules adopted 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 reported to a registered 
security-based swap data repository or the Commission no later 
than 180 days after the effective date of this section. 
‘‘(2) Security-based swaps entered into on or after such 
date of enactment shall be reported to a registered security- 
based swap data 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. 
‘‘(f) 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 sub-
section (e)(1). 
‘‘(2) Security-based swaps entered into before application 
of the clearing requirement pursuant to this section are exempt 
from the clearing requirements of this section if reported pursu-
ant to subsection (e)(2). 
‘‘(g) EXCEPTIONS.— 
‘‘(1) IN GENERAL.—The requirements of subsection (a)(1) 
shall not apply to a security-based swap if 1 of the counterpar-
ties to the security-based swap— 
‘‘(A) is not a financial entity; 
‘‘(B) is using security-based swaps to hedge or mitigate 
commercial 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 secu-
rity-based swaps. 
‘‘(2) OPTION
TO
CLEAR.—The application of the clearing 
exception in paragraph (1) is solely at the discretion of the 
counterparty to the security-based swap that meets the condi-
tions of subparagraphs (A) through (C) of paragraph (1). 
‘‘(3) FINANCIAL ENTITY DEFINITION.— 
‘‘(A) IN GENERAL.—For the purposes of this subsection, 
the term ‘financial entity’ means— 
‘‘(i) a swap dealer; 
‘‘(ii) a security-based swap dealer; 
‘‘(iii) a major swap participant; 
‘‘(iv) a major security-based swap participant; 
‘‘(v) a commodity pool as defined in section 1a(10) 
of the Commodity Exchange Act; 
‘‘(vi) a private fund as defined in section 202(a) 
of the Investment Advisers Act of 1940 (15 U.S.C. 
80–b–2(a)); 
‘‘(vii) an employee benefit plan as defined in para-
graphs (3) and (32) of section 3 of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C. 1002); 
‘‘(viii) a person predominantly engaged in activities 
that are in the business of banking or financial in
H. R. 4173—391 
nature, as defined in section 4(k) of the Bank Holding 
Company Act of 1956. 
‘‘(B) EXCLUSION.—The Commission shall consider 
whether to exempt small banks, savings associations, farm 
credit system institutions, and credit unions, including— 
‘‘(i) depository institutions with total assets of 
$10,000,000,000 or less; 
‘‘(ii) farm credit system institutions with total 
assets of $10,000,000,000 or less; or 
‘‘(iii) 
credit 
unions 
with 
total 
assets 
of 
$10,000,000,000 or less. 
‘‘(4) TREATMENT OF AFFILIATES.— 
‘‘(A) IN GENERAL.—An affiliate of a person that qualifies 
for an exception under this subsection (including affiliate 
entities predominantly engaged in providing financing for 
the purchase of the merchandise or manufactured goods 
of the person) may qualify for the exception only if the 
affiliate, acting on behalf of the person and as an agent, 
uses 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. 
‘‘(B) PROHIBITION RELATING TO CERTAIN AFFILIATES.— 
The exception in subparagraph (A) shall not apply if the 
affiliate is— 
‘‘(i) a swap dealer; 
‘‘(ii) a security-based swap dealer; 
‘‘(iii) a major swap participant; 
‘‘(iv) a major security-based swap participant; 
‘‘(v) an issuer that would be an investment com-
pany, as defined in section 3 of the Investment Com-
pany Act of 1940 (15 U.S.C. 80a–3), but for paragraph 
(1) or (7) of subsection (c) of that Act (15 U.S.C. 80a– 
3(c)); 
‘‘(vi) a commodity pool; or 
‘‘(vii) 
a 
bank 
holding 
company 
with 
over 
$50,000,000,000 in consolidated assets. 
‘‘(C) TRANSITION RULE FOR AFFILIATES.—An affiliate, 
subsidiary, or a wholly owned entity of a person that quali-
fies for an exception under subparagraph (A) and is 
predominantly engaged in providing financing for the pur-
chase or lease of merchandise or manufactured goods of 
the person shall be exempt from the margin requirement 
described in section 15F(e) and the clearing requirement 
described in subsection (a) with regard to security-based 
swaps entered into to mitigate the risk of the financing 
activities for not less than a 2-year period beginning on 
the date of enactment of this subparagraph. 
‘‘(5) ELECTION OF COUNTERPARTY.— 
‘‘(A) 
SECURITY-BASED
SWAPS
REQUIRED
TO
BE 
CLEARED.—With respect to any security-based swap that 
is subject to the mandatory clearing requirement under 
subsection (a) and entered into by a security-based swap 
dealer or a major security-based swap participant with 
a counterparty that is not a swap dealer, major swap 
participant, security-based swap dealer, or major security- 
based swap participant, the counterparty shall have the
H. R. 4173—392 
sole right to select the clearing agency at which the secu-
rity-based swap will be cleared. 
‘‘(B) SECURITY-BASED
SWAPS
NOT
REQUIRED
TO
BE 
CLEARED.—With respect to any security-based swap that 
is not subject to the mandatory clearing requirement under 
subsection (a) and entered into by a security-based swap 
dealer or a major security-based swap participant with 
a counterparty that is not a swap dealer, major swap 
participant, security-based swap dealer, or major security- 
based swap participant, the counterparty— 
‘‘(i) may elect to require clearing of the security- 
based swap; and 
‘‘(ii) shall have the sole right to select the clearing 
agency at which the security-based swap will be 
cleared. 
‘‘(6) ABUSE OF EXCEPTION.—The Commission may prescribe 
such rules or issue interpretations of the rules as the Commis-
sion determines to be necessary to prevent abuse of the excep-
tions described in this subsection. The Commission may also 
request information from those persons claiming the clearing 
exception as necessary to prevent abuse of the exceptions 
described in this subsection. 
‘‘(h) TRADE EXECUTION.— 
‘‘(1) IN GENERAL.—With respect to transactions involving 
security-based swaps subject to the clearing requirement of 
subsection (a)(1), counterparties shall— 
‘‘(A) execute the transaction on an exchange; or 
‘‘(B) execute the transaction on a security-based swap 
execution facility registered under section 3D or a security- 
based swap execution facility that is exempt from registra-
tion under section 3D(e). 
‘‘(2) EXCEPTION.—The requirements of subparagraphs (A) 
and (B) of paragraph (1) shall not apply if no exchange or 
security-based swap execution facility makes the security-based 
swap available to trade or for security-based swap transactions 
subject to the clearing exception under subsection (g). 
‘‘(i) BOARD APPROVAL.—Exemptions from the requirements of 
this section to clear a security-based swap or execute a security- 
based swap through a national securities exchange or security- 
based swap execution facility shall be available to a counterparty 
that is an issuer of securities that are registered under section 
12 or that is required to file reports pursuant to section 15(d), 
only if an appropriate committee of the issuer’s board or governing 
body has reviewed and approved the issuer’s decision to enter 
into security-based swaps that are subject to such exemptions. 
‘‘(j) DESIGNATION OF CHIEF COMPLIANCE OFFICER.— 
‘‘(1) IN GENERAL.—Each registered clearing agency shall 
designate an individual to serve as a chief compliance officer. 
‘‘(2) DUTIES.—The chief compliance officer shall— 
‘‘(A) report directly to the board or to the senior officer 
of the clearing agency; 
‘‘(B) in consultation with its board, a body performing 
a function similar thereto, or the senior officer of the reg-
istered clearing agency, resolve any conflicts of interest 
that may arise;
H. R. 4173—393 
‘‘(C) be responsible for administering each policy and 
procedure that is required to be established pursuant to 
this section; 
‘‘(D) ensure compliance with this title (including regula-
tions issued under this title) relating to agreements, con-
tracts, or transactions, including each rule prescribed by 
the Commission under this section; 
‘‘(E) establish procedures for the remediation of non-
compliance issues identified by the compliance officer 
through any— 
‘‘(i) compliance office review; 
‘‘(ii) look-back; 
‘‘(iii) internal or external audit finding; 
‘‘(iv) self-reported error; or 
‘‘(v) validated complaint; and 
‘‘(F) establish and follow appropriate procedures for 
the handling, management response, remediation, re-
testing, and closing of noncompliance issues. 
‘‘(3) ANNUAL REPORTS.— 
‘‘(A) IN GENERAL.—In accordance with rules prescribed 
by the Commission, the chief compliance officer shall 
annually prepare and sign a report that contains a descrip-
tion of— 
‘‘(i) the compliance of the registered clearing 
agency or security-based swap execution facility of the 
compliance officer with respect to this title (including 
regulations under this title); and 
‘‘(ii) each policy and procedure of the registered 
clearing agency of the compliance officer (including 
the code of ethics and conflict of interest policies of 
the registered clearing agency). 
‘‘(B) REQUIREMENTS.—A compliance report under 
subparagraph (A) shall— 
‘‘(i) accompany each appropriate financial report 
of the registered clearing agency that is required to 
be furnished to the Commission pursuant to this sec-
tion; and 
‘‘(ii) include a certification that, under penalty of 
law, the compliance report is accurate and complete.’’. 
(b) CLEARING AGENCY REQUIREMENTS.—Section 17A of the 
Securities Exchange Act of 1934 (15 U.S.C. 78q–1) is amended 
by adding at the end the following: 
‘‘(g) REGISTRATION REQUIREMENT.—It shall be unlawful for a 
clearing agency, unless registered with the Commission, directly 
or indirectly to make use of the mails or any means or instrumen-
tality of interstate commerce to perform the functions of a clearing 
agency with respect to a security-based swap. 
‘‘(h) VOLUNTARY REGISTRATION.—A person that clears agree-
ments, contracts, or transactions that are not required to be cleared 
under this title may register with the Commission as a clearing 
agency. 
‘‘(i) STANDARDS FOR CLEARING AGENCIES CLEARING SECURITY- 
BASED SWAP TRANSACTIONS.—To be registered and to maintain 
registration as a clearing agency that clears security-based 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
H. R. 4173—394 
clearing agency pursuant to this title, the Commission may conform 
such standards or oversight to reflect evolving United States and 
international standards. 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 complies 
with any such standards. 
‘‘(j) RULES.—The Commission shall adopt rules governing per-
sons that are registered as clearing agencies for security-based 
swaps under this title. 
‘‘(k) EXEMPTIONS.—The Commission may exempt, conditionally 
or unconditionally, a clearing agency from registration under this 
section for the clearing of security-based swaps if the Commission 
determines that the clearing agency is subject to comparable, com-
prehensive supervision and regulation by the Commodity Futures 
Trading Commission or the appropriate government authorities 
in the home country of the agency. Such conditions may include, 
but are not limited to, requiring that the clearing agency be avail-
able for inspection by the Commission and make available all 
information requested by the Commission. 
‘‘(l) EXISTING
DEPOSITORY
INSTITUTIONS
AND
DERIVATIVE 
CLEARING ORGANIZATIONS.— 
‘‘(1) IN GENERAL.—A depository institution or derivative 
clearing organization registered with the Commodity Futures 
Trading Commission under the Commodity Exchange Act that 
is required to be registered as a clearing agency under this 
section is deemed to be registered under this section solely 
for the purpose of clearing security-based swaps to the extent 
that, before the date of enactment of this subsection— 
‘‘(A) the depository institution cleared swaps as a multi-
lateral clearing organization; or 
‘‘(B) the derivative clearing organization cleared swaps 
pursuant to an exemption from registration as a clearing 
agency. 
‘‘(2) CONVERSION OF DEPOSITORY INSTITUTIONS.—A deposi-
tory institution to which this subsection applies may, by the 
vote of the shareholders owning not less than 51 percent of 
the voting interests of the depository institution, be converted 
into a State corporation, partnership, limited liability company, 
or similar legal form pursuant to a plan of conversion, if the 
conversion is not in contravention of applicable State law. 
‘‘(3) SHARING OF INFORMATION.—The Commodity Futures 
Trading Commission shall make available to the Commission, 
upon request, all information determined to be relevant by 
the Commodity Futures Trading Commission regarding a 
derivatives clearing organization deemed to be registered with 
the Commission under paragraph (1). 
‘‘(m) MODIFICATION
OF CORE PRINCIPLES.—The Commission 
may conform the core principles established in this section to reflect 
evolving United States and international standards.’’. 
(c) SECURITY-BASED SWAP EXECUTION FACILITIES.—The Securi-
ties Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended 
by inserting after section 3C (as added by subsection (a) of this 
section) the following: 
‘‘SEC. 3D. SECURITY-BASED SWAP EXECUTION FACILITIES. 
‘‘(a) REGISTRATION.—
H. R. 4173—395 
‘‘(1) IN GENERAL.—No person may operate a facility for 
the trading or processing of security-based swaps, unless the 
facility is registered as a security-based swap execution facility 
or as a national securities exchange under this section. 
‘‘(2) DUAL REGISTRATION.—Any person that is registered 
as a security-based swap execution facility under this section 
shall register with the Commission regardless of whether the 
person also is registered with the Commodity Futures Trading 
Commission as a swap execution facility. 
‘‘(b) TRADING AND TRADE PROCESSING.—A security-based swap 
execution facility that is registered under subsection (a) may— 
‘‘(1) make available for trading any security-based swap; 
and 
‘‘(2) facilitate trade processing of any security-based swap. 
‘‘(c) IDENTIFICATION OF FACILITY USED TO TRADE SECURITY- 
BASED SWAPS BY NATIONAL SECURITIES EXCHANGES.—A national 
securities exchange shall, to the extent that the exchange also 
operates a security-based swap execution facility and uses the same 
electronic trade execution system for listing and executing trades 
of security-based swaps on or through the exchange and the facility, 
identify whether electronic trading of such security-based swaps 
is taking place on or through the national securities exchange 
or the security-based swap execution facility. 
‘‘(d) CORE PRINCIPLES FOR SECURITY-BASED SWAP EXECUTION 
FACILITIES.— 
‘‘(1) COMPLIANCE WITH CORE PRINCIPLES.— 
‘‘(A) IN GENERAL.—To be registered, and maintain reg-
istration, as a security-based swap execution facility, the 
security-based swap execution facility shall comply with— 
‘‘(i) the core principles described in this subsection; 
and 
‘‘(ii) any requirement that the Commission may 
impose by rule or regulation. 
‘‘(B) REASONABLE DISCRETION OF SECURITY-BASED SWAP 
EXECUTION FACILITY.—Unless otherwise determined by the 
Commission, by rule or regulation, a security-based swap 
execution facility described in subparagraph (A) shall have 
reasonable discretion in establishing the manner in which 
it complies with the core principles described in this sub-
section. 
‘‘(2) COMPLIANCE
WITH
RULES.—A security-based swap 
execution facility shall— 
‘‘(A) establish and enforce compliance with any rule 
established by such security-based swap execution facility, 
including— 
‘‘(i) the terms and conditions of the security-based 
swaps traded or processed on or through the facility; 
and 
‘‘(ii) any limitation on access to the facility; 
‘‘(B) establish and enforce trading, trade processing, 
and participation rules that will deter abuses and have 
the capacity to detect, investigate, and enforce those rules, 
including means— 
‘‘(i) to provide market participants with impartial 
access to the market; and 
‘‘(ii) to capture information that may be used in 
establishing whether rule violations have occurred; and
H. R. 4173—396 
‘‘(C) establish rules governing the operation of the 
facility, including rules specifying trading procedures to 
be used in entering and executing orders traded or posted 
on the facility, including block trades. 
‘‘(3) SECURITY-BASED SWAPS NOT READILY SUSCEPTIBLE TO 
MANIPULATION.—The security-based swap execution facility 
shall permit trading only in security-based swaps that are 
not readily susceptible to manipulation. 
‘‘(4) MONITORING OF TRADING AND TRADE PROCESSING.— 
The security-based swap execution facility shall— 
‘‘(A) establish and enforce rules or terms and conditions 
defining, or specifications detailing— 
‘‘(i) trading procedures to be used in entering and 
executing orders traded on or through the facilities 
of the security-based swap execution facility; and 
‘‘(ii) procedures for trade processing of security- 
based swaps on or through the facilities of the security- 
based swap execution facility; and 
‘‘(B) monitor trading in security-based swaps to prevent 
manipulation, price distortion, and disruptions of the 
delivery or cash settlement process through surveillance, 
compliance, and disciplinary practices and procedures, 
including methods for conducting real-time monitoring of 
trading and comprehensive and accurate trade reconstruc-
tions. 
‘‘(5) ABILITY TO OBTAIN INFORMATION.—The security-based 
swap execution facility shall— 
‘‘(A) establish and enforce rules that will allow the 
facility to obtain any necessary information to perform 
any of the functions described in this subsection; 
‘‘(B) provide the information to the Commission on 
request; and 
‘‘(C) have the capacity to carry out such international 
information-sharing agreements as the Commission may 
require. 
‘‘(6) FINANCIAL INTEGRITY OF TRANSACTIONS.—The security- 
based swap execution facility shall establish and enforce rules 
and procedures for ensuring the financial integrity of security- 
based swaps entered on or through the facilities of the security- 
based swap execution facility, including the clearance and 
settlement of security-based swaps pursuant to section 3C(a)(1). 
‘‘(7) EMERGENCY
AUTHORITY.—The security-based swap 
execution facility shall adopt rules to provide for the exercise 
of emergency authority, in consultation or cooperation with 
the Commission, as is necessary and appropriate, including 
the authority to liquidate or transfer open positions in any 
security-based swap or to suspend or curtail trading in a secu-
rity-based swap. 
‘‘(8) TIMELY PUBLICATION OF TRADING INFORMATION.— 
‘‘(A) IN GENERAL.—The security-based swap execution 
facility shall make public timely information on price, 
trading volume, and other trading data on security-based 
swaps to the extent prescribed by the Commission. 
‘‘(B) CAPACITY
OF
SECURITY-BASED
SWAP
EXECUTION 
FACILITY.—The security-based swap execution facility shall 
be required to have the capacity to electronically capture
H. R. 4173—397 
and transmit and disseminate trade information with 
respect to transactions executed on or through the facility. 
‘‘(9) RECORDKEEPING AND REPORTING.— 
‘‘(A) IN
GENERAL.—A security-based swap execution 
facility shall— 
‘‘(i) maintain records of all activities relating to 
the business of the facility, including a complete audit 
trail, in a form and manner acceptable to the Commis-
sion for a period of 5 years; and 
‘‘(ii) report to the Commission, in a form and 
manner acceptable to the Commission, such informa-
tion as the Commission determines to be necessary 
or appropriate for the Commission to perform the 
duties of the Commission under this title. 
‘‘(B) REQUIREMENTS.—The Commission shall adopt 
data collection and reporting requirements for security- 
based swap execution facilities that are comparable to cor-
responding requirements for clearing agencies and security- 
based swap data repositories. 
‘‘(10) ANTITRUST
CONSIDERATIONS.—Unless necessary or 
appropriate to achieve the purposes of this title, the security- 
based swap execution facility shall not— 
‘‘(A) adopt any rules or taking any actions that result 
in any unreasonable restraint of trade; or 
‘‘(B) impose any material anticompetitive burden on 
trading or clearing. 
‘‘(11) CONFLICTS OF INTEREST.—The security-based swap 
execution facility shall— 
‘‘(A) establish and enforce rules to minimize conflicts 
of interest in its decision-making process; and 
‘‘(B) establish a process for resolving the conflicts of 
interest. 
‘‘(12) FINANCIAL RESOURCES.— 
‘‘(A) IN GENERAL.—The security-based swap execution 
facility shall have adequate financial, operational, and 
managerial resources to discharge each responsibility of 
the security-based swap execution facility, as determined 
by the Commission. 
‘‘(B) DETERMINATION
OF
RESOURCE
ADEQUACY.—The 
financial resources of a security-based swap execution 
facility shall be considered to be adequate if the value 
of the financial resources— 
‘‘(i) enables the organization to meet its financial 
obligations to its members and participants notwith-
standing a default by the member or participant cre-
ating the largest financial exposure for that organiza-
tion in extreme but plausible market conditions; and 
‘‘(ii) exceeds the total amount that would enable 
the security-based swap execution facility to cover the 
operating costs of the security-based swap execution 
facility for a 1-year period, as calculated on a rolling 
basis. 
‘‘(13) SYSTEM
SAFEGUARDS.—The security-based swap 
execution facility shall—
H. R. 4173—398 
‘‘(A) establish and maintain a program of risk analysis 
and oversight to identify and minimize sources of oper-
ational risk, through the development of appropriate con-
trols and procedures, and automated systems, that— 
‘‘(i) are reliable and secure; and 
‘‘(ii) have adequate scalable capacity; 
‘‘(B) establish and maintain emergency procedures, 
backup facilities, and a plan for disaster recovery that 
allow for— 
‘‘(i) the timely recovery and resumption of oper-
ations; and 
‘‘(ii) the fulfillment of the responsibilities and 
obligations of the security-based swap execution 
facility; and 
‘‘(C) periodically conduct tests to verify that the backup 
resources of the security-based swap execution facility are 
sufficient to ensure continued— 
‘‘(i) order processing and trade matching; 
‘‘(ii) price reporting; 
‘‘(iii) market surveillance; and 
‘‘(iv) maintenance of a comprehensive and accurate 
audit trail. 
‘‘(14) DESIGNATION OF CHIEF COMPLIANCE OFFICER.— 
‘‘(A) IN GENERAL.—Each security-based swap execution 
facility shall designate an individual to serve as a chief 
compliance officer. 
‘‘(B) DUTIES.—The chief compliance officer shall— 
‘‘(i) report directly to the board or to the senior 
officer of the facility; 
‘‘(ii) review compliance with the core principles 
in this subsection; 
‘‘(iii) in consultation with the board of the facility, 
a body performing a function similar to that of a board, 
or the senior officer of the facility, resolve any conflicts 
of interest that may arise; 
‘‘(iv) be responsible for establishing and admin-
istering the policies and procedures required to be 
established pursuant to this section; 
‘‘(v) ensure compliance with this title and the rules 
and regulations issued under this title, including rules 
prescribed by the Commission pursuant to this section; 
‘‘(vi) establish procedures for the remediation of 
noncompliance issues found during— 
‘‘(I) compliance office reviews; 
‘‘(II) look backs; 
‘‘(III) internal or external audit findings; 
‘‘(IV) self-reported errors; or 
‘‘(V) through validated complaints; and 
‘‘(vii) establish and follow appropriate procedures 
for the handling, management response, remediation, 
retesting, and closing of noncompliance issues. 
‘‘(C) ANNUAL REPORTS.— 
‘‘(i) IN GENERAL.—In accordance with rules pre-
scribed by the Commission, the chief compliance officer 
shall annually prepare and sign a report that contains 
a description of—
H. R. 4173—399 
‘‘(I) the compliance of the security-based swap 
execution facility with this title; and 
‘‘(II) the policies and procedures, including the 
code of ethics and conflict of interest policies, of 
the security-based security-based swap execution 
facility. 
‘‘(ii) REQUIREMENTS.—The chief compliance officer 
shall— 
‘‘(I) submit each report described in clause 
(i) with the appropriate financial report of the 
security-based swap execution facility that is 
required to be submitted to the Commission pursu-
ant to this section; and 
‘‘(II) include in the report a certification that, 
under penalty of law, the report is accurate and 
complete. 
‘‘(e) EXEMPTIONS.—The Commission may exempt, conditionally 
or unconditionally, a security-based swap execution facility from 
registration under this section if the Commission finds that the 
facility is subject to comparable, comprehensive supervision and 
regulation on a consolidated basis by the Commodity Futures 
Trading Commission. 
‘‘(f) RULES.—The Commission shall prescribe rules governing 
the regulation of security-based swap execution facilities under 
this section.’’. 
(d) SEGREGATION OF ASSETS HELD AS COLLATERAL IN SECURITY- 
BASED SWAP TRANSACTIONS.—The Securities Exchange Act of 1934 
(15 U.S.C. 78a et seq.) is amended by inserting after section 3D 
(as added by subsection (b)) the following: 
‘‘SEC. 3E. SEGREGATION OF ASSETS HELD AS COLLATERAL IN SECU-
RITY-BASED SWAP TRANSACTIONS. 
‘‘(a) REGISTRATION REQUIREMENT.—It shall be unlawful for any 
person to accept any money, securities, or property (or to extend 
any credit in lieu of money, securities, or property) from, for, or 
on behalf of a security-based swaps customer to margin, guarantee, 
or secure a security-based swap cleared by or through a clearing 
agency (including money, securities, or property accruing to the 
customer as the result of such a security-based swap), unless the 
person shall have registered under this title with the Commission 
as a broker, dealer, or security-based swap dealer, and the registra-
tion shall not have expired nor been suspended nor revoked. 
‘‘(b) CLEARED SECURITY-BASED SWAPS.— 
‘‘(1) SEGREGATION REQUIRED.—A broker, dealer, or security- 
based swap dealer shall treat and deal with all money, securi-
ties, and property of any security-based swaps customer 
received to margin, guarantee, or secure a security-based swap 
cleared by or though a clearing agency (including money, securi-
ties, or property accruing to the security-based swaps customer 
as the result of such a security-based swap) as belonging to 
the security-based swaps customer. 
‘‘(2) COMMINGLING
PROHIBITED.—Money, securities, and 
property of a security-based swaps customer described in para-
graph (1) shall be separately accounted for and shall not be 
commingled with the funds of the broker, dealer, or security- 
based swap dealer or be used to margin, secure, or guarantee
H. R. 4173—400 
any trades or contracts of any security-based swaps customer 
or person other than the person for whom the same are held. 
‘‘(c) EXCEPTIONS.— 
‘‘(1) USE OF FUNDS.— 
‘‘(A) IN
GENERAL.—Notwithstanding subsection (b), 
money, securities, and property of a security-based swaps 
customer of a broker, dealer, or security-based swap dealer 
described in subsection (b) may, for convenience, be 
commingled and deposited in the same 1 or more accounts 
with any bank or trust company or with a clearing agency. 
‘‘(B) WITHDRAWAL.—Notwithstanding subsection (b), 
such share of the money, securities, and property described 
in subparagraph (A) as in the normal course of business 
shall be necessary to margin, guarantee, secure, transfer, 
adjust, or settle a cleared security-based swap with a 
clearing agency, or with any member of the clearing agency, 
may be withdrawn and applied to such purposes, including 
the payment of commissions, brokerage, interest, taxes, 
storage, and other charges, lawfully accruing in connection 
with the cleared security-based swap. 
‘‘(2) COMMISSION ACTION.—Notwithstanding subsection (b), 
in accordance with such terms and conditions as the Commis-
sion may prescribe by rule, regulation, or order, any money, 
securities, or property of the security-based swaps customer 
of a broker, dealer, or security-based swap dealer described 
in subsection (b) may be commingled and deposited as provided 
in this section with any other money, securities, or property 
received by the broker, dealer, or security-based swap dealer 
and required by the Commission to be separately accounted 
for and treated and dealt with as belonging to the security- 
based swaps customer of the broker, dealer, or security-based 
swap dealer. 
‘‘(d) PERMITTED INVESTMENTS.—Money described in subsection 
(b) may be invested in obligations of the United States, in general 
obligations of any State or of any political subdivision of a State, 
and in obligations fully guaranteed as to principal and interest 
by the United States, or in any other investment that the Commis-
sion may by rule or regulation prescribe, and such investments 
shall be made in accordance with such rules and regulations and 
subject to such conditions as the Commission may prescribe. 
‘‘(e) PROHIBITION.—It shall be unlawful for any person, 
including any clearing agency and any depository institution, that 
has received any money, securities, or property for deposit in a 
separate account or accounts as provided in subsection (b) to hold, 
dispose of, or use any such money, securities, or property as 
belonging to the depositing broker, dealer, or security-based swap 
dealer or any person other than the swaps customer of the broker, 
dealer, or security-based swap dealer. 
‘‘(f) SEGREGATION REQUIREMENTS FOR UNCLEARED SECURITY- 
BASED SWAPS.— 
‘‘(1) SEGREGATION
OF
ASSETS
HELD
AS
COLLATERAL
IN 
UNCLEARED SECURITY-BASED SWAP TRANSACTIONS.— 
‘‘(A) NOTIFICATION.—A security-based swap dealer or 
major security-based swap participant shall be required 
to notify the counterparty of the security-based swap dealer 
or major security-based swap participant at the beginning 
of a security-based swap transaction that the counterparty
H. R. 4173—401 
has the right to require segregation of the funds of other 
property supplied to margin, guarantee, or secure the 
obligations of the counterparty. 
‘‘(B) SEGREGATION AND MAINTENANCE OF FUNDS.—At 
the request of a counterparty to a security-based swap 
that provides funds or other property to a security-based 
swap dealer or major security-based swap participant to 
margin, guarantee, or secure the obligations of the 
counterparty, the security-based swap dealer or major secu-
rity-based swap participant shall— 
‘‘(i) segregate the funds or other property for the 
benefit of the counterparty; and 
‘‘(ii) in accordance with such rules and regulations 
as the Commission may promulgate, maintain the 
funds or other property in a segregated account sepa-
rate from the assets and other interests of the security- 
based swap dealer or major security-based swap 
participant. 
‘‘(2) APPLICABILITY.—The requirements described in para-
graph (1) shall— 
‘‘(A) apply only to a security-based swap between a 
counterparty and a security-based swap dealer or major 
security-based swap participant that is not submitted for 
clearing to a clearing agency; and 
‘‘(B)(i) not apply to variation margin payments; or 
‘‘(ii) 
not 
preclude 
any 
commercial 
arrangement 
regarding— 
‘‘(I) the investment of segregated funds or other 
property that may only be invested in such investments 
as the Commission may permit by rule or regulation; 
and 
‘‘(II) the related allocation of gains and losses 
resulting from any investment of the segregated funds 
or other property. 
‘‘(3) USE OF INDEPENDENT THIRD-PARTY CUSTODIANS.—The 
segregated account described in paragraph (1) shall be— 
‘‘(A) carried by an independent third-party custodian; 
and 
‘‘(B) designated as a segregated account for and on 
behalf of the counterparty. 
‘‘(4) REPORTING REQUIREMENT.—If the counterparty does 
not choose to require segregation of the funds or other property 
supplied to margin, guarantee, or secure the obligations of 
the counterparty, the security-based swap dealer or major secu-
rity-based swap participant shall report to the counterparty 
of the security-based swap dealer or major security-based swap 
participant on a quarterly basis that the back office procedures 
of the security-based swap dealer or major security-based swap 
participant relating to margin and collateral requirements are 
in compliance with the agreement of the counterparties. 
‘‘(g) BANKRUPTCY.—A security-based swap, as defined in section 
3(a)(68) shall be considered to be a security as such term is used 
in section 101(53A)(B) and subchapter III of title 11, United States 
Code. An account that holds a security-based swap, other than 
a portfolio margining account referred to in section 15(c)(3)(C) shall 
be considered to be a securities account, as that term is defined 
in section 741 of title 11, United States Code. The definitions
H. R. 4173—402 
of the terms ‘purchase’ and ‘sale’ in section 3(a)(13) and (14) shall 
be applied to the terms ‘purchase’ and ‘sale’, as used in section 
741 of title 11, United States Code. The term ‘customer’, as defined 
in section 741 of title 11, United States Code, excludes any person, 
to the extent that such person has a claim based on any open 
repurchase agreement, open reverse repurchase agreement, stock 
borrowed agreement, non-cleared option, or non-cleared security- 
based swap except to the extent of any margin delivered to or 
by the customer with respect to which there is a customer protection 
requirement under section 15(c)(3) or a segregation requirement.’’. 
(e) TRADING IN SECURITY-BASED SWAPS.—Section 6 of the Secu-
rities Exchange Act of 1934 (15 U.S.C. 78f) is amended by adding 
at the end the following: 
‘‘(l) SECURITY-BASED SWAPS.—It shall be unlawful for any per-
son 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).’’. 
(f) ADDITIONS OF SECURITY-BASED SWAPS TO CERTAIN ENFORCE-
MENT PROVISIONS.—Section 9(b) of the Securities Exchange Act 
of 1934 (15 U.S.C. 78i(b)) is amended by striking paragraphs (1) 
through (3) and inserting the following: 
‘‘(1) any transaction in connection with any security 
whereby any party to such transaction acquires— 
‘‘(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; 
‘‘(2) any transaction in connection with any security with 
relation to which such person has, directly or indirectly, any 
interest in any— 
‘‘(A) such put, call, straddle, option, or privilege; 
‘‘(B) such security futures product; or 
‘‘(C) such security-based swap; or 
‘‘(3) any transaction in any security for the account of 
any person who such person has reason to believe 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 security.’’. 
(g) RULEMAKING AUTHORITY TO PREVENT FRAUD, MANIPULA-
TION 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: 
‘‘(j) 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 
manipulative act or practice, makes any fictitious quotation, or 
engages in any transaction, practice, or course of business which 
operates as a fraud or deceit upon any person. The Commission
H. R. 4173—403 
shall, for the purposes of this subsection, by rules and regulations 
define, and prescribe means reasonably designed to prevent, such 
transactions, acts, practices, and courses of business as are fraudu-
lent, deceptive, or manipulative, and such quotations as are ficti-
tious.’’. 
(h) POSITION LIMITS AND POSITION ACCOUNTABILITY FOR SECU-
RITY-BASED
SWAPS.—The Securities Exchange Act of 1934 is 
amended by inserting after section 10A (15 U.S.C. 78j–1) the fol-
lowing: 
‘‘SEC. 10B. POSITION LIMITS AND POSITION ACCOUNTABILITY FOR 
SECURITY-BASED SWAPS AND LARGE TRADER REPORTING. 
‘‘(a) POSITION LIMITS.—As a means reasonably designed to pre-
vent fraud and manipulation, the Commission shall, by rule or 
regulation, as necessary or appropriate in the public interest or 
for the protection of investors, establish limits (including related 
hedge exemption provisions) on the size of positions in any security- 
based swap that may be held by any person. In establishing such 
limits, the Commission may require any person to aggregate posi-
tions in— 
‘‘(1) any security-based swap and any security or loan or 
group of securities or loans on which such security-based swap 
is based, which such security-based swap references, or to which 
such security-based swap is related as described in paragraph 
(68) of section 3(a), and any other instrument relating to such 
security or loan or group or index of securities or loans; or 
‘‘(2) any security-based swap and— 
‘‘(A) any security 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 
security-based swap as described in paragraph (68) of sec-
tion 3(a); and 
‘‘(B) any other instrument relating to the same security 
or group or index of securities described under subpara-
graph (A). 
‘‘(b) EXEMPTIONS.—The Commission, by rule, regulation, or 
order, may conditionally or unconditionally exempt 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 require-
ment the Commission may establish under this section with respect 
to position limits. 
‘‘(c) SRO RULES.— 
‘‘(1) IN GENERAL.—As a means reasonably designed to pre-
vent fraud or manipulation, the Commission, by rule, regula-
tion, or order, as necessary or appropriate in the public interest, 
for the protection of investors, or otherwise in furtherance 
of the purposes of this title, may direct a self-regulatory 
organization— 
‘‘(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-regulatory organiza-
tion; or 
‘‘(ii) any person for whom a member of such self- 
regulatory organization effects transactions in such 
security-based swap; and
H. R. 4173—404 
‘‘(B) to adopt rules reasonably designed to ensure 
compliance with requirements prescribed by the Commis-
sion under this subsection. 
‘‘(2) REQUIREMENT
TO
AGGREGATE
POSITIONS.—In estab-
lishing the limits under paragraph (1), the self-regulatory 
organization may require such member or person to aggregate 
positions in— 
‘‘(A) any security-based swap and any security or loan 
or group or narrow-based security index of securities or 
loans on which such security-based swap is based, which 
such security-based swap references, or to which such secu-
rity-based swap is related as described in section 3(a)(68), 
and any other instrument relating to such security or loan 
or group or narrow-based security index of securities or 
loans; or 
‘‘(B)(i) any security-based swap; and 
‘‘(ii) any security-based swap and any other instrument 
relating to the same security or group or narrow-based 
security index of securities. 
‘‘(d) LARGE TRADER REPORTING.—The Commission, 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 and any security 
or loan or group or narrow-based security index of securities or 
loans as set forth in paragraphs (1) and (2) of subsection (a) under 
this section to report such information as the Commission may 
prescribe regarding any position or positions in any security-based 
swap or uncleared security-based swap and any security or loan 
or group or narrow-based security index of securities or loans and 
any other instrument relating to such security or loan or group 
or narrow-based security index of securities or loans as set forth 
in paragraphs (1) and (2) of subsection (a) under this section.’’. 
(i) PUBLIC REPORTING AND REPOSITORIES FOR SECURITY-BASED 
SWAPS.—Section 13 of the Securities Exchange Act of 1934 (15 
U.S.C. 78m) is amended by adding at the end the following: 
‘‘(m) PUBLIC AVAILABILITY OF SECURITY-BASED SWAP TRANS-
ACTION DATA.— 
‘‘(1) IN GENERAL.— 
‘‘(A) DEFINITION
OF
REAL-TIME
PUBLIC
REPORTING.— 
In this paragraph, the term ‘real-time public reporting’ 
means to report data relating to a security-based swap 
transaction, including price and volume, as soon as techno-
logically practicable after the time at which the security- 
based swap transaction has been executed. 
‘‘(B) PURPOSE.—The purpose of this subsection is to 
authorize the Commission to make security-based swap 
transaction and pricing data available to the public in 
such form and at such times as the Commission determines 
appropriate to enhance price discovery. 
‘‘(C) GENERAL RULE.—The Commission is authorized 
to provide by rule for the public availability of security- 
based swap transaction, volume, and pricing data as fol-
lows: 
‘‘(i) With respect to those security-based swaps 
that are subject to the mandatory clearing requirement 
described in section 3C(a)(1) (including those security- 
based swaps that are excepted from the requirement
H. R. 4173—405 
pursuant to section 3C(g)), the Commission shall 
require real-time public reporting for such trans-
actions. 
‘‘(ii) With respect to those security-based swaps 
that are not subject to the mandatory clearing require-
ment described in section 3C(a)(1), but are cleared 
at a registered clearing agency, the Commission shall 
require real-time public reporting for such trans-
actions. 
‘‘(iii) With respect to security-based swaps that 
are not cleared at a registered clearing agency and 
which are reported to a security-based swap data 
repository or the Commission under section 3C(a)(6), 
the 
Commission 
shall 
require 
real-time 
public 
reporting for such transactions, in a manner that does 
not disclose the business transactions and market posi-
tions of any person. 
‘‘(iv) With respect to security-based swaps that 
are determined to be required to be cleared under 
section 3C(b) but are not cleared, the Commission shall 
require real-time public reporting for such trans-
actions. 
‘‘(D) REGISTERED ENTITIES AND PUBLIC REPORTING.— 
The Commission may require registered entities to publicly 
disseminate the security-based swap transaction and 
pricing data required to be reported under this paragraph. 
‘‘(E) RULEMAKING REQUIRED.—With respect to the rule 
providing for the public availability of transaction and 
pricing data for security-based swaps described in clauses 
(i) and (ii) of subparagraph (C), the rule promulgated by 
the Commission shall contain provisions— 
‘‘(i) to ensure such information does not identify 
the participants; 
‘‘(ii) to specify the criteria for determining what 
constitutes a large notional security-based swap trans-
action (block trade) for particular markets and con-
tracts; 
‘‘(iii) to specify the appropriate time delay for 
reporting large notional security-based swap trans-
actions (block trades) to the public; and 
‘‘(iv) that take into account whether the public 
disclosure will materially reduce market liquidity. 
‘‘(F) TIMELINESS OF REPORTING.—Parties to a security- 
based swap (including agents of the parties to a security- 
based swap) shall be responsible for reporting security- 
based swap transaction information to the appropriate reg-
istered entity in a timely manner as may be prescribed 
by the Commission. 
‘‘(G) REPORTING OF SWAPS TO REGISTERED SECURITY- 
BASED
SWAP
DATA
REPOSITORIES.—Each security-based 
swap (whether cleared or uncleared) shall be reported to 
a registered security-based swap data repository. 
‘‘(H) REGISTRATION OF CLEARING AGENCIES.—A clearing 
agency may register as a security-based swap data reposi-
tory. 
‘‘(2) SEMIANNUAL AND ANNUAL PUBLIC REPORTING OF AGGRE-
GATE SECURITY-BASED SWAP DATA.—
H. R. 4173—406 
‘‘(A) IN GENERAL.—In accordance with subparagraph 
(B), the Commission shall issue a written report on a 
semiannual and annual basis to make available to the 
public information relating to— 
‘‘(i) the trading and clearing in the major security- 
based swap categories; and 
‘‘(ii) the market participants and developments in 
new products. 
‘‘(B) USE; CONSULTATION.—In preparing a report under 
subparagraph (A), the Commission shall— 
‘‘(i) use information from security-based swap data 
repositories and clearing agencies; and 
‘‘(ii) consult with the Office of the Comptroller 
of the Currency, the Bank for International Settle-
ments, and such other regulatory bodies as may be 
necessary. 
‘‘(C) AUTHORITY
OF
COMMISSION.—The Commission 
may, by rule, regulation, or order, delegate the public 
reporting responsibilities of the Commission under this 
paragraph in accordance with such terms and conditions 
as the Commission determines to be appropriate and in 
the public interest. 
‘‘(n) SECURITY-BASED SWAP DATA REPOSITORIES.— 
‘‘(1) REGISTRATION REQUIREMENT.—It shall be unlawful for 
any person, 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 security-based swap data repository. 
‘‘(2) INSPECTION AND EXAMINATION.—Each registered secu-
rity-based swap data repository shall be subject to inspection 
and examination by any representative of the Commission. 
‘‘(3) COMPLIANCE WITH CORE PRINCIPLES.— 
‘‘(A) IN GENERAL.—To be registered, and maintain reg-
istration, as a security-based swap data repository, the 
security-based swap data repository shall comply with— 
‘‘(i) the requirements and core principles described 
in this subsection; and 
‘‘(ii) any requirement that the Commission may 
impose by rule or regulation. 
‘‘(B) REASONABLE DISCRETION OF SECURITY-BASED SWAP 
DATA
REPOSITORY.—Unless otherwise determined by the 
Commission, by rule or regulation, a security-based swap 
data repository described in subparagraph (A) shall have 
reasonable discretion in establishing the manner in which 
the security-based swap data repository complies with the 
core principles described in this subsection. 
‘‘(4) STANDARD SETTING.— 
‘‘(A) DATA IDENTIFICATION.— 
‘‘(i) IN GENERAL.—In accordance with clause (ii), 
the Commission shall prescribe standards that specify 
the data elements for each security-based swap that 
shall be collected and maintained by each registered 
security-based swap data repository. 
‘‘(ii) REQUIREMENT.—In carrying out clause (i), the 
Commission shall prescribe consistent data element 
standards 
applicable 
to 
registered 
entities 
and 
reporting counterparties.
H. R. 4173—407 
‘‘(B) 
DATA
COLLECTION
AND
MAINTENANCE.—The 
Commission shall prescribe data collection and data 
maintenance standards for security-based swap data reposi-
tories. 
‘‘(C) COMPARABILITY.—The standards prescribed by the 
Commission under this subsection shall be comparable to 
the data standards imposed by the Commission on clearing 
agencies in connection with their clearing of security-based 
swaps. 
‘‘(5) DUTIES.—A security-based swap data repository shall— 
‘‘(A) accept data prescribed by the Commission for each 
security-based swap under subsection (b); 
‘‘(B) confirm with both counterparties to the security- 
based swap the accuracy of the data that was submitted; 
‘‘(C) maintain the data described in subparagraph (A) 
in such form, in such manner, and for such period as 
may be required by the Commission; 
‘‘(D)(i) provide direct electronic access to the Commis-
sion (or any designee of the Commission, including another 
registered entity); and 
‘‘(ii) provide the information described in subparagraph 
(A) in such form and at such frequency as the Commission 
may require to comply with the public reporting require-
ments set forth in subsection (m); 
‘‘(E) at the direction of the Commission, establish auto-
mated systems for monitoring, screening, and analyzing 
security-based swap data; 
‘‘(F) maintain the privacy of any and all security-based 
swap transaction information that the security-based swap 
data repository receives from a security-based swap dealer, 
counterparty, or any other registered entity; and 
‘‘(G) on a confidential basis pursuant to section 24, 
upon request, and after notifying the Commission of the 
request, make available all data obtained by the security- 
based 
swap 
data 
repository, 
including 
individual 
counterparty trade and position data, to— 
‘‘(i) each appropriate prudential regulator; 
‘‘(ii) the Financial Stability Oversight Council; 
‘‘(iii) the Commodity Futures Trading Commission; 
‘‘(iv) the Department of Justice; and 
‘‘(v) any other person that the Commission deter-
mines to be appropriate, including— 
‘‘(I) foreign financial supervisors (including for-
eign futures authorities); 
‘‘(II) foreign central banks; and 
‘‘(III) foreign ministries. 
‘‘(H) CONFIDENTIALITY
AND
INDEMNIFICATION
AGREE-
MENT.—Before the security-based swap data repository may 
share information with any entity described in subpara-
graph (G)— 
‘‘(i) the security-based swap data repository shall 
receive a written agreement from each entity stating 
that the entity shall abide by the confidentiality 
requirements described in section 24 relating to the 
information on security-based swap transactions that 
is provided; and
H. R. 4173—408 
‘‘(ii) each entity shall agree to indemnify the secu-
rity-based swap data repository and the Commission 
for any expenses arising from litigation relating to 
the information provided under section 24. 
‘‘(6) DESIGNATION OF CHIEF COMPLIANCE OFFICER.— 
‘‘(A) IN
GENERAL.—Each security-based swap data 
repository shall designate an individual to serve as a chief 
compliance officer. 
‘‘(B) DUTIES.—The chief compliance officer shall— 
‘‘(i) report directly to the board or to the senior 
officer of the security-based swap data repository; 
‘‘(ii) review the compliance of the security-based 
swap data repository with respect to the requirements 
and core principles described in this subsection; 
‘‘(iii) in consultation with the board of the security- 
based swap data repository, a body performing a func-
tion similar to the board of the security-based swap 
data repository, or the senior officer of the security- 
based swap data repository, resolve any conflicts of 
interest that may arise; 
‘‘(iv) be responsible for administering each policy 
and procedure that is required to be established pursu-
ant to this section; 
‘‘(v) ensure compliance with this title (including 
regulations) relating to agreements, contracts, or trans-
actions, including each rule prescribed by the Commis-
sion under this section; 
‘‘(vi) establish procedures for the remediation of 
noncompliance issues identified by the chief compliance 
officer through any— 
‘‘(I) compliance office review; 
‘‘(II) look-back; 
‘‘(III) internal or external audit finding; 
‘‘(IV) self-reported error; or 
‘‘(V) validated complaint; and 
‘‘(vii) establish and follow appropriate procedures 
for the handling, management response, remediation, 
retesting, and closing of noncompliance issues. 
‘‘(C) ANNUAL REPORTS.— 
‘‘(i) IN GENERAL.—In accordance with rules pre-
scribed by the Commission, the chief compliance officer 
shall annually prepare and sign a report that contains 
a description of— 
‘‘(I) the compliance of the security-based swap 
data repository of the chief compliance officer with 
respect to this title (including regulations); and 
‘‘(II) each policy and procedure of the security- 
based swap data repository of the chief compliance 
officer (including the code of ethics and conflict 
of interest policies of the security-based swap data 
repository). 
‘‘(ii) REQUIREMENTS.—A compliance report under 
clause (i) shall— 
‘‘(I) accompany each appropriate financial 
report of the security-based swap data repository 
that is required to be furnished to the Commission 
pursuant to this section; and
H. R. 4173—409 
‘‘(II) include a certification that, under penalty 
of law, the compliance report is accurate and com-
plete. 
‘‘(7) CORE PRINCIPLES APPLICABLE TO SECURITY-BASED SWAP 
DATA REPOSITORIES.— 
‘‘(A) ANTITRUST CONSIDERATIONS.—Unless necessary or 
appropriate to achieve the purposes of this title, the swap 
data repository shall not— 
‘‘(i) adopt any rule or take any action that results 
in any unreasonable restraint of trade; or 
‘‘(ii) impose any material anticompetitive burden 
on the trading, clearing, or reporting of transactions. 
‘‘(B) GOVERNANCE
ARRANGEMENTS.—Each security- 
based swap data repository shall establish governance 
arrangements that are transparent— 
‘‘(i) to fulfill public interest requirements; and 
‘‘(ii) to support the objectives of the Federal 
Government, owners, and participants. 
‘‘(C) CONFLICTS
OF
INTEREST.—Each security-based 
swap data repository shall— 
‘‘(i) establish and enforce rules to minimize con-
flicts of interest in the decision-making process of the 
security-based swap data repository; and 
‘‘(ii) establish a process for resolving any conflicts 
of interest described in clause (i). 
‘‘(D) ADDITIONAL DUTIES DEVELOPED BY COMMISSION.— 
‘‘(i) IN GENERAL.—The Commission may develop 
1 or more additional duties applicable to security-based 
swap data repositories. 
‘‘(ii) CONSIDERATION OF EVOLVING STANDARDS.—In 
developing additional duties under subparagraph (A), 
the Commission may take into consideration any 
evolving standard of the United States or the inter-
national community. 
‘‘(iii) ADDITIONAL
DUTIES
FOR
COMMISSION
DES-
IGNEES.—The Commission shall establish additional 
duties 
for 
any 
registrant 
described 
in 
section 
13(m)(2)(C) in order to minimize conflicts of interest, 
protect data, ensure compliance, and guarantee the 
safety and security of the security-based swap data 
repository. 
‘‘(8) REQUIRED
REGISTRATION
FOR
SECURITY-BASED
SWAP 
DATA REPOSITORIES.—Any person that is required to be reg-
istered as a security-based swap data repository under this 
subsection shall register with the Commission, regardless of 
whether that person is also licensed under the Commodity 
Exchange Act as a swap data repository. 
‘‘(9) RULES.—The Commission shall adopt rules governing 
persons that are registered under this subsection.’’. 
SEC. 764. REGISTRATION AND REGULATION OF SECURITY-BASED SWAP 
DEALERS AND MAJOR SECURITY-BASED SWAP PARTICI-
PANTS. 
(a) IN GENERAL.—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:
H. R. 4173—410 
‘‘SEC. 15F. REGISTRATION AND REGULATION OF SECURITY-BASED 
SWAP DEALERS AND MAJOR SECURITY-BASED SWAP 
PARTICIPANTS. 
‘‘(a) REGISTRATION.— 
‘‘(1) SECURITY-BASED SWAP DEALERS.—It shall be unlawful 
for any person to act as a security-based swap dealer unless 
the person is registered as a security-based swap dealer with 
the Commission. 
‘‘(2) MAJOR SECURITY-BASED SWAP PARTICIPANTS.—It shall 
be unlawful for any person to act as a major security-based 
swap participant unless the 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.— 
‘‘(A) IN GENERAL.—The application shall be made in 
such form and manner as prescribed by the Commission, 
and shall contain such information, as the Commission 
considers necessary concerning the business in which the 
applicant is or will be engaged. 
‘‘(B) CONTINUAL
REPORTING.—A person that is reg-
istered as a security-based swap dealer or major security- 
based swap participant shall continue to submit to the 
Commission reports that contain such information per-
taining to the business of the person as the Commission 
may require. 
‘‘(3) EXPIRATION.—Each registration under this section shall 
expire at such time as the Commission may prescribe by rule 
or regulation. 
‘‘(4) RULES.—Except as provided in subsections (d) and 
(e), the Commission may prescribe rules applicable to security- 
based swap dealers and major security-based swap participants, 
including rules that limit the activities of non-bank security- 
based swap dealers and major security-based swap participants. 
‘‘(5) TRANSITION.—Not later than 1 year after the date 
of enactment of the Wall Street Transparency and Account-
ability Act of 2010, the Commission shall issue rules under 
this section to provide for the registration of security-based 
swap dealers and major security-based swap participants. 
‘‘(6) STATUTORY DISQUALIFICATION.—Except to the extent 
otherwise specifically provided by rule, regulation, or order 
of the Commission, it shall be unlawful for a security-based 
swap dealer or a major security-based swap participant to 
permit any person associated with a security-based swap dealer 
or a major security-based swap participant who is subject to 
a statutory disqualification to effect or be involved in effecting 
security-based swaps on behalf of the security-based swap 
dealer or major security-based swap participant, if the security- 
based swap dealer or major security-based swap participant 
knew, or in the exercise of reasonable care should have known, 
of the statutory disqualification. 
‘‘(c) DUAL REGISTRATION.— 
‘‘(1) SECURITY-BASED SWAP DEALER.—Any person that is 
required to be registered as a security-based swap dealer under 
this section shall register with the Commission, regardless
H. R. 4173—411 
of whether the person also is registered with the Commodity 
Futures Trading Commission as a swap dealer. 
‘‘(2) MAJOR SECURITY-BASED SWAP PARTICIPANT.—Any per-
son that is required to be registered as a major security-based 
swap participant under this section shall register with the 
Commission, regardless of whether the person also is registered 
with the Commodity Futures Trading Commission as a major 
swap participant. 
‘‘(d) RULEMAKING.— 
‘‘(1) IN GENERAL.—The Commission shall adopt rules for 
persons that are registered as security-based swap dealers or 
major security-based swap participants under this section. 
‘‘(2) EXCEPTION FOR PRUDENTIAL REQUIREMENTS.— 
‘‘(A) IN GENERAL.—The Commission may not prescribe 
rules imposing prudential requirements on security-based 
swap dealers or major security-based swap participants 
for which there is a prudential regulator. 
‘‘(B) APPLICABILITY.—Subparagraph (A) does not limit 
the authority of the Commission to prescribe rules as 
directed under this section. 
‘‘(e) CAPITAL AND MARGIN REQUIREMENTS.— 
‘‘(1) IN GENERAL.— 
‘‘(A) SECURITY-BASED SWAP DEALERS AND MAJOR SECU-
RITY-BASED
SWAP
PARTICIPANTS
THAT
ARE
BANKS.—Each 
registered security-based swap dealer and major security- 
based swap participant for which there is not a prudential 
regulator shall meet such minimum capital requirements 
and minimum initial and variation margin requirements 
as the prudential regulator shall by rule or regulation 
prescribe under paragraph (2)(A). 
‘‘(B) SECURITY-BASED SWAP DEALERS AND MAJOR SECU-
RITY-BASED
SWAP
PARTICIPANTS
THAT
ARE
NOT
BANKS.— 
Each registered security-based swap dealer and major secu-
rity-based swap participant for which there is not a pruden-
tial regulator shall meet such minimum capital require-
ments and minimum initial and variation margin require-
ments as the Commission shall by rule or regulation pre-
scribe under paragraph (2)(B). 
‘‘(2) RULES.— 
‘‘(A) SECURITY-BASED SWAP DEALERS AND MAJOR SECU-
RITY-BASED
SWAP
PARTICIPANTS
THAT
ARE
BANKS.—The 
prudential regulators, in consultation with the Commission 
and the Commodity Futures Trading Commission, shall 
adopt rules for security-based swap dealers and major secu-
rity-based swap participants, with respect to their activities 
as a swap dealer or major swap participant, for which 
there is a prudential regulator imposing— 
‘‘(i) capital requirements; and 
‘‘(ii) both initial and variation margin requirements 
on all security-based swaps that are not cleared by 
a registered clearing agency. 
‘‘(B) SECURITY-BASED SWAP DEALERS AND MAJOR SECU-
RITY-BASED
SWAP
PARTICIPANTS
THAT
ARE
NOT
BANKS.— 
The Commission shall adopt rules for security-based swap 
dealers and major security-based swap participants, with 
respect to their activities as a swap dealer or major swap
H. R. 4173—412 
participant, for which there is not a prudential regulator 
imposing— 
‘‘(i) capital requirements; and 
‘‘(ii) both initial and variation margin requirements 
on all swaps that are not cleared by a registered 
clearing agency. 
‘‘(C) CAPITAL.—In setting capital requirements for a 
person that is designated as a security-based swap dealer 
or a major security-based swap participant for a single 
type or single class or category of security-based swap 
or activities, the prudential regulator and the Commission 
shall take into account the risks associated with other 
types of security-based swaps or classes of security-based 
swaps or categories of security-based swaps engaged in 
and the other activities conducted by that person that 
are not otherwise subject to regulation applicable to that 
person by virtue of the status of the person. 
‘‘(3) STANDARDS FOR CAPITAL AND MARGIN.— 
‘‘(A) IN GENERAL.—To offset the greater risk to the 
security-based swap dealer or major security-based swap 
participant and the financial system arising from the use 
of security-based swaps that are not cleared, the require-
ments imposed under paragraph (2) shall — 
‘‘(i) help ensure the safety and soundness of the 
security-based swap dealer or major security-based 
swap participant; and 
‘‘(ii) be appropriate for the risk associated with 
the non-cleared security-based swaps held as a secu-
rity-based swap dealer or major security-based swap 
participant. 
‘‘(B) RULE OF CONSTRUCTION.— 
‘‘(i) IN
GENERAL.—Nothing in this section shall 
limit, or be construed to limit, the authority— 
‘‘(I) of the Commission to set financial respon-
sibility rules for a broker or dealer registered 
pursuant to section 15(b) (except for section 
15(b)(11) thereof) in accordance with section 
15(c)(3); or 
‘‘(II) of the Commodity Futures Trading 
Commission to set financial responsibility rules 
for a futures commission merchant or introducing 
broker registered pursuant to section 4f(a) of the 
Commodity Exchange Act (except for section 
4f(a)(3) thereof) in accordance with section 4f(b) 
of the Commodity Exchange Act. 
‘‘(ii) FUTURES COMMISSION MERCHANTS AND OTHER 
DEALERS.—A futures commission merchant, intro-
ducing broker, broker, or dealer shall maintain suffi-
cient capital to comply with the stricter of any 
applicable capital requirements to which such futures 
commission merchant, introducing broker, broker, or 
dealer is subject to under this title or the Commodity 
Exchange Act. 
‘‘(C) MARGIN
REQUIREMENTS.—In prescribing margin 
requirements under this subsection, the prudential regu-
lator with respect to security-based swap dealers and major 
security-based swap participants that are depository
H. R. 4173—413 
institutions, and the Commission with respect to security- 
based swap dealers and major security-based swap partici-
pants that are not depository institutions shall permit the 
use of noncash collateral, as the regulator or the Commis-
sion determines to be consistent with— 
‘‘(i) preserving the financial integrity of markets 
trading security-based swaps; and 
‘‘(ii) preserving the stability of the United States 
financial system. 
‘‘(D) COMPARABILITY OF CAPITAL AND MARGIN REQUIRE-
MENTS.— 
‘‘(i) IN GENERAL.—The prudential regulators, the 
Commission, 
and 
the 
Securities 
and 
Exchange 
Commission shall periodically (but not less frequently 
than annually) consult on minimum capital require-
ments and minimum initial and variation margin 
requirements. 
‘‘(ii) COMPARABILITY.—The entities described in 
clause (i) shall, to the maximum extent practicable, 
establish and maintain comparable minimum capital 
requirements and minimum initial and variation 
margin requirements, including the use of noncash 
collateral, for— 
‘‘(I) security-based swap dealers; and 
‘‘(II) major security-based swap participants. 
‘‘(f) 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 required by the 
Commission, by rule or regulation, regarding the trans-
actions and positions and financial condition of the reg-
istered security-based swap dealer or major security-based 
swap participant; 
‘‘(B)(i) for which there is a prudential regulator, shall 
keep books and records of all activities related to the busi-
ness 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; and 
‘‘(ii) for which 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; and 
‘‘(C) shall keep books and records described in subpara-
graph (B) open to inspection and examination by any rep-
resentative of the Commission. 
‘‘(2) RULES.—The Commission shall adopt rules governing 
reporting and recordkeeping for security-based swap dealers 
and major security-based swap participants. 
‘‘(g) DAILY TRADING RECORDS.— 
‘‘(1) IN
GENERAL.—Each registered security-based swap 
dealer and major security-based swap participant shall main-
tain daily trading records of the security-based swaps of the 
registered security-based swap dealer and major security-based 
swap participant and all related records (including related cash 
or 
forward 
transactions) 
and 
recorded 
communications, 
including electronic mail, instant messages, and recordings of
H. R. 4173—414 
telephone calls, for such period as may be required by the 
Commission by rule or regulation. 
‘‘(2) INFORMATION
REQUIREMENTS.—The daily trading 
records shall include such information as the Commission shall 
require by rule or regulation. 
‘‘(3) COUNTERPARTY
RECORDS.—Each registered security- 
based swap dealer and major security-based swap participant 
shall maintain daily trading records for each counterparty in 
a manner and form that is identifiable with each security- 
based swap transaction. 
‘‘(4) AUDIT
TRAIL.—Each registered security-based swap 
dealer and major security-based swap participant shall main-
tain a complete audit trail for conducting comprehensive and 
accurate trade reconstructions. 
‘‘(5) RULES.—The Commission shall adopt rules governing 
daily trading records for security-based swap dealers and major 
security-based swap participants. 
‘‘(h) BUSINESS CONDUCT STANDARDS.— 
‘‘(1) IN
GENERAL.—Each registered security-based swap 
dealer and major security-based swap participant shall conform 
with such business conduct standards as prescribed in para-
graph (3) and as may be prescribed by the Commission by 
rule or regulation that relate to— 
‘‘(A) fraud, manipulation, and other abusive practices 
involving security-based swaps (including security-based 
swaps that are offered but not entered into); 
‘‘(B) diligent supervision of the business of the reg-
istered security-based swap dealer and major security- 
based swap participant; 
‘‘(C) adherence to all applicable position limits; and 
‘‘(D) such other matters as the Commission determines 
to be appropriate. 
‘‘(2) RESPONSIBILITIES WITH RESPECT TO SPECIAL ENTITIES.— 
‘‘(A) ADVISING
SPECIAL
ENTITIES.—A security-based 
swap dealer or major security-based swap participant that 
acts as an advisor to special entity regarding a security- 
based swap shall comply with the requirements of para-
graph (4) with respect to such special entity. 
‘‘(B) 
ENTERING
OF
SECURITY-BASED
SWAPS
WITH 
RESPECT
TO
SPECIAL
ENTITIES.—A security-based swap 
dealer that enters into or offers to enter into security- 
based swap with a special entity shall comply with the 
requirements of paragraph (5) with respect to such special 
entity. 
‘‘(C) SPECIAL ENTITY DEFINED.—For purposes of this 
subsection, the term ‘special entity’ means— 
‘‘(i) a Federal agency; 
‘‘(ii) a State, State agency, city, county, munici-
pality, or other political subdivision of a State or; 
‘‘(iii) any employee benefit plan, as defined in sec-
tion 3 of the Employee Retirement Income Security 
Act of 1974 (29 U.S.C. 1002); 
‘‘(iv) any governmental plan, as defined in section 
3 of the Employee Retirement Income Security Act 
of 1974 (29 U.S.C. 1002); or
H. R. 4173—415 
‘‘(v) any endowment, including an endowment that 
is an organization described in section 501(c)(3) of the 
Internal Revenue Code of 1986. 
‘‘(3) BUSINESS CONDUCT REQUIREMENTS.—Business conduct 
requirements adopted by the Commission shall— 
‘‘(A) establish a duty for a security-based swap dealer 
or major security-based swap participant to verify that 
any counterparty meets the eligibility standards for an 
eligible contract participant; 
‘‘(B) require disclosure by the security-based swap 
dealer or major security-based swap participant to any 
counterparty to the transaction (other than a security- 
based swap dealer, major security-based swap participant, 
security-based swap dealer, or major security-based swap 
participant) of— 
‘‘(i) information about the material risks and 
characteristics of the security-based swap; 
‘‘(ii) any 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 
‘‘(iii)(I) for cleared security-based swaps, upon the 
request of the counterparty, receipt of the daily mark 
of the transaction from the appropriate derivatives 
clearing organization; and 
‘‘(II) for uncleared security-based swaps, receipt 
of the daily mark of the transaction from the security- 
based swap dealer or the major security-based swap 
participant; 
‘‘(C) establish a duty for a security-based swap dealer 
or major security-based swap participant to communicate 
in a fair and balanced manner based on principles of fair 
dealing and good faith; and 
‘‘(D) establish such other standards and requirements 
as the Commission may determine are appropriate in the 
public interest, for the protection of investors, or otherwise 
in furtherance of the purposes of this Act. 
‘‘(4) SPECIAL
REQUIREMENTS
FOR
SECURITY-BASED
SWAP 
DEALERS ACTING AS ADVISORS.— 
‘‘(A) IN GENERAL.—It shall be unlawful for a security- 
based swap dealer or major security-based swap partici-
pant— 
‘‘(i) to employ any device, scheme, or artifice to 
defraud any special entity or prospective customer who 
is a special entity; 
‘‘(ii) to engage in any transaction, practice, or 
course of business that operates as a fraud or deceit 
on any special entity or prospective customer who is 
a special entity; or 
‘‘(iii) to engage in any act, practice, or course of 
business that is fraudulent, deceptive, or manipulative. 
‘‘(B) DUTY.—Any security-based swap dealer that acts 
as an advisor to a special entity shall have a duty to 
act in the best interests of the special entity. 
‘‘(C) REASONABLE EFFORTS.—Any security-based swap 
dealer that acts as an advisor to a special entity shall 
make reasonable efforts to obtain such information as is
H. R. 4173—416 
necessary to make a reasonable determination that any 
security-based swap recommended by the security-based 
swap dealer is in the best interests of the special entity, 
including information relating to— 
‘‘(i) the financial status of the special entity; 
‘‘(ii) the tax status of the special entity; 
‘‘(iii) the investment or financing objectives of the 
special entity; and 
‘‘(iv) any other information that the Commission 
may prescribe by rule or regulation. 
‘‘(5) SPECIAL
REQUIREMENTS
FOR
SECURITY-BASED
SWAP 
DEALERS AS COUNTERPARTIES TO SPECIAL ENTITIES.— 
‘‘(A) IN GENERAL.—Any security-based swap dealer or 
major security-based swap participant that offers to or 
enters into a security-based swap with a special entity 
shall— 
‘‘(i) comply with any duty established by the 
Commission for a security-based swap dealer or major 
security-based swap participant, with respect to a 
counterparty that is an eligible contract participant 
within the meaning of subclause (I) or (II) of clause 
(vii) of section 1a(18) of the Commodity Exchange Act, 
that requires the security-based swap dealer or major 
security-based swap participant to have a reasonable 
basis to believe that the counterparty that is a special 
entity has an independent representative that— 
‘‘(I) has sufficient knowledge to evaluate the 
transaction and risks; 
‘‘(II) is not subject to a statutory disqualifica-
tion; 
‘‘(III) is independent of the security-based 
swap dealer or major security-based swap partici-
pant; 
‘‘(IV) undertakes a duty to act in the best 
interests of the counterparty it represents; 
‘‘(V) makes appropriate disclosures; 
‘‘(VI) will provide written representations to 
the special entity regarding fair pricing and the 
appropriateness of the transaction; and 
‘‘(VII) in the case of employee benefit plans 
subject to the Employee Retirement Income Secu-
rity act of 1974, is a fiduciary as defined in section 
3 of that Act (29 U.S.C. 1002); and 
‘‘(ii) before the initiation of the transaction, disclose 
to the special entity in writing the capacity in which 
the security-based swap dealer is acting. 
‘‘(B) COMMISSION AUTHORITY.—The Commission may 
establish such other standards and requirements under 
this paragraph as the Commission may determine are 
appropriate in the public interest, for the protection of 
investors, or otherwise in furtherance of the purposes of 
this Act. 
‘‘(6) RULES.—The Commission shall prescribe rules under 
this subsection governing business conduct standards for secu-
rity-based swap dealers and major security-based swap partici-
pants.
H. R. 4173—417 
‘‘(7) APPLICABILITY.—This subsection shall not apply with 
respect to a transaction that is— 
‘‘(A) initiated by a special entity on an exchange or 
security-based swaps execution facility; and 
‘‘(B) the security-based swap dealer or major security- 
based swap participant does not know the identity of the 
counterparty to the transaction.’’ 
‘‘(i) DOCUMENTATION STANDARDS.— 
‘‘(1) IN
GENERAL.—Each registered security-based swap 
dealer and major security-based swap participant shall conform 
with such standards as may be prescribed by the Commission, 
by rule or regulation, that relate to timely and accurate con-
firmation, processing, netting, documentation, and valuation 
of all security-based swaps. 
‘‘(2) RULES.—The Commission shall adopt rules governing 
documentation standards for security-based swap dealers and 
major security-based swap participants. 
‘‘(j) DUTIES.—Each registered security-based swap dealer and 
major security-based swap participant shall, at all times, comply 
with the following requirements: 
‘‘(1) MONITORING OF TRADING.—The security-based swap 
dealer or major security-based swap participant shall monitor 
its trading in security-based swaps to prevent violations of 
applicable position limits. 
‘‘(2) RISK MANAGEMENT PROCEDURES.—The security-based 
swap dealer or major security-based swap participant shall 
establish robust and professional risk management systems 
adequate for managing the day-to-day business of the security- 
based swap dealer or major security-based swap participant. 
‘‘(3) DISCLOSURE OF GENERAL INFORMATION.—The security- 
based swap dealer or major security-based swap participant 
shall disclose to the Commission and to the prudential regulator 
for the security-based swap dealer or major security-based swap 
participant, as applicable, information concerning— 
‘‘(A) terms and conditions of its security-based swaps; 
‘‘(B) security-based swap trading operations, mecha-
nisms, and practices; 
‘‘(C) financial integrity protections relating to security- 
based swaps; and 
‘‘(D) other information relevant to its trading in secu-
rity-based swaps. 
‘‘(4) ABILITY TO OBTAIN INFORMATION.—The security-based 
swap dealer or major security-based swap participant shall— 
‘‘(A) establish and enforce internal systems and proce-
dures to obtain any necessary information to perform any 
of the functions described in this section; and 
‘‘(B) provide the information to the Commission and 
to the prudential regulator for the security-based swap 
dealer or major security-based swap participant, as 
applicable, on request. 
‘‘(5) CONFLICTS
OF
INTEREST.—The security-based swap 
dealer and major security-based swap participant shall imple-
ment conflict-of-interest systems and procedures that— 
‘‘(A) establish structural and institutional safeguards 
to ensure that the activities of any person within the firm 
relating to research or analysis of the price or market 
for any security-based swap or acting in a role of providing
H. R. 4173—418 
clearing activities or making determinations as to accepting 
clearing customers are separated by appropriate informa-
tional partitions within the firm from the review, pressure, 
or oversight of persons whose involvement in pricing, 
trading, or clearing activities might potentially bias their 
judgment or supervision and contravene the core principles 
of open access and the business conduct standards 
described in this title; and 
‘‘(B) address such other issues as the Commission 
determines to be appropriate. 
‘‘(6) ANTITRUST
CONSIDERATIONS.—Unless necessary or 
appropriate to achieve the purposes of this title, the security- 
based swap dealer or major security-based swap participant 
shall not— 
‘‘(A) adopt any process or take any action that results 
in any unreasonable restraint of trade; or 
‘‘(B) impose any material anticompetitive burden on 
trading or clearing. 
‘‘(7) RULES.—The Commission shall prescribe rules under 
this subsection governing duties of security-based swap dealers 
and major security-based swap participants. 
‘‘(k) DESIGNATION OF CHIEF COMPLIANCE OFFICER.— 
‘‘(1) IN GENERAL.—Each security-based swap dealer and 
major security-based swap participant shall designate an indi-
vidual to serve as a chief compliance officer. 
‘‘(2) DUTIES.—The chief compliance officer shall— 
‘‘(A) report directly to the board or to the senior officer 
of the security-based swap dealer or major security-based 
swap participant; 
‘‘(B) review the compliance of the security-based swap 
dealer or major security-based swap participant with 
respect to the security-based swap dealer and major secu-
rity-based swap participant requirements described in this 
section; 
‘‘(C) in consultation with the board of directors, a body 
performing a function similar to the board, or the senior 
officer of the organization, resolve any conflicts of interest 
that may arise; 
‘‘(D) be responsible for administering each policy and 
procedure that is required to be established pursuant to 
this section; 
‘‘(E) ensure compliance with this title (including regula-
tions) relating to security-based swaps, including each rule 
prescribed by the Commission under this section; 
‘‘(F) establish procedures for the remediation of non-
compliance issues identified by the chief compliance officer 
through any— 
‘‘(i) compliance office review; 
‘‘(ii) look-back; 
‘‘(iii) internal or external audit finding; 
‘‘(iv) self-reported error; or 
‘‘(v) validated complaint; and 
‘‘(G) establish and follow appropriate procedures for 
the handling, management response, remediation, re-
testing, and closing of noncompliance issues. 
‘‘(3) ANNUAL REPORTS.—
H. R. 4173—419 
‘‘(A) IN GENERAL.—In accordance with rules prescribed 
by the Commission, the chief compliance officer shall 
annually prepare and sign a report that contains a descrip-
tion of— 
‘‘(i) the compliance of the security-based swap 
dealer or major swap participant with respect to this 
title (including regulations); and 
‘‘(ii) each policy and procedure of the security- 
based swap dealer or major security-based swap 
participant of the chief compliance officer (including 
the code of ethics and conflict of interest policies). 
‘‘(B) REQUIREMENTS.—A compliance report under 
subparagraph (A) shall— 
‘‘(i) accompany each appropriate financial report 
of the security-based swap dealer or major security- 
based swap participant that is required to be furnished 
to the Commission pursuant to this section; and 
‘‘(ii) include a certification that, under penalty of 
law, the compliance report is accurate and complete. 
‘‘(l) 
ENFORCEMENT
AND
ADMINISTRATIVE
PROCEEDING 
AUTHORITY.— 
‘‘(1) PRIMARY ENFORCEMENT AUTHORITY.— 
‘‘(A) SECURITIES AND EXCHANGE COMMISSION.—Except 
as provided in subparagraph (B), (C), or (D), the Commis-
sion shall have primary authority to enforce subtitle B, 
and the amendments made by subtitle B of the Wall Street 
Transparency and Accountability Act of 2010, with respect 
to any person. 
‘‘(B) PRUDENTIAL REGULATORS.—The prudential regu-
lators shall have exclusive authority to enforce the provi-
sions of subsection (e) and other prudential requirements 
of this title (including risk management standards), with 
respect to security-based swap dealers or major security- 
based swap participants for which they are the prudential 
regulator. 
‘‘(C) REFERRAL.— 
‘‘(i) VIOLATIONS
OF
NONPRUDENTIAL
REQUIRE-
MENTS.—If the appropriate Federal banking agency for 
security-based swap dealers or major security-based 
swap participants that are depository institutions 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 
nonprudential requirements of this section or rules 
adopted by the Commission thereunder, the agency 
may recommend in writing to the Commission that 
the Commission initiate an enforcement proceeding as 
authorized under this title. The recommendation shall 
be accompanied by a written explanation of the con-
cerns giving rise to the recommendation. 
‘‘(ii) VIOLATIONS OF PRUDENTIAL REQUIREMENTS.— 
If the Commission has cause to believe that a securi-
ties-based swap dealer or major securities-based swap 
participant that has a prudential regulator may have 
engaged in conduct that constitute a violation of the 
prudential requirements of subsection (e) or rules 
adopted thereunder, the Commission may recommend
H. R. 4173—420 
in writing to the prudential regulator that the pruden-
tial regulator initiate an enforcement proceeding as 
authorized under this title. The recommendation shall 
be accompanied by a written explanation of the con-
cerns giving rise to the recommendation. 
‘‘(D) BACKSTOP ENFORCEMENT AUTHORITY.— 
‘‘(i) INITIATION OF ENFORCEMENT PROCEEDING BY 
PRUDENTIAL REGULATOR.—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 written report under sub-
section (C)(i), the prudential regulator may initiate 
an enforcement proceeding. 
‘‘(ii) INITIATION OF ENFORCEMENT PROCEEDING BY 
COMMISSION.—If the prudential regulator does not ini-
tiate an enforcement proceeding before the end of the 
90-day period beginning on the date on which the 
prudential regulator receives a written report under 
subsection (C)(ii), the Commission may initiate an 
enforcement proceeding. 
‘‘(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 registra-
tion of any security-based swap dealer or major security-based 
swap participant that has registered with the Commission 
pursuant to subsection (b) if the Commission finds, on the 
record after notice and opportunity for hearing, that such cen-
sure, placing of limitations, or revocation is in the public 
interest and that such security-based swap dealer or major 
security-based swap participant, or any person associated with 
such security-based swap dealer or major security-based swap 
participant effecting or involved in effecting transactions in 
security-based swaps on behalf of such security-based swap 
dealer or major security-based swap participant, whether prior 
or subsequent to becoming so associated— 
‘‘(A) has committed or omitted any act, or is subject 
to an order or finding, enumerated in subparagraph (A), 
(D), or (E) of paragraph (4) of section 15(b); 
‘‘(B) has been convicted of any offense specified in 
subparagraph (B) of such paragraph (4) within 10 years 
of the commencement of the proceedings under this sub-
section; 
‘‘(C) is enjoined from any action, conduct, or practice 
specified in subparagraph (C) of such paragraph (4); 
‘‘(D) is subject to an order or a final order specified 
in subparagraph (F) or (H), respectively, of such paragraph 
(4); or 
‘‘(E) has been found by a foreign financial regulatory 
authority to have committed or omitted any act, or violated 
any foreign statute or regulation, enumerated in subpara-
graph (G) of such paragraph (4). 
‘‘(3) ASSOCIATED PERSONS.—With respect to any person who 
is associated, who is seeking to become associated, or, at the 
time of the alleged misconduct, who was associated or was 
seeking to become associated with a security-based swap dealer 
or major security-based swap participant for the purpose of 
effecting or being involved in effecting security-based swaps