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(2) may, both individually and collectively, agree 
to such information-sharing arrangements as may be 
deemed to be necessary or appropriate in the public 
interest or for the protection of investors and swap 
counterparties. 
SEC. 753. ANTIMARKET 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 indi-
rectly, 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 en-
tity, any manipulative or deceptive device or contriv-
ance, 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 Restoring 
American Financial Stability Act of 2010. 
‘‘(A) SPECIAL
PROVISION
FOR
MANIPULA-
TION BY FALSE REPORTING.—Unlawful manipu-
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lation for purposes of this paragraph shall in-
clude, but not be limited to, delivering, or caus-
ing to be delivered for transmission through the 
mails or interstate commerce, by any means of 
communication 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, mis-
leading or inaccurate. 
‘‘(B) EFFECT ON OTHER LAW.—Nothing in 
this paragraph shall affect, or be construed to af-
fect, the applicability of section 9(a)(2). 
‘‘(2) PROHIBITION REGARDING FALSE INFORMA-
TION.—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 ap-
plication or any report filed with the 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 sub-
ject to the rules of any registered entity, or to omit 
to state in any such statement any material fact that 
is necessary to make any statement of a material fact
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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 en-
tity. 
‘‘(4) ENFORCEMENT.— 
‘‘(A) AUTHORITY OF COMMISSION.—If the 
Commission has reason to believe that any per-
son (other than a registered entity) is violating 
or has violated this subsection, or any other pro-
vision of this Act (including any rule, regula-
tion, or order of the Commission promulgated in 
accordance with this subsection or any other pro-
vision of this Act), the Commission may serve 
upon the person a complaint. 
‘‘(B) CONTENTS
OF
COMPLAINT.—A com-
plaint under subparagraph (A) shall— 
‘‘(i) contain a description of the 
charges against the person that is the sub-
ject of the complaint; and
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‘‘(ii) have attached or contain a notice 
of hearing that specifies the date and loca-
tion 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 per-
son, if registered with the Commission 
in any capacity, should not be sus-
pended or revoked; and 
‘‘(iii) may be held before— 
‘‘(I) the Commission; or
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‘‘(II) an administrative law judge 
designated by the Commission, under 
which the administrative law judge 
shall ensure that all evidence is re-
corded in written form and submitted 
to the Commission. 
‘‘(5) SUBPOENA.—For the purpose of securing ef-
fective 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) of this Act, any member 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, subpoena witnesses, compel their 
attendance, take evidence, and require the production 
of any books, papers, correspondence, memoranda, or 
other records that the Commission deems relevant or 
material to the inquiry. 
‘‘(6) WITNESSES.—The attendance of witnesses 
and the production of any such records may be re-
quired from any place in the United States, any 
State, or any foreign country or jurisdiction at any 
designated place of hearing.
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‘‘(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 Fed-
eral Rules of Civil Procedure prescribe 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 Commission. 
‘‘(8) REFUSAL TO OBEY.—In case of contumacy 
by, or refusal to obey a subpoena issued to, any per-
son, 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, memo-
randa, and other records. Such court may issue an 
order requiring such person to appear before the Com-
mission 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.
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‘‘(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 transacts business or wher-
ever such person may be found. 
‘‘(10) EVIDENCE.—On the receipt of evidence 
under paragraph (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 privi-
leges 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 pe-
riod not to exceed 180 days, or revoke, the reg-
istration 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
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‘‘(ii) in any case of manipulation or 
attempted manipulation in violation of this 
subsection or section 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 proximately caused by violations of the 
person. 
‘‘(11) ORDERS.— 
‘‘(A) NOTICE.—The Commission shall pro-
vide to a person described in paragraph (10) 
and the appropriate governing board of the reg-
istered 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
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determined to be appropriate by a court de-
scribed 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 carries out the business of 
the petitioner; or 
‘‘(II) in the case of an order deny-
ing registration, the circuit in which 
the principal place of business of the 
petitioner is located, as listed on the 
application for registration of the peti-
tioner. 
‘‘(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 ac-
cordance with section 2112 of title 28,
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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 appro-
priate court described in subparagraph 
(B)(ii) shall have jurisdiction to affirm, set 
aside, or modify the order of the Commis-
sion, and the findings of the Commission as 
to the facts, if supported by the weight of 
evidence, shall in like manner be conclu-
sive.’’. 
(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 provi-
sions of this Act or of the rules, regulations, or orders of 
the Commission thereunder, the Commission may, upon no-
tice and hearing, and subject to appeal as in other cases 
provided for in subsection (c), make and enter an order di-
recting that such person shall cease and desist therefrom 
and, if such person thereafter and after the lapse of the pe-
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riod allowed for appeal of such order or after the affirmance 
of such order, shall fail or refuse to obey or comply with 
such order, such person shall be guilty of a misdemeanor 
and, 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 less than six months nor more 
than one year, or both, except that if such failure or refusal 
to obey or comply with such order involves any offense with-
in subsection (a) or (b) of section 9 of this Act, such person 
shall be guilty of a felony and, upon conviction thereof, shall 
be subject to the penalties of said subsection (a) or (b): Pro-
vided, That any such cease and desist order under this sub-
section against any respondent in any case of manipulation 
shall be issued only in conjunction with an order issued 
against such respondent under subsection (c). Each day 
during which such failure or refusal to obey or comply with 
such order continues shall be deemed a separate offense.’’. 
(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 in-
serting the following: 
‘‘(D) who purchased or sold a contract re-
ferred to in subparagraph (B) hereof or swap if 
the violation constitutes—
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‘‘(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 com-
modity, in interstate commerce, or for fu-
ture delivery on or subject to the rules of 
any registered entity, any manipulative de-
vice 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 Restoring 
American Financial Stability Act of 2010; 
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 promul-
gated by the Commodity Futures Trading Commis-
sion pursuant to this Act takes effect. 
(2) Paragraph (1) shall not preclude the Com-
mission from undertaking prior to the effective date 
any rulemaking necessary to implement the amend-
ments contained in this section.
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SEC. 754. EFFECTIVE DATE. 
Unless otherwise provided in this title, this subtitle 
shall take effect on the date that is 180 days after the date 
of enactment of this Act. 
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 Ex-
change Act of 1934 (15 U.S.C. 78c(a)) is amended— 
(1) in subparagraphs (A) and (B) of paragraph 
(5), by inserting ‘‘(not including security-based 
swaps, other than security-based swaps with or for 
persons that are not eligible contract 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 in-
clude the execution, termination (prior to its sched-
uled 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 in-
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clude the execution, termination (prior to its sched-
uled 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 ‘‘se-
curity-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 par-
ticipant’’; and 
(C) in subparagraph (D), by inserting ‘‘se-
curity-based swap dealer, major security-based 
swap participant,’’ after ‘‘government securities 
dealer,’’; and
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(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
PARTICI-
PANT.— 
‘‘(A) IN GENERAL.—The term ‘major secu-
rity-based swap participant’ means any per-
son— 
‘‘(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 determined by the Com-
mission, excluding— 
‘‘(aa) positions held for hedging 
or mitigating commercial risk; and 
‘‘(bb) positions maintained by 
any employee benefit plan (or any con-
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tract held by such a plan), as that 
term is defined in paragraphs (3) and 
(32) of section 3 of the Employee Re-
tirement Income Security Act of 1974 
(29 U.S.C. 1002), for the primary pur-
pose of hedging or mitigating any risk 
directly associated with the operation 
of the plan; 
‘‘(II) whose outstanding security-based 
swaps create substantial counterparty expo-
sure that could have serious adverse effects 
on the financial stability of the United 
States banking system or financial markets; 
or 
‘‘(III) that is a financial entity that— 
‘‘(aa) is highly leveraged relative 
to the amount of capital such entity 
holds; and 
‘‘(bb) maintains a substantial po-
sition in outstanding security-based 
swaps in any major security-based 
swap category, as such categories are 
determined by the Commission. 
‘‘(B) DEFINITION
OF
SUBSTANTIAL
POSI-
TION.—For purposes of subparagraph (A), the
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Commission shall define, by rule or regulation, 
the term ‘substantial position’ at the threshold 
that the Commission determines to be prudent 
for the effective monitoring, management, and 
oversight of entities that are systemically impor-
tant or can significantly impact the financial 
system of the United States. 
‘‘(C) SCOPE
OF
DESIGNATION.—For pur-
poses of subparagraph (A), a person may be des-
ignated as a major security-based swap partici-
pant for 1 or more categories of security-based 
swaps without being classified as a major secu-
rity-based swap participant for all classes of se-
curity-based swaps. 
‘‘(D) CAPITAL.—In setting capital require-
ments for a person that is designated as 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 as-
sociated 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
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person by virtue of the status of the person as a 
major security-based swap participant. 
‘‘(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 Ex-
change Act; and 
‘‘(ii) is based on— 
‘‘(I) an index that is a narrow- 
based security index, including any in-
terest therein or on the value thereof; 
‘‘(II) a single security or loan, in-
cluding any interest therein or on the 
value thereof; or 
‘‘(III) the occurrence, nonoccur-
rence, or extent of the occurrence of an 
event relating to a single issuer of a se-
curity or the issuers of securities in a 
narrow-based security index, provided 
that such event directly affects the fi-
nancial statements, financial condi-
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† HR 4173 PP
tion, or financial obligations of the 
issuer. 
‘‘(B) RULE OF CONSTRUCTION REGARDING 
MASTER AGREEMENTS.—The term ‘security-based 
swap’ shall be construed to include a master 
agreement that provides for an agreement, con-
tract, or transaction that is a security-based 
swap pursuant to subparagraph (A), together 
with all supplements to any such master agree-
ment, without regard to whether the master 
agreement contains an agreement, 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 se-
curity-based swap only with respect to each 
agreement, contract, or transaction under the 
master agreement that is a security-based swap 
pursuant to subparagraph (A). 
‘‘(C) 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 agree-
ment, contract, or transaction references, is based 
upon, or settles through the transfer, delivery, or 
receipt of an exempted security under paragraph
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(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 Fu-
tures Trading Act of 1982), unless such agree-
ment, contract, or transaction is of the character 
of, or is commonly 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, quantitative 
measures, other financial or economic interest or 
property of any kind (other than a single secu-
rity or a narrow-based security index), or the oc-
currence, non-occurrence, or the extent of the oc-
currence of an event or contingency associated 
with a potential financial, economic, or commer-
cial consequence (other than an event described 
in subparagraph (A)(ii)(III)). 
‘‘(69) SWAP.—The term ‘swap’ has the same 
meaning as in section 1a of the Commodity Exchange 
Act (7 U.S.C. 1a).
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‘‘(70) PERSON ASSOCIATED WITH A SECURITY- 
BASED
SWAP
DEALER
OR
MAJOR
SECURITY-BASED 
SWAP PARTICIPANT.— 
‘‘(A) IN GENERAL.—The term ‘person asso-
ciated with a security-based swap dealer or 
major security-based swap participant’ or ‘asso-
ciated person of a security-based swap dealer or 
major security-based swap participant’ means— 
‘‘(i) any partner, officer, director, or 
branch manager of such security-based swap 
dealer or major security-based swap partici-
pant (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 security-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 secu-
rity-based swap participant’ or ‘associated per-
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son of a security-based swap dealer or major se-
curity-based swap participant’ does not include 
any person associated with a security-based 
swap dealer or major security-based swap partic-
ipant whose functions are solely clerical or min-
isterial. 
‘‘(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 engages in the pur-
chase and sale of security-based swaps in 
the ordinary course of a business; or 
‘‘(iv) engages in any activity causing 
it to be commonly known in the trade as a 
dealer or market maker in security-based 
swaps. 
‘‘(B) DESIGNATION BY TYPE OR CLASS.—A 
person may be designated 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
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for other types, classes, or categories of security- 
based swaps or activities. 
‘‘(C) CAPITAL.—In setting capital require-
ments for a person that is designated as a secu-
rity-based swap dealer for a single type or single 
class or category of security-based swap or ac-
tivities, the prudential regulator and the Com-
mission shall take into account the risks associ-
ated with other types of security-based swaps or 
classes of security-based swaps or categories of se-
curity-based swaps engaged in and the other ac-
tivities conducted by that person that are not 
otherwise subject to regulation applicable to that 
person by virtue of the status of the person as a 
security-based swap dealer. 
‘‘(72) APPROPRIATE
FEDERAL
BANKING
AGEN-
CY.—The term ‘appropriate Federal banking agency’ 
has the same meaning as in section 3(q) of the Fed-
eral Deposit Insurance Act (12 U.S.C. 1813(q)). 
‘‘(73) BOARD.—The term ‘Board’ means the 
Board of Governors of the Federal Reserve System. 
‘‘(74) 
PRUDENTIAL
REGULATOR.—The 
term 
‘prudential regulator’ has the same meaning as in 
section 1a of the Commodity Exchange Act (7 U.S.C. 
1a).
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‘‘(75) SECURITY-BASED
SWAP
DATA
REPOSI-
TORY.—The term ‘security-based swap data reposi-
tory’ means any person that collects, calculates, pre-
pares, or maintains information or records with re-
spect to transactions or positions in, or the terms and 
conditions of, security-based swaps entered into by 
third parties. 
‘‘(76) SWAP DEALER.—The term ‘swap dealer’ 
has the same meaning as in section 1a of the Com-
modity Exchange Act (7 U.S.C. 1a). 
‘‘(77) SWAP
EXECUTION
FACILITY.—The term 
‘swap execution facility’ means a facility in which 
multiple participants have the ability to execute or 
trade security-based swaps by accepting bids and of-
fers made by other participants that are open to mul-
tiple participants in the facility or system, or con-
firmation facility, that— 
‘‘(A) facilitates the execution of security- 
based swaps between persons; and 
‘‘(B) is not a designated contract market. 
‘‘(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
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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 inter-
est therein. 
‘‘(B) EXCLUSIONS.—The term ‘security- 
based swap agreement’ does not include any se-
curity-based swap.’’. 
(b) AUTHORITY TO FURTHER DEFINE TERMS.—The 
Securities and Exchange Commission may, by rule, further 
define 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 trans-
actions and entities that have been structured to evade this 
subtitle or the amendments made by this subtitle. 
(c) OTHER INCORPORATED DEFINITIONS.—Except as 
the context otherwise requires, in this subtitle, the terms 
‘‘prudential regulator’’, ‘‘swap’’, ‘‘swap dealer’’, ‘‘major 
swap participant’’, ‘‘swap data repository’’, ‘‘associated 
person of a swap dealer or major swap participant’’, ‘‘eligi-
ble contract participant’’, ‘‘swap execution facility’’, ‘‘secu-
rity-based swap’’, ‘‘security-based swap dealer’’, ‘‘major se-
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curity-based swap participant’’, ‘‘security-based swap data 
repository’’, and ‘‘associated person of a security-based 
swap dealer or major security-based swap participant’’ 
have the same meanings as in section 1a of the Commodity 
Exchange Act (7 U.S.C. 1a), as amended by this Act. 
SEC. 762. REPEAL OF PROHIBITION ON REGULATION OF SE-
CURITY-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 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 subsection; 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)—
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(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’’. 
(c) CONFORMING AMENDMENTS TO THE SECURITIES 
EXCHANGE ACT OF 1934.—The Securities Exchange Act of 
1934 (15 U.S.C. 78a et seq.) is amended— 
(1) in section 3A (15 U.S.C. 78c–1)— 
(A) by striking subsection (a) and reserving 
that subsection; 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 para-
graphs (2) through (5) and inserting the fol-
lowing: 
‘‘(2) To effect, alone or with 1 or more other persons, 
a series of transactions in any security registered on a na-
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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 se-
curity, 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. 
‘‘(5) For a consideration, received directly or indi-
rectly from a broker, dealer, security-based swap dealer, 
major security-based swap participant, or other person sell-
ing 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 security, to induce the pur-
chase of any security registered on a national securities ex-
change, 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 in-
formation to the effect that the price of any such security 
will or is likely to rise or fall because of the market oper-
ations of any 1 or more persons conducted for the purpose 
of raising or depressing the price of such security.’’; and
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(B) in subsection (i), by striking ‘‘(as de-
fined 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 de-
fined 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)’’; 
(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 sub-
section (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 Fu-
tures Modernization Act of 2000 (Public Law 
106–554; 114 Stat. 2763A–455)), as subsection 
(j); and
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(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 de-
fined 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 de-
fined in section 206B of the Gramm-Leach-Bliley 
Act)’’; and
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(B) in subsection (f), by striking ‘‘(as de-
fined in section 206B of the Gramm-Leach-Bliley 
Act)’’; 
(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 
(B) in subsection (g), by striking ‘‘(as de-
fined 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 Se-
curities 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) CLEARING REQUIREMENT.— 
‘‘(1) SUBMISSION.— 
‘‘(A) IN GENERAL.—Except as provided in 
paragraphs (9) and (10), any person who is a 
party to a security-based swap shall submit such 
security-based swap for clearing to a clearing 
agency registered under section 17A of this title.
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‘‘(B) OPEN ACCESS.—The rules of a reg-
istered clearing agency shall— 
‘‘(i) prescribe that all security-based 
swaps with the same terms and conditions 
are economically equivalent and may be off-
set with each other within the clearing 
agency; and 
‘‘(ii) provide for nondiscriminatory 
clearing of a security-based swap executed 
bilaterally or on or through the rules of an 
unaffiliated national securities exchange or 
swap execution facility, subject to the re-
quirements of section 5(b). 
‘‘(2) COMMISSION APPROVAL.— 
‘‘(A) IN GENERAL.—A clearing agency shall 
submit to the Commission for prior approval 
any group, category, type, or class of security- 
based swaps that the clearing agency seeks to ac-
cept for clearing, which submission the Commis-
sion shall make available to the public. 
‘‘(B) DEADLINE.—The Commission shall 
take final action on a request submitted pursu-
ant to subparagraph (A) not later than 90 days 
after submission of the request, unless the clear-
ing agency submitting the request agrees to an
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extension of the time limitation established under 
this subparagraph. 
‘‘(C) APPROVAL.—The Commission shall 
approve, unconditionally or subject to such terms 
and conditions as the Commission determines to 
be appropriate, any request submitted pursuant 
to subparagraph (A) if the Commission finds 
that the request is consistent with the require-
ments of section 17A. The Commission shall not 
approve any such request if the Commission does 
not make such finding. 
‘‘(D) RULES.—The Commission shall adopt 
rules for a clearing agency’s submission for ap-
proval, pursuant to this paragraph, of any 
group, category, type, or class of security-based 
swaps that the clearing agency seeks to accept for 
clearing. 
‘‘(3) STAY OF CLEARING REQUIREMENT.—At any 
time after issuance of an approval pursuant to para-
graph (2): 
‘‘(A) REVIEW PROCESS.—The Commission, 
on application of a counterparty to a security- 
based swap or on its own initiative, may stay 
the clearing requirement of paragraph (1) until 
the Commission completes a review of the terms
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of the security-based swap, or the group, cat-
egory, type, or class of security-based swaps, and 
the clearing arrangement. 
‘‘(B) DEADLINE.—The Commission shall 
complete a review undertaken pursuant to sub-
paragraph (A) not later than 90 days after 
issuance of the stay, unless the clearing agency 
that clears the security-based swap, or the group, 
category, type, or class of security-based swaps, 
agrees to an extension of the time limitation es-
tablished under this subparagraph. 
‘‘(C) DETERMINATION.—Upon completion of 
the review undertaken pursuant to subparagraph 
(A)— 
‘‘(i) the Commission may determine, 
unconditionally or subject to such terms 
and conditions as the Commission deter-
mines to be appropriate, that the security- 
based swap, or the group, category, type, or 
class of security-based swaps, must be 
cleared pursuant to this subsection if the 
Commission finds that such clearing— 
‘‘(I) is consistent with the require-
ments of section 17A; and
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‘‘(II) is otherwise in the public in-
terest, for the protection of investors, 
and consistent with the purposes of 
this title; 
‘‘(ii) the Commission may determine 
that the clearing requirement of paragraph 
(1) shall not apply to the security-based 
swap, or the group, category, type, or class 
of security-based swaps; or 
‘‘(iii) if a determination is made that 
the clearing requirement of paragraph (1) 
shall no longer apply, then the Commission 
may still permit such security-based swap, 
or the group, category, type, or class of secu-
rity-based swaps to be cleared. 
‘‘(D) RULES.—The Commission shall adopt 
rules for reviewing, pursuant to this paragraph, 
a clearing agency’s clearing of a security-based 
swap, or a group, category, type, or class of secu-
rity-based swaps that the Commission has ac-
cepted for clearing. 
‘‘(4) SECURITY-BASED SWAPS REQUIRED TO BE 
ACCEPTED FOR CLEARING.— 
‘‘(A) RULEMAKING.—The Commission shall 
adopt rules to further identify any group, cat-
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egory, type, or class of security-based swaps not 
submitted for approval under paragraph (2) that 
the Commission deems should be accepted for 
clearing. In adopting such rules, the Commission 
shall take into account the following factors: 
‘‘(i) The extent to which any of the 
terms of the group, category, type, or class 
of security-based swaps, including price, are 
disseminated to third parties or are ref-
erenced in other agreements, contracts, or 
transactions. 
‘‘(ii) The volume of transactions in the 
group, category, type, or class of security- 
based swaps. 
‘‘(iii) The extent to which the terms of 
the group, category, type, or class of secu-
rity-based swaps are similar to the terms of 
other agreements, contracts, or transactions 
that are cleared. 
‘‘(iv) Whether any differences in the 
terms of the group, category, type, or class 
of security-based swaps, compared to other 
agreements, contracts, or transactions that 
are cleared, are of economic significance.
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‘‘(v) Whether a clearing agency is pre-
pared to clear the group, category, type, or 
class of security-based swaps and such 
clearing agency has in place effective risk 
management systems. 
‘‘(vi) Any other factor the Commission 
determines to be appropriate. 
‘‘(B) OTHER DESIGNATIONS.—At any time 
after the adoption of the rules required under 
subparagraph (A), the Commission may sepa-
rately designate a particular security-based swap 
or class of security-based swaps as subject to the 
clearing requirement of paragraph (1), taking 
into account the factors established in clauses (i) 
through (vi) of subparagraph (A) and the rules 
adopted in such subparagraph. 
‘‘(C) IN
GENERAL.—In accordance with 
subparagraph (A), the Commission shall, con-
sistent with the public interest, adopt rules 
under the expedited process described in subpara-
graph (D) to establish criteria for determining 
that a swap, or any group, category, type, or 
class of swap is required to be cleared. 
‘‘(D) EXPEDITED
RULEMAKING
AUTHOR-
ITY.—
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‘‘(i) PROCEDURE.—The promulgation 
of regulations under subparagraph (A) may 
be made without regard to— 
‘‘(I) the notice and comment pro-
visions of section 553 of title 5, United 
States Code; and 
‘‘(II) chapter 35 of title 44, 
United States Code (commonly known 
as the ‘Paperwork Reduction Act’). 
‘‘(ii) AGENCY
RULEMAKING.—In car-
rying out subparagraph (A), the Commis-
sion shall use the authority provided under 
section 808 of title 5, United States Code. 
‘‘(5) PREVENTION OF EVASION.— 
‘‘(A) IN GENERAL.—The Commission shall 
have authority to prescribe rules under this sec-
tion, or issue interpretations of such rules, as 
necessary to prevent evasions of this section. 
‘‘(B) DUTY OF COMMISSION TO INVESTIGATE 
AND TAKE CERTAIN 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
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group, category, type, or class of security-based 
swaps for clearing, the Commission shall— 
‘‘(i) investigate the relevant facts and 
circumstances; 
‘‘(ii) within 30 days issue a public re-
port containing the results of the investiga-
tion; and 
‘‘(iii) take such actions as the Commis-
sion determines to be necessary and in the 
public interest, which may include requir-
ing the retaining of adequate margin or 
capital by parties to the security-based 
swap or the group, category, type, or class 
of security-based swaps. 
‘‘(C) EFFECT ON AUTHORITY.—Nothing in 
this paragraph— 
‘‘(i) authorize the Commission to re-
quire a clearing agency to list for clearing 
a security-based swap or any group, cat-
egory, type, or class of security-based swaps 
if the clearing of the security-based swap or 
the group, category, type, or class of secu-
rity-based swaps would adversely affect the 
business operations of the clearing agency, 
threaten the financial integrity of the clear-
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ing agency, or pose a systemic risk to the 
clearing agency; and 
‘‘(ii) affect the authority of the Com-
mission to enforce the open access provisions 
of paragraph (1) 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. 
‘‘(6) REQUIRED REPORTING.— 
‘‘(A) 
BOTH
COUNTERPARTIES.—Both 
counterparties to a security-based swap that is 
not cleared by any clearing agency shall report 
such a security-based swap either to a registered 
security-based swap repository described in sec-
tion 13(n) or, if there is no repository that 
would accept the security-based swap, to the 
Commission pursuant to section 13A. 
‘‘(B) TIMING.—Counterparties to a secu-
rity-based swap shall submit the reports required 
under subparagraph (A) not later than such time 
period as the Commission may by rule or regula-
tion prescribe. 
‘‘(7) TRANSITION RULES.— 
‘‘(A) REPORTING
TRANSITION
RULES.— 
Rules adopted by the Commission under this sec-
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tion shall provide for the reporting of data, as 
follows: 
‘‘(i) Security-based swaps entered into 
before the date of the enactment of this sec-
tion shall be reported to a registered secu-
rity-based swap repository or the Commis-
sion not later than 180 days after the effec-
tive date of this section. 
‘‘(ii) Security-based swaps entered into 
on or after such date of enactment shall be 
reported to a registered security-based swap 
repository or the Commission not later than 
the later of— 
‘‘(I) 90 days after such effective 
date; or 
‘‘(II) such other time after enter-
ing into the security-based swap as the 
Commission may prescribe by rule or 
regulation. 
‘‘(B) CLEARING TRANSITION RULES.— 
‘‘(i) Security-based swaps entered into 
before the date of the enactment of this sec-
tion are exempt from the clearing require-
ments of this subsection if reported pursu-
ant to subparagraph (A)(i).
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‘‘(ii) Security-based swaps entered into 
before application of the clearing require-
ment pursuant to this section are exempt 
from the clearing requirements of this sec-
tion if reported pursuant to subparagraph 
(A)(ii). 
‘‘(8) TRADE EXECUTION.— 
‘‘(A) IN GENERAL.—With respect to trans-
actions involving security-based swaps subject to 
the clearing requirement of paragraph (1), 
counterparties shall— 
‘‘(i) execute the transaction on an ex-
change; or 
‘‘(ii) execute the transaction on a swap 
execution facility registered under section 
3D or a swap execution facility that is ex-
empt from registration under section 3D(e). 
‘‘(B) EXCEPTION.—The requirements of 
clauses (i) and (ii) of subparagraph (A) shall not 
apply— 
‘‘(i) if no national securities exchange 
or security-based swap execution facility 
makes the security-based swap available to 
trade; or
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† HR 4173 PP
‘‘(ii) to swap transactions where a 
commercial end user opts to use the clearing 
exemption under paragraph (10). 
‘‘(9) REQUIRED EXEMPTION.—Subject to para-
graph (4), the Commission shall exempt a security- 
based swap from the requirements of paragraphs (1) 
and (8) and any rules issued under this subsection, 
if no clearing agency registered under this Act will 
accept the security-based swap from clearing. 
‘‘(10) END USER CLEARING EXEMPTION.— 
‘‘(A) DEFINITION
OF
COMMERCIAL
END 
USER.— 
‘‘(i) IN GENERAL.—In this paragraph, 
the term ‘commercial end user’ means any 
person other than a financial entity de-
scribed in clause (ii) who, as its primary 
business activity, owns, uses, produces, 
processes, manufactures, distributes, mer-
chandises, or markets services or commod-
ities (which shall include coal, natural gas, 
electricity, ethanol, crude oil, distillates, 
and other hydrocarbons) either individually 
or in a fiduciary capacity. 
‘‘(ii) FINANCIAL
ENTITY.—The term 
‘financial entity’ means—
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‘‘(I) a swap dealer, major swap 
participant, security-based swap deal-
er, or major security-based swap par-
ticipant; 
‘‘(II) a person predominantly en-
gaged in activities that are in the busi-
ness of banking or financial in nature, 
as defined in Section 4(k) of the Bank 
Holding Company Act of 1956; 
‘‘(III) a person predominantly en-
gaged in activities that are financial 
in nature; 
‘‘(IV) a private fund as defined in 
section 202(a) of the Investment Advis-
ers Act of 1940 (15 U.S.C. 80b–2(a)) 
or a commodity pool as defined in sec-
tion 1a of the Commodity Exchange 
Act (7 U.S.C. 1a); or 
‘‘(V) a person that is registered or 
required to be registered with the Com-
mission, but does not include a public 
company which registers its securities 
with the Commission. 
‘‘(B) END USER CLEARING EXEMPTION.—
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† HR 4173 PP
‘‘(i) IN
GENERAL.—Subject to clause 
(ii), in the event that a security-based swap 
is subject to the mandatory clearing require-
ment under paragraph (1), and 1 of the 
counterparties to the security-based swap is 
a commercial end user that counterparty— 
‘‘(I)(aa) may elect not to clear the 
security-based swap, as required under 
paragraph (1); or 
‘‘(bb) may elect to require clearing 
of the security-based swap; and 
‘‘(II) if the end user makes an 
election under subclause (I)(bb), shall 
have the sole right to select the clearing 
agency at which the security-based 
swap will be cleared. 
‘‘(ii) LIMITATION.—A commercial end 
user may only make an election under 
clause (i) if the end user is using the secu-
rity-based swap to hedge its own commer-
cial risk. 
‘‘(C) TREATMENT OF AFFILIATES.— 
‘‘(i) IN GENERAL.—An affiliate of a 
commercial end user (including affiliate en-
tities predominantly engaged in providing
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financing for the purchase of the merchan-
dise or manufactured goods of the commer-
cial end user) may make an election under 
subparagraph (B)(i) only if the affiliate, 
acting on behalf of the commercial end user 
and as an agent, uses the security-based 
swap to hedge or mitigate the commercial 
risk of the commercial end user parent or 
other affiliates of the commercial end user 
that is not a financial entity. 
‘‘(ii) PROHIBITION RELATING TO CER-
TAIN AFFILIATES.—An affiliate of a com-
mercial end user shall not use the exemption 
under subparagraph (B) if the affiliate is— 
‘‘(I) a security-based swap dealer; 
‘‘(II) a security-based security- 
based swap dealer; 
‘‘(III) 
a 
major 
security-based 
swap participant; 
‘‘(IV) a major security-based secu-
rity-based swap participant; 
‘‘(V) an issuer that would be an 
investment company, as defined in sec-
tion 3 of the Investment Company Act 
of 1940 (15 U.S.C. 80a–3), but for
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† HR 4173 PP
paragraph (1) or (7) of subsection (c) 
of that section 3 (15 U.S.C. 80a–3(c)); 
‘‘(VI) a commodity pool; 
‘‘(VII) a bank holding company 
with over $50,000,000,000 in consoli-
dated assets; or 
‘‘(VIII) an affiliate of any entity 
described in subclauses (I) through 
(VII). 
‘‘(iii) ABUSE
OF
EXEMPTION.—The 
Commission may prescribe such rules, or 
issue interpretations of the rules, as the 
Commission determines to be necessary to 
prevent abuse of the exemption described in 
subparagraph (B). 
‘‘(D) OPTION TO CLEAR.— 
‘‘(i) 
SECURITY-BASED
SWAPS
RE-
QUIRED
TO
BE
CLEARED
ENTERED
INTO 
WITH A FINANCIAL ENTITY.—With respect to 
any securities-based swap that is required 
to be cleared by a clearing agency and en-
tered into by a securities-based swap dealer 
or a major securities-based swap partici-
pant with a financial entity, the financial 
entity shall have the sole right to select the
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† HR 4173 PP
clearing agency at which the securities- 
based swap will be cleared. 
‘‘(ii) SECURITY-BASED SWAPS NOT RE-
QUIRED
TO
BE
CLEARED
ENTERED
INTO 
WITH A FINANCIAL ENTITY OR COMMERCIAL 
END USER.—With respect to any securities- 
based swap that is not required to be 
cleared by a clearing agency and entered 
into by a securities-based swap dealer or a 
major securities-based swap participant 
with a financial entity or commercial end 
user, the financial entity or commercial end 
user— 
‘‘(I) may elect to require clearing 
of the securities-based swap; and 
‘‘(II) shall have the sole right to 
select the clearing agency at which the 
securities-based swap will be cleared. 
‘‘(b) AUDIT
COMMITTEE
APPROVAL.—Exemptions 
from the requirements of this section to clear or trade 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 the issuer’s audit com-
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mittee has reviewed and approved the issuer’s decision to 
enter into security-based swaps that are subject to such ex-
emptions. 
‘‘(c) PUBLIC AVAILABILITY OF SECURITY-BASED SWAP 
TRANSACTION DATA.— 
‘‘(1) IN GENERAL.— 
‘‘(A) DEFINITION OF REAL-TIME PUBLIC RE-
PORTING.—In this paragraph, the term ‘real- 
time public reporting’ means to report data re-
lating to a security-based swap transaction as 
soon as technologically practicable after the time 
at which the security-based swap transaction has 
been executed. 
‘‘(B) PURPOSE.—The purpose of this section 
is to authorize the Commission to make security- 
based swap transaction and pricing data avail-
able to the public in such form and at such times 
as the Commission determines appropriate to en-
hance price discovery. 
‘‘(C) GENERAL RULE.—The Commission is 
authorized to provide by rule for the public 
availability of security-based swap transaction 
and pricing data as follows: 
‘‘(i) With respect to those security- 
based swaps that are subject to the manda-
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† HR 4173 PP
tory clearing requirement described in sub-
section (a)(1) (including those security- 
based swaps that are exempted from those 
requirements), 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 man-
datory clearing requirement described in 
subsection (a)(1), but are cleared at a reg-
istered clearing agency, the Commission 
shall require real-time public reporting for 
such transactions. 
‘‘(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 subsection (a), the Com-
mission shall make available to the public, 
in a manner that does not disclose the busi-
ness transactions and market positions of 
any person, aggregate data on such secu-
rity-based swap trading volumes and posi-
tions.
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† HR 4173 PP
‘‘(iv) With respect to security-based 
swaps that are exempt from the require-
ments of subsection (a)(1), but are subject to 
the requirements of subsection (a)(8), the 
Commission shall require real-time public 
reporting for such transactions. 
‘‘(D) REGISTERED
ENTITIES
AND
PUBLIC 
REPORTING.—The Commission may require reg-
istered entities to publicly disseminate the secu-
rity-based swap transaction and pricing data re-
quired to be reported under this paragraph. 
‘‘(E) RULEMAKING
REQUIRED.—With re-
spect to the rule providing for the public avail-
ability of transaction and pricing data for secu-
rity-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 deter-
mining what constitutes a large notional se-
curity-based swap transaction (block trade) 
for particular markets and contracts; 
‘‘(iii) to specify the appropriate time 
delay for reporting large notional security-
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based swap transactions (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 respon-
sible for reporting security-based swap trans-
action information to the appropriate registered 
entity in a timely manner as may be prescribed 
by the Commission. 
‘‘(2) SEMIANNUAL AND ANNUAL PUBLIC REPORT-
ING OF AGGREGATE SECURITY-BASED SWAP DATA.— 
‘‘(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 de-
velopments in new products.
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‘‘(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 Settlements, and such other 
regulatory bodies as may be necessary. 
‘‘(C) 
TRANSITION
RULE
FOR 
PREENACTMENT SECURITY-BASED SWAPS.— 
‘‘(i) SECURITY-BASED SWAPS ENTERED 
INTO BEFORE THE DATE OF ENACTMENT OF 
THE WALL STREET TRANSPARENCY AND AC-
COUNTABILITY ACT OF 2010.—Each security- 
based swap entered into before the date of 
enactment of the Wall Street Transparency 
and Accountability Act of 2010, the terms of 
which have not expired as of the date of en-
actment of that Act, shall be reported to a 
registered security-based swap data reposi-
tory or the Commission by a date that is 
not later than—
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‘‘(I) 30 days after the date of 
issuance of the interim final rule; or 
‘‘(II) such other period as the 
Commission determines to be appro-
priate. 
‘‘(ii) COMMISSION RULEMAKING.—The 
Commission shall promulgate an interim 
final rule within 90 days of the date of en-
actment of this section providing for the re-
porting of each security-based swap entered 
into before the date of enactment as ref-
erenced in clause (i). 
‘‘(D) EFFECTIVE DATE.—The reporting pro-
visions described in this paragraph shall be effec-
tive upon the date of enactment of this section. 
‘‘(d) DESIGNATION
OF CHIEF COMPLIANCE OFFI-
CER.— 
‘‘(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;
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‘‘(B) in consultation with its board, a body 
performing a function similar thereto, or the sen-
ior officer of the registered clearing agency, re-
solve any conflicts of interest that may arise; 
‘‘(C) be responsible for administering each 
policy and procedure that is required to be estab-
lished pursuant to this section; 
‘‘(D) ensure compliance with this title (in-
cluding regulations issued under this title) relat-
ing to agreements, contracts, or transactions, in-
cluding each rule prescribed by the Commission 
under this section; 
‘‘(E) establish procedures for the remedi-
ation of noncompliance issues identified by the 
compliance officer through any— 
‘‘(i) compliance office review; 
‘‘(ii) look-back; 
‘‘(iii) internal or external audit find-
ing; 
‘‘(iv) self-reported error; or 
‘‘(v) validated complaint; and 
‘‘(F) establish and follow appropriate proce-
dures for the handling, management response, re-
mediation, retesting, and closing of noncompli-
ance issues.
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‘‘(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 description of— 
‘‘(i) the compliance of the registered 
clearing agency or security-based swap exe-
cution 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 con-
flict of interest policies of the registered 
clearing agency). 
‘‘(B) REQUIREMENTS.—A compliance re-
port under subparagraph (A) shall— 
‘‘(i) accompany each appropriate fi-
nancial report of the registered clearing 
agency 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 ac-
curate and complete.’’.
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(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 un-
lawful for a clearing agency, unless registered with the 
Commission, directly or indirectly to make use of the mails 
or any means or instrumentality of interstate commerce to 
perform the functions of a clearing agency with respect to 
a security-based swap. 
‘‘(h) VOLUNTARY
REGISTRATION.—A person that 
clears agreements, 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 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 de-
termines otherwise by rule or regulation, a clearing agency
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shall have reasonable discretion in establishing the manner 
in which it complies with any such standards. 
‘‘(j) RULES.—The Commission shall adopt rules gov-
erning persons that are registered as clearing agencies for 
security-based swaps under this title. 
‘‘(k) EXEMPTIONS.— 
‘‘(1) IN
GENERAL.—The Commission may ex-
empt, conditionally or unconditionally, a clearing 
agency from registration under this section for the 
clearing of security-based swaps if the Commission 
determines that the clearing agency is subject to com-
parable, comprehensive supervision and regulation by 
the Commodity Futures Trading Commission or the 
appropriate government authorities in the home coun-
try of the agency. Such conditions may include, but 
are not limited to, requiring that the clearing agency 
be available for inspection by the Commission and 
make available all information requested by the Com-
mission. 
‘‘(2) DERIVATIVES CLEARING ORGANIZATIONS.— 
A person that is required to be registered as a deriva-
tives clearing organization under the Commodity Ex-
change Act, whose principal business is clearing com-
modity futures and options on commodity futures 
transactions and swaps and which is a derivatives
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clearing organization registered with the Commodity 
Futures Trading Commission under the Commodity 
Exchange Act (7 U.S.C. 1 et seq.), shall be uncondi-
tionally exempt from registration under this section 
solely for the purpose of clearing security-based 
swaps, unless the Commission finds that such deriva-
tives clearing organization is not subject to com-
parable, comprehensive supervision and regulation by 
the Commodity Futures Trading Commission. 
‘‘(l) MODIFICATION OF CORE PRINCIPLES.—The Com-
mission may conform the core principles established in this 
section to reflect evolving United States and international 
standards.’’. 
(c) SECURITY-BASED SWAP EXECUTION FACILITIES.— 
The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) 
is amended by inserting after section 3C (as added by sub-
section (a) of this section) the following: 
‘‘SEC. 3D. SECURITY-BASED SWAP EXECUTION FACILITIES. 
‘‘(a) REGISTRATION.— 
‘‘(1) IN GENERAL.—No person may operate a fa-
cility 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 securi-
ties exchange under this section.
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‘‘(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 sub-
section (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 EX-
CHANGES.—A national securities exchange shall, to the ex-
tent that the exchange also operates a security-based swap 
execution facility and uses the same electronic trade execu-
tion 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.—
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‘‘(1) COMPLIANCE WITH CORE PRINCIPLES.— 
‘‘(A) IN GENERAL.—To be registered, and 
maintain registration, as a security-based swap 
execution facility, the security-based swap execu-
tion facility shall comply with— 
‘‘(i) the core principles described in 
this subsection; and 
‘‘(ii) any requirement that the Com-
mission may impose by rule or regulation. 
‘‘(B) REASONABLE
DISCRETION
OF
SECU-
RITY-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 de-
scribed in this subsection. 
‘‘(2) COMPLIANCE
WITH
RULES.—A security- 
based swap execution facility shall— 
‘‘(A) monitor and enforce compliance with 
any rule established by such security-based swap 
execution facility, including— 
‘‘(i) the terms and conditions of the se-
curity-based swaps traded or processed on 
or through the facility; and
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‘‘(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, in-
vestigate, 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 viola-
tions have occurred; and 
‘‘(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 SUS-
CEPTIBLE
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 PROC-
ESSING.—The security-based swap execution facility 
shall—
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‘‘(A) establish and enforce rules or terms 
and conditions defining, or specifications detail-
ing— 
‘‘(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 fa-
cilities 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 
reconstructions. 
‘‘(5) ABILITY TO OBTAIN INFORMATION.—The se-
curity-based swap execution facility shall— 
‘‘(A) establish and enforce rules that will 
allow the facility to obtain any necessary infor-
mation to perform any of the functions described 
in this subsection;
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‘‘(B) provide the information to the Com-
mission on request; and 
‘‘(C) have the capacity to carry out such 
international information-sharing agreements as 
the Commission may require. 
‘‘(6) POSITION LIMITS OR ACCOUNTABILITY.— 
‘‘(A) IN GENERAL.—To reduce the potential 
threat of market manipulation or congestion, es-
pecially during trading in the delivery month, a 
security-based swap execution facility that is a 
trading facility shall adopt for each of the con-
tracts of the facility, as is necessary and appro-
priate, position limitations or position account-
ability for speculators. 
‘‘(B) POSITION LIMITS.—For any contract 
or agreement that is subject to a position limita-
tion established by the Commission pursuant to 
section 10B, the security-based swap execution 
facility shall set its position limitation at a level 
no higher than the limitation established by the 
Commission. 
‘‘(C) POSITION
ENFORCEMENT.—For any 
contract or agreement that is subject to a posi-
tion limitation established by the Commission 
pursuant to section 10B, a security-based swap
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† HR 4173 PP
execution facility shall reject any proposed secu-
rity-based swap transaction if, based on infor-
mation readily available to a security-based 
swap execution facility, any proposed security- 
based swap transaction would cause a security- 
based swap execution facility customer that 
would be a party to such swap transaction to ex-
ceed such position limitation. 
‘‘(7) FINANCIAL INTEGRITY OF TRANSACTIONS.— 
The security-based swap execution facility shall estab-
lish 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 settle-
ment of security-based swaps pursuant to section 
3C(a)(1). 
‘‘(8) EMERGENCY
AUTHORITY.—The security- 
based swap execution facility shall adopt rules to pro-
vide for the exercise of emergency authority, in con-
sultation 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 se-
curity-based swap.
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‘‘(9) TIMELY PUBLICATION OF TRADING INFOR-
MATION.— 
‘‘(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 ex-
tent 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 trade informa-
tion with respect to transactions executed on the 
facility. 
‘‘(10) 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, in-
cluding a complete audit trail, in a form 
and manner acceptable to the Commission 
for a period of 5 years; and 
‘‘(ii) report to the Commission, in a 
form and manner acceptable to the Commis-
sion, such information as the Commission 
determines to be necessary or appropriate
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for the Commission to perform the duties of 
the Commission under this title. 
‘‘(B) 
REQUIREMENTS.—The 
Commission 
shall adopt data collection and reporting re-
quirements for security-based swap execution fa-
cilities that are comparable to corresponding re-
quirements for clearing agencies and security- 
based swap data repositories. 
‘‘(11) ANTITRUST CONSIDERATIONS.—Unless nec-
essary 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. 
‘‘(12) CONFLICTS OF INTEREST.—The security- 
based swap execution facility shall— 
‘‘(A) establish and enforce rules to minimize 
conflicts of interest in its decision-making proc-
ess; and 
‘‘(B) establish a process for resolving the 
conflicts of interest. 
‘‘(13) FINANCIAL RESOURCES.—
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‘‘(A) 
IN
GENERAL.—The 
security-based 
swap execution facility shall have adequate fi-
nancial, operational, and managerial resources 
to discharge each responsibility of the security- 
based swap execution facility, as determined by 
the Commission. 
‘‘(B) DETERMINATION OF RESOURCE ADE-
QUACY.—The financial resources of a security- 
based swap execution facility shall be considered 
to be adequate if the value of the financial re-
sources— 
‘‘(i) enables the organization to meet 
its financial obligations to its members and 
participants notwithstanding a default by 
the member or participant creating the 
largest financial exposure for that organiza-
tion in extreme but plausible market condi-
tions; and 
‘‘(ii) exceeds the total amount that 
would enable the security-based swap execu-
tion facility to cover the operating costs of 
the security-based swap execution facility 
for a 1-year period, as calculated on a roll-
ing basis.
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‘‘(14) SYSTEM SAFEGUARDS.—The security-based 
swap execution facility shall— 
‘‘(A) establish and maintain a program of 
risk analysis and oversight to identify and mini-
mize sources of operational risk, through the de-
velopment of appropriate controls and proce-
dures, and automated systems, that— 
‘‘(i) are reliable and secure; and 
‘‘(ii) have adequate scalable capacity; 
‘‘(B) establish and maintain emergency pro-
cedures, backup facilities, and a plan for disaster 
recovery that are designed to allow for— 
‘‘(i) the timely recovery and resump-
tion of operations; and 
‘‘(ii) the fulfillment of the responsibil-
ities and obligation 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 contin-
ued— 
‘‘(i) order processing and trade match-
ing; 
‘‘(ii) price reporting; 
‘‘(iii) market surveillance; and
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† HR 4173 PP
‘‘(iv) maintenance of a comprehensive 
and accurate audit trail. 
‘‘(15) DESIGNATION OF CHIEF COMPLIANCE OFFI-
CER.— 
‘‘(A) IN
GENERAL.—Each security-based 
swap execution facility shall designate an indi-
vidual 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 offi-
cer of the facility, resolve any conflicts of 
interest that may arise; 
‘‘(iv) be responsible for establishing 
and administering the policies and proce-
dures required to be established pursuant to 
this section; 
‘‘(v) ensure compliance with this title 
and the rules and regulations issued under
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† HR 4173 PP
this title, including rules prescribed by the 
Commission pursuant to this section; 
‘‘(vi) establish procedures for the reme-
diation of noncompliance issues found dur-
ing— 
‘‘(I) compliance office reviews; 
‘‘(II) look backs; 
‘‘(III) internal or external audit 
findings; 
‘‘(IV) self-reported errors; or 
‘‘(V) 
through 
validated 
com-
plaints; 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 prescribed by the Commission, the 
chief compliance officer shall annually pre-
pare and sign a report that contains a de-
scription of— 
‘‘(I) the compliance of the secu-
rity-based swap execution facility with 
this title; and
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† HR 4173 PP
‘‘(II) the policies and procedures, 
including the code of ethics and con-
flict of interest policies, of the security- 
based security-based swap execution fa-
cility. 
‘‘(ii) REQUIREMENTS.—The chief com-
pliance officer shall— 
‘‘(I) submit each report described 
in clause (i) with the appropriate fi-
nancial report of the security-based 
swap execution facility that is required 
to be submitted to the Commission pur-
suant to this section; and 
‘‘(II) include in the report a cer-
tification 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.’’.
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† HR 4173 PP
(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 SECURITY-BASED SWAP TRANSACTIONS. 
‘‘(a) REGISTRATION REQUIREMENT.—It shall be un-
lawful for any person to accept any money, securities, or 
property (or to extend any credit in lieu of money, securi-
ties, or property) from, for, or on behalf of a security-based 
swaps customer or to margin, guarantee, or secure a secu-
rity-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 registration shall not have expired nor been 
suspended nor revoked. 
‘‘(b) CLEARED SECURITY-BASED SWAPS.— 
‘‘(1) SEGREGATION REQUIRED.—A broker, deal-
er, or security-based swap dealer shall treat and deal 
with all money, securities, and property of any secu-
rity-based swaps customer received to margin, guar-
antee, or secure a security-based swap cleared by or
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† HR 4173 PP
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, secu-
rities, and property of a security-based swaps cus-
tomer described in paragraph (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 any 
trades or contracts of any security-based swaps cus-
tomer or person other than the person for whom the 
same are held. 
‘‘(c) EXCEPTIONS.— 
‘‘(1) USE OF FUNDS.— 
‘‘(A) IN
GENERAL.—Notwithstanding sub-
section (b), money, securities, and property of a 
security-based swaps customer of a broker, deal-
er, or security-based swap dealer described in 
subsection (b) may, for convenience, be commin-
gled and deposited in the same 1 or more ac-
counts with any bank or trust company or with 
a clearing agency. 
‘‘(B) WITHDRAWAL.—Notwithstanding sub-
section (b), such share of the money, securities,
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† HR 4173 PP
and property described in subparagraph (A) as 
in the normal course of business shall be nec-
essary to margin, guarantee, secure, transfer, ad-
just, 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 com-
missions, 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 Commission may prescribe by rule, 
regulation, or order, any money, securities, or prop-
erty of the security-based swaps customer of a broker, 
dealer, or security-based swap dealer described in sub-
section (b) may be commingled and deposited as pro-
vided 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 cus-
tomer of the broker, dealer, or security-based swap 
dealer.
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† HR 4173 PP
‘‘(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 polit-
ical subdivision of a State, and in obligations fully guaran-
teed as to principal and interest by the United States, or 
in any other investment that the Commission 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 per-
son, including any clearing agency and any depository in-
stitution, that has received any money, securities, or prop-
erty for deposit in a separate account or accounts as pro-
vided 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 secu-
rity-based swap dealer.’’. 
(e) TRADING IN SECURITY-BASED SWAPS.—Section 6 
of the Securities Exchange Act of 1934 (15 U.S.C. 78f) is 
amended by adding at the end the following: 
‘‘(l) SECURITY-BASED SWAPS.—It shall be unlawful 
for any person to effect a transaction in a security-based 
swap with or for a person that is not an eligible contract 
participant, unless such transaction is effected on a na-
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† HR 4173 PP
tional securities exchange registered pursuant to subsection 
(b).’’. 
(f) ADDITIONS OF SECURITY-BASED SWAPS TO CER-
TAIN ENFORCEMENT PROVISIONS.—Section 9(b) of the Se-
curities Exchange Act of 1934 (15 U.S.C. 78i(b)) is amend-
ed by striking paragraphs (1) through (3) and inserting 
the following: 
‘‘(1) any transaction in connection with any se-
curity whereby any party to such transaction ac-
quires— 
‘‘(A) any put, call, straddle, or other option 
or privilege of buying the security from or selling 
the security to another without being bound to do 
so; 
‘‘(B) any security futures product on the se-
curity; or 
‘‘(C) any security-based swap involving the 
security or the issuer of the security; 
‘‘(2) any transaction in connection with any se-
curity with relation to which such person has, di-
rectly 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
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† HR 4173 PP
‘‘(3) any transaction in any security for the ac-
count of any person who such person has reason to 
believe has, and who actually has, directly or indi-
rectly, any interest in any— 
‘‘(A) such put, call, straddle, option, or 
privilege; 
‘‘(B) such security futures product with re-
lation to such security; or 
‘‘(C) any security-based swap involving 
such security or the issuer of such security.’’. 
(g) RULEMAKING AUTHORITY TO PREVENT FRAUD, 
MANIPULATION AND DECEPTIVE CONDUCT IN SECURITY- 
BASED SWAPS.—Section 9 of the Securities Exchange Act 
of 1934 (15 U.S.C. 78i) is amended by adding at the end 
the following: 
‘‘(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 manipula-
tive act or practice, makes any fictitious quotation, or en-
gages in any transaction, practice, or course of business 
which operates as a fraud or deceit upon any person. The
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Commission shall, for the purposes of this subsection, by 
rules and regulations define, and prescribe means reason-
ably designed to prevent, such transactions, acts, practices, 
and courses of business as are fraudulent, deceptive, or ma-
nipulative, and such quotations as are fictitious.’’. 
(h) POSITION LIMITS AND POSITION ACCOUNTABILITY 
FOR SECURITY-BASED SWAPS.—The Securities Exchange 
Act of 1934 is amended by inserting after section 10A (15 
U.S.C. 78j–1) the following: 
‘‘SEC. 10B. POSITION LIMITS AND POSITION ACCOUNT-
ABILITY FOR SECURITY-BASED SWAPS AND 
LARGE TRADER REPORTING. 
‘‘(a) POSITION LIMITS.—As a means reasonably de-
signed to prevent fraud and manipulation, the Commission 
shall, by rule or regulation, as necessary or appropriate in 
the public interest or for the protection of investors, estab-
lish 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 Com-
mission may require any person to aggregate positions 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 sec-
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† HR 4173 PP
tion 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 secu-
rities, 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 section 
3(a); and 
‘‘(B) any other instrument relating to the 
same security or group or index of securities de-
scribed under subparagraph (A). 
‘‘(b) EXEMPTIONS.—The Commission, by rule, regula-
tion, 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 requirement the Commission may 
establish under this section with respect to position limits. 
‘‘(c) SRO RULES.— 
‘‘(1) IN GENERAL.—As a means reasonably de-
signed to prevent fraud or manipulation, the Com-
mission, by rule, regulation, or order, as necessary or 
appropriate in the public interest, for the protection 
of investors, or otherwise in furtherance of the pur-
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† HR 4173 PP
poses of this title, may direct a self-regulatory organi-
zation— 
‘‘(A) to adopt rules regarding the size of po-
sitions in any security-based swap that may be 
held by— 
‘‘(i) any member of such self-regulatory 
organization; or 
‘‘(ii) any person for whom a member 
of such self-regulatory organization effects 
transactions in such security-based swap; 
and 
‘‘(B) to adopt rules reasonably designed to 
ensure compliance with requirements prescribed 
by the Commission under this subsection. 
‘‘(2) 
REQUIREMENT
TO
AGGREGATE
POSI-
TIONS.—In establishing 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 secu-
rity or loan or group or narrow-based security 
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 security-based swap is related as de-
scribed in section 3(a)(68), and any other in-
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† HR 4173 PP
strument relating to such security or loan or 
group or narrow-based security index of securi-
ties 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 securi-
ties. 
‘‘(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 pre-
scribe regarding any position or positions in any security- 
based swap or uncleared security-based swap and any secu-
rity or loan or group or narrow-based security index of se-
curities 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 SE-
CURITY-BASED SWAPS.—Section 13 of the Securities Ex-
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† HR 4173 PP
change Act of 1934 (15 U.S.C. 78m) is amended by adding 
at the end the following: 
‘‘(m) PUBLIC
AVAILABILITY
OF
SECURITY-BASED 
SWAP TRANSACTION DATA.— 
‘‘(1) IN GENERAL.— 
‘‘(A) DEFINITION OF REAL-TIME PUBLIC RE-
PORTING.—In this paragraph, the term ‘real- 
time public reporting’ means to report data re-
lating to a security-based swap transaction as 
soon as technologically practicable after the time 
at which the security-based swap transaction has 
been executed. 
‘‘(B) PURPOSE.—The purpose of this section 
is to authorize the Commission to make security- 
based swap transaction and pricing data avail-
able to the public in such form and at such times 
as the Commission determines appropriate to en-
hance price discovery. 
‘‘(C) GENERAL RULE.—The Commission is 
authorized to provide by rule for the public 
availability of security-based swap transaction 
and pricing data as follows: 
‘‘(i) With respect to those security- 
based swaps that are subject to the manda-
tory clearing requirement described in sec-
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† HR 4173 PP
tion 3C(a)(1) (including those security- 
based swaps that are exempted from the re-
quirement pursuant to section 3C(a)(10)), 
the Commission shall require real-time pub-
lic reporting for such transactions. 
‘‘(ii) With respect to those security- 
based swaps that are not subject to the man-
datory clearing requirement described in 
subsection section 3C(a)(1), but are cleared 
at a registered clearing agency, the Com-
mission shall require real-time public re-
porting for such transactions. 
‘‘(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), the Com-
mission shall make available to the public, 
in a manner that does not disclose the busi-
ness transactions and market positions of 
any person, aggregate data on such secu-
rity-based swap trading volumes and posi-
tions. 
‘‘(iv) With respect to security-based 
swaps that are exempt from the require-