106 
Prudential Regulators (as defined in section 1a(43) of the 
Commodity Exchange Act), the financial stability regu-
lator, and the Office of Derivatives Supervision shall con-
sult and coordinate with foreign regulatory authorities on 
the establishment of consistent international standards 
with respect to the regulation of swaps, and may agree 
to such information-sharing arrangements as may be 
deemed to be necessary or appropriate in the public inter-
est or for the protection of investors and swap counterpar-
ties. 
SEC. 135. AUTHORITY TO BAN ACCESS TO THE UNITED 
STATES FINANCIAL SYSTEM. 
The Secretary of the Treasury may prohibit any enti-
ty domiciled in a foreign country that regulates swaps (as 
defined in section 1a(35) of the Commodity Exchange Act) 
or security-based swaps (as defined in section 1a(38) of 
such Act) in a manner which the Secretary of the Treas-
ury finds undermines the stability of a financial market, 
from participating in such financial activities in the 
United States as the Secretary deems appropriate. 
SEC. 136. OTHER AUTHORITY. 
Unless otherwise provided by its terms, this title does 
not divest any appropriate Federal banking agency, the 
Commission, the Securities and Exchange Commission, or 
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107 
other Federal or State agency, of any authority derived 
from any other applicable law. 
SEC. 137. ANTITRUST. 
Nothing in the amendments made by this title shall 
be construed to modify, impair, or supersede the operation 
of any of the antitrust laws. For purposes of this subtitle, 
the term ‘‘antitrust laws’’ has the same meaning given 
such term in subsection (a) of the first section of the Clay-
ton Act, except that such term includes section 5 of the 
Federal Trade Commission Act to the extent that such 
section 5 applies to unfair methods of competition. 
SEC. 138. EFFECTIVE DATE. 
This subtitle is effective 180 days after the date of 
enactment. 
Subtitle B—Regulation of Security- 
Based Swap Markets 
SEC. 151. DEFINITIONS UNDER THE SECURITIES EX-
CHANGE ACT OF 1934. 
Section 3(a) of the Securities Exchange Act of 1934 
(15 U.S.C. 78c(a)) is amended— 
(1) in paragraph (5)(A) and (B), by inserting 
‘‘(but not security-based swaps, other than security- 
based swaps with or for persons that are not eligible 
contract participants)’’ after the word ‘‘securities’’ 
in each place it appears; 
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108 
(2) in paragraph (13), by adding at the end the 
following: ‘‘For security-based swaps, such terms in-
clude the execution, termination (prior to its sched-
uled maturity date), assignment, exchange, or simi-
lar transfer or conveyance of, or extinguishing of 
rights or obligations under, a security-based swap, 
as the context may require.’’; 
(3) in paragraph (14), by adding at the end the 
following: ‘‘For security-based swaps, such terms in-
clude the execution, termination (prior to its sched-
uled maturity date), assignment, exchange, or simi-
lar transfer or conveyance of, or extinguishing of 
rights or obligations under, a security-based swap, 
as the context may require.’’; 
(4) in paragraph (39)— 
(A) by striking ‘‘or government securities 
dealer’’ and adding ‘‘government securities 
dealer, security-based swap dealer or major se-
curity-based swap participant’’ in its place in 
subparagraph (B)(i)(I); 
(B) by adding ‘‘security-based swap dealer, 
major security-based swap participant,’’ after 
‘‘government securities dealer,’’ in subpara-
graph (B)(i)(II); 
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109 
(C) by striking ‘‘or government securities 
dealer’’ and adding ‘‘government securities 
dealer, security-based swap dealer or major se-
curity-based swap participant’’ in its place in 
subparagraph (C); and 
(D) by adding ‘‘security-based swap dealer, 
major security-based swap participant,’’ after 
‘‘government securities dealer,’’ in subpara-
graph (D); and 
(5) by adding at the end the following: 
‘‘(65) ELIGIBLE CONTRACT PARTICIPANT.—The 
term ‘eligible contract participant’ has the same 
meaning as in section 1a(13) of the Commodity Ex-
change Act (7 U.S.C. 1a(13)). 
‘‘(66) MAJOR SWAP PARTICIPANT.—The term 
‘major swap participant’ has the same meaning as in 
section 1a(40) of the Commodity Exchange Act (7 
U.S.C. 1a(40)). 
‘‘(67) MAJOR SECURITY-BASED SWAP PARTICI-
PANT.—The term ‘major security-based swap partic-
ipant’ has the same meaning as in section 1a(41) of 
the Commodity Exchange Act (7 U.S.C. 1a(41)). 
‘‘(68) SECURITY-BASED SWAP.—The term ‘se-
curity-based swap’ has the same meaning as in sec-
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110 
tion 1a(38) of the Commodity Exchange Act (7 
U.S.C. 1a(38)). 
‘‘(69) SWAP.—The term ‘swap’ has the same 
meaning as in section 1a(35) of the Commodity Ex-
change Act (7 U.S.C. 1a(35)). 
‘‘(70) PERSON ASSOCIATED WITH A SECURITY- 
BASED SWAP DEALER OR MAJOR SECURITY-BASED 
SWAP PARTICIPANT.—The term ‘person associated 
with a security-based swap dealer or major security- 
based swap participant’ or ‘associated person of a 
security-based swap dealer or major security-based 
swap participant’ has the same meaning as in sec-
tion 1a(48) of the Commodity Exchange Act (7 
U.S.C. 1a(48)). 
‘‘(71) SECURITY-BASED
SWAP
DEALER.—The 
term ‘security-based swap dealer’ has the same 
meaning as in section 1a(44) of the Commodity Ex-
change Act (7 U.S.C. 1a(44)). 
‘‘(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. 
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111 
‘‘(74) PRUDENTIAL
REGULATOR.—The term 
‘Prudential Regulator’ has the same meaning as in 
section 1a(43) of the Commodity Exchange Act (7 
U.S.C. 1a(43)). 
‘‘(75) SWAP DEALER.—The term ‘swap dealer’ 
has the same meaning as in section 1a(39) of the 
Commodity Exchange Act (7 U.S.C. 1a(39)). 
‘‘(76) SECURITY-BASED SWAP AGREEMENT.— 
‘‘(A) IN GENERAL.—For purposes of sec-
tions 10, 16, 20, and 21A of this Act, and sec-
tion 17 of the Securities Act of 1933 (15 
U.S.C. 77q), the term ‘security-based swap 
agreement’ means a swap agreement as defined 
in section 206A of the Gramm-Leach-Bliley Act 
(15 U.S.C. 78c note) of which a material term 
is based on the price, yield, value, or volatility 
of any security or any group or index of securi-
ties, or any interest therein. 
‘‘(B) EXCLUSIONS.—The term ‘security- 
based swap agreement’ does not include any se-
curity-based swap.’’. 
SEC. 152. REPEAL OF PROHIBITION ON REGULATION OF SE-
CURITY-BASED SWAPS. 
(a) REPEAL OF LAW.—Section 206B of the Gramm- 
Leach-Bliley Act (15 U.S.C. 78c note) is repealed. 
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112 
(b) CONFORMING AMENDMENTS TO THE SECURITIES 
ACT OF 1933.— 
(1) Section 2A(b) is amended by striking ‘‘(as 
defined in section 206B of the Gramm-Leach-Bliley 
Act)’’ each place that such term appears. 
(2) Section 17 of the Securities Act of 1933 (15 
U.S.C. 77q) is amended— 
(A) in subsection (a)— 
(i) by inserting ‘‘(including security- 
based swaps)’’ after ‘‘securities’’; and 
(ii) by striking ‘‘206B of the Gramm- 
Leach-Bliley Act’’ and inserting ‘‘3(a)(76) 
of the Securities Exchange Act of 1934’’; 
and 
(B) in subsection (d), by striking ‘‘206B of 
the Gramm-Leach-Bliley Act’’ and inserting 
‘‘3(a)(76) of the Securities Exchange Act of 
1934’’. 
(c) CONFORMING AMENDMENTS TO THE SECURITIES 
EXCHANGE ACT OF 1934.—The Securities Exchange Act 
of 1934 (15 U.S.C. 78a, et seq.) is amended as follows: 
(1) Section 3A (15 U.S.C. 78c–1) is amended 
by striking ‘‘(as defined in section 206B of the 
Gramm-Leach-Bliley Act)’’ each place that the term 
appears. 
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113 
(2) Section 9(a) (15 U.S.C. 78i(a)) is amended 
by striking paragraphs (2) through (5) and insert-
ing: 
‘‘(2) To effect, alone or with one or more other 
persons, a series of transactions in any security reg-
istered on a national securities exchange or in con-
nection with any security-based swap with respect to 
such security creating actual or apparent active 
trading in such security, or raising or depressing the 
price of such security, for the purpose of inducing 
the purchase or sale of such security by others. 
‘‘(3) If a dealer, broker, security-based swap 
dealer, major security-based swap participant or 
other person selling or offering for sale or pur-
chasing or offering to purchase the security to in-
duce the purchase or sale of any security registered 
on a national securities exchange or any security- 
based swap with respect to such security by the cir-
culation or dissemination in the ordinary course of 
business of information to the effect that the price 
of any such security will or is likely to rise or fall 
because of market operations of any one or more 
persons conducted for the purpose of raising or de-
pressing the price of such security. 
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114 
‘‘(4) If a dealer, broker, security-based swap 
dealer, major security-based swap participant or 
other person selling or offering for sale or pur-
chasing or offering to purchase the security, to 
make, regarding any security registered on a na-
tional securities exchange or any security-based swap 
with respect to such security, for the purpose of in-
ducing the purchase or sale of such security or such 
security-based swap, any statement which was at the 
time and in the light of the circumstances under 
which it was made, false or misleading with respect 
to any material fact, and which he knew or had rea-
sonable ground to believe was so false or misleading. 
‘‘(5) For a consideration, received directly or 
indirectly from a dealer, broker, security-based swap 
dealer, major security-based swap participant or 
other person selling or offering for sale or pur-
chasing or offering to purchase the security, to in-
duce the purchase of any security registered on a 
national securities exchange or any security-based 
swap with respect to such security by the circulation 
or dissemination of information to the effect that the 
price of any such security will or is likely to rise or 
fall because of the market operations of any one or 
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115 
more persons conducted for the purpose of raising or 
depressing the price of such security.’’. 
(3) Section 10 (15 U.S.C. 78j) is amended by 
striking ‘‘(as defined in section 206B of the Gramm- 
Leach-Bliley Act)’’ each place that the term appears. 
(4) Section 15(c)(1) is amended— 
(A) in subparagraph (A, by striking ‘‘, or 
any security-based swap agreement (as defined 
in section 206B of the Gramm-Leach-Bliley 
Act),’’; and 
(B) in subparagraphs (B) and (C), by 
striking ‘‘agreement (as defined in section 206B 
of the Gramm-Leach-Bliley Act)’’ in each place 
that the term appears. 
(5) Section 15(i) (15 U.S.C. 78o(i), as added 
by section 303(f) of the Commodity Futures Mod-
ernization Act of 2000 (Public Law 106–554; 114 
Stat. 2763A–455) is amended by striking ‘‘(as de-
fined in section 206B of the Gramm-Leach-Bliley 
Act)’’. 
(6) Section 16 (15 U.S.C. 78p) is amended— 
(A) in subsection (a)(2)(C), by striking 
‘‘(as defined in section 206(b) of the Gramm- 
Leach-Bliley Act)’’; 
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116 
(B) in subsection (b), by striking ‘‘(as de-
fined in section 206B of the Gramm-Leach-Bli-
ley Act)’’ in each place that the term appears; 
and 
(C) in subsection (g), by striking ‘‘(as de-
fined in section 206B of the Gramm-Leach-Bli-
ley Act)’’; 
(7) Section 20 (15 U.S.C. 78t) is amended— 
(A) in subsection (d), by striking ‘‘(as de-
fined in section 206B of the Gramm-Leach-Bli-
ley Act)’’; and 
(B) in subsection (f), by striking ‘‘(as de-
fined in section 206B of the Gramm-Leach-Bli-
ley Act)’’; and 
(8) Section 21A (15 U.S.C. 78u–1) is amend-
ed— 
(A) in subsection (a)(1), by striking ‘‘(as 
defined in section 206B of the Gramm-Leach- 
Bliley Act)’’; and 
(B) in subsection (g), by striking ‘‘(as de-
fined in section 206B of the Gramm-Leach-Bli-
ley Act)’’. 
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117 
SEC. 153. AMENDMENTS TO THE SECURITIES EXCHANGE 
ACT OF 1934. 
(a) CLEARING FOR SECURITY-BASED SWAPS.—The 
Securities Exchange Act of 1934 (15 U.S.C. 78a, et seq.) 
is amended by adding the following section after section 
3A: 
‘‘SEC. 3B. CLEARING OF SECURITY-BASED SWAPS. 
‘‘(a) CLEARING REQUIREMENT.— 
‘‘(1) CLEARING OF SECURITY-BASED SWAPS.— 
‘‘(A) 
CLEARING
REQUIREMENT.—The 
Commission shall monitor security-based swap 
activity and transaction data and by rule or 
regulation identify specific security-based swap 
contracts that it determines are required to be 
cleared consistent with the public interest, after 
taking into account— 
‘‘(i) the existence of significant out-
standing notional exposures, trading liquid-
ity and adequate pricing data; 
‘‘(ii) the availability of one or more 
swap clearinghouses with the rule frame-
work, capacity, operational expertise and 
resources, and credit support infrastruc-
ture to clear the contract on terms that are 
consistent with the material terms and 
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118 
trading conventions on which the contract 
is then traded; 
‘‘(iii) the impact on the mitigation of 
systemic risk, taking into account the size 
of the market for such contract and the re-
sources of the swap clearinghouses avail-
able to clear the contract; 
‘‘(iv) the impact on competition; and 
‘‘(v) the existence of reasonable legal 
certainty in the event of the insolvency of 
the relevant swap clearinghouse or one or 
more of its clearing members with regard 
to the treatment of customer and swap 
counterparty positions, funds, and prop-
erty. 
‘‘(B) SCOPE OF CLEARING FUNCTIONS.— 
The Commission shall by rule or regulation de-
fine the scope of the clearing functions that are 
necessary to satisfy the requirements of sub-
paragraph (A). 
‘‘(2) PREVENTION OF EVASION.—The Commis-
sion and the Commodities Futures Trading Commis-
sion shall have authority to prescribe rules under 
this section, or issue interpretations of such rules, as 
necessary to prevent evasions of this Act. Any such 
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119 
rules or interpretations of rules shall be prescribed 
and issued jointly by both Commissions. 
‘‘(3) REQUIRED REPORTING.— 
‘‘(A) IN
GENERAL.—Any security-based 
swap that is not accepted for clearing by any 
clearing agency shall be reported to either a se-
curity-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 within 
such time period as the Commission may by 
rule prescribe. 
‘‘(B) AUTHORITY OF SWAP DEALER TO RE-
PORT.—Counterparties to a security-based swap 
may agree as to which counterparty will report 
such swap as required by subparagraph (A). In 
any security-based swap where only one 
counterparty is a swap dealer, the swap dealer 
shall report the swap. 
‘‘(4) TRANSITION
RULES.—Rules adopted by 
the Commission under this section shall provide for 
the reporting of data, as follows: 
‘‘(A) Security-based swaps that were en-
tered into before the date of enactment of the 
Over-the-Counter Derivatives Markets Act of 
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120 
2009 shall be reported to a registered security- 
based swap repository or the Commission no 
later than 180 days after the effective date of 
such Act. 
‘‘(B) Security-based swaps that were en-
tered into on or after the date of enactment of 
the Over-the-Counter Derivatives Markets Act 
of 2009 shall be reported to a registered secu-
rity-based swap repository or the Commission 
no later than the later of— 
‘‘(i) 90 days after the effective date of 
such Act; or 
‘‘(ii) such other time after entering 
into the swap as the Commission may pre-
scribe by rule or regulation. 
‘‘(b) CONSULTATION.—The Commission and the 
Commodity Futures Trading Commission shall consult 
with the appropriate Federal banking agencies and each 
other prior to adopting rules under this section.’’. 
(b) CLEARING AGENCY REQUIREMENTS.—Section 
17A of the Securities Exchange Act of 1934 (15 U.S.C. 
78q) is amended by adding at the end the following new 
subsections: 
‘‘(g) REGISTRATION REQUIREMENT.—It shall be un-
lawful for a clearing agency, unless registered with the 
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121 
Commission, directly or indirectly to make use of the mails 
or any means or instrumentality of interstate commerce 
to perform the functions of a clearing agency with respect 
to a swap. 
‘‘(h) VOLUNTARY REGISTRATION.— 
‘‘(1) CLEARING
AGENCIES.—A person that 
clears agreements, contracts, or transactions that 
are not required to be cleared under this Act may 
register with the Commission as a clearing agency. 
‘‘(2) 
DERIVATIVES
CLEARING
ORGANIZA-
TIONS.—A clearing agency may clear swaps that are 
required to be cleared by a person who is registered 
as a derivatives clearing organization under the 
Commodity Exchange Act (7 U.S.C. 1, et seq.). 
‘‘(i) REQUIRED REGISTRATION
FOR BANKS
AND 
CLEARING AGENCIES.—A person that is required to be 
registered as a clearing agency under this section shall 
register with the Commission regardless of whether the 
person is also a bank or a derivatives clearing organization 
registered with the Commodity Futures Trading Commis-
sion under the Commodity Exchange Act (7 U.S.C. 1, et 
seq.). 
‘‘(j) REPORTING.— 
‘‘(1) IN
GENERAL.—A clearing agency that 
clears security-based swaps shall provide to the 
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122 
Commission all information determined by the Com-
mission to be necessary to perform its responsibil-
ities under this Act. The Commission shall adopt 
data collection and maintenance requirements for se-
curity-based swaps cleared by clearing agencies that 
are comparable to the corresponding requirements 
for security-based swaps accepted by security-based 
swap repositories and security-based swaps traded 
on alternative swap execution facilities. The Com-
mission shall share such information, upon request, 
with the Board, the Commodity Futures Trading 
Commission, the appropriate Federal banking agen-
cies, the Financial Services Oversight Council, and 
the Department of Justice or to other persons the 
Commission deems appropriate, including foreign fi-
nancial supervisors (including foreign futures au-
thorities), foreign central banks, and foreign min-
istries. 
‘‘(2) PUBLIC INFORMATION.—A clearing agency 
that clears security-based swaps shall provide to the 
Commission, or its designee, such information as is 
required by, and in a form and at a frequency to be 
determined by, the Commission, in order to comply 
with the public reporting requirements contained in 
section 13. 
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123 
‘‘(k) DESIGNATION OF COMPLIANCE OFFICER.— 
‘‘(1) IN GENERAL.—Each clearing agency that 
clears security-based swaps shall designate an indi-
vidual to serve as a compliance officer. 
‘‘(2) DUTIES.—The compliance officer shall— 
‘‘(A) report directly to the board or to the 
senior officer of the clearing agency; 
‘‘(B) in consultation with the board of the 
clearing agency, a body performing a function 
similar to that of a board, or the senior officer 
of the clearing agency, resolve any conflicts of 
interest that may arise; 
‘‘(C) be responsible for administering the 
policies and procedures required to be estab-
lished pursuant to this section; 
‘‘(D) ensure compliance with securities 
laws and the rules and regulations issued there-
under, including rules prescribed by the Com-
mission pursuant to this section; and 
‘‘(E) establish procedures for remediation 
of noncompliance issues found during compli-
ance office reviews, lookbacks, internal or exter-
nal audit findings, self-reported errors, or 
through validated complaints which will estab-
lish the handling, management response, reme-
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124 
diation, retesting, and closing of noncompliance 
issues. 
‘‘(3) ANNUAL REPORTS REQUIRED.—The com-
pliance officer shall annually prepare and sign a re-
port on the compliance of the clearing agency with 
the securities laws and its policies and procedures, 
including its code of ethics and conflict of interest 
policies, in accordance with rules prescribed by the 
Commission. Such compliance report shall accom-
pany the financial reports of the clearing agency 
that are required to be furnished to the Commission 
pursuant to this section and shall include a certifi-
cation that, under penalty of law, the report is accu-
rate and complete. 
‘‘(l) CORE PRINCIPLES FOR CLEARING AGENCIES.— 
‘‘(1) IN
GENERAL.—To be registered and to 
maintain registration as a clearing agency, a clear-
ing agency shall comply with the core principles 
specified in this subsection. The Commission may 
conform the core principles to reflect evolving United 
States and international standards. Except where 
the Commission determines otherwise by rule or reg-
ulation, a clearing agency shall have reasonable dis-
cretion in establishing the manner in which it com-
plies with the core principles. 
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125 
‘‘(2) FINANCIAL RESOURCES.— 
‘‘(A) The clearing agency shall have ade-
quate financial, operational, and managerial re-
sources to discharge its responsibilities. 
‘‘(B) Financial resources shall at a min-
imum exceed the total amount that would— 
‘‘(i) enable the clearing agency to 
meet its financial obligations to its mem-
bers and participants notwithstanding a 
default by the member or participant cre-
ating the largest financial exposure for 
that clearing agency in extreme but plau-
sible market conditions; and 
‘‘(ii) enable the clearing agency to 
cover its operating costs for a period of 
one year, calculated on a rolling basis. 
‘‘(3) 
PARTICIPANT
AND
PRODUCT
ELIGI-
BILITY.— 
‘‘(A) The clearing agency shall establish— 
‘‘(i) appropriate admission and con-
tinuing eligibility standards (including suf-
ficient financial resources and operational 
capacity to meet obligations arising from 
participation in the clearing agency) for 
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members of and participants in the organi-
zation; and 
‘‘(ii) appropriate standards for deter-
mining eligibility of agreements, contracts, 
or transactions submitted to the clearing 
agency for clearing. 
‘‘(B) The clearing agency shall have proce-
dures in place to verify that participation and 
membership requirements are met on an ongo-
ing basis. 
‘‘(C) The clearing agency’s participation 
and membership requirements shall be objec-
tive, publicly disclosed, and permit fair and 
open access. 
‘‘(D) The rules of the clearing agency shall 
provide for acceptance of a standardized secu-
rity-based swap regardless of the system on 
which the transaction was executed. 
‘‘(4) RISK MANAGEMENT.— 
‘‘(A) The clearing agency shall have the 
ability to manage the risks associated with dis-
charging the responsibilities of a clearing agen-
cy through the use of appropriate tools and pro-
cedures. 
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‘‘(B) The clearing agency shall measure its 
credit exposures to its members and partici-
pants at least once each business day and shall 
monitor such exposures throughout the business 
day. 
‘‘(C) Through margin requirements and 
other risk control mechanisms, a clearing agen-
cy shall limit its exposures to potential losses 
from defaults by its members and participants 
so that the operations of the clearing agency 
would not be disrupted and nondefaulting mem-
bers or participants would not be exposed to 
losses that they cannot anticipate or control. 
‘‘(D) Margin required from all members 
and participants shall be sufficient to cover po-
tential exposures in normal market conditions. 
‘‘(E) The models and parameters used in 
setting margin requirements shall be risk-based 
and reviewed regularly. 
‘‘(5) SETTLEMENT PROCEDURES.—The clearing 
agency shall— 
‘‘(A) complete money settlements on a 
timely basis, and not less than once each busi-
ness day; 
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‘‘(B) employ money settlement arrange-
ments that eliminate or strictly limit the clear-
ing agency’s exposure to settlement bank risks, 
such as credit and liquidity risks from the use 
of banks to effect money settlements; 
‘‘(C) ensure money settlements are final 
when effected; 
‘‘(D) maintain an accurate record of the 
flow of funds associated with each money settle-
ment; 
‘‘(E) have the ability to comply with the 
terms and conditions of any permitted netting 
or offset arrangements with other clearing orga-
nizations; and 
‘‘(F) for physical settlements, establish 
rules that clearly state the clearing agency’s ob-
ligations with respect to physical deliveries. The 
risks from these obligations shall be identified 
and managed. 
‘‘(6) TREATMENT OF FUNDS.— 
‘‘(A) The clearing agency shall have stand-
ards and procedures designed to protect and en-
sure the safety of member and participant 
funds and assets. 
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129 
‘‘(B) The clearing agency shall hold mem-
ber and participant funds and assets in a man-
ner whereby risk of loss or of delay in the clear-
ing agency’s access to the assets and funds is 
minimized. 
‘‘(C) Assets and funds invested by the 
clearing agency shall be held in instruments 
with minimal credit, market, and liquidity risks. 
‘‘(7) DEFAULT RULES AND PROCEDURES.— 
‘‘(A) The clearing agency shall have rules 
and procedures designed to allow for the effi-
cient, fair, and safe management of events 
when members or participants become insolvent 
or otherwise default on their obligations to the 
clearing agency. 
‘‘(B) The clearing agency’s default proce-
dures shall be clearly stated, and they shall en-
sure that the clearing agency can take timely 
action to contain losses and liquidity pressures 
and to continue meeting its obligations. 
‘‘(C) The default procedures shall be pub-
licly available. 
‘‘(8) RULE ENFORCEMENT.—The clearing agen-
cy shall— 
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‘‘(A) maintain adequate arrangements and 
resources for the effective monitoring and en-
forcement of compliance with rules of the clear-
ing agency and for resolution of disputes; and 
‘‘(B) have the authority and ability to dis-
cipline, limit, suspend, or terminate a member’s 
or participant’s activities for violations of rules 
of the clearing agency. 
‘‘(9) 
SYSTEM
SAFEGUARDS.—The 
clearing 
agency shall— 
‘‘(A) establish and maintain a program of 
risk analysis and oversight to identify and mini-
mize sources of operational risk through the de-
velopment of appropriate controls and proce-
dures, and the development of automated sys-
tems, that are reliable, secure, and have ade-
quate scalable capacity; 
‘‘(B) establish and maintain emergency 
procedures, backup facilities, and a plan for dis-
aster recovery that allows for the timely recov-
ery and resumption of operations and the ful-
fillment of the clearing agency’s responsibilities 
and obligations; and 
‘‘(C) periodically conduct tests to verify 
that backup resources are sufficient to ensure 
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continued order processing and trade matching, 
price reporting, market surveillance, and main-
tenance of a comprehensive and accurate audit 
trail. 
‘‘(10) REPORTING.—The clearing agency shall 
provide to the Commission all information necessary 
for the Commission to conduct oversight of the 
clearing agency. 
‘‘(11) RECORDKEEPING.—The clearing agency 
shall maintain records of all activities related to the 
business of the clearing agency as a clearing agency 
in a form and manner acceptable to the Commission 
for a period of 5 years. 
‘‘(12) PUBLIC INFORMATION.— 
‘‘(A) The clearing agency shall provide 
market participants with sufficient information 
to identify and evaluate accurately the risks and 
costs associated with using the clearing agen-
cy’s services. 
‘‘(B) The clearing agency shall make infor-
mation concerning the rules and operating pro-
cedures governing its clearing and settlement 
systems (including default procedures) available 
to market participants. 
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‘‘(C) The clearing agency shall disclose 
publicly and to the Commission information 
concerning— 
‘‘(i) the terms and conditions of con-
tracts, 
agreements, 
and 
transactions 
cleared and settled by the clearing agency; 
‘‘(ii) clearing and other fees that the 
clearing agency charges its members and 
participants; 
‘‘(iii) the margin-setting methodology 
and the size and composition of the finan-
cial resource package of the clearing agen-
cy; 
‘‘(iv) other information relevant to 
participation in the settlement and clearing 
activities of the clearing agency; and 
‘‘(v) daily settlement prices, volume, 
and open interest for all contracts settled 
or cleared by it. 
‘‘(13) INFORMATION-SHARING.—The clearing 
agency shall— 
‘‘(A) enter into and abide by the terms of 
all appropriate and applicable domestic and 
international information-sharing agreements; 
and 
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133 
‘‘(B) use relevant information obtained 
from the agreements in carrying out the clear-
ing organization’s risk management program. 
‘‘(14) ANTITRUST
CONSIDERATIONS.—Unless 
appropriate to achieve the purposes of this chapter, 
the clearing agency shall avoid— 
‘‘(A) adopting any rule or taking any ac-
tion that results in any unreasonable restraint 
of trade; or 
‘‘(B) imposing any material anticompeti-
tive burden. 
‘‘(15) GOVERNANCE FITNESS STANDARDS.— 
‘‘(A) The clearing agency shall establish 
governance arrangements that are transparent 
in order to fulfill public interest requirements 
and to support the objectives of owners and 
participants. 
‘‘(B) The clearing agency shall establish 
and enforce appropriate fitness standards for 
directors, members of any disciplinary com-
mittee, and members of the clearing agency, 
and any other persons with direct access to the 
settlement or clearing activities of the clearing 
agency, including any parties affiliated with any 
of the persons described in this subparagraph. 
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134 
‘‘(16) CONFLICTS OF INTEREST.—The clearing 
agency shall establish and enforce rules to minimize 
conflicts of interest in the decisionmaking process of 
the clearing agency and establish a process for re-
solving such conflicts of interest. 
‘‘(17) COMPOSITION
OF
THE
BOARDS.—The 
clearing agency shall ensure that the composition of 
the governing board or committee includes market 
participants. 
‘‘(18) LEGAL RISK.—The clearing agency shall 
have a well-founded, transparent, and enforceable 
legal framework for each aspect of its activities. 
‘‘(m) CONSULTATION.—The Commission and the 
Commodity Futures Trading Commission shall consult 
with the appropriate Federal banking agencies and each 
other prior to adopting rules under this section. 
‘‘(n) HARMONIZATION OF RULES.—Not later than 
180 days after the effective date of the Over-the-Counter 
Derivatives Markets Act of 2009, the Commission and the 
Commodity Futures Trading Commission shall jointly 
adopt uniform rules governing persons that are registered 
as derivatives clearing organizations for swaps under the 
Commodity Exchange Act (7 U.S.C. 1, et seq.) and per-
sons that are registered as clearing agencies for security- 
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135 
based swaps under the Securities Exchange Act of 1934 
(15 U.S.C. 78a, et seq.).’’. 
(c) EXECUTION OF SECURITY-BASED SWAPS.—The 
Securities Exchange Act of 1934 (15 U.S.C. 78a, et seq.) 
is amended by inserting after section 5 the following: 
‘‘SEC. 5A. EXECUTION OF SECURITY-BASED SWAPS. 
‘‘(a) TRADE EXECUTION.—With respect to trans-
actions involving security-based swaps subject to the re-
quirement of section 3B and where both counterparties 
are either security-based swap dealers or major security- 
based swap participants, such counterparties must either: 
‘‘(1) execute the transaction on a national secu-
rities exchange registered pursuant to section 6(a) 
(in which event such transaction shall be subject to 
regulation under this title as a transaction in a secu-
rity); 
‘‘(2) execute the transaction on a swap execu-
tion facility registered with the Commission; 
‘‘(3) execute the transaction on a foreign swap 
execution facility that is subject to regulation as 
such under the laws of a foreign jurisdiction; or 
‘‘(4) if the transaction is not executed on an en-
tity listed in paragraph (1), (2), or (3), comply with 
any recordkeeping and end-of-day transaction re-
porting requirements— 
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136 
‘‘(A) as may be prescribed by the Commis-
sion with respect to security-based swaps sub-
ject to the requirements of section 3B and 
where both counterparties are either security- 
based swap dealers or major security-based 
swap participants; or 
‘‘(B) as may be prescribed by the relevant 
foreign regulator in the case of security-based 
swaps subject to the requirements of section 3B 
and where both counterparties are either secu-
rity-based swap dealers or major security-based 
swap participants entered into by— 
‘‘(i) a foreign swap dealer or a foreign 
swap market participant; or 
‘‘(ii) a non-foreign swap dealer or 
major swap participant that is entering 
into the security-based swap either outside 
of the United States, its territories and 
possessions or with a foreign counterparty. 
‘‘(b) EXCHANGE TRADING.—In adopting rules and 
regulations, the Commission shall endeavor to eliminate 
unnecessary impediments to the trading on national secu-
rities exchanges or swap execution facilities, agreements 
or transactions that would be commodity swaps but for 
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137 
the trading of such contracts, agreements or transactions 
on such a designated contract market.’ ’’’. 
(d) ALTERNATIVE SWAP EXECUTION FACILITIES.— 
The Securities Exchange Act of 1934 (15 U.S.C. 78a, et 
seq.) is amended by adding after section 3B the following: 
‘‘SEC. 3C. ALTERNATIVE SWAP EXECUTION FACILITIES. 
‘‘(a) REGISTRATION.— 
‘‘(1) IN GENERAL.—No person may operate a 
facility for the trading of security-based swaps un-
less the facility is registered as an alternative swap 
execution facility under this section. 
‘‘(2) DUAL REGISTRATION.—Any person that is 
required to be registered as an alternative swap exe-
cution facility under this section shall register with 
the Commission regardless of whether that person 
also is registered with the Commodity Futures Trad-
ing Commission as an alternative swap execution fa-
cility. 
‘‘(b) REQUIREMENTS FOR TRADING.—An alternative 
swap execution facility that is registered under subsection 
(a) may trade any security-based swap. 
‘‘(c) TRADING BY EXCHANGES.—An exchange shall, 
to the extent that the exchange also operates an alter-
native swap execution facility and uses the same electronic 
trade execution system for trading on the exchange and 
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138 
the alternative swap execution facility, identify whether 
the electronic trading is taking place on the exchange or 
the alternative swap execution facility. 
‘‘(d) CRITERIA FOR REGISTRATION.— 
‘‘(1) IN GENERAL.—To be registered as an al-
ternative swap execution facility, the facility shall be 
required to demonstrate to the Commission that it 
meets the criteria specified herein. 
‘‘(2) DETERRENCE OF ABUSES.—The swap exe-
cution facility shall establish and enforce trading 
and participation rules that will deter abuses and 
have the capacity to detect, investigate, and enforce 
those rules, including means to— 
‘‘(A) obtain information necessary to per-
form the functions required under this section; 
or 
‘‘(B) use means to— 
‘‘(i) provide market participants with 
impartial access to the market; and 
‘‘(ii) capture information that may be 
used in establishing whether rule violations 
have occurred. 
‘‘(3) TRADING PROCEDURES.—The swap execu-
tion facility shall establish and enforce rules or 
terms and conditions defining, or specifications de-
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tailing, trading procedures to be used in entering 
and executing orders traded on or through its facili-
ties. 
‘‘(4) 
FINANCIAL
INTEGRITY
OF
TRANS-
ACTIONS.—The swap execution facility shall estab-
lish and enforce rules and procedures for ensuring 
the financial integrity of security-based swaps en-
tered on or through its facilities, including the clear-
ance and settlement of the security-based swaps. 
‘‘(e) CORE PRINCIPLES
FOR ALTERNATIVE SWAP 
EXECUTION FACILITIES.— 
‘‘(1) IN GENERAL.—To maintain its registra-
tion as an alternative swap execution facility, the fa-
cility shall comply with the core principles specified 
in this subsection and any requirement that the 
Commission may impose by rule or regulation. Ex-
cept where the Commission determines otherwise by 
rule or regulation, the facility shall have reasonable 
discretion in establishing the manner in which it 
complies with these core principles. 
‘‘(2) COMPLIANCE
WITH
RULES.—The swap 
execution facility shall monitor and enforce compli-
ance with any of the rules of the facility, including 
the terms and conditions of the security-based swaps 
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traded on or through the facility and any limitations 
on access to the facility. 
‘‘(3) SECURITY-BASED
SWAPS
NOT
READILY 
SUSCEPTIBLE TO MANIPULATION.—The swap execu-
tion facility shall permit trading only in security- 
based swaps that are not readily susceptible to ma-
nipulation. 
‘‘(4) MONITORING
OF
TRADING.—The swap 
execution facility shall monitor trading in security- 
based swaps to prevent manipulation and price dis-
tortion through surveillance, compliance, and dis-
ciplinary practices and procedures, including meth-
ods for conducting real-time monitoring of trading 
and comprehensive and accurate trade reconstruc-
tions. 
‘‘(5) ABILITY TO OBTAIN INFORMATION.—The 
swap execution facility shall— 
‘‘(A) establish and enforce rules that will 
allow the facility to obtain any necessary infor-
mation to perform any of the functions de-
scribed in this subsection; 
‘‘(B) provide the information to the Com-
mission upon request; and 
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‘‘(C) have the capacity to carry out such 
international information-sharing agreements as 
the Commission may require. 
‘‘(6) EMERGENCY AUTHORITY.—The swap exe-
cution facility shall adopt rules to provide for the ex-
ercise of emergency authority, in consultation or co-
operation with the Commission, where necessary and 
appropriate, including the authority to suspend or 
curtail trading in a security-based swap. 
‘‘(7) TIMELY PUBLICATION OF TRADING INFOR-
MATION.—The swap execution facility shall make 
public timely information on price, trading volume, 
and other trading data to the extent prescribed by 
the Commission. 
‘‘(8) RECORDKEEPING AND REPORTING.—The 
swap execution facility shall maintain records of all 
activities related to the business of the facility, in-
cluding a complete audit trail, in a form and manner 
acceptable to the Commission for a period of 5 
years, and report to the Commission all information 
determined by the Commission to be necessary or 
appropriate for the Commission to perform its re-
sponsibilities under this Act in a form and manner 
acceptable to the Commission. The Commission shall 
adopt data collection and reporting requirements for 
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142 
alternative swap execution facilities that are com-
parable to corresponding requirements for clearing 
agencies and security-based swap repositories. 
‘‘(9) 
ANTITRUST
CONSIDERATIONS.—Unless 
necessary or appropriate to achieve the purposes of 
this Act, the swap execution facility shall avoid— 
‘‘(A) adopting any rules or taking any ac-
tions that result in any unreasonable restraints 
of trade; or 
‘‘(B) imposing any material anticompeti-
tive burden on trading on the swap execution 
facility. 
‘‘(10) CONFLICTS
OF
INTEREST.—The swap 
execution facility shall— 
‘‘(A) establish and enforce rules to mini-
mize conflicts of interest in its decision-making 
process; and 
‘‘(B) establish a process for resolving the 
conflicts of interest. 
‘‘(11) DESIGNATION
OF
COMPLIANCE
OFFI-
CER.— 
‘‘(A) IN GENERAL.—Each alternative swap 
execution facility shall designate an individual 
to serve as a compliance officer. 
‘‘(B) DUTIES.—The compliance officer— 
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143 
‘‘(i) shall report directly to the board 
or to the senior officer of the facility; 
‘‘(ii) shall— 
‘‘(I) review compliance with the 
core principles in section 3B(e). 
‘‘(II) in consultation with the 
board of the facility, a body per-
forming a function similar to that of 
a board, or the senior officer of the 
facility, resolve any conflicts of inter-
est that may arise; 
‘‘(III) be responsible for admin-
istering the policies and procedures 
required to be established pursuant to 
this section; and 
‘‘(IV) ensure compliance with se-
curities laws and the rules and regula-
tions issued thereunder, including 
rules prescribed by the Commission 
pursuant to this section; and 
‘‘(iii) shall establish procedures for re-
mediation of non-compliance issues found 
during 
compliance 
office 
reviews, 
lookbacks, internal or external audit find-
ings, self-reported errors, or through vali-
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144 
dated complaints. Procedures will establish 
the handling, management response, reme-
diation, retesting, and closing of non-
compliant issues. 
‘‘(C) ANNUAL REPORTS REQUIRED.—The 
compliance officer shall annually prepare and 
sign a report on the compliance of the facility 
with the securities laws and its policies and pro-
cedures, including its code of ethics and conflict 
of interest policies, in accordance with rules 
prescribed by the Commission. Such compliance 
report shall accompany the financial reports of 
the facility that are required to be furnished to 
the Commission pursuant to this section and 
shall include a certification that, under penalty 
of law, the report is accurate and complete. 
‘‘(f) EXEMPTIONS.—The Commission may exempt, 
conditionally or unconditionally, an alternative swap exe-
cution facility from registration under this section if the 
Commission finds that such organization is subject to 
comparable, comprehensive supervision and regulation on 
a consolidated basis by the Commodity Futures Trading 
Commission, a Prudential Regulator or the appropriate 
governmental authorities in the organization’s home coun-
try. 
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145 
‘‘(g) HARMONIZATION OF RULES.—Not later than 
180 days after the date of enactment of the Over-the- 
Counter Derivatives Markets Act of 2009, the Commission 
and the Commodity Futures Trading Commission shall 
jointly prescribe rules governing the regulation of alter-
native swap execution facilities under this section and sec-
tion 5h of the Commodity Exchange Act (7 U.S.C. 7b– 
3).’’. 
(e) SEGREGATION OF ASSETS HELD AS COLLATERAL 
IN SWAP TRANSACTIONS.—The Securities Exchange Act 
of 1934 (15 U.S.C. 78a, et seq.) is further amended by 
adding after section 3C (as added by subsection (b) the 
following: 
‘‘SEC. 3D. SEGREGATION OF ASSETS HELD AS COLLATERAL 
IN SWAP TRANSACTIONS. 
‘‘(a) CLEARED SWAPS.—A security-based swap deal-
er or clearing agency by or through which funds or other 
property are held as margin or collateral to secure the obli-
gations of a counterparty under a security-based swap to 
be cleared by or through a derivatives clearing agency 
shall segregate, maintain, and use the funds or other prop-
erty for the benefit of the counterparty, in accordance with 
such rules and regulations as the Commission or Pruden-
tial Regulator shall prescribe. Any such funds or other 
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146 
property shall be treated as customer property under this 
Act. 
‘‘(b) OVER-THE-COUNTER SWAPS.—At the request of 
a counterparty to a security-based swap who provides 
funds or other property to a swap dealer as margin or 
collateral to secure the obligations of the counterparty 
under a security-based swap between the counterparty and 
the swap dealer that is not submitted for clearing to a 
derivatives clearing agency, the swap dealer shall seg-
regate the funds or other property for the benefit of the 
counterparty, and maintain the funds or other property 
in an account which is carried by a third-party custodian 
and designated as a segregated account for the 
counterparty, in accordance with such rules and regula-
tions as the Commission or Prudential Regulator may pre-
scribe. This subsection shall not be interpreted to preclude 
commercial arrangements regarding the investment of the 
segregated funds or other property and the related alloca-
tion of gains and losses resulting from any such invest-
ment.’’. 
(f) TRADING
IN SECURITY-BASED SWAP AGREE-
MENTS.—Section 6 of the Securities Exchange Act of 
1934 (15 U.S.C. 78f) is amended by adding at the end 
the following: 
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‘‘(l) It shall be unlawful for any person to effect a 
transaction in a security-based swap with or for a person 
that is not an eligible contract participant unless such 
transaction is effected on a national securities exchange 
registered pursuant to subsection (b).’’. 
(g) ADDITIONS OF SECURITY-BASED SWAPS TO CER-
TAIN
ENFORCEMENT
PROVISIONS.—Paragraphs 
(1) 
through (3) of section 9(b) of the Securities Exchange Act 
of 1934 (15 U.S.C. 78i(b)(1)–(3)) are amended to read 
as follows: 
‘‘(1) any transaction in connection with any se-
curity whereby any party to such transaction ac-
quires (A) any put, call, straddle, or other option or 
privilege of buying the security from or selling the 
security to another without being bound to do so; 
(B) any security futures product on the security; or 
(C) any security-based swap involving the security or 
the issuer of the security; 
‘‘(2) any transaction in connection with any se-
curity with relation to which he has, directly or indi-
rectly, any interest in any (A) such put, call, strad-
dle, option, or privilege; (B) such security futures 
product; or (C) such security-based swap; or 
‘‘(3) any transaction in any security for the ac-
count of any person who he has reason to believe 
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has, and who actually has, directly or indirectly, any 
interest in any (A) such put, call, straddle, option, 
or privilege; (B) such security futures product with 
relation to such security; or (C) any security-based 
swap involving such security or the issuer of such se-
curity.’’. 
(h) RULEMAKING AUTHORITY TO PREVENT FRAUD, 
MANIPULATION, AND DECEPTIVE CONDUCT IN SECURITY- 
BASED SWAPS.—Section 9 of the Securities Exchange Act 
of 1934 (15 U.S.C. 78i) is amended by adding at the end 
the following: 
‘‘(i) It shall be unlawful for any person, directly or 
indirectly, by the use of any means or instrumentality of 
interstate commerce or of the mails, or of any facility of 
any national securities exchange, to effect any transaction 
in, or to induce or attempt to induce the purchase or sale 
of, any security-based swap, in connection with which such 
person engages in any fraudulent, deceptive, or manipula-
tive act or practice, makes any fictitious quotation, or en-
gages in any transaction, practice, or course of business 
which operates as a fraud or deceit upon any person. The 
Commission shall, for the purposes of this paragraph, by 
rules and regulations define, and prescribe means reason-
ably designed to prevent, such transactions, acts, prac-
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149 
tices, and courses of business as are fraudulent, deceptive, 
or manipulative, and such quotations as are fictitious.’’. 
(i) POSITION
LIMITS
AND
POSITION
ACCOUNT-
ABILITY FOR SECURITY-BASED SWAPS.—The Securities 
Exchange Act of 1934 is amended by inserting after sec-
tion 10A (15 U.S.C. 78j–1) the following new section: 
‘‘SEC. 10B. POSITION LIMITS AND POSITION ACCOUNT-
ABILITY FOR SECURITY-BASED SWAPS AND 
LARGE TRADER REPORTING. 
‘‘(a) POSITION LIMITS.—As a means reasonably de-
signed to prevent fraud and manipulation, the Commission 
may, by rule or regulation, as necessary or appropriate 
in the public interest or for the protection of investors, 
establish limits (including related hedge exemption provi-
sions) on the size of positions in any security-based swap 
or security-based swap agreement that may be held by any 
person. In establishing such limits, the Commission may 
require any person to aggregate positions in— 
‘‘(1) any security-based swap and any security 
or loan or group or index of securities or loans on 
which such security-based swap is based, which such 
security-based swap references, or to which such se-
curity-based swap is related as described in section 
(a)(3) of the Over-the-Counter Derivatives Markets 
Act of 2009, and any security-based swap agreement 
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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 secu-
rity or group or index of securities, the price, yield, 
value, or volatility of which, or of which any interest 
therein, is the basis for a material term of such se-
curity-based swap as described in section 3(a)(76) of 
the Securities Exchange Act of 1934 and (B) any 
security-based swap and any other instrument relat-
ing to the same security or group or index of securi-
ties. 
‘‘(b) EXEMPTIONS.—The Commission, by rule, regu-
lation, or order, may conditionally or unconditionally ex-
empt any person or class of persons, any security-based 
swap or class of security-based swaps, or any transaction 
or class of transactions from any requirement it may es-
tablish under this section with respect to position limits. 
‘‘(c) SRO RULES.— 
‘‘(1) IN GENERAL.—As a means reasonably de-
signed to prevent fraud or manipulation, the Com-
mission, by rule, regulation, or order, as necessary 
or appropriate in the public interest, for the protec-
tion of investors, or otherwise in furtherance of the 
purposes of this title, may direct a self-regulatory 
organization— 
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151 
‘‘(A) to adopt rules regarding the size of 
positions in any security-based swap that may 
be held by— 
‘‘(i) any member of such self-regu-
latory organization; or 
‘‘(ii) any person for whom a member 
of such self-regulatory organization effects 
transactions in such security-based swap or 
other security-based swap agreement; and 
‘‘(B) to adopt rules reasonably designed to 
ensure compliance with requirements prescribed 
by the Commission under paragraph (c)(1)(A). 
‘‘(2) REQUIREMENT
TO
AGGREGATE
POSI-
TIONS.—In establishing such limits, the self-regu-
latory organization may require such member or per-
son to aggregate positions in— 
‘‘(A) any security-based swap and any se-
curity or loan or group or index of securities or 
loans on which such security-based swap is 
based, which such security-based swap ref-
erences, or to which such security-based swap is 
related as described in section 3(a) of the Over- 
the-Counter Derivatives Markets Act of 2009, 
and any security-based swap agreement and 
any other instrument relating to such security 
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152 
or loan or group or index of securities or loans; 
or 
‘‘(B)(i) any security-based swap; 
‘‘(ii) any security or group or index of se-
curities, 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 section 3(a)(76) of the Se-
curities Exchange Act of 1934; and 
‘‘(iii) any security-based swap and any 
other instrument relating to the same security 
or group or index of securities. 
‘‘(d) LARGE TRADER REPORTING.—The Commis-
sion, by rule or regulation, may require any person that 
effects transactions for such person’s own account or the 
account of others in any securities-based swap or security- 
based swap agreement and any security or loan or group 
or index of securities or loans as set forth in paragraphs 
(a)(1) and (2) under this section to report such informa-
tion as the Commission may prescribe regarding any posi-
tion or positions in any security-based swap or security- 
based swap agreement and any security or loan or group 
or index of securities or loans and any other instrument 
relating to such security or loan or group or index of secu-
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153 
rities or loans as set forth in paragraphs (a)(1) and (2) 
under this section.’’. 
(j) PUBLIC REPORTING AND REPOSITORIES FOR SE-
CURITY-BASED SWAP AGREEMENTS.—Section 13 of the 
Securities Exchange Act of 1934 (15 U.S.C. 78m) is 
amended by adding at the end the following: 
‘‘(m) PUBLIC REPORTING OF AGGREGATE SECURITY- 
BASED SWAP DATA.— 
‘‘(1) IN GENERAL.—The Commission, or a per-
son designated by the Commission pursuant to para-
graph (2), shall make available to the public, in a 
manner that does not disclose the business trans-
actions and market positions of any person, aggre-
gate data on security-based swap trading volumes 
and positions from the sources set forth in para-
graph (3). 
‘‘(2) DESIGNEE
OF
THE
COMMISSION.—The 
Commission may designate a clearing agency or a 
security-based swap repository to carry out the pub-
lic reporting described in paragraph (1). 
‘‘(3) SOURCES OF INFORMATION.—The sources 
of the information to be publicly reported as de-
scribed in paragraph (1) are— 
‘‘(A) clearing agencies pursuant to section 
3A; 
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154 
‘‘(B) security-based swap repositories pur-
suant to subsection (n); and 
‘‘(C) reports received by the Commission 
pursuant to section 13A. 
‘‘(n) SECURITY-BASED SWAP REPOSITORIES.— 
‘‘(1) REGISTRATION REQUIREMENT.— 
‘‘(A) IN GENERAL.—It shall be unlawful 
for a security-based swap repository, unless reg-
istered with the Commission, directly or indi-
rectly to make use of the mails or any means 
or instrumentality of interstate commerce to 
perform the functions of a security-based swap 
repository. 
‘‘(B) INSPECTION
AND
EXAMINATION.— 
Registered security-based swap repositories 
shall be subject to inspection and examination 
by any representatives of the Commission. 
‘‘(2) STANDARD SETTING.— 
‘‘(A) DATA
IDENTIFICATION.—The Com-
mission shall prescribe standards that specify 
the data elements for each security-based swap 
that shall be collected and maintained by each 
security-based swap repository. 
‘‘(B) DATA
COLLECTION
AND
MAINTE-
NANCE.—The Commission shall prescribe data 
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155 
collection and data maintenance standards for 
security-based swap repositories. 
‘‘(C) 
COMPARABILITY.—The 
standards 
prescribed by the Commission under this sub-
section shall be comparable to the data stand-
ards imposed by the Commission on clearing 
agencies that clear security-based swaps. 
‘‘(3) DUTIES.—A security-based swap reposi-
tory shall— 
‘‘(A) accept data prescribed by the Com-
mission for each security-based swap under this 
paragraph (2); 
‘‘(B) maintain such data in such form and 
manner and for such period as may be required 
by the Commission; 
‘‘(C) provide to the Commission, or its des-
ignee, such information as is required by, and 
in a form and at a frequency to be determined 
by, the Commission, in order to comply with the 
public reporting requirements contained in sub-
section (m); and 
‘‘(D) make available, on a confidential 
basis, all data obtained by the security-based 
swap repository, including individual counter-
party trade and position data, to the Commis-
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156 
sion, the appropriate Federal banking agencies, 
the Commodity Futures Trading Commission, 
the Financial Services Oversight Council, and 
the Department of Justice or to other persons 
the Commission deems appropriate, including 
foreign financial supervisors (including foreign 
futures authorities), foreign central banks, and 
foreign ministries. 
‘‘(4) REQUIRED REGISTRATION FOR SECURITY- 
BASED SWAP REPOSITORIES.—Any person that is re-
quired to be registered as a securities-based swap re-
pository under this subsection shall register with the 
Commission, regardless of whether that person also 
is registered with the Commodity Futures Trading 
Commission as a swap repository. 
‘‘(5) HARMONIZATION
OF
RULES.—Not later 
than 180 days after the date of enactment of the 
Over-the-Counter Derivatives Markets Act of 2009, 
the Commission and the Commodity Futures Trad-
ing Commission shall jointly adopt uniform rules 
governing persons that are registered under this sec-
tion and persons that are registered as swap reposi-
tories under the Commodity Exchange Act (7 U.S.C. 
1, et seq.), including uniform rules that specify the 
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157 
data elements that shall be collected and maintained 
by each repository. 
‘‘(6) EXEMPTIONS.—The Commission may ex-
empt, conditionally or unconditionally, a security- 
based swap repository from the requirements of this 
section if the Commission finds that such security- 
based swap repository is subject to comparable, com-
prehensive supervision or regulation on a consoli-
dated basis by the Commodity Futures Trading 
Commission, a Prudential Regulator or the appro-
priate governmental authorities in the organization’s 
home country.’’. 
SEC. 154. REGISTRATION AND REGULATION OF SWAP DEAL-
ERS AND MAJOR SWAP PARTICIPANTS. 
The Securities Exchange Act of 1934 (15 U.S.C. 78a, 
et seq.) is amended by inserting after section 15E (15 
U.S.C. 78o–7) the following: 
‘‘SEC. 15F. REGISTRATION AND REGULATION OF SECURITY- 
BASED SWAP DEALERS AND MAJOR SECU-
RITY-BASED SWAP PARTICIPANTS. 
‘‘(a) REGISTRATION.— 
‘‘(1) It shall be unlawful for any person to act 
as a security-based swap dealer unless such person 
is registered as a security-based swap dealer with 
the Commission. 
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158 
‘‘(2) It shall be unlawful for any person to act 
as a major security-based swap participant unless 
such person is registered as a major security-based 
swap participant with the Commission. 
‘‘(b) REQUIREMENTS.— 
‘‘(1) IN GENERAL.—A person shall register as 
a security-based swap dealer or major security-based 
swap participant by filing a registration application 
with the Commission. 
‘‘(2) CONTENTS.—The application shall be 
made in such form and manner as prescribed by the 
Commission, giving any information and facts as the 
Commission may deem necessary concerning the 
business in which the applicant is or will be engaged. 
Such person, when registered as a security-based 
swap dealer or major security-based swap partici-
pant, shall continue to report and furnish to the 
Commission such information pertaining to such 
person’s business as the Commission may require. 
‘‘(3) EXPIRATION.—Each registration shall ex-
pire at such time as the Commission may by rule or 
regulation prescribe. 
‘‘(4) RULES.—Except as provided in sub-
sections (c), (d) and (e), the Commission may pre-
scribe rules applicable to security-based swap dealers 
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159 
and major security-based swap participants, includ-
ing rules that limit the activities of security-based 
swap dealers and major security-based swap partici-
pants. Except as provided in subsections (c) and (e), 
the Commission may provide conditional or uncondi-
tional exemptions from rules prescribed under this 
section for security-based swap dealers and major 
security-based swap participants that are subject to 
substantially similar requirements as brokers or 
dealers. 
‘‘(5) TRANSITION.—Rules adopted under this 
section shall provide for the registration of security- 
based swap dealers and major security-based swap 
participants no later than 1 year after the effective 
date of the Over-the-Counter Derivatives Markets 
Act of 2009. 
‘‘(c) DUAL REGISTRATION.— 
‘‘(1) SECURITY-BASED
SWAP
DEALERS.—Any 
person that is required to be registered as a secu-
rity-based swap dealer under this section shall reg-
ister with the Commission regardless of whether that 
person also is a bank or is registered with the Com-
modity Futures Trading Commission as a swap deal-
er. 
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160 
‘‘(2) MAJOR
SECURITY-BASED
SWAP
PARTICI-
PANTS.—Any person that is required to be reg-
istered as a major security-based swap participant 
under this section shall register with the Commis-
sion regardless of whether that person also is a bank 
or is registered with the Commodity Futures Trad-
ing Commission as a major swap participant. 
‘‘(d) JOINT RULES.— 
‘‘(1) IN GENERAL.—Not later than 180 days 
after the effective date of the Over-the-Counter De-
rivatives Markets Act of 2009, the Commission and 
the Commodity Futures Trading Commission shall 
jointly adopt uniform rules for persons that are reg-
istered as security-based swap dealers or major secu-
rity-based swap participants under this Act and per-
sons that are registered as swap dealers or major 
swap participants under the Commodity Exchange 
Act (7 U.S.C. 1, et seq.). 
‘‘(2) EXCEPTION FOR PRUDENTIAL REQUIRE-
MENTS.—The Commission and the Commodity Fu-
tures Trading Commission shall not prescribe rules 
imposing prudential requirements (including activity 
restrictions) on security-based swap dealers or major 
security-based swap participants for which there is a 
Prudential Regulator. This provision shall not be 
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161 
construed as limiting the authority of the Commis-
sion and the Commodity Futures Trading Commis-
sion to prescribe appropriate business conduct, re-
porting, and recordkeeping requirements to protect 
investors. 
‘‘(e) CAPITAL AND MARGIN REQUIREMENTS.— 
‘‘(1) IN GENERAL.— 
‘‘(A) BANK SECURITY-BASED SWAP DEAL-
ERS AND MAJOR SECURITY-BASED SWAP PAR-
TICIPANTS.—Each 
registered 
security-based 
swap dealer and major security-based swap par-
ticipant for which there is a Prudential Regu-
lator shall meet such minimum capital require-
ments and minimum initial and variation mar-
gin requirements as the Prudential Regulators 
shall by rule or regulation jointly prescribe to 
help ensure the safety and soundness of the se-
curity-based swap dealer or major security- 
based swap participant. 
‘‘(B) NONBANK
SECURITY-BASED
SWAP 
DEALERS
AND
MAJOR
SECURITY-BASED
SWAP 
PARTICIPANTS.—Each registered security-based 
swap dealer and major security-based swap par-
ticipant for which there is not a Prudential 
Regulator shall meet such minimum capital re-
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162 
quirements and minimum initial and variation 
margin requirements as the Commission and 
the Commodity Futures Trading Commission 
shall by rule or regulation jointly prescribe to 
help ensure the safety and soundness of the se-
curity-based swap dealer or major security- 
based swap participant. 
‘‘(2) JOINT RULES.— 
‘‘(A) BANK SECURITY-BASED SWAP DEAL-
ERS AND MAJOR SECURITY-BASED SWAP PAR-
TICIPANTS.—Within 180 days of the enactment 
of the Over-the-Counter Derivatives Markets 
Act of 2009, the Prudential Regulators, in con-
sultation with the Commission and the Com-
modity Futures Trading Commission, shall 
jointly adopt rules imposing capital and margin 
requirements under this subsection for security- 
based swap dealers and major security-based 
swap participants. 
‘‘(B) NONBANK
SECURITY-BASED
SWAP 
DEALERS
AND
MAJOR
SECURITY-BASED
SWAP 
PARTICIPANTS.—Within 180 days of the enact-
ment of the Over-the-Counter Derivatives Mar-
kets Act of 2009, the Commission and the 
Commodity Futures Trading Commission, in 
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163 
consultation with the Prudential Regulators, 
shall jointly adopt rules imposing capital and 
margin requirements under this subsection for 
security-based swap dealers and major security- 
based swap participants for which there is no 
Prudential Regulator. 
‘‘(3) CAPITAL.— 
‘‘(A) BANK SECURITY-BASED SWAP DEAL-
ERS AND MAJOR SECURITY-BASED SWAP PAR-
TICIPANTS.—In setting capital requirements 
under this subsection, the Prudential Regu-
lators shall impose— 
‘‘(i) a capital requirement that is 
greater than zero for security-based swaps 
that are cleared by a clearing agency; and 
‘‘(ii) to offset the greater risk to the 
security-based swap dealer or major secu-
rity-based swap participant and to the fi-
nancial system arising from the use of se-
curity-based swaps that are not centrally 
cleared, higher capital requirements for se-
curity-based swaps that are not cleared by 
a clearing agency than for security-based 
swaps that are centrally cleared. 
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164 
‘‘(B) NONBANK
SECURITY-BASED
SWAP 
DEALERS
AND
MAJOR
SECURITY-BASED
SWAP 
PARTICIPANTS.—Capital requirements set by 
the Commission and the Commodity Futures 
Trading Commission under this subsection shall 
be as strict as or stricter than the capital re-
quirements set by the Prudential Regulators 
under this subsection. 
‘‘(C) BANK HOLDING COMPANIES.—Capital 
requirements set by the Board for security- 
based swaps of bank holding companies on a 
consolidated basis shall be as strict as or strict-
er than the capital requirements set by the Pru-
dential Regulators under this subsection. 
‘‘(4) MARGIN.— 
‘‘(A) BANK SECURITY-BASED SWAP DEAL-
ERS AND MAJOR SECURITY-BASED SWAP PAR-
TICIPANTS.—The Prudential Regulators shall 
impose both initial and variation margin re-
quirements under this subsection on all secu-
rity-based swaps that are not cleared by a reg-
istered clearing agency. 
‘‘(B) NON-SWAP
DEALERS
AND
MAJOR 
MARKET PARTICIPANTS.—The Prudential Regu-
lators may, but are not required to, impose 
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165 
margin requirements with respect to security- 
based swaps in which one of the counterparties 
is not a swap dealer, major swap participant, 
security-based swap dealer or major security- 
based swap participant. Margin requirements 
for swaps set by the Commission and the Com-
modity Futures Trading Commission shall pro-
vide for the use of non-cash assets as collateral. 
‘‘(C) NONBANK
SECURITY-BASED
SWAP 
DEALERS
AND
MAJOR
SECURITY-BASED
SWAP 
PARTICIPANTS.—Margin requirements for secu-
rity-based swaps set by the Commission and the 
Commodity Futures Trading Commission under 
this subsection shall be as strict as or stricter 
than margin requirements for security-based 
swaps set by the Prudential Regulators. 
‘‘(f) REPORTING AND RECORDKEEPING.— 
‘‘(1) IN GENERAL.—Each registered security- 
based swap dealer and major security-based swap 
participant— 
‘‘(A) shall make such reports as are pre-
scribed by the Commission by rule or regulation 
regarding the transactions and positions and fi-
nancial condition of such person; 
‘‘(B) for which— 
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166 
‘‘(i) there is a Prudential Regulator, 
shall keep books and records of all activi-
ties related to its business as a security- 
based swap dealer or major security-based 
swap participant in such form and manner 
and for such period as may be prescribed 
by the Commission by rule or regulation; 
or 
‘‘(ii) there is no Prudential Regulator, 
shall keep books and records in such form 
and manner and for such period as may be 
prescribed by the Commission by rule or 
regulation; 
‘‘(C) shall keep such books and records 
open to inspection and examination by any rep-
resentative of the Commission; and 
‘‘(D) shall keep any such books and 
records relating to transactions in swaps based 
on 1 or more securities open to inspection and 
examination by the Commission. 
‘‘(2) RULES.—Not later than 1 year after the 
date of enactment of the Over-the-Counter Deriva-
tives Markets Act of 2009, the Commission and the 
Commodity Futures Trading Commission, in con-
sultation with the appropriate Federal banking agen-
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167 
cies, shall jointly adopt rules governing reporting 
and recordkeeping for swap dealers, major swap par-
ticipants, security-based swap dealers and major se-
curity-based swap participants. 
‘‘(g) DAILY TRADING RECORDS.— 
‘‘(1) IN GENERAL.—Each registered security- 
based swap dealer and major security-based swap 
participant shall maintain daily trading records of 
its security-based swaps and all related records (in-
cluding related transactions) and recorded commu-
nications including but not limited to electronic mail, 
instant messages, and recordings of telephone calls, 
for such period as may be prescribed by the Com-
mission by rule or regulation. 
‘‘(2) INFORMATION REQUIREMENTS.—The daily 
trading records shall include such information as the 
Commission shall prescribe by rule or regulation. 
‘‘(3) CUSTOMER RECORDS.—Each registered se-
curity-based swap dealer or major security-based 
swap participant shall maintain daily trading records 
for each customer or counterparty in such manner 
and form as to be identifiable with each security- 
based swap transaction. 
‘‘(4) AUDIT TRAIL.—Each registered security- 
based swap dealer or major security-based swap par-
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168 
ticipant shall maintain a complete audit trail for 
conducting comprehensive and accurate trade recon-
structions. 
‘‘(5) RULES.—Not later than 1 year after the 
date of enactment of the Over-the-Counter Deriva-
tives Markets Act of 2009, the Commission and the 
Commodity Futures Trading Commission, in con-
sultation with the appropriate Federal banking agen-
cies, shall jointly adopt rules governing daily trading 
records for swap dealers, major swap participants, 
security-based swap dealers, and major security- 
based swap participants. 
‘‘(h) BUSINESS CONDUCT STANDARDS.— 
‘‘(1) IN GENERAL.—Each registered security- 
based swap dealer and major security-based swap 
participant shall conform with business conduct 
standards as may be prescribed by the Commission 
by rule or regulation addressing— 
‘‘(A) fraud, manipulation, and other abu-
sive practices involving security-based swaps 
(including security-based swaps that are offered 
but not entered into); 
‘‘(B) diligent supervision of its business as 
a security-based swap dealer; 
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169 
‘‘(C) adherence to all applicable position 
limits; and 
‘‘(D) such other matters as the Commis-
sion shall determine to be necessary or appro-
priate. 
‘‘(2) BUSINESS
CONDUCT
REQUIREMENTS.— 
Business conduct requirements adopted by the Com-
mission shall— 
‘‘(A) establish the standard of care for a 
security-based swap dealer or major security- 
based swap participant to verify that any secu-
rity-based swap counterparty meets the eligi-
bility standards for an eligible contract partici-
pant; 
‘‘(B) require disclosure by the security- 
based swap dealer or major security-based swap 
participant to any counterparty to the security- 
based swap (other than a swap dealer, major 
swap participant, security-based swap dealer or 
major security-based swap participant) of— 
‘‘(i) information about the material 
risks and characteristics of the security- 
based swap; 
‘‘(ii) the source and amount of any 
fees or other material remuneration that 
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170 
the security-based swap dealer or major se-
curity-based swap participant would di-
rectly or indirectly expect to receive in con-
nection with the security-based swap; and 
‘‘(iii) any other material incentives or 
conflicts of interest that the security-based 
swap dealer or major security-based swap 
participant may have in connection with 
the security-based swap; and 
‘‘(C) establish such other standards and 
requirements as the Commission may determine 
are necessary or appropriate in the public inter-
est, for the protection of investors, or otherwise 
in furtherance of the purposes of this title. 
‘‘(3) RULES.—Not later than 1 year after the 
date of enactment of the Over-the-Counter Deriva-
tives Markets Act of 2009, the Commission and the 
Commodity Futures Trading Commission, in con-
sultation with the appropriate Federal banking agen-
cies, shall jointly prescribe rules under this sub-
section governing business conduct standards for 
swap dealers, major swap participants, security- 
based swap dealers, and major security-based swap 
participants. 
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171 
‘‘(i) DOCUMENTATION AND BACK OFFICE STAND-
ARDS.— 
‘‘(1) IN GENERAL.—Each registered security- 
based swap dealer and major security-based swap 
participant shall conform with standards, as may be 
prescribed by the Commission by rule or regulation, 
addressing timely and accurate confirmation, proc-
essing, netting, documentation, and valuation of all 
security-based swaps. 
‘‘(2) RULES.—Not later than 1 year after the 
date of enactment of the Over-the-Counter Deriva-
tives Markets Act of 2009, the Commission and the 
Commodity Futures Trading Commission, in con-
sultation with the appropriate Federal banking agen-
cies, shall jointly adopt rules governing documenta-
tion and back office standards for swap dealers, 
major swap participants, security-based swap deal-
ers, and major security-based swap participants. 
‘‘(j) DEALER RESPONSIBILITIES.—Each registered 
security-based swap dealer and major security-based swap 
participant at all times shall comply with the following re-
quirements: 
‘‘(1) MONITORING OF TRADING.—The security- 
based swap dealer or major security-based swap par-
ticipant shall monitor its trading in security-based 
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172 
swaps to prevent violations of applicable position 
limits. 
‘‘(2) DISCLOSURE
OF
GENERAL
INFORMA-
TION.—The security-based swap dealer or major se-
curity-based swap participant shall disclose to the 
Commission and to the Prudential Regulator for 
such security-based swap dealer or major security- 
based swap participant, as applicable, information 
concerning— 
‘‘(A) terms and conditions of its security- 
based swaps; 
‘‘(B) security-based swap trading oper-
ations, mechanisms, and practices; 
‘‘(C) financial integrity protections relating 
to security-based swaps; and 
‘‘(D) other information relevant to its trad-
ing in security-based swaps. 
‘‘(3) ABILITY TO OBTAIN INFORMATION.—The 
security-based swap dealer or major swap security- 
based participant shall— 
‘‘(A) establish and enforce internal systems 
and procedures to obtain any necessary infor-
mation to perform any of the functions de-
scribed in this section; and 
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‘‘(B) provide the information to the Com-
mission and to the Prudential Regulator for 
such security-based swap dealer or major secu-
rity-based swap participant, as applicable, upon 
request. 
‘‘(4) CONFLICTS OF INTEREST.—The security- 
based swap dealer and major security-based swap 
participant shall implement conflict-of-interest sys-
tems and procedures that— 
‘‘(A) establish structural and institutional 
safeguards to assure that the activities of any 
person within the firm relating to research or 
analysis of the price or market for any security 
are separated by appropriate informational par-
titions within the firm from the review, pres-
sure, or oversight of those whose involvement in 
trading or clearing activities might potentially 
bias their judgment or supervision; and 
‘‘(B) address such other issues as the 
Commission determines appropriate. 
‘‘(5) 
ANTITRUST
CONSIDERATIONS.—Unless 
necessary or appropriate to achieve the purposes of 
this Act, the security-based swap dealer or major se-
curity-based swap participant shall avoid— 
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‘‘(A) adopting any processes or taking any 
actions that result in any unreasonable re-
straints of trade; or 
‘‘(B) imposing any material anticompeti-
tive burden on trading. 
‘‘(k) RULES.—The Commission, the Commodity Fu-
tures Trading Commission, and the Prudential Regulators 
shall consult with each other prior to adopting any rules 
under the Over-the-Counter Derivatives Markets Act of 
2009. 
‘‘(l) STATUTORY DISQUALIFICATION.—Except to the 
extent otherwise specifically provided by rule, regulation, 
or order of the Commission, it shall be unlawful for a secu-
rity-based swap dealer or a major security-based swap par-
ticipant to permit any person associated with a security- 
based swap dealer or a major security-based swap partici-
pant who is subject to a statutory disqualification to effect 
or be involved in effecting security-based swaps on behalf 
of such security-based swap dealer or major security-based 
swap participant, if such security-based swap dealer or 
major security-based swap participant knew, or in the ex-
ercise of reasonable care should have known, of such stat-
utory disqualification. 
‘‘(m) ENFORCEMENT
AND ADMINISTRATIVE PRO-
CEEDING AUTHORITY.— 
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