425 
(ii) the transfer includes any qualified 
financial contract, 
the receiver shall notify any person who is a 
party to any such contract of such transfer by 
5:00 p.m. (eastern time) on the business day 
following the date of the appointment of the re-
ceiver. 
(B) CERTAIN
RIGHTS
NOT
ENFORCE-
ABLE.— 
(i) RECEIVERSHIP.—A person who is 
a party to a qualified financial contract 
with a covered financial company may not 
exercise any right that such person has to 
terminate, liquidate, or net such contract 
under paragraph (8)(A) of this subsection 
solely by reason of or incidental to the ap-
pointment under this section of a receiver 
for the covered financial company (or the 
insolvency or financial condition of the cov-
ered financial company for which the re-
ceiver has been appointed)— 
(I) until 5:00 p.m. (eastern time) 
on the business day following the date 
of the appointment of the receiver; or
426 
(II) after the person has received 
notice that the contract has been 
transferred pursuant to paragraph 
(9)(A). 
(ii) NOTICE.—For purposes of this 
paragraph, the receiver for a covered fi-
nancial company shall be deemed to have 
notified a person who is a party to a quali-
fied financial contract with such covered fi-
nancial company if the receiver has taken 
steps reasonably calculated to provide no-
tice to such person by the time specified in 
subparagraph (A). 
(C) TREATMENT
OF
BRIDGE
FINANCIAL 
COMPANY.—For purposes of paragraph (9), a 
bridge financial company shall not be consid-
ered to be a financial institution for which a 
conservator, receiver, trustee in bankruptcy, or 
other legal custodian has been appointed or 
which is otherwise the subject of a bankruptcy 
or insolvency proceeding. 
(D) BUSINESS DAY DEFINED.—For pur-
poses of this paragraph, the term ‘‘business 
day’’ means any day other than any Saturday, 
Sunday, or any day on which either the New
427 
York Stock Exchange or the Federal Reserve 
Bank of New York is closed. 
(11) DISAFFIRMANCE
OR
REPUDIATION
OF 
QUALIFIED
FINANCIAL
CONTRACTS.—In exercising 
the rights of disaffirmance or repudiation of a re-
ceiver with respect to any qualified financial contract 
to which a covered financial company is a party, the 
receiver for such covered financial shall either— 
(A) disaffirm or repudiate all qualified fi-
nancial contracts between— 
(i) any person or any affiliate of such 
person; and 
(ii) the covered financial company in 
default; or 
(B) disaffirm or repudiate none of the 
qualified financial contracts referred to in sub-
paragraph (A) (with respect to such person or 
any affiliate of such person). 
(12) CERTAIN
SECURITY
AND
CUSTOMER
IN-
TERESTS
NOT
AVOIDABLE.—No provision of this 
subsection shall be construed as permitting the 
avoidance of any— 
(A) legally enforceable or perfected secu-
rity interest in any of the assets of any covered 
financial company except where such an inter-
428 
est is taken in contemplation of the company’s 
insolvency or with the intent to hinder, delay, or 
defraud the company or the creditors of such 
company; or 
(B) legally enforceable interest in customer 
property. 
(13) AUTHORITY TO ENFORCE CONTRACTS.— 
(A) IN GENERAL.—The receiver may en-
force any contract, other than a director’s or of-
ficer’s liability insurance contract or a financial 
institution bond, entered into by the covered fi-
nancial company notwithstanding any provision 
of the contract providing for termination, de-
fault, acceleration, or exercise of rights upon, or 
solely by reason of, insolvency or the appoint-
ment of or the exercise of rights or powers by 
a receiver. 
(B) CERTAIN
RIGHTS
NOT
AFFECTED.— 
No provision of this paragraph may be con-
strued as impairing or affecting any right of the 
receiver to enforce or recover under a director’s 
or officer’s liability insurance contract or finan-
cial institution bond under other applicable law. 
(C) CONSENT REQUIREMENT.—
429 
(i) IN GENERAL.—Except as otherwise 
provided by this section, no person may ex-
ercise any right or power to terminate, ac-
celerate, or declare a default under any 
contract to which the covered financial 
company is a party, or to obtain possession 
of or exercise control over any property of 
the covered financial company or affect 
any contractual rights of the covered finan-
cial company, without the consent of the 
receiver, as appropriate, of the covered fi-
nancial company during the 90-day period 
beginning on the date of the appointment 
of the receiver, as applicable. 
(ii) CERTAIN EXCEPTIONS.—No provi-
sion of this subparagraph shall apply to a 
director or officer liability insurance con-
tract or a financial institution bond, to the 
rights of parties to certain qualified finan-
cial contracts pursuant to paragraph (8), 
or to the rights of parties to netting con-
tracts pursuant to subtitle A of title IV of 
the Federal Deposit Insurance Corporation 
Improvement Act of 1991 (12 U.S.C. 4401 
et seq.), or shall be construed as permit-
430 
ting the receiver to fail to comply with oth-
erwise enforceable provisions of such con-
tract. 
(14) EXCEPTION
FOR
FEDERAL
RESERVE 
BANKS AND CORPORATION SECURITY INTEREST.— 
No provision of this subsection shall apply with re-
spect to— 
(A) any extension of credit from any Fed-
eral Reserve bank or the Corporation to any 
covered financial company; or 
(B) any security interest in the assets of 
the covered financial company securing any 
such extension of credit. 
(15) SAVINGS CLAUSE.—The meanings of terms 
used in this subsection are applicable for purposes of 
this subsection only, and shall not be construed or 
applied so as to challenge or affect the characteriza-
tion, definition, or treatment of any similar terms 
under any other statute, regulation, or rule, includ-
ing, but not limited, to the Gramm-Leach-Bliley Act, 
the Legal Certainty for Bank Products Act of 2000, 
the securities laws (as that term is defined in section 
3(a)(47) of the Securities Exchange Act of 1934), 
and the Commodity Exchange Act.
431 
(16) AUTHORITY REGARDING COLLECTIVE BAR-
GAINING
AGREEMENTS.—The Corporation as re-
ceiver for any covered financial company shall not 
disaffirm or repudiate any collective bargaining 
agreement to which the covered financial company is 
a party unless the Corporation determines that repu-
diation is necessary for the orderly resolution of the 
covered financial company after taking into consider-
ation the cost to taxpayers and the financial stability 
of the United States. 
(d) VALUATION OF CLAIMS IN DEFAULT.— 
(1) IN GENERAL.—Notwithstanding any other 
provision of Federal law or the law of any State, and 
regardless of the method which the Corporation de-
termines to utilize with respect to a covered financial 
company, including transactions authorized under 
subsection (h), this subsection shall govern the 
rights of the creditors of such covered financial com-
pany. 
(2) MAXIMUM
LIABILITY.—The maximum li-
ability of the Corporation, acting as receiver or in 
any other capacity, to any person having a claim 
against the receiver or the covered financial com-
pany for which such receiver is appointed shall equal 
the amount such claimant would have received if—
432 
(A) a determination had not been made 
under section 1603(b) with respect to the cov-
ered financial company; and 
(B) the covered financial company had 
been liquidated under title 11, United States 
Code, or any case related to title 11, United 
States Code (including a case initiated by the 
Securities Investor Protection Corporation with 
respect to a financial company subject to the 
Securities Investor Protection Act of 1970), or 
any State insolvency law. 
(3) ADDITIONAL PAYMENTS AUTHORIZED.— 
(A) IN GENERAL.—The Corporation may, 
as receiver and with the approval of the Sec-
retary, make additional payments or credit ad-
ditional amounts to or with respect to or for the 
account of any claimant or category of claim-
ants of a covered financial company if the Cor-
poration determines that such payments or 
credits are necessary or appropriate to— 
(i) minimize losses to the receiver 
from the dissolution of the covered finan-
cial company under this section; or
433 
(ii) prevent or mitigate serious ad-
verse effects to financial stability or the 
United States economy. 
(B) MANNER OF PAYMENT.—The Corpora-
tion may make payments or credit amounts 
under subparagraph (A) directly to the claim-
ants or may make such payments or credit such 
amounts to a company other than a covered fi-
nancial company or a bridge financial company 
established with respect thereto in order to in-
duce such other company to accept liability for 
such claims. 
(e) LIMITATION ON COURT ACTION.—Except as pro-
vided in this section or at the request of the receiver ap-
pointed for a covered financial company, no court may 
take any action to restrain or affect the exercise of powers 
or functions of the receiver hereunder. 
(f) LIABILITY OF DIRECTORS AND OFFICERS.— 
(1) IN GENERAL.—A director or officer of a 
covered financial company may be held personally 
liable for monetary damages in any civil action de-
scribed in paragraph (2) by, on behalf of, or at the 
request or direction of the Corporation, which action 
is prosecuted wholly or partially for the benefit of 
the Corporation—
434 
(A) acting as receiver of such covered fi-
nancial company; 
(B) acting based upon a suit, claim, or 
cause of action purchased from, assigned by, or 
otherwise conveyed by such receiver; or 
(C) acting based upon a suit, claim, or 
cause of action purchased from, assigned by, or 
otherwise conveyed in whole or in part by a cov-
ered financial company or its affiliate in con-
nection with assistance provided under section 
1604. 
(2) ACTIONS
COVERED.—Paragraph (1) shall 
apply with respect to actions for gross negligence, 
including any similar conduct or conduct that dem-
onstrates a greater disregard of a duty of care (than 
gross negligence) including intentional tortious con-
duct, as such terms are defined and determined 
under applicable State law. 
(3) SAVINGS
CLAUSE.—Nothing in this sub-
section shall impair or affect any right of the Cor-
poration under other applicable law. 
(g) DAMAGES.—In any proceeding related to any 
claim against a covered financial company’s director, offi-
cer, employee, agent, attorney, accountant, appraiser, or 
any other party employed by or providing services to a
435 
covered financial company, recoverable damages deter-
mined to result from the improvident or otherwise im-
proper use or investment of any covered financial com-
pany’s assets shall include principal losses and appropriate 
interest. 
(h) BRIDGE FINANCIAL COMPANIES.— 
(1) ORGANIZATION.— 
(A) PURPOSE.—The Corporation, as re-
ceiver of one or more covered financial compa-
nies may organize one or more bridge financial 
companies in accordance with this subsection. 
(B) AUTHORITIES.—Upon the creation of 
a bridge financial company under subparagraph 
(A) with respect to a covered financial com-
pany, such bridge financial company may— 
(i) assume such liabilities (including 
liabilities associated with any trust or cus-
tody business but excluding any liabilities 
that count as regulatory capital) of such 
covered financial company as the Corpora-
tion may, in its discretion, determine to be 
appropriate; 
(ii) purchase such assets (including 
assets associated with any trust or custody 
business) of such covered financial com-
436 
pany as the Corporation may, in its discre-
tion, determine to be appropriate; and 
(iii) perform any other temporary 
function which the Corporation may, in its 
discretion, prescribe in accordance with 
this section. 
(2) CHARTER AND ESTABLISHMENT.— 
(A) ESTABLISHMENT.—If the Corporation 
is appointed as receiver for a covered financial 
company, the Corporation may grant a Federal 
charter to and approve articles of association 
for one or more bridge financial company or 
companies with respect to such covered finan-
cial company which shall, by operation of law 
and immediately upon issuance of its charter 
and approval of its articles of association, be es-
tablished and operate in accordance with, and 
subject to, such charter, articles, and this sec-
tion. 
(B) MANAGEMENT.—Upon its establish-
ment, a bridge financial company shall be under 
the management of a board of directors ap-
pointed by the Corporation. 
(C) ARTICLES OF ASSOCIATION.—The arti-
cles of association and organization certificate
437 
of a bridge financial shall have such terms as 
the Corporation may provide, and shall be exe-
cuted by such representatives as the Corpora-
tion may designate. 
(D) TERMS
OF
CHARTER; RIGHTS
AND 
PRIVILEGES.—Subject to and in accordance 
with the provisions of this subsection, the Cor-
poration shall— 
(i) establish the terms of the charter 
of a bridge financial company and the 
rights, powers, authorities and privileges of 
a bridge financial company granted by the 
charter or as an incident thereto; and 
(ii) provide for, and establish the 
terms and conditions governing, the man-
agement (including, but not limited to, the 
bylaws and the number of directors of the 
board of directors) and operations of the 
bridge financial company. 
(E) TRANSFER
OF
RIGHTS
AND
PRIVI-
LEGES OF COVERED FINANCIAL COMPANY.— 
(i) IN
GENERAL.—Notwithstanding 
any other provision of Federal law or the 
law of any State, the Corporation may pro-
vide for a bridge financial company to suc-
438 
ceed to and assume any rights, powers, au-
thorities or privileges of the covered finan-
cial company with respect to which the 
bridge financial company was established 
and, upon such determination by the Cor-
poration, the bridge financial company 
shall immediately and by operation of law 
succeed to and assume such rights, powers, 
authorities and privileges. 
(ii) 
EFFECTIVE
WITHOUT
AP-
PROVAL.—Any succession to or assumption 
by a bridge financial company of rights, 
powers, authorities or privileges of a cov-
ered financial company under clause (i) or 
otherwise shall be effective without any 
further approval under Federal or State 
law, assignment, or consent with respect 
thereto. 
(F) CORPORATE GOVERNANCE AND ELEC-
TION AND DESIGNATION OF BODY OF LAW.—To 
the extent permitted by the Corporation and 
consistent with this section and any rules, regu-
lations or directives issued by the Corporation 
under this section, a bridge financial company 
may elect to follow the corporate governance
439 
practices and procedures as are applicable to a 
corporation incorporated under the general cor-
poration law of the State of Delaware, or the 
State of incorporation or organization of the 
covered financial company with respect to which 
the bridge financial company was established, 
as such law may be amended from time to time. 
(G) CAPITAL.— 
(i) CAPITAL
NOT
REQUIRED.—Not-
withstanding any other provision of Fed-
eral or State law, a bridge financial com-
pany may, if permitted by the Corporation, 
operate without any capital or surplus, or 
with such capital or surplus as the Cor-
poration may in its discretion determine to 
be appropriate. 
(ii) NO CONTRIBUTION BY THE COR-
PORATION REQUIRED.—The Corporation is 
not required to pay capital into a bridge fi-
nancial company or to issue any capital 
stock on behalf of a bridge financial com-
pany established under this subsection. 
(iii) AUTHORITY.—If the Corporation 
determines that such action is advisable, 
the Corporation may cause capital stock or
440 
other securities of a bridge financial com-
pany established with respect to a covered 
financial company to be issued and offered 
for sale in such amounts and on such 
terms and conditions as the Corporation 
may, in its discretion, determine. 
(3) INTERESTS IN AND ASSETS AND OBLIGA-
TIONS OF COVERED FINANCIAL COMPANY.—Notwith-
standing paragraph (1) or (2) or any other provision 
of law— 
(A) a bridge financial company shall as-
sume, acquire, or succeed to the assets or liabil-
ities of a covered financial company (including 
the assets or liabilities associated with any trust 
or custody business) only to the extent that 
such assets or liabilities are transferred by the 
Corporation to the bridge financial company in 
accordance with, and subject to the restrictions 
set forth in, paragraph (1)(B); and 
(B) a bridge financial company shall not 
assume, acquire, or succeed to any obligation 
that a covered financial company for which a 
receiver has been appointed may have to any 
shareholder, member, general partner, limited 
partner, or other person with an interest in the
441 
equity of the covered financial company that 
arises as a result of the status of that person 
having an equity claim in the covered financial 
company. 
(4) BRIDGE FINANCIAL COMPANY TREATED AS 
BEING
IN
DEFAULT
FOR
CERTAIN
PURPOSES.—A 
bridge financial company shall be treated as a cov-
ered financial company in default at such times and 
for such purposes as the Corporation may, in its dis-
cretion, determine. 
(5) TRANSFER OF ASSETS AND LIABILITIES.— 
(A) TRANSFER
OF
ASSETS
AND
LIABIL-
ITIES.—The Corporation, as receiver, may 
transfer any assets and liabilities of a covered 
financial company (including any assets or li-
abilities associated with any trust or custody 
business) to one or more bridge financial com-
panies in accordance with and subject to the re-
strictions of paragraph (1)(B). 
(B) SUBSEQUENT
TRANSFERS.—At any 
time after the establishment of a bridge finan-
cial company with respect to a covered financial 
company, the Corporation, as receiver, may 
transfer any assets and liabilities of such cov-
ered financial company as the Corporation may,
442 
in its discretion, determine to be appropriate in 
accordance with and subject to the restrictions 
of paragraph (1)(B). 
(C) TREATMENT OF TRUST OR CUSTODY 
BUSINESS.—For purposes of this paragraph, 
the trust or custody business, including fidu-
ciary appointments, held by any covered finan-
cial company is included among its assets and 
liabilities. 
(D) EFFECTIVE
WITHOUT
APPROVAL.— 
The transfer of any assets or liabilities, includ-
ing those associated with any trust or custody 
business of a covered financial company to a 
bridge financial company shall be effective with-
out any further approval under Federal or 
State law, assignment, or consent with respect 
thereto. 
(E) EQUITABLE
TREATMENT
OF
SIMI-
LARLY
SITUATED
CREDITORS.—The Corpora-
tion shall treat all creditors of a covered finan-
cial company that are similarly situated under 
subsection (b)(1) in a similar manner in exer-
cising the authority of the Corporation under 
this subsection to transfer any assets or liabil-
ities of the covered financial company to one or
443 
more bridge financial companies established 
with respect to such covered financial company, 
except that the Corporation may take actions 
(including making payments) that do not com-
ply with this subparagraph, if— 
(i) the Corporation determines that 
such actions are necessary to maximize the 
value of the assets of the covered financial 
company, to maximize the present value 
return from the sale or other disposition of 
the assets of the covered financial com-
pany, to minimize the amount of any loss 
realized upon the sale or other disposition 
of the assets of the covered financial com-
pany, or to contain or address serious ad-
verse effects to financial stability or the 
United States economy; and 
(ii) all creditors that are similarly sit-
uated under subsection (b)(1) receive not 
less than the amount provided in sub-
section (d)(2). 
(F) LIMITATION ON TRANSFER OF LIABIL-
ITIES.—Notwithstanding any other provision of 
law, the aggregate amount of liabilities of a cov-
ered financial company that are transferred to,
444 
or assumed by, a bridge financial company from 
a covered financial company may not exceed the 
aggregate amount of the assets of the covered 
financial company that are transferred to, or 
purchased by, the bridge financial company 
from the covered financial company. 
(6) STAY OF JUDICIAL ACTION.—Any judicial 
action to which a bridge financial company becomes 
a party by virtue of its acquisition of any assets or 
assumption of any liabilities of a covered financial 
company shall be stayed from further proceedings 
for a period of up to 45 days (or such longer period 
as may be agreed to upon the consent of all parties) 
at the request of the bridge financial company. 
(7) AGREEMENTS AGAINST INTEREST OF THE 
BRIDGE FINANCIAL COMPANY.—No agreement that 
tends to diminish or defeat the interest of the bridge 
financial company in any asset of a covered financial 
company acquired by the bridge financial company 
shall be valid against the bridge financial company 
unless such agreement is in writing and executed by 
an authorized officer or representative of the covered 
financial company. 
(8) NO FEDERAL STATUS.—
445 
(A) AGENCY STATUS.—A bridge financial 
company is not an agency, establishment, or in-
strumentality of the United States. 
(B) EMPLOYEE STATUS.—Representatives 
for purposes of paragraph (1)(B), directors, of-
ficers, employees, or agents of a bridge financial 
company are not, solely by virtue of service in 
any such capacity, officers or employees of the 
United States. Any employee of the Corporation 
or of any Federal instrumentality who serves at 
the request of the Corporation as a representa-
tive for purposes of paragraph (1)(B), director, 
officer, employee, or agent of a bridge financial 
company shall not— 
(i) solely by virtue of service in any 
such capacity lose any existing status as 
an officer or employee of the United States 
for purposes of title 5, United States Code, 
or any other provision of law; or 
(ii) receive any salary or benefits for 
service in any such capacity with respect to 
a bridge financial company in addition to 
such salary or benefits as are obtained 
through employment with the Corporation 
or such Federal instrumentality.
446 
(9) EXEMPT TAX STATUS.— 
(A) EXEMPTION FROM FEDERAL INCOME 
TAX.—Subsection (l) of section 501 of the In-
ternal Revenue Code of 1986 is amended by 
adding at the end the following new paragraph: 
‘‘(4) Any bridge financial company organized 
under section 1609(h) of the Financial Stability Im-
provement Act of 2009.’’. 
(B) EXEMPTION
FROM
CERTAIN
OTHER 
TAXES.—Notwithstanding any other provision 
of Federal or State law, a bridge financial com-
pany, its franchise, property, and income shall 
be exempt from all taxation now or hereafter 
imposed by any territory, dependency, or pos-
session of the United States, or by any State, 
county, municipality, or local taxing authority. 
(10) FEDERAL AGENCY APPROVAL; ANTITRUST 
REVIEW.— 
(A) IN GENERAL.—If a transaction involv-
ing the merger or sale of a bridge financial 
company requires approval by a Federal agency, 
the transaction may not be consummated before 
the 5th calendar day after the date of approval 
by the Federal agency responsible for such ap-
proval with respect thereto. If, in connection
447 
with any such approval a report on competitive 
factors from the Attorney General is required, 
the Federal agency responsible for such ap-
proval shall promptly notify the Attorney Gen-
eral of the proposed transaction and the Attor-
ney General shall provide the required report 
within 10 days of the request. If notification 
under section 7A of the Clayton Act is required 
with respect to such transaction, then the re-
quired waiting period shall end on the 15th day 
after the date on which the Attorney General 
and the Federal Trade Commission receive such 
notification, unless the waiting period is termi-
nated earlier under subsection (b)(2) of such 
section, or is extended pursuant to subsection 
(e)(2) of such section. 
(B) EMERGENCY.—If the Secretary, in 
consultation with the Chairman of the Federal 
Reserve Board, has found that the Corporation 
must act immediately to prevent the probable 
failure of the covered financial company in-
volved, the approval and prior notification re-
ferred to in subparagraph (A) shall not be re-
quired and the transaction may be con-
summated immediately by the Corporation. The
448 
preceding sentence shall not otherwise modify, 
impair, or supercede the operation of any of the 
antitrust laws (as defined in subsection (a) of 
the first section of the Clayton Act, except that 
such term includes section 5 of the Federal 
Trade Commission Act to the extent that such 
section 5 relates to unfair methods of competi-
tion). 
(11) DURATION
OF
BRIDGE
FINANCIAL
COM-
PANY.—Subject to paragraphs (12), (13), and (14), 
the status of a bridge financial company as such 
shall terminate at the end of the 2-year period fol-
lowing the date it was granted a charter. The Cor-
poration may, in its discretion, extend the status of 
the bridge financial company as such for 3 addi-
tional 1-year periods. 
(12) TERMINATION OF BRIDGE FINANCIAL COM-
PANY STATUS.—The status of any bridge financial 
company as such shall terminate upon the earliest 
of— 
(A) the merger or consolidation of the 
bridge financial company with a company that 
is not a bridge financial company; 
(B) at the election of the Corporation, the 
sale of a majority of the capital stock of the
449 
bridge financial company to a company other 
than the Corporation and other than another 
bridge financial company; 
(C) the sale of 80 percent, or more, of the 
capital stock of the bridge financial company to 
a person other than the Corporation and other 
than another bridge financial company; 
(D) at the election of the Corporation, ei-
ther the assumption of all or substantially all of 
the liabilities of the bridge financial company by 
a company that is not a bridge financial com-
pany, or the acquisition of all or substantially 
all of the assets of the bridge financial company 
by a company that is not a bridge financial 
company, or other entity as permitted under 
applicable law; and 
(E) the expiration of the period provided in 
paragraph (11), or the earlier dissolution of the 
bridge financial company as provided in para-
graph (14). 
(13) EFFECT OF TERMINATION EVENTS.— 
(A) 
MERGER
OR
CONSOLIDATION.—A 
merger or consolidation as provided in para-
graph (12)(A) shall be conducted in accordance 
with, and shall have the effect provided in, the
450 
provisions of applicable law. For the purpose of 
effecting such a merger or consolidation, the 
bridge financial company shall be treated as a 
corporation organized under the laws of the 
State of Delaware (unless the law of another 
State has been selected by the bridge financial 
company in accordance with paragraph (2)(F)), 
and the Corporation shall be treated as the sole 
shareholder thereof, notwithstanding any other 
provision of State or Federal law. 
(B) CHARTER
CONVERSION.—Following 
the sale of a majority of the capital stock of the 
bridge financial company as provided in para-
graph (12)(B), the Corporation may amend the 
charter of the bridge financial company to re-
flect the termination of the status of the bridge 
financial company as such, whereupon the com-
pany shall have all of the rights, powers, and 
privileges under its constituent documents and 
applicable State or Federal law. In connection 
therewith, the Corporation may take such steps 
as may be necessary or convenient to reincor-
porate the bridge financial company under the 
laws of a State and, notwithstanding any provi-
sions of State or Federal law, such State-char-
451 
tered corporation shall be deemed to succeed by 
operation of law to such rights, titles, powers 
and interests of the bridge financial company as 
the Corporation may provide, with the same ef-
fect as if the bridge financial company had 
merged with the State-chartered corporation 
under provisions of the corporate laws of such 
State. 
(C) SALE OF STOCK.—Following the sale 
of 80 percent or more of the capital stock of a 
bridge financial company as provided in para-
graph (12)(C), the company shall have all of 
the rights, powers, and privileges under its con-
stituent documents and applicable State or Fed-
eral law. In connection therewith, the Corpora-
tion may take such steps as may be necessary 
or convenient to reincorporate the bridge finan-
cial company under the laws of a State and, 
notwithstanding any provisions of State or Fed-
eral law, the State-chartered corporation shall 
be deemed to succeed by operation of law to 
such rights, titles, powers and interests of the 
bridge financial company as the Corporation 
may provide, with the same effect as if the 
bridge financial company had merged with the
452 
State-chartered corporation under provisions of 
the corporate laws of such State. 
(D) ASSUMPTION
OF
LIABILITIES
AND 
SALE OF ASSETS.—Following the assumption of 
all or substantially all of the liabilities of the 
bridge financial company, or the sale of all or 
substantially all of the assets of the bridge fi-
nancial company, as provided in paragraph 
(12)(D), at the election of the Corporation the 
bridge financial company may retain its status 
as such for the period provided in paragraph 
(11) or may be dissolved at the election of the 
Corporation. 
(E) AMENDMENTS
TO
CHARTER.—Fol-
lowing the consummation of a transaction de-
scribed in subparagraph (A), (B), (C), or (D) 
of paragraph (12), the charter of the resulting 
company shall be amended to reflect the termi-
nation of bridge financial company status, if ap-
propriate. 
(14) DISSOLUTION OF BRIDGE FINANCIAL COM-
PANY.— 
(A) IN
GENERAL.—Notwithstanding any 
other provision of State or Federal law, if a 
bridge financial company’s status as such has
453 
not previously been terminated by the occur-
rence of an event specified in subparagraph (A), 
(B), (C), or (D) of paragraph (12)— 
(i) the Corporation may, in its discre-
tion, dissolve the bridge financial company 
in accordance with this paragraph at any 
time; and 
(ii) the Corporation shall promptly 
commence dissolution proceedings in ac-
cordance with this paragraph upon the ex-
piration of the 2-year period following the 
date the bridge financial company was 
chartered, or any extension thereof, as pro-
vided in paragraph (11). 
(B) PROCEDURES.—The Corporation shall 
remain the receiver of a bridge financial com-
pany for the purpose of dissolving the bridge fi-
nancial company. The Corporation as such re-
ceiver shall wind up the affairs of the bridge fi-
nancial company in conformity with the provi-
sions of law relating to the liquidation of cov-
ered financial companies. With respect to any 
such bridge financial company, the Corporation 
as receiver shall have all the rights, powers, and 
privileges and shall perform the duties related
454 
to the exercise of such rights, powers, or privi-
leges granted by law to a receiver of a covered 
financial company and, notwithstanding any 
other provision of law, in the exercise of such 
rights, powers, and privileges the Corporation 
shall not be subject to the direction or super-
vision of any State agency or other Federal 
agency. 
(15) AUTHORITY TO OBTAIN CREDIT.— 
(A) IN GENERAL.—A bridge financial com-
pany may obtain unsecured credit and issue un-
secured debt. 
(B) INABILITY TO OBTAIN CREDIT.—If a 
bridge financial company is unable to obtain 
unsecured credit or issue unsecured debt, the 
Corporation may authorize the obtaining of 
credit or the issuance of debt by the bridge fi-
nancial company— 
(i) with priority over any or all of the 
obligations of the bridge financial com-
pany; 
(ii) secured by a lien on property of 
the bridge financial company that is not 
otherwise subject to a lien; or
455 
(iii) secured by a junior lien on prop-
erty of the bridge financial company that 
is subject to a lien. 
(C) LIMITATIONS.— 
(i) IN
GENERAL.—The Corporation, 
after notice and a hearing, may authorize 
the obtaining of credit or the issuance of 
debt by a bridge financial company that is 
secured by a senior or equal lien on prop-
erty of the bridge financial company that 
is subject to a lien only if— 
(I) the bridge financial company 
is unable to otherwise obtain such 
credit or issue such debt; and 
(II) there is adequate protection 
of the interest of the holder of the lien 
on the property with respect to which 
such senior or equal lien is proposed 
to be granted. 
(D) BURDEN OF PROOF.—In any hearing 
under this subsection, the Corporation has the 
burden of proof on the issue of adequate protec-
tion. 
(16) EFFECT ON DEBTS AND LIENS.—The re-
versal or modification on appeal of an authorization
456 
under this subsection to obtain credit or issue debt, 
or of a grant under this section of a priority or a 
lien, does not affect the validity of any debt so 
issued, or any priority or lien so granted, to an enti-
ty that extended such credit in good faith, whether 
or not such entity knew of the pendency of the ap-
peal, unless such authorization and the issuance of 
such debt, or the granting of such priority or lien, 
were stayed pending appeal. 
(i) SHARING RECORDS.—Whenever the Corporation 
has been appointed as receiver for a covered financial com-
pany, the Federal Reserve Board and the company’s pri-
mary appropriate regulatory agency, if any, shall each 
make all records relating to the company available to the 
receiver which may be used by the receiver in any manner 
the receiver determines to be appropriate. 
(j) 
EXPEDITED
PROCEDURES
FOR
CERTAIN 
CLAIMS.— 
(1) TIME FOR FILING NOTICE OF APPEAL.— 
The notice of appeal of any order, whether interlocu-
tory or final, entered in any case brought by the 
Corporation against a covered financial company’s 
director, officer, employee, agent, attorney, account-
ant, or appraiser or any other person employed by 
or providing services to a covered financial company
457 
shall be filed not later than 30 days after the date 
of entry of the order. The hearing of the appeal shall 
be held not later than 120 days after the date of the 
notice of appeal. The appeal shall be decided not 
later than 180 days after the date of the notice of 
appeal. 
(2) SCHEDULING.—A court of the United 
States shall expedite the consideration of any case 
brought by the Corporation against a covered finan-
cial company’s director, officer, employee, agent, at-
torney, accountant, or appraiser or any other person 
employed by or providing services to a covered finan-
cial company. As far as practicable, the court shall 
give such case priority on its docket. 
(3) JUDICIAL
DISCRETION.—The court may 
modify the schedule and limitations stated in para-
graphs (1) and (2) in a particular case, based on a 
specific finding that the ends of justice that would 
be served by making such a modification would out-
weigh the best interest of the public in having the 
case resolved expeditiously. 
(k) FOREIGN INVESTIGATIONS.—The Corporation, as 
receiver of any covered financial company and for pur-
poses of carrying out any power, authority, or duty with 
respect to a covered financial company—
458 
(1) may request the assistance of any foreign fi-
nancial authority and provide assistance to any for-
eign financial authority in accordance with section 
8(v) of the Federal Deposit Insurance Act as if the 
covered financial company were an insured deposi-
tory institution, the Corporation were the appro-
priate Federal banking agency for the company and 
any foreign financial authority were the foreign 
banking authority; and 
(2) may maintain an office to coordinate for-
eign investigations or investigations on behalf of for-
eign financial authorities. 
(l) PROHIBITION ON ENTERING SECRECY AGREE-
MENTS
AND PROTECTIVE ORDERS.—The Corporation 
may not enter into any agreement or approve any protec-
tive order which prohibits the Corporation from disclosing 
the terms of any settlement of an administrative or other 
action for damages or restitution brought by the Corpora-
tion in its capacity as receiver for a covered financial com-
pany. 
(m) LIQUIDATION OF CERTAIN COVERED FINANCIAL 
COMPANIES OR BRIDGE FINANCIAL COMPANIES.—Not-
withstanding any other provision of law (other than a con-
flicting provision of this section), the Corporation, in con-
nection with the liquidation of any covered financial com-
459 
pany or bridge financial company with respect to which 
the Corporation has been appointed as receiver, shall— 
(1) in the case of any covered financial com-
pany or bridge financial company that is or has a 
subsidiary that is a stockbroker (as that term is de-
fined in section 101 of title 11 of the United States 
Code) but is not a member of the Securities Investor 
Protection Corporation, apply the provisions of sub-
chapter III of chapter 7 of title 11 of the United 
States Code in respect of the distribution to any 
‘‘customer’’ of all ‘‘customer name securities’’ and 
‘‘customer property’’ (as such terms are defined in 
section 741 of such title 11) as if such covered fi-
nancial company or bridge financial company were a 
debtor for purposes of such subchapter; or 
(2) in the case of any covered financial com-
pany or bridge financial company that is a com-
modity broker (as that term is defined in section 
101 of title 11 of the United States Code), apply the 
provisions of subchapter IV of chapter 7 of title 11 
of the United States Code in respect of the distribu-
tion to any ‘‘customer’’ of all ‘‘customer property’’ 
(as such terms are defined in section 761 of such 
title 11) as if such covered financial company or
460 
bridge financial company were a debtor for purposes 
of such subchapter. 
(n) SYSTEMIC DISSOLUTION FUND.— 
(1) ESTABLISHMENT AND PURPOSE.— 
(A) IN GENERAL.—There is established in 
the Treasury a separate fund to be known as 
the ‘‘Systemic Dissolution Fund’’— 
(i) to facilitate and provide for the or-
derly and complete dissolution of any failed 
financial company or companies that pose 
a systemic threat to the financial markets 
or economy, as determined under 1603(b); 
and 
(ii) to ensure that any taxpayer funds 
utilized to facilitate such liquidations are 
fully repaid from assessments levied on fi-
nancial companies that have assets of 
$50,000,000,000, adjusted for inflation, or 
more. 
(B) ADJUSTMENT
OF
THRESHOLD.—The 
threshold referred to in subparagraph (A)(ii) 
shall be adjusted on an annual basis, based on 
the growth of assets owned or managed by fi-
nancial companies (as defined in section 
1602(9)).
461 
(2) AUTHORITY.—The Systemic Dissolution 
Fund shall be administered by the Corporation, 
which shall have exclusive authority to— 
(A) impose assessments on covered finan-
cial companies in accordance with paragraphs 
(6) through (8); 
(B) maintain and administer the Fund in 
a manner so as to make clear to the general 
public that such Fund is unrelated to any other 
Fund maintained and administered by the Cor-
poration, including the Deposit Insurance 
Fund; 
(C) utilize the Fund to facilitate the dis-
solution of a covered financial company (as de-
fined by section 1602(5)) as provided in para-
graph (3), or take such other actions as are au-
thorized by this subtitle; 
(D) invest the Fund in accordance with 
section 13(a) of the Federal Deposit Insurance 
Act; and 
(E) exercise borrowing authority as pre-
scribed in subsection (o). 
(3) USES.—
462 
(A) The Fund shall be available to the 
Corporation for use with respect to the dissolu-
tion of a covered financial company to— 
(i) cover the costs incurred by the 
Corporation, including as receiver, in exer-
cising its rights, authorities, and powers 
and fulfilling its obligations and respon-
sibilities under this section; 
(ii) repay such funds in accordance 
with subsection (o)(6); and 
(iii) cover the costs of systemic sta-
bilization actions, pursuant to subsections 
(d) and (f) of section 1604. 
(B) The Fund shall not be used in any 
manner to benefit any officer or director of 
such company removed pursuant to section 
1604(f)(6). 
(4) DEPOSITS TO FUND.—All amounts assessed 
against a financial company under this section shall 
be deposited into the Fund. 
(5) SIZE OF FUND.—The Corporation shall, by 
rule, establish the minimum size of the Fund con-
sistent with subparagraphs (C) and (D) of para-
graph (6). 
(6) ASSESSMENTS.—
463 
(A) ASSESSMENTS TO MAINTAIN FUND.— 
The Corporation shall impose risk-based assess-
ments on financial companies in such amount 
and manner and subject to such terms and con-
ditions that the Corporation determines, by reg-
ulation and in consultation with the Council, 
are necessary for the amount in the Fund to at 
least equal the minimum size established pursu-
ant to paragraph (5). 
(B) ASSESSMENTS
TO
REPLENISH
THE 
FUND.—If the Fund falls below the minimum 
size established pursuant to paragraph (5), the 
Corporation shall impose assessments on finan-
cial companies in such amounts and manner 
and subject to such terms and conditions as the 
Corporation determines, by regulation and in 
consultation with the Council, are necessary to 
replenish the fund subject to the limitations in 
subparagraph (D). 
(C) MINIMUM ASSESSMENT THRESHOLD.— 
(i) IN
GENERAL.—The Corporation 
shall not assess financial companies with 
less than $50,000,000,000, adjusted for in-
flation, of assets on a consolidated basis, 
subject to any differentiation as permitted
464 
in paragraph (8) and shall assess financial 
companies with $50,000,000,000, adjusted 
for inflation, or more in assets in accord-
ance with paragraphs (7) and (8). 
(ii) HEDGE FUNDS.—The Corporation 
shall not assess financial companies that 
manage hedge funds (as defined by the 
Corporation for the purpose of this section, 
in consultation with the Securities and Ex-
change 
Commission) 
with 
less 
than 
$10,000,000,000, adjusted for inflation, of 
assets, under management on a consoli-
dated basis, subject to any differentiation 
as permitted in paragraph (8) and shall 
assess any financial companies that man-
age hedge funds with $10,000,000,000 or 
more of assets under management in ac-
cordance with paragraphs (7) and (8). 
(D) MAXIMUM SIZE OF FUND VIA ASSESS-
MENTS.— 
(i) IN
GENERAL.—The Corporation 
shall suspend assessments on financial 
companies on the day after the date on 
which the total of the assessments, exclud-
ing interest or other earnings from invest-
465 
ments made pursuant to paragraph (2)(D), 
equals $150,000,000,000. 
(ii) EXCEPTIONS.—Any suspension of 
assessments under clause (i)— 
(I) may be set aside if the Fund 
falls below $150,000,000,000; and 
(II) shall be set aside if the Fund 
falls below the minimum level estab-
lished in subparagraph (C). 
(E) ADDITIONAL
AUTHORIZED
ASSESS-
MENTS.—The Corporation is authorized to con-
duct risk-based assessments on financial compa-
nies in such amount and manner and subject to 
terms and conditions that the Corporation de-
termines, with the concurrence of the Secretary 
of the Treasury and the Federal Reserve Board, 
are necessary to pay any shortfall in the Trou-
bled Asset Relief Program established by the 
Emergency Economic Stabilization Act of 2008 
that would add to the deficit or national debt, 
as identified by the Director of the Office of 
Management and Budget, in consultation with 
the Director of the Congressional Budget Office 
pursuant to section 134 of such Act (12 U.S.C. 
5239).
466 
(7) FACTORS.—The Corporation, in consulta-
tion with the Council shall establish a risk matrix to 
be used in establishing assessments that takes into 
account— 
(A) the actual or expected risk of losses to 
the Fund; 
(B) economic conditions generally affecting 
financial companies so as to allow assessments 
and the Fund to increase during more favorable 
economic conditions and to decrease during less 
favorable economic conditions; 
(C) any assessments imposed on a finan-
cial company or an affiliate of a financial com-
pany that— 
(i) is an insured depository institu-
tion, assessed pursuant to section 7 or 
13(c)(4)(G) of the Federal Deposit Insur-
ance Act; 
(ii) is a member of the Securities In-
vestor Protection Corporation, assessed 
pursuant to section 4 of the Securities In-
vestor Protection Act of 1970 (15 U.S.C. 
78ddd); 
(iii) is an insured credit union, as-
sessed pursuant to section 202(c)(1)(A)(i)
467 
of the Federal Credit Union Act (12 
U.S.C. 1782(c)(1)(A)(i)); or 
(iv) is an insurance company, assessed 
pursuant to applicable State law to cover 
(or reimburse payments made to cover) the 
costs of the rehabilitation, liquidation or 
other State insolvency proceeding with re-
spect to 1 or more insurance companies; 
(D) the risks presented by the financial 
company to the financial system and the extent 
to which the financial company has benefitted, 
or likely would benefit, from the dissolution of 
a financial company under this title, includ-
ing— 
(i) the amount, different categories, 
and concentrations of assets of the finan-
cial company and its affiliates, including 
both on-balance sheet and off-balance sheet 
assets; 
(ii) the activities of the financial com-
pany and its affiliates; 
(iii) the relevant market share of the 
financial company and its affiliates; 
(iv) the extent to which the financial 
company is leveraged;
468 
(v) the potential exposure to sudden 
calls on liquidity precipitated by economic 
distress; 
(vi) the amount, maturity, volatility, 
and stability of the company’s financial ob-
ligations to, and relationship with, other fi-
nancial companies; 
(vii) the amount, maturity, volatility, 
and stability of the company’s liabilities, 
including the degree of reliance on short- 
term funding, taking into consideration ex-
isting systems for measuring a company’s 
risk-based capital; 
(viii) the stability and variety of the 
company’s sources of funding; 
(ix) the company’s importance as a 
source of credit for households, businesses, 
and State and local governments and as a 
source of liquidity for the financial system; 
(x) the extent to which assets are sim-
ply managed and not owned by the finan-
cial company and the extent to which own-
ership of assets under management is dif-
fuse; and
469 
(xi) the amount, different categories, 
and concentrations of liabilities, both in-
sured and uninsured, contingent and non-
contingent, including both on-balance sheet 
and off-balance sheet liabilities, of the fi-
nancial company and its affiliates; and 
(E) such other factors as the Corporation, 
in consultation with the Council, may determine 
to be appropriate. 
(8) REQUIREMENT
FOR
EQUITABLE
TREAT-
MENT IN ASSESSMENTS.—In establishing the assess-
ment system for the Fund, the Corporation, by regu-
lation and in consultation with the Council, shall dif-
ferentiate among financial companies based on com-
plexity of operations or organization, interconnected-
ness, size, direct or indirect activities, and any other 
factors the Corporation or the Council may deem ap-
propriate to ensure that the assessments charged eq-
uitably reflect the risk posed to the Fund by par-
ticular classes of financial companies. 
(9) MINIMUM COMMENT PERIOD.—In order to 
ensure sufficient opportunity for public and congres-
sional review and evaluation of any assessment sys-
tem, any proposed regulations regarding the imple-
mentation of the assessment system under this sub-
470 
title shall provide an opportunity for public comment 
during a period of not less than 60 days. 
(o) BORROWING AUTHORITY.— 
(1) BORROWING FROM TREASURY.— 
(A) IN GENERAL.—Subject to paragraphs 
(3), (4), and (5), the Corporation may borrow 
from the Treasury, and the Secretary of the 
Treasury is authorized to lend to the Corpora-
tion on such terms as may be fixed by the Cor-
poration and the Secretary, such funds as in 
the judgment of the Board of Directors of the 
Corporation are required, in addition to the 
funds available in the Systemic Dissolution 
Fund, to permit the orderly dissolution of 1 or 
more covered systemically significant financial 
companies, covered affiliates, or covered sub-
sidiaries under this title. 
(B) RATE OF INTEREST.—The rate of in-
terest to be charged in connection with any loan 
made pursuant to this subsection shall not be 
less than an amount determined by the Sec-
retary of the Treasury, taking into consider-
ation current market yields on outstanding 
marketable obligations of the United States of 
comparable maturities.
471 
(2) PUBLIC DEBT ISSUANCES.—For the pur-
poses described in subsection (1), the Secretary of 
the Treasury may use as a public-debt transaction 
the proceeds of the sale of any securities hereafter 
issued under chapter 31 of title 31, and the pur-
poses for which securities may be issued under chap-
ter 31 of title 31 are extended to include such loans. 
All loans and repayments under this subsection shall 
be treated as public-debt transactions of the United 
States. 
(3) BORROWING AUTHORITY WHEN FUND AS-
SETS ARE LESS THAN $150,000,000,000.— 
(A) Subject to paragraph (B), the bor-
rowing authority granted in paragraph (1) shall 
be available to the Corporation where— 
(i) the value of the Fund is less than 
$150,000,000,000; 
(ii) the Corporation determines that 
the immediate dissolution of a financial 
company or financial companies requires 
more funds than are available in the Fund; 
and 
(iii) the Corporation has provided a 
specific plan for repayment under para-
graph (7)(A).
472 
(B) The Corporation may borrow, and the 
Secretary may lend, any amount of funds that, 
when added to the amount available in the 
Fund on the date the Corporation makes a re-
quest to borrow funds, would not exceed 
$150,000,000,000. 
(C) For purposes of paragraph (1), the 
Corporation’s total debt may not exceed 
$150,000,000,000 (not including any funds bor-
rowed pursuant to subsection (s)). 
(4) ADDITIONAL BORROWING AUTHORITY.— 
(A) If at any time the Corporation antici-
pates that the dissolution of any financial com-
pany or financial companies will require funds 
in excess of $150,000,000,000— 
(i) the Corporation shall submit to the 
Secretary and the President a written re-
quest for additional borrowing authority 
subject to the limitation in subparagraph 
(5), which shall be accompanied by a cer-
tification indicating the anticipated amount 
needed, the basis on which such amount 
was determined, and any such information 
as the Secretary may deem necessary; and
473 
(ii) the President shall transmit a re-
quest to the House of Representatives and 
the Senate requesting the additional bor-
rowing authority, which shall include the 
certification referred to in clause (i) and 
which includes a repayment schedule as 
outlined in paragraph (7). 
(B) Any request for borrowing authority 
under paragraph (A) shall be effective only if 
approved by affirmative vote of the House of 
Representatives and the Senate in accordance 
with subsection (s). 
(5) LIMITATIONS ON ADDITIONAL BORROWING 
AUTHORITY.— 
(A) No request for borrowing authority is 
permitted under paragraph (4) unless the 
President, in consultation with the Council, cer-
tifies to the House of Representatives and the 
Senate that the borrowing authority is nec-
essary to avoid or mitigate an imminent finan-
cial emergency. 
(B) The amount of borrowing authority re-
quested under subparagraph (A)(i) may not ex-
ceed $50,000,000,000.
474 
(6) PROCEEDS FROM LIQUIDATION, REPAYMENT 
OF FUNDS.— 
(A) IN GENERAL.—The Corporation shall 
take such measures as may be appropriate to 
maximize the amount of funds from any dis-
solution that may be available for repayment 
under subparagraph (B) consistent with sys-
temic concerns. 
(B) REPAYMENT PRIORITY.—Amounts re-
alized from the dissolution of any financial com-
pany under this subtitle that are not otherwise 
utilized by the Corporation to dissolve a finan-
cial company under subsection (n)(3)(A) shall 
be paid— 
(i) first, to repay any costs incurred 
in exercising the borrowing authority 
granted in paragraph (1); and 
(ii) second, to recapitalize the Fund, 
subject to the requirements of section 
1604(g), to such level as the Corporation 
deems necessary, but not to exceed 
$150,000,000,000. 
(7) REPAYMENT
PLAN
AND
SCHEDULES
RE-
QUIRED FOR ANY BORROWING.—
475 
(A) IN
GENERAL.—No amount may be 
provided by the Secretary of the Treasury to 
the Corporation under paragraph (1) unless an 
agreement is in effect between the Secretary 
and the Corporation which— 
(i) provides a specific plan and sched-
ule for assessments under (n)(6) to achieve 
the repayment of the outstanding amount 
of any borrowing under such subsection; 
and 
(ii) demonstrates that income to the 
Corporation from assessments under this 
section will be sufficient to amortize the 
outstanding balance within the period es-
tablished in the repayment schedule and 
pay the interest accruing on such balance. 
(B) CONSULTATION WITH AND REPORT TO 
CONGRESS.—The Secretary of the Treasury and 
the Corporation shall— 
(i) consult with the Committee on Fi-
nancial Services of the House of Rep-
resentatives and the Committee on Bank-
ing, Housing, and Urban Affairs of the 
Senate on the terms of any repayment 
schedule agreement; and
476 
(ii) submit a copy of each repayment 
schedule agreement to the Committee on 
Financial Services of the House of Rep-
resentatives and the Committee on Bank-
ing, Housing, and Urban Affairs of the 
Senate before the end of the 30-day period 
beginning on the date any amount is pro-
vided by the Secretary of the Treasury to 
the Corporation under paragraph (1). 
(p) INFORMATION GATHERING AND VERIFICATION; 
PAYMENTS.— 
(1) IN
GENERAL.—The Corporation may re-
quire each financial company to make available such 
information as the Corporation may require— 
(A) for purposes of— 
(i) determining the financial com-
pany’s assessment under this section; 
(ii) verifying the accuracy of informa-
tion; and 
(iii) preparing for dissolution, includ-
ing a dissolution plan as required by this 
section; and 
(B) for such other purposes as may be ap-
propriate and necessary to promote the orderly 
dissolution of the financial company.
477 
(2) USE OF EXISTING REPORTS.—The Corpora-
tion shall, to the fullest extent possible, accept— 
(A) reports that a financial company has 
provided or been required to provide to other 
Federal or State supervisors or to appropriate 
self-regulatory organizations; 
(B) information that is otherwise required 
to be reported publicly; and 
(C) externally audited financial statements. 
(3) AUTHORITY
FOR
ON-SITE
INSPECTION.— 
The Corporation may make on-site inspections of a 
financial company’s books and records as necessary 
to carry out the purposes of this subsection. 
(4) RULEMAKING.—The Corporation may pro-
mulgate such rules or regulations as are necessary 
or appropriate to implement this subsection. 
(5) PAYMENTS OF ASSESSMENTS REQUIRED.— 
(A) IN GENERAL.—Any financial company 
subject to an assessment under this section 
shall pay to the Corporation such assessment. 
(B) FORM OF PAYMENT.—The payments 
required under this section shall be made in 
such manner and at such time or times as the 
Corporation, in consultation with the Council, 
shall prescribe by regulation.
478 
(6) PENALTY FOR FAILURE TO TIMELY PAY AS-
SESSMENTS.—Any financial company that fails or 
refuses to pay any assessment under this section 
shall be subject to a penalty under section 18(h) of 
the Federal Deposit Insurance Act, as if that finan-
cial company were an insured depository institution. 
(q) ASSESSMENT ACTIONS.— 
(1) IN
GENERAL.—The Corporation, in any 
court of competent jurisdiction, shall be entitled to 
recover from any financial company the amount of 
any unpaid assessment lawfully payable by such 
company. 
(2) 
STATUTE
OF
LIMITATIONS.—Notwith-
standing any other provision in Federal law, or the 
law of any State— 
(A) any action by a financial company to 
recover from the Corporation the overpaid 
amount of any assessment shall be brought 
within 3 years after the date the assessment 
payment was due, subject to subparagraph (C); 
(B) any action by the Corporation to re-
cover from a financial company the underpaid 
amount of any assessment shall be brought 
within 3 years after the date the assessment
479 
payment was due, subject to subparagraph (C); 
and 
(C) if a financial company has made a 
false or fraudulent statement with intent to 
evade any or all of its assessment, the Corpora-
tion shall have until 3 years after the date of 
discovery of the false or fraudulent statement in 
which to bring an action to recover the under-
paid amount. 
(r) REQUIREMENT
TO MAINTAIN SYSTEMIC DIS-
SOLUTION FUND AS SEPARATE FUND.—The Systemic 
Dissolution Fund shall at all times be administered in a 
manner that is separate and distinct from the Deposit In-
surance Fund, and the Corporation shall take such actions 
as may be necessary to ensure that such distinction is 
made with respect to internal processes and procedures 
as well as with regard to any public information, discus-
sion or other communications involving either Fund. 
(s) CONGRESSIONAL
APPROVAL
OF
ADDITIONAL 
BORROWING AUTHORITY.— 
(1) INTRODUCTION.—On the day on which the 
request of the President is received by the House of 
Representatives and the Senate under subsection 
(o)(4)(A)(ii), a joint resolution specified in para-
graph (5) shall be introduced in the House by the
480 
majority leader of the House and in the Senate by 
the majority leader of the Senate. If either House is 
not in session on the day on which such a request 
is received, the joint resolution with respect to such 
request shall be introduced in that House, as pro-
vided in the preceding sentence, on the first day 
thereafter on which that House is in session. 
(2) CONSIDERATION IN THE HOUSE OF REP-
RESENTATIVES.— 
(A) REPORTING
AND
DISCHARGE.—Any 
committee of the House of Representatives to 
which a joint resolution introduced under para-
graph (1) is referred shall report such joint res-
olution to the House not later than 5 calendar 
days after the applicable date of introduction of 
the joint resolution. If a committee fails to re-
port such joint resolution within that period, 
the committee shall be discharged from further 
consideration of the joint resolution and the 
joint resolution shall be referred to the appro-
priate calendar. 
(B) PROCEEDING
TO
CONSIDERATION.— 
After all committees authorized to consider a 
joint resolution have reported such joint resolu-
tion to the House or have been discharged from
481 
its consideration, it shall be in order, not later 
than the sixth day after the applicable date of 
introduction of the joint resolution, for the ma-
jority leader to move to proceed to consider the 
joint resolution in the House. Such a motion 
shall not be in order after the House has dis-
posed of a motion to proceed on the joint reso-
lution and shall not be in order if the House 
has received a message from the Senate under 
paragraph (4)(C). The previous question shall 
be considered as ordered on the motion to its 
adoption without intervening motion. A motion 
to reconsider the vote by which the motion is 
disposed of shall not be in order. 
(C) CONSIDERATION.—The joint resolution 
shall be considered in the House and shall be 
considered as read. All points of order against 
a joint resolution and against its consideration 
are waived. The previous question shall be con-
sidered as ordered on the joint resolution to its 
passage without intervening motion except two 
hours of debate equally divided and controlled 
by the proponent and an opponent. A motion to 
reconsider the vote on passage of a joint resolu-
tion shall not be in order.
482 
(3) CONSIDERATION IN THE SENATE.— 
(A) PLACEMENT ON CALENDAR.—Upon in-
troduction in the Senate, the joint resolution 
shall be placed immediately on the calendar. 
(B) FLOOR CONSIDERATION.— 
(i) IN
GENERAL.—Notwithstanding 
rule XXII of the Standing Rules of the 
Senate, it is in order at any time during 
the period beginning on the fourth day 
after the applicable date of introduction in 
the Senate and ending on the sixth day 
after the applicable date of introduction in 
the Senate (even though a previous motion 
to the same effect has been disagreed to) 
to move to proceed to the consideration of 
the joint resolution, and all points of order 
against the joint resolution (and against 
consideration of the joint resolution) are 
waived. The motion to proceed is not de-
batable. The motion is not subject to a mo-
tion to postpone. A motion to reconsider 
the vote by which the motion is agreed to 
or disagreed to shall not be in order. If a 
motion to proceed to the consideration of 
the resolution is agreed to, the joint resolu-
483 
tion shall remain the unfinished business 
until disposed of. 
(ii) DEBATE.—Debate on the joint 
resolution, and on all debatable motions 
and appeals in connection therewith, shall 
be limited to not more than 10 hours, 
which shall be divided equally between the 
majority and minority leaders or their des-
ignees. A motion further to limit debate is 
in order and not debatable. An amendment 
to, or a motion to postpone, or a motion to 
proceed to the consideration of other busi-
ness, or a motion to recommit the joint 
resolution is not in order. 
(iii) VOTE ON PASSAGE.—The vote on 
passage shall occur immediately following 
the conclusion of the debate on a joint res-
olution, and a single quorum call at the 
conclusion of the debate if requested in ac-
cordance with the rules of the Senate. 
(iv) RULINGS OF THE CHAIR ON PRO-
CEDURE.—Appeals from the decisions of 
the Chair relating to the application of the 
rules of the Senate, as the case may be, to
484 
the procedure relating to a joint resolution 
shall be decided without debate. 
(4) RULES RELATING TO SENATE AND HOUSE 
OF REPRESENTATIVES.— 
(A) COORDINATION
WITH
ACTION
BY 
OTHER HOUSE.—If, before the passage by one 
House of a joint resolution of that House, that 
House receives from the other House a joint 
resolution, then the following procedures shall 
apply: 
(i) The joint resolution of the other 
House shall not be referred to a com-
mittee. 
(ii) With respect to the joint resolu-
tion of the House receiving the resolution, 
the procedure in that House shall be the 
same as if no such joint resolution had 
been received from the other House; but 
the vote on passage shall be on the joint 
resolution of the other House. 
(B) TREATMENT
OF
COMPANION
MEAS-
URES.—If, following passage of a joint resolu-
tion in the Senate, the Senate then receives the 
companion measure from the House of Rep-
485 
resentatives, the companion measure shall not 
be debatable. 
(C) FAILURE
OF
JOINT
RESOLUTION
IN 
THE SENATE.— 
(i) If, in the Senate, the motion to 
proceed to the consideration of the joint 
resolution fails on adoption, the Secretary 
of the Senate shall transmit a message to 
that effect to the House of Representa-
tives. 
(ii) If, in the Senate, the joint resolu-
tion fails on passage, the Secretary of the 
Senate shall transmit a message to that ef-
fect to the House of Representatives. 
(D) RULES OF HOUSE OF REPRESENTA-
TIVES AND SENATE.—This paragraph and the 
preceding paragraphs are enacted by Con-
gress— 
(i) as an exercise of the rulemaking 
power of the Senate and House of Rep-
resentatives, respectively, and as such it is 
deemed a part of the rules of each House, 
respectively, but applicable only with re-
spect to the procedure to be followed in 
that House in the case of a joint resolu-
486 
tion, and it supersedes other rules only to 
the extent that it is inconsistent with such 
rules; and 
(ii) with full recognition of the con-
stitutional right of either House to change 
the rules (so far as relating to the proce-
dure of that House) at any time, in the 
same manner, and to the same extent as in 
the case of any other rule of that House. 
(5) DEFINITION.—In this section, the term 
‘‘joint resolution’’ means only a joint resolution— 
(A) which does not have a preamble; 
(B) the title of which is as follows: ‘‘Joint 
resolution relating to the approval of request 
for borrowing authority under the Financial 
Stability Improvement Act of 2009.’’; and 
(C) the sole matter after the resolving 
clause of which is as follows: ‘‘That the Con-
gress approves the request for additional bor-
rowing authority transmitted to the Congress 
on lll by the President under section 
1609(o)(4)(A)(ii) of the Financial Stability Im-
provement Act of 2009.’’, the blank space being 
filled with the appropriate date. 
(t) NO FEDERAL STATUS.—
487 
(1) AGENCY STATUS.—A covered financial com-
pany (or any covered subsidiary thereof) that is 
placed into receivership is not a department, agency, 
or instrumentality of the United States for purposes 
of statutes that confer powers on or impose obliga-
tions on government entities. 
(2) EMPLOYEE STATUS.—Interim directors, di-
rectors, officers, employees, or agents of a covered 
financial company that is placed into receivership 
are not, solely by virtue of service in any such capac-
ity, officers or employees of the United States. Any 
employee of the Corporation, acting as receiver or of 
any Federal agency who serves at the request of the 
receiver as an interim director, director, officer, em-
ployee, or agent of a covered financial company that 
is placed into receivership shall not— 
(A) solely by virtue of service in any such 
capacity lose any existing status as an officer or 
employee of the United States for purposes of 
title 5, United States Code, or any other provi-
sion of law, or; 
(B) receive any salary or benefits for serv-
ice in any such capacity with respect to a cov-
ered financial company that is placed into re-
ceivership in addition to such salary or benefits
488 
as are obtained through employment with the 
Corporation or other Federal agency. 
(u) STUDY OF PAYMENT OF CONSUMER CLAIMS.— 
Not later than 6 months following the dissolution of a cov-
ered financial company under section 1603(b), the Comp-
troller General of the United States shall carry out a 
study, and report on such study to the Committee on 
Banking, Housing, and Urban Affairs and the Committee 
on the Judiciary of the Senate and the Committee on Fi-
nancial Services and the Committee on the Judiciary of 
the House of Representatives, regarding the satisfaction 
of claims arising from violations of the provisions of the 
Truth in Lending Act, if any, in instances where any as-
sets were transferred from such covered financial com-
pany. 
SEC. 1610. CLARIFICATION OF PROHIBITION REGARDING 
CONCEALMENT OF ASSETS FROM RECEIVER 
OR LIQUIDATING AGENT. 
(a) IN GENERAL.—Section 1032 of title 18, United 
States Code, is amended in paragraph (1) by deleting ‘‘or’’ 
before ‘‘the National Credit Union Administration 
Board,’’ and by inserting immediately thereafter ‘‘or the 
Corporation, as defined in section 1602 of the Dissolution 
Authority for Large, Interconnected Financial Companies 
Act of 2009,’’.
489 
(b) CONFORMING CHANGE.—The heading of section 
1032 of title 18, United States Code, is amended by strik-
ing ‘‘of financial institution’’. 
SEC. 1611. OFFICE OF DISSOLUTION. 
(a) TRIGGER OF AND PLAN FOR ESTABLISHMENT.— 
(1) TRIGGER.—If the Secretary appoints the 
Corporation as receiver for a financial company 
under section 1604, the Inspector General of the 
Corporation shall, as soon as possible after such ap-
pointment, establish in accordance with this section 
the Office of Dissolution as an office within the Of-
fice of the Inspector General of the Corporation. 
(2) PLAN.—The Inspector General of the Cor-
poration shall, in consultation with the Council of 
Inspectors General on Financial Oversight estab-
lished under section 1702, formulate and maintain a 
plan to allow for the timely establishment of an Of-
fice of Dissolution in accordance with paragraph (1). 
The Inspector General of the Corporation shall make 
such plan available to the Financial Services Over-
sight Council established under section 1001. 
(b) SPECIAL DEPUTY INSPECTOR GENERAL.—The 
head of the Office of Dissolution is the Special Deputy 
Inspector General for Dissolution (in this section referred 
to as the ‘‘Special Deputy Inspector General’’), who shall
492 
fort in the oversight of the Corporation’s activi-
ties as receiver for financial companies under 
section 1604. 
(3) DUTIES UNDER THE INSPECTOR GENERAL 
ACT OF 1978.—In addition to the duties specified in 
paragraphs (1) and (2), the Special Deputy Inspec-
tor General shall assist the Inspector General of the 
Corporation in carrying out such duties and respon-
sibilities of inspectors general under the Inspector 
General Act of 1978 as the Inspector General of the 
Corporation considers appropriate. 
(d) AUTHORITIES UNDER THE INSPECTOR GENERAL 
ACT OF 1978.—The Inspector General of the Corporation 
may confer on the Special Deputy Inspector General such 
authorities provided to the Inspector General of the Cor-
poration in section 6 of the Inspector General Act of 1978 
as the Inspector General of the Corporation considers nec-
essary to enable the Special Deputy Inspector General to 
carry out the duties specified in subsection (c). 
(e) PERSONNEL, FACILITIES, AND
OTHER
RE-
SOURCES.— 
(1) IN GENERAL.—The Special Deputy Inspec-
tor General may, in consultation with and subject to 
the approval of the Inspector General of the Cor-
poration, expend such amounts from the fund estab-
493 
lished under section 1609(n) as are necessary to 
carry out the duties described in subsection (c) and 
to submit the reports required by subsection (h). 
(2) ADDITIONAL
FUNDS.—If the fund estab-
lished under section 1609(n) is insufficient to enable 
the Special Deputy Inspector General to begin car-
rying out the duties of the Special Deputy Inspector 
General in a timely fashion or later becomes insuffi-
cient to enable the Special Deputy Inspector General 
to carry out such duties, the Inspector General of 
the Corporation shall detail the necessary personnel, 
facilities, or other resources to the Special Deputy 
Inspector General. 
(f) CORRECTIVE
RESPONSES
TO
AUDIT
PROB-
LEMS.—The Chairman of the Corporation shall— 
(1) take action to address deficiencies identified 
by a report or investigation of the Special Deputy 
Inspector General; or 
(2) certify to the appropriate committees of 
Congress that no action is necessary or appropriate. 
(g) COOPERATION AND COORDINATION WITH OTHER 
ENTITIES.—In carrying out the duties, responsibilities, 
and authorities of the Special Deputy Inspector General 
under this section, the Special Deputy Inspector General 
shall work with each of the inspectors general who is a
494 
member of the Council of Inspectors General on Financial 
Oversight established under section 1703(a)(1), in order 
to avoid duplication of effort and ensure comprehensive 
oversight of the Corporation’s activities as a receiver ap-
pointed under section 1604. 
(h) REPORTS.— 
(1) IN GENERAL.—In lieu of the semiannual re-
ports required by section 5(a) of the Inspector Gen-
eral Act of 1978, the Special Deputy Inspector Gen-
eral shall submit to the appropriate committees of 
Congress at the following times a report prepared in 
consultation with and approved by the Inspector 
General of the Corporation: 
(A) Not later than 30 days after the ap-
pointment of the Special Deputy Inspector Gen-
eral. 
(B) During the first 3 years after such ap-
pointment, not later than 30 days after the end 
of each fiscal quarter during which the Cor-
poration acts as receiver for a financial com-
pany under section 1604. 
(C) During the 4th year after such ap-
pointment and each year thereafter, not later 
than 30 days after the end of the 2nd and the 
4th fiscal quarters, if the Corporation acts as
495 
receiver for a financial company under section 
1604 during such semiannual period. 
(2) CONTENT OF REPORTS.—Each report re-
quired by paragraph (1) shall include a summary, 
for the period since the last required report (or, in 
the case of the first report, for the period since the 
Corporation was first appointed as a receiver under 
section 1604) of— 
(A) the activities of the Special Deputy In-
spector General; and 
(B) the activities and future plans of the 
Corporation with respect to each financial com-
pany for which it served as receiver. 
(i) TERMINATION.—The Office of Dissolution shall 
terminate 6 months after the Corporation ceases to serve 
as a receiver for any financial company under section 
1604, subject to reestablishment pursuant to subsection 
(a)(1). 
SEC. 1612. MISCELLANEOUS PROVISIONS. 
(a) BANKRUPTCY CODE AMENDMENTS.— 
(1) Section 109(b)(2) of title 11 of the United 
States Code is amended by inserting ‘‘covered finan-
cial company (as that term is defined in section 
1602(5) of the Dissolution Authority for Large,
496 
Interconnected Financial Companies Act of 2009),’’ 
after ‘‘a domestic insurance company,’’. 
(2) Section 303 of title 11, United States Code, 
is amended— 
(A) in subsection (h)— 
(i) by striking ‘‘or’’ at the end of 
paragraph (1); 
(ii) by striking the period at the end 
of paragraph (2) and inserting ‘‘; or’’; and 
(iii) by adding at the end the fol-
lowing new paragraph: 
‘‘(3) an involuntary case is filed against a cov-
ered financial company, as defined in section 
1602(5) of the Dissolution Authority for Large, 
Interconnected Financial Companies Act of 2009, by 
the Federal Deposit Insurance Corporation under 
section 1607 of that Act.’’; and 
(B) by adding at the end the following new 
subsection: 
‘‘(m) Notwithstanding subsections (a) and (b) of this 
section and section 109(b)(2), an involuntary case may be 
commenced by the Federal Deposit Insurance Corporation 
against a covered financial company (as defined in section 
1602(5) of the Dissolution Authority for Large, Inter-
connected Financial Companies Act of 2009). Such invol-
497 
untary case may be commenced by the Federal Deposit 
Insurance Corporation in accordance with section 1607 of 
that Act.’’. 
(3) Title 11, United States Code, is amended by 
inserting after section 303 the following new section: 
‘‘SEC. 304. CASES INVOLVING FDIC DISSOLUTION AUTHOR-
ITY. 
‘‘(a) APPOINTMENT.—In any case commenced by the 
Federal Deposit Insurance Corporation under section 
303(m), on the request of the Federal Deposit Insurance 
Corporation, such Corporation shall be appointed to serve 
as trustee in such case, notwithstanding any other provi-
sion of this title. 
‘‘(b) QUALIFICATION.—Sections 321, 322, 324, and 
326 shall not apply with respect to the appointment or 
service of such Corporation as trustee in any case so com-
menced.’’. 
(b) FEDERAL DEPOSIT INSURANCE ACT AND FED-
ERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT 
ACT OF 1991.— 
(1) Section 18(c)(4)(G)(i) of the Federal De-
posit Insurance Act (12 U.S.C. 1823(c)(4)(G)(i)) is 
amended by inserting at the end the following new 
sentence: ‘‘The determination with regard to the 
Corporation’s exercise of authority under this sub-
498 
paragraph shall apply to only an insured depository 
institution except when severe financial conditions 
exist which threaten the stability of a significant 
number of insured depository institutions.’’. 
(2) Section 403(a) of the Federal Deposit In-
surance Corporation Improvement Act of 1991 (12 
U.S.C. 4403(a)) is amended by inserting ‘‘section 
1609(c) of the Dissolution Authority for Large, 
Interconnected Financial Companies Act of 2009, 
section 1367 of the Federal Housing Enterprises Fi-
nancial Safety and Soundness Act of 1992 (12 
U.S.C. 4617(d)),’’ after ‘‘section 11(e) of the Fed-
eral Deposit Insurance Act,’’. 
SEC. 1613. AMENDMENT TO FEDERAL DEPOSIT INSURANCE 
ACT. 
The Federal Deposit Insurance Act (12 U.S.C. 1811 
et seq.) is amended by inserting after section 11A the fol-
lowing new section: 
‘‘SEC. 11B. SYSTEMIC DISSOLUTION AUTHORITY AND FUND. 
‘‘(a) SYSTEMIC
DISSOLUTION
AUTHORITY.—The 
Corporation shall establish a Systemic Dissolution Author-
ity, which shall function as a subsidiary of the Corpora-
tion. 
‘‘(b) SYSTEMIC DISSOLUTION FUND.—Any fund es-
tablished for the purpose of facilitating the dissolution of
499 
a financial company under subtitle G of the Financial Sta-
bility Improvement Act shall be called the Systemic Dis-
solution Fund, which shall be managed by the Corpora-
tion, through the Systemic Dissolution Authority. 
‘‘(c) MANAGEMENT OF FUND.— 
‘‘(1) SEPARATE MAINTENANCE.—The Systemic 
Dissolution Fund shall be separately maintained and 
not commingled with any other fund of the Corpora-
tion. 
‘‘(2) TREATMENT OF AND ACCOUNTING FOR AS-
SETS.—The assets and liabilities of the Systemic 
Dissolution Fund— 
‘‘(A) shall be the assets and liabilities of 
the Fund and not of the Corporation; and 
‘‘(B) shall not be consolidated with the as-
sets and liabilities of the Deposit Insurance 
Fund or the Corporation for accounting, report-
ing, or any other purpose. 
‘‘(d) RIGHTS, POWERS, AND DUTIES.— 
‘‘(1) IN GENERAL.—The Corporation, in addi-
tion to any rights, powers, and duties under this Act 
or any other law, shall, through the Systemic Dis-
solution Authority, have all rights, powers, and du-
ties necessary to implement and maintain the Sys-
temic Dissolution Fund in accordance with subtitle
500 
G of the Financial Stability Improvement Act of 
2009. 
‘‘(2) POWERS AS RECEIVER FOR COVERED FI-
NANCIAL COMPANY.—When acting as receiver with 
respect to any covered financial company, as defined 
in subtitle G of the Financial Stability Improvement 
Act of 2009, the Corporation, through the Systemic 
Dissolution Authority, shall have all rights, powers, 
and duties that the Corporation has as receiver 
under such subtitle. 
‘‘(3) SPECIFIC AND INCIDENTAL POWERS.—The 
Corporation, through the Systemic Dissolution Au-
thority, or any duly authorized officer or agent of 
the Authority, may exercise all powers specifically 
granted by the provisions of this Act and subtitle G 
of the Financial Stability Improvement Act and such 
incidental powers as shall be necessary to carry out 
the powers so granted and accomplish the purposes 
of subtitle G of the Financial Stability Improvement 
Act. 
‘‘(e) STAFF AND RESOURCES.— 
‘‘(1) IN GENERAL.—The Corporation shall as-
sign such staff, and provide such administrative and 
other support services to the Systemic Dissolution
501 
Authority as is necessary to fulfill the statutory re-
sponsibilities of the Authority. 
‘‘(2) ADMINISTRATIVE
EXPENSES.—The cost 
of all personnel, services, and resources provided on 
behalf of the Systemic Dissolution Authority shall be 
paid from the Systemic Dissolution Fund.’’. 
SEC. 1614. APPLICATION OF EXECUTIVE COMPENSATION 
LIMITATIONS. 
At any time that the Corporation has borrowed from 
the Treasury pursuant to section 1609(o) to resolve a cov-
ered financial company, the Corporation shall apply the 
executive compensation limits under section 111 of the 
Emergency Economic Stabilization Act of 2008 to such 
company for so long as such company is in receivership. 
SEC. 1615. STUDY ON THE EFFECT OF SAFE HARBOR PROVI-
SIONS IN INSOLVENCY CASES. 
(a) STUDY.—The Comptroller General of the United 
States shall conduct a study of the safe harbor provisions 
under Federal law for derivatives, swaps, and securities 
transactions addressing— 
(1) how the safe harbor provisions have been 
applied in insolvency cases; 
(2) how such provisions impact the rights of 
parties in interest in insolvency cases;
502 
(3) whether these provisions impede or interfere 
with allowing a debtor a reasonable period of time 
to pursue rehabilitation and reorganization; and 
(4) whether these provisions had an adverse im-
pact on the financial marketplace. 
(b) REPORT TO THE CONGRESS.—Not later than 180 
days after the date of the enactment of this title, the 
Comptroller General shall submit to the President pro 
tempore of the Senate and the Speaker of the House of 
Representatives a report on the results of the study con-
ducted under subsection (a), together with any rec-
ommendations for legislation to address any adverse im-
pacts presented by the Federal safe harbor provisions. 
SEC. 1616. TREASURY STUDY. 
(a) STUDY REQUIRED.—The Secretary shall carry 
out a study analyzing how the resolution authority pro-
vided under this subtitle should be funded. Such study 
shall consider the following factors: 
(1) The consequences of any assessments on the 
overall recovery of the economy of the United States. 
(2) Any immediate or continuing consequences 
of assessments on other aspects of the economy of 
the United States, including job creation, public and 
private investments, small business loans, and gen-
eral credit availability.
503 
(3) The consequences of any assessments on in-
dividual sectors of the financial services industry. 
(4) The consequences of any assessments on the 
financial integrity on individual firms within each 
sector of the financial services industry. 
(5) The appropriateness and effect of assess-
ments on firms that are subject to separate assess-
ments under existing State or Federal depositor, pol-
icyholder, or investor protection mechanisms and the 
consequences of any such assessments on these 
mechanisms themselves. 
(6) The implications of assessments on all rel-
evant stakeholders, including taxpayers, depositors, 
insurance policyholders, investors, counterparties, 
and creditors. 
(7) Evaluation of the appropriate assessment 
base, including but not limited to factors such as as-
sets and liabilities, assets under management, policy-
holder reserves, other reserves, statutory and regu-
latory capital requirements, trusteed assets, and de-
posits and inflationary factors. 
(b) REPORT.—Not later than the end of the 6-month 
period beginning on the date of the enactment of this sub-
title, the Secretary shall issue a report to the Congress 
containing all determinations and conclusions made by the
504 
Secretary in carrying out the study required under sub-
section (a). 
SEC. 1617. PRIORITY OF CLAIMS IN FEDERAL DEPOSIT IN-
SURANCE ACT. 
Section 11(d)(11)(A) of the Federal Deposit Insur-
ance Act (12 U.S.C. 1821(d)(11)(A)) is amended— 
(1) by redesignating clauses (iii) through (v) as 
clauses (iv) through (vi), respectively; and 
(2) by inserting after clause (ii) the following 
new clause (iii): 
‘‘(iii) Any obligation of the institution 
owed to the Corporation as a result of the 
institution’s default on a Corporation-guar-
anteed debt.’’. 
Subtitle 
H—Additional 
Improve-
ments for Financial Crisis Man-
agement 
SEC. 1701. ADDITIONAL IMPROVEMENTS FOR FINANCIAL 
CRISIS MANAGEMENT. 
Section 13 of the Federal Reserve Act (12 U.S.C. 
343) is amended by striking the 3rd undesignated para-
graph and inserting the following new subsection: 
‘‘(c) FINANCIAL CRISIS MANAGEMENT.— 
‘‘(1) IN GENERAL.—In unusual and exigent cir-
cumstances, the Board of Governors of the Federal
505 
Reserve System, upon the written determination, 
pursuant to section 1109 of the Financial Stability 
Improvement Act of 2009, of the Financial Stability 
Oversight Council, that a liquidity event exists that 
could destabilize the financial system (which deter-
mination shall be made upon a vote of not less than 
two-thirds of the members of such Council then serv-
ing), and with the written consent of the Secretary 
of the Treasury (after certification by the President 
that an emergency exists), may authorize any Fed-
eral reserve bank, during such periods as the Board 
may determine and at rates established in accord-
ance with the provision designated as (d) of section 
14, to discount for an individual, partnership, or 
corporation, notes, drafts, and bills of exchange 
when such notes, drafts, and bills of exchange are 
indorsed or otherwise secured to the satisfaction of 
the Federal reserve bank and in conformance with 
regulations or guidelines issued by the Board of 
Governors regarding the quality of notes, drafts, and 
bills of exchange available for discount and of the se-
curity for those notes, drafts and bills of exchange, 
unless a joint resolution (as defined in paragraph 
(5)) is adopted. Upon making any determination 
under this paragraph, with the consent of the Sec-
506 
retary of the Treasury, the Financial Stability Over-
sight Council shall promptly submit a notice of such 
determination to the House of Representatives and 
the Senate. The amounts made available under this 
subsection shall not exceed $4,000,000,000,000. 
‘‘(2) CLARIFICATION OF ‘SECURED TO THE SAT-
ISFACTION OF THE FEDERAL RESERVE BANK’.—No 
member of the Board of Governors of the Federal 
Reserve System shall vote to authorize any action 
permitted under paragraph (1) and the Secretary of 
the Treasury shall not provide the written consent 
required by paragraph (1) unless that member be-
lieves and the Secretary of the Treasury believes: 
‘‘(A) that there is at least a 99 percent 
likelihood that all funds disbursed or put at risk 
by such action will be repaid to the Federal Re-
serve System; and 
‘‘(B) that there is at least a 99 percent 
likelihood that all interest due on any funds dis-
bursed will also be paid to the Federal Reserve 
System. 
‘‘(3) LOW QUALITY ASSETS EXCLUDED.—The 
notes, drafts, and bills of exchange available for dis-
count for purposes of paragraph (1), and the secu-
rity for those notes, drafts and bills of exchange may
507 
only include any of the following assets if such asset 
is used to further enhance the security for those 
notes, drafts and bills of exchange which shall be 
fully secured with assets that are not any of the fol-
lowing assets: 
‘‘(A) An asset (including a security) that 
would be classified as ‘‘substandard,’’ ‘‘doubt-
ful,’’ or ‘‘loss,’’ or treated as ‘‘special mention’’ 
or ‘‘other transfer risk problems,’’ in a report 
of examination or inspection of bank or an affil-
iate of a bank prepared by either a Federal or 
State supervisory agency or in any internal 
classification system used by such individual, 
partnership or corporation. 
‘‘(B) An asset in a nonaccrual status. 
‘‘(C) An asset on which principal or inter-
est payments are more than 30 days past due. 
‘‘(D) An asset whose terms have been re-
negotiated or compromised due to the deterio-
rating financial condition of the obligor unless 
such asset has been performing for at least 6 
months since the renegotiation. 
‘‘(4) 
NO
SINGLE
OR
SPECIFIC
BENE-
FICIARIES.—The Board of Governors of the Federal 
Reserve System may authorize a Federal reserve
508 
bank to discount notes, drafts, or bills of exchange 
under this section only as part of a broadly available 
credit or other facility and may not authorize a Fed-
eral Reserve bank to discount notes, drafts, or bills 
of exchange for only a single and specific individual, 
partnership, or corporation. 
‘‘(5) EVIDENCE OF UNAVAILABILITY OF CRED-
IT.—Before discounting any note, draft, or bill of ex-
change under this subsection for an individual, a 
partnership or corporation as part of a broadly 
available credit or other facility the Federal reserve 
bank shall obtain evidence that such individual, part-
nership, or corporation is unable to secure adequate 
credit accommodations from other banking institu-
tions. All discounts under this subsection for individ-
uals, partnerships, or corporations shall be subject 
to such limitations, restrictions, and regulations as 
the Board of Governors of the Federal Reserve Sys-
tem may prescribe. 
‘‘(6) CONGRESSIONAL DISAPPROVAL OF ADDI-
TIONAL BORROWING AUTHORITY.— 
‘‘(A) INTRODUCTION.—Within 90 days of 
the day on which notice from the Financial Sta-
bility Oversight Council is received by the 
House of Representatives and the Senate under
509 
paragraph (1), a joint resolution specified in 
subparagraph (E) may be introduced in the 
House by the majority leader and in the Senate 
by the majority leader. 
‘‘(B) CONSIDERATION IN THE HOUSE OF 
REPRESENTATIVES.— 
‘‘(i) REPORTING
AND
DISCHARGE.— 
Any committee of the House of Represent-
atives to which a joint resolution intro-
duced under subparagraph (A) is referred 
shall report such joint resolution to the 
House not later than 5 calendar days after 
the applicable date of introduction of the 
joint resolution. If a committee fails to re-
port such joint resolution within that pe-
riod, the committee shall be discharged 
from further consideration of the joint res-
olution and the joint resolution shall be re-
ferred to the appropriate calendar. 
‘‘(ii) 
PROCEEDING
TO
CONSIDER-
ATION.—After all committees authorized to 
consider a joint resolution have reported 
such joint resolution to the House or have 
been discharged from its consideration, it 
shall be in order, not later than the sixth
510 
day after the applicable date of introduc-
tion of the joint resolution, for the major-
ity leader to move to proceed to consider 
the joint resolution in the House. Such a 
motion shall not be in order after the 
House has disposed of a motion to proceed 
on the joint resolution and shall not be in 
order if the House has received a message 
from the Senate under subparagraph 
(D)(iii)(I). The previous question shall be 
considered as ordered on the motion to its 
adoption without intervening motion. A 
motion to reconsider the vote by which the 
motion is disposed of shall not be in order. 
‘‘(iii) 
CONSIDERATION.—The 
joint 
resolution shall be considered in the House 
and shall be considered as read. All points 
of order against a joint resolution and 
against its consideration are waived. The 
previous question shall be considered as or-
dered on the joint resolution to its passage 
without intervening motion except two 
hours of debate equally divided and con-
trolled by the proponent and an opponent.
511 
A motion to reconsider the vote on passage 
of a joint resolution shall not be in order. 
‘‘(C) CONSIDERATION IN THE SENATE.— 
‘‘(i) PLACEMENT
ON
CALENDAR.— 
Upon introduction in the Senate, the joint 
resolution shall be placed immediately on 
the calendar. 
‘‘(ii) FLOOR CONSIDERATION.— 
‘‘(I) 
IN
GENERAL.—Notwith-
standing rule XXII of the Standing 
Rules of the Senate, it is in order at 
any time during the period beginning 
on the fourth day after the applicable 
date of introduction of the joint reso-
lution in the Senate and ending on 
the sixth day after the applicable date 
of introduction in the Senate (even 
though a previous motion to the same 
effect has been disagreed to) to move 
to proceed to the consideration of the 
joint resolution, and all points of 
order against the joint resolution (and 
against consideration of the joint reso-
lution) are waived. The motion to pro-
ceed is not debatable. The motion is
512 
not subject to a motion to postpone. A 
motion to reconsider the vote by which 
the motion is agreed to or disagreed 
to shall not be in order. If a motion 
to proceed to the consideration of the 
resolution is agreed to, the joint reso-
lution shall remain the unfinished 
business until disposed of. 
‘‘(II) DEBATE.—Debate on the 
joint resolution, and on all debatable 
motions and appeals in connection 
therewith, shall be limited to not more 
than 10 hours, which shall be divided 
equally between the majority and mi-
nority leaders or their designees. A 
motion further to limit debate is in 
order and not debatable. An amend-
ment to, or a motion to postpone, or 
a motion to proceed to the consider-
ation of other business, or a motion to 
recommit the joint resolution is not in 
order. 
‘‘(III) VOTE ON PASSAGE.—The 
vote on passage shall occur imme-
diately following the conclusion of the
513 
debate on a joint resolution, and a 
single quorum call at the conclusion of 
the debate if requested in accordance 
with the rules of the Senate. 
‘‘(IV) RULINGS
OF
THE
CHAIR 
ON
PROCEDURE.—Appeals from the 
decisions of the Chair relating to the 
application of the rules of the Senate, 
as the case may be, to the procedure 
relating to a joint resolution shall be 
decided without debate. 
‘‘(D) RULES RELATING TO SENATE AND 
HOUSE OF REPRESENTATIVES.— 
‘‘(i) COORDINATION WITH ACTION BY 
OTHER HOUSE.—If, before the passage by 
one House of a joint resolution of that 
House, that House receives from the other 
House a joint resolution, then the following 
procedures shall apply: 
‘‘(I) The joint resolution of the 
other House shall not be referred to a 
committee. 
‘‘(II) With respect to the joint 
resolution of the House receiving the 
resolution, the procedure in that
514 
House shall be the same as if no such 
joint resolution had been received 
from the other House; but the vote on 
passage shall be on the joint resolu-
tion of the other House. 
‘‘(ii) TREATMENT
OF
COMPANION 
MEASURES.—If, following passage of a 
joint resolution in the Senate, the Senate 
then receives the companion measure from 
the House of Representatives, the com-
panion measure shall not be debatable. 
‘‘(iii) FAILURE OF JOINT RESOLUTION 
IN THE SENATE.— 
‘‘(I) If, in the Senate, the motion 
to proceed to the consideration of the 
joint resolution fails on adoption, the 
Secretary of the Senate shall transmit 
a message to that effect to the House 
of Representatives. 
‘‘(II) If, in the Senate, the joint 
resolution fails on passage, the Sec-
retary of the Senate shall transmit a 
message to that effect to the House of 
Representatives.
515 
‘‘(iv) RULES
OF
HOUSE
OF
REP-
RESENTATIVES AND SENATE.—This para-
graph and the preceding paragraphs are 
enacted by Congress— 
‘‘(I) as an exercise of the rule-
making power of the Senate and 
House of Representatives, respec-
tively, and as such it is deemed a part 
of the rules of each House, respec-
tively, but applicable only with respect 
to the procedure to be followed in that 
House in the case of a joint resolu-
tion, and it supersedes other rules 
only to the extent that it is incon-
sistent with such rules; and 
‘‘(II) with full recognition of the 
constitutional right of either House to 
change the rules (so far as relating to 
the procedure of that House) at any 
time, in the same manner, and to the 
same extent as in the case of any 
other rule of that House. 
‘‘(E) DEFINITION.—In this paragraph, the 
term ‘joint resolution’ means only a joint reso-
lution—
516 
‘‘(i) which does not have a preamble; 
‘‘(ii) the title of which is as follows: 
‘Joint resolution relating to the use of au-
thority relevant to section 13(c) of the 
Federal Reserve Act under the Financial 
Stability Improvement Act of 2009.’; and 
‘‘(iii) the sole matter after the resolv-
ing clause of which is as follows: ‘That the 
Congress disapproves the use of authority 
pursuant to section 13(c) of the Federal 
Reserve Act transmitted to the Congress 
on lll by the Board of Governors of 
the Federal Reserve System’, the blank 
space being filled with the appropriate 
date. 
‘‘(F) NONSCORING OF JOINT RESOLUTIONS 
OF
DISAPPROVAL.—A joint resolution of dis-
approval shall be treated as having no budg-
etary effect by the Congressional Budget Office 
and the Office of Management and Budget for 
any purpose under the Rules of the House of 
Representatives, the Standing Rules of the Sen-
ate, the Congressional Budget Act of 1974, or 
any statutory pay-as-you-go requirement.’’.
517 
SEC. 1702. CERTAIN RESTRICTIONS RELATED TO FOREIGN 
CURRENCY SWAP AUTHORITY. 
Section 14 of the Federal Reserve Act is amended 
by adding at the end the following new subsection: 
‘‘(h) CERTAIN RESTRICTIONS RELATED TO FOREIGN 
CURRENCY SWAP AUTHORITY.—A Federal reserve bank 
may not take any action pursuant to the authority pro-
vided under this section with respect to foreign currency 
swaps unless— 
‘‘(1) such action is approved in advance by the 
affirmative vote of not less than five members of the 
Board of Governors of the Federal Reserve System; 
and 
‘‘(2) such action is taken with the written con-
currence of the Secretary of the Treasury.’’. 
SEC. 1703. ADDITIONAL OVERSIGHT OF FINANCIAL REGU-
LATORY SYSTEM. 
(a) COUNCIL OF INSPECTORS GENERAL ON FINAN-
CIAL OVERSIGHT.— 
(1) 
ESTABLISHMENT
AND
MEMBERSHIP.— 
There is established a Council of Inspectors General 
on Financial Oversight (in this section referred to as 
the ‘‘Council of Inspectors General’’) chaired by the 
Inspector General of the Department of the Treas-
ury and composed of the inspectors general of the 
following:
518 
(A) The Board of Governors of the Federal 
Reserve System. 
(B) The Commodity Futures Trading 
Commission. 
(C) The Department of Housing and 
Urban Development. 
(D) The Department of the Treasury. 
(E) The Federal Deposit Insurance Cor-
poration. 
(F) The Federal Housing Finance Agency. 
(G) The National Credit Union Adminis-
tration. 
(H) The Securities and Exchange Commis-
sion. 
(I) The Troubled Asset Relief Program 
(until the termination of the authority of the 
Special Inspector General for such program 
under section 121(h) of the Emergency Eco-
nomic Stabilization Act of 2008 (12 U.S.C. 
5231(h))). 
(2) DUTIES.— 
(A) MEETINGS.—The Council of Inspec-
tors General shall meet not less than once each 
quarter, or more frequently if the chair con-
siders it appropriate, to facilitate the sharing of
520 
based on the views expressed by each in-
spector general as required by clause (i), 
with a focus on measures that should be 
taken to improve financial oversight. 
(3) COUNCIL OF INSPECTORS GENERAL WORK-
ING GROUPS.— 
(A) WORKING
GROUPS
TO
EVALUATE 
OVERSIGHT COUNCIL.— 
(i) CONVENING A WORKING GROUP.— 
The Council of Inspectors General may, by 
majority vote, convene a Council of Inspec-
tors General Working Group to evaluate 
the effectiveness and internal operations of 
the Oversight Council. 
(ii) PERSONNEL
AND
RESOURCES.— 
The inspectors general who are members 
of the Council of Inspectors General may 
detail staff and resources to a Council of 
Inspectors General Working Group estab-
lished under this subparagraph to enable it 
to carry out its duties. 
(iii) REPORTS.—A Council of Inspec-
tors General Working Group established 
under this subparagraph shall submit reg-
ular reports to the Oversight Council and
521 
to Congress on its evaluations pursuant to 
this subparagraph. 
(B) WORKING
GROUPS
FOR
FINANCIAL 
COMPANIES UNDERGOING RESOLUTION.— 
(i) CONVENING A WORKING GROUP.— 
The Council of Inspectors General shall 
convene a Council of Inspectors General 
Working Group for each financial company 
for which the Secretary of the Treasury 
appoints the Federal Deposit Insurance 
Corporation as receiver under section 
1604. 
(ii) PERSONNEL
AND
RESOURCES.— 
The inspectors general who are members 
of the Council of Inspectors General may 
detail staff and resources to a Council of 
Inspectors General Working Group estab-
lished under this subparagraph to enable it 
to carry out its duties. 
(iii) REPORTS.—Not later than 270 
days after the appointment of the Federal 
Deposit Insurance Corporation as receiver 
for the financial company for which a 
Council of Inspectors General Working 
Group is convened under clause (i), such
522 
Working Group shall submit to the pri-
mary financial regulatory agency and to 
Congress a report that includes— 
(I) the reasons for such financial 
company’s failure; 
(II) the reasons for the Secretary 
of the Treasury’s appointment of the 
Federal Deposit Insurance Corpora-
tion as receiver for such financial 
company; and 
(III) recommendations for pre-
venting future failures of financial 
companies. 
(b) RESPONSE TO REPORT BY OVERSIGHT COUN-
CIL.—The Oversight Council shall include in its annual 
report under section 1006 responses to the concerns raised 
in the report of the Council of Inspectors General under 
subsection (a)(2)(B) for such year. 
Subtitle I—Miscellaneous 
SEC. 1801. INCLUSION OF MINORITIES AND WOMEN; DIVER-
SITY IN AGENCY WORKFORCE. 
(a) OFFICE
OF MINORITY
AND WOMEN INCLU-
SION.— 
(1) ESTABLISHMENT.—Not later than 180 days 
following the enactment of this title, each agency
523 
shall establish an Office of Minority and Women In-
clusion (hereinafter in this section referred to as the 
‘‘Office’’) that shall advise the agency administrator 
of the impact of policies and regulations of the agen-
cy on minority-owned and women-owned businesses 
(as such terms are defined in subsection (c)(1)), and 
shall be responsible for all matters of the agency re-
lating to diversity in management, employment, and 
business activities, including the coordination of 
technical assistance, in accordance with such stand-
ards and requirements as the Director of the Office 
shall establish. 
(2) CONSOLIDATION.—Each agency that has 
assigned these or comparable responsibilities to ex-
isting offices shall ensure that such responsibilities 
are consolidated within the Office. 
(b) DIRECTOR.— 
(1) IN GENERAL.—For each Office, the Presi-
dent shall appoint, by and with the advice and con-
sent of the Senate, a Director of Minority and 
Women Inclusion (hereinafter in this section re-
ferred to as the ‘‘Director’’), who shall also hold a 
title within such agency comparable to that of other 
senior level staff who are, as applicable, either ap-
pointed by the President, by and with the advice and
524 
consent of the Senate, or act in a managerial capac-
ity that requires reporting directly to the agency ad-
ministrator. 
(2) DUTIES.—Each Director shall— 
(A) ensure equal employment opportunity 
and the racial, ethnic and gender diversity of 
the agency’s workforce and senior management; 
(B) increase the participation of minority- 
owned and women-owned businesses in the pro-
grams and contracts of the agency; 
(C) provide guidance to the agency admin-
istrator to ensure that the policies and regula-
tions of the agency strengthen minority-owned 
and women-owned businesses; and 
(D) conduct an assessment, as part of the 
examination process for the entities regulated 
or monitored by the agency of the diversity and 
inclusion efforts by such entities. 
(c) INCLUSION IN ALL LEVELS OF BUSINESS ACTIVI-
TIES.— 
(1) IN GENERAL.—Each Director shall develop 
and implement standards and procedures to ensure, 
to the maximum extent possible, the inclusion and 
utilization of minorities (as such term is defined in 
section 1204(c) of the Financial Institutions Re-
525 
form, Recovery, and Enforcement Act of 1989 (12 
U.S.C. 1811 note)), women, and minority-owned and 
women-owned businesses (as such terms are defined 
in section 21A(r)(4) of the Federal Home Loan 
Bank Act (12 U.S.C. 1441a(r)(4)) (including finan-
cial institutions, investment banking firms, mortgage 
banking firms, asset management firms, broker-deal-
ers, financial services firms, underwriters, account-
ants, brokers, investment consultants, and providers 
of legal services) in all business and activities of the 
agency at all levels, including in procurement, insur-
ance, and all types of contracts (including, as appli-
cable, contracts for the issuance or guarantee of any 
debt, equity, or security, the sale of assets, the man-
agement of its assets, the making of its equity in-
vestments, and the implementation of programs to 
address economic recovery). 
(2) CONTRACTS.—The processes established by 
each agency for review and evaluation for contract 
proposals and to hire service providers shall include 
a component that gives consideration to the diversity 
of the applicant. 
(3) WRITTEN ASSURANCE.—All such contract 
proposals, provided such proposals are of an amount 
greater than $50,000 and the contractor employs
526 
more than 50 employees, shall include a written as-
surance, in a form and substance that the Director 
shall prescribe, that the contractor shall ensure, to 
the maximum extent possible, the inclusion of mi-
norities and women in its workforce and, as applica-
ble, by its subcontractors. 
(4) TERMINATION.—A Director may terminate 
any contract upon a finding that the contractor has 
failed to make a good faith effort to comply with 
paragraph (3), except that a contractor may appeal 
such finding and termination to the agency adminis-
trator within a reasonable amount of time as deter-
mined by the Director. 
(d) APPLICABILITY.—This section shall apply to all 
contracts of an agency for services of any kind, including 
services that require the services of investment banking, 
asset management entities, broker-dealers, financial serv-
ices entities, underwriters, accountants, investment con-
sultants, and providers of legal services. 
(e) REPORTS.—Not later than 90 days before the end 
of each Federal fiscal year, each Director shall report to 
the Congress detailed information describing the actions 
taken by the agency and the Director pursuant to this sec-
tion, which shall—
527 
(1) to the extent contracts exceed the contract 
amount and employment levels established in sub-
section (c)(3), include a statement of the total 
amounts paid by the agency to third party contrac-
tors since the last such report; 
(2) the percentage of such amounts paid to 
businesses described in subsection (c)(1); 
(3) the successes achieved and challenges faced 
by the agency in operating minority and women out-
reach programs; 
(4) the challenges the agency may face in hiring 
qualified minority and women employees and con-
tracting with qualified minority-owned and women- 
owned businesses; and 
(5) such other information, findings, conclu-
sions, and recommendations for legislative or agency 
action, as the Director may determine to be appro-
priate to include in such report. 
(f) DIVERSITY
IN
AGENCY
WORKFORCE.—Each 
agency shall take affirmative steps to seek diversity in its 
workforce at all levels of the agency consistent with the 
demographic diversity of the United States and the Fed-
eral government, which shall include— 
(1) heavily recruiting at historically black col-
leges and universities, Hispanic-serving institutions,
528 
women’s colleges, and colleges that typically serve 
majority minority populations; 
(2) sponsoring and recruiting at job fairs in 
urban communities, and placing employment adver-
tisements in newspapers and magazines oriented to-
ward women and people of color; 
(3) partnering with organizations that are fo-
cused on developing opportunities for minorities and 
women to place talented young minorities and 
women in industry internships, summer employment, 
and full-time positions; 
(4) where feasible, partnering with inner-city 
high schools, girls’ high schools, and high schools 
with majority minority populations to establish or 
enhance financial literacy programs and provide 
mentoring; and 
(5) such other mass media communications that 
the Director determines are necessary. 
(g) DEFINITIONS.—For purposes of this section: 
(1) AGENCY.—The term ‘‘agency’’ means— 
(A) the Department of the Treasury; 
(B) the Federal Deposit Insurance Cor-
poration; 
(C) the Federal Housing Finance Agency; 
(D) each of the Federal reserve banks;
529 
(E) the Board; 
(F) the National Credit Union Administra-
tion; 
(G) the Office of the Comptroller of the 
Currency; 
(H) the Office of Thrift Supervision; 
(I) the Securities and Exchange Commis-
sion; 
(J) the Consumer Financial Protection 
Agency; and 
(K) the Federal Insurance Office, 
and any successors to such entities. 
(2) 
AGENCY
ADMINISTRATOR.—The 
term 
‘‘agency administrator’’ means the head of an agen-
cy. 
SEC. 1802. FEDERAL HOUSING FINANCE AGENCY ADVISORY 
ROLE IN FIEC. 
After section 1007 of the Federal Financial Institu-
tions Examination Council Act of 1987 (12 U.S.C. 3306) 
insert the following new section: 
‘‘SEC. 1007A. FEDERAL HOUSING FINANCE AGENCY ADVI-
SORY ROLE. 
‘‘Whenever the Council takes any actions with respect 
to issues that relate to the Federal National Mortgage As-
sociation, the Federal Home Loan Mortgage Corporation,
530 
or the Federal home loan banks, the Federal Housing Fi-
nance Agency shall participate in the Council’s pro-
ceedings in an advisory role.’’. 
Subtitle J—International Policy 
Coordination 
SEC. 1901. INTERNATIONAL POLICY COORDINATION. 
The President of the United States, or a designee of 
the President, shall coordinate through all available inter-
national policy channels similar policies as found in United 
States law related to limiting the scope, nature, size, scale, 
concentration, and interconnectedness of financial compa-
nies in order to protect financial stability and the global 
economy. 
Subtitle K—International Financial 
Provisions 
SEC. 1951. ACCESS TO UNITED STATES FINANCIAL MARKET 
BY FOREIGN INSTITUTIONS. 
(a) ESTABLISHMENT OF FOREIGN BANK OFFICES IN 
THE UNITED STATES.—Subsection 7(d)(3) of the Inter-
national Banking Act of 1978 (12 U.S.C. 3105(d)(3)) is 
amended— 
(1) by striking ‘‘and’’ at the end of subpara-
graph (C); 
(2) by striking the period at the end of sub-
paragraph (D) and inserting ‘‘; and’’; and
531 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(E) for a foreign bank that presents a 
systemic risk to the United States, whether the 
home country of the foreign bank has adopted, 
or is making demonstrable progress toward 
adopting, an appropriate system of financial 
regulation for the financial system of such 
home country to mitigate such systemic risk.’’. 
(b) TERMINATION OF FOREIGN BANK OFFICES IN 
THE UNITED STATES.—Subsection 7(e)(1) of the Inter-
national Banking Act of 1978 (12 U.S.C. 3105(e)(1)) is 
amended— 
(1) by striking ‘‘or’’ at the end of subparagraph 
(A); 
(2) by striking the period at the end of sub-
paragraph (B) and inserting ‘‘; or’’; and 
(3) by inserting after subparagraph (B), the 
following new subparagraph: 
‘‘(C) for a foreign bank that presents a 
systemic risk to the United States, the home 
country of the foreign bank has not adopted or 
made demonstrable progress toward adopting 
an appropriate system of financial regulation to 
mitigate such systemic risk.’’.
532 
(c) REGISTRATION
OR
SUCCESSION
TO
UNITED 
STATES BROKERAGE OR DEALER AND TERMINATION OF 
SUCH REGISTRATION.—Section 15 of the Securities Ex-
change Act of 1934 (15 U.S.C. 78o) is amended by adding 
at the end the following new subsections: 
‘‘(k) REGISTRATION OR SUCCESSION TO A UNITED 
STATES BROKER OR DEALER.—In determining whether 
to permit a foreign person or an affiliate of a foreign per-
son to register as a United States broker or dealer, or 
succeed to the registration of a United States broker or 
dealer, the Securities and Exchange Commission may con-
sider whether, for a foreign person, or an affiliate of a 
foreign person that presents a systemic risk to the United 
States, the home country of the foreign person has adopt-
ed or made demonstrable progress toward adopting an ap-
propriate system of financial regulation to mitigate such 
systemic risk. 
‘‘(l) TERMINATION OF A UNITED STATES BROKER 
OR DEALER.—For a foreign person or an affiliate of a 
foreign person that presents such a systemic risk to the 
United States, the Securities and Exchange Commission 
may determine to terminate the registration of such for-
eign person or an affiliate of such foreign person as a 
broker or dealer in the United States if the Commission 
determines that the home country of the foreign person
533 
has not adopted, or made demonstrable progress toward 
adopting, an appropriate system of financial regulation to 
mitigate such systemic risk.’’. 
SEC. 1952. REDUCING TARP FUNDS TO OFFSET COSTS. 
Section 115(a)(3) of the Emergency Economic Sta-
bilization Act of 2008 (12 U.S.C. 5225(a)(3)) is amended 
by striking ‘‘$700,000,000,000, as such amount is re-
duced by $1,259,000,000,, as such amount is reduced by 
$1,244,000,000, outstanding at any one time’’ and insert-
ing ‘‘$700,000,000,000, as such amount is reduced by 
$23,625,000,000, outstanding at any one time’’. 
Subtitle L—Securities Holding 
Companies 
SEC. 1961. SECURITIES HOLDING COMPANIES. 
(a) SUPERVISION OF A SECURITIES HOLDING COM-
PANY NOT HAVING A BANK OR SAVINGS ASSOCIATION 
AFFILIATE.— 
(1) IN
GENERAL.—A securities holding com-
pany that is required by a foreign regulator or for-
eign law to be subject to comprehensive consolidated 
supervision and that is not— 
(A) a financial holding company subject to 
stricter standards; 
(B) an affiliate of an insured bank (other 
than an institution described in subparagraphs
534 
(D) or (G) of section 2(c)(2) of the Bank Hold-
ing Company Act of 1956) or a savings associa-
tion; 
(C) a foreign bank, foreign company, or 
company that is described in section 8(a) of the 
International Banking Act of 1978; 
(D) a foreign bank that controls, directly 
or indirectly, a corporation chartered under sec-
tion 25A of the Federal Reserve Act (12 U.S.C. 
611 et seq.); or 
(E) subject to comprehensive consolidated 
supervision by a foreign regulator, 
may register with the Board to become supervised, 
pursuant to paragraph (2). Any securities holding 
company filing such a registration shall be super-
vised in accordance with this section and comply 
with the rules and orders prescribed by the Board 
applicable to supervised securities holding compa-
nies. 
(2) REGISTRATION AS A SUPERVISED SECURI-
TIES HOLDING COMPANY.—A securities holding com-
pany described in paragraph (1) shall register by fil-
ing with the Board such information and documents 
concerning such securities holding company as the 
Board, by regulation, may prescribe as necessary or
535 
appropriate in furtherance of the purposes of this 
section. Such supervision shall become effective 45 
days after the date of receipt of such registration by 
the Board or within such shorter time period as the 
Board, by rule or order, may determine. 
(b) SUPERVISION OF SECURITIES HOLDING COMPA-
NIES.— 
(1) RECORDKEEPING AND REPORTING.— 
(A) IN GENERAL.—Every supervised secu-
rities holding company and each affiliate of 
such company shall make and keep for pre-
scribed periods such records, furnish copies of 
records, and make such reports, as the Board 
determines to be necessary or appropriate for 
the Board to carry out the purposes of this sec-
tion, prevent evasions, and monitor compliance 
by the company or affiliate with applicable pro-
visions of law. 
(B) FORM AND CONTENTS.—Such records 
and reports shall be prepared in such form and 
according to such specifications (including cer-
tification by a registered public accounting 
firm), as the Board may require and shall be 
provided promptly at any time upon request by
536 
the Board. Such records and reports may in-
clude— 
(i) a balance sheet and income state-
ment; 
(ii) an assessment of the consolidated 
capital of the supervised securities holding 
company; 
(iii) an independent auditor’s report 
attesting to the supervised securities hold-
ing company’s compliance with its internal 
risk management and internal control ob-
jectives; and 
(iv) reports concerning the extent to 
which the company or affiliate has com-
plied with the provisions of this section 
and any regulations prescribed and orders 
issued under this section. 
(2) USE OF EXISTING REPORTS.— 
(A) IN GENERAL.—The Board shall, to the 
fullest extent possible, accept reports in fulfill-
ment of the requirements under this paragraph 
that the supervised securities holding company 
or its affiliates have been required to provide to 
another appropriate regulatory agency or self- 
regulatory organization.
537 
(B) AVAILABILITY.—A supervised securi-
ties holding company or an affiliate of such 
company shall provide to the Board, at the re-
quest of the Board, any report referred to in 
subparagraph (A), as permitted by law. 
(3) EXAMINATION AUTHORITY.— 
(A) FOCUS
OF
EXAMINATION
AUTHOR-
ITY.—The Board may make examinations of 
any supervised securities holding company and 
any affiliate of such company to carry out the 
purposes of this subsection, prevent evasions 
thereof, and monitor compliance by the com-
pany or affiliate with applicable provisions of 
law. 
(B) DEFERENCE
TO
OTHER
EXAMINA-
TIONS.—For purposes of this subparagraph, the 
Board shall, to the fullest extent possible, use 
the reports of examination made by other ap-
propriate Federal or State regulatory authori-
ties with respect to any functionally regulated 
subsidiary, as defined under section 5(c)(1) of 
the Bank Holding Company Act of 1956 (12 
U.S.C. 1844(c)(1)), or an institution described 
in subparagraphs (D) or (G) of section 
1841(c)(2).
538 
(c) CAPITAL AND RISK MANAGEMENT.— 
(1) The Board shall, by regulation or order, 
prescribe capital adequacy and other risk manage-
ment standards for a supervised securities holding 
company appropriate to protect the safety and 
soundness of the company and address the risks 
posed to financial stability by a supervised securities 
holding company. Standards imposed under this sub-
paragraph shall take account of differences among 
types of business activities and— 
(A) the amount and nature of the com-
pany’s financial assets; 
(B) the amount and nature of the com-
pany’s liabilities, including the degree of reli-
ance on short-term funding; 
(C) the extent and nature of the company’s 
off-balance sheet exposures; 
(D) the extent and nature of the com-
pany’s transactions and relationships with other 
financial companies; 
(E) the company’s importance as a source 
of credit for households, businesses, and State 
and local governments and as a source of li-
quidity for the financial system; and
539 
(F) the nature, scope, and mix of the com-
pany’s activities. 
(2) In imposing standards under this sub-
section, the Board may differentiate among super-
vised securities holding companies on an individual 
basis or by category, taking into consideration the 
criteria specified above. 
(3) Any capital requirements imposed under 
this subsection shall not take effect until the expira-
tion of 180 days after a supervised securities holding 
company is provided notice of such requirement. 
(d) OTHER PROVISIONS.— 
(1) Subsections (b), (c) through (s), and (u) of 
section 8 of the Federal Deposit Insurance Act shall 
apply to any supervised securities holding company, 
and to any subsidiary (other than a bank) of a su-
pervised securities holding company, in the same 
manner as they apply to a bank holding company. 
For purposes of applying such subsections to a su-
pervised securities holding company or a subsidiary 
(other than a bank) of a supervised securities hold-
ing company, the Board shall be considered the ap-
propriate Federal banking agency for the supervised 
securities holding company or subsidiary.
540 
(2) Except as the Board may otherwise provide 
by regulation or order, a supervised securities hold-
ing company shall be subject to the provisions of the 
Bank Holding Company Act of 1956 (12 U.S.C. 
1841 et seq.) in the same manner and to the same 
extent that bank holding companies are subject to 
such provisions, except that any such supervised se-
curities holding company shall not by reason of this 
subparagraph be deemed a bank holding company 
for purposes of section 4 of the Bank Holding Com-
pany Act of 1956. 
(e) DEFINITIONS.—For purposes of this section, the 
following definitions shall apply: 
(1) SECURITIES HOLDING COMPANY.—The term 
‘‘securities holding company’’ means— 
(A) any person other than a natural per-
son that owns or controls one or more brokers 
or dealers as defined in section 3 of the Securi-
ties Exchange Act; and 
(B) the associated persons of the securities 
holding company. 
(2) SUPERVISED
SECURITIES
HOLDING
COM-
PANY.—The term ‘‘supervised securities holding 
company’’ means any securities holding company
541 
that is supervised by the Board pursuant to this sec-
tion. 
(3) OTHER BANKING TERMS.—The terms ‘‘af-
filiate’’, ‘‘bank’’, ‘‘bank holding company’’, ‘‘com-
pany’’, ‘‘control’’, ‘‘savings association’’, and ‘‘sub-
sidiary’’ have the same meanings as in section 2 of 
the Bank Holding Company Act of 1956. 
(4) INSURED BANK.—The term ‘‘insured bank’’ 
has the same meaning as in section 13 of the Fed-
eral Deposit Insurance Act. 
(5) FOREIGN BANK.—The term ‘‘foreign bank’’ 
has the same meaning as in section 1(b)(7) of the 
International Banking Act of 1978. 
(6) ASSOCIATED PERSONS.—The terms ‘‘person 
associated with a securities holding company’’ and 
‘‘associated person of a securities holding company’’ 
mean any person directly or indirectly controlling, 
controlled by, or under common control with, a secu-
rities holding company. 
TITLE II—CORPORATE AND FI-
NANCIAL INSTITUTION COM-
PENSATION FAIRNESS ACT 
SEC. 2001. SHORT TITLE. 
This title may be cited as the ‘‘Corporate and Finan-
cial Institution Compensation Fairness Act of 2009’’.
542 
SEC. 2002. SHAREHOLDER VOTE ON EXECUTIVE COM-
PENSATION DISCLOSURES. 
Section 14 of the Securities Exchange Act of 1934 
(15 U.S.C. 78n) is amended by adding at the end the fol-
lowing new subsection: 
‘‘(i) ANNUAL SHAREHOLDER APPROVAL OF EXECU-
TIVE COMPENSATION.— 
‘‘(1) ANNUAL VOTE.—Any proxy or consent or 
authorization (the solicitation of which is subject to 
the rules of the Commission pursuant to subsection 
(a)) for an annual meeting of the shareholders to 
elect directors (or a special meeting in lieu of such 
meeting) where proxies are solicited in respect of 
any security registered under section 12 occurring 
on or after the date that is 6 months after the date 
on which final rules are issued under paragraph (4), 
shall provide for a separate shareholder vote to ap-
prove the compensation of executives as disclosed 
pursuant to the Commission’s compensation disclo-
sure rules for named executive officers (which disclo-
sure shall include the compensation committee re-
port, the compensation discussion and analysis, the 
compensation tables, and any related materials, to 
the extent required by such rules). The shareholder 
vote shall not be binding on the issuer or the board 
of directors and shall not be construed as overruling
543 
a decision by such board, nor to create or imply any 
additional fiduciary duty by such board, nor shall 
such vote be construed to restrict or limit the ability 
of shareholders to make proposals for inclusion in 
such proxy materials related to executive compensa-
tion. 
‘‘(2) SHAREHOLDER
APPROVAL
OF
GOLDEN 
PARACHUTE COMPENSATION.— 
‘‘(A) DISCLOSURE.—In any proxy or con-
sent solicitation material (the solicitation of 
which is subject to the rules of the Commission 
pursuant to subsection (a)) for a meeting of the 
shareholders occurring on or after the date that 
is 6 months after the date on which final rules 
are issued under paragraph (4), at which share-
holders are asked to approve an acquisition, 
merger, consolidation, or proposed sale or other 
disposition of all or substantially all the assets 
of an issuer, the person making such solicita-
tion shall disclose in the proxy or consent solici-
tation material, in a clear and simple form in 
accordance with regulations to be promulgated 
by the Commission, any agreements or under-
standings that such person has with any named 
executive officers of such issuer (or of the ac-
544 
quiring issuer, if such issuer is not the acquir-
ing issuer) concerning any type of compensation 
(whether present, deferred, or contingent) that 
is based on or otherwise relates to the acquisi-
tion, merger, consolidation, sale, or other dis-
position of all or substantially all of the assets 
of the issuer and the aggregate total of all such 
compensation that may (and the conditions 
upon which it may) be paid or become payable 
to or on behalf of such executive officer. 
‘‘(B) 
SHAREHOLDER
APPROVAL.—Any 
proxy or consent or authorization relating to 
the proxy or consent solicitation material con-
taining the disclosure required by subparagraph 
(A) shall provide for a separate shareholder 
vote to approve such agreements or under-
standings and compensation as disclosed, unless 
such agreements or understandings have been 
subject to a shareholder vote under paragraph 
(1). A vote by the shareholders shall not be 
binding on the issuer or the board of directors 
of the issuer or the person making the solicita-
tion and shall not be construed as overruling a 
decision by any such person or issuer, nor to
545 
create or imply any additional fiduciary duty by 
any such person or issuer. 
‘‘(3) DISCLOSURE
OF
VOTES.—Every institu-
tional investment manager subject to section 13(f) 
shall report at least annually how it voted on any 
shareholder vote pursuant to paragraph (1) or (2) of 
this section, unless such vote is otherwise required to 
be reported publicly by rule or regulation of the 
Commission. 
‘‘(4) RULEMAKING.—Not later than 6 months 
after the date of the enactment of the Corporate and 
Financial Institution Compensation Fairness Act of 
2009, the Commission shall issue final rules to im-
plement this subsection. 
‘‘(5) EXEMPTION
AUTHORITY.—The Commis-
sion may exempt certain categories of issuers from 
the requirements of this subsection, where appro-
priate in view of the purpose of this subsection. In 
determining appropriate exemptions, the Commis-
sion shall take into account, among other consider-
ations, the potential impact on smaller reporting 
issuers.’’. 
SEC. 2003. COMPENSATION COMMITTEE INDEPENDENCE. 
(a) STANDARDS RELATING TO COMPENSATION COM-
MITTEES.—The Securities Exchange Act of 1934 (15
546 
U.S.C. 78a et seq.) is amended by inserting after section 
10A the following new section: 
‘‘SEC. 10B. STANDARDS RELATING TO COMPENSATION COM-
MITTEES. 
‘‘(a) COMMISSION RULES.— 
‘‘(1) IN GENERAL.—Effective not later than 9 
months after the date of enactment of the Corporate 
and Financial Institution Compensation Fairness 
Act of 2009, the Commission shall, by rule, direct 
the national securities exchanges and national secu-
rities associations to prohibit the listing of any class 
of equity security of an issuer that is not in compli-
ance with the requirements of any portion of sub-
sections (b) through (f). 
‘‘(2) OPPORTUNITY TO CURE DEFECTS.—The 
rules of the Commission under paragraph (1) shall 
provide for appropriate procedures for an issuer to 
have an opportunity to cure any defects that would 
be the basis for a prohibition under paragraph (1) 
before the imposition of such prohibition. 
‘‘(3) EXEMPTION
AUTHORITY.—The Commis-
sion may exempt certain categories of issuers from 
the requirements of subsections (b) through (f), 
where appropriate in view of the purpose of this sec-
tion. In determining appropriate exemptions, the
547 
Commission shall take into account, among other 
considerations, the potential impact on smaller re-
porting issuers. 
‘‘(b) INDEPENDENCE OF COMPENSATION COMMIT-
TEES.— 
‘‘(1) IN GENERAL.—Each member of the com-
pensation committee of the board of directors of the 
issuer shall be independent. 
‘‘(2) CRITERIA.—In order to be considered to 
be independent for purposes of this subsection, a 
member of a compensation committee of an issuer 
may not, other than in his or her capacity as a 
member of the compensation committee, the board 
of directors, or any other board committee accept 
any consulting, advisory, or other compensatory fee 
from the issuer. 
‘‘(3) EXEMPTION
AUTHORITY.—The Commis-
sion may exempt from the requirements of para-
graph (2) a particular relationship with respect to 
compensation committee members, where appro-
priate in view of the purpose of this section. 
‘‘(4) DEFINITION.—As used in this section, the 
term ‘compensation committee’ means— 
‘‘(A) a committee (or equivalent body) es-
tablished by and amongst the board of directors
548 
of an issuer for the purpose of determining and 
approving the compensation arrangements for 
the executive officers of the issuer; and 
‘‘(B) if no such committee exists with re-
spect to an issuer, the independent members of 
the entire board of directors. 
‘‘(c) INDEPENDENCE STANDARDS FOR COMPENSA-
TION CONSULTANTS
AND OTHER COMMITTEE ADVI-
SORS.—Any compensation consultant or other similar ad-
viser to the compensation committee of any issuer shall 
meet standards for independence established by the Com-
mission by regulation. 
‘‘(d) COMPENSATION COMMITTEE AUTHORITY RE-
LATING TO COMPENSATION CONSULTANTS.— 
‘‘(1) IN
GENERAL.—The compensation com-
mittee of each issuer, in its capacity as a committee 
of the board of directors, shall have the authority, 
in its sole discretion, to retain and obtain the advice 
of a compensation consultant meeting the standards 
for independence promulgated pursuant to sub-
section (c), and the compensation committee shall be 
directly responsible for the appointment, compensa-
tion, and oversight of the work of such independent 
compensation consultant. This provision shall not be 
construed to require the compensation committee to
549 
implement or act consistently with the advice or rec-
ommendations of the compensation consultant, and 
shall not otherwise affect the compensation commit-
tee’s ability or obligation to exercise its own judg-
ment in fulfillment of its duties. 
‘‘(2) DISCLOSURE.—In any proxy or consent 
solicitation material for an annual meeting of the 
shareholders (or a special meeting in lieu of the an-
nual meeting) occurring on or after the date that is 
1 year after the date of enactment of the Corporate 
and Financial Institution Compensation Fairness 
Act of 2009, each issuer shall disclose in the proxy 
or consent material, in accordance with regulations 
to be promulgated by the Commission whether the 
compensation committee of the issuer retained and 
obtained the advice of a compensation consultant 
meeting the standards for independence promulgated 
pursuant to subsection (c). 
‘‘(3) REGULATIONS.—In promulgating regula-
tions under this subsection or any other provision of 
law with respect to compensation consultants, the 
Commission shall ensure that such regulations are 
competitively neutral among categories of consult-
ants and preserve the ability of compensation com-
550 
mittees to retain the services of members of any 
such category. 
‘‘(e) AUTHORITY TO ENGAGE INDEPENDENT COUN-
SEL
AND OTHER ADVISORS.—The compensation com-
mittee of each issuer, in its capacity as a committee of 
the board of directors, shall have the authority, in its sole 
discretion, to retain and obtain the advice of independent 
counsel and other advisers meeting the standards for inde-
pendence promulgated pursuant to subsection (c), and the 
compensation committee shall be directly responsible for 
the appointment, compensation, and oversight of the work 
of such independent counsel and other advisers. This pro-
vision shall not be construed to require the compensation 
committee to implement or act consistently with the advice 
or recommendations of such independent counsel and 
other advisers, and shall not otherwise affect the com-
pensation committee’s ability or obligation to exercise its 
own judgment in fulfillment of its duties. 
‘‘(f) FUNDING.—Each issuer shall provide for appro-
priate funding, as determined by the compensation com-
mittee, in its capacity as a committee of the board of direc-
tors, for payment of compensation— 
‘‘(1) to any compensation consultant to the 
compensation committee that meets the standards
551 
for independence promulgated pursuant to sub-
section (c); and 
‘‘(2) to any independent counsel or other ad-
viser to the compensation committee.’’. 
(b) STUDY AND REVIEW REQUIRED.— 
(1) IN
GENERAL.—The Securities and Ex-
change Commission shall conduct a study and review 
of the use of compensation consultants meeting the 
standards for independence promulgated pursuant to 
section 10B(c) of the Securities Exchange Act of 
1934 (as added by subsection (a)), and the effects 
of such use. 
(2) REPORT TO CONGRESS.—Not later than 2 
years after the rules required by the amendment 
made by this section take effect, the Commission 
shall submit a report to the Congress on the results 
of the study and review required by this paragraph. 
SEC. 2004. ENHANCED COMPENSATION STRUCTURE RE-
PORTING 
TO 
REDUCE 
PERVERSE 
INCEN-
TIVES. 
(a) ENHANCED DISCLOSURE
AND REPORTING
OF 
COMPENSATION ARRANGEMENTS.— 
(1) IN
GENERAL.—Not later than 9 months 
after the date of enactment of this title, the appro-
priate Federal regulators jointly shall prescribe regu-
552 
lations to require each covered financial institution 
to disclose to the appropriate Federal regulator the 
structures of all incentive-based compensation ar-
rangements offered by such covered financial institu-
tions sufficient to determine whether the compensa-
tion structure— 
(A) is aligned with sound risk manage-
ment; 
(B) is structured to account for the time 
horizon of risks; and 
(C) meets such other criteria as the appro-
priate Federal regulators jointly may determine 
to be appropriate to reduce unreasonable incen-
tives offered by such institutions for employees 
to take undue risks that— 
(i) could threaten the safety and 
soundness of covered financial institutions; 
or 
(ii) could have serious adverse effects 
on economic conditions or financial sta-
bility. 
(2) RULES
OF
CONSTRUCTION.—Nothing in 
this subsection shall be construed as requiring the 
reporting of the actual compensation of particular 
individuals. Nothing in this subsection shall be con-
553 
strued to require a covered financial institution that 
does not have an incentive-based payment arrange-
ment to make the disclosures required under this 
subsection. 
(b) PROHIBITION ON CERTAIN COMPENSATION AR-
RANGEMENTS.—Not later than 9 months after the date 
of enactment of this title, and taking into account the fac-
tors described in subparagraphs (A), (B), and (C) of sub-
section (a)(1), the appropriate Federal regulators shall 
jointly prescribe regulations that prohibit any incentive- 
based payment arrangement, or any feature of any such 
arrangement, that the regulators determine encourages in-
appropriate risks by covered financial institutions that— 
(1) could threaten the safety and soundness of 
covered financial institutions; or 
(2) could have serious adverse effects on eco-
nomic conditions or financial stability. 
(c) ENFORCEMENT.—The provisions of this section 
shall be enforced under section 505 of the Gramm-Leach- 
Bliley Act and, for purposes of such section, a violation 
of this section shall be treated as a violation of subtitle 
A of title V of such Act. 
(d) DEFINITIONS.—As used in this section— 
(1) the term ‘‘appropriate Federal regulator’’ 
means—
554 
(A) the Board of Governors of the Federal 
Reserve System; 
(B) the Office of the Comptroller of the 
Currency; 
(C) the Board of Directors of the Federal 
Deposit Insurance Corporation; 
(D) the Director of the Office of Thrift 
Supervision; 
(E) the National Credit Union Administra-
tion Board; 
(F) the Securities and Exchange Commis-
sion; and 
(G) the Federal Housing Finance Agency; 
and 
(2) the term ‘‘covered financial institution’’ 
means— 
(A) a depository institution or depository 
institution holding company, as such terms are 
defined in section 3 of the Federal Deposit In-
surance Act (12 U.S.C. 1813); 
(B) a broker-dealer registered under sec-
tion 15 of the Securities Exchange Act of 1934 
(15 U.S.C. 78o); 
(C) a credit union, as described in section 
19(b)(1)(A)(iv) of the Federal Reserve Act;
555 
(D) an investment advisor, as such term is 
defined in section 202(a)(11) of the Investment 
Advisers Act of 1940 (15 U.S.C. 80b–2(a)(11)); 
(E) the Federal National Mortgage Asso-
ciation; 
(F) the Federal Home Loan Mortgage 
Corporation; and 
(G) any other financial institution that the 
appropriate Federal regulators, jointly, by rule, 
determine should be treated as a covered finan-
cial institution for purposes of this section. 
(e) EXEMPTION FOR CERTAIN FINANCIAL INSTITU-
TIONS.—The requirements of this section shall not apply 
to covered financial institutions with assets of less than 
$1,000,000,000. 
(f) LIMITATION.—No regulation promulgated pursu-
ant to this section shall be allowed to require the recovery 
of incentive-based compensation under compensation ar-
rangements in effect on the date of enactment of this title, 
provided such compensation agreements are for a period 
of no more than 24 months. Nothing in this title shall 
prevent or limit the recovery of incentive-based compensa-
tion under any other applicable law. 
(g) GAO STUDY.— 
(1) STUDY REQUIRED.—
556 
(A) IN GENERAL.—The Comptroller Gen-
eral of the United States shall carry out a 
study to determine whether there is a correla-
tion between compensation structures and ex-
cessive risk taking. 
(B) FACTORS TO CONSIDER.—In carrying 
out the study required under subparagraph (A), 
the Comptroller General shall— 
(i) consider compensation structures 
used by companies from 2000 to 2008; and 
(ii) compare companies that failed, or 
nearly failed but for government assist-
ance, to companies that remained viable 
throughout the housing and credit market 
crisis of 2007 and 2008, including the 
compensation practices of all such compa-
nies. 
(C) 
DETERMINING
COMPANIES
THAT 
FAILED OR NEARLY FAILED.—In determining 
whether a company failed, or nearly failed but 
for government assistance, for purposes of sub-
paragraph (B)(ii), the Comptroller General 
shall focus on— 
(i) companies that received excep-
tional assistance under the Troubled Asset
557 
Relief Program under title I of the Emer-
gency Economic Stabilization Act of 2008 
(12 U.S.C. 5211 et seq.) or other forms of 
significant government assistance, includ-
ing under the Automotive Industry Financ-
ing Program, the Targeted Investment 
Program, the Asset Guarantee Program, 
and the Systemically Significant Failing 
Institutions Program; 
(ii) the Federal National Mortgage 
Association; 
(iii) the Federal Home Loan Mort-
gage Corporation; and 
(iv) companies that participated in the 
Security and Exchange Commission’s Con-
solidated Supervised Entities Program as 
of January 2008. 
(2) REPORT.—Not later than the end of the 1- 
year period beginning on the date of the enactment 
of this title, the Comptroller General shall issue a re-
port to the Congress containing the results of the 
study required under paragraph (1).
558 
TITLE 
III—DERIVATIVE 
MAR-
KETS 
TRANSPARENCY 
AND 
ACCOUNTABILITY ACT 
SEC. 3001. SHORT TITLE. 
This title may be cited as the ‘‘Derivative Markets 
Transparency and Accountability Act of 2009’’. 
SEC. 3002. REVIEW OF REGULATORY AUTHORITY. 
(a) CONSULTATION.— 
(1) CFTC.—Before commencing any rule-
making or issuing an order regarding swaps, swap 
dealers, major swap participants, swap repositories, 
persons associated with a swap dealer or major swap 
participant, eligible contract participants, or swap 
execution facilities pursuant to subtitle A, the Com-
modity Futures Trading Commission shall consult 
with the Securities and Exchange Commission and 
the Prudential Regulators. 
(2) SEC.—Before commencing any rulemaking 
or issuing an order regarding security-based swaps, 
security-based swap dealers, major security-based 
swap participants, security-based swap repositories, 
persons associated with a security-based swap dealer 
or major security-based swap participant, eligible 
contract participants with regard to security-based 
swaps, or swap execution facilities pursuant to sub-
559 
title B, the Securities and Exchange Commission 
shall consult with the Commodity Futures Trading 
Commission and the Prudential Regulators. 
(3) In developing and promulgating rules or or-
ders pursuant to this subsection, the Commodity Fu-
tures Trading Commission and the Securities and 
Exchange Commission shall consider each other’s 
views and the views of the Prudential Regulators. 
(4) In adopting a rule or order described in 
paragraph (1) or (2), the Commodity Futures Trad-
ing Commission and the Securities and Exchange 
Commission shall treat functionally or economically 
similar products or entities similarly. 
(5) Paragraph (4) shall not be construed to re-
quire the Commodity Futures Trading Commission 
or the Securities Exchange Commission to adopt a 
rule or order that treats functionally or economically 
similar products or entities identically. 
(b) LIMITATION.— 
(1) CFTC.—Nothing in this title, unless spe-
cifically provided, shall be construed to confer juris-
diction on the Commodity Futures Trading Commis-
sion to issue a rule, regulation, or order providing 
for oversight or regulation of— 
(A) security-based swaps; or
560 
(B) with regard to their activities or func-
tions concerning security-based swaps— 
(i) security-based swap dealers; 
(ii) major security-based swap partici-
pants; 
(iii) security-based swap repositories; 
(iv) persons associated with a secu-
rity-based swap dealer or major security- 
based swap participant; 
(v) eligible contract participants with 
respect to security-based swaps; or 
(vi) swap execution facilities. 
(2) SEC.—Nothing in this title, unless specifi-
cally provided, shall be construed to confer jurisdic-
tion on the Securities and Exchange Commission to 
issue a rule, regulation, or order providing for over-
sight or regulation of— 
(A) swaps; or 
(B) with regard to their activities or func-
tions concerning swaps— 
(i) swap dealers; 
(ii) major swap participants; 
(iii) swap repositories; 
(iv) persons associated with a swap 
dealer or major swap participant;
561 
(v) eligible contract participants with 
respect to swaps; or 
(vi) swap execution facilities. 
(c) OBJECTION TO COMMISSION REGULATION.— 
(1) FILING OF PETITION FOR REVIEW.—If ei-
ther Commission referred to in this section believes 
that a final rule, regulation, or order of the other 
such Commission conflicts with subsection (a)(4) or 
(b), then the complaining Commission may obtain 
review thereof in the United States Court of Appeals 
for the District of Columbia Circuit by filing in the 
court, not later than 60 days after the date of publi-
cation of the final rule, regulation, or order, a writ-
ten petition requesting that the rule, regulation, or 
order be set aside. Any such proceeding shall be ex-
pedited by the Court of Appeals. 
(2) 
TRANSMITTAL
OF
PETITION
AND 
RECORD.—A copy of a petition described in para-
graph (1) shall be transmitted not later than 1 busi-
ness day after filing by the complaining Commission 
to the Secretary of the responding Commission. On 
receipt of the petition, the responding Commission 
shall file with the court a copy of the rule, regula-
tion, or order under review and any documents re-
562 
ferred to therein, and any other materials prescribed 
by the court. 
(3) STANDARD OF REVIEW.—The court, giving 
deference to the views of neither Commission, shall 
determine to affirm or set aside a rule, regulation, 
or order of the responding Commission under this 
subsection, based on the determination of the court, 
as to whether the rule, regulation, or order is in con-
flict with subsection (a)(4) or (b), as applicable. 
(4) JUDICIAL STAY.—The filing of a petition by 
the complaining Commission pursuant to paragraph 
(1) shall operate as a stay of the rule, regulation, or 
order, until the date on which the determination of 
the court is final (including any appeal of the deter-
mination). 
(d) DEFINITIONS.—In this section, the terms ‘‘Pru-
dential Regulators’’, ‘‘swap’’, ‘‘swap dealer’’, ‘‘major swap 
participant’’, ‘‘swap repository’’, ‘‘person associated with 
a swap dealer or major swap participant’’, ‘‘eligible con-
tract participant’’, ‘‘swap execution facility’’, ‘‘security- 
based swap’’, ‘‘security-based swap dealer’’, ‘‘major secu-
rity-based swap participant’’, ‘‘security-based swap reposi-
tory’’, and ‘‘person associated with a security-based swap 
dealer or major security-based swap participant’’ shall 
have the meanings provided, respectively, in the Com-
563 
modity Exchange Act, including any modification of the 
meanings under section 3101(b) of this Act. 
(e)(1) Notwithstanding subsections (b) and (c), the 
Commodity Futures Trading Commission and the Securi-
ties Exchange Commission shall jointly adopt rules to— 
(A) define the terms ‘‘security-based swap 
agreement’’ in section 3(a)(76) of the Securities Ex-
change Act of 1934 and ‘‘swap’’ in section 
1a(35)(A)(v) of the Commodity Exchange Act; 
(B) require the maintenance of records of all 
activities related to transactions defined in subpara-
graph (A) that are not cleared; and 
(C) make available to the Securities and Ex-
change Commission information relating to trans-
actions defined in subparagraph (A) that are 
uncleared. 
(2) In the event that the Commodity Futures Trading 
Commission and the Securities Exchange Commission fail 
to jointly prescribe rules pursuant to paragraph (1) in a 
timely manner, at the request of either Commission, the 
Financial Services Oversight Council shall resolve the dis-
pute— 
(A) within a reasonable time after receiving the 
request;
564 
(B) after consideration of relevant information 
provided by each Commission; and 
(C) by agreeing with one of the Commissions 
regarding the entirety of the matter or by deter-
mining a compromise position. 
SEC. 3003. INTERNATIONAL HARMONIZATION. 
(a) In order to promote effective and consistent global 
regulation of contracts of sale of swaps and security-based 
swaps, the Commodity Futures Trading Commission, the 
Securities and Exchange Commission, and the Prudential 
Regulators (as defined in section 1a(42) of the Commodity 
Exchange Act), as appropriate, shall consult and coordi-
nate with foreign regulatory authorities on the establish-
ment of consistent international standards with respect to 
the regulation of contracts of sale of swaps and security- 
based swaps, and may agree to such information-sharing 
arrangements as may be deemed to be necessary or appro-
priate in the public interest or for the protection of inves-
tors, swap counterparties, and security-based swap 
counterparties. 
(b) In order to promote effective and consistent global 
regulation of contracts of sale of a commodity for future 
delivery, the Commodity Futures Trading Commission 
shall consult and coordinate with foreign regulatory au-
thorities on the establishment of consistent international
565 
standards with respect to the regulation of contracts of 
sale of a commodity for future delivery, and may agree 
to such information-sharing arrangements as may be 
deemed necessary or appropriate in the public interest for 
the protection users of contracts of sale of a commodity 
for future delivery. 
SEC. 3004. PROHIBITION AGAINST GOVERNMENT ASSIST-
ANCE. 
(a) IN GENERAL.—No provision of this title shall be 
construed to authorize Federal assistance to support clear-
ing operations or liquidation of a derivatives clearing orga-
nization described in the Commodity Exchange Act or a 
clearing agency described in the Securities Exchange Act 
of 1934, except where explicitly authorized by an Act of 
Congress. 
(b) DEFINITION.—For the purposes of this section, 
the term ‘‘Federal assistance’’ means the use of public 
funds for the purposes of— 
(1) making loans to, or purchasing any debt ob-
ligation of, a derivatives clearing organization, a 
clearing agency, or a subsidiary of either; 
(2) purchasing assets of a derivatives clearing 
organization, a clearing agency, or a subsidiary of ei-
ther;
566 
(3) assuming or guaranteeing the obligations of 
a derivatives clearing organization, a clearing agen-
cy, or a subsidiary of either; or 
(4) acquiring any type of equity interest or se-
curity of a derivatives clearing organization, a clear-
ing agency, or a subsidiary of either. 
SEC. 3005. STUDIES. 
(a) STUDY ON EFFECTS OF POSITION LIMITS ON 
TRADING ON EXCHANGES IN THE UNITED STATES.— 
(1) STUDY.—The Commodity Futures Trading 
Commission, in consultation with each entity that is 
a designated contract market under the Commodity 
Exchange Act, shall conduct a study of the effects 
(if any) of the position limits imposed pursuant to 
the other provisions of this title on excessive specula-
tion and on the movement of transactions from ex-
changes in the United States to trading venues out-
side the United States. 
(2) REPORT
TO
THE
CONGRESS.—Within 12 
months after the imposition of position limits pursu-
ant to the other provisions of this title, the Com-
modity Futures Trading Commission, in consultation 
with each entity that is a designated contract mar-
ket under the Commodity Exchange Act, shall sub-
567 
mit to the Congress a report on the matters de-
scribed in paragraph (1). 
(3) Within 30 legislative days after the submis-
sion to the Congress of the report described in para-
graph (2), the Committee on Agriculture of the 
House of Representatives shall hold a hearing exam-
ining the findings of the report. 
(4) In addition to the study required in para-
graph (1), the Chairman of the Commodity Futures 
Trading Commission shall prepare and submit to the 
Congress biennial reports on the growth or decline 
of the derivatives markets in the United States and 
abroad, which shall include assessments of the 
causes of any such growth or decline, the effective-
ness of regulatory regimes in managing systemic 
risk, a comparison of the costs of compliance at the 
time of the report for market participants subject to 
regulation by the United States with the costs of 
compliance in December 2008 for the market par-
ticipants, and the quality of the available data. In 
preparing the report, the Chairman shall solicit the 
views of, consult with, and address the concerns 
raised by, market participants, regulators, legisla-
tors, and other interested parties.
568 
(b) STUDY ON FEASIBILITY OF REQUIRING USE OF 
STANDARDIZED ALGORITHMIC DESCRIPTIONS
FOR FI-
NANCIAL DERIVATIVES.— 
(1) IN
GENERAL.—The Securities and Ex-
change Commission and the Commodity Futures 
Trading Commission shall conduct a joint study of 
the feasibility of requiring the derivatives industry to 
adopt standardized computer-readable algorithmic 
descriptions which may be used to describe complex 
and standardized financial derivatives. 
(2) GOALS.—The algorithmic descriptions de-
fined in the study shall be designed to facilitate com-
puterized analysis of individual derivative contracts 
and to calculate net exposures to complex deriva-
tives. The algorithmic descriptions shall be optimized 
for simultaneous use by: 
(A) commercial users and traders of de-
rivatives; 
(B) derivative clearing houses, exchanges 
and electronic trading platforms; 
(C) trade repositories and regulator inves-
tigations of market activities; and 
(D) systemic risk regulators. 
The study will also examine the extent to which the 
algorithmic description, together with standardized
569 
and extensible legal definitions, may serve as the 
binding legal definition of derivative contracts. The 
study will examine the logistics of possible imple-
mentations of standardized algorithmic descriptions 
for derivatives contracts. The study shall be limited 
to electronic formats for exchange of derivative con-
tract descriptions and will not contemplate disclo-
sure of proprietary valuation models. 
(3) INTERNATIONAL
COORDINATION.—In con-
ducting the study, the Securities and Exchange 
Commission and the Commodity Futures Trading 
Commission shall coordinate the study with inter-
national financial institutions and regulators as ap-
propriate and practical. 
(4) REPORT.—Within 8 months after the date 
of the enactment of this Act, the Securities and Ex-
change Commission and the Commodity Futures 
Trading Commission shall jointly submit to the 
Committees on Agriculture and on Financial Serv-
ices of the House of Representatives and the Com-
mittees on Agriculture, Nutrition, and Forestry and 
on Banking, Housing, and Urban Affairs of the Sen-
ate a written report which contains the results of the 
study required by paragraphs (1) through (3).
570 
(c) STUDY OF DESIRABILITY AND FEASIBILITY OF 
ESTABLISHING SINGLE REGULATOR
FOR ALL TRANS-
ACTIONS INVOLVING FINANCIAL DERIVATIVES.— 
(1) IN GENERAL.—The Secretary of the Treas-
ury, the Commodity Futures Trading Commission, 
and the Securities and Exchange Commission shall 
conduct a joint study of the desirability and feasi-
bility of establishing, by January 1, 2012, a single 
regulator for all transactions involving financial de-
rivatives. 
(2) REPORT
TO
THE
CONGRESS.—Not later 
than December 1, 2010, Secretary of the Treasury, 
the Commodity Futures Trading Commission, and 
the Securities and Exchange Commission shall joint-
ly submit to the Committees on Agriculture and on 
Financial Services of the House of Representatives 
and the Committees on Agriculture, Nutrition, and 
Forestry and on Banking, Housing, and Urban Af-
fairs of the Senate a written report that contains the 
results of the study required by paragraph (1). 
SEC. 3006. RECOMMENDATIONS FOR CHANGES TO INSOL-
VENCY LAWS. 
Not later than 180 days after the date of the enact-
ment of this Act, the Securities and Exchange Commis-
sion, the Commodity Futures Trading Commission, and
571 
the Prudential Regulators (as defined in section 1a of the 
Commodity Exchange Act, as amended by section 3111 
of this Act) shall transmit to Congress recommendations 
for legislative changes to the Federal insolvency laws— 
(1) in order to enhance the legal certainty with 
respect to swap participants clearing non-proprietary 
swap positions with a swap clearinghouse, includ-
ing— 
(A) customer rights to recover margin de-
posits or custodial property held at or through 
an insolvent swap clearinghouse, or clearing 
participant; and 
(B) the enforceability of clearing rules re-
lating to the portability of customer swap posi-
tions (and associated margin) upon the insol-
vency of a clearing participant; 
(2) to clarify and harmonize the insolvency law 
framework applicable to entities that are both com-
modity brokers (as defined in section 101(6) of title 
11, United States Code) and registered brokers or 
dealers (as defined in section 3(a) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78c(a))); and 
(3) to facilitate the portfolio margining of secu-
rities and commodity futures and options positions 
held through entities that are both futures commis-
572 
sion merchants (as defined in section 1a of the Com-
modity Exchange Act) and registered brokers or 
dealers (as defined in section 3 of the Securities Ex-
change Act of 1934 (15 U.S.C. 78c(a))). 
SEC. 3007. ABUSIVE SWAPS. 
The Commodity Futures Trading Commission and 
the Securities and Exchange Commission may, by rule or 
order, jointly collect information as may be necessary con-
cerning the markets for any types of swap (as defined in 
section 1a(35) of the Commodity Exchange Act) or secu-
rity-based swap (as defined in section 1a(38) of such Act) 
and jointly issue a report with respect to any types of 
swaps or security-based swaps which the Commodity Fu-
tures Trading Commission and the Securities and Ex-
change Commission find are detrimental to the stability 
of a financial market or of participants in a financial mar-
ket. 
SEC. 3008. AUTHORITY TO PROHIBIT PARTICIPATION IN 
SWAP ACTIVITIES. 
If the Commodity Futures Trading Commission or 
the Securities and Exchange Commission determines that 
the regulation of swaps or security-based swaps markets 
in a foreign country undermines the stability of the United 
States financial system, either Commission, in consulta-
tion with the Secretary of the Treasury, may prohibit an
573 
entity domiciled in that country from participating in the 
United States in any swap or security-based swap activi-
ties. 
SEC. 3009. MEMORANDUM. 
(a)(1) The Commodity Futures Trading Commission 
and the Federal Energy Regulatory Commission shall, not 
later than 180 days after the date of the enactment of 
this section, negotiate a memorandum of understanding 
to establish procedures for— 
(A) applying their respective authorities in a 
manner so as to ensure effective and efficient regula-
tion in the public interest; 
(B) resolving conflicts concerning overlapping 
jurisdiction between the two agencies; and 
(C) avoiding, to the extent possible, conflicting 
or duplicative regulation. 
(2) Such memorandum and any subsequent amend-
ments to the memorandum shall be promptly submitted 
to the appropriate committees of Congress. 
(b) The Commodity Futures Trading Commission 
and the Federal Energy Regulatory Commission shall, not 
later than 180 days after the date of the enactment of 
this section, negotiate a memorandum of understanding 
to share information that may be requested where either 
Commission is conducting an investigation into potential
574 
manipulation, fraud, or market power abuse in markets 
subject to such Commission’s regulation or oversight. 
Shared information shall remain subject to the same re-
strictions on disclosure applicable to the Commission ini-
tially holding the information. 
Subtitle A—Regulation of Swap 
Markets 
SEC. 3101. DEFINITIONS. 
(a) AMENDMENTS TO DEFINITIONS IN THE COM-
MODITY EXCHANGE ACT.—Section 1a of the Commodity 
Exchange Act (7 U.S.C. 1a) is amended— 
(1) in paragraph (12)(A)— 
(A) 
in 
clause 
(vii)(III), 
by 
striking 
‘‘$25,000,000’’ and inserting ‘‘$50,000,000’’; 
and 
(B) in clause (xi), by striking ‘‘total assets 
in an amount’’ and inserting ‘‘amounts invested 
on a discretionary basis’’; 
(2) in paragraph (29)— 
(A) in subparagraph (D), by striking 
‘‘and’’; 
(B) by redesignating subparagraph (E) as 
subparagraph (G); and 
(C) by inserting after subparagraph (D) 
the following:
575 
‘‘(E) a swap execution facility registered 
under section 5h; 
‘‘(F) a swap repository; and’’; and 
(3) by adding at the end the following: 
‘‘(35) SWAP.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), the term ‘swap’ means any 
agreement, contract, or transaction that— 
‘‘(i) is a put, call, cap, floor, collar, or 
similar option of any kind for the purchase 
or sale of, or based on the value of, 1 or 
more interest or other rates, currencies, 
commodities, securities, instruments of in-
debtedness, indices, quantitative measures, 
or other financial or economic interests or 
property of any kind; 
‘‘(ii) provides for any purchase, sale, 
payment, or delivery (other than a dividend 
on an equity security) that is dependent on 
the occurrence, non-occurrence, or the ex-
tent of the occurrence of an event or con-
tingency associated with a potential finan-
cial, economic, or commercial consequence; 
‘‘(iii) provides on an executory basis 
for the exchange, on a fixed or contingent
576 
basis, of 1 or more payments based on the 
value or level of 1 or more interest or other 
rates, currencies, commodities, securities, 
instruments of indebtedness, indices, quan-
titative measures, or other financial or eco-
nomic interests or property of any kind, or 
any interest therein or based on the value 
thereof, and that transfers, as between the 
parties to the transaction, in whole or in 
part, the financial risk associated with a 
future change in any such value or level 
without also conveying a current or future 
direct or indirect ownership interest in an 
asset (including any enterprise or invest-
ment pool) or liability that incorporates the 
financial risk so transferred, and includes 
any agreement, contract, or transaction 
commonly known as an interest rate swap, 
a rate floor, rate cap, rate collar, cross-cur-
rency rate swap, basis swap, currency 
swap, total return swap, equity index swap, 
equity swap, debt index swap, debt swap, 
credit spread, credit default swap, credit 
swap, weather swap, energy swap, metal
577 
swap, agricultural swap, emissions swap, 
or commodity swap; 
‘‘(iv) is, or in the future becomes, 
commonly known to the trade as a swap; 
‘‘(v) meets the definition of ‘swap 
agreement’ as defined in section 206A of 
the Gramm-Leach-Bliley Act of which a 
material term of which is based on the 
price, yield, value, or volatility of any secu-
rity or any group or index of securities, or 
any interest therein; or 
‘‘(vi) is any combination or permuta-
tion of, or option on, any agreement, con-
tract, or transaction described in any of 
clauses (i) through (v). 
‘‘(B) EXCLUSIONS.—The term ‘swap’ does 
not include— 
‘‘(i) any contract of sale of a com-
modity for future delivery (or any option 
on such a contract) or security futures 
product traded on or subject to the rules 
of any board of trade designated as a con-
tract market under section 5 or 5f; 
‘‘(ii) any sale of a nonfinancial com-
modity or security for deferred shipment or
578 
delivery, so long as the transaction is in-
tended to be physically settled; 
‘‘(iii) any put, call, straddle, option, or 
privilege on any security, certificate of de-
posit, or group or index of securities, in-
cluding any interest therein or based on 
the value thereof, that is subject to the Se-
curities Act of 1933 (15 U.S.C. 77a et 
seq.) and the Securities Exchange Act of 
1934 (15 U.S.C. 78a et seq.); 
‘‘(iv) any put, call, straddle, option, or 
privilege relating to foreign currency en-
tered into on a national securities exchange 
registered pursuant to section 6(a) of the 
Securities Exchange Act of 1934 (15 
U.S.C. 78f(a)); 
‘‘(v) any agreement, contract, or 
transaction providing for the purchase or 
sale of 1 or more securities on a fixed basis 
that is subject to the Securities Act of 
1933 (15 U.S.C. 77a et seq.) and the Se-
curities Exchange Act of 1934 (15 U.S.C. 
78a et seq.); 
‘‘(vi) any agreement, contract, or 
transaction providing for the purchase or
579 
sale of 1 or more securities on a contingent 
basis that is subject to the Securities Act 
of 1933 (15 U.S.C. 77a et seq.) and the 
Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.), unless the agreement, 
contract, or transaction predicates the pur-
chase or sale on the occurrence of a bona 
fide contingency that might reasonably be 
expected to affect or be affected by the 
creditworthiness of a party other than a 
party to the agreement, contract, or trans-
action; 
‘‘(vii) any note, bond, or evidence of 
indebtedness that is a security as defined 
in section 2(a)(1) of the Securities Act of 
1933 (15 U.S.C. 77b(a)(1)); 
‘‘(viii) any agreement, contract, or 
transaction that is— 
‘‘(I) based on a security; and 
‘‘(II) entered into directly or 
through an underwriter (as defined in 
section 2(a)(11) of the Securities Act 
of 1933) (15 U.S.C. 77b(a)(11)) by 
the issuer of the security for the pur-
poses of raising capital, unless the
580 
agreement, contract, or transaction is 
entered into to manage a risk associ-
ated with capital-raising; 
‘‘(ix) any foreign exchange forward; 
‘‘(x) any foreign exchange swap; 
‘‘(xi) any agreement, contract, or 
transaction a counterparty of which is a 
Federal Reserve bank, the United States 
government or an agency of the United 
States government that is expressly backed 
by the full faith and credit of the United 
States; and 
‘‘(xii) any security-based swap. 
‘‘(C) RULE OF CONSTRUCTION REGARDING 
MASTER AGREEMENTS.—The term ‘swap’ shall 
be construed to include a master agreement 
that provides for an agreement, contract, or 
transaction that is a swap pursuant to subpara-
graph (A), together with all supplements to any 
such master agreement, without regard to 
whether the master agreement contains an 
agreement, contract, or transaction that is not 
a swap pursuant to subparagraph (A), except 
that the master agreement shall be considered 
to be a swap only with respect to each agree-
581 
ment, contract, or transaction under the master 
agreement that is a swap pursuant to subpara-
graph (A). 
‘‘(D) FOREIGN
EXCHANGE
SWAPS
AND 
FORWARDS EXCEPTION.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
clauses (ix) and (x) of subparagraph (B), 
foreign exchange swaps and foreign ex-
change forwards shall be considered swaps 
under this paragraph if the Commission 
makes a determination that either foreign 
exchange swaps or foreign exchange for-
wards or both should be regulated as 
swaps under this Act and the Secretary 
concurs with such determination. 
‘‘(ii) SCOPE OF AUTHORITY.— 
‘‘(I) The Commission and the 
Secretary 
shall 
jointly 
determine 
which of the authorities under this 
Act regarding swaps the Commission 
shall exercise over foreign exchange 
swaps and foreign exchange forwards. 
Such authorities shall subsequently be 
exercised solely by the Commission. 
The Commission and the Secretary
582 
may jointly amend any previously 
made determination under this sub-
clause. 
‘‘(II) Notwithstanding clause (i), 
the Commission and the Secretary of 
the Treasury may determine that ei-
ther foreign exchange swaps or for-
eign exchange forwards or both should 
not be regulated as swaps under this 
Act if such determination is jointly 
made. 
‘‘(iii) REPORTING.—Notwithstanding 
clauses (ix) and (x) of subparagraph (B) 
and subparagraph (D)(ii), all foreign ex-
change swaps and foreign exchange for-
wards shall be reported to either a swap 
repository, or, if there is no swap reposi-
tory that would accept such swaps or for-
wards, to the Commission pursuant to sec-
tion 4r within such time period as the 
Commission may by rule or regulation pre-
scribe. 
‘‘(iv) SECRETARY.—For purposes of 
this subparagraph only, the term ‘Sec-
583 
retary’ means the Secretary of the Treas-
ury. 
‘‘(36) BOARD.—The term ‘Board’ means the 
Board of Governors of the Federal Reserve System. 
‘‘(37) SECURITY-BASED SWAP.—The term ‘se-
curity-based swap’ has the same meaning as in sec-
tion 3(a)(68) of the Securities and Exchange Act of 
1934. 
‘‘(38) SWAP DEALER.— 
‘‘(A) IN GENERAL.—The term ‘swap deal-
er’ means any person who— 
‘‘(i) holds itself out as a dealer in 
swaps; 
‘‘(ii) makes a market in swaps; 
‘‘(iii) regularly engages in the pur-
chase of swaps and their resale to cus-
tomers in the ordinary course of a busi-
ness; or 
‘‘(iv) engages in any activity causing 
the person to be commonly known in the 
trade as a dealer or market maker in 
swaps. 
‘‘(B) A person may be designated a swap 
dealer for a single type or single class or cat-
584 
egory of swap and considered not a swap dealer 
for other types, classes, or categories of swaps. 
‘‘(C) DE MINIMUS EXCEPTION.—The Com-
mission shall make a determination to exempt 
from designation as a swap dealer an entity 
that engages in a de minimus amount of swap 
dealing in connection with transactions with or 
on the behalf of its customers. 
‘‘(39) MAJOR SWAP PARTICIPANT.— 
‘‘(A) IN GENERAL.—The term ‘major swap 
participant’ means any person who is not a 
swap dealer, and— 
‘‘(i) maintains a substantial net posi-
tion in outstanding swaps, excluding posi-
tions held primarily for hedging, reducing 
or otherwise mitigating its commercial 
risk, including operating and balance sheet 
risk; or 
‘‘(ii) whose outstanding swaps create 
substantial 
net 
counterparty 
exposure 
among the aggregate of its counterparties 
that could expose those counterparties to 
significant credit losses. 
‘‘(B) DEFINITION
OF
SUBSTANTIAL
NET 
POSITION.—The Commission shall define by
585 
rule or regulation the terms ‘substantial net po-
sition’, ‘substantial net counterparty exposure’, 
and ‘significant credit losses’ at thresholds that 
the Commission determines prudent for the ef-
fective monitoring, management and oversight 
of entities which are systemically important or 
can significantly impact the financial system 
through counterparty credit risk. In setting the 
definitions, the Commission shall consider the 
person’s relative position in uncleared as op-
posed to cleared swaps. 
‘‘(C) A person may be designated a major 
swap participant for 1 or more individual types 
of swaps without being classified as a major 
swap participant for all classes of swaps. 
‘‘(40) MAJOR SECURITY-BASED SWAP PARTICI-
PANT.—The term ‘major security-based swap partic-
ipant’ has the same meaning as in section 3(a)(67) 
of the Securities Exchange Act of 1934. 
‘‘(41) 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)). 
‘‘(42) PRUDENTIAL
REGULATOR.—The term 
‘Prudential Regulator’ means—
586 
‘‘(A) the Board in the case of a swap deal-
er, major swap participant, security-based swap 
dealer, or major security-based swap participant 
that is— 
‘‘(i) a State-chartered bank that is a 
member of the Federal Reserve System; or 
‘‘(ii) a State-chartered branch or 
agency of a foreign bank; 
‘‘(B) the Office of the Comptroller of the 
Currency in the case of a swap dealer, major 
swap participant, security-based swap dealer, or 
major security-based swap participant that is— 
‘‘(i) a national bank; or 
‘‘(ii) a federally chartered branch or 
agency of a foreign bank; and 
‘‘(C) the Federal Deposit Insurance Cor-
poration in the case of a swap dealer, major 
swap participant, security-based swap dealer, or 
major security-based swap participant that is a 
State-chartered bank that is not a member of 
the Federal Reserve System. 
‘‘(43) SECURITY-BASED
SWAP
DEALER.—The 
term ‘security-based swap dealer’ has the same 
meaning as in section 3(a)(71) of the Securities Ex-
change Act of 1934.
587 
‘‘(44) FOREIGN
EXCHANGE
FORWARD.—The 
term ‘foreign exchange forward’ means a transaction 
that solely involves the exchange of 2 different cur-
rencies on a specific future date at a fixed rate 
agreed at the inception of the contract. 
‘‘(45) FOREIGN EXCHANGE SWAP.—The term 
‘foreign exchange swap’ means a transaction that 
solely involves the exchange of 2 different currencies 
on a specific date at a fixed rate agreed at the incep-
tion of the contract, and a reverse exchange of the 
same 2 currencies at a date further in the future 
and at a fixed rate agreed at the inception of the 
contract. 
‘‘(46) 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 3(a)(70) of the Securities Exchange Act of 
1934. 
‘‘(47) PERSON
ASSOCIATED
WITH
A
SWAP 
DEALER OR MAJOR SWAP PARTICIPANT.—The term 
‘person associated with a swap dealer or major swap
588 
participant’ or ‘associated person of a swap dealer or 
major swap participant’ means any partner, officer, 
director, or branch manager of a swap dealer or 
major swap participant (or any person occupying a 
similar status or performing similar functions), any 
person directly or indirectly controlling, controlled 
by, or under common control with a swap dealer or 
major swap participant, or any employee of a swap 
dealer or major swap participant, except that any 
person associated with a swap dealer or major swap 
participant whose functions are solely clerical or 
ministerial shall not be included in the meaning of 
the term other than for purposes of section 4s(b)(6). 
‘‘(48) SWAP REPOSITORY.—The term ‘swap re-
pository’ means any person that collects, calculates, 
prepares or maintains information or records with 
respect to transactions or positions in or the terms 
and conditions of swaps entered into by third par-
ties. 
‘‘(49) SWAP EXECUTION FACILITY.—The term 
‘swap execution facility’ means a person or entity 
that facilitates the execution or trading of swaps be-
tween two persons through any means of interstate 
commerce, but which is not a designated contract
589 
market, including any electronic trade execution or 
voice brokerage facility. 
‘‘(50) 
DERIVATIVE.—The 
term 
‘derivative’ 
means— 
‘‘(A) a contract of sale of a commodity for 
future delivery; or 
‘‘(B) a swap.’’. 
(b) AUTHORITY TO FURTHER DEFINE TERMS.—The 
Commodity Futures Trading Commission shall adopt a 
rule further defining the terms ‘‘swap’’, ‘‘swap dealer’’, 
‘‘major swap participant’’, and ‘‘eligible contract partici-
pant’’ for the purpose of including transactions and enti-
ties that have been structured to evade this title. 
(c) EXEMPTIONS.—Section 4(c) of the Commodity 
Exchange Act (7 U.S.C. 4(c)) is amended by adding at 
the end the following: ‘‘The Commission shall not have 
the authority to grant exemptions from the provisions of 
sections 3101(a), 3101(c), 3104, 3105, 3106, 3107, 3109, 
3110, 3113, 3115, 3120, and 3121 of the Derivative Mar-
kets Transparency and Accountability Act of 2009, except 
as expressly authorized under the provisions of that Act. 
Notwithstanding the preceding sentence, the Commodity 
Futures Trading Commission may exempt from any provi-
sion of the Commodity Exchange Act, pursuant to this 
subsection, an agreement, contract, or transaction that is
590 
entered into pursuant to a tariff approved by the Federal 
Energy Regulatory Commission, if the Commodity Fu-
tures Trading Commission determines that the exemption 
would be consistent with the public interest, and shall con-
sider and not unreasonably deny any request made by the 
Federal Energy Regulatory Commission for such an ex-
emption.’’. 
SEC. 3102. JURISDICTION. 
(a) EXCLUSIVE JURISDICTION.—Section 2(a)(1) of 
the Commodity Exchange Act (7 U.S.C. 2(a)(1)) is 
amended— 
(1) in the 1st sentence of subparagraph (A)— 
(A) by striking ‘‘(c) through (i)’’ and in-
serting ‘‘(c) and (f)’’; 
(B) by inserting ‘‘swaps, or’’ before ‘‘con-
tracts of sale’’; 
(C) by striking ‘‘derivatives transaction 
execution facility’’ and inserting ‘‘swap execu-
tion facility’’; and 
(D) by striking ‘‘5a’’ and inserting ‘‘5h’’; 
and 
(2) by adding at the end the following: 
‘‘(G)(i) Nothing in this paragraph shall 
limit the jurisdiction conferred on the Securities 
and Exchange Commission by the Derivative
591 
Markets Transparency and Accountability Act 
of 2009 with regard to security-based swap 
agreements as defined pursuant to section 
3002(e) of such Act, and security-based swaps. 
‘‘(ii) In addition to the authority of the Se-
curities Exchange Commission described in 
clause (i), nothing in this subparagraph shall 
limit or affect any statutory authority of the 
Commission with respect to an agreement, con-
tract, or transaction described in clause (i). 
‘‘(H)(i) Nothing in this Act shall limit or 
affect any statutory authority of the Federal 
Energy Regulatory Commission with respect to 
an agreement, contract, or transaction that is— 
‘‘(I) not executed, traded, or cleared 
on a registered entity or trading facility; 
and 
‘‘(II) entered into pursuant to a tariff 
or rate schedule approved by the Federal 
Energy Regulatory Commission. 
‘‘(ii) In addition to the authority of the 
Federal Energy Regulatory Commission de-
scribed in clause (i), nothing in this subpara-
graph shall limit or affect any statutory author-
ity of the Commission with respect to an agree-
592 
ment, contract, or transaction described in 
clause (i).’’. 
(b) ADDITIONS.—Section 2(c)(2)(A) of such Act (7 
U.S.C. 2(c)(2)(A)) is amended— 
(1) in clause (i) by striking ‘‘or’’ at the end; 
(2) by redesignating clause (ii) as clause (iii); 
and 
(3) by inserting after clause (i) the following: 
‘‘(ii) a swap; or’’. 
(c) Section 12(e) of such Act (7 U.S.C. 16(e)) is 
amended— 
(1) in paragraph (1)(B), by inserting ‘‘or (3)’’ 
after ‘‘paragraph (2)’’; 
(2) in paragraph (2), by striking subparagraphs 
(A) and (B) and inserting the following: 
‘‘(A) a swap; and 
‘‘(B) an agreement, contract, or trans-
action that is excluded from this Act under sec-
tion 2(c) or 2(f) of this Act or title IV of the 
Commodity Futures Modernization Act of 2000 
or exempted under section 4(c) of this Act (re-
gardless of whether any such agreement, con-
tract, or transaction is otherwise subject to this 
Act).’’; and 
(3) by adding at the end the following:
593 
‘‘(3) A swap may not be regulated as an insur-
ance contract under State law. 
‘‘(4) The provisions of this Act relating to 
swaps that were enacted by the Derivative Markets 
Transparency and Accountability Act of 2009, in-
cluding any rule or regulation thereunder, shall not 
apply to activities outside the United States unless 
those activities— 
‘‘(A) have a direct and significant connec-
tion with activities in or effect on United States 
commerce; or 
‘‘(B) contravene such rules or regulations 
as the Commission may prescribe as necessary 
or appropriate to prevent the evasion of any 
provision of this Act that was enacted by the 
Derivative Markets Transparency and Account-
ability Act of 2009.’’. 
(d) Nothing in the Derivative Markets Transparency 
and Accountability Act of 2009 or the amendments to the 
Commodity Exchange Act made by such Act shall limit 
or affect any statutory enforcement authority of the Fed-
eral Energy Regulatory Commission pursuant to Section 
222 of the Federal Power Act and Section 4A of the Nat-
ural Gas Act that existed prior to the date of enactment
594 
of the Derivative Markets Transparency and Account-
ability Act of 2009. 
SEC. 3103. CLEARING AND EXECUTION TRANSPARENCY. 
(a) CLEARING AND EXECUTION TRANSPARENCY RE-
QUIREMENTS.— 
(1) Section 2 of the Commodity Exchange Act 
(7 U.S.C. 2) is amended by striking subsections (d), 
(e), (g), and (h). 
(2)(A) Prior to the final effective dates in this 
title, a person may petition the Commodity Futures 
Trading Commission to remain subject to para-
graphs (3) through (7) of section 2(h) of the Com-
modity Exchange Act. 
(B) The Commodity Futures Trading Commis-
sion shall consider any petition submitted under sub-
paragraph (A) in a prompt manner and may allow 
a person to continue operating subject to paragraphs 
(3) through (7) of section 2(h) of the Commodity 
Exchange Act for up to one year after the effective 
date of this subtitle. 
(3) Section 2 of such Act (7 U.S.C. 2) is fur-
ther amended by inserting after subsection (c) the 
following: 
‘‘(d) SWAPS.—Nothing in this Act (other than sub-
sections (a)(1)(A), (a)(1)(B), (c)(2)(A)(ii), (e), (f), (j),
595 
and (k), sections 4a, 4b, 4b-1, 4c(a), 4c(b), 4o, 4r, 4s, 
4t, 5, 5b, 5c, 5h, 6(c), 6(d), 6c, 6d, 8, 8a, 9, 12(e)(2), 
12(f), 13(a), 13(b), 21, and 22(a)(4) and such other provi-
sions of this Act as are applicable by their terms to reg-
istered entities and Commission registrants) governs or 
applies to a swap. 
‘‘(e) LIMITATION ON PARTICIPATION.—It shall be 
unlawful for any person, other than an eligible contract 
participant, to enter into a swap unless the swap is en-
tered into on or subject to the rules of a board of trade 
designated as a contract market under section 5.’’. 
(4) Section 2 of such Act (7 U.S.C. 2) is fur-
ther amended by inserting after subsection (i) the 
following: 
‘‘(j) CLEARING REQUIREMENT.— 
‘‘(1) IN GENERAL.— 
‘‘(A) STANDARD FOR CLEARING.—A swap 
shall be submitted for clearing if a derivatives 
clearing organization that is registered under 
this Act will accept the swap for clearing, and 
the Commission has determined under para-
graph (2)(B)(ii) that the swap is required to be 
cleared.
596 
‘‘(B) OPEN ACCESS.—The rules of a de-
rivatives clearing organization described in sub-
paragraph (A) shall— 
‘‘(i) prescribe that all swaps submitted 
to the derivatives clearing organization 
with the same terms and conditions are 
economically equivalent within the deriva-
tives clearing organization and may be off-
set with each other within the derivatives 
clearing organization; and 
‘‘(ii) provide for non-discriminatory 
clearing of a swap executed bilaterally or 
on or through the rules of an unaffiliated 
designated contract market or swap execu-
tion facility. 
‘‘(2) COMMISSION REVIEW.— 
‘‘(A) COMMISSION-INITIATED REVIEW.— 
‘‘(i) The Commission shall review each 
swap, or any group, category, type or class 
of swaps to make a determination as to 
whether the swap or group, category, type, 
or class of swaps should be required to be 
cleared. 
‘‘(ii) The Commission shall provide at 
least a 30-day public comment period re-
597 
garding any determination made under 
clause (i). 
‘‘(B) SWAP SUBMISSIONS.— 
‘‘(i) A derivatives clearing organiza-
tion shall submit to the Commission each 
swap, or any group, category, type or class 
of swaps that it plans to accept for clear-
ing, and provide notice to its members (in 
a manner to be determined by the Com-
mission) of the submission. 
‘‘(ii) The Commission shall— 
‘‘(I) make available to the public 
any submission received under clause 
(i); 
‘‘(II) review each submission 
made under clause (i), and determine 
whether the swap, or group, category, 
type, or class of swaps described in 
the submission is required to be 
cleared; and 
‘‘(III) provide at least a 30-day 
public comment period regarding its 
determination as to whether the clear-
ing requirement under paragraph 
(1)(A) shall apply to the submission.
598 
‘‘(C) DEADLINE.—The Commission shall 
make its determination under subparagraph 
(B)(ii) not later than 90 days after receiving a 
submission made under subparagraph (B)(i), 
unless the submitting derivatives clearing orga-
nization agrees to an extension for the time lim-
itation established under this subparagraph. 
‘‘(D) DETERMINATION.— 
‘‘(i) In reviewing a submission made 
under subparagraph (B), the Commission 
shall review whether the submission is con-
sistent with section 5b(c)(2). 
‘‘(ii) In reviewing a swap, group of 
swaps, or class of swaps pursuant to sub-
paragraph (A) or a submission made under 
subparagraph (B), the Commission shall 
take into account the following factors: 
‘‘(I) The existence of significant 
outstanding notional exposures, trad-
ing liquidity and adequate pricing 
data. 
‘‘(II) The availability of rule 
framework, capacity, operational ex-
pertise and resources, and credit sup-
port infrastructure to clear the con-
599 
tract on terms that are consistent 
with the material terms and trading 
conventions on which the contract is 
then traded. 
‘‘(III) The effect on the mitiga-
tion of systemic risk, taking into ac-
count the size of the market for such 
contract and the resources of the de-
rivatives clearing organization avail-
able to clear the contract. 
‘‘(IV) The effect on competition, 
including appropriate fees and charges 
applied to clearing. 
‘‘(V) The existence of reasonable 
legal certainty in the event of the in-
solvency of the relevant derivatives 
clearing organization or 1 or more of 
its clearing members with regard to 
the treatment of customer and swap 
counterparty positions, funds, and 
property. 
‘‘(iii) In making a determination 
under subparagraph (B)(ii) that the clear-
ing requirement shall apply, the Commis-
sion may require such terms and condi-
600 
tions to the requirement as the Commis-
sion determines to be appropriate. 
‘‘(E) RULES.—Not later than 1 year after 
the date of the enactment of the Derivative 
Markets Transparency and Accountability Act 
of 2009, the Commission shall adopt rules for 
a derivatives clearing organization’s submission 
for review, pursuant to this paragraph, of a 
swap, or a group, category, type or class of 
swaps, that it seeks to accept for clearing. 
‘‘(3) STAY OF CLEARING REQUIREMENT.— 
‘‘(A) After a determination pursuant to 
paragraph (2)(B), the Commission, on applica-
tion of a counterparty to a swap or on its own 
initiative, may stay the clearing requirement of 
paragraph (1) until the Commission completes 
a review of the terms of the swap (or the group, 
category, type or class of swaps) and the clear-
ing 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 derivatives 
clearing organization that clears the swap, or 
group, category, type or class of swaps, agrees
601 
to an extension of the time limitation estab-
lished under this subparagraph. 
‘‘(C) DETERMINATION.—Upon completion 
of the review undertaken pursuant to subpara-
graph (A), the Commission may— 
‘‘(i) determine, unconditionally or sub-
ject to such terms and conditions as the 
Commission determines to be appropriate, 
that the swap, or group, category, type or 
class of swaps, must be cleared pursuant 
to this subsection if it finds that such 
clearing is consistent with paragraph 
(2)(D); or 
‘‘(ii) determine that the clearing re-
quirement of paragraph (1) shall not apply 
to the swap, or group, category, type or 
class of swaps. 
‘‘(D) RULES.—Not later than 1 year after 
the date of the enactment of the Derivative 
Markets Transparency and Accountability Act 
of 2009, the Commission shall adopt rules for 
reviewing, pursuant to this paragraph, a deriva-
tives clearing organization’s clearing of a swap, 
or a group, category, type or class of swaps, 
that it has accepted for clearing.
602 
‘‘(4) PREVENTION OF EVASION.—The Commis-
sion may prescribe rules under this subsection, or 
issue interpretations of the rules, as necessary to 
prevent evasions of this subsection. 
‘‘(5) REQUIRED REPORTING.— 
‘‘(A) IN GENERAL.—All swaps that are not 
accepted for clearing by any derivatives clearing 
organization shall be reported either to a swap 
repository described in section 21 or, if there is 
no repository that would accept the swap, to the 
Commission pursuant to section 4r within such 
time period as the Commission may by rule or 
regulation prescribe. Counterparties to a swap 
may agree which counterparty will report the 
swap as required by this paragraph. 
‘‘(B) SWAP DEALER DESIGNATION.—With 
regard to swaps where only 1 counterparty is a 
swap dealer, the swap dealer shall report the 
swap as required by this paragraph. 
‘‘(6) REPORTING
TRANSITION
RULES.—Rules 
adopted by the Commission under this section shall 
provide for the reporting of data, as follows: 
‘‘(A) Swaps entered into before the date of 
the enactment of this subsection shall be re-
ported to a registered swap repository or the
603 
Commission no later than 180 days after the 
effective date of this subsection; and 
‘‘(B) Swaps entered into on or after such 
date of enactment shall be reported to a reg-
istered swap repository or the Commission no 
later than the later of— 
‘‘(i) 90 days after such effective date; 
or 
‘‘(ii) such other time after entering 
into the swap as the Commission may pre-
scribe by rule or regulation. 
‘‘(7) CLEARING TRANSITION RULES.— 
‘‘(A) Swaps entered into before the date of 
the enactment of this subsection are exempt 
from the clearing requirements of this sub-
section if reported pursuant to paragraph 
(6)(A). 
‘‘(B) Swaps entered into before application 
of the clearing requirement pursuant to this 
subsection are exempt from the clearing re-
quirements of this subsection if reported pursu-
ant to paragraph (6)(B). 
‘‘(8) EXCEPTIONS.—
604 
‘‘(A) IN GENERAL.—The requirements of 
paragraph (1) shall not apply to a swap if one 
of the counterparties to the swap— 
‘‘(i) is not a swap dealer or major 
swap participant; 
‘‘(ii) is using swaps to hedge or miti-
gate commercial risk, including operating 
or balance sheet risk; and 
‘‘(iii) notifies the Commission, in a 
manner set forth by the Commission, how 
it generally meets its financial obligations 
associated with entering into non-cleared 
swaps. 
‘‘(B) ABUSE OF EXCEPTION.—The Com-
mission may prescribe rules under this sub-
section, or issue interpretations of the rules, as 
necessary to prevent abuse of the exemption in 
subparagraph (A) by swap dealers and major 
swap participants. 
‘‘(C) OPTION TO CLEAR.—The application 
of the clearing exception in subparagraph (A) is 
solely at the discretion of the counterparty to 
the swap that meets the conditions of clauses 
(i) through (iii) of subparagraph (A). 
‘‘(k) EXECUTION TRANSPARENCY.—
605 
‘‘(1) REQUIREMENT.—A swap that is subject to 
the clearing requirement of subsection (j) shall not 
be traded except on or through a board of trade des-
ignated as a contract market under section 5, or on 
or through a swap execution facility registered under 
section 5h, that makes the swap available for trad-
ing. 
‘‘(2) EXCEPTIONS.—The requirement of para-
graph (1) shall not apply to a swap if no designated 
contract market or swap execution facility makes the 
swap available for trading. 
‘‘(3) AGRICULTURAL SWAPS.—No person shall 
offer to enter into, enter into or confirm the execu-
tion of, any swap in an agricultural commodity (as 
defined by the Commission) that is subject to para-
graphs (1) and (2) except pursuant to a rule or reg-
ulation of the Commission allowing the swap under 
such terms and conditions as the Commission shall 
prescribe. 
‘‘(4) REQUIRED REPORTING.—If the exception 
of paragraph (2) applies and there is no facility that 
makes the swap available to trade, the counterpar-
ties shall comply with any recordkeeping and trans-
action reporting requirements that may be pre-
606 
scribed by the Commission with respect to swaps 
subject to the requirements of paragraph (1). 
‘‘(5) EXCHANGE TRADING.—In adopting rules 
and regulations, the Commission shall endeavor to 
eliminate unnecessary impediments to the trading on 
boards of trade designated as contract markets 
under section 5 of contracts, agreements, or trans-
actions that would be security-based swaps but for 
the trading of such contracts, agreements or trans-
actions on such a designated contract market.’’. 
(b) DERIVATIVES CLEARING ORGANIZATIONS.— 
(1) Subsections (a) and (b) of section 5b of 
such Act (7 U.S.C. 7a–1) are amended to read as 
follows: 
‘‘(a) REGISTRATION REQUIREMENT.— 
‘‘(1) IN GENERAL.—It shall be unlawful for any 
entity, unless registered with the Commission, di-
rectly or indirectly to make use of the mails or any 
means or instrumentality of interstate commerce to 
perform the functions of a derivatives clearing orga-
nization described in section 1a(10) of this Act with 
respect to— 
‘‘(A) a contract of sale of a commodity for 
future delivery (or option on such a contract) or
607 
option on a commodity, in each case unless the 
contract or option is— 
‘‘(i) excluded from this Act by section 
2(a)(1)(C)(i), 2(c), or 2(f); or 
‘‘(ii) 
a 
security 
futures 
product 
cleared by a clearing agency registered 
with the Securities and Exchange Commis-
sion under the Securities Exchange Act of 
1934 (15 U.S.C. 78a et seq.); or 
‘‘(B) a swap. 
‘‘(2) EXISTING BANKS AND CLEARING AGEN-
CIES.—A bank or a clearing agency registered with 
the Securities and Exchange Commission under the 
Securities Exchange Act of 1934 required to be reg-
istered as a derivatives clearing organization under 
this section is deemed to be registered under this 
section to the extent that the bank cleared swaps, as 
defined in this Act, as a multilateral clearing organi-
zation or the clearing agency cleared swaps, as de-
fined in this Act, before the enactment of this sub-
section. A bank to which this paragraph applies 
may, by the vote of the shareholders owning not less 
than 51 percent of the voting interests of the bank, 
be converted into a State corporation, partnership, 
limited liability company, or other similar legal form
608 
pursuant to a plan of conversion, if the conversion 
is not in contravention of applicable State law. 
‘‘(b) VOLUNTARY REGISTRATION.—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 derivatives clearing organization.’’. 
(2) Section 5b of such Act (7 U.S.C. 7a–1) is 
amended by adding at the end the following: 
‘‘(g) RULES.—Not later than 1 year after the date 
of the enactment of the Derivative Markets Transparency 
and Accountability Act of 2009, the Commission shall 
adopt rules governing persons that are registered as de-
rivatives clearing organizations for swaps under this sub-
section. 
‘‘(h) EXEMPTIONS.— 
‘‘(1) IN GENERAL.—The Commission may ex-
empt, conditionally or unconditionally, a derivatives 
clearing organization from registration under this 
section for the clearing of swaps if the Commission 
finds that the derivatives clearing organization is 
subject to comparable, comprehensive supervision 
and regulation on a consolidated basis by a Pruden-
tial Regulator or the appropriate governmental au-
thorities in the organization’s home country.
609 
‘‘(2) A person that is required to be registered 
as a derivatives clearing organization under this sec-
tion, whose principal business is clearing securities 
and options on securities and which is a clearing 
agency registered with the Securities Exchange 
Commission under the Securities Exchange Act of 
1934 (15 U.S.C. 78a et seq.), shall be uncondition-
ally exempt from registration under this section sole-
ly for the purpose of clearing swaps, unless the Com-
mission finds that the clearing agency is not subject 
to comparable, comprehensive supervision and regu-
lation by the Securities and Exchange Commission. 
‘‘(i) DESIGNATION OF COMPLIANCE OFFICER.— 
‘‘(1) IN GENERAL.—Each derivatives clearing 
organization shall designate an individual to serve as 
a compliance officer. 
‘‘(2) DUTIES.—The compliance officer— 
‘‘(A) shall report directly to the board or 
to the senior officer of the derivatives clearing 
organization; and 
‘‘(B) shall— 
‘‘(i) review compliance with the core 
principles in section 5b(c)(2). 
‘‘(ii) in consultation with the board of 
the derivatives clearing organization, a
610 
body performing a function similar to that 
of a board, or the senior officer of the de-
rivatives clearing organization, resolve any 
conflicts of interest that may arise; 
‘‘(iii) be responsible for administering 
the policies and procedures required to be 
established pursuant to this section; and 
‘‘(iv) ensure compliance with this Act 
and the rules and regulations issued under 
this Act; and 
‘‘(C) shall establish procedures for remedi-
ation of non-compliance issues found during 
compliance office reviews, lookbacks, internal or 
external audit findings, self-reported errors, or 
through validated complaints. The procedures 
shall establish the handling, management re-
sponse, remediation, re-testing, and closing of 
non-compliant issues. 
‘‘(3) ANNUAL REPORTS REQUIRED.—The com-
pliance officer shall annually prepare and sign a re-
port on the compliance of the derivatives clearing or-
ganization with this Act and the policies and proce-
dures of the derivatives clearing organization, includ-
ing the code of ethics and conflict of interest policies 
of the derivatives clearing organization, in accord-
611 
ance with rules prescribed by the Commission. The 
compliance report shall accompany the financial re-
ports of the derivatives clearing organization that 
are required to be furnished to the Commission pur-
suant to this section and shall include a certification 
that, under penalty of law, the report is accurate 
and complete.’’. 
(3) Section 5b(c)(2) of such Act (7 U.S.C. 7a– 
1(c)(2)) is amended to read as follows: 
‘‘(2) CORE
PRINCIPLES
FOR
DERIVATIVES 
CLEARING ORGANIZATIONS.— 
‘‘(A) IN GENERAL.—To be registered and 
to maintain registration as a derivatives clear-
ing organization, a derivatives clearing organi-
zation shall comply with the core principles 
specified in this paragraph and any requirement 
that the Commission may impose by rule or 
regulation pursuant to section 8a(5). Except 
where the Commission determines otherwise by 
rule or regulation, a derivatives clearing organi-
zation shall have reasonable discretion in estab-
lishing the manner in which the organization 
complies with the core principles. 
‘‘(B) FINANCIAL RESOURCES.—
612 
‘‘(i) The derivatives clearing organiza-
tion shall have adequate financial, oper-
ational, and managerial resources to dis-
charge the responsibilities of the organiza-
tion. 
‘‘(ii) The financial resources of the de-
rivatives clearing organization shall at a 
minimum exceed the total amount that 
would— 
‘‘(I) enable the organization to 
meet the financial obligations of the 
organization to the members of, and 
participants in, the organization, not-
withstanding a default by the member 
or participant creating the largest fi-
nancial exposure for the organization 
in extreme but plausible market condi-
tions; and 
‘‘(II) enable the organization to 
cover the operating costs of the orga-
nization for a period of 1 year, cal-
culated on a rolling basis. 
‘‘(C) PARTICIPANT AND PRODUCT ELIGI-
BILITY.—
613 
‘‘(i) The derivatives clearing organiza-
tion shall establish— 
‘‘(I) appropriate admission and 
continuing eligibility standards (in-
cluding sufficient financial resources 
and operational capacity to meet obli-
gations arising from participation in 
the organization) for members of and 
participants in the organization; and 
‘‘(II) appropriate standards for 
determining eligibility of agreements, 
contracts, or transactions submitted 
to the organization for clearing. 
‘‘(ii) The derivatives clearing organi-
zation shall have procedures in place to 
verify that participation and membership 
requirements are met on an ongoing basis. 
‘‘(iii) The participation and member-
ship requirements of the derivatives clear-
ing organization shall be objective, publicly 
disclosed, and permit fair and open access. 
‘‘(D) RISK MANAGEMENT.— 
‘‘(i) The derivatives clearing organiza-
tion shall have the ability to manage the 
risks associated with discharging the re-
614 
sponsibilities of a derivatives clearing orga-
nization through the use of appropriate 
tools and procedures. 
‘‘(ii) The derivatives clearing organi-
zation shall measure the credit exposures 
of the organization to the members of, and 
participants in, the organization at least 
once each business day and shall monitor 
the exposures throughout the business day. 
‘‘(iii) Through margin requirements 
and other risk control mechanisms, a de-
rivatives clearing organization shall limit 
the exposures of the organization to poten-
tial losses from defaults by the members 
of, and participants in, the organization so 
that the operations of the organization 
would not be disrupted and non-defaulting 
members or participants would not be ex-
posed to losses that they cannot anticipate 
or control. 
‘‘(iv) Margin required from all mem-
bers and participants shall be sufficient to 
cover potential exposures in normal market 
conditions.
615 
‘‘(v) The models and parameters used 
in setting margin requirements shall be 
risk-based and reviewed regularly. 
‘‘(E) 
SETTLEMENT
PROCEDURES.—The 
derivatives clearing organization shall— 
‘‘(i) complete money settlements on a 
timely basis, and not less than once each 
business day; 
‘‘(ii) employ money settlement ar-
rangements that eliminate or strictly limit 
the exposure of the organization to settle-
ment bank risks, such as credit and liquid-
ity risks from the use of banks to effect 
money settlements; 
‘‘(iii) ensure money settlements are 
final when effected; 
‘‘(iv) maintain an accurate record of 
the flow of funds associated with each 
money settlement; 
‘‘(v) have the ability to comply with 
the terms and conditions of any permitted 
netting or offset arrangements with other 
clearing organizations; and 
‘‘(vi) for physical settlements, estab-
lish rules that clearly state the obligations