H. R. 4173—279 
under paragraph (3)(B) shall not be subject to judicial 
review pursuant to subsection (b). 
(E) WITHDRAWAL
OF
REQUEST.—A request under 
subparagraph (A) or (B) may be withdrawn by the Commis-
sion making the request at any time prior to a determina-
tion being made pursuant to paragraph (3) for any reason 
by providing written notice to the head of the other 
Commission. 
(3) DETERMINATION.—Notwithstanding any other provision 
of law, no later than 120 days after the date of receipt of 
a request— 
(A) under subparagraph (A) or (B) of paragraph (2), 
unless such request has been withdrawn pursuant to para-
graph (2)(E), the Securities and Exchange Commission or 
the Commodity Futures Trading Commission, as applicable, 
shall, by order, issue the determination requested in 
subparagraph (A) or (B) of paragraph (2), as applicable, 
and the reasons therefor; or 
(B) under paragraph (2)(D), unless such request has 
been withdrawn, the Securities and Exchange Commission 
or the Commodity Futures Trading Commission, as 
applicable, shall grant an exemption or provide reasons 
for not granting such exemption, provided that any decision 
by the Securities and Exchange Commission not to grant 
such exemption shall not be reviewable under section 25 
of the Securities Exchange Act of 1934 (15 U.S.C. 78y). 
(b) JUDICIAL RESOLUTION.— 
(1) 
IN
GENERAL.—The 
Commodity 
Futures 
Trading 
Commission or the Securities and Exchange Commission may 
petition the United States Court of Appeals for the District 
of Columbia Circuit for review of a final order of the other 
Commission issued pursuant to subsection (a)(3)(A), with 
respect to a novel derivative product that may have elements 
of both securities and contracts of sale of a commodity for 
future delivery (or options on such contracts or options on 
commodities) that it believes affects its statutory jurisdiction 
within 60 days after the date of entry of such order, a written 
petition requesting a review of the order. Any such proceeding 
shall be expedited by the Court of Appeals. 
(2) TRANSMITTAL OF PETITION AND RECORD.—A copy of a 
petition described in paragraph (1) shall be transmitted not 
later than 1 business day after filing by the complaining 
Commission to the responding Commission. On receipt of the 
petition, the responding Commission shall file with the court 
a copy of the order under review and any documents referred 
to therein, and any other materials prescribed by the court. 
(3) STANDARD OF REVIEW.—The court, in considering a peti-
tion filed pursuant to paragraph (1), shall give no deference 
to, or presumption in favor of, the views of either Commission. 
(4) JUDICIAL STAY.—The filing of a petition by the com-
plaining Commission pursuant to paragraph (1) shall operate 
as a stay of the order, until the date on which the determination 
of the court is final (including any appeal of the determination). 
SEC. 719. STUDIES. 
(a) STUDY ON EFFECTS OF POSITION LIMITS ON TRADING ON 
EXCHANGES IN THE UNITED STATES.—
H. R. 4173—280 
(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 specu-
lation and on the movement of transactions from exchanges 
in the United States to trading venues outside the United 
States. 
(2) REPORT TO THE CONGRESS.—Within 12 months after 
the imposition of position limits pursuant to the other provi-
sions of this title, the Commodity Futures Trading Commission, 
in consultation with each entity that is a designated contract 
market under the Commodity Exchange Act, shall submit to 
the Congress a report on the matters described in paragraph 
(1). 
(3) REQUIRED HEARING.—Within 30 legislative days after 
the submission to the Congress of the report described in para-
graph (2), the Committee on Agriculture of the House of Rep-
resentatives shall hold a hearing examining the findings of 
the report. 
(4) BIENNIAL REPORTING.—In addition to the study required 
in paragraph (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 
effectiveness 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 participants, 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, 
legislators, 
and 
other 
interested parties. 
(b) STUDY ON FEASIBILITY OF REQUIRING USE OF STANDARDIZED 
ALGORITHMIC DESCRIPTIONS FOR FINANCIAL DERIVATIVES.— 
(1) IN GENERAL.—The Securities and Exchange 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 defined in the 
study shall be designed to facilitate computerized analysis of 
individual derivative contracts and to calculate net exposures 
to complex derivatives. The algorithmic descriptions shall be 
optimized for simultaneous use by— 
(A) commercial users and traders of derivatives; 
(B) derivative clearing houses, exchanges and elec-
tronic trading platforms; 
(C) trade repositories and regulator investigations of 
market activities; and 
(D) systemic risk regulators. 
The study will also examine the extent to which the algorithmic 
description, together with standardized and extensible legal
H. R. 4173—281 
definitions, may serve as the binding legal definition of deriva-
tive contracts. The study will examine the logistics of possible 
implementations of standardized algorithmic descriptions for 
derivatives contracts. The study shall be limited to electronic 
formats for exchange of derivative contract descriptions and 
will not contemplate disclosure of proprietary valuation models. 
(3) INTERNATIONAL
COORDINATION.—In conducting the 
study, the Securities and Exchange Commission and the Com-
modity Futures Trading Commission shall coordinate the study 
with international financial institutions and regulators as 
appropriate and practical. 
(4) REPORT.—Within 8 months after the date of the enact-
ment of this Act, the Securities and Exchange Commission 
and the Commodity Futures Trading Commission shall jointly 
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 Affairs of the Senate a written report 
which contains the results of the study required by paragraphs 
(1) through (3). 
(c) INTERNATIONAL SWAP REGULATION.— 
(1) 
IN
GENERAL.—The 
Commodity 
Futures 
Trading 
Commission and the Securities and Exchange Commission shall 
jointly conduct a study— 
(A) relating to— 
(i) swap regulation in the United States, Asia, 
and Europe; and 
(ii) clearing house and clearing agency regulation 
in the United States, Asia, and Europe; and 
(B) that identifies areas of regulation that are similar 
in the United States, Asia and Europe and other areas 
of regulation that could be harmonized 
(2) REPORT.—Not later than 18 months after the date of 
enactment of this Act, the Commodity Futures Trading 
Commission and the Securities and Exchange Commission shall 
submit to the Committee on Agriculture, Nutrition, and For-
estry and the Committee on Banking, Housing, and Urban 
Affairs of the Senate and the Committee on Agriculture and 
the Committee on Financial Services of the House of Represent-
atives a report that includes a description of the results of 
the study under subsection (a), including— 
(A) identification of the major exchanges and their 
regulator in each geographic area for the trading of swaps 
and security-based swaps including a listing of the major 
contracts and their trading volumes and notional values 
as well as identification of the major swap dealers partici-
pating in such markets; 
(B) identification of the major clearing houses and 
clearing agencies and their regulator in each geographic 
area for the clearing of swaps and security-based swaps, 
including a listing of the major contracts and the clearing 
volumes and notional values as well as identification of 
the major clearing members of such clearing houses and 
clearing agencies in such markets; 
(C) a description of the comparative methods of clearing 
swaps in the United States, Asia, and Europe; and
H. R. 4173—282 
(D) a description of the various systems used for estab-
lishing margin on individual swaps, security-based swaps, 
and swap portfolios. 
(d) STABLE VALUE CONTRACTS.— 
(1) DETERMINATION.— 
(A) STATUS.—Not later than 15 months after the date 
of the enactment of this Act, the Securities and Exchange 
Commission and the Commodity Futures Trading Commis-
sion shall, jointly, conduct a study to determine whether 
stable value contracts fall within the definition of a swap. 
In making the determination required under this subpara-
graph, the Commissions jointly shall consult with the 
Department of Labor, the Department of the Treasury, 
and the State entities that regulate the issuers of stable 
value contracts. 
(B) REGULATIONS.—If the Commissions determine that 
stable value contracts fall within the definition of a swap, 
the Commissions jointly shall determine if an exemption 
for stable value contracts from the definition of swap is 
appropriate and in the public interest. The Commissions 
shall issue regulations implementing the determinations 
required under this paragraph. Until the effective date 
of such regulations, and notwithstanding any other provi-
sion of this title, the requirements of this title shall not 
apply to stable value contracts. 
(C) LEGAL CERTAINTY.—Stable value contracts in effect 
prior to the effective date of the regulations described in 
subparagraph (B) shall not be considered swaps. 
(2) DEFINITION.—For purposes of this subsection, the term 
‘‘stable value contract’’ means any contract, agreement, or trans-
action that provides a crediting interest rate and guaranty 
or financial assurance of liquidity at contract or book value 
prior to maturity offered by a bank, insurance company, or 
other State or federally regulated financial institution for the 
benefit of any individual or commingled fund available as an 
investment in an employee benefit plan (as defined in section 
3(3) of the Employee Retirement Income Security Act of 1974, 
including plans described in section 3(32) of such Act) subject 
to participant direction, an eligible deferred compensation plan 
(as defined in section 457(b) of the Internal Revenue Code 
of 1986) that is maintained by an eligible employer described 
in section 457(e)(1)(A) of such Code, an arrangement described 
in section 403(b) of such Code, or a qualified tuition program 
(as defined in section 529 of such Code). 
SEC. 720. 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 Act, negotiate a memo-
randum of understanding to establish procedures for— 
(A) applying their respective authorities in a manner so 
as to ensure effective and efficient regulation in the public 
interest; 
(B) resolving conflicts concerning overlapping jurisdiction 
between the 2 agencies; and 
(C) avoiding, to the extent possible, conflicting or duplica-
tive regulation.
H. R. 4173—283 
(2) Such memorandum and any subsequent amendments to 
the memorandum shall be promptly submitted to the appropriate 
committees of Congress. 
(b) The Commodity Futures Trading Commission and the Fed-
eral Energy Regulatory Commission shall, not later than 180 days 
after the date of the enactment of this section, negotiate a memo-
randum of understanding to share information that may be 
requested where either Commission is conducting an investigation 
into potential manipulation, fraud, or market power abuse in mar-
kets subject to such Commission’s regulation or oversight. Shared 
information shall remain subject to the same restrictions on disclo-
sure applicable to the Commission initially holding the information. 
PART II—REGULATION OF SWAP MARKETS 
SEC. 721. DEFINITIONS. 
(a) IN GENERAL.—Section 1a of the Commodity Exchange Act 
(7 U.S.C. 1a) is amended— 
(1) by redesignating paragraphs (2), (3) and (4), (5) through 
(17), (18) through (23), (24) through (28), (29), (30), (31) through 
(33), and (34) as paragraphs (6), (8) and (9), (11) through 
(23), (26) through (31), (34) through (38), (40), (41), (44) through 
(46), and (51), respectively; 
(2) by inserting after paragraph (1) the following: 
‘‘(2) APPROPRIATE
FEDERAL
BANKING
AGENCY.—The term 
‘appropriate Federal banking agency’— 
‘‘(A) has the meaning given the term in section 3 
of the Federal Deposit Insurance Act (12 U.S.C. 1813); 
‘‘(B) means the Board in the case of a noninsured 
State bank; and 
‘‘(C) is the Farm Credit Administration for farm credit 
system institutions. 
‘‘(3) ASSOCIATED PERSON OF A SECURITY-BASED SWAP DEALER 
OR MAJOR SECURITY-BASED SWAP PARTICIPANT.—The term ‘asso-
ciated person of a security-based swap dealer or major security- 
based swap participant’ has the meaning given the term in 
section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 
78c(a)). 
‘‘(4) ASSOCIATED PERSON OF A SWAP DEALER OR MAJOR SWAP 
PARTICIPANT.— 
‘‘(A) IN GENERAL.—The term ‘associated person of a 
swap dealer or major swap participant’ means a person 
who is associated with a swap dealer or major swap partici-
pant as a partner, officer, employee, or agent (or any person 
occupying a similar status or performing similar functions), 
in any capacity that involves— 
‘‘(i) the solicitation or acceptance of swaps; or 
‘‘(ii) the supervision of any person or persons so 
engaged. 
‘‘(B) EXCLUSION.—Other than for purposes of section 
4s(b)(6), the term ‘associated person of a swap dealer or 
major swap participant’ does not include any person associ-
ated with a swap dealer or major swap participant the 
functions of which are solely clerical or ministerial. 
‘‘(5) BOARD.—The term ‘Board’ means the Board of Gov-
ernors of the Federal Reserve System.’’;
H. R. 4173—284 
(3) by inserting after paragraph (6) (as redesignated by 
paragraph (1)) the following: 
‘‘(7) CLEARED SWAP.—The term ‘cleared swap’ means any 
swap that is, directly or indirectly, submitted to and cleared 
by a derivatives clearing organization registered with the 
Commission.’’; 
(4) in paragraph (9) (as redesignated by paragraph (1)), 
by striking ‘‘except onions’’ and all that follows through the 
period at the end and inserting the following: ‘‘except onions 
(as provided by the first section of Public Law 85–839 (7 U.S.C. 
13–1)) and motion picture box office receipts (or any index, 
measure, value, or data related to such receipts), and all serv-
ices, rights, and interests (except motion picture box office 
receipts, or any index, measure, value or data related to such 
receipts) in which contracts for future delivery are presently 
or in the future dealt in.’’; 
(5) by inserting after paragraph (9) (as redesignated by 
paragraph (1)) the following: 
‘‘(10) COMMODITY POOL.— 
‘‘(A) IN GENERAL.—The term ‘commodity pool’ means 
any investment trust, syndicate, or similar form of enter-
prise operated for the purpose of trading in commodity 
interests, including any— 
‘‘(i) commodity for future delivery, security futures 
product, or swap; 
‘‘(ii) agreement, contract, or transaction described 
in section 2(c)(2)(C)(i) or section 2(c)(2)(D)(i); 
‘‘(iii) commodity option authorized under section 
4c; or 
‘‘(iv) leverage transaction authorized under section 
19. 
‘‘(B) FURTHER DEFINITION.—The Commission, by rule 
or regulation, may include within, or exclude from, the 
term ‘commodity pool’ any investment trust, syndicate, or 
similar form of enterprise if the Commission determines 
that the rule or regulation will effectuate the purposes 
of this Act.’’; 
(6) by striking paragraph (11) (as redesignated by para-
graph (1)) and inserting the following: 
‘‘(11) COMMODITY POOL OPERATOR.— 
‘‘(A) IN GENERAL.—The term ‘commodity pool operator’ 
means any person— 
‘‘(i) engaged in a business that is of the nature 
of a commodity pool, investment trust, syndicate, or 
similar form of enterprise, and who, in connection 
therewith, solicits, accepts, or receives from others, 
funds, securities, or property, either directly or through 
capital contributions, the sale of stock or other forms 
of securities, or otherwise, for the purpose of trading 
in commodity interests, including any— 
‘‘(I) commodity for future delivery, security 
futures product, or swap; 
‘‘(II) 
agreement, 
contract, 
or 
transaction 
described 
in 
section 
2(c)(2)(C)(i) 
or 
section 
2(c)(2)(D)(i); 
‘‘(III) commodity option authorized under sec-
tion 4c; or
H. R. 4173—285 
‘‘(IV) leverage transaction authorized under 
section 19; or 
‘‘(ii) who is registered with the Commission as 
a commodity pool operator. 
‘‘(B) FURTHER DEFINITION.—The Commission, by rule 
or regulation, may include within, or exclude from, the 
term ‘commodity pool operator’ any person engaged in a 
business that is of the nature of a commodity pool, invest-
ment trust, syndicate, or similar form of enterprise if the 
Commission determines that the rule or regulation will 
effectuate the purposes of this Act.’’; 
(7) in paragraph (12) (as redesignated by paragraph (1)), 
in subparagraph (A)— 
(A) in clause (i)— 
(i) in subclause (I), by striking ‘‘made or to be 
made on or subject to the rules of a contract market 
or derivatives transaction execution facility’’ and 
inserting ‘‘, security futures product, or swap’’; 
(ii) by redesignating subclauses (II) and (III) as 
subclauses (III) and (IV); 
(iii) by inserting after subclause (I) the following: 
‘‘(II) any agreement, contract, or transaction 
described 
in 
section 
2(c)(2)(C)(i) 
or 
section 
2(c)(2)(D)(i)’’; and 
(iv) in subclause (IV) (as so redesignated), by 
striking ‘‘or’’; 
(B) in clause (ii), by striking the period at the end 
and inserting a semicolon; and 
(C) by adding at the end the following: 
‘‘(iii) is registered with the Commission as a com-
modity trading advisor; or 
‘‘(iv) the Commission, by rule or regulation, may 
include if the Commission determines that the rule 
or regulation will effectuate the purposes of this Act.’’; 
(8) in paragraph (17) (as redesignated by paragraph (1)), 
in subparagraph (A), in the matter preceding clause (i), by 
striking ‘‘paragraph (12)(A)’’ and inserting ‘‘paragraph (18)(A)’’; 
(9) in paragraph (18) (as redesignated by paragraph (1))— 
(A) in subparagraph (A)— 
(i) in the matter following clause (vii)(III)— 
(I) by striking ‘‘section 1a (11)(A)’’ and 
inserting ‘‘paragraph (17)(A)’’; and 
(II) by striking ‘‘$25,000,000’’ and inserting 
‘‘$50,000,000’’; and 
(ii) in clause (xi), in the matter preceding subclause 
(I), by striking ‘‘total assets in an amount’’ and 
inserting ‘‘amounts invested on a discretionary basis, 
the aggregate of which is’’; 
(10) by striking paragraph (22) (as redesignated by para-
graph (1)) and inserting the following: 
‘‘(22) FLOOR BROKER.— 
‘‘(A) IN GENERAL.—The term ‘floor broker’ means any 
person— 
‘‘(i) who, in or surrounding any pit, ring, post, 
or other place provided by a contract market for the 
meeting of persons similarly engaged, shall purchase 
or sell for any other person—
H. R. 4173—286 
‘‘(I) any commodity for future delivery, security 
futures product, or swap; or 
‘‘(II) any commodity option authorized under 
section 4c; or 
‘‘(ii) who is registered with the Commission as 
a floor broker. 
‘‘(B) FURTHER DEFINITION.—The Commission, by rule 
or regulation, may include within, or exclude from, the 
term ‘floor broker’ any person in or surrounding any pit, 
ring, post, or other place provided by a contract market 
for the meeting of persons similarly engaged who trades 
for any other person if the Commission determines that 
the rule or regulation will effectuate the purposes of this 
Act.’’; 
(11) by striking paragraph (23) (as redesignated by para-
graph (1)) and inserting the following: 
‘‘(23) FLOOR TRADER.— 
‘‘(A) IN GENERAL.—The term ‘floor trader’ means any 
person— 
‘‘(i) who, in or surrounding any pit, ring, post, 
or other place provided by a contract market for the 
meeting of persons similarly engaged, purchases, or 
sells solely for such person’s own account— 
‘‘(I) any commodity for future delivery, security 
futures product, or swap; or 
‘‘(II) any commodity option authorized under 
section 4c; or 
‘‘(ii) who is registered with the Commission as 
a floor trader. 
‘‘(B) FURTHER DEFINITION.—The Commission, by rule 
or regulation, may include within, or exclude from, the 
term ‘floor trader’ any person in or surrounding any pit, 
ring, post, or other place provided by a contract market 
for the meeting of persons similarly engaged who trades 
solely for such person’s own account if the Commission 
determines that the rule or regulation will effectuate the 
purposes of this Act.’’; 
(12) by inserting after paragraph (23) (as redesignated 
by paragraph (1)) the following: 
‘‘(24) FOREIGN
EXCHANGE
FORWARD.—The term ‘foreign 
exchange forward’ means a transaction that solely involves 
the exchange of 2 different currencies on a specific future 
date at a fixed rate agreed upon on the inception of the contract 
covering the exchange. 
‘‘(25) 
FOREIGN
EXCHANGE
SWAP.—The 
term 
‘foreign 
exchange swap’ means a transaction that solely involves— 
‘‘(A) an exchange of 2 different currencies on a specific 
date at a fixed rate that is agreed upon on the inception 
of the contract covering the exchange; and 
‘‘(B) a reverse exchange of the 2 currencies described 
in subparagraph (A) at a later date and at a fixed rate 
that is agreed upon on the inception of the contract covering 
the exchange.’’; 
(13) by striking paragraph (28) (as redesignated by para-
graph (1)) and inserting the following: 
‘‘(28) FUTURES COMMISSION MERCHANT.—
H. R. 4173—287 
‘‘(A) IN GENERAL.—The term ‘futures commission mer-
chant’ means an individual, association, partnership, cor-
poration, or trust— 
‘‘(i) that— 
‘‘(I) is— 
‘‘(aa) engaged in soliciting or in accepting 
orders for— 
‘‘(AA) the purchase or sale of a com-
modity for future delivery; 
‘‘(BB) a security futures product; 
‘‘(CC) a swap; 
‘‘(DD) any agreement, contract, or 
transaction 
described 
in 
section 
2(c)(2)(C)(i) or section 2(c)(2)(D)(i); 
‘‘(EE) any commodity option author-
ized under section 4c; or 
‘‘(FF) 
any 
leverage 
transaction 
authorized under section 19; or 
‘‘(bb) acting as a counterparty in any 
agreement, contract, or transaction described 
in section 2(c)(2)(C)(i) or section 2(c)(2)(D)(i); 
and 
‘‘(II) in or in connection with the activities 
described in items (aa) or (bb) of subclause (I), 
accepts any money, securities, or property (or 
extends credit in lieu thereof) to margin, guar-
antee, or secure any trades or contracts that result 
or may result therefrom; or 
‘‘(ii) that is registered with the Commission as 
a futures commission merchant. 
‘‘(B) FURTHER DEFINITION.—The Commission, by rule 
or regulation, may include within, or exclude from, the 
term ‘futures commission merchant’ any person who 
engages in soliciting or accepting orders for, or acting as 
a counterparty in, any agreement, contract, or transaction 
subject to this Act, and who accepts any money, securities, 
or property (or extends credit in lieu thereof) to margin, 
guarantee, or secure any trades or contracts that result 
or may result therefrom, if the Commission determines 
that the rule or regulation will effectuate the purposes 
of this Act.’’; 
(14) in paragraph (30) (as redesignated by paragraph (1)), 
in subparagraph (B), by striking ‘‘state’’ and inserting ‘‘State’’; 
(15) by striking paragraph (31) (as redesignated by para-
graph (1)) and inserting the following: 
‘‘(31) INTRODUCING BROKER.— 
‘‘(A) IN GENERAL.—The term ‘introducing broker’ means 
any person (except an individual who elects to be and 
is registered as an associated person of a futures commis-
sion merchant)— 
‘‘(i) who— 
‘‘(I) is engaged in soliciting or in accepting 
orders for— 
‘‘(aa) the purchase or sale of any com-
modity for future delivery, security futures 
product, or swap;
H. R. 4173—288 
‘‘(bb) any agreement, contract, or trans-
action described in section 2(c)(2)(C)(i) or sec-
tion 2(c)(2)(D)(i); 
‘‘(cc) any commodity option authorized 
under section 4c; or 
‘‘(dd) any leverage transaction authorized 
under section 19; and 
‘‘(II) does not accept any money, securities, 
or property (or extend credit in lieu thereof) to 
margin, guarantee, or secure any trades or con-
tracts that result or may result therefrom; or 
‘‘(ii) who is registered with the Commission as 
an introducing broker. 
‘‘(B) FURTHER DEFINITION.—The Commission, by rule 
or regulation, may include within, or exclude from, the 
term ‘introducing broker’ any person who engages in solic-
iting or accepting orders for any agreement, contract, or 
transaction subject to this Act, and who does not accept 
any money, securities, or property (or extend credit in 
lieu thereof) to margin, guarantee, or secure any trades 
or contracts that result or may result therefrom, if the 
Commission determines that the rule or regulation will 
effectuate the purposes of this Act.’’; 
(16) by inserting after paragraph (31) (as redesignated 
by paragraph (1)) the following: 
‘‘(32) MAJOR SECURITY-BASED SWAP PARTICIPANT.—The term 
‘major security-based swap participant’ has the meaning given 
the term in section 3(a) of the Securities Exchange Act of 
1934 (15 U.S.C. 78c(a)). 
‘‘(33) 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 position in swaps for 
any of the major swap categories as determined by 
the Commission, excluding— 
‘‘(I) positions held for hedging or mitigating 
commercial risk; and 
‘‘(II) positions maintained by any employee 
benefit plan (or any contract held by such a plan) 
as defined in paragraphs (3) and (32) of section 
3 of the Employee Retirement Income Security 
Act of 1974 (29 U.S.C. 1002) for the primary pur-
pose of hedging or mitigating any risk directly 
associated with the operation of the plan; 
‘‘(ii) whose outstanding swaps create substantial 
counterparty exposure that could have serious adverse 
effects on the financial stability of the United States 
banking system or financial markets; or 
‘‘(iii)(I) is a financial entity that is highly leveraged 
relative to the amount of capital it holds and that 
is not subject to capital requirements established by 
an appropriate Federal banking agency; and 
‘‘(II) maintains a substantial position in out-
standing swaps in any major swap category as deter-
mined by the Commission. 
‘‘(B) DEFINITION OF SUBSTANTIAL POSITION.—For pur-
poses of subparagraph (A), the Commission shall define
H. R. 4173—289 
by rule or regulation the term ‘substantial position’ at 
the threshold that the Commission determines to be pru-
dent for the effective monitoring, management, and over-
sight of entities that are systemically important or can 
significantly impact the financial system of the United 
States. In setting the definition under this subparagraph, 
the Commission shall consider the person’s relative position 
in uncleared as opposed to cleared swaps and may take 
into consideration the value and quality of collateral held 
against counterparty exposures. 
‘‘(C) SCOPE OF DESIGNATION.—For purposes of subpara-
graph (A), a person may be designated as a major swap 
participant for 1 or more categories of swaps without being 
classified as a major swap participant for all classes of 
swaps. 
‘‘(D) EXCLUSIONS.—The definition under this paragraph 
shall not include an entity whose primary business is pro-
viding financing, and uses derivatives for the purpose of 
hedging underlying commercial risks related to interest 
rate and foreign currency exposures, 90 percent or more 
of which arise from financing that facilitates the purchase 
or lease of products, 90 percent or more of which are 
manufactured by the parent company or another subsidiary 
of the parent company.’’; 
(17) by inserting after paragraph (38) (as redesignated 
by paragraph (1)) the following: 
‘‘(39) PRUDENTIAL REGULATOR.—The term ‘prudential regu-
lator’ means— 
‘‘(A) the Board in the case of a swap dealer, 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; 
‘‘(ii) a State-chartered branch or agency of a foreign 
bank; 
‘‘(iii) any foreign bank which does not operate an 
insured branch; 
‘‘(iv) any organization operating under section 25A 
of the Federal Reserve Act or having an agreement 
with the Board under section 225 of the Federal 
Reserve Act; 
‘‘(v) any bank holding company (as defined in sec-
tion 2 of the Bank Holding Company Act of 1965 
(12 U.S.C. 1841)), any foreign bank (as defined in 
section 1(b)(7) of the International Banking Act of 1978 
(12 U.S.C. 3101(b)(7)) that is treated as a bank holding 
company under section 8(a) of the International 
Banking Act of 1978 (12 U.S.C. 3106(a)), and any sub-
sidiary of such a company or foreign bank (other than 
a subsidiary that is described in subparagraph (A) 
or (B) or that is required to be registered with the 
Commission as a swap dealer or major swap partici-
pant under this Act or with the Securities and 
Exchange Commission as a security-based swap dealer 
or major security-based swap participant);
H. R. 4173—290 
‘‘(vi) after the transfer date (as defined in section 
311 of the Dodd-Frank Wall Street Reform and Con-
sumer Protection Act), any savings and loan holding 
company (as defined in section 10 of the Home Owners’ 
Loan Act (12 U.S.C. 1467a)) and any subsidiary of 
such company (other than a subsidiary that is 
described in subparagraph (A) or (B) or that is required 
to be registered as a swap dealer or major swap partici-
pant with the Commission under this Act or with the 
Securities and Exchange Commission as a security- 
based swap dealer or major security-based swap 
participant); or 
‘‘(vii) any organization operating under section 25A 
of the Federal Reserve Act (12U.S.C. 611 et seq.) or 
having an agreement with the Board under section 
25 of the Federal Reserve Act (12 U.S.C. 601 et seq.); 
‘‘(B) the Office of the Comptroller of the Currency 
in the case of a swap dealer, major swap participant, secu-
rity-based swap dealer, or major security-based swap 
participant that is— 
‘‘(i) a national bank; 
‘‘(ii) a federally chartered branch or agency of a 
foreign bank; or 
‘‘(iii) any Federal savings association; 
‘‘(C) the Federal Deposit Insurance Corporation in the 
case of a swap dealer, major swap participant, security- 
based swap dealer, or major security-based swap partici-
pant that is— 
‘‘(i) a State-chartered bank that is not a member 
of the Federal Reserve System; or 
‘‘(ii) any State savings association; 
‘‘(D) the Farm Credit Administration, in the case of 
a swap dealer, major swap participant, security-based swap 
dealer, or major security-based swap participant that is 
an institution chartered under the Farm Credit Act of 
1971 (12 U.S.C. 2001 et seq.); and 
‘‘(E) the Federal Housing Finance Agency in the case 
of a swap dealer, major swap participant, security-based 
swap dealer, or major security-based swap participant that 
is a regulated entity (as such term is defined in section 
1303 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992).’’; 
(18) in paragraph (40) (as redesignated by paragraph (1))— 
(A) by striking subparagraph (B); 
(B) by redesignating subparagraphs (C), (D), and (E) 
as subparagraphs (B), (C), and (F), respectively; 
(C) in subparagraph (C) (as so redesignated), by 
striking ‘‘and’’; and 
(D) by inserting after subparagraph (C) (as so redesig-
nated) the following: 
‘‘(D) a swap execution facility registered under section 
5h; 
‘‘(E) a swap data repository registered under section 
21; and’’; 
(19) by inserting after paragraph (41) (as redesignated 
by paragraph (1)) the following:
H. R. 4173—291 
‘‘(42) SECURITY-BASED
SWAP.—The term ‘security-based 
swap’ has the meaning given the term in section 3(a) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)). 
‘‘(43) SECURITY-BASED SWAP DEALER.—The term ‘security- 
based swap dealer’ has the meaning given the term in section 
3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).’’; 
(20) in paragraph (46) (as redesignated by paragraph (1)), 
by striking ‘‘subject to section 2(h)(7)’’ and inserting ‘‘subject 
to section 2(h)(5)’’; 
(21) by inserting after paragraph (46) (as redesignated 
by paragraph (1)) the following: 
‘‘(47) SWAP.— 
‘‘(A) IN GENERAL.—Except as provided in subparagraph 
(B), the term ‘swap’ means any agreement, contract, or 
transaction— 
‘‘(i) that is a put, call, cap, floor, collar, or similar 
option of any kind that is for the purchase or sale, 
or based on the value, of 1 or more interest or other 
rates, currencies, commodities, securities, instruments 
of indebtedness, indices, quantitative measures, or 
other financial or economic interests or property of 
any kind; 
‘‘(ii) that provides for any purchase, sale, payment, 
or delivery (other than a dividend on an equity secu-
rity) that is dependent on the occurrence, nonoccur-
rence, or the extent of the occurrence of an event 
or contingency associated with a potential financial, 
economic, or commercial consequence; 
‘‘(iii) that provides on an executory basis for the 
exchange, on a fixed or contingent basis, of 1 or more 
payments based on the value or level of 1 or more 
interest or other rates, currencies, commodities, securi-
ties, instruments of indebtedness, indices, quantitative 
measures, or other financial or economic 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 cur-
rent or future direct or indirect ownership interest 
in an asset (including any enterprise or investment 
pool) or liability that incorporates the financial risk 
so transferred, including any agreement, contract, or 
transaction commonly known as— 
‘‘(I) an interest rate swap; 
‘‘(II) a rate floor; 
‘‘(III) a rate cap; 
‘‘(IV) a rate collar; 
‘‘(V) a cross-currency rate swap; 
‘‘(VI) a basis swap; 
‘‘(VII) a currency swap; 
‘‘(VIII) a foreign exchange swap; 
‘‘(IX) a total return swap; 
‘‘(X) an equity index swap; 
‘‘(XI) an equity swap; 
‘‘(XII) a debt index swap; 
‘‘(XIII) a debt swap;
H. R. 4173—292 
‘‘(XIV) a credit spread; 
‘‘(XV) a credit default swap; 
‘‘(XVI) a credit swap; 
‘‘(XVII) a weather swap; 
‘‘(XVIII) an energy swap; 
‘‘(XIX) a metal swap; 
‘‘(XX) an agricultural swap; 
‘‘(XXI) an emissions swap; and 
‘‘(XXII) a commodity swap; 
‘‘(iv) that is an agreement, contract, or transaction 
that is, or in the future becomes, commonly known 
to the trade as a swap; 
‘‘(v) including any security-based swap agreement 
which meets the definition of ‘swap agreement’ as 
defined in section 206A of the Gramm-Leach-Bliley 
Act (15 U.S.C. 78c note) of which a material term 
is based on the price, yield, value, or volatility of any 
security or any group or index of securities, or any 
interest therein; or 
‘‘(vi) that is any combination or permutation of, 
or option on, any agreement, contract, 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 commodity for future 
delivery (or option on such a contract), leverage con-
tract authorized under section 19, security futures 
product, 
or 
agreement, 
contract, 
or 
transaction 
described in section 2(c)(2)(C)(i) or section 2(c)(2)(D)(i); 
‘‘(ii) any sale of a nonfinancial commodity or secu-
rity for deferred shipment or delivery, so long as the 
transaction is intended to be physically settled; 
‘‘(iii) any put, call, straddle, option, or privilege 
on any security, certificate of deposit, or group or index 
of securities, including any interest therein or based 
on the value thereof, that is subject to— 
‘‘(I) the Securities Act of 1933 (15 U.S.C. 77a 
et seq.); and 
‘‘(II) the Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.); 
‘‘(iv) any put, call, straddle, option, or privilege 
relating to a foreign currency entered 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 pro-
viding for the purchase or sale of 1 or more securities 
on a fixed basis that is subject to— 
‘‘(I) the Securities Act of 1933 (15 U.S.C. 77a 
et seq.); and 
‘‘(II) the Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.); 
‘‘(vi) any agreement, contract, or transaction pro-
viding for the purchase or 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
H. R. 4173—293 
purchase 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 transaction; 
‘‘(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 under-
writer (as defined in section 2(a)(11) of the Securi-
ties Act of 1933 (15 U.S.C. 77b(a)(11)) by the issuer 
of such security for the purposes of raising capital, 
unless the agreement, contract, or transaction is 
entered into to manage a risk associated with cap-
ital raising; 
‘‘(ix) any agreement, contract, or transaction a 
counterparty of which is a Federal Reserve bank, the 
Federal Government, or a Federal agency that is 
expressly backed by the full faith and credit of the 
United States; and 
‘‘(x) any security-based swap, other than a security- 
based swap as described in subparagraph (D). 
‘‘(C) RULE
OF
CONSTRUCTION
REGARDING
MASTER 
AGREEMENTS.— 
‘‘(i) IN
GENERAL.—Except as provided in clause 
(ii), the term ‘swap’ includes a master agreement that 
provides for an agreement, contract, or transaction that 
is a swap under subparagraph (A), together with each 
supplement to any master agreement, without regard 
to whether the master agreement contains an agree-
ment, contract, or transaction that is not a swap pursu-
ant to subparagraph (A). 
‘‘(ii) EXCEPTION.—For purposes of clause (i), the 
master agreement shall be considered to be a swap 
only with respect to each agreement, contract, or trans-
action covered by the master agreement that is a swap 
pursuant to subparagraph (A). 
‘‘(D) MIXED
SWAP.—The term ‘security-based swap’ 
includes any agreement, contract, or transaction that is 
as described in section 3(a)(68)(A) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78c(a)(68)(A)) and also 
is based on the value of 1 or more interest or other rates, 
currencies, commodities, instruments of indebtedness, 
indices, quantitative measures, other financial or economic 
interest or property of any kind (other than a single secu-
rity or a narrow-based security index), or the occurrence, 
non-occurrence, or the extent of the occurrence of an event 
or contingency associated with a potential financial, eco-
nomic, or commercial consequence (other than an event 
described in subparagraph (A)(iii)). 
‘‘(E) TREATMENT
OF
FOREIGN
EXCHANGE
SWAPS
AND 
FORWARDS.— 
‘‘(i) IN GENERAL.—Foreign exchange swaps and for-
eign exchange forwards shall be considered swaps 
under this paragraph unless the Secretary makes a
H. R. 4173—294 
written determination under section 1b that either for-
eign exchange swaps or foreign exchange forwards or 
both— 
‘‘(I) should be not be regulated as swaps under 
this Act; and 
‘‘(II) are not structured to evade the Dodd- 
Frank Wall Street Reform and Consumer Protec-
tion Act in violation of any rule promulgated by 
the Commission pursuant to section 721(c) of that 
Act. 
‘‘(ii) CONGRESSIONAL NOTICE; EFFECTIVENESS.—The 
Secretary shall submit any written determination 
under clause (i) to the appropriate committees of Con-
gress, including the Committee on Agriculture, Nutri-
tion, and Forestry of the Senate and the Committee 
on Agriculture of the House of Representatives. Any 
such written determination by the Secretary shall not 
be effective until it is submitted to the appropriate 
committees of Congress. 
‘‘(iii) 
REPORTING.—Notwithstanding 
a 
written 
determination by the Secretary under clause (i), all 
foreign exchange swaps and foreign exchange forwards 
shall be reported to either a swap data repository, 
or, if there is no swap data repository that would 
accept such swaps or forwards, to the Commission 
pursuant to section 4r within such time period as 
the Commission may by rule or regulation prescribe. 
‘‘(iv) BUSINESS
STANDARDS.—Notwithstanding a 
written determination by the Secretary pursuant to 
clause (i), any party to a foreign exchange swap or 
forward that is a swap dealer or major swap participant 
shall conform to the business conduct standards con-
tained in section 4s(h). 
‘‘(v) SECRETARY.—For purposes of this subpara-
graph, the term ‘Secretary’ means the Secretary of 
the Treasury. 
‘‘(F) EXCEPTION FOR CERTAIN FOREIGN EXCHANGE SWAPS 
AND FORWARDS.— 
‘‘(i) REGISTERED ENTITIES.—Any foreign exchange 
swap and any foreign exchange forward that is listed 
and traded on or subject to the rules of a designated 
contract market or a swap execution facility, or that 
is cleared by a derivatives clearing organization, shall 
not be exempt from any provision of this Act or amend-
ments made by the Wall Street Transparency and 
Accountability Act of 2010 prohibiting fraud or manipu-
lation. 
‘‘(ii) RETAIL TRANSACTIONS.—Nothing in subpara-
graph (E) shall affect, or be construed to affect, the 
applicability of this Act or the jurisdiction of the 
Commission with respect to agreements, contracts, or 
transactions in foreign currency pursuant to section 
2(c)(2). 
‘‘(48) SWAP DATA REPOSITORY.—The term ‘swap data reposi-
tory’ means any person that collects and maintains information 
or records with respect to transactions or positions in, or the 
terms and conditions of, swaps entered into by third parties
H. R. 4173—295 
for the purpose of providing a centralized recordkeeping facility 
for swaps. 
‘‘(49) SWAP DEALER.— 
‘‘(A) IN GENERAL.—The term ‘swap dealer’ means any 
person who— 
‘‘(i) holds itself out as a dealer in swaps; 
‘‘(ii) makes a market in swaps; 
‘‘(iii) regularly enters into swaps with counterpar-
ties as an ordinary course of business for its own 
account; or 
‘‘(iv) engages in any activity causing the person 
to be commonly known in the trade as a dealer or 
market maker in swaps, 
provided however, in no event shall an insured depository 
institution be considered to be a swap dealer to the extent 
it offers to enter into a swap with a customer in connection 
with originating a loan with that customer. 
‘‘(B) INCLUSION.—A person may be designated as a 
swap dealer for a single type or single class or category 
of swap or activities and considered not to be a swap 
dealer for other types, classes, or categories of swaps or 
activities. 
‘‘(C) EXCEPTION.—The term ‘swap dealer’ does not 
include a person that enters into swaps for such person’s 
own account, either individually or in a fiduciary capacity, 
but not as a part of a regular business. 
‘‘(D) DE MINIMIS EXCEPTION.—The Commission shall 
exempt from designation as a swap dealer an entity that 
engages in a de minimis quantity of swap dealing in connec-
tion with transactions with or on behalf of its customers. 
The Commission shall promulgate regulations to establish 
factors with respect to the making of this determination 
to exempt. 
‘‘(50) SWAP EXECUTION FACILITY.—The term ‘swap execution 
facility’ means a trading system or platform in which multiple 
participants have the ability to execute or trade swaps by 
accepting bids and offers made by multiple participants in 
the facility or system, through any means of interstate com-
merce, including any trading facility, that— 
‘‘(A) facilitates the execution of swaps between persons; 
and 
‘‘(B) is not a designated contract market.’’. 
(22) in paragraph (51) (as redesignated by paragraph (1)), 
in subparagraph (A)(i), by striking ‘‘partipants’’ and inserting 
‘‘participants’’. 
(b) AUTHORITY TO DEFINE TERMS.—The Commodity Futures 
Trading Commission may adopt a rule to define— 
(1) the term ‘‘commercial risk’’; and 
(2) any other term included in an amendment to the Com-
modity Exchange Act (7 U.S.C. 1 et seq.) made by this subtitle. 
(c) MODIFICATION OF DEFINITIONS.—To include transactions and 
entities that have been structured to evade this subtitle (or an 
amendment made by this subtitle), the Commodity Futures Trading 
Commission shall adopt a rule to further define the terms ‘‘swap’’, 
‘‘swap dealer’’, ‘‘major swap participant’’, and ‘‘eligible contract 
participant’’.
H. R. 4173—296 
(d) EXEMPTIONS.—Section 4(c)(1) of the Commodity Exchange 
Act (7 U.S.C. 6(c)(1)) is amended by striking ‘‘except that’’ and 
all that follows through the period at the end and inserting the 
following: ‘‘except that— 
‘‘(A) unless the Commission is expressly authorized by any 
provision described in this subparagraph to grant exemptions, 
with respect to amendments made by subtitle A of the Wall 
Street Transparency and Accountability Act of 2010— 
‘‘(i) with respect to— 
‘‘(I) paragraphs (2), (3), (4), (5), and (7), paragraph 
(18)(A)(vii)(III), paragraphs (23), (24), (31), (32), (38), 
(39), (41), (42), (46), (47), (48), and (49) of section 
1a, and sections 2(a)(13), 2(c)(1)(D), 4a(a), 4a(b), 4d(c), 
4d(d), 4r, 4s, 5b(a), 5b(b), 5(d), 5(g), 5(h), 5b(c), 5b(i), 
8e, and 21; and 
‘‘(II) section 206(e) of the Gramm-Leach-Bliley Act 
(Public Law 106–102; 15 U.S.C. 78c note); and 
‘‘(ii) in sections 721(c) and 742 of the Dodd-Frank Wall 
Street Reform and Consumer Protection Act; and 
‘‘(B) the Commission and the Securities and Exchange 
Commission may by rule, regulation, or order jointly exclude 
any agreement, contract, or transaction from section 2(a)(1)(D)) 
if the Commissions determine that the exemption would be 
consistent with the public interest.’’. 
(e) CONFORMING AMENDMENTS.— 
(1) Section 2(c)(2)(B)(i)(II) of the Commodity Exchange Act 
(7 U.S.C. 2(c)(2)(B)(i)(II)) is amended— 
(A) in item (cc)— 
(i) in subitem (AA), by striking ‘‘section 1a(20)’’ 
and inserting ‘‘section 1a’’; and 
(ii) in subitem (BB), by striking ‘‘section 1a(20)’’ 
and inserting ‘‘section 1a’’; and 
(B) in item (dd), by striking ‘‘section 1a(12)(A)(ii)’’ and 
inserting ‘‘section 1a(18)(A)(ii)’’. 
(2) Section 4m(3) of the Commodity Exchange Act (7 U.S.C. 
6m(3)) is amended by striking ‘‘section 1a(6)’’ and inserting 
‘‘section 1a’’. 
(3) Section 4q(a)(1) of the Commodity Exchange Act (7 
U.S.C. 6o–1(a)(1)) is amended by striking ‘‘section 1a(4)’’ and 
inserting ‘‘section 1a(9)’’. 
(4) Section 5(e)(1) of the Commodity Exchange Act (7 U.S.C. 
7(e)(1)) is amended by striking ‘‘section 1a(4)’’ and inserting 
‘‘section 1a(9)’’. 
(5) Section 5a(b)(2)(F) of the Commodity Exchange Act 
(7 U.S.C. 7a(b)(2)(F)) is amended by striking ‘‘section 1a(4)’’ 
and inserting ‘‘section 1a(9)’’. 
(6) Section 5b(a) of the Commodity Exchange Act (7 U.S.C. 
7a–1(a)) is amended, in the matter preceding paragraph (1), 
by striking ‘‘section 1a(9)’’ and inserting ‘‘section 1a’’. 
(7) Section 5c(c)(2)(B) of the Commodity Exchange Act (7 
U.S.C. 7a–2(c)(2)(B)) is amended by striking ‘‘section 1a(4)’’ 
and inserting ‘‘section 1a(9)’’. 
(8) Section 6(g)(5)(B)(i) of the Securities Exchange Act of 
1934 (15 U.S.C. 78f(g)(5)(B)(i)) is amended— 
(A) in subclause (I), by striking ‘‘section 1a(12)(B)(ii)’’ 
and inserting ‘‘section 1a(18)(B)(ii)’’; and
H. R. 4173—297 
(B) in subclause (II), by striking ‘‘section 1a(12)’’ and 
inserting ‘‘section 1a(18)’’. 
(9) Section 402 of the Legal Certainty for Bank Products 
Act of 2000 (7 U.S.C. 27 et seq.) is amended— 
(A) in subsection (a)(7), by striking ‘‘section 1a(20)’’ 
and inserting ‘‘section 1a’’; 
(B) in subsection (b)(2), by striking ‘‘section 1a(12)’’ 
and inserting ‘‘section 1a’’; and 
(C) in subsection (c), by striking ‘‘section 1a(4)’’ and 
inserting ‘‘section 1a’’. 
(10) The first section of Public Law 85–839 (7 U.S.C. 13– 
1) is amended in subsection (a), in the first sentence, by 
inserting ‘‘motion picture box office receipts (or any index, 
measure, value, or data related to such receipts) or’’ after 
‘‘sale of’’. 
(f) EFFECTIVE DATE.—Notwithstanding any other provision of 
this Act, the amendments made by subsection (a)(4) shall take 
effect on June 1, 2010. 
SEC. 722. JURISDICTION. 
(a) EXCLUSIVE JURISDICTION.—Section 2(a)(1) of the Commodity 
Exchange Act (7 U.S.C. 2(a)(1)) is amended— 
(1) in subparagraph (A), in the first sentence— 
(A) by inserting ‘‘the Wall Street Transparency and 
Accountability Act of 2010 (including an amendment made 
by that Act) and’’ after ‘‘otherwise provided in’’; 
(B) by striking ‘‘(C) and (D)’’ and inserting ‘‘(C), (D), 
and (I)’’; 
(C) by striking ‘‘(c) through (i) of this section’’ and 
inserting ‘‘(c) and (f)’’; 
(D) by striking ‘‘contracts of sale’’ and inserting ‘‘swaps 
or contracts of sale’’; and 
(E) by striking ‘‘or derivatives transaction execution 
facility registered pursuant to section 5 or 5a’’ and inserting 
‘‘pursuant to section 5 or a swap execution facility pursuant 
to section 5h’’; and 
(2) by adding at the end the following: 
‘‘(G)(i) Nothing in this paragraph shall limit the juris-
diction conferred on the Securities and Exchange Commis-
sion by the Wall Street Transparency and Accountability 
Act of 2010 with regard to security-based swap agreements 
as defined pursuant to section 3(a)(78) of the Securities 
Exchange Act of 1934, and security-based swaps. 
‘‘(ii) In addition to the authority of the Securities and 
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, 
contract, or transaction described in clause (i). 
‘‘(H) Notwithstanding any other provision of law, the 
Wall Street Transparency and Accountability Act of 2010 
shall not apply to, and the Commodity Futures Trading 
Commission shall have no jurisdiction under such Act (or 
any amendments to the Commodity Exchange Act made 
by such Act) with respect to, any security other than a 
security-based swap.’’.
H. R. 4173—298 
(b) REGULATION OF SWAPS UNDER FEDERAL AND STATE LAW.— 
Section 12 of the Commodity Exchange Act (7 U.S.C. 16) is amended 
by adding at the end the following: 
‘‘(h) REGULATION OF SWAPS AS INSURANCE UNDER STATE LAW.— 
A swap— 
‘‘(1) shall not be considered to be insurance; and 
‘‘(2) may not be regulated as an insurance contract under 
the law of any State.’’. 
(c) AGREEMENTS, CONTRACTS, AND TRANSACTIONS TRADED ON 
AN ORGANIZED EXCHANGE.—Section 2(c)(2)(A) of the Commodity 
Exchange 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’’. 
(d) APPLICABILITY.—Section 2 of the Commodity Exchange Act 
(7 U.S.C. 2) (as amended by section 723(a)(3)) is amended by adding 
at the end the following: 
‘‘(i) APPLICABILITY.—The provisions of this Act relating to swaps 
that were enacted by the Wall Street Transparency and Account-
ability Act of 2010 (including any rule prescribed or regulation 
promulgated under that Act), shall not apply to activities outside 
the United States unless those activities— 
‘‘(1) have a direct and significant connection with activities 
in, or effect on, commerce of the United States; or 
‘‘(2) contravene such rules or regulations as the Commission 
may prescribe or promulgate as are necessary or appropriate 
to prevent the evasion of any provision of this Act that was 
enacted by the Wall Street Transparency and Accountability 
Act of 2010.’’. 
(e) 
FEDERAL
ENERGY
REGULATORY
COMMISSION.—Section 
2(a)(1) of the Commodity Exchange Act (7 U.S.C. 2(a)(1)) is amended 
by adding at the end the following: 
‘‘(I)(i) Nothing in this Act shall limit or affect any 
statutory authority of the Federal Energy Regulatory 
Commission or a State regulatory authority (as defined 
in section 3(21) of the Federal Power Act (16 U.S.C. 796(21)) 
with respect to an agreement, contract, or transaction that 
is entered into pursuant to a tariff or rate schedule 
approved by the Federal Energy Regulatory Commission 
or a State regulatory authority and is— 
‘‘(I) not executed, traded, or cleared on a registered 
entity or trading facility; or 
‘‘(II) executed, traded, or cleared on a registered 
entity or trading facility owned or operated by a 
regional transmission organization or independent 
system operator. 
‘‘(ii) In addition to the authority of the Federal Energy 
Regulatory Commission or a State regulatory authority 
described in clause (i), nothing in this subparagraph shall 
limit or affect— 
‘‘(I) any statutory authority of the Commission 
with respect to an agreement, contract, or transaction 
described in clause (i); or 
‘‘(II) the jurisdiction of the Commission under 
subparagraph (A) with respect to an agreement, con-
tract, or transaction that is executed, traded, or cleared
H. R. 4173—299 
on a registered entity or trading facility that is not 
owned or operated by a regional transmission organiza-
tion or independent system operator (as defined by 
sections 3(27) and (28) of the Federal Power Act (16 
U.S.C. 796(27), 796(28)).’’. 
(f) PUBLIC INTEREST WAIVER.—Section 4(c) of the Commodity 
Exchange Act (7 U.S.C. 6(c)) (as amended by section 721(d)) is 
amended by adding at the end the following: 
‘‘(6) If the Commission determines that the exemption 
would be consistent with the public interest and the purposes 
of this Act, the Commission shall, in accordance with para-
graphs (1) and (2), exempt from the requirements of this Act 
an agreement, contract, or transaction that is entered into— 
‘‘(A) pursuant to a tariff or rate schedule approved 
or permitted to take effect by the Federal Energy Regu-
latory Commission; 
‘‘(B) pursuant to a tariff or rate schedule establishing 
rates or charges for, or protocols governing, the sale of 
electric energy approved or permitted to take effect by 
the regulatory authority of the State or municipality having 
jurisdiction to regulate rates and charges for the sale of 
electric energy within the State or municipality; or 
‘‘(C) between entities described in section 201(f) of the 
Federal Power Act (16 U.S.C. 824(f)).’’. 
(g) AUTHORITY OF FERC.—Nothing in the Wall Street Trans-
parency and Accountability Act of 2010 or the amendments to 
the Commodity Exchange Act made by such Act shall limit or 
affect any statutory enforcement authority of the Federal Energy 
Regulatory Commission pursuant to section 222 of the Federal 
Power Act and section 4A of the Natural Gas Act that existed 
prior to the date of enactment of the Wall Street Transparency 
and Accountability Act of 2010. 
(h) 
DETERMINATION.—The 
Commodity 
Exchange 
Act 
is 
amended by inserting after section 1a (7 U.S.C. 1a) the following: 
‘‘SEC. 
1b. 
REQUIREMENTS 
OF 
SECRETARY 
OF 
THE 
TREASURY 
REGARDING EXEMPTION OF FOREIGN EXCHANGE SWAPS 
AND FOREIGN EXCHANGE FORWARDS FROM DEFINITION 
OF THE TERM ‘SWAP’. 
‘‘(a) REQUIRED CONSIDERATIONS.—In determining whether to 
exempt foreign exchange swaps and foreign exchange forwards from 
the definition of the term ‘swap’, the Secretary of the Treasury 
(referred to in this section as the ‘Secretary’) shall consider— 
‘‘(1) whether the required trading and clearing of foreign 
exchange swaps and foreign exchange forwards would create 
systemic risk, lower transparency, or threaten the financial 
stability of the United States; 
‘‘(2) whether foreign exchange swaps and foreign exchange 
forwards are already subject to a regulatory scheme that is 
materially comparable to that established by this Act for other 
classes of swaps; 
‘‘(3) the extent to which bank regulators of participants 
in the foreign exchange market provide adequate supervision, 
including capital and margin requirements; 
‘‘(4) the extent of adequate payment and settlement sys-
tems; and
H. R. 4173—300 
‘‘(5) the use of a potential exemption of foreign exchange 
swaps and foreign exchange forwards to evade otherwise 
applicable regulatory requirements. 
‘‘(b) DETERMINATION.—If the Secretary makes a determination 
to exempt foreign exchange swaps and foreign exchange forwards 
from the definition of the term ‘swap’, the Secretary shall submit 
to the appropriate committees of Congress a determination that 
contains— 
‘‘(1) an explanation regarding why foreign exchange swaps 
and foreign exchange forwards are qualitatively different from 
other classes of swaps in a way that would make the foreign 
exchange swaps and foreign exchange forwards ill-suited for 
regulation as swaps; and 
‘‘(2) an identification of the objective differences of foreign 
exchange swaps and foreign exchange forwards with respect 
to standard swaps that warrant an exempted status. 
‘‘(c) EFFECT OF DETERMINATION.—A determination by the Sec-
retary under subsection (b) shall not exempt any foreign exchange 
swaps and foreign exchange forwards traded on a designated con-
tract market or swap execution facility from any applicable anti-
fraud and antimanipulation provision under this title.’’. 
SEC. 723. CLEARING. 
(a) CLEARING REQUIREMENT.— 
(1) IN GENERAL.—Section 2 of the Commodity Exchange 
Act (7 U.S.C. 2) is amended— 
(A) by striking subsections (d), (e), (g), and (h); and 
(B) by redesignating subsection (i) as subsection (g). 
(2) SWAPS; LIMITATION ON PARTICIPATION.—Section 2 of the 
Commodity Exchange Act (7 U.S.C. 2) (as amended by para-
graph (1)) is amended by inserting after subsection (c) the 
following: 
‘‘(d) SWAPS.—Nothing in this Act (other than subparagraphs 
(A), (B), (C), (D), (G), and (H) of subsection (a)(1), subsections 
(f) and (g), sections 1a, 2(a)(13), 2(c)(2)(A)(ii), 2(e), 2(h), 4(c), 4a, 
4b, and 4b–1, subsections (a), (b), and (g) of section 4c, sections 
4d, 4e, 4f, 4g, 4h, 4i, 4j, 4k, 4l, 4m, 4n, 4o, 4p, 4r, 4s, 4t, 5, 
5b, 5c, 5e, and 5h, subsections (c) and (d) of section 6, sections 
6c, 6d, 8, 8a, and 9, subsections (e)(2), (f), and (h) of section 12, 
subsections (a) and (b) of section 13, sections 17, 20, 21, and 22(a)(4), 
and any other provision of this Act that is applicable to registered 
entities or 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 entered into on, or subject to 
the rules of, a board of trade designated as a contract market 
under section 5.’’. 
(3) MANDATORY CLEARING OF SWAPS.—Section 2 of the Com-
modity Exchange Act (7 U.S.C. 2) is amended by inserting 
after subsection (g) (as redesignated by paragraph (1)(B)) the 
following: 
‘‘(h) CLEARING REQUIREMENT.— 
‘‘(1) IN GENERAL.— 
‘‘(A) STANDARD FOR CLEARING.—It shall be unlawful 
for any person to engage in a swap unless that person 
submits such swap for clearing to a derivatives clearing
H. R. 4173—301 
organization that is registered under this Act or a deriva-
tives clearing organization that is exempt from registration 
under this Act if the swap is required to be cleared. 
‘‘(B) OPEN ACCESS.—The rules of a derivatives clearing 
organization described in subparagraph (A) shall— 
‘‘(i) prescribe that all swaps (but not contracts 
of sale of a commodity for future delivery or options 
on such contracts) submitted to the derivatives clearing 
organization with the same terms and conditions are 
economically equivalent within the derivatives clearing 
organization and may be offset with each other within 
the derivatives clearing organization; and 
‘‘(ii) provide for non-discriminatory clearing of a 
swap (but not a contract of sale of a commodity for 
future delivery or option on such contract) executed 
bilaterally or on or through the rules of an unaffiliated 
designated contract market or swap execution facility. 
‘‘(2) COMMISSION REVIEW.— 
‘‘(A) COMMISSION-INITIATED REVIEW.— 
‘‘(i) The Commission on an ongoing basis 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 regarding any determina-
tion made under clause (i). 
‘‘(B) SWAP SUBMISSIONS.— 
‘‘(i) A derivatives clearing organization shall 
submit to the Commission each swap, or any group, 
category, type, or class of swaps that it plans to accept 
for clearing, and provide notice to its members (in 
a manner to be determined by the Commission) of 
the submission. 
‘‘(ii) Any swap or group, category, type, or class 
of swaps listed for clearing by a derivative clearing 
organization as of the date of enactment of this sub-
section shall be considered submitted to the Commis-
sion. 
‘‘(iii) The Commission shall— 
‘‘(I) make available to the public submissions 
received under clauses (i) and (ii); 
‘‘(II) review each submission made under 
clauses (i) and (ii), 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 clearing requirement under paragraph (1)(A) 
shall apply to the submission. 
‘‘(C) DEADLINE.—The Commission shall make its deter-
mination under subparagraph (B)(iii) not later than 90 
days after receiving a submission made under subpara-
graphs (B)(i) and (B)(ii), unless the submitting derivatives 
clearing organization agrees to an extension for the time 
limitation established under this subparagraph.
H. R. 4173—302 
‘‘(D) DETERMINATION.— 
‘‘(i) In reviewing a submission made under 
subparagraph (B), the Commission shall review 
whether the submission is consistent with section 
5b(c)(2). 
‘‘(ii) In reviewing a swap, group of swaps, or class 
of swaps pursuant to subparagraph (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, trading liquidity, and adequate 
pricing data. 
‘‘(II) The availability of rule framework, 
capacity, operational expertise and resources, and 
credit support infrastructure to clear the contract 
on terms that are consistent with the material 
terms and trading conventions on which the con-
tract is then traded. 
‘‘(III) The effect on the mitigation of systemic 
risk, taking into account the size of the market 
for such contract and the resources of the deriva-
tives clearing organization available 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 insolvency 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 subpara-
graph (A) or (B)(iii) that the clearing requirement shall 
apply, the Commission may require such terms and 
conditions to the requirement as the Commission deter-
mines to be appropriate. 
‘‘(E) RULES.—Not later than 1 year after the date of 
the enactment of this subsection, the Commission shall 
adopt rules for a derivatives clearing organization’s submis-
sion 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. Nothing in this subparagraph limits 
the Commission from making a determination under 
subparagraph (B)(iii) for swaps described in subparagraph 
(B)(ii). 
‘‘(3) STAY OF CLEARING REQUIREMENT.— 
‘‘(A) IN
GENERAL.—After making 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 clearing arrangement. 
‘‘(B) DEADLINE.—The Commission shall complete a 
review undertaken pursuant to subparagraph (A) not later 
than 90 days after issuance of the stay, unless the deriva-
tives clearing organization that clears the swap, or group,
H. R. 4173—303 
category, type, or class of swaps agrees to an extension 
of the time limitation established under this subparagraph. 
‘‘(C) DETERMINATION.—Upon completion of the review 
undertaken pursuant to subparagraph (A), the Commission 
may— 
‘‘(i) determine, unconditionally or subject 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 con-
sistent with paragraph (2)(D); or 
‘‘(ii) determine that the clearing requirement 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 Wall Street Transparency and 
Accountability Act of 2010, 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. 
‘‘(4) PREVENTION OF EVASION.— 
‘‘(A) IN
GENERAL.—The Commission shall prescribe 
rules under this subsection (and issue interpretations of 
rules prescribed under this subsection) as determined by 
the Commission to be necessary to prevent evasions of 
the mandatory clearing requirements under this Act. 
‘‘(B) DUTY OF COMMISSION TO INVESTIGATE AND TAKE 
CERTAIN
ACTIONS.—To the extent the Commission finds 
that a particular swap, group, category, type, or class of 
swaps would otherwise be subject to mandatory clearing 
but no derivatives clearing organization has listed the 
swap, group, category, type, or class of swaps for clearing, 
the Commission shall— 
‘‘(i) 
investigate 
the 
relevant 
facts 
and 
cir-
cumstances; 
‘‘(ii) within 30 days issue a public report containing 
the results of the investigation; and 
‘‘(iii) take such actions as the Commission deter-
mines to be necessary and in the public interest, which 
may include requiring the retaining of adequate 
margin or capital by parties to the swap, group, cat-
egory, type, or class of swaps. 
‘‘(C) EFFECT
ON
AUTHORITY.—Nothing in this para-
graph— 
‘‘(i) authorizes the Commission to adopt rules 
requiring a derivatives clearing organization to list 
for clearing a swap, group, category, type, or class 
of swaps if the clearing of the swap, group, category, 
type, or class of swaps would threaten the financial 
integrity of the derivatives clearing organization; and 
‘‘(ii) affects the authority of the Commission to 
enforce the open access provisions of paragraph (1)(B) 
with respect to a swap, group, category, type, or class 
of swaps that is listed for clearing by a derivatives 
clearing organization.
H. R. 4173—304 
‘‘(5) 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 enact-
ment of this subsection shall be reported to a registered 
swap data repository or the Commission no later than 
180 days after the effective date of this subsection. 
‘‘(B) Swaps entered into on or after such date of enact-
ment shall be reported to a registered swap data 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 prescribe by rule or regulation. 
‘‘(6) CLEARING TRANSITION RULES.— 
‘‘(A) Swaps entered into before the date of the enact-
ment of this subsection are exempt from the clearing 
requirements of this subsection if reported pursuant to 
paragraph (5)(A). 
‘‘(B) Swaps entered into before application of the 
clearing requirement pursuant to this subsection are 
exempt from the clearing requirements of this subsection 
if reported pursuant to paragraph (5)(B). 
‘‘(7) EXCEPTIONS.— 
‘‘(A) IN
GENERAL.—The requirements of paragraph 
(1)(A) shall not apply to a swap if 1 of the counterparties 
to the swap— 
‘‘(i) is not a financial entity; 
‘‘(ii) is using swaps to hedge or mitigate commercial 
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) 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). 
‘‘(C) FINANCIAL ENTITY DEFINITION.— 
‘‘(i) IN GENERAL.—For the purposes of this para-
graph, the term ‘financial entity’ means— 
‘‘(I) a swap dealer; 
‘‘(II) a security-based swap dealer; 
‘‘(III) a major swap participant; 
‘‘(IV) a major security-based swap participant; 
‘‘(V) a commodity pool; 
‘‘(VI) a private fund as defined in section 
202(a) of the Investment Advisers Act of 1940 (15 
U.S.C. 80-b-2(a)); 
‘‘(VII) an employee benefit plan as defined in 
paragraphs (3) and (32) of section 3 of the 
Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1002); 
‘‘(VIII) a person predominantly engaged in 
activities that are in the business of banking, or 
in activities that are financial in nature, as defined 
in section 4(k) of the Bank Holding Company Act 
of 1956.
H. R. 4173—305 
‘‘(ii) EXCLUSION.—The Commission shall consider 
whether to exempt small banks, savings associations, 
farm credit system institutions, and credit unions, 
including— 
‘‘(I) depository institutions with total assets 
of $10,000,000,000 or less; 
‘‘(II) farm credit system institutions with total 
assets of $10,000,000,000 or less; or 
‘‘(III) credit unions with total assets of 
$10,000,000,000 or less. 
‘‘(iii) 
LIMITATION.—Such 
definition 
shall 
not 
include an entity whose primary business is providing 
financing, and uses derivatives for the purpose of 
hedging underlying commercial risks related to interest 
rate and foreign currency exposures, 90 percent or 
more of which arise from financing that facilitates 
the purchase or lease of products, 90 percent or more 
of which are manufactured by the parent company 
or another subsidiary of the parent company. 
‘‘(D) TREATMENT OF AFFILIATES.— 
‘‘(i) IN
GENERAL.—An affiliate of a person that 
qualifies for an exception under subparagraph (A) 
(including affiliate entities predominantly engaged in 
providing financing for the purchase of the merchan-
dise or manufactured goods of the person) may qualify 
for the exception only if the affiliate, acting on behalf 
of the person and as an agent, uses the swap to hedge 
or mitigate the commercial risk of the person or other 
affiliate of the person that is not a financial entity. 
‘‘(ii) PROHIBITION
RELATING
TO
CERTAIN
AFFILI-
ATES.—The exception in clause (i) shall not apply if 
the affiliate is— 
‘‘(I) a swap dealer; 
‘‘(II) a security-based swap dealer; 
‘‘(III) a major swap participant; 
‘‘(IV) a major security-based swap participant; 
‘‘(V) an issuer that would be an investment 
company, as defined in section 3 of the Investment 
Company Act of 1940 (15 U.S.C. 80a–3), but for 
paragraph (1) or (7) of subsection (c) of that Act 
(15 U.S.C. 80a–3(c)); 
‘‘(VI) a commodity pool; or 
‘‘(VII) a bank holding company with over 
$50,000,000,000 in consolidated assets. 
‘‘(iii) TRANSITION RULE FOR AFFILIATES.—An affil-
iate, subsidiary, or a wholly owned entity of a person 
that qualifies for an exception under subparagraph 
(A) and is predominantly engaged in providing 
financing for the purchase or lease of merchandise 
or manufactured goods of the person shall be exempt 
from the margin requirement described in section 4s(e) 
and the clearing requirement described in paragraph 
(1) with regard to swaps entered into to mitigate the 
risk of the financing activities for not less than a 
2-year period beginning on the date of enactment of 
this clause. 
‘‘(E) ELECTION OF COUNTERPARTY.—
H. R. 4173—306 
‘‘(i) SWAPS
REQUIRED
TO
BE
CLEARED.—With 
respect to any swap that is subject to the mandatory 
clearing requirement under this subsection and entered 
into by a swap dealer or a major swap participant 
with a counterparty that is not a swap dealer, major 
swap participant, security-based swap dealer, or major 
security-based swap participant, the counterparty shall 
have the sole right to select the derivatives clearing 
organization at which the swap will be cleared. 
‘‘(ii) SWAPS NOT REQUIRED TO BE CLEARED.—With 
respect to any swap that is not subject to the manda-
tory clearing requirement under this subsection and 
entered into by a swap dealer or a major swap partici-
pant with a counterparty that is not a swap dealer, 
major swap participant, security-based swap dealer, 
or 
major 
security-based 
swap 
participant, 
the 
counterparty— 
‘‘(I) may elect to require clearing of the swap; 
and 
‘‘(II) shall have the sole right to select the 
derivatives clearing organization at which the 
swap will be cleared. 
‘‘(F) ABUSE OF EXCEPTION.—The Commission may pre-
scribe such rules or issue interpretations of the rules as 
the Commission determines to be necessary to prevent 
abuse of the exceptions described in this paragraph. The 
Commission may also request information from those per-
sons claiming the clearing exception as necessary to prevent 
abuse of the exceptions described in this paragraph. 
‘‘(8) TRADE EXECUTION.— 
‘‘(A) IN
GENERAL.—With respect to transactions 
involving swaps subject to the clearing requirement of para-
graph (1), counterparties shall— 
‘‘(i) execute the transaction on a board of trade 
designated as a contract market under section 5; or 
‘‘(ii) execute the transaction on a swap execution 
facility registered under 5h or a swap execution facility 
that is exempt from registration under section 5h(f) 
of this Act. 
‘‘(B) EXCEPTION.—The requirements of clauses (i) and 
(ii) of subparagraph (A) shall not apply if no board of 
trade or swap execution facility makes the swap available 
to trade or for swap transactions subject to the clearing 
exception under paragraph (7).’’. 
(b) COMMODITY EXCHANGE ACT.—Section 2 of the Commodity 
Exchange Act (7 U.S.C. 2) is amended by adding at the end the 
following: 
‘‘(j) COMMITTEE APPROVAL BY BOARD.—Exemptions from the 
requirements of subsection (h)(1) to clear a swap and subsection 
(h)(8) to execute a swap through a board of trade or swap execution 
facility shall be available to a counterparty that is an issuer of 
securities that are registered under section 12 of the Securities 
Exchange Act of 1934 (15 U.S.C. 78l) or that is required to file 
reports pursuant to section 15(d) of the Securities Exchange Act 
of 1934 (15 U.S.C. 78o) only if an appropriate committee of the 
issuer’s board or governing body has reviewed and approved its 
decision to enter into swaps that are subject to such exemptions.’’.
H. R. 4173—307 
(c) GRANDFATHER PROVISIONS.— 
(1) LEGAL CERTAINTY FOR CERTAIN TRANSACTIONS IN EXEMPT 
COMMODITIES.—Not later than 60 days after the date of enact-
ment of this Act, a person may submit to the Commodity 
Futures Trading Commission a petition to remain subject to 
section 2(h) of the Commodity Exchange Act (7 U.S.C. 2(h)) 
(as in effect on the day before the date of enactment of this 
Act). 
(2) CONSIDERATION; AUTHORITY
OF
COMMODITY
FUTURES 
TRADING
COMMISSION.—The 
Commodity 
Futures 
Trading 
Commission— 
(A) shall consider any petition submitted under 
subparagraph (A) in a prompt manner; and 
(B) may allow a person to continue operating subject 
to section 2(h) of the Commodity Exchange Act (7 U.S.C. 
2(h)) (as in effect on the day before the date of enactment 
of this Act) for not longer than a 1-year period. 
(3) AGRICULTURAL SWAPS.— 
(A) IN GENERAL.—Except as provided in subparagraph 
(B), no person shall offer to enter into, enter into, or confirm 
the execution of, any swap in an agricultural commodity 
(as defined by the Commodity Futures Trading Commis-
sion). 
(B) EXCEPTION.—Notwithstanding subparagraph (A), a 
person may offer to enter into, enter into, or confirm the 
execution of, any swap in an agricultural commodity pursu-
ant to section 4(c) of the Commodity Exchange Act (7 
U.S.C. 6(c)) or any rule, regulation, or order issued there-
under (including any rule, regulation, or order in effect 
as of the date of enactment of this Act) by the Commodity 
Futures Trading Commission to allow swaps under such 
terms and conditions as the Commission shall prescribe. 
(4) REQUIRED REPORTING.—If the exception described in 
section 2(h)(8)(B) of the Commodity Exchange Act applies, the 
counterparties shall comply with any recordkeeping and trans-
action reporting requirements that may be prescribed by the 
Commission with respect to swaps subject to section 2(h)(8)(B) 
of the Commodity Exchange Act. 
SEC. 724. SWAPS; SEGREGATION AND BANKRUPTCY TREATMENT. 
(a) SEGREGATION REQUIREMENTS FOR CLEARED SWAPS.—Section 
4d of the Commodity Exchange Act (7 U.S.C. 6d) (as amended 
by section 732) is amended by adding at the end the following: 
‘‘(f) SWAPS.— 
‘‘(1) REGISTRATION REQUIREMENT.—It shall be unlawful for 
any person to accept any money, securities, or property (or 
to extend any credit in lieu of money, securities, or property) 
from, for, or on behalf of a swaps customer to margin, guar-
antee, or secure a swap cleared by or through a derivatives 
clearing organization (including money, securities, or property 
accruing to the customer as the result of such a swap), unless 
the person shall have registered under this Act with the 
Commission as a futures commission merchant, and the reg-
istration shall not have expired nor been suspended nor 
revoked. 
‘‘(2) CLEARED SWAPS.—
H. R. 4173—308 
‘‘(A) SEGREGATION REQUIRED.—A futures commission 
merchant shall treat and deal with all money, securities, 
and property of any swaps customer received to margin, 
guarantee, or secure a swap cleared by or though a deriva-
tives clearing organization (including money, securities, or 
property accruing to the swaps customer as the result 
of such a swap) as belonging to the swaps customer. 
‘‘(B) COMMINGLING
PROHIBITED.—Money, securities, 
and property of a swaps customer described in subpara-
graph (A) shall be separately accounted for and shall not 
be commingled with the funds of the futures commission 
merchant or be used to margin, secure, or guarantee any 
trades or contracts of any swaps customer or person other 
than the person for whom the same are held. 
‘‘(3) EXCEPTIONS.— 
‘‘(A) USE OF FUNDS.— 
‘‘(i) IN GENERAL.—Notwithstanding paragraph (2), 
money, securities, and property of swap customers of 
a futures commission merchant described in paragraph 
(2) may, for convenience, be commingled and deposited 
in the same account or accounts with any bank or 
trust company or with a derivatives clearing organiza-
tion. 
‘‘(ii) WITHDRAWAL.—Notwithstanding paragraph 
(2), such share of the money, securities, and property 
described in clause (i) as in the normal course of busi-
ness shall be necessary to margin, guarantee, secure, 
transfer, adjust, or settle a cleared swap with a deriva-
tives clearing organization, or with any member of 
the derivatives clearing organization, may be with-
drawn and applied to such purposes, including the 
payment of commissions, brokerage, interest, taxes, 
storage, and other charges, lawfully accruing in connec-
tion with the cleared swap. 
‘‘(B) COMMISSION ACTION.—Notwithstanding paragraph 
(2), in accordance with such terms and conditions as the 
Commission may prescribe by rule, regulation, or order, 
any money, securities, or property of the swaps customers 
of a futures commission merchant described in paragraph 
(2) may be commingled and deposited in customer accounts 
with any other money, securities, or property received by 
the futures commission merchant and required by the 
Commission to be separately accounted for and treated 
and dealt with as belonging to the swaps customer of 
the futures commission merchant. 
‘‘(4) PERMITTED INVESTMENTS.—Money described in para-
graph (2) may be invested in obligations of the United States, 
in general obligations of any State or of any political subdivision 
of a State, and in obligations fully guaranteed as to principal 
and interest by the United States, or in any other investment 
that the Commission may by rule or regulation prescribe, and 
such investments shall be made in accordance with such rules 
and regulations and subject to such conditions as the Commis-
sion may prescribe. 
‘‘(5) COMMODITY CONTRACT.—A swap cleared by or through 
a derivatives clearing organization shall be considered to be 
a commodity contract as such term is defined in section 761
H. R. 4173—309 
of title 11, United States Code, with regard to all money, 
securities, and property of any swaps customer received by 
a futures commission merchant or a derivatives clearing 
organization to margin, guarantee, or secure the swap 
(including money, securities, or property accruing to the cus-
tomer as the result of the swap). 
‘‘(6) PROHIBITION.—It shall be unlawful for any person, 
including any derivatives clearing organization and any deposi-
tory institution, that has received any money, securities, or 
property for deposit in a separate account or accounts as pro-
vided in paragraph (2) to hold, dispose of, or use any such 
money, securities, or property as belonging to the depositing 
futures commission merchant or any person other than the 
swaps customer of the futures commission merchant.’’. 
(b) BANKRUPTCY TREATMENT OF CLEARED SWAPS.—Section 761 
of title 11, United States Code, is amended— 
(1) in paragraph (4), by striking subparagraph (F) and 
inserting the following: 
‘‘(F)(i) any other contract, option, agreement, or trans-
action that is similar to a contract, option, agreement, 
or transaction referred to in this paragraph; and 
‘‘(ii) with respect to a futures commission merchant 
or a clearing organization, any other contract, option, agree-
ment, or transaction, in each case, that is cleared by a 
clearing organization;’’; and 
(2) in paragraph (9)(A)(i), by striking ‘‘the commodity 
futures account’’ and inserting ‘‘a commodity contract account’’. 
(c) SEGREGATION REQUIREMENTS FOR UNCLEARED SWAPS.—Sec-
tion 4s of the Commodity Exchange Act (as added by section 731) 
is amended by adding at the end the following: 
‘‘(l) SEGREGATION REQUIREMENTS.— 
‘‘(1) SEGREGATION
OF
ASSETS
HELD
AS
COLLATERAL
IN 
UNCLEARED SWAP TRANSACTIONS.— 
‘‘(A) NOTIFICATION.—A swap dealer or major swap 
participant shall be required to notify the counterparty 
of the swap dealer or major swap participant at the begin-
ning of a swap transaction that the counterparty has the 
right to require segregation of the funds or other property 
supplied to margin, guarantee, or secure the obligations 
of the counterparty. 
‘‘(B) SEGREGATION AND MAINTENANCE OF FUNDS.—At 
the request of a counterparty to a swap that provides 
funds or other property to a swap dealer or major swap 
participant to margin, guarantee, or secure the obligations 
of the counterparty, the swap dealer or major swap partici-
pant shall— 
‘‘(i) segregate the funds or other property for the 
benefit of the counterparty; and 
‘‘(ii) in accordance with such rules and regulations 
as the Commission may promulgate, maintain the 
funds or other property in a segregated account sepa-
rate from the assets and other interests of the swap 
dealer or major swap participant. 
‘‘(2) APPLICABILITY.—The requirements described in para-
graph (1) shall—
H. R. 4173—310 
‘‘(A) apply only to a swap between a counterparty and 
a swap dealer or major swap participant that is not sub-
mitted for clearing to a derivatives clearing organization; 
and 
‘‘(B)(i) not apply to variation margin payments; or 
‘‘(ii) 
not 
preclude 
any 
commercial 
arrangement 
regarding— 
‘‘(I) the investment of segregated funds or other 
property that may only be invested in such investments 
as the Commission may permit by rule or regulation; 
and 
‘‘(II) the related allocation of gains and losses 
resulting from any investment of the segregated funds 
or other property. 
‘‘(3) USE OF INDEPENDENT THIRD-PARTY CUSTODIANS.—The 
segregated account described in paragraph (1) shall be— 
‘‘(A) carried by an independent third-party custodian; 
and 
‘‘(B) designated as a segregated account for and on 
behalf of the counterparty. 
‘‘(4) REPORTING REQUIREMENT.—If the counterparty does 
not choose to require segregation of the funds or other property 
supplied to margin, guarantee, or secure the obligations of 
the counterparty, the swap dealer or major swap participant 
shall report to the counterparty of the swap dealer or major 
swap participant on a quarterly basis that the back office 
procedures of the swap dealer or major swap participant 
relating to margin and collateral requirements are in compli-
ance with the agreement of the counterparties.’’. 
SEC. 725. DERIVATIVES CLEARING ORGANIZATIONS. 
(a) REGISTRATION REQUIREMENT.—Section 5b of the Commodity 
Exchange Act (7 U.S.C. 7a–1) is amended by striking subsections 
(a) and (b) and inserting the following: 
‘‘(a) REGISTRATION REQUIREMENT.— 
‘‘(1) IN GENERAL.—Except as provided in paragraph (2), 
it shall be unlawful for a derivatives clearing organization, 
directly or indirectly, to make use of the mails or any means 
or instrumentality of interstate commerce to perform the func-
tions of a derivatives clearing organization with respect to— 
‘‘(A) a contract of sale of a commodity for future 
delivery (or an option on the contract of sale) or option 
on a commodity, in each case, unless the contract or option 
is— 
‘‘(i) 
excluded 
from 
this 
Act 
by 
subsection 
(a)(1)(C)(i), (c), or (f) of section 2; or 
‘‘(ii) a security futures product cleared by a clearing 
agency registered with the Securities and Exchange 
Commission under the Securities Exchange Act of 1934 
(15 U.S.C. 78a et seq.); or 
‘‘(B) a swap. 
‘‘(2) EXCEPTION.—Paragraph (1) shall not apply to a deriva-
tives clearing organization that is registered with the Commis-
sion. 
‘‘(b) VOLUNTARY REGISTRATION.—A person that clears 1 or more 
agreements, contracts, or transactions that are not required to
H. R. 4173—311 
be cleared under this Act may register with the Commission as 
a derivatives clearing organization.’’. 
(b) REGISTRATION FOR DEPOSITORY INSTITUTIONS AND CLEARING 
AGENCIES; EXEMPTIONS; COMPLIANCE OFFICER; ANNUAL REPORTS.— 
Section 5b of the Commodity Exchange Act (7 U.S.C. 7a–1) is 
amended by adding at the end the following: 
‘‘(g) EXISTING DEPOSITORY INSTITUTIONS AND CLEARING AGEN-
CIES.— 
‘‘(1) IN
GENERAL.—A depository institution or clearing 
agency registered with the Securities and Exchange Commis-
sion under the Securities Exchange Act of 1934 (15 U.S.C. 
78a et seq.) that is required to be registered as a derivatives 
clearing organization under this section is deemed to be reg-
istered under this section to the extent that, before the date 
of enactment of this subsection— 
‘‘(A) the depository institution cleared swaps as a multi-
lateral clearing organization; or 
‘‘(B) the clearing agency cleared swaps. 
‘‘(2) CONVERSION OF DEPOSITORY INSTITUTIONS.—A deposi-
tory institution to which this subsection applies may, by the 
vote of the shareholders owning not less than 51 percent of 
the voting interests of the depository institution, be converted 
into a State corporation, partnership, limited liability company, 
or similar legal form pursuant to a plan of conversion, if the 
conversion is not in contravention of applicable State law. 
‘‘(3) SHARING
OF
INFORMATION.—The Securities and 
Exchange Commission shall make available to the Commission, 
upon request, all information determined to be relevant by 
the Securities and Exchange Commission regarding a clearing 
agency deemed to be registered with the Commission under 
paragraph (1). 
‘‘(h) EXEMPTIONS.—The Commission may exempt, conditionally 
or unconditionally, a derivatives clearing organization from registra-
tion under this section for the clearing of swaps if the Commission 
determines that the derivatives clearing organization is subject 
to comparable, comprehensive supervision and regulation by the 
Securities and Exchange Commission or the appropriate govern-
ment authorities in the home country of the organization. Such 
conditions may include, but are not limited to, requiring that the 
derivatives clearing organization be available for inspection by the 
Commission and make available all information requested by the 
Commission. 
‘‘(i) DESIGNATION OF CHIEF COMPLIANCE OFFICER.— 
‘‘(1) IN GENERAL.—Each derivatives clearing organization 
shall designate an individual to serve as a chief compliance 
officer. 
‘‘(2) DUTIES.—The chief compliance officer shall— 
‘‘(A) report directly to the board or to the senior officer 
of the derivatives clearing organization; 
‘‘(B) review the compliance of the derivatives clearing 
organization with respect to the core principles described 
in subsection (c)(2); 
‘‘(C) in consultation with the board of the derivatives 
clearing organization, a body performing a function similar 
to the board of the derivatives clearing organization, or 
the senior officer of the derivatives clearing organization, 
resolve any conflicts of interest that may arise;
H. R. 4173—312 
‘‘(D) be responsible for administering each policy and 
procedure that is required to be established pursuant to 
this section; 
‘‘(E) ensure compliance with this Act (including regula-
tions) relating to agreements, contracts, or transactions, 
including each rule prescribed by the Commission under 
this section; 
‘‘(F) establish procedures for the remediation of non-
compliance issues identified by the compliance officer 
through any— 
‘‘(i) compliance office review; 
‘‘(ii) look-back; 
‘‘(iii) internal or external audit finding; 
‘‘(iv) self-reported error; or 
‘‘(v) validated complaint; and 
‘‘(G) establish and follow appropriate procedures for 
the handling, management response, remediation, re-
testing, and closing of noncompliance issues. 
‘‘(3) ANNUAL REPORTS.— 
‘‘(A) IN GENERAL.—In accordance with rules prescribed 
by the Commission, the chief compliance officer shall 
annually prepare and sign a report that contains a descrip-
tion of— 
‘‘(i) the compliance of the derivatives clearing 
organization of the compliance officer with respect to 
this Act (including regulations); and 
‘‘(ii) each policy and procedure of the derivatives 
clearing 
organization 
of 
the 
compliance 
officer 
(including the code of ethics and conflict of interest 
policies of the derivatives clearing organization). 
‘‘(B) REQUIREMENTS.—A compliance report under 
subparagraph (A) shall— 
‘‘(i) accompany each appropriate financial report 
of the derivatives clearing organization that is required 
to be furnished to the Commission pursuant to this 
section; and 
‘‘(ii) include a certification that, under penalty of 
law, the compliance report is accurate and complete.’’. 
(c) CORE PRINCIPLES FOR DERIVATIVES CLEARING ORGANIZA-
TIONS.—Section 5b(c) of the Commodity Exchange Act (7 U.S.C. 
7a–1(c)) is amended by striking paragraph (2) and inserting the 
following: 
‘‘(2) CORE PRINCIPLES FOR DERIVATIVES CLEARING ORGANIZA-
TIONS.— 
‘‘(A) COMPLIANCE.— 
‘‘(i) IN GENERAL.—To be registered and to maintain 
registration as a derivatives clearing organization, a 
derivatives clearing organization shall comply with 
each core principle described in this paragraph and 
any requirement that the Commission may impose by 
rule or regulation pursuant to section 8a(5). 
‘‘(ii) 
DISCRETION
OF
DERIVATIVES
CLEARING 
ORGANIZATION.—Subject to any rule or regulation pre-
scribed by the Commission, a derivatives clearing 
organization shall have reasonable discretion in estab-
lishing the manner by which the derivatives clearing
H. R. 4173—313 
organization 
complies 
with 
each 
core 
principle 
described in this paragraph. 
‘‘(B) FINANCIAL RESOURCES.— 
‘‘(i) 
IN
GENERAL.—Each 
derivatives 
clearing 
organization shall have adequate financial, operational, 
and managerial resources, as determined by the 
Commission, to discharge each responsibility of the 
derivatives clearing organization. 
‘‘(ii) MINIMUM AMOUNT OF FINANCIAL RESOURCES.— 
Each derivatives clearing organization shall possess 
financial resources that, at a minimum, exceed the 
total amount that would— 
‘‘(I) enable the organization to meet its finan-
cial obligations to its members and participants 
notwithstanding a default by the member or 
participant creating the largest financial exposure 
for that organization in extreme but plausible 
market conditions; and 
‘‘(II) enable the derivatives clearing organiza-
tion to cover the operating costs of the derivatives 
clearing organization for a period of 1 year (as 
calculated on a rolling basis). 
‘‘(C) PARTICIPANT AND PRODUCT ELIGIBILITY.— 
‘‘(i) 
IN
GENERAL.—Each 
derivatives 
clearing 
organization shall establish— 
‘‘(I) appropriate admission and continuing 
eligibility standards (including sufficient financial 
resources and operational capacity to meet obliga-
tions arising from participation in the derivatives 
clearing organization) for members of, and partici-
pants in, the derivatives clearing organization; and 
‘‘(II) appropriate standards for determining the 
eligibility of agreements, contracts, or transactions 
submitted to the derivatives clearing organization 
for clearing. 
‘‘(ii) REQUIRED
PROCEDURES.—Each derivatives 
clearing organization shall establish and implement 
procedures to verify, on an ongoing basis, the compli-
ance of each participation and membership require-
ment of the derivatives clearing organization. 
‘‘(iii) REQUIREMENTS.—The participation and mem-
bership requirements of each derivatives clearing 
organization shall— 
‘‘(I) be objective; 
‘‘(II) be publicly disclosed; and 
‘‘(III) permit fair and open access. 
‘‘(D) RISK MANAGEMENT.— 
‘‘(i) 
IN
GENERAL.—Each 
derivatives 
clearing 
organization shall ensure that the derivatives clearing 
organization possesses the ability to manage the risks 
associated with discharging the responsibilities of the 
derivatives clearing organization through the use of 
appropriate tools and procedures. 
‘‘(ii) MEASUREMENT
OF
CREDIT
EXPOSURE.—Each 
derivatives clearing organization shall— 
‘‘(I) not less than once during each business 
day of the derivatives clearing organization,
H. R. 4173—314 
measure the credit exposures of the derivatives 
clearing organization to each member and partici-
pant of the derivatives clearing organization; and 
‘‘(II) monitor each exposure described in sub-
clause (I) periodically during the business day of 
the derivatives clearing organization. 
‘‘(iii) LIMITATION
OF
EXPOSURE
TO
POTENTIAL 
LOSSES
FROM
DEFAULTS.—Each derivatives clearing 
organization, through margin requirements and other 
risk control mechanisms, shall limit the exposure of 
the derivatives clearing organization to potential losses 
from defaults by members and participants of the 
derivatives clearing organization to ensure that— 
‘‘(I) the operations of the derivatives clearing 
organization would not be disrupted; and 
‘‘(II) nondefaulting members or participants 
would not be exposed to losses that nondefaulting 
members or participants cannot anticipate or con-
trol. 
‘‘(iv) 
MARGIN
REQUIREMENTS.—The 
margin 
required from each member and participant of a deriva-
tives clearing organization shall be sufficient to cover 
potential exposures in normal market conditions. 
‘‘(v) 
REQUIREMENTS
REGARDING
MODELS
AND 
PARAMETERS.—Each model and parameter used in set-
ting margin requirements under clause (iv) shall be— 
‘‘(I) risk-based; and 
‘‘(II) reviewed on a regular basis. 
‘‘(E) 
SETTLEMENT
PROCEDURES.—Each 
derivatives 
clearing organization shall— 
‘‘(i) complete money settlements on a timely basis 
(but not less frequently than once each business day); 
‘‘(ii) employ money settlement arrangements to 
eliminate or strictly limit the exposure of the deriva-
tives clearing organization to settlement bank risks 
(including credit and liquidity risks from the use of 
banks to effect money settlements); 
‘‘(iii) ensure that money settlements are final when 
effected; 
‘‘(iv) maintain an accurate record of the flow of 
funds associated with each money settlement; 
‘‘(v) possess the ability to comply with each term 
and condition of any permitted netting or offset 
arrangement with any other clearing organization; 
‘‘(vi) regarding physical settlements, establish 
rules that clearly state each obligation of the deriva-
tives clearing organization with respect to physical 
deliveries; and 
‘‘(vii) ensure that each risk arising from an obliga-
tion described in clause (vi) is identified and managed. 
‘‘(F) TREATMENT OF FUNDS.— 
‘‘(i) REQUIRED STANDARDS AND PROCEDURES.—Each 
derivatives clearing organization shall establish stand-
ards and procedures that are designed to protect and 
ensure the safety of member and participant funds 
and assets.
H. R. 4173—315 
‘‘(ii) HOLDING OF FUNDS AND ASSETS.—Each deriva-
tives clearing organization shall hold member and 
participant funds and assets in a manner by which 
to minimize the risk of loss or of delay in the access 
by the derivatives clearing organization to the assets 
and funds. 
‘‘(iii) 
PERMISSIBLE
INVESTMENTS.—Funds 
and 
assets invested by a derivatives clearing organization 
shall be held in instruments with minimal credit, 
market, and liquidity risks. 
‘‘(G) DEFAULT RULES AND PROCEDURES.— 
‘‘(i) 
IN
GENERAL.—Each 
derivatives 
clearing 
organization shall have rules and procedures designed 
to allow for the efficient, fair, and safe management 
of events during which members or participants— 
‘‘(I) become insolvent; or 
‘‘(II) otherwise default on the obligations of 
the members or participants to the derivatives 
clearing organization. 
‘‘(ii) 
DEFAULT
PROCEDURES.—Each 
derivatives 
clearing organization shall— 
‘‘(I) clearly state the default procedures of the 
derivatives clearing organization; 
‘‘(II) make publicly available the default rules 
of the derivatives clearing organization; and 
‘‘(III) ensure that the derivatives clearing 
organization may take timely action— 
‘‘(aa) to contain losses and liquidity pres-
sures; and 
‘‘(bb) to continue meeting each obligation 
of the derivatives clearing organization. 
‘‘(H) RULE ENFORCEMENT.—Each derivatives clearing 
organization shall— 
‘‘(i) 
maintain 
adequate 
arrangements 
and 
resources for— 
‘‘(I) the effective monitoring and enforcement 
of compliance with the rules of the derivatives 
clearing organization; and 
‘‘(II) the resolution of disputes; 
‘‘(ii) have the authority and ability to discipline, 
limit, suspend, or terminate the activities of a member 
or participant due to a violation by the member or 
participant of any rule of the derivatives clearing 
organization; and 
‘‘(iii) report to the Commission regarding rule 
enforcement activities and sanctions imposed against 
members and participants as provided in clause (ii). 
‘‘(I) SYSTEM
SAFEGUARDS.—Each derivatives clearing 
organization shall— 
‘‘(i) establish and maintain a program of risk anal-
ysis and oversight to identify and minimize sources 
of operational risk through the development of appro-
priate controls and procedures, and automated sys-
tems, that are reliable, secure, and have adequate scal-
able capacity;
H. R. 4173—316 
‘‘(ii) establish and maintain emergency procedures, 
backup facilities, and a plan for disaster recovery that 
allows for— 
‘‘(I) the timely recovery and resumption of 
operations of the derivatives clearing organization; 
and 
‘‘(II) the fulfillment of each obligation and 
responsibility of the derivatives clearing organiza-
tion; and 
‘‘(iii) periodically conduct tests to verify that the 
backup resources of the derivatives clearing organiza-
tion are sufficient to ensure daily processing, clearing, 
and settlement. 
‘‘(J) REPORTING.—Each derivatives clearing organiza-
tion shall provide to the Commission all information that 
the Commission determines to be necessary to conduct 
oversight of the derivatives clearing organization. 
‘‘(K) 
RECORDKEEPING.—Each 
derivatives 
clearing 
organization shall maintain records of all activities related 
to the business of the derivatives clearing organization 
as a derivatives clearing organization— 
‘‘(i) in a form and manner that is acceptable to 
the Commission; and 
‘‘(ii) for a period of not less than 5 years. 
‘‘(L) PUBLIC INFORMATION.— 
‘‘(i) 
IN
GENERAL.—Each 
derivatives 
clearing 
organization shall provide to market participants suffi-
cient information to enable the market participants 
to identify and evaluate accurately the risks and costs 
associated with using the services of the derivatives 
clearing organization. 
‘‘(ii) AVAILABILITY OF INFORMATION.—Each deriva-
tives clearing organization shall make information con-
cerning the rules and operating and default procedures 
governing the clearing and settlement systems of the 
derivatives clearing organization available to market 
participants. 
‘‘(iii) 
PUBLIC
DISCLOSURE.—Each 
derivatives 
clearing organization shall disclose publicly and to the 
Commission information concerning— 
‘‘(I) the terms and conditions of each contract, 
agreement, and transaction cleared and settled by 
the derivatives clearing organization; 
‘‘(II) each clearing and other fee that the 
derivatives clearing organization charges the mem-
bers and participants of the derivatives clearing 
organization; 
‘‘(III) the margin-setting methodology, and the 
size and composition, of the financial resource 
package of the derivatives clearing organization; 
‘‘(IV) daily settlement prices, volume, and open 
interest for each contract settled or cleared by 
the derivatives clearing organization; and 
‘‘(V) any other matter relevant to participation 
in the settlement and clearing activities of the 
derivatives clearing organization.
H. R. 4173—317 
‘‘(M) 
INFORMATION-SHARING.—Each 
derivatives 
clearing organization shall— 
‘‘(i) enter into, and abide by the terms of, each 
appropriate and applicable domestic and international 
information-sharing agreement; and 
‘‘(ii) use relevant information obtained from each 
agreement described in clause (i) in carrying out the 
risk management program of the derivatives clearing 
organization. 
‘‘(N) ANTITRUST CONSIDERATIONS.—Unless necessary or 
appropriate to achieve the purposes of this Act, a deriva-
tives clearing organization shall not— 
‘‘(i) adopt any rule or take any action that results 
in any unreasonable restraint of trade; or 
‘‘(ii) impose any material anticompetitive burden. 
‘‘(O) GOVERNANCE FITNESS STANDARDS.— 
‘‘(i) GOVERNANCE
ARRANGEMENTS.—Each deriva-
tives clearing organization shall establish governance 
arrangements that are transparent— 
‘‘(I) to fulfill public interest requirements; and 
‘‘(II) to permit the consideration of the views 
of owners and participants. 
‘‘(ii) 
FITNESS
STANDARDS.—Each 
derivatives 
clearing organization shall establish and enforce appro-
priate fitness standards for— 
‘‘(I) directors; 
‘‘(II) members of any disciplinary committee; 
‘‘(III) members of the derivatives clearing 
organization; 
‘‘(IV) any other individual or entity with direct 
access to the settlement or clearing activities of 
the derivatives clearing organization; and 
‘‘(V) any party affiliated with any individual 
or entity described in this clause. 
‘‘(P) 
CONFLICTS
OF
INTEREST.—Each 
derivatives 
clearing organization shall— 
‘‘(i) establish and enforce rules to minimize con-
flicts of interest in the decision-making process of the 
derivatives clearing organization; and 
‘‘(ii) establish a process for resolving conflicts of 
interest described in clause (i). 
‘‘(Q) COMPOSITION
OF
GOVERNING
BOARDS.—Each 
derivatives clearing organization shall ensure that the com-
position of the governing board or committee of the deriva-
tives clearing organization includes market participants. 
‘‘(R) LEGAL RISK.—Each derivatives clearing organiza-
tion shall have a well-founded, transparent, and enforceable 
legal framework for each aspect of the activities of the 
derivatives clearing organization.’’. 
(d) CONFLICTS OF INTEREST.—The Commodity Futures Trading 
Commission shall adopt rules mitigating conflicts of interest in 
connection with the conduct of business by a swap dealer or a 
major swap participant with a derivatives clearing organization, 
board of trade, or a swap execution facility that clears or trades 
swaps in which the swap dealer or major swap participant has 
a material debt or material equity investment.
H. R. 4173—318 
(e) REPORTING REQUIREMENTS.—Section 5b of the Commodity 
Exchange Act (7 U.S.C. 7a–1) (as amended by subsection (b)) is 
amended by adding at the end the following: 
‘‘(k) REPORTING REQUIREMENTS.— 
‘‘(1) DUTY OF DERIVATIVES CLEARING ORGANIZATIONS.—Each 
derivatives clearing organization that clears swaps shall provide 
to the Commission all information that is determined by the 
Commission to be necessary to perform each responsibility of 
the Commission under this Act. 
‘‘(2) DATA COLLECTION AND MAINTENANCE REQUIREMENTS.— 
The Commission shall adopt data collection and maintenance 
requirements for swaps cleared by derivatives clearing 
organizations that are comparable to the corresponding require-
ments for— 
‘‘(A) swaps data reported to swap data repositories; 
and 
‘‘(B) swaps traded on swap execution facilities. 
‘‘(3) REPORTS
ON
SECURITY-BASED
SWAP
AGREEMENTS
TO 
BE SHARED WITH THE SECURITIES AND EXCHANGE COMMISSION.— 
‘‘(A) IN GENERAL.—A derivatives clearing organization 
that clears security-based swap agreements (as defined 
in section 1a(47)(A)(v)) shall, upon request, open to inspec-
tion and examination to the Securities and Exchange 
Commission all books and records relating to such security- 
based swap agreements, consistent with the confidentiality 
and disclosure requirements of section 8. 
‘‘(B) JURISDICTION.—Nothing in this paragraph shall 
affect the exclusive jurisdiction of the Commission to pre-
scribe recordkeeping and reporting requirements for a 
derivatives clearing organization that is registered with 
the Commission. 
‘‘(4) INFORMATION SHARING.—Subject to section 8, and upon 
request, the Commission shall share information collected 
under paragraph (2) with— 
‘‘(A) the Board; 
‘‘(B) the Securities and Exchange Commission; 
‘‘(C) each appropriate prudential regulator; 
‘‘(D) the Financial Stability Oversight Council; 
‘‘(E) the Department of Justice; and 
‘‘(F) any other person that the Commission determines 
to be appropriate, including— 
‘‘(i) foreign financial supervisors (including foreign 
futures authorities); 
‘‘(ii) foreign central banks; and 
‘‘(iii) foreign ministries. 
‘‘(5) CONFIDENTIALITY AND INDEMNIFICATION AGREEMENT.— 
Before the Commission may share information with any entity 
described in paragraph (4)— 
‘‘(A) the Commission shall receive a written agreement 
from each entity stating that the entity shall abide by 
the confidentiality requirements described in section 8 
relating to the information on swap transactions that is 
provided; and 
‘‘(B) each entity shall agree to indemnify the Commis-
sion for any expenses arising from litigation relating to 
the information provided under section 8.
H. R. 4173—319 
‘‘(6) PUBLIC
INFORMATION.—Each derivatives clearing 
organization that clears swaps shall provide to the Commission 
(including any designee of the Commission) information under 
paragraph (2) in such form and at such frequency as is required 
by the Commission to comply with the public reporting require-
ments contained in section 2(a)(13).’’. 
(f) PUBLIC
DISCLOSURE.—Section 8(e) of the Commodity 
Exchange Act (7 U.S.C. 12(e)) is amended in the last sentence— 
(1) by inserting ‘‘, central bank and ministries,’’ after 
‘‘department’’ each place it appears; and 
(2) by striking ‘‘. is a party.’’ and inserting ‘‘, is a party.’’. 
(g) LEGAL CERTAINTY FOR IDENTIFIED BANKING PRODUCTS.— 
(1) REPEALS.—The Legal Certainty for Bank Products Act 
of 2000 (7 U.S.C. 27 et seq.) is amended— 
(A) by striking sections 404 and 407 (7 U.S.C. 27b, 
27e); 
(B) in section 402 (7 U.S.C. 27), by striking subsection 
(d); and 
(C) in section 408 (7 U.S.C. 27f)— 
(i) in subsection (c)— 
(I) by striking ‘‘in the case’’ and all that follows 
through ‘‘a hybrid’’ and inserting ‘‘in the case of 
a hybrid’’; 
(II) by striking ‘‘; or’’ and inserting a period; 
and 
(III) by striking paragraph (2); 
(ii) by striking subsection (b); and 
(iii) by redesignating subsection (c) as subsection 
(b). 
(2) LEGAL CERTAINTY FOR BANK PRODUCTS ACT OF 2000.— 
Section 403 of the Legal Certainty for Bank Products Act of 
2000 (7 U.S.C. 27a) is amended to read as follows: 
‘‘SEC. 403. EXCLUSION OF IDENTIFIED BANKING PRODUCT. 
‘‘(a) EXCLUSION.—Except as provided in subsection (b) or (c)— 
‘‘(1) the Commodity Exchange Act (7 U.S.C. 1 et seq.) 
shall not apply to, and the Commodity Futures Trading 
Commission shall not exercise regulatory authority under the 
Commodity Exchange Act (7 U.S.C. 1 et seq.) with respect 
to, an identified banking product; and 
‘‘(2) the definitions of ‘security-based swap’ in section 
3(a)(68) of the Securities Exchange Act of 1934 and ‘security- 
based swap agreement’ in section 1a(47)(A)(v) of the Commodity 
Exchange Act and section 3(a)(78) of the Securities Exchange 
Act of 1934 do not include any identified bank product. 
‘‘(b) EXCEPTION.—An appropriate Federal banking agency may 
except an identified banking product of a bank under its regulatory 
jurisdiction from the exclusion in subsection (a) if the agency deter-
mines, in consultation with the Commodity Futures Trading 
Commission and the Securities and Exchange Commission, that 
the product— 
‘‘(1) would meet the definition of a ‘swap’ under section 
1a(47) of the Commodity Exchange Act (7 U.S.C. 1a) or a 
‘security-based swap’ under that section 3(a)(68) of the Securi-
ties Exchange Act of 1934; and 
‘‘(2) has become known to the trade as a swap or security- 
based swap, or otherwise has been structured as an identified
H. R. 4173—320 
banking product for the purpose of evading the provisions of 
the Commodity Exchange Act (7 U.S.C. 1 et seq.), the Securities 
Act of 1933 (15 U.S.C. 77a et seq.), or the Securities Exchange 
Act of 1934 (15 U.S.C. 78a et seq.). 
‘‘(c) EXCEPTION.—The exclusions in subsection (a) shall not 
apply to an identified bank product that— 
‘‘(1) is a product of a bank that is not under the regulatory 
jurisdiction of an appropriate Federal banking agency; 
‘‘(2) meets the definition of swap in section 1a(47) of the 
Commodity Exchange Act or security-based swap in section 
3(a)(68) of the Securities Exchange Act of 1934; and 
‘‘(3) has become known to the trade as a swap or security- 
based swap, or otherwise has been structured as an identified 
banking product for the purpose of evading the provisions of 
the Commodity Exchange Act (7 U.S.C. 1 et seq.), the Securities 
Act of 1933 (15 U.S.C. 77a et seq.), or the Securities Exchange 
Act of 1934 (15 U.S.C. 78a et seq.).’’. 
(h) REDUCING CLEARING SYSTEMIC RISK.—Section 5b(f)(1) of 
the Commodity Exchange Act (7 U.S.C. 7a-1(F)(i)) is amended by 
adding at the end the following: ‘‘In order to minimize systemic 
risk, under no circumstances shall a derivatives clearing organiza-
tion be compelled to accept the counterparty credit risk of another 
clearing organization.’’. 
SEC. 726. RULEMAKING ON CONFLICT OF INTEREST. 
(a) IN GENERAL.—In order to mitigate conflicts of interest, 
not later than 180 days after the date of enactment of the Wall 
Street Transparency and Accountability Act of 2010, the Commodity 
Futures Trading Commission shall adopt rules which may include 
numerical limits on the control of, or the voting rights with respect 
to, any derivatives clearing organization that clears swaps, or swap 
execution facility or board of trade designated as a contract market 
that posts swaps or makes swaps available for trading, by a bank 
holding company (as defined in section 2 of the Bank Holding 
Company Act of 1956 (12 U.S.C. 1841)) with total consolidated 
assets of $50,000,000,000 or more, a nonbank financial company 
(as defined in section 102) supervised by the Board, an affiliate 
of such a bank holding company or nonbank financial company, 
a swap dealer, major swap participant, or associated person of 
a swap dealer or major swap participant. 
(b) PURPOSES.—The Commission shall adopt rules if it deter-
mines, after the review described in subsection (a), that such rules 
are necessary or appropriate to improve the governance of, or to 
mitigate systemic risk, promote competition, or mitigate conflicts 
of interest in connection with a swap dealer or major swap partici-
pant’s conduct of business with, a derivatives clearing organization, 
contract market, or swap execution facility that clears or posts 
swaps or makes swaps available for trading and in which such 
swap dealer or major swap participant has a material debt or 
equity investment. 
(c) CONSIDERATIONS.—In adopting rules pursuant to this sec-
tion, the Commodity Futures Trading Commission shall consider 
any conflicts of interest arising from the amount of equity owned 
by a single investor, the ability to vote, cause the vote of, or 
withhold votes entitled to be cast on any matters by the holders 
of the ownership interest, and the governance arrangements of 
any derivatives clearing organization that clears swaps, or swap
H. R. 4173—321 
execution facility or board of trade designated as a contract market 
that posts swaps or makes swaps available for trading. 
SEC. 727. PUBLIC REPORTING OF SWAP TRANSACTION DATA. 
Section 2(a) of the Commodity Exchange Act (7 U.S.C. 2(a)) 
is amended by adding at the end the following: 
‘‘(13) PUBLIC AVAILABILITY OF SWAP TRANSACTION DATA.— 
‘‘(A) DEFINITION
OF
REAL-TIME
PUBLIC
REPORTING.— 
In this paragraph, the term ‘real-time public reporting’ 
means to report data relating to a swap transaction, 
including price and volume, as soon as technologically prac-
ticable after the time at which the swap transaction has 
been executed. 
‘‘(B) PURPOSE.—The purpose of this section is to 
authorize the Commission to make swap transaction and 
pricing data available to the public in such form and at 
such times as the Commission determines appropriate to 
enhance price discovery. 
‘‘(C) GENERAL RULE.—The Commission is authorized 
and required to provide by rule for the public availability 
of swap transaction and pricing data as follows: 
‘‘(i) With respect to those swaps that are subject 
to the mandatory clearing requirement described in 
subsection (h)(1) (including those swaps that are 
excepted from the requirement pursuant to subsection 
(h)(7)), the Commission shall require real-time public 
reporting for such transactions. 
‘‘(ii) With respect to those swaps that are not sub-
ject to the mandatory clearing requirement described 
in subsection (h)(1), but are cleared at a registered 
derivatives clearing organization, the Commission shall 
require real-time public reporting for such trans-
actions. 
‘‘(iii) With respect to swaps that are not cleared 
at a registered derivatives clearing organization and 
which are reported to a swap data repository or the 
Commission under subsection (h)(6), the Commission 
shall require real-time public reporting for such trans-
actions, in a manner that does not disclose the business 
transactions and market positions of any person. 
‘‘(iv) With respect to swaps that are determined 
to be required to be cleared under subsection (h)(2) 
but are not cleared, the Commission shall require real- 
time public reporting for such transactions. 
‘‘(D) REGISTERED ENTITIES AND PUBLIC REPORTING.— 
The Commission may require registered entities to publicly 
disseminate the swap transaction and pricing data required 
to be reported under this paragraph. 
‘‘(E) RULEMAKING REQUIRED.—With respect to the rule 
providing for the public availability of transaction and 
pricing data for swaps described in clauses (i) and (ii) 
of subparagraph (C), the rule promulgated by the Commis-
sion shall contain provisions— 
‘‘(i) to ensure such information does not identify 
the participants;
H. R. 4173—322 
‘‘(ii) to specify the criteria for determining what 
constitutes a large notional swap transaction (block 
trade) for particular markets and contracts; 
‘‘(iii) to specify the appropriate time delay for 
reporting large notional swap transactions (block 
trades) to the public; and 
‘‘(iv) that take into account whether the public 
disclosure will materially reduce market liquidity. 
‘‘(F) TIMELINESS
OF
REPORTING.—Parties to a swap 
(including agents of the parties to a swap) shall be respon-
sible for reporting swap transaction information to the 
appropriate registered entity in a timely manner as may 
be prescribed by the Commission. 
‘‘(G) REPORTING OF SWAPS TO REGISTERED SWAP DATA 
REPOSITORIES.—Each swap (whether cleared or uncleared) 
shall be reported to a registered swap data repository. 
‘‘(14) SEMIANNUAL
AND
ANNUAL
PUBLIC
REPORTING
OF 
AGGREGATE SWAP DATA.— 
‘‘(A) IN GENERAL.—In accordance with subparagraph 
(B), the Commission shall issue a written report on a 
semiannual and annual basis to make available to the 
public information relating to— 
‘‘(i) the trading and clearing in the major swap 
categories; and 
‘‘(ii) the market participants and developments in 
new products. 
‘‘(B) USE; CONSULTATION.—In preparing a report under 
subparagraph (A), the Commission shall— 
‘‘(i) use information from swap data repositories 
and derivatives clearing organizations; and 
‘‘(ii) consult with the Office of the Comptroller 
of the Currency, the Bank for International Settle-
ments, and such other regulatory bodies as may be 
necessary. 
‘‘(C) AUTHORITY OF THE COMMISSION.—The Commission 
may, by rule, regulation, or order, delegate the public 
reporting responsibilities of the Commission under this 
paragraph in accordance with such terms and conditions 
as the Commission determines to be appropriate and in 
the public interest.’’. 
SEC. 728. SWAP DATA REPOSITORIES. 
The Commodity Exchange Act is amended by inserting after 
section 20 (7 U.S.C. 24) the following: 
‘‘SEC. 21. SWAP DATA REPOSITORIES. 
‘‘(a) REGISTRATION REQUIREMENT.— 
‘‘(1) REQUIREMENT; AUTHORITY OF DERIVATIVES CLEARING 
ORGANIZATION.— 
‘‘(A) IN GENERAL.—It shall be unlawful for any person, 
unless registered with the Commission, directly or 
indirectly to make use of the mails or any means or 
instrumentality of interstate commerce to perform the func-
tions of a swap data repository. 
‘‘(B) 
REGISTRATION
OF
DERIVATIVES
CLEARING 
ORGANIZATIONS.—A derivatives clearing organization may 
register as a swap data repository.
H. R. 4173—323 
‘‘(2) INSPECTION AND EXAMINATION.—Each registered swap 
data repository shall be subject to inspection and examination 
by any representative of the Commission. 
‘‘(3) COMPLIANCE WITH CORE PRINCIPLES.— 
‘‘(A) IN GENERAL.—To be registered, and maintain reg-
istration, as a swap data repository, the swap data reposi-
tory shall comply with— 
‘‘(i) the requirements and core principles described 
in this section; and 
‘‘(ii) any requirement that the Commission may 
impose by rule or regulation pursuant to section 8a(5). 
‘‘(B) REASONABLE DISCRETION OF SWAP DATA REPOSI-
TORY.—Unless otherwise determined by the Commission 
by rule or regulation, a swap data repository described 
in subparagraph (A) shall have reasonable discretion in 
establishing the manner in which the swap data repository 
complies with the core principles described in this section. 
‘‘(b) STANDARD SETTING.— 
‘‘(1) DATA IDENTIFICATION.— 
‘‘(A) IN GENERAL.—In accordance with subparagraph 
(B), the Commission shall prescribe standards that specify 
the data elements for each swap that shall be collected 
and maintained by each registered swap data repository. 
‘‘(B) REQUIREMENT.—In carrying out subparagraph (A), 
the Commission shall prescribe consistent data element 
standards applicable to registered entities and reporting 
counterparties. 
‘‘(2) DATA COLLECTION AND MAINTENANCE.—The Commis-
sion shall prescribe data collection and data maintenance stand-
ards for swap data repositories. 
‘‘(3) COMPARABILITY.—The standards prescribed by the 
Commission under this subsection shall be comparable to the 
data standards imposed by the Commission on derivatives 
clearing organizations in connection with their clearing of 
swaps. 
‘‘(c) DUTIES.—A swap data repository shall— 
‘‘(1) accept data prescribed by the Commission for each 
swap under subsection (b); 
‘‘(2) confirm with both counterparties to the swap the 
accuracy of the data that was submitted; 
‘‘(3) maintain the data described in paragraph (1) in such 
form, in such manner, and for such period as may be required 
by the Commission; 
‘‘(4)(A) provide direct electronic access to the Commission 
(or any designee of the Commission, including another reg-
istered entity); and 
‘‘(B) provide the information described in paragraph (1) 
in such form and at such frequency as the Commission may 
require to comply with the public reporting requirements con-
tained in section 2(a)(13); 
‘‘(5) at the direction of the Commission, establish automated 
systems for monitoring, screening, and analyzing swap data, 
including compliance and frequency of end user clearing exemp-
tion claims by individual and affiliated entities; 
‘‘(6) maintain the privacy of any and all swap transaction 
information that the swap data repository receives from a swap 
dealer, counterparty, or any other registered entity; and
H. R. 4173—324 
‘‘(7) on a confidential basis pursuant to section 8, upon 
request, and after notifying the Commission of the request, 
make available all data obtained by the swap data repository, 
including individual counterparty trade and position data, to— 
‘‘(A) each appropriate prudential regulator; 
‘‘(B) the Financial Stability Oversight Council; 
‘‘(C) the Securities and Exchange Commission; 
‘‘(D) the Department of Justice; and 
‘‘(E) any other person that the Commission determines 
to be appropriate, including— 
‘‘(i) foreign financial supervisors (including foreign 
futures authorities); 
‘‘(ii) foreign central banks; and 
‘‘(iii) foreign ministries; and 
‘‘(8) establish and maintain emergency procedures, backup 
facilities, and a plan for disaster recovery that allows for the 
timely recovery and resumption of operations and the fulfill-
ment of the responsibilities and obligations of the organization. 
‘‘(d) CONFIDENTIALITY
AND INDEMNIFICATION AGREEMENT.— 
Before the swap data repository may share information with any 
entity described in subsection (c)(7)— 
‘‘(1) the swap data repository shall receive a written agree-
ment from each entity stating that the entity shall abide by 
the confidentiality requirements described in section 8 relating 
to the information on swap transactions that is provided; and 
‘‘(2) each entity shall agree to indemnify the swap data 
repository and the Commission for any expenses arising from 
litigation relating to the information provided under section 
8. 
‘‘(e) DESIGNATION OF CHIEF COMPLIANCE OFFICER.— 
‘‘(1) IN GENERAL.—Each swap data repository shall des-
ignate an individual to serve as a chief compliance officer. 
‘‘(2) DUTIES.—The chief compliance officer shall— 
‘‘(A) report directly to the board or to the senior officer 
of the swap data repository; 
‘‘(B) review the compliance of the swap data repository 
with respect to the requirements and core principles 
described in this section; 
‘‘(C) in consultation with the board of the swap data 
repository, a body performing a function similar to the 
board of the swap data repository, or the senior officer 
of the swap data repository, resolve any conflicts of interest 
that may arise; 
‘‘(D) be responsible for administering each policy and 
procedure that is required to be established pursuant to 
this section; 
‘‘(E) ensure compliance with this Act (including regula-
tions) relating to agreements, contracts, or transactions, 
including each rule prescribed by the Commission under 
this section; 
‘‘(F) establish procedures for the remediation of non-
compliance issues identified by the chief compliance officer 
through any— 
‘‘(i) compliance office review; 
‘‘(ii) look-back; 
‘‘(iii) internal or external audit finding; 
‘‘(iv) self-reported error; or
H. R. 4173—325 
‘‘(v) validated complaint; and 
‘‘(G) establish and follow appropriate procedures for 
the handling, management response, remediation, re-
testing, and closing of noncompliance issues. 
‘‘(3) ANNUAL REPORTS.— 
‘‘(A) IN GENERAL.—In accordance with rules prescribed 
by the Commission, the chief compliance officer shall 
annually prepare and sign a report that contains a descrip-
tion of— 
‘‘(i) the compliance of the swap data repository 
of the chief compliance officer with respect to this 
Act (including regulations); and 
‘‘(ii) each policy and procedure of the swap data 
repository of the chief compliance officer (including 
the code of ethics and conflict of interest policies of 
the swap data repository). 
‘‘(B) REQUIREMENTS.—A compliance report under 
subparagraph (A) shall— 
‘‘(i) accompany each appropriate financial report 
of the swap data repository that is required to be 
furnished to the Commission pursuant to this section; 
and 
‘‘(ii) include a certification that, under penalty of 
law, the compliance report is accurate and complete. 
‘‘(f) CORE PRINCIPLES APPLICABLE TO SWAP DATA REPOSI-
TORIES.— 
‘‘(1) ANTITRUST
CONSIDERATIONS.—Unless necessary or 
appropriate to achieve the purposes of this Act, a swap data 
repository shall not— 
‘‘(A) adopt any rule or take any action that results 
in any unreasonable restraint of trade; or 
‘‘(B) impose any material anticompetitive burden on 
the trading, clearing, or reporting of transactions. 
‘‘(2) GOVERNANCE ARRANGEMENTS.—Each swap data reposi-
tory shall establish governance arrangements that are trans-
parent— 
‘‘(A) to fulfill public interest requirements; and 
‘‘(B) to support the objectives of the Federal Govern-
ment, owners, and participants. 
‘‘(3) CONFLICTS OF INTEREST.—Each swap data repository 
shall— 
‘‘(A) establish and enforce rules to minimize conflicts 
of interest in the decision-making process of the swap data 
repository; and 
‘‘(B) establish a process for resolving conflicts of 
interest described in subparagraph (A). 
‘‘(4) ADDITIONAL DUTIES DEVELOPED BY COMMISSION.— 
‘‘(A) IN GENERAL.—The Commission may develop 1 or 
more additional duties applicable to swap data repositories. 
‘‘(B) CONSIDERATION
OF
EVOLVING
STANDARDS.—In 
developing additional duties under subparagraph (A), the 
Commission may take into consideration any evolving 
standard of the United States or the international commu-
nity. 
‘‘(C) ADDITIONAL DUTIES FOR COMMISSION DESIGNEES.— 
The Commission shall establish additional duties for any 
registrant described in section 1a(48) in order to minimize
H. R. 4173—326 
conflicts of interest, protect data, ensure compliance, and 
guarantee the safety and security of the swap data reposi-
tory. 
‘‘(g) REQUIRED REGISTRATION FOR SWAP DATA REPOSITORIES.— 
Any person that is required to be registered as a swap data reposi-
tory under this section shall register with the Commission regard-
less of whether that person is also licensed as a bank or registered 
with the Securities and Exchange Commission as a swap data 
repository. 
‘‘(h) RULES.—The Commission shall adopt rules governing per-
sons that are registered under this section.’’. 
SEC. 729. REPORTING AND RECORDKEEPING. 
The Commodity Exchange Act is amended by inserting after 
section 4q (7 U.S.C. 6o–1) the following: 
‘‘SEC. 4r. REPORTING AND RECORDKEEPING FOR UNCLEARED SWAPS. 
‘‘(a) REQUIRED REPORTING OF SWAPS NOT ACCEPTED BY ANY 
DERIVATIVES CLEARING ORGANIZATION.— 
‘‘(1) IN
GENERAL.—Each swap that is not accepted for 
clearing by any derivatives clearing organization shall be 
reported to— 
‘‘(A) a swap data repository described in section 21; 
or 
‘‘(B) in the case in which there is no swap data reposi-
tory that would accept the swap, to the Commission pursu-
ant to this section within such time period as the Commis-
sion may by rule or regulation prescribe. 
‘‘(2) TRANSITION RULE FOR PREENACTMENT SWAPS.— 
‘‘(A) SWAPS ENTERED INTO BEFORE THE DATE OF ENACT-
MENT OF THE WALL STREET TRANSPARENCY AND ACCOUNT-
ABILITY ACT OF 2010.—Each swap entered into before the 
date of enactment of the Wall Street Transparency and 
Accountability Act of 2010, the terms of which have not 
expired as of the date of enactment of that Act, shall 
be reported to a registered swap data repository or the 
Commission by a date that is not later than— 
‘‘(i) 30 days after issuance of the interim final 
rule; or 
‘‘(ii) such other period as the Commission deter-
mines to be appropriate. 
‘‘(B) COMMISSION RULEMAKING.—The Commission shall 
promulgate an interim final rule within 90 days of the 
date of enactment of this section providing for the reporting 
of each swap entered into before the date of enactment 
as referenced in subparagraph (A). 
‘‘(C) 
EFFECTIVE
DATE.—The 
reporting 
provisions 
described in this section shall be effective upon the enact-
ment of this section. 
‘‘(3) REPORTING OBLIGATIONS.— 
‘‘(A) SWAPS IN WHICH ONLY 1 COUNTERPARTY IS A SWAP 
DEALER OR MAJOR SWAP PARTICIPANT.—With respect to a 
swap in which only 1 counterparty is a swap dealer or 
major swap participant, the swap dealer or major swap 
participant shall report the swap as required under para-
graphs (1) and (2). 
‘‘(B) SWAPS
IN
WHICH
COUNTERPARTY
IS
A
SWAP 
DEALER AND THE OTHER A MAJOR SWAP PARTICIPANT.—With
H. R. 4173—327 
respect to a swap in which 1 counterparty is a swap dealer 
and the other a major swap participant, the swap dealer 
shall report the swap as required under paragraphs (1) 
and (2). 
‘‘(C) OTHER SWAPS.—With respect to any other swap 
not described in subparagraph (A) or (B), the counterparties 
to the swap shall select a counterparty to report the swap 
as required under paragraphs (1) and (2). 
‘‘(b) DUTIES OF CERTAIN INDIVIDUALS.—Any individual or entity 
that enters into a swap shall meet each requirement described 
in subsection (c) if the individual or entity did not— 
‘‘(1) clear the swap in accordance with section 2(h)(1); or 
‘‘(2) have the data regarding the swap accepted by a swap 
data repository in accordance with rules (including timeframes) 
adopted by the Commission under section 21. 
‘‘(c) REQUIREMENTS.—An individual or entity described in sub-
section (b) shall— 
‘‘(1) upon written request from the Commission, provide 
reports regarding the swaps held by the individual or entity 
to the Commission in such form and in such manner as the 
Commission may request; and 
‘‘(2) maintain books and records pertaining to the swaps 
held by the individual or entity in such form, in such manner, 
and for such period as the Commission may require, which 
shall be open to inspection by— 
‘‘(A) any representative of the Commission; 
‘‘(B) an appropriate prudential regulator; 
‘‘(C) the Securities and Exchange Commission; 
‘‘(D) the Financial Stability Oversight Council; and 
‘‘(E) the Department of Justice. 
‘‘(d) IDENTICAL DATA.—In prescribing rules under this section, 
the Commission shall require individuals and entities described 
in subsection (b) to submit to the Commission a report that contains 
data that is not less comprehensive than the data required to 
be collected by swap data repositories under section 21.’’. 
SEC. 730. LARGE SWAP TRADER REPORTING. 
The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended 
by adding after section 4s (as added by section 731) the following: 
‘‘SEC. 4t. LARGE SWAP TRADER REPORTING. 
‘‘(a) PROHIBITION.— 
‘‘(1) IN GENERAL.—Except as provided in paragraph (2), 
it shall be unlawful for any person to enter into any swap 
that the Commission determines to perform a significant price 
discovery function with respect to registered entities if— 
‘‘(A) the person directly or indirectly enters into the 
swap during any 1 day in an amount equal to or in excess 
of such amount as shall be established periodically by 
the Commission; and 
‘‘(B) the person directly or indirectly has or obtains 
a position in the swap equal to or in excess of such amount 
as shall be established periodically by the Commission. 
‘‘(2) EXCEPTION.—Paragraph (1) shall not apply if— 
‘‘(A) the person files or causes to be filed with the 
properly designated officer of the Commission such reports
H. R. 4173—328 
regarding any transactions or positions described in sub-
paragraphs (A) and (B) of paragraph (1) as the Commission 
may require by rule or regulation; and 
‘‘(B) in accordance with the rules and regulations of 
the Commission, the person keeps books and records of 
all such swaps and any transactions and positions in any 
related commodity traded on or subject to the rules of 
any designated contract market or swap execution facility, 
and of cash or spot transactions in, inventories of, and 
purchase and sale commitments of, such a commodity. 
‘‘(b) REQUIREMENTS.— 
‘‘(1) IN
GENERAL.—Books and records described in sub-
section (a)(2)(B) shall— 
‘‘(A) show such complete details concerning all trans-
actions and positions as the Commission may prescribe 
by rule or regulation; 
‘‘(B) be open at all times to inspection and examination 
by any representative of the Commission; and 
‘‘(C) be open at all times to inspection and examination 
by the Securities and Exchange Commission, to the extent 
such books and records relate to transactions in swaps 
(as that term is defined in section 1a(47)(A)(v)), and con-
sistent with the confidentiality and disclosure requirements 
of section 8. 
‘‘(2) JURISDICTION.—Nothing in paragraph (1) shall affect 
the exclusive jurisdiction of the Commission to prescribe record-
keeping and reporting requirements for large swap traders 
under this section. 
‘‘(c) APPLICABILITY.—For purposes of this section, the swaps, 
futures, and cash or spot transactions and positions of any person 
shall include the swaps, futures, and cash or spot transactions 
and positions of any persons directly or indirectly controlled by 
the person. 
‘‘(d) SIGNIFICANT PRICE DISCOVERY FUNCTION.—In making a 
determination as to whether a swap performs or affects a significant 
price discovery function with respect to registered entities, the 
Commission shall consider the factors described in section 4a(a)(3).’’. 
SEC. 731. REGISTRATION AND REGULATION OF SWAP DEALERS AND 
MAJOR SWAP PARTICIPANTS. 
The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended 
by inserting after section 4r (as added by section 729) the following: 
‘‘SEC. 4s. REGISTRATION AND REGULATION OF SWAP DEALERS AND 
MAJOR SWAP PARTICIPANTS. 
‘‘(a) REGISTRATION.— 
‘‘(1) SWAP DEALERS.—It shall be unlawful for any person 
to act as a swap dealer unless the person is registered as 
a swap dealer with the Commission. 
‘‘(2) MAJOR SWAP PARTICIPANTS.—It shall be unlawful for 
any person to act as a major swap participant unless the 
person is registered as a major swap participant with the 
Commission. 
‘‘(b) REQUIREMENTS.— 
‘‘(1) IN GENERAL.—A person shall register as a swap dealer 
or major swap participant by filing a registration application 
with the Commission. 
‘‘(2) CONTENTS.—
H. R. 4173—329 
‘‘(A) IN GENERAL.—The application shall be made in 
such form and manner as prescribed by the Commission, 
and shall contain such information, as the Commission 
considers necessary concerning the business in which the 
applicant is or will be engaged. 
‘‘(B) CONTINUAL
REPORTING.—A person that is reg-
istered as a swap dealer or major swap participant shall 
continue to submit to the Commission reports that contain 
such information pertaining to the business of the person 
as the Commission may require. 
‘‘(3) EXPIRATION.—Each registration under this section shall 
expire at such time as the Commission may prescribe by rule 
or regulation. 
‘‘(4) RULES.—Except as provided in subsections (d) and 
(e), the Commission may prescribe rules applicable to swap 
dealers and major swap participants, including rules that limit 
the activities of swap dealers and major swap participants. 
‘‘(5) TRANSITION.—Rules under this section shall provide 
for the registration of swap dealers and major swap participants 
not later than 1 year after the date of enactment of the Wall 
Street Transparency and Accountability Act of 2010. 
‘‘(6) STATUTORY DISQUALIFICATION.—Except to the extent 
otherwise specifically provided by rule, regulation, or order, 
it shall be unlawful for a swap dealer or a major swap partici-
pant to permit any person associated with a swap dealer or 
a major swap participant who is subject to a statutory disquali-
fication to effect or be involved in effecting swaps on behalf 
of the swap dealer or major swap participant, if the swap 
dealer or major swap participant knew, or in the exercise 
of reasonable care should have known, of the statutory disquali-
fication. 
‘‘(c) DUAL REGISTRATION.— 
‘‘(1) SWAP DEALER.—Any person that is required to be reg-
istered as a swap dealer under this section shall register with 
the Commission regardless of whether the person also is a 
depository institution or is registered with the Securities and 
Exchange Commission as a security-based swap dealer. 
‘‘(2) MAJOR SWAP PARTICIPANT.—Any person that is required 
to be registered as a major swap participant under this section 
shall register with the Commission regardless of whether the 
person also is a depository institution or is registered with 
the Securities and Exchange Commission as a major security- 
based swap participant. 
‘‘(d) RULEMAKINGS.— 
‘‘(1) IN GENERAL.—The Commission shall adopt rules for 
persons that are registered as swap dealers or major swap 
participants under this section. 
‘‘(2) EXCEPTION FOR PRUDENTIAL REQUIREMENTS.— 
‘‘(A) IN GENERAL.—The Commission may not prescribe 
rules imposing prudential requirements on swap dealers 
or major swap participants for which there is a prudential 
regulator. 
‘‘(B) APPLICABILITY.—Subparagraph (A) does not limit 
the authority of the Commission to prescribe rules as 
directed under this section. 
‘‘(e) CAPITAL AND MARGIN REQUIREMENTS.— 
‘‘(1) IN GENERAL.—
H. R. 4173—330 
‘‘(A) SWAP
DEALERS
AND
MAJOR
SWAP
PARTICIPANTS 
THAT ARE BANKS.—Each registered swap dealer and major 
swap participant for which there is a prudential regulator 
shall meet such minimum capital requirements and min-
imum initial and variation margin requirements as the 
prudential regulator shall by rule or regulation prescribe 
under paragraph (2)(A). 
‘‘(B) SWAP
DEALERS
AND
MAJOR
SWAP
PARTICIPANTS 
THAT ARE NOT BANKS.—Each registered swap dealer and 
major swap participant for which there is not a prudential 
regulator shall meet such minimum capital requirements 
and minimum initial and variation margin requirements 
as the Commission shall by rule or regulation prescribe 
under paragraph (2)(B). 
‘‘(2) RULES.— 
‘‘(A) SWAP
DEALERS
AND
MAJOR
SWAP
PARTICIPANTS 
THAT ARE BANKS.—The prudential regulators, in consulta-
tion with the Commission and the Securities and Exchange 
Commission, shall jointly adopt rules for swap dealers and 
major swap participants, with respect to their activities 
as a swap dealer or major swap participant, for which 
there is a prudential regulator imposing— 
‘‘(i) capital requirements; and 
‘‘(ii) both initial and variation margin requirements 
on all swaps that are not cleared by a registered deriva-
tives clearing organization. 
‘‘(B) SWAP
DEALERS
AND
MAJOR
SWAP
PARTICIPANTS 
THAT ARE NOT BANKS.—The Commission shall adopt rules 
for swap dealers and major swap participants, with respect 
to their activities as a swap dealer or major swap partici-
pant, for which there is not a prudential regulator 
imposing— 
‘‘(i) capital requirements; and 
‘‘(ii) both initial and variation margin requirements 
on all swaps that are not cleared by a registered deriva-
tives clearing organization. 
‘‘(C) CAPITAL.—In setting capital requirements for a 
person that is designated as a swap dealer or a major 
swap participant for a single type or single class or category 
of swap or activities, the prudential regulator and the 
Commission shall take into account the risks associated 
with other types of swaps or classes of swaps or categories 
of swaps engaged in and the other activities conducted 
by that person that are not otherwise subject to regulation 
applicable to that person by virtue of the status of the 
person as a swap dealer or a major swap participant. 
‘‘(3) STANDARDS FOR CAPITAL AND MARGIN.— 
‘‘(A) IN GENERAL.—To offset the greater risk to the 
swap dealer or major swap participant and the financial 
system arising from the use of swaps that are not cleared, 
the requirements imposed under paragraph (2) shall— 
‘‘(i) help ensure the safety and soundness of the 
swap dealer or major swap participant; and 
‘‘(ii) be appropriate for the risk associated with 
the non-cleared swaps held as a swap dealer or major 
swap participant. 
‘‘(B) RULE OF CONSTRUCTION.—
H. R. 4173—331 
‘‘(i) IN
GENERAL.—Nothing in this section shall 
limit, or be construed to limit, the authority— 
‘‘(I) of the Commission to set financial respon-
sibility rules for a futures commission merchant 
or introducing broker registered pursuant to sec-
tion 4f(a) (except for section 4f(a)(3)) in accordance 
with section 4f(b); or 
‘‘(II) of the Securities and Exchange Commis-
sion to set financial responsibility rules for a 
broker or dealer registered pursuant to section 
15(b) of the Securities Exchange Act of 1934 (15 
U.S.C. 78o(b)) (except for section 15(b)(11) of that 
Act (15 U.S.C. 78o(b)(11)) in accordance with sec-
tion 15(c)(3) of the Securities Exchange Act of 1934 
(15 U.S.C. 78o(c)(3)). 
‘‘(ii) FUTURES COMMISSION MERCHANTS AND OTHER 
DEALERS.—A futures commission merchant, intro-
ducing broker, broker, or dealer shall maintain suffi-
cient capital to comply with the stricter of any 
applicable capital requirements to which such futures 
commission merchant, introducing broker, broker, or 
dealer is subject to under this Act or the Securities 
Exchange Act of 1934 (15 U.S.C. 78a et seq.). 
‘‘(C) MARGIN
REQUIREMENTS.—In prescribing margin 
requirements under this subsection, the prudential regu-
lator with respect to swap dealers and major swap partici-
pants for which it is the prudential regulator and the 
Commission with respect to swap dealers and major swap 
participants for which there is no prudential regulator 
shall permit the use of noncash collateral, as the regulator 
or the Commission determines to be consistent with— 
‘‘(i) preserving the financial integrity of markets 
trading swaps; and 
‘‘(ii) preserving the stability of the United States 
financial system. 
‘‘(D) COMPARABILITY OF CAPITAL AND MARGIN REQUIRE-
MENTS.— 
‘‘(i) IN GENERAL.—The prudential regulators, the 
Commission, 
and 
the 
Securities 
and 
Exchange 
Commission shall periodically (but not less frequently 
than annually) consult on minimum capital require-
ments and minimum initial and variation margin 
requirements. 
‘‘(ii) COMPARABILITY.—The entities described in 
clause (i) shall, to the maximum extent practicable, 
establish and maintain comparable minimum capital 
requirements and minimum initial and variation 
margin requirements, including the use of non cash 
collateral, for— 
‘‘(I) swap dealers; and 
‘‘(II) major swap participants. 
‘‘(f) REPORTING AND RECORDKEEPING.— 
‘‘(1) IN GENERAL.—Each registered swap dealer and major 
swap participant—
H. R. 4173—332 
‘‘(A) shall make such reports as are required by the 
Commission by rule or regulation regarding the trans-
actions and positions and financial condition of the reg-
istered swap dealer or major swap participant; 
‘‘(B)(i) for which there is a prudential regulator, shall 
keep books and records of all activities related to the busi-
ness as a swap dealer or major swap participant in such 
form and manner and for such period as may be prescribed 
by the Commission by rule or regulation; and 
‘‘(ii) for which there is no prudential regulator, shall 
keep books and records in such form and manner and 
for such period as may be prescribed by the Commission 
by rule or regulation; 
‘‘(C) shall keep books and records described in subpara-
graph (B) open to inspection and examination by any rep-
resentative of the Commission; and 
‘‘(D) shall keep any such books and records relating 
to swaps defined in section 1a(47)(A)(v) open to inspection 
and examination by the Securities and Exchange Commis-
sion. 
‘‘(2) RULES.—The Commission shall adopt rules governing 
reporting and recordkeeping for swap dealers and major swap 
participants. 
‘‘(g) DAILY TRADING RECORDS.— 
‘‘(1) IN GENERAL.—Each registered swap dealer and major 
swap participant shall maintain daily trading records of the 
swaps of the registered swap dealer and major swap participant 
and all related records (including related cash or forward trans-
actions) and recorded communications, including electronic 
mail, instant messages, and recordings of telephone calls, for 
such period as may be required by the Commission by rule 
or regulation. 
‘‘(2) INFORMATION
REQUIREMENTS.—The daily trading 
records shall include such information as the Commission shall 
require by rule or regulation. 
‘‘(3) COUNTERPARTY RECORDS.—Each registered swap dealer 
and major swap participant shall maintain daily trading records 
for each counterparty in a manner and form that is identifiable 
with each swap transaction. 
‘‘(4) AUDIT TRAIL.—Each registered swap dealer and major 
swap participant shall maintain a complete audit trail for con-
ducting comprehensive and accurate trade reconstructions. 
‘‘(5) RULES.—The Commission shall adopt rules governing 
daily trading records for swap dealers and major swap partici-
pants. 
‘‘(h) BUSINESS CONDUCT STANDARDS.— 
‘‘(1) IN GENERAL.—Each registered swap dealer and major 
swap participant shall conform with such business conduct 
standards as prescribed in paragraph (3) and as may be pre-
scribed by the Commission by rule or regulation that relate 
to— 
‘‘(A) fraud, manipulation, and other abusive practices 
involving swaps (including swaps that are offered but not 
entered into); 
‘‘(B) diligent supervision of the business of the reg-
istered swap dealer and major swap participant; 
‘‘(C) adherence to all applicable position limits; and
H. R. 4173—333 
‘‘(D) such other matters as the Commission determines 
to be appropriate. 
‘‘(2) RESPONSIBILITIES WITH RESPECT TO SPECIAL ENTITIES.— 
‘‘(A) ADVISING
SPECIAL
ENTITIES.—A swap dealer or 
major swap participant that acts as an advisor to a special 
entity regarding a swap shall comply with the requirements 
of subparagraph (4) with respect to such Special Entity. 
‘‘(B) ENTERING OF SWAPS WITH RESPECT TO SPECIAL 
ENTITIES.—A swap dealer that enters into or offers to enter 
into swap with a Special Entity shall comply with the 
requirements of subparagraph (5) with respect to such 
Special Entity. 
‘‘(C) SPECIAL ENTITY DEFINED.—For purposes of this 
subsection, the term ‘special entity’ means— 
‘‘(i) a Federal agency; 
‘‘(ii) a State, State agency, city, county, munici-
pality, or other political subdivision of a State; 
‘‘(iii) any employee benefit plan, as defined in sec-
tion 3 of the Employee Retirement Income Security 
Act of 1974 (29 U.S.C. 1002); 
‘‘(iv) any governmental plan, as defined in section 
3 of the Employee Retirement Income Security Act 
of 1974 (29 U.S.C. 1002); or 
‘‘(v) any endowment, including an endowment that 
is an organization described in section 501(c)(3) of the 
Internal Revenue Code of 1986. 
‘‘(3) BUSINESS CONDUCT REQUIREMENTS.—Business conduct 
requirements adopted by the Commission shall— 
‘‘(A) establish a duty for a swap dealer or major swap 
participant to verify that any counterparty meets the eligi-
bility standards for an eligible contract participant; 
‘‘(B) require disclosure by the swap dealer or major 
swap participant to any counterparty to the transaction 
(other than a swap dealer, major swap participant, security- 
based swap dealer, or major security-based swap partici-
pant) of— 
‘‘(i) information about the material risks and 
characteristics of the swap; 
‘‘(ii) any material incentives or conflicts of interest 
that the swap dealer or major swap participant may 
have in connection with the swap; and 
‘‘(iii)(I) for cleared swaps, upon the request of the 
counterparty, receipt of the daily mark of the trans-
action from the appropriate derivatives clearing 
organization; and 
‘‘(II) for uncleared swaps, receipt of the daily mark 
of the transaction from the swap dealer or the major 
swap participant; 
‘‘(C) establish a duty for a swap dealer or major swap 
participant to communicate in a fair and balanced manner 
based on principles of fair dealing and good faith; and 
‘‘(D) establish such other standards and requirements 
as the Commission may determine are appropriate in the 
public interest, for the protection of investors, or otherwise 
in furtherance of the purposes of this Act. 
‘‘(4) SPECIAL REQUIREMENTS FOR SWAP DEALERS ACTING AS 
ADVISORS.—
H. R. 4173—334 
‘‘(A) IN
GENERAL.—It shall be unlawful for a swap 
dealer or major swap participant— 
‘‘(i) to employ any device, scheme, or artifice to 
defraud any Special Entity or prospective customer 
who is a Special Entity; 
‘‘(ii) to engage in any transaction, practice, or 
course of business that operates as a fraud or deceit 
on any Special Entity or prospective customer who 
is a Special Entity; or 
‘‘(iii) to engage in any act, practice, or course of 
business that is fraudulent, deceptive or manipulative. 
‘‘(B) DUTY.—Any swap dealer that acts as an advisor 
to a Special Entity shall have a duty to act in the best 
interests of the Special Entity. 
‘‘(C) REASONABLE EFFORTS.—Any swap dealer that acts 
as an advisor to a Special Entity shall make reasonable 
efforts to obtain such information as is necessary to make 
a reasonable determination that any swap recommended 
by the swap dealer is in the best interests of the Special 
Entity, including information relating to— 
‘‘(i) the financial status of the Special Entity; 
‘‘(ii) the tax status of the Special Entity; 
‘‘(iii) the investment or financing objectives of the 
Special Entity; and 
‘‘(iv) any other information that the Commission 
may prescribe by rule or regulation. 
‘‘(5) SPECIAL
REQUIREMENTS
FOR
SWAP
DEALERS
AS 
COUNTERPARTIES TO SPECIAL ENTITIES.— 
‘‘(A) Any swap dealer or major swap participant that 
offers to enter or enters into a swap with a Special Entity 
shall— 
‘‘(i) comply with any duty established by the 
Commission for a swap dealer or major swap partici-
pant, with respect to a counterparty that is an eligible 
contract participant within the meaning of subclause 
(I) or (II) of clause (vii) of section 1a(18) of this Act, 
that requires the swap dealer or major swap partici-
pant to have a reasonable basis to believe that the 
counterparty that is a Special Entity has an inde-
pendent representative that— 
‘‘(I) has sufficient knowledge to evaluate the 
transaction and risks; 
‘‘(II) is not subject to a statutory disqualifica-
tion; 
‘‘(III) is independent of the swap dealer or 
major swap participant; 
‘‘(IV) undertakes a duty to act in the best 
interests of the counterparty it represents; 
‘‘(V) makes appropriate disclosures; 
‘‘(VI) will provide written representations to 
the Special Entity regarding fair pricing and the 
appropriateness of the transaction; and 
‘‘(VII) in the case of employee benefit plans 
subject to the Employee Retirement Income Secu-
rity act of 1974, is a fiduciary as defined in section 
3 of that Act (29 U.S.C. 1002); and
H. R. 4173—335 
‘‘(ii) before the initiation of the transaction, disclose 
to the Special Entity in writing the capacity in which 
the swap dealer is acting; and 
‘‘(B) the Commission may establish such other stand-
ards and requirements as the Commission may determine 
are appropriate in the public interest, for the protection 
of investors, or otherwise in furtherance of the purposes 
of this Act. 
‘‘(6) RULES.—The Commission shall prescribe rules under 
this subsection governing business conduct standards for swap 
dealers and major swap participants. 
‘‘(7) APPLICABILITY.—This section shall not apply with 
respect to a transaction that is— 
‘‘(A) initiated by a Special Entity on an exchange or 
swap execution facility; and 
‘‘(B) one in which the swap dealer or major swap 
participant does not know the identity of the counterparty 
to the transaction. 
‘‘(i) DOCUMENTATION STANDARDS.— 
‘‘(1) IN GENERAL.—Each registered swap dealer and major 
swap participant shall conform with such standards as may 
be prescribed by the Commission by rule or regulation that 
relate to timely and accurate confirmation, processing, netting, 
documentation, and valuation of all swaps. 
‘‘(2) RULES.—The Commission shall adopt rules governing 
documentation standards for swap dealers and major swap 
participants. 
‘‘(j) DUTIES.—Each registered swap dealer and major swap 
participant at all times shall comply with the following require-
ments: 
‘‘(1) MONITORING OF TRADING.—The swap dealer or major 
swap participant shall monitor its trading in swaps to prevent 
violations of applicable position limits. 
‘‘(2) RISK MANAGEMENT PROCEDURES.—The swap dealer or 
major swap participant shall establish robust and professional 
risk management systems adequate for managing the day- 
to-day business of the swap dealer or major swap participant. 
‘‘(3) DISCLOSURE
OF
GENERAL
INFORMATION.—The swap 
dealer or major swap participant shall disclose to the Commis-
sion and to the prudential regulator for the swap dealer or 
major swap participant, as applicable, information concerning— 
‘‘(A) terms and conditions of its swaps; 
‘‘(B) swap trading operations, mechanisms, and prac-
tices; 
‘‘(C) financial integrity protections relating to swaps; 
and 
‘‘(D) other information relevant to its trading in swaps. 
‘‘(4) ABILITY TO OBTAIN INFORMATION.—The swap dealer 
or major swap participant shall— 
‘‘(A) establish and enforce internal systems and proce-
dures to obtain any necessary information to perform any 
of the functions described in this section; and 
‘‘(B) provide the information to the Commission and 
to the prudential regulator for the swap dealer or major 
swap participant, as applicable, on request.
H. R. 4173—336 
‘‘(5) CONFLICTS OF INTEREST.—The swap dealer and major 
swap participant shall implement conflict-of-interest systems 
and procedures that— 
‘‘(A) establish structural and institutional safeguards 
to ensure that the activities of any person within the firm 
relating to research or analysis of the price or market 
for any commodity or swap or acting in a role of providing 
clearing activities or making determinations as to accepting 
clearing customers are separated by appropriate informa-
tional partitions within the firm from the review, pressure, 
or oversight of persons whose involvement in pricing, 
trading, or clearing activities might potentially bias their 
judgment or supervision and contravene the core principles 
of open access and the business conduct standards 
described in this Act; and 
‘‘(B) address such other issues as the Commission 
determines to be appropriate. 
‘‘(6) ANTITRUST
CONSIDERATIONS.—Unless necessary or 
appropriate to achieve the purposes of this Act, a swap dealer 
or major swap participant shall not— 
‘‘(A) adopt any process or take any action that results 
in any unreasonable restraint of trade; or 
‘‘(B) impose any material anticompetitive burden on 
trading or clearing. 
‘‘(7) RULES.—The Commission shall prescribe rules under 
this subsection governing duties of swap dealers and major 
swap participants. 
‘‘(k) DESIGNATION OF CHIEF COMPLIANCE OFFICER.— 
‘‘(1) IN
GENERAL.—Each swap dealer and major swap 
participant shall designate an individual to serve as a chief 
compliance officer. 
‘‘(2) DUTIES.—The chief compliance officer shall— 
‘‘(A) report directly to the board or to the senior officer 
of the swap dealer or major swap participant; 
‘‘(B) review the compliance of the swap dealer or major 
swap participant with respect to the swap dealer and major 
swap participant requirements described in this section; 
‘‘(C) in consultation with the board of directors, a body 
performing a function similar to the board, or the senior 
officer of the organization, resolve any conflicts of interest 
that may arise; 
‘‘(D) be responsible for administering each policy and 
procedure that is required to be established pursuant to 
this section; 
‘‘(E) ensure compliance with this Act (including regula-
tions) relating to swaps, including each rule prescribed 
by the Commission under this section; 
‘‘(F) establish procedures for the remediation of non-
compliance issues identified by the chief compliance officer 
through any— 
‘‘(i) compliance office review; 
‘‘(ii) look-back; 
‘‘(iii) internal or external audit finding; 
‘‘(iv) self-reported error; or 
‘‘(v) validated complaint; and
H. R. 4173—337 
‘‘(G) establish and follow appropriate procedures for 
the handling, management response, remediation, re-
testing, and closing of noncompliance issues. 
‘‘(3) ANNUAL REPORTS.— 
‘‘(A) IN GENERAL.—In accordance with rules prescribed 
by the Commission, the chief compliance officer shall 
annually prepare and sign a report that contains a descrip-
tion of— 
‘‘(i) the compliance of the swap dealer or major 
swap participant with respect to this Act (including 
regulations); and 
‘‘(ii) each policy and procedure of the swap dealer 
or major swap participant of the chief compliance 
officer (including the code of ethics and conflict of 
interest policies). 
‘‘(B) REQUIREMENTS.—A compliance report under 
subparagraph (A) shall— 
‘‘(i) accompany each appropriate financial report 
of the swap dealer or major swap participant that 
is required to be furnished to the Commission pursuant 
to this section; and 
‘‘(ii) include a certification that, under penalty of 
law, the compliance report is accurate and complete.’’. 
SEC. 732. CONFLICTS OF INTEREST. 
Section 4d of the Commodity Exchange Act (7 U.S.C. 6d) is 
amended— 
(1) by redesignating subsection (c) as subsection (e); and 
(2) by inserting after subsection (b) the following: 
‘‘(c) CONFLICTS OF INTEREST.—The Commission shall require 
that futures commission merchants and introducing brokers imple-
ment conflict-of-interest systems and procedures that— 
‘‘(1) establish structural and institutional safeguards to 
ensure that the activities of any person within the firm relating 
to research or analysis of the price or market for any commodity 
are separated by appropriate informational partitions within 
the firm from the review, pressure, or oversight of persons 
whose involvement in trading or clearing activities might poten-
tially bias the judgment or supervision of the persons; and 
‘‘(2) address such other issues as the Commission deter-
mines to be appropriate. 
‘‘(d) DESIGNATION
OF
CHIEF
COMPLIANCE
OFFICER.—Each 
futures commission merchant shall designate an individual to serve 
as its Chief Compliance Officer and perform such duties and respon-
sibilities as shall be set forth in regulations to be adopted by 
the Commission or rules to be adopted by a futures association 
registered under section 17.’’. 
SEC. 733. SWAP EXECUTION FACILITIES. 
The Commodity Exchange Act is amended by inserting after 
section 5g (7 U.S.C. 7b–2) the following: 
‘‘SEC. 5h. SWAP EXECUTION FACILITIES. 
‘‘(a) REGISTRATION.— 
‘‘(1) IN GENERAL.—No person may operate a facility for 
the trading or processing of swaps unless the facility is reg-
istered as a swap execution facility or as a designated contract 
market under this section.
H. R. 4173—338 
‘‘(2) DUAL REGISTRATION.—Any person that is registered 
as a swap execution facility under this section shall register 
with the Commission regardless of whether the person also 
is registered with the Securities and Exchange Commission 
as a swap execution facility. 
‘‘(b) TRADING AND TRADE PROCESSING.— 
‘‘(1) IN GENERAL.—Except as specified in paragraph (2), 
a swap execution facility that is registered under subsection 
(a) may— 
‘‘(A) make available for trading any swap; and 
‘‘(B) facilitate trade processing of any swap. 
‘‘(2) AGRICULTURAL SWAPS.—A swap execution facility may 
not list for trading or confirm the execution of any swap in 
an agricultural commodity (as defined by the Commission) 
except pursuant to a rule or regulation of the Commission 
allowing the swap under such terms and conditions as the 
Commission shall prescribe. 
‘‘(c) IDENTIFICATION OF FACILITY USED TO TRADE SWAPS BY 
CONTRACT MARKETS.—A board of trade that operates a contract 
market shall, to the extent that the board of trade also operates 
a swap execution facility and uses the same electronic trade execu-
tion system for listing and executing trades of swaps on or through 
the contract market and the swap execution facility, identify 
whether the electronic trading of such swaps is taking place on 
or through the contract market or the swap execution facility. 
‘‘(d) RULE-WRITING.— 
‘‘(1) The Securities and Exchange Commission and Com-
modity Futures Trading Commission may promulgate rules 
defining the universe of swaps that can be executed on a 
swap execution facility. These rules shall take into account 
the price and nonprice requirements of the counterparties to 
a swap and the goal of this section as set forth in subsection 
(e). 
‘‘(2) For all swaps that are not required to be executed 
through a swap execution facility as defined in paragraph (1), 
such trades may be executed through any other available means 
of interstate commerce. 
‘‘(3) The Securities and Exchange Commission and Com-
modity Futures Trading Commission shall update these rules 
as necessary to account for technological and other innovation. 
‘‘(e) RULE OF CONSTRUCTION.—The goal of this section is to 
promote the trading of swaps on swap execution facilities and 
to promote pre-trade price transparency in the swaps market. 
‘‘(f) CORE PRINCIPLES FOR SWAP EXECUTION FACILITIES.— 
‘‘(1) COMPLIANCE WITH CORE PRINCIPLES.— 
‘‘(A) IN GENERAL.—To be registered, and maintain reg-
istration, as a swap execution facility, the swap execution 
facility shall comply with— 
‘‘(i) the core principles described in this subsection; 
and 
‘‘(ii) any requirement that the Commission may 
impose by rule or regulation pursuant to section 8a(5). 
‘‘(B) REASONABLE
DISCRETION
OF
SWAP
EXECUTION 
FACILITY.—Unless otherwise determined by the Commis-
sion by rule or regulation, a swap execution facility
H. R. 4173—339 
described in subparagraph (A) shall have reasonable discre-
tion in establishing the manner in which the swap execu-
tion facility complies with the core principles described 
in this subsection. 
‘‘(2) COMPLIANCE WITH RULES.—A swap execution facility 
shall— 
‘‘(A) establish and enforce compliance with any rule 
of the swap execution facility, including— 
‘‘(i) the terms and conditions of the swaps traded 
or processed on or through the swap execution facility; 
and 
‘‘(ii) any limitation on access to the swap execution 
facility; 
‘‘(B) establish and enforce trading, trade processing, 
and participation rules that will deter abuses and have 
the capacity to detect, investigate, and enforce those rules, 
including means— 
‘‘(i) to provide market participants with impartial 
access to the market; and 
‘‘(ii) to capture information that may be used in 
establishing whether rule violations have occurred; 
‘‘(C) establish rules governing the operation of the 
facility, including rules specifying trading procedures to 
be used in entering and executing orders traded or posted 
on the facility, including block trades; and 
‘‘(D) provide by its rules that when a swap dealer 
or major swap participant enters into or facilitates a swap 
that is subject to the mandatory clearing requirement of 
section 2(h), the swap dealer or major swap participant 
shall be responsible for compliance with the mandatory 
trading requirement under section 2(h)(8). 
‘‘(3) SWAPS NOT READILY SUSCEPTIBLE TO MANIPULATION.— 
The swap execution facility shall permit trading only in swaps 
that are not readily susceptible to manipulation. 
‘‘(4) MONITORING OF TRADING AND TRADE PROCESSING.— 
The swap execution facility shall— 
‘‘(A) establish and enforce rules or terms and conditions 
defining, or specifications detailing— 
‘‘(i) trading procedures to be used in entering and 
executing orders traded on or through the facilities 
of the swap execution facility; and 
‘‘(ii) procedures for trade processing of swaps on 
or through the facilities of the swap execution facility; 
and 
‘‘(B) monitor trading in swaps to prevent manipulation, 
price distortion, and disruptions of the delivery or cash 
settlement process through surveillance, compliance, and 
disciplinary practices and procedures, including methods 
for conducting real-time monitoring of trading and com-
prehensive and accurate trade reconstructions. 
‘‘(5) ABILITY TO OBTAIN INFORMATION.—The swap execution 
facility shall— 
‘‘(A) establish and enforce rules that will allow the 
facility to obtain any necessary information to perform 
any of the functions described in this section; 
‘‘(B) provide the information to the Commission on 
request; and
H. R. 4173—340 
‘‘(C) have the capacity to carry out such international 
information-sharing agreements as the Commission may 
require. 
‘‘(6) POSITION LIMITS OR ACCOUNTABILITY.— 
‘‘(A) IN GENERAL.—To reduce the potential threat of 
market manipulation or congestion, especially during 
trading in the delivery month, a swap execution facility 
that is a trading facility shall adopt for each of the contracts 
of the facility, as is necessary and appropriate, position 
limitations or position accountability for speculators. 
‘‘(B) POSITION LIMITS.—For any contract that is subject 
to a position limitation established by the Commission 
pursuant to section 4a(a), the swap execution facility 
shall— 
‘‘(i) set its position limitation at a level no higher 
than the Commission limitation; and 
‘‘(ii) monitor positions established on or through 
the swap execution facility for compliance with the 
limit set by the Commission and the limit, if any, 
set by the swap execution facility. 
‘‘(7) FINANCIAL
INTEGRITY
OF
TRANSACTIONS.—The swap 
execution facility shall establish and enforce rules and proce-
dures for ensuring the financial integrity of swaps entered 
on or through the facilities of the swap execution facility, 
including the clearance and settlement of the swaps pursuant 
to section 2(h)(1). 
‘‘(8) EMERGENCY AUTHORITY.—The swap execution facility 
shall adopt rules to provide for the exercise of emergency 
authority, in consultation or cooperation with the Commission, 
as is necessary and appropriate, including the authority to 
liquidate or transfer open positions in any swap or to suspend 
or curtail trading in a swap. 
‘‘(9) TIMELY PUBLICATION OF TRADING INFORMATION.— 
‘‘(A) IN GENERAL.—The swap execution facility shall 
make public timely information on price, trading volume, 
and other trading data on swaps to the extent prescribed 
by the Commission. 
‘‘(B) CAPACITY
OF
SWAP
EXECUTION
FACILITY.—The 
swap execution facility shall be required to have the 
capacity to electronically capture and transmit trade 
information with respect to transactions executed on the 
facility. 
‘‘(10) RECORDKEEPING AND REPORTING.— 
‘‘(A) IN GENERAL.—A swap execution facility shall— 
‘‘(i) maintain records of all activities relating to 
the business of the facility, including a complete audit 
trail, in a form and manner acceptable to the Commis-
sion for a period of 5 years; 
‘‘(ii) report to the Commission, in a form and 
manner acceptable to the Commission, such informa-
tion as the Commission determines to be necessary 
or appropriate for the Commission to perform the 
duties of the Commission under this Act; and 
‘‘(iii) shall keep any such records relating to swaps 
defined in section 1a(47)(A)(v) open to inspection and 
examination by the Securities and Exchange Commis-
sion.’’
H. R. 4173—341 
‘‘(B) REQUIREMENTS.—The Commission shall adopt 
data collection and reporting requirements for swap execu-
tion facilities that are comparable to corresponding require-
ments for derivatives clearing organizations and swap data 
repositories. 
‘‘(11) ANTITRUST
CONSIDERATIONS.—Unless necessary or 
appropriate to achieve the purposes of this Act, the swap execu-
tion facility shall not— 
‘‘(A) adopt any rules or taking any actions that result 
in any unreasonable restraint of trade; or 
‘‘(B) impose any material anticompetitive burden on 
trading or clearing. 
‘‘(12) CONFLICTS OF INTEREST.—The swap execution facility 
shall— 
‘‘(A) establish and enforce rules to minimize conflicts 
of interest in its decision-making process; and 
‘‘(B) establish a process for resolving the conflicts of 
interest. 
‘‘(13) FINANCIAL RESOURCES.— 
‘‘(A) IN GENERAL.—The swap execution facility shall 
have adequate financial, operational, and managerial 
resources to discharge each responsibility of the swap 
execution facility. 
‘‘(B) DETERMINATION
OF
RESOURCE
ADEQUACY.—The 
financial resources of a swap execution facility shall be 
considered to be adequate if the value of the financial 
resources exceeds the total amount that would enable the 
swap execution facility to cover the operating costs of the 
swap execution facility for a 1-year period, as calculated 
on a rolling basis. 
‘‘(14) SYSTEM
SAFEGUARDS.—The swap execution facility 
shall— 
‘‘(A) establish and maintain a program of risk analysis 
and oversight to identify and minimize sources of oper-
ational risk, through the development of appropriate con-
trols and procedures, and automated systems, that— 
‘‘(i) are reliable and secure; and 
‘‘(ii) have adequate scalable capacity; 
‘‘(B) establish and maintain emergency procedures, 
backup facilities, and a plan for disaster recovery that 
allow for— 
‘‘(i) the timely recovery and resumption of oper-
ations; and 
‘‘(ii) the fulfillment of the responsibilities and 
obligations of the swap execution facility; and 
‘‘(C) periodically conduct tests to verify that the backup 
resources of the swap execution facility are sufficient to 
ensure continued— 
‘‘(i) order processing and trade matching; 
‘‘(ii) price reporting; 
‘‘(iii) market surveillance and 
‘‘(iv) maintenance of a comprehensive and accurate 
audit trail. 
‘‘(15) DESIGNATION OF CHIEF COMPLIANCE OFFICER.— 
‘‘(A) IN GENERAL.—Each swap execution facility shall 
designate an individual to serve as a chief compliance 
officer.
H. R. 4173—342 
‘‘(B) DUTIES.—The chief compliance officer shall— 
‘‘(i) report directly to the board or to the senior 
officer of the facility; 
‘‘(ii) review compliance with the core principles 
in this subsection; 
‘‘(iii) in consultation with the board of the facility, 
a body performing a function similar to that of a board, 
or the senior officer of the facility, resolve any conflicts 
of interest that may arise; 
‘‘(iv) be responsible for establishing and admin-
istering the policies and procedures required to be 
established pursuant to this section; 
‘‘(v) ensure compliance with this Act and the rules 
and regulations issued under this Act, including rules 
prescribed by the Commission pursuant to this section; 
and 
‘‘(vi) establish procedures for the remediation of 
noncompliance issues found during compliance office 
reviews, look backs, internal or external audit findings, 
self-reported errors, or through validated complaints. 
‘‘(C) REQUIREMENTS FOR PROCEDURES.—In establishing 
procedures under subparagraph (B)(vi), the chief compli-
ance officer shall design the procedures to establish the 
handling, management response, remediation, retesting, 
and closing of noncompliance issues. 
‘‘(D) ANNUAL REPORTS.— 
‘‘(i) IN GENERAL.—In accordance with rules pre-
scribed by the Commission, the chief compliance officer 
shall annually prepare and sign a report that contains 
a description of— 
‘‘(I) the compliance of the swap execution 
facility with this Act; and 
‘‘(II) the policies and procedures, including the 
code of ethics and conflict of interest policies, of 
the swap execution facility. 
‘‘(ii) REQUIREMENTS.—The chief compliance officer 
shall— 
‘‘(I) submit each report described in clause 
(i) with the appropriate financial report of the 
swap execution facility that is required to be sub-
mitted to the Commission pursuant to this section; 
and 
‘‘(II) include in the report a certification that, 
under penalty of law, the report is accurate and 
complete. 
‘‘(g) EXEMPTIONS.—The Commission may exempt, conditionally 
or unconditionally, a swap execution facility from registration under 
this section if the Commission finds that the facility is subject 
to comparable, comprehensive supervision and regulation on a 
consolidated basis by the Securities and Exchange Commission, 
a prudential regulator, or the appropriate governmental authorities 
in the home country of the facility. 
‘‘(h) RULES.—The Commission shall prescribe rules governing 
the regulation of alternative swap execution facilities under this 
section.’’.
H. R. 4173—343 
SEC. 734. DERIVATIVES TRANSACTION EXECUTION FACILITIES AND 
EXEMPT BOARDS OF TRADE. 
(a) IN
GENERAL.—Sections 5a and 5d of the Commodity 
Exchange Act (7 U.S.C. 7a, 7a–3) are repealed. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 2 of the Commodity Exchange Act (7 U.S.C. 
2) is amended— 
(A) in subsection (a)(1)(A), in the first sentence, by 
striking ‘‘or 5a’’; and 
(B) in paragraph (2) of subsection (g) (as redesignated 
by section 723(a)(1)(B)), by striking ‘‘section 5a of this 
Act’’ and all that follows through ‘‘5d of this Act’’ and 
inserting ‘‘section 5b of this Act’’. 
(2) Section 6(g)(1)(A) of the Securities Exchange Act of 
1934 (15 U.S.C. 78f(g)(1)(A)) is amended— 
(A) by striking ‘‘that—’’ and all that follows through 
‘‘(i) has been designated’’ and inserting ‘‘that has been 
designated’’; 
(B) by striking ‘‘; or’’ and inserting ‘‘; and’’ and 
(C) by striking clause (ii). 
(c) ABILITY TO PETITION COMMISSION.— 
(1) IN GENERAL.—Prior to the final effective dates in this 
title, a person may petition the Commodity Futures Trading 
Commission to remain subject to the provisions of section 5d 
of the Commodity Exchange Act, as such provisions existed 
prior to the effective date of this subtitle. 
(2) CONSIDERATION OF PETITION.—The Commodity Futures 
Trading Commission shall consider any petition submitted 
under paragraph (1) in a prompt manner and may allow a 
person to continue operating subject to the provisions of section 
5d of the Commodity Exchange Act for up to 1 year after 
the effective date of this subtitle. 
SEC. 735. DESIGNATED CONTRACT MARKETS. 
(a) CRITERIA FOR DESIGNATION.—Section 5 of the Commodity 
Exchange Act (7 U.S.C. 7) is amended by striking subsection (b). 
(b) CORE PRINCIPLES FOR CONTRACT MARKETS.—Section 5 of 
the Commodity Exchange Act (7 U.S.C. 7) is amended by striking 
subsection (d) and inserting the following: 
‘‘(d) CORE PRINCIPLES FOR CONTRACT MARKETS.— 
‘‘(1) DESIGNATION AS CONTRACT MARKET.— 
‘‘(A) IN GENERAL.—To be designated, and maintain a 
designation, as a contract market, a board of trade shall 
comply with— 
‘‘(i) any core principle described in this subsection; 
and 
‘‘(ii) any requirement that the Commission may 
impose by rule or regulation pursuant to section 8a(5). 
‘‘(B) REASONABLE DISCRETION OF CONTRACT MARKET.— 
Unless otherwise determined by the Commission by rule 
or regulation, a board of trade described in subparagraph 
(A) shall have reasonable discretion in establishing the 
manner in which the board of trade complies with the 
core principles described in this subsection. 
‘‘(2) COMPLIANCE WITH RULES.—
H. R. 4173—344 
‘‘(A) IN GENERAL.—The board of trade shall establish, 
monitor, and enforce compliance with the rules of the con-
tract market, including— 
‘‘(i) access requirements; 
‘‘(ii) the terms and conditions of any contracts to 
be traded on the contract market; and 
‘‘(iii) rules prohibiting abusive trade practices on 
the contract market. 
‘‘(B) CAPACITY OF CONTRACT MARKET.—The board of 
trade shall have the capacity to detect, investigate, and 
apply appropriate sanctions to any person that violates 
any rule of the contract market. 
‘‘(C) REQUIREMENT OF RULES.—The rules of the contract 
market shall provide the board of trade with the ability 
and authority to obtain any necessary information to per-
form any function described in this subsection, including 
the capacity to carry out such international information- 
sharing agreements as the Commission may require. 
‘‘(3) CONTRACTS NOT READILY SUBJECT TO MANIPULATION.— 
The board of trade shall list on the contract market only con-
tracts that are not readily susceptible to manipulation. 
‘‘(4) PREVENTION OF MARKET DISRUPTION.—The board of 
trade shall have the capacity and responsibility to prevent 
manipulation, price distortion, and disruptions of the delivery 
or cash-settlement process through market surveillance, compli-
ance, and enforcement practices and procedures, including— 
‘‘(A) methods for conducting real-time monitoring of 
trading; and 
‘‘(B) comprehensive and accurate trade reconstructions. 
‘‘(5) POSITION LIMITATIONS OR ACCOUNTABILITY.— 
‘‘(A) IN GENERAL.—To reduce the potential threat of 
market manipulation or congestion (especially during 
trading in the delivery month), the board of trade shall 
adopt for each contract of the board of trade, as is necessary 
and appropriate, position limitations or position account-
ability for speculators. 
‘‘(B) MAXIMUM ALLOWABLE POSITION LIMITATION.—For 
any contract that is subject to a position limitation estab-
lished by the Commission pursuant to section 4a(a), the 
board of trade shall set the position limitation of the board 
of trade at a level not higher than the position limitation 
established by the Commission. 
‘‘(6) EMERGENCY AUTHORITY.—The board of trade, in con-
sultation or cooperation with the Commission, shall adopt rules 
to provide for the exercise of emergency authority, as is nec-
essary and appropriate, including the authority— 
‘‘(A) to liquidate or transfer open positions in any con-
tract; 
‘‘(B) to suspend or curtail trading in any contract; 
and 
‘‘(C) to require market participants in any contract 
to meet special margin requirements. 
‘‘(7) AVAILABILITY OF GENERAL INFORMATION.—The board 
of trade shall make available to market authorities, market 
participants, and the public accurate information concerning— 
‘‘(A) the terms and conditions of the contracts of the 
contract market; and
H. R. 4173—345 
‘‘(B)(i) the rules, regulations, and mechanisms for exe-
cuting transactions on or through the facilities of the con-
tract market; and 
‘‘(ii) the rules and specifications describing the oper-
ation of the contract market’s— 
‘‘(I) electronic matching platform; or 
‘‘(II) trade execution facility. 
‘‘(8) DAILY
PUBLICATION
OF
TRADING
INFORMATION.—The 
board of trade shall make public daily information on settle-
ment prices, volume, open interest, and opening and closing 
ranges for actively traded contracts on the contract market. 
‘‘(9) EXECUTION OF TRANSACTIONS.— 
‘‘(A) IN GENERAL.—The board of trade shall provide 
a competitive, open, and efficient market and mechanism 
for executing transactions that protects the price discovery 
process of trading in the centralized market of the board 
of trade. 
‘‘(B) RULES.—The rules of the board of trade may 
authorize, for bona fide business purposes— 
‘‘(i) transfer trades or office trades; 
‘‘(ii) an exchange of— 
‘‘(I) futures in connection with a cash com-
modity transaction; 
‘‘(II) futures for cash commodities; or 
‘‘(III) futures for swaps; or 
‘‘(iii) a futures commission merchant, acting as 
principal or agent, to enter into or confirm the execu-
tion of a contract for the purchase or sale of a com-
modity for future delivery if the contract is reported, 
recorded, or cleared in accordance with the rules of 
the contract market or a derivatives clearing organiza-
tion. 
‘‘(10) TRADE INFORMATION.—The board of trade shall main-
tain rules and procedures to provide for the recording and 
safe storage of all identifying trade information in a manner 
that enables the contract market to use the information— 
‘‘(A) to assist in the prevention of customer and market 
abuses; and 
‘‘(B) to provide evidence of any violations of the rules 
of the contract market. 
‘‘(11) FINANCIAL INTEGRITY OF TRANSACTIONS.—The board 
of trade shall establish and enforce— 
‘‘(A) rules and procedures for ensuring the financial 
integrity of transactions entered into on or through the 
facilities of the contract market (including the clearance 
and settlement of the transactions with a derivatives 
clearing organization); and 
‘‘(B) rules to ensure— 
‘‘(i) the financial integrity of any— 
‘‘(I) futures commission merchant; and 
‘‘(II) introducing broker; and 
‘‘(ii) the protection of customer funds. 
‘‘(12) PROTECTION
OF
MARKETS
AND
MARKET
PARTICI-
PANTS.—The board of trade shall establish and enforce rules—
H. R. 4173—346 
‘‘(A) to protect markets and market participants from 
abusive practices committed by any party, including abu-
sive practices committed by a party acting as an agent 
for a participant; and 
‘‘(B) to promote fair and equitable trading on the con-
tract market. 
‘‘(13) DISCIPLINARY PROCEDURES.—The board of trade shall 
establish and enforce disciplinary procedures that authorize 
the board of trade to discipline, suspend, or expel members 
or market participants that violate the rules of the board of 
trade, or similar methods for performing the same functions, 
including delegation of the functions to third parties. 
‘‘(14) DISPUTE RESOLUTION.—The board of trade shall estab-
lish and enforce rules regarding, and provide facilities for alter-
native dispute resolution as appropriate for, market partici-
pants and any market intermediaries. 
‘‘(15) GOVERNANCE FITNESS STANDARDS.—The board of trade 
shall establish and enforce appropriate fitness standards for 
directors, members of any disciplinary committee, members 
of the contract market, and any other person with direct access 
to the facility (including any party affiliated with any person 
described in this paragraph). 
‘‘(16) CONFLICTS OF INTEREST.—The board of trade shall 
establish and enforce rules— 
‘‘(A) to minimize conflicts of interest in the decision- 
making process of the contract market; and 
‘‘(B) to establish a process for resolving conflicts of 
interest described in subparagraph (A). 
‘‘(17) COMPOSITION OF GOVERNING BOARDS OF CONTRACT 
MARKETS.—The governance arrangements of the board of trade 
shall be designed to permit consideration of the views of market 
participants. 
‘‘(18) RECORDKEEPING.—The board of trade shall maintain 
records of all activities relating to the business of the contract 
market— 
‘‘(A) in a form and manner that is acceptable to the 
Commission; and 
‘‘(B) for a period of at least 5 years. 
‘‘(19) ANTITRUST
CONSIDERATIONS.—Unless necessary or 
appropriate to achieve the purposes of this Act, the board 
of trade shall not— 
‘‘(A) adopt any rule or taking any action that results 
in any unreasonable restraint of trade; or 
‘‘(B) impose any material anticompetitive burden on 
trading on the contract market. 
‘‘(20) SYSTEM SAFEGUARDS.—The board of trade shall— 
‘‘(A) establish and maintain a program of risk analysis 
and oversight to identify and minimize sources of oper-
ational risk, through the development of appropriate con-
trols and procedures, and the development of automated 
systems, that are reliable, secure, and have adequate scal-
able capacity; 
‘‘(B) establish and maintain emergency procedures, 
backup facilities, and a plan for disaster recovery that 
allow for the timely recovery and resumption of operations 
and the fulfillment of the responsibilities and obligations 
of the board of trade; and
H. R. 4173—347 
‘‘(C) periodically conduct tests to verify that backup 
resources are sufficient to ensure continued order proc-
essing and trade matching, price reporting, market surveil-
lance, and maintenance of a comprehensive and accurate 
audit trail. 
‘‘(21) FINANCIAL RESOURCES.— 
‘‘(A) IN GENERAL.—The board of trade shall have ade-
quate financial, operational, and managerial resources to 
discharge each responsibility of the board of trade. 
‘‘(B) DETERMINATION
OF
ADEQUACY.—The financial 
resources of the board of trade shall be considered to be 
adequate if the value of the financial resources exceeds 
the total amount that would enable the contract market 
to cover the operating costs of the contract market for 
a 1-year period, as calculated on a rolling basis. 
‘‘(22) DIVERSITY OF BOARD OF DIRECTORS.—The board of 
trade, if a publicly traded company, shall endeavor to recruit 
individuals to serve on the board of directors and the other 
decision-making bodies (as determined by the Commission) of 
the board of trade from among, and to have the composition 
of the bodies reflect, a broad and culturally diverse pool of 
qualified candidates. 
‘‘(23) SECURITIES AND EXCHANGE COMMISSION.—The board 
of trade shall keep any such records relating to swaps defined 
in section 1a(47)(A)(v) open to inspection and examination by 
the Securities and Exchange Commission.’’. 
SEC. 736. MARGIN. 
Section 8a(7) of the Commodity Exchange Act (7 U.S.C. 12a(7)) 
is amended— 
(1) in subparagraph (C), by striking ‘‘, excepting the setting 
of levels of margin’’; 
(2) by redesignating subparagraphs (D) through (F) as sub-
paragraphs (E) through (G), respectively; and 
(3) by inserting after subparagraph (C) the following: 
‘‘(D) margin requirements, provided that the rules, 
regulations, or orders shall— 
‘‘(i) be limited to protecting the financial integrity 
of the derivatives clearing organization; 
‘‘(ii) be designed for risk management purposes 
to protect the financial integrity of transactions; and 
‘‘(iii) not set specific margin amounts;’’. 
SEC. 737. POSITION LIMITS. 
(a) AGGREGATE POSITION LIMITS.—Section 4a(a) of the Com-
modity Exchange Act (7 U.S.C. 6a(a)) is amended— 
(1) by inserting after ‘‘(a)’’ the following: 
‘‘(1) IN GENERAL.—’’; 
(2) in the first sentence, by striking ‘‘on electronic trading 
facilities with respect to a significant price discovery contract’’ 
and inserting ‘‘swaps that perform or affect a significant price 
discovery function with respect to registered entities’’; 
(3) in the second sentence— 
(A) by inserting ‘‘, including any group or class of 
traders,’’ after ‘‘held by any person’’; and 
(B) by striking ‘‘on an electronic trading facility with 
respect to a significant price discovery contract,’’ and 
inserting ‘‘swaps traded on or subject to the rules of a
H. R. 4173—348 
designated contract market or a swap execution facility, 
or swaps not traded on or subject to the rules of a des-
ignated contract market or a swap execution facility that 
performs a significant price discovery function with respect 
to a registered entity,’’; and 
(4) by adding at the end the following: 
‘‘(2) ESTABLISHMENT OF LIMITATIONS.— 
‘‘(A) IN GENERAL.—In accordance with the standards 
set forth in paragraph (1) of this subsection and consistent 
with the good faith exception cited in subsection (b)(2), 
with respect to physical commodities other than excluded 
commodities as defined by the Commission, the Commis-
sion shall by rule, regulation, or order establish limits 
on the amount of positions, as appropriate, other than 
bona fide hedge positions, that may be held by any person 
with respect to contracts of sale for future delivery or 
with respect to options on the contracts or commodities 
traded on or subject to the rules of a designated contract 
market. 
‘‘(B) TIMING.— 
‘‘(i) EXEMPT COMMODITIES.—For exempt commod-
ities, the limits required under subparagraph (A) shall 
be established within 180 days after the date of the 
enactment of this paragraph. 
‘‘(ii) AGRICULTURAL
COMMODITIES.—For agricul-
tural commodities, the limits required under subpara-
graph (A) shall be established within 270 days after 
the date of the enactment of this paragraph. 
‘‘(C) GOAL.—In establishing the limits required under 
subparagraph (A), the Commission shall strive to ensure 
that trading on foreign boards of trade in the same com-
modity will be subject to comparable limits and that any 
limits to be imposed by the Commission will not cause 
price discovery in the commodity to shift to trading on 
the foreign boards of trade. 
‘‘(3) SPECIFIC
LIMITATIONS.—In establishing the limits 
required in paragraph (2), the Commission, as appropriate, 
shall set limits— 
‘‘(A) on the number of positions that may be held 
by any person for the spot month, each other month, and 
the aggregate number of positions that may be held by 
any person for all months; and 
‘‘(B) to the maximum extent practicable, in its discre-
tion— 
‘‘(i) to diminish, eliminate, or prevent excessive 
speculation as described under this section; 
‘‘(ii) to deter and prevent market manipulation, 
squeezes, and corners; 
‘‘(iii) to ensure sufficient market liquidity for bona 
fide hedgers; and 
‘‘(iv) to ensure that the price discovery function 
of the underlying market is not disrupted. 
‘‘(4) SIGNIFICANT PRICE DISCOVERY FUNCTION.—In making 
a determination whether a swap performs or affects a signifi-
cant price discovery function with respect to regulated markets, 
the Commission shall consider, as appropriate:
H. R. 4173—349 
‘‘(A) PRICE LINKAGE.—The extent to which the swap 
uses or otherwise relies on a daily or final settlement 
price, or other major price parameter, of another contract 
traded on a regulated market based upon the same under-
lying commodity, to value a position, transfer or convert 
a position, financially settle a position, or close out a posi-
tion. 
‘‘(B) ARBITRAGE.—The extent to which the price for 
the swap is sufficiently related to the price of another 
contract traded on a regulated market based upon the 
same underlying commodity so as to permit market partici-
pants to effectively arbitrage between the markets by 
simultaneously maintaining positions or executing trades 
in the swaps on a frequent and recurring basis. 
‘‘(C) MATERIAL
PRICE
REFERENCE.—The extent to 
which, on a frequent and recurring basis, bids, offers, or 
transactions in a contract traded on a regulated market 
are directly based on, or are determined by referencing, 
the price generated by the swap. 
‘‘(D) MATERIAL LIQUIDITY.—The extent to which the 
volume of swaps being traded in the commodity is sufficient 
to have a material effect on another contract traded on 
a regulated market. 
‘‘(E) OTHER MATERIAL FACTORS.—Such other material 
factors as the Commission specifies by rule or regulation 
as relevant to determine whether a swap serves a signifi-
cant price discovery function with respect to a regulated 
market. 
‘‘(5) ECONOMICALLY EQUIVALENT CONTRACTS.— 
‘‘(A) Notwithstanding any other provision of this sec-
tion, the Commission shall establish limits on the amount 
of positions, including aggregate position limits, as appro-
priate, other than bona fide hedge positions, that may 
be held by any person with respect to swaps that are 
economically equivalent to contracts of sale for future 
delivery or to options on the contracts or commodities 
traded on or subject to the rules of a designated contract 
market subject to paragraph (2). 
‘‘(B) In establishing limits pursuant to subparagraph 
(A), the Commission shall— 
‘‘(i) develop the limits concurrently with limits 
established under paragraph (2), and the limits shall 
have similar requirements as under paragraph (3)(B); 
and 
‘‘(ii) establish the limits simultaneously with limits 
established under paragraph (2). 
‘‘(6) AGGREGATE POSITION LIMITS.—The Commission shall, 
by rule or regulation, establish limits (including related hedge 
exemption provisions) on the aggregate number or amount of 
positions in contracts based upon the same underlying com-
modity (as defined by the Commission) that may be held by 
any person, including any group or class of traders, for each 
month across— 
‘‘(A) contracts listed by designated contract markets; 
‘‘(B) with respect to an agreement contract, or trans-
action that settles against any price (including the daily 
or final settlement price) of 1 or more contracts listed
H. R. 4173—350 
for trading on a registered entity, contracts traded on a 
foreign board of trade that provides members or other 
participants located in the United States with direct access 
to its electronic trading and order matching system; and 
‘‘(C) swap contracts that perform or affect a significant 
price discovery function with respect to regulated entities. 
‘‘(7) EXEMPTIONS.—The Commission, by rule, regulation, 
or order, may exempt, conditionally or unconditionally, any 
person or class of persons, any swap or class of swaps, any 
contract of sale of a commodity for future delivery or class 
of such contracts, any option or class of options, or any trans-
action or class of transactions from any requirement it may 
establish under this section with respect to position limits.’’. 
(b) CONFORMING AMENDMENTS.—Section 4a(b) of the Com-
modity Exchange Act (7 U.S.C. 6a(b)) is amended— 
(1) in paragraph (1), by striking ‘‘or derivatives transaction 
execution facility or facilities or electronic trading facility’’ and 
inserting ‘‘or swap execution facility or facilities’’; and 
(2) in paragraph (2), by striking ‘‘or derivatives transaction 
execution facility or facilities or electronic trading facility’’ and 
inserting ‘‘or swap execution facility’’. 
(c) BONA FIDE HEDGING TRANSACTION.—Section 4a(c) of the 
Commodity Exchange Act is amended— 
(1) by inserting ‘‘(1)’’ after ‘‘(c)’’; and 
(2) by adding at the end the following: 
‘‘(2) For the purposes of implementation of subsection (a)(2) 
for contracts of sale for future delivery or options on the con-
tracts or commodities, the Commission shall define what con-
stitutes a bona fide hedging transaction or position as a trans-
action or position that— 
‘‘(A)(i) represents a substitute for transactions made 
or to be made or positions taken or to be taken at a 
later time in a physical marketing channel; 
‘‘(ii) is economically appropriate to the reduction of 
risks in the conduct and management of a commercial 
enterprise; and 
‘‘(iii) arises from the potential change in the value 
of— 
‘‘(I) assets that a person owns, produces, manufac-
tures, processes, or merchandises or anticipates 
owning, producing, manufacturing, processing, or mer-
chandising; 
‘‘(II) liabilities that a person owns or anticipates 
incurring; or 
‘‘(III) services that a person provides, purchases, 
or anticipates providing or purchasing; or 
‘‘(B) reduces risks attendant to a position resulting 
from a swap that— 
‘‘(i) was executed opposite a counterparty for which 
the transaction would qualify as a bona fide hedging 
transaction pursuant to subparagraph (A); or 
‘‘(ii) meets the requirements of subparagraph (A).’’. 
(d) EFFECTIVE DATE.—This section and the amendments made 
by this section shall become effective on the date of the enactment 
of this section.