To exempt inter-affiliate swaps from certain regulatory requirements put in place by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

SECTION 1. TREATMENT OF AFFILIATE TRANSACTIONS.

    (a) Commodity Exchange Act Amendments.--Section 1a(47) of the 
Commodity Exchange Act (7 U.S.C. 1a(47)), as added by section 
721(a)(21) of the Dodd-Frank Wall Street Reform and Consumer Protection 
Act, is amended by adding at the end the following:
                    ``(G) Treatment of affiliate transactions.--
                            ``(i) In general.--For the purposes of any 
                        clearing and execution requirements under 
                        section 2(h) and any applicable margin and 
                        capital requirements of section 4s(e) and for 
                        purposes of defining `swap dealer' or `major 
                        swap participant', and reporting requirements 
                        other than those set forth in clause (ii), the 
                        term `swap' does not include any agreement, 
                        contract, or transaction that--
                                    ``(I) would otherwise be included 
                                as a `swap' under subparagraph (A); and
                                    ``(II) is entered into by parties 
                                that report information or prepare 
                                financial statements on a consolidated 
                                basis, or for which a company 
                                affiliated with both parties reports 
                                information or prepares financial 
                                statements on a consolidated basis.
                            ``(ii) Reporting.--All agreements, 
                        contracts, or transactions described in clause 
                        (i) shall be reported to either a swap data 
                        repository, or, if there is no swap data 
                        repository that would accept such agreements, 
                        contracts, or transactions, to the Commission 
                        pursuant to section 4r, or to a swap data 
                        repository or to the Commission pursuant to 
                        section 2(h)(5), within such time period as the 
                        Commission may by rule or regulation prescribe. 
                        Nothing in this subparagraph shall prohibit the 
                        Commission from establishing public reporting 
                        requirements for covered transactions between 
                        affiliates as described in sections 23A and 23B 
                        of the Federal Reserve Act in a manner 
                        consistent with rules governing the treatment 
                        of such covered transactions pursuant to 
                        section 2(a)(13) of this Act.
                            ``(iii) Protection of insurance funds.--
                        Nothing in this subparagraph shall be construed 
                        to prevent the regulator of a Federal or State 
                        insurance fund or guaranty fund from exercising 
                        its other existing authority to protect the 
                        integrity of such a fund, except that such 
                        regulator shall not subject agreements, 
                        contracts, or transactions described in clause 
                        (i) to clearing and execution requirements 
                        under section 2 of this Act, to any applicable 
                        margin and capital requirements of section 
                        4s(e) of this Act, or to reporting requirements 
                        of title VII of Public Law 111-203 other than 
                        those set forth in clause (ii) of this 
                        subparagraph.
                            ``(iv) Preservation of federal reserve act 
                        authority.--Nothing in this subparagraph shall 
                        exempt a transaction described in this 
                        subparagraph from sections 23A or 23B of the 
                        Federal Reserve Act or implementing regulations 
                        thereunder.
                            ``(v) Preservation of federal and state 
                        regulatory authorities.--Nothing in this 
                        subparagraph shall affect the Federal banking 
                        agencies' safety-and-soundness authorities over 
                        banks established in law other than title VII 
                        of Public Law 111-203 or the authorities of 
                        State insurance regulators over insurers, 
                        including the authority to impose capital 
                        requirements with regard to swaps. For purposes 
                        of this clause, the term `bank' shall be 
                        defined pursuant to section 3(a)(6) of the 
                        Securities Exchange Act of 1934, `insurer' 
                        shall be defined pursuant to title V of Public 
                        Law 111-203, and `swap' shall be defined 
                        pursuant to title VII of Public Law 111-203.
                            ``(vi) Prevention of evasion.--The 
                        Commission may prescribe rules under this 
                        subparagraph (and issue interpretations of such 
                        rules) as determined by the Commission to be 
                        necessary to include in the definition of swaps 
                        under this paragraph any agreement, contract, 
                        or transaction that has been structured to 
                        evade the requirements of this Act applicable 
                        to swaps.''.
    (b) Securities Exchange Act of 1934 Amendments.--Section 3(a)(68) 
of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(68)), as added 
by section 761(a)(6) of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act, is amended by adding at the end the following:
                    ``(F) Treatment of affiliate transactions.--
                            ``(i) In general.--For the purposes of any 
                        clearing and execution requirements under 
                        section 3C and any applicable margin and 
                        capital requirements of section 15F(e), and for 
                        purposes of defining `security-based swap 
                        dealer' or a `major security-based swap 
                        participant', and reporting requirements other 
                        than those set forth in clause (ii), the term 
                        `security-based swap' does not include any 
                        agreement, contract, or transaction that--
                                    ``(I) would otherwise be included 
                                as a `security-based swap' under 
                                subparagraph (A); and
                                    ``(II) is entered into by parties 
                                that report information or prepare 
                                financial statements on a consolidated 
                                basis, or for which a company 
                                affiliated with both parties reports 
                                information or prepares financial 
                                statements on a consolidated basis.
                            ``(ii) Reporting.--All agreements, 
                        contracts, or transactions described in clause 
                        (i) shall be reported to either a security-
                        based swap data repository, or, if there is no 
                        security-based swap data repository that would 
                        accept such agreements, contracts, or 
                        transactions, to the Commission pursuant to 
                        section 13A, within such time period as the 
                        Commission may by rule or regulation prescribe.
                            ``(iii) Preservation of federal reserve act 
                        authority.--Nothing in this subparagraph shall 
                        exempt a transaction described in this 
                        subparagraph from sections 23A or 23B of the 
                        Federal Reserve Act or implementing regulations 
                        thereunder.
                            ``(iv) Protection of insurance funds.--
                        Nothing in this subparagraph shall be construed 
                        to prevent the regulator of a Federal or State 
                        insurance fund or guaranty fund from exercising 
                        its other existing authority to protect the 
                        integrity of such a fund, except that such 
                        regulator shall not subject security-based swap 
                        transactions between affiliated companies to 
                        clearing and execution requirements under 
                        section 3C, to any applicable margin and 
                        capital requirements of section 15F(e), or to 
                        reporting requirements of title VII of Public 
                        Law 111-203 other than those set forth in 
                        clause (ii).
                            ``(v) Preservation of federal and state 
                        regulatory authorities.--Nothing in this 
                        subparagraph shall affect the Federal banking 
                        agencies' safety-and-soundness authorities over 
                        banks established in law other than title VII 
                        of Public Law 111-203 or the authorities of 
                        State insurance regulators over insurers, 
                        including the authority to impose capital 
                        requirements with regard to security-based 
                        swaps. For purposes of this clause, the term 
                        `bank' shall be defined pursuant to section 
                        3(a)(6) of the Securities Exchange Act of 1934, 
                        `insurer' shall be defined pursuant to title V 
                        of Public Law 111-203, and `security-based 
                        swap' shall be defined pursuant to title VII of 
                        Public Law 111-203.
                            ``(vi) Prevention of evasion.--The 
                        Commission may prescribe rules under this 
                        subparagraph (and issue interpretations of such 
                        rules) as determined by the Commission to be 
                        necessary to include in the definition of 
                        security-based swap under this paragraph any 
                        agreement, contract, or transaction that has 
                        been structured to evade the requirements of 
                        this Act applicable to security-based swaps.''.

SEC. 2. IMPLEMENTATION.

    The amendments made by this Act to the Commodity Exchange Act shall 
be implemented--
            (1) without regard to--
                    (A) chapter 35 of title 44, United States Code; and
                    (B) the notice and comment provisions of section 
                553 of title 5, United States Code;
            (2) through the promulgation of an interim final rule, 
        pursuant to which public comment will be sought before a final 
        rule is issued, and
            (3) such that paragraph (1) shall apply solely to changes 
        to rules and regulations, or proposed rules and regulations, 
        that are limited to and directly a consequence of such 
        amendments.

            Passed the House of Representatives March 26, 2012.

            Attest:

                                                 KAREN L. HAAS,

                                                                 Clerk.

Summary: (Sec. 1) Amends the Commodity Exchange Act (CEA), as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), to exclude from the meaning of the term "swap," for purposes of clearing and execution requirements, capital and margin requirements, and for purposes of defining a swap dealer or major swap participant, any agreement, contract, or transaction that: (1) would otherwise be included as a "swap"; and (2) is entered into by parties that report information or prepare financial statements on a consolidated basis, or for which a company affiliated with both parties reports information or prepares financial statements on a consolidated basis.

Requires that such exempted agreements, contracts, or transactions be reported to either a swap data repository, or, if no such repository would accept them, to the Commodity Futures Trading Commission (CFTC) within the time period prescribed by the CFTC.

Retains federal or state regulatory authority to protect the integrity of an insurance fund or guaranty fund. Prohibits the regulator of such a fund, however, from subjecting agreements, contracts, or transactions between affiliated companies to specified clearing, capital and margin requirements, or reporting requirements of the Wall Street Transparency and Accountability Act of 2010 (WSTAA) (title VII of Dodd-Frank).

States that such transactions, however, are not exempt from regulation under the Federal Reserve Act (FRA) with respect to transactions among banking affiliates.

Preserves the safety-and-soundness authorities of the federal banking agencies, other than the authorities set forth in WSTAA.

Authorizes the CFTC to prescribe rules that include in the definition of swaps any agreement, contract, or transaction that has been structured to evade CEA requirements applicable to swaps.

Amends the Securities Exchange Act of 1934 (SEA), as amended by Dodd-Frank, to exclude from the meaning of the term "security-based swap," for purposes of clearing and execution requirements, capital and margin requirements, and for purposes of defining a security-based swap dealer or major security-based swap participant, any agreement, contract, or transaction that: (1) would otherwise be included as a "security-based swap"; and (2) is entered into by parties that report information or prepare financial statements on a consolidated basis, or for which a company affiliated with both parties reports information or prepares financial statements on a consolidated basis.

Requires that such exempted agreements, contracts, or transactions be reported to either a security-based swap data repository, or, if no such repository would accept them, to the Securities and Exchange Commission (SEC) within the time period prescribed by the SEC.

States that such transactions, however, are not exempt from regulation under the FRA with respect to transactions among banking affiliates.

Retains federal or state regulatory authority to protect the integrity of an insurance fund or guaranty fund. Prohibits the regulator of such a fund, however, from subjecting security-based swap transactions between affiliated companies to specified clearing and execution requirements, capital and margin requirements, or reporting requirements of the WSTAA.

Preserves the safety-and-soundness authorities of the federal banking agencies or state insurance regulators to impose capital requirements with regard to security-based swaps, other than the authorities set forth in WSTAA.

Authorizes the SEC to prescribe rules that include in the definition of security-based swaps any agreement, contract, or transaction that has been structured to evade SEA requirements applicable to security-based swaps.

(Sec. 2) Requires that the amendments to CEA made by this Act be implemented: (1) without regard to federal information policy requirements or the notice and comment requirements of federal administrative procedure; and (2) through promulgation of an interim final rule, pursuant to which public comment will be sought before a final rule is issued.

Limits the disregard of such federal information policy and notice and comment requirements solely to changes to rules and regulations, or proposed rule and regulations, that are limited to, and directly a consequence of, the amendments to CEA made by this Act.