Title: Options Markets Stability Act
Policy area: Finance and Financial Sector

Summary:
Options Markets Stability Act
This bill revises the method of calculating the risk, for purposes of satisfying capital rules applicable to depository institutions and depository institution holding companies, of certain options cleared through a central counterparty.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5749 Introduced in House (IH)]

<DOC>






115th CONGRESS
  2d Session
                                H. R. 5749

  To require the appropriate Federal banking agencies to increase the 
risk-sensitivity of the capital treatment of certain centrally cleared 
                    options, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 10, 2018

 Mr. Hultgren introduced the following bill; which was referred to the 
                    Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
  To require the appropriate Federal banking agencies to increase the 
risk-sensitivity of the capital treatment of certain centrally cleared 
                    options, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Options Markets Stability Act''.

SEC. 2. CREDIT EXPOSURE FOR GUARANTEES OF CENTRALLY CLEARED OPTIONS.

    (a) Definitions.--In this section, the terms ``affiliate'', 
``appropriate Federal banking agency'', ``depository institution'', and 
``depository institution holding company'' have the meanings given 
those terms, respectively, in section 3 of the Federal Deposit 
Insurance Act (12 U.S.C. 1813).
    (b) Treatment of Certain Centrally Cleared Option Derivatives 
Exposures.--For purposes of calculating the counterparty credit risk 
exposure of a depository institution, depository institution holding 
company, or affiliate thereof, to a client arising from a guarantee 
provided by the depository institution, depository institution holding 
company, or affiliate thereof to a central counterparty in respect of 
the client's performance under a derivative contract cleared through 
that central counterparty pursuant to the risk-based and leverage-based 
capital rules applicable to depository institutions and depository 
institution holding companies under parts 3, 217, and 324 of title 12, 
Code of Federal Regulations, the term ``effective notional principal 
amount'' with respect to such centrally cleared derivative contract 
means the hypothetical on-balance sheet position in the underlying 
asset that would evidence the same change in fair value (measured in 
dollars) given a small change in the price of the underlying asset.
    (c) Calculation of Exposure for Centrally Cleared Derivatives.--For 
purposes of calculating the counterparty credit risk exposure of a 
depository institution, depository institution holding company, or 
affiliate thereof to a client arising from a guarantee provided by the 
depository institution, depository institution holding company, or 
affiliate thereof to a central counterparty in respect of the client's 
performance under a derivative contract cleared through that central 
counterparty pursuant to the risk-based and leverage-based capital 
rules applicable to depository institutions and depository institution 
holding companies under parts 3, 217 and 324 of title 12, Code of 
Federal Regulations, the offsetting nature of significantly and 
reliably correlated positions within a netting set must be reflected in 
a manner consistent with the risk offsets provided by the central 
counterparty.
                                 <all>