Title: Swap Trading Improvement Act
Policy area: Finance and Financial Sector

Summary:
Swap Trading Improvement Act
This bill revises provisions regarding swap execution facilities (i.e., trading platforms for speculators exchanging the benefit or liability of two financial instruments).
The bill eliminates the requirement that swap execution facilities must adopt position limitations or position accountability for speculators.
The bill allows a swap execution facility to delegate certain core functions to a third party. Currently, these functions may only be delegated to other registered entities.
Additionally, the bill revises the required adequate financial resources of a swap execution facility. Currently, a facility must be able to cover the operating costs of a one year period. The bill requires the facility to cover the greater amount of the operating costs of a 90 day period, or to enable an orderly wind down of its operations.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4717 Introduced in House (IH)]

<DOC>






116th CONGRESS
  1st Session
                                H. R. 4717

    To improve swap execution facility administration, swap entity 
                  compliance, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 17, 2019

 Mr. Crawford (for himself and Mr. Austin Scott of Georgia) introduced 
 the following bill; which was referred to the Committee on Agriculture

_______________________________________________________________________

                                 A BILL


 
    To improve swap execution facility administration, swap entity 
                  compliance, 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 ``Swap Trading Improvement Act''.

SEC. 2. SIMPLIFICATION OF SWAP DATA AGGREGATION REQUIREMENTS.

    (a) Obligations for Designated Contract Markets.--Section 5(d)(5) 
of the Commodity Exchange Act (7 U.S.C. 7(d)(5)) is amended--
            (1) in subparagraph (A), by inserting ``that is not a swap 
        contract'' after ``for each contract of the board of trade''; 
        and
            (2) in subparagraph (B), by inserting ``that is not a swap 
        contract'' after ``contract''.
    (b) Obligations for Swap Execution Facilities.--Section 5h(f)(4)(B) 
of such Act (7 U.S.C. 7b-3(f)(4)(B)) is amended by striking ``in 
swaps'' and inserting ``activity in swaps occurring on the swap 
execution facility''.
    (c) Cross-Facility Data Aggregation Relief.--Section 5h(f) of such 
Act (7 U.S.C. 7b-3(f)) is amended by striking paragraph (6).

SEC. 3. SWAP ENTITY ADMINISTRATIVE IMPROVEMENTS.

    (a) Authority of Registered Entities To Use Third-Party Service 
Providers.--Section 5c(b) of the Commodity Exchange Act (7 U.S.C. 7a-
2(b)) is amended to read as follows:
    ``(b) Delegation of Functions Under Core Principles.--
            ``(1) In general.--A registered entity may comply with any 
        applicable core principle through delegation of any relevant 
        function to a third-party service provider.
            ``(2) Responsibility.--A registered entity that delegates a 
        function under paragraph (1) shall remain responsible for 
        carrying out the function.
            ``(3) Noncompliance.--If a registered entity that delegates 
        a function under paragraph (1) becomes aware that the function 
        is not being performed as required under this Act, the 
        registered entity shall promptly take steps to address the 
        noncompliance.''.
    (b) Registration of Swap Execution Facilities.--Section 5h(a)(1) of 
such Act (7 U.S.C. 7b-3(a)(1)) is amended by striking ``or 
processing''.
    (c) Core Principles for Swap Execution Facilities.--
            (1) Modification of emergency authority requirements.--
        Section 5h(f)(8) of such Act (7 U.S.C. 7b-3(f)(8)) is amended 
        by striking all that follows ``cooperation with the 
        Commission'' and inserting ``or other registered entities, as 
        is necessary and appropriate, to facilitate the liquidation or 
        transfer of open positions in any swap, or to suspend or 
        curtail trading in a swap.''.
            (2) Reduction of operating capital requirement.--Section 
        5h(f)(13)(B) of such Act (7 U.S.C. 7b-3(f)(13)(B)) is amended 
        by striking ``1-year period, as calculated on a rolling 
        basis,'' and inserting ``90-day period, as calculated on a 
        rolling basis, or conduct an orderly wind-down of its 
        operations, whichever is greater.''.

SEC. 4. SIMPLIFICATION OF SWAP EXECUTION FACILITY CHIEF COMPLIANCE 
              OFFICER OBLIGATIONS.

    Section 5h(f)(15) of the Commodity Exchange Act (7 U.S.C. 7b-
3(f)(15)) is amended--
            (1) in subparagraph (A), by adding at the end the 
        following: ``The individual may also perform other 
        responsibilities for the swap execution facility.'';
            (2) in subparagraph (B)--
                    (A) in clause (i), by inserting ``, to a committee 
                of the board,'' after ``directly to the board'';
                    (B) by striking clauses (iii) through (v) and 
                inserting the following:
                            ``(iii) establish and administer policies 
                        and procedures that are reasonably designed to 
                        resolve any conflicts of interest that may 
                        arise;
                            ``(iv) establish and administer policies 
                        and procedures that reasonably 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''; and
                    (C) by redesignating clause (vi) as clause (v);
            (3) in subparagraph (C), by striking ``(B)(vi)'' and 
        inserting ``(B)(v)''; and
            (4) in subparagraph (D)--
                    (A) in clause (i)--
                            (i) by striking ``In accordance with rules 
                        prescribed by the Commission, the'' and 
                        inserting ``The''; and
                            (ii) by striking ``and sign''; and
                    (B) in clause (ii)--
                            (i) in the matter preceding subclause (I), 
                        by inserting ``or senior officer'' after 
                        ``officer'';
                            (ii) by amending subclause (I) to read as 
                        follows:
                                    ``(I) submit each report described 
                                in clause (i) to the Commission; and''; 
                                and
                            (iii) in subclause (II), by inserting 
                        ``materially'' before ``accurate''.

SEC. 5. CLARIFICATION OF CFTC AUTHORITY OVER SWAPS ENTITIES.

    (a) Section 6b of the Commodity Exchange Act (7 U.S.C. 13a) is 
amended by inserting ``or section 5h'' after ``sections 5 through 5c''.
    (b) Section 8a of such Act (7 U.S.C. 12a) is amended--
            (1) in paragraph (7)(A), by inserting ``or swap contracts'' 
        after ``contracts of sale''; and
            (2) in paragraph (9), by striking ``futures contract'' and 
        inserting ``contract of sale for future delivery or swap 
        contract'' each place it occurs.
    (c) Section 15(b) of such Act (7 U.S.C. 19(b)) is amended by 
striking ``contract market'' and inserting ``registered entity''.

SEC. 6. TECHNICAL CORRECTION.

    Section 5h(h) of the Commodity Exchange Act (7 U.S.C. 7b-3)(h)) is 
amended by striking ``alternative''.
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