Derivatives End-Users Clarification Act

Bill: 113-s-2976
Sponsor: full_name: Sen. Collins, Susan M. [R-ME]
Introduced: 2014-12-04
Policy area: Finance and Financial Sector
Subjects: Banking and financial institutions regulation

Commodities markets

Securities
Latest action: action_date: 2014-12-04
text: Read twice and referred to the Committee on Agriculture, Nutrition, and Forestry.

Summaries:
action_date: 2014-12-04
action_desc: Introduced in Senate
text: <p>Derivatives End-Users Clarification Act - Amends the Commodity Exchange Act and the Securities Exchange Act of 1934 to revise the treatment of affiliate transactions that may be exempt from clearing requirements to authorize such an exemption only if the affiliate enters into the swap to hedge or mitigate the commercial risk of the person that is not a financial entity (as under current law), on the condition that an appropriate credit support measure or other mechanism shall be used if the hedge or mitigation of commercial risk is addressed by entering into: (1) a swap with either a swap dealer or major swap participant, or (2) a security-based swap with a security-based swap dealer or major security-based swap participant.</p> <p> Applies this subtitle only to swaps or security-based swaps entered into after enactment of this Act. </p>

tv_txt: II 113th CONGRESS 2d Session S. 2976 IN THE SENATE OF THE UNITED STATES December 4, 2014 Ms. Collins (for herself and Ms. Klobuchar ) introduced the following bill; which was read twice and referred to the Committee on Agriculture, Nutrition, and Forestry A BILL To amend the Commodity Exchange Act and the Securities Exchange Act of 1934 to specify how clearing requirements apply to certain affiliate transactions, and for other purposes.

1. Short title This Act may be cited as the Derivatives End-Users Clarification Act . 2. Treatment of affiliate transactions (a) In general (1) Commodity Exchange Act amendment Section 2(h)(7)(D) of the Commodity Exchange Act ( 7 U.S.C. 2(h)(7)(D) ) is amended by striking clause (i) and inserting the following: (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 merchandise or manufactured goods of the person) may qualify for the exception only if the affiliate enters into the swap to hedge or mitigate the commercial risk of the person or other affiliate of the person that is not a financial entity, on the condition that if the hedge or mitigation of that commercial risk is addressed by entering into a swap with a swap dealer or major swap participant, an appropriate credit support measure or other mechanism shall be used. . (2) Securities Exchange Act of 1934 amendment Section 3C(g)(4) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78c–3(g)(4) ) is amended by striking subparagraph (A) and inserting the following: (A) In general An affiliate of a person that qualifies for an exception under this subsection (including affiliate entities predominantly engaged in providing financing for the purchase of the merchandise or manufactured goods of the person) may qualify for the exception only if the affiliate enters into the security-based swap to hedge or mitigate the commercial risk of the person or other affiliate of the person that is not a financial entity, on the condition that if the hedge or mitigation of that commercial risk is addressed by entering into a security-based swap with a security-based swap dealer or major security-based swap participant, an appropriate credit support measure or other mechanism shall be used. . (b) Applicability of credit support measure requirement The requirements of section 2(h)(7)(D)(i) of the Commodity Exchange Act ( 7 U.S.C. 2(h)(7)(D)(i) ) and section 3C(g)(4)(A) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78c–3(g)(4)(A) ) (as amended by subsection (a)) shall not apply with respect to swaps or security-based swaps, as appropriate, entered into before the date of enactment of this Act.