113 S474 IS: Swaps Regulatory Improvement Act U.S. Senate 2013-03-06 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

II 113th CONGRESS 1st Session S. 474 IN THE SENATE OF THE UNITED STATES March 6, 2013 Mrs. Hagan (for herself, Mr. Toomey, Mr. Warner, and Mr. Johanns) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To amend provisions in section 716 of the Dodd-Frank Wall Street Reform and Consumer Protection Act relating to Federal assistance for swaps entities.

1.

Short title

This Act may be cited as the Swaps Regulatory Improvement Act.

2.

Reform of prohibition on swap activity assistance

Section 716 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (15 U.S.C. 8305) is amended— (1)in subsection (b)— (A)in paragraph (2)(B), by striking insured depository institution and inserting covered depository institution; and (B)by adding at the end the following: (3)

Covered depository institution

The term covered depository institution means— (A)an insured depository institution, as that term is defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813); and (B)a United States uninsured branch or agency of a foreign bank. ; (2)in subsection (c)— (A)in the heading for such subsection, by striking insured and inserting covered; (B)by striking an insured and inserting a covered; (C)by striking such insured and inserting such covered; and (D)by striking or savings and loan holding company and inserting savings and loan holding company, or foreign banking organization (as such term is defined under Regulation K of the Board of Governors of the Federal Reserve System (12 C.F.R. 211.21(o))); (3)by amending subsection (d) to read as follows: (d)

Only bona fide hedging and traditional bank activities permitted

(1)

In general

The prohibition in subsection (a) shall not apply to any covered depository institution that limits its swap and security-based swap activities to the following: (A)

Hedging and other similar risk mitigation activities

Hedging and other similar risk mitigating activities directly related to the covered depository institution's activities. (B)

Non-structured finance swap activities

Acting as a swaps entity for swaps or security-based swaps other than a structured finance swap. (C)

Certain structured finance swap activities

Acting as a swaps entity for swaps or security-based swaps that are structured finance swaps, if— (i)such structured finance swaps are undertaken for hedging or risk management purposes; or (ii)each asset-backed security underlying such structured finance swaps is of a credit quality and of a type or category with respect to which the prudential regulators have jointly adopted rules authorizing swap or security-based swap activity by covered depository institutions. (2)

Definitions

For purposes of this subsection: (A)

Structured finance swap

The term structured finance swap means a swap or security-based swap based on an asset-backed security (or group or index primarily comprised of asset-backed securities). (B)

Asset-backed security

The term asset-backed security has the meaning given such term under section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)). ; (4)in subsection (e), by striking an insured and inserting a covered; and (5)in subsection (f)— (A)by striking an insured depository and inserting a covered depository; and (B)by striking the insured depository each place such term appears and inserting the covered depository.