[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3795 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 3795

     To enact the Over-the-Counter Derivatives Markets Act of 2009.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 13, 2009

  Mr. Frank of Massachusetts introduced the following bill; which was 
referred to the Committee on Financial Services, and in addition to the 
Committee on Agriculture, for a period to be subsequently determined by 
the Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
     To enact the Over-the-Counter Derivatives Markets Act of 2009.

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

  TITLE I--IMPROVEMENTS TO REGULATION OF OVER-THE-COUNTER DERIVATIVES 
                                MARKETS

SECTION 101. SHORT TITLE.

    This title may be cited as the ``Over-the-Counter Derivatives 
Markets Act of 2009''.

                 Subtitle A--Regulation of Swap Markets

SEC. 111. DEFINITIONS.

    (a) Amendments to Definitions in the Commodity Exchange Act.--
Section 1a of the Commodity Exchange Act (7 U.S.C. 1a) is amended--
            (1) by redesignating paragraphs (9) through (34) as 
        paragraphs (10) through (35), respectively;
            (2) by adding after paragraph (8) the following:
            ``(9) Derivative.--The term `derivative' means--
                    ``(A) a contract of sale of a commodity for future 
                delivery; or
                    ``(B) a swap.'';
            (3) by redesignating paragraph (35) (as redesignated by 
        subsection (a)) as paragraph (36);
            (4) by adding after paragraph (34) (as redesignated by 
        subsection (a)) the following:
            ``(35) Swap.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `swap' means any agreement, 
                contract, or transaction that--
                            ``(i) is a put, call, cap, floor, collar, 
                        or similar option of any kind for the purchase 
                        or sale of, or based on the value of, one or 
                        more interest or other rates, currencies, 
                        commodities, securities, instruments of 
                        indebtedness, indices, quantitative measures, 
                        or other financial or economic interests or 
                        property of any kind;
                            ``(ii) provides for any purchase, sale, 
                        payment, or delivery (other than a dividend on 
                        an equity security) that is dependent on the 
                        occurrence, non-occurrence, or the extent of 
                        the occurrence of an event or contingency 
                        associated with a potential financial, 
                        economic, or commercial consequence;
                            ``(iii) provides on an executory basis for 
                        the exchange, on a fixed or contingent basis, 
                        of one or more payments based on the value or 
                        level of one or more interest or other rates, 
                        currencies, commodities, securities, 
                        instruments of indebtedness, indices, 
                        quantitative measures, or other financial or 
                        economic interests or property of any kind, or 
                        any interest therein or based on the value 
                        thereof, and that transfers, as between the 
                        parties to the transaction, in whole or in 
                        part, the financial risk associated with a 
                        future change in any such value or level 
                        without also conveying a current or future 
                        direct or indirect ownership interest in an 
                        asset (including any enterprise or investment 
                        pool) or liability that incorporates the 
                        financial risk so transferred, including any 
                        agreement, contract, or transaction commonly 
                        known as an interest rate swap, a rate floor, 
                        rate cap, rate collar, cross-currency rate 
                        swap, basis swap, currency swap, total return 
                        swap, equity index swap, equity swap, debt 
                        index swap, debt swap, credit spread, credit 
                        default swap, credit swap, weather swap, energy 
                        swap, metal swap, agricultural swap, emissions 
                        swap, or commodity swap;
                            ``(iv) is an agreement, contract, or 
                        transaction that is, or in the future becomes, 
                        commonly known to the trade as a swap; or
                            ``(v) is any combination or permutation of, 
                        or option on, any agreement, contract, or 
                        transaction described in any of clauses (i) 
                        through (iv).
                    ``(B) Exclusions.--The term `swap' does not 
                include:
                            ``(i) any contract of sale of a commodity 
                        for future delivery or security futures product 
                        traded on or subject to the rules of any board 
                        of trade designated as a contract market under 
                        section 5 or 5f;
                            ``(ii) any sale of a nonfinancial commodity 
                        for deferred shipment or delivery, so long as 
                        such transaction is physically settled;
                            ``(iii) any put, call, straddle, option, or 
                        privilege on any security, certificate of 
                        deposit, or group or index of securities, 
                        including any interest therein or based on the 
                        value thereof, that is subject to the 
                        Securities Act of 1933 (15 U.S.C. 77a et seq.) 
                        and the Securities Exchange Act of 1934 (15 
                        U.S.C. 78a et seq.);
                            ``(iv) any put, call, straddle, option, or 
                        privilege relating to foreign currency entered 
                        into on a national securities exchange 
                        registered pursuant to section 6(a) of the 
                        Securities Exchange Act of 1934 (15 U.S.C. 
                        78f(a));
                            ``(v) any agreement, contract, or 
                        transaction providing for the purchase or sale 
                        of one or more securities on a fixed basis that 
                        is subject to the Securities Act of 1933 (15 
                        U.S.C. 77a et seq.) and the Securities Exchange 
                        Act of 1934 (15 U.S.C. 78a et seq.);
                            ``(vi) any agreement, contract, or 
                        transaction providing for the purchase or sale 
                        of one or more securities on a contingent basis 
                        that is subject to the Securities Act of 1933 
                        (15 U.S.C. 77a et seq.) and the Securities 
                        Exchange Act of 1934 (15 U.S.C. 78a et seq.), 
                        unless such agreement, contract, or transaction 
                        predicates such purchase or sale on the 
                        occurrence of a bona fide contingency that 
                        might reasonably be expected to affect or be 
                        affected by the creditworthiness of a party 
                        other than a party to the agreement, contract, 
                        or transaction;
                            ``(vii) any note, bond, or evidence of 
                        indebtedness that is a security as defined in 
                        section 2(a)(1) of the Securities Act of 1933 
                        (15 U.S.C. 77b(a)(1));
                            ``(viii) any agreement, contract, or 
                        transaction that is--
                                    ``(I) based on a security; and
                                    ``(II) entered into directly or 
                                through an underwriter (as defined in 
                                section 2(a)(11) of the Securities Act 
                                of 1933) (15 U.S.C. 77b(a)(11)) by the 
                                issuer of such security for the 
                                purposes of raising capital, unless 
                                such agreement, contract, or 
                                transaction is entered into to manage a 
                                risk associated with capital raising;
                            ``(ix) any foreign exchange swap;
                            ``(x) any foreign exchange forward;
                            ``(xi) any agreement, contract, or 
                        transaction a counterparty of which is a 
                        Federal Reserve bank or the United States 
                        Government, or an agency of the United States 
                        Government that is expressly backed by the full 
                        faith and credit of the United States; and
                            ``(xii) any security-based swap, other than 
                        a security-based swap as described in paragraph 
                        (38)(C).
                    ``(C) Rule of construction regarding master 
                agreements.--The term `swap' shall be construed to 
                include a master agreement that provides for an 
                agreement, contract, or transaction that is a swap 
                pursuant to subparagraph (A), together with all 
                supplements to any such master agreement, without 
                regard to whether the master agreement contains an 
                agreement, contract, or transaction that is not a swap 
                pursuant to subparagraph (A), except that the master 
                agreement shall be considered to be a swap only with 
                respect to each agreement, contract, or transaction 
                under the master agreement that is a swap pursuant to 
                subparagraph (A).'';
            (5) in paragraph (13) (as redesignated by subsection (a))--
                    (A) in subparagraph (A)--
                            (i) in clause (vii), by striking 
                        ``$25,000,000'' and inserting ``$50,000,000''; 
                        and
                            (ii) in clause (xi), by striking ``total 
                        assets in an amount'' and inserting ``amounts 
                        invested on a discretionary basis''; and
                    (B) in paragraph (C), by striking ``determines'' 
                and inserting ``and the Securities and Exchange 
                Commission may jointly determine'';
            (6) in paragraph (30) (as redesignated by subsection (a)), 
        by--
                    (A) redesignating subparagraph (E) as subparagraph 
                (G);
                    (B) in subparagraph (D), by striking ``and''; and
                    (C) inserting after subparagraph (D) the following:
                    ``(E) a swap execution facility registered under 
                section 5h;
                    ``(F) a swap repository; and'';
            (7) by adding after paragraph (36) (as redesignated by 
        subsection (c)) the following:
            ``(37) Board.--The term `Board' means the Board of 
        Governors of the Federal Reserve System.'';
            (8) by adding after paragraph (37) the following:
            ``(38) Security-based swap.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `security-based swap' means 
                any agreement, contract, or transaction that would be a 
                swap under paragraph (35) (without regard to paragraph 
                (35)(B)(xii)), and that--
                            ``(i) is based on an index that is a 
                        narrow-based security index, including any 
                        interest therein or based on the value thereof;
                            ``(ii) is based on a single security or 
                        loan, including any interest therein or based 
                        on the value thereof; or
                            ``(iii) is based on the occurrence, non-
                        occurrence, or extent of the occurrence of an 
                        event relating to a single issuer of a security 
                        or the issuers of securities in a narrow-based 
                        security index, provided that such event must 
                        directly affect the financial statements, 
                        financial condition, or financial obligations 
                        of the issuer.
                    ``(B) Exclusion.--The term `security-based swap' 
                does not include any agreement, contract, or 
                transaction that meets the definition of security-based 
                swap only because it references or is based upon a 
                government security.
                    ``(C) Mixed swap.--The term `security-based swap' 
                includes any agreement, contract, or transaction that 
                is as described in subparagraph (A) and also is based 
                on the value of one or more interest or other rates, 
                currencies, commodities, instruments of indebtedness, 
                indices, quantitative measures, other financial or 
                economic interest or property of any kind (other than a 
                single security or a narrow-based security index), or 
                the occurrence, non-occurrence, or the extent of the 
                occurrence of an event or contingency associated with a 
                potential financial, economic, or commercial 
                consequence (other than an event described in 
                subparagraph (A)(iii)).
                    ``(D) Rule of construction regarding master 
                agreements.--The term `security-based swap' shall be 
                construed to include a master agreement that provides 
                for an agreement, contract, or transaction that is a 
                security-based swap pursuant to subparagraph (A), 
                together with all supplements to any such master 
                agreement, without regard to whether the master 
                agreement contains an agreement, contract, or 
                transaction that is not a security-based swap pursuant 
                to subparagraph (A), except that the master agreement 
                shall be considered to be a security-based swap only 
                with respect to each agreement, contract, or 
                transaction under the master agreement that is a 
                security-based swap pursuant to subparagraph (A).'';
            (9) by adding after paragraph (38) the following:
            ``(39) Swap dealer.--
                    ``(A) In general.--The term `swap dealer' means any 
                person engaged in the business of buying and selling 
                swaps for such person's own account, through a broker 
                or otherwise.
                    ``(B) Exception.--The term `swap dealer' does not 
                include a person that buys or sells swaps for such 
                person's own account, either individually or in a 
                fiduciary capacity, but not as a part of a regular 
                business.'';
            (10) by adding after paragraph (39) the following:
            ``(40) Major swap participant.--
                    ``(A) In general.--The term `major swap 
                participant' means any person who is not a swap dealer 
                and who maintains a substantial net position in 
                outstanding swaps, excluding positions held primarily 
                for hedging (including balance sheet hedging) or risk 
                management purposes. A person may be designated as a 
                major swap participant for 1 or more individual types 
                of swaps.
                    ``(B) Definition of `substantial net position'.--
                The Commission and the Securities and Exchange 
                Commission shall jointly define by rule or regulation 
                the term `substantial net position' at a threshold that 
                the regulators determine prudent for the effective 
                monitoring, management and oversight of the financial 
                system. In the event that the regulators are unable to 
                agree upon a level within 60 days of the commencement 
                of such consultations, the Secretary of the Treasury 
                shall make such determination, which shall be binding 
                on and adopted by such regulators.'';
            (11) by adding after paragraph (40) the following:
            ``(41) Major security-based swap participant.--
                    ``(A) In general.--The term `major security-based 
                swap participant' means any person who is not a 
                security-based swap dealer and who maintains a 
                substantial net position in outstanding security-based 
                swaps, excluding positions held primarily for hedging 
                (including balance sheet hedging) or risk management 
                purposes. A person may be designated as a major 
                security-based swap participant for 1 or more 
                individual types of security-based swaps.
                    ``(B) Definition of `substantial net position'.--
                The Commission and the Securities and Exchange 
                Commission shall jointly define by rule or regulation 
                the term `substantial net position' at a threshold that 
                the regulators determine prudent for the effective 
                monitoring, management and oversight of the financial 
                system. In the event that the regulators are unable to 
                agree upon a level within 60 days of the commencement 
                of such consultations, the Secretary of the Treasury 
                shall make such determination, which shall be binding 
                on and adopted by such regulators.'';
            (12) by adding after paragraph (41) the following:
            ``(42) Appropriate federal banking agency.--The term 
        `appropriate Federal banking agency' has the same meaning as in 
        section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. 
        1813(q)).'';
            (13) by adding after paragraph (42) the following:
            ``(43) Prudential regulator.--The term `Prudential 
        Regulator' means--
                    ``(A) the Board in the case of a swap dealer, major 
                swap participant, security-based swap dealer or major 
                security-based swap participant that is--
                            ``(i) a State-chartered bank that is a 
                        member of the Federal Reserve System; or
                            ``(ii) a State-chartered branch or agency 
                        of a foreign bank;
                    ``(B) the Office of the Comptroller of the Currency 
                in the case of a swap dealer, major swap participant, 
                security-based swap dealer or major security-based swap 
                participant that is--
                            ``(i) a national bank; or
                            ``(ii) a federally chartered branch or 
                        agency of a foreign bank; and
                    ``(C) the Federal Deposit Insurance Corporation in 
                the case of a swap dealer, major swap participant, 
                security-based swap dealer or major security-based swap 
                participant that is a State-chartered bank that is not 
                a member of the Federal Reserve System.'';
            (14) by adding after paragraph (43) the following:
            ``(44) Security-based swap dealer.--
                    ``(A) In general.--The term `security-based swap 
                dealer' means any person engaged in the business of 
                buying and selling security-based swaps for such 
                person's own account, through a broker or otherwise.
                    ``(B) Exception.--The term `security-based swap 
                dealer' does not include a person that buys or sells 
                security-based swaps for such person's own account, 
                either individually or in a fiduciary capacity, but not 
                as a part of a regular business.'';
            (15) by adding after paragraph (44) the following:
            ``(45) Government security.--The term `government security' 
        has the same meaning as in section 3(a)(42) of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78c(a)(42)).'';
            (16) by adding after paragraph (45) the following:
            ``(46) Foreign exchange forward.--The term `foreign 
        exchange forward' means a transaction that solely involves the 
        exchange of 2 different currencies on a specific future date at 
        a fixed rate agreed at the inception of the contract.'';
            (17) by adding after paragraph (46) the following:
            ``(47) Foreign exchange swap.--The term `foreign exchange 
        swap' means a transaction that solely involves the exchange of 
        2 different currencies on a specific date at a fixed rate 
        agreed at the inception of the contract, and a reverse exchange 
        of the same 2 currencies at a date further in the future and at 
        a fixed rate agreed at the inception of the contract.'';
            (18) by adding after paragraph (47) the following:
            ``(48) Person associated with a security-based swap dealer 
        or major security-based swap participant.--The term `person 
        associated with a security-based swap dealer or major security-
        based swap participant' or `associated person of a security-
        based swap dealer or major security-based swap participant' 
        means any partner, officer, director, or branch manager of such 
        security-based swap dealer or major security-based swap 
        participant (or any person occupying a similar status or 
        performing similar functions), any person directly or 
        indirectly controlling, controlled by, or under common control 
        with such security-based swap dealer or major security-based 
        swap participant, or any employee of such security-based swap 
        dealer or major security-based swap participant, except that 
        any person associated with a security-based swap dealer or 
        major security-based swap participant whose functions are 
        solely clerical or ministerial shall not be included in the 
        meaning of such term other than for purposes of section 
        15F(e)(2) of the Securities Exchange Act of 1934 (15 U.S.C. 
        78o-10).'';
            (19) by adding after paragraph (48) the following:
            ``(49) Person associated with a swap dealer or major swap 
        participant.--The term `person associated with a swap dealer or 
        major swap participant' or `associated person of a swap dealer 
        or major swap participant' means any partner, officer, 
        director, or branch manager of such swap dealer or major swap 
        participant (or any person occupying a similar status or 
        performing similar functions), any person directly or 
        indirectly controlling, controlled by, or under common control 
        with such swap dealer or major swap participant, or any 
        employee of such swap dealer or major swap participant, except 
        that any person associated with a swap dealer or major swap 
        participant whose functions are solely clerical or ministerial 
        shall not be included in the meaning of such term other than 
        for purposes of section 4s(b)(6).''; and
            (20) by adding after paragraph (49) the following:
            ``(50) Swap repository.--The term `swap repository' means 
        an entity that collects and maintains the records of the terms 
        and conditions of swaps or security-based swaps entered into by 
        third parties.''.
    (b) Joint Rulemaking on Further Definition of Terms.--
            (1) In general.--The Commodity Futures Trading Commission 
        and the Securities and Exchange Commission shall jointly adopt 
        a rule further defining the terms ``swap'', ``security-based 
        swap'', ``swap dealer'', ``security-based swap dealer'', 
        ``major swap participant'',``major security-based swap 
        participant'', and ``eligible contract participant'' no later 
        than 180 days after the effective date of this Act.
            (2) Prevention of evasions.--The Commodity Futures Trading 
        Commission and the Securities and Exchange Commission may 
        prescribe rules defining the term ``swap'' or ``security-based 
        swap'' to include transactions that have been structured to 
        evade this Act.
    (c) Joint Rulemaking Under This Act.--
            (1) Uniform rules.--Rules and regulations prescribed 
        jointly under this Act by the Commodity Futures Trading 
        Commission and the Securities and Exchange Commission shall be 
        uniform.
            (2) Treasury department.--In the event that the Commodity 
        Futures Trading Commission and the Securities and Exchange 
        Commission fail to jointly prescribe uniform rules and 
        regulations under any provision of this Act in a timely manner, 
        the Secretary of the Treasury, in consultation with the 
        Commodity Futures Trading Commission and the Securities and 
        Exchange Commission, shall prescribe rules and regulations 
        under such provision. A rule prescribed by the Secretary of the 
        Treasury shall be enforced as if prescribed jointly by the 
        Commodity Futures Trading Commission and the Securities and 
        Exchange Commission and shall remain in effect until the 
        Secretary rescinds the rule or until the effective date of a 
        corresponding rule prescribed jointly by the Commodity Futures 
        Trading Commission and the Securities and Exchange Commission 
        in accordance with this section, whichever is later.
            (3) Deadline.--The Secretary of the Treasury shall adopt 
        rules and regulations under paragraph (2) within 180 days of 
        the time that the Commodity Futures Trading Commission and the 
        Securities and Exchange Commission failed to adopt uniform 
        rules and regulations.
            (4) Treatment of similar products.--In adopting joint rules 
        and regulations under this Act, the Commodity Futures Trading 
        Commission and the Securities and Exchange Commission shall 
        prescribe requirements to treat functionally or economically 
        similar products similarly.
            (5) Treatment of dissimilar products.--Nothing in this Act 
        shall be construed to require the Commodity Futures Trading 
        Commission and the Securities and Exchange Commission to adopt 
        joint rules that treat functionally or economically different 
        products identically.
            (6) Joint interpretation.--Any interpretation of, or 
        guidance regarding, a provision of this Act, shall be effective 
        only if issued jointly by the Commodity Futures Trading 
        Commission and the Securities and Exchange Commission if this 
        Act requires the Commodity Futures Trading Commission and the 
        Securities and Exchange Commission to issue joint regulations 
        to implement the provision.
    (d) Exemptions.--Section 4(c) of the Commodity Exchange Act (7 
U.S.C. 4(c)) is amended by adding at the end the following: ``The 
Commission shall not have the authority to grant exemptions from the 
swap-related provisions of the Over-the-Counter Derivatives Markets Act 
of 2009, except as expressly authorized under the provisions of that 
Act.''.

SEC. 112. JURISDICTION.

    (a) Exclusive Jurisdiction.--The first sentence of section 
2(a)(1)(A) of the Commodity Exchange Act (7 U.S.C. 2(a)(1)(A)) is 
amended--
            (1) by striking ``(C) and (D)'' and inserting ``(C), (D), 
        and (G)'';
            (2) by striking ``subsections (c) through (i)'' and 
        inserting ``subsections (c) and (f)''; and
            (3) by striking ``involving contracts of sale'' and 
        inserting ``involving swaps or contracts of sale''.
    (b) No Limitation.--Section 2(a)(1) of the Commodity Exchange Act 
(7 U.S.C. 2(a)(1)) is amended by inserting after subparagraph (F) the 
following:
                    ``(G) Nothing contained in this paragraph shall 
                supersede or limit the jurisdiction conferred on the 
                Securities and Exchange Commission or other regulatory 
                authority by, or otherwise restrict the authority of 
                the Securities and Exchange Commission or other 
                regulatory authority under, the Over-the-Counter 
                Derivatives Markets Act of 2009, including with respect 
                to a security-based swap as described in section 
                1a(38)(C) of this Act.''.
    (c) Additions.--Section 2(c)(2)(A) of the Commodity Exchange Act (7 
U.S.C. 2(c)(2)(A)) is amended--
            (1) in clause (i), by striking ``or'' at the end;
            (2) by redesignating clause (ii) as clause (iii); and
            (3) by inserting after clause (i) the following:
    ``(ii) a swap; or''.

SEC. 113. CLEARING.

    (a) Clearing Requirement.--
            (1) Sections 2(d), 2(e), 2(g), and 2(h) of the Commodity 
        Exchange Act (7 U.S.C. 2(d), 2(e), 2(g), and 2(h)) are 
        repealed.
            (2) Section 2 of the Commodity Exchange Act (7 U.S.C. 2) is 
        further amended by inserting after subsection (c) the 
        following:
    ``(d) Swaps.--Nothing in this Act (other than subsections 
(a)(1)(A), (a)(1)(B), (f), and (j), sections 4a, 4b, 4b-1, 4c(a), 
4c(b), 4o, 4r, 4s, 4t, 4u, 5b, 5c, 5h, 6(c), 6(d), 6c, 6d, 8, 8a, 9, 
12(e)(2), 12(f), 13(a), 13(b), 21, and 22(a)(4) and such other 
provisions of this Act as are applicable by their terms to registered 
entities and Commission registrants) governs or applies to a swap.
    ``(e) Limitation on Participation.--It shall be unlawful for any 
person, other than an eligible contract participant, to enter into a 
swap unless the swap is entered into on or subject to the rules of a 
board of trade designated as a contract market under section 5.''.
            (3) Section 2 of the Commodity Exchange Act (7 U.S.C. 2) is 
        further amended by inserting after subsection (i) the 
        following:
    ``(j) Clearing of Swaps.--
            ``(1) Clearing requirement.--The Commission shall monitor 
        swap activity and transaction data and by rule or regulation 
        identify specific swap contracts that it determines are 
        required to be cleared consistent with the public interest, 
        after taking into account the following factors:
                    ``(A) the existence of significant outstanding 
                notional exposures, trading liquidity and adequate 
                pricing data;
                    ``(B) the availability of one or more swap 
                clearinghouses with the rule framework, capacity, 
                operational expertise and resources, and credit support 
                infrastructure to clear the contract on terms that are 
                consistent with the material terms and trading 
                conventions on which the contract is then traded;
                    ``(C) the impact on the mitigation of systemic 
                risk, taking into account the size of the market for 
                such contract and the resources of the swap 
                clearinghouses available to clear the contract;
                    ``(D) the impact on competition; and
                    ``(E) the existence of reasonable legal certainty 
                in the event of the insolvency of the relevant swap 
                clearinghouse or one or more of its clearing members 
                with regard to the treatment of customer and swap 
                counterparty positions, funds, and property.
            ``(2) Scope of clearing functions.--The Commission shall by 
        rule or regulation define the scope of the clearing functions 
        that are necessary to satisfy the requirements of paragraph 
        (1).
            ``(3) Prevention of evasion.--The Commission and the 
        Securities and Exchange Commission shall have authority to 
        prescribe rules under this subsection, or issue interpretations 
        of such rules, as necessary to prevent evasions of this Act 
        provided that any such rules or interpretations must be issued 
        jointly to be effective.
            ``(4) Required reporting.--
                    ``(A) In general.--All swap transactions that are 
                not accepted for clearing by any derivatives clearing 
                organization shall be reported to either a swap 
                repository described in section 21 or, if there is no 
                repository that would accept the swap, to the 
                Commission pursuant to section 4r within such time 
                period as the Commission may by rule or regulation 
                prescribe.
                    ``(B) Authority of swap dealer to report.--
                Counterparties may agree which counterparty will report 
                the swap transaction. In transactions where only 1 
                counterparty is a swap dealer, the swap dealer will 
                report the transaction.
            ``(5) Transition rules.--Rules adopted by the Commission 
        under this section shall provide for the reporting of data, as 
        follows:
                    ``(A) Swaps that were entered into before the date 
                of enactment of the Over-the-Counter Derivatives 
                Markets Act of 2009 shall be reported to a registered 
                swap repository or the Commission no later than 180 
                days after the effective date of the Over-the-Counter 
                Derivatives Markets Act of 2009.
                    ``(B) Swaps that were entered into on or after the 
                date of enactment of the Over-the-Counter Derivatives 
                Markets Act of 2009 shall be reported to a registered 
                swap repository or the Commission no later than the 
                later of--
                            ``(i) 90 days after the effective date of 
                        the Over-the-Counter Derivatives Markets Act of 
                        2009; or
                            ``(ii) such other time after entering into 
                        the swap as the Commission may prescribe by 
                        rule or regulation.
            ``(6) Trade execution.--With respect to transactions 
        involving swaps subject to the requirement of paragraph (1) and 
        where both counterparties are either swap dealers or major swap 
        participants, such counterparties must either:
                    ``(A) Execute the transaction on a board of trade 
                designated as a contract market under section 5 (in 
                which event, such transaction shall be subject to 
                regulation under this Act as a transaction in a 
                contract of sale of a commodity for future delivery or 
                commodity option, as applicable);
                    ``(B) Execute the transaction on a swap execution 
                facility registered with the Commission;
                    ``(C) Execute the transaction on a foreign swap 
                execution facility that is subject to regulation as 
                such under the laws of a foreign jurisdiction; or
                    ``(D) If the transaction is not executed on an 
                entity listed in subparagraph (A), (B), or (C), comply 
                with any recordkeeping and end-of-day transaction 
                reporting requirements--
                            ``(i) as may be prescribed by the 
                        Commission with respect to commodity swaps 
                        subject to the requirements of paragraph (3); 
                        or
                            ``(ii) as may be prescribed by the relevant 
                        foreign regulator in the case of commodity 
                        swaps subject to the requirements of paragraph 
                        (3) entered into by--
                                    ``(I) a foreign swap dealer or a 
                                foreign swap market participant; or
                                    ``(II) a U.S. swap dealer or U.S. 
                                major swap participant that is entering 
                                into the commodity swap either outside 
                                of the United States, its territories 
                                and possessions or with a foreign 
                                counterparty.
            ``(7) Exchange trading.--In adopting rules and regulations, 
        the Commission shall endeavor to eliminate unnecessary 
        impediments to the trading on boards of trade designated as 
        contract markets under section 5 of contracts, agreements or 
        transactions that would be security-based swaps but for the 
        trading of such contracts, agreements or transactions on such a 
        designated contract market.
            ``(8) Exceptions.--The requirements of paragraph (1) shall 
        not apply to a swap if--
                    ``(A) no derivatives clearing organization 
                registered under this Act will accept the swap for 
                clearing; or
                    ``(B) one of the counterparties to the swap is not 
                a swap dealer or major swap participant.''.
    (b) Derivatives Clearing Organizations.--
            (1) Subsections (a) and (b) of section 5b of the Commodity 
        Exchange Act (7 U.S.C. 7a-1) are amended to read as follows:
    ``(a) Registration Requirement.--It shall be unlawful for a 
derivatives clearing organization, unless registered with the 
Commission, directly or indirectly to make use of the mails or any 
means or instrumentality of interstate commerce to perform the 
functions of a derivatives clearing organization described in section 
1a(10) of this Act with respect to--
            ``(1) a contract of sale of a commodity for future delivery 
        (or option on such a contract) or option on a commodity, in 
        each case unless the contract or option is--
                    ``(A) excluded from this Act by section 
                2(a)(1)(C)(i), 2(c), or 2(f); or
                    ``(B) a security futures product cleared by a 
                clearing agency registered with the Securities and 
                Exchange Commission under the Securities Exchange Act 
                of 1934 (15 U.S.C. 78a et seq.); or
            ``(2) a swap.
    ``(b) Voluntary Registration.--
            ``(1) Derivatives clearing organizations.--A person that 
        clears agreements, contracts, or transactions that are not 
        required to be cleared under this Act may register with the 
        Commission as a derivatives clearing organization.
            ``(2) Clearing agencies.--A derivatives clearing 
        organization may clear security-based swaps that are required 
        to be cleared by a person who is registered as a clearing 
        agency under the Securities Exchange Act of 1934 (15 U.S.C. 78a 
        et seq.).''.
            (2) Section 5b of the Commodity Exchange Act (7 U.S.C. 7a-
        1) is amended by adding at the end the following:
    ``(g) Required Registration for Banks and Clearing Agencies.--A 
person that is required to be registered as a derivatives clearing 
organization under this section shall register with the Commission 
regardless of whether the person is also a bank or a clearing agency 
registered with the Securities and Exchange Commission under the 
Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.).
    ``(h) Harmonization of Rules.--Not later than 180 days after the 
effective date of the Over-the-Counter Derivatives Markets Act of 2009, 
the Commission and the Securities and Exchange Commission shall jointly 
adopt uniform rules governing persons that are registered as 
derivatives clearing organizations for swaps under this subsection and 
persons that are registered as clearing agencies for security-based 
swaps under the Securities Exchange Act of 1934 (15 U.S.C. 78a et 
seq.).
    ``(i) Consultation.--The Commission and the Securities and Exchange 
Commission shall consult with the appropriate Federal banking agencies 
prior to adopting rules under this section with respect to swaps.
    ``(j) Exemptions.--The Commission may exempt, conditionally or 
unconditionally, a derivatives clearing organization from registration 
under this section for the clearing of swaps if the Commission finds 
that such derivatives clearing organization is subject to comparable, 
comprehensive supervision and regulation on a consolidated basis by the 
Securities and Exchange Commission, a Prudential Regulator or the 
appropriate governmental authorities in the organization's home 
country.
    ``(k) Designation of Compliance Officer.--
            ``(1) In general.--Each derivatives clearing organization 
        shall designate an individual to serve as a compliance officer.
            ``(2) Duties.--The compliance officer--
                    ``(A) shall report directly to the board or to the 
                senior officer of the derivatives clearing 
                organization; and
                    ``(B) shall--
                            ``(i) review compliance with the core 
                        principles in section 5b(c)(2);
                            ``(ii) in consultation with the board of 
                        the derivatives clearing organization, a body 
                        performing a function similar to that of a 
                        board, or the senior officer of the derivatives 
                        clearing organization, resolve any conflicts of 
                        interest that may arise;
                            ``(iii) be responsible for administering 
                        the policies and procedures required to be 
                        established pursuant to this section; and
                            ``(iv) ensure compliance with commodity 
                        laws and the rules and regulations issued 
                        thereunder, including rules prescribed by the 
                        Commission pursuant to this section; and
                    ``(C) shall establish procedures for remediation of 
                noncompliance issues found during compliance office 
                reviews, lookbacks, internal or external audit 
                findings, self-reported errors, or through validated 
                complaints. Procedures will establish the handling, 
                management response, remediation, retesting, and 
                closing of noncompliant issues.
            ``(3) Annual reports required.--The compliance officer 
        shall annually prepare and sign a report on the compliance of 
        the derivatives clearing organization with the commodity laws 
        and its policies and procedures, including its code of ethics 
        and conflict of interest policies, in accordance with rules 
        prescribed by the Commission. Such compliance report shall 
        accompany the financial reports of the derivatives clearing 
        organization that are required to be furnished to the 
        Commission pursuant to this section and shall include a 
        certification that, under penalty of law, the report is 
        accurate and complete.''.
            (3) Section 5b(c)(2) of the Commodity Exchange Act (7 
        U.S.C. 7a-1(c)(2)) is amended to read as follows:
            ``(2) Core principles for derivatives clearing 
        organizations.--
                    ``(A) In general.--To be registered and to maintain 
                registration as a derivatives clearing organization, a 
                derivatives clearing organization shall comply with the 
                core principles specified in this paragraph, and any 
                requirement that the Commission may impose by rule or 
                regulation pursuant to section 8a(5). The Commission 
                may conform the core principles to reflect evolving 
                United States and international standards. Except where 
                the Commission determines otherwise by rule or 
                regulation, a derivatives clearing organization shall 
                have reasonable discretion in establishing the manner 
                in which it complies with the core principles.
                    ``(B) Financial resources.--
                            ``(i) The derivatives clearing organization 
                        shall have adequate financial, operational, and 
                        managerial resources to discharge its 
                        responsibilities.
                            ``(ii) Financial resources shall at a 
                        minimum exceed the total amount that would--
                                    ``(I) enable the derivatives 
                                clearing organization to meet its 
                                financial obligations to its members 
                                and participants notwithstanding a 
                                default by the member or participant 
                                creating the largest financial exposure 
                                for that derivatives clearing 
                                organization in extreme but plausible 
                                market conditions; and
                                    ``(II) enable the derivatives 
                                clearing organization to cover its 
                                operating costs for a period of one 
                                year, calculated on a rolling basis.
                    ``(C) Participant and product eligibility.--
                            ``(i) The derivatives clearing organization 
                        shall establish--
                                    ``(I) appropriate admission and 
                                continuing eligibility standards 
                                (including sufficient financial 
                                resources and operational capacity to 
                                meet obligations arising from 
                                participation in the derivatives 
                                clearing organization) for members of 
                                and participants in the organization; 
                                and
                                    ``(II) appropriate standards for 
                                determining eligibility of agreements, 
                                contracts, or transactions submitted to 
                                the derivatives clearing organization 
                                for clearing.
                            ``(ii) The derivatives clearing 
                        organization shall have procedures in place to 
                        verify that participation and membership 
                        requirements are met on an ongoing basis.
                            ``(iii) The derivatives clearing 
                        organization's participation and membership 
                        requirements shall be objective, publicly 
                        disclosed, and permit fair and open access.
                            ``(iv) The rules of the derivatives 
                        clearing organization shall provide for 
                        acceptance of a standardized swap regardless of 
                        the system on which the transaction was 
                        executed.
                    ``(D) Risk management.--
                            ``(i) The derivatives clearing organization 
                        shall have the ability to manage the risks 
                        associated with discharging the 
                        responsibilities of a derivatives clearing 
                        organization through the use of appropriate 
                        tools and procedures.
                            ``(ii) The derivatives clearing 
                        organization shall measure its credit exposures 
                        to its members and participants at least once 
                        each business day and shall monitor such 
                        exposures throughout the business day.
                            ``(iii) Through margin requirements and 
                        other risk control mechanisms, a derivatives 
                        clearing organization shall limit its exposures 
                        to potential losses from defaults by its 
                        members and participants so that the operations 
                        of the derivatives clearing organization would 
                        not be disrupted and nondefaulting members or 
                        participants would not be exposed to losses 
                        that they cannot anticipate or control.
                            ``(iv) Margin required from all members and 
                        participants shall be sufficient to cover 
                        potential exposures in normal market 
                        conditions.
                            ``(v) The models and parameters used in 
                        setting margin requirements shall be risk-based 
                        and reviewed regularly.
                    ``(E) Settlement procedures.--The derivatives 
                clearing organization shall--
                            ``(i) complete money settlements on a 
                        timely basis, and not less than once each 
                        business day;
                            ``(ii) employ money settlement arrangements 
                        that eliminate or strictly limit the 
                        derivatives clearing organization's exposure to 
                        settlement bank risks, such as credit and 
                        liquidity risks from the use of banks to effect 
                        money settlements;
                            ``(iii) ensure money settlements are final 
                        when effected;
                            ``(iv) maintain an accurate record of the 
                        flow of funds associated with each money 
                        settlement;
                            ``(v) have the ability to comply with the 
                        terms and conditions of any permitted netting 
                        or offset arrangements with other clearing 
                        organizations; and
                            ``(vi) for physical settlements, establish 
                        rules that clearly state the derivatives 
                        clearing organization's obligations with 
                        respect to physical deliveries. The risks from 
                        these obligations shall be identified and 
                        managed.
                    ``(F) Treatment of funds.--
                            ``(i) The derivatives clearing organization 
                        shall have standards and procedures designed to 
                        protect and ensure the safety of member and 
                        participant funds and assets.
                            ``(ii) The derivatives clearing 
                        organization shall hold member and participant 
                        funds and assets in a manner whereby risk of 
                        loss or of delay in the derivatives clearing 
                        organization's access to the assets and funds 
                        is minimized.
                            ``(iii) Assets and funds invested by the 
                        derivatives clearing organization shall be held 
                        in instruments with minimal credit, market, and 
                        liquidity risks.
                    ``(G) Default rules and procedures.--
                            ``(i) The derivatives clearing organization 
                        shall have rules and procedures designed to 
                        allow for the efficient, fair, and safe 
                        management of events when members or 
                        participants become insolvent or otherwise 
                        default on their obligations to the derivatives 
                        clearing organization.
                            ``(ii) The derivatives clearing 
                        organization's default procedures shall be 
                        clearly stated, and they shall ensure that the 
                        derivatives clearing organization can take 
                        timely action to contain losses and liquidity 
                        pressures and to continue meeting its 
                        obligations.
                            ``(iii) The default procedures shall be 
                        publicly available.
                    ``(H) Rule enforcement.--The derivatives clearing 
                organization shall--
                            ``(i) maintain adequate arrangements and 
                        resources for the effective monitoring and 
                        enforcement of compliance with rules of the 
                        derivatives clearing organization and for 
                        resolution of disputes; and
                            ``(ii) have the authority and ability to 
                        discipline, limit, suspend, or terminate a 
                        member's or participant's activities for 
                        violations of rules of the derivatives clearing 
                        organization.
                    ``(I) System safeguards.--The derivatives clearing 
                organization shall--
                            ``(i) establish and maintain a program of 
                        risk analysis and oversight to identify and 
                        minimize sources of operational risk through 
                        the development of appropriate controls and 
                        procedures, and the development of automated 
                        systems, that are reliable, secure, and have 
                        adequate scalable capacity;
                            ``(ii) establish and maintain emergency 
                        procedures, backup facilities, and a plan for 
                        disaster recovery that allows for the timely 
                        recovery and resumption of operations and the 
                        fulfillment of the derivatives clearing 
                        organization's responsibilities and 
                        obligations; and
                            ``(iii) periodically conduct tests to 
                        verify that backup resources are sufficient to 
                        ensure continued order processing and trade 
                        matching, price reporting, market surveillance, 
                        and maintenance of a comprehensive and accurate 
                        audit trail.
                    ``(J) Reporting.--The derivatives clearing 
                organization shall provide to the Commission all 
                information necessary for the Commission to conduct 
                oversight of the derivatives clearing organization.
                    ``(K) Recordkeeping.--The derivatives clearing 
                organization shall maintain records of all activities 
                related to the business of the derivatives clearing 
                organization as a derivatives clearing organization in 
                a form and manner acceptable to the Commission for a 
                period of 5 years.
                    ``(L) Public information.--
                            ``(i) The derivatives clearing organization 
                        shall provide market participants with 
                        sufficient information to identify and evaluate 
                        accurately the risks and costs associated with 
                        using the derivatives clearing organization's 
                        services.
                            ``(ii) The derivatives clearing 
                        organization shall make information concerning 
                        the rules and operating procedures governing 
                        its clearing and settlement systems (including 
                        default procedures) available to market 
                        participants.
                            ``(iii) The derivatives clearing 
                        organization shall disclose publicly and to the 
                        Commission information concerning--
                                    ``(I) the terms and conditions of 
                                contracts, agreements, and transactions 
                                cleared and settled by the derivatives 
                                clearing organization;
                                    ``(II) clearing and other fees that 
                                the derivatives clearing organization 
                                charges its members and participants;
                                    ``(III) the margin-setting 
                                methodology and the size and 
                                composition of the financial resource 
                                package of the derivatives clearing 
                                organization;
                                    ``(IV) other information relevant 
                                to participation in the settlement and 
                                clearing activities of the derivatives 
                                clearing organization; and
                                    ``(V) daily settlement prices, 
                                volume, and open interest for all 
                                contracts settled or cleared by it.
                    ``(M) Information-sharing.--The derivatives 
                clearing organization shall--
                            ``(i) enter into and abide by the terms of 
                        all appropriate and applicable domestic and 
                        international information-sharing agreements; 
                        and
                            ``(ii) use relevant information obtained 
                        from the agreements in carrying out the 
                        clearing organization's risk management 
                        program.
                    ``(N) Antitrust considerations.--Unless appropriate 
                to achieve the purposes of this chapter, the 
                derivatives clearing organization shall avoid--
                            ``(i) adopting any rule or taking any 
                        action that results in any unreasonable 
                        restraint of trade; or
                            ``(ii) imposing any material 
                        anticompetitive burden.
                    ``(O) Governance fitness standards.--
                            ``(i) The derivatives clearing organization 
                        shall establish governance arrangements that 
                        are transparent in order to fulfill public 
                        interest requirements and to support the 
                        objectives of owners and participants.
                            ``(ii) The derivatives clearing 
                        organization shall establish and enforce 
                        appropriate fitness standards for directors, 
                        members of any disciplinary committee, and 
                        members of the derivatives clearing 
                        organization, and any other persons with direct 
                        access to the settlement or clearing activities 
                        of the derivatives clearing organization, 
                        including any parties affiliated with any of 
                        the persons described in this subparagraph.
                    ``(P) Conflicts of interest.--The derivatives 
                clearing organization shall establish and enforce rules 
                to minimize conflicts of interest in the decisionmaking 
                process of the derivatives clearing organization and 
                establish a process for resolving such conflicts of 
                interest.
                    ``(Q) Composition of the boards.--The derivatives 
                clearing organization shall ensure that the composition 
                of the governing board or committee includes market 
                participants.
                    ``(R) Legal risk.--The derivatives clearing 
                organization shall have a well-founded, transparent, 
                and enforceable legal framework for each aspect of its 
                activities.''.
            (4) Section 5b of the Commodity Exchange Act (7 U.S.C. 7a-
        1) is further amended by adding after subsection (k), as added 
        by paragraph (2), the following:
    ``(l) Reporting.--
            ``(1) In general.--A derivatives clearing organization that 
        clears swaps shall provide to the Commission all information 
        determined by the Commission to be necessary to perform its 
        responsibilities under this Act. The Commission shall adopt 
        data collection and maintenance requirements for swaps cleared 
        by derivatives clearing organizations that are comparable to 
        the corresponding requirements for swaps accepted by swap 
        repositories and swaps traded on swap execution facilities. 
        Subject to section 8, the Commission shall share such 
        information, upon request, with the Board, the Securities and 
        Exchange Commission, the appropriate Federal banking agencies, 
        the Financial Services Oversight Council, and the Department of 
        Justice or to other persons the Commission deems appropriate, 
        including foreign financial supervisors (including foreign 
        futures authorities), foreign central banks, and foreign 
        ministries.
            ``(2) Public information.--A derivatives clearing 
        organization that clears swaps shall provide to the Commission, 
        or its designee, such information as is required by, and in a 
        form and at a frequency to be determined by, the Commission, in 
        order to comply with the public reporting requirements 
        contained in section 8(j).''.
            (5) Section 8(e) of the Commodity Exchange Act (7 U.S.C. 
        12(e)) is amended in the last sentence by adding ``central bank 
        and ministries'' after ``department'' each place it appears.
    (c) Legal Certainty for Identified Banking Products.--
            (1) Repeal.--Sections 402(d), 404, 407, 408(b), and 
        408(c)(2) of the Legal Certainty for Bank Products Act of 2000 
        (7 U.S.C. 27(d), 27b, 27e, 27f(b), and 27f(c)(2)) are repealed.
            (2) Legal certainty.--Section 403 of the Legal Certainty 
        for Bank Products Act of 2000 (7 U.S.C. 27a) is amended to read 
        as follows:

``SEC. 403. EXCLUSION OF IDENTIFIED BANKING PRODUCT.

    ``(a) Exclusion.--Except as provided in subsection (b), no 
provisions of the Commodity Exchange Act (7 U.S.C. 1 et seq.) shall 
apply to, and the Commodity Futures Trading Commission and the 
Securities and Exchange Commission shall not exercise regulatory 
authority under the Commodity Exchange Act with respect to, an 
identified banking product.
    ``(b) Exception.--An appropriate Federal banking agency may except 
an identified banking product from the exclusion in subsection (a) if 
the agency determines, in consultation with the Commodity Futures 
Trading Commission and the Securities and Exchange Commission, that the 
product--
            ``(1) would meet the definition of swap in section 1a(35) 
        of the Commodity Exchange Act (7 U.S.C. 1a(35)) or security-
        based swap in section 1a(38) of the Commodity Exchange Act (7 
        U.S.C. 1a(38)); and
            ``(2) has become known to the trade as a swap or security-
        based swap, or otherwise has been structured as an identified 
        banking product for the purpose of evading the provisions of 
        the Commodity Exchange Act (7 U.S.C. 1 et seq.), the Securities 
        Act of 1933 (15 U.S.C. 77a et seq.), or the Securities Exchange 
        Act of 1934 (15 U.S.C. 78a et seq.).''.

SEC. 114. PUBLIC REPORTING OF AGGREGATE SWAP DATA.

    Section 8 of the Commodity Exchange Act (7 U.S.C. 12) is amended by 
adding after subsection (i) the following:
    ``(j) Public Reporting of Aggregate Swap Data.--
            ``(1) In general.--The Commission, or a person designated 
        by the Commission pursuant to paragraph (2), shall make 
        available to the public, in a manner that does not disclose the 
        business transactions and market positions of any person, 
        aggregate data on swap trading volumes and positions from the 
        sources set forth in paragraph (3).
            ``(2) Designee of the commission.--The Commission may 
        designate a derivatives clearing organization or a swap 
        repository to carry out the public reporting described in 
        paragraph (1).
            ``(3) Sources of information.--The sources of the 
        information to be publicly reported as described in paragraph 
        (1) are--
                    ``(A) derivatives clearing organizations pursuant 
                to section 5b(k)(2);
                    ``(B) swap repositories pursuant to section 
                21(c)(3); and
                    ``(C) reports received by the Commission pursuant 
                to section 4r.''.

SEC. 115. SWAP REPOSITORIES.

    The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by 
inserting after section 20 the following:

``SEC. 21. SWAP REPOSITORIES.

    ``(a) Registration Requirement.--
            ``(1) In general.--It shall be unlawful for any person, 
        unless registered with the Commission, directly or indirectly 
        to make use of the mails or any means or instrumentality of 
        interstate commerce to perform the functions of a swap 
        repository.
            ``(2) Inspection and examination.--Registered swap 
        repositories shall be subject to inspection and examination by 
        any representative of the Commission.
    ``(b) Standard Setting.--
            ``(1) Data identification.--The Commission shall prescribe 
        standards that specify the data elements for each swap that 
        shall be collected and maintained by each registered swap 
        repository.
            ``(2) Data collection and maintenance.--The Commission 
        shall prescribe data collection and data maintenance standards 
        for swap repositories.
            ``(3) Comparability.--The standards prescribed by the 
        Commission under this subsection shall be comparable to the 
        data standards imposed by the Commission on derivatives 
        clearing organizations that clear swaps.
    ``(c) Duties.--A swap repository shall--
            ``(1) accept data prescribed by the Commission for each 
        swap under subsection (b);
            ``(2) maintain such data in such form and manner and for 
        such period as may be required by the Commission;
            ``(3) provide to the Commission, or its designee, such 
        information as is required by, and in a form and at a frequency 
        to be determined by, the Commission, in order to comply with 
        the public reporting requirements contained in section 8(j); 
        and
            ``(4) make available, on a confidential basis pursuant to 
        section 8, all data obtained by the swap repository, including 
        individual counterparty trade and position data, to the 
        Commission, the appropriate Federal banking agencies, the 
        Financial Services Oversight Council, the Securities and 
        Exchange Commission, and the Department of Justice or to other 
        persons the Commission deems appropriate, including foreign 
        financial supervisors (including foreign futures authorities), 
        foreign central banks, and foreign ministries.
    ``(d) Required Registration for Security-based Swap Repositories.--
Any person that is required to be registered as a swap repository under 
this section shall register with the Commission regardless of whether 
that person also is registered with the Securities and Exchange 
Commission as a security-based swap repository.
    ``(e) Harmonization of Rules.--Not later than 180 days after the 
effective date of the Over-the-Counter Derivatives Markets Act of 2009, 
the Commission and the Securities and Exchange Commission shall jointly 
adopt uniform rules governing persons that are registered under this 
section and persons that are registered as security-based swap 
repositories under the Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.), including uniform rules that specify the data elements that 
shall be collected and maintained by each repository.
    ``(f) Exemptions.--The Commission may exempt, conditionally or 
unconditionally, a swap repository from the requirements of this 
section if the Commission finds that such swap repository is subject to 
comparable, comprehensive supervision and regulation on a consolidated 
basis by the Securities and Exchange Commission, a Prudential Regulator 
or the appropriate governmental authorities in the organization's home 
country.''.

SEC. 116. REPORTING AND RECORDKEEPING.

    The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by 
inserting after section 4q the following:

``SEC. 4R. REPORTING AND RECORDKEEPING FOR CERTAIN SWAPS.

    ``(a) In General.--Any person who enters into a swap and--
            ``(1) did not clear the swap in accordance with section 
        2(j)(1); and
            ``(2) did not have data regarding the swap accepted by a 
        swap repository in accordance with rules (including time 
        frames) adopted by the Commission under section 21,
shall meet the requirements in subsection (b).
    ``(b) Reports.--Any person described in subsection (a) shall--
            ``(1) make such reports in such form and manner and for 
        such period as the Commission shall prescribe by rule or 
        regulation regarding the swaps held by the person; and
            ``(2) keep books and records pertaining to the swaps held 
        by the person in such form and manner and for such period as 
        may be required by the Commission, which books and records 
        shall be open to inspection by any representative of the 
        Commission, an appropriate Federal banking agency, the 
        Securities and Exchange Commission, the Financial Services 
        Oversight Council, and the Department of Justice.
    ``(c) Identical Data.--In adopting rules under this section, the 
Commission shall require persons described in subsection (a) to report 
the same or a more comprehensive set of data than the Commission 
requires swap repositories to collect under section 21.''.

SEC. 117. REGISTRATION AND REGULATION OF SWAP DEALERS AND MAJOR SWAP 
              PARTICIPANTS.

    The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by 
inserting after section 4r (as added by section 116) the following:

``SEC. 4S. REGISTRATION AND REGULATION OF SWAP DEALERS AND MAJOR SWAP 
              PARTICIPANTS.

    ``(a) Registration.--
            ``(1) It shall be unlawful for any person to act as a swap 
        dealer unless such person is registered as a swap dealer with 
        the Commission.
            ``(2) It shall be unlawful for any person to act as a major 
        swap participant unless such person shall have registered as a 
        major swap participant with the Commission.
    ``(b) Requirements.--
            ``(1) In general.--A person shall register as a swap dealer 
        or major swap participant by filing a registration application 
        with the Commission.
            ``(2) Contents.--The application shall be made in such form 
        and manner as prescribed by the Commission, giving any 
        information and facts as the Commission may deem necessary 
        concerning the business in which the applicant is or will be 
        engaged. Such person, when registered as a swap dealer or major 
        swap participant, shall continue to report and furnish to the 
        Commission such information pertaining to such person's 
        business as the Commission may require.
            ``(3) Expiration.--Each registration shall expire at such 
        time as the Commission may by rule or regulation prescribe.
            ``(4) Rules.--Except as provided in subsections (c), (d) 
        and (e), the Commission may prescribe rules applicable to swap 
        dealers and major swap participants, including rules that limit 
        the activities of swap dealers and major swap participants.
            ``(5) Transition.--Rules adopted under this section shall 
        provide for the registration of swap dealers and major swap 
        participants no later than one year after the effective date of 
        the Over-the-Counter Derivatives Markets Act of 2009.
            ``(6) Statutory disqualification.--Except to the extent 
        otherwise specifically provided by rule, regulation, or order, 
        it shall be unlawful for a swap dealer or a major swap 
        participant to permit any person associated with a swap dealer 
        or a major swap participant who is subject to a statutory 
        disqualification to effect or be involved in effecting swaps on 
        behalf of such swap dealer or major swap participant, if such 
        swap dealer or major swap participant knew, or in the exercise 
        of reasonable care should have known, of such statutory 
        disqualification.
    ``(c) Dual Registration.--
            ``(1) Swap dealer.--Any person that is required to be 
        registered as a swap dealer under this section shall register 
        with the Commission regardless of whether that person also is a 
        bank or is registered with the Securities and Exchange 
        Commission as a security-based swap dealer.
            ``(2) Major swap participant.--Any person that is required 
        to be registered as a major swap participant under this section 
        shall register with the Commission regardless of whether that 
        person also is a bank or is registered with the Securities and 
        Exchange Commission as a major security-based swap participant.
    ``(d) Joint Rules.--
            ``(1) In general.--Not later than 180 days after the 
        effective date of the Over-the-Counter Derivatives Markets Act 
        of 2009, the Commission and the Securities and Exchange 
        Commission shall jointly adopt uniform rules for persons that 
        are registered as swap dealers or major swap participants under 
        this section and persons that are registered as security-based 
        swap dealers or major security-based swap participants under 
        the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.).
            ``(2) Exception for prudential requirements.--The 
        Commission and the Securities and Exchange Commission shall not 
        prescribe rules imposing prudential requirements (including 
        activity restrictions) on swap dealers, major swap 
        participants, security-based swap dealers, or major security-
        based swap participants for which there is a Prudential 
        Regulator. This provision shall not be construed as limiting 
        the authority of the Commission and the Securities and Exchange 
        Commission to prescribe appropriate business conduct, 
        reporting, and recordkeeping requirements to protect investors.
    ``(e) Capital and Margin Requirements.--
            ``(1) In general.--
                    ``(A) Bank swap dealers and major swap 
                participants.--Each registered swap dealer and major 
                swap participant for which there is a Prudential 
                Regulator shall meet such minimum capital requirements 
                and minimum initial and variation margin requirements 
                as the Prudential Regulators shall by rule or 
                regulation jointly prescribe to help ensure the safety 
                and soundness of the swap dealer or major swap 
                participant.
                    ``(B) Nonbank swap dealers and major swap 
                participants.--Each registered swap dealer and major 
                swap participant for which there is not a Prudential 
                Regulator shall meet such minimum capital requirements 
                and minimum initial and variation margin requirements 
                as the Commission and the Securities and Exchange 
                Commission shall by rule or regulation jointly 
                prescribe to help ensure the safety and soundness of 
                the swap dealer or major swap participant.
            ``(2) Joint rules.--
                    ``(A) Bank swap dealers and major swap 
                participants.--Within 180 days of the enactment of the 
                Over-the-Counter Derivatives Markets Act of 2009, the 
                Prudential Regulators, in consultation with the 
                Commission and the Securities and Exchange Commission, 
                shall jointly adopt rules imposing capital and margin 
                requirements under this subsection for swap dealers and 
                major swap participants.
                    ``(B) Nonbank swap dealers and major swap 
                participants.--Within 180 days of the enactment of the 
                Over-the-Counter Derivatives Markets Act of 2009, the 
                Commission and the Securities and Exchange Commission, 
                in consultation with the Prudential Regulators, shall 
                jointly adopt rules imposing capital and margin 
                requirements under this subsection for swap dealers and 
                major swap participants for which there is no 
                Prudential Regulator.
            ``(3) Capital.--
                    ``(A) Bank swap dealers and major swap 
                participants.--In setting capital requirements under 
                this subsection, the Prudential Regulators shall 
                impose:
                            ``(i) a capital requirement that is greater 
                        than zero for swaps that are cleared by a 
                        derivatives clearing organization; and
                            ``(ii) to offset the greater risk to the 
                        swap dealer or major swap participant and to 
                        the financial system arising from the use of 
                        swaps that are not centrally cleared, higher 
                        capital requirements for swaps that are not 
                        cleared by a registered derivatives clearing 
                        organization than for swaps that are centrally 
                        cleared.
                    ``(B) Nonbank swap dealers and major swap 
                participants.--Capital requirements set by the 
                Commission and the Securities and Exchange Commission 
                under this subsection shall be as strict as or stricter 
                than the capital requirements set by the Prudential 
                Regulators under this subsection.
                    ``(C) Bank holding companies.--Capital requirements 
                set by the Board for swaps of bank holding companies 
                and Tier 1 financial holding companies on a 
                consolidated basis shall be as strict as or stricter 
                than the capital requirements set by the Prudential 
                Regulators under this subsection.
                    ``(D) A futures commission merchant, introducing 
                broker, broker or dealer shall maintain sufficient 
                capital to comply with the stricter of any applicable 
                capital requirements to which it is subject.
            ``(4) Margin.--
                    ``(A) Bank swap dealers and major swap 
                participants.--The Prudential Regulators shall impose 
                both initial and variation margin requirements under 
                this subsection on all swaps that are not cleared by a 
                registered derivatives clearing organization.
                    ``(B) Non-swap dealers or major swap 
                participants.--The Prudential Regulators may, but are 
                not required to, impose margin requirements with 
                respect to swaps in which one of the counterparties is 
                neither a swap dealer, major swap participant, 
                security-based swap dealer nor a major security-based 
                swap participant. Margin requirements for swaps set by 
                the Commission and the Securities and Exchange 
                Commission shall provide for the use of non-cash assets 
                as collateral.
                    ``(C) Nonbank swap dealers and major swap 
                participants.--Margin requirements for swaps set by the 
                Commission and the Securities and Exchange Commission 
                under this subsection shall be as strict as or stricter 
                than margin requirements for swaps set by the 
                Prudential Regulators.
    ``(f) Reporting and Recordkeeping.--
            ``(1) In general.--Each registered swap dealer and major 
        swap participant--
                    ``(A) shall make such reports as are prescribed by 
                the Commission by rule or regulation regarding the 
                transactions and positions and financial condition of 
                such person;
                    ``(B) for which--
                            ``(i) there is a Prudential Regulator shall 
                        keep books and records of all activities 
                        related to its business as a swap dealer or 
                        major swap participant in such form and manner 
                        and for such period as may be prescribed by the 
                        Commission by rule or regulation;
                            ``(ii) there is no Prudential Regulator 
                        shall keep books and records in such form and 
                        manner and for such period as may be prescribed 
                        by the Commission by rule or regulation;
                    ``(C) shall keep such books and records open to 
                inspection and examination by any representative of the 
                Commission; and
                    ``(D) shall keep any such books and records 
                relating to transactions in swaps based on one or more 
                securities open to inspection and examination by the 
                Securities and Exchange Commission.
            ``(2) Rules.--Within 365 days of the enactment of the Over-
        the-Counter Derivatives Markets Act of 2009, the Commission and 
        the Securities and Exchange Commission, in consultation with 
        the appropriate Federal banking agencies, shall jointly adopt 
        rules governing reporting and recordkeeping for swap dealers, 
        major swap participants, security-based swap dealers, and major 
        security-based swap participants.
    ``(g) Daily Trading Records.--
            ``(1) In general.--Each registered swap dealer and major 
        swap participant shall maintain daily trading records of its 
        swaps and all related records (including related cash or 
        forward transactions) and recorded communications including but 
        not limited to electronic mail, instant messages, and 
        recordings of telephone calls, for such period as may be 
        prescribed by the Commission by rule or regulation.
            ``(2) Information requirements.--The daily trading records 
        shall include such information as the Commission shall 
        prescribe by rule or regulation.
            ``(3) Customer records.--Each registered swap dealer and 
        major swap participant shall maintain daily trading records for 
        each customer or counterparty in such manner and form as to be 
        identifiable with each swap transaction.
            ``(4) Audit trail.--Each registered swap dealer and major 
        swap participant shall maintain a complete audit trail for 
        conducting comprehensive and accurate trade reconstructions.
            ``(5) Rules.--Within 365 days of the enactment of the Over-
        the-Counter Derivatives Markets Act of 2009, the Commission and 
        the Securities and Exchange Commission, in consultation with 
        the appropriate Federal banking agencies, shall jointly adopt 
        rules governing daily trading records for swap dealers, major 
        swap participants, security-based swap dealers, and major 
        security-based swap participants.
    ``(h) Business Conduct Standards.--
            ``(1) In general.--Each registered swap dealer and major 
        swap participant shall conform with business conduct standards 
        as may be prescribed by the Commission by rule or regulation 
        addressing--
                    ``(A) fraud, manipulation, and other abusive 
                practices involving swaps (including swaps that are 
                offered but not entered into);
                    ``(B) diligent supervision of its business as a 
                swap dealer;
                    ``(C) adherence to all applicable position limits; 
                and
                    ``(D) such other matters as the Commission shall 
                determine to be necessary or appropriate.
            ``(2) Business conduct requirements.--Business conduct 
        requirements adopted by the Commission shall--
                    ``(A) establish the standard of care for a swap 
                dealer or major swap participant to verify that any 
                counterparty meets the eligibility standards for an 
                eligible contract participant;
                    ``(B) require disclosure by the swap dealer or 
                major swap participant to any counterparty to the 
                transaction (other than a swap dealer, major swap 
                participant, security-based swap dealer or major 
                security-based swap participant) of--
                            ``(i) information about the material risks 
                        and characteristics of the swap;
                            ``(ii) the source and amount of any fees or 
                        other material remuneration that the swap 
                        dealer or major swap participant would directly 
                        or indirectly expect to receive in connection 
                        with the swap; and
                            ``(iii) any other material incentives or 
                        conflicts of interest that the swap dealer or 
                        major swap participant may have in connection 
                        with the swap; and
                    ``(C) establish such other standards and 
                requirements as the Commission may determine are 
                necessary or appropriate in the public interest, for 
                the protection of investors, or otherwise in 
                furtherance of the purposes of this Act.
            ``(3) Rules.--The Commission and the Securities and 
        Exchange Commission, in consultation with the appropriate 
        Federal banking agencies, shall jointly prescribe rules under 
        this subsection governing business conduct standards for swap 
        dealers, major swap participants, security-based swap dealers, 
        and major security-based swap participants within 365 days of 
        the enactment of the Over-the-Counter Derivatives Markets Act 
        of 2009.
    ``(i) Documentation and Back Office Standards.--
            ``(1) In general.--Each registered swap dealer and major 
        swap participant shall conform with standards, as may be 
        prescribed by the Commission by rule or regulation, addressing 
        timely and accurate confirmation, processing, netting, 
        documentation, and valuation of all swaps.
            ``(2) Rules.--Within 365 days of the enactment of the Over-
        the-Counter Derivatives Markets Act of 2009, the Commission and 
        the Securities and Exchange Commission, in consultation with 
        the appropriate Federal banking agencies, shall adopt rules 
        governing documentation and back office standards for swap 
        dealers, major swap participants, security-based swap dealers, 
        and major security-based swap participants.
    ``(j) Dealer Responsibilities.--Each registered swap dealer and 
major swap participant at all times shall comply with the following 
requirements:
            ``(1) Monitoring of trading.--The swap dealer or major swap 
        participant shall monitor its trading in swaps to prevent 
        violations of applicable position limits.
            ``(2) Disclosure of general information.--The swap dealer 
        or major swap participant shall disclose to the Commission and 
        to the Prudential Regulator for such swap dealer or major swap 
        participant, as applicable, information concerning--
                    ``(A) terms and conditions of its swaps;
                    ``(B) swap trading operations, mechanisms, and 
                practices;
                    ``(C) financial integrity protections relating to 
                swaps; and
                    ``(D) other information relevant to its trading in 
                swaps.
            ``(3) Ability to obtain information.--The swap dealer or 
        major swap participant shall--
                    ``(A) establish and enforce internal systems and 
                procedures to obtain any necessary information to 
                perform any of the functions described in this section; 
                and
                    ``(B) provide the information to the Commission and 
                to the Prudential Regulator for such swap dealer or 
                major swap participant, as applicable, upon request.
            ``(4) Conflicts of interest.--The swap dealer and major 
        swap participant shall implement conflict-of-interest systems 
        and procedures that--
                    ``(A) establish structural and institutional 
                safeguards to assure that the activities of any person 
                within the firm relating to research or analysis of the 
                price or market for any commodity are separated by 
                appropriate informational partitions within the firm 
                from the review, pressure, or oversight of those whose 
                involvement in trading or clearing activities might 
                potentially bias their judgment or supervision; and
                    ``(B) address such other issues as the Commission 
                determines appropriate.
            ``(5) Antitrust considerations.--Unless necessary or 
        appropriate to achieve the purposes of this Act, the swap 
        dealer or major swap participant shall avoid--
                    ``(A) adopting any processes or taking any actions 
                that result in any unreasonable restraints of trade; or
                    ``(B) imposing any material anticompetitive burden 
                on trading.
    ``(k) Rules.--The Commission, the Securities and Exchange 
Commission, and the Prudential Regulators shall consult with each other 
prior to adopting any rules under the Over-the-Counter Derivatives 
Markets Act of 2009.
    ``(l) Recognition of Comparable Non-u.s. Regulation.--The 
Commission, in consultation with the Secretary of the Treasury, the 
Securities and Exchange Commission and the Prudential Regulators, shall 
adopt rules exempting from registration and the other requirements of 
the Over-the-Counter Derivatives Market Act of 2009 foreign financial 
institutions that the Commission finds are subject to comparable 
regulation in the financial institution's home country.''.

SEC. 118. SEGREGATION OF ASSETS HELD AS COLLATERAL IN SWAP 
              TRANSACTIONS.

    The Commodity Exchange Act (7 U.S.C. 1 et seq.) is further amended 
by inserting after section 4s the following:

``SEC. 4T. SEGREGATION OF ASSETS HELD AS COLLATERAL IN SWAP 
              TRANSACTIONS.

    ``(a) Cleared Swaps.--A swap dealer, futures commission merchant, 
or derivatives clearing organization by or through which funds or other 
property are held as margin or collateral to secure the obligations of 
a counterparty under a swap to be cleared by or through a derivatives 
clearing organization shall segregate, maintain, and use the funds or 
other property for the benefit of the counterparty, in accordance with 
such rules and relations as the Commission or Prudential Regulator 
shall prescribe. Any such funds or other property shall be treated as 
customer property under this Act.
    ``(b) Over-the-counter Swaps.--At the request of a swap 
counterparty who provides funds or other property to a swap dealer as 
margin or collateral to secure the obligations of the counterparty 
under a swap between the counterparty and the swap dealer that is not 
submitted for clearing to a derivatives clearing organization, the swap 
dealer shall segregate the funds or other property for the benefit of 
the counterparty, and maintain the funds or other property in an 
account which is carried by a third-party custodian and designated as a 
segregated account for the counterparty, in accordance with such rules 
and regulations as the Commission or Prudential Regulator may 
prescribe. This subsection shall not be interpreted to preclude 
commercial arrangements regarding the investment of the segregated 
funds or other property and the related allocation of gains and losses 
resulting from any such investment.''.

SEC. 119. CONFLICTS OF INTEREST.

    Section 4d of the Commodity Exchange Act (7 U.S.C. 6d) is amended 
by--
            (1) redesignating subsection (c) as subsection (d); and
            (2) inserting after subsection (b) the following:
    ``(c) Conflicts of Interest.--The Commission shall require that 
futures commission merchants and introducing brokers implement 
conflict-of-interest systems and procedures that--
            ``(1) establish structural and institutional safeguards to 
        assure that the activities of any person within the firm 
        relating to research or analysis of the price or market for any 
        commodity are separated by appropriate informational partitions 
        within the firm from the review, pressure, or oversight of 
        those whose involvement in trading or clearing activities might 
        potentially bias their judgment or supervision; and
            ``(2) address such other issues as the Commission 
        determines appropriate.''.

SEC. 120. SWAP EXECUTION FACILITIES.

    The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by 
inserting after section 5g the following:

``SEC. 5H. SWAP EXECUTION FACILITIES.

    ``(a) Registration.--
            ``(1) In general.--No person may operate a facility for the 
        trading of swaps unless the facility is registered as a swap 
        execution facility under this section.
            ``(2) Dual registration.--Any person that is required to be 
        registered as a swap execution facility under this section 
        shall register with the Commission regardless of whether that 
        person also is registered with the Securities and Exchange 
        Commission as a swap execution facility.
    ``(b) Requirements for Trading.--A swap execution facility that is 
registered under subsection (a) may trade any swap.
    ``(c) Trading by Contract Markets.--A board of trade that operates 
a contract market shall, to the extent that the board of trade also 
operates a swap execution facility and uses the same electronic trade 
execution system for trading on the contract market and the swap 
execution facility, identify whether the electronic trading is taking 
place on the contract market or the swap execution facility.
    ``(d) Criteria for Registration.--
            ``(1) In general.--To be registered as a swap execution 
        facility, the facility shall be required to demonstrate to the 
        Commission that it meets the criteria specified herein.
            ``(2) Deterrence of abuses.--The swap execution facility 
        shall establish and enforce trading and participation rules 
        that will deter abuses and have the capacity to detect, 
        investigate, and enforce those rules, including means to--
                    ``(A) obtain information necessary to perform the 
                functions required under this section; or
                    ``(B) use means to--
                            ``(i) provide market participants with 
                        impartial access to the market; and
                            ``(ii) capture information that may be used 
                        in establishing whether rule violations have 
                        occurred.
            ``(3) Trading procedures.--The swap execution facility 
        shall establish and enforce rules or terms and conditions 
        defining, or specifications detailing, trading procedures to be 
        used in entering and executing orders traded on or through its 
        facilities.
            ``(4) Financial integrity of transactions.--The swap 
        execution facility shall establish and enforce rules and 
        procedures for ensuring the financial integrity of swaps 
        entered on or through its facilities, including the clearance 
        and settlement of the swaps pursuant to section 2(j)(1).
    ``(e) Core Principles for Swap Execution Facilities.--
            ``(1) In general.--To maintain its registration as a swap 
        execution facility, the facility shall comply with the core 
        principles specified in this subsection and any requirement 
        that the Commission may impose by rule or regulation pursuant 
        to section 8a(5). Except where the Commission determines 
        otherwise by rule or regulation, the facility shall have 
        reasonable discretion in establishing the manner in which it 
        complies with these core principles.
            ``(2) Compliance with rules.--The swap execution facility 
        shall monitor and enforce compliance with any of the rules of 
        the facility, including the terms and conditions of the swaps 
        traded on or through the facility and any limitations on access 
        to the facility.
            ``(3) Swaps not readily susceptible to manipulation.--The 
        swap execution facility shall permit trading only in swaps that 
        are not readily susceptible to manipulation.
            ``(4) Monitoring of trading.--The swap execution facility 
        shall monitor trading in swaps to prevent manipulation, price 
        distortion, and disruptions of the delivery or cash settlement 
        process through surveillance, compliance, and disciplinary 
        practices and procedures, including methods for conducting 
        real-time monitoring of trading and comprehensive and accurate 
        trade reconstructions.
            ``(5) Ability to obtain information.--The swap execution 
        facility shall--
                    ``(A) establish and enforce rules that will allow 
                the facility to obtain any necessary information to 
                perform any of the functions described in this 
                subsection;
                    ``(B) provide the information to the Commission 
                upon request; and
                    ``(C) have the capacity to carry out such 
                international information-sharing agreements as the 
                Commission may require.
            ``(6) Emergency authority.--The swap execution facility 
        shall adopt rules to provide for the exercise of emergency 
        authority, in consultation or cooperation with the Commission, 
        where necessary and appropriate, including the authority to 
        liquidate or transfer open positions in any swap or to suspend 
        or curtail trading in a swap.
            ``(7) Timely publication of trading information.--The swap 
        execution facility shall make public timely information on 
        price, trading volume, and other trading data on swaps to the 
        extent prescribed by the Commission.
            ``(8) Recordkeeping and reporting.--The swap execution 
        facility shall maintain records of all activities related to 
        the business of the facility, including a complete audit trail, 
        in a form and manner acceptable to the Commission for a period 
        of 5 years, and report to the Commission all information 
        determined by the Commission to be necessary or appropriate for 
        the Commission to perform its responsibilities under this Act 
        in a form and manner acceptable to the Commission. The 
        Commission shall adopt data collection and reporting 
        requirements for swap execution facilities that are comparable 
        to corresponding requirements for derivatives clearing 
        organizations and swap repositories.
            ``(9) Antitrust considerations.--Unless necessary or 
        appropriate to achieve the purposes of this Act, the swap 
        execution facility shall avoid--
                    ``(A) adopting any rules or taking any actions that 
                result in any unreasonable restraints of trade; or
                    ``(B) imposing any material anticompetitive burden 
                on trading on the swap execution facility.
            ``(10) Conflicts of interest.--The swap execution facility 
        shall--
                    ``(A) establish and enforce rules to minimize 
                conflicts of interest in its decisionmaking process; 
                and
                    ``(B) establish a process for resolving the 
                conflicts of interest.
            ``(11) Designation of compliance officer.--
                    ``(A) In general.--Each swap execution facility 
                shall designate an individual to serve as a compliance 
                officer.
                    ``(B) Duties.--The compliance officer shall--
                            ``(i) report directly to the board or to 
                        the senior officer of the facility; and
                            ``(ii) shall--
                                    ``(I) review compliance with the 
                                core principles in this subsection;
                                    ``(II) in consultation with the 
                                board of the facility, a body 
                                performing a function similar to that 
                                of a board, or the senior officer of 
                                the facility, resolve any conflicts of 
                                interest that may arise;
                                    ``(III) be responsible for 
                                administering the policies and 
                                procedures required to be established 
                                pursuant to this section; and
                                    ``(IV) ensure compliance with 
                                commodity laws and the rules and 
                                regulations issued thereunder, 
                                including rules prescribed by the 
                                Commission pursuant to this section; 
                                and
                            ``(iii) establish procedures for 
                        remediation of non-compliance issues found 
                        during compliance office reviews, lookbacks, 
                        internal or external audit findings, self-
                        reported errors, or through validated 
                        complaints. Procedures will establish the 
                        handling, management response, remediation, re-
                        testing, and closing of non-compliant issues.
                    ``(C) Annual reports required.--The compliance 
                officer shall annually prepare and sign a report on the 
                compliance of the facility with the commodity laws and 
                its policies and procedures, including its code of 
                ethics and conflict of interest policies, in accordance 
                with rules prescribed by the Commission. Such 
                compliance report shall accompany the financial reports 
                of the facility that are required to be furnished to 
                the Commission pursuant to this section and shall 
                include a certification that, under penalty of law, the 
                report is accurate and complete.
    ``(f) Exemptions.--The Commission may exempt, conditionally or 
unconditionally, a swap execution facility from registration under this 
section if the Commission finds that such facility is subject to 
comparable, comprehensive supervision and regulation on a consolidated 
basis by the Securities and Exchange Commission, a Prudential Regulator 
or the appropriate governmental authorities in the organization's home 
country.
    ``(g) Harmonization of Rules.--Within 180 days of the enactment of 
the Over-the-Counter Derivatives Markets Act of 2009, the Commission 
and the Securities and Exchange Commission shall jointly prescribe 
rules governing the regulation of swap execution facilities under this 
section and section 3B of the Securities Exchange Act of 1934 (15 
U.S.C. 78c-2).''.

SEC. 121. DERIVATIVES TRANSACTION EXECUTION FACILITIES AND EXEMPT 
              BOARDS OF TRADE.

    Sections 5a and 5d of the Commodity Exchange Act (7 U.S.C. 7 and 
7a-3) are repealed.

SEC. 122. DESIGNATED CONTRACT MARKETS.

    (a) Section 5(d) of the Commodity Exchange Act (7 U.S.C. 7(d)) is 
amended by striking paragraph (9) and inserting the following:
            ``(9) Execution of transactions.--
                    ``(A) The board of trade shall provide a 
                competitive, open, and efficient market and mechanism 
                for executing transactions that protects the price 
                discovery process of trading in the board of trade's 
                centralized market.
                    ``(B) The rules may authorize, for bona fide 
                business purposes--
                            ``(i) transfer trades or office trades;
                            ``(ii) an exchange of--
                                    ``(I) futures in connection with a 
                                cash commodity transaction;
                                    ``(II) futures for cash 
                                commodities; or
                                    ``(III) futures for swaps; or
                            ``(iii) a futures commission merchant, 
                        acting as principal or agent, to enter into or 
                        confirm the execution of a contract for the 
                        purchase or sale of a commodity for future 
                        delivery if the contract is reported, recorded, 
                        or cleared in accordance with the rules of the 
                        contract market or a derivatives clearing 
                        organization.''.
    (b) Section 5(d) of the Commodity Exchange Act (7 U.S.C. 7(d)) is 
amended by adding after paragraph (18) the following:
            ``(19) Financial resources.--The board of trade shall 
        demonstrate that it has adequate financial, operational, and 
        managerial resources to discharge the responsibilities of a 
        contract market. For the board of trade's financial resources 
        to be considered adequate, their value shall exceed the total 
        amount that would enable the contract market to cover its 
        operating costs for a period of one year, calculated on a 
        rolling basis.
            ``(20) System safeguards.--The board of trade shall--
                    ``(A) establish and maintain a program of risk 
                analysis and oversight to identify and minimize sources 
                of operational risk through the development of 
                appropriate controls and procedures, and the 
                development of automated systems, that are reliable, 
                secure, and give adequate scalable capacity;
                    ``(B) establish and maintain emergency procedures, 
                backup facilities, and a plan for disaster recovery 
                that allow for the timely recovery and resumption of 
                operations and the fulfillment of the board of trade's 
                responsibilities and obligations; and
                    ``(C) periodically conduct tests to verify that 
                back-up resources are sufficient to ensure continued 
                order processing and trade matching, price reporting, 
                market surveillance, and maintenance of a comprehensive 
                and accurate audit trail.''.

SEC. 123. MARGIN.

    Section 8a of the Commodity Exchange Act (7 U.S.C. 12a) is amended 
in paragraph (7)(C), by striking ``, excepting the setting of levels of 
margin''.

SEC. 124. POSITION LIMITS.

    (a) Section 4a(a) of the Commodity Exchange Act (7 U.S.C. 6a(a)) is 
amended by--
            (1) inserting ``(1)'' after ``(a)'';
            (2) striking ``on electronic trading facilities with 
        respect to a significant price discovery contract'' in the 
        first sentence and inserting ``swaps that perform or affect a 
        significant price discovery function with respect to regulated 
        markets'';
            (3) inserting ``, including any group or class of 
        traders,'' in the second sentence after ``held by any person'';
            (4) striking ``on an electronic trading facility with 
        respect to a significant price discovery contract,'' in the 
        second sentence and inserting ``swaps that perform or affect a 
        significant price discovery function with respect to regulated 
        markets,''; and
            (5) inserting at the end the following:
            ``(2) Aggregate position limits.--The Commission may, by 
        rule or regulation, establish limits (including related hedge 
        exemption provisions) on the aggregate number or amount of 
        positions in contracts based upon the same underlying commodity 
        (as defined by the Commission) that may be held by any person, 
        including any group or class of traders, for each month 
        across--
                    ``(A) contracts listed by designated contract 
                markets;
                    ``(B) contracts traded on a foreign board of trade 
                that provides members or other participants located in 
                the United States with direct access to its electronic 
                trading and order matching system; and
                    ``(C) swap contracts that perform or affect a 
                significant price discovery function with respect to 
                regulated markets.
            ``(3) Significant price discovery function.--In making a 
        determination whether a swap performs or affects a significant 
        price discovery function with respect to regulated markets, the 
        Commission shall consider, as appropriate:
                    ``(A) Price linkage.--The extent to which the swap 
                uses or otherwise relies on a daily or final settlement 
                price, or other major price parameter, of another 
                contract traded on a regulated market based upon the 
                same underlying commodity, to value a position, 
                transfer or convert a position, financially settle a 
                position, or close out a position.
                    ``(B) Arbitrage.--The extent to which the price for 
                the swap is sufficiently related to the price of 
                another contract traded on a regulated market based 
                upon the same underlying commodity so as to permit 
                market participants to effectively arbitrage between 
                the markets by simultaneously maintaining positions or 
                executing trades in the swaps on a frequent and 
                recurring basis.
                    ``(C) Material price reference.--The extent to 
                which, on a frequent and recurring basis, bids, offers, 
                or transactions in a contract traded on a regulated 
                market are directly based on, or are determined by 
                referencing, the price generated by the swap.
                    ``(D) Material liquidity.--The extent to which the 
                volume of swaps being traded in the commodity is 
                sufficient to have a material effect on another 
                contract traded on a regulated market.
                    ``(E) Other material factors.--Such other material 
                factors as the Commission specifies by rule or 
                regulation as relevant to determine whether a swap 
                serves a significant price discovery function with 
                respect to a regulated market.
            ``(4) Exemptions.--The Commission, by rule, regulation, or 
        order, may exempt, conditionally or unconditionally, any person 
        or class of persons, any swap or class of swaps, or any 
        transaction or class of transactions from any requirement it 
        may establish under this section with respect to position 
        limits.''.
    (b) Section 4a(b) of the Commodity Exchange Act (7 U.S.C. 6a(b)) is 
amended--
            (1) in paragraph (1), by striking ``or derivatives 
        transaction execution facility or facilities or electronic 
        trading facility'' and inserting ``or swap execution facility 
        or facilities''; and
            (2) in paragraph (2), by striking ``or derivatives 
        transaction execution facility or facilities or electronic 
        trading facility'' and inserting ``or swap execution 
        facility''.

SEC. 125. ENHANCED AUTHORITY OVER REGISTERED ENTITIES.

    (a) Section 5(d)(1) of the Commodity Exchange Act (7 U.S.C. 
7(d)(1)) is amended by striking ``The board of trade shall have'' and 
inserting ``Except where the Commission otherwise determines by rule or 
regulation pursuant to section 8a(5), the board of trade shall have''.
    (b) Section 5b(c)(2)(A) of the Commodity Exchange Act (7 U.S.C. 7a-
1(c)(2)(A)) is amended by striking ``The applicant shall have'' and 
inserting ``Except where the Commission otherwise determines by rule or 
regulation pursuant to section 8a(5), the applicant shall have''.
    (c) Section 5c(a) of the Commodity Exchange Act (7 U.S.C. 7a-2(a)) 
is amended--
            (1) in paragraph (1), by striking ``5a(d) and 5b(c)(2)'' 
        and inserting ``5b(c)(2) and 5h(e)''; and
            (2) in paragraph (2), by striking ``shall not'' and 
        inserting ``may''.
    (d) Section 5c(c)(1) of the Commodity Exchange Act (7 U.S.C. 7a-
2(c)(1)) is amended by inserting ``(A)'' after ``In general.--'' and 
adding at the end the following:
                    ``(B) Unless section 805(e) of the Payment, 
                Clearing, and Settlement Supervision Act of 2009 
                applies, the new contract or instrument or clearing of 
                the new contract or instrument, new rule, or rule 
                amendment shall become effective, pursuant to the 
                registered entity's certification, 10 business days 
                after the Commission's receipt of the certification (or 
                such shorter period determined by the Commission by 
                rule or regulation) unless the Commission notifies the 
                registered entity within such time that it is staying 
                the certification because there exist novel or complex 
                issues that require additional time to analyze, an 
                inadequate explanation by the submitting registered 
                entity, or a potential inconsistency with this Act 
                (including regulations under this Act).
                    ``(C) A notification by the Commission pursuant to 
                subparagraph (B) shall stay the certification of the 
                new contract or instrument or clearing of the new 
                contract or instrument, new rule or new amendment for 
                up to an additional 90 days from the date of such 
                notification.''.
    (e) Section 5c(d) of the Commodity Exchange Act (7 U.S.C. 7a-2(d)) 
is repealed.

SEC. 126. FOREIGN BOARDS OF TRADE.

    (a) ___.--Section 4(b) of the Commodity Exchange Act (7 U.S.C. 
6(b)) is amended by striking ``No rule or regulation'' and inserting 
``Except as provided in paragraphs (1) and (2), no rule or 
regulation''.
    (b) ___.--Section 4(b) of the Commodity Exchange Act (7 U.S.C. 
6(b)) is further amended by inserting before ``The Commission'' the 
following:
            ``(1) Registration.--The Commission may adopt rules and 
        regulations requiring registration with the Commission for a 
        foreign board of trade that provides the members of the foreign 
        board of trade or other participants located in the United 
        States direct access to the electronic trading and order 
        matching system of the foreign board of trade, including rules 
        and regulations prescribing procedures and requirements 
        applicable to the registration of such foreign boards of trade. 
        For purposes of this paragraph, `direct access' refers to an 
        explicit grant of authority by a foreign board of trade to an 
        identified member or other participant located in the United 
        States to enter trades directly into the trade matching system 
        of the foreign board of trade.
            ``(2) Linked contracts.--It shall be unlawful for a foreign 
        board of trade to provide to the members of the foreign board 
        of trade or other participants located in the United States 
        direct access to the electronic trading and order-matching 
        system of the foreign board of trade with respect to an 
        agreement, contract, or transaction that settles against any 
        price (including the daily or final settlement price) of 1 or 
        more contracts listed for trading on a registered entity, 
        unless the Commission determines that--
                    ``(A) the foreign board of trade makes public daily 
                trading information regarding the agreement, contract, 
                or transaction that is comparable to the daily trading 
                information published by the registered entity for the 
                1 or more contracts against which the agreement, 
                contract, or transaction traded on the foreign board of 
                trade settles; and
                    ``(B) the foreign board of trade (or the foreign 
                futures authority that oversees the foreign board of 
                trade)--
                            ``(i) adopts position limits (including 
                        related hedge exemption provisions) for the 
                        agreement, contract, or transaction that are 
                        comparable to the position limits (including 
                        related hedge exemption provisions) adopted by 
                        the registered entity for the 1 or more 
                        contracts against which the agreement, 
                        contract, or transaction traded on the foreign 
                        board of trade settles;
                            ``(ii) has the authority to require or 
                        direct market participants to limit, reduce, or 
                        liquidate any position the foreign board of 
                        trade (or the foreign futures authority that 
                        oversees the foreign board of trade) determines 
                        to be necessary to prevent or reduce the threat 
                        of price manipulation, excessive speculation as 
                        described in section 4a, price distortion, or 
                        disruption of delivery or the cash settlement 
                        process;
                            ``(iii) agrees to promptly notify the 
                        Commission, with regard to the agreement, 
                        contract, or transaction that settles against 
                        any price (including the daily or final 
                        settlement price) of 1 or more contracts listed 
                        for trading on a registered entity, of any 
                        change regarding--
                                    ``(I) the information that the 
                                foreign board of trade will make 
                                publicly available;
                                    ``(II) the position limits that the 
                                foreign board of trade or foreign 
                                futures authority will adopt and 
                                enforce;
                                    ``(III) the position reductions 
                                required to prevent manipulation, 
                                excessive speculation as described in 
                                section 4a, price distortion, or 
                                disruption of delivery or the cash 
                                settlement process; and
                                    ``(IV) any other area of interest 
                                expressed by the Commission to the 
                                foreign board of trade or foreign 
                                futures authority;
                            ``(iv) provides information to the 
                        Commission regarding large trader positions in 
                        the agreement, contract, or transaction that is 
                        comparable to the large trader position 
                        information collected by the Commission for the 
                        1 or more contracts against which the 
                        agreement, contract, or transaction traded on 
                        the foreign board of trade settles; and
                            ``(v) provides the Commission with 
                        information necessary to publish reports on 
                        aggregate trader positions for the agreement, 
                        contract, or transaction traded on the foreign 
                        board of trade that are comparable to such 
                        reports on aggregate trader positions for the 1 
                        or more contracts against which the agreement, 
                        contract, or transaction traded on the foreign 
                        board of trade settles.
            ``(3) Existing foreign boards of trade.--Paragraphs (1) and 
        (2) shall not be effective with respect to any foreign board of 
        trade to which the Commission has granted direct access 
        permission before the date of the enactment of this subsection 
        until the date that is 180 days after such date of enactment.
            ``(4) Persons located in the united states.--''.
    (c) Liability of Registered Persons Trading on a Foreign Board of 
Trade.--
            (1) Section 4(a) of the Commodity Exchange Act (7. U.S.C. 
        6(a)) is amended by inserting ``or by subsection (f)'' after 
        ``Unless exempted by the Commission pursuant to subsection 
        (c)''; and
            (2) Section 4 of the Commodity Exchange Act (7 U.S.C. 6) is 
        further amended by adding at the end the following:
    ``(f) A person registered with the Commission, or exempt from 
registration by the Commission, under this Act may not be found to have 
violated subsection (a) with respect to a transaction in, or in 
connection with, a contract of sale of a commodity for future delivery 
if the person has reason to believe that the transaction and the 
contract is made on or subject to the rules of a foreign board of trade 
that has complied with subsections (b)(1) and (b)(2).''.
    (d) Contract Enforcement for Foreign Futures Contracts.--Section 
22(a) of the Commodity Exchange Act (7 U.S.C. 25(a)) is amended by 
adding at the end the following:
            ``(5) Contract enforcement for foreign futures contracts.--
        A contract of sale of a commodity for future delivery traded or 
        executed on or through the facilities of a board of trade, 
        exchange, or market located outside the United States for 
        purposes of section 4(a) shall not be void, voidable, or 
        unenforceable, and a party to such a contract shall not be 
        entitled to rescind or recover any payment made with respect to 
        the contract, based on the failure of the foreign board of 
        trade to comply with any provision of this Act.''.

SEC. 127. LEGAL CERTAINTY FOR SWAPS.

    Section 22(a)(4) of the Commodity Exchange Act (7 U.S.C. 25(a)(4)) 
is amended to read as follows:
            ``(4) Contract enforcement between eligible 
        counterparties.--
                    ``(A) No hybrid instrument sold to any investor 
                shall be void, voidable, or unenforceable, and no party 
                to such hybrid instrument shall be entitled to rescind, 
                or recover any payment made with respect to, such a 
                hybrid instrument under this section or any other 
                provision of Federal or State law, based solely on the 
                failure of the hybrid instrument to comply with the 
                terms or conditions of section 2(f) or regulations of 
                the Commission.
                    ``(B) No agreement, contract, or transaction 
                between eligible contract participants or persons 
                reasonably believed to be eligible contract 
                participants shall be void, voidable, or unenforceable, 
                and no party thereto shall be entitled to rescind, or 
                recover any payment made with respect to, such 
                agreement, contract, or transaction under this section 
                or any other provision of Federal or State law, based 
                solely on the failure of the agreement, contract, or 
                transaction to meet the definition of a swap set forth 
                in section 1a or to be cleared pursuant to section 
                2(j)(1).''.

SEC. 128. MULTILATERAL CLEARING ORGANIZATIONS.

    (a) Section 408(2)(C) of the Federal Deposit Insurance Corporation 
Improvement Act of 1991 (12 U.S.C. 4421(2)(C)) is amended by striking 
``section 2(c), 2(d), 2(f), or 2(g) of such Act, or exempted under 
section 2(h) or 4(c) of such Act'' and inserting ``section 2(c) or 2(f) 
of such Act''.
    (b) Section 408 of the Federal Deposit Insurance Corporation 
Improvement Act of 1991 (12 U.S.C. 4421) is further amended by 
inserting at the end the following:
            ``(4) The term `over-the-counter derivative instrument' 
        does not include a swap or a security-based swap as defined in 
        sections 1a(35) and 1a(38) of the Commodity Exchange Act (7 
        U.S.C. 1a(35) and 1a(38)).''.

SEC. 129. PRIMARY ENFORCEMENT AUTHORITY.

    The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by 
adding the following new section after section 4b:

``SEC. 4B-1. PRIMARY ENFORCEMENT AUTHORITY.

    ``(a) CFTC.--Except as provided in subsections (b), (c), and (d), 
the Commission shall have primary authority to enforce the provisions 
of Subtitle A of the Over-the-Counter Derivatives Markets Act of 2009 
with respect to any person.
    ``(b) Prudential Regulators.--The Prudential Regulators shall have 
exclusive authority to enforce the provisions of section 4s(e) and 
other prudential requirements of this Act with respect to banks, and 
branches or agencies of foreign banks that are swap dealers or major 
swap participants.
    ``(c) Referral.--If the Prudential Regulator for a swap dealer or 
major swap participant has cause to believe that such swap dealer or 
major swap participant may have engaged in conduct that constitutes a 
violation of the nonprudential requirements of section 4s or rules 
adopted by the Commission thereunder, that Prudential Regulator may 
recommend in writing to the Commission that the Commission initiate an 
enforcement proceeding as authorized under this Act. The recommendation 
shall be accompanied by a written explanation of the concerns giving 
rise to the recommendation.
    ``(d) Backstop Enforcement Authority.--If the Commission does not 
initiate an enforcement proceeding before the end of the 90-day period 
beginning on the date on which the Commission receives a recommendation 
under subsection (c), the Prudential Regulator may initiate an 
enforcement proceeding as permitted under Federal law.''.

SEC. 130. ENFORCEMENT.

    (a) Section 4b(a)(2) of the Commodity Exchange Act (7 U.S.C. 
6b(a)(2)) is amended by striking ``or other agreement, contract, or 
transaction subject to paragraphs (1) and (2) of section 5a(g),'' and 
inserting ``or swap,''.
    (b) Section 4b(b) of the Commodity Exchange Act (7 U.S.C. 6b(b)) is 
amended by striking ``or other agreement, contract or transaction 
subject to paragraphs (1) and (2) of section 5a(g),'' and inserting 
``or swap,''.
    (c) Section 4c(a) of the Commodity Exchange Act (7 U.S.C. 6c(a)) is 
amended by inserting ``or swap'' before ``if the transaction is used or 
may be used''.
    (d) Section 9(a)(2) of the Commodity Exchange Act (7 U.S.C. 
13(a)(2)) is amended by inserting ``or of any swap,'' before ``or to 
corner''.
    (e) Section 9(a)(4) of the Commodity Exchange Act (7 U.S.C. 
13(a)(4)) is amended by inserting ``swap repository,'' before ``or 
futures association''.
    (f) Section 9(e)(1) of the Commodity Exchange Act (7 U.S.C. 
13(e)(1)) is amended by inserting ``swap repository,'' before ``or 
registered futures association'' and by inserting ``, or swaps,'' 
before ``on the basis''.
    (g) Section 8(b) of the Federal Deposit Insurance Act (12 U.S.C. 
1818(b)) is amended by adding the following new paragraph (6) and 
renumber existing paragraphs (6) through (10) as (7) through (11):
            ``(6) This section shall apply to any swap dealer, major 
        swap participant, security-based swap dealer, major security-
        based swap participant, derivatives clearing organization, swap 
        repository or swap execution facility, whether or not it is an 
        insured depository institution, for which the Board, the 
        Corporation, or the Office of the Comptroller of the Currency 
        is the appropriate Federal banking agency or Prudential 
        Regulator for purposes of the Over-the-Counter Derivatives 
        Markets Act of 2009.''.

SEC. 131. RETAIL COMMODITY TRANSACTIONS.

    Section 2(c) of the Commodity Exchange Act (7 U.S.C. 2(c)) is 
amended--
            (1) in paragraph (1), by striking ``(to the extent provided 
        in section 5a(g), 5b, 5d, or 12(e)(2)(B))'' and inserting ``5b, 
        or 12(e)(2)(B))'';
            (2) in paragraph (2), by inserting after subparagraph (C) 
        the following:
                    ``(D) Retail commodity transactions.--
                            ``(i) This subparagraph shall apply to any 
                        agreement, contract, or transaction in any 
                        commodity that is--
                                    ``(I) entered into with, or offered 
                                to (even if not entered into with), a 
                                person that is not an eligible contract 
                                participant or eligible commercial 
                                entity; and
                                    ``(II) entered into, or offered 
                                (even if not entered into), on a 
                                leveraged or margined basis, or 
                                financed by the offeror, the 
                                counterparty, or a person acting in 
                                concert with the offeror or 
                                counterparty on a similar basis.
                            ``(ii) Clause (i) shall not apply to--
                                    ``(I) an agreement, contract, or 
                                transaction described in paragraph (1) 
                                or subparagraphs (A), (B), or (C), 
                                including any agreement, contract, or 
                                transaction specifically excluded from 
                                subparagraph (A), (B), or (C);
                                    ``(II) any security;
                                    ``(III) a contract of sale that--
                                            ``(aa) results in actual 
                                        delivery within 28 days or such 
                                        other period as the Commission 
                                        may determine by rule or 
                                        regulation based upon the 
                                        typical commercial practice in 
                                        cash or spot markets for the 
                                        commodity involved; or
                                            ``(bb) creates an 
                                        enforceable obligation to 
                                        deliver between a seller and a 
                                        buyer that have the ability to 
                                        deliver and accept delivery, 
                                        respectively, in connection 
                                        with their line of business;
                                    ``(IV) an agreement, contract, or 
                                transaction that is listed on a 
                                national securities exchange registered 
                                under section 6(a) of the Securities 
                                Exchange Act of 1934 (15 U.S.C. 
                                78f(a)); or
                                    ``(V) an identified banking 
                                product, as defined in section 402(b) 
                                of the Legal Certainty for Bank 
                                Products Act of 2000 (7 U.S.C. 27(b)).
                            ``(iii) Sections 4(a), 4(b) and 4b shall 
                        apply to any agreement, contract or transaction 
                        described in clause (i), that is not excluded 
                        from clause (i) by clause (ii), as if the 
                        agreement, contract, or transaction were a 
                        contract of sale of a commodity for future 
                        delivery.
                            ``(iv) This subparagraph shall not be 
                        construed to limit any jurisdiction that the 
                        Commission may otherwise have under any other 
                        provision of this Act over an agreement, 
                        contract, or transaction that is a contract of 
                        sale of a commodity for future delivery.
                            ``(v) This subparagraph shall not be 
                        construed to limit any jurisdiction that the 
                        Commission or the Securities and Exchange 
                        Commission may otherwise have under any other 
                        provisions of this Act with respect to security 
                        futures products and persons effecting 
                        transactions in security futures products.
                            ``(vi) For the purposes of this 
                        subparagraph, an agricultural producer, packer, 
                        or handler shall be considered an eligible 
                        commercial entity for any agreement, contract, 
                        or transaction for a commodity in connection 
                        with its line of business.''.

SEC. 132. LARGE SWAP TRADER REPORTING.

    The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by 
adding after section 4t (as added by section 118) the following:

``SEC. 4U. LARGE SWAP TRADER REPORTING.

    ``(a) It shall be unlawful for any person to enter into any swap 
that performs or affects a significant price discovery function with 
respect to regulated markets if--
            ``(1) such person shall directly or indirectly enter into 
        such swaps during any one day in an amount equal to or in 
        excess of such amount as shall be fixed from time to time by 
        the Commission; and
            ``(2) such person shall directly or indirectly have or 
        obtain a position in such swaps equal to or in excess of such 
        amount as shall be fixed from time to time by the Commission,
unless such person files or causes to be filed with the properly 
designated officer of the Commission such reports regarding any 
transactions or positions described in paragraphs (1) and (2) as the 
Commission may by rule or regulation require and unless, in accordance 
with the rules and regulations of the Commission, such person shall 
keep books and records of all such swaps and any transactions and 
positions in any related commodity traded on or subject to the rules of 
any board of trade, and of cash or spot transactions in, inventories 
of, and purchase and sale commitments of, such a commodity.
    ``(b) Such books and records shall show complete details concerning 
all transactions and positions as the Commission may by rule or 
regulation prescribe.
    ``(c) Such books and records shall be open at all times to 
inspection and examination by any representative of the Commission.
    ``(d) For the purpose of this subsection, the swaps, futures and 
cash or spot transactions and positions of any person shall include 
such transactions and positions of any persons directly or indirectly 
controlled by such person.
    ``(e) In making a determination whether a swap performs or affects 
a significant price discovery function with respect to regulated 
markets, the Commission shall consider the factors set forth in section 
4a(a)(3).''.

SEC. 133. AUTHORITY TO BAN ABUSIVE SWAPS.

    The Commodity Futures Trading Commission and the Securities and 
Exchange Commission may jointly, by rule or order, prohibit 
transactions in any swap (as defined in section 1a(35) of the Commodity 
Exchange Act) or security-based swap (as defined in section 1a(38) of 
such Act) which the Commodity Futures Trading Commission and the 
Securities Exchange Commission find would be detrimental to the 
stability of a financial market or of participants in a financial 
market.

SEC. 134. INTERNATIONAL HARMONIZATION.

    In order to promote effective and consistent global regulation of 
swaps, the Securities and Exchange Commission, the Commodity Futures 
Trading Commission, the Prudential Regulators (as defined in section 
1a(43) of the Commodity Exchange Act), the financial stability 
regulator, and the Office of Derivatives Supervision shall consult and 
coordinate with foreign regulatory authorities on the establishment of 
consistent international standards with respect to the regulation of 
swaps, and may agree to such information-sharing arrangements as may be 
deemed to be necessary or appropriate in the public interest or for the 
protection of investors and swap counterparties.

SEC. 135. AUTHORITY TO BAN ACCESS TO THE UNITED STATES FINANCIAL 
              SYSTEM.

    The Secretary of the Treasury may prohibit any entity domiciled in 
a foreign country that regulates swaps (as defined in section 1a(35) of 
the Commodity Exchange Act) or security-based swaps (as defined in 
section 1a(38) of such Act) in a manner which the Secretary of the 
Treasury finds undermines the stability of a financial market, from 
participating in such financial activities in the United States as the 
Secretary deems appropriate.

SEC. 136. OTHER AUTHORITY.

    Unless otherwise provided by its terms, this title does not divest 
any appropriate Federal banking agency, the Commission, the Securities 
and Exchange Commission, or other Federal or State agency, of any 
authority derived from any other applicable law.

SEC. 137. ANTITRUST.

    Nothing in the amendments made by this title shall be construed to 
modify, impair, or supersede the operation of any of the antitrust 
laws. For purposes of this subtitle, the term ``antitrust laws'' has 
the same meaning given such term in subsection (a) of the first section 
of the Clayton Act, except that such term includes section 5 of the 
Federal Trade Commission Act to the extent that such section 5 applies 
to unfair methods of competition.

SEC. 138. EFFECTIVE DATE.

    This subtitle is effective 180 days after the date of enactment.

         Subtitle B--Regulation of Security-Based Swap Markets

SEC. 151. DEFINITIONS UNDER THE SECURITIES EXCHANGE ACT OF 1934.

    Section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 
78c(a)) is amended--
            (1) in paragraph (5)(A) and (B), by inserting ``(but not 
        security-based swaps, other than security-based swaps with or 
        for persons that are not eligible contract participants)'' 
        after the word ``securities'' in each place it appears;
            (2) in paragraph (13), by adding at the end the following: 
        ``For security-based swaps, such terms include the execution, 
        termination (prior to its scheduled maturity date), assignment, 
        exchange, or similar transfer or conveyance of, or 
        extinguishing of rights or obligations under, a security-based 
        swap, as the context may require.'';
            (3) in paragraph (14), by adding at the end the following: 
        ``For security-based swaps, such terms include the execution, 
        termination (prior to its scheduled maturity date), assignment, 
        exchange, or similar transfer or conveyance of, or 
        extinguishing of rights or obligations under, a security-based 
        swap, as the context may require.'';
            (4) in paragraph (39)--
                    (A) by striking ``or government securities dealer'' 
                and adding ``government securities dealer, security-
                based swap dealer or major security-based swap 
                participant'' in its place in subparagraph (B)(i)(I);
                    (B) by adding ``security-based swap dealer, major 
                security-based swap participant,'' after ``government 
                securities dealer,'' in subparagraph (B)(i)(II);
                    (C) by striking ``or government securities dealer'' 
                and adding ``government securities dealer, security-
                based swap dealer or major security-based swap 
                participant'' in its place in subparagraph (C); and
                    (D) by adding ``security-based swap dealer, major 
                security-based swap participant,'' after ``government 
                securities dealer,'' in subparagraph (D); and
            (5) by adding at the end the following:
            ``(65) Eligible contract participant.--The term `eligible 
        contract participant' has the same meaning as in section 1a(13) 
        of the Commodity Exchange Act (7 U.S.C. 1a(13)).
            ``(66) Major swap participant.--The term `major swap 
        participant' has the same meaning as in section 1a(40) of the 
        Commodity Exchange Act (7 U.S.C. 1a(40)).
            ``(67) Major security-based swap participant.--The term 
        `major security-based swap participant' has the same meaning as 
        in section 1a(41) of the Commodity Exchange Act (7 U.S.C. 
        1a(41)).
            ``(68) Security-based swap.--The term `security-based swap' 
        has the same meaning as in section 1a(38) of the Commodity 
        Exchange Act (7 U.S.C. 1a(38)).
            ``(69) Swap.--The term `swap' has the same meaning as in 
        section 1a(35) of the Commodity Exchange Act (7 U.S.C. 1a(35)).
            ``(70) Person associated with a security-based swap dealer 
        or major security-based swap participant.--The term `person 
        associated with a security-based swap dealer or major security-
        based swap participant' or `associated person of a security-
        based swap dealer or major security-based swap participant' has 
        the same meaning as in section 1a(48) of the Commodity Exchange 
        Act (7 U.S.C. 1a(48)).
            ``(71) Security-based swap dealer.--The term `security-
        based swap dealer' has the same meaning as in section 1a(44) of 
        the Commodity Exchange Act (7 U.S.C. 1a(44)).
            ``(72) Appropriate federal banking agency.--The term 
        `appropriate Federal banking agency' has the same meaning as in 
        section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. 
        1813(q)).
            ``(73) Board.--The term `Board' means the Board of 
        Governors of the Federal Reserve System.
            ``(74) Prudential regulator.--The term `Prudential 
        Regulator' has the same meaning as in section 1a(43) of the 
        Commodity Exchange Act (7 U.S.C. 1a(43)).
            ``(75) Swap dealer.--The term `swap dealer' has the same 
        meaning as in section 1a(39) of the Commodity Exchange Act (7 
        U.S.C. 1a(39)).
            ``(76) Security-based swap agreement.--
                    ``(A) In general.--For purposes of sections 10, 16, 
                20, and 21A of this Act, and section 17 of the 
                Securities Act of 1933 (15 U.S.C. 77q), the term 
                `security-based swap agreement' means a swap agreement 
                as defined in section 206A of the Gramm-Leach-Bliley 
                Act (15 U.S.C. 78c note) of which a material term is 
                based on the price, yield, value, or volatility of any 
                security or any group or index of securities, or any 
                interest therein.
                    ``(B) Exclusions.--The term `security-based swap 
                agreement' does not include any security-based swap.''.

SEC. 152. REPEAL OF PROHIBITION ON REGULATION OF SECURITY-BASED SWAPS.

    (a) Repeal of Law.--Section 206B of the Gramm-Leach-Bliley Act (15 
U.S.C. 78c note) is repealed.
    (b) Conforming Amendments to the Securities Act of 1933.--
            (1) Section 2A(b) is amended by striking ``(as defined in 
        section 206B of the Gramm-Leach-Bliley Act)'' each place that 
        such term appears.
            (2) Section 17 of the Securities Act of 1933 (15 U.S.C. 
        77q) is amended--
                    (A) in subsection (a)--
                            (i) by inserting ``(including security-
                        based swaps)'' after ``securities''; and
                            (ii) by striking ``206B of the Gramm-Leach-
                        Bliley Act'' and inserting ``3(a)(76) of the 
                        Securities Exchange Act of 1934''; and
                    (B) in subsection (d), by striking ``206B of the 
                Gramm-Leach-Bliley Act'' and inserting ``3(a)(76) of 
                the Securities Exchange Act of 1934''.
    (c) Conforming Amendments to the Securities Exchange Act of 1934.--
The Securities Exchange Act of 1934 (15 U.S.C. 78a, et seq.) is amended 
as follows:
            (1) Section 3A (15 U.S.C. 78c-1) is amended by striking 
        ``(as defined in section 206B of the Gramm-Leach-Bliley Act)'' 
        each place that the term appears.
            (2) Section 9(a) (15 U.S.C. 78i(a)) is amended by striking 
        paragraphs (2) through (5) and inserting:
            ``(2) To effect, alone or with one or more other persons, a 
        series of transactions in any security registered on a national 
        securities exchange or in connection with any security-based 
        swap with respect to such security creating actual or apparent 
        active trading in such security, or raising or depressing the 
        price of such security, for the purpose of inducing the 
        purchase or sale of such security by others.
            ``(3) If a dealer, broker, security-based swap dealer, 
        major security-based swap participant or other person selling 
        or offering for sale or purchasing or offering to purchase the 
        security to induce the purchase or sale of any security 
        registered on a national securities exchange or any security-
        based swap with respect to such security by the circulation or 
        dissemination in the ordinary course of business of information 
        to the effect that the price of any such security will or is 
        likely to rise or fall because of market operations of any one 
        or more persons conducted for the purpose of raising or 
        depressing the price of such security.
            ``(4) If a dealer, broker, security-based swap dealer, 
        major security-based swap participant or other person selling 
        or offering for sale or purchasing or offering to purchase the 
        security, to make, regarding any security registered on a 
        national securities exchange or any security-based swap with 
        respect to such security, for the purpose of inducing the 
        purchase or sale of such security or such security-based swap, 
        any statement which was at the time and in the light of the 
        circumstances under which it was made, false or misleading with 
        respect to any material fact, and which he knew or had 
        reasonable ground to believe was so false or misleading.
            ``(5) For a consideration, received directly or indirectly 
        from a dealer, broker, security-based swap dealer, major 
        security-based swap participant or other person selling or 
        offering for sale or purchasing or offering to purchase the 
        security, to induce the purchase of any security registered on 
        a national securities exchange or any security-based swap with 
        respect to such security by the circulation or dissemination of 
        information to the effect that the price of any such security 
        will or is likely to rise or fall because of the market 
        operations of any one or more persons conducted for the purpose 
        of raising or depressing the price of such security.''.
            (3) Section 10 (15 U.S.C. 78j) is amended by striking ``(as 
        defined in section 206B of the Gramm-Leach-Bliley Act)'' each 
        place that the term appears.
            (4) Section 15(c)(1) is amended--
                    (A) in subparagraph (A, by striking ``, or any 
                security-based swap agreement (as defined in section 
                206B of the Gramm-Leach-Bliley Act),''; and
                    (B) in subparagraphs (B) and (C), by striking 
                ``agreement (as defined in section 206B of the Gramm-
                Leach-Bliley Act)'' in each place that the term 
                appears.
            (5) Section 15(i) (15 U.S.C. 78o(i), as added by section 
        303(f) of the Commodity Futures Modernization Act of 2000 
        (Public Law 106-554; 114 Stat. 2763A-455) is amended by 
        striking ``(as defined in section 206B of the Gramm-Leach-
        Bliley Act)''.
            (6) Section 16 (15 U.S.C. 78p) is amended--
                    (A) in subsection (a)(2)(C), by striking ``(as 
                defined in section 206(b) of the Gramm-Leach-Bliley 
                Act)'';
                    (B) in subsection (b), by striking ``(as defined in 
                section 206B of the Gramm-Leach-Bliley Act)'' in each 
                place that the term appears; and
                    (C) in subsection (g), by striking ``(as defined in 
                section 206B of the Gramm-Leach-Bliley Act)'';
            (7) Section 20 (15 U.S.C. 78t) is amended--
                    (A) in subsection (d), by striking ``(as defined in 
                section 206B of the Gramm-Leach-Bliley Act)''; and
                    (B) in subsection (f), by striking ``(as defined in 
                section 206B of the Gramm-Leach-Bliley Act)''; and
            (8) Section 21A (15 U.S.C. 78u-1) is amended--
                    (A) in subsection (a)(1), by striking ``(as defined 
                in section 206B of the Gramm-Leach-Bliley Act)''; and
                    (B) in subsection (g), by striking ``(as defined in 
                section 206B of the Gramm-Leach-Bliley Act)''.

SEC. 153. AMENDMENTS TO THE SECURITIES EXCHANGE ACT OF 1934.

    (a) Clearing for Security-based Swaps.--The Securities Exchange Act 
of 1934 (15 U.S.C. 78a, et seq.) is amended by adding the following 
section after section 3A:

``SEC. 3B. CLEARING OF SECURITY-BASED SWAPS.

    ``(a) Clearing Requirement.--
            ``(1) Clearing of security-based swaps.--
                    ``(A) Clearing requirement.--The Commission shall 
                monitor security-based swap activity and transaction 
                data and by rule or regulation identify specific 
                security-based swap contracts that it determines are 
                required to be cleared consistent with the public 
                interest, after taking into account--
                            ``(i) the existence of significant 
                        outstanding notional exposures, trading 
                        liquidity and adequate pricing data;
                            ``(ii) the availability of one or more swap 
                        clearinghouses with the rule framework, 
                        capacity, operational expertise and resources, 
                        and credit support infrastructure to clear the 
                        contract on terms that are consistent with the 
                        material terms and trading conventions on which 
                        the contract is then traded;
                            ``(iii) the impact on the mitigation of 
                        systemic risk, taking into account the size of 
                        the market for such contract and the resources 
                        of the swap clearinghouses available to clear 
                        the contract;
                            ``(iv) the impact on competition; and
                            ``(v) the existence of reasonable legal 
                        certainty in the event of the insolvency of the 
                        relevant swap clearinghouse or one or more of 
                        its clearing members with regard to the 
                        treatment of customer and swap counterparty 
                        positions, funds, and property.
                    ``(B) Scope of clearing functions.--The Commission 
                shall by rule or regulation define the scope of the 
                clearing functions that are necessary to satisfy the 
                requirements of subparagraph (A).
            ``(2) Prevention of evasion.--The Commission and the 
        Commodities Futures Trading Commission shall have authority to 
        prescribe rules under this section, or issue interpretations of 
        such rules, as necessary to prevent evasions of this Act. Any 
        such rules or interpretations of rules shall be prescribed and 
        issued jointly by both Commissions.
            ``(3) Required reporting.--
                    ``(A) In general.--Any security-based swap that is 
                not accepted for clearing by any clearing agency shall 
                be reported to either a security-based swap repository 
                described in section 13(n) or, if there is no 
                repository that would accept the security-based swap, 
                to the Commission pursuant to section 13A within such 
                time period as the Commission may by rule prescribe.
                    ``(B) Authority of swap dealer to report.--
                Counterparties to a security-based swap may agree as to 
                which counterparty will report such swap as required by 
                subparagraph (A). In any security-based swap where only 
                one counterparty is a swap dealer, the swap dealer 
                shall report the swap.
            ``(4) Transition rules.--Rules adopted by the Commission 
        under this section shall provide for the reporting of data, as 
        follows:
                    ``(A) Security-based swaps that were entered into 
                before the date of enactment of the Over-the-Counter 
                Derivatives Markets Act of 2009 shall be reported to a 
                registered security-based swap repository or the 
                Commission no later than 180 days after the effective 
                date of such Act.
                    ``(B) Security-based swaps that were entered into 
                on or after the date of enactment of the Over-the-
                Counter Derivatives Markets Act of 2009 shall be 
                reported to a registered security-based swap repository 
                or the Commission no later than the later of--
                            ``(i) 90 days after the effective date of 
                        such Act; or
                            ``(ii) such other time after entering into 
                        the swap as the Commission may prescribe by 
                        rule or regulation.
    ``(b) Consultation.--The Commission and the Commodity Futures 
Trading Commission shall consult with the appropriate Federal banking 
agencies and each other prior to adopting rules under this section.''.
    (b) Clearing Agency Requirements.--Section 17A of the Securities 
Exchange Act of 1934 (15 U.S.C. 78q) is amended by adding at the end 
the following new subsections:
    ``(g) Registration Requirement.--It shall be unlawful for a 
clearing agency, unless registered with the Commission, directly or 
indirectly to make use of the mails or any means or instrumentality of 
interstate commerce to perform the functions of a clearing agency with 
respect to a swap.
    ``(h) Voluntary Registration.--
            ``(1) Clearing agencies.--A person that clears agreements, 
        contracts, or transactions that are not required to be cleared 
        under this Act may register with the Commission as a clearing 
        agency.
            ``(2) Derivatives clearing organizations.--A clearing 
        agency may clear swaps that are required to be cleared by a 
        person who is registered as a derivatives clearing organization 
        under the Commodity Exchange Act (7 U.S.C. 1, et seq.).
    ``(i) Required Registration for Banks and Clearing Agencies.--A 
person that is required to be registered as a clearing agency under 
this section shall register with the Commission regardless of whether 
the person is also a bank or a derivatives clearing organization 
registered with the Commodity Futures Trading Commission under the 
Commodity Exchange Act (7 U.S.C. 1, et seq.).
    ``(j) Reporting.--
            ``(1) In general.--A clearing agency that clears security-
        based swaps shall provide to the Commission all information 
        determined by the Commission to be necessary to perform its 
        responsibilities under this Act. The Commission shall adopt 
        data collection and maintenance requirements for security-based 
        swaps cleared by clearing agencies that are comparable to the 
        corresponding requirements for security-based swaps accepted by 
        security-based swap repositories and security-based swaps 
        traded on alternative swap execution facilities. The Commission 
        shall share such information, upon request, with the Board, the 
        Commodity Futures Trading Commission, the appropriate Federal 
        banking agencies, the Financial Services Oversight Council, and 
        the Department of Justice or to other persons the Commission 
        deems appropriate, including foreign financial supervisors 
        (including foreign futures authorities), foreign central banks, 
        and foreign ministries.
            ``(2) Public information.--A clearing agency that clears 
        security-based swaps shall provide to the Commission, or its 
        designee, such information as is required by, and in a form and 
        at a frequency to be determined by, the Commission, in order to 
        comply with the public reporting requirements contained in 
        section 13.
    ``(k) Designation of Compliance Officer.--
            ``(1) In general.--Each clearing agency that clears 
        security-based swaps shall designate an individual to serve as 
        a compliance officer.
            ``(2) Duties.--The compliance officer shall--
                    ``(A) report directly to the board or to the senior 
                officer of the clearing agency;
                    ``(B) in consultation with the board of the 
                clearing agency, a body performing a function similar 
                to that of a board, or the senior officer of the 
                clearing agency, resolve any conflicts of interest that 
                may arise;
                    ``(C) be responsible for administering the policies 
                and procedures required to be established pursuant to 
                this section;
                    ``(D) ensure compliance with securities laws and 
                the rules and regulations issued thereunder, including 
                rules prescribed by the Commission pursuant to this 
                section; and
                    ``(E) establish procedures for remediation of 
                noncompliance issues found during compliance office 
                reviews, lookbacks, internal or external audit 
                findings, self-reported errors, or through validated 
                complaints which will establish the handling, 
                management response, remediation, retesting, and 
                closing of noncompliance issues.
            ``(3) Annual reports required.--The compliance officer 
        shall annually prepare and sign a report on the compliance of 
        the clearing agency with the securities laws and its policies 
        and procedures, including its code of ethics and conflict of 
        interest policies, in accordance with rules prescribed by the 
        Commission. Such compliance report shall accompany the 
        financial reports of the clearing agency that are required to 
        be furnished to the Commission pursuant to this section and 
        shall include a certification that, under penalty of law, the 
        report is accurate and complete.
    ``(l) Core Principles for Clearing Agencies.--
            ``(1) In general.--To be registered and to maintain 
        registration as a clearing agency, a clearing agency shall 
        comply with the core principles specified in this subsection. 
        The Commission may conform the core principles to reflect 
        evolving United States and international standards. Except 
        where the Commission determines otherwise by rule or 
        regulation, a clearing agency shall have reasonable discretion 
        in establishing the manner in which it complies with the core 
        principles.
            ``(2) Financial resources.--
                    ``(A) The clearing agency shall have adequate 
                financial, operational, and managerial resources to 
                discharge its responsibilities.
                    ``(B) Financial resources shall at a minimum exceed 
                the total amount that would--
                            ``(i) enable the clearing agency to meet 
                        its financial obligations to its members and 
                        participants notwithstanding a default by the 
                        member or participant creating the largest 
                        financial exposure for that clearing agency in 
                        extreme but plausible market conditions; and
                            ``(ii) enable the clearing agency to cover 
                        its operating costs for a period of one year, 
                        calculated on a rolling basis.
            ``(3) Participant and product eligibility.--
                    ``(A) The clearing agency shall establish--
                            ``(i) appropriate admission and continuing 
                        eligibility standards (including sufficient 
                        financial resources and operational capacity to 
                        meet obligations arising from participation in 
                        the clearing agency) for members of and 
                        participants in the organization; and
                            ``(ii) appropriate standards for 
                        determining eligibility of agreements, 
                        contracts, or transactions submitted to the 
                        clearing agency for clearing.
                    ``(B) The clearing agency shall have procedures in 
                place to verify that participation and membership 
                requirements are met on an ongoing basis.
                    ``(C) The clearing agency's participation and 
                membership requirements shall be objective, publicly 
                disclosed, and permit fair and open access.
                    ``(D) The rules of the clearing agency shall 
                provide for acceptance of a standardized security-based 
                swap regardless of the system on which the transaction 
                was executed.
            ``(4) Risk management.--
                    ``(A) The clearing agency shall have the ability to 
                manage the risks associated with discharging the 
                responsibilities of a clearing agency through the use 
                of appropriate tools and procedures.
                    ``(B) The clearing agency shall measure its credit 
                exposures to its members and participants at least once 
                each business day and shall monitor such exposures 
                throughout the business day.
                    ``(C) Through margin requirements and other risk 
                control mechanisms, a clearing agency shall limit its 
                exposures to potential losses from defaults by its 
                members and participants so that the operations of the 
                clearing agency would not be disrupted and 
                nondefaulting members or participants would not be 
                exposed to losses that they cannot anticipate or 
                control.
                    ``(D) Margin required from all members and 
                participants shall be sufficient to cover potential 
                exposures in normal market conditions.
                    ``(E) The models and parameters used in setting 
                margin requirements shall be risk-based and reviewed 
                regularly.
            ``(5) Settlement procedures.--The clearing agency shall--
                    ``(A) complete money settlements on a timely basis, 
                and not less than once each business day;
                    ``(B) employ money settlement arrangements that 
                eliminate or strictly limit the clearing agency's 
                exposure to settlement bank risks, such as credit and 
                liquidity risks from the use of banks to effect money 
                settlements;
                    ``(C) ensure money settlements are final when 
                effected;
                    ``(D) maintain an accurate record of the flow of 
                funds associated with each money settlement;
                    ``(E) have the ability to comply with the terms and 
                conditions of any permitted netting or offset 
                arrangements with other clearing organizations; and
                    ``(F) for physical settlements, establish rules 
                that clearly state the clearing agency's obligations 
                with respect to physical deliveries. The risks from 
                these obligations shall be identified and managed.
            ``(6) Treatment of funds.--
                    ``(A) The clearing agency shall have standards and 
                procedures designed to protect and ensure the safety of 
                member and participant funds and assets.
                    ``(B) The clearing agency shall hold member and 
                participant funds and assets in a manner whereby risk 
                of loss or of delay in the clearing agency's access to 
                the assets and funds is minimized.
                    ``(C) Assets and funds invested by the clearing 
                agency shall be held in instruments with minimal 
                credit, market, and liquidity risks.
            ``(7) Default rules and procedures.--
                    ``(A) The clearing agency shall have rules and 
                procedures designed to allow for the efficient, fair, 
                and safe management of events when members or 
                participants become insolvent or otherwise default on 
                their obligations to the clearing agency.
                    ``(B) The clearing agency's default procedures 
                shall be clearly stated, and they shall ensure that the 
                clearing agency can take timely action to contain 
                losses and liquidity pressures and to continue meeting 
                its obligations.
                    ``(C) The default procedures shall be publicly 
                available.
            ``(8) Rule enforcement.--The clearing agency shall--
                    ``(A) maintain adequate arrangements and resources 
                for the effective monitoring and enforcement of 
                compliance with rules of the clearing agency and for 
                resolution of disputes; and
                    ``(B) have the authority and ability to discipline, 
                limit, suspend, or terminate a member's or 
                participant's activities for violations of rules of the 
                clearing agency.
            ``(9) System safeguards.--The clearing agency shall--
                    ``(A) establish and maintain a program of risk 
                analysis and oversight to identify and minimize sources 
                of operational risk through the development of 
                appropriate controls and procedures, and the 
                development of automated systems, that are reliable, 
                secure, and have adequate scalable capacity;
                    ``(B) establish and maintain emergency procedures, 
                backup facilities, and a plan for disaster recovery 
                that allows for the timely recovery and resumption of 
                operations and the fulfillment of the clearing agency's 
                responsibilities and obligations; and
                    ``(C) periodically conduct tests to verify that 
                backup resources are sufficient to ensure continued 
                order processing and trade matching, price reporting, 
                market surveillance, and maintenance of a comprehensive 
                and accurate audit trail.
            ``(10) Reporting.--The clearing agency shall provide to the 
        Commission all information necessary for the Commission to 
        conduct oversight of the clearing agency.
            ``(11) Recordkeeping.--The clearing agency shall maintain 
        records of all activities related to the business of the 
        clearing agency as a clearing agency in a form and manner 
        acceptable to the Commission for a period of 5 years.
            ``(12) Public information.--
                    ``(A) The clearing agency shall provide market 
                participants with sufficient information to identify 
                and evaluate accurately the risks and costs associated 
                with using the clearing agency's services.
                    ``(B) The clearing agency shall make information 
                concerning the rules and operating procedures governing 
                its clearing and settlement systems (including default 
                procedures) available to market participants.
                    ``(C) The clearing agency shall disclose publicly 
                and to the Commission information concerning--
                            ``(i) the terms and conditions of 
                        contracts, agreements, and transactions cleared 
                        and settled by the clearing agency;
                            ``(ii) clearing and other fees that the 
                        clearing agency charges its members and 
                        participants;
                            ``(iii) the margin-setting methodology and 
                        the size and composition of the financial 
                        resource package of the clearing agency;
                            ``(iv) other information relevant to 
                        participation in the settlement and clearing 
                        activities of the clearing agency; and
                            ``(v) daily settlement prices, volume, and 
                        open interest for all contracts settled or 
                        cleared by it.
            ``(13) Information-sharing.--The clearing agency shall--
                    ``(A) enter into and abide by the terms of all 
                appropriate and applicable domestic and international 
                information-sharing agreements; and
                    ``(B) use relevant information obtained from the 
                agreements in carrying out the clearing organization's 
                risk management program.
            ``(14) Antitrust considerations.--Unless appropriate to 
        achieve the purposes of this chapter, the clearing agency shall 
        avoid--
                    ``(A) adopting any rule or taking any action that 
                results in any unreasonable restraint of trade; or
                    ``(B) imposing any material anticompetitive burden.
            ``(15) Governance fitness standards.--
                    ``(A) The clearing agency shall establish 
                governance arrangements that are transparent in order 
                to fulfill public interest requirements and to support 
                the objectives of owners and participants.
                    ``(B) The clearing agency shall establish and 
                enforce appropriate fitness standards for directors, 
                members of any disciplinary committee, and members of 
                the clearing agency, and any other persons with direct 
                access to the settlement or clearing activities of the 
                clearing agency, including any parties affiliated with 
                any of the persons described in this subparagraph.
            ``(16) Conflicts of interest.--The clearing agency shall 
        establish and enforce rules to minimize conflicts of interest 
        in the decisionmaking process of the clearing agency and 
        establish a process for resolving such conflicts of interest.
            ``(17) Composition of the boards.--The clearing agency 
        shall ensure that the composition of the governing board or 
        committee includes market participants.
            ``(18) Legal risk.--The clearing agency shall have a well-
        founded, transparent, and enforceable legal framework for each 
        aspect of its activities.
    ``(m) Consultation.--The Commission and the Commodity Futures 
Trading Commission shall consult with the appropriate Federal banking 
agencies and each other prior to adopting rules under this section.
    ``(n) Harmonization of Rules.--Not later than 180 days after the 
effective date of the Over-the-Counter Derivatives Markets Act of 2009, 
the Commission and the Commodity Futures Trading Commission shall 
jointly adopt uniform rules governing persons that are registered as 
derivatives clearing organizations for swaps under the Commodity 
Exchange Act (7 U.S.C. 1, et seq.) and persons that are registered as 
clearing agencies for security-based swaps under the Securities 
Exchange Act of 1934 (15 U.S.C. 78a, et seq.).''.
    (c) Execution of Security-based Swaps.--The Securities Exchange Act 
of 1934 (15 U.S.C. 78a, et seq.) is amended by inserting after section 
5 the following:

``SEC. 5A. EXECUTION OF SECURITY-BASED SWAPS.

    ``(a) Trade Execution.--With respect to transactions involving 
security-based swaps subject to the requirement of section 3B and where 
both counterparties are either security-based swap dealers or major 
security-based swap participants, such counterparties must either:
            ``(1) execute the transaction on a national securities 
        exchange registered pursuant to section 6(a) (in which event 
        such transaction shall be subject to regulation under this 
        title as a transaction in a security);
            ``(2) execute the transaction on a swap execution facility 
        registered with the Commission;
            ``(3) execute the transaction on a foreign swap execution 
        facility that is subject to regulation as such under the laws 
        of a foreign jurisdiction; or
            ``(4) if the transaction is not executed on an entity 
        listed in paragraph (1), (2), or (3), comply with any 
        recordkeeping and end-of-day transaction reporting 
        requirements--
                    ``(A) as may be prescribed by the Commission with 
                respect to security-based swaps subject to the 
                requirements of section 3B and where both 
                counterparties are either security-based swap dealers 
                or major security-based swap participants; or
                    ``(B) as may be prescribed by the relevant foreign 
                regulator in the case of security-based swaps subject 
                to the requirements of section 3B and where both 
                counterparties are either security-based swap dealers 
                or major security-based swap participants entered into 
                by--
                            ``(i) a foreign swap dealer or a foreign 
                        swap market participant; or
                            ``(ii) a non-foreign swap dealer or major 
                        swap participant that is entering into the 
                        security-based swap either outside of the 
                        United States, its territories and possessions 
                        or with a foreign counterparty.
    ``(b) Exchange Trading.--In adopting rules and regulations, the 
Commission shall endeavor to eliminate unnecessary impediments to the 
trading on national securities exchanges or swap execution facilities, 
agreements or transactions that would be commodity swaps but for the 
trading of such contracts, agreements or transactions on such a 
designated contract market.''''.
    (d) Alternative Swap Execution Facilities.--The Securities Exchange 
Act of 1934 (15 U.S.C. 78a, et seq.) is amended by adding after section 
3B the following:

``SEC. 3C. ALTERNATIVE SWAP EXECUTION FACILITIES.

    ``(a) Registration.--
            ``(1) In general.--No person may operate a facility for the 
        trading of security-based swaps unless the facility is 
        registered as an alternative swap execution facility under this 
        section.
            ``(2) Dual registration.--Any person that is required to be 
        registered as an alternative swap execution facility under this 
        section shall register with the Commission regardless of 
        whether that person also is registered with the Commodity 
        Futures Trading Commission as an alternative swap execution 
        facility.
    ``(b) Requirements for Trading.--An alternative swap execution 
facility that is registered under subsection (a) may trade any 
security-based swap.
    ``(c) Trading by Exchanges.--An exchange shall, to the extent that 
the exchange also operates an alternative swap execution facility and 
uses the same electronic trade execution system for trading on the 
exchange and the alternative swap execution facility, identify whether 
the electronic trading is taking place on the exchange or the 
alternative swap execution facility.
    ``(d) Criteria for Registration.--
            ``(1) In general.--To be registered as an alternative swap 
        execution facility, the facility shall be required to 
        demonstrate to the Commission that it meets the criteria 
        specified herein.
            ``(2) Deterrence of abuses.--The swap execution facility 
        shall establish and enforce trading and participation rules 
        that will deter abuses and have the capacity to detect, 
        investigate, and enforce those rules, including means to--
                    ``(A) obtain information necessary to perform the 
                functions required under this section; or
                    ``(B) use means to--
                            ``(i) provide market participants with 
                        impartial access to the market; and
                            ``(ii) capture information that may be used 
                        in establishing whether rule violations have 
                        occurred.
            ``(3) Trading procedures.--The swap execution facility 
        shall establish and enforce rules or terms and conditions 
        defining, or specifications detailing, trading procedures to be 
        used in entering and executing orders traded on or through its 
        facilities.
            ``(4) Financial integrity of transactions.--The swap 
        execution facility shall establish and enforce rules and 
        procedures for ensuring the financial integrity of security-
        based swaps entered on or through its facilities, including the 
        clearance and settlement of the security-based swaps.
    ``(e) Core Principles for Alternative Swap Execution Facilities.--
            ``(1) In general.--To maintain its registration as an 
        alternative swap execution facility, the facility shall comply 
        with the core principles specified in this subsection and any 
        requirement that the Commission may impose by rule or 
        regulation. Except where the Commission determines otherwise by 
        rule or regulation, the facility shall have reasonable 
        discretion in establishing the manner in which it complies with 
        these core principles.
            ``(2) Compliance with rules.--The swap execution facility 
        shall monitor and enforce compliance with any of the rules of 
        the facility, including the terms and conditions of the 
        security-based swaps traded on or through the facility and any 
        limitations on access to the facility.
            ``(3) Security-based swaps not readily susceptible to 
        manipulation.--The swap execution facility shall permit trading 
        only in security-based swaps that are not readily susceptible 
        to manipulation.
            ``(4) Monitoring of trading.--The swap execution facility 
        shall monitor trading in security-based swaps to prevent 
        manipulation and price distortion through surveillance, 
        compliance, and disciplinary practices and procedures, 
        including methods for conducting real-time monitoring of 
        trading and comprehensive and accurate trade reconstructions.
            ``(5) Ability to obtain information.--The swap execution 
        facility shall--
                    ``(A) establish and enforce rules that will allow 
                the facility to obtain any necessary information to 
                perform any of the functions described in this 
                subsection;
                    ``(B) provide the information to the Commission 
                upon request; and
                    ``(C) have the capacity to carry out such 
                international information-sharing agreements as the 
                Commission may require.
            ``(6) Emergency authority.--The swap execution facility 
        shall adopt rules to provide for the exercise of emergency 
        authority, in consultation or cooperation with the Commission, 
        where necessary and appropriate, including the authority to 
        suspend or curtail trading in a security-based swap.
            ``(7) Timely publication of trading information.--The swap 
        execution facility shall make public timely information on 
        price, trading volume, and other trading data to the extent 
        prescribed by the Commission.
            ``(8) Recordkeeping and reporting.--The swap execution 
        facility shall maintain records of all activities related to 
        the business of the facility, including a complete audit trail, 
        in a form and manner acceptable to the Commission for a period 
        of 5 years, and report to the Commission all information 
        determined by the Commission to be necessary or appropriate for 
        the Commission to perform its responsibilities under this Act 
        in a form and manner acceptable to the Commission. The 
        Commission shall adopt data collection and reporting 
        requirements for alternative swap execution facilities that are 
        comparable to corresponding requirements for clearing agencies 
        and security-based swap repositories.
            ``(9) Antitrust considerations.--Unless necessary or 
        appropriate to achieve the purposes of this Act, the swap 
        execution facility shall avoid--
                    ``(A) adopting any rules or taking any actions that 
                result in any unreasonable restraints of trade; or
                    ``(B) imposing any material anticompetitive burden 
                on trading on the swap execution facility.
            ``(10) Conflicts of interest.--The swap execution facility 
        shall--
                    ``(A) establish and enforce rules to minimize 
                conflicts of interest in its decision-making process; 
                and
                    ``(B) establish a process for resolving the 
                conflicts of interest.
            ``(11) Designation of compliance officer.--
                    ``(A) In general.--Each alternative swap execution 
                facility shall designate an individual to serve as a 
                compliance officer.
                    ``(B) Duties.--The compliance officer--
                            ``(i) shall report directly to the board or 
                        to the senior officer of the facility;
                            ``(ii) shall--
                                    ``(I) review compliance with the 
                                core principles in section 3B(e).
                                    ``(II) in consultation with the 
                                board of the facility, a body 
                                performing a function similar to that 
                                of a board, or the senior officer of 
                                the facility, resolve any conflicts of 
                                interest that may arise;
                                    ``(III) be responsible for 
                                administering the policies and 
                                procedures required to be established 
                                pursuant to this section; and
                                    ``(IV) ensure compliance with 
                                securities laws and the rules and 
                                regulations issued thereunder, 
                                including rules prescribed by the 
                                Commission pursuant to this section; 
                                and
                            ``(iii) shall establish procedures for 
                        remediation of non-compliance issues found 
                        during compliance office reviews, lookbacks, 
                        internal or external audit findings, self-
                        reported errors, or through validated 
                        complaints. Procedures will establish the 
                        handling, management response, remediation, 
                        retesting, and closing of noncompliant issues.
                    ``(C) Annual reports required.--The compliance 
                officer shall annually prepare and sign a report on the 
                compliance of the facility with the securities laws and 
                its policies and procedures, including its code of 
                ethics and conflict of interest policies, in accordance 
                with rules prescribed by the Commission. Such 
                compliance report shall accompany the financial reports 
                of the facility that are required to be furnished to 
                the Commission pursuant to this section and shall 
                include a certification that, under penalty of law, the 
                report is accurate and complete.
    ``(f) Exemptions.--The Commission may exempt, conditionally or 
unconditionally, an alternative swap execution facility from 
registration under this section if the Commission finds that such 
organization is subject to comparable, comprehensive supervision and 
regulation on a consolidated basis by the Commodity Futures Trading 
Commission, a Prudential Regulator or the appropriate governmental 
authorities in the organization's home country.
    ``(g) Harmonization of Rules.--Not later than 180 days after the 
date of enactment of the Over-the-Counter Derivatives Markets Act of 
2009, the Commission and the Commodity Futures Trading Commission shall 
jointly prescribe rules governing the regulation of alternative swap 
execution facilities under this section and section 5h of the Commodity 
Exchange Act (7 U.S.C. 7b-3).''.
    (e) Segregation of Assets Held as Collateral in Swap 
Transactions.--The Securities Exchange Act of 1934 (15 U.S.C. 78a, et 
seq.) is further amended by adding after section 3C (as added by 
subsection (b) the following:

``SEC. 3D. SEGREGATION OF ASSETS HELD AS COLLATERAL IN SWAP 
              TRANSACTIONS.

    ``(a) Cleared Swaps.--A security-based swap dealer or clearing 
agency by or through which funds or other property are held as margin 
or collateral to secure the obligations of a counterparty under a 
security-based swap to be cleared by or through a derivatives clearing 
agency shall segregate, maintain, and use the funds or other property 
for the benefit of the counterparty, in accordance with such rules and 
regulations as the Commission or Prudential Regulator shall prescribe. 
Any such funds or other property shall be treated as customer property 
under this Act.
    ``(b) Over-the-counter Swaps.--At the request of a counterparty to 
a security-based swap who provides funds or other property to a swap 
dealer as margin or collateral to secure the obligations of the 
counterparty under a security-based swap between the counterparty and 
the swap dealer that is not submitted for clearing to a derivatives 
clearing agency, the swap dealer shall segregate the funds or other 
property for the benefit of the counterparty, and maintain the funds or 
other property in an account which is carried by a third-party 
custodian and designated as a segregated account for the counterparty, 
in accordance with such rules and regulations as the Commission or 
Prudential Regulator may prescribe. This subsection shall not be 
interpreted to preclude commercial arrangements regarding the 
investment of the segregated funds or other property and the related 
allocation of gains and losses resulting from any such investment.''.
    (f) Trading in Security-based Swap Agreements.--Section 6 of the 
Securities Exchange Act of 1934 (15 U.S.C. 78f) is amended by adding at 
the end the following:
    ``(l) It shall be unlawful for any person to effect a transaction 
in a security-based swap with or for a person that is not an eligible 
contract participant unless such transaction is effected on a national 
securities exchange registered pursuant to subsection (b).''.
    (g) Additions of Security-based Swaps to Certain Enforcement 
Provisions.--Paragraphs (1) through (3) of section 9(b) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78i(b)(1)-(3)) are amended 
to read as follows:
            ``(1) any transaction in connection with any security 
        whereby any party to such transaction acquires (A) any put, 
        call, straddle, or other option or privilege of buying the 
        security from or selling the security to another without being 
        bound to do so; (B) any security futures product on the 
        security; or (C) any security-based swap involving the security 
        or the issuer of the security;
            ``(2) any transaction in connection with any security with 
        relation to which he has, directly or indirectly, any interest 
        in any (A) such put, call, straddle, option, or privilege; (B) 
        such security futures product; or (C) such security-based swap; 
        or
            ``(3) any transaction in any security for the account of 
        any person who he has reason to believe has, and who actually 
        has, directly or indirectly, any interest in any (A) such put, 
        call, straddle, option, or privilege; (B) such security futures 
        product with relation to such security; or (C) any security-
        based swap involving such security or the issuer of such 
        security.''.
    (h) Rulemaking Authority To Prevent Fraud, Manipulation, and 
Deceptive Conduct in Security-based Swaps.--Section 9 of the Securities 
Exchange Act of 1934 (15 U.S.C. 78i) is amended by adding at the end 
the following:
    ``(i) It shall be unlawful for any person, directly or indirectly, 
by the use of any means or instrumentality of interstate commerce or of 
the mails, or of any facility of any national securities exchange, to 
effect any transaction in, or to induce or attempt to induce the 
purchase or sale of, any security-based swap, in connection with which 
such person engages in any fraudulent, deceptive, or manipulative act 
or practice, makes any fictitious quotation, or engages in any 
transaction, practice, or course of business which operates as a fraud 
or deceit upon any person. The Commission shall, for the purposes of 
this paragraph, by rules and regulations define, and prescribe means 
reasonably designed to prevent, such transactions, acts, practices, and 
courses of business as are fraudulent, deceptive, or manipulative, and 
such quotations as are fictitious.''.
    (i) Position Limits and Position Accountability for Security-based 
Swaps.--The Securities Exchange Act of 1934 is amended by inserting 
after section 10A (15 U.S.C. 78j-1) the following new section:

``SEC. 10B. POSITION LIMITS AND POSITION ACCOUNTABILITY FOR SECURITY-
              BASED SWAPS AND LARGE TRADER REPORTING.

    ``(a) Position Limits.--As a means reasonably designed to prevent 
fraud and manipulation, the Commission may, by rule or regulation, as 
necessary or appropriate in the public interest or for the protection 
of investors, establish limits (including related hedge exemption 
provisions) on the size of positions in any security-based swap or 
security-based swap agreement that may be held by any person. In 
establishing such limits, the Commission may require any person to 
aggregate positions in--
            ``(1) any security-based swap and any security or loan or 
        group or index of securities or loans on which such security-
        based swap is based, which such security-based swap references, 
        or to which such security-based swap is related as described in 
        section (a)(3) of the Over-the-Counter Derivatives Markets Act 
        of 2009, and any security-based swap agreement and any other 
        instrument relating to such security or loan or group or index 
        of securities or loans; or
            ``(2) any security-based swap and (A) any security or group 
        or index of securities, the price, yield, value, or volatility 
        of which, or of which any interest therein, is the basis for a 
        material term of such security-based swap as described in 
        section 3(a)(76) of the Securities Exchange Act of 1934 and (B) 
        any security-based swap and any other instrument relating to 
        the same security or group or index of securities.
    ``(b) Exemptions.--The Commission, by rule, regulation, or order, 
may conditionally or unconditionally exempt any person or class of 
persons, any security-based swap or class of security-based swaps, or 
any transaction or class of transactions from any requirement it may 
establish under this section with respect to position limits.
    ``(c) SRO Rules.--
            ``(1) In general.--As a means reasonably designed to 
        prevent fraud or manipulation, the Commission, by rule, 
        regulation, or order, as necessary or appropriate in the public 
        interest, for the protection of investors, or otherwise in 
        furtherance of the purposes of this title, may direct a self-
        regulatory organization--
                    ``(A) to adopt rules regarding the size of 
                positions in any security-based swap that may be held 
                by--
                            ``(i) any member of such self-regulatory 
                        organization; or
                            ``(ii) any person for whom a member of such 
                        self-regulatory organization effects 
                        transactions in such security-based swap or 
                        other security-based swap agreement; and
                    ``(B) to adopt rules reasonably designed to ensure 
                compliance with requirements prescribed by the 
                Commission under paragraph (c)(1)(A).
            ``(2) Requirement to aggregate positions.--In establishing 
        such limits, the self-regulatory organization may require such 
        member or person to aggregate positions in--
                    ``(A) any security-based swap and any security or 
                loan or group or index of securities or loans on which 
                such security-based swap is based, which such security-
                based swap references, or to which such security-based 
                swap is related as described in section 3(a) of the 
                Over-the-Counter Derivatives Markets Act of 2009, and 
                any security-based swap agreement and any other 
                instrument relating to such security or loan or group 
                or index of securities or loans; or
                    ``(B)(i) any security-based swap;
                    ``(ii) any security or group or index of 
                securities, the price, yield, value, or volatility of 
                which, or of which any interest therein, is the basis 
                for a material term of such security-based swap as 
                described in section 3(a)(76) of the Securities 
                Exchange Act of 1934; and
                    ``(iii) any security-based swap and any other 
                instrument relating to the same security or group or 
                index of securities.
    ``(d) Large Trader Reporting.--The Commission, by rule or 
regulation, may require any person that effects transactions for such 
person's own account or the account of others in any securities-based 
swap or security-based swap agreement and any security or loan or group 
or index of securities or loans as set forth in paragraphs (a)(1) and 
(2) under this section to report such information as the Commission may 
prescribe regarding any position or positions in any security-based 
swap or security-based swap agreement and any security or loan or group 
or index of securities or loans and any other instrument relating to 
such security or loan or group or index of securities or loans as set 
forth in paragraphs (a)(1) and (2) under this section.''.
    (j) Public Reporting and Repositories for Security-based Swap 
Agreements.--Section 13 of the Securities Exchange Act of 1934 (15 
U.S.C. 78m) is amended by adding at the end the following:
    ``(m) Public Reporting of Aggregate Security-based Swap Data.--
            ``(1) In general.--The Commission, or a person designated 
        by the Commission pursuant to paragraph (2), shall make 
        available to the public, in a manner that does not disclose the 
        business transactions and market positions of any person, 
        aggregate data on security-based swap trading volumes and 
        positions from the sources set forth in paragraph (3).
            ``(2) Designee of the commission.--The Commission may 
        designate a clearing agency or a security-based swap repository 
        to carry out the public reporting described in paragraph (1).
            ``(3) Sources of information.--The sources of the 
        information to be publicly reported as described in paragraph 
        (1) are--
                    ``(A) clearing agencies pursuant to section 3A;
                    ``(B) security-based swap repositories pursuant to 
                subsection (n); and
                    ``(C) reports received by the Commission pursuant 
                to section 13A.
    ``(n) Security-based Swap Repositories.--
            ``(1) Registration requirement.--
                    ``(A) In general.--It shall be unlawful for a 
                security-based swap repository, unless registered with 
                the Commission, directly or indirectly to make use of 
                the mails or any means or instrumentality of interstate 
                commerce to perform the functions of a security-based 
                swap repository.
                    ``(B) Inspection and examination.--Registered 
                security-based swap repositories shall be subject to 
                inspection and examination by any representatives of 
                the Commission.
            ``(2) Standard setting.--
                    ``(A) Data identification.--The Commission shall 
                prescribe standards that specify the data elements for 
                each security-based swap that shall be collected and 
                maintained by each security-based swap repository.
                    ``(B) Data collection and maintenance.--The 
                Commission shall prescribe data collection and data 
                maintenance standards for security-based swap 
                repositories.
                    ``(C) Comparability.--The standards prescribed by 
                the Commission under this subsection shall be 
                comparable to the data standards imposed by the 
                Commission on clearing agencies that clear security-
                based swaps.
            ``(3) Duties.--A security-based swap repository shall--
                    ``(A) accept data prescribed by the Commission for 
                each security-based swap under this paragraph (2);
                    ``(B) maintain such data in such form and manner 
                and for such period as may be required by the 
                Commission;
                    ``(C) provide to the Commission, or its designee, 
                such information as is required by, and in a form and 
                at a frequency to be determined by, the Commission, in 
                order to comply with the public reporting requirements 
                contained in subsection (m); and
                    ``(D) make available, on a confidential basis, all 
                data obtained by the security-based swap repository, 
                including individual counterparty trade and position 
                data, to the Commission, the appropriate Federal 
                banking agencies, the Commodity Futures Trading 
                Commission, the Financial Services Oversight Council, 
                and the Department of Justice or to other persons the 
                Commission deems appropriate, including foreign 
                financial supervisors (including foreign futures 
                authorities), foreign central banks, and foreign 
                ministries.
            ``(4) Required registration for security-based swap 
        repositories.--Any person that is required to be registered as 
        a securities-based swap repository under this subsection shall 
        register with the Commission, regardless of whether that person 
        also is registered with the Commodity Futures Trading 
        Commission as a swap repository.
            ``(5) Harmonization of rules.--Not later than 180 days 
        after the date of enactment of the Over-the-Counter Derivatives 
        Markets Act of 2009, the Commission and the Commodity Futures 
        Trading Commission shall jointly adopt uniform rules governing 
        persons that are registered under this section and persons that 
        are registered as swap repositories under the Commodity 
        Exchange Act (7 U.S.C. 1, et seq.), including uniform rules 
        that specify the data elements that shall be collected and 
        maintained by each repository.
            ``(6) Exemptions.--The Commission may exempt, conditionally 
        or unconditionally, a security-based swap repository from the 
        requirements of this section if the Commission finds that such 
        security-based swap repository is subject to comparable, 
        comprehensive supervision or regulation on a consolidated basis 
        by the Commodity Futures Trading Commission, a Prudential 
        Regulator or the appropriate governmental authorities in the 
        organization's home country.''.

SEC. 154. REGISTRATION AND REGULATION OF SWAP DEALERS AND MAJOR SWAP 
              PARTICIPANTS.

    The Securities Exchange Act of 1934 (15 U.S.C. 78a, et seq.) is 
amended by inserting after section 15E (15 U.S.C. 78o-7) the following:

``SEC. 15F. REGISTRATION AND REGULATION OF SECURITY-BASED SWAP DEALERS 
              AND MAJOR SECURITY-BASED SWAP PARTICIPANTS.

    ``(a) Registration.--
            ``(1) It shall be unlawful for any person to act as a 
        security-based swap dealer unless such person is registered as 
        a security-based swap dealer with the Commission.
            ``(2) It shall be unlawful for any person to act as a major 
        security-based swap participant unless such person is 
        registered as a major security-based swap participant with the 
        Commission.
    ``(b) Requirements.--
            ``(1) In general.--A person shall register as a security-
        based swap dealer or major security-based swap participant by 
        filing a registration application with the Commission.
            ``(2) Contents.--The application shall be made in such form 
        and manner as prescribed by the Commission, giving any 
        information and facts as the Commission may deem necessary 
        concerning the business in which the applicant is or will be 
        engaged. Such person, when registered as a security-based swap 
        dealer or major security-based swap participant, shall continue 
        to report and furnish to the Commission such information 
        pertaining to such person's business as the Commission may 
        require.
            ``(3) Expiration.--Each registration shall expire at such 
        time as the Commission may by rule or regulation prescribe.
            ``(4) Rules.--Except as provided in subsections (c), (d) 
        and (e), the Commission may prescribe rules applicable to 
        security-based swap dealers and major security-based swap 
        participants, including rules that limit the activities of 
        security-based swap dealers and major security-based swap 
        participants. Except as provided in subsections (c) and (e), 
        the Commission may provide conditional or unconditional 
        exemptions from rules prescribed under this section for 
        security-based swap dealers and major security-based swap 
        participants that are subject to substantially similar 
        requirements as brokers or dealers.
            ``(5) Transition.--Rules adopted under this section shall 
        provide for the registration of security-based swap dealers and 
        major security-based swap participants no later than 1 year 
        after the effective date of the Over-the-Counter Derivatives 
        Markets Act of 2009.
    ``(c) Dual Registration.--
            ``(1) Security-based swap dealers.--Any person that is 
        required to be registered as a security-based swap dealer under 
        this section shall register with the Commission regardless of 
        whether that person also is a bank or is registered with the 
        Commodity Futures Trading Commission as a swap dealer.
            ``(2) Major security-based swap participants.--Any person 
        that is required to be registered as a major security-based 
        swap participant under this section shall register with the 
        Commission regardless of whether that person also is a bank or 
        is registered with the Commodity Futures Trading Commission as 
        a major swap participant.
    ``(d) Joint Rules.--
            ``(1) In general.--Not later than 180 days after the 
        effective date of the Over-the-Counter Derivatives Markets Act 
        of 2009, the Commission and the Commodity Futures Trading 
        Commission shall jointly adopt uniform rules for persons that 
        are registered as security-based swap dealers or major 
        security-based swap participants under this Act and persons 
        that are registered as swap dealers or major swap participants 
        under the Commodity Exchange Act (7 U.S.C. 1, et seq.).
            ``(2) Exception for prudential requirements.--The 
        Commission and the Commodity Futures Trading Commission shall 
        not prescribe rules imposing prudential requirements (including 
        activity restrictions) on security-based swap dealers or major 
        security-based swap participants for which there is a 
        Prudential Regulator. This provision shall not be construed as 
        limiting the authority of the Commission and the Commodity 
        Futures Trading Commission to prescribe appropriate business 
        conduct, reporting, and recordkeeping requirements to protect 
        investors.
    ``(e) Capital and Margin Requirements.--
            ``(1) In general.--
                    ``(A) Bank security-based swap dealers and major 
                security-based swap participants.--Each registered 
                security-based swap dealer and major security-based 
                swap participant for which there is a Prudential 
                Regulator shall meet such minimum capital requirements 
                and minimum initial and variation margin requirements 
                as the Prudential Regulators shall by rule or 
                regulation jointly prescribe to help ensure the safety 
                and soundness of the security-based swap dealer or 
                major security-based swap participant.
                    ``(B) Nonbank security-based swap dealers and major 
                security-based swap participants.--Each registered 
                security-based swap dealer and major security-based 
                swap participant for which there is not a Prudential 
                Regulator shall meet such minimum capital requirements 
                and minimum initial and variation margin requirements 
                as the Commission and the Commodity Futures Trading 
                Commission shall by rule or regulation jointly 
                prescribe to help ensure the safety and soundness of 
                the security-based swap dealer or major security-based 
                swap participant.
            ``(2) Joint rules.--
                    ``(A) Bank security-based swap dealers and major 
                security-based swap participants.--Within 180 days of 
                the enactment of the Over-the-Counter Derivatives 
                Markets Act of 2009, the Prudential Regulators, in 
                consultation with the Commission and the Commodity 
                Futures Trading Commission, shall jointly adopt rules 
                imposing capital and margin requirements under this 
                subsection for security-based swap dealers and major 
                security-based swap participants.
                    ``(B) Nonbank security-based swap dealers and major 
                security-based swap participants.--Within 180 days of 
                the enactment of the Over-the-Counter Derivatives 
                Markets Act of 2009, the Commission and the Commodity 
                Futures Trading Commission, in consultation with the 
                Prudential Regulators, shall jointly adopt rules 
                imposing capital and margin requirements under this 
                subsection for security-based swap dealers and major 
                security-based swap participants for which there is no 
                Prudential Regulator.
            ``(3) Capital.--
                    ``(A) Bank security-based swap dealers and major 
                security-based swap participants.--In setting capital 
                requirements under this subsection, the Prudential 
                Regulators shall impose--
                            ``(i) a capital requirement that is greater 
                        than zero for security-based swaps that are 
                        cleared by a clearing agency; and
                            ``(ii) to offset the greater risk to the 
                        security-based swap dealer or major security-
                        based swap participant and to the financial 
                        system arising from the use of security-based 
                        swaps that are not centrally cleared, higher 
                        capital requirements for security-based swaps 
                        that are not cleared by a clearing agency than 
                        for security-based swaps that are centrally 
                        cleared.
                    ``(B) Nonbank security-based swap dealers and major 
                security-based swap participants.--Capital requirements 
                set by the Commission and the Commodity Futures Trading 
                Commission under this subsection shall be as strict as 
                or stricter than the capital requirements set by the 
                Prudential Regulators under this subsection.
                    ``(C) Bank holding companies.--Capital requirements 
                set by the Board for security-based swaps of bank 
                holding companies on a consolidated basis shall be as 
                strict as or stricter than the capital requirements set 
                by the Prudential Regulators under this subsection.
            ``(4) Margin.--
                    ``(A) Bank security-based swap dealers and major 
                security-based swap participants.--The Prudential 
                Regulators shall impose both initial and variation 
                margin requirements under this subsection on all 
                security-based swaps that are not cleared by a 
                registered clearing agency.
                    ``(B) Non-swap dealers and major market 
                participants.--The Prudential Regulators may, but are 
                not required to, impose margin requirements with 
                respect to security-based swaps in which one of the 
                counterparties is not a swap dealer, major swap 
                participant, security-based swap dealer or major 
                security-based swap participant. Margin requirements 
                for swaps set by the Commission and the Commodity 
                Futures Trading Commission shall provide for the use of 
                non-cash assets as collateral.
                    ``(C) Nonbank security-based swap dealers and major 
                security-based swap participants.--Margin requirements 
                for security-based swaps set by the Commission and the 
                Commodity Futures Trading Commission under this 
                subsection shall be as strict as or stricter than 
                margin requirements for security-based swaps set by the 
                Prudential Regulators.
    ``(f) Reporting and Recordkeeping.--
            ``(1) In general.--Each registered security-based swap 
        dealer and major security-based swap participant--
                    ``(A) shall make such reports as are prescribed by 
                the Commission by rule or regulation regarding the 
                transactions and positions and financial condition of 
                such person;
                    ``(B) for which--
                            ``(i) there is a Prudential Regulator, 
                        shall keep books and records of all activities 
                        related to its business as a security-based 
                        swap dealer or major security-based swap 
                        participant in such form and manner and for 
                        such period as may be prescribed by the 
                        Commission by rule or regulation; or
                            ``(ii) there is no Prudential Regulator, 
                        shall keep books and records in such form and 
                        manner and for such period as may be prescribed 
                        by the Commission by rule or regulation;
                    ``(C) shall keep such books and records open to 
                inspection and examination by any representative of the 
                Commission; and
                    ``(D) shall keep any such books and records 
                relating to transactions in swaps based on 1 or more 
                securities open to inspection and examination by the 
                Commission.
            ``(2) Rules.--Not later than 1 year after the date of 
        enactment of the Over-the-Counter Derivatives Markets Act of 
        2009, the Commission and the Commodity Futures Trading 
        Commission, in consultation with the appropriate Federal 
        banking agencies, shall jointly adopt rules governing reporting 
        and recordkeeping for swap dealers, major swap participants, 
        security-based swap dealers and major security-based swap 
        participants.
    ``(g) Daily Trading Records.--
            ``(1) In general.--Each registered security-based swap 
        dealer and major security-based swap participant shall maintain 
        daily trading records of its security-based swaps and all 
        related records (including related transactions) and recorded 
        communications including but not limited to electronic mail, 
        instant messages, and recordings of telephone calls, for such 
        period as may be prescribed by the Commission by rule or 
        regulation.
            ``(2) Information requirements.--The daily trading records 
        shall include such information as the Commission shall 
        prescribe by rule or regulation.
            ``(3) Customer records.--Each registered security-based 
        swap dealer or major security-based swap participant shall 
        maintain daily trading records for each customer or 
        counterparty in such manner and form as to be identifiable with 
        each security-based swap transaction.
            ``(4) Audit trail.--Each registered security-based swap 
        dealer or major security-based swap participant shall maintain 
        a complete audit trail for conducting comprehensive and 
        accurate trade reconstructions.
            ``(5) Rules.--Not later than 1 year after the date of 
        enactment of the Over-the-Counter Derivatives Markets Act of 
        2009, the Commission and the Commodity Futures Trading 
        Commission, in consultation with the appropriate Federal 
        banking agencies, shall jointly adopt rules governing daily 
        trading records for swap dealers, major swap participants, 
        security-based swap dealers, and major security-based swap 
        participants.
    ``(h) Business Conduct Standards.--
            ``(1) In general.--Each registered security-based swap 
        dealer and major security-based swap participant shall conform 
        with business conduct standards as may be prescribed by the 
        Commission by rule or regulation addressing--
                    ``(A) fraud, manipulation, and other abusive 
                practices involving security-based swaps (including 
                security-based swaps that are offered but not entered 
                into);
                    ``(B) diligent supervision of its business as a 
                security-based swap dealer;
                    ``(C) adherence to all applicable position limits; 
                and
                    ``(D) such other matters as the Commission shall 
                determine to be necessary or appropriate.
            ``(2) Business conduct requirements.--Business conduct 
        requirements adopted by the Commission shall--
                    ``(A) establish the standard of care for a 
                security-based swap dealer or major security-based swap 
                participant to verify that any security-based swap 
                counterparty meets the eligibility standards for an 
                eligible contract participant;
                    ``(B) require disclosure by the security-based swap 
                dealer or major security-based swap participant to any 
                counterparty to the security-based swap (other than a 
                swap dealer, major swap participant, security-based 
                swap dealer or major security-based swap participant) 
                of--
                            ``(i) information about the material risks 
                        and characteristics of the security-based swap;
                            ``(ii) the source and amount of any fees or 
                        other material remuneration that the security-
                        based swap dealer or major security-based swap 
                        participant would directly or indirectly expect 
                        to receive in connection with the security-
                        based swap; and
                            ``(iii) any other material incentives or 
                        conflicts of interest that the security-based 
                        swap dealer or major security-based swap 
                        participant may have in connection with the 
                        security-based swap; and
                    ``(C) establish such other standards and 
                requirements as the Commission may determine are 
                necessary or appropriate in the public interest, for 
                the protection of investors, or otherwise in 
                furtherance of the purposes of this title.
            ``(3) Rules.--Not later than 1 year after the date of 
        enactment of the Over-the-Counter Derivatives Markets Act of 
        2009, the Commission and the Commodity Futures Trading 
        Commission, in consultation with the appropriate Federal 
        banking agencies, shall jointly prescribe rules under this 
        subsection governing business conduct standards for swap 
        dealers, major swap participants, security-based swap dealers, 
        and major security-based swap participants.
    ``(i) Documentation and Back Office Standards.--
            ``(1) In general.--Each registered security-based swap 
        dealer and major security-based swap participant shall conform 
        with standards, as may be prescribed by the Commission by rule 
        or regulation, addressing timely and accurate confirmation, 
        processing, netting, documentation, and valuation of all 
        security-based swaps.
            ``(2) Rules.--Not later than 1 year after the date of 
        enactment of the Over-the-Counter Derivatives Markets Act of 
        2009, the Commission and the Commodity Futures Trading 
        Commission, in consultation with the appropriate Federal 
        banking agencies, shall jointly adopt rules governing 
        documentation and back office standards for swap dealers, major 
        swap participants, security-based swap dealers, and major 
        security-based swap participants.
    ``(j) Dealer Responsibilities.--Each registered security-based swap 
dealer and major security-based swap participant at all times shall 
comply with the following requirements:
            ``(1) Monitoring of trading.--The security-based swap 
        dealer or major security-based swap participant shall monitor 
        its trading in security-based swaps to prevent violations of 
        applicable position limits.
            ``(2) Disclosure of general information.--The security-
        based swap dealer or major security-based swap participant 
        shall disclose to the Commission and to the Prudential 
        Regulator for such security-based swap dealer or major 
        security-based swap participant, as applicable, information 
        concerning--
                    ``(A) terms and conditions of its security-based 
                swaps;
                    ``(B) security-based swap trading operations, 
                mechanisms, and practices;
                    ``(C) financial integrity protections relating to 
                security-based swaps; and
                    ``(D) other information relevant to its trading in 
                security-based swaps.
            ``(3) Ability to obtain information.--The security-based 
        swap dealer or major swap security-based participant shall--
                    ``(A) establish and enforce internal systems and 
                procedures to obtain any necessary information to 
                perform any of the functions described in this section; 
                and
                    ``(B) provide the information to the Commission and 
                to the Prudential Regulator for such security-based 
                swap dealer or major security-based swap participant, 
                as applicable, upon request.
            ``(4) Conflicts of interest.--The security-based swap 
        dealer and major security-based swap participant shall 
        implement conflict-of-interest systems and procedures that--
                    ``(A) establish structural and institutional 
                safeguards to assure that the activities of any person 
                within the firm relating to research or analysis of the 
                price or market for any security are separated by 
                appropriate informational partitions within the firm 
                from the review, pressure, or oversight of those whose 
                involvement in trading or clearing activities might 
                potentially bias their judgment or supervision; and
                    ``(B) address such other issues as the Commission 
                determines appropriate.
            ``(5) Antitrust considerations.--Unless necessary or 
        appropriate to achieve the purposes of this Act, the security-
        based swap dealer or major security-based swap participant 
        shall avoid--
                    ``(A) adopting any processes or taking any actions 
                that result in any unreasonable restraints of trade; or
                    ``(B) imposing any material anticompetitive burden 
                on trading.
    ``(k) Rules.--The Commission, the Commodity Futures Trading 
Commission, and the Prudential Regulators shall consult with each other 
prior to adopting any rules under the Over-the-Counter Derivatives 
Markets Act of 2009.
    ``(l) Statutory Disqualification.--Except to the extent otherwise 
specifically provided by rule, regulation, or order of the Commission, 
it shall be unlawful for a security-based swap dealer or a major 
security-based swap participant to permit any person associated with a 
security-based swap dealer or a major security-based swap participant 
who is subject to a statutory disqualification to effect or be involved 
in effecting security-based swaps on behalf of such security-based swap 
dealer or major security-based swap participant, if such security-based 
swap dealer or major security-based swap participant knew, or in the 
exercise of reasonable care should have known, of such statutory 
disqualification.
    ``(m) Enforcement and Administrative Proceeding Authority.--
            ``(1) Primary enforcement authority.--
                    ``(A) SEC.--Except as provided in subsection (b), 
                the Commission shall have primary authority to enforce 
                the provisions of the amendments made by subtitle B of 
                the Over-the-Counter Derivatives Markets Act of 2009 
                with respect to any person.
                    ``(B) Prudential regulators.--The Prudential 
                Regulators shall have exclusive authority to enforce 
                the provisions of subsection (e) and other prudential 
                requirements of this Act with respect to banks, and 
                branches or agencies of foreign banks that are 
                security-based swap dealers or major security-based 
                swap participants.
                    ``(C) Referral.--If the Prudential Regulator for a 
                security-based swap dealer or major security-based swap 
                participant has cause to believe that such security-
                based swap dealer or major security-based swap 
                participant may have engaged in conduct that 
                constitutes a violation of the nonprudential 
                requirements of section 15F or rules adopted by the 
                Commission thereunder, that Prudential Regulator may 
                recommend in writing to the Commission that the 
                Commission initiate an enforcement proceeding as 
                authorized under this Act. The recommendation shall be 
                accompanied by a written explanation of the concerns 
                giving rise to the recommendation.
                    ``(D) Backstop enforcement authority.--If the 
                Commission does not initiate an enforcement proceeding 
                before the end of the 90 day period beginning on the 
                date on which the Commission receives a recommendation 
                under subparagraph (C), the Prudential Regulator may 
                initiate an enforcement proceeding as permitted under 
                Federal law.
            ``(2) Censure, denial, suspension; notice and hearing.--The 
        Commission, by order, shall censure, place limitations on the 
        activities, functions, or operations of, or revoke the 
        registration of any security-based swap dealer or major 
        security-based swap participant that has registered with the 
        Commission pursuant to subsection (b) if it finds, on the 
        record after notice and opportunity for hearing, that such 
        censure, placing of limitations, or revocation is in the public 
        interest and that such security-based swap dealer or major 
        security-based swap participant, or any person associated with 
        such security-based swap dealer or major security-based swap 
        participant effecting or involved in effecting transactions in 
        security-based swaps on behalf of such security-based swap 
        dealer or major security-based swap participant, whether prior 
        or subsequent to becoming so associated--
                    ``(A) has committed or omitted any act, or is 
                subject to an order or finding, enumerated in 
                subparagraph (A), (D), or (E) of paragraph (4) of 
                section 15(b);
                    ``(B) has been convicted of any offense specified 
                in subparagraph (B) of such paragraph (4) within 10 
                years of the commencement of the proceedings under this 
                subsection;
                    ``(C) is enjoined from any action, conduct, or 
                practice specified in subparagraph (C) of such 
                paragraph (4);
                    ``(D) is subject to an order or a final order 
                specified in subparagraph (F) or (H), respectively, of 
                such paragraph (4); or
                    ``(E) has been found by a foreign financial 
                regulatory authority to have committed or omitted any 
                act, or violated any foreign statute or regulation, 
                enumerated in subparagraph (G) of such paragraph (4).
            ``(3) With respect to any person who is associated, who is 
        seeking to become associated, or, at the time of the alleged 
        misconduct, who was associated or was seeking to become 
        associated with a security-based swap dealer or major security-
        based swap participant for the purpose of effecting or being 
        involved in effecting security-based swaps on behalf of such 
        security-based swap dealer or major security-based swap 
        participant, the Commission, by order, shall censure, place 
        limitations on the activities or functions of such person, or 
        suspend for a period not exceeding 12 months, or bar such 
        person from being associated with a security-based swap dealer 
        or major security-based swap participant, if the Commission 
        finds, on the record after notice and opportunity for a 
        hearing, that such censure, placing of limitations, suspension, 
        or bar is in the public interest and that such person--
                    ``(A) has committed or omitted any act, or is 
                subject to an order or finding, enumerated in 
                subparagraph (A), (D), or (E) of paragraph (4) of 
                section 15(b);
                    ``(B) has been convicted of any offense specified 
                in subparagraph (B) of such paragraph (4) within 10 
                years of the commencement of the proceedings under this 
                subsection;
                    ``(C) is enjoined from any action, conduct, or 
                practice specified in subparagraph (C) of such 
                paragraph (4);
                    ``(D) is subject to an order or a final order 
                specified in subparagraph (F) or (H), respectively, of 
                such paragraph (4); or
                    ``(E) has been found by a foreign financial 
                regulatory authority to have committed or omitted any 
                act, or violated any foreign statute or regulation, 
                enumerated in subparagraph (G) of such paragraph (4).
            ``(4) It shall be unlawful--
                    ``(A) for any person as to whom an order under 
                paragraph (3) is in effect, without the consent of the 
                Commission, willfully to become, or to be, associated 
                with a security-based swap dealer or major security-
                based swap participant in contravention of such order; 
                or
                    ``(B) for any security-based swap dealer or major 
                security-based swap participant to permit such a 
                person, without the consent of the Commission, to 
                become or remain a person associated with the security-
                based swap dealer or major security-based swap 
                participant in contravention of such order, if such 
                security-based swap dealer or major security-based swap 
                participant knew, or in the exercise of reasonable care 
                should have known, of such order.
            ``(5) Recognition of comparable non-u.s. regulation.--The 
        Commission, in consultation with the Secretary of the Treasury, 
        the Commodity Futures Trading Commission and the Prudential 
        Regulators, shall adopt rules exempting from registration and 
        the other requirements of title I of the Over-the-Counter 
        Derivatives Market Act of 2009 foreign financial institutions 
        that the Commission finds are subject to comparable regulation 
        in the financial institution's home country.''.

SEC. 155. REPORTING AND RECORDKEEPING.

    (a) In General.--The Securities Exchange Act of 1934 (15 U.S.C. 
78a, et seq.) is amended by inserting after section 13 the following 
section:

``SEC. 13A. REPORTING AND RECORDKEEPING FOR CERTAIN SECURITY-BASED 
              SWAPS.

    ``(a) In General.--Any person who enters into a security-based swap 
and--
            ``(1) did not clear the security-based swap in accordance 
        with section 3A; and
            ``(2) did not have data regarding the security-based swap 
        accepted by a security-based swap repository in accordance with 
        rules adopted by the Commission under section 13(n),
shall meet the requirements in subsection (b).
    ``(b) Reports.--Any person described in subsection (a) shall--
            ``(1) make such reports in such form and manner and for 
        such period as the Commission shall prescribe by rule or 
        regulation regarding the security-based swaps held by the 
        person; and
            ``(2) keep books and records pertaining to the security-
        based swaps held by the person in such form and manner and for 
        such period as may be required by the Commission, which books 
        and records shall be open to inspection by any representative 
        of the Commission, an appropriate Federal banking agency, the 
        Commodity Futures Trading Commission, the Financial Services 
        Oversight Council, and the Department of Justice.
    ``(c) Identical Data.--In adopting rules under this section, the 
Commission shall require persons described in subsection (a) to report 
the same or more comprehensive data than the Commission requires 
security-based swap repositories to collect under subsection (n).''.
    (b) Beneficial Ownership Reporting.--
            (1) Section 13(d)(1) of the Securities Exchange Act of 1934 
        (15 U.S.C. 78m(d)(1)) is amended by inserting ``or otherwise 
        becomes or is deemed to become a beneficial owner of any of the 
        foregoing upon the purchase or sale of a security-based swap or 
        other derivative instrument as the Commission may define by 
        rule, and'' after ``Alaska Native Claims Settlement Act,''.
            (2) Section 13(g)(1) of the Securities Exchange Act of 1934 
        (15 U.S.C. 78m(g)(1)) is amended by inserting ``or otherwise 
        becomes or is deemed to become a beneficial owner of any 
        security of a class described in subsection (d)(1) upon the 
        purchase or sale of a security-based swap or other derivative 
        instrument, as the Commission may define by rule'' after 
        ``subsection (d)(1) of this section''.
    (c) Reports by Institutional Investment Managers.--Section 13(f)(1) 
of the Securities Exchange Act of 1934 (15 U.S.C. 78m(f)(1)) is amended 
by inserting ``or otherwise becomes or is deemed to become a beneficial 
owner of any security of a class described in subsection (d)(1) upon 
the purchase or sale of a security-based swap or other derivative 
instrument, as the Commission may define by rule,'' after ``subsection 
(d)(1) of this section''.
    (d) Administrative Proceeding Authority.--Section 15(b)(4) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78o(b)(4)) is amended--
            (1) in subparagraph (C), by inserting ``security-based swap 
        dealer, major security-based swap participant,'' after 
        ``government securities dealer,''; and
            (2) in subparagraph (F), by inserting ``, or security-based 
        swap dealer, or a major security-based swap participant'' after 
        ``or dealer''.
    (e) Transactions by Corporate Insiders.--Section 16(f) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78p) is amended by inserting 
``or security-based swaps'' after ``security futures products''.

SEC. 156. STATE GAMING AND BUCKET SHOP LAWS.

    Section 28(a) of the Securities Exchange Act of 1934 (15 U.S.C. 
78bb(a)) is amended to read as follows:
    ``(a) Except as provided in subsection (f), the rights and remedies 
provided by this title shall be in addition to any and all other rights 
and remedies that may exist at law or in equity; but no person 
permitted to maintain a suit for damages under the provisions of this 
title shall recover, through satisfaction of judgment in one or more 
actions, a total amount in excess of his actual damages on account of 
the act complained of. Except as otherwise specifically provided in 
this title, nothing in this title shall affect the jurisdiction of the 
securities commission (or any agency or officer performing like 
functions) of any State over any security or any person insofar as it 
does not conflict with the provisions of this title or the rules and 
regulations thereunder. No State law which prohibits or regulates the 
making or promoting of wagering or gaming contracts, or the operation 
of `bucket shops' or other similar or related activities, shall 
invalidate (1) any put, call, straddle, option, privilege, or other 
security subject to this title (except a security-based swap agreement 
and any security that has a pari-mutuel payout or otherwise is 
determined by the Commission, acting by rule, regulation, or order, to 
be appropriately subject to such laws), or apply to any activity which 
is incidental or related to the offer, purchase, sale, exercise, 
settlement, or closeout of any such security, (2) any security-based 
swap between eligible contract participants, or (3) any security-based 
swap effected on a national securities exchange registered pursuant to 
section 6(b). No provision of State law regarding the offer, sale, or 
distribution of securities shall apply to any transaction in a 
security-based swap or a security futures product, except that this 
sentence shall not be construed as limiting any State antifraud law of 
general applicability.''.

SEC. 157. AMENDMENTS TO THE SECURITIES ACT OF 1933; TREATMENT OF 
              SECURITY-BASED SWAPS.

    (a) Definitions.--Section 2(a) of the Securities Act of 1933 (15 
U.S.C. 77b(a)) is amended--
            (1) in paragraph (1), by inserting ``security-based swap,'' 
        after ``security future,'';
            (2) in paragraph (3) by adding at the end the following: 
        ``Any offer or sale of a security-based swap by or on behalf of 
        the issuer of the securities upon which such security-based 
        swap is based or is referenced, an affiliate of the issuer, or 
        an underwriter, shall constitute a contract for sale of, sale 
        of, offer for sale, or offer to sell such securities,''; and
            (3) by adding at the end the following:
            ``(17) The terms `swap' and `security-based swap' have the 
        same meanings as provided in sections 1a(35) and (38) of the 
        Commodity Exchange Act (7 U.S.C. 1a(35) and (38)).
            ``(18) The terms `purchase' or `sale' of a security-based 
        swap shall be deemed to mean the execution, termination (prior 
        to its scheduled maturity date), assignment, exchange, or 
        similar transfer or conveyance of, or extinguishing of rights 
        or obligations under, a security-based swap, as the context may 
        require.''.
    (b) Registration of Security-based Swaps.--Section 5 of the 
Securities Act of 1933 (15 U.S.C. 77e) is amended by adding at the end 
the following:
    ``(d) Notwithstanding the provisions of section 3 or section 4, 
unless a registration statement meeting the requirements of subsection 
(a) of section 10 is in effect as to a security-based swap, it shall be 
unlawful for any person, directly or indirectly, to make use of any 
means or instruments of transportation or communication in interstate 
commerce or of the mails to offer to sell, offer to buy or purchase or 
sell a security-based swap to any person who is not an eligible 
contract participant as defined in section 1a(13) of the Commodity 
Exchange Act (7 U.S.C. 1a(13)).''.

SEC. 158. OTHER AUTHORITY.

    Unless otherwise provided by its terms, this subtitle does not 
divest any appropriate Federal banking agency, the Commission, the 
Commodity Futures Trading Commission, or other Federal or State agency, 
of any authority derived from any other applicable law.

SEC. 159. JURISDICTION.

    Section 36 of the Securities Exchange Act of 1934 (15 U.S.C. 78mm) 
is amended by adding at the end the following new subsection:
    ``(c) Derivatives.--The Commission shall not have the authority to 
grant exemptions from the security-based swap provisions of the Over-
the-Counter Derivatives Markets Act of 2009, except as expressly 
authorized under the provisions of that Act.''.

SEC. 160. EFFECTIVE DATE.

    This subtitle is effective 180 days after the date of enactment.
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