I 111th CONGRESS 1st Session H. R. 3795 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.
<enum>I</enum><header>Improvements to Regulation of Over-the-Counter Derivatives Markets</header> <section id="H9B1A45F71ADB44198737CE394A1A69D3" section-type="section-one"><enum>101.</enum><header>Short title</header><text display-inline="no-display-inline">This title may be cited as the <quote><short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title></quote>.</text> </section><subtitle id="HA40783E480D44223A344B2F86AFF817F"><enum>A</enum><header>Regulation of Swap Markets</header> <section id="H5389EDFAE9634493823246AAE223827E"><enum>111.</enum><header>Definitions</header> <subsection id="H9A8E2158A7194FEB9090A7D2286CF91B"><enum>(a)</enum><header>Amendments to definitions in the Commodity Exchange Act</header><text>Section 1a of the Commodity Exchange Act (7 U.S.C. 1a) is amended—</text> <paragraph id="H024E883C744B44289B336DE010296B1E"><enum>(1)</enum><text>by redesignating paragraphs (9) through (34) as paragraphs (10) through (35), respectively;</text> </paragraph><paragraph id="H80DD667795D54F68B4D77C0D811C2A51"><enum>(2)</enum><text>by adding after paragraph (8) the following:</text> <quoted-block id="HAFDF10880C0843DE90ABA779B7EB3189" style="OLC"> <paragraph id="H8BAA2752A92940C5856314ACE974928D"><enum>(9)</enum><header>Derivative</header><text>The term <term>derivative</term> means—</text> <subparagraph id="HE414CE4C082748FEB128D8C6F7633418"><enum>(A)</enum><text>a contract of sale of a commodity for future delivery; or</text> </subparagraph><subparagraph id="H15F111808B474AF3B703E9DC6CB01340"><enum>(B)</enum><text>a swap.</text> </subparagraph></paragraph><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph><paragraph id="H2A73300F35F74CF583165F4D5DA197CD"><enum>(3)</enum><text>by redesignating paragraph (35) (as redesignated by subsection (a)) as paragraph (36);</text> </paragraph><paragraph id="H2113C46CFE844FF0AA6B1D0AE7D409A6"><enum>(4)</enum><text display-inline="yes-display-inline">by adding after paragraph (34) (as redesignated by subsection (a)) the following:</text> <quoted-block id="H168D9B5F7D5E4933AFED92ADB09A6ADE" style="OLC"> <paragraph id="H11482C0E9A8746A8AA6129D0DCD665A7"><enum>(35)</enum><header>Swap</header> <subparagraph id="H7B9BB1224F56469FBD86FCEF26F56532"><enum>(A)</enum><header>In general</header><text>Except as provided in subparagraph (B), the term <term>swap</term> means any agreement, contract, or transaction that—</text> <clause id="HCB61F04AD7FB4545B6F3AF658A88BB14"><enum>(i)</enum><text>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;</text> </clause><clause id="H7398846178B842F8A2850BC0C16414B1"><enum>(ii)</enum><text>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;</text> </clause><clause id="H74B84A88511F4E80BF6FB6AB5AA36AC1"><enum>(iii)</enum><text>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;</text> </clause><clause id="H11C1F598D3764FF2886E4BAD72498BF8"><enum>(iv)</enum><text>is an agreement, contract, or transaction that is, or in the future becomes, commonly known to the trade as a swap; or</text> </clause><clause id="H4626F33985604E63820B2F1C93147F87"><enum>(v)</enum><text>is any combination or permutation of, or option on, any agreement, contract, or transaction described in any of clauses (i) through (iv).</text> </clause></subparagraph><subparagraph id="HA156C0725D0946E19A500C74B33FB5BB"><enum>(B)</enum><header>Exclusions</header><text>The term <term>swap</term> does not include:</text> <clause id="H9CB62AB814554A6ABFE6AB790585F2FE"><enum>(i)</enum><text>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;</text> </clause><clause id="H8BAED3E1D2A44C5C99BCC29577C1BD46"><enum>(ii)</enum><text>any sale of a nonfinancial commodity for deferred shipment or delivery, so long as such transaction is physically settled;</text> </clause><clause id="H68A9CC4A80C5469DB1E1011C42D3551D"><enum>(iii)</enum><text>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.);</text> </clause><clause id="HB13BF965564342DF9148B81C07B33A19"><enum>(iv)</enum><text>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));</text> </clause><clause id="H302F9DDFFDB24A5EA946E354A3E4BC05"><enum>(v)</enum><text>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.);</text> </clause><clause id="H265DD146EE99482AB867277C96799E95"><enum>(vi)</enum><text>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;</text> </clause><clause id="H28E739B47051460D830163AE62235218"><enum>(vii)</enum><text>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));</text> </clause><clause id="HED156B20D7EA483FAE28C1225E31C720"><enum>(viii)</enum><text>any agreement, contract, or transaction that is—</text> <subclause id="H22FFA110E995436BB1F28E27CF04418E"><enum>(I)</enum><text>based on a security; and</text> </subclause><subclause id="H7B418468BBD540309020E11B1EB9E8F6"><enum>(II)</enum><text>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;</text> </subclause></clause><clause id="H04399CB9F9FE42D39DA3654F0A63E182"><enum>(ix)</enum><text>any foreign exchange swap;</text> </clause><clause id="H7B1098D79FC646508A69A09A39D9B076"><enum>(x)</enum><text>any foreign exchange forward;</text> </clause><clause id="HDC604C182AA148B6B018DB1D20EC7676"><enum>(xi)</enum><text>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</text> </clause><clause id="HD0C45EAB28F84C23AE72251C623A24F0"><enum>(xii)</enum><text>any security-based swap, other than a security-based swap as described in paragraph (38)(C).</text> </clause></subparagraph><subparagraph id="H74506C13422241E48E8FF49B5337F617"><enum>(C)</enum><header>Rule of construction regarding master agreements</header><text>The term <term>swap</term> 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).</text> </subparagraph></paragraph><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph><paragraph id="H088010B54C2449D9BB2A214E4DF27AF9"><enum>(5)</enum><text display-inline="yes-display-inline">in paragraph (13) (as redesignated by subsection (a))—</text> <subparagraph id="H0FB7FDABF86E45AB98B5D612E7F90493"><enum>(A)</enum><text>in subparagraph (A)—</text> <clause id="H71844E435E5942F3B206F799A43FA9F1"><enum>(i)</enum><text>in clause (vii), by striking <quote>$25,000,000</quote> and inserting <quote>$50,000,000</quote>; and</text> </clause><clause id="HAE05F2BAF32146B99392F6A6D6B86A4F"><enum>(ii)</enum><text>in clause (xi), by striking <quote>total assets in an amount</quote> and inserting <quote>amounts invested on a discretionary basis</quote>; and</text> </clause></subparagraph><subparagraph id="H73710D217F3A467A9A3D82E114D2820C"><enum>(B)</enum><text>in paragraph (C), by striking <quote>determines</quote> and inserting <quote>and the Securities and Exchange Commission may jointly determine</quote>;</text> </subparagraph></paragraph><paragraph id="H6773012079044CB795655D2EEE6A9935"><enum>(6)</enum><text display-inline="yes-display-inline">in paragraph (30) (as redesignated by subsection (a)), by—</text> <subparagraph id="H4F7690AA306E4C6092E5A26B93954634"><enum>(A)</enum><text>redesignating subparagraph (E) as subparagraph (G);</text> </subparagraph><subparagraph id="H242944A8A6DD45CDB2C18AD77A7DA29B"><enum>(B)</enum><text>in subparagraph (D), by striking <quote>and</quote>; and</text> </subparagraph><subparagraph id="H48E03B32D78E4F3EB01B408A356CD741"><enum>(C)</enum><text>inserting after subparagraph (D) the following:</text> <quoted-block id="HD1C99C54F7F643E3A92FE64737514808" style="OLC"> <subparagraph id="HF25283F632A849CA941B812C2A92863B"><enum>(E)</enum><text>a swap execution facility registered under section 5h;</text> </subparagraph><subparagraph id="H38360516F71C400CB8A30F57380BCA52"><enum>(F)</enum><text>a swap repository; and</text> </subparagraph><after-quoted-block>; </after-quoted-block></quoted-block> </subparagraph></paragraph><paragraph id="H3678FDE9683C48AABF485AAF40293650"><enum>(7)</enum><text display-inline="yes-display-inline">by adding after paragraph (36) (as redesignated by subsection (c)) the following:</text> <quoted-block id="H3E11F7D005534FA793F8470BF0F21DA4" style="OLC"> <paragraph id="HDCA3289005884EB78357D18F402C2B1B"><enum>(37)</enum><header>Board</header><text>The term <term>Board</term> means the Board of Governors of the Federal Reserve System.</text> </paragraph><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph><paragraph id="HA04ABFFCE2E44942804AD8F02953D812"><enum>(8)</enum><text>by adding after paragraph (37) the following:</text> <quoted-block id="H114F9B5581454D7A99089AA78F1847E0" style="OLC"> <paragraph id="HC14FAFD200FD4E6F9D199626652DB5B4"><enum>(38)</enum><header>Security-based swap</header> <subparagraph id="H44F0054CD4964EE6B4595DA354EF6C55"><enum>(A)</enum><header>In general</header><text>Except as provided in subparagraph (B), the term <term>security-based swap</term> means any agreement, contract, or transaction that would be a swap under paragraph (35) (without regard to paragraph (35)(B)(xii)), and that—</text> <clause id="H3948C0D8D05C45EB8143FA0E8814F015"><enum>(i)</enum><text>is based on an index that is a narrow-based security index, including any interest therein or based on the value thereof;</text> </clause><clause id="HE4C1389A762F482CA94F78BD8032D088"><enum>(ii)</enum><text>is based on a single security or loan, including any interest therein or based on the value thereof; or</text> </clause><clause id="H6F3226FBCAE349BEB9C1188DD13EAEF4"><enum>(iii)</enum><text>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.</text> </clause></subparagraph><subparagraph id="H8AB6C041323046C891839D94AAA8DA28"><enum>(B)</enum><header>Exclusion</header><text>The term <term>security-based swap</term> 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.</text> </subparagraph><subparagraph id="HB2B86D354FCA445FA2581D461001A7CB"><enum>(C)</enum><header>Mixed swap</header><text>The term <term>security-based swap</term> 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)).</text> </subparagraph><subparagraph id="H65C7FC1C3BE549AFB8E58CBC67B96502"><enum>(D)</enum><header>Rule of construction regarding master agreements</header><text>The term <term>security-based swap</term> 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).</text> </subparagraph></paragraph><after-quoted-block>; </after-quoted-block></quoted-block> </paragraph><paragraph id="H562652BBDE8B4E97A54384AE1E0F689F"><enum>(9)</enum><text display-inline="yes-display-inline">by adding after paragraph (38) the following:</text> <quoted-block id="H8BCCFAD74DC64B9384AFC3BE83CEA925" style="OLC"> <paragraph id="H4983EC1DD1734DA8BA4BE25EC33EEB9D"><enum>(39)</enum><header>Swap dealer</header> <subparagraph id="H57755A4BCE7E41A39DD2CDEFE5A8DA82"><enum>(A)</enum><header>In general</header><text>The term <term>swap dealer</term> means any person engaged in the business of buying and selling swaps for such person’s own account, through a broker or otherwise.</text> </subparagraph><subparagraph id="H5229E9656B8441A7B26998AEE82B0A1F"><enum>(B)</enum><header>Exception</header><text>The term <term>swap dealer</term> 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.</text> </subparagraph></paragraph><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph><paragraph id="H57FC3999C73C4D149BC902E5583C2549"><enum>(10)</enum><text display-inline="yes-display-inline">by adding after paragraph (39) the following:</text> <quoted-block id="HDD07434DF10C44B095A8A64794EA21BA" style="OLC"> <paragraph id="H2230722DA69D41228FE166F946926C10"><enum>(40)</enum><header>Major swap participant</header> <subparagraph id="H6F6197531A09417EA1B078637F52884B"><enum>(A)</enum><header>In general</header><text>The term <term>major swap participant</term> 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.</text> </subparagraph><subparagraph id="HEA34AC468B1340E0A3FFEA599BB9E97A"><enum>(B)</enum><header>Definition of <quote>substantial net position</quote></header><text display-inline="yes-display-inline">The Commission and the Securities and Exchange Commission shall jointly define by rule or regulation the term <term>substantial net position</term> 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.</text> </subparagraph></paragraph><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph><paragraph id="HCBF4239EFB814CCC88F61D34FB61AFA0"><enum>(11)</enum><text display-inline="yes-display-inline">by adding after paragraph (40) the following:</text> <quoted-block id="H48BD08201EE5408D80ABE815CF37A497" style="OLC"> <paragraph id="H6A9F88EE2B3343EDA34C56E54BD57C1D"><enum>(41)</enum><header>Major security-based swap participant</header> <subparagraph id="H02BBBF3CE15F41A9BF59226A976DACF3"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The term <term>major security-based swap participant</term> 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.</text> </subparagraph><subparagraph id="H4AD44A4CD61B4E64BA3EC36041FF8CA2"><enum>(B)</enum><header>Definition of <quote>substantial net position</quote></header><text display-inline="yes-display-inline">The Commission and the Securities and Exchange Commission shall jointly define by rule or regulation the term <term>substantial net position</term> 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.</text> </subparagraph></paragraph><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph><paragraph id="H6F2C3108B60B4AE1AD7CAC1A7B48AFC3"><enum>(12)</enum><text display-inline="yes-display-inline">by adding after paragraph (41) the following:</text> <quoted-block id="H46749514BA1744C28499335C24717548" style="OLC"> <paragraph id="H5747E002E44C4F7D9C3B60223734E60C"><enum>(42)</enum><header>Appropriate federal banking agency</header><text>The term <term>appropriate Federal banking agency</term> has the same meaning as in section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)).</text> </paragraph><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph><paragraph id="H12E8B1D0B7644A6E8F3E82E56EBC6196"><enum>(13)</enum><text display-inline="yes-display-inline">by adding after paragraph (42) the following:</text> <quoted-block id="H5E6D10A592B94CF38C55D716EE0098D9" style="OLC"> <paragraph id="H9EA39E160F1D4151B705F30EAED081A7"><enum>(43)</enum><header>Prudential regulator</header><text>The term <term>Prudential Regulator</term> means—</text> <subparagraph id="H1C6A29FE5748450A85CD97B09D3AB97B"><enum>(A)</enum><text>the Board in the case of a swap dealer, major swap participant, security-based swap dealer or major security-based swap participant that is—</text> <clause id="H8BDB6571E6B6497CBB8DFCFA48A40A74"><enum>(i)</enum><text>a State-chartered bank that is a member of the Federal Reserve System; or</text> </clause><clause id="HC4B3E82B12AE4FB995BF769A6C2A6667"><enum>(ii)</enum><text>a State-chartered branch or agency of a foreign bank;</text> </clause></subparagraph><subparagraph id="H218C6D9A02F54EDE9128F3A7FBC49081"><enum>(B)</enum><text>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—</text> <clause id="H2364F5899F5C42F995AE35E9243E0556"><enum>(i)</enum><text>a national bank; or</text> </clause><clause id="H74D74F2B467E441D81188A6F731B465E"><enum>(ii)</enum><text>a federally chartered branch or agency of a foreign bank; and</text> </clause></subparagraph><subparagraph id="HACD461EFAB834BD98395A0A1695DBC98"><enum>(C)</enum><text>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.</text> </subparagraph></paragraph><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph><paragraph id="H4C6F166D46F64E4EA6334D6DE9778EEE"><enum>(14)</enum><text>by adding after paragraph (43) the following:</text> <quoted-block id="H98E9097D33EA4B4595DBE7571D88605F" style="OLC"> <paragraph id="H3CF42C9A1F774B6BBBE049B8F8EA7247"><enum>(44)</enum><header>Security-based swap dealer</header> <subparagraph id="H51819CA8294F46FCBC9EB58FBA28881F"><enum>(A)</enum><header>In general</header><text>The term <term>security-based swap dealer</term> 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.</text> </subparagraph><subparagraph id="HE25E9D098FFF4D71913F23B620AE216F"><enum>(B)</enum><header>Exception</header><text>The term <term>security-based swap dealer</term> 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.</text> </subparagraph></paragraph><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph><paragraph id="H120C60D35FE94D5E82604BB472DD6D4E"><enum>(15)</enum><text>by adding after paragraph (44) the following:</text> <quoted-block id="H30B3806E635B401195E763B9F8C01012" style="OLC"> <paragraph id="H196CF7E98413401CB4759C42C14A9569"><enum>(45)</enum><header>Government security</header><text>The term <term>government security</term> has the same meaning as in section 3(a)(42) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(42)).</text> </paragraph><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph><paragraph id="H73B3A0893DB243C38DCE39BA157BFD2F"><enum>(16)</enum><text>by adding after paragraph (45) the following:</text> <quoted-block id="HEC03F94AEF814479B7C5469D45B54A8F" style="OLC"> <paragraph id="HFEBBEACDFE17452F8760C0ED0E25F416"><enum>(46)</enum><header>Foreign exchange forward</header><text>The term <term>foreign exchange forward</term> 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.</text> </paragraph><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph><paragraph id="HEE4A9E146A9C40C3ABD8AE8F93B9A61A"><enum>(17)</enum><text>by adding after paragraph (46) the following:</text> <quoted-block id="H0E81D0934AFB43F1B74D4FBE7DFFF2EF" style="OLC"> <paragraph id="H208ADFA940AF4EC5A5CA2A8FAEF04DE4"><enum>(47)</enum><header>Foreign exchange swap</header><text>The term <term>foreign exchange swap</term> 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.</text> </paragraph><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph><paragraph id="H0C94C179B16F43EFB19D04B80B55343F"><enum>(18)</enum><text>by adding after paragraph (47) the following:</text> <quoted-block id="H73E4E9278D41498EA9E4E5D9E73CD61C" style="OLC"> <paragraph id="H3DB6C35D52F84540B4D86B640EA4CFE3"><enum>(48)</enum><header>Person associated with a security-based swap dealer or major security-based swap participant</header><text>The term <term>person associated with a security-based swap dealer or major security-based swap participant</term> or <term>associated person of a security-based swap dealer or major security-based swap participant</term> 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).</text> </paragraph><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph><paragraph id="H2A4FC84BC9F74F84854CB2326E73B503"><enum>(19)</enum><text>by adding after paragraph (48) the following:</text> <quoted-block id="H891C338F67B645D7B517B97D7C458939" style="OLC"> <paragraph id="HF9BD9ED86C8944018CBA3BF0E60A75E1"><enum>(49)</enum><header>Person associated with a swap dealer or major swap participant</header><text>The term <term>person associated with a swap dealer or major swap participant</term> or <term>associated person of a swap dealer or major swap participant</term> 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).</text> </paragraph><after-quoted-block>; and</after-quoted-block></quoted-block> </paragraph><paragraph id="H29369DDC610544BFBF3932EF2583D3CB"><enum>(20)</enum><text>by adding after paragraph (49) the following:</text> <quoted-block id="H62D93D92690A47CFB35B49E953F960B8" style="OLC"> <paragraph id="H19934EDB553E4F799DA5728C603F3798"><enum>(50)</enum><header>Swap repository</header><text>The term <term>swap repository</term> 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.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection><subsection id="H57F7A860823E465AA77E06CEAB09F73A"><enum>(b)</enum><header>Joint rulemaking on further definition of terms</header> <paragraph id="H814694A0FEEF46E58BE873CE0E3C3B47"><enum>(1)</enum><header>In general</header><text>The Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly adopt a rule further defining the terms <term>swap</term>, <term>security-based swap</term>, <term>swap dealer</term>, <term>security-based swap dealer</term>, <term>major swap participant</term>,<term>major security-based swap participant</term>, and <term>eligible contract participant</term> no later than 180 days after the effective date of this Act.</text> </paragraph><paragraph id="H36FEEE5F0BAF44AA8AC79C39F24C2363"><enum>(2)</enum><header>Prevention of evasions</header><text>The Commodity Futures Trading Commission and the Securities and Exchange Commission may prescribe rules defining the term <term>swap</term> or <term>security-based swap</term> to include transactions that have been structured to evade this Act.</text> </paragraph></subsection><subsection id="H792A68A69EB44AAE9799F7A4F9C7DF65"><enum>(c)</enum><header>Joint rulemaking under this act</header> <paragraph id="HE10122A830124934897A0DB2BCCB395B"><enum>(1)</enum><header>Uniform rules</header><text>Rules and regulations prescribed jointly under this Act by the Commodity Futures Trading Commission and the Securities and Exchange Commission shall be uniform.</text> </paragraph><paragraph id="H7813CC5BEB3E43E49B44A7560E6E0615"><enum>(2)</enum><header>Treasury department</header><text>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.</text> </paragraph><paragraph id="H62640E381180425282291FF4B95C10B7"><enum>(3)</enum><header>Deadline</header><text>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.</text> </paragraph><paragraph id="H92C089D786524F89A324B34389428C62"><enum>(4)</enum><header>Treatment of similar products</header><text>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.</text> </paragraph><paragraph id="H4A7CC3FCFEFB45DEBA171F4B940BF307"><enum>(5)</enum><header>Treatment of dissimilar products</header><text>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.</text> </paragraph><paragraph id="H2777E75D23224A1C8797352A90DE138D"><enum>(6)</enum><header>Joint interpretation</header><text>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.</text> </paragraph></subsection><subsection id="H71157ECC2FD44CFDB6FE6BE314797EC3"><enum>(d)</enum><header>Exemptions</header><text>Section 4(c) of the Commodity Exchange Act (7 U.S.C. 4(c)) is amended by adding at the end the following: <quote>The Commission shall not have the authority to grant exemptions from the swap-related provisions of the <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title>, except as expressly authorized under the provisions of that Act.</quote>.</text> </subsection></section><section id="H647D11E6B13444D39D50336C7AF92EE7"><enum>112.</enum><header>Jurisdiction</header> <subsection id="H7656EEC39D3F4105B1A3920CD786D7A4"><enum>(a)</enum><header>Exclusive jurisdiction</header><text>The first sentence of section 2(a)(1)(A) of the Commodity Exchange Act (7 U.S.C. 2(a)(1)(A)) is amended—</text> <paragraph id="HC14C1B96842A4199837B9DC612368F7C"><enum>(1)</enum><text>by striking <quote>(C) and (D)</quote> and inserting <quote>(C), (D), and (G)</quote>;</text> </paragraph><paragraph id="HC078EB6AD60543FBA40A66C188E3D626"><enum>(2)</enum><text>by striking <quote>subsections (c) through (i)</quote> and inserting <quote>subsections (c) and (f)</quote>; and</text> </paragraph><paragraph id="H18F7602935584E259935C4E63A884DD9"><enum>(3)</enum><text>by striking <quote>involving contracts of sale</quote> and inserting <quote>involving swaps or contracts of sale</quote>.</text> </paragraph></subsection><subsection id="H490B8B27F1B64A769FFDFCEAFA3EB648"><enum>(b)</enum><header>No limitation</header><text>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:</text> <quoted-block id="H887429C2673C43DA82C501699FDB0AA5" style="OLC"> <subparagraph id="HD82A06F8A9A848EAADC0B189243494AC"><enum>(G)</enum><text>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 <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title>, including with respect to a security-based swap as described in section 1a(38)(C) of this Act.</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection id="H4753701E1E314C93B0F269A0ECF576A8"><enum>(c)</enum><header>Additions</header><text>Section 2(c)(2)(A) of the Commodity Exchange Act (7 U.S.C. 2(c)(2)(A)) is amended—</text> <paragraph id="HE21A6D79007F411697D02A25BBBDF3F0"><enum>(1)</enum><text>in clause (i), by striking <quote>or</quote> at the end;</text> </paragraph><paragraph id="HCA55A95DD40E4C2A8FC61DC005129F83"><enum>(2)</enum><text>by redesignating clause (ii) as clause (iii); and</text> </paragraph><paragraph id="HF2E43C4F986F4276A9627AC77434CB0F"><enum>(3)</enum><text>by inserting after clause (i) the following:</text> <quoted-block id="H48D39FB0260B40A7AC01085C3F7402E0" style="OLC"> <subsection id="HE411F694B43F4B66B6DC35803EA412AF"><enum>(ii)</enum><text>a swap; or</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection></section><section id="HD7CB29823FD94CBF8321E6922D999BAD"><enum>113.</enum><header>Clearing</header> <subsection id="HD3BB345DFA2D43ED90AD61913D8691AD"><enum>(a)</enum><header>Clearing requirement</header> <paragraph id="H67FF1A38A863492497EDDA8768E68682"><enum>(1)</enum><text>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.</text> </paragraph><paragraph id="H4AB5F21D5C94483380A26E05EC3C15F3"><enum>(2)</enum><text>Section 2 of the Commodity Exchange Act (7 U.S.C. 2) is further amended by inserting after subsection (c) the following:</text> <quoted-block id="HEE921045A4F746D59444C299ABC7F5FD" style="OLC"> <subsection id="H8491B9958BAD4B07B505245BBAAE2B4A"><enum>(d)</enum><header>Swaps</header><text>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.</text> </subsection><subsection id="H9156ACAB3A944A5BB528E4885CE41C99"><enum>(e)</enum><header>Limitation on participation</header><text>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.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph><paragraph id="H3F14A90C09E24DC8B42CE728B858FE30"><enum>(3)</enum><text>Section 2 of the Commodity Exchange Act (7 U.S.C. 2) is further amended by inserting after subsection (i) the following:</text> <quoted-block id="H566B7A21607E440485A38988A2D495AC" style="OLC"> <subsection id="H8DE06C715347413D828C5E7DB4C344FA"><enum>(j)</enum><header>Clearing of swaps</header> <paragraph id="H9B1FC493A7DA46358710173F72B2D9E2"><enum>(1)</enum><header>Clearing requirement</header><text display-inline="yes-display-inline">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:</text> <subparagraph id="H3D13F5F047D4443B897553F052CB02A8"><enum>(A)</enum><text>the existence of significant outstanding notional exposures, trading liquidity and adequate pricing data;</text> </subparagraph><subparagraph id="H845BCA3F6D824090B383BB23095A935F"><enum>(B)</enum><text>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;</text> </subparagraph><subparagraph id="HE0A2EBBD119A4377B38E6F1E8013A1E7"><enum>(C)</enum><text>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;</text> </subparagraph><subparagraph id="H9AE1C13226AC4144830AD6561E036FC8"><enum>(D)</enum><text>the impact on competition; and</text> </subparagraph><subparagraph id="HB3DA989EA7314E83A3C751107CC614FA"><enum>(E)</enum><text>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.</text> </subparagraph></paragraph><paragraph id="H96228E59EC2A45E9AFBE0DA6AB32B1CF"><enum>(2)</enum><header>Scope of clearing functions</header><text display-inline="yes-display-inline">The Commission shall by rule or regulation define the scope of the clearing functions that are necessary to satisfy the requirements of paragraph (1).</text> </paragraph><paragraph id="H686E033A7525417CA4C891323ADED567"><enum>(3)</enum><header>Prevention of evasion</header><text>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.</text> </paragraph><paragraph id="H11D080F9E6E44489826CA697C8C412F9"><enum>(4)</enum><header>Required reporting</header> <subparagraph id="HB03F4A49F7CF4E8E858999E2C414F385"><enum>(A)</enum><header>In general</header><text>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.</text> </subparagraph><subparagraph id="H4837E665D84848BC9933C5A732BC39C9"><enum>(B)</enum><header>Authority of swap dealer to report</header><text>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.</text> </subparagraph></paragraph><paragraph id="H1AAC14F5869246898A2601161525F78C"><enum>(5)</enum><header>Transition rules</header><text>Rules adopted by the Commission under this section shall provide for the reporting of data, as follows:</text> <subparagraph id="HF6DF1EC193454CE4BA4981FC00805821"><enum>(A)</enum><text>Swaps that were entered into before the date of enactment of the <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title> shall be reported to a registered swap repository or the Commission no later than 180 days after the effective date of the <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title>.</text> </subparagraph><subparagraph id="H63E6BDACB8974235AB880D87352F759F"><enum>(B)</enum><text>Swaps that were entered into on or after the date of enactment of the <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title> shall be reported to a registered swap repository or the Commission no later than the later of—</text> <clause id="H75E44E7D2FC642ADA63F44D7B5CAEAC2"><enum>(i)</enum><text>90 days after the effective date of the <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title>; or</text> </clause><clause id="HD51A3833EF60491B900289A154B6C446"><enum>(ii)</enum><text>such other time after entering into the swap as the Commission may prescribe by rule or regulation.</text> </clause></subparagraph></paragraph><paragraph id="H081B6DA5F4BD4D7A8DAF9FA45A22F18F"><enum>(6)</enum><header>Trade execution</header><text display-inline="yes-display-inline">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:</text> <subparagraph id="HEF568C3F48164803BC197F38A90B6E62"><enum>(A)</enum><text>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);</text> </subparagraph><subparagraph id="H33BC5F8EBAF645D6B6FA11D659C9CD46"><enum>(B)</enum><text>Execute the transaction on a swap execution facility registered with the Commission;</text> </subparagraph><subparagraph id="H912BC1D101E540B8B518D204DB4ED941"><enum>(C)</enum><text>Execute the transaction on a foreign swap execution facility that is subject to regulation as such under the laws of a foreign jurisdiction; or</text> </subparagraph><subparagraph id="HD6D39AD31091478FBD9C151075340802"><enum>(D)</enum><text>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—</text> <clause id="H9BC7A502613C4BE5B86FDD4DD2F14A8F"><enum>(i)</enum><text>as may be prescribed by the Commission with respect to commodity swaps subject to the requirements of paragraph (3); or</text> </clause><clause id="HDA082C7330124923AFDAFED3D44CE3BD"><enum>(ii)</enum><text>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—</text> <subclause id="H581E2A013ECF46ECB2979A16B0E2F785"><enum>(I)</enum><text>a foreign swap dealer or a foreign swap market participant; or</text> </subclause><subclause id="H4E708EA613564864882C148AF2EA2D42"><enum>(II)</enum><text>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.</text> </subclause></clause></subparagraph></paragraph><paragraph id="H6A6BBB3D6DF7492BB8B3EEB0E0609674"><enum>(7)</enum><header>Exchange trading</header><text>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.</text> </paragraph><paragraph id="HD0DC06CA7F8A4531ABF0C93A50423653"><enum>(8)</enum><header>Exceptions</header><text>The requirements of paragraph (1) shall not apply to a swap if—</text> <subparagraph id="HC1439FE8A60A462686E8FAEFAE7014E5"><enum>(A)</enum><text>no derivatives clearing organization registered under this Act will accept the swap for clearing; or</text> </subparagraph><subparagraph id="H91D187EA0F1D4619AF6162B5BB0912FE"><enum>(B)</enum><text>one of the counterparties to the swap is not a swap dealer or major swap participant.</text> </subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection><subsection id="H52874B7D3F7B4339A14D0F4CCF1F35D2"><enum>(b)</enum><header>Derivatives clearing organizations</header> <paragraph id="H6A30CDA6FB22429283C53CC5AF70257D"><enum>(1)</enum><text>Subsections (a) and (b) of section 5b of the Commodity Exchange Act (7 U.S.C. 7a–1) are amended to read as follows:</text> <quoted-block id="H2D7A602F693A4353B2A1BC0B30B88ADE" style="OLC"> <subsection id="HB0683DC8359C4C68B63F91A8E8A1B4E0"><enum>(a)</enum><header>Registration requirement</header><text>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—</text> <paragraph id="HCC4D30DAF2E743F780930BA1F63E31BF"><enum>(1)</enum><text>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—</text> <subparagraph id="H6D4788E45AFC48759693B86C8FDE8D0A"><enum>(A)</enum><text>excluded from this Act by section 2(a)(1)(C)(i), 2(c), or 2(f); or</text> </subparagraph><subparagraph id="H641E2FB4614A47D393E8D2809DEFCC0D"><enum>(B)</enum><text>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</text> </subparagraph></paragraph><paragraph id="H14E53E9082BD4AFEA7F58E7FBC54A45B"><enum>(2)</enum><text>a swap.</text> </paragraph></subsection><subsection id="HBC1CAF61755C4E6AAAD1D40934EA4973"><enum>(b)</enum><header>Voluntary registration</header> <paragraph id="H6F0AA39C79E943D39A3ECE546F8EE342"><enum>(1)</enum><header>Derivatives clearing organizations</header><text>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.</text> </paragraph><paragraph id="HA3E41EBA765749729172852E7747031A"><enum>(2)</enum><header>Clearing agencies</header><text>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.).</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph><paragraph id="HFFEBDCEAD7F54165A92583952B8E1D91"><enum>(2)</enum><text>Section 5b of the Commodity Exchange Act (7 U.S.C. 7a–1) is amended by adding at the end the following:</text> <quoted-block id="H8FAD0A6690E0490B9F29B42E33A41395" style="OLC"> <subsection id="H687D4E68DC584C53BE308735C2754342"><enum>(g)</enum><header>Required registration for banks and clearing agencies</header><text>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.).</text> </subsection><subsection id="HF250A37657644449B96D29E21D107D88"><enum>(h)</enum><header>Harmonization of rules</header><text>Not later than 180 days after the effective date of the <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title>, 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.).</text> </subsection><subsection id="HF07F47D580F6443C94D9F8A88DB26CDF"><enum>(i)</enum><header>Consultation</header><text>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.</text> </subsection><subsection id="H54E158BD33014267A886A60821BE3CA3"><enum>(j)</enum><header>Exemptions</header><text>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.</text> </subsection><subsection id="HEBDE4D50BCE74175845DA8FD6AB9BB6D"><enum>(k)</enum><header>Designation of compliance officer</header> <paragraph id="H6AE8502AE9DE419C8C3542A40BA7443D"><enum>(1)</enum><header>In general</header><text>Each derivatives clearing organization shall designate an individual to serve as a compliance officer.</text> </paragraph><paragraph id="H54676A2043A64A0A98E8676B3ECD4B4D"><enum>(2)</enum><header>Duties</header><text>The compliance officer—</text> <subparagraph id="H91D4EDF18BC64FA6860BBBD8360ED81F"><enum>(A)</enum><text>shall report directly to the board or to the senior officer of the derivatives clearing organization; and</text> </subparagraph><subparagraph id="HAFC5DE2A66C743858EF0FFD6418D9116"><enum>(B)</enum><text>shall—</text> <clause id="HAFB65E05C6854130B76FBD346C92CB6D"><enum>(i)</enum><text>review compliance with the core principles in section 5b(c)(2);</text> </clause><clause id="HBD95B5525BB54368AF21DBA3BF5CF428"><enum>(ii)</enum><text>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;</text> </clause><clause id="H79013F8D363E4BA090ABF557BE9C9FF6"><enum>(iii)</enum><text>be responsible for administering the policies and procedures required to be established pursuant to this section; and</text> </clause><clause id="H6C8EE551325E497BAFF0030D23CA2F1E"><enum>(iv)</enum><text>ensure compliance with commodity laws and the rules and regulations issued thereunder, including rules prescribed by the Commission pursuant to this section; and</text> </clause></subparagraph><subparagraph id="H8B243FACB96E461E953B33C5036C0D81"><enum>(C)</enum><text>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.</text> </subparagraph></paragraph><paragraph id="H23E4A0175D084E9E820EE39CA229E555"><enum>(3)</enum><header>Annual reports required</header><text>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.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph><paragraph id="H9A8D74DBD3824C6AB5187772DDA81ABE"><enum>(3)</enum><text>Section 5b(c)(2) of the Commodity Exchange Act (7 U.S.C. 7a–1(c)(2)) is amended to read as follows:</text> <quoted-block id="HAC3F8577910E4CCCAA156DEB0D3C679D" style="OLC"> <paragraph id="HAB052494DFD741A3AB317A90B49DAF8E"><enum>(2)</enum><header>Core principles for derivatives clearing organizations</header> <subparagraph id="H185A8082C5454ED7AFAF237BEC66FEF5"><enum>(A)</enum><header>In general</header><text>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.</text> </subparagraph><subparagraph id="H2A6DB0BA51FD4E0E9F49180DEBA2FF57"><enum>(B)</enum><header>Financial resources</header> <clause id="H03D2EFC9A0314046BEB19B454E713C47"><enum>(i)</enum><text>The derivatives clearing organization shall have adequate financial, operational, and managerial resources to discharge its responsibilities.</text> </clause><clause id="HD2A18E20107645E898766FE823325533"><enum>(ii)</enum><text>Financial resources shall at a minimum exceed the total amount that would—</text> <subclause id="HA604410DDBA7424BBAEB91AC53B9E49F"><enum>(I)</enum><text>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</text> </subclause><subclause id="H42AA233B14D0425E80A4FEFEA39E01A4"><enum>(II)</enum><text>enable the derivatives clearing organization to cover its operating costs for a period of one year, calculated on a rolling basis.</text> </subclause></clause></subparagraph><subparagraph id="HF0FE1FB7106D4C47925BF96771FC98DC"><enum>(C)</enum><header>Participant and product eligibility</header> <clause id="H1116552BC72C4E199912469685606AA0"><enum>(i)</enum><text>The derivatives clearing organization shall establish—</text> <subclause id="HCA8DA72DF17E41DBA8CAEF07DCE806C8"><enum>(I)</enum><text>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</text> </subclause><subclause id="H20B0C79D4FCF45779CD9661671BB55A7"><enum>(II)</enum><text>appropriate standards for determining eligibility of agreements, contracts, or transactions submitted to the derivatives clearing organization for clearing.</text> </subclause></clause><clause id="H3F977C62883C40F897C46B1F16B5DE15"><enum>(ii)</enum><text>The derivatives clearing organization shall have procedures in place to verify that participation and membership requirements are met on an ongoing basis.</text> </clause><clause id="HFB069B8932C94EEFA0D22577514A9107"><enum>(iii)</enum><text>The derivatives clearing organization’s participation and membership requirements shall be objective, publicly disclosed, and permit fair and open access.</text> </clause><clause id="H9CB58B9154F84DCCA14EBD3C9F160804"><enum>(iv)</enum><text>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.</text> </clause></subparagraph><subparagraph id="H68DE06DEE4F946FE9EA0D091189A2299"><enum>(D)</enum><header>Risk management</header> <clause id="H5F5928F69CC242BB9D3A109F75C5284B"><enum>(i)</enum><text>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.</text> </clause><clause id="H70DD1DB93DD74F4C998EC80194018817"><enum>(ii)</enum><text>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.</text> </clause><clause id="HA01FC7408D024E028AC8467C98B17E9B"><enum>(iii)</enum><text>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.</text> </clause><clause id="H42541588B113469F9FBA81B5E2E5EB02"><enum>(iv)</enum><text>Margin required from all members and participants shall be sufficient to cover potential exposures in normal market conditions.</text> </clause><clause id="HF1229D67C8F5467CB60A45A80F436680"><enum>(v)</enum><text>The models and parameters used in setting margin requirements shall be risk-based and reviewed regularly.</text> </clause></subparagraph><subparagraph id="H184E6E64BBD6401196AFE70D15A2BBCD"><enum>(E)</enum><header>Settlement procedures</header><text>The derivatives clearing organization shall—</text> <clause id="HE4F46BFEED8D488CBA2BA92E9EC85E0F"><enum>(i)</enum><text>complete money settlements on a timely basis, and not less than once each business day;</text> </clause><clause id="H4F4757050ADC45D4BF240770D4AA7F44"><enum>(ii)</enum><text>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;</text> </clause><clause id="H7FDD0B8ED3784C5A88555CAEA27AD5CB"><enum>(iii)</enum><text>ensure money settlements are final when effected;</text> </clause><clause id="H07DBFFD6A82F4839A0807058E7EEEEE7"><enum>(iv)</enum><text>maintain an accurate record of the flow of funds associated with each money settlement;</text> </clause><clause id="HA488907EEA5E455FB68A407C35D2CBE4"><enum>(v)</enum><text>have the ability to comply with the terms and conditions of any permitted netting or offset arrangements with other clearing organizations; and</text> </clause><clause id="H422FA6D810674CFCB3A4E047AF9CFA3E"><enum>(vi)</enum><text>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.</text> </clause></subparagraph><subparagraph id="H4468E9C205DA44CCBDC45BB4E35477AD"><enum>(F)</enum><header>Treatment of funds</header> <clause id="H9706E1EB35FE42839747B0D346F67B5C"><enum>(i)</enum><text>The derivatives clearing organization shall have standards and procedures designed to protect and ensure the safety of member and participant funds and assets.</text> </clause><clause id="H6BA3155435474C699F28F383B5FD3DC8"><enum>(ii)</enum><text>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.</text> </clause><clause id="H3E2E376988254B89BDB949FB0B2783DA"><enum>(iii)</enum><text>Assets and funds invested by the derivatives clearing organization shall be held in instruments with minimal credit, market, and liquidity risks.</text> </clause></subparagraph><subparagraph id="H2206C94B69294B45A8357810F9EC23CF"><enum>(G)</enum><header>Default rules and procedures</header> <clause id="H2E270E55EF5246D7A3D8FCF51BC65A5B"><enum>(i)</enum><text>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.</text> </clause><clause id="H6958890D692144589EEE192C0E25723C"><enum>(ii)</enum><text>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.</text> </clause><clause id="HE7F7EC16EEB848AC9750EA77946EAE93"><enum>(iii)</enum><text>The default procedures shall be publicly available.</text> </clause></subparagraph><subparagraph id="HB5C0272EB6C14DAB9B7644F4DF22DC25"><enum>(H)</enum><header>Rule enforcement</header><text>The derivatives clearing organization shall—</text> <clause id="H48233BD1CD2443399E6DC86F4B0FA946"><enum>(i)</enum><text>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</text> </clause><clause id="H423CF7795F4F4244A9ED75DDD941AA70"><enum>(ii)</enum><text>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.</text> </clause></subparagraph><subparagraph id="H3A949013DBD84DDD92F505588AC16FC9"><enum>(I)</enum><header>System safeguards</header><text>The derivatives clearing organization shall—</text> <clause id="H4409AC3DC59C4A8385243A11DD594FAE"><enum>(i)</enum><text>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;</text> </clause><clause id="H95A6EE9EA638445FA19550F0E7D83020"><enum>(ii)</enum><text>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</text> </clause><clause id="HCC8883A30F014C29974D48E4575F97D1"><enum>(iii)</enum><text>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.</text> </clause></subparagraph><subparagraph id="H4C4D9DD99D3E4F4AB27D40D67E59ADB9"><enum>(J)</enum><header>Reporting</header><text>The derivatives clearing organization shall provide to the Commission all information necessary for the Commission to conduct oversight of the derivatives clearing organization.</text> </subparagraph><subparagraph id="HC0B6A3299C794D37B8E46E7E99021E90"><enum>(K)</enum><header>Recordkeeping</header><text>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.</text> </subparagraph><subparagraph id="HF9AF18A6AB8B4FC9BA64843137853A03"><enum>(L)</enum><header>Public information</header> <clause id="H79E31FEE784549B0BFF49E6AC5B0E7CB"><enum>(i)</enum><text>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.</text> </clause><clause id="HDDBC459B3B6B43A3AA9CA2B0B2008052"><enum>(ii)</enum><text>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.</text> </clause><clause id="H2EACCCBEC04042AE84B6CB8B31E1027D"><enum>(iii)</enum><text>The derivatives clearing organization shall disclose publicly and to the Commission information concerning—</text> <subclause id="HE384B71B40164574A02ED2DD88EA81F1"><enum>(I)</enum><text>the terms and conditions of contracts, agreements, and transactions cleared and settled by the derivatives clearing organization;</text> </subclause><subclause id="H9EEDDD2B440E4308841531C248A8287B"><enum>(II)</enum><text>clearing and other fees that the derivatives clearing organization charges its members and participants;</text> </subclause><subclause id="H4FD4444BE21248E8A97E0AA588E3A033"><enum>(III)</enum><text>the margin-setting methodology and the size and composition of the financial resource package of the derivatives clearing organization;</text> </subclause><subclause id="HBE5EB3749B8E475B8879C9B5ABD18007"><enum>(IV)</enum><text>other information relevant to participation in the settlement and clearing activities of the derivatives clearing organization; and</text> </subclause><subclause id="H27BE4D428E524473A414E1B71ED294AF"><enum>(V)</enum><text>daily settlement prices, volume, and open interest for all contracts settled or cleared by it.</text> </subclause></clause></subparagraph><subparagraph id="H1DC30824E657438B837FB3723CC35999"><enum>(M)</enum><header>Information-sharing</header><text>The derivatives clearing organization shall—</text> <clause id="HE30F3EBFA587489488C1AACBAA48E73F"><enum>(i)</enum><text>enter into and abide by the terms of all appropriate and applicable domestic and international information-sharing agreements; and</text> </clause><clause id="HB8003C18A05B4B06B5DA41AD20B8AB2A"><enum>(ii)</enum><text>use relevant information obtained from the agreements in carrying out the clearing organization’s risk management program.</text> </clause></subparagraph><subparagraph id="HEB2147509B5F4FC9B8BAE044896D68EB"><enum>(N)</enum><header>Antitrust considerations</header><text>Unless appropriate to achieve the purposes of this chapter, the derivatives clearing organization shall avoid—</text> <clause id="HBB1E85CB87974223A9590082348AF48B"><enum>(i)</enum><text>adopting any rule or taking any action that results in any unreasonable restraint of trade; or</text> </clause><clause id="HA0DEF8D5FA4F4CB3A70B28A629362324"><enum>(ii)</enum><text>imposing any material anticompetitive burden.</text> </clause></subparagraph><subparagraph id="H29906364BAF942ADB0767C020EB70425"><enum>(O)</enum><header>Governance fitness standards</header> <clause id="HC0536AC607874DBFAC420648F84373D0"><enum>(i)</enum><text>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.</text> </clause><clause id="H1B0CD4D981794E9D9C242ED4F4AF14BA"><enum>(ii)</enum><text>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.</text> </clause></subparagraph><subparagraph id="H219C7321528D42EE9D268D819ED2E478"><enum>(P)</enum><header>Conflicts of interest</header><text>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.</text> </subparagraph><subparagraph id="H903319C051CA4B89BC72A3DAF1402ABA"><enum>(Q)</enum><header>Composition of the boards</header><text>The derivatives clearing organization shall ensure that the composition of the governing board or committee includes market participants.</text> </subparagraph><subparagraph id="H4354925E7F3C49F3B5CD813A2395B78E"><enum>(R)</enum><header>Legal risk</header><text>The derivatives clearing organization shall have a well-founded, transparent, and enforceable legal framework for each aspect of its activities.</text> </subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph><paragraph id="H2F6DA34657B1480BBE2291265AFB2A1D"><enum>(4)</enum><text>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:</text> <quoted-block id="H51B62E0CD0594385BBA1185A71F4CC05" style="OLC"> <subsection id="H03961A83212D4C869E2D67E83EF79C13"><enum>(l)</enum><header>Reporting</header> <paragraph id="H4D01659D18414E77A95A3E6D01E34A27"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph><paragraph id="H866486BD144B42CF9BEB1B05795FC5B1"><enum>(2)</enum><header>Public information</header><text>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).</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph><paragraph id="H80F2BAB44455407688051FDEFB159F57"><enum>(5)</enum><text>Section 8(e) of the Commodity Exchange Act (7 U.S.C. 12(e)) is amended in the last sentence by adding <quote>central bank and ministries</quote> after <quote>department</quote> each place it appears.</text> </paragraph></subsection><subsection id="HC2A3D96EA23A453A88A02A51B20B494C"><enum>(c)</enum><header>Legal certainty for identified banking products</header> <paragraph id="H6437095C23F4478EBA11F863F6F527CC"><enum>(1)</enum><header>Repeal</header><text>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.</text> </paragraph><paragraph id="HF63A7AFACDBA461A8C9E7FCB53039663"><enum>(2)</enum><header>Legal certainty</header><text>Section 403 of the Legal Certainty for Bank Products Act of 2000 (7 U.S.C. 27a) is amended to read as follows:</text> <quoted-block display-inline="no-display-inline" id="H35399B039F324A48851BCBE19DD54225" style="OLC"> <section id="H67676D0053274EED8E42A67ED8CF6F5D"><enum>403.</enum><header>Exclusion of identified banking product</header> <subsection id="HF074A535CE6A464A8EDCFE1F3D15C3DB"><enum>(a)</enum><header>Exclusion</header><text>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.</text> </subsection><subsection id="H0D14FF4FF0F9402CA4445B0E1F192348"><enum>(b)</enum><header>Exception</header><text>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—</text> <paragraph id="H5FBE4BBC1A3F4644B78D8D8939DA7F97"><enum>(1)</enum><text>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</text> </paragraph><paragraph id="H5731B8BF8D724EC0A6ADDB8FF81C1EB4"><enum>(2)</enum><text>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.).</text> </paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection></section><section id="H34031581072F40F782E44F9697091171"><enum>114.</enum><header>Public reporting of aggregate swap data</header><text display-inline="no-display-inline">Section 8 of the Commodity Exchange Act (7 U.S.C. 12) is amended by adding after subsection (i) the following:</text> <quoted-block id="H7B7707E9AB8F44C08B31A59734BF59C0" style="OLC"> <subsection id="H4191AE795A1B4C0C87896FB9EFFDC56B"><enum>(j)</enum><header>Public reporting of aggregate swap data</header> <paragraph id="H99A6F164DE0B43459789B979BCBDCD36"><enum>(1)</enum><header>In general</header><text>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).</text> </paragraph><paragraph id="HFD0C345E07DF4B86B459C65F844CD675"><enum>(2)</enum><header>Designee of the commission</header><text>The Commission may designate a derivatives clearing organization or a swap repository to carry out the public reporting described in paragraph (1).</text> </paragraph><paragraph id="H1F4B0D026D53429B940568A11EB5F5EF"><enum>(3)</enum><header>Sources of information</header><text>The sources of the information to be publicly reported as described in paragraph (1) are—</text> <subparagraph id="HEC528B0B7A564706BF1BEBA9071F8263"><enum>(A)</enum><text>derivatives clearing organizations pursuant to section 5b(k)(2);</text> </subparagraph><subparagraph id="H15818E6D74C54F85A98C4AF0644573E4"><enum>(B)</enum><text>swap repositories pursuant to section 21(c)(3); and</text> </subparagraph><subparagraph id="HB836362AB21E45CE843066CE2A4E9B54"><enum>(C)</enum><text>reports received by the Commission pursuant to section 4r.</text> </subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </section><section id="HEC53678D151A4A0AB491B69592945BF4"><enum>115.</enum><header>Swap repositories</header><text display-inline="no-display-inline">The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by inserting after section 20 the following:</text> <quoted-block display-inline="no-display-inline" id="H8533500356F24B0CADAF9D065B9F7230" style="OLC"> <section id="H002B684591CF43C8A2D394856CD5FE91"><enum>21.</enum><header>Swap repositories</header> <subsection id="H27D52C9F679E4A1AB10150930B18827B"><enum>(a)</enum><header>Registration requirement</header> <paragraph id="H3642B5BAA6084D5593D6EE18F5DED0BE"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph><paragraph id="H7BD900ECFA8B44528341AB91228978C8"><enum>(2)</enum><header>Inspection and examination</header><text>Registered swap repositories shall be subject to inspection and examination by any representative of the Commission.</text> </paragraph></subsection><subsection id="H81B955DC198744D984C75992FE1E2779"><enum>(b)</enum><header>Standard setting</header> <paragraph id="H36BF8F3BD7794DEF9422197AE6A9FB6A"><enum>(1)</enum><header>Data identification</header><text>The Commission shall prescribe standards that specify the data elements for each swap that shall be collected and maintained by each registered swap repository.</text> </paragraph><paragraph id="HF9BF7C0780084496A8C434BAE9AF945D"><enum>(2)</enum><header>Data collection and maintenance</header><text>The Commission shall prescribe data collection and data maintenance standards for swap repositories.</text> </paragraph><paragraph id="H4869BC1C2D5B42A48494F7578290CB82"><enum>(3)</enum><header>Comparability</header><text>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.</text> </paragraph></subsection><subsection id="HFF78FF2AF45844E79D95312562097CA9"><enum>(c)</enum><header>Duties</header><text>A swap repository shall—</text> <paragraph id="H4EA5E671AD1749F19A4C548AF80F35F0"><enum>(1)</enum><text>accept data prescribed by the Commission for each swap under subsection (b);</text> </paragraph><paragraph id="H975B46E09AC04C43B559017E46C9F18E"><enum>(2)</enum><text>maintain such data in such form and manner and for such period as may be required by the Commission;</text> </paragraph><paragraph id="H6760AC6C2EFB4C8988E22D1229DA256B"><enum>(3)</enum><text>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</text> </paragraph><paragraph id="H7C9F7319447E4FE8A1EA63588BDA5286"><enum>(4)</enum><text>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.</text> </paragraph></subsection><subsection id="H9155B269F07B4731AB8C04BA3C72CC36"><enum>(d)</enum><header>Required registration for security-based swap repositories</header><text>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.</text> </subsection><subsection id="HAB6D716E912142B4A1E6972E03F019AC"><enum>(e)</enum><header>Harmonization of rules</header><text>Not later than 180 days after the effective date of the <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title>, 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.</text> </subsection><subsection id="H130804DD4CB64E34B69F627986AB37E8"><enum>(f)</enum><header>Exemptions</header><text>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.</text> </subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </section><section id="H2AEB09C660A14C17A578DBFB1CA85B30"><enum>116.</enum><header>Reporting and recordkeeping</header><text display-inline="no-display-inline">The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by inserting after section 4q the following:</text> <quoted-block display-inline="no-display-inline" id="H953C4DE04A6F499ABB9D10DC2E00E48E" style="OLC"> <section id="HFB41B1B3A9C64435AF1E631BE1A99396"><enum>4r.</enum><header>Reporting and recordkeeping for certain swaps</header> <subsection id="HF235A391E0F54BC4B35DF71AF9C55B83"><enum>(a)</enum><header>In general</header><text>Any person who enters into a swap and—</text> <paragraph id="H9A7DB909B1E341B8B908D9645AC20919"><enum>(1)</enum><text>did not clear the swap in accordance with section 2(j)(1); and</text> </paragraph><paragraph id="H08924BFAD7C64C3A908E69100F8E5196"><enum>(2)</enum><text>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,</text> </paragraph><continuation-text continuation-text-level="subsection">shall meet the requirements in subsection (b).</continuation-text></subsection><subsection id="H6EAE18594BE247B69B06E8E7662865F7"><enum>(b)</enum><header>Reports</header><text>Any person described in subsection (a) shall—</text> <paragraph id="H5A857574089D437199931B9A18A8E196"><enum>(1)</enum><text>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</text> </paragraph><paragraph id="H5D6806DCC28B42A490116046FBBEEF8F"><enum>(2)</enum><text>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.</text> </paragraph></subsection><subsection id="H449AD67AF2284FF0BAD925798C99463B"><enum>(c)</enum><header>Identical data</header><text>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.</text> </subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </section><section id="H49949080CC144C7BA1130EFDE7537C00"><enum>117.</enum><header>Registration and regulation of swap dealers and major swap participants</header><text display-inline="no-display-inline">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:</text> <quoted-block display-inline="no-display-inline" id="H58DE5ECD7AC84F2288FE854906995733" style="OLC"> <section id="H8B58448579E347B5ADB195D18E7CF62D"><enum>4s.</enum><header>Registration and regulation of swap dealers and major swap participants</header> <subsection id="HC5611B0E64B54878A804F5C85AA02D41"><enum>(a)</enum><header>Registration</header> <paragraph id="HA01FB5D28F0C4EE287F208A9A9D3C485"><enum>(1)</enum><text>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.</text> </paragraph><paragraph id="HE9DF02B2F52548B68C539E164A101C40"><enum>(2)</enum><text>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.</text> </paragraph></subsection><subsection id="H0FFA228D26DA4BE0B96B5ACC395FF37B"><enum>(b)</enum><header>Requirements</header> <paragraph id="H2714EB2F47DB452AA79634F77CBEC959"><enum>(1)</enum><header>In general</header><text>A person shall register as a swap dealer or major swap participant by filing a registration application with the Commission.</text> </paragraph><paragraph id="H2CFC40D7D9D44EA9B04D70C94CFFEFC0"><enum>(2)</enum><header>Contents</header><text>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.</text> </paragraph><paragraph id="H04FA8C8F76A44D3BA19D369E8C1E7302"><enum>(3)</enum><header>Expiration</header><text>Each registration shall expire at such time as the Commission may by rule or regulation prescribe.</text> </paragraph><paragraph id="HFC28514DDD72455AAE3DFEE6FA740AF7"><enum>(4)</enum><header>Rules</header><text>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.</text> </paragraph><paragraph id="H30E711CF654B46FD931118063E31FDB1"><enum>(5)</enum><header>Transition</header><text>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 <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title>.</text> </paragraph><paragraph id="H3944C5ABCB0645B2ADCB6C97185D7CAB"><enum>(6)</enum><header>Statutory disqualification</header><text>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.</text> </paragraph></subsection><subsection id="H9E049DB5F02144B5A4C1DF0605042F9B"><enum>(c)</enum><header>Dual registration</header> <paragraph id="H61F2A2F0FD104DEEB9CCEF42B7F4C37D"><enum>(1)</enum><header>Swap dealer</header><text>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.</text> </paragraph><paragraph id="H62130466E9AC4960AB95D353B18B3B3C"><enum>(2)</enum><header>Major swap participant</header><text>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.</text> </paragraph></subsection><subsection id="H4B1E65473DF1414987FEDF15FF3A9D4A"><enum>(d)</enum><header>Joint rules</header> <paragraph id="H5A0EA431313041A596C26DD60FED1DCB"><enum>(1)</enum><header>In general</header><text>Not later than 180 days after the effective date of the <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title>, 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.).</text> </paragraph><paragraph id="HC52A9FCA28B74819945D9AF3B95CDF98"><enum>(2)</enum><header>Exception for prudential requirements</header><text>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.</text> </paragraph></subsection><subsection id="H3F767739AB294D0B889884A890F30E67"><enum>(e)</enum><header>Capital and margin requirements</header> <paragraph id="H71D5A0B74D164E03B7C49A35AE834852"><enum>(1)</enum><header>In general</header> <subparagraph id="H90E87FB0B4824A30A947F8A408B7723A"><enum>(A)</enum><header>Bank swap dealers and major swap participants</header><text>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.</text> </subparagraph><subparagraph id="H3F5841A6772843B6BDC1B20DA6721815"><enum>(B)</enum><header>Nonbank swap dealers and major swap participants</header><text>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.</text> </subparagraph></paragraph><paragraph id="H739CEF6C21B047878071BD619C902BCD"><enum>(2)</enum><header>Joint rules</header> <subparagraph id="H7CFE6492967D40F39B25CA3DB78CB8B3"><enum>(A)</enum><header>Bank swap dealers and major swap participants</header><text>Within 180 days of the enactment of the <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title>, 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.</text> </subparagraph><subparagraph id="H041D7F2090154723B7290DC7C14DE91B"><enum>(B)</enum><header>Nonbank swap dealers and major swap participants</header><text>Within 180 days of the enactment of the <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title>, 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.</text> </subparagraph></paragraph><paragraph id="HEA084BB1C27A431AB87C2224F33F508E"><enum>(3)</enum><header>Capital</header> <subparagraph id="H638CE2D0B1A64B8C89EC9B3A0B0ADC77"><enum>(A)</enum><header>Bank swap dealers and major swap participants</header><text>In setting capital requirements under this subsection, the Prudential Regulators shall impose:</text> <clause id="HAA1B089B98A44AD795FD403C65EDEED9"><enum>(i)</enum><text display-inline="yes-display-inline">a capital requirement that is greater than zero for swaps that are cleared by a derivatives clearing organization; and</text> </clause><clause id="H11808F09CAB24BBF900973CD0AA76CB4"><enum>(ii)</enum><text>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.</text> </clause></subparagraph><subparagraph id="HC323EFF5E7034454AA7BF95F4F06D53C"><enum>(B)</enum><header>Nonbank swap dealers and major swap participants</header><text>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.</text> </subparagraph><subparagraph id="H9A8E54BD266F4C66B6B73B9493C6AA6B"><enum>(C)</enum><header>Bank holding companies</header><text>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.</text> </subparagraph><subparagraph id="H2EE0A4DDD1414A888CD289AA1722644A"><enum>(D)</enum><text>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.</text> </subparagraph></paragraph><paragraph id="HBF68B87A7C3C4EBC8321999166CC0F53"><enum>(4)</enum><header>Margin</header> <subparagraph id="HE97BD218A93C4A40A45B571DF0D8F3B4"><enum>(A)</enum><header>Bank swap dealers and major swap participants</header><text>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.</text> </subparagraph><subparagraph id="H9D64472E99D2460A93A08601220BAD4B"><enum>(B)</enum><header>Non-swap dealers or major swap participants</header><text display-inline="yes-display-inline">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.</text> </subparagraph><subparagraph id="H06048C3D7E434E2DBE9E5DB846A3F933"><enum>(C)</enum><header>Nonbank swap dealers and major swap participants</header><text>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.</text> </subparagraph></paragraph></subsection><subsection id="HB4784DEC0BDA4C37B2314A2EAFFACFC9"><enum>(f)</enum><header>Reporting and recordkeeping</header> <paragraph id="H6D1F6C476205484B9BB20D9E73118D91"><enum>(1)</enum><header>In general</header><text>Each registered swap dealer and major swap participant—</text> <subparagraph id="H6893011A924145B78093D2700AE996C0"><enum>(A)</enum><text>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;</text> </subparagraph><subparagraph id="HD670997FA5284BC0AC9EEEEBC3FDA7A3"><enum>(B)</enum><text>for which—</text> <clause id="HBD127C9AF6114BF4AF9F7002D164F61E"><enum>(i)</enum><text>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;</text> </clause><clause id="HCA74CA39D7854170889DCA322A5C7835"><enum>(ii)</enum><text>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;</text> </clause></subparagraph><subparagraph id="HE9AC29DED71E47F8BF5BDE1562922EEF"><enum>(C)</enum><text>shall keep such books and records open to inspection and examination by any representative of the Commission; and</text> </subparagraph><subparagraph id="HDB5CEC032C1B472192BFA25BCBB1A425"><enum>(D)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph><paragraph id="HC79CA5DE67ED44CCB071C09F09CE88C6"><enum>(2)</enum><header>Rules</header><text>Within 365 days of the enactment of the <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title>, 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.</text> </paragraph></subsection><subsection id="H9A9983EE56D34DECBD705C25967FAAA1"><enum>(g)</enum><header>Daily trading records</header> <paragraph id="H83592A6BB3B843DCB55F96B7687593AF"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph><paragraph id="HBA2FDAE1C5184ABB92D9C1E746F3F021"><enum>(2)</enum><header>Information requirements</header><text>The daily trading records shall include such information as the Commission shall prescribe by rule or regulation.</text> </paragraph><paragraph id="H45CD205DEDAB4434AAD84D4A18FC01FA"><enum>(3)</enum><header>Customer records</header><text>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.</text> </paragraph><paragraph id="H7BCF57A552884C39A14710D44241F747"><enum>(4)</enum><header>Audit trail</header><text>Each registered swap dealer and major swap participant shall maintain a complete audit trail for conducting comprehensive and accurate trade reconstructions.</text> </paragraph><paragraph id="HF8A916DC667D4335A2B7D464D02D5C23"><enum>(5)</enum><header>Rules</header><text>Within 365 days of the enactment of the <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title>, 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.</text> </paragraph></subsection><subsection id="HB8F7578089C948DB9BEA2F72372539E3"><enum>(h)</enum><header>Business conduct standards</header> <paragraph id="HAEA6E5936DB046C89A999058832E6FEF"><enum>(1)</enum><header>In general</header><text>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—</text> <subparagraph id="H01EF31FB70EF4475B8CABADC9349C754"><enum>(A)</enum><text>fraud, manipulation, and other abusive practices involving swaps (including swaps that are offered but not entered into);</text> </subparagraph><subparagraph id="H17CF30E9C59C416880017BDA85D58B31"><enum>(B)</enum><text>diligent supervision of its business as a swap dealer;</text> </subparagraph><subparagraph id="HDA68B73A54224070A8C20E3F44705521"><enum>(C)</enum><text>adherence to all applicable position limits; and</text> </subparagraph><subparagraph id="H7AB39CB9FA91490DB595631C5A982616"><enum>(D)</enum><text>such other matters as the Commission shall determine to be necessary or appropriate.</text> </subparagraph></paragraph><paragraph id="H26E3A04780484EEB9C8DFCA1EEE02277"><enum>(2)</enum><header>Business conduct requirements</header><text>Business conduct requirements adopted by the Commission shall—</text> <subparagraph id="H2C4F5770575349BF94988A6BE1236B40"><enum>(A)</enum><text>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;</text> </subparagraph><subparagraph id="H113F3D23A35D4BD896713137DBBD176C"><enum>(B)</enum><text>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—</text> <clause id="HF8569A7D6C084174BE525B503962AE19"><enum>(i)</enum><text>information about the material risks and characteristics of the swap;</text> </clause><clause id="H8B0EF1A112614E9ABFF0D347670AADB8"><enum>(ii)</enum><text>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</text> </clause><clause id="H952142163D2646128F9FEC0BD8C6C9D2"><enum>(iii)</enum><text>any other material incentives or conflicts of interest that the swap dealer or major swap participant may have in connection with the swap; and</text> </clause></subparagraph><subparagraph id="H625DA30169A3442EB00C59052DA87BED"><enum>(C)</enum><text>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.</text> </subparagraph></paragraph><paragraph id="HA736A225DC234057911A5253D4CFAF89"><enum>(3)</enum><header>Rules</header><text>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 <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title>.</text> </paragraph></subsection><subsection id="H13CBB0C6753D416787A6A858817F00B0"><enum>(i)</enum><header>Documentation and back office standards</header> <paragraph id="HC94A41FC75204D608A5E6611D18C256E"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph><paragraph id="H22B5232A24194DF0A183A2E53F88F41E"><enum>(2)</enum><header>Rules</header><text>Within 365 days of the enactment of the <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title>, 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.</text> </paragraph></subsection><subsection id="H2F0A519254F14B82B48FA7226828C19A"><enum>(j)</enum><header>Dealer responsibilities</header><text>Each registered swap dealer and major swap participant at all times shall comply with the following requirements:</text> <paragraph id="H1EA9267214824170B3D543BAF182F2A6"><enum>(1)</enum><header>Monitoring of trading</header><text>The swap dealer or major swap participant shall monitor its trading in swaps to prevent violations of applicable position limits.</text> </paragraph><paragraph id="HC37C07DDFBFC49598B812FA1100B8F5E"><enum>(2)</enum><header>Disclosure of general information</header><text>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—</text> <subparagraph id="H4784F1CBFF1B45D898A1F6E77785434F"><enum>(A)</enum><text>terms and conditions of its swaps;</text> </subparagraph><subparagraph id="HC809BB6513D84B6C8283EF58CD85140D"><enum>(B)</enum><text>swap trading operations, mechanisms, and practices;</text> </subparagraph><subparagraph id="H5590A00FE6784106A8206E812D74C4E0"><enum>(C)</enum><text>financial integrity protections relating to swaps; and</text> </subparagraph><subparagraph id="H73CEAB4FB4DA47F789F30DB0DE166C4A"><enum>(D)</enum><text>other information relevant to its trading in swaps.</text> </subparagraph></paragraph><paragraph id="HDBBB03B0C5314C1685BC2132AE2C70F4"><enum>(3)</enum><header>Ability to obtain information</header><text>The swap dealer or major swap participant shall—</text> <subparagraph id="H13C6E511E2BA4676BE5DC16F1B8F9B6F"><enum>(A)</enum><text>establish and enforce internal systems and procedures to obtain any necessary information to perform any of the functions described in this section; and</text> </subparagraph><subparagraph id="H5E03C9B7E5F34A88A99F128AB7C30225"><enum>(B)</enum><text>provide the information to the Commission and to the Prudential Regulator for such swap dealer or major swap participant, as applicable, upon request.</text> </subparagraph></paragraph><paragraph id="H4DE53595B55E443D970205F406CC1D1F"><enum>(4)</enum><header>Conflicts of interest</header><text>The swap dealer and major swap participant shall implement conflict-of-interest systems and procedures that—</text> <subparagraph id="H66D4701958BA431690911EB9BEB71456"><enum>(A)</enum><text>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</text> </subparagraph><subparagraph id="H3567551713DC4514A5B8D294B272D1F9"><enum>(B)</enum><text>address such other issues as the Commission determines appropriate.</text> </subparagraph></paragraph><paragraph id="HA0D8CACB3C3141C390E87D0E5D92C46F"><enum>(5)</enum><header>Antitrust considerations</header><text>Unless necessary or appropriate to achieve the purposes of this Act, the swap dealer or major swap participant shall avoid—</text> <subparagraph id="HCC3206615B1949DB9779EB7C3AF0F124"><enum>(A)</enum><text>adopting any processes or taking any actions that result in any unreasonable restraints of trade; or</text> </subparagraph><subparagraph id="H9988775951C54610B18E9219B823957B"><enum>(B)</enum><text>imposing any material anticompetitive burden on trading.</text> </subparagraph></paragraph></subsection><subsection id="HD63CBE50204848B1A18C70B56A93BD5E"><enum>(k)</enum><header>Rules</header><text>The Commission, the Securities and Exchange Commission, and the Prudential Regulators shall consult with each other prior to adopting any rules under the <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title>.</text> </subsection><subsection id="HA4E4054A08D949B8AF5C59564C689592"><enum>(l)</enum><header>Recognition of comparable non-u.s. regulation</header><text display-inline="yes-display-inline">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.</text> </subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </section><section id="H3E4586DD56FC41FBA73E779BCCACD166"><enum>118.</enum><header>Segregation of assets held as collateral in swap transactions</header><text display-inline="no-display-inline">The Commodity Exchange Act (7 U.S.C. 1 et seq.) is further amended by inserting after section 4s the following:</text> <quoted-block display-inline="no-display-inline" id="H195F6049AF0548F396EC46CBF13C23CD" style="OLC"> <section id="HAE3D3B03D5D64364BB8E83FD2FEF5E0F"><enum>4t.</enum><header>Segregation of assets held as collateral in swap transactions</header> <subsection id="H7E3B249360DC4DC0867E0D5AAED7FD27"><enum>(a)</enum><header>Cleared swaps</header><text display-inline="yes-display-inline">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.</text> </subsection><subsection id="HE4236869046245DCAC988B1318D57907"><enum>(b)</enum><header>Over-the-counter swaps</header><text display-inline="yes-display-inline">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.</text> </subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </section><section id="HE9B8A06DA8AE4EB6A1C142F59E20B7D8"><enum>119.</enum><header>Conflicts of interest</header><text display-inline="no-display-inline">Section 4d of the Commodity Exchange Act (7 U.S.C. 6d) is amended by—</text> <paragraph id="HC08837E5EB4046F8A90E66E1E9E26643"><enum>(1)</enum><text>redesignating subsection (c) as subsection (d); and</text> </paragraph><paragraph id="H13E2FE59C6294DF4876994148095BAED"><enum>(2)</enum><text>inserting after subsection (b) the following:</text> <quoted-block id="HF0FA999D8E174DF9AD75D7F5981162B2" style="OLC"> <subsection id="H1451157DF7B94B0CA3CC028B0AF97746"><enum>(c)</enum><header>Conflicts of interest</header><text>The Commission shall require that futures commission merchants and introducing brokers implement conflict-of-interest systems and procedures that—</text> <paragraph id="H4B8563BC69E54ECE8B3DD1370B894DC7"><enum>(1)</enum><text>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</text> </paragraph><paragraph id="H1F6DA24C9F08454D9B67308E2A6631D3"><enum>(2)</enum><text>address such other issues as the Commission determines appropriate.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></section><section id="H0318F5F586144D2282CA66CAD732642F"><enum>120.</enum><header>Swap execution facilities</header><text display-inline="no-display-inline">The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by inserting after section 5g the following:</text> <quoted-block display-inline="no-display-inline" id="H0E68CB2EDE824B6488EDAA4FFB5166E9" style="OLC"> <section id="H15BA0584643D4E6BB6BF900A963F49EC"><enum>5h.</enum><header>Swap execution facilities</header> <subsection id="H816FE7F0598C490BBC1A5D0DC30DBD3C"><enum>(a)</enum><header>Registration</header> <paragraph id="HD7D6147EC9D64C068BF29DB9EF96180E"><enum>(1)</enum><header>In general</header><text>No person may operate a facility for the trading of swaps unless the facility is registered as a swap execution facility under this section.</text> </paragraph><paragraph id="H8F983B83CFCF4173A961675701B1E5FF"><enum>(2)</enum><header>Dual registration</header><text>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.</text> </paragraph></subsection><subsection id="HF479A1C195A5430296263DFB44C70149"><enum>(b)</enum><header>Requirements for trading</header><text>A swap execution facility that is registered under subsection (a) may trade any swap.</text> </subsection><subsection id="H93832AC089844619B0C02AF2F37A2ADC"><enum>(c)</enum><header>Trading by contract markets</header><text>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.</text> </subsection><subsection id="H168C1399AA3840D09AE6CAFD63533C46"><enum>(d)</enum><header>Criteria for registration</header> <paragraph id="HAFE8F3013EC8484F8D93117B76F30AE5"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph><paragraph id="H2646CCEE3B9B4EC89B3E6E6169B75038"><enum>(2)</enum><header>Deterrence of abuses</header><text>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—</text> <subparagraph id="H38D1B3035F3948C0B8C38A2EF73368A9"><enum>(A)</enum><text>obtain information necessary to perform the functions required under this section; or</text> </subparagraph><subparagraph id="H4375AC3A19F24F43A55D08F09DCBDC0D"><enum>(B)</enum><text>use means to—</text> <clause id="H0E8BD488669C460A846B8D1E597ADC0A"><enum>(i)</enum><text>provide market participants with impartial access to the market; and</text> </clause><clause id="H2A7AF8CC39214C6F82B6E4A986959B57"><enum>(ii)</enum><text>capture information that may be used in establishing whether rule violations have occurred.</text> </clause></subparagraph></paragraph><paragraph id="H9AA7FF9E826D4515916C6D6B96C0E76D"><enum>(3)</enum><header>Trading procedures</header><text>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.</text> </paragraph><paragraph id="H79349CE4293F4EA79D7A321AEC83513A"><enum>(4)</enum><header>Financial integrity of transactions</header><text>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).</text> </paragraph></subsection><subsection id="H6D3A2C8994404B5CBD3FE98EB095CFF5"><enum>(e)</enum><header>Core principles for swap execution facilities</header> <paragraph id="HAFA6B2F18CC74B18BA144B3D1E19D8DA"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph><paragraph id="HC614227BD10F489680A815119EA13B02"><enum>(2)</enum><header>Compliance with rules</header><text>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.</text> </paragraph><paragraph id="HC220AC5280674A9C84B5B94393C2B3F0"><enum>(3)</enum><header>Swaps not readily susceptible to manipulation</header><text>The swap execution facility shall permit trading only in swaps that are not readily susceptible to manipulation.</text> </paragraph><paragraph id="H75E284E762FA490085AF7E88B4131468"><enum>(4)</enum><header>Monitoring of trading</header><text>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.</text> </paragraph><paragraph id="H64A0B7DB3A0546C9B8C24EF7376368AC"><enum>(5)</enum><header>Ability to obtain information</header><text>The swap execution facility shall—</text> <subparagraph id="HBF74D1D7AF244B9993A35AB872F87B46"><enum>(A)</enum><text>establish and enforce rules that will allow the facility to obtain any necessary information to perform any of the functions described in this subsection;</text> </subparagraph><subparagraph id="H9764739147244FDDA579717B1132BB8E"><enum>(B)</enum><text>provide the information to the Commission upon request; and</text> </subparagraph><subparagraph id="H51AF7402AD40413EA0A1427E9EBB5E37"><enum>(C)</enum><text>have the capacity to carry out such international information-sharing agreements as the Commission may require.</text> </subparagraph></paragraph><paragraph id="H4B826D633A02475AA1442537519DE8DE"><enum>(6)</enum><header>Emergency authority</header><text>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.</text> </paragraph><paragraph id="HAB8D1532E96F4F1EB2E0CB7400BE97D7"><enum>(7)</enum><header>Timely publication of trading information</header><text>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.</text> </paragraph><paragraph id="HB64FD9C6D1A9496EABF823A9C52641DA"><enum>(8)</enum><header>Recordkeeping and reporting</header><text>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.</text> </paragraph><paragraph id="HAB257F65E2054BB88C818D1C2822C75C"><enum>(9)</enum><header>Antitrust considerations</header><text>Unless necessary or appropriate to achieve the purposes of this Act, the swap execution facility shall avoid—</text> <subparagraph id="H5CC71935599745E1BD70001066E63469"><enum>(A)</enum><text>adopting any rules or taking any actions that result in any unreasonable restraints of trade; or</text> </subparagraph><subparagraph id="H86F96B110B3D491EAED57448A9886420"><enum>(B)</enum><text>imposing any material anticompetitive burden on trading on the swap execution facility.</text> </subparagraph></paragraph><paragraph id="HDF191966E65A4CC78EADBFEF1A690AAD"><enum>(10)</enum><header>Conflicts of interest</header><text>The swap execution facility shall—</text> <subparagraph id="HFD5D579274074A80BBE852AE9F7C2F32"><enum>(A)</enum><text>establish and enforce rules to minimize conflicts of interest in its decisionmaking process; and</text> </subparagraph><subparagraph id="HC834C5C8F9DB44A59AE8D867FAF3B125"><enum>(B)</enum><text>establish a process for resolving the conflicts of interest.</text> </subparagraph></paragraph><paragraph id="H3D2D769805E745789591DC114F6D89C6"><enum>(11)</enum><header>Designation of compliance officer</header> <subparagraph id="HC61BCAFF7AA64D379BF575C6EAB4EFFC"><enum>(A)</enum><header>In general</header><text>Each swap execution facility shall designate an individual to serve as a compliance officer.</text> </subparagraph><subparagraph id="HEF6D356533654BD3A2F8EE679581F289"><enum>(B)</enum><header>Duties</header><text>The compliance officer shall—</text> <clause id="H5481CC585D7A425C845489704456F5B8"><enum>(i)</enum><text>report directly to the board or to the senior officer of the facility; and</text> </clause><clause id="HB6EA72EC916A4FBCACFFB5341F1C46B6"><enum>(ii)</enum><text>shall—</text> <subclause id="H3C7EC518D70B40DDA8CA58223BD78FEE"><enum>(I)</enum><text>review compliance with the core principles in this subsection;</text> </subclause><subclause id="HDEF8390CECE649C6BDE5D3CF9CD0644F"><enum>(II)</enum><text>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;</text> </subclause><subclause id="H3114F1B0AE334685AB8F82030C8BA070"><enum>(III)</enum><text>be responsible for administering the policies and procedures required to be established pursuant to this section; and</text> </subclause><subclause id="H18534F045333498EBF2C524AA1320145"><enum>(IV)</enum><text>ensure compliance with commodity laws and the rules and regulations issued thereunder, including rules prescribed by the Commission pursuant to this section; and</text> </subclause></clause><clause id="HFAD52609F0B549DDA5B068BA80215B3D"><enum>(iii)</enum><text>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.</text> </clause></subparagraph><subparagraph id="HC98366B06C294B0895C434B4D6EFE154"><enum>(C)</enum><header>Annual reports required</header><text>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.</text> </subparagraph></paragraph></subsection><subsection id="H41B912E7E84540C4A3F650A604C5866F"><enum>(f)</enum><header>Exemptions</header><text>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.</text> </subsection><subsection id="HAF6B9E12FB7140E298829C9B1ADB674D"><enum>(g)</enum><header>Harmonization of rules</header><text>Within 180 days of the enactment of the <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title>, 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).</text> </subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </section><section id="HF6794DF3A7874219BC75BE2DD88141E7"><enum>121.</enum><header>Derivatives transaction execution facilities and exempt boards of trade</header><text display-inline="no-display-inline">Sections 5a and 5d of the Commodity Exchange Act (7 U.S.C. 7 and 7a–3) are repealed.</text> </section><section id="H50035D475C814DA7BB40FFCC5116528A"><enum>122.</enum><header>Designated contract markets</header> <subsection id="H2EA3BF00B2A64D0AB693F155508F1BAA"><enum>(a)</enum><text>Section 5(d) of the Commodity Exchange Act (7 U.S.C. 7(d)) is amended by striking paragraph (9) and inserting the following:</text> <quoted-block id="H314E8DB57DE1428EB4530DCA688FAC8D" style="OLC"> <paragraph id="HFB27C960D16148F59B8275C561BC7A67"><enum>(9)</enum><header>Execution of transactions</header> <subparagraph id="H3BAEE2F574B444F894293AB006F66F45"><enum>(A)</enum><text>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.</text> </subparagraph><subparagraph id="HC982B139F13D4102860A13942FAA840D"><enum>(B)</enum><text>The rules may authorize, for bona fide business purposes—</text> <clause id="H6AEEDEB89A154DBF9026B347F6944311"><enum>(i)</enum><text>transfer trades or office trades;</text> </clause><clause id="H5F2130A92CC443F380C4F81BF11D0FFD"><enum>(ii)</enum><text>an exchange of—</text> <subclause id="HEC6E96D0029C4C3E8C000EF2186B6F6A"><enum>(I)</enum><text>futures in connection with a cash commodity transaction;</text> </subclause><subclause id="HEC33D4498D2F46F78090DAE090B00588"><enum>(II)</enum><text>futures for cash commodities; or</text> </subclause><subclause id="HD25DB189ABA145E4A2A0ADE9897EF622"><enum>(III)</enum><text>futures for swaps; or</text> </subclause></clause><clause id="HACD8D5B363E044559A63A6C4A32DF720"><enum>(iii)</enum><text>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.</text> </clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection id="H6221EE4C10884B6394A7E31BDB964FB2"><enum>(b)</enum><text>Section 5(d) of the Commodity Exchange Act (7 U.S.C. 7(d)) is amended by adding after paragraph (18) the following:</text> <quoted-block id="H6D5502C5B09346F8A8A0DBD55A7C1A28" style="OLC"> <paragraph id="HDDAE1D5AE0D6451AB4ACAA05B139B3EE"><enum>(19)</enum><header>Financial resources</header><text>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.</text> </paragraph><paragraph id="H8D92942DB5A5425C8E34969C1A01F88B"><enum>(20)</enum><header>System safeguards</header><text>The board of trade shall—</text> <subparagraph id="H6B6216C34DDD4C8C978019ED3A4D7EA8"><enum>(A)</enum><text>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;</text> </subparagraph><subparagraph id="HB381EAAACCAE4DD98A487CA64EA38FB1"><enum>(B)</enum><text>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</text> </subparagraph><subparagraph id="H4B8A673DE328490086464F4D6E1692AB"><enum>(C)</enum><text>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.</text> </subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section><section id="HDEAAF592DD0441A9882A15CC5E7D174A"><enum>123.</enum><header>Margin</header><text display-inline="no-display-inline">Section 8a of the Commodity Exchange Act (7 U.S.C. 12a) is amended in paragraph (7)(C), by striking <quote>, excepting the setting of levels of margin</quote>.</text> </section><section id="H5C1D3BDA74FA4FC19696875E444F3D7A"><enum>124.</enum><header>Position limits</header> <subsection id="HD9B5EDFDE9FB4F51B4BCBBC5D78735A5"><enum>(a)</enum><text>Section 4a(a) of the Commodity Exchange Act (7 U.S.C. 6a(a)) is amended by—</text> <paragraph id="H199E6F902E9E4A3D9CAD951D7A84C364"><enum>(1)</enum><text>inserting <quote>(1)</quote> after <quote>(a)</quote>;</text> </paragraph><paragraph id="HCAF5FBC653D44142883436CEABA72A14"><enum>(2)</enum><text>striking <quote>on electronic trading facilities with respect to a significant price discovery contract</quote> in the first sentence and inserting <quote>swaps that perform or affect a significant price discovery function with respect to regulated markets</quote>;</text> </paragraph><paragraph id="H71B13A98B4E1439E9BCB3A9B3BA98C4D"><enum>(3)</enum><text>inserting <quote>, including any group or class of traders,</quote> in the second sentence after <quote>held by any person</quote>;</text> </paragraph><paragraph id="HDDEE1995438647A7B0B20E2775150CAD"><enum>(4)</enum><text>striking <quote>on an electronic trading facility with respect to a significant price discovery contract,</quote> in the second sentence and inserting <quote>swaps that perform or affect a significant price discovery function with respect to regulated markets,</quote>; and</text> </paragraph><paragraph id="HF0830226DF1D42A3B49A9819AB2D9A06"><enum>(5)</enum><text>inserting at the end the following:</text> <quoted-block id="H3AE0687BBB95411686A312426A1CF812" style="OLC"> <paragraph id="H36E1BADC2A26438D8AD704146FDEDBE0"><enum>(2)</enum><header>Aggregate position limits</header><text>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—</text> <subparagraph id="H8BE12B9502A54C1BAA583D21B412931E"><enum>(A)</enum><text>contracts listed by designated contract markets;</text> </subparagraph><subparagraph id="H5CD1C8DB25D0401AADF6F170834E9732"><enum>(B)</enum><text>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</text> </subparagraph><subparagraph id="H5576182239094C4D817F87C94E21E10E"><enum>(C)</enum><text>swap contracts that perform or affect a significant price discovery function with respect to regulated markets.</text> </subparagraph></paragraph><paragraph id="H923DF3B72D574E098BCAE27E24F7309B"><enum>(3)</enum><header>Significant price discovery function</header><text>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:</text> <subparagraph id="H62121436871B49D4912EB07C7B360DC9"><enum>(A)</enum><header>Price linkage</header><text>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.</text> </subparagraph><subparagraph id="H53CBF010E0874F14BFD334E158EC53F2"><enum>(B)</enum><header>Arbitrage</header><text>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.</text> </subparagraph><subparagraph id="H739A37DD7FD34BC9B320C9350DF8818A"><enum>(C)</enum><header>Material price reference</header><text>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.</text> </subparagraph><subparagraph id="HA80DA9518E914DC18B9FCDE5385F094A"><enum>(D)</enum><header>Material liquidity</header><text>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.</text> </subparagraph><subparagraph id="H3E19F2D8DEC149B88F3A12AAC3A9C014"><enum>(E)</enum><header>Other material factors</header><text>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.</text> </subparagraph></paragraph><paragraph id="H5E589D9A3AB2417F9CE72164F27973B8"><enum>(4)</enum><header>Exemptions</header><text>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.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection><subsection id="HFB1CE5CD3E464562A37F11FCAD323718"><enum>(b)</enum><text>Section 4a(b) of the Commodity Exchange Act (7 U.S.C. 6a(b)) is amended—</text> <paragraph id="H453D604CA28540EE9E29F94D08EC0873"><enum>(1)</enum><text>in paragraph (1), by striking <quote>or derivatives transaction execution facility or facilities or electronic trading facility</quote> and inserting <quote>or swap execution facility or facilities</quote>; and</text> </paragraph><paragraph id="H0421ED4A2E73437EBCABF5C3C7C38DA5"><enum>(2)</enum><text>in paragraph (2), by striking <quote>or derivatives transaction execution facility or facilities or electronic trading facility</quote> and inserting <quote>or swap execution facility</quote>.</text> </paragraph></subsection></section><section id="HB5CF6D6CE17B47C886F9132E95CE2429"><enum>125.</enum><header>Enhanced authority over registered entities</header> <subsection id="H59B3D90407804995AAF4FBD6A206B079"><enum>(a)</enum><text>Section 5(d)(1) of the Commodity Exchange Act (7 U.S.C. 7(d)(1)) is amended by striking <quote>The board of trade shall have</quote> and inserting <quote>Except where the Commission otherwise determines by rule or regulation pursuant to section 8a(5), the board of trade shall have</quote>.</text> </subsection><subsection id="H6E51B5AD566A443E8E1E45F49CB173F2"><enum>(b)</enum><text>Section 5b(c)(2)(A) of the Commodity Exchange Act (7 U.S.C. 7a–1(c)(2)(A)) is amended by striking <quote>The applicant shall have</quote> and inserting <quote>Except where the Commission otherwise determines by rule or regulation pursuant to section 8a(5), the applicant shall have</quote>.</text> </subsection><subsection id="H37E943079CB344DD8DF676994E44820C"><enum>(c)</enum><text>Section 5c(a) of the Commodity Exchange Act (7 U.S.C. 7a–2(a)) is amended—</text> <paragraph id="H6F7CEA84C33F4ABC8F025A408AFC2DA6"><enum>(1)</enum><text>in paragraph (1), by striking <quote>5a(d) and 5b(c)(2)</quote> and inserting <quote>5b(c)(2) and 5h(e)</quote>; and</text> </paragraph><paragraph id="HA663EA2632944E9190CCBA28601E0FF6"><enum>(2)</enum><text>in paragraph (2), by striking <quote>shall not</quote> and inserting <quote>may</quote>.</text> </paragraph></subsection><subsection id="HFDEAD6A86523451299406D93BD4D1661"><enum>(d)</enum><text>Section 5c(c)(1) of the Commodity Exchange Act (7 U.S.C. 7a–2(c)(1)) is amended by inserting <quote>(A)</quote> after <quote><header-in-text level="subparagraph" style="OLC">In general</header-in-text>.—</quote> and adding at the end the following:</text> <quoted-block id="HB476D3E80A7F4F6EB92C285222FE0119" style="OLC"> <subparagraph id="H2BDFDB78CB4646478D01AB10E566FF2A"><enum>(B)</enum><text>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).</text> </subparagraph><subparagraph id="H5F486C216A904C42843D6E3787D09EB5"><enum>(C)</enum><text>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.</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection id="H3CFD3ACBA59B43079D69336F76065493"><enum>(e)</enum><text>Section 5c(d) of the Commodity Exchange Act (7 U.S.C. 7a–2(d)) is repealed.</text> </subsection></section><section id="H2E550CD04E5D424BA8FA8B9D6AA9C639"><enum>126.</enum><header>Foreign boards of trade</header> <subsection id="H77161E5374464F81BF170C2766F234FC"><enum>(a)</enum><header>___</header><text>Section 4(b) of the Commodity Exchange Act (7 U.S.C. 6(b)) is amended by striking <quote>No rule or regulation</quote> and inserting <quote>Except as provided in paragraphs (1) and (2), no rule or regulation</quote>.</text> </subsection><subsection id="H8283A27AF812483D9817BF7866326A66"><enum>(b)</enum><header>___</header><text>Section 4(b) of the Commodity Exchange Act (7 U.S.C. 6(b)) is further amended by inserting before <quote>The Commission</quote> the following:</text> <quoted-block id="H0E230472987444A691AFEE64A7ADDA01" style="OLC"> <paragraph id="H2A45A2DEA6434E66B8B75B569AB8D3FE"><enum>(1)</enum><header>Registration</header><text>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, <quote>direct access</quote> 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.</text> </paragraph><paragraph id="H067D803E051E4BA0B026FFAF89043C16"><enum>(2)</enum><header>Linked contracts</header><text>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—</text> <subparagraph id="H54A1F3445A8440528175CD5CFDAF7111"><enum>(A)</enum><text>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</text> </subparagraph><subparagraph id="H3694B78457F94C169D7E0B49486F26C2"><enum>(B)</enum><text>the foreign board of trade (or the foreign futures authority that oversees the foreign board of trade)—</text> <clause id="H3DA1B6DEA16B4BED98F9EC1D0B59A189"><enum>(i)</enum><text>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;</text> </clause><clause id="H4911064494274E6189A77799584F7039"><enum>(ii)</enum><text>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;</text> </clause><clause id="H97EC78CA962F44CC8A8DDE16682B2492"><enum>(iii)</enum><text>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—</text> <subclause id="HF4002295C08E451DB567B664E04298C6"><enum>(I)</enum><text>the information that the foreign board of trade will make publicly available;</text> </subclause><subclause id="H3DEAB75F27D34293AB917B626BB57FE0"><enum>(II)</enum><text>the position limits that the foreign board of trade or foreign futures authority will adopt and enforce;</text> </subclause><subclause id="H4A5FB8F9749C4E50BBCEC82C45D1CAB5"><enum>(III)</enum><text>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</text> </subclause><subclause id="H48C9A3B39E10494BBD8F7A81A4EA70DE"><enum>(IV)</enum><text>any other area of interest expressed by the Commission to the foreign board of trade or foreign futures authority;</text> </subclause></clause><clause id="HC2CF9057EFB74F3E8E3E76C7BFF4CF88"><enum>(iv)</enum><text>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</text> </clause><clause id="H0B2185F4C57D4722B53D513F1A3B104B"><enum>(v)</enum><text>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.</text> </clause></subparagraph></paragraph><paragraph id="H7334BDECE4DC4F4484D7818FFF22CF9C"><enum>(3)</enum><header>Existing foreign boards of trade</header><text>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.</text> </paragraph><paragraph id="H5F1A94E4E192445680BC0AF141FAA070"><enum>(4)</enum><header>Persons located in the United States</header> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection id="H49D0C12F52D945228E922200FE0D14EE"><enum>(c)</enum><header>Liability of registered persons trading on a foreign board of trade</header> <paragraph id="HFC3288CFC4604B94B8E30C6914232149"><enum>(1)</enum><text>Section 4(a) of the Commodity Exchange Act (7. U.S.C. 6(a)) is amended by inserting <quote>or by subsection (f)</quote> after <quote>Unless exempted by the Commission pursuant to subsection (c)</quote>; and</text> </paragraph><paragraph id="HC41B429DE9614C88A0CE5E32A21C3EB8"><enum>(2)</enum><text>Section 4 of the Commodity Exchange Act (7 U.S.C. 6) is further amended by adding at the end the following:</text> <quoted-block id="HF0A2D9E2804F48A6BEF8CE7F67415973" style="OLC"> <subsection id="H40B015A8DAAC4265B89DA2127E7CB68F"><enum>(f)</enum><text>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).</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection><subsection id="H22E2177C39284EA6BBEAB13244A620CA"><enum>(d)</enum><header>Contract enforcement for foreign futures contracts</header><text>Section 22(a) of the Commodity Exchange Act (7 U.S.C. 25(a)) is amended by adding at the end the following:</text> <quoted-block id="HA2E375A6E28D486E95E512AADD9FB158" style="OLC"> <paragraph id="H2B7F444506C14DE2A73FD19098F81985"><enum>(5)</enum><header>Contract enforcement for foreign futures contracts</header><text>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.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section><section id="H60AF4D22CF1F4859901CAE5EBAE64BA5"><enum>127.</enum><header>Legal certainty for swaps</header><text display-inline="no-display-inline">Section 22(a)(4) of the Commodity Exchange Act (7 U.S.C. 25(a)(4)) is amended to read as follows:</text> <quoted-block id="HD96DBA04EECB48B894350FCA5ED4DD3A" style="OLC"> <paragraph id="HFF42A247DACF48E0B7B493A8E41C67E3"><enum>(4)</enum><header>Contract enforcement between eligible counterparties</header> <subparagraph id="H81C09B16199744B7A1C13B79398E5258"><enum>(A)</enum><text>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.</text> </subparagraph><subparagraph id="H2FA2B5DEF11A4A5998A1BD18C904E0F0"><enum>(B)</enum><text>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).</text> </subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </section><section id="H31DB3E60D52A4EDCAEE3F29F7B73CAFD"><enum>128.</enum><header>Multilateral clearing organizations</header> <subsection id="H96B3A4E2ABBE47768BF610197F1D6CC5"><enum>(a)</enum><text>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 <quote>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</quote> and inserting <quote>section 2(c) or 2(f) of such Act</quote>.</text> </subsection><subsection id="H7EA570ADF663491F982B8483B454852A"><enum>(b)</enum><text>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:</text> <quoted-block id="H07191D5D1957452E8DBC131BD8FD3B71" style="OLC"> <paragraph id="H396B486A507B4EC18BABA802F011F5D8"><enum>(4)</enum><text>The term <term>over-the-counter derivative instrument</term> 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)).</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section><section id="H540F05DA1860499D979E1C569843CBF4"><enum>129.</enum><header>Primary enforcement authority</header><text display-inline="no-display-inline">The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by adding the following new section after section 4b:</text> <quoted-block id="HCC61CD1BB92D48A5B9E0C83BE020CC77" style="OLC"> <section id="H3F342A393213472CB7BC35336DB6ED65"><enum>4b–1.</enum><header>Primary enforcement authority</header> <subsection id="H6A4F07DB9C7A4C0CBB0B11DC995767A7"><enum>(a)</enum><header>CFTC</header><text display-inline="yes-display-inline">Except as provided in subsections (b), (c), and (d), the Commission shall have primary authority to enforce the provisions of Subtitle A of the <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title> with respect to any person.</text> </subsection><subsection id="HAF4A9ACC60164A25BC9E650D247AEBFA"><enum>(b)</enum><header>Prudential regulators</header><text>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.</text> </subsection><subsection id="H8E3987C41E6D4389B30A0E68B3D9ABA2"><enum>(c)</enum><header>Referral</header><text>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.</text> </subsection><subsection id="H0576FE81C8224C2BA1FFCB62E5DA2B17"><enum>(d)</enum><header>Backstop enforcement authority</header><text>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.</text> </subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </section><section id="HA4D5761BC6ED419785264C94FB4D1667"><enum>130.</enum><header>Enforcement</header> <subsection id="H2D1F3D89F2D44478BAC77929796C3DE9"><enum>(a)</enum><text>Section 4b(a)(2) of the Commodity Exchange Act (7 U.S.C. 6b(a)(2)) is amended by striking <quote>or other agreement, contract, or transaction subject to paragraphs (1) and (2) of section 5a(g),</quote> and inserting <quote>or swap,</quote>.</text> </subsection><subsection id="HADF2D87AF3E94DF6A3526F7DFF58D806"><enum>(b)</enum><text>Section 4b(b) of the Commodity Exchange Act (7 U.S.C. 6b(b)) is amended by striking <quote>or other agreement, contract or transaction subject to paragraphs (1) and (2) of section 5a(g),</quote> and inserting <quote>or swap,</quote>.</text> </subsection><subsection id="HF8A495AC11074546814936BC7928527F"><enum>(c)</enum><text>Section 4c(a) of the Commodity Exchange Act (7 U.S.C. 6c(a)) is amended by inserting <quote>or swap</quote> before <quote>if the transaction is used or may be used</quote>.</text> </subsection><subsection id="H20E58449FAF847258DB560C79A32BDF1"><enum>(d)</enum><text>Section 9(a)(2) of the Commodity Exchange Act (7 U.S.C. 13(a)(2)) is amended by inserting <quote>or of any swap,</quote> before <quote>or to corner</quote>.</text> </subsection><subsection id="HC7F8ACD49A624DECAD54569BB26566F1"><enum>(e)</enum><text>Section 9(a)(4) of the Commodity Exchange Act (7 U.S.C. 13(a)(4)) is amended by inserting <quote>swap repository,</quote> before <quote>or futures association</quote>.</text> </subsection><subsection id="H6995B0983E4D4FB29A25E8F6A3295549"><enum>(f)</enum><text>Section 9(e)(1) of the Commodity Exchange Act (7 U.S.C. 13(e)(1)) is amended by inserting <quote>swap repository,</quote> before <quote>or registered futures association</quote> and by inserting <quote>, or swaps,</quote> before <quote>on the basis</quote>.</text> </subsection><subsection id="H4B7293D5ECF14819ADABE7985654DE60"><enum>(g)</enum><text>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):</text> <quoted-block id="HC2004528C1C6492B85B950221C1D4C9D" style="OLC"> <paragraph id="H82D8D5CD28BF4527BAA4E744DE7F093A"><enum>(6)</enum><text>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 <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title>.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section><section id="H226FB512C34049D68C496A9F5BACB900"><enum>131.</enum><header>Retail commodity transactions</header><text display-inline="no-display-inline">Section 2(c) of the Commodity Exchange Act (7 U.S.C. 2(c)) is amended—</text> <paragraph id="HE6B32B8576F546F2A2BCE376DDF8589C"><enum>(1)</enum><text>in paragraph (1), by striking <quote>(to the extent provided in section 5a(g), 5b, 5d, or 12(e)(2)(B))</quote> and inserting <quote>5b, or 12(e)(2)(B))</quote>;</text> </paragraph><paragraph id="H5AF4837297B64FE4BCFE8185BF329358"><enum>(2)</enum><text>in paragraph (2), by inserting after subparagraph (C) the following:</text> <quoted-block id="HCEA8F942F3B34675B2960AFA7136F14A" style="OLC"> <subparagraph id="HAD40E28F3B2A46ABA5DB7EF5D1A26BDD"><enum>(D)</enum><header>Retail commodity transactions</header> <clause id="H0D728BC38580414EA6EF845407C5D0EA"><enum>(i)</enum><text>This subparagraph shall apply to any agreement, contract, or transaction in any commodity that is—</text> <subclause id="H777632088BBC4B8B8CC4F4F8FCFC760C"><enum>(I)</enum><text>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</text> </subclause><subclause id="HEA02542B3D0E4D35A306800C52FF84FB"><enum>(II)</enum><text>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.</text> </subclause></clause><clause id="H6770F3EF7CF64E33A85BDF84D3461F56"><enum>(ii)</enum><text>Clause (i) shall not apply to—</text> <subclause id="HE56B09EC40964A659DD229A4A943A5F9"><enum>(I)</enum><text>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);</text> </subclause><subclause id="HB759F884A96348829D10B8D2A09B5A52"><enum>(II)</enum><text>any security;</text> </subclause><subclause id="H2F21BCA027FE45239DFEDD8A90A4B2E4"><enum>(III)</enum><text>a contract of sale that—</text> <item id="HC030ABBAEA0B4E8DA2A18EE6F67D5578"><enum>(aa)</enum><text>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</text> </item><item id="H78CD9E519D2E405B87DCBE0939A30E00"><enum>(bb)</enum><text>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;</text> </item></subclause><subclause id="HDCAA11AC3E4C40C1ADDBE3D08D0C7AA4"><enum>(IV)</enum><text>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</text> </subclause><subclause id="H4A1BBB4C4B7B416E98513015B12DEADB"><enum>(V)</enum><text>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)).</text> </subclause></clause><clause id="HA8C52B4F0DBB47DEA2F590AFE338FFE4"><enum>(iii)</enum><text>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.</text> </clause><clause id="H367B0563230243109DDA87B33AB6EEF8"><enum>(iv)</enum><text>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.</text> </clause><clause id="H7F4E15A07450452E98A3E1712EABEA13"><enum>(v)</enum><text>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.</text> </clause><clause id="H739F35B80AFF4AC894D061F9BE1EE7E4"><enum>(vi)</enum><text>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.</text> </clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></section><section id="H44505316B8D7473DBE7A127FB5136752"><enum>132.</enum><header>Large swap trader reporting</header><text display-inline="no-display-inline">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:</text> <quoted-block display-inline="no-display-inline" id="HFE437448429742A9AD6FC0EDD68330F9" style="OLC"> <section id="H9B5CD9093D7541CE84F62E1589589E56"><enum>4u.</enum><header>Large swap trader reporting</header> <subsection id="HBCD54E9D84004A71A12FD32475F6916E"><enum>(a)</enum><text>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—</text> <paragraph id="H390222B79AFC42EEB8B6F48C0B2C91DC"><enum>(1)</enum><text>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</text> </paragraph><paragraph id="HB5D3C4091BBE437A80970EF538A71AAB"><enum>(2)</enum><text>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,</text> </paragraph><continuation-text continuation-text-level="subsection">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.</continuation-text></subsection><subsection id="H70A6C5743993489B877F6F54A4B08A4E"><enum>(b)</enum><text>Such books and records shall show complete details concerning all transactions and positions as the Commission may by rule or regulation prescribe.</text> </subsection><subsection id="H714E8C327426446CAC55AF14AE8D154D"><enum>(c)</enum><text>Such books and records shall be open at all times to inspection and examination by any representative of the Commission.</text> </subsection><subsection id="H79A0C261DBFF4B2EB5C2D1638A9704EB"><enum>(d)</enum><text>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.</text> </subsection><subsection id="H9DE374BE088745BCBCC46D4C7EFED200"><enum>(e)</enum><text>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).</text> </subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </section><section id="HFD1A82BE775F44A78FEE395E49D15048"><enum>133.</enum><header>Authority to ban abusive swaps</header><text display-inline="no-display-inline">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.</text> </section><section id="H1D245B30B9084C29ABB9F570BF151FB8"><enum>134.</enum><header>International harmonization</header><text display-inline="no-display-inline">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.</text> </section><section id="H4309A9A0966043C2A44DD2B6630A8C86"><enum>135.</enum><header>Authority to ban access to the united states financial system</header><text display-inline="no-display-inline">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.</text> </section><section id="HCBB0026EB2434419B9777D1E03954800"><enum>136.</enum><header>Other authority</header><text display-inline="no-display-inline">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.</text> </section><section id="H64DA03F6113E4E6DADFAE43A0F8BEA74"><enum>137.</enum><header>Antitrust</header><text display-inline="no-display-inline">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 <term>antitrust laws</term> 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.</text> </section><section id="H3E11079E446A4F05AE14E7D38D0AC752"><enum>138.</enum><header>Effective date</header><text display-inline="no-display-inline">This subtitle is effective 180 days after the date of enactment.</text> </section></subtitle><subtitle id="H6780A12DCA9744A6A9C2CC4F8FB9E314"><enum>B</enum><header>Regulation of Security-Based Swap Markets</header> <section id="HA4F2DD92CB594F1F9B4D93416309FDE5"><enum>151.</enum><header>Definitions under the Securities Exchange Act of 1934</header><text display-inline="no-display-inline">Section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)) is amended—</text> <paragraph id="HDB7CE80801C74911BA9515928C780AAC"><enum>(1)</enum><text>in paragraph (5)(A) and (B), by inserting <quote>(but not security-based swaps, other than security-based swaps with or for persons that are not eligible contract participants)</quote> after the word <quote>securities</quote> in each place it appears;</text> </paragraph><paragraph id="HCF4F71CDB76F42B38D88BC1FC5ECD689"><enum>(2)</enum><text>in paragraph (13), by adding at the end the following: <quote>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.</quote>;</text> </paragraph><paragraph id="HDEAF178CA4A54F3F85432B520A4C743A"><enum>(3)</enum><text>in paragraph (14), by adding at the end the following: <quote>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.</quote>;</text> </paragraph><paragraph id="HB66E7D23D8674A4CA12A209CCF3A4518"><enum>(4)</enum><text>in paragraph (39)—</text> <subparagraph id="H41B9F9DEA254449F839E78DD3B58F812"><enum>(A)</enum><text>by striking <quote>or government securities dealer</quote> and adding <quote>government securities dealer, security-based swap dealer or major security-based swap participant</quote> in its place in subparagraph (B)(i)(I);</text> </subparagraph><subparagraph id="H2D0032DC29E0489FA6005D0E84C8918C"><enum>(B)</enum><text>by adding <quote>security-based swap dealer, major security-based swap participant,</quote> after <quote>government securities dealer,</quote> in subparagraph (B)(i)(II);</text> </subparagraph><subparagraph id="HE90C24AB14644445B65B2DCAE4A3FB59"><enum>(C)</enum><text>by striking <quote>or government securities dealer</quote> and adding <quote>government securities dealer, security-based swap dealer or major security-based swap participant</quote> in its place in subparagraph (C); and</text> </subparagraph><subparagraph id="H5416E7598FB64834A6FBE9176A2E4F14"><enum>(D)</enum><text>by adding <quote>security-based swap dealer, major security-based swap participant,</quote> after <quote>government securities dealer,</quote> in subparagraph (D); and</text> </subparagraph></paragraph><paragraph id="H07C1264646D447AFB4D7790F49EE337E"><enum>(5)</enum><text>by adding at the end the following:</text> <quoted-block id="HA4DA054F9A6441A3A0D66AB506A00311" style="OLC"> <paragraph id="H824F4081BCAD417EB7E529F7124C3C84"><enum>(65)</enum><header>Eligible contract participant</header><text>The term <term>eligible contract participant</term> has the same meaning as in section 1a(13) of the Commodity Exchange Act (7 U.S.C. 1a(13)).</text> </paragraph><paragraph id="HC437CBC9A7D24A148FB799916D507A79"><enum>(66)</enum><header>Major swap participant</header><text>The term <term>major swap participant</term> has the same meaning as in section 1a(40) of the Commodity Exchange Act (7 U.S.C. 1a(40)).</text> </paragraph><paragraph id="HDE26A2ED7BCE42A5A82AABA517860E0B"><enum>(67)</enum><header>Major security-based swap participant</header><text>The term <term>major security-based swap participant</term> has the same meaning as in section 1a(41) of the Commodity Exchange Act (7 U.S.C. 1a(41)).</text> </paragraph><paragraph id="H035AE2BF928B497E8B11A17AB76301C4"><enum>(68)</enum><header>Security-based swap</header><text>The term <term>security-based swap</term> has the same meaning as in section 1a(38) of the Commodity Exchange Act (7 U.S.C. 1a(38)).</text> </paragraph><paragraph id="H5E137EC2D71942C28B29420A0B819E8C"><enum>(69)</enum><header>Swap</header><text>The term <term>swap</term> has the same meaning as in section 1a(35) of the Commodity Exchange Act (7 U.S.C. 1a(35)).</text> </paragraph><paragraph id="HDEA10B9E5A8A41C5A82B8D8171E4518A"><enum>(70)</enum><header>Person associated with a security-based swap dealer or major security-based swap participant</header><text>The term <term>person associated with a security-based swap dealer or major security-based swap participant</term> or <term>associated person of a security-based swap dealer or major security-based swap participant</term> has the same meaning as in section 1a(48) of the Commodity Exchange Act (7 U.S.C. 1a(48)).</text> </paragraph><paragraph id="HB7BEA8BCE2884115887AA753D136C956"><enum>(71)</enum><header>Security-based swap dealer</header><text>The term <term>security-based swap dealer</term> has the same meaning as in section 1a(44) of the Commodity Exchange Act (7 U.S.C. 1a(44)).</text> </paragraph><paragraph id="H274371A4BE3F43AAA02A9B80DF3A0571"><enum>(72)</enum><header>Appropriate federal banking agency</header><text>The term <term>appropriate Federal banking agency</term> has the same meaning as in section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)).</text> </paragraph><paragraph id="HE1C475BC8943409BBE3D86A775C21623"><enum>(73)</enum><header>Board</header><text>The term <term>Board</term> means the Board of Governors of the Federal Reserve System.</text> </paragraph><paragraph id="H5A1C260900964EEDBF99340CD4F1BC39"><enum>(74)</enum><header>Prudential regulator</header><text>The term <term>Prudential Regulator</term> has the same meaning as in section 1a(43) of the Commodity Exchange Act (7 U.S.C. 1a(43)).</text> </paragraph><paragraph id="H2142119F1FAB41C597CBB99BF72198D8"><enum>(75)</enum><header>Swap dealer</header><text>The term <term>swap dealer</term> has the same meaning as in section 1a(39) of the Commodity Exchange Act (7 U.S.C. 1a(39)).</text> </paragraph><paragraph id="HBF669913C3A04CF7BE157E6024B045A8"><enum>(76)</enum><header>Security-based swap agreement</header> <subparagraph id="HFF790B914640435DB1CF805A14DA68CB"><enum>(A)</enum><header>In general</header><text>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 <term>security-based swap agreement</term> 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.</text> </subparagraph><subparagraph id="H95463E6070BB4B5D87378FBDA99AF495"><enum>(B)</enum><header>Exclusions</header><text>The term <term>security-based swap agreement</term> does not include any security-based swap.</text> </subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></section><section id="H0D7A472A07C54664A2E8BF8F6B417DC1"><enum>152.</enum><header>Repeal of prohibition on regulation of security-based swaps</header> <subsection id="HD07D6F138DC943708C77E236B0573A91"><enum>(a)</enum><header>Repeal of law</header><text>Section 206B of the Gramm-Leach-Bliley Act (15 U.S.C. 78c note) is repealed.</text> </subsection><subsection id="H98AF72070F4448CF824DC18FBDB05C41"><enum>(b)</enum><header>Conforming Amendments to the Securities Act of 1933</header> <paragraph id="HCB8A920BD8A0488EA9F58D86735429DD"><enum>(1)</enum><text>Section 2A(b) is amended by striking <quote>(as defined in section 206B of the Gramm-Leach-Bliley Act)</quote> each place that such term appears.</text> </paragraph><paragraph id="H2D0E2D43D6554A6AA8001FC5C8ECD447"><enum>(2)</enum><text>Section 17 of the Securities Act of 1933 (15 U.S.C. 77q) is amended—</text> <subparagraph id="H929F3BF0CE494AB1A5046DE3C1CF16C4"><enum>(A)</enum><text>in subsection (a)—</text> <clause id="H3001C930926840B5AD2842F11312C80A"><enum>(i)</enum><text>by inserting <quote>(including security-based swaps)</quote> after <quote>securities</quote>; and</text> </clause><clause id="HBFCFF8C854F6470C985193350DCF3844"><enum>(ii)</enum><text>by striking <quote>206B of the Gramm-Leach-Bliley Act</quote> and inserting <quote>3(a)(76) of the Securities Exchange Act of 1934</quote>; and</text> </clause></subparagraph><subparagraph id="HC9118A0DB5B740CB992CD7833677857E"><enum>(B)</enum><text>in subsection (d), by striking <quote>206B of the Gramm-Leach-Bliley Act</quote> and inserting <quote>3(a)(76) of the Securities Exchange Act of 1934</quote>.</text> </subparagraph></paragraph></subsection><subsection id="H5884C27C5ABC4B629284B9D5D6B97077"><enum>(c)</enum><header>Conforming amendments to the securities exchange act of 1934</header><text>The Securities Exchange Act of 1934 (15 U.S.C. 78a, et seq.) is amended as follows:</text> <paragraph id="H1023ED6C126D43A180F3AE3C31BDAB81"><enum>(1)</enum><text>Section 3A (15 U.S.C. 78c–1) is amended by striking <quote>(as defined in section 206B of the Gramm-Leach-Bliley Act)</quote> each place that the term appears.</text> </paragraph><paragraph id="H7610456FCF384E57BB63B8314BD888D1"><enum>(2)</enum><text>Section 9(a) (15 U.S.C. 78i(a)) is amended by striking paragraphs (2) through (5) and inserting:</text> <quoted-block id="H8C5CB67478CB4F75AA93A81D2A617919" style="OLC"> <paragraph id="HB73E834F74B94425A4097FED21A53457"><enum>(2)</enum><text>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.</text> </paragraph><paragraph id="H829DD45E52794529B716688F3DD340F8"><enum>(3)</enum><text>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.</text> </paragraph><paragraph id="H80ECDB517BD343FCB6F226305E3DE002"><enum>(4)</enum><text>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.</text> </paragraph><paragraph id="H591DBB9952D04AF9ACAFEF12C8DFB0AD"><enum>(5)</enum><text>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.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph><paragraph id="H49DDBBFDDC7B4E7EB49CE21D990BB5F3"><enum>(3)</enum><text>Section 10 (15 U.S.C. 78j) is amended by striking <quote>(as defined in section 206B of the Gramm-Leach-Bliley Act)</quote> each place that the term appears.</text> </paragraph><paragraph id="H3FADDD82882541BCB750D3AEC49B6A73"><enum>(4)</enum><text>Section 15(c)(1) is amended—</text> <subparagraph id="HACFFD5B86E2C453390491C7E7D7E7B4F"><enum>(A)</enum><text>in subparagraph (A, by striking <quote>, or any security-based swap agreement (as defined in section 206B of the Gramm-Leach-Bliley Act),</quote>; and</text> </subparagraph><subparagraph id="H4E4921FF96D948798178D7906DC3A08A"><enum>(B)</enum><text>in subparagraphs (B) and (C), by striking <quote>agreement (as defined in section 206B of the Gramm-Leach-Bliley Act)</quote> in each place that the term appears.</text> </subparagraph></paragraph><paragraph id="H739AD9D6796F45738D2E534FE54DF01B"><enum>(5)</enum><text>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 <quote>(as defined in section 206B of the Gramm-Leach-Bliley Act)</quote>.</text> </paragraph><paragraph id="HF9C950492EE6444DA9ADBE060D60E0CF"><enum>(6)</enum><text>Section 16 (15 U.S.C. 78p) is amended—</text> <subparagraph id="HB3641DDEF68F4400A6DC0B8972467B8B"><enum>(A)</enum><text>in subsection (a)(2)(C), by striking <quote>(as defined in section 206(b) of the Gramm-Leach-Bliley Act)</quote>;</text> </subparagraph><subparagraph id="H3422CC67B9B64011BC837D6D9B99056A"><enum>(B)</enum><text>in subsection (b), by striking <quote>(as defined in section 206B of the Gramm-Leach-Bliley Act)</quote> in each place that the term appears; and</text> </subparagraph><subparagraph id="HCE1EF8AE7EBC42E18BD6F769892B3FFB"><enum>(C)</enum><text>in subsection (g), by striking <quote>(as defined in section 206B of the Gramm-Leach-Bliley Act)</quote>;</text> </subparagraph></paragraph><paragraph id="HF830CC82236C44BF8F4791FE63DCE825"><enum>(7)</enum><text>Section 20 (15 U.S.C. 78t) is amended—</text> <subparagraph id="H1DA838846F8A4CD7AC646E98AB424603"><enum>(A)</enum><text>in subsection (d), by striking <quote>(as defined in section 206B of the Gramm-Leach-Bliley Act)</quote>; and</text> </subparagraph><subparagraph id="H42B79AD0779F4DEBB587FC67BB6A4BC3"><enum>(B)</enum><text>in subsection (f), by striking <quote>(as defined in section 206B of the Gramm-Leach-Bliley Act)</quote>; and</text> </subparagraph></paragraph><paragraph id="H3BF0DF9BB6EB4D3DB3E22113FC27FC62"><enum>(8)</enum><text>Section 21A (15 U.S.C. 78u–1) is amended—</text> <subparagraph id="H40308D87215B410E93722D26F4C0448C"><enum>(A)</enum><text>in subsection (a)(1), by striking <quote>(as defined in section 206B of the Gramm-Leach-Bliley Act)</quote>; and</text> </subparagraph><subparagraph id="H2E319EBF129F45FAB212AAC5D40CF3EE"><enum>(B)</enum><text>in subsection (g), by striking <quote>(as defined in section 206B of the Gramm-Leach-Bliley Act)</quote>.</text> </subparagraph></paragraph></subsection></section><section id="HF74CCF1E575545DF8C9D904E0BFE44AF"><enum>153.</enum><header>Amendments to the Securities Exchange Act of 1934</header> <subsection id="H6A9DBF7AAAFE418DBEBE435AC02CA8E1"><enum>(a)</enum><header>Clearing for security-based swaps</header><text>The Securities Exchange Act of 1934 (15 U.S.C. 78a, et seq.) is amended by adding the following section after section 3A:</text> <quoted-block display-inline="no-display-inline" id="H459DFD66259146CAAB56E0E478330606" style="OLC"> <section id="HE34C25F835FA4BBB8B09E6205C0AA116"><enum>3B.</enum><header>Clearing of security-based swaps</header> <subsection id="H29FCF4AD5E7742D3A6C4B6653E18CA3C"><enum>(a)</enum><header>Clearing requirement</header> <paragraph commented="no" id="H7739299933E643B18E3F75B589D710D2"><enum>(1)</enum><header>Clearing of security-based swaps</header> <subparagraph commented="no" id="H870E82229C4E42A8BA5CB977703872E7"><enum>(A)</enum><header>Clearing requirement</header><text display-inline="yes-display-inline">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—</text> <clause commented="no" id="H6723DCF93066442C82AD0501B8E29D7B"><enum>(i)</enum><text>the existence of significant outstanding notional exposures, trading liquidity and adequate pricing data;</text> </clause><clause commented="no" id="HA4C0994ADDA8482193515216ED8DFD85"><enum>(ii)</enum><text>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;</text> </clause><clause commented="no" id="H525579D2122A40D2B38423CA5EA39D09"><enum>(iii)</enum><text>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;</text> </clause><clause commented="no" id="HC04E1DCEC56F446D85739C6DCE8A8428"><enum>(iv)</enum><text>the impact on competition; and</text> </clause><clause commented="no" id="H94D8921FA5204452A69C6D4270D2524E"><enum>(v)</enum><text>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.</text> </clause></subparagraph><subparagraph commented="no" id="HEEAD6AD6EF8E4D4CB3D7A1FD1449085B"><enum>(B)</enum><header>Scope of clearing functions</header><text>The Commission shall by rule or regulation define the scope of the clearing functions that are necessary to satisfy the requirements of subparagraph (A).</text> </subparagraph></paragraph><paragraph id="HBCC5F6E428054710832D2EF82D718912"><enum>(2)</enum><header>Prevention of evasion</header><text>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.</text> </paragraph><paragraph id="H807D52EE1C3D4A94BBC8009794EBBB57"><enum>(3)</enum><header>Required reporting</header> <subparagraph commented="no" id="HBE3AE4D9097B41DF93EB3AD7A317605C"><enum>(A)</enum><header>In general</header><text>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.</text> </subparagraph><subparagraph commented="no" id="HC5F2458F25394495BA2D3173874661C3"><enum>(B)</enum><header>Authority of swap dealer to report</header><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph><paragraph id="HDB5CEE0B64E24016B6997F566AA76EC3"><enum>(4)</enum><header>Transition rules</header><text>Rules adopted by the Commission under this section shall provide for the reporting of data, as follows:</text> <subparagraph id="HAFCBA622ADC0484D9A547AEFBABDCCC8"><enum>(A)</enum><text>Security-based swaps that were entered into before the date of enactment of the <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title> 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.</text> </subparagraph><subparagraph id="HF94CEE8541824BB2806484CFCDC181C9"><enum>(B)</enum><text>Security-based swaps that were entered into on or after the date of enactment of the <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title> shall be reported to a registered security-based swap repository or the Commission no later than the later of—</text> <clause id="H98ABFC54ECAE4DE1B3C3145FDA8C0141"><enum>(i)</enum><text>90 days after the effective date of such Act; or</text> </clause><clause id="H0DF027A8D1834B80A744EB39286F7012"><enum>(ii)</enum><text>such other time after entering into the swap as the Commission may prescribe by rule or regulation.</text> </clause></subparagraph></paragraph></subsection><subsection id="H7D18AC8274EC4FBEBCF7E3B261985ED0"><enum>(b)</enum><header>Consultation</header><text>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.</text> </subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection commented="no" display-inline="no-display-inline" id="HA86BC4A4DF3D4653ACD3DB8F54C8BCBA"><enum>(b)</enum><header>Clearing agency requirements</header><text>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:</text> <quoted-block display-inline="no-display-inline" id="HEBF454768EAA498A904FC0FDB151D9CA" style="OLC"> <subsection commented="no" id="H94AFD28CE4954D7EBB4D1FB7387C4D35"><enum>(g)</enum><header>Registration requirement</header><text display-inline="yes-display-inline">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.</text> </subsection><subsection commented="no" id="HCFC5B1F72FF740FD81001832C42BF87E"><enum>(h)</enum><header>Voluntary registration</header> <paragraph commented="no" id="H4AC1978CC4AA4E94BC9F815A8972CB3B"><enum>(1)</enum><header>Clearing agencies</header><text>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.</text> </paragraph><paragraph commented="no" id="H22288CFF9AF94E088E212D951B14412F"><enum>(2)</enum><header>Derivatives clearing organizations</header><text>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.).</text> </paragraph></subsection><subsection commented="no" id="HE747301686954F659DBC878DD4C00A62"><enum>(i)</enum><header>Required registration for banks and clearing agencies</header><text>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.).</text> </subsection><subsection commented="no" display-inline="no-display-inline" id="H3AFF1EB3BA0D446AA0C5B9BF731C1AE5"><enum>(j)</enum><header>Reporting</header> <paragraph commented="no" id="H5B750E1931C444D59131495C631756D6"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph><paragraph commented="no" id="HEB727BAE1F2C4105A3C3C3012A9C4455"><enum>(2)</enum><header>Public information</header><text>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.</text> </paragraph></subsection><subsection commented="no" id="HC605454F89BF4A809DBD2FBEE461D587"><enum>(k)</enum><header>Designation of compliance officer</header> <paragraph commented="no" id="H0E2207D457764F66AD80B84F124D32A3"><enum>(1)</enum><header>In general</header><text>Each clearing agency that clears security-based swaps shall designate an individual to serve as a compliance officer.</text> </paragraph><paragraph commented="no" id="H935FA1CAD1AF4A6EB42B4C5C2B46417F"><enum>(2)</enum><header>Duties</header><text>The compliance officer shall—</text> <subparagraph commented="no" id="H9ADB715DB33D4BF89ECAEE4F02F2DD27"><enum>(A)</enum><text>report directly to the board or to the senior officer of the clearing agency;</text> </subparagraph><subparagraph commented="no" id="H1A47597506D7437FBF2CAABE88EBA921"><enum>(B)</enum><text>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;</text> </subparagraph><subparagraph commented="no" id="HE73995BF1E3148B59DBA65899E13518E"><enum>(C)</enum><text>be responsible for administering the policies and procedures required to be established pursuant to this section;</text> </subparagraph><subparagraph commented="no" id="HD411E082C814454C9AE0A3A74D0CC881"><enum>(D)</enum><text>ensure compliance with securities laws and the rules and regulations issued thereunder, including rules prescribed by the Commission pursuant to this section; and</text> </subparagraph><subparagraph commented="no" id="HF3B244E2899D42BC89760C76EEB1EB40"><enum>(E)</enum><text>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.</text> </subparagraph></paragraph><paragraph commented="no" id="HB75F92F8D33B42968BE64C81E3029998"><enum>(3)</enum><header>Annual reports required</header><text>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.</text> </paragraph></subsection><subsection commented="no" id="HE94A202AA67B4DFBAEADF7761E60AB39"><enum>(l)</enum><header>Core principles for clearing agencies</header> <paragraph commented="no" id="H0BE9B0C7ACD145FFBE4BB706522B3C15"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph><paragraph commented="no" id="H0629C6B2E19748E89B115C2B652EA10E"><enum>(2)</enum><header>Financial resources</header> <subparagraph commented="no" id="H0353E3EA58A64C9EA1D1794BA6FD2D6C"><enum>(A)</enum><text>The clearing agency shall have adequate financial, operational, and managerial resources to discharge its responsibilities.</text> </subparagraph><subparagraph commented="no" id="H904554A3E6664E60903E4E701B44AF6D"><enum>(B)</enum><text>Financial resources shall at a minimum exceed the total amount that would—</text> <clause commented="no" id="H1ED26C346C8F4C06A312D78458DC09B0"><enum>(i)</enum><text>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</text> </clause><clause commented="no" id="HD708901E690C44AE96CDDB1A824BD91B"><enum>(ii)</enum><text>enable the clearing agency to cover its operating costs for a period of one year, calculated on a rolling basis.</text> </clause></subparagraph></paragraph><paragraph commented="no" id="HD0B69298AB9C4C5B87EFE3D2D6836B6A"><enum>(3)</enum><header>Participant and product eligibility</header> <subparagraph commented="no" id="HE1F2A1451770420B907A3C59943C361B"><enum>(A)</enum><text>The clearing agency shall establish—</text> <clause commented="no" id="HB8179F34C58440E2B7EB9F0816CF5285"><enum>(i)</enum><text>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</text> </clause><clause commented="no" id="HBD4B9425BCC9448BB5151474AF50214E"><enum>(ii)</enum><text>appropriate standards for determining eligibility of agreements, contracts, or transactions submitted to the clearing agency for clearing.</text> </clause></subparagraph><subparagraph commented="no" id="HAA1A9EBF874149E0B39371AEBBA98D9E"><enum>(B)</enum><text>The clearing agency shall have procedures in place to verify that participation and membership requirements are met on an ongoing basis.</text> </subparagraph><subparagraph commented="no" id="H76E93D4F89C64E3DB154FB0028E72FFD"><enum>(C)</enum><text>The clearing agency’s participation and membership requirements shall be objective, publicly disclosed, and permit fair and open access.</text> </subparagraph><subparagraph commented="no" id="H793674ED92EF47FBB07FC298CEAA2BDE"><enum>(D)</enum><text>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.</text> </subparagraph></paragraph><paragraph commented="no" id="HDE48F454FD26499AAA76E9FEA840B16F"><enum>(4)</enum><header>Risk management</header> <subparagraph commented="no" id="HBCEFC8E7A1064D53B234A757058C4572"><enum>(A)</enum><text>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.</text> </subparagraph><subparagraph commented="no" id="H91F7016E908F4ABF961F344F50B11017"><enum>(B)</enum><text>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.</text> </subparagraph><subparagraph commented="no" id="H711EC1964D7545C9AA7140F6CE59BA3E"><enum>(C)</enum><text>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.</text> </subparagraph><subparagraph commented="no" id="H276658D633B147D08AD116DD00887D81"><enum>(D)</enum><text>Margin required from all members and participants shall be sufficient to cover potential exposures in normal market conditions.</text> </subparagraph><subparagraph commented="no" id="HFC30013316934996A4A21CD579000F65"><enum>(E)</enum><text>The models and parameters used in setting margin requirements shall be risk-based and reviewed regularly.</text> </subparagraph></paragraph><paragraph commented="no" id="H932C0A2F62B443198ED87A3F7EDB686D"><enum>(5)</enum><header>Settlement procedures</header><text>The clearing agency shall—</text> <subparagraph commented="no" id="HD5474326E004485EB2BE98E6EE489186"><enum>(A)</enum><text>complete money settlements on a timely basis, and not less than once each business day;</text> </subparagraph><subparagraph commented="no" id="H764728EA8CF542E387B270E119ECE33D"><enum>(B)</enum><text>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;</text> </subparagraph><subparagraph commented="no" id="H05C85D0063164AA6BC4F5CBF859103A0"><enum>(C)</enum><text>ensure money settlements are final when effected;</text> </subparagraph><subparagraph commented="no" id="H4BEDE9BF99A6414E965684F8B2247941"><enum>(D)</enum><text>maintain an accurate record of the flow of funds associated with each money settlement;</text> </subparagraph><subparagraph commented="no" id="H1279F46A2D56474791DED9255C709819"><enum>(E)</enum><text>have the ability to comply with the terms and conditions of any permitted netting or offset arrangements with other clearing organizations; and</text> </subparagraph><subparagraph commented="no" id="HF8A4352E828A4C30A105E7DD90D2665A"><enum>(F)</enum><text>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.</text> </subparagraph></paragraph><paragraph commented="no" id="HDAD1F05533154843A21AC80C498A7101"><enum>(6)</enum><header>Treatment of funds</header> <subparagraph commented="no" id="H2C972583137546FD991930A7BD564C5E"><enum>(A)</enum><text>The clearing agency shall have standards and procedures designed to protect and ensure the safety of member and participant funds and assets.</text> </subparagraph><subparagraph commented="no" id="HF556FEC993CA476D8D353DC266F784C5"><enum>(B)</enum><text>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.</text> </subparagraph><subparagraph commented="no" id="H5C9FD88012DC452AB68E2DE71ADAAFBA"><enum>(C)</enum><text>Assets and funds invested by the clearing agency shall be held in instruments with minimal credit, market, and liquidity risks.</text> </subparagraph></paragraph><paragraph commented="no" id="H7F8C943E59AE46129F1E3BD36E876C82"><enum>(7)</enum><header>Default rules and procedures</header> <subparagraph commented="no" id="H5F01C4D076584C0A918F41ADD291D26D"><enum>(A)</enum><text>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.</text> </subparagraph><subparagraph commented="no" id="H26557E57DFEB4012ACD4760F7FB32CD8"><enum>(B)</enum><text>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.</text> </subparagraph><subparagraph commented="no" id="HBA6C656555D3498CA397D8D07E23A2B0"><enum>(C)</enum><text>The default procedures shall be publicly available.</text> </subparagraph></paragraph><paragraph commented="no" id="H14F81539E89141D19DB14A84112B0190"><enum>(8)</enum><header>Rule enforcement</header><text>The clearing agency shall—</text> <subparagraph commented="no" id="H88A089424D7A4B5B84A267189E9DDBE2"><enum>(A)</enum><text>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</text> </subparagraph><subparagraph commented="no" id="HF8784EDD3A274258810914333AE12749"><enum>(B)</enum><text>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.</text> </subparagraph></paragraph><paragraph commented="no" id="HB88EB451C6B04EA196C16A3C8EBB2C07"><enum>(9)</enum><header>System safeguards</header><text>The clearing agency shall—</text> <subparagraph commented="no" id="H298949A3CA58448CB844F622418FD3F6"><enum>(A)</enum><text>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;</text> </subparagraph><subparagraph commented="no" id="H4088806F39254B1B9697D84AC6EEDB2A"><enum>(B)</enum><text>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</text> </subparagraph><subparagraph commented="no" id="H5BA6F5793A7A412D8EEC81533A6DE11A"><enum>(C)</enum><text>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.</text> </subparagraph></paragraph><paragraph commented="no" id="HFCDB3687AE0D4B2CBDE4E20104625E3B"><enum>(10)</enum><header>Reporting</header><text>The clearing agency shall provide to the Commission all information necessary for the Commission to conduct oversight of the clearing agency.</text> </paragraph><paragraph commented="no" id="HA6024587DD8B4195AD95456D6FD2CEF6"><enum>(11)</enum><header>Recordkeeping</header><text>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.</text> </paragraph><paragraph commented="no" id="H6A1285DF39F34DFE963CE9589CA7819C"><enum>(12)</enum><header>Public information</header> <subparagraph commented="no" id="HF9293EFC9FE744BCB8B51A6655C43899"><enum>(A)</enum><text>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.</text> </subparagraph><subparagraph commented="no" id="H65A2F119C04C4AFB8FB99B11DB488FC4"><enum>(B)</enum><text>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.</text> </subparagraph><subparagraph commented="no" id="H59A6AB37D0E641EE82F736E4FD156284"><enum>(C)</enum><text>The clearing agency shall disclose publicly and to the Commission information concerning—</text> <clause commented="no" id="HFC7DEF309CC14839A194B04A5234D834"><enum>(i)</enum><text>the terms and conditions of contracts, agreements, and transactions cleared and settled by the clearing agency;</text> </clause><clause commented="no" id="H754D0816AE744A218B011BF535445DC7"><enum>(ii)</enum><text>clearing and other fees that the clearing agency charges its members and participants;</text> </clause><clause commented="no" id="H9A7E5E87C7E242BE826E1457EE55D469"><enum>(iii)</enum><text>the margin-setting methodology and the size and composition of the financial resource package of the clearing agency;</text> </clause><clause commented="no" id="HD8BF8C22330C40C9914014BA37F85C6F"><enum>(iv)</enum><text>other information relevant to participation in the settlement and clearing activities of the clearing agency; and</text> </clause><clause commented="no" id="H2B80A0CD6DE3475A8494B0287E4E2073"><enum>(v)</enum><text>daily settlement prices, volume, and open interest for all contracts settled or cleared by it.</text> </clause></subparagraph></paragraph><paragraph commented="no" id="H5113FE5FE152468087D90D99B50FA421"><enum>(13)</enum><header>Information-sharing</header><text>The clearing agency shall—</text> <subparagraph commented="no" id="H83FF577423424EEBA666A8A186464060"><enum>(A)</enum><text>enter into and abide by the terms of all appropriate and applicable domestic and international information-sharing agreements; and</text> </subparagraph><subparagraph commented="no" id="HFA9775F829B8464E9F0416B256265655"><enum>(B)</enum><text>use relevant information obtained from the agreements in carrying out the clearing organization’s risk management program.</text> </subparagraph></paragraph><paragraph commented="no" id="H4EF0681616B54D13B9A1F6E02C7F1EBA"><enum>(14)</enum><header>Antitrust considerations</header><text>Unless appropriate to achieve the purposes of this chapter, the clearing agency shall avoid—</text> <subparagraph commented="no" id="H8E5327B7D7CE439B807ADB0C76C159D1"><enum>(A)</enum><text>adopting any rule or taking any action that results in any unreasonable restraint of trade; or</text> </subparagraph><subparagraph commented="no" id="H24105CD0C8AB4E1DA386736A4934CE9D"><enum>(B)</enum><text>imposing any material anticompetitive burden.</text> </subparagraph></paragraph><paragraph commented="no" id="HE278371D331C4D71AEFED8F4B5CF93C6"><enum>(15)</enum><header>Governance fitness standards</header> <subparagraph commented="no" id="H724442A75F394366A151E3AC25699631"><enum>(A)</enum><text>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.</text> </subparagraph><subparagraph commented="no" id="H36B93A93009A469AADAD94697BDC1089"><enum>(B)</enum><text>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.</text> </subparagraph></paragraph><paragraph commented="no" id="HABE5447563E44D94982FD1F24646170F"><enum>(16)</enum><header>Conflicts of interest</header><text>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.</text> </paragraph><paragraph commented="no" id="H38096DF6EF9D4D93A606EC32A0F109DD"><enum>(17)</enum><header>Composition of the boards</header><text>The clearing agency shall ensure that the composition of the governing board or committee includes market participants.</text> </paragraph><paragraph commented="no" id="HC7EEE6F34E8D47A1BC800C28C9CFE3D7"><enum>(18)</enum><header>Legal risk</header><text>The clearing agency shall have a well-founded, transparent, and enforceable legal framework for each aspect of its activities.</text> </paragraph></subsection><subsection commented="no" id="HF764A6E5A7E148CBA1D44193D25CDE8A"><enum>(m)</enum><header>Consultation</header><text>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.</text> </subsection><subsection commented="no" id="HE8DDC2D7AB85482A849ADE8157FA67C6"><enum>(n)</enum><header>Harmonization of rules</header><text>Not later than 180 days after the effective date of the <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title>, 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.).</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection id="HA9E5B99AF03C4FCC97BB79CBE1C4106F"><enum>(c)</enum><header>Execution of security-based swaps</header><text display-inline="yes-display-inline">The Securities Exchange Act of 1934 (15 U.S.C. 78a, et seq.) is amended by inserting after section 5 the following:</text> <quoted-block display-inline="no-display-inline" id="H5661A62434F040BE9C820F2C30422646" style="OLC"> <section id="H89740ACCDEB54C39ABCC56439D26DEC3"><enum>5A.</enum><header>Execution of security-based swaps</header> <subsection id="H9A691CBA8534447A99E8D7B765611B65"><enum>(a)</enum><header>Trade execution</header><text display-inline="yes-display-inline">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:</text> <paragraph id="H3826CC9AAC614A8BBF7B8F846D920DF1"><enum>(1)</enum><text>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);</text> </paragraph><paragraph id="H013B9E7FDA0B47EEB3D908A78AB3CDEC"><enum>(2)</enum><text>execute the transaction on a swap execution facility registered with the Commission;</text> </paragraph><paragraph id="HF5E65F2D472740468B0DC422C6BBFC66"><enum>(3)</enum><text>execute the transaction on a foreign swap execution facility that is subject to regulation as such under the laws of a foreign jurisdiction; or</text> </paragraph><paragraph id="H13EFD76644254D4EA74E0D39D85B03FB"><enum>(4)</enum><text>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—</text> <subparagraph id="H0C1CDAF25FD64C8CA5C3ED18C0B9496D"><enum>(A)</enum><text display-inline="yes-display-inline">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</text> </subparagraph><subparagraph id="H7DD214E50F2A432C9BAB65BF2AAB3AF3"><enum>(B)</enum><text display-inline="yes-display-inline">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—</text> <clause id="HD8CA00D991924E7F82703F0981143C30"><enum>(i)</enum><text>a foreign swap dealer or a foreign swap market participant; or</text> </clause><clause id="HC93FE360E81D45E0B0569641B00CAEBF"><enum>(ii)</enum><text>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.</text> </clause></subparagraph></paragraph></subsection><subsection id="H384C23710CC74010A79B341F69D1084E"><enum>(b)</enum><header>Exchange trading</header><text>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.”</text> </subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection id="HF2FFFFBEFBB94742B6385B09313DEB52"><enum>(d)</enum><header>Alternative swap execution facilities</header><text>The Securities Exchange Act of 1934 (15 U.S.C. 78a, et seq.) is amended by adding after section 3B the following:</text> <quoted-block display-inline="no-display-inline" id="HA9D16476B8DE4268A167283E33ECAD6E" style="OLC"> <section id="H9800AF49EC1B40CBBB6418E6F5A0316B"><enum>3C.</enum><header>Alternative swap execution facilities</header> <subsection id="H3EB83E46183541EABE3A705E2E96D160"><enum>(a)</enum><header>Registration</header> <paragraph id="H9DB2F7189D1A4844A7BB7897955466B6"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph><paragraph id="H6B06C2B22A364C9B9DDC4D2901A352C0"><enum>(2)</enum><header>Dual registration</header><text>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.</text> </paragraph></subsection><subsection id="HA5EC6445E6EB48D891457500458DC2E2"><enum>(b)</enum><header>Requirements for trading</header><text>An alternative swap execution facility that is registered under subsection (a) may trade any security-based swap.</text> </subsection><subsection id="H97F58A49EFF04E38992E9C32D84FD87F"><enum>(c)</enum><header>Trading by exchanges</header><text>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.</text> </subsection><subsection id="H8A3EF552BC63452ABA8C60C6EB68B10F"><enum>(d)</enum><header>Criteria for registration</header> <paragraph id="H557F731085034E2EB37B27C8B149B210"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph><paragraph id="H6CB9D65243784F06B87A3F1694ABBC33"><enum>(2)</enum><header>Deterrence of abuses</header><text>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—</text> <subparagraph id="H3B88CCD532A24911B33CE886625D16FE"><enum>(A)</enum><text>obtain information necessary to perform the functions required under this section; or</text> </subparagraph><subparagraph id="H22214A0431C547908A3C2DA27BBF5520"><enum>(B)</enum><text>use means to—</text> <clause id="HFD09D33ADA2343F4A5156F570DABE678"><enum>(i)</enum><text>provide market participants with impartial access to the market; and</text> </clause><clause id="H34263F4B782942529978CAA7D324FA63"><enum>(ii)</enum><text>capture information that may be used in establishing whether rule violations have occurred.</text> </clause></subparagraph></paragraph><paragraph id="H9F73378B02484C93849F537F02CE5FCA"><enum>(3)</enum><header>Trading procedures</header><text>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.</text> </paragraph><paragraph id="HDA0B5CB89A0A49B687A0E48EE115E4EE"><enum>(4)</enum><header>Financial integrity of transactions</header><text>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.</text> </paragraph></subsection><subsection id="H41807A6C968E487CB39485B32190EF31"><enum>(e)</enum><header>Core principles for alternative swap execution facilities</header> <paragraph id="H690E04D209C04BA4BFE109FFE37C126B"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph><paragraph id="H580C2E47ACE74677ADC9C65D4F883792"><enum>(2)</enum><header>Compliance with rules</header><text>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.</text> </paragraph><paragraph id="HC7AB7DF88AC34183AFE101140A194F85"><enum>(3)</enum><header>Security-based swaps not readily susceptible to manipulation</header><text>The swap execution facility shall permit trading only in security-based swaps that are not readily susceptible to manipulation.</text> </paragraph><paragraph id="HDDEBAEF9E5E44A3A80F7276AE565AC4B"><enum>(4)</enum><header>Monitoring of trading</header><text>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.</text> </paragraph><paragraph id="HFFF0805695B94239A7EBEF4321241BEC"><enum>(5)</enum><header>Ability to obtain information</header><text>The swap execution facility shall—</text> <subparagraph id="H84266346F50A4EC78CA474F892DF4CDA"><enum>(A)</enum><text>establish and enforce rules that will allow the facility to obtain any necessary information to perform any of the functions described in this subsection;</text> </subparagraph><subparagraph id="H20D3BD44B6794474B8DA0B6E3403F414"><enum>(B)</enum><text>provide the information to the Commission upon request; and</text> </subparagraph><subparagraph id="H47CCC26717E442FA9D567A73FB6E96E1"><enum>(C)</enum><text>have the capacity to carry out such international information-sharing agreements as the Commission may require.</text> </subparagraph></paragraph><paragraph id="HC18524DE5EF34899A6D67C59E13B6393"><enum>(6)</enum><header>Emergency authority</header><text>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.</text> </paragraph><paragraph id="HC3F1EB1614B64478923E9E357F3D5BA9"><enum>(7)</enum><header>Timely publication of trading information</header><text>The swap execution facility shall make public timely information on price, trading volume, and other trading data to the extent prescribed by the Commission.</text> </paragraph><paragraph id="H9AB91F2A19C2450AB3DB4CA392402541"><enum>(8)</enum><header>Recordkeeping and reporting</header><text>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.</text> </paragraph><paragraph id="HD6FD2416A82E4A1F87489A66DC7FA0AA"><enum>(9)</enum><header>Antitrust considerations</header><text>Unless necessary or appropriate to achieve the purposes of this Act, the swap execution facility shall avoid—</text> <subparagraph id="HF557EDA9B21D417792B8840EF4EFA720"><enum>(A)</enum><text>adopting any rules or taking any actions that result in any unreasonable restraints of trade; or</text> </subparagraph><subparagraph id="H7FC581A5BCFC4689BC7B778D7802C703"><enum>(B)</enum><text>imposing any material anticompetitive burden on trading on the swap execution facility.</text> </subparagraph></paragraph><paragraph id="H4EE8CB11299C49AA8AA5B6E8D6099A9C"><enum>(10)</enum><header>Conflicts of interest</header><text>The swap execution facility shall—</text> <subparagraph id="HDDB8B5B79ED14B4188E2AC386B637EA0"><enum>(A)</enum><text>establish and enforce rules to minimize conflicts of interest in its decision-making process; and</text> </subparagraph><subparagraph id="H99E52C4EB3C14FB3AF35948AE1E64307"><enum>(B)</enum><text>establish a process for resolving the conflicts of interest.</text> </subparagraph></paragraph><paragraph id="H9CD68E78D2AE4EA3BA6E4240D29188BE"><enum>(11)</enum><header>Designation of compliance officer</header> <subparagraph id="HE9716C7C4EF547619F24FB594358035A"><enum>(A)</enum><header>In general</header><text>Each alternative swap execution facility shall designate an individual to serve as a compliance officer.</text> </subparagraph><subparagraph id="H0A2032C8201C487AB58B848253165499"><enum>(B)</enum><header>Duties</header><text>The compliance officer—</text> <clause id="H77A87EC48C4D44A680486531CCC1003F"><enum>(i)</enum><text>shall report directly to the board or to the senior officer of the facility;</text> </clause><clause id="HD9A4C49A035145AC92E9D36E5AC81804"><enum>(ii)</enum><text>shall—</text> <subclause id="HE12B4F44AC2540D897E820F125B3CED4"><enum>(I)</enum><text>review compliance with the core principles in section 3B(e).</text> </subclause><subclause id="HFB8EE0723E544BBEB6CDE986969CA0EA"><enum>(II)</enum><text>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;</text> </subclause><subclause id="HBF950A92A0794CCBBCE25909AC2C74F9"><enum>(III)</enum><text>be responsible for administering the policies and procedures required to be established pursuant to this section; and</text> </subclause><subclause id="H7841FB6988CD4E60BBF01A7ED441BE92"><enum>(IV)</enum><text>ensure compliance with securities laws and the rules and regulations issued thereunder, including rules prescribed by the Commission pursuant to this section; and</text> </subclause></clause><clause id="H09EA06BAFA1E407496D908D1AF09B1FB"><enum>(iii)</enum><text>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.</text> </clause></subparagraph><subparagraph id="HD390C45C62774844B78CD040B8B5A2BD"><enum>(C)</enum><header>Annual reports required</header><text>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.</text> </subparagraph></paragraph></subsection><subsection id="H9062BB8DE67F4785A3CC97A5E31FCB8C"><enum>(f)</enum><header>Exemptions</header><text>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.</text> </subsection><subsection id="HC2F2118A9BFB43B79F5BA8A8BB861B7B"><enum>(g)</enum><header>Harmonization of rules</header><text>Not later than 180 days after the date of enactment of the <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title>, 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).</text> </subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection commented="no" display-inline="no-display-inline" id="H069EABFFF1DF4B818478631459B19B84"><enum>(e)</enum><header>Segregation of assets held as collateral in swap transactions</header><text display-inline="yes-display-inline">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:</text> <quoted-block display-inline="no-display-inline" id="H022D117E126942F58222E6FD81E887D1" style="OLC"> <section commented="no" id="HC38CECC7ADE04AE0B5D564B34359F464"><enum>3D.</enum><header>Segregation of assets held as collateral in swap transactions</header> <subsection commented="no" id="H5FFA719B8D054C61910405A6CCE81510"><enum>(a)</enum><header>Cleared swaps</header><text display-inline="yes-display-inline">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.</text> </subsection><subsection commented="no" id="H68595BEF68EF4C209EEEABADBA2BCBCD"><enum>(b)</enum><header>Over-the-counter swaps</header><text display-inline="yes-display-inline">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.</text> </subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection id="H5582B864E9CC4013A604255BB4F6E402"><enum>(f)</enum><header>Trading in security-based swap agreements</header><text>Section 6 of the Securities Exchange Act of 1934 (15 U.S.C. 78f) is amended by adding at the end the following:</text> <quoted-block id="H177B2A73A8154886A8A04EC91C0B0EF1" style="OLC"> <subsection id="H7600A1DED4B045BE9A7855F263EBEF87"><enum>(l)</enum><text>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).</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection id="H47D353A7022C493ABEA191D8474350C2"><enum>(g)</enum><header>Additions of security-based swaps to certain enforcement provisions</header><text>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:</text> <quoted-block id="HE3637BE670F24AFDAC1C95829071D0C3" style="OLC"> <paragraph id="H04C64764196A4A5F93DDCC62AA52C6CB"><enum>(1)</enum><text>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;</text> </paragraph><paragraph id="H540FF87BC4EE47B28122650A03961D3A"><enum>(2)</enum><text>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</text> </paragraph><paragraph id="H667387207FEF4BCFAD04CB8659C282D3"><enum>(3)</enum><text>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.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection id="H9CD3528D3C474B908AF5B4EB71E5CACA"><enum>(h)</enum><header>Rulemaking authority To prevent fraud, manipulation, and deceptive conduct in security-based swaps</header><text>Section 9 of the Securities Exchange Act of 1934 (15 U.S.C. 78i) is amended by adding at the end the following:</text> <quoted-block id="HD5C7646F0BCB4FDE87B7FDCA9993BAB5" style="OLC"> <subsection id="H75DA7B3BEC2441AD8380743FC2931CBE"><enum>(i)</enum><text>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.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection id="HA5F5AA34593E4343B494591825930A5E"><enum>(i)</enum><header>Position limits and position accountability for security-based swaps</header><text display-inline="yes-display-inline">The Securities Exchange Act of 1934 is amended by inserting after section 10A (15 U.S.C. 78j–1) the following new section:</text> <quoted-block display-inline="no-display-inline" id="H7E3C1E502E1D4F2C99AE1FB986E11D3C" style="OLC"> <section id="H56AFC19AADF5407685F51B8C496E1FF6"><enum>10B.</enum><header>Position limits and position accountability for security-based swaps and large trader reporting</header> <subsection id="H529F52C6446A4B5D94BEE943359C7123"><enum>(a)</enum><header>Position limits</header><text display-inline="yes-display-inline">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—</text> <paragraph id="HA6238CBCE6C6421C89EE6EFBF85BA429"><enum>(1)</enum><text>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</text> </paragraph><paragraph id="H25B5197508194E199CEA3C1366C949B8"><enum>(2)</enum><text>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.</text> </paragraph></subsection><subsection id="HFE332F7B90C047C8B2C36543AA373A38"><enum>(b)</enum><header>Exemptions</header><text>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.</text> </subsection><subsection id="H5EB138B0316A49BD9687528028B9E938"><enum>(c)</enum><header>SRO Rules</header> <paragraph id="H7CB4763ABF60416FB46E875E6061E0B5"><enum>(1)</enum><header>In general</header><text>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—</text> <subparagraph id="H7365A209D7A14D6C962914444B58E67D"><enum>(A)</enum><text>to adopt rules regarding the size of positions in any security-based swap that may be held by—</text> <clause id="H3633C0D9D9444D299E5DE8E845540343"><enum>(i)</enum><text>any member of such self-regulatory organization; or</text> </clause><clause id="H7F04870061544F158644BBB9EF6D96B2"><enum>(ii)</enum><text>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</text> </clause></subparagraph><subparagraph id="HC029146DE83945189A6B6ADE37261057"><enum>(B)</enum><text>to adopt rules reasonably designed to ensure compliance with requirements prescribed by the Commission under paragraph (c)(1)(A).</text> </subparagraph></paragraph><paragraph id="H3810EF6CE6CC47B3AE240B0A2FEC56D1"><enum>(2)</enum><header>Requirement to aggregate positions</header><text>In establishing such limits, the self-regulatory organization may require such member or person to aggregate positions in—</text> <subparagraph id="H35B1D71F858340769FD6A3B90AD28D7D"><enum>(A)</enum><text>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</text> </subparagraph><subparagraph id="H44C46F194A1D436A9444F2C13E6D17B1"><enum>(B)</enum><clause commented="no" display-inline="yes-display-inline" id="H524270A038B240648840BE23CA934A31"><enum>(i)</enum><text>any security-based swap;</text> </clause><clause id="H1719229798F342B88FF7974AE43B58D3" indent="up1"><enum>(ii)</enum><text>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</text> </clause><clause id="H82E46A5395774DBD940AB43365EC7FFC" indent="up1"><enum>(iii)</enum><text>any security-based swap and any other instrument relating to the same security or group or index of securities.</text> </clause></subparagraph></paragraph></subsection><subsection id="HC172A3ED86AB4A6C8CC0841CE94A102F"><enum>(d)</enum><header>Large trader reporting</header><text>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.</text> </subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection id="H2473368BFB394866BA8514958D5EAE4E"><enum>(j)</enum><header>Public reporting and repositories for security-based swap agreements</header><text display-inline="yes-display-inline">Section 13 of the Securities Exchange Act of 1934 (15 U.S.C. 78m) is amended by adding at the end the following:</text> <quoted-block display-inline="no-display-inline" id="HAB78108462FD447FA0D3B9073FDC9F20" style="OLC"> <subsection id="H0F6F3C91B6A44564BEDAA74D3A3764C4"><enum>(m)</enum><header>Public reporting of aggregate security-based swap data</header> <paragraph id="HEBB42A16C80649549CB74E3198C1D293"><enum>(1)</enum><header>In general</header><text>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).</text> </paragraph><paragraph id="H756B471A37DF44BF86CFCC29745706C2"><enum>(2)</enum><header>Designee of the commission</header><text>The Commission may designate a clearing agency or a security-based swap repository to carry out the public reporting described in paragraph (1).</text> </paragraph><paragraph id="HFB1D19452219416BA0310D6C211E56C4"><enum>(3)</enum><header>Sources of information</header><text>The sources of the information to be publicly reported as described in paragraph (1) are—</text> <subparagraph id="H8289D04F2CBD44088762A37ACC3B3CA0"><enum>(A)</enum><text>clearing agencies pursuant to section 3A;</text> </subparagraph><subparagraph id="H15F810B21DD74617AE5C5EC357C7977B"><enum>(B)</enum><text>security-based swap repositories pursuant to subsection (n); and</text> </subparagraph><subparagraph id="H0F085B3C0E1E492EAD445785D2E3E23E"><enum>(C)</enum><text>reports received by the Commission pursuant to section 13A.</text> </subparagraph></paragraph></subsection><subsection id="HDB1716068B024C849D1CACEA9CD71141"><enum>(n)</enum><header>Security-based swap repositories</header> <paragraph id="HFC3F11780A35491494898180D72A3324"><enum>(1)</enum><header>Registration requirement</header> <subparagraph id="HCCF37F9CFC13401185951FED14197710"><enum>(A)</enum><header>In general</header><text>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.</text> </subparagraph><subparagraph id="H14E068BC4E994D4AB33CEAEC0E549914"><enum>(B)</enum><header>Inspection and examination</header><text>Registered security-based swap repositories shall be subject to inspection and examination by any representatives of the Commission.</text> </subparagraph></paragraph><paragraph id="H07557D3E8E8948EA9DD281C6464EA3EA"><enum>(2)</enum><header>Standard setting</header> <subparagraph id="HE3682E87A5A24A3EA48483189209EAC6"><enum>(A)</enum><header>Data identification</header><text>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.</text> </subparagraph><subparagraph id="H376E133B3E7A4535AFA6604B61CB2AC0"><enum>(B)</enum><header>Data collection and maintenance</header><text>The Commission shall prescribe data collection and data maintenance standards for security-based swap repositories.</text> </subparagraph><subparagraph id="H98533223AF57495EABAFEFBFD981276A"><enum>(C)</enum><header>Comparability</header><text>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.</text> </subparagraph></paragraph><paragraph id="H076F402C0E554F838A1A5A960406B41F"><enum>(3)</enum><header>Duties</header><text>A security-based swap repository shall—</text> <subparagraph id="H91EDD9CF50DF4818BA04DAE7DFD6B879"><enum>(A)</enum><text>accept data prescribed by the Commission for each security-based swap under this paragraph (2);</text> </subparagraph><subparagraph id="HBD207275601B4B5C967F158E0B87372E"><enum>(B)</enum><text>maintain such data in such form and manner and for such period as may be required by the Commission;</text> </subparagraph><subparagraph id="H65FEE4DE3DB34591AE87A2CEFB4AD266"><enum>(C)</enum><text>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</text> </subparagraph><subparagraph id="H28DF4E5191944008866D09972BA31DC7"><enum>(D)</enum><text>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.</text> </subparagraph></paragraph><paragraph id="H963282A187F44F4EA3FBA618E4321D68"><enum>(4)</enum><header>Required registration for security-based swap repositories</header><text>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.</text> </paragraph><paragraph id="HEF6386D176BC453C859FAEC67414D55C"><enum>(5)</enum><header>Harmonization of rules</header><text>Not later than 180 days after the date of enactment of the <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title>, 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.</text> </paragraph><paragraph id="H732DAF257671419283B0CF7966C9F9C9"><enum>(6)</enum><header>Exemptions</header><text>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.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section><section id="HCD963BF8FF9640D3A0434D4137FF6454"><enum>154.</enum><header>Registration and regulation of swap dealers and major swap participants</header><text display-inline="no-display-inline">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:</text> <quoted-block display-inline="no-display-inline" id="H8C365673BE9245F49C30044666A121D4" style="OLC"> <section id="H98E59E650E4F4CF3801AE62A09B23BF7"><enum>15F.</enum><header>Registration and regulation of security-based swap dealers and major security-based swap participants</header> <subsection id="H73BE7C069B744F1AB54F1FE6664118D5"><enum>(a)</enum><header>Registration</header> <paragraph id="H5542BB7458C044FFB24E12BA8A558FB6"><enum>(1)</enum><text>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.</text> </paragraph><paragraph id="H8DF963B9BEFA4FFCBA4F590C39881EE2"><enum>(2)</enum><text>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.</text> </paragraph></subsection><subsection id="HF2243711C56A4F558F889F3C55623238"><enum>(b)</enum><header>Requirements</header> <paragraph id="H511ECD1D6C814796948B1E04564965FC"><enum>(1)</enum><header>In general</header><text>A person shall register as a security-based swap dealer or major security-based swap participant by filing a registration application with the Commission.</text> </paragraph><paragraph id="H9FBC69439B114DAA921AF8145FA60899"><enum>(2)</enum><header>Contents</header><text>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.</text> </paragraph><paragraph id="HEC0B60019E4842639B12FC83A5550053"><enum>(3)</enum><header>Expiration</header><text>Each registration shall expire at such time as the Commission may by rule or regulation prescribe.</text> </paragraph><paragraph id="HF1CA76C237E74EA3A121CC845C2B1C7D"><enum>(4)</enum><header>Rules</header><text>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.</text> </paragraph><paragraph id="H62137641A392429F94986ADA08530F57"><enum>(5)</enum><header>Transition</header><text>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 <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title>.</text> </paragraph></subsection><subsection id="HFC235791302F4117AB3357D2B4DE184B"><enum>(c)</enum><header>Dual registration</header> <paragraph id="HA1E747833124475F9193F30251BF953A"><enum>(1)</enum><header>Security-based swap dealers</header><text>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.</text> </paragraph><paragraph id="H6021E07BF49D4B058145626934ECA0B6"><enum>(2)</enum><header>Major security-based swap participants</header><text>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.</text> </paragraph></subsection><subsection id="HC67DC54CD4A94008B4A7BC3049269AFC"><enum>(d)</enum><header>Joint rules</header> <paragraph id="HA6DD3700C5DF4633A5A280C5E222622E"><enum>(1)</enum><header>In general</header><text>Not later than 180 days after the effective date of the <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title>, 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.).</text> </paragraph><paragraph id="H86213ABC693D4923AE5DEF37805B6BCB"><enum>(2)</enum><header>Exception for prudential requirements</header><text>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.</text> </paragraph></subsection><subsection id="H2FFA34F5D0CF4811957A9A0351BBFE3E"><enum>(e)</enum><header>Capital and margin requirements</header> <paragraph id="H82EC3A15D294436B96BFF2D53284FDF6"><enum>(1)</enum><header>In general</header> <subparagraph id="HABE9CE2DC58C4A3DA941C2622F56F3A6"><enum>(A)</enum><header>Bank security-based swap dealers and major security-based swap participants</header><text>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.</text> </subparagraph><subparagraph id="HE670F6042BCE463CB2F51B017A07EACC"><enum>(B)</enum><header>Nonbank security-based swap dealers and major security-based swap participants</header><text>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.</text> </subparagraph></paragraph><paragraph id="H898F9F7EC4014E48B0FB7C19A7DB0ACB"><enum>(2)</enum><header>Joint rules</header> <subparagraph id="H67746A0274214E8BB996C3A8D482F966"><enum>(A)</enum><header>Bank security-based swap dealers and major security-based swap participants</header><text>Within 180 days of the enactment of the <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title>, 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.</text> </subparagraph><subparagraph id="H43745C436F5340B29D62B9C6A0C3FDE7"><enum>(B)</enum><header>Nonbank security-based swap dealers and major security-based swap participants</header><text>Within 180 days of the enactment of the <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title>, 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.</text> </subparagraph></paragraph><paragraph id="H91DB40B8AD244040B38C33F184579DFC"><enum>(3)</enum><header>Capital</header> <subparagraph id="HAD25903785B445068AF74DEB322E63D7"><enum>(A)</enum><header>Bank security-based swap dealers and major security-based swap participants</header><text>In setting capital requirements under this subsection, the Prudential Regulators shall impose—</text> <clause id="H53F46FE34E59477AB9680D5525B1FA11"><enum>(i)</enum><text>a capital requirement that is greater than zero for security-based swaps that are cleared by a clearing agency; and</text> </clause><clause id="H17357771218B4E9BA94BE01BE20B33C5"><enum>(ii)</enum><text>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.</text> </clause></subparagraph><subparagraph id="H5CD99025FAB048B09EAB6C1E6CA201A5"><enum>(B)</enum><header>Nonbank security-based swap dealers and major security-based swap participants</header><text>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.</text> </subparagraph><subparagraph id="H32920C6514F4402EB0291DA99A775090"><enum>(C)</enum><header>Bank holding companies</header><text>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.</text> </subparagraph></paragraph><paragraph id="H2EBED05DE88348B19071599531A0B63F"><enum>(4)</enum><header>Margin</header> <subparagraph id="H66F7E39392DF4C209033BA6A89CF520F"><enum>(A)</enum><header>Bank security-based swap dealers and major security-based swap participants</header><text>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.</text> </subparagraph><subparagraph id="HE999C1802E144B5EB744A656F9FAEA6C"><enum>(B)</enum><header>Non-swap dealers and major market participants</header><text>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.</text> </subparagraph><subparagraph id="HB7C8174A026647E0A21417587E622D63"><enum>(C)</enum><header>Nonbank security-based swap dealers and major security-based swap participants</header><text>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.</text> </subparagraph></paragraph></subsection><subsection id="H17B18FA61CB5475CA0BAE7EEDD140393"><enum>(f)</enum><header>Reporting and recordkeeping</header> <paragraph id="H04D7E51F5C5C4640858C055B5C58CCB9"><enum>(1)</enum><header>In general</header><text>Each registered security-based swap dealer and major security-based swap participant—</text> <subparagraph id="H367FFC1318544E42BF221CF938B5FE95"><enum>(A)</enum><text>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;</text> </subparagraph><subparagraph id="H5F83FE98ED3C4D2695F4B219AB832FCF"><enum>(B)</enum><text>for which—</text> <clause id="HF013C88DE32D4451976C78D998365878"><enum>(i)</enum><text>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</text> </clause><clause id="H0D22032717F84A2EA9FA9F2333383893"><enum>(ii)</enum><text>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;</text> </clause></subparagraph><subparagraph id="HA2CBE019838D473DA95FE05A7C81231F"><enum>(C)</enum><text>shall keep such books and records open to inspection and examination by any representative of the Commission; and</text> </subparagraph><subparagraph commented="no" id="H39E6E37F1C2447ABAA04CE05B31AD272"><enum>(D)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph><paragraph id="H01B0FE90B0334D55BA1423AF1F246585"><enum>(2)</enum><header>Rules</header><text>Not later than 1 year after the date of enactment of the <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title>, 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.</text> </paragraph></subsection><subsection id="H17887A79436F4FBE95A169655A5A9AE1"><enum>(g)</enum><header>Daily trading records</header> <paragraph id="H6FD5A9826FEF49F5AEDBB6FA5CC36D91"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph><paragraph id="HCD53CDD0C3DD491EB1021DE1D91D0ED4"><enum>(2)</enum><header>Information requirements</header><text>The daily trading records shall include such information as the Commission shall prescribe by rule or regulation.</text> </paragraph><paragraph id="HC173959897584B4495B6F75132F4F223"><enum>(3)</enum><header>Customer records</header><text>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.</text> </paragraph><paragraph id="HB29B05C5124047DF8366F4F7100B8EF9"><enum>(4)</enum><header>Audit trail</header><text>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.</text> </paragraph><paragraph id="HFF9A5064F01546BE9B7CE92DE8F9C0CD"><enum>(5)</enum><header>Rules</header><text>Not later than 1 year after the date of enactment of the <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title>, 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.</text> </paragraph></subsection><subsection id="HB384847B9D2B4983805C51E37C1FBDE1"><enum>(h)</enum><header>Business conduct standards</header> <paragraph id="H6F574800AA064799A6629956C9FC7EC8"><enum>(1)</enum><header>In general</header><text>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—</text> <subparagraph id="H390450DBD6E840C0B3B6F2814CB3238F"><enum>(A)</enum><text>fraud, manipulation, and other abusive practices involving security-based swaps (including security-based swaps that are offered but not entered into);</text> </subparagraph><subparagraph id="H94191EBBDB5A4F4DBA19F1229DD29BB6"><enum>(B)</enum><text>diligent supervision of its business as a security-based swap dealer;</text> </subparagraph><subparagraph id="H6A9A22869AD14F40B500F477910E4F6F"><enum>(C)</enum><text>adherence to all applicable position limits; and</text> </subparagraph><subparagraph id="H95B23CABE6214BC38C8E76C9CEB4744D"><enum>(D)</enum><text>such other matters as the Commission shall determine to be necessary or appropriate.</text> </subparagraph></paragraph><paragraph id="HDD6D83C07CEA4EBA9C69F21B1712E5CC"><enum>(2)</enum><header>Business conduct requirements</header><text>Business conduct requirements adopted by the Commission shall—</text> <subparagraph id="H5F0D53AC218843DDA94D4744237B975C"><enum>(A)</enum><text>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;</text> </subparagraph><subparagraph id="HFE0EC86393934A0294C156499C7D49A1"><enum>(B)</enum><text>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—</text> <clause id="H90BFFD339056462D9CA337A49E036648"><enum>(i)</enum><text>information about the material risks and characteristics of the security-based swap;</text> </clause><clause id="H49A16912F98641CEA78C34D51B685153"><enum>(ii)</enum><text>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</text> </clause><clause id="H3C9AB53C2C9C4B269AAC1BAD0FE77A25"><enum>(iii)</enum><text>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</text> </clause></subparagraph><subparagraph id="H18D038AB208D4A9FAD6FB9ECEFA9D80E"><enum>(C)</enum><text>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.</text> </subparagraph></paragraph><paragraph id="H23ACF26E2F174DE0B2AE7067B9A39C28"><enum>(3)</enum><header>Rules</header><text display-inline="yes-display-inline">Not later than 1 year after the date of enactment of the <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title>, 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.</text> </paragraph></subsection><subsection id="HB49372FCFD08425D9E2E46EC37860700"><enum>(i)</enum><header>Documentation and back office standards</header> <paragraph id="HF10E7E9ACDF24DB58F8A8522343B4E6C"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph><paragraph id="H6AA3958808F641D7847F14F8002B4B72"><enum>(2)</enum><header>Rules</header><text>Not later than 1 year after the date of enactment of the <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title>, 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.</text> </paragraph></subsection><subsection id="H45AA05039FC84DED97BE708E5B761AD1"><enum>(j)</enum><header>Dealer responsibilities</header><text>Each registered security-based swap dealer and major security-based swap participant at all times shall comply with the following requirements:</text> <paragraph id="H09BCF6BE3B7D4584AD6CF9E3B3D33EE8"><enum>(1)</enum><header>Monitoring of trading</header><text>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.</text> </paragraph><paragraph id="H5CF081BE732E43C68A3B7358EA7FE79D"><enum>(2)</enum><header>Disclosure of general information</header><text>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—</text> <subparagraph id="H3DB90B0D495D451AB8B146B6BE991389"><enum>(A)</enum><text>terms and conditions of its security-based swaps;</text> </subparagraph><subparagraph id="H33FF92FDADBB4A3481C231C7966FFFB4"><enum>(B)</enum><text>security-based swap trading operations, mechanisms, and practices;</text> </subparagraph><subparagraph id="H7DB247A080854C3B89099A45A5D4CF39"><enum>(C)</enum><text>financial integrity protections relating to security-based swaps; and</text> </subparagraph><subparagraph id="H0E18AAE0C87B401686EE936B7579C881"><enum>(D)</enum><text>other information relevant to its trading in security-based swaps.</text> </subparagraph></paragraph><paragraph id="HC2278C8E116C46A69F399AB5F847E6E7"><enum>(3)</enum><header>Ability to obtain information</header><text>The security-based swap dealer or major swap security-based participant shall—</text> <subparagraph id="H6F559A0CA75E4E1AB8591AE46DFE6535"><enum>(A)</enum><text>establish and enforce internal systems and procedures to obtain any necessary information to perform any of the functions described in this section; and</text> </subparagraph><subparagraph id="H50D0E26E514448B0B3A92BFCD0FCFD6D"><enum>(B)</enum><text>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.</text> </subparagraph></paragraph><paragraph id="H5B08495D8EA44F5CB4D8195D8D188258"><enum>(4)</enum><header>Conflicts of interest</header><text>The security-based swap dealer and major security-based swap participant shall implement conflict-of-interest systems and procedures that—</text> <subparagraph id="H2E25CB02D7E44189A98E9C854E76765D"><enum>(A)</enum><text>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</text> </subparagraph><subparagraph id="H4756E6306FF543A6ACA3D95A62D7E910"><enum>(B)</enum><text>address such other issues as the Commission determines appropriate.</text> </subparagraph></paragraph><paragraph id="H0ECFE0745C50439F85D05E9C426A11BA"><enum>(5)</enum><header>Antitrust considerations</header><text>Unless necessary or appropriate to achieve the purposes of this Act, the security-based swap dealer or major security-based swap participant shall avoid—</text> <subparagraph id="H1D5D09C14CDE4FCCA00DFFC111EF85BF"><enum>(A)</enum><text>adopting any processes or taking any actions that result in any unreasonable restraints of trade; or</text> </subparagraph><subparagraph id="H1382DE48130243F6AEBD44AF9F7399AD"><enum>(B)</enum><text>imposing any material anticompetitive burden on trading.</text> </subparagraph></paragraph></subsection><subsection id="H9B9DEB89F397413BA9BA3043441F739F"><enum>(k)</enum><header>Rules</header><text>The Commission, the Commodity Futures Trading Commission, and the Prudential Regulators shall consult with each other prior to adopting any rules under the <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title>.</text> </subsection><subsection id="H5FA12493C72C44F8A25E0FD9D5ED53A8"><enum>(l)</enum><header>Statutory disqualification</header><text>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.</text> </subsection><subsection id="HD0D6B68D36594677B0C3BC0FCEEBC890"><enum>(m)</enum><header>Enforcement and administrative proceeding authority</header> <paragraph id="H660644425BDE49B59E2AB61BAF428941"><enum>(1)</enum><header>Primary enforcement authority</header> <subparagraph commented="no" id="H7656A1B6AD4149C38A45445570EDAD61"><enum>(A)</enum><header>SEC</header><text>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 <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title> with respect to any person.</text> </subparagraph><subparagraph id="H00ED5682A1EE4106BA82297422F309E6"><enum>(B)</enum><header>Prudential regulators</header><text>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.</text> </subparagraph><subparagraph id="H45B3F1916601418BACB171D17C2A1590"><enum>(C)</enum><header>Referral</header><text>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.</text> </subparagraph><subparagraph id="H5B319871172C4DEBB2EE63EFC4198CF9"><enum>(D)</enum><header>Backstop enforcement authority</header><text>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.</text> </subparagraph></paragraph><paragraph id="HED0BFCEC34324F08BB3D90CEA962788B"><enum>(2)</enum><header>Censure, denial, suspension; notice and hearing</header><text>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—</text> <subparagraph id="H5B814B223C504F02A89FF419436E9689"><enum>(A)</enum><text>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);</text> </subparagraph><subparagraph id="H2A8F0C3CB27843F0BB7A98CB0635ADB4"><enum>(B)</enum><text>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;</text> </subparagraph><subparagraph id="HFAFA641CB1664CAC94CBB4DA7834907A"><enum>(C)</enum><text>is enjoined from any action, conduct, or practice specified in subparagraph (C) of such paragraph (4);</text> </subparagraph><subparagraph id="H07DD5AB36E1A413981042CA311BBBC79"><enum>(D)</enum><text>is subject to an order or a final order specified in subparagraph (F) or (H), respectively, of such paragraph (4); or</text> </subparagraph><subparagraph id="HE9A12ECB261F4D5AB7C67E54D6331F8B"><enum>(E)</enum><text>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).</text> </subparagraph></paragraph><paragraph id="H3F5F029A53094FB884F5546D8D34CD02"><enum>(3)</enum><text>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—</text> <subparagraph id="HD7D23B1656004635BB7121F708DC7227"><enum>(A)</enum><text>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);</text> </subparagraph><subparagraph id="HCA43F8E87F2B4744B493B937AA2C0ED6"><enum>(B)</enum><text>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;</text> </subparagraph><subparagraph id="H08DD493EA3CF413682B28236CCE6CC37"><enum>(C)</enum><text>is enjoined from any action, conduct, or practice specified in subparagraph (C) of such paragraph (4);</text> </subparagraph><subparagraph id="HA1779991D5174E86A093C71615EBD8FD"><enum>(D)</enum><text>is subject to an order or a final order specified in subparagraph (F) or (H), respectively, of such paragraph (4); or</text> </subparagraph><subparagraph id="H6C6761AC02E14D929FF5531FA54F8744"><enum>(E)</enum><text>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).</text> </subparagraph></paragraph><paragraph id="HCE7FB070F7224D73A32DAF1BE7712C04"><enum>(4)</enum><text>It shall be unlawful—</text> <subparagraph id="HDCF074BA78AF476D8B953C817BBD4F8E"><enum>(A)</enum><text>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</text> </subparagraph><subparagraph id="HFBE580670AF547F8B9A10E3894CAF196"><enum>(B)</enum><text>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.</text> </subparagraph></paragraph><paragraph commented="no" id="H4B3B4B196CD841DA9C3843E676ADF8C0"><enum>(5)</enum><header>Recognition of Comparable Non-U.S. Regulation</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </section><section id="HDA54D942CCF04A6CBF7A8469EB55F7B8"><enum>155.</enum><header>Reporting and recordkeeping</header> <subsection id="HCC0A9988FDA14E9BB87F385641A9DCA3"><enum>(a)</enum><header>In general</header><text>The Securities Exchange Act of 1934 (15 U.S.C. 78a, et seq.) is amended by inserting after section 13 the following section:</text> <quoted-block display-inline="no-display-inline" id="H4A3886BEDE394744BAD7825C0A9C7D56" style="OLC"> <section id="H1184CFAC1626401FB60BB3C83424E8D4"><enum>13A.</enum><header>Reporting and recordkeeping for certain security-based swaps</header> <subsection id="H16CA51BBF5264161B361F84E5F351D31"><enum>(a)</enum><header>In general</header><text>Any person who enters into a security-based swap and—</text> <paragraph id="H79A3B024FEE1458AA385AFCC4E7E258E"><enum>(1)</enum><text>did not clear the security-based swap in accordance with section 3A; and</text> </paragraph><paragraph id="H03528B31CDD24817B4EA9FF6A316CFDC"><enum>(2)</enum><text>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),</text> </paragraph><continuation-text continuation-text-level="subsection">shall meet the requirements in subsection (b).</continuation-text></subsection><subsection id="H7ABEEAE6E6CB405B859A304D4B01E2F1"><enum>(b)</enum><header>Reports</header><text>Any person described in subsection (a) shall—</text> <paragraph id="H8D4FACC737844701A71856F535AA0EBE"><enum>(1)</enum><text>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</text> </paragraph><paragraph id="H9EE235EDC6154344A12318A4BD0721B8"><enum>(2)</enum><text>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.</text> </paragraph></subsection><subsection id="HD199619359B24041871C5D77F705FDED"><enum>(c)</enum><header>Identical data</header><text>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).</text> </subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection id="H5ACD60D448FB45F8BBE100D1EECDD67B"><enum>(b)</enum><header>Beneficial ownership reporting</header> <paragraph id="HFD84294DAA3D446895EC9B201D3445BB"><enum>(1)</enum><text>Section 13(d)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(d)(1)) is amended by inserting <quote>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</quote> after <quote>Alaska Native Claims Settlement Act,</quote>.</text> </paragraph><paragraph id="H3E809BD5D7C34981A43AA1CB80F136BA"><enum>(2)</enum><text>Section 13(g)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(g)(1)) is amended by inserting <quote>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</quote> after <quote>subsection (d)(1) of this section</quote>.</text> </paragraph></subsection><subsection id="H1B34DA238FDA47AC9C31DA95C4B2D3D9"><enum>(c)</enum><header>Reports by institutional investment managers</header><text>Section 13(f)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(f)(1)) is amended by inserting <quote>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,</quote> after <quote>subsection (d)(1) of this section</quote>.</text> </subsection><subsection id="HC1A8B647C3794A038E06D1F344F33D97"><enum>(d)</enum><header>Administrative proceeding authority</header><text>Section 15(b)(4) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(b)(4)) is amended—</text> <paragraph id="H60C5B900AB504591AC25A21F3CD58B84"><enum>(1)</enum><text>in subparagraph (C), by inserting <quote>security-based swap dealer, major security-based swap participant,</quote> after <quote>government securities dealer,</quote>; and</text> </paragraph><paragraph id="H618BA3A51309422C942AE9EC07050A33"><enum>(2)</enum><text>in subparagraph (F), by inserting <quote>, or security-based swap dealer, or a major security-based swap participant</quote> after <quote>or dealer</quote>.</text> </paragraph></subsection><subsection id="HCFDADD3F325E456A8E12BB054B3CB072"><enum>(e)</enum><header>Transactions by corporate insiders</header><text>Section 16(f) of the Securities Exchange Act of 1934 (15 U.S.C. 78p) is amended by inserting <quote>or security-based swaps</quote> after <quote>security futures products</quote>.</text> </subsection></section><section id="H2E4BDDADBC4542988A926915347CB973"><enum>156.</enum><header>State gaming and bucket shop laws</header><text display-inline="no-display-inline">Section 28(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78bb(a)) is amended to read as follows:</text> <quoted-block id="HC1116CC84668426393C681626F69B946" style="OLC"> <subsection id="H8895A06C3CAD40989E2EE80A8F6DD1FF"><enum>(a)</enum><text>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 <quote>bucket shops</quote> 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.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </section><section id="H4BE18ED069FD41709595FA55B1220F4F"><enum>157.</enum><header>Amendments to the Securities Act of 1933; treatment of security-based swaps</header> <subsection id="HF4BF2486D4EF4368A2EA61CEA0EB3D87"><enum>(a)</enum><header>Definitions</header><text>Section 2(a) of the Securities Act of 1933 (15 U.S.C. 77b(a)) is amended—</text> <paragraph id="H9BDF9972941546DCAF92CB0565BA95D1"><enum>(1)</enum><text>in paragraph (1), by inserting <quote>security-based swap,</quote> after <quote>security future,</quote>;</text> </paragraph><paragraph id="H408F5DE4587E4CAB8AC38597E63A03C5"><enum>(2)</enum><text>in paragraph (3) by adding at the end the following: <quote>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,</quote>; and</text> </paragraph><paragraph id="HB3623D1C8150437DB74BB18B11AF6CA2"><enum>(3)</enum><text>by adding at the end the following:</text> <quoted-block id="H59D0F4EB1E304D94B83AE55A1D0E318A" style="OLC"> <paragraph id="H2CC855818CC1409BA02B2A73C1E1A995"><enum>(17)</enum><text>The terms <term>swap</term> and <term>security-based swap</term> 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)).</text> </paragraph><paragraph id="HB8861478FB8848B3935A09AAB91A374C"><enum>(18)</enum><text>The terms <term>purchase</term> or <term>sale</term> 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.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection><subsection id="H630C1B15B46D437D891609226E5CACB8"><enum>(b)</enum><header>Registration of security-based swaps</header><text>Section 5 of the Securities Act of 1933 (15 U.S.C. 77e) is amended by adding at the end the following:</text> <quoted-block id="HB3470D9303FF4442812FF46887DDA7EE" style="OLC"> <subsection id="H629DE642628B4F48A23EC4B8C2F63EBA"><enum>(d)</enum><text>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)).</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section><section id="H110678E872AF44018B5904ABA01B5559"><enum>158.</enum><header>Other authority</header><text display-inline="no-display-inline">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.</text> </section><section id="H6593DBECD5FF4482AE9B15D523050047"><enum>159.</enum><header>Jurisdiction</header><text display-inline="no-display-inline">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:</text> <quoted-block id="H7D559A5A1AAA4025A25ABE5411DCABFF" style="OLC"> <subsection id="H46FDD14F12C343B18A12A72150261EF0"><enum>(c)</enum><header>Derivatives</header><text>The Commission shall not have the authority to grant exemptions from the security-based swap provisions of the <short-title>Over-the-Counter Derivatives Markets Act of 2009</short-title>, except as expressly authorized under the provisions of that Act.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </section><section id="H6A2EE9B6830640058D3D3E93B859E039"><enum>160.</enum><header>Effective date</header><text display-inline="no-display-inline">This subtitle is effective 180 days after the date of enactment.</text> </section></subtitle>