[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 947 Introduced in Senate (IS)]

112th CONGRESS
  1st Session
                                 S. 947

To provide end user exemptions from certain provisions of the Commodity 
  Exchange Act and the Securities Exchange Act of 1934, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 11, 2011

   Mr. Johanns (for himself, Mr. Toomey, Mr. Crapo, Mr. Hoeven, Mr. 
  Wicker, Mr. Moran, and Mr. Cochran) introduced the following bill; 
which was read twice and referred to the Committee on Banking, Housing, 
                           and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
To provide end user exemptions from certain provisions of the Commodity 
  Exchange Act and the Securities Exchange Act of 1934, and for other 
                               purposes.

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

SECTION 1. MARGIN RULES.

    (a) Capital and Margin Requirements.--Section 4s(e) of the 
Commodity Exchange Act (7 U.S.C. 6s(e)) is amended by adding at the end 
the following:
            ``(4) Applicability with respect to counterparties.--The 
        margin requirements of this subsection shall not apply to swaps 
        in which 1 of the counterparties is not--
                    ``(A) a swap dealer or major swap participant;
                    ``(B) an investment fund that--
                            ``(i) has issued securities (other than 
                        debt securities) to more than 5 unaffiliated 
                        persons;
                            ``(ii) would be an investment company (as 
                        defined in section 3 of the Investment Company 
                        Act of 1940 (15 U.S.C. 80a-3)) but for 
                        paragraph (1) or (7) of subsection (c) of that 
                        section; and
                            ``(iii) is not primarily invested in 
                        physical assets (including commercial real 
                        estate) directly or through an interest in an 
                        affiliate that owns the physical assets;
                    ``(C) a regulated entity, as defined in section 
                1303 of the Federal Housing Enterprises Financial 
                Safety and Soundness Act of 1992 (12 U.S.C. 4502); or
                    ``(D) a commodity pool.
            ``(5) Margin transition rules.--Swaps entered into before 
        the date on which final rules are required to be promulgated 
        under section 712(e) of the Dodd-Frank Wall Street Reform and 
        Consumer Protection Act (15 U.S.C. 8302(e)) shall be exempt 
        from the margin requirements under this subsection.''.
    (b) Major Swap Participant.--Section 1a(33)(A) of the Commodity 
Exchange Act (7 U.S.C. 1a(33)(A)) is amended by striking clause (ii) 
and inserting the following:
                            ``(ii) whose outstanding swaps create 
                        substantial net counterparty exposure that 
                        could have serious adverse effects on the 
                        financial stability of the United States 
                        banking system or financial markets; or''.

SEC. 2. SECURITIES LAWS AMENDMENTS.

    (a) Margin Requirements.--Section 15F(e) of the Securities Exchange 
Act of 1934 (15 U.S.C. 780-10(e)), as added by section 764 of the Dodd-
Frank Wall Street Reform and Consumer Protection Act, is amended by 
adding at the end the following:
            ``(4) Applicability with respect to counterparties.--The 
        margin requirements of this subsection shall not apply to 
        security-based swaps in which 1 of the counterparties is not--
                    ``(A) a security-based swap dealer or major 
                security-based swap participant;
                    ``(B) an investment fund that would be an 
                investment company (as defined in section 3 of the 
                Investment Company Act of 1940 (15 U.S.C. 80a-3)), but 
                for paragraph (1) or (7) of section 3(c) of that Act 
                (15 U.S.C. 80a-3(c)), that is not primarily invested in 
                physical assets (including commercial real estate) 
                directly or through interest in its affiliates that own 
                such assets;
                    ``(C) a regulated entity, as defined in section 
                1303 of the Federal Housing Enterprises Financial 
                Safety and Soundness Act of 1992 (12 U.S.C. 4502); or
                    ``(D) a commodity pool.
            ``(5) Margin transition rules.--Security-based swaps 
        entered into before the date on which final rules are required 
        to be published under section 712(a)(5) of the Wall Street 
        Transparency and Accountability Act of 2010 (15 U.S.C. 
        8302(a)(5)) are exempt from the margin requirements of this 
        subsection.''.
    (b) Definitions.--Section 3(a)(67)(A)(ii)(II) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78c(a)(67)(A)(ii)(II)), as amended to 
read as follows:
                                    ``(II) whose outstanding security-
                                based swaps create substantial net 
                                counterparty exposure that could have 
                                serious adverse effects on the 
                                financial stability of the United 
                                States banking system or financial 
                                markets;''.

SEC. 3. EFFECTIVE DATE.

    The amendments made by this Act shall have the same effective date 
as provided in section 774 of the Wall Street Transparency and 
Accountability Act of 2010 (15 U.S.C. 77b note).
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