114 HR 5592 IH: Derivatives Oversight and Taxpayer Protection Act
U.S. House of Representatives
2016-06-28
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.This Act may be cited as the Derivatives Oversight and Taxpayer Protection Act
. <enum>I</enum><header>Strengthening oversight and enforcement</header> <section id="HC280ACCFE5E84513869B4DC75E28A2E7"><enum>101.</enum><header>Fees to recover costs</header> <subsection id="H9BE29CBFA2CB44708B2EF411B5A78653"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">The Commodity Exchange Act is amended by inserting after section 10 (<external-xref legal-doc="usc" parsable-cite="usc/7/17">7 U.S.C. 17</external-xref>) the following:</text>
<quoted-block display-inline="no-display-inline" id="H90246C81A6314B73B046856D8A495E27" style="OLC">
<section id="H8BBBF8BD4685493488524DDAF0B0FAE0"><enum>11.</enum><header>Fees to recover costs</header>
<subsection id="HACED4A95EF1B483A93E7831838B255E2"><enum>(a)</enum><header>Recovery of certain costs of annual appropriation</header>
<paragraph id="HB02329BAE49D44A18C6D05DF7ECFBC5D"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Effective beginning October 1, 2016, so as to recover the costs to the Federal Government of the annual appropriation to the Commission by Congress, the Commission shall assess and collect fees under this subsection.</text>
</paragraph><paragraph id="H10FAC30664D2473D9D6405374909E184"><enum>(2)</enum><header>Requirements</header><text display-inline="yes-display-inline">Subject to paragraph (3), the Commission may—</text> <subparagraph id="H71C1E8376BA24515903150E5945CADC2"><enum>(A)</enum><text display-inline="yes-display-inline">assess fees to recover the costs of the regulatory services provided by the Commission; and</text>
</subparagraph><subparagraph id="HB7306FD2EDF94D29A0C6B11B5A35343A"><enum>(B)</enum><text display-inline="yes-display-inline">assess fees from registered entities and persons registered under this Act.</text> </subparagraph></paragraph><paragraph id="HDC54BBD198604E4881FA2B4BC51D3314"><enum>(3)</enum><header>Service fees</header><text display-inline="yes-display-inline">The Commission may assess fees to recover the costs of the following regulatory services provided by the Commission:</text>
<subparagraph id="H3414C73EE06C429C8923995DF891A40E"><enum>(A)</enum><text display-inline="yes-display-inline">Designated contract market compliance examinations.</text> </subparagraph><subparagraph id="H00AA867EB7FD499F8E2F01006D75BD19"><enum>(B)</enum><text display-inline="yes-display-inline">Foreign board of trade registration reviews.</text>
</subparagraph><subparagraph id="H8711054F35484957AB90B51F57E7F203"><enum>(C)</enum><text display-inline="yes-display-inline">Swap execution facility designation reviews.</text> </subparagraph><subparagraph id="H1C2B57362534451C80F49E570EB07A5D"><enum>(D)</enum><text display-inline="yes-display-inline">Swap data repository registration reviews.</text>
</subparagraph><subparagraph id="HE70E7DB9B7B94F0988E1C7840FA446AC"><enum>(E)</enum><text display-inline="yes-display-inline">Designated contract market designation reviews.</text> </subparagraph><subparagraph id="H679350FC0E654BE1B6F5591FC8AB7041"><enum>(F)</enum><text display-inline="yes-display-inline">Swap execution facility compliance examinations.</text>
</subparagraph><subparagraph id="HB052EEAB74BB4F7B9EE5E1898E070ECE"><enum>(G)</enum><text display-inline="yes-display-inline">Swap data repository compliance reviews.</text> </subparagraph><subparagraph id="H893AAA33B71345AF995F29B2E7BBF38F"><enum>(H)</enum><text display-inline="yes-display-inline">Designated contract market contract review and approvals.</text>
</subparagraph><subparagraph id="H843C2B2C4C994398939EC0C49847A8E9"><enum>(I)</enum><text display-inline="yes-display-inline">Swap execution facility contract review and approvals.</text> </subparagraph><subparagraph id="H6D32EA34EAB44007B262582B8D54974D"><enum>(J)</enum><text display-inline="yes-display-inline">Designated contract market contract certification and rule reviews.</text>
</subparagraph><subparagraph id="H402362D2AD834568A5E5E9B29B7F7D8C"><enum>(K)</enum><text display-inline="yes-display-inline">Swap execution facility contract certification and rule reviews.</text> </subparagraph><subparagraph id="H005D049AEBAE4530ADF36A0B049E2C0E"><enum>(L)</enum><text display-inline="yes-display-inline">Swap data repository rule reviews.</text>
</subparagraph><subparagraph id="HA54D6FFE5FFD4B75A93AB90CC5C22CD1"><enum>(M)</enum><text display-inline="yes-display-inline">Reviews of mergers, transfers, and other action requests from designated contract markets, swap execution facilities, and swap data repositories.</text>
</subparagraph><subparagraph id="H88D6D1CA3BE44A5C9CEE605A96B404AA"><enum>(N)</enum><text display-inline="yes-display-inline">Designated self-regulatory organization financial surveillance reviews.</text> </subparagraph><subparagraph id="H98688993F60D42D19F6EE1DA51368A70"><enum>(O)</enum><text display-inline="yes-display-inline">Registered futures association compliance program reviews.</text>
</subparagraph><subparagraph id="H96888E5E314349DF8760C512518361D1"><enum>(P)</enum><text display-inline="yes-display-inline">Derivatives clearing organization reviews.</text> </subparagraph><subparagraph id="HC8A5D8E178E74CD6902C8818FBE00BC5"><enum>(Q)</enum><text display-inline="yes-display-inline">Futures commission merchant examinations.</text>
</subparagraph><subparagraph id="H787E2165DE8940C08FDB8F00C1087F04"><enum>(R)</enum><text display-inline="yes-display-inline">Registered foreign exchange dealer examinations.</text> </subparagraph><subparagraph id="H2DE10B44737F4F0FA25A1E19B2B9B7BF"><enum>(S)</enum><text display-inline="yes-display-inline">Swap dealer registration reviews.</text>
</subparagraph><subparagraph id="H5E803FFC48DC4FCDB699177CC9AAFDE9"><enum>(T)</enum><text display-inline="yes-display-inline">Swap dealer examinations.</text> </subparagraph><subparagraph id="H2E91463171464E8D964B02687593C96D"><enum>(U)</enum><text display-inline="yes-display-inline">Other entity registration, reviews, or examinations, or other regulatory services provided by the Commission.</text>
</subparagraph></paragraph><paragraph id="HBB084463C78340CEB0F81A532F7A121F"><enum>(4)</enum><header>Fee rates</header><text display-inline="yes-display-inline">Fees assessed shall—</text> <subparagraph id="HF169750E63BE437EAED5C7A9C511D12B"><enum>(A)</enum><text display-inline="yes-display-inline">be reasonably related to the cost to the Commission of providing the services of the Commission;</text>
</subparagraph><subparagraph id="H2DC58111FDEF482D89AD60A716257090"><enum>(B)</enum><text display-inline="yes-display-inline">take into consideration the full-time equivalent number of employees performing the services, overhead costs, and other factors that the Commission determines are necessary in the public interest;</text>
</subparagraph><subparagraph id="H2CFC5AE7CC3641539B5858984E6BCCE1"><enum>(C)</enum><text display-inline="yes-display-inline">support market access for smaller market participants hedging or mitigating commercial or agricultural risk, including farmers and ranchers; and</text>
</subparagraph><subparagraph id="H66C3BE19FF774226A30707E4C7E77376"><enum>(D)</enum><text display-inline="yes-display-inline">minimize negative impacts on market liquidity and maintain the efficiency, competitiveness, and financial integrity of futures and swaps markets in the United States.</text>
</subparagraph></paragraph><paragraph id="H1563A687F4BD4A33806BB50DDAFA3C18"><enum>(5)</enum><header>Collection of fees</header><text display-inline="yes-display-inline">The Commission shall collect fees paid in accordance with paragraph (2) in a manner and within such time as determined by the Commission.</text>
</paragraph></subsection><subsection id="H8911D8CAF599480296B893A61834EA45"><enum>(b)</enum><header>Publication</header><text display-inline="yes-display-inline">Not later than 60 days after the date on which a law providing a regular appropriation to the Commission for a fiscal year is enacted, the Commission shall publish in the Federal Register—</text>
<paragraph id="HFF65BBFCAE264099B6EBB45F37680E29"><enum>(1)</enum><text display-inline="yes-display-inline">notices of the fee rates for the fiscal year, including any estimates or projections on which the fees are based; and</text>
</paragraph><paragraph id="H252BBFF78AF9418F99FEA29DA150C56E"><enum>(2)</enum><text display-inline="yes-display-inline">a schedule of fees for the fiscal year, including an explanation of the method used for calculating applicable fee rates.</text>
</paragraph></subsection><subsection id="H1771775B9F464F75BCCB188A716003C1"><enum>(c)</enum><header>Deposit of fees</header>
<paragraph id="HCC93A78092FC4B2C92E73BEFCF3DE7B6"><enum>(1)</enum><header>Offsetting collections</header><text display-inline="yes-display-inline">Fees collected under subsection (a) for any fiscal year—</text> <subparagraph id="HFDFECBBBEB6148F3B93FC791A66C9C14"><enum>(A)</enum><text display-inline="yes-display-inline">shall be deposited and credited as offsetting collections to the account providing appropriations to the Commission; and</text>
</subparagraph><subparagraph id="H4C5EEF959DB44C1D90EC53519E95E74A"><enum>(B)</enum><text display-inline="yes-display-inline">except as provided in subsection (e), shall not be collected or available for obligation for any fiscal year except to the extent provided in advance in appropriation Acts.</text>
</subparagraph></paragraph><paragraph id="H2A3EDC10FA14420C804B8B922412567F"><enum>(2)</enum><header>General revenues prohibited</header><text display-inline="yes-display-inline">No fees collected under subsection (a) shall be deposited and credited as general revenue of the Treasury.</text>
</paragraph></subsection><subsection id="H9CEBC8FCF38B4C738BDF5FA93745440A"><enum>(d)</enum><header>Fee orders</header>
<paragraph id="H9BC64C8C5D8F46049FD8B20E8D12A1DC"><enum>(1)</enum><header>Annual adjustment</header><text display-inline="yes-display-inline">For each fiscal year, the Commission shall by order set the fees applicable under subsection (a) for the fiscal year at rates that are reasonably likely to produce aggregate fee collections under this section that are equal to the costs to the Federal Government of the annual appropriation to the Commission by Congress.</text>
</paragraph><paragraph id="HB02CD62FA8CF4144A864DAB0AF88EE06"><enum>(2)</enum><header>Mid-year adjustment</header>
<subparagraph id="HC6F20F0F7EA04CFB84CC701560027C29"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">For each fiscal year, the Commission shall determine, not later than March 1 of the fiscal year, whether, based on the actual fees collected during the first 5 months of the fiscal year, the collections generated under the fee rates determined under paragraph (1) for the fiscal year are reasonably likely to be 10 percent (or more) greater or less than the annual appropriation to the Commission for the fiscal year.</text>
</subparagraph><subparagraph id="H384400C927C643D7A3625C623D49B8D8"><enum>(B)</enum><header>Adjustment</header>
<clause id="HA97C885BC2EB4C5DA1CDC2F802EB0F34"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">If the Commission makes an affirmative determination, the Commission shall by order, not later than March 1, adjust the fees for the fiscal year to rates that are reasonably likely to produce aggregate fee collections under this section that are equal to the cost to the Federal Government of the annual appropriation to the Commission by Congress.</text>
</clause><clause id="H4798345668A54E9A9BACCDEEF9376980"><enum>(ii)</enum><header>Factors</header><text display-inline="yes-display-inline">The fee rates shall be assessed based on the same factors described in subsection (a).</text> </clause></subparagraph></paragraph></subsection><subsection id="HC88F9562964E4EB09D999D90BAF59F23"><enum>(e)</enum><header>Lapse of appropriation</header><text display-inline="yes-display-inline">If on the first day of a fiscal year a regular appropriation to the Commission has not been enacted, the Commission shall continue to collect (as offsetting collections) the fees and assessments under subsection (a) at the rates in effect on September 30 of the preceding fiscal year, until 90 days after the date a regular appropriation is enacted.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HA26F99FDA3474B179268D90255BFD5D8"><enum>(b)</enum><header>Conforming amendments</header>
<paragraph id="HA6E3CA703F6D4E26A75A7B25163D370E"><enum>(1)</enum><text display-inline="yes-display-inline">Section 2(d) of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/2">7 U.S.C. 2(d)</external-xref>) is amended by striking <quote>and 9</quote> and inserting <quote>9, and 11</quote>.</text> </paragraph><paragraph id="H1892666A6DC74D00B64FF6EB87A54588"><enum>(2)</enum><text display-inline="yes-display-inline">Section 4(c)(1)(A)(i)(I) of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/6">7 U.S.C. 6(c)(1)(A)(i)(I)</external-xref>) is amended by inserting <quote>11,</quote> after <quote>8e,</quote>.</text>
</paragraph><paragraph id="H33B41E63CAA04D2D8EFE1AC7BA4762E0"><enum>(3)</enum><text display-inline="yes-display-inline">Section 15(a)(3) of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/19">7 U.S.C. 19(a)(3)</external-xref>) is amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="HC5982510BF664AFF99A99B8B4015A17C" style="OLC">
<subparagraph id="HFE9F7A538E8A4E07B5A4CD9DD538CAF0"><enum>(D)</enum><text display-inline="yes-display-inline">An action under section 11.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection></section><section id="H870D1AED9283477090F4C55A0D544111"><enum>102.</enum><header>Civil penalties and fines under the Commodity Exchange Act and related enforcement actions</header> <subsection id="H8BA5DAF93C7D4E1FB5326EBC382ADEC6"><enum>(a)</enum><header>Civil penalties generally</header><text display-inline="yes-display-inline">Section 6(c)(10) of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/9">7 U.S.C. 9(10)</external-xref>) is amended by striking subparagraph (C) and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="HD21BBD752CC8497288DA7EC8985EBFB5" style="OLC">
<subparagraph id="H27954784BFCE493BB65F36666149C0A5"><enum>(C)</enum><text>assess such person—</text> <clause id="H52A20F8CFD974625B711F5B6D21BC625"><enum>(i)</enum><text>a civil penalty of not more than an amount equal to the greater of—</text>
<subclause id="H1141AF73FD2A4761A5B68C9A17106F79"><enum>(I)</enum><text>$1,000,000, in the case of a person who is an individual, for each violation;</text> </subclause><subclause id="H4C28A6566BD84899AAFCFB31674E2D6E"><enum>(II)</enum><text>$10,000,000, in the case of any person other than an individual, for each violation;</text>
</subclause><subclause id="H9074CB0B660C48609DC9B73852AE43F7"><enum>(III)</enum><text>triple the monetary gain to the person and all other persons acting in concert with the person, for each such violation; or</text>
</subclause><subclause id="HE1D18C52D7534138B5060AB798CD4D3B"><enum>(IV)</enum><text>triple the total amount of losses to persons proximately caused by each such violation; or</text> </subclause></clause><clause id="H8CFF45D267F64FEDA65D922CEE9EDB44"><enum>(ii)</enum><text>a civil penalty of triple the maximum amount otherwise available under clause (i) if the person, within 5 years preceding the violation, has been—</text>
<subclause id="H8653B59D41AA45CFB316C8129ED62318"><enum>(I)</enum><text>found in a proceeding brought by the Commission, or by agreement of settlement to which the Commission is a party, to have recklessly, knowingly, or willfully violated any provision of this Act or of the rules, regulations, or orders of the Commission thereunder;</text>
</subclause><subclause id="H9F22DEE7EA7C402F9CA99CB726673254"><enum>(II)</enum><text>found in a proceeding brought by the Securities and Exchange Commission, or by agreement of settlement to which the Securities and Exchange Commission is a party, to have recklessly, knowingly, or willfully violated any provision of the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, or the Investment Advisers Act of 1940, or of the rules, regulations, or orders of the Securities and Exchange Commission thereunder;</text>
</subclause><subclause id="H0C1F57803CCE494CB7260E9F8F258626"><enum>(III)</enum><text display-inline="yes-display-inline">found in a proceeding brought by the Federal Energy Regulatory Commission, or by agreement of settlement to which the Federal Energy Regulatory Commission is a party, to have recklessly, knowingly, or willfully violated any provision of the Federal Power Act (<external-xref legal-doc="usc" parsable-cite="usc/16/792">16 U.S.C. 792 et seq.</external-xref>), the Natural Gas Act (<external-xref legal-doc="usc" parsable-cite="usc/15/717">15 U.S.C. 717 et seq.</external-xref>), the Public Utility Regulatory Policies Act of 1978 (<external-xref legal-doc="usc" parsable-cite="usc/16/2601">16 U.S.C. 2601 et seq.</external-xref>), the Natural Gas Policy Act of 1978 (<external-xref legal-doc="usc" parsable-cite="usc/15/3301">15 U.S.C. 3301 et seq.</external-xref>), or the rules, regulations, or orders of the Federal Energy Regulatory Commission issued thereunder;</text>
</subclause><subclause id="H21FA49C50B644FC8856A28D7B4AF2258"><enum>(IV)</enum><text>convicted of any criminal violation of this Act or of the rules, regulations, or orders of the Commission thereunder;</text>
</subclause><subclause id="HA372805D1C214EB4A3D9CA895B821533"><enum>(V)</enum><text>convicted of any criminal violation of the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, or the Investment Advisers Act of 1940, or of the rules, regulations, or orders of the Securities and Exchange Commission thereunder; or</text>
</subclause><subclause id="HB1F1B1AB6540480DBDB6734F385B3DC6"><enum>(VI)</enum><text>convicted of any other criminal offense that involves any conduct, transaction, advice or activity related to any commodity interest, as that term is defined by the Commission, or security-based swap; and</text></subclause></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HDC5D8832230A490C91CE3BAF4A344324"><enum>(b)</enum><header>Fines and civil penalties related to violation of cease and desist order</header><text display-inline="yes-display-inline">Section 6(d) of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/13b">7 U.S.C. 13b</external-xref>) is amended—</text> <paragraph id="H5C178E0434D345BB948196E064030F92"><enum>(1)</enum><text>by inserting <quote>(1)</quote> after <quote>(d)</quote>;</text>
</paragraph><paragraph id="H5D27ECF0C8CF4FF9B6979BD6707F4F92"><enum>(2)</enum><text>by striking <quote>$140,000 or triple the monetary gain to such person,</quote> and inserting <quote>(A) $1,000,000, in the case of a person who is an individual, for each violation, (B) $10,000,000, in the case of any person other than an individual, for each violation, (C) triple the monetary gain to the person and all other persons acting in concert with the person, for each such violation, or (D) triple the total amount of losses to persons proximately caused by each such violation,</quote>; and</text>
</paragraph><paragraph id="HC4F0585F55AD4EA38C2E85D62D7E8793"><enum>(3)</enum><text>by adding at the end the following:</text> <quoted-block id="H5503DE5B68E246ADA5D855EA8CAB7786" style="OLC"> <paragraph id="HF9880DAFA1854F59AAF325A6918690F2" indent="up1"><enum>(2)</enum><text>A person may be held liable for a civil penalty in triple the amount otherwise available for a violation under this subsection if the person, within 5 years preceding such violation, has been—</text>
<subparagraph id="H7D6C19DF95A3414F9D6AB5905707C7C7"><enum>(A)</enum><text>found in a proceeding brought by the Commission, or by agreement of settlement to which the Commission is a party, to have recklessly, knowingly, or willfully violated any provision of this Act or the rules, regulations, or orders of the Commission thereunder;</text>
</subparagraph><subparagraph id="HC6E0ABBECEF54C31B6764B2BB21E13F2"><enum>(B)</enum><text>found in a proceeding brought by the Securities and Exchange Commission, or by agreement of settlement to which the Securities and Exchange Commission is a party, to have recklessly, knowingly, or willfully violated any provision of the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, or the Investment Advisers Act of 1940, or of the rules, regulations, or orders of the Securities and Exchange Commission thereunder;</text>
</subparagraph><subparagraph id="H46703AFC2EA34C079DE671BB5D7691BA"><enum>(C)</enum><text display-inline="yes-display-inline">found in a proceeding brought by the Federal Energy Regulatory Commission, or by agreement of settlement to which the Federal Energy Regulatory Commission is a party, to have recklessly, knowingly, or willfully violated any provision of the Federal Power Act (<external-xref legal-doc="usc" parsable-cite="usc/16/792">16 U.S.C. 792 et seq.</external-xref>), the Natural Gas Act (<external-xref legal-doc="usc" parsable-cite="usc/15/717">15 U.S.C. 717 et seq.</external-xref>), the Public Utility Regulatory Policies Act of 1978 (<external-xref legal-doc="usc" parsable-cite="usc/16/2601">16 U.S.C. 2601 et seq.</external-xref>), the Natural Gas Policy Act of 1978 (<external-xref legal-doc="usc" parsable-cite="usc/15/3301">15 U.S.C. 3301 et seq.</external-xref>), or the rules, regulations, or orders of the Federal Energy Regulatory Commission issued thereunder;</text>
</subparagraph><subparagraph id="H27A31838D9074D658F4BD2870D082DB7"><enum>(D)</enum><text>convicted of any criminal violation of this Act or the rules, regulations, or orders of the Commission thereunder;</text>
</subparagraph><subparagraph id="H553C90BB3E19452183B435B0A5159E59"><enum>(E)</enum><text>convicted of any criminal violation of the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, or the Investment Advisers Act of 1940, or of the rules, regulations, or orders of the Securities and Exchange Commission thereunder; or</text>
</subparagraph><subparagraph id="H40EC4A283396418CB48A493F53D11AAB"><enum>(F)</enum><text>convicted of any other criminal offense that involves any conduct, transaction, advice or activity related to any commodity interest, as that term is defined by the Commission, or security-based swap.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="H8BFEE9456DC6450DADD0CADADE697376"><enum>(c)</enum><header>Nonenforcement of rules of government or other violations</header><text display-inline="yes-display-inline">Section 6b of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/13a">7 U.S.C. 13a</external-xref>) is amended—</text> <paragraph id="H9A50FCED89D941069D74489702556CA3"><enum>(1)</enum><text>in the first sentence, by striking <quote>$500,000 for each such violation, or, in any case of manipulation or attempted manipulation in violation of section 6(c), 6(d), or 9(a)(2), a civil penalty of not more than $1,000,000 for each such violation</quote> and inserting <quote>(A) $1,000,000, in the case of a person who is an individual, for each violation, (B) $10,000,000, in the case of any person other than an individual, for each violation, (C) triple the monetary gain to the person and all other persons acting in concert with the person, for each such violation, or (D) triple the total amount of losses to persons proximately caused by each such violation, and such civil penalty shall be assessed for each violation on which a failure to enforce or other violation occurs or has occurred; provided that such registered entity, director, officer, agent, or employee may be assessed a civil penalty of triple the amount otherwise available if the person, within 5 years of such violation, has been (i) found in a proceeding brought by the Commission, or by agreement of settlement to which the Commission is a party, to have recklessly, knowingly, or willfully violated any provision of this Act or the rules, regulations, or orders of the Commission thereunder, (ii) found in a proceeding brought by the Securities and Exchange Commission, or by agreement of settlement to which the Securities and Exchange Commission is a party, to have recklessly, knowingly, or willfully violated any provision of the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, or the Investment Advisers Act of 1940, or of the rules, regulations, or orders of the Securities and Exchange Commission thereunder, (iii) found in a proceeding brought by the Federal Energy Regulatory Commission, or by agreement of settlement to which the Federal Energy Regulatory Commission is a party, to have recklessly, knowingly, or willfully violated any provision of the Federal Power Act (<external-xref legal-doc="usc" parsable-cite="usc/16/792">16 U.S.C. 792 et seq.</external-xref>), the Natural Gas Act (<external-xref legal-doc="usc" parsable-cite="usc/15/717">15 U.S.C. 717 et seq.</external-xref>), the Public Utility Regulatory Policies Act of 1978 (<external-xref legal-doc="usc" parsable-cite="usc/16/2601">16 U.S.C. 2601 et seq.</external-xref>), the Natural Gas Policy Act of 1978 (<external-xref legal-doc="usc" parsable-cite="usc/15/3301">15 U.S.C. 3301 et seq.</external-xref>), or the rules, regulations, or orders of the Federal Energy Regulatory Commission issued thereunder; (iv) convicted of any criminal violation of this Act or the rules, regulations, or orders of the Commission thereunder; (v) convicted of any criminal violation of the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, or the Investment Advisers Act of 1940, or of the rules, regulations, or orders of the Securities and Exchange Commission thereunder; or (vi) convicted of any other criminal offense that involves any conduct, transaction, advice or activity related to any commodity interest, as that term is defined by the Commission, or security-based swap</quote>; and</text>
</paragraph><paragraph id="H7BA3537DF1564385A4DCBDD692A13589"><enum>(2)</enum><text>in the second sentence, by striking <quote>$500,000</quote> and inserting <quote>$1,000,000</quote>.</text> </paragraph></subsection><subsection id="H17D9A4415F1D4123BDEE2B8E8429B770"><enum>(d)</enum><header>Action To enjoin or restrain violations</header><text display-inline="yes-display-inline">Section 6c(d) of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/13a-1">7 U.S.C. 13a–1(d)</external-xref>) is amended—</text>
<paragraph id="H01921EA11D0047F3B460CE1899A652F9"><enum>(1)</enum><text>in paragraph (1), by inserting <quote>a civil penalty in the amount of</quote> after <quote>violation</quote>; and</text> </paragraph><paragraph id="HFECB0305FA1749CB91C48E293960BC5E"><enum>(2)</enum><text>by striking subparagraphs (A) and (B) of paragraph (1) and inserting the following:</text>
<quoted-block id="HD50A5F11EA6347F8ADE5335B47EBCECF" style="OLC">
<subparagraph id="H396EDBDE9F2F498DB9A7F9E4CCEF7E99"><enum>(A)</enum><text>not more than the greater of—</text> <clause id="HF0CAEB66E99E473198FFB55FC115AE8D"><enum>(i)</enum><text>$1,000,000, in the case of a person who is an individual, for each violation;</text>
</clause><clause id="HC3A0EF3D84794E59B69045157057F484"><enum>(ii)</enum><text>$10,000,000, in the case of any person other than an individual, for each violation;</text> </clause><clause id="H74BBDA01FE474DDFA4F9AA544F55B286"><enum>(iii)</enum><text>triple the monetary gain to the person and all other persons acting in concert with the person, for each such violation; or</text>
</clause><clause id="H389012331D6A4651BBBFAEE4C68D462F"><enum>(iv)</enum><text>triple the total amount of losses by persons proximately caused by each such violation; or</text> </clause></subparagraph><subparagraph id="H6E591CAA033F4DAE8F48EEBA80825C16"><enum>(B)</enum><text>triple the maximum amount otherwise available under subparagraph (A) if the person, within 5 years preceding the violation, has been—</text>
<clause id="H81B192FE0A2B4CE68044F556C1CEDA46"><enum>(i)</enum><text>found in a proceeding brought by the Commission, or by agreement of settlement to which the Commission is a party, to have recklessly, knowingly, or willfully violated any provision of this Act or of the rules, regulations, or orders of the Commission thereunder;</text>
</clause><clause id="H3A4DF43CADAD4A06AA830212D28807E6"><enum>(ii)</enum><text>found in a proceeding brought by the Securities and Exchange Commission, or by agreement of settlement to which the Securities and Exchange Commission is a party, to have recklessly, knowingly, or willfully violated any provision of the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, or the Investment Advisers Act of 1940, or of the rules, regulations, or orders of the Commission thereunder;</text>
</clause><clause id="HD48947EC58AA4675A04B5C48096CC4D2"><enum>(iii)</enum><text display-inline="yes-display-inline">found in a proceeding brought by the Federal Energy Regulatory Commission, or by agreement of settlement to which the Federal Energy Regulatory Commission is a party, to have recklessly, knowingly, or willfully violated any provision of the Federal Power Act (<external-xref legal-doc="usc" parsable-cite="usc/16/792">16 U.S.C. 792 et seq.</external-xref>), the Natural Gas Act (<external-xref legal-doc="usc" parsable-cite="usc/15/717">15 U.S.C. 717 et seq.</external-xref>), the Public Utility Regulatory Policies Act of 1978 (<external-xref legal-doc="usc" parsable-cite="usc/16/2601">16 U.S.C. 2601 et seq.</external-xref>), the Natural Gas Policy Act of 1978 (<external-xref legal-doc="usc" parsable-cite="usc/15/3301">15 U.S.C. 3301 et seq.</external-xref>), or the rules, regulations, or orders of the Federal Energy Regulatory Commission issued thereunder;</text>
</clause><clause id="HEFE4C3D441EF48768A6A89D829423024"><enum>(iv)</enum><text>convicted of any criminal violation of this Act or of the rules, regulations, or orders of the Commission thereunder;</text>
</clause><clause id="H94B3BC9BAF4B4730873FCA057411C158"><enum>(v)</enum><text>convicted of any criminal violation of the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, or the Investment Advisers Act of 1940, or of the rules, regulations, or orders of the Securities and Exchange Commission thereunder; or</text>
</clause><clause id="H4A5109308A814E77A88871B6E3B0E38E"><enum>(vi)</enum><text>convicted of any other criminal offense that involves any conduct, transaction, advice or activity related to any commodity interest, as that term is defined by the Commission, or security-based swap.</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="H58DED579ECC54EB4874F4315C3F54F89"><enum>(e)</enum><header>Criminal penalties</header><text display-inline="yes-display-inline">Section 9(a) of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/13">7 U.S.C. 13(a)</external-xref>) is amended in the matter preceding paragraph (1) by inserting after <quote>$1,000,000</quote> the following: <quote>in the case of an individual for each violation or $10,000,000 in the case of any person other than an individual for each violation,</quote>.</text>
</subsection><subsection id="H3A24AC134CA8496BA45C161BF282116D"><enum>(f)</enum><header>Statute of limitations</header><text display-inline="yes-display-inline">Section 9 of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/13">7 U.S.C. 13</external-xref>) is amended by adding at the end the following:</text>
<quoted-block id="H5A6B36F4E82944308BABBB751F096B18" style="OLC">
<subsection id="H0C0C08FE33294ED19DA9F8C8164FFAF3"><enum>(f)</enum><header>Statute of limitations</header>
<paragraph display-inline="no-display-inline" id="H12D01D4F70C848AA9FD31FE20FAD2CF0"><enum>(1)</enum><header>In general</header><text>An action, suit or proceeding for the enforcement of any civil fine, penalty, or forfeiture, pecuniary or otherwise, shall not be entertained unless commenced within 10 years after the date when the cause of action first accrued if, within the same period, the offender or the property is found within the United States in order that proper service may be made thereon.</text>
</paragraph><paragraph id="H767D2910D2114C2D9CA8958EA819F585"><enum>(2)</enum><header>Accrual</header><text>A cause of action accrues as of the date the Commission learns of facts sufficient to give the Commission notice that a violation has occurred.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="H6B0E78A615ED4845ADEFAC4A69A21187"><enum>(g)</enum><header>Effective date</header><text display-inline="yes-display-inline">The amendments made by this section shall take effect on the date that is 90 days after the date of the enactment of this Act.</text>
</subsection></section><section id="HC5752A3EE11B4EFBAA038BCCCD263386"><enum>103.</enum><header>Closing the cross-border loophole</header><text display-inline="no-display-inline">Section 2(i) of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/2">7 U.S.C. 2(i)</external-xref>) is amended—</text> <paragraph commented="no" display-inline="no-display-inline" id="H49C1570B09E2470A9110D79E03D0158D"><enum>(1)</enum><text>by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="HBC0518EBA1304E8D92A6FADD789491D7"><enum>(2)</enum><text>in the matter preceding subparagraph (A), as so redesignated, by striking <quote>The provisions</quote> and inserting the following:</text> <quoted-block act-name="" id="HE7B50697975B4629AA2F5B00F5941EFD" style="OLC"> <paragraph id="H97779DE57BDD4612A51377EE614D35F1"><enum>(1)</enum><header>In general</header><text>The provisions</text></paragraph><after-quoted-block>;</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="H3E4C755722474869B8804577DA00ED8A"><enum>(3)</enum><text>in paragraph (1), as so designated—</text> <subparagraph commented="no" display-inline="no-display-inline" id="H950066BAFE7942D2A1196CC28DD196A7"><enum>(A)</enum><text>in subparagraph (A), as so redesignated, by striking <quote>or</quote> at the end;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="HC87911CF34354E3581680597FE339409"><enum>(B)</enum><text>in subparagraph (B), as so redesignated, by striking the period at the end and inserting <quote>; or</quote>; and</text> </subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="HFC2606B43033420E8BCBD9A6DDAF0063"><enum>(C)</enum><text>by adding at the end the following:</text>
<quoted-block act-name="" id="HE9C8E9CD8F1A41A8BE90A54305C3BFDF" style="OLC">
<subparagraph id="H05F8BC54F7FE4992A407BCFEB3EC7DA9"><enum>(C)</enum><text>except as provided in paragraph (2), involve a swaps transaction in which a financial entity that is domiciled or organized in the United States, or a subsidiary entity that is majority owned or controlled by a financial entity that is domiciled or organized in the United States, bears swaps-related risks.</text></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="H81B95EC453354C1EABEBB1916C664B7D"><enum>(4)</enum><text>by adding at the end the following:</text> <quoted-block act-name="" id="HDDDDBA787BAC48FE96F6E5E9266A230F" style="OLC"> <paragraph id="H5F81D3D0A6DA4D8384E3D2E619D369E9"><enum>(2)</enum><header>Substituted compliance</header><text>Notwithstanding paragraph (1)(C), the Commission may allow a swaps transaction that involves a subsidiary entity that is majority owned or controlled by a financial entity that is domiciled or organized in the United States to be conducted in whole or in part under the rules and oversight of a foreign jurisdiction if the Commission determines, by rule, that—</text>
<subparagraph id="H7CC7D9E132A24A8397AB72FD2A7F8BB3"><enum>(A)</enum><text>the applicable elements of the foreign rules are substantively equivalent to, or offer greater protection than, the applicable rules in the United States; and</text>
</subparagraph><subparagraph id="H069EBBB318954984B6929499CF0F049E"><enum>(B)</enum><text>enforcement of and oversight with respect to the rules described in subparagraph (A) is not less stringent than enforcement of and oversight with respect to the applicable rules in the United States.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></section><section id="H4ECF0E19F84A44899E9CFB8415385122"><enum>104.</enum><header>Providing oversight of foreign exchange swaps</header><text display-inline="no-display-inline">Section 1a(47) of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1a">7 U.S.C. 1a(47)</external-xref>) is amended by striking subparagraph (E) and inserting the following:</text>
<quoted-block act-name="" id="HC2301E66FE614B568CA6DD6536142553" style="OLC">
<subparagraph id="H8B59566F6CD5425D90A1E94025C90934"><enum>(E)</enum><header>Treatment of foreign exchange swaps and forwards</header><text>Foreign exchange swaps and foreign exchange forwards shall be considered swaps under this paragraph.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="HEC7E0A8824794DF5B29E8638308CDB14"><enum>105.</enum><header>Improving data sharing between regulators</header><text display-inline="no-display-inline">Section 21 of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/24a">7 U.S.C. 24a</external-xref>) is amended by adding at the end the following:</text>
<quoted-block act-name="" id="H674399E3121440399429F4896D0F3416" style="OLC">
<subsection id="H0E1090B7C6BF4933A587A53A2E0DE8C0"><enum>(i)</enum><header>Data sharing</header><text>The Commission shall make data with respect to any person that is required to be registered as a swap data repository under this section available to any other financial regulatory agency—</text>
<paragraph id="HF4D449FCDFD143CF8CB026A93810A18A"><enum>(1)</enum><text>upon request; and</text> </paragraph><paragraph id="H80EA97E2E2B34E1FBD88AD39AEC8CF8D"><enum>(2)</enum><text>as soon as is practicable after receiving a request.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="H621206B6FCBD40BC82BAFFAD9435265E"><enum>106.</enum><header>Improving data quality and accessibility</header><text display-inline="no-display-inline">Section 4s of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/6s">7 U.S.C. 6s</external-xref>) is amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="HD2E22EFDF4E440789B7D1AE8CE90F3C4" style="OLC">
<subsection id="H3E80709E0DE74E0197ED102E5D9726D4"><enum>(m)</enum><header>Data quality and accessibility</header>
<paragraph id="H61112758A9A14D5492BC93CC85824703"><enum>(1)</enum><header>In general</header><text>Not later than 2 years after the date of enactment of this subsection, the Commission and the Securities and Exchange Commission shall determine whether the data that swap dealers registered under this section provide to swap data repositories—</text>
<subparagraph id="H3FDBA0ACF4D147479CD861B07B8C7DF0"><enum>(A)</enum><text>are accurate; and</text> </subparagraph><subparagraph id="H441985CA3E48422DB266984FAFF45F23"><enum>(B)</enum><text>use consistent and standardized formats that allow that data to be aggregated and analyzed by regulators.</text>
</subparagraph></paragraph><paragraph id="H83C04D7481E94C5B80DE5FC4642B9AA0"><enum>(2)</enum><header>Penalty</header><text>The Commission shall revoke the license of any swap dealer that the Commission and the Securities and Exchange Commission has found violated paragraph (1).</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><enum>II</enum><header>Shifting derivatives risks from taxpayers to financial institutions</header>
<section id="H40D786D9BB3942F884C5BD2BDFE3F25A"><enum>201.</enum><header>Ending favorable treatment of derivatives in bankruptcy</header><text display-inline="no-display-inline">Section 560 of title 11, United States Code, is repealed.</text> </section><section id="H2DE204A183A9468FB7BCEC76B14D4EEA"><enum>202.</enum><header>Reversing the CFTC's interaffiliate margin exception</header><text display-inline="no-display-inline">Not later than 180 days after the date of enactment of this Act, the Commodity Futures Trading Commission shall modify the rule on margin requirements entitled <quote>Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants</quote> (81 Fed. Reg. 636 (January 6, 2016)) to require entities to collect margin in all interaffiliate swaps.</text>
</section><section id="HAA9F9F711F8D48CEA6B9C759F489083F"><enum>203.</enum><header>Banning closeout netting for capital purposes; ensuring minimum capital</header><text display-inline="no-display-inline">Section 165(b)(1) of the Financial Stability Act of 2010 (<external-xref legal-doc="usc" parsable-cite="usc/12/5365">12 U.S.C. 5365(b)(1)</external-xref>) is amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="HDB3BD4DFD8D547CAA9509BE2039CFA9E" style="OLC">
<subparagraph id="HFA5BC8366C55420CB090EC1FC877FD19"><enum>(C)</enum><header>Consolidated assets</header>
<clause id="H9954A466A863479FBE5D5BC2BD09CC88"><enum>(i)</enum><header>Definition</header><text>In this subparagraph, the term <term>covered financial institution</term> means—</text> <subclause id="H1CC6A240F720491BB99ED240F818A261"><enum>(I)</enum><text>a swap dealer registered under section 4s of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/6s">7 U.S.C. 6s</external-xref>);</text>
</subclause><subclause id="H77B33D3E21B248489D7E2E0A7D7527EC"><enum>(II)</enum><text>a security-based swap dealer, as defined in section 3(a) of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78c">15 U.S.C. 78c(a)</external-xref>);</text>
</subclause><subclause id="H2867F2D957EF4C40BB7174C9D3C9D48B"><enum>(III)</enum><text>an insured depository institution, as defined in section 3 of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1813">12 U.S.C. 1813</external-xref>);</text>
</subclause><subclause id="HA499548EBBD447CD95281BB33D05859D"><enum>(IV)</enum><text>a nonbank financial company supervised by the Board of Governors;</text> </subclause><subclause id="HF680884B4B59455183C86640C06B80AE"><enum>(V)</enum><text display-inline="yes-display-inline">a major swap participant, as defined in section 1a of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1a">7 U.S.C. 1a</external-xref>);</text>
</subclause><subclause id="H469A32FE888641138F7377505DB876CC"><enum>(VI)</enum><text>a bank holding company described in subsection (a); and</text> </subclause><subclause id="H66C2A87835994D86AF5D6B89EB49B44D"><enum>(VII)</enum><text>any subsidiary of a bank holding company described in subsection (a).</text>
</subclause></clause><clause id="HA2F2FF57ABB64E3097B5F6A8DE816FF5"><enum>(ii)</enum><header>In general</header><text>For purposes of determining the amount of capital required under the risk-based capital requirements and leverage limits required under subparagraph (A)(i), consolidated assets shall include the fair value and potential future exposure of derivatives exposures, without recognizing the benefits of any netting arrangement, unless the netting arrangement—</text>
<subclause id="HB7BCA8438B9F4631A336991D14EBD641"><enum>(I)</enum>
<item commented="no" display-inline="yes-display-inline" id="H40C75BC821914573B6A3B2D65D56FE0C"><enum>(aa)</enum><text>is documented under a formal master netting agreement or other formal arrangement with a derivatives clearing organization registered with a primary Federal financial regulatory agency; and</text>
</item><item id="HD055B7CA6B7B4FE0A4D3751E0E5D34D8" indent="up1"><enum>(bb)</enum><text>meets financial standards approved by the Board of Governors and the Corporation; or</text> </item></subclause><subclause id="H2DC2E58F9E2E4E1DA236017E8E0080A6"><enum>(II)</enum> <item commented="no" display-inline="yes-display-inline" id="HBA8ED3A8401A44E3B7DF5E5EA1182675"><enum>(aa)</enum><text>is documented under a formal master netting agreement with a counterparty; and</text>
</item><item id="H313A71EF9D47455BACB020F12D2C8C13" indent="up1"><enum>(bb)</enum><text>requires the covered financial institution, as a matter of ongoing business practice, to—</text> <subitem id="H11EBBE790CEE45BD90D92F0AE2C492B4"><enum>(AA)</enum><text>exchange collateral daily for the fulfillment of variation margin requirements on a net basis; and</text>
</subitem><subitem id="H901CFE1385874D5FBF6D4B54407BEB75"><enum>(BB)</enum><text>fulfill all contractual payment requirements, including payments for contract determination, on a net basis, with such net exchange of collateral and payments encompassing all derivatives exposures covered by the formal arrangement.</text>
</subitem></item></subclause></clause></subparagraph><subparagraph id="HD86A23575E5B46EDB8EB5D19FA4ECAC2"><enum>(D)</enum><header>Total derivatives risk exposures</header><text>For purposes of determining the amount of capital required under leverage limits required under subparagraph (A)(i)—</text>
<clause id="H8DD84F2A6BBC4FEEB101DF8515B38214"><enum>(i)</enum><text>total derivatives risk exposures shall not be assessed at a level less than 2 percent of total gross notional derivatives contracts to which the covered financial institution, as defined in subparagraph (C)(i), is a party; and</text>
</clause><clause id="HFC0B1088E38B4D12AC97638C784E3348"><enum>(ii)</enum><text>such leverage limits shall not vary for derivatives exposures as compared to other assets.</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </section><section id="H820984144EBA40FCAF108CF300ECE0E0"><enum>204.</enum><header>Report on clearinghouses</header> <subsection id="HCF3C13ACCD6A4480A28C2B40CB53CF9C"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Not later than 1 year after the date of enactment of this Act, the Commodity Futures Trading Commission, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Board of Governors of the Federal Reserve System shall jointly publish a report that answers the following questions:</text>
<paragraph id="H336426DB9DFE4A79B93DFBC00B0F7979"><enum>(1)</enum><text>Are prefunded default funds at major clearinghouses, along with prefunded liquidity resources, adequate to absorb losses and continue operations in the event of the failure of multiple large clearing members during a systemic stress event affecting the financial system as a whole?</text>
</paragraph><paragraph id="H666434074FD34F9787C30F3E3DDE9C4F"><enum>(2)</enum><text>Are capital and liquidity resources associated with cleared derivatives at clearinghouse members adequate to meet clearinghouse capital and margin calls that might occur during a systemic stress event associated with the failure of multiple large clearing members during a systemic stress event?</text>
</paragraph><paragraph id="H1D79B37C57384F2BB353F4AC814740C1"><enum>(3)</enum><text>Based on planned resource levels at clearinghouses and major clearing members, in what ways might a lack of prefunded resources at a clearing house, or the level of member capital and liquidity resources associated with cleared derivatives, contribute to increased financial system stress during a systemic event?</text>
</paragraph><paragraph id="HA186522C5E1A47199F1D9FC189696E55"><enum>(4)</enum><text>How would the answers to the questions in paragraphs (1) through (3) be affected if portfolio correlation levels in clearinghouse margin and default fund models were significantly lower than those assumed in current risk models?</text>
</paragraph><paragraph id="HC0B3360CE57C4E4FB47867BDA3F82ED0"><enum>(5)</enum><text>Are such lower correlation levels possible in a stress event?</text> </paragraph><paragraph id="H0870A50950544FFFB25B6AE41A88FA80"><enum>(6)</enum><text>Are capital levels held by clearinghouses currently adequate to align risk management incentives between clearinghouses themselves, their members, and end user clients of their members?</text>
</paragraph><paragraph id="HD075BFBD3C744109928B1A1F7C74926E"><enum>(7)</enum><text>Do the fiduciary duties of clearinghouse management to their stockholders in any way conflict with the public interest?</text>
</paragraph></subsection><subsection id="H86713FC45C1B4FFB8FBEF77CF78975C4"><enum>(b)</enum><header>Policy recommendations</header><text display-inline="yes-display-inline">The report required under subsection (a) shall contain policy recommendations associated with the answers to the questions posed under paragraphs (1) through (7) of that subsection.</text>
</subsection></section>