[Congressional Record Volume 156, Number 74 (Monday, May 17, 2010)]
[Senate]
[Pages S3834-S3846]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 4048. Mrs. FEINSTEIN (for herself, Mr. Levin, Ms. Cantwell, and 
Ms. Snowe) submitted an amendment intended to be proposed to amendment

[[Page S3835]]

SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself and Mrs. 
Lincoln)) to the bill S. 3217, to promote the financial stability of 
the United States by improving accountability and transparency in the 
financial system, to end ``too big to fail'', to protect the American 
taxpayer by ending bailouts, to protect consumers from abusive 
financial services practices, and for other purposes; which was ordered 
to lie on the table; as follows:

       Beginning on page 699, strike line 20 and all that follows 
     through page 704, line 13, and insert the following:
       ``(A) Registration.--The Commission may adopt rules and 
     regulations requiring registration with the Commission for a 
     foreign board of trade that provides the members of the 
     foreign board of trade or other participants located in the 
     United States with direct access to the electronic trading 
     and order matching system of the foreign board of trade, 
     including rules and regulations prescribing procedures and 
     requirements applicable to the registration of such foreign 
     boards of trade. For purposes of this paragraph, `direct 
     access' refers to an explicit grant of authority by a foreign 
     board of trade to an identified member or other participant 
     located in the United States to enter trades directly into 
     the trade matching system of the foreign board of trade.
       ``(B) Linked contracts.--It shall be unlawful for a foreign 
     board of trade to provide to the members of the foreign board 
     of trade or other participants located in the United States 
     direct access to the electronic trading and order-matching 
     system of the foreign board of trade with respect to an 
     agreement, contract, or transaction that settles against any 
     price (including the daily or final settlement price) of 1 or 
     more contracts listed for trading on a registered entity, 
     unless the Commission determines that--
       ``(i) 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
       ``(ii) the foreign board of trade (or the foreign futures 
     authority that oversees the foreign board of trade)--

       ``(I) adopts position limits (including related hedge 
     exemption provisions) for the agreement, contract, or 
     transaction that are comparable to the position limits 
     (including related hedge exemption provisions) adopted by the 
     registered entity for the 1 or more contracts against which 
     the agreement, contract, or transaction traded on the foreign 
     board of trade settles;
       ``(II) has the authority to require or direct market 
     participants to limit, reduce, or liquidate any position the 
     foreign board of trade (or the foreign futures authority that 
     oversees the foreign board of trade) determines to be 
     necessary to prevent or reduce the threat of price 
     manipulation, excessive speculation as described in section 
     4a, price distortion, or disruption of delivery or the cash 
     settlement process;
       ``(III) agrees to promptly notify the Commission, with 
     regard to the agreement, contract, or transaction that 
     settles against any price (including the daily or final 
     settlement price) of 1 or more contracts listed for trading 
     on a registered entity, of any change regarding--

       ``(aa) the information that the foreign board of trade will 
     make publicly available;
       ``(bb) the position limits that the foreign board of trade 
     or foreign futures authority will adopt and enforce;
       ``(cc) 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
       ``(dd) any other area of interest expressed by the 
     Commission to the foreign board of trade or foreign futures 
     authority;

       ``(IV) provides information to the Commission regarding 
     large trader positions in the agreement, contract, or 
     transaction that is comparable to the large trader position 
     information collected by the Commission for the 1 or more 
     contracts against which the agreement, contract, or 
     transaction traded on the foreign board of trade settles; and
       ``(V) provides the Commission such information as is 
     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.

       ``(C) Existing foreign boards of trade.--Subparagraphs (A) 
     and (B) shall not be effective with respect to any foreign 
     board of trade to which, prior to the date of enactment of 
     this paragraph, the Commission granted direct access 
     permission until the date that is 180 days after that date of 
     enactment.''.
       (b) Liability of Registered Persons Trading on a Foreign 
     Board of Trade.--Section 4 of the Commodity Exchange Act (7 
     U.S.C. 6) is amended--
       (1) in subsection (a), in the matter preceding paragraph 
     (1), by inserting ``or by subsection (e)'' after ``Unless 
     exempted by the Commission pursuant to subsection (c)''; and
       (2) by adding at the end the following:
       ``(e) Liability of Registered Persons Trading on a Foreign 
     Board of Trade.--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 subparagraphs (A) and (B) of 
     subsection (b)(1).''.
                                 ______
                                 
  SA 4049. Mr. HARKIN (for himself and Mr. Casey) submitted an 
amendment intended to be proposed to amendment SA 3739 proposed by Mr. 
Reid (for Mr. Dodd (for himself and Mrs. Lincoln)) to the bill S. 3217, 
to promote the financial stability of the United States by improving 
accountability and transparency in the financial system, to end ``too 
big to fail'', to protect the American taxpayer by ending bailouts, to 
protect consumers from abusive financial services practices, and for 
other purposes; which was ordered to lie on the table; as follows:

       Beginning on page 656, strike line 20 and all that follows 
     through page 657, line 12, and insert the following:
       ``(2) Special rule; duty to protected customers.--
       ``(A) Definition of protected customer.--In this paragraph, 
     the term `protected customer' means any entity that is--
       ``(i) a Federal agency;
       ``(ii) a State, State agency, city, county, municipality, 
     or other political subdivision of a State;
       ``(iii) any employee benefit plan, as defined in section 3 
     of the Employee Retirement Income Security Act of 1974 (29 
     U.S.C. 1002);
       ``(iv) any governmental plan, as defined in section 3 of 
     the Employee Retirement Income Security Act of 1974 (29 
     U.S.C. 1002); or
       ``(v) any endowment that is an organization described in 
     section 501(c)(3) of the Internal Revenue Code of 1986.
       ``(B) Prohibition.--
       ``(i) In general.--It shall be unlawful for a swap dealer 
     that provides advice regarding, offers to enter into, or 
     enters into, a swap with a protected customer--

       ``(I) to employ any device, scheme, or artifice to defraud 
     any protected customer or prospective protected customer;
       ``(II) to engage in any transaction, practice, or course of 
     business that operates as a fraud or deceit on any protected 
     customer or prospective protected customer;
       ``(III) if the swap dealer acts as a principal for the 
     account of the swap dealer, to knowingly sell any swap to, or 
     purchase any swap from, a protected customer, or if the swap 
     dealer acts as a broker for a person other than the protected 
     customer, to knowingly effect any sale or purchase of any 
     swap for the account of the protected customer, without--

       ``(aa) before the completion of the transaction, disclosing 
     to the protected customer in writing the capacity in which 
     the swap dealer is acting; and
       ``(bb) obtaining the consent of the protected customer in 
     writing with respect to the transaction; and

       ``(IV) to engage in any act, practice, or course of 
     business that is fraudulent, deceptive, or manipulative.

       ``(ii) Regulations.--As soon as practicable after the date 
     of enactment of this subparagraph, the Commission shall issue 
     rules and promulgate regulations to prescribe requirements 
     that are reasonably designed to prevent acts, practices, and 
     courses of business that are fraudulent, deceptive, or 
     manipulative.
       ``(C) Requirements.--
       ``(i) In general.--A swap dealer that recommends a swap 
     with a protected customer shall comply with clauses (ii) and 
     (iii).
       ``(ii) Reasonable grounds.--In recommending to a protected 
     customer the purchase, sale, or exchange of any swap, a swap 
     dealer shall have reasonable grounds for believing that the 
     recommendation is in the best interests of the protected 
     customer.
       ``(iii) Reasonable efforts.--Before the execution of a 
     transaction recommended to a protected customer under clause 
     (ii), a swap dealer shall make reasonable efforts to obtain 
     such information as is necessary to determine whether the 
     transaction is in the best interests of the protected 
     customer, including--

       ``(I) information relating to--

       ``(aa) the financial status of the protected customer;
       ``(bb) the tax status of the protected customer; and
       ``(cc) the stated investment objectives of the protected 
     customer; and

       ``(II) such other information that--

       ``(aa) is used or considered to be reasonable by the swap 
     dealer in making recommendations to the protected customer; 
     and
       ``(bb) the Commission may prescribe by rule or regulation.
       ``(iv) Business conduct requirements.--A swap dealer shall 
     satisfy each business conduct requirement described in 
     paragraph (3).
       ``(D) Written representations.--

[[Page S3836]]

       ``(i) In general.--Before entering into a swap with a 
     protected customer, a swap dealer shall receive in writing a 
     representation from the protected customer confirming that 
     the swap transaction has been expressly authorized--

       ``(I) by an advisor that is independent of the swap dealer; 
     and
       ``(II) in the case of an employee benefit plan subject to 
     the fiduciary duty requirements under the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1001 et seq.), by a 
     representative independent of the swap dealer that is a 
     fiduciary, as defined in section 3 of that Act (29 U.S.C. 
     1002).

       ``(ii) Regulations.--Not later than December 31, 2010, the 
     Commission shall issue rules or promulgate regulations to 
     provide guidelines to determine qualifications for advisors 
     that are authorized to provide advice under clause (i)(I).
       Beginning on page 863, strike line 22 and all that follows 
     through page 864, line 16, and insert the following:
       ``(2) Special rule; duty to protected customers.--
       ``(A) Definition of protected customer.--In this paragraph, 
     the term `protected customer' means any entity that is--
       ``(i) a Federal agency;
       ``(ii) a State, State agency, city, county, municipality, 
     or other political subdivision of a State;
       ``(iii) any employee benefit plan, as defined in section 3 
     of the Employee Retirement Income Security Act of 1974 (29 
     U.S.C. 1002);
       ``(iv) any governmental plan, as defined in section 3 of 
     the Employee Retirement Income Security Act of 1974 (29 
     U.S.C. 1002); or
       ``(v) any endowment that is an organization described in 
     section 501(c)(3) of the Internal Revenue Code of 1986.
       ``(B) Prohibition.--
       ``(i) In general.--It shall be unlawful for a security-
     based swap dealer that provides advice regarding, offers to 
     enter into, or enters into, a security-based swap with a 
     protected customer--

       ``(I) to employ any device, scheme, or artifice to defraud 
     any protected customer or prospective protected customer;
       ``(II) to engage in any transaction, practice, or course of 
     business that operates as a fraud or deceit on any protected 
     customer or prospective protected customer;
       ``(III) if the security-based swap dealer acts as a 
     principal for the account of the security-based swap dealer, 
     to knowingly sell any security-based swap to, or purchase any 
     security-based swap from, a protected customer, or if the 
     security-based swap dealer acts as a broker for a person 
     other than the protected customer, to knowingly effect any 
     sale or purchase of any security-based swap for the account 
     of the protected customer, without--

       ``(aa) before the completion of the transaction, disclosing 
     to the protected customer in writing the capacity in which 
     the security-based swap dealer is acting; and
       ``(bb) obtaining the consent of the protected customer in 
     writing with respect to the transaction; and

       ``(IV) to engage in any act, practice, or course of 
     business that is fraudulent, deceptive, or manipulative.

       ``(ii) Regulations.--As soon as practicable after the date 
     of enactment of this subparagraph, the Commission shall issue 
     rules and promulgate regulations to prescribe requirements 
     that are reasonably designed to prevent acts, practices, and 
     courses of business that are fraudulent, deceptive, or 
     manipulative.
       ``(C) Requirements.--
       ``(i) In general.--A security-based swap dealer that 
     recommends a security-based swap with a protected customer 
     shall comply with clauses (ii) and (iii).
       ``(ii) Reasonable grounds.--In recommending to a protected 
     customer the purchase, sale, or exchange of any security-
     based swap, a security-based swap dealer shall have 
     reasonable grounds for believing that the recommendation is 
     in the best interests of the protected customer.
       ``(iii) Reasonable efforts.--Before the execution of a 
     transaction recommended to a protected customer under clause 
     (ii), a security-based swap dealer shall make reasonable 
     efforts to obtain such information as is necessary to 
     determine whether the transaction is in the best interests of 
     the protected customer, including--

       ``(I) information relating to--

       ``(aa) the financial status of the protected customer;
       ``(bb) the tax status of the protected customer; and
       ``(cc) the stated investment objectives of the protected 
     customer; and

       ``(II) such other information that--

       ``(aa) is used or considered to be reasonable by the 
     security-based swap dealer in making recommendations to the 
     protected customer; and
       ``(bb) the Commission may prescribe by rule or regulation.
       ``(iv) Business conduct requirements.--A security-based 
     swap dealer shall satisfy each business conduct requirement 
     described in paragraph (3).
       ``(D) Written representations.--
       ``(i) In general.--Before entering into a security-based 
     swap with a protected customer, a security-based swap dealer 
     shall receive in writing a representation from the protected 
     customer confirming that the security-based swap transaction 
     has been expressly authorized--

       ``(I) by an advisor that is independent of the security-
     based swap dealer; and
       ``(II) in the case of an employee benefit plan subject to 
     the fiduciary duty requirements under the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1001 et seq.), by a 
     representative independent of the security-based swap dealer 
     that is a fiduciary, as defined in section 3 of that Act (29 
     U.S.C. 1002).

       ``(ii) Regulations.--Not later than December 31, 2010, the 
     Commission shall issue rules or promulgate regulations to 
     provide guidelines to determine qualifications for advisors 
     that are authorized to provide advice under clause (i)(I).
                                 ______
                                 
  SA 4050. Mr. CARDIN (for himself, Mr. Lugar, Mr. Durbin, Mr. Schumer, 
Mr. Feingold, Mr. Merkley, Mr. Johnson, and Mr. Whitehouse) submitted 
an amendment intended to be proposed to amendment SA 3739 proposed by 
Mr. Reid (for Mr. Dodd (for himself and Mrs. Lincoln)) to the bill S. 
3217, to promote the financial stability of the United States by 
improving accountability and transparency in the financial system, to 
end ``too big to fail,'' to protect the American taxpayer by ending 
bailouts, to protect consumers from abusive financial services 
practices, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 1187, line 9, strike ``effective.'' insert the 
     following: ``effective.

                Subtitle K--Resource Extraction Issuers

     SEC. 995. FINDINGS.

       Congress finds the following:
       (1) It is in the interest of the United States to promote 
     good governance in the extractive industries sector. 
     Transparency in revenue payments benefits oil, gas, and 
     mining companies, because it improves the business climate in 
     which such companies work, increases the reliability of 
     commodity supplies upon which businesses and people in the 
     United States rely, and promotes greater energy security.
       (2) Companies in the extractive industries sector face 
     unique tax and reputational risks, in the form of country-
     specific taxes and regulations. Exposure to these risks is 
     heightened by the substantial capital employed in the 
     extractive industries, and the often opaque and unaccountable 
     management of natural resource revenues by foreign 
     governments, which in turn creates unstable and high-cost 
     operating environments for multinational companies. The 
     effects of these risks are material to investors.

     SEC. 996. DISCLOSURE OF PAYMENTS BY RESOURCE EXTRACTION 
                   ISSUERS.

       Section 13 of the Securities Exchange Act of 1934 (15 
     U.S.C. 78m), as amended by this Act, is amended by adding at 
     the end the following:
       ``(p) Disclosure of Payments by Resource Extraction 
     Issuers.--
       ``(1) Definitions.--In this subsection--
       ``(A) the term `commercial development of oil, natural gas, 
     or minerals' includes exploration, extraction, processing, 
     export, and other significant actions relating to oil, 
     natural gas, or minerals, or the acquisition of a license for 
     any such activity, as determined by the Commission;
       ``(B) the term `foreign government' means a foreign 
     government, a department, agency, or instrumentality of a 
     foreign government, or a company owned by a foreign 
     government, as determined by the Commission;
       ``(C) the term `payment'--
       ``(i) means a payment that is--

       ``(I) made to further the commercial development of oil, 
     natural gas, or minerals; and
       ``(II) not de minimis; and

       ``(ii) includes taxes, royalties, fees (including license 
     fees), production entitlements, bonuses, and other material 
     benefits, that the Commission, consistent with the guidelines 
     of the Extractive Industries Transparency Initiative (to the 
     extent practicable), determines are part of the commonly 
     recognized revenue stream for the commercial development of 
     oil, natural gas, or minerals;
       ``(D) the term `resource extraction issuer' means an issuer 
     that--
       ``(i) is required to file an annual report with the 
     Commission; and
       ``(ii) engages in the commercial development of oil, 
     natural gas, or minerals;
       ``(E) the term `interactive data format' means an 
     electronic data format in which pieces of information are 
     identified using an interactive data standard; and
       ``(F) the term `interactive data standard' means 
     standardized list of electronic tags that mark information 
     included in the annual report of a resource extraction 
     issuer.
       ``(2) Disclosure.--
       ``(A) Information required.--Not later than 270 days after 
     the date of enactment of the Restoring American Financial 
     Stability Act of 2010, the Commission shall issue final rules 
     that require each resource extraction issuer to include in an 
     annual report of the resource extraction issuer information 
     relating to any payment made by the resource extraction 
     issuer, a subsidiary of the resource extraction issuer, or an 
     entity under the control of the resource extraction issuer to 
     a foreign government or the Federal Government for the 
     purpose of the commercial development of oil, natural gas, or 
     minerals, including--
       ``(i) the type and total amount of such payments made for 
     each project of the resource

[[Page S3837]]

     extraction issuer relating to the commercial development of 
     oil, natural gas, or minerals; and
       ``(ii) the type and total amount of such payments made to 
     each government.
       ``(B) Consultation in rulemaking.--In issuing rules under 
     subparagraph (A), the Commission may consult with any agency 
     or entity that the Commission determines is relevant.
       ``(C) Interactive data format.--The rules issued under 
     subparagraph (A) shall require that the information included 
     in the annual report of a resource extraction issuer be 
     submitted in an interactive data format.
       ``(D) Interactive data standard.--
       ``(i) In general.--The rules issued under subparagraph (A) 
     shall establish an interactive data standard for the 
     information included in the annual report of a resource 
     extraction issuer.
       ``(ii) Electronic tags.--The interactive data standard 
     shall include electronic tags that identify, for any payments 
     made by a resource extraction issuer to a foreign government 
     or the Federal Government--

       ``(I) the total amounts of the payments, by category;
       ``(II) the currency used to make the payments;
       ``(III) the financial period in which the payments were 
     made;
       ``(IV) the business segment of the resource extraction 
     issuer that made the payments;
       ``(V) the government that received the payments, and the 
     country in which the government is located;
       ``(VI) the project of the resource extraction issuer to 
     which the payments relate; and
       ``(VII) such other information as the Commission may 
     determine is necessary or appropriate in the public interest 
     or for the protection of investors.

       ``(E) International transparency efforts.--To the extent 
     practicable, the rules issued under subparagraph (A) shall 
     support the commitment of the Federal Government to 
     international transparency promotion efforts relating to the 
     commercial development of oil, natural gas, or minerals.
       ``(F) Effective date.--With respect to each resource 
     extraction issuer, the final rules issued under subparagraph 
     (A) shall take effect on the date on which the resource 
     extraction issuer is required to submit an annual report 
     relating to the fiscal year of the resource extraction issuer 
     that ends not earlier than 1 year after the date on which the 
     Commission issues final rules under subparagraph (A).
       ``(3) Public availability of information.--
       ``(A) In general.--To the extent practicable, the 
     Commission shall make available online, to the public, a 
     compilation of the information required to be submitted under 
     the rules issued under paragraph (2)(A).
       ``(B) Other information.--Nothing in this paragraph shall 
     require the Commission to make available online information 
     other than the information required to be submitted under the 
     rules issued under paragraph (2)(A).
       ``(4) Authorization of appropriations.--There are 
     authorized to be appropriated to the Commission such sums as 
     may be necessary to carry out this subsection.''.
                                 ______
                                 
  SA 4051. Mr. GREGG submitted an amendment intended to be proposed to 
amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself and 
Mrs. Lincoln)) to the bill S. 3217, to promote the financial stability 
of the United States by improving accountability and transparency in 
the financial system, to end ``too big to fail'', to protect the 
American taxpayer by ending bailouts, to protect consumers from abusive 
financial services practices, and for other purposes; which was ordered 
to lie on the table; as follows:

       On page 18, between lines 17 and 18, insert the following:

     SEC. 5. PROHIBITION ON THE USE OF FEDERAL FUNDS TO PAY STATE 
                   OBLIGATIONS.

       (a) In General.--Notwithstanding any other provision of 
     law, no Federal funds may be used to purchase or guarantee 
     obligations of, issue lines of credit to or provide direct or 
     indirect grants-and-aid to, any State government, municipal 
     government, local government, or county government which has 
     defaulted on its obligations, is at risk of defaulting, or is 
     likely to default, absent such assistance from the United 
     States Government.
       (b) Limit on Use of Borrowed Funds.--The Secretary shall 
     not, directly or indirectly, use general fund revenues or 
     funds borrowed pursuant to title 31, United States Code, to 
     purchase or guarantee any asset or obligation of any State 
     government, municipal government, local government, or county 
     government or to otherwise assist such governments, in any 
     instance in which the State government, municipal government, 
     or county government has defaulted on its obligations, is at 
     risk of defaulting, or is likely to default, absent such 
     assistance from the United States Government.
       (c) Limit on Federal Reserve Funds.--The Board of Governors 
     shall not, directly or indirectly, lend against, purchase, or 
     guarantee any asset or obligation of any State government, 
     municipal government, local government, or county government 
     or to otherwise assist such governments, in any instance in 
     which the State government, municipal government, local 
     government, or county government has defaulted on its 
     obligations, is at risk of defaulting, or is likely to 
     default, absent such assistance from the United States 
     Government. Notwithstanding any other provision of law, no 
     Federal funds may be used to pay the obligations of any 
     State, or to issue a line of credit to any State.
                                 ______
                                 
  SA 4052. Mr. CORKER submitted an amendment intended to be proposed to 
amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself and 
Mrs. Lincoln)) to the bill S. 3217, to promote the financial stability 
of the United States by improving accountability and transparency in 
the financial system, to end ``too big to fail'', to protect the 
American taxpayer by ending bailouts, to protect consumers from abusive 
financial services practices, and for other purposes; which was ordered 
to lie on the table; as follows:

       On page 1056, line 17, strike the second period and insert 
     the following: ``.

     SEC. 946. REPRESENTATIONS AND WARRANTIES FOR POOL ASSETS.

       (a) Representations and Warranties.--
       (1) Definitions.--In this subsection--
       (A) the terms ``asset-backed security'', ``servicer'', and 
     ``sponsor'' have the meanings given those terms under 
     Regulation AB; and
       (B) the term ``Regulation AB'' means subpart 229.1100 of 
     title 17, Code of Federal Regulations, or any successor 
     thereto.
       (2) Rules required.--
       (A) Compliance.--Not later than 270 days after the date of 
     enactment of this Act, the Commission shall issue rules, as 
     the Commission determines is necessary and appropriate 
     consistent with the protection of investors, that require any 
     issuance of an asset-backed security to comply with paragraph 
     (3).
       (B) Definition.--The Commission shall, by rule, define the 
     term ``pool assets'' for purposes of this subsection.
       (3) Periodic independent evaluation.--The pooling and 
     servicing agreement for an asset-backed security shall 
     contain provisions requiring the sponsor of the asset-backed 
     security to furnish to the trustee of the asset-backed 
     security, on a quarterly basis, a certificate or opinion from 
     an independent evaluator that--
       (A) identifies any pool assets that in the prior quarter, 
     the trustee notified, or had the right to notify, the obligor 
     that it had an obligation to repurchase or substitute under 
     the terms of the pooling and servicing agreement because of a 
     breach or violation of a representation or warranty; and
       (B) includes facts supporting a finding as to whether any 
     representation or warranty made with respect to any pool 
     asset has been breached or violated.
       (4) Independent evaluator.--For purposes of paragraph (3), 
     an independent evaluator shall--
       (A) be subject to removal upon the vote of 25 percent of 
     the holders of outstanding shares of the asset-backed 
     security; and
       (B) have access to the pool asset records and related 
     documents of any party to the pooling and servicing agreement 
     and any person performing work on behalf of any party to the 
     pooling and servicing agreement.
       (5) Exemptions.--The Commission may, by rule, exempt a 
     class of asset-backed securities from the rules issued under 
     this subsection, if the Commission determines that the 
     application of such rules to the class of asset-backed 
     securities would cause undue disruption to a segment of the 
     market affected by the class of asset-backed securities.
       (b) Direct Review.--An investor or group of investors that 
     holds not less than 20 percent of the outstanding securities 
     of an asset-backed security (including an asset-backed 
     security that is not subject to the requirements under 
     subpart 229.1100 of title 17, Code of Federal Regulations) 
     that is issued or outstanding on or before the date of 
     enactment of this Act shall have access to all loan documents 
     and related documents of any servicer of the asset-backed 
     security (including servicing records), unless otherwise 
     prohibited in a contract with respect to the asset-backed 
     security.
       (c) Enforcement.--The Commission may enforce the rules 
     issued under this section in the same manner as the 
     Commission enforces rules issued under 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.).
                                 ______
                                 
  SA 4053. Ms. STABENOW (for herself and Mr. Brown of Ohio) submitted 
an amendment intended to be proposed to amendment SA 3739 proposed by 
Mr. Reid (for Mr. Dodd (for himself and Mrs. Lincoln)) to the bill S. 
3217, to promote the financial stability of the United States by 
improving accountability and transparency in the financial system, to 
end ``too big to fail'', to protect the American taxpayer by ending 
bailouts, to protect consumers from abusive financial services 
practices, and for other purposes; which was ordered to lie on the 
table; as follows:


[[Page S3838]]


       On page 540, line 16, strike ``purchase'' and insert 
     ``purchase or lease''.
       On page 580, line 20, insert ``and involved in hedging 
     activities related to'' after ``engaged in''.
       On page 580, line 21, strike ``purchase'' and insert 
     ``purchase or lease''.
       On page 580, line 23, strike ``user'' and insert ``user 
     (including any subsidiary of the commercial end user)''.
       On page 580, lines 24 and 25, strike ``only if the 
     affiliate'' and insert ``as can affiliates''.
       On page 581, line 1, strike ``uses'' and insert ``using''.
       On page 582, between lines 6 and 7, insert the following:
       ``(iii) Transition rule.--An affiliate or a wholly owned 
     entity of a commercial end user that is predominantly engaged 
     in providing financing for the purchase or lease of 
     merchandise or manufactured goods of the commercial end user 
     affiliate (including any subsidiary of the commercial end 
     user) shall be exempt from the margin requirement described 
     in section 4s(e) and the clearing requirement described in 
     paragraph (1) with regard to swaps entered into to mitigate 
     the risk of the financing activities for not less than a 3-
     year period beginning on the date of enactment of this 
     clause.
       ``(iv) Authority of commission.--On or prior to the date on 
     which the 3-year period described in clause (iii) ends, the 
     Commission may extend the exemption described in that clause 
     for an additional 1-year period if the Commission--

       ``(I) determines the extension to be in the public 
     interest; and
       ``(II) publishes in the Federal Register the order granting 
     the extension (including the reasons for the extension).

                                 ______
                                 
  SA 4054. Mr. CORKER submitted an amendment intended to be proposed to 
amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself and 
Mrs. Lincoln)) to the bill S. 3217, to promote the financial stability 
of the United States by improving accountability and transparency in 
the financial system, to end ``too big to fail'', to protect the 
American taxpayer by ending bailouts, to protect consumers from abusive 
financial services practices, and for other purposes; which was ordered 
to lie on the table; as follows:

       On page 1052, line 3, strike ``SEC. 942.'' and insert the 
     following:

     SEC. 942. RESIDENTIAL MORTGAGE UNDERWRITING STANDARDS.

       (a) Standards Established.--Notwithstanding any other 
     provision of this Act or any other provision of Federal, 
     State, or local law, the Federal banking agencies, in 
     consultation with the Federal Housing Finance Agency and the 
     Department of Housing and Urban Development, shall jointly 
     establish specific minimum standards for mortgage 
     underwriting, including--
       (1) a requirement that the mortgagee verify and document 
     the income and assets relied upon to qualify the mortgagor on 
     the residential mortgage, including the previous employment 
     and credit history of the mortgagor;
       (2) a down payment requirement that--
       (A) is equal to not less than 5 percent of the purchase 
     price of the property securing the residential mortgage; and
       (B) in the case of a first lien residential mortgage loan 
     with an initial loan to value ratio that is more than 80 
     percent and not more than 95 percent, includes a requirement 
     for credit enhancements, as defined by the Federal banking 
     agencies, until the loan to value ratio of the residential 
     mortgage loan amortizes to a value that is less than 80 
     percent of the purchase price;
       (3) a method for determining the ability of the mortgagor 
     to repay the residential mortgage that is based on factors 
     including--
       (A) all terms of the residential mortgage, including 
     principal payments that fully amortize the balance of the 
     residential mortgage over the term of the residential 
     mortgage; and
       (B) the debt to income ratio of the mortgagor; and
       (4) any other specific standards the Federal banking 
     agencies jointly determine are appropriate to ensure prudent 
     underwriting of residential mortgages.
       (b) Updates to Standards.--The Federal banking agencies, in 
     consultation with the Federal Housing Finance Agency and the 
     Department of Housing and Urban Development--
       (1) shall review the standards established under this 
     section not less frequently than every 5 years; and
       (2) based on the review under paragraph (1), may revise the 
     standards established under this section, as the Federal 
     banking agencies, in consultation with the Federal Housing 
     Finance Agency and the Department of Housing and Urban 
     Development, determine to be necessary.
       (c) Compliance.--It shall be a violation of Federal law--
       (1) for any mortgage loan originator to fail to comply with 
     the minimum standards for mortgage underwriting established 
     under subsection (a) in originating a residential mortgage 
     loan;
       (2) for any company to maintain an extension of credit on a 
     revolving basis to any person to fund a residential mortgage 
     loan, unless the company reasonably determines that the 
     residential mortgage loan funded by such credit was subject 
     to underwriting standards no less stringent than the minimum 
     standards for mortgage underwriting established under 
     subsection (a); or
       (3) for any company to purchase, fund by assignment, or 
     guarantee a residential mortgage loan, unless the company 
     reasonably determines that the residential mortgage loan was 
     subject to underwriting standards no less stringent than the 
     minimum standards for mortgage underwriting established under 
     subsection (a).
       (d) Implementation.--
       (1) Regulations required.--The Federal banking agencies, in 
     consultation with the Federal Housing Finance Agency, shall 
     issue regulations to implement subsections (a) and (c), which 
     shall take effect not later than 270 days after the date of 
     enactment of this Act.
       (2) Report required.--If the Federal banking agencies have 
     not issued final regulations under subsections (a) and (c) 
     before the date that is 270 days after the date of enactment 
     of this Act, the Federal banking agencies shall jointly 
     submit to the Committee on Banking, Housing, and Urban 
     Affairs of the Senate and the Committee on Financial Services 
     of the House of Representatives a report that--
       (A) explains why final regulations have not been issued 
     under subsections (a) and (c); and
       (B) provides a timeline for the issuance of final 
     regulations under subsections (a) and (c).
       (e) Enforcement.--Compliance with the rules issued under 
     this section shall be enforced by--
       (1) the primary financial regulatory agency of an entity, 
     with respect to an entity subject to the jurisdiction of a 
     primary financial regulatory agency, in accordance with the 
     statutes governing the jurisdiction of the primary financial 
     regulatory agency over the entity and as if the action of the 
     primary financial regulatory agency were taken under such 
     statutes; and
       (2) the Bureau, with respect to a company that is not 
     subject to the jurisdiction of a primary financial regulatory 
     agency.
       (f) Exemptions for Certain Nonprofit Mortgage Loan 
     Originators.--
       (1) In general.--Not later than 180 days after the date of 
     enactment of this Act, the Federal banking agencies, in 
     consultation with the Secretary of Housing and Urban 
     Development and the Secretary of the Treasury, may jointly 
     issue rules to exempt from the requirements under subsection 
     (a)(2), mortgage loan originators that--
       (A) are exempt from taxation under section 501(c)(3) of the 
     Internal Revenue Code of 1986; and
       (B) were in existence on January 1, 2009.
       (2) Determining factors.--The Federal banking agencies 
     shall ensure that--
       (A) the lending activities of a mortgage loan originator 
     that receives an exemption under this subsection do not 
     threaten the safety and soundness of the banking system of 
     the United States; and
       (B) a mortgage loan originator that receives an exemption 
     under this subsection--
       (i) is not compensated based on the number or value of 
     residential mortgage loan applications accepted, offered, or 
     negotiated by the mortgage loan originator;
       (ii) does not offer residential mortgage loans that have an 
     interest rate greater than zero percent;
       (iii) does not gain a monetary profit from any residential 
     mortgage product or service provided;
       (iv) has the primary purpose of serving low income housing 
     needs;
       (v) has not been specifically prohibited, by statute, from 
     receiving Federal funding; and
       (vi) meets any other requirements that the Federal banking 
     agencies jointly determine are appropriate for ensuring that 
     a mortgage loan originator that receives an exemption under 
     this subsection does not threaten the safety and soundness of 
     the banking system of the United States.
       (3) Reports required.--Before the issuance of final rules 
     under subsection (a), and annually thereafter, the Federal 
     banking agencies shall jointly submit to the Committee on 
     Banking, Housing, and Urban Affairs of the Senate and the 
     Committee on Financial Services of the House of 
     Representatives a report that--
       (A) identifies the mortgage loan originators that receive 
     an exemption under this subsection; and
       (B) for each mortgage loan originator identified under 
     subparagraph (A), the rationale for providing an exemption.
       (4) Updates to exemptions.--The Federal banking agencies, 
     in consultation with the Secretary of Housing and Urban 
     Development and the Secretary of the Treasury--
       (A) shall review the exemptions established under this 
     subsection not less frequently than every 2 years; and
       (B) based on the review under subparagraph (A), may revise 
     the standards established under this subsection, as the 
     Federal banking agencies, in consultation with the Secretary 
     of Housing and Urban Development and the Secretary of the 
     Treasury, determine to be necessary.
       (g) Rules of Construction.--Nothing in this section may be 
     construed to permit--
       (1) the Federal National Mortgage Association or the 
     Federal Home Loan Mortgage Corporation to make or guarantee a 
     residential mortgage loan that does not meet the minimum 
     underwriting standards established under this section; or
       (2) the Federal banking agencies to issue an exemption 
     under subsection (f) that is not on a case-by-case basis.

[[Page S3839]]

       (h) Definitions.--In this section, the following 
     definitions shall apply:
       (1) Company.--The term ``company''--
       (A) has the same meaning as in section 2(b) of the Bank 
     Holding Company Act of 1956 (12 U.S.C. 1841(b)); and
       (B) includes a sole proprietorship.
       (2) Mortgage loan originator.--The term ``mortgage loan 
     originator'' means any company that takes residential 
     mortgage loan applications and offers or negotiates terms of 
     residential mortgage loans.
       (3) Residential mortgage loan.--The term ``residential 
     mortgage loan''--
       (A) means any extension of credit primarily for personal, 
     family, or household use that is secured by a mortgage, deed 
     of trust, or other equivalent security interest in a dwelling 
     or residential real estate upon which is constructed or 
     intended to be constructed a dwelling; and
       (B) does not include a mortgage loan for which mortgage 
     insurance is provided by the Department of Veterans Affairs 
     or the Rural Housing Administration.
       (4) Extension of credit; dwelling.--The terms ``extension 
     of credit'' and ``dwelling'' shall have the same meaning as 
     in section 103 of the Truth in Lending Act (15 U.S.C. 1602).

     SEC. 943. STUDY ON FEDERAL HOUSING ADMINISTRATION 
                   UNDERWRITING STANDARDS.

       (a) Study.--
       (1) In general.--The Comptroller General of the United 
     States shall conduct a study evaluating whether the 
     underwriting criteria used by the Federal Housing 
     Administration are sufficient to ensure the solvency of the 
     Mutual Mortgage Insurance Fund of the Federal Housing 
     Administration and the safety and soundness of the banking 
     system of the United States.
       (2) Issues to be studied.--In conducting the study under 
     paragraph (1), the Comptroller General shall evaluate--
       (A) down payment requirements for Federal Housing 
     Administration borrowers;
       (B) default rates of mortgages insured by the Federal 
     Housing Administration;
       (C) characteristics of Federal Housing Administration 
     borrowers who are most likely to default;
       (D) taxpayer exposure to losses incurred by the Federal 
     Housing Administration;
       (E) the impact of the market share of the Federal Housing 
     Administration on efforts to sustain a viable private 
     mortgage market; and
       (F) any other factors that Comptroller General determines 
     are appropriate.
       (b) Report.--Not later than 6 months after the date of 
     enactment of this Act, the Comptroller General shall submit 
     to Congress a report on the study conducted under subsection 
     (a) that includes recommendations for statutory improvements 
     to be made to the underwriting criteria used by the Federal 
     Housing Administration, to ensure the solvency of the Mutual 
     Mortgage Insurance Fund of the Federal Housing Administration 
     and the safety and soundness of the banking system of the 
     United States.

     SEC. 944.

                                 ______
                                 
  SA 4055. Mrs. HUTCHISON (for herself, Mrs. Hagan, and Mr. Cornyn) 
submitted an amendment intended to be proposed to amendment SA 3739 
proposed by Mr. Reid (for Mr. Dodd (for himself and Mrs. Lincoln)) to 
the bill S. 3217, to promote the financial stability of the United 
States by improving accountability and transparency in the financial 
system, to end ``too big to fail'', to protect the American taxpayer by 
ending bailouts, to protect consumers from abusive financial services 
practices, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 485, line 14, strike ``and'' and all that follows 
     through line 25 and insert the following:
       (B) subject to such restrictions as the Federal banking 
     agencies may determine, does not include purchasing or 
     selling, or otherwise acquiring or disposing of, stocks, 
     bonds, options, commodities, derivatives, or other financial 
     instruments on behalf of a customer, as part of market making 
     activities, or otherwise in connection with or in 
     facilitation of customer relationships, including risk-
     mitigating hedging activities related to such a purchase, 
     sale, acquisition, or disposal; and
       (C) does not include the investments of a regulated 
     insurance company, or a regulated insurance affiliate or 
     regulated insurance subsidiary thereof, if--
       (i) such investments are in compliance with, and subject 
     to, the insurance company investment laws, regulations, and 
     written guidance of the State or jurisdiction in which each 
     such insurance company is domiciled; and
       (ii) the Federal banking agencies, after consultation with 
     the Council and the relevant insurance commissioners of the 
     States and territories of the United States, have not jointly 
     determined, after notice and comment, that a law, a 
     regulation, or written guidance described in clause (i) is 
     insufficient to accomplish the purposes of this section; and
                                 ______
                                 
  SA 4056. Mr. BOND (for himself, Mr. Dodd, Mr. Warner, Mr. Brown of 
Massachusetts, Ms. Cantwell, Mr. Begich, Mrs. Murray, Mr. Corker, Mr. 
Tester, Mr. Brownback, Mr. Baucus, and Mr. Reid) submitted an amendment 
intended to be proposed to amendment SA 3739 proposed by Mr. Reid (for 
Mr. Dodd (for himself and Mrs. Lincoln)) to the bill S. 3217, to 
promote the financial stability of the United States by improving 
accountability and transparency in the financial system, to end ``too 
big to fail'', to protect the American taxpayer by ending bailouts, to 
protect consumers from abusive financial services practices, and for 
other purposes; as follows:
       On page 387, strike line 13 and all that follows through 
     page 388, line 3, and insert the following:

     SEC. 412. ADJUSTING THE ACCREDITED INVESTOR STANDARD.

       (a) In General.--The Commission shall adjust any net worth 
     standard for an accredited investor, as set forth in the 
     rules of the Commission under the Securities Act of 1933, so 
     that the individual net worth of any natural person, or joint 
     net worth with the spouse of that person, at the time of 
     purchase, is more than $1,000,000 (as such amount is adjusted 
     periodically by rule of the Commission), excluding the value 
     of the primary residence of such natural person, except that 
     during the 4-year period that begins on the date of enactment 
     of this Act, any net worth standard shall be $1,000,000, 
     excluding the value of the primary residence of such natural 
     person.
       (b) Review and Adjustment.--
       (1) Initial review and adjustment.--
       (A) Initial review.--The Commission may undertake a review 
     of the definition of the term ``accredited investor'', as 
     such term applies to natural persons, to determine whether 
     the requirements of the definition, excluding the requirement 
     relating to the net worth standard described in subsection 
     (a), should be adjusted or modified for the protection of 
     investors, in the public interest, and in light of the 
     economy.
       (B) Adjustment or modification.--Upon completion of a 
     review under subparagraph (A), the Commission may, by notice 
     and comment rulemaking, make such adjustments to the 
     definition of the term ``accredited investor'', excluding 
     adjusting or modifying the requirement relating to the net 
     worth standard described in subsection (a), as such term 
     applies to natural persons, as the Commission may deem 
     appropriate for the protection of investors, in the public 
     interest, and in light of the economy.
       (2) Subsequent reviews and adjustment.--
       (A) Subsequent reviews.--Not earlier than 4 years after the 
     date of enactment of this Act, and not less frequently than 
     once every 4 years thereafter, the Commission shall undertake 
     a review of the definition, in its entirety, of the term 
     ``accredited investor'', as defined in section 230.215 of 
     title 17, Code of Federal Regulations, or any successor 
     thereto, as such term applies to natural persons, to 
     determine whether the requirements of the definition should 
     be adjusted or modified for the protection of investors, in 
     the public interest, and in light of the economy.
       (B) Adjustment or modification.--Upon completion of a 
     review under subparagraph (A), the Commission may, by notice 
     and comment rulemaking, make such adjustments to the 
     definition of the term ``accredited investor'', as defined in 
     section 230.215 of title 17, Code of Federal Regulations, or 
     any successor thereto, as such term applies to natural 
     persons, as the Commission may deem appropriate for the 
     protection of investors, in the public interest, and in light 
     of the economy.
       On page 388, line 14, strike ``1 year'' and insert ``3 
     years''.
       On page 998, strike line 12 and all that follows through 
     page 1001, line 25, and insert the following:

     SEC. 926. DISQUALIFYING FELONS AND OTHER ``BAD ACTORS'' FROM 
                   REGULATION D OFFERINGS.

       Not later than 1 year after the date of enactment of this 
     Act, the Commission shall issue rules for the 
     disqualification of offerings and sales of securities made 
     under section 230.506 of title 17, Code of Federal 
     Regulations, that--
       (1) are substantially similar to the provisions of section 
     230.262 of title 17, Code of Federal Regulations, or any 
     successor thereto; and
       (2) disqualify any offering or sale of securities by a 
     person that--
       (A) is subject to a final order of a State securities 
     commission (or an agency or officer of a State performing 
     like functions), a State authority that supervises or 
     examines banks, savings associations, or credit unions, a 
     State insurance commission (or an agency or officer of a 
     State performing like functions), an appropriate Federal 
     banking agency, or the National Credit Union Administration, 
     that--
       (i) bars the person from--

       (I) association with an entity regulated by such 
     commission, authority, agency, or officer;
       (II) engaging in the business of securities, insurance, or 
     banking; or
       (III) engaging in savings association or credit union 
     activities; or

       (ii) constitutes a final order based on a violation of any 
     law or regulation that prohibits fraudulent, manipulative, or 
     deceptive conduct within the 10-year period ending on the 
     date of the filing of the offer or sale; or

[[Page S3840]]

       (B) has been convicted of any felony or misdemeanor in 
     connection with the purchase or sale of any security or 
     involving the making of any false filing with the Commission.
                                 ______
                                 
  SA 4057. Mr. ENZI (for himself and Mr. Corker) submitted an amendment 
intended to be proposed to amendment SA 3739 proposed by Mr. Reid (for 
Mr. Dodd (for himself and Mrs. Lincoln)) to the bill S. 3217, to 
promote the financial stability of the United States by improving 
accountability and transparency in the financial system, to end ``too 
big to fail,'' to protect the American taxpayer by ending bailouts, to 
protect consumers from abusive financial services practices, and for 
other purposes; which was ordered to lie on the table; as follows:

       On page 956, strike line 10 and all that follows through 
     page 957, line 11, and insert the following:

     SEC. 978. FUNDING FOR GOVERNMENTAL ACCOUNTING STANDARDS 
                   BOARD.

       (a) Amendment to Securities Act of 1933.--Section 19 of the 
     Securities Act of 1933 (15 U.S.C. 77s), as amended by section 
     912, is further amended by adding at the end the following:
       ``(g)(1) The Commission may, subject to the limitations 
     imposed by section 15B of the Securities Exchange Act (15 
     U.S.C. 78o-4) require a national securities association 
     registered under the Securities Exchange Act of 1934 to 
     establish--
       ``(A) a reasonable annual accounting support fee to 
     adequately fund the annual budget of the Governmental 
     Accounting Standards Board (hereafter referred to in this 
     subsection as the `GASB'); and
       ``(B) rules and procedures, in consultation with the 
     principal organizations representing State governors, 
     legislators, local elected officials, and State and local 
     finance officers, to provide for the equitable allocation, 
     assessment, and collection of the accounting support fee 
     established under subparagraph (A) from the members of the 
     association, and the remittance of all such accounting 
     support fees to the Financial Accounting Foundation.
       ``(2) Annual budget.--For purpose of this subsection, the 
     annual budget of the GASB is the annual budget reviewed and 
     approved according to the FAF's internal procedures.
       ``(3) Use of funds.--Any funds collected under this 
     subsection shall be used to support the efforts of the GASB 
     to establish standards of financial accounting and reporting 
     recognized as generally accepted accounting principles 
     applicable to State and local governments of the United 
     States.
       ``(4) Limitation on fee.--The annual accounting support 
     fees collected under this subsection for a fiscal year shall 
     not exceed the recoverable annual budgeted expenses of the 
     GASB (which may include operating expenses, capital, and 
     accrued items).
       ``(5) Rules of construction.--
       ``(A) Fees not public monies.--Accounting support fees 
     collected pursuant to this subsection and other receipts of 
     the GASB shall not be considered public monies of the United 
     States.
       ``(B) Limitation on authority of the commission.--Nothing 
     in this subsection shall be construed to--
       ``(i) provide the Commission or any national securities 
     association direct or indirect oversight of GASB's budget or 
     technical agenda; or
       ``(ii) affect the GASB's setting of generally accepted 
     accounting principles.
       ``(C) Noninterference with states.--Nothing in this 
     subsection shall be construed to impair or limit the 
     authority of a State or local government to establish 
     accounting and financial reporting standards.''.
       (b) Study of Funding for Governmental Accounting Standards 
     Board.--
       (1) Study.--The Comptroller General of the United States 
     shall conduct a study that evaluates--
       (A) the role and importance of the Governmental Accounting 
     Standards Board in the municipal securities markets;
       (B) the manner and the level at which the Governmental 
     Accounting Standards Board has been funded;
       (2) Consultation.--In conducting the study required under 
     paragraph (1), the Comptroller General shall consult with the 
     principal organizations representing State governors, 
     legislators, and local elected officials and State and local 
     finance officers.
       (3) Report.--Not later than 180 days after the date of 
     enactment of this Act, the Comptroller General shall submit 
     to the Committee on Banking, Housing, and Urban Affairs of 
     the Senate and the Committee on Financial Services of the 
     House of Representatives a report on the study required under 
     paragraph (1).
                                 ______
                                 
  SA 4058. Mr. SHELBY submitted an amendment intended to be proposed to 
amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself and 
Mrs. Lincoln)) to the bill S. 3217, to promote the financial stability 
of the United States by improving accountability and transparency in 
the financial system, to end ``too big to fail,'' to protect the 
American taxpayer by ending bailouts, to protect consumers from abusive 
financial services practices, and for other purposes; which was ordered 
to lie on the table; as follows:

       On page 1223, line 5, strike ``and'' and all that follows 
     through line 7, and insert the following:
       (8) an Office of Management and Budget (hereafter in this 
     section referred to as ``OMB'') analysis of the economic 
     impact of all rules and orders adopted by the Bureau, as well 
     as other initiatives conducted by the Bureau, during the 
     preceding year, which shall include--
       (A) the total costs of such rules, orders, and initiatives;
       (B) the annual impact on employment, both nationally and by 
     State;
       (C) the estimated time for covered persons to comply with 
     such rules, orders, and initiatives, both on average and by 
     size of business covered; and
       (D) the number of persons affected by each such rule, 
     order, and initiative;
       (9) an OMB analysis of the economic impact of all statutes, 
     rules, regulations, and orders related to this Act, which 
     shall include--
       (A) a statement of the need for the proposed action and an 
     analysis of whether there exists a market failure;
       (B) an examination of alternative approaches, including a 
     baseline case of not taking the regulatory action;
       (C) a statement of the plausible scenarios for which the 
     proposed action could lead to a Government failure;
       (D) the total costs of all such rules and orders;
       (E) the annual impact on employment nationally, by State, 
     and by industry;
       (F) the estimated time for covered persons to comply with 
     all such rules, orders, and initiatives both on average and 
     by size of business covered;
       (G) the number of persons affected by each such rule, 
     order, and initiative;
       (H) an analysis of estimated effects on market efficiency 
     and market competition, including a Regulatory Flexibility 
     Act (5 U.S.C. chapter 6) analysis to assess the impact on 
     small business and other small entities;
       (I) an analysis of estimated effects on United States 
     economic growth, United States economic competitiveness, and 
     international trade;
       (J) a Paperwork Reduction Act (44 U.S.C. chapter 35) 
     analysis;
       (K) a report of the precision of estimates and a statement 
     of the key assumptions;
       (L) a sensitivity analysis, based on plausible alternative 
     assumptions for data, methodologies, and assumed levels of 
     compliance and enforcement;
       (M) any other economic analysis of regulatory actions 
     required by Executive Order by the President of the United 
     States;
       (10) the annual compensation received by employees of the 
     Bureau, including the total, the average, and the number of 
     employees receiving salaries in excess of $100,000 and 
     $200,000 and such calculation of compensation shall include 
     the value of all non-salary compensation (including flex-
     time, vacation time, retirement benefits, and collective 
     bargaining benefits);
       (11) a copy of any collective bargaining agreements, or 
     amendments to such agreements, entered into between the 
     Bureau and its union during the preceding year;
       (12) an analysis of the effectiveness of the Bureau, 
     including evidence on whether each rule and regulation it has 
     adopted during the preceding 10 years have produced a 
     reduction in consumer complaints;
       (13) a copy of any agreements with State attorneys, State 
     regulators, private attorneys, or any other person or entity 
     relating to the enforcement of consumer financial protection 
     laws; and
       (14) an analysis of the efforts of the Bureau to fulfill 
     the fair lending mission of the Bureau.
       (d) Annual Review of Rules and Regulations.--
       (1) In general.--OMB shall review, on a rolling-basis each 
     statute, rule, regulation, and order related to this Act, to 
     determine whether such statute, rule, regulation, order has 
     achieved its intended result and whether such statute, rule, 
     regulation, or order should be modified or repealed based on 
     changes in the marketplace. Each such statute, rule, 
     regulation, and order shall be reviewed not less frequently 
     than once every 8 years.
       (2) Report.--In connection with the review required under 
     paragraph (1), OMB shall annually produce a report discussing 
     its findings, including--
       (A) providing evidence on whether each statute, rule, 
     regulation, or order under review should be retained, 
     modified, or repealed;
       (B) a discussion of the original intent of each statute, 
     rule, regulation, and order;
       (C) an analysis of whether each such statute, rule, 
     regulation, and order achieved its intended results; and
       (D) a cost benefit analysis of such statute, rule, 
     regulation, and order that estimates the actual costs imposed 
     on the private sector, compared to the actual benefits to the 
     private sector attained, which cost benefit analysis shall 
     include the costs of complying with such statute, rule, 
     regulation, and order, the impact on innovation, and actual 
     litigation costs incurred by private and governmental parties 
     in litigating such statute and regulation.
       (3) Notice to bureau.--If OMB determines under paragraph 
     (2) that any regulation has

[[Page S3841]]

     not yielded a positive cost-benefit result, the Bureau shall 
     be promptly repealed such regulation or modify such 
     regulation so that it is estimated to produce a positive 
     cost-benefit result.
       (4) Notice to congress.--If OMB determines under paragraph 
     (2) that any statute has not yielded a positive cost-benefit 
     result, OMB shall notify Congress and provide a 
     recommendation on whether the statute should be repealed or 
     modified to produce a positive cost-benefit result.
                                 ______
                                 
  SA 4059. Mr. REID (for Mrs. Lincoln (for herself, Mr. Chambliss, Mr. 
Cochran, and Mr. Brown of Ohio)) submitted an amendment intended to be 
proposed to amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for 
himself and Mrs. Lincoln)) to the bill S. 3217, to promote the 
financial stability of the United States by improving accountability 
and transparency in the financial system, to end ``too big to fail'', 
to protect the American taxpayer by ending bailouts, to protect 
consumers from abusive financial services practices, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 565, between lines 2 and 3, insert the following:
       (e) Preservation of Other Regulatory Authority.--Section 
     2(a)(1)(C) of the Commodity Exchange Act (7 U.S.C. 
     2(a)(1)(C)) (as amended by section 717(a)) is amended by 
     adding at the end the following:
       ``(vi) No provision of this Act shall be construed--

       ``(I) to supersede or limit the authority of the Federal 
     Energy Regulatory Commission under the Federal Power Act (16 
     U.S.C. 791a et seq.) or the Natural Gas Act (15 U.S.C. 717 et 
     seq.);
       ``(II) to restrict the Federal Energy Regulatory Commission 
     from carrying out the duties and responsibilities of the 
     Federal Energy Regulatory Commission under the Acts described 
     in subclause (I);
       ``(III) to affect the authority of the Federal Energy 
     Regulatory Commission to approve, deny, or otherwise permit 
     any rate or charge made, demanded, or received by any public 
     utility or natural gas company for the transportation or sale 
     of electric energy or natural gas subject to the jurisdiction 
     of the Federal Energy Regulatory Commission; or
       ``(IV) to supersede or limit the authority of a State 
     regulatory commission that has jurisdiction to regulate rates 
     and charges for the transmission or sale of electric energy 
     within the State, or restrict that State regulatory 
     commission from carrying out the duties and responsibilities 
     of the State regulatory commission pursuant to the 
     jurisdiction of the State regulatory commission to regulate 
     rates and charges for the transmission or sale of electric 
     energy.

       ``(vii) Nothing in clause (vi) shall affect the 
     Commission's exclusive jurisdiction under subparagraph (A) 
     with respect to the trading, execution, or clearing of any 
     agreement, contract, or transaction on or subject to the 
     rules of a registered entity, including a designated contract 
     market, derivatives clearing organization, or swap execution 
     facility.''.
       (f) Public Interest Waiver.--Section 4(c) of the Commodity 
     Exchange Act (7 U.S.C. 6(c)) (as amended by section 721(d)) 
     is amended by adding at the end the following:
       ``(6) If the Commission determines that the exemption would 
     be consistent with the public interest and the purposes of 
     this Act, the Commission shall, in accordance with paragraphs 
     (1) and (2), exempt from the requirements of this Act an 
     agreement, contract, or transaction that is entered into--
       ``(A) pursuant to a tariff or rate schedule approved or 
     permitted to take effect by the Federal Energy Regulatory 
     Commission;
       ``(B) pursuant to a tariff or rate schedule establishing 
     rates or charges for, or protocols governing, the sale of 
     electric energy approved or permitted to take effect by the 
     regulatory body of the State or municipality having 
     jurisdiction to regulate rates and charges for the sale of 
     electric energy within the State or municipality; or
       ``(C) between entities described in section 201(f) of the 
     Federal Power Act (16 U.S.C. 824(f)).
       ``(7)(A) Any person may apply to the Commission for an 
     exemption from the requirements of this Act with respect to 
     an agreement, contract, or transaction described in paragraph 
     (6).
       ``(B) Not later than 1 business day after the date of 
     receipt of an application described in subparagraph (A), the 
     Commission shall notify, and provide a copy of the 
     application to--
       ``(i) the Federal Energy Regulatory Commission; and
       ``(ii) with respect to an application filed with respect to 
     paragraph (6)(B), the relevant State regulatory body or 
     municipality.
       ``(C) The Commission shall provide not less than a 30-day 
     period for public comment with respect to any application 
     described in subparagraph (A).
       ``(D)(i) Not later than the date on which the public 
     comment period described in subparagraph (C) expires, the 
     Federal Energy Regulatory Commission (and the relevant State 
     regulatory body or municipality with respect to an 
     application filed with respect to paragraph (6)(B)) may 
     provide to the Commission a recommendation regarding the 
     application for exemption.
       ``(ii) The Commission shall give due consideration to any 
     recommendation described in clause (i).
       ``(E) Not later than 120 days after the date of receipt of 
     an application described in subparagraph (A), the Commission 
     shall, by order--
       ``(i) grant an exemption in accordance with paragraph (6); 
     or
       ``(ii) provide to the applicant a document that contains a 
     description of each reason relied on by the Commission for 
     not granting an exemption.''.
                                 ______
                                 
  SA 4060. Mr. BROWN of Massachusetts submitted an amendment intended 
to be proposed to amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd 
(for himself and Mrs. Lincoln)) to the bill S. 3217, to promote the 
financial stability of the United States by improving accountability 
and transparency in the financial system, to end ``too big to fail'', 
to protect the American taxpayer by ending bailouts, to protect 
consumers from abusive financial services practices, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 485, strike line 1 and all that follows through 
     page 489, line 13, and insert the following:
       (2) the term ``insured depository institution'' does not 
     include an institution described in section 2(c)(2)(D) of the 
     Bank Holding Company Act of 1956 (12 U.S.C. 1841(c)(2)(D));
       (3) the term ``proprietary trading''--
       (A) means purchasing or selling, or otherwise acquiring or 
     disposing of, stocks, bonds, options, commodities, 
     derivatives, or other financial instruments by an insured 
     depository institution, a company that controls, directly or 
     indirectly, an insured depository institution or is treated 
     as a bank holding company for purposes of the Bank Holding 
     Company Act of 1956 (12 U.S.C. 1841 et seq.), and any 
     subsidiary of such institution or company, for the trading 
     book (or such other portfolio as the Federal banking agencies 
     may determine) of such institution, company, or subsidiary;
       (B) subject to such restrictions as the Federal banking 
     agencies may determine, does not include purchasing or 
     selling, or otherwise acquiring or disposing of, stocks, 
     bonds, options, commodities, derivatives, or other financial 
     instruments on behalf of a customer, as part of market making 
     activities, or otherwise in connection with or in 
     facilitation of customer relationships, including risk-
     mitigating hedging activities related to such a purchase, 
     sale, acquisition, or disposal; and
       (C) does not include the investments of a regulated 
     insurance company, or a regulated insurance affiliate or 
     regulated insurance subsidiary thereof, if--
       (i) such investments are in compliance with, and subject 
     to, the insurance company investment laws, regulations, and 
     written guidance of the State or jurisdiction in which each 
     such insurance company is domiciled; and
       (ii) the Federal banking agencies, after consultation with 
     the Council and the relevant insurance commissioners of the 
     States and territories of the United States, have not jointly 
     determined, after notice and comment, that a law, a 
     regulation, or written guidance described in clause (i) is 
     insufficient to accomplish the purposes of this section; and
       (4) the term ``sponsoring'', when used with respect to a 
     hedge fund or private equity fund, means--
       (A) serving as a general partner, managing member, or 
     trustee of the fund;
       (B) in any manner selecting or controlling (or having 
     employees, officers, directors, or agents who constitute) a 
     majority of the directors, trustees, or management of the 
     fund; or
       (C) sharing with the fund, for corporate, marketing, 
     promotional, or other purposes, the same name or a variation 
     of the same name.
       (b) Prohibition on Proprietary Trading.--
       (1) In general.--Subject to the recommendations and 
     modifications of the Council under subsection (g), and except 
     as provided in paragraph (2) or (3), the appropriate Federal 
     banking agencies shall, through a rulemaking under subsection 
     (g), jointly prohibit proprietary trading by an insured 
     depository institution, a company that controls, directly or 
     indirectly, an insured depository institution or is treated 
     as a bank holding company for purposes of the Bank Holding 
     Company Act of 1956 (12 U.S.C. 1841 et seq.), and any 
     subsidiary of such institution or company.
       (2) Excepted obligations.--
       (A) In general.--The prohibition under this subsection 
     shall not apply with respect to an investment that is 
     otherwise authorized by Federal law in--
       (i) obligations of the United States or any agency of the 
     United States, including obligations fully guaranteed as to 
     principal and interest by the United States or an agency of 
     the United States;
       (ii) obligations, participations, or other instruments of, 
     or issued by, the Government National Mortgage Association, 
     the Federal

[[Page S3842]]

     National Mortgage Association, or the Federal Home Loan 
     Mortgage Corporation, including obligations fully guaranteed 
     as to principal and interest by such entities; and
       (iii) obligations of any State or any political subdivision 
     of a State.
       (B) Conditions.--The appropriate Federal banking agencies 
     may impose conditions on the conduct of investments described 
     in subparagraph (A).
       (C) Rule of construction.--Nothing in subparagraph (A) may 
     be construed to grant any authority to any person that is not 
     otherwise provided in Federal law.
       (3) Foreign activities.--An investment or activity 
     conducted by a company pursuant to paragraph (9) or (13) of 
     section 4(c) of the Bank Holding Company Act of 1956 (12 
     U.S.C. 1843(c)) solely outside of the United States shall not 
     be subject to the prohibition under paragraph (1), provided 
     that the company is not directly or indirectly controlled by 
     a company that is organized under the laws of the United 
     States or of a State.
       (c) Prohibition on Sponsoring and Investing in Hedge Funds 
     and Private Equity Funds.--
       (1) In general.--Except as provided in paragraph (2), and 
     subject to the recommendations and modifications of the 
     Council under subsection (g), the appropriate Federal banking 
     agencies shall, through a rulemaking under subsection (g), 
     jointly prohibit an insured depository institution, a company 
     that controls, directly or indirectly, an insured depository 
     institution or is treated as a bank holding company for 
     purposes of the Bank Holding Company Act of 1956 (12 U.S.C. 
     1841 et seq.), or any subsidiary of such institution or 
     company, from sponsoring or investing in a hedge fund or a 
     private equity fund.
       (2) Application to foreign activities of foreign firms.--An 
     investment or activity conducted by a company pursuant to 
     paragraph (9) or (13) of section 4(c) of the Bank Holding 
     Company Act of 1956 (12 U.S.C. 1843(c)) solely outside of the 
     United States shall not be subject to the prohibitions and 
     restrictions under paragraph (1), provided that the company 
     is not directly or indirectly controlled by a company that is 
     organized under the laws of the United States or of a State.
       (3) Exception.--Notwithstanding paragraph (1), an insured 
     depository institution, a company that controls, directly or 
     indirectly, an insured depository institution or is treated 
     as a bank holding company for purposes of the Bank Holding 
     Company Act of 1956 (12 U.S.C. 1841 et seq.), or any 
     subsidiary of such institution or company may sponsor or 
     invest in a hedge fund or a private equity fund, if--
       (A) such institution, company, or subsidiary provides 
     trust, fiduciary, or advisory services to the fund;
       (B) the fund is sponsored and offered in connection with 
     the provision of trust, fiduciary, or advisory services by 
     such institution, company, or subsidiary to persons who are, 
     or may be, customers or clients of such institution, company, 
     or subsidiary;
       (C) such institution, company, or subsidiary--
       (i) does not acquire or retain an equity, partnership, or 
     ownership interest in the fund; or
       (ii) acquires or retains an equity, partnership, or 
     ownership interest, if--

       (I) on the date that is 12 months after the date on which 
     the fund is established, the equity, partnership, or 
     ownership interest is not greater than 5 percent of the total 
     equity of the fund; and
       (II) the aggregate equity investments by such institution, 
     company, or subsidiary in the fund do not exceed 5 percent of 
     Tier 1 capital of such institution, company, or subsidiary;

       (D) such institution, company, or subsidiary does not enter 
     into or otherwise engage in any transaction with the fund 
     that is a covered transaction, as defined in section 23A of 
     the Federal Reserve Act (12 U.S.C. 371c), except on terms and 
     under circumstances specified in section 23B of the Federal 
     Reserve Act (12 U.S.C. 371c-1);
       (E) the obligations of the fund are not guaranteed, 
     directly or indirectly, by such institution, company, or 
     subsidiary any affiliate of such institution, company, or 
     subsidiary; and
       (F) such institution, company, or subsidiary does not share 
     with the fund, for corporate, marketing, promotional, or 
     other purposes, the same name or a variation of the same 
     name.
                                 ______
                                 
  SA 4061. Mr. CHAMBLISS submitted an amendment intended to be proposed 
to amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself 
and Mrs. Lincoln)) to the bill S. 3217, to promote the financial 
stability of the United States by improving accountability and 
transparency in the financial system, to end ``too big to fail'', to 
protect the American taxpayer by ending bailouts, to protect consumers 
from abusive financial services practices, and for other purposes; 
which was ordered to lie on the table; as follows:

       Beginning on page 539, strike line 14 and all that follows 
     through page 584, line 7, and insert the following:
       ``(33) Major swap participant.--
       ``(A) In general.--The term `major swap participant' means 
     any person who is not a swap dealer, and--
       ``(i)(I) maintains a substantial net position in swaps for 
     any of the major swap categories as determined by the 
     Commission, excluding--

       ``(aa) positions held for hedging or mitigating commercial 
     risk, including operating risk and balance sheet risk, of 
     such person or its affiliates; and
       ``(bb) positions maintained by any employee benefit plan 
     (or any contract held by such a plan) as defined in 
     paragraphs (3) and (32) of section 3 of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1002) for 
     the primary purpose of hedging or mitigating any risk 
     directly associated with the operation of the plan; and

       ``(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
       ``(ii)(I) is a financial entity, other than an entity 
     predominantly engaged in providing customer financing for the 
     purchase of an affiliate's merchandise or manufactured goods, 
     that is highly leveraged relative to the amount of capital it 
     holds;
       ``(II) maintains a substantial net position in outstanding 
     swaps in any major swap category as determined by the 
     Commission; and
       ``(III) 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.
       ``(B) Definition of substantial net position.--For purposes 
     of subparagraph (A), the Commission shall define by rule or 
     regulation the term `substantial net position' to mean a 
     position after application of legally enforceable netting or 
     collateral arrangements that meets a threshold the Commission 
     determines to be prudent for the effective monitoring, 
     management, and oversight of entities that are systemically 
     important or can significantly impact the financial system of 
     the United States.
       ``(C) Scope of designation.--For purposes of subparagraph 
     (A), a person may be designated as a major swap participant 
     for 1 or more categories of swaps without being classified as 
     a major swap participant for all classes of swaps.
       ``(D) Capital.--In setting capital requirements for a 
     person that is designated as a major swap participant for a 
     single type or single class or category of swaps or 
     activities, the prudential regulator and the Commission shall 
     take into account the risks associated with other types of 
     swaps or classes of swaps or categories of swaps engaged in 
     by virtue of the status of the person as a major swap 
     participant.'';
       (17) by inserting after paragraph (38) (as redesignated by 
     paragraph (1)) the following:
       ``(39) Prudential regulator.--The term `prudential 
     regulator' means--
       ``(A) the Office of the Comptroller of the Currency, in the 
     case of--
       ``(i) any national banking association;
       ``(ii) any Federal branch or agency of a foreign bank; or
       ``(iii) any Federal savings association;
       ``(B) the Federal Deposit Insurance Corporation, in the 
     case of--
       ``(i) any insured State bank;
       ``(ii) any foreign bank having an insured branch; or
       ``(iii) any State savings association;
       ``(C) the Board of Governors of the Federal Reserve System, 
     in the case of--
       ``(i) any noninsured State member bank;
       ``(ii) any branch or agency of a foreign bank with respect 
     to any provision of the Federal Reserve Act (12 U.S.C. 221 et 
     seq.) which is made applicable under the International 
     Banking Act of 1978 (12 U.S.C. 3101 et seq.);
       ``(iii) any foreign bank which does not operate an insured 
     branch;
       ``(iv) any agency or commercial lending company other than 
     a Federal agency; or
       ``(v) supervisory or regulatory proceedings arising from 
     the authority given to the Board of Governors under section 
     7(c)(1) of the International Banking Act of 1978 (12 U.S.C. 
     3105(c)(1)), including such proceedings under the Financial 
     Institutions Supervisory Act of 1966 (12 U.S.C. 1464 et 
     seq.); and
       ``(D) the Farm Credit Administration, in the case of a swap 
     dealer, major swap participant, security-based swap dealer, 
     or major security-based swap participant that is an 
     institution chartered under the Farm Credit Act of 1971 (12 
     U.S.C. 2001 et seq.).'';
       (18) in paragraph (40) (as redesignated by paragraph (1))--
       (A) by striking subparagraph (B);
       (B) by redesignating subparagraphs (C), (D), and (E) as 
     subparagraphs (B), (C), and (F), respectively;
       (C) in subparagraph (C) (as so redesignated), by striking 
     ``and'';
       (D) by inserting after subparagraph (C) (as so 
     redesignated) the following:
       ``(D) a swap execution facility registered under section 
     5h;
       ``(E) a swap data repository; and'';
       (19) by inserting after paragraph (41) (as redesignated by 
     paragraph (1)) the following:
       ``(42) Security-based swap.--The term `security-based swap' 
     has the meaning given the term in section 3(a) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).
       ``(43) Security-based swap dealer.--The term `security-
     based swap dealer' has the meaning given the term in section 
     3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 
     78c(a)).'';

[[Page S3843]]

       (20) in paragraph (46) (as redesignated by paragraph (1)), 
     by striking ``subject to section 2(h)(7)'' and inserting 
     ``subject to section 2(h)(5)'';
       (21) by inserting after paragraph (46) (as redesignated by 
     paragraph (1)) the following:
       ``(47) Swap.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the term `swap' means any agreement, contract, or 
     transaction--
       ``(i) that is a put, call, cap, floor, collar, or similar 
     option of any kind that is for the purchase or sale, or based 
     on the value, of 1 or more interest or other rates, 
     currencies, commodities, securities, instruments of 
     indebtedness, indices, quantitative measures, or other 
     financial or economic interests or property of any kind;
       ``(ii) that provides for any purchase, sale, payment, or 
     delivery (other than a dividend on an equity security) that 
     is dependent on the occurrence, nonoccurrence, or the extent 
     of the occurrence of an event or contingency associated with 
     a potential financial, economic, or commercial consequence;
       ``(iii) that provides on an executory basis for the 
     exchange, on a fixed or contingent basis, of 1 or more 
     payments based on the value or level of 1 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--

       ``(I) an interest rate swap;
       ``(II) a rate floor;
       ``(III) a rate cap;
       ``(IV) a rate collar;
       ``(V) a cross-currency rate swap;
       ``(VI) a basis swap;
       ``(VII) a currency swap;
       ``(VIII) a foreign exchange swap;
       ``(IX) a total return swap;
       ``(X) an equity index swap;
       ``(XI) an equity swap;
       ``(XII) a debt index swap;
       ``(XIII) a debt swap;
       ``(XIV) a credit spread;
       ``(XV) a credit default swap;
       ``(XVI) a credit swap;
       ``(XVII) a weather swap;
       ``(XVIII) an energy swap;
       ``(XIX) a metal swap;
       ``(XX) an agricultural swap;
       ``(XXI) an emissions swap; and
       ``(XXII) a commodity swap;

       ``(iv) that is an agreement, contract, or transaction that 
     is, or in the future becomes commonly known to the trade as a 
     swap;
       ``(v) including any security-based swap agreement which 
     meets the definition of `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; or
       ``(vi) that is any combination or permutation of, or option 
     on, any agreement, contract, or transaction described in any 
     of clauses (i) through (v).
       ``(B) Exclusions.--The term `swap' does not include--
       ``(i) any contract of sale of a commodity for future 
     delivery (or option on such a contract), leverage contract 
     authorized under section 19, security futures product, or 
     agreement, contract, or transaction described in section 
     2(c)(2)(C)(i) or section 2(c)(2)(D)(i);
       ``(ii) any sale of a nonfinancial commodity or security for 
     deferred shipment or delivery, so long as the transaction is 
     intended to be physically settled;
       ``(iii) any put, call, straddle, option, or privilege on 
     any security, certificate of deposit, or group or index of 
     securities, including any interest therein or based on the 
     value thereof, that is subject to--

       ``(I) the Securities Act of 1933 (15 U.S.C. 77a et seq.); 
     and
       ``(II) the Securities Exchange Act of 1934 (15 U.S.C. 78a 
     et seq.);

       ``(iv) any put, call, straddle, option, or privilege 
     relating to a foreign currency entered into on a national 
     securities exchange registered pursuant to section 6(a) of 
     the Securities Exchange Act of 1934 (15 U.S.C. 78f(a));
       ``(v) any agreement, contract, or transaction providing for 
     the purchase or sale of 1 or more securities on a fixed basis 
     that is subject to--

       ``(I) the Securities Act of 1933 (15 U.S.C. 77a et seq.); 
     and
       ``(II) the Securities Exchange Act of 1934 (15 U.S.C. 78a 
     et seq.);

       ``(vi) any agreement, contract, or transaction providing 
     for the purchase or sale of 1 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 the agreement, 
     contract, or transaction predicates the purchase or sale on 
     the occurrence of a bona fide contingency that might 
     reasonably be expected to affect or be affected by the 
     creditworthiness of a party other than a party to the 
     agreement, contract, or transaction;
       ``(vii) any note, bond, or evidence of indebtedness that is 
     a security, as defined in section 2(a) of the Securities Act 
     of 1933 (15 U.S.C. 77b(a));
       ``(viii) any agreement, contract, or transaction that is--

       ``(I) based on a security; and
       ``(II) entered into directly or through an underwriter (as 
     defined in section 2(a) of the Securities Act of 1933 (15 
     U.S.C. 77b(a))) by the issuer of such security for the 
     purposes of raising capital, unless the agreement, contract, 
     or transaction is entered into to manage a risk associated 
     with capital raising;

       ``(ix) any agreement, contract, or transaction a 
     counterparty of which is a Federal Reserve bank, the Federal 
     Government, or a Federal agency that is expressly backed by 
     the full faith and credit of the United States; and
       ``(x) any security-based swap, other than a security-based 
     swap as described in subparagraph (D).
       ``(C) Rule of construction regarding master agreements.--
       ``(i) In general.--Except as provided in clause (ii), the 
     term `swap' includes a master agreement that provides for an 
     agreement, contract, or transaction that is a swap under 
     subparagraph (A), together with each supplement to any master 
     agreement, without regard to whether the master agreement 
     contains an agreement, contract, or transaction that is not a 
     swap pursuant to subparagraph (A).
       ``(ii) Exception.--For purposes of clause (i), the master 
     agreement shall be considered to be a swap only with respect 
     to each agreement, contract, or transaction covered by the 
     master agreement that is a swap pursuant to subparagraph (A).
       ``(D) Mixed swap.--The term `security-based swap' includes 
     any agreement, contract, or transaction that is as described 
     in section 3(a)(68)(A) of the Securities Exchange Act of 1934 
     (15 U.S.C. 78c(a)(68)(A)) and also is based on the value of 1 
     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)).
       ``(E) Treatment of foreign exchange swaps and forwards.--
       ``(i) In general.--Foreign exchange swaps and foreign 
     exchange forwards shall be considered swaps under this 
     paragraph unless the Secretary makes a written determination 
     that either foreign exchange swaps or foreign exchange 
     forwards or both--

       ``(I) should be not be regulated as swaps under this Act; 
     and
       ``(II) are not structured to evade the Wall Street 
     Transparency and Accountability Act of 2010 in violation of 
     any rule promulgated by the Commission pursuant to section 
     111(c) of that Act.

       ``(ii) Congressional notice; effectiveness.--The Secretary 
     shall submit any written determination under clause (i) to 
     the appropriate committees of Congress, including the 
     Committee on Agriculture, Nutrition, and Forestry of the 
     Senate and the Committee on Agriculture of the House of 
     Representatives. Any such written determination by the 
     Secretary shall not be effective until it is submitted to the 
     appropriate committees of Congress.
       ``(iii) Reporting.--Notwithstanding a written determination 
     by the Secretary under clause (i), all foreign exchange swaps 
     and foreign exchange forwards shall be reported to either a 
     swap data repository, or, if there is no swap data repository 
     that would accept such swaps or forwards, to the Commission 
     pursuant to section 4r within such time period as the 
     Commission may by rule or regulation prescribe.
       ``(iv) Business standards.--Notwithstanding clauses (ix) 
     and (x) of subparagraph (B) and clause (ii), any party to a 
     foreign exchange swap or forward that is a swap dealer or 
     major swap participant shall conform to the business conduct 
     standards contained in section 4s(h).
       ``(v) Secretary.--For purposes of this subparagraph only, 
     the term `Secretary' means the Secretary of the Treasury.
       ``(F) Exception for certain foreign exchange swaps and 
     forwards.--
       ``(i) Registered entities.--Any foreign exchange swap and 
     any foreign exchange forward that is listed and traded on or 
     subject to the rules of a designated contract market or a 
     swap execution facility, or that is cleared by a derivatives 
     clearing organization shall not be exempt from any provision 
     of this Act or amendments made by the Wall Street 
     Transparency and Accountability Act of 2010 prohibiting fraud 
     or manipulation.
       ``(ii) Retail transactions.--Nothing in subparagraph (E) 
     shall affect, or be construed to affect, the applicability of 
     this Act or the jurisdiction of the Commission with respect 
     to agreements, contracts, or transactions in foreign currency 
     pursuant to section 2(c)(2).
       ``(48) Swap data repository.--The term `swap data 
     repository' means any person that collects, calculates, 
     prepares, or maintains information or records with respect to 
     transactions or positions in, or the terms and conditions of, 
     swaps entered into by third parties.
       ``(49) Swap dealer.--
       ``(A) In general.--The term `swap dealer' means any person 
     who--

[[Page S3844]]

       ``(i) holds itself out as a dealer in swaps;
       ``(ii) makes a market in swaps;
       ``(iii) regularly engages in the purchase and sale of swaps 
     to customers as its ordinary course of business; and
       ``(iv) engages in any activity causing the person to be 
     commonly known in the trade as a dealer or market maker in 
     swaps.
       ``(B) Inclusion.--A person may be designated as a swap 
     dealer for a single type or single class or category of swap 
     or activities and considered not to be a swap dealer for 
     other types, classes, or categories of swaps or activities.
       ``(C) Capital.--In setting capital requirements for a 
     person that is designated as a swap dealer for a single type 
     or single class or category of swap or activities, the 
     prudential regulator and the Commission shall take into 
     account the risks associated with other types of swaps or 
     classes of swaps or categories of swaps engaged in by virtue 
     of the status of the person as a swap dealer.
       ``(D) Exception.--The term `swap dealer' does not include a 
     person that buys or sells swaps for such person's own 
     account, either individually or in a fiduciary capacity, or 
     on behalf of any affiliates of such person, unless it does so 
     as a market maker and as a part of a regular business.
       ``(50) Swap execution facility.--The term `swap execution 
     facility' means a facility in which multiple participants 
     have the ability to execute or trade swaps by accepting bids 
     and offers made by other participants that are open to 
     multiple participants in the facility or system, through any 
     means of interstate commerce, including any trading facility, 
     that--
       ``(A) facilitates the execution of swaps between persons; 
     and
       ``(B) is not a designated contract market.''; and
       (22) in paragraph (51) (as redesignated by paragraph (1)), 
     in subparagraph (A)(i), by striking ``partipants'' and 
     inserting ``participants''.
       (b) Authority to Define Terms.--The Commodity Futures 
     Trading Commission may adopt a rule to define--
       (1) the term ``commercial risk''; and
       (2) any other term included in an amendment to the 
     Commodity Exchange Act (7 U.S.C. 1 et seq.) made by this 
     subtitle.
       (c) Modification of Definitions.--To include transactions 
     and entities that have been structured to evade this subtitle 
     (or an amendment made by this subtitle), the Commodity 
     Futures Trading Commission shall adopt a rule to further 
     define the terms ``swap'', ``swap dealer'', ``major swap 
     participant'', and ``eligible contract participant''.
       (d) Exemptions.--Section 4(c)(1) of the Commodity Exchange 
     Act (7 U.S.C. 6(c)(1)) is amended by striking ``except that'' 
     and all that follows through the period at the end and 
     inserting the following: ``except that--
       ``(A) unless the Commission is expressly authorized by any 
     provision described in this subparagraph to grant exemptions, 
     with respect to amendments made by subtitle A of the Wall 
     Street Transparency and Accountability Act of 2010--
       ``(i) with respect to--

       ``(I) paragraphs (2), (3), (4), (5), and (7), clause 
     (vii)(III) of paragraph (17), paragraphs (23), (24), (31), 
     (32), (38), (39), (41), (42), (46), (47), (48), and (49) of 
     section 1a, and sections 2(a)(13), 2(c)(D), 4a(a), 4a(b), 
     4d(c), 4d(d), 4r, 4s, 5b(a), 5b(b), 5(d), 5(g), 5(h), 5b(c), 
     5b(i), 8e, and 21; and
       ``(II) section 206(e) of the Gramm-Leach-Bliley Act (Public 
     Law 106-102; 15 U.S.C. 78c note); and

       ``(ii) in subsection (c) of section 111 and section 132; 
     and
       ``(B) the Commission and the Securities and Exchange 
     Commission may by rule, regulation, or order jointly exclude 
     any agreement, contract, or transaction from section 
     2(a)(1)(D)) if the Commission determines that the exemption 
     would be consistent with the public interest.''.
       (e) Conforming Amendments.--
       (1) Section 2(c)(2)(B)(i)(II) of the Commodity Exchange Act 
     (7 U.S.C. 2(c)(2)(B)(i)(II)) is amended--
       (A) in item (cc)--
       (i) in subitem (AA), by striking ``section 1a(20)'' and 
     inserting ``section 1a''; and
       (ii) in subitem (BB), by striking ``section 1a(20)'' and 
     inserting ``section 1a''; and
       (B) in item (dd), by striking ``section 1a(12)(A)(ii)'' and 
     inserting ``section 1a(18)(A)(ii)''.
       (2) Section 4m(3) of the Commodity Exchange Act (7 U.S.C. 
     6m(3)) is amended by striking ``section 1a(6)'' and inserting 
     ``section 1a''.
       (3) Section 4q(a)(1) of the Commodity Exchange Act (7 
     U.S.C. 6o-1(a)(1)) is amended by striking ``section 1a(4)'' 
     and inserting ``section 1a(9)''.
       (4) Section 5(e)(1) of the Commodity Exchange Act (7 U.S.C. 
     7(e)(1)) is amended by striking ``section 1a(4)'' and 
     inserting ``section 1a(9)''.
       (5) Section 5a(b)(2)(F) of the Commodity Exchange Act (7 
     U.S.C. 7a(b)(2)(F)) is amended by striking ``section 1a(4)'' 
     and inserting ``section 1a(9)''.
       (6) Section 5b(a) of the Commodity Exchange Act (7 U.S.C. 
     7a-1(a)) is amended, in the matter preceding paragraph (1), 
     by striking ``section 1a(9)'' and inserting ``section 1a''.
       (7) Section 5c(c)(2)(B) of the Commodity Exchange Act (7 
     U.S.C. 7a-2(c)(2)(B)) is amended by striking ``section 
     1a(4)'' and inserting ``section 1a(9)''.
       (8) Section 6(g)(5)(B)(i) of the Securities Exchange Act of 
     1934 (15 U.S.C. 78f(g)(5)(B)(i)) is amended--
       (A) in subclause (I), by striking ``section 1a(12)(B)(ii)'' 
     and inserting ``section 1a(18)(B)(ii)''; and
       (B) in subclause (II), by striking ``section 1a(12)'' and 
     inserting ``section 1a(18)''.
       (9) The Legal Certainty for Bank Products Act of 2000 (7 
     U.S.C. 27 et seq.) is amended--
       (A) in section 402--
       (i) in subsection (a)(7), by striking ``section 1a(20)'' 
     and inserting ``section 1a'';
       (ii) in subsection (b)(2), by striking ``section 1a(12)'' 
     and inserting ``section 1a'';
       (iii) in subsection (c), by striking ``section 1a(4)'' and 
     inserting ``section 1a''; and
       (iv) in subsection (d)--

       (I) in the matter preceding paragraph (1), by striking 
     ``section 1a(4)'' and inserting ``section 1a(9)'';
       (II) in paragraph (1)--

       (aa) in subparagraph (A), by striking ``section 1a(12)'' 
     and inserting ``section 1a''; and
       (bb) in subparagraph (B), by striking ``section 1a(33)'' 
     and inserting ``section 1a'';

       (III) in paragraph (2)--

       (aa) in subparagraph (A), by striking ``section 1a(10)'' 
     and inserting ``section 1a'';
       (bb) in subparagraph (B), by striking ``section 
     1a(12)(B)(ii)'' and inserting ``section 1a(18)(B)(ii)'';
       (cc) in subparagraph (C), by striking ``section 1a(12)'' 
     and inserting ``section 1a(18)''; and
       (dd) in subparagraph (D), by striking ``section 1a(13)'' 
     and inserting ``section 1a''; and
       (B) in section 404(1), by striking ``section 1a(4)'' and 
     inserting ``section 1a''.

     SEC. 722. JURISDICTION.

       (a) Exclusive Jurisdiction.--Section 2(a)(1)(A) of the 
     Commodity Exchange Act (7 U.S.C. 2(a)(1)(A)) is amended in 
     the first sentence--
       (1) by inserting ``the Wall Street Transparency and 
     Accountability Act of 2010 (including an amendment made by 
     that Act) and'' after ``otherwise provided in'';
       (2) by striking ``(c) through (i) of this section'' and 
     inserting ``(c) and (f)'';
       (3) by striking ``contracts of sale'' and inserting ``swaps 
     or contracts of sale''; and
       (4) by striking ``or derivatives transaction execution 
     facility registered pursuant to section 5 or 5a'' and 
     inserting ``pursuant to section 5''.
       (b) Regulation of Swaps Under Federal and State Law.--
     Section 12 of the Commodity Exchange Act (7 U.S.C. 16) is 
     amended by adding at the end the following:
       ``(h) Regulation of Swaps as Insurance Under State Law.--A 
     swap--
       ``(1) shall not be considered to be insurance; and
       ``(2) may not be regulated as an insurance contract under 
     the law of any State.''.
       (c) Agreements, Contracts, and Transactions Traded on an 
     Organized Exchange.--Section 2(c)(2)(A) of the Commodity 
     Exchange Act (7 U.S.C. 2(c)(2)(A)) is amended--
       (1) in clause (i), by striking ``or'' at the end;
       (2) by redesignating clause (ii) as clause (iii); and
       (3) by inserting after clause (i) the following:
       ``(ii) a swap; or''.
       (d) Applicability.--Section 2 of the Commodity Exchange Act 
     (7 U.S.C. 2) (as amended by section 723(a)(3)) is amended by 
     adding at the end the following:
       ``(i) Applicability.--The provisions of this Act relating 
     to swaps that were enacted by the Wall Street Transparency 
     and Accountability Act of 2010 (including any rule prescribed 
     or regulation promulgated under that Act), shall not apply to 
     activities outside the United States unless those 
     activities--
       ``(1) have a direct and significant connection with 
     activities in, or effect on, commerce of the United States; 
     or
       ``(2) contravene such rules or regulations as the 
     Commission may prescribe or promulgate as are necessary or 
     appropriate to prevent the evasion of any provision of this 
     Act that was enacted by the Wall Street Transparency and 
     Accountability Act of 2010.''.

     SEC. 723. CLEARING.

       (a) Clearing Requirement.--
       (1) In general.--Section 2 of the Commodity Exchange Act (7 
     U.S.C. 2) is amended--
       (A) by striking subsections (d), (e), (g), and (h); and
       (B) by redesignating subsection (i) as subsection (g).
       (2) Swaps; limitation on participation.--Section 2 of the 
     Commodity Exchange Act (7 U.S.C. 2) (as amended by paragraph 
     (1)) is amended by inserting after subsection (c) the 
     following:
       ``(d) Swaps.--Nothing in this Act (other than subparagraphs 
     (A), (B), (C), and (D) of subsection (a)(1), subsections (f) 
     and (g), sections 1a, 2(c)(2)(A)(ii), 2(e), 2(h), 4(c), 4a, 
     4b, and 4b-1, subsections (a), (b), and (g) of section 4c, 
     sections 4d, 4e, 4f, 4g, 4h, 4i, 4j, 4k, 4l, 4m, 4n, 4o, 4p, 
     4r, 4s, 4t, 5, 5b, 5c, 5e, and 5h, subsections (c) and (d) of 
     section 6, sections 6c, 6d, 8, 8a, and 9, subsections (e)(2) 
     and (f) of section 12, subsections (a) and (b) of section 13, 
     sections 17, 20, 21, and 22(a)(4), and any other provision of 
     this Act that is applicable to registered entities and 
     Commission registrants) governs or applies to a swap.
       ``(e) Limitation on Participation.--It shall be unlawful 
     for any person, other than an eligible contract participant, 
     to enter into a swap unless the swap is entered into on, or 
     subject to the rules of, a board of trade designated as a 
     contract market under section 5.''.

[[Page S3845]]

       (3) Mandatory clearing of swaps.--Section 2 of the 
     Commodity Exchange Act (7 U.S.C. 2) is amended by inserting 
     after subsection (g) (as redesignated by paragraph (1)(B)) 
     the following:
       ``(h) Clearing Requirement.--
       ``(1) Open access.--The rules of a registered derivatives 
     clearing organization shall--
       ``(A) prescribe that all swaps with the same terms and 
     conditions are economically equivalent and may be offset with 
     each other within the derivatives clearing organization; and
       ``(B) provide for nondiscriminatory clearing of a swap 
     executed bilaterally or on or through the rules of an 
     unaffiliated designated contract market or swap execution 
     facility, subject to the requirements of section 5b.
       ``(2) Swaps subject to mandatory clearing requirement.--
       ``(A) In general.--In accordance with subparagraph (B), the 
     Commission shall, jointly with the Securities and Exchange 
     Commission and the Federal Reserve Board of Governors, adopt 
     rules to establish criteria for determining that a swap or 
     group, category, type, or class of swap is required to be 
     cleared.
       ``(B) Factors.--In carrying out subparagraph (A), the 
     following factors shall be considered:
       ``(i) Whether 1 or more derivatives clearing organizations 
     or clearing agencies accepts the swap or group, category, 
     type, or class of swap for clearing.
       ``(ii) Whether the swap or group, category, type, or class 
     of swap is traded pursuant to standard documentation and 
     terms.
       ``(iii) The liquidity of the swap or group, category, type, 
     or class of swap and its underlying commodity, security, 
     security of a reference entity, or group or index thereof.
       ``(iv) The ability to value the swap or group, category, 
     type, or class of swap and its underlying commodity, 
     security, security of a reference entity, or group or index 
     thereof consistent with an accepted pricing methodology, 
     including the availability of intraday prices.
       ``(v) The size of the market for the swap or group, 
     category, type, or class of swap and the available capacity, 
     operational expertise, and resources of the derivatives 
     clearing organization or clearing agency that accepts it for 
     clearing.
       ``(vi) Whether a clearing mandate would mitigate risk to 
     the financial system or whether it would unduly concentrate 
     risk in a clearing participant, derivatives clearing 
     organization, or clearing agency in a manner that could 
     threaten the solvency of that clearing participant, the 
     derivatives clearing organization, or the clearing agency.
       ``(vii) Such other factors as the Commission, the 
     Securities and Exchange Commission, and the Federal Reserve 
     Board of Governors jointly may determine are relevant.
       ``(C) Swaps subject to clearing requirement.--The 
     Commission--
       ``(i) shall review each swap, or any group, category, type, 
     or class of swap that is currently listed for clearing and 
     those which a derivatives clearing organization notifies the 
     Commission that the derivatives clearing organization plans 
     to list for clearing after the date of enactment of this 
     subsection;
       ``(ii) except as provided in paragraph (3), may require, 
     pursuant to the rules adopted under subparagraph (A) and 
     through notice-and-comment rulemaking, that a particular 
     swap, group, category, type, or class of swap must be 
     cleared; and
       ``(iii) shall rely on economic analysis provided by 
     economists of the Commission in making any determination 
     under clause (ii).
       ``(D) Effect.--
       ``(i) In general.--Nothing in this paragraph affects the 
     ability of a derivatives clearing organization to list for 
     permissive clearing any swap, or group, category, type, or 
     class of swaps.
       ``(ii) Prohibition.--The Commission shall not compel a 
     derivatives clearing organization to list a swap, group, 
     category, type, or class of swap for clearing if the 
     derivatives clearing organization determines that the swap, 
     group, category, type, or class of swap would adversely 
     impact its business operations, or impair the financial 
     integrity of the derivatives clearing organization.
       ``(iii) Required exemption.--The Commission shall exempt a 
     swap from the requirements of subparagraph (C), if no 
     derivatives clearing organization registered under this Act 
     or no derivatives clearing organization that is exempt from 
     registration under section 5b(j) of this Act will accept the 
     swap for clearing.
       ``(E) Prevention of evasion.--The Commission may prescribe 
     rules, or issue interpretations of such rules, as necessary 
     to prevent evasions of any requirement to clear under 
     subparagraph (C). In issuing such rules or interpretations, 
     the Commission shall consider--
       ``(i) the extent to which the terms of the swap, group, 
     category, type, or class of swap are similar to the terms of 
     other swaps, groups, categories, types, or classes of swap 
     that are required to be cleared by swap participants under 
     subparagraph (C); and
       ``(ii) whether there is an economic purpose for any 
     differences in the terms of the swap or group, category, 
     type, or class of swap that are required to be cleared by 
     swap participants under subparagraph (C).
       ``(F) Elimination of requirement to clear.--The Commission 
     may, pursuant to the rules adopted under subparagraph (A) and 
     through notice-and-comment rulemaking, rescind a requirement 
     imposed under subparagraph (C) with respect to a swap, group, 
     category, type, or class of swap.
       ``(G) Petition for rulemaking.--Any person may file a 
     petition, pursuant to the rules of practice of the 
     Commission, requesting that the Commission use its authority 
     under subparagraph (C) to require clearing of a particular 
     swap, group, category, type, or class of swap or to use its 
     authority under subparagraph (F) to rescind a requirement for 
     swap participants to clear a particular swap, group, 
     category, type, or class of swap.
       ``(H) Foreign exchange forwards, swaps, and options.--
     Foreign exchange forwards, swaps, and options shall not be 
     subject to a clearing requirement under subparagraph (C) 
     unless the Department of the Treasury and the Board of 
     Governors determine that such a requirement is appropriate 
     after considering whether there exists an effective 
     settlement system for such foreign exchange forwards, swaps, 
     and options and any other factors that the Department of the 
     Treasury and the Board of Governors deem to be relevant.
       ``(3) End user clearing exemption.--
       ``(A) Definitions.--In this paragraph:
       ``(i) Commercial end user.--The term `commercial end user' 
     means any person who, as its primary business activity owns, 
     operates, uses, produces, processes, develops, leases, 
     manufacturers, distributes, merchandises, provides or markets 
     goods, services, physical assets, or commodities (which shall 
     include but not be limited to coal, natural gas, electricity, 
     biofuels, crude oil, gasoline, propane, distillates, and 
     other hydrocarbons) either individually or in a fiduciary 
     capacity.
       ``(ii) Financial entity end user.--

       ``(I) In general.--The term `financial entity end user' 
     means any person predominately engaged in activities that are 
     financial in nature, as determined by the Commission.
       ``(II) Exclusions.--The term `financial entity end user' 
     does not include--

       ``(aa) any person who is a swap dealer, security-based swap 
     dealer, major swap participant, major security-based swap 
     participant;
       ``(bb) an investment fund that would be an investment 
     company (as defined in section 3 of the Investment Company 
     Act o f 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)); and is not 
     a partnership or other entity or any subsidiary that is 
     primarily invested in physical assets (which shall include 
     but not be limited to commercial real estate) directly or 
     through interests in partnerships or limited liability 
     companies that own such assets;
       ``(cc) entities defined in section 1303(20) of the Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (12 U.S.C. 4502(20));
       ``(dd) a commodity pool; or
       ``(ee) a commercial end user.
       ``(B) End user clearing exemption.--
       ``(i) In general.--Subject to clause (ii), in the event 
     that a swap is subject to the mandatory clearing requirement 
     under paragraph (2), and 1 of the counterparties to the swap 
     is a commercial end user or a financial entity end user, that 
     counterparty--

       ``(I)(aa) may elect not to clear the swap, as required 
     under paragraph (2); or
       ``(bb) may elect, prior to entering into the swap 
     transaction, to require clearing of the swap; and
       ``(II) if the end user makes an election under subclause 
     (I)(bb), shall have the sole right to select the derivatives 
     clearing organization at which the swap will be cleared.

       ``(ii) Limitation.--A commercial end user or a financial 
     entity end user may only make an election under clause (i) if 
     the end user is using the swap to hedge commercial risk, 
     including operating risk and balance sheet risk.
       ``(C) Treatment of affiliates.--
       ``(i) In general.--An affiliate of a commercial end user 
     (including affiliate entities predominantly engaged in 
     providing financing for the purchase of merchandise or 
     manufactured goods of the commercial end user) or a financial 
     entity end user may make an election under subparagraph 
     (B)(i) only if the affiliate uses the swap to hedge or 
     mitigate the commercial risk, including operating risk and 
     balance sheet risk, of the commercial end user or the 
     financial entity end user or other affiliate of the 
     commercial end user or financial entity end user.
       ``(ii) Prohibition relating to certain affiliates.--An 
     affiliate of a commercial end user or a financial entity end 
     user shall not use the exemption under subparagraph (B) if 
     the affiliate is--

       ``(I) a swap dealer;
       ``(II) a security-based swap dealer;
       ``(III) a major swap participant;
       ``(IV) a major security-based swap participant;
       ``(V) 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)); and is not 
     a partnership or other entity or any subsidiary that is 
     primarily invested in physical assets (which shall include 
     but not be limited to commercial real estate) directly or 
     through interests in partnerships or limited liability 
     companies that own such assets; or
       ``(VI) a commodity pool.

[[Page S3846]]

       ``(D) Abuse of exemption.--The Commission may prescribe 
     such rules or issue interpretations of the rules as the 
     Commission determines to be necessary to prevent abuse of the 
     exemption described in subparagraph (B). The Commission may 
     also request information from those entities claiming the 
     clearing exemption as necessary to prevent abuse of the 
     exemption described in subparagraph (B).
       ``(4) Required reporting.--Each swap that is not cleared by 
     any derivatives clearing organization shall be reported 
     either to a registered swap repository described in section 
     21 or, if there is no repository that would accept the swap, 
     to the Commission pursuant to section 4r.
       ``(5) Transition rules.--
       ``(A) Reporting transition rules.--The Commission shall 
     provide for the reporting of data, as follows:
       ``(i) Swaps entered into before date of enactment of this 
     subsection.--Swaps entered into before the date of the 
     enactment of this subsection shall be reported to a 
     registered swap repository or the Commission not later than 
     180 days after the effective date of this subsection.
       ``(ii) Swaps entered into on or after date of enactment of 
     this subsection.--Swaps entered into on or after such date of 
     enactment shall be reported to a registered swap repository 
     or the Commission not later than such time period as the 
     Commission prescribe.
       ``(B) Clearing transition rules.--Swaps entered into before 
     the effective date of any requirement under paragraph (2)(C) 
     are exempt from the clearing requirements of this subsection.
       ``(6) Reporting obligations.--
       ``(A) Swaps in which only 1 counterparty is a swap dealer 
     or major swap participant.--With respect to a swap in which 
     only 1 counterparty is a swap dealer or major swap 
     participant, the swap dealer or major swap participant shall 
     report the swap as required under paragraphs (4) and (5).
       ``(B) Swaps in which 1 counterparty is a swap dealer and 
     the other a major swap participant.--With respect to a swap 
     in which 1 counterparty is a swap dealer and the other a 
     major swap participant, the swap dealer shall report the swap 
     as required under paragraphs (4) and (5).
       ``(C) Other swaps.--With respect to any other swap not 
     described in subparagraph (A) or (B), the counterparties to 
     the swap shall select a counterparty to report the swap as 
     required under paragraphs (4) and (5).
       ``(7) Trade execution.--
       ``(A) In general.--With respect to transactions involving 
     swaps subject to the clearing requirement established under 
     paragraph (2), counterparties shall--
       ``(i) execute the transaction on a board of trade 
     designated as a contract market under section 5; or
       ``(ii) execute the transaction on a swap execution facility 
     registered under section 5h or a swap execution facility that 
     is exempt from registration under section 5h(f).
       ``(B) Exception.--The requirements of clauses (i) and (ii) 
     of subparagraph (A) shall not apply if no board of trade or 
     swap execution facility makes the swap available to trade or 
     in the case of a swap transaction for which a commercial end 
     or financial entity user opts to use the clearing exemption 
     under paragraph (3).
       ``(8) Required exemption.--The Commission shall exempt a 
     swap from the requirements of this subsection and any rules 
     issued under this subsection, if no derivatives clearing 
     organization registered under this Act or no derivatives 
     clearing organization that is exempt from registration under 
     section 5b(j) will accept the swap from clearing.''.
                                 ______
                                 
  SA 4062. Mr. WARNER submitted an amendment intended to be proposed to 
amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself and 
Mrs. Lincoln)) to the bill S. 3217, to promote the financial stability 
of the United States by improving accountability and transparency in 
the financial system, to end ``too big to fail'', to protect the 
American taxpayer by ending bailouts, to protect consumers from abusive 
financial services practices, and for other purposes; which was ordered 
to lie on the table; as follows:

       On page 1204, line 25, strike ``or'' and all that follows 
     through page 1205, line 4 and insert the following:
       (ii) time or space for an advertisement for a consumer 
     financial product or service through print, newspaper, or 
     electronic media;
       (iii) information products or services for identity 
     authentication, fraud, or identity theft detection, 
     prevention, or investigation, or anti-money laundering 
     activities, unless such products or services are regulated 
     under the Bank Service Company Act (12 U.S.C. 1861 et seq.); 
     or
       (iv) public records information or document retrieval or 
     delivery services, unless such products or services are 
     regulated under the Bank Service Company Act (12 U.S.C. 1861 
     et seq.).

                          ____________________