[House Report 112-109]
[From the U.S. Government Publishing Office]


112th Congress                                            Rept. 112-109
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 2

======================================================================

 
TO FACILITATE IMPLEMENTATION OF TITLE VII OF THE DODD-FRANK WALL STREET 
 REFORM AND CONSUMER PROTECTION ACT, PROMOTE REGULATORY COORDINATION, 
                      AND AVOID MARKET DISRUPTION

                                _______
                                

 June 16, 2011.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

             Mr. Lucas, from the Committee on Agriculture, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 1573]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Agriculture, to whom was referred the bill 
(H.R. 1573) to facilitate implementation of title VII of the 
Dodd-Frank Wall Street Reform and Consumer Protection Act, 
promote regulatory coordination, and avoid market disruption, 
having considered the same, report favorably thereon with an 
amendment and recommend that the bill as amended do pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. EFFECTIVE DATES.

  Section 712(f) of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (Public Law 111-203) is amended to read as follows:
  ``(f) Rules and Registration Before Final Effective Dates.--
          ``(1) In general.--Beginning on the date of enactment of this 
        Act and notwithstanding the effective date of any provision of 
        this Act, the Commodity Futures Trading Commission and the 
        Securities and Exchange Commission may, in order to prepare for 
        the effective dates of the provisions of this Act--
                  ``(A) promulgate rules, regulations, or orders 
                permitted or required by this Act;
                  ``(B) conduct studies and prepare reports and 
                recommendations required by this Act;
                  ``(C) register persons under the provisions of this 
                Act; and
                  ``(D) exempt persons, agreements, contracts, or 
                transactions from provisions of this Act, under the 
                terms contained in this Act.
          ``(2) Effective date.--(A) Notwithstanding paragraph (1), an 
        action by the Commodity Futures Trading Commission or the 
        Securities and Exchange Commission described in paragraph (1) 
        shall not become effective before the effective date applicable 
        to the action under this Act, except as provided in paragraph 
        (3).
          ``(B) Notwithstanding any provision of this Act (other than 
        paragraph (3) and sections 721(a)(4) and 721(f)), this title 
        and the regulations under this title shall become effective on 
        the latest of--
                  ``(i) December 31, 2012;
                  ``(ii) 90 days after the publication of the relevant 
                final rule or regulation in the Federal Register or 
                such later date as may be specified in the final rule 
                or regulation; or
                  ``(iii) the effective date otherwise applicable to 
                this title.
          ``(3) Exceptions.--
                  ``(A) Certain definitions.--Notwithstanding any other 
                provision of this Act, in order to assist persons 
                subject to this title in coming into compliance with 
                the provisions of this title on a timely basis, the 
                Commodity Futures Trading Commission and the Securities 
                and Exchange Commission, in consultation with the Board 
                of Governors, shall adopt definitions further defining 
                the terms specified in subsection (d)(1) not later than 
                360 days after the date of the enactment of this Act. 
                Such definitions shall become effective 90 days after 
                their publication in the Federal Register.
                  ``(B) Regulatory reporting.--
                          ``(i) Swap data reporting.--Notwithstanding 
                        any other provision of this Act, sections 
                        2(h)(5) and 4r of the Commodity Exchange Act 
                        and the rules and regulations of the Commodity 
                        Futures Trading Commission issued under such 
                        sections shall become effective on the later 
                        of--
                                  ``(I) 90 days after the publication 
                                of the relevant final rule or 
                                regulation in the Federal Register, or 
                                such later date as may be specified in 
                                the final rule or regulation; or
                                  ``(II) the effective date otherwise 
                                applicable to such sections.
                          ``(ii) Security-based swap data reporting.--
                        Sections 3C(e) and 13A(a) of the Securities 
                        Exchange Act of 1934 and the rules and 
                        regulations of the Securities and Exchange 
                        Commission issued under such sections shall 
                        become effective on the later of--
                                  ``(I) 90 days after the publication 
                                of the relevant final rule or 
                                regulation in the Federal Register, or 
                                such later date as may be specified in 
                                the rule or regulation; or
                                  ``(II) the effective date otherwise 
                                applicable to such sections.
                          ``(iii) Swap data repositories.--To 
                        facilitate compliance, before December 31, 
                        2012, with the regulatory reporting provisions 
                        of this section, the Commodity Futures Trading 
                        Commission and the Securities and Exchange 
                        Commission may authorize the reporting of swap 
                        data and security-based swap data to any person 
                        then conducting the business described in 
                        section 1a(48) of the Commodity Exchange Act (7 
                        U.S.C. 1a(48)) or section 3(a)(75) of the 
                        Securities Exchange Act of 1934 (15 U.S.C. 
                        78m), respectively, who has--
                                  ``(I) provided notice to the relevant 
                                Commission of its intention to register 
                                as a swap data repository or security-
                                based swap data repository, as 
                                applicable; and
                                  ``(II) made such undertakings to the 
                                relevant Commission as such Commission 
                                has determined to be appropriate and in 
                                the public interest, consistent with 
                                this title.''.

SEC. 2. IMPLEMENTATION ANALYSIS.

  Section 712 of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (Public Law 111-203), as amended by section 1 of this 
Act, is amended by adding at the end the following:
  ``(g) Implementation Analysis.--Notwithstanding any other provision 
of this title, the Commodity Futures Trading Commission and the 
Securities and Exchange Commission shall, before prescribing final 
rules and regulations under this title--
          ``(1) conduct public hearings and roundtables and take 
        testimony of affected market participants, experts and other 
        interested parties, and solicit public comment, regarding--
                  ``(A) the time and resources that would be required 
                of affected parties in order to develop systems and 
                infrastructure necessary to comply with any rules and 
                regulations proposed or then contemplated by the 
                relevant Commission;
                  ``(B) any alternative approaches capable of 
                accomplishing the relevant Commission's rulemaking 
                objectives; and
                  ``(C) the time and resources that would be required 
                of affected parties in order to develop policies and 
                procedures designed to comply with any rules and 
                regulations proposed or then contemplated by the 
                relevant Commission, and
          ``(2) take such testimony and comment into account in--
                  ``(A) performing the cost-benefit analysis required 
                under Federal law in connection with its adoption of 
                the relevant final rules and regulations; and
                  ``(B) determining the effective date of the relevant 
                final rules and regulations.''.

SEC. 3. REGULATORY COORDINATION.

  (a) Commodity Futures Trading Commission.--Section 2(a)(1) of the 
Commodity Exchange Act (7 U.S.C. 2(a)(1)) is amended by adding at the 
end the following:
                  ``(J)(i) Notwithstanding any other provision of this 
                Act, the Commission may exempt, in whole or in part, a 
                person from the registration and related regulatory 
                requirements of this Act if and to the extent that the 
                Commission determines that--
                          ``(I) the person is subject to comprehensive 
                        supervision and regulation under a regulatory 
                        scheme administered by another domestic 
                        regulatory authority or the appropriate 
                        governmental authorities in the person's home 
                        country that is comparable to the relevant 
                        provisions of this Act,
                          ``(II) adequate information-sharing 
                        arrangements are in effect between the 
                        Commission and the other regulatory authority, 
                        and
                          ``(III) the exemption would be consistent 
                        with the public interest.
                  ``(ii) The Commission may condition any such 
                exemption on compliance with all or any part of the 
                alternate regulatory scheme, and on such other terms as 
                the Commission determines appropriate, and may deem any 
                noncompliance with the altrernate regulatory scheme or 
                other terms a violation of the corresponding provisions 
                of this Act.''.
  (b) Securities and Exchange Commission.--The Securities Exchange Act 
of 1934 (15 U.S.C. 78m) is amended by inserting after section 4E the 
following:

``SEC. 4F. EXEMPTIVE AUTHORITY.

  ``(a) In General.--Notwithstanding any other provision of this Act, 
the Commission may exempt, in whole or in part, a person from the 
registration and related regulatory requirements of this Act if and to 
the extent that the Commission determines that--
          ``(1) the person is subject to comprehensive supervision and 
        regulation under a regulatory scheme administered by another 
        regulatory authority or the appropriate governmental 
        authorities in the person's home country that is comparable to 
        the relevant provisions of this Act;
          ``(2) adequate information-sharing arrangements are in effect 
        with the other regulatory authority; and
          ``(3) the exemption would be consistent with the protection 
        of investors.
  ``(b) Condition on Compliance.--The Commission may condition any such 
exemption on compliance with all or any part of the alternate 
regulatory scheme, and such other terms as the Commission determines 
appropriate, and may deem any noncompliance with the alternate 
regulatory scheme or other terms a violation of the corresponding 
provisions of this Act.''.

                           Brief Explanation

    The bill extends the statutory deadline for the 
implementation of most provisions of Title VII of the Wall 
Street Reform and Consumer Protection Act (P.L. 111-203) by 18 
months. The bill does not extend the deadline for the Commodity 
Futures Trading Commission (CFTC) and the Securities and 
Exchange Commission (SEC) to issue final rules further defining 
key terms in Section 712(d)(1) of swap, security based swap, 
swap dealer, security-based swap dealer, major swap 
participant, major security-based swap participant and eligible 
contract participant. The bill also does not extend the 
deadline for the reporting requirements in Sections 2(h)(5) and 
4r of the Commodity Exchange Act and Sections 3C(e) and 13A(a) 
of the Securities Exchange Act of 1934. To facilitate the 
reporting of swaps data, the bill gives the CFTC and the SEC 
interim authority to designate swap data repositories that meet 
certain criteria. In addition, the bill requires the CFTC and 
SEC, prior to prescribing any final rules required under Title 
VII, to hold additional roundtables and public hearings to 
receive public testimony and factor it into the rule proposals. 
Lastly, HR 1573 gives the CFTC and SEC authority to exempt 
certain persons from registration or related regulatory 
requirements if they are subject to comparable regulation by a 
U.S. or foreign regulatory authority.

                            Purpose and Need

    Beginning in February, the Committee held 4 hearings, two 
Full Committee and two General Farm Commodities and Risk 
Management Subcommittee hearings to examine the implementation 
of Title VII of the Dodd-Frank Act. The Committee took 
testimony from witnesses that represented a broad spectrum of 
participants in the derivatives markets. The Committee heard 
from a broad array of end-users, including agricultural 
cooperatives, manufacturers, commercial energy firms and 
electric utilities. The Committee also heard from large 
financial market participants, such as a global exchange and 
clearinghouse, electronic trading platforms, swap dealers, 
hedge funds and mutual funds. Witnesses also included pension 
funds, community banks and farm credit banks. Across the 
spectrum of expertise, an overwhelming majority of witnesses 
expressed concerns that the compressed statutory deadlines and 
sheer volume of regulations were having a negative impact on 
the implementation process, particularly at the Commodity 
Futures Trading Commission (CFTC). In short, a common concern 
was that the statutory deadlines forced the regulatory agencies 
to prioritize speed over deliberation, making it difficult for 
stakeholders to comment, and undermining the economic analysis 
associated with each proposed rule. Witnesses also expressed 
concerns that many of the CFTC's rule proposals exceed or 
conflict with congressional intent, are inconsistent with 
proposals from other regulatory agencies, and may be 
detrimental for U.S. businesses, for our markets, and for our 
economy.
    In addition, there are efforts around the world to 
implement financial regulatory reform in the wake of the global 
financial crisis. In September of 2009, the leaders of the G20 
Nations agreed to implement certain OTC derivatives reforms by 
the end of December of 2012. Many of the witnesses, along with 
a broad cross section of industry and academics, have cited 
concerns about the U.S. moving on a much faster timetable than 
the European Union (EU) or Asian regulators, creating the 
potential for regulatory arbitrage and negative consequences to 
the competitiveness of U.S. businesses. The extreme pace of 
rulemaking diminishes the opportunity for regulators to 
coordinate and harmonize international regulatory regimes, 
creates opportunities for regulatory arbitrage, and gives 
foreign countries a ``learn from our mistakes'' advantage. 
While it would not be possible or wise to tie the timing of our 
regulatory reforms to unpredictable deadlines of the EU and 
other jurisdictions, slowing the process down would enhance the 
opportunity for coordination and greater consistency among 
regulatory regimes.
    Lastly, the CFTC Inspector General (IG) recently issued an 
investigative report of the CFTC's cost-benefit analysis 
performed in connection with Dodd-Frank rulemakings. In 
general, the report found that the CFTC takes a minimalist 
approach to considering the costs and benefits of proposed 
regulations and focuses more on meeting the legal obligation 
under the Commodity Exchange Act than performing a legitimate 
economic analysis. Put simply, the CFTC IG concluded the report 
by saying ``We are mindful of the adage, `just because 
something is legal, doesn't make it right.' And we 
wholeheartedly agree that, `[in] the end, economic analysis is 
more than about satisfying procedural requirements for 
regulatory rulemaking.''' In addition, the report found that 
the irrational sequence of rule proposals that many witnesses 
cited as an impediment to their ability to provide meaningful 
comment was created by the compressed timeframes. Specifically 
the report stated ``Staff and management were aware that market 
participants might refrain from comment on conduct regulations 
in the mistaken belief that they would not fall within the 
definitions. However, at this stage in the process, staff 
indicated the overriding concern was meeting the rule-making 
deadline under Dodd-Frank.''
    H.R. 1573 gives the regulatory agencies an additional 18 
months to promulgate most rules required by Title VII. A common 
concern, particularly among end-users, was that the sequence of 
rule proposals made it difficult for them to comment 
meaningfully. For example, one of the last rules proposed by 
the CFTC in the initial proposing phase was the definition of 
``swap.'' Stakeholders were asked to comment on each rule 
prescribing a regulatory regime without clarification regarding 
the scope of products impacted. For certain industries, such as 
the electric power industry, the definition of swap was a 
significant factor in understanding which regulations they may 
be subject to. In addition, rules were proposed to govern Major 
Swap Participants and Swap Dealers before a rule had been 
proposed to define Major Swap Participant and Swap Dealer. To 
provide for a more rational sequence of rule proposals, H.R. 
1573 does not extend the deadline for the definitions required 
under Section 712(d)(1). This will provide clarity to market 
participants about their regulatory status, and to facilitate 
productive comment on the succeeding rules prescribing the 
relevant regulatory requirements.
    H.R. 1573 also does not extend the deadline for the 
regulatory reporting requirements applicable to swaps in 
Sections 723 and 729 and the similar provisions applicable to 
security-based swaps. This provision will ensure transparency 
and reporting of all swap transactions are not delayed, both to 
give the regulatory agencies access to market data to monitor 
for systemic risk, and to further instruct the rulemaking 
process by providing swap market data that the agencies 
currently do not have. To facilitate the reporting of swaps 
data and encourage further development of swap data 
repositories, H.R. 1573 gives the regulatory agencies interim 
authority to designate swap data repositories during the period 
in which the regulations governing swap data repositories are 
being finalized.
    The bill also requires the CFTC and the Securities and 
Exchange Commission (SEC) to hold additional public roundtables 
and hearings to take testimony from affected market 
participants prior to the finalization of any rules. Providing 
stakeholders additional time to offer input will help to 
mitigate unintended consequences of poorly vetted proposals, 
and permit comment once all rules have been proposed and can be 
considered in light of their interdependence and cumulative 
impact on the markets.

                           Section-by-Section

    Section 1 delays the effective date of most of Title VII of 
the Dodd Frank Act from July of this year until December 31, 
2012. To allow industry to plan and prepare, the effective 
dates for the definition of a swap dealer, major swap 
participant (and its security-based counterpart), eligible 
contract participant and security based swap agreement are not 
extended. Neither are the effective dates for regulatory 
reporting or the prohibition on trading box office receipt 
future contracts.
    Section 2 requires the regulators to conduct public 
hearings and solicit public comment from affected parties 
regarding time and resources necessary to comply with any rules 
or regulations and alternative approaches capable of 
accomplishing the rulemaking objectives. The regulators then 
need to take the information received and account for it when 
performing a cost-benefit analysis.
    Section 3 gives the regulators the authority to exempt 
persons or entities from registration or related regulatory 
requirements if the entity is subject to comprehensive 
supervision and regulation under a regulatory scheme 
administered by another regulatory agency or, if a foreign 
based entity, the appropriate regulatory authority in their 
home country, that is comparable to the relevant provisions 
under Dodd-Frank, there are adequate information sharing 
arrangements in effect between the CFTC or SEC and that 
regulatory authority; and the exemption is consistent with the 
public interest.
    It also gives the CFTC and SEC authority to safeguard 
against misuse of the exemption by conditioning any exemptions 
they move to grant on that entity's compliance with the 
alternate regulatory regime. Should any noncompliance with that 
regime occur, the Commissions would have the authority to treat 
it as a violation of the corresponding provisions of Dodd-
Frank, triggering any relevant enforcement actions.

                        Committee Consideration


                              I. HEARINGS

    On February 10, 2011 the full Committee held a hearing to 
review implementation of title VII of the Dodd-Frank Wall 
Street Reform and Consumer Protection Act. On February 15, 
2011, the Subcommittee on General Farm Commodities and Risk 
Management held part II to review the implementation of title 
VII of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act.
    Additional hearings were held on March 31, 2011 by the full 
Committee to review the definitions of key terms included in 
title VII of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act, such as ``swap,'' ``Swap Dealer,'' and ``Major 
Swap Participant.'' The Committee examined how end-users will 
be impacted by these definitions and regulatory designations. 
On April 13, 2011, the Subcommittee on General Farm Commodities 
and Risk Management held a hearing to further review the 
Commodity Futures Trading Commission's (CFTC) rulemaking 
process for implementing title VII of the Dodd-Frank Wall 
Street Reform and Consumer Protection Act.
    At the hearings the Committee and Subcommittee heard 
testimony from the CFTC, academics, clearing institutions, 
exchanges, financial services industry associations, investment 
funds, commercial commodity associations and commercial end-
users. The information presented at these hearings prepared the 
Committee to draft legislation which would extend the deadline 
by 18 months for implementing title VII of the Dodd-Frank Wall 
Street Reform and Consumer Protection Act. The legislation also 
gives the regulatory agencies more time to effectively meet the 
objectives of the derivatives title, to prioritize deliberation 
over speed, to consider the costs and benefits, and to 
understand the cumulative impact of the rules that will be 
applied to the marketplace. Additionally, the bill realigns the 
U.S. with the G20 agreement to implement reform by December 
2012.

                           II. FULL COMMITTEE

    The Committee on Agriculture met, pursuant to notice, with 
a quorum present, on May 4, 2011, to consider H.R. 1573, a bill 
to facilitate implementation of title VII of the Dodd-Frank 
Wall Street Reform and Consumer Protection Act, promote 
regulatory coordination, and avoid market disruption. Mr. Lucas 
offered an opening statement, as did Ranking Member Peterson.
    The bill, H.R. 1573 was placed before the Committee for 
consideration and without objection a first reading of the bill 
was waived and it was opened for amendment at any point. The 
Chairman offered an Amendment in the Nature of a Substitute to 
the bill, H.R. 1573 and counsel provided a brief explanation of 
that amendment.
    Mr. Courtney was recognized to offer and explain an 
amendment that would exempt Section 757 of the Dodd-Frank Act, 
which directs the CFTC to set position limits on commodity 
speculation, from the enactment date delays established by the 
Substitute Amendment. Discussion occurred and by a voice vote 
the amendment failed. Mr. Courtney requested a recorded vote 
and by a roll call vote of 22 yeas, 23 nays, 1 not voting, the 
amendment failed. See Roll Call #1.
    There being no further amendments, Mr. Conaway offered a 
motion to approve the Amendment in the Nature of a Substitute. 
Discussion occurred and the motion was agreed to. Mr. Peterson 
requested a recorded vote. The Amendment in the Nature of a 
Substitute was adopted by a recorded vote of 25 yeas, 20 nays, 
1 not voting. See Roll Call #2.
    Mr. Conaway then made the motion to report the bill H.R. 
1573, as amended, favorably to the House with the 
recommendation that it do pass. By a voice vote the motion was 
agreed to.
    Chairman Lucas then advised Members that pursuant to the 
rules of the House of Representatives, Members would have 2 
calendar days to file any minority or additional views.
    Without objection, staff was given permission to make any 
necessary clerical, technical or conforming changes to reflect 
the intent of the Committee.
    Chairman Lucas thanked all the Members and adjourned the 
meeting subject to the call of the chair.

                  Reporting the Bill--Roll Call Votes

    In compliance with clause 3(b) of rule XIII of the House of 
Representatives, the Committee sets forth the record of the 
following roll call votes taken with respect to H.R. 1573.

                              ROLL CALL #1

    Summary: To exempt Section 737 of the Dodd-Frank Act, which 
directs the CFTC to set position limits on commodity 
speculation, from the enactment date delays established by the 
Manager's Amendment to H.R. 1573.
    Offered by: Mr. Courtney
    Results: 22 yeas, 23 nays, 1 not voting.
        YEAS                          NAYS
 1. Mr. Fortenberry
 2. Mr. Gibson
 3. Mr. Peterson
 4. Mr. Holden
 5. Mr. McIntyre
 6. Mr. Boswell
 7. Mr. Baca
 8. Mr. Cardoza
 9. Mr. David Scott
10. Mr. Cuellar
11. Mr. Costa
12. Mr. Walz
13. Mr. Schrader
14. Mr. Kissell
15. Mr. Owens
16. Ms. Pingree
17. Mr. Courtney
18. Mr. Welch
19. Ms. Fudge
20. Mr. Sablan
21. Ms. Sewell
22. Mr. McGovern                     1. Mr. Goodlatte
                                     2. Mr. Johnson
                                     3. Mr. King
                                     4. Mr. Neugebauer
                                     5. Mr. Conaway
                                     6. Mrs. Schmidt
                                     7. Mr. Thompson
                                     8. Mr. Rooney
                                     9. Mr. Stutzman
                                    10. Mr. Gibbs
                                    11. Mr. Austin Scott
                                    12. Mr. Fincher
                                    13. Mr. Southerland
                                    14. Mr. Crawford
                                    15. Mrs. Roby
                                    16. Mr. Huelskamp
                                    17. Mr. DesJarlais
                                    18. Mrs. Ellmers
                                    19. Mr. Hultgren
                                    20. Mrs. Hartzler
                                    21. Mr. Schilling
                                    22. Mr. Ribble
                                    23. Mr. Lucas

        NOT VOTING                      
 1. Mr. Tipton                        

                              ROLL CALL #2

    Summary: Amendment in the Nature of a Substitute
    Offered by: Chairman Lucas
    Results: 25 yeas, 20 nays, 1 not voting.
        YEAS                          NAYS
 1. Mr. Goodlatte
 2. Mr. Johnson
 3. Mr. King
 4. Mr. Neugebauer
 5. Mr. Conaway
 6. Mr. Fortenberry
 7. Mrs. Schmidt
 8. Mr. Thompson
 9. Mr. Rooney
10. Mr. Stutzman
11. Mr. Gibbs
12. Mr. Austin Scott
13. Mr. Fincher
14. Mr. Southerland
15. Mr. Crawford
16. Mrs. Roby
17. Mr. Huelskamp
18. Mr. DesJarlais
19. Mrs. Ellmers
20. Mr. Gibson
21. Mr. Hultgren
22. Mrs. Hartzler
23. Mr. Schilling
24. Mr. Ribble
25. Mr. Lucas                        1. Mr. Peterson
                                     2. Mr. Holden
                                     3. Mr. McIntyre
                                     4. Mr. Boswell
                                     5. Mr. Baca
                                     6. Mr. Cardoza
                                     7. Mr. David Scott
                                     8. Mr. Cuellar
                                     9. Mr. Costa
                                    10. Mr. Walz
                                    11. Mr. Schrader
                                    12. Mr. Kissell
                                    13. Mr. Owens
                                    14. Ms. Pingree
                                    15. Mr. Courtney
                                    16. Mr. Welch
                                    17. Mrs. Fudge
                                    18. Mr. Sablan
                                    19. Ms. Sewell
                                    20. Mr. McGovern

        NOT VOTING                      
1. Mr. Tipton                         

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee on Agriculture's 
oversight findings and recommendations are reflected in the 
body of this report.

           Budget Act Compliance (Sections 308, 402, and 423)

    The provisions of clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives and section 308(a)(1) of the 
Congressional Budget Act of 1974 (relating to estimates of new 
budget authority, new spending authority, new credit authority, 
or increased or decreased revenues or tax expenditures) are not 
considered applicable. The estimate and comparison required to 
be prepared by the Director of the Congressional Budget Office 
under clause 3(c)(3) of rule XIII of the Rules of the House of 
Representatives and sections 402 and 423 of the Congressional 
Budget Act of 1974 submitted to the Committee prior to the 
filing of this report are as follows:

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, May 11, 2011.
Hon. Frank D. Lucas,
Chairman, Committee on Agriculture,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1573, a bill to 
facilitate implementation of title VII of the Dodd-Frank Wall 
Street Reform and Consumer Protection Act, promote regulatory 
coordination, and avoid market disruption.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Susan Willie.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

H.R. 1573--A bill to facilitate implementation of title VII of the 
        Dodd-Frank Wall Street Reform and Consumer Protection Act, 
        promote regulatory coordination, and avoid market disruption

    H.R. 1573 would extend the effective date for certain 
regulations that are being developed by the Commodity Futures 
Trading Commission (CFTC) and the Securities and Exchange 
Commission (SEC); those regulations relate to entities that 
trade in, or assist in the trading of, financial instruments 
known as over-the-counter derivatives. The bill also would 
require the agencies to solicit comments from the public 
regarding implementation of proposed regulations and to 
consider that information when analyzing costs and benefits of 
the final regulations. Finally, the bill would authorize the 
agencies to exempt certain entities from regulation if those 
entities are subject to comparable requirements of another 
financial regulator in the United States or in the entity's 
home country.
    Based on information from the CFTC and the SEC, CBO 
estimates that implementing the provisions of H.R. 1573 would 
not significantly affect the staffing levels or spending of 
either agency. Enacting H.R. 1573 would not affect direct 
spending or revenues; therefore, pay-as-you-go procedures do 
not apply.
    H.R. 1573 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    The CBO staff contact for this estimate is Susan Willie. 
The estimate was approved by Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                    Performance Goals and Objectives

    With respect to the requirement of clause 3(c)(4) of rule 
XIII of the Rules of the House of Representatives, the 
performance goals and objectives of this legislation are to 
facilitate implementation of title VII of the Dodd-Frank Wall 
Street Reform and Consumer Protection Act, promote regulatory 
coordination, and avoid market disruption.

                   Constitutional Authority Statement

    The Committee finds the Constitutional authority for this 
legislation in Article I, section 8, clause 18, that grants 
Congress the power to make all laws necessary and proper for 
carrying out the powers vested by Congress in the Constitution 
of the United States or in any department or officer thereof.

                        Committee Cost Estimate

    Pursuant to clause 3(d)(2) of rule XIII of the Rules of the 
House of Representatives, the Committee report incorporates the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to sections 402 and 423 of the 
Congressional Budget Act of 1974.

                      Advisory Committee Statement

    No advisory committee within the meaning of section 5(b) of 
the Federal Advisory Committee Act was created by this 
legislation.

                Applicability to the Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act (Public Law 
104-1).

                       Federal Mandates Statement

    The Committee adopted as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act (Public Law 104-4).

Earmark Statement Required by Clause 9 of Rule XXI of the Rules of the 
                        House of Representatives

    H.R. 1573 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9(e), 9(f), or 9(g) of rule XXI of the Rules of the 
House of Representatives.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

       DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT




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TITLE VII--WALL STREET TRANSPARENCY AND ACCOUNTABILITY

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        Subtitle A--Regulation of Over-the-Counter Swaps Markets

PART I--REGULATORY AUTHORITY

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SEC. 712. REVIEW OF REGULATORY AUTHORITY.

  (a) * * *

           *       *       *       *       *       *       *

  [(f) Rules and Registration Before Final Effective Dates.--
Beginning on the date of enactment of this Act and 
notwithstanding the effective date of any provision of this 
Act, the Commodity Futures Trading Commission and the 
Securities and Exchange Commission may, in order to prepare for 
the effective dates of the provisions of this Act--
          [(1) promulgate rules, regulations, or orders 
        permitted or required by this Act;
          [(2) conduct studies and prepare reports and 
        recommendations required by this Act;
          [(3) register persons under the provisions of this 
        Act; and
          [(4) exempt persons, agreements, contracts, or 
        transactions from provisions of this Act, under the 
        terms contained in this Act,
provided, however, that no action by the Commodity Futures 
Trading Commission or the Securities and Exchange Commission 
described in paragraphs (1) through (4) shall become effective 
prior to the effective date applicable to such action under the 
provisions of this Act.]
  (f) Rules and Registration Before Final Effective Dates.--
          (1) In general.--Beginning on the date of enactment 
        of this Act and notwithstanding the effective date of 
        any provision of this Act, the Commodity Futures 
        Trading Commission and the Securities and Exchange 
        Commission may, in order to prepare for the effective 
        dates of the provisions of this Act--
                  (A) promulgate rules, regulations, or orders 
                permitted or required by this Act;
                  (B) conduct studies and prepare reports and 
                recommendations required by this Act;
                  (C) register persons under the provisions of 
                this Act; and
                  (D) exempt persons, agreements, contracts, or 
                transactions from provisions of this Act, under 
                the terms contained in this Act.
          (2) Effective date.--(A) Notwithstanding paragraph 
        (1), an action by the Commodity Futures Trading 
        Commission or the Securities and Exchange Commission 
        described in paragraph (1) shall not become effective 
        before the effective date applicable to the action 
        under this Act, except as provided in paragraph (3).
          (B) Notwithstanding any provision of this Act (other 
        than paragraph (3) and sections 721(a)(4) and 721(f)), 
        this title and the regulations under this title shall 
        become effective on the latest of--
                  (i) December 31, 2012;
                  (ii) 90 days after the publication of the 
                relevant final rule or regulation in the 
                Federal Register or such later date as may be 
                specified in the final rule or regulation; or
                  (iii) the effective date otherwise applicable 
                to this title.
          (3) Exceptions.--
                  (A) Certain definitions.--Notwithstanding any 
                other provision of this Act, in order to assist 
                persons subject to this title in coming into 
                compliance with the provisions of this title on 
                a timely basis, the Commodity Futures Trading 
                Commission and the Securities and Exchange 
                Commission, in consultation with the Board of 
                Governors, shall adopt definitions further 
                defining the terms specified in subsection 
                (d)(1) not later than 360 days after the date 
                of the enactment of this Act. Such definitions 
                shall become effective 90 days after their 
                publication in the Federal Register.
                  (B) Regulatory reporting.--
                          (i) Swap data reporting.--
                        Notwithstanding any other provision of 
                        this Act, sections 2(h)(5) and 4r of 
                        the Commodity Exchange Act and the 
                        rules and regulations of the Commodity 
                        Futures Trading Commission issued under 
                        such sections shall become effective on 
                        the later of--
                                  (I) 90 days after the 
                                publication of the relevant 
                                final rule or regulation in the 
                                Federal Register, or such later 
                                date as may be specified in the 
                                final rule or regulation; or
                                  (II) the effective date 
                                otherwise applicable to such 
                                sections.
                          (ii) Security-based swap data 
                        reporting.--Sections 3C(e) and 13A(a) 
                        of the Securities Exchange Act of 1934 
                        and the rules and regulations of the 
                        Securities and Exchange Commission 
                        issued under such sections shall become 
                        effective on the later of--
                                  (I) 90 days after the 
                                publication of the relevant 
                                final rule or regulation in the 
                                Federal Register, or such later 
                                date as may be specified in the 
                                rule or regulation; or
                                  (II) the effective date 
                                otherwise applicable to such 
                                sections.
                          (iii) Swap data repositories.--To 
                        facilitate compliance, before December 
                        31, 2012, with the regulatory reporting 
                        provisions of this section, the 
                        Commodity Futures Trading Commission 
                        and the Securities and Exchange 
                        Commission may authorize the reporting 
                        of swap data and security-based swap 
                        data to any person then conducting the 
                        business described in section 1a(48) of 
                        the Commodity Exchange Act (7 U.S.C. 
                        1a(48)) or section 3(a)(75) of the 
                        Securities Exchange Act of 1934 (15 
                        U.S.C. 78m), respectively, who has--
                                  (I) provided notice to the 
                                relevant Commission of its 
                                intention to register as a swap 
                                data repository or security-
                                based swap data repository, as 
                                applicable; and
                                  (II) made such undertakings 
                                to the relevant Commission as 
                                such Commission has determined 
                                to be appropriate and in the 
                                public interest, consistent 
                                with this title.
  (g) Implementation Analysis.--Notwithstanding any other 
provision of this title, the Commodity Futures Trading 
Commission and the Securities and Exchange Commission shall, 
before prescribing final rules and regulations under this 
title--
          (1) conduct public hearings and roundtables and take 
        testimony of affected market participants, experts and 
        other interested parties, and solicit public comment, 
        regarding--
                  (A) the time and resources that would be 
                required of affected parties in order to 
                develop systems and infrastructure necessary to 
                comply with any rules and regulations proposed 
                or then contemplated by the relevant 
                Commission;
                  (B) any alternative approaches capable of 
                accomplishing the relevant Commission's 
                rulemaking objectives; and
                  (C) the time and resources that would be 
                required of affected parties in order to 
                develop policies and procedures designed to 
                comply with any rules and regulations proposed 
                or then contemplated by the relevant 
                Commission, and
          (2) take such testimony and comment into account in--
                  (A) performing the cost-benefit analysis 
                required under Federal law in connection with 
                its adoption of the relevant final rules and 
                regulations; and
                  (B) determining the effective date of the 
                relevant final rules and regulations.

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                              ----------                              


                         COMMODITY EXCHANGE ACT



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SEC. 2. JURISDICTION OF COMMISSION; LIABILITY OF PRINCIPAL FOR ACT OF 
                    AGENT; COMMODITY FUTURES TRADING COMMISSION; 
                    TRANSACTION IN INTERSTATE COMMERCE.

  (a) Jurisdiction of Commission; Commodity Futures Trading 
Commission.--
          (1) Jurisdiction of commission.--
                  (A) * * *

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                  (J)(i) Notwithstanding any other provision of 
                this Act, the Commission may exempt, in whole 
                or in part, a person from the registration and 
                related regulatory requirements of this Act if 
                and to the extent that the Commission 
                determines that--
                          (I) the person is subject to 
                        comprehensive supervision and 
                        regulation under a regulatory scheme 
                        administered by another domestic 
                        regulatory authority or the appropriate 
                        governmental authorities in the 
                        person's home country that is 
                        comparable to the relevant provisions 
                        of this Act,
                          (II) adequate information-sharing 
                        arrangements are in effect between the 
                        Commission and the other regulatory 
                        authority, and
                          (III) the exemption would be 
                        consistent with the public interest.
                  (ii) The Commission may condition any such 
                exemption on compliance with all or any part of 
                the alternate regulatory scheme, and on such 
                other terms as the Commission determines 
                appropriate, and may deem any noncompliance 
                with the altrernate regulatory scheme or other 
                terms a violation of the corresponding 
                provisions of this Act.

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                              ----------                              


                    SECURITIES EXCHANGE ACT OF 1934

TITLE I--REGULATION OF SECURITIES EXCHANGES

           *       *       *       *       *       *       *


SEC. 4F. EXEMPTIVE AUTHORITY.

  (a) In General.--Notwithstanding any other provision of this 
Act, the Commission may exempt, in whole or in part, a person 
from the registration and related regulatory requirements of 
this Act if and to the extent that the Commission determines 
that--
          (1) the person is subject to comprehensive 
        supervision and regulation under a regulatory scheme 
        administered by another regulatory authority or the 
        appropriate governmental authorities in the person's 
        home country that is comparable to the relevant 
        provisions of this Act;
          (2) adequate information-sharing arrangements are in 
        effect with the other regulatory authority; and
          (3) the exemption would be consistent with the 
        protection of investors.
  (b) Condition on Compliance.--The Commission may condition 
any such exemption on compliance with all or any part of the 
alternate regulatory scheme, and such other terms as the 
Commission determines appropriate, and may deem any 
noncompliance with the alternate regulatory scheme or other 
terms a violation of the corresponding provisions of this Act.

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