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Financial Reform Draft Bill

Financial Reform Draft Bill

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Published by FOXBusiness.com
Draft of the Restoring American Financial Stability Act of 2010
Draft of the Restoring American Financial Stability Act of 2010

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Published by: FOXBusiness.com on Jun 10, 2010
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05/24/2012

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2) (as amended by paragraph (1)) is amended by in-

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serting after subsection (c) the following:

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‘‘(d) SWAPS.—Nothing in this Act (other than sub-

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paragraphs (A), (B), (C), and (D) of subsection (a)(1),

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subsections (f) and (g), sections 1a, 2(c)(2)(A)(ii), 2(e),

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2(h), 4(c), 4a, 4b, and 4b–1, subsections (a), (b), and (g)

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of section 4c, sections 4d, 4e, 4f, 4g, 4h, 4i, 4j, 4k, 4l,

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4m, 4n, 4o, 4p, 4r, 4s, 4t, 5, 5b, 5c, 5e, and 5h, sub-

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sections (c) and (d) of section 6, sections 6c, 6d, 8, 8a,

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and 9, subsections (e)(2), (f), and (h) of section 12, sub-

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sections (a) and (b) of section 13, sections 17, 20, 21,

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and 22(a)(4), and any other provision of this Act that is

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applicable to registered entities or Commission reg-

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istrants) governs or applies to a swap.

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‘‘(e) LIMITATIONONPARTICIPATION.—It shall be

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unlawful for any person, other than an eligible contract

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participant, to enter into a swap unless the swap is en-

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tered into on, or subject to the rules of, a board of trade

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designated as a contract market under section 5.’’.

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(3) MANDATORYCLEARINGOFSWAPS.—Section

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2 of the Commodity Exchange Act (7 U.S.C. 2) is

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amended by inserting after subsection (g) (as redes-

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ignated by paragraph (1)(B)) the following:

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‘‘(h) CLEARINGREQUIREMENT.—

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‘‘(1) SUBMISSION.—

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‘‘(A) INGENERAL.—Except as provided in

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paragraphs (9) and (10), any person who is a

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party to a swap shall submit such swap for

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clearing to a derivatives clearing organization

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that is registered under this Act or a derivatives

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clearing organization that is exempt from reg-

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istration under section 5b(i) of this Act.

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‘‘(B) OPENACCESS.—The rules of a reg-

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istered derivatives clearing organization shall—

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‘‘(i) prescribe that all swaps with the

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same terms and conditions are economi-

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cally equivalent and may be offset with

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each other within the derivatives clearing

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organization; and

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‘‘(ii) provide for nondiscriminatory

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clearing of a swap executed bilaterally or

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on or through the rules of an unaffiliated

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designated contract market or swap execu-

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tion facility, subject to the requirements of

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section 5(b).

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‘‘(2) COMMISSIONAPPROVAL.—

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‘‘(A) INGENERAL.—A derivatives clearing

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organization shall submit to the Commission for

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prior approval any group, category, type, or

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class of swaps that the derivatives clearing or-

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O:\GRA\gra10894.XML [file 8 of 26]

S.L.C

ganization seeks to accept for clearing, which

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submission the Commission shall make available

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to the public.

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‘‘(B) DEADLINE.—The Commission shall

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take final action on a request submitted pursu-

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ant to subparagraph (A) not later than 90 days

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after submission of the request, unless the de-

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rivatives clearing organization submitting the

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request agrees to an extension of the time limi-

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tation established under this subparagraph.

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‘‘(C) APPROVAL.—The Commission shall

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approve, unconditionally or subject to such

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terms and conditions as the Commission deter-

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mines to be appropriate, any request submitted

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pursuant to subparagraph (A) if the Commis-

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sion finds that the request is consistent with

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section 5b(c)(2). The Commission shall not ap-

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prove any such request if the Commission does

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not make such finding.

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‘‘(D) RULES.—The Commission shall

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adopt rules for a derivatives clearing organiza-

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tion’s submission for approval, pursuant to this

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paragraph, of any group, category, type, or

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class of swaps that the derivative clearing orga-

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nization seeks to accept for clearing.

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‘‘(3) STAYOFCLEARINGREQUIREMENT.—At

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any time after issuance of an approval pursuant to

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paragraph (2):

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‘‘(A) REVIEWPROCESS.—The Commission,

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on application of a counterparty to a swap or

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on its own initiative, may stay the clearing re-

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quirement of paragraph (1) until the Commis-

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sion completes a review of the terms of the

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swap, or the group, category, type, or class of

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swaps, and the clearing arrangement.

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‘‘(B) DEADLINE.—The Commission shall

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complete a review undertaken pursuant to sub-

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paragraph (A) not later than 90 days after

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issuance of the stay, unless the derivatives

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clearing organization that clears the swap, or

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the group, category, type, or class of swaps,

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agrees to an extension of the time limitation es-

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tablished under this subparagraph.

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‘‘(C) DETERMINATION.—Upon completion

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of the review undertaken pursuant to subpara-

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graph (A)—

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‘‘(i) the Commission may determine,

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unconditionally or subject to such terms

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and conditions as the Commission deter-

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mines to be appropriate, that the swap, or

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the group, category, type, or class of

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swaps, must be cleared pursuant to this

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