[United States Statutes at Large, Volume 124, 111th Congress, 2nd Session]
[From the U.S. Government Printing Office, www.gpo.gov]


Public Law 111-203
111th Congress

An Act


 
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. <>

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, <>
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short <> Title.--This Act may be cited
as the ``Dodd-Frank Wall Street Reform and Consumer Protection Act''.

(b) Table of Contents.--The table of contents for this Act is as
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Severability.
Sec. 4. Effective date.
Sec. 5. Budgetary effects.
Sec. 6. Antitrust savings clause.

TITLE I--FINANCIAL STABILITY

Sec. 101. Short title.
Sec. 102. Definitions.

Subtitle A--Financial Stability Oversight Council

Sec. 111. Financial Stability Oversight Council established.
Sec. 112. Council authority.
Sec. 113. Authority to require supervision and regulation of certain
nonbank financial companies.
Sec. 114. Registration of nonbank financial companies supervised by the
Board of Governors.
Sec. 115. Enhanced supervision and prudential standards for nonbank
financial companies supervised by the Board of Governors and
certain bank holding companies.
Sec. 116. Reports.
Sec. 117. Treatment of certain companies that cease to be bank holding
companies.
Sec. 118. Council funding.
Sec. 119. Resolution of supervisory jurisdictional disputes among member
agencies.
Sec. 120. Additional standards applicable to activities or practices for
financial stability purposes.
Sec. 121. Mitigation of risks to financial stability.
Sec. 122. GAO Audit of Council.
Sec. 123. Study of the effects of size and complexity of financial
institutions on capital market efficiency and economic
growth.

Subtitle B--Office of Financial Research

Sec. 151. Definitions.
Sec. 152. Office of Financial Research established.
Sec. 153. Purpose and duties of the Office.
Sec. 154. Organizational structure; responsibilities of primary
programmatic units.
Sec. 155. Funding.
Sec. 156. Transition oversight.

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Subtitle C--Additional Board of Governors Authority for Certain Nonbank
Financial Companies and Bank Holding Companies

Sec. 161. Reports by and examinations of nonbank financial companies by
the Board of Governors.
Sec. 162. Enforcement.
Sec. 163. Acquisitions.
Sec. 164. Prohibition against management interlocks between certain
financial companies.
Sec. 165. Enhanced supervision and prudential standards for nonbank
financial companies supervised by the Board of Governors and
certain bank holding companies.
Sec. 166. Early remediation requirements.
Sec. 167. Affiliations.
Sec. 168. Regulations.
Sec. 169. Avoiding duplication.
Sec. 170. Safe harbor.
Sec. 171. Leverage and risk-based capital requirements.
Sec. 172. Examination and enforcement actions for insurance and orderly
liquidation purposes.
Sec. 173. Access to United States financial market by foreign
institutions.
Sec. 174. Studies and reports on holding company capital requirements.
Sec. 175. International policy coordination.
Sec. 176. Rule of construction.

TITLE II--ORDERLY LIQUIDATION AUTHORITY

Sec. 201. Definitions.
Sec. 202. Judicial review.
Sec. 203. Systemic risk determination.
Sec. 204. Orderly liquidation of covered financial companies.
Sec. 205. Orderly liquidation of covered brokers and dealers.
Sec. 206. Mandatory terms and conditions for all orderly liquidation
actions.
Sec. 207. Directors not liable for acquiescing in appointment of
receiver.
Sec. 208. Dismissal and exclusion of other actions.
Sec. 209. Rulemaking; non-conflicting law.
Sec. 210. Powers and duties of the Corporation.
Sec. 211. Miscellaneous provisions.
Sec. 212. Prohibition of circumvention and prevention of conflicts of
interest.
Sec. 213. Ban on certain activities by senior executives and directors.
Sec. 214. Prohibition on taxpayer funding.
Sec. 215. Study on secured creditor haircuts.
Sec. 216. Study on bankruptcy process for financial and nonbank
financial institutions
Sec. 217. Study on international coordination relating to bankruptcy
process for nonbank financial institutions

TITLE III--TRANSFER OF POWERS TO THE COMPTROLLER OF THE CURRENCY, THE
CORPORATION, AND THE BOARD OF GOVERNORS

Sec. 300. Short title.
Sec. 301. Purposes.
Sec. 302. Definition.

Subtitle A--Transfer of Powers and Duties

Sec. 311. Transfer date.
Sec. 312. Powers and duties transferred.
Sec. 313. Abolishment.
Sec. 314. Amendments to the Revised Statutes.
Sec. 315. Federal information policy.
Sec. 316. Savings provisions.
Sec. 317. References in Federal law to Federal banking agencies.
Sec. 318. Funding.
Sec. 319. Contracting and leasing authority.

Subtitle B--Transitional Provisions

Sec. 321. Interim use of funds, personnel, and property of the Office of
Thrift Supervision.
Sec. 322. Transfer of employees.
Sec. 323. Property transferred.
Sec. 324. Funds transferred.
Sec. 325. Disposition of affairs.
Sec. 326. Continuation of services.

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Sec. 327. Implementation plan and reports.

Subtitle C--Federal Deposit Insurance Corporation

Sec. 331. Deposit insurance reforms.
Sec. 332. Elimination of procyclical assessments.
Sec. 333. Enhanced access to information for deposit insurance purposes.
Sec. 334. Transition reserve ratio requirements to reflect new
assessment base.
Sec. 335. Permanent increase in deposit and share insurance.
Sec. 336. Management of the Federal Deposit Insurance Corporation.

Subtitle D--Other Matters

Sec. 341. Branching.
Sec. 342. Office of Minority and Women Inclusion.
Sec. 343. Insurance of transaction accounts.

Subtitle E--Technical and Conforming Amendments

Sec. 351. Effective date.
Sec. 352. Balanced Budget and Emergency Deficit Control Act of 1985.
Sec. 353. Bank Enterprise Act of 1991.
Sec. 354. Bank Holding Company Act of 1956.
Sec. 355. Bank Holding Company Act Amendments of 1970.
Sec. 356. Bank Protection Act of 1968.
Sec. 357. Bank Service Company Act.
Sec. 358. Community Reinvestment Act of 1977.
Sec. 359. Crime Control Act of 1990.
Sec. 360. Depository Institution Management Interlocks Act.
Sec. 361. Emergency Homeowners' Relief Act.
Sec. 362. Federal Credit Union Act.
Sec. 363. Federal Deposit Insurance Act.
Sec. 364. Federal Home Loan Bank Act.
Sec. 365. Federal Housing Enterprises Financial Safety and Soundness Act
of 1992.
Sec. 366. Federal Reserve Act.
Sec. 367. Financial Institutions Reform, Recovery, and Enforcement Act
of 1989.
Sec. 368. Flood Disaster Protection Act of 1973.
Sec. 369. Home Owners' Loan Act.
Sec. 370. Housing Act of 1948.
Sec. 371. Housing and Community Development Act of 1992.
Sec. 372. Housing and Urban-Rural Recovery Act of 1983.
Sec. 373. National Housing Act.
Sec. 374. Neighborhood Reinvestment Corporation Act.
Sec. 375. Public Law 93-100.
Sec. 376. Securities Exchange Act of 1934.
Sec. 377. Title 18, United States Code.
Sec. 378. Title 31, United States Code.

TITLE IV--REGULATION OF ADVISERS TO HEDGE FUNDS AND OTHERS

Sec. 401. Short title.
Sec. 402. Definitions.
Sec. 403. Elimination of private adviser exemption; limited exemption
for foreign private advisers; limited intrastate exemption.
Sec. 404. Collection of systemic risk data; reports; examinations;
disclosures.
Sec. 405. Disclosure provision amendment.
Sec. 406. Clarification of rulemaking authority.
Sec. 407. Exemption of venture capital fund advisers.
Sec. 408. Exemption of and record keeping by private equity fund
advisers.
Sec. 409. Family offices.
Sec. 410. State and Federal responsibilities; asset threshold for
Federal registration of investment advisers.
Sec. 411. Custody of client assets.
Sec. 412. Adjusting the accredited investor standard.
Sec. 413. GAO study and report on accredited investors.
Sec. 414. GAO study on self-regulatory organization for private funds.
Sec. 415. Commission study and report on short selling.
Sec. 416. Transition period.

TITLE V--INSURANCE

Subtitle A--Office of National Insurance

Sec. 501. Short title.
Sec. 502. Federal Insurance Office.

Subtitle B--State-Based Insurance Reform

Sec. 511. Short title.

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Sec. 512. Effective date.

PART I--Nonadmitted Insurance

Sec. 521. Reporting, payment, and allocation of premium taxes.
Sec. 522. Regulation of nonadmitted insurance by insured's home State.
Sec. 523. Participation in national producer database.
Sec. 524. Uniform standards for surplus lines eligibility.
Sec. 525. Streamlined application for commercial purchasers.
Sec. 526. GAO study of nonadmitted insurance market.
Sec. 527. Definitions.

PART II--Reinsurance

Sec. 531. Regulation of credit for reinsurance and reinsurance
agreements.
Sec. 532. Regulation of reinsurer solvency.
Sec. 533. Definitions.

PART III--Rule of Construction

Sec. 541. Rule of construction.
Sec. 542. Severability.

TITLE VI--IMPROVEMENTS TO REGULATION OF BANK AND SAVINGS ASSOCIATION
HOLDING COMPANIES AND DEPOSITORY INSTITUTIONS

Sec. 601. Short title.
Sec. 602. Definition.
Sec. 603. Moratorium and study on treatment of credit card banks,
industrial loan companies, and certain other companies under
the Bank Holding Company Act of 1956.
Sec. 604. Reports and examinations of holding companies; regulation of
functionally regulated subsidiaries.
Sec. 605. Assuring consistent oversight of permissible activities of
depository institution subsidiaries of holding companies.
Sec. 606. Requirements for financial holding companies to remain well
capitalized and well managed.
Sec. 607. Standards for interstate acquisitions.
Sec. 608. Enhancing existing restrictions on bank transactions with
affiliates.
Sec. 609. Eliminating exceptions for transactions with financial
subsidiaries.
Sec. 610. Lending limits applicable to credit exposure on derivative
transactions, repurchase agreements, reverse repurchase
agreements, and securities lending and borrowing
transactions.
Sec. 611. Consistent treatment of derivative transactions in lending
limits.
Sec. 612. Restriction on conversions of troubled banks.
Sec. 613. De novo branching into States.
Sec. 614. Lending limits to insiders.
Sec. 615. Limitations on purchases of assets from insiders.
Sec. 616. Regulations regarding capital levels.
Sec. 617. Elimination of elective investment bank holding company
framework.
Sec. 618. Securities holding companies.
Sec. 619. Prohibitions on proprietary trading and certain relationships
with hedge funds and private equity funds.
Sec. 620. Study of bank investment activities.
Sec. 621. Conflicts of interest.
Sec. 622. Concentration limits on large financial firms.
Sec. 623. Interstate merger transactions.
Sec. 624. Qualified thrift lenders.
Sec. 625. Treatment of dividends by certain mutual holding companies.
Sec. 626. Intermediate holding companies.
Sec. 627. Interest-bearing transaction accounts authorized.
Sec. 628. Credit card bank small business lending.

TITLE VII--WALL STREET TRANSPARENCY AND ACCOUNTABILITY

Sec. 701. Short title.

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

PART I--Regulatory Authority

Sec. 711. Definitions.
Sec. 712. Review of regulatory authority.
Sec. 713. Portfolio margining conforming changes.
Sec. 714. Abusive swaps.
Sec. 715. Authority to prohibit participation in swap activities.

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Sec. 716. Prohibition against Federal Government bailouts of swaps
entities.
Sec. 717. New product approval CFTC--SEC process.
Sec. 718. Determining status of novel derivative products.
Sec. 719. Studies.
Sec. 720. Memorandum.

PART II--Regulation of Swap Markets

Sec. 721. Definitions.
Sec. 722. Jurisdiction.
Sec. 723. Clearing.
Sec. 724. Swaps; segregation and bankruptcy treatment.
Sec. 725. Derivatives clearing organizations.
Sec. 726. Rulemaking on conflict of interest.
Sec. 727. Public reporting of swap transaction data.
Sec. 728. Swap data repositories.
Sec. 729. Reporting and recordkeeping.
Sec. 730. Large swap trader reporting.
Sec. 731. Registration and regulation of swap dealers and major swap
participants.
Sec. 732. Conflicts of interest.
Sec. 733. Swap execution facilities.
Sec. 734. Derivatives transaction execution facilities and exempt boards
of trade.
Sec. 735. Designated contract markets.
Sec. 736. Margin.
Sec. 737. Position limits.
Sec. 738. Foreign boards of trade.
Sec. 739. Legal certainty for swaps.
Sec. 740. Multilateral clearing organizations.
Sec. 741. Enforcement.
Sec. 742. Retail commodity transactions.
Sec. 743. Other authority.
Sec. 744. Restitution remedies.
Sec. 745. Enhanced compliance by registered entities.
Sec. 746. Insider trading.
Sec. 747. Antidisruptive practices authority.
Sec. 748. Commodity whistleblower incentives and protection.
Sec. 749. Conforming amendments.
Sec. 750. Study on oversight of carbon markets.
Sec. 751. Energy and environmental markets advisory committee.
Sec. 752. International harmonization.
Sec. 753. Anti-manipulation authority.
Sec. 754. Effective date.

Subtitle B--Regulation of Security-Based Swap Markets

Sec. 761. Definitions under the Securities Exchange Act of 1934.
Sec. 762. Repeal of prohibition on regulation of security-based swap
agreements.
Sec. 763. Amendments to the Securities Exchange Act of 1934.
Sec. 764. Registration and regulation of security-based swap dealers and
major security-based swap participants.
Sec. 765. Rulemaking on conflict of interest.
Sec. 766. Reporting and recordkeeping.
Sec. 767. State gaming and bucket shop laws.
Sec. 768. Amendments to the Securities Act of 1933; treatment of
security-based swaps.
Sec. 769. Definitions under the Investment Company Act of 1940.
Sec. 770. Definitions under the Investment Advisers Act of 1940.
Sec. 771. Other authority.
Sec. 772. Jurisdiction.
Sec. 773. Civil penalties.
Sec. 774. Effective date.

TITLE VIII--PAYMENT, CLEARING, AND SETTLEMENT SUPERVISION

Sec. 801. Short title.
Sec. 802. Findings and purposes.
Sec. 803. Definitions.
Sec. 804. Designation of systemic importance.
Sec. 805. Standards for systemically important financial market
utilities and payment, clearing, or settlement activities.
Sec. 806. Operations of designated financial market utilities.
Sec. 807. Examination of and enforcement actions against designated
financial market utilities.
Sec. 808. Examination of and enforcement actions against financial
institutions subject to standards for designated activities.

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Sec. 809. Requests for information, reports, or records.
Sec. 810. Rulemaking.
Sec. 811. Other authority.
Sec. 812. Consultation.
Sec. 813. Common framework for designated clearing entity risk
management.
Sec. 814. Effective date.

TITLE IX--INVESTOR PROTECTIONS AND IMPROVEMENTS TO THE REGULATION OF
SECURITIES

Sec. 901. Short title.

Subtitle A--Increasing Investor Protection

Sec. 911. Investor Advisory Committee established.
Sec. 912. Clarification of authority of the Commission to engage in
investor testing.
Sec. 913. Study and rulemaking regarding obligations of brokers,
dealers, and investment advisers.
Sec. 914. Study on enhancing investment adviser examinations.
Sec. 915. Office of the Investor Advocate.
Sec. 916. Streamlining of filing procedures for self-regulatory
organizations.
Sec. 917. Study regarding financial literacy among investors.
Sec. 918. Study regarding mutual fund advertising.
Sec. 919. Clarification of Commission authority to require investor
disclosures before purchase of investment products and
services.
Sec. 919A. Study on conflicts of interest.
Sec. 919B. Study on improved investor access to information on
investment advisers and broker-dealers.
Sec. 919C. Study on financial planners and the use of financial
designations.
Sec. 919D. Ombudsman.

Subtitle B--Increasing Regulatory Enforcement and Remedies

Sec. 921. Authority to restrict mandatory pre-dispute arbitration.
Sec. 922. Whistleblower protection.
Sec. 923. Conforming amendments for whistleblower protection.
Sec. 924. Implementation and transition provisions for whistleblower
protection.
Sec. 925. Collateral bars.
Sec. 926. Disqualifying felons and other ``bad actors'' from Regulation
D offerings.
Sec. 927. Equal treatment of self-regulatory organization rules.
Sec. 928. Clarification that section 205 of the Investment Advisers Act
of 1940 does not apply to State-registered advisers.
Sec. 929. Unlawful margin lending.
Sec. 929A. Protection for employees of subsidiaries and affiliates of
publicly traded companies.
Sec. 929B. Fair Fund amendments.
Sec. 929C. Increasing the borrowing limit on Treasury loans.
Sec. 929D. Lost and stolen securities.
Sec. 929E. Nationwide service of subpoenas.
Sec. 929F. Formerly associated persons.
Sec. 929G. Streamlined hiring authority for market specialists.
Sec. 929H. SIPC Reforms.
Sec. 929I. Protecting confidentiality of materials submitted to the
Commission.
Sec. 929J. Expansion of audit information to be produced and exchanged.
Sec. 929K. Sharing privileged information with other authorities.
Sec. 929L. Enhanced application of antifraud provisions.
Sec. 929M. Aiding and abetting authority under the Securities Act and
the Investment Company Act.
Sec. 929N. Authority to impose penalties for aiding and abetting
violations of the Investment Advisers Act.
Sec. 929O. Aiding and abetting standard of knowledge satisfied by
recklessness.
Sec. 929P. Strengthening enforcement by the Commission.
Sec. 929Q. Revision to recordkeeping rule.
Sec. 929R. Beneficial ownership and short-swing profit reporting.
Sec. 929S. Fingerprinting.
Sec. 929T. Equal treatment of self-regulatory organization rules.
Sec. 929U. Deadline for completing examinations, inspections and
enforcement actions.
Sec. 929V. Security Investor Protection Act amendments.
Sec. 929W. Notice to missing security holders.
Sec. 929X. Short sale reforms.
Sec. 929Y. Study on extraterritorial private rights of action.
Sec. 929Z. GAO study on securities litigation.

Subtitle C--Improvements to the Regulation of Credit Rating Agencies

Sec. 931. Findings.

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Sec. 932. Enhanced regulation, accountability, and transparency of
nationally recognized statistical rating organizations.
Sec. 933. State of mind in private actions.
Sec. 934. Referring tips to law enforcement or regulatory authorities.
Sec. 935. Consideration of information from sources other than the
issuer in rating decisions.
Sec. 936. Qualification standards for credit rating analysts.
Sec. 937. Timing of regulations.
Sec. 938. Universal ratings symbols.
Sec. 939. Removal of statutory references to credit ratings.
Sec. 939A. Review of reliance on ratings.
Sec. 939B. Elimination of exemption from fair disclosure rule.
Sec. 939C. Securities and Exchange Commission study on strengthening
credit rating agency independence.
Sec. 939D. Government Accountability Office study on alternative
business models.
Sec. 939E. Government Accountability Office study on the creation of an
independent professional analyst organization.
Sec. 939F. Study and rulemaking on assigned credit ratings.
Sec. 939G. Effect of Rule 436(g).
Sec. 939H. Sense of Congress.

Subtitle D--Improvements to the Asset-Backed Securitization Process

Sec. 941. Regulation of credit risk retention.
Sec. 942. Disclosures and reporting for asset-backed securities.
Sec. 943. Representations and warranties in asset-backed offerings.
Sec. 944. Exempted transactions under the Securities Act of 1933.
Sec. 945. Due diligence analysis and disclosure in asset-backed
securities issues.
Sec. 946. Study on the macroeconomic effects of risk retention
requirements.

Subtitle E--Accountability and Executive Compensation

Sec. 951. Shareholder vote on executive compensation disclosures.
Sec. 952. Compensation committee independence.
Sec. 953. Executive compensation disclosures.
Sec. 954. Recovery of erroneously awarded compensation.
Sec. 955. Disclosure regarding employee and director hedging.
Sec. 956. Enhanced compensation structure reporting.
Sec. 957. Voting by brokers.

Subtitle F--Improvements to the Management of the Securities and
Exchange Commission

Sec. 961. Report and certification of internal supervisory controls.
Sec. 962. Triennial report on personnel management.
Sec. 963. Annual financial controls audit.
Sec. 964. Report on oversight of national securities associations.
Sec. 965. Compliance examiners.
Sec. 966. Suggestion program for employees of the Commission.
Sec. 967. Commission organizational study and reform.
Sec. 968. Study on SEC revolving door.

Subtitle G--Strengthening Corporate Governance

Sec. 971. Proxy access.
Sec. 972. Disclosures regarding chairman and CEO structures.

Subtitle H--Municipal Securities

Sec. 975. Regulation of municipal securities and changes to the board of
the MSRB.
Sec. 976. Government Accountability Office study of increased disclosure
to investors.
Sec. 977. Government Accountability Office study on the municipal
securities markets.
Sec. 978. Funding for Governmental Accounting Standards Board.
Sec. 979. Commission Office of Municipal Securities.

Subtitle I--Public Company Accounting Oversight Board, Portfolio
Margining, and Other Matters

Sec. 981. Authority to share certain information with foreign
authorities.
Sec. 982. Oversight of brokers and dealers.
Sec. 983. Portfolio margining.
Sec. 984. Loan or borrowing of securities.
Sec. 985. Technical corrections to Federal securities laws.
Sec. 986. Conforming amendments relating to repeal of the Public Utility
Holding Company Act of 1935.

[[Page 1383]]

Sec. 987. Amendment to definition of material loss and nonmaterial
losses to the Deposit Insurance Fund for purposes of
Inspector General reviews.
Sec. 988. Amendment to definition of material loss and nonmaterial
losses to the National Credit Union Share Insurance Fund for
purposes of Inspector General reviews.
Sec. 989. Government Accountability Office study on proprietary trading.
Sec. 989A. Senior investor protections.
Sec. 989B. Designated Federal entity inspectors general independence.
Sec. 989C. Strengthening Inspector General accountability.
Sec. 989D. Removal of Inspectors General of designated Federal entities.
Sec. 989E. Additional oversight of financial regulatory system.
Sec. 989F. GAO study of person to person lending.
Sec. 989G. Exemption for nonaccelerated filers.
Sec. 989H. Corrective responses by heads of certain establishments to
deficiencies identified by Inspectors General.
Sec. 989I. GAO study regarding exemption for smaller issuers.
Sec. 989J. Further promoting the adoption of the NAIC Model Regulations
that enhance protection of seniors and other consumers.

Subtitle J--Securities and Exchange Commission Match Funding

Sec. 991. Securities and Exchange Commission match funding.

TITLE X--BUREAU OF CONSUMER FINANCIAL PROTECTION

Sec. 1001. Short title.
Sec. 1002. Definitions.

Subtitle A--Bureau of Consumer Financial Protection

Sec. 1011. Establishment of the Bureau of Consumer Financial Protection.
Sec. 1012. Executive and administrative powers.
Sec. 1013. Administration.
Sec. 1014. Consumer Advisory Board.
Sec. 1015. Coordination.
Sec. 1016. Appearances before and reports to Congress.
Sec. 1017. Funding; penalties and fines.
Sec. 1018. Effective date.

Subtitle B--General Powers of the Bureau

Sec. 1021. Purpose, objectives, and functions.
Sec. 1022. Rulemaking authority.
Sec. 1023. Review of Bureau regulations.
Sec. 1024. Supervision of nondepository covered persons.
Sec. 1025. Supervision of very large banks, savings associations, and
credit unions.
Sec. 1026. Other banks, savings associations, and credit unions.
Sec. 1027. Limitations on authorities of the Bureau; preservation of
authorities.
Sec. 1028. Authority to restrict mandatory pre-dispute arbitration.
Sec. 1029. Exclusion for auto dealers.
Sec. 1029A. Effective date.

Subtitle C--Specific Bureau Authorities

Sec. 1031. Prohibiting unfair, deceptive, or abusive acts or practices.
Sec. 1032. Disclosures.
Sec. 1033. Consumer rights to access information.
Sec. 1034. Response to consumer complaints and inquiries.
Sec. 1035. Private education loan ombudsman.
Sec. 1036. Prohibited acts.
Sec. 1037. Effective date.

Subtitle D--Preservation of State Law

Sec. 1041. Relation to State law.
Sec. 1042. Preservation of enforcement powers of States.
Sec. 1043. Preservation of existing contracts.
Sec. 1044. State law preemption standards for national banks and
subsidiaries clarified.
Sec. 1045. Clarification of law applicable to nondepository institution
subsidiaries.
Sec. 1046. State law preemption standards for Federal savings
associations and subsidiaries clarified.
Sec. 1047. Visitorial standards for national banks and savings
associations.
Sec. 1048. Effective date.

Subtitle E--Enforcement Powers

Sec. 1051. Definitions.

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Sec. 1052. Investigations and administrative discovery.
Sec. 1053. Hearings and adjudication proceedings.
Sec. 1054. Litigation authority.
Sec. 1055. Relief available.
Sec. 1056. Referrals for criminal proceedings.
Sec. 1057. Employee protection.
Sec. 1058. Effective date.

Subtitle F--Transfer of Functions and Personnel; Transitional Provisions

Sec. 1061. Transfer of consumer financial protection functions.
Sec. 1062. Designated transfer date.
Sec. 1063. Savings provisions.
Sec. 1064. Transfer of certain personnel.
Sec. 1065. Incidental transfers.
Sec. 1066. Interim authority of the Secretary.
Sec. 1067. Transition oversight.

Subtitle G--Regulatory Improvements

Sec. 1071. Small business data collection.
Sec. 1072. Assistance for economically vulnerable individuals and
families.
Sec. 1073. Remittance transfers.
Sec. 1074. Department of the Treasury study on ending the
conservatorship of Fannie Mae, Freddie Mac, and reforming the
housing finance system.
Sec. 1075. Reasonable fees and rules for payment card transactions.
Sec. 1076. Reverse mortgage study and regulations.
Sec. 1077. Report on private education loans and private educational
lenders.
Sec. 1078. Study and report on credit scores.
Sec. 1079. Review, report, and program with respect to exchange
facilitators.
Sec. 1079A. Financial fraud provisions.

Subtitle H--Conforming Amendments

Sec. 1081. Amendments to the Inspector General Act.
Sec. 1082. Amendments to the Privacy Act of 1974.
Sec. 1083. Amendments to the Alternative Mortgage Transaction Parity Act
of 1982.
Sec. 1084. Amendments to the Electronic Fund Transfer Act.
Sec. 1085. Amendments to the Equal Credit Opportunity Act.
Sec. 1086. Amendments to the Expedited Funds Availability Act.
Sec. 1087. Amendments to the Fair Credit Billing Act.
Sec. 1088. Amendments to the Fair Credit Reporting Act and the Fair and
Accurate Credit Transactions Act of 2003.
Sec. 1089. Amendments to the Fair Debt Collection Practices Act.
Sec. 1090. Amendments to the Federal Deposit Insurance Act.
Sec. 1091. Amendment to Federal Financial Institutions Examination
Council Act of 1978.
Sec. 1092. Amendments to the Federal Trade Commission Act.
Sec. 1093. Amendments to the Gramm-Leach-Bliley Act.
Sec. 1094. Amendments to the Home Mortgage Disclosure Act of 1975.
Sec. 1095. Amendments to the Homeowners Protection Act of 1998.
Sec. 1096. Amendments to the Home Ownership and Equity Protection Act of
1994.
Sec. 1097. Amendments to the Omnibus Appropriations Act, 2009.
Sec. 1098. Amendments to the Real Estate Settlement Procedures Act of
1974.
Sec. 1098A. Amendments to the Interstate Land Sales Full Disclosure Act.
Sec. 1099. Amendments to the Right to Financial Privacy Act of 1978.
Sec. 1100. Amendments to the Secure and Fair Enforcement for Mortgage
Licensing Act of 2008.
Sec. 1100A. Amendments to the Truth in Lending Act.
Sec. 1100B. Amendments to the Truth in Savings Act.
Sec. 1100C. Amendments to the Telemarketing and Consumer Fraud and Abuse
Prevention Act.
Sec. 1100D. Amendments to the Paperwork Reduction Act.
Sec. 1100E. Adjustments for inflation in the Truth in Lending Act.
Sec. 1100F. Use of consumer reports.
Sec. 1100G. Small business fairness and regulatory transparency.
Sec. 1100H. Effective date.

TITLE XI--FEDERAL RESERVE SYSTEM PROVISIONS

Sec. 1101. Federal Reserve Act amendments on emergency lending
authority.
Sec. 1102. Reviews of special Federal reserve credit facilities.
Sec. 1103. Public access to information.
Sec. 1104. Liquidity event determination.

[[Page 1385]]

Sec. 1105. Emergency financial stabilization.
Sec. 1106. Additional related amendments.
Sec. 1107. Federal Reserve Act amendments on Federal reserve bank
governance.
Sec. 1108. Federal Reserve Act amendments on supervision and regulation
policy.
Sec. 1109. GAO audit of the Federal Reserve facilities; publication of
Board actions.

TITLE XII--IMPROVING ACCESS TO MAINSTREAM FINANCIAL INSTITUTIONS

Sec. 1201. Short title.
Sec. 1202. Purpose.
Sec. 1203. Definitions.
Sec. 1204. Expanded access to mainstream financial institutions.
Sec. 1205. Low-cost alternatives to payday loans.
Sec. 1206. Grants to establish loan-loss reserve funds.
Sec. 1207. Procedural provisions.
Sec. 1208. Authorization of appropriations.
Sec. 1209. Regulations.
Sec. 1210. Evaluation and reports to Congress.

TITLE XIII--PAY IT BACK ACT

Sec. 1301. Short title.
Sec. 1302. Amendment to reduce TARP authorization.
Sec. 1303. Report.
Sec. 1304. Amendments to Housing and Economic Recovery Act of 2008.
Sec. 1305. Federal Housing Finance Agency report.
Sec. 1306. Repayment of unobligated ARRA funds.

TITLE XIV--MORTGAGE REFORM AND ANTI-PREDATORY LENDING ACT

Sec. 1400. Short title; designation as enumerated consumer law.

Subtitle A--Residential Mortgage Loan Origination Standards

Sec. 1401. Definitions.
Sec. 1402. Residential mortgage loan origination.
Sec. 1403. Prohibition on steering incentives.
Sec. 1404. Liability.
Sec. 1405. Regulations.
Sec. 1406. Study of shared appreciation mortgages.

Subtitle B--Minimum Standards For Mortgages

Sec. 1411. Ability to repay.
Sec. 1412. Safe harbor and rebuttable presumption.
Sec. 1413. Defense to foreclosure.
Sec. 1414. Additional standards and requirements.
Sec. 1415. Rule of construction.
Sec. 1416. Amendments to civil liability provisions.
Sec. 1417. Lender rights in the context of borrower deception.
Sec. 1418. Six-month notice required before reset of hybrid adjustable
rate mortgages.
Sec. 1419. Required disclosures.
Sec. 1420. Disclosures required in monthly statements for residential
mortgage loans.
Sec. 1421. Report by the GAO.
Sec. 1422. State attorney general enforcement authority.

Subtitle C--High-Cost Mortgages

Sec. 1431. Definitions relating to high-cost mortgages.
Sec. 1432. Amendments to existing requirements for certain mortgages.
Sec. 1433. Additional requirements for certain mortgages.

Subtitle D--Office of Housing Counseling

Sec. 1441. Short title.
Sec. 1442. Establishment of Office of Housing Counseling.
Sec. 1443. Counseling procedures.
Sec. 1444. Grants for housing counseling assistance.
Sec. 1445. Requirements to use HUD-certified counselors under HUD
programs.
Sec. 1446. Study of defaults and foreclosures.
Sec. 1447. Default and foreclosure database.
Sec. 1448. Definitions for counseling-related programs.
Sec. 1449. Accountability and transparency for grant recipients.
Sec. 1450. Updating and simplification of mortgage information booklet.

[[Page 1386]]

Sec. 1451. Home inspection counseling.
Sec. 1452. Warnings to homeowners of foreclosure rescue scams.

Subtitle E--Mortgage Servicing

Sec. 1461. Escrow and impound accounts relating to certain consumer
credit transactions.
Sec. 1462. Disclosure notice required for consumers who waive escrow
services.
Sec. 1463. Real Estate Settlement Procedures Act of 1974 amendments.
Sec. 1464. Truth in Lending Act amendments.
Sec. 1465. Escrows included in repayment analysis.

Subtitle F--Appraisal Activities

Sec. 1471. Property appraisal requirements.
Sec. 1472. Appraisal independence requirements.
Sec. 1473. Amendments relating to Appraisal Subcommittee of FFIEC,
Appraiser Independence Monitoring, Approved Appraiser
Education, Appraisal Management Companies, Appraiser
Complaint Hotline, Automated Valuation Models, and Broker
Price Opinions.
Sec. 1474. Equal Credit Opportunity Act amendment.
Sec. 1475. Real Estate Settlement Procedures Act of 1974 amendment
relating to certain appraisal fees.
Sec. 1476. GAO study on the effectiveness and impact of various
appraisal methods, valuation models and distributions
channels, and on the Home Valuation Code of conduct and the
Appraisal Subcommittee.

Subtitle G--Mortgage Resolution and Modification

Sec. 1481. Multifamily mortgage resolution program.
Sec. 1482. Home Affordable Modification Program guidelines.
Sec. 1483. Public availability of information of Making Home Affordable
Program.
Sec. 1484. Protecting tenants at foreclosure extension and
clarification.

Subtitle H--Miscellaneous Provisions

Sec. 1491. Sense of Congress regarding the importance of government-
sponsored enterprises reform to enhance the protection,
limitation, and regulation of the terms of residential
mortgage credit.
Sec. 1492. GAO study report on government efforts to combat mortgage
foreclosure rescue scams and loan modification fraud.
Sec. 1493. Reporting of mortgage data by State.
Sec. 1494. Study of effect of drywall presence on foreclosures.
Sec. 1495. Definition.
Sec. 1496. Emergency mortgage relief.
Sec. 1497. Additional assistance for Neighborhood Stabilization Program.
Sec. 1498. Legal assistance for foreclosure-related issues.

TITLE XV--MISCELLANEOUS PROVISIONS

Sec. 1501. Restrictions on use of United States funds for foreign
governments; protection of American taxpayers.
Sec. 1502. Conflict minerals.
Sec. 1503. Reporting requirements regarding coal or other mine safety.
Sec. 1504. Disclosure of payments by resource extraction issuers.
Sec. 1505. Study by the Comptroller General.
Sec. 1506. Study on core deposits and brokered deposits.

TITLE XVI--SECTION 1256 CONTRACTS

Sec. 1601. Certain swaps, etc., not treated as section 1256 contracts.

SEC. 2. <> DEFINITIONS.

As used in this Act, the following definitions shall apply, except
as the context otherwise requires or as otherwise specifically provided
in this Act:
(1) Affiliate.--The term ``affiliate'' has the same meaning
as in section 3 of the Federal Deposit Insurance Act (12 U.S.C.
1813).
(2) Appropriate federal banking agency.--On and after the
transfer date, the term ``appropriate Federal banking agency''
has the same meaning as in section 3(q) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(q)), as amended by title III.

[[Page 1387]]

(3) Board of governors.--The term ``Board of Governors''
means the Board of Governors of the Federal Reserve System.
(4) Bureau.--The term ``Bureau'' means the Bureau of
Consumer Financial Protection established under title X.
(5) Commission.--The term ``Commission'' means the
Securities and Exchange Commission, except in the context of the
Commodity Futures Trading Commission.
(6) Commodity futures terms.--The terms ``futures commission
merchant'', ``swap'', ``swap dealer'', ``swap execution
facility'', ``derivatives clearing organization'', ``board of
trade'', ``commodity trading advisor'', ``commodity pool'', and
``commodity pool operator'' have the same meanings as given the
terms in section 1a of the Commodity Exchange Act (7 U.S.C. 1 et
seq.).
(7) Corporation.--The term ``Corporation'' means the Federal
Deposit Insurance Corporation.
(8) Council.--The term ``Council'' means the Financial
Stability Oversight Council established under title I.
(9) Credit union.--The term ``credit union'' means a Federal
credit union, State credit union, or State-chartered credit
union, as those terms are defined in section 101 of the Federal
Credit Union Act (12 U.S.C. 1752).
(10) Federal banking agency.--The term--
(A) ``Federal banking agency'' means, individually,
the Board of Governors, the Office of the Comptroller of
the Currency, and the Corporation; and
(B) ``Federal banking agencies'' means all of the
agencies referred to in subparagraph (A), collectively.
(11) Functionally regulated subsidiary.--The term
``functionally regulated subsidiary'' has the same meaning as in
section 5(c)(5) of the Bank Holding Company Act of 1956 (12
U.S.C. 1844(c)(5)).
(12) Primary financial regulatory agency.--The term
``primary financial regulatory agency'' means--
(A) the appropriate Federal banking agency, with
respect to institutions described in section 3(q) of the
Federal Deposit Insurance Act, except to the extent that
an institution is or the activities of an institution
are otherwise described in subparagraph (B), (C), (D),
or (E);
(B) the Securities and Exchange Commission, with
respect to--
(i) any broker or dealer that is registered
with the Commission under the Securities Exchange
Act of 1934, with respect to the activities of the
broker or dealer that require the broker or dealer
to be registered under that Act;
(ii) any investment company that is registered
with the Commission under the Investment Company
Act of 1940, with respect to the activities of the
investment company that require the investment
company to be registered under that Act;
(iii) any investment adviser that is
registered with the Commission under the
Investment Advisers Act of 1940, with respect to
the investment advisory activities of such company
and activities that are incidental to such
advisory activities;

[[Page 1388]]

(iv) any clearing agency registered with the
Commission under the Securities Exchange Act of
1934, with respect to the activities of the
clearing agency that require the agency to be
registered under such Act;
(v) any nationally recognized statistical
rating organization registered with the Commission
under the Securities Exchange Act of 1934;
(vi) any transfer agent registered with the
Commission under the Securities Exchange Act of
1934;
(vii) any exchange registered as a national
securities exchange with the Commission under the
Securities Exchange Act of 1934;
(viii) any national securities association
registered with the Commission under the
Securities Exchange Act of 1934;
(ix) any securities information processor
registered with the Commission under the
Securities Exchange Act of 1934;
(x) the Municipal Securities Rulemaking Board
established under the Securities Exchange Act of
1934;
(xi) the Public Company Accounting Oversight
Board established under the Sarbanes-Oxley Act of
2002 (15 U.S.C. 7211 et seq.);
(xii) the Securities Investor Protection
Corporation established under the Securities
Investor Protection Act of 1970 (15 U.S.C. 78aaa
et seq.); and
(xiii) any security-based swap execution
facility, security-based swap data repository,
security-based swap dealer or major security-based
swap participant registered with the Commission
under the Securities Exchange Act of 1934, with
respect to the security-based swap activities of
the person that require such person to be
registered under such Act;
(C) the Commodity Futures Trading Commission, with
respect to--
(i) any futures commission merchant registered
with the Commodity Futures Trading Commission
under the Commodity Exchange Act (7 U.S.C. 1 et
seq.), with respect to the activities of the
futures commission merchant that require the
futures commission merchant to be registered under
that Act;
(ii) any commodity pool operator registered
with the Commodity Futures Trading Commission
under the Commodity Exchange Act (7 U.S.C. 1 et
seq.), with respect to the activities of the
commodity pool operator that require the commodity
pool operator to be registered under that Act, or
a commodity pool, as defined in that Act;
(iii) any commodity trading advisor or
introducing broker registered with the Commodity
Futures Trading Commission under the Commodity
Exchange Act (7 U.S.C. 1 et seq.), with respect to
the activities of the commodity trading advisor or
introducing broker that require the commodity
trading adviser or introducing broker to be
registered under that Act;

[[Page 1389]]

(iv) any derivatives clearing organization
registered with the Commodity Futures Trading
Commission under the Commodity Exchange Act (7
U.S.C. 1 et seq.), with respect to the activities
of the derivatives clearing organization that
require the derivatives clearing organization to
be registered under that Act;
(v) any board of trade designated as a
contract market by the Commodity Futures Trading
Commission under the Commodity Exchange Act (7
U.S.C. 1 et seq.);
(vi) any futures association registered with
the Commodity Futures Trading Commission under the
Commodity Exchange Act (7 U.S.C. 1 et seq.);
(vii) any retail foreign exchange dealer
registered with the Commodity Futures Trading
Commission under the Commodity Exchange Act (7
U.S.C. 1 et seq.), with respect to the activities
of the retail foreign exchange dealer that require
the retail foreign exchange dealer to be
registered under that Act;
(viii) any swap execution facility, swap data
repository, swap dealer, or major swap participant
registered with the Commodity Futures Trading
Commission under the Commodity Exchange Act (7
U.S.C. 1 et seq.) with respect to the swap
activities of the person that require such person
to be registered under that Act; and
(ix) any registered entity under the Commodity
Exchange Act (7 U.S.C. 1 et seq.), with respect to
the activities of the registered entity that
require the registered entity to be registered
under that Act;
(D) the State insurance authority of the State in
which an insurance company is domiciled, with respect to
the insurance activities and activities that are
incidental to such insurance activities of an insurance
company that is subject to supervision by the State
insurance authority under State insurance law; and
(E) the Federal Housing Finance Agency, with respect
to Federal Home Loan Banks or the Federal Home Loan Bank
System, and with respect to the Federal National
Mortgage Association or the Federal Home Loan Mortgage
Corporation.
(13) Prudential standards.--The term ``prudential
standards'' means enhanced supervision and regulatory standards
developed by the Board of Governors under section 165.
(14) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury.
(15) Securities terms.--The--
(A) terms ``broker'', ``dealer'', ``issuer'',
``nationally recognized statistical rating
organization'', ``security'', and ``securities laws''
have the same meanings as in section 3 of the Securities
Exchange Act of 1934 (15 U.S.C. 78c);
(B) term ``investment adviser'' has the same meaning
as in section 202 of the Investment Advisers Act of 1940
(15 U.S.C. 80b-2); and
(C) term ``investment company'' has the same meaning
as in section 3 of the Investment Company Act of 1940
(15 U.S.C. 80a-3).

[[Page 1390]]

(16) State.--The term ``State'' means any State,
commonwealth, territory, or possession of the United States, the
District of Columbia, the Commonwealth of Puerto Rico, the
Commonwealth of the Northern Mariana Islands, American Samoa,
Guam, or the United States Virgin Islands.
(17) Transfer date.--The term ``transfer date'' means the
date established under section 311.
(18) Other incorporated definitions.--
(A) Federal deposit insurance act.--The terms
``bank'', ``bank holding company'', ``control'',
``deposit'', ``depository institution'', ``Federal
depository institution'', ``Federal savings
association'', ``foreign bank'', ``including'',
``insured branch'', ``insured depository institution'',
``national member bank'', ``national nonmember bank'',
``savings association'', ``State bank'', ``State
depository institution'', ``State member bank'', ``State
nonmember bank'', ``State savings association'', and
``subsidiary'' have the same meanings as in section 3 of
the Federal Deposit Insurance Act (12 U.S.C. 1813).
(B) Holding companies.--The term--
(i) ``bank holding company'' has the same
meaning as in section 2 of the Bank Holding
Company Act of 1956 (12 U.S.C. 1841);
(ii) ``financial holding company'' has the
same meaning as in section 2(p) of the Bank
Holding Company Act of 1956 (12 U.S.C. 1841(p));
and
(iii) ``savings and loan holding company'' has
the same meaning as in section 10 of the Home
Owners' Loan Act (12 U.S.C. 1467a(a)).
SEC. 3. <> SEVERABILITY.

If any provision of this Act, an amendment made by this Act, or the
application of such provision or amendment to any person or circumstance
is held to be unconstitutional, the remainder of this Act, the
amendments made by this Act, and the application of the provisions of
such to any person or circumstance shall not be affected thereby.
SEC. 4. <> EFFECTIVE DATE.

Except as otherwise specifically provided in this Act or the
amendments made by this Act, this Act and such amendments shall take
effect 1 day after the date of enactment of this Act.
SEC. 5. BUDGETARY EFFECTS.

The budgetary effects of this Act, for the purpose of complying with
the Statutory Pay-As-You-Go-Act of 2010, shall be determined by
reference to the latest statement titled ``Budgetary Effects of PAYGO
Legislation'' for this Act, jointly submitted for printing in the
Congressional Record by the Chairmen of the House and Senate Budget
Committees, provided that such statement has been submitted prior to the
vote on passage in the House acting first on this conference report or
amendment between the Houses.
SEC. 6. <> ANTITRUST SAVINGS CLAUSE.

Nothing in this Act, or any amendment made by this Act, shall be
construed to modify, impair, or supersede the operation of any of the
antitrust laws, unless otherwise <> specified. For
purposes of this section, the term ``antitrust laws'' has the same
meaning

[[Page 1391]]

as in subsection (a) of the first section of the Clayton Act, except
that such term includes section 5 of the Federal Trade Commission Act,
to the extent that such section 5 applies to unfair methods of
competition.

TITLE I-- <> FINANCIAL STABILITY
SEC. 101. <> SHORT TITLE.

This title may be cited as the ``Financial Stability Act of 2010''.
SEC. 102. <> DEFINITIONS.

(a) In General.--For purposes of this title, unless the context
otherwise requires, the following definitions shall apply:
(1) Bank holding company.--The term ``bank holding company''
has the same meaning as in section 2 of the Bank Holding Company
Act of 1956 (12 U.S.C. 1841). A foreign bank or company that is
treated as a bank holding company for purposes of the Bank
Holding Company Act of 1956, pursuant to section 8(a) of the
International Banking Act of 1978 (12 U.S.C. 3106(a)), shall be
treated as a bank holding company for purposes of this title.
(2) Chairperson.--The term ``Chairperson'' means the
Chairperson of the Council.
(3) Member agency.--The term ``member agency'' means an
agency represented by a voting member of the Council.
(4) Nonbank financial company definitions.--
(A) Foreign nonbank financial company.--The term
``foreign nonbank financial company'' means a company
(other than a company that is, or is treated in the
United States as, a bank holding company) that is--
(i) incorporated or organized in a country
other than the United States; and
(ii) predominantly engaged in, including
through a branch in the United States, financial
activities, as defined in paragraph (6).
(B) U.S. nonbank financial company.--The term ``U.S.
nonbank financial company'' means a company (other than
a bank holding company, a Farm Credit System institution
chartered and subject to the provisions of the Farm
Credit Act of 1971 (12 U.S.C. 2001 et seq.), or a
national securities exchange (or parent thereof),
clearing agency (or parent thereof, unless the parent is
a bank holding company), security-based swap execution
facility, or security-based swap data repository
registered with the Commission, or a board of trade
designated as a contract market (or parent thereof), or
a derivatives clearing organization (or parent thereof,
unless the parent is a bank holding company), swap
execution facility or a swap data repository registered
with the Commodity Futures Trading Commission), that
is--
(i) incorporated or organized under the laws
of the United States or any State; and
(ii) predominantly engaged in financial
activities, as defined in paragraph (6).

[[Page 1392]]

(C) Nonbank financial company.--The term ``nonbank
financial company'' means a U.S. nonbank financial
company and a foreign nonbank financial company.
(D) Nonbank financial company supervised by the
board of governors.--The term ``nonbank financial
company supervised by the Board of Governors'' means a
nonbank financial company that the Council has
determined under section 113 shall be supervised by the
Board of Governors.
(5) Office of financial research.--The term ``Office of
Financial Research'' means the office established under section
152.
(6) Predominantly engaged.--A company is ``predominantly
engaged in financial activities'' if--
(A) the annual gross revenues derived by the company
and all of its subsidiaries from activities that are
financial in nature (as defined in section 4(k) of the
Bank Holding Company Act of 1956) and, if applicable,
from the ownership or control of one or more insured
depository institutions, represents 85 percent or more
of the consolidated annual gross revenues of the
company; or
(B) the consolidated assets of the company and all
of its subsidiaries related to activities that are
financial in nature (as defined in section 4(k) of the
Bank Holding Company Act of 1956) and, if applicable,
related to the ownership or control of one or more
insured depository institutions, represents 85 percent
or more of the consolidated assets of the company.
(7) Significant institutions.--The terms ``significant
nonbank financial company'' and ``significant bank holding
company'' have the meanings given those terms by rule of the
Board of Governors, but in no instance shall the term
``significant nonbank financial company'' include those entities
that are excluded under paragraph (4)(B).

(b) Definitional Criteria.--The <> Board of
Governors shall establish, by regulation, the requirements for
determining if a company is predominantly engaged in financial
activities, as defined in subsection (a)(6).

(c) Foreign Nonbank Financial Companies.--For purposes of the
application of subtitles A and C (other than section 113(b)) with
respect to a foreign nonbank financial company, references in this title
to ``company'' or ``subsidiary'' include only the United States
activities and subsidiaries of such foreign company, except as otherwise
provided.

Subtitle A--Financial Stability Oversight Council

SEC. 111. <> FINANCIAL STABILITY OVERSIGHT
COUNCIL ESTABLISHED.

(a) Establishment.--Effective <> on the date
of enactment of this Act, there is established the Financial Stability
Oversight Council.

(b) Membership.--The Council shall consist of the following members:
(1) Voting members.--The voting members, who shall each have
1 vote on the Council shall be--

[[Page 1393]]

(A) the Secretary of the Treasury, who shall serve
as Chairperson of the Council;
(B) the Chairman of the Board of Governors;
(C) the Comptroller of the Currency;
(D) the Director of the Bureau;
(E) the Chairman of the Commission;
(F) the Chairperson of the Corporation;
(G) the Chairperson of the Commodity Futures Trading
Commission;
(H) the Director of the Federal Housing Finance
Agency;
(I) the Chairman of the National Credit Union
Administration Board; and
(J) an independent member appointed by the
President, by and with the advice and consent of the
Senate, having insurance expertise.
(2) Nonvoting members.--The nonvoting members, who shall
serve in an advisory capacity as a nonvoting member of the
Council, shall be--
(A) the Director of the Office of Financial
Research;
(B) the Director of the Federal Insurance Office;
(C) a State insurance commissioner, to be designated
by a selection process determined by the State insurance
commissioners;
(D) a State banking supervisor, to be designated by
a selection process determined by the State banking
supervisors; and
(E) a State securities commissioner (or an officer
performing like functions), to be designated by a
selection process determined by such State securities
commissioners.
(3) Nonvoting member participation.--The nonvoting members
of the Council shall not be excluded from any of the
proceedings, meetings, discussions, or deliberations of the
Council, except that the Chairperson may, upon an affirmative
vote of the member agencies, exclude the nonvoting members from
any of the proceedings, meetings, discussions, or deliberations
of the Council when necessary to safeguard and promote the free
exchange of confidential supervisory information.

(c) Terms; Vacancy.--
(1) Terms.--The independent member of the Council shall
serve for a term of 6 years, and each nonvoting member described
in subparagraphs (C), (D), and (E) of subsection (b)(2) shall
serve for a term of 2 years.
(2) Vacancy.--Any vacancy on the Council shall be filled in
the manner in which the original appointment was made.
(3) Acting officials may serve.--In the event of a vacancy
in the office of the head of a member agency or department, and
pending the appointment of a successor, or during the absence or
disability of the head of a member agency or department, the
acting head of the member agency or department shall serve as a
member of the Council in the place of that agency or department
head.

(d) Technical and Professional Advisory Committees.--The Council may
appoint such special advisory, technical, or professional committees as
may be useful in carrying out the functions of the Council, including an
advisory committee consisting of State

[[Page 1394]]

regulators, and the members of such committees may be members of the
Council, or other persons, or both.
(e) Meetings.--
(1) Timing.--The Council shall meet at the call of the
Chairperson or a majority of the members then serving, but not
less frequently than quarterly.
(2) Rules for conducting business.--The Council shall adopt
such rules as may be necessary for the conduct of the business
of the Council. Such rules shall be rules of agency
organization, procedure, or practice for purposes of section 553
of title 5, United States Code.

(f) Voting.--Unless otherwise specified, the Council shall make all
decisions that it is authorized or required to make by a majority vote
of the voting members then serving.
(g) Nonapplicability of FACA.--
The <> Federal Advisory Committee Act (5
U.S.C. App.) shall not apply to the Council, or to any special advisory,
technical, or professional committee appointed by the Council, except
that, if an advisory, technical, or professional committee has one or
more members who are not employees of or affiliated with the United
States Government, the Council shall publish a list of the names of the
members of such committee.

(h) Assistance From Federal Agencies.--Any department or agency of
the United States may provide to the Council and any special advisory,
technical, or professional committee appointed by the Council, such
services, funds, facilities, staff, and other support services as the
Council may determine advisable.
(i) Compensation of Members.--
(1) Federal employee members.--All members of the Council
who are officers or employees of the United States shall serve
without compensation in addition to that received for their
services as officers or employees of the United States.
(2) Compensation for non-federal member.--Section 5314 of
title 5, United States Code, is amended by adding at the end the
following:
``Independent Member of the Financial Stability Oversight
Council (1).''.

(j) Detail of Government Employees.--Any employee of the Federal
Government may be detailed to the Council without reimbursement, and
such detail shall be without interruption or loss of civil service
status or privilege. An employee of the Federal Government detailed to
the Council shall report to and be subject to oversight by the Council
during the assignment to the Council, and shall be compensated by the
department or agency from which the employee was detailed.
SEC. 112. <> COUNCIL AUTHORITY.

(a) Purposes and Duties of the Council.--
(1) In general.--The purposes of the Council are--
(A) to identify risks to the financial stability of
the United States that could arise from the material
financial distress or failure, or ongoing activities, of
large, interconnected bank holding companies or nonbank
financial companies, or that could arise outside the
financial services marketplace;
(B) to promote market discipline, by eliminating
expectations on the part of shareholders, creditors, and

[[Page 1395]]

counterparties of such companies that the Government
will shield them from losses in the event of failure;
and
(C) to respond to emerging threats to the stability
of the United States financial system.
(2) Duties.--The Council shall, in accordance with this
title--
(A) collect information from member agencies, other
Federal and State financial regulatory agencies, the
Federal Insurance Office and, if necessary to assess
risks to the United States financial system, direct the
Office of Financial Research to collect information from
bank holding companies and nonbank financial companies;
(B) provide direction to, and request data and
analyses from, the Office of Financial Research to
support the work of the Council;
(C) monitor the financial services marketplace in
order to identify potential threats to the financial
stability of the United States;
(D) to monitor domestic and international financial
regulatory proposals and developments, including
insurance and accounting issues, and to advise Congress
and make recommendations in such areas that will enhance
the integrity, efficiency, competitiveness, and
stability of the U.S. financial markets;
(E) facilitate information sharing and coordination
among the member agencies and other Federal and State
agencies regarding domestic financial services policy
development, rulemaking, examinations, reporting
requirements, and enforcement actions;
(F) recommend to the member agencies general
supervisory priorities and principles reflecting the
outcome of discussions among the member agencies;
(G) identify gaps in regulation that could pose
risks to the financial stability of the United States;
(H) require supervision by the Board of Governors
for nonbank financial companies that may pose risks to
the financial stability of the United States in the
event of their material financial distress or failure,
or because of their activities pursuant to section 113;
(I) make <> recommendations to the Board of Governors
concerning the establishment of heightened prudential
standards for risk-based capital, leverage, liquidity,
contingent capital, resolution plans and credit exposure
reports, concentration limits, enhanced public
disclosures, and overall risk management for nonbank
financial companies and large, interconnected bank
holding companies supervised by the Board of Governors;
(J) identify systemically important financial market
utilities and payment, clearing, and settlement
activities (as that term is defined in title VIII);
(K) <>  make
recommendations to primary financial regulatory agencies
to apply new or heightened standards and safeguards for
financial activities or practices that could create or
increase risks of significant liquidity, credit, or
other problems spreading among bank holding companies,
nonbank financial companies, and United States financial
markets;

[[Page 1396]]

(L) review and, as appropriate, may submit comments
to the Commission and any standard-setting body with
respect to an existing or proposed accounting principle,
standard, or procedure;
(M) provide a forum for--
(i) discussion and analysis of emerging market
developments and financial regulatory issues; and
(ii) resolution of jurisdictional disputes
among the members of the Council; and
(N) <> annually report to
and testify before Congress on--
(i) the activities of the Council;
(ii) significant financial market and
regulatory developments, including insurance and
accounting regulations and standards, along with
an assessment of those developments on the
stability of the financial system;
(iii) potential emerging threats to the
financial stability of the United States;
(iv) all determinations made under section 113
or title VIII, and the basis for such
determinations;
(v) all recommendations made under section 119
and the result of such recommendations; and
(vi) recommendations--
(I) to enhance the integrity,
efficiency, competitiveness, and
stability of United States financial
markets;
(II) to promote market discipline;
and
(III) to maintain investor
confidence.

(b) Statements by Voting Members of the Council.--At the time at
which each report is submitted under subsection (a), each voting member
of the Council shall--
(1) if such member believes that the Council, the
Government, and the private sector are taking all reasonable
steps to ensure financial stability and to mitigate systemic
risk that would negatively affect the economy, submit a signed
statement to Congress stating such belief; or
(2) if such member does not believe that all reasonable
steps described under paragraph (1) are being taken, submit a
signed statement to Congress stating what actions such member
believes need to be taken in order to ensure that all reasonable
steps described under paragraph (1) are taken.

(c) Testimony by the Chairperson.--The Chairperson shall appear
before the Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing, and Urban Affairs
of the Senate at an annual hearing, after the report is submitted under
subsection (a)--
(1) to discuss the efforts, activities, objectives, and
plans of the Council; and
(2) to discuss and answer questions concerning such report.

(d) Authority To Obtain Information.--
(1) In general.--The Council may receive, and may request
the submission of, any data or information from the Office of
Financial Research, member agencies, and the Federal Insurance
Office, as necessary--
(A) to monitor the financial services marketplace to
identify potential risks to the financial stability of
the United States; or

[[Page 1397]]

(B) to otherwise carry out any of the provisions of
this title.
(2) Submissions by the office and member agencies.--
Notwithstanding any other provision of law, the Office of
Financial Research, any member agency, and the Federal Insurance
Office, are authorized to submit information to the Council.
(3) Financial data collection.--
(A) In general.--The Council, acting through the
Office of Financial Research, may require the submission
of periodic and other reports from any nonbank financial
company or bank holding company for the purpose of
assessing the extent to which a financial activity or
financial market in which the nonbank financial company
or bank holding company participates, or the nonbank
financial company or bank holding company itself, poses
a threat to the financial stability of the United
States.
(B) Mitigation of report burden.--Before requiring
the submission of reports from any nonbank financial
company or bank holding company that is regulated by a
member agency or any primary financial regulatory
agency, the Council, acting through the Office of
Financial Research, shall coordinate with such agencies
and shall, whenever possible, rely on information
available from the Office of Financial Research or such
agencies.
(C) Mitigation in case of foreign financial
companies.--Before <> requiring the
submission of reports from a company that is a foreign
nonbank financial company or foreign-based bank holding
company, the Council shall, acting through the Office of
Financial Research, to the extent appropriate, consult
with the appropriate foreign regulator of such company
and, whenever possible, rely on information already
being collected by such foreign regulator, with English
translation.
(4) Back-up examination by the board of governors.--If the
Council is unable to determine whether the financial activities
of a U.S. nonbank financial company pose a threat to the
financial stability of the United States, based on information
or reports obtained under paragraphs (1) and (3), discussions
with management, and publicly available information, the Council
may request the Board of Governors, and the Board of Governors
is authorized, to conduct an examination of the U.S. nonbank
financial company for the sole purpose of determining whether
the nonbank financial company should be supervised by the Board
of Governors for purposes of this title.
(5) Confidentiality.--
(A) In general.--The Council, the Office of
Financial Research, and the other member agencies shall
maintain the confidentiality of any data, information,
and reports submitted under this title.
(B) Retention of privilege.--The submission of any
nonpublicly available data or information under this
subsection and subtitle B shall not constitute a waiver
of, or otherwise affect, any privilege arising under
Federal or State law (including the rules of any Federal
or State court) to which the data or information is
otherwise subject.

[[Page 1398]]

(C) Freedom of information act.--
Section <> 552 of title 5, United
States Code, including the exceptions thereunder, shall
apply to any data or information submitted under this
subsection and subtitle B.
SEC. 113. <> AUTHORITY TO REQUIRE SUPERVISION
AND REGULATION OF CERTAIN NONBANK
FINANCIAL COMPANIES.

(a) U.S. Nonbank Financial Companies Supervised by the Board of
Governors.--
(1) Determination.--The Council, on a nondelegable basis and
by a vote of not fewer than \2/3\ of the voting members then
serving, including an affirmative vote by the Chairperson, may
determine that a U.S. nonbank financial company shall be
supervised by the Board of Governors and shall be subject to
prudential standards, in accordance with this title, if the
Council determines that material financial distress at the U.S.
nonbank financial company, or the nature, scope, size, scale,
concentration, interconnectedness, or mix of the activities of
the U.S. nonbank financial company, could pose a threat to the
financial stability of the United States.
(2) Considerations.--In making a determination under
paragraph (1), the Council shall consider--
(A) the extent of the leverage of the company;
(B) the extent and nature of the off-balance-sheet
exposures of the company;
(C) the extent and nature of the transactions and
relationships of the company with other significant
nonbank financial companies and significant bank holding
companies;
(D) the importance of the company as a source of
credit for households, businesses, and State and local
governments and as a source of liquidity for the United
States financial system;
(E) the importance of the company as a source of
credit for low-income, minority, or underserved
communities, and the impact that the failure of such
company would have on the availability of credit in such
communities;
(F) the extent to which assets are managed rather
than owned by the company, and the extent to which
ownership of assets under management is diffuse;
(G) the nature, scope, size, scale, concentration,
interconnectedness, and mix of the activities of the
company;
(H) the degree to which the company is already
regulated by 1 or more primary financial regulatory
agencies;
(I) the amount and nature of the financial assets of
the company;
(J) the amount and types of the liabilities of the
company, including the degree of reliance on short-term
funding; and
(K) any other risk-related factors that the Council
deems appropriate.

(b) Foreign Nonbank Financial Companies Supervised by the Board of
Governors.--
(1) Determination.--The Council, on a nondelegable basis and
by a vote of not fewer than \2/3\ of the voting members then
serving, including an affirmative vote by the Chairperson,

[[Page 1399]]

may determine that a foreign nonbank financial company shall be
supervised by the Board of Governors and shall be subject to
prudential standards, in accordance with this title, if the
Council determines that material financial distress at the
foreign nonbank financial company, or the nature, scope, size,
scale, concentration, interconnectedness, or mix of the
activities of the foreign nonbank financial company, could pose
a threat to the financial stability of the United States.
(2) Considerations.--In making a determination under
paragraph (1), the Council shall consider--
(A) the extent of the leverage of the company;
(B) the extent and nature of the United States
related off-balance-sheet exposures of the company;
(C) the extent and nature of the transactions and
relationships of the company with other significant
nonbank financial companies and significant bank holding
companies;
(D) the importance of the company as a source of
credit for United States households, businesses, and
State and local governments and as a source of liquidity
for the United States financial system;
(E) the importance of the company as a source of
credit for low-income, minority, or underserved
communities in the United States, and the impact that
the failure of such company would have on the
availability of credit in such communities;
(F) the extent to which assets are managed rather
than owned by the company and the extent to which
ownership of assets under management is diffuse;
(G) the nature, scope, size, scale, concentration,
interconnectedness, and mix of the activities of the
company;
(H) the extent to which the company is subject to
prudential standards on a consolidated basis in its home
country that are administered and enforced by a
comparable foreign supervisory authority;
(I) the amount and nature of the United States
financial assets of the company;
(J) the amount and nature of the liabilities of the
company used to fund activities and operations in the
United States, including the degree of reliance on
short-term funding; and
(K) any other risk-related factors that the Council
deems appropriate.

(c) Antievasion.--
(1) Determinations.--In order to avoid evasion of this
title, the Council, on its own initiative or at the request of
the Board of Governors, may determine, on a nondelegable basis
and by a vote of not fewer than \2/3\ of the voting members then
serving, including an affirmative vote by the Chairperson,
that--
(A) material financial distress related to, or the
nature, scope, size, scale, concentration,
interconnectedness, or mix of, the financial activities
conducted directly or indirectly by a company
incorporated or organized under the laws of the United
States or any State or the financial activities in the
United States of a company incorporated or organized in
a country other than the United States would

[[Page 1400]]

pose a threat to the financial stability of the United
States, based on consideration of the factors in
subsection (a)(2) or (b)(2), as applicable;
(B) the company is organized or operates in such a
manner as to evade the application of this title; and
(C) such financial activities of the company shall
be supervised by the Board of Governors and subject to
prudential standards in accordance with this title,
consistent with paragraph (3).
(2) Report.--Upon making a determination under paragraph
(1), the Council shall submit a report to the appropriate
committees of Congress detailing the reasons for making such
determination.
(3) Consolidated supervision of only financial activities;
establishment of an intermediate holding company.--
(A) Establishment of an intermediate holding
company.--Upon a determination under paragraph (1), the
company that is the subject of the determination may
establish an intermediate holding company in which the
financial activities of such company and its
subsidiaries shall be conducted (other than the
activities described in section 167(b)(2)) in compliance
with any regulations or guidance provided by the Board
of Governors. Such intermediate holding company shall be
subject to the supervision of the Board of Governors and
to prudential standards under this title as if the
intermediate holding company were a nonbank financial
company supervised by the Board of Governors.
(B) Action of the board of governors.--To facilitate
the supervision of the financial activities subject to
the determination in paragraph (1), the Board of
Governors may require a company to establish an
intermediate holding company, as provided for in section
167, which would be subject to the supervision of the
Board of Governors and to prudential standards under
this title, as if the intermediate holding company were
a nonbank financial company supervised by the Board of
Governors.
(4) Notice and opportunity for hearing and final
determination; judicial review.--
<> Subsections (d) through (h) shall apply
to determinations made by the Council pursuant to paragraph (1)
in the same manner as such subsections apply to nonbank
financial companies.
(5) Covered financial activities.--For purposes of this
subsection, the term ``financial activities''--
(A) <> means activities that are
financial in nature (as defined in section 4(k) of the
Bank Holding Company Act of 1956);
(B) includes the ownership or control of one or more
insured depository institutions; and
(C) does not include internal financial activities
conducted for the company or any affiliate thereof,
including internal treasury, investment, and employee
benefit functions.
(6) Only financial activities subject to prudential
supervision.--Nonfinancial activities of the company shall not

[[Page 1401]]

be subject to supervision by the Board of Governors and
prudential standards of the Board. For purposes of this Act, the
financial activities that are the subject of the determination
in paragraph (1) shall be subject to the same requirements as a
nonbank financial company supervised by the Board of Governors.
Nothing in this paragraph shall prohibit or limit the authority
of the Board of Governors to apply prudential standards under
this title to the financial activities that are subject to the
determination in paragraph (1).

(d) Reevaluation and Rescission.--The Council shall--
(1) <> not less frequently than annually,
reevaluate each determination made under subsections (a) and (b)
with respect to such nonbank financial company supervised by the
Board of Governors; and
(2) rescind any such determination, if the Council, by a
vote of not fewer than \2/3\ of the voting members then serving,
including an affirmative vote by the Chairperson, determines
that the nonbank financial company no longer meets the standards
under subsection (a) or (b), as applicable.

(e) Notice <> and Opportunity for Hearing and
Final Determination.--
(1) In general.--The Council shall provide to a nonbank
financial company written notice of a proposed determination of
the Council, including an explanation of the basis of the
proposed determination of the Council, that a nonbank financial
company shall be supervised by the Board of Governors and shall
be subject to prudential standards in accordance with this
title.
(2) Hearing.--Not later than 30 days after the date of
receipt of any notice of a proposed determination under
paragraph (1), the nonbank financial company may request, in
writing, an opportunity for a written or oral hearing before the
Council to contest the proposed determination. Upon receipt of a
timely request, the Council shall fix a time (not later than 30
days after the date of receipt of the request) and place at
which such company may appear, personally or through counsel, to
submit written materials (or, at the sole discretion of the
Council, oral testimony and oral argument).
(3) Final determination.--Not later than 60 days after the
date of a hearing under paragraph (2), the Council shall notify
the nonbank financial company of the final determination of the
Council, which shall contain a statement of the basis for the
decision of the Council.
(4) No hearing requested.--If a nonbank financial company
does not make a timely request for a hearing, the Council shall
notify the nonbank financial company, in writing, of the final
determination of the Council under subsection (a) or (b), as
applicable, not later than 10 days after the date by which the
company may request a hearing under paragraph (2).

(f) Emergency <> Exception.--
(1) In general.--The <> Council may
waive or modify the requirements of subsection (e) with respect
to a nonbank financial company, if the Council determines, by a
vote of not fewer than \2/3\ of the voting members then serving,
including an affirmative vote by the Chairperson, that such
waiver or modification is necessary or appropriate to prevent or
mitigate

[[Page 1402]]

threats posed by the nonbank financial company to the financial
stability of the United States.
(2) Notice.--The Council shall provide notice of a waiver or
modification under this subsection to the nonbank financial
company concerned as soon as practicable, but not later than 24
hours after the waiver or modification is granted.
(3) International coordination.--
In <> making a determination under
paragraph (1), the Council shall consult with the appropriate
home country supervisor, if any, of the foreign nonbank
financial company that is being considered for such a
determination.
(4) Opportunity for hearing.--The Council shall allow a
nonbank financial company to request, in writing, an opportunity
for a written or oral hearing before the Council to contest a
waiver or modification under this subsection, not later than 10
days after the date of receipt of notice of the waiver or
modification by the company. Upon receipt of a timely request,
the Council shall fix a time (not later than 15 days after the
date of receipt of the request) and place at which the nonbank
financial company may appear, personally or through counsel, to
submit written materials (or, at the sole discretion of the
Council, oral testimony and oral argument).
(5) Notice of final determination.--Not later than 30 days
after the date of any hearing under paragraph (4), the Council
shall notify the subject nonbank financial company of the final
determination of the Council under this subsection, which shall
contain a statement of the basis for the decision of the
Council.

(g) Consultation.--The Council shall consult with the primary
financial regulatory agency, if any, for each nonbank financial company
or subsidiary of a nonbank financial company that is being considered
for supervision by the Board of Governors under this section before the
Council makes any final determination with respect to such nonbank
financial company under subsection (a), (b), or (c).
(h) Judicial Review.--If <> the Council makes a
final determination under this section with respect to a nonbank
financial company, such nonbank financial company may, not later than 30
days after the date of receipt of the notice of final determination
under subsection (d)(2), (e)(3), or (f)(5), bring an action in the
United States district court for the judicial district in which the home
office of such nonbank financial company is located, or in the United
States District Court for the District of Columbia, for an order
requiring that the final determination be rescinded, and the court
shall, upon review, dismiss such action or direct the final
determination to be rescinded. Review of such an action shall be limited
to whether the final determination made under this section was arbitrary
and capricious.

(i) International Coordination.--
In <> exercising its duties under this title with
respect to foreign nonbank financial companies, foreign-based bank
holding companies, and cross-border activities and markets, the Council
shall consult with appropriate foreign regulatory authorities, to the
extent appropriate.

[[Page 1403]]

SEC. 114. <> REGISTRATION OF NONBANK FINANCIAL
COMPANIES SUPERVISED BY THE BOARD OF
GOVERNORS.

Not <> later than 180 days after the date of a
final Council determination under section 113 that a nonbank financial
company is to be supervised by the Board of Governors, such company
shall register with the Board of Governors, on forms prescribed by the
Board of Governors, which shall include such information as the Board of
Governors, in consultation with the Council, may deem necessary or
appropriate to carry out this title.
SEC. 115. <> ENHANCED SUPERVISION AND
PRUDENTIAL STANDARDS FOR NONBANK FINANCIAL
COMPANIES SUPERVISED BY THE BOARD OF
GOVERNORS AND CERTAIN BANK HOLDING
COMPANIES.

(a) In General.--
(1) Purpose.--In order to prevent or mitigate risks to the
financial stability of the United States that could arise from
the material financial distress, failure, or ongoing activities
of large, interconnected financial institutions, the Council may
make recommendations to the Board of Governors concerning the
establishment and refinement of prudential standards and
reporting and disclosure requirements applicable to nonbank
financial companies supervised by the Board of Governors and
large, interconnected bank holding companies, that--
(A) are more stringent than those applicable to
other nonbank financial companies and bank holding
companies that do not present similar risks to the
financial stability of the United States; and
(B) increase in stringency, based on the
considerations identified in subsection (b)(3).
(2) Recommended application of required standards.--In
making recommendations under this section, the Council may--
(A) differentiate among companies that are subject
to heightened standards on an individual basis or by
category, taking into consideration their capital
structure, riskiness, complexity, financial activities
(including the financial activities of their
subsidiaries), size, and any other risk-related factors
that the Council deems appropriate; or
(B) recommend an asset threshold that is higher than
$50,000,000,000 for the application of any standard
described in subsections (c) through (g).

(b) Development of Prudential Standards.--
(1) In general.--The recommendations of the Council under
subsection (a) may include--
(A) risk-based capital requirements;
(B) leverage limits;
(C) liquidity requirements;
(D) resolution plan and credit exposure report
requirements;
(E) concentration limits;
(F) a contingent capital requirement;
(G) enhanced public disclosures;
(H) short-term debt limits; and
(I) overall risk management requirements.

[[Page 1404]]

(2) Prudential standards for foreign financial companies.--
In making recommendations concerning the standards set forth in
paragraph (1) that would apply to foreign nonbank financial
companies supervised by the Board of Governors or foreign-based
bank holding companies, the Council shall--
(A) give due regard to the principle of national
treatment and equality of competitive opportunity; and
(B) take into account the extent to which the
foreign nonbank financial company or foreign-based bank
holding company is subject on a consolidated basis to
home country standards that are comparable to those
applied to financial companies in the United States.
(3) Considerations.--In making recommendations concerning
prudential standards under paragraph (1), the Council shall--
(A) take into account differences among nonbank
financial companies supervised by the Board of Governors
and bank holding companies described in subsection (a),
based on--
(i) the factors described in subsections (a)
and (b) of section 113;
(ii) whether the company owns an insured
depository institution;
(iii) nonfinancial activities and affiliations
of the company; and
(iv) any other factors that the Council
determines appropriate;
(B) to the extent possible, ensure that small
changes in the factors listed in subsections (a) and (b)
of section 113 would not result in sharp, discontinuous
changes in the prudential standards established under
section 165; and
(C) adapt its recommendations as appropriate in
light of any predominant line of business of such
company, including assets under management or other
activities for which particular standards may not be
appropriate.

(c) Contingent Capital.--
(1) Study required.--The Council shall conduct a study of
the feasibility, benefits, costs, and structure of a contingent
capital requirement for nonbank financial companies supervised
by the Board of Governors and bank holding companies described
in subsection (a), which study shall include--
(A) an evaluation of the degree to which such
requirement would enhance the safety and soundness of
companies subject to the requirement, promote the
financial stability of the United States, and reduce
risks to United States taxpayers;
(B) an evaluation of the characteristics and amounts
of contingent capital that should be required;
(C) an analysis of potential prudential standards
that should be used to determine whether the contingent
capital of a company would be converted to equity in
times of financial stress;
(D) an evaluation of the costs to companies, the
effects on the structure and operation of credit and
other financial markets, and other economic effects of
requiring contingent capital;

[[Page 1405]]

(E) an evaluation of the effects of such requirement
on the international competitiveness of companies
subject to the requirement and the prospects for
international coordination in establishing such
requirement; and
(F) recommendations for implementing regulations.
(2) Report.--The Council shall submit a report to Congress
regarding the study required by paragraph (1) not later than 2
years after the date of enactment of this Act.
(3) Recommendations.--
(A) In general.--Subsequent to submitting a report
to Congress under paragraph (2), the Council may make
recommendations to the Board of Governors to require any
nonbank financial company supervised by the Board of
Governors and any bank holding company described in
subsection (a) to maintain a minimum amount of
contingent capital that is convertible to equity in
times of financial stress.
(B) Factors to consider.--In making recommendations
under this subsection, the Council shall consider--
(i) an appropriate transition period for
implementation of a conversion under this
subsection;
(ii) the factors described in subsection
(b)(3);
(iii) capital requirements applicable to a
nonbank financial company supervised by the Board
of Governors or a bank holding company described
in subsection (a), and subsidiaries thereof;
(iv) results of the study required by
paragraph (1); and
(v) any other factor that the Council deems
appropriate.

(d) Resolution Plan and Credit Exposure Reports.--
(1) Resolution plan.--The Council may make recommendations
to the Board of Governors concerning the requirement that each
nonbank financial company supervised by the Board of Governors
and each bank holding company described in subsection (a) report
periodically to the Council, the Board of Governors, and the
Corporation, the plan of such company for rapid and orderly
resolution in the event of material financial distress or
failure.
(2) Credit exposure report.--The Council may make
recommendations to the Board of Governors concerning the
advisability of requiring each nonbank financial company
supervised by the Board of Governors and bank holding company
described in subsection (a) to report periodically to the
Council, the Board of Governors, and the Corporation on--
(A) the nature and extent to which the company has
credit exposure to other significant nonbank financial
companies and significant bank holding companies; and
(B) the nature and extent to which other such
significant nonbank financial companies and significant
bank holding companies have credit exposure to that
company.

(e) Concentration Limits.--In order to limit the risks that the
failure of any individual company could pose to nonbank financial
companies supervised by the Board of Governors or bank holding companies
described in subsection (a), the Council may make recommendations to the
Board of Governors to prescribe standards to limit such risks, as set
forth in section 165.

[[Page 1406]]

(f) Enhanced Public Disclosures.--The Council may make
recommendations to the Board of Governors to require periodic public
disclosures by bank holding companies described in subsection (a) and by
nonbank financial companies supervised by the Board of Governors, in
order to support market evaluation of the risk profile, capital
adequacy, and risk management capabilities thereof.
(g) Short-term Debt Limits.--The Council may make recommendations to
the Board of Governors to require short-term debt limits to mitigate the
risks that an over-accumulation of such debt could pose to bank holding
companies described in subsection (a), nonbank financial companies
supervised by the Board of Governors, or the financial system.
SEC. 116. <> REPORTS.

(a) In General.--Subject to subsection (b), the Council, acting
through the Office of Financial Research, may require a bank holding
company with total consolidated assets of $50,000,000,000 or greater or
a nonbank financial company supervised by the Board of Governors, and
any subsidiary thereof, to submit certified reports to keep the Council
informed as to--
(1) the financial condition of the company;
(2) systems for monitoring and controlling financial,
operating, and other risks;
(3) transactions with any subsidiary that is a depository
institution; and
(4) the extent to which the activities and operations of the
company and any subsidiary thereof, could, under adverse
circumstances, have the potential to disrupt financial markets
or affect the overall financial stability of the United States.

(b) Use of Existing Reports.--
(1) In general.--For purposes of compliance with subsection
(a), the Council, acting through the Office of Financial
Research, shall, to the fullest extent possible, use--
(A) reports that a bank holding company, nonbank
financial company supervised by the Board of Governors,
or any functionally regulated subsidiary of such company
has been required to provide to other Federal or State
regulatory agencies or to a relevant foreign supervisory
authority;
(B) information that is otherwise required to be
reported publicly; and
(C) externally audited financial statements.
(2) Availability.--Each bank holding company described in
subsection (a) and nonbank financial company supervised by the
Board of Governors, and any subsidiary thereof, shall provide to
the Council, at the request of the Council, copies of all
reports referred to in paragraph (1).
(3) Confidentiality.--The Council shall maintain the
confidentiality of the reports obtained under subsection (a) and
paragraph (1)(A) of this subsection.
SEC. 117. <> TREATMENT OF CERTAIN COMPANIES
THAT CEASE TO BE BANK HOLDING COMPANIES.

(a) Applicability.--This section shall apply to--
(1) any entity that--

[[Page 1407]]

(A) was a bank holding company having total
consolidated assets equal to or greater than
$50,000,000,000 as of January 1, 2010; and
(B) received financial assistance under or
participated in the Capital Purchase Program established
under the Troubled Asset Relief Program authorized by
the Emergency Economic Stabilization Act of 2008; and
(2) any successor entity (as defined by the Board of
Governors, in consultation with the Council) to an entity
described in paragraph (1).

(b) Treatment.--If an entity described in subsection (a) ceases to
be a bank holding company at any time after January 1, 2010, then such
entity shall be treated as a nonbank financial company supervised by the
Board of Governors, as if the Council had made a determination under
section 113 with respect to that entity.
(c) <> Appeal.--
(1) Request for hearing.--An entity may request, in writing,
an opportunity for a written or oral hearing before the Council
to appeal its treatment as a nonbank financial company
supervised by the Board of Governors in accordance with this
section. Upon receipt of the request, the Council shall fix a
time (not later than 30 days after the date of receipt of the
request) and place at which such entity may appear, personally
or through counsel, to submit written materials (or, at the sole
discretion of the Council, oral testimony and oral argument).
(2) Decision.--
(A) Proposed decision.--A Council decision to grant
an appeal under this subsection shall be made by a vote
of not fewer than \2/3\ of the voting members then
serving, including an affirmative vote by the
Chairperson. Not <> later than 60 days
after the date of a hearing under paragraph (1), the
Council shall submit a report to, and may testify
before, the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial
Services of the House of Representatives on the proposed
decision of the Council regarding an appeal under
paragraph (1), which report shall include a statement of
the basis for the proposed decision of the Council.
(B) Notice of final decision.--The Council shall
notify the subject entity of the final decision of the
Council regarding an appeal under paragraph (1), which
notice shall contain a statement of the basis for the
final decision of the Council, not later than 60 days
after the later of--
(i) the date of the submission of the report
under subparagraph (A); or
(ii) if, not later than 1 year after the date
of submission of the report under subparagraph
(A), the Committee on Banking, Housing, and Urban
Affairs of the Senate or the Committee on
Financial Services of the House of Representatives
holds one or more hearings regarding such report,
the date of the last such hearing.
(C) Considerations.--In making a decision regarding
an appeal under paragraph (1), the Council shall
consider whether the company meets the standards under
section 113(a) or 113(b), as applicable, and the
definition of the

[[Page 1408]]

term ``nonbank financial company'' under section 102.
The decision of the Council shall be final, subject to
the review under paragraph (3).
(3) Review.--If the Council denies an appeal under this
subsection, the Council shall, not less frequently than
annually, review and reevaluate the decision.
SEC. 118. <> COUNCIL FUNDING.

Any expenses of the Council shall be treated as expenses of, and
paid by, the Office of Financial Research.
SEC. 119. <> RESOLUTION OF SUPERVISORY
JURISDICTIONAL DISPUTES AMONG MEMBER
AGENCIES.

(a) Request for Council Recommendation.--The Council shall seek to
resolve a dispute among 2 or more member agencies, if--
(1) a member agency has a dispute with another member agency
about the respective jurisdiction over a particular bank holding
company, nonbank financial company, or financial activity or
product (excluding matters for which another dispute mechanism
specifically has been provided under title X);
(2) the Council determines that the disputing agencies
cannot, after a demonstrated good faith effort, resolve the
dispute without the intervention of the Council; and
(3) any of the member agencies involved in the dispute--
(A) <> provides all other disputants
prior notice of the intent to request dispute resolution
by the Council; and
(B) <> requests in writing, not
earlier than 14 days after providing the notice
described in subparagraph (A), that the Council seek to
resolve the dispute.

(b) Council Recommendation.--The Council shall seek to resolve each
dispute described in subsection (a)--
(1) within a reasonable time after receiving the dispute
resolution request;
(2) after consideration of relevant information provided by
each agency party to the dispute; and
(3) by agreeing with 1 of the disputants regarding the
entirety of the matter, or by determining a compromise position.

(c) Form of Recommendation.--Any Council recommendation under this
section shall--
(1) be in writing;
(2) include an explanation of the reasons therefor; and
(3) be approved by the affirmative vote of \2/3\ of the
voting members of the Council then serving.

(d) Nonbinding Effect.--Any recommendation made by the Council under
subsection (c) shall not be binding on the Federal agencies that are
parties to the dispute.
SEC. 120. <> ADDITIONAL STANDARDS APPLICABLE
TO ACTIVITIES OR PRACTICES FOR FINANCIAL
STABILITY PURPOSES.

(a) In General.--The Council may provide for more stringent
regulation of a financial activity by issuing recommendations to the
primary financial regulatory agencies to apply new or heightened
standards and safeguards, including standards enumerated in section 115,
for a financial activity or practice conducted by bank holding companies
or nonbank financial companies under their respective jurisdictions, if
the Council determines that the

[[Page 1409]]

conduct, scope, nature, size, scale, concentration, or
interconnectedness of such activity or practice could create or increase
the risk of significant liquidity, credit, or other problems spreading
among bank holding companies and nonbank financial companies, financial
markets of the United States, or low-income, minority, or underserved
communities.
(b) Procedure for Recommendations to Regulators.--
(1) Notice and opportunity for comment.--
The <> Council shall
consult with the primary financial regulatory agencies and
provide notice to the public and opportunity for comment for any
proposed recommendation that the primary financial regulatory
agencies apply new or heightened standards and safeguards for a
financial activity or practice.
(2) Criteria.--The new or heightened standards and
safeguards for a financial activity or practice recommended
under paragraph (1)--
(A) shall take costs to long-term economic growth
into account; and
(B) may include prescribing the conduct of the
activity or practice in specific ways (such as by
limiting its scope, or applying particular capital or
risk management requirements to the conduct of the
activity) or prohibiting the activity or practice.

(c) Implementation of Recommended Standards.--
(1) Role of primary financial regulatory agency.--
(A) In general.--Each primary financial regulatory
agency may impose, require reports regarding, examine
for compliance with, and enforce standards in accordance
with this section with respect to those entities for
which it is the primary financial regulatory agency.
(B) Rule of construction.--The authority under this
paragraph is in addition to, and does not limit, any
other authority of a primary financial regulatory
agency. Compliance by an entity with actions taken by a
primary financial regulatory agency under this section
shall be enforceable in accordance with the statutes
governing the respective jurisdiction of the primary
financial regulatory agency over the entity, as if the
agency action were taken under those statutes.
(2) Imposition of standards.--
The <> primary financial regulatory agency
shall impose the standards recommended by the Council in
accordance with subsection (a), or similar standards that the
Council deems acceptable, or shall explain in writing to the
Council, not later than 90 days after the date on which the
Council issues the recommendation, why the agency has determined
not to follow the recommendation of the Council.

(d) Report to Congress.--The Council shall report to Congress on--
(1) any recommendations issued by the Council under this
section;
(2) the implementation of, or failure to implement, such
recommendation on the part of a primary financial regulatory
agency; and
(3) in any case in which no primary financial regulatory
agency exists for the nonbank financial company conducting
financial activities or practices referred to in subsection (a),

[[Page 1410]]

recommendations for legislation that would prevent such
activities or practices from threatening the stability of the
financial system of the United States.

(e) Effect of Rescission of Identification.--
(1) Notice.--The Council may recommend to the relevant
primary financial regulatory agency that a financial activity or
practice no longer requires any standards or safeguards
implemented under this section.
(2) Determination of primary financial regulatory agency to
continue.--
(A) In general.--Upon receipt of a recommendation
under paragraph (1), a primary financial regulatory
agency that has imposed standards under this section
shall determine whether such standards should remain in
effect.
(B) Appeal process.--
Each <> primary financial regulatory
agency that has imposed standards under this section
shall promulgate regulations to establish a procedure
under which entities under its jurisdiction may appeal a
determination by such agency under this paragraph that
standards imposed under this section should remain in
effect.
SEC. 121. <> MITIGATION OF RISKS TO FINANCIAL
STABILITY.

(a) Mitigatory Actions.--If the Board of Governors determines that a
bank holding company with total consolidated assets of $50,000,000,000
or more, or a nonbank financial company supervised by the Board of
Governors, poses a grave threat to the financial stability of the United
States, the Board of Governors, upon an affirmative vote of not fewer
than \2/3\ of the voting members of the Council then serving, shall--
(1) limit the ability of the company to merge with, acquire,
consolidate with, or otherwise become affiliated with another
company;
(2) restrict the ability of the company to offer a financial
product or products;
(3) require the company to terminate one or more activities;
(4) impose conditions on the manner in which the company
conducts 1 or more activities; or
(5) if the Board of Governors determines that the actions
described in paragraphs (1) through (4) are inadequate to
mitigate a threat to the financial stability of the United
States in its recommendation, require the company to sell or
otherwise transfer assets or off-balance-sheet items to
unaffiliated entities.

(b) Notice <> and Hearing.--
(1) In general.--The Board of Governors, in consultation
with the Council, shall provide to a company described in
subsection (a) written notice that such company is being
considered for mitigatory action pursuant to this section,
including an explanation of the basis for, and description of,
the proposed mitigatory action.
(2) Hearing.--Not later than 30 days after the date of
receipt of notice under paragraph (1), the company may request,
in writing, an opportunity for a written or oral hearing before
the Board of Governors to contest the proposed mitigatory
action. Upon receipt of a timely request, the Board of Governors
shall fix a time (not later than 30 days after the date of

[[Page 1411]]

receipt of the request) and place at which such company may
appear, personally or through counsel, to submit written
materials (or, at the discretion of the Board of Governors, in
consultation with the Council, oral testimony and oral
argument).
(3) Decision.--Not later than 60 days after the date of a
hearing under paragraph (2), or not later than 60 days after the
provision of a notice under paragraph (1) if no hearing was
held, the Board of Governors shall notify the company of the
final decision of the Board of Governors, including the results
of the vote of the Council, as described in subsection (a).

(c) Factors for Consideration.--The Board of Governors and the
Council shall take into consideration the factors set forth in
subsection (a) or (b) of section 113, as applicable, in making any
determination under subsection (a).
(d) Application to Foreign Financial Companies.--The Board of
Governors may prescribe regulations regarding the application of this
section to foreign nonbank financial companies supervised by the Board
of Governors and foreign-based bank holding companies--
(1) giving due regard to the principle of national treatment
and equality of competitive opportunity; and
(2) taking into account the extent to which the foreign
nonbank financial company or foreign-based bank holding company
is subject on a consolidated basis to home country standards
that are comparable to those applied to financial companies in
the United States.
SEC. 122. <> GAO AUDIT OF COUNCIL.

(a) Authority To Audit.--The Comptroller General of the United
States may audit the activities of--
(1) the Council; and
(2) any person or entity acting on behalf of or under the
authority of the Council, to the extent that such activities
relate to work for the Council by such person or entity.

(b) Access <> to Information.--
(1) In general.--Notwithstanding any other provision of law,
the Comptroller General shall, upon request and at such
reasonable time and in such reasonable form as the Comptroller
General may request, have access to--
(A) any records or other information under the
control of or used by the Council;
(B) any records or other information under the
control of a person or entity acting on behalf of or
under the authority of the Council, to the extent that
such records or other information is relevant to an
audit under subsection (a); and
(C) the officers, directors, employees, financial
advisors, staff, working groups, and agents and
representatives of the Council (as related to the
activities on behalf of the Council of such agent or
representative), at such reasonable times as the
Comptroller General may request.
(2) Copies.--The Comptroller General may make and retain
copies of such books, accounts, and other records, access to
which is granted under this section, as the Comptroller General
considers appropriate.

[[Page 1412]]

SEC. 123. STUDY <> OF THE EFFECTS OF SIZE AND
COMPLEXITY OF FINANCIAL INSTITUTIONS ON
CAPITAL MARKET EFFICIENCY AND ECONOMIC
GROWTH.

(a) Study Required.--
(1) In general.--The Chairperson of the Council shall carry
out a study of the economic impact of possible financial
services regulatory limitations intended to reduce systemic
risk. Such study shall <> estimate the
benefits and costs on the efficiency of capital markets, on the
financial sector, and on national economic growth, of--
(A) explicit or implicit limits on the maximum size
of banks, bank holding companies, and other large
financial institutions;
(B) limits on the organizational complexity and
diversification of large financial institutions;
(C) requirements for operational separation between
business units of large financial institutions in order
to expedite resolution in case of failure;
(D) limits on risk transfer between business units
of large financial institutions;
(E) requirements to carry contingent capital or
similar mechanisms;
(F) limits on commingling of commercial and
financial activities by large financial institutions;
(G) segregation requirements between traditional
financial activities and trading or other high-risk
operations in large financial institutions; and
(H) other limitations on the activities or structure
of large financial institutions that may be useful to
limit systemic risk.
(2) Recommendations.--The study required by this section
shall include recommendations for the optimal structure of any
limits considered in subparagraphs (A) through (E), in order to
maximize their effectiveness and minimize their economic impact.

(b) Report.--Not later than the end of the 180-day period beginning
on the date of enactment of this title, and not later than every 5 years
thereafter, the Chairperson shall issue a report to the Congress
containing any findings and determinations made in carrying out the
study required under subsection (a).

Subtitle B--Office of Financial Research

SEC. 151. <> DEFINITIONS.

For purposes of this subtitle--
(1) the terms ``Office'' and ``Director'' mean the Office of
Financial Research established under this subtitle and the
Director thereof, respectively;
(2) the term ``financial company'' has the same meaning as
in title II, and includes an insured depository institution and
an insurance company;
(3) the term ``Data Center'' means the data center
established under section 154;
(4) the term ``Research and Analysis Center'' means the
research and analysis center established under section 154;

[[Page 1413]]

(5) the term ``financial transaction data'' means the
structure and legal description of a financial contract, with
sufficient detail to describe the rights and obligations between
counterparties and make possible an independent valuation;
(6) the term ``position data''--
(A) means data on financial assets or liabilities
held on the balance sheet of a financial company, where
positions are created or changed by the execution of a
financial transaction; and
(B) includes information that identifies
counterparties, the valuation by the financial company
of the position, and information that makes possible an
independent valuation of the position;
(7) the term ``financial contract'' means a legally binding
agreement between 2 or more counterparties, describing rights
and obligations relating to the future delivery of items of
intrinsic or extrinsic value among the counterparties; and
(8) the term ``financial instrument'' means a financial
contract in which the terms and conditions are publicly
available, and the roles of one or more of the counterparties
are assignable without the consent of any of the other
counterparties (including common stock of a publicly traded
company, government bonds, or exchange traded futures and
options contracts).
SEC. 152. <> OFFICE OF FINANCIAL RESEARCH
ESTABLISHED.

(a) Establishment.--There is established within the Department of
the Treasury the Office of Financial Research.
(b) Director.--
(1) In general.--
The <> Office shall be headed by
a Director, who shall be appointed by the President, by and with
the advice and consent of the Senate.
(2) Term of service.--The Director shall serve for a term of
6 years, except that, in the event that a successor is not
nominated and confirmed by the end of the term of service of a
Director, the Director may continue to serve until such time as
the next Director is appointed and confirmed.
(3) Executive level.--The Director shall be compensated at
Level III of the Executive Schedule.
(4) Prohibition on dual service.--The individual serving in
the position of Director may not, during such service, also
serve as the head of any financial regulatory agency.
(5) Responsibilities, duties, and authority.--The Director
shall have sole discretion in the manner in which the Director
fulfills the responsibilities and duties and exercises the
authorities described in this subtitle.

(c) Budget.--The Director, in consultation with the Chairperson,
shall establish the annual budget of the Office.
(d) Office Personnel.--
(1) In general.--The Director, in consultation with the
Chairperson, may fix the number of, and appoint and direct, all
employees of the Office.
(2) Compensation.--The Director, in consultation with the
Chairperson, shall fix, adjust, and administer the pay for all
employees of the Office, without regard to chapter 51 or
subchapter III of chapter 53 of title 5, United States Code,
relating to classification of positions and General Schedule pay
rates.

[[Page 1414]]

(3) Comparability.--Section 1206(a) of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 (12
U.S.C. 1833b(a)) is amended--
(A) by striking ``Finance Board,'' and inserting
``Finance Board, the Office of Financial Research, and
the Bureau of Consumer Financial Protection''; and
(B) by striking ``and the Office of Thrift
Supervision,''.
(4) Senior executives.--Section 3132(a)(1)(D) of title 5,
United States Code, is amended by striking ``and the National
Credit Union Administration;'' and inserting ``the National
Credit Union Administration, the Bureau of Consumer Financial
Protection, and the Office of Financial Research;''.

(e) Assistance From Federal Agencies.--Any department or agency of
the United States may provide to the Office and any special advisory,
technical, or professional committees appointed by the Office, such
services, funds, facilities, staff, and other support services as the
Office may determine advisable. Any Federal Government employee may be
detailed to the Office without reimbursement, and such detail shall be
without interruption or loss of civil service status or privilege.
(f) Procurement of Temporary and Intermittent Services.--The
Director may procure temporary and intermittent services under section
3109(b) of title 5, United States Code, at rates for individuals which
do not exceed the daily equivalent of the annual rate of basic pay
prescribed for Level V of the Executive Schedule under section 5316 of
such title.
(g) Post-employment Prohibitions.--
The <> Secretary, with the concurrence of the
Director of the Office of Government Ethics, shall issue regulations
prohibiting the Director and any employee of the Office who has had
access to the transaction or position data maintained by the Data Center
or other business confidential information about financial entities
required to report to the Office from being employed by or providing
advice or consulting services to a financial company, for a period of 1
year after last having had access in the course of official duties to
such transaction or position data or business confidential information,
regardless of whether that entity is required to report to the Office.
For employees whose access to business confidential information was
limited, the regulations may provide, on a case-by-case basis, for a
shorter period of post-employment prohibition, provided that the shorter
period does not compromise business confidential information.

(h) Technical and Professional Advisory Committees.--The Office, in
consultation with the Chairperson, may appoint such special advisory,
technical, or professional committees as may be useful in carrying out
the functions of the Office, and the members of such committees may be
staff of the Office, or other persons, or both.
(i) Fellowship Program.--The Office, in consultation with the
Chairperson, may establish and maintain an academic and professional
fellowship program, under which qualified academics and professionals
shall be invited to spend not longer than 2 years at the Office, to
perform research and to provide advanced training for Office personnel.
(j) Executive Schedule Compensation.--Section 5314 of title 5,
United States Code, is amended by adding at the end the following new
item:
``Director of the Office of Financial Research.''.

[[Page 1415]]

SEC. 153. <> PURPOSE AND DUTIES OF THE OFFICE.

(a) Purpose and Duties.--The purpose of the Office is to support the
Council in fulfilling the purposes and duties of the Council, as set
forth in subtitle A, and to support member agencies, by--
(1) collecting data on behalf of the Council, and providing
such data to the Council and member agencies;
(2) standardizing the types and formats of data reported and
collected;
(3) performing applied research and essential long-term
research;
(4) developing tools for risk measurement and monitoring;
(5) performing other related services;
(6) making the results of the activities of the Office
available to financial regulatory agencies; and
(7) assisting such member agencies in determining the types
and formats of data authorized by this Act to be collected by
such member agencies.

(b) Administrative Authority.--The Office may--
(1) share data and information, including software developed
by the Office, with the Council, member agencies, and the Bureau
of Economic Analysis, which shared data, information, and
software--
(A) shall be maintained with at least the same level
of security as is used by the Office; and
(B) may not be shared with any individual or entity
without the permission of the Council;
(2) sponsor and conduct research projects; and
(3) assist, on a reimbursable basis, with financial analyses
undertaken at the request of other Federal agencies that are not
member agencies.

(c) Rulemaking Authority.--
(1) Scope.--The Office, in consultation with the
Chairperson, shall issue rules, regulations, and orders only to
the extent necessary to carry out the purposes and duties
described in paragraphs (1), (2), and (7) of subsection (a).
(2) Standardization.--Member agencies, in consultation with
the Office, shall implement regulations promulgated by the
Office under paragraph (1) to standardize the types and formats
of data reported and collected on behalf of the Council, as
described in subsection (a)(2). If <> a
member agency fails to implement such regulations prior to the
expiration of the 3-year period following the date of
publication of final regulations, the Office, in consultation
with the Chairperson, may implement such regulations with
respect to the financial entities under the jurisdiction of the
member agency. This paragraph shall not supersede or interfere
with the independent authority of a member agency under other
law to collect data, in such format and manner as the member
agency requires.

(d) Testimony.--
(1) In general.--The <> Director of the
Office shall report to and testify before the Committee on
Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of Representatives
annually on the activities of the Office, including the work of
the Data Center and the Research and Analysis Center, and the
assessment of the

[[Page 1416]]

Office of significant financial market developments and
potential emerging threats to the financial stability of the
United States.
(2) No prior review.--No officer or agency of the United
States shall have any authority to require the Director to
submit the testimony required under paragraph (1) or other
congressional testimony to any officer or agency of the United
States for approval, comment, or review prior to the submission
of such testimony. Any such testimony to Congress shall include
a statement that the views expressed therein are those of the
Director and do not necessarily represent the views of the
President.

(e) Additional Reports.--The Director may provide additional reports
to Congress concerning the financial stability of the United States. The
Director <> shall notify the Council of any such
additional reports provided to Congress.

(f) Subpoena.--
(1) In general.--The Director may require from a financial
company, by subpoena, the production of the data requested under
subsection (a)(1) and section 154(b)(1), but only upon a written
finding by the Director that--
(A) such data is required to carry out the functions
described under this subtitle; and
(B) the Office has coordinated with the relevant
primary financial regulatory agency, as required under
section 154(b)(1)(B)(ii).
(2) Format.--Subpoenas under paragraph (1) shall bear the
signature of the Director, and shall be served by any person or
class of persons designated by the Director for that purpose.
(3) Enforcement.--In the case of contumacy or failure to
obey a subpoena, the subpoena shall be enforceable by order of
any appropriate district court of the United States. Any failure
to obey the order of the court may be punished by the court as a
contempt of court.
SEC. 154. <> ORGANIZATIONAL STRUCTURE;
RESPONSIBILITIES OF PRIMARY PROGRAMMATIC
UNITS.

(a) In General.--There are established within the Office, to carry
out the programmatic responsibilities of the Office--
(1) the Data Center; and
(2) the Research and Analysis Center.

(b) Data Center.--
(1) General duties.--
(A) Data collection.--The Data Center, on behalf of
the Council, shall collect, validate, and maintain all
data necessary to carry out the duties of the Data
Center, as described in this subtitle. The data
assembled shall be obtained from member agencies,
commercial data providers, publicly available data
sources, and financial entities under subparagraph (B).
(B) Authority.--
(i) In general.--The Office may, as determined
by the Council or by the Director in consultation
with the Council, require the submission of
periodic and other reports from any financial
company for the purpose of assessing the extent to
which a financial

[[Page 1417]]

activity or financial market in which the
financial company participates, or the financial
company itself, poses a threat to the financial
stability of the United States.
(ii) Mitigation of report burden.--Before
requiring the submission of a report from any
financial company that is regulated by a member
agency, any primary financial regulatory agency, a
foreign supervisory authority, or the Office shall
coordinate with such agencies or authority, and
shall, whenever possible, rely on information
available from such agencies or authority.
(iii) Collection of financial transaction and
position data.--The Office shall collect, on a
schedule determined by the Director, in
consultation with the Council, financial
transaction data and position data from financial
companies.
(C) Rulemaking.--The Office shall promulgate
regulations pursuant to subsections (a)(1), (a)(2),
(a)(7), and (c)(1) of section 153 regarding the type and
scope of the data to be collected by the Data Center
under this paragraph.
(2) Responsibilities.--
(A) Publication.--The <> Data Center shall prepare and publish, in
a manner that is easily accessible to the public--
(i) a financial company reference database;
(ii) a financial instrument reference
database; and
(iii) formats and standards for Office data,
including standards for reporting financial
transaction and position data to the Office.
(B) Confidentiality.--The Data Center shall not
publish any confidential data under subparagraph (A).
(3) Information security.--The Director shall ensure that
data collected and maintained by the Data Center are kept secure
and protected against unauthorized disclosure.
(4) Catalog of financial entities and instruments.--The Data
Center shall maintain a catalog of the financial entities and
instruments reported to the Office.
(5) Availability to the council and member agencies.--The
Data Center shall make data collected and maintained by the Data
Center available to the Council and member agencies, as
necessary to support their regulatory responsibilities.
(6) Other authority.--The <> Office shall, after consultation with the member
agencies, provide certain data to financial industry
participants and to the general public to increase market
transparency and facilitate research on the financial system, to
the extent that intellectual property rights are not violated,
business confidential information is properly protected, and the
sharing of such information poses no significant threats to the
financial system of the United States.

(c) Research and Analysis Center.--
(1) General duties.--The Research and Analysis Center, on
behalf of the Council, shall develop and maintain independent
analytical capabilities and computing resources--
(A) to develop and maintain metrics and reporting
systems for risks to the financial stability of the
United States;

[[Page 1418]]

(B) to monitor, investigate, and report on changes
in systemwide risk levels and patterns to the Council
and Congress;
(C) to conduct, coordinate, and sponsor research to
support and improve regulation of financial entities and
markets;
(D) to evaluate and report on stress tests or other
stability-related evaluations of financial entities
overseen by the member agencies;
(E) to maintain expertise in such areas as may be
necessary to support specific requests for advice and
assistance from financial regulators;
(F) to investigate disruptions and failures in the
financial markets, report findings, and make
recommendations to the Council based on those findings;
(G) to conduct studies and provide advice on the
impact of policies related to systemic risk; and
(H) to promote best practices for financial risk
management.

(d) Reporting Responsibilities.--
(1) Required reports.--Not later than 2 years after the date
of enactment of this Act, and not later than 120 days after the
end of each fiscal year thereafter, the Office shall prepare and
submit a report to Congress.
(2) Content.--Each report required by this subsection shall
assess the state of the United States financial system,
including--
(A) an analysis of any threats to the financial
stability of the United States;
(B) the status of the efforts of the Office in
meeting the mission of the Office; and
(C) key findings from the research and analysis of
the financial system by the Office.
SEC. <> 155. FUNDING.

(a) Financial Research Fund.--
(1) Fund established.--There is established in the Treasury
of the United States a separate fund to be known as the
``Financial Research Fund''.
(2) Fund receipts.--All amounts provided to the Office under
subsection (c), and all assessments that the Office receives
under subsection (d) shall be deposited into the Financial
Research Fund.
(3) Investments authorized.--
(A) Amounts in fund may be invested.--The Director
may request the Secretary to invest the portion of the
Financial Research Fund that is not, in the judgment of
the Director, required to meet the needs of the Office.
(B) Eligible investments.--Investments shall be made
by the Secretary in obligations of the United States or
obligations that are guaranteed as to principal and
interest by the United States, with maturities suitable
to the needs of the Financial Research Fund, as
determined by the Director.
(4) Interest and proceeds credited.--The interest on, and
the proceeds from the sale or redemption of, any obligations

[[Page 1419]]

held in the Financial Research Fund shall be credited to and
form a part of the Financial Research Fund.

(b) Use of Funds.--
(1) In general.--Funds obtained by, transferred to, or
credited to the Financial Research Fund shall be immediately
available to the Office, and shall remain available until
expended, to pay the expenses of the Office in carrying out the
duties and responsibilities of the Office.
(2) Fees, assessments, and other funds not government
funds.--Funds obtained by, transferred to, or credited to the
Financial Research Fund shall not be construed to be Government
funds or appropriated moneys.
(3) Amounts not subject to apportionment.--Notwithstanding
any other provision of law, amounts in the Financial Research
Fund shall not be subject to apportionment for purposes of
chapter 15 of title 31, United States Code, or under any other
authority, or for any other purpose.

(c) Interim Funding.--During <> the 2-year
period following the date of enactment of this Act, the Board of
Governors shall provide to the Office an amount sufficient to cover the
expenses of the Office.

(d) Permanent Self-funding.--Beginning <> 2 years after the date of enactment of
this Act, the Secretary shall establish, by regulation, and with the
approval of the Council, an assessment schedule, including the
assessment base and rates, applicable to bank holding companies with
total consolidated assets of 50,000,000,000 or greater and nonbank
financial companies supervised by the Board of Governors, that takes
into account differences among such companies, based on the
considerations for establishing the prudential standards under section
115, to collect assessments equal to the total expenses of the Office.
SEC. 156. <> TRANSITION OVERSIGHT.

(a) Purpose.--The purpose of this section is to ensure that the
Office--
(1) has an orderly and organized startup;
(2) attracts and retains a qualified workforce; and
(3) establishes comprehensive employee training and benefits
programs.

(b) Reporting Requirement.--
(1) In general.--The Office shall submit an annual report to
the Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the House of
Representatives that includes the plans described in paragraph
(2).
(2) Plans.--The plans described in this paragraph are as
follows:
(A) Training and workforce development plan.--The
Office shall submit a training and workforce development
plan that includes, to the extent practicable--
(i) identification of skill and technical
expertise needs and actions taken to meet those
requirements;
(ii) steps taken to foster innovation and
creativity;
(iii) leadership development and succession
planning; and
(iv) effective use of technology by employees.

[[Page 1420]]

(B) Workplace flexibility plan.--The Office shall
submit a workforce flexibility plan that includes, to
the extent practicable--
(i) telework;
(ii) flexible work schedules;
(iii) phased retirement;
(iv) reemployed annuitants;
(v) part-time work;
(vi) job sharing;
(vii) parental leave benefits and childcare
assistance;
(viii) domestic partner benefits;
(ix) other workplace flexibilities; or
(x) any combination of the items described in
clauses (i) through (ix).
(C) Recruitment and retention plan.--The Office
shall submit a recruitment and retention plan that
includes, to the extent practicable, provisions relating
to--
(i) the steps necessary to target highly
qualified applicant pools with diverse
backgrounds;
(ii) streamlined employment application
processes;
(iii) the provision of timely notification of
the status of employment applications to
applicants; and
(iv) the collection of information to measure
indicators of hiring effectiveness.

(c) Expiration.--The reporting requirement under subsection (b)
shall terminate 5 years after the date of enactment of this Act.
(d) Rule of Construction.--Nothing in this section may be construed
to affect--
(1) a collective bargaining agreement, as that term is
defined in section 7103(a)(8) of title 5, United States Code,
that is in effect on the date of enactment of this Act; or
(2) the rights of employees under chapter 71 of title 5,
United States Code.

Subtitle C--Additional Board of Governors Authority for Certain Nonbank
Financial Companies and Bank Holding Companies

SEC. 161. <> REPORTS BY AND EXAMINATIONS OF
NONBANK FINANCIAL COMPANIES BY THE BOARD
OF GOVERNORS.

(a) Reports.--
(1) In general.--The Board of Governors may require each
nonbank financial company supervised by the Board of Governors,
and any subsidiary thereof, to submit reports under oath, to
keep the Board of Governors informed as to--
(A) the financial condition of the company or
subsidiary, systems of the company or subsidiary for
monitoring and controlling financial, operating, and
other risks, and the extent to which the activities and
operations of the company or subsidiary pose a threat to
the financial stability of the United States; and
(B) compliance by the company or subsidiary with the
requirements of this title.

[[Page 1421]]

(2) Use of existing reports and information.--In carrying
out subsection (a), the Board of Governors shall, to the fullest
extent possible, use--
(A) reports and supervisory information that a
nonbank financial company or subsidiary thereof has been
required to provide to other Federal or State regulatory
agencies;
(B) information otherwise obtainable from Federal or
State regulatory agencies;
(C) information that is otherwise required to be
reported publicly; and
(D) externally audited financial statements of such
company or subsidiary.
(3) Availability.--Upon the request of the Board of
Governors, a nonbank financial company supervised by the Board
of Governors, or a subsidiary thereof, shall promptly provide to
the Board of Governors any information described in paragraph
(2).

(b) Examinations.--
(1) In general.--Subject to paragraph (2), the Board of
Governors may examine any nonbank financial company supervised
by the Board of Governors and any subsidiary of such company, to
inform the Board of Governors of--
(A) the nature of the operations and financial
condition of the company and such subsidiary;
(B) the financial, operational, and other risks of
the company or such subsidiary that may pose a threat to
the safety and soundness of such company or subsidiary
or to the financial stability of the United States;
(C) the systems for monitoring and controlling such
risks; and
(D) compliance by the company or such subsidiary
with the requirements of this title.
(2) Use of examination reports and information.--For
purposes of this subsection, the Board of Governors shall, to
the fullest extent possible, rely on reports of examination of
any subsidiary depository institution or functionally regulated
subsidiary made by the primary financial regulatory agency for
that subsidiary, and on information described in subsection
(a)(2).

(c) Coordination With Primary Financial Regulatory Agency.--The
Board of Governors shall--
(1) <> provide reasonable
notice to, and consult with, the primary financial regulatory
agency for any subsidiary before requiring a report or
commencing an examination of such subsidiary under this section;
and
(2) avoid duplication of examination activities, reporting
requirements, and requests for information, to the fullest
extent possible.
SEC. 162. <> ENFORCEMENT.

(a) In General.--Except as provided in subsection (b), a nonbank
financial company supervised by the Board of Governors and any
subsidiaries of such company (other than any depository institution
subsidiary) shall be subject to the provisions of subsections (b)
through (n) of section 8 of the Federal Deposit Insurance Act (12 U.S.C.
1818), in the same manner and to the same extent as if the company were
a bank holding company, as provided

[[Page 1422]]

in section 8(b)(3) of the Federal Deposit Insurance Act (12 U.S.C.
1818(b)(3)).
(b) Enforcement Authority for Functionally Regulated Subsidiaries.--
(1) Referral.--If the Board of Governors determines that a
condition, practice, or activity of a depository institution
subsidiary or functionally regulated subsidiary of a nonbank
financial company supervised by the Board of Governors does not
comply with the regulations or orders prescribed by the Board of
Governors under this Act, or otherwise poses a threat to the
financial stability of the United States, the Board of Governors
may recommend, in writing, to the primary financial regulatory
agency for the subsidiary that such agency initiate a
supervisory action or enforcement proceeding. The recommendation
shall be accompanied by a written explanation of the concerns
giving rise to the recommendation.
(2) Back-up authority of the board of governors.--If, during
the 60-day period beginning on the date on which the primary
financial regulatory agency receives a recommendation under
paragraph (1), the primary financial regulatory agency does not
take supervisory or enforcement action against a subsidiary that
is acceptable to the Board of Governors, the Board of Governors
(upon a vote of its members) may take the recommended
supervisory or enforcement action, as if the subsidiary were a
bank holding company subject to supervision by the Board of
Governors.
SEC. <> 163. ACQUISITIONS.

(a) Acquisitions of Banks; Treatment as a Bank Holding Company.--For
purposes of section 3 of the Bank Holding Company Act of 1956 (12 U.S.C.
1842), a nonbank financial company supervised by the Board of Governors
shall be deemed to be, and shall be treated as, a bank holding company.
(b) Acquisition of Nonbank Companies.--
(1) Prior notice for large acquisitions.--Notwithstanding
section 4(k)(6)(B) of the Bank Holding Company Act of 1956 (12
U.S.C. 1843(k)(6)(B)), a bank holding company with total
consolidated assets equal to or greater than $50,000,000,000 or
a nonbank financial company supervised by the Board of Governors
shall not acquire direct or indirect ownership or control of any
voting shares of any company (other than an insured depository
institution) that is engaged in activities described in section
4(k) of the Bank Holding Company Act of 1956 having total
consolidated assets of $10,000,000,000 or more, without
providing written notice to the Board of Governors in advance of
the transaction.
(2) Exemptions.--The prior notice requirement in paragraph
(1) shall not apply with regard to the acquisition of shares
that would qualify for the exemptions in section 4(c) or section
4(k)(4)(E) of the Bank Holding Company Act of 1956 (12 U.S.C.
1843(c) and (k)(4)(E)).
(3) Notice procedures.--The <> notice
procedures set forth in section 4(j)(1) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1843(j)(1)), without regard to
section 4(j)(3) of that Act, shall apply to an acquisition of
any company (other than an insured depository institution) by a
bank holding company with total consolidated assets equal to or
greater than

[[Page 1423]]

$50,000,000,000 or a nonbank financial company supervised by the
Board of Governors, as described in paragraph (1), including any
such company engaged in activities described in section 4(k) of
that Act.
(4) Standards for review.--In addition to the standards
provided in section 4(j)(2) of the Bank Holding Company Act of
1956 (12 U.S.C. 1843(j)(2)), the Board of Governors shall
consider the extent to which the proposed acquisition would
result in greater or more concentrated risks to global or United
States financial stability or the United States economy.
(5) Hart-Scott-Rodino filing requirement.--Solely for
purposes of section 7A(c)(8) of the Clayton Act (15 U.S.C.
18a(c)(8)), the transactions subject to the requirements of
paragraph (1) shall be treated as if Board of Governors approval
is not required.
SEC. <> 164. PROHIBITION AGAINST MANAGEMENT
INTERLOCKS BETWEEN CERTAIN FINANCIAL
COMPANIES.

A nonbank financial company supervised by the Board of Governors
shall be treated as a bank holding company for purposes of the
Depository Institutions Management Interlocks Act (12 U.S.C. 3201 et
seq.), except that the Board of Governors shall not exercise the
authority provided in section 7 of that Act (12 U.S.C. 3207) to permit
service by a management official of a nonbank financial company
supervised by the Board of Governors as a management official of any
bank holding company with total consolidated assets equal to or greater
than $50,000,000,000, or other nonaffiliated nonbank financial company
supervised by the Board of Governors (other than to provide a temporary
exemption for interlocks resulting from a merger, acquisition, or
consolidation).
SEC. 165. <> ENHANCED SUPERVISION AND
PRUDENTIAL STANDARDS FOR NONBANK FINANCIAL
COMPANIES SUPERVISED BY THE BOARD OF
GOVERNORS AND CERTAIN BANK HOLDING
COMPANIES.

(a) In General.--
(1) Purpose.--In order to prevent or mitigate risks to the
financial stability of the United States that could arise from
the material financial distress or failure, or ongoing
activities, of large, interconnected financial institutions, the
Board of Governors shall, on its own or pursuant to
recommendations by the Council under section 115, establish
prudential standards for nonbank financial companies supervised
by the Board of Governors and bank holding companies with total
consolidated assets equal to or greater than $50,000,000,000
that--
(A) are more stringent than the standards and
requirements applicable to nonbank financial companies
and bank holding companies that do not present similar
risks to the financial stability of the United States;
and
(B) increase in stringency, based on the
considerations identified in subsection (b)(3).
(2) Tailored application.--
(A) In general.--In prescribing more stringent
prudential standards under this section, the Board of
Governors may, on its own or pursuant to a
recommendation by the Council in accordance with section
115, differentiate among companies on an individual
basis or by category, taking into consideration their
capital structure, riskiness,

[[Page 1424]]

complexity, financial activities (including the
financial activities of their subsidiaries), size, and
any other risk-related factors that the Board of
Governors deems appropriate.
(B) Adjustment of threshold for application of
certain standards.--The Board of Governors may, pursuant
to a recommendation by the Council in accordance with
section 115, establish an asset threshold above
$50,000,000,000 for the application of any standard
established under subsections (c) through (g).

(b) Development of Prudential Standards.--
(1) In general.--
(A) Required standards.--The Board of Governors
shall establish prudential standards for nonbank
financial companies supervised by the Board of Governors
and bank holding companies described in subsection (a),
that shall include--
(i) risk-based capital requirements and
leverage limits, unless the Board of Governors, in
consultation with the Council, determines that
such requirements are not appropriate for a
company subject to more stringent prudential
standards because of the activities of such
company (such as investment company activities or
assets under management) or structure, in which
case, the Board of Governors shall apply other
standards that result in similarly stringent risk
controls;
(ii) liquidity requirements;
(iii) overall risk management requirements;
(iv) resolution plan and credit exposure
report requirements; and
(v) concentration limits.
(B) Additional standards authorized.--The Board of
Governors may establish additional prudential standards
for nonbank financial companies supervised by the Board
of Governors and bank holding companies described in
subsection (a), that include--
(i) a contingent capital requirement;
(ii) enhanced public disclosures;
(iii) short-term debt limits; and
(iv) such other prudential standards as the
Board or Governors, on its own or pursuant to a
recommendation made by the Council in accordance
with section 115, determines are appropriate.
(2) Standards for foreign financial companies.--In applying
the standards set forth in paragraph (1) to any foreign nonbank
financial company supervised by the Board of Governors or
foreign-based bank holding company, the Board of Governors
shall--
(A) give due regard to the principle of national
treatment and equality of competitive opportunity; and
(B) take into account the extent to which the
foreign financial company is subject on a consolidated
basis to home country standards that are comparable to
those applied to financial companies in the United
States.
(3) Considerations.--In prescribing prudential standards
under paragraph (1), the Board of Governors shall--

[[Page 1425]]

(A) take into account differences among nonbank
financial companies supervised by the Board of Governors
and bank holding companies described in subsection (a),
based on--
(i) the factors described in subsections (a)
and (b) of section 113;
(ii) whether the company owns an insured
depository institution;
(iii) nonfinancial activities and affiliations
of the company; and
(iv) any other risk-related factors that the
Board of Governors determines appropriate;
(B) to the extent possible, ensure that small
changes in the factors listed in subsections (a) and (b)
of section 113 would not result in sharp, discontinuous
changes in the prudential standards established under
paragraph (1) of this subsection;
(C) take into account any recommendations of the
Council under section 115; and
(D) adapt the required standards as appropriate in
light of any predominant line of business of such
company, including assets under management or other
activities for which particular standards may not be
appropriate.
(4) Consultation.--Before imposing prudential standards or
any other requirements pursuant to this section, including
notices of deficiencies in resolution plans and more stringent
requirements or divestiture orders resulting from such notices,
that are likely to have a significant impact on a functionally
regulated subsidiary or depository institution subsidiary of a
nonbank financial company supervised by the Board of Governors
or a bank holding company described in subsection (a), the Board
of Governors shall consult with each Council member that
primarily supervises any such subsidiary with respect to any
such standard or requirement.
(5) Report.--The Board of Governors shall submit an annual
report to Congress regarding the implementation of the
prudential standards required pursuant to paragraph (1),
including the use of such standards to mitigate risks to the
financial stability of the United States.

(c) Contingent Capital.--
(1) In general.--Subsequent to submission by the Council of
a report to Congress under section 115(c), the Board of
Governors may issue regulations that require each nonbank
financial company supervised by the Board of Governors and bank
holding companies described in subsection (a) to maintain a
minimum amount of contingent capital that is convertible to
equity in times of financial stress.
(2) Factors to consider.--In issuing regulations under this
subsection, the Board of Governors shall consider--
(A) the results of the study undertaken by the
Council, and any recommendations of the Council, under
section 115(c);
(B) an appropriate transition period for
implementation of contingent capital under this
subsection;
(C) the factors described in subsection (b)(3)(A);
(D) capital requirements applicable to the nonbank
financial company supervised by the Board of Governors

[[Page 1426]]

or a bank holding company described in subsection (a),
and subsidiaries thereof; and
(E) any other factor that the Board of Governors
deems appropriate.

(d) Resolution Plan and Credit Exposure Reports.--
(1) Resolution plan.--The Board of Governors shall require
each nonbank financial company supervised by the Board of
Governors and bank holding companies described in subsection (a)
to report periodically to the Board of Governors, the Council,
and the Corporation the plan of such company for rapid and
orderly resolution in the event of material financial distress
or failure, which shall include--
(A) information regarding the manner and extent to
which any insured depository institution affiliated with
the company is adequately protected from risks arising
from the activities of any nonbank subsidiaries of the
company;
(B) full descriptions of the ownership structure,
assets, liabilities, and contractual obligations of the
company;
(C) identification of the cross-guarantees tied to
different securities, identification of major
counterparties, and a process for determining to whom
the collateral of the company is pledged; and
(D) any other information that the Board of
Governors and the Corporation jointly require by rule or
order.
(2) Credit exposure report.--The Board of Governors shall
require each nonbank financial company supervised by the Board
of Governors and bank holding companies described in subsection
(a) to report periodically to the Board of Governors, the
Council, and the Corporation on--
(A) the nature and extent to which the company has
credit exposure to other significant nonbank financial
companies and significant bank holding companies; and
(B) the nature and extent to which other significant
nonbank financial companies and significant bank holding
companies have credit exposure to that company.
(3) Review.--The Board of Governors and the Corporation
shall review the information provided in accordance with this
subsection by each nonbank financial company supervised by the
Board of Governors and bank holding company described in
subsection (a).
(4) Notice of deficiencies.--If the Board of Governors and
the Corporation jointly determine, based on their review under
paragraph (3), that the resolution plan of a nonbank financial
company supervised by the Board of Governors or a bank holding
company described in subsection (a) is not credible or would not
facilitate an orderly resolution of the company under title 11,
United States Code--
(A) the Board of Governors and the Corporation shall
notify the company of the deficiencies in the resolution
plan; and
(B) the company shall resubmit the resolution plan
within a timeframe determined by the Board of Governors
and the Corporation, with revisions demonstrating that
the plan is credible and would result in an orderly
resolution under title 11, United States Code, including
any

[[Page 1427]]

proposed changes in business operations and corporate
structure to facilitate implementation of the plan.
(5) Failure to resubmit credible plan.--
(A) In general.--If a nonbank financial company
supervised by the Board of Governors or a bank holding
company described in subsection (a) fails to timely
resubmit the resolution plan as required under paragraph
(4), with such revisions as are required under
subparagraph (B), the Board of Governors and the
Corporation may jointly impose more stringent capital,
leverage, or liquidity requirements, or restrictions on
the growth, activities, or operations of the company, or
any subsidiary thereof, until such time as the company
resubmits a plan that remedies the deficiencies.
(B) Divestiture.--The Board of Governors and the
Corporation, in consultation with the Council, may
jointly direct a nonbank financial company supervised by
the Board of Governors or a bank holding company
described in subsection (a), by order, to divest certain
assets or operations identified by the Board of
Governors and the Corporation, to facilitate an orderly
resolution of such company under title 11, United States
Code, in the event of the failure of such company, in
any case in which--
(i) the Board of Governors and the Corporation
have jointly imposed more stringent requirements
on the company pursuant to subparagraph (A); and
(ii) the company has failed, within the 2-year
period beginning on the date of the imposition of
such requirements under subparagraph (A), to
resubmit the resolution plan with such revisions
as were required under paragraph (4)(B).
(6) No limiting effect.--A resolution plan submitted in
accordance with this subsection shall not be binding on a
bankruptcy court, a receiver appointed under title II, or any
other authority that is authorized or required to resolve the
nonbank financial company supervised by the Board, any bank
holding company, or any subsidiary or affiliate of the
foregoing.
(7) No private right of action.--No private right of action
may be based on any resolution plan submitted in accordance with
this subsection.
(8) Rules.--Not <> later than 18 months
after the date of enactment of this Act, the Board of Governors
and the Corporation shall jointly issue final rules implementing
this subsection.

(e) Concentration Limits.--
(1) Standards.--In <> order to limit the
risks that the failure of any individual company could pose to a
nonbank financial company supervised by the Board of Governors
or a bank holding company described in subsection (a), the Board
of Governors, by regulation, shall prescribe standards that
limit such risks.
(2) Limitation on credit exposure.--The regulations
prescribed by the Board of Governors under paragraph (1) shall
prohibit each nonbank financial company supervised by the Board
of Governors and bank holding company described in subsection
(a) from having credit exposure to any unaffiliated company that
exceeds 25 percent of the capital stock and surplus (or such
lower amount as the Board of Governors may

[[Page 1428]]

determine by regulation to be necessary to mitigate risks to the
financial stability of the United States) of the company.
(3) Credit exposure.--For <> purposes of
paragraph (2), ``credit exposure'' to a company means--
(A) all extensions of credit to the company,
including loans, deposits, and lines of credit;
(B) all repurchase agreements and reverse repurchase
agreements with the company, and all securities
borrowing and lending transactions with the company, to
the extent that such transactions create credit exposure
for the nonbank financial company supervised by the
Board of Governors or a bank holding company described
in subsection (a);
(C) all guarantees, acceptances, or letters of
credit (including endorsement or standby letters of
credit) issued on behalf of the company;
(D) all purchases of or investment in securities
issued by the company;
(E) counterparty credit exposure to the company in
connection with a derivative transaction between the
nonbank financial company supervised by the Board of
Governors or a bank holding company described in
subsection (a) and the company; and
(F) any other similar transactions that the Board of
Governors, by regulation, determines to be a credit
exposure for purposes of this section.
(4) Attribution rule.--For purposes of this subsection, any
transaction by a nonbank financial company supervised by the
Board of Governors or a bank holding company described in
subsection (a) with any person is a transaction with a company,
to the extent that the proceeds of the transaction are used for
the benefit of, or transferred to, that company.
(5) Rulemaking.--The Board of Governors may issue such
regulations and orders, including definitions consistent with
this section, as may be necessary to administer and carry out
this subsection.
(6) Exemptions.--This subsection shall not apply to any
Federal home loan bank. The Board of Governors may, by
regulation or order, exempt transactions, in whole or in part,
from the definition of the term ``credit exposure'' for purposes
of this subsection, if the Board of Governors finds that the
exemption is in the public interest and is consistent with the
purpose of this subsection.
(7) Transition period.--
(A) In general.--This <> subsection and any regulations and orders of the
Board of Governors under this subsection shall not be
effective until 3 years after the date of enactment of
this Act.
(B) Extension authorized.--The Board of Governors
may extend the period specified in subparagraph (A) for
not longer than an additional 2 years.

(f) Enhanced Public Disclosures.--The Board of Governors may
prescribe, by regulation, periodic public disclosures by nonbank
financial companies supervised by the Board of Governors and bank
holding companies described in subsection (a) in order to support market
evaluation of the risk profile, capital adequacy, and risk management
capabilities thereof.

[[Page 1429]]

(g) Short-term Debt Limits.--
(1) In general.--In order to mitigate the risks that an
over-accumulation of short-term debt could pose to financial
companies and to the stability of the United States financial
system, the Board of Governors may, by regulation, prescribe a
limit on the amount of short-term debt, including off-balance
sheet exposures, that may be accumulated by any bank holding
company described in subsection (a) and any nonbank financial
company supervised by the Board of Governors.
(2) Basis of limit.--Any limit prescribed under paragraph
(1) shall be based on the short-term debt of the company
described in paragraph (1) as a percentage of capital stock and
surplus of the company or on such other measure as the Board of
Governors considers appropriate.
(3) Short-term debt defined.--For purposes of this
subsection, the term ``short-term debt'' means such liabilities
with short-dated maturity that the Board of Governors
identifies, by regulation, except that such term does not
include insured deposits.
(4) Rulemaking authority.--In addition to prescribing
regulations under paragraphs (1) and (3), the Board of Governors
may prescribe such regulations, including definitions consistent
with this subsection, and issue such orders, as may be necessary
to carry out this subsection.
(5) Authority to issue exemptions and adjustments.--
Notwithstanding the Bank Holding Company Act of 1956 (12 U.S.C.
1841 et seq.), the Board of Governors may, if it determines such
action is necessary to ensure appropriate heightened prudential
supervision, with respect to a company described in paragraph
(1) that does not control an insured depository institution,
issue to such company an exemption from or adjustment to the
limit prescribed under paragraph (1).

(h) Risk Committee.--
(1) Nonbank financial companies supervised by the board of
governors.--The Board <> of
Governors shall require each nonbank financial company
supervised by the Board of Governors that is a publicly traded
company to establish a risk committee, as set forth in paragraph
(3), not later than 1 year after the date of receipt of a notice
of final determination under section 113(e)(3) with respect to
such nonbank financial company supervised by the Board of
Governors.
(2) Certain bank holding companies.--
(A) Mandatory regulations.--The Board of Governors
shall issue regulations requiring each bank holding
company that is a publicly traded company and that has
total consolidated assets of not less than
$10,000,000,000 to establish a risk committee, as set
forth in paragraph (3).
(B) Permissive regulations.--The Board of Governors
may require each bank holding company that is a publicly
traded company and that has total consolidated assets of
less than $10,000,000,000 to establish a risk committee,
as set forth in paragraph (3), as determined necessary
or appropriate by the Board of Governors to promote
sound risk management practices.
(3) Risk committee.--A risk committee required by this
subsection shall--

[[Page 1430]]

(A) be responsible for the oversight of the
enterprise-wide risk management practices of the nonbank
financial company supervised by the Board of Governors
or bank holding company described in subsection (a), as
applicable;
(B) include such number of independent directors as
the Board of Governors may determine appropriate, based
on the nature of operations, size of assets, and other
appropriate criteria related to the nonbank financial
company supervised by the Board of Governors or a bank
holding company described in subsection (a), as
applicable; and
(C) include at least 1 risk management expert having
experience in identifying, assessing, and managing risk
exposures of large, complex firms.
(4) Rulemaking.--The <> Board of Governors shall issue final rules to carry out
this subsection, not later than 1 year after the transfer date,
to take effect not later than 15 months after the transfer date.

(i) Stress Tests.--
(1) By the board of governors.--
(A) Annual tests required.--The Board of Governors,
in coordination with the appropriate primary financial
regulatory agencies and the Federal Insurance Office,
shall conduct annual analyses in which nonbank financial
companies supervised by the Board of Governors and bank
holding companies described in subsection (a) are
subject to evaluation of whether such companies have the
capital, on a total consolidated basis, necessary to
absorb losses as a result of adverse economic
conditions.
(B) Test parameters and consequences.--The Board of
Governors--
(i) shall provide for at least 3 different
sets of conditions under which the evaluation
required by this subsection shall be conducted,
including baseline, adverse, and severely adverse;
(ii) may require the tests described in
subparagraph (A) at bank holding companies and
nonbank financial companies, in addition to those
for which annual tests are required under
subparagraph (A);
(iii) may develop and apply such other
analytic techniques as are necessary to identify,
measure, and monitor risks to the financial
stability of the United States;
(iv) shall require the companies described in
subparagraph (A) to update their resolution plans
required under subsection (d)(1), as the Board of
Governors determines appropriate, based on the
results of the analyses; and
(v) shall <> publish a
summary of the results of the tests required under
subparagraph (A) or clause (ii) of this
subparagraph.
(2) By the company.--
(A) Requirement.--A <> nonbank
financial company supervised by the Board of Governors
and a bank holding company described in subsection (a)
shall conduct semiannual stress tests. All other
financial companies that have total consolidated assets
of more than $10,000,000,000 and are regulated by a
primary Federal financial regulatory

[[Page 1431]]

agency shall conduct annual stress tests. The tests
required under this subparagraph shall be conducted in
accordance with the regulations prescribed under
subparagraph (C).
(B) Report.--A company required to conduct stress
tests under subparagraph (A) shall submit a report to
the Board of Governors and to its primary financial
regulatory agency at such time, in such form, and
containing such information as the primary financial
regulatory agency shall require.
(C) Regulations.--Each Federal primary financial
regulatory agency, in coordination with the Board of
Governors and the Federal Insurance Office, shall issue
consistent and comparable regulations to implement this
paragraph that shall--
(i) define the term ``stress test'' for
purposes of this paragraph;
(ii) establish methodologies for the conduct
of stress tests required by this paragraph that
shall provide for at least 3 different sets of
conditions, including baseline, adverse, and
severely adverse;
(iii) establish the form and content of the
report required by subparagraph (B); and
(iv) <> require companies
subject to this paragraph to publish a summary of
the results of the required stress tests.

(j) Leverage Limitation.--
(1) Requirement.--The Board of Governors shall require a
bank holding company with total consolidated assets equal to or
greater than $50,000,000,000 or a nonbank financial company
supervised by the Board of Governors to maintain a debt to
equity ratio of no more than 15 to 1, upon a determination by
the Council that such company poses a grave threat to the
financial stability of the United States and that the imposition
of such requirement is necessary to mitigate the risk that such
company poses to the financial stability of the United States.
Nothing in this paragraph shall apply to a Federal home loan
bank.
(2) Considerations.--In making a determination under this
subsection, the Council shall consider the factors described in
subsections (a) and (b) of section 113 and any other risk-
related factors that the Council deems appropriate.
(3) Regulations.--The <> Board of
Governors shall promulgate regulations to establish procedures
and timelines for complying with the requirements of this
subsection.

(k) Inclusion of Off-balance-sheet Activities in Computing Capital
Requirements.--
(1) In general.--In the case of any bank holding company
described in subsection (a) or nonbank financial company
supervised by the Board of Governors, the computation of capital
for purposes of meeting capital requirements shall take into
account any off-balance-sheet activities of the company.
(2) Exemptions.--If the Board of Governors determines that
an exemption from the requirement under paragraph (1) is
appropriate, the Board of Governors may exempt a company, or any
transaction or transactions engaged in by such company, from the
requirements of paragraph (1).

[[Page 1432]]

(3) Off-balance-sheet activities defined.--For purposes of
this subsection, the term ``off-balance-sheet activities'' means
an existing liability of a company that is not currently a
balance sheet liability, but may become one upon the happening
of some future event, including the following transactions, to
the extent that they may create a liability:
(A) Direct credit substitutes in which a bank
substitutes its own credit for a third party, including
standby letters of credit.
(B) Irrevocable letters of credit that guarantee
repayment of commercial paper or tax-exempt securities.
(C) Risk participations in bankers' acceptances.
(D) Sale and repurchase agreements.
(E) Asset sales with recourse against the seller.
(F) Interest rate swaps.
(G) Credit swaps.
(H) Commodities contracts.
(I) Forward contracts.
(J) Securities contracts.
(K) Such other activities or transactions as the
Board of Governors may, by rule, define.
SEC. 166. <> EARLY REMEDIATION REQUIREMENTS.

(a) In General.--The <> Board of Governors, in
consultation with the Council and the Corporation, shall prescribe
regulations establishing requirements to provide for the early
remediation of financial distress of a nonbank financial company
supervised by the Board of Governors or a bank holding company described
in section 165(a), except that nothing in this subsection authorizes the
provision of financial assistance from the Federal Government.

(b) Purpose of the Early Remediation Requirements.--The purpose of
the early remediation requirements under subsection (a) shall be to
establish a series of specific remedial actions to be taken by a nonbank
financial company supervised by the Board of Governors or a bank holding
company described in section 165(a) that is experiencing increasing
financial distress, in order to minimize the probability that the
company will become insolvent and the potential harm of such insolvency
to the financial stability of the United States.
(c) Remediation Requirements.--The regulations prescribed by the
Board of Governors under subsection (a) shall--
(1) define measures of the financial condition of the
company, including regulatory capital, liquidity measures, and
other forward-looking indicators; and
(2) establish requirements that increase in stringency as
the financial condition of the company declines, including--
(A) requirements in the initial stages of financial
decline, including limits on capital distributions,
acquisitions, and asset growth; and
(B) requirements at later stages of financial
decline, including a capital restoration plan and
capital-raising requirements, limits on transactions
with affiliates, management changes, and asset sales.
SEC. 167. <> AFFILIATIONS.

(a) Affiliations.--Nothing in this subtitle shall be construed to
require a nonbank financial company supervised by the Board

[[Page 1433]]

of Governors, or a company that controls a nonbank financial company
supervised by the Board of Governors, to conform the activities thereof
to the requirements of section 4 of the Bank Holding Company Act of 1956
(12 U.S.C. 1843).
(b) Requirement.--
(1) In general.--
(A)
Board <> authority.--If a
nonbank financial company supervised by the Board of
Governors conducts activities other than those that are
determined to be financial in nature or incidental
thereto under section 4(k) of the Bank Holding Company
Act of 1956, the Board of Governors may require such
company to establish and conduct all or a portion of
such activities that are determined to be financial in
nature or incidental thereto in or through an
intermediate holding company established pursuant to
regulation of the Board of Governors, not later than 90
days (or such longer period as the Board of Governors
may deem appropriate) after the date on which the
nonbank financial company supervised by the Board of
Governors is notified of the determination of the Board
of Governors under this section.
(B) Necessary actions.--Notwithstanding subparagraph
(A), the Board of Governors shall require a nonbank
financial company supervised by the Board of Governors
to establish an intermediate holding company if the
Board of Governors makes a determination that the
establishment of such intermediate holding company is
necessary to--
(i) appropriately supervise activities that
are determined to be financial in nature or
incidental thereto; or
(ii) to ensure that supervision by the Board
of Governors does not extend to the commercial
activities of such nonbank financial company.
(2) Internal financial activities.--For purposes of this
subsection, activities that are determined to be financial in
nature or incidental thereto under section 4(k) of the Bank
Holding Company Act of 1956, as described in paragraph (1),
shall not include internal financial activities, including
internal treasury, investment, and employee benefit functions.
With respect to any internal financial activity engaged in for
the company or an affiliate and a non-affiliate of such company
during the year prior to the date of enactment of this Act, such
company (or an affiliate that is not an intermediate holding
company or subsidiary of an intermediate holding company) may
continue to engage in such activity, as long as not less than 2/
3 of the assets or 2/3 of the revenues generated from the
activity are from or attributable to such company or an
affiliate, subject to review by the Board of Governors, to
determine whether engaging in such activity presents undue risk
to such company or to the financial stability of the United
States.
(3) Source of strength.--A company that directly or
indirectly controls an intermediate holding company established
under this section shall serve as a source of strength to its
subsidiary intermediate holding company.
(4) Parent company reports.--The Board of Governors may,
from time to time, require reports under oath from a

[[Page 1434]]

company that controls an intermediate holding company, and from
the appropriate officers or directors of such company, solely
for purposes of ensuring compliance with the provisions of this
section, including assessing the ability of the company to serve
as a source of strength to its subsidiary intermediate holding
company pursuant to paragraph (3) and enforcing such compliance.
(5) Limited parent company enforcement.--
(A) In general.--In addition to any other authority
of the Board of Governors, the Board of Governors may
enforce compliance with the provisions of this
subsection that are applicable to any company described
in paragraph (1) that controls an intermediate holding
company under section 8 of the Federal Deposit Insurance
Act, and such company shall be subject to such section
(solely for such purposes) in the same manner and to the
same extent as if such company were a bank holding
company.
(B) Application of other act.--Any violation of this
subsection by any company that controls an intermediate
holding company may also be treated as a violation of
the Federal Deposit Insurance Act for purposes of
subparagraph (A).
(C) No effect on other authority.--No provision of
this paragraph shall be construed as limiting any
authority of the Board of Governors or any other Federal
agency under any other provision of law.

(c) Regulations.--The Board of Governors--
(1) shall <> promulgate regulations to
establish the criteria for determining whether to require a
nonbank financial company supervised by the Board of Governors
to establish an intermediate holding company under subsection
(b); and
(2) may promulgate regulations to establish any restrictions
or limitations on transactions between an intermediate holding
company or a nonbank financial company supervised by the Board
of Governors and its affiliates, as necessary to prevent unsafe
and unsound practices in connection with transactions between
such company, or any subsidiary thereof, and its parent company
or affiliates that are not subsidiaries of such company, except
that such regulations shall not restrict or limit any
transaction in connection with the bona fide acquisition or
lease by an unaffiliated person of assets, goods, or services.
SEC. 168. <> REGULATIONS.

The Board of Governors shall have authority to issue regulations to
implement subtitles A and C and the amendments made thereunder.
Except <> as otherwise specified in subtitle A or C,
not later than 18 months after the effective date of this Act, the Board
of Governors shall issue final regulations to implement subtitles A and
C, and the amendments made thereunder.
SEC. 169. <> AVOIDING DUPLICATION.

The Board of Governors shall take any action that the Board of
Governors deems appropriate to avoid imposing requirements under this
subtitle that are duplicative of requirements applicable to bank holding
companies and nonbank financial companies under other provisions of law.

[[Page 1435]]

SEC. 170. <> SAFE HARBOR.

(a) Regulations.--The <> Board of Governors shall
promulgate regulations on behalf of, and in consultation with, the
Council setting forth the criteria for exempting certain types or
classes of U.S. nonbank financial companies or foreign nonbank financial
companies from supervision by the Board of Governors.

(b) Considerations.--In developing the criteria under subsection
(a), the Board of Governors shall take into account the factors for
consideration described in subsections (a) and (b) of section 113 in
determining whether a U.S. nonbank financial company or foreign nonbank
financial company shall be supervised by the Board of Governors.
(c) Rule of Construction.--Nothing in this section shall be
construed to require supervision by the Board of Governors of a U.S.
nonbank financial company or foreign nonbank financial company, if such
company does not meet the criteria for exemption established under
subsection (a).
(d) Revisions.--
(1) In <> general.--The Board of Governors
shall, in consultation with the Council, review the regulations
promulgated under subsection (a), not less frequently than every
5 years, and based upon the review, the Board of Governors may
revise such regulations on behalf of, and in consultation with,
the Council to update as necessary the criteria set forth in
such regulations.
(2) Transition period.--No revisions under paragraph (1)
shall take effect before the end of the 2-year period after the
date of publication of such revisions in final form.

(e) Report.--The Chairman of the Board of Governors and the
Chairperson of the Council shall submit a joint report to the Committee
on Banking, Housing, and Urban Affairs of the Senate and the Committee
on Financial Services of the House of Representatives not later than 30
days after the date of the issuance in final form of regulations under
subsection (a), or any subsequent revision to such regulations under
subsection (d), as applicable. Such report shall include, at a minimum,
the rationale for exemption and empirical evidence to support the
criteria for exemption.
SEC. 171. <> LEVERAGE AND RISK-BASED CAPITAL
REQUIREMENTS.

(a) Definitions.--For purposes of this section, the following
definitions shall apply:
(1) Generally applicable leverage capital requirements.--The
term ``generally applicable leverage capital requirements''
means--
(A) the minimum ratios of tier 1 capital to average
total assets, as established by the appropriate Federal
banking agencies to apply to insured depository
institutions under the prompt corrective action
regulations implementing section 38 of the Federal
Deposit Insurance Act, regardless of total consolidated
asset size or foreign financial exposure; and
(B) includes the regulatory capital components in
the numerator of that capital requirement, average total
assets in the denominator of that capital requirement,
and the required ratio of the numerator to the
denominator.

[[Page 1436]]

(2) Generally applicable risk-based capital requirements.--
The term ``generally applicable risk-based capital
requirements'' means--
(A) the risk-based capital requirements, as
established by the appropriate Federal banking agencies
to apply to insured depository institutions under the
prompt corrective action regulations implementing
section 38 of the Federal Deposit Insurance Act,
regardless of total consolidated asset size or foreign
financial exposure; and
(B) includes the regulatory capital components in
the numerator of those capital requirements, the risk-
weighted assets in the denominator of those capital
requirements, and the required ratio of the numerator to
the denominator.
(3) Definition of depository institution holding company.--
The term ``depository institution holding company'' means a bank
holding company or a savings and loan holding company (as those
terms are defined in section 3 of the Federal Deposit Insurance
Act) that is organized in the United States, including any bank
or savings and loan holding company that is owned or controlled
by a foreign organization, but does not include the foreign
organization.

(b) Minimum Capital Requirements.--
(1) Minimum leverage capital requirements.--The appropriate
Federal banking agencies shall establish minimum leverage
capital requirements on a consolidated basis for insured
depository institutions, depository institution holding
companies, and nonbank financial companies supervised by the
Board of Governors. The minimum leverage capital requirements
established under this paragraph shall not be less than the
generally applicable leverage capital requirements, which shall
serve as a floor for any capital requirements that the agency
may require, nor quantitatively lower than the generally
applicable leverage capital requirements that were in effect for
insured depository institutions as of the date of enactment of
this Act.
(2) Minimum risk-based capital requirements.--The
appropriate Federal banking agencies shall establish minimum
risk-based capital requirements on a consolidated basis for
insured depository institutions, depository institution holding
companies, and nonbank financial companies supervised by the
Board of Governors. The minimum risk-based capital requirements
established under this paragraph shall not be less than the
generally applicable risk-based capital requirements, which
shall serve as a floor for any capital requirements that the
agency may require, nor quantitatively lower than the generally
applicable risk-based capital requirements that were in effect
for insured depository institutions as of the date of enactment
of this Act.
(3) Investments in financial subsidiaries.--For purposes of
this section, investments in financial subsidiaries that insured
depository institutions are required to deduct from regulatory
capital under section 5136A of the Revised Statutes of the
United States or section 46(a)(2) of the Federal Deposit
Insurance Act need not be deducted from regulatory capital by
depository institution holding companies or nonbank financial
companies supervised by the Board of Governors, unless such
capital deduction is required by the Board of Governors

[[Page 1437]]

or the primary financial regulatory agency in the case of
nonbank financial companies supervised by the Board of
Governors.
(4) Effective dates and phase-in periods.--
(A) Debt or equity instruments on or after may 19,
2010.--For debt or equity instruments issued on or after
May 19, 2010, by depository institution holding
companies or by nonbank financial companies supervised
by the Board of Governors, this section shall be deemed
to have become effective as of May 19, 2010.
(B) Debt or equity instruments issued before may 19,
2010.--For debt or equity instruments issued before May
19, 2010, by depository institution holding companies or
by nonbank financial companies supervised by the Board
of Governors, any regulatory capital deductions required
under this section shall be phased in incrementally over
a period of 3 years, with the phase-in period to begin
on January 1, 2013, except as set forth in subparagraph
(C).
(C) Debt or equity instruments of smaller
institutions.--For debt or equity instruments issued
before May 19, 2010, by depository institution holding
companies with total consolidated assets of less than
$15,000,000,000 as of December 31, 2009, and by
organizations that were mutual holding companies on May
19, 2010, the capital deductions that would be required
for other institutions under this section are not
required as a result of this section.
(D) Depository institution holding companies not
previously supervised by the board of governors.--For
any depository institution holding company that was not
supervised by the Board of Governors as of May 19, 2010,
the requirements of this section, except as set forth in
subparagraphs (A) and (B), shall be effective 5 years
after the date of enactment of this Act
(E) Certain bank holding company subsidiaries of
foreign banking organizations.--For bank holding company
subsidiaries of foreign banking organizations that have
relied on Supervision and Regulation Letter SR-01-1
issued by the Board of Governors (as in effect on May
19, 2010), the requirements of this section, except as
set forth in subparagraph (A), shall be effective 5
years after the date of enactment of this Act.
(5) Exceptions.--This section shall not apply to--
(A) debt or equity instruments issued to the United
States or any agency or instrumentality thereof pursuant
to the Emergency Economic Stabilization Act of 2008, and
prior to October 4, 2010;
(B) any Federal home loan bank; or
(C) any small bank holding company that is subject
to the Small Bank Holding Company Policy Statement of
the Board of Governors, as in effect on May 19, 2010.
(6) Study and report on small institution access to
capital.--
(A) Study required.--The Comptroller General of the
United States, after consultation with the Federal
banking

[[Page 1438]]

agencies, shall conduct a study of access to capital by
smaller insured depository institutions.
(B) Scope.--For <> purposes of
this study required by subparagraph (A), the term
``smaller insured depository institution'' means an
insured depository institution with total consolidated
assets of $5,000,000,000 or less.
(C) Report to congress.--Not later than 18 months
after the date of enactment of this Act, the Comptroller
General of the United States 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 summarizing the
results of the study conducted under subparagraph (A),
together with any recommendations for legislative or
regulatory action that would enhance the access to
capital of smaller insured depository institutions, in a
manner that is consistent with safe and sound banking
operations.
(7) Capital requirements to address activities that pose
risks to the financial system.--
(A) In general.--Subject to the recommendations of
the Council, in accordance with section 120, the Federal
banking agencies shall develop capital requirements
applicable to insured depository institutions,
depository institution holding companies, and nonbank
financial companies supervised by the Board of Governors
that address the risks that the activities of such
institutions pose, not only to the institution engaging
in the activity, but to other public and private
stakeholders in the event of adverse performance,
disruption, or failure of the institution or the
activity.
(B) Content.--Such rules shall address, at a
minimum, the risks arising from--
(i) significant volumes of activity in
derivatives, securitized products purchased and
sold, financial guarantees purchased and sold,
securities borrowing and lending, and repurchase
agreements and reverse repurchase agreements;
(ii) concentrations in assets for which the
values presented in financial reports are based on
models rather than historical cost or prices
deriving from deep and liquid 2-way markets; and
(iii) concentrations in market share for any
activity that would substantially disrupt
financial markets if the institution is forced to
unexpectedly cease the activity.
SEC. 172. EXAMINATION AND ENFORCEMENT ACTIONS FOR INSURANCE AND
ORDERLY LIQUIDATION PURPOSES.

(a) Examinations for Insurance and Resolution Purposes.--Section
10(b)(3) of the Federal Deposit Insurance Act (12 U.S.C. 1820(b)(3)) is
amended--
(1) by striking ``In addition'' and inserting the following:
``(A) In general.--In addition''; and
(2) by striking ``whenever the board of directors
determines'' and all that follows through the period and
inserting the following: ``or nonbank financial company
supervised by the Board of Governors or a bank holding company
described in section

[[Page 1439]]

165(a) of the Financial Stability Act of 2010, whenever the
Board of Directors determines that a special examination of any
such depository institution is necessary to determine the
condition of such depository institution for insurance purposes,
or of such nonbank financial company supervised by the Board of
Governors or bank holding company described in section 165(a) of
the Financial Stability Act of 2010, for the purpose of
implementing its authority to provide for orderly liquidation of
any such company under title II of that Act, provided that such
authority may not be used with respect to any such company that
is in a generally sound condition.
``(B) Limitation.--
Before <> conducting a special
examination of a nonbank financial company supervised by
the Board of Governors or a bank holding company
described in section 165(a) of the Financial Stability
Act of 2010, the Corporation shall review any available
and acceptable resolution plan that the company has
submitted in accordance with section 165(d) of that Act,
consistent with the nonbinding effect of such plan, and
available reports of examination, and shall coordinate
to the maximum extent practicable with the Board of
Governors, in order to minimize duplicative or
conflicting examinations.''.

(b) Enforcement Authority.--Section 8(t) of the Federal Deposit
Insurance Act (12 U.S.C. 1818(t)) is amended--
(1) in paragraph (1), by inserting ``, any depository
institution holding company,'' before ``or any institution-
affiliated party'';
(2) in paragraph (2)--
(A) by striking ``or'' at the end of subparagraph
(B);
(B) at the end of subparagraph (C), by striking the
period and inserting ``or''; and
(C) by inserting at the end the following new
subparagraph:
``(D) the conduct or threatened conduct (including
any acts or omissions) of the depository institution
holding company poses a risk to the Deposit Insurance
Fund, provided that such authority may not be used with
respect to a depository institution holding company that
is in generally sound condition and whose conduct does
not pose a foreseeable and material risk of loss to the
Deposit Insurance Fund;''; and
(3) by adding at the end the following:
``(6) Powers and duties with respect to depository
institution holding companies.--For purposes of exercising the
backup authority provided in this subsection--
``(A) the Corporation shall have the same powers
with respect to a depository institution holding company
and its affiliates as the appropriate Federal banking
agency has with respect to the holding company and its
affiliates; and
``(B) the holding company and its affiliates shall
have the same duties and obligations with respect to the
Corporation as the holding company and its affiliates
have with respect to the appropriate Federal banking
agency.''.

(c) Rule <> of Construction.--Nothing in this
Act shall be construed to limit or curtail the Corporation's current
authority to

[[Page 1440]]

examine or bring enforcement actions with respect to any insured
depository institution or institution-affiliated party.
SEC. 173. ACCESS TO UNITED STATES FINANCIAL MARKET BY FOREIGN
INSTITUTIONS.

(a) Establishment of Foreign Bank Offices in the United States.--
Section 7(d)(3) of the International Banking Act of 1978 (12 U.S.C.
3105(d)(3)) is amended--
(1) in subparagraph (C), by striking ``and'' at the end;
(2) in subparagraph (D), by striking the period at the end
of and inserting ``; and''; and
(3) by adding at the end the following new subparagraph:
``(E) for a foreign bank that presents a risk to the
stability of United States financial system, whether the
home country of the foreign bank has adopted, or is
making demonstrable progress toward adopting, an
appropriate system of financial regulation for the
financial system of such home country to mitigate such
risk.''.

(b) Termination of Foreign Bank Offices in the United States.--
Section 7(e)(1) of the International Banking Act of 1978 (12 U.S.C.
3105(e)(1)) is amended--
(1) in subparagraph (A), by striking ``or'' at the end;
(2) in subparagraph (B), by striking the period at the end
of and inserting ``; or''; and
(3) by inserting after subparagraph (B), the following new
subparagraph:
``(C) for a foreign bank that presents a risk to the
stability of the United States financial system, the
home country of the foreign bank has not adopted, or
made demonstrable progress toward adopting, an
appropriate system of financial regulation to mitigate
such risk.''.

(c) Registration or Succession to a United States Broker or Dealer
and Termination of Such Registration.--Section 15 of the Securities
Exchange Act of 1934 (15 U.S.C. 78o) is amended by adding at the end the
following new subsections:
``(k) Registration or Succession to a United States Broker or
Dealer.--In determining whether to permit a foreign person or an
affiliate of a foreign person to register as a United States broker or
dealer, or succeed to the registration of a United States broker or
dealer, the Commission may consider whether, for a foreign person, or an
affiliate of a foreign person that presents a risk to the stability of
the United States financial system, the home country of the foreign
person has adopted, or made demonstrable progress toward adopting, an
appropriate system of financial regulation to mitigate such risk.
``(l) Termination of a United States Broker or Dealer.--For a
foreign person or an affiliate of a foreign person that presents such a
risk to the stability of the United States financial system, the
Commission may determine to terminate the registration of such foreign
person or an affiliate of such foreign person as a broker or dealer in
the United States, if the Commission determines that the home country of
the foreign person has not adopted, or made demonstrable progress toward
adopting, an appropriate system of financial regulation to mitigate such
risk.''.

[[Page 1441]]

SEC. 174. STUDIES AND REPORTS ON HOLDING COMPANY CAPITAL
REQUIREMENTS.

(a) Study of Hybrid Capital Instruments.--The Comptroller General of
the United States, in consultation with the Board of Governors, the
Comptroller of the Currency, and the Corporation, shall conduct a study
of the use of hybrid capital instruments as a component of Tier 1
capital for banking institutions and bank holding companies. The study
shall consider--
(1) the current use of hybrid capital instruments, such as
trust preferred shares, as a component of Tier 1 capital;
(2) the differences between the components of capital
permitted for insured depository institutions and those
permitted for companies that control insured depository
institutions;
(3) the benefits and risks of allowing such instruments to
be used to comply with Tier 1 capital requirements;
(4) the economic impact of prohibiting the use of such
capital instruments for Tier 1;
(5) a review of the consequences of disqualifying trust
preferred instruments, and whether it could lead to the failure
or undercapitalization of existing banking organizations;
(6) the international competitive implications prohibiting
hybrid capital instruments for Tier 1;
(7) the impact on the cost and availability of credit in the
United States from such a prohibition;
(8) the availability of capital for financial institutions
with less than $10,000,000,000 in total assets; and
(9) any other relevant factors relating to the safety and
soundness of our financial system and potential economic impact
of such a prohibition.

(b) Study of Foreign Bank Intermediate Holding Company Capital
Requirements.--The Comptroller General of the United States, in
consultation with the Secretary, the Board of Governors, the Comptroller
of the Currency, and the Corporation, shall conduct a study of capital
requirements applicable to United States intermediate holding companies
of foreign banks that are bank holding companies or savings and loan
holding companies. The study shall consider--
(1) current Board of Governors policy regarding the
treatment of intermediate holding companies;
(2) the principle of national treatment and equality of
competitive opportunity for foreign banks operating in the
United States;
(3) the extent to which foreign banks are subject on a
consolidated basis to home country capital standards comparable
to United States capital standards;
(4) potential effects on United States banking organizations
operating abroad of changes to United States policy regarding
intermediate holding companies;
(5) the impact on the cost and availability of credit in the
United States from a change in United States policy regarding
intermediate holding companies; and
(6) any other relevant factors relating to the safety and
soundness of our financial system and potential economic impact
of such a prohibition.

(c) Report.--Not later than 18 months after the date of enactment of
this Act, the Comptroller General of the United States shall submit
reports to the Committee on Banking, Housing, and

[[Page 1442]]

Urban Affairs of the Senate and the Committee on Financial Services of
the House of Representatives summarizing the results of the studies
required under subsection (a). The reports shall include specific
recommendations for legislative or regulatory action regarding the
treatment of hybrid capital instruments, including trust preferred
shares, and shall explain the basis for such recommendations.
SEC. 175. <> INTERNATIONAL
POLICY COORDINATION.

(a) By the President.--The President, or a designee of the
President, may coordinate through all available international policy
channels, similar policies as those found in United States law relating
to limiting the scope, nature, size, scale, concentration, and
interconnectedness of financial companies, in order to protect financial
stability and the global economy.
(b) By the Council.--The Chairperson of the Council, in consultation
with the other members of the Council, shall regularly consult with the
financial regulatory entities and other appropriate organizations of
foreign governments or international organizations on matters relating
to systemic risk to the international financial system.
(c) By the Board of Governors and the Secretary.--The Board of
Governors and the Secretary shall consult with their foreign
counterparts and through appropriate multilateral organizations to
encourage comprehensive and robust prudential supervision and regulation
for all highly leveraged and interconnected financial companies.
SEC. 176. <> RULE OF CONSTRUCTION.

No regulation or standard imposed under this title may be construed
in a manner that would lessen the stringency of the requirements of any
applicable primary financial regulatory agency or any other Federal or
State agency that are otherwise applicable. This title, and the rules
and regulations or orders prescribed pursuant to this title, do not
divest any such agency of any authority derived from any other
applicable law.

TITLE II--ORDERLY LIQUIDATION AUTHORITY

SEC. 201. <> DEFINITIONS.

(a) In General.--In this title, the following definitions shall
apply:
(1) Administrative expenses of the receiver.--The term
``administrative expenses of the receiver'' includes--
(A) the actual, necessary costs and expenses
incurred by the Corporation as receiver for a covered
financial company in liquidating a covered financial
company; and
(B) any obligations that the Corporation as receiver
for a covered financial company determines are necessary
and appropriate to facilitate the smooth and orderly
liquidation of the covered financial company.
(2) Bankruptcy code.--The term ``Bankruptcy Code'' means
title 11, United States Code.
(3) Bridge financial company.--The term ``bridge financial
company'' means a new financial company organized by

[[Page 1443]]

the Corporation in accordance with section 210(h) for the
purpose of resolving a covered financial company.
(4) Claim.--The term ``claim'' means any right to payment,
whether or not such right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured.
(5) Company.--The term ``company'' has the same meaning as
in section 2(b) of the Bank Holding Company Act of 1956 (12
U.S.C. 1841(b)), except that such term includes any company
described in paragraph (11), the majority of the securities of
which are owned by the United States or any State.
(6) Court.--The term ``Court'' means the United States
District Court for the District of Columbia, unless the context
otherwise requires.
(7) Covered broker or dealer.--The term ``covered broker or
dealer'' means a covered financial company that is a broker or
dealer that--
(A) is registered with the Commission under section
15(b) of the Securities Exchange Act of 1934 (15 U.S.C.
78o(b)); and
(B) is a member of SIPC.
(8) Covered financial company.--The term ``covered financial
company''--
(A) means a financial company for which a
determination has been made under section 203(b); and
(B) does not include an insured depository
institution.
(9) Covered subsidiary.--The term ``covered subsidiary''
means a subsidiary of a covered financial company, other than--
(A) an insured depository institution;
(B) an insurance company; or
(C) a covered broker or dealer.
(10) Definitions relating to covered brokers and dealers.--
The terms ``customer'', ``customer name securities'', ``customer
property'', and ``net equity'' in the context of a covered
broker or dealer, have the same meanings as in section 16 of the
Securities Investor Protection Act of 1970 (15 U.S.C. 78lll).
(11) Financial company.--The term ``financial company''
means any company that--
(A) is incorporated or organized under any provision
of Federal law or the laws of any State;
(B) is--
(i) a bank holding company, as defined in
section 2(a) of the Bank Holding Company Act of
1956 (12 U.S.C. 1841(a));
(ii) a nonbank financial company supervised by
the Board of Governors;
(iii) any company that is predominantly
engaged in activities that the Board of Governors
has determined are financial in nature or
incidental thereto for purposes of section 4(k) of
the Bank Holding Company Act of 1956 (12 U.S.C.
1843(k)) other than a company described in clause
(i) or (ii); or
(iv) any subsidiary of any company described
in any of clauses (i) through (iii) that is
predominantly engaged in activities that the Board
of Governors has

[[Page 1444]]

determined are financial in nature or incidental
thereto for purposes of section 4(k) of the Bank
Holding Company Act of 1956 (12 U.S.C. 1843(k))
(other than a subsidiary that is an insured
depository institution or an insurance company);
and
(C) is not a Farm Credit System institution
chartered under and subject to the provisions of the
Farm Credit Act of 1971, as amended (12 U.S.C. 2001 et
seq.), a governmental entity, or a regulated entity, as
defined under section 1303(20) of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992
(12 U.S.C. 4502(20)).
(12) Fund.--The term ``Fund'' means the Orderly Liquidation
Fund established under section 210(n).
(13) Insurance company.--The term ``insurance company''
means any entity that is--
(A) engaged in the business of insurance;
(B) subject to regulation by a State insurance
regulator; and
(C) covered by a State law that is designed to
specifically deal with the rehabilitation, liquidation,
or insolvency of an insurance company.
(14) Nonbank financial company.--The term ``nonbank
financial company'' has the same meaning as in section
102(a)(4)(C).
(15) Nonbank financial company supervised by the board of
governors.--The term ``nonbank financial company supervised by
the Board of Governors'' has the same meaning as in section
102(a)(4)(D).
(16) SIPC.--The term ``SIPC'' means the Securities Investor
Protection Corporation.

(b) Definitional <> Criteria.--For purpose of
the definition of the term ``financial company'' under subsection
(a)(11), no company shall be deemed to be predominantly engaged in
activities that the Board of Governors has determined are financial in
nature or incidental thereto for purposes of section 4(k) of the Bank
Holding Company Act of 1956 (12 U.S.C. 1843(k)), if the consolidated
revenues of such company from such activities constitute less than 85
percent of the total consolidated revenues of such company, as the
Corporation, in consultation with the Secretary, shall establish by
regulation. In determining whether a company is a financial company
under this title, the consolidated revenues derived from the ownership
or control of a depository institution shall be included.
SEC. 202. <> JUDICIAL REVIEW.

(a) Commencement of Orderly Liquidation.--
(1) Petition to district court.--
(A) District court review.--
(i) Petition to district court.--
Subsequent <> to a
determination by the Secretary under section 203
that a financial company satisfies the criteria in
section 203(b), the Secretary shall notify the
Corporation and the covered financial
company. <> If the board of
directors (or body performing similar functions)
of the covered financial company acquiesces or
consents to the appointment of the Corporation as
receiver, the Secretary shall appoint the
Corporation as receiver. If

[[Page 1445]]

the board of directors (or body performing similar
functions) of the covered financial company does
not acquiesce or consent to the appointment of the
Corporation as receiver, the Secretary shall
petition the United States District Court for the
District of Columbia for an order authorizing the
Secretary to appoint the Corporation as receiver.
(ii) Form and content of order.--The Secretary
shall present all relevant findings and the
recommendation made pursuant to section 203(a) to
the Court. The petition shall be filed under seal.
(iii) Determination.--On a strictly
confidential basis, and without any prior public
disclosure, the Court, after notice to the covered
financial company and a hearing in which the
covered financial company may oppose the petition,
shall determine whether the determination of the
Secretary that the covered financial company is in
default or in danger of default and satisfies the
definition of a financial company under section
201(a)(11) is arbitrary and capricious.
(iv) Issuance of order.--If the Court
determines that the determination of the Secretary
that the covered financial company is in default
or in danger of default and satisfies the
definition of a financial company under section
201(a)(11)--
(I) is not arbitrary and capricious,
the Court shall issue an order
immediately authorizing the Secretary to
appoint the Corporation as receiver of
the covered financial company; or
(II) is arbitrary and capricious,
the Court shall immediately provide to
the Secretary a written statement of
each reason supporting its
determination, and afford the Secretary
an immediate opportunity to amend and
refile the petition under clause (i).
(v) Petition granted by operation of law.--If
the Court does not make a determination within 24
hours of receipt of the petition--
(I) the petition shall be granted by
operation of law;
(II) the Secretary shall appoint the
Corporation as receiver; and
(III) liquidation under this title
shall automatically and without further
notice or action be commenced and the
Corporation may immediately take all
actions authorized under this title.
(B) Effect of determination.--The determination of
the Court under subparagraph (A) shall be final, and
shall be subject to appeal only in accordance with
paragraph (2). The decision shall not be subject to any
stay or injunction pending appeal.
Upon <> conclusion of its proceedings
under subparagraph (A), the Court shall provide
immediately for the record a written statement of each
reason supporting the decision of the Court, and shall
provide copies thereof to the Secretary and the covered
financial company.

[[Page 1446]]

(C) Criminal penalties.--A person who recklessly
discloses a determination of the Secretary under section
203(b) or a petition of the Secretary under subparagraph
(A), or the pendency of court proceedings as provided
for under subparagraph (A), shall be fined not more than
250,000, or imprisoned for not more than 5 years, or
both.
(2) Appeal of decisions of the district court.--
(A) Appeal to court of appeals.--
(i) In general.--
Subject <> to clause (ii), the
United States Court of Appeals for the District of
Columbia Circuit shall have jurisdiction of an
appeal of a final decision of the Court filed by
the Secretary or a covered financial company,
through its board of directors, notwithstanding
section 210(a)(1)(A)(i), not later than 30 days
after the date on which the decision of the Court
is rendered or deemed rendered under this
subsection.
(ii) Condition of jurisdiction.--The Court of
Appeals shall have jurisdiction of an appeal by a
covered financial company only if the covered
financial company did not acquiesce or consent to
the appointment of a receiver by the Secretary
under paragraph (1)(A).
(iii) Expedition.--The Court of Appeals shall
consider any appeal under this subparagraph on an
expedited basis.
(iv) Scope of review.--For an appeal taken
under this subparagraph, review shall be limited
to whether the determination of the Secretary that
a covered financial company is in default or in
danger of default and satisfies the definition of
a financial company under section 201(a)(11) is
arbitrary and capricious.
(B) Appeal to the supreme court.--
(i) In <> general.--A
petition for a writ of certiorari to review a
decision of the Court of Appeals under
subparagraph (A) may be filed by the Secretary or
the covered financial company, through its board
of directors, notwithstanding section
210(a)(1)(A)(i), with the Supreme Court of the
United States, not later than 30 days after the
date of the final decision of the Court of
Appeals, and the Supreme Court shall have
discretionary jurisdiction to review such
decision.
(ii) Written statement.--
In <> the event of a petition
under clause (i), the Court of Appeals shall
immediately provide for the record a written
statement of each reason for its decision.
(iii) Expedition.--The Supreme Court shall
consider any petition under this subparagraph on
an expedited basis.
(iv) Scope of review.--Review by the Supreme
Court under this subparagraph shall be limited to
whether the determination of the Secretary that
the covered financial company is in default or in
danger of default and satisfies the definition of
a financial company under section 201(a)(11) is
arbitrary and capricious.

(b) Establishment and Transmittal of Rules and Procedures.--

[[Page 1447]]

(1) In general.--Not <> later than 6 months
after the date of enactment of this Act, the Court shall
establish such rules and procedures as may be necessary to
ensure the orderly conduct of proceedings, including rules and
procedures to ensure that the 24-hour deadline is met and that
the Secretary shall have an ongoing opportunity to amend and
refile petitions under subsection (a)(1).
(2) Publication of rules.--The rules and procedures
established under paragraph (1), and any modifications of such
rules and procedures, shall be recorded and shall be transmitted
to--
(A) the Committee on the Judiciary of the Senate;
(B) the Committee on Banking, Housing, and Urban
Affairs of the Senate;
(C) the Committee on the Judiciary of the House of
Representatives; and
(D) the Committee on Financial Services of the House
of Representatives.

(c) Provisions Applicable to Financial Companies.--
(1) Bankruptcy code.--Except as provided in this subsection,
the provisions of the Bankruptcy Code and rules issued
thereunder or otherwise applicable insolvency law, and not the
provisions of this title, shall apply to financial companies
that are not covered financial companies for which the
Corporation has been appointed as receiver.
(2) This title.--The provisions of this title shall
exclusively apply to and govern all matters relating to covered
financial companies for which the Corporation is appointed as
receiver, and no provisions of the Bankruptcy Code or the rules
issued thereunder shall apply in such cases, except as expressly
provided in this title.

(d) Time Limit on Receivership Authority.--
(1) Baseline period.--Any appointment of the Corporation as
receiver under this section shall terminate at the end of the 3-
year period beginning on the date on which such appointment is
made.
(2) Extension of time limit.--
The <> time limit established in paragraph
(1) may be extended by the Corporation for up to 1 additional
year, if the Chairperson of the Corporation determines and
certifies in writing to the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on Financial
Services of the House of Representatives that continuation of
the receivership is necessary--
(A) to--
(i) maximize the net present value return from
the sale or other disposition of the assets of the
covered financial company; or
(ii) minimize the amount of loss realized upon
the sale or other disposition of the assets of the
covered financial company; and
(B) to protect the stability of the financial system
of the United States.
(3) Second extension of time limit.--
(A) In general.--The time limit under this
subsection, as extended under paragraph (2), may be
extended for

[[Page 1448]]

up to 1 additional year, if the Chairperson of the
Corporation, with the concurrence of the Secretary,
submits the certifications described in paragraph (2).
(B) Additional report required.--Not later than 30
days after the date of commencement of the extension
under subparagraph (A), the Corporation shall submit a
report to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial
Services of the House of Representatives describing the
need for the extension and the specific plan of the
Corporation to conclude the receivership before the end
of the second extension.
(4) Ongoing litigation.--The <> time limit under this subsection, as extended under
paragraph (3), may be further extended solely for the purpose of
completing ongoing litigation in which the Corporation as
receiver is a party, provided that the appointment of the
Corporation as receiver shall terminate not later than 90 days
after the date of completion of such litigation, if--
(A) the Council determines that the Corporation used
its best efforts to conclude the receivership in
accordance with its plan before the end of the time
limit described in paragraph (3);
(B) the Council determines that the completion of
longer-term responsibilities in the form of ongoing
litigation justifies the need for an extension; and
(C) <> the Corporation
submits a report approved by the Council not later than
30 days after the date of the determinations by the
Council under subparagraphs (A) and (B) to the Committee
on Banking, Housing, and Urban Affairs of the Senate and
the Committee on Financial Services of the House of
Representatives, describing--
(i) the ongoing litigation justifying the need
for an extension; and
(ii) the specific plan of the Corporation to
complete the litigation and conclude the
receivership.
(5) Regulations.--The Corporation may issue regulations
governing the termination of receiverships under this title.
(6) No liability.--The Corporation and the Deposit Insurance
Fund shall not be liable for unresolved claims arising from the
receivership after the termination of the receivership.

(e) Study of Bankruptcy and Orderly Liquidation Process for
Financial Companies.--
(1) Study.--
(A) In general.--The Administrative Office of the
United States Courts and the Comptroller General of the
United States shall each monitor the activities of the
Court, and each such Office shall conduct separate
studies regarding the bankruptcy and orderly liquidation
process for financial companies under the Bankruptcy
Code.
(B) Issues to be studied.--
In <> conducting the study under
subparagraph (A), the Administrative Office of the
United States Courts and the Comptroller General of the
United States each shall evaluate--
(i) the effectiveness of chapter 7 or chapter
11 of the Bankruptcy Code in facilitating the
orderly liquidation or reorganization of financial
companies;

[[Page 1449]]

(ii) ways to maximize the efficiency and
effectiveness of the Court; and
(iii) ways to make the orderly liquidation
process under the Bankruptcy Code for financial
companies more effective.
(2) Reports.--Not later than 1 year after the date of
enactment of this Act, in each successive year until the third
year, and every fifth year after that date of enactment, the
Administrative Office of the United States Courts and the
Comptroller General of the United States shall submit to the
Committee on Banking, Housing, and Urban Affairs and the
Committee on the Judiciary of the Senate and the Committee on
Financial Services and the Committee on the Judiciary of the
House of Representatives separate reports summarizing the
results of the studies conducted under paragraph (1).

(f) Study of International Coordination Relating to Bankruptcy
Process for Financial Companies.--
(1) Study.--
(A) In general.--The Comptroller General of the
United States shall conduct a study regarding
international coordination relating to the orderly
liquidation of financial companies under the Bankruptcy
Code.
(B) Issues to be studied.--In conducting the study
under subparagraph (A), the Comptroller General of the
United States shall evaluate, with respect to the
bankruptcy process for financial companies--
(i) the extent to which international
coordination currently exists;
(ii) current mechanisms and structures for
facilitating international cooperation;
(iii) barriers to effective international
coordination; and
(iv) ways to increase and make more effective
international coordination.
(2) Report.--Not later than 1 year after the date of
enactment of this Act, the Comptroller General of the United
States shall submit to the Committee on Banking, Housing, and
Urban Affairs and the Committee on the Judiciary of the Senate
and the Committee on Financial Services and the Committee on the
Judiciary of the House of Representatives and the Secretary a
report summarizing the results of the study conducted under
paragraph (1).

(g) Study of Prompt Corrective Action Implementation by the
Appropriate Federal Agencies.--
(1) Study.--The Comptroller General of the United States
shall conduct a study regarding the implementation of prompt
corrective action by the appropriate Federal banking agencies.
(2) Issues to be studied.--
In <> conducting the study under paragraph
(1), the Comptroller General shall evaluate--
(A) the effectiveness of implementation of prompt
corrective action by the appropriate Federal banking
agencies and the resolution of insured depository
institutions by the Corporation; and
(B) ways to make prompt corrective action a more
effective tool to resolve the insured depository
institutions at the least possible long-term cost to the
Deposit Insurance Fund.

[[Page 1450]]

(3) Report to council.--Not later than 1 year after the date
of enactment of this Act, the Comptroller General shall submit a
report to the Council on the results of the study conducted
under this subsection.
(4) Council report of action.--Not later than 6 months after
the date of receipt of the report from the Comptroller General
under paragraph (3), the Council shall submit a report to the
Committee on Banking, Housing, and Urban Affairs of the Senate
and the Committee on Financial Services of the House of
Representatives on actions taken in response to the report,
including any recommendations made to the Federal primary
financial regulatory agencies under section 120.
SEC. 203. <> SYSTEMIC RISK DETERMINATION.

(a) Written Recommendation and Determination.--
(1) Vote required.--
(A) In general.--On their own initiative, or at the
request of the Secretary, the Corporation and the Board
of Governors shall consider whether to make a written
recommendation described in paragraph (2) with respect
to whether the Secretary should appoint the Corporation
as receiver for a financial company. Such recommendation
shall be made upon a vote of not fewer than \2/3\ of the
members of the Board of Governors then serving and \2/3\
of the members of the board of directors of the
Corporation then serving.
(B) Cases involving brokers or dealers.--In the case
of a broker or dealer, or in which the largest United
States subsidiary (as measured by total assets as of the
end of the previous calendar quarter) of a financial
company is a broker or dealer, the Commission and the
Board of Governors, at the request of the Secretary, or
on their own initiative, shall consider whether to make
the written recommendation described in paragraph (2)
with respect to the financial company. Subject to the
requirements in paragraph (2), such recommendation shall
be made upon a vote of not fewer than \2/3\ of the
members of the Board of Governors then serving and \2/3\
of the members of the Commission then serving, and in
consultation with the Corporation.
(C) Cases involving insurance companies.--In the
case of an insurance company, or in which the largest
United States subsidiary (as measured by total assets as
of the end of the previous calendar quarter) of a
financial company is an insurance company, the Director
of the Federal Insurance Office and the Board of
Governors, at the request of the Secretary or on their
own initiative, shall consider whether to make the
written recommendation described in paragraph (2) with
respect to the financial company. Subject to the
requirements in paragraph (2), such recommendation shall
be made upon a vote of not fewer than \2/3\ of the Board
of Governors then serving and the affirmative approval
of the Director of the Federal Insurance Office, and in
consultation with the Corporation.
(2) Recommendation required.--Any written recommendation
pursuant to paragraph (1) shall contain--

[[Page 1451]]

(A) an evaluation of whether the financial company
is in default or in danger of default;
(B) a description of the effect that the default of
the financial company would have on financial stability
in the United States;
(C) a description of the effect that the default of
the financial company would have on economic conditions
or financial stability for low income, minority, or
underserved communities;
(D) a recommendation regarding the nature and the
extent of actions to be taken under this title regarding
the financial company;
(E) an evaluation of the likelihood of a private
sector alternative to prevent the default of the
financial company;
(F) an evaluation of why a case under the Bankruptcy
Code is not appropriate for the financial company;
(G) an evaluation of the effects on creditors,
counterparties, and shareholders of the financial
company and other market participants; and
(H) an evaluation of whether the company satisfies
the definition of a financial company under section 201.

(b) Determination by the Secretary.--Notwithstanding any other
provision of Federal or State law, the Secretary shall take action in
accordance with section 202(a)(1)(A), if, upon the written
recommendation under subsection (a), the Secretary (in consultation with
the President) determines that--
(1) the financial company is in default or in danger of
default;
(2) the failure of the financial company and its resolution
under otherwise applicable Federal or State law would have
serious adverse effects on financial stability in the United
States;
(3) no viable private sector alternative is available to
prevent the default of the financial company;
(4) any effect on the claims or interests of creditors,
counterparties, and shareholders of the financial company and
other market participants as a result of actions to be taken
under this title is appropriate, given the impact that any
action taken under this title would have on financial stability
in the United States;
(5) any action under section 204 would avoid or mitigate
such adverse effects, taking into consideration the
effectiveness of the action in mitigating potential adverse
effects on the financial system, the cost to the general fund of
the Treasury, and the potential to increase excessive risk
taking on the part of creditors, counterparties, and
shareholders in the financial company;
(6) a Federal regulatory agency has ordered the financial
company to convert all of its convertible debt instruments that
are subject to the regulatory order; and
(7) the company satisfies the definition of a financial
company under section 201.

(c) Documentation and Review.--
(1) In general.--The Secretary shall--
(A) document any determination under subsection (b);
(B) retain the documentation for review under
paragraph (2); and

[[Page 1452]]

(C) <> notify the covered
financial company and the Corporation of such
determination.
(2) Report to congress.--Not later than 24 hours after the
date of appointment of the Corporation as receiver for a covered
financial company, the Secretary shall provide written notice of
the recommendations and determinations reached in accordance
with subsections (a) and (b) to the Majority Leader and the
Minority Leader of the Senate and the Speaker and the Minority
Leader of the House of Representatives, the Committee on
Banking, Housing, and Urban Affairs of the Senate, and the
Committee on Financial Services of the House of Representatives,
which shall consist of a summary of the basis for the
determination, including, to the extent available at the time of
the determination--
(A) the size and financial condition of the covered
financial company;
(B) the sources of capital and credit support that
were available to the covered financial company;
(C) the operations of the covered financial company
that could have had a significant impact on financial
stability, markets, or both;
(D) identification of the banks and financial
companies which may be able to provide the services
offered by the covered financial company;
(E) any potential international ramifications of
resolution of the covered financial company under other
applicable insolvency law;
(F) an estimate of the potential effect of the
resolution of the covered financial company under other
applicable insolvency law on the financial stability of
the United States;
(G) the potential effect of the appointment of a
receiver by the Secretary on consumers;
(H) the potential effect of the appointment of a
receiver by the Secretary on the financial system,
financial markets, and banks and other financial
companies; and
(I) whether resolution of the covered financial
company under other applicable insolvency law would
cause banks or other financial companies to experience
severe liquidity distress.
(3) Reports to congress and the public.--
(A) In general.--Not later than 60 days after the
date of appointment of the Corporation as receiver for a
covered financial company, the Corporation shall file a
report with the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial
Services of the House of Representatives--
(i) setting forth information on the financial
condition of the covered financial company as of
the date of the appointment, including a
description of its assets and liabilities;
(ii) describing the plan of, and actions taken
by, the Corporation to wind down the covered
financial company;
(iii) explaining each instance in which the
Corporation waived any applicable requirements of
part 366

[[Page 1453]]

of title 12, Code of Federal Regulations (or any
successor thereto) with respect to conflicts of
interest by any person in the private sector who
was retained to provide services to the
Corporation in connection with such receivership;
(iv) describing the reasons for the provision
of any funding to the receivership out of the
Fund;
(v) setting forth the expected costs of the
orderly liquidation of the covered financial
company;
(vi) setting forth the identity of any
claimant that is treated in a manner different
from other similarly situated claimants under
subsection (b)(4), (d)(4), or (h)(5)(E), the
amount of any additional payment to such claimant
under subsection (d)(4), and the reason for any
such action; and
(vii) <> which report the Corporation shall
publish on an online website maintained by the
Corporation, subject to maintaining appropriate
confidentiality.
(B) Amendments.--The <> Corporation
shall, on a timely basis, not less frequently than
quarterly, amend or revise and resubmit the reports
prepared under this paragraph, as necessary.
(C) Congressional testimony.--
The <> Corporation and the primary
financial regulatory agency, if any, of the financial
company for which the Corporation was appointed receiver
under this title shall appear before Congress, if
requested, not later than 30 days after the date on
which the Corporation first files the reports required
under subparagraph (A).
(4) Default or in danger of default.--For purposes of this
title, a financial company shall be considered to be in default
or in danger of default if, as determined in accordance with
subsection (b)--
(A) a case has been, or likely will promptly be,
commenced with respect to the financial company under
the Bankruptcy Code;
(B) the financial company has incurred, or is likely
to incur, losses that will deplete all or substantially
all of its capital, and there is no reasonable prospect
for the company to avoid such depletion;
(C) the assets of the financial company are, or are
likely to be, less than its obligations to creditors and
others; or
(D) the financial company is, or is likely to be,
unable to pay its obligations (other than those subject
to a bona fide dispute) in the normal course of
business.
(5) GAO review.--The Comptroller General of the United
States shall review and report to Congress on any determination
under subsection (b), that results in the appointment of the
Corporation as receiver, including--
(A) the basis for the determination;
(B) the purpose for which any action was taken
pursuant thereto;
(C) the likely effect of the determination and such
action on the incentives and conduct of financial
companies and their creditors, counterparties, and
shareholders; and

[[Page 1454]]

(D) the likely disruptive effect of the
determination and such action on the reasonable
expectations of creditors, counterparties, and
shareholders, taking into account the impact any action
under this title would have on financial stability in
the United States, including whether the rights of such
parties will be disrupted.

(d) Corporation Policies and Procedures.--As soon as is practicable
after the date of enactment of this Act, the Corporation shall establish
policies and procedures that are acceptable to the Secretary governing
the use of funds available to the Corporation to carry out this title,
including the terms and conditions for the provision and use of funds
under sections 204(d), 210(h)(2)(G)(iv), and 210(h)(9).
(e) Treatment of Insurance Companies and Insurance Company
Subsidiaries.--
(1) In general.--Notwithstanding subsection (b), if an
insurance company is a covered financial company or a subsidiary
or affiliate of a covered financial company, the liquidation or
rehabilitation of such insurance company, and any subsidiary or
affiliate of such company that is not excepted under paragraph
(2), shall be conducted as provided under applicable State law.
(2) Exception for subsidiaries and affiliates.--The
requirement of paragraph (1) shall not apply with respect to any
subsidiary or affiliate of an insurance company that is not
itself an insurance company.
(3) Backup <> authority.--
Notwithstanding paragraph (1), with respect to a covered
financial company described in paragraph (1), if, after the end
of the 60-day period beginning on the date on which a
determination is made under section 202(a) with respect to such
company, the appropriate regulatory agency has not filed the
appropriate judicial action in the appropriate State court to
place such company into orderly liquidation under the laws and
requirements of the State, the Corporation shall have the
authority to stand in the place of the appropriate regulatory
agency and file the appropriate judicial action in the
appropriate State court to place such company into orderly
liquidation under the laws and requirements of the State.
SEC. 204. <> ORDERLY LIQUIDATION OF COVERED
FINANCIAL COMPANIES.

(a) Purpose of Orderly Liquidation Authority.--It is the purpose of
this title to provide the necessary authority to liquidate failing
financial companies that pose a significant risk to the financial
stability of the United States in a manner that mitigates such risk and
minimizes moral hazard. The authority provided in this title shall be
exercised in the manner that best fulfills such purpose, so that--
(1) creditors and shareholders will bear the losses of the
financial company;
(2) management responsible for the condition of the
financial company will not be retained; and
(3) the Corporation and other appropriate agencies will take
all steps necessary and appropriate to assure that all parties,
including management, directors, and third parties, having
responsibility for the condition of the financial company

[[Page 1455]]

bear losses consistent with their responsibility, including
actions for damages, restitution, and recoupment of compensation
and other gains not compatible with such responsibility.

(b) Corporation as Receiver.--Upon the appointment of the
Corporation under section 202, the Corporation shall act as the receiver
for the covered financial company, with all of the rights and
obligations set forth in this title.
(c) Consultation.--The Corporation, as receiver--
(1) shall consult with the primary financial regulatory
agency or agencies of the covered financial company and its
covered subsidiaries for purposes of ensuring an orderly
liquidation of the covered financial company;
(2) may consult with, or under subsection (a)(1)(B)(v) or
(a)(1)(L) of section 210, acquire the services of, any outside
experts, as appropriate to inform and aid the Corporation in the
orderly liquidation process;
(3) shall consult with the primary financial regulatory
agency or agencies of any subsidiaries of the covered financial
company that are not covered subsidiaries, and coordinate with
such regulators regarding the treatment of such solvent
subsidiaries and the separate resolution of any such insolvent
subsidiaries under other governmental authority, as appropriate;
and
(4) shall consult with the Commission and the Securities
Investor Protection Corporation in the case of any covered
financial company for which the Corporation has been appointed
as receiver that is a broker or dealer registered with the
Commission under section 15(b) of the Securities Exchange Act of
1934 (15 U.S.C. 78o(b)) and is a member of the Securities
Investor Protection Corporation, for the purpose of determining
whether to transfer to a bridge financial company organized by
the Corporation as receiver, without consent of any customer,
customer accounts of the covered financial company.

(d) Funding for Orderly Liquidation.--Upon its appointment as
receiver for a covered financial company, and thereafter as the
Corporation may, in its discretion, determine to be necessary or
appropriate, the Corporation may make available to the receivership,
subject to the conditions set forth in section 206 and subject to the
plan described in section 210(n)(9), funds for the orderly liquidation
of the covered financial company. All funds provided by the Corporation
under this subsection shall have a priority of claims under subparagraph
(A) or (B) of section 210(b)(1), as applicable, including funds used
for--
(1) making loans to, or purchasing any debt obligation of,
the covered financial company or any covered subsidiary;
(2) purchasing or guaranteeing against loss the assets of
the covered financial company or any covered subsidiary,
directly or through an entity established by the Corporation for
such purpose;
(3) assuming or guaranteeing the obligations of the covered
financial company or any covered subsidiary to 1 or more third
parties;
(4) taking a lien on any or all assets of the covered
financial company or any covered subsidiary, including a first
priority lien on all unencumbered assets of the covered
financial company or any covered subsidiary to secure repayment
of any transactions conducted under this subsection;

[[Page 1456]]

(5) selling or transferring all, or any part, of such
acquired assets, liabilities, or obligations of the covered
financial company or any covered subsidiary; and
(6) making payments pursuant to subsections (b)(4), (d)(4),
and (h)(5)(E) of section 210.
SEC. 205. <> ORDERLY LIQUIDATION OF COVERED
BROKERS AND DEALERS.

(a) Appointment of SIPC as Trustee.--
(1) Appointment.--Upon the appointment of the Corporation as
receiver for any covered broker or dealer, the Corporation shall
appoint, without any need for court approval, the Securities
Investor Protection Corporation to act as trustee for the
liquidation under the Securities Investor Protection Act of 1970
(15 U.S.C. 78aaa et seq.) of the covered broker or dealer.
(2) Actions by sipc.--
(A) Filing.--Upon appointment of SIPC under
paragraph (1), SIPC shall promptly file with any Federal
district court of competent jurisdiction specified in
section 21 or 27 of the Securities Exchange Act of 1934
(15 U.S.C. 78u, 78aa), an application for a protective
decree under the Securities Investor Protection Act of
1970 (15 U.S.C. 78aaa et seq.) as to the covered broker
or dealer. The Federal district court shall accept and
approve the filing, including outside of normal business
hours, and shall immediately issue the protective decree
as to the covered broker or dealer.
(B) Administration by sipc.--Following entry of the
protective decree, and except as otherwise provided in
this section, the determination of claims and the
liquidation of assets retained in the receivership of
the covered broker or dealer and not transferred to the
bridge financial company shall be administered under the
Securities Investor Protection Act of 1970 (15 U.S.C.
78aaa et seq.) by SIPC, as trustee for the covered
broker or dealer.
(C) Definition of filing date.--For purposes of the
liquidation proceeding, the term ``filing date'' means
the date on which the Corporation is appointed as
receiver of the covered broker or dealer.
(D) Determination of claims.--As trustee for the
covered broker or dealer, SIPC shall determine and
satisfy, consistent with this title and with the
Securities Investor Protection Act of 1970 (15 U.S.C.
78aaa et seq.), all claims against the covered broker or
dealer arising on or before the filing date.

(b) Powers and Duties of SIPC.--
(1) In general.--Except as provided in this section, upon
its appointment as trustee for the liquidation of a covered
broker or dealer, SIPC shall have all of the powers and duties
provided by the Securities Investor Protection Act of 1970 (15
U.S.C. 78aaa et seq.), including, without limitation, all rights
of action against third parties, and shall conduct such
liquidation in accordance with the terms of the Securities
Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.),
except that SIPC shall have no powers or duties with respect to
assets and liabilities transferred by the Corporation from the
covered

[[Page 1457]]

broker or dealer to any bridge financial company established in
accordance with this title.
(2) Limitation of powers.--The exercise by SIPC of powers
and functions as trustee under subsection (a) shall not impair
or impede the exercise of the powers and duties of the
Corporation with regard to--
(A) any action, except as otherwise provided in this
title--
(i) to make funds available under section
204(d);
(ii) to organize, establish, operate, or
terminate any bridge financial company;
(iii) to transfer assets and liabilities;
(iv) to enforce or repudiate contracts; or
(v) to take any other action relating to such
bridge financial company under section 210; or
(B) determining claims under subsection (e).
(3) Protective decree.--SIPC and the Corporation, in
consultation with the Commission, shall jointly determine the
terms of the protective decree to be filed by SIPC with any
court of competent jurisdiction under section 21 or 27 of the
Securities Exchange Act of 1934 (15 U.S.C. 78u, 78aa), as
required by subsection (a).
(4) Qualified financial contracts.--Notwithstanding any
provision of the Securities Investor Protection Act of 1970 (15
U.S.C. 78aaa et seq.) to the contrary (including section
5(b)(2)(C) of that Act (15 U.S.C. 78eee(b)(2)(C))), the rights
and obligations of any party to a qualified financial contract
(as that term is defined in section 210(c)(8)) to which a
covered broker or dealer for which the Corporation has been
appointed receiver is a party shall be governed exclusively by
section 210, including the limitations and restrictions
contained in section 210(c)(10)(B).

(c) Limitation on Court Action.--Except as otherwise provided in
this title, no court may take any action, including any action pursuant
to the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et
seq.) or the Bankruptcy Code, to restrain or affect the exercise of
powers or functions of the Corporation as receiver for a covered broker
or dealer and any claims against the Corporation as such receiver shall
be determined in accordance with subsection (e) and such claims shall be
limited to money damages.
(d) Actions by Corporation as Receiver.--
(1) In general.--Notwithstanding any other provision of this
title, no action taken by the Corporation as receiver with
respect to a covered broker or dealer shall--
(A) adversely affect the rights of a customer to
customer property or customer name securities;
(B) diminish the amount or timely payment of net
equity claims of customers; or
(C) otherwise impair the recoveries provided to a
customer under the Securities Investor Protection Act of
1970 (15 U.S.C. 78aaa et seq.).
(2) Net proceeds.--The net proceeds from any transfer, sale,
or disposition of assets of the covered broker or dealer, or
proceeds thereof by the Corporation as receiver for the covered
broker or dealer shall be for the benefit of the estate of the
covered broker or dealer, as provided in this title.

[[Page 1458]]

(e) Claims Against the Corporation as Receiver.--Any claim against
the Corporation as receiver for a covered broker or dealer for assets
transferred to a bridge financial company established with respect to
such covered broker or dealer--
(1) shall be determined in accordance with section
210(a)(2); and
(2) may be reviewed by the appropriate district or
territorial court of the United States in accordance with
section 210(a)(5).

(f) Satisfaction of Customer Claims.--
(1) Obligations to customers.--Notwithstanding any other
provision of this title, all obligations of a covered broker or
dealer or of any bridge financial company established with
respect to such covered broker or dealer to a customer relating
to, or net equity claims based upon, customer property or
customer name securities shall be promptly discharged by SIPC,
the Corporation, or the bridge financial company, as applicable,
by the delivery of securities or the making of payments to or
for the account of such customer, in a manner and in an amount
at least as beneficial to the customer as would have been the
case had the actual proceeds realized from the liquidation of
the covered broker or dealer under this title been distributed
in a proceeding under the Securities Investor Protection Act of
1970 (15 U.S.C. 78aaa et seq.) without the appointment of the
Corporation as receiver and without any transfer of assets or
liabilities to a bridge financial company, and with a filing
date as of the date on which the Corporation is appointed as
receiver.
(2) Satisfaction of claims by sipc.--SIPC, as trustee for a
covered broker or dealer, shall satisfy customer claims in the
manner and amount provided under the Securities Investor
Protection Act of 1970 (15 U.S.C. 78aaa et seq.), as if the
appointment of the Corporation as receiver had not occurred, and
with a filing date as of the date on which the Corporation is
appointed as receiver. The Corporation shall satisfy customer
claims, to the extent that a customer would have received more
securities or cash with respect to the allocation of customer
property had the covered financial company been subject to a
proceeding under the Securities Investor Protection Act (15
U.S.C. 78aaa et seq.) without the appointment of the Corporation
as receiver, and with a filing date as of the date on which the
Corporation is appointed as receiver.

(g) Priorities.--
(1) Customer property.--As trustee for a covered broker or
dealer, SIPC shall allocate customer property and deliver
customer name securities in accordance with section 8(c) of the
Securities Investor Protection Act of 1970 (15 U.S.C. 78fff-
2(c)).
(2) Other claims.--All claims other than those described in
paragraph (1) (including any unpaid claim by a customer for the
allowed net equity claim of such customer from customer
property) shall be paid in accordance with the priorities in
section 210(b).

(h) Rulemaking.--The Commission and the Corporation, after
consultation with SIPC, shall jointly issue rules to implement this
section.

[[Page 1459]]

SEC. 206. <> MANDATORY TERMS AND CONDITIONS
FOR ALL ORDERLY LIQUIDATION ACTIONS.

In taking action under this title, the Corporation shall--
(1) determine that such action is necessary for purposes of
the financial stability of the United States, and not for the
purpose of preserving the covered financial company;
(2) ensure that the shareholders of a covered financial
company do not receive payment until after all other claims and
the Fund are fully paid;
(3) ensure that unsecured creditors bear losses in
accordance with the priority of claim provisions in section 210;
(4) ensure that management responsible for the failed
condition of the covered financial company is removed (if such
management has not already been removed at the time at which the
Corporation is appointed receiver);
(5) ensure that the members of the board of directors (or
body performing similar functions) responsible for the failed
condition of the covered financial company are removed, if such
members have not already been removed at the time the
Corporation is appointed as receiver; and
(6) not take an equity interest in or become a shareholder
of any covered financial company or any covered subsidiary.
SEC. 207. <> DIRECTORS NOT LIABLE FOR
ACQUIESCING IN APPOINTMENT OF RECEIVER.

The members of the board of directors (or body performing similar
functions) of a covered financial company shall not be liable to the
shareholders or creditors thereof for acquiescing in or consenting in
good faith to the appointment of the Corporation as receiver for the
covered financial company under section 203.
SEC. 208. <> DISMISSAL AND
EXCLUSION OF OTHER ACTIONS.

(a) In General.--Effective as of the date of the appointment of the
Corporation as receiver for the covered financial company under section
202 or the appointment of SIPC as trustee for a covered broker or dealer
under section 205, as applicable, any case or proceeding commenced with
respect to the covered financial company under the Bankruptcy Code or
the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.)
shall be dismissed, upon notice to the bankruptcy court (with respect to
a case commenced under the Bankruptcy Code), and upon notice to SIPC
(with respect to a covered broker or dealer) and no such case or
proceeding may be commenced with respect to a covered financial company
at any time while the orderly liquidation is pending.
(b) Revesting of Assets.--Effective as of the date of appointment of
the Corporation as receiver, the assets of a covered financial company
shall, to the extent they have vested in any entity other than the
covered financial company as a result of any case or proceeding
commenced with respect to the covered financial company under the
Bankruptcy Code, the Securities Investor Protection Act of 1970 (15
U.S.C. 78aaa et seq.), or any similar provision of State liquidation or
insolvency law applicable to the covered financial company, revest in
the covered financial company.
(c) Limitation.--Notwithstanding subsections (a) and (b), any order
entered or other relief granted by a bankruptcy court prior to the date
of appointment of the Corporation as receiver shall

[[Page 1460]]

continue with the same validity as if an orderly liquidation had not
been commenced.
SEC. 209. <> RULEMAKING; NON-CONFLICTING LAW.

The Corporation shall, in consultation with the Council, prescribe
such rules or regulations as the Corporation considers necessary or
appropriate to implement this title, including rules and regulations
with respect to the rights, interests, and priorities of creditors,
counterparties, security entitlement holders, or other persons with
respect to any covered financial company or any assets or other property
of or held by such covered financial company, and address the potential
for conflicts of interest between or among individual receiverships
established under this title or under the Federal Deposit Insurance Act.
To the extent possible, the Corporation shall seek to harmonize
applicable rules and regulations promulgated under this section with the
insolvency laws that would otherwise apply to a covered financial
company.
SEC. 210. <> POWERS AND DUTIES OF THE
CORPORATION.

(a) Powers and Authorities.--
(1) General powers.--
(A) Successor to covered financial company.--The
Corporation shall, upon appointment as receiver for a
covered financial company under this title, succeed to--
(i) all rights, titles, powers, and privileges
of the covered financial company and its assets,
and of any stockholder, member, officer, or
director of such company; and
(ii) title to the books, records, and assets
of any previous receiver or other legal custodian
of such covered financial company.
(B) Operation of the covered financial company
during the period of orderly liquidation.--The
Corporation, as receiver for a covered financial
company, may--
(i) take over the assets of and operate the
covered financial company with all of the powers
of the members or shareholders, the directors, and
the officers of the covered financial company, and
conduct all business of the covered financial
company;
(ii) collect all obligations and money owed to
the covered financial company;
(iii) perform all functions of the covered
financial company, in the name of the covered
financial company;
(iv) manage the assets and property of the
covered financial company, consistent with
maximization of the value of the assets in the
context of the orderly liquidation; and
(v) provide by contract for assistance in
fulfilling any function, activity, action, or duty
of the Corporation as receiver.
(C) Functions of covered financial company officers,
directors, and shareholders.--The Corporation may
provide for the exercise of any function by any member
or stockholder, director, or officer of any covered
financial company for which the Corporation has been
appointed as receiver under this title.

[[Page 1461]]

(D) Additional powers as receiver.--The Corporation
shall, as receiver for a covered financial company, and
subject to all legally enforceable and perfected
security interests and all legally enforceable security
entitlements in respect of assets held by the covered
financial company, liquidate, and wind-up the affairs of
a covered financial company, including taking steps to
realize upon the assets of the covered financial
company, in such manner as the Corporation deems
appropriate, including through the sale of assets, the
transfer of assets to a bridge financial company
established under subsection (h), or the exercise of any
other rights or privileges granted to the receiver under
this section.
(E) Additional powers with respect to failing
subsidiaries of a covered financial company.--
(i) In general.--In any case in which a
receiver is appointed for a covered financial
company under section 202, the Corporation may
appoint itself as receiver of any covered
subsidiary of the covered financial company that
is organized under Federal law or the laws of any
State, if the Corporation and the Secretary
jointly determine that--
(I) the covered subsidiary is in
default or in danger of default;
(II) such action would avoid or
mitigate serious adverse effects on the
financial stability or economic
conditions of the United States; and
(III) such action would facilitate
the orderly liquidation of the covered
financial company.
(ii) Treatment as covered financial company.--
If the Corporation is appointed as receiver of a
covered subsidiary of a covered financial company
under clause (i), the covered subsidiary shall
thereafter be considered a covered financial
company under this title, and the Corporation
shall thereafter have all the powers and rights
with respect to that covered subsidiary as it has
with respect to a covered financial company under
this title.
(F) Organization of bridge companies.--The
Corporation, as receiver for a covered financial
company, may organize a bridge financial company under
subsection (h).
(G) Merger; transfer of assets and liabilities.--
(i) In general.--Subject to clauses (ii) and
(iii), the Corporation, as receiver for a covered
financial company, may--
(I) merge the covered financial
company with another company; or
(II) transfer any asset or liability
of the covered financial company
(including any assets and liabilities
held by the covered financial company
for security entitlement holders, any
customer property, or any assets and
liabilities associated with any trust or
custody business) without obtaining any
approval, assignment, or consent with
respect to such transfer.
(ii) Federal agency approval; antitrust
review.--With respect to a transaction described
in

[[Page 1462]]

clause (i)(I) that requires approval by a Federal
agency--
(I) the transaction may not be
consummated before the 5th calendar day
after the date of approval by the
Federal agency responsible for such
approval;
(II)
if, <> in connection with any such
approval, a report on competitive
factors is required, the Federal agency
responsible for such approval shall
promptly notify the Attorney General of
the United States of the proposed
transaction, and the Attorney General
shall provide the required report not
later than 10 days after the date of the
request; and
(III) if <> notification under section 7A of
the Clayton Act is required with respect
to such transaction, then the required
waiting period shall end on the 15th day
after the date on which the Attorney
General and the Federal Trade Commission
receive such notification, unless the
waiting period is terminated earlier
under subsection (b)(2) of such section
7A, or is extended pursuant to
subsection (e)(2) of such section 7A.
(iii) Setoff.--Subject to the other provisions
of this title, any transferee of assets from a
receiver, including a bridge financial company,
shall be subject to such claims or rights as would
prevail over the rights of such transferee in such
assets under applicable noninsolvency law.
(H) Payment of valid obligations.--The Corporation,
as receiver for a covered financial company, shall, to
the extent that funds are available, pay all valid
obligations of the covered financial company that are
due and payable at the time of the appointment of the
Corporation as receiver, in accordance with the
prescriptions and limitations of this title.
(I) Applicable noninsolvency law.--Except as may
otherwise be provided in this title, the applicable
noninsolvency law shall be determined by the
noninsolvency choice of law rules otherwise applicable
to the claims, rights, titles, persons, or entities at
issue.
(J) Subpoena authority.--
(i) In general.--The Corporation, as receiver
for a covered financial company, may, for purposes
of carrying out any power, authority, or duty with
respect to the covered financial company
(including determining any claim against the
covered financial company and determining and
realizing upon any asset of any person in the
course of collecting money due the covered
financial company), exercise any power established
under section 8(n) of the Federal Deposit
Insurance Act, as if the Corporation were the
appropriate Federal banking agency for the covered
financial company, and the covered financial
company were an insured depository institution.
(ii) Rule of construction.--This subparagraph
may not be construed as limiting any rights that
the

[[Page 1463]]

Corporation, in any capacity, might otherwise have
to exercise any powers described in clause (i) or
under any other provision of law.
(K) Incidental powers.--The Corporation, as receiver
for a covered financial company, may exercise all powers
and authorities specifically granted to receivers under
this title, and such incidental powers as shall be
necessary to carry out such powers under this title.
(L) Utilization of private sector.--In carrying out
its responsibilities in the management and disposition
of assets from the covered financial company, the
Corporation, as receiver for a covered financial
company, may utilize the services of private persons,
including real estate and loan portfolio asset
management, property management, auction marketing,
legal, and brokerage services, if such services are
available in the private sector, and the Corporation
determines that utilization of such services is
practicable, efficient, and cost effective.
(M) Shareholders and creditors of covered financial
company.--Notwithstanding any other provision of law,
the Corporation, as receiver for a covered financial
company, shall succeed by operation of law to the
rights, titles, powers, and privileges described in
subparagraph (A), and shall terminate all rights and
claims that the stockholders and creditors of the
covered financial company may have against the assets of
the covered financial company or the Corporation arising
out of their status as stockholders or creditors, except
for their right to payment, resolution, or other
satisfaction of their claims, as permitted under this
section. The Corporation shall ensure that shareholders
and unsecured creditors bear losses, consistent with the
priority of claims provisions under this section.
(N) Coordination with foreign financial
authorities.--The Corporation, as receiver for a covered
financial company, shall coordinate, to the maximum
extent possible, with the appropriate foreign financial
authorities regarding the orderly liquidation of any
covered financial company that has assets or operations
in a country other than the United States.
(O) Restriction on transfers.--
(i) Selection of accounts for transfer.--If
the Corporation establishes one or more bridge
financial companies with respect to a covered
broker or dealer, the Corporation shall transfer
to one of such bridge financial companies, all
customer accounts of the covered broker or dealer,
and all associated customer name securities and
customer property, unless the Corporation, after
consulting with the Commission and SIPC,
determines that--
(I) the customer accounts, customer
name securities, and customer property
are likely to be promptly transferred to
another broker or dealer that is
registered with the Commission under
section 15(b) of the Securities Exchange
Act of 1934 (15 U.S.C. 73o(b)) and is a
member of SIPC; or
(II) the transfer of the accounts to
a bridge financial company would
materially interfere with

[[Page 1464]]

the ability of the Corporation to avoid
or mitigate serious adverse effects on
financial stability or economic
conditions in the United States.
(ii) Transfer of property.--SIPC, as trustee
for the liquidation of the covered broker or
dealer, and the Commission shall provide any and
all reasonable assistance necessary to complete
such transfers by the Corporation.
(iii) Customer consent and court approval not
required.--Neither customer consent nor court
approval shall be required to transfer any
customer accounts or associated customer name
securities or customer property to a bridge
financial company in accordance with this section.
(iv) Notification of sipc and sharing of
information.--The Corporation shall identify to
SIPC the customer accounts and associated customer
name securities and customer property transferred
to the bridge financial company. The Corporation
and SIPC shall cooperate in the sharing of any
information necessary for each entity to discharge
its obligations under this title and under the
Securities Investor Protection Act of 1970 (15
U.S.C. 78aaa et seq.) including by providing
access to the books and records of the covered
financial company and any bridge financial company
established in accordance with this title.
(2) Determination of claims.--
(A) In general.--The <> Corporation,
as receiver for a covered financial company, shall
report on claims, as set forth in section 203(c)(3).
Subject to paragraph (4) of this subsection, the
Corporation, as receiver for a covered financial
company, shall determine claims in accordance with the
requirements of this subsection and regulations
prescribed under section 209.
(B) Notice requirements.--
The <> Corporation, as
receiver for a covered financial company, in any case
involving the liquidation or winding up of the affairs
of a covered financial company, shall--
(i) promptly publish a notice to the creditors
of the covered financial company to present their
claims, together with proof, to the receiver by a
date specified in the notice, which shall be not
earlier than 90 days after the date of publication
of such notice; and
(ii) republish such notice 1 month and 2
months, respectively, after the date of
publication under clause (i).
(C) Mailing required.--The Corporation as receiver
shall mail a notice similar to the notice published
under clause (i) or (ii) of subparagraph (B), at the
time of such publication, to any creditor shown on the
books and records of the covered financial company--
(i) at the last address of the creditor
appearing in such books;
(ii) in any claim filed by the claimant; or
(iii) upon <> discovery of
the name and address of a claimant not appearing
on the books and records of the covered financial
company, not later than 30

[[Page 1465]]

days after the date of the discovery of such name
and address.
(3) Procedures for resolution of claims.--
(A) <> Decision period.--
(i) In general.--Prior to the 180th day after
the date on which a claim against a covered
financial company is filed with the Corporation as
receiver, or such later date as may be agreed as
provided in clause (ii), the Corporation shall
notify the claimant whether it allows or disallows
the claim, in accordance with subparagraphs (B),
(C), and (D).
(ii) Extension <> of time.--
By written agreement executed not later than 180
days after the date on which a claim against a
covered financial company is filed with the
Corporation, the period described in clause (i)
may be extended by written agreement between the
claimant and the Corporation. Failure to notify
the claimant of any disallowance within the time
period set forth in clause (i), as it may be
extended by agreement under this clause, shall be
deemed to be a disallowance of such claim, and the
claimant may file or continue an action in court,
as provided in paragraph (4).
(iii) Mailing of notice sufficient.--The
requirements of clause (i) shall be deemed to be
satisfied if the notice of any decision with
respect to any claim is mailed to the last address
of the claimant which appears--
(I) on the books, records, or both
of the covered financial company;
(II) in the claim filed by the
claimant; or
(III) in documents submitted in
proof of the claim.
(iv) Contents of notice of disallowance.--If
the Corporation as receiver disallows any claim
filed under clause (i), the notice to the claimant
shall contain--
(I) a statement of each reason for
the disallowance; and
(II) the procedures required to file
or continue an action in court, as
provided in paragraph (4).
(B) Allowance of proven claim.--The receiver shall
allow any claim received by the receiver on or before
the date specified in the notice under paragraph
(2)(B)(i), which is proved to the satisfaction of the
receiver.
(C) Disallowance of claims filed after end of filing
period.--
(i) In general.--Except as provided in clause
(ii), claims filed after the date specified in the
notice published under paragraph (2)(B)(i) shall
be disallowed, and such disallowance shall be
final.
(ii) Certain exceptions.--Clause (i) shall not
apply with respect to any claim filed by a
claimant after the date specified in the notice
published under paragraph (2)(B)(i), and such
claim may be considered by the receiver under
subparagraph (B), if--

[[Page 1466]]

(I) the claimant did not receive
notice of the appointment of the
receiver in time to file such claim
before such date; and
(II) such claim is filed in time to
permit payment of such claim.
(D) Authority to disallow claims.--
(i) In general.--The Corporation may disallow
any portion of any claim by a creditor or claim of
a security, preference, setoff, or priority which
is not proved to the satisfaction of the
Corporation.
(ii) Payments to undersecured creditors.--In
the case of a claim against a covered financial
company that is secured by any property or other
asset of such covered financial company, the
receiver--
(I) may treat the portion of such
claim which exceeds an amount equal to
the fair market value of such property
or other asset as an unsecured claim;
and
(II) may not make any payment with
respect to such unsecured portion of the
claim, other than in connection with the
disposition of all claims of unsecured
creditors of the covered financial
company.
(iii) Exceptions.--No provision of this
paragraph shall apply with respect to--
(I) any extension of credit from any
Federal reserve bank, or the
Corporation, to any covered financial
company; or
(II) subject to clause (ii), any
legally enforceable and perfected
security interest in the assets of the
covered financial company securing any
such extension of credit.
(E) Legal effect of filing.--
(i) Statute of limitations tolled.--For
purposes of any applicable statute of limitations,
the filing of a claim with the receiver shall
constitute a commencement of an action.
(ii) No prejudice to other actions.--Subject
to paragraph (8), the filing of a claim with the
receiver shall not prejudice any right of the
claimant to continue any action which was filed
before the date of appointment of the receiver for
the covered financial company.
(4) Judicial determination of claims.--
(A) In general.--Subject to subparagraph (B), a
claimant may file suit on a claim (or continue an action
commenced before the date of appointment of the
Corporation as receiver) in the district or territorial
court of the United States for the district within which
the principal place of business of the covered financial
company is located (and such court shall have
jurisdiction to hear such claim).
(B) Timing.--A claim under subparagraph (A) may be
filed before the end of the 60-day period beginning on
the earlier of--
(i) the end of the period described in
paragraph (3)(A)(i) (or, if extended by agreement
of the Corporation and the claimant, the period
described in paragraph (3)(A)(ii)) with respect to
any claim against a

[[Page 1467]]

covered financial company for which the
Corporation is receiver; or
(ii) the date of any notice of disallowance of
such claim pursuant to paragraph (3)(A)(i).
(C) Statute of limitations.--If any claimant fails
to file suit on such claim (or to continue an action on
such claim commenced before the date of appointment of
the Corporation as receiver) prior to the end of the 60-
day period described in subparagraph (B), the claim
shall be deemed to be disallowed (other than any portion
of such claim which was allowed by the receiver) as of
the end of such period, such disallowance shall be
final, and the claimant shall have no further rights or
remedies with respect to such claim.
(5) Expedited determination of claims.--
(A) Procedure required.--The Corporation shall
establish a procedure for expedited relief outside of
the claims process established under paragraph (3), for
any claimant that alleges--
(i) having a legally valid and enforceable or
perfected security interest in property of a
covered financial company or control of any
legally valid and enforceable security entitlement
in respect of any asset held by the covered
financial company for which the Corporation has
been appointed receiver; and
(ii) that irreparable injury will occur if the
claims procedure established under paragraph (3)
is followed.
(B) Determination period.--Prior to the end of the
90-day period beginning on the date on which a claim is
filed in accordance with the procedures established
pursuant to subparagraph (A), the Corporation shall--
(i) determine--
(I) whether to allow or disallow
such claim, or any portion thereof; or
(II) whether such claim should be
determined pursuant to the procedures
established pursuant to paragraph (3);
(ii) <> notify the
claimant of the determination; and
(iii) if the claim is disallowed, provide a
statement of each reason for the disallowance and
the procedure for obtaining a judicial
determination.
(C) Period for filing or renewing suit.--Any
claimant who files a request for expedited relief shall
be permitted to file suit (or continue a suit filed
before the date of appointment of the Corporation as
receiver seeking a determination of the rights of the
claimant with respect to such security interest (or such
security entitlement) after the earlier of--
(i) the end of the 90-day period beginning on
the date of the filing of a request for expedited
relief; or
(ii) the date on which the Corporation denies
the claim or a portion thereof.
(D) Statute <> of limitations.--
If an action described in subparagraph (C) is not filed,
or the motion to renew a previously filed suit is not
made, before the end of the 30-day period beginning on
the date on which such action

[[Page 1468]]

or motion may be filed in accordance with subparagraph
(C), the claim shall be deemed to be disallowed as of
the end of such period (other than any portion of such
claim which was allowed by the receiver), such
disallowance shall be final, and the claimant shall have
no further rights or remedies with respect to such
claim.
(E) Legal effect of filing.--
(i) Statute of limitations tolled.--For
purposes of any applicable statute of limitations,
the filing of a claim with the receiver shall
constitute a commencement of an action.
(ii) No prejudice to other actions.--Subject
to paragraph (8), the filing of a claim with the
receiver shall not prejudice any right of the
claimant to continue any action which was filed
before the appointment of the Corporation as
receiver for the covered financial company.
(6) Agreements against interest of the receiver.--No
agreement that tends to diminish or defeat the interest of the
Corporation as receiver in any asset acquired by the receiver
under this section shall be valid against the receiver, unless
such agreement--
(A) is in writing;
(B) was executed by an authorized officer or
representative of the covered financial company, or
confirmed in the ordinary course of business by the
covered financial company; and
(C) has been, since the time of its execution, an
official record of the company or the party claiming
under the agreement provides documentation, acceptable
to the receiver, of such agreement and its authorized
execution or confirmation by the covered financial
company.
(7) Payment of claims.--
(A) In general.--Subject to subparagraph (B), the
Corporation as receiver may, in its discretion and to
the extent that funds are available, pay creditor
claims, in such manner and amounts as are authorized
under this section, which are--
(i) allowed by the receiver;
(ii) approved by the receiver pursuant to a
final determination pursuant to paragraph (3) or
(5), as applicable; or
(iii) determined by the final judgment of a
court of competent jurisdiction.
(B) Limitation.--A creditor shall, in no event,
receive less than the amount that the creditor is
entitled to receive under paragraphs (2) and (3) of
subsection (d), as applicable.
(C) Payment of dividends on claims.--The Corporation
as receiver may, in its sole discretion, and to the
extent otherwise permitted by this section, pay
dividends on proven claims at any time, and no liability
shall attach to the Corporation as receiver, by reason
of any such payment or for failure to pay dividends to a
claimant whose claim is not proved at the time of any
such payment.
(D) Rulemaking by the corporation.--The Corporation
may prescribe such rules, including definitions of

[[Page 1469]]

terms, as the Corporation deems appropriate to establish
an interest rate for or to make payments of post-
insolvency interest to creditors holding proven claims
against the receivership estate of a covered financial
company, except that no such interest shall be paid
until the Corporation as receiver has satisfied the
principal amount of all creditor claims.
(8) Suspension of legal actions.--
(A) In <> general.--After the
appointment of the Corporation as receiver for a covered
financial company, the Corporation may request a stay in
any judicial action or proceeding in which such covered
financial company is or becomes a party, for a period of
not to exceed 90 days.
(B) Grant of stay by all courts required.--Upon
receipt of a request by the Corporation pursuant to
subparagraph (A), the court shall grant such stay as to
all parties.
(9) Additional rights and duties.--
(A) Prior final adjudication.--The Corporation shall
abide by any final, non-appealable judgment of any court
of competent jurisdiction that was rendered before the
appointment of the Corporation as receiver.
(B) Rights and remedies of receiver.--In the event
of any appealable judgment, the Corporation as receiver
shall--
(i) have all the rights and remedies available
to the covered financial company (before the date
of appointment of the Corporation as receiver
under section 202) and the Corporation, including
removal to Federal court and all appellate rights;
and
(ii) not be required to post any bond in order
to pursue such remedies.
(C) No attachment or execution.--No attachment or
execution may be issued by any court upon assets in the
possession of the Corporation as receiver for a covered
financial company.
(D) Limitation on judicial review.--Except as
otherwise provided in this title, no court shall have
jurisdiction over--
(i) any claim or action for payment from, or
any action seeking a determination of rights with
respect to, the assets of any covered financial
company for which the Corporation has been
appointed receiver, including any assets which the
Corporation may acquire from itself as such
receiver; or
(ii) any claim relating to any act or omission
of such covered financial company or the
Corporation as receiver.
(E) Disposition of assets.--In exercising any right,
power, privilege, or authority as receiver in connection
with any covered financial company for which the
Corporation is acting as receiver under this section,
the Corporation shall, to the greatest extent
practicable, conduct its operations in a manner that--
(i) maximizes the net present value return
from the sale or disposition of such assets;

[[Page 1470]]

(ii) minimizes the amount of any loss realized
in the resolution of cases;
(iii) mitigates the potential for serious
adverse effects to the financial system;
(iv) ensures timely and adequate competition
and fair and consistent treatment of offerors; and
(v) prohibits discrimination on the basis of
race, sex, or ethnic group in the solicitation and
consideration of offers.
(10) Statute of limitations for actions brought by
receiver. <> --
(A) In general.--Notwithstanding any provision of
any contract, the applicable statute of limitations with
regard to any action brought by the Corporation as
receiver for a covered financial company shall be--
(i) in the case of any contract claim, the
longer of--
(I) the 6-year period beginning on
the date on which the claim accrues; or
(II) the period applicable under
State law; and
(ii) in the case of any tort claim, the longer
of--
(I) the 3-year period beginning on
the date on which the claim accrues; or
(II) the period applicable under
State law.
(B) Date on which a claim accrues.--For purposes of
subparagraph (A), the date on which the statute of
limitations begins to run on any claim described in
subparagraph (A) shall be the later of--
(i) the date of the appointment of the
Corporation as receiver under this title; or
(ii) the date on which the cause of action
accrues.
(C) Revival of expired state causes of action.--
(i) In general.--In the case of any tort claim
described in clause (ii) for which the applicable
statute of limitations under State law has expired
not more than 5 years before the date of
appointment of the Corporation as receiver for a
covered financial company, the Corporation may
bring an action as receiver on such claim without
regard to the expiration of the statute of
limitations.
(ii) Claims described.--A tort claim referred
to in clause (i) is a claim arising from fraud,
intentional misconduct resulting in unjust
enrichment, or intentional misconduct resulting in
substantial loss to the covered financial company.
(11) Avoidable transfers.--
(A) Fraudulent transfers.--The Corporation, as
receiver for any covered financial company, may avoid a
transfer of any interest of the covered financial
company in property, or any obligation incurred by the
covered financial company, that was made or incurred at
or within 2 years before the date on which the
Corporation was appointed receiver, if--
(i) the covered financial company voluntarily
or involuntarily--
(I) made such transfer or incurred
such obligation with actual intent to
hinder, delay, or defraud

[[Page 1471]]

any entity to which the covered
financial company was or became, on or
after the date on which such transfer
was made or such obligation was
incurred, indebted; or
(II) received less than a reasonably
equivalent value in exchange for such
transferor obligation; and
(ii) the covered financial company voluntarily
or involuntarily--
(I) was insolvent on the date that
such transfer was made or such
obligation was incurred, or became
insolvent as a result of such transfer
or obligation;
(II) was engaged in business or a
transaction, or was about to engage in
business or a transaction, for which any
property remaining with the covered
financial company was an unreasonably
small capital;
(III) intended to incur, or believed
that the covered financial company would
incur, debts that would be beyond the
ability of the covered financial company
to pay as such debts matured; or
(IV) made such transfer to or for
the benefit of an insider, or incurred
such obligation to or for the benefit of
an insider, under an employment contract
and not in the ordinary course of
business.
(B) Preferential transfers.--The Corporation as
receiver for any covered financial company may avoid a
transfer of an interest of the covered financial company
in property--
(i) to or for the benefit of a creditor;
(ii) for or on account of an antecedent debt
that was owed by the covered financial company
before the transfer was made;
(iii) that was made while the covered
financial company was insolvent;
(iv) that was made--
(I) 90 days or less before the date
on which the Corporation was appointed
receiver; or
(II) more than 90 days, but less
than 1 year before the date on which the
Corporation was appointed receiver, if
such creditor at the time of the
transfer was an insider; and
(v) that enables the creditor to receive more
than the creditor would receive if--
(I) the covered financial company
had been liquidated under chapter 7 of
the Bankruptcy Code;
(II) the transfer had not been made;
and
(III) the creditor received payment
of such debt to the extent provided by
the provisions of chapter 7 of the
Bankruptcy Code.
(C) Post-receivership transactions.--The Corporation
as receiver for any covered financial company may avoid
a transfer of property of the receivership that occurred
after the Corporation was appointed receiver that

[[Page 1472]]

was not authorized under this title by the Corporation
as receiver.
(D) Right of recovery.--To the extent that a
transfer is avoided under subparagraph (A), (B), or (C),
the Corporation may recover, for the benefit of the
covered financial company, the property transferred or,
if a court so orders, the value of such property (at the
time of such transfer) from--
(i) the initial transferee of such transfer or
the person for whose benefit such transfer was
made; or
(ii) any immediate or mediate transferee of
any such initial transferee.
(E) Rights of transferee or obligee.--The
Corporation may not recover under subparagraph (D)(ii)
from--
(i) any transferee that takes for value,
including in satisfaction of or to secure a
present or antecedent debt, in good faith, and
without knowledge of the voidability of the
transfer avoided; or
(ii) any immediate or mediate good faith
transferee of such transferee.
(F) Defenses.--Subject to the other provisions of
this title--
(i) a transferee or obligee from which the
Corporation seeks to recover a transfer or to
avoid an obligation under subparagraph (A), (B),
(C), or (D) shall have the same defenses available
to a transferee or obligee from which a trustee
seeks to recover a transfer or avoid an obligation
under sections 547, 548, and 549 of the Bankruptcy
Code; and
(ii) the authority of the Corporation to
recover a transfer or avoid an obligation shall be
subject to subsections (b) and (c) of section 546,
section 547(c), and section 548(c) of the
Bankruptcy Code.
(G) Rights under this section.--The rights of the
Corporation as receiver under this section shall be
superior to any rights of a trustee or any other party
(other than a Federal agency) under the Bankruptcy Code.
(H) Rules of construction; definitions.--For
purposes of--
(i) subparagraphs (A) and (B)--
(I) the term ``insider'' has the
same meaning as in section 101(31) of
the Bankruptcy Code;
(II) a transfer is made when such
transfer is so perfected that a bona
fide purchaser from the covered
financial company against whom
applicable law permits such transfer to
be perfected cannot acquire an interest
in the property transferred that is
superior to the interest in such
property of the transferee, but if such
transfer is not so perfected before the
date on which the Corporation is
appointed as receiver for the covered
financial company, such transfer is made
immediately before the date of such
appointment; and
(III) the term ``value'' means
property, or satisfaction or securing of
a present or antecedent debt of the
covered financial company, but does not

[[Page 1473]]

include an unperformed promise to
furnish support to the covered financial
company; and
(ii) subparagraph (B)--
(I) the covered financial company is
presumed to have been insolvent on and
during the 90-day period immediately
preceding the date of appointment of the
Corporation as receiver; and
(II) the term ``insolvent'' has the
same meaning as in section 101(32) of
the Bankruptcy Code.
(12) Setoff.--
(A) Generally.--Except as otherwise provided in this
title, any right of a creditor to offset a mutual debt
owed by the creditor to any covered financial company
that arose before the Corporation was appointed as
receiver for the covered financial company against a
claim of such creditor may be asserted if enforceable
under applicable noninsolvency law, except to the extent
that--
(i) the claim of the creditor against the
covered financial company is disallowed;
(ii) the claim was transferred, by an entity
other than the covered financial company, to the
creditor--
(I) after the Corporation was
appointed as receiver of the covered
financial company; or
(II)(aa) after the 90-day period
preceding the date on which the
Corporation was appointed as receiver
for the covered financial company; and
(bb) while the covered financial
company was insolvent (except for a
setoff in connection with a qualified
financial contract); or
(iii) the debt owed to the covered financial
company was incurred by the covered financial
company--
(I) after the 90-day period
preceding the date on which the
Corporation was appointed as receiver
for the covered financial company;
(II) while the covered financial
company was insolvent; and
(III) for the purpose of obtaining a
right of setoff against the covered
financial company (except for a setoff
in connection with a qualified financial
contract).
(B) Insufficiency.--
(i) In general.--Except <> with respect to a setoff in connection
with a qualified financial contract, if a creditor
offsets a mutual debt owed to the covered
financial company against a claim of the covered
financial company on or within the 90-day period
preceding the date on which the Corporation is
appointed as receiver for the covered financial
company, the Corporation may recover from the
creditor the amount so offset, to the extent that
any insufficiency on the date of such setoff is
less than the insufficiency on the later of--
(I) the date that is 90 days before
the date on which the Corporation is
appointed as receiver for the covered
financial company; or
(II) the first day on which there is
an insufficiency during the 90-day
period preceding the date

[[Page 1474]]

on which the Corporation is appointed as
receiver for the covered financial
company.
(ii) Definition of insufficiency.--In this
subparagraph, the term ``insufficiency'' means the
amount, if any, by which a claim against the
covered financial company exceeds a mutual debt
owed to the covered financial company by the
holder of such claim.
(C) Insolvency.--The <> term
``insolvent'' has the same meaning as in section 101(32)
of the Bankruptcy Code.
(D) Presumption <> of
insolvency.--For purposes of this paragraph, the covered
financial company is presumed to have been insolvent on
and during the 90-day period preceding the date of
appointment of the Corporation as receiver.
(E) Limitation.--Nothing in this paragraph (12)
shall be the basis for any right of setoff where no such
right exists under applicable noninsolvency law.
(F) Priority claim.--Except as otherwise provided in
this title, the Corporation as receiver for the covered
financial company may sell or transfer any assets free
and clear of the setoff rights of any party, except that
such party shall be entitled to a claim, subordinate to
the claims payable under subparagraphs (A), (B), (C),
and (D) of subsection (b)(1), but senior to all other
unsecured liabilities defined in subsection (b)(1)(E),
in an amount equal to the value of such setoff rights.
(13) Attachment of assets and other injunctive relief.--
Subject to paragraph (14), any court of competent jurisdiction
may, at the request of the Corporation as receiver for a covered
financial company, issue an order in accordance with Rule 65 of
the Federal Rules of Civil Procedure, including an order placing
the assets of any person designated by the Corporation under the
control of the court and appointing a trustee to hold such
assets.
(14) Standards.--
(A) Showing.--Rule <> 65 of
the Federal Rules of Civil Procedure shall apply with
respect to any proceeding under paragraph (13), without
regard to the requirement that the applicant show that
the injury, loss, or damage is irreparable and
immediate.
(B) State proceeding.--If, in the case of any
proceeding in a State court, the court determines that
rules of civil procedure available under the laws of the
State provide substantially similar protections of the
right of the parties to due process as provided under
Rule 65 (as modified with respect to such proceeding by
subparagraph (A)), the relief sought by the Corporation
pursuant to paragraph (14) may be requested under the
laws of such State.
(15) Treatment of claims arising from breach of contracts
executed by the corporation as receiver.--Notwithstanding any
other provision of this title, any final and non-appealable
judgment for monetary damages entered against the Corporation as
receiver for a covered financial company for the breach of an
agreement executed or approved by the Corporation after the date
of its appointment shall be paid as an administrative expense of
the receiver. Nothing in this paragraph shall be construed to
limit the power of a receiver

[[Page 1475]]

to exercise any rights under contract or law, including to
terminate, breach, cancel, or otherwise discontinue such
agreement.
(16) Accounting and recordkeeping requirements.--
(A) In general.--The Corporation as receiver for a
covered financial company shall, consistent with the
accounting and reporting practices and procedures
established by the Corporation, maintain a full
accounting of each receivership or other disposition of
any covered financial company.
(B) Annual accounting or report.--With respect to
each receivership to which the Corporation is appointed,
the Corporation shall make an annual accounting or
report, as appropriate, available to the Secretary and
the Comptroller General of the United States.
(C) Availability of reports.--Any <> report prepared pursuant to subparagraph
(B) and section 203(c)(3) shall be made available to the
public by the Corporation.
(D) Recordkeeping requirement.--
(i) In general.--
The <> Corporation shall
prescribe such regulations and establish such
retention schedules as are necessary to maintain
the documents and records of the Corporation
generated in exercising the authorities of this
title and the records of a covered financial
company for which the Corporation is appointed
receiver, with due regard for--
(I) the avoidance of duplicative
record retention; and
(II) the expected evidentiary needs
of the Corporation as receiver for a
covered financial company and the public
regarding the records of covered
financial companies.
(ii) Retention of records.--Unless otherwise
required by applicable Federal law or court order,
the Corporation may not, at any time, destroy any
records that are subject to clause (i).
(iii) Records defined.--As used in this
subparagraph, the terms ``records'' and ``records
of a covered financial company'' mean any
document, book, paper, map, photograph,
microfiche, microfilm, computer or electronically-
created record generated or maintained by the
covered financial company in the course of and
necessary to its transaction of business.

(b) Priority of Expenses and Unsecured Claims.--
(1) In general.--Unsecured claims against a covered
financial company, or the Corporation as receiver for such
covered financial company under this section, that are proven to
the satisfaction of the receiver shall have priority in the
following order:
(A) Administrative expenses of the receiver.
(B) Any amounts owed to the United States, unless
the United States agrees or consents otherwise.
(C) <> Wages, salaries, or
commissions, including vacation, severance, and sick
leave pay earned by an individual (other than an
individual described in subparagraph (G)), but only to
the extent of 11,725 for each individual (as indexed for
inflation, by regulation of the Corporation)

[[Page 1476]]

earned not later than 180 days before the date of
appointment of the Corporation as receiver.
(D) <> Contributions owed to
employee benefit plans arising from services rendered
not later than 180 days before the date of appointment
of the Corporation as receiver, to the extent of the
number of employees covered by each such plan,
multiplied by 11,725 (as indexed for inflation, by
regulation of the Corporation), less the aggregate
amount paid to such employees under subparagraph (C),
plus the aggregate amount paid by the receivership on
behalf of such employees to any other employee benefit
plan.
(E) Any other general or senior liability of the
covered financial company (which is not a liability
described under subparagraph (F), (G), or (H)).
(F) Any obligation subordinated to general creditors
(which is not an obligation described under subparagraph
(G) or (H)).
(G) Any wages, salaries, or commissions, including
vacation, severance, and sick leave pay earned, owed to
senior executives and directors of the covered financial
company.
(H) Any obligation to shareholders, members, general
partners, limited partners, or other persons, with
interests in the equity of the covered financial company
arising as a result of their status as shareholders,
members, general partners, limited partners, or other
persons with interests in the equity of the covered
financial company.
(2) Post-receivership financing priority.--In the event that
the Corporation, as receiver for a covered financial company, is
unable to obtain unsecured credit for the covered financial
company from commercial sources, the Corporation as receiver may
obtain credit or incur debt on the part of the covered financial
company, which shall have priority over any or all
administrative expenses of the receiver under paragraph (1)(A).
(3) Claims of the united states.--Unsecured claims of the
United States shall, at a minimum, have a higher priority than
liabilities of the covered financial company that count as
regulatory capital.
(4) Creditors similarly situated.--All claimants of a
covered financial company that are similarly situated under
paragraph (1) shall be treated in a similar manner, except that
the Corporation may take any action (including making payments,
subject to subsection (o)(1)(D)(i)) that does not comply with
this subsection, if--
(A) the Corporation determines that such action is
necessary--
(i) to maximize the value of the assets of the
covered financial company;
(ii) to initiate and continue operations
essential to implementation of the receivership or
any bridge financial company;
(iii) to maximize the present value return
from the sale or other disposition of the assets
of the covered financial company; or

[[Page 1477]]

(iv) to minimize the amount of any loss
realized upon the sale or other disposition of the
assets of the covered financial company; and
(B) all claimants that are similarly situated under
paragraph (1) receive not less than the amount provided
in paragraphs (2) and (3) of subsection (d).
(5) Secured claims unaffected.--This section shall not
affect secured claims or security entitlements in respect of
assets or property held by the covered financial company, except
to the extent that the security is insufficient to satisfy the
claim, and then only with regard to the difference between the
claim and the amount realized from the security.
(6) Priority of expenses and unsecured claims in the orderly
liquidation of sipc member.--Where the Corporation is appointed
as receiver for a covered broker or dealer, unsecured claims
against such covered broker or dealer, or the Corporation as
receiver for such covered broker or dealer under this section,
that are proven to the satisfaction of the receiver under
section 205(e), shall have the priority prescribed in paragraph
(1), except that--
(A) SIPC shall be entitled to recover administrative
expenses incurred in performing its responsibilities
under section 205 on an equal basis with the
Corporation, in accordance with paragraph (1)(A);
(B) the Corporation shall be entitled to recover any
amounts paid to customers or to SIPC pursuant to section
205(f), in accordance with paragraph (1)(B);
(C) SIPC shall be entitled to recover any amounts
paid out of the SIPC Fund to meet its obligations under
section 205 and under the Securities Investor Protection
Act of 1970 (15 U.S.C. 78aaa et seq.), which claim shall
be subordinate to the claims payable under subparagraphs
(A) and (B) of paragraph (1), but senior to all other
claims; and
(D) the Corporation may, after paying any proven
claims to customers under section 205 and the Securities
Investor Protection Act of 1970 (15 U.S.C. 78aaa et
seq.), and as provided above, pay dividends on other
proven claims, in its discretion, and to the extent that
funds are available, in accordance with the priorities
set forth in paragraph (1).

(c) Provisions Relating to Contracts Entered Into Before Appointment
of Receiver.--
(1) Authority to repudiate contracts.--In addition to any
other rights that a receiver may have, the Corporation as
receiver for any covered financial company may disaffirm or
repudiate any contract or lease--
(A) to which the covered financial company is a
party;
(B) the performance of which the Corporation as
receiver, in the discretion of the Corporation,
determines to be burdensome; and
(C) the disaffirmance or repudiation of which the
Corporation as receiver determines, in the discretion of
the Corporation, will promote the orderly administration
of the affairs of the covered financial company.
(2) Timing of repudiation.--The Corporation, as receiver for
any covered financial company, shall determine whether

[[Page 1478]]

or not to exercise the rights of repudiation under this section
within a reasonable period of time.
(3) Claims for damages for repudiation.--
(A) In general.--Except as provided in paragraphs
(4), (5), and (6) and in subparagraphs (C), (D), and (E)
of this paragraph, the liability of the Corporation as
receiver for a covered financial company for the
disaffirmance or repudiation of any contract pursuant to
paragraph (1) shall be--
(i) limited to actual direct compensatory
damages; and
(ii) determined as of--
(I) the date of the appointment of
the Corporation as receiver; or
(II) in the case of any contract or
agreement referred to in paragraph (8),
the date of the disaffirmance or
repudiation of such contract or
agreement.
(B) No liability for other damages.--For purposes of
subparagraph (A), the term ``actual direct compensatory
damages'' does not include--
(i) punitive or exemplary damages;
(ii) damages for lost profits or opportunity;
or
(iii) damages for pain and suffering.
(C) Measure of damages for repudiation of qualified
financial contracts.--In the case of any qualified
financial contract or agreement to which paragraph (8)
applies, compensatory damages shall be--
(i) deemed to include normal and reasonable
costs of cover or other reasonable measures of
damages utilized in the industries for such
contract and agreement claims; and
(ii) paid in accordance with this paragraph
and subsection (d), except as otherwise
specifically provided in this subsection.
(D) Measure of damages for repudiation or
disaffirmance of debt obligation.--In the case of any
debt for borrowed money or evidenced by a security,
actual direct compensatory damages shall be no less than
the amount lent plus accrued interest plus any accreted
original issue discount as of the date the Corporation
was appointed receiver of the covered financial company
and, to the extent that an allowed secured claim is
secured by property the value of which is greater than
the amount of such claim and any accrued interest
through the date of repudiation or disaffirmance, such
accrued interest pursuant to paragraph (1).
(E) Measure of damages for repudiation or
disaffirmance of contingent obligation.--In the case of
any contingent obligation of a covered financial company
consisting of any obligation under a guarantee, letter
of credit, loan commitment, or similar credit
obligation, the Corporation may, by rule or regulation,
prescribe that actual direct compensatory damages shall
be no less than the estimated value of the claim as of
the date the Corporation was appointed receiver of the
covered financial company, as such value is measured
based on the likelihood

[[Page 1479]]

that such contingent claim would become fixed and the
probable magnitude thereof.
(4) Leases under which the covered financial company is the
lessee.--
(A) In general.--If the Corporation as receiver
disaffirms or repudiates a lease under which the covered
financial company is the lessee, the receiver shall not
be liable for any damages (other than damages determined
pursuant to subparagraph (B)) for the disaffirmance or
repudiation of such lease.
(B) Payments of rent.--Notwithstanding subparagraph
(A), the lessor under a lease to which subparagraph (A)
would otherwise apply shall--
(i) be entitled to the contractual rent
accruing before the later of the date on which--
(I) the notice of disaffirmance or
repudiation is mailed; or
(II) the disaffirmance or
repudiation becomes effective, unless
the lessor is in default or breach of
the terms of the lease;
(ii) have no claim for damages under any
acceleration clause or other penalty provision in
the lease; and
(iii) have a claim for any unpaid rent,
subject to all appropriate offsets and defenses,
due as of the date of the appointment which shall
be paid in accordance with this paragraph and
subsection (d).
(5) Leases under which the covered financial company is the
lessor.--
(A) In general.--If the Corporation as receiver for
a covered financial company repudiates an unexpired
written lease of real property of the covered financial
company under which the covered financial company is the
lessor and the lessee is not, as of the date of such
repudiation, in default, the lessee under such lease may
either--
(i) treat the lease as terminated by such
repudiation; or
(ii) remain in possession of the leasehold
interest for the balance of the term of the lease,
unless the lessee defaults under the terms of the
lease after the date of such repudiation.
(B) Provisions applicable to lessee remaining in
possession.--If any lessee under a lease described in
subparagraph (A) remains in possession of a leasehold
interest pursuant to clause (ii) of subparagraph (A)--
(i) the lessee--
(I) shall continue to pay the
contractual rent pursuant to the terms
of the lease after the date of the
repudiation of such lease; and
(II) may offset against any rent
payment which accrues after the date of
the repudiation of the lease, any
damages which accrue after such date due
to the nonperformance of any obligation
of the covered financial company under
the lease after such date; and
(ii) the Corporation as receiver shall not be
liable to the lessee for any damages arising after
such date

[[Page 1480]]

as a result of the repudiation, other than the
amount of any offset allowed under clause (i)(II).
(6) Contracts for the sale of real property.--
(A) In general.--If the receiver repudiates any
contract (which meets the requirements of subsection
(a)(6)) for the sale of real property, and the purchaser
of such real property under such contract is in
possession and is not, as of the date of such
repudiation, in default, such purchaser may either--
(i) treat the contract as terminated by such
repudiation; or
(ii) remain in possession of such real
property.
(B) Provisions applicable to purchaser remaining in
possession.--If any purchaser of real property under any
contract described in subparagraph (A) remains in
possession of such property pursuant to clause (ii) of
subparagraph (A)--
(i) the purchaser--
(I) shall continue to make all
payments due under the contract after
the date of the repudiation of the
contract; and
(II) may offset against any such
payments any damages which accrue after
such date due to the nonperformance
(after such date) of any obligation of
the covered financial company under the
contract; and
(ii) the Corporation as receiver shall--
(I) not be liable to the purchaser
for any damages arising after such date
as a result of the repudiation, other
than the amount of any offset allowed
under clause (i)(II);
(II) deliver title to the purchaser
in accordance with the provisions of the
contract; and
(III) have no obligation under the
contract other than the performance
required under subclause (II).
(C) Assignment and sale allowed.--
(i) In general.--No provision of this
paragraph shall be construed as limiting the right
of the Corporation as receiver to assign the
contract described in subparagraph (A) and sell
the property, subject to the contract and the
provisions of this paragraph.
(ii) No liability after assignment and sale.--
If an assignment and sale described in clause (i)
is consummated, the Corporation as receiver shall
have no further liability under the contract
described in subparagraph (A) or with respect to
the real property which was the subject of such
contract.
(7) Provisions applicable to service contracts.--
(A) Services performed before appointment.--In the
case of any contract for services between any person and
any covered financial company for which the Corporation
has been appointed receiver, any claim of such person
for services performed before the date of appointment
shall be--
(i) a claim to be paid in accordance with
subsections (a), (b), and (d); and

[[Page 1481]]

(ii) deemed to have arisen as of the date on
which the receiver was appointed.
(B) Services performed after appointment and prior
to repudiation.--If, in the case of any contract for
services described in subparagraph (A), the Corporation
as receiver accepts performance by the other person
before making any determination to exercise the right of
repudiation of such contract under this section--
(i) the other party shall be paid under the
terms of the contract for the services performed;
and
(ii) the amount of such payment shall be
treated as an administrative expense of the
receivership.
(C) Acceptance of performance no bar to subsequent
repudiation.--The acceptance by the Corporation as
receiver for services referred to in subparagraph (B) in
connection with a contract described in subparagraph (B)
shall not affect the right of the Corporation as
receiver to repudiate such contract under this section
at any time after such performance.
(8) Certain qualified financial contracts.--
(A) Rights of parties to contracts.--Subject to
subsection (a)(8) and paragraphs (9) and (10) of this
subsection, and notwithstanding any other provision of
this section, any other provision of Federal law, or the
law of any State, no person shall be stayed or
prohibited from exercising--
(i) any right that such person has to cause
the termination, liquidation, or acceleration of
any qualified financial contract with a covered
financial company which arises upon the date of
appointment of the Corporation as receiver for
such covered financial company or at any time
after such appointment;
(ii) any right under any security agreement or
arrangement or other credit enhancement related to
one or more qualified financial contracts
described in clause (i); or
(iii) any right to offset or net out any
termination value, payment amount, or other
transfer obligation arising under or in connection
with 1 or more contracts or agreements described
in clause (i), including any master agreement for
such contracts or agreements.
(B) Applicability of other provisions.--Subsection
(a)(8) shall apply in the case of any judicial action or
proceeding brought against the Corporation as receiver
referred to in subparagraph (A), or the subject covered
financial company, by any party to a contract or
agreement described in subparagraph (A)(i) with such
covered financial company.
(C) Certain transfers not avoidable.--
(i) In general.--Notwithstanding subsection
(a)(11), (a)(12), or (c)(12), section 5242 of the
Revised Statutes of the United States, or any
other provision of Federal or State law relating
to the avoidance of preferential or fraudulent
transfers, the Corporation, whether acting as the
Corporation or as receiver for a covered financial
company, may not avoid any transfer of money or
other property in connection with

[[Page 1482]]

any qualified financial contract with a covered
financial company.
(ii) Exception for certain transfers.--Clause
(i) shall not apply to any transfer of money or
other property in connection with any qualified
financial contract with a covered financial
company if the transferee had actual intent to
hinder, delay, or defraud such company, the
creditors of such company, or the Corporation as
receiver appointed for such company.
(D) Certain contracts and agreements defined.--For
purposes of this subsection, the following definitions
shall apply:
(i) Qualified financial contract.--The term
``qualified financial contract'' means any
securities contract, commodity contract, forward
contract, repurchase agreement, swap agreement,
and any similar agreement that the Corporation
determines by regulation, resolution, or order to
be a qualified financial contract for purposes of
this paragraph.
(ii) Securities contract.--The term
``securities contract''--
(I) means a contract for the
purchase, sale, or loan of a security, a
certificate of deposit, a mortgage loan,
any interest in a mortgage loan, a group
or index of securities, certificates of
deposit, or mortgage loans or interests
therein (including any interest therein
or based on the value thereof), or any
option on any of the foregoing,
including any option to purchase or sell
any such security, certificate of
deposit, mortgage loan, interest, group
or index, or option, and including any
repurchase or reverse repurchase
transaction on any such security,
certificate of deposit, mortgage loan,
interest, group or index, or option
(whether or not such repurchase or
reverse repurchase transaction is a
``repurchase agreement'', as defined in
clause (v));
(II) does not include any purchase,
sale, or repurchase obligation under a
participation in a commercial mortgage
loan unless the Corporation determines
by regulation, resolution, or order to
include any such agreement within the
meaning of such term;
(III) means any option entered into
on a national securities exchange
relating to foreign currencies;
(IV) means the guarantee (including
by novation) by or to any securities
clearing agency of any settlement of
cash, securities, certificates of
deposit, mortgage loans or interests
therein, group or index of securities,
certificates of deposit or mortgage
loans or interests therein (including
any interest therein or based on the
value thereof) or an option on any of
the foregoing, including any option to
purchase or sell any such security,
certificate of deposit, mortgage loan,
interest, group or index, or option
(whether or not such

[[Page 1483]]

settlement is in connection with any
agreement or transaction referred to in
subclauses (I) through (XII) (other than
subclause (II)));
(V) means any margin loan;
(VI) means any extension of credit
for the clearance or settlement of
securities transactions;
(VII) means any loan transaction
coupled with a securities collar
transaction, any prepaid securities
forward transaction, or any total return
swap transaction coupled with a
securities sale transaction;
(VIII) means any other agreement or
transaction that is similar to any
agreement or transaction referred to in
this clause;
(IX) means any combination of the
agreements or transactions referred to
in this clause;
(X) means any option to enter into
any agreement or transaction referred to
in this clause;
(XI) means a master agreement that
provides for an agreement or transaction
referred to in any of subclauses (I)
through (X), other than subclause (II),
together with all supplements to any
such master agreement, without regard to
whether the master agreement provides
for an agreement or transaction that is
not a securities contract under this
clause, except that the master agreement
shall be considered to be a securities
contract under this clause only with
respect to each agreement or transaction
under the master agreement that is
referred to in any of subclauses (I)
through (X), other than subclause (II);
and
(XII) means any security agreement
or arrangement or other credit
enhancement related to any agreement or
transaction referred to in this clause,
including any guarantee or reimbursement
obligation in connection with any
agreement or transaction referred to in
this clause.
(iii) Commodity contract.--The term
``commodity contract'' means--
(I) with respect to a futures
commission merchant, a contract for the
purchase or sale of a commodity for
future delivery on, or subject to the
rules of, a contract market or board of
trade;
(II) with respect to a foreign
futures commission merchant, a foreign
future;
(III) with respect to a leverage
transaction merchant, a leverage
transaction;
(IV) with respect to a clearing
organization, a contract for the
purchase or sale of a commodity for
future delivery on, or subject to the
rules of, a contract market or board of
trade that is cleared by such clearing
organization, or commodity option traded
on, or subject to the rules of, a
contract market or board of trade that
is cleared by such clearing
organization;
(V) with respect to a commodity
options dealer, a commodity option;

[[Page 1484]]

(VI) any other agreement or
transaction that is similar to any
agreement or transaction referred to in
this clause;
(VII) any combination of the
agreements or transactions referred to
in this clause;
(VIII) any option to enter into any
agreement or transaction referred to in
this clause;
(IX) a master agreement that
provides for an agreement or transaction
referred to in any of subclauses (I)
through (VIII), together with all
supplements to any such master
agreement, without regard to whether the
master agreement provides for an
agreement or transaction that is not a
commodity contract under this clause,
except that the master agreement shall
be considered to be a commodity contract
under this clause only with respect to
each agreement or transaction under the
master agreement that is referred to in
any of subclauses (I) through (VIII); or
(X) any security agreement or
arrangement or other credit enhancement
related to any agreement or transaction
referred to in this clause, including
any guarantee or reimbursement
obligation in connection with any
agreement or transaction referred to in
this clause.
(iv) Forward contract.--The term ``forward
contract'' means--
(I) a contract (other than a
commodity contract) for the purchase,
sale, or transfer of a commodity or any
similar good, article, service, right,
or interest which is presently or in the
future becomes the subject of dealing in
the forward contract trade, or product
or byproduct thereof, with a maturity
date that is more than 2 days after the
date on which the contract is entered
into, including a repurchase or reverse
repurchase transaction (whether or not
such repurchase or reverse repurchase
transaction is a ``repurchase
agreement'', as defined in clause (v)),
consignment, lease, swap, hedge
transaction, deposit, loan, option,
allocated transaction, unallocated
transaction, or any other similar
agreement;
(II) any combination of agreements
or transactions referred to in
subclauses (I) and (III);
(III) any option to enter into any
agreement or transaction referred to in
subclause (I) or (II);
(IV) a master agreement that
provides for an agreement or transaction
referred to in subclause (I), (II), or
(III), together with all supplements to
any such master agreement, without
regard to whether the master agreement
provides for an agreement or transaction
that is not a forward contract under
this clause, except that the master
agreement shall be considered to be a
forward contract under this clause only
with respect to each agreement or
transaction under the master

[[Page 1485]]

agreement that is referred to in
subclause (I), (II), or (III); or
(V) any security agreement or
arrangement or other credit enhancement
related to any agreement or transaction
referred to in subclause (I), (II),
(III), or (IV), including any guarantee
or reimbursement obligation in
connection with any agreement or
transaction referred to in any such
subclause.
(v) Repurchase agreement.--The term
``repurchase agreement'' (which definition also
applies to a reverse repurchase agreement)--
(I) means an agreement, including
related terms, which provides for the
transfer of one or more certificates of
deposit, mortgage related securities (as
such term is defined in section 3 of the
Securities Exchange Act of 1934),
mortgage loans, interests in mortgage-
related securities or mortgage loans,
eligible bankers' acceptances, qualified
foreign government securities (which,
for purposes of this clause, means a
security that is a direct obligation of,
or that is fully guaranteed by, the
central government of a member of the
Organization for Economic Cooperation
and Development, as determined by
regulation or order adopted by the Board
of Governors), or securities that are
direct obligations of, or that are fully
guaranteed by, the United States or any
agency of the United States against the
transfer of funds by the transferee of
such certificates of deposit, eligible
bankers' acceptances, securities,
mortgage loans, or interests with a
simultaneous agreement by such
transferee to transfer to the transferor
thereof certificates of deposit,
eligible bankers' acceptances,
securities, mortgage loans, or interests
as described above, at a date certain
not later than 1 year after such
transfers or on demand, against the
transfer of funds, or any other similar
agreement;
(II) does not include any repurchase
obligation under a participation in a
commercial mortgage loan, unless the
Corporation determines, by regulation,
resolution, or order to include any such
participation within the meaning of such
term;
(III) means any combination of
agreements or transactions referred to
in subclauses (I) and (IV);
(IV) means any option to enter into
any agreement or transaction referred to
in subclause (I) or (III);
(V) means a master agreement that
provides for an agreement or transaction
referred to in subclause (I), (III), or
(IV), together with all supplements to
any such master agreement, without
regard to whether the master agreement
provides for an agreement or transaction
that is not a repurchase agreement under
this clause, except

[[Page 1486]]

that the master agreement shall be
considered to be a repurchase agreement
under this subclause only with respect
to each agreement or transaction under
the master agreement that is referred to
in subclause (I), (III), or (IV); and
(VI) means any security agreement or
arrangement or other credit enhancement
related to any agreement or transaction
referred to in subclause (I), (III),
(IV), or (V), including any guarantee or
reimbursement obligation in connection
with any agreement or transaction
referred to in any such subclause.
(vi) Swap agreement.--The term ``swap
agreement'' means--
(I) any agreement, including the
terms and conditions incorporated by
reference in any such agreement, which
is an interest rate swap, option,
future, or forward agreement, including
a rate floor, rate cap, rate collar,
cross-currency rate swap, and basis
swap; a spot, same day-tomorrow,
tomorrow-next, forward, or other foreign
exchange, precious metals, or other
commodity agreement; a currency swap,
option, future, or forward agreement; an
equity index or equity swap, option,
future, or forward agreement; a debt
index or debt swap, option, future, or
forward agreement; a total return,
credit spread or credit swap, option,
future, or forward agreement; a
commodity index or commodity swap,
option, future, or forward agreement;
weather swap, option, future, or forward
agreement; an emissions swap, option,
future, or forward agreement; or an
inflation swap, option, future, or
forward agreement;
(II) any agreement or transaction
that is similar to any other agreement
or transaction referred to in this
clause and that is of a type that has
been, is presently, or in the future
becomes, the subject of recurrent
dealings in the swap or other
derivatives markets (including terms and
conditions incorporated by reference in
such agreement) and that is a forward,
swap, future, option, or spot
transaction on one or more rates,
currencies, commodities, equity
securities or other equity instruments,
debt securities or other debt
instruments, quantitative measures
associated with an occurrence, extent of
an occurrence, or contingency associated
with a financial, commercial, or
economic consequence, or economic or
financial indices or measures of
economic or financial risk or value;
(III) any combination of agreements
or transactions referred to in this
clause;
(IV) any option to enter into any
agreement or transaction referred to in
this clause;
(V) a master agreement that provides
for an agreement or transaction referred
to in subclause (I), (II), (III), or
(IV), together with all supplements

[[Page 1487]]

to any such master agreement, without
regard to whether the master agreement
contains an agreement or transaction
that is not a swap agreement under this
clause, except that the master agreement
shall be considered to be a swap
agreement under this clause only with
respect to each agreement or transaction
under the master agreement that is
referred to in subclause (I), (II),
(III), or (IV); and
(VI) any security agreement or
arrangement or other credit enhancement
related to any agreement or transaction
referred to in any of subclauses (I)
through (V), including any guarantee or
reimbursement obligation in connection
with any agreement or transaction
referred to in any such clause.
(vii) Definitions relating to default.--When
used in this paragraph and paragraphs (9) and
(10)--
(I) the term ``default'' means, with
respect to a covered financial company,
any adjudication or other official
decision by any court of competent
jurisdiction, or other public authority
pursuant to which the Corporation has
been appointed receiver; and
(II) the term ``in danger of
default'' means a covered financial
company with respect to which the
Corporation or appropriate State
authority has determined that--
(aa) in the opinion of the
Corporation or such authority--
(AA) the covered
financial company is not
likely to be able to pay its
obligations in the normal
course of business; and
(BB) there is no
reasonable prospect that the
covered financial company
will be able to pay such
obligations without Federal
assistance; or
(bb) in the opinion of the
Corporation or such authority--
(AA) the covered
financial company has
incurred or is likely to
incur losses that will
deplete all or substantially
all of its capital; and
(BB) there is no
reasonable prospect that the
capital will be replenished
without Federal assistance.
(viii) Treatment of master agreement as one
agreement.--Any master agreement for any contract
or agreement described in any of clauses (i)
through (vi) (or any master agreement for such
master agreement or agreements), together with all
supplements to such master agreement, shall be
treated as a single agreement and a single
qualified financial contact. If a master agreement
contains provisions relating to agreements or
transactions that are not themselves qualified
financial contracts, the master agreement

[[Page 1488]]

shall be deemed to be a qualified financial
contract only with respect to those transactions
that are themselves qualified financial contracts.
(ix) Transfer.--The term ``transfer'' means
every mode, direct or indirect, absolute or
conditional, voluntary or involuntary, of
disposing of or parting with property or with an
interest in property, including retention of title
as a security interest and foreclosure of the
equity of redemption of the covered financial
company.
(x) Person.--The term ``person'' includes any
governmental entity in addition to any entity
included in the definition of such term in section
1, title 1, United States Code.
(E) Clarification.--No provision of law shall be
construed as limiting the right or power of the
Corporation, or authorizing any court or agency to limit
or delay, in any manner, the right or power of the
Corporation to transfer any qualified financial contract
or to disaffirm or repudiate any such contract in
accordance with this subsection.
(F) Walkaway clauses not effective.--
(i) In general.--Notwithstanding the
provisions of subparagraph (A) of this paragraph
and sections 403 and 404 of the Federal Deposit
Insurance Corporation Improvement Act of 1991, no
walkaway clause shall be enforceable in a
qualified financial contract of a covered
financial company in default.
(ii) Limited suspension of certain
obligations.--In <> the case
of a qualified financial contract referred to in
clause (i), any payment or delivery obligations
otherwise due from a party pursuant to the
qualified financial contract shall be suspended
from the time at which the Corporation is
appointed as receiver until the earlier of--
(I) the time at which such party
receives notice that such contract has
been transferred pursuant to paragraph
(10)(A); or
(II) 5:00 p.m. (eastern time) on the
business day following the date of the
appointment of the Corporation as
receiver.
(iii) Walkaway clause defined.--For purposes
of this subparagraph, the term ``walkaway clause''
means any provision in a qualified financial
contract that suspends, conditions, or
extinguishes a payment obligation of a party, in
whole or in part, or does not create a payment
obligation of a party that would otherwise exist,
solely because of the status of such party as a
nondefaulting party in connection with the
insolvency of a covered financial company that is
a party to the contract or the appointment of or
the exercise of rights or powers by the
Corporation as receiver for such covered financial
company, and not as a result of the exercise by a
party of any right to offset, setoff, or net
obligations that exist under the contract, any
other contract between those parties, or
applicable law.

[[Page 1489]]

(G) Certain obligations to clearing organizations.--
In the event that the Corporation has been appointed as
receiver for a covered financial company which is a
party to any qualified financial contract cleared by or
subject to the rules of a clearing organization (as
defined in paragraph (9)(D)), the receiver shall use its
best efforts to meet all margin, collateral, and
settlement obligations of the covered financial company
that arise under qualified financial contracts (other
than any margin, collateral, or settlement obligation
that is not enforceable against the receiver under
paragraph (8)(F)(i) or paragraph (10)(B)), as required
by the rules of the clearing organization when due.
Notwithstanding any other provision of this title, if
the receiver fails to satisfy any such margin,
collateral, or settlement obligations under the rules of
the clearing organization, the clearing organization
shall have the immediate right to exercise, and shall
not be stayed from exercising, all of its rights and
remedies under its rules and applicable law with respect
to any qualified financial contract of the covered
financial company, including, without limitation, the
right to liquidate all positions and collateral of such
covered financial company under the company's qualified
financial contracts, and suspend or cease to act for
such covered financial company, all in accordance with
the rules of the clearing organization.
(H) Recordkeeping.--
(i) Joint rulemaking.--The Federal primary
financial regulatory agencies shall jointly
prescribe regulations requiring that financial
companies maintain such records with respect to
qualified financial contracts (including market
valuations) that the Federal primary financial
regulatory agencies determine to be necessary or
appropriate in order to assist the Corporation as
receiver for a covered financial company in being
able to exercise its rights and fulfill its
obligations under this paragraph or paragraph (9)
or (10).
(ii) Time frame.--The Federal primary
financial regulatory agencies shall prescribe
joint final or interim final regulations not later
than 24 months after the date of enactment of this
Act.
(iii) Back-up rulemaking authority.--If the
Federal primary financial regulatory agencies do
not prescribe joint final or interim final
regulations within the time frame in clause (ii),
the Chairperson of the Council shall prescribe, in
consultation with the Corporation, the regulations
required by clause (i).
(iv) Categorization and tiering.--The joint
regulations prescribed under clause (i) shall, as
appropriate, differentiate among financial
companies by taking into consideration their size,
risk, complexity, leverage, frequency and dollar
amount of qualified financial contracts,
interconnectedness to the financial system, and
any other factors deemed appropriate.
(9) Transfer of qualified financial contracts.--
(A) In general.--In making any transfer of assets or
liabilities of a covered financial company in default,

[[Page 1490]]

which includes any qualified financial contract, the
Corporation as receiver for such covered financial
company shall either--
(i) transfer to one financial institution,
other than a financial institution for which a
conservator, receiver, trustee in bankruptcy, or
other legal custodian has been appointed or which
is otherwise the subject of a bankruptcy or
insolvency proceeding--
(I) all qualified financial
contracts between any person or any
affiliate of such person and the covered
financial company in default;
(II) all claims of such person or
any affiliate of such person against
such covered financial company under any
such contract (other than any claim
which, under the terms of any such
contract, is subordinated to the claims
of general unsecured creditors of such
company);
(III) all claims of such covered
financial company against such person or
any affiliate of such person under any
such contract; and
(IV) all property securing or any
other credit enhancement for any
contract described in subclause (I) or
any claim described in subclause (II) or
(III) under any such contract; or
(ii) transfer none of the qualified financial
contracts, claims, property or other credit
enhancement referred to in clause (i) (with
respect to such person and any affiliate of such
person).
(B) Transfer to foreign bank, financial institution,
or branch or agency thereof.--In transferring any
qualified financial contracts and related claims and
property under subparagraph (A)(i), the Corporation as
receiver for the covered financial company shall not
make such transfer to a foreign bank, financial
institution organized under the laws of a foreign
country, or a branch or agency of a foreign bank or
financial institution unless, under the law applicable
to such bank, financial institution, branch or agency,
to the qualified financial contracts, and to any netting
contract, any security agreement or arrangement or other
credit enhancement related to one or more qualified
financial contracts, the contractual rights of the
parties to such qualified financial contracts, netting
contracts, security agreements or arrangements, or other
credit enhancements are enforceable substantially to the
same extent as permitted under this section.
(C) Transfer of contracts subject to the rules of a
clearing organization.--In the event that the
Corporation as receiver for a financial institution
transfers any qualified financial contract and related
claims, property, or credit enhancement pursuant to
subparagraph (A)(i) and such contract is cleared by or
subject to the rules of a clearing organization, the
clearing organization shall not be required to accept
the transferee as a member by virtue of the transfer.
(D) Definitions.--For purposes of this paragraph--

[[Page 1491]]

(i) the term ``financial institution'' means a
broker or dealer, a depository institution, a
futures commission merchant, a bridge financial
company, or any other institution determined by
the Corporation, by regulation, to be a financial
institution; and
(ii) the term ``clearing organization'' has
the same meaning as in section 402 of the Federal
Deposit Insurance Corporation Improvement Act of
1991.
(10) Notification of transfer.--
(A) In general.--
(i) Notice.--The Corporation shall provide
notice in accordance with clause (ii), if--
(I) the Corporation as receiver for
a covered financial company in default
or in danger of default transfers any
assets or liabilities of the covered
financial company; and
(II) the transfer includes any
qualified financial contract.
(ii) Timing.--The Corporation as receiver for
a covered financial company shall notify any
person who is a party to any contract described in
clause (i) of such transfer not later than 5:00
p.m. (eastern time) on the business day following
the date of the appointment of the Corporation as
receiver.
(B) Certain rights not enforceable.--
(i) Receivership.--A <> person who is a party to a qualified
financial contract with a covered financial
company may not exercise any right that such
person has to terminate, liquidate, or net such
contract under paragraph (8)(A) solely by reason
of or incidental to the appointment under this
section of the Corporation as receiver for the
covered financial company (or the insolvency or
financial condition of the covered financial
company for which the Corporation has been
appointed as receiver)--
(I) until 5:00 p.m. (eastern time)
on the business day following the date
of the appointment; or
(II) after the person has received
notice that the contract has been
transferred pursuant to paragraph
(9)(A).
(ii) Notice.--For purposes of this paragraph,
the Corporation as receiver for a covered
financial company shall be deemed to have notified
a person who is a party to a qualified financial
contract with such covered financial company, if
the Corporation has taken steps reasonably
calculated to provide notice to such person by the
time specified in subparagraph (A).
(C) Treatment of bridge financial company.--For
purposes of paragraph (9), a bridge financial company
shall not be considered to be a financial institution
for which a conservator, receiver, trustee in
bankruptcy, or other legal custodian has been appointed,
or which is otherwise the subject of a bankruptcy or
insolvency proceeding.
(D) Business day defined.--For purposes of this
paragraph, the term ``business day'' means any day other
than any Saturday, Sunday, or any day on which either
the

[[Page 1492]]

New York Stock Exchange or the Federal Reserve Bank of
New York is closed.
(11) Disaffirmance or repudiation of qualified financial
contracts.--In exercising the rights of disaffirmance or
repudiation of the Corporation as receiver with respect to any
qualified financial contract to which a covered financial
company is a party, the Corporation shall either--
(A) disaffirm or repudiate all qualified financial
contracts between--
(i) any person or any affiliate of such
person; and
(ii) the covered financial company in default;
or
(B) disaffirm or repudiate none of the qualified
financial contracts referred to in subparagraph (A)
(with respect to such person or any affiliate of such
person).
(12) Certain security and customer interests not
avoidable.--No provision of this subsection shall be construed
as permitting the avoidance of any--
(A) legally enforceable or perfected security
interest in any of the assets of any covered financial
company, except in accordance with subsection (a)(11);
or
(B) legally enforceable interest in customer
property, security entitlements in respect of assets or
property held by the covered financial company for any
security entitlement holder.
(13) Authority to enforce contracts.--
(A) In general.--The Corporation, as receiver for a
covered financial company, may enforce any contract,
other than a liability insurance contract of a director
or officer, a financial institution bond entered into by
the covered financial company, notwithstanding any
provision of the contract providing for termination,
default, acceleration, or exercise of rights upon, or
solely by reason of, insolvency, the appointment of or
the exercise of rights or powers by the Corporation as
receiver, the filing of the petition pursuant to section
202(a)(1), or the issuance of the recommendations or
determination, or any actions or events occurring in
connection therewith or as a result thereof, pursuant to
section 203.
(B) Certain rights not affected.--No provision of
this paragraph may be construed as impairing or
affecting any right of the Corporation as receiver to
enforce or recover under a liability insurance contract
of a director or officer or financial institution bond
under other applicable law.
(C) Consent requirement and ipso facto clauses.--
(i) In general.--Except <> as otherwise provided by this section,
no person may exercise any right or power to
terminate, accelerate, or declare a default under
any contract to which the covered financial
company is a party (and no provision in any such
contract providing for such default, termination,
or acceleration shall be enforceable), or to
obtain possession of or exercise control over any
property of the covered financial company or
affect any contractual rights of the covered
financial company, without the consent of the

[[Page 1493]]

Corporation as receiver for the covered financial
company during the 90 day period beginning from
the appointment of the Corporation as receiver.
(ii) Exceptions.--No provision of this
subparagraph shall apply to a director or officer
liability insurance contract or a financial
institution bond, to the rights of parties to
certain qualified financial contracts pursuant to
paragraph (8), or to the rights of parties to
netting contracts pursuant to subtitle A of title
IV of the Federal Deposit Insurance Corporation
Improvement Act of 1991 (12 U.S.C. 4401 et seq.),
or shall be construed as permitting the
Corporation as receiver to fail to comply with
otherwise enforceable provisions of such contract.
(D) Contracts to extend credit.--Notwithstanding any
other provision in this title, if the Corporation as
receiver enforces any contract to extend credit to the
covered financial company or bridge financial company,
any valid and enforceable obligation to repay such debt
shall be paid by the Corporation as receiver, as an
administrative expense of the receivership.
(14) Exception for federal reserve banks and corporation
security interest.--No provision of this subsection shall apply
with respect to--
(A) any extension of credit from any Federal reserve
bank or the Corporation to any covered financial
company; or
(B) any security interest in the assets of the
covered financial company securing any such extension of
credit.
(15) Savings clause.--The meanings of terms used in this
subsection are applicable for purposes of this subsection only,
and shall not be construed or applied so as to challenge or
affect the characterization, definition, or treatment of any
similar terms under any other statute, regulation, or rule,
including the Gramm-Leach-Bliley Act, the Legal Certainty for
Bank Products Act of 2000, the securities laws (as that term is
defined in section 3(a)(47) of the Securities Exchange Act of
1934), and the Commodity Exchange Act.
(16) Enforcement of contracts guaranteed by the covered
financial company.--
(A) In general.--The Corporation, as receiver for a
covered financial company or as receiver for a
subsidiary of a covered financial company (including an
insured depository institution) shall have the power to
enforce contracts of subsidiaries or affiliates of the
covered financial company, the obligations under which
are guaranteed or otherwise supported by or linked to
the covered financial company, notwithstanding any
contractual right to cause the termination, liquidation,
or acceleration of such contracts based solely on the
insolvency, financial condition, or receivership of the
covered financial company, if--
(i) such guaranty or other support and all
related assets and liabilities are transferred to
and assumed by a bridge financial company or a
third party (other than a third party for which a
conservator, receiver, trustee in bankruptcy, or
other legal custodian has been appointed, or which
is otherwise the subject of

[[Page 1494]]

a bankruptcy or insolvency proceeding) within the
same period of time as the Corporation is entitled
to transfer the qualified financial contracts of
such covered financial company; or
(ii) the Corporation, as receiver, otherwise
provides adequate protection with respect to such
obligations.
(B) Rule of construction.--For purposes of this
paragraph, a bridge financial company shall not be
considered to be a third party for which a conservator,
receiver, trustee in bankruptcy, or other legal
custodian has been appointed, or which is otherwise the
subject of a bankruptcy or insolvency proceeding.

(d) Valuation of Claims in Default.--
(1) In general.--Notwithstanding any other provision of
Federal law or the law of any State, and regardless of the
method utilized by the Corporation for a covered financial
company, including transactions authorized under subsection (h),
this subsection shall govern the rights of the creditors of any
such covered financial company.
(2) Maximum liability.--The maximum liability of the
Corporation, acting as receiver for a covered financial company
or in any other capacity, to any person having a claim against
the Corporation as receiver or the covered financial company for
which the Corporation is appointed shall equal the amount that
such claimant would have received if--
(A) the Corporation had not been appointed receiver
with respect to the covered financial company; and
(B) the covered financial company had been
liquidated under chapter 7 of the Bankruptcy Code, or
any similar provision of State insolvency law applicable
to the covered financial company.
(3) Special provision for orderly liquidation by sipc.--The
maximum liability of the Corporation, acting as receiver or in
its corporate capacity for any covered broker or dealer to any
customer of such covered broker or dealer, with respect to
customer property of such customer, shall be--
(A) equal to the amount that such customer would
have received with respect to such customer property in
a case initiated by SIPC under the Securities Investor
Protection Act of 1970 (15 U.S.C. 78aaa et seq.); and
(B) determined <> as of the
close of business on the date on which the Corporation
is appointed as receiver.
(4) Additional payments authorized.--
(A) In general.--Subject to subsection (o)(1)(D)(i),
the Corporation, with the approval of the Secretary, may
make additional payments or credit additional amounts to
or with respect to or for the account of any claimant or
category of claimants of the covered financial company,
if the Corporation determines that such payments or
credits are necessary or appropriate to minimize losses
to the Corporation as receiver from the orderly
liquidation of the covered financial company under this
section.
(B) Limitations.--
(i) Prohibition.--The Corporation shall not
make any payments or credit amounts to any
claimant or category of claimants that would
result in any claimant receiving more than the
face value amount of any

[[Page 1495]]

claim that is proven to the satisfaction of the
Corporation.
(ii) No obligation.--Notwithstanding any other
provision of Federal or State law, or the
Constitution of any State, the Corporation shall
not be obligated, as a result of having made any
payment under subparagraph (A) or credited any
amount described in subparagraph (A) to or with
respect to, or for the account, of any claimant or
category of claimants, to make payments to any
other claimant or category of claimants.
(C) Manner of payment.--The Corporation may make
payments or credit amounts under subparagraph (A)
directly to the claimants or may make such payments or
credit such amounts to a company other than a covered
financial company or a bridge financial company
established with respect thereto in order to induce such
other company to accept liability for such claims.

(e) Limitation on Court Action.--Except as provided in this title,
no court may take any action to restrain or affect the exercise of
powers or functions of the receiver hereunder, and any remedy against
the Corporation or receiver shall be limited to money damages determined
in accordance with this title.
(f) Liability of Directors and Officers.--
(1) In general.--A director or officer of a covered
financial company may be held personally liable for monetary
damages in any civil action described in paragraph (2) by, on
behalf of, or at the request or direction of the Corporation,
which action is prosecuted wholly or partially for the benefit
of the Corporation--
(A) acting as receiver for such covered financial
company;
(B) acting based upon a suit, claim, or cause of
action purchased from, assigned by, or otherwise
conveyed by the Corporation as receiver; or
(C) acting based upon a suit, claim, or cause of
action purchased from, assigned by, or otherwise
conveyed in whole or in part by a covered financial
company or its affiliate in connection with assistance
provided under this title.
(2) Actions covered.--Paragraph (1) shall apply with respect
to actions for gross negligence, including any similar conduct
or conduct that demonstrates a greater disregard of a duty of
care (than gross negligence) including intentional tortious
conduct, as such terms are defined and determined under
applicable State law.
(3) Savings clause.--Nothing in this subsection shall impair
or affect any right of the Corporation under other applicable
law.

(g) Damages.--In any proceeding related to any claim against a
director, officer, employee, agent, attorney, accountant, or appraiser
of a covered financial company, or any other party employed by or
providing services to a covered financial company, recoverable damages
determined to result from the improvident or otherwise improper use or
investment of any assets of the covered financial company shall include
principal losses and appropriate interest.

[[Page 1496]]

(h) Bridge Financial Companies.--
(1) Organization.--
(A) Purpose.--The Corporation, as receiver for one
or more covered financial companies or in anticipation
of being appointed receiver for one or more covered
financial companies, may organize one or more bridge
financial companies in accordance with this subsection.
(B) Authorities.--Upon the creation of a bridge
financial company under subparagraph (A) with respect to
a covered financial company, such bridge financial
company may--
(i) assume such liabilities (including
liabilities associated with any trust or custody
business, but excluding any liabilities that count
as regulatory capital) of such covered financial
company as the Corporation may, in its discretion,
determine to be appropriate;
(ii) purchase such assets (including assets
associated with any trust or custody business) of
such covered financial company as the Corporation
may, in its discretion, determine to be
appropriate; and
(iii) perform any other temporary function
which the Corporation may, in its discretion,
prescribe in accordance with this section.
(2) Charter and establishment.--
(A) Establishment.--Except as provided in
subparagraph (H), where the covered financial company is
a covered broker or dealer, the Corporation, as receiver
for a covered financial company, may grant a Federal
charter to and approve articles of association for one
or more bridge financial company or companies, with
respect to such covered financial company which shall,
by operation of law and immediately upon issuance of its
charter and approval of its articles of association, be
established and operate in accordance with, and subject
to, such charter, articles, and this section.
(B) Management.--Upon its establishment, a bridge
financial company shall be under the management of a
board of directors appointed by the Corporation.
(C) Articles of association.--The articles of
association and organization certificate of a bridge
financial company shall have such terms as the
Corporation may provide, and shall be executed by such
representatives as the Corporation may designate.
(D) Terms of charter; rights and privileges.--
Subject to and in accordance with the provisions of this
subsection, the Corporation shall--
(i) establish the terms of the charter of a
bridge financial company and the rights, powers,
authorities, and privileges of a bridge financial
company granted by the charter or as an incident
thereto; and
(ii) provide for, and establish the terms and
conditions governing, the management (including
the bylaws and the number of directors of the
board of directors) and operations of the bridge
financial company.
(E) Transfer of rights and privileges of covered
financial company.--

[[Page 1497]]

(i) In general.--Notwithstanding any other
provision of Federal or State law, the Corporation
may provide for a bridge financial company to
succeed to and assume any rights, powers,
authorities, or privileges of the covered
financial company with respect to which the bridge
financial company was established and, upon such
determination by the Corporation, the bridge
financial company shall immediately and by
operation of law succeed to and assume such
rights, powers, authorities, and privileges.
(ii) Effective without approval.--Any
succession to or assumption by a bridge financial
company of rights, powers, authorities, or
privileges of a covered financial company under
clause (i) or otherwise shall be effective without
any further approval under Federal or State law,
assignment, or consent with respect thereto.
(F) Corporate governance and election and
designation of body of law.--To the extent permitted by
the Corporation and consistent with this section and any
rules, regulations, or directives issued by the
Corporation under this section, a bridge financial
company may elect to follow the corporate governance
practices and procedures that are applicable to a
corporation incorporated under the general corporation
law of the State of Delaware, or the State of
incorporation or organization of the covered financial
company with respect to which the bridge financial
company was established, as such law may be amended from
time to time.
(G) Capital.--
(i) Capital not required.--Notwithstanding any
other provision of Federal or State law, a bridge
financial company may, if permitted by the
Corporation, operate without any capital or
surplus, or with such capital or surplus as the
Corporation may in its discretion determine to be
appropriate.
(ii) No contribution by the corporation
required.--The Corporation is not required to pay
capital into a bridge financial company or to
issue any capital stock on behalf of a bridge
financial company established under this
subsection.
(iii) Authority.--If the Corporation
determines that such action is advisable, the
Corporation may cause capital stock or other
securities of a bridge financial company
established with respect to a covered financial
company to be issued and offered for sale in such
amounts and on such terms and conditions as the
Corporation may, in its discretion, determine.
(iv) Operating funds in lieu of capital and
implementation plan.--Upon the organization of a
bridge financial company, and thereafter as the
Corporation may, in its discretion, determine to
be necessary or advisable, the Corporation may
make available to the bridge financial company,
subject to the plan described in subsection
(n)(9), funds for the operation of the bridge
financial company in lieu of capital.
(H) Bridge brokers or dealers.--

[[Page 1498]]

(i) In general.--The Corporation, as receiver
for a covered broker or dealer, may approve
articles of association for one or more bridge
financial companies with respect to such covered
broker or dealer, which bridge financial company
or companies shall, by operation of law and
immediately upon approval of its articles of
association--
(I) be established and deemed
registered with the Commission under the
Securities Exchange Act of 1934 and a
member of SIPC;
(II) operate in accordance with such
articles and this section; and
(III) succeed to any and all
registrations and memberships of the
covered financial company with or in any
self-regulatory organizations.
(ii) Other requirements.--Except as provided
in clause (i), and notwithstanding any other
provision of this section, the bridge financial
company shall be subject to the Federal securities
laws and all requirements with respect to being a
member of a self-regulatory organization, unless
exempted from any such requirements by the
Commission, as is necessary or appropriate in the
public interest or for the protection of
investors.
(iii) Treatment of customers.--Except as
otherwise provided by this title, any customer of
the covered broker or dealer whose account is
transferred to a bridge financial company shall
have all the rights, privileges, and protections
under section 205(f) and under the Securities
Investor Protection Act of 1970 (15 U.S.C. 78aaa
et seq.), that such customer would have had if the
account were not transferred from the covered
financial company under this subparagraph.
(iv) Operation of bridge brokers or dealers.--
Notwithstanding any other provision of this title,
the Corporation shall not operate any bridge
financial company created by the Corporation under
this title with respect to a covered broker or
dealer in such a manner as to adversely affect the
ability of customers to promptly access their
customer property in accordance with applicable
law.
(3) Interests in and assets and obligations of covered
financial company.--Notwithstanding paragraph (1) or (2) or any
other provision of law--
(A) a bridge financial company shall assume,
acquire, or succeed to the assets or liabilities of a
covered financial company (including the assets or
liabilities associated with any trust or custody
business) only to the extent that such assets or
liabilities are transferred by the Corporation to the
bridge financial company in accordance with, and subject
to the restrictions set forth in, paragraph (1)(B); and
(B) a bridge financial company shall not assume,
acquire, or succeed to any obligation that a covered
financial company for which the Corporation has been
appointed receiver may have to any shareholder, member,
general

[[Page 1499]]

partner, limited partner, or other person with an
interest in the equity of the covered financial company
that arises as a result of the status of that person
having an equity claim in the covered financial company.
(4) Bridge financial company treated as being in default for
certain purposes.--A bridge financial company shall be treated
as a covered financial company in default at such times and for
such purposes as the Corporation may, in its discretion,
determine.
(5) Transfer of assets and liabilities.--
(A) Authority of corporation.--The Corporation, as
receiver for a covered financial company, may transfer
any assets and liabilities of a covered financial
company (including any assets or liabilities associated
with any trust or custody business) to one or more
bridge financial companies, in accordance with and
subject to the restrictions of paragraph (1).
(B) Subsequent transfers.--At any time after the
establishment of a bridge financial company with respect
to a covered financial company, the Corporation, as
receiver, may transfer any assets and liabilities of
such covered financial company as the Corporation may,
in its discretion, determine to be appropriate in
accordance with and subject to the restrictions of
paragraph (1).
(C) Treatment of trust or custody business.--For
purposes of this paragraph, the trust or custody
business, including fiduciary appointments, held by any
covered financial company is included among its assets
and liabilities.
(D) Effective without approval.--The transfer of any
assets or liabilities, including those associated with
any trust or custody business of a covered financial
company, to a bridge financial company shall be
effective without any further approval under Federal or
State law, assignment, or consent with respect thereto.
(E) Equitable treatment of similarly situated
creditors.--The Corporation shall treat all creditors of
a covered financial company that are similarly situated
under subsection (b)(1), in a similar manner in
exercising the authority of the Corporation under this
subsection to transfer any assets or liabilities of the
covered financial company to one or more bridge
financial companies established with respect to such
covered financial company, except that the Corporation
may take any action (including making payments, subject
to subsection (o)(1)(D)(i)) that does not comply with
this subparagraph, if--
(i) the Corporation determines that such
action is necessary--
(I) to maximize the value of the
assets of the covered financial company;
(II) to maximize the present value
return from the sale or other
disposition of the assets of the covered
financial company; or
(III) to minimize the amount of any
loss realized upon the sale or other
disposition of the assets of the covered
financial company; and

[[Page 1500]]

(ii) all creditors that are similarly situated
under subsection (b)(1) receive not less than the
amount provided under paragraphs (2) and (3) of
subsection (d).
(F) Limitation on transfer of liabilities.--
Notwithstanding any other provision of law, the
aggregate amount of liabilities of a covered financial
company that are transferred to, or assumed by, a bridge
financial company from a covered financial company may
not exceed the aggregate amount of the assets of the
covered financial company that are transferred to, or
purchased by, the bridge financial company from the
covered financial company.
(6) Stay of judicial action.--Any judicial action to which a
bridge financial company becomes a party by virtue of its
acquisition of any assets or assumption of any liabilities of a
covered financial company shall be stayed from further
proceedings for a period of not longer than 45 days (or such
longer period as may be agreed to upon the consent of all
parties) at the request of the bridge financial company.
(7) Agreements against interest of the bridge financial
company.--No agreement that tends to diminish or defeat the
interest of the bridge financial company in any asset of a
covered financial company acquired by the bridge financial
company shall be valid against the bridge financial company,
unless such agreement--
(A) is in writing;
(B) was executed by an authorized officer or
representative of the covered financial company or
confirmed in the ordinary course of business by the
covered financial company; and
(C) has been on the official record of the company,
since the time of its execution, or with which, the
party claiming under the agreement provides
documentation of such agreement and its authorized
execution or confirmation by the covered financial
company that is acceptable to the receiver.
(8) No federal status.--
(A) Agency status.--A bridge financial company is
not an agency, establishment, or instrumentality of the
United States.
(B) Employee status.--Representatives for purposes
of paragraph (1)(B), directors, officers, employees, or
agents of a bridge financial company are not, solely by
virtue of service in any such capacity, officers or
employees of the United States. Any employee of the
Corporation or of any Federal instrumentality who serves
at the request of the Corporation as a representative
for purposes of paragraph (1)(B), director, officer,
employee, or agent of a bridge financial company shall
not--
(i) solely by virtue of service in any such
capacity lose any existing status as an officer or
employee of the United States for purposes of
title 5, United States Code, or any other
provision of law; or
(ii) receive any salary or benefits for
service in any such capacity with respect to a
bridge financial company in addition to such
salary or benefits as are obtained through
employment with the Corporation or such Federal
instrumentality.

[[Page 1501]]

(9) Funding authorized.--The Corporation may, subject to the
plan described in subsection (n)(9), provide funding to
facilitate any transaction described in subparagraph (A), (B),
(C), or (D) of paragraph (13) with respect to any bridge
financial company, or facilitate the acquisition by a bridge
financial company of any assets, or the assumption of any
liabilities, of a covered financial company for which the
Corporation has been appointed receiver.
(10) Exempt tax status.--Notwithstanding any other provision
of Federal or State law, a bridge financial company, its
franchise, property, and income shall be exempt from all
taxation now or hereafter imposed by the United States, by any
territory, dependency, or possession thereof, or by any State,
county, municipality, or local taxing authority.
(11) Federal agency approval; antitrust review.--If a
transaction involving the merger or sale of a bridge financial
company requires approval by a Federal agency, the transaction
may not be consummated before the 5th calendar day after the
date of approval by the Federal agency responsible for such
approval with respect thereto.
If, <> in connection
with any such approval a report on competitive factors from the
Attorney General is required, the Federal agency responsible for
such approval shall promptly notify the Attorney General of the
proposed transaction and the Attorney General shall provide the
required report within 10 days of the request.
If <>  a notification is required under
section 7A of the Clayton Act with respect to such transaction,
the required waiting period shall end on the 15th day after the
date on which the Attorney General and the Federal Trade
Commission receive such notification, unless the waiting period
is terminated earlier under section 7A(b)(2) of the Clayton Act,
or extended under section 7A(e)(2) of that Act.
(12) Duration of bridge <> financial company.--Subject to paragraphs (13) and (14),
the status of a bridge financial company as such shall terminate
at the end of the 2-year period following the date on which it
was granted a charter. The Corporation may, in its discretion,
extend the status of the bridge financial company as such for no
more than 3 additional 1-year periods.
(13) Termination of bridge financial company status.--The
status of any bridge financial company as such shall terminate
upon the earliest of--
(A) the date of the merger or consolidation of the
bridge financial company with a company that is not a
bridge financial company;
(B) at the election of the Corporation, the sale of
a majority of the capital stock of the bridge financial
company to a company other than the Corporation and
other than another bridge financial company;
(C) the sale of 80 percent, or more, of the capital
stock of the bridge financial company to a person other
than the Corporation and other than another bridge
financial company;
(D) at the election of the Corporation, either the
assumption of all or substantially all of the
liabilities of the bridge financial company by a company
that is not a bridge financial company, or the
acquisition of all or

[[Page 1502]]

substantially all of the assets of the bridge financial
company by a company that is not a bridge financial
company, or other entity as permitted under applicable
law; and
(E) the expiration of the period provided in
paragraph (12), or the earlier dissolution of the bridge
financial company, as provided in paragraph (15).
(14) Effect of termination events.--
(A) Merger or consolidation.--A
merger <> or consolidation, described
in paragraph (13)(A) shall be conducted in accordance
with, and shall have the effect provided in, the
provisions of applicable law. For the purpose of
effecting such a merger or consolidation, the bridge
financial company shall be treated as a corporation
organized under the laws of the State of Delaware
(unless the law of another State has been selected by
the bridge financial company in accordance with
paragraph (2)(F)), and the Corporation shall be treated
as the sole shareholder thereof, notwithstanding any
other provision of State or Federal law.
(B) Charter conversion.--Following the sale of a
majority of the capital stock of the bridge financial
company, as provided in paragraph (13)(B), the
Corporation may amend the charter of the bridge
financial company to reflect the termination of the
status of the bridge financial company as such,
whereupon the company shall have all of the rights,
powers, and privileges under its constituent documents
and applicable Federal or State law. In connection
therewith, the Corporation may take such steps as may be
necessary or convenient to reincorporate the bridge
financial company under the laws of a State and,
notwithstanding any provisions of Federal or State law,
such State-chartered corporation shall be deemed to
succeed by operation of law to such rights, titles,
powers, and interests of the bridge financial company as
the Corporation may provide, with the same effect as if
the bridge financial company had merged with the State-
chartered corporation under provisions of the corporate
laws of such State.
(C) Sale of stock.--Following the sale of 80 percent
or more of the capital stock of a bridge financial
company, as provided in paragraph (13)(C), the company
shall have all of the rights, powers, and privileges
under its constituent documents and applicable Federal
or State law. In connection therewith, the Corporation
may take such steps as may be necessary or convenient to
reincorporate the bridge financial company under the
laws of a State and, notwithstanding any provisions of
Federal or State law, the State-chartered corporation
shall be deemed to succeed by operation of law to such
rights, titles, powers and interests of the bridge
financial company as the Corporation may provide, with
the same effect as if the bridge financial company had
merged with the State-chartered corporation under
provisions of the corporate laws of such State.
(D) Assumption of liabilities and sale of assets.--
Following the assumption of all or substantially all of
the liabilities of the bridge financial company, or the
sale of

[[Page 1503]]

all or substantially all of the assets of the bridge
financial company, as provided in paragraph (13)(D), at
the election of the Corporation, the bridge financial
company may retain its status as such for the period
provided in paragraph (12) or may be dissolved at the
election of the Corporation.
(E) Amendments to charter.--Following the
consummation of a transaction described in subparagraph
(A), (B), (C), or (D) of paragraph (13), the charter of
the resulting company shall be amended to reflect the
termination of bridge financial company status, if
appropriate.
(15) Dissolution of bridge financial company.--
(A) In general.--Notwithstanding any other provision
of Federal or State law, if the status of a bridge
financial company as such has not previously been
terminated by the occurrence of an event specified in
subparagraph (A), (B), (C), or (D) of paragraph (13)--
(i) the Corporation may, in its discretion,
dissolve the bridge financial company in
accordance with this paragraph at any time; and
(ii) the <> Corporation
shall promptly commence dissolution proceedings in
accordance with this paragraph upon the expiration
of the 2-year period following the date on which
the bridge financial company was chartered, or any
extension thereof, as provided in paragraph (12).
(B) Procedures.--The Corporation shall remain the
receiver for a bridge financial company for the purpose
of dissolving the bridge financial company. The
Corporation as receiver for a bridge financial company
shall wind up the affairs of the bridge financial
company in conformity with the provisions of law
relating to the liquidation of covered financial
companies under this title. With respect to any such
bridge financial company, the Corporation as receiver
shall have all the rights, powers, and privileges and
shall perform the duties related to the exercise of such
rights, powers, or privileges granted by law to the
Corporation as receiver for a covered financial company
under this title and, notwithstanding any other
provision of law, in the exercise of such rights,
powers, and privileges, the Corporation shall not be
subject to the direction or supervision of any State
agency or other Federal agency.
(16) Authority to obtain credit.--
(A) In general.--A bridge financial company may
obtain unsecured credit and issue unsecured debt.
(B) Inability to obtain credit.--If a bridge
financial company is unable to obtain unsecured credit
or issue unsecured debt, the Corporation may authorize
the obtaining of credit or the issuance of debt by the
bridge financial company--
(i) with priority over any or all of the
obligations of the bridge financial company;
(ii) secured by a lien on property of the
bridge financial company that is not otherwise
subject to a lien; or
(iii) secured by a junior lien on property of
the bridge financial company that is subject to a
lien.
(C) Limitations.--

[[Page 1504]]

(i) In general.--The Corporation, after notice
and a hearing, may authorize the obtaining of
credit or the issuance of debt by a bridge
financial company that is secured by a senior or
equal lien on property of the bridge financial
company that is subject to a lien, only if--
(I) the bridge financial company is
unable to otherwise obtain such credit
or issue such debt; and
(II) there is adequate protection of
the interest of the holder of the lien
on the property with respect to which
such senior or equal lien is proposed to
be granted.
(ii) Hearing.--The hearing required pursuant
to this subparagraph shall be before a court of
the United States, which shall have jurisdiction
to conduct such hearing and to authorize a bridge
financial company to obtain secured credit under
clause (i).
(D) Burden of proof.--In any hearing under this
paragraph, the Corporation has the burden of proof on
the issue of adequate protection.
(E) Qualified financial contracts.--No credit or
debt obtained or issued by a bridge financial company
may contain terms that impair the rights of a
counterparty to a qualified financial contract upon a
default by the bridge financial company, other than the
priority of such counterparty's unsecured claim (after
the exercise of rights) relative to the priority of the
bridge financial company's obligations in respect of
such credit or debt, unless such counterparty consents
in writing to any such impairment.
(17) Effect on debts and liens.--The reversal or
modification on appeal of an authorization under this subsection
to obtain credit or issue debt, or of a grant under this section
of a priority or a lien, does not affect the validity of any
debt so issued, or any priority or lien so granted, to an entity
that extended such credit in good faith, whether or not such
entity knew of the pendency of the appeal, unless such
authorization and the issuance of such debt, or the granting of
such priority or lien, were stayed pending appeal.

(i) Sharing Records.--If the Corporation has been appointed as
receiver for a covered financial company, other Federal regulators shall
make all records relating to the covered financial company available to
the Corporation, which may be used by the Corporation in any manner that
the Corporation determines to be appropriate.
(j) Expedited Procedures for Certain Claims.--
(1) Time for filing notice of appeal.--
The <> notice of appeal of any order, whether
interlocutory or final, entered in any case brought by the
Corporation against a director, officer, employee, agent,
attorney, accountant, or appraiser of the covered financial
company, or any other person employed by or providing services
to a covered financial company, shall be filed not later than 30
days after the date of entry of the order. The hearing of the
appeal shall be held not later than 120 days after the date of
the notice of appeal. The appeal shall be decided not later than
180 days after the date of the notice of appeal.

[[Page 1505]]

(2) Scheduling.--The <> court shall expedite
the consideration of any case brought by the Corporation against
a director, officer, employee, agent, attorney, accountant, or
appraiser of a covered financial company or any other person
employed by or providing services to a covered financial
company. As far as practicable, the court shall give such case
priority on its docket.
(3) Judicial discretion.--The court may modify the schedule
and limitations stated in paragraphs (1) and (2) in a particular
case, based on a specific finding that the ends of justice that
would be served by making such a modification would outweigh the
best interest of the public in having the case resolved
expeditiously.

(k) Foreign Investigations.--The Corporation, as receiver for any
covered financial company, and for purposes of carrying out any power,
authority, or duty with respect to a covered financial company--
(1) may request the assistance of any foreign financial
authority and provide assistance to any foreign financial
authority in accordance with section 8(v) of the Federal Deposit
Insurance Act, as if the covered financial company were an
insured depository institution, the Corporation were the
appropriate Federal banking agency for the company, and any
foreign financial authority were the foreign banking authority;
and
(2) may maintain an office to coordinate foreign
investigations or investigations on behalf of foreign financial
authorities.

(l) Prohibition on Entering Secrecy Agreements and Protective
Orders.--The Corporation may not enter into any agreement or approve any
protective order which prohibits the Corporation from disclosing the
terms of any settlement of an administrative or other action for damages
or restitution brought by the Corporation in its capacity as receiver
for a covered financial company.
(m) Liquidation of Certain Covered Financial Companies or Bridge
Financial Companies.--
(1) In <> general.--Except as
specifically provided in this section, and notwithstanding any
other provision of law, the Corporation, in connection with the
liquidation of any covered financial company or bridge financial
company with respect to which the Corporation has been appointed
as receiver, shall--
(A) in the case of any covered financial company or
bridge financial company that is a stockbroker, but is
not a member of the Securities Investor Protection
Corporation, apply the provisions of subchapter III of
chapter 7 of the Bankruptcy Code, in respect of the
distribution to any customer of all customer name
security and customer property and member property, as
if such covered financial company or bridge financial
company were a debtor for purposes of such subchapter;
or
(B) in the case of any covered financial company or
bridge financial company that is a commodity broker,
apply the provisions of subchapter IV of chapter 7 the
Bankruptcy Code, in respect of the distribution to any
customer of all customer property and member property,
as if such covered financial company or bridge financial
company were a debtor for purposes of such subchapter.
(2) Definitions.--For purposes of this subsection--

[[Page 1506]]

(A) the terms ``customer'', ``customer name
security'', and ``customer property and member
property'' have the same meanings as in sections 741 and
761 of title 11, United States Code; and
(B) the terms ``commodity broker'' and
``stockbroker'' have the same meanings as in section 101
of the Bankruptcy Code.

(n) Orderly Liquidation Fund.--
(1) Establishment.--There is established in the Treasury of
the United States a separate fund to be known as the ``Orderly
Liquidation Fund'', which shall be available to the Corporation
to carry out the authorities contained in this title, for the
cost of actions authorized by this title, including the orderly
liquidation of covered financial companies, payment of
administrative expenses, the payment of principal and interest
by the Corporation on obligations issued under paragraph (5),
and the exercise of the authorities of the Corporation under
this title.
(2) Proceeds.--Amounts received by the Corporation,
including assessments received under subsection (o), proceeds of
obligations issued under paragraph (5), interest and other
earnings from investments, and repayments to the Corporation by
covered financial companies, shall be deposited into the Fund.
(3) Management.--The Corporation shall manage the Fund in
accordance with this subsection and the policies and procedures
established under section 203(d).
(4) Investments.--At the request of the Corporation, the
Secretary may invest such portion of amounts held in the Fund
that are not, in the judgment of the Corporation, required to
meet the current needs of the Corporation, in obligations of the
United States having suitable maturities, as determined by the
Corporation. The interest on and the proceeds from the sale or
redemption of such obligations shall be credited to the Fund.
(5) Authority to issue obligations.--
(A) Corporation authorized to issue obligations.--
Upon appointment by the Secretary of the Corporation as
receiver for a covered financial company, the
Corporation is authorized to issue obligations to the
Secretary.
(B) Secretary authorized to purchase obligations.--
The Secretary may, under such terms and conditions as
the Secretary may require, purchase or agree to purchase
any obligations issued under subparagraph (A), and for
such purpose, the Secretary is authorized to use as a
public debt transaction the proceeds of the sale of any
securities issued under chapter 31 of title 31, United
States Code, and the purposes for which securities may
be issued under chapter 31 of title 31, United States
Code, are extended to include such purchases.
(C) Interest rate.--Each purchase of obligations by
the Secretary under this paragraph shall be upon such
terms and conditions as to yield a return at a rate
determined by the Secretary, taking into consideration
the current average yield on outstanding marketable
obligations of the United States of comparable maturity,
plus an

[[Page 1507]]

interest rate surcharge to be determined by the
Secretary, which shall be greater than the difference
between--
(i) the current average rate on an index of
corporate obligations of comparable maturity; and
(ii) the current average rate on outstanding
marketable obligations of the United States of
comparable maturity.
(D) Secretary authorized to sell obligations.--The
Secretary may <> sell, upon such
terms and conditions as the Secretary shall determine,
any of the obligations acquired under this paragraph.
(E) Public debt transactions.--All purchases and
sales by the Secretary of such obligations under this
paragraph shall be treated as public debt transactions
of the United States, and the proceeds from the sale of
any obligations acquired by the Secretary under this
paragraph shall be deposited into the Treasury of the
United States as miscellaneous receipts.
(6) Maximum obligation limitation.--The Corporation may not,
in connection with the orderly liquidation of a covered
financial company, issue or incur any obligation, if, after
issuing or incurring the obligation, the aggregate amount of
such obligations outstanding under this subsection for each
covered financial company would exceed--
(A) an amount that is equal to 10 percent of the
total consolidated assets of the covered financial
company, based on the most recent financial statement
available, during the 30-day period immediately
following the date of appointment of the Corporation as
receiver (or a shorter time period if the Corporation
has calculated the amount described under subparagraph
(B)); and
(B) the amount that is equal to 90 percent of the
fair value of the total consolidated assets of each
covered financial company that are available for
repayment, after the time period described in
subparagraph (A).
(7) Rulemaking.--The Corporation and the Secretary shall
jointly, in consultation with the Council, prescribe regulations
governing the calculation of the maximum obligation limitation
defined in this paragraph.
(8) Rule of construction.--
(A) In general.--Nothing in this section shall be
construed to affect the authority of the Corporation
under subsection (a) or (b) of section 14 or section
15(c)(5) of the Federal Deposit Insurance Act (12 U.S.C.
1824, 1825(c)(5)), the management of the Deposit
Insurance Fund by the Corporation, or the resolution of
insured depository institutions, provided that--
(i) the authorities of the Corporation
contained in this title shall not be used to
assist the Deposit Insurance Fund or to assist any
financial company under applicable law other than
this Act;
(ii) the authorities of the Corporation
relating to the Deposit Insurance Fund, or any
other responsibilities of the Corporation under
applicable law other than this title, shall not be
used to assist a covered financial company
pursuant to this title; and

[[Page 1508]]

(iii) the Deposit Insurance Fund may not be
used in any manner to otherwise circumvent the
purposes of this title.
(B) Valuation.--For purposes of determining the
amount of obligations under this subsection--
(i) the Corporation shall include as an
obligation any contingent liability of the
Corporation pursuant to this title; and
(ii) the Corporation shall value any
contingent liability at its expected cost to the
Corporation.
(9) Orderly liquidation and repayment plans.--
(A) Orderly liquidation plan.--Amounts in the Fund
shall be available to the Corporation with regard to a
covered financial company for which the Corporation is
appointed receiver after the Corporation has developed
an orderly liquidation plan that is acceptable to the
Secretary with regard to such covered financial company,
including the provision and use of funds, including
taking any actions specified under section 204(d) and
subsection (h)(2)(G)(iv) and (h)(9) of this section, and
payments to third parties. The orderly liquidation plan
shall take into account actions to avoid or mitigate
potential adverse effects on low income, minority, or
underserved communities affected by the failure of the
covered financial company, and shall provide for
coordination with the primary financial regulatory
agencies, as appropriate, to ensure that such actions
are taken. The Corporation may, at any time, amend any
orderly liquidation plan approved by the Secretary with
the concurrence of the Secretary.
(B) Mandatory repayment plan.--
(i) In general.--
No <> amount authorized under
paragraph (6)(B) may be provided by the Secretary
to the Corporation under paragraph (5), unless an
agreement is in effect between the Secretary and
the Corporation that--
(I) provides a specific plan and
schedule to achieve the repayment of the
outstanding amount of any borrowing
under paragraph (5); and
(II) demonstrates that income to the
Corporation from the liquidated assets
of the covered financial company and
assessments under subsection (o) will be
sufficient to amortize the outstanding
balance within the period established in
the repayment schedule and pay the
interest accruing on such balance within
the time provided in subsection
(o)(1)(B).
(ii) Consultation with and report to
congress.--The Secretary and the Corporation
shall--
(I) consult with the Committee on
Banking, Housing, and Urban Affairs of
the Senate and the Committee on
Financial Services of the House of
Representatives on the terms of any
repayment schedule agreement; and
(II) submit <> a copy of the repayment
schedule agreement to the Committees
described in subclause (I) before the
end of the 30-day period beginning on
the date on which any amount is provided

[[Page 1509]]

by the Secretary to the Corporation
under paragraph (5).
(10) Implementation expenses.--
(A) In general.--Reasonable implementation expenses
of the Corporation incurred after the date of enactment
of this Act shall be treated as expenses of the Council.
(B) Requests for reimbursement.--The Corporation
shall periodically submit a request for reimbursement
for implementation expenses to the Chairperson of the
Council, who shall arrange for prompt reimbursement to
the Corporation of reasonable implementation expenses.
(C) Definition.--As used in this paragraph, the term
``implementation expenses''--
(i) means costs incurred by the Corporation
beginning on the date of enactment of this Act, as
part of its efforts to implement this title that
do not relate to a particular covered financial
company; and
(ii) includes the costs incurred in connection
with the development of policies, procedures,
rules, and regulations and other planning
activities of the Corporation consistent with
carrying out this title.

(o) Assessments.--
(1) Risk-based assessments.--
(A) Eligible financial companies defined.--For
purposes of this subsection, the term ``eligible
financial company'' means any bank holding company with
total consolidated assets equal to or greater than
$50,000,000,000 and any nonbank financial company
supervised by the Board of Governors.
(B) Assessments.--
The <> Corporation shall charge one or
more risk-based assessments in accordance with the
provisions of subparagraph (D), if such assessments are
necessary to pay in full the obligations issued by the
Corporation to the Secretary under this title within 60
months of the date of issuance of such obligations.
(C) Extensions authorized.--The Corporation may,
with the approval of the Secretary, extend the time
period under subparagraph (B), if the Corporation
determines that an extension is necessary to avoid a
serious adverse effect on the financial system of the
United States.
(D) Application of assessments.--To meet the
requirements of subparagraph (B), the Corporation
shall--
(i) impose assessments, as soon as
practicable, on any claimant that received
additional payments or amounts from the
Corporation pursuant to subsection (b)(4), (d)(4),
or (h)(5)(E), except for payments or amounts
necessary to initiate and continue operations
essential to implementation of the receivership or
any bridge financial company, to recover on a
cumulative basis, the entire difference between--
(I) the aggregate value the claimant
received from the Corporation on a claim
pursuant to this title (including
pursuant to subsection (b)(4), (d)(4),
and (h)(5)(E)), as of the date on which
such value was received; and
(II) the value the claimant was
entitled to receive from the Corporation
on such claim solely

[[Page 1510]]

from the proceeds of the liquidation of
the covered financial company under this
title; and
(ii) if the amounts to be recovered on a
cumulative basis under clause (i) are insufficient
to meet the requirements of subparagraph (B),
after taking into account the considerations set
forth in paragraph (4), impose assessments on--
(I) eligible financial companies;
and
(II) financial companies with total
consolidated assets equal to or greater
than $50,000,000,000 that are not
eligible financial companies.
(E) Provision of financing.--Payments or amounts
necessary to initiate and continue operations essential
to implementation of the receivership or any bridge
financial company described in subparagraph (D)(i) shall
not include the provision of financing, as defined by
rule of the Corporation, to third parties.
(2) Graduated assessment rate.--The Corporation shall impose
assessments on a graduated basis, with financial companies
having greater assets and risk being assessed at a higher rate.
(3) Notification and payment.--The Corporation shall notify
each financial company of that company's assessment under this
subsection. Any financial company subject to assessment under
this subsection shall pay such assessment in accordance with the
regulations prescribed pursuant to paragraph (6).
(4) Risk-based assessment considerations.--
In <> imposing assessments under
paragraph (1)(D)(ii), the Corporation shall use a risk matrix.
The Council shall make a recommendation to the Corporation on
the risk matrix to be used in imposing such assessments, and the
Corporation shall take into account any such recommendation in
the establishment of the risk matrix to be used to impose such
assessments. In recommending or establishing such risk matrix,
the Council and the Corporation, respectively, shall take into
account--
(A) economic conditions generally affecting
financial companies so as to allow assessments to
increase during more favorable economic conditions and
to decrease during less favorable economic conditions;
(B) any assessments imposed on a financial company
or an affiliate of a financial company that--
(i) is an insured depository institution,
assessed pursuant to section 7 or 13(c)(4)(G) of
the Federal Deposit Insurance Act;
(ii) is a member of the Securities Investor
Protection Corporation, assessed pursuant to
section 4 of the Securities Investor Protection
Act of 1970 (15 U.S.C. 78ddd);
(iii) is an insured credit union, assessed
pursuant to section 202(c)(1)(A)(i) of the Federal
Credit Union Act (12 U.S.C. 1782(c)(1)(A)(i)); or
(iv) is an insurance company, assessed
pursuant to applicable State law to cover (or
reimburse payments made to cover) the costs of the
rehabilitation, liquidation, or other State
insolvency proceeding with respect to 1 or more
insurance companies;

[[Page 1511]]

(C) the risks presented by the financial company to
the financial system and the extent to which the
financial company has benefitted, or likely would
benefit, from the orderly liquidation of a financial
company under this title, including--
(i) the amount, different categories, and
concentrations of assets of the financial company
and its affiliates, including both on-balance
sheet and off-balance sheet assets;
(ii) the activities of the financial company
and its affiliates;
(iii) the relevant market share of the
financial company and its affiliates;
(iv) the extent to which the financial company
is leveraged;
(v) the potential exposure to sudden calls on
liquidity precipitated by economic distress;
(vi) the amount, maturity, volatility, and
stability of the company's financial obligations
to, and relationship with, other financial
companies;
(vii) the amount, maturity, volatility, and
stability of the liabilities of the company,
including the degree of reliance on short-term
funding, taking into consideration existing
systems for measuring a company's risk-based
capital;
(viii) the stability and variety of the
company's sources of funding;
(ix) the company's importance as a source of
credit for households, businesses, and State and
local governments and as a source of liquidity for
the financial system;
(x) the extent to which assets are simply
managed and not owned by the financial company and
the extent to which ownership of assets under
management is diffuse; and
(xi) the amount, different categories, and
concentrations of liabilities, both insured and
uninsured, contingent and noncontingent, including
both on-balance sheet and off-balance sheet
liabilities, of the financial company and its
affiliates;
(D) any risks presented by the financial company
during the 10-year period immediately prior to the
appointment of the Corporation as receiver for the
covered financial company that contributed to the
failure of the covered financial company; and
(E) such other risk-related factors as the
Corporation, or the Council, as applicable, may
determine to be appropriate.
(5) Collection of information.--The Corporation may impose
on covered financial companies such collection of information
requirements as the Corporation deems necessary to carry out
this subsection after the appointment of the Corporation as
receiver under this title.
(6) Rulemaking.--
(A) In general.--
The <> Corporation shall prescribe
regulations to carry out this subsection. The
Corporation shall

[[Page 1512]]

consult with the Secretary in the development and
finalization of such regulations.
(B) Equitable treatment.--The regulations prescribed
under subparagraph (A) shall take into account the
differences in risks posed to the financial stability of
the United States by financial companies, the
differences in the liability structures of financial
companies, and the different bases for other assessments
that such financial companies may be required to pay, to
ensure that assessed financial companies are treated
equitably and that assessments under this subsection
reflect such differences.

(p) Unenforceability of Certain Agreements.--
(1) In general.--No provision described in paragraph (2)
shall be enforceable against or impose any liability on any
person, as such enforcement or liability shall be contrary to
public policy.
(2) Prohibited provisions.--A provision described in this
paragraph is any term contained in any existing or future
standstill, confidentiality, or other agreement that, directly
or indirectly--
(A) affects, restricts, or limits the ability of any
person to offer to acquire or acquire;
(B) prohibits any person from offering to acquire or
acquiring; or
(C) prohibits any person from using any previously
disclosed information in connection with any such offer
to acquire or acquisition of,
all or part of any covered financial company, including any
liabilities, assets, or interest therein, in connection with any
transaction in which the Corporation exercises its authority
under this title.

(q) Other Exemptions.--
(1) In general.--When acting as a receiver under this
title--
(A) the Corporation, including its franchise, its
capital, reserves and surplus, and its income, shall be
exempt from all taxation imposed by any State, county,
municipality, or local taxing authority, except that any
real property of the Corporation shall be subject to
State, territorial, county, municipal, or local taxation
to the same extent according to its value as other real
property is taxed, except that, notwithstanding the
failure of any person to challenge an assessment under
State law of the value of such property, such value, and
the tax thereon, shall be determined as of the period
for which such tax is imposed;
(B) no property of the Corporation shall be subject
to levy, attachment, garnishment, foreclosure, or sale
without the consent of the Corporation, nor shall any
involuntary lien attach to the property of the
Corporation; and
(C) the Corporation shall not be liable for any
amounts in the nature of penalties or fines, including
those arising from the failure of any person to pay any
real property, personal property, probate, or recording
tax or any recording or filing fees when due; and
(D) the Corporation shall be exempt from all
prosecution by the United States or any State, county,
municipality, or local authority for any criminal
offense arising

[[Page 1513]]

under Federal, State, county, municipal, or local law,
which was allegedly committed by the covered financial
company, or persons acting on behalf of the covered
financial company, prior to the appointment of the
Corporation as receiver.
(2) Limitation.--Paragraph (1) shall not apply with respect
to any tax imposed (or other amount arising) under the Internal
Revenue Code of 1986.

(r) Certain Sales of Assets Prohibited.--
(1) Persons who engaged in improper conduct with, or caused
losses to, covered <> financial companies.--
The Corporation shall prescribe regulations which, at a minimum,
shall prohibit the sale of assets of a covered financial company
by the Corporation to--
(A) any person who--
(i) has defaulted, or was a member of a
partnership or an officer or director of a
corporation that has defaulted, on 1 or more
obligations, the aggregate amount of which exceeds
$1,000,000, to such covered financial company;
(ii) has been found to have engaged in
fraudulent activity in connection with any
obligation referred to in clause (i); and
(iii) proposes to purchase any such asset in
whole or in part through the use of the proceeds
of a loan or advance of credit from the
Corporation or from any covered financial company;
(B) any person who participated, as an officer or
director of such covered financial company or of any
affiliate of such company, in a material way in any
transaction that resulted in a substantial loss to such
covered financial company; or
(C) any person who has demonstrated a pattern or
practice of defalcation regarding obligations to such
covered financial company.
(2) Convicted debtors.--Except as provided in paragraph (3),
a person may not purchase any asset of such institution from the
receiver, if that person--
(A) has been convicted of an offense under section
215, 656, 657, 1005, 1006, 1007, 1008, 1014, 1032, 1341,
1343, or 1344 of title 18, United States Code, or of
conspiring to commit such an offense, affecting any
covered financial company; and
(B) is in default on any loan or other extension of
credit from such covered financial company which, if not
paid, will cause substantial loss to the Fund or the
Corporation.
(3) Settlement of claims.--Paragraphs (1) and (2) shall not
apply to the sale or transfer by the Corporation of any asset of
any covered financial company to any person, if the sale or
transfer of the asset resolves or settles, or is part of the
resolution or settlement, of 1 or more claims that have been, or
could have been, asserted by the Corporation against the person.
(4) Definition of default.--For purposes of this subsection,
the term ``default'' means a failure to comply with

[[Page 1514]]

the terms of a loan or other obligation to such an extent that
the property securing the obligation is foreclosed upon.

(s) Recoupment of Compensation From Senior Executives and
Directors.--
(1) In general.--The Corporation, as receiver of a covered
financial company, may recover from any current or former senior
executive or director substantially responsible for the failed
condition of the covered financial company any compensation
received during the 2-year period preceding the date on which
the Corporation was appointed as the receiver of the covered
financial company, except that, in the case of fraud, no time
limit shall apply.
(2) Cost considerations.--In seeking to recover any such
compensation, the Corporation shall weigh the financial and
deterrent benefits of such recovery against the cost of
executing the recovery.
(3) Rulemaking.--The Corporation shall promulgate
regulations to implement the requirements of this subsection,
including defining the term ``compensation'' to mean any
financial remuneration, including salary, bonuses, incentives,
benefits, severance, deferred compensation, or golden parachute
benefits, and any profits realized from the sale of the
securities of the covered financial company.
SEC. 211. <> MISCELLANEOUS PROVISIONS.

(a) Clarification of Prohibition Regarding Concealment of Assets
From Receiver or Liquidating Agent.--Section 1032(1) of title 18, United
States Code, is amended by inserting ``the Federal Deposit Insurance
Corporation acting as receiver for a covered financial company, in
accordance with title II of the Dodd-Frank Wall Street Reform and
Consumer Protection Act,'' before ``or the National Credit''.
(b) Conforming Amendment.--Section 1032 of title 18, United States
Code, is amended in the section heading, by striking ``of financial
institution''.
(c) Federal Deposit Insurance Corporation Improvement Act of 1991.--
Section 403(a) of the Federal Deposit Insurance Corporation Improvement
Act of 1991 (12 U.S.C. 4403(a)) is amended by inserting ``section 210(c)
of the Dodd-Frank Wall Street Reform and Consumer Protection Act,
section 1367 of the Federal Housing Enterprises Financial Safety and
Soundness Act of 1992 (12 U.S.C. 4617(d)),'' after ``section 11(e) of
the Federal Deposit Insurance Act,''.
(d) FDIC Inspector General Reviews.--
(1) Scope.--The <> Inspector
General of the Corporation shall conduct, supervise, and
coordinate audits and investigations of the liquidation of any
covered financial company by the Corporation as receiver under
this title, including collecting and summarizing--
(A) a description of actions taken by the
Corporation as receiver;
(B) a description of any material sales, transfers,
mergers, obligations, purchases, and other material
transactions entered into by the Corporation;
(C) an evaluation of the adequacy of the policies
and procedures of the Corporation under section 203(d)
and orderly liquidation plan under section 210(n)(14);

[[Page 1515]]

(D) an evaluation of the utilization by the
Corporation of the private sector in carrying out its
functions, including the adequacy of any conflict-of-
interest reviews; and
(E) an evaluation of the overall performance of the
Corporation in liquidating the covered financial
company, including administrative costs, timeliness of
liquidation process, and impact on the financial system.
(2) Frequency.--Not <> later than 6 months
after the date of appointment of the Corporation as receiver
under this title and every 6 months thereafter, the Inspector
General of the Corporation shall conduct the audit and
investigation described in paragraph (1).
(3) Reports and testimony.--The Inspector General of the
Corporation shall include in the semiannual reports required by
section 5(a) of the Inspector General Act of 1978 (5 U.S.C.
App.), a summary of the findings and evaluations under paragraph
(1), and shall appear before the appropriate committees of
Congress, if requested, to present each such report.
(4) Funding.--
(A) Initial funding.--The expenses of the Inspector
General of the Corporation in carrying out this
subsection shall be considered administrative expenses
of the receivership.
(B) Additional funding.--If the maximum amount
available to the Corporation as receiver under this
title is insufficient to enable the Inspector General of
the Corporation to carry out the duties under this
subsection, the Corporation shall pay such additional
amounts from assessments imposed under section 210.
(5) Termination of responsibilities.--The duties and
responsibilities of the Inspector General of the Corporation
under this subsection shall terminate 1 year after the date of
termination of the receivership under this title.

(e) Treasury Inspector General Reviews.--
(1) Scope.--The <> Inspector
General of the Department of the Treasury shall conduct,
supervise, and coordinate audits and investigations of actions
taken by the Secretary related to the liquidation of any covered
financial company under this title, including collecting and
summarizing--
(A) a description of actions taken by the Secretary
under this title;
(B) an analysis of the approval by the Secretary of
the policies and procedures of the Corporation under
section 203 and acceptance of the orderly liquidation
plan of the Corporation under section 210; and
(C) an assessment of the terms and conditions
underlying the purchase by the Secretary of obligations
of the Corporation under section 210.
(2) Frequency.--Not <> later than 6 months
after the date of appointment of the Corporation as receiver
under this title and every 6 months thereafter, the Inspector
General of the Department of the Treasury shall conduct the
audit and investigation described in paragraph (1).
(3) Reports and testimony.--The Inspector General of the
Department of the Treasury shall include in the semiannual
reports required by section 5(a) of the Inspector General Act

[[Page 1516]]

of 1978 (5 U.S.C. App.), a summary of the findings and
assessments under paragraph (1), and shall appear before the
appropriate committees of Congress, if requested, to present
each such report.
(4) Termination of responsibilities.--The duties and
responsibilities of the Inspector General of the Department of
the Treasury under this subsection shall terminate 1 year after
the date on which the obligations purchased by the Secretary
from the Corporation under section 210 are fully redeemed.

(f) Primary Financial Regulatory Agency Inspector General Reviews.--
(1) Scope.--Upon <> the appointment of the
Corporation as receiver for a covered financial company
supervised by a Federal primary financial regulatory agency or
the Board of Governors under section 165, the Inspector General
of the agency or the Board of Governors shall make a written
report reviewing the supervision by the agency or the Board of
Governors of the covered financial company, which shall--
(A) <> evaluate the effectiveness
of the agency or the Board of Governors in carrying out
its supervisory responsibilities with respect to the
covered financial company;
(B) identify any acts or omissions on the part of
agency or Board of Governors officials that contributed
to the covered financial company being in default or in
danger of default;
(C) identify any actions that could have been taken
by the agency or the Board of Governors that would have
prevented the company from being in default or in danger
of default; and
(D) <> recommend
appropriate administrative or legislative action.
(2) Reports and testimony.--Not later than 1 year after the
date of appointment of the Corporation as receiver under this
title, the Inspector General of the Federal primary financial
regulatory agency or the Board of Governors shall provide the
report required by paragraph (1) to such agency or the Board of
Governors, and along with such agency or the Board of Governors,
as applicable, shall appear before the appropriate committees of
Congress, if requested, to present the report required by
paragraph (1). Not later than 90 days after the date of receipt
of the report required by paragraph (1), such agency or the
Board of Governors, as applicable, shall provide a written
report to Congress describing any actions taken in response to
the recommendations in the report, and if no such actions were
taken, describing the reasons why no actions were taken.
SEC. 212. <> PROHIBITION OF CIRCUMVENTION AND
PREVENTION OF CONFLICTS OF INTEREST.

(a) No Other Funding.--Funds for the orderly liquidation of any
covered financial company under this title shall only be provided as
specified under this title.
(b) Limit on Governmental Actions.--No governmental entity may take
any action to circumvent the purposes of this title.

[[Page 1517]]

(c) Conflict of Interest.--In the event that the Corporation is
appointed receiver for more than 1 covered financial company or is
appointed receiver for a covered financial company and receiver for any
insured depository institution that is an affiliate of such covered
financial company, the Corporation shall take appropriate action, as
necessary to avoid any conflicts of interest that may arise in
connection with multiple receiverships.
SEC. 213. <> BAN ON CERTAIN ACTIVITIES BY
SENIOR EXECUTIVES AND DIRECTORS.

(a) Prohibition Authority.--The Board of Governors or, if the
covered financial company was not supervised by the Board of Governors,
the Corporation, may exercise the authority provided by this section.
(b) Authority To Issue Order.--The appropriate agency described in
subsection (a) may take any action authorized by subsection (c), if the
agency determines that--
(1) a senior executive or a director of the covered
financial company, prior to the appointment of the Corporation
as receiver, has, directly or indirectly--
(A) violated--
(i) any law or regulation;
(ii) any cease-and-desist order which has
become final;
(iii) any condition imposed in writing by a
Federal agency in connection with any action on
any application, notice, or request by such
company or senior executive; or
(iv) any written agreement between such
company and such agency;
(B) engaged or participated in any unsafe or unsound
practice in connection with any financial company; or
(C) committed or engaged in any act, omission, or
practice which constitutes a breach of the fiduciary
duty of such senior executive or director;
(2) by reason of the violation, practice, or breach
described in any subparagraph of paragraph (1), such senior
executive or director has received financial gain or other
benefit by reason of such violation, practice, or breach and
such violation, practice, or breach contributed to the failure
of the company; and
(3) such violation, practice, or breach--
(A) involves personal dishonesty on the part of such
senior executive or director; or
(B) demonstrates willful or continuing disregard by
such senior executive or director for the safety or
soundness of such company.

(c) Authorized Actions.--
(1) In general.--The <> appropriate agency for a financial company, as
described in subsection (a), may serve upon a senior executive
or director described in subsection (b) a written notice of the
intention of the agency to prohibit any further participation by
such person, in any manner, in the conduct of the affairs of any
financial company for a period of time determined by the
appropriate agency to be commensurate with such violation,
practice, or breach, provided such period shall be not less than
2 years.

[[Page 1518]]

(2) Procedures.--The <> due process
requirements and other procedures under section 8(e) of the
Federal Deposit Insurance Act (12 U.S.C. 1818(e)) shall apply to
actions under this section as if the covered financial company
were an insured depository institution and the senior executive
or director were an institution-affiliated party, as those terms
are defined in that Act.

(d) Regulations.--The Corporation and the Board of Governors, in
consultation with the Council, shall jointly prescribe rules or
regulations to administer and carry out this section, including rules,
regulations, or guidelines to further define the term senior executive
for the purposes of this section.
SEC. 214. <> PROHIBITION ON TAXPAYER FUNDING.

(a) Liquidation Required.--All financial companies put into
receivership under this title shall be liquidated. No taxpayer funds
shall be used to prevent the liquidation of any financial company under
this title.
(b) Recovery of Funds.--All funds expended in the liquidation of a
financial company under this title shall be recovered from the
disposition of assets of such financial company, or shall be the
responsibility of the financial sector, through assessments.
(c) No Losses to Taxpayers.--Taxpayers shall bear no losses from the
exercise of any authority under this title.
SEC. 215. STUDY ON SECURED CREDITOR HAIRCUTS.

(a) Study Required.--The Council shall conduct a study evaluating
the importance of maximizing United States taxpayer protections and
promoting market discipline with respect to the treatment of fully
secured creditors in the utilization of the orderly liquidation
authority authorized by this Act. In carrying out such study, the
Council shall--
(1) not be prejudicial to current or past laws or
regulations with respect to secured creditor treatment in a
resolution process;
(2) study the similarities and differences between the
resolution mechanisms authorized by the Bankruptcy Code, the
Federal Deposit Insurance Corporation Improvement Act of 1991,
and the orderly liquidation authority authorized by this Act;
(3) determine how various secured creditors are treated in
such resolution mechanisms and examine how a haircut (of various
degrees) on secured creditors could improve market discipline
and protect taxpayers;
(4) compare the benefits and dynamics of prudent lending
practices by depository institutions in secured loans for
consumers and small businesses to the lending practices of
secured creditors to large, interconnected financial firms;
(5) consider whether credit differs according to different
types of collateral and different terms and timing of the
extension of credit; amd
(6) include an examination of stakeholders who were
unsecured or under-collateralized and seek collateral when a
firm is failing, and the impact that such behavior has on
financial stability and an orderly resolution that protects
taxpayers if the firm fails.

(b) Report.--Not later than the end of the 1-year period beginning
on the date of enactment of this Act, the Council shall issue a report
to the Congress containing all findings and conclusions

[[Page 1519]]

made by the Council in carrying out the study required under subsection
(a).
SEC. 216. STUDY ON BANKRUPTCY PROCESS FOR FINANCIAL AND NONBANK
FINANCIAL INSTITUTIONS.

(a) Study.--
(1) In general.--Upon enactment of this Act, the Board of
Governors, in consultation with the Administrative Office of the
United States Courts, shall conduct a study regarding the
resolution of financial companies under the Bankruptcy Code,
under chapter 7 or 11 thereof .
(2) Issues to be studied.--Issues to be studied under this
section include--
(A) the effectiveness of chapter 7 and chapter 11 of
the Bankruptcy Code in facilitating the orderly
resolution or reorganization of systemic financial
companies;
(B) whether a special financial resolution court or
panel of special masters or judges should be established
to oversee cases involving financial companies to
provide for the resolution of such companies under the
Bankruptcy Code, in a manner that minimizes adverse
impacts on financial markets without creating moral
hazard;
(C) whether amendments to the Bankruptcy Code should
be adopted to enhance the ability of the Code to resolve
financial companies in a manner that minimizes adverse
impacts on financial markets without creating moral
hazard;
(D) whether amendments should be made to the
Bankruptcy Code, the Federal Deposit Insurance Act, and
other insolvency laws to address the manner in which
qualified financial contracts of financial companies are
treated; and
(E) the implications, challenges, and benefits to
creating a new chapter or subchapter of the Bankruptcy
Code to deal with financial companies.

(b) Reports to Congress.--Not later than 1 year after the date of
enactment of this Act, and in each successive year until the fifth year
after the date of enactment of this Act, the Administrative Office of
the United States courts shall submit to the Committees on Banking,
Housing, and Urban Affairs and the Judiciary of the Senate and the
Committees on Financial Services and the Judiciary of the House of
Representatives a report summarizing the results of the study conducted
under subsection (a).
SEC. 217. STUDY ON INTERNATIONAL COORDINATION RELATING TO
BANKRUPTCY PROCESS FOR NONBANK FINANCIAL
INSTITUTIONS.

(a) Study.--
(1) In general.--The Board of Governors, in consultation
with the Administrative Office of the United States Courts,
shall conduct a study regarding international coordination
relating to the resolution of systemic financial companies under
the United States Bankruptcy Code and applicable foreign law.
(2) Issues to be studied.--With respect to the bankruptcy
process for financial companies, issues to be studied under this
section include--
(A) the extent to which international coordination
currently exists;

[[Page 1520]]

(B) current mechanisms and structures for
facilitating international cooperation;
(C) barriers to effective international
coordination; and
(D) ways to increase and make more effective
international coordination of the resolution of
financial companies, so as to minimize the impact on the
financial system without creating moral hazard.

(b) Report to Congress.--Not later than 1 year after the date of
enactment of this Act, the Administrative office of the United States
Courts shall submit to the Committees on Banking, Housing, and Urban
Affairs and the Judiciary of the Senate and the Committees on Financial
Services and the Judiciary of the House of Representatives a report
summarizing the results of the study conducted under subsection (a).

TITLE III--TRANSFER <> OF POWERS TO THE COMPTROLLER OF THE CURRENCY,
THE CORPORATION, AND THE BOARD OF GOVERNORS
SEC. 300. <> SHORT TITLE.

This title may be cited as the ``Enhancing Financial Institution
Safety and Soundness Act of 2010''.
SEC. 301. <> PURPOSES.

The purposes of this title are--
(1) to provide for the safe and sound operation of the
banking system of the United States;
(2) to preserve and protect the dual system of Federal and
State-chartered depository institutions;
(3) to ensure the fair and appropriate supervision of each
depository institution, regardless of the size or type of
charter of the depository institution; and
(4) to streamline and rationalize the supervision of
depository institutions and the holding companies of depository
institutions.
SEC. 302. <> DEFINITION.

In this title, the term ``transferred employee'' means, as the
context requires, an employee transferred to the Office of the
Comptroller of the Currency or the Corporation under section 322.

Subtitle A--Transfer of Powers and Duties

SEC. 311. <> TRANSFER DATE.

(a) Transfer Date.--Except <> as provided in
subsection (b), the term ``transfer date'' means the date that is 1 year
after the date of enactment of this Act.

(b) Extension Permitted.--
(1) Notice required.--The <> Secretary, in
consultation with the Comptroller of the Currency, the Director
of the Office of Thrift Supervision, the Chairman of the Board
of Governors, and the Chairperson of the Corporation, may extend
the period under subsection (a) and designate a transfer date
that is

[[Page 1521]]

not later than 18 months after the date of enactment of this
Act, if the Secretary transmits to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives--
(A) a written determination that commencement of the
orderly process to implement this title is not feasible
by the date that is 1 year after the date of enactment
of this Act;
(B) an explanation of why an extension is necessary
to commence the process of orderly implementation of
this title;
(C) the transfer date designated under this
subsection; and
(D) a description of the steps that will be taken to
initiate the process of an orderly and timely
implementation of this title within the extended time
period.
(2) Publication of notice.--Not <> later than 270 days after the date of
enactment of this Act, the Secretary shall publish in the
Federal Register notice of any transfer date designated under
paragraph (1).
SEC. 312. <> POWERS AND DUTIES TRANSFERRED.

(a) Effective Date.--This section, and the amendments made by this
section, shall take effect on the transfer date.
(b) Functions of the Office of Thrift Supervision.--
(1) Savings and loan holding company functions
transferred.--
(A) Transfer of functions.--There are transferred to
the Board of Governors all functions of the Office of
Thrift Supervision and the Director of the Office of
Thrift Supervision (including the authority to issue
orders) relating to--
(i) the supervision of--
(I) any savings and loan holding
company; and
(II) any subsidiary (other than a
depository institution) of a savings and
loan holding company; and
(ii) all rulemaking authority of the Office of
Thrift Supervision and the Director of the Office
of Thrift Supervision relating to savings and loan
holding companies.
(B) Powers, authorities, rights, and duties.--The
Board of Governors shall succeed to all powers,
authorities, rights, and duties that were vested in the
Office of Thrift Supervision and the Director of the
Office of Thrift Supervision on the day before the
transfer date relating to the functions and authority
transferred under subparagraph (A).
(2) All other functions transferred.--
(A) Board of governors.--All rulemaking authority of
the Office of Thrift Supervision and the Director of the
Office of Thrift Supervision under section 11 of the
Home Owners' Loan Act (12 U.S.C. 1468) relating to
transactions with affiliates and extensions of credit to
executive officers, directors, and principal
shareholders and under section 5(q) of such Act relating
to tying arrangements is transferred to the Board of
Governors.

[[Page 1522]]

(B) Comptroller of the currency.--Except as provided
in paragraph (1) and subparagraph (A)--
(i) there are transferred to the Office of the
Comptroller of the Currency and the Comptroller of
the Currency--
(I) all functions of the Office of
Thrift Supervision and the Director of
the Office of Thrift Supervision,
respectively, relating to Federal
savings associations; and
(II) all rulemaking authority of the
Office of Thrift Supervision and the
Director of the Office of Thrift
Supervision, respectively, relating to
savings associations; and
(ii) the Office of the Comptroller of the
Currency and the Comptroller of the Currency shall
succeed to all powers, authorities, rights, and
duties that were vested in the Office of Thrift
Supervision and the Director of the Office of
Thrift Supervision, respectively, on the day
before the transfer date relating to the functions
and authority transferred under clause (i).
(C) Corporation.--Except as provided in paragraph
(1) and subparagraphs (A) and (B)--
(i) all functions of the Office of Thrift
Supervision and the Director of the Office of
Thrift Supervision relating to State savings
associations are transferred to the Corporation;
and
(ii) the Corporation shall succeed to all
powers, authorities, rights, and duties that were
vested in the Office of Thrift Supervision and the
Director of the Office of Thrift Supervision on
the day before the transfer date relating to the
functions transferred under clause (i).

(c) Conforming Amendments.--Section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813) is amended--
(1) in subsection (q), by striking paragraphs (1) through
(4) and inserting the following:
``(1) the Office of the Comptroller of the Currency, in the
case of--
``(A) any national banking association;
``(B) any Federal branch or agency of a foreign
bank; and
``(C) any Federal savings association;
``(2) the Federal Deposit Insurance Corporation, in the case
of--
``(A) any State nonmember insured bank;
``(B) any foreign bank having an insured branch; and
``(C) any State savings association;
``(3) the Board of Governors of the Federal Reserve System,
in the case of--
``(A) any State member bank;
``(B) any branch or agency of a foreign bank with
respect to any provision of the Federal Reserve Act
which is made applicable under the International Banking
Act of 1978;
``(C) any foreign bank which does not operate an
insured branch;

[[Page 1523]]

``(D) any agency or commercial lending company other
than a Federal agency;
``(E) 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, including such proceedings under the Financial
Institutions Supervisory Act of 1966;
``(F) any bank holding company and any subsidiary
(other than a depository institution) of a bank holding
company; and
``(G) any savings and loan holding company and any
subsidiary (other than a depository institution) of a
savings and loan holding company.''; and
(2) in paragraphs (1) and (3) of subsection (u), by striking
``(other than a bank holding company'' and inserting ``(other
than a bank holding company or savings and loan holding
company''.

(d) Consumer Protection.--Nothing in this section may be construed
to limit or otherwise affect the transfer of powers under title X.
SEC. 313. <> ABOLISHMENT.

Effective <> 90 days after the transfer date,
the Office of Thrift Supervision and the position of Director of the
Office of Thrift Supervision are abolished.
SEC. 314. AMENDMENTS TO THE REVISED STATUTES.

(a) Amendment to Section 324.--Section 324 of the Revised Statutes
of the United States (12 U.S.C. 1) is amended to read as follows:
``SEC. 324. COMPTROLLER OF THE CURRENCY.

``(a) Office of the Comptroller of the Currency Established.--There
is established in the Department of the Treasury a bureau to be known as
the `Office of the Comptroller of the Currency' which is charged with
assuring the safety and soundness of, and compliance with laws and
regulations, fair access to financial services, and fair treatment of
customers by, the institutions and other persons subject to its
jurisdiction.
``(b) Comptroller of the Currency.--
``(1) In general.--The chief officer of the Office of the
Comptroller of the Currency shall be known as the Comptroller of
the Currency. The Comptroller of the Currency shall perform the
duties of the Comptroller of the Currency under the general
direction of the Secretary of the Treasury. The Secretary of the
Treasury may not delay or prevent the issuance of any rule or
the promulgation of any regulation by the Comptroller of the
Currency, and may not intervene in any matter or proceeding
before the Comptroller of the Currency (including agency
enforcement actions), unless otherwise specifically provided by
law.
``(2) Additional authority.--The Comptroller of the Currency
shall have the same authority with respect to functions
transferred to the Comptroller of the Currency under the
Enhancing Financial Institution Safety and Soundness Act of 2010
as was vested in the Director of the Office of Thrift
Supervision on the transfer date, as defined in section 311 of
that Act.''.

[[Page 1524]]

(b) Supervision of Federal Savings Associations.--Chapter 9 of title
VII of the Revised Statutes of the United States (12 U.S.C. 1 et seq.)
is amended by inserting after section 327A (12 U.S.C. 4a) the following:
``SEC. 327B. <> DEPUTY COMPTROLLER FOR THE
SUPERVISION AND EXAMINATION OF FEDERAL
SAVINGS ASSOCIATIONS.

``The <> Comptroller of the Currency shall
designate a Deputy Comptroller, who shall be responsible for the
supervision and examination of Federal savings associations.''.

(c) Amendment to Section 329.--Section 329 of the Revised Statutes
of the United States (12 U.S.C. 11) is amended by inserting before the
period at the end the following: ``or any Federal savings association''.
(d) Effective <> Date.--This section, and the
amendments made by this section, shall take effect on the transfer date.
SEC. 315. FEDERAL INFORMATION POLICY.

Section 3502(5) of title 44, United States Code, is amended by
inserting ``Office of the Comptroller of the Currency,'' after ``the
Securities and Exchange Commission,''.
SEC. 316. <> SAVINGS PROVISIONS.

(a) Office of Thrift Supervision.--
(1) Existing rights, duties, and obligations not affected.--
Sections 312(b) and 313 shall not affect the validity of any
right, duty, or obligation of the United States, the Director of
the Office of Thrift Supervision, the Office of Thrift
Supervision, or any other person, that existed on the day before
the transfer date.
(2) Continuation of suits.--This title shall not abate any
action or proceeding commenced by or against the Director of the
Office of Thrift Supervision or the Office of Thrift Supervision
before the transfer date, except that--
(A) for any action or proceeding arising out of a
function of the Office of Thrift Supervision or the
Director of the Office of Thrift Supervision transferred
to the Board of Governors by this title, the Board of
Governors shall be substituted for the Office of Thrift
Supervision or the Director of the Office of Thrift
Supervision as a party to the action or proceeding on
and after the transfer date;
(B) for any action or proceeding arising out of a
function of the Office of Thrift Supervision or the
Director of the Office of Thrift Supervision transferred
to the Office of the Comptroller of the Currency or the
Comptroller of the Currency by this title, the Office of
the Comptroller of the Currency or the Comptroller of
the Currency shall be substituted for the Office of
Thrift Supervision or the Director of the Office of
Thrift Supervision, as the case may be, as a party to
the action or proceeding on and after the transfer date;
and
(C) for any action or proceeding arising out of a
function of the Office of Thrift Supervision or the
Director of the Office of Thrift Supervision transferred
to the Corporation by this title, the Corporation shall
be substituted for the Office of Thrift Supervision or
the Director of the Office of Thrift Supervision as a
party to the action or proceeding on and after the
transfer date.

[[Page 1525]]

(b) Continuation of Existing OTS Orders, Resolutions,
Determinations, Agreements, Regulations, etc.--All orders, resolutions,
determinations, agreements, and regulations, interpretative rules, other
interpretations, guidelines, procedures, and other advisory materials,
that have been issued, made, prescribed, or allowed to become effective
by the Office of Thrift Supervision or the Director of the Office of
Thrift Supervision, or by a court of competent jurisdiction, in the
performance of functions that are transferred by this title and that are
in effect on the day before the transfer date, shall continue in effect
according to the terms of such orders, resolutions, determinations,
agreements, and regulations, interpretative rules, other
interpretations, guidelines, procedures, and other advisory materials,
and shall be enforceable by or against--
(1) the Board of Governors, in the case of a function of the
Office of Thrift Supervision or the Director of the Office of
Thrift Supervision transferred to the Board of Governors, until
modified, terminated, set aside, or superseded in accordance
with applicable law by the Board of Governors, by any court of
competent jurisdiction, or by operation of law;
(2) the Office of the Comptroller of the Currency or the
Comptroller of the Currency, in the case of a function of the
Office of Thrift Supervision or the Director of the Office of
Thrift Supervision transferred to the Office of the Comptroller
of the Currency or the Comptroller of the Currency,
respectively, until modified, terminated, set aside, or
superseded in accordance with applicable law by the Office of
the Comptroller of the Currency or the Comptroller of the
Currency, by any court of competent jurisdiction, or by
operation of law; and
(3) the Corporation, in the case of a function of the Office
of Thrift Supervision or the Director of the Office of Thrift
Supervision transferred to the Corporation, until modified,
terminated, set aside, or superseded in accordance with
applicable law by the Corporation, by any court of competent
jurisdiction, or by operation of law.

(c) Identification <> of Regulations Continued.--
(1) By the board of governors.--Not later than the transfer
date, the Board of Governors shall--
(A) identify the regulations continued under
subsection (b) that will be enforced by the Board of
Governors; and
(B) publish a list of the regulations identified
under subparagraph (A) in the Federal Register.
(2) By office of the comptroller of the currency.--Not later
than the transfer date, the Office of the Comptroller of the
Currency shall--
(A) after consultation with the Corporation,
identify the regulations continued under subsection (b)
that will be enforced by the Office of the Comptroller
of the Currency; and
(B) publish a list of the regulations identified
under subparagraph (A) in the Federal Register.
(3) By the corporation.--Not later than the transfer date,
the Corporation shall--
(A) after consultation with the Office of the
Comptroller of the Currency, identify the regulations
continued under subsection (b) that will be enforced by
the Corporation; and

[[Page 1526]]

(B) publish a list of the regulations identified
under subparagraph (A) in the Federal Register.

(d) Status of Regulations Proposed or Not Yet Effective.--
(1) Proposed regulations.--Any proposed regulation of the
Office of Thrift Supervision, which the Office of Thrift
Supervision in performing functions transferred by this title,
has proposed before the transfer date but has not published as a
final regulation before such date, shall be deemed to be a
proposed regulation of the Office of the Comptroller of the
Currency or the Board of Governors, as appropriate, according to
the terms of the proposed regulation.
(2) Regulations not yet effective.--Any interim or final
regulation of the Office of Thrift Supervision, which the Office
of Thrift Supervision, in performing functions transferred by
this title, has published before the transfer date but which has
not become effective before that date, shall become effective as
a regulation of the Office of the Comptroller of the Currency or
the Board of Governors, as appropriate, according to the terms
of the interim or final regulation, unless modified, terminated,
set aside, or superseded in accordance with applicable law by
the Office of the Comptroller of the Currency or the Board of
Governors, as appropriate, by any court of competent
jurisdiction, or by operation of law.
SEC. 317. <> REFERENCES IN FEDERAL LAW TO
FEDERAL BANKING AGENCIES.

On and after the transfer date, any reference in Federal law to the
Director of the Office of Thrift Supervision or the Office of Thrift
Supervision, in connection with any function of the Director of the
Office of Thrift Supervision or the Office of Thrift Supervision
transferred under section 312(b) or any other provision of this
subtitle, shall be deemed to be a reference to the Comptroller of the
Currency, the Office of the Comptroller of the Currency, the Chairperson
of the Corporation, the Corporation, the Chairman of the Board of
Governors, or the Board of Governors, as appropriate and consistent with
the amendments made in subtitle E.
SEC. 318. FUNDING.

(a) Compensation of Examiners.--Section 5240 of the Revised Statutes
of the United States (12 U.S.C. 481 et seq.) is amended--
(1) in the second undesignated paragraph (12 U.S.C. 481), in
the fourth sentence, by striking ``without regard to the
provisions of other laws applicable to officers or employees of
the United States'' and inserting the following: ``set and
adjusted subject to chapter 71 of title 5, United States Code,
and without regard to the provisions of other laws applicable to
officers or employees of the United States''; and
(2) in the third undesignated paragraph (12 U.S.C. 482), in
the first sentence, by striking ``shall fix'' and inserting
``shall, subject to chapter 71 of title 5, United States Code,
fix''.

(b) Funding of Office of the Comptroller of the Currency.--Chapter 4
of title LXII of the Revised Statutes is amended by inserting after
section 5240 (12 U.S.C. 481, 482) the following:
``Sec. <> 5240A.  The Comptroller of the Currency
may collect an assessment, fee, or other charge from any entity
described in section 3(q)(1) of the Federal Deposit Insurance Act (12
U.S.C.

[[Page 1527]]

1813(q)(1)), as the Comptroller determines is necessary or appropriate
to carry out the responsibilities of the Office of the Comptroller of
the Currency. In establishing the amount of an assessment, fee, or
charge collected from an entity under this section, the Comptroller of
the Currency may take into account the nature and scope of the
activities of the entity, the amount and type of assets that the entity
holds, the financial and managerial condition of the entity, and any
other factor, as the Comptroller of the Currency determines is
appropriate. Funds derived from any assessment, fee, or charge collected
or payment made pursuant to this section may be deposited by the
Comptroller of the Currency in accordance with the provisions of section
5234. Such funds shall not be construed to be Government funds or
appropriated monies, and shall not be subject to apportionment for
purposes of chapter 15 of title 31, United States Code, or any other
provision of law. The authority of the Comptroller of the Currency under
this section shall be in addition to the authority under section 5240.

``The Comptroller of the Currency shall have sole authority to
determine the manner in which the obligations of the Office of the
Comptroller of the Currency shall be incurred and its disbursements and
expenses allowed and paid, in accordance with this section, except as
provided in chapter 71 of title 5, United States Code (with respect to
compensation).''.
(c) Funding of Board of Governors.--Section 11 of the Federal
Reserve Act (12 U.S.C. 248) is amended by adding at the end the
following:
``(s) Assessments, Fees, and Other Charges for Certain Companies.--
``(1) In general.--The Board shall collect a total amount of
assessments, fees, or other charges from the companies described
in paragraph (2) that is equal to the total expenses the Board
estimates are necessary or appropriate to carry out the
supervisory and regulatory responsibilities of the Board with
respect to such companies.
``(2) Companies.--The companies described in this paragraph
are--
``(A) all bank holding companies having total
consolidated assets of $50,000,000,000 or more;
``(B) all savings and loan holding companies having
total consolidated assets of $50,000,000,000 or more;
and
``(C) all nonbank financial companies supervised by
the Board under section 113 of the Dodd-Frank Wall
Street Reform and Consumer Protection Act.''.

(d) Corporation Examination Fees.--Section 10(e) of the Federal
Deposit Insurance Act (12 U.S.C. 1820(e)) is amended by striking
paragraph (1) and inserting the following:
``(1) Regular and special examinations of depository
institutions.--The cost of conducting any regular examination or
special examination of any depository institution under
subsection (b)(2), (b)(3), or (d) or of any entity described in
section 3(q)(2) may be assessed by the Corporation against the
institution or entity to meet the expenses of the Corporation in
carrying out such examinations.''.

(e) Effective <> Date.--This section, and the
amendments made by this section, shall take effect on the transfer date.

[[Page 1528]]

SEC. 319. <> CONTRACTING AND LEASING
AUTHORITY.

Notwithstanding the Federal Property and Administrative Services Act
of 1949 (41 U.S.C. 251 et seq.) or any other provision of law (except
the full and open competition requirements of the Competition in
Contracting Act), the Office of the Comptroller of the Currency may--
(1) enter into and perform contracts, execute instruments,
and acquire real property (or property interest) as the
Comptroller deems necessary to carry out the duties and
responsibilities of the Office of the Comptroller of the
Currency; and
(2) hold, maintain, sell, lease, or otherwise dispose of the
property (or property interest) acquired under paragraph (1).

Subtitle B--Transitional Provisions

SEC. 321. <> INTERIM USE OF FUNDS, PERSONNEL,
AND PROPERTY OF THE OFFICE OF THRIFT
SUPERVISION.

(a) In General.--Before the transfer date, the Office of the
Comptroller of the Currency, the Corporation, and the Board of Governors
shall--
(1) consult <> and cooperate with the
Office of Thrift Supervision to facilitate the orderly transfer
of functions to the Office of the Comptroller of the Currency,
the Corporation, and the Board of Governors in accordance with
this title;
(2) <> determine jointly, from time to
time--
(A) the amount of funds necessary to pay any
expenses associated with the transfer of functions
(including expenses for personnel, property, and
administrative services) during the period beginning on
the date of enactment of this Act and ending on the
transfer date;
(B) which personnel are appropriate to facilitate
the orderly transfer of functions by this title; and
(C) what property and administrative services are
necessary to support the Office of the Comptroller of
the Currency, the Corporation, and the Board of
Governors during the period beginning on the date of
enactment of this Act and ending on the transfer date;
and
(3) take such actions as may be necessary to provide for the
orderly implementation of this title.

(b) Agency Consultation.--When requested jointly by the Office of
the Comptroller of the Currency, the Corporation, and the Board of
Governors to do so before the transfer date, the Office of Thrift
Supervision shall--
(1) pay <> to the Office of the Comptroller
of the Currency, the Corporation, or the Board of Governors, as
applicable, from funds obtained by the Office of Thrift
Supervision through assessments, fees, or other charges that the
Office of Thrift Supervision is authorized by law to impose,
such amounts as the Office of the Comptroller of the Currency,
the Corporation, and the Board of Governors jointly determine to
be necessary under subsection (a);
(2) detail to the Office of the Comptroller of the Currency,
the Corporation, or the Board of Governors, as applicable, such
personnel as the Office of the Comptroller of the Currency, the
Corporation, and the Board of Governors jointly determine to be
appropriate under subsection (a); and

[[Page 1529]]

(3) make available to the Office of the Comptroller of the
Currency, the Corporation, or the Board of Governors, as
applicable, such property and provide to the Office of the
Comptroller of the Currency, the Corporation, or the Board of
Governors, as applicable, such administrative services as the
Office of the Comptroller of the Currency, the Corporation, and
the Board of Governors jointly determine to be necessary under
subsection (a).

(c) Notice Required.--The Office of the Comptroller of the Currency,
the Corporation, and the Board of Governors shall jointly give the
Office of Thrift Supervision reasonable prior notice of any request that
the Office of the Comptroller of the Currency, the Corporation, and the
Board of Governors jointly intend to make under subsection (b).
SEC. 322. <> TRANSFER OF EMPLOYEES.

(a) In General.--
(1) Office of thrift supervision employees.--
(A) In general.--Except as provided in section 1064,
all employees of the Office of Thrift Supervision shall
be transferred to the Office of the Comptroller of the
Currency or the Corporation for employment in accordance
with this section.
(B) Allocating employees for transfer to receiving
agencies.--The Director of the Office of Thrift
Supervision, the Comptroller of the Currency, and the
Chairperson of the Corporation shall--
(i) jointly <> determine
the number of employees of the Office of Thrift
Supervision necessary to perform or support the
functions that are transferred to the Office of
the Comptroller of the Currency or the Corporation
by this title; and
(ii) consistent with the determination under
clause (i), jointly identify employees of the
Office of Thrift Supervision for transfer to the
Office of the Comptroller of the Currency or the
Corporation.
(2) Employees transferred; service periods credited.--For
purposes of this section, periods of service with a Federal home
loan bank, a joint office of Federal home loan banks, or a
Federal reserve bank shall be credited as periods of service
with a Federal agency.
(3) Appointment authority for excepted service
transferred.--
(A) In general.--Except as provided in subparagraph
(B), any appointment authority of the Office of Thrift
Supervision under Federal law that relates to the
functions transferred under section 312, including the
regulations of the Office of Personnel Management, for
filling the positions of employees in the excepted
service shall be transferred to the Comptroller of the
Currency or the Chairperson of the Corporation, as
appropriate.
(B) Declining transfers allowed.--The Comptroller of
the Currency or the Chairperson of the Corporation may
decline to accept a transfer of authority under
subparagraph (A) (and the employees appointed under that
authority) to the extent that such authority relates to
positions excepted from the competitive service because
of their

[[Page 1530]]

confidential, policy-making, policy-determining, or
policy-advocating character.
(4) Additional appointment authority.--Notwithstanding any
other provision of law, the Office of the Comptroller of the
Currency and the Corporation may appoint transferred employees
to positions in the Office of the Comptroller of the Currency or
the Corporation, respectively.

(b) Timing of Transfers and <> Position
Assignments.--Each employee to be transferred under subsection (a)(1)
shall--
(1) be transferred not later than 90 days after the transfer
date; and
(2) receive <> notice of the position
assignment of the employee not later than 120 days after the
effective date of the transfer of the employee.

(c) Transfer of Functions.--
(1) In general.--Notwithstanding any other provision of law,
the transfer of employees under this subtitle shall be deemed a
transfer of functions for the purpose of section 3503 of title
5, United States Code.
(2) Priority.--If any provision of this subtitle conflicts
with any protection provided to a transferred employee under
section 3503 of title 5, United States Code, the provisions of
this subtitle shall control.

(d) Employee Status and Eligibility.--The transfer of functions and
employees under this subtitle, and the abolishment of the Office of
Thrift Supervision under section 313, shall not affect the status of the
transferred employees as employees of an agency of the United States
under any provision of law.
(e) Equal Status and Tenure Positions.--
(1) Status and tenure.--Each transferred employee from the
Office of Thrift Supervision shall be placed in a position at
the Office of the Comptroller of the Currency or the Corporation
with the same status and tenure as the transferred employee held
on the day before the date on which the employee was
transferred.
(2) Functions.--To the extent practicable, each transferred
employee shall be placed in a position at the Office of the
Comptroller of the Currency or the Corporation, as applicable,
responsible for the same functions and duties as the transferred
employee had on the day before the date on which the employee
was transferred, in accordance with the expertise and
preferences of the transferred employee.

(f) No Additional Certification Requirements.--An examiner who is a
transferred employee shall not be subject to any additional
certification requirements before being placed in a comparable position
at the Office of the Comptroller of the Currency or the Corporation, if
the examiner carries out examinations of the same type of institutions
as an employee of the Office of the Comptroller of the Currency or the
Corporation as the employee was responsible for carrying out before the
date on which the employee was transferred.
(g) Personnel Actions Limited.--
(1) Protection.--
(A) In general.--Except <> as
provided in paragraph (2), each affected employee shall
not, during the 30-month period beginning on the
transfer date, be involuntarily

[[Page 1531]]

separated, or involuntarily reassigned outside his or
her locality pay area.
(B) Affected employees.--
For <> purposes of this paragraph,
the term ``affected employee'' means--
(i) an employee transferred from the Office of
Thrift Supervision holding a permanent position on
the day before the transfer date; and
(ii) an employee of the Office of the
Comptroller of the Currency or the Corporation
holding a permanent position on the day before the
transfer date.
(2) Exceptions.--Paragraph (1) does not limit the right of
the Office of the Comptroller of the Currency or the Corporation
to--
(A) separate an employee for cause or for
unacceptable performance;
(B) terminate an appointment to a position excepted
from the competitive service because of its confidential
policy-making, policy-determining, or policy-advocating
character; or
(C) reassign an employee outside such employee's
locality pay area when the Office of the Comptroller of
the Currency or the Corporation determines that the
reassignment is necessary for the efficient operation of
the agency.

(h) Pay.--
(1) 30-month protection.--Except as provided in paragraph
(2), during the 30-month period beginning on the date on which
the employee was transferred under this subtitle, a transferred
employee shall be paid at a rate that is not less than the basic
rate of pay, including any geographic differential, that the
transferred employee received during the pay period immediately
preceding the date on which the employee was transferred.
Notwithstanding the preceding sentence, if the employee was
receiving a higher rate of basic pay on a temporary basis
(because of a temporary assignment, temporary promotion, or
other temporary action) immediately before the transfer, the
Agency may reduce the rate of basic pay on the date the rate
would have been reduced but for the transfer, and the protected
rate for the remainder of the 30-month period will be the
reduced rate that would have applied but for the transfer.
(2) Exceptions.--The Comptroller of the Currency or the
Corporation may reduce the rate of basic pay of a transferred
employee--
(A) for cause, including for unacceptable
performance; or
(B) with the consent of the transferred employee.
(3) Protection only while employed.--
This <> subsection shall apply to a
transferred employee only during the period that the transferred
employee remains employed by Office of the Comptroller of the
Currency or the Corporation.
(4) Pay increases permitted.--Nothing in this subsection
shall limit the authority of the Comptroller of the Currency or
the Chairperson of the Corporation to increase the pay of a
transferred employee.

(i) Benefits.--
(1) Retirement benefits for transferred employees.--

[[Page 1532]]

(A) In general.--
(i) Continuation of existing retirement
plan.--Each transferred employee shall remain
enrolled in the retirement plan of the transferred
employee, for as long as the transferred employee
is employed by the Office of the Comptroller of
the Currency or the Corporation.
(ii) Employer's contribution.--The Comptroller
of the Currency or the Chairperson of the
Corporation, as appropriate, shall pay any
employer contributions to the existing retirement
plan of each transferred employee, as required
under each such existing retirement plan.
(B) Definition.--In this paragraph, the term
``existing retirement plan'' means, with respect to a
transferred employee, the retirement plan (including the
Financial Institutions Retirement Fund), and any
associated thrift savings plan, of the agency from which
the employee was transferred in which the employee was
enrolled on the day before the date on which the
employee was transferred.
(2) Benefits other than retirement benefits.--
(A) During first year.--
(i) Existing <> plans
continue.--During the 1-year period following the
transfer date, each transferred employee may
retain membership in any employee benefit program
(other than a retirement benefit program) of the
agency from which the employee was transferred
under this title, including any dental, vision,
long term care, or life insurance program to which
the employee belonged on the day before the
transfer date.
(ii) Employer's contribution.--The Office of
the Comptroller of the Currency or the
Corporation, as appropriate, shall pay any
employer cost required to extend coverage in the
benefit program to the transferred employee as
required under that program or negotiated
agreements.
(B) Dental, vision, or life insurance after first
year.--If, <> after the 1-year
period beginning on the transfer date, the Office of the
Comptroller of the Currency or the Corporation
determines that the Office of the Comptroller of the
Currency or the Corporation, as the case may be, will
not continue to participate in any dental, vision, or
life insurance program of an agency from which an
employee was transferred, a transferred employee who is
a member of the program may, before the decision takes
effect and without regard to any regularly scheduled
open season, elect to enroll in--
(i) the enhanced dental benefits program
established under chapter 89A of title 5, United
States Code;
(ii) the enhanced vision benefits established
under chapter 89B of title 5, United States Code;
and
(iii) the Federal Employees' Group Life
Insurance Program established under chapter 87 of
title 5, United States Code, without regard to any
requirement of insurability.

[[Page 1533]]

(C) Long term care insurance after 1st year.--
If, <> after the 1-year period
beginning on the transfer date, the Office of the
Comptroller of the Currency or the Corporation
determines that the Office of the Comptroller of the
Currency or the Corporation, as appropriate, will not
continue to participate in any long term care insurance
program of an agency from which an employee transferred,
a transferred employee who is a member of such a program
may, before the decision takes effect, elect to apply
for coverage under the Federal Long Term Care Insurance
Program established under chapter 90 of title 5, United
States Code, under the underwriting requirements
applicable to a new active workforce member, as
described in part 875 of title 5, Code of Federal
Regulations (or any successor thereto).
(D) Contribution of transferred employee.--
(i) In general.--Subject to clause (ii), a
transferred employee who is enrolled in a plan
under the Federal Employees Health Benefits
Program shall pay any employee contribution
required under the plan.
(ii) Cost differential.--The Office of the
Comptroller of the Currency or the Corporation, as
applicable, shall pay any difference in cost
between the employee contribution required under
the plan provided to transferred employees by the
agency from which the employee transferred on the
date of enactment of this Act and the plan
provided by the Office of the Comptroller of the
Currency or the Corporation, as the case may be,
under this section.
(iii) Funds transfer.--The Office of the
Comptroller of the Currency or the Corporation, as
the case may be, shall transfer to the Employees
Health Benefits Fund established under section
8909 of title 5, United States Code, an amount
determined by the Director of the Office of
Personnel Management, after consultation with the
Comptroller of the Currency or the Chairperson of
the Corporation, as the case may be, and the
Office of Management and Budget, to be necessary
to reimburse the Fund for the cost to the Fund of
providing any benefits under this subparagraph
that are not otherwise paid for by a transferred
employee under clause (i).
(E) Special provisions to ensure continuation of
life insurance benefits.--
(i) In general.--An annuitant, as defined in
section 8901 of title 5, United States Code, who
is enrolled in a life insurance plan administered
by an agency from which employees are transferred
under this title on the day before the transfer
date shall be eligible for coverage by a life
insurance plan under sections 8706(b), 8714a,
8714b, or 8714c of title 5, United States Code, or
by a life insurance plan established by the Office
of the Comptroller of the Currency or the
Corporation, as applicable, without regard to any
regularly scheduled open season or any requirement
of insurability.
(ii) Contribution of transferred employee.--

[[Page 1534]]

(I) In general.--Subject to
subclause (II), a transferred employee
enrolled in a life insurance plan under
this subparagraph shall pay any employee
contribution required by the plan.
(II) Cost differential.--The Office
of the Comptroller of the Currency or
the Corporation, as the case may be,
shall pay any difference in cost between
the benefits provided by the agency from
which the employee transferred on the
date of enactment of this Act and the
benefits provided under this section.
(III) Funds transfer.--The Office of
the Comptroller of the Currency or the
Corporation, as the case may be, shall
transfer to the Federal Employees' Group
Life Insurance Fund established under
section 8714 of title 5, United States
Code, an amount determined by the
Director of the Office of Personnel
Management, after consultation with the
Comptroller of the Currency or the
Chairperson of the Corporation, as the
case may be, and the Office of
Management and Budget, to be necessary
to reimburse the Federal Employees'
Group Life Insurance Fund for the cost
to the Federal Employees' Group Life
Insurance Fund of providing benefits
under this subparagraph not otherwise
paid for by a transferred employee under
subclause (I).
(IV) Credit for time enrolled in
other plans.--For any transferred
employee, enrollment in a life insurance
plan administered by the agency from
which the employee transferred,
immediately before enrollment in a life
insurance plan under chapter 87 of title
5, United States Code, shall be
considered as enrollment in a life
insurance plan under that chapter for
purposes of section 8706(b)(1)(A) of
title 5, United States Code.

(j) Incorporation Into Agency Pay System.--
Not <> later than 30 months after the transfer date,
the Comptroller of the Currency and the Chairperson of the Corporation
shall place each transferred employee into the established pay system
and structure of the appropriate employing agency.

(k) Equitable Treatment.--In administering the provisions of this
section, the Comptroller of the Currency and the Chairperson of the
Corporation--
(1) may not take any action that would unfairly disadvantage
a transferred employee relative to any other employee of the
Office of the Comptroller of the Currency or the Corporation on
the basis of prior employment by the Office of Thrift
Supervision;
(2) may take such action as is appropriate in an individual
case to ensure that a transferred employee receives equitable
treatment, with respect to the status, tenure, pay, benefits
(other than benefits under programs administered by the Office
of Personnel Management), and accrued leave or vacation time for
prior periods of service with any Federal agency of the
transferred employee;

[[Page 1535]]

(3) shall, <> jointly with the Director
of the Office of Thrift Supervision, develop and adopt
procedures and safeguards designed to ensure that the
requirements of this subsection are met; and
(4) shall <> conduct a study detailing the
position assignments of all employees transferred pursuant to
subsection (a), describing the procedures and safeguards adopted
pursuant to paragraph (3), and demonstrating that the
requirements of this subsection have been met;
and <> shall, not later than 365 days after the
transfer date, submit a copy of such study to Congress.

(l) Reorganization.--
(1) In general.--If <> the Comptroller
of the Currency or the Chairperson of the Corporation
determines, during the 2-year period beginning 1 year after the
transfer date, that a reorganization of the staff of the Office
of the Comptroller of the Currency or the Corporation,
respectively, is required, the reorganization shall be deemed a
``major reorganization'' for purposes of affording affected
employees retirement under section 8336(d)(2) or 8414(b)(1)(B)
of title 5, United States Code.
(2) Service credit.--For purposes of this subsection,
periods of service with a Federal home loan bank or a joint
office of Federal home loan banks shall be credited as periods
of service with a Federal agency.
SEC. 323. <> PROPERTY TRANSFERRED.

(a) Property Defined.--For purposes of this section, the term
``property'' includes all real property (including leaseholds) and all
personal property, including computers, furniture, fixtures, equipment,
books, accounts, records, reports, files, memoranda, paper, reports of
examination, work papers, and correspondence related to such reports,
and any other information or materials.
(b) Property of the Office of Thrift Supervision.--
(1) In general.--No <> later than 90 days
after the transfer date, all property of the Office of Thrift
Supervision (other than property described under paragraph
(b)(2)) that the Comptroller of the Currency and the Chairperson
of the Corporation jointly determine is used, on the day before
the transfer date, to perform or support the functions of the
Office of Thrift Supervision transferred to the Office of the
Comptroller of the Currency or the Corporation under this title,
shall be transferred to the Office of the Comptroller of the
Currency or the Corporation in a manner consistent with the
transfer of employees under this subtitle.
(2) Personal property.--All books, accounts, records,
reports, files, memoranda, papers, documents, reports of
examination, work papers, and correspondence of the Office of
Thrift Supervision that the Comptroller of the Currency, the
Chairperson of the Corporation, and the Chairman of the Board of
Governors jointly determine is used, on the day before the
transfer date, to perform or support the functions of the Office
of Thrift Supervision transferred to the Board of Governors
under this title shall be transferred to the Board of Governors
in a manner consistent with the purposes of this title.

(c) Contracts Related to Property Transferred.--Each contract,
agreement, lease, license, permit, and similar arrangement

[[Page 1536]]

relating to property transferred to the Office of the Comptroller of the
Currency or the Corporation by this section shall be transferred to the
Office of the Comptroller of the Currency or the Corporation, as
appropriate, together with the property to which it relates.
(d) Preservation of Property.--Property identified for transfer
under this section shall not be altered, destroyed, or deleted before
transfer under this section.
SEC. 324. <> FUNDS TRANSFERRED.

The funds that, on the day before the transfer date, the Director of
the Office of Thrift Supervision (in consultation with the Comptroller
of the Currency, the Chairperson of the Corporation, and the Chairman of
the Board of Governors) determines are not necessary to dispose of the
affairs of the Office of Thrift Supervision under section 325 and are
available to the Office of Thrift Supervision to pay the expenses of the
Office of Thrift Supervision--
(1) relating to the functions of the Office of Thrift
Supervision transferred under section 312(b)(2)(B), shall be
transferred to the Office of the Comptroller of the Currency on
the transfer date;
(2) relating to the functions of the Office of Thrift
Supervision transferred under section 312(b)(2)(C), shall be
transferred to the Corporation on the transfer date; and
(3) relating to the functions of the Office of Thrift
Supervision transferred under section 312(b)(1)(A), shall be
transferred to the Board of Governors on the transfer date.
SEC. 325. <> DISPOSITION OF
AFFAIRS.

(a) Authority of Director.--During the 90-day period beginning on
the transfer date, the Director of the Office of Thrift Supervision--
(1) shall, solely for the purpose of winding up the affairs
of the Office of Thrift Supervision relating to any function
transferred to the Office of the Comptroller of the Currency,
the Corporation, or the Board of Governors under this title--
(A) manage the employees of the Office of Thrift
Supervision who have not yet been transferred and
provide for the payment of the compensation and benefits
of the employees that accrue before the date on which
the employees are transferred under this title; and
(B) manage any property of the Office of Thrift
Supervision, until the date on which the property is
transferred under section 323; and
(2) may take any other action necessary to wind up the
affairs of the Office of Thrift Supervision.

(b) Status of Director.--
(1) In general.--Notwithstanding the transfer of functions
under this subtitle, during the 90-day period beginning on the
transfer date, the Director of the Office of Thrift Supervision
shall retain and may exercise any authority vested in the
Director of the Office of Thrift Supervision on the day before
the transfer date, only to the extent necessary--
(A) to wind up the Office of Thrift Supervision; and
(B) to carry out the transfer under this subtitle
during such 90-day period.

[[Page 1537]]

(2) Other provisions.--For purposes of paragraph (1), the
Director of the Office of Thrift Supervision shall, during the
90-day period beginning on the transfer date, continue to be--
(A) treated as an officer of the United States; and
(B) entitled to receive compensation at the same
annual rate of basic pay that the Director of the Office
of Thrift Supervision received on the day before the
transfer date.
SEC. 326. <> CONTINUATION OF SERVICES.

Any agency, department, or other instrumentality of the United
States, and any successor to any such agency, department, or
instrumentality, that was, before the transfer date, providing support
services to the Office of Thrift Supervision in connection with
functions transferred to the Office of the Comptroller of the Currency,
the Corporation or the Board of Governors under this title, shall--
(1) continue to provide such services, subject to
reimbursement by the Office of the Comptroller of the Currency,
the Corporation, or the Board of Governors, until the transfer
of functions under this title is complete; and
(2) consult <> with the Comptroller of
the Currency, the Chairperson of the Corporation, or the
Chairman of the Board of Governors, as appropriate, to
coordinate and facilitate a prompt and orderly transition.
SEC. 327. <> IMPLEMENTATION PLAN AND REPORTS.

(a) Plan Submission.--Within 180 days of the enactment of the Dodd-
Frank Wall Street Reform and Consumer Protection Act, the Board of
Governors, the Corporation, the Office of the Comptroller of the
Currency, and the Office of Thrift Supervision, shall jointly submit a
plan to the Committee on Banking, Housing, and Urban Affairs of the
Senate, the Committee on Financial Services of the House of
Representatives, and the Inspectors General of the Department of the
Treasury, the Corporation, and the Board of Governors detailing the
steps the Board of Governors, the Corporation, the Office of the
Comptroller of the Currency, and the Office of Thrift Supervision will
take to implement the provisions of sections 301 through 326, and the
provisions of the amendments made by such sections.
(b) Inspectors General Review of the Plan.--Within 60 days of
receiving the plan required under subsection (a), the Inspectors General
of the Department of the Treasury, the Corporation, and the Board of
Governors shall jointly provide a written report to the Board of
Governors, the Corporation, the Office of the Comptroller of the
Currency, and the Office of Thrift Supervision and shall submit a copy
to the Committee on Banking, Housing, and Urban Affairs of the Senate
and the Committee on Financial Services of the House of Representatives
detailing whether the plan conforms with the provisions of sections 301
through 326, and the provisions of the amendments made by such sections,
including--
(1) whether the plan sufficiently takes into consideration
the orderly transfer of personnel;
(2) whether the plan describes procedures and safeguards to
ensure that the Office of Thrift Supervision employees are not
unfairly disadvantaged relative to employees of the Office of
the Comptroller of the Currency and the Corporation;

[[Page 1538]]

(3) whether the plan sufficiently takes into consideration
the orderly transfer of authority and responsibilities;
(4) whether the plan sufficiently takes into consideration
the effective transfer of funds;
(5) whether the plan sufficiently takes in consideration the
orderly transfer of property; and
(6) any additional recommendations for an orderly and
effective process.

(c) Implementation Reports.--Not later than 6 months after the date
on which the Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the House of
Representatives receives the report required under subsection (b), and
every 6 months thereafter until all aspects of the plan have been
implemented, the Inspectors General of the Department of the Treasury,
the Corporation, and the Board of Governors shall jointly provide a
written report on the status of the implementation of the plan to the
Board of Governors, the Corporation, the Office of the Comptroller of
the Currency, and the Office of Thrift Supervision and shall submit a
copy to the Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the House of
Representatives.

Subtitle C--Federal Deposit Insurance Corporation

SEC. 331. DEPOSIT INSURANCE REFORMS.

(a) Size Distinctions.--Section 7(b)(2) of the Federal Deposit
Insurance Act (12 U.S.C. 1817(b)(2)) is amended--
(1) by striking subparagraph (D); and
(2) by redesignating subparagraph (C) as subparagraph (D).

(b) Assessment <> Base.--The Corporation
shall amend the regulations issued by the Corporation under section
7(b)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2)) to
define the term ``assessment base'' with respect to an insured
depository institution for purposes of that section 7(b)(2), as an
amount equal to--
(1) the average consolidated total assets of the insured
depository institution during the assessment period; minus
(2) the sum of--
(A) the average tangible equity of the insured
depository institution during the assessment period; and
(B) in the case of an insured depository institution
that is a custodial bank (as defined by the Corporation,
based on factors including the percentage of total
revenues generated by custodial businesses and the level
of assets under custody) or a banker's bank (as that
term is used in section 5136 of the Revised Statutes (12
U.S.C. 24)), an amount that the Corporation determines
is necessary to establish assessments consistent with
the definition under section 7(b)(1) of the Federal
Deposit Insurance Act (12 U.S.C. 1817(b)(1)) for a
custodial bank or a banker's bank.

[[Page 1539]]

SEC. 332. ELIMINATION OF PROCYCLICAL ASSESSMENTS.

Section 7(e) of the Federal Deposit Insurance Act <> is amended--
(1) in paragraph (2)--
(A) by amending subparagraph (B) to read as follows:
``(B) Limitation.--The Board of Directors may, in
its sole discretion, suspend or limit the declaration of
payment of dividends under subparagraph (A).'';
(B) by amending subparagraph (C) to read as follows:
``(C) Notice and <> opportunity
for comment.--The Corporation shall prescribe, by
regulation, after notice and opportunity for comment,
the method for the declaration, calculation,
distribution, and payment of dividends under this
paragraph''; and
(C) by striking subparagraphs (D) through (G); and
(2) in paragraph (4)(A) by striking ``paragraphs (2)(D)
and'' and inserting ``paragraphs (2) and''.
SEC. 333. ENHANCED ACCESS TO INFORMATION FOR DEPOSIT INSURANCE
PURPOSES.

(a) Section 7(a)(2)(B) of the Federal Deposit Insurance Act is
amended by striking ``agreement'' and inserting ``consultation''.
(b) Section 7(b)(1)(E) of the Federal Deposit Insurance Act is
amended--
(1) in clause (i), by striking ``such as'' and inserting
``including''; and
(2) in clause (iii), by striking ``Corporation'' and
inserting ``Corporation, except as provided in section
7(a)(2)(B)''.
SEC. 334. TRANSITION RESERVE RATIO REQUIREMENTS TO REFLECT NEW
ASSESSMENT BASE.

(a) Section 7(b)(3)(B) of the Federal Deposit Insurance Act is
amended to read as follows:
``(B) Minimum reserve ratio.--The reserve ratio
designated by the Board of Directors for any year may
not be less than 1.35 percent of estimated insured
deposits, or the comparable percentage of the assessment
base set forth in paragraph (2)(C).''.

(b) Section 3(y)(3) of the <> Federal Deposit
Insurance Act is amended by inserting ``, or such comparable percentage
of the assessment base set forth in section 7(b)(2)(C)'' before the
period.

(c) For a <> period of not less than 5 years after the date of the enactment
of this title, the Federal Deposit Insurance Corporation shall make
available to the public the reserve ratio and the designated reserve
ratio using both estimated insured deposits and the assessment base
under section 7(b)(2)(C) of the Federal Deposit Insurance Act.

(d) Reserve Ratio.--Notwithstanding the timing requirements of
section 7(b)(3)(E)(ii) of the Federal Deposit Insurance Act, the
Corporation shall take such steps as may be necessary for the reserve
ratio of the Deposit Insurance Fund to reach 1.35 percent of estimated
insured deposits by September 30, 2020.
(e) Offset.--In setting the assessments necessary to meet the
requirements of subsection (d), the Corporation shall offset the effect
of subsection (d) on insured depository institutions with total
consolidated assets of less than $10,000,000,000.

[[Page 1540]]

SEC. 335. PERMANENT INCREASE IN DEPOSIT AND SHARE INSURANCE.

(a) Permanent Increase in Deposit Insurance.--Section 11(a)(1)(E) of
the Federal Deposit Insurance Act (12 U.S.C. 1821(a)(1)(E)) is amended--
(1) by striking ``$100,000'' and inserting ``$250,000''; and
(2) by adding at the end the following new sentences:
``Notwithstanding any other provision of law, the increase in
the standard maximum deposit insurance amount to $250,000 shall
apply to depositors in any institution for which the Corporation
was appointed as receiver or conservator on or after January 1,
2008, and before October 3, 2008. The Corporation shall take
such actions as are necessary to carry out the requirements of
this section with respect to such depositors, without regard to
any time limitations under this Act. In implementing this and
the preceding 2 sentences, any payment on a deposit claim made
by the Corporation as receiver or conservator to a depositor
above the standard maximum deposit insurance amount in effect at
the time of the appointment of the Corporation as receiver or
conservator shall be deemed to be part of the net amount due to
the depositor under subparagraph (B).''

(b) Permanent Increase in Share Insurance.--Section 207(k)(5) of the
Federal Credit Union Act (12 U.S.C. 1787(k)(5)) is amended by striking
``$100,000'' and inserting ``$250,000''.
SEC. 336. MANAGEMENT OF THE FEDERAL DEPOSIT INSURANCE CORPORATION.

(a) In General.--Section 2 of the Federal Deposit Insurance Act (12
U.S.C. 1812) is amended--
(1) in subsection (a)(1)(B), by striking ``Director of the
Office of Thrift Supervision'' and inserting ``Director of the
Consumer Financial Protection Bureau'';
(2) by amending subsection (d)(2) to read as follows:
``(2) Acting officials may serve.--In the event of a vacancy
in the office of the Comptroller of the Currency or the office
of Director of the Consumer Financial Protection Bureau and
pending the appointment of a successor, or during the absence or
disability of the Comptroller of the Currency or the Director of
the Consumer Financial Protection Bureau, the acting Comptroller
of the Currency or the acting Director of the Consumer Financial
Protection Bureau, as the case may be, shall be a member of the
Board of Directors in the place of the Comptroller or
Director.''; and
(3) in subsection (f)(2), by striking ``Office of Thrift
Supervision'' and inserting ``Consumer Financial Protection
Bureau''.

(b) Effective <> Date.--This section, and
the amendments made by this section, shall take effect on the transfer
date.

Subtitle D--Other Matters

SEC. <> 341. BRANCHING.

Notwithstanding the Federal Deposit Insurance Act (12 U.S.C. 1811 et
seq.), the Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.), or
any other provision of Federal or State law, a savings association that
becomes a bank may--

[[Page 1541]]

(1) continue to operate any branch or agency that the
savings association operated immediately before the savings
association became a bank; and
(2) establish, acquire, and operate additional branches and
agencies at any location within any State in which the savings
association operated a branch immediately before the savings
association became a bank, if the law of the State in which the
branch is located, or is to be located, would permit
establishment of the branch if the bank were a State bank
chartered by such State.
SEC. 342. <> OFFICE OF MINORITY AND WOMEN
INCLUSION.

(a) Office of Minority and Women Inclusion.--
(1) <>  Establishment.--
(A) In general.--Except as provided in subparagraph
(B), not later than 6 months after the date of enactment
of this Act, each agency shall establish an Office of
Minority and Women Inclusion that shall be responsible
for all matters of the agency relating to diversity in
management, employment, and business activities.
(B) Bureau.--The Bureau shall establish an Office of
Minority and Women Inclusion not later than 6 months
after the designated transfer date established under
section 1062.
(2) Transfer of responsibilities.--Each agency that, on the
day before the date of enactment of this Act, assigned the
responsibilities described in paragraph (1) (or comparable
responsibilities) to another office of the agency shall ensure
that such responsibilities are transferred to the Office.
(3) Duties with respect to civil rights laws.--The
responsibilities described in paragraph (1) do not include
enforcement of statutes, regulations, or executive orders
pertaining to civil rights, except each Director shall
coordinate with the agency administrator, or the designee of the
agency administrator, regarding the design and implementation of
any remedies resulting from violations of such statutes,
regulations, or executive orders.

(b) Director.--
(1) In general.--The Director of each Office shall be
appointed by, and shall report to, the agency administrator. The
position of Director shall be a career reserved position in the
Senior Executive Service, as that position is defined in section
3132 of title 5, United States Code, or an equivalent
designation.
(2) Duties.--Each <> Director shall
develop standards for--
(A) equal employment opportunity and the racial,
ethnic, and gender diversity of the workforce and senior
management of the agency;
(B) increased participation of minority-owned and
women-owned businesses in the programs and contracts of
the agency, including standards for coordinating
technical assistance to such businesses; and
(C) assessing the diversity policies and practices
of entities regulated by the agency.
(3) Other duties.--Each Director shall advise the agency
administrator on the impact of the policies and regulations of
the agency on minority-owned and women-owned businesses.

[[Page 1542]]

(4) Rule of construction.--Nothing in paragraph (2)(C) may
be construed to mandate any requirement on or otherwise affect
the lending policies and practices of any regulated entity, or
to require any specific action based on the findings of the
assessment.

(c) Inclusion in All Levels of Business Activities.--
(1) In general.--
The <> Director of each Office
shall develop and implement standards and procedures to ensure,
to the maximum extent possible, the fair inclusion and
utilization of minorities, women, and minority-owned and women-
owned businesses in all business and activities of the agency at
all levels, including in procurement, insurance, and all types
of contracts.
(2) Contracts.--The procedures established by each agency
for review and evaluation of contract proposals and for hiring
service providers shall include, to the extent consistent with
applicable law, a component that gives consideration to the
diversity of the applicant. Such procedure shall include a
written statement, in a form and with such content as the
Director shall prescribe, that a contractor shall ensure, to the
maximum extent possible, the fair inclusion of women and
minorities in the workforce of the contractor and, as
applicable, subcontractors.
(3) Termination.--
(A) Determination.--The standards and procedures
developed and implemented under this subsection shall
include a procedure for the Director to make a
determination whether an agency contractor, and, as
applicable, a subcontractor has failed to make a good
faith effort to include minorities and women in their
workforce.
(B) Effect of determination.--
(i) Recommendation to agency administrator.--
Upon a determination described in subparagraph
(A), the Director shall make a recommendation to
the agency administrator that the contract be
terminated.
(ii) Action by agency administrator.--Upon
receipt of a recommendation under clause (i), the
agency administrator may--
(I) terminate the contract;
(II) make a referral to the Office
of Federal Contract Compliance Programs
of the Department of Labor; or
(III) take other appropriate action.

(d) Applicability.--This section shall apply to all contracts of an
agency for services of any kind, including the services of financial
institutions, investment banking firms, mortgage banking firms, asset
management firms, brokers, dealers, financial services entities,
underwriters, accountants, investment consultants, and providers of
legal services. The contracts referred to in this subsection include all
contracts for all business and activities of an agency, at all levels,
including contracts for the issuance or guarantee of any debt, equity,
or security, the sale of assets, the management of the assets of the
agency, the making of equity investments by the agency, and the
implementation by the agency of programs to address economic recovery.

[[Page 1543]]

(e) Reports.--Each Office shall submit to Congress an annual report
regarding the actions taken by the agency and the Office pursuant to
this section, which shall include--
(1) a statement of the total amounts paid by the agency to
contractors since the previous report;
(2) the percentage of the amounts described in paragraph (1)
that were paid to contractors described in subsection (c)(1);
(3) the successes achieved and challenges faced by the
agency in operating minority and women outreach programs;
(4) the challenges the agency may face in hiring qualified
minority and women employees and contracting with qualified
minority-owned and women-owned businesses; and
(5) any other information, findings, conclusions, and
recommendations for legislative or agency action, as the
Director determines appropriate.

(f) Diversity in Agency Workforce.--Each agency shall take
affirmative steps to seek diversity in the workforce of the agency at
all levels of the agency in a manner consistent with applicable law.
Such steps shall include--
(1) recruiting at historically black colleges and
universities, Hispanic-serving institutions, women's colleges,
and colleges that typically serve majority minority populations;
(2) sponsoring and recruiting at job fairs in urban
communities;
(3) placing employment advertisements in newspapers and
magazines oriented toward minorities and women;
(4) partnering with organizations that are focused on
developing opportunities for minorities and women to place
talented young minorities and women in industry internships,
summer employment, and full-time positions;
(5) where feasible, partnering with inner-city high schools,
girls' high schools, and high schools with majority minority
populations to establish or enhance financial literacy programs
and provide mentoring; and
(6) any other mass media communications that the Office
determines necessary.

(g) Definitions.--For <> purposes of this
section, the following definitions shall apply:
(1) Agency.--The term ``agency'' means--
(A) the Departmental Offices of the Department of
the Treasury;
(B) the Corporation;
(C) the Federal Housing Finance Agency;
(D) each of the Federal reserve banks;
(E) the Board;
(F) the National Credit Union Administration;
(G) the Office of the Comptroller of the Currency;
(H) the Commission; and
(I) the Bureau.
(2) Agency administrator.--The term ``agency administrator''
means the head of an agency.
(3) Minority.--The term ``minority'' has the same meaning as
in section 1204(c) of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (12 U.S.C. 1811 note).
(4) Minority-owned business.--The term ``minority-owned
business'' has the same meaning as in section 21A(r)(4)(A)

[[Page 1544]]

of the Federal Home Loan Bank Act (12 U.S.C. 1441a(r)(4)(A)), as
in effect on the day before the transfer date.
(5) Office.--The term ``Office'' means the Office of
Minority and Women Inclusion established by an agency under
subsection (a).
(6) Women-owned business.--The term ``women-owned business''
has the meaning given the term ``women's business'' in section
21A(r)(4)(B) of the Federal Home Loan Bank Act (12 U.S.C.
1441a(r)(4)(B)), as in effect on the day before the transfer
date.
SEC. 343. INSURANCE OF TRANSACTION ACCOUNTS.

(a) Banks and Savings Associations.--
(1) Amendments.--Section 11(a)(1) of the Federal Deposit
Insurance Act (12 U.S.C. 1821(a)(1)) is amended--
(A) in subparagraph (B)--
(i) by striking ``The net amount'' and
inserting the following:
``(i) In general.--Subject to clause (ii), the
net amount''; and
(ii) by adding at the end the following new
clauses:
``(ii) Insurance for noninterest-bearing
transaction accounts.--Notwithstanding clause (i),
the Corporation shall fully insure the net amount
that any depositor at an insured depository
institution maintains in a noninterest-bearing
transaction account. Such amount shall not be
taken into account when computing the net amount
due to such depositor under clause (i).
``(iii) Noninterest-bearing transaction
account defined.--For purposes of this
subparagraph, the term `noninterest-bearing
transaction account' means a deposit or account
maintained at an insured depository institution--
``(I) with respect to which interest
is neither accrued nor paid;
``(II) on which the depositor or
account holder is permitted to make
withdrawals by negotiable or
transferable instrument, payment orders
of withdrawal, telephone or other
electronic media transfers, or other
similar items for the purpose of making
payments or transfers to third parties
or others; and
``(III) on which the insured
depository institution does not reserve
the right to require advance notice of
an intended withdrawal.''; and
(B) in subparagraph (C), by striking ``subparagraph
(B)'' and inserting ``subparagraph (B)(i)''.
(2) Effective date.--The <> amendments made by paragraph (1) shall take effect on
December 31, 2010.
(3) Prospective <> repeal.--Effective January 1, 2013, section 11(a)(1) of
the Federal Deposit Insurance Act (12 U.S.C. 1821(a)(1)), as
amended by paragraph (1), is amended--
(A) in subparagraph (B)--
(i) by striking ``deposit.--'' and all that
follows through ``clause (ii), the net amount''
and insert ``deposit.--The net amount''; and

[[Page 1545]]

(ii) by striking clauses (ii) and (iii); and
(B) in subparagraph (C), by striking ``subparagraph
(B)(i)'' and inserting ``subparagraph (B)''.

(b) Credit Unions.--
(1) Amendments.--Section 207(k)(1) of the Federal Credit
Union Act (12 U.S.C. 1787(k)(1)) is amended--
(A) in subparagraph (A)--
(i) by striking ``Subject to the provisions of
paragraph (2), the net amount'' and inserting the
following:
``(i) Net amount of insurance payable.--
Subject to clause (ii) and the provisions of
paragraph (2), the net amount''; and
(ii) by adding at the end the following new
clauses:
``(ii) Insurance for noninterest-bearing
transaction accounts.--Notwithstanding clause (i),
the Board shall fully insure the net amount that
any member or depositor at an insured credit union
maintains in a noninterest-bearing transaction
account. Such amount shall not be taken into
account when computing the net amount due to such
member or depositor under clause (i).
``(iii) Noninterest-bearing transaction
account defined.--For purposes of this
subparagraph, the term `noninterest-bearing
transaction account' means an account or deposit
maintained at an insured credit union--
``(I) with respect to which interest
is neither accrued nor paid;
``(II) on which the account holder
or depositor is permitted to make
withdrawals by negotiable or
transferable instrument, payment orders
of withdrawal, telephone or other
electronic media transfers, or other
similar items for the purpose of making
payments or transfers to third parties
or others; and
``(III) on which the insured credit
union does not reserve the right to
require advance notice of an intended
withdrawal.''; and
(B) in subparagraph (B), by striking ``subparagraph
(A)'' and inserting ``subparagraph (A)(i)''.
(2) Effective <> date.--The
amendments made by paragraph (1) shall take effect upon the date
of the enactment of this Act
(3) Prospective <> repeal.--Effective January 1, 2013, section 207(k)(1) of
the Federal Credit Union Act (12 U.S.C. 1787(k)(1)), as amended
by paragraph (1), is amended--
(A) in subparagraph (A)--
(i) by striking ``(i) net amount of insurance
payable.--'' and all that follows through
``paragraph (2), the net amount'' and inserting
``Subject to the provisions of paragraph (2), the
net amount''; and
(ii) by striking clauses (ii) and (iii); and
(B) in subparagraph (B), by striking ``subparagraph
(A)(i)'' and inserting ``subparagraph (A)''.

[[Page 1546]]

Subtitle E--Technical and Conforming Amendments

SEC. 351. <> EFFECTIVE DATE.

Except as provided in section 364(a), the amendments made by this
subtitle shall take effect on the transfer date.
SEC. 352. BALANCED BUDGET AND EMERGENCY DEFICIT CONTROL ACT OF
1985.

Section 256(h) of the Balanced Budget and Emergency Deficit Control
Act of 1985 (2 U.S.C. 906(h)) is amended--
(1) in paragraph (4), by striking subparagraphs (C) and (G);
and
(2) by redesignating subparagraphs (D), (E), (F), and (H) as
subparagraphs (C), (D), (E), and (F), respectively.
SEC. 353. BANK ENTERPRISE ACT OF 1991.

Section 232(a) of the Bank Enterprise Act of 1991 (12 U.S.C.
1834(a)) is amended--
(1) in the subsection heading, by striking ``by Federal
Reserve Board'';
(2) in paragraph (1)--
(A) by striking ``The Board of Governors of the
Federal Reserve System,'' and inserting ``The
Comptroller of the Currency''; and
(B) by striking ``section 7(b)(2)(H)'' and inserting
``section 7(b)(2)(E)'';
(3) in paragraph (2)(A), by striking ``Board'' and inserting
``Comptroller''; and
(4) in paragraph (3)--
(A) by redesignating subparagraphs (A) through (C)
as subparagraphs (B) through (D), respectively; and
(B) by inserting before subparagraph (B) the
following:
``(A) Comptroller.--The <> term
`Comptroller' means the Comptroller of the Currency.''.
SEC. 354. BANK HOLDING COMPANY ACT OF 1956.

The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) is
amended--
(1) in section 2(j)(3) (12 U.S.C. 1841(j)(3)), strike
``Director of the Office of Thrift Supervision'' and inserting
``appropriate Federal banking agency'';
(2) in section 4 (12 U.S.C. 1843)--
(A) in subsection (i)--
(i) in paragraph (4)--
(I) in subparagraph (A)--
(aa) in the subparagraph
heading, by striking ``to
director''; and
(bb) by striking ``Board''
and all that follows through the
end of the subparagraph and
inserting ``Board shall solicit
comments and recommendations
from--
``(i) the Comptroller of the Currency, with
respect to the acquisition of a Federal savings
association; and

[[Page 1547]]

``(ii) the Federal Deposit Insurance
Corporation, with respect to the acquisition of a
State savings association.''.
(II) in subparagraph (B), by
striking ``Director'' each place that
term appears and inserting ``Comptroller
of the Currency or the Federal Deposit
Insurance Corporation, as applicable,'';
(ii) in paragraph (5)--
(I) in subparagraph (B), by striking
``Director with'' and inserting
``Comptroller of the Currency or the
Federal Deposit Insurance Corporation,
as applicable, with''; and
(II) by striking ``Director'' each
place that term appears and inserting
``Comptroller of the Currency or the
Federal Deposit Insurance Corporation'';
(iii) in paragraph (6), by striking
``Director'' and inserting ``Comptroller of the
Currency or the Federal Deposit Insurance
Corporation, as applicable,''; and
(iv) by striking paragraph (7); and
(3) in section 5(f) (12 U.S.C. 1844(f))--
(A) by striking ``subpena'' each place that term
appears and inserting ``subpoena'';
(B) by striking ``subpenas'' each place that term
appears and inserting ``subpoenas''; and
(C) by striking ``subpenaed'' and inserting
``subpoenaed''.
SEC. 355. BANK HOLDING COMPANY ACT AMENDMENTS OF 1970.

Section 106(b)(1) of the Bank Holding Company Act Amendments of 1970
(12 U.S.C. 1972(1)) is amended in the undesignated matter following
subparagraph (E) by inserting ``issue such regulations as are necessary
to carry out this section, and, in consultation with the Comptroller of
the Currency and the Federal Deposit Insurance Company, may'' after
``The Board may''.
SEC. 356. BANK PROTECTION ACT OF 1968.

The Bank Protection Act of 1968 (12 U.S.C. 1881 et seq.) is
amended--
(1) in section 2 (12 U.S.C. 1881), by striking ``the term''
and all that follows through the end of the section and
inserting ``the <> term `Federal supervisory
agency' means the appropriate Federal banking agency, as defined
in section 3(q) of the Federal Deposit Insurance Act (12 U.S.C.
1813(q)).'';
(2) in section 3 (12 U.S.C. 1882), by striking ``and loan''
each place that term appears; and
(3) in section 5 (12 U.S.C. 1884), by striking ``and loan''.
SEC. 357. BANK SERVICE COMPANY ACT.

The Bank Service Company Act (12 U.S.C. 1861 et seq.) is amended--
(1) in section 1(b)(4) (12 U.S.C. 1861(b)(4))--
(A) by inserting after ``an insured bank,'' the
following: ``a savings association,'';
(B) by striking ``Director of the Office of Thrift
Supervision'' and inserting ``appropriate Federal
banking agency''; and

[[Page 1548]]

(C) by striking ``, the Federal Savings and Loan
Insurance Corporation,'';
(2) in section 1(b)(5), by striking ``term `insured
depository institution' has the same meaning as in section
3(c)'' and inserting ``terms `depository institution' and
`savings association' have the same meanings as in section 3'';
and
(3) in section 7(c)(2) (12 U.S.C. 1867(c)(2)), by inserting
``each'' after ``notify''.
SEC. 358. COMMUNITY REINVESTMENT ACT OF 1977.

The Community Reinvestment Act of 1977 (12 U.S.C. 2901 et seq.) is
amended--
(1) in section 803 (12 U.S.C. 2902)--
(A) in paragraph (1)--
(i) in subparagraph (A), by inserting ``and
Federal savings associations (the deposits of
which are insured by the Federal Deposit Insurance
Corporation)'' after ``banks'';
(ii) in subparagraph (B), by striking ``and
bank holding companies'' and inserting ``, bank
holding companies, and savings and loan holding
companies''; and
(iii) in subparagraph (C), by striking ``;
and'' and inserting ``, and State savings
associations (the deposits of which are insured by
the Federal Deposit Insurance Corporation).''; and
(B) by striking paragraph (2) (relating to the
Office of Thrift Supervision), as added by section
744(q) of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989 (Public Law 101-73; 103
Stat. 440); and
(2) in <> section 806 (12
U.S.C. 2905), by inserting ``, except that the Comptroller of
the Currency shall prescribe regulations applicable to savings
associations and the Board of Governors shall prescribe
regulations applicable to insured State member banks, bank
holding companies and savings and loan holding companies,''
after ``supervisory agency''.
SEC. 359. CRIME CONTROL ACT OF 1990.

The Crime Control Act of 1990 is amended--
(1) in section 2539(c)(2) (28 U.S.C. 509 note)--
(A) by striking subparagraphs (C) and (D); and
(B) by redesignating subparagraphs (E) through (H)
as subparagraphs (C) through (G), respectively; and
(2) in section 2554(b)(2) (Public Law 101-647; 104 Stat.
4890)--
(A) in subparagraph (A), by striking ``, the
Director of the Office of Thrift Supervision,'' and
inserting ``the Comptroller of the Currency''; and
(B) in subparagraph (B), by striking ``, the
Director'' and all that follows through ``Trust
Corporation'' and inserting ``or the Federal Deposit
Insurance Corporation''.
SEC. 360. DEPOSITORY INSTITUTION MANAGEMENT INTERLOCKS ACT.

The Depository Institution Management Interlocks Act (12 U.S.C. 3201
et seq.) is amended--
(1) in section 207 (12 U.S.C. 3206)--
(A) in paragraph (1), by inserting before the comma
at the end the following: ``and Federal savings
associations

[[Page 1549]]

(the deposits of which are insured by the Federal
Deposit Insurance Corporation)'';
(B) in paragraph (2), by striking ``, and bank
holding companies'' and inserting ``, bank holding
companies, and savings and loan holding companies'';
(C) in paragraph (3), by striking ``Corporation,''
and inserting ``Corporation and State savings
associations (the deposits of which are insured by the
Federal Deposit Insurance Corporation),'';
(D) by striking paragraph (4);
(E) by redesignating paragraphs (5) and (6) as
paragraphs (4) and (5), respectively; and
(F) in paragraph (5), as so redesignated, by
striking ``through (5)'' and inserting ``through (4)'';
(2) in section 209 (12 U.S.C. 3207)--
(A) in paragraph (1), by inserting before the comma
at the end the following: ``and Federal savings
associations (the deposits of which are insured by the
Federal Deposit Insurance Corporation)'';
(B) in paragraph (2), by striking ``, and bank
holding companies'' and inserting ``, bank holding
companies, and savings and loan holding companies'';
(C) in paragraph (3), by striking ``Corporation,''
and inserting ``Corporation and State savings
associations (the deposits of which are insured by the
Federal Deposit Insurance Corporation),'';
(D) by striking paragraph (4); and
(E) by redesignating paragraph (5) as paragraph (4);
and
(3) in section 210(a) (12 U.S.C. 3208(a))--
(A) by striking ``his'' and inserting ``the''; and
(B) by inserting ``of the Attorney General'' after
``enforcement functions''.
SEC. 361. EMERGENCY HOMEOWNERS' RELIEF ACT.

Section 110 of the Emergency Homeowners' Relief Act (12 U.S.C. 2709)
is amended in the second sentence, by striking ``Home Loan Bank Board,
the Federal Savings and Loan Insurance Corporation'' and inserting
``Housing Finance Agency''.
SEC. 362. FEDERAL CREDIT UNION ACT.

The Federal Credit Union Act (12 U.S.C. 1751 et seq.) is amended--
(1) in section 107(8) (12 U.S.C. 1757(8)), by striking ``or
the Federal Savings and Loan Insurance Corporation'';
(2) in section 205 (12 U.S.C. 1785)--
(A) in subsection (b)(2)(G)(i), by striking ``the
Office of Thrift Supervision and''; and
(B) in subsection (i)(1), by striking ``or the
Federal Savings and Loan Insurance Corporation''; and
(3) in section 206(g)(7) (12 U.S.C. 1786(g)(7))--
(A) in subparagraph (A)--
(i) in clause (ii), by striking ``(b)(8)'' and
inserting ``(b)(9)'';
(ii) in clause (v)--
(I) by striking ``depository'' and
inserting ``financial''; and
(II) by adding ``and'' at the end;

[[Page 1550]]

(iii) in clause (vi)--
(I) by striking ``Board'' and
inserting ``Agency''; and
(II) by striking ``; and'' and
inserting a period; and
(iv) by striking clause (vii); and
(B) in subparagraph (D)--
(i) in clause (iii), by adding ``and'' at the
end;
(ii) in clause (iv)--
(I) by striking ``Board'' and
inserting ``Agency''; and
(II) by striking ``and'' at the end;
and
(iii) by striking clause (v).
SEC. 363. FEDERAL DEPOSIT INSURANCE ACT.

The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is
amended--
(1) in section 3 (12 U.S.C. 1813)--
(A) in subsection (b)(1)(C), by striking ``Director
of the Office of Thrift Supervision'' and inserting
``Comptroller of the Currency'';
(B) in subsection (l)(5), in the matter preceding
subparagraph (A), by striking ``Director of the Office
of Thrift Supervision,''; and
(C) in subsection (z), by striking ``the Director of
the Office of Thrift Supervision,'';
(2) in section 7 (12 U.S.C. 1817)--
(A) in subsection (a)--
(i) in paragraph (2)--
(I) in subparagraph (A)--
(aa) in the first sentence,
by striking ``the Director of
the Office of Thrift
Supervision,'';
(bb) in the second
sentence--
(AA) by striking ``the
Director of the Office of
Thrift Supervision,'' and
inserting ``to''; and
(BB) by inserting ``to''
before ``any Federal home'';
and
(cc) by striking ``Finance
Board'' each place that term
appears and inserting ``Finance
Agency''; and
(II) in subparagraph (B), by
striking ``the Comptroller of the
Currency, the Board of Governors of the
Federal Reserve System, and the Director
of the Office of Thrift Supervision,''
and inserting ``the Comptroller of the
Currency and the Board of Governors of
the Federal Reserve System,'';
(ii) in paragraph (3), in the first sentence,
by striking ``Comptroller of the Currency, the
Chairman of the Board of Governors of the Federal
Reserve System, and the Director of the Office of
Thrift Supervision.'' and inserting ``Comptroller
of the Currency, and the Chairman of the Board of
Governors of the Federal Reserve System.'';
(iii) in paragraph (6), by striking ``section
232(a)(3)(C)'' and inserting ``section
232(a)(3)(D)''; and

[[Page 1551]]

(iv) in paragraph (7), by striking ``, the
Director of the Office of Thrift Supervision,'';
and
(B) in subsection (n)--
(i) in the heading, by striking ``Director of
the Office of Thrift Supervision'' and inserting
``Comptroller of the Currency'';
(ii) in the first sentence--
(I) by striking ``the Director of
the Office of Thrift Supervision'' and
inserting ``the Comptroller of the
Currency''; and
(II) by inserting ``Federal'' before
``savings associations'';
(iii) in the third sentence, by striking ``,
the Financing Corporation, and the Resolution
Funding Corporation''; and
(iv) by striking ``the Director'' each place
that term appears and inserting ``the
Comptroller'';
(3) in section 8 (12 U.S.C. 1818)--
(A) in subsection (a)(8)(B)(ii), in the last
sentence, by striking ``Director of the Office of Thrift
Supervision'' each place that term appears and inserting
``Comptroller of the Currency'';
(B) in subsection (b)(3)--
(i) by inserting ``any savings and loan
holding company and any subsidiary (other than a
depository institution) of a savings and loan
holding company (as such terms are defined in
section 10 of Home Owners' Loan Act)), any
noninsured State member bank'' after ``Bank
Holding Company Act of 1956,''; and
(ii) by inserting ``or against a savings and
loan holding company or any subsidiary thereof
(other than a depository institution or a
subsidiary of such depository institution)''
before the period at the end;
(C) by striking paragraph (9) of subsection (b) and
inserting the following new paragraph:
``(9) [Repealed]''.
(D) in subsection (e)(7)--
(i) in subparagraph (A)--
(I) in clause (v), by inserting
``and'' after the semicolon;
(II) in clause (vi)--
(aa) by striking ``Board''
and inserting ``Agency''; and
(bb) by striking ``; and''
and inserting a period; and
(III) by striking clause (vii); and
(ii) in subparagraph (D)--
(I) in clause (iii), by inserting
``and'' after the semicolon;
(II) in clause (iv)--
(aa) by striking ``Board''
and inserting ``Agency''; and
(bb) by striking ``; and''
and inserting a period; and
(III) by striking clause (v);
(E) in subsection (j)--

[[Page 1552]]

(i) in paragraph (2), by striking ``, or as a
savings association under subsection (b)(9) of
this section'';
(ii) in paragraph (3), by inserting ``or''
after the semicolon;
(iii) in paragraph (4), by striking ``; or''
and inserting a comma; and
(iv) by striking paragraph (5);
(F) in subsection (o), by striking ``Director of the
Office of Thrift Supervision'' and inserting
``Comptroller of the Currency''; and
(G) in subsection (w)(3)(A), by striking ``and the
Office of Thrift Supervision'';
(4) in section 10 (12 U.S.C. 1820)--
(A) in subsection (d)(5), by striking ``or the
Resolution Trust Corporation'' each place that term
appears; and
(B) in subsection (k)(5)(B)--
(i) in clause (ii), by inserting ``and'' after
the semicolon;
(ii) in clause (iii), by striking ``; and''
and inserting a period; and
(iii) by striking clause (iv);
(5) in section 11 (12 U.S.C. 1821)--
(A) in subsection (c)--
(i) in paragraph (2)(A)(ii), by striking
``(other than section 21A of the Federal Home Loan
Bank Act)'';
(ii) in paragraph (4), by striking ``Except as
otherwise provided in section 21A of the Federal
Home Loan Bank Act and notwithstanding'' and
inserting ``Notwithstanding'';
(iii) in paragraph (6)--
(I) in the heading, by striking
``Director of the office of thrift
supervision'' and inserting
``Comptroller of the currency'';
(II) in subparagraph (A)--
(aa) by striking ``or the
Resolution Trust Corporation'';
and
(bb) by striking ``Director
of the Office of Thrift
Supervision'' and inserting
``Comptroller of the Currency'';
and
(III) by amending subparagraph (B)
to read as follows:
``(B) Receiver.--The Corporation may, at the
discretion of the Comptroller of the Currency, be
appointed receiver and the Corporation may accept any
such appointment.'';
(iv) in paragraph (12)(A), by striking ``or
the Resolution Trust Corporation'';
(B) in subsection (d)--
(i) in paragraph (17)(A), by striking ``or the
Director of the Office of Thrift Supervision'';
and
(ii) in paragraph (18)(B), by striking ``or
the Director of the Office of Thrift
Supervision'';
(C) in subsection (m)--
(i) in paragraph (9), by striking ``or the
Director of the Office of Thrift Supervision, as
appropriate'';

[[Page 1553]]

(ii) in paragraph (16), by striking ``or the
Director of the Office of Thrift Supervision, as
appropriate'' each place that term appears; and
(iii) in paragraph (18), by striking ``or the
Director of the Office of Thrift Supervision, as
appropriate'' each place that term appears;
(D) in subsection (n)--
(i) in paragraph (1)(A)--
(I) by striking ``, or the Director
of the Office of Thrift Supervision,
with respect to'' and inserting ``or'';
and
(II) by striking ``applicable,,''
and inserting ``applicable,'';
(ii) in paragraph (2)(A), by striking ``or the
Director of the Office of Thrift Supervision'';
(iii) in paragraph (4)(D), by striking ``and
the Director of the Office of Thrift Supervision,
as appropriate,'';
(iv) in paragraph (4)(G), by striking ``and
the Director of the Office of Thrift Supervision,
as appropriate,''; and
(v) in paragraph (12)(B)--
(I) by inserting ``as'' after
``shall appoint the Corporation'';
(II) by striking ``or the Director
of the Office of Thrift Supervision, as
appropriate,'' each place such term
appears;
(E) in subsection (p)--
(i) in paragraph (2)(B), by striking ``the
Corporation, the FSLIC Resolution Fund, or the
Resolution Trust Corporation,'' and inserting ``or
the Corporation,''; and
(ii) in paragraph (3)(B), by striking ``, the
FSLIC Resolution Fund, the Resolution Trust
Corporation,''; and
(F) in subsection (r), by striking ``and the
Resolution Trust Corporation'';
(6) in section 13(k)(1)(A)(iv) (12 U.S.C.
1823(k)(1)(A)(iv)), by striking ``Director of the Office of
Thrift Supervision'' and inserting ``Comptroller of the
Currency'';
(7) in section 18 (12 U.S.C. 1828)--
(A) in subsection (c)(2)--
(i) in subparagraph (A), by inserting ``or a
Federal savings association'' before the
semicolon;
(ii) in subparagraph (B), by adding ``and'' at
the end;
(iii) in subparagraph (C), by striking
``(except'' and all that follows through ``; and''
and inserting ``or a State savings association.'';
and
(iv) by striking subparagraph (D);
(B) in subsection (g)(1), by striking ``the Director
of the Office of Thrift Supervision''and inserting ``the
Comptroller of the Currency'';
(C) in subsection (i)(2)(C), by striking ``Director
of the Office of Thrift Supervision'' and inserting
``Corporation''; and
(D) in subsection (m)--

[[Page 1554]]

(i) in paragraph (1)--
(I) in subparagraph (A), by striking
``and the Director of the Office of
Thrift Supervision'' and inserting ``or
the Comptroller of the Currency, as
appropriate,''; and
(II) in subparagraph (B), by
striking ``and orders of the Director of
the Office of Thrift Supervision'' and
inserting ``of the Comptroller of the
Currency and orders of the Corporation
and the Comptroller of the Currency'';
(ii) in paragraph (2)--
(I) in subparagraph (A), by striking
``Director of the Office of Thrift
Supervision'' and inserting
``Comptroller of the Currency, as
appropriate,''; and
(II) in subparagraph (B)--
(aa) in the matter before
clause (i), by striking
``Director of the Office of
Thrift Supervision'' and
inserting ``Corporation or the
Comptroller of the Currency, as
appropriate,''; and
(bb) in the matter following
clause (ii)--
(AA) in the first
sentence, by striking
``Director of the Office of
Thrift Supervision'' and
inserting ``Office of the
Comptroller of the Currency,
as appropriate,''; and
(BB) by striking the
second sentence and
inserting the following:
``The Corporation or the
Comptroller of the Currency,
as appropriate, may take any
other corrective measures
with respect to the
subsidiary, including the
authority to require the
subsidiary to terminate the
activities or operations
posing such risks, as the
Corporation or the
Comptroller of the Currency,
respectively, may deem
appropriate.''; and
(iii) in paragraph (3)--
(I) in subparagraph (A), in the
second sentence--
(aa) by inserting ``, in the
case of a Federal savings
association,'' before ``consult
with''; and
(bb) by striking ``Director
of the Office of Thrift
Supervision'' and inserting
``Comptroller of the Currency'';
and
(II) in subparagraph (B)--
(aa) in the subparagraph
heading, by striking
``Director'' and inserting
``Comptroller of the currency'';
(bb) by striking ``Office of
Thrift Supervision'' and
inserting ``Comptroller of the
Currency'';
(cc) by inserting a comma
after ``soundness''; and
(dd) by inserting ``as to
Federal savings associations''
after ``compliance'';
(8) in section 19(e) (12 U.S.C. 1829(e))--

[[Page 1555]]

(A) in paragraph (1), by striking ``Director of the
Office of Thrift Supervision'' and inserting ``Board of
Governors of the Federal Reserve System''; and
(B) in paragraph (2), by striking ``Director of the
Office of Thrift Supervision'' and inserting ``Board of
Governors of the Federal Reserve System'';
(9) in section 28 (12 U.S.C. 1831e)--
(A) in subsection (e)--
(i) in paragraph (2)--
(I) in subparagraph (A)(ii), by
striking ``Director of the Office of
Thrift Supervision'' and inserting
``Comptroller of the Currency or the
Corporation, as appropriate'';
(II) in subparagraph (C), by
striking ``Director of the Office of
Thrift Supervision'' and inserting
``Comptroller of the Currency or the
Corporation, as appropriate,''; and
(III) in subparagraph (F), by
striking ``Director of the Office of
Thrift Supervision'' and inserting
``Comptroller of the Currency or the
Corporation, as appropriate''; and
(ii) in paragraph (3)--
(I) in subparagraph (A), by striking
``Director of the Office of Thrift
Supervision'' and inserting
``Comptroller of the Currency or the
Corporation, as appropriate''; and
(II) in subparagraph (B), by
striking ``Director of the Office of
Thrift Supervision'' and inserting
``Comptroller of the Currency or the
Corporation, as appropriate,''; and
(B) in subsection (h)(2), by striking ``Director of
the Office of Thrift Supervision'' and inserting
``Comptroller of the Currency, of the Corporation,'';
and
(10) in section 33(e) (12 U.S.C. 1831j(e)), by striking
``Federal Housing Finance Board, the Comptroller of the
Currency, and the Director of the Office of Thrift Supervision''
and inserting ``Federal Housing Finance Agency and the
Comptroller of the Currency''.
SEC. 364. FEDERAL HOME LOAN BANK ACT.

(a) Repeal <> of Section
18(c).--Effective 90 days after the transfer date, section 18(c) of the
Federal Home Loan Bank Act (12 U.S.C. 1438(c)) is repealed.

(b) Repeal of Section 21A.--Section 21A of the Federal Home Loan
Bank Act (12 U.S.C. 1441a) is repealed.
SEC. 365. FEDERAL HOUSING ENTERPRISES FINANCIAL SAFETY AND
SOUNDNESS ACT OF 1992.

The Federal Housing Enterprises Financial Safety and Soundness Act
of 1992 (12 U.S.C. 4501 et seq.) is amended--
(1) in section 1315(b) (12 U.S.C. 4515(b)), by striking
``the Federal Deposit Insurance Corporation, and the Office of
Thrift Supervision.'' and inserting ``and the Federal Deposit
Insurance Corporation.''; and
(2) in section 1317(c) (12 U.S.C. 4517(c)), by striking
``the Federal Deposit Insurance Corporation, or the Director of
the Office of Thrift Supervision'' and inserting ``or the
Federal Deposit Insurance Corporation''.

[[Page 1556]]

SEC. 366. FEDERAL RESERVE ACT.

The Federal Reserve Act (12 U.S.C. 221 et seq.) is amended--
(1) in section 11(a)(2) (12 U.S.C. 248(a)(2))--
(A) by inserting ``State savings associations that
are insured depository institutions (as defined in
section 3 of the Federal Deposit Insurance Act),'' after
``case of insured'';
(B) by striking ``Director of the Office of Thrift
Supervision'' and inserting ``Comptroller of the
Currency'';
(C) by inserting ``Federal'' before ``savings
association which''; and
(D) by striking ``savings and loan association'' and
inserting ``savings association''; and
(2) in section 19(b) (12 U.S.C. 461(b))--
(A) in paragraph (1)(F), by striking ``Director of
the Office of Thrift Supervision'' and inserting
``Comptroller of the Currency''; and
(B) in paragraph (4)(B), by striking ``Director of
the Office of Thrift Supervision'' and inserting
``Comptroller of the Currency''.
SEC. 367. FINANCIAL INSTITUTIONS REFORM, RECOVERY, AND ENFORCEMENT
ACT OF 1989.

The Financial Institutions Reform, Recovery, and Enforcement Act of
1989 is amended--
(1) in section 203 (12 U.S.C. 1812 note), by striking
subsection (b);
(2) in section 302(1) (12 U.S.C. 1467a note), by striking
``Director of the Office of Thrift Supervision'' and inserting
``Comptroller of the Currency'';
(3) in section 305(12 U.S.C. 1464 note), by striking
subsection (b);
(4) in section 308 (12 U.S.C. 1463 note)--
(A) in subsection (a), by striking ``Director of the
Office of Thrift Supervision'' and inserting ``Chairman
of the Board of Governors of the Federal Reserve System,
the Comptroller of the Currency, the Chairman of the
National Credit Union Administration,''; and
(B) by adding at the end the following new
subsection:

``(c) Reports.--The Secretary of the Treasury, the Chairman of the
Board of Governors of the Federal Reserve System, the Comptroller of the
Currency, the Chairman of the National Credit Union Administration, and
the Chairperson of Board of Directors of the Federal Deposit Insurance
Corporation shall each submit an annual report to the Congress
containing a description of actions taken to carry out this section.'';
(5) in section 402 (12 U.S.C. 1437 note)--
(A) in subsection (a), by striking ``Director of the
Office of Thrift Supervision'' and inserting
``Comptroller of the Currency'';
(B) by striking subsection (b);
(C) in subsection (e)--
(i) in paragraph (1), by striking ``Office of
Thrift Supervision'' and inserting ``Comptroller
of the Currency''; and
(ii) in each of paragraphs (2), (3), and (4),
by striking ``Director of the Office of Thrift
Supervision''

[[Page 1557]]

each place that term appears and inserting
``Comptroller of the Currency''; and
(D) by striking ``Federal Housing Finance Board''
each place that term appears and inserting ``Federal
Housing Finance Agency'';
(6) in section 1103(a) (12 U.S.C. 3332(a)), by striking
``and the Resolution Trust Corporation'';
(7) in section 1205(b) (12 U.S.C. 1818 note)--
(A) in paragraph (1)--
(i) by striking subparagraph (B); and
(ii) by redesignating subparagraphs (C)
through (F) as subparagraphs (B) through (E),
respectively; and
(B) in paragraph (2), by striking ``paragraph
(1)(F)'' and inserting ``paragraph (1)(E)'';
(8) in section 1206 (12 U.S.C. 1833b)--
(A) by striking ``Board, the Oversight Board of the
Resolution Trust Corporation'' and inserting ``Agency,
and''; and
(B) by striking ``, and the Office of Thrift
Supervision'';
(9) in section 1216 (12 U.S.C. 1833e)--
(A) in subsection (a)--
(i) in paragraph (3), by adding ``and'' at the
end;
(ii) in paragraph (4), by striking the
semicolon at the end and inserting a period;
(iii) by striking paragraphs (2), (5), and
(6); and
(iv) by redesignating paragraphs (3) and (4),
as paragraphs (2) and (3), respectively;
(B) in subsection (c)--
(i) by striking ``the Director of the Office
of Thrift Supervision,'' and inserting ``and'';
and
(ii) by striking ``the Thrift Depositor
Protection Oversight Board of the Resolution Trust
Corporation, and the Resolution Trust
Corporation''; and
(C) in subsection (d)--
(i) by striking paragraphs (3), (5), and (6);
and
(ii) by redesignating paragraphs (4), (7), and
(8) as paragraphs (3), (4), and (5), respectively.
SEC. 368. FLOOD DISASTER PROTECTION ACT OF 1973.

Section 3(a)(5) of the Flood Disaster Protection Act of 1973 (42
U.S.C. 4003(a)(5)) is amended by striking ``, the Office of Thrift
Supervision''.
SEC. 369. HOME OWNERS' LOAN ACT.

The Home Owners' Loan Act (12 U.S.C. 1461 et seq.) is amended--
(1) in section 1 (12 U.S.C. 1461), by striking the table of
contents;
(2) in section 2 (12 U.S.C. 1462), as amended by this Act--
(A) by striking paragraphs (1) and (3);
(B) by redesignating paragraph (2) as paragraph (1);
(C) by redesignating paragraphs (4) through (9) as
paragraphs (2) through (7), respectively; and
(D) by <> adding at the end the
following:

[[Page 1558]]

``(8) Board.--The term `Board', other than in the context of
the Board of Directors of the Corporation, means the Board of
Governors of the Federal Reserve System.
``(9) Comptroller.--The term `Comptroller' means the
Comptroller of the Currency.'';
(3) in section 3 (12 U.S.C. 1462a)--
(A) by striking the section heading and inserting
the following:
``SEC. 3. ADMINISTRATIVE PROVISIONS.'';
(B) by striking subsections (a), (b), (c), (d), (g),
(h), (i), and (j);
(C) by redesignating subsections (e) and (f) as
subsections (a) and (b), respectively;
(D) in subsection (a), as so redesignated--
(i) in the heading by striking ``of the
Director''; and
(ii) in the matter preceding paragraph (1), by
striking ``The Director'' and inserting ``In
accordance with subtitle A of title III of the
Dodd-Frank Wall Street Reform and Consumer
Protection Act, the appropriate Federal banking
agency''; and
(E) in subsection (b), as so redesignated, by
striking ``Director'' and inserting ``appropriate
Federal banking agency'';
(4) in section 4 (12 U.S.C. 1463)--
(A) in subsection (a)--
(i) in the subsection heading, by striking
``Federal'';
(ii) by striking paragraphs (1) and (2) and
inserting the following:
``(1) Examination and safe and sound operation.--
``(A) Federal savings associations.--The Comptroller
shall provide for the examination and safe and sound
operation of Federal savings associations.
``(B) State savings associations.--The Corporation
shall provide for the examination and safe and sound
operation of State savings associations.
``(2) Regulations for savings associations.--The Comptroller
may prescribe regulations with respect to savings associations,
as the Comptroller determines to be appropriate to carry out the
purposes of this Act.''; and
(iii) in paragraph (3), by striking
``Director'' each place that term appears and
inserting ``Comptroller and the Corporation'';
(B) in subsection (b)--
(i) in paragraph (2)--
(I) in subparagraph (A), by adding
``and'' at the end;
(II) in subparagraph (B), by
striking ``; and'' and inserting a
period; and
(III) by striking subparagraph (C);
and
(ii) by striking ``Director'' each place that
term appears and inserting ``Comptroller'';
(C) in subsection (c)--

[[Page 1559]]

(i) by striking ``All regulations and policies
of the Director'' and inserting ``The regulations
of the Comptroller and the policies of the
Comptroller and the Corporation''; and
(ii) by striking ``of the Currency'';
(D) in subsection (e)(5), by striking ``Director''
and inserting ``Comptroller'';
(E) in subsection (f), by striking ``Director'' each
place that term appears and inserting ``appropriate
Federal banking agency''; and
(F) in subsection (h), by striking ``Director'' each
place that term appears and inserting ``appropriate
Federal banking agency'';
(5) in section 5 (12 U.S.C. 1464)--
(A) in subsection (a), by striking ``Director'',
each place such term appears and inserting ``Comptroller
of the Currency'';
(B) in subsection (b), by striking ``Director'',
each place such term appears and inserting ``Comptroller
of the Currency'';
(C) in subsection (c)--
(i) in paragraph (5)--
(I) in subparagraph (A), by striking
``Director'' and inserting ``appropriate
Federal banking agency''; and
(II) in subparagraph (B)--
(aa) by striking ``The
Director'' and inserting ``The
appropriate Federal banking
agency''; and
(bb) by striking ``the
Director'' and inserting ``the
appropriate Federal banking
agency'';
(D) in subsection (d)--
(i) in paragraph (1)--
(I) in subparagraph (A)--
(aa) in the first sentence,
by striking ``Director'' and
inserting ``appropriate Federal
banking agency'';
(bb) in the second
sentence--
(AA) by striking
``Director's own name and
through the Director's own
attorneys'' and inserting
``name of the appropriate
Federal banking agency and
through the attorneys of the
appropriate Federal banking
agency''; and
(BB) by striking
``Director'' each place that
term appears and inserting
``appropriate Federal
banking agency''; and
(cc) in the third sentence,
by striking ``Director'' each
place that term appears and
inserting ``Comptroller'';
(II) in subparagraph (B)--
(aa) in clauses (i) through
(iv), by striking ``Director''
each place that term appears and
inserting ``appropriate Federal
banking agency'';
(III) in clause (v)--

[[Page 1560]]

(aa) in the matter preceding
subclause (I), by striking
``Director'' and inserting
``appropriate Federal banking
agency'';
(bb) in subclause (II), by
striking ``subpenas'' and
inserting ``subpoenas''; and
(cc) in the matter following
subclause (II), by striking
``subpena'' and inserting
``subpoena'';
(IV) in clause (vi)--
(aa) in the first sentence,
by striking ``Director'' and
inserting ``appropriate Federal
banking agency''; and
(bb) in the second sentence,
by striking ``Director'' and
inserting ``Comptroller'';
(V) in clause (vii)--
(aa) in the first sentence,
by striking ``subpena'' and
inserting ``subpoena'';
(bb) in the second sentence,
by striking ``subpenaed'' and
inserting ``subpoenaed''; and
(cc) in the third sentence,
by striking ``Director'' and
inserting ``appropriate Federal
banking agency'';
(ii) in paragraph (2)--
(I) in subparagraph (A)--
(aa) by striking ``Director
of the Office of Thrift
Supervision'' and inserting
``appropriate Federal banking
agency'';
(bb) by striking ``any
insured savings association''
and inserting ``an insured
savings association''; and
(cc) by striking ``Director
determines, in the Director's
discretion'' and inserting
``appropriate Federal banking
agency determines, in the
discretion of the appropriate
Federal banking agency'';
(II) in subparagraph (B), by
striking ``Director'' each place that
term appears and inserting ``appropriate
Federal banking agency'';
(III) in subparagraphs (C) and (D),
by striking ``Director'' and inserting
``appropriate Federal banking agency'';
(IV) in subparagraph (E)--
(aa) in clause (ii)--
(AA) in the clause
heading, by striking ``or
rtc''; and
(BB) by striking ``or
the Resolution Trust
Corporation, as
appropriate,'' each place
that term appears; and
(bb) by striking
``Director'' each place that
term appears and inserting
``appropriate Federal banking
agency''; and
(iii) in paragraph (3)--
(I) in subparagraph (A), by striking
``Director'' each place that term
appears and inserting ``Comptroller'';
and
(II) in subparagraph (B)--

[[Page 1561]]

(aa) in the subparagraph
heading, by striking ``or rtc'';
(bb) by striking
``Corporation or the Resolution
Trust''; and
(cc) by striking
``Director'' and inserting
``Comptroller'';
(iv) in paragraph (4), by striking
``Director'' and inserting ``appropriate Federal
banking agency'';
(v) in paragraph (6)--
(I) in subparagraph (A), by striking
``Director'' and inserting
``Comptroller''; and
(II) in subparagraphs (B) and (C),
by striking ``Director'' each place that
term appears and inserting ``appropriate
Federal banking agency'';
(vi) in paragraph (7)--
(I) in subparagraphs (A), (B), and
(D), by striking ``Director'' each place
that term appears and inserting
``appropriate Federal banking agency'';
(II) in subparagraph (C), by
striking ``Director'' and inserting
``Federal Deposit Insurance Corporation
or the Comptroller, as appropriate,'';
and
(III) by striking subparagraph (E)
and inserting the following:
``(E) Administration by the comptroller and the
corporation.--The Comptroller may issue such
regulations, and the appropriate Federal banking agency
may issue such orders, including those issued pursuant
to section 8 of the Federal Deposit Insurance Act, as
may be necessary to administer and carry out this
paragraph and to prevent evasion of this paragraph.'';
(E) in subsection (e)(2), strike ``Director'' and
insert ``Comptroller'';
(F) in subsection (i)--
(i) by striking ``Director'', each place such
term appears, and inserting ``Comptroller'';
(ii) in paragraph (2), in the heading, by
striking ``director'' and inserting
``Comptroller'';
(iii) in paragraph (5)(A), by striking ``of
the Currency''; and
(iv) except as provided in clauses (i) through
(iii), by striking ``Director'' each place such
term appears and inserting ``Comptroller'';
(G) in subsection (o)--
(i) in paragraph (1), by striking ``Director''
and inserting ``Comptroller''; and
(ii) in paragraph (2)(B), by striking
``Director's determination'' and inserting
``determination of the Comptroller'';
(H) in subsections (m), (n), (o), and (p), by
striking ``Director'', each place such term appears, and
inserting ``Comptroller'';
(I) in subsection (q)--
(i) in paragraph (6), by striking ``of
Governors of the Federal Reserve System'';
(ii) by striking ``Director'' each place that
term appears and inserting ``Board''; and

[[Page 1562]]

(iii) by inserting ``in consultation with the
Comptroller and the Corporation,'' before
``considers'';
(J) in subsection (r)(3), by striking ``Director''
and inserting ``Comptroller of the Currency'';
(K) in subsection (s)--
(i) in paragraph (1), strike ``Director'' and
insert ``Comptroller of the Currency'';
(ii) in paragraph (2), strike ``Director'' and
insert ``Comptroller of the Currency'';
(iii) in paragraph (3), by striking
``Director's discretion, the Director'' and
inserting ``discretion of the appropriate Federal
banking agency, the appropriate Federal banking
agency,'';
(iv) in paragraph (4), by striking
``Director'' each place that term appears and
inserting ``appropriate Federal banking agency'';
and
(v) in paragraph (5)--
(I) by striking ``Director'', each
place such term appears, and inserting
``appropriate Federal banking agency'';
and
(II) by striking ``Director's
approval'' and inserting ``approval of
the appropriate Federal banking
agency'';
(L) in subsection (t)--
(i) in paragraph (1), by striking subparagraph
(D);
(ii) by striking paragraph (3) and inserting
the following:
``(3) [Repealed].'';
(iii) in paragraph (5)--
(I) in subparagraph (B), by striking
``Corporation, in its sole discretion''
and inserting ``appropriate Federal
banking agency, in the sole discretion
of the appropriate Federal banking
agency''; and
(II) by striking subparagraph (D);
(iv) in paragraph (6)--
(I) by striking subparagraph (A) and
inserting the following:
``(A) [Reserved].'';
(II) in subparagraph (B), by
striking ``Director'' each place that
term appears and inserting ``appropriate
Federal banking agency'';
(III) in subparagraph (C)--
(aa) in clause (i), by
striking ``Director's prior
approval'' and inserting ``prior
approval of the appropriate
Federal banking agency'';
(bb) in clause (ii), by
striking ``Director's
discretion'' and inserting
``discretion of the appropriate
Federal banking agency''; and
(cc) by striking
``Director'' each place that
term appears and inserting
``appropriate Federal banking
agency'';
(IV) in subparagraph (E), by
striking ``Director shall'' and
inserting ``appropriate Federal banking
agency may''; and
(V) in subparagraph (F), by striking
``Director'' and all that follows
through the end of the

[[Page 1563]]

subparagraph and inserting ``appropriate
Federal banking agency under this Act or
any other provision of law.'';
(v) in paragraph (7), by striking ``Director''
each place that term appears and inserting
``appropriate Federal banking agency'';
(vi) by striking paragraph (8) and inserting
the following:
``(8) [Repealed].'';
(vii) in paragraph (9)--
(I) in subparagraph (A), by striking
``Director'' and inserting
``Comptroller'';
(II) in subparagraph (C), by
striking ``of the Currency''; and
(III) by striking subparagraph (B)
and redesignating subparagraphs (C) and
(D) as subparagraphs (B) and (C),
respectively; and
(viii) except as provided in clauses (i)
through (vii), by striking ``Director'' each place
that term appears and inserting ``appropriate
Federal banking agency'';
(M) in subsection (u), by striking ``Director'' each
place that term appears and inserting ``appropriate
Federal banking agency'';
(N) in subsection (v)--
(i) in paragraph (2), by striking ``Director's
determinations'' and inserting ``determinations of
the appropriate Federal banking agency''; and
(ii) by striking ``Director'' each place that
term appears and inserting ``appropriate Federal
banking agency'';
(O) in subsection (w)(1)--
(i) in subparagraph (A)(II), by striking
``Director's intention'' and inserting ``intention
of the Comptroller''; and
(ii) in subparagraph (B), by striking
``Director's intention'' and inserting ``intention
of the Comptroller''; and
(P) except as provided in subparagraphs (A) through
(J), by striking ``Director'' each place that term
appears and inserting ``Comptroller'';
(6) in section 8 (12 U.S.C. 1466a), by striking ``Director''
each place that term appears and inserting ``Comptroller'';
(7) in section 9 (12 U.S.C. 1467)--
(A) in subsection (a), by striking ``assessed by the
Director'' and all that follows through the end of the
subsection and inserting the following: ``assessed by--
``(1) the Comptroller, against each such Federal savings
association, as the Comptroller deems necessary or appropriate;
and
``(2) the Corporation, against each such State savings
association, as the Corporation deems necessary or
appropriate.'';
(B) in subsection (b), by striking ``Director'',
each place such term appears, and inserting
``Comptroller or Corporation, as appropriate'';
(C) in subsection (e)--

[[Page 1564]]

(i) by striking ``Only the Director'' and
inserting ``The Comptroller''; and
(ii) by striking ``Director's designee'' and
inserting ``designee of the Comptroller'';
(D) by striking subsection (f) and inserting the
following:

``(f) [Reserved].'';
(E) in subsection (g)--
(i) in paragraph (1), by striking ``Director''
and inserting ``appropriate Federal banking
agency''; and
(ii) in paragraph (2), by striking ``Director,
or the Corporation, as the case may be,'' and
inserting ``appropriate Federal banking agency for
the savings association'';
(F) in subsection (i), by striking ``Director'' each
place that term appears and inserting ``appropriate
Federal banking agency'';
(G) in subsection (j), by striking ``Director's sole
discretion'' and inserting ``sole discretion of the
appropriate Federal banking agency'';
(H) in subsection (k), by striking ``Director may
assess against institutions for which the Director is
the appropriate Federal banking agency, as defined in
section 3 of the Federal Deposit Insurance Act,'' and
inserting ``appropriate Federal banking agency may
assess against an institution''; and
(I) except as provided in subparagraphs (A) through
(G), by striking ``Director'' each place that term
appears and inserting ``appropriate Federal banking
agency'';
(8) in section 10 (12 U.S.C. 1467a)--
(A) in subsection (a)(1), by striking ``Director''
each place that term appears and inserting ``appropriate
Federal banking agency'';
(B) in subsection (b)--
(i) in paragraph (2), by striking ``and the
regional office of the Director of the district in
which its principal office is located,''; and
(ii) in paragraph (6), by striking
``Director's own motion or application'' and
inserting ``motion or application of the Board'';
(C) in subsection (c)--
(i) in paragraph (2)(F), by striking ``of
Governors of the Federal Reserve System'';
(ii) in paragraph (4)(B), in the subparagraph
heading, by striking ``by director'';
(iii) in paragraph (6)(D), in the subparagraph
heading, by striking ``by director''; and
(iv) in paragraph (9)(E), by inserting ``(in
consultation with the appropriate Federal banking
agency)'' after ``including a determination'';
(D) in subsection (g)(5)(B), by striking ``the
Director's discretion'' and inserting ``the discretion
of the Board'';
(E) in subsection (l), by striking ``Director'' each
place that term appears and inserting ``appropriate
Federal banking agency'';
(F) in subsection (m), by striking ``Director'' and
inserting ``appropriate Federal banking agency'';

[[Page 1565]]

(G) in subsection (p)--
(i) in paragraph (1)--
(I) by striking ``Director
determines'' the 1st place such term
appears and inserting ``Board or the
appropriate Federal banking agency for
the savings association determines'';
(II) by striking ``Director may''
and inserting ``Board may''; and
(III) by striking ``Director
determines'' the 2nd place such term
appears and inserting ``Board, in
consultation with the appropriate
Federal banking agency for the savings
association determines''; and
(ii) in paragraph (2), by striking
``Director'', each place such term appears, and
inserting ``Board'';
(H) in subsection (q), by striking ``Director'',
each place such term appears, and inserting ``Board'';
(I) in subsection (r), by striking ``Director'',
each place such term appears, and inserting ``Board or
appropriate Federal banking agency'';
(J) in subsection (s)--
(i) in paragraph (2)--
(I) in subparagraph (B)(ii), by
striking ``Director's judgment'' and
inserting ``judgment of the appropriate
Federal banking agency for the savings
association''; and
(II) by striking ``Director'' each
place that term appears and inserting
``appropriate Federal banking agency for
the savings association''; and
(ii) in paragraph (4), by striking
``Director'' and inserting ``Comptroller''; and
(K) except as provided in subparagraphs (A) through
(J), by striking ``Director'' each place that term
appears and inserting ``Board'';
(9) in section 11 (12 U.S.C. 1468), by striking ``Director''
each place that term appears and inserting ``appropriate Federal
banking agency'';
(10) in section 12 (12 U.S.C. 1468a), by striking ``the
Director'' and inserting ``a Federal banking agency''; and
(11) in section 13 (12 U.S.C. 1468a) is <> amended by striking ``Director'' and inserting ``a
Federal banking agency''.
SEC. 370. HOUSING ACT OF 1948.

Section 502(c) of the Housing Act of 1948 (12 U.S.C. 1701c(c)) is
amended--
(1) in the matter preceding paragraph (1), by striking ``and
the Director of the Office of Thrift Supervision'' and inserting
``, the Comptroller of the Currency, and the Federal Deposit
Insurance Corporation''; and
(2) in paragraph (3), by striking ``Board'' and inserting
``Agency''.
SEC. 371. <> HOUSING AND COMMUNITY
DEVELOPMENT ACT OF 1992.

Section 543 of the Housing and Community Development Act of 1992
(Public Law 102-550; 106 Stat. 3798) is amended--
(1) in subsection (c)(1)--
(A) by striking subparagraphs (D) through (F); and

[[Page 1566]]

(B) by redesignating subparagraphs (G) and (H) as
subparagraphs (D) and (E), respectively; and
(2) in subsection (f)--
(A) in paragraph (2), by striking ``the Office of
Thrift Supervision,'' each place that term appears; and
(B) in paragraph (3)--
(i) in the matter preceding subparagraph (A),
by striking ``the Office of Thrift Supervision,'';
and
(ii) in subparagraph (D), by striking ``Office
of Thrift Supervision,''.
SEC. 372. HOUSING AND URBAN-RURAL RECOVERY ACT OF 1983.

Section 469 of the Housing and Urban-Rural Recovery Act of 1983 (12
U.S.C. 1701p-1) is amended in the first sentence, by striking ``Federal
Home Loan Bank Board'' and inserting ``Federal Housing Finance Agency''.
SEC. 373. NATIONAL HOUSING ACT.

Section 202(f) of the National Housing Act (12 U.S.C. 1708(f)) is
amended--
(1) by striking paragraph (5) and inserting the following:
``(5) if the mortgagee is a national bank, a subsidiary or
affiliate of such bank, a Federal savings association or a
subsidiary or affiliate of a savings association, the
Comptroller of the Currency;'';
(2) in paragraph (6), by adding ``and'' at the end;
(3) in paragraph (7)--
(A) by inserting ``or State savings association''
after ``State bank''; and
(B) by striking ``; and'' and inserting a period;
and
(4) by striking paragraph (8).
SEC. 374. NEIGHBORHOOD REINVESTMENT CORPORATION ACT.

Section 606(c)(3) of the Neighborhood Reinvestment Corporation Act
(42 U.S.C. 8105(c)(3)) is amended by striking ``Federal Home Loan Bank
Board'' and inserting ``Federal Housing Finance Agency''.
SEC. 375. PUBLIC LAW 93-100.

Section 5(d) of Public Law 93-100 (12 U.S.C. 1470(a)) is amended--
(1) in paragraph (1), by striking ``Federal Savings and Loan
Insurance Corporation with respect to insured institutions, the
Board of Governors of the Federal Reserve System with respect to
State member insured banks, and the Federal Deposit Insurance
Corporation with respect to State nonmember insured banks'' and
inserting ``appropriate Federal banking agency, with respect to
the institutions subject to the jurisdiction of each such
agency,''; and
(2) in paragraph (2), by striking ``supervisory'' and
inserting ``banking''.
SEC. 376. SECURITIES EXCHANGE ACT OF 1934.

The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is
amended--
(1) in section 3(a)(34) (15 U.S.C. 78c(a)(34))--
(A) in subparagraph (A)--

[[Page 1567]]

(i) in clause (i), by striking ``or a
subsidiary or a department or division of any such
bank'' and inserting ``a subsidiary or a
department or division of any such bank, a Federal
savings association (as defined in section 3(b)(2)
of the Federal Deposit Insurance Act (12 U.S.C.
1813(b)(2))), the deposits of which are insured by
the Federal Deposit Insurance Corporation, or a
subsidiary or department or division of any such
Federal savings association'';
(ii) in clause (ii), by striking ``or a
subsidiary or a department or division of such
subsidiary'' and inserting ``a subsidiary or a
department or division of such subsidiary, or a
savings and loan holding company'';
(iii) in clause (iii), by striking ``or a
subsidiary or department or division thereof;''
and inserting ``a subsidiary or department or
division of any such bank, a State savings
association (as defined in section 3(b)(3) of the
Federal Deposit Insurance Act (12 U.S.C.
1813(b)(3))), the deposits of which are insured by
the Federal Deposit Insurance Corporation, or a
subsidiary or a department or division of any such
State savings association; and'';
(iv) by striking clause (iv); and
(v) by redesignating clause (v) as clause
(iv);
(B) in subparagraph (B)--
(i) in clause (i), by striking ``or a
subsidiary of any such bank'' and inserting ``a
subsidiary of any such bank, a Federal savings
association (as defined in section 3(b)(2) of the
Federal Deposit Insurance Act (12 U.S.C.
1813(b)(2))), the deposits of which are insured by
the Federal Deposit Insurance Corporation, or a
subsidiary of any such Federal savings
association'';
(ii) in clause (ii), by striking ``or a
subsidiary of a bank holding company which is a
bank other than a bank specified in clause (i),
(iii), or (iv) of this subparagraph'' and
inserting ``a subsidiary of a bank holding company
that is a bank other than a bank specified in
clause (i) or (iii) of this subparagraph, or a
savings and loan holding company'';
(iii) in clause (iii), by striking ``or a
subsidiary thereof;'' and inserting ``a subsidiary
of any such bank, a State savings association (as
defined in section 3(b)(3) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(b)(3))), the
deposits of which are insured by the Federal
Deposit Insurance Corporation, or a subsidiary of
any such State savings association; and'';
(iv) by striking clause (iv); and
(v) by redesignating clause (v) as clause
(iv);
(C) in subparagraph (C)--
(i) in clause (i), by striking ``bank'' and
inserting ``bank or a Federal savings association
(as defined in section 3(b)(2) of the Federal
Deposit Insurance Act (12 U.S.C. 1813(b)(2))), the
deposits of which are insured by the Federal
Deposit Insurance Corporation'';

[[Page 1568]]

(ii) in clause (ii), by striking ``or a
subsidiary of a bank holding company which is a
bank other than a bank specified in clause (i),
(iii), or (iv) of this subparagraph'' and
inserting ``a subsidiary of a bank holding company
that is a bank other than a bank specified in
clause (i) or (iii) of this subparagraph, or a
savings and loan holding company'';
(iii) in clause (iii), by striking ``System)''
and inserting, ``System) or a State savings
association (as defined in section 3(b)(3) of the
Federal Deposit Insurance Act (12 U.S.C.
1813(b)(3))), the deposits of which are insured by
the Federal Deposit Insurance Corporation; and'';
(iv) by striking clause (iv); and
(v) by redesignating clause (v) as clause
(iv);
(D) in subparagraph (D)--
(i) in clause (i), by inserting after ``bank''
the following: ``or a Federal savings association
(as defined in section 3(b)(2) of the Federal
Deposit Insurance Act (12 U.S.C. 1813(b)(2))), the
deposits of which are insured by the Federal
Deposit Insurance Corporation'';
(ii) in clause (ii), by adding ``and'' at the
end;
(iii) by striking clause (iii);
(iv) by redesignating clause (iv) as clause
(iii); and
(v) in clause (iii), as so redesignated, by
inserting after ``bank'' the following: ``or a
State savings association (as defined in section
3(b)(3) of the Federal Deposit Insurance Act (12
U.S.C. 1813(b)(3))), the deposits of which are
insured by the Federal Deposit Insurance
Corporation'';
(E) in subparagraph (F)--
(i) in clause (i), by inserting after ``bank''
the following: ``or a Federal savings association
(as defined in section 3(b)(2) of the Federal
Deposit Insurance Act (12 U.S.C. 1813(b)(2))), the
deposits of which are insured by the Federal
Deposit Insurance Corporation'';
(ii) by striking clause (ii);
(iii) by redesignating clauses (iii), (iv),
and (v) as clauses (ii), (iii), and (iv),
respectively; and
(iv) in clause (iii), as so redesignated, by
inserting before the semicolon the following: ``or
a State savings association (as defined in section
3(b)(3) of the Federal Deposit Insurance Act (12
U.S.C. 1813(b)(3))), the deposits of which are
insured by the Federal Deposit Insurance
Corporation'';
(F) in subparagraph (G)--
(i) in clause (i), by inserting after
``national bank'' the following: ``, a Federal
savings association (as defined in section 3(b)(2)
of the Federal Deposit Insurance Act), the
deposits of which are insured by the Federal
Deposit Insurance Corporation,'';
(ii) in clause (iii)--
(I) by inserting after ``bank)'' the
following: ``, a State savings
association (as defined in section
3(b)(3) of the Federal Deposit Insurance
Act), the deposits of which are insured
by the Federal Deposit Insurance
Corporation,''; and

[[Page 1569]]

(II) by adding ``and'' at the end;
(iii) by striking clause (iv); and
(iv) by redesignating clause (v) as clause
(iv); and
(G) in the undesignated matter following
subparagraph (H), by striking ``, and the term `District
of Columbia savings and loan association' means any
association subject to examination and supervision by
the Office of Thrift Supervision under section 8 of the
Home Owners' Loan Act of 1933'';
(2) in section 12(i) (15 U.S.C. 78l(i))--
(A) in paragraph (1), by inserting after ``national
banks'' the following: ``and Federal savings
associations, the accounts of which are insured by the
Federal Deposit Insurance Corporation'';
(B) by striking ``(3)'' and all that follows through
``vested in the Office of Thrift Supervision'' and
inserting ``and (3) with respect to all other insured
banks and State savings associations, the accounts of
which are insured by the Federal Deposit Insurance
Corporation, are vested in the Federal Deposit Insurance
Corporation''; and
(C) in the second sentence, by striking ``the
Federal Deposit Insurance Corporation, and the Office of
Thrift Supervision'' and inserting ``and the Federal
Deposit Insurance Corporation'';
(3) in section 15C(g)(1) (15 U.S.C. 78o-5(g)(1)), by
striking ``the Director of the Office of Thrift Supervision, the
Federal Savings and Loan Insurance Corporation,''; and
(4) in section 23(b)(1) (15 U.S.C. 78w(b)(1)), by striking
``, other than the Office of Thrift Supervision,''.
SEC. 377. TITLE 18, UNITED STATES CODE.

Title 18, United States Code, is amended--
(1) in section 212(c)(2)--
(A) by striking subparagraph (C); and
(B) by redesignating subparagraphs (D) through (H)
as subparagraphs (C) through (G), respectively;
(2) in section 657, by striking ``Office of Thrift
Supervision, the Resolution Trust Corporation,'';
(3) in section 981(a)(1)(D)--
(A) by striking ``Resolution Trust Corporation,'';
and
(B) by striking ``or the Office of Thrift
Supervision'';
(4) in section 982(a)(3)--
(A) by striking ``Resolution Trust Corporation,'';
and
(B) by striking ``or the Office of Thrift
Supervision'';
(5) in section 1006--
(A) by striking ``Office of Thrift Supervision,'';
and
(B) by striking ``the Resolution Trust
Corporation,'';
(6) in section 1014--
(A) by striking ``the Office of Thrift
Supervision''; and
(B) by striking ``the Resolution Trust
Corporation,''; and
(7) in section 1032(1)--
(A) by striking ``the Resolution Trust
Corporation,''; and
(B) by striking ``or the Director of the Office of
Thrift Supervision''.

[[Page 1570]]

SEC. 378. TITLE 31, UNITED STATES CODE.

Title 31, United States Code, is amended--
(1) in section 321--
(A) in subsection (c)--
(i) in paragraph (1), by adding ``and'' at the
end;
(ii) in paragraph (2), by striking ``; and''
and inserting a period; and
(iii) by striking paragraph (3); and
(B) by striking subsection (e); and
(2) in section 714(a), by striking ``the Office of the
Comptroller of the Currency, and the Office of Thrift
Supervision.'' and inserting ``and the Office of the Comptroller
of the Currency.''.

TITLE IV--REGULATION <> OF ADVISERS TO HEDGE FUNDS AND OTHERS
SEC. 401. <> SHORT TITLE.

This title may be cited as the ``Private Fund Investment Advisers
Registration Act of 2010''.
SEC. 402. DEFINITIONS.

(a) Investment Advisers Act of 1940 Definitions.--Section 202(a) of
the Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)) is amended by
adding at the end the following:
``(29) The term `private fund' means an issuer 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 section 3(c)(1)
or 3(c)(7) of that Act.
``(30) The term `foreign private adviser' means any
investment adviser who--
``(A) has no place of business in the United States;
``(B) has, in total, fewer than 15 clients and
investors in the United States in private funds advised
by the investment adviser;
``(C) has aggregate assets under management
attributable to clients in the United States and
investors in the United States in private funds advised
by the investment adviser of less than $25,000,000, or
such higher amount as the Commission may, by rule, deem
appropriate in accordance with the purposes of this
title; and
``(D) neither--
``(i) holds itself out generally to the public
in the United States as an investment adviser; nor
``(ii) acts as--
``(I) an investment adviser to any
investment company registered under the
Investment Company Act of 1940; or
``(II) a company that has elected to
be a business development company
pursuant to section 54 of the Investment
Company Act of 1940 (15 U.S.C. 80a-53),
and has not withdrawn its election.''.

(b) Other <> Definitions.--As used in this
title, the terms ``investment adviser'' and ``private fund'' have the
same meanings as in section 202 of the Investment Advisers Act of 1940,
as amended by this title.

[[Page 1571]]

SEC. 403. ELIMINATION OF PRIVATE ADVISER EXEMPTION; LIMITED
EXEMPTION FOR FOREIGN PRIVATE ADVISERS;
LIMITED INTRASTATE EXEMPTION.

Section 203(b) of the Investment Advisers Act of 1940 (15 U.S.C.
80b-3(b)) is amended--
(1) in paragraph (1), by inserting ``, other than an
investment adviser who acts as an investment adviser to any
private fund,'' before ``all of whose'';
(2) by striking paragraph (3) and inserting the following:
``(3) any investment adviser that is a foreign private
adviser;''; and
(3) in paragraph (5), by striking ``or'' at the end;
(4) in paragraph (6)--
(A) by striking ``any investment adviser'' and
inserting ``(A) any investment adviser'';
(B) by redesignating subparagraphs (A) and (B) as
clauses (i) and (ii), respectively; and
(C) in clause (ii) (as so redesignated), by striking
the period at the end and inserting ``; or''; and
(D) by adding at the end the following:

``(B) any investment adviser that is registered with the Commodity
Futures Trading Commission as a commodity trading advisor and advises a
private fund, provided that, if after the date of enactment of the
Private Fund Investment Advisers Registration Act of 2010, the business
of the advisor should become predominately the provision of securities-
related advice, then such adviser shall register with the Commission.''.
(5) by adding at the end the following:
``(7) any investment adviser, other than any entity that has
elected to be regulated or is regulated as a business
development company pursuant to section 54 of the Investment
Company Act of 1940 (15 U.S.C. 80a-54), who solely advises--
``(A) small business investment companies that are
licensees under the Small Business Investment Act of
1958;
``(B) entities that have received from the Small
Business Administration notice to proceed to qualify for
a license as a small business investment company under
the Small Business Investment Act of 1958, which notice
or license has not been revoked; or
``(C) applicants that are affiliated with 1 or more
licensed small business investment companies described
in subparagraph (A) and that have applied for another
license under the Small Business Investment Act of 1958,
which application remains pending.''.
SEC. 404. COLLECTION OF SYSTEMIC RISK DATA; REPORTS; EXAMINATIONS;
DISCLOSURES.

Section 204 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-4)
is amended--
(1) by redesignating subsections (b) and (c) as subsections
(c) and (d), respectively; and
(2) by inserting after subsection (a) the following:

``(b) Records and Reports of Private Funds.--
``(1) In general.--The Commission may require any investment
adviser registered under this title--
``(A) to maintain such records of, and file with the
Commission such reports regarding, private funds advised

[[Page 1572]]

by the investment adviser, as necessary and appropriate
in the public interest and for the protection of
investors, or for the assessment of systemic risk by the
Financial Stability Oversight Council (in this
subsection referred to as the `Council'); and
``(B) to provide or make available to the Council
those reports or records or the information contained
therein.
``(2) Treatment of records.--The records and reports of any
private fund to which an investment adviser registered under
this title provides investment advice shall be deemed to be the
records and reports of the investment adviser.
``(3) Required information.--The records and reports
required to be maintained by an investment adviser and subject
to inspection by the Commission under this subsection shall
include, for each private fund advised by the investment
adviser, a description of--
``(A) the amount of assets under management and use
of leverage, including off-balance-sheet leverage;
``(B) counterparty credit risk exposure;
``(C) trading and investment positions;
``(D) valuation policies and practices of the fund;
``(E) types of assets held;
``(F) side arrangements or side letters, whereby
certain investors in a fund obtain more favorable rights
or entitlements than other investors;
``(G) trading practices; and
``(H) such other information as the Commission, in
consultation with the Council, determines is necessary
and appropriate in the public interest and for the
protection of investors or for the assessment of
systemic risk, which may include the establishment of
different reporting requirements for different classes
of fund advisers, based on the type or size of private
fund being advised.
``(4) Maintenance of records.--An investment adviser
registered under this title shall maintain such records of
private funds advised by the investment adviser for such period
or periods as the Commission, by rule, may prescribe as
necessary and appropriate in the public interest and for the
protection of investors, or for the assessment of systemic risk.
``(5) Filing of records.--The Commission shall issue rules
requiring each investment adviser to a private fund to file
reports containing such information as the Commission deems
necessary and appropriate in the public interest and for the
protection of investors or for the assessment of systemic risk.
``(6) Examination of records.--
``(A) Periodic and special examinations.--The
Commission--
``(i) shall conduct periodic inspections of
the records of private funds maintained by an
investment adviser registered under this title in
accordance with a schedule established by the
Commission; and
``(ii) may conduct at any time and from time
to time such additional, special, and other
examinations as the Commission may prescribe as
necessary and appropriate in the public interest
and for the protection of investors, or for the
assessment of systemic risk.

[[Page 1573]]

``(B) Availability of records.--An investment
adviser registered under this title shall make available
to the Commission any copies or extracts from such
records as may be prepared without undue effort,
expense, or delay, as the Commission or its
representatives may reasonably request.
``(7) Information sharing.--
``(A) In general.--The Commission shall make
available to the Council copies of all reports,
documents, records, and information filed with or
provided to the Commission by an investment adviser
under this subsection as the Council may consider
necessary for the purpose of assessing the systemic risk
posed by a private fund.
``(B) Confidentiality.--The Council shall maintain
the confidentiality of information received under this
paragraph in all such reports, documents, records, and
information, in a manner consistent with the level of
confidentiality established for the Commission pursuant
to paragraph (8). The Council shall be exempt from
section 552 of title 5, United States Code, with respect
to any information in any report, document, record, or
information made available, to the Council under this
subsection.''.
``(8) Commission confidentiality of reports.--
Notwithstanding any other provision of law, the Commission may
not be compelled to disclose any report or information contained
therein required to be filed with the Commission under this
subsection, except that nothing in this subsection authorizes
the Commission--
``(A) to withhold information from Congress, upon an
agreement of confidentiality; or
``(B) prevent the Commission from complying with--
``(i) a request for information from any other
Federal department or agency or any self-
regulatory organization requesting the report or
information for purposes within the scope of its
jurisdiction; or
``(ii) an order of a court of the United
States in an action brought by the United States
or the Commission.
``(9) Other recipients confidentiality.--Any department,
agency, or self-regulatory organization that receives reports or
information from the Commission under this subsection shall
maintain the confidentiality of such reports, documents,
records, and information in a manner consistent with the level
of confidentiality established for the Commission under
paragraph (8).
``(10) Public information exception.--
``(A) In general.--The Commission, the Council, and
any other department, agency, or self-regulatory
organization that receives information, reports,
documents, records, or information from the Commission
under this subsection, shall be exempt from the
provisions of section 552 of title 5, United States
Code, with respect to any such report, document, record,
or information. Any proprietary information of an
investment adviser ascertained by the Commission from
any report required to be filed with the Commission
pursuant to this subsection shall be subject to the same
limitations on public disclosure as any facts

[[Page 1574]]

ascertained during an examination, as provided by
section 210(b) of this title.
``(B) Proprietary information.--For purposes of this
paragraph, proprietary information includes sensitive,
non-public information regarding--
``(i) the investment or trading strategies of
the investment adviser;
``(ii) analytical or research methodologies;
``(iii) trading data;
``(iv) computer hardware or software
containing intellectual property; and
``(v) any additional information that the
Commission determines to be proprietary.
``(11) Annual report to congress.--The Commission shall
report annually to Congress on how the Commission has used the
data collected pursuant to this subsection to monitor the
markets for the protection of investors and the integrity of the
markets.''.
SEC. 405. DISCLOSURE PROVISION AMENDMENT.

Section 210(c) of the Investment Advisers Act of 1940 (15 U.S.C.
80b-10(c)) is amended by inserting before the period at the end the
following: ``or for purposes of assessment of potential systemic risk''.
SEC. 406. CLARIFICATION OF RULEMAKING AUTHORITY.

Section 211 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
11) is amended--
(1) in subsection (a), by inserting before the period at the
end of the first sentence the following: ``, including rules and
regulations defining technical, trade, and other terms used in
this title, except that the Commission may not define the term
`client' for purposes of paragraphs (1) and (2) of section 206
to include an investor in a private fund managed by an
investment adviser, if such private fund has entered into an
advisory contract with such adviser''; and
(2) by adding at the end the following:

``(e) Disclosure Rules on Private Funds.--
The <> Commission and the Commodity
Futures Trading Commission shall, after consultation with the Council
but not later than 12 months after the date of enactment of the Private
Fund Investment Advisers Registration Act of 2010, jointly promulgate
rules to establish the form and content of the reports required to be
filed with the Commission under subsection 204(b) and with the Commodity
Futures Trading Commission by investment advisers that are registered
both under this title and the Commodity Exchange Act (7 U.S.C. 1a et
seq.).''.
SEC. 407. EXEMPTION OF AND REPORTING BY VENTURE CAPITAL FUND
ADVISERS.

Section 203 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-3)
is amended by adding at the end the following:
``(l) Exemption of Venture Capital Fund Advisers.--No investment
adviser that acts as an investment adviser solely to 1 or more venture
capital funds shall be subject to the registration requirements of this
title with respect to the provision of investment advice relating to a
venture <> capital fund. Not later than 1 year after
the date of enactment of this subsection, the Commission

[[Page 1575]]

shall issue final rules to define the term `venture capital fund' for
purposes of this subsection. The <> Commission shall
require such advisers to maintain such records and provide to the
Commission such annual or other reports as the Commission determines
necessary or appropriate in the public interest or for the protection of
investors.''.
SEC. 408. EXEMPTION OF AND REPORTING BY CERTAIN PRIVATE FUND
ADVISERS.

Section 203 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-3)
is amended by adding at the end the following:
``(m) Exemption of and Reporting by Certain Private Fund Advisers.--
``(1) In general.--The Commission shall provide an exemption
from the registration requirements under this section to any
investment adviser of private funds, if each of such investment
adviser acts solely as an adviser to private funds and has
assets under management in the United States of less than
$150,000,000.
``(2) Reporting.--The <> Commission shall
require investment advisers exempted by reason of this
subsection to maintain such records and provide to the
Commission such annual or other reports as the Commission
determines necessary or appropriate in the public interest or
for the protection of investors.

``(n) Registration and Examination of Mid-sized Private Fund
Advisers.--In prescribing <> regulations
to carry out the requirements of this section with respect to investment
advisers acting as investment advisers to mid-sized private funds, the
Commission shall take into account the size, governance, and investment
strategy of such funds to determine whether they pose systemic risk, and
shall provide for registration and examination procedures with respect
to the investment advisers of such funds which reflect the level of
systemic risk posed by such funds.''.
SEC. 409. FAMILY OFFICES.

(a) In General.--Section 202(a)(11) of the Investment Advisers Act
of 1940 (15 U.S.C. 80b-2(a)(11)) is amended by striking ``or (G)'' and
inserting the following: ``; (G) any family office, as defined by rule,
regulation, or order of the Commission, in accordance with the purposes
of this title; or (H)''.
(b) Rulemaking.--The <> rules,
regulations, or orders issued by the Commission pursuant to section
202(a)(11)(G) of the Investment Advisers Act of 1940, as added by this
section, regarding the definition of the term ``family office'' shall
provide for an exemption that--
(1) is consistent with the previous exemptive policy of the
Commission, as reflected in exemptive orders for family offices
in effect on the date of enactment of this Act, and the
grandfathering provisions in paragraph (3);
(2) recognizes the range of organizational, management, and
employment structures and arrangements employed by family
offices; and
(3) does not exclude any person who was not registered or
required to be registered under the Investment Advisers Act of
1940 on January 1, 2010 from the definition of the term ``family
office'', solely because such person provides investment advice
to, and was engaged before January 1, 2010 in providing
investment advice to--

[[Page 1576]]

(A) natural persons who, at the time of their
applicable investment, are officers, directors, or
employees of the family office who--
(i) <> have invested with the
family office before January 1, 2010; and
(ii) are accredited investors, as defined in
Regulation D of the Commission (or any successor
thereto) under the Securities Act of 1933, or, as
the Commission may prescribe by rule, the
successors-in-interest thereto;
(B) any company owned exclusively and controlled by
members of the family of the family office, or as the
Commission may prescribe by rule;
(C) any investment adviser registered under the
Investment Adviser Act of 1940 that provides investment
advice to the family office and who identifies
investment opportunities to the family office, and
invests in such transactions on substantially the same
terms as the family office invests, but does not invest
in other funds advised by the family office, and whose
assets as to which the family office directly or
indirectly provides investment advice represent, in the
aggregate, not more than 5 percent of the value of the
total assets as to which the family office provides
investment advice.

(c) Antifraud Authority.--A family office that would not be a family
office, but for subsection (b)(3), shall be deemed to be an investment
adviser for the purposes of paragraphs (1), (2) and (4) of section 206
of the Investment Advisers Act of 1940.
SEC. 410. STATE AND FEDERAL RESPONSIBILITIES; ASSET THRESHOLD FOR
FEDERAL REGISTRATION OF INVESTMENT
ADVISERS.

Section 203A(a) of the of the Investment Advisers Act of 1940 (15
U.S.C. 80b-3a(a)) is amended--
(1) by redesignating paragraph (2) as paragraph (3); and
(2) by inserting after paragraph (1) the following:
``(2) Treatment of mid-sized investment advisers.--
``(A) In general.--No investment adviser described
in subparagraph (B) shall register under section 203,
unless the investment adviser is an adviser to an
investment company registered under the Investment
Company Act of 1940, or a company which has elected to
be a business development company pursuant to section 54
of the Investment Company Act of 1940, and has not
withdrawn the election, except that, if by effect of
this paragraph an investment adviser would be required
to register with 15 or more States, then the adviser may
register under section 203.
``(B) Covered persons.--An investment adviser
described in this subparagraph is an investment adviser
that--
``(i) is required to be registered as an
investment adviser with the securities
commissioner (or any agency or office performing
like functions) of the State in which it maintains
its principal office and place of business and, if
registered, would be subject to examination as an
investment adviser by any such commissioner,
agency, or office; and

[[Page 1577]]

``(ii) has assets under management between--
``(I) the amount specified under
subparagraph (A) of paragraph (1), as
such amount may have been adjusted by
the Commission pursuant to that
subparagraph; and
``(II) $100,000,000, or such higher
amount as the Commission may, by rule,
deem appropriate in accordance with the
purposes of this title.''.
SEC. 411. CUSTODY OF CLIENT ASSETS.

The Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.) is
amended by adding at the end the following new section:
``SEC. 223. <>  CUSTODY OF CLIENT ACCOUNTS.

``An investment adviser registered under this title shall take such
steps to safeguard client assets over which such adviser has custody,
including, without limitation, verification of such assets by an
independent public accountant, as the Commission may, by rule,
prescribe.''.
SEC. 412. COMPTROLLER GENERAL STUDY ON CUSTODY RULE COSTS.

The Comptroller General of the United States shall--
(1) conduct a study of--
(A) the compliance costs associated with the current
Securities and Exchange Commission rules 204-2 (17
C.F.R. Parts 275.204-2) and rule 206(4)-2 (17 C.F.R.
275.206(4)-2) under the Investment Advisers Act of 1940
regarding custody of funds or securities of clients by
investment advisers; and
(B) the additional costs if subsection (b)(6) of
rule 206(4)-2 (17 C.F.R. 275.206(4)-2(b)(6)) relating to
operational independence were eliminated; and
(2) <> submit a report to the
Committee on Banking, Housing, and Urban Affairs of the Senate
and the Committee on Financial Services of the House of
Representatives on the results of such study, not later than 3
years after the date of enactment of this Act.
SEC. 413. <> 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

[[Page 1578]]

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.
SEC. 414. RULE OF CONSTRUCTION RELATING TO THE COMMODITIES
EXCHANGE ACT.

The Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.) is
further amended by adding at the end the following new section:
``SEC. 224. <>  RULE OF CONSTRUCTION
RELATING TO THE COMMODITIES EXCHANGE ACT.

``Nothing in this title shall relieve any person of any obligation
or duty, or affect the availability of any right or remedy available to
the Commodity Futures Trading Commission or any private party, arising
under the Commodity Exchange Act (7 U.S.C. 1 et seq.) governing
commodity pools, commodity pool operators, or commodity trading
advisors.''.
SEC. 415. GAO STUDY AND REPORT ON ACCREDITED INVESTORS.

The Comptroller General of the United States shall conduct a study
on the appropriate criteria for determining the financial thresholds or
other criteria needed to qualify for accredited investor status and
eligibility to invest in private funds, and shall submit a report to the
Committee on Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of Representatives on the
results of such study not later than 3 years after the date of enactment
of this Act.

[[Page 1579]]

SEC. 416. GAO STUDY ON SELF-REGULATORY ORGANIZATION FOR PRIVATE
FUNDS.

The Comptroller General of the United States shall--
(1) conduct a study of the feasibility of forming a self-
regulatory organization to oversee private funds; and
(2) <> submit a report to the
Committee on Banking, Housing, and Urban Affairs of the Senate
and the Committee on Financial Services of the House of
Representatives on the results of such study, not later than 1
year after the date of enactment of this Act.
SEC. 417. COMMISSION STUDY AND REPORT ON SHORT SELLING.

(a) Studies.--The Division of Risk, Strategy, and Financial
Innovation of the Commission shall conduct--
(1) a study, taking into account current scholarship, on the
state of short selling on national securities exchanges and in
the over-the-counter markets, with particular attention to the
impact of recent rule changes and the incidence of--
(A) the failure to deliver shares sold short; or
(B) delivery of shares on the fourth day following
the short sale transaction; and
(2) a study of--
(A) the feasibility, benefits, and costs of
requiring reporting publicly, in real time short sale
positions of publicly listed securities, or, in the
alternative, reporting such short positions in real time
only to the Commission and the Financial Industry
Regulatory Authority; and
(B) the feasibility, benefits, and costs of
conducting a voluntary pilot program in which public
companies will agree to have all trades of their shares
marked ``short'', ``market maker short'', ``buy'',
``buy-to-cover'', or ``long'', and reported in real time
through the Consolidated Tape.

(b) Reports.--The Commission shall submit a report to the Committee
on Banking, Housing, and Urban Affairs of the Senate and the Committee
on Financial Services of the House of Representatives--
(1) on the results of the study required under subsection
(a)(1), including recommendations for market improvements, not
later than 2 years after the date of enactment of this Act; and
(2) on the results of the study required under subsection
(a)(2), not later than 1 year after the date of enactment of
this Act.
SEC. 418. QUALIFIED CLIENT STANDARD.

Section 205(e) of the Investment Advisers Act of 1940 (15 U.S.C.
80b-5(e)) is amended by adding at the end the following: ``With
respect <>  to any factor used in any rule or
regulation by the Commission in making a determination under this
subsection, if the Commission uses a dollar amount test in connection
with such factor, such as a net asset threshold, the Commission shall,
by order, not later than 1 year after the date of enactment of the
Private Fund Investment Advisers Registration Act of 2010, and every 5
years thereafter, adjust for the effects of inflation on such test. Any
such adjustment that is not a multiple of $100,000 shall be rounded to
the nearest multiple of $100,000.''.

[[Page 1580]]

SEC. 419. <>  TRANSITION
PERIOD.

Except as otherwise provided in this title, this title and the
amendments made by this title shall become effective 1 year after the
date of enactment of this Act, except that any investment adviser may,
at the discretion of the investment adviser, register with the
Commission under the Investment Advisers Act of 1940 during that 1-year
period, subject to the rules of the Commission.

TITLE V--INSURANCE

Subtitle <>  A--Federal Insurance Office
SEC. 501. SHORT TITLE.

This subtitle may be cited as the ``Federal Insurance Office Act of
2010''.
SEC. 502. FEDERAL INSURANCE OFFICE.

(a) Establishment of Office.--Subchapter I of chapter 3 of subtitle
I of title 31, United States Code, is amended--
(1) by redesignating section 312 as section 315;
(2) by redesignating section 313 as section 312; and
(3) by inserting after section 312 (as so redesignated) the
following new sections:
``SEC. 313. FEDERAL INSURANCE OFFICE.

``(a) Establishment.--There is established within the Department of
the Treasury the Federal Insurance Office.
``(b) Leadership.--The Office shall be headed by a Director, who
shall be appointed by the Secretary of the Treasury. The position of
Director shall be a career reserved position in the Senior Executive
Service, as that position is defined under section 3132 of title 5,
United States Code.
``(c) Functions.--
``(1) Authority pursuant to direction of secretary.--The
Office, pursuant to the direction of the Secretary, shall have
the authority--
``(A) to monitor all aspects of the insurance
industry, including identifying issues or gaps in the
regulation of insurers that could contribute to a
systemic crisis in the insurance industry or the United
States financial system;
``(B) to monitor the extent to which traditionally
underserved communities and consumers, minorities (as
such term is defined in section 1204(c) of the Financial
Institutions Reform, Recovery, and Enforcement Act of
1989 (12 U.S.C. 1811 note)), and low- and moderate-
income persons have access to affordable insurance
products regarding all lines of insurance, except health
insurance;
``(C) to recommend to the Financial Stability
Oversight Council that it designate an insurer,
including the affiliates of such insurer, as an entity
subject to regulation as a nonbank financial company
supervised by the Board of Governors pursuant to title I
of the Dodd-Frank Wall Street Reform and Consumer
Protection Act;
``(D) to assist the Secretary in administering the
Terrorism Insurance Program established in the
Department

[[Page 1581]]

of the Treasury under the Terrorism Risk Insurance Act
of 2002 (15 U.S.C. 6701 note);
``(E) to coordinate Federal efforts and develop
Federal policy on prudential aspects of international
insurance matters, including representing the United
States, as appropriate, in the International Association
of Insurance Supervisors (or a successor entity) and
assisting the Secretary in negotiating covered
agreements (as such term is defined in subsection (r));
``(F) to determine, in accordance with subsection
(f), whether State insurance measures are preempted by
covered agreements;
``(G) to consult with the States (including State
insurance regulators) regarding insurance matters of
national importance and prudential insurance matters of
international importance; and
``(H) to perform such other related duties and
authorities as may be assigned to the Office by the
Secretary.
``(2) Advisory functions.--The Office shall advise the
Secretary on major domestic and prudential international
insurance policy issues.
``(3) Advisory capacity on council.--The Director shall
serve in an advisory capacity on the Financial Stability
Oversight Council established under the Financial Stability Act
of 2010.

``(d) Scope.--The authority of the Office shall extend to all lines
of insurance except--
``(1) health insurance, as determined by the Secretary in
coordination with the Secretary of Health and Human Services
based on section 2791 of the Public Health Service Act (42
U.S.C. 300gg-91);
``(2) long-term care insurance, except long-term care
insurance that is included with life or annuity insurance
components, as determined by the Secretary in coordination with
the Secretary of Health and Human Services, and in the case of
long-term care insurance that is included with such components,
the Secretary shall coordinate with the Secretary of Health and
Human Services in performing the functions of the Office; and
``(3) crop insurance, as established by the Federal Crop
Insurance Act (7 U.S.C. 1501 et seq.).

``(e) Gathering of Information.--
``(1) In general.--In carrying out the functions required
under subsection (c), the Office may--
``(A) receive and collect data and information on
and from the insurance industry and insurers;
``(B) enter into information-sharing agreements;
``(C) analyze and disseminate data and information;
and
``(D) issue reports regarding all lines of insurance
except health insurance.
``(2) Collection of information from insurers and
affiliates.--
``(A) In general.--Except as provided in paragraph
(3), the Office may require an insurer, or any affiliate
of an insurer, to submit such data or information as the

[[Page 1582]]

Office may reasonably require in carrying out the
functions described under subsection (c).
``(B) Rule of construction.--Notwithstanding any
other provision of this section, for purposes of
subparagraph (A), the term `insurer' means any entity
that writes insurance or reinsures risks and issues
contracts or policies in 1 or more States.
``(3) Exception for small insurers.--Paragraph (2) shall not
apply with respect to any insurer or affiliate thereof that
meets a minimum size threshold that the Office may establish,
whether by order or rule.
``(4) Advance coordination.--Before collecting any data or
information under paragraph (2) from an insurer, or affiliate of
an insurer, the Office shall coordinate with each relevant
Federal agency and State insurance regulator (or other relevant
Federal or State regulatory agency, if any, in the case of an
affiliate of an insurer) and any publicly available sources to
determine if the information to be collected is available from,
and may be obtained in a timely manner by, such Federal agency
or State insurance regulator, individually or collectively,
other regulatory agency, or publicly available sources. If the
Director determines that such data or information is available,
and may be obtained in a timely manner, from such an agency,
regulator, regulatory agency, or source, the Director shall
obtain the data or information from such agency, regulator,
regulatory agency, or source. If the Director determines that
such data or information is not so available, the Director may
collect such data or information from an insurer (or affiliate)
only if the Director complies with the requirements of
subchapter I of chapter 35 of title 44, United States Code
(relating to Federal information policy; commonly known as the
Paperwork Reduction Act), in collecting such data or
information. Notwithstanding any other provision of law, each
such relevant Federal agency and State insurance regulator or
other Federal or State regulatory agency is authorized to
provide to the Office such data or information.
``(5) Confidentiality.--
``(A) Retention of privilege.--The submission of any
nonpublicly available data and information to the Office
under this subsection shall not constitute a waiver of,
or otherwise affect, any privilege arising under Federal
or State law (including the rules of any Federal or
State court) to which the data or information is
otherwise subject.
``(B) Continued application of prior confidentiality
agreements.--Any requirement under Federal or State law
to the extent otherwise applicable, or any requirement
pursuant to a written agreement in effect between the
original source of any nonpublicly available data or
information and the source of such data or information
to the Office, regarding the privacy or confidentiality
of any data or information in the possession of the
source to the Office, shall continue to apply to such
data or information after the data or information has
been provided pursuant to this subsection to the Office.
``(C) Information-sharing agreement.--Any data or
information obtained by the Office may be made available

[[Page 1583]]

to State insurance regulators, individually or
collectively, through an information-sharing agreement
that--
``(i) shall comply with applicable Federal
law; and
``(ii) shall not constitute a waiver of, or
otherwise affect, any privilege under Federal or
State law (including the rules of any Federal or
State court) to which the data or information is
otherwise subject.
``(D) Agency disclosure requirements.--Section 552
of title 5, United States Code, shall apply to any data
or information submitted to the Office by an insurer or
an affiliate of an insurer.
``(6) Subpoenas and enforcement.--The Director shall have
the power to require by subpoena the production of the data or
information requested under paragraph (2), but only upon a
written finding by the Director that such data or information is
required to carry out the functions described under subsection
(c) and that the Office has coordinated with such regulator or
agency as required under paragraph (4). Subpoenas shall bear the
signature of the Director and shall be served by any person or
class of persons designated by the Director for that purpose. In
the case of contumacy or failure to obey a subpoena, the
subpoena shall be enforceable by order of any appropriate
district court of the United States. Any failure to obey the
order of the court may be punished by the court as a contempt of
court.

``(f) Preemption of State Insurance Measures.--
``(1) Standard.--A State insurance measure shall be
preempted pursuant to this section or section 314 if, and only
to the extent that the Director determines, in accordance with
this subsection, that the measure--
``(A) results in less favorable treatment of a non-
United States insurer domiciled in a foreign
jurisdiction that is subject to a covered agreement than
a United States insurer domiciled, licensed, or
otherwise admitted in that State; and
``(B) is inconsistent with a covered agreement.
``(2) Determination.--
``(A) Notice of potential inconsistency.--Before
making any determination under paragraph (1), the
Director shall--
``(i) notify and consult with the appropriate
State regarding any potential inconsistency or
preemption;
``(ii) notify and consult with the United
States Trade Representative regarding any
potential inconsistency or preemption;
``(iii) <>  cause to be published in the
Federal Register notice of the issue regarding the
potential inconsistency or preemption, including a
description of each State insurance measure at
issue and any applicable covered agreement;
``(iv) <> provide interested
parties a reasonable opportunity to submit written
comments to the Office; and
``(v) consider any comments received.
``(B) Scope of review.--For purposes of this
subsection, any determination of the Director regarding
State insurance measures, and any preemption under
paragraph (1) as a result of such determination, shall
be limited

[[Page 1584]]

to the subject matter contained within the covered
agreement involved and shall achieve a level of
protection for insurance or reinsurance consumers that
is substantially equivalent to the level of protection
achieved under State insurance or reinsurance
regulation.
``(C) Notice of determination of inconsistency.--
Upon making any determination under paragraph (1), the
Director shall--
``(i) notify the appropriate State of the
determination and the extent of the inconsistency;
``(ii) establish a reasonable period of time,
which shall not be less than 30 days, before the
determination shall become effective; and
``(iii) notify the Committees on Financial
Services and Ways and Means of the House of
Representatives and the Committees on Banking,
Housing, and Urban Affairs and Finance of the
Senate.
``(3) Notice of effectiveness.--Upon the conclusion of the
period referred to in paragraph (2)(C)(ii), if the basis for
such determination still exists, the determination shall become
effective and the Director shall--
``(A) cause to be published a notice in the Federal
Register that the preemption has become effective, as
well as the effective date; and
``(B) notify the appropriate State.
``(4) Limitation.--No State may enforce a State insurance
measure to the extent that such measure has been preempted under
this subsection.

``(g) Applicability of Administrative Procedures Act.--
Determinations of inconsistency made pursuant to subsection (f)(2) shall
be subject to the applicable provisions of subchapter II of chapter 5 of
title 5, United States Code (relating to administrative procedure), and
chapter 7 of such title (relating to judicial review), except that in
any action for judicial review of a determination of inconsistency, the
court shall determine the matter de novo.
``(h) Regulations, Policies, and Procedures.--The Secretary may
issue orders, regulations, policies, and procedures to implement this
section.
``(i) Consultation.--The Director shall consult with State insurance
regulators, individually or collectively, to the extent the Director
determines appropriate, in carrying out the functions of the Office.
``(j) Savings Provisions.--Nothing in this section shall--
``(1) preempt--
``(A) any State insurance measure that governs any
insurer's rates, premiums, underwriting, or sales
practices;
``(B) any State coverage requirements for insurance;
``(C) the application of the antitrust laws of any
State to the business of insurance; or
``(D) any State insurance measure governing the
capital or solvency of an insurer, except to the extent
that such State insurance measure results in less
favorable treatment of a non-United State insurer than a
United States insurer;
``(2) be construed to alter, amend, or limit any provision
of the Consumer Financial Protection Agency Act of 2010; or
``(3) affect the preemption of any State insurance measure
otherwise inconsistent with and preempted by Federal law.

[[Page 1585]]

``(k) Retention of Existing State Regulatory Authority.--Nothing in
this section or section 314 shall be construed to establish or provide
the Office or the Department of the Treasury with general supervisory or
regulatory authority over the business of insurance.
``(l) Retention of Authority of Federal Financial Regulatory
Agencies.--Nothing in this section or section 314 shall be construed to
limit the authority of any Federal financial regulatory agency,
including the authority to develop and coordinate policy, negotiate, and
enter into agreements with foreign governments, authorities, regulators,
and multinational regulatory committees and to preempt State measures to
affect uniformity with international regulatory agreements.
``(m) Retention of Authority of United States Trade
Representative.--Nothing in this section or section 314 shall be
construed to affect the authority of the Office of the United States
Trade Representative pursuant to section 141 of the Trade Act of 1974
(19 U.S.C. 2171) or any other provision of law, including authority over
the development and coordination of United States international trade
policy and the administration of the United States trade agreements
program.
``(n) Annual Reports to Congress.--
``(1) Section 313(f) reports.--Beginning September 30, 2011,
the Director shall submit a report on or before September 30 of
each calendar year to the President and to the Committees on
Financial Services and Ways and Means of the House of
Representatives and the Committees on Banking, Housing, and
Urban Affairs and Finance of the Senate on any actions taken by
the Office pursuant to subsection (f) (regarding preemption of
inconsistent State insurance measures).
``(2) Insurance industry.--Beginning September 30, 2011, the
Director shall submit a report on or before September 30 of each
calendar year to the President and to the Committee on Financial
Services of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate on the
insurance industry and any other information as deemed relevant
by the Director or requested by such Committees.

``(o) Reports on U.S. and Global Reinsurance Market.--The Director
shall submit to the Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing, and Urban Affairs
of the Senate--
``(1) a report received not later than September 30, 2012,
describing the breadth and scope of the global reinsurance
market and the critical role such market plays in supporting
insurance in the United States; and
``(2) a report received not later than January 1, 2013, and
updated not later than January 1, 2015, describing the impact of
part II of the Nonadmitted and Reinsurance Reform Act of 2010 on
the ability of State regulators to access reinsurance
information for regulated companies in their jurisdictions.

``(p) Study and Report on Regulation of Insurance.--
``(1) In general.--Not later than 18 months after the date
of enactment of this section, the Director shall conduct a study
and submit a report to Congress on how to modernize and improve
the system of insurance regulation in the United States.

[[Page 1586]]

``(2) Considerations.--The study and report required under
paragraph (1) shall be based on and guided by the following
considerations:
``(A) Systemic risk regulation with respect to
insurance.
``(B) Capital standards and the relationship between
capital allocation and liabilities, including standards
relating to liquidity and duration risk.
``(C) Consumer protection for insurance products and
practices, including gaps in State regulation.
``(D) The degree of national uniformity of State
insurance regulation.
``(E) The regulation of insurance companies and
affiliates on a consolidated basis.
``(F) International coordination of insurance
regulation.
``(3) Additional factors.--The study and report required
under paragraph (1) shall also examine the following factors:
``(A) The costs and benefits of potential Federal
regulation of insurance across various lines of
insurance (except health insurance).
``(B) The feasibility of regulating only certain
lines of insurance at the Federal level, while leaving
other lines of insurance to be regulated at the State
level.
``(C) The ability of any potential Federal
regulation or Federal regulators to eliminate or
minimize regulatory arbitrage.
``(D) The impact that developments in the regulation
of insurance in foreign jurisdictions might have on the
potential Federal regulation of insurance.
``(E) The ability of any potential Federal
regulation or Federal regulator to provide robust
consumer protection for policyholders.
``(F) The potential consequences of subjecting
insurance companies to a Federal resolution authority,
including the effects of any Federal resolution
authority--
``(i) on the operation of State insurance
guaranty fund systems, including the loss of
guaranty fund coverage if an insurance company is
subject to a Federal resolution authority;
``(ii) on policyholder protection, including
the loss of the priority status of policyholder
claims over other unsecured general creditor
claims;
``(iii) in the case of life insurance
companies, on the loss of the special status of
separate account assets and separate account
liabilities; and
``(iv) on the international competitiveness of
insurance companies.
``(G) Such other factors as the Director determines
necessary or appropriate, consistent with the principles
set forth in paragraph (2).
``(4) Required recommendations.--The study and report
required under paragraph (1) shall also contain any legislative,
administrative, or regulatory recommendations, as the Director
determines appropriate, to carry out or effectuate the findings
set forth in such report.
``(5) Consultation.--With respect to the study and report
required under paragraph (1), the Director shall consult with

[[Page 1587]]

the State insurance regulators, consumer organizations,
representatives of the insurance industry and policyholders, and
other organizations and experts, as appropriate.

``(q) Use of Existing Resources.--To carry out this section, the
Office may employ personnel, facilities, and any other resource of the
Department of the Treasury available to the Secretary and the Secretary
shall dedicate specific personnel to the Office.
``(r) Definitions.--In this section and section 314, the following
definitions shall apply:
``(1) Affiliate.--The term `affiliate' means, with respect
to an insurer, any person who controls, is controlled by, or is
under common control with the insurer.
``(2) Covered agreement.--The term `covered agreement' means
a written bilateral or multilateral agreement regarding
prudential measures with respect to the business of insurance or
reinsurance that--
``(A) is entered into between the United States and
one or more foreign governments, authorities, or
regulatory entities; and
``(B) relates to the recognition of prudential
measures with respect to the business of insurance or
reinsurance that achieves a level of protection for
insurance or reinsurance consumers that is substantially
equivalent to the level of protection achieved under
State insurance or reinsurance regulation.
``(3) Insurer.--The term `insurer' means any person engaged
in the business of insurance, including reinsurance.
``(4) Federal financial regulatory agency.--The term
`Federal financial regulatory agency' means the Department of
the Treasury, the Board of Governors of the Federal Reserve
System, the Office of the Comptroller of the Currency, the
Office of Thrift Supervision, the Securities and Exchange
Commission, the Commodity Futures Trading Commission, the
Federal Deposit Insurance Corporation, the Federal Housing
Finance Agency, or the National Credit Union Administration.
``(5) Non-united states insurer.--The term `non-United
States insurer' means an insurer that is organized under the
laws of a jurisdiction other than a State, but does not include
any United States branch of such an insurer.
``(6) Office.--The term `Office' means the Federal Insurance
Office established by this section.
``(7) State insurance measure.--The term `State insurance
measure' means any State law, regulation, administrative ruling,
bulletin, guideline, or practice relating to or affecting
prudential measures applicable to insurance or reinsurance.
``(8) State insurance regulator.--The term `State insurance
regulator' means any State regulatory authority responsible for
the supervision of insurers.
``(9) Substantially equivalent to the level of protection
achieved.--The term `substantially equivalent to the level of
protection achieved' means the prudential measures of a foreign
government, authority, or regulatory entity achieve a similar
outcome in consumer protection as the outcome achieved under
State insurance or reinsurance regulation.
``(10) United states insurer.--The term `United States
insurer' means--

[[Page 1588]]

``(A) an insurer that is organized under the laws of
a State; or
``(B) a United States branch of a non-United States
insurer.

``(s) Authorization of Appropriations.--There are authorized to be
appropriated for the Office for each fiscal year such sums as may be
necessary.
``SEC. 314. COVERED AGREEMENTS.

``(a) Authority.--The Secretary and the United States Trade
Representative are authorized, jointly, to negotiate and enter into
covered agreements on behalf of the United States.
``(b) Requirements for Consultation With Congress.--
``(1) In general.--Before initiating negotiations to enter
into a covered agreement under subsection (a), during such
negotiations, and before entering into any such agreement, the
Secretary and the United States Trade Representative shall
jointly consult with the Committee on Financial Services and the
Committee on Ways and Means of the House of Representatives and
the Committee on Banking, Housing, and Urban Affairs and the
Committee on Finance of the Senate.
``(2) Scope.--The consultation described in paragraph (1)
shall include consultation with respect to--
``(A) the nature of the agreement;
``(B) how and to what extent the agreement will
achieve the applicable purposes, policies, priorities,
and objectives of section 313 and this section; and
``(C) the implementation of the agreement, including
the general effect of the agreement on existing State
laws.

``(c) Submission and Layover Provisions.--A covered agreement under
subsection (a) may enter into force with respect to the United States
only if--
``(1) the Secretary and the United States Trade
Representative jointly submit to the congressional committees
specified in subsection (b)(1), on a day on which both Houses of
Congress are in session, a copy of the final legal text of the
agreement; and
``(2) <> a period of 90 calendar days
beginning on the date on which the copy of the final legal text
of the agreement is submitted to the congressional committees
under paragraph (1) has expired.''.

(b) Duties of Secretary.--Section 321(a) of title 31, United States
Code, is amended--
(1) in paragraph (7), by striking ``; and'' and inserting a
semicolon;
(2) in paragraph (8)(C), by striking the period at the end
and inserting ``; and''; and
(3) by adding at the end the following new paragraph:
``(9) advise the President on major domestic and
international prudential policy issues in connection with all
lines of insurance except health insurance.''.

(c) Clerical Amendment.--The table of sections for subchapter I of
chapter 3 of title 31, United States Code, is amended by striking the
item relating to section 312 and inserting the following new items:

``Sec. 312. Terrorism and financial intelligence.
``Sec. 313. Federal Insurance Office.

[[Page 1589]]

``Sec. 314. Covered agreements.
``Sec. 315. Continuing in office.''.

Subtitle <>  B--State-Based Insurance Reform
SEC. 511. SHORT TITLE.

This subtitle may be cited as the ``Nonadmitted and Reinsurance
Reform Act of 2010''.
SEC. 512. <>  EFFECTIVE DATE.

Except as otherwise specifically provided in this subtitle, this
subtitle shall take effect upon the expiration of the 12-month period
beginning on the date of the enactment of this subtitle.

PART I--NONADMITTED INSURANCE

SEC. 521. <> REPORTING, PAYMENT, AND
ALLOCATION OF PREMIUM TAXES.

(a) Home State's Exclusive Authority.--No State other than the home
State of an insured may require any premium tax payment for nonadmitted
insurance.
(b) Allocation of Nonadmitted Premium Taxes.--
(1) In general.--The States may enter into a compact or
otherwise establish procedures to allocate among the States the
premium taxes paid to an insured's home State described in
subsection (a).
(2) <> Effective date.--Except as
expressly otherwise provided in such compact or other
procedures, any such compact or other procedures--
(A) if adopted on or before the expiration of the
330-day period that begins on the date of the enactment
of this subtitle, shall apply to any premium taxes that,
on or after such date of enactment, are required to be
paid to any State that is subject to such compact or
procedures; and
(B) if adopted after the expiration of such 330-day
period, shall apply to any premium taxes that, on or
after January 1 of the first calendar year that begins
after the expiration of such 330-day period, are
required to be paid to any State that is subject to such
compact or procedures.
(3) Report.--Upon the expiration of the 330-day period
referred to in paragraph (2), the NAIC may submit a report to
the Committee on Financial Services and the Committee on the
Judiciary of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate identifying
and describing any compact or other procedures for allocation
among the States of premium taxes that have been adopted during
such period by any States.
(4) Nationwide system.--The Congress intends that each State
adopt nationwide uniform requirements, forms, and procedures,
such as an interstate compact, that provide for the reporting,
payment, collection, and allocation of premium taxes for
nonadmitted insurance consistent with this section.

(c) Allocation Based on Tax Allocation Report.--To facilitate the
payment of premium taxes among the States, an insured's home State may
require surplus lines brokers and insureds who

[[Page 1590]]

have independently procured insurance to annually file tax allocation
reports with the insured's home State detailing the portion of the
nonadmitted insurance policy premium or premiums attributable to
properties, risks, or exposures located in each State. The filing of a
nonadmitted insurance tax allocation report and the payment of tax may
be made by a person authorized by the insured to act as its agent.
SEC. 522. <> REGULATION OF NONADMITTED
INSURANCE BY INSURED'S HOME STATE.

(a) Home State Authority.--Except as otherwise provided in this
section, the placement of nonadmitted insurance shall be subject to the
statutory and regulatory requirements solely of the insured's home
State.
(b) Broker Licensing.--No State other than an insured's home State
may require a surplus lines broker to be licensed in order to sell,
solicit, or negotiate nonadmitted insurance with respect to such
insured.
(c) Enforcement Provision.--With respect to section 521 and
subsections (a) and (b) of this section, any law, regulation, provision,
or action of any State that applies or purports to apply to nonadmitted
insurance sold to, solicited by, or negotiated with an insured whose
home State is another State shall be preempted with respect to such
application.
(d) Workers' Compensation Exception.--This section may not be
construed to preempt any State law, rule, or regulation that restricts
the placement of workers' compensation insurance or excess insurance for
self-funded workers' compensation plans with a nonadmitted insurer.
SEC. 523. <> PARTICIPATION IN NATIONAL
PRODUCER DATABASE.

<> After the expiration of the 2-year period
beginning on the date of the enactment of this subtitle, a State may not
collect any fees relating to licensing of an individual or entity as a
surplus lines broker in the State unless the State has in effect at such
time laws or regulations that provide for participation by the State in
the national insurance producer database of the NAIC, or any other
equivalent uniform national database, for the licensure of surplus lines
brokers and the renewal of such licenses.
SEC. 524. <>  UNIFORM STANDARDS FOR SURPLUS
LINES ELIGIBILITY.

A State may not--
(1) impose eligibility requirements on, or otherwise
establish eligibility criteria for, nonadmitted insurers
domiciled in a United States jurisdiction, except in conformance
with such requirements and criteria in sections 5A(2) and
5C(2)(a) of the Non-Admitted Insurance Model Act, unless the
State has adopted nationwide uniform requirements, forms, and
procedures developed in accordance with section 521(b) of this
subtitle that include alternative nationwide uniform eligibility
requirements; or
(2) prohibit a surplus lines broker from placing nonadmitted
insurance with, or procuring nonadmitted insurance from, a
nonadmitted insurer domiciled outside the United States that is
listed on the Quarterly Listing of Alien Insurers maintained by
the International Insurers Department of the NAIC.

[[Page 1591]]

SEC. 525. <> STREAMLINED APPLICATION FOR
COMMERCIAL PURCHASERS.

A surplus lines broker seeking to procure or place nonadmitted
insurance in a State for an exempt commercial purchaser shall not be
required to satisfy any State requirement to make a due diligence search
to determine whether the full amount or type of insurance sought by such
exempt commercial purchaser can be obtained from admitted insurers if--
(1) the broker procuring or placing the surplus lines
insurance has disclosed to the exempt commercial purchaser that
such insurance may or may not be available from the admitted
market that may provide greater protection with more regulatory
oversight; and
(2) <> the exempt commercial
purchaser has subsequently requested in writing the broker to
procure or place such insurance from a nonadmitted insurer.
SEC. 526. GAO STUDY OF NONADMITTED INSURANCE MARKET.

(a) In General.--The Comptroller General of the United States shall
conduct a study of the nonadmitted insurance market to determine the
effect of the enactment of this part on the size and market share of the
nonadmitted insurance market for providing coverage typically provided
by the admitted insurance market.
(b) Contents.--The study shall determine and analyze--
(1) the change in the size and market share of the
nonadmitted insurance market and in the number of insurance
companies and insurance holding companies providing such
business in the 18-month period that begins upon the effective
date of this subtitle;
(2) the extent to which insurance coverage typically
provided by the admitted insurance market has shifted to the
nonadmitted insurance market;
(3) the consequences of any change in the size and market
share of the nonadmitted insurance market, including differences
in the price and availability of coverage available in both the
admitted and nonadmitted insurance markets;
(4) the extent to which insurance companies and insurance
holding companies that provide both admitted and nonadmitted
insurance have experienced shifts in the volume of business
between admitted and nonadmitted insurance; and
(5) the extent to which there has been a change in the
number of individuals who have nonadmitted insurance policies,
the type of coverage provided under such policies, and whether
such coverage is available in the admitted insurance market.

(c) Consultation With NAIC.--In conducting the study under this
section, the Comptroller General shall consult with the NAIC.
(d) Report.--The Comptroller General shall complete the study under
this section and submit a report to the Committee on Banking, Housing,
and Urban Affairs of the Senate and the Committee on Financial Services
of the House of Representatives regarding the findings of the study not
later than 30 months after the effective date of this subtitle.
SEC. 527. <> DEFINITIONS.

For purposes of this part, the following definitions shall apply:

[[Page 1592]]

(1) Admitted insurer.--The term ``admitted insurer'' means,
with respect to a State, an insurer licensed to engage in the
business of insurance in such State.
(2) Affiliate.--The term ``affiliate'' means, with respect
to an insured, any entity that controls, is controlled by, or is
under common control with the insured.
(3) Affiliated group.--The term ``affiliated group'' means
any group of entities that are all affiliated.
(4) Control.--An entity has ``control'' over another entity
if--
(A) the entity directly or indirectly or acting
through 1 or more other persons owns, controls, or has
the power to vote 25 percent or more of any class of
voting securities of the other entity; or
(B) the entity controls in any manner the election
of a majority of the directors or trustees of the other
entity.
(5) Exempt commercial purchaser.--The term ``exempt
commercial purchaser'' means any person purchasing commercial
insurance that, at the time of placement, meets the following
requirements:
(A) The person employs or retains a qualified risk
manager to negotiate insurance coverage.
(B) The person has paid aggregate nationwide
commercial property and casualty insurance premiums in
excess of $100,000 in the immediately preceding 12
months.
(C)(i) The person meets at least 1 of the following
criteria:
(I) The person possesses a net worth in excess
of $20,000,000, as such amount is adjusted
pursuant to clause (ii).
(II) The person generates annual revenues in
excess of $50,000,000, as such amount is adjusted
pursuant to clause (ii).
(III) The person employs more than 500 full-
time or full-time equivalent employees per
individual insured or is a member of an affiliated
group employing more than 1,000 employees in the
aggregate.
(IV) The person is a not-for-profit
organization or public entity generating annual
budgeted expenditures of at least $30,000,000, as
such amount is adjusted pursuant to clause (ii).
(V) The person is a municipality with a
population in excess of 50,000 persons.
(ii) <> Effective on the
fifth January 1 occurring after the date of the
enactment of this subtitle and each fifth January 1
occurring thereafter, the amounts in subclauses (I),
(II), and (IV) of clause (i) shall be adjusted to
reflect the percentage change for such 5-year period in
the Consumer Price Index for All Urban Consumers
published by the Bureau of Labor Statistics of the
Department of Labor.
(6) Home state.--
(A) In general.--Except as provided in subparagraph
(B), the term ``home State'' means, with respect to an
insured--

[[Page 1593]]

(i) the State in which an insured maintains
its principal place of business or, in the case of
an individual, the individual's principal
residence; or
(ii) if 100 percent of the insured risk is
located out of the State referred to in clause
(i), the State to which the greatest percentage of
the insured's taxable premium for that insurance
contract is allocated.
(B) Affiliated groups.--If more than 1 insured from
an affiliated group are named insureds on a single
nonadmitted insurance contract, the term ``home State''
means the home State, as determined pursuant to
subparagraph (A), of the member of the affiliated group
that has the largest percentage of premium attributed to
it under such insurance contract.
(7) Independently procured insurance.--The term
``independently procured insurance'' means insurance procured
directly by an insured from a nonadmitted insurer.
(8) NAIC.--The term ``NAIC'' means the National Association
of Insurance Commissioners or any successor entity.
(9) Nonadmitted insurance.--The term ``nonadmitted
insurance'' means any property and casualty insurance permitted
to be placed directly or through a surplus lines broker with a
nonadmitted insurer eligible to accept such insurance.
(10) Non-admitted insurance model act.--The term ``Non-
Admitted Insurance Model Act'' means the provisions of the Non-
Admitted Insurance Model Act, as adopted by the NAIC on August
3, 1994, and amended on September 30, 1996, December 6, 1997,
October 2, 1999, and June 8, 2002.
(11) Nonadmitted insurer.--The term ``nonadmitted
insurer''--
(A) means, with respect to a State, an insurer not
licensed to engage in the business of insurance in such
State; but
(B) does not include a risk retention group, as that
term is defined in section 2(a)(4) of the Liability Risk
Retention Act of 1986 (15 U.S.C. 3901(a)(4)).
(12) Premium tax.--The term ``premium tax'' means, with
respect to surplus lines or independently procured insurance
coverage, any tax, fee, assessment, or other charge imposed by a
government entity directly or indirectly based on any payment
made as consideration for an insurance contract for such
insurance, including premium deposits, assessments, registration
fees, and any other compensation given in consideration for a
contract of insurance.
(13) Qualified risk manager.--The term ``qualified risk
manager'' means, with respect to a policyholder of commercial
insurance, a person who meets all of the following requirements:
(A) The person is an employee of, or third-party
consultant retained by, the commercial policyholder.
(B) The person provides skilled services in loss
prevention, loss reduction, or risk and insurance
coverage analysis, and purchase of insurance.
(C) The person--
(i)(I) has a bachelor's degree or higher from
an accredited college or university in risk
management, business administration, finance,
economics, or any

[[Page 1594]]

other field determined by a State insurance
commissioner or other State regulatory official or
entity to demonstrate minimum competence in risk
management; and
(II)(aa) has 3 years of experience in risk
financing, claims administration, loss prevention,
risk and insurance analysis, or purchasing
commercial lines of insurance; or
(bb) has--
(AA) a designation as a Chartered
Property and Casualty Underwriter (in
this subparagraph referred to as
``CPCU'') issued by the American
Institute for CPCU/Insurance Institute
of America;
(BB) a designation as an Associate
in Risk Management (ARM) issued by the
American Institute for CPCU/Insurance
Institute of America;
(CC) a designation as Certified Risk
Manager (CRM) issued by the National
Alliance for Insurance Education &
Research;
(DD) a designation as a RIMS Fellow
(RF) issued by the Global Risk
Management Institute; or
(EE) any other designation,
certification, or license determined by
a State insurance commissioner or other
State insurance regulatory official or
entity to demonstrate minimum competency
in risk management;
(ii)(I) has at least 7 years of experience in
risk financing, claims administration, loss
prevention, risk and insurance coverage analysis,
or purchasing commercial lines of insurance; and
(II) has any 1 of the designations specified
in subitems (AA) through (EE) of clause
(i)(II)(bb);
(iii) has at least 10 years of experience in
risk financing, claims administration, loss
prevention, risk and insurance coverage analysis,
or purchasing commercial lines of insurance; or
(iv) has a graduate degree from an accredited
college or university in risk management, business
administration, finance, economics, or any other
field determined by a State insurance commissioner
or other State regulatory official or entity to
demonstrate minimum competence in risk management.
(14) Reinsurance.--The term ``reinsurance'' means the
assumption by an insurer of all or part of a risk undertaken
originally by another insurer.
(15) Surplus lines broker.--The term ``surplus lines
broker'' means an individual, firm, or corporation which is
licensed in a State to sell, solicit, or negotiate insurance on
properties, risks, or exposures located or to be performed in a
State with nonadmitted insurers.
(16) State.--The term ``State'' includes any State of the
United States, the District of Columbia, the Commonwealth of
Puerto Rico, Guam, the Northern Mariana Islands, the Virgin
Islands, and American Samoa.

[[Page 1595]]

PART II--REINSURANCE

SEC. 531. <>  REGULATION OF CREDIT FOR
REINSURANCE AND REINSURANCE AGREEMENTS.

(a) Credit for Reinsurance.--If the State of domicile of a ceding
insurer is an NAIC-accredited State, or has financial solvency
requirements substantially similar to the requirements necessary for
NAIC accreditation, and recognizes credit for reinsurance for the
insurer's ceded risk, then no other State may deny such credit for
reinsurance.
(b) Additional Preemption of Extraterritorial Application of State
Law.--In addition to the application of subsection (a), all laws,
regulations, provisions, or other actions of a State that is not the
domiciliary State of the ceding insurer, except those with respect to
taxes and assessments on insurance companies or insurance income, are
preempted to the extent that they--
(1) restrict or eliminate the rights of the ceding insurer
or the assuming insurer to resolve disputes pursuant to
contractual arbitration to the extent such contractual provision
is not inconsistent with the provisions of title 9, United
States Code;
(2) require that a certain State's law shall govern the
reinsurance contract, disputes arising from the reinsurance
contract, or requirements of the reinsurance contract;
(3) attempt to enforce a reinsurance contract on terms
different than those set forth in the reinsurance contract, to
the extent that the terms are not inconsistent with this part;
or
(4) otherwise apply the laws of the State to reinsurance
agreements of ceding insurers not domiciled in that State.
SEC. 532. <>  REGULATION OF REINSURER
SOLVENCY.

(a) Domiciliary State Regulation.--If the State of domicile of a
reinsurer is an NAIC-accredited State or has financial solvency
requirements substantially similar to the requirements necessary for
NAIC accreditation, such State shall be solely responsible for
regulating the financial solvency of the reinsurer.
(b) Nondomiciliary States.--
(1) Limitation on financial information requirements.--If
the State of domicile of a reinsurer is an NAIC-accredited State
or has financial solvency requirements substantially similar to
the requirements necessary for NAIC accreditation, no other
State may require the reinsurer to provide any additional
financial information other than the information the reinsurer
is required to file with its domiciliary State.
(2) Receipt of information.--No provision of this section
shall be construed as preventing or prohibiting a State that is
not the State of domicile of a reinsurer from receiving a copy
of any financial statement filed with its domiciliary State.
SEC. 533. <>  DEFINITIONS.

For purposes of this part, the following definitions shall apply:
(1) Ceding insurer.--The term ``ceding insurer'' means an
insurer that purchases reinsurance.
(2) Domiciliary state.--The terms ``State of domicile'' and
``domiciliary State'' mean, with respect to an insurer or

[[Page 1596]]

reinsurer, the State in which the insurer or reinsurer is
incorporated or entered through, and licensed.
(3) NAIC.--The term ``NAIC'' means the National Association
of Insurance Commissioners or any successor entity.
(4) Reinsurance.--The term ``reinsurance'' means the
assumption by an insurer of all or part of a risk undertaken
originally by another insurer.
(5) Reinsurer.--
(A) In general.--The term ``reinsurer'' means an
insurer to the extent that the insurer--
(i) is principally engaged in the business of
reinsurance;
(ii) does not conduct significant amounts of
direct insurance as a percentage of its net
premiums; and
(iii) is not engaged in an ongoing basis in
the business of soliciting direct insurance.
(B) Determination.--A determination of whether an
insurer is a reinsurer shall be made under the laws of
the State of domicile in accordance with this paragraph.
(6) State.--The term ``State'' includes any State of the
United States, the District of Columbia, the Commonwealth of
Puerto Rico, Guam, the Northern Mariana Islands, the Virgin
Islands, and American Samoa.

PART III--RULE OF CONSTRUCTION

SEC. 541. <> RULE OF CONSTRUCTION.

Nothing in this subtitle or the amendments made by this subtitle
shall be construed to modify, impair, or supersede the application of
the antitrust laws. Any implied or actual conflict between this subtitle
and any amendments to this subtitle and the antitrust laws shall be
resolved in favor of the operation of the antitrust laws.
SEC. 542. <>  SEVERABILITY.

If any section or subsection of this subtitle, or any application of
such provision to any person or circumstance, is held to be
unconstitutional, the remainder of this subtitle, and the application of
the provision to any other person or circumstance, shall not be
affected.

TITLE VI--IMPROVEMENTS TO <>  REGULATION OF BANK AND SAVINGS ASSOCIATION
HOLDING COMPANIES AND DEPOSITORY INSTITUTIONS
SEC. 601. SHORT TITLE.

This title may be cited as the ``Bank and Savings Association
Holding Company and Depository Institution Regulatory Improvements Act
of 2010''.
SEC. 602. <>  DEFINITION.

For purposes of this title, a company is a ``commercial firm'' if
the annual gross revenues derived by the company and all of its
affiliates from activities that are financial in nature (as defined

[[Page 1597]]

in section 4(k) of the Bank Holding Company Act of 1956 (12 U.S.C.
1843(k))) and, if applicable, from the ownership or control of one or
more insured depository institutions, represent less than 15 percent of
the consolidated annual gross revenues of the company.
SEC. 603. MORATORIUM AND STUDY ON TREATMENT OF CREDIT CARD BANKS,
INDUSTRIAL LOAN COMPANIES, AND CERTAIN
OTHER COMPANIES UNDER THE BANK HOLDING
COMPANY ACT OF 1956.

(a) <>  Moratorium.--
(1) Definitions.--In this subsection--
(A) the term ``credit card bank'' means an
institution described in section 2(c)(2)(F) of the Bank
Holding Company Act of 1956 (12 U.S.C. 1841(c)(2)(F));
(B) the term ``industrial bank'' means an
institution described in section 2(c)(2)(H) of the Bank
Holding Company Act of 1956 (12 U.S.C. 1841(c)(2)(H));
and
(C) the term ``trust bank'' means 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)).
(2) Moratorium on provision of deposit insurance.--The
Corporation may not approve an application for deposit insurance
under section 5 of the Federal Deposit Insurance Act (12 U.S.C.
1815) that is received after November 23, 2009, for an
industrial bank, a credit card bank, or a trust bank that is
directly or indirectly owned or controlled by a commercial firm.
(3) Change in control.--
(A) In general.--Except as provided in subparagraph
(B), the appropriate Federal banking agency shall
disapprove a change in control, as provided in section
7(j) of the Federal Deposit Insurance Act (12 U.S.C.
1817(j)), of an industrial bank, a credit card bank, or
a trust bank if the change in control would result in
direct or indirect control of the industrial bank,
credit card bank, or trust bank by a commercial firm.
(B) Exceptions.--Subparagraph (A) shall not apply to
a change in control of an industrial bank, credit card
bank, or trust bank--
(i) that--
(I) is in danger of default, as
determined by the appropriate Federal
banking agency;
(II) results from the merger or
whole acquisition of a commercial firm
that directly or indirectly controls the
industrial bank, credit card bank, or
trust bank in a bona fide merger with or
acquisition by another commercial firm,
as determined by the appropriate Federal
banking agency; or
(III) results from an acquisition of
voting shares of a publicly traded
company that controls an industrial
bank, credit card bank, or trust bank,
if, after the acquisition, the acquiring
shareholder (or group of shareholders
acting in concert) holds less than 25
percent of any class of the voting
shares of the company; and

[[Page 1598]]

(ii) that has obtained all regulatory
approvals otherwise required for such change of
control under any applicable Federal or State law,
including section 7(j) of the Federal Deposit
Insurance Act (12 U.S.C. 1817(j)).
(4) Sunset.--This subsection shall cease to have effect 3
years after the date of enactment of this Act.

(b) Government Accountability Office Study of Exceptions Under the
Bank Holding Company Act of 1956.--
(1) Study required.--The Comptroller General of the United
States shall carry out a study to determine whether it is
necessary, in order to strengthen the safety and soundness of
institutions or the stability of the financial system, to
eliminate the exceptions under section 2 of the Bank Holding
Company Act of 1956 (12 U.S.C. 1841) for institutions described
in--
(A) section 2(a)(5)(E) of the Bank Holding Company
Act of 1956 (12 U.S.C. 1841(a)(5)(E));
(B) section 2(a)(5)(F) of the Bank Holding Company
Act of 1956 (12 U.S.C. 1841(a)(5)(F));
(C) section 2(c)(2)(D) of the Bank Holding Company
Act of 1956 (12 U.S.C. 1841(c)(2)(D));
(D) section 2(c)(2)(F) of the Bank Holding Company
Act of 1956 (12 U.S.C. 1841(c)(2)(F));
(E) section 2(c)(2)(H) of the Bank Holding Company
Act of 1956 (12 U.S.C. 1841(c)(2)(H)); and
(F) section 2(c)(2)(B) of the Bank Holding Company
Act of 1956 (12 U.S.C. 1841(c)(2)(B)).
(2) Content of study.--
(A) In general.--The study required under paragraph
(1), with respect to the institutions referenced in each
of subparagraphs (A) through (E) of paragraph (1),
shall, to the extent feasible be based on information
provided to the Comptroller General by the appropriate
Federal or State regulator, and shall--
(i) identify the types and number of
institutions excepted from section 2 of the Bank
Holding Company Act of 1956 (12 U.S.C. 1841) under
each of the subparagraphs described in
subparagraphs (A) through (E) of paragraph (1);
(ii) generally describe the size and
geographic locations of the institutions described
in clause (i);
(iii) determine the extent to which the
institutions described in clause (i) are held by
holding companies that are commercial firms;
(iv) determine whether the institutions
described in clause (i) have any affiliates that
are commercial firms;
(v) identify the Federal banking agency
responsible for the supervision of the
institutions described in clause (i) on and after
the transfer date;
(vi) determine the adequacy of the Federal
bank regulatory framework applicable to each
category of institution described in clause (i),
including any restrictions (including limitations
on affiliate transactions or cross-marketing) that
apply to transactions between

[[Page 1599]]

an institution, the holding company of the
institution, and any other affiliate of the
institution; and
(vii) evaluate the potential consequences of
subjecting the institutions described in clause
(i) to the requirements of the Bank Holding
Company Act of 1956, including with respect to the
availability and allocation of credit, the
stability of the financial system and the economy,
the safe and sound operation of each category of
institution, and the impact on the types of
activities in which such institutions, and the
holding companies of such institutions, may
engage.
(B) Savings associations.--With respect to
institutions described in paragraph (1)(F), the study
required under paragraph (1) shall--
(i) determine the adequacy of the Federal bank
regulatory framework applicable to such
institutions, including any restrictions
(including limitations on affiliate transactions
or cross-marketing) that apply to transactions
between an institution, the holding company of the
institution, and any other affiliate of the
institution; and
(ii) evaluate the potential consequences of
subjecting the institutions described in paragraph
(1)(F) to the requirements of the Bank Holding
Company Act of 1956, including with respect to the
availability and allocation of credit, the
stability of the financial system and the economy,
the safe and sound operation of such institutions,
and the impact on the types of activities in which
such institutions, and the holding companies of
such institutions, may engage.
(3) Report.--Not later than 18 months 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).
SEC. 604. REPORTS AND EXAMINATIONS OF HOLDING COMPANIES;
REGULATION OF FUNCTIONALLY REGULATED
SUBSIDIARIES.

(a) Reports by Bank Holding Companies.--Sections 5(c)(1) of the Bank
Holding Company Act of 1956 (12 U.S.C. 1844(c)(1)) is amended--
(1) by striking subclause (A)(ii) and inserting the
following:
``(ii) compliance by the bank holding company
or subsidiary with--
``(I) this Act;
``(II) Federal laws that the Board
has specific jurisdiction to enforce
against the company or subsidiary; and
``(III) other than in the case of an
insured depository institution or
functionally regulated subsidiary, any
other applicable provision of Federal
law.'';
(2) by striking subparagraph (B) and inserting the
following:

[[Page 1600]]

``(B) Use of existing reports and other supervisory
information.--The Board shall, to the fullest extent
possible, use--
``(i) reports and other supervisory
information that the bank holding company or any
subsidiary thereof has been required to provide to
other Federal or State regulatory agencies;
``(ii) externally audited financial statements
of the bank holding company or subsidiary;
``(iii) information otherwise available from
Federal or State regulatory agencies; and
``(iv) information that is otherwise required
to be reported publicly.''; and
(3) by adding at the end the following:
``(C) Availability.--Upon the request of the Board,
the bank holding company or a subsidiary of the bank
holding company shall promptly provide to the Board any
information described in clauses (i) through (iii) of
subparagraph (B).''.

(b) Examinations of Bank Holding Companies.--Section 5(c)(2) of the
Bank Holding Company Act of 1956 (12 U.S.C. 1844(c)(2)) is amended to
read as follows:
``(2) Examinations.--
``(A) In general.--Subject to subtitle B of the
Consumer Financial Protection Act of 2010, the Board may
make examinations of a bank holding company and each
subsidiary of a bank holding company in order to--
``(i) inform the Board of--
``(I) the nature of the operations
and financial condition of the bank
holding company and the subsidiary;
``(II) the financial, operational,
and other risks within the bank holding
company system that may pose a threat
to--
``(aa) the safety and
soundness of the bank holding
company or of any depository
institution subsidiary of the
bank holding company; or
``(bb) the stability of the
financial system of the United
States; and
``(III) the systems of the bank
holding company for monitoring and
controlling the risks described in
subclause (II); and
``(ii) monitor the compliance of the bank
holding company and the subsidiary with--
``(I) this Act;
``(II) Federal laws that the Board
has specific jurisdiction to enforce
against the company or subsidiary; and
``(III) other than in the case of an
insured depository institution or
functionally regulated subsidiary, any
other applicable provisions of Federal
law.
``(B) Use of reports to reduce examinations.--For
purposes of this paragraph, the Board shall, to the
fullest extent possible, rely on--

[[Page 1601]]

``(i) examination reports made by other
Federal or State regulatory agencies relating to a
bank holding company and any subsidiary of a bank
holding company; and
``(ii) the reports and other information
required under paragraph (1).
``(C) Coordination with other regulators.--The Board
shall--
``(i) <> provide
reasonable notice to, and consult with, the
appropriate Federal banking agency, the Securities
and Exchange Commission, the Commodity Futures
Trading Commission, or State regulatory agency, as
appropriate, for a subsidiary that is a depository
institution or a functionally regulated subsidiary
of a bank holding company before commencing an
examination of the subsidiary under this section;
and
``(ii) to the fullest extent possible, avoid
duplication of examination activities, reporting
requirements, and requests for information.''.

(c) Authority To Regulate Functionally Regulated Subsidiaries of
Bank Holding Companies.--The Bank Holding Company Act of 1956 (12 U.S.C.
1841 et seq.) is amended--
(1) in section 5(c)(5)(B) (12 U.S.C. 1844(c)(5)(B)), by
striking clause (v) and inserting the following:
``(v) an entity that is subject to regulation
by, or registration with, the Commodity Futures
Trading Commission, with respect to activities
conducted as a futures commission merchant,
commodity trading adviser, commodity pool,
commodity pool operator, swap execution facility,
swap data repository, swap dealer, major swap
participant, and activities that are incidental to
such commodities and swaps activities.''; and
(2) by striking section 10A (12 U.S.C. 1848a).

(d) Acquisitions of Banks.--Section 3(c) of the Bank Holding Company
Act of 1956 (12 U.S.C. 1842(c)) is amended by adding at the end the
following:
``(7) Financial stability.--In every case, the Board shall
take into consideration the extent to which a proposed
acquisition, merger, or consolidation would result in greater or
more concentrated risks to the stability of the United States
banking or financial system.''.

(e) Acquisitions of Nonbanks.--
(1) Notice procedures.--Section 4(j)(2)(A) of the Bank
Holding Company Act of 1956 (12 U.S.C. 1843(j)(2)(A)) is amended
by striking ``or unsound banking practices'' and inserting
``unsound banking practices, or risk to the stability of the
United States banking or financial system''.
(2) Activities that are financial in nature.--Section
4(k)(6)(B) of the Bank Holding Company Act of 1956 (12 U.S.C.
1843(k)(6)(B)) is amended to read as follows:
``(B) Approval not required for certain financial
activities.--
``(i) In general.--Except as provided in
subsection (j) with regard to the acquisition of a
savings association and clause (ii), a financial
holding company may

[[Page 1602]]

commence any activity, or acquire any company,
pursuant to paragraph (4) or any regulation
prescribed or order issued under paragraph (5),
without prior approval of the Board.
``(ii) Exception.--A financial holding company
may not acquire a company, without the prior
approval of the Board, in a transaction in which
the total consolidated assets to be acquired by
the financial holding company exceed
$10,000,000,000.
``(iii) Hart-Scott-Rodino filing
requirement.--Solely for purposes of section
7A(c)(8) of the Clayton Act (15 U.S.C. 18a(c)(8)),
the transactions subject to the requirements of
this paragraph shall be treated as if the approval
of the Board is not required.''.

(f) Bank Merger Act Transactions.--Section 18(c)(5) of the Federal
Deposit Insurance Act (12 U.S.C. 1828(c)(5)) is amended, in the matter
immediately following subparagraph (B), by striking ``and the
convenience and needs of the community to be served'' and inserting
``the convenience and needs of the community to be served, and the risk
to the stability of the United States banking or financial system''.
(g) Reports by Savings and Loan Holding Companies.--Section 10(b)(2)
of the Home Owners' Loan Act (12 U.S.C. 1467a(b)(2) is amended--
(1) by striking ``Each savings'' and inserting the
following:
``(A) In general.--Each savings''; and
(2) by adding at the end the following:
``(B) Use of existing reports and other supervisory
information.--The Board shall, to the fullest extent
possible, use--
``(i) reports and other supervisory
information that the savings and loan holding
company or any subsidiary thereof has been
required to provide to other Federal or State
regulatory agencies;
``(ii) externally audited financial statements
of the savings and loan holding company or
subsidiary;
``(iii) information that is otherwise
available from Federal or State regulatory
agencies; and
``(iv) information that is otherwise required
to be reported publicly.
``(C) Availability.--Upon the request of the Board,
a savings and loan holding company or a subsidiary of a
savings and loan holding company shall promptly provide
to the Board any information described in clauses (i)
through (iii) of subparagraph (B).''.

(h) Examination of Savings and Loan Holding Companies.--
(1) Definitions.--Section 2 of the Home Owners' Loan Act (12
U.S.C. 1462) is amended by adding at the end the following:
``(10) Appropriate federal banking agency.--The term
`appropriate Federal banking agency' has the same meaning as in
section 3(q) of the Federal Deposit Insurance Act (12 U.S.C.
1813(q)).
``(11) Functionally regulated subsidiary.--The term
`functionally regulated subsidiary' has the same meaning as in
section 5(c)(5) of the Bank Holding Company Act of 1956 (12
U.S.C. 1844(c)(5)).''.

[[Page 1603]]

(2) Examination.--Section 10(b) of the Home Owners' Loan Act
(12 U.S.C. 1467a(b)) is amended by striking paragraph (4) and
inserting the following:
``(4) Examinations.--
``(A) In general.--Subject to subtitle B of the
Consumer Financial Protection Act of 2010, the Board may
make examinations of a savings and loan holding company
and each subsidiary of a savings and loan holding
company system, in order to--
``(i) inform the Board of--
``(I) the nature of the operations
and financial condition of the savings
and loan holding company and the
subsidiary;
``(II) the financial, operational,
and other risks within the savings and
loan holding company system that may
pose a threat to--
``(aa) the safety and
soundness of the savings and
loan holding company or of any
depository institution
subsidiary of the savings and
loan holding company; or
``(bb) the stability of the
financial system of the United
States; and
``(III) the systems of the savings
and loan holding company for monitoring
and controlling the risks described in
subclause (II); and
``(ii) monitor the compliance of the savings
and loan holding company and the subsidiary with--
``(I) this Act;
``(II) Federal laws that the Board
has specific jurisdiction to enforce
against the company or subsidiary; and
``(III) other than in the case of an
insured depository institution or
functionally regulated subsidiary, any
other applicable provisions of Federal
law.
``(B) Use of reports to reduce examinations.--For
purposes of this subsection, the Board shall, to the
fullest extent possible, rely on--
``(i) the examination reports made by other
Federal or State regulatory agencies relating to a
savings and loan holding company and any
subsidiary; and
``(ii) the reports and other information
required under paragraph (2).
``(C) Coordination with other regulators.--The Board
shall--
``(i) <>  provide
reasonable notice to, and consult with, the
appropriate Federal banking agency, the Securities
and Exchange Commission, the Commodity Futures
Trading Commission, or State regulatory agency, as
appropriate, for a subsidiary that is a depository
institution or a functionally regulated subsidiary
of a savings and loan holding company before
commencing an examination of the subsidiary under
this section; and
``(ii) to the fullest extent possible, avoid
duplication of examination activities, reporting
requirements, and requests for information.''.

[[Page 1604]]

(i) Definition of the Term ``Savings and Loan Holding Company''.--
Section 10(a)(1)(D)(ii) of the Home Owners' Loan Act (12 U.S.C.
1467a(a)(1)(D)(ii)) is amended to read as follows:
``(ii) Exclusion.--The term `savings and loan
holding company' does not include--
``(I) a bank holding company that is
registered under, and subject to, the
Bank Holding Company Act of 1956 (12
U.S.C. 1841 et seq.), or to any company
directly or indirectly controlled by
such company (other than a savings
association);
``(II) a company that controls a
savings association that functions
solely in a trust or fiduciary capacity
as described in section 2(c)(2)(D) of
the Bank Holding Company Act of 1956 (12
U.S.C. 1841(c)(2)(D)); or
``(III) a company described in
subsection (c)(9)(C) solely by virtue of
such company's control of an
intermediate holding company established
pursuant to section 10A.''.

(j) <>  Effective Date.--The amendments
made by this section shall take effect on the transfer date.
SEC. 605. ASSURING CONSISTENT OVERSIGHT OF PERMISSIBLE ACTIVITIES
OF DEPOSITORY INSTITUTION SUBSIDIARIES OF
HOLDING COMPANIES.

(a) In General.--The Federal Deposit Insurance Act (12 U.S.C. 1811
et seq.) is amended by inserting after section 25 the following new
section:
``SEC. 26. <>  ASSURING CONSISTENT OVERSIGHT
OF SUBSIDIARIES OF HOLDING COMPANIES.

``(a) Definitions.--For purposes of this section:
``(1) Board.--The term `Board' means the Board of Governors
of the Federal Reserve System.
``(2) Functionally regulated subsidiary.--The term
`functionally regulated subsidiary' has the same meaning as in
section 5(c)(5) of the Bank Holding Company Act.
``(3) Lead insured depository institution.--The term `lead
insured depository institution' has the same meaning as in
section 2(o)(8) of the Bank Holding Company Act.

``(b) Examination Requirements.--Subject to subtitle B of the
Consumer Financial Protection Act of 2010, the Board shall examine the
activities of a nondepository institution subsidiary (other than a
functionally regulated subsidiary or a subsidiary of a depository
institution) of a depository institution holding company that are
permissible for the insured depository institution subsidiaries of the
depository institution holding company in the same manner, subject to
the same standards, and with the same frequency as would be required if
such activities were conducted in the lead insured depository
institution of the depository institution holding company.
``(c) State Coordination.--
``(1) Consultation and coordination.--If a nondepository
institution subsidiary is supervised by a State bank supervisor
or other State regulatory authority, the Board, in conducting
the examinations required in subsection (b), shall consult and
coordinate with such State regulator.

[[Page 1605]]

``(2) Alternating examinations permitted.--The examinations
required under subsection (b) may be conducted in joint or
alternating manner with a State regulator, if the Board
determines that an examination of a nondepository institution
subsidiary conducted by the State carries out the purposes of
this section.

``(d) Appropriate Federal Banking Agency Backup Examination
Authority.--
``(1) In general.--In the event that the Board does not
conduct examinations required under subsection (b) in the same
manner, subject to the same standards, and with the same
frequency as would be required if such activities were conducted
by the lead insured depository institution subsidiary of the
depository institution holding company, the appropriate Federal
banking agency for the lead insured depository institution may
recommend in writing (which shall include a written explanation
of the concerns giving rise to the recommendation) that the
Board perform the examination required under subsection (b).
``(2) Examination by an appropriate federal banking
agency.--If the <>  Board does not, before
the end of the 60-day period beginning on the date on which the
Board receives a recommendation under paragraph (1), begin an
examination as required under subsection (b) or provide a
written explanation or plan to the appropriate Federal banking
agency making such recommendation responding to the concerns
raised by the appropriate Federal banking agency for the lead
insured depository institution, the appropriate Federal banking
agency for the lead insured depository institution may, subject
to the Consumer Financial Protection Act of 2010, examine the
activities that are permissible for a depository institution
subsidiary conducted by such nondepository institution
subsidiary (other than a functionally regulated subsidiary or a
subsidiary of a depository institution) of the depository
institution holding company as if the nondepository institution
subsidiary were an insured depository institution for which the
appropriate Federal banking agency of the lead insured
depository institution was the appropriate Federal banking
agency, to determine whether the activities--
``(A) pose a material threat to the safety and
soundness of any insured depository institution
subsidiary of the depository institution holding
company;
``(B) are conducted in accordance with applicable
Federal law; and
``(C) are subject to appropriate systems for
monitoring and controlling the financial, operating, and
other material risks of the activities that may pose a
material threat to the safety and soundness of the
insured depository institution subsidiaries of the
holding company.
``(3) Agency coordination with the board.--An appropriate
Federal banking agency that conducts an examination pursuant to
paragraph (2) shall coordinate examination of the activities of
nondepository institution subsidiaries described in subsection
(b) with the Board in a manner that--
``(A) avoids duplication;
``(B) shares information relevant to the supervision
of the depository institution holding company;

[[Page 1606]]

``(C) achieves the objectives of subsection (b); and
``(D) ensures that the depository institution
holding company and the subsidiaries of the depository
institution holding company are not subject to
conflicting supervisory demands by such agency and the
Board.
``(4) Fee permitted for examination costs.--An appropriate
Federal banking agency that conducts an examination or
enforcement action pursuant to this section may collect an
assessment, fee, or such other charge from the subsidiary as the
appropriate Federal banking agency determines necessary or
appropriate to carry out the responsibilities of the appropriate
Federal banking agency in connection with such examination.

``(e) Referrals for Enforcement by Appropriate Federal Banking
Agency.--
``(1) Recommendation of enforcement action.--The appropriate
Federal banking agency for the lead insured depository
institution, based upon its examination of a nondepository
institution subsidiary conducted pursuant to subsection (d), or
other relevant information, may submit to the Board, in writing,
a recommendation that the Board take enforcement action against
such nondepository institution subsidiary, together with an
explanation of the concerns giving rise to the recommendation,
if the appropriate Federal banking agency determines (by a vote
of its members, if applicable) that the activities of the
nondepository institution subsidiary pose a material threat to
the safety and soundness of any insured depository institution
subsidiary of the depository institution holding company.
``(2) Back-up authority of the appropriate federal banking
agency.--If, within <>  the 60-day period
beginning on the date on which the Board receives a
recommendation under paragraph (1), the Board does not take
enforcement action against the nondepository institution
subsidiary or provide a plan for supervisory or enforcement
action that is acceptable to the appropriate Federal banking
agency that made the recommendation pursuant to paragraph (1),
such agency may take the recommended enforcement action against
the nondepository institution subsidiary, in the same manner as
if the nondepository institution subsidiary were an insured
depository institution for which the agency was the appropriate
Federal banking agency.

``(f) Coordination Among Appropriate Federal Banking Agencies.--Each
Federal banking agency, prior to or when exercising authority under
subsection (d) or (e) shall--
``(1) <>  provide reasonable
notice to, and consult with, the appropriate Federal banking
agency or State bank supervisor (or other State regulatory
agency) of the nondepository institution subsidiary of a
depository institution holding company that is described in
subsection (d) before commencing any examination of the
subsidiary;
``(2) to the fullest extent possible--
``(A) rely on the examinations, inspections, and
reports of the appropriate Federal banking agency or the
State bank supervisor (or other State regulatory agency)
of the subsidiary;

[[Page 1607]]

``(B) avoid duplication of examination activities,
reporting requirements, and requests for information;
and
``(C) ensure that the depository institution holding
company and the subsidiaries of the depository
institution holding company are not subject to
conflicting supervisory demands by the appropriate
Federal banking agencies.

``(g) Rule of Construction.--No provision of this section shall be
construed as limiting any authority of the Board, the Corporation, or
the Comptroller of the Currency under any other provision of law.''.
(b) <>  Effective Date.--The amendment
made by subsection (a) shall take effect on the transfer date.
SEC. 606. REQUIREMENTS FOR FINANCIAL HOLDING COMPANIES TO REMAIN
WELL CAPITALIZED AND WELL MANAGED.

(a) Amendment.--Section 4(l)(1) of the Bank Holding Company Act of
1956 (12 U.S.C. 1843(l)(1)) is amended--
(1) in subparagraph (B), by striking ``and'' at the end;
(2) by redesignating subparagraph (C) as subparagraph (D);
(3) by inserting after subparagraph (B) the following:
``(C) the bank holding company is well capitalized
and well managed; and''; and
(4) in subparagraph (D)(ii), as so redesignated, by striking
``subparagraphs (A) and (B)'' and inserting ``subparagraphs (A),
(B), and (C)''.

(b) Home Owners' Loan Act Amendment.--Section 10(c)(2) of the Home
Owners' Loan Act (12 U.S.C. 1467a(c)(2)) is amended by adding at the end
the following new subparagraph:
``(H) Any activity that is permissible for a
financial holding company (as such term is defined under
section 2(p) of the Bank Holding Company Act of 1956 (12
U.S.C. 1841(p)) to conduct under section 4(k) of the
Bank Holding Company Act of 1956 if--
``(i) the savings and loan holding company
meets all of the criteria to qualify as a
financial holding company, and complies with all
of the requirements applicable to a financial
holding company, under sections 4(l) and 4(m) of
the Bank Holding Company Act and section 804(c) of
the Community Reinvestment Act of 1977 (12 U.S.C.
2903(c)) as if the savings and loan holding
company was a bank holding company; and
``(ii) the savings and loan holding company
conducts the activity in accordance with the same
terms, conditions, and requirements that apply to
the conduct of such activity by a bank holding
company under the Bank Holding Company Act of 1956
and the Board's regulations and interpretations
under such Act.''.

(c) <>  Effective Date.--The amendments
made by this section shall take effect on the transfer date.
SEC. 607. STANDARDS FOR INTERSTATE ACQUISITIONS.

(a) Acquisition of Banks.--Section 3(d)(1)(A) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1842(d)(1)(A)) is amended by striking
``adequately capitalized and adequately managed'' and inserting ``well
capitalized and well managed''.

[[Page 1608]]

(b) Interstate Bank Mergers.--Section 44(b)(4)(B) of the Federal
Deposit Insurance Act (12 U.S.C. 1831u(b)(4)(B)) is amended by striking
``will continue to be adequately capitalized and adequately managed''
and inserting ``will be well capitalized and well managed''.
(c) <>  Effective Date.--The amendments
made by this section shall take effect on the transfer date.
SEC. 608. ENHANCING EXISTING RESTRICTIONS ON BANK TRANSACTIONS
WITH AFFILIATES.

(a) Affiliate Transactions.--Section 23A of the Federal Reserve Act
(12 U.S.C. 371c) is amended--
(1) in subsection (b)--
(A) in paragraph (1), by striking subparagraph (D)
and inserting the following:
``(D) any investment fund with respect to which a
member bank or affiliate thereof is an investment
adviser; and''; and
(B) in paragraph (7)--
(i) in subparagraph (A), by inserting before
the semicolon at the end the following: ``,
including a purchase of assets subject to an
agreement to repurchase'';
(ii) in subparagraph (C), by striking ``,
including assets subject to an agreement to
repurchase,'';
(iii) in subparagraph (D)--
(I) by inserting ``or other debt
obligations'' after ``acceptance of
securities''; and
(II) by striking ``or'' at the end;
and
(iv) by adding at the end the following:
``(F) a transaction with an affiliate that involves
the borrowing or lending of securities, to the extent
that the transaction causes a member bank or a
subsidiary to have credit exposure to the affiliate; or
``(G) a derivative transaction, as defined in
paragraph (3) of section 5200(b) of the Revised Statutes
of the United States (12 U.S.C. 84(b)), with an
affiliate, to the extent that the transaction causes a
member bank or a subsidiary to have credit exposure to
the affiliate;'';
(2) in subsection (c)--
(A) in paragraph (1)--
(i) in the matter preceding subparagraph (A),
by striking ``subsidiary'' and all that follows
through ``time of the transaction'' and inserting
``subsidiary, and any credit exposure of a member
bank or a subsidiary to an affiliate resulting
from a securities borrowing or lending
transaction, or a derivative transaction, shall be
secured at all times''; and
(ii) in each of subparagraphs (A) through (D),
by striking ``or letter of credit'' and inserting
``letter of credit, or credit exposure'';
(B) by striking paragraph (2);
(C) by redesignating paragraphs (3) through (5) as
paragraphs (2) through (4), respectively;
(D) in paragraph (2), as so redesignated, by
inserting before the period at the end ``, or credit
exposure to an affiliate resulting from a securities
borrowing or lending transaction, or derivative
transaction''; and

[[Page 1609]]

(E) in paragraph (3), as so redesignated--
(i) by inserting ``or other debt obligations''
after ``securities''; and
(ii) by striking ``or guarantee'' and all that
follows through ``behalf of,'' and inserting
``guarantee, acceptance, or letter of credit
issued on behalf of, or credit exposure from a
securities borrowing or lending transaction, or
derivative transaction to,'';
(3) in subsection (d)(4), in the matter preceding
subparagraph (A), by striking ``or issuing'' and all that
follows through ``behalf of,'' and inserting ``issuing a
guarantee, acceptance, or letter of credit on behalf of, or
having credit exposure resulting from a securities borrowing or
lending transaction, or derivative transaction to,''; and
(4) in subsection (f)--
(A) in paragraph (2)--
(i) by striking ``or order'';
(ii) by striking ``if it finds'' and all that
follows through the end of the paragraph and
inserting the following: ``if--
``(i) <>  the Board finds
the exemption to be in the public interest and
consistent with the purposes of this section, and
notifies the Federal Deposit Insurance Corporation
of such finding; and
``(ii) <>  before
the end of the 60-day period beginning on the date
on which the Federal Deposit Insurance Corporation
receives notice of the finding under clause (i),
the Federal Deposit Insurance Corporation does not
object, in writing, to the finding, based on a
determination that the exemption presents an
unacceptable risk to the Deposit Insurance
Fund.'';
(iii) by striking the Board and inserting the
following:
``(A) In general.--The Board''; and
(iv) by adding at the end the following:
``(B) Additional exemptions.--
``(i) National banks.--The Comptroller of the
Currency may, by order, exempt a transaction of a
national bank from the requirements of this
section if--
``(I) <> the
Board and the Office of the Comptroller
of the Currency jointly find the
exemption to be in the public interest
and consistent with the purposes of this
section and notify the Federal Deposit
Insurance Corporation of such finding;
and
``(II) <>  before the end of the
60-day period beginning on the date on
which the Federal Deposit Insurance
Corporation receives notice of the
finding under subclause (I), the Federal
Deposit Insurance Corporation does not
object, in writing, to the finding,
based on a determination that the
exemption presents an unacceptable risk
to the Deposit Insurance Fund.
``(ii) State banks.--The Federal Deposit
Insurance Corporation may, by order, exempt a
transaction of a State nonmember bank, and the
Board may, by order, exempt a transaction of a
State member bank, from the requirements of this
section if--

[[Page 1610]]

``(I) the Board and the Federal
Deposit Insurance Corporation jointly
find that the exemption is in the public
interest and consistent with the
purposes of this section; and
``(II) the Federal Deposit Insurance
Corporation finds that the exemption
does not present an unacceptable risk to
the Deposit Insurance Fund.''; and
(B) by adding at the end the following:
``(4) Amounts of covered transactions.--The Board may issue
such regulations or interpretations as the Board determines are
necessary or appropriate with respect to the manner in which a
netting agreement may be taken into account in determining the
amount of a covered transaction between a member bank or a
subsidiary and an affiliate, including the extent to which
netting agreements between a member bank or a subsidiary and an
affiliate may be taken into account in determining whether a
covered transaction is fully secured for purposes of subsection
(d)(4). An interpretation under this paragraph with respect to a
specific member bank, subsidiary, or affiliate shall be issued
jointly with the appropriate Federal banking agency for such
member bank, subsidiary, or affiliate.''.

(b) Transactions With Affiliates.--Section 23B(e) of the Federal
Reserve Act (12 U.S.C. 371c-1(e)) is amended--
(1) by striking the undesignated matter following
subparagraph (B);
(2) by redesignating subparagraphs (A) and (B) as clauses
(i) and (ii), respectively, and adjusting the clause margins
accordingly;
(3) by redesignating paragraphs (1) and (2) as subparagraphs
(A) and (B), respectively, and adjusting the subparagraph
margins accordingly;
(4) by striking ``The Board'' and inserting the following:
``(1) In general.--The Board'';
(5) in paragraph (1)(B), as so redesignated--
(A) in the matter preceding clause (i), by inserting
before ``regulations'' the following: ``subject to
paragraph (2), <>  if the Board
finds that an exemption or exclusion is in the public
interest and is consistent with the purposes of this
section, and notifies the Federal Deposit Insurance
Corporation of such finding,''; and
(B) in clause (ii), by striking the comma at the end
and inserting a period; and
(6) by adding at the end the following:
``(2) Exception.-- <> The Board
may grant an exemption or exclusion under this subsection only
if, during the 60-day period beginning on the date of receipt of
notice of the finding from the Board under paragraph (1)(B), the
Federal Deposit Insurance Corporation does not object, in
writing, to such exemption or exclusion, based on a
determination that the exemption presents an unacceptable risk
to the Deposit Insurance Fund.''.

(c) Home Owners' Loan Act.--Section 11 of the Home Owners' Loan Act
(12 U.S.C. 1468) is amended by adding at the end the following:
``(d) Exemptions.--

[[Page 1611]]

``(1) Federal savings associations.--The Comptroller of the
Currency may, by order, exempt a transaction of a Federal
savings association from the requirements of this section if--
``(A) <> the Board and the
Office of the Comptroller of the Currency jointly find
the exemption to be in the public interest and
consistent with the purposes of this section and notify
the Federal Deposit Insurance Corporation of such
finding; and
``(B) <>  before the end
of the 60-day period beginning on the date on which the
Federal Deposit Insurance Corporation receives notice of
the finding under subparagraph (A), the Federal Deposit
Insurance Corporation does not object, in writing, to
the finding, based on a determination that the exemption
presents an unacceptable risk to the Deposit Insurance
Fund.
``(2) State savings association.--The Federal Deposit
Insurance Corporation may, by order, exempt a transaction of a
State savings association from the requirements of this section
if the Board and the Federal Deposit Insurance Corporation
jointly find that--
``(A) the exemption is in the public interest and
consistent with the purposes of this section; and
``(B) the exemption does not present an unacceptable
risk to the Deposit Insurance Fund.''.

(d) <>  Effective Date.--The amendments
made by this section shall take effect 1 year after the transfer date.
SEC. 609. ELIMINATING EXCEPTIONS FOR TRANSACTIONS WITH FINANCIAL
SUBSIDIARIES.

(a) Amendment.--Section 23A(e) of the Federal Reserve Act (12 U.S.C.
371c(e)) is amended--
(1) by striking paragraph (3); and
(2) by redesignating paragraph (4) as paragraph (3).

(b) <>  Prospective Application of
Amendment.--The amendments made by this section shall apply with respect
to any covered transaction between a bank and a subsidiary of the bank,
as those terms are defined in section 23A of the Federal Reserve Act (12
U.S.C. 371c), that is entered into on or after the date of enactment of
this Act.

(c) <> Effective Date.--The amendments made
by this section shall take effect 1 year after the transfer date.
SEC. 610. LENDING LIMITS APPLICABLE TO CREDIT EXPOSURE ON
DERIVATIVE TRANSACTIONS, REPURCHASE
AGREEMENTS, REVERSE REPURCHASE AGREEMENTS,
AND SECURITIES LENDING AND BORROWING
TRANSACTIONS.

(a) National Banks.--Section 5200(b) of the Revised Statutes of the
United States (12 U.S.C. 84(b)) is amended--
(1) in paragraph (1), by striking ``shall include'' and all
that follows through the end of the paragraph and inserting the
following: ``shall include--
``(A) all direct or indirect advances of funds to a
person made on the basis of any obligation of that
person to repay the funds or repayable from specific
property pledged by or on behalf of the person;
``(B) to the extent specified by the Comptroller of
the Currency, any liability of a national banking
association

[[Page 1612]]

to advance funds to or on behalf of a person pursuant to
a contractual commitment; and
``(C) any credit exposure to a person arising from a
derivative transaction, repurchase agreement, reverse
repurchase agreement, securities lending transaction, or
securities borrowing transaction between the national
banking association and the person;'';
(2) in paragraph (2), by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following:
``(3) the term `derivative transaction' includes any
transaction that is a contract, agreement, swap, warrant, note,
or option that is based, in whole or in part, on the value of,
any interest in, or any quantitative measure or the occurrence
of any event relating to, one or more commodities, securities,
currencies, interest or other rates, indices, or other
assets.''.

(b) Savings Associations.--Section 5(u)(3) of the Home Owners' Loan
Act (12 U.S.C. 1464(u)(3)) is amended by striking ``Director'' each
place that term appears and inserting ``Comptroller of the Currency''.
(c) <> Effective Date.--The amendments made
by this section shall take effect 1 year after the transfer date.
SEC. 611. CONSISTENT TREATMENT OF DERIVATIVE TRANSACTIONS IN
LENDING LIMITS.

(a) Amendment.--Section 18 of the Federal Deposit Insurance Act (12
U.S.C. 1828) is amended by adding at the end the following:
``(y) State Lending Limit Treatment of Derivatives Transactions.--An
insured State bank may engage in a derivative transaction, as defined in
section 5200(b)(3) of the Revised Statutes of the United States (12
U.S.C. 84(b)(3)), only if the law with respect to lending limits of the
State in which the insured State bank is chartered takes into
consideration credit exposure to derivative transactions.''.
(b) <>  Effective Date.--The amendment made
by this section shall take effect 18 months after the transfer date.
SEC. 612. RESTRICTION ON CONVERSIONS OF TROUBLED BANKS.

(a) Conversion of a National Banking Association.--The Act entitled
``An Act to provide for the conversion of national banking associations
into and their merger or consolidation with State banks, and for other
purposes.'' (12 U.S.C. 214 et seq.) is amended by adding at the end the
following:
``SEC. 10. <> PROHIBITION ON CONVERSION.

``A national banking association may not convert to a State bank or
State savings association during any period in which the national
banking association is subject to a cease and desist order (or other
formal enforcement order) issued by, or a memorandum of understanding
entered into with, the Comptroller of the Currency with respect to a
significant supervisory matter.''.
(b) Conversion of a State Bank or Savings Association.--Section 5154
of the Revised Statutes of the United States (12 U.S.C. 35) is amended
by adding at the end the following: ``The Comptroller of the Currency
may not approve the conversion of a State bank or State savings
association to a national banking association or Federal savings
association during any period in which the State bank or State savings
association is subject to

[[Page 1613]]

a cease and desist order (or other formal enforcement order) issued by,
or a memorandum of understanding entered into with, a State bank
supervisor or the appropriate Federal banking agency with respect to a
significant supervisory matter or a final enforcement action by a State
Attorney General.''.
(c) Conversion of a Federal Savings Association.--Section 5(i) of
the Home Owners' Loan Act (12 U.S.C. 1464(i)) is amended by adding at
the end the following:
``(6) Limitation on certain conversions by federal savings
associations.--A Federal savings association may not convert to
a State bank or State savings association during any period in
which the Federal savings association is subject to a cease and
desist order (or other formal enforcement order) issued by, or a
memorandum of understanding entered into with, the Office of
Thrift Supervision or the Comptroller of the Currency with
respect to a significant supervisory matter.''.

(d) <> Exception.--The prohibition on the
approval of conversions under the amendments made by subsections (a),
(b), and (c) shall not apply, if--
(1) <>  the Federal banking agency that would
be the appropriate Federal banking agency after the proposed
conversion gives the appropriate Federal banking agency or State
bank supervisor that issued the cease and desist order (or other
formal enforcement order) or memorandum of understanding, as
appropriate, written notice of the proposed conversion including
a plan to address the significant supervisory matter in a manner
that is consistent with the safe and sound operation of the
institution;
(2) <>  within 30 days of receipt of the
written notice required under paragraph (1), the appropriate
Federal banking agency or State bank supervisor that issued the
cease and desist order (or other formal enforcement order) or
memorandum of understanding, as appropriate, does not object to
the conversion or the plan to address the significant
supervisory matter;
(3) after conversion of the insured depository institution,
the appropriate Federal banking agency after the conversion
implements such plan; and
(4) in the case of a final enforcement action by a State
Attorney General, approval of the conversion is conditioned on
compliance by the insured depository institution with the terms
of such final enforcement action.

(e) <>  Notification of Pending Enforcement
Actions.--
(1) Copy of conversion application.--At the time an insured
depository institution files a conversion application, the
insured depository institution shall transmit a copy of the
conversion application to--
(A) the appropriate Federal banking agency for the
insured depository institution; and
(B) the Federal banking agency that would be the
appropriate Federal banking agency of the insured
depository institution after the proposed conversion.
(2) Notification and access to information.--Upon receipt of
a copy of the application described in paragraph (1), the
appropriate Federal banking agency for the insured depository
institution proposing the conversion shall--
(A) notify the Federal banking agency that would be
the appropriate Federal banking agency for the
institution

[[Page 1614]]

after the proposed conversion in writing of any ongoing
supervisory or investigative proceedings that the
appropriate Federal banking agency for the institution
proposing to convert believes is likely to result, in
the near term and absent the proposed conversion, in a
cease and desist order (or other formal enforcement
order) or memorandum of understanding with respect to a
significant supervisory matter; and
(B) provide the Federal banking agency that would be
the appropriate Federal banking agency for the
institution after the proposed conversion access to all
investigative and supervisory information relating to
the proceedings described in subparagraph (A).
SEC. 613. DE NOVO BRANCHING INTO STATES.

(a) National Banks.--Section 5155(g)(1)(A) of the Revised Statutes
of the United States (12 U.S.C. 36(g)(1)(A)) is amended to read as
follows:
``(A) the law of the State in which the branch is
located, or is to be located, would permit establishment
of the branch, if the national bank were a State bank
chartered by such State; and''.

(b) State Insured Banks.--Section 18(d)(4)(A)(i) of the Federal
Deposit Insurance Act (12 U.S.C. 1828(d)(4)(A)(i)) is amended to read as
follows:
``(i) the law of the State in which the branch
is located, or is to be located, would permit
establishment of the branch, if the bank were a
State bank chartered by such State; and''.
SEC. 614. LENDING LIMITS TO INSIDERS.

(a) Extensions of Credit.--Section 22(h)(9)(D)(i) of the Federal
Reserve Act (12 U.S.C. 375b(9)(D)(i)) is amended--
(1) by striking the period at the end and inserting ``;
or'';
(2) by striking ``a person'' and inserting ``the person'';
(3) by striking ``extends credit by making'' and inserting
the following: ``extends credit to a person by--
``(I) making''; and
(4) by adding at the end the following:
``(II) having credit exposure to the
person arising from a derivative
transaction (as defined in section
5200(b) of the Revised Statutes of the
United States (12 U.S.C. 84(b))),
repurchase agreement, reverse repurchase
agreement, securities lending
transaction, or securities borrowing
transaction between the member bank and
the person.''.

(b) <>  Effective Date.--The amendments
made by this section shall take effect 1 year after the transfer date.
SEC. 615. LIMITATIONS ON PURCHASES OF ASSETS FROM INSIDERS.

(a) Amendment to the Federal Deposit Insurance Act.--Section 18 of
the Federal Deposit Insurance Act (12 U.S.C. 1828) is amended by adding
at the end the following:
``(z) General Prohibition on Sale of Assets.--
``(1) In general.--An insured depository institution may not
purchase an asset from, or sell an asset to, an executive
officer, director, or principal shareholder of the insured
depository institution, or any related interest of such person
(as

[[Page 1615]]

such terms are defined in section 22(h) of Federal Reserve Act),
unless--
``(A) the transaction is on market terms; and
``(B) if the transaction represents more than 10
percent of the capital stock and surplus of the insured
depository institution, the transaction has been
approved in advance by a majority of the members of the
board of directors of the insured depository institution
who do not have an interest in the transaction.
``(2) <>  Rulemaking.--The Board of
Governors of the Federal Reserve System may issue such rules as
may be necessary to define terms and to carry out the purposes
this subsection. Before proposing or adopting a rule under this
paragraph, the Board of Governors of the Federal Reserve System
shall consult with the Comptroller of the Currency and the
Corporation as to the terms of the rule.''.

(b) Amendments to the Federal Reserve Act.--Section 22(d) of the
Federal Reserve Act (12 U.S.C. 375) is amended to read as follows:
``(d) [Reserved]''.
(c) <>  Effective Date.--The amendments made
by this section shall take effect on the transfer date.
SEC. 616. REGULATIONS REGARDING CAPITAL LEVELS.

(a) Capital Levels of Bank Holding Companies.--Section 5(b) of the
Bank Holding Company Act of 1956 (12 U.S.C. 1844(b)) is amended--
(1) by inserting after ``orders'' the following: ``,
including regulations and orders relating to the capital
requirements for bank holding companies,''; and
(2) by adding at the end the following: ``In establishing
capital regulations pursuant to this subsection, the Board shall
seek to make such requirements countercyclical, so that the
amount of capital required to be maintained by a company
increases in times of economic expansion and decreases in times
of economic contraction, consistent with the safety and
soundness of the company.''.

(b) Capital Levels of Savings and Loan Holding Companies.--Section
10(g)(1) of the Home Owners' Loan Act (12 U.S.C. 1467a(g)(1)) is
amended--
(1) by inserting after ``orders'' the following: ``,
including regulations and orders relating to capital
requirements for savings and loan holding companies,''; and
(2) by inserting at the end the following: ``In establishing
capital regulations pursuant to this subsection, the appropriate
Federal banking agency shall seek to make such requirements
countercyclical so that the amount of capital required to be
maintained by a company increases in times of economic expansion
and decreases in times of economic contraction, consistent with
the safety and soundness of the company.''.

(c) Capital Levels of Insured Depository Institutions.--Section
908(a)(1) of the International Lending Supervision Act of 1983 (12
U.S.C. 3907(a)(1)) is amended by adding at the end the following: ``Each
appropriate Federal banking agency shall seek to make the capital
standards required under this section or other provisions of Federal law
for insured depository institutions countercyclical so that the amount
of capital required to be maintained

[[Page 1616]]

by an insured depository institution increases in times of economic
expansion and decreases in times of economic contraction, consistent
with the safety and soundness of the insured depository institution.''
(d) Source of Strength.--The Federal Deposit Insurance Act (12
U.S.C. 1811 et seq.) is amended by inserting after section 38 (12 U.S.C.
1831o) the following:
``SEC. 38A. <>  SOURCE OF STRENGTH.

``(a) Holding Companies.--The appropriate Federal banking agency for
a bank holding company or savings and loan holding company shall require
the bank holding company or savings and loan holding company to serve as
a source of financial strength for any subsidiary of the bank holding
company or savings and loan holding company that is a depository
institution.
``(b) Other Companies.--If an insured depository institution is not
the subsidiary of a bank holding company or savings and loan holding
company, the appropriate Federal banking agency for the insured
depository institution shall require any company that directly or
indirectly controls the insured depository institution to serve as a
source of financial strength for such institution.
``(c) Reports.--The appropriate Federal banking agency for an
insured depository institution described in subsection (b) may, from
time to time, require the company, or a company that directly or
indirectly controls the insured depository institution, to submit a
report, under oath, for the purposes of--
``(1) assessing the ability of such company to comply with
the requirement under subsection (b); and
``(2) enforcing the compliance of such company with the
requirement under subsection (b).

``(d) <>  Rules.--Not later than 1 year after the
transfer date, as defined in section 311 of the Enhancing Financial
Institution Safety and Soundness Act of 2010, the appropriate Federal
banking agencies shall jointly issue final rules to carry out this
section.

``(e) Definition.--In this section, the term `source of financial
strength' means the ability of a company that directly or indirectly
owns or controls an insured depository institution to provide financial
assistance to such insured depository institution in the event of the
financial distress of the insured depository institution.''.
(e) <> Effective Date.--The amendments
made by this section shall take effect on the transfer date.
SEC. 617. ELIMINATION OF ELECTIVE INVESTMENT BANK HOLDING COMPANY
FRAMEWORK.

(a) Amendment.--Section 17 of the Securities Exchange Act of 1934
(15 U.S.C. 78q) is amended--
(1) by striking subsection (i); and
(2) by redesignating subsections (j) and (k) as subsections
(i) and (j), respectively.

(b) <>  Effective Date.--The amendments made
by this section shall take effect on the transfer date.
SEC. 618. <>  SECURITIES HOLDING COMPANIES.

(a) Definitions.--In this section--
(1) the term ``associated person of a securities holding
company'' means a person directly or indirectly controlling,
controlled by, or under common control with, a securities
holding company;

[[Page 1617]]

(2) the term ``foreign bank'' has the same meaning as in
section 1(b)(7) of the International Banking Act of 1978 (12
U.S.C. 3101(7));
(3) the term ``insured bank'' has the same meaning as in
section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813);
(4) the term ``securities holding company''--
(A) means--
(i) a person (other than a natural person)
that owns or controls 1 or more brokers or dealers
registered with the Commission; and
(ii) the associated persons of a person
described in clause (i); and
(B) does not include a person that is--
(i) a nonbank financial company supervised by
the Board under title I;
(ii) an insured bank (other than an
institution described in subparagraphs (D), (F),
or (H) of section 2(c)(2) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1841(c)(2)) or a
savings association;
(iii) an affiliate of an insured bank (other
than an institution described in subparagraphs
(D), (F), or (H) of section 2(c)(2) of the Bank
Holding Company Act of 1956 (12 U.S.C. 1841(c)(2))
or an affiliate of a savings association;
(iv) a foreign bank, foreign company, or
company that is described in section 8(a) of the
International Banking Act of 1978 (12 U.S.C.
3106(a));
(v) a foreign bank that controls, directly or
indirectly, a corporation chartered under section
25A of the Federal Reserve Act (12 U.S.C. 611 et
seq.); or
(vi) subject to comprehensive consolidated
supervision by a foreign regulator;
(5) the term ``supervised securities holding company'' means
a securities holding company that is supervised by the Board of
Governors under this section; and
(6) the terms ``affiliate'', ``bank'', ``bank holding
company'', ``company'', ``control'', ``savings association'',
and ``subsidiary'' have the same meanings as in section 2 of the
Bank Holding Company Act of 1956.

(b) Supervision of a Securities Holding Company Not Having a Bank or
Savings Association Affiliate.--
(1) In general.--A securities holding company that is
required by a foreign regulator or provision of foreign law to
be subject to comprehensive consolidated supervision may
register with the Board of Governors under paragraph (2) to
become a supervised securities holding
company. <>  Any securities holding company
filing such a registration shall be supervised in accordance
with this section, and shall comply with the rules and orders
prescribed by the Board of Governors applicable to supervised
securities holding companies.
(2) Registration as a supervised securities holding
company.--
(A) Registration.--A securities holding company that
elects to be subject to comprehensive consolidated
supervision shall register by filing with the Board of
Governors

[[Page 1618]]

such information and documents as the Board of
Governors, by regulation, may prescribe as necessary or
appropriate in furtherance of the purposes of this
section.
(B) Effective date.--A securities holding company
that registers under subparagraph (A) shall be deemed to
be a supervised securities holding company, effective on
the date that is 45 days after the date of receipt of
the registration information and documents under
subparagraph (A) by the Board of Governors, or within
such shorter period as the Board of Governors, by rule
or order, may determine.

(c) Supervision of Securities Holding Companies.--
(1) Recordkeeping and reporting.--
(A) Recordkeeping and reporting required.--Each
supervised securities holding company and each affiliate
of a supervised securities holding company shall make
and keep for periods determined by the Board of
Governors such records, furnish copies of such records,
and make such reports, as the Board of Governors
determines to be necessary or appropriate to carry out
this section, to prevent evasions thereof, and to
monitor compliance by the supervised securities holding
company or affiliate with applicable provisions of law.
(B) Form and contents.--
(i) In general.--Any record or report required
to be made, furnished, or kept under this
paragraph shall--
(I) be prepared in such form and
according to such specifications
(including certification by a registered
public accounting firm), as the Board of
Governors may require; and
(II) be provided promptly to the
Board of Governors at any time, upon
request by the Board of Governors.
(ii) Contents.--Records and reports required
to be made, furnished, or kept under this
paragraph may include--
(I) a balance sheet or income
statement of the supervised securities
holding company or an affiliate of a
supervised securities holding company;
(II) an assessment of the
consolidated capital and liquidity of
the supervised securities holding
company;
(III) a report by an independent
auditor attesting to the compliance of
the supervised securities holding
company with the internal risk
management and internal control
objectives of the supervised securities
holding company; and
(IV) a report concerning the extent
to which the supervised securities
holding company or affiliate has
complied with the provisions of this
section and any regulations prescribed
and orders issued under this section.
(2) Use of existing reports.--
(A) In general.--The Board of Governors shall, to
the fullest extent possible, accept reports in
fulfillment

[[Page 1619]]

of the requirements of this paragraph that a supervised
securities holding company or an affiliate of a
supervised securities holding company has been required
to provide to another regulatory agency or a self-
regulatory organization.
(B) Availability.--A supervised securities holding
company or an affiliate of a supervised securities
holding company shall promptly provide to the Board of
Governors, at the request of the Board of Governors, any
report described in subparagraph (A), as permitted by
law.
(3) Examination authority.--
(A) Focus of examination authority.--The Board of
Governors may make examinations of any supervised
securities holding company and any affiliate of a
supervised securities holding company to carry out this
subsection, to prevent evasions thereof, and to monitor
compliance by the supervised securities holding company
or affiliate with applicable provisions of law.
(B) Deference to other examinations.--For purposes
of this subparagraph, the Board of Governors shall, to
the fullest extent possible, use the reports of
examination made by other appropriate Federal or State
regulatory authorities with respect to any functionally
regulated subsidiary or any institution described in
subparagraph (D), (F), or (H) of section 2(c)(2) of the
Bank Holding Company Act of 1956 (12 U.S.C. 1841(c)(2)).

(d) Capital and Risk Management.--
(1) In general.-- <> The Board of
Governors shall, by regulation or order, prescribe capital
adequacy and other risk management standards for supervised
securities holding companies that are appropriate to protect the
safety and soundness of the supervised securities holding
companies and address the risks posed to financial stability by
supervised securities holding companies.
(2) Differentiation.--In imposing standards under this
subsection, the Board of Governors may differentiate among
supervised securities holding companies on an individual basis,
or by category, taking into consideration the requirements under
paragraph (3).
(3) Content.--Any standards imposed on a supervised
securities holding company under this subsection shall take into
account--
(A) the differences among types of business
activities carried out by the supervised securities
holding company;
(B) the amount and nature of the financial assets of
the supervised securities holding company;
(C) the amount and nature of the liabilities of the
supervised securities holding company, including the
degree of reliance on short-term funding;
(D) the extent and nature of the off-balance sheet
exposures of the supervised securities holding company;
(E) the extent and nature of the transactions and
relationships of the supervised securities holding
company with other financial companies;
(F) the importance of the supervised securities
holding company as a source of credit for households,
businesses,

[[Page 1620]]

and State and local governments, and as a source of
liquidity for the financial system; and
(G) the nature, scope, and mix of the activities of
the supervised securities holding company.
(4) <> Notice.--A capital requirement
imposed under this subsection may not take effect earlier than
180 days after the date on which a supervised securities holding
company is provided notice of the capital requirement.

(e) Other Provisions of Law Applicable to Supervised Securities
Holding Companies.--
(1) Federal deposit insurance act.--Subsections (b), (c)
through (s), and (u) of section 8 of the Federal Deposit
Insurance Act (12 U.S.C. 1818) shall apply to any supervised
securities holding company, and to any subsidiary (other than a
bank or an institution described in subparagraph (D), (F), or
(H) of section 2(c)(2) of the Bank Holding Company Act of 1956
(12 U.S.C. 1841(c)(2))) of a supervised securities holding
company, in the same manner as such subsections apply to a bank
holding company for which the Board of Governors is the
appropriate Federal banking agency. For purposes of applying
such subsections to a supervised securities holding company or a
subsidiary (other than a bank or an institution described in
subparagraph (D), (F), or (H) of section 2(c)(2) of the Bank
Holding Company Act of 1956 (12 U.S.C. 1841(c)(2))) of a
supervised securities holding company, the Board of Governors
shall be deemed the appropriate Federal banking agency for the
supervised securities holding company or subsidiary.
(2) Bank holding company act of 1956.--Except as the Board
of Governors may otherwise provide by regulation or order, a
supervised securities holding company shall be subject to the
provisions of the Bank Holding Company Act of 1956 (12 U.S.C.
1841 et seq.) in the same manner and to the same extent a bank
holding company is subject to such provisions, except that a
supervised securities holding company may not, by reason of this
paragraph, be deemed to be a bank holding company for purposes
of section 4 of the Bank Holding Company Act of 1956 (12 U.S.C.
1843).
SEC. 619. PROHIBITIONS ON PROPRIETARY TRADING AND CERTAIN
RELATIONSHIPS WITH HEDGE FUNDS AND PRIVATE
EQUITY FUNDS.

The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) is
amended by adding at the end the following:
``SEC. 13. <> PROHIBITIONS ON PROPRIETARY
TRADING AND CERTAIN RELATIONSHIPS WITH HEDGE
FUNDS AND PRIVATE EQUITY FUNDS.

``(a) In General.--
``(1) Prohibition.--Unless otherwise provided in this
section, a banking entity shall not--
``(A) engage in proprietary trading; or
``(B) acquire or retain any equity, partnership, or
other ownership interest in or sponsor a hedge fund or a
private equity fund.
``(2) Nonbank financial companies supervised by the board.--
Any nonbank financial company supervised by the Board that
engages in proprietary trading or takes or retains

[[Page 1621]]

any equity, partnership, or other ownership interest in or
sponsors a hedge fund or a private equity fund shall be subject,
by rule, as provided in subsection (b)(2), to additional capital
requirements for and additional quantitative limits with regards
to such proprietary trading and taking or retaining any equity,
partnership, or other ownership interest in or sponsorship of a
hedge fund or a private equity fund, except that permitted
activities as described in subsection (d) shall not be subject
to the additional capital and additional quantitative limits
except as provided in subsection (d)(3), as if the nonbank
financial company supervised by the Board were a banking entity.

``(b) Study and Rulemaking.--
``(1) Study.-- <> Not
later than 6 months after the date of enactment of this section,
the Financial Stability Oversight Council shall study and make
recommendations on implementing the provisions of this section
so as to--
``(A) promote and enhance the safety and soundness
of banking entities;
``(B) protect taxpayers and consumers and enhance
financial stability by minimizing the risk that insured
depository institutions and the affiliates of insured
depository institutions will engage in unsafe and
unsound activities;
``(C) limit the inappropriate transfer of Federal
subsidies from institutions that benefit from deposit
insurance and liquidity facilities of the Federal
Government to unregulated entities;
``(D) reduce conflicts of interest between the self-
interest of banking entities and nonbank financial
companies supervised by the Board, and the interests of
the customers of such entities and companies;
``(E) limit activities that have caused undue risk
or loss in banking entities and nonbank financial
companies supervised by the Board, or that might
reasonably be expected to create undue risk or loss in
such banking entities and nonbank financial companies
supervised by the Board;
``(F) appropriately accommodate the business of
insurance within an insurance company, subject to
regulation in accordance with the relevant insurance
company investment laws, while protecting the safety and
soundness of any banking entity with which such
insurance company is affiliated and of the United States
financial system; and
``(G) appropriately time the divestiture of illiquid
assets that are affected by the implementation of the
prohibitions under subsection (a).
``(2) Rulemaking.--
``(A) In general.-- <> Unless
otherwise provided in this section, not later than 9
months after the completion of the study under paragraph
(1), the appropriate Federal banking agencies, the
Securities and Exchange Commission, and the Commodity
Futures Trading Commission, shall consider the findings
of the study under paragraph (1) and adopt rules to
carry out this section, as provided in subparagraph (B).

[[Page 1622]]

``(B) Coordinated rulemaking.--
``(i) Regulatory authority.--The regulations
issued under this paragraph shall be issued by--
``(I) the appropriate Federal
banking agencies, jointly, with respect
to insured depository institutions;
``(II) the Board, with respect to
any company that controls an insured
depository institution, or that is
treated as a bank holding company for
purposes of section 8 of the
International Banking Act, any nonbank
financial company supervised by the
Board, and any subsidiary of any of the
foregoing (other than a subsidiary for
which an agency described in subclause
(I), (III), or (IV) is the primary
financial regulatory agency);
``(III) the Commodity Futures
Trading Commission, with respect to any
entity for which the Commodity Futures
Trading Commission is the primary
financial regulatory agency, as defined
in section 2 of the Dodd-Frank Wall
Street Reform and Consumer Protection
Act; and
``(IV) the Securities and Exchange
Commission, with respect to any entity
for which the Securities and Exchange
Commission is the primary financial
regulatory agency, as defined in section
2 of the Dodd-Frank Wall Street Reform
and Consumer Protection Act.
``(ii) Coordination, consistency, and
comparability.--In
developing <>  and issuing
regulations pursuant to this section, the
appropriate Federal banking agencies, the
Securities and Exchange Commission, and the
Commodity Futures Trading Commission shall consult
and coordinate with each other, as appropriate,
for the purposes of assuring, to the extent
possible, that such regulations are comparable and
provide for consistent application and
implementation of the applicable provisions of
this section to avoid providing advantages or
imposing disadvantages to the companies affected
by this subsection and to protect the safety and
soundness of banking entities and nonbank
financial companies supervised by the Board.
``(iii) Council role.--The Chairperson of the
Financial Stability Oversight Council shall be
responsible for coordination of the regulations
issued under this section.

``(c) Effective Date.--
``(1) In general.--Except as provided in paragraphs (2) and
(3), this section shall take effect on the earlier of--
``(A) 12 months after the date of the issuance of
final rules under subsection (b); or
``(B) 2 years after the date of enactment of this
section.
``(2) Conformance period for divestiture.--
A <>  banking entity or nonbank financial
company supervised by the Board shall bring its activities and
investments into compliance with the requirements of this
section not later than 2 years after the date on which the
requirements become effective pursuant

[[Page 1623]]

to this section or 2 years after the date on which the entity or
company becomes a nonbank financial company supervised by the
Board. The Board may, by rule or order, extend this two-year
period for not more than one year at a time, if, in the judgment
of the Board, such an extension is consistent with the purposes
of this section and would not be detrimental to the public
interest. The extensions made by the Board under the preceding
sentence may not exceed an aggregate of 3 years.
``(3) Extended transition for illiquid funds.--
``(A) Application.--The Board may, upon the
application of a banking entity, extend the period
during which the banking entity, to the extent necessary
to fulfill a contractual obligation that was in effect
on May 1, 2010, may take or retain its equity,
partnership, or other ownership interest in, or
otherwise provide additional capital to, an illiquid
fund.
``(B) Time limit on approval.--The Board may grant 1
extension under subparagraph (A), which may not exceed 5
years.
``(4) Divestiture required.--Except as otherwise provided in
subsection (d)(1)(G), a banking entity may not engage in any
activity prohibited under subsection (a)(1)(B) after the earlier
of--
``(A) the date on which the contractual obligation
to invest in the illiquid fund terminates; and
``(B) the date on which any extensions granted by
the Board under paragraph (3) expire.
``(5) <>  Additional capital during
transition period.--Notwithstanding paragraph (2), on the date
on which the rules are issued under subsection (b)(2), the
appropriate Federal banking agencies, the Securities and
Exchange Commission, and the Commodity Futures Trading
Commission shall issue rules, as provided in subsection (b)(2),
to impose additional capital requirements, and any other
restrictions, as appropriate, on any equity, partnership, or
ownership interest in or sponsorship of a hedge fund or private
equity fund by a banking entity.
``(6) Special rulemaking.--Not later <>
than 6 months after the date of enactment of this section, the
Board shall issues rules to implement paragraphs (2) and (3).

``(d) Permitted Activities.--
``(1) In general.--Notwithstanding the restrictions under
subsection (a), to the extent permitted by any other provision
of Federal or State law, and subject to the limitations under
paragraph (2) and any restrictions or limitations that the
appropriate Federal banking agencies, the Securities and
Exchange Commission, and the Commodity Futures Trading
Commission, may determine, the following activities (in this
section referred to as `permitted activities') are permitted:
``(A) The purchase, sale, acquisition, or
disposition of obligations of the United States or any
agency thereof, obligations, participations, or other
instruments of or issued by the Government National
Mortgage Association, the Federal National Mortgage
Association, the Federal Home Loan Mortgage Corporation,
a Federal Home Loan Bank, the Federal Agricultural
Mortgage Corporation, or a Farm Credit System
institution chartered under and subject to

[[Page 1624]]

the provisions of the Farm Credit Act of 1971 (12 U.S.C.
2001 et seq.), and obligations of any State or of any
political subdivision thereof.
``(B) The purchase, sale, acquisition, or
disposition of securities and other instruments
described in subsection (h)(4) in connection with
underwriting or market-making-related activities, to the
extent that any such activities permitted by this
subparagraph are designed not to exceed the reasonably
expected near term demands of clients, customers, or
counterparties.
``(C) Risk-mitigating hedging activities in
connection with and related to individual or aggregated
positions, contracts, or other holdings of a banking
entity that are designed to reduce the specific risks to
the banking entity in connection with and related to
such positions, contracts, or other holdings.
``(D) The purchase, sale, acquisition, or
disposition of securities and other instruments
described in subsection (h)(4) on behalf of customers.
``(E) Investments in one or more small business
investment companies, as defined in section 102 of the
Small Business Investment Act of 1958 (15 U.S.C. 662),
investments designed primarily to promote the public
welfare, of the type permitted under paragraph (11) of
section 5136 of the Revised Statutes of the United
States (12 U.S.C. 24), or investments that are qualified
rehabilitation expenditures with respect to a qualified
rehabilitated building or certified historic structure,
as such terms are defined in section 47 of the Internal
Revenue Code of 1986 or a similar State historic tax
credit program.
``(F) The purchase, sale, acquisition, or
disposition of securities and other instruments
described in subsection (h)(4) by a regulated insurance
company directly engaged in the business of insurance
for the general account of the company and by any
affiliate of such regulated insurance company, provided
that such activities by any affiliate are solely for the
general account of the regulated insurance company, if--
``(i) the purchase, sale, acquisition, or
disposition is conducted 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 appropriate Federal banking
agencies, after consultation with the Financial
Stability Oversight 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
particular law, regulation, or written guidance
described in clause (i) is insufficient to protect
the safety and soundness of the banking entity, or
of the financial stability of the United States.
``(G) Organizing and offering a private equity or
hedge fund, including serving as a general partner,
managing member, or trustee of the fund and in any
manner selecting or controlling (or having employees,
officers, directors, or agents who constitute) a
majority of the directors, trustees,

[[Page 1625]]

or management of the fund, including any necessary
expenses for the foregoing, only if--
``(i) the banking entity provides bona fide
trust, fiduciary, or investment advisory services;
``(ii) the fund is organized and offered only
in connection with the provision of bona fide
trust, fiduciary, or investment advisory services
and only to persons that are customers of such
services of the banking entity;
``(iii) the banking entity does not acquire or
retain an equity interest, partnership interest,
or other ownership interest in the funds except
for a de minimis investment subject to and in
compliance with paragraph (4);
``(iv) the banking entity complies with the
restrictions under paragraphs (1) and (2) of
subparagraph (f);
``(v) the banking entity does not, directly or
indirectly, guarantee, assume, or otherwise insure
the obligations or performance of the hedge fund
or private equity fund or of any hedge fund or
private equity fund in which such hedge fund or
private equity fund invests;
``(vi) the banking entity does not share with
the hedge fund or private equity fund, for
corporate, marketing, promotional, or other
purposes, the same name or a variation of the same
name;
``(vii) no director or employee of the banking
entity takes or retains an equity interest,
partnership interest, or other ownership interest
in the hedge fund or private equity fund, except
for any director or employee of the banking entity
who is directly engaged in providing investment
advisory or other services to the hedge fund or
private equity fund; and
``(viii) the banking entity discloses to
prospective and actual investors in the fund, in
writing, that any losses in such hedge fund or
private equity fund are borne solely by investors
in the fund and not by the banking entity, and
otherwise complies with any additional rules of
the appropriate Federal banking agencies, the
Securities and Exchange Commission, or the
Commodity Futures Trading Commission, as provided
in subsection (b)(2), designed to ensure that
losses in such hedge fund or private equity fund
are borne solely by investors in the fund and not
by the banking entity.
``(H) Proprietary trading conducted by a banking
entity pursuant to paragraph (9) or (13) of section
4(c), provided that the trading occurs solely outside of
the United States and that the banking entity is not
directly or indirectly controlled by a banking entity
that is organized under the laws of the United States or
of one or more States.
``(I) The acquisition or retention of any equity,
partnership, or other ownership interest in, or the
sponsorship of, a hedge fund or a private equity fund by
a banking entity pursuant to paragraph (9) or (13) of
section 4(c)

[[Page 1626]]

solely outside of the United States, provided that no
ownership interest in such hedge fund or private equity
fund is offered for sale or sold to a resident of the
United States and that the banking entity is not
directly or indirectly controlled by a banking entity
that is organized under the laws of the United States or
of one or more States.
``(J) Such other activity as the appropriate Federal
banking agencies, the Securities and Exchange
Commission, and the Commodity Futures Trading Commission
determine, by rule, as provided in subsection (b)(2),
would promote and protect the safety and soundness of
the banking entity and the financial stability of the
United States.
``(2) Limitation on permitted activities.--
``(A) In general.--No transaction, class of
transactions, or activity may be deemed a permitted
activity under paragraph (1) if the transaction, class
of transactions, or activity--
``(i) would involve or result in a material
conflict of interest (as such term shall be
defined by rule as provided in subsection (b)(2))
between the banking entity and its clients,
customers, or counterparties;
``(ii) would result, directly or indirectly,
in a material exposure by the banking entity to
high-risk assets or high-risk trading strategies
(as such terms shall be defined by rule as
provided in subsection (b)(2));
``(iii) would pose a threat to the safety and
soundness of such banking entity; or
``(iv) would pose a threat to the financial
stability of the United States.
``(B) Rulemaking.--The appropriate Federal banking
agencies, the Securities and Exchange Commission, and
the Commodity Futures Trading Commission shall issue
regulations to implement subparagraph (A), as part of
the regulations issued under subsection (b)(2).
``(3) Capital and quantitative limitations.--The appropriate
Federal banking agencies, the Securities and Exchange
Commission, and the Commodity Futures Trading Commission shall,
as provided in subsection (b)(2), adopt rules imposing
additional capital requirements and quantitative limitations,
including diversification requirements, regarding the activities
permitted under this section if the appropriate Federal banking
agencies, the Securities and Exchange Commission, and the
Commodity Futures Trading Commission determine that additional
capital and quantitative limitations are appropriate to protect
the safety and soundness of banking entities engaged in such
activities.
``(4) De minimis investment.--
``(A) In general.--A banking entity may make and
retain an investment in a hedge fund or private equity
fund that the banking entity organizes and offers,
subject to the limitations and restrictions in
subparagraph (B) for the purposes of--
``(i) establishing the fund and providing the
fund with sufficient initial equity for investment
to permit the fund to attract unaffiliated
investors; or

[[Page 1627]]

``(ii) making a de minimis investment.
``(B) Limitations and restrictions on investments.--
``(i) Requirement to seek other investors.--A
banking entity shall actively seek unaffiliated
investors to reduce or dilute the investment of
the banking entity to the amount permitted under
clause (ii).
``(ii) Limitations on size of investments.--
Notwithstanding any other provision of law,
investments by a banking entity in a hedge fund or
private equity fund shall--
``(I) <>  not later
than 1 year after the date of
establishment of the fund, be reduced
through redemption, sale, or dilution to
an amount that is not more than 3
percent of the total ownership interests
of the fund;
``(II) be immaterial to the banking
entity, as defined, by rule, pursuant to
subsection (b)(2), but in no case may
the aggregate of all of the interests of
the banking entity in all such funds
exceed 3 percent of the Tier 1 capital
of the banking entity.
``(iii) Capital.--For purposes of determining
compliance with applicable capital standards under
paragraph (3), the aggregate amount of the
outstanding investments by a banking entity under
this paragraph, including retained earnings, shall
be deducted from the assets and tangible equity of
the banking entity, and the amount of the
deduction shall increase commensurate with the
leverage of the hedge fund or private equity fund.
``(C) Extension.--Upon an application by a banking
entity, the Board may extend the period of time to meet
the requirements under subparagraph (B)(ii)(I) for 2
additional years, if the Board finds that an extension
would be consistent with safety and soundness and in the
public interest.

``(e) Anti-evasion.--
``(1) Rulemaking.--The appropriate Federal banking agencies,
the Securities and Exchange Commission, and the Commodity
Futures Trading Commission shall issue regulations, as part of
the rulemaking provided for in subsection (b)(2), regarding
internal controls and recordkeeping, in order to insure
compliance with this section.
``(2) Termination of activities or investment.--
Notwithstanding any other provision of law, whenever an
appropriate Federal banking agency, the Securities and Exchange
Commission, or the Commodity Futures Trading Commission, as
appropriate, has reasonable cause to believe that a banking
entity or nonbank financial company supervised by the Board
under the respective agency's jurisdiction has made an
investment or engaged in an activity in a manner that functions
as an evasion of the requirements of this section (including
through an abuse of any permitted activity) or otherwise
violates the restrictions under this section, the appropriate
Federal banking agency, the Securities and Exchange Commission,
or the Commodity Futures Trading Commission, as appropriate,
shall

[[Page 1628]]

order, after due notice and opportunity for hearing, the banking
entity or nonbank financial company supervised by the Board to
terminate the activity and, as relevant, dispose of the
investment. Nothing in this paragraph shall be construed to
limit the inherent authority of any Federal agency or State
regulatory authority to further restrict any investments or
activities under otherwise applicable provisions of law.

``(f) Limitations on Relationships With Hedge Funds and Private
Equity Funds.--
``(1) In general.--No banking entity that serves, directly
or indirectly, as the investment manager, investment adviser, or
sponsor to a hedge fund or private equity fund, or that
organizes and offers a hedge fund or private equity fund
pursuant to paragraph (d)(1)(G), and no affiliate of such
entity, may enter into a transaction with the fund, or with any
other hedge fund or private equity fund that is controlled by
such fund, that would be a covered transaction, as defined in
section 23A of the Federal Reserve Act (12 U.S.C. 371c), with
the hedge fund or private equity fund, as if such banking entity
and the affiliate thereof were a member bank and the hedge fund
or private equity fund were an affiliate thereof.
``(2) Treatment as member bank.--A banking entity that
serves, directly or indirectly, as the investment manager,
investment adviser, or sponsor to a hedge fund or private equity
fund, or that organizes and offers a hedge fund or private
equity fund pursuant to paragraph (d)(1)(G), shall be subject to
section 23B of the Federal Reserve Act (12 U.S.C. 371c-1), as if
such banking entity were a member bank and such hedge fund or
private equity fund were an affiliate thereof.
``(3) Permitted services.--
``(A) In general.--Notwithstanding paragraph (1),
the Board may permit a banking entity to enter into any
prime brokerage transaction with any hedge fund or
private equity fund in which a hedge fund or private
equity fund managed, sponsored, or advised by such
banking entity has taken an equity, partnership, or
other ownership interest, if--
``(i) the banking entity is in compliance with
each of the limitations set forth in subsection
(d)(1)(G) with regard to a hedge fund or private
equity fund organized and offered by such banking
entity;
``(ii) the chief executive officer (or
equivalent officer) of the banking entity
certifies in writing annually (with a duty to
update the certification if the information in the
certification materially changes) that the
conditions specified in subsection (d)(1)(g)(v)
are satisfied; and
``(iii) the Board has determined that such
transaction is consistent with the safe and sound
operation and condition of the banking entity.
``(B) Treatment of prime brokerage transactions.--
For purposes of subparagraph (A), a prime brokerage
transaction described in subparagraph (A) shall be
subject to section 23B of the Federal Reserve Act (12
U.S.C. 371c-1) as if the counterparty were an affiliate
of the banking entity.

[[Page 1629]]

``(4) Application to nonbank financial companies supervised
by the board.--The appropriate <>  Federal
banking agencies, the Securities and Exchange Commission, and
the Commodity Futures Trading Commission shall adopt rules, as
provided in subsection (b)(2), imposing additional capital
charges or other restrictions for nonbank financial companies
supervised by the Board to address the risks to and conflicts of
interest of banking entities described in paragraphs (1), (2),
and (3) of this subsection.

``(g) Rules of Construction.--
``(1) Limitation on contrary authority.--Except as provided
in this section, notwithstanding any other provision of law, the
prohibitions and restrictions under this section shall apply to
activities of a banking entity or nonbank financial company
supervised by the Board, even if such activities are authorized
for a banking entity or nonbank financial company supervised by
the Board.
``(2) Sale or securitization of loans.--Nothing in this
section shall be construed to limit or restrict the ability of a
banking entity or nonbank financial company supervised by the
Board to sell or securitize loans in a manner otherwise
permitted by law.
``(3) Authority of federal agencies and state regulatory
authorities.--Nothing in this section shall be construed to
limit the inherent authority of any Federal agency or State
regulatory authority under otherwise applicable provisions of
law.

``(h) Definitions.--In this section, the following definitions shall
apply:
``(1) Banking entity.--The term `banking entity' means any
insured depository institution (as defined in section 3 of the
Federal Deposit Insurance Act (12 U.S.C. 1813)), any company
that controls an insured depository institution, or that is
treated as a bank holding company for purposes of section 8 of
the International Banking Act of 1978, and any affiliate or
subsidiary of any such entity. For purposes of this paragraph,
the term `insured depository institution' does not include an
institution that functions solely in a trust or fiduciary
capacity, if--
``(A) all or substantially all of the deposits of
such institution are in trust funds and are received in
a bona fide fiduciary capacity;
``(B) no deposits of such institution which are
insured by the Federal Deposit Insurance Corporation are
offered or marketed by or through an affiliate of such
institution;
``(C) such institution does not accept demand
deposits or deposits that the depositor may withdraw by
check or similar means for payment to third parties or
others or make commercial loans; and
``(D) such institution does not--
``(i) obtain payment or payment related
services from any Federal Reserve bank, including
any service referred to in section 11A of the
Federal Reserve Act (12 U.S.C. 248a); or
``(ii) exercise discount or borrowing
privileges pursuant to section 19(b)(7) of the
Federal Reserve Act (12 U.S.C. 461(b)(7)).

[[Page 1630]]

``(2) Hedge fund; private equity fund.--The terms `hedge
fund' and `private equity fund' mean an issuer that would be an
investment company, as defined in the Investment Company Act of
1940 (15 U.S.C. 80a-1 et seq.), but for section 3(c)(1) or
3(c)(7) of that Act, or such similar funds as the appropriate
Federal banking agencies, the Securities and Exchange
Commission, and the Commodity Futures Trading Commission may, by
rule, as provided in subsection (b)(2), determine.
``(3) Nonbank financial company supervised by the board.--
The term `nonbank financial company supervised by the Board'
means a nonbank financial company supervised by the Board of
Governors, as defined in section 102 of the Financial Stability
Act of 2010.
``(4) Proprietary trading.--The term `proprietary trading',
when used with respect to a banking entity or nonbank financial
company supervised by the Board, means engaging as a principal
for the trading account of the banking entity or nonbank
financial company supervised by the Board in any transaction to
purchase or sell, or otherwise acquire or dispose of, any
security, any derivative, any contract of sale of a commodity
for future delivery, any option on any such security,
derivative, or contract, or any other security or financial
instrument that the appropriate Federal banking agencies, the
Securities and Exchange Commission, and the Commodity Futures
Trading Commission may, by rule as provided in subsection
(b)(2), determine.
``(5) Sponsor.--The term to `sponsor' a fund means--
``(A) to serve as a general partner, managing
member, or trustee of a fund;
``(B) in any manner to select or to control (or to
have employees, officers, or directors, or agents who
constitute) a majority of the directors, trustees, or
management of a fund; or
``(C) to share with a fund, for corporate,
marketing, promotional, or other purposes, the same name
or a variation of the same name.
``(6) Trading account.--The term `trading account' means any
account used for acquiring or taking positions in the securities
and instruments described in paragraph (4) principally for the
purpose of selling in the near term (or otherwise with the
intent to resell in order to profit from short-term price
movements), and any such other accounts as the appropriate
Federal banking agencies, the Securities and Exchange
Commission, and the Commodity Futures Trading Commission may, by
rule as provided in subsection (b)(2), determine.
``(7) Illiquid fund.--
``(A) In general.--The term `illiquid fund' means a
hedge fund or private equity fund that--
``(i) as of May 1, 2010, was principally
invested in, or was invested and contractually
committed to principally invest in, illiquid
assets, such as portfolio companies, real estate
investments, and venture capital investments; and
``(ii) makes all investments pursuant to, and
consistent with, an investment strategy to
principally invest in illiquid assets. In issuing
rules regarding

[[Page 1631]]

this subparagraph, the Board shall take into
consideration the terms of investment for the
hedge fund or private equity fund, including
contractual obligations, the ability of the fund
to divest of assets held by the fund, and any
other factors that the Board determines are
appropriate.
``(B) Hedge fund.--For the purposes of this
paragraph, the term `hedge fund' means any fund
identified under subsection (h)(2), and does not include
a private equity fund, as such term is used in section
203(m) of the Investment Advisers Act of 1940 (15 U.S.C.
80b-3(m)).''.
SEC. 620. STUDY OF BANK INVESTMENT ACTIVITIES.

(a) Study.--
(1) <> In general.--Not later than 18
months after the date of enactment of this Act, the appropriate
Federal banking agencies shall jointly review and prepare a
report on the activities that a banking entity, as such term is
defined in the Bank Holding Company Act of 1956 (12 U.S.C. 1841
et. seq.), may engage in under Federal and State law, including
activities authorized by statute and by order, interpretation
and guidance.
(2) Content.--In carrying out the study under paragraph (1),
the appropriate Federal banking agencies shall review and
consider--
(A) the type of activities or investments;
(B) any financial, operational, managerial, or
reputation risks associated with or presented as a
result of the banking entity engaged in the activity or
making the investment; and
(C) risk mitigation activities undertaken by the
banking entity with regard to the risks.

(b) Report and Recommendations to the Council and to Congress.--The
appropriate Federal banking agencies shall submit to the Council, the
Committee on Financial Services of the House of Representatives, and the
Committee on Banking, Housing, and Urban Affairs of the Senate the study
conducted pursuant to subsection (a) no later than 2 months after its
completion. In addition to the information described in subsection (a),
the report shall include recommendations regarding--
(1) whether each activity or investment has or could have a
negative effect on the safety and soundness of the banking
entity or the United States financial system;
(2) the appropriateness of the conduct of each activity or
type of investment by banking entities; and
(3) additional restrictions as may be necessary to address
risks to safety and soundness arising from the activities or
types of investments described in subsection (a).
SEC. 621. CONFLICTS OF INTEREST.

(a) In General.--The Securities Act of 1933 (15 U.S.C. 77a et seq.)
is amended by inserting after section 27A the following:
``SEC. 27B. <>  CONFLICTS OF INTEREST
RELATING TO CERTAIN SECURITIZATIONS.

``(a) In General.--An underwriter, placement agent, initial
purchaser, or sponsor, or any affiliate or subsidiary of any such
entity, of an asset-backed security (as such term is defined in

[[Page 1632]]

section 3 of the Securities and Exchange Act of 1934 (15 U.S.C. 78c),
which for the purposes of this section shall include a synthetic asset-
backed security), shall not, at any time for a period ending on the date
that is one year after the date of the first closing of the sale of the
asset-backed security, engage in any transaction that would involve or
result in any material conflict of interest with respect to any investor
in a transaction arising out of such activity.
``(b) <>  Rulemaking.--Not later than 270 days
after the date of enactment of this section, the Commission shall issue
rules for the purpose of implementing subsection (a).

``(c) Exception.--The prohibitions of subsection (a) shall not apply
to--
``(1) risk-mitigating hedging activities in connection with
positions or holdings arising out of the underwriting,
placement, initial purchase, or sponsorship of an asset-backed
security, provided that such activities are designed to reduce
the specific risks to the underwriter, placement agent, initial
purchaser, or sponsor associated with positions or holdings
arising out of such underwriting, placement, initial purchase,
or sponsorship; or
``(2) purchases or sales of asset-backed securities made
pursuant to and consistent with--
``(A) commitments of the underwriter, placement
agent, initial purchaser, or sponsor, or any affiliate
or subsidiary of any such entity, to provide liquidity
for the asset-backed security, or
``(B) bona fide market-making in the asset backed
security.

``(d) Rule of Construction.--This subsection shall not otherwise
limit the application of section 15G of the Securities Exchange Act of
1934.''.
(b) <>  Effective Date.--Section 27B of
the Securities Act of 1933, as added by this section, shall take effect
on the effective date of final rules issued by the Commission under
subsection (b) of such section 27B, except that subsections (b) and (d)
of such section 27B shall take effect on the date of enactment of this
Act.
SEC. 622. CONCENTRATION LIMITS ON LARGE FINANCIAL FIRMS.

The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) is
amended by adding at the end the following:
``SEC. 14. <> CONCENTRATION LIMITS ON LARGE
FINANCIAL FIRMS.

``(a) Definitions.--In this section--
``(1) the term `Council' means the Financial Stability
Oversight Council;
``(2) the term `financial company' means--
``(A) an insured depository institution;
``(B) a bank holding company;
``(C) a savings and loan holding company;
``(D) a company that controls an insured depository
institution;
``(E) a nonbank financial company supervised by the
Board under title I of the Dodd-Frank Wall Street Reform
and Consumer Protection Act; and
``(F) a foreign bank or company that is treated as a
bank holding company for purposes of this Act; and
``(3) the term `liabilities' means--

[[Page 1633]]

``(A) with respect to a United States financial
company--
``(i) the total risk-weighted assets of the
financial company, as determined under the risk-
based capital rules applicable to bank holding
companies, as adjusted to reflect exposures that
are deducted from regulatory capital; less
``(ii) the total regulatory capital of the
financial company under the risk-based capital
rules applicable to bank holding companies;
``(B) with respect to a foreign-based financial
company--
``(i) the total risk-weighted assets of the
United States operations of the financial company,
as determined under the applicable risk-based
capital rules, as adjusted to reflect exposures
that are deducted from regulatory capital; less
``(ii) the total regulatory capital of the
United States operations of the financial company,
as determined under the applicable risk-based
capital rules; and
``(C) with respect to an insurance company or other
nonbank financial company supervised by the Board, such
assets of the company as the Board shall specify by
rule, in order to provide for consistent and equitable
treatment of such companies.

``(b) Concentration Limit.--Subject to the recommendations by the
Council under subsection (e), a financial company may not merge or
consolidate with, acquire all or substantially all of the assets of, or
otherwise acquire control of, another company, if the total consolidated
liabilities of the acquiring financial company upon consummation of the
transaction would exceed 10 percent of the aggregate consolidated
liabilities of all financial companies at the end of the calendar year
preceding the transaction.
``(c) Exception to Concentration Limit.--With the prior written
consent of the Board, the concentration limit under subsection (b) shall
not apply to an acquisition--
``(1) of a bank in default or in danger of default;
``(2) with respect to which assistance is provided by the
Federal Deposit Insurance Corporation under section 13(c) of the
Federal Deposit Insurance Act (12 U.S.C. 1823(c)); or
``(3) that would result only in a de minimis increase in the
liabilities of the financial company.

``(d) Rulemaking and Guidance.--The Board shall issue regulations
implementing this section in accordance with the recommendations of the
Council under subsection (e), including the definition of terms, as
necessary. The Board may issue interpretations or guidance regarding the
application of this section to an individual financial company or to
financial companies in general.
``(e) Council Study and Rulemaking.--
``(1) <>  Study and recommendations.--Not
later than 6 months after the date of enactment of this section,
the Council shall--
``(A) complete a study of the extent to which the
concentration limit under this section would affect
financial stability, moral hazard in the financial
system, the efficiency and competitiveness of United
States financial firms

[[Page 1634]]

and financial markets, and the cost and availability of
credit and other financial services to households and
businesses in the United States; and
``(B) make recommendations regarding any
modifications to the concentration limit that the
Council determines would more effectively implement this
section.
``(2) <> Rulemaking.--Not later than 9
months after the date of completion of the study under paragraph
(1), and notwithstanding subsections (b) and (d), the Board
shall issue final regulations implementing this section, which
shall reflect any recommendations by the Council under paragraph
(1)(B).''.
SEC. 623. INTERSTATE MERGER TRANSACTIONS.

(a) Interstate Merger Transactions.--Section 18(c) of the Federal
Deposit Insurance Act (12 U.S.C. 1828(c)) is amended by adding at the
end the following:
``(13)(A) Except as provided in subparagraph (B), the responsible
agency may not approve an application for an interstate merger
transaction if the resulting insured depository institution (including
all insured depository institutions which are affiliates of the
resulting insured depository institution), upon consummation of the
transaction, would control more than 10 percent of the total amount of
deposits of insured depository institutions in the United States.
``(B) Subparagraph (A) shall not apply to an interstate merger
transaction that involves 1 or more insured depository institutions in
default or in danger of default, or with respect to which the
Corporation provides assistance under section 13.
``(C) In this paragraph--
``(i) the term `interstate merger transaction' means a
merger transaction involving 2 or more insured depository
institutions that have different home States and that are not
affiliates; and
``(ii) the term `home State' means--
``(I) with respect to a national bank, the State in
which the main office of the bank is located;
``(II) with respect to a State bank or State savings
association, the State by which the State bank or State
savings association is chartered; and
``(III) with respect to a Federal savings
association, the State in which the home office (as
defined by the regulations of the Director of the Office
of Thrift Supervision, or, on and after the transfer
date, the Comptroller of the Currency) of the Federal
savings association is located.''.

(b) Acquisitions by Bank Holding Companies.--
(1) In general.--Section 4 of the Bank Holding Company Act
of 1956 (12 U.S.C. 1843) is amended--
(A) in subsection (i), by adding at the end the
following:
``(8) Interstate acquisitions.--
``(A) In general.--The Board may not approve an
application by a bank holding company to acquire an
insured depository institution under subsection (c)(8)
or any other provision of this Act if--
``(i) the home State of such insured
depository institution is a State other than the
home State of the bank holding company; and

[[Page 1635]]

``(ii) the applicant (including all insured
depository institutions which are affiliates of
the applicant) controls, or upon consummation of
the transaction would control, more than 10
percent of the total amount of deposits of insured
depository institutions in the United States.
``(B) Exception.--Subparagraph (A) shall not apply
to an acquisition that involves an insured depository
institution in default or in danger of default, or with
respect to which the Federal Deposit Insurance
Corporation provides assistance under section 13 of the
Federal Deposit Insurance Act (12 U.S.C. 1823).''; and
(B) in subsection (k)(6)(B), by striking ``savings
association'' and inserting ``insured depository
institution''.
(2) Definitions.--Section 2(o)(4) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1841(o)(4)) is amended--
(A) in subparagraph (B), by striking ``and'' at the
end;
(B) in subparagraph (C)(ii), by striking the period
at the end and inserting a semicolon; and
(C) by adding at the end the following:
``(D) with respect to a State savings association,
the State by which the savings association is chartered;
and
``(E) with respect to a Federal savings association,
the State in which the home office (as defined by the
regulations of the Director of the Office of Thrift
Supervision, or, on and after the transfer date, the
Comptroller of the Currency) of the Federal savings
association is located.''.

(c) Acquisitions by Savings and Loan Holding Companies.--Section
10(e)(2) of the Home Owners' Loan Act (12 U.S.C. 1467a(e)(2)) is
amended--
(1) in paragraph (2)--
(A) in subparagraph (C), by striking ``or'' at the
end;
(B) in subparagraph (D), by striking the period at
the end and inserting ``, or''; and
(C) by adding at the end the following:
``(E) in the case of an application by a savings and
loan holding company to acquire an insured depository
institution, if--
``(i) the home State of the insured depository
institution is a State other than the home State
of the savings and loan holding company;
``(ii) the applicant (including all insured
depository institutions which are affiliates of
the applicant) controls, or upon consummation of
the transaction would control, more than 10
percent of the total amount of deposits of insured
depository institutions in the United States; and
``(iii) the acquisition does not involve an
insured depository institution in default or in
danger of default, or with respect to which the
Federal Deposit Insurance Corporation provides
assistance under section 13 of the Federal Deposit
Insurance Act (12 U.S.C. 1823).''; and
(2) by adding at the end the following:
``(7) Definitions.--For purposes of paragraph (2)(E)--
``(A) the terms `default', `in danger of default',
and `insured depository institution' have the same
meanings

[[Page 1636]]

as in section 3 of the Federal Deposit Insurance Act (12
U.S.C. 1813); and
``(B) the term `home State' means--
``(i) with respect to a national bank, the
State in which the main office of the bank is
located;
``(ii) with respect to a State bank or State
savings association, the State by which the
savings association is chartered;
``(iii) with respect to a Federal savings
association, the State in which the home office
(as defined by the regulations of the Director of
the Office of Thrift Supervision, or, on and after
the transfer date, the Comptroller of the
Currency) of the Federal savings association is
located; and
``(iv) with respect to a savings and loan
holding company, the State in which the amount of
total deposits of all insured depository
institution subsidiaries of such company was the
greatest on the date on which the company became a
savings and loan holding company.''.
SEC. 624. QUALIFIED THRIFT LENDERS.

Section 10(m)(3) of the Home Owners' Loan Act (12 U.S.C.
1467a(m)(3)) is amended--
(1) by striking subparagraph (A) and inserting the
following:
``(A) In general.--A savings association that fails
to become or remain a qualified thrift lender shall
immediately be subject to the restrictions under
subparagraph (B).''; and
(2) in subparagraph (B)(i), by striking subclause (III) and
inserting the following:
``(III) Dividends.--The savings
association may not pay dividends,
except for dividends that--
``(aa) would be permissible
for a national bank;
``(bb) are necessary to meet
obligations of a company that
controls such savings
association; and
``(cc) are specifically
approved by the Comptroller of
the Currency and the Board after
a written request submitted to
the Comptroller of the Currency
and the Board by the savings
association not later than 30
days before the date of the
proposed payment.
``(IV) Regulatory authority.--A
savings association that fails to become
or remain a qualified thrift lender
shall be deemed to have violated section
5 of the Home Owners' Loan Act (12
U.S.C. 1464) and subject to actions
authorized by section 5(d) of the Home
Owners' Loan Act (12 U.S.C. 1464(d)).''.
SEC. 625. TREATMENT OF DIVIDENDS BY CERTAIN MUTUAL HOLDING
COMPANIES.

(a) In General.--Section 10(o) of the Home Owners' Loan Act (12
U.S.C. 1467a(o) is amended by adding at the end the following:

[[Page 1637]]

``(11) Dividends.--
``(A) Declaration of dividends.--
``(i) <> Advance notice
required.--Each subsidiary of a mutual holding
company that is a savings association shall give
the appropriate Federal banking agency and the
Board notice not later than 30 days before the
date of a proposed declaration by the board of
directors of the savings association of any
dividend on the guaranty, permanent, or other
nonwithdrawable stock of the savings association.
``(ii) <>  Invalid
dividends.--Any dividend described in clause (i)
that is declared without giving notice to the
appropriate Federal banking agency and the Board
under clause (i), or that is declared during the
30-day period preceding the date of a proposed
declaration for which notice is given to the
appropriate Federal banking agency and the Board
under clause (i), shall be invalid and shall
confer no rights or benefits upon the holder of
any such stock.
``(B) Waiver of dividends.--A mutual holding company
may waive the right to receive any dividend declared by
a subsidiary of the mutual holding company, if--
``(i) no insider of the mutual holding
company, associate of an insider, or tax-qualified
or non-tax-qualified employee stock benefit plan
of the mutual holding company holds any share of
the stock in the class of stock to which the
waiver would apply; or
``(ii) <> the mutual holding
company gives written notice to the Board of the
intent of the mutual holding company to waive the
right to receive dividends, not later than 30 days
before the date of the proposed date of payment of
the dividend, and the Board does not object to the
waiver.
``(C) Resolution included in waiver notice.--A
notice of a waiver under subparagraph (B) shall include
a copy of the resolution of the board of directors of
the mutual holding company, in such form and substance
as the Board may determine, together with any supporting
materials relied upon by the board of directors of the
mutual holding company, concluding that the proposed
dividend waiver is consistent with the fiduciary duties
of the board of directors to the mutual members of the
mutual holding company.
``(D) Standards for waiver of dividend.--The Board
may not object to a waiver of dividends under
subparagraph (B) if--
``(i) the waiver would not be detrimental to
the safe and sound operation of the savings
association;
``(ii) the board of directors of the mutual
holding company expressly determines that a waiver
of the dividend by the mutual holding company is
consistent with the fiduciary duties of the board
of directors to the mutual members of the mutual
holding company; and
``(iii) the mutual holding company has, prior
to December 1, 2009--

[[Page 1638]]

``(I) reorganized into a mutual
holding company under subsection (o);
``(II) issued minority stock either
from its mid-tier stock holding company
or its subsidiary stock savings
association; and
``(III) waived dividends it had a
right to receive from the subsidiary
stock savings association.
``(E) Valuation.--
``(i) In general.--The appropriate Federal
banking agency shall consider waived dividends in
determining an appropriate exchange ratio in the
event of a full conversion to stock form.
``(ii) Exception.--In the case of a savings
association that has reorganized into a mutual
holding company, has issued minority stock from a
mid-tier stock holding company or a subsidiary
stock savings association of the mutual holding
company, and has waived dividends it had a right
to receive from a subsidiary savings association
before December 1, 2009, the appropriate Federal
banking agency shall not consider waived dividends
in determining an appropriate exchange ratio in
the event of a full conversion to stock form.''.

(b) <> Effective Date.--The amendment made
by subsection (a) shall take effect on the transfer date.
SEC. 626. INTERMEDIATE HOLDING COMPANIES.

The Home Owners' Loan Act (12 U.S.C. 1461 et seq.) is amended by
inserting after section 10 (12 U.S.C. 1467a) the following new section:
``SEC. 10A. <>  INTERMEDIATE HOLDING
COMPANIES.

``(a) Definition.--For purposes of this section:
``(1) Financial activities.--The term `financial activities'
means activities described in clauses (i) and (ii) of section
10(c)(9)(A).
``(2) Grandfathered unitary savings and loan holding
company.--The term `grandfathered unitary savings and loan
holding company' means a company described in section
10(c)(9)(C).
``(3) Internal financial activities.--The term `internal
financial activities' includes--
``(A) internal financial activities conducted by a
grandfathered savings and loan holding company or any
affiliate; and
``(B) internal treasury, investment, and employee
benefit functions.

``(b) Requirement.--
``(1) In general.--
``(A) Activities other than financial activities.--
If <>  a grandfathered unitary savings
and loan holding company conducts activities other than
financial activities, the Board may require such company
to establish and conduct all or a portion of such
financial activities in or through an intermediate
holding company, which shall be a savings and loan
holding company, established pursuant to regulations of
the Board, not later than 90 days (or such longer

[[Page 1639]]

period as the Board may deem appropriate) after the
transfer date.
``(B) Other activities.--Notwithstanding
subparagraph (A), the Board shall require a
grandfathered unitary savings and loan holding company
to establish an intermediate holding company if the
Board makes a determination that the establishment of
such intermediate holding company is necessary--
``(i) to appropriately supervise activities
that are determined to be financial activities; or
``(ii) to ensure that supervision by the Board
does not extend to the activities of such company
that are not financial activities.
``(2) Internal financial activities.--
``(A) Treatment of internal financial activities.--
For purposes of this subsection, the internal financial
activities of a grandfathered unitary savings and loan
holding company shall not be required to be placed in an
intermediate holding company.
``(B) Grandfathered activities.--A grandfathered
unitary savings and loan holding company may continue to
engage in an internal financial activity, subject to
review by the Board to determine whether engaging in
such activity presents undue risk to the grandfathered
unitary savings and loan holding company or to the
financial stability of the United States, if--
``(i) the grandfathered unitary savings and
loan holding company engaged in the activity
during the year before the date of enactment of
this section; and
``(ii) at least \2/3\ of the assets or \2/3\
of the revenues generated from the activity are
from or attributable to the grandfathered unitary
savings and loan holding company.
``(3) Source of strength.--A grandfathered unitary savings
and loan holding company that directly or indirectly controls an
intermediate holding company established under this section
shall serve as a source of strength to its subsidiary
intermediate holding company.
``(4) Parent company reports.--The Board, may from time to
time, examine and require reports under oath from a
grandfathered unitary savings and loan holding company that
controls an intermediate holding company, and from the
appropriate officers or directors of such company, solely for
purposes of ensuring compliance with the provisions of this
section, including assessing the ability of the company to serve
as a source of strength to its subsidiary intermediate holding
company as required under paragraph (3) and enforcing compliance
with such requirement.
``(5) Limited parent company enforcement.--
``(A) In general.--In addition to any other
authority of the Board, the Board may enforce compliance
with the provisions of this subsection that are
applicable to any company described in paragraph (1)(A)
that controls an intermediate holding company under
section 8 of the Federal Deposit Insurance Act, and a
company described in paragraph (1)(A) shall be subject
to such section (solely for purposes of this
subparagraph) in the same manner

[[Page 1640]]

and to the same extent as if the company described in
paragraph (1)(A) were a savings and loan holding
company.
``(B) Application of other act.--Any violation of
this subsection by a grandfathered unitary savings and
loan holding company that controls an intermediate
holding company may also be treated as a violation of
the Federal Deposit Insurance Act for purposes of
subparagraph (A).
``(C) No effect on other authority.--No provision of
this paragraph shall be construed as limiting any
authority of the Board or any other Federal agency under
any other provision of law.

``(c) Regulations.--The Board--
``(1) shall promulgate regulations to establish the criteria
for determining whether to require a grandfathered unitary
savings and loan holding company to establish an intermediate
holding company under subsection (b); and
``(2) may promulgate regulations to establish any
restrictions or limitations on transactions between an
intermediate holding company or a parent of such company and its
affiliates, as necessary to prevent unsafe and unsound practices
in connection with transactions between the intermediate holding
company, or any subsidiary thereof, and its parent company or
affiliates that are not subsidiaries of the intermediate holding
company, except that such regulations shall not restrict or
limit any transaction in connection with the bona fide
acquisition or lease by an unaffiliated person of assets, goods,
or services.

``(d) Rules of Construction.--
``(1) Activities.--Nothing in this section shall be
construed to require a grandfathered unitary savings and loan
holding company to conform its activities to permissible
activities.
``(2) Permissible corporate reorganization.--The formation
of an intermediate holding company as required in subsection (b)
shall be presumed to be a permissible corporate reorganization
as described in section 10(c)(9)(D).''.
SEC. 627. INTEREST-BEARING TRANSACTION ACCOUNTS AUTHORIZED.

(a) Repeal of Prohibition on Payment of Interest on Demand
Deposits.--
(1) Federal reserve act.--Section 19(i) of the Federal
Reserve Act (12 U.S.C. 371a) is amended to read as follows:

``(i) [Repealed]''.
(2) Home owners' loan act.--The first sentence of section
5(b)(1)(B) of the Home Owners' Loan Act (12 U.S.C.
1464(b)(1)(B)) is amended by striking ``savings association may
not--'' and all that follows through ``(ii) permit any'' and
inserting ``savings association may not permit any''.
(3) Federal deposit insurance act.--Section 18(g) of the
Federal Deposit Insurance Act (12 U.S.C. 1828(g)) is amended to
read as follows:

``(g) [Repealed]''.
(b) <> Effective Date.--The amendments made
by subsection (a) shall take effect 1 year after the date of the
enactment of this Act.
SEC. 628. CREDIT CARD BANK SMALL BUSINESS LENDING.

Section 2(c)(2)(F)(v) of the Bank Holding Company Act of 1956 (12
U.S.C. 1841(c)(2)(F)(v)) is amended by inserting before the

[[Page 1641]]

period the following: ``, other than credit card loans that are made to
businesses that meet the criteria for a small business concern to be
eligible for business loans under regulations established by the Small
Business Administration under part 121 of title 13, Code of Federal
Regulations''.

TITLE <>  VII--WALL STREET TRANSPARENCY AND ACCOUNTABILITY
SEC. 701. <>  SHORT TITLE.

This title may be cited as the ``Wall Street Transparency and
Accountability Act of 2010''.

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

PART I--REGULATORY AUTHORITY

SEC. 711. <>  DEFINITIONS.

In this subtitle, the terms ``prudential regulator'', ``swap'',
``swap dealer'', ``major swap participant'', ``swap data repository'',
``associated person of a swap dealer or major swap participant'',
``eligible contract participant'', ``swap execution facility'',
``security-based swap'', ``security-based swap dealer'', ``major
security-based swap participant'', and ``associated person of a
security-based swap dealer or major security-based swap participant''
have the meanings given the terms in section 1a of the Commodity
Exchange Act (7 U.S.C. 1a), including any modification of the meanings
under section 721(b) of this Act.
SEC. 712. <>  REVIEW OF REGULATORY AUTHORITY.

(a) Consultation.--
(1) Commodity futures trading commission.--Before commencing
any rulemaking or issuing an order regarding swaps, swap
dealers, major swap participants, swap data repositories,
derivative clearing organizations with regard to swaps, persons
associated with a swap dealer or major swap participant,
eligible contract participants, or swap execution facilities
pursuant to this subtitle, the Commodity Futures Trading
Commission shall consult and coordinate to the extent possible
with the Securities and Exchange Commission and the prudential
regulators for the purposes of assuring regulatory consistency
and comparability, to the extent possible.
(2) Securities and exchange commission.--Before commencing
any rulemaking or issuing an order regarding security-based
swaps, security-based swap dealers, major security-based swap
participants, security-based swap data repositories, clearing
agencies with regard to security-based swaps, persons associated
with a security-based swap dealer or major security-based swap
participant, eligible contract participants with regard to
security-based swaps, or security-based swap execution
facilities pursuant to subtitle B, the Securities and Exchange
Commission shall consult and coordinate to the

[[Page 1642]]

extent possible with the Commodity Futures Trading Commission
and the prudential regulators for the purposes of assuring
regulatory consistency and comparability, to the extent
possible.
(3) Procedures and deadline.--Such regulations shall be
prescribed in accordance with applicable requirements of title
5, United States Code, and shall be issued in final form not
later than 360 days after the date of enactment of this Act.
(4) Applicability.--The requirements of paragraphs (1) and
(2) shall not apply to an order issued--
(A) in connection with or arising from a violation
or potential violation of any provision of the Commodity
Exchange Act (7 U.S.C. 1 et seq.);
(B) in connection with or arising from a violation
or potential violation of any provision of the
securities laws; or
(C) in any proceeding that is conducted on the
record in accordance with sections 556 and 557 of title
5, United States Code.
(5) Effect.--Nothing in this subsection authorizes any
consultation or procedure for consultation that is not
consistent with the requirements of subchapter II of chapter 5,
and chapter 7, of title 5, United States Code (commonly known as
the ``Administrative Procedure Act'').
(6) Rules; orders.--In developing and promulgating rules or
orders pursuant to this subsection, each Commission shall
consider the views of the prudential regulators.
(7) Treatment of similar products and entities.--
(A) In general.--In adopting rules and orders under
this subsection, the Commodity Futures Trading
Commission and the Securities and Exchange Commission
shall treat functionally or economically similar
products or entities described in paragraphs (1) and (2)
in a similar manner.
(B) Effect.--Nothing in this subtitle requires the
Commodity Futures Trading Commission or the Securities
and Exchange Commission to adopt joint rules or orders
that treat functionally or economically similar products
or entities described in paragraphs (1) and (2) in an
identical manner.
(8) Mixed swaps.--The Commodity Futures Trading Commission
and the Securities and Exchange Commission, after consultation
with the Board of Governors, shall jointly prescribe such
regulations regarding mixed swaps, as described in section
1a(47)(D) of the Commodity Exchange Act (7 U.S.C. 1a(47)(D)) and
in section 3(a)(68)(D) of the Securities Exchange Act of 1934
(15 U.S.C. 78c(a)(68)(D)), as may be necessary to carry out the
purposes of this title.

(b) Limitation.--
(1) Commodity futures trading commission.--Nothing in this
title, unless specifically provided, confers jurisdiction on the
Commodity Futures Trading Commission to issue a rule,
regulation, or order providing for oversight or regulation of--
(A) security-based swaps; or
(B) with regard to its activities or functions
concerning security-based swaps--

[[Page 1643]]

(i) security-based swap dealers;
(ii) major security-based swap participants;
(iii) security-based swap data repositories;
(iv) associated persons of a security-based
swap dealer or major security-based swap
participant;
(v) eligible contract participants with
respect to security-based swaps; or
(vi) swap execution facilities with respect to
security-based swaps.
(2) Securities and exchange commission.--Nothing in this
title, unless specifically provided, confers jurisdiction on the
Securities and Exchange Commission or State securities
regulators to issue a rule, regulation, or order providing for
oversight or regulation of--
(A) swaps; or
(B) with regard to its activities or functions
concerning swaps--
(i) swap dealers;
(ii) major swap participants;
(iii) swap data repositories;
(iv) persons associated with a swap dealer or
major swap participant;
(v) eligible contract participants with
respect to swaps; or
(vi) swap execution facilities with respect to
swaps.
(3) Prohibition on certain futures associations and national
securities associations.--
(A) Futures associations.--Notwithstanding any other
provision of law (including regulations), unless
otherwise authorized by this title, no futures
association registered under section 17 of the Commodity
Exchange Act (7 U.S.C. 21) may issue a rule, regulation,
or order for the oversight or regulation of, or
otherwise assert jurisdiction over, for any purpose, any
security-based swap, except that this subparagraph shall
not limit the authority of a registered futures
association to examine for compliance with, and enforce,
its rules on capital adequacy.
(B) National securities associations.--
Notwithstanding any other provision of law (including
regulations), unless otherwise authorized by this title,
no national securities association registered under
section 15A of the Securities Exchange Act of 1934 (15
U.S.C. 78o-3) may issue a rule, regulation, or order for
the oversight or regulation of, or otherwise assert
jurisdiction over, for any purpose, any swap, except
that this subparagraph shall not limit the authority of
a national securities association to examine for
compliance with, and enforce, its rules on capital
adequacy.

(c) Objection to Commission Regulation.--
(1) Filing of petition for review.--
(A) <> In general.--If either
Commission referred to in this section determines that a
final rule, regulation, or order of the other Commission
conflicts with subsection (a)(7) or (b), then the
complaining Commission may obtain review of the final
rule, regulation, or order in the United States Court of
Appeals for the District of Columbia Circuit by filing
in the court, not later than 60 days after the

[[Page 1644]]

date of publication of the final rule, regulation, or
order, a written petition requesting that the rule,
regulation, or order be set aside.
(B) Expedited proceeding.--A proceeding described in
subparagraph (A) shall be expedited by the United States
Court of Appeals for the District of Columbia Circuit.
(2) Transmittal of petition and record.--
(A) In general.--A copy <>  of a
petition described in paragraph (1) shall be transmitted
not later than 1 business day after the date of filing
by the complaining Commission to the Secretary of the
responding Commission.
(B) Duty of responding commission.--On receipt of
the copy of a petition described in paragraph (1), the
responding Commission shall file with the United States
Court of Appeals for the District of Columbia Circuit--
(i) a copy of the rule, regulation, or order
under review (including any documents referred to
therein); and
(ii) any other materials prescribed by the
United States Court of Appeals for the District of
Columbia Circuit.
(3) Standard of review.--The United States Court of Appeals
for the District of Columbia Circuit shall--
(A) give deference to the views of neither
Commission; and
(B) determine to affirm or set aside a rule,
regulation, or order of the responding Commission under
this subsection, based on the determination of the court
as to whether the rule, regulation, or order is in
conflict with subsection (a)(7) or (b), as applicable.
(4) Judicial stay.--The filing of a petition by the
complaining Commission pursuant to paragraph (1) shall operate
as a stay of the rule, regulation, or order until the date on
which the determination of the United States Court of Appeals
for the District of Columbia Circuit is final (including any
appeal of the determination).

(d) Joint Rulemaking.--
(1) In general.--Notwithstanding any other provision of this
title and subsections (b) and (c), the Commodity Futures Trading
Commission and the Securities and Exchange Commission, in
consultation with the Board of Governors, shall further define
the terms ``swap'', ``security-based swap'', ``swap dealer'',
``security-based swap dealer'', ``major swap participant'',
``major security-based swap participant'', ``eligible contract
participant'', and ``security-based swap agreement'' in section
1a(47)(A)(v) of the Commodity Exchange Act (7 U.S.C.
1a(47)(A)(v)) and section 3(a)(78) of the Securities Exchange
Act of 1934 (15 U.S.C. 78c(a)(78)).
(2) Authority of the commissions.--
(A) In general.--Notwithstanding any other provision
of this title, the Commodity Futures Trading Commission
and the Securities and Exchange Commission, in
consultation with the Board of Governors, shall jointly
adopt such other rules regarding such definitions as the
Commodity Futures Trading Commission and the Securities
and

[[Page 1645]]

Exchange Commission determine are necessary and
appropriate, in the public interest, and for the
protection of investors.
(B) Trade repository recordkeeping.--Notwithstanding
any other provision of this title, the Commodity Futures
Trading Commission and the Securities and Exchange
Commission, in consultation with the Board of Governors,
shall engage in joint rulemaking to jointly adopt a rule
or rules governing the books and records that are
required to be kept and maintained regarding security-
based swap agreements by persons that are registered as
swap data repositories under the Commodity Exchange Act,
including uniform rules that specify the data elements
that shall be collected and maintained by each
repository.
(C) Books and records.--Notwithstanding any other
provision of this title, the Commodity Futures Trading
Commission and the Securities and Exchange Commission,
in consultation with the Board of Governors, shall
engage in joint rulemaking to jointly adopt a rule or
rules governing books and records regarding security-
based swap agreements, including daily trading records,
for swap dealers, major swap participants, security-
based swap dealers, and security-based swap
participants.
(D) Comparable rules.--Rules and regulations
prescribed jointly under this title by the Commodity
Futures Trading Commission and the Securities and
Exchange Commission shall be comparable to the maximum
extent possible, taking into consideration differences
in instruments and in the applicable statutory
requirements.
(E) Tracking uncleared transactions.--Any rules
prescribed under subparagraph (A) shall require the
maintenance of records of all activities relating to
security-based swap agreement transactions defined under
subparagraph (A) that are not cleared.
(F) Sharing of information.--The Commodity Futures
Trading Commission shall make available to the
Securities and Exchange Commission information relating
to security-based swap agreement transactions defined in
subparagraph (A) that are not cleared.
(3) Financial stability oversight council.--In the event
that the Commodity Futures Trading Commission and the Securities
and Exchange Commission fail to jointly prescribe rules pursuant
to paragraph (1) or (2) in a timely manner, at the request of
either Commission, the Financial Stability Oversight Council
shall resolve the dispute--
(A) within a reasonable time after receiving the
request;
(B) after consideration of relevant information
provided by each Commission; and
(C) by agreeing with 1 of the Commissions regarding
the entirety of the matter or by determining a
compromise position.
(4) Joint interpretation.--Any interpretation of, or
guidance by either Commission regarding, a provision of this
title, shall be effective only if issued jointly by the
Commodity Futures Trading Commission and the Securities and
Exchange Commission, after consultation with the Board of
Governors,

[[Page 1646]]

if this title requires the Commodity Futures Trading Commission
and the Securities and Exchange Commission to issue joint
regulations to implement the provision.

(e) <> Global Rulemaking Timeframe.--Unless
otherwise provided in this title, or an amendment made by this title,
the Commodity Futures Trading Commission or the Securities and Exchange
Commission, or both, shall individually, and not jointly, promulgate
rules and regulations required of each Commission under this title or an
amendment made by this title not later than 360 days after the date of
enactment of this Act.

(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.
SEC. 713. PORTFOLIO MARGINING CONFORMING CHANGES.

(a) Securities Exchange Act of 1934.--Section 15(c)(3) of the
Securities Exchange Act of 1934 (15 U.S.C. 78o(c)(3)) is amended by
adding at the end the following:
``(C) Notwithstanding any provision of sections
2(a)(1)(C)(i) or 4d(a)(2) of the Commodity Exchange Act
and the rules and regulations thereunder, and pursuant
to an exemption granted by the Commission under section
36 of this title or pursuant to a rule or regulation,
cash and securities may be held by a broker or dealer
registered pursuant to subsection (b)(1) and also
registered as a futures commission merchant pursuant to
section 4f(a)(1) of the Commodity Exchange Act, in a
portfolio margining account carried as a futures account
subject to section 4d of the Commodity Exchange Act and
the rules and regulations thereunder, pursuant to a
portfolio margining program approved by the Commodity
Futures Trading Commission, and subject to subchapter IV
of chapter 7 of title 11 of the United States Code and
the rules and regulations
thereunder. <>  The Commission
shall consult with the Commodity Futures Trading
Commission to adopt rules to ensure that such
transactions and accounts are subject to comparable
requirements to the extent practicable for similar
products.''.

(b) Commodity Exchange Act.--Section 4d of the Commodity Exchange
Act (7 U.S.C. 6d) is amended by adding at the end the following:

[[Page 1647]]

``(h) <>  Notwithstanding subsection (a)(2) or the
rules and regulations thereunder, and pursuant to an exemption granted
by the Commission under section 4(c) of this Act or pursuant to a rule
or regulation, a futures commission merchant that is registered pursuant
to section 4f(a)(1) of this Act and also registered as a broker or
dealer pursuant to section 15(b)(1) of the Securities Exchange Act of
1934 may, pursuant to a portfolio margining program approved by the
Securities and Exchange Commission pursuant to section 19(b) of the
Securities Exchange Act of 1934, hold in a portfolio margining account
carried as a securities account subject to section 15(c)(3) of the
Securities Exchange Act of 1934 and the rules and regulations
thereunder, a contract for the purchase or sale of a commodity for
future delivery or an option on such a contract, and any money,
securities or other property received from a customer to margin,
guarantee or secure such a contract, or accruing to a customer as the
result of such a contract. <> The Commission shall
consult with the Securities and Exchange Commission to adopt rules to
ensure that such transactions and accounts are subject to comparable
requirements to the extent practical for similar products.''.

(c) Duty of Commodity Futures Trading Commission.--Section 20 of the
Commodity Exchange Act (7 U.S.C. 24) is amended by adding at the end the
following:
``(c) The Commission shall exercise its authority to ensure that
securities held in a portfolio margining account carried as a futures
account are customer property and the owners of those accounts are
customers for the purposes of subchapter IV of chapter 7 of title 11 of
the United States Code.''.
SEC. 714. <>  ABUSIVE SWAPS.

The Commodity Futures Trading Commission or the Securities and
Exchange Commission, or both, individually may, by rule or order--
(1) collect information as may be necessary concerning the
markets for any types of--
(A) swap (as defined in section 1a of the Commodity
Exchange Act (7 U.S.C. 1a)); or
(B) security-based swap (as defined in section 1a of
the Commodity Exchange Act (7 U.S.C. 1a)); and
(2) <>  issue a report with respect to any
types of swaps or security-based swaps that the Commodity
Futures Trading Commission or the Securities and Exchange
Commission determines to be detrimental to--
(A) the stability of a financial market; or
(B) participants in a financial market.
SEC. 715. <>  AUTHORITY TO PROHIBIT
PARTICIPATION IN SWAP ACTIVITIES.

Except as provided in section 4 of the Commodity Exchange Act (7
U.S.C. 6), if the Commodity Futures Trading Commission or the Securities
and Exchange Commission determines that the regulation of swaps or
security-based swaps markets in a foreign country undermines the
stability of the United States financial system, either Commission, in
consultation with the Secretary of the Treasury, may prohibit an entity
domiciled in the foreign country from participating in the United States
in any swap or security-based swap activities.

[[Page 1648]]

SEC. 716. <>  PROHIBITION AGAINST FEDERAL
GOVERNMENT BAILOUTS OF SWAPS ENTITIES.

(a) Prohibition on Federal Assistance.--Notwithstanding any other
provision of law (including regulations), no Federal assistance may be
provided to any swaps entity with respect to any swap, security-based
swap, or other activity of the swaps entity.
(b) Definitions.--In this section:
(1) Federal assistance.--The term ``Federal assistance''
means the use of any advances from any Federal Reserve credit
facility or discount window that is not part of a program or
facility with broad-based eligibility under section 13(3)(A) of
the Federal Reserve Act, Federal Deposit Insurance Corporation
insurance or guarantees for the purpose of--
(A) making any loan to, or purchasing any stock,
equity interest, or debt obligation of, any swaps
entity;
(B) purchasing the assets of any swaps entity;
(C) guaranteeing any loan or debt issuance of any
swaps entity; or
(D) entering into any assistance arrangement
(including tax breaks), loss sharing, or profit sharing
with any swaps entity.
(2) Swaps entity.--
(A) In general.--The term ``swaps entity'' means any
swap dealer, security-based swap dealer, major swap
participant, major security-based swap participant, that
is registered under--
(i) the Commodity Exchange Act (7 U.S.C. 1 et
seq.); or
(ii) the Securities Exchange Act of 1934 (15
U.S.C. 78a et seq.).
(B) Exclusion.--The term ``swaps entity'' does not
include any major swap participant or major security-
based swap participant that is an insured depository
institution.

(c) Affiliates of Insured Depository Institutions.--The prohibition
on Federal assistance contained in subsection (a) does not apply to and
shall not prevent an insured depository institution from having or
establishing an affiliate which is a swaps entity, as long as such
insured depository institution is part of a bank holding company, or
savings and loan holding company, that is supervised by the Federal
Reserve and such swaps entity affiliate complies with sections 23A and
23B of the Federal Reserve Act and such other requirements as the
Commodity Futures Trading Commission or the Securities Exchange
Commission, as appropriate, and the Board of Governors of the Federal
Reserve System, may determine to be necessary and appropriate.
(d) Only Bona Fide Hedging and Traditional Bank Activities
Permitted.--The prohibition <>  in subsection (a)
shall apply to any insured depository institution unless the insured
depository institution limits its swap or security-based swap activities
to:
(1) Hedging and other similar risk mitigating activities
directly related to the insured depository institution's
activities.
(2) Acting as a swaps entity for swaps or security-based
swaps involving rates or reference assets that are permissible
for investment by a national bank under the paragraph designated
as ``Seventh.'' of section 5136 of the Revised Statutes of the
United States ( 12 U.S.C. 24), other than as described in
paragraph (3).

[[Page 1649]]

(3) Limitation on credit default swaps.--Acting as a swaps
entity for credit default swaps, including swaps or security-
based swaps referencing the credit risk of asset-backed
securities as defined in section 3(a)(77) of the Securities
Exchange Act of 1934 (15 U.S.C. 78c(a)(77)) (as amended by this
Act) shall not be considered a bank permissible activity for
purposes of subsection (d)(2) unless such swaps or security-
based swaps are cleared by a derivatives clearing organization
(as such term is defined in section la of the Commodity Exchange
Act (7 U.S.C. la)) or a clearing agency (as such term is defined
in section 3 of the Securities Exchange Act (15 U.S.C. 78c))
that is registered, or exempt from registration, as a
derivatives clearing organization under the Commodity Exchange
Act or as a clearing agency under the Securities Exchange Act,
respectively.

(e) <>  Existing Swaps and Security-based
Swaps.--The prohibition in subsection (a) shall only apply to swaps or
security-based swaps entered into by an insured depository institution
after the end of the transition period described in subsection (f).

(f) Transition Period.--To the extent an insured depository
institution qualifies as a ``swaps entity'' and would be subject to the
Federal assistance prohibition in subsection (a), the appropriate
Federal banking agency, after consulting with and considering the views
of the Commodity Futures Trading Commission or the Securities Exchange
Commission, as appropriate, shall permit the insured depository
institution up to 24 months to divest the swaps entity or cease the
activities that require registration as a swaps entity. In establishing
the appropriate transition period to effect such divestiture or
cessation of activities, which may include making the swaps entity an
affiliate of the insured depository institution, the appropriate Federal
banking agency shall take into account and make written findings
regarding the potential impact of such divestiture or cessation of
activities on the insured depository institution's (1) mortgage lending,
(2) small business lending, (3) job creation, and (4) capital formation
versus the potential negative impact on insured depositors and the
Deposit Insurance Fund of the Federal Deposit Insurance Corporation. The
appropriate Federal banking agency may consider such other factors as
may be appropriate. The appropriate Federal banking agency may place
such conditions on the insured depository institution's divestiture or
ceasing of activities of the swaps entity as it deems necessary and
appropriate. The transition period under this subsection may be extended
by the appropriate Federal banking agency, after consultation with the
Commodity Futures Trading Commission and the Securities and Exchange
Commission, for a period of up to 1 additional year.
(g) Excluded Entities.--For purposes of this section, the term
``swaps entity'' shall not include any insured depository institution
under the Federal Deposit Insurance Act or a covered financial company
under title II which is in a conservatorship, receivership, or a bridge
bank operated by the Federal Deposit Insurance Corporation.
(h) Effective Date.--The prohibition in subsection (a) shall be
effective 2 years following the date on which this Act is effective.
(i) Liquidation Required.--
(1) In general.--

[[Page 1650]]

(A) FDIC insured institutions.--All swaps entities
that are FDIC insured institutions that are put into
receivership or declared insolvent as a result of swap
or security-based swap activity of the swaps entities
shall be subject to the termination or transfer of that
swap or security-based swap activity in accordance with
applicable law prescribing the treatment of those
contracts. No taxpayer funds shall be used to prevent
the receivership of any swap entity resulting from swap
or security-based swap activity of the swaps entity.
(B) Institutions that pose a systemic risk and are
subject to heightened prudential supervision as
regulated under section 113.--All swaps entities that
are institutions that pose a systemic risk and are
subject to heightened prudential supervision as
regulated under section 113, that are put into
receivership or declared insolvent as a result of swap
or security-based swap activity of the swaps entities
shall be subject to the termination or transfer of that
swap or security-based swap activity in accordance with
applicable law prescribing the treatment of those
contracts. No taxpayer funds shall be used to prevent
the receivership of any swap entity resulting from swap
or security-based swap activity of the swaps entity.
(C) Non-FDIC insured, non-systemically significant
institutions not subject to heightened prudential
supervision as regulated under section 113.--No taxpayer
resources shall be used for the orderly liquidation of
any swaps entities that are non-FDIC insured, non-
systemically significant institutions not subject to
heightened prudential supervision as regulated under
section 113.
(2) Recovery of funds.--All funds expended on the
termination or transfer of the swap or security-based swap
activity of the swaps entity shall be recovered in accordance
with applicable law from the disposition of assets of such swap
entity or through assessments, including on the financial sector
as provided under applicable law.
(3) No losses to taxpayers.--Taxpayers shall bear no losses
from the exercise of any authority under this title.

(j) Prohibition on Unregulated Combination of Swaps Entities and
Banking.--At no time following adoption of the rules in subsection (k)
may a bank or bank holding company be permitted to be or become a swap
entity unless it conducts its swap or security-based swap activity in
compliance with such minimum standards set by its prudential regulator
as are reasonably calculated to permit the swaps entity to conduct its
swap or security-based swap activities in a safe and sound manner and
mitigate systemic risk.
(k) Rules.--In prescribing rules, the prudential regulator for a
swaps entity shall consider the following factors:
(1) The expertise and managerial strength of the swaps
entity, including systems for effective oversight.
(2) The financial strength of the swaps entity.
(3) Systems for identifying, measuring and controlling risks
arising from the swaps entity's operations.
(4) Systems for identifying, measuring and controlling the
swaps entity's participation in existing markets.

[[Page 1651]]

(5) Systems for controlling the swaps entity's participation
or entry into in new markets and products.

(l) Authority of the Financial Stability Oversight Council.--The
Financial Stability Oversight Council may determine that, when other
provisions established by this Act are insufficient to effectively
mitigate systemic risk and protect taxpayers, that swaps entities may no
longer access Federal assistance with respect to any swap, security-
based swap, or other activity of the swaps entity. Any such
determination by the Financial Stability Oversight Council of a
prohibition of federal assistance shall be made on an institution-by-
institution basis, and shall require the vote of not fewer than two-
thirds of the members of the Financial Stability Oversight Council,
which must include the vote by the Chairman of the Council, the Chairman
of the Board of Governors of the Federal Reserve System, and the
Chairperson of the Federal Deposit Insurance Corporation. Notice and
hearing requirements for such determinations shall be consistent with
the standards provided in title I.
(m) Ban on Proprietary Trading in Derivatives.--An insured
depository institution shall comply with the prohibition on proprietary
trading in derivatives as required by section 619 of the Dodd-Frank Wall
Street Reform and Consumer Protection Act.
SEC. 717. NEW PRODUCT APPROVAL CFTC--SEC PROCESS.

(a) Amendments to the Commodity Exchange Act.--Section 2(a)(1)(C) of
the Commodity Exchange Act (7 U.S.C. 2(a)(1)(C)) is amended--
(1) in clause (i) by striking ``This'' and inserting ``(I)
Except as provided in subclause (II), this''; and
(2) by adding at the end of clause (i) the following:
``(II) This Act shall apply to and
the Commission shall have jurisdiction
with respect to accounts, agreements,
and transactions involving, and may
permit the listing for trading pursuant
to section 5c(c) of, a put, call, or
other option on 1 or more securities (as
defined in section 2(a)(1) of the
Securities Act of 1933 or section
3(a)(10) of the Securities Exchange Act
of 1934 on the date of enactment of the
Futures Trading Act of 1982), including
any group or index of such securities,
or any interest therein or based on the
value thereof, that is exempted by the
Securities and Exchange Commission
pursuant to section 36(a)(1) of the
Securities Exchange Act of 1934 with the
condition that the Commission exercise
concurrent jurisdiction over such put,
call, or other option; provided,
however, that nothing in this paragraph
shall be construed to affect the
jurisdiction and authority of the
Securities and Exchange Commission over
such put, call, or other option.''.

(b) Amendments to the Securities Exchange Act of 1934.--The
Securities Exchange Act of 1934 is amended by adding the following
section after section 3A (15 U.S.C. 78c-1):
``SEC. 3B. <>  SECURITIES-RELATED
DERIVATIVES.

``(a) Any agreement, contract, or transaction (or class thereof)
that is exempted by the Commodity Futures Trading Commission

[[Page 1652]]

pursuant to section 4(c)(1) of the Commodity Exchange Act (7 U.S.C.
6(c)(1)) with the condition that the Commission exercise concurrent
jurisdiction over such agreement, contract, or transaction (or class
thereof) shall be deemed a security for purposes of the securities laws.
``(b) With respect to any agreement, contract, or transaction (or
class thereof) that is exempted by the Commodity Futures Trading
Commission pursuant to section 4(c)(1) of the Commodity Exchange Act (7
U.S.C. 6(c)(1)) with the condition that the Commission exercise
concurrent jurisdiction over such agreement, contract, or transaction
(or class thereof), references in the securities laws to the `purchase'
or `sale' of a security shall be deemed to include the execution,
termination (prior to its scheduled maturity date), assignment,
exchange, or similar transfer or conveyance of, or extinguishing of
rights or obligations under such agreement, contract, or transaction, as
the context may require.''.
(c) Amendment to Securities Exchange Act of 1934.--Section 19(b) of
the Securities Exchange Act of 1934 (15 U.S.C. 78s(b)) is amended by
adding at the end the following:
``(10) Notwithstanding paragraph (2), the time period within
which the Commission is required by order to approve a proposed
rule change or institute proceedings to determine whether the
proposed rule change should be disapproved is stayed pending a
determination by the Commission upon the request of the
Commodity Futures Trading Commission or its Chairman that the
Commission issue a determination as to whether a product that is
the subject of such proposed rule change is a security pursuant
to section 718 of the Wall Street Transparency and
Accountability Act of 2010.''.

(d) Amendment to Commodity Exchange Act.--Section 5c(c)(1) of the
Commodity Exchange Act (7 U.S.C. 7a-2(c)(1)) is amended--
(1) by striking ``Subject to paragraph (2)'' and inserting
the following:
``(A) Election.--Subject to paragraph (2)''; and
(2) by adding at the end the following:
``(B) Certification.--The certification of a product
pursuant to this paragraph shall be stayed pending a
determination by the Commission upon the request of the
Securities and Exchange Commission or its Chairman that
the Commission issue a determination as to whether the
product that is the subject of such certification is a
contract of sale of a commodity for future delivery, an
option on such a contract, or an option on a commodity
pursuant to section 718 of the Wall Street Transparency
and Accountability Act of 2010.''.
SEC. 718. <>  DETERMINING STATUS OF NOVEL
DERIVATIVE PRODUCTS.

(a) Process for Determining the Status of a Novel Derivative
Product.--
(1) Notice.--
(A) In general.--Any person filing a proposal to
list or trade a novel derivative product that may have
elements of both securities and contracts of sale of a
commodity for future delivery (or options on such
contracts or options on commodities) may concurrently
provide notice and furnish a copy of such filing with
the Securities and Exchange

[[Page 1653]]

Commission and the Commodity Futures Trading Commission.
Any such notice shall state that notice has been made
with both Commissions.
(B) <>  Notification.--If no
concurrent notice is made pursuant to subparagraph (A),
within 5 business days after determining that a proposal
that seeks to list or trade a novel derivative product
may have elements of both securities and contracts of
sale of a commodity for future delivery (or options on
such contracts or options on commodities), the
Securities and Exchange Commission or the Commodity
Futures Trading Commission, as applicable, shall notify
the other Commission and provide a copy of such filing
to the other Commission.
(2) Request for determination.--
(A) <> In general.--No later than
21 days after receipt of a notice under paragraph (1),
or upon its own initiative if no such notice is
received, the Commodity Futures Trading Commission may
request that the Securities and Exchange Commission
issue a determination as to whether a product is a
security, as defined in section 3(a)(10) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(10)).
(B) <> Request.--No later than 21
days after receipt of a notice under paragraph (1), or
upon its own initiative if no such notice is received,
the Securities and Exchange Commission may request that
the Commodity Futures Trading Commission issue a
determination as to whether a product is a contract of
sale of a commodity for future delivery, an option on
such a contract, or an option on a commodity subject to
the Commodity Futures Trading Commission's exclusive
jurisdiction under section 2(a)(1)(A) of the Commodity
Exchange Act (7 U.S.C. 2(a)(1)(A)).
(C) Requirement relating to request.--A request
under subparagraph (A) or (B) shall be made by
submitting such request, in writing, to the Securities
and Exchange Commission or the Commodity Futures Trading
Commission, as applicable.
(D) Effect.--Nothing in this paragraph shall be
construed to prevent--
(i) the Commodity Futures Trading Commission
from requesting that the Securities and Exchange
Commission grant an exemption pursuant to section
36(a)(1) of the Securities Exchange Act of 1934
(15 U.S.C. 78mm(a)(1)) with respect to a product
that is the subject of a filing under paragraph
(1); or
(ii) the Securities and Exchange Commission
from requesting that the Commodity Futures Trading
Commission grant an exemption pursuant to section
4(c)(1) of the Commodity Exchange Act (7 U.S.C.
6(c)(1)) with respect to a product that is the
subject of a filing under paragraph (1),
Provided, however, that nothing in this subparagraph
shall be construed to require the Commodity Futures
Trading Commission or the Securities and Exchange
Commission to issue an exemption requested pursuant to
this subparagraph; provided further, That an order
granting or denying an exemption described in this
subparagraph and issued

[[Page 1654]]

under paragraph (3)(B) shall not be subject to judicial
review pursuant to subsection (b).
(E) Withdrawal of request.--A request under
subparagraph (A) or (B) may be withdrawn by the
Commission making the request at any time prior to a
determination being made pursuant to paragraph (3) for
any reason by providing written notice to the head of
the other Commission.
(3) <>  Determination.--Notwithstanding any
other provision of law, no later than 120 days after the date of
receipt of a request--
(A) under subparagraph (A) or (B) of paragraph (2),
unless such request has been withdrawn pursuant to
paragraph (2)(E), the Securities and Exchange Commission
or the Commodity Futures Trading Commission, as
applicable, shall, by order, issue the determination
requested in subparagraph (A) or (B) of paragraph (2),
as applicable, and the reasons therefor; or
(B) under paragraph (2)(D), unless such request has
been withdrawn, the Securities and Exchange Commission
or the Commodity Futures Trading Commission, as
applicable, shall grant an exemption or provide reasons
for not granting such exemption, provided that any
decision by the Securities and Exchange Commission not
to grant such exemption shall not be reviewable under
section 25 of the Securities Exchange Act of 1934 (15
U.S.C. 78y).

(b) Judicial Resolution.--
(1) In general.--The Commodity <>  Futures
Trading Commission or the Securities and Exchange Commission may
petition the United States Court of Appeals for the District of
Columbia Circuit for review of a final order of the other
Commission issued pursuant to subsection (a)(3)(A), with respect
to a novel derivative product that may have elements of both
securities and contracts of sale of a commodity for future
delivery (or options on such contracts or options on
commodities) that it believes affects its statutory jurisdiction
within 60 days after the date of entry of such order, a written
petition requesting a review of the order. Any such proceeding
shall be expedited by the Court of Appeals.
(2) Transmittal of petition and record.--A
copy <>  of a petition described in paragraph
(1) shall be transmitted not later than 1 business day after
filing by the complaining Commission to the responding
Commission. On receipt of the petition, the responding
Commission shall file with the court a copy of the order under
review and any documents referred to therein, and any other
materials prescribed by the court.
(3) Standard of review.--The court, in considering a
petition filed pursuant to paragraph (1), shall give no
deference to, or presumption in favor of, the views of either
Commission.
(4) Judicial stay.--The filing of a petition by the
complaining Commission pursuant to paragraph (1) shall operate
as a stay of the order, until the date on which the
determination of the court is final (including any appeal of the
determination).
SEC. 719. <>  STUDIES.

(a) Study on Effects of Position Limits on Trading on Exchanges in
the United States.--

[[Page 1655]]

(1) Study.--The Commodity Futures Trading Commission, in
consultation with each entity that is a designated contract
market under the Commodity Exchange Act, shall conduct a study
of the effects (if any) of the position limits imposed pursuant
to the other provisions of this title on excessive speculation
and on the movement of transactions from exchanges in the United
States to trading venues outside the United States.
(2) Report to the congress.--Within 12 months after the
imposition of position limits pursuant to the other provisions
of this title, the Commodity Futures Trading Commission, in
consultation with each entity that is a designated contract
market under the Commodity Exchange Act, shall submit to the
Congress a report on the matters described in paragraph (1).
(3) Required hearing.-- <> Within 30
legislative days after the submission to the Congress of the
report described in paragraph (2), the Committee on Agriculture
of the House of Representatives shall hold a hearing examining
the findings of the report.
(4) Biennial reporting.--In addition to the study required
in paragraph (1), the Chairman of the Commodity Futures Trading
Commission shall prepare and submit to the Congress biennial
reports on the growth or decline of the derivatives markets in
the United States and abroad, which shall include assessments of
the causes of any such growth or decline, the effectiveness of
regulatory regimes in managing systemic risk, a comparison of
the costs of compliance at the time of the report for market
participants subject to regulation by the United States with the
costs of compliance in December 2008 for the market
participants, and the quality of the available data. In
preparing the report, the Chairman shall solicit the views of,
consult with, and address the concerns raised by, market
participants, regulators, legislators, and other interested
parties.

(b) Study on Feasibility of Requiring Use of Standardized
Algorithmic Descriptions for Financial Derivatives.--
(1) In general.--The Securities and Exchange Commission and
the Commodity Futures Trading Commission shall conduct a joint
study of the feasibility of requiring the derivatives industry
to adopt standardized computer-readable algorithmic descriptions
which may be used to describe complex and standardized financial
derivatives.
(2) Goals.--The algorithmic descriptions defined in the
study shall be designed to facilitate computerized analysis of
individual derivative contracts and to calculate net exposures
to complex derivatives. The algorithmic descriptions shall be
optimized for simultaneous use by--
(A) commercial users and traders of derivatives;
(B) derivative clearing houses, exchanges and
electronic trading platforms;
(C) trade repositories and regulator investigations
of market activities; and
(D) systemic risk regulators.
The study will also examine the extent to which the algorithmic
description, together with standardized and extensible legal

[[Page 1656]]

definitions, may serve as the binding legal definition of
derivative contracts. The study will examine the logistics of
possible implementations of standardized algorithmic
descriptions for derivatives contracts. The study shall be
limited to electronic formats for exchange of derivative
contract descriptions and will not contemplate disclosure of
proprietary valuation models.
(3) International coordination.--In conducting the study,
the Securities and Exchange Commission and the Commodity Futures
Trading Commission shall coordinate the study with international
financial institutions and regulators as appropriate and
practical.
(4) Report.--Within 8 months after the date of the enactment
of this Act, the Securities and Exchange Commission and the
Commodity Futures Trading Commission shall jointly submit to the
Committees on Agriculture and on Financial Services of the House
of Representatives and the Committees on Agriculture, Nutrition,
and Forestry and on Banking, Housing, and Urban Affairs of the
Senate a written report which contains the results of the study
required by paragraphs (1) through (3).

(c) International Swap Regulation.--
(1) In general.-- <> The Commodity Futures
Trading Commission and the Securities and Exchange Commission
shall jointly conduct a study--
(A) relating to--
(i) swap regulation in the United States,
Asia, and Europe; and
(ii) clearing house and clearing agency
regulation in the United States, Asia, and Europe;
and
(B) that identifies areas of regulation that are
similar in the United States, Asia and Europe and other
areas of regulation that could be harmonized
(2) Report.--Not later than 18 months after the date of
enactment of this Act, the Commodity Futures Trading Commission
and the Securities and Exchange Commission shall submit to the
Committee on Agriculture, Nutrition, and Forestry and the
Committee on Banking, Housing, and Urban Affairs of the Senate
and the Committee on Agriculture and the Committee on Financial
Services of the House of Representatives a report that includes
a description of the results of the study under subsection (a),
including--
(A) identification of the major exchanges and their
regulator in each geographic area for the trading of
swaps and security-based swaps including a listing of
the major contracts and their trading volumes and
notional values as well as identification of the major
swap dealers participating in such markets;
(B) identification of the major clearing houses and
clearing agencies and their regulator in each geographic
area for the clearing of swaps and security-based swaps,
including a listing of the major contracts and the
clearing volumes and notional values as well as
identification of the major clearing members of such
clearing houses and clearing agencies in such markets;
(C) a description of the comparative methods of
clearing swaps in the United States, Asia, and Europe;
and

[[Page 1657]]

(D) a description of the various systems used for
establishing margin on individual swaps, security-based
swaps, and swap portfolios.

(d) Stable Value Contracts.--
(1) Determination.--
(A) Status.--Not later <>
than 15 months after the date of the enactment of this
Act, the Securities and Exchange Commission and the
Commodity Futures Trading Commission shall, jointly,
conduct a study to determine whether stable value
contracts fall within the definition of a swap. In
making the determination required under this
subparagraph, the Commissions jointly shall consult with
the Department of Labor, the Department of the Treasury,
and the State entities that regulate the issuers of
stable value contracts.
(B) Regulations.--If the Commissions determine that
stable value contracts fall within the definition of a
swap, the Commissions jointly shall determine if an
exemption for stable value contracts from the definition
of swap is appropriate and in the public interest. The
Commissions shall issue regulations implementing the
determinations required under this paragraph. Until the
effective date of such regulations, and notwithstanding
any other provision of this title, the requirements of
this title shall not apply to stable value contracts.
(C) Legal certainty.--Stable value contracts in
effect prior to the effective date of the regulations
described in subparagraph (B) shall not be considered
swaps.
(2) Definition.--For purposes of this subsection, the term
``stable value contract'' means any contract, agreement, or
transaction that provides a crediting interest rate and guaranty
or financial assurance of liquidity at contract or book value
prior to maturity offered by a bank, insurance company, or other
State or federally regulated financial institution for the
benefit of any individual or commingled fund available as an
investment in an employee benefit plan (as defined in section
3(3) of the Employee Retirement Income Security Act of 1974,
including plans described in section 3(32) of such Act) subject
to participant direction, an eligible deferred compensation plan
(as defined in section 457(b) of the Internal Revenue Code of
1986) that is maintained by an eligible employer described in
section 457(e)(1)(A) of such Code, an arrangement described in
section 403(b) of such Code, or a qualified tuition program (as
defined in section 529 of such Code).
SEC. 720. <>  MEMORANDUM.

(a)(1) <>  The Commodity Futures Trading Commission
and the Federal Energy Regulatory Commission shall, not later than 180
days after the date of the enactment of this Act, negotiate a memorandum
of understanding to establish procedures for--
(A) applying their respective authorities in a manner so as
to ensure effective and efficient regulation in the public
interest;
(B) resolving conflicts concerning overlapping jurisdiction
between the 2 agencies; and
(C) avoiding, to the extent possible, conflicting or
duplicative regulation.

[[Page 1658]]

(2) Such memorandum and any subsequent amendments to the memorandum
shall be promptly submitted to the appropriate committees of Congress.
(b) <> The Commodity Futures Trading Commission and
the Federal Energy Regulatory Commission shall, not later than 180 days
after the date of the enactment of this section, negotiate a memorandum
of understanding to share information that may be requested where either
Commission is conducting an investigation into potential manipulation,
fraud, or market power abuse in markets subject to such Commission's
regulation or oversight. Shared information shall remain subject to the
same restrictions on disclosure applicable to the Commission initially
holding the information.

PART II--REGULATION OF SWAP MARKETS

SEC. 721. DEFINITIONS.

(a) In General.--Section 1a of the Commodity Exchange Act (7 U.S.C.
1a) is amended--
(1) by redesignating paragraphs (2), (3) and (4), (5)
through (17), (18) through (23), (24) through (28), (29), (30),
(31) through (33), and (34) as paragraphs (6), (8) and (9), (11)
through (23), (26) through (31), (34) through (38), (40), (41),
(44) through (46), and (51), respectively;
(2) by inserting after paragraph (1) the following:
``(2) Appropriate federal banking agency.--The term
`appropriate Federal banking agency'--
``(A) has the meaning given the term in section 3 of
the Federal Deposit Insurance Act (12 U.S.C. 1813);
``(B) means the Board in the case of a noninsured
State bank; and
``(C) is the Farm Credit Administration for farm
credit system institutions.
``(3) Associated person of a security-based swap dealer or
major security-based swap participant.--The term `associated
person of a security-based swap dealer or major security-based
swap participant' has the meaning given the term in section 3(a)
of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).
``(4) Associated person of a swap dealer or major swap
participant.--
``(A) In general.--The term `associated person of a
swap dealer or major swap participant' means a person
who is associated with a swap dealer or major swap
participant as a partner, officer, employee, or agent
(or any person occupying a similar status or performing
similar functions), in any capacity that involves--
``(i) the solicitation or acceptance of swaps;
or
``(ii) the supervision of any person or
persons so engaged.
``(B) Exclusion.--Other than for purposes of section
4s(b)(6), the term `associated person of a swap dealer
or major swap participant' does not include any person
associated with a swap dealer or major swap participant
the functions of which are solely clerical or
ministerial.
``(5) Board.--The term `Board' means the Board of Governors
of the Federal Reserve System.'';

[[Page 1659]]

(3) by inserting after paragraph (6) (as redesignated by
paragraph (1)) the following:
``(7) Cleared swap.--The term `cleared swap' means any swap
that is, directly or indirectly, submitted to and cleared by a
derivatives clearing organization registered with the
Commission.'';
(4) in paragraph (9) (as redesignated by paragraph (1)), by
striking ``except onions'' and all that follows through the
period at the end and inserting the following: ``except onions
(as provided by the first section of Public Law 85-839 (7 U.S.C.
13-1)) and motion picture box office receipts (or any index,
measure, value, or data related to such receipts), and all
services, rights, and interests (except motion picture box
office receipts, or any index, measure, value or data related to
such receipts) in which contracts for future delivery are
presently or in the future dealt in.'';
(5) by inserting after paragraph (9) (as redesignated by
paragraph (1)) the following:
``(10) Commodity pool.--
``(A) In general.--The term `commodity pool' means
any investment trust, syndicate, or similar form of
enterprise operated for the purpose of trading in
commodity interests, including any--
``(i) commodity for future delivery, security
futures product, or swap;
``(ii) agreement, contract, or transaction
described in section 2(c)(2)(C)(i) or section
2(c)(2)(D)(i);
``(iii) commodity option authorized under
section 4c; or
``(iv) leverage transaction authorized under
section 19.
``(B) Further definition.--The Commission, by rule
or regulation, may include within, or exclude from, the
term `commodity pool' any investment trust, syndicate,
or similar form of enterprise if the Commission
determines that the rule or regulation will effectuate
the purposes of this Act.'';
(6) by striking paragraph (11) (as redesignated by paragraph
(1)) and inserting the following:
``(11) Commodity pool operator.--
``(A) In general.--The term `commodity pool
operator' means any person--
``(i) engaged in a business that is of the
nature of a commodity pool, investment trust,
syndicate, or similar form of enterprise, and who,
in connection therewith, solicits, accepts, or
receives from others, funds, securities, or
property, either directly or through capital
contributions, the sale of stock or other forms of
securities, or otherwise, for the purpose of
trading in commodity interests, including any--
``(I) commodity for future delivery,
security futures product, or swap;
``(II) agreement, contract, or
transaction described in section
2(c)(2)(C)(i) or section 2(c)(2)(D)(i);
``(III) commodity option authorized
under section 4c; or

[[Page 1660]]

``(IV) leverage transaction
authorized under section 19; or
``(ii) who is registered with the Commission
as a commodity pool operator.
``(B) Further definition.--The Commission, by rule
or regulation, may include within, or exclude from, the
term `commodity pool operator' any person engaged in a
business that is of the nature of a commodity pool,
investment trust, syndicate, or similar form of
enterprise if the Commission determines that the rule or
regulation will effectuate the purposes of this Act.'';
(7) in paragraph (12) (as redesignated by paragraph (1)), in
subparagraph (A)--
(A) in clause (i)--
(i) in subclause (I), by striking ``made or to
be made on or subject to the rules of a contract
market or derivatives transaction execution
facility'' and inserting ``, security futures
product, or swap'';
(ii) by redesignating subclauses (II) and
(III) as subclauses (III) and (IV);
(iii) by inserting after subclause (I) the
following:
``(II) any agreement, contract, or
transaction described in section
2(c)(2)(C)(i) or section
2(c)(2)(D)(i)''; and
(iv) in subclause (IV) (as so redesignated),
by striking ``or'';
(B) in clause (ii), by striking the period at the
end and inserting a semicolon; and
(C) by adding at the end the following:
``(iii) is registered with the Commission as a
commodity trading advisor; or
``(iv) the Commission, by rule or regulation,
may include if the Commission determines that the
rule or regulation will effectuate the purposes of
this Act.'';
(8) in paragraph (17) (as redesignated by paragraph (1)), in
subparagraph (A), in the matter preceding clause (i), by
striking ``paragraph (12)(A)'' and inserting ``paragraph
(18)(A)'';
(9) in paragraph (18) (as redesignated by paragraph (1))--
(A) in subparagraph (A)--
(i) in the matter following clause
(vii)(III)--
(I) by striking ``section 1a
(11)(A)'' and inserting ``paragraph
(17)(A)''; and
(II) by striking ``$25,000,000'' and
inserting ``$50,000,000''; and
(ii) in clause (xi), in the matter preceding
subclause (I), by striking ``total assets in an
amount'' and inserting ``amounts invested on a
discretionary basis, the aggregate of which is'';
(10) by striking paragraph (22) (as redesignated by
paragraph (1)) and inserting the following:
``(22) Floor broker.--
``(A) In general.--The term `floor broker' means any
person--
``(i) who, in or surrounding any pit, ring,
post, or other place provided by a contract market
for the meeting of persons similarly engaged,
shall purchase or sell for any other person--

[[Page 1661]]

``(I) any commodity for future
delivery, security futures product, or
swap; or
``(II) any commodity option
authorized under section 4c; or
``(ii) who is registered with the Commission
as a floor broker.
``(B) Further definition.--The Commission, by rule
or regulation, may include within, or exclude from, the
term `floor broker' any person in or surrounding any
pit, ring, post, or other place provided by a contract
market for the meeting of persons similarly engaged who
trades for any other person if the Commission determines
that the rule or regulation will effectuate the purposes
of this Act.'';
(11) by striking paragraph (23) (as redesignated by
paragraph (1)) and inserting the following:
``(23) Floor trader.--
``(A) In general.--The term `floor trader' means any
person--
``(i) who, in or surrounding any pit, ring,
post, or other place provided by a contract market
for the meeting of persons similarly engaged,
purchases, or sells solely for such person's own
account--
``(I) any commodity for future
delivery, security futures product, or
swap; or
``(II) any commodity option
authorized under section 4c; or
``(ii) who is registered with the Commission
as a floor trader.
``(B) Further definition.--The Commission, by rule
or regulation, may include within, or exclude from, the
term `floor trader' any person in or surrounding any
pit, ring, post, or other place provided by a contract
market for the meeting of persons similarly engaged who
trades solely for such person's own account if the
Commission determines that the rule or regulation will
effectuate the purposes of this Act.'';
(12) by inserting after paragraph (23) (as redesignated by
paragraph (1)) the following:
``(24) Foreign exchange forward.--The term `foreign exchange
forward' means a transaction that solely involves the exchange
of 2 different currencies on a specific future date at a fixed
rate agreed upon on the inception of the contract covering the
exchange.
``(25) Foreign exchange swap.--The term `foreign exchange
swap' means a transaction that solely involves--
``(A) an exchange of 2 different currencies on a
specific date at a fixed rate that is agreed upon on the
inception of the contract covering the exchange; and
``(B) a reverse exchange of the 2 currencies
described in subparagraph (A) at a later date and at a
fixed rate that is agreed upon on the inception of the
contract covering the exchange.'';
(13) by striking paragraph (28) (as redesignated by
paragraph (1)) and inserting the following:
``(28) Futures commission merchant.--

[[Page 1662]]

``(A) In general.--The term `futures commission
merchant' means an individual, association, partnership,
corporation, or trust--
``(i) that--
``(I) is--
``(aa) engaged in soliciting
or in accepting orders for--
``(AA) the purchase or
sale of a commodity for
future delivery;
``(BB) a security
futures product;
``(CC) a swap;
``(DD) any agreement,
contract, or transaction
described in section
2(c)(2)(C)(i) or section
2(c)(2)(D)(i);
``(EE) any commodity
option authorized under
section 4c; or
``(FF) any leverage
transaction authorized under
section 19; or
``(bb) acting as a
counterparty in any agreement,
contract, or transaction
described in section
2(c)(2)(C)(i) or section
2(c)(2)(D)(i); and
``(II) in or in connection with the
activities described in items (aa) or
(bb) of subclause (I), accepts any
money, securities, or property (or
extends credit in lieu thereof) to
margin, guarantee, or secure any trades
or contracts that result or may result
therefrom; or
``(ii) that is registered with the Commission
as a futures commission merchant.
``(B) Further definition.--The Commission, by rule
or regulation, may include within, or exclude from, the
term `futures commission merchant' any person who
engages in soliciting or accepting orders for, or acting
as a counterparty in, any agreement, contract, or
transaction subject to this Act, and who accepts any
money, securities, or property (or extends credit in
lieu thereof) to margin, guarantee, or secure any trades
or contracts that result or may result therefrom, if the
Commission determines that the rule or regulation will
effectuate the purposes of this Act.'';
(14) in paragraph (30) (as redesignated by paragraph (1)),
in subparagraph (B), by striking ``state'' and inserting
``State'';
(15) by striking paragraph (31) (as redesignated by
paragraph (1)) and inserting the following:
``(31) Introducing broker.--
``(A) In general.--The term `introducing broker'
means any person (except an individual who elects to be
and is registered as an associated person of a futures
commission merchant)--
``(i) who--
``(I) is engaged in soliciting or in
accepting orders for--
``(aa) the purchase or sale
of any commodity for future
delivery, security futures
product, or swap;

[[Page 1663]]

``(bb) any agreement,
contract, or transaction
described in section
2(c)(2)(C)(i) or section
2(c)(2)(D)(i);
``(cc) any commodity option
authorized under section 4c; or
``(dd) any leverage
transaction authorized under
section 19; and
``(II) does not accept any money,
securities, or property (or extend
credit in lieu thereof) to margin,
guarantee, or secure any trades or
contracts that result or may result
therefrom; or
``(ii) who is registered with the Commission
as an introducing broker.
``(B) Further definition.--The Commission, by rule
or regulation, may include within, or exclude from, the
term `introducing broker' any person who engages in
soliciting or accepting orders for any agreement,
contract, or transaction subject to this Act, and who
does not accept any money, securities, or property (or
extend credit in lieu thereof) to margin, guarantee, or
secure any trades or contracts that result or may result
therefrom, if the Commission determines that the rule or
regulation will effectuate the purposes of this Act.'';
(16) by inserting after paragraph (31) (as redesignated by
paragraph (1)) the following:
``(32) Major security-based swap participant.--The term
`major security-based swap participant' has the meaning given
the term in section 3(a) of the Securities Exchange Act of 1934
(15 U.S.C. 78c(a)).
``(33) Major swap participant.--
``(A) In general.--The term `major swap participant'
means any person who is not a swap dealer, and--
``(i) maintains a substantial position in
swaps for any of the major swap categories as
determined by the Commission, excluding--
``(I) positions held for hedging or
mitigating commercial risk; and
``(II) 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;
``(ii) whose outstanding swaps create
substantial counterparty exposure that could have
serious adverse effects on the financial stability
of the United States banking system or financial
markets; or
``(iii)(I) is a financial entity that is
highly leveraged relative to the amount of capital
it holds and that is not subject to capital
requirements established by an appropriate Federal
banking agency; and
``(II) maintains a substantial position in
outstanding swaps in any major swap category as
determined by the Commission.
``(B) <>  Definition of
substantial position.--For purposes of subparagraph (A),
the Commission shall define

[[Page 1664]]

by rule or regulation the term `substantial position' at
the threshold that 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. In setting the definition under this
subparagraph, the Commission shall consider the person's
relative position in uncleared as opposed to cleared
swaps and may take into consideration the value and
quality of collateral held against counterparty
exposures.
``(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) Exclusions.--The definition under this
paragraph shall not include an entity whose primary
business is providing financing, and uses derivatives
for the purpose of hedging underlying commercial risks
related to interest rate and foreign currency exposures,
90 percent or more of which arise from financing that
facilitates the purchase or lease of products, 90
percent or more of which are manufactured by the parent
company or another subsidiary of the parent company.'';
(17) by inserting after paragraph (38) (as redesignated by
paragraph (1)) the following:
``(39) Prudential regulator.--The term `prudential
regulator' means--
``(A) the Board in the case of a swap dealer, major
swap participant, security-based swap dealer, or major
security-based swap participant that is--
``(i) a State-chartered bank that is a member
of the Federal Reserve System;
``(ii) a State-chartered branch or agency of a
foreign bank;
``(iii) any foreign bank which does not
operate an insured branch;
``(iv) any organization operating under
section 25A of the Federal Reserve Act or having
an agreement with the Board under section 225 of
the Federal Reserve Act;
``(v) any bank holding company (as defined in
section 2 of the Bank Holding Company Act of 1965
(12 U.S.C. 1841)), any foreign bank (as defined in
section 1(b)(7) of the International Banking Act
of 1978 (12 U.S.C. 3101(b)(7)) that is treated as
a bank holding company under section 8(a) of the
International Banking Act of 1978 (12 U.S.C.
3106(a)), and any subsidiary of such a company or
foreign bank (other than a subsidiary that is
described in subparagraph (A) or (B) or that is
required to be registered with the Commission as a
swap dealer or major swap participant under this
Act or with the Securities and Exchange Commission
as a security-based swap dealer or major security-
based swap participant);

[[Page 1665]]

``(vi) after the transfer date (as defined in
section 311 of the Dodd-Frank Wall Street Reform
and Consumer Protection Act), any savings and loan
holding company (as defined in section 10 of the
Home Owners' Loan Act (12 U.S.C. 1467a)) and any
subsidiary of such company (other than a
subsidiary that is described in subparagraph (A)
or (B) or that is required to be registered as a
swap dealer or major swap participant with the
Commission under this Act or with the Securities
and Exchange Commission as a security-based swap
dealer or major security-based swap participant);
or
``(vii) any organization operating under
section 25A of the Federal Reserve Act (12U.S.C.
611 et seq.) or having an agreement with the Board
under section 25 of the Federal Reserve Act (12
U.S.C. 601 et seq.);
``(B) the Office of the Comptroller of the Currency
in the case of a swap dealer, major swap participant,
security-based swap dealer, or major security-based swap
participant that is--
``(i) a national bank;
``(ii) a federally chartered branch or agency
of a foreign bank; or
``(iii) any Federal savings association;
``(C) the Federal Deposit Insurance Corporation in
the case of a swap dealer, major swap participant,
security-based swap dealer, or major security-based swap
participant that is--
``(i) a State-chartered bank that is not a
member of the Federal Reserve System; or
``(ii) any State savings association;
``(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.); and
``(E) the Federal Housing Finance Agency in the case
of a swap dealer, major swap participant, security-based
swap dealer, or major security-based swap participant
that is a regulated entity (as such term is defined in
section 1303 of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992).'';
(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''; 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 registered under
section 21; and'';
(19) by inserting after paragraph (41) (as redesignated by
paragraph (1)) the following:

[[Page 1666]]

``(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)).'';
(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;

[[Page 1667]]

``(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

[[Page 1668]]

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)(1) of the Securities Act of 1933 (15
U.S.C. 77b(a)(1));
``(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)(11) of the Securities Act
of 1933 (15 U.S.C. 77b(a)(11)) 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

[[Page 1669]]

written determination under section 1b 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 Dodd-Frank Wall Street Reform and
Consumer Protection Act in violation of
any rule promulgated by the Commission
pursuant to section 721(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 a
written determination by the Secretary pursuant to
clause (i), 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, 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 and maintains
information or records with respect to transactions or positions
in, or the terms and conditions of, swaps entered into by third
parties

[[Page 1670]]

for the purpose of providing a centralized recordkeeping
facility for swaps.
``(49) Swap dealer.--
``(A) In general.--The term `swap dealer' means any
person who--
``(i) holds itself out as a dealer in swaps;
``(ii) makes a market in swaps;
``(iii) regularly enters into swaps with
counterparties as an ordinary course of business
for its own account; or
``(iv) engages in any activity causing the
person to be commonly known in the trade as a
dealer or market maker in swaps,
provided however, in no event shall an insured
depository institution be considered to be a swap dealer
to the extent it offers to enter into a swap with a
customer in connection with originating a loan with that
customer.
``(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) Exception.--The term `swap dealer' does not
include a person that enters into swaps for such
person's own account, either individually or in a
fiduciary capacity, but not as a part of a regular
business.
``(D) De minimis exception.--The Commission shall
exempt from designation as a swap dealer an entity that
engages in a de minimis quantity of swap dealing in
connection with transactions with or on behalf of its
customers. The Commission shall promulgate regulations
to establish factors with respect to the making of this
determination to exempt.
``(50) Swap execution facility.--The term `swap execution
facility' means a trading system or platform in which multiple
participants have the ability to execute or trade swaps by
accepting bids and offers made by 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.''.
(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''.

[[Page 1671]]

(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),
paragraph (18)(A)(vii)(III), paragraphs (23),
(24), (31), (32), (38), (39), (41), (42), (46),
(47), (48), and (49) of section 1a, and sections
2(a)(13), 2(c)(1)(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 sections 721(c) and 742 of the Dodd-Frank
Wall Street Reform and Consumer Protection Act; 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 Commissions determine 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

[[Page 1672]]

(B) in subclause (II), by striking ``section
1a(12)'' and inserting ``section 1a(18)''.
(9) Section 402 of the Legal Certainty for Bank Products Act
of 2000 <>  (7 U.S.C. 27 et seq.) is amended--
(A) in subsection (a)(7), by striking ``section
1a(20)'' and inserting ``section 1a'';
(B) in subsection (b)(2), by striking ``section
1a(12)'' and inserting ``section 1a''; and
(C) in subsection (c), by striking ``section 1a(4)''
and inserting ``section 1a''.
(10) The first section of Public Law 85-839 (7 U.S.C. 13-1)
is amended in subsection (a), in the first sentence, by
inserting ``motion picture box office receipts (or any index,
measure, value, or data related to such receipts) or'' after
``sale of''.

(f) <>  Effective Date.--Notwithstanding any
other provision of this Act, the amendments made by subsection (a)(4)
shall take effect on June 1, 2010.
SEC. 722. JURISDICTION.

(a) Exclusive Jurisdiction.--Section 2(a)(1) of the Commodity
Exchange Act (7 U.S.C. 2(a)(1)) is amended--
(1) in subparagraph (A), in the first sentence--
(A) by inserting ``the Wall Street Transparency and
Accountability Act of 2010 (including an amendment made
by that Act) and'' after ``otherwise provided in'';
(B) by striking ``(C) and (D)'' and inserting ``(C),
(D), and (I)'';
(C) by striking ``(c) through (i) of this section''
and inserting ``(c) and (f)'';
(D) by striking ``contracts of sale'' and inserting
``swaps or contracts of sale''; and
(E) by striking ``or derivatives transaction
execution facility registered pursuant to section 5 or
5a'' and inserting ``pursuant to section 5 or a swap
execution facility pursuant to section 5h''; and
(2) by adding at the end the following:
``(G)(i) Nothing in this paragraph shall limit the
jurisdiction conferred on the Securities and Exchange
Commission by the Wall Street Transparency and
Accountability Act of 2010 with regard to security-based
swap agreements as defined pursuant to section 3(a)(78)
of the Securities Exchange Act of 1934, and security-
based swaps.
``(ii) In addition to the authority of the
Securities and Exchange Commission described in clause
(i), nothing in this subparagraph shall limit or affect
any statutory authority of the Commission with respect
to an agreement, contract, or transaction described in
clause (i).
``(H) Notwithstanding any other provision of law,
the Wall Street Transparency and Accountability Act of
2010 shall not apply to, and the Commodity Futures
Trading Commission shall have no jurisdiction under such
Act (or any amendments to the Commodity Exchange Act
made by such Act) with respect to, any security other
than a security-based swap.''.

[[Page 1673]]

(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.''.

(e) Federal Energy Regulatory 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:
``(I)(i) Nothing in this Act shall limit or affect
any statutory authority of the Federal Energy Regulatory
Commission or a State regulatory authority (as defined
in section 3(21) of the Federal Power Act (16 U.S.C.
796(21)) with respect to an agreement, contract, or
transaction that is entered into pursuant to a tariff or
rate schedule approved by the Federal Energy Regulatory
Commission or a State regulatory authority and is--
``(I) not executed, traded, or cleared on a
registered entity or trading facility; or
``(II) executed, traded, or cleared on a
registered entity or trading facility owned or
operated by a regional transmission organization
or independent system operator.
``(ii) In addition to the authority of the Federal
Energy Regulatory Commission or a State regulatory
authority described in clause (i), nothing in this
subparagraph shall limit or affect--
``(I) any statutory authority of the
Commission with respect to an agreement, contract,
or transaction described in clause (i); or
``(II) the jurisdiction of the Commission
under subparagraph (A) with respect to an
agreement, contract, or transaction that is
executed, traded, or cleared

[[Page 1674]]

on a registered entity or trading facility that is
not owned or operated by a regional transmission
organization or independent system operator (as
defined by sections 3(27) and (28) of the Federal
Power Act (16 U.S.C. 796(27), 796(28)).''.

(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 authority 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)).''.

(g) <> Authority of FERC.--Nothing in the Wall
Street Transparency and Accountability Act of 2010 or the amendments to
the Commodity Exchange Act made by such Act shall limit or affect any
statutory enforcement authority of the Federal Energy Regulatory
Commission pursuant to section 222 of the Federal Power Act and section
4A of the Natural Gas Act that existed prior to the date of enactment of
the Wall Street Transparency and Accountability Act of 2010.

(h) Determination.--The Commodity Exchange Act is amended by
inserting after section 1a (7 U.S.C. 1a) the following:
``SEC. 1b. <>  REQUIREMENTS OF SECRETARY OF THE
TREASURY REGARDING EXEMPTION OF FOREIGN
EXCHANGE SWAPS AND FOREIGN EXCHANGE FORWARDS
FROM DEFINITION OF THE TERM `SWAP'.

``(a) Required Considerations.--In determining whether to exempt
foreign exchange swaps and foreign exchange forwards from the definition
of the term `swap', the Secretary of the Treasury (referred to in this
section as the `Secretary') shall consider--
``(1) whether the required trading and clearing of foreign
exchange swaps and foreign exchange forwards would create
systemic risk, lower transparency, or threaten the financial
stability of the United States;
``(2) whether foreign exchange swaps and foreign exchange
forwards are already subject to a regulatory scheme that is
materially comparable to that established by this Act for other
classes of swaps;
``(3) the extent to which bank regulators of participants in
the foreign exchange market provide adequate supervision,
including capital and margin requirements;
``(4) the extent of adequate payment and settlement systems;
and

[[Page 1675]]

``(5) the use of a potential exemption of foreign exchange
swaps and foreign exchange forwards to evade otherwise
applicable regulatory requirements.

``(b) Determination.--If the Secretary makes a determination to
exempt foreign exchange swaps and foreign exchange forwards from the
definition of the term `swap', the Secretary shall submit to the
appropriate committees of Congress a determination that contains--
``(1) an explanation regarding why foreign exchange swaps
and foreign exchange forwards are qualitatively different from
other classes of swaps in a way that would make the foreign
exchange swaps and foreign exchange forwards ill-suited for
regulation as swaps; and
``(2) an identification of the objective differences of
foreign exchange swaps and foreign exchange forwards with
respect to standard swaps that warrant an exempted status.

``(c) Effect of Determination.--A determination by the Secretary
under subsection (b) shall not exempt any foreign exchange swaps and
foreign exchange forwards traded on a designated contract market or swap
execution facility from any applicable antifraud and antimanipulation
provision under this title.''.
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), (D), (G), and (H) of subsection (a)(1), subsections (f) and
(g), sections 1a, 2(a)(13), 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), (f), and (h) 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 or
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.''.
(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) In general.--
``(A) Standard for clearing.--It shall be unlawful
for any person to engage in a swap unless that person
submits such swap for clearing to a derivatives clearing

[[Page 1676]]

organization that is registered under this Act or a
derivatives clearing organization that is exempt from
registration under this Act if the swap is required to
be cleared.
``(B) Open access.--The rules of a derivatives
clearing organization described in subparagraph (A)
shall--
``(i) prescribe that all swaps (but not
contracts of sale of a commodity for future
delivery or options on such contracts) submitted
to the derivatives clearing organization with the
same terms and conditions are economically
equivalent within the derivatives clearing
organization and may be offset with each other
within the derivatives clearing organization; and
``(ii) provide for non-discriminatory clearing
of a swap (but not a contract of sale of a
commodity for future delivery or option on such
contract) executed bilaterally or on or through
the rules of an unaffiliated designated contract
market or swap execution facility.
``(2) Commission review.--
``(A) Commission-initiated review.--
``(i) The Commission on an ongoing basis shall
review each swap, or any group, category, type, or
class of swaps to make a determination as to
whether the swap or group, category, type, or
class of swaps should be required to be cleared.
``(ii) <>
The Commission shall provide at least a 30-day
public comment period regarding any determination
made under clause (i).
``(B) Swap submissions.--
``(i) <>  A derivatives
clearing organization shall submit to the
Commission each swap, or any group, category,
type, or class of swaps that it plans to accept
for clearing, and provide notice to its members
(in a manner to be determined by the Commission)
of the submission.
``(ii) Any swap or group, category, type, or
class of swaps listed for clearing by a derivative
clearing organization as of the date of enactment
of this subsection shall be considered submitted
to the Commission.
``(iii) <>  The
Commission shall--
``(I) make available to the public
submissions received under clauses (i)
and (ii);
``(II) review each submission made
under clauses (i) and (ii), and
determine whether the swap, or group,
category, type, or class of swaps
described in the submission is required
to be cleared; and
``(III) <>  provide at least a 30-day
public comment period regarding its
determination as to whether the clearing
requirement under paragraph (1)(A) shall
apply to the submission.
``(C) Deadline.--The Commission shall make its
determination under subparagraph (B)(iii) not later than
90 days after receiving a submission made under
subparagraphs (B)(i) and (B)(ii), unless the submitting
derivatives clearing organization agrees to an extension
for the time limitation established under this
subparagraph.

[[Page 1677]]

``(D) Determination.--
``(i) In reviewing a submission made under
subparagraph (B), the Commission shall review
whether the submission is consistent with section
5b(c)(2).
``(ii) In reviewing a swap, group of swaps, or
class of swaps pursuant to subparagraph (A) or a
submission made under subparagraph (B), the
Commission shall take into account the following
factors:
``(I) The existence of significant
outstanding notional exposures, trading
liquidity, and adequate pricing data.
``(II) The availability of rule
framework, capacity, operational
expertise and resources, and credit
support infrastructure to clear the
contract on terms that are consistent
with the material terms and trading
conventions on which the contract is
then traded.
``(III) The effect on the mitigation
of systemic risk, taking into account
the size of the market for such contract
and the resources of the derivatives
clearing organization available to clear
the contract.
``(IV) The effect on competition,
including appropriate fees and charges
applied to clearing.
``(V) The existence of reasonable
legal certainty in the event of the
insolvency of the relevant derivatives
clearing organization or 1 or more of
its clearing members with regard to the
treatment of customer and swap
counterparty positions, funds, and
property.
``(iii) In making a determination under
subparagraph (A) or (B)(iii) that the clearing
requirement shall apply, the Commission may
require such terms and conditions to the
requirement as the Commission determines to be
appropriate.
``(E) <>  Rules.--Not later than 1
year after the date of the enactment of this subsection,
the Commission shall adopt rules for a derivatives
clearing organization's submission for review, pursuant
to this paragraph, of a swap, or a group, category,
type, or class of swaps, that it seeks to accept for
clearing. Nothing in this subparagraph limits the
Commission from making a determination under
subparagraph (B)(iii) for swaps described in
subparagraph (B)(ii).
``(3) Stay of clearing requirement.--
``(A) In general.--After making a determination
pursuant to paragraph (2)(B), the Commission, on
application of a counterparty to a swap or on its own
initiative, may stay the clearing requirement of
paragraph (1) until the Commission completes a review of
the terms of the swap (or the group, category, type, or
class of swaps) and the clearing arrangement.
``(B) Deadline.--The Commission shall complete a
review undertaken pursuant to subparagraph (A) not later
than 90 days after issuance of the stay, unless the
derivatives clearing organization that clears the swap,
or group,

[[Page 1678]]

category, type, or class of swaps agrees to an extension
of the time limitation established under this
subparagraph.
``(C) Determination.--Upon completion of the review
undertaken pursuant to subparagraph (A), the Commission
may--
``(i) determine, unconditionally or subject to
such terms and conditions as the Commission
determines to be appropriate, that the swap, or
group, category, type, or class of swaps must be
cleared pursuant to this subsection if it finds
that such clearing is consistent with paragraph
(2)(D); or
``(ii) determine that the clearing requirement
of paragraph (1) shall not apply to the swap, or
group, category, type, or class of swaps.
``(D) <>  Rules.--Not later than 1
year after the date of the enactment of the Wall Street
Transparency and Accountability Act of 2010, the
Commission shall adopt rules for reviewing, pursuant to
this paragraph, a derivatives clearing organization's
clearing of a swap, or a group, category, type, or class
of swaps, that it has accepted for clearing.
``(4) Prevention of evasion.--
``(A) <>  In general.--The
Commission shall prescribe rules under this subsection
(and issue interpretations of rules prescribed under
this subsection) as determined by the Commission to be
necessary to prevent evasions of the mandatory clearing
requirements under this Act.
``(B) Duty of commission to investigate and take
certain actions.--To the extent the Commission finds
that a particular swap, group, category, type, or class
of swaps would otherwise be subject to mandatory
clearing but no derivatives clearing organization has
listed the swap, group, category, type, or class of
swaps for clearing, the Commission shall--
``(i) investigate the relevant facts and
circumstances;
``(ii) <>  within 30 days issue a
public report containing the results of the
investigation; and
``(iii) take such actions as the Commission
determines to be necessary and in the public
interest, which may include requiring the
retaining of adequate margin or capital by parties
to the swap, group, category, type, or class of
swaps.
``(C) Effect on authority.--Nothing in this
paragraph--
``(i) authorizes the Commission to adopt rules
requiring a derivatives clearing organization to
list for clearing a swap, group, category, type,
or class of swaps if the clearing of the swap,
group, category, type, or class of swaps would
threaten the financial integrity of the
derivatives clearing organization; and
``(ii) affects the authority of the Commission
to enforce the open access provisions of paragraph
(1)(B) with respect to a swap, group, category,
type, or class of swaps that is listed for
clearing by a derivatives clearing organization.

[[Page 1679]]

``(5) Reporting transition rules.--Rules adopted by the
Commission under this section shall provide for the reporting of
data, as follows:
``(A) Swaps entered into before the date of the
enactment of this subsection shall be reported to a
registered swap data repository or the Commission no
later than 180 days after the effective date of this
subsection.
``(B) Swaps entered into on or after such date of
enactment shall be reported to a registered swap data
repository or the Commission no later than the later
of--
``(i) 90 days after such effective date; or
``(ii) such other time after entering into the
swap as the Commission may prescribe by rule or
regulation.
``(6) Clearing transition rules.--
``(A) Swaps entered into before the date of the
enactment of this subsection are exempt from the
clearing requirements of this subsection if reported
pursuant to paragraph (5)(A).
``(B) Swaps entered into before application of the
clearing requirement pursuant to this subsection are
exempt from the clearing requirements of this subsection
if reported pursuant to paragraph (5)(B).
``(7) Exceptions.--
``(A) In general.--The requirements of paragraph
(1)(A) shall not apply to a swap if 1 of the
counterparties to the swap--
``(i) is not a financial entity;
``(ii) is using swaps to hedge or mitigate
commercial risk; and
``(iii) <>  notifies the
Commission, in a manner set forth by the
Commission, how it generally meets its financial
obligations associated with entering into non-
cleared swaps.
``(B) Option to clear.--The application of the
clearing exception in subparagraph (A) is solely at the
discretion of the counterparty to the swap that meets
the conditions of clauses (i) through (iii) of
subparagraph (A).
``(C) Financial entity definition.--
``(i) In general.--For the purposes of this
paragraph, the term `financial entity' means--
``(I) a swap dealer;
``(II) a security-based swap dealer;
``(III) a major swap participant;
``(IV) a major security-based swap
participant;
``(V) a commodity pool;
``(VI) a private fund as defined in
section 202(a) of the Investment
Advisers Act of 1940 (15 U.S.C. 80-b-
2(a));
``(VII) an employee benefit 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);
``(VIII) a person predominantly
engaged in activities that are in the
business of banking, or in activities
that are financial in nature, as defined
in section 4(k) of the Bank Holding
Company Act of 1956.

[[Page 1680]]

``(ii) Exclusion.--The Commission shall
consider whether to exempt small banks, savings
associations, farm credit system institutions, and
credit unions, including--
``(I) depository institutions with
total assets of $10,000,000,000 or less;
``(II) farm credit system
institutions with total assets of
$10,000,000,000 or less; or
``(III) credit unions with total
assets of $10,000,000,000 or less.
``(iii) Limitation.--Such definition shall not
include an entity whose primary business is
providing financing, and uses derivatives for the
purpose of hedging underlying commercial risks
related to interest rate and foreign currency
exposures, 90 percent or more of which arise from
financing that facilitates the purchase or lease
of products, 90 percent or more of which are
manufactured by the parent company or another
subsidiary of the parent company.
``(D) Treatment of affiliates.--
``(i) In general.--An affiliate of a person
that qualifies for an exception under subparagraph
(A) (including affiliate entities predominantly
engaged in providing financing for the purchase of
the merchandise or manufactured goods of the
person) may qualify for the exception only if the
affiliate, acting on behalf of the person and as
an agent, uses the swap to hedge or mitigate the
commercial risk of the person or other affiliate
of the person that is not a financial entity.
``(ii) Prohibition relating to certain
affiliates.--The exception in clause (i) shall not
apply 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 issuer 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 subsection (c)
of that Act (15 U.S.C. 80a-3(c));
``(VI) a commodity pool; or
``(VII) a bank holding company with
over $50,000,000,000 in consolidated
assets.
``(iii) Transition rule for affiliates.--
An <>  affiliate,
subsidiary, or a wholly owned entity of a person
that qualifies for an exception under subparagraph
(A) and is predominantly engaged in providing
financing for the purchase or lease of merchandise
or manufactured goods of the person 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 2-year period
beginning on the date of enactment of this clause.
``(E) Election of counterparty.--

[[Page 1681]]

``(i) Swaps required to be cleared.--With
respect to any swap that is subject to the
mandatory clearing requirement under this
subsection and entered into by a swap dealer or a
major swap participant with a counterparty that is
not a swap dealer, major swap participant,
security-based swap dealer, or major security-
based swap participant, the counterparty shall
have the sole right to select the derivatives
clearing organization at which the swap will be
cleared.
``(ii) Swaps not required to be cleared.--With
respect to any swap that is not subject to the
mandatory clearing requirement under this
subsection and entered into by a swap dealer or a
major swap participant with a counterparty that is
not a swap dealer, major swap participant,
security-based swap dealer, or major security-
based swap participant, the counterparty--
``(I) may elect to require clearing
of the swap; and
``(II) shall have the sole right to
select the derivatives clearing
organization at which the swap will be
cleared.
``(F) Abuse of exception.--The Commission may
prescribe such rules or issue interpretations of the
rules as the Commission determines to be necessary to
prevent abuse of the exceptions described in this
paragraph. The Commission may also request information
from those persons claiming the clearing exception as
necessary to prevent abuse of the exceptions described
in this paragraph.
``(8) Trade execution.--
``(A) In general.--With respect to transactions
involving swaps subject to the clearing requirement of
paragraph (1), 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 5h or a swap
execution facility that is exempt from
registration under section 5h(f) of this Act.
``(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 for swap transactions subject to
the clearing exception under paragraph (7).''.

(b) Commodity Exchange Act.--Section 2 of the Commodity Exchange Act
(7 U.S.C. 2) is amended by adding at the end the following:
``(j)  Committee Approval by Board.--Exemptions from the
requirements of subsection (h)(1) to clear a swap and subsection (h)(8)
to execute a swap through a board of trade or swap execution facility
shall be available to a counterparty that is an issuer of securities
that are registered under section 12 of the Securities Exchange Act of
1934 (15 U.S.C. 78l) or that is required to file reports pursuant to
section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78o)
only if an appropriate committee of the issuer's board or governing body
has reviewed and approved its decision to enter into swaps that are
subject to such exemptions.''.

[[Page 1682]]

(c) <>  Grandfather Provisions.--
(1) Legal certainty for certain transactions in exempt
commodities.--Not <>  later than 60 days after
the date of enactment of this Act, a person may submit to the
Commodity Futures Trading Commission a petition to remain
subject to section 2(h) of the Commodity Exchange Act (7 U.S.C.
2(h)) (as in effect on the day before the date of enactment of
this Act).
(2) Consideration; authority of commodity futures trading
commission.--The Commodity Futures Trading Commission--
(A) shall consider any petition submitted under
subparagraph (A) in a prompt manner; and
(B) may allow a person to continue operating subject
to section 2(h) of the Commodity Exchange Act (7 U.S.C.
2(h)) (as in effect on the day before the date of
enactment of this Act) for not longer than a 1-year
period.
(3) Agricultural swaps.--
(A) In general.--Except as provided in subparagraph
(B), no person shall offer to enter into, enter into, or
confirm the execution of, any swap in an agricultural
commodity (as defined by the Commodity Futures Trading
Commission).
(B) <>  Exception.--
Notwithstanding subparagraph (A), a person may offer to
enter into, enter into, or confirm the execution of, any
swap in an agricultural commodity pursuant to section
4(c) of the Commodity Exchange Act (7 U.S.C. 6(c)) or
any rule, regulation, or order issued thereunder
(including any rule, regulation, or order in effect as
of the date of enactment of this Act) by the Commodity
Futures Trading Commission to allow swaps under such
terms and conditions as the Commission shall prescribe.
(4) Required reporting.--If <>
the exception described in section 2(h)(8)(B) of the Commodity
Exchange Act applies, the counterparties shall comply with any
recordkeeping and transaction reporting requirements that may be
prescribed by the Commission with respect to swaps subject to
section 2(h)(8)(B) of the Commodity Exchange Act.
SEC. 724. SWAPS; SEGREGATION AND BANKRUPTCY TREATMENT.

(a) Segregation Requirements for Cleared Swaps.--Section 4d of the
Commodity Exchange Act (7 U.S.C. 6d) (as amended by section 732) is
amended by adding at the end the following:
``(f) Swaps.--
``(1) Registration requirement.--It shall be unlawful for
any person to accept any money, securities, or property (or to
extend any credit in lieu of money, securities, or property)
from, for, or on behalf of a swaps customer to margin,
guarantee, or secure a swap cleared by or through a derivatives
clearing organization (including money, securities, or property
accruing to the customer as the result of such a swap), unless
the person shall have registered under this Act with the
Commission as a futures commission merchant, and the
registration shall not have expired nor been suspended nor
revoked.
``(2) Cleared swaps.--

[[Page 1683]]

``(A) Segregation required.--A futures commission
merchant shall treat and deal with all money,
securities, and property of any swaps customer received
to margin, guarantee, or secure a swap cleared by or
though a derivatives clearing organization (including
money, securities, or property accruing to the swaps
customer as the result of such a swap) as belonging to
the swaps customer.
``(B) Commingling prohibited.--Money, securities,
and property of a swaps customer described in
subparagraph (A) shall be separately accounted for and
shall not be commingled with the funds of the futures
commission merchant or be used to margin, secure, or
guarantee any trades or contracts of any swaps customer
or person other than the person for whom the same are
held.
``(3) Exceptions.--
``(A) Use of funds.--
``(i) In general.--Notwithstanding paragraph
(2), money, securities, and property of swap
customers of a futures commission merchant
described in paragraph (2) may, for convenience,
be commingled and deposited in the same account or
accounts with any bank or trust company or with a
derivatives clearing organization.
``(ii) Withdrawal.--Notwithstanding paragraph
(2), such share of the money, securities, and
property described in clause (i) as in the normal
course of business shall be necessary to margin,
guarantee, secure, transfer, adjust, or settle a
cleared swap with a derivatives clearing
organization, or with any member of the
derivatives clearing organization, may be
withdrawn and applied to such purposes, including
the payment of commissions, brokerage, interest,
taxes, storage, and other charges, lawfully
accruing in connection with the cleared swap.
``(B) Commission action.--Notwithstanding paragraph
(2), in accordance with such terms and conditions as the
Commission may prescribe by rule, regulation, or order,
any money, securities, or property of the swaps
customers of a futures commission merchant described in
paragraph (2) may be commingled and deposited in
customer accounts with any other money, securities, or
property received by the futures commission merchant and
required by the Commission to be separately accounted
for and treated and dealt with as belonging to the swaps
customer of the futures commission merchant.
``(4) Permitted investments.--Money described in paragraph
(2) may be invested in obligations of the United States, in
general obligations of any State or of any political subdivision
of a State, and in obligations fully guaranteed as to principal
and interest by the United States, or in any other investment
that the Commission may by rule or regulation prescribe, and
such investments shall be made in accordance with such rules and
regulations and subject to such conditions as the Commission may
prescribe.
``(5) Commodity contract.--A swap cleared by or through a
derivatives clearing organization shall be considered to be a
commodity contract as such term is defined in section 761

[[Page 1684]]

of title 11, United States Code, with regard to all money,
securities, and property of any swaps customer received by a
futures commission merchant or a derivatives clearing
organization to margin, guarantee, or secure the swap (including
money, securities, or property accruing to the customer as the
result of the swap).
``(6) Prohibition.--It shall be unlawful for any person,
including any derivatives clearing organization and any
depository institution, that has received any money, securities,
or property for deposit in a separate account or accounts as
provided in paragraph (2) to hold, dispose of, or use any such
money, securities, or property as belonging to the depositing
futures commission merchant or any person other than the swaps
customer of the futures commission merchant.''.

(b) Bankruptcy Treatment of Cleared Swaps.--Section 761 of title 11,
United States Code, is amended--
(1) in paragraph (4), by striking subparagraph (F) and
inserting the following:
``(F)(i) any other contract, option, agreement, or
transaction that is similar to a contract, option,
agreement, or transaction referred to in this paragraph;
and
``(ii) with respect to a futures commission merchant
or a clearing organization, any other contract, option,
agreement, or transaction, in each case, that is cleared
by a clearing organization;''; and
(2) in paragraph (9)(A)(i), by striking ``the commodity
futures account'' and inserting ``a commodity contract
account''.

(c) Segregation Requirements for Uncleared Swaps.--Section 4s of the
Commodity Exchange Act <>  (as added by section 731) is
amended by adding at the end the following:

``(l) Segregation Requirements.--
``(1) Segregation of assets held as collateral in uncleared
swap transactions.--
``(A) Notification.--A swap dealer or major swap
participant shall be required to notify the counterparty
of the swap dealer or major swap participant at the
beginning of a swap transaction that the counterparty
has the right to require segregation of the funds or
other property supplied to margin, guarantee, or secure
the obligations of the counterparty.
``(B) Segregation and maintenance of funds.--At the
request of a counterparty to a swap that provides funds
or other property to a swap dealer or major swap
participant to margin, guarantee, or secure the
obligations of the counterparty, the swap dealer or
major swap participant shall--
``(i) segregate the funds or other property
for the benefit of the counterparty; and
``(ii) in accordance with such rules and
regulations as the Commission may promulgate,
maintain the funds or other property in a
segregated account separate from the assets and
other interests of the swap dealer or major swap
participant.
``(2) Applicability.--The requirements described in
paragraph (1) shall--

[[Page 1685]]

``(A) apply only to a swap between a counterparty
and a swap dealer or major swap participant that is not
submitted for clearing to a derivatives clearing
organization; and
``(B)(i) not apply to variation margin payments; or
``(ii) not preclude any commercial arrangement
regarding--
``(I) the investment of segregated funds or
other property that may only be invested in such
investments as the Commission may permit by rule
or regulation; and
``(II) the related allocation of gains and
losses resulting from any investment of the
segregated funds or other property.
``(3) Use of independent third-party custodians.--The
segregated account described in paragraph (1) shall be--
``(A) carried by an independent third-party
custodian; and
``(B) designated as a segregated account for and on
behalf of the counterparty.
``(4) Reporting requirement.--If the counterparty does not
choose to require segregation of the funds or other property
supplied to margin, guarantee, or secure the obligations of the
counterparty, the swap dealer or major swap participant shall
report to the counterparty of the swap dealer or major swap
participant on a quarterly basis that the back office procedures
of the swap dealer or major swap participant relating to margin
and collateral requirements are in compliance with the agreement
of the counterparties.''.
SEC. 725. DERIVATIVES CLEARING ORGANIZATIONS.

(a) Registration Requirement.--Section 5b of the Commodity Exchange
Act (7 U.S.C. 7a-1) is amended by striking subsections (a) and (b) and
inserting the following:
``(a) Registration Requirement.--
``(1) In general.--Except as provided in paragraph (2), it
shall be unlawful for a derivatives clearing organization,
directly or indirectly, to make use of the mails or any means or
instrumentality of interstate commerce to perform the functions
of a derivatives clearing organization with respect to--
``(A) <>  a contract of sale of a
commodity for future delivery (or an option on the
contract of sale) or option on a commodity, in each
case, unless the contract or option is--
``(i) excluded from this Act by subsection
(a)(1)(C)(i), (c), or (f) of section 2; or
``(ii) a security futures product cleared by a
clearing agency registered with the Securities and
Exchange Commission under the Securities Exchange
Act of 1934 (15 U.S.C. 78a et seq.); or
``(B) a swap.
``(2) Exception.--Paragraph (1) shall not apply to a
derivatives clearing organization that is registered with the
Commission.

``(b) Voluntary Registration.--A person that clears 1 or more
agreements, contracts, or transactions that are not required to

[[Page 1686]]

be cleared under this Act may register with the Commission as a
derivatives clearing organization.''.
(b) Registration for Depository Institutions and Clearing Agencies;
Exemptions; Compliance Officer; Annual Reports.--Section 5b of the
Commodity Exchange Act (7 U.S.C. 7a-1) is amended by adding at the end
the following:
``(g) Existing Depository Institutions and Clearing Agencies.--
``(1) In general.--A depository institution or clearing
agency registered with the Securities and Exchange Commission
under the Securities Exchange Act of 1934 (15 U.S.C. 78a et
seq.) that is required to be registered as a derivatives
clearing organization under this section is deemed to be
registered under this section to the extent that, before the
date of enactment of this subsection--
``(A) the depository institution cleared swaps as a
multilateral clearing organization; or
``(B) the clearing agency cleared swaps.
``(2) Conversion of depository institutions.--A depository
institution to which this subsection applies may, by the vote of
the shareholders owning not less than 51 percent of the voting
interests of the depository institution, be converted into a
State corporation, partnership, limited liability company, or
similar legal form pursuant to a plan of conversion, if the
conversion is not in contravention of applicable State law.
``(3) Sharing of information.--The Securities and Exchange
Commission shall make available to the Commission, upon request,
all information determined to be relevant by the Securities and
Exchange Commission regarding a clearing agency deemed to be
registered with the Commission under paragraph (1).

``(h) Exemptions.--The Commission may exempt, conditionally or
unconditionally, a derivatives clearing organization from registration
under this section for the clearing of swaps if the Commission
determines that the derivatives clearing organization is subject to
comparable, comprehensive supervision and regulation by the Securities
and Exchange Commission or the appropriate government authorities in the
home country of the organization. Such conditions may include, but are
not limited to, requiring that the derivatives clearing organization be
available for inspection by the Commission and make available all
information requested by the Commission.
``(i) Designation of Chief Compliance Officer.--
``(1) In general.--Each derivatives clearing organization
shall designate an individual to serve as a chief compliance
officer.
``(2) Duties.--The chief compliance officer shall--
``(A) report directly to the board or to the senior
officer of the derivatives clearing organization;
``(B) review the compliance of the derivatives
clearing organization with respect to the core
principles described in subsection (c)(2);
``(C) in consultation with the board of the
derivatives clearing organization, a body performing a
function similar to the board of the derivatives
clearing organization, or the senior officer of the
derivatives clearing organization, resolve any conflicts
of interest that may arise;

[[Page 1687]]

``(D) be responsible for administering each policy
and procedure that is required to be established
pursuant to this section;
``(E) ensure compliance with this Act (including
regulations) relating to agreements, contracts, or
transactions, including each rule prescribed by the
Commission under this section;
``(F) establish procedures for the remediation of
noncompliance issues identified by the compliance
officer through any--
``(i) compliance office review;
``(ii) look-back;
``(iii) internal or external audit finding;
``(iv) self-reported error; or
``(v) validated complaint; and
``(G) establish and follow appropriate procedures
for the handling, management response, remediation,
retesting, and closing of noncompliance issues.
``(3) Annual reports.--
``(A) In general.--In accordance with rules
prescribed by the Commission, the chief compliance
officer shall annually prepare and sign a report that
contains a description of--
``(i) the compliance of the derivatives
clearing organization of the compliance officer
with respect to this Act (including regulations);
and
``(ii) each policy and procedure of the
derivatives clearing organization of the
compliance officer (including the code of ethics
and conflict of interest policies of the
derivatives clearing organization).
``(B) Requirements.--A compliance report under
subparagraph (A) shall--
``(i) accompany each appropriate financial
report of the derivatives clearing organization
that is required to be furnished to the Commission
pursuant to this section; and
``(ii) <>  include a
certification that, under penalty of law, the
compliance report is accurate and complete.''.

(c) Core Principles for Derivatives Clearing Organizations.--Section
5b(c) of the Commodity Exchange Act (7 U.S.C. 7a-1(c)) is amended by
striking paragraph (2) and inserting the following:
``(2) Core principles for derivatives clearing
organizations.--
``(A) Compliance.--
``(i) In general.--To be registered and to
maintain registration as a derivatives clearing
organization, a derivatives clearing organization
shall comply with each core principle described in
this paragraph and any requirement that the
Commission may impose by rule or regulation
pursuant to section 8a(5).
``(ii) Discretion of derivatives clearing
organization.--Subject to any rule or regulation
prescribed by the Commission, a derivatives
clearing organization shall have reasonable
discretion in establishing the manner by which the
derivatives clearing

[[Page 1688]]

organization complies with each core principle
described in this paragraph.
``(B) Financial resources.--
``(i) In general.--Each derivatives clearing
organization shall have adequate financial,
operational, and managerial resources, as
determined by the Commission, to discharge each
responsibility of the derivatives clearing
organization.
``(ii) Minimum amount of financial
resources.--Each derivatives clearing organization
shall possess financial resources that, at a
minimum, exceed the total amount that would--
``(I) enable the organization to
meet its financial obligations to its
members and participants notwithstanding
a default by the member or participant
creating the largest financial exposure
for that organization in extreme but
plausible market conditions; and
``(II) enable the derivatives
clearing organization to cover the
operating costs of the derivatives
clearing organization for a period of 1
year (as calculated on a rolling basis).
``(C) Participant and product eligibility.--
``(i) In general.--Each derivatives clearing
organization shall establish--
``(I) appropriate admission and
continuing eligibility standards
(including sufficient financial
resources and operational capacity to
meet obligations arising from
participation in the derivatives
clearing organization) for members of,
and participants in, the derivatives
clearing organization; and
``(II) appropriate standards for
determining the eligibility of
agreements, contracts, or transactions
submitted to the derivatives clearing
organization for clearing.
``(ii) Required procedures.--Each derivatives
clearing organization shall establish and
implement procedures to verify, on an ongoing
basis, the compliance of each participation and
membership requirement of the derivatives clearing
organization.
``(iii) Requirements.--The participation and
membership requirements of each derivatives
clearing organization shall--
``(I) be objective;
``(II) be publicly disclosed; and
``(III) permit fair and open access.
``(D) Risk management.--
``(i) In general.--Each derivatives clearing
organization shall ensure that the derivatives
clearing organization possesses the ability to
manage the risks associated with discharging the
responsibilities of the derivatives clearing
organization through the use of appropriate tools
and procedures.
``(ii) Measurement of credit exposure.--Each
derivatives clearing organization shall--
``(I) not less than once during each
business day of the derivatives clearing
organization,

[[Page 1689]]

measure the credit exposures of the
derivatives clearing organization to
each member and participant of the
derivatives clearing organization; and
``(II) monitor each exposure
described in subclause (I) periodically
during the business day of the
derivatives clearing organization.
``(iii) Limitation of exposure to potential
losses from defaults.--Each derivatives clearing
organization, through margin requirements and
other risk control mechanisms, shall limit the
exposure of the derivatives clearing organization
to potential losses from defaults by members and
participants of the derivatives clearing
organization to ensure that--
``(I) the operations of the
derivatives clearing organization would
not be disrupted; and
``(II) nondefaulting members or
participants would not be exposed to
losses that nondefaulting members or
participants cannot anticipate or
control.
``(iv) Margin requirements.--The margin
required from each member and participant of a
derivatives clearing organization shall be
sufficient to cover potential exposures in normal
market conditions.
``(v) Requirements regarding models and
parameters.--Each model and parameter used in
setting margin requirements under clause (iv)
shall be--
``(I) risk-based; and
``(II) reviewed on a regular basis.
``(E) Settlement procedures.--Each derivatives
clearing organization shall--
``(i) complete money settlements on a timely
basis (but not less frequently than once each
business day);
``(ii) employ money settlement arrangements to
eliminate or strictly limit the exposure of the
derivatives clearing organization to settlement
bank risks (including credit and liquidity risks
from the use of banks to effect money
settlements);
``(iii) ensure that money settlements are
final when effected;
``(iv) maintain an accurate record of the flow
of funds associated with each money settlement;
``(v) possess the ability to comply with each
term and condition of any permitted netting or
offset arrangement with any other clearing
organization;
``(vi) regarding physical settlements,
establish rules that clearly state each obligation
of the derivatives clearing organization with
respect to physical deliveries; and
``(vii) ensure that each risk arising from an
obligation described in clause (vi) is identified
and managed.
``(F) Treatment of funds.--
``(i) Required standards and procedures.--Each
derivatives clearing organization shall establish
standards and procedures that are designed to
protect and ensure the safety of member and
participant funds and assets.

[[Page 1690]]

``(ii) Holding of funds and assets.--Each
derivatives clearing organization shall hold
member and participant funds and assets in a
manner by which to minimize the risk of loss or of
delay in the access by the derivatives clearing
organization to the assets and funds.
``(iii) Permissible investments.--Funds and
assets invested by a derivatives clearing
organization shall be held in instruments with
minimal credit, market, and liquidity risks.
``(G) Default rules and procedures.--
``(i) In general.--Each derivatives clearing
organization shall have rules and procedures
designed to allow for the efficient, fair, and
safe management of events during which members or
participants--
``(I) become insolvent; or
``(II) otherwise default on the
obligations of the members or
participants to the derivatives clearing
organization.
``(ii) Default procedures.--Each derivatives
clearing organization shall--
``(I) clearly state the default
procedures of the derivatives clearing
organization;
``(II) <>  make publicly available
the default rules of the derivatives
clearing organization; and
``(III) ensure that the derivatives
clearing organization may take timely
action--
``(aa) to contain losses and
liquidity pressures; and
``(bb) to continue meeting
each obligation of the
derivatives clearing
organization.
``(H) Rule enforcement.--Each derivatives clearing
organization shall--
``(i) maintain adequate arrangements and
resources for--
``(I) the effective monitoring and
enforcement of compliance with the rules
of the derivatives clearing
organization; and
``(II) the resolution of disputes;
``(ii) have the authority and ability to
discipline, limit, suspend, or terminate the
activities of a member or participant due to a
violation by the member or participant of any rule
of the derivatives clearing organization; and
``(iii) <>  report to the
Commission regarding rule enforcement activities
and sanctions imposed against members and
participants as provided in clause (ii).
``(I) System safeguards.--Each derivatives clearing
organization shall--
``(i) establish and maintain a program of risk
analysis and oversight to identify and minimize
sources of operational risk through the
development of appropriate controls and
procedures, and automated systems, that are
reliable, secure, and have adequate scalable
capacity;

[[Page 1691]]

``(ii) <>  establish and
maintain emergency procedures, backup facilities,
and a plan for disaster recovery that allows for--
``(I) the timely recovery and
resumption of operations of the
derivatives clearing organization; and
``(II) the fulfillment of each
obligation and responsibility of the
derivatives clearing organization; and
``(iii) <>  periodically conduct
tests to verify that the backup resources of the
derivatives clearing organization are sufficient
to ensure daily processing, clearing, and
settlement.
``(J) Reporting.--Each derivatives clearing
organization shall provide to the Commission all
information that the Commission determines to be
necessary to conduct oversight of the derivatives
clearing organization.
``(K) Recordkeeping.--Each derivatives clearing
organization shall maintain records of all activities
related to the business of the derivatives clearing
organization as a derivatives clearing organization--
``(i) in a form and manner that is acceptable
to the Commission; and
``(ii) <>  for a period of
not less than 5 years.
``(L) Public information.--
``(i) In general.--Each derivatives clearing
organization shall provide to market participants
sufficient information to enable the market
participants to identify and evaluate accurately
the risks and costs associated with using the
services of the derivatives clearing organization.
``(ii) Availability of information.--Each
derivatives clearing organization shall make
information concerning the rules and operating and
default procedures governing the clearing and
settlement systems of the derivatives clearing
organization available to market participants.
``(iii) Public disclosure.--Each derivatives
clearing organization shall disclose publicly and
to the Commission information concerning--
``(I) the terms and conditions of
each contract, agreement, and
transaction cleared and settled by the
derivatives clearing organization;
``(II) each clearing and other fee
that the derivatives clearing
organization charges the members and
participants of the derivatives clearing
organization;
``(III) the margin-setting
methodology, and the size and
composition, of the financial resource
package of the derivatives clearing
organization;
``(IV) daily settlement prices,
volume, and open interest for each
contract settled or cleared by the
derivatives clearing organization; and
``(V) any other matter relevant to
participation in the settlement and
clearing activities of the derivatives
clearing organization.

[[Page 1692]]

``(M) Information-sharing.--Each derivatives
clearing organization shall--
``(i) <>  enter into, and
abide by the terms of, each appropriate and
applicable domestic and international information-
sharing agreement; and
``(ii) use relevant information obtained from
each agreement described in clause (i) in carrying
out the risk management program of the derivatives
clearing organization.
``(N) Antitrust considerations.--Unless necessary or
appropriate to achieve the purposes of this Act, a
derivatives clearing organization shall not--
``(i) adopt any rule or take any action that
results in any unreasonable restraint of trade; or
``(ii) impose any material anticompetitive
burden.
``(O) Governance fitness standards.--
``(i) Governance arrangements.--Each
derivatives clearing organization shall establish
governance arrangements that are transparent--
``(I) to fulfill public interest
requirements; and
``(II) to permit the consideration
of the views of owners and participants.
``(ii) Fitness standards.--Each derivatives
clearing organization shall establish and enforce
appropriate fitness standards for--
``(I) directors;
``(II) members of any disciplinary
committee;
``(III) members of the derivatives
clearing organization;
``(IV) any other individual or
entity with direct access to the
settlement or clearing activities of the
derivatives clearing organization; and
``(V) any party affiliated with any
individual or entity described in this
clause.
``(P) Conflicts of interest.--Each derivatives
clearing organization shall--
``(i) <>  establish and
enforce rules to minimize conflicts of interest in
the decision-making process of the derivatives
clearing organization; and
``(ii) establish a process for resolving
conflicts of interest described in clause (i).
``(Q) Composition of governing boards.--Each
derivatives clearing organization shall ensure that the
composition of the governing board or committee of the
derivatives clearing organization includes market
participants.
``(R) Legal risk.--Each derivatives clearing
organization shall have a well-founded, transparent, and
enforceable legal framework for each aspect of the
activities of the derivatives clearing organization.''.

(d) <>  Conflicts of
Interest.--The Commodity Futures Trading Commission shall adopt rules
mitigating conflicts of interest in connection with the conduct of
business by a swap dealer or a major swap participant with a derivatives
clearing organization, board of trade, or a swap execution facility that
clears or trades swaps in which the swap dealer or major swap
participant has a material debt or material equity investment.

[[Page 1693]]

(e) Reporting Requirements.--Section 5b of the Commodity Exchange
Act (7 U.S.C. 7a-1) (as amended by subsection (b)) is amended by adding
at the end the following:
``(k) Reporting Requirements.--
``(1) Duty of derivatives clearing organizations.--Each
derivatives clearing organization that clears swaps shall
provide to the Commission all information that is determined by
the Commission to be necessary to perform each responsibility of
the Commission under this Act.
``(2) Data collection and maintenance requirements.--The
Commission shall adopt data collection and maintenance
requirements for swaps cleared by derivatives clearing
organizations that are comparable to the corresponding
requirements for--
``(A) swaps data reported to swap data repositories;
and
``(B) swaps traded on swap execution facilities.
``(3) Reports on security-based swap agreements to be shared
with the securities and exchange commission.--
``(A) In general.--A derivatives clearing
organization that clears security-based swap agreements
(as defined in section 1a(47)(A)(v)) shall, upon
request, open to inspection and examination to the
Securities and Exchange Commission all books and records
relating to such security-based swap agreements,
consistent with the confidentiality and disclosure
requirements of section 8.
``(B) Jurisdiction.--Nothing in this paragraph shall
affect the exclusive jurisdiction of the Commission to
prescribe recordkeeping and reporting requirements for a
derivatives clearing organization that is registered
with the Commission.
``(4) Information sharing.--Subject to section 8, and upon
request, the Commission shall share information collected under
paragraph (2) with--
``(A) the Board;
``(B) the Securities and Exchange Commission;
``(C) each appropriate prudential regulator;
``(D) the Financial Stability Oversight Council;
``(E) the Department of Justice; and
``(F) any other person that the Commission
determines to be appropriate, including--
``(i) foreign financial supervisors (including
foreign futures authorities);
``(ii) foreign central banks; and
``(iii) foreign ministries.
``(5) Confidentiality and indemnification agreement.--Before
the Commission may share information with any entity described
in paragraph (4)--
``(A) the Commission shall receive a written
agreement from each entity stating that the entity shall
abide by the confidentiality requirements described in
section 8 relating to the information on swap
transactions that is provided; and
``(B) each entity shall agree to indemnify the
Commission for any expenses arising from litigation
relating to the information provided under section 8.

[[Page 1694]]

``(6) Public information.--Each derivatives clearing
organization that clears swaps shall provide to the Commission
(including any designee of the Commission) information under
paragraph (2) in such form and at such frequency as is required
by the Commission to comply with the public reporting
requirements contained in section 2(a)(13).''.

(f) Public Disclosure.--Section 8(e) of the Commodity Exchange Act
(7 U.S.C. 12(e)) is amended in the last sentence--
(1) by inserting ``, central bank and ministries,'' after
``department'' each place it appears; and
(2) by striking ``. is a party.'' and inserting ``, is a
party.''.

(g) Legal Certainty for Identified Banking Products.--
(1) Repeals.--The Legal Certainty for Bank Products Act of
2000 (7 U.S.C. 27 et seq.) is amended--
(A) by striking sections 404 and 407 (7 U.S.C. 27b,
27e);
(B) in section 402 (7 U.S.C. 27), by striking
subsection (d); and
(C) in section 408 (7 U.S.C. 27f)--
(i) in subsection (c)--
(I) by striking ``in the case'' and
all that follows through ``a hybrid''
and inserting ``in the case of a
hybrid'';
(II) by striking ``; or'' and
inserting a period; and
(III) by striking paragraph (2);
(ii) by striking subsection (b); and
(iii) by redesignating subsection (c) as
subsection (b).
(2) Legal certainty for bank products act of 2000.--Section
403 of the Legal Certainty for Bank Products Act of 2000 (7
U.S.C. 27a) is amended to read as follows:
``SEC. 403. EXCLUSION OF IDENTIFIED BANKING PRODUCT.

``(a) Exclusion.--Except as provided in subsection (b) or (c)--
``(1) the Commodity Exchange Act (7 U.S.C. 1 et seq.) shall
not apply to, and the Commodity Futures Trading Commission shall
not exercise regulatory authority under the Commodity Exchange
Act (7 U.S.C. 1 et seq.) with respect to, an identified banking
product; and
``(2) the definitions of `security-based swap' in section
3(a)(68) of the Securities Exchange Act of 1934 and `security-
based swap agreement' in section 1a(47)(A)(v) of the Commodity
Exchange Act and section 3(a)(78) of the Securities Exchange Act
of 1934 do not include any identified bank product.

``(b) Exception.--An appropriate Federal banking agency may except
an identified banking product of a bank under its regulatory
jurisdiction from the exclusion in subsection (a) if the agency
determines, in consultation with the Commodity Futures Trading
Commission and the Securities and Exchange Commission, that the
product--
``(1) would meet the definition of a `swap' under section
1a(47) of the Commodity Exchange Act (7 U.S.C. 1a) or a
`security-based swap' under that section 3(a)(68) of the
Securities Exchange Act of 1934; and
``(2) has become known to the trade as a swap or security-
based swap, or otherwise has been structured as an identified

[[Page 1695]]

banking product for the purpose of evading the provisions of the
Commodity Exchange Act (7 U.S.C. 1 et seq.), the Securities Act
of 1933 (15 U.S.C. 77a et seq.), or the Securities Exchange Act
of 1934 (15 U.S.C. 78a et seq.).

``(c) Exception.--The exclusions in subsection (a) shall not apply
to an identified bank product that--
``(1) is a product of a bank that is not under the
regulatory jurisdiction of an appropriate Federal banking
agency;
``(2) meets the definition of swap in section 1a(47) of the
Commodity Exchange Act or security-based swap in section
3(a)(68) of the Securities Exchange Act of 1934; and
``(3) has become known to the trade as a swap or security-
based swap, or otherwise has been structured as an identified
banking product for the purpose of evading the provisions of the
Commodity Exchange Act (7 U.S.C. 1 et seq.), the Securities Act
of 1933 (15 U.S.C. 77a et seq.), or the Securities Exchange Act
of 1934 (15 U.S.C. 78a et seq.).''.

(h) Reducing Clearing Systemic Risk.--Section 5b(f)(1) of the
Commodity Exchange Act (7 U.S.C. 7a-1(F)(i)) is amended by adding at the
end the following: ``In order to minimize systemic risk, under no
circumstances shall a derivatives clearing organization be compelled to
accept the counterparty credit risk of another clearing organization.''.
SEC. 726. <>  RULEMAKING ON CONFLICT OF
INTEREST.

(a) In General.--In <>  order to mitigate conflicts
of interest, not later than 180 days after the date of enactment of the
Wall Street Transparency and Accountability Act of 2010, the Commodity
Futures Trading Commission shall adopt rules which may include numerical
limits on the control of, or the voting rights with respect to, any
derivatives clearing organization that clears swaps, or swap execution
facility or board of trade designated as a contract market that posts
swaps or makes swaps available for trading, by a bank holding company
(as defined in section 2 of the Bank Holding Company Act of 1956 (12
U.S.C. 1841)) with total consolidated assets of $50,000,000,000 or more,
a nonbank financial company (as defined in section 102) supervised by
the Board, an affiliate of such a bank holding company or nonbank
financial company, a swap dealer, major swap participant, or associated
person of a swap dealer or major swap participant.

(b) Purposes.--The Commission shall adopt rules if it determines,
after the review described in subsection (a), that such rules are
necessary or appropriate to improve the governance of, or to mitigate
systemic risk, promote competition, or mitigate conflicts of interest in
connection with a swap dealer or major swap participant's conduct of
business with, a derivatives clearing organization, contract market, or
swap execution facility that clears or posts swaps or makes swaps
available for trading and in which such swap dealer or major swap
participant has a material debt or equity investment.
(c) Considerations.--In adopting rules pursuant to this section, the
Commodity Futures Trading Commission shall consider any conflicts of
interest arising from the amount of equity owned by a single investor,
the ability to vote, cause the vote of, or withhold votes entitled to be
cast on any matters by the holders of the ownership interest, and the
governance arrangements of any derivatives clearing organization that
clears swaps, or swap

[[Page 1696]]

execution facility or board of trade designated as a contract market
that posts swaps or makes swaps available for trading.
SEC. 727. PUBLIC REPORTING OF SWAP TRANSACTION DATA.

Section 2(a) of the Commodity Exchange Act (7 U.S.C. 2(a)) is
amended by adding at the end the following:
``(13) Public availability of swap transaction data.--
``(A) Definition of real-time public reporting.--In
this paragraph, the term `real-time public reporting'
means to report data relating to a swap transaction,
including price and volume, as soon as technologically
practicable after the time at which the swap transaction
has been executed.
``(B) Purpose.--The purpose of this section is to
authorize the Commission to make swap transaction and
pricing data available to the public in such form and at
such times as the Commission determines appropriate to
enhance price discovery.
``(C) General rule.--The Commission is authorized
and required to provide by rule for the public
availability of swap transaction and pricing data as
follows:
``(i) With respect to those swaps that are
subject to the mandatory clearing requirement
described in subsection (h)(1) (including those
swaps that are excepted from the requirement
pursuant to subsection (h)(7)), the Commission
shall require real-time public reporting for such
transactions.
``(ii) With respect to those swaps that are
not subject to the mandatory clearing requirement
described in subsection (h)(1), but are cleared at
a registered derivatives clearing organization,
the Commission shall require real-time public
reporting for such transactions.
``(iii) With respect to swaps that are not
cleared at a registered derivatives clearing
organization and which are reported to a swap data
repository or the Commission under subsection
(h)(6), the Commission shall require real-time
public reporting for such transactions, in a
manner that does not disclose the business
transactions and market positions of any person.
``(iv) With respect to swaps that are
determined to be required to be cleared under
subsection (h)(2) but are not cleared, the
Commission shall require real-time public
reporting for such transactions.
``(D) Registered entities and public reporting.--The
Commission may require registered entities to publicly
disseminate the swap transaction and pricing data
required to be reported under this paragraph.
``(E) Rulemaking required.--With respect to the rule
providing for the public availability of transaction and
pricing data for swaps described in clauses (i) and (ii)
of subparagraph (C), the rule promulgated by the
Commission shall contain provisions--
``(i) to ensure such information does not
identify the participants;

[[Page 1697]]

``(ii) <> to specify the
criteria for determining what constitutes a large
notional swap transaction (block trade) for
particular markets and contracts;
``(iii) to specify the appropriate time delay
for reporting large notional swap transactions
(block trades) to the public; and
``(iv) that take into account whether the
public disclosure will materially reduce market
liquidity.
``(F) Timeliness of reporting.--Parties to a swap
(including agents of the parties to a swap) shall be
responsible for reporting swap transaction information
to the appropriate registered entity in a timely manner
as may be prescribed by the Commission.
``(G) Reporting of swaps to registered swap data
repositories.--Each swap (whether cleared or uncleared)
shall be reported to a registered swap data repository.
``(14) Semiannual and annual public reporting of aggregate
swap data.--
``(A) In general.--In accordance with subparagraph
(B), the Commission shall issue a written report on a
semiannual and annual basis to make available to the
public information relating to--
``(i) the trading and clearing in the major
swap categories; and
``(ii) the market participants and
developments in new products.
``(B) Use; consultation.--In preparing a report
under subparagraph (A), the Commission shall--
``(i) use information from swap data
repositories and derivatives clearing
organizations; and
``(ii) consult with the Office of the
Comptroller of the Currency, the Bank for
International Settlements, and such other
regulatory bodies as may be necessary.
``(C) Authority of the commission.--The Commission
may, by rule, regulation, or order, delegate the public
reporting responsibilities of the Commission under this
paragraph in accordance with such terms and conditions
as the Commission determines to be appropriate and in
the public interest.''.
SEC. 728. SWAP DATA REPOSITORIES.

The Commodity Exchange Act is amended by inserting after section 20
(7 U.S.C. 24) the following:
``SEC. 21. <>  SWAP DATA REPOSITORIES.

``(a) Registration Requirement.--
``(1) Requirement; authority of derivatives clearing
organization.--
``(A) In general.--It shall be unlawful for any
person, unless registered with the Commission, directly
or indirectly to make use of the mails or any means or
instrumentality of interstate commerce to perform the
functions of a swap data repository.
``(B) Registration of derivatives clearing
organizations.--A derivatives clearing organization may
register as a swap data repository.

[[Page 1698]]

``(2) Inspection and examination.--Each registered swap data
repository shall be subject to inspection and examination by any
representative of the Commission.
``(3) Compliance with core principles.--
``(A) In general.--To be registered, and maintain
registration, as a swap data repository, the swap data
repository shall comply with--
``(i) the requirements and core principles
described in this section; and
``(ii) any requirement that the Commission may
impose by rule or regulation pursuant to section
8a(5).
``(B) Reasonable discretion of swap data
repository.--Unless otherwise determined by the
Commission by rule or regulation, a swap data repository
described in subparagraph (A) shall have reasonable
discretion in establishing the manner in which the swap
data repository complies with the core principles
described in this section.

``(b) Standard Setting.--
``(1) Data identification.--
``(A) In general.--In accordance with subparagraph
(B), the Commission shall prescribe standards that
specify the data elements for each swap that shall be
collected and maintained by each registered swap data
repository.
``(B) Requirement.--In carrying out subparagraph
(A), the Commission shall prescribe consistent data
element standards applicable to registered entities and
reporting counterparties.
``(2) Data collection and maintenance.--The Commission shall
prescribe data collection and data maintenance standards for
swap data repositories.
``(3) Comparability.--The standards prescribed by the
Commission under this subsection shall be comparable to the data
standards imposed by the Commission on derivatives clearing
organizations in connection with their clearing of swaps.

``(c) Duties.--A swap data repository shall--
``(1) accept data prescribed by the Commission for each swap
under subsection (b);
``(2) confirm with both counterparties to the swap the
accuracy of the data that was submitted;
``(3) maintain the data described in paragraph (1) in such
form, in such manner, and for such period as may be required by
the Commission;
``(4)(A) provide direct electronic access to the Commission
(or any designee of the Commission, including another registered
entity); and
``(B) provide the information described in paragraph (1) in
such form and at such frequency as the Commission may require to
comply with the public reporting requirements contained in
section 2(a)(13);
``(5) at the direction of the Commission, establish
automated systems for monitoring, screening, and analyzing swap
data, including compliance and frequency of end user clearing
exemption claims by individual and affiliated entities;
``(6) maintain the privacy of any and all swap transaction
information that the swap data repository receives from a swap
dealer, counterparty, or any other registered entity; and

[[Page 1699]]

``(7) on a confidential basis pursuant to section 8, upon
request, and after notifying the Commission of the request, make
available all data obtained by the swap data repository,
including individual counterparty trade and position data, to--
``(A) each appropriate prudential regulator;
``(B) the Financial Stability Oversight Council;
``(C) the Securities and Exchange Commission;
``(D) the Department of Justice; and
``(E) any other person that the Commission
determines to be appropriate, including--
``(i) foreign financial supervisors (including
foreign futures authorities);
``(ii) foreign central banks; and
``(iii) foreign ministries; and
``(8) establish and maintain emergency procedures, backup
facilities, and a plan for disaster recovery that allows for the
timely recovery and resumption of operations and the fulfillment
of the responsibilities and obligations of the organization.

``(d) Confidentiality and Indemnification Agreement.--Before the
swap data repository may share information with any entity described in
subsection (c)(7)--
``(1) the swap data repository shall receive a written
agreement from each entity stating that the entity shall abide
by the confidentiality requirements described in section 8
relating to the information on swap transactions that is
provided; and
``(2) each entity shall agree to indemnify the swap data
repository and the Commission for any expenses arising from
litigation relating to the information provided under section 8.

``(e) Designation of Chief Compliance Officer.--
``(1) In general.--Each swap data repository shall designate
an individual to serve as a chief compliance officer.
``(2) Duties.--The chief compliance officer shall--
``(A) report directly to the board or to the senior
officer of the swap data repository;
``(B) review the compliance of the swap data
repository with respect to the requirements and core
principles described in this section;
``(C) in consultation with the board of the swap
data repository, a body performing a function similar to
the board of the swap data repository, or the senior
officer of the swap data repository, resolve any
conflicts of interest that may arise;
``(D) be responsible for administering each policy
and procedure that is required to be established
pursuant to this section;
``(E) ensure compliance with this Act (including
regulations) relating to agreements, contracts, or
transactions, including each rule prescribed by the
Commission under this section;
``(F) establish procedures for the remediation of
noncompliance issues identified by the chief compliance
officer through any--
``(i) compliance office review;
``(ii) look-back;
``(iii) internal or external audit finding;
``(iv) self-reported error; or

[[Page 1700]]

``(v) validated complaint; and
``(G) establish and follow appropriate procedures
for the handling, management response, remediation,
retesting, and closing of noncompliance issues.
``(3) Annual reports.--
``(A) In general.--In accordance with rules
prescribed by the Commission, the chief compliance
officer shall annually prepare and sign a report that
contains a description of--
``(i) the compliance of the swap data
repository of the chief compliance officer with
respect to this Act (including regulations); and
``(ii) each policy and procedure of the swap
data repository of the chief compliance officer
(including the code of ethics and conflict of
interest policies of the swap data repository).
``(B) Requirements.--A compliance report under
subparagraph (A) shall--
``(i) accompany each appropriate financial
report of the swap data repository that is
required to be furnished to the Commission
pursuant to this section; and
``(ii) <>  include a
certification that, under penalty of law, the
compliance report is accurate and complete.

``(f) Core Principles Applicable To Swap Data Repositories.--
``(1) Antitrust considerations.--Unless necessary or
appropriate to achieve the purposes of this Act, a swap data
repository shall not--
``(A) adopt any rule or take any action that results
in any unreasonable restraint of trade; or
``(B) impose any material anticompetitive burden on
the trading, clearing, or reporting of transactions.
``(2) Governance arrangements.--Each swap data repository
shall establish governance arrangements that are transparent--
``(A) to fulfill public interest requirements; and
``(B) to support the objectives of the Federal
Government, owners, and participants.
``(3) Conflicts of interest.--Each swap data repository
shall--
``(A) <>  establish and enforce
rules to minimize conflicts of interest in the decision-
making process of the swap data repository; and
``(B) establish a process for resolving conflicts of
interest described in subparagraph (A).
``(4) Additional duties developed by commission.--
``(A) In general.--The Commission may develop 1 or
more additional duties applicable to swap data
repositories.
``(B) Consideration of evolving standards.--In
developing additional duties under subparagraph (A), the
Commission may take into consideration any evolving
standard of the United States or the international
community.
``(C) Additional duties for commission designees.--
The Commission shall establish additional duties for any
registrant described in section 1a(48) in order to
minimize

[[Page 1701]]

conflicts of interest, protect data, ensure compliance,
and guarantee the safety and security of the swap data
repository.

``(g) Required Registration for Swap Data Repositories.--Any person
that is required to be registered as a swap data repository under this
section shall register with the Commission regardless of whether that
person is also licensed as a bank or registered with the Securities and
Exchange Commission as a swap data repository.
``(h) Rules.--The Commission shall adopt rules governing persons
that are registered under this section.''.
SEC. 729. REPORTING AND RECORDKEEPING.

The Commodity Exchange Act is amended by inserting after section
4q <>  (7 U.S.C. 6o-1) the following:
``SEC. 4r. <>  REPORTING AND RECORDKEEPING FOR
UNCLEARED SWAPS.

``(a) Required Reporting of Swaps Not Accepted by Any Derivatives
Clearing Organization.--
``(1) In general.--Each swap that is not accepted for
clearing by any derivatives clearing organization shall be
reported to--
``(A) a swap data repository described in section
21; or
``(B) in the case in which there is no swap data
repository that would accept the swap, to the Commission
pursuant to this section within such time period as the
Commission may by rule or regulation prescribe.
``(2) Transition rule for preenactment swaps.--
``(A) Swaps entered into before the date of
enactment of the wall street transparency and
accountability act of 2010.--Each swap entered into
before the date of enactment of the Wall Street
Transparency and Accountability Act of 2010, the terms
of which have not expired as of the date of enactment of
that Act, shall be reported to a registered swap data
repository or the Commission by a date that is not later
than--
``(i) 30 days after issuance of the interim
final rule; or
``(ii) such other period as the Commission
determines to be appropriate.
``(B) Commission rulemaking.--The Commission shall
promulgate an interim final rule within 90 days of the
date of enactment of this section providing for the
reporting of each swap entered into before the date of
enactment as referenced in subparagraph (A).
``(C) Effective date.--The reporting provisions
described in this section shall be effective upon the
enactment of this section.
``(3) 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 (1) and (2).
``(B) Swaps in which 1 counterparty is a swap dealer
and the other a major swap participant.--With

[[Page 1702]]

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 (1) and (2).
``(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 (1) and
(2).

``(b) Duties of Certain Individuals.--Any individual or entity that
enters into a swap shall meet each requirement described in subsection
(c) if the individual or entity did not--
``(1) clear the swap in accordance with section 2(h)(1); or
``(2) have the data regarding the swap accepted by a swap
data repository in accordance with rules (including timeframes)
adopted by the Commission under section 21.

``(c) Requirements.--An individual or entity described in subsection
(b) shall--
``(1) upon written request from the Commission, provide
reports regarding the swaps held by the individual or entity to
the Commission in such form and in such manner as the Commission
may request; and
``(2) maintain books and records pertaining to the swaps
held by the individual or entity in such form, in such manner,
and for such period as the Commission may require, which shall
be open to inspection by--
``(A) any representative of the Commission;
``(B) an appropriate prudential regulator;
``(C) the Securities and Exchange Commission;
``(D) the Financial Stability Oversight Council; and
``(E) the Department of Justice.

``(d) Identical Data.--In prescribing rules under this section, the
Commission shall require individuals and entities described in
subsection (b) to submit to the Commission a report that contains data
that is not less comprehensive than the data required to be collected by
swap data repositories under section 21.''.
SEC. 730. LARGE SWAP TRADER REPORTING.

The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by adding
after section 4s (as added by section 731) the following:
``SEC. 4t. <>  LARGE SWAP TRADER REPORTING.

``(a) Prohibition.--
``(1) In general.--Except as provided in paragraph (2), it
shall be unlawful for any person to enter into any swap that the
Commission determines to perform a significant price discovery
function with respect to registered entities if--
``(A) the person directly or indirectly enters into
the swap during any 1 day in an amount equal to or in
excess of such amount as shall be established
periodically by the Commission; and
``(B) the person directly or indirectly has or
obtains a position in the swap equal to or in excess of
such amount as shall be established periodically by the
Commission.
``(2) Exception.--Paragraph (1) shall not apply if--
``(A) the person files or causes to be filed with
the properly designated officer of the Commission such
reports

[[Page 1703]]

regarding any transactions or positions described in
subparagraphs (A) and (B) of paragraph (1) as the
Commission may require by rule or regulation; and
``(B) in accordance with the rules and regulations
of the Commission, the person keeps books and records of
all such swaps and any transactions and positions in any
related commodity traded on or subject to the rules of
any designated contract market or swap execution
facility, and of cash or spot transactions in,
inventories of, and purchase and sale commitments of,
such a commodity.

``(b) <>  Requirements.--
``(1) In general.--Books and records described in subsection
(a)(2)(B) shall--
``(A) show such complete details concerning all
transactions and positions as the Commission may
prescribe by rule or regulation;
``(B) be open at all times to inspection and
examination by any representative of the Commission; and
``(C) be open at all times to inspection and
examination by the Securities and Exchange Commission,
to the extent such books and records relate to
transactions in swaps (as that term is defined in
section 1a(47)(A)(v)), and consistent with the
confidentiality and disclosure requirements of section
8.
``(2) Jurisdiction.--Nothing in paragraph (1) shall affect
the exclusive jurisdiction of the Commission to prescribe
recordkeeping and reporting requirements for large swap traders
under this section.

``(c) Applicability.--For purposes of this section, the swaps,
futures, and cash or spot transactions and positions of any person shall
include the swaps, futures, and cash or spot transactions and positions
of any persons directly or indirectly controlled by the person.
``(d) Significant Price Discovery Function.--In making a
determination as to whether a swap performs or affects a significant
price discovery function with respect to registered entities, the
Commission shall consider the factors described in section 4a(a)(3).''.
SEC. 731. REGISTRATION AND REGULATION OF SWAP DEALERS AND MAJOR
SWAP PARTICIPANTS.

The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by
inserting after section 4r (as added by section 729) the following:
``SEC. 4s. <>  REGISTRATION AND REGULATION OF
SWAP DEALERS AND MAJOR SWAP PARTICIPANTS.

``(a) Registration.--
``(1) Swap dealers.--It shall be unlawful for any person to
act as a swap dealer unless the person is registered as a swap
dealer with the Commission.
``(2) Major swap participants.--It shall be unlawful for any
person to act as a major swap participant unless the person is
registered as a major swap participant with the Commission.

``(b) Requirements.--
``(1) In general.--A person shall register as a swap dealer
or major swap participant by filing a registration application
with the Commission.
``(2) Contents.--

[[Page 1704]]

``(A) In general.--The application shall be made in
such form and manner as prescribed by the Commission,
and shall contain such information, as the Commission
considers necessary concerning the business in which the
applicant is or will be engaged.
``(B) Continual reporting.--A person that is
registered as a swap dealer or major swap participant
shall continue to submit to the Commission reports that
contain such information pertaining to the business of
the person as the Commission may require.
``(3) Expiration.--Each registration under this section
shall expire at such time as the Commission may prescribe by
rule or regulation.
``(4) Rules.--Except as provided in subsections (d) and (e),
the Commission may prescribe rules applicable to swap dealers
and major swap participants, including rules that limit the
activities of swap dealers and major swap participants.
``(5) Transition.--Rules <>
under this section shall provide for the registration of swap
dealers and major swap participants not later than 1 year after
the date of enactment of the Wall Street Transparency and
Accountability Act of 2010.
``(6) Statutory disqualification.--Except to the extent
otherwise specifically provided by rule, regulation, or order,
it shall be unlawful for a swap dealer or a major swap
participant to permit any person associated with a swap dealer
or a major swap participant who is subject to a statutory
disqualification to effect or be involved in effecting swaps on
behalf of the swap dealer or major swap participant, if the swap
dealer or major swap participant knew, or in the exercise of
reasonable care should have known, of the statutory
disqualification.

``(c) Dual Registration.--
``(1) Swap dealer.--Any person that is required to be
registered as a swap dealer under this section shall register
with the Commission regardless of whether the person also is a
depository institution or is registered with the Securities and
Exchange Commission as a security-based swap dealer.
``(2) Major swap participant.--Any person that is required
to be registered as a major swap participant under this section
shall register with the Commission regardless of whether the
person also is a depository institution or is registered with
the Securities and Exchange Commission as a major security-based
swap participant.

``(d) Rulemakings.--
``(1) In general.--The Commission shall adopt rules for
persons that are registered as swap dealers or major swap
participants under this section.
``(2) Exception for prudential requirements.--
``(A) In general.--The Commission may not prescribe
rules imposing prudential requirements on swap dealers
or major swap participants for which there is a
prudential regulator.
``(B) Applicability.--Subparagraph (A) does not
limit the authority of the Commission to prescribe rules
as directed under this section.

``(e) Capital and Margin Requirements.--
``(1) <>  In general.--

[[Page 1705]]

``(A) Swap dealers and major swap participants that
are banks.--Each registered swap dealer and major swap
participant for which there is a prudential regulator
shall meet such minimum capital requirements and minimum
initial and variation margin requirements as the
prudential regulator shall by rule or regulation
prescribe under paragraph (2)(A).
``(B) Swap dealers and major swap participants that
are not banks.--Each registered swap dealer and major
swap participant for which there is not a prudential
regulator shall meet such minimum capital requirements
and minimum initial and variation margin requirements as
the Commission shall by rule or regulation prescribe
under paragraph (2)(B).
``(2) Rules.--
``(A) Swap dealers and major swap participants that
are banks.--The prudential regulators, in consultation
with the Commission and the Securities and Exchange
Commission, shall jointly adopt rules for swap dealers
and major swap participants, with respect to their
activities as a swap dealer or major swap participant,
for which there is a prudential regulator imposing--
``(i) capital requirements; and
``(ii) both initial and variation margin
requirements on all swaps that are not cleared by
a registered derivatives clearing organization.
``(B) Swap dealers and major swap participants that
are not banks.--The Commission shall adopt rules for
swap dealers and major swap participants, with respect
to their activities as a swap dealer or major swap
participant, for which there is not a prudential
regulator imposing--
``(i) capital requirements; and
``(ii) both initial and variation margin
requirements on all swaps that are not cleared by
a registered derivatives clearing organization.
``(C) Capital.--In setting capital requirements for
a person that is designated as a swap dealer or a major
swap participant 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 and the other
activities conducted by that person that are not
otherwise subject to regulation applicable to that
person by virtue of the status of the person as a swap
dealer or a major swap participant.
``(3) Standards for capital and margin.--
``(A) In general.--To offset the greater risk to the
swap dealer or major swap participant and the financial
system arising from the use of swaps that are not
cleared, the requirements imposed under paragraph (2)
shall--
``(i) help ensure the safety and soundness of
the swap dealer or major swap participant; and
``(ii) be appropriate for the risk associated
with the non-cleared swaps held as a swap dealer
or major swap participant.
``(B) Rule of construction.--

[[Page 1706]]

``(i) In general.--Nothing in this section
shall limit, or be construed to limit, the
authority--
``(I) of the Commission to set
financial responsibility rules for a
futures commission merchant or
introducing broker registered pursuant
to section 4f(a) (except for section
4f(a)(3)) in accordance with section
4f(b); or
``(II) of the Securities and
Exchange Commission to set financial
responsibility rules for a broker or
dealer registered pursuant to section
15(b) of the Securities Exchange Act of
1934 (15 U.S.C. 78o(b)) (except for
section 15(b)(11) of that Act (15 U.S.C.
78o(b)(11)) in accordance with section
15(c)(3) of the Securities Exchange Act
of 1934 (15 U.S.C. 78o(c)(3)).
``(ii) Futures commission merchants and other
dealers.--A futures commission merchant,
introducing broker, broker, or dealer shall
maintain sufficient capital to comply with the
stricter of any applicable capital requirements to
which such futures commission merchant,
introducing broker, broker, or dealer is subject
to under this Act or the Securities Exchange Act
of 1934 (15 U.S.C. 78a et seq.).
``(C) Margin requirements.--In prescribing margin
requirements under this subsection, the prudential
regulator with respect to swap dealers and major swap
participants for which it is the prudential regulator
and the Commission with respect to swap dealers and
major swap participants for which there is no prudential
regulator shall permit the use of noncash collateral, as
the regulator or the Commission determines to be
consistent with--
``(i) preserving the financial integrity of
markets trading swaps; and
``(ii) preserving the stability of the United
States financial system.
``(D) Comparability of capital and margin
requirements.--
``(i) In general.--
The <>  prudential
regulators, the Commission, and the Securities and
Exchange Commission shall periodically (but not
less frequently than annually) consult on minimum
capital requirements and minimum initial and
variation margin requirements.
``(ii) Comparability.--The entities described
in clause (i) shall, to the maximum extent
practicable, establish and maintain comparable
minimum capital requirements and minimum initial
and variation margin requirements, including the
use of non cash collateral, for--
``(I) swap dealers; and
``(II) major swap participants.

``(f) Reporting and Recordkeeping.--
``(1) In general.--Each registered swap dealer and major
swap participant--

[[Page 1707]]

``(A) <>  shall make
such reports as are required by the Commission by rule
or regulation regarding the transactions and positions
and financial condition of the registered swap dealer or
major swap participant;
``(B)(i) for which there is a prudential regulator,
shall keep books and records of all activities related
to the business as a swap dealer or major swap
participant in such form and manner and for such period
as may be prescribed by the Commission by rule or
regulation; and
``(ii) for which there is no prudential regulator,
shall keep books and records in such form and manner and
for such period as may be prescribed by the Commission
by rule or regulation;
``(C) shall keep books and records described in
subparagraph (B) open to inspection and examination by
any representative of the Commission; and
``(D) shall keep any such books and records relating
to swaps defined in section 1a(47)(A)(v) open to
inspection and examination by the Securities and
Exchange Commission.
``(2) Rules.--The Commission shall adopt rules governing
reporting and recordkeeping for swap dealers and major swap
participants.

``(g) Daily Trading Records.--
``(1) In general.--Each registered swap dealer and major
swap participant shall maintain daily trading records of the
swaps of the registered swap dealer and major swap participant
and all related records (including related cash or forward
transactions) and recorded communications, including electronic
mail, instant messages, and recordings of telephone calls, for
such period as may be required by the Commission by rule or
regulation.
``(2) Information requirements.--The daily trading records
shall include such information as the Commission shall require
by rule or regulation.
``(3) Counterparty records.--Each registered swap dealer and
major swap participant shall maintain daily trading records for
each counterparty in a manner and form that is identifiable with
each swap transaction.
``(4) Audit trail.--Each registered swap dealer and major
swap participant shall maintain a complete audit trail for
conducting comprehensive and accurate trade reconstructions.
``(5) Rules.--The Commission shall adopt rules governing
daily trading records for swap dealers and major swap
participants.

``(h) Business Conduct Standards.--
``(1) In general.--Each registered swap dealer and major
swap participant shall conform with such business conduct
standards as prescribed in paragraph (3) and as may be
prescribed by the Commission by rule or regulation that relate
to--
``(A) fraud, manipulation, and other abusive
practices involving swaps (including swaps that are
offered but not entered into);
``(B) diligent supervision of the business of the
registered swap dealer and major swap participant;
``(C) adherence to all applicable position limits;
and

[[Page 1708]]

``(D) such other matters as the Commission
determines to be appropriate.
``(2) Responsibilities with respect to special entities.--
``(A) Advising special entities.--A swap dealer or
major swap participant that acts as an advisor to a
special entity regarding a swap shall comply with the
requirements of subparagraph (4) with respect to such
Special Entity.
``(B) Entering of swaps with respect to special
entities.--A <>  swap dealer that
enters into or offers to enter into swap with a Special
Entity shall comply with the requirements of
subparagraph (5) with respect to such Special Entity.
``(C) Special entity defined.--For purposes of this
subsection, the term `special entity' means--
``(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, including an endowment
that is an organization described in section
501(c)(3) of the Internal Revenue Code of 1986.
``(3) Business conduct requirements.--Business conduct
requirements adopted by the Commission shall--
``(A) establish a duty for a swap dealer or major
swap participant to verify that any counterparty meets
the eligibility standards for an eligible contract
participant;
``(B) require disclosure by the swap dealer or major
swap participant to any counterparty to the transaction
(other than a swap dealer, major swap participant,
security-based swap dealer, or major security-based swap
participant) of--
``(i) information about the material risks and
characteristics of the swap;
``(ii) any material incentives or conflicts of
interest that the swap dealer or major swap
participant may have in connection with the swap;
and
``(iii)(I) for cleared swaps, upon the request
of the counterparty, receipt of the daily mark of
the transaction from the appropriate derivatives
clearing organization; and
``(II) for uncleared swaps, receipt of the
daily mark of the transaction from the swap dealer
or the major swap participant;
``(C) establish a duty for a swap dealer or major
swap participant to communicate in a fair and balanced
manner based on principles of fair dealing and good
faith; and
``(D) establish such other standards and
requirements as the Commission may determine are
appropriate in the public interest, for the protection
of investors, or otherwise in furtherance of the
purposes of this Act.
``(4) Special requirements for swap dealers acting as
advisors.--

[[Page 1709]]

``(A) In general.--It shall be unlawful for a swap
dealer or major swap participant--
``(i) to employ any device, scheme, or
artifice to defraud any Special Entity or
prospective customer who is a Special Entity;
``(ii) to engage in any transaction, practice,
or course of business that operates as a fraud or
deceit on any Special Entity or prospective
customer who is a Special Entity; or
``(iii) to engage in any act, practice, or
course of business that is fraudulent, deceptive
or manipulative.
``(B) Duty.--Any swap dealer that acts as an advisor
to a Special Entity shall have a duty to act in the best
interests of the Special Entity.
``(C) Reasonable efforts.--Any swap dealer that acts
as an advisor to a Special Entity shall make reasonable
efforts to obtain such information as is necessary to
make a reasonable determination that any swap
recommended by the swap dealer is in the best interests
of the Special Entity, including information relating
to--
``(i) the financial status of the Special
Entity;
``(ii) the tax status of the Special Entity;
``(iii) the investment or financing objectives
of the Special Entity; and
``(iv) any other information that the
Commission may prescribe by rule or regulation.
``(5) Special requirements for swap dealers as
counterparties to special entities.--
``(A) Any swap dealer or major swap participant that
offers to enter or enters into a swap with a Special
Entity shall--
``(i) comply with any duty established by the
Commission for a swap dealer or major swap
participant, with respect to a counterparty that
is an eligible contract participant within the
meaning of subclause (I) or (II) of clause (vii)
of section 1a(18) of this Act, that requires the
swap dealer or major swap participant to have a
reasonable basis to believe that the counterparty
that is a Special Entity has an independent
representative that--
``(I) has sufficient knowledge to
evaluate the transaction and risks;
``(II) is not subject to a statutory
disqualification;
``(III) is independent of the swap
dealer or major swap participant;
``(IV) undertakes a duty to act in
the best interests of the counterparty
it represents;
``(V) makes appropriate disclosures;
``(VI) will provide written
representations to the Special Entity
regarding fair pricing and the
appropriateness of the transaction; and
``(VII) in the case of employee
benefit plans subject to the Employee
Retirement Income Security act of 1974,
is a fiduciary as defined in section 3
of that Act (29 U.S.C. 1002); and

[[Page 1710]]

``(ii) before the initiation of the
transaction, disclose to the Special Entity in
writing the capacity in which the swap dealer is
acting; and
``(B) the Commission may establish such other
standards and requirements as the Commission may
determine are appropriate in the public interest, for
the protection of investors, or otherwise in furtherance
of the purposes of this Act.
``(6) Rules.--The Commission shall prescribe rules under
this subsection governing business conduct standards for swap
dealers and major swap participants.
``(7) Applicability.--This section shall not apply with
respect to a transaction that is--
``(A) initiated by a Special Entity on an exchange
or swap execution facility; and
``(B) one in which the swap dealer or major swap
participant does not know the identity of the
counterparty to the transaction.

``(i) Documentation Standards.--
``(1) In general.--Each registered swap dealer and major
swap participant shall conform with such standards as may be
prescribed by the Commission by rule or regulation that relate
to timely and accurate confirmation, processing, netting,
documentation, and valuation of all swaps.
``(2) Rules.--The Commission shall adopt rules governing
documentation standards for swap dealers and major swap
participants.

``(j) Duties.--Each registered swap dealer and major swap
participant at all times shall comply with the following requirements:
``(1) Monitoring of trading.--The swap dealer or major swap
participant shall monitor its trading in swaps to prevent
violations of applicable position limits.
``(2) Risk management procedures.--The swap dealer or major
swap participant shall establish robust and professional risk
management systems adequate for managing the day-to-day business
of the swap dealer or major swap participant.
``(3) Disclosure of general information.--The swap dealer or
major swap participant shall disclose to the Commission and to
the prudential regulator for the swap dealer or major swap
participant, as applicable, information concerning--
``(A) terms and conditions of its swaps;
``(B) swap trading operations, mechanisms, and
practices;
``(C) financial integrity protections relating to
swaps; and
``(D) other information relevant to its trading in
swaps.
``(4) Ability to obtain information.--The swap dealer or
major swap participant shall--
``(A) establish and enforce internal systems and
procedures to obtain any necessary information to
perform any of the functions described in this section;
and
``(B) provide the information to the Commission and
to the prudential regulator for the swap dealer or major
swap participant, as applicable, on request.

[[Page 1711]]

``(5) Conflicts of interest.--The swap dealer and major swap
participant shall implement conflict-of-interest systems and
procedures that--
``(A) establish structural and institutional
safeguards to ensure that the activities of any person
within the firm relating to research or analysis of the
price or market for any commodity or swap or acting in a
role of providing clearing activities or making
determinations as to accepting clearing customers are
separated by appropriate informational partitions within
the firm from the review, pressure, or oversight of
persons whose involvement in pricing, trading, or
clearing activities might potentially bias their
judgment or supervision and contravene the core
principles of open access and the business conduct
standards described in this Act; and
``(B) address such other issues as the Commission
determines to be appropriate.
``(6) Antitrust considerations.--Unless necessary or
appropriate to achieve the purposes of this Act, a swap dealer
or major swap participant shall not--
``(A) adopt any process or take any action that
results in any unreasonable restraint of trade; or
``(B) impose any material anticompetitive burden on
trading or clearing.
``(7) Rules.--The Commission shall prescribe rules under
this subsection governing duties of swap dealers and major swap
participants.

``(k) Designation of Chief Compliance Officer.--
``(1) In general.--Each swap dealer and major swap
participant shall designate an individual to serve as a chief
compliance officer.
``(2) Duties.--The chief compliance officer shall--
``(A) report directly to the board or to the senior
officer of the swap dealer or major swap participant;
``(B) review the compliance of the swap dealer or
major swap participant with respect to the swap dealer
and major swap participant requirements described in
this section;
``(C) in consultation with the board of directors, a
body performing a function similar to the board, or the
senior officer of the organization, resolve any
conflicts of interest that may arise;
``(D) be responsible for administering each policy
and procedure that is required to be established
pursuant to this section;
``(E) ensure compliance with this Act (including
regulations) relating to swaps, including each rule
prescribed by the Commission under this section;
``(F) establish procedures for the remediation of
noncompliance issues identified by the chief compliance
officer through any--
``(i) compliance office review;
``(ii) look-back;
``(iii) internal or external audit finding;
``(iv) self-reported error; or
``(v) validated complaint; and

[[Page 1712]]

``(G) establish and follow appropriate procedures
for the handling, management response, remediation,
retesting, and closing of noncompliance issues.
``(3) Annual reports.--
``(A) In general.--In accordance with rules
prescribed by the Commission, the chief compliance
officer shall annually prepare and sign a report that
contains a description of--
``(i) the compliance of the swap dealer or
major swap participant with respect to this Act
(including regulations); and
``(ii) each policy and procedure of the swap
dealer or major swap participant of the chief
compliance officer (including the code of ethics
and conflict of interest policies).
``(B) Requirements.--A compliance report under
subparagraph (A) shall--
``(i) accompany each appropriate financial
report of the swap dealer or major swap
participant that is required to be furnished to
the Commission pursuant to this section; and
``(ii) <>  include a
certification that, under penalty of law, the
compliance report is accurate and complete.''.
SEC. 732. CONFLICTS OF INTEREST.

Section 4d of the Commodity Exchange Act (7 U.S.C. 6d) is amended--
(1) by redesignating subsection (c) as subsection (e); and
(2) by inserting after subsection (b) the following:

``(c) <>  Conflicts of Interest.--The Commission
shall require that futures commission merchants and introducing brokers
implement conflict-of-interest systems and procedures that--
``(1) establish structural and institutional safeguards to
ensure that the activities of any person within the firm
relating to research or analysis of the price or market for any
commodity are separated by appropriate informational partitions
within the firm from the review, pressure, or oversight of
persons whose involvement in trading or clearing activities
might potentially bias the judgment or supervision of the
persons; and
``(2) address such other issues as the Commission determines
to be appropriate.

``(d) <>  Designation of Chief Compliance
Officer.--Each futures commission merchant shall designate an individual
to serve as its Chief Compliance Officer and perform such duties and
responsibilities as shall be set forth in regulations to be adopted by
the Commission or rules to be adopted by a futures association
registered under section 17.''.
SEC. 733. SWAP EXECUTION FACILITIES.

The Commodity Exchange Act is amended by inserting after section 5g
(7 U.S.C. 7b-2) the following:
``SEC. 5h. <>  SWAP EXECUTION FACILITIES.

``(a) Registration.--
``(1) In general.--No person may operate a facility for the
trading or processing of swaps unless the facility is registered
as a swap execution facility or as a designated contract market
under this section.

[[Page 1713]]

``(2) Dual registration.--Any person that is registered as a
swap execution facility under this section shall register with
the Commission regardless of whether the person also is
registered with the Securities and Exchange Commission as a swap
execution facility.

``(b) Trading and Trade Processing.--
``(1) In general.--Except as specified in paragraph (2), a
swap execution facility that is registered under subsection (a)
may--
``(A) make available for trading any swap; and
``(B) facilitate trade processing of any swap.
``(2) Agricultural swaps.--A swap execution facility may not
list for trading or confirm the execution of any swap in an
agricultural commodity (as defined by the Commission) except
pursuant to a rule or regulation of the Commission allowing the
swap under such terms and conditions as the Commission shall
prescribe.

``(c) Identification of Facility Used To Trade Swaps by Contract
Markets.--A board of trade that operates a contract market shall, to the
extent that the board of trade also operates a swap execution facility
and uses the same electronic trade execution system for listing and
executing trades of swaps on or through the contract market and the swap
execution facility, identify whether the electronic trading of such
swaps is taking place on or through the contract market or the swap
execution facility.
``(d) Rule-writing.--
``(1) The Securities and Exchange Commission and Commodity
Futures Trading Commission may promulgate rules defining the
universe of swaps that can be executed on a swap execution
facility. These rules shall take into account the price and
nonprice requirements of the counterparties to a swap and the
goal of this section as set forth in subsection (e).
``(2) For all swaps that are not required to be executed
through a swap execution facility as defined in paragraph (1),
such trades may be executed through any other available means of
interstate commerce.
``(3) The Securities and Exchange Commission and Commodity
Futures Trading Commission shall update these rules as necessary
to account for technological and other innovation.

``(e) Rule of Construction.--The goal of this section is to promote
the trading of swaps on swap execution facilities and to promote pre-
trade price transparency in the swaps market.
``(f) <>  Core Principles for Swap Execution
Facilities.--
``(1) Compliance with core principles.--
``(A) In general.--To be registered, and maintain
registration, as a swap execution facility, the swap
execution facility shall comply with--
``(i) the core principles described in this
subsection; and
``(ii) any requirement that the Commission may
impose by rule or regulation pursuant to section
8a(5).
``(B) Reasonable discretion of swap execution
facility.--Unless otherwise determined by the Commission
by rule or regulation, a swap execution facility

[[Page 1714]]

described in subparagraph (A) shall have reasonable
discretion in establishing the manner in which the swap
execution facility complies with the core principles
described in this subsection.
``(2) Compliance with rules.--A swap execution facility
shall--
``(A) establish and enforce compliance with any rule
of the swap execution facility, including--
``(i) the terms and conditions of the swaps
traded or processed on or through the swap
execution facility; and
``(ii) any limitation on access to the swap
execution facility;
``(B) establish and enforce trading, trade
processing, and participation rules that will deter
abuses and have the capacity to detect, investigate, and
enforce those rules, including means--
``(i) to provide market participants with
impartial access to the market; and
``(ii) to capture information that may be used
in establishing whether rule violations have
occurred;
``(C) establish rules governing the operation of the
facility, including rules specifying trading procedures
to be used in entering and executing orders traded or
posted on the facility, including block trades; and
``(D) provide by its rules that when a swap dealer
or major swap participant enters into or facilitates a
swap that is subject to the mandatory clearing
requirement of section 2(h), the swap dealer or major
swap participant shall be responsible for compliance
with the mandatory trading requirement under section
2(h)(8).
``(3) Swaps not readily susceptible to manipulation.--The
swap execution facility shall permit trading only in swaps that
are not readily susceptible to manipulation.
``(4) Monitoring of trading and trade processing.--The swap
execution facility shall--
``(A) establish and enforce rules or terms and
conditions defining, or specifications detailing--
``(i) trading procedures to be used in
entering and executing orders traded on or through
the facilities of the swap execution facility; and
``(ii) procedures for trade processing of
swaps on or through the facilities of the swap
execution facility; and
``(B) monitor trading in swaps to prevent
manipulation, price distortion, and disruptions of the
delivery or cash settlement process through
surveillance, compliance, and disciplinary practices and
procedures, including methods for conducting real-time
monitoring of trading and comprehensive and accurate
trade reconstructions.
``(5) Ability to obtain information.--The swap execution
facility shall--
``(A) establish and enforce rules that will allow
the facility to obtain any necessary information to
perform any of the functions described in this section;
``(B) provide the information to the Commission on
request; and

[[Page 1715]]

``(C) have the capacity to carry out such
international information-sharing agreements as the
Commission may require.
``(6) Position limits or accountability.--
``(A) In general.--To reduce the potential threat of
market manipulation or congestion, especially during
trading in the delivery month, a swap execution facility
that is a trading facility shall adopt for each of the
contracts of the facility, as is necessary and
appropriate, position limitations or position
accountability for speculators.
``(B) <>  Position limits.--For
any contract that is subject to a position limitation
established by the Commission pursuant to section 4a(a),
the swap execution facility shall--
``(i) set its position limitation at a level
no higher than the Commission limitation; and
``(ii) monitor positions established on or
through the swap execution facility for compliance
with the limit set by the Commission and the
limit, if any, set by the swap execution facility.
``(7) <>  Financial integrity of
transactions.--The swap execution facility shall establish and
enforce rules and procedures for ensuring the financial
integrity of swaps entered on or through the facilities of the
swap execution facility, including the clearance and settlement
of the swaps pursuant to section 2(h)(1).
``(8) Emergency authority.--The swap execution facility
shall adopt rules to provide for the exercise of emergency
authority, in consultation or cooperation with the Commission,
as is necessary and appropriate, including the authority to
liquidate or transfer open positions in any swap or to suspend
or curtail trading in a swap.
``(9) Timely publication of trading information.--
``(A) <>  In general.--
The swap execution facility shall make public timely
information on price, trading volume, and other trading
data on swaps to the extent prescribed by the
Commission.
``(B) Capacity of swap execution facility.--The swap
execution facility shall be required to have the
capacity to electronically capture and transmit trade
information with respect to transactions executed on the
facility.
``(10) Recordkeeping and reporting.--
``(A) In general.--A swap execution facility shall--
``(i) <>  maintain records
of all activities relating to the business of the
facility, including a complete audit trail, in a
form and manner acceptable to the Commission for a
period of 5 years;
``(ii) report to the Commission, in a form and
manner acceptable to the Commission, such
information as the Commission determines to be
necessary or appropriate for the Commission to
perform the duties of the Commission under this
Act; and
``(iii) shall keep any such records relating
to swaps defined in section 1a(47)(A)(v) open to
inspection and examination by the Securities and
Exchange Commission.''

[[Page 1716]]

``(B) Requirements.--The Commission shall adopt data
collection and reporting requirements for swap execution
facilities that are comparable to corresponding
requirements for derivatives clearing organizations and
swap data repositories.
``(11) Antitrust considerations.--Unless necessary or
appropriate to achieve the purposes of this Act, the swap
execution facility shall not--
``(A) adopt any rules or taking any actions that
result in any unreasonable restraint of trade; or
``(B) impose any material anticompetitive burden on
trading or clearing.
``(12) Conflicts of interest.--The swap execution facility
shall--
``(A) establish and enforce rules to minimize
conflicts of interest in its decision-making process;
and
``(B) establish a process for resolving the
conflicts of interest.
``(13) Financial resources.--
``(A) In general.--The swap execution facility shall
have adequate financial, operational, and managerial
resources to discharge each responsibility of the swap
execution facility.
``(B <>  Determination of
resource adequacy.--The financial resources of a swap
execution facility shall be considered to be adequate if
the value of the financial resources exceeds the total
amount that would enable the swap execution facility to
cover the operating costs of the swap execution facility
for a 1-year period, as calculated on a rolling basis.
``(14) System safeguards.--The swap execution facility
shall--
``(A) establish and maintain a program of risk
analysis and oversight to identify and minimize sources
of operational risk, through the development of
appropriate controls and procedures, and automated
systems, that--
``(i) are reliable and secure; and
``(ii) have adequate scalable capacity;
``(B) establish and maintain emergency procedures,
backup facilities, and a plan for disaster recovery that
allow for--
``(i) the timely recovery and resumption of
operations; and
``(ii) the fulfillment of the responsibilities
and obligations of the swap execution facility;
and
``(C) periodically conduct tests to verify that the
backup resources of the swap execution facility are
sufficient to ensure continued--
``(i) order processing and trade matching;
``(ii) price reporting;
``(iii) market surveillance and
``(iv) maintenance of a comprehensive and
accurate audit trail.
``(15) Designation of chief compliance officer.--
``(A) In general.--Each swap execution facility
shall designate an individual to serve as a chief
compliance officer.

[[Page 1717]]

``(B) Duties.--The chief compliance officer shall--
``(i) report directly to the board or to the
senior officer of the facility;
``(ii) review compliance with the core
principles in this subsection;
``(iii) in consultation with the board of the
facility, a body performing a function similar to
that of a board, or the senior officer of the
facility, resolve any conflicts of interest that
may arise;
``(iv) be responsible for establishing and
administering the policies and procedures required
to be established pursuant to this section;
``(v) ensure compliance with this Act and the
rules and regulations issued under this Act,
including rules prescribed by the Commission
pursuant to this section; and
``(vi) establish procedures for the
remediation of noncompliance issues found during
compliance office reviews, look backs, internal or
external audit findings, self-reported errors, or
through validated complaints.
``(C) Requirements for procedures.--In establishing
procedures under subparagraph (B)(vi), the chief
compliance officer shall design the procedures to
establish the handling, management response,
remediation, retesting, and closing of noncompliance
issues.
``(D) Annual reports.--
``(i) In general.--In accordance with rules
prescribed by the Commission, the chief compliance
officer shall annually prepare and sign a report
that contains a description of--
``(I) the compliance of the swap
execution facility with this Act; and
``(II) the policies and procedures,
including the code of ethics and
conflict of interest policies, of the
swap execution facility.
``(ii) Requirements.--The chief compliance
officer shall--
``(I) submit each report described
in clause (i) with the appropriate
financial report of the swap execution
facility that is required to be
submitted to the Commission pursuant to
this section; and
``(II) <>
include in the report a certification
that, under penalty of law, the report
is accurate and complete.

``(g) Exemptions.--The Commission may exempt, conditionally or
unconditionally, a swap execution facility from registration under this
section if the Commission finds that the facility is subject to
comparable, comprehensive supervision and regulation on a consolidated
basis by the Securities and Exchange Commission, a prudential regulator,
or the appropriate governmental authorities in the home country of the
facility.
``(h) Rules.--The Commission shall prescribe rules governing the
regulation of alternative swap execution facilities under this
section.''.

[[Page 1718]]

SEC. 734. DERIVATIVES TRANSACTION EXECUTION FACILITIES AND EXEMPT
BOARDS OF TRADE.

(a) <>  In General.--Sections 5a and 5d of the
Commodity Exchange Act (7 U.S.C. 7a, 7a-3) are repealed.

(b) Conforming Amendments.--
(1) Section 2 of the Commodity Exchange Act (7 U.S.C. 2) is
amended--
(A) in subsection (a)(1)(A), in the first sentence,
by striking ``or 5a''; and
(B) in paragraph (2) of subsection (g) (as
redesignated by section 723(a)(1)(B)), by striking
``section 5a of this Act'' and all that follows through
``5d of this Act'' and inserting ``section 5b of this
Act''.
(2) Section 6(g)(1)(A) of the Securities Exchange Act of
1934 (15 U.S.C. 78f(g)(1)(A)) is amended--
(A) by striking ``that--'' and all that follows
through ``(i) has been designated'' and inserting ``that
has been designated'';
(B) by striking ``; or'' and inserting ``; and'' and
(C) by striking clause (ii).

(c) <>  Ability to Petition Commission.--
(1) In general.--Prior to the final effective dates in this
title, a person may petition the Commodity Futures Trading
Commission to remain subject to the provisions of section 5d of
the Commodity Exchange Act, as such provisions existed prior to
the effective date of this subtitle.
(2) Consideration of petition.--The Commodity Futures
Trading Commission shall consider any petition submitted under
paragraph (1) in a prompt manner and may allow a person to
continue operating subject to the provisions of section 5d of
the Commodity Exchange Act for up to 1 year after the effective
date of this subtitle.
SEC. 735. <>  DESIGNATED CONTRACT
MARKETS.

(a) Criteria for Designation.--Section 5 of the Commodity Exchange
Act (7 U.S.C. 7) is amended by striking subsection (b).
(b) Core Principles for Contract Markets.--Section 5 of the
Commodity Exchange Act (7 U.S.C. 7) is amended by striking subsection
(d) and inserting the following:
``(d) Core Principles for Contract Markets.--
``(1) Designation as contract market.--
``(A) In general.--To be designated, and maintain a
designation, as a contract market, a board of trade
shall comply with--
``(i) any core principle described in this
subsection; and
``(ii) any requirement that the Commission may
impose by rule or regulation pursuant to section
8a(5).
``(B) Reasonable discretion of contract market.--
Unless otherwise determined by the Commission by rule or
regulation, a board of trade described in subparagraph
(A) shall have reasonable discretion in establishing the
manner in which the board of trade complies with the
core principles described in this subsection.
``(2) Compliance with rules.--

[[Page 1719]]

``(A) In general.--The board of trade shall
establish, monitor, and enforce compliance with the
rules of the contract market, including--
``(i) access requirements;
``(ii) the terms and conditions of any
contracts to be traded on the contract market; and
``(iii) rules prohibiting abusive trade
practices on the contract market.
``(B) Capacity of contract market.--The board of
trade shall have the capacity to detect, investigate,
and apply appropriate sanctions to any person that
violates any rule of the contract market.
``(C) Requirement of rules.--The rules of the
contract market shall provide the board of trade with
the ability and authority to obtain any necessary
information to perform any function described in this
subsection, including the capacity to carry out such
international information-sharing agreements as the
Commission may require.
``(3) Contracts not readily subject to manipulation.--The
board of trade shall list on the contract market only contracts
that are not readily susceptible to manipulation.
``(4) Prevention of market disruption.--The board of trade
shall have the capacity and responsibility to prevent
manipulation, price distortion, and disruptions of the delivery
or cash-settlement process through market surveillance,
compliance, and enforcement practices and procedures,
including--
``(A) methods for conducting real-time monitoring of
trading; and
``(B) comprehensive and accurate trade
reconstructions.
``(5) Position limitations or accountability.--
``(A) In general.--To reduce the potential threat of
market manipulation or congestion (especially during
trading in the delivery month), the board of trade shall
adopt for each contract of the board of trade, as is
necessary and appropriate, position limitations or
position accountability for speculators.
``(B) Maximum allowable position limitation.--For
any contract that is subject to a position limitation
established by the Commission pursuant to section 4a(a),
the board of trade shall set the position limitation of
the board of trade at a level not higher than the
position limitation established by the Commission.
``(6) Emergency authority.--The board of trade, in
consultation or cooperation with the Commission, shall adopt
rules to provide for the exercise of emergency authority, as is
necessary and appropriate, including the authority--
``(A) to liquidate or transfer open positions in any
contract;
``(B) to suspend or curtail trading in any contract;
and
``(C) to require market participants in any contract
to meet special margin requirements.
``(7) Availability of general information.--The board of
trade shall make available to market authorities, market
participants, and the public accurate information concerning--
``(A) the terms and conditions of the contracts of
the contract market; and

[[Page 1720]]

``(B)(i) the rules, regulations, and mechanisms for
executing transactions on or through the facilities of
the contract market; and
``(ii) the rules and specifications describing the
operation of the contract market's--
``(I) electronic matching platform; or
``(II) trade execution facility.
``(8) <>  Daily publication of
trading information.--The board of trade shall make public daily
information on settlement prices, volume, open interest, and
opening and closing ranges for actively traded contracts on the
contract market.
``(9) Execution of transactions.--
``(A) In general.--The board of trade shall provide
a competitive, open, and efficient market and mechanism
for executing transactions that protects the price
discovery process of trading in the centralized market
of the board of trade.
``(B) Rules.--The rules of the board of trade may
authorize, for bona fide business purposes--
``(i) transfer trades or office trades;
``(ii) an exchange of--
``(I) futures in connection with a
cash commodity transaction;
``(II) futures for cash commodities;
or
``(III) futures for swaps; or
``(iii) a futures commission merchant, acting
as principal or agent, to enter into or confirm
the execution of a contract for the purchase or
sale of a commodity for future delivery if the
contract is reported, recorded, or cleared in
accordance with the rules of the contract market
or a derivatives clearing organization.
``(10) <>  Trade information.--The board of
trade shall maintain rules and procedures to provide for the
recording and safe storage of all identifying trade information
in a manner that enables the contract market to use the
information--
``(A) to assist in the prevention of customer and
market abuses; and
``(B) to provide evidence of any violations of the
rules of the contract market.
``(11) Financial integrity of transactions.--The board of
trade shall establish and enforce--
``(A) rules and procedures for ensuring the
financial integrity of transactions entered into on or
through the facilities of the contract market (including
the clearance and settlement of the transactions with a
derivatives clearing organization); and
``(B) rules to ensure--
``(i) the financial integrity of any--
``(I) futures commission merchant;
and
``(II) introducing broker; and
``(ii) the protection of customer funds.
``(12) Protection of markets and market participants.--The
board of trade shall establish and enforce rules--

[[Page 1721]]

``(A) to protect markets and market participants
from abusive practices committed by any party, including
abusive practices committed by a party acting as an
agent for a participant; and
``(B) to promote fair and equitable trading on the
contract market.
``(13) Disciplinary procedures.--The board of trade shall
establish and enforce disciplinary procedures that authorize the
board of trade to discipline, suspend, or expel members or
market participants that violate the rules of the board of
trade, or similar methods for performing the same functions,
including delegation of the functions to third parties.
``(14) Dispute resolution.--The board of trade shall
establish and enforce rules regarding, and provide facilities
for alternative dispute resolution as appropriate for, market
participants and any market intermediaries.
``(15) Governance fitness standards.--The board of trade
shall establish and enforce appropriate fitness standards for
directors, members of any disciplinary committee, members of the
contract market, and any other person with direct access to the
facility (including any party affiliated with any person
described in this paragraph).
``(16) Conflicts of interest.--The board of trade shall
establish and enforce rules--
``(A) to minimize conflicts of interest in the
decision-making process of the contract market; and
``(B) to establish a process for resolving conflicts
of interest described in subparagraph (A).
``(17) Composition of governing boards of contract
markets.--The governance arrangements of the board of trade
shall be designed to permit consideration of the views of market
participants.
``(18) Recordkeeping.--The board of trade shall maintain
records of all activities relating to the business of the
contract market--
``(A) in a form and manner that is acceptable to the
Commission; and
``(B) <>  for a period of at
least 5 years.
``(19) Antitrust considerations.--Unless necessary or
appropriate to achieve the purposes of this Act, the board of
trade shall not--
``(A) adopt any rule or taking any action that
results in any unreasonable restraint of trade; or
``(B) impose any material anticompetitive burden on
trading on the contract market.
``(20) System safeguards.--The board of trade shall--
``(A) establish and maintain a program of risk
analysis and oversight to identify and minimize sources
of operational risk, through the development of
appropriate controls and procedures, and the development
of automated systems, that are reliable, secure, and
have adequate scalable capacity;
``(B) establish and maintain emergency procedures,
backup facilities, and a plan for disaster recovery that
allow for the timely recovery and resumption of
operations and the fulfillment of the responsibilities
and obligations of the board of trade; and

[[Page 1722]]

``(C) periodically conduct tests to verify that
backup resources are sufficient to ensure continued
order processing and trade matching, price reporting,
market surveillance, and maintenance of a comprehensive
and accurate audit trail.
``(21) Financial resources.--
``(A) In general.--The board of trade shall have
adequate financial, operational, and managerial
resources to discharge each responsibility of the board
of trade.
``(B) Determination of adequacy.--The financial
resources of the board of trade shall be considered to
be adequate if the value of the financial resources
exceeds the total amount that would enable the contract
market to cover the operating costs of the contract
market for a 1-year period, as calculated on a rolling
basis.
``(22) Diversity of board of directors.--The board of trade,
if a publicly traded company, shall endeavor to recruit
individuals to serve on the board of directors and the other
decision-making bodies (as determined by the Commission) of the
board of trade from among, and to have the composition of the
bodies reflect, a broad and culturally diverse pool of qualified
candidates.
``(23) <>  Securities and exchange
commission.--The board of trade shall keep any such records
relating to swaps defined in section 1a(47)(A)(v) open to
inspection and examination by the Securities and Exchange
Commission.''.
SEC. 736. MARGIN.

Section 8a(7) of the Commodity Exchange Act (7 U.S.C. 12a(7)) is
amended--
(1) in subparagraph (C), by striking ``, excepting the
setting of levels of margin'';
(2) by redesignating subparagraphs (D) through (F) as
subparagraphs (E) through (G), respectively; and
(3) by inserting after subparagraph (C) the following:
``(D) margin requirements, provided that the rules,
regulations, or orders shall--
``(i) be limited to protecting the financial
integrity of the derivatives clearing
organization;
``(ii) be designed for risk management
purposes to protect the financial integrity of
transactions; and
``(iii) not set specific margin amounts;''.
SEC. 737. POSITION LIMITS.

(a) Aggregate Position Limits.--Section 4a(a) of the Commodity
Exchange Act (7 U.S.C. 6a(a)) is amended--
(1) by inserting after ``(a)'' the following:
``(1) In general.--'';
(2) in the first sentence, by striking ``on electronic
trading facilities with respect to a significant price discovery
contract'' and inserting ``swaps that perform or affect a
significant price discovery function with respect to registered
entities'';
(3) in the second sentence--
(A) by inserting ``, including any group or class of
traders,'' after ``held by any person''; and
(B) by striking ``on an electronic trading facility
with respect to a significant price discovery
contract,'' and inserting ``swaps traded on or subject
to the rules of a

[[Page 1723]]

designated contract market or a swap execution facility,
or swaps not traded on or subject to the rules of a
designated contract market or a swap execution facility
that performs a significant price discovery function
with respect to a registered entity,''; and
(4) by adding at the end the following:
``(2) Establishment of limitations.--
``(A) <>  In
general.--In accordance with the standards set forth in
paragraph (1) of this subsection and consistent with the
good faith exception cited in subsection (b)(2), with
respect to physical commodities other than excluded
commodities as defined by the Commission, the Commission
shall by rule, regulation, or order establish limits on
the amount of positions, as appropriate, other than bona
fide hedge positions, that may be held by any person
with respect to contracts of sale for future delivery or
with respect to options on the contracts or commodities
traded on or subject to the rules of a designated
contract market.
``(B) Timing.--
``(i) Exempt commodities.--For exempt
commodities, the limits required under
subparagraph (A) shall be established within 180
days after the date of the enactment of this
paragraph.
``(ii) Agricultural commodities.--For
agricultural commodities, the limits required
under subparagraph (A) shall be established within
270 days after the date of the enactment of this
paragraph.
``(C) Goal.--In establishing the limits required
under subparagraph (A), the Commission shall strive to
ensure that trading on foreign boards of trade in the
same commodity will be subject to comparable limits and
that any limits to be imposed by the Commission will not
cause price discovery in the commodity to shift to
trading on the foreign boards of trade.
``(3) Specific limitations.--In establishing the limits
required in paragraph (2), the Commission, as appropriate, shall
set limits--
``(A) on the number of positions that may be held by
any person for the spot month, each other month, and the
aggregate number of positions that may be held by any
person for all months; and
``(B) to the maximum extent practicable, in its
discretion--
``(i) to diminish, eliminate, or prevent
excessive speculation as described under this
section;
``(ii) to deter and prevent market
manipulation, squeezes, and corners;
``(iii) to ensure sufficient market liquidity
for bona fide hedgers; and
``(iv) to ensure that the price discovery
function of the underlying market is not
disrupted.
``(4) Significant price discovery function.--In making a
determination whether a swap performs or affects a significant
price discovery function with respect to regulated markets, the
Commission shall consider, as appropriate:

[[Page 1724]]

``(A) Price linkage.--The extent to which the swap
uses or otherwise relies on a daily or final settlement
price, or other major price parameter, of another
contract traded on a regulated market based upon the
same underlying commodity, to value a position, transfer
or convert a position, financially settle a position, or
close out a position.
``(B) Arbitrage.--The extent to which the price for
the swap is sufficiently related to the price of another
contract traded on a regulated market based upon the
same underlying commodity so as to permit market
participants to effectively arbitrage between the
markets by simultaneously maintaining positions or
executing trades in the swaps on a frequent and
recurring basis.
``(C) Material price reference.--The extent to
which, on a frequent and recurring basis, bids, offers,
or transactions in a contract traded on a regulated
market are directly based on, or are determined by
referencing, the price generated by the swap.
``(D) Material liquidity.--The extent to which the
volume of swaps being traded in the commodity is
sufficient to have a material effect on another contract
traded on a regulated market.
``(E) Other material factors.--Such other material
factors as the Commission specifies by rule or
regulation as relevant to determine whether a swap
serves a significant price discovery function with
respect to a regulated market.
``(5) Economically equivalent contracts.--
``(A) Notwithstanding any other provision of this
section, the Commission shall establish limits on the
amount of positions, including aggregate position
limits, as appropriate, other than bona fide hedge
positions, that may be held by any person with respect
to swaps that are economically equivalent to contracts
of sale for future delivery or to options on the
contracts or commodities traded on or subject to the
rules of a designated contract market subject to
paragraph (2).
``(B) In establishing limits pursuant to
subparagraph (A), the Commission shall--
``(i) develop the limits concurrently with
limits established under paragraph (2), and the
limits shall have similar requirements as under
paragraph (3)(B); and
``(ii) establish the limits simultaneously
with limits established under paragraph (2).
``(6) <>  Aggregate position limits.--The
Commission shall, by rule or regulation, establish limits
(including related hedge exemption provisions) on the aggregate
number or amount of positions in contracts based upon the same
underlying commodity (as defined by the Commission) that may be
held by any person, including any group or class of traders, for
each month across--
``(A) contracts listed by designated contract
markets;
``(B) 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

[[Page 1725]]

for trading on a registered entity, contracts traded on
a foreign board of trade that provides members or other
participants located in the United States with direct
access to its electronic trading and order matching
system; and
``(C) swap contracts that perform or affect a
significant price discovery function with respect to
regulated entities.
``(7) Exemptions.--The Commission, by rule, regulation, or
order, may exempt, conditionally or unconditionally, any person
or class of persons, any swap or class of swaps, any contract of
sale of a commodity for future delivery or class of such
contracts, any option or class of options, or any transaction or
class of transactions from any requirement it may establish
under this section with respect to position limits.''.

(b) Conforming Amendments.--Section 4a(b) of the Commodity Exchange
Act (7 U.S.C. 6a(b)) is amended--
(1) in paragraph (1), by striking ``or derivatives
transaction execution facility or facilities or electronic
trading facility'' and inserting ``or swap execution facility or
facilities''; and
(2) in paragraph (2), by striking ``or derivatives
transaction execution facility or facilities or electronic
trading facility'' and inserting ``or swap execution facility''.

(c) Bona Fide Hedging Transaction.--Section 4a(c) of the Commodity
Exchange Act is amended--
(1) by inserting ``(1)'' after ``(c)''; and
(2) by adding at the end the following:
``(2) <>  For the purposes of
implementation of subsection (a)(2) for contracts of sale for
future delivery or options on the contracts or commodities, the
Commission shall define what constitutes a bona fide hedging
transaction or position as a transaction or position that--
``(A)(i) represents a substitute for transactions
made or to be made or positions taken or to be taken at
a later time in a physical marketing channel;
``(ii) is economically appropriate to the reduction
of risks in the conduct and management of a commercial
enterprise; and
``(iii) arises from the potential change in the
value of--
``(I) assets that a person owns, produces,
manufactures, processes, or merchandises or
anticipates owning, producing, manufacturing,
processing, or merchandising;
``(II) liabilities that a person owns or
anticipates incurring; or
``(III) services that a person provides,
purchases, or anticipates providing or purchasing;
or
``(B) reduces risks attendant to a position
resulting from a swap that--
``(i) was executed opposite a counterparty for
which the transaction would qualify as a bona fide
hedging transaction pursuant to subparagraph (A);
or
``(ii) meets the requirements of subparagraph
(A).''.

(d) <>  Effective Date.--This section and the
amendments made by this section shall become effective on the date of
the enactment of this section.

[[Page 1726]]

SEC. 738. FOREIGN BOARDS OF TRADE.

(a) In General.--Section 4(b) of the Commodity Exchange Act (7
U.S.C. 6(b)) is amended--
(1) in the first sentence, by striking ``The Commission''
and inserting the following:
``(2) Persons located in the united states.--
``(A) In general.--The Commission'';
(2) in the second sentence, by striking ``Such rules and
regulations'' and inserting the following:
``(B) Different requirements.--Rules and regulations
described in subparagraph (A)'';
(3) in the third sentence--
(A) by striking ``No rule or regulation'' and
inserting the following:
``(C) Prohibition.--Except as provided in paragraphs
(1) and (2), no rule or regulation'';
(B) by striking ``that (1) requires'' and inserting
the following: ``that--
``(i) requires''; and
(C) by striking ``market, or (2) governs'' and
inserting the following: ``market; or
``(ii) governs''; and
(4) by inserting before paragraph (2) (as designated by
paragraph (1)) the following:
``(1) Foreign boards of trade.--
``(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. In adopting such rules and regulations,
the commission shall consider--
``(i) whether any such foreign board of trade
is subject to comparable, comprehensive
supervision and regulation by the appropriate
governmental authorities in the foreign board of
trade's home country; and
``(ii) any previous commission findings that
the foreign board of trade is subject to
comparable comprehensive supervision and
regulation by the appropriate government
authorities in the foreign board of trade's home
country.
``(B) Linked contracts.--The Commission may not
permit 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

[[Page 1727]]

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

[[Page 1728]]

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.--
``(1) In general.--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--
``(A) 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 is--
``(i) legally organized under the laws of a
foreign country;
``(ii) authorized to act as a board of trade
by a foreign futures authority; and
``(iii) subject to regulation by the foreign
futures authority; and
``(B) has not been determined by the Commission to
be operating in violation of subsection (a).
``(2) Rule of construction.--Nothing in this subsection
shall be construed as implying or creating any presumption that
a board of trade, exchange, or market is located outside the
United States, or its territories or possessions, for purposes
of subsection (a).''.

(c) Contract Enforcement for Foreign Futures Contracts.--Section
22(a) of the Commodity Exchange Act (7 U.S.C. 25(a)) (as amended by
section 739) is amended by adding at the end the following:
``(6) Contract Enforcement for Foreign Futures Contracts.--A
contract of sale of a commodity for future delivery traded or executed
on or through the facilities of a board of trade, exchange, or market
located outside the United States for purposes of section 4(a) shall not
be void, voidable, or unenforceable, and a party to such a contract
shall not be entitled to rescind or recover any payment made with
respect to the contract, based on the failure of the foreign board of
trade to comply with any provision of this Act.''.

[[Page 1729]]

SEC. 739. LEGAL CERTAINTY FOR SWAPS.

Section 22(a) of the Commodity Exchange Act (7 U.S.C. 25(a)) is
amended by striking paragraph (4) and inserting the following:
``(4) Contract Enforcement Between Eligible Counterparties.--
``(A) In general.--No hybrid instrument sold to any investor
shall be void, voidable, or unenforceable, and no party to a
hybrid instrument shall be entitled to rescind, or recover any
payment made with respect to, the hybrid instrument under this
section or any other provision of Federal or State law, based
solely on the failure of the hybrid instrument to comply with
the terms or conditions of section 2(f) or regulations of the
Commission.
``(B) Swaps.--No agreement, contract, or transaction between
eligible contract participants or persons reasonably believed to
be eligible contract participants shall be void, voidable, or
unenforceable, and no party to such agreement, contract, or
transaction shall be entitled to rescind, or recover any payment
made with respect to, the agreement, contract, or transaction
under this section or any other provision of Federal or State
law, based solely on the failure of the agreement, contract, or
transaction--
``(i) to meet the definition of a swap under section
1a; or
``(ii) to be cleared in accordance with section
2(h)(1).

``(5) Legal Certainty for Long-term Swaps Entered Into Before the
Date of Enactment of the Wall Street Transparency and Accountability Act
of 2010.--
``(A) Effect on swaps.--Unless specifically reserved in the
applicable swap, neither the enactment of the Wall Street
Transparency and Accountability Act of 2010, nor any requirement
under that Act or an amendment made by that Act, shall
constitute a termination event, force majeure, illegality,
increased costs, regulatory change, or similar event under a
swap (including any related credit support arrangement) that
would permit a party to terminate, renegotiate, modify, amend,
or supplement 1 or more transactions under the swap.
``(B) Position limits.--Any position limit established under
the Wall Street Transparency and Accountability Act of 2010
shall not apply to a position acquired in good faith prior to
the effective date of any rule, regulation, or order under the
Act that establishes the position limit; provided, however, that
such positions shall be attributed to the trader if the trader's
position is increased after the effective date of such position
limit rule, regulation, or order.''.
SEC. 740. MULTILATERAL CLEARING ORGANIZATIONS.

Sections <>  408 and 409 of the Federal Deposit
Insurance Corporation Improvement Act of 1991 (12 U.S.C. 4421, 4422) are
repealed.
SEC. 741. ENFORCEMENT.

(a) Enforcement Authority.--The Commodity Exchange Act is amended by
inserting after section 4b (7 U.S.C. 6b) the following:
``SEC. 4b-1. <> ENFORCEMENT AUTHORITY.

``(a) Commodity Futures Trading Commission.--Except as provided in
subsections (b), (c), and (d), the Commission shall have exclusive
authority to enforce the provisions of subtitle A of the

[[Page 1730]]

Wall Street Transparency and Accountability Act of 2010 with respect to
any person.
``(b) Prudential Regulators.--The prudential regulators shall have
exclusive authority to enforce the provisions of section 4s(e) with
respect to swap dealers or major swap participants for which they are
the prudential regulator.
``(c) Referrals.--
``(1) Prudential regulators.--If the prudential regulator
for a swap dealer or major swap participant has cause to believe
that the swap dealer or major swap participant, or any affiliate
or division of the swap dealer or major swap participant, may
have engaged in conduct that constitutes a violation of the
nonprudential requirements of this Act (including section 4s or
rules adopted by the Commission under that section), the
prudential regulator may promptly notify the Commission in a
written report that includes--
``(A) a request that the Commission initiate an
enforcement proceeding under this Act; and
``(B) an explanation of the facts and circumstances
that led to the preparation of the written report.
``(2) Commission.--If the Commission has cause to believe
that a swap dealer or major swap participant that has a
prudential regulator may have engaged in conduct that
constitutes a violation of any prudential requirement of section
4s or rules adopted by the Commission under that section, the
Commission may notify the prudential regulator of the conduct in
a written report that includes--
``(A) a request that the prudential regulator
initiate an enforcement proceeding under this Act or any
other Federal law (including regulations); and
``(B) an explanation of the concerns of the
Commission, and a description of the facts and
circumstances, that led to the preparation of the
written report.

``(d) <>  Backstop Enforcement Authority.--
``(1) Initiation of enforcement proceeding by prudential
regulator.--If the Commission does not initiate an enforcement
proceeding before the end of the 90-day period beginning on the
date on which the Commission receives a written report under
subsection (c)(1), the prudential regulator may initiate an
enforcement proceeding.
``(2) Initiation of enforcement proceeding by commission.--
If the prudential regulator does not initiate an enforcement
proceeding before the end of the 90-day period beginning on the
date on which the prudential regulator receives a written report
under subsection (c)(2), the Commission may initiate an
enforcement proceeding.''.

(b) Conforming Amendments.--
(1) Section 4b of the Commodity Exchange Act (7 U.S.C. 6b)
is amended--
(A) in subsection (a)(2), by striking ``or other
agreement, contract, or transaction subject to
paragraphs (1) and (2) of section 5a(g),'' and inserting
``or swap,'';
(B) in subsection (b), by striking ``or other
agreement, contract or transaction subject to paragraphs
(1) and (2) of section 5a(g),'' and inserting ``or
swap,''; and
(C) by adding at the end the following:

[[Page 1731]]

``(e) It shall be unlawful for any person, directly or indirectly,
by the use of any means or instrumentality of interstate commerce, or of
the mails, or of any facility of any registered entity, in or in
connection with any order to make, or the making of, any contract of
sale of any commodity for future delivery (or option on such a
contract), or any swap, on a group or index of securities (or any
interest therein or based on the value thereof)--
``(1) to employ any device, scheme, or artifice to defraud;
``(2) to make any untrue statement of a material fact or to
omit to state a material fact necessary in order to make the
statements made, in the light of the circumstances under which
they were made, not misleading; or
``(3) to engage in any act, practice, or course of business
which operates or would operate as a fraud or deceit upon any
person.''.
(2) Section 4c(a)(1) of the Commodity Exchange Act (7 U.S.C.
6c(a)(1)) is amended by inserting ``or swap'' before ``if the
transaction is used or may be used''.
(3) Section 6(c) of the Commodity Exchange Act (7 U.S.C. 9)
is amended in the first sentence by inserting ``or of any
swap,'' before ``or has willfully made''.
(4) Section 6(d) of the Commodity Exchange Act (7 U.S.C.
13b) is amended in the first sentence, in the matter preceding
the proviso, by inserting ``or of any swap,'' before ``or
otherwise is violating''.
(5) Section 6c(a) of the Commodity Exchange Act (7 U.S.C.
13a-1(a)) is amended in the matter preceding the proviso by
inserting ``or any swap'' after ``commodity for future
delivery''.
(6) Section 9 of the Commodity Exchange Act (7 U.S.C. 13) is
amended--
(A) in subsection (a)--
(i) in paragraph (2), by inserting ``or of any
swap,'' before ``or to corner''; and
(ii) in paragraph (4), by inserting ``swap
data repository,'' before ``or futures
association'' and
(B) in subsection (e)(1)--
(i) by inserting ``swap data repository,''
before ``or registered futures association''; and
(ii) by inserting ``, or swaps,'' before ``on
the basis''.
(7) Section 9(a) of the Commodity Exchange Act (7 U.S.C.
13(a)) is amended by adding at the end the following:
``(6) Any person to abuse the end user clearing exemption
under section 2(h)(4), as determined by the Commission.''.
(8) Section 2(c)(2)(B) of the Commodity Exchange Act (7
U.S.C. 2(c)(2)(B)) is amended--
(A) by striking ``(dd),'' each place it appears;
(B) in clause (iii), by inserting ``, and accounts
or pooled investment vehicles described in clause
(vi),'' before ``shall be subject to''; and
(C) by adding at the end the following:
``(vi) <>  This Act
applies to, and the Commission shall have
jurisdiction over, an account or pooled investment
vehicle that is offered for the purpose of
trading, or that trades, any agreement, contract,
or transaction in foreign currency described in
clause (i).''.
(9) Section 2(c)(2)(C) of the Commodity Exchange Act (7
U.S.C. 2(c)(2)(C)) is amended--

[[Page 1732]]

(A) by striking ``(dd),'' each place it appears;
(B) in clause (ii)(I), by inserting ``, and accounts
or pooled investment vehicles described in clause
(vii),'' before ``shall be subject to''; and
(C) by adding at the end the following:
``(vii) <>  This Act
applies to, and the Commission shall have
jurisdiction over, an account or pooled investment
vehicle that is offered for the purpose of
trading, or that trades, any agreement, contract,
or transaction in foreign currency described in
clause (i).''.
(10) Section 1a(19)(A)(iv)(II) of the Commodity Exchange Act
(7 U.S.C. 1a(19)(A)(iv)(II)) (as redesignated by section
721(a)(1)) is amended by inserting before the semicolon at the
end the following: ``provided, however, that for purposes of
section 2(c)(2)(B)(vi) and section 2(c)(2)(C)(vii), the term
`eligible contract participant' shall not include a commodity
pool in which any participant is not otherwise an eligible
contract participant''.
(11) Section 6(e) of the Commodity Exchange Act (7 U.S.C.
9a) is amended by adding at the end the following:
``(4) <>  Any designated clearing
organization that knowingly or recklessly evades or participates
in or facilitates an evasion of the requirements of section 2(h)
shall be liable for a civil money penalty in twice the amount
otherwise available for a violation of section 2(h).
``(5) <>  Any swap dealer or major swap
participant that knowingly or recklessly evades or participates
in or facilitates an evasion of the requirements of section 2(h)
shall be liable for a civil money penalty in twice the amount
otherwise available for a violation of section 2(h).''.

(c) <>  Savings Clause.--Notwithstanding any
other provision of this title, nothing in this subtitle shall be
construed as divesting any appropriate Federal banking agency of any
authority it may have to establish or enforce, with respect to a person
for which such agency is the appropriate Federal banking agency,
prudential or other standards pursuant to authority granted by Federal
law other than this title.
SEC. 742. RETAIL COMMODITY TRANSACTIONS.

(a) In General.--Section 2(c) of the Commodity Exchange Act (7
U.S.C. 2(c)) is amended--
(1) in paragraph (1), by striking ``5a (to the extent
provided in section 5a(g)), 5b, 5d, or 12(e)(2)(B))'' and
inserting ``, 5b, or 12(e)(2)(B))''; and
(2) in paragraph (2), by adding at the end the following:
``(D) <>  Retail commodity
transactions.--
``(i) Applicability.--Except as provided in
clause (ii), this subparagraph shall apply to any
agreement, contract, or transaction in any
commodity that is--
``(I) entered into with, or offered
to (even if not entered into with), a
person that is not an eligible contract
participant or eligible commercial
entity; and
``(II) entered into, or offered
(even if not entered into), on a
leveraged or margined basis, or financed
by the offeror, the counterparty, or

[[Page 1733]]

a person acting in concert with the
offeror or counterparty on a similar
basis.
``(ii) Exceptions.--This subparagraph shall
not apply to--
``(I) an agreement, contract, or
transaction described in paragraph (1)
or subparagraphs (A), (B), or (C),
including any agreement, contract, or
transaction specifically excluded from
subparagraph (A), (B), or (C);
``(II) any security;
``(III) a contract of sale that--
``(aa) results in actual
delivery within 28 days or such
other longer period as the
Commission may determine by rule
or regulation based upon the
typical commercial practice in
cash or spot markets for the
commodity involved; or
``(bb) creates an
enforceable obligation to
deliver between a seller and a
buyer that have the ability to
deliver and accept delivery,
respectively, in connection with
the line of business of the
seller and buyer; or
``(IV) an agreement, contract, or
transaction that is listed on a national
securities exchange registered under
section 6(a) of the Securities Exchange
Act of 1934 (15 U.S.C. 78f(a)); or
``(V) an identified banking product,
as defined in section 402(b) of the
Legal Certainty for Bank Products Act of
2000 (7 U.S.C.27(b)).
``(iii) <>
Enforcement.--Sections 4(a), 4(b), and 4b apply to
any agreement, contract, or transaction described
in clause (i), as if the agreement, contract, or
transaction was a contract of sale of a commodity
for future delivery.
``(iv) Eligible commercial entity.--For
purposes of this subparagraph, an agricultural
producer, packer, or handler shall be considered
to be an eligible commercial entity for any
agreement, contract, or transaction for a
commodity in connection with the line of business
of the agricultural producer, packer, or
handler.''.

(b) Gramm-Leach-Bliley Act.--Section 206(a) of the Gramm-Leach-
Bliley Act (Public Law 106-102; 15 U.S.C. 78c note) is amended, in the
matter preceding paragraph (1), by striking ``For purposes of'' and
inserting ``Except as provided in subsection (e), for purposes of''.
(c) Conforming Amendments Relating to Retail Foreign Exchange
Transactions.--
(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 (aa), by inserting ``United States''
before ``financial institution'';
(B) by striking items (dd) and (ff);
(C) by redesignating items (ee) and (gg) as items
(dd) and (ff), respectively; and
(D) in item (dd) (as so redesignated), by striking
the semicolon and inserting ``; or''.

[[Page 1734]]

(2) Section 2(c)(2) of the Commodity Exchange Act (7 U.S.C.
2(c)(2)) (as amended by subsection (a)(2)) is amended by adding
at the end the following:
``(E) Prohibition.--
``(i) Definition of federal regulatory
agency.--In this subparagraph, the term `Federal
regulatory agency' means--
``(I) the Commission;
``(II) the Securities and Exchange
Commission;
``(III) an appropriate Federal
banking agency;
``(IV) the National Credit Union
Association; and
``(V) the Farm Credit
Administration.
``(ii) <>  Prohibition.--
``(I) In general.--Except as
provided in subclause (II), a person
described in subparagraph (B)(i)(II) for
which there is a Federal regulatory
agency shall not offer to, or enter into
with, a person that is not an eligible
contract participant, any agreement,
contract, or transaction in foreign
currency described in subparagraph
(B)(i)(I) except pursuant to a rule or
regulation of a Federal regulatory
agency allowing the agreement, contract,
or transaction under such terms and
conditions as the Federal regulatory
agency shall prescribe.
``(II) Effective date.--With regard
to persons described in subparagraph
(B)(i)(II) for which a Federal
regulatory agency has issued a proposed
rule concerning agreements, contracts,
or transactions in foreign currency
described in subparagraph (B)(i)(I)
prior to the date of enactment of this
subclause, subclause (I) shall take
effect 90 days after the date of
enactment of this subclause.
``(iii) Requirements of rules and
regulations.--
``(I) In general.--The rules and
regulations described in clause (ii)
shall prescribe appropriate requirements
with respect to--
``(aa) disclosure;
``(bb) recordkeeping;
``(cc) capital and margin;
``(dd) reporting;
``(ee) business conduct;
``(ff) documentation; and

``(gg) <>
such other standards or
requirements as the Federal
regulatory agency shall
determine to be necessary.
``(II) Treatment.--The rules or
regulations described in clause (ii)
shall treat all agreements, contracts,
and transactions in foreign currency
described in subparagraph (B)(i)(I), and
all agreements, contracts, and
transactions in foreign currency that
are functionally or economically similar
to agreements, contracts, or
transactions described in subparagraph
(B)(i)(I), similarly.''.

[[Page 1735]]

SEC. <>  743. OTHER AUTHORITY.

Unless otherwise provided by the amendments made by this subtitle,
the amendments made by this subtitle do not divest any appropriate
Federal banking agency, the Commodity Futures Trading Commission, the
Securities and Exchange Commission, or other Federal or State agency of
any authority derived from any other applicable law.
SEC. 744. RESTITUTION REMEDIES.

Section 6c(d) of the Commodity Exchange Act (7 U.S.C. 13a-1(d)) is
amended by adding at the end the following:
``(3) Equitable remedies.--In any action brought under this
section, the Commission may seek, and the court may impose, on a
proper showing, on any person found in the action to have
committed any violation, equitable remedies including--
``(A) restitution to persons who have sustained
losses proximately caused by such violation (in the
amount of such losses); and
``(B) disgorgement of gains received in connection
with such violation.''.
SEC. 745. ENHANCED COMPLIANCE BY REGISTERED ENTITIES.

(a) Effect of Interpretation.--Section 5c(a) of the Commodity
Exchange Act (7 U.S.C. 7a-2(a)) is amended by striking paragraph (2) and
inserting the following:
``(2) Effect of interpretation.--An interpretation issued
under paragraph (1) may provide the exclusive means for
complying with each section described in paragraph (1).''.

(b) New Contracts, New Rules, and Rule Amendments.--Section 5c of
the Commodity Exchange Act (7 U.S.C. 7a-2) is amended by striking
subsection (c) and inserting the following:
``(c) <>  New Contracts, New Rules, and Rule
Amendments.--
``(1) In general.--A registered entity may elect to list for
trading or accept for clearing any new contract, or other
instrument, or may elect to approve and implement any new rule
or rule amendment, by providing to the Commission (and the
Secretary of the Treasury, in the case of a contract of sale of
a government security for future delivery (or option on such a
contract) or a rule or rule amendment specifically related to
such a contract) a written certification that the new contract
or instrument or clearing of the new contract or instrument, new
rule, or rule amendment complies with this Act (including
regulations under this Act).
``(2) Rule review.--The new rule or rule amendment described
in paragraph (1) <>  shall become effective,
pursuant to the certification of the registered entity and
notice of such certification to its members (in a manner to be
determined by the Commission), on the date that is 10 business
days after the date on which the Commission receives the
certification (or such shorter period as determined by the
Commission by rule or regulation) unless the Commission notifies
the registered entity within such time that it is staying the
certification because there exist novel or complex issues that
require additional time to analyze, an inadequate explanation by
the submitting registered entity, or a potential inconsistency
with this Act (including regulations under this Act).

[[Page 1736]]

``(3) <>  Stay of
certification for rules.--
``(A) A notification by the Commission pursuant to
paragraph (2) shall stay the certification of the new
rule or rule amendment for up to an additional 90 days
from the date of the notification.
``(B) <>  A rule or rule
amendment subject to a stay pursuant to subparagraph (A)
shall become effective, pursuant to the certification of
the registered entity, at the expiration of the period
described in subparagraph (A) unless the Commission--
``(i) withdraws the stay prior to that time;
or
``(ii) notifies the registered entity during
such period that it objects to the proposed
certification on the grounds that it is
inconsistent with this Act (including regulations
under this Act).
``(C) <>  The Commission
shall provide a not less than 30-day public comment
period, within the 90-day period in which the stay is in
effect as described in subparagraph (A), whenever the
Commission reviews a rule or rule amendment pursuant to
a notification by the Commission under this paragraph.
``(4) Prior approval.--
``(A) In general.--A registered entity may request
that the Commission grant prior approval to any new
contract or other instrument, new rule, or rule
amendment.
``(B) Prior approval required.--Notwithstanding any
other provision of this section, a designated contract
market shall submit to the Commission for prior approval
each rule amendment that materially changes the terms
and conditions, as determined by the Commission, in any
contract of sale for future delivery of a commodity
specifically enumerated in section 1a(10) (or any option
thereon) traded through its facilities if the rule
amendment applies to contracts and delivery months which
have already been listed for trading and have open
interest.
``(C) Deadline.--If prior approval is requested
under subparagraph (A), the Commission shall take final
action on the request not later than 90 days after
submission of the request, unless the person submitting
the request agrees to an extension of the time
limitation established under this subparagraph.
``(5) Approval.--
``(A) Rules.--The Commission shall approve a new
rule, or rule amendment, of a registered entity unless
the Commission finds that the new rule, or rule
amendment, is inconsistent with this subtitle (including
regulations).
``(B) Contracts and instruments.--The Commission
shall approve a new contract or other instrument unless
the Commission finds that the new contract or other
instrument would violate this Act (including
regulations).
``(C) Special rule for review and approval of event
contracts and swaps contracts.--
``(i) Event contracts.--In connection with the
listing of agreements, contracts, transactions, or
swaps in excluded commodities that are based upon
the occurrence, extent of an occurrence, or
contingency (other than a change in the price,
rate, value, or levels of

[[Page 1737]]

a commodity described in section 1a(2)(i)), by a
designated contract market or swap execution
facility, the Commission may determine that such
agreements, contracts, or transactions are
contrary to the public interest if the agreements,
contracts, or transactions involve--
``(I) activity that is unlawful
under any Federal or State law;
``(II) terrorism;
``(III) assassination;
``(IV) war;
``(V) gaming; or
``(VI) other similar activity
determined by the Commission, by rule or
regulation, to be contrary to the public
interest.
``(ii) Prohibition.--No agreement, contract,
or transaction determined by the Commission to be
contrary to the public interest under clause (i)
may be listed or made available for clearing or
trading on or through a registered entity.
``(iii) Swaps contracts.--
``(I) In general.--
In <>  connection
with the listing of a swap for clearing
by a derivatives clearing organization,
the Commission shall determine, upon
request or on its own motion, the
initial eligibility, or the continuing
qualification, of a derivatives clearing
organization to clear such a swap under
those criteria, conditions, or rules
that the Commission, in its discretion,
determines.
``(II) Requirements.--Any such
criteria, conditions, or rules shall
consider--
``(aa) the financial
integrity of the derivatives
clearing organization; and
``(bb) any other factors
which the Commission determines
may be appropriate.
``(iv) Deadline.--The Commission shall take
final action under clauses (i) and (ii) in not
later than 90 days from the commencement of its
review unless the party seeking to offer the
contract or swap agrees to an extension of this
time limitation.''.

(c) Violation of Core Principles.--Section 5c of the Commodity
Exchange Act (7 U.S.C. 7a-2) is amended by striking subsection (d).
SEC. 746. INSIDER TRADING.

Section 4c(a) of the Commodity Exchange Act (7 U.S.C. 6c(a)) is
amended by adding at the end the following:
``(3) Contract of sale.--It shall be unlawful for any
employee or agent of any department or agency of the Federal
Government who, by virtue of the employment or position of the
employee or agent, acquires information that may affect or tend
to affect the price of any commodity in interstate commerce, or
for future delivery, or any swap, and which information has not
been disseminated by the department or agency of the Federal
Government holding or creating the information in a manner which
makes it generally available to the trading public, or disclosed
in a criminal, civil, or

[[Page 1738]]

administrative hearing, or in a congressional, administrative,
or Government Accountability Office report, hearing, audit, or
investigation, to use the information in his personal capacity
and for personal gain to enter into, or offer to enter into--
``(A) a contract of sale of a commodity for future
delivery (or option on such a contract);
``(B) an option (other than an option executed or
traded on a national securities exchange registered
pursuant to section 6(a) of the Securities Exchange Act
of 1934 (15 U.S.C. 78f(a)); or
``(C) a swap.
``(4) Nonpublic information.--
``(A) Imparting of nonpublic information.--It shall
be unlawful for any employee or agent of any department
or agency of the Federal Government who, by virtue of
the employment or position of the employee or agent,
acquires information that may affect or tend to affect
the price of any commodity in interstate commerce, or
for future delivery, or any swap, and which information
has not been disseminated by the department or agency of
the Federal Government holding or creating the
information in a manner which makes it generally
available to the trading public, or disclosed in a
criminal, civil, or administrative hearing, or in a
congressional, administrative, or Government
Accountability Office report, hearing, audit, or
investigation, to impart the information in his personal
capacity and for personal gain with intent to assist
another person, directly or indirectly, to use the
information to enter into, or offer to enter into--
``(i) a contract of sale of a commodity for
future delivery (or option on such a contract);
``(ii) an option (other than an option
executed or traded on a national securities
exchange registered pursuant to section 6(a) of
the Securities Exchange Act of 1934 (15 U.S.C.
78f(a)); or
``(iii) a swap.
``(B) Knowing use.--It shall be unlawful for any
person who receives information imparted by any employee
or agent of any department or agency of the Federal
Government as described in subparagraph (A) to knowingly
use such information to enter into, or offer to enter
into--
``(i) a contract of sale of a commodity for
future delivery (or option on such a contract);
``(ii) an option (other than an option
executed or traded on a national securities
exchange registered pursuant to section 6(a) of
the Securities Exchange Act of 1934 (15 U.S.C.
78f(a)); or
``(iii) a swap.
``(C) Theft of nonpublic information.--It shall be
unlawful for any person to steal, convert, or
misappropriate, by any means whatsoever, information
held or created by any department or agency of the
Federal Government that may affect or tend to affect the
price of any commodity in interstate commerce, or for
future delivery, or any swap, where such person knows,
or acts in reckless disregard of the fact, that such
information has not been disseminated by the department
or agency of the Federal Government

[[Page 1739]]

holding or creating the information in a manner which
makes it generally available to the trading public, or
disclosed in a criminal, civil, or administrative
hearing, or in a congressional, administrative, or
Government Accountability Office report, hearing, audit,
or investigation, and to use such information, or to
impart such information with the intent to assist
another person, directly or indirectly, to use such
information to enter into, or offer to enter into--
``(i) a contract of sale of a commodity for
future delivery (or option on such a contract);
``(ii) an option (other than an option
executed or traded on a national securities
exchange registered pursuant to section 6(a) of
the Securities Exchange Act of 1934 (15 U.S.C.
78f(a)); or
``(iii) a swap, provided, however, that
nothing in this subparagraph shall preclude a
person that has provided information concerning,
or generated by, the person, its operations or
activities, to any employee or agent of any
department or agency of the Federal Government,
voluntarily or as required by law, from using such
information to enter into, or offer to enter into,
a contract of sale, option, or swap described in
clauses (i), (ii), or (iii).''.
SEC. 747. ANTIDISRUPTIVE PRACTICES AUTHORITY.

Section 4c(a) of the Commodity Exchange Act (7 U.S.C. 6c(a)) (as
amended by section 746) is amended by adding at the end the following:
``(5) Disruptive practices.--It shall be unlawful for any
person to engage in any trading, practice, or conduct on or
subject to the rules of a registered entity that--
``(A) violates bids or offers;
``(B) demonstrates intentional or reckless disregard
for the orderly execution of transactions during the
closing period; or
``(C) is, is of the character of, or is commonly
known to the trade as, `spoofing' (bidding or offering
with the intent to cancel the bid or offer before
execution).
``(6) Rulemaking authority.--The Commission may make and
promulgate such rules and regulations as, in the judgment of the
Commission, are reasonably necessary to prohibit the trading
practices described in paragraph (5) and any other trading
practice that is disruptive of fair and equitable trading.
``(7) Use of swaps to defraud.--It shall be unlawful for any
person to enter into a swap knowing, or acting in reckless
disregard of the fact, that its counterparty will use the swap
as part of a device, scheme, or artifice to defraud any third
party.''.
SEC. 748. COMMODITY WHISTLEBLOWER INCENTIVES AND PROTECTION.

The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by adding
at the end the following:
``SEC. 23. <>  COMMODITY WHISTLEBLOWER INCENTIVES
AND PROTECTION.

``(a) Definitions.--In this section:

[[Page 1740]]

``(1) Covered judicial or administrative action.--The term
`covered judicial or administrative action' means any judicial
or administrative action brought by the Commission under this
Act that results in monetary sanctions exceeding $1,000,000.
``(2) Fund.--The term `Fund' means the Commodity Futures
Trading Commission Customer Protection Fund established under
subsection (g).
``(3) Monetary sanctions.--The term `monetary sanctions',
when used with respect to any judicial or administrative action
means--
``(A) any monies, including penalties, disgorgement,
restitution, and interest ordered to be paid; and
``(B) any monies deposited into a disgorgement fund
or other fund pursuant to section 308(b) of the
Sarbanes-Oxley Act of 2002 (15 U.S.C. 7246(b)), as a
result of such action or any settlement of such action.
``(4) Original information.--The term `original information'
means information that--
``(A) is derived from the independent knowledge or
analysis of a whistleblower;
``(B) is not known to the Commission from any other
source, unless the whistleblower is the original source
of the information; and
``(C) is not exclusively derived from an allegation
made in a judicial or administrative hearing, in a
governmental report, hearing, audit, or investigation,
or from the news media, unless the whistleblower is a
source of the information.
``(5) Related action.--The term `related action', when used
with respect to any judicial or administrative action brought by
the Commission under this Act, means any judicial or
administrative action brought by an entity described in
subclauses (I) through (VI) of subsection (h)(2)(C) that is
based upon the original information provided by a whistleblower
pursuant to subsection (a) that led to the successful
enforcement of the Commission action.
``(6) Successful resolution.--The term `successful
resolution', when used with respect to any judicial or
administrative action brought by the Commission under this Act,
includes any settlement of such action.
``(7) Whistleblower.--The term `whistleblower' means any
individual, or 2 or more individuals acting jointly, who
provides information relating to a violation of this Act to the
Commission, in a manner established by rule or regulation by the
Commission.

``(b) Awards.--
``(1) <>  In general.--In any covered
judicial or administrative action, or related action, the
Commission, under regulations prescribed by the Commission and
subject to subsection (c), shall pay an award or awards to 1 or
more whistleblowers who voluntarily provided original
information to the Commission that led to the successful
enforcement of the covered judicial or administrative action, or
related action, in an aggregate amount equal to--

[[Page 1741]]

``(A) not less than 10 percent, in total, of what
has been collected of the monetary sanctions imposed in
the action or related actions; and
``(B) not more than 30 percent, in total, of what
has been collected of the monetary sanctions imposed in
the action or related actions.
``(2) Payment of awards.--Any amount paid under paragraph
(1) shall be paid from the Fund.

``(c) Determination of Amount of Award; Denial of Award.--
``(1) Determination of amount of award.--
``(A) Discretion.--The determination of the amount
of an award made under subsection (b) shall be in the
discretion of the Commission.
``(B) Criteria.--In determining the amount of an
award made under subsection (b), the Commission--
``(i) shall take into consideration--
``(I) the significance of the
information provided by the
whistleblower to the success of the
covered judicial or administrative
action;
``(II) the degree of assistance
provided by the whistleblower and any
legal representative of the
whistleblower in a covered judicial or
administrative action;
``(III) the programmatic interest of
the Commission in deterring violations
of the Act (including regulations under
the Act) by making awards to
whistleblowers who provide information
that leads to the successful enforcement
of such laws; and
``(IV) such additional relevant
factors as the Commission may establish
by rule or regulation; and
``(ii) shall not take into consideration the
balance of the Fund.
``(2) Denial of award.--No award under subsection (b) shall
be made--
``(A) to any whistleblower who is, or was at the
time the whistleblower acquired the original information
submitted to the Commission, a member, officer, or
employee of--
``(i) a appropriate regulatory agency;
``(ii) the Department of Justice;
``(iii) a registered entity;
``(iv) a registered futures association;
``(v) a self-regulatory organization as
defined in section 3(a) of the Securities Exchange
Act of 1934 (15 U.S.C. 78c(a)); or
``(vi) a law enforcement organization;
``(B) to any whistleblower who is convicted of a
criminal violation related to the judicial or
administrative action for which the whistleblower
otherwise could receive an award under this section;
``(C) to any whistleblower who submits information
to the Commission that is based on the facts underlying
the covered action submitted previously by another
whistleblower;

[[Page 1742]]

``(D) to any whistleblower who fails to submit
information to the Commission in such form as the
Commission may, by rule or regulation, require.

``(d) Representation.--
``(1) Permitted representation.--Any whistleblower who makes
a claim for an award under subsection (b) may be represented by
counsel.
``(2) Required representation.--
``(A) In general.--Any whistleblower who anonymously
makes a claim for an award under subsection (b) shall be
represented by counsel if the whistleblower submits the
information upon which the claim is based.
``(B) Disclosure of identity.--Prior to the payment
of an award, a whistleblower shall disclose the identity
of the whistleblower and provide such other information
as the Commission may require, directly or through
counsel for the whistleblower.

``(e) No Contract Necessary.--No contract with the Commission is
necessary for any whistleblower to receive an award under subsection
(b), unless otherwise required by the Commission, by rule or regulation.
``(f) Appeals.--
``(1) In general.--Any determination made under this
section, including whether, to whom, or in what amount to make
awards, shall be in the discretion of the Commission.
``(2) Appeals.--Any <>  determination
described in paragraph (1) may be appealed to the appropriate
court of appeals of the United States not more than 30 days
after the determination is issued by the Commission.
``(3) Review.--The court shall review the determination made
by the Commission in accordance with section 7064 of title 5,
United States Code.

``(g) Commodity Futures Trading Commission Customer Protection
Fund.--
``(1) Establishment.--There is established in the Treasury
of the United States a revolving fund to be known as the
`Commodity Futures Trading Commission Customer Protection Fund'.
``(2) Use of fund.--The Fund shall be available to the
Commission, without further appropriation or fiscal year
limitation, for--
``(A) the payment of awards to whistleblowers as
provided in subsection (a); and
``(B) the funding of customer education initiatives
designed to help customers protect themselves against
fraud or other violations of this Act, or the rules and
regulations thereunder.
``(3) Deposits and credits.--There shall be deposited into
or credited to the Fund:
``(A) Monetary sanctions.--Any monetary sanctions
collected by the Commission in any covered judicial or
administrative action that is not otherwise distributed
to victims of a violation of this Act or the rules and
regulations thereunder underlying such action, unless
the balance of the Fund at the time the monetary
judgment is collected exceeds $100,000,000.

[[Page 1743]]

``(B) Additional amounts.--If the amounts deposited
into or credited to the Fund under subparagraph (A) are
not sufficient to satisfy an award made under subsection
(b), there shall be deposited into or credited to the
Fund an amount equal to the unsatisfied portion of the
award from any monetary sanction collected by the
Commission in any judicial or administrative action
brought by the Commission under this Act that is based
on information provided by a whistleblower.
``(C) Investment income.--All income from
investments made under paragraph (4).
``(4) Investments.--
``(A) Amounts in fund may be invested.--The
Commission may request the Secretary of the Treasury to
invest the portion of the Fund that is not, in the
Commission's judgment, required to meet the current
needs of the Fund.
``(B) Eligible investments.--Investments shall be
made by the Secretary of the Treasury in obligations of
the United States or obligations that are guaranteed as
to principal and interest by the United States, with
maturities suitable to the needs of the Fund as
determined by the Commission.
``(C) Interest and proceeds credited.--The interest
on, and the proceeds from the sale or redemption of, any
obligations held in the Fund shall be credited to, and
form a part of, the Fund.
``(5) Reports to congress.--Not later than October 30 of
each year, the Commission shall transmit to the Committee on
Agriculture, Nutrition, and Forestry of the Senate, and the
Committee on Agriculture of the House of Representatives a
report on--
``(A) the Commission's whistleblower award program
under this section, including a description of the
number of awards granted and the types of cases in which
awards were granted during the preceding fiscal year;
``(B) customer education initiatives described in
paragraph (2)(B) that were funded by the Fund during the
preceding fiscal year;
``(C) the balance of the Fund at the beginning of
the preceding fiscal year;
``(D) the amounts deposited into or credited to the
Fund during the preceding fiscal year;
``(E) the amount of earnings on investments of
amounts in the Fund during the preceding fiscal year;
``(F) the amount paid from the Fund during the
preceding fiscal year to whistleblowers pursuant to
subsection (b);
``(G) the amount paid from the Fund during the
preceding fiscal year for customer education initiatives
described in paragraph (2)(B);
``(H) the balance of the Fund at the end of the
preceding fiscal year; and
``(I) a complete set of audited financial
statements, including a balance sheet, income statement,
and cash flow analysis.

``(h) Protection of Whistleblowers.--

[[Page 1744]]

``(1) Prohibition against retaliation.--
``(A) In general.--No employer may discharge,
demote, suspend, threaten, harass, directly or
indirectly, or in any other manner discriminate against,
a whistleblower in the terms and conditions of
employment because of any lawful act done by the
whistleblower--
``(i) in providing information to the
Commission in accordance with subsection (b); or
``(ii) in assisting in any investigation or
judicial or administrative action of the
Commission based upon or related to such
information.
``(B) Enforcement.--
``(i) Cause of action.--An individual who
alleges discharge or other discrimination in
violation of subparagraph (A) may bring an action
under this subsection in the appropriate district
court of the United States for the relief provided
in subparagraph (C), unless the individual who is
alleging discharge or other discrimination in
violation of subparagraph (A) is an employee of
the Federal Government, in which case the
individual shall only bring an action under
section 1221 of title 5, United States Code.
``(ii) Subpoenas.--A subpoena requiring the
attendance of a witness at a trial or hearing
conducted under this subsection may be served at
any place in the United States.
``(iii) Statute of limitations.--An action
under this subsection may not be brought more than
2 years after the date on which the violation
reported in subparagraph (A) is committed.
``(C) Relief.--Relief for an individual prevailing
in an action brought under subparagraph (B) shall
include--
``(i) reinstatement with the same seniority
status that the individual would have had, but for
the discrimination;
``(ii) the amount of back pay otherwise owed
to the individual, with interest; and
``(iii) compensation for any special damages
sustained as a result of the discharge or
discrimination, including litigation costs, expert
witness fees, and reasonable attorney's fees.
``(2) Confidentiality.--
``(A) In general.--Except as provided in
subparagraphs (B) and (C), the Commission, and any
officer or employee of the Commission, shall not
disclose any information, including information provided
by a whistleblower to the Commission, which could
reasonably be expected to reveal the identity of a
whistleblower, except in accordance with the provisions
of section 552a of title 5, United States Code, unless
and until required to be disclosed to a defendant or
respondent in connection with a public proceeding
instituted by the Commission or any entity described in
subparagraph (C). For purposes of section 552 of title
5, United States Code, this paragraph shall be
considered a statute described in subsection (b)(3)(B)
of such section 552.

[[Page 1745]]

``(B) Effect.--Nothing in this paragraph is intended
to limit the ability of the Attorney General to present
such evidence to a grand jury or to share such evidence
with potential witnesses or defendants in the course of
an ongoing criminal investigation.
``(C) Availability to government agencies.--
``(i) In general.--Without the loss of its
status as confidential in the hands of the
Commission, all information referred to in
subparagraph (A) may, in the discretion of the
Commission, when determined by the Commission to
be necessary or appropriate to accomplish the
purposes of this Act and protect customers and in
accordance with clause (ii), be made available
to--
``(I) the Department of Justice;
``(II) an appropriate department or
agency of the Federal Government, acting
within the scope of its jurisdiction;
``(III) a registered entity,
registered futures association, or self-
regulatory organization as defined in
section 3(a) of the Securities Exchange
Act of 1934 (15 U.S.C. 78c(a));
``(IV) a State attorney general in
connection with any criminal
investigation;
``(V) an appropriate department or
agency of any State, acting within the
scope of its jurisdiction; and
``(VI) a foreign futures authority.
``(ii) Maintenance of information.--Each of
the entities, agencies, or persons described in
clause (i) shall maintain information described in
that clause as confidential, in accordance with
the requirements in subparagraph (A).
``(iii) Study on impact of foia exemption on
commodity futures trading commission.--
``(I) Study.--The Inspector General
of the Commission shall conduct a
study--
``(aa) on whether the
exemption under section
552(b)(3) of title 5, United
States Code (known as the
Freedom of Information Act)
established in paragraph (2)(A)
aids whistleblowers in
disclosing information to the
Commission;
``(bb) on what impact the
exemption has had on the
public's ability to access
information about the
Commission's regulation of
commodity futures and option
markets; and
``(cc) to make any
recommendations on whether the
Commission should continue to
use the exemption.
``(II) Report.--Not later than 30
months after the date of enactment of
this clause, the Inspector General
shall--
``(aa) submit a report on
the findings of the study
required under this clause to
the Committee on Banking,
Housing, and Urban Affairs of
the Senate and the Committee on

[[Page 1746]]

Financial Services of the House
of Representatives; and
``(bb) <>
make the report available to the
public through publication of a
report on the website of the
Commission.
``(3) Rights retained.--Nothing in this section shall be
deemed to diminish the rights, privileges, or remedies of any
whistleblower under any Federal or State law, or under any
collective bargaining agreement.

``(i) Rulemaking Authority.--The Commission shall have the authority
to issue such rules and regulations as may be necessary or appropriate
to implement the provisions of this section consistent with the purposes
of this section.
``(j) <>  Implementing Rules.--The Commission shall
issue final rules or regulations implementing the provisions of this
section not later than 270 days after the date of enactment of the Wall
Street Transparency and Accountability Act of 2010.

``(k) Original Information.--Information submitted to the Commission
by a whistleblower in accordance with rules or regulations implementing
this section shall not lose its status as original information solely
because the whistleblower submitted such information prior to the
effective date of such rules or regulations, provided such information
was submitted after the date of enactment of the Wall Street
Transparency and Accountability Act of 2010.
``(l) Awards.--A whistleblower may receive an award pursuant to this
section regardless of whether any violation of a provision of this Act,
or a rule or regulation thereunder, underlying the judicial or
administrative action upon which the award is based occurred prior to
the date of enactment of the Wall Street Transparency and Accountability
Act of 2010.
``(m) Provision of False Information.--A whistleblower who knowingly
and willfully makes any false, fictitious, or fraudulent statement or
representation, or who makes or uses any false writing or document
knowing the same to contain any false, fictitious, or fraudulent
statement or entry, shall not be entitled to an award under this section
and shall be subject to prosecution under section 1001 of title 18,
United States Code.
``(n) Nonenforceability of Certain Provisions Waiving Rights and
Remedies or Requiring Arbitration of Disputes.--
``(1) Waiver of rights and remedies.--The rights and
remedies provided for in this section may not be waived by any
agreement, policy form, or condition of employment including by
a predispute arbitration agreement.
``(2) Predispute arbitration agreements.--No predispute
arbitration agreement shall be valid or enforceable, if the
agreement requires arbitration of a dispute arising under this
section.''.
SEC. 749. CONFORMING AMENDMENTS.

(a) Section 4d of the Commodity Exchange Act (7 U.S.C. 6d) (as
amended by section 724) is amended--
(1) in subsection (a)--
(A) in the matter preceding paragraph (1)--
(i) by striking ``engage as'' and inserting
``be a''; and

[[Page 1747]]

(ii) by striking ``or introducing broker'' and
all that follows through ``or derivatives
transaction execution facility'';
(B) in paragraph (1), by striking ``or introducing
broker''; and
(C) in paragraph (2), by striking ``if a futures
commission merchant,''; and
(2) by adding at the end the following:

``(g) It shall be unlawful for any person to be an introducing
broker unless such person shall have registered under this Act with the
Commission as an introducing broker and such registration shall not have
expired nor been suspended nor revoked.''.
(b) Section 4m(3) of the Commodity Exchange Act (7 U.S.C. 6m(3)) is
amended--
(1) by striking ``(3) Subsection (1) of this section'' and
inserting the following:

``(3) Exception.--
``(A) In general.--Paragraph (1)''; and
(2) by striking ``to any investment trust'' and all that
follows through the period at the end and inserting the
following: ``to any commodity pool that is engaged primarily in
trading commodity interests.
``(B) Engaged primarily.--For purposes of subparagraph (A),
a commodity trading advisor or a commodity pool shall be
considered to be `engaged primarily' in the business of being a
commodity trading advisor or commodity pool if it is or holds
itself out to the public as being engaged primarily, or proposes
to engage primarily, in the business of advising on commodity
interests or investing, reinvesting, owning, holding, or trading
in commodity interests, respectively.
``(C) Commodity interests.--For purposes of this paragraph,
commodity interests shall include contracts of sale of a
commodity for future delivery, options on such contracts,
security futures, swaps, leverage contracts, foreign exchange,
spot and forward contracts on physical commodities, and any
monies held in an account used for trading commodity
interests.''.

(c) Section 5c of the Commodity Exchange Act (7 U.S.C. 7a-2) is
amended--
(1) in subsection (a)(1)--
(A) by striking ``, 5a(d),''; and
(B) by striking ``and section (2)(h)(7) with respect
to significant price discovery contracts,''; and
(2) in subsection (f)(1), by striking ``section 4d(c) of
this Act'' and inserting ``section 4d(e)''.

(d) Section 5e of the Commodity Exchange Act (7 U.S.C. 7b) is
amended by striking ``or revocation of the right of an electronic
trading facility to rely on the exemption set forth in section 2(h)(3)
with respect to a significant price discovery contract,''.
(e) Section 6(b) of the Commodity Exchange Act (7 U.S.C. 8(b)) is
amended in the first sentence by striking ``, or to revoke the right of
an electronic trading facility to rely on the exemption set forth in
section 2(h)(3) with respect to a significant price discovery
contract,''.
(f) Section 12(e)(2)(B) of the Commodity Exchange Act (7 U.S.C.
16(e)(2)(B)) is amended--

[[Page 1748]]

(1) by striking ``section 2(c), 2(d), 2(f), or 2(g) of this
Act'' and inserting ``section 2(c) or 2(f) of this Act''; and
(2) by striking ``2(h) or''.

(g) Section 17(r)(1) of the Commodity Exchange Act (7 U.S.C.
21(r)(1)) is amended by striking ``section 4d(c) of this Act'' and
inserting ``section 4d(e)''.
(h) Section 22 of the Commodity Exchange Act <>  is
amended--
(1) in subsection (a)(1)(B), by--
(A) inserting ``or any swap'' after ``commodity)'';
and
(B) inserting ``or any swap'' after ``such
contract'';
(2) in subsection (a)(1)(C), by adding at the end the
following:
``(iv) a swap; or''; and
(3) in subsection (b)(1)(A), by striking ``section 2(h)(7)
or sections 5 through 5c'' and inserting ``section 5, 5b, 5c,
5h, or 21''.

(i) Section 408(2)(C) of the Federal Deposit Insurance Corporation
Improvement Act of 1991 (12 U.S.C. 4421(2)(C)) is amended--
(1) by striking ``section 2(c), 2(d), 2(f), or (2)(g) of
such Act'' and inserting ``section 2(c), 2(f), or 2(i) of that
Act''; and
(2) by striking ``2(h) or''.
SEC. 750. STUDY ON OVERSIGHT OF CARBON MARKETS.

(a) <>  Interagency Working Group.--There is
established to carry out this section an interagency working group
(referred to in this section as the ``interagency group'') composed of
the following members or designees:
(1) The Chairman of the Commodity Futures Trading Commission
(referred to in this section as the ``Commission''), who shall
serve as Chairman of the interagency group.
(2) The Secretary of Agriculture.
(3) The Secretary of the Treasury.
(4) The Chairman of the Securities and Exchange Commission.
(5) The Administ