1.This Act may be cited as the
Manufacturing Certainty and Captive
Finance Affiliate Clarification Act
.
2.Clarification of
the exemptions for captive finance companies from the definition of major swap
participant and from the swap clearing requirement
(a)Exclusion from
definition of major swap participantSection 1a(33)(D) of the
Commodity Exchange Act (7 U.S.C. 1a(33)(D)) is amended to read as
follows:
(D)Exclusion of
certain captive finance entities
(i)The definition under this paragraph shall not include an
entity whose primary business is providing financing that facilitates the sale
or lease of products by or on behalf of the parent company or another
subsidiary of the parent company, and uses derivatives only for the purpose of
hedging underlying commercial risks in a consolidated financing and leasing
portfolio, at least 90 percent of which, as of the end of its preceding fiscal
year, is qualifying financing (including loans, notes, installment sales
contracts, receivables, and operating and financing leases).
(ii)In
this subparagraph:
(I)The term qualifying financing
means—
- (aa)any
financing or lease of, or that includes, a product; or
- (bb)any
financing to or for the benefit of an affiliate of the entity, a distribution
entity, or any customer or affiliate of a distribution entity,
except
that the term does not include any financing that does not facilitate the sale
of a product manufactured by the entity or its affiliates, as determined by the
Commission.(II)The
term product means—
- (aa)any
good that is manufactured or sold by an affiliate of the entity; and
- (bb)any
service that is provided by an affiliate of the entity.
(III)The term distribution entity means a person
whose primary business is the sale, lease or servicing of a product that is
manufactured by the entity or its affiliates.
(IV)The
term affiliate means, with respect to an entity—
- (aa)a
person that reports information or prepares financial statements on a
consolidated basis with the entity, or for which a parent company reports
information or prepares financial statements on a consolidated basis for the
person and the entity; or
- (bb)a
person of which the entity or the parent of the entity holds 50 percent or more
of the equity interests.
(V)The
term person means an individual, partnership, corporation
(including a business trust), limited liability company, joint stock company,
trust, unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency
thereof.
.
(b)Exclusion from
swap clearing requirementSection 2(h)(7)(C)(iii) of such Act (7
U.S.C. 2(h)(7)(C)(iii)) is amended to read as follows:
(iii)Exclusion of
certain captive finance entitiesSuch term shall not include an
entity excluded from the definition of major swap participant by reason of
section
1a(33)(D).
.
3.The amendments made by
this Act shall take effect as if they had been included in subtitle A of title
VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act.