H.R. 1165 — Introduced in House

I 114th CONGRESS 1st Session H. R. 1165 IN THE HOUSE OF REPRESENTATIVES February 27, 2015 Mr. Capuano introduced the following bill; which was referred to the Committee on Financial Services A BILL To direct the Securities and Exchange Commission to require that repurchase-to-maturity transactions be treated as secured borrowings. 1. Short title This Act may be cited as the Keep Repos to Maturity on Balance Sheet Act of 2015. 2. Accounting treatment of RTM transactions (a) In general In establishing accounting principles or standards for purposes of the securities laws, the Securities and Exchange Commission shall require that a repurchase-to-maturity transaction be treated as a secured borrowing in which the transferred asset serves as collateral. (b) Definitions In this section: (1) Repurchase-to-maturity transaction The term repurchase-to-maturity transaction means a transaction in which— (A) a financial asset is transferred in exchange for cash, other financial assets, or letters of credit; and (B) concurrently with the transfer, the transferor and the transferee agree that, at the maturity of the transferred asset, the transferee may either, at the option of the transferee— (i) return the transferred asset (or a substantially similar asset) to the transferor, thereby obligating the transferor to reacquire the transferred asset (or to acquire the substantially similar asset, as the case may be) for an amount equal to the value of the cash, other financial assets, or letters of credit described in subparagraph (A), plus a stipulated interest factor; or (ii) redeem the transferred asset from the issuer of the transferred asset. (2) Securities laws The term securities laws has the meaning given such term in section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)). (3) Transferred asset The term transferred asset means a financial asset transferred in exchange for cash, other financial assets, or letters of credit in a repurchase-to-maturity transaction, as described in paragraph (1)(A). (c) Effective date The treatment required under subsection (a) shall apply beginning on the date that is 90 days after the date of the enactment of this Act.