,,ii #aadth ,,congress #b;d ,session ,s4 #caah ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,june #bi1 #bjaf ,ms4 ,warren 7for herself and ,mr4 ,warner7 introduced the following bill2 which was read twice and referred to the ,committee on ,agriculture1 ,nutrition1 and ,forestry ,a ,,bill ,to amend the ,commodity ,exchange ,act to clarify which fees the ,commodity ,futures ,trading ,commission may assess and collect1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,derivatives ,oversight and ,taxpayer ,protection ,act4 ,i ,strengthening oversight and enforcement #aja4 ,fees to recover costs 7a7 ,in general ,the ,commodity ,exchange ,act is amended by inserting after section #aj 7#g ,u4,s4,c4 #ag7 the following3 #aa4 ,fees to recover costs 7a7 ,recovery of certain costs of annual appropriation 7#a7 ,in general ,effective beginning ,october #a1 #bjaf1 so as to recover the costs to the ,federal ,government of the annual appropriation to the ,commission by ,congress1 the ,commission shall assess and collect fees under this subsection4 7#b7 ,requirements ,subject to paragraph 7#c71 the ,commission may-- 7,a7 assess fees to recover the costs of the regulatory services provided by the ,commission2 and 7,b7 assess fees from registered entities and persons registered under this ,act4 7#c7 ,service fees ,the ,commission may assess fees to recover the costs of the following regulatory services provided by the ,commission3 7,a7 ,designated contract market compliance examinations4 7,b7 ,foreign board of trade registration reviews4 7,c7 ,swap execution facility designation reviews4 7,d7 ,swap data repository registration reviews4 7,e7 ,designated contract market designation reviews4 7,f7 ,swap execution facility compliance examinations4 7,g7 ,swap data repository compliance reviews4 7,h7 ,designated contract market contract review and approvals4 7,i7 ,swap execution facility contract review and approvals4 7,j7 ,designated contract market contract certification and rule reviews4 7,k7 ,swap execution facility contract certification and rule reviews4 7,l7 ,swap data repository rule reviews4 7,m7 ,reviews of mergers1 transfers1 and other action requests from designated contract markets1 swap execution facilities1 and swap data repositories4 7,n7 ,designated self-regulatory organization financial surveillance reviews4 7,o7 ,registered futures association compliance program reviews4 7,p7 ,derivatives clearing organization reviews4 7,q7 ,futures commission merchant examinations4 7,r7 ,registered foreign exchange dealer examinations4 7,s7 ,swap dealer registration reviews4 7,t7 ,swap dealer examinations4 7,u7 ,other entity registration1 reviews1 or examinations1 or other regulatory services provided by the ,commission4 7#d7 ,fee rates ,fees assessed shall-- 7,a7 be reasonably related to the cost to the ,commission of providing the services of the ,commission2 7,b7 take into consideration the full-time equivalent number of employees performing the services1 overhead costs1 and other factors that the ,commission determines are necessary in the public interest2 7,c7 support market access for smaller market participants hedging or mitigating commercial or agricultural risk1 including farmers and ranchers2 and 7,d7 minimize negative impacts on market liquidity and maintain the efficiency1 competitiveness1 and financial integrity of futures and swaps markets in the ,united ,states4 7#e7 ,collection of fees ,the ,commission shall collect fees paid in accordance with paragraph 7#b7 in a manner and within such time as determined by the ,commission4 7b7 ,publication ,not later than #fj days after the date on which a law providing a regular appropriation to the ,commission for a fiscal year is enacted1 the ,commission shall publish in the ,federal ,register-- 7#a7 notices of the fee rates for the fiscal year1 including any estimates or projections on which the fees are based2 and 7#b7 a schedule of fees for the fiscal year1 including an explanation of the method used for calculating applicable fee rates4 7c7 ,deposit of fees 7#a7 ,offsetting collections ,fees collected under subsection 7a7 for any fiscal year-- 7,a7 shall be deposited and credited as offsetting collections to the account providing appropriations to the ,commission2 and 7,b7 except as provided in subsection 7e71 shall not be collected or available for obligation for any fiscal year except to the extent provided in advance in appropriation ,acts4 7#b7 ,general revenues prohibited ,no fees collected under subsection 7a7 shall be deposited and credited as general revenue of the ,treasury4 7d7 ,fee orders 7#a7 ,annual adjustment ,for each fiscal year1 the ,commission shall by order set the fees applicable under subsection 7a7 for the fiscal year at rates that are reasonably likely to produce aggregate fee collections under this section that are equal to the costs to the ,federal ,government of the annual appropriation to the ,commission by ,congress4 7#b7 ,mid-year adjustment 7,a7 ,in general ,for each fiscal year1 the ,commission shall determine1 not later than ,march #a of the fiscal year1 whether1 based on the actual fees collected during the first #e months of the fiscal year1 the collections generated under the fee rates determined under paragraph 7#a7 for the fiscal year are reasonably likely to be #aj percent 7or more7 greater or less than the annual appropriation to the ,commission for the fiscal year4 7,b7 ,adjustment 7i7 ,in general ,if the ,commission makes an affirmative determination1 the ,commission shall by order1 not later than ,march #a1 adjust the fees for the fiscal year to rates that are reasonably likely to produce aggregate fee collections under this section that are equal to the cost to the ,federal ,government of the annual appropriation to the ,commission by ,congress4 7ii7 ,factors ,the fee rates shall be assessed based on the same factors described in subsection 7a74 7e7 ,lapse of appropriation ,if on the first day of a fiscal year a regular appropriation to the ,commission has not been enacted1 the ,commission shall continue to collect 7as offsetting collections7 the fees and assessments under subsection 7a7 at the rates in effect on ,september #cj of the preceding fiscal year1 until #ij days after the date a regular appropriation is enacted4 4 7b7 ,conforming amendments 7#a7 ,section #b7;d7 of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #b7;d77 is amended by striking and #i and inserting #i1 and #aa4 7#b7 ,section #d7;c77#a77;,a77i77,i7 of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #f7;c77#a77;,a77i77,i77 is amended by inserting #aa1 after #h;e14 7#c7 ,section #ae7;a77#c7 of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #ai7;a77#c77 is amended by adding at the end the following3 7,d7 ,an action under section #aa4 4 #ajb4 ,civil penalties and fines under the ,commodity ,exchange ,act and related enforcement actions 7a7 ,civil penalties generally ,section #f7;c77#aj7 of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #i7aj77 is amended by striking subparagraph 7,c7 and inserting the following3 7,c7 assess such person-- 7i7 a civil penalty of not more than an amount equal to the greater of-- 7,i7 #a1jjj1jjj1 in the case of a person who is an individual1 for each violation2 7,,ii7 #aj1jjj1jjj1 in the case of any person other than an individual1 for each violation2 7,,iii7 triple the monetary gain to the person and all other persons acting in concert with the person1 for each such violation2 or 7,,iv7 triple the total amount of losses to persons proximately caused by each such violation2 or 7ii7 a civil penalty of triple the maximum amount otherwise available under clause 7i7 if the person1 within #e years preceding the violation1 has been-- 7,i7 found in a proceeding brought by the ,commission1 or by agreement of settlement to which the ,commission is a party1 to have recklessly1 knowingly1 or willfully violated any provision of this ,act or of the rules1 regulations1 or orders of the ,commission thereunder2 7,,ii7 found in a proceeding brought by the ,securities and ,exchange ,commission1 or by agreement of settlement to which the ,securities and ,exchange ,commission is a party1 to have recklessly1 knowingly1 or willfully violated any provision of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;a et seq471 the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;a et seq471 the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#a et seq471 or the ,investment ,advisers ,act of #aidj 7#ae ,u4,s4,c4 #hj;b-#a et seq471 or of the rules1 regulations1 or orders of the ,securities and ,exchange ,commission thereunder2 7,,iii7 found in a proceeding brought by the ,federal ,energy ,regulatory ,commission1 or by agreement of settlement to which the ,federal ,energy ,regulatory ,commission is a party1 to have recklessly1 knowingly1 or willfully violated any provision of the ,federal ,power ,act 7#af ,u4,s4,c4 #gib et seq471 the ,natural ,gas ,act 7#ae ,u4,s4,c4 #gag et seq471 the ,public ,utility ,regulatory ,policies ,act of #aigh 7#af ,u4,s4,c4 #bfja et seq471 the ,natural ,gas ,policy ,act of #aigh 7#ae ,u4,s4,c4 #ccja et seq471 or the rules1 regulations1 or orders of the ,federal ,energy ,regulatory ,commission issued thereunder2 7,,iv7 convicted of any criminal violation of this ,act or of the rules1 regulations1 or orders of the ,commission thereunder2 7,v7 convicted of any criminal violation of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;a et seq471 the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;a et seq471 the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#a et seq471 or the ,investment ,advisers ,act of #aidj 7#ae ,u4,s4,c4 #hj;b-#a et seq471 or of the rules1 regulations1 or orders of the ,securities and ,exchange ,commission thereunder2 or 7,,vi7 convicted of any other criminal offense that involves any conduct1 transaction1 advice or activity related to any commodity interest1 as that term is defined by the ,commission1 or security-based swap2 and 4 7b7 ,fines and civil penalties related to violation of cease and desist order ,section #f7;d7 of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #ac;b7 is amended-- 7#a7 by inserting 7#a7 after 7d72 7#b7 by striking #adj1jjj or triple the monetary gain to such person1 and inserting 7,a7 #a1jjj1jjj1 in the case of a person who is an individual1 for each violation1 7,b7 #aj1jjj1jjj1 in the case of any person other than an individual1 for each violation1 7,c7 triple the monetary gain to the person and all other persons acting in concert with the person1 for each such violation1 or 7,d7 triple the total amount of losses to persons proximately caused by each such violation12 and 7#c7 by adding at the end the following3 7#b7 ,a person may be held liable for a civil penalty in triple the amount otherwise available for a violation under this subsection if the person1 within #e years preceding such violation1 has been-- 7,a7 found in a proceeding brought by the ,commission1 or by agreement of settlement to which the ,commission is a party1 to have recklessly1 knowingly1 or willfully violated any provision of this ,act or the rules1 regulations1 or orders of the ,commission thereunder2 7,b7 found in a proceeding brought by the ,securities and ,exchange ,commission1 or by agreement of settlement to which the ,securities and ,exchange ,commission is a party1 to have recklessly1 knowingly1 or willfully violated any provision of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;a et seq471 the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;a et seq471 the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#a et seq471 or the ,investment ,advisers ,act of #aidj 7#ae ,u4,s4,c4 #hj;b-#a et seq471 or of the rules1 regulations1 or orders of the ,securities and ,exchange ,commission thereunder2 7,c7 found in a proceeding brought by the ,federal ,energy ,regulatory ,commission1 or by agreement of settlement to which the ,federal ,energy ,regulatory ,commission is a party1 to have recklessly1 knowingly1 or willfully violated any provision of the ,federal ,power ,act 7#af ,u4,s4,c4 #gib et seq471 the ,natural ,gas ,act 7#ae ,u4,s4,c4 #gag et seq471 the ,public ,utility ,regulatory ,policies ,act of #aigh 7#af ,u4,s4,c4 #bfja et seq471 the ,natural ,gas ,policy ,act of #aigh 7#ae ,u4,s4,c4 #ccja et seq471 or the rules1 regulations1 or orders of the ,federal ,energy ,regulatory ,commission issued thereunder2 7,d7 convicted of any criminal violation of this ,act or the rules1 regulations1 or orders of the ,commission thereunder2 7,e7 convicted of any criminal violation of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;a et seq471 the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;a et seq471 the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#a et seq471 or the ,investment ,advisers ,act of #aidj 7#ae ,u4,s4,c4 #hj;b-#a et seq471 or of the rules1 regulations1 or orders of the ,securities and ,exchange ,commission thereunder2 or 7,f7 convicted of any other criminal offense that involves any conduct1 transaction1 advice or activity related to any commodity interest1 as that term is defined by the ,commission1 or security-based swap4 4 7c7 ,nonenforcement of rules of government or other violations ,section #f;b of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #ac;a7 is amended-- 7#a7 in the first sentence1 by striking #ejj1jjj for each such violation1 or1 in any case of manipulation or attempted manipulation in violation of section #f7;c71 #f7;d71 or #i7;a77#b71 a civil penalty of not more than #a1jjj1jjj for each such violation and inserting 7,a7 #a1jjj1jjj1 in the case of a person who is an individual1 for each violation1 7,b7 #aj1jjj1jjj1 in the case of any person other than an individual1 for each violation1 7,c7 triple the monetary gain to the person and all other persons acting in concert with the person1 for each such violation1 or 7,d7 triple the total amount of losses to persons proximately caused by each such violation1 and such civil penalty shall be assessed for each violation on which a failure to enforce or other violation occurs or has occurred2 provided that such registered entity1 director1 officer1 agent1 or employee may be assessed a civil penalty of triple the amount otherwise available if the person1 within #e years of such violation1 has been 7i7 found in a proceeding brought by the ,commission1 or by agreement of settlement to which the ,commission is a party1 to have recklessly1 knowingly1 or willfully violated any provision of this ,act or the rules1 regulations1 or orders of the ,commission thereunder1 7ii7 found in a proceeding brought by the ,securities and ,exchange ,commission1 or by agreement of settlement to which the ,securities and ,exchange ,commission is a party1 to have recklessly1 knowingly1 or willfully violated any provision of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;a et seq471 the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;a et seq471 the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#a et seq471 or the ,investment ,advisers ,act of #aidj 7#ae ,u4,s4,c4 #hj;b-#a et seq471 or of the rules1 regulations1 or orders of the ,securities and ,exchange ,commission thereunder1 7iii7 found in a proceeding brought by the ,federal ,energy ,regulatory ,commission1 or by agreement of settlement to which the ,federal ,energy ,regulatory ,commission is a party1 to have recklessly1 knowingly1 or willfully violated any provision of the ,federal ,power ,act 7#af ,u4,s4,c4 #gib et seq471 the ,natural ,gas ,act 7#ae ,u4,s4,c4 #gag et seq471 the ,public ,utility ,regulatory ,policies ,act of #aigh 7#af ,u4,s4,c4 #bfja et seq471 the ,natural ,gas ,policy ,act of #aigh 7#ae ,u4,s4,c4 #ccja et seq471 or the rules1 regulations1 or orders of the ,federal ,energy ,regulatory ,commission issued thereunder1 7iv7 convicted of any criminal violation of this ,act or the rules1 regulations1 or orders of the ,commission thereunder1 7v7 convicted of any criminal violation of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;a et seq471 the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;a et seq471 the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#a et seq471 or the ,investment ,advisers ,act of #aidj 7#ae ,u4,s4,c4 #hj;b-#a et seq471 or of the rules1 regulations1 or orders of the ,securities and ,exchange ,commission thereunder1 or 7vi7 convicted of any other criminal offense that involves any conduct1 transaction1 advice or activity related to any commodity interest1 as that term is defined by the ,commission1 or security-based swap2 and 7#b7 in the second sentence1 by striking #ejj1jjj and inserting #a1jjj1jjj4 7d7 ,action ,to enjoin or restrain violations ,section #f;c7d7 of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #ac;a-#a7;d77 is amended-- 7#a7 in paragraph 7#a71 in the matter preceding subparagraph 7,a71 by inserting a civil penalty in the amount of after violation2 and 7#b7 by striking subparagraphs 7,a7 and 7,b7 of paragraph 7#a7 and inserting the following3 7,a7 not more than the greater of-- 7i7 #a1jjj1jjj1 in the case of a person who is an individual1 for each violation2 7ii7 #aj1jjj1jjj1 in the case of any person other than an individual1 for each violation2 7iii7 triple the monetary gain to the person and all other persons acting in concert with the person1 for each such violation2 or 7iv7 triple the total amount of losses by persons proximately caused by each such violation2 or 7,b7 triple the maximum amount otherwise available under subparagraph 7,a7 if the person1 within #e years preceding the violation1 has been-- 7i7 found in a proceeding brought by the ,commission1 or by agreement of settlement to which the ,commission is a party1 to have recklessly1 knowingly1 or willfully violated any provision of this ,act or of the rules1 regulations1 or orders of the ,commission thereunder2 7ii7 found in a proceeding brought by the ,securities and ,exchange ,commission1 or by agreement of settlement to which the ,securities and ,exchange ,commission is a party1 to have recklessly1 knowingly1 or willfully violated any provision of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;a et seq471 the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;a et seq471 the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#a et seq471 or the ,investment ,advisers ,act of #aidj 7#ae ,u4,s4,c4 #hj;b-#a et seq471 or of the rules1 regulations1 or orders of the ,commission thereunder2 7iii7 found in a proceeding brought by the ,federal ,energy ,regulatory ,commission1 or by agreement of settlement to which the ,federal ,energy ,regulatory ,commission is a party1 to have recklessly1 knowingly1 or willfully violated any provision of the ,federal ,power ,act 7#af ,u4,s4,c4 #gib et seq471 the ,natural ,gas ,act 7#ae ,u4,s4,c4 #gag et seq471 the ,public ,utility ,regulatory ,policies ,act of #aigh 7#af ,u4,s4,c4 #bfja et seq471 the ,natural ,gas ,policy ,act of #aigh 7#ae ,u4,s4,c4 #ccja et seq471 or the rules1 regulations1 or orders of the ,federal ,energy ,regulatory ,commission issued thereunder2 7iv7 convicted of any criminal violation of this ,act or of the rules1 regulations1 or orders of the ,commission thereunder2 7v7 convicted of any criminal violation of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;a et seq471 the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;a et seq471 the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#a et seq471 or the ,investment ,advisers ,act of #aidj 7#ae ,u4,s4,c4 #hj;b-#a et seq471 or of the rules1 regulations1 or orders of the ,securities and ,exchange ,commission thereunder2 or 7vi7 convicted of any other criminal offense that involves any conduct1 transaction1 advice or activity related to any commodity interest1 as that term is defined by the ,commission1 or security-based swap4 4 7e7 ,criminal penalties ,section #i7;a7 of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #ac7;a77 is amended in the matter preceding paragraph 7#a7 by inserting after #a1jjj1jjj the following3 in the case of an individual for each violation or #aj1jjj1jjj in the case of any person other than an individual for each violation14 7f7 ,statute of limitations ,section #i of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #ac7 is amended by adding at the end the following3 7f7 ,statute of limitations 7#a7 ,in general ,an action1 suit or proceeding for the enforcement of any civil fine1 penalty1 or forfeiture1 pecuniary or otherwise1 shall not be entertained unless commenced within #aj years after the date when the cause of action first accrued if1 within the same period1 the offender or the property is found within the ,united ,states in order that proper service may be made thereon4 7#b7 ,accrual ,a cause of action accrues as of the date the ,commission learns of facts sufficient to give the ,commission notice that a violation has occurred4 4 7g7 ,effective date ,the amendments made by this section shall take effect on the date that is #ij days after the date of the enactment of this ,act4 #ajc4 ,closing the cross-border loophole ,section #b7;i7 of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #b7;i77 is amended-- 7#a7 by redesignating paragraphs 7#a7 and 7#b7 as subparagraphs 7,a7 and 7,b71 respectively1 and adjusting the margins accordingly2 7#b7 in the matter preceding subparagraph 7,a71 as so redesignated1 by striking ,the provisions and inserting the following3 7#a7 ,in general ,the provisions 2 7#c7 in paragraph 7#a71 as so designated-- 7,a7 in subparagraph 7,a71 as so redesignated1 by striking or at the end2 7,b7 in subparagraph 7,b71 as so redesignated1 by striking the period at the end and inserting 2 or2 and 7,c7 by adding at the end the following3 7,c7 except as provided in paragraph 7#b71 involve a swaps transaction in which a financial entity that is domiciled or organized in the ,united ,states1 or a subsidiary entity that is majority owned or controlled by a financial entity that is domiciled or organized in the ,united ,states1 bears swaps-related risks4 2 and 7#d7 by adding at the end the following3 7#b7 ,substituted compliance ,notwithstanding paragraph 7#a77;,c71 the ,commission may allow a swaps transaction that involves a subsidiary entity that is majority owned or controlled by a financial entity that is domiciled or organized in the ,united ,states to be conducted in whole or in part under the rules and oversight of a foreign jurisdiction if the ,commission determines1 by rule1 that-- 7,a7 the applicable elements of the foreign rules are substantively equivalent to1 or offer greater protection than1 the applicable rules in the ,united ,states2 and 7,b7 enforcement of and oversight with respect to the rules described in subparagraph 7,a7 is not less stringent than enforcement of and oversight with respect to the applicable rules in the ,united ,states4 4 #ajd4 ,providing oversight of foreign exchange swaps ,section #a;a7#dg7 of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #a;a7#dg77 is amended by striking subparagraph 7,e7 and inserting the following3 7,e7 ,treatment of foreign exchange swaps and forwards ,foreign exchange swaps and foreign exchange forwards shall be considered swaps under this paragraph4 4 #aje4 ,improving data sharing between regulators ,section #ba of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #bd;a7 is amended by adding at the end the following3 7i7 ,data sharing ,the ,commission shall make data with respect to any person that is required to be registered as a swap data repository under this section available to any other financial regulatory agency-- 7#a7 upon request2 and 7#b7 as soon as is practicable after receiving a request4 4 #ajf4 ,improving data quality and accessibility ,section #ds of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #fs7 is amended by adding at the end the following3 7m7 ,data quality and accessibility 7#a7 ,in general ,not later than #b years after the date of enactment of this subsection1 the ,commission and the ,securities and ,exchange ,commission shall determine whether the data that swap dealers registered under this section provide to swap data repositories-- 7,a7 are accurate2 and 7,b7 use consistent and standardized formats that allow that data to be aggregated and analyzed by regulators4 7#b7 ,penalty ,the ,commission shall revoke the license of any swap dealer that the ,commission and the ,securities and ,exchange ,commission has found violated paragraph 7#a74 4 ,,ii ,shifting derivatives risks from taxpayers to financial institutions #bja4 ,ending favorable treatment ,section #efj of title #aa1 ,united ,states ,code1 is repealed4 #bjb4 ,reversing the ,,cftc's interaffiliate margin exception ,not later than #ahj days after the date of enactment of this ,act1 the ,commodity ,futures ,trading ,commission shall modify the rule on margin requirements entitled ,margin ,requirements for ,uncleared ,swaps for ,swap ,dealers and ,major ,swap ,participants 7#ha ,fed4 ,reg4 #fcf 7,january #f1 #bjaf77 to require entities to collect margin in all interaffiliate swaps4 #bjc4 ,banning closeout netting for capital purposes2 ensuring minimum capital ,section #afe7;b77#a7 of the ,financial ,stability ,act of #bjaj 7#ab ,u4,s4,c4 #ecfe7;b77#a77 is amended by adding at the end the following3 7,c7 ,consolidated assets 7i7 ,definition ,in this subparagraph1 the term covered financial institution means-- 7,i7 a swap dealer registered under section #ds of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #fs72 7,,ii7 a security-based swap dealer1 as defined in section #c7;a7 of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;c7a772 7,,iii7 an insured depository institution1 as defined in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac72 7,,iv7 a nonbank financial company supervised by the ,board of ,governors2 7,v7 a major swap participant1 as defined in section #a;a of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #a;a72 7,,vi7 a bank holding company described in subsection 7a72 and 7,,vii7 any subsidiary of a bank holding company described in subsection 7a74 7ii7 ,in general ,for purposes of determining the amount of capital required under the risk-based capital requirements and leverage limits required under subparagraph 7,a77i71 consolidated assets shall include the fair value and potential future exposure of derivatives exposures1 without recognizing the benefits of any netting arrangement1 unless the netting arrangement-- 7,i7 7aa7 is documented under a formal master netting agreement or other formal arrangement with a derivatives clearing organization registered with a primary ,federal financial regulatory agency2 and 7bb7 meets financial standards approved by the ,board of ,governors and the ,corporation2 or 7,,ii7 7aa7 is documented under a formal master netting agreement with a counterparty2 and 7bb7 requires the covered financial institution1 as a matter of ongoing business practice1 to-- 7,,aa7 exchange collateral daily for the fulfillment of variation margin requirements on a net basis2 and 7,,bb7 fulfill all contractual payment requirements1 including payments for contract determination1 on a net basis1 with such net exchange of collateral and payments encompassing all derivatives exposures covered by the formal arrangement4 7,d7 ,total derivatives risk exposures ,for purposes of determining the amount of capital required under leverage limits required under subparagraph 7,a77i7-- 7i7 total derivatives risk exposures shall not be assessed at a level less than #b percent of total gross notional derivatives contracts to which the covered financial institution1 as defined in subparagraph 7,c77i71 is a party2 and 7ii7 such leverage limits shall not vary for derivatives exposures as compared to other assets4 4 #bjd4 ,report on clearinghouses 7a7 ,in general ,not later than #a year after the date of enactment of this ,act1 the ,commodity ,futures ,trading ,commission1 the ,office of the ,comptroller of the ,currency1 the ,federal ,deposit ,insurance ,corporation1 and the ,board of ,governors of the ,federal ,reserve ,system shall jointly publish a report that answers the following questions3 7#a7 ,are prefunded default funds at major clearinghouses1 along with prefunded liquidity resources1 adequate to absorb losses and continue operations in the event of the failure of multiple large clearing members during a systemic stress event affecting the financial system as a whole8 7#b7 ,are capital and liquidity resources associated with cleared derivatives at clearinghouse members adequate to meet clearinghouse capital and margin calls that might occur during a systemic stress event associated with the failure of multiple large clearing members during a systemic stress event8 7#c7 ,based on planned resource levels at clearinghouses and major clearing members1 in what ways might a lack of prefunded resources at a clearing house1 or the level of member capital and liquidity resources associated with cleared derivatives1 contribute to increased financial system stress during a systemic event8 7#d7 ,how would the answers to the questions in paragraphs 7#a7 through 7#c7 be affected if portfolio correlation levels in clearinghouse margin and default fund models were significantly lower than those assumed in current risk models8 7#e7 ,are such lower correlation levels possible in a stress event8 7#f7 ,are capital levels held by clearinghouses currently adequate to align risk management incentives between clearinghouses themselves1 their members1 and end user clients of their members8 7#g7 ,do the fiduciary duties of clearinghouse management to their stockholders in any way conflict with the public interest8 7b7 ,policy recommendations ,the report required under subsection 7a7 shall contain policy recommendations associated with the answers to the questions posed under paragraphs 7#a7 through 7#g7 of that subsection4