,i  #aafth ,,congress  #ast ,session    
,h4 ,r4 #dgbf  ,,in ,,the ,,house ,,of  
,,representatives  ,october #ag1        
#bjai,mr4 ,marshall introduced the      
following bill2 which was referred to   
the ,committee on ,agriculture  ,a      
,,bill  ,to help end-users better       
utilize derivatives markets by refining 
the definition of financial entity1     
clarifying how affiliates can utilize   
the end-user exception1 and harmonizing 
clearing and margin exemptions4  #a4    
,short title ,this ,act may be cited as 
the ,certainty for ,end-,users ,act4    
#b4 ,clarifying the financial entity    
definition  7a7 ,in general ,section    
#b7;h7 of the ,commodity ,exchange ,act 
7#g ,u4,s4,c4 #b7;h77 is amended--  7#a7
 by striking paragraph 7#a77;,a7 and    
inserting the following3  7,a7 ,standard
 for clearing ,it shall be unlawful for 
a financial entity to engage in a swap  
with another financial entity1 unless   
the swap is submitted for clearing to a 
derivatives clearing organization       

registered under this ,act or a         
derivatives clearing organization exempt
 from registration under this ,act if   
the swap is required to be cleared4  2  
and  7#b7 in paragraph 7#g7-- 7,a7 in   
the paragraph heading1 by striking      
,exceptions and inserting ,application  
of clearing requirement2  7,b7 by       
striking subparagraphs 7,a7 and 7,b7 and
 redesignating subparagraph 7,c7 as     
subparagraph 7,a72  7,c7 in subparagraph
 7,a7 7as so redesignated7--  7i7 by    
striking clause 7i7 and inserting the   
following3  7i7 ,in general ,in this    
subsection1 the term financial entity   
means the following3  7,i7 ,institutions
 not statutorily exempted  7aa7 ,a      
financial institution4  7bb7 ,a swap    
dealer4  7cc7 ,a security-based swap    
dealer4  7dd7 ,a major swap participant4
  7ee7 ,a major security-based swap     
participant4  7ff7 ,a commodity pool    
that is required to be operated by a    
commodity pool operator registered with 
the ,commission1 or a foreign person    

that would be such a commodity pool if  
the foreign person were organized under 
the laws of the ,united ,states or any  
,state4  7gg7 ,an investment company 7as
 defined in section #c of the           
,investment ,company ,act of #aidj 7#ae 
,u4,s4,c4 #hj;a-#c771 or a foreign      
person that would be such an investment 
company if the foreign person were      
organized under the laws of the ,united 
,states or any ,state4  7,,ii7 ,private 
funds ,a private fund as defined in     
section #bjb7;a7 of the ,investment     
,advisers ,act of #aidj 7#ae ,u4,s4,c4  
#hj-;b-#b7;a771 or a foreign person that
 would be such a private fund if the    
foreign person were organized under the 
laws of the ,united ,states or any      
,state4  7,,iii7 ,other persons ,such   
other persons the ,commission determines
 by rule to be predominantly engaged in 
activities that are financial in nature4
 ,in making such a determination1 the   
,commission may consider section #d7k7  
of the ,bank ,holding ,company ,act of  

#aief4 ,the ,commission shall promulgate
 regulations to carry out this          
subclause4  2  7ii7 in clause 7iii71 by 
striking ,such definition and inserting 
,the term2 and  7iii7 by adding at the  
end the following3  7iv7 ,de minimis    
exclusion  7,i7 ,amounts ,a person      
described in subclause 7,,iii71 and not 
subclause 7,i7 or 7,,ii71 of clause 7i7 
shall not be considered a financial     
entity for purposes of this subsection  
if the total swaps activity of the      
person1 when calculated with those of   
all other affiliated persons who are so 
described1 amount to less than--  7aa7  
#a1jjj1jjj1jjj in gross notional swaps  
transactions calculated on the basis of 
a rolling #ab-month period2 or  7bb7 an 
alternative de minimis amount of swaps  
activity1 exposure1 transactions1 or    
other measurement1 as determined by the 
,commission4 ,at least every #e years1  
the ,commission shall consider modifying
 the alternative de minimis amount due  
to inflation or other market factors4   

7,,ii7 ,calculation ,the calculation    
under subclause 7,i7 shall not include--
 7aa7 swaps used to hedge or mitigate   
risk associated with an asset owned or  
liability incurred or reasonably likely 
to be owned or incurred by an entity in 
the conduct of such entity's business2  
or  7bb7 swaps used by an insurance     
company for asset replication if they   
are expressly permitted by ,state       
insurance regulators to be entered into 
in conjunction with other investments in
 order to replicate the investment      
characteristics of otherwise permissible
 investments4  7,,iii7 ,requirements of 
entities relying on the de minimis      
exclusion ,an entity that relies on the 
de minimis exception in this clause to  
avoid clearing swaps transactions that  
the ,commission requires a financial    
entity to clear pursuant to paragraph   
7#a77;,a7 and ,commission regulations   
shall1 with respect to the swaps1 report
 or cause to be reported1 to a          
registered swap data repository the     

reliance of the entity on the de minimis
 exclusion4  2 and  7,d7 by inserting   
after subparagraph 7,a7 7as amended by  
the preceding provisions of this        
paragraph7 the following3  7,b7         
,additional definitions ,in this        
subsection3 7i7 ,affiliate status #b    
entities are affiliated if--  7,i7 #a of
 the entities1 directly or indirectly1  
holds a majority ownership interest in  
the other entity2 or  7,,ii7 a third    
party1 directly or indirectly1 holds a  
majority ownership interest in both     
entities4  7ii7 ,non-financial entity   
,the term non-financial entity means--  
7,i7 a person not described in          
subparagraph 7,a77i72 or  7,,ii7 a      
person described in clause 7ii71 7iii71 
or 7iv7 of subparagraph 7,a74  7,c7     
,requirements of non-financial entities 
,a non-financial entity that engages in 
swaps transactions that the ,commission 
requires a financial entity to clear    
pursuant to paragraph 7#a77;,a7 and     
,commission regulations shall1 with     

respect to the swaps1 report or cause to
 be reported1 to a registered swap data 
repository their status as a            
non-financial entity4  4  #c4           
,simplifying the end-user affiliate     
process ,section #b7;h77#g7 of the      
,commodity ,exchange ,act 7#g ,u4,s4,c4 
#b7;h77#g771 as amended by section #b of
 this ,act1 is amended--  7#a7 by       
striking subparagraph 7,d7 and inserting
 the following3  7,d7 ,risk management  
through affiliates  7i7 ,exception ,the 
requirements of paragraph 7#a77;,a7     
shall not apply to a swap entered into  
by a risk management entity if the swap 
is--  7,i7 used to hedge or mitigate    
eligible risk originating from one or   
more affiliated non-financial entities2 
and  7,,ii7 not netted1 combined1 or    
consolidated with any other swap to     
which the requirements of paragraph     
7#a77;,a7 apply4  7ii7 ,risk management 
entity defined ,in this subparagraph1   
the term risk management entity means-- 
7,i7 an entity described in subclause   

7,,ii71 and not subclause 7,i71 of      
subparagraph 7,a77i71 that enters only  
into transactions related to the        
management of eligible risk2  7,,ii7 an 
entity described in only subclause      
7,,iii7 of subparagraph 7,a77i72 or     
7,,iii7 a non-financial entity4  7iii7  
,eligible risk defined ,in this         
subparagraph1 the term eligible risk    
means risk that-- 7,i7 originates from a
 non-financial entity2  7,,ii7 is       
associated with an asset owned or       
liability incurred or reasonably likely 
to be owned or incurred by the          
non-financial entity in the conduct of  
the business of the non-financial       
entity2  7,,iii7 is not netted1         
combined1 or consolidated with risk     
originating from any affiliated         
financial entity2 and  7,,iv7 if        
transferred1 is transferred only to or  
through one or more affiliated risk     
management entities4  7iv7 ,requirements
 of risk management entities ,a risk    
management entity that engages in swaps 

which utilize the exception in this     
subparagraph shall--  7,i7 notify the   
,commission1 in a manner prescribed by  
the ,commission1 how the risk management
 entity generally meets the financial   
obligations of the risk management      
entity associated with entering into    
non-cleared swaps2  7,,ii7 identify     
those swaps used to hedge or mitigate   
eligible risk originating from one or   
more affiliated non-financial entities2 
and  7,,iii7 maintain books and records 
of the swaps which utilize the exception
 in this subparagraph and the related   
eligible risk in such form and manner   
and for such period as may be required  
by the ,commission4  7v7 ,no effect on  
non-financial entities ,nothing in this 
subparagraph shall be interpreted to    
limit the ability of any non-financial  
entity to engage in a swap to which the 
requirements of paragraph 7#a77;,a7 do  
not apply4  2 and  7#b7 by striking     
subparagraph 7,f7 and inserting the     
following3  7,f7 ,abuse of exception    

,the ,commission may prescribe such     
rules or issue such interpretations of  
the rules as the ,commission determines 
to be necessary to prevent abuse of the 
exceptions described in this paragraph4 
,the ,commission may request information
 from a person claiming to be a         
non-financial entity as necessary to    
prevent evasion of the rules or abuse of
 the exceptions described in this       
paragraph4  4  #d4 ,alignment of margin 
requirements ,section #ds7e77#d7 of the 
,commodity ,exchange ,act 7#g ,u4,s4,c4 
#fs7e77#d77 is amended to read as       
follows3  7#d7 ,exceptions to margin    
requirements  7,a7 ,in general          
,paragraphs 7#b77;,a77ii7 and           
7#b77;,b77ii71 including the initial and
 variation margin requirements imposed  
under such paragraphs1 shall not apply  
to a swap--  7i7 in which a counterparty
 is a non-financial entity 7as defined  
in section #b7;h77#g77;,b77ii771        
regardless of whether the swap is       
required to be cleared2  7ii7 that      

qualifies for the exception provided in 
subparagraph 7,d7 of section #b7;h77#g71
 or that would so qualify if the swap   
were required to be cleared2 or  7iii7  
that qualifies for an exception or      
exemption from the requirements of      
section #b7;h77#a77;,a7 pursuant to any 
,commission rule1 regulation1 or order4 
7,b7 ,preservation of variation margin  
exchange requirement applicable to      
certain insurance companies             
,notwithstanding subparagraph 7,a7 of   
this paragraph1 if an insurance company 
would be a financial entity for purposes
 of section #b7;h7 if the swaps         
described in section                    
#b7;h77#g77;,a77iv77,,ii77bb7 of the    
insurance company were not excluded from
 the de minimis calculation under       
section #b7;h77#g77;,a77iv71 then all   
swaps of the insurance company shall be 
subject to the variation margin         
requirements of paragraphs 7#b77;,a77ii7
 and 7#b77;,b77ii7 of this subsection4  
4  #e4 ,modification of definition of   

major swap participant ,section         
#a;a7#cc77;,a77iii77,i7 of the          
,commodity ,exchange ,act 7#g ,u4,s4,c4 
#a;a7#cc77;,a77iii77,i77 is amended by  
inserting 1 or a non-financial entity   
that would be considered to be a        
financial entity for purposes of section
 #b7;h7 but for the application of the  
de minimis exclusion provided for in    
section #b7;h77#g77;,a77iv71 before that
 is highly4