,i #aaf? ,,congress #a/ ,session ,h4 ,r4 #dgbf ,,9 ,,! ,,h\se ,,( ,,repres5tatives ,octob] #ag1 #bjai,mr4 ,m>%all introduc$ ! foll[+ bill2 :i* 0 ref]r$ to ! ,committee on ,agriculture ,a ,,bill ,to help end-us]s bett] utilize d]ivatives m>kets by ref9+ ! def9ition ( f9ancial entity1 cl>ify+ h[ affiliates c utilize ! end-us] exception1 & h>moniz+ cle>+ & m>g9 exemptions4 #a4 ,%ort title ,?is ,act may be cit$ z ! ,c]ta9ty = ,end-,us]s ,act4 #b4 ,cl>ify+ ! f9ancial entity def9ition 7a7 ,9 g5]al ,section #b7;h7 ( ! ,commodity ,ex*ange ,act 7#g ,u4,s4,c4 #b7;h77 is am5d$-- 7#a7 by /rik+ p>agraph 7#a77;,a7 & ins]t+ ! foll[+3 7,a7 ,/&>d = cle>+ ,x %all be unlawful = a f9ancial entity to engage 9 a swap ) ano!r f9ancial entity1 unless ! swap is submitt$ = cle>+ to a d]ivatives cle>+ organization regi/]$ "u ?is ,act or a d]ivatives cle>+ organization exempt f regi/ration "u ?is ,act if ! swap is requir$ to be cle>$4 2 & 7#b7 9 p>agraph 7#g7-- 7,a7 9 ! p>agraph head+1 by /rik+ ,exceptions & ins]t+ ,application ( cle>+ requirem5t2 7,b7 by /rik+ subp>agraphs 7,a7 & 7,b7 & r$esignat+ subp>agraph 7,c7 z subp>agraph 7,a72 7,c7 9 subp>agraph 7,a7 7z s r$esignat$7-- 7i7 by /rik+ clause 7i7 & ins]t+ ! foll[+3 7i7 ,9 g5]al ,9 ?is subsection1 ! t]m f9ancial entity means ! foll[+3 7,i7 ,in/itutions n /atutorily exempt$ 7aa7 ,a f9ancial in/itution4 7bb7 ,a swap deal]4 7cc7 ,a security-bas$ swap deal]4 7dd7 ,a major swap p>ticipant4 7ee7 ,a major security-bas$ swap p>ticipant4 7ff7 ,a commodity pool t is requir$ to be op]at$ by a commodity pool op]ator regi/]$ ) ! ,commission1 or a =eign p]son t w\ld be su* a commodity pool if ! =eign p]son 7 organiz$ "u ! laws ( ! ,unit$ ,/ates or any ,/ate4 7gg7 ,an inve/m5t company 7z def9$ 9 section #c ( ! ,inve/m5t ,company ,act ( #aidj 7#ae ,u4,s4,c4 #hj;a-#c771 or a =eign p]son t w\ld be su* an inve/m5t company if ! =eign p]son 7 organiz$ "u ! laws ( ! ,unit$ ,/ates or any ,/ate4 7,,ii7 ,private funds ,a private fund z def9$ 9 section #bjb7;a7 ( ! ,inve/m5t ,advis]s ,act ( #aidj 7#ae ,u4,s4,c4 #hj-;b-#b7;a771 or a =eign p]son t w\ld be su* a private fund if ! =eign p]son 7 organiz$ "u ! laws ( ! ,unit$ ,/ates or any ,/ate4 7,,iii7 ,o!r p]sons ,su* o!r p]sons ! ,commission det]m9es by rule to be pr$om9antly engag$ 9 activities t are f9ancial 9 nature4 ,9 mak+ su* a det]m9ation1 ! ,commission may consid] section #d7k7 ( ! ,bank ,hold+ ,company ,act ( #aief4 ,! ,commission %all promulgate regulations to c>ry out ?is subclause4 2 7ii7 9 clause 7iii71 by /rik+ ,su* def9ition & ins]t+ ,! t]m2 & 7iii7 by add+ at ! end ! foll[+3 7iv7 ,de m9imis exclusion 7,i7 ,am\nts ,a p]son describ$ 9 subclause 7,,iii71 & n subclause 7,i7 or 7,,ii71 ( clause 7i7 %all n be consid]$ a f9ancial entity = purposes ( ?is subsection if ! total swaps activity ( ! p]son1 :5 calculat$ ) ^? ( all o!r affiliat$ p]sons :o are s describ$1 am\nt to less ?an-- 7aa7 #a1jjj1jjj1jjj 9 gross notional swaps transactions calculat$ on ! basis ( a roll+ #ab-mon? p]iod2 or 7bb7 an alt]native de m9imis am\nt ( swaps activity1 exposure1 transactions1 or o!r measurem5t1 z det]m9$ by ! ,commission4 ,at lea/ e #e ye>s1 ! ,commission %all consid] modify+ ! alt]native de m9imis am\nt due to inflation or o!r m>ket factors4 7,,ii7 ,calculation ,! calculation "u subclause 7,i7 %all n include-- 7aa7 swaps us$ to h$ge or mitigate risk associat$ ) an asset own$ or liability incurr$ or reasonably likely to be own$ or incurr$ by an entity 9 ! conduct ( su* entity's bus9ess2 or 7bb7 swaps us$ by an insurance company = asset replication if !y are expressly p]mitt$ by ,/ate insurance regulators to be ent]$ into 9 conjunction ) o!r inve/m5ts 9 ord] to replicate ! inve/m5t *>act]i/ics ( o!rwise p]missible inve/m5ts4 7,,iii7 ,requirem5ts ( entities rely+ on ! de m9imis exclusion ,an entity t relies on ! de m9imis exception 9 ?is clause to avoid cle>+ swaps transactions t ! ,commission requires a f9ancial entity to cle> pursuant to p>agraph 7#a77;,a7 & ,commission regulations %all1 ) respect to ! swaps1 report or cause to be report$1 to a regi/]$ swap data repository ! reliance ( ! entity on ! de m9imis exclusion4 2 & 7,d7 by ins]t+ aft] subp>agraph 7,a7 7z am5d$ by ! prec$+ provisions ( ?is p>agraph7 ! foll[+3 7,b7 ,additional def9itions ,9 ?is subsection3 7i7 ,affiliate /atus #b entities are affiliat$ if-- 7,i7 #a ( ! entities1 directly or indirectly1 holds a majority own]%ip int]e/ 9 ! o!r entity2 or 7,,ii7 a ?ird p>ty1 directly or indirectly1 holds a majority own]%ip int]e/ 9 bo? entities4 7ii7 ,non-f9ancial entity ,! t]m non-f9ancial entity means-- 7,i7 a p]son n describ$ 9 subp>agraph 7,a77i72 or 7,,ii7 a p]son describ$ 9 clause 7ii71 7iii71 or 7iv7 ( subp>agraph 7,a74 7,c7 ,requirem5ts ( non-f9ancial entities ,a non-f9ancial entity t engages 9 swaps transactions t ! ,commission requires a f9ancial entity to cle> pursuant to p>agraph 7#a77;,a7 & ,commission regulations %all1 ) respect to ! swaps1 report or cause to be report$1 to a regi/]$ swap data repository _! /atus z a non-f9ancial entity4 4 #c4 ,simplify+ ! end-us] affiliate process ,section #b7;h77#g7 ( ! ,commodity ,ex*ange ,act 7#g ,u4,s4,c4 #b7;h77#g771 z am5d$ by section #b ( ?is ,act1 is am5d$-- 7#a7 by /rik+ subp>agraph 7,d7 & ins]t+ ! foll[+3 7,d7 ,risk managem5t ?r\gh affiliates 7i7 ,exception ,! requirem5ts ( p>agraph 7#a77;,a7 %all n apply to a swap ent]$ into by a risk managem5t entity if ! swap is-- 7,i7 us$ to h$ge or mitigate eligible risk orig9at+ f "o or m affiliat$ non-f9ancial entities2 & 7,,ii7 n nett$1 comb9$1 or consolidat$ ) any o!r swap to :i* ! requirem5ts ( p>agraph 7#a77;,a7 apply4 7ii7 ,risk managem5t entity def9$ ,9 ?is subp>agraph1 ! t]m risk managem5t entity means-- 7,i7 an entity describ$ 9 subclause 7,,ii71 & n subclause 7,i71 ( subp>agraph 7,a77i71 t ent]s only into transactions relat$ to ! managem5t ( eligible risk2 7,,ii7 an entity describ$ 9 only subclause 7,,iii7 ( subp>agraph 7,a77i72 or 7,,iii7 a non-f9ancial entity4 7iii7 ,eligible risk def9$ ,9 ?is subp>agraph1 ! t]m eligible risk means risk t-- 7,i7 orig9ates f a non-f9ancial entity2 7,,ii7 is associat$ ) an asset own$ or liability incurr$ or reasonably likely to be own$ or incurr$ by ! non-f9ancial entity 9 ! conduct ( ! bus9ess ( ! non-f9ancial entity2 7,,iii7 is n nett$1 comb9$1 or consolidat$ ) risk orig9at+ f any affiliat$ f9ancial entity2 & 7,,iv7 if transf]r$1 is transf]r$ only to or ?r\gh "o or m affiliat$ risk managem5t entities4 7iv7 ,requirem5ts ( risk managem5t entities ,a risk managem5t entity t engages 9 swaps :i* utilize ! exception 9 ?is subp>agraph %all-- 7,i7 notify ! ,commission1 9 a mann] prescrib$ by ! ,commission1 h[ ! risk managem5t entity g5]ally meets ! f9ancial obligations ( ! risk managem5t entity associat$ ) ent]+ into non-cle>$ swaps2 7,,ii7 id5tify ^? swaps us$ to h$ge or mitigate eligible risk orig9at+ f "o or m affiliat$ non-f9ancial entities2 & 7,,iii7 ma9ta9 books & records ( ! swaps :i* utilize ! exception 9 ?is subp>agraph & ! relat$ eligible risk 9 su* =m & mann] & = su* p]iod z may be requir$ by ! ,commission4 7v7 ,no effect on non-f9ancial entities ,no?+ 9 ?is subp>agraph %all be int]pret$ to limit ! ability ( any non-f9ancial entity to engage 9 a swap to :i* ! requirem5ts ( p>agraph 7#a77;,a7 d n apply4 2 & 7#b7 by /rik+ subp>agraph 7,f7 & ins]t+ ! foll[+3 7,f7 ,abuse ( exception ,! ,commission may prescribe su* rules or issue su* int]pretations ( ! rules z ! ,commission det]m9es to be necess>y to prev5t abuse ( ! exceptions describ$ 9 ?is p>agraph4 ,! ,commission may reque/ in=mation f a p]son claim+ to be a non-f9ancial entity z necess>y to prev5t evasion ( ! rules or abuse ( ! exceptions describ$ 9 ?is p>agraph4 4 #d4 ,alignm5t ( m>g9 requirem5ts ,section #ds7e77#d7 ( ! ,commodity ,ex*ange ,act 7#g ,u4,s4,c4 #fs7e77#d77 is am5d$ to read z foll[s3 7#d7 ,exceptions to m>g9 requirem5ts 7,a7 ,9 g5]al ,p>agraphs 7#b77;,a77ii7 & 7#b77;,b77ii71 includ+ ! initial & v>iation m>g9 requirem5ts impos$ "u su* p>agraphs1 %all n apply to a swap-- 7i7 9 :i* a c\nt]p>ty is a non-f9ancial entity 7z def9$ 9 section #b7;h77#g77;,b77ii771 reg>dless ( :e!r ! swap is requir$ to be cle>$2 7ii7 t qualifies = ! exception provid$ 9 subp>agraph 7,d7 ( section #b7;h77#g71 or t w\ld s qualify if ! swap 7 requir$ to be cle>$2 or 7iii7 t qualifies = an exception or exemption f ! requirem5ts ( section #b7;h77#a77;,a7 pursuant to any ,commission rule1 regulation1 or ord]4 7,b7 ,pres]vation ( v>iation m>g9 ex*ange requirem5t applicable to c]ta9 insurance companies ,not)/&+ subp>agraph 7,a7 ( ?is p>agraph1 if an insurance company w\ld be a f9ancial entity = purposes ( section #b7;h7 if ! swaps describ$ 9 section #b7;h77#g77;,a77iv77,,ii77bb7 ( ! insurance company 7 n exclud$ f ! de m9imis calculation "u section #b7;h77#g77;,a77iv71 !n all swaps ( ! insurance company %all be subject to ! v>iation m>g9 requirem5ts ( p>agraphs 7#b77;,a77ii7 & 7#b77;,b77ii7 ( ?is subsection4 4 #e4 ,modification ( def9ition ( major swap p>ticipant ,section #a;a7#cc77;,a77iii77,i7 ( ! ,commodity ,ex*ange ,act 7#g ,u4,s4,c4 #a;a7#cc77;,a77iii77,i77 is am5d$ by ins]t+ 1 or a non-f9ancial entity t w\ld be consid]$ to be a f9ancial entity = purposes ( section #b7;h7 b = ! application ( ! de m9imis exclusion provid$ = 9 section #b7;h77#g77;,a77iv71 be=e t is highly4