H.R. 3527 (112th): Protecting Main Street End-Users From Excessive Regulation

HR 3527 RH

To amend the Commodity Exchange Act to clarify the definition of swap dealer.

November 30, 2011

Mr. HULTGREN (for himself, Mr. BOREN, Mrs. BIGGERT, Mr. DOLD, Mr. JOHNSON of Illinois, Mr. LANCE, Mr. KINZINGER of Illinois, Mr. MANZULLO, and Mr. SCHOCK) introduced the following bill; which was referred to the Committee on Agriculture

February 8, 2012

Additional sponsors: Mr. BARROW, Mr. KING of New York, Mr. MATHESON, and Mr. ROSS of Arkansas

February 8, 2012

Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed

[Strike out all after the enacting clause and insert the part printed in italic]

To amend the Commodity Exchange Act to clarify the definition of swap dealer.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

[Struck out->] SECTION 1. SHORT TITLE. [<-Struck out]

[Struck out->] This Act may be cited as the ‘Protecting Main Street End-Users From Excessive Regulation’. [<-Struck out]

[Struck out->] SEC. 2. CLARIFICATION OF THE DEFINITION OF SWAP DEALER. [<-Struck out]

[Struck out->] Section 1a(49) of the Commodity Exchange Act (7 U.S.C. 1a(49)) is amended to read as follows: [<-Struck out]

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‘(49) SWAP DEALER- [<-Struck out]

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‘(A) IN GENERAL- The term ‘swap dealer’ means any person who is engaged in the business of entering into swaps, and-- [<-Struck out]

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‘(i) holds itself out as a dealer in swaps; [<-Struck out]

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‘(ii) makes a market in swaps; or [<-Struck out]

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‘(iii) engages in any activity causing the person to be commonly known as a dealer or market maker in swaps, [<-Struck out]

[Struck out->] provided however, in no event shall an insured depository institution be considered to be a swap dealer to the extent it offers to enter into a swap with a customer in connection with originating a loan to the customer. [<-Struck out]

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‘(B) INCLUSION- A person may be designated as a swap dealer for a single type or single class or category of swap or activities and considered not to be a swap dealer for other types, classes, or categories of swaps or activities. [<-Struck out]

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‘(C) EXCEPTION- In determining whether a person is a ‘swap dealer’ within the meaning of subparagraph (A), no consideration shall be given to any transaction entered into for the person’s own account for the purpose of-- [<-Struck out]

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‘(i) hedging or mitigating commercial risk; or [<-Struck out]

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‘(ii) achieving the person’s own trading or investment objectives. [<-Struck out]

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‘(D) DE MINIMIS EXCEPTION- The Commission shall exempt from designation as a swap dealer an entity that enters into swap dealing transactions with or on behalf of the person’s customers if the aggregate gross notional amount of the outstanding swap dealing transactions entered into over the course of the preceding calendar year does not exceed $3,000,000,000 (or such greater amount as the Commission may establish as market conditions warrant), multiplied by the sum of 1 and the percentage (if any) by which the Consumer Price Index for all Urban Customers published by the Bureau of Labor Statistics of the Department of Labor changed for the 12-month period ending the preceding April 30.’. [<-Struck out]

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Protecting Main Street End-Users From Excessive Regulation’.

SEC. 2. CLARIFICATION OF THE DEFINITION OF SWAP DEALER.

Section 1a(49) of the Commodity Exchange Act (7 U.S.C. 1a(49)) is amended to read as follows:

‘(49) SWAP DEALER-

‘(A) IN GENERAL- The term ‘swap dealer’ means any person who--

‘(i) holds itself out as a dealer in swaps;

‘(ii) makes a market in swaps;

‘(iii) regularly enters into swaps with counterparties as an ordinary course of business for its own account; or

‘(iv) engages in any activity causing the person to be commonly known as a dealer or market maker in swaps,

provided however, in no event shall an insured depository institution be considered to be a swap dealer to the extent it offers to enter into a swap with a customer in connection with originating a loan to the customer.

‘(B) INCLUSION- A person may be designated as a swap dealer for a single type or single class or category of swap or activities and considered not to be a swap dealer for other types, classes, or categories of swaps or activities.

‘(C) EXCEPTIONS-

‘(i) The term ‘swap dealer’ does not include a person that enters into swaps for such person’s own account, either individually or in a fiduciary capacity, but not as part of regular business activities as described in subparagraph (A).

‘(ii) In determining whether a person is a ‘swap dealer’ within the meaning of subparagraph (A), any transaction entered into for a person’s own account for the purpose of hedging or mitigating commercial risk shall not be considered as part of that determination.

‘(iii) The Commission shall by rule adopt standards distinguishing the activities described in subparagraph (A) and entering into swaps for a person’s own account for the purpose of achieving one’s own trading objectives as determined by the Commission.

‘(D) DE MINIMIS EXCEPTION- The Commission shall exempt from designation as a swap dealer an entity that enters into swap dealing transactions with or on behalf of the person’s customers if the aggregate gross notional amount of the outstanding swap dealing transactions entered into over the course of the preceding calendar year does not exceed $3,000,000,000 (or such greater amount as the Commission may establish as market conditions warrant), multiplied by the sum of 1 and the percentage (if any) by which the Consumer Price Index for all Urban Customers published by the Bureau of Labor Statistics of the Department of Labor changed for the 12-month period ending the preceding April 30.’.

SEC. 3. IMPLEMENTATION.

The amendments made by this Act shall be implemented--

(1) without regard to--

(A) chapter 35 of title 44, United States Code; and

(B) the notice and comment provisions of section 553 of title 5, United States Code; and

(2) through the promulgation of an interim final rule.

Union Calendar No. 270

To amend the Commodity Exchange Act to clarify the definition of swap dealer.

February 8, 2012

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