H. R. 992
IN THE SENATE OF THE UNITED STATES
October 31, 2013
Received; read twice and referred to the Committee on Banking, Housing, and Urban Affairs
To amend provisions in section 716 of the Dodd-Frank Wall Street Reform and Consumer Protection Act relating to Federal assistance for swaps entities.
This Act may be cited as the
Swaps Regulatory Improvement Act.
Reform of prohibition on swap activity assistance
Section 716 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (15 U.S.C. 8305) is amended—
in subsection (b)—
in paragraph (2)(B), by striking
insured depository institution and inserting
covered depository institution; and
by adding at the end the following:
Covered depository institution
The term covered depository institution means—
an insured depository institution, as that term is defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813); and
a United States uninsured branch or agency of a foreign bank.
in subsection (c)—
in the heading for such subsection, by striking
insured and inserting
an insured and inserting
such insured and inserting
such covered; and
or savings and loan holding company and inserting
savings and loan holding company, or foreign banking organization (as such term is defined under Regulation K of the Board of Governors of the Federal Reserve System (12 C.F.R. 211.21(o)));
by amending subsection (d) to read as follows:
Only bona fide hedging and traditional bank activities permitted
The prohibition in subsection (a) shall not apply to any covered depository institution that limits its swap and security-based swap activities to the following:
Hedging and other similar risk mitigation activities
Hedging and other similar risk mitigating activities directly related to the covered depository institution's activities.
Non-structured finance swap activities
Acting as a swaps entity for swaps or security-based swaps other than a structured finance swap.
Certain structured finance swap activities
Acting as a swaps entity for swaps or security-based swaps that are structured finance swaps, if—
such structured finance swaps are undertaken for hedging or risk management purposes; or
each asset-backed security underlying such structured finance swaps is of a credit quality and of a type or category with respect to which the prudential regulators have jointly adopted rules authorizing swap or security-based swap activity by covered depository institutions.
For purposes of this subsection:
Structured finance swap
The term structured finance swap means a swap or security-based swap based on an asset-backed security (or group or index primarily comprised of asset-backed securities).
The term asset-backed security has the meaning given such term under section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).
in subsection (e), by striking
an insured and inserting
a covered; and
in subsection (f)—
an insured depository and inserting
a covered depository; and
the insured depository each place such term appears and inserting
the covered depository.
Passed the House of Representatives October 30, 2013.
Karen L. Haas,