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PUBLIC LAW 111–203—JULY 21, 2010

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DODD-FRANK WALL STREET REFORM AND
CONSUMER PROTECTION ACT

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124 STAT. 1376

PUBLIC LAW 111–203—JULY 21, 2010

Public Law 111–203
111th Congress
An Act
July 21, 2010
[H.R. 4173]

Dodd-Frank Wall
Street Reform
and Consumer
Protection Act.
12 USC 5301
note.

To promote the financial stability of the United States by improving accountability
and transparency in the financial system, to end ‘‘too big to fail’’, to protect
the American taxpayer by ending bailouts, to protect consumers from abusive
financial services practices, and for other purposes.

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE.—This Act may be cited as the ‘‘Dodd-Frank
Wall Street Reform and Consumer Protection Act’’.
(b) TABLE OF CONTENTS.—The table of contents for this Act
is as follows:
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

1.
2.
3.
4.
5.
6.

Short title; table of contents.
Definitions.
Severability.
Effective date.
Budgetary effects.
Antitrust savings clause.
TITLE I—FINANCIAL STABILITY

Sec. 101. Short title.
Sec. 102. Definitions.

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Subtitle A—Financial Stability Oversight Council
Sec. 111. Financial Stability Oversight Council established.
Sec. 112. Council authority.
Sec. 113. Authority to require supervision and regulation of certain nonbank financial companies.
Sec. 114. Registration of nonbank financial companies supervised by the Board of
Governors.
Sec. 115. Enhanced supervision and prudential standards for nonbank financial
companies supervised by the Board of Governors and certain bank holding companies.
Sec. 116. Reports.
Sec. 117. Treatment of certain companies that cease to be bank holding companies.
Sec. 118. Council funding.
Sec. 119. Resolution of supervisory jurisdictional disputes among member agencies.
Sec. 120. Additional standards applicable to activities or practices for financial stability purposes.
Sec. 121. Mitigation of risks to financial stability.
Sec. 122. GAO Audit of Council.
Sec. 123. Study of the effects of size and complexity of financial institutions on capital market efficiency and economic growth.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

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151.
152.
153.
154.
155.
156.

Subtitle B—Office of Financial Research
Definitions.
Office of Financial Research established.
Purpose and duties of the Office.
Organizational structure; responsibilities of primary programmatic units.
Funding.
Transition oversight.

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1377

Subtitle C—Additional Board of Governors Authority for Certain Nonbank Financial
Companies and Bank Holding Companies
Sec. 161. Reports by and examinations of nonbank financial companies by the
Board of Governors.
Sec. 162. Enforcement.
Sec. 163. Acquisitions.
Sec. 164. Prohibition against management interlocks between certain financial
companies.
Sec. 165. Enhanced supervision and prudential standards for nonbank financial
companies supervised by the Board of Governors and certain bank holding companies.
Sec. 166. Early remediation requirements.
Sec. 167. Affiliations.
Sec. 168. Regulations.
Sec. 169. Avoiding duplication.
Sec. 170. Safe harbor.
Sec. 171. Leverage and risk-based capital requirements.
Sec. 172. Examination and enforcement actions for insurance and orderly liquidation purposes.
Sec. 173. Access to United States financial market by foreign institutions.
Sec. 174. Studies and reports on holding company capital requirements.
Sec. 175. International policy coordination.
Sec. 176. Rule of construction.
TITLE II—ORDERLY LIQUIDATION AUTHORITY
Definitions.
Judicial review.
Systemic risk determination.
Orderly liquidation of covered financial companies.
Orderly liquidation of covered brokers and dealers.
Mandatory terms and conditions for all orderly liquidation actions.
Directors not liable for acquiescing in appointment of receiver.
Dismissal and exclusion of other actions.
Rulemaking; non-conflicting law.
Powers and duties of the Corporation.
Miscellaneous provisions.
Prohibition of circumvention and prevention of conflicts of interest.
Ban on certain activities by senior executives and directors.
Prohibition on taxpayer funding.
Study on secured creditor haircuts.
Study on bankruptcy process for financial and nonbank financial institutions
Sec. 217. Study on international coordination relating to bankruptcy process for
nonbank financial institutions
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

201.
202.
203.
204.
205.
206.
207.
208.
209.
210.
211.
212.
213.
214.
215.
216.

TITLE III—TRANSFER OF POWERS TO THE COMPTROLLER OF THE
CURRENCY, THE CORPORATION, AND THE BOARD OF GOVERNORS
Sec. 300. Short title.
Sec. 301. Purposes.
Sec. 302. Definition.

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Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

311.
312.
313.
314.
315.
316.
317.
318.
319.

Subtitle A—Transfer of Powers and Duties
Transfer date.
Powers and duties transferred.
Abolishment.
Amendments to the Revised Statutes.
Federal information policy.
Savings provisions.
References in Federal law to Federal banking agencies.
Funding.
Contracting and leasing authority.

Subtitle B—Transitional Provisions
Sec. 321. Interim use of funds, personnel, and property of the Office of Thrift Supervision.
Sec. 322. Transfer of employees.
Sec. 323. Property transferred.
Sec. 324. Funds transferred.
Sec. 325. Disposition of affairs.
Sec. 326. Continuation of services.

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124 STAT. 1378

PUBLIC LAW 111–203—JULY 21, 2010

Sec. 327. Implementation plan and reports.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

331.
332.
333.
334.
335.
336.

Subtitle C—Federal Deposit Insurance Corporation
Deposit insurance reforms.
Elimination of procyclical assessments.
Enhanced access to information for deposit insurance purposes.
Transition reserve ratio requirements to reflect new assessment base.
Permanent increase in deposit and share insurance.
Management of the Federal Deposit Insurance Corporation.

Subtitle D—Other Matters
Sec. 341. Branching.
Sec. 342. Office of Minority and Women Inclusion.
Sec. 343. Insurance of transaction accounts.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
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351.
352.
353.
354.
355.
356.
357.
358.
359.
360.
361.
362.
363.
364.
365.
366.
367.
368.
369.
370.
371.
372.
373.
374.
375.
376.
377.
378.

Subtitle E—Technical and Conforming Amendments
Effective date.
Balanced Budget and Emergency Deficit Control Act of 1985.
Bank Enterprise Act of 1991.
Bank Holding Company Act of 1956.
Bank Holding Company Act Amendments of 1970.
Bank Protection Act of 1968.
Bank Service Company Act.
Community Reinvestment Act of 1977.
Crime Control Act of 1990.
Depository Institution Management Interlocks Act.
Emergency Homeowners’ Relief Act.
Federal Credit Union Act.
Federal Deposit Insurance Act.
Federal Home Loan Bank Act.
Federal Housing Enterprises Financial Safety and Soundness Act of 1992.
Federal Reserve Act.
Financial Institutions Reform, Recovery, and Enforcement Act of 1989.
Flood Disaster Protection Act of 1973.
Home Owners’ Loan Act.
Housing Act of 1948.
Housing and Community Development Act of 1992.
Housing and Urban-Rural Recovery Act of 1983.
National Housing Act.
Neighborhood Reinvestment Corporation Act.
Public Law 93–100.
Securities Exchange Act of 1934.
Title 18, United States Code.
Title 31, United States Code.

TITLE IV—REGULATION OF ADVISERS TO HEDGE FUNDS AND OTHERS
Sec. 401. Short title.
Sec. 402. Definitions.
Sec. 403. Elimination of private adviser exemption; limited exemption for foreign
private advisers; limited intrastate exemption.
Sec. 404. Collection of systemic risk data; reports; examinations; disclosures.
Sec. 405. Disclosure provision amendment.
Sec. 406. Clarification of rulemaking authority.
Sec. 407. Exemption of venture capital fund advisers.
Sec. 408. Exemption of and record keeping by private equity fund advisers.
Sec. 409. Family offices.
Sec. 410. State and Federal responsibilities; asset threshold for Federal registration
of investment advisers.
Sec. 411. Custody of client assets.
Sec. 412. Adjusting the accredited investor standard.
Sec. 413. GAO study and report on accredited investors.
Sec. 414. GAO study on self-regulatory organization for private funds.
Sec. 415. Commission study and report on short selling.
Sec. 416. Transition period.

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TITLE V—INSURANCE
Subtitle A—Office of National Insurance
Sec. 501. Short title.
Sec. 502. Federal Insurance Office.
Subtitle B—State-Based Insurance Reform
Sec. 511. Short title.

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1379

Sec. 512. Effective date.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

521.
522.
523.
524.
525.
526.
527.

PART I—NONADMITTED INSURANCE
Reporting, payment, and allocation of premium taxes.
Regulation of nonadmitted insurance by insured’s home State.
Participation in national producer database.
Uniform standards for surplus lines eligibility.
Streamlined application for commercial purchasers.
GAO study of nonadmitted insurance market.
Definitions.

PART II—REINSURANCE
Sec. 531. Regulation of credit for reinsurance and reinsurance agreements.
Sec. 532. Regulation of reinsurer solvency.
Sec. 533. Definitions.
PART III—RULE
Sec. 541. Rule of construction.
Sec. 542. Severability.

OF

CONSTRUCTION

TITLE VI—IMPROVEMENTS TO REGULATION OF BANK AND SAVINGS
ASSOCIATION HOLDING COMPANIES AND DEPOSITORY INSTITUTIONS
Sec. 601. Short title.
Sec. 602. Definition.
Sec. 603. Moratorium and study on treatment of credit card banks, industrial loan
companies, and certain other companies under the Bank Holding Company Act of 1956.
Sec. 604. Reports and examinations of holding companies; regulation of functionally
regulated subsidiaries.
Sec. 605. Assuring consistent oversight of permissible activities of depository institution subsidiaries of holding companies.
Sec. 606. Requirements for financial holding companies to remain well capitalized
and well managed.
Sec. 607. Standards for interstate acquisitions.
Sec. 608. Enhancing existing restrictions on bank transactions with affiliates.
Sec. 609. Eliminating exceptions for transactions with financial subsidiaries.
Sec. 610. Lending limits applicable to credit exposure on derivative transactions,
repurchase agreements, reverse repurchase agreements, and securities
lending and borrowing transactions.
Sec. 611. Consistent treatment of derivative transactions in lending limits.
Sec. 612. Restriction on conversions of troubled banks.
Sec. 613. De novo branching into States.
Sec. 614. Lending limits to insiders.
Sec. 615. Limitations on purchases of assets from insiders.
Sec. 616. Regulations regarding capital levels.
Sec. 617. Elimination of elective investment bank holding company framework.
Sec. 618. Securities holding companies.
Sec. 619. Prohibitions on proprietary trading and certain relationships with hedge
funds and private equity funds.
Sec. 620. Study of bank investment activities.
Sec. 621. Conflicts of interest.
Sec. 622. Concentration limits on large financial firms.
Sec. 623. Interstate merger transactions.
Sec. 624. Qualified thrift lenders.
Sec. 625. Treatment of dividends by certain mutual holding companies.
Sec. 626. Intermediate holding companies.
Sec. 627. Interest-bearing transaction accounts authorized.
Sec. 628. Credit card bank small business lending.
TITLE VII—WALL STREET TRANSPARENCY AND ACCOUNTABILITY
Sec. 701. Short title.

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Subtitle A—Regulation of Over-the-Counter Swaps Markets
Sec.
Sec.
Sec.
Sec.
Sec.

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712.
713.
714.
715.

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PART I—REGULATORY AUTHORITY
Definitions.
Review of regulatory authority.
Portfolio margining conforming changes.
Abusive swaps.
Authority to prohibit participation in swap activities.

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124 STAT. 1380

PUBLIC LAW 111–203—JULY 21, 2010

Sec.
Sec.
Sec.
Sec.
Sec.

716.
717.
718.
719.
720.

Prohibition against Federal Government bailouts of swaps entities.
New product approval CFTC—SEC process.
Determining status of novel derivative products.
Studies.
Memorandum.

Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
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Sec.
Sec.
Sec.
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Sec.
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721.
722.
723.
724.
725.
726.
727.
728.
729.
730.
731.
732.
733.
734.
735.
736.
737.
738.
739.
740.
741.
742.
743.
744.
745.
746.
747.
748.
749.
750.
751.
752.
753.
754.

PART II—REGULATION OF SWAP MARKETS
Definitions.
Jurisdiction.
Clearing.
Swaps; segregation and bankruptcy treatment.
Derivatives clearing organizations.
Rulemaking on conflict of interest.
Public reporting of swap transaction data.
Swap data repositories.
Reporting and recordkeeping.
Large swap trader reporting.
Registration and regulation of swap dealers and major swap participants.
Conflicts of interest.
Swap execution facilities.
Derivatives transaction execution facilities and exempt boards of trade.
Designated contract markets.
Margin.
Position limits.
Foreign boards of trade.
Legal certainty for swaps.
Multilateral clearing organizations.
Enforcement.
Retail commodity transactions.
Other authority.
Restitution remedies.
Enhanced compliance by registered entities.
Insider trading.
Antidisruptive practices authority.
Commodity whistleblower incentives and protection.
Conforming amendments.
Study on oversight of carbon markets.
Energy and environmental markets advisory committee.
International harmonization.
Anti-manipulation authority.
Effective date.

Sec.
Sec.
Sec.
Sec.

761.
762.
763.
764.

Sec.
Sec.
Sec.
Sec.

765.
766.
767.
768.

Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

769.
770.
771.
772.
773.
774.

Subtitle B—Regulation of Security-Based Swap Markets
Definitions under the Securities Exchange Act of 1934.
Repeal of prohibition on regulation of security-based swap agreements.
Amendments to the Securities Exchange Act of 1934.
Registration and regulation of security-based swap dealers and major security-based swap participants.
Rulemaking on conflict of interest.
Reporting and recordkeeping.
State gaming and bucket shop laws.
Amendments to the Securities Act of 1933; treatment of security-based
swaps.
Definitions under the Investment Company Act of 1940.
Definitions under the Investment Advisers Act of 1940.
Other authority.
Jurisdiction.
Civil penalties.
Effective date.

TITLE VIII—PAYMENT, CLEARING, AND SETTLEMENT SUPERVISION
801. Short title.
802. Findings and purposes.
803. Definitions.
804. Designation of systemic importance.
805. Standards for systemically important financial market utilities and payment, clearing, or settlement activities.
Sec. 806. Operations of designated financial market utilities.
Sec. 807. Examination of and enforcement actions against designated financial
market utilities.
Sec. 808. Examination of and enforcement actions against financial institutions
subject to standards for designated activities.

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PUBLIC LAW 111–203—JULY 21, 2010
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

809.
810.
811.
812.
813.
814.

124 STAT. 1381

Requests for information, reports, or records.
Rulemaking.
Other authority.
Consultation.
Common framework for designated clearing entity risk management.
Effective date.

TITLE IX—INVESTOR PROTECTIONS AND IMPROVEMENTS TO THE
REGULATION OF SECURITIES
Sec. 901. Short title.
Subtitle A—Increasing Investor Protection
Sec. 911. Investor Advisory Committee established.
Sec. 912. Clarification of authority of the Commission to engage in investor testing.
Sec. 913. Study and rulemaking regarding obligations of brokers, dealers, and investment advisers.
Sec. 914. Study on enhancing investment adviser examinations.
Sec. 915. Office of the Investor Advocate.
Sec. 916. Streamlining of filing procedures for self-regulatory organizations.
Sec. 917. Study regarding financial literacy among investors.
Sec. 918. Study regarding mutual fund advertising.
Sec. 919. Clarification of Commission authority to require investor disclosures before purchase of investment products and services.
Sec. 919A. Study on conflicts of interest.
Sec. 919B. Study on improved investor access to information on investment advisers and broker-dealers.
Sec. 919C. Study on financial planners and the use of financial designations.
Sec. 919D. Ombudsman.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

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Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

Subtitle B—Increasing Regulatory Enforcement and Remedies
Authority to restrict mandatory pre-dispute arbitration.
Whistleblower protection.
Conforming amendments for whistleblower protection.
Implementation and transition provisions for whistleblower protection.
Collateral bars.
Disqualifying felons and other ‘‘bad actors’’ from Regulation D offerings.
Equal treatment of self-regulatory organization rules.
Clarification that section 205 of the Investment Advisers Act of 1940 does
not apply to State-registered advisers.
929. Unlawful margin lending.
929A. Protection for employees of subsidiaries and affiliates of publicly traded
companies.
929B. Fair Fund amendments.
929C. Increasing the borrowing limit on Treasury loans.
929D. Lost and stolen securities.
929E. Nationwide service of subpoenas.
929F. Formerly associated persons.
929G. Streamlined hiring authority for market specialists.
929H. SIPC Reforms.
929I. Protecting confidentiality of materials submitted to the Commission.
929J. Expansion of audit information to be produced and exchanged.
929K. Sharing privileged information with other authorities.
929L. Enhanced application of antifraud provisions.
929M. Aiding and abetting authority under the Securities Act and the Investment Company Act.
929N. Authority to impose penalties for aiding and abetting violations of the
Investment Advisers Act.
929O. Aiding and abetting standard of knowledge satisfied by recklessness.
929P. Strengthening enforcement by the Commission.
929Q. Revision to recordkeeping rule.
929R. Beneficial ownership and short-swing profit reporting.
929S. Fingerprinting.
929T. Equal treatment of self-regulatory organization rules.
929U. Deadline for completing examinations, inspections and enforcement actions.
929V. Security Investor Protection Act amendments.
929W. Notice to missing security holders.
929X. Short sale reforms.
929Y. Study on extraterritorial private rights of action.
929Z. GAO study on securities litigation.
921.
922.
923.
924.
925.
926.
927.
928.

Subtitle C—Improvements to the Regulation of Credit Rating Agencies
Sec. 931. Findings.

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124 STAT. 1382

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Sec. 932. Enhanced regulation, accountability, and transparency of nationally recognized statistical rating organizations.
Sec. 933. State of mind in private actions.
Sec. 934. Referring tips to law enforcement or regulatory authorities.
Sec. 935. Consideration of information from sources other than the issuer in rating
decisions.
Sec. 936. Qualification standards for credit rating analysts.
Sec. 937. Timing of regulations.
Sec. 938. Universal ratings symbols.
Sec. 939. Removal of statutory references to credit ratings.
Sec. 939A. Review of reliance on ratings.
Sec. 939B. Elimination of exemption from fair disclosure rule.
Sec. 939C. Securities and Exchange Commission study on strengthening credit rating agency independence.
Sec. 939D. Government Accountability Office study on alternative business models.
Sec. 939E. Government Accountability Office study on the creation of an independent professional analyst organization.
Sec. 939F. Study and rulemaking on assigned credit ratings.
Sec. 939G. Effect of Rule 436(g).
Sec. 939H. Sense of Congress.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

Subtitle D—Improvements to the Asset-Backed Securitization Process
941. Regulation of credit risk retention.
942. Disclosures and reporting for asset-backed securities.
943. Representations and warranties in asset-backed offerings.
944. Exempted transactions under the Securities Act of 1933.
945. Due diligence analysis and disclosure in asset-backed securities issues.
946. Study on the macroeconomic effects of risk retention requirements.

Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

951.
952.
953.
954.
955.
956.
957.

Subtitle E—Accountability and Executive Compensation
Shareholder vote on executive compensation disclosures.
Compensation committee independence.
Executive compensation disclosures.
Recovery of erroneously awarded compensation.
Disclosure regarding employee and director hedging.
Enhanced compensation structure reporting.
Voting by brokers.

Subtitle F—Improvements to the Management of the Securities and Exchange
Commission
Sec. 961. Report and certification of internal supervisory controls.
Sec. 962. Triennial report on personnel management.
Sec. 963. Annual financial controls audit.
Sec. 964. Report on oversight of national securities associations.
Sec. 965. Compliance examiners.
Sec. 966. Suggestion program for employees of the Commission.
Sec. 967. Commission organizational study and reform.
Sec. 968. Study on SEC revolving door.
Subtitle G—Strengthening Corporate Governance
Sec. 971. Proxy access.
Sec. 972. Disclosures regarding chairman and CEO structures.

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Subtitle H—Municipal Securities
Sec. 975. Regulation of municipal securities and changes to the board of the MSRB.
Sec. 976. Government Accountability Office study of increased disclosure to investors.
Sec. 977. Government Accountability Office study on the municipal securities markets.
Sec. 978. Funding for Governmental Accounting Standards Board.
Sec. 979. Commission Office of Municipal Securities.
Subtitle I—Public Company Accounting Oversight Board, Portfolio Margining, and
Other Matters
Sec. 981. Authority to share certain information with foreign authorities.
Sec. 982. Oversight of brokers and dealers.
Sec. 983. Portfolio margining.
Sec. 984. Loan or borrowing of securities.
Sec. 985. Technical corrections to Federal securities laws.
Sec. 986. Conforming amendments relating to repeal of the Public Utility Holding
Company Act of 1935.

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Sec. 987. Amendment to definition of material loss and nonmaterial losses to the
Deposit Insurance Fund for purposes of Inspector General reviews.
Sec. 988. Amendment to definition of material loss and nonmaterial losses to the
National Credit Union Share Insurance Fund for purposes of Inspector
General reviews.
Sec. 989. Government Accountability Office study on proprietary trading.
Sec. 989A. Senior investor protections.
Sec. 989B. Designated Federal entity inspectors general independence.
Sec. 989C. Strengthening Inspector General accountability.
Sec. 989D. Removal of Inspectors General of designated Federal entities.
Sec. 989E. Additional oversight of financial regulatory system.
Sec. 989F. GAO study of person to person lending.
Sec. 989G. Exemption for nonaccelerated filers.
Sec. 989H. Corrective responses by heads of certain establishments to deficiencies
identified by Inspectors General.
Sec. 989I. GAO study regarding exemption for smaller issuers.
Sec. 989J. Further promoting the adoption of the NAIC Model Regulations that enhance protection of seniors and other consumers.
Subtitle J—Securities and Exchange Commission Match Funding
Sec. 991. Securities and Exchange Commission match funding.
TITLE X—BUREAU OF CONSUMER FINANCIAL PROTECTION
Sec. 1001. Short title.
Sec. 1002. Definitions.
Subtitle A—Bureau of Consumer Financial Protection
Establishment of the Bureau of Consumer Financial Protection.
Executive and administrative powers.
Administration.
Consumer Advisory Board.
Coordination.
Appearances before and reports to Congress.
Funding; penalties and fines.
Effective date.

Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

1011.
1012.
1013.
1014.
1015.
1016.
1017.
1018.

Sec.
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Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

Subtitle B—General Powers of the Bureau
1021. Purpose, objectives, and functions.
1022. Rulemaking authority.
1023. Review of Bureau regulations.
1024. Supervision of nondepository covered persons.
1025. Supervision of very large banks, savings associations, and credit unions.
1026. Other banks, savings associations, and credit unions.
1027. Limitations on authorities of the Bureau; preservation of authorities.
1028. Authority to restrict mandatory pre-dispute arbitration.
1029. Exclusion for auto dealers.
1029A. Effective date.

Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

1031.
1032.
1033.
1034.
1035.
1036.
1037.

Sec.
Sec.
Sec.
Sec.

1041.
1042.
1043.
1044.

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Sec. 1045.
Sec. 1046.
Sec. 1047.
Sec. 1048.

Subtitle C—Specific Bureau Authorities
Prohibiting unfair, deceptive, or abusive acts or practices.
Disclosures.
Consumer rights to access information.
Response to consumer complaints and inquiries.
Private education loan ombudsman.
Prohibited acts.
Effective date.
Subtitle D—Preservation of State Law
Relation to State law.
Preservation of enforcement powers of States.
Preservation of existing contracts.
State law preemption standards for national banks and subsidiaries
clarified.
Clarification of law applicable to nondepository institution subsidiaries.
State law preemption standards for Federal savings associations and
subsidiaries clarified.
Visitorial standards for national banks and savings associations.
Effective date.
Subtitle E—Enforcement Powers

Sec. 1051. Definitions.

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124 STAT. 1384

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Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

1052.
1053.
1054.
1055.
1056.
1057.
1058.

Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

Subtitle F—Transfer of Functions and Personnel; Transitional Provisions
1061. Transfer of consumer financial protection functions.
1062. Designated transfer date.
1063. Savings provisions.
1064. Transfer of certain personnel.
1065. Incidental transfers.
1066. Interim authority of the Secretary.
1067. Transition oversight.

Sec.
Sec.
Sec.
Sec.

1071.
1072.
1073.
1074.

Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

Investigations and administrative discovery.
Hearings and adjudication proceedings.
Litigation authority.
Relief available.
Referrals for criminal proceedings.
Employee protection.
Effective date.

Subtitle G—Regulatory Improvements
Small business data collection.
Assistance for economically vulnerable individuals and families.
Remittance transfers.
Department of the Treasury study on ending the conservatorship of
Fannie Mae, Freddie Mac, and reforming the housing finance system.
1075. Reasonable fees and rules for payment card transactions.
1076. Reverse mortgage study and regulations.
1077. Report on private education loans and private educational lenders.
1078. Study and report on credit scores.
1079. Review, report, and program with respect to exchange facilitators.
1079A. Financial fraud provisions.

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Subtitle H—Conforming Amendments
Sec. 1081. Amendments to the Inspector General Act.
Sec. 1082. Amendments to the Privacy Act of 1974.
Sec. 1083. Amendments to the Alternative Mortgage Transaction Parity Act of
1982.
Sec. 1084. Amendments to the Electronic Fund Transfer Act.
Sec. 1085. Amendments to the Equal Credit Opportunity Act.
Sec. 1086. Amendments to the Expedited Funds Availability Act.
Sec. 1087. Amendments to the Fair Credit Billing Act.
Sec. 1088. Amendments to the Fair Credit Reporting Act and the Fair and Accurate Credit Transactions Act of 2003.
Sec. 1089. Amendments to the Fair Debt Collection Practices Act.
Sec. 1090. Amendments to the Federal Deposit Insurance Act.
Sec. 1091. Amendment to Federal Financial Institutions Examination Council Act
of 1978.
Sec. 1092. Amendments to the Federal Trade Commission Act.
Sec. 1093. Amendments to the Gramm-Leach-Bliley Act.
Sec. 1094. Amendments to the Home Mortgage Disclosure Act of 1975.
Sec. 1095. Amendments to the Homeowners Protection Act of 1998.
Sec. 1096. Amendments to the Home Ownership and Equity Protection Act of 1994.
Sec. 1097. Amendments to the Omnibus Appropriations Act, 2009.
Sec. 1098. Amendments to the Real Estate Settlement Procedures Act of 1974.
Sec. 1098A. Amendments to the Interstate Land Sales Full Disclosure Act.
Sec. 1099. Amendments to the Right to Financial Privacy Act of 1978.
Sec. 1100. Amendments to the Secure and Fair Enforcement for Mortgage Licensing Act of 2008.
Sec. 1100A. Amendments to the Truth in Lending Act.
Sec. 1100B. Amendments to the Truth in Savings Act.
Sec. 1100C. Amendments to the Telemarketing and Consumer Fraud and Abuse
Prevention Act.
Sec. 1100D. Amendments to the Paperwork Reduction Act.
Sec. 1100E. Adjustments for inflation in the Truth in Lending Act.
Sec. 1100F. Use of consumer reports.
Sec. 1100G. Small business fairness and regulatory transparency.
Sec. 1100H. Effective date.
Sec.
Sec.
Sec.
Sec.

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1101.
1102.
1103.
1104.

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TITLE XI—FEDERAL RESERVE SYSTEM PROVISIONS
Federal Reserve Act amendments on emergency lending authority.
Reviews of special Federal reserve credit facilities.
Public access to information.
Liquidity event determination.

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PUBLIC LAW 111–203—JULY 21, 2010
Sec.
Sec.
Sec.
Sec.
Sec.

1105.
1106.
1107.
1108.
1109.

Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

TITLE XII—IMPROVING ACCESS TO MAINSTREAM FINANCIAL
INSTITUTIONS
1201. Short title.
1202. Purpose.
1203. Definitions.
1204. Expanded access to mainstream financial institutions.
1205. Low-cost alternatives to payday loans.
1206. Grants to establish loan-loss reserve funds.
1207. Procedural provisions.
1208. Authorization of appropriations.
1209. Regulations.
1210. Evaluation and reports to Congress.

Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

1301.
1302.
1303.
1304.
1305.
1306.

124 STAT. 1385

Emergency financial stabilization.
Additional related amendments.
Federal Reserve Act amendments on Federal reserve bank governance.
Federal Reserve Act amendments on supervision and regulation policy.
GAO audit of the Federal Reserve facilities; publication of Board actions.

TITLE XIII—PAY IT BACK ACT
Short title.
Amendment to reduce TARP authorization.
Report.
Amendments to Housing and Economic Recovery Act of 2008.
Federal Housing Finance Agency report.
Repayment of unobligated ARRA funds.

TITLE XIV—MORTGAGE REFORM AND ANTI-PREDATORY LENDING ACT
Sec. 1400. Short title; designation as enumerated consumer law.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

1401.
1402.
1403.
1404.
1405.
1406.

Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

1411.
1412.
1413.
1414.
1415.
1416.
1417.
1418.

Sec. 1419.
Sec. 1420.
Sec. 1421.
Sec. 1422.

Subtitle A—Residential Mortgage Loan Origination Standards
Definitions.
Residential mortgage loan origination.
Prohibition on steering incentives.
Liability.
Regulations.
Study of shared appreciation mortgages.
Subtitle B—Minimum Standards For Mortgages
Ability to repay.
Safe harbor and rebuttable presumption.
Defense to foreclosure.
Additional standards and requirements.
Rule of construction.
Amendments to civil liability provisions.
Lender rights in the context of borrower deception.
Six-month notice required before reset of hybrid adjustable rate mortgages.
Required disclosures.
Disclosures required in monthly statements for residential mortgage
loans.
Report by the GAO.
State attorney general enforcement authority.

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Subtitle C—High-Cost Mortgages
Sec. 1431. Definitions relating to high-cost mortgages.
Sec. 1432. Amendments to existing requirements for certain mortgages.
Sec. 1433. Additional requirements for certain mortgages.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

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1441.
1442.
1443.
1444.
1445.
1446.
1447.
1448.
1449.
1450.

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Subtitle D—Office of Housing Counseling
Short title.
Establishment of Office of Housing Counseling.
Counseling procedures.
Grants for housing counseling assistance.
Requirements to use HUD-certified counselors under HUD programs.
Study of defaults and foreclosures.
Default and foreclosure database.
Definitions for counseling-related programs.
Accountability and transparency for grant recipients.
Updating and simplification of mortgage information booklet.

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124 STAT. 1386

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Sec. 1451. Home inspection counseling.
Sec. 1452. Warnings to homeowners of foreclosure rescue scams.
Subtitle E—Mortgage Servicing
Sec. 1461. Escrow and impound accounts relating to certain consumer credit transactions.
Sec. 1462. Disclosure notice required for consumers who waive escrow services.
Sec. 1463. Real Estate Settlement Procedures Act of 1974 amendments.
Sec. 1464. Truth in Lending Act amendments.
Sec. 1465. Escrows included in repayment analysis.
Subtitle F—Appraisal Activities
Sec. 1471. Property appraisal requirements.
Sec. 1472. Appraisal independence requirements.
Sec. 1473. Amendments relating to Appraisal Subcommittee of FFIEC, Appraiser
Independence Monitoring, Approved Appraiser Education, Appraisal
Management Companies, Appraiser Complaint Hotline, Automated
Valuation Models, and Broker Price Opinions.
Sec. 1474. Equal Credit Opportunity Act amendment.
Sec. 1475. Real Estate Settlement Procedures Act of 1974 amendment relating to
certain appraisal fees.
Sec. 1476. GAO study on the effectiveness and impact of various appraisal methods, valuation models and distributions channels, and on the Home
Valuation Code of conduct and the Appraisal Subcommittee.
Sec.
Sec.
Sec.
Sec.

1481.
1482.
1483.
1484.

Subtitle G—Mortgage Resolution and Modification
Multifamily mortgage resolution program.
Home Affordable Modification Program guidelines.
Public availability of information of Making Home Affordable Program.
Protecting tenants at foreclosure extension and clarification.

Subtitle H—Miscellaneous Provisions
Sec. 1491. Sense of Congress regarding the importance of government-sponsored
enterprises reform to enhance the protection, limitation, and regulation
of the terms of residential mortgage credit.
Sec. 1492. GAO study report on government efforts to combat mortgage foreclosure
rescue scams and loan modification fraud.
Sec. 1493. Reporting of mortgage data by State.
Sec. 1494. Study of effect of drywall presence on foreclosures.
Sec. 1495. Definition.
Sec. 1496. Emergency mortgage relief.
Sec. 1497. Additional assistance for Neighborhood Stabilization Program.
Sec. 1498. Legal assistance for foreclosure-related issues.
TITLE XV—MISCELLANEOUS PROVISIONS
Sec. 1501. Restrictions on use of United States funds for foreign governments; protection of American taxpayers.
Sec. 1502. Conflict minerals.
Sec. 1503. Reporting requirements regarding coal or other mine safety.
Sec. 1504. Disclosure of payments by resource extraction issuers.
Sec. 1505. Study by the Comptroller General.
Sec. 1506. Study on core deposits and brokered deposits.
TITLE XVI—SECTION 1256 CONTRACTS
Sec. 1601. Certain swaps, etc., not treated as section 1256 contracts.

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12 USC 5301.

SEC. 2. DEFINITIONS.

As used in this Act, the following definitions shall apply, except
as the context otherwise requires or as otherwise specifically provided in this Act:
(1) AFFILIATE.—The term ‘‘affiliate’’ has the same meaning
as in section 3 of the Federal Deposit Insurance Act (12 U.S.C.
1813).
(2) APPROPRIATE FEDERAL BANKING AGENCY.—On and after
the transfer date, the term ‘‘appropriate Federal banking
agency’’ has the same meaning as in section 3(q) of the Federal
Deposit Insurance Act (12 U.S.C. 1813(q)), as amended by
title III.

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124 STAT. 1387

(3) BOARD OF GOVERNORS.—The term ‘‘Board of Governors’’
means the Board of Governors of the Federal Reserve System.
(4) BUREAU.—The term ‘‘Bureau’’ means the Bureau of
Consumer Financial Protection established under title X.
(5) COMMISSION.—The term ‘‘Commission’’ means the Securities and Exchange Commission, except in the context of the
Commodity Futures Trading Commission.
(6) COMMODITY FUTURES TERMS.—The terms ‘‘futures
commission merchant’’, ‘‘swap’’, ‘‘swap dealer’’, ‘‘swap execution
facility’’, ‘‘derivatives clearing organization’’, ‘‘board of trade’’,
‘‘commodity trading advisor’’, ‘‘commodity pool’’, and ‘‘commodity
pool operator’’ have the same meanings as given the terms
in section 1a of the Commodity Exchange Act (7 U.S.C. 1
et seq.).
(7) CORPORATION.—The term ‘‘Corporation’’ means the Federal Deposit Insurance Corporation.
(8) COUNCIL.—The term ‘‘Council’’ means the Financial Stability Oversight Council established under title I.
(9) CREDIT UNION.—The term ‘‘credit union’’ means a Federal credit union, State credit union, or State-chartered credit
union, as those terms are defined in section 101 of the Federal
Credit Union Act (12 U.S.C. 1752).
(10) FEDERAL BANKING AGENCY.—The term—
(A) ‘‘Federal banking agency’’ means, individually, the
Board of Governors, the Office of the Comptroller of the
Currency, and the Corporation; and
(B) ‘‘Federal banking agencies’’ means all of the agencies referred to in subparagraph (A), collectively.
(11) FUNCTIONALLY REGULATED SUBSIDIARY.—The term
‘‘functionally regulated subsidiary’’ has the same meaning as
in section 5(c)(5) of the Bank Holding Company Act of 1956
(12 U.S.C. 1844(c)(5)).
(12) PRIMARY FINANCIAL REGULATORY AGENCY.—The term
‘‘primary financial regulatory agency’’ means—
(A) the appropriate Federal banking agency, with
respect to institutions described in section 3(q) of the Federal Deposit Insurance Act, except to the extent that an
institution is or the activities of an institution are otherwise
described in subparagraph (B), (C), (D), or (E);
(B) the Securities and Exchange Commission, with
respect to—
(i) any broker or dealer that is registered with
the Commission under the Securities Exchange Act
of 1934, with respect to the activities of the broker
or dealer that require the broker or dealer to be registered under that Act;
(ii) any investment company that is registered with
the Commission under the Investment Company Act
of 1940, with respect to the activities of the investment
company that require the investment company to be
registered under that Act;
(iii) any investment adviser that is registered with
the Commission under the Investment Advisers Act
of 1940, with respect to the investment advisory activities of such company and activities that are incidental
to such advisory activities;

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124 STAT. 1388

PUBLIC LAW 111–203—JULY 21, 2010
(iv) any clearing agency registered with the
Commission under the Securities Exchange Act of
1934, with respect to the activities of the clearing
agency that require the agency to be registered under
such Act;
(v) any nationally recognized statistical rating
organization registered with the Commission under the
Securities Exchange Act of 1934;
(vi) any transfer agent registered with the
Commission under the Securities Exchange Act of
1934;
(vii) any exchange registered as a national securities exchange with the Commission under the Securities Exchange Act of 1934;
(viii) any national securities association registered
with the Commission under the Securities Exchange
Act of 1934;
(ix) any securities information processor registered
with the Commission under the Securities Exchange
Act of 1934;
(x) the Municipal Securities Rulemaking Board
established under the Securities Exchange Act of 1934;
(xi) the Public Company Accounting Oversight
Board established under the Sarbanes-Oxley Act of
2002 (15 U.S.C. 7211 et seq.);
(xii) the Securities Investor Protection Corporation
established under the Securities Investor Protection
Act of 1970 (15 U.S.C. 78aaa et seq.); and
(xiii) any security-based swap execution facility,
security-based swap data repository, security-based
swap dealer or major security-based swap participant
registered with the Commission under the Securities
Exchange Act of 1934, with respect to the securitybased swap activities of the person that require such
person to be registered under such Act;
(C) the Commodity Futures Trading Commission, with
respect to—
(i) any futures commission merchant registered
with the Commodity Futures Trading Commission
under the Commodity Exchange Act (7 U.S.C. 1 et
seq.), with respect to the activities of the futures
commission merchant that require the futures commission merchant to be registered under that Act;
(ii) any commodity pool operator registered with
the Commodity Futures Trading Commission under
the Commodity Exchange Act (7 U.S.C. 1 et seq.),
with respect to the activities of the commodity pool
operator that require the commodity pool operator to
be registered under that Act, or a commodity pool,
as defined in that Act;
(iii) any commodity trading advisor or introducing
broker registered with the Commodity Futures Trading
Commission under the Commodity Exchange Act (7
U.S.C. 1 et seq.), with respect to the activities of the
commodity trading advisor or introducing broker that
require the commodity trading adviser or introducing
broker to be registered under that Act;

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1389

(iv) any derivatives clearing organization registered with the Commodity Futures Trading Commission under the Commodity Exchange Act (7 U.S.C.
1 et seq.), with respect to the activities of the derivatives clearing organization that require the derivatives
clearing organization to be registered under that Act;
(v) any board of trade designated as a contract
market by the Commodity Futures Trading Commission under the Commodity Exchange Act (7 U.S.C.
1 et seq.);
(vi) any futures association registered with the
Commodity Futures Trading Commission under the
Commodity Exchange Act (7 U.S.C. 1 et seq.);
(vii) any retail foreign exchange dealer registered
with the Commodity Futures Trading Commission
under the Commodity Exchange Act (7 U.S.C. 1 et
seq.), with respect to the activities of the retail foreign
exchange dealer that require the retail foreign
exchange dealer to be registered under that Act;
(viii) any swap execution facility, swap data repository, swap dealer, or major swap participant registered
with the Commodity Futures Trading Commission
under the Commodity Exchange Act (7 U.S.C. 1 et
seq.) with respect to the swap activities of the person
that require such person to be registered under that
Act; and
(ix) any registered entity under the Commodity
Exchange Act (7 U.S.C. 1 et seq.), with respect to
the activities of the registered entity that require the
registered entity to be registered under that Act;
(D) the State insurance authority of the State in which
an insurance company is domiciled, with respect to the
insurance activities and activities that are incidental to
such insurance activities of an insurance company that
is subject to supervision by the State insurance authority
under State insurance law; and
(E) the Federal Housing Finance Agency, with respect
to Federal Home Loan Banks or the Federal Home Loan
Bank System, and with respect to the Federal National
Mortgage Association or the Federal Home Loan Mortgage
Corporation.
(13) PRUDENTIAL STANDARDS.—The term ‘‘prudential standards’’ means enhanced supervision and regulatory standards
developed by the Board of Governors under section 165.
(14) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of the Treasury.
(15) SECURITIES TERMS.—The—
(A) terms ‘‘broker’’, ‘‘dealer’’, ‘‘issuer’’, ‘‘nationally recognized statistical rating organization’’, ‘‘security’’, and ‘‘securities laws’’ have the same meanings as in section 3 of
the Securities Exchange Act of 1934 (15 U.S.C. 78c);
(B) term ‘‘investment adviser’’ has the same meaning
as in section 202 of the Investment Advisers Act of 1940
(15 U.S.C. 80b–2); and
(C) term ‘‘investment company’’ has the same meaning
as in section 3 of the Investment Company Act of 1940
(15 U.S.C. 80a–3).

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124 STAT. 1390

PUBLIC LAW 111–203—JULY 21, 2010
(16) STATE.—The term ‘‘State’’ means any State, commonwealth, territory, or possession of the United States, the District
of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, American Samoa,
Guam, or the United States Virgin Islands.
(17) TRANSFER DATE.—The term ‘‘transfer date’’ means the
date established under section 311.
(18) OTHER INCORPORATED DEFINITIONS.—
(A) FEDERAL DEPOSIT INSURANCE ACT.—The terms
‘‘bank’’, ‘‘bank holding company’’, ‘‘control’’, ‘‘deposit’’,
‘‘depository institution’’, ‘‘Federal depository institution’’,
‘‘Federal savings association’’, ‘‘foreign bank’’, ‘‘including’’,
‘‘insured branch’’, ‘‘insured depository institution’’, ‘‘national
member bank’’, ‘‘national nonmember bank’’, ‘‘savings
association’’, ‘‘State bank’’, ‘‘State depository institution’’,
‘‘State member bank’’, ‘‘State nonmember bank’’, ‘‘State
savings association’’, and ‘‘subsidiary’’ have the same
meanings as in section 3 of the Federal Deposit Insurance
Act (12 U.S.C. 1813).
(B) HOLDING COMPANIES.—The term—
(i) ‘‘bank holding company’’ has the same meaning
as in section 2 of the Bank Holding Company Act
of 1956 (12 U.S.C. 1841);
(ii) ‘‘financial holding company’’ has the same
meaning as in section 2(p) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(p)); and
(iii) ‘‘savings and loan holding company’’ has the
same meaning as in section 10 of the Home Owners’
Loan Act (12 U.S.C. 1467a(a)).

12 USC 5302.

SEC. 3. SEVERABILITY.

If any provision of this Act, an amendment made by this
Act, or the application of such provision or amendment to any
person or circumstance is held to be unconstitutional, the remainder
of this Act, the amendments made by this Act, and the application
of the provisions of such to any person or circumstance shall not
be affected thereby.
SEC. 4. EFFECTIVE DATE.

12 USC 5301
note.

Except as otherwise specifically provided in this Act or the
amendments made by this Act, this Act and such amendments
shall take effect 1 day after the date of enactment of this Act.
SEC. 5. BUDGETARY EFFECTS.

The budgetary effects of this Act, for the purpose of complying
with the Statutory Pay-As-You-Go-Act of 2010, shall be determined
by reference to the latest statement titled ‘‘Budgetary Effects of
PAYGO Legislation’’ for this Act, jointly submitted for printing
in the Congressional Record by the Chairmen of the House and
Senate Budget Committees, provided that such statement has been
submitted prior to the vote on passage in the House acting first
on this conference report or amendment between the Houses.

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12 USC 5303.

Definition.

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SEC. 6. ANTITRUST SAVINGS CLAUSE.

Nothing in this Act, or any amendment made by this Act,
shall be construed to modify, impair, or supersede the operation
of any of the antitrust laws, unless otherwise specified. For purposes
of this section, the term ‘‘antitrust laws’’ has the same meaning

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1391

as in subsection (a) of the first section of the Clayton Act, except
that such term includes section 5 of the Federal Trade Commission
Act, to the extent that such section 5 applies to unfair methods
of competition.

TITLE I—FINANCIAL STABILITY
SEC. 101. SHORT TITLE.

This title may be cited as the ‘‘Financial Stability Act of 2010’’.

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SEC. 102. DEFINITIONS.

Financial
Stability Act of
2010.
12 USC 5301
note.
12 USC 5311.

(a) IN GENERAL.—For purposes of this title, unless the context
otherwise requires, the following definitions shall apply:
(1) BANK HOLDING COMPANY.—The term ‘‘bank holding company’’ has the same meaning as in section 2 of the Bank
Holding Company Act of 1956 (12 U.S.C. 1841). A foreign
bank or company that is treated as a bank holding company
for purposes of the Bank Holding Company Act of 1956, pursuant to section 8(a) of the International Banking Act of 1978
(12 U.S.C. 3106(a)), shall be treated as a bank holding company
for purposes of this title.
(2) CHAIRPERSON.—The term ‘‘Chairperson’’ means the
Chairperson of the Council.
(3) MEMBER AGENCY.—The term ‘‘member agency’’ means
an agency represented by a voting member of the Council.
(4) NONBANK FINANCIAL COMPANY DEFINITIONS.—
(A) FOREIGN NONBANK FINANCIAL COMPANY.—The term
‘‘foreign nonbank financial company’’ means a company
(other than a company that is, or is treated in the United
States as, a bank holding company) that is—
(i) incorporated or organized in a country other
than the United States; and
(ii) predominantly engaged in, including through
a branch in the United States, financial activities, as
defined in paragraph (6).
(B) U.S. NONBANK FINANCIAL COMPANY.—The term
‘‘U.S. nonbank financial company’’ means a company (other
than a bank holding company, a Farm Credit System
institution chartered and subject to the provisions of the
Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.), or a
national securities exchange (or parent thereof), clearing
agency (or parent thereof, unless the parent is a bank
holding company), security-based swap execution facility,
or security-based swap data repository registered with the
Commission, or a board of trade designated as a contract
market (or parent thereof), or a derivatives clearing
organization (or parent thereof, unless the parent is a
bank holding company), swap execution facility or a swap
data repository registered with the Commodity Futures
Trading Commission), that is—
(i) incorporated or organized under the laws of
the United States or any State; and
(ii) predominantly engaged in financial activities,
as defined in paragraph (6).

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124 STAT. 1392

PUBLIC LAW 111–203—JULY 21, 2010

(C) NONBANK FINANCIAL COMPANY.—The term
‘‘nonbank financial company’’ means a U.S. nonbank financial company and a foreign nonbank financial company.
(D) NONBANK FINANCIAL COMPANY SUPERVISED BY THE
BOARD OF GOVERNORS.—The term ‘‘nonbank financial company supervised by the Board of Governors’’ means a
nonbank financial company that the Council has determined under section 113 shall be supervised by the Board
of Governors.
(5) OFFICE OF FINANCIAL RESEARCH.—The term ‘‘Office of
Financial Research’’ means the office established under section
152.
(6) PREDOMINANTLY ENGAGED.—A company is ‘‘predominantly engaged in financial activities’’ if—
(A) the annual gross revenues derived by the company
and all of its subsidiaries from activities that are financial
in nature (as defined in section 4(k) of the Bank Holding
Company Act of 1956) and, if applicable, from the ownership or control of one or more insured depository institutions, represents 85 percent or more of the consolidated
annual gross revenues of the company; or
(B) the consolidated assets of the company and all
of its subsidiaries related to activities that are financial
in nature (as defined in section 4(k) of the Bank Holding
Company Act of 1956) and, if applicable, related to the
ownership or control of one or more insured depository
institutions, represents 85 percent or more of the consolidated assets of the company.
(7) SIGNIFICANT INSTITUTIONS.—The terms ‘‘significant
nonbank financial company’’ and ‘‘significant bank holding company’’ have the meanings given those terms by rule of the
Board of Governors, but in no instance shall the term ‘‘significant nonbank financial company’’ include those entities that
are excluded under paragraph (4)(B).
(b) DEFINITIONAL CRITERIA.—The Board of Governors shall
establish, by regulation, the requirements for determining if a company is predominantly engaged in financial activities, as defined
in subsection (a)(6).
(c) FOREIGN NONBANK FINANCIAL COMPANIES.—For purposes
of the application of subtitles A and C (other than section 113(b))
with respect to a foreign nonbank financial company, references
in this title to ‘‘company’’ or ‘‘subsidiary’’ include only the United
States activities and subsidiaries of such foreign company, except
as otherwise provided.

Regulations.

Subtitle A—Financial Stability Oversight
Council

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SEC. 111. FINANCIAL STABILITY OVERSIGHT COUNCIL ESTABLISHED.

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12 USC 5321.

(a) ESTABLISHMENT.—Effective on the date of enactment of
this Act, there is established the Financial Stability Oversight
Council.
(b) MEMBERSHIP.—The Council shall consist of the following
members:
(1) VOTING MEMBERS.—The voting members, who shall each
have 1 vote on the Council shall be—

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1393

(A) the Secretary of the Treasury, who shall serve
as Chairperson of the Council;
(B) the Chairman of the Board of Governors;
(C) the Comptroller of the Currency;
(D) the Director of the Bureau;
(E) the Chairman of the Commission;
(F) the Chairperson of the Corporation;
(G) the Chairperson of the Commodity Futures Trading
Commission;
(H) the Director of the Federal Housing Finance
Agency;
(I) the Chairman of the National Credit Union
Administration Board; and
(J) an independent member appointed by the President,
by and with the advice and consent of the Senate, having
insurance expertise.
(2) NONVOTING MEMBERS.—The nonvoting members, who
shall serve in an advisory capacity as a nonvoting member
of the Council, shall be—
(A) the Director of the Office of Financial Research;
(B) the Director of the Federal Insurance Office;
(C) a State insurance commissioner, to be designated
by a selection process determined by the State insurance
commissioners;
(D) a State banking supervisor, to be designated by
a selection process determined by the State banking supervisors; and
(E) a State securities commissioner (or an officer performing like functions), to be designated by a selection
process determined by such State securities commissioners.
(3) NONVOTING MEMBER PARTICIPATION.—The nonvoting
members of the Council shall not be excluded from any of
the proceedings, meetings, discussions, or deliberations of the
Council, except that the Chairperson may, upon an affirmative
vote of the member agencies, exclude the nonvoting members
from any of the proceedings, meetings, discussions, or deliberations of the Council when necessary to safeguard and promote
the free exchange of confidential supervisory information.
(c) TERMS; VACANCY.—
(1) TERMS.—The independent member of the Council shall
serve for a term of 6 years, and each nonvoting member
described in subparagraphs (C), (D), and (E) of subsection (b)(2)
shall serve for a term of 2 years.
(2) VACANCY.—Any vacancy on the Council shall be filled
in the manner in which the original appointment was made.
(3) ACTING OFFICIALS MAY SERVE.—In the event of a vacancy
in the office of the head of a member agency or department,
and pending the appointment of a successor, or during the
absence or disability of the head of a member agency or department, the acting head of the member agency or department
shall serve as a member of the Council in the place of that
agency or department head.
(d) TECHNICAL AND PROFESSIONAL ADVISORY COMMITTEES.—
The Council may appoint such special advisory, technical, or professional committees as may be useful in carrying out the functions
of the Council, including an advisory committee consisting of State

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124 STAT. 1394

regulators, and the members of such committees may be members
of the Council, or other persons, or both.
(e) MEETINGS.—
(1) TIMING.—The Council shall meet at the call of the
Chairperson or a majority of the members then serving, but
not less frequently than quarterly.
(2) RULES FOR CONDUCTING BUSINESS.—The Council shall
adopt such rules as may be necessary for the conduct of the
business of the Council. Such rules shall be rules of agency
organization, procedure, or practice for purposes of section 553
of title 5, United States Code.
(f) VOTING.—Unless otherwise specified, the Council shall make
all decisions that it is authorized or required to make by a majority
vote of the voting members then serving.
(g) NONAPPLICABILITY OF FACA.—The Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to the Council, or to
any special advisory, technical, or professional committee appointed
by the Council, except that, if an advisory, technical, or professional
committee has one or more members who are not employees of
or affiliated with the United States Government, the Council shall
publish a list of the names of the members of such committee.
(h) ASSISTANCE FROM FEDERAL AGENCIES.—Any department
or agency of the United States may provide to the Council and
any special advisory, technical, or professional committee appointed
by the Council, such services, funds, facilities, staff, and other
support services as the Council may determine advisable.
(i) COMPENSATION OF MEMBERS.—
(1) FEDERAL EMPLOYEE MEMBERS.—All members of the
Council who are officers or employees of the United States
shall serve without compensation in addition to that received
for their services as officers or employees of the United States.
(2) COMPENSATION FOR NON-FEDERAL MEMBER.—Section
5314 of title 5, United States Code, is amended by adding
at the end the following:
‘‘Independent Member of the Financial Stability Oversight
Council (1).’’.
(j) DETAIL OF GOVERNMENT EMPLOYEES.—Any employee of the
Federal Government may be detailed to the Council without
reimbursement, and such detail shall be without interruption or
loss of civil service status or privilege. An employee of the Federal
Government detailed to the Council shall report to and be subject
to oversight by the Council during the assignment to the Council,
and shall be compensated by the department or agency from which
the employee was detailed.

Publication.
List.

12 USC 5322.

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PUBLIC LAW 111–203—JULY 21, 2010

SEC. 112. COUNCIL AUTHORITY.

(a) PURPOSES AND DUTIES OF THE COUNCIL.—
(1) IN GENERAL.—The purposes of the Council are—
(A) to identify risks to the financial stability of the
United States that could arise from the material financial
distress or failure, or ongoing activities, of large, interconnected bank holding companies or nonbank financial
companies, or that could arise outside the financial services
marketplace;
(B) to promote market discipline, by eliminating
expectations on the part of shareholders, creditors, and

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1395

counterparties of such companies that the Government will
shield them from losses in the event of failure; and
(C) to respond to emerging threats to the stability
of the United States financial system.
(2) DUTIES.—The Council shall, in accordance with this
title—
(A) collect information from member agencies, other
Federal and State financial regulatory agencies, the Federal Insurance Office and, if necessary to assess risks to
the United States financial system, direct the Office of
Financial Research to collect information from bank holding
companies and nonbank financial companies;
(B) provide direction to, and request data and analyses
from, the Office of Financial Research to support the work
of the Council;
(C) monitor the financial services marketplace in order
to identify potential threats to the financial stability of
the United States;
(D) to monitor domestic and international financial
regulatory proposals and developments, including insurance and accounting issues, and to advise Congress and
make recommendations in such areas that will enhance
the integrity, efficiency, competitiveness, and stability of
the U.S. financial markets;
(E) facilitate information sharing and coordination
among the member agencies and other Federal and State
agencies regarding domestic financial services policy
development, rulemaking, examinations, reporting requirements, and enforcement actions;
(F) recommend to the member agencies general supervisory priorities and principles reflecting the outcome of
discussions among the member agencies;
(G) identify gaps in regulation that could pose risks
to the financial stability of the United States;
(H) require supervision by the Board of Governors
for nonbank financial companies that may pose risks to
the financial stability of the United States in the event
of their material financial distress or failure, or because
of their activities pursuant to section 113;
(I) make recommendations to the Board of Governors
concerning the establishment of heightened prudential
standards for risk-based capital, leverage, liquidity, contingent capital, resolution plans and credit exposure reports,
concentration limits, enhanced public disclosures, and
overall risk management for nonbank financial companies
and large, interconnected bank holding companies supervised by the Board of Governors;
(J) identify systemically important financial market
utilities and payment, clearing, and settlement activities
(as that term is defined in title VIII);
(K) make recommendations to primary financial regulatory agencies to apply new or heightened standards and
safeguards for financial activities or practices that could
create or increase risks of significant liquidity, credit, or
other problems spreading among bank holding companies,
nonbank financial companies, and United States financial
markets;

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Recommendations.

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Deadline.
Reports.

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PUBLIC LAW 111–203—JULY 21, 2010

(L) review and, as appropriate, may submit comments
to the Commission and any standard-setting body with
respect to an existing or proposed accounting principle,
standard, or procedure;
(M) provide a forum for—
(i) discussion and analysis of emerging market
developments and financial regulatory issues; and
(ii) resolution of jurisdictional disputes among the
members of the Council; and
(N) annually report to and testify before Congress on—
(i) the activities of the Council;
(ii) significant financial market and regulatory
developments, including insurance and accounting
regulations and standards, along with an assessment
of those developments on the stability of the financial
system;
(iii) potential emerging threats to the financial
stability of the United States;
(iv) all determinations made under section 113
or title VIII, and the basis for such determinations;
(v) all recommendations made under section 119
and the result of such recommendations; and
(vi) recommendations—
(I) to enhance the integrity, efficiency,
competitiveness, and stability of United States
financial markets;
(II) to promote market discipline; and
(III) to maintain investor confidence.
(b) STATEMENTS BY VOTING MEMBERS OF THE COUNCIL.—At
the time at which each report is submitted under subsection (a),
each voting member of the Council shall—
(1) if such member believes that the Council, the Government, and the private sector are taking all reasonable steps
to ensure financial stability and to mitigate systemic risk that
would negatively affect the economy, submit a signed statement
to Congress stating such belief; or
(2) if such member does not believe that all reasonable
steps described under paragraph (1) are being taken, submit
a signed statement to Congress stating what actions such
member believes need to be taken in order to ensure that
all reasonable steps described under paragraph (1) are taken.
(c) TESTIMONY BY THE CHAIRPERSON.—The Chairperson shall
appear before the Committee on Financial Services of the House
of Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate at an annual hearing, after the report
is submitted under subsection (a)—
(1) to discuss the efforts, activities, objectives, and plans
of the Council; and
(2) to discuss and answer questions concerning such report.
(d) AUTHORITY TO OBTAIN INFORMATION.—
(1) IN GENERAL.—The Council may receive, and may
request the submission of, any data or information from the
Office of Financial Research, member agencies, and the Federal
Insurance Office, as necessary—
(A) to monitor the financial services marketplace to
identify potential risks to the financial stability of the
United States; or

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1397

(B) to otherwise carry out any of the provisions of
this title.
(2) SUBMISSIONS BY THE OFFICE AND MEMBER AGENCIES.—
Notwithstanding any other provision of law, the Office of Financial Research, any member agency, and the Federal Insurance
Office, are authorized to submit information to the Council.
(3) FINANCIAL DATA COLLECTION.—
(A) IN GENERAL.—The Council, acting through the
Office of Financial Research, may require the submission
of periodic and other reports from any nonbank financial
company or bank holding company for the purpose of
assessing the extent to which a financial activity or financial market in which the nonbank financial company or
bank holding company participates, or the nonbank financial company or bank holding company itself, poses a threat
to the financial stability of the United States.
(B) MITIGATION OF REPORT BURDEN.—Before requiring
the submission of reports from any nonbank financial company or bank holding company that is regulated by a
member agency or any primary financial regulatory agency,
the Council, acting through the Office of Financial
Research, shall coordinate with such agencies and shall,
whenever possible, rely on information available from the
Office of Financial Research or such agencies.
(C) MITIGATION IN CASE OF FOREIGN FINANCIAL COMPANIES.—Before requiring the submission of reports from a
company that is a foreign nonbank financial company or
foreign-based bank holding company, the Council shall,
acting through the Office of Financial Research, to the
extent appropriate, consult with the appropriate foreign
regulator of such company and, whenever possible, rely
on information already being collected by such foreign regulator, with English translation.
(4) BACK-UP EXAMINATION BY THE BOARD OF GOVERNORS.—
If the Council is unable to determine whether the financial
activities of a U.S. nonbank financial company pose a threat
to the financial stability of the United States, based on information or reports obtained under paragraphs (1) and (3), discussions with management, and publicly available information,
the Council may request the Board of Governors, and the
Board of Governors is authorized, to conduct an examination
of the U.S. nonbank financial company for the sole purpose
of determining whether the nonbank financial company should
be supervised by the Board of Governors for purposes of this
title.
(5) CONFIDENTIALITY.—
(A) IN GENERAL.—The Council, the Office of Financial
Research, and the other member agencies shall maintain
the confidentiality of any data, information, and reports
submitted under this title.
(B) RETENTION OF PRIVILEGE.—The submission of any
nonpublicly available data or information under this subsection and subtitle B shall not constitute a waiver of,
or otherwise affect, any privilege arising under Federal
or State law (including the rules of any Federal or State
court) to which the data or information is otherwise subject.

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124 STAT. 1398

PUBLIC LAW 111–203—JULY 21, 2010
(C) FREEDOM OF INFORMATION ACT.—Section 552 of
title 5, United States Code, including the exceptions thereunder, shall apply to any data or information submitted
under this subsection and subtitle B.

12 USC 5323.

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Applicability.

SEC. 113. AUTHORITY TO REQUIRE SUPERVISION AND REGULATION
OF CERTAIN NONBANK FINANCIAL COMPANIES.

(a) U.S. NONBANK FINANCIAL COMPANIES SUPERVISED BY THE
BOARD OF GOVERNORS.—
(1) DETERMINATION.—The Council, on a nondelegable basis
and by a vote of not fewer than 2⁄3 of the voting members
then serving, including an affirmative vote by the Chairperson,
may determine that a U.S. nonbank financial company shall
be supervised by the Board of Governors and shall be subject
to prudential standards, in accordance with this title, if the
Council determines that material financial distress at the U.S.
nonbank financial company, or the nature, scope, size, scale,
concentration, interconnectedness, or mix of the activities of
the U.S. nonbank financial company, could pose a threat to
the financial stability of the United States.
(2) CONSIDERATIONS.—In making a determination under
paragraph (1), the Council shall consider—
(A) the extent of the leverage of the company;
(B) the extent and nature of the off-balance-sheet exposures of the company;
(C) the extent and nature of the transactions and relationships of the company with other significant nonbank
financial companies and significant bank holding companies;
(D) the importance of the company as a source of
credit for households, businesses, and State and local
governments and as a source of liquidity for the United
States financial system;
(E) the importance of the company as a source of
credit for low-income, minority, or underserved communities, and the impact that the failure of such company
would have on the availability of credit in such communities;
(F) the extent to which assets are managed rather
than owned by the company, and the extent to which
ownership of assets under management is diffuse;
(G) the nature, scope, size, scale, concentration, interconnectedness, and mix of the activities of the company;
(H) the degree to which the company is already regulated by 1 or more primary financial regulatory agencies;
(I) the amount and nature of the financial assets of
the company;
(J) the amount and types of the liabilities of the company, including the degree of reliance on short-term
funding; and
(K) any other risk-related factors that the Council
deems appropriate.
(b) FOREIGN NONBANK FINANCIAL COMPANIES SUPERVISED BY
THE BOARD OF GOVERNORS.—
(1) DETERMINATION.—The Council, on a nondelegable basis
and by a vote of not fewer than 2⁄3 of the voting members
then serving, including an affirmative vote by the Chairperson,

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1399

may determine that a foreign nonbank financial company shall
be supervised by the Board of Governors and shall be subject
to prudential standards, in accordance with this title, if the
Council determines that material financial distress at the foreign nonbank financial company, or the nature, scope, size,
scale, concentration, interconnectedness, or mix of the activities
of the foreign nonbank financial company, could pose a threat
to the financial stability of the United States.
(2) CONSIDERATIONS.—In making a determination under
paragraph (1), the Council shall consider—
(A) the extent of the leverage of the company;
(B) the extent and nature of the United States related
off-balance-sheet exposures of the company;
(C) the extent and nature of the transactions and relationships of the company with other significant nonbank
financial companies and significant bank holding companies;
(D) the importance of the company as a source of
credit for United States households, businesses, and State
and local governments and as a source of liquidity for
the United States financial system;
(E) the importance of the company as a source of
credit for low-income, minority, or underserved communities in the United States, and the impact that the failure
of such company would have on the availability of credit
in such communities;
(F) the extent to which assets are managed rather
than owned by the company and the extent to which ownership of assets under management is diffuse;
(G) the nature, scope, size, scale, concentration, interconnectedness, and mix of the activities of the company;
(H) the extent to which the company is subject to
prudential standards on a consolidated basis in its home
country that are administered and enforced by a comparable foreign supervisory authority;
(I) the amount and nature of the United States financial assets of the company;
(J) the amount and nature of the liabilities of the
company used to fund activities and operations in the
United States, including the degree of reliance on shortterm funding; and
(K) any other risk-related factors that the Council
deems appropriate.
(c) ANTIEVASION.—
(1) DETERMINATIONS.—In order to avoid evasion of this
title, the Council, on its own initiative or at the request of
the Board of Governors, may determine, on a nondelegable
basis and by a vote of not fewer than 2⁄3 of the voting members
then serving, including an affirmative vote by the Chairperson,
that—
(A) material financial distress related to, or the nature,
scope, size, scale, concentration, interconnectedness, or mix
of, the financial activities conducted directly or indirectly
by a company incorporated or organized under the laws
of the United States or any State or the financial activities
in the United States of a company incorporated or organized in a country other than the United States would

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Definition.

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PUBLIC LAW 111–203—JULY 21, 2010
pose a threat to the financial stability of the United States,
based on consideration of the factors in subsection (a)(2)
or (b)(2), as applicable;
(B) the company is organized or operates in such a
manner as to evade the application of this title; and
(C) such financial activities of the company shall be
supervised by the Board of Governors and subject to
prudential standards in accordance with this title, consistent with paragraph (3).
(2) REPORT.—Upon making a determination under paragraph (1), the Council shall submit a report to the appropriate
committees of Congress detailing the reasons for making such
determination.
(3) CONSOLIDATED SUPERVISION OF ONLY FINANCIAL ACTIVITIES; ESTABLISHMENT OF AN INTERMEDIATE HOLDING COMPANY.—
(A) ESTABLISHMENT OF AN INTERMEDIATE HOLDING
COMPANY.—Upon a determination under paragraph (1), the
company that is the subject of the determination may establish an intermediate holding company in which the financial activities of such company and its subsidiaries shall
be conducted (other than the activities described in section
167(b)(2)) in compliance with any regulations or guidance
provided by the Board of Governors. Such intermediate
holding company shall be subject to the supervision of
the Board of Governors and to prudential standards under
this title as if the intermediate holding company were
a nonbank financial company supervised by the Board of
Governors.
(B) ACTION OF THE BOARD OF GOVERNORS.—To facilitate
the supervision of the financial activities subject to the
determination in paragraph (1), the Board of Governors
may require a company to establish an intermediate
holding company, as provided for in section 167, which
would be subject to the supervision of the Board of Governors and to prudential standards under this title, as
if the intermediate holding company were a nonbank financial company supervised by the Board of Governors.
(4) NOTICE AND OPPORTUNITY FOR HEARING AND FINAL
DETERMINATION; JUDICIAL REVIEW.—Subsections (d) through (h)
shall apply to determinations made by the Council pursuant
to paragraph (1) in the same manner as such subsections
apply to nonbank financial companies.
(5) COVERED FINANCIAL ACTIVITIES.—For purposes of this
subsection, the term ‘‘financial activities’’—
(A) means activities that are financial in nature (as
defined in section 4(k) of the Bank Holding Company Act
of 1956);
(B) includes the ownership or control of one or more
insured depository institutions; and
(C) does not include internal financial activities conducted for the company or any affiliate thereof, including
internal treasury, investment, and employee benefit functions.
(6) ONLY FINANCIAL ACTIVITIES SUBJECT TO PRUDENTIAL
SUPERVISION.—Nonfinancial activities of the company shall not

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124 STAT. 1401

be subject to supervision by the Board of Governors and prudential standards of the Board. For purposes of this Act, the
financial activities that are the subject of the determination
in paragraph (1) shall be subject to the same requirements
as a nonbank financial company supervised by the Board of
Governors. Nothing in this paragraph shall prohibit or limit
the authority of the Board of Governors to apply prudential
standards under this title to the financial activities that are
subject to the determination in paragraph (1).
(d) REEVALUATION AND RESCISSION.—The Council shall—
(1) not less frequently than annually, reevaluate each determination made under subsections (a) and (b) with respect to
such nonbank financial company supervised by the Board of
Governors; and
(2) rescind any such determination, if the Council, by a
vote of not fewer than 2⁄3 of the voting members then serving,
including an affirmative vote by the Chairperson, determines
that the nonbank financial company no longer meets the standards under subsection (a) or (b), as applicable.
(e) NOTICE AND OPPORTUNITY FOR HEARING AND FINAL DETERMINATION.—
(1) IN GENERAL.—The Council shall provide to a nonbank
financial company written notice of a proposed determination
of the Council, including an explanation of the basis of the
proposed determination of the Council, that a nonbank financial
company shall be supervised by the Board of Governors and
shall be subject to prudential standards in accordance with
this title.
(2) HEARING.—Not later than 30 days after the date of
receipt of any notice of a proposed determination under paragraph (1), the nonbank financial company may request, in
writing, an opportunity for a written or oral hearing before
the Council to contest the proposed determination. Upon receipt
of a timely request, the Council shall fix a time (not later
than 30 days after the date of receipt of the request) and
place at which such company may appear, personally or through
counsel, to submit written materials (or, at the sole discretion
of the Council, oral testimony and oral argument).
(3) FINAL DETERMINATION.—Not later than 60 days after
the date of a hearing under paragraph (2), the Council shall
notify the nonbank financial company of the final determination
of the Council, which shall contain a statement of the basis
for the decision of the Council.
(4) NO HEARING REQUESTED.—If a nonbank financial company does not make a timely request for a hearing, the Council
shall notify the nonbank financial company, in writing, of the
final determination of the Council under subsection (a) or (b),
as applicable, not later than 10 days after the date by which
the company may request a hearing under paragraph (2).
(f) EMERGENCY EXCEPTION.—
(1) IN GENERAL.—The Council may waive or modify the
requirements of subsection (e) with respect to a nonbank financial company, if the Council determines, by a vote of not fewer
than 2⁄3 of the voting members then serving, including an
affirmative vote by the Chairperson, that such waiver or modification is necessary or appropriate to prevent or mitigate

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Deadlines.
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threats posed by the nonbank financial company to the financial
stability of the United States.
(2) NOTICE.—The Council shall provide notice of a waiver
or modification under this subsection to the nonbank financial
company concerned as soon as practicable, but not later than
24 hours after the waiver or modification is granted.
(3) INTERNATIONAL COORDINATION.—In making a determination under paragraph (1), the Council shall consult with
the appropriate home country supervisor, if any, of the foreign
nonbank financial company that is being considered for such
a determination.
(4) OPPORTUNITY FOR HEARING.—The Council shall allow
a nonbank financial company to request, in writing, an opportunity for a written or oral hearing before the Council to contest
a waiver or modification under this subsection, not later than
10 days after the date of receipt of notice of the waiver or
modification by the company. Upon receipt of a timely request,
the Council shall fix a time (not later than 15 days after
the date of receipt of the request) and place at which the
nonbank financial company may appear, personally or through
counsel, to submit written materials (or, at the sole discretion
of the Council, oral testimony and oral argument).
(5) NOTICE OF FINAL DETERMINATION.—Not later than 30
days after the date of any hearing under paragraph (4), the
Council shall notify the subject nonbank financial company
of the final determination of the Council under this subsection,
which shall contain a statement of the basis for the decision
of the Council.
(g) CONSULTATION.—The Council shall consult with the primary
financial regulatory agency, if any, for each nonbank financial company or subsidiary of a nonbank financial company that is being
considered for supervision by the Board of Governors under this
section before the Council makes any final determination with
respect to such nonbank financial company under subsection (a),
(b), or (c).
(h) JUDICIAL REVIEW.—If the Council makes a final determination under this section with respect to a nonbank financial company,
such nonbank financial company may, not later than 30 days after
the date of receipt of the notice of final determination under subsection (d)(2), (e)(3), or (f)(5), bring an action in the United States
district court for the judicial district in which the home office
of such nonbank financial company is located, or in the United
States District Court for the District of Columbia, for an order
requiring that the final determination be rescinded, and the court
shall, upon review, dismiss such action or direct the final determination to be rescinded. Review of such an action shall be limited
to whether the final determination made under this section was
arbitrary and capricious.
(i) INTERNATIONAL COORDINATION.—In exercising its duties
under this title with respect to foreign nonbank financial companies,
foreign-based bank holding companies, and cross-border activities
and markets, the Council shall consult with appropriate foreign
regulatory authorities, to the extent appropriate.

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1403
12 USC 5324.

Not later than 180 days after the date of a final Council
determination under section 113 that a nonbank financial company
is to be supervised by the Board of Governors, such company
shall register with the Board of Governors, on forms prescribed
by the Board of Governors, which shall include such information
as the Board of Governors, in consultation with the Council, may
deem necessary or appropriate to carry out this title.

Deadline.

SEC. 115. ENHANCED SUPERVISION AND PRUDENTIAL STANDARDS
FOR NONBANK FINANCIAL COMPANIES SUPERVISED BY
THE BOARD OF GOVERNORS AND CERTAIN BANK HOLDING
COMPANIES.

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SEC. 114. REGISTRATION OF NONBANK FINANCIAL COMPANIES SUPERVISED BY THE BOARD OF GOVERNORS.

12 USC 5325.

(a) IN GENERAL.—
(1) PURPOSE.—In order to prevent or mitigate risks to
the financial stability of the United States that could arise
from the material financial distress, failure, or ongoing activities of large, interconnected financial institutions, the Council
may make recommendations to the Board of Governors concerning the establishment and refinement of prudential standards and reporting and disclosure requirements applicable to
nonbank financial companies supervised by the Board of Governors and large, interconnected bank holding companies,
that—
(A) are more stringent than those applicable to other
nonbank financial companies and bank holding companies
that do not present similar risks to the financial stability
of the United States; and
(B) increase in stringency, based on the considerations
identified in subsection (b)(3).
(2) RECOMMENDED APPLICATION OF REQUIRED STANDARDS.—
In making recommendations under this section, the Council
may—
(A) differentiate among companies that are subject to
heightened standards on an individual basis or by category,
taking into consideration their capital structure, riskiness,
complexity, financial activities (including the financial
activities of their subsidiaries), size, and any other riskrelated factors that the Council deems appropriate; or
(B) recommend an asset threshold that is higher than
$50,000,000,000 for the application of any standard
described in subsections (c) through (g).
(b) DEVELOPMENT OF PRUDENTIAL STANDARDS.—
(1) IN GENERAL.—The recommendations of the Council
under subsection (a) may include—
(A) risk-based capital requirements;
(B) leverage limits;
(C) liquidity requirements;
(D) resolution plan and credit exposure report requirements;
(E) concentration limits;
(F) a contingent capital requirement;
(G) enhanced public disclosures;
(H) short-term debt limits; and
(I) overall risk management requirements.

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PUBLIC LAW 111–203—JULY 21, 2010

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(2) PRUDENTIAL STANDARDS FOR FOREIGN FINANCIAL COMPANIES.—In making recommendations concerning the standards
set forth in paragraph (1) that would apply to foreign nonbank
financial companies supervised by the Board of Governors or
foreign-based bank holding companies, the Council shall—
(A) give due regard to the principle of national treatment and equality of competitive opportunity; and
(B) take into account the extent to which the foreign
nonbank financial company or foreign-based bank holding
company is subject on a consolidated basis to home country
standards that are comparable to those applied to financial
companies in the United States.
(3) CONSIDERATIONS.—In making recommendations concerning prudential standards under paragraph (1), the Council
shall—
(A) take into account differences among nonbank financial companies supervised by the Board of Governors and
bank holding companies described in subsection (a), based
on—
(i) the factors described in subsections (a) and
(b) of section 113;
(ii) whether the company owns an insured depository institution;
(iii) nonfinancial activities and affiliations of the
company; and
(iv) any other factors that the Council determines
appropriate;
(B) to the extent possible, ensure that small changes
in the factors listed in subsections (a) and (b) of section
113 would not result in sharp, discontinuous changes in
the prudential standards established under section 165;
and
(C) adapt its recommendations as appropriate in light
of any predominant line of business of such company,
including assets under management or other activities for
which particular standards may not be appropriate.
(c) CONTINGENT CAPITAL.—
(1) STUDY REQUIRED.—The Council shall conduct a study
of the feasibility, benefits, costs, and structure of a contingent
capital requirement for nonbank financial companies supervised
by the Board of Governors and bank holding companies
described in subsection (a), which study shall include—
(A) an evaluation of the degree to which such requirement would enhance the safety and soundness of companies
subject to the requirement, promote the financial stability
of the United States, and reduce risks to United States
taxpayers;
(B) an evaluation of the characteristics and amounts
of contingent capital that should be required;
(C) an analysis of potential prudential standards that
should be used to determine whether the contingent capital
of a company would be converted to equity in times of
financial stress;
(D) an evaluation of the costs to companies, the effects
on the structure and operation of credit and other financial
markets, and other economic effects of requiring contingent
capital;

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1405

(E) an evaluation of the effects of such requirement
on the international competitiveness of companies subject
to the requirement and the prospects for international
coordination in establishing such requirement; and
(F) recommendations for implementing regulations.
(2) REPORT.—The Council shall submit a report to Congress
regarding the study required by paragraph (1) not later than
2 years after the date of enactment of this Act.
(3) RECOMMENDATIONS.—
(A) IN GENERAL.—Subsequent to submitting a report
to Congress under paragraph (2), the Council may make
recommendations to the Board of Governors to require
any nonbank financial company supervised by the Board
of Governors and any bank holding company described
in subsection (a) to maintain a minimum amount of contingent capital that is convertible to equity in times of financial stress.
(B) FACTORS TO CONSIDER.—In making recommendations under this subsection, the Council shall consider—
(i) an appropriate transition period for
implementation of a conversion under this subsection;
(ii) the factors described in subsection (b)(3);
(iii) capital requirements applicable to a nonbank
financial company supervised by the Board of Governors or a bank holding company described in subsection (a), and subsidiaries thereof;
(iv) results of the study required by paragraph
(1); and
(v) any other factor that the Council deems appropriate.
(d) RESOLUTION PLAN AND CREDIT EXPOSURE REPORTS.—
(1) RESOLUTION PLAN.—The Council may make recommendations to the Board of Governors concerning the
requirement that each nonbank financial company supervised
by the Board of Governors and each bank holding company
described in subsection (a) report periodically to the Council,
the Board of Governors, and the Corporation, the plan of such
company for rapid and orderly resolution in the event of material financial distress or failure.
(2) CREDIT EXPOSURE REPORT.—The Council may make recommendations to the Board of Governors concerning the advisability of requiring each nonbank financial company supervised
by the Board of Governors and bank holding company described
in subsection (a) to report periodically to the Council, the Board
of Governors, and the Corporation on—
(A) the nature and extent to which the company has
credit exposure to other significant nonbank financial
companies and significant bank holding companies; and
(B) the nature and extent to which other such significant nonbank financial companies and significant bank
holding companies have credit exposure to that company.
(e) CONCENTRATION LIMITS.—In order to limit the risks that
the failure of any individual company could pose to nonbank financial companies supervised by the Board of Governors or bank
holding companies described in subsection (a), the Council may
make recommendations to the Board of Governors to prescribe
standards to limit such risks, as set forth in section 165.

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124 STAT. 1406

PUBLIC LAW 111–203—JULY 21, 2010

(f) ENHANCED PUBLIC DISCLOSURES.—The Council may make
recommendations to the Board of Governors to require periodic
public disclosures by bank holding companies described in subsection (a) and by nonbank financial companies supervised by the
Board of Governors, in order to support market evaluation of the
risk profile, capital adequacy, and risk management capabilities
thereof.
(g) SHORT-TERM DEBT LIMITS.—The Council may make recommendations to the Board of Governors to require short-term
debt limits to mitigate the risks that an over-accumulation of such
debt could pose to bank holding companies described in subsection
(a), nonbank financial companies supervised by the Board of Governors, or the financial system.
12 USC 5326.

SEC. 116. REPORTS.

(a) IN GENERAL.—Subject to subsection (b), the Council, acting
through the Office of Financial Research, may require a bank
holding company with total consolidated assets of $50,000,000,000
or greater or a nonbank financial company supervised by the Board
of Governors, and any subsidiary thereof, to submit certified reports
to keep the Council informed as to—
(1) the financial condition of the company;
(2) systems for monitoring and controlling financial, operating, and other risks;
(3) transactions with any subsidiary that is a depository
institution; and
(4) the extent to which the activities and operations of
the company and any subsidiary thereof, could, under adverse
circumstances, have the potential to disrupt financial markets
or affect the overall financial stability of the United States.
(b) USE OF EXISTING REPORTS.—
(1) IN GENERAL.—For purposes of compliance with subsection (a), the Council, acting through the Office of Financial
Research, shall, to the fullest extent possible, use—
(A) reports that a bank holding company, nonbank
financial company supervised by the Board of Governors,
or any functionally regulated subsidiary of such company
has been required to provide to other Federal or State
regulatory agencies or to a relevant foreign supervisory
authority;
(B) information that is otherwise required to be
reported publicly; and
(C) externally audited financial statements.
(2) AVAILABILITY.—Each bank holding company described
in subsection (a) and nonbank financial company supervised
by the Board of Governors, and any subsidiary thereof, shall
provide to the Council, at the request of the Council, copies
of all reports referred to in paragraph (1).
(3) CONFIDENTIALITY.—The Council shall maintain the confidentiality of the reports obtained under subsection (a) and
paragraph (1)(A) of this subsection.
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12 USC 5327.

SEC. 117. TREATMENT OF CERTAIN COMPANIES THAT CEASE TO BE
BANK HOLDING COMPANIES.

(a) APPLICABILITY.—This section shall apply to—
(1) any entity that—

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1407

(A) was a bank holding company having total consolidated assets equal to or greater than $50,000,000,000 as
of January 1, 2010; and
(B) received financial assistance under or participated
in the Capital Purchase Program established under the
Troubled Asset Relief Program authorized by the Emergency Economic Stabilization Act of 2008; and
(2) any successor entity (as defined by the Board of Governors, in consultation with the Council) to an entity described
in paragraph (1).
(b) TREATMENT.—If an entity described in subsection (a) ceases
to be a bank holding company at any time after January 1, 2010,
then such entity shall be treated as a nonbank financial company
supervised by the Board of Governors, as if the Council had made
a determination under section 113 with respect to that entity.
(c) APPEAL.—
(1) REQUEST FOR HEARING.—An entity may request, in
writing, an opportunity for a written or oral hearing before
the Council to appeal its treatment as a nonbank financial
company supervised by the Board of Governors in accordance
with this section. Upon receipt of the request, the Council
shall fix a time (not later than 30 days after the date of
receipt of the request) and place at which such entity may
appear, personally or through counsel, to submit written materials (or, at the sole discretion of the Council, oral testimony
and oral argument).
(2) DECISION.—
(A) PROPOSED DECISION.—A Council decision to grant
an appeal under this subsection shall be made by a vote
of not fewer than 2⁄3 of the voting members then serving,
including an affirmative vote by the Chairperson. Not later
than 60 days after the date of a hearing under paragraph
(1), the Council shall submit a report to, and may testify
before, the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services of the House of Representatives on the proposed decision of the Council regarding an appeal under paragraph
(1), which report shall include a statement of the basis
for the proposed decision of the Council.
(B) NOTICE OF FINAL DECISION.—The Council shall
notify the subject entity of the final decision of the Council
regarding an appeal under paragraph (1), which notice
shall contain a statement of the basis for the final decision
of the Council, not later than 60 days after the later of—
(i) the date of the submission of the report under
subparagraph (A); or
(ii) if, not later than 1 year after the date of
submission of the report under subparagraph (A), the
Committee on Banking, Housing, and Urban Affairs
of the Senate or the Committee on Financial Services
of the House of Representatives holds one or more
hearings regarding such report, the date of the last
such hearing.
(C) CONSIDERATIONS.—In making a decision regarding
an appeal under paragraph (1), the Council shall consider
whether the company meets the standards under section
113(a) or 113(b), as applicable, and the definition of the

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124 STAT. 1408

PUBLIC LAW 111–203—JULY 21, 2010
term ‘‘nonbank financial company’’ under section 102. The
decision of the Council shall be final, subject to the review
under paragraph (3).
(3) REVIEW.—If the Council denies an appeal under this
subsection, the Council shall, not less frequently than annually,
review and reevaluate the decision.

12 USC 5328.

SEC. 118. COUNCIL FUNDING.

Any expenses of the Council shall be treated as expenses of,
and paid by, the Office of Financial Research.
12 USC 5329.

(a) REQUEST FOR COUNCIL RECOMMENDATION.—The Council
shall seek to resolve a dispute among 2 or more member agencies,
if—
(1) a member agency has a dispute with another member
agency about the respective jurisdiction over a particular bank
holding company, nonbank financial company, or financial
activity or product (excluding matters for which another dispute
mechanism specifically has been provided under title X);
(2) the Council determines that the disputing agencies
cannot, after a demonstrated good faith effort, resolve the dispute without the intervention of the Council; and
(3) any of the member agencies involved in the dispute—
(A) provides all other disputants prior notice of the
intent to request dispute resolution by the Council; and
(B) requests in writing, not earlier than 14 days after
providing the notice described in subparagraph (A), that
the Council seek to resolve the dispute.
(b) COUNCIL RECOMMENDATION.—The Council shall seek to
resolve each dispute described in subsection (a)—
(1) within a reasonable time after receiving the dispute
resolution request;
(2) after consideration of relevant information provided by
each agency party to the dispute; and
(3) by agreeing with 1 of the disputants regarding the
entirety of the matter, or by determining a compromise position.
(c) FORM OF RECOMMENDATION.—Any Council recommendation
under this section shall—
(1) be in writing;
(2) include an explanation of the reasons therefor; and
(3) be approved by the affirmative vote of 2⁄3 of the voting
members of the Council then serving.
(d) NONBINDING EFFECT.—Any recommendation made by the
Council under subsection (c) shall not be binding on the Federal
agencies that are parties to the dispute.

Notice.
Deadline.

12 USC 5330.

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SEC. 119. RESOLUTION OF SUPERVISORY JURISDICTIONAL DISPUTES
AMONG MEMBER AGENCIES.

SEC. 120. ADDITIONAL STANDARDS APPLICABLE TO ACTIVITIES OR
PRACTICES FOR FINANCIAL STABILITY PURPOSES.

(a) IN GENERAL.—The Council may provide for more stringent
regulation of a financial activity by issuing recommendations to
the primary financial regulatory agencies to apply new or heightened standards and safeguards, including standards enumerated
in section 115, for a financial activity or practice conducted by
bank holding companies or nonbank financial companies under
their respective jurisdictions, if the Council determines that the

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1409

conduct, scope, nature, size, scale, concentration, or interconnectedness of such activity or practice could create or increase the risk
of significant liquidity, credit, or other problems spreading among
bank holding companies and nonbank financial companies, financial
markets of the United States, or low-income, minority, or underserved communities.
(b) PROCEDURE FOR RECOMMENDATIONS TO REGULATORS.—
(1) NOTICE AND OPPORTUNITY FOR COMMENT.—The Council
shall consult with the primary financial regulatory agencies
and provide notice to the public and opportunity for comment
for any proposed recommendation that the primary financial
regulatory agencies apply new or heightened standards and
safeguards for a financial activity or practice.
(2) CRITERIA.—The new or heightened standards and safeguards for a financial activity or practice recommended under
paragraph (1)—
(A) shall take costs to long-term economic growth into
account; and
(B) may include prescribing the conduct of the activity
or practice in specific ways (such as by limiting its scope,
or applying particular capital or risk management requirements to the conduct of the activity) or prohibiting the
activity or practice.
(c) IMPLEMENTATION OF RECOMMENDED STANDARDS.—
(1) ROLE OF PRIMARY FINANCIAL REGULATORY AGENCY.—
(A) IN GENERAL.—Each primary financial regulatory
agency may impose, require reports regarding, examine
for compliance with, and enforce standards in accordance
with this section with respect to those entities for which
it is the primary financial regulatory agency.
(B) RULE OF CONSTRUCTION.—The authority under this
paragraph is in addition to, and does not limit, any other
authority of a primary financial regulatory agency. Compliance by an entity with actions taken by a primary financial
regulatory agency under this section shall be enforceable
in accordance with the statutes governing the respective
jurisdiction of the primary financial regulatory agency over
the entity, as if the agency action were taken under those
statutes.
(2) IMPOSITION OF STANDARDS.—The primary financial regulatory agency shall impose the standards recommended by the
Council in accordance with subsection (a), or similar standards
that the Council deems acceptable, or shall explain in writing
to the Council, not later than 90 days after the date on which
the Council issues the recommendation, why the agency has
determined not to follow the recommendation of the Council.
(d) REPORT TO CONGRESS.—The Council shall report to Congress
on—
(1) any recommendations issued by the Council under this
section;
(2) the implementation of, or failure to implement, such
recommendation on the part of a primary financial regulatory
agency; and
(3) in any case in which no primary financial regulatory
agency exists for the nonbank financial company conducting
financial activities or practices referred to in subsection (a),

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124 STAT. 1410

recommendations for legislation that would prevent such activities or practices from threatening the stability of the financial
system of the United States.
(e) EFFECT OF RESCISSION OF IDENTIFICATION.—
(1) NOTICE.—The Council may recommend to the relevant
primary financial regulatory agency that a financial activity
or practice no longer requires any standards or safeguards
implemented under this section.
(2) DETERMINATION OF PRIMARY FINANCIAL REGULATORY
AGENCY TO CONTINUE.—
(A) IN GENERAL.—Upon receipt of a recommendation
under paragraph (1), a primary financial regulatory agency
that has imposed standards under this section shall determine whether such standards should remain in effect.
(B) APPEAL PROCESS.—Each primary financial regulatory agency that has imposed standards under this section shall promulgate regulations to establish a procedure
under which entities under its jurisdiction may appeal
a determination by such agency under this paragraph that
standards imposed under this section should remain in
effect.

Regulations.

12 USC 5331.

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PUBLIC LAW 111–203—JULY 21, 2010

SEC. 121. MITIGATION OF RISKS TO FINANCIAL STABILITY.

(a) MITIGATORY ACTIONS.—If the Board of Governors determines that a bank holding company with total consolidated assets
of $50,000,000,000 or more, or a nonbank financial company supervised by the Board of Governors, poses a grave threat to the
financial stability of the United States, the Board of Governors,
upon an affirmative vote of not fewer than 2⁄3 of the voting members
of the Council then serving, shall—
(1) limit the ability of the company to merge with, acquire,
consolidate with, or otherwise become affiliated with another
company;
(2) restrict the ability of the company to offer a financial
product or products;
(3) require the company to terminate one or more activities;
(4) impose conditions on the manner in which the company
conducts 1 or more activities; or
(5) if the Board of Governors determines that the actions
described in paragraphs (1) through (4) are inadequate to mitigate a threat to the financial stability of the United States
in its recommendation, require the company to sell or otherwise
transfer assets or off-balance-sheet items to unaffiliated entities.
(b) NOTICE AND HEARING.—
(1) IN GENERAL.—The Board of Governors, in consultation
with the Council, shall provide to a company described in
subsection (a) written notice that such company is being considered for mitigatory action pursuant to this section, including
an explanation of the basis for, and description of, the proposed
mitigatory action.
(2) HEARING.—Not later than 30 days after the date of
receipt of notice under paragraph (1), the company may request,
in writing, an opportunity for a written or oral hearing before
the Board of Governors to contest the proposed mitigatory
action. Upon receipt of a timely request, the Board of Governors
shall fix a time (not later than 30 days after the date of

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124 STAT. 1411

receipt of the request) and place at which such company may
appear, personally or through counsel, to submit written materials (or, at the discretion of the Board of Governors, in consultation with the Council, oral testimony and oral argument).
(3) DECISION.—Not later than 60 days after the date of
a hearing under paragraph (2), or not later than 60 days
after the provision of a notice under paragraph (1) if no hearing
was held, the Board of Governors shall notify the company
of the final decision of the Board of Governors, including the
results of the vote of the Council, as described in subsection
(a).
(c) FACTORS FOR CONSIDERATION.—The Board of Governors and
the Council shall take into consideration the factors set forth in
subsection (a) or (b) of section 113, as applicable, in making any
determination under subsection (a).
(d) APPLICATION TO FOREIGN FINANCIAL COMPANIES.—The
Board of Governors may prescribe regulations regarding the application of this section to foreign nonbank financial companies supervised by the Board of Governors and foreign-based bank holding
companies—
(1) giving due regard to the principle of national treatment
and equality of competitive opportunity; and
(2) taking into account the extent to which the foreign
nonbank financial company or foreign-based bank holding company is subject on a consolidated basis to home country standards that are comparable to those applied to financial companies in the United States.

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SEC. 122. GAO AUDIT OF COUNCIL.

12 USC 5332.

(a) AUTHORITY TO AUDIT.—The Comptroller General of the
United States may audit the activities of—
(1) the Council; and
(2) any person or entity acting on behalf of or under the
authority of the Council, to the extent that such activities
relate to work for the Council by such person or entity.
(b) ACCESS TO INFORMATION.—
(1) IN GENERAL.—Notwithstanding any other provision of
law, the Comptroller General shall, upon request and at such
reasonable time and in such reasonable form as the Comptroller
General may request, have access to—
(A) any records or other information under the control
of or used by the Council;
(B) any records or other information under the control
of a person or entity acting on behalf of or under the
authority of the Council, to the extent that such records
or other information is relevant to an audit under subsection (a); and
(C) the officers, directors, employees, financial advisors,
staff, working groups, and agents and representatives of
the Council (as related to the activities on behalf of the
Council of such agent or representative), at such reasonable
times as the Comptroller General may request.
(2) COPIES.—The Comptroller General may make and
retain copies of such books, accounts, and other records, access
to which is granted under this section, as the Comptroller
General considers appropriate.

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124 STAT. 1412
12 USC 5333.

Cost estimate.

PUBLIC LAW 111–203—JULY 21, 2010

SEC. 123. STUDY OF THE EFFECTS OF SIZE AND COMPLEXITY OF FINANCIAL INSTITUTIONS ON CAPITAL MARKET EFFICIENCY
AND ECONOMIC GROWTH.

(a) STUDY REQUIRED.—
(1) IN GENERAL.—The Chairperson of the Council shall
carry out a study of the economic impact of possible financial
services regulatory limitations intended to reduce systemic risk.
Such study shall estimate the benefits and costs on the efficiency of capital markets, on the financial sector, and on
national economic growth, of—
(A) explicit or implicit limits on the maximum size
of banks, bank holding companies, and other large financial
institutions;
(B) limits on the organizational complexity and diversification of large financial institutions;
(C) requirements for operational separation between
business units of large financial institutions in order to
expedite resolution in case of failure;
(D) limits on risk transfer between business units of
large financial institutions;
(E) requirements to carry contingent capital or similar
mechanisms;
(F) limits on commingling of commercial and financial
activities by large financial institutions;
(G) segregation requirements between traditional
financial activities and trading or other high-risk operations in large financial institutions; and
(H) other limitations on the activities or structure of
large financial institutions that may be useful to limit
systemic risk.
(2) RECOMMENDATIONS.—The study required by this section
shall include recommendations for the optimal structure of
any limits considered in subparagraphs (A) through (E), in
order to maximize their effectiveness and minimize their economic impact.
(b) REPORT.—Not later than the end of the 180-day period
beginning on the date of enactment of this title, and not later
than every 5 years thereafter, the Chairperson shall issue a report
to the Congress containing any findings and determinations made
in carrying out the study required under subsection (a).

Subtitle B—Office of Financial Research

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12 USC 5341.

SEC. 151. DEFINITIONS.

For purposes of this subtitle—
(1) the terms ‘‘Office’’ and ‘‘Director’’ mean the Office of
Financial Research established under this subtitle and the
Director thereof, respectively;
(2) the term ‘‘financial company’’ has the same meaning
as in title II, and includes an insured depository institution
and an insurance company;
(3) the term ‘‘Data Center’’ means the data center established under section 154;
(4) the term ‘‘Research and Analysis Center’’ means the
research and analysis center established under section 154;

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(5) the term ‘‘financial transaction data’’ means the structure and legal description of a financial contract, with sufficient
detail to describe the rights and obligations between counterparties and make possible an independent valuation;
(6) the term ‘‘position data’’—
(A) means data on financial assets or liabilities held
on the balance sheet of a financial company, where positions are created or changed by the execution of a financial
transaction; and
(B) includes information that identifies counterparties,
the valuation by the financial company of the position,
and information that makes possible an independent valuation of the position;
(7) the term ‘‘financial contract’’ means a legally binding
agreement between 2 or more counterparties, describing rights
and obligations relating to the future delivery of items of
intrinsic or extrinsic value among the counterparties; and
(8) the term ‘‘financial instrument’’ means a financial contract in which the terms and conditions are publicly available,
and the roles of one or more of the counterparties are assignable
without the consent of any of the other counterparties (including
common stock of a publicly traded company, government bonds,
or exchange traded futures and options contracts).

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SEC. 152. OFFICE OF FINANCIAL RESEARCH ESTABLISHED.

12 USC 5342.

(a) ESTABLISHMENT.—There is established within the Department of the Treasury the Office of Financial Research.
(b) DIRECTOR.—
(1) IN GENERAL.—The Office shall be headed by a Director,
who shall be appointed by the President, by and with the
advice and consent of the Senate.
(2) TERM OF SERVICE.—The Director shall serve for a term
of 6 years, except that, in the event that a successor is not
nominated and confirmed by the end of the term of service
of a Director, the Director may continue to serve until such
time as the next Director is appointed and confirmed.
(3) EXECUTIVE LEVEL.—The Director shall be compensated
at Level III of the Executive Schedule.
(4) PROHIBITION ON DUAL SERVICE.—The individual serving
in the position of Director may not, during such service, also
serve as the head of any financial regulatory agency.
(5) RESPONSIBILITIES, DUTIES, AND AUTHORITY.—The
Director shall have sole discretion in the manner in which
the Director fulfills the responsibilities and duties and exercises
the authorities described in this subtitle.
(c) BUDGET.—The Director, in consultation with the Chairperson, shall establish the annual budget of the Office.
(d) OFFICE PERSONNEL.—
(1) IN GENERAL.—The Director, in consultation with the
Chairperson, may fix the number of, and appoint and direct,
all employees of the Office.
(2) COMPENSATION.—The Director, in consultation with the
Chairperson, shall fix, adjust, and administer the pay for all
employees of the Office, without regard to chapter 51 or subchapter III of chapter 53 of title 5, United States Code, relating
to classification of positions and General Schedule pay rates.

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President.
Appointment.

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Regulations.

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(3) COMPARABILITY.—Section 1206(a) of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989
(12 U.S.C. 1833b(a)) is amended—
(A) by striking ‘‘Finance Board,’’ and inserting ‘‘Finance
Board, the Office of Financial Research, and the Bureau
of Consumer Financial Protection’’; and
(B) by striking ‘‘and the Office of Thrift Supervision,’’.
(4) SENIOR EXECUTIVES.—Section 3132(a)(1)(D) of title 5,
United States Code, is amended by striking ‘‘and the National
Credit Union Administration;’’ and inserting ‘‘the National
Credit Union Administration, the Bureau of Consumer Financial Protection, and the Office of Financial Research;’’.
(e) ASSISTANCE FROM FEDERAL AGENCIES.—Any department
or agency of the United States may provide to the Office and
any special advisory, technical, or professional committees
appointed by the Office, such services, funds, facilities, staff, and
other support services as the Office may determine advisable. Any
Federal Government employee may be detailed to the Office without
reimbursement, and such detail shall be without interruption or
loss of civil service status or privilege.
(f) PROCUREMENT OF TEMPORARY AND INTERMITTENT SERVICES.—The Director may procure temporary and intermittent services under section 3109(b) of title 5, United States Code, at rates
for individuals which do not exceed the daily equivalent of the
annual rate of basic pay prescribed for Level V of the Executive
Schedule under section 5316 of such title.
(g) POST-EMPLOYMENT PROHIBITIONS.—The Secretary, with the
concurrence of the Director of the Office of Government Ethics,
shall issue regulations prohibiting the Director and any employee
of the Office who has had access to the transaction or position
data maintained by the Data Center or other business confidential
information about financial entities required to report to the Office
from being employed by or providing advice or consulting services
to a financial company, for a period of 1 year after last having
had access in the course of official duties to such transaction or
position data or business confidential information, regardless of
whether that entity is required to report to the Office. For employees
whose access to business confidential information was limited, the
regulations may provide, on a case-by-case basis, for a shorter
period of post-employment prohibition, provided that the shorter
period does not compromise business confidential information.
(h) TECHNICAL AND PROFESSIONAL ADVISORY COMMITTEES.—
The Office, in consultation with the Chairperson, may appoint such
special advisory, technical, or professional committees as may be
useful in carrying out the functions of the Office, and the members
of such committees may be staff of the Office, or other persons,
or both.
(i) FELLOWSHIP PROGRAM.—The Office, in consultation with
the Chairperson, may establish and maintain an academic and
professional fellowship program, under which qualified academics
and professionals shall be invited to spend not longer than 2 years
at the Office, to perform research and to provide advanced training
for Office personnel.
(j) EXECUTIVE SCHEDULE COMPENSATION.—Section 5314 of title
5, United States Code, is amended by adding at the end the following new item:
‘‘Director of the Office of Financial Research.’’.

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SEC. 153. PURPOSE AND DUTIES OF THE OFFICE.

12 USC 5343.

(a) PURPOSE AND DUTIES.—The purpose of the Office is to
support the Council in fulfilling the purposes and duties of the
Council, as set forth in subtitle A, and to support member agencies,
by—
(1) collecting data on behalf of the Council, and providing
such data to the Council and member agencies;
(2) standardizing the types and formats of data reported
and collected;
(3) performing applied research and essential long-term
research;
(4) developing tools for risk measurement and monitoring;
(5) performing other related services;
(6) making the results of the activities of the Office available to financial regulatory agencies; and
(7) assisting such member agencies in determining the
types and formats of data authorized by this Act to be collected
by such member agencies.
(b) ADMINISTRATIVE AUTHORITY.—The Office may—
(1) share data and information, including software developed by the Office, with the Council, member agencies, and
the Bureau of Economic Analysis, which shared data, information, and software—
(A) shall be maintained with at least the same level
of security as is used by the Office; and
(B) may not be shared with any individual or entity
without the permission of the Council;
(2) sponsor and conduct research projects; and
(3) assist, on a reimbursable basis, with financial analyses
undertaken at the request of other Federal agencies that are
not member agencies.
(c) RULEMAKING AUTHORITY.—
(1) SCOPE.—The Office, in consultation with the Chairperson, shall issue rules, regulations, and orders only to the
extent necessary to carry out the purposes and duties described
in paragraphs (1), (2), and (7) of subsection (a).
(2) STANDARDIZATION.—Member agencies, in consultation
with the Office, shall implement regulations promulgated by
the Office under paragraph (1) to standardize the types and
formats of data reported and collected on behalf of the Council,
as described in subsection (a)(2). If a member agency fails
to implement such regulations prior to the expiration of the
3-year period following the date of publication of final regulations, the Office, in consultation with the Chairperson, may
implement such regulations with respect to the financial entities under the jurisdiction of the member agency. This paragraph shall not supersede or interfere with the independent
authority of a member agency under other law to collect data,
in such format and manner as the member agency requires.
(d) TESTIMONY.—
(1) IN GENERAL.—The Director of the Office shall report
to and testify before the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on Financial
Services of the House of Representatives annually on the activities of the Office, including the work of the Data Center and
the Research and Analysis Center, and the assessment of the

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124 STAT. 1416

Office of significant financial market developments and potential emerging threats to the financial stability of the United
States.
(2) NO PRIOR REVIEW.—No officer or agency of the United
States shall have any authority to require the Director to
submit the testimony required under paragraph (1) or other
congressional testimony to any officer or agency of the United
States for approval, comment, or review prior to the submission
of such testimony. Any such testimony to Congress shall include
a statement that the views expressed therein are those of
the Director and do not necessarily represent the views of
the President.
(e) ADDITIONAL REPORTS.—The Director may provide additional
reports to Congress concerning the financial stability of the United
States. The Director shall notify the Council of any such additional
reports provided to Congress.
(f) SUBPOENA.—
(1) IN GENERAL.—The Director may require from a financial
company, by subpoena, the production of the data requested
under subsection (a)(1) and section 154(b)(1), but only upon
a written finding by the Director that—
(A) such data is required to carry out the functions
described under this subtitle; and
(B) the Office has coordinated with the relevant primary financial regulatory agency, as required under section
154(b)(1)(B)(ii).
(2) FORMAT.—Subpoenas under paragraph (1) shall bear
the signature of the Director, and shall be served by any
person or class of persons designated by the Director for that
purpose.
(3) ENFORCEMENT.—In the case of contumacy or failure
to obey a subpoena, the subpoena shall be enforceable by order
of any appropriate district court of the United States. Any
failure to obey the order of the court may be punished by
the court as a contempt of court.

Notification.

12 USC 5344.

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PUBLIC LAW 111–203—JULY 21, 2010

SEC. 154. ORGANIZATIONAL STRUCTURE; RESPONSIBILITIES OF PRIMARY PROGRAMMATIC UNITS.

(a) IN GENERAL.—There are established within the Office, to
carry out the programmatic responsibilities of the Office—
(1) the Data Center; and
(2) the Research and Analysis Center.
(b) DATA CENTER.—
(1) GENERAL DUTIES.—
(A) DATA COLLECTION.—The Data Center, on behalf
of the Council, shall collect, validate, and maintain all
data necessary to carry out the duties of the Data Center,
as described in this subtitle. The data assembled shall
be obtained from member agencies, commercial data providers, publicly available data sources, and financial entities under subparagraph (B).
(B) AUTHORITY.—
(i) IN GENERAL.—The Office may, as determined
by the Council or by the Director in consultation with
the Council, require the submission of periodic and
other reports from any financial company for the purpose of assessing the extent to which a financial

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1417

activity or financial market in which the financial company participates, or the financial company itself, poses
a threat to the financial stability of the United States.
(ii) MITIGATION OF REPORT BURDEN.—Before
requiring the submission of a report from any financial
company that is regulated by a member agency, any
primary financial regulatory agency, a foreign supervisory authority, or the Office shall coordinate with
such agencies or authority, and shall, whenever possible, rely on information available from such agencies
or authority.
(iii) COLLECTION OF FINANCIAL TRANSACTION AND
POSITION DATA.—The Office shall collect, on a schedule
determined by the Director, in consultation with the
Council, financial transaction data and position data
from financial companies.
(C) RULEMAKING.—The Office shall promulgate regulations pursuant to subsections (a)(1), (a)(2), (a)(7), and (c)(1)
of section 153 regarding the type and scope of the data
to be collected by the Data Center under this paragraph.
(2) RESPONSIBILITIES.—
(A) PUBLICATION.—The Data Center shall prepare and
publish, in a manner that is easily accessible to the public—
(i) a financial company reference database;
(ii) a financial instrument reference database; and
(iii) formats and standards for Office data,
including standards for reporting financial transaction
and position data to the Office.
(B) CONFIDENTIALITY.—The Data Center shall not publish any confidential data under subparagraph (A).
(3) INFORMATION SECURITY.—The Director shall ensure that
data collected and maintained by the Data Center are kept
secure and protected against unauthorized disclosure.
(4) CATALOG OF FINANCIAL ENTITIES AND INSTRUMENTS.—
The Data Center shall maintain a catalog of the financial
entities and instruments reported to the Office.
(5) AVAILABILITY TO THE COUNCIL AND MEMBER AGENCIES.—
The Data Center shall make data collected and maintained
by the Data Center available to the Council and member agencies, as necessary to support their regulatory responsibilities.
(6) OTHER AUTHORITY.—The Office shall, after consultation
with the member agencies, provide certain data to financial
industry participants and to the general public to increase
market transparency and facilitate research on the financial
system, to the extent that intellectual property rights are not
violated, business confidential information is properly protected,
and the sharing of such information poses no significant threats
to the financial system of the United States.
(c) RESEARCH AND ANALYSIS CENTER.—
(1) GENERAL DUTIES.—The Research and Analysis Center,
on behalf of the Council, shall develop and maintain independent analytical capabilities and computing resources—
(A) to develop and maintain metrics and reporting
systems for risks to the financial stability of the United
States;

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Public
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124 STAT. 1418

PUBLIC LAW 111–203—JULY 21, 2010
(B) to monitor, investigate, and report on changes in
systemwide risk levels and patterns to the Council and
Congress;
(C) to conduct, coordinate, and sponsor research to
support and improve regulation of financial entities and
markets;
(D) to evaluate and report on stress tests or other
stability-related evaluations of financial entities overseen
by the member agencies;
(E) to maintain expertise in such areas as may be
necessary to support specific requests for advice and assistance from financial regulators;
(F) to investigate disruptions and failures in the financial markets, report findings, and make recommendations
to the Council based on those findings;
(G) to conduct studies and provide advice on the impact
of policies related to systemic risk; and
(H) to promote best practices for financial risk management.
(d) REPORTING RESPONSIBILITIES.—
(1) REQUIRED REPORTS.—Not later than 2 years after the
date of enactment of this Act, and not later than 120 days
after the end of each fiscal year thereafter, the Office shall
prepare and submit a report to Congress.
(2) CONTENT.—Each report required by this subsection
shall assess the state of the United States financial system,
including—
(A) an analysis of any threats to the financial stability
of the United States;
(B) the status of the efforts of the Office in meeting
the mission of the Office; and
(C) key findings from the research and analysis of
the financial system by the Office.

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12 USC 5345.

SEC. 155. FUNDING.

(a) FINANCIAL RESEARCH FUND.—
(1) FUND ESTABLISHED.—There is established in the
Treasury of the United States a separate fund to be known
as the ‘‘Financial Research Fund’’.
(2) FUND RECEIPTS.—All amounts provided to the Office
under subsection (c), and all assessments that the Office
receives under subsection (d) shall be deposited into the Financial Research Fund.
(3) INVESTMENTS AUTHORIZED.—
(A) AMOUNTS IN FUND MAY BE INVESTED.—The Director
may request the Secretary to invest the portion of the
Financial Research Fund that is not, in the judgment of
the Director, required to meet the needs of the Office.
(B) ELIGIBLE INVESTMENTS.—Investments shall be
made by the Secretary in obligations of the United States
or obligations that are guaranteed as to principal and
interest by the United States, with maturities suitable
to the needs of the Financial Research Fund, as determined
by the Director.
(4) INTEREST AND PROCEEDS CREDITED.—The interest on,
and the proceeds from the sale or redemption of, any obligations

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held in the Financial Research Fund shall be credited to and
form a part of the Financial Research Fund.
(b) USE OF FUNDS.—
(1) IN GENERAL.—Funds obtained by, transferred to, or
credited to the Financial Research Fund shall be immediately
available to the Office, and shall remain available until
expended, to pay the expenses of the Office in carrying out
the duties and responsibilities of the Office.
(2) FEES, ASSESSMENTS, AND OTHER FUNDS NOT GOVERNMENT FUNDS.—Funds obtained by, transferred to, or credited
to the Financial Research Fund shall not be construed to be
Government funds or appropriated moneys.
(3) AMOUNTS NOT SUBJECT TO APPORTIONMENT.—Notwithstanding any other provision of law, amounts in the Financial
Research Fund shall not be subject to apportionment for purposes of chapter 15 of title 31, United States Code, or under
any other authority, or for any other purpose.
(c) INTERIM FUNDING.—During the 2-year period following the
date of enactment of this Act, the Board of Governors shall provide
to the Office an amount sufficient to cover the expenses of the
Office.
(d) PERMANENT SELF-FUNDING.—Beginning 2 years after the
date of enactment of this Act, the Secretary shall establish, by
regulation, and with the approval of the Council, an assessment
schedule, including the assessment base and rates, applicable to
bank holding companies with total consolidated assets of
50,000,000,000 or greater and nonbank financial companies supervised by the Board of Governors, that takes into account differences
among such companies, based on the considerations for establishing
the prudential standards under section 115, to collect assessments
equal to the total expenses of the Office.

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SEC. 156. TRANSITION OVERSIGHT.

Time period.

Effective date.
Regulations.
Assessments.

12 USC 5346.

(a) PURPOSE.—The purpose of this section is to ensure that
the Office—
(1) has an orderly and organized startup;
(2) attracts and retains a qualified workforce; and
(3) establishes comprehensive employee training and benefits programs.
(b) REPORTING REQUIREMENT.—
(1) IN GENERAL.—The Office shall submit an annual report
to the Committee on Banking, Housing, and Urban Affairs
of the Senate and the Committee on Financial Services of
the House of Representatives that includes the plans described
in paragraph (2).
(2) PLANS.—The plans described in this paragraph are as
follows:
(A) TRAINING AND WORKFORCE DEVELOPMENT PLAN.—
The Office shall submit a training and workforce development plan that includes, to the extent practicable—
(i) identification of skill and technical expertise
needs and actions taken to meet those requirements;
(ii) steps taken to foster innovation and creativity;
(iii) leadership development and succession planning; and
(iv) effective use of technology by employees.

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(B) WORKPLACE FLEXIBILITY PLAN.—The Office shall
submit a workforce flexibility plan that includes, to the
extent practicable—
(i) telework;
(ii) flexible work schedules;
(iii) phased retirement;
(iv) reemployed annuitants;
(v) part-time work;
(vi) job sharing;
(vii) parental leave benefits and childcare assistance;
(viii) domestic partner benefits;
(ix) other workplace flexibilities; or
(x) any combination of the items described in
clauses (i) through (ix).
(C) RECRUITMENT AND RETENTION PLAN.—The Office
shall submit a recruitment and retention plan that
includes, to the extent practicable, provisions relating to—
(i) the steps necessary to target highly qualified
applicant pools with diverse backgrounds;
(ii) streamlined employment application processes;
(iii) the provision of timely notification of the
status of employment applications to applicants; and
(iv) the collection of information to measure indicators of hiring effectiveness.
(c) EXPIRATION.—The reporting requirement under subsection
(b) shall terminate 5 years after the date of enactment of this
Act.
(d) RULE OF CONSTRUCTION.—Nothing in this section may be
construed to affect—
(1) a collective bargaining agreement, as that term is
defined in section 7103(a)(8) of title 5, United States Code,
that is in effect on the date of enactment of this Act; or
(2) the rights of employees under chapter 71 of title 5,
United States Code.

Subtitle C—Additional Board of Governors
Authority for Certain Nonbank Financial
Companies and Bank Holding Companies

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12 USC 5361.

SEC. 161. REPORTS BY AND EXAMINATIONS OF NONBANK FINANCIAL
COMPANIES BY THE BOARD OF GOVERNORS.

(a) REPORTS.—
(1) IN GENERAL.—The Board of Governors may require
each nonbank financial company supervised by the Board of
Governors, and any subsidiary thereof, to submit reports under
oath, to keep the Board of Governors informed as to—
(A) the financial condition of the company or subsidiary, systems of the company or subsidiary for monitoring and controlling financial, operating, and other risks,
and the extent to which the activities and operations of
the company or subsidiary pose a threat to the financial
stability of the United States; and
(B) compliance by the company or subsidiary with the
requirements of this title.

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(2) USE OF EXISTING REPORTS AND INFORMATION.—In carrying out subsection (a), the Board of Governors shall, to the
fullest extent possible, use—
(A) reports and supervisory information that a nonbank
financial company or subsidiary thereof has been required
to provide to other Federal or State regulatory agencies;
(B) information otherwise obtainable from Federal or
State regulatory agencies;
(C) information that is otherwise required to be
reported publicly; and
(D) externally audited financial statements of such
company or subsidiary.
(3) AVAILABILITY.—Upon the request of the Board of Governors, a nonbank financial company supervised by the Board
of Governors, or a subsidiary thereof, shall promptly provide
to the Board of Governors any information described in paragraph (2).
(b) EXAMINATIONS.—
(1) IN GENERAL.—Subject to paragraph (2), the Board of
Governors may examine any nonbank financial company supervised by the Board of Governors and any subsidiary of such
company, to inform the Board of Governors of—
(A) the nature of the operations and financial condition
of the company and such subsidiary;
(B) the financial, operational, and other risks of the
company or such subsidiary that may pose a threat to
the safety and soundness of such company or subsidiary
or to the financial stability of the United States;
(C) the systems for monitoring and controlling such
risks; and
(D) compliance by the company or such subsidiary
with the requirements of this title.
(2) USE OF EXAMINATION REPORTS AND INFORMATION.—For
purposes of this subsection, the Board of Governors shall, to
the fullest extent possible, rely on reports of examination of
any subsidiary depository institution or functionally regulated
subsidiary made by the primary financial regulatory agency
for that subsidiary, and on information described in subsection
(a)(2).
(c) COORDINATION WITH PRIMARY FINANCIAL REGULATORY
AGENCY.—The Board of Governors shall—
(1) provide reasonable notice to, and consult with, the
primary financial regulatory agency for any subsidiary before
requiring a report or commencing an examination of such subsidiary under this section; and
(2) avoid duplication of examination activities, reporting
requirements, and requests for information, to the fullest extent
possible.

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SEC. 162. ENFORCEMENT.

Notice.
Consultation.

12 USC 5362.

(a) IN GENERAL.—Except as provided in subsection (b), a
nonbank financial company supervised by the Board of Governors
and any subsidiaries of such company (other than any depository
institution subsidiary) shall be subject to the provisions of subsections (b) through (n) of section 8 of the Federal Deposit Insurance
Act (12 U.S.C. 1818), in the same manner and to the same extent
as if the company were a bank holding company, as provided

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in section 8(b)(3) of the Federal Deposit Insurance Act (12 U.S.C.
1818(b)(3)).
(b) ENFORCEMENT AUTHORITY FOR FUNCTIONALLY REGULATED
SUBSIDIARIES.—
(1) REFERRAL.—If the Board of Governors determines that
a condition, practice, or activity of a depository institution
subsidiary or functionally regulated subsidiary of a nonbank
financial company supervised by the Board of Governors does
not comply with the regulations or orders prescribed by the
Board of Governors under this Act, or otherwise poses a threat
to the financial stability of the United States, the Board of
Governors may recommend, in writing, to the primary financial
regulatory agency for the subsidiary that such agency initiate
a supervisory action or enforcement proceeding. The recommendation shall be accompanied by a written explanation
of the concerns giving rise to the recommendation.
(2) BACK-UP AUTHORITY OF THE BOARD OF GOVERNORS.—
If, during the 60-day period beginning on the date on which
the primary financial regulatory agency receives a recommendation under paragraph (1), the primary financial regulatory
agency does not take supervisory or enforcement action against
a subsidiary that is acceptable to the Board of Governors,
the Board of Governors (upon a vote of its members) may
take the recommended supervisory or enforcement action, as
if the subsidiary were a bank holding company subject to supervision by the Board of Governors.
12 USC 5363.

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Applicability.

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SEC. 163. ACQUISITIONS.

(a) ACQUISITIONS OF BANKS; TREATMENT AS A BANK HOLDING
COMPANY.—For purposes of section 3 of the Bank Holding Company
Act of 1956 (12 U.S.C. 1842), a nonbank financial company supervised by the Board of Governors shall be deemed to be, and shall
be treated as, a bank holding company.
(b) ACQUISITION OF NONBANK COMPANIES.—
(1) PRIOR NOTICE FOR LARGE ACQUISITIONS.—Notwithstanding section 4(k)(6)(B) of the Bank Holding Company Act
of 1956 (12 U.S.C. 1843(k)(6)(B)), a bank holding company
with total consolidated assets equal to or greater than
$50,000,000,000 or a nonbank financial company supervised
by the Board of Governors shall not acquire direct or indirect
ownership or control of any voting shares of any company
(other than an insured depository institution) that is engaged
in activities described in section 4(k) of the Bank Holding
Company Act of 1956 having total consolidated assets of
$10,000,000,000 or more, without providing written notice to
the Board of Governors in advance of the transaction.
(2) EXEMPTIONS.—The prior notice requirement in paragraph (1) shall not apply with regard to the acquisition of
shares that would qualify for the exemptions in section 4(c)
or section 4(k)(4)(E) of the Bank Holding Company Act of
1956 (12 U.S.C. 1843(c) and (k)(4)(E)).
(3) NOTICE PROCEDURES.—The notice procedures set forth
in section 4(j)(1) of the Bank Holding Company Act of 1956
(12 U.S.C. 1843(j)(1)), without regard to section 4(j)(3) of that
Act, shall apply to an acquisition of any company (other than
an insured depository institution) by a bank holding company
with total consolidated assets equal to or greater than

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124 STAT. 1423

$50,000,000,000 or a nonbank financial company supervised
by the Board of Governors, as described in paragraph (1),
including any such company engaged in activities described
in section 4(k) of that Act.
(4) STANDARDS FOR REVIEW.—In addition to the standards
provided in section 4(j)(2) of the Bank Holding Company Act
of 1956 (12 U.S.C. 1843(j)(2)), the Board of Governors shall
consider the extent to which the proposed acquisition would
result in greater or more concentrated risks to global or United
States financial stability or the United States economy.
(5) HART-SCOTT-RODINO FILING REQUIREMENT.—Solely for
purposes of section 7A(c)(8) of the Clayton Act (15 U.S.C.
18a(c)(8)), the transactions subject to the requirements of paragraph (1) shall be treated as if Board of Governors approval
is not required.
SEC.

164.

PROHIBITION AGAINST MANAGEMENT INTERLOCKS
BETWEEN CERTAIN FINANCIAL COMPANIES.

12 USC 5364.

A nonbank financial company supervised by the Board of Governors shall be treated as a bank holding company for purposes
of the Depository Institutions Management Interlocks Act (12 U.S.C.
3201 et seq.), except that the Board of Governors shall not exercise
the authority provided in section 7 of that Act (12 U.S.C. 3207)
to permit service by a management official of a nonbank financial
company supervised by the Board of Governors as a management
official of any bank holding company with total consolidated assets
equal to or greater than $50,000,000,000, or other nonaffiliated
nonbank financial company supervised by the Board of Governors
(other than to provide a temporary exemption for interlocks
resulting from a merger, acquisition, or consolidation).

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SEC. 165. ENHANCED SUPERVISION AND PRUDENTIAL STANDARDS
FOR NONBANK FINANCIAL COMPANIES SUPERVISED BY
THE BOARD OF GOVERNORS AND CERTAIN BANK HOLDING
COMPANIES.

12 USC 5365.

(a) IN GENERAL.—
(1) PURPOSE.—In order to prevent or mitigate risks to
the financial stability of the United States that could arise
from the material financial distress or failure, or ongoing activities, of large, interconnected financial institutions, the Board
of Governors shall, on its own or pursuant to recommendations
by the Council under section 115, establish prudential standards for nonbank financial companies supervised by the Board
of Governors and bank holding companies with total consolidated assets equal to or greater than $50,000,000,000 that—
(A) are more stringent than the standards and requirements applicable to nonbank financial companies and bank
holding companies that do not present similar risks to
the financial stability of the United States; and
(B) increase in stringency, based on the considerations
identified in subsection (b)(3).
(2) TAILORED APPLICATION.—
(A) IN GENERAL.—In prescribing more stringent
prudential standards under this section, the Board of Governors may, on its own or pursuant to a recommendation
by the Council in accordance with section 115, differentiate
among companies on an individual basis or by category,
taking into consideration their capital structure, riskiness,

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PUBLIC LAW 111–203—JULY 21, 2010
complexity, financial activities (including the financial
activities of their subsidiaries), size, and any other riskrelated factors that the Board of Governors deems appropriate.
(B) ADJUSTMENT OF THRESHOLD FOR APPLICATION OF
CERTAIN STANDARDS.—The Board of Governors may, pursuant to a recommendation by the Council in accordance
with section 115, establish an asset threshold above
$50,000,000,000 for the application of any standard established under subsections (c) through (g).
(b) DEVELOPMENT OF PRUDENTIAL STANDARDS.—
(1) IN GENERAL.—
(A) REQUIRED STANDARDS.—The Board of Governors
shall establish prudential standards for nonbank financial
companies supervised by the Board of Governors and bank
holding companies described in subsection (a), that shall
include—
(i) risk-based capital requirements and leverage
limits, unless the Board of Governors, in consultation
with the Council, determines that such requirements
are not appropriate for a company subject to more
stringent prudential standards because of the activities
of such company (such as investment company activities or assets under management) or structure, in
which case, the Board of Governors shall apply other
standards that result in similarly stringent risk controls;
(ii) liquidity requirements;
(iii) overall risk management requirements;
(iv) resolution plan and credit exposure report
requirements; and
(v) concentration limits.
(B) ADDITIONAL STANDARDS AUTHORIZED.—The Board
of Governors may establish additional prudential standards
for nonbank financial companies supervised by the Board
of Governors and bank holding companies described in
subsection (a), that include—
(i) a contingent capital requirement;
(ii) enhanced public disclosures;
(iii) short-term debt limits; and
(iv) such other prudential standards as the Board
or Governors, on its own or pursuant to a recommendation made by the Council in accordance with section
115, determines are appropriate.
(2) STANDARDS FOR FOREIGN FINANCIAL COMPANIES.—In
applying the standards set forth in paragraph (1) to any foreign
nonbank financial company supervised by the Board of Governors or foreign-based bank holding company, the Board of
Governors shall—
(A) give due regard to the principle of national treatment and equality of competitive opportunity; and
(B) take into account the extent to which the foreign
financial company is subject on a consolidated basis to
home country standards that are comparable to those
applied to financial companies in the United States.
(3) CONSIDERATIONS.—In prescribing prudential standards
under paragraph (1), the Board of Governors shall—

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124 STAT. 1425

(A) take into account differences among nonbank financial companies supervised by the Board of Governors and
bank holding companies described in subsection (a), based
on—
(i) the factors described in subsections (a) and
(b) of section 113;
(ii) whether the company owns an insured depository institution;
(iii) nonfinancial activities and affiliations of the
company; and
(iv) any other risk-related factors that the Board
of Governors determines appropriate;
(B) to the extent possible, ensure that small changes
in the factors listed in subsections (a) and (b) of section
113 would not result in sharp, discontinuous changes in
the prudential standards established under paragraph (1)
of this subsection;
(C) take into account any recommendations of the
Council under section 115; and
(D) adapt the required standards as appropriate in
light of any predominant line of business of such company,
including assets under management or other activities for
which particular standards may not be appropriate.
(4) CONSULTATION.—Before imposing prudential standards
or any other requirements pursuant to this section, including
notices of deficiencies in resolution plans and more stringent
requirements or divestiture orders resulting from such notices,
that are likely to have a significant impact on a functionally
regulated subsidiary or depository institution subsidiary of a
nonbank financial company supervised by the Board of Governors or a bank holding company described in subsection (a),
the Board of Governors shall consult with each Council member
that primarily supervises any such subsidiary with respect
to any such standard or requirement.
(5) REPORT.—The Board of Governors shall submit an
annual report to Congress regarding the implementation of
the prudential standards required pursuant to paragraph (1),
including the use of such standards to mitigate risks to the
financial stability of the United States.
(c) CONTINGENT CAPITAL.—
(1) IN GENERAL.—Subsequent to submission by the Council
of a report to Congress under section 115(c), the Board of
Governors may issue regulations that require each nonbank
financial company supervised by the Board of Governors and
bank holding companies described in subsection (a) to maintain
a minimum amount of contingent capital that is convertible
to equity in times of financial stress.
(2) FACTORS TO CONSIDER.—In issuing regulations under
this subsection, the Board of Governors shall consider—
(A) the results of the study undertaken by the Council,
and any recommendations of the Council, under section
115(c);
(B) an appropriate transition period for implementation
of contingent capital under this subsection;
(C) the factors described in subsection (b)(3)(A);
(D) capital requirements applicable to the nonbank
financial company supervised by the Board of Governors

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124 STAT. 1426

PUBLIC LAW 111–203—JULY 21, 2010
or a bank holding company described in subsection (a),
and subsidiaries thereof; and
(E) any other factor that the Board of Governors deems
appropriate.
(d) RESOLUTION PLAN AND CREDIT EXPOSURE REPORTS.—
(1) RESOLUTION PLAN.—The Board of Governors shall
require each nonbank financial company supervised by the
Board of Governors and bank holding companies described in
subsection (a) to report periodically to the Board of Governors,
the Council, and the Corporation the plan of such company
for rapid and orderly resolution in the event of material financial distress or failure, which shall include—
(A) information regarding the manner and extent to
which any insured depository institution affiliated with
the company is adequately protected from risks arising
from the activities of any nonbank subsidiaries of the company;
(B) full descriptions of the ownership structure, assets,
liabilities, and contractual obligations of the company;
(C) identification of the cross-guarantees tied to different securities, identification of major counterparties, and
a process for determining to whom the collateral of the
company is pledged; and
(D) any other information that the Board of Governors
and the Corporation jointly require by rule or order.
(2) CREDIT EXPOSURE REPORT.—The Board of Governors
shall require each nonbank financial company supervised by
the Board of Governors and bank holding companies described
in subsection (a) to report periodically to the Board of Governors, the Council, and the Corporation on—
(A) the nature and extent to which the company has
credit exposure to other significant nonbank financial
companies and significant bank holding companies; and
(B) the nature and extent to which other significant
nonbank financial companies and significant bank holding
companies have credit exposure to that company.
(3) REVIEW.—The Board of Governors and the Corporation
shall review the information provided in accordance with this
subsection by each nonbank financial company supervised by
the Board of Governors and bank holding company described
in subsection (a).
(4) NOTICE OF DEFICIENCIES.—If the Board of Governors
and the Corporation jointly determine, based on their review
under paragraph (3), that the resolution plan of a nonbank
financial company supervised by the Board of Governors or
a bank holding company described in subsection (a) is not
credible or would not facilitate an orderly resolution of the
company under title 11, United States Code—
(A) the Board of Governors and the Corporation shall
notify the company of the deficiencies in the resolution
plan; and
(B) the company shall resubmit the resolution plan
within a timeframe determined by the Board of Governors
and the Corporation, with revisions demonstrating that
the plan is credible and would result in an orderly resolution under title 11, United States Code, including any

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124 STAT. 1427

proposed changes in business operations and corporate
structure to facilitate implementation of the plan.
(5) FAILURE TO RESUBMIT CREDIBLE PLAN.—
(A) IN GENERAL.—If a nonbank financial company
supervised by the Board of Governors or a bank holding
company described in subsection (a) fails to timely resubmit
the resolution plan as required under paragraph (4), with
such revisions as are required under subparagraph (B),
the Board of Governors and the Corporation may jointly
impose more stringent capital, leverage, or liquidity
requirements, or restrictions on the growth, activities, or
operations of the company, or any subsidiary thereof, until
such time as the company resubmits a plan that remedies
the deficiencies.
(B) DIVESTITURE.—The Board of Governors and the
Corporation, in consultation with the Council, may jointly
direct a nonbank financial company supervised by the
Board of Governors or a bank holding company described
in subsection (a), by order, to divest certain assets or operations identified by the Board of Governors and the Corporation, to facilitate an orderly resolution of such company
under title 11, United States Code, in the event of the
failure of such company, in any case in which—
(i) the Board of Governors and the Corporation
have jointly imposed more stringent requirements on
the company pursuant to subparagraph (A); and
(ii) the company has failed, within the 2-year
period beginning on the date of the imposition of such
requirements under subparagraph (A), to resubmit the
resolution plan with such revisions as were required
under paragraph (4)(B).
(6) NO LIMITING EFFECT.—A resolution plan submitted in
accordance with this subsection shall not be binding on a bankruptcy court, a receiver appointed under title II, or any other
authority that is authorized or required to resolve the nonbank
financial company supervised by the Board, any bank holding
company, or any subsidiary or affiliate of the foregoing.
(7) NO PRIVATE RIGHT OF ACTION.—No private right of
action may be based on any resolution plan submitted in accordance with this subsection.
(8) RULES.—Not later than 18 months after the date of
enactment of this Act, the Board of Governors and the Corporation shall jointly issue final rules implementing this subsection.
(e) CONCENTRATION LIMITS.—
(1) STANDARDS.—In order to limit the risks that the failure
of any individual company could pose to a nonbank financial
company supervised by the Board of Governors or a bank
holding company described in subsection (a), the Board of Governors, by regulation, shall prescribe standards that limit such
risks.
(2) LIMITATION ON CREDIT EXPOSURE.—The regulations prescribed by the Board of Governors under paragraph (1) shall
prohibit each nonbank financial company supervised by the
Board of Governors and bank holding company described in
subsection (a) from having credit exposure to any unaffiliated
company that exceeds 25 percent of the capital stock and surplus (or such lower amount as the Board of Governors may

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determine by regulation to be necessary to mitigate risks to
the financial stability of the United States) of the company.
(3) CREDIT EXPOSURE.—For purposes of paragraph (2),
‘‘credit exposure’’ to a company means—
(A) all extensions of credit to the company, including
loans, deposits, and lines of credit;
(B) all repurchase agreements and reverse repurchase
agreements with the company, and all securities borrowing
and lending transactions with the company, to the extent
that such transactions create credit exposure for the
nonbank financial company supervised by the Board of
Governors or a bank holding company described in subsection (a);
(C) all guarantees, acceptances, or letters of credit
(including endorsement or standby letters of credit) issued
on behalf of the company;
(D) all purchases of or investment in securities issued
by the company;
(E) counterparty credit exposure to the company in
connection with a derivative transaction between the
nonbank financial company supervised by the Board of
Governors or a bank holding company described in subsection (a) and the company; and
(F) any other similar transactions that the Board of
Governors, by regulation, determines to be a credit exposure for purposes of this section.
(4) ATTRIBUTION RULE.—For purposes of this subsection,
any transaction by a nonbank financial company supervised
by the Board of Governors or a bank holding company described
in subsection (a) with any person is a transaction with a company, to the extent that the proceeds of the transaction are
used for the benefit of, or transferred to, that company.
(5) RULEMAKING.—The Board of Governors may issue such
regulations and orders, including definitions consistent with
this section, as may be necessary to administer and carry
out this subsection.
(6) EXEMPTIONS.—This subsection shall not apply to any
Federal home loan bank. The Board of Governors may, by
regulation or order, exempt transactions, in whole or in part,
from the definition of the term ‘‘credit exposure’’ for purposes
of this subsection, if the Board of Governors finds that the
exemption is in the public interest and is consistent with the
purpose of this subsection.
(7) TRANSITION PERIOD.—
(A) IN GENERAL.—This subsection and any regulations
and orders of the Board of Governors under this subsection
shall not be effective until 3 years after the date of enactment of this Act.
(B) EXTENSION AUTHORIZED.—The Board of Governors
may extend the period specified in subparagraph (A) for
not longer than an additional 2 years.
(f) ENHANCED PUBLIC DISCLOSURES.—The Board of Governors
may prescribe, by regulation, periodic public disclosures by nonbank
financial companies supervised by the Board of Governors and
bank holding companies described in subsection (a) in order to
support market evaluation of the risk profile, capital adequacy,
and risk management capabilities thereof.

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124 STAT. 1429

(g) SHORT-TERM DEBT LIMITS.—
(1) IN GENERAL.—In order to mitigate the risks that an
over-accumulation of short-term debt could pose to financial
companies and to the stability of the United States financial
system, the Board of Governors may, by regulation, prescribe
a limit on the amount of short-term debt, including off-balance
sheet exposures, that may be accumulated by any bank holding
company described in subsection (a) and any nonbank financial
company supervised by the Board of Governors.
(2) BASIS OF LIMIT.—Any limit prescribed under paragraph
(1) shall be based on the short-term debt of the company
described in paragraph (1) as a percentage of capital stock
and surplus of the company or on such other measure as
the Board of Governors considers appropriate.
(3) SHORT-TERM DEBT DEFINED.—For purposes of this subsection, the term ‘‘short-term debt’’ means such liabilities with
short-dated maturity that the Board of Governors identifies,
by regulation, except that such term does not include insured
deposits.
(4) RULEMAKING AUTHORITY.—In addition to prescribing
regulations under paragraphs (1) and (3), the Board of Governors may prescribe such regulations, including definitions
consistent with this subsection, and issue such orders, as may
be necessary to carry out this subsection.
(5) AUTHORITY TO ISSUE EXEMPTIONS AND ADJUSTMENTS.—
Notwithstanding the Bank Holding Company Act of 1956 (12
U.S.C. 1841 et seq.), the Board of Governors may, if it determines such action is necessary to ensure appropriate heightened
prudential supervision, with respect to a company described
in paragraph (1) that does not control an insured depository
institution, issue to such company an exemption from or adjustment to the limit prescribed under paragraph (1).
(h) RISK COMMITTEE.—
(1) NONBANK FINANCIAL COMPANIES SUPERVISED BY THE
BOARD OF GOVERNORS.—The Board of Governors shall require
each nonbank financial company supervised by the Board of
Governors that is a publicly traded company to establish a
risk committee, as set forth in paragraph (3), not later than
1 year after the date of receipt of a notice of final determination
under section 113(e)(3) with respect to such nonbank financial
company supervised by the Board of Governors.
(2) CERTAIN BANK HOLDING COMPANIES.—
(A) MANDATORY REGULATIONS.—The Board of Governors shall issue regulations requiring each bank holding
company that is a publicly traded company and that has
total consolidated assets of not less than $10,000,000,000
to establish a risk committee, as set forth in paragraph
(3).
(B) PERMISSIVE REGULATIONS.—The Board of Governors
may require each bank holding company that is a publicly
traded company and that has total consolidated assets
of less than $10,000,000,000 to establish a risk committee,
as set forth in paragraph (3), as determined necessary
or appropriate by the Board of Governors to promote sound
risk management practices.
(3) RISK COMMITTEE.—A risk committee required by this
subsection shall—

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Effective date.

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(A) be responsible for the oversight of the enterprisewide risk management practices of the nonbank financial
company supervised by the Board of Governors or bank
holding company described in subsection (a), as applicable;
(B) include such number of independent directors as
the Board of Governors may determine appropriate, based
on the nature of operations, size of assets, and other appropriate criteria related to the nonbank financial company
supervised by the Board of Governors or a bank holding
company described in subsection (a), as applicable; and
(C) include at least 1 risk management expert having
experience in identifying, assessing, and managing risk
exposures of large, complex firms.
(4) RULEMAKING.—The Board of Governors shall issue final
rules to carry out this subsection, not later than 1 year after
the transfer date, to take effect not later than 15 months
after the transfer date.
(i) STRESS TESTS.—
(1) BY THE BOARD OF GOVERNORS.—
(A) ANNUAL TESTS REQUIRED.—The Board of Governors,
in coordination with the appropriate primary financial
regulatory agencies and the Federal Insurance Office, shall
conduct annual analyses in which nonbank financial
companies supervised by the Board of Governors and bank
holding companies described in subsection (a) are subject
to evaluation of whether such companies have the capital,
on a total consolidated basis, necessary to absorb losses
as a result of adverse economic conditions.
(B) TEST PARAMETERS AND CONSEQUENCES.—The Board
of Governors—
(i) shall provide for at least 3 different sets of
conditions under which the evaluation required by this
subsection shall be conducted, including baseline,
adverse, and severely adverse;
(ii) may require the tests described in subparagraph (A) at bank holding companies and nonbank
financial companies, in addition to those for which
annual tests are required under subparagraph (A);
(iii) may develop and apply such other analytic
techniques as are necessary to identify, measure, and
monitor risks to the financial stability of the United
States;
(iv) shall require the companies described in
subparagraph (A) to update their resolution plans
required under subsection (d)(1), as the Board of Governors determines appropriate, based on the results
of the analyses; and
(v) shall publish a summary of the results of the
tests required under subparagraph (A) or clause (ii)
of this subparagraph.
(2) BY THE COMPANY.—
(A) REQUIREMENT.—A nonbank financial company
supervised by the Board of Governors and a bank holding
company described in subsection (a) shall conduct semiannual stress tests. All other financial companies that have
total consolidated assets of more than $10,000,000,000 and
are regulated by a primary Federal financial regulatory

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agency shall conduct annual stress tests. The tests required
under this subparagraph shall be conducted in accordance
with the regulations prescribed under subparagraph (C).
(B) REPORT.—A company required to conduct stress
tests under subparagraph (A) shall submit a report to
the Board of Governors and to its primary financial regulatory agency at such time, in such form, and containing
such information as the primary financial regulatory
agency shall require.
(C) REGULATIONS.—Each Federal primary financial
regulatory agency, in coordination with the Board of Governors and the Federal Insurance Office, shall issue consistent and comparable regulations to implement this paragraph that shall—
(i) define the term ‘‘stress test’’ for purposes of
this paragraph;
(ii) establish methodologies for the conduct of
stress tests required by this paragraph that shall provide for at least 3 different sets of conditions, including
baseline, adverse, and severely adverse;
(iii) establish the form and content of the report
required by subparagraph (B); and
(iv) require companies subject to this paragraph
to publish a summary of the results of the required
stress tests.
(j) LEVERAGE LIMITATION.—
(1) REQUIREMENT.—The Board of Governors shall require
a bank holding company with total consolidated assets equal
to or greater than $50,000,000,000 or a nonbank financial company supervised by the Board of Governors to maintain a
debt to equity ratio of no more than 15 to 1, upon a determination by the Council that such company poses a grave threat
to the financial stability of the United States and that the
imposition of such requirement is necessary to mitigate the
risk that such company poses to the financial stability of the
United States. Nothing in this paragraph shall apply to a
Federal home loan bank.
(2) CONSIDERATIONS.—In making a determination under
this subsection, the Council shall consider the factors described
in subsections (a) and (b) of section 113 and any other riskrelated factors that the Council deems appropriate.
(3) REGULATIONS.—The Board of Governors shall promulgate regulations to establish procedures and timelines for complying with the requirements of this subsection.
(k) INCLUSION OF OFF-BALANCE-SHEET ACTIVITIES IN COMPUTING CAPITAL REQUIREMENTS.—
(1) IN GENERAL.—In the case of any bank holding company
described in subsection (a) or nonbank financial company supervised by the Board of Governors, the computation of capital
for purposes of meeting capital requirements shall take into
account any off-balance-sheet activities of the company.
(2) EXEMPTIONS.—If the Board of Governors determines
that an exemption from the requirement under paragraph (1)
is appropriate, the Board of Governors may exempt a company,
or any transaction or transactions engaged in by such company,
from the requirements of paragraph (1).

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PUBLIC LAW 111–203—JULY 21, 2010
(3) OFF-BALANCE-SHEET ACTIVITIES DEFINED.—For purposes
of this subsection, the term ‘‘off-balance-sheet activities’’ means
an existing liability of a company that is not currently a balance
sheet liability, but may become one upon the happening of
some future event, including the following transactions, to the
extent that they may create a liability:
(A) Direct credit substitutes in which a bank substitutes its own credit for a third party, including standby
letters of credit.
(B) Irrevocable letters of credit that guarantee repayment of commercial paper or tax-exempt securities.
(C) Risk participations in bankers’ acceptances.
(D) Sale and repurchase agreements.
(E) Asset sales with recourse against the seller.
(F) Interest rate swaps.
(G) Credit swaps.
(H) Commodities contracts.
(I) Forward contracts.
(J) Securities contracts.
(K) Such other activities or transactions as the Board
of Governors may, by rule, define.

SEC. 166. EARLY REMEDIATION REQUIREMENTS.

Regulations.

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12 USC 5366.

(a) IN GENERAL.—The Board of Governors, in consultation with
the Council and the Corporation, shall prescribe regulations establishing requirements to provide for the early remediation of financial
distress of a nonbank financial company supervised by the Board
of Governors or a bank holding company described in section 165(a),
except that nothing in this subsection authorizes the provision
of financial assistance from the Federal Government.
(b) PURPOSE OF THE EARLY REMEDIATION REQUIREMENTS.—
The purpose of the early remediation requirements under subsection
(a) shall be to establish a series of specific remedial actions to
be taken by a nonbank financial company supervised by the Board
of Governors or a bank holding company described in section 165(a)
that is experiencing increasing financial distress, in order to minimize the probability that the company will become insolvent and
the potential harm of such insolvency to the financial stability
of the United States.
(c) REMEDIATION REQUIREMENTS.—The regulations prescribed
by the Board of Governors under subsection (a) shall—
(1) define measures of the financial condition of the company, including regulatory capital, liquidity measures, and
other forward-looking indicators; and
(2) establish requirements that increase in stringency as
the financial condition of the company declines, including—
(A) requirements in the initial stages of financial
decline, including limits on capital distributions, acquisitions, and asset growth; and
(B) requirements at later stages of financial decline,
including a capital restoration plan and capital-raising
requirements, limits on transactions with affiliates,
management changes, and asset sales.

12 USC 5367.

SEC. 167. AFFILIATIONS.

(a) AFFILIATIONS.—Nothing in this subtitle shall be construed
to require a nonbank financial company supervised by the Board

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1433

of Governors, or a company that controls a nonbank financial company supervised by the Board of Governors, to conform the activities
thereof to the requirements of section 4 of the Bank Holding Company Act of 1956 (12 U.S.C. 1843).
(b) REQUIREMENT.—
(1) IN GENERAL.—
(A) BOARD AUTHORITY.—If a nonbank financial company supervised by the Board of Governors conducts activities other than those that are determined to be financial
in nature or incidental thereto under section 4(k) of the
Bank Holding Company Act of 1956, the Board of Governors may require such company to establish and conduct
all or a portion of such activities that are determined
to be financial in nature or incidental thereto in or through
an intermediate holding company established pursuant to
regulation of the Board of Governors, not later than 90
days (or such longer period as the Board of Governors
may deem appropriate) after the date on which the
nonbank financial company supervised by the Board of
Governors is notified of the determination of the Board
of Governors under this section.
(B) NECESSARY ACTIONS.—Notwithstanding subparagraph (A), the Board of Governors shall require a nonbank
financial company supervised by the Board of Governors
to establish an intermediate holding company if the Board
of Governors makes a determination that the establishment
of such intermediate holding company is necessary to—
(i) appropriately supervise activities that are determined to be financial in nature or incidental thereto;
or
(ii) to ensure that supervision by the Board of
Governors does not extend to the commercial activities
of such nonbank financial company.
(2) INTERNAL FINANCIAL ACTIVITIES.—For purposes of this
subsection, activities that are determined to be financial in
nature or incidental thereto under section 4(k) of the Bank
Holding Company Act of 1956, as described in paragraph (1),
shall not include internal financial activities, including internal
treasury, investment, and employee benefit functions. With
respect to any internal financial activity engaged in for the
company or an affiliate and a non-affiliate of such company
during the year prior to the date of enactment of this Act,
such company (or an affiliate that is not an intermediate
holding company or subsidiary of an intermediate holding company) may continue to engage in such activity, as long as
not less than 2/3 of the assets or 2/3 of the revenues generated
from the activity are from or attributable to such company
or an affiliate, subject to review by the Board of Governors,
to determine whether engaging in such activity presents undue
risk to such company or to the financial stability of the United
States.
(3) SOURCE OF STRENGTH.—A company that directly or
indirectly controls an intermediate holding company established
under this section shall serve as a source of strength to its
subsidiary intermediate holding company.
(4) PARENT COMPANY REPORTS.—The Board of Governors
may, from time to time, require reports under oath from a

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124 STAT. 1434

company that controls an intermediate holding company, and
from the appropriate officers or directors of such company,
solely for purposes of ensuring compliance with the provisions
of this section, including assessing the ability of the company
to serve as a source of strength to its subsidiary intermediate
holding company pursuant to paragraph (3) and enforcing such
compliance.
(5) LIMITED PARENT COMPANY ENFORCEMENT.—
(A) IN GENERAL.—In addition to any other authority
of the Board of Governors, the Board of Governors may
enforce compliance with the provisions of this subsection
that are applicable to any company described in paragraph
(1) that controls an intermediate holding company under
section 8 of the Federal Deposit Insurance Act, and such
company shall be subject to such section (solely for such
purposes) in the same manner and to the same extent
as if such company were a bank holding company.
(B) APPLICATION OF OTHER ACT.—Any violation of this
subsection by any company that controls an intermediate
holding company may also be treated as a violation of
the Federal Deposit Insurance Act for purposes of subparagraph (A).
(C) NO EFFECT ON OTHER AUTHORITY.—No provision
of this paragraph shall be construed as limiting any
authority of the Board of Governors or any other Federal
agency under any other provision of law.
(c) REGULATIONS.—The Board of Governors—
(1) shall promulgate regulations to establish the criteria
for determining whether to require a nonbank financial company supervised by the Board of Governors to establish an
intermediate holding company under subsection (b); and
(2) may promulgate regulations to establish any restrictions
or limitations on transactions between an intermediate holding
company or a nonbank financial company supervised by the
Board of Governors and its affiliates, as necessary to prevent
unsafe and unsound practices in connection with transactions
between such company, or any subsidiary thereof, and its
parent company or affiliates that are not subsidiaries of such
company, except that such regulations shall not restrict or
limit any transaction in connection with the bona fide acquisition or lease by an unaffiliated person of assets, goods, or
services.

Criteria.

12 USC 5368.

SEC. 168. REGULATIONS.

The Board of Governors shall have authority to issue regulations to implement subtitles A and C and the amendments made
thereunder. Except as otherwise specified in subtitle A or C, not
later than 18 months after the effective date of this Act, the Board
of Governors shall issue final regulations to implement subtitles
A and C, and the amendments made thereunder.

Deadline.

12 USC 5369.

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PUBLIC LAW 111–203—JULY 21, 2010

SEC. 169. AVOIDING DUPLICATION.

The Board of Governors shall take any action that the Board
of Governors deems appropriate to avoid imposing requirements
under this subtitle that are duplicative of requirements applicable
to bank holding companies and nonbank financial companies under
other provisions of law.

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124 STAT. 1435
12 USC 5370.

(a) REGULATIONS.—The Board of Governors shall promulgate
regulations on behalf of, and in consultation with, the Council
setting forth the criteria for exempting certain types or classes
of U.S. nonbank financial companies or foreign nonbank financial
companies from supervision by the Board of Governors.
(b) CONSIDERATIONS.—In developing the criteria under subsection (a), the Board of Governors shall take into account the
factors for consideration described in subsections (a) and (b) of
section 113 in determining whether a U.S. nonbank financial company or foreign nonbank financial company shall be supervised
by the Board of Governors.
(c) RULE OF CONSTRUCTION.—Nothing in this section shall be
construed to require supervision by the Board of Governors of
a U.S. nonbank financial company or foreign nonbank financial
company, if such company does not meet the criteria for exemption
established under subsection (a).
(d) REVISIONS.—
(1) IN GENERAL.—The Board of Governors shall, in consultation with the Council, review the regulations promulgated
under subsection (a), not less frequently than every 5 years,
and based upon the review, the Board of Governors may revise
such regulations on behalf of, and in consultation with, the
Council to update as necessary the criteria set forth in such
regulations.
(2) TRANSITION PERIOD.—No revisions under paragraph (1)
shall take effect before the end of the 2-year period after the
date of publication of such revisions in final form.
(e) REPORT.—The Chairman of the Board of Governors and
the Chairperson of the Council shall submit a joint report to the
Committee on Banking, Housing, and Urban Affairs of the Senate
and the Committee on Financial Services of the House of Representatives not later than 30 days after the date of the issuance in
final form of regulations under subsection (a), or any subsequent
revision to such regulations under subsection (d), as applicable.
Such report shall include, at a minimum, the rationale for exemption and empirical evidence to support the criteria for exemption.

Criteria.

SEC. 171. LEVERAGE AND RISK-BASED CAPITAL REQUIREMENTS.

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SEC. 170. SAFE HARBOR.

12 USC 5371.

Review.

(a) DEFINITIONS.—For purposes of this section, the following
definitions shall apply:
(1) GENERALLY APPLICABLE LEVERAGE CAPITAL REQUIREMENTS.—The term ‘‘generally applicable leverage capital
requirements’’ means—
(A) the minimum ratios of tier 1 capital to average
total assets, as established by the appropriate Federal
banking agencies to apply to insured depository institutions
under the prompt corrective action regulations implementing section 38 of the Federal Deposit Insurance Act,
regardless of total consolidated asset size or foreign financial exposure; and
(B) includes the regulatory capital components in the
numerator of that capital requirement, average total assets
in the denominator of that capital requirement, and the
required ratio of the numerator to the denominator.

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PUBLIC LAW 111–203—JULY 21, 2010

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(2) GENERALLY APPLICABLE RISK-BASED CAPITAL REQUIREMENTS.—The term ‘‘generally applicable risk-based capital
requirements’’ means—
(A) the risk-based capital requirements, as established
by the appropriate Federal banking agencies to apply to
insured depository institutions under the prompt corrective
action regulations implementing section 38 of the Federal
Deposit Insurance Act, regardless of total consolidated asset
size or foreign financial exposure; and
(B) includes the regulatory capital components in the
numerator of those capital requirements, the risk-weighted
assets in the denominator of those capital requirements,
and the required ratio of the numerator to the denominator.
(3) DEFINITION OF DEPOSITORY INSTITUTION HOLDING COMPANY.—The term ‘‘depository institution holding company’’
means a bank holding company or a savings and loan holding
company (as those terms are defined in section 3 of the Federal
Deposit Insurance Act) that is organized in the United States,
including any bank or savings and loan holding company that
is owned or controlled by a foreign organization, but does not
include the foreign organization.
(b) MINIMUM CAPITAL REQUIREMENTS.—
(1) MINIMUM LEVERAGE CAPITAL REQUIREMENTS.—The
appropriate Federal banking agencies shall establish minimum
leverage capital requirements on a consolidated basis for
insured depository institutions, depository institution holding
companies, and nonbank financial companies supervised by
the Board of Governors. The minimum leverage capital requirements established under this paragraph shall not be less than
the generally applicable leverage capital requirements, which
shall serve as a floor for any capital requirements that the
agency may require, nor quantitatively lower than the generally
applicable leverage capital requirements that were in effect
for insured depository institutions as of the date of enactment
of this Act.
(2) MINIMUM RISK-BASED CAPITAL REQUIREMENTS.—The
appropriate Federal banking agencies shall establish minimum
risk-based capital requirements on a consolidated basis for
insured depository institutions, depository institution holding
companies, and nonbank financial companies supervised by
the Board of Governors. The minimum risk-based capital
requirements established under this paragraph shall not be
less than the generally applicable risk-based capital requirements, which shall serve as a floor for any capital requirements
that the agency may require, nor quantitatively lower than
the generally applicable risk-based capital requirements that
were in effect for insured depository institutions as of the
date of enactment of this Act.
(3) INVESTMENTS IN FINANCIAL SUBSIDIARIES.—For purposes
of this section, investments in financial subsidiaries that
insured depository institutions are required to deduct from
regulatory capital under section 5136A of the Revised Statutes
of the United States or section 46(a)(2) of the Federal Deposit
Insurance Act need not be deducted from regulatory capital
by depository institution holding companies or nonbank financial companies supervised by the Board of Governors, unless
such capital deduction is required by the Board of Governors

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1437

or the primary financial regulatory agency in the case of
nonbank financial companies supervised by the Board of Governors.
(4) EFFECTIVE DATES AND PHASE-IN PERIODS.—
(A) DEBT OR EQUITY INSTRUMENTS ON OR AFTER MAY
19, 2010.—For debt or equity instruments issued on or after
May 19, 2010, by depository institution holding companies
or by nonbank financial companies supervised by the Board
of Governors, this section shall be deemed to have become
effective as of May 19, 2010.
(B) DEBT OR EQUITY INSTRUMENTS ISSUED BEFORE MAY
19, 2010.—For debt or equity instruments issued before May
19, 2010, by depository institution holding companies or
by nonbank financial companies supervised by the Board
of Governors, any regulatory capital deductions required
under this section shall be phased in incrementally over
a period of 3 years, with the phase-in period to begin
on January 1, 2013, except as set forth in subparagraph
(C).
(C) DEBT OR EQUITY INSTRUMENTS OF SMALLER INSTITUTIONS.—For debt or equity instruments issued before May
19, 2010, by depository institution holding companies with
total consolidated assets of less than $15,000,000,000 as
of December 31, 2009, and by organizations that were
mutual holding companies on May 19, 2010, the capital
deductions that would be required for other institutions
under this section are not required as a result of this
section.
(D) DEPOSITORY INSTITUTION HOLDING COMPANIES NOT
PREVIOUSLY SUPERVISED BY THE BOARD OF GOVERNORS.—
For any depository institution holding company that was
not supervised by the Board of Governors as of May 19,
2010, the requirements of this section, except as set forth
in subparagraphs (A) and (B), shall be effective 5 years
after the date of enactment of this Act
(E) CERTAIN BANK HOLDING COMPANY SUBSIDIARIES OF
FOREIGN BANKING ORGANIZATIONS.—For bank holding company subsidiaries of foreign banking organizations that
have relied on Supervision and Regulation Letter SR-011 issued by the Board of Governors (as in effect on May
19, 2010), the requirements of this section, except as set
forth in subparagraph (A), shall be effective 5 years after
the date of enactment of this Act.
(5) EXCEPTIONS.—This section shall not apply to—
(A) debt or equity instruments issued to the United
States or any agency or instrumentality thereof pursuant
to the Emergency Economic Stabilization Act of 2008, and
prior to October 4, 2010;
(B) any Federal home loan bank; or
(C) any small bank holding company that is subject
to the Small Bank Holding Company Policy Statement
of the Board of Governors, as in effect on May 19, 2010.
(6) STUDY AND REPORT ON SMALL INSTITUTION ACCESS TO
CAPITAL.—
(A) STUDY REQUIRED.—The Comptroller General of the
United States, after consultation with the Federal banking

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124 STAT. 1438

PUBLIC LAW 111–203—JULY 21, 2010
agencies, shall conduct a study of access to capital by
smaller insured depository institutions.
(B) SCOPE.—For purposes of this study required by
subparagraph (A), the term ‘‘smaller insured depository
institution’’ means an insured depository institution with
total consolidated assets of $5,000,000,000 or less.
(C) REPORT TO CONGRESS.—Not later than 18 months
after the date of enactment of this Act, the Comptroller
General of the United States shall submit to the Committee
on Banking, Housing, and Urban Affairs of the Senate
and the Committee on Financial Services of the House
of Representatives a report summarizing the results of
the study conducted under subparagraph (A), together with
any recommendations for legislative or regulatory action
that would enhance the access to capital of smaller insured
depository institutions, in a manner that is consistent with
safe and sound banking operations.
(7) CAPITAL REQUIREMENTS TO ADDRESS ACTIVITIES THAT
POSE RISKS TO THE FINANCIAL SYSTEM.—
(A) IN GENERAL.—Subject to the recommendations of
the Council, in accordance with section 120, the Federal
banking agencies shall develop capital requirements
applicable to insured depository institutions, depository
institution holding companies, and nonbank financial
companies supervised by the Board of Governors that
address the risks that the activities of such institutions
pose, not only to the institution engaging in the activity,
but to other public and private stakeholders in the event
of adverse performance, disruption, or failure of the institution or the activity.
(B) CONTENT.—Such rules shall address, at a minimum, the risks arising from—
(i) significant volumes of activity in derivatives,
securitized products purchased and sold, financial
guarantees purchased and sold, securities borrowing
and lending, and repurchase agreements and reverse
repurchase agreements;
(ii) concentrations in assets for which the values
presented in financial reports are based on models
rather than historical cost or prices deriving from deep
and liquid 2-way markets; and
(iii) concentrations in market share for any activity
that would substantially disrupt financial markets if
the institution is forced to unexpectedly cease the
activity.

Definition.

SEC. 172. EXAMINATION AND ENFORCEMENT ACTIONS FOR INSURANCE AND ORDERLY LIQUIDATION PURPOSES.

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(a) EXAMINATIONS FOR INSURANCE AND
POSES.—Section 10(b)(3) of the Federal Deposit

RESOLUTION PURInsurance Act (12

U.S.C. 1820(b)(3)) is amended—
(1) by striking ‘‘In addition’’ and inserting the following:
‘‘(A) IN GENERAL.—In addition’’; and
(2) by striking ‘‘whenever the board of directors determines’’
and all that follows through the period and inserting the following: ‘‘or nonbank financial company supervised by the Board
of Governors or a bank holding company described in section

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1439

165(a) of the Financial Stability Act of 2010, whenever the
Board of Directors determines that a special examination of
any such depository institution is necessary to determine the
condition of such depository institution for insurance purposes,
or of such nonbank financial company supervised by the Board
of Governors or bank holding company described in section
165(a) of the Financial Stability Act of 2010, for the purpose
of implementing its authority to provide for orderly liquidation
of any such company under title II of that Act, provided that
such authority may not be used with respect to any such
company that is in a generally sound condition.
‘‘(B) LIMITATION.—Before conducting a special examination of a nonbank financial company supervised by the
Board of Governors or a bank holding company described
in section 165(a) of the Financial Stability Act of 2010,
the Corporation shall review any available and acceptable
resolution plan that the company has submitted in accordance with section 165(d) of that Act, consistent with the
nonbinding effect of such plan, and available reports of
examination, and shall coordinate to the maximum extent
practicable with the Board of Governors, in order to minimize duplicative or conflicting examinations.’’.
(b) ENFORCEMENT AUTHORITY.—Section 8(t) of the Federal
Deposit Insurance Act (12 U.S.C. 1818(t)) is amended—
(1) in paragraph (1), by inserting ‘‘, any depository institution holding company,’’ before ‘‘or any institution-affiliated
party’’;
(2) in paragraph (2)—
(A) by striking ‘‘or’’ at the end of subparagraph (B);
(B) at the end of subparagraph (C), by striking the
period and inserting ‘‘or’’; and
(C) by inserting at the end the following new subparagraph:
‘‘(D) the conduct or threatened conduct (including any
acts or omissions) of the depository institution holding company poses a risk to the Deposit Insurance Fund, provided
that such authority may not be used with respect to a
depository institution holding company that is in generally
sound condition and whose conduct does not pose a foreseeable and material risk of loss to the Deposit Insurance
Fund;’’; and
(3) by adding at the end the following:
‘‘(6) POWERS AND DUTIES WITH RESPECT TO DEPOSITORY
INSTITUTION HOLDING COMPANIES.—For purposes of exercising
the backup authority provided in this subsection—
‘‘(A) the Corporation shall have the same powers with
respect to a depository institution holding company and
its affiliates as the appropriate Federal banking agency
has with respect to the holding company and its affiliates;
and
‘‘(B) the holding company and its affiliates shall have
the same duties and obligations with respect to the Corporation as the holding company and its affiliates have
with respect to the appropriate Federal banking agency.’’.
(c) RULE OF CONSTRUCTION.—Nothing in this Act shall be construed to limit or curtail the Corporation’s current authority to

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Review.

12 USC 5372.

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examine or bring enforcement actions with respect to any insured
depository institution or institution-affiliated party.

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SEC. 173. ACCESS TO UNITED STATES FINANCIAL MARKET BY FOREIGN
INSTITUTIONS.

(a) ESTABLISHMENT OF FOREIGN BANK OFFICES IN THE UNITED
STATES.—Section 7(d)(3) of the International Banking Act of 1978
(12 U.S.C. 3105(d)(3)) is amended—
(1) in subparagraph (C), by striking ‘‘and’’ at the end;
(2) in subparagraph (D), by striking the period at the
end of and inserting ‘‘; and’’; and
(3) by adding at the end the following new subparagraph:
‘‘(E) for a foreign bank that presents a risk to the
stability of United States financial system, whether the
home country of the foreign bank has adopted, or is making
demonstrable progress toward adopting, an appropriate
system of financial regulation for the financial system of
such home country to mitigate such risk.’’.
(b) TERMINATION OF FOREIGN BANK OFFICES IN THE UNITED
STATES.—Section 7(e)(1) of the International Banking Act of 1978
(12 U.S.C. 3105(e)(1)) is amended—
(1) in subparagraph (A), by striking ‘‘or’’ at the end;
(2) in subparagraph (B), by striking the period at the
end of and inserting ‘‘; or’’; and
(3) by inserting after subparagraph (B), the following new
subparagraph:
‘‘(C) for a foreign bank that presents a risk to the
stability of the United States financial system, the home
country of the foreign bank has not adopted, or made
demonstrable progress toward adopting, an appropriate
system of financial regulation to mitigate such risk.’’.
(c) REGISTRATION OR SUCCESSION TO A UNITED STATES BROKER
OR DEALER AND TERMINATION OF SUCH REGISTRATION.—Section
15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o) is
amended by adding at the end the following new subsections:
‘‘(k) REGISTRATION OR SUCCESSION TO A UNITED STATES BROKER
OR DEALER.—In determining whether to permit a foreign person
or an affiliate of a foreign person to register as a United States
broker or dealer, or succeed to the registration of a United States
broker or dealer, the Commission may consider whether, for a
foreign person, or an affiliate of a foreign person that presents
a risk to the stability of the United States financial system, the
home country of the foreign person has adopted, or made demonstrable progress toward adopting, an appropriate system of financial
regulation to mitigate such risk.
‘‘(l) TERMINATION OF A UNITED STATES BROKER OR DEALER.—
For a foreign person or an affiliate of a foreign person that presents
such a risk to the stability of the United States financial system,
the Commission may determine to terminate the registration of
such foreign person or an affiliate of such foreign person as a
broker or dealer in the United States, if the Commission determines
that the home country of the foreign person has not adopted,
or made demonstrable progress toward adopting, an appropriate
system of financial regulation to mitigate such risk.’’.

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SEC. 174. STUDIES AND REPORTS ON HOLDING COMPANY CAPITAL
REQUIREMENTS.

(a) STUDY OF HYBRID CAPITAL INSTRUMENTS.—The Comptroller
General of the United States, in consultation with the Board of
Governors, the Comptroller of the Currency, and the Corporation,
shall conduct a study of the use of hybrid capital instruments
as a component of Tier 1 capital for banking institutions and
bank holding companies. The study shall consider—
(1) the current use of hybrid capital instruments, such
as trust preferred shares, as a component of Tier 1 capital;
(2) the differences between the components of capital permitted for insured depository institutions and those permitted
for companies that control insured depository institutions;
(3) the benefits and risks of allowing such instruments
to be used to comply with Tier 1 capital requirements;
(4) the economic impact of prohibiting the use of such
capital instruments for Tier 1;
(5) a review of the consequences of disqualifying trust
preferred instruments, and whether it could lead to the failure
or undercapitalization of existing banking organizations;
(6) the international competitive implications prohibiting
hybrid capital instruments for Tier 1;
(7) the impact on the cost and availability of credit in
the United States from such a prohibition;
(8) the availability of capital for financial institutions with
less than $10,000,000,000 in total assets; and
(9) any other relevant factors relating to the safety and
soundness of our financial system and potential economic
impact of such a prohibition.
(b) STUDY OF FOREIGN BANK INTERMEDIATE HOLDING COMPANY
CAPITAL REQUIREMENTS.—The Comptroller General of the United
States, in consultation with the Secretary, the Board of Governors,
the Comptroller of the Currency, and the Corporation, shall conduct
a study of capital requirements applicable to United States intermediate holding companies of foreign banks that are bank holding
companies or savings and loan holding companies. The study shall
consider—
(1) current Board of Governors policy regarding the treatment of intermediate holding companies;
(2) the principle of national treatment and equality of
competitive opportunity for foreign banks operating in the
United States;
(3) the extent to which foreign banks are subject on a
consolidated basis to home country capital standards comparable to United States capital standards;
(4) potential effects on United States banking organizations
operating abroad of changes to United States policy regarding
intermediate holding companies;
(5) the impact on the cost and availability of credit in
the United States from a change in United States policy
regarding intermediate holding companies; and
(6) any other relevant factors relating to the safety and
soundness of our financial system and potential economic
impact of such a prohibition.
(c) REPORT.—Not later than 18 months after the date of enactment of this Act, the Comptroller General of the United States
shall submit reports to the Committee on Banking, Housing, and

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Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives summarizing the results of
the studies required under subsection (a). The reports shall include
specific recommendations for legislative or regulatory action
regarding the treatment of hybrid capital instruments, including
trust preferred shares, and shall explain the basis for such recommendations.
Consultation.
12 USC 5373.

12 USC 5374.

SEC. 175. INTERNATIONAL POLICY COORDINATION.

(a) BY THE PRESIDENT.—The President, or a designee of the
President, may coordinate through all available international policy
channels, similar policies as those found in United States law
relating to limiting the scope, nature, size, scale, concentration,
and interconnectedness of financial companies, in order to protect
financial stability and the global economy.
(b) BY THE COUNCIL.—The Chairperson of the Council, in consultation with the other members of the Council, shall regularly
consult with the financial regulatory entities and other appropriate
organizations of foreign governments or international organizations
on matters relating to systemic risk to the international financial
system.
(c) BY THE BOARD OF GOVERNORS AND THE SECRETARY.—The
Board of Governors and the Secretary shall consult with their
foreign counterparts and through appropriate multilateral organizations to encourage comprehensive and robust prudential supervision
and regulation for all highly leveraged and interconnected financial
companies.
SEC. 176. RULE OF CONSTRUCTION.

No regulation or standard imposed under this title may be
construed in a manner that would lessen the stringency of the
requirements of any applicable primary financial regulatory agency
or any other Federal or State agency that are otherwise applicable.
This title, and the rules and regulations or orders prescribed pursuant to this title, do not divest any such agency of any authority
derived from any other applicable law.

TITLE II—ORDERLY LIQUIDATION
AUTHORITY

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12 USC 5381.

SEC. 201. DEFINITIONS.

(a) IN GENERAL.—In this title, the following definitions shall
apply:
(1) ADMINISTRATIVE EXPENSES OF THE RECEIVER.—The term
‘‘administrative expenses of the receiver’’ includes—
(A) the actual, necessary costs and expenses incurred
by the Corporation as receiver for a covered financial company in liquidating a covered financial company; and
(B) any obligations that the Corporation as receiver
for a covered financial company determines are necessary
and appropriate to facilitate the smooth and orderly liquidation of the covered financial company.
(2) BANKRUPTCY CODE.—The term ‘‘Bankruptcy Code’’
means title 11, United States Code.
(3) BRIDGE FINANCIAL COMPANY.—The term ‘‘bridge financial company’’ means a new financial company organized by

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124 STAT. 1443

the Corporation in accordance with section 210(h) for the purpose of resolving a covered financial company.
(4) CLAIM.—The term ‘‘claim’’ means any right to payment,
whether or not such right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured.
(5) COMPANY.—The term ‘‘company’’ has the same meaning
as in section 2(b) of the Bank Holding Company Act of 1956
(12 U.S.C. 1841(b)), except that such term includes any company described in paragraph (11), the majority of the securities
of which are owned by the United States or any State.
(6) COURT.—The term ‘‘Court’’ means the United States
District Court for the District of Columbia, unless the context
otherwise requires.
(7) COVERED BROKER OR DEALER.—The term ‘‘covered
broker or dealer’’ means a covered financial company that is
a broker or dealer that—
(A) is registered with the Commission under section
15(b) of the Securities Exchange Act of 1934 (15 U.S.C.
78o(b)); and
(B) is a member of SIPC.
(8) COVERED FINANCIAL COMPANY.—The term ‘‘covered
financial company’’—
(A) means a financial company for which a determination has been made under section 203(b); and
(B) does not include an insured depository institution.
(9) COVERED SUBSIDIARY.—The term ‘‘covered subsidiary’’
means a subsidiary of a covered financial company, other
than—
(A) an insured depository institution;
(B) an insurance company; or
(C) a covered broker or dealer.
(10) DEFINITIONS RELATING TO COVERED BROKERS AND
DEALERS.—The terms ‘‘customer’’, ‘‘customer name securities’’,
‘‘customer property’’, and ‘‘net equity’’ in the context of a covered
broker or dealer, have the same meanings as in section 16
of the Securities Investor Protection Act of 1970 (15 U.S.C.
78lll).
(11) FINANCIAL COMPANY.—The term ‘‘financial company’’
means any company that—
(A) is incorporated or organized under any provision
of Federal law or the laws of any State;
(B) is—
(i) a bank holding company, as defined in section
2(a) of the Bank Holding Company Act of 1956 (12
U.S.C. 1841(a));
(ii) a nonbank financial company supervised by
the Board of Governors;
(iii) any company that is predominantly engaged
in activities that the Board of Governors has determined are financial in nature or incidental thereto
for purposes of section 4(k) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(k)) other than a
company described in clause (i) or (ii); or
(iv) any subsidiary of any company described in
any of clauses (i) through (iii) that is predominantly
engaged in activities that the Board of Governors has

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124 STAT. 1444

determined are financial in nature or incidental thereto
for purposes of section 4(k) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(k)) (other than a
subsidiary that is an insured depository institution
or an insurance company); and
(C) is not a Farm Credit System institution chartered
under and subject to the provisions of the Farm Credit
Act of 1971, as amended (12 U.S.C. 2001 et seq.), a governmental entity, or a regulated entity, as defined under section 1303(20) of the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (12 U.S.C. 4502(20)).
(12) FUND.—The term ‘‘Fund’’ means the Orderly Liquidation Fund established under section 210(n).
(13) INSURANCE COMPANY.—The term ‘‘insurance company’’
means any entity that is—
(A) engaged in the business of insurance;
(B) subject to regulation by a State insurance regulator;
and
(C) covered by a State law that is designed to specifically deal with the rehabilitation, liquidation, or insolvency
of an insurance company.
(14) NONBANK FINANCIAL COMPANY.—The term ‘‘nonbank
financial company’’ has the same meaning as in section
102(a)(4)(C).
(15) NONBANK FINANCIAL COMPANY SUPERVISED BY THE
BOARD OF GOVERNORS.—The term ‘‘nonbank financial company
supervised by the Board of Governors’’ has the same meaning
as in section 102(a)(4)(D).
(16) SIPC.—The term ‘‘SIPC’’ means the Securities Investor
Protection Corporation.
(b) DEFINITIONAL CRITERIA.—For purpose of the definition of
the term ‘‘financial company’’ under subsection (a)(11), no company
shall be deemed to be predominantly engaged in activities that
the Board of Governors has determined are financial in nature
or incidental thereto for purposes of section 4(k) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1843(k)), if the consolidated revenues of such company from such activities constitute less than
85 percent of the total consolidated revenues of such company,
as the Corporation, in consultation with the Secretary, shall establish by regulation. In determining whether a company is a financial
company under this title, the consolidated revenues derived from
the ownership or control of a depository institution shall be
included.

Regulations.

12 USC 5382.

SEC. 202. JUDICIAL REVIEW.

Notification.

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(a) COMMENCEMENT OF ORDERLY LIQUIDATION.—
(1) PETITION TO DISTRICT COURT.—
(A) DISTRICT COURT REVIEW.—
(i) PETITION TO DISTRICT COURT.—Subsequent to
a determination by the Secretary under section 203
that a financial company satisfies the criteria in section
203(b), the Secretary shall notify the Corporation and
the covered financial company. If the board of directors
(or body performing similar functions) of the covered
financial company acquiesces or consents to the
appointment of the Corporation as receiver, the Secretary shall appoint the Corporation as receiver. If

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124 STAT. 1445

the board of directors (or body performing similar functions) of the covered financial company does not
acquiesce or consent to the appointment of the Corporation as receiver, the Secretary shall petition the United
States District Court for the District of Columbia for
an order authorizing the Secretary to appoint the Corporation as receiver.
(ii) FORM AND CONTENT OF ORDER.—The Secretary
shall present all relevant findings and the recommendation made pursuant to section 203(a) to the
Court. The petition shall be filed under seal.
(iii) DETERMINATION.—On a strictly confidential
basis, and without any prior public disclosure, the
Court, after notice to the covered financial company
and a hearing in which the covered financial company
may oppose the petition, shall determine whether the
determination of the Secretary that the covered financial company is in default or in danger of default
and satisfies the definition of a financial company
under section 201(a)(11) is arbitrary and capricious.
(iv) ISSUANCE OF ORDER.—If the Court determines
that the determination of the Secretary that the covered financial company is in default or in danger of
default and satisfies the definition of a financial company under section 201(a)(11)—
(I) is not arbitrary and capricious, the Court
shall issue an order immediately authorizing the
Secretary to appoint the Corporation as receiver
of the covered financial company; or
(II) is arbitrary and capricious, the Court shall
immediately provide to the Secretary a written
statement of each reason supporting its determination, and afford the Secretary an immediate opportunity to amend and refile the petition under
clause (i).
(v) PETITION GRANTED BY OPERATION OF LAW.—
If the Court does not make a determination within
24 hours of receipt of the petition—
(I) the petition shall be granted by operation
of law;
(II) the Secretary shall appoint the Corporation as receiver; and
(III) liquidation under this title shall automatically and without further notice or action be
commenced and the Corporation may immediately
take all actions authorized under this title.
(B) EFFECT OF DETERMINATION.—The determination of
the Court under subparagraph (A) shall be final, and shall
be subject to appeal only in accordance with paragraph
(2). The decision shall not be subject to any stay or injunction pending appeal. Upon conclusion of its proceedings
under subparagraph (A), the Court shall provide immediately for the record a written statement of each reason
supporting the decision of the Court, and shall provide
copies thereof to the Secretary and the covered financial
company.

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Deadline.

Deadline.

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(C) CRIMINAL PENALTIES.—A person who recklessly discloses a determination of the Secretary under section 203(b)
or a petition of the Secretary under subparagraph (A),
or the pendency of court proceedings as provided for under
subparagraph (A), shall be fined not more than 250,000,
or imprisoned for not more than 5 years, or both.
(2) APPEAL OF DECISIONS OF THE DISTRICT COURT.—
(A) APPEAL TO COURT OF APPEALS.—
(i) IN GENERAL.—Subject to clause (ii), the United
States Court of Appeals for the District of Columbia
Circuit shall have jurisdiction of an appeal of a final
decision of the Court filed by the Secretary or a covered
financial company, through its board of directors, notwithstanding section 210(a)(1)(A)(i), not later than 30
days after the date on which the decision of the Court
is rendered or deemed rendered under this subsection.
(ii) CONDITION OF JURISDICTION.—The Court of
Appeals shall have jurisdiction of an appeal by a covered financial company only if the covered financial
company did not acquiesce or consent to the appointment of a receiver by the Secretary under paragraph
(1)(A).
(iii) EXPEDITION.—The Court of Appeals shall consider any appeal under this subparagraph on an expedited basis.
(iv) SCOPE OF REVIEW.—For an appeal taken under
this subparagraph, review shall be limited to whether
the determination of the Secretary that a covered
financial company is in default or in danger of default
and satisfies the definition of a financial company
under section 201(a)(11) is arbitrary and capricious.
(B) APPEAL TO THE SUPREME COURT.—
(i) IN GENERAL.—A petition for a writ of certiorari
to review a decision of the Court of Appeals under
subparagraph (A) may be filed by the Secretary or
the covered financial company, through its board of
directors, notwithstanding section 210(a)(1)(A)(i), with
the Supreme Court of the United States, not later
than 30 days after the date of the final decision of
the Court of Appeals, and the Supreme Court shall
have discretionary jurisdiction to review such decision.
(ii) WRITTEN STATEMENT.—In the event of a petition under clause (i), the Court of Appeals shall immediately provide for the record a written statement of
each reason for its decision.
(iii) EXPEDITION.—The Supreme Court shall consider any petition under this subparagraph on an expedited basis.
(iv) SCOPE OF REVIEW.—Review by the Supreme
Court under this subparagraph shall be limited to
whether the determination of the Secretary that the
covered financial company is in default or in danger
of default and satisfies the definition of a financial
company under section 201(a)(11) is arbitrary and
capricious.
(b) ESTABLISHMENT AND TRANSMITTAL OF RULES AND PROCEDURES.—

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124 STAT. 1447

(1) IN GENERAL.—Not later than 6 months after the date
of enactment of this Act, the Court shall establish such rules
and procedures as may be necessary to ensure the orderly
conduct of proceedings, including rules and procedures to
ensure that the 24-hour deadline is met and that the Secretary
shall have an ongoing opportunity to amend and refile petitions
under subsection (a)(1).
(2) PUBLICATION OF RULES.—The rules and procedures
established under paragraph (1), and any modifications of such
rules and procedures, shall be recorded and shall be transmitted
to—
(A) the Committee on the Judiciary of the Senate;
(B) the Committee on Banking, Housing, and Urban
Affairs of the Senate;
(C) the Committee on the Judiciary of the House of
Representatives; and
(D) the Committee on Financial Services of the House
of Representatives.
(c) PROVISIONS APPLICABLE TO FINANCIAL COMPANIES.—
(1) BANKRUPTCY CODE.—Except as provided in this subsection, the provisions of the Bankruptcy Code and rules issued
thereunder or otherwise applicable insolvency law, and not
the provisions of this title, shall apply to financial companies
that are not covered financial companies for which the Corporation has been appointed as receiver.
(2) THIS TITLE.—The provisions of this title shall exclusively
apply to and govern all matters relating to covered financial
companies for which the Corporation is appointed as receiver,
and no provisions of the Bankruptcy Code or the rules issued
thereunder shall apply in such cases, except as expressly provided in this title.
(d) TIME LIMIT ON RECEIVERSHIP AUTHORITY.—
(1) BASELINE PERIOD.—Any appointment of the Corporation
as receiver under this section shall terminate at the end of
the 3-year period beginning on the date on which such appointment is made.
(2) EXTENSION OF TIME LIMIT.—The time limit established
in paragraph (1) may be extended by the Corporation for up
to 1 additional year, if the Chairperson of the Corporation
determines and certifies in writing to the Committee on
Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of Representatives that continuation of the receivership is necessary—
(A) to—
(i) maximize the net present value return from
the sale or other disposition of the assets of the covered
financial company; or
(ii) minimize the amount of loss realized upon
the sale or other disposition of the assets of the covered
financial company; and
(B) to protect the stability of the financial system of
the United States.
(3) SECOND EXTENSION OF TIME LIMIT.—
(A) IN GENERAL.—The time limit under this subsection,
as extended under paragraph (2), may be extended for

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124 STAT. 1448

Deadline.
Termination
date.

Reports.
Deadline.

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PUBLIC LAW 111–203—JULY 21, 2010

up to 1 additional year, if the Chairperson of the Corporation, with the concurrence of the Secretary, submits the
certifications described in paragraph (2).
(B) ADDITIONAL REPORT REQUIRED.—Not later than 30
days after the date of commencement of the extension
under subparagraph (A), the Corporation shall submit a
report to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services of the House of Representatives describing the need
for the extension and the specific plan of the Corporation
to conclude the receivership before the end of the second
extension.
(4) ONGOING LITIGATION.—The time limit under this subsection, as extended under paragraph (3), may be further
extended solely for the purpose of completing ongoing litigation
in which the Corporation as receiver is a party, provided that
the appointment of the Corporation as receiver shall terminate
not later than 90 days after the date of completion of such
litigation, if—
(A) the Council determines that the Corporation used
its best efforts to conclude the receivership in accordance
with its plan before the end of the time limit described
in paragraph (3);
(B) the Council determines that the completion of
longer-term responsibilities in the form of ongoing litigation
justifies the need for an extension; and
(C) the Corporation submits a report approved by the
Council not later than 30 days after the date of the determinations by the Council under subparagraphs (A) and
(B) to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services of the House of Representatives, describing—
(i) the ongoing litigation justifying the need for
an extension; and
(ii) the specific plan of the Corporation to complete
the litigation and conclude the receivership.
(5) REGULATIONS.—The Corporation may issue regulations
governing the termination of receiverships under this title.
(6) NO LIABILITY.—The Corporation and the Deposit Insurance Fund shall not be liable for unresolved claims arising
from the receivership after the termination of the receivership.
(e) STUDY OF BANKRUPTCY AND ORDERLY LIQUIDATION PROCESS
FOR FINANCIAL COMPANIES.—
(1) STUDY.—
(A) IN GENERAL.—The Administrative Office of the
United States Courts and the Comptroller General of the
United States shall each monitor the activities of the Court,
and each such Office shall conduct separate studies
regarding the bankruptcy and orderly liquidation process
for financial companies under the Bankruptcy Code.
(B) ISSUES TO BE STUDIED.—In conducting the study
under subparagraph (A), the Administrative Office of the
United States Courts and the Comptroller General of the
United States each shall evaluate—
(i) the effectiveness of chapter 7 or chapter 11
of the Bankruptcy Code in facilitating the orderly liquidation or reorganization of financial companies;

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124 STAT. 1449

(ii) ways to maximize the efficiency and effectiveness of the Court; and
(iii) ways to make the orderly liquidation process
under the Bankruptcy Code for financial companies
more effective.
(2) REPORTS.—Not later than 1 year after the date of enactment of this Act, in each successive year until the third year,
and every fifth year after that date of enactment, the Administrative Office of the United States Courts and the Comptroller
General of the United States shall submit to the Committee
on Banking, Housing, and Urban Affairs and the Committee
on the Judiciary of the Senate and the Committee on Financial
Services and the Committee on the Judiciary of the House
of Representatives separate reports summarizing the results
of the studies conducted under paragraph (1).
(f) STUDY OF INTERNATIONAL COORDINATION RELATING TO BANKRUPTCY PROCESS FOR FINANCIAL COMPANIES.—
(1) STUDY.—
(A) IN GENERAL.—The Comptroller General of the
United States shall conduct a study regarding international
coordination relating to the orderly liquidation of financial
companies under the Bankruptcy Code.
(B) ISSUES TO BE STUDIED.—In conducting the study
under subparagraph (A), the Comptroller General of the
United States shall evaluate, with respect to the bankruptcy process for financial companies—
(i) the extent to which international coordination
currently exists;
(ii) current mechanisms and structures for facilitating international cooperation;
(iii) barriers to effective international coordination;
and
(iv) ways to increase and make more effective
international coordination.
(2) REPORT.—Not later than 1 year after the date of enactment of this Act, the Comptroller General of the United States
shall submit to the Committee on Banking, Housing, and Urban
Affairs and the Committee on the Judiciary of the Senate
and the Committee on Financial Services and the Committee
on the Judiciary of the House of Representatives and the Secretary a report summarizing the results of the study conducted
under paragraph (1).
(g) STUDY OF PROMPT CORRECTIVE ACTION IMPLEMENTATION
BY THE APPROPRIATE FEDERAL AGENCIES.—
(1) STUDY.—The Comptroller General of the United States
shall conduct a study regarding the implementation of prompt
corrective action by the appropriate Federal banking agencies.
(2) ISSUES TO BE STUDIED.—In conducting the study under
paragraph (1), the Comptroller General shall evaluate—
(A) the effectiveness of implementation of prompt
corrective action by the appropriate Federal banking agencies and the resolution of insured depository institutions
by the Corporation; and
(B) ways to make prompt corrective action a more
effective tool to resolve the insured depository institutions
at the least possible long-term cost to the Deposit Insurance
Fund.

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PUBLIC LAW 111–203—JULY 21, 2010
(3) REPORT TO COUNCIL.—Not later than 1 year after the
date of enactment of this Act, the Comptroller General shall
submit a report to the Council on the results of the study
conducted under this subsection.
(4) COUNCIL REPORT OF ACTION.—Not later than 6 months
after the date of receipt of the report from the Comptroller
General under paragraph (3), the Council shall submit a report
to the Committee on Banking, Housing, and Urban Affairs
of the Senate and the Committee on Financial Services of
the House of Representatives on actions taken in response
to the report, including any recommendations made to the
Federal primary financial regulatory agencies under section
120.

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12 USC 5383.

SEC. 203. SYSTEMIC RISK DETERMINATION.

(a) WRITTEN RECOMMENDATION AND DETERMINATION.—
(1) VOTE REQUIRED.—
(A) IN GENERAL.—On their own initiative, or at the
request of the Secretary, the Corporation and the Board
of Governors shall consider whether to make a written
recommendation described in paragraph (2) with respect
to whether the Secretary should appoint the Corporation
as receiver for a financial company. Such recommendation
shall be made upon a vote of not fewer than 2⁄3 of the
members of the Board of Governors then serving and 2⁄3
of the members of the board of directors of the Corporation
then serving.
(B) CASES INVOLVING BROKERS OR DEALERS.—In the
case of a broker or dealer, or in which the largest United
States subsidiary (as measured by total assets as of the
end of the previous calendar quarter) of a financial company is a broker or dealer, the Commission and the Board
of Governors, at the request of the Secretary, or on their
own initiative, shall consider whether to make the written
recommendation described in paragraph (2) with respect
to the financial company. Subject to the requirements in
paragraph (2), such recommendation shall be made upon
a vote of not fewer than 2⁄3 of the members of the Board
of Governors then serving and 2⁄3 of the members of the
Commission then serving, and in consultation with the
Corporation.
(C) CASES INVOLVING INSURANCE COMPANIES.—In the
case of an insurance company, or in which the largest
United States subsidiary (as measured by total assets as
of the end of the previous calendar quarter) of a financial
company is an insurance company, the Director of the
Federal Insurance Office and the Board of Governors, at
the request of the Secretary or on their own initiative,
shall consider whether to make the written recommendation described in paragraph (2) with respect to the financial
company. Subject to the requirements in paragraph (2),
such recommendation shall be made upon a vote of not
fewer than 2⁄3 of the Board of Governors then serving
and the affirmative approval of the Director of the Federal
Insurance Office, and in consultation with the Corporation.
(2) RECOMMENDATION REQUIRED.—Any written recommendation pursuant to paragraph (1) shall contain—

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(A) an evaluation of whether the financial company
is in default or in danger of default;
(B) a description of the effect that the default of the
financial company would have on financial stability in the
United States;
(C) a description of the effect that the default of the
financial company would have on economic conditions or
financial stability for low income, minority, or underserved
communities;
(D) a recommendation regarding the nature and the
extent of actions to be taken under this title regarding
the financial company;
(E) an evaluation of the likelihood of a private sector
alternative to prevent the default of the financial company;
(F) an evaluation of why a case under the Bankruptcy
Code is not appropriate for the financial company;
(G) an evaluation of the effects on creditors, counterparties, and shareholders of the financial company and
other market participants; and
(H) an evaluation of whether the company satisfies
the definition of a financial company under section 201.
(b) DETERMINATION BY THE SECRETARY.—Notwithstanding any
other provision of Federal or State law, the Secretary shall take
action in accordance with section 202(a)(1)(A), if, upon the written
recommendation under subsection (a), the Secretary (in consultation
with the President) determines that—
(1) the financial company is in default or in danger of
default;
(2) the failure of the financial company and its resolution
under otherwise applicable Federal or State law would have
serious adverse effects on financial stability in the United
States;
(3) no viable private sector alternative is available to prevent the default of the financial company;
(4) any effect on the claims or interests of creditors, counterparties, and shareholders of the financial company and other
market participants as a result of actions to be taken under
this title is appropriate, given the impact that any action taken
under this title would have on financial stability in the United
States;
(5) any action under section 204 would avoid or mitigate
such adverse effects, taking into consideration the effectiveness
of the action in mitigating potential adverse effects on the
financial system, the cost to the general fund of the Treasury,
and the potential to increase excessive risk taking on the part
of creditors, counterparties, and shareholders in the financial
company;
(6) a Federal regulatory agency has ordered the financial
company to convert all of its convertible debt instruments that
are subject to the regulatory order; and
(7) the company satisfies the definition of a financial company under section 201.
(c) DOCUMENTATION AND REVIEW.—
(1) IN GENERAL.—The Secretary shall—
(A) document any determination under subsection (b);
(B) retain the documentation for review under paragraph (2); and

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124 STAT. 1452

(C) notify the covered financial company and the Corporation of such determination.
(2) REPORT TO CONGRESS.—Not later than 24 hours after
the date of appointment of the Corporation as receiver for
a covered financial company, the Secretary shall provide written
notice of the recommendations and determinations reached in
accordance with subsections (a) and (b) to the Majority Leader
and the Minority Leader of the Senate and the Speaker and
the Minority Leader of the House of Representatives, the Committee on Banking, Housing, and Urban Affairs of the Senate,
and the Committee on Financial Services of the House of Representatives, which shall consist of a summary of the basis
for the determination, including, to the extent available at
the time of the determination—
(A) the size and financial condition of the covered
financial company;
(B) the sources of capital and credit support that were
available to the covered financial company;
(C) the operations of the covered financial company
that could have had a significant impact on financial stability, markets, or both;
(D) identification of the banks and financial companies
which may be able to provide the services offered by the
covered financial company;
(E) any potential international ramifications of resolution of the covered financial company under other
applicable insolvency law;
(F) an estimate of the potential effect of the resolution
of the covered financial company under other applicable
insolvency law on the financial stability of the United
States;
(G) the potential effect of the appointment of a receiver
by the Secretary on consumers;
(H) the potential effect of the appointment of a receiver
by the Secretary on the financial system, financial markets,
and banks and other financial companies; and
(I) whether resolution of the covered financial company
under other applicable insolvency law would cause banks
or other financial companies to experience severe liquidity
distress.
(3) REPORTS TO CONGRESS AND THE PUBLIC.—
(A) IN GENERAL.—Not later than 60 days after the
date of appointment of the Corporation as receiver for
a covered financial company, the Corporation shall file
a report with the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives—
(i) setting forth information on the financial condition of the covered financial company as of the date
of the appointment, including a description of its assets
and liabilities;
(ii) describing the plan of, and actions taken by,
the Corporation to wind down the covered financial
company;
(iii) explaining each instance in which the Corporation waived any applicable requirements of part 366

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1453

of title 12, Code of Federal Regulations (or any successor thereto) with respect to conflicts of interest by
any person in the private sector who was retained
to provide services to the Corporation in connection
with such receivership;
(iv) describing the reasons for the provision of any
funding to the receivership out of the Fund;
(v) setting forth the expected costs of the orderly
liquidation of the covered financial company;
(vi) setting forth the identity of any claimant that
is treated in a manner different from other similarly
situated claimants under subsection (b)(4), (d)(4), or
(h)(5)(E), the amount of any additional payment to
such claimant under subsection (d)(4), and the reason
for any such action; and
(vii) which report the Corporation shall publish
on an online website maintained by the Corporation,
subject to maintaining appropriate confidentiality.
(B) AMENDMENTS.—The Corporation shall, on a timely
basis, not less frequently than quarterly, amend or revise
and resubmit the reports prepared under this paragraph,
as necessary.
(C) CONGRESSIONAL TESTIMONY.—The Corporation and
the primary financial regulatory agency, if any, of the
financial company for which the Corporation was appointed
receiver under this title shall appear before Congress, if
requested, not later than 30 days after the date on which
the Corporation first files the reports required under
subparagraph (A).
(4) DEFAULT OR IN DANGER OF DEFAULT.—For purposes
of this title, a financial company shall be considered to be
in default or in danger of default if, as determined in accordance
with subsection (b)—
(A) a case has been, or likely will promptly be, commenced with respect to the financial company under the
Bankruptcy Code;
(B) the financial company has incurred, or is likely
to incur, losses that will deplete all or substantially all
of its capital, and there is no reasonable prospect for the
company to avoid such depletion;
(C) the assets of the financial company are, or are
likely to be, less than its obligations to creditors and others;
or
(D) the financial company is, or is likely to be, unable
to pay its obligations (other than those subject to a bona
fide dispute) in the normal course of business.
(5) GAO REVIEW.—The Comptroller General of the United
States shall review and report to Congress on any determination under subsection (b), that results in the appointment of
the Corporation as receiver, including—
(A) the basis for the determination;
(B) the purpose for which any action was taken pursuant thereto;
(C) the likely effect of the determination and such
action on the incentives and conduct of financial companies
and their creditors, counterparties, and shareholders; and

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124 STAT. 1454

(D) the likely disruptive effect of the determination
and such action on the reasonable expectations of creditors,
counterparties, and shareholders, taking into account the
impact any action under this title would have on financial
stability in the United States, including whether the rights
of such parties will be disrupted.
(d) CORPORATION POLICIES AND PROCEDURES.—As soon as is
practicable after the date of enactment of this Act, the Corporation
shall establish policies and procedures that are acceptable to the
Secretary governing the use of funds available to the Corporation
to carry out this title, including the terms and conditions for the
provision and use of funds under sections 204(d), 210(h)(2)(G)(iv),
and 210(h)(9).
(e) TREATMENT OF INSURANCE COMPANIES AND INSURANCE COMPANY SUBSIDIARIES.—
(1) IN GENERAL.—Notwithstanding subsection (b), if an
insurance company is a covered financial company or a subsidiary or affiliate of a covered financial company, the liquidation or rehabilitation of such insurance company, and any subsidiary or affiliate of such company that is not excepted under
paragraph (2), shall be conducted as provided under applicable
State law.
(2) EXCEPTION FOR SUBSIDIARIES AND AFFILIATES.—The
requirement of paragraph (1) shall not apply with respect to
any subsidiary or affiliate of an insurance company that is
not itself an insurance company.
(3) BACKUP AUTHORITY.—Notwithstanding paragraph (1),
with respect to a covered financial company described in paragraph (1), if, after the end of the 60-day period beginning
on the date on which a determination is made under section
202(a) with respect to such company, the appropriate regulatory
agency has not filed the appropriate judicial action in the
appropriate State court to place such company into orderly
liquidation under the laws and requirements of the State, the
Corporation shall have the authority to stand in the place
of the appropriate regulatory agency and file the appropriate
judicial action in the appropriate State court to place such
company into orderly liquidation under the laws and requirements of the State.

Time period.

12 USC 5384.

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PUBLIC LAW 111–203—JULY 21, 2010

SEC. 204. ORDERLY LIQUIDATION OF COVERED FINANCIAL COMPANIES.

(a) PURPOSE OF ORDERLY LIQUIDATION AUTHORITY.—It is the
purpose of this title to provide the necessary authority to liquidate
failing financial companies that pose a significant risk to the financial stability of the United States in a manner that mitigates
such risk and minimizes moral hazard. The authority provided
in this title shall be exercised in the manner that best fulfills
such purpose, so that—
(1) creditors and shareholders will bear the losses of the
financial company;
(2) management responsible for the condition of the financial company will not be retained; and
(3) the Corporation and other appropriate agencies will
take all steps necessary and appropriate to assure that all
parties, including management, directors, and third parties,
having responsibility for the condition of the financial company

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1455

bear losses consistent with their responsibility, including
actions for damages, restitution, and recoupment of compensation and other gains not compatible with such responsibility.
(b) CORPORATION AS RECEIVER.—Upon the appointment of the
Corporation under section 202, the Corporation shall act as the
receiver for the covered financial company, with all of the rights
and obligations set forth in this title.
(c) CONSULTATION.—The Corporation, as receiver—
(1) shall consult with the primary financial regulatory
agency or agencies of the covered financial company and its
covered subsidiaries for purposes of ensuring an orderly liquidation of the covered financial company;
(2) may consult with, or under subsection (a)(1)(B)(v) or
(a)(1)(L) of section 210, acquire the services of, any outside
experts, as appropriate to inform and aid the Corporation in
the orderly liquidation process;
(3) shall consult with the primary financial regulatory
agency or agencies of any subsidiaries of the covered financial
company that are not covered subsidiaries, and coordinate with
such regulators regarding the treatment of such solvent subsidiaries and the separate resolution of any such insolvent subsidiaries under other governmental authority, as appropriate; and
(4) shall consult with the Commission and the Securities
Investor Protection Corporation in the case of any covered
financial company for which the Corporation has been
appointed as receiver that is a broker or dealer registered
with the Commission under section 15(b) of the Securities
Exchange Act of 1934 (15 U.S.C. 78o(b)) and is a member
of the Securities Investor Protection Corporation, for the purpose of determining whether to transfer to a bridge financial
company organized by the Corporation as receiver, without
consent of any customer, customer accounts of the covered
financial company.
(d) FUNDING FOR ORDERLY LIQUIDATION.—Upon its appointment as receiver for a covered financial company, and thereafter
as the Corporation may, in its discretion, determine to be necessary
or appropriate, the Corporation may make available to the receivership, subject to the conditions set forth in section 206 and subject
to the plan described in section 210(n)(9), funds for the orderly
liquidation of the covered financial company. All funds provided
by the Corporation under this subsection shall have a priority
of claims under subparagraph (A) or (B) of section 210(b)(1), as
applicable, including funds used for—
(1) making loans to, or purchasing any debt obligation
of, the covered financial company or any covered subsidiary;
(2) purchasing or guaranteeing against loss the assets of
the covered financial company or any covered subsidiary,
directly or through an entity established by the Corporation
for such purpose;
(3) assuming or guaranteeing the obligations of the covered
financial company or any covered subsidiary to 1 or more
third parties;
(4) taking a lien on any or all assets of the covered financial
company or any covered subsidiary, including a first priority
lien on all unencumbered assets of the covered financial company or any covered subsidiary to secure repayment of any
transactions conducted under this subsection;

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124 STAT. 1456

PUBLIC LAW 111–203—JULY 21, 2010
(5) selling or transferring all, or any part, of such acquired
assets, liabilities, or obligations of the covered financial company or any covered subsidiary; and
(6) making payments pursuant to subsections (b)(4), (d)(4),
and (h)(5)(E) of section 210.

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12 USC 5385.

SEC.

205.

ORDERLY LIQUIDATION
DEALERS.

OF

COVERED

BROKERS

AND

(a) APPOINTMENT OF SIPC AS TRUSTEE.—
(1) APPOINTMENT.—Upon the appointment of the Corporation as receiver for any covered broker or dealer, the Corporation shall appoint, without any need for court approval, the
Securities Investor Protection Corporation to act as trustee
for the liquidation under the Securities Investor Protection
Act of 1970 (15 U.S.C. 78aaa et seq.) of the covered broker
or dealer.
(2) ACTIONS BY SIPC.—
(A) FILING.—Upon appointment of SIPC under paragraph (1), SIPC shall promptly file with any Federal district
court of competent jurisdiction specified in section 21 or
27 of the Securities Exchange Act of 1934 (15 U.S.C. 78u,
78aa), an application for a protective decree under the
Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa
et seq.) as to the covered broker or dealer. The Federal
district court shall accept and approve the filing, including
outside of normal business hours, and shall immediately
issue the protective decree as to the covered broker or
dealer.
(B) ADMINISTRATION BY SIPC.—Following entry of the
protective decree, and except as otherwise provided in this
section, the determination of claims and the liquidation
of assets retained in the receivership of the covered broker
or dealer and not transferred to the bridge financial company shall be administered under the Securities Investor
Protection Act of 1970 (15 U.S.C. 78aaa et seq.) by SIPC,
as trustee for the covered broker or dealer.
(C) DEFINITION OF FILING DATE.—For purposes of the
liquidation proceeding, the term ‘‘filing date’’ means the
date on which the Corporation is appointed as receiver
of the covered broker or dealer.
(D) DETERMINATION OF CLAIMS.—As trustee for the
covered broker or dealer, SIPC shall determine and satisfy,
consistent with this title and with the Securities Investor
Protection Act of 1970 (15 U.S.C. 78aaa et seq.), all claims
against the covered broker or dealer arising on or before
the filing date.
(b) POWERS AND DUTIES OF SIPC.—
(1) IN GENERAL.—Except as provided in this section, upon
its appointment as trustee for the liquidation of a covered
broker or dealer, SIPC shall have all of the powers and duties
provided by the Securities Investor Protection Act of 1970 (15
U.S.C. 78aaa et seq.), including, without limitation, all rights
of action against third parties, and shall conduct such liquidation in accordance with the terms of the Securities Investor
Protection Act of 1970 (15 U.S.C. 78aaa et seq.), except that
SIPC shall have no powers or duties with respect to assets
and liabilities transferred by the Corporation from the covered

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1457

broker or dealer to any bridge financial company established
in accordance with this title.
(2) LIMITATION OF POWERS.—The exercise by SIPC of
powers and functions as trustee under subsection (a) shall
not impair or impede the exercise of the powers and duties
of the Corporation with regard to—
(A) any action, except as otherwise provided in this
title—
(i) to make funds available under section 204(d);
(ii) to organize, establish, operate, or terminate
any bridge financial company;
(iii) to transfer assets and liabilities;
(iv) to enforce or repudiate contracts; or
(v) to take any other action relating to such bridge
financial company under section 210; or
(B) determining claims under subsection (e).
(3) PROTECTIVE DECREE.—SIPC and the Corporation, in
consultation with the Commission, shall jointly determine the
terms of the protective decree to be filed by SIPC with any
court of competent jurisdiction under section 21 or 27 of the
Securities Exchange Act of 1934 (15 U.S.C. 78u, 78aa), as
required by subsection (a).
(4) QUALIFIED FINANCIAL CONTRACTS.—Notwithstanding
any provision of the Securities Investor Protection Act of 1970
(15 U.S.C. 78aaa et seq.) to the contrary (including section
5(b)(2)(C) of that Act (15 U.S.C. 78eee(b)(2)(C))), the rights
and obligations of any party to a qualified financial contract
(as that term is defined in section 210(c)(8)) to which a covered
broker or dealer for which the Corporation has been appointed
receiver is a party shall be governed exclusively by section
210, including the limitations and restrictions contained in
section 210(c)(10)(B).
(c) LIMITATION ON COURT ACTION.—Except as otherwise provided in this title, no court may take any action, including any
action pursuant to the Securities Investor Protection Act of 1970
(15 U.S.C. 78aaa et seq.) or the Bankruptcy Code, to restrain
or affect the exercise of powers or functions of the Corporation
as receiver for a covered broker or dealer and any claims against
the Corporation as such receiver shall be determined in accordance
with subsection (e) and such claims shall be limited to money
damages.
(d) ACTIONS BY CORPORATION AS RECEIVER.—
(1) IN GENERAL.—Notwithstanding any other provision of
this title, no action taken by the Corporation as receiver with
respect to a covered broker or dealer shall—
(A) adversely affect the rights of a customer to customer property or customer name securities;
(B) diminish the amount or timely payment of net
equity claims of customers; or
(C) otherwise impair the recoveries provided to a customer under the Securities Investor Protection Act of 1970
(15 U.S.C. 78aaa et seq.).
(2) NET PROCEEDS.—The net proceeds from any transfer,
sale, or disposition of assets of the covered broker or dealer,
or proceeds thereof by the Corporation as receiver for the covered broker or dealer shall be for the benefit of the estate
of the covered broker or dealer, as provided in this title.

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124 STAT. 1458

PUBLIC LAW 111–203—JULY 21, 2010

(e) CLAIMS AGAINST THE CORPORATION AS RECEIVER.—Any
claim against the Corporation as receiver for a covered broker
or dealer for assets transferred to a bridge financial company established with respect to such covered broker or dealer—
(1) shall be determined in accordance with section 210(a)(2);
and
(2) may be reviewed by the appropriate district or territorial
court of the United States in accordance with section 210(a)(5).
(f) SATISFACTION OF CUSTOMER CLAIMS.—
(1) OBLIGATIONS TO CUSTOMERS.—Notwithstanding any
other provision of this title, all obligations of a covered broker
or dealer or of any bridge financial company established with
respect to such covered broker or dealer to a customer relating
to, or net equity claims based upon, customer property or
customer name securities shall be promptly discharged by SIPC,
the Corporation, or the bridge financial company, as applicable,
by the delivery of securities or the making of payments to
or for the account of such customer, in a manner and in an
amount at least as beneficial to the customer as would have
been the case had the actual proceeds realized from the liquidation of the covered broker or dealer under this title been distributed in a proceeding under the Securities Investor Protection
Act of 1970 (15 U.S.C. 78aaa et seq.) without the appointment
of the Corporation as receiver and without any transfer of
assets or liabilities to a bridge financial company, and with
a filing date as of the date on which the Corporation is
appointed as receiver.
(2) SATISFACTION OF CLAIMS BY SIPC.—SIPC, as trustee
for a covered broker or dealer, shall satisfy customer claims
in the manner and amount provided under the Securities
Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.), as
if the appointment of the Corporation as receiver had not
occurred, and with a filing date as of the date on which the
Corporation is appointed as receiver. The Corporation shall
satisfy customer claims, to the extent that a customer would
have received more securities or cash with respect to the allocation of customer property had the covered financial company
been subject to a proceeding under the Securities Investor
Protection Act (15 U.S.C. 78aaa et seq.) without the appointment of the Corporation as receiver, and with a filing date
as of the date on which the Corporation is appointed as receiver.
(g) PRIORITIES.—
(1) CUSTOMER PROPERTY.—As trustee for a covered broker
or dealer, SIPC shall allocate customer property and deliver
customer name securities in accordance with section 8(c) of
the Securities Investor Protection Act of 1970 (15 U.S.C. 78fff–
2(c)).
(2) OTHER CLAIMS.—All claims other than those described
in paragraph (1) (including any unpaid claim by a customer
for the allowed net equity claim of such customer from customer
property) shall be paid in accordance with the priorities in
section 210(b).
(h) RULEMAKING.—The Commission and the Corporation, after
consultation with SIPC, shall jointly issue rules to implement this
section.

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1459

SEC. 206. MANDATORY TERMS AND CONDITIONS FOR ALL ORDERLY
LIQUIDATION ACTIONS.

12 USC 5386.

In taking action under this title, the Corporation shall—
(1) determine that such action is necessary for purposes
of the financial stability of the United States, and not for
the purpose of preserving the covered financial company;
(2) ensure that the shareholders of a covered financial
company do not receive payment until after all other claims
and the Fund are fully paid;
(3) ensure that unsecured creditors bear losses in accordance with the priority of claim provisions in section 210;
(4) ensure that management responsible for the failed
condition of the covered financial company is removed (if such
management has not already been removed at the time at
which the Corporation is appointed receiver);
(5) ensure that the members of the board of directors
(or body performing similar functions) responsible for the failed
condition of the covered financial company are removed, if
such members have not already been removed at the time
the Corporation is appointed as receiver; and
(6) not take an equity interest in or become a shareholder
of any covered financial company or any covered subsidiary.
SEC. 207. DIRECTORS NOT LIABLE FOR ACQUIESCING IN APPOINTMENT OF RECEIVER.

12 USC 5387.

The members of the board of directors (or body performing
similar functions) of a covered financial company shall not be liable
to the shareholders or creditors thereof for acquiescing in or consenting in good faith to the appointment of the Corporation as
receiver for the covered financial company under section 203.

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SEC. 208. DISMISSAL AND EXCLUSION OF OTHER ACTIONS.

(a) IN GENERAL.—Effective as of the date of the appointment
of the Corporation as receiver for the covered financial company
under section 202 or the appointment of SIPC as trustee for a
covered broker or dealer under section 205, as applicable, any
case or proceeding commenced with respect to the covered financial
company under the Bankruptcy Code or the Securities Investor
Protection Act of 1970 (15 U.S.C. 78aaa et seq.) shall be dismissed,
upon notice to the bankruptcy court (with respect to a case commenced under the Bankruptcy Code), and upon notice to SIPC
(with respect to a covered broker or dealer) and no such case
or proceeding may be commenced with respect to a covered financial
company at any time while the orderly liquidation is pending.
(b) REVESTING OF ASSETS.—Effective as of the date of appointment of the Corporation as receiver, the assets of a covered financial
company shall, to the extent they have vested in any entity other
than the covered financial company as a result of any case or
proceeding commenced with respect to the covered financial company under the Bankruptcy Code, the Securities Investor Protection
Act of 1970 (15 U.S.C. 78aaa et seq.), or any similar provision
of State liquidation or insolvency law applicable to the covered
financial company, revest in the covered financial company.
(c) LIMITATION.—Notwithstanding subsections (a) and (b), any
order entered or other relief granted by a bankruptcy court prior
to the date of appointment of the Corporation as receiver shall

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Effective dates.
12 USC 5388.

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PUBLIC LAW 111–203—JULY 21, 2010

continue with the same validity as if an orderly liquidation had
not been commenced.
12 USC 5389.

SEC. 209. RULEMAKING; NON-CONFLICTING LAW.

The Corporation shall, in consultation with the Council, prescribe such rules or regulations as the Corporation considers necessary or appropriate to implement this title, including rules and
regulations with respect to the rights, interests, and priorities of
creditors, counterparties, security entitlement holders, or other persons with respect to any covered financial company or any assets
or other property of or held by such covered financial company,
and address the potential for conflicts of interest between or among
individual receiverships established under this title or under the
Federal Deposit Insurance Act. To the extent possible, the Corporation shall seek to harmonize applicable rules and regulations
promulgated under this section with the insolvency laws that would
otherwise apply to a covered financial company.

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12 USC 5390.

SEC. 210. POWERS AND DUTIES OF THE CORPORATION.

(a) POWERS AND AUTHORITIES.—
(1) GENERAL POWERS.—
(A) SUCCESSOR TO COVERED FINANCIAL COMPANY.—The
Corporation shall, upon appointment as receiver for a covered financial company under this title, succeed to—
(i) all rights, titles, powers, and privileges of the
covered financial company and its assets, and of any
stockholder, member, officer, or director of such company; and
(ii) title to the books, records, and assets of any
previous receiver or other legal custodian of such covered financial company.
(B) OPERATION OF THE COVERED FINANCIAL COMPANY
DURING THE PERIOD OF ORDERLY LIQUIDATION.—The Corporation, as receiver for a covered financial company,
may—
(i) take over the assets of and operate the covered
financial company with all of the powers of the members or shareholders, the directors, and the officers
of the covered financial company, and conduct all business of the covered financial company;
(ii) collect all obligations and money owed to the
covered financial company;
(iii) perform all functions of the covered financial
company, in the name of the covered financial company;
(iv) manage the assets and property of the covered
financial company, consistent with maximization of the
value of the assets in the context of the orderly liquidation; and
(v) provide by contract for assistance in fulfilling
any function, activity, action, or duty of the Corporation
as receiver.
(C) FUNCTIONS OF COVERED FINANCIAL COMPANY OFFICERS, DIRECTORS, AND SHAREHOLDERS.—The Corporation
may provide for the exercise of any function by any member
or stockholder, director, or officer of any covered financial
company for which the Corporation has been appointed
as receiver under this title.

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1461

(D) ADDITIONAL POWERS AS RECEIVER.—The Corporation shall, as receiver for a covered financial company,
and subject to all legally enforceable and perfected security
interests and all legally enforceable security entitlements
in respect of assets held by the covered financial company,
liquidate, and wind-up the affairs of a covered financial
company, including taking steps to realize upon the assets
of the covered financial company, in such manner as the
Corporation deems appropriate, including through the sale
of assets, the transfer of assets to a bridge financial company established under subsection (h), or the exercise of
any other rights or privileges granted to the receiver under
this section.
(E) ADDITIONAL POWERS WITH RESPECT TO FAILING
SUBSIDIARIES OF A COVERED FINANCIAL COMPANY.—
(i) IN GENERAL.—In any case in which a receiver
is appointed for a covered financial company under
section 202, the Corporation may appoint itself as
receiver of any covered subsidiary of the covered financial company that is organized under Federal law or
the laws of any State, if the Corporation and the Secretary jointly determine that—
(I) the covered subsidiary is in default or in
danger of default;
(II) such action would avoid or mitigate serious
adverse effects on the financial stability or economic conditions of the United States; and
(III) such action would facilitate the orderly
liquidation of the covered financial company.
(ii) TREATMENT AS COVERED FINANCIAL COMPANY.—
If the Corporation is appointed as receiver of a covered
subsidiary of a covered financial company under clause
(i), the covered subsidiary shall thereafter be considered a covered financial company under this title, and
the Corporation shall thereafter have all the powers
and rights with respect to that covered subsidiary as
it has with respect to a covered financial company
under this title.
(F) ORGANIZATION OF BRIDGE COMPANIES.—The Corporation, as receiver for a covered financial company, may
organize a bridge financial company under subsection (h).
(G) MERGER; TRANSFER OF ASSETS AND LIABILITIES.—
(i) IN GENERAL.—Subject to clauses (ii) and (iii),
the Corporation, as receiver for a covered financial
company, may—
(I) merge the covered financial company with
another company; or
(II) transfer any asset or liability of the covered financial company (including any assets and
liabilities held by the covered financial company
for security entitlement holders, any customer
property, or any assets and liabilities associated
with any trust or custody business) without
obtaining any approval, assignment, or consent
with respect to such transfer.
(ii) FEDERAL AGENCY APPROVAL; ANTITRUST
REVIEW.—With respect to a transaction described in

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clause (i)(I) that requires approval by a Federal
agency—
(I) the transaction may not be consummated
before the 5th calendar day after the date of
approval by the Federal agency responsible for
such approval;
(II) if, in connection with any such approval,
a report on competitive factors is required, the
Federal agency responsible for such approval shall
promptly notify the Attorney General of the United
States of the proposed transaction, and the
Attorney General shall provide the required report
not later than 10 days after the date of the request;
and
(III) if notification under section 7A of the
Clayton Act is required with respect to such transaction, then the required waiting period shall end
on the 15th day after the date on which the
Attorney General and the Federal Trade Commission receive such notification, unless the waiting
period is terminated earlier under subsection (b)(2)
of such section 7A, or is extended pursuant to
subsection (e)(2) of such section 7A.
(iii) SETOFF.—Subject to the other provisions of
this title, any transferee of assets from a receiver,
including a bridge financial company, shall be subject
to such claims or rights as would prevail over the
rights of such transferee in such assets under
applicable noninsolvency law.
(H) PAYMENT OF VALID OBLIGATIONS.—The Corporation,
as receiver for a covered financial company, shall, to the
extent that funds are available, pay all valid obligations
of the covered financial company that are due and payable
at the time of the appointment of the Corporation as
receiver, in accordance with the prescriptions and limitations of this title.
(I) APPLICABLE NONINSOLVENCY LAW.—Except as may
otherwise be provided in this title, the applicable noninsolvency law shall be determined by the noninsolvency choice
of law rules otherwise applicable to the claims, rights,
titles, persons, or entities at issue.
(J) SUBPOENA AUTHORITY.—
(i) IN GENERAL.—The Corporation, as receiver for
a covered financial company, may, for purposes of carrying out any power, authority, or duty with respect
to the covered financial company (including determining any claim against the covered financial company and determining and realizing upon any asset
of any person in the course of collecting money due
the covered financial company), exercise any power
established under section 8(n) of the Federal Deposit
Insurance Act, as if the Corporation were the appropriate Federal banking agency for the covered financial
company, and the covered financial company were an
insured depository institution.
(ii) RULE OF CONSTRUCTION.—This subparagraph
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Corporation, in any capacity, might otherwise have
to exercise any powers described in clause (i) or under
any other provision of law.
(K) INCIDENTAL POWERS.—The Corporation, as receiver
for a covered financial company, may exercise all powers
and authorities specifically granted to receivers under this
title, and such incidental powers as shall be necessary
to carry out such powers under this title.
(L) UTILIZATION OF PRIVATE SECTOR.—In carrying out
its responsibilities in the management and disposition of
assets from the covered financial company, the Corporation,
as receiver for a covered financial company, may utilize
the services of private persons, including real estate and
loan portfolio asset management, property management,
auction marketing, legal, and brokerage services, if such
services are available in the private sector, and the Corporation determines that utilization of such services is
practicable, efficient, and cost effective.
(M) SHAREHOLDERS AND CREDITORS OF COVERED FINANCIAL COMPANY.—Notwithstanding any other provision of
law, the Corporation, as receiver for a covered financial
company, shall succeed by operation of law to the rights,
titles, powers, and privileges described in subparagraph
(A), and shall terminate all rights and claims that the
stockholders and creditors of the covered financial company
may have against the assets of the covered financial company or the Corporation arising out of their status as
stockholders or creditors, except for their right to payment,
resolution, or other satisfaction of their claims, as permitted
under this section. The Corporation shall ensure that shareholders and unsecured creditors bear losses, consistent with
the priority of claims provisions under this section.
(N) COORDINATION WITH FOREIGN FINANCIAL AUTHORITIES.—The Corporation, as receiver for a covered financial
company, shall coordinate, to the maximum extent possible,
with the appropriate foreign financial authorities regarding
the orderly liquidation of any covered financial company
that has assets or operations in a country other than the
United States.
(O) RESTRICTION ON TRANSFERS.—
(i) SELECTION OF ACCOUNTS FOR TRANSFER.—If the
Corporation establishes one or more bridge financial
companies with respect to a covered broker or dealer,
the Corporation shall transfer to one of such bridge
financial companies, all customer accounts of the covered broker or dealer, and all associated customer
name securities and customer property, unless the Corporation, after consulting with the Commission and
SIPC, determines that—
(I) the customer accounts, customer name
securities, and customer property are likely to be
promptly transferred to another broker or dealer
that is registered with the Commission under section 15(b) of the Securities Exchange Act of 1934
(15 U.S.C. 73o(b)) and is a member of SIPC; or
(II) the transfer of the accounts to a bridge
financial company would materially interfere with

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the ability of the Corporation to avoid or mitigate
serious adverse effects on financial stability or economic conditions in the United States.
(ii) TRANSFER OF PROPERTY.—SIPC, as trustee for
the liquidation of the covered broker or dealer, and
the Commission shall provide any and all reasonable
assistance necessary to complete such transfers by the
Corporation.
(iii) CUSTOMER CONSENT AND COURT APPROVAL NOT
REQUIRED.—Neither
customer consent nor court
approval shall be required to transfer any customer
accounts or associated customer name securities or
customer property to a bridge financial company in
accordance with this section.
(iv) NOTIFICATION OF SIPC AND SHARING OF
INFORMATION.—The Corporation shall identify to SIPC
the customer accounts and associated customer name
securities and customer property transferred to the
bridge financial company. The Corporation and SIPC
shall cooperate in the sharing of any information necessary for each entity to discharge its obligations under
this title and under the Securities Investor Protection
Act of 1970 (15 U.S.C. 78aaa et seq.) including by
providing access to the books and records of the covered
financial company and any bridge financial company
established in accordance with this title.
(2) DETERMINATION OF CLAIMS.—
(A) IN GENERAL.—The Corporation, as receiver for a
covered financial company, shall report on claims, as set
forth in section 203(c)(3). Subject to paragraph (4) of this
subsection, the Corporation, as receiver for a covered financial company, shall determine claims in accordance with
the requirements of this subsection and regulations prescribed under section 209.
(B) NOTICE REQUIREMENTS.—The Corporation, as
receiver for a covered financial company, in any case
involving the liquidation or winding up of the affairs of
a covered financial company, shall—
(i) promptly publish a notice to the creditors of
the covered financial company to present their claims,
together with proof, to the receiver by a date specified
in the notice, which shall be not earlier than 90 days
after the date of publication of such notice; and
(ii) republish such notice 1 month and 2 months,
respectively, after the date of publication under clause
(i).
(C) MAILING REQUIRED.—The Corporation as receiver
shall mail a notice similar to the notice published under
clause (i) or (ii) of subparagraph (B), at the time of such
publication, to any creditor shown on the books and records
of the covered financial company—
(i) at the last address of the creditor appearing
in such books;
(ii) in any claim filed by the claimant; or
(iii) upon discovery of the name and address of
a claimant not appearing on the books and records
of the covered financial company, not later than 30

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days after the date of the discovery of such name
and address.
(3) PROCEDURES FOR RESOLUTION OF CLAIMS.—
(A) DECISION PERIOD.—
(i) IN GENERAL.—Prior to the 180th day after the
date on which a claim against a covered financial company is filed with the Corporation as receiver, or such
later date as may be agreed as provided in clause
(ii), the Corporation shall notify the claimant whether
it allows or disallows the claim, in accordance with
subparagraphs (B), (C), and (D).
(ii) EXTENSION OF TIME.—By written agreement
executed not later than 180 days after the date on
which a claim against a covered financial company
is filed with the Corporation, the period described in
clause (i) may be extended by written agreement
between the claimant and the Corporation. Failure
to notify the claimant of any disallowance within the
time period set forth in clause (i), as it may be extended
by agreement under this clause, shall be deemed to
be a disallowance of such claim, and the claimant
may file or continue an action in court, as provided
in paragraph (4).
(iii) MAILING OF NOTICE SUFFICIENT.—The requirements of clause (i) shall be deemed to be satisfied
if the notice of any decision with respect to any claim
is mailed to the last address of the claimant which
appears—
(I) on the books, records, or both of the covered
financial company;
(II) in the claim filed by the claimant; or
(III) in documents submitted in proof of the
claim.
(iv) CONTENTS OF NOTICE OF DISALLOWANCE.—If
the Corporation as receiver disallows any claim filed
under clause (i), the notice to the claimant shall contain—
(I) a statement of each reason for the disallowance; and
(II) the procedures required to file or continue
an action in court, as provided in paragraph (4).
(B) ALLOWANCE OF PROVEN CLAIM.—The receiver shall
allow any claim received by the receiver on or before the
date specified in the notice under paragraph (2)(B)(i), which
is proved to the satisfaction of the receiver.
(C) DISALLOWANCE OF CLAIMS FILED AFTER END OF
FILING PERIOD.—
(i) IN GENERAL.—Except as provided in clause (ii),
claims filed after the date specified in the notice published under paragraph (2)(B)(i) shall be disallowed,
and such disallowance shall be final.
(ii) CERTAIN EXCEPTIONS.—Clause (i) shall not
apply with respect to any claim filed by a claimant
after the date specified in the notice published under
paragraph (2)(B)(i), and such claim may be considered
by the receiver under subparagraph (B), if—

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PUBLIC LAW 111–203—JULY 21, 2010
(I) the claimant did not receive notice of the
appointment of the receiver in time to file such
claim before such date; and
(II) such claim is filed in time to permit payment of such claim.
(D) AUTHORITY TO DISALLOW CLAIMS.—
(i) IN GENERAL.—The Corporation may disallow
any portion of any claim by a creditor or claim of
a security, preference, setoff, or priority which is not
proved to the satisfaction of the Corporation.
(ii) PAYMENTS TO UNDERSECURED CREDITORS.—In
the case of a claim against a covered financial company
that is secured by any property or other asset of such
covered financial company, the receiver—
(I) may treat the portion of such claim which
exceeds an amount equal to the fair market value
of such property or other asset as an unsecured
claim; and
(II) may not make any payment with respect
to such unsecured portion of the claim, other than
in connection with the disposition of all claims
of unsecured creditors of the covered financial company.
(iii) EXCEPTIONS.—No provision of this paragraph
shall apply with respect to—
(I) any extension of credit from any Federal
reserve bank, or the Corporation, to any covered
financial company; or
(II) subject to clause (ii), any legally enforceable and perfected security interest in the assets
of the covered financial company securing any such
extension of credit.
(E) LEGAL EFFECT OF FILING.—
(i) STATUTE OF LIMITATIONS TOLLED.—For purposes
of any applicable statute of limitations, the filing of
a claim with the receiver shall constitute a commencement of an action.
(ii) NO PREJUDICE TO OTHER ACTIONS.—Subject to
paragraph (8), the filing of a claim with the receiver
shall not prejudice any right of the claimant to continue
any action which was filed before the date of appointment of the receiver for the covered financial company.
(4) JUDICIAL DETERMINATION OF CLAIMS.—
(A) IN GENERAL.—Subject to subparagraph (B), a claimant may file suit on a claim (or continue an action commenced before the date of appointment of the Corporation
as receiver) in the district or territorial court of the United
States for the district within which the principal place
of business of the covered financial company is located
(and such court shall have jurisdiction to hear such claim).
(B) TIMING.—A claim under subparagraph (A) may
be filed before the end of the 60-day period beginning
on the earlier of—
(i) the end of the period described in paragraph
(3)(A)(i) (or, if extended by agreement of the Corporation and the claimant, the period described in paragraph (3)(A)(ii)) with respect to any claim against a

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covered financial company for which the Corporation
is receiver; or
(ii) the date of any notice of disallowance of such
claim pursuant to paragraph (3)(A)(i).
(C) STATUTE OF LIMITATIONS.—If any claimant fails
to file suit on such claim (or to continue an action on
such claim commenced before the date of appointment of
the Corporation as receiver) prior to the end of the 60day period described in subparagraph (B), the claim shall
be deemed to be disallowed (other than any portion of
such claim which was allowed by the receiver) as of the
end of such period, such disallowance shall be final, and
the claimant shall have no further rights or remedies with
respect to such claim.
(5) EXPEDITED DETERMINATION OF CLAIMS.—
(A) PROCEDURE REQUIRED.—The Corporation shall
establish a procedure for expedited relief outside of the
claims process established under paragraph (3), for any
claimant that alleges—
(i) having a legally valid and enforceable or perfected security interest in property of a covered financial company or control of any legally valid and enforceable security entitlement in respect of any asset held
by the covered financial company for which the Corporation has been appointed receiver; and
(ii) that irreparable injury will occur if the claims
procedure established under paragraph (3) is followed.
(B) DETERMINATION PERIOD.—Prior to the end of the
90-day period beginning on the date on which a claim
is filed in accordance with the procedures established
pursuant to subparagraph (A), the Corporation shall—
(i) determine—
(I) whether to allow or disallow such claim,
or any portion thereof; or
(II) whether such claim should be determined
pursuant to the procedures established pursuant
to paragraph (3);
(ii) notify the claimant of the determination; and
(iii) if the claim is disallowed, provide a statement
of each reason for the disallowance and the procedure
for obtaining a judicial determination.
(C) PERIOD FOR FILING OR RENEWING SUIT.—Any claimant who files a request for expedited relief shall be permitted to file suit (or continue a suit filed before the date
of appointment of the Corporation as receiver seeking a
determination of the rights of the claimant with respect
to such security interest (or such security entitlement) after
the earlier of—
(i) the end of the 90-day period beginning on the
date of the filing of a request for expedited relief;
or
(ii) the date on which the Corporation denies the
claim or a portion thereof.
(D) STATUTE OF LIMITATIONS.—If an action described
in subparagraph (C) is not filed, or the motion to renew
a previously filed suit is not made, before the end of the
30-day period beginning on the date on which such action

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or motion may be filed in accordance with subparagraph
(C), the claim shall be deemed to be disallowed as of
the end of such period (other than any portion of such
claim which was allowed by the receiver), such disallowance
shall be final, and the claimant shall have no further
rights or remedies with respect to such claim.
(E) LEGAL EFFECT OF FILING.—
(i) STATUTE OF LIMITATIONS TOLLED.—For purposes
of any applicable statute of limitations, the filing of
a claim with the receiver shall constitute a commencement of an action.
(ii) NO PREJUDICE TO OTHER ACTIONS.—Subject to
paragraph (8), the filing of a claim with the receiver
shall not prejudice any right of the claimant to continue
any action which was filed before the appointment
of the Corporation as receiver for the covered financial
company.
(6) AGREEMENTS AGAINST INTEREST OF THE RECEIVER.—
No agreement that tends to diminish or defeat the interest
of the Corporation as receiver in any asset acquired by the
receiver under this section shall be valid against the receiver,
unless such agreement—
(A) is in writing;
(B) was executed by an authorized officer or representative of the covered financial company, or confirmed in the
ordinary course of business by the covered financial company; and
(C) has been, since the time of its execution, an official
record of the company or the party claiming under the
agreement provides documentation, acceptable to the
receiver, of such agreement and its authorized execution
or confirmation by the covered financial company.
(7) PAYMENT OF CLAIMS.—
(A) IN GENERAL.—Subject to subparagraph (B), the Corporation as receiver may, in its discretion and to the extent
that funds are available, pay creditor claims, in such
manner and amounts as are authorized under this section,
which are—
(i) allowed by the receiver;
(ii) approved by the receiver pursuant to a final
determination pursuant to paragraph (3) or (5), as
applicable; or
(iii) determined by the final judgment of a court
of competent jurisdiction.
(B) LIMITATION.—A creditor shall, in no event, receive
less than the amount that the creditor is entitled to receive
under paragraphs (2) and (3) of subsection (d), as
applicable.
(C) PAYMENT OF DIVIDENDS ON CLAIMS.—The Corporation as receiver may, in its sole discretion, and to the
extent otherwise permitted by this section, pay dividends
on proven claims at any time, and no liability shall attach
to the Corporation as receiver, by reason of any such payment or for failure to pay dividends to a claimant whose
claim is not proved at the time of any such payment.
(D) RULEMAKING BY THE CORPORATION.—The Corporation may prescribe such rules, including definitions of

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terms, as the Corporation deems appropriate to establish
an interest rate for or to make payments of post-insolvency
interest to creditors holding proven claims against the
receivership estate of a covered financial company, except
that no such interest shall be paid until the Corporation
as receiver has satisfied the principal amount of all creditor
claims.
(8) SUSPENSION OF LEGAL ACTIONS.—
(A) IN GENERAL.—After the appointment of the Corporation as receiver for a covered financial company, the
Corporation may request a stay in any judicial action or
proceeding in which such covered financial company is
or becomes a party, for a period of not to exceed 90 days.
(B) GRANT OF STAY BY ALL COURTS REQUIRED.—Upon
receipt of a request by the Corporation pursuant to
subparagraph (A), the court shall grant such stay as to
all parties.
(9) ADDITIONAL RIGHTS AND DUTIES.—
(A) PRIOR FINAL ADJUDICATION.—The Corporation shall
abide by any final, non-appealable judgment of any court
of competent jurisdiction that was rendered before the
appointment of the Corporation as receiver.
(B) RIGHTS AND REMEDIES OF RECEIVER.—In the event
of any appealable judgment, the Corporation as receiver
shall—
(i) have all the rights and remedies available to
the covered financial company (before the date of
appointment of the Corporation as receiver under section 202) and the Corporation, including removal to
Federal court and all appellate rights; and
(ii) not be required to post any bond in order
to pursue such remedies.
(C) NO ATTACHMENT OR EXECUTION.—No attachment
or execution may be issued by any court upon assets in
the possession of the Corporation as receiver for a covered
financial company.
(D) LIMITATION ON JUDICIAL REVIEW.—Except as otherwise provided in this title, no court shall have jurisdiction
over—
(i) any claim or action for payment from, or any
action seeking a determination of rights with respect
to, the assets of any covered financial company for
which the Corporation has been appointed receiver,
including any assets which the Corporation may
acquire from itself as such receiver; or
(ii) any claim relating to any act or omission of
such covered financial company or the Corporation as
receiver.
(E) DISPOSITION OF ASSETS.—In exercising any right,
power, privilege, or authority as receiver in connection
with any covered financial company for which the Corporation is acting as receiver under this section, the Corporation
shall, to the greatest extent practicable, conduct its operations in a manner that—
(i) maximizes the net present value return from
the sale or disposition of such assets;

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(ii) minimizes the amount of any loss realized in
the resolution of cases;
(iii) mitigates the potential for serious adverse
effects to the financial system;
(iv) ensures timely and adequate competition and
fair and consistent treatment of offerors; and
(v) prohibits discrimination on the basis of race,
sex, or ethnic group in the solicitation and consideration of offers.
(10) STATUTE OF LIMITATIONS FOR ACTIONS BROUGHT BY
RECEIVER.—
(A) IN GENERAL.—Notwithstanding any provision of
any contract, the applicable statute of limitations with
regard to any action brought by the Corporation as receiver
for a covered financial company shall be—
(i) in the case of any contract claim, the longer
of—
(I) the 6-year period beginning on the date
on which the claim accrues; or
(II) the period applicable under State law; and
(ii) in the case of any tort claim, the longer of—
(I) the 3-year period beginning on the date
on which the claim accrues; or
(II) the period applicable under State law.
(B) DATE ON WHICH A CLAIM ACCRUES.—For purposes
of subparagraph (A), the date on which the statute of
limitations begins to run on any claim described in subparagraph (A) shall be the later of—
(i) the date of the appointment of the Corporation
as receiver under this title; or
(ii) the date on which the cause of action accrues.
(C) REVIVAL OF EXPIRED STATE CAUSES OF ACTION.—
(i) IN GENERAL.—In the case of any tort claim
described in clause (ii) for which the applicable statute
of limitations under State law has expired not more
than 5 years before the date of appointment of the
Corporation as receiver for a covered financial company, the Corporation may bring an action as receiver
on such claim without regard to the expiration of the
statute of limitations.
(ii) CLAIMS DESCRIBED.—A tort claim referred to
in clause (i) is a claim arising from fraud, intentional
misconduct resulting in unjust enrichment, or intentional misconduct resulting in substantial loss to the
covered financial company.
(11) AVOIDABLE TRANSFERS.—
(A) FRAUDULENT TRANSFERS.—The Corporation, as
receiver for any covered financial company, may avoid a
transfer of any interest of the covered financial company
in property, or any obligation incurred by the covered financial company, that was made or incurred at or within
2 years before the date on which the Corporation was
appointed receiver, if—
(i) the covered financial company voluntarily or
involuntarily—
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any entity to which the covered financial company
was or became, on or after the date on which
such transfer was made or such obligation was
incurred, indebted; or
(II) received less than a reasonably equivalent
value in exchange for such transferor obligation;
and
(ii) the covered financial company voluntarily or
involuntarily—
(I) was insolvent on the date that such transfer
was made or such obligation was incurred, or
became insolvent as a result of such transfer or
obligation;
(II) was engaged in business or a transaction,
or was about to engage in business or a transaction, for which any property remaining with the
covered financial company was an unreasonably
small capital;
(III) intended to incur, or believed that the
covered financial company would incur, debts that
would be beyond the ability of the covered financial
company to pay as such debts matured; or
(IV) made such transfer to or for the benefit
of an insider, or incurred such obligation to or
for the benefit of an insider, under an employment
contract and not in the ordinary course of business.
(B) PREFERENTIAL TRANSFERS.—The Corporation as
receiver for any covered financial company may avoid a
transfer of an interest of the covered financial company
in property—
(i) to or for the benefit of a creditor;
(ii) for or on account of an antecedent debt that
was owed by the covered financial company before
the transfer was made;
(iii) that was made while the covered financial
company was insolvent;
(iv) that was made—
(I) 90 days or less before the date on which
the Corporation was appointed receiver; or
(II) more than 90 days, but less than 1 year
before the date on which the Corporation was
appointed receiver, if such creditor at the time
of the transfer was an insider; and
(v) that enables the creditor to receive more than
the creditor would receive if—
(I) the covered financial company had been
liquidated under chapter 7 of the Bankruptcy
Code;
(II) the transfer had not been made; and
(III) the creditor received payment of such debt
to the extent provided by the provisions of chapter
7 of the Bankruptcy Code.
(C) POST-RECEIVERSHIP TRANSACTIONS.—The Corporation as receiver for any covered financial company may
avoid a transfer of property of the receivership that
occurred after the Corporation was appointed receiver that

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PUBLIC LAW 111–203—JULY 21, 2010
was not authorized under this title by the Corporation
as receiver.
(D) RIGHT OF RECOVERY.—To the extent that a transfer
is avoided under subparagraph (A), (B), or (C), the Corporation may recover, for the benefit of the covered financial
company, the property transferred or, if a court so orders,
the value of such property (at the time of such transfer)
from—
(i) the initial transferee of such transfer or the
person for whose benefit such transfer was made; or
(ii) any immediate or mediate transferee of any
such initial transferee.
(E) RIGHTS OF TRANSFEREE OR OBLIGEE.—The Corporation may not recover under subparagraph (D)(ii) from—
(i) any transferee that takes for value, including
in satisfaction of or to secure a present or antecedent
debt, in good faith, and without knowledge of the
voidability of the transfer avoided; or
(ii) any immediate or mediate good faith transferee
of such transferee.
(F) DEFENSES.—Subject to the other provisions of this
title—
(i) a transferee or obligee from which the Corporation seeks to recover a transfer or to avoid an obligation
under subparagraph (A), (B), (C), or (D) shall have
the same defenses available to a transferee or obligee
from which a trustee seeks to recover a transfer or
avoid an obligation under sections 547, 548, and 549
of the Bankruptcy Code; and
(ii) the authority of the Corporation to recover
a transfer or avoid an obligation shall be subject to
subsections (b) and (c) of section 546, section 547(c),
and section 548(c) of the Bankruptcy Code.
(G) RIGHTS UNDER THIS SECTION.—The rights of the
Corporation as receiver under this section shall be superior
to any rights of a trustee or any other party (other than
a Federal agency) under the Bankruptcy Code.
(H) RULES OF CONSTRUCTION; DEFINITIONS.—For purposes of—
(i) subparagraphs (A) and (B)—
(I) the term ‘‘insider’’ has the same meaning
as in section 101(31) of the Bankruptcy Code;
(II) a transfer is made when such transfer
is so perfected that a bona fide purchaser from
the covered financial company against whom
applicable law permits such transfer to be perfected cannot acquire an interest in the property
transferred that is superior to the interest in such
property of the transferee, but if such transfer
is not so perfected before the date on which the
Corporation is appointed as receiver for the covered financial company, such transfer is made
immediately before the date of such appointment;
and
(III) the term ‘‘value’’ means property, or satisfaction or securing of a present or antecedent debt
of the covered financial company, but does not

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include an unperformed promise to furnish support
to the covered financial company; and
(ii) subparagraph (B)—
(I) the covered financial company is presumed
to have been insolvent on and during the 90-day
period immediately preceding the date of appointment of the Corporation as receiver; and
(II) the term ‘‘insolvent’’ has the same meaning
as in section 101(32) of the Bankruptcy Code.
(12) SETOFF.—
(A) GENERALLY.—Except as otherwise provided in this
title, any right of a creditor to offset a mutual debt owed
by the creditor to any covered financial company that arose
before the Corporation was appointed as receiver for the
covered financial company against a claim of such creditor
may be asserted if enforceable under applicable noninsolvency law, except to the extent that—
(i) the claim of the creditor against the covered
financial company is disallowed;
(ii) the claim was transferred, by an entity other
than the covered financial company, to the creditor—
(I) after the Corporation was appointed as
receiver of the covered financial company; or
(II)(aa) after the 90-day period preceding the
date on which the Corporation was appointed as
receiver for the covered financial company; and
(bb) while the covered financial company was
insolvent (except for a setoff in connection with
a qualified financial contract); or
(iii) the debt owed to the covered financial company
was incurred by the covered financial company—
(I) after the 90-day period preceding the date
on which the Corporation was appointed as
receiver for the covered financial company;
(II) while the covered financial company was
insolvent; and
(III) for the purpose of obtaining a right of
setoff against the covered financial company
(except for a setoff in connection with a qualified
financial contract).
(B) INSUFFICIENCY.—
(i) IN GENERAL.—Except with respect to a setoff
in connection with a qualified financial contract, if
a creditor offsets a mutual debt owed to the covered
financial company against a claim of the covered financial company on or within the 90-day period preceding
the date on which the Corporation is appointed as
receiver for the covered financial company, the Corporation may recover from the creditor the amount
so offset, to the extent that any insufficiency on the
date of such setoff is less than the insufficiency on
the later of—
(I) the date that is 90 days before the date
on which the Corporation is appointed as receiver
for the covered financial company; or
(II) the first day on which there is an insufficiency during the 90-day period preceding the date

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on which the Corporation is appointed as receiver
for the covered financial company.
(ii) DEFINITION OF INSUFFICIENCY.—In this
subparagraph, the term ‘‘insufficiency’’ means the
amount, if any, by which a claim against the covered
financial company exceeds a mutual debt owed to the
covered financial company by the holder of such claim.
(C) INSOLVENCY.—The term ‘‘insolvent’’ has the same
meaning as in section 101(32) of the Bankruptcy Code.
(D) PRESUMPTION OF INSOLVENCY.—For purposes of
this paragraph, the covered financial company is presumed
to have been insolvent on and during the 90-day period
preceding the date of appointment of the Corporation as
receiver.
(E) LIMITATION.—Nothing in this paragraph (12) shall
be the basis for any right of setoff where no such right
exists under applicable noninsolvency law.
(F) PRIORITY CLAIM.—Except as otherwise provided in
this title, the Corporation as receiver for the covered financial company may sell or transfer any assets free and
clear of the setoff rights of any party, except that such
party shall be entitled to a claim, subordinate to the claims
payable under subparagraphs (A), (B), (C), and (D) of subsection (b)(1), but senior to all other unsecured liabilities
defined in subsection (b)(1)(E), in an amount equal to the
value of such setoff rights.
(13) ATTACHMENT OF ASSETS AND OTHER INJUNCTIVE
RELIEF.—Subject to paragraph (14), any court of competent
jurisdiction may, at the request of the Corporation as receiver
for a covered financial company, issue an order in accordance
with Rule 65 of the Federal Rules of Civil Procedure, including
an order placing the assets of any person designated by the
Corporation under the control of the court and appointing a
trustee to hold such assets.
(14) STANDARDS.—
(A) SHOWING.—Rule 65 of the Federal Rules of Civil
Procedure shall apply with respect to any proceeding under
paragraph (13), without regard to the requirement that
the applicant show that the injury, loss, or damage is
irreparable and immediate.
(B) STATE PROCEEDING.—If, in the case of any proceeding in a State court, the court determines that rules
of civil procedure available under the laws of the State
provide substantially similar protections of the right of
the parties to due process as provided under Rule 65 (as
modified with respect to such proceeding by subparagraph
(A)), the relief sought by the Corporation pursuant to paragraph (14) may be requested under the laws of such State.
(15) TREATMENT OF CLAIMS ARISING FROM BREACH OF CONTRACTS EXECUTED BY THE CORPORATION AS RECEIVER.—Notwithstanding any other provision of this title, any final and nonappealable judgment for monetary damages entered against
the Corporation as receiver for a covered financial company
for the breach of an agreement executed or approved by the
Corporation after the date of its appointment shall be paid
as an administrative expense of the receiver. Nothing in this
paragraph shall be construed to limit the power of a receiver

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124 STAT. 1475

to exercise any rights under contract or law, including to terminate, breach, cancel, or otherwise discontinue such agreement.
(16) ACCOUNTING AND RECORDKEEPING REQUIREMENTS.—
(A) IN GENERAL.—The Corporation as receiver for a
covered financial company shall, consistent with the
accounting and reporting practices and procedures established by the Corporation, maintain a full accounting of
each receivership or other disposition of any covered financial company.
(B) ANNUAL ACCOUNTING OR REPORT.—With respect to
each receivership to which the Corporation is appointed,
the Corporation shall make an annual accounting or report,
as appropriate, available to the Secretary and the Comptroller General of the United States.
(C) AVAILABILITY OF REPORTS.—Any report prepared
pursuant to subparagraph (B) and section 203(c)(3) shall
be made available to the public by the Corporation.
(D) RECORDKEEPING REQUIREMENT.—
(i) IN GENERAL.—The Corporation shall prescribe
such regulations and establish such retention schedules
as are necessary to maintain the documents and
records of the Corporation generated in exercising the
authorities of this title and the records of a covered
financial company for which the Corporation is
appointed receiver, with due regard for—
(I) the avoidance of duplicative record retention; and
(II) the expected evidentiary needs of the Corporation as receiver for a covered financial company and the public regarding the records of covered financial companies.
(ii) RETENTION OF RECORDS.—Unless otherwise
required by applicable Federal law or court order, the
Corporation may not, at any time, destroy any records
that are subject to clause (i).
(iii) RECORDS DEFINED.—As used in this subparagraph, the terms ‘‘records’’ and ‘‘records of a covered
financial company’’ mean any document, book, paper,
map, photograph, microfiche, microfilm, computer or
electronically-created record generated or maintained
by the covered financial company in the course of and
necessary to its transaction of business.
(b) PRIORITY OF EXPENSES AND UNSECURED CLAIMS.—
(1) IN GENERAL.—Unsecured claims against a covered financial company, or the Corporation as receiver for such covered
financial company under this section, that are proven to the
satisfaction of the receiver shall have priority in the following
order:
(A) Administrative expenses of the receiver.
(B) Any amounts owed to the United States, unless
the United States agrees or consents otherwise.
(C) Wages, salaries, or commissions, including vacation, severance, and sick leave pay earned by an individual
(other than an individual described in subparagraph (G)),
but only to the extent of 11,725 for each individual (as
indexed for inflation, by regulation of the Corporation)

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124 STAT. 1476

earned not later than 180 days before the date of appointment of the Corporation as receiver.
(D) Contributions owed to employee benefit plans
arising from services rendered not later than 180 days
before the date of appointment of the Corporation as
receiver, to the extent of the number of employees covered
by each such plan, multiplied by 11,725 (as indexed for
inflation, by regulation of the Corporation), less the aggregate amount paid to such employees under subparagraph
(C), plus the aggregate amount paid by the receivership
on behalf of such employees to any other employee benefit
plan.
(E) Any other general or senior liability of the covered
financial company (which is not a liability described under
subparagraph (F), (G), or (H)).
(F) Any obligation subordinated to general creditors
(which is not an obligation described under subparagraph
(G) or (H)).
(G) Any wages, salaries, or commissions, including
vacation, severance, and sick leave pay earned, owed to
senior executives and directors of the covered financial
company.
(H) Any obligation to shareholders, members, general
partners, limited partners, or other persons, with interests
in the equity of the covered financial company arising
as a result of their status as shareholders, members, general partners, limited partners, or other persons with
interests in the equity of the covered financial company.
(2) POST-RECEIVERSHIP FINANCING PRIORITY.—In the event
that the Corporation, as receiver for a covered financial company, is unable to obtain unsecured credit for the covered
financial company from commercial sources, the Corporation
as receiver may obtain credit or incur debt on the part of
the covered financial company, which shall have priority over
any or all administrative expenses of the receiver under paragraph (1)(A).
(3) CLAIMS OF THE UNITED STATES.—Unsecured claims of
the United States shall, at a minimum, have a higher priority
than liabilities of the covered financial company that count
as regulatory capital.
(4) CREDITORS SIMILARLY SITUATED.—All claimants of a
covered financial company that are similarly situated under
paragraph (1) shall be treated in a similar manner, except
that the Corporation may take any action (including making
payments, subject to subsection (o)(1)(D)(i)) that does not
comply with this subsection, if—
(A) the Corporation determines that such action is
necessary—
(i) to maximize the value of the assets of the
covered financial company;
(ii) to initiate and continue operations essential
to implementation of the receivership or any bridge
financial company;
(iii) to maximize the present value return from
the sale or other disposition of the assets of the covered
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(iv) to minimize the amount of any loss realized
upon the sale or other disposition of the assets of
the covered financial company; and
(B) all claimants that are similarly situated under
paragraph (1) receive not less than the amount provided
in paragraphs (2) and (3) of subsection (d).
(5) SECURED CLAIMS UNAFFECTED.—This section shall not
affect secured claims or security entitlements in respect of
assets or property held by the covered financial company, except
to the extent that the security is insufficient to satisfy the
claim, and then only with regard to the difference between
the claim and the amount realized from the security.
(6) PRIORITY OF EXPENSES AND UNSECURED CLAIMS IN THE
ORDERLY LIQUIDATION OF SIPC MEMBER.—Where the Corporation
is appointed as receiver for a covered broker or dealer,
unsecured claims against such covered broker or dealer, or
the Corporation as receiver for such covered broker or dealer
under this section, that are proven to the satisfaction of the
receiver under section 205(e), shall have the priority prescribed
in paragraph (1), except that—
(A) SIPC shall be entitled to recover administrative
expenses incurred in performing its responsibilities under
section 205 on an equal basis with the Corporation, in
accordance with paragraph (1)(A);
(B) the Corporation shall be entitled to recover any
amounts paid to customers or to SIPC pursuant to section
205(f), in accordance with paragraph (1)(B);
(C) SIPC shall be entitled to recover any amounts
paid out of the SIPC Fund to meet its obligations under
section 205 and under the Securities Investor Protection
Act of 1970 (15 U.S.C. 78aaa et seq.), which claim shall
be subordinate to the claims payable under subparagraphs
(A) and (B) of paragraph (1), but senior to all other claims;
and
(D) the Corporation may, after paying any proven
claims to customers under section 205 and the Securities
Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.),
and as provided above, pay dividends on other proven
claims, in its discretion, and to the extent that funds are
available, in accordance with the priorities set forth in
paragraph (1).
(c) PROVISIONS RELATING TO CONTRACTS ENTERED INTO BEFORE
APPOINTMENT OF RECEIVER.—
(1) AUTHORITY TO REPUDIATE CONTRACTS.—In addition to
any other rights that a receiver may have, the Corporation
as receiver for any covered financial company may disaffirm
or repudiate any contract or lease—
(A) to which the covered financial company is a party;
(B) the performance of which the Corporation as
receiver, in the discretion of the Corporation, determines
to be burdensome; and
(C) the disaffirmance or repudiation of which the Corporation as receiver determines, in the discretion of the
Corporation, will promote the orderly administration of
the affairs of the covered financial company.
(2) TIMING OF REPUDIATION.—The Corporation, as receiver
for any covered financial company, shall determine whether

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PUBLIC LAW 111–203—JULY 21, 2010
or not to exercise the rights of repudiation under this section
within a reasonable period of time.
(3) CLAIMS FOR DAMAGES FOR REPUDIATION.—
(A) IN GENERAL.—Except as provided in paragraphs
(4), (5), and (6) and in subparagraphs (C), (D), and (E)
of this paragraph, the liability of the Corporation as
receiver for a covered financial company for the
disaffirmance or repudiation of any contract pursuant to
paragraph (1) shall be—
(i) limited to actual direct compensatory damages;
and
(ii) determined as of—
(I) the date of the appointment of the Corporation as receiver; or
(II) in the case of any contract or agreement
referred to in paragraph (8), the date of the
disaffirmance or repudiation of such contract or
agreement.
(B) NO LIABILITY FOR OTHER DAMAGES.—For purposes
of subparagraph (A), the term ‘‘actual direct compensatory
damages’’ does not include—
(i) punitive or exemplary damages;
(ii) damages for lost profits or opportunity; or
(iii) damages for pain and suffering.
(C) MEASURE OF DAMAGES FOR REPUDIATION OF QUALIFIED FINANCIAL CONTRACTS.—In the case of any qualified
financial contract or agreement to which paragraph (8)
applies, compensatory damages shall be—
(i) deemed to include normal and reasonable costs
of cover or other reasonable measures of damages utilized in the industries for such contract and agreement
claims; and
(ii) paid in accordance with this paragraph and
subsection (d), except as otherwise specifically provided
in this subsection.
(D) MEASURE OF DAMAGES FOR REPUDIATION OR
DISAFFIRMANCE OF DEBT OBLIGATION.—In the case of any
debt for borrowed money or evidenced by a security, actual
direct compensatory damages shall be no less than the
amount lent plus accrued interest plus any accreted
original issue discount as of the date the Corporation was
appointed receiver of the covered financial company and,
to the extent that an allowed secured claim is secured
by property the value of which is greater than the amount
of such claim and any accrued interest through the date
of repudiation or disaffirmance, such accrued interest
pursuant to paragraph (1).
(E) MEASURE OF DAMAGES FOR REPUDIATION OR
DISAFFIRMANCE OF CONTINGENT OBLIGATION.—In the case
of any contingent obligation of a covered financial company
consisting of any obligation under a guarantee, letter of
credit, loan commitment, or similar credit obligation, the
Corporation may, by rule or regulation, prescribe that
actual direct compensatory damages shall be no less than
the estimated value of the claim as of the date the Corporation was appointed receiver of the covered financial company, as such value is measured based on the likelihood

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that such contingent claim would become fixed and the
probable magnitude thereof.
(4) LEASES UNDER WHICH THE COVERED FINANCIAL COMPANY
IS THE LESSEE.—
(A) IN GENERAL.—If the Corporation as receiver disaffirms or repudiates a lease under which the covered
financial company is the lessee, the receiver shall not be
liable for any damages (other than damages determined
pursuant to subparagraph (B)) for the disaffirmance or
repudiation of such lease.
(B) PAYMENTS OF RENT.—Notwithstanding subparagraph (A), the lessor under a lease to which subparagraph
(A) would otherwise apply shall—
(i) be entitled to the contractual rent accruing
before the later of the date on which—
(I) the notice of disaffirmance or repudiation
is mailed; or
(II) the disaffirmance or repudiation becomes
effective, unless the lessor is in default or breach
of the terms of the lease;
(ii) have no claim for damages under any acceleration clause or other penalty provision in the lease;
and
(iii) have a claim for any unpaid rent, subject
to all appropriate offsets and defenses, due as of the
date of the appointment which shall be paid in accordance with this paragraph and subsection (d).
(5) LEASES UNDER WHICH THE COVERED FINANCIAL COMPANY
IS THE LESSOR.—
(A) IN GENERAL.—If the Corporation as receiver for
a covered financial company repudiates an unexpired written lease of real property of the covered financial company
under which the covered financial company is the lessor
and the lessee is not, as of the date of such repudiation,
in default, the lessee under such lease may either—
(i) treat the lease as terminated by such repudiation; or
(ii) remain in possession of the leasehold interest
for the balance of the term of the lease, unless the
lessee defaults under the terms of the lease after the
date of such repudiation.
(B) PROVISIONS APPLICABLE TO LESSEE REMAINING IN
POSSESSION.—If any lessee under a lease described in
subparagraph (A) remains in possession of a leasehold
interest pursuant to clause (ii) of subparagraph (A)—
(i) the lessee—
(I) shall continue to pay the contractual rent
pursuant to the terms of the lease after the date
of the repudiation of such lease; and
(II) may offset against any rent payment which
accrues after the date of the repudiation of the
lease, any damages which accrue after such date
due to the nonperformance of any obligation of
the covered financial company under the lease
after such date; and
(ii) the Corporation as receiver shall not be liable
to the lessee for any damages arising after such date

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as a result of the repudiation, other than the amount
of any offset allowed under clause (i)(II).
(6) CONTRACTS FOR THE SALE OF REAL PROPERTY.—
(A) IN GENERAL.—If the receiver repudiates any contract (which meets the requirements of subsection (a)(6))
for the sale of real property, and the purchaser of such
real property under such contract is in possession and
is not, as of the date of such repudiation, in default, such
purchaser may either—
(i) treat the contract as terminated by such repudiation; or
(ii) remain in possession of such real property.
(B) PROVISIONS APPLICABLE TO PURCHASER REMAINING
IN POSSESSION.—If any purchaser of real property under
any contract described in subparagraph (A) remains in
possession of such property pursuant to clause (ii) of
subparagraph (A)—
(i) the purchaser—
(I) shall continue to make all payments due
under the contract after the date of the repudiation
of the contract; and
(II) may offset against any such payments any
damages which accrue after such date due to the
nonperformance (after such date) of any obligation
of the covered financial company under the contract; and
(ii) the Corporation as receiver shall—
(I) not be liable to the purchaser for any damages arising after such date as a result of the
repudiation, other than the amount of any offset
allowed under clause (i)(II);
(II) deliver title to the purchaser in accordance
with the provisions of the contract; and
(III) have no obligation under the contract
other than the performance required under subclause (II).
(C) ASSIGNMENT AND SALE ALLOWED.—
(i) IN GENERAL.—No provision of this paragraph
shall be construed as limiting the right of the Corporation as receiver to assign the contract described in
subparagraph (A) and sell the property, subject to the
contract and the provisions of this paragraph.
(ii) NO LIABILITY AFTER ASSIGNMENT AND SALE.—
If an assignment and sale described in clause (i) is
consummated, the Corporation as receiver shall have
no further liability under the contract described in
subparagraph (A) or with respect to the real property
which was the subject of such contract.
(7) PROVISIONS APPLICABLE TO SERVICE CONTRACTS.—
(A) SERVICES PERFORMED BEFORE APPOINTMENT.—In
the case of any contract for services between any person
and any covered financial company for which the Corporation has been appointed receiver, any claim of such person
for services performed before the date of appointment shall
be—
(i) a claim to be paid in accordance with subsections (a), (b), and (d); and

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(ii) deemed to have arisen as of the date on which
the receiver was appointed.
(B) SERVICES PERFORMED AFTER APPOINTMENT AND
PRIOR TO REPUDIATION.—If, in the case of any contract
for services described in subparagraph (A), the Corporation
as receiver accepts performance by the other person before
making any determination to exercise the right of repudiation of such contract under this section—
(i) the other party shall be paid under the terms
of the contract for the services performed; and
(ii) the amount of such payment shall be treated
as an administrative expense of the receivership.
(C) ACCEPTANCE OF PERFORMANCE NO BAR TO SUBSEQUENT REPUDIATION.—The acceptance by the Corporation
as receiver for services referred to in subparagraph (B)
in connection with a contract described in subparagraph
(B) shall not affect the right of the Corporation as receiver
to repudiate such contract under this section at any time
after such performance.
(8) CERTAIN QUALIFIED FINANCIAL CONTRACTS.—
(A) RIGHTS OF PARTIES TO CONTRACTS.—Subject to subsection (a)(8) and paragraphs (9) and (10) of this subsection,
and notwithstanding any other provision of this section,
any other provision of Federal law, or the law of any
State, no person shall be stayed or prohibited from exercising—
(i) any right that such person has to cause the
termination, liquidation, or acceleration of any qualified financial contract with a covered financial company
which arises upon the date of appointment of the Corporation as receiver for such covered financial company
or at any time after such appointment;
(ii) any right under any security agreement or
arrangement or other credit enhancement related to
one or more qualified financial contracts described in
clause (i); or
(iii) any right to offset or net out any termination
value, payment amount, or other transfer obligation
arising under or in connection with 1 or more contracts
or agreements described in clause (i), including any
master agreement for such contracts or agreements.
(B) APPLICABILITY OF OTHER PROVISIONS.—Subsection
(a)(8) shall apply in the case of any judicial action or
proceeding brought against the Corporation as receiver
referred to in subparagraph (A), or the subject covered
financial company, by any party to a contract or agreement
described in subparagraph (A)(i) with such covered financial company.
(C) CERTAIN TRANSFERS NOT AVOIDABLE.—
(i) IN GENERAL.—Notwithstanding subsection
(a)(11), (a)(12), or (c)(12), section 5242 of the Revised
Statutes of the United States, or any other provision
of Federal or State law relating to the avoidance of
preferential or fraudulent transfers, the Corporation,
whether acting as the Corporation or as receiver for
a covered financial company, may not avoid any
transfer of money or other property in connection with

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any qualified financial contract with a covered financial
company.
(ii) EXCEPTION FOR CERTAIN TRANSFERS.—Clause
(i) shall not apply to any transfer of money or other
property in connection with any qualified financial contract with a covered financial company if the transferee
had actual intent to hinder, delay, or defraud such
company, the creditors of such company, or the Corporation as receiver appointed for such company.
(D) CERTAIN CONTRACTS AND AGREEMENTS DEFINED.—
For purposes of this subsection, the following definitions
shall apply:
(i) QUALIFIED FINANCIAL CONTRACT.—The term
‘‘qualified financial contract’’ means any securities contract, commodity contract, forward contract, repurchase
agreement, swap agreement, and any similar agreement that the Corporation determines by regulation,
resolution, or order to be a qualified financial contract
for purposes of this paragraph.
(ii) SECURITIES CONTRACT.—The term ‘‘securities
contract’’—
(I) means a contract for the purchase, sale,
or loan of a security, a certificate of deposit, a
mortgage loan, any interest in a mortgage loan,
a group or index of securities, certificates of
deposit, or mortgage loans or interests therein
(including any interest therein or based on the
value thereof), or any option on any of the foregoing, including any option to purchase or sell
any such security, certificate of deposit, mortgage
loan, interest, group or index, or option, and
including any repurchase or reverse repurchase
transaction on any such security, certificate of
deposit, mortgage loan, interest, group or index,
or option (whether or not such repurchase or
reverse repurchase transaction is a ‘‘repurchase
agreement’’, as defined in clause (v));
(II) does not include any purchase, sale, or
repurchase obligation under a participation in a
commercial mortgage loan unless the Corporation
determines by regulation, resolution, or order to
include any such agreement within the meaning
of such term;
(III) means any option entered into on a
national securities exchange relating to foreign
currencies;
(IV) means the guarantee (including by novation) by or to any securities clearing agency of
any settlement of cash, securities, certificates of
deposit, mortgage loans or interests therein, group
or index of securities, certificates of deposit or
mortgage loans or interests therein (including any
interest therein or based on the value thereof)
or an option on any of the foregoing, including
any option to purchase or sell any such security,
certificate of deposit, mortgage loan, interest,
group or index, or option (whether or not such

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settlement is in connection with any agreement
or transaction referred to in subclauses (I) through
(XII) (other than subclause (II)));
(V) means any margin loan;
(VI) means any extension of credit for the
clearance or settlement of securities transactions;
(VII) means any loan transaction coupled with
a securities collar transaction, any prepaid securities forward transaction, or any total return swap
transaction coupled with a securities sale transaction;
(VIII) means any other agreement or transaction that is similar to any agreement or transaction referred to in this clause;
(IX) means any combination of the agreements
or transactions referred to in this clause;
(X) means any option to enter into any agreement or transaction referred to in this clause;
(XI) means a master agreement that provides
for an agreement or transaction referred to in any
of subclauses (I) through (X), other than subclause
(II), together with all supplements to any such
master agreement, without regard to whether the
master agreement provides for an agreement or
transaction that is not a securities contract under
this clause, except that the master agreement shall
be considered to be a securities contract under
this clause only with respect to each agreement
or transaction under the master agreement that
is referred to in any of subclauses (I) through
(X), other than subclause (II); and
(XII) means any security agreement or
arrangement or other credit enhancement related
to any agreement or transaction referred to in
this clause, including any guarantee or reimbursement obligation in connection with any agreement
or transaction referred to in this clause.
(iii) COMMODITY CONTRACT.—The term ‘‘commodity
contract’’ means—
(I) with respect to a futures commission merchant, a contract for the purchase or sale of a
commodity for future delivery on, or subject to
the rules of, a contract market or board of trade;
(II) with respect to a foreign futures commission merchant, a foreign future;
(III) with respect to a leverage transaction
merchant, a leverage transaction;
(IV) with respect to a clearing organization,
a contract for the purchase or sale of a commodity
for future delivery on, or subject to the rules of,
a contract market or board of trade that is cleared
by such clearing organization, or commodity option
traded on, or subject to the rules of, a contract
market or board of trade that is cleared by such
clearing organization;
(V) with respect to a commodity options dealer,
a commodity option;

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(VI) any other agreement or transaction that
is similar to any agreement or transaction referred
to in this clause;
(VII) any combination of the agreements or
transactions referred to in this clause;
(VIII) any option to enter into any agreement
or transaction referred to in this clause;
(IX) a master agreement that provides for an
agreement or transaction referred to in any of
subclauses (I) through (VIII), together with all
supplements to any such master agreement, without regard to whether the master agreement provides for an agreement or transaction that is not
a commodity contract under this clause, except
that the master agreement shall be considered
to be a commodity contract under this clause only
with respect to each agreement or transaction
under the master agreement that is referred to
in any of subclauses (I) through (VIII); or
(X) any security agreement or arrangement
or other credit enhancement related to any agreement or transaction referred to in this clause,
including any guarantee or reimbursement obligation in connection with any agreement or transaction referred to in this clause.
(iv) FORWARD CONTRACT.—The term ‘‘forward contract’’ means—
(I) a contract (other than a commodity contract) for the purchase, sale, or transfer of a commodity or any similar good, article, service, right,
or interest which is presently or in the future
becomes the subject of dealing in the forward contract trade, or product or byproduct thereof, with
a maturity date that is more than 2 days after
the date on which the contract is entered into,
including a repurchase or reverse repurchase
transaction (whether or not such repurchase or
reverse repurchase transaction is a ‘‘repurchase
agreement’’, as defined in clause (v)), consignment,
lease, swap, hedge transaction, deposit, loan,
option, allocated transaction, unallocated transaction, or any other similar agreement;
(II) any combination of agreements or transactions referred to in subclauses (I) and (III);
(III) any option to enter into any agreement
or transaction referred to in subclause (I) or (II);
(IV) a master agreement that provides for an
agreement or transaction referred to in subclause
(I), (II), or (III), together with all supplements
to any such master agreement, without regard to
whether the master agreement provides for an
agreement or transaction that is not a forward
contract under this clause, except that the master
agreement shall be considered to be a forward
contract under this clause only with respect to
each agreement or transaction under the master

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agreement that is referred to in subclause (I), (II),
or (III); or
(V) any security agreement or arrangement
or other credit enhancement related to any agreement or transaction referred to in subclause (I),
(II), (III), or (IV), including any guarantee or
reimbursement obligation in connection with any
agreement or transaction referred to in any such
subclause.
AGREEMENT.—The
term
(v)
REPURCHASE
‘‘repurchase agreement’’ (which definition also applies
to a reverse repurchase agreement)—
(I) means an agreement, including related
terms, which provides for the transfer of one or
more certificates of deposit, mortgage related securities (as such term is defined in section 3 of the
Securities Exchange Act of 1934), mortgage loans,
interests in mortgage-related securities or mortgage loans, eligible bankers’ acceptances, qualified
foreign government securities (which, for purposes
of this clause, means a security that is a direct
obligation of, or that is fully guaranteed by, the
central government of a member of the Organization for Economic Cooperation and Development,
as determined by regulation or order adopted by
the Board of Governors), or securities that are
direct obligations of, or that are fully guaranteed
by, the United States or any agency of the United
States against the transfer of funds by the transferee of such certificates of deposit, eligible
bankers’ acceptances, securities, mortgage loans,
or interests with a simultaneous agreement by
such transferee to transfer to the transferor thereof
certificates of deposit, eligible bankers’ acceptances, securities, mortgage loans, or interests as
described above, at a date certain not later than
1 year after such transfers or on demand, against
the transfer of funds, or any other similar agreement;
(II) does not include any repurchase obligation
under a participation in a commercial mortgage
loan, unless the Corporation determines, by regulation, resolution, or order to include any such
participation within the meaning of such term;
(III) means any combination of agreements
or transactions referred to in subclauses (I) and
(IV);
(IV) means any option to enter into any agreement or transaction referred to in subclause (I)
or (III);
(V) means a master agreement that provides
for an agreement or transaction referred to in subclause (I), (III), or (IV), together with all supplements to any such master agreement, without
regard to whether the master agreement provides
for an agreement or transaction that is not a
repurchase agreement under this clause, except

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that the master agreement shall be considered
to be a repurchase agreement under this subclause
only with respect to each agreement or transaction
under the master agreement that is referred to
in subclause (I), (III), or (IV); and
(VI) means any security agreement or arrangement or other credit enhancement related to any
agreement or transaction referred to in subclause
(I), (III), (IV), or (V), including any guarantee or
reimbursement obligation in connection with any
agreement or transaction referred to in any such
subclause.
(vi) SWAP AGREEMENT.—The term ‘‘swap agreement’’ means—
(I) any agreement, including the terms and
conditions incorporated by reference in any such
agreement, which is an interest rate swap, option,
future, or forward agreement, including a rate
floor, rate cap, rate collar, cross-currency rate
swap, and basis swap; a spot, same day-tomorrow,
tomorrow-next, forward, or other foreign exchange,
precious metals, or other commodity agreement;
a currency swap, option, future, or forward agreement; an equity index or equity swap, option,
future, or forward agreement; a debt index or debt
swap, option, future, or forward agreement; a total
return, credit spread or credit swap, option, future,
or forward agreement; a commodity index or commodity swap, option, future, or forward agreement;
weather swap, option, future, or forward agreement; an emissions swap, option, future, or forward agreement; or an inflation swap, option,
future, or forward agreement;
(II) any agreement or transaction that is
similar to any other agreement or transaction
referred to in this clause and that is of a type
that has been, is presently, or in the future
becomes, the subject of recurrent dealings in the
swap or other derivatives markets (including terms
and conditions incorporated by reference in such
agreement) and that is a forward, swap, future,
option, or spot transaction on one or more rates,
currencies, commodities, equity securities or other
equity instruments, debt securities or other debt
instruments, quantitative measures associated
with an occurrence, extent of an occurrence, or
contingency associated with a financial, commercial, or economic consequence, or economic or
financial indices or measures of economic or financial risk or value;
(III) any combination of agreements or transactions referred to in this clause;
(IV) any option to enter into any agreement
or transaction referred to in this clause;
(V) a master agreement that provides for an
agreement or transaction referred to in subclause
(I), (II), (III), or (IV), together with all supplements

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to any such master agreement, without regard to
whether the master agreement contains an agreement or transaction that is not a swap agreement
under this clause, except that the master agreement shall be considered to be a swap agreement
under this clause only with respect to each agreement or transaction under the master agreement
that is referred to in subclause (I), (II), (III), or
(IV); and
(VI) any security agreement or arrangement
or other credit enhancement related to any agreement or transaction referred to in any of subclauses (I) through (V), including any guarantee
or reimbursement obligation in connection with
any agreement or transaction referred to in any
such clause.
(vii) DEFINITIONS RELATING TO DEFAULT.—When
used in this paragraph and paragraphs (9) and (10)—
(I) the term ‘‘default’’ means, with respect to
a covered financial company, any adjudication or
other official decision by any court of competent
jurisdiction, or other public authority pursuant to
which the Corporation has been appointed
receiver; and
(II) the term ‘‘in danger of default’’ means
a covered financial company with respect to which
the Corporation or appropriate State authority has
determined that—
(aa) in the opinion of the Corporation or
such authority—
(AA) the covered financial company
is not likely to be able to pay its obligations in the normal course of business;
and
(BB) there is no reasonable prospect
that the covered financial company will
be able to pay such obligations without
Federal assistance; or
(bb) in the opinion of the Corporation or
such authority—
(AA) the covered financial company
has incurred or is likely to incur losses
that will deplete all or substantially all
of its capital; and
(BB) there is no reasonable prospect
that the capital will be replenished without Federal assistance.
(viii) TREATMENT OF MASTER AGREEMENT AS ONE
AGREEMENT.—Any master agreement for any contract
or agreement described in any of clauses (i) through
(vi) (or any master agreement for such master agreement or agreements), together with all supplements
to such master agreement, shall be treated as a single
agreement and a single qualified financial contact. If
a master agreement contains provisions relating to
agreements or transactions that are not themselves
qualified financial contracts, the master agreement

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124 STAT. 1488

shall be deemed to be a qualified financial contract
only with respect to those transactions that are themselves qualified financial contracts.
(ix) TRANSFER.—The term ‘‘transfer’’ means every
mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with
property or with an interest in property, including
retention of title as a security interest and foreclosure
of the equity of redemption of the covered financial
company.
(x) PERSON.—The term ‘‘person’’ includes any
governmental entity in addition to any entity included
in the definition of such term in section 1, title 1,
United States Code.
(E) CLARIFICATION.—No provision of law shall be construed as limiting the right or power of the Corporation,
or authorizing any court or agency to limit or delay, in
any manner, the right or power of the Corporation to
transfer any qualified financial contract or to disaffirm
or repudiate any such contract in accordance with this
subsection.
(F) WALKAWAY CLAUSES NOT EFFECTIVE.—
(i) IN GENERAL.—Notwithstanding the provisions
of subparagraph (A) of this paragraph and sections
403 and 404 of the Federal Deposit Insurance Corporation Improvement Act of 1991, no walkaway clause
shall be enforceable in a qualified financial contract
of a covered financial company in default.
(ii) LIMITED SUSPENSION OF CERTAIN OBLIGATIONS.—In the case of a qualified financial contract
referred to in clause (i), any payment or delivery obligations otherwise due from a party pursuant to the qualified financial contract shall be suspended from the
time at which the Corporation is appointed as receiver
until the earlier of—
(I) the time at which such party receives notice
that such contract has been transferred pursuant
to paragraph (10)(A); or
(II) 5:00 p.m. (eastern time) on the business
day following the date of the appointment of the
Corporation as receiver.
(iii) WALKAWAY CLAUSE DEFINED.—For purposes
of this subparagraph, the term ‘‘walkaway clause’’
means any provision in a qualified financial contract
that suspends, conditions, or extinguishes a payment
obligation of a party, in whole or in part, or does
not create a payment obligation of a party that would
otherwise exist, solely because of the status of such
party as a nondefaulting party in connection with the
insolvency of a covered financial company that is a
party to the contract or the appointment of or the
exercise of rights or powers by the Corporation as
receiver for such covered financial company, and not
as a result of the exercise by a party of any right
to offset, setoff, or net obligations that exist under
the contract, any other contract between those parties,
or applicable law.

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(G) CERTAIN OBLIGATIONS TO CLEARING ORGANIZAthe event that the Corporation has been
appointed as receiver for a covered financial company which
is a party to any qualified financial contract cleared by
or subject to the rules of a clearing organization (as defined
in paragraph (9)(D)), the receiver shall use its best efforts
to meet all margin, collateral, and settlement obligations
of the covered financial company that arise under qualified
financial contracts (other than any margin, collateral, or
settlement obligation that is not enforceable against the
receiver under paragraph (8)(F)(i) or paragraph (10)(B)),
as required by the rules of the clearing organization when
due. Notwithstanding any other provision of this title, if
the receiver fails to satisfy any such margin, collateral,
or settlement obligations under the rules of the clearing
organization, the clearing organization shall have the
immediate right to exercise, and shall not be stayed from
exercising, all of its rights and remedies under its rules
and applicable law with respect to any qualified financial
contract of the covered financial company, including, without limitation, the right to liquidate all positions and collateral of such covered financial company under the company’s
qualified financial contracts, and suspend or cease to act
for such covered financial company, all in accordance with
the rules of the clearing organization.
(H) RECORDKEEPING.—
(i) JOINT RULEMAKING.—The Federal primary
financial regulatory agencies shall jointly prescribe
regulations requiring that financial companies maintain such records with respect to qualified financial
contracts (including market valuations) that the Federal primary financial regulatory agencies determine
to be necessary or appropriate in order to assist the
Corporation as receiver for a covered financial company
in being able to exercise its rights and fulfill its obligations under this paragraph or paragraph (9) or (10).
(ii) TIME FRAME.—The Federal primary financial
regulatory agencies shall prescribe joint final or
interim final regulations not later than 24 months
after the date of enactment of this Act.
(iii) BACK-UP RULEMAKING AUTHORITY.—If the Federal primary financial regulatory agencies do not prescribe joint final or interim final regulations within
the time frame in clause (ii), the Chairperson of the
Council shall prescribe, in consultation with the Corporation, the regulations required by clause (i).
(iv) CATEGORIZATION AND TIERING.—The joint regulations prescribed under clause (i) shall, as appropriate,
differentiate among financial companies by taking into
consideration their size, risk, complexity, leverage, frequency and dollar amount of qualified financial contracts, interconnectedness to the financial system, and
any other factors deemed appropriate.
(9) TRANSFER OF QUALIFIED FINANCIAL CONTRACTS.—
(A) IN GENERAL.—In making any transfer of assets
or liabilities of a covered financial company in default,

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which includes any qualified financial contract, the Corporation as receiver for such covered financial company
shall either—
(i) transfer to one financial institution, other than
a financial institution for which a conservator, receiver,
trustee in bankruptcy, or other legal custodian has
been appointed or which is otherwise the subject of
a bankruptcy or insolvency proceeding—
(I) all qualified financial contracts between
any person or any affiliate of such person and
the covered financial company in default;
(II) all claims of such person or any affiliate
of such person against such covered financial company under any such contract (other than any
claim which, under the terms of any such contract,
is subordinated to the claims of general unsecured
creditors of such company);
(III) all claims of such covered financial company against such person or any affiliate of such
person under any such contract; and
(IV) all property securing or any other credit
enhancement for any contract described in subclause (I) or any claim described in subclause (II)
or (III) under any such contract; or
(ii) transfer none of the qualified financial contracts, claims, property or other credit enhancement
referred to in clause (i) (with respect to such person
and any affiliate of such person).
(B) TRANSFER TO FOREIGN BANK, FINANCIAL INSTITUTION, OR BRANCH OR AGENCY THEREOF.—In transferring
any qualified financial contracts and related claims and
property under subparagraph (A)(i), the Corporation as
receiver for the covered financial company shall not make
such transfer to a foreign bank, financial institution organized under the laws of a foreign country, or a branch
or agency of a foreign bank or financial institution unless,
under the law applicable to such bank, financial institution,
branch or agency, to the qualified financial contracts, and
to any netting contract, any security agreement or arrangement or other credit enhancement related to one or more
qualified financial contracts, the contractual rights of the
parties to such qualified financial contracts, netting contracts, security agreements or arrangements, or other credit
enhancements are enforceable substantially to the same
extent as permitted under this section.
(C) TRANSFER OF CONTRACTS SUBJECT TO THE RULES
OF A CLEARING ORGANIZATION.—In the event that the Corporation as receiver for a financial institution transfers
any qualified financial contract and related claims, property, or credit enhancement pursuant to subparagraph
(A)(i) and such contract is cleared by or subject to the
rules of a clearing organization, the clearing organization
shall not be required to accept the transferee as a member
by virtue of the transfer.
(D) DEFINITIONS.—For purposes of this paragraph—

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(i) the term ‘‘financial institution’’ means a broker
or dealer, a depository institution, a futures commission merchant, a bridge financial company, or any
other institution determined by the Corporation, by
regulation, to be a financial institution; and
(ii) the term ‘‘clearing organization’’ has the same
meaning as in section 402 of the Federal Deposit Insurance Corporation Improvement Act of 1991.
(10) NOTIFICATION OF TRANSFER.—
(A) IN GENERAL.—
(i) NOTICE.—The Corporation shall provide notice
in accordance with clause (ii), if—
(I) the Corporation as receiver for a covered
financial company in default or in danger of default
transfers any assets or liabilities of the covered
financial company; and
(II) the transfer includes any qualified financial contract.
(ii) TIMING.—The Corporation as receiver for a covered financial company shall notify any person who
is a party to any contract described in clause (i) of
such transfer not later than 5:00 p.m. (eastern time)
on the business day following the date of the appointment of the Corporation as receiver.
(B) CERTAIN RIGHTS NOT ENFORCEABLE.—
(i) RECEIVERSHIP.—A person who is a party to
a qualified financial contract with a covered financial
company may not exercise any right that such person
has to terminate, liquidate, or net such contract under
paragraph (8)(A) solely by reason of or incidental to
the appointment under this section of the Corporation
as receiver for the covered financial company (or the
insolvency or financial condition of the covered financial company for which the Corporation has been
appointed as receiver)—
(I) until 5:00 p.m. (eastern time) on the business day following the date of the appointment;
or
(II) after the person has received notice that
the contract has been transferred pursuant to
paragraph (9)(A).
(ii) NOTICE.—For purposes of this paragraph, the
Corporation as receiver for a covered financial company
shall be deemed to have notified a person who is a
party to a qualified financial contract with such covered
financial company, if the Corporation has taken steps
reasonably calculated to provide notice to such person
by the time specified in subparagraph (A).
(C) TREATMENT OF BRIDGE FINANCIAL COMPANY.—For
purposes of paragraph (9), a bridge financial company shall
not be considered to be a financial institution for which
a conservator, receiver, trustee in bankruptcy, or other
legal custodian has been appointed, or which is otherwise
the subject of a bankruptcy or insolvency proceeding.
(D) BUSINESS DAY DEFINED.—For purposes of this paragraph, the term ‘‘business day’’ means any day other than
any Saturday, Sunday, or any day on which either the

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New York Stock Exchange or the Federal Reserve Bank
of New York is closed.
(11) DISAFFIRMANCE OR REPUDIATION OF QUALIFIED FINANCIAL CONTRACTS.—In exercising the rights of disaffirmance or
repudiation of the Corporation as receiver with respect to any
qualified financial contract to which a covered financial company is a party, the Corporation shall either—
(A) disaffirm or repudiate all qualified financial contracts between—
(i) any person or any affiliate of such person; and
(ii) the covered financial company in default; or
(B) disaffirm or repudiate none of the qualified financial contracts referred to in subparagraph (A) (with respect
to such person or any affiliate of such person).
(12) CERTAIN SECURITY AND CUSTOMER INTERESTS NOT
AVOIDABLE.—No provision of this subsection shall be construed
as permitting the avoidance of any—
(A) legally enforceable or perfected security interest
in any of the assets of any covered financial company,
except in accordance with subsection (a)(11); or
(B) legally enforceable interest in customer property,
security entitlements in respect of assets or property held
by the covered financial company for any security entitlement holder.
(13) AUTHORITY TO ENFORCE CONTRACTS.—
(A) IN GENERAL.—The Corporation, as receiver for a
covered financial company, may enforce any contract, other
than a liability insurance contract of a director or officer,
a financial institution bond entered into by the covered
financial company, notwithstanding any provision of the
contract providing for termination, default, acceleration,
or exercise of rights upon, or solely by reason of, insolvency,
the appointment of or the exercise of rights or powers
by the Corporation as receiver, the filing of the petition
pursuant to section 202(a)(1), or the issuance of the recommendations or determination, or any actions or events
occurring in connection therewith or as a result thereof,
pursuant to section 203.
(B) CERTAIN RIGHTS NOT AFFECTED.—No provision of
this paragraph may be construed as impairing or affecting
any right of the Corporation as receiver to enforce or
recover under a liability insurance contract of a director
or officer or financial institution bond under other
applicable law.
(C) CONSENT REQUIREMENT AND IPSO FACTO CLAUSES.—
(i) IN GENERAL.—Except as otherwise provided by
this section, no person may exercise any right or power
to terminate, accelerate, or declare a default under
any contract to which the covered financial company
is a party (and no provision in any such contract providing for such default, termination, or acceleration
shall be enforceable), or to obtain possession of or
exercise control over any property of the covered financial company or affect any contractual rights of the
covered financial company, without the consent of the

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124 STAT. 1493

Corporation as receiver for the covered financial company during the 90 day period beginning from the
appointment of the Corporation as receiver.
(ii) EXCEPTIONS.—No provision of this subparagraph shall apply to a director or officer liability insurance contract or a financial institution bond, to the
rights of parties to certain qualified financial contracts
pursuant to paragraph (8), or to the rights of parties
to netting contracts pursuant to subtitle A of title
IV of the Federal Deposit Insurance Corporation
Improvement Act of 1991 (12 U.S.C. 4401 et seq.),
or shall be construed as permitting the Corporation
as receiver to fail to comply with otherwise enforceable
provisions of such contract.
(D) CONTRACTS TO EXTEND CREDIT.—Notwithstanding
any other provision in this title, if the Corporation as
receiver enforces any contract to extend credit to the covered financial company or bridge financial company, any
valid and enforceable obligation to repay such debt shall
be paid by the Corporation as receiver, as an administrative
expense of the receivership.
(14) EXCEPTION FOR FEDERAL RESERVE BANKS AND CORPORATION SECURITY INTEREST.—No provision of this subsection shall
apply with respect to—
(A) any extension of credit from any Federal reserve
bank or the Corporation to any covered financial company;
or
(B) any security interest in the assets of the covered
financial company securing any such extension of credit.
(15) SAVINGS CLAUSE.—The meanings of terms used in
this subsection are applicable for purposes of this subsection
only, and shall not be construed or applied so as to challenge
or affect the characterization, definition, or treatment of any
similar terms under any other statute, regulation, or rule,
including the Gramm-Leach-Bliley Act, the Legal Certainty
for Bank Products Act of 2000, the securities laws (as that
term is defined in section 3(a)(47) of the Securities Exchange
Act of 1934), and the Commodity Exchange Act.
(16) ENFORCEMENT OF CONTRACTS GUARANTEED BY THE COVERED FINANCIAL COMPANY.—
(A) IN GENERAL.—The Corporation, as receiver for a
covered financial company or as receiver for a subsidiary
of a covered financial company (including an insured
depository institution) shall have the power to enforce contracts of subsidiaries or affiliates of the covered financial
company, the obligations under which are guaranteed or
otherwise supported by or linked to the covered financial
company, notwithstanding any contractual right to cause
the termination, liquidation, or acceleration of such contracts based solely on the insolvency, financial condition,
or receivership of the covered financial company, if—
(i) such guaranty or other support and all related
assets and liabilities are transferred to and assumed
by a bridge financial company or a third party (other
than a third party for which a conservator, receiver,
trustee in bankruptcy, or other legal custodian has
been appointed, or which is otherwise the subject of

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a bankruptcy or insolvency proceeding) within the
same period of time as the Corporation is entitled
to transfer the qualified financial contracts of such
covered financial company; or
(ii) the Corporation, as receiver, otherwise provides
adequate protection with respect to such obligations.
(B) RULE OF CONSTRUCTION.—For purposes of this
paragraph, a bridge financial company shall not be considered to be a third party for which a conservator, receiver,
trustee in bankruptcy, or other legal custodian has been
appointed, or which is otherwise the subject of a bankruptcy
or insolvency proceeding.
(d) VALUATION OF CLAIMS IN DEFAULT.—
(1) IN GENERAL.—Notwithstanding any other provision of
Federal law or the law of any State, and regardless of the
method utilized by the Corporation for a covered financial company, including transactions authorized under subsection (h),
this subsection shall govern the rights of the creditors of any
such covered financial company.
(2) MAXIMUM LIABILITY.—The maximum liability of the Corporation, acting as receiver for a covered financial company
or in any other capacity, to any person having a claim against
the Corporation as receiver or the covered financial company
for which the Corporation is appointed shall equal the amount
that such claimant would have received if—
(A) the Corporation had not been appointed receiver
with respect to the covered financial company; and
(B) the covered financial company had been liquidated
under chapter 7 of the Bankruptcy Code, or any similar
provision of State insolvency law applicable to the covered
financial company.
(3) SPECIAL PROVISION FOR ORDERLY LIQUIDATION BY SIPC.—
The maximum liability of the Corporation, acting as receiver
or in its corporate capacity for any covered broker or dealer
to any customer of such covered broker or dealer, with respect
to customer property of such customer, shall be—
(A) equal to the amount that such customer would
have received with respect to such customer property in
a case initiated by SIPC under the Securities Investor
Protection Act of 1970 (15 U.S.C. 78aaa et seq.); and
(B) determined as of the close of business on the date
on which the Corporation is appointed as receiver.
(4) ADDITIONAL PAYMENTS AUTHORIZED.—
(A) IN GENERAL.—Subject to subsection (o)(1)(D)(i), the
Corporation, with the approval of the Secretary, may make
additional payments or credit additional amounts to or
with respect to or for the account of any claimant or category of claimants of the covered financial company, if
the Corporation determines that such payments or credits
are necessary or appropriate to minimize losses to the
Corporation as receiver from the orderly liquidation of the
covered financial company under this section.
(B) LIMITATIONS.—
(i) PROHIBITION.—The Corporation shall not make
any payments or credit amounts to any claimant or
category of claimants that would result in any claimant
receiving more than the face value amount of any

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124 STAT. 1495

claim that is proven to the satisfaction of the Corporation.
(ii) NO OBLIGATION.—Notwithstanding any other
provision of Federal or State law, or the Constitution
of any State, the Corporation shall not be obligated,
as a result of having made any payment under
subparagraph (A) or credited any amount described
in subparagraph (A) to or with respect to, or for the
account, of any claimant or category of claimants, to
make payments to any other claimant or category of
claimants.
(C) MANNER OF PAYMENT.—The Corporation may make
payments or credit amounts under subparagraph (A)
directly to the claimants or may make such payments
or credit such amounts to a company other than a covered
financial company or a bridge financial company established with respect thereto in order to induce such other
company to accept liability for such claims.
(e) LIMITATION ON COURT ACTION.—Except as provided in this
title, no court may take any action to restrain or affect the exercise
of powers or functions of the receiver hereunder, and any remedy
against the Corporation or receiver shall be limited to money damages determined in accordance with this title.
(f) LIABILITY OF DIRECTORS AND OFFICERS.—
(1) IN GENERAL.—A director or officer of a covered financial
company may be held personally liable for monetary damages
in any civil action described in paragraph (2) by, on behalf
of, or at the request or direction of the Corporation, which
action is prosecuted wholly or partially for the benefit of the
Corporation—
(A) acting as receiver for such covered financial company;
(B) acting based upon a suit, claim, or cause of action
purchased from, assigned by, or otherwise conveyed by
the Corporation as receiver; or
(C) acting based upon a suit, claim, or cause of action
purchased from, assigned by, or otherwise conveyed in
whole or in part by a covered financial company or its
affiliate in connection with assistance provided under this
title.
(2) ACTIONS COVERED.—Paragraph (1) shall apply with
respect to actions for gross negligence, including any similar
conduct or conduct that demonstrates a greater disregard of
a duty of care (than gross negligence) including intentional
tortious conduct, as such terms are defined and determined
under applicable State law.
(3) SAVINGS CLAUSE.—Nothing in this subsection shall
impair or affect any right of the Corporation under other
applicable law.
(g) DAMAGES.—In any proceeding related to any claim against
a director, officer, employee, agent, attorney, accountant, or
appraiser of a covered financial company, or any other party
employed by or providing services to a covered financial company,
recoverable damages determined to result from the improvident
or otherwise improper use or investment of any assets of the covered
financial company shall include principal losses and appropriate
interest.

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124 STAT. 1496

PUBLIC LAW 111–203—JULY 21, 2010
(h) BRIDGE FINANCIAL COMPANIES.—
(1) ORGANIZATION.—
(A) PURPOSE.—The Corporation, as receiver for one
or more covered financial companies or in anticipation of
being appointed receiver for one or more covered financial
companies, may organize one or more bridge financial
companies in accordance with this subsection.
(B) AUTHORITIES.—Upon the creation of a bridge financial company under subparagraph (A) with respect to a
covered financial company, such bridge financial company
may—
(i) assume such liabilities (including liabilities
associated with any trust or custody business, but
excluding any liabilities that count as regulatory capital) of such covered financial company as the Corporation may, in its discretion, determine to be appropriate;
(ii) purchase such assets (including assets associated with any trust or custody business) of such covered financial company as the Corporation may, in
its discretion, determine to be appropriate; and
(iii) perform any other temporary function which
the Corporation may, in its discretion, prescribe in
accordance with this section.
(2) CHARTER AND ESTABLISHMENT.—
(A) ESTABLISHMENT.—Except as provided in subparagraph (H), where the covered financial company is a covered
broker or dealer, the Corporation, as receiver for a covered
financial company, may grant a Federal charter to and
approve articles of association for one or more bridge financial company or companies, with respect to such covered
financial company which shall, by operation of law and
immediately upon issuance of its charter and approval
of its articles of association, be established and operate
in accordance with, and subject to, such charter, articles,
and this section.
(B) MANAGEMENT.—Upon its establishment, a bridge
financial company shall be under the management of a
board of directors appointed by the Corporation.
(C) ARTICLES OF ASSOCIATION.—The articles of association and organization certificate of a bridge financial company shall have such terms as the Corporation may provide,
and shall be executed by such representatives as the Corporation may designate.
(D) TERMS OF CHARTER; RIGHTS AND PRIVILEGES.—Subject to and in accordance with the provisions of this subsection, the Corporation shall—
(i) establish the terms of the charter of a bridge
financial company and the rights, powers, authorities,
and privileges of a bridge financial company granted
by the charter or as an incident thereto; and
(ii) provide for, and establish the terms and conditions governing, the management (including the bylaws
and the number of directors of the board of directors)
and operations of the bridge financial company.
(E) TRANSFER OF RIGHTS AND PRIVILEGES OF COVERED
FINANCIAL COMPANY.—

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124 STAT. 1497

(i) IN GENERAL.—Notwithstanding any other provision of Federal or State law, the Corporation may
provide for a bridge financial company to succeed to
and assume any rights, powers, authorities, or privileges of the covered financial company with respect
to which the bridge financial company was established
and, upon such determination by the Corporation, the
bridge financial company shall immediately and by
operation of law succeed to and assume such rights,
powers, authorities, and privileges.
(ii) EFFECTIVE WITHOUT APPROVAL.—Any succession to or assumption by a bridge financial company
of rights, powers, authorities, or privileges of a covered
financial company under clause (i) or otherwise shall
be effective without any further approval under Federal or State law, assignment, or consent with respect
thereto.
(F) CORPORATE GOVERNANCE AND ELECTION AND DESIGNATION OF BODY OF LAW.—To the extent permitted by
the Corporation and consistent with this section and any
rules, regulations, or directives issued by the Corporation
under this section, a bridge financial company may elect
to follow the corporate governance practices and procedures
that are applicable to a corporation incorporated under
the general corporation law of the State of Delaware, or
the State of incorporation or organization of the covered
financial company with respect to which the bridge financial company was established, as such law may be amended
from time to time.
(G) CAPITAL.—
(i) CAPITAL NOT REQUIRED.—Notwithstanding any
other provision of Federal or State law, a bridge financial company may, if permitted by the Corporation,
operate without any capital or surplus, or with such
capital or surplus as the Corporation may in its discretion determine to be appropriate.
(ii) NO CONTRIBUTION BY THE CORPORATION
REQUIRED.—The Corporation is not required to pay
capital into a bridge financial company or to issue
any capital stock on behalf of a bridge financial company established under this subsection.
(iii) AUTHORITY.—If the Corporation determines
that such action is advisable, the Corporation may
cause capital stock or other securities of a bridge financial company established with respect to a covered
financial company to be issued and offered for sale
in such amounts and on such terms and conditions
as the Corporation may, in its discretion, determine.
(iv) OPERATING FUNDS IN LIEU OF CAPITAL AND
IMPLEMENTATION PLAN.—Upon the organization of a
bridge financial company, and thereafter as the Corporation may, in its discretion, determine to be necessary or advisable, the Corporation may make available to the bridge financial company, subject to the
plan described in subsection (n)(9), funds for the operation of the bridge financial company in lieu of capital.
(H) BRIDGE BROKERS OR DEALERS.—

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124 STAT. 1498

PUBLIC LAW 111–203—JULY 21, 2010
(i) IN GENERAL.—The Corporation, as receiver for
a covered broker or dealer, may approve articles of
association for one or more bridge financial companies
with respect to such covered broker or dealer, which
bridge financial company or companies shall, by operation of law and immediately upon approval of its
articles of association—
(I) be established and deemed registered with
the Commission under the Securities Exchange
Act of 1934 and a member of SIPC;
(II) operate in accordance with such articles
and this section; and
(III) succeed to any and all registrations and
memberships of the covered financial company
with or in any self-regulatory organizations.
(ii) OTHER REQUIREMENTS.—Except as provided in
clause (i), and notwithstanding any other provision
of this section, the bridge financial company shall be
subject to the Federal securities laws and all requirements with respect to being a member of a self-regulatory organization, unless exempted from any such
requirements by the Commission, as is necessary or
appropriate in the public interest or for the protection
of investors.
(iii) TREATMENT OF CUSTOMERS.—Except as otherwise provided by this title, any customer of the covered
broker or dealer whose account is transferred to a
bridge financial company shall have all the rights,
privileges, and protections under section 205(f) and
under the Securities Investor Protection Act of 1970
(15 U.S.C. 78aaa et seq.), that such customer would
have had if the account were not transferred from
the covered financial company under this subparagraph.
(iv) OPERATION OF BRIDGE BROKERS OR DEALERS.—
Notwithstanding any other provision of this title, the
Corporation shall not operate any bridge financial company created by the Corporation under this title with
respect to a covered broker or dealer in such a manner
as to adversely affect the ability of customers to
promptly access their customer property in accordance
with applicable law.

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(3) INTERESTS IN AND ASSETS AND OBLIGATIONS OF COVERED
FINANCIAL COMPANY.—Notwithstanding paragraph (1) or (2) or
any other provision of law—
(A) a bridge financial company shall assume, acquire,
or succeed to the assets or liabilities of a covered financial
company (including the assets or liabilities associated with
any trust or custody business) only to the extent that
such assets or liabilities are transferred by the Corporation
to the bridge financial company in accordance with, and
subject to the restrictions set forth in, paragraph (1)(B);
and
(B) a bridge financial company shall not assume,
acquire, or succeed to any obligation that a covered financial company for which the Corporation has been appointed
receiver may have to any shareholder, member, general

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124 STAT. 1499

partner, limited partner, or other person with an interest
in the equity of the covered financial company that arises
as a result of the status of that person having an equity
claim in the covered financial company.
(4) BRIDGE FINANCIAL COMPANY TREATED AS BEING IN
DEFAULT FOR CERTAIN PURPOSES.—A bridge financial company
shall be treated as a covered financial company in default
at such times and for such purposes as the Corporation may,
in its discretion, determine.
(5) TRANSFER OF ASSETS AND LIABILITIES.—
(A) AUTHORITY OF CORPORATION.—The Corporation, as
receiver for a covered financial company, may transfer
any assets and liabilities of a covered financial company
(including any assets or liabilities associated with any trust
or custody business) to one or more bridge financial companies, in accordance with and subject to the restrictions
of paragraph (1).
(B) SUBSEQUENT TRANSFERS.—At any time after the
establishment of a bridge financial company with respect
to a covered financial company, the Corporation, as
receiver, may transfer any assets and liabilities of such
covered financial company as the Corporation may, in its
discretion, determine to be appropriate in accordance with
and subject to the restrictions of paragraph (1).
(C) TREATMENT OF TRUST OR CUSTODY BUSINESS.—For
purposes of this paragraph, the trust or custody business,
including fiduciary appointments, held by any covered
financial company is included among its assets and liabilities.
(D) EFFECTIVE WITHOUT APPROVAL.—The transfer of
any assets or liabilities, including those associated with
any trust or custody business of a covered financial company, to a bridge financial company shall be effective without any further approval under Federal or State law,
assignment, or consent with respect thereto.
(E) EQUITABLE TREATMENT OF SIMILARLY SITUATED
CREDITORS.—The Corporation shall treat all creditors of
a covered financial company that are similarly situated
under subsection (b)(1), in a similar manner in exercising
the authority of the Corporation under this subsection to
transfer any assets or liabilities of the covered financial
company to one or more bridge financial companies established with respect to such covered financial company,
except that the Corporation may take any action (including
making payments, subject to subsection (o)(1)(D)(i)) that
does not comply with this subparagraph, if—
(i) the Corporation determines that such action
is necessary—
(I) to maximize the value of the assets of the
covered financial company;
(II) to maximize the present value return from
the sale or other disposition of the assets of the
covered financial company; or
(III) to minimize the amount of any loss
realized upon the sale or other disposition of the
assets of the covered financial company; and

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124 STAT. 1500

PUBLIC LAW 111–203—JULY 21, 2010
(ii) all creditors that are similarly situated under
subsection (b)(1) receive not less than the amount provided under paragraphs (2) and (3) of subsection (d).
(F) LIMITATION ON TRANSFER OF LIABILITIES.—Notwithstanding any other provision of law, the aggregate amount
of liabilities of a covered financial company that are transferred to, or assumed by, a bridge financial company from
a covered financial company may not exceed the aggregate
amount of the assets of the covered financial company
that are transferred to, or purchased by, the bridge financial company from the covered financial company.
(6) STAY OF JUDICIAL ACTION.—Any judicial action to which
a bridge financial company becomes a party by virtue of its
acquisition of any assets or assumption of any liabilities of
a covered financial company shall be stayed from further proceedings for a period of not longer than 45 days (or such
longer period as may be agreed to upon the consent of all
parties) at the request of the bridge financial company.
(7) AGREEMENTS AGAINST INTEREST OF THE BRIDGE FINANCIAL COMPANY.—No agreement that tends to diminish or defeat
the interest of the bridge financial company in any asset of
a covered financial company acquired by the bridge financial
company shall be valid against the bridge financial company,
unless such agreement—
(A) is in writing;
(B) was executed by an authorized officer or representative of the covered financial company or confirmed in the
ordinary course of business by the covered financial company; and
(C) has been on the official record of the company,
since the time of its execution, or with which, the party
claiming under the agreement provides documentation of
such agreement and its authorized execution or confirmation by the covered financial company that is acceptable
to the receiver.
(8) NO FEDERAL STATUS.—
(A) AGENCY STATUS.—A bridge financial company is
not an agency, establishment, or instrumentality of the
United States.
(B) EMPLOYEE STATUS.—Representatives for purposes
of paragraph (1)(B), directors, officers, employees, or agents
of a bridge financial company are not, solely by virtue
of service in any such capacity, officers or employees of
the United States. Any employee of the Corporation or
of any Federal instrumentality who serves at the request
of the Corporation as a representative for purposes of paragraph (1)(B), director, officer, employee, or agent of a bridge
financial company shall not—
(i) solely by virtue of service in any such capacity
lose any existing status as an officer or employee of
the United States for purposes of title 5, United States
Code, or any other provision of law; or
(ii) receive any salary or benefits for service in
any such capacity with respect to a bridge financial
company in addition to such salary or benefits as are
obtained through employment with the Corporation
or such Federal instrumentality.

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(9) FUNDING AUTHORIZED.—The Corporation may, subject
to the plan described in subsection (n)(9), provide funding to
facilitate any transaction described in subparagraph (A), (B),
(C), or (D) of paragraph (13) with respect to any bridge financial
company, or facilitate the acquisition by a bridge financial
company of any assets, or the assumption of any liabilities,
of a covered financial company for which the Corporation has
been appointed receiver.
(10) EXEMPT TAX STATUS.—Notwithstanding any other
provision of Federal or State law, a bridge financial company,
its franchise, property, and income shall be exempt from all
taxation now or hereafter imposed by the United States, by
any territory, dependency, or possession thereof, or by any
State, county, municipality, or local taxing authority.
(11) FEDERAL AGENCY APPROVAL; ANTITRUST REVIEW.—If
a transaction involving the merger or sale of a bridge financial
company requires approval by a Federal agency, the transaction
may not be consummated before the 5th calendar day after
the date of approval by the Federal agency responsible for
such approval with respect thereto. If, in connection with any
such approval a report on competitive factors from the Attorney
General is required, the Federal agency responsible for such
approval shall promptly notify the Attorney General of the
proposed transaction and the Attorney General shall provide
the required report within 10 days of the request. If a notification is required under section 7A of the Clayton Act with
respect to such transaction, the required waiting period shall
end on the 15th day after the date on which the Attorney
General and the Federal Trade Commission receive such
notification, unless the waiting period is terminated earlier
under section 7A(b)(2) of the Clayton Act, or extended under
section 7A(e)(2) of that Act.
(12) DURATION OF BRIDGE FINANCIAL COMPANY.—Subject
to paragraphs (13) and (14), the status of a bridge financial
company as such shall terminate at the end of the 2-year
period following the date on which it was granted a charter.
The Corporation may, in its discretion, extend the status of
the bridge financial company as such for no more than 3 additional 1-year periods.
(13) TERMINATION OF BRIDGE FINANCIAL COMPANY STATUS.—
The status of any bridge financial company as such shall terminate upon the earliest of—
(A) the date of the merger or consolidation of the
bridge financial company with a company that is not a
bridge financial company;
(B) at the election of the Corporation, the sale of a
majority of the capital stock of the bridge financial company
to a company other than the Corporation and other than
another bridge financial company;
(C) the sale of 80 percent, or more, of the capital
stock of the bridge financial company to a person other
than the Corporation and other than another bridge financial company;
(D) at the election of the Corporation, either the
assumption of all or substantially all of the liabilities of
the bridge financial company by a company that is not
a bridge financial company, or the acquisition of all or

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Reports.
Deadline.

Termination
date.

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date.

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substantially all of the assets of the bridge financial company by a company that is not a bridge financial company,
or other entity as permitted under applicable law; and
(E) the expiration of the period provided in paragraph
(12), or the earlier dissolution of the bridge financial company, as provided in paragraph (15).
(14) EFFECT OF TERMINATION EVENTS.—
(A) MERGER OR CONSOLIDATION.—A merger or consolidation, described in paragraph (13)(A) shall be conducted
in accordance with, and shall have the effect provided
in, the provisions of applicable law. For the purpose of
effecting such a merger or consolidation, the bridge financial company shall be treated as a corporation organized
under the laws of the State of Delaware (unless the law
of another State has been selected by the bridge financial
company in accordance with paragraph (2)(F)), and the
Corporation shall be treated as the sole shareholder thereof,
notwithstanding any other provision of State or Federal
law.
(B) CHARTER CONVERSION.—Following the sale of a
majority of the capital stock of the bridge financial company, as provided in paragraph (13)(B), the Corporation
may amend the charter of the bridge financial company
to reflect the termination of the status of the bridge financial company as such, whereupon the company shall have
all of the rights, powers, and privileges under its constituent documents and applicable Federal or State law.
In connection therewith, the Corporation may take such
steps as may be necessary or convenient to reincorporate
the bridge financial company under the laws of a State
and, notwithstanding any provisions of Federal or State
law, such State-chartered corporation shall be deemed to
succeed by operation of law to such rights, titles, powers,
and interests of the bridge financial company as the Corporation may provide, with the same effect as if the bridge
financial company had merged with the State-chartered
corporation under provisions of the corporate laws of such
State.
(C) SALE OF STOCK.—Following the sale of 80 percent
or more of the capital stock of a bridge financial company,
as provided in paragraph (13)(C), the company shall have
all of the rights, powers, and privileges under its constituent documents and applicable Federal or State law.
In connection therewith, the Corporation may take such
steps as may be necessary or convenient to reincorporate
the bridge financial company under the laws of a State
and, notwithstanding any provisions of Federal or State
law, the State-chartered corporation shall be deemed to
succeed by operation of law to such rights, titles, powers
and interests of the bridge financial company as the Corporation may provide, with the same effect as if the bridge
financial company had merged with the State-chartered
corporation under provisions of the corporate laws of such
State.
(D) ASSUMPTION OF LIABILITIES AND SALE OF ASSETS.—
Following the assumption of all or substantially all of the
liabilities of the bridge financial company, or the sale of

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1503

all or substantially all of the assets of the bridge financial
company, as provided in paragraph (13)(D), at the election
of the Corporation, the bridge financial company may retain
its status as such for the period provided in paragraph
(12) or may be dissolved at the election of the Corporation.
(E) AMENDMENTS TO CHARTER.—Following the consummation of a transaction described in subparagraph (A),
(B), (C), or (D) of paragraph (13), the charter of the
resulting company shall be amended to reflect the termination of bridge financial company status, if appropriate.
(15) DISSOLUTION OF BRIDGE FINANCIAL COMPANY.—
(A) IN GENERAL.—Notwithstanding any other provision
of Federal or State law, if the status of a bridge financial
company as such has not previously been terminated by
the occurrence of an event specified in subparagraph (A),
(B), (C), or (D) of paragraph (13)—
(i) the Corporation may, in its discretion, dissolve
the bridge financial company in accordance with this
paragraph at any time; and
(ii) the Corporation shall promptly commence dissolution proceedings in accordance with this paragraph
upon the expiration of the 2-year period following the
date on which the bridge financial company was chartered, or any extension thereof, as provided in paragraph (12).
(B) PROCEDURES.—The Corporation shall remain the
receiver for a bridge financial company for the purpose
of dissolving the bridge financial company. The Corporation
as receiver for a bridge financial company shall wind up
the affairs of the bridge financial company in conformity
with the provisions of law relating to the liquidation of
covered financial companies under this title. With respect
to any such bridge financial company, the Corporation as
receiver shall have all the rights, powers, and privileges
and shall perform the duties related to the exercise of
such rights, powers, or privileges granted by law to the
Corporation as receiver for a covered financial company
under this title and, notwithstanding any other provision
of law, in the exercise of such rights, powers, and privileges,
the Corporation shall not be subject to the direction or
supervision of any State agency or other Federal agency.
(16) AUTHORITY TO OBTAIN CREDIT.—
(A) IN GENERAL.—A bridge financial company may
obtain unsecured credit and issue unsecured debt.
(B) INABILITY TO OBTAIN CREDIT.—If a bridge financial
company is unable to obtain unsecured credit or issue
unsecured debt, the Corporation may authorize the
obtaining of credit or the issuance of debt by the bridge
financial company—
(i) with priority over any or all of the obligations
of the bridge financial company;
(ii) secured by a lien on property of the bridge
financial company that is not otherwise subject to a
lien; or
(iii) secured by a junior lien on property of the
bridge financial company that is subject to a lien.
(C) LIMITATIONS.—

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(i) IN GENERAL.—The Corporation, after notice and
a hearing, may authorize the obtaining of credit or
the issuance of debt by a bridge financial company
that is secured by a senior or equal lien on property
of the bridge financial company that is subject to a
lien, only if—
(I) the bridge financial company is unable to
otherwise obtain such credit or issue such debt;
and
(II) there is adequate protection of the interest
of the holder of the lien on the property with
respect to which such senior or equal lien is proposed to be granted.
(ii) HEARING.—The hearing required pursuant to
this subparagraph shall be before a court of the United
States, which shall have jurisdiction to conduct such
hearing and to authorize a bridge financial company
to obtain secured credit under clause (i).
(D) BURDEN OF PROOF.—In any hearing under this
paragraph, the Corporation has the burden of proof on
the issue of adequate protection.
(E) QUALIFIED FINANCIAL CONTRACTS.—No credit or
debt obtained or issued by a bridge financial company
may contain terms that impair the rights of a counterparty
to a qualified financial contract upon a default by the
bridge financial company, other than the priority of such
counterparty’s unsecured claim (after the exercise of rights)
relative to the priority of the bridge financial company’s
obligations in respect of such credit or debt, unless such
counterparty consents in writing to any such impairment.
(17) EFFECT ON DEBTS AND LIENS.—The reversal or modification on appeal of an authorization under this subsection
to obtain credit or issue debt, or of a grant under this section
of a priority or a lien, does not affect the validity of any
debt so issued, or any priority or lien so granted, to an entity
that extended such credit in good faith, whether or not such
entity knew of the pendency of the appeal, unless such
authorization and the issuance of such debt, or the granting
of such priority or lien, were stayed pending appeal.
(i) SHARING RECORDS.—If the Corporation has been appointed
as receiver for a covered financial company, other Federal regulators
shall make all records relating to the covered financial company
available to the Corporation, which may be used by the Corporation
in any manner that the Corporation determines to be appropriate.
(j) EXPEDITED PROCEDURES FOR CERTAIN CLAIMS.—
(1) TIME FOR FILING NOTICE OF APPEAL.—The notice of
appeal of any order, whether interlocutory or final, entered
in any case brought by the Corporation against a director,
officer, employee, agent, attorney, accountant, or appraiser of
the covered financial company, or any other person employed
by or providing services to a covered financial company, shall
be filed not later than 30 days after the date of entry of
the order. The hearing of the appeal shall be held not later
than 120 days after the date of the notice of appeal. The
appeal shall be decided not later than 180 days after the
date of the notice of appeal.

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124 STAT. 1505

(2) SCHEDULING.—The court shall expedite the consideration of any case brought by the Corporation against a director,
officer, employee, agent, attorney, accountant, or appraiser of
a covered financial company or any other person employed
by or providing services to a covered financial company. As
far as practicable, the court shall give such case priority on
its docket.
(3) JUDICIAL DISCRETION.—The court may modify the
schedule and limitations stated in paragraphs (1) and (2) in
a particular case, based on a specific finding that the ends
of justice that would be served by making such a modification
would outweigh the best interest of the public in having the
case resolved expeditiously.
(k) FOREIGN INVESTIGATIONS.—The Corporation, as receiver for
any covered financial company, and for purposes of carrying out
any power, authority, or duty with respect to a covered financial
company—
(1) may request the assistance of any foreign financial
authority and provide assistance to any foreign financial
authority in accordance with section 8(v) of the Federal Deposit
Insurance Act, as if the covered financial company were an
insured depository institution, the Corporation were the appropriate Federal banking agency for the company, and any foreign
financial authority were the foreign banking authority; and
(2) may maintain an office to coordinate foreign investigations or investigations on behalf of foreign financial authorities.
(l) PROHIBITION ON ENTERING SECRECY AGREEMENTS AND
PROTECTIVE ORDERS.—The Corporation may not enter into any
agreement or approve any protective order which prohibits the
Corporation from disclosing the terms of any settlement of an
administrative or other action for damages or restitution brought
by the Corporation in its capacity as receiver for a covered financial
company.
(m) LIQUIDATION OF CERTAIN COVERED FINANCIAL COMPANIES
OR BRIDGE FINANCIAL COMPANIES.—
(1) IN GENERAL.—Except as specifically provided in this
section, and notwithstanding any other provision of law, the
Corporation, in connection with the liquidation of any covered
financial company or bridge financial company with respect
to which the Corporation has been appointed as receiver, shall—
(A) in the case of any covered financial company or
bridge financial company that is a stockbroker, but is not
a member of the Securities Investor Protection Corporation,
apply the provisions of subchapter III of chapter 7 of the
Bankruptcy Code, in respect of the distribution to any
customer of all customer name security and customer property and member property, as if such covered financial
company or bridge financial company were a debtor for
purposes of such subchapter; or
(B) in the case of any covered financial company or
bridge financial company that is a commodity broker, apply
the provisions of subchapter IV of chapter 7 the Bankruptcy
Code, in respect of the distribution to any customer of
all customer property and member property, as if such
covered financial company or bridge financial company
were a debtor for purposes of such subchapter.
(2) DEFINITIONS.—For purposes of this subsection—

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PUBLIC LAW 111–203—JULY 21, 2010
(A) the terms ‘‘customer’’, ‘‘customer name security’’,
and ‘‘customer property and member property’’ have the
same meanings as in sections 741 and 761 of title 11,
United States Code; and
(B) the terms ‘‘commodity broker’’ and ‘‘stockbroker’’
have the same meanings as in section 101 of the Bankruptcy Code.
(n) ORDERLY LIQUIDATION FUND.—
(1) ESTABLISHMENT.—There is established in the Treasury
of the United States a separate fund to be known as the
‘‘Orderly Liquidation Fund’’, which shall be available to the
Corporation to carry out the authorities contained in this title,
for the cost of actions authorized by this title, including the
orderly liquidation of covered financial companies, payment
of administrative expenses, the payment of principal and
interest by the Corporation on obligations issued under paragraph (5), and the exercise of the authorities of the Corporation
under this title.
(2) PROCEEDS.—Amounts received by the Corporation,
including assessments received under subsection (o), proceeds
of obligations issued under paragraph (5), interest and other
earnings from investments, and repayments to the Corporation
by covered financial companies, shall be deposited into the
Fund.
(3) MANAGEMENT.—The Corporation shall manage the
Fund in accordance with this subsection and the policies and
procedures established under section 203(d).
(4) INVESTMENTS.—At the request of the Corporation, the
Secretary may invest such portion of amounts held in the
Fund that are not, in the judgment of the Corporation, required
to meet the current needs of the Corporation, in obligations
of the United States having suitable maturities, as determined
by the Corporation. The interest on and the proceeds from
the sale or redemption of such obligations shall be credited
to the Fund.
(5) AUTHORITY TO ISSUE OBLIGATIONS.—
(A) CORPORATION AUTHORIZED TO ISSUE OBLIGATIONS.—
Upon appointment by the Secretary of the Corporation
as receiver for a covered financial company, the Corporation
is authorized to issue obligations to the Secretary.
(B) SECRETARY AUTHORIZED TO PURCHASE OBLIGATIONS.—The Secretary may, under such terms and conditions as the Secretary may require, purchase or agree
to purchase any obligations issued under subparagraph
(A), and for such purpose, the Secretary is authorized to
use as a public debt transaction the proceeds of the sale
of any securities issued under chapter 31 of title 31, United
States Code, and the purposes for which securities may
be issued under chapter 31 of title 31, United States Code,
are extended to include such purchases.
(C) INTEREST RATE.—Each purchase of obligations by
the Secretary under this paragraph shall be upon such
terms and conditions as to yield a return at a rate determined by the Secretary, taking into consideration the current average yield on outstanding marketable obligations
of the United States of comparable maturity, plus an

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124 STAT. 1507

interest rate surcharge to be determined by the Secretary,
which shall be greater than the difference between—
(i) the current average rate on an index of corporate obligations of comparable maturity; and
(ii) the current average rate on outstanding
marketable obligations of the United States of comparable maturity.
(D) SECRETARY AUTHORIZED TO SELL OBLIGATIONS.—
The Secretary may sell, upon such terms and conditions
as the Secretary shall determine, any of the obligations
acquired under this paragraph.
(E) PUBLIC DEBT TRANSACTIONS.—All purchases and
sales by the Secretary of such obligations under this paragraph shall be treated as public debt transactions of the
United States, and the proceeds from the sale of any obligations acquired by the Secretary under this paragraph shall
be deposited into the Treasury of the United States as
miscellaneous receipts.
(6) MAXIMUM OBLIGATION LIMITATION.—The Corporation
may not, in connection with the orderly liquidation of a covered
financial company, issue or incur any obligation, if, after issuing
or incurring the obligation, the aggregate amount of such obligations outstanding under this subsection for each covered financial company would exceed—
(A) an amount that is equal to 10 percent of the total
consolidated assets of the covered financial company, based
on the most recent financial statement available, during
the 30-day period immediately following the date of
appointment of the Corporation as receiver (or a shorter
time period if the Corporation has calculated the amount
described under subparagraph (B)); and
(B) the amount that is equal to 90 percent of the
fair value of the total consolidated assets of each covered
financial company that are available for repayment, after
the time period described in subparagraph (A).
(7) RULEMAKING.—The Corporation and the Secretary shall
jointly, in consultation with the Council, prescribe regulations
governing the calculation of the maximum obligation limitation
defined in this paragraph.
(8) RULE OF CONSTRUCTION.—
(A) IN GENERAL.—Nothing in this section shall be construed to affect the authority of the Corporation under
subsection (a) or (b) of section 14 or section 15(c)(5) of
the Federal Deposit Insurance Act (12 U.S.C. 1824,
1825(c)(5)), the management of the Deposit Insurance Fund
by the Corporation, or the resolution of insured depository
institutions, provided that—
(i) the authorities of the Corporation contained
in this title shall not be used to assist the Deposit
Insurance Fund or to assist any financial company
under applicable law other than this Act;
(ii) the authorities of the Corporation relating to
the Deposit Insurance Fund, or any other responsibilities of the Corporation under applicable law other
than this title, shall not be used to assist a covered
financial company pursuant to this title; and

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(iii) the Deposit Insurance Fund may not be used
in any manner to otherwise circumvent the purposes
of this title.
(B) VALUATION.—For purposes of determining the
amount of obligations under this subsection—
(i) the Corporation shall include as an obligation
any contingent liability of the Corporation pursuant
to this title; and
(ii) the Corporation shall value any contingent
liability at its expected cost to the Corporation.
(9) ORDERLY LIQUIDATION AND REPAYMENT PLANS.—
(A) ORDERLY LIQUIDATION PLAN.—Amounts in the Fund
shall be available to the Corporation with regard to a
covered financial company for which the Corporation is
appointed receiver after the Corporation has developed an
orderly liquidation plan that is acceptable to the Secretary
with regard to such covered financial company, including
the provision and use of funds, including taking any actions
specified under section 204(d) and subsection (h)(2)(G)(iv)
and (h)(9) of this section, and payments to third parties.
The orderly liquidation plan shall take into account actions
to avoid or mitigate potential adverse effects on low income,
minority, or underserved communities affected by the
failure of the covered financial company, and shall provide
for coordination with the primary financial regulatory agencies, as appropriate, to ensure that such actions are taken.
The Corporation may, at any time, amend any orderly
liquidation plan approved by the Secretary with the concurrence of the Secretary.
(B) MANDATORY REPAYMENT PLAN.—
(i) IN GENERAL.—No amount authorized under
paragraph (6)(B) may be provided by the Secretary
to the Corporation under paragraph (5), unless an
agreement is in effect between the Secretary and the
Corporation that—
(I) provides a specific plan and schedule to
achieve the repayment of the outstanding amount
of any borrowing under paragraph (5); and
(II) demonstrates that income to the Corporation from the liquidated assets of the covered financial company and assessments under subsection
(o) will be sufficient to amortize the outstanding
balance within the period established in the repayment schedule and pay the interest accruing on
such balance within the time provided in subsection (o)(1)(B).
(ii) CONSULTATION WITH AND REPORT TO CONGRESS.—The Secretary and the Corporation shall—
(I) consult with the Committee on Banking,
Housing, and Urban Affairs of the Senate and
the Committee on Financial Services of the House
of Representatives on the terms of any repayment
schedule agreement; and
(II) submit a copy of the repayment schedule
agreement to the Committees described in subclause (I) before the end of the 30-day period beginning on the date on which any amount is provided

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124 STAT. 1509

by the Secretary to the Corporation under paragraph (5).
(10) IMPLEMENTATION EXPENSES.—
(A) IN GENERAL.—Reasonable implementation expenses
of the Corporation incurred after the date of enactment
of this Act shall be treated as expenses of the Council.
(B) REQUESTS FOR REIMBURSEMENT.—The Corporation
shall periodically submit a request for reimbursement for
implementation expenses to the Chairperson of the Council,
who shall arrange for prompt reimbursement to the Corporation of reasonable implementation expenses.
(C) DEFINITION.—As used in this paragraph, the term
‘‘implementation expenses’’—
(i) means costs incurred by the Corporation beginning on the date of enactment of this Act, as part
of its efforts to implement this title that do not relate
to a particular covered financial company; and
(ii) includes the costs incurred in connection with
the development of policies, procedures, rules, and
regulations and other planning activities of the Corporation consistent with carrying out this title.
(o) ASSESSMENTS.—
(1) RISK-BASED ASSESSMENTS.—
(A) ELIGIBLE FINANCIAL COMPANIES DEFINED.—For purposes of this subsection, the term ‘‘eligible financial company’’ means any bank holding company with total consolidated assets equal to or greater than $50,000,000,000 and
any nonbank financial company supervised by the Board
of Governors.
(B) ASSESSMENTS.—The Corporation shall charge one
or more risk-based assessments in accordance with the
provisions of subparagraph (D), if such assessments are
necessary to pay in full the obligations issued by the Corporation to the Secretary under this title within 60 months
of the date of issuance of such obligations.
(C) EXTENSIONS AUTHORIZED.—The Corporation may,
with the approval of the Secretary, extend the time period
under subparagraph (B), if the Corporation determines that
an extension is necessary to avoid a serious adverse effect
on the financial system of the United States.
(D) APPLICATION OF ASSESSMENTS.—To meet the
requirements of subparagraph (B), the Corporation shall—
(i) impose assessments, as soon as practicable, on
any claimant that received additional payments or
amounts from the Corporation pursuant to subsection
(b)(4), (d)(4), or (h)(5)(E), except for payments or
amounts necessary to initiate and continue operations
essential to implementation of the receivership or any
bridge financial company, to recover on a cumulative
basis, the entire difference between—
(I) the aggregate value the claimant received
from the Corporation on a claim pursuant to this
title (including pursuant to subsection (b)(4), (d)(4),
and (h)(5)(E)), as of the date on which such value
was received; and
(II) the value the claimant was entitled to
receive from the Corporation on such claim solely

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from the proceeds of the liquidation of the covered
financial company under this title; and
(ii) if the amounts to be recovered on a cumulative
basis under clause (i) are insufficient to meet the
requirements of subparagraph (B), after taking into
account the considerations set forth in paragraph (4),
impose assessments on—
(I) eligible financial companies; and
(II) financial companies with total consolidated
assets equal to or greater than $50,000,000,000
that are not eligible financial companies.
(E) PROVISION OF FINANCING.—Payments or amounts
necessary to initiate and continue operations essential to
implementation of the receivership or any bridge financial
company described in subparagraph (D)(i) shall not include
the provision of financing, as defined by rule of the Corporation, to third parties.
(2) GRADUATED ASSESSMENT RATE.—The Corporation shall
impose assessments on a graduated basis, with financial companies having greater assets and risk being assessed at a higher
rate.
(3) NOTIFICATION AND PAYMENT.—The Corporation shall
notify each financial company of that company’s assessment
under this subsection. Any financial company subject to assessment under this subsection shall pay such assessment in accordance with the regulations prescribed pursuant to paragraph
(6).
(4) RISK-BASED ASSESSMENT CONSIDERATIONS.—In imposing
assessments under paragraph (1)(D)(ii), the Corporation shall
use a risk matrix. The Council shall make a recommendation
to the Corporation on the risk matrix to be used in imposing
such assessments, and the Corporation shall take into account
any such recommendation in the establishment of the risk
matrix to be used to impose such assessments. In recommending or establishing such risk matrix, the Council and
the Corporation, respectively, shall take into account—
(A) economic conditions generally affecting financial
companies so as to allow assessments to increase during
more favorable economic conditions and to decrease during
less favorable economic conditions;
(B) any assessments imposed on a financial company
or an affiliate of a financial company that—
(i) is an insured depository institution, assessed
pursuant to section 7 or 13(c)(4)(G) of the Federal
Deposit Insurance Act;
(ii) is a member of the Securities Investor Protection Corporation, assessed pursuant to section 4 of
the Securities Investor Protection Act of 1970 (15
U.S.C. 78ddd);
(iii) is an insured credit union, assessed pursuant
to section 202(c)(1)(A)(i) of the Federal Credit Union
Act (12 U.S.C. 1782(c)(1)(A)(i)); or
(iv) is an insurance company, assessed pursuant
to applicable State law to cover (or reimburse payments
made to cover) the costs of the rehabilitation, liquidation, or other State insolvency proceeding with respect
to 1 or more insurance companies;

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(C) the risks presented by the financial company to
the financial system and the extent to which the financial
company has benefitted, or likely would benefit, from the
orderly liquidation of a financial company under this title,
including—
(i) the amount, different categories, and concentrations of assets of the financial company and its affiliates, including both on-balance sheet and off-balance
sheet assets;
(ii) the activities of the financial company and
its affiliates;
(iii) the relevant market share of the financial
company and its affiliates;
(iv) the extent to which the financial company
is leveraged;
(v) the potential exposure to sudden calls on
liquidity precipitated by economic distress;
(vi) the amount, maturity, volatility, and stability
of the company’s financial obligations to, and relationship with, other financial companies;
(vii) the amount, maturity, volatility, and stability
of the liabilities of the company, including the degree
of reliance on short-term funding, taking into consideration existing systems for measuring a company’s riskbased capital;
(viii) the stability and variety of the company’s
sources of funding;
(ix) the company’s importance as a source of credit
for households, businesses, and State and local governments and as a source of liquidity for the financial
system;
(x) the extent to which assets are simply managed
and not owned by the financial company and the extent
to which ownership of assets under management is
diffuse; and
(xi) the amount, different categories, and concentrations of liabilities, both insured and uninsured,
contingent and noncontingent, including both on-balance sheet and off-balance sheet liabilities, of the financial company and its affiliates;
(D) any risks presented by the financial company
during the 10-year period immediately prior to the appointment of the Corporation as receiver for the covered financial
company that contributed to the failure of the covered
financial company; and
(E) such other risk-related factors as the Corporation,
or the Council, as applicable, may determine to be appropriate.
(5) COLLECTION OF INFORMATION.—The Corporation may
impose on covered financial companies such collection of
information requirements as the Corporation deems necessary
to carry out this subsection after the appointment of the Corporation as receiver under this title.
(6) RULEMAKING.—
(A) IN GENERAL.—The Corporation shall prescribe regulations to carry out this subsection. The Corporation shall

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consult with the Secretary in the development and finalization of such regulations.
(B) EQUITABLE TREATMENT.—The regulations prescribed under subparagraph (A) shall take into account
the differences in risks posed to the financial stability
of the United States by financial companies, the differences
in the liability structures of financial companies, and the
different bases for other assessments that such financial
companies may be required to pay, to ensure that assessed
financial companies are treated equitably and that assessments under this subsection reflect such differences.
(p) UNENFORCEABILITY OF CERTAIN AGREEMENTS.—
(1) IN GENERAL.—No provision described in paragraph (2)
shall be enforceable against or impose any liability on any
person, as such enforcement or liability shall be contrary to
public policy.
(2) PROHIBITED PROVISIONS.—A provision described in this
paragraph is any term contained in any existing or future
standstill, confidentiality, or other agreement that, directly or
indirectly—
(A) affects, restricts, or limits the ability of any person
to offer to acquire or acquire;
(B) prohibits any person from offering to acquire or
acquiring; or
(C) prohibits any person from using any previously
disclosed information in connection with any such offer
to acquire or acquisition of,
all or part of any covered financial company, including any
liabilities, assets, or interest therein, in connection with any
transaction in which the Corporation exercises its authority
under this title.
(q) OTHER EXEMPTIONS.—
(1) IN GENERAL.—When acting as a receiver under this
title—
(A) the Corporation, including its franchise, its capital,
reserves and surplus, and its income, shall be exempt from
all taxation imposed by any State, county, municipality,
or local taxing authority, except that any real property
of the Corporation shall be subject to State, territorial,
county, municipal, or local taxation to the same extent
according to its value as other real property is taxed, except
that, notwithstanding the failure of any person to challenge
an assessment under State law of the value of such property, such value, and the tax thereon, shall be determined
as of the period for which such tax is imposed;
(B) no property of the Corporation shall be subject
to levy, attachment, garnishment, foreclosure, or sale without the consent of the Corporation, nor shall any involuntary lien attach to the property of the Corporation; and
(C) the Corporation shall not be liable for any amounts
in the nature of penalties or fines, including those arising
from the failure of any person to pay any real property,
personal property, probate, or recording tax or any
recording or filing fees when due; and
(D) the Corporation shall be exempt from all prosecution by the United States or any State, county, municipality, or local authority for any criminal offense arising

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under Federal, State, county, municipal, or local law, which
was allegedly committed by the covered financial company,
or persons acting on behalf of the covered financial company, prior to the appointment of the Corporation as
receiver.
(2) LIMITATION.—Paragraph (1) shall not apply with respect
to any tax imposed (or other amount arising) under the Internal
Revenue Code of 1986.
(r) CERTAIN SALES OF ASSETS PROHIBITED.—
(1) PERSONS WHO ENGAGED IN IMPROPER CONDUCT WITH,
OR CAUSED LOSSES TO, COVERED FINANCIAL COMPANIES.—The
Corporation shall prescribe regulations which, at a minimum,
shall prohibit the sale of assets of a covered financial company
by the Corporation to—
(A) any person who—
(i) has defaulted, or was a member of a partnership
or an officer or director of a corporation that has
defaulted, on 1 or more obligations, the aggregate
amount of which exceeds $1,000,000, to such covered
financial company;
(ii) has been found to have engaged in fraudulent
activity in connection with any obligation referred to
in clause (i); and
(iii) proposes to purchase any such asset in whole
or in part through the use of the proceeds of a loan
or advance of credit from the Corporation or from
any covered financial company;
(B) any person who participated, as an officer or
director of such covered financial company or of any affiliate
of such company, in a material way in any transaction
that resulted in a substantial loss to such covered financial
company; or
(C) any person who has demonstrated a pattern or
practice of defalcation regarding obligations to such covered
financial company.
(2) CONVICTED DEBTORS.—Except as provided in paragraph
(3), a person may not purchase any asset of such institution
from the receiver, if that person—
(A) has been convicted of an offense under section
215, 656, 657, 1005, 1006, 1007, 1008, 1014, 1032, 1341,
1343, or 1344 of title 18, United States Code, or of conspiring to commit such an offense, affecting any covered
financial company; and
(B) is in default on any loan or other extension of
credit from such covered financial company which, if not
paid, will cause substantial loss to the Fund or the Corporation.
(3) SETTLEMENT OF CLAIMS.—Paragraphs (1) and (2) shall
not apply to the sale or transfer by the Corporation of any
asset of any covered financial company to any person, if the
sale or transfer of the asset resolves or settles, or is part
of the resolution or settlement, of 1 or more claims that have
been, or could have been, asserted by the Corporation against
the person.
(4) DEFINITION OF DEFAULT.—For purposes of this subsection, the term ‘‘default’’ means a failure to comply with

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the terms of a loan or other obligation to such an extent
that the property securing the obligation is foreclosed upon.
(s) RECOUPMENT OF COMPENSATION FROM SENIOR EXECUTIVES
AND DIRECTORS.—
(1) IN GENERAL.—The Corporation, as receiver of a covered
financial company, may recover from any current or former
senior executive or director substantially responsible for the
failed condition of the covered financial company any compensation received during the 2-year period preceding the date on
which the Corporation was appointed as the receiver of the
covered financial company, except that, in the case of fraud,
no time limit shall apply.
(2) COST CONSIDERATIONS.—In seeking to recover any such
compensation, the Corporation shall weigh the financial and
deterrent benefits of such recovery against the cost of executing
the recovery.
(3) RULEMAKING.—The Corporation shall promulgate regulations to implement the requirements of this subsection,
including defining the term ‘‘compensation’’ to mean any financial remuneration, including salary, bonuses, incentives, benefits, severance, deferred compensation, or golden parachute
benefits, and any profits realized from the sale of the securities
of the covered financial company.
SEC. 211. MISCELLANEOUS PROVISIONS.

12 USC 5391.

(a) CLARIFICATION OF PROHIBITION REGARDING CONCEALMENT
ASSETS FROM RECEIVER OR LIQUIDATING AGENT.—Section
1032(1) of title 18, United States Code, is amended by inserting
‘‘the Federal Deposit Insurance Corporation acting as receiver for
a covered financial company, in accordance with title II of the
Dodd-Frank Wall Street Reform and Consumer Protection Act,’’
before ‘‘or the National Credit’’.
(b) CONFORMING AMENDMENT.—Section 1032 of title 18, United
States Code, is amended in the section heading, by striking ‘‘of
financial institution’’.
(c) FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT
ACT OF 1991.—Section 403(a) of the Federal Deposit Insurance
Corporation Improvement Act of 1991 (12 U.S.C. 4403(a)) is
amended by inserting ‘‘section 210(c) of the Dodd-Frank Wall Street
Reform and Consumer Protection Act, section 1367 of the Federal
Housing Enterprises Financial Safety and Soundness Act of 1992
(12 U.S.C. 4617(d)),’’ after ‘‘section 11(e) of the Federal Deposit
Insurance Act,’’.
(d) FDIC INSPECTOR GENERAL REVIEWS.—
(1) SCOPE.—The Inspector General of the Corporation shall
conduct, supervise, and coordinate audits and investigations
of the liquidation of any covered financial company by the
Corporation as receiver under this title, including collecting
and summarizing—
(A) a description of actions taken by the Corporation
as receiver;
(B) a description of any material sales, transfers, mergers, obligations, purchases, and other material transactions
entered into by the Corporation;
(C) an evaluation of the adequacy of the policies and
procedures of the Corporation under section 203(d) and
orderly liquidation plan under section 210(n)(14);
OF

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Audits.
Investigations.

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(D) an evaluation of the utilization by the Corporation
of the private sector in carrying out its functions, including
the adequacy of any conflict-of-interest reviews; and
(E) an evaluation of the overall performance of the
Corporation in liquidating the covered financial company,
including administrative costs, timeliness of liquidation
process, and impact on the financial system.
(2) FREQUENCY.—Not later than 6 months after the date
of appointment of the Corporation as receiver under this title
and every 6 months thereafter, the Inspector General of the
Corporation shall conduct the audit and investigation described
in paragraph (1).
(3) REPORTS AND TESTIMONY.—The Inspector General of
the Corporation shall include in the semiannual reports
required by section 5(a) of the Inspector General Act of 1978
(5 U.S.C. App.), a summary of the findings and evaluations
under paragraph (1), and shall appear before the appropriate
committees of Congress, if requested, to present each such
report.
(4) FUNDING.—
(A) INITIAL FUNDING.—The expenses of the Inspector
General of the Corporation in carrying out this subsection
shall be considered administrative expenses of the receivership.
(B) ADDITIONAL FUNDING.—If the maximum amount
available to the Corporation as receiver under this title
is insufficient to enable the Inspector General of the Corporation to carry out the duties under this subsection,
the Corporation shall pay such additional amounts from
assessments imposed under section 210.
(5) TERMINATION OF RESPONSIBILITIES.—The duties and
responsibilities of the Inspector General of the Corporation
under this subsection shall terminate 1 year after the date
of termination of the receivership under this title.
(e) TREASURY INSPECTOR GENERAL REVIEWS.—
(1) SCOPE.—The Inspector General of the Department of
the Treasury shall conduct, supervise, and coordinate audits
and investigations of actions taken by the Secretary related
to the liquidation of any covered financial company under this
title, including collecting and summarizing—
(A) a description of actions taken by the Secretary
under this title;
(B) an analysis of the approval by the Secretary of
the policies and procedures of the Corporation under section
203 and acceptance of the orderly liquidation plan of the
Corporation under section 210; and
(C) an assessment of the terms and conditions underlying the purchase by the Secretary of obligations of the
Corporation under section 210.
(2) FREQUENCY.—Not later than 6 months after the date
of appointment of the Corporation as receiver under this title
and every 6 months thereafter, the Inspector General of the
Department of the Treasury shall conduct the audit and investigation described in paragraph (1).
(3) REPORTS AND TESTIMONY.—The Inspector General of
the Department of the Treasury shall include in the semiannual
reports required by section 5(a) of the Inspector General Act

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Deadlines.

Audits.
Investigations.

Deadlines.

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Reports.

Evaluation.

Recommendation.

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12 USC 5392.

PUBLIC LAW 111–203—JULY 21, 2010

of 1978 (5 U.S.C. App.), a summary of the findings and assessments under paragraph (1), and shall appear before the appropriate committees of Congress, if requested, to present each
such report.
(4) TERMINATION OF RESPONSIBILITIES.—The duties and
responsibilities of the Inspector General of the Department
of the Treasury under this subsection shall terminate 1 year
after the date on which the obligations purchased by the Secretary from the Corporation under section 210 are fully
redeemed.
(f) PRIMARY FINANCIAL REGULATORY AGENCY INSPECTOR GENERAL REVIEWS.—
(1) SCOPE.—Upon the appointment of the Corporation as
receiver for a covered financial company supervised by a Federal primary financial regulatory agency or the Board of Governors under section 165, the Inspector General of the agency
or the Board of Governors shall make a written report reviewing
the supervision by the agency or the Board of Governors of
the covered financial company, which shall—
(A) evaluate the effectiveness of the agency or the
Board of Governors in carrying out its supervisory responsibilities with respect to the covered financial company;
(B) identify any acts or omissions on the part of agency
or Board of Governors officials that contributed to the
covered financial company being in default or in danger
of default;
(C) identify any actions that could have been taken
by the agency or the Board of Governors that would have
prevented the company from being in default or in danger
of default; and
(D) recommend appropriate administrative or legislative action.
(2) REPORTS AND TESTIMONY.—Not later than 1 year after
the date of appointment of the Corporation as receiver under
this title, the Inspector General of the Federal primary financial
regulatory agency or the Board of Governors shall provide
the report required by paragraph (1) to such agency or the
Board of Governors, and along with such agency or the Board
of Governors, as applicable, shall appear before the appropriate
committees of Congress, if requested, to present the report
required by paragraph (1). Not later than 90 days after the
date of receipt of the report required by paragraph (1), such
agency or the Board of Governors, as applicable, shall provide
a written report to Congress describing any actions taken in
response to the recommendations in the report, and if no such
actions were taken, describing the reasons why no actions
were taken.
SEC. 212. PROHIBITION OF CIRCUMVENTION AND PREVENTION OF
CONFLICTS OF INTEREST.

(a) NO OTHER FUNDING.—Funds for the orderly liquidation
of any covered financial company under this title shall only be
provided as specified under this title.
(b) LIMIT ON GOVERNMENTAL ACTIONS.—No governmental
entity may take any action to circumvent the purposes of this
title.

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(c) CONFLICT OF INTEREST.—In the event that the Corporation
is appointed receiver for more than 1 covered financial company
or is appointed receiver for a covered financial company and receiver
for any insured depository institution that is an affiliate of such
covered financial company, the Corporation shall take appropriate
action, as necessary to avoid any conflicts of interest that may
arise in connection with multiple receiverships.

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SEC. 213. BAN ON CERTAIN ACTIVITIES BY SENIOR EXECUTIVES AND
DIRECTORS.

(a) PROHIBITION AUTHORITY.—The Board of Governors or, if
the covered financial company was not supervised by the Board
of Governors, the Corporation, may exercise the authority provided
by this section.
(b) AUTHORITY TO ISSUE ORDER.—The appropriate agency
described in subsection (a) may take any action authorized by
subsection (c), if the agency determines that—
(1) a senior executive or a director of the covered financial
company, prior to the appointment of the Corporation as
receiver, has, directly or indirectly—
(A) violated—
(i) any law or regulation;
(ii) any cease-and-desist order which has become
final;
(iii) any condition imposed in writing by a Federal
agency in connection with any action on any application, notice, or request by such company or senior
executive; or
(iv) any written agreement between such company
and such agency;
(B) engaged or participated in any unsafe or unsound
practice in connection with any financial company; or
(C) committed or engaged in any act, omission, or
practice which constitutes a breach of the fiduciary duty
of such senior executive or director;
(2) by reason of the violation, practice, or breach described
in any subparagraph of paragraph (1), such senior executive
or director has received financial gain or other benefit by reason
of such violation, practice, or breach and such violation, practice, or breach contributed to the failure of the company; and
(3) such violation, practice, or breach—
(A) involves personal dishonesty on the part of such
senior executive or director; or
(B) demonstrates willful or continuing disregard by
such senior executive or director for the safety or soundness
of such company.
(c) AUTHORIZED ACTIONS.—
(1) IN GENERAL.—The appropriate agency for a financial
company, as described in subsection (a), may serve upon a
senior executive or director described in subsection (b) a written
notice of the intention of the agency to prohibit any further
participation by such person, in any manner, in the conduct
of the affairs of any financial company for a period of time
determined by the appropriate agency to be commensurate
with such violation, practice, or breach, provided such period
shall be not less than 2 years.

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12 USC 5393.

Notice.
Time period.

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Applicability.

(2) PROCEDURES.—The due process requirements and other
procedures under section 8(e) of the Federal Deposit Insurance
Act (12 U.S.C. 1818(e)) shall apply to actions under this section
as if the covered financial company were an insured depository
institution and the senior executive or director were an institution-affiliated party, as those terms are defined in that Act.
(d) REGULATIONS.—The Corporation and the Board of Governors, in consultation with the Council, shall jointly prescribe
rules or regulations to administer and carry out this section,
including rules, regulations, or guidelines to further define the
term senior executive for the purposes of this section.

12 USC 5394.

SEC. 214. PROHIBITION ON TAXPAYER FUNDING.

(a) LIQUIDATION REQUIRED.—All financial companies put into
receivership under this title shall be liquidated. No taxpayer funds
shall be used to prevent the liquidation of any financial company
under this title.
(b) RECOVERY OF FUNDS.—All funds expended in the liquidation
of a financial company under this title shall be recovered from
the disposition of assets of such financial company, or shall be
the responsibility of the financial sector, through assessments.
(c) NO LOSSES TO TAXPAYERS.—Taxpayers shall bear no losses
from the exercise of any authority under this title.

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SEC. 215. STUDY ON SECURED CREDITOR HAIRCUTS.

(a) STUDY REQUIRED.—The Council shall conduct a study evaluating the importance of maximizing United States taxpayer protections and promoting market discipline with respect to the treatment
of fully secured creditors in the utilization of the orderly liquidation
authority authorized by this Act. In carrying out such study, the
Council shall—
(1) not be prejudicial to current or past laws or regulations
with respect to secured creditor treatment in a resolution
process;
(2) study the similarities and differences between the resolution mechanisms authorized by the Bankruptcy Code, the
Federal Deposit Insurance Corporation Improvement Act of
1991, and the orderly liquidation authority authorized by this
Act;
(3) determine how various secured creditors are treated
in such resolution mechanisms and examine how a haircut
(of various degrees) on secured creditors could improve market
discipline and protect taxpayers;
(4) compare the benefits and dynamics of prudent lending
practices by depository institutions in secured loans for consumers and small businesses to the lending practices of secured
creditors to large, interconnected financial firms;
(5) consider whether credit differs according to different
types of collateral and different terms and timing of the extension of credit; amd
(6) include an examination of stakeholders who were
unsecured or under-collateralized and seek collateral when a
firm is failing, and the impact that such behavior has on
financial stability and an orderly resolution that protects taxpayers if the firm fails.
(b) REPORT.—Not later than the end of the 1-year period beginning on the date of enactment of this Act, the Council shall issue
a report to the Congress containing all findings and conclusions

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made by the Council in carrying out the study required under
subsection (a).
SEC. 216. STUDY ON BANKRUPTCY PROCESS FOR FINANCIAL AND
NONBANK FINANCIAL INSTITUTIONS.

(a) STUDY.—
(1) IN GENERAL.—Upon enactment of this Act, the Board
of Governors, in consultation with the Administrative Office
of the United States Courts, shall conduct a study regarding
the resolution of financial companies under the Bankruptcy
Code, under chapter 7 or 11 thereof .
(2) ISSUES TO BE STUDIED.—Issues to be studied under
this section include—
(A) the effectiveness of chapter 7 and chapter 11 of
the Bankruptcy Code in facilitating the orderly resolution
or reorganization of systemic financial companies;
(B) whether a special financial resolution court or panel
of special masters or judges should be established to oversee
cases involving financial companies to provide for the resolution of such companies under the Bankruptcy Code, in
a manner that minimizes adverse impacts on financial
markets without creating moral hazard;
(C) whether amendments to the Bankruptcy Code
should be adopted to enhance the ability of the Code to
resolve financial companies in a manner that minimizes
adverse impacts on financial markets without creating
moral hazard;
(D) whether amendments should be made to the Bankruptcy Code, the Federal Deposit Insurance Act, and other
insolvency laws to address the manner in which qualified
financial contracts of financial companies are treated; and
(E) the implications, challenges, and benefits to creating a new chapter or subchapter of the Bankruptcy Code
to deal with financial companies.
(b) REPORTS TO CONGRESS.—Not later than 1 year after the
date of enactment of this Act, and in each successive year until
the fifth year after the date of enactment of this Act, the Administrative Office of the United States courts shall submit to the
Committees on Banking, Housing, and Urban Affairs and the
Judiciary of the Senate and the Committees on Financial Services
and the Judiciary of the House of Representatives a report summarizing the results of the study conducted under subsection (a).

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SEC. 217. STUDY ON INTERNATIONAL COORDINATION RELATING TO
BANKRUPTCY PROCESS FOR NONBANK FINANCIAL
INSTITUTIONS.

(a) STUDY.—
(1) IN GENERAL.—The Board of Governors, in consultation
with the Administrative Office of the United States Courts,
shall conduct a study regarding international coordination
relating to the resolution of systemic financial companies under
the United States Bankruptcy Code and applicable foreign law.
(2) ISSUES TO BE STUDIED.—With respect to the bankruptcy
process for financial companies, issues to be studied under
this section include—
(A) the extent to which international coordination currently exists;

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(B) current mechanisms and structures for facilitating
international cooperation;
(C) barriers to effective international coordination; and
(D) ways to increase and make more effective international coordination of the resolution of financial companies, so as to minimize the impact on the financial system
without creating moral hazard.
(b) REPORT TO CONGRESS.—Not later than 1 year after the
date of enactment of this Act, the Administrative office of the
United States Courts shall submit to the Committees on Banking,
Housing, and Urban Affairs and the Judiciary of the Senate and
the Committees on Financial Services and the Judiciary of the
House of Representatives a report summarizing the results of the
study conducted under subsection (a).
Enhancing
Financial
Institution Safety
and Soundness
Act of 2010.

TITLE III—TRANSFER OF POWERS TO
THE COMPTROLLER OF THE CURRENCY, THE CORPORATION, AND THE
BOARD OF GOVERNORS

12 USC 5301
note.

SEC. 300. SHORT TITLE.

12 USC 5401.

SEC. 301. PURPOSES.

This title may be cited as the ‘‘Enhancing Financial Institution
Safety and Soundness Act of 2010’’.
The purposes of this title are—
(1) to provide for the safe and sound operation of the
banking system of the United States;
(2) to preserve and protect the dual system of Federal
and State-chartered depository institutions;
(3) to ensure the fair and appropriate supervision of each
depository institution, regardless of the size or type of charter
of the depository institution; and
(4) to streamline and rationalize the supervision of depository institutions and the holding companies of depository
institutions.

12 USC 5402.

SEC. 302. DEFINITION.

In this title, the term ‘‘transferred employee’’ means, as the
context requires, an employee transferred to the Office of the Comptroller of the Currency or the Corporation under section 322.

Subtitle A—Transfer of Powers and Duties
12 USC 5411.

SEC. 311. TRANSFER DATE.

Definition.

(a) TRANSFER DATE.—Except as provided in subsection (b), the
term ‘‘transfer date’’ means the date that is 1 year after the date
of enactment of this Act.
(b) EXTENSION PERMITTED.—
(1) NOTICE REQUIRED.—The Secretary, in consultation with
the Comptroller of the Currency, the Director of the Office
of Thrift Supervision, the Chairman of the Board of Governors,
and the Chairperson of the Corporation, may extend the period
under subsection (a) and designate a transfer date that is

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Deadline.

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not later than 18 months after the date of enactment of this
Act, if the Secretary transmits to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee
on Financial Services of the House of Representatives—
(A) a written determination that commencement of
the orderly process to implement this title is not feasible
by the date that is 1 year after the date of enactment
of this Act;
(B) an explanation of why an extension is necessary
to commence the process of orderly implementation of this
title;
(C) the transfer date designated under this subsection;
and
(D) a description of the steps that will be taken to
initiate the process of an orderly and timely implementation of this title within the extended time period.
(2) PUBLICATION OF NOTICE.—Not later than 270 days after
the date of enactment of this Act, the Secretary shall publish
in the Federal Register notice of any transfer date designated
under paragraph (1).

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SEC. 312. POWERS AND DUTIES TRANSFERRED.

Deadline.
Federal Register,
publication.

12 USC 5412.

(a) EFFECTIVE DATE.—This section, and the amendments made
by this section, shall take effect on the transfer date.
(b) FUNCTIONS OF THE OFFICE OF THRIFT SUPERVISION.—
(1) SAVINGS AND LOAN HOLDING COMPANY FUNCTIONS
TRANSFERRED.—
(A) TRANSFER OF FUNCTIONS.—There are transferred
to the Board of Governors all functions of the Office of
Thrift Supervision and the Director of the Office of Thrift
Supervision (including the authority to issue orders)
relating to—
(i) the supervision of—
(I) any savings and loan holding company; and
(II) any subsidiary (other than a depository
institution) of a savings and loan holding company;
and
(ii) all rulemaking authority of the Office of Thrift
Supervision and the Director of the Office of Thrift
Supervision relating to savings and loan holding
companies.
(B) POWERS, AUTHORITIES, RIGHTS, AND DUTIES.—The
Board of Governors shall succeed to all powers, authorities,
rights, and duties that were vested in the Office of Thrift
Supervision and the Director of the Office of Thrift Supervision on the day before the transfer date relating to the
functions and authority transferred under subparagraph
(A).
(2) ALL OTHER FUNCTIONS TRANSFERRED.—
(A) BOARD OF GOVERNORS.—All rulemaking authority
of the Office of Thrift Supervision and the Director of
the Office of Thrift Supervision under section 11 of the
Home Owners’ Loan Act (12 U.S.C. 1468) relating to transactions with affiliates and extensions of credit to executive
officers, directors, and principal shareholders and under
section 5(q) of such Act relating to tying arrangements
is transferred to the Board of Governors.

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(B) COMPTROLLER OF THE CURRENCY.—Except as provided in paragraph (1) and subparagraph (A)—
(i) there are transferred to the Office of the Comptroller of the Currency and the Comptroller of the
Currency—
(I) all functions of the Office of Thrift Supervision and the Director of the Office of Thrift
Supervision, respectively, relating to Federal
savings associations; and
(II) all rulemaking authority of the Office of
Thrift Supervision and the Director of the Office
of Thrift Supervision, respectively, relating to
savings associations; and
(ii) the Office of the Comptroller of the Currency
and the Comptroller of the Currency shall succeed
to all powers, authorities, rights, and duties that were
vested in the Office of Thrift Supervision and the
Director of the Office of Thrift Supervision, respectively, on the day before the transfer date relating
to the functions and authority transferred under clause
(i).
(C) CORPORATION.—Except as provided in paragraph
(1) and subparagraphs (A) and (B)—
(i) all functions of the Office of Thrift Supervision
and the Director of the Office of Thrift Supervision
relating to State savings associations are transferred
to the Corporation; and
(ii) the Corporation shall succeed to all powers,
authorities, rights, and duties that were vested in the
Office of Thrift Supervision and the Director of the
Office of Thrift Supervision on the day before the
transfer date relating to the functions transferred
under clause (i).
(c) CONFORMING AMENDMENTS.—Section 3 of the Federal
Deposit Insurance Act (12 U.S.C. 1813) is amended—
(1) in subsection (q), by striking paragraphs (1) through
(4) and inserting the following:
‘‘(1) the Office of the Comptroller of the Currency, in the
case of—
‘‘(A) any national banking association;
‘‘(B) any Federal branch or agency of a foreign bank;
and
‘‘(C) any Federal savings association;
‘‘(2) the Federal Deposit Insurance Corporation, in the case
of—
‘‘(A) any State nonmember insured bank;
‘‘(B) any foreign bank having an insured branch; and
‘‘(C) any State savings association;
‘‘(3) the Board of Governors of the Federal Reserve System,
in the case of—
‘‘(A) any State member bank;
‘‘(B) any branch or agency of a foreign bank with
respect to any provision of the Federal Reserve Act which
is made applicable under the International Banking Act
of 1978;
‘‘(C) any foreign bank which does not operate an
insured branch;

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‘‘(D) any agency or commercial lending company other
than a Federal agency;
‘‘(E) supervisory or regulatory proceedings arising from
the authority given to the Board of Governors under section
7(c)(1) of the International Banking Act of 1978, including
such proceedings under the Financial Institutions Supervisory Act of 1966;
‘‘(F) any bank holding company and any subsidiary
(other than a depository institution) of a bank holding
company; and
‘‘(G) any savings and loan holding company and any
subsidiary (other than a depository institution) of a savings
and loan holding company.’’; and
(2) in paragraphs (1) and (3) of subsection (u), by striking
‘‘(other than a bank holding company’’ and inserting ‘‘(other
than a bank holding company or savings and loan holding
company’’.
(d) CONSUMER PROTECTION.—Nothing in this section may be
construed to limit or otherwise affect the transfer of powers under
title X.
SEC. 313. ABOLISHMENT.

12 USC 5413.

Effective 90 days after the transfer date, the Office of Thrift
Supervision and the position of Director of the Office of Thrift
Supervision are abolished.

Effective date.

SEC. 314. AMENDMENTS TO THE REVISED STATUTES.

(a) AMENDMENT TO SECTION 324.—Section 324 of the Revised
Statutes of the United States (12 U.S.C. 1) is amended to read
as follows:
‘‘SEC. 324. COMPTROLLER OF THE CURRENCY.

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‘‘(a) OFFICE OF THE COMPTROLLER OF THE CURRENCY ESTABLISHED.—There is established in the Department of the Treasury
a bureau to be known as the ‘Office of the Comptroller of the
Currency’ which is charged with assuring the safety and soundness
of, and compliance with laws and regulations, fair access to financial
services, and fair treatment of customers by, the institutions and
other persons subject to its jurisdiction.
‘‘(b) COMPTROLLER OF THE CURRENCY.—
‘‘(1) IN GENERAL.—The chief officer of the Office of the
Comptroller of the Currency shall be known as the Comptroller
of the Currency. The Comptroller of the Currency shall perform
the duties of the Comptroller of the Currency under the general
direction of the Secretary of the Treasury. The Secretary of
the Treasury may not delay or prevent the issuance of any
rule or the promulgation of any regulation by the Comptroller
of the Currency, and may not intervene in any matter or
proceeding before the Comptroller of the Currency (including
agency enforcement actions), unless otherwise specifically provided by law.
‘‘(2) ADDITIONAL AUTHORITY.—The Comptroller of the Currency shall have the same authority with respect to functions
transferred to the Comptroller of the Currency under the
Enhancing Financial Institution Safety and Soundness Act of
2010 as was vested in the Director of the Office of Thrift
Supervision on the transfer date, as defined in section 311
of that Act.’’.

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(b) SUPERVISION OF FEDERAL SAVINGS ASSOCIATIONS.—Chapter
9 of title VII of the Revised Statutes of the United States (12
U.S.C. 1 et seq.) is amended by inserting after section 327A (12
U.S.C. 4a) the following:
12 USC 4b.

‘‘SEC. 327B. DEPUTY COMPTROLLER FOR THE SUPERVISION AND
EXAMINATION OF FEDERAL SAVINGS ASSOCIATIONS.

Designation.

‘‘The Comptroller of the Currency shall designate a Deputy
Comptroller, who shall be responsible for the supervision and examination of Federal savings associations.’’.
(c) AMENDMENT TO SECTION 329.—Section 329 of the Revised
Statutes of the United States (12 U.S.C. 11) is amended by inserting
before the period at the end the following: ‘‘or any Federal savings
association’’.
(d) EFFECTIVE DATE.—This section, and the amendments made
by this section, shall take effect on the transfer date.

12 USC 1 note.

SEC. 315. FEDERAL INFORMATION POLICY.

Section 3502(5) of title 44, United States Code, is amended
by inserting ‘‘Office of the Comptroller of the Currency,’’ after
‘‘the Securities and Exchange Commission,’’.

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12 USC 5414.

SEC. 316. SAVINGS PROVISIONS.

(a) OFFICE OF THRIFT SUPERVISION.—
(1) EXISTING RIGHTS, DUTIES, AND OBLIGATIONS NOT
AFFECTED.—Sections 312(b) and 313 shall not affect the validity
of any right, duty, or obligation of the United States, the
Director of the Office of Thrift Supervision, the Office of Thrift
Supervision, or any other person, that existed on the day before
the transfer date.
(2) CONTINUATION OF SUITS.—This title shall not abate
any action or proceeding commenced by or against the Director
of the Office of Thrift Supervision or the Office of Thrift Supervision before the transfer date, except that—
(A) for any action or proceeding arising out of a function of the Office of Thrift Supervision or the Director
of the Office of Thrift Supervision transferred to the Board
of Governors by this title, the Board of Governors shall
be substituted for the Office of Thrift Supervision or the
Director of the Office of Thrift Supervision as a party
to the action or proceeding on and after the transfer date;
(B) for any action or proceeding arising out of a function of the Office of Thrift Supervision or the Director
of the Office of Thrift Supervision transferred to the Office
of the Comptroller of the Currency or the Comptroller
of the Currency by this title, the Office of the Comptroller
of the Currency or the Comptroller of the Currency shall
be substituted for the Office of Thrift Supervision or the
Director of the Office of Thrift Supervision, as the case
may be, as a party to the action or proceeding on and
after the transfer date; and
(C) for any action or proceeding arising out of a function of the Office of Thrift Supervision or the Director
of the Office of Thrift Supervision transferred to the Corporation by this title, the Corporation shall be substituted
for the Office of Thrift Supervision or the Director of the
Office of Thrift Supervision as a party to the action or
proceeding on and after the transfer date.

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124 STAT. 1525

(b) CONTINUATION OF EXISTING OTS ORDERS, RESOLUTIONS,
DETERMINATIONS, AGREEMENTS, REGULATIONS, ETC.—All orders,
resolutions,
determinations,
agreements,
and
regulations,
interpretative rules, other interpretations, guidelines, procedures,
and other advisory materials, that have been issued, made, prescribed, or allowed to become effective by the Office of Thrift Supervision or the Director of the Office of Thrift Supervision, or by
a court of competent jurisdiction, in the performance of functions
that are transferred by this title and that are in effect on the
day before the transfer date, shall continue in effect according
to the terms of such orders, resolutions, determinations, agreements, and regulations, interpretative rules, other interpretations,
guidelines, procedures, and other advisory materials, and shall be
enforceable by or against—
(1) the Board of Governors, in the case of a function of
the Office of Thrift Supervision or the Director of the Office
of Thrift Supervision transferred to the Board of Governors,
until modified, terminated, set aside, or superseded in accordance with applicable law by the Board of Governors, by any
court of competent jurisdiction, or by operation of law;
(2) the Office of the Comptroller of the Currency or the
Comptroller of the Currency, in the case of a function of the
Office of Thrift Supervision or the Director of the Office of
Thrift Supervision transferred to the Office of the Comptroller
of the Currency or the Comptroller of the Currency, respectively, until modified, terminated, set aside, or superseded in
accordance with applicable law by the Office of the Comptroller
of the Currency or the Comptroller of the Currency, by any
court of competent jurisdiction, or by operation of law; and
(3) the Corporation, in the case of a function of the Office
of Thrift Supervision or the Director of the Office of Thrift
Supervision transferred to the Corporation, until modified,
terminated, set aside, or superseded in accordance with
applicable law by the Corporation, by any court of competent
jurisdiction, or by operation of law.
(c) IDENTIFICATION OF REGULATIONS CONTINUED.—
(1) BY THE BOARD OF GOVERNORS.—Not later than the
transfer date, the Board of Governors shall—
(A) identify the regulations continued under subsection
(b) that will be enforced by the Board of Governors; and
(B) publish a list of the regulations identified under
subparagraph (A) in the Federal Register.
(2) BY OFFICE OF THE COMPTROLLER OF THE CURRENCY.—
Not later than the transfer date, the Office of the Comptroller
of the Currency shall—
(A) after consultation with the Corporation, identify
the regulations continued under subsection (b) that will
be enforced by the Office of the Comptroller of the Currency; and
(B) publish a list of the regulations identified under
subparagraph (A) in the Federal Register.
(3) BY THE CORPORATION.—Not later than the transfer date,
the Corporation shall—
(A) after consultation with the Office of the Comptroller
of the Currency, identify the regulations continued under
subsection (b) that will be enforced by the Corporation;
and

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(B) publish a list of the regulations identified under
subparagraph (A) in the Federal Register.
(d) STATUS OF REGULATIONS PROPOSED OR NOT YET EFFECTIVE.—
(1) PROPOSED REGULATIONS.—Any proposed regulation of
the Office of Thrift Supervision, which the Office of Thrift
Supervision in performing functions transferred by this title,
has proposed before the transfer date but has not published
as a final regulation before such date, shall be deemed to
be a proposed regulation of the Office of the Comptroller of
the Currency or the Board of Governors, as appropriate,
according to the terms of the proposed regulation.
(2) REGULATIONS NOT YET EFFECTIVE.—Any interim or final
regulation of the Office of Thrift Supervision, which the Office
of Thrift Supervision, in performing functions transferred by
this title, has published before the transfer date but which
has not become effective before that date, shall become effective
as a regulation of the Office of the Comptroller of the Currency
or the Board of Governors, as appropriate, according to the
terms of the interim or final regulation, unless modified, terminated, set aside, or superseded in accordance with applicable
law by the Office of the Comptroller of the Currency or the
Board of Governors, as appropriate, by any court of competent
jurisdiction, or by operation of law.
12 USC 5415.

SEC. 317. REFERENCES IN FEDERAL LAW TO FEDERAL BANKING AGENCIES.

On and after the transfer date, any reference in Federal law
to the Director of the Office of Thrift Supervision or the Office
of Thrift Supervision, in connection with any function of the Director
of the Office of Thrift Supervision or the Office of Thrift Supervision
transferred under section 312(b) or any other provision of this
subtitle, shall be deemed to be a reference to the Comptroller
of the Currency, the Office of the Comptroller of the Currency,
the Chairperson of the Corporation, the Corporation, the Chairman
of the Board of Governors, or the Board of Governors, as appropriate
and consistent with the amendments made in subtitle E.

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SEC. 318. FUNDING.

12 USC 16.

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(a) COMPENSATION OF EXAMINERS.—Section 5240 of the Revised
Statutes of the United States (12 U.S.C. 481 et seq.) is amended—
(1) in the second undesignated paragraph (12 U.S.C. 481),
in the fourth sentence, by striking ‘‘without regard to the provisions of other laws applicable to officers or employees of the
United States’’ and inserting the following: ‘‘set and adjusted
subject to chapter 71 of title 5, United States Code, and without
regard to the provisions of other laws applicable to officers
or employees of the United States’’; and
(2) in the third undesignated paragraph (12 U.S.C. 482),
in the first sentence, by striking ‘‘shall fix’’ and inserting ‘‘shall,
subject to chapter 71 of title 5, United States Code, fix’’.
(b) FUNDING OF OFFICE OF THE COMPTROLLER OF THE CURRENCY.—Chapter 4 of title LXII of the Revised Statutes is amended
by inserting after section 5240 (12 U.S.C. 481, 482) the following:
‘‘SEC. 5240A. The Comptroller of the Currency may collect
an assessment, fee, or other charge from any entity described in
section 3(q)(1) of the Federal Deposit Insurance Act (12 U.S.C.

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124 STAT. 1527

1813(q)(1)), as the Comptroller determines is necessary or appropriate to carry out the responsibilities of the Office of the Comptroller of the Currency. In establishing the amount of an assessment, fee, or charge collected from an entity under this section,
the Comptroller of the Currency may take into account the nature
and scope of the activities of the entity, the amount and type
of assets that the entity holds, the financial and managerial condition of the entity, and any other factor, as the Comptroller of
the Currency determines is appropriate. Funds derived from any
assessment, fee, or charge collected or payment made pursuant
to this section may be deposited by the Comptroller of the Currency
in accordance with the provisions of section 5234. Such funds shall
not be construed to be Government funds or appropriated monies,
and shall not be subject to apportionment for purposes of chapter
15 of title 31, United States Code, or any other provision of law.
The authority of the Comptroller of the Currency under this section
shall be in addition to the authority under section 5240.
‘‘The Comptroller of the Currency shall have sole authority
to determine the manner in which the obligations of the Office
of the Comptroller of the Currency shall be incurred and its
disbursements and expenses allowed and paid, in accordance with
this section, except as provided in chapter 71 of title 5, United
States Code (with respect to compensation).’’.
(c) FUNDING OF BOARD OF GOVERNORS.—Section 11 of the Federal Reserve Act (12 U.S.C. 248) is amended by adding at the
end the following:
‘‘(s) ASSESSMENTS, FEES, AND OTHER CHARGES FOR CERTAIN
COMPANIES.—
‘‘(1) IN GENERAL.—The Board shall collect a total amount
of assessments, fees, or other charges from the companies
described in paragraph (2) that is equal to the total expenses
the Board estimates are necessary or appropriate to carry out
the supervisory and regulatory responsibilities of the Board
with respect to such companies.
‘‘(2) COMPANIES.—The companies described in this paragraph are—
‘‘(A) all bank holding companies having total consolidated assets of $50,000,000,000 or more;
‘‘(B) all savings and loan holding companies having
total consolidated assets of $50,000,000,000 or more; and
‘‘(C) all nonbank financial companies supervised by
the Board under section 113 of the Dodd-Frank Wall Street
Reform and Consumer Protection Act.’’.
(d) CORPORATION EXAMINATION FEES.—Section 10(e) of the Federal Deposit Insurance Act (12 U.S.C. 1820(e)) is amended by
striking paragraph (1) and inserting the following:
‘‘(1) REGULAR AND SPECIAL EXAMINATIONS OF DEPOSITORY
INSTITUTIONS.—The cost of conducting any regular examination
or special examination of any depository institution under subsection (b)(2), (b)(3), or (d) or of any entity described in section
3(q)(2) may be assessed by the Corporation against the institution or entity to meet the expenses of the Corporation in carrying out such examinations.’’.
(e) EFFECTIVE DATE.—This section, and the amendments made
by this section, shall take effect on the transfer date.

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124 STAT. 1528
12 USC 5416.

PUBLIC LAW 111–203—JULY 21, 2010

SEC. 319. CONTRACTING AND LEASING AUTHORITY.

Notwithstanding the Federal Property and Administrative
Services Act of 1949 (41 U.S.C. 251 et seq.) or any other provision
of law (except the full and open competition requirements of the
Competition in Contracting Act), the Office of the Comptroller of
the Currency may—
(1) enter into and perform contracts, execute instruments,
and acquire real property (or property interest) as the Comptroller deems necessary to carry out the duties and responsibilities of the Office of the Comptroller of the Currency; and
(2) hold, maintain, sell, lease, or otherwise dispose of the
property (or property interest) acquired under paragraph (1).

Subtitle B—Transitional Provisions
12 USC 5431.

SEC. 321. INTERIM USE OF FUNDS, PERSONNEL, AND PROPERTY OF
THE OFFICE OF THRIFT SUPERVISION.

Consultation.

Determination.

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(a) IN GENERAL.—Before the transfer date, the Office of the
Comptroller of the Currency, the Corporation, and the Board of
Governors shall—
(1) consult and cooperate with the Office of Thrift Supervision to facilitate the orderly transfer of functions to the Office
of the Comptroller of the Currency, the Corporation, and the
Board of Governors in accordance with this title;
(2) determine jointly, from time to time—
(A) the amount of funds necessary to pay any expenses
associated with the transfer of functions (including
expenses for personnel, property, and administrative services) during the period beginning on the date of enactment
of this Act and ending on the transfer date;
(B) which personnel are appropriate to facilitate the
orderly transfer of functions by this title; and
(C) what property and administrative services are necessary to support the Office of the Comptroller of the
Currency, the Corporation, and the Board of Governors
during the period beginning on the date of enactment of
this Act and ending on the transfer date; and
(3) take such actions as may be necessary to provide for
the orderly implementation of this title.
(b) AGENCY CONSULTATION.—When requested jointly by the
Office of the Comptroller of the Currency, the Corporation, and
the Board of Governors to do so before the transfer date, the
Office of Thrift Supervision shall—
(1) pay to the Office of the Comptroller of the Currency,
the Corporation, or the Board of Governors, as applicable, from
funds obtained by the Office of Thrift Supervision through
assessments, fees, or other charges that the Office of Thrift
Supervision is authorized by law to impose, such amounts
as the Office of the Comptroller of the Currency, the Corporation, and the Board of Governors jointly determine to be necessary under subsection (a);
(2) detail to the Office of the Comptroller of the Currency,
the Corporation, or the Board of Governors, as applicable, such
personnel as the Office of the Comptroller of the Currency,
the Corporation, and the Board of Governors jointly determine
to be appropriate under subsection (a); and

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124 STAT. 1529

(3) make available to the Office of the Comptroller of the
Currency, the Corporation, or the Board of Governors, as
applicable, such property and provide to the Office of the Comptroller of the Currency, the Corporation, or the Board of Governors, as applicable, such administrative services as the Office
of the Comptroller of the Currency, the Corporation, and the
Board of Governors jointly determine to be necessary under
subsection (a).
(c) NOTICE REQUIRED.—The Office of the Comptroller of the
Currency, the Corporation, and the Board of Governors shall jointly
give the Office of Thrift Supervision reasonable prior notice of
any request that the Office of the Comptroller of the Currency,
the Corporation, and the Board of Governors jointly intend to make
under subsection (b).

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SEC. 322. TRANSFER OF EMPLOYEES.

12 USC 5432.

(a) IN GENERAL.—
(1) OFFICE OF THRIFT SUPERVISION EMPLOYEES.—
(A) IN GENERAL.—Except as provided in section 1064,
all employees of the Office of Thrift Supervision shall be
transferred to the Office of the Comptroller of the Currency
or the Corporation for employment in accordance with this
section.
(B) ALLOCATING EMPLOYEES FOR TRANSFER TO
RECEIVING AGENCIES.—The Director of the Office of Thrift
Supervision, the Comptroller of the Currency, and the
Chairperson of the Corporation shall—
(i) jointly determine the number of employees of
the Office of Thrift Supervision necessary to perform
or support the functions that are transferred to the
Office of the Comptroller of the Currency or the Corporation by this title; and
(ii) consistent with the determination under clause
(i), jointly identify employees of the Office of Thrift
Supervision for transfer to the Office of the Comptroller
of the Currency or the Corporation.
(2) EMPLOYEES TRANSFERRED; SERVICE PERIODS CREDITED.—
For purposes of this section, periods of service with a Federal
home loan bank, a joint office of Federal home loan banks,
or a Federal reserve bank shall be credited as periods of service
with a Federal agency.
(3) APPOINTMENT AUTHORITY FOR EXCEPTED SERVICE TRANSFERRED.—
(A) IN GENERAL.—Except as provided in subparagraph
(B), any appointment authority of the Office of Thrift
Supervision under Federal law that relates to the functions
transferred under section 312, including the regulations
of the Office of Personnel Management, for filling the positions of employees in the excepted service shall be transferred to the Comptroller of the Currency or the Chairperson of the Corporation, as appropriate.
(B) DECLINING TRANSFERS ALLOWED.—The Comptroller
of the Currency or the Chairperson of the Corporation
may decline to accept a transfer of authority under
subparagraph (A) (and the employees appointed under that
authority) to the extent that such authority relates to positions excepted from the competitive service because of their

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Deadlines.

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Notice.

Time period.

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confidential, policy-making, policy-determining, or policyadvocating character.
(4) ADDITIONAL APPOINTMENT AUTHORITY.—Notwithstanding any other provision of law, the Office of the Comptroller of the Currency and the Corporation may appoint transferred employees to positions in the Office of the Comptroller
of the Currency or the Corporation, respectively.
(b) TIMING OF TRANSFERS AND POSITION ASSIGNMENTS.—Each
employee to be transferred under subsection (a)(1) shall—
(1) be transferred not later than 90 days after the transfer
date; and
(2) receive notice of the position assignment of the employee
not later than 120 days after the effective date of the transfer
of the employee.
(c) TRANSFER OF FUNCTIONS.—
(1) IN GENERAL.—Notwithstanding any other provision of
law, the transfer of employees under this subtitle shall be
deemed a transfer of functions for the purpose of section 3503
of title 5, United States Code.
(2) PRIORITY.—If any provision of this subtitle conflicts
with any protection provided to a transferred employee under
section 3503 of title 5, United States Code, the provisions
of this subtitle shall control.
(d) EMPLOYEE STATUS AND ELIGIBILITY.—The transfer of functions and employees under this subtitle, and the abolishment of
the Office of Thrift Supervision under section 313, shall not affect
the status of the transferred employees as employees of an agency
of the United States under any provision of law.
(e) EQUAL STATUS AND TENURE POSITIONS.—
(1) STATUS AND TENURE.—Each transferred employee from
the Office of Thrift Supervision shall be placed in a position
at the Office of the Comptroller of the Currency or the Corporation with the same status and tenure as the transferred
employee held on the day before the date on which the employee
was transferred.
(2) FUNCTIONS.—To the extent practicable, each transferred
employee shall be placed in a position at the Office of the
Comptroller of the Currency or the Corporation, as applicable,
responsible for the same functions and duties as the transferred
employee had on the day before the date on which the employee
was transferred, in accordance with the expertise and preferences of the transferred employee.
(f) NO ADDITIONAL CERTIFICATION REQUIREMENTS.—An examiner who is a transferred employee shall not be subject to any
additional certification requirements before being placed in a comparable position at the Office of the Comptroller of the Currency
or the Corporation, if the examiner carries out examinations of
the same type of institutions as an employee of the Office of the
Comptroller of the Currency or the Corporation as the employee
was responsible for carrying out before the date on which the
employee was transferred.
(g) PERSONNEL ACTIONS LIMITED.—
(1) PROTECTION.—
(A) IN GENERAL.—Except as provided in paragraph (2),
each affected employee shall not, during the 30-month
period beginning on the transfer date, be involuntarily

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separated, or involuntarily reassigned outside his or her
locality pay area.
(B) AFFECTED EMPLOYEES.—For purposes of this paragraph, the term ‘‘affected employee’’ means—
(i) an employee transferred from the Office of
Thrift Supervision holding a permanent position on
the day before the transfer date; and
(ii) an employee of the Office of the Comptroller
of the Currency or the Corporation holding a permanent position on the day before the transfer date.
(2) EXCEPTIONS.—Paragraph (1) does not limit the right
of the Office of the Comptroller of the Currency or the Corporation to—
(A) separate an employee for cause or for unacceptable
performance;
(B) terminate an appointment to a position excepted
from the competitive service because of its confidential
policy-making, policy-determining, or policy-advocating
character; or
(C) reassign an employee outside such employee’s
locality pay area when the Office of the Comptroller of
the Currency or the Corporation determines that the
reassignment is necessary for the efficient operation of
the agency.
(h) PAY.—
(1) 30-MONTH PROTECTION.—Except as provided in paragraph (2), during the 30-month period beginning on the date
on which the employee was transferred under this subtitle,
a transferred employee shall be paid at a rate that is not
less than the basic rate of pay, including any geographic differential, that the transferred employee received during the
pay period immediately preceding the date on which the
employee was transferred. Notwithstanding the preceding sentence, if the employee was receiving a higher rate of basic
pay on a temporary basis (because of a temporary assignment,
temporary promotion, or other temporary action) immediately
before the transfer, the Agency may reduce the rate of basic
pay on the date the rate would have been reduced but for
the transfer, and the protected rate for the remainder of the
30-month period will be the reduced rate that would have
applied but for the transfer.
(2) EXCEPTIONS.—The Comptroller of the Currency or the
Corporation may reduce the rate of basic pay of a transferred
employee—
(A) for cause, including for unacceptable performance;
or
(B) with the consent of the transferred employee.
(3) PROTECTION ONLY WHILE EMPLOYED.—This subsection
shall apply to a transferred employee only during the period
that the transferred employee remains employed by Office of
the Comptroller of the Currency or the Corporation.
(4) PAY INCREASES PERMITTED.—Nothing in this subsection
shall limit the authority of the Comptroller of the Currency
or the Chairperson of the Corporation to increase the pay
of a transferred employee.
(i) BENEFITS.—
(1) RETIREMENT BENEFITS FOR TRANSFERRED EMPLOYEES.—

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(A) IN GENERAL.—
(i) CONTINUATION OF EXISTING RETIREMENT PLAN.—
Each transferred employee shall remain enrolled in
the retirement plan of the transferred employee, for
as long as the transferred employee is employed by
the Office of the Comptroller of the Currency or the
Corporation.
(ii) EMPLOYER’S CONTRIBUTION.—The Comptroller
of the Currency or the Chairperson of the Corporation,
as appropriate, shall pay any employer contributions
to the existing retirement plan of each transferred
employee, as required under each such existing retirement plan.
(B) DEFINITION.—In this paragraph, the term ‘‘existing
retirement plan’’ means, with respect to a transferred
employee, the retirement plan (including the Financial
Institutions Retirement Fund), and any associated thrift
savings plan, of the agency from which the employee was
transferred in which the employee was enrolled on the
day before the date on which the employee was transferred.
(2) BENEFITS OTHER THAN RETIREMENT BENEFITS.—
(A) DURING FIRST YEAR.—
(i) EXISTING PLANS CONTINUE.—During the 1-year
period following the transfer date, each transferred
employee may retain membership in any employee benefit program (other than a retirement benefit program)
of the agency from which the employee was transferred
under this title, including any dental, vision, long term
care, or life insurance program to which the employee
belonged on the day before the transfer date.
(ii) EMPLOYER’S CONTRIBUTION.—The Office of the
Comptroller of the Currency or the Corporation, as
appropriate, shall pay any employer cost required to
extend coverage in the benefit program to the transferred employee as required under that program or
negotiated agreements.
(B) DENTAL, VISION, OR LIFE INSURANCE AFTER FIRST
YEAR.—If, after the 1-year period beginning on the transfer
date, the Office of the Comptroller of the Currency or
the Corporation determines that the Office of the Comptroller of the Currency or the Corporation, as the case
may be, will not continue to participate in any dental,
vision, or life insurance program of an agency from which
an employee was transferred, a transferred employee who
is a member of the program may, before the decision takes
effect and without regard to any regularly scheduled open
season, elect to enroll in—
(i) the enhanced dental benefits program established under chapter 89A of title 5, United States
Code;
(ii) the enhanced vision benefits established under
chapter 89B of title 5, United States Code; and
(iii) the Federal Employees’ Group Life Insurance
Program established under chapter 87 of title 5, United
States Code, without regard to any requirement of
insurability.

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124 STAT. 1533

(C) LONG TERM CARE INSURANCE AFTER 1ST YEAR.—
If, after the 1-year period beginning on the transfer date,
the Office of the Comptroller of the Currency or the Corporation determines that the Office of the Comptroller of
the Currency or the Corporation, as appropriate, will not
continue to participate in any long term care insurance
program of an agency from which an employee transferred,
a transferred employee who is a member of such a program
may, before the decision takes effect, elect to apply for
coverage under the Federal Long Term Care Insurance
Program established under chapter 90 of title 5, United
States Code, under the underwriting requirements
applicable to a new active workforce member, as described
in part 875 of title 5, Code of Federal Regulations (or
any successor thereto).
(D) CONTRIBUTION OF TRANSFERRED EMPLOYEE.—
(i) IN GENERAL.—Subject to clause (ii), a transferred employee who is enrolled in a plan under the
Federal Employees Health Benefits Program shall pay
any employee contribution required under the plan.
(ii) COST DIFFERENTIAL.—The Office of the Comptroller of the Currency or the Corporation, as
applicable, shall pay any difference in cost between
the employee contribution required under the plan provided to transferred employees by the agency from
which the employee transferred on the date of enactment of this Act and the plan provided by the Office
of the Comptroller of the Currency or the Corporation,
as the case may be, under this section.
(iii) FUNDS TRANSFER.—The Office of the Comptroller of the Currency or the Corporation, as the case
may be, shall transfer to the Employees Health Benefits Fund established under section 8909 of title 5,
United States Code, an amount determined by the
Director of the Office of Personnel Management, after
consultation with the Comptroller of the Currency or
the Chairperson of the Corporation, as the case may
be, and the Office of Management and Budget, to be
necessary to reimburse the Fund for the cost to the
Fund of providing any benefits under this subparagraph that are not otherwise paid for by a transferred
employee under clause (i).
(E) SPECIAL PROVISIONS TO ENSURE CONTINUATION OF
LIFE INSURANCE BENEFITS.—
(i) IN GENERAL.—An annuitant, as defined in section 8901 of title 5, United States Code, who is enrolled
in a life insurance plan administered by an agency
from which employees are transferred under this title
on the day before the transfer date shall be eligible
for coverage by a life insurance plan under sections
8706(b), 8714a, 8714b, or 8714c of title 5, United States
Code, or by a life insurance plan established by the
Office of the Comptroller of the Currency or the Corporation, as applicable, without regard to any regularly
scheduled open season or any requirement of insurability.
(ii) CONTRIBUTION OF TRANSFERRED EMPLOYEE.—

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(I) IN GENERAL.—Subject to subclause (II), a
transferred employee enrolled in a life insurance
plan under this subparagraph shall pay any
employee contribution required by the plan.
(II) COST DIFFERENTIAL.—The Office of the
Comptroller of the Currency or the Corporation,
as the case may be, shall pay any difference in
cost between the benefits provided by the agency
from which the employee transferred on the date
of enactment of this Act and the benefits provided
under this section.
(III) FUNDS TRANSFER.—The Office of the
Comptroller of the Currency or the Corporation,
as the case may be, shall transfer to the Federal
Employees’ Group Life Insurance Fund established
under section 8714 of title 5, United States Code,
an amount determined by the Director of the Office
of Personnel Management, after consultation with
the Comptroller of the Currency or the Chairperson of the Corporation, as the case may be,
and the Office of Management and Budget, to be
necessary to reimburse the Federal Employees’
Group Life Insurance Fund for the cost to the
Federal Employees’ Group Life Insurance Fund
of providing benefits under this subparagraph not
otherwise paid for by a transferred employee under
subclause (I).
(IV) CREDIT FOR TIME ENROLLED IN OTHER
PLANS.—For any transferred employee, enrollment
in a life insurance plan administered by the agency
from which the employee transferred, immediately
before enrollment in a life insurance plan under
chapter 87 of title 5, United States Code, shall
be considered as enrollment in a life insurance
plan under that chapter for purposes of section
8706(b)(1)(A) of title 5, United States Code.
(j) INCORPORATION INTO AGENCY PAY SYSTEM.—Not later than
30 months after the transfer date, the Comptroller of the Currency
and the Chairperson of the Corporation shall place each transferred
employee into the established pay system and structure of the
appropriate employing agency.
(k) EQUITABLE TREATMENT.—In administering the provisions
of this section, the Comptroller of the Currency and the Chairperson
of the Corporation—
(1) may not take any action that would unfairly disadvantage a transferred employee relative to any other employee
of the Office of the Comptroller of the Currency or the Corporation on the basis of prior employment by the Office of Thrift
Supervision;
(2) may take such action as is appropriate in an individual
case to ensure that a transferred employee receives equitable
treatment, with respect to the status, tenure, pay, benefits
(other than benefits under programs administered by the Office
of Personnel Management), and accrued leave or vacation time
for prior periods of service with any Federal agency of the
transferred employee;

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124 STAT. 1535

(3) shall, jointly with the Director of the Office of Thrift
Supervision, develop and adopt procedures and safeguards
designed to ensure that the requirements of this subsection
are met; and
(4) shall conduct a study detailing the position assignments
of all employees transferred pursuant to subsection (a),
describing the procedures and safeguards adopted pursuant
to paragraph (3), and demonstrating that the requirements
of this subsection have been met; and shall, not later than
365 days after the transfer date, submit a copy of such study
to Congress.
(l) REORGANIZATION.—
(1) IN GENERAL.—If the Comptroller of the Currency or
the Chairperson of the Corporation determines, during the
2-year period beginning 1 year after the transfer date, that
a reorganization of the staff of the Office of the Comptroller
of the Currency or the Corporation, respectively, is required,
the reorganization shall be deemed a ‘‘major reorganization’’
for purposes of affording affected employees retirement under
section 8336(d)(2) or 8414(b)(1)(B) of title 5, United States
Code.
(2) SERVICE CREDIT.—For purposes of this subsection,
periods of service with a Federal home loan bank or a joint
office of Federal home loan banks shall be credited as periods
of service with a Federal agency.

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SEC. 323. PROPERTY TRANSFERRED.

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12 USC 5433.

(a) PROPERTY DEFINED.—For purposes of this section, the term
‘‘property’’ includes all real property (including leaseholds) and all
personal property, including computers, furniture, fixtures, equipment, books, accounts, records, reports, files, memoranda, paper,
reports of examination, work papers, and correspondence related
to such reports, and any other information or materials.
(b) PROPERTY OF THE OFFICE OF THRIFT SUPERVISION.—
(1) IN GENERAL.—No later than 90 days after the transfer
date, all property of the Office of Thrift Supervision (other
than property described under paragraph (b)(2)) that the Comptroller of the Currency and the Chairperson of the Corporation
jointly determine is used, on the day before the transfer date,
to perform or support the functions of the Office of Thrift
Supervision transferred to the Office of the Comptroller of
the Currency or the Corporation under this title, shall be transferred to the Office of the Comptroller of the Currency or
the Corporation in a manner consistent with the transfer of
employees under this subtitle.
(2) PERSONAL PROPERTY.—All books, accounts, records,
reports, files, memoranda, papers, documents, reports of examination, work papers, and correspondence of the Office of Thrift
Supervision that the Comptroller of the Currency, the Chairperson of the Corporation, and the Chairman of the Board
of Governors jointly determine is used, on the day before the
transfer date, to perform or support the functions of the Office
of Thrift Supervision transferred to the Board of Governors
under this title shall be transferred to the Board of Governors
in a manner consistent with the purposes of this title.
(c) CONTRACTS RELATED TO PROPERTY TRANSFERRED.—Each
contract, agreement, lease, license, permit, and similar arrangement

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relating to property transferred to the Office of the Comptroller
of the Currency or the Corporation by this section shall be transferred to the Office of the Comptroller of the Currency or the
Corporation, as appropriate, together with the property to which
it relates.
(d) PRESERVATION OF PROPERTY.—Property identified for
transfer under this section shall not be altered, destroyed, or deleted
before transfer under this section.
12 USC 5434.

SEC. 324. FUNDS TRANSFERRED.

The funds that, on the day before the transfer date, the Director
of the Office of Thrift Supervision (in consultation with the Comptroller of the Currency, the Chairperson of the Corporation, and
the Chairman of the Board of Governors) determines are not necessary to dispose of the affairs of the Office of Thrift Supervision
under section 325 and are available to the Office of Thrift Supervision to pay the expenses of the Office of Thrift Supervision—
(1) relating to the functions of the Office of Thrift Supervision transferred under section 312(b)(2)(B), shall be transferred to the Office of the Comptroller of the Currency on
the transfer date;
(2) relating to the functions of the Office of Thrift Supervision transferred under section 312(b)(2)(C), shall be transferred to the Corporation on the transfer date; and
(3) relating to the functions of the Office of Thrift Supervision transferred under section 312(b)(1)(A), shall be transferred to the Board of Governors on the transfer date.

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Time periods.
12 USC 5435.

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SEC. 325. DISPOSITION OF AFFAIRS.

(a) AUTHORITY OF DIRECTOR.—During the 90-day period beginning on the transfer date, the Director of the Office of Thrift
Supervision—
(1) shall, solely for the purpose of winding up the affairs
of the Office of Thrift Supervision relating to any function
transferred to the Office of the Comptroller of the Currency,
the Corporation, or the Board of Governors under this title—
(A) manage the employees of the Office of Thrift Supervision who have not yet been transferred and provide for
the payment of the compensation and benefits of the
employees that accrue before the date on which the
employees are transferred under this title; and
(B) manage any property of the Office of Thrift Supervision, until the date on which the property is transferred
under section 323; and
(2) may take any other action necessary to wind up the
affairs of the Office of Thrift Supervision.
(b) STATUS OF DIRECTOR.—
(1) IN GENERAL.—Notwithstanding the transfer of functions
under this subtitle, during the 90-day period beginning on
the transfer date, the Director of the Office of Thrift Supervision
shall retain and may exercise any authority vested in the
Director of the Office of Thrift Supervision on the day before
the transfer date, only to the extent necessary—
(A) to wind up the Office of Thrift Supervision; and
(B) to carry out the transfer under this subtitle during
such 90-day period.

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(2) OTHER PROVISIONS.—For purposes of paragraph (1), the
Director of the Office of Thrift Supervision shall, during the
90-day period beginning on the transfer date, continue to be—
(A) treated as an officer of the United States; and
(B) entitled to receive compensation at the same annual
rate of basic pay that the Director of the Office of Thrift
Supervision received on the day before the transfer date.
SEC. 326. CONTINUATION OF SERVICES.

12 USC 5436.

Any agency, department, or other instrumentality of the United
States, and any successor to any such agency, department, or
instrumentality, that was, before the transfer date, providing support services to the Office of Thrift Supervision in connection with
functions transferred to the Office of the Comptroller of the Currency, the Corporation or the Board of Governors under this title,
shall—
(1) continue to provide such services, subject to reimbursement by the Office of the Comptroller of the Currency, the
Corporation, or the Board of Governors, until the transfer of
functions under this title is complete; and
(2) consult with the Comptroller of the Currency, the Chairperson of the Corporation, or the Chairman of the Board of
Governors, as appropriate, to coordinate and facilitate a prompt
and orderly transition.

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SEC. 327. IMPLEMENTATION PLAN AND REPORTS.

Consultation.

12 USC 5437.

(a) PLAN SUBMISSION.—Within 180 days of the enactment of
the Dodd-Frank Wall Street Reform and Consumer Protection Act,
the Board of Governors, the Corporation, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision, shall
jointly submit a plan to the Committee on Banking, Housing, and
Urban Affairs of the Senate, the Committee on Financial Services
of the House of Representatives, and the Inspectors General of
the Department of the Treasury, the Corporation, and the Board
of Governors detailing the steps the Board of Governors, the Corporation, the Office of the Comptroller of the Currency, and the
Office of Thrift Supervision will take to implement the provisions
of sections 301 through 326, and the provisions of the amendments
made by such sections.
(b) INSPECTORS GENERAL REVIEW OF THE PLAN.—Within 60
days of receiving the plan required under subsection (a), the Inspectors General of the Department of the Treasury, the Corporation,
and the Board of Governors shall jointly provide a written report
to the Board of Governors, the Corporation, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision and
shall submit a copy to the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives detailing whether the plan
conforms with the provisions of sections 301 through 326, and
the provisions of the amendments made by such sections,
including—
(1) whether the plan sufficiently takes into consideration
the orderly transfer of personnel;
(2) whether the plan describes procedures and safeguards
to ensure that the Office of Thrift Supervision employees are
not unfairly disadvantaged relative to employees of the Office
of the Comptroller of the Currency and the Corporation;

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(3) whether the plan sufficiently takes into consideration
the orderly transfer of authority and responsibilities;
(4) whether the plan sufficiently takes into consideration
the effective transfer of funds;
(5) whether the plan sufficiently takes in consideration
the orderly transfer of property; and
(6) any additional recommendations for an orderly and
effective process.
(c) IMPLEMENTATION REPORTS.—Not later than 6 months after
the date on which the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services
of the House of Representatives receives the report required under
subsection (b), and every 6 months thereafter until all aspects
of the plan have been implemented, the Inspectors General of
the Department of the Treasury, the Corporation, and the Board
of Governors shall jointly provide a written report on the status
of the implementation of the plan to the Board of Governors, the
Corporation, the Office of the Comptroller of the Currency, and
the Office of Thrift Supervision and shall submit a copy to the
Committee on Banking, Housing, and Urban Affairs of the Senate
and the Committee on Financial Services of the House of Representatives.

Subtitle C—Federal Deposit Insurance
Corporation
SEC. 331. DEPOSIT INSURANCE REFORMS.

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12 USC 1817
note.

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(a) SIZE DISTINCTIONS.—Section 7(b)(2) of the Federal Deposit
Insurance Act (12 U.S.C. 1817(b)(2)) is amended—
(1) by striking subparagraph (D); and
(2) by redesignating subparagraph (C) as subparagraph
(D).
(b) ASSESSMENT BASE.—The Corporation shall amend the regulations issued by the Corporation under section 7(b)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2)) to define the
term ‘‘assessment base’’ with respect to an insured depository
institution for purposes of that section 7(b)(2), as an amount equal
to—
(1) the average consolidated total assets of the insured
depository institution during the assessment period; minus
(2) the sum of—
(A) the average tangible equity of the insured depository institution during the assessment period; and
(B) in the case of an insured depository institution
that is a custodial bank (as defined by the Corporation,
based on factors including the percentage of total revenues
generated by custodial businesses and the level of assets
under custody) or a banker’s bank (as that term is used
in section 5136 of the Revised Statutes (12 U.S.C. 24)),
an amount that the Corporation determines is necessary
to establish assessments consistent with the definition
under section 7(b)(1) of the Federal Deposit Insurance Act
(12 U.S.C. 1817(b)(1)) for a custodial bank or a banker’s
bank.

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SEC. 332. ELIMINATION OF PROCYCLICAL ASSESSMENTS.

Section 7(e) of the Federal Deposit Insurance Act is amended—
(1) in paragraph (2)—
(A) by amending subparagraph (B) to read as follows:
‘‘(B) LIMITATION.—The Board of Directors may, in its
sole discretion, suspend or limit the declaration of payment
of dividends under subparagraph (A).’’;
(B) by amending subparagraph (C) to read as follows:
‘‘(C) NOTICE AND OPPORTUNITY FOR COMMENT.—The
Corporation shall prescribe, by regulation, after notice and
opportunity for comment, the method for the declaration,
calculation, distribution, and payment of dividends under
this paragraph’’; and
(C) by striking subparagraphs (D) through (G); and
(2) in paragraph (4)(A) by striking ‘‘paragraphs (2)(D) and’’
and inserting ‘‘paragraphs (2) and’’.

12 USC 1817.

Regulations.

SEC. 333. ENHANCED ACCESS TO INFORMATION FOR DEPOSIT INSURANCE PURPOSES.

(a) Section 7(a)(2)(B) of the Federal Deposit Insurance Act
is amended by striking ‘‘agreement’’ and inserting ‘‘consultation’’.
(b) Section 7(b)(1)(E) of the Federal Deposit Insurance Act
is amended—
(1) in clause (i), by striking ‘‘such as’’ and inserting
‘‘including’’; and
(2) in clause (iii), by striking ‘‘Corporation’’ and inserting
‘‘Corporation, except as provided in section 7(a)(2)(B)’’.

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SEC. 334. TRANSITION RESERVE RATIO REQUIREMENTS TO REFLECT
NEW ASSESSMENT BASE.

(a) Section 7(b)(3)(B) of the Federal Deposit Insurance Act
is amended to read as follows:
‘‘(B) MINIMUM RESERVE RATIO.—The reserve ratio designated by the Board of Directors for any year may not
be less than 1.35 percent of estimated insured deposits,
or the comparable percentage of the assessment base set
forth in paragraph (2)(C).’’.
(b) Section 3(y)(3) of the Federal Deposit Insurance Act is
amended by inserting ‘‘, or such comparable percentage of the
assessment base set forth in section 7(b)(2)(C)’’ before the period.
(c) For a period of not less than 5 years after the date of
the enactment of this title, the Federal Deposit Insurance Corporation shall make available to the public the reserve ratio and the
designated reserve ratio using both estimated insured deposits and
the assessment base under section 7(b)(2)(C) of the Federal Deposit
Insurance Act.
(d) RESERVE RATIO.—Notwithstanding the timing requirements
of section 7(b)(3)(E)(ii) of the Federal Deposit Insurance Act, the
Corporation shall take such steps as may be necessary for the
reserve ratio of the Deposit Insurance Fund to reach 1.35 percent
of estimated insured deposits by September 30, 2020.
(e) OFFSET.—In setting the assessments necessary to meet the
requirements of subsection (d), the Corporation shall offset the
effect of subsection (d) on insured depository institutions with total
consolidated assets of less than $10,000,000,000.

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12 USC 1813.

Time period.
Public
information.
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SEC. 335. PERMANENT INCREASE IN DEPOSIT AND SHARE INSURANCE.

(a) PERMANENT INCREASE IN DEPOSIT INSURANCE.—Section
11(a)(1)(E) of the Federal Deposit Insurance Act (12 U.S.C.
1821(a)(1)(E)) is amended—
(1) by striking ‘‘$100,000’’ and inserting ‘‘$250,000’’; and
(2) by adding at the end the following new sentences:
‘‘Notwithstanding any other provision of law, the increase in
the standard maximum deposit insurance amount to $250,000
shall apply to depositors in any institution for which the Corporation was appointed as receiver or conservator on or after
January 1, 2008, and before October 3, 2008. The Corporation
shall take such actions as are necessary to carry out the requirements of this section with respect to such depositors, without
regard to any time limitations under this Act. In implementing
this and the preceding 2 sentences, any payment on a deposit
claim made by the Corporation as receiver or conservator to
a depositor above the standard maximum deposit insurance
amount in effect at the time of the appointment of the Corporation as receiver or conservator shall be deemed to be part
of the net amount due to the depositor under subparagraph
(B).’’
(b) PERMANENT INCREASE IN SHARE INSURANCE.—Section
207(k)(5) of the Federal Credit Union Act (12 U.S.C. 1787(k)(5))
is amended by striking ‘‘$100,000’’ and inserting ‘‘$250,000’’.
SEC. 336. MANAGEMENT OF THE FEDERAL DEPOSIT INSURANCE CORPORATION.

12 USC 1812
note.

(a) IN GENERAL.—Section 2 of the Federal Deposit Insurance
Act (12 U.S.C. 1812) is amended—
(1) in subsection (a)(1)(B), by striking ‘‘Director of the Office
of Thrift Supervision’’ and inserting ‘‘Director of the Consumer
Financial Protection Bureau’’;
(2) by amending subsection (d)(2) to read as follows:
‘‘(2) ACTING OFFICIALS MAY SERVE.—In the event of a
vacancy in the office of the Comptroller of the Currency or
the office of Director of the Consumer Financial Protection
Bureau and pending the appointment of a successor, or during
the absence or disability of the Comptroller of the Currency
or the Director of the Consumer Financial Protection Bureau,
the acting Comptroller of the Currency or the acting Director
of the Consumer Financial Protection Bureau, as the case may
be, shall be a member of the Board of Directors in the place
of the Comptroller or Director.’’; and
(3) in subsection (f)(2), by striking ‘‘Office of Thrift Supervision’’ and inserting ‘‘Consumer Financial Protection Bureau’’.
(b) EFFECTIVE DATE.—This section, and the amendments made
by this section, shall take effect on the transfer date.

Subtitle D—Other Matters

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12 USC 5451.

SEC. 341. BRANCHING.

Notwithstanding the Federal Deposit Insurance Act (12 U.S.C.
1811 et seq.), the Bank Holding Company Act of 1956 (12 U.S.C.
1841 et seq.), or any other provision of Federal or State law,
a savings association that becomes a bank may—

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(1) continue to operate any branch or agency that the
savings association operated immediately before the savings
association became a bank; and
(2) establish, acquire, and operate additional branches and
agencies at any location within any State in which the savings
association operated a branch immediately before the savings
association became a bank, if the law of the State in which
the branch is located, or is to be located, would permit establishment of the branch if the bank were a State bank chartered
by such State.

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SEC. 342. OFFICE OF MINORITY AND WOMEN INCLUSION.

(a) OFFICE OF MINORITY AND WOMEN INCLUSION.—
(1) ESTABLISHMENT.—
(A) IN GENERAL.—Except as provided in subparagraph
(B), not later than 6 months after the date of enactment
of this Act, each agency shall establish an Office of Minority
and Women Inclusion that shall be responsible for all matters of the agency relating to diversity in management,
employment, and business activities.
(B) BUREAU.—The Bureau shall establish an Office
of Minority and Women Inclusion not later than 6 months
after the designated transfer date established under section
1062.
(2) TRANSFER OF RESPONSIBILITIES.—Each agency that, on
the day before the date of enactment of this Act, assigned
the responsibilities described in paragraph (1) (or comparable
responsibilities) to another office of the agency shall ensure
that such responsibilities are transferred to the Office.
(3) DUTIES WITH RESPECT TO CIVIL RIGHTS LAWS.—The
responsibilities described in paragraph (1) do not include
enforcement of statutes, regulations, or executive orders pertaining to civil rights, except each Director shall coordinate
with the agency administrator, or the designee of the agency
administrator, regarding the design and implementation of any
remedies resulting from violations of such statutes, regulations,
or executive orders.
(b) DIRECTOR.—
(1) IN GENERAL.—The Director of each Office shall be
appointed by, and shall report to, the agency administrator.
The position of Director shall be a career reserved position
in the Senior Executive Service, as that position is defined
in section 3132 of title 5, United States Code, or an equivalent
designation.
(2) DUTIES.—Each Director shall develop standards for—
(A) equal employment opportunity and the racial,
ethnic, and gender diversity of the workforce and senior
management of the agency;
(B) increased participation of minority-owned and
women-owned businesses in the programs and contracts
of the agency, including standards for coordinating technical assistance to such businesses; and
(C) assessing the diversity policies and practices of
entities regulated by the agency.
(3) OTHER DUTIES.—Each Director shall advise the agency
administrator on the impact of the policies and regulations
of the agency on minority-owned and women-owned businesses.

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12 USC 5452.
Deadlines.

Standards.

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Standards.
Procedures.

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(4) RULE OF CONSTRUCTION.—Nothing in paragraph (2)(C)
may be construed to mandate any requirement on or otherwise
affect the lending policies and practices of any regulated entity,
or to require any specific action based on the findings of the
assessment.
(c) INCLUSION IN ALL LEVELS OF BUSINESS ACTIVITIES.—
(1) IN GENERAL.—The Director of each Office shall develop
and implement standards and procedures to ensure, to the
maximum extent possible, the fair inclusion and utilization
of minorities, women, and minority-owned and women-owned
businesses in all business and activities of the agency at all
levels, including in procurement, insurance, and all types of
contracts.
(2) CONTRACTS.—The procedures established by each
agency for review and evaluation of contract proposals and
for hiring service providers shall include, to the extent consistent with applicable law, a component that gives consideration to the diversity of the applicant. Such procedure shall
include a written statement, in a form and with such content
as the Director shall prescribe, that a contractor shall ensure,
to the maximum extent possible, the fair inclusion of women
and minorities in the workforce of the contractor and, as
applicable, subcontractors.
(3) TERMINATION.—
(A) DETERMINATION.—The standards and procedures
developed and implemented under this subsection shall
include a procedure for the Director to make a determination whether an agency contractor, and, as applicable, a
subcontractor has failed to make a good faith effort to
include minorities and women in their workforce.
(B) EFFECT OF DETERMINATION.—
(i) RECOMMENDATION TO AGENCY ADMINISTRATOR.—Upon a determination described in subparagraph (A), the Director shall make a recommendation
to the agency administrator that the contract be terminated.
(ii) ACTION BY AGENCY ADMINISTRATOR.—Upon
receipt of a recommendation under clause (i), the
agency administrator may—
(I) terminate the contract;
(II) make a referral to the Office of Federal
Contract Compliance Programs of the Department
of Labor; or
(III) take other appropriate action.
(d) APPLICABILITY.—This section shall apply to all contracts
of an agency for services of any kind, including the services of
financial institutions, investment banking firms, mortgage banking
firms, asset management firms, brokers, dealers, financial services
entities, underwriters, accountants, investment consultants, and
providers of legal services. The contracts referred to in this subsection include all contracts for all business and activities of an
agency, at all levels, including contracts for the issuance or guarantee of any debt, equity, or security, the sale of assets, the management of the assets of the agency, the making of equity investments
by the agency, and the implementation by the agency of programs
to address economic recovery.

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124 STAT. 1543

(e) REPORTS.—Each Office shall submit to Congress an annual
report regarding the actions taken by the agency and the Office
pursuant to this section, which shall include—
(1) a statement of the total amounts paid by the agency
to contractors since the previous report;
(2) the percentage of the amounts described in paragraph
(1) that were paid to contractors described in subsection (c)(1);
(3) the successes achieved and challenges faced by the
agency in operating minority and women outreach programs;
(4) the challenges the agency may face in hiring qualified
minority and women employees and contracting with qualified
minority-owned and women-owned businesses; and
(5) any other information, findings, conclusions, and recommendations for legislative or agency action, as the Director
determines appropriate.
(f) DIVERSITY IN AGENCY WORKFORCE.—Each agency shall take
affirmative steps to seek diversity in the workforce of the agency
at all levels of the agency in a manner consistent with applicable
law. Such steps shall include—
(1) recruiting at historically black colleges and universities,
Hispanic-serving institutions, women’s colleges, and colleges
that typically serve majority minority populations;
(2) sponsoring and recruiting at job fairs in urban communities;
(3) placing employment advertisements in newspapers and
magazines oriented toward minorities and women;
(4) partnering with organizations that are focused on developing opportunities for minorities and women to place talented
young minorities and women in industry internships, summer
employment, and full-time positions;
(5) where feasible, partnering with inner-city high schools,
girls’ high schools, and high schools with majority minority
populations to establish or enhance financial literacy programs
and provide mentoring; and
(6) any other mass media communications that the Office
determines necessary.
(g) DEFINITIONS.—For purposes of this section, the following
definitions shall apply:
(1) AGENCY.—The term ‘‘agency’’ means—
(A) the Departmental Offices of the Department of
the Treasury;
(B) the Corporation;
(C) the Federal Housing Finance Agency;
(D) each of the Federal reserve banks;
(E) the Board;
(F) the National Credit Union Administration;
(G) the Office of the Comptroller of the Currency;
(H) the Commission; and
(I) the Bureau.
(2) AGENCY ADMINISTRATOR.—The term ‘‘agency administrator’’ means the head of an agency.
(3) MINORITY.—The term ‘‘minority’’ has the same meaning
as in section 1204(c) of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (12 U.S.C. 1811 note).
(4) MINORITY-OWNED BUSINESS.—The term ‘‘minority-owned
business’’ has the same meaning as in section 21A(r)(4)(A)

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PUBLIC LAW 111–203—JULY 21, 2010
of the Federal Home Loan Bank Act (12 U.S.C. 1441a(r)(4)(A)),
as in effect on the day before the transfer date.
(5) OFFICE.—The term ‘‘Office’’ means the Office of Minority
and Women Inclusion established by an agency under subsection (a).
(6) WOMEN-OWNED BUSINESS.—The term ‘‘women-owned
business’’ has the meaning given the term ‘‘women’s business’’
in section 21A(r)(4)(B) of the Federal Home Loan Bank Act
(12 U.S.C. 1441a(r)(4)(B)), as in effect on the day before the
transfer date.

SEC. 343. INSURANCE OF TRANSACTION ACCOUNTS.

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12 USC 1821
note.
Effective date.
12 USC 1821
note.

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(a) BANKS AND SAVINGS ASSOCIATIONS.—
(1) AMENDMENTS.—Section 11(a)(1) of the Federal Deposit
Insurance Act (12 U.S.C. 1821(a)(1)) is amended—
(A) in subparagraph (B)—
(i) by striking ‘‘The net amount’’ and inserting
the following:
‘‘(i) IN GENERAL.—Subject to clause (ii), the net
amount’’; and
(ii) by adding at the end the following new clauses:
‘‘(ii) INSURANCE FOR NONINTEREST-BEARING TRANSACTION ACCOUNTS.—Notwithstanding clause (i), the
Corporation shall fully insure the net amount that
any depositor at an insured depository institution
maintains in a noninterest-bearing transaction
account. Such amount shall not be taken into account
when computing the net amount due to such depositor
under clause (i).
‘‘(iii) NONINTEREST-BEARING TRANSACTION ACCOUNT
DEFINED.—For purposes of this subparagraph, the term
‘noninterest-bearing transaction account’ means a
deposit or account maintained at an insured depository
institution—
‘‘(I) with respect to which interest is neither
accrued nor paid;
‘‘(II) on which the depositor or account holder
is permitted to make withdrawals by negotiable
or transferable instrument, payment orders of
withdrawal, telephone or other electronic media
transfers, or other similar items for the purpose
of making payments or transfers to third parties
or others; and
‘‘(III) on which the insured depository institution does not reserve the right to require advance
notice of an intended withdrawal.’’; and
(B) in subparagraph (C), by striking ‘‘subparagraph
(B)’’ and inserting ‘‘subparagraph (B)(i)’’.
(2) EFFECTIVE DATE.—The amendments made by paragraph
(1) shall take effect on December 31, 2010.
(3) PROSPECTIVE REPEAL.—Effective January 1, 2013, section 11(a)(1) of the Federal Deposit Insurance Act (12 U.S.C.
1821(a)(1)), as amended by paragraph (1), is amended—
(A) in subparagraph (B)—
(i) by striking ‘‘DEPOSIT.—’’ and all that follows
through ‘‘clause (ii), the net amount’’ and insert
‘‘DEPOSIT.—The net amount’’; and

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124 STAT. 1545

(ii) by striking clauses (ii) and (iii); and
(B) in subparagraph (C), by striking ‘‘subparagraph
(B)(i)’’ and inserting ‘‘subparagraph (B)’’.
(b) CREDIT UNIONS.—
(1) AMENDMENTS.—Section 207(k)(1) of the Federal Credit
Union Act (12 U.S.C. 1787(k)(1)) is amended—
(A) in subparagraph (A)—
(i) by striking ‘‘Subject to the provisions of paragraph (2), the net amount’’ and inserting the following:
‘‘(i) NET AMOUNT OF INSURANCE PAYABLE.—Subject
to clause (ii) and the provisions of paragraph (2), the
net amount’’; and
(ii) by adding at the end the following new clauses:
‘‘(ii) INSURANCE FOR NONINTEREST-BEARING TRANSACTION ACCOUNTS.—Notwithstanding clause (i), the
Board shall fully insure the net amount that any
member or depositor at an insured credit union maintains in a noninterest-bearing transaction account.
Such amount shall not be taken into account when
computing the net amount due to such member or
depositor under clause (i).
‘‘(iii) NONINTEREST-BEARING TRANSACTION ACCOUNT
DEFINED.—For purposes of this subparagraph, the term
‘noninterest-bearing transaction account’ means an
account or deposit maintained at an insured credit
union—
‘‘(I) with respect to which interest is neither
accrued nor paid;
‘‘(II) on which the account holder or depositor
is permitted to make withdrawals by negotiable
or transferable instrument, payment orders of
withdrawal, telephone or other electronic media
transfers, or other similar items for the purpose
of making payments or transfers to third parties
or others; and
‘‘(III) on which the insured credit union does
not reserve the right to require advance notice
of an intended withdrawal.’’; and
(B) in subparagraph (B), by striking ‘‘subparagraph
(A)’’ and inserting ‘‘subparagraph (A)(i)’’.
(2) EFFECTIVE DATE.—The amendments made by paragraph
(1) shall take effect upon the date of the enactment of this
Act
(3) PROSPECTIVE REPEAL.—Effective January 1, 2013, section 207(k)(1) of the Federal Credit Union Act (12 U.S.C.
1787(k)(1)), as amended by paragraph (1), is amended—
(A) in subparagraph (A)—
(i) by striking ‘‘(i) NET AMOUNT OF INSURANCE PAYABLE.—’’ and all that follows through ‘‘paragraph (2),
the net amount’’ and inserting ‘‘Subject to the provisions of paragraph (2), the net amount’’; and
(ii) by striking clauses (ii) and (iii); and
(B) in subparagraph (B), by striking ‘‘subparagraph
(A)(i)’’ and inserting ‘‘subparagraph (A)’’.

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12 USC 1787
note.
Effective date.
12 USC 1787
note.

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Subtitle E—Technical and Conforming
Amendments
12 USC 906 note.

SEC. 351. EFFECTIVE DATE.

Except as provided in section 364(a), the amendments made
by this subtitle shall take effect on the transfer date.
SEC. 352. BALANCED BUDGET AND EMERGENCY DEFICIT CONTROL
ACT OF 1985.

Section 256(h) of the Balanced Budget and Emergency Deficit
Control Act of 1985 (2 U.S.C. 906(h)) is amended—
(1) in paragraph (4), by striking subparagraphs (C) and
(G); and
(2) by redesignating subparagraphs (D), (E), (F), and (H)
as subparagraphs (C), (D), (E), and (F), respectively.
SEC. 353. BANK ENTERPRISE ACT OF 1991.

Definition.

Section 232(a) of the Bank Enterprise Act of 1991 (12 U.S.C.
1834(a)) is amended—
(1) in the subsection heading, by striking ‘‘BY FEDERAL
RESERVE BOARD’’;
(2) in paragraph (1)—
(A) by striking ‘‘The Board of Governors of the Federal
Reserve System,’’ and inserting ‘‘The Comptroller of the
Currency’’; and
(B) by striking ‘‘section 7(b)(2)(H)’’ and inserting ‘‘section 7(b)(2)(E)’’;
(3) in paragraph (2)(A), by striking ‘‘Board’’ and inserting
‘‘Comptroller’’; and
(4) in paragraph (3)—
(A) by redesignating subparagraphs (A) through (C)
as subparagraphs (B) through (D), respectively; and
(B) by inserting before subparagraph (B) the following:
‘‘(A) COMPTROLLER.—The term ‘Comptroller’ means the
Comptroller of the Currency.’’.

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SEC. 354. BANK HOLDING COMPANY ACT OF 1956.

The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et
seq.) is amended—
(1) in section 2(j)(3) (12 U.S.C. 1841(j)(3)), strike ‘‘Director
of the Office of Thrift Supervision’’ and inserting ‘‘appropriate
Federal banking agency’’;
(2) in section 4 (12 U.S.C. 1843)—
(A) in subsection (i)—
(i) in paragraph (4)—
(I) in subparagraph (A)—
(aa) in the subparagraph heading, by
striking ‘‘TO DIRECTOR’’; and
(bb) by striking ‘‘Board’’ and all that follows through the end of the subparagraph and
inserting ‘‘Board shall solicit comments and
recommendations from—
‘‘(i) the Comptroller of the Currency, with respect
to the acquisition of a Federal savings association;
and

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124 STAT. 1547

‘‘(ii) the Federal Deposit Insurance Corporation,
with respect to the acquisition of a State savings
association.’’.
(II) in subparagraph (B), by striking ‘‘Director’’
each place that term appears and inserting ‘‘Comptroller of the Currency or the Federal Deposit
Insurance Corporation, as applicable,’’;
(ii) in paragraph (5)—
(I) in subparagraph (B), by striking ‘‘Director
with’’ and inserting ‘‘Comptroller of the Currency
or the Federal Deposit Insurance Corporation, as
applicable, with’’; and
(II) by striking ‘‘Director’’ each place that term
appears and inserting ‘‘Comptroller of the Currency or the Federal Deposit Insurance Corporation’’;
(iii) in paragraph (6), by striking ‘‘Director’’ and
inserting ‘‘Comptroller of the Currency or the Federal
Deposit Insurance Corporation, as applicable,’’; and
(iv) by striking paragraph (7); and
(3) in section 5(f) (12 U.S.C. 1844(f))—
(A) by striking ‘‘subpena’’ each place that term appears
and inserting ‘‘subpoena’’;
(B) by striking ‘‘subpenas’’ each place that term
appears and inserting ‘‘subpoenas’’; and
(C) by striking ‘‘subpenaed’’ and inserting ‘‘subpoenaed’’.
SEC. 355. BANK HOLDING COMPANY ACT AMENDMENTS OF 1970.

Section 106(b)(1) of the Bank Holding Company Act Amendments of 1970 (12 U.S.C. 1972(1)) is amended in the undesignated
matter following subparagraph (E) by inserting ‘‘issue such regulations as are necessary to carry out this section, and, in consultation
with the Comptroller of the Currency and the Federal Deposit
Insurance Company, may’’ after ‘‘The Board may’’.
SEC. 356. BANK PROTECTION ACT OF 1968.

The Bank Protection Act of 1968 (12 U.S.C. 1881 et seq.)
is amended—
(1) in section 2 (12 U.S.C. 1881), by striking ‘‘the term’’
and all that follows through the end of the section and inserting
‘‘the term ‘Federal supervisory agency’ means the appropriate
Federal banking agency, as defined in section 3(q) of the Federal
Deposit Insurance Act (12 U.S.C. 1813(q)).’’;
(2) in section 3 (12 U.S.C. 1882), by striking ‘‘and loan’’
each place that term appears; and
(3) in section 5 (12 U.S.C. 1884), by striking ‘‘and loan’’.

Definition.

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SEC. 357. BANK SERVICE COMPANY ACT.

The Bank Service Company Act (12 U.S.C. 1861 et seq.) is
amended—
(1) in section 1(b)(4) (12 U.S.C. 1861(b)(4))—
(A) by inserting after ‘‘an insured bank,’’ the following:
‘‘a savings association,’’;
(B) by striking ‘‘Director of the Office of Thrift Supervision’’ and inserting ‘‘appropriate Federal banking agency’’;
and

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PUBLIC LAW 111–203—JULY 21, 2010
(C) by striking ‘‘, the Federal Savings and Loan Insurance Corporation,’’;
(2) in section 1(b)(5), by striking ‘‘term ‘insured depository
institution’ has the same meaning as in section 3(c)’’ and
inserting ‘‘terms ‘depository institution’ and ‘savings association’
have the same meanings as in section 3’’; and
(3) in section 7(c)(2) (12 U.S.C. 1867(c)(2)), by inserting
‘‘each’’ after ‘‘notify’’.

SEC. 358. COMMUNITY REINVESTMENT ACT OF 1977.

Regulations.
Applicability.

The Community Reinvestment Act of 1977 (12 U.S.C. 2901
et seq.) is amended—
(1) in section 803 (12 U.S.C. 2902)—
(A) in paragraph (1)—
(i) in subparagraph (A), by inserting ‘‘and Federal
savings associations (the deposits of which are insured
by the Federal Deposit Insurance Corporation)’’ after
‘‘banks’’;
(ii) in subparagraph (B), by striking ‘‘and bank
holding companies’’ and inserting ‘‘, bank holding
companies, and savings and loan holding companies’’;
and
(iii) in subparagraph (C), by striking ‘‘; and’’ and
inserting ‘‘, and State savings associations (the deposits
of which are insured by the Federal Deposit Insurance
Corporation).’’; and
(B) by striking paragraph (2) (relating to the Office
of Thrift Supervision), as added by section 744(q) of the
Financial Institutions Reform, Recovery, and Enforcement
Act of 1989 (Public Law 101–73; 103 Stat. 440); and
(2) in section 806 (12 U.S.C. 2905), by inserting ‘‘, except
that the Comptroller of the Currency shall prescribe regulations
applicable to savings associations and the Board of Governors
shall prescribe regulations applicable to insured State member
banks, bank holding companies and savings and loan holding
companies,’’ after ‘‘supervisory agency’’.
SEC. 359. CRIME CONTROL ACT OF 1990.

The Crime Control Act of 1990 is amended—
(1) in section 2539(c)(2) (28 U.S.C. 509 note)—
(A) by striking subparagraphs (C) and (D); and
(B) by redesignating subparagraphs (E) through (H)
as subparagraphs (C) through (G), respectively; and
(2) in section 2554(b)(2) (Public Law 101–647; 104 Stat.
4890)—
(A) in subparagraph (A), by striking ‘‘, the Director
of the Office of Thrift Supervision,’’ and inserting ‘‘the
Comptroller of the Currency’’; and
(B) in subparagraph (B), by striking ‘‘, the Director’’
and all that follows through ‘‘Trust Corporation’’ and
inserting ‘‘or the Federal Deposit Insurance Corporation’’.

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SEC. 360. DEPOSITORY INSTITUTION MANAGEMENT INTERLOCKS ACT.

The Depository Institution Management Interlocks Act (12
U.S.C. 3201 et seq.) is amended—
(1) in section 207 (12 U.S.C. 3206)—
(A) in paragraph (1), by inserting before the comma
at the end the following: ‘‘and Federal savings associations

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(the deposits of which are insured by the Federal Deposit
Insurance Corporation)’’;
(B) in paragraph (2), by striking ‘‘, and bank holding
companies’’ and inserting ‘‘, bank holding companies, and
savings and loan holding companies’’;
(C) in paragraph (3), by striking ‘‘Corporation,’’ and
inserting ‘‘Corporation and State savings associations (the
deposits of which are insured by the Federal Deposit Insurance Corporation),’’;
(D) by striking paragraph (4);
(E) by redesignating paragraphs (5) and (6) as paragraphs (4) and (5), respectively; and
(F) in paragraph (5), as so redesignated, by striking
‘‘through (5)’’ and inserting ‘‘through (4)’’;
(2) in section 209 (12 U.S.C. 3207)—
(A) in paragraph (1), by inserting before the comma
at the end the following: ‘‘and Federal savings associations
(the deposits of which are insured by the Federal Deposit
Insurance Corporation)’’;
(B) in paragraph (2), by striking ‘‘, and bank holding
companies’’ and inserting ‘‘, bank holding companies, and
savings and loan holding companies’’;
(C) in paragraph (3), by striking ‘‘Corporation,’’ and
inserting ‘‘Corporation and State savings associations (the
deposits of which are insured by the Federal Deposit Insurance Corporation),’’;
(D) by striking paragraph (4); and
(E) by redesignating paragraph (5) as paragraph (4);
and
(3) in section 210(a) (12 U.S.C. 3208(a))—
(A) by striking ‘‘his’’ and inserting ‘‘the’’; and
(B) by inserting ‘‘of the Attorney General’’ after
‘‘enforcement functions’’.
SEC. 361. EMERGENCY HOMEOWNERS’ RELIEF ACT.

Section 110 of the Emergency Homeowners’ Relief Act (12
U.S.C. 2709) is amended in the second sentence, by striking ‘‘Home
Loan Bank Board, the Federal Savings and Loan Insurance Corporation’’ and inserting ‘‘Housing Finance Agency’’.

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SEC. 362. FEDERAL CREDIT UNION ACT.

The Federal Credit Union Act (12 U.S.C. 1751 et seq.) is
amended—
(1) in section 107(8) (12 U.S.C. 1757(8)), by striking ‘‘or
the Federal Savings and Loan Insurance Corporation’’;
(2) in section 205 (12 U.S.C. 1785)—
(A) in subsection (b)(2)(G)(i), by striking ‘‘the Office
of Thrift Supervision and’’; and
(B) in subsection (i)(1), by striking ‘‘or the Federal
Savings and Loan Insurance Corporation’’; and
(3) in section 206(g)(7) (12 U.S.C. 1786(g)(7))—
(A) in subparagraph (A)—
(i) in clause (ii), by striking ‘‘(b)(8)’’ and inserting
‘‘(b)(9)’’;
(ii) in clause (v)—
(I) by striking ‘‘depository’’ and inserting
‘‘financial’’; and
(II) by adding ‘‘and’’ at the end;

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(iii) in clause (vi)—
(I) by striking ‘‘Board’’ and inserting ‘‘Agency’’;
and
(II) by striking ‘‘; and’’ and inserting a period;
and
(iv) by striking clause (vii); and
(B) in subparagraph (D)—
(i) in clause (iii), by adding ‘‘and’’ at the end;
(ii) in clause (iv)—
(I) by striking ‘‘Board’’ and inserting ‘‘Agency’’;
and
(II) by striking ‘‘and’’ at the end; and
(iii) by striking clause (v).

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SEC. 363. FEDERAL DEPOSIT INSURANCE ACT.

The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.)
is amended—
(1) in section 3 (12 U.S.C. 1813)—
(A) in subsection (b)(1)(C), by striking ‘‘Director of the
Office of Thrift Supervision’’ and inserting ‘‘Comptroller
of the Currency’’;
(B) in subsection (l)(5), in the matter preceding
subparagraph (A), by striking ‘‘Director of the Office of
Thrift Supervision,’’; and
(C) in subsection (z), by striking ‘‘the Director of the
Office of Thrift Supervision,’’;
(2) in section 7 (12 U.S.C. 1817)—
(A) in subsection (a)—
(i) in paragraph (2)—
(I) in subparagraph (A)—
(aa) in the first sentence, by striking ‘‘the
Director of the Office of Thrift Supervision,’’;
(bb) in the second sentence—
(AA) by striking ‘‘the Director of the
Office of Thrift Supervision,’’ and inserting
‘‘to’’; and
(BB) by inserting ‘‘to’’ before ‘‘any Federal home’’; and
(cc) by striking ‘‘Finance Board’’ each place
that term appears and inserting ‘‘Finance
Agency’’; and
(II) in subparagraph (B), by striking ‘‘the
Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the
Director of the Office of Thrift Supervision,’’ and
inserting ‘‘the Comptroller of the Currency and
the Board of Governors of the Federal Reserve
System,’’;
(ii) in paragraph (3), in the first sentence, by
striking ‘‘Comptroller of the Currency, the Chairman
of the Board of Governors of the Federal Reserve
System, and the Director of the Office of Thrift Supervision.’’ and inserting ‘‘Comptroller of the Currency,
and the Chairman of the Board of Governors of the
Federal Reserve System.’’;
(iii) in paragraph (6), by striking ‘‘section
232(a)(3)(C)’’ and inserting ‘‘section 232(a)(3)(D)’’; and

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124 STAT. 1551

(iv) in paragraph (7), by striking ‘‘, the Director
of the Office of Thrift Supervision,’’; and
(B) in subsection (n)—
(i) in the heading, by striking ‘‘DIRECTOR OF THE
OFFICE OF THRIFT SUPERVISION’’ and inserting ‘‘COMPTROLLER OF THE CURRENCY’’;
(ii) in the first sentence—
(I) by striking ‘‘the Director of the Office of
Thrift Supervision’’ and inserting ‘‘the Comptroller
of the Currency’’; and
(II) by inserting ‘‘Federal’’ before ‘‘savings
associations’’;
(iii) in the third sentence, by striking ‘‘, the
Financing Corporation, and the Resolution Funding
Corporation’’; and
(iv) by striking ‘‘the Director’’ each place that term
appears and inserting ‘‘the Comptroller’’;
(3) in section 8 (12 U.S.C. 1818)—
(A) in subsection (a)(8)(B)(ii), in the last sentence, by
striking ‘‘Director of the Office of Thrift Supervision’’ each
place that term appears and inserting ‘‘Comptroller of the
Currency’’;
(B) in subsection (b)(3)—
(i) by inserting ‘‘any savings and loan holding company and any subsidiary (other than a depository
institution) of a savings and loan holding company
(as such terms are defined in section 10 of Home
Owners’ Loan Act)), any noninsured State member
bank’’ after ‘‘Bank Holding Company Act of 1956,’’;
and
(ii) by inserting ‘‘or against a savings and loan
holding company or any subsidiary thereof (other than
a depository institution or a subsidiary of such depository institution)’’ before the period at the end;
(C) by striking paragraph (9) of subsection (b) and
inserting the following new paragraph:
‘‘(9) [Repealed]’’.
(D) in subsection (e)(7)—
(i) in subparagraph (A)—
(I) in clause (v), by inserting ‘‘and’’ after the
semicolon;
(II) in clause (vi)—
(aa) by striking ‘‘Board’’ and inserting
‘‘Agency’’; and
(bb) by striking ‘‘; and’’ and inserting a
period; and
(III) by striking clause (vii); and
(ii) in subparagraph (D)—
(I) in clause (iii), by inserting ‘‘and’’ after the
semicolon;
(II) in clause (iv)—
(aa) by striking ‘‘Board’’ and inserting
‘‘Agency’’; and
(bb) by striking ‘‘; and’’ and inserting a
period; and
(III) by striking clause (v);
(E) in subsection (j)—

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124 STAT. 1552

PUBLIC LAW 111–203—JULY 21, 2010
(i) in paragraph (2), by striking ‘‘, or as a savings
association under subsection (b)(9) of this section’’;
(ii) in paragraph (3), by inserting ‘‘or’’ after the
semicolon;
(iii) in paragraph (4), by striking ‘‘; or’’ and
inserting a comma; and
(iv) by striking paragraph (5);
(F) in subsection (o), by striking ‘‘Director of the Office
of Thrift Supervision’’ and inserting ‘‘Comptroller of the
Currency’’; and
(G) in subsection (w)(3)(A), by striking ‘‘and the Office
of Thrift Supervision’’;
(4) in section 10 (12 U.S.C. 1820)—
(A) in subsection (d)(5), by striking ‘‘or the Resolution
Trust Corporation’’ each place that term appears; and
(B) in subsection (k)(5)(B)—
(i) in clause (ii), by inserting ‘‘and’’ after the semicolon;
(ii) in clause (iii), by striking ‘‘; and’’ and inserting
a period; and
(iii) by striking clause (iv);
(5) in section 11 (12 U.S.C. 1821)—
(A) in subsection (c)—
(i) in paragraph (2)(A)(ii), by striking ‘‘(other than
section 21A of the Federal Home Loan Bank Act)’’;
(ii) in paragraph (4), by striking ‘‘Except as otherwise provided in section 21A of the Federal Home
Loan Bank Act and notwithstanding’’ and inserting
‘‘Notwithstanding’’;
(iii) in paragraph (6)—
(I) in the heading, by striking ‘‘DIRECTOR OF
THE OFFICE OF THRIFT SUPERVISION’’ and inserting
‘‘COMPTROLLER OF THE CURRENCY’’;
(II) in subparagraph (A)—
(aa) by striking ‘‘or the Resolution Trust
Corporation’’; and
(bb) by striking ‘‘Director of the Office of
Thrift Supervision’’ and inserting ‘‘Comptroller
of the Currency’’; and
(III) by amending subparagraph (B) to read
as follows:
‘‘(B) RECEIVER.—The Corporation may, at the discretion of the Comptroller of the Currency, be appointed
receiver and the Corporation may accept any such appointment.’’;
(iv) in paragraph (12)(A), by striking ‘‘or the Resolution Trust Corporation’’;
(B) in subsection (d)—
(i) in paragraph (17)(A), by striking ‘‘or the
Director of the Office of Thrift Supervision’’; and
(ii) in paragraph (18)(B), by striking ‘‘or the
Director of the Office of Thrift Supervision’’;
(C) in subsection (m)—
(i) in paragraph (9), by striking ‘‘or the Director
of the Office of Thrift Supervision, as appropriate’’;

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124 STAT. 1553

(ii) in paragraph (16), by striking ‘‘or the Director
of the Office of Thrift Supervision, as appropriate’’
each place that term appears; and
(iii) in paragraph (18), by striking ‘‘or the Director
of the Office of Thrift Supervision, as appropriate’’
each place that term appears;
(D) in subsection (n)—
(i) in paragraph (1)(A)—
(I) by striking ‘‘, or the Director of the Office
of Thrift Supervision, with respect to’’ and
inserting ‘‘or’’; and
(II) by striking ‘‘applicable,,’’ and inserting
‘‘applicable,’’;
(ii) in paragraph (2)(A), by striking ‘‘or the Director
of the Office of Thrift Supervision’’;
(iii) in paragraph (4)(D), by striking ‘‘and the
Director of the Office of Thrift Supervision, as appropriate,’’;
(iv) in paragraph (4)(G), by striking ‘‘and the
Director of the Office of Thrift Supervision, as appropriate,’’; and
(v) in paragraph (12)(B)—
(I) by inserting ‘‘as’’ after ‘‘shall appoint the
Corporation’’;
(II) by striking ‘‘or the Director of the Office
of Thrift Supervision, as appropriate,’’ each place
such term appears;
(E) in subsection (p)—
(i) in paragraph (2)(B), by striking ‘‘the Corporation, the FSLIC Resolution Fund, or the Resolution
Trust Corporation,’’ and inserting ‘‘or the Corporation,’’;
and
(ii) in paragraph (3)(B), by striking ‘‘, the FSLIC
Resolution Fund, the Resolution Trust Corporation,’’;
and
(F) in subsection (r), by striking ‘‘and the Resolution
Trust Corporation’’;
(6) in section 13(k)(1)(A)(iv) (12 U.S.C. 1823(k)(1)(A)(iv)),
by striking ‘‘Director of the Office of Thrift Supervision’’ and
inserting ‘‘Comptroller of the Currency’’;
(7) in section 18 (12 U.S.C. 1828)—
(A) in subsection (c)(2)—
(i) in subparagraph (A), by inserting ‘‘or a Federal
savings association’’ before the semicolon;
(ii) in subparagraph (B), by adding ‘‘and’’ at the
end;
(iii) in subparagraph (C), by striking ‘‘(except’’ and
all that follows through ‘‘; and’’ and inserting ‘‘or a
State savings association.’’; and
(iv) by striking subparagraph (D);
(B) in subsection (g)(1), by striking ‘‘the Director of
the Office of Thrift Supervision’’and inserting ‘‘the Comptroller of the Currency’’;
(C) in subsection (i)(2)(C), by striking ‘‘Director of the
Office of Thrift Supervision’’ and inserting ‘‘Corporation’’;
and
(D) in subsection (m)—

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PUBLIC LAW 111–203—JULY 21, 2010
(i) in paragraph (1)—
(I) in subparagraph (A), by striking ‘‘and the
Director of the Office of Thrift Supervision’’ and
inserting ‘‘or the Comptroller of the Currency, as
appropriate,’’; and
(II) in subparagraph (B), by striking ‘‘and
orders of the Director of the Office of Thrift Supervision’’ and inserting ‘‘of the Comptroller of the
Currency and orders of the Corporation and the
Comptroller of the Currency’’;
(ii) in paragraph (2)—
(I) in subparagraph (A), by striking ‘‘Director
of the Office of Thrift Supervision’’ and inserting
‘‘Comptroller of the Currency, as appropriate,’’; and
(II) in subparagraph (B)—
(aa) in the matter before clause (i), by
striking ‘‘Director of the Office of Thrift Supervision’’ and inserting ‘‘Corporation or the
Comptroller of the Currency, as appropriate,’’;
and
(bb) in the matter following clause (ii)—
(AA) in the first sentence, by striking
‘‘Director of the Office of Thrift Supervision’’ and inserting ‘‘Office of the Comptroller of the Currency, as appropriate,’’;
and
(BB) by striking the second sentence
and inserting the following: ‘‘The Corporation or the Comptroller of the Currency,
as appropriate, may take any other corrective measures with respect to the subsidiary, including the authority to require
the subsidiary to terminate the activities
or operations posing such risks, as the
Corporation or the Comptroller of the Currency, respectively, may deem appropriate.’’; and
(iii) in paragraph (3)—
(I) in subparagraph (A), in the second sentence—
(aa) by inserting ‘‘, in the case of a Federal
savings association,’’ before ‘‘consult with’’; and
(bb) by striking ‘‘Director of the Office of
Thrift Supervision’’ and inserting ‘‘Comptroller
of the Currency’’; and
(II) in subparagraph (B)—
(aa) in the subparagraph heading, by
striking ‘‘DIRECTOR’’ and inserting ‘‘COMPTROLLER OF THE CURRENCY’’;
(bb) by striking ‘‘Office of Thrift Supervision’’ and inserting ‘‘Comptroller of the Currency’’;
(cc) by inserting a comma after ‘‘soundness’’; and
(dd) by inserting ‘‘as to Federal savings
associations’’ after ‘‘compliance’’;
(8) in section 19(e) (12 U.S.C. 1829(e))—

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124 STAT. 1555

(A) in paragraph (1), by striking ‘‘Director of the Office
of Thrift Supervision’’ and inserting ‘‘Board of Governors
of the Federal Reserve System’’; and
(B) in paragraph (2), by striking ‘‘Director of the Office
of Thrift Supervision’’ and inserting ‘‘Board of Governors
of the Federal Reserve System’’;
(9) in section 28 (12 U.S.C. 1831e)—
(A) in subsection (e)—
(i) in paragraph (2)—
(I) in subparagraph (A)(ii), by striking
‘‘Director of the Office of Thrift Supervision’’ and
inserting ‘‘Comptroller of the Currency or the Corporation, as appropriate’’;
(II) in subparagraph (C), by striking ‘‘Director
of the Office of Thrift Supervision’’ and inserting
‘‘Comptroller of the Currency or the Corporation,
as appropriate,’’; and
(III) in subparagraph (F), by striking ‘‘Director
of the Office of Thrift Supervision’’ and inserting
‘‘Comptroller of the Currency or the Corporation,
as appropriate’’; and
(ii) in paragraph (3)—
(I) in subparagraph (A), by striking ‘‘Director
of the Office of Thrift Supervision’’ and inserting
‘‘Comptroller of the Currency or the Corporation,
as appropriate’’; and
(II) in subparagraph (B), by striking ‘‘Director
of the Office of Thrift Supervision’’ and inserting
‘‘Comptroller of the Currency or the Corporation,
as appropriate,’’; and
(B) in subsection (h)(2), by striking ‘‘Director of the
Office of Thrift Supervision’’ and inserting ‘‘Comptroller
of the Currency, of the Corporation,’’; and
(10) in section 33(e) (12 U.S.C. 1831j(e)), by striking ‘‘Federal Housing Finance Board, the Comptroller of the Currency,
and the Director of the Office of Thrift Supervision’’ and
inserting ‘‘Federal Housing Finance Agency and the Comptroller of the Currency’’.
SEC. 364. FEDERAL HOME LOAN BANK ACT.

(a) REPEAL OF SECTION 18(c).—Effective 90 days after the
transfer date, section 18(c) of the Federal Home Loan Bank Act
(12 U.S.C. 1438(c)) is repealed.
(b) REPEAL OF SECTION 21A.—Section 21A of the Federal Home
Loan Bank Act (12 U.S.C. 1441a) is repealed.

12 USC 1438
note.
Effective date.

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SEC. 365. FEDERAL HOUSING ENTERPRISES FINANCIAL SAFETY AND
SOUNDNESS ACT OF 1992.

The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is amended—
(1) in section 1315(b) (12 U.S.C. 4515(b)), by striking ‘‘the
Federal Deposit Insurance Corporation, and the Office of Thrift
Supervision.’’ and inserting ‘‘and the Federal Deposit Insurance
Corporation.’’; and
(2) in section 1317(c) (12 U.S.C. 4517(c)), by striking ‘‘the
Federal Deposit Insurance Corporation, or the Director of the
Office of Thrift Supervision’’ and inserting ‘‘or the Federal
Deposit Insurance Corporation’’.

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PUBLIC LAW 111–203—JULY 21, 2010

SEC. 366. FEDERAL RESERVE ACT.

The Federal Reserve Act (12 U.S.C. 221 et seq.) is amended—
(1) in section 11(a)(2) (12 U.S.C. 248(a)(2))—
(A) by inserting ‘‘State savings associations that are
insured depository institutions (as defined in section 3 of
the Federal Deposit Insurance Act),’’ after ‘‘case of insured’’;
(B) by striking ‘‘Director of the Office of Thrift Supervision’’ and inserting ‘‘Comptroller of the Currency’’;
(C) by inserting ‘‘Federal’’ before ‘‘savings association
which’’; and
(D) by striking ‘‘savings and loan association’’ and
inserting ‘‘savings association’’; and
(2) in section 19(b) (12 U.S.C. 461(b))—
(A) in paragraph (1)(F), by striking ‘‘Director of the
Office of Thrift Supervision’’ and inserting ‘‘Comptroller
of the Currency’’; and
(B) in paragraph (4)(B), by striking ‘‘Director of the
Office of Thrift Supervision’’ and inserting ‘‘Comptroller
of the Currency’’.

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SEC.

367.

FINANCIAL INSTITUTIONS REFORM,
ENFORCEMENT ACT OF 1989.

RECOVERY,

AND

The Financial Institutions Reform, Recovery, and Enforcement
Act of 1989 is amended—
(1) in section 203 (12 U.S.C. 1812 note), by striking subsection (b);
(2) in section 302(1) (12 U.S.C. 1467a note), by striking
‘‘Director of the Office of Thrift Supervision’’ and inserting
‘‘Comptroller of the Currency’’;
(3) in section 305(12 U.S.C. 1464 note), by striking subsection (b);
(4) in section 308 (12 U.S.C. 1463 note)—
(A) in subsection (a), by striking ‘‘Director of the Office
of Thrift Supervision’’ and inserting ‘‘Chairman of the
Board of Governors of the Federal Reserve System, the
Comptroller of the Currency, the Chairman of the National
Credit Union Administration,’’; and
(B) by adding at the end the following new subsection:
‘‘(c) REPORTS.—The Secretary of the Treasury, the Chairman
of the Board of Governors of the Federal Reserve System, the
Comptroller of the Currency, the Chairman of the National Credit
Union Administration, and the Chairperson of Board of Directors
of the Federal Deposit Insurance Corporation shall each submit
an annual report to the Congress containing a description of actions
taken to carry out this section.’’;
(5) in section 402 (12 U.S.C. 1437 note)—
(A) in subsection (a), by striking ‘‘Director of the Office
of Thrift Supervision’’ and inserting ‘‘Comptroller of the
Currency’’;
(B) by striking subsection (b);
(C) in subsection (e)—
(i) in paragraph (1), by striking ‘‘Office of Thrift
Supervision’’ and inserting ‘‘Comptroller of the Currency’’; and
(ii) in each of paragraphs (2), (3), and (4), by
striking ‘‘Director of the Office of Thrift Supervision’’

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124 STAT. 1557

each place that term appears and inserting ‘‘Comptroller of the Currency’’; and
(D) by striking ‘‘Federal Housing Finance Board’’ each
place that term appears and inserting ‘‘Federal Housing
Finance Agency’’;
(6) in section 1103(a) (12 U.S.C. 3332(a)), by striking ‘‘and
the Resolution Trust Corporation’’;
(7) in section 1205(b) (12 U.S.C. 1818 note)—
(A) in paragraph (1)—
(i) by striking subparagraph (B); and
(ii) by redesignating subparagraphs (C) through
(F) as subparagraphs (B) through (E), respectively;
and
(B) in paragraph (2), by striking ‘‘paragraph (1)(F)’’
and inserting ‘‘paragraph (1)(E)’’;
(8) in section 1206 (12 U.S.C. 1833b)—
(A) by striking ‘‘Board, the Oversight Board of the
Resolution Trust Corporation’’ and inserting ‘‘Agency, and’’;
and
(B) by striking ‘‘, and the Office of Thrift Supervision’’;
(9) in section 1216 (12 U.S.C. 1833e)—
(A) in subsection (a)—
(i) in paragraph (3), by adding ‘‘and’’ at the end;
(ii) in paragraph (4), by striking the semicolon
at the end and inserting a period;
(iii) by striking paragraphs (2), (5), and (6); and
(iv) by redesignating paragraphs (3) and (4), as
paragraphs (2) and (3), respectively;
(B) in subsection (c)—
(i) by striking ‘‘the Director of the Office of Thrift
Supervision,’’ and inserting ‘‘and’’; and
(ii) by striking ‘‘the Thrift Depositor Protection
Oversight Board of the Resolution Trust Corporation,
and the Resolution Trust Corporation’’; and
(C) in subsection (d)—
(i) by striking paragraphs (3), (5), and (6); and
(ii) by redesignating paragraphs (4), (7), and (8)
as paragraphs (3), (4), and (5), respectively.
SEC. 368. FLOOD DISASTER PROTECTION ACT OF 1973.

Section 3(a)(5) of the Flood Disaster Protection Act of 1973
(42 U.S.C. 4003(a)(5)) is amended by striking ‘‘, the Office of Thrift
Supervision’’.

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SEC. 369. HOME OWNERS’ LOAN ACT.

The Home Owners’ Loan Act (12 U.S.C. 1461 et seq.) is
amended—
(1) in section 1 (12 U.S.C. 1461), by striking the table
of contents;
(2) in section 2 (12 U.S.C. 1462), as amended by this
Act—
(A) by striking paragraphs (1) and (3);
(B) by redesignating paragraph (2) as paragraph (1);
(C) by redesignating paragraphs (4) through (9) as
paragraphs (2) through (7), respectively; and
(D) by adding at the end the following:

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PUBLIC LAW 111–203—JULY 21, 2010
‘‘(8) BOARD.—The term ‘Board’, other than in the context
of the Board of Directors of the Corporation, means the Board
of Governors of the Federal Reserve System.
‘‘(9) COMPTROLLER.—The term ‘Comptroller’ means the
Comptroller of the Currency.’’;
(3) in section 3 (12 U.S.C. 1462a)—
(A) by striking the section heading and inserting the
following:

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‘‘SEC. 3. ADMINISTRATIVE PROVISIONS.’’;

(B) by striking subsections (a), (b), (c), (d), (g), (h),
(i), and (j);
(C) by redesignating subsections (e) and (f) as subsections (a) and (b), respectively;
(D) in subsection (a), as so redesignated—
(i) in the heading by striking ‘‘OF THE DIRECTOR’’;
and
(ii) in the matter preceding paragraph (1), by
striking ‘‘The Director’’ and inserting ‘‘In accordance
with subtitle A of title III of the Dodd-Frank Wall
Street Reform and Consumer Protection Act, the appropriate Federal banking agency’’; and
(E) in subsection (b), as so redesignated, by striking
‘‘Director’’ and inserting ‘‘appropriate Federal banking
agency’’;
(4) in section 4 (12 U.S.C. 1463)—
(A) in subsection (a)—
(i) in the subsection heading, by striking ‘‘FEDERAL’’;
(ii) by striking paragraphs (1) and (2) and inserting
the following:
‘‘(1) EXAMINATION AND SAFE AND SOUND OPERATION.—
‘‘(A) FEDERAL SAVINGS ASSOCIATIONS.—The Comptroller
shall provide for the examination and safe and sound operation of Federal savings associations.
‘‘(B) STATE SAVINGS ASSOCIATIONS.—The Corporation
shall provide for the examination and safe and sound operation of State savings associations.
‘‘(2) REGULATIONS FOR SAVINGS ASSOCIATIONS.—The Comptroller may prescribe regulations with respect to savings
associations, as the Comptroller determines to be appropriate
to carry out the purposes of this Act.’’; and
(iii) in paragraph (3), by striking ‘‘Director’’ each
place that term appears and inserting ‘‘Comptroller
and the Corporation’’;
(B) in subsection (b)—
(i) in paragraph (2)—
(I) in subparagraph (A), by adding ‘‘and’’ at
the end;
(II) in subparagraph (B), by striking ‘‘; and’’
and inserting a period; and
(III) by striking subparagraph (C); and
(ii) by striking ‘‘Director’’ each place that term
appears and inserting ‘‘Comptroller’’;
(C) in subsection (c)—

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1559

(i) by striking ‘‘All regulations and policies of the
Director’’ and inserting ‘‘The regulations of the Comptroller and the policies of the Comptroller and the
Corporation’’; and
(ii) by striking ‘‘of the Currency’’;
(D) in subsection (e)(5), by striking ‘‘Director’’ and
inserting ‘‘Comptroller’’;
(E) in subsection (f), by striking ‘‘Director’’ each place
that term appears and inserting ‘‘appropriate Federal
banking agency’’; and
(F) in subsection (h), by striking ‘‘Director’’ each place
that term appears and inserting ‘‘appropriate Federal
banking agency’’;
(5) in section 5 (12 U.S.C. 1464)—
(A) in subsection (a), by striking ‘‘Director’’, each place
such term appears and inserting ‘‘Comptroller of the Currency’’;
(B) in subsection (b), by striking ‘‘Director’’, each place
such term appears and inserting ‘‘Comptroller of the Currency’’;
(C) in subsection (c)—
(i) in paragraph (5)—
(I) in subparagraph (A), by striking ‘‘Director’’
and inserting ‘‘appropriate Federal banking
agency’’; and
(II) in subparagraph (B)—
(aa) by striking ‘‘The Director’’ and
inserting ‘‘The appropriate Federal banking
agency’’; and
(bb) by striking ‘‘the Director’’ and
inserting ‘‘the appropriate Federal banking
agency’’;
(D) in subsection (d)—
(i) in paragraph (1)—
(I) in subparagraph (A)—
(aa) in the first sentence, by striking
‘‘Director’’ and inserting ‘‘appropriate Federal
banking agency’’;
(bb) in the second sentence—
(AA) by striking ‘‘Director’s own name
and through the Director’s own attorneys’’
and inserting ‘‘name of the appropriate
Federal banking agency and through the
attorneys of the appropriate Federal
banking agency’’; and
(BB) by striking ‘‘Director’’ each place
that term appears and inserting ‘‘appropriate Federal banking agency’’; and
(cc) in the third sentence, by striking
‘‘Director’’ each place that term appears and
inserting ‘‘Comptroller’’;
(II) in subparagraph (B)—
(aa) in clauses (i) through (iv), by striking
‘‘Director’’ each place that term appears and
inserting ‘‘appropriate Federal banking
agency’’;
(III) in clause (v)—

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124 STAT. 1560

PUBLIC LAW 111–203—JULY 21, 2010
(aa) in the matter preceding subclause (I),
by striking ‘‘Director’’ and inserting ‘‘appropriate Federal banking agency’’;
(bb) in subclause (II), by striking ‘‘subpenas’’ and inserting ‘‘subpoenas’’; and
(cc) in the matter following subclause (II),
by striking ‘‘subpena’’ and inserting ‘‘subpoena’’;
(IV) in clause (vi)—
(aa) in the first sentence, by striking
‘‘Director’’ and inserting ‘‘appropriate Federal
banking agency’’; and
(bb) in the second sentence, by striking
‘‘Director’’ and inserting ‘‘Comptroller’’;
(V) in clause (vii)—
(aa) in the first sentence, by striking ‘‘subpena’’ and inserting ‘‘subpoena’’;
(bb) in the second sentence, by striking
‘‘subpenaed’’ and inserting ‘‘subpoenaed’’; and
(cc) in the third sentence, by striking
‘‘Director’’ and inserting ‘‘appropriate Federal
banking agency’’;
(ii) in paragraph (2)—
(I) in subparagraph (A)—
(aa) by striking ‘‘Director of the Office of
Thrift Supervision’’ and inserting ‘‘appropriate
Federal banking agency’’;
(bb) by striking ‘‘any insured savings
association’’ and inserting ‘‘an insured savings
association’’; and
(cc) by striking ‘‘Director determines, in
the Director’s discretion’’ and inserting ‘‘appropriate Federal banking agency determines, in
the discretion of the appropriate Federal
banking agency’’;
(II) in subparagraph (B), by striking ‘‘Director’’
each place that term appears and inserting ‘‘appropriate Federal banking agency’’;
(III) in subparagraphs (C) and (D), by striking
‘‘Director’’ and inserting ‘‘appropriate Federal
banking agency’’;
(IV) in subparagraph (E)—
(aa) in clause (ii)—
(AA) in the clause heading, by
striking ‘‘OR RTC’’; and
(BB) by striking ‘‘or the Resolution
Trust Corporation, as appropriate,’’ each
place that term appears; and
(bb) by striking ‘‘Director’’ each place that
term appears and inserting ‘‘appropriate Federal banking agency’’; and
(iii) in paragraph (3)—
(I) in subparagraph (A), by striking ‘‘Director’’
each place that term appears and inserting ‘‘Comptroller’’; and
(II) in subparagraph (B)—

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(aa) in the subparagraph heading, by
striking ‘‘OR RTC’’;
(bb) by striking ‘‘Corporation or the Resolution Trust’’; and
(cc) by striking ‘‘Director’’ and inserting
‘‘Comptroller’’;
(iv) in paragraph (4), by striking ‘‘Director’’ and
inserting ‘‘appropriate Federal banking agency’’;
(v) in paragraph (6)—
(I) in subparagraph (A), by striking ‘‘Director’’
and inserting ‘‘Comptroller’’; and
(II) in subparagraphs (B) and (C), by striking
‘‘Director’’ each place that term appears and
inserting ‘‘appropriate Federal banking agency’’;
(vi) in paragraph (7)—
(I) in subparagraphs (A), (B), and (D), by
striking ‘‘Director’’ each place that term appears
and inserting ‘‘appropriate Federal banking
agency’’;
(II) in subparagraph (C), by striking ‘‘Director’’
and inserting ‘‘Federal Deposit Insurance Corporation or the Comptroller, as appropriate,’’; and
(III) by striking subparagraph (E) and
inserting the following:
‘‘(E) ADMINISTRATION BY THE COMPTROLLER AND THE
CORPORATION.—The Comptroller may issue such regulations, and the appropriate Federal banking agency may
issue such orders, including those issued pursuant to section 8 of the Federal Deposit Insurance Act, as may be
necessary to administer and carry out this paragraph and
to prevent evasion of this paragraph.’’;
(E) in subsection (e)(2), strike ‘‘Director’’ and insert
‘‘Comptroller’’;
(F) in subsection (i)—
(i) by striking ‘‘Director’’, each place such term
appears, and inserting ‘‘Comptroller’’;
(ii) in paragraph (2), in the heading, by striking
‘‘DIRECTOR’’ and inserting ‘‘COMPTROLLER’’;
(iii) in paragraph (5)(A), by striking ‘‘of the Currency’’; and
(iv) except as provided in clauses (i) through (iii),
by striking ‘‘Director’’ each place such term appears
and inserting ‘‘Comptroller’’;
(G) in subsection (o)—
(i) in paragraph (1), by striking ‘‘Director’’ and
inserting ‘‘Comptroller’’; and
(ii) in paragraph (2)(B), by striking ‘‘Director’s
determination’’ and inserting ‘‘determination of the
Comptroller’’;
(H) in subsections (m), (n), (o), and (p), by striking
‘‘Director’’, each place such term appears, and inserting
‘‘Comptroller’’;
(I) in subsection (q)—
(i) in paragraph (6), by striking ‘‘of Governors of
the Federal Reserve System’’;
(ii) by striking ‘‘Director’’ each place that term
appears and inserting ‘‘Board’’; and

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PUBLIC LAW 111–203—JULY 21, 2010
(iii) by inserting ‘‘in consultation with the Comptroller and the Corporation,’’ before ‘‘considers’’;
(J) in subsection (r)(3), by striking ‘‘Director’’ and
inserting ‘‘Comptroller of the Currency’’;
(K) in subsection (s)—
(i) in paragraph (1), strike ‘‘Director’’ and insert
‘‘Comptroller of the Currency’’;
(ii) in paragraph (2), strike ‘‘Director’’ and insert
‘‘Comptroller of the Currency’’;
(iii) in paragraph (3), by striking ‘‘Director’s discretion, the Director’’ and inserting ‘‘discretion of the
appropriate Federal banking agency, the appropriate
Federal banking agency,’’;
(iv) in paragraph (4), by striking ‘‘Director’’ each
place that term appears and inserting ‘‘appropriate
Federal banking agency’’; and
(v) in paragraph (5)—
(I) by striking ‘‘Director’’, each place such term
appears, and inserting ‘‘appropriate Federal
banking agency’’; and
(II) by striking ‘‘Director’s approval’’ and
inserting ‘‘approval of the appropriate Federal
banking agency’’;
(L) in subsection (t)—
(i) in paragraph (1), by striking subparagraph (D);
(ii) by striking paragraph (3) and inserting the
following:
‘‘(3) [Repealed].’’;
(iii) in paragraph (5)—
(I) in subparagraph (B), by striking ‘‘Corporation, in its sole discretion’’ and inserting ‘‘appropriate Federal banking agency, in the sole discretion of the appropriate Federal banking agency’’;
and
(II) by striking subparagraph (D);
(iv) in paragraph (6)—
(I) by striking subparagraph (A) and inserting
the following:
‘‘(A) [Reserved].’’;
(II) in subparagraph (B), by striking ‘‘Director’’
each place that term appears and inserting ‘‘appropriate Federal banking agency’’;
(III) in subparagraph (C)—
(aa) in clause (i), by striking ‘‘Director’s
prior approval’’ and inserting ‘‘prior approval
of the appropriate Federal banking agency’’;
(bb) in clause (ii), by striking ‘‘Director’s
discretion’’ and inserting ‘‘discretion of the
appropriate Federal banking agency’’; and
(cc) by striking ‘‘Director’’ each place that
term appears and inserting ‘‘appropriate Federal banking agency’’;
(IV) in subparagraph (E), by striking ‘‘Director
shall’’ and inserting ‘‘appropriate Federal banking
agency may’’; and
(V) in subparagraph (F), by striking ‘‘Director’’
and all that follows through the end of the

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subparagraph and inserting ‘‘appropriate Federal
banking agency under this Act or any other provision of law.’’;
(v) in paragraph (7), by striking ‘‘Director’’ each
place that term appears and inserting ‘‘appropriate
Federal banking agency’’;
(vi) by striking paragraph (8) and inserting the
following:
‘‘(8) [Repealed].’’;
(vii) in paragraph (9)—
(I) in subparagraph (A), by striking ‘‘Director’’
and inserting ‘‘Comptroller’’;
(II) in subparagraph (C), by striking ‘‘of the
Currency’’; and
(III) by striking subparagraph (B) and redesignating subparagraphs (C) and (D) as subparagraphs (B) and (C), respectively; and
(viii) except as provided in clauses (i) through (vii),
by striking ‘‘Director’’ each place that term appears
and inserting ‘‘appropriate Federal banking agency’’;
(M) in subsection (u), by striking ‘‘Director’’ each place
that term appears and inserting ‘‘appropriate Federal
banking agency’’;
(N) in subsection (v)—
(i) in paragraph (2), by striking ‘‘Director’s determinations’’ and inserting ‘‘determinations of the appropriate Federal banking agency’’; and
(ii) by striking ‘‘Director’’ each place that term
appears and inserting ‘‘appropriate Federal banking
agency’’;
(O) in subsection (w)(1)—
(i) in subparagraph (A)(II), by striking ‘‘Director’s
intention’’ and inserting ‘‘intention of the Comptroller’’;
and
(ii) in subparagraph (B), by striking ‘‘Director’s
intention’’ and inserting ‘‘intention of the Comptroller’’;
and
(P) except as provided in subparagraphs (A) through
(J), by striking ‘‘Director’’ each place that term appears
and inserting ‘‘Comptroller’’;
(6) in section 8 (12 U.S.C. 1466a), by striking ‘‘Director’’
each place that term appears and inserting ‘‘Comptroller’’;
(7) in section 9 (12 U.S.C. 1467)—
(A) in subsection (a), by striking ‘‘assessed by the
Director’’ and all that follows through the end of the subsection and inserting the following: ‘‘assessed by—
‘‘(1) the Comptroller, against each such Federal savings
association, as the Comptroller deems necessary or appropriate;
and
‘‘(2) the Corporation, against each such State savings
association, as the Corporation deems necessary or appropriate.’’;
(B) in subsection (b), by striking ‘‘Director’’, each place
such term appears, and inserting ‘‘Comptroller or Corporation, as appropriate’’;
(C) in subsection (e)—

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PUBLIC LAW 111–203—JULY 21, 2010
(i) by striking ‘‘Only the Director’’ and inserting
‘‘The Comptroller’’; and
(ii) by striking ‘‘Director’s designee’’ and inserting
‘‘designee of the Comptroller’’;
(D) by striking subsection (f) and inserting the following:
‘‘(f) [Reserved].’’;
(E) in subsection (g)—
(i) in paragraph (1), by striking ‘‘Director’’ and
inserting ‘‘appropriate Federal banking agency’’; and
(ii) in paragraph (2), by striking ‘‘Director, or the
Corporation, as the case may be,’’ and inserting ‘‘appropriate Federal banking agency for the savings association’’;
(F) in subsection (i), by striking ‘‘Director’’ each place
that term appears and inserting ‘‘appropriate Federal
banking agency’’;
(G) in subsection (j), by striking ‘‘Director’s sole discretion’’ and inserting ‘‘sole discretion of the appropriate Federal banking agency’’;
(H) in subsection (k), by striking ‘‘Director may assess
against institutions for which the Director is the appropriate Federal banking agency, as defined in section 3
of the Federal Deposit Insurance Act,’’ and inserting ‘‘appropriate Federal banking agency may assess against an
institution’’; and
(I) except as provided in subparagraphs (A) through
(G), by striking ‘‘Director’’ each place that term appears
and inserting ‘‘appropriate Federal banking agency’’;
(8) in section 10 (12 U.S.C. 1467a)—
(A) in subsection (a)(1), by striking ‘‘Director’’ each
place that term appears and inserting ‘‘appropriate Federal
banking agency’’;
(B) in subsection (b)—
(i) in paragraph (2), by striking ‘‘and the regional
office of the Director of the district in which its principal office is located,’’; and
(ii) in paragraph (6), by striking ‘‘Director’s own
motion or application’’ and inserting ‘‘motion or application of the Board’’;
(C) in subsection (c)—
(i) in paragraph (2)(F), by striking ‘‘of Governors
of the Federal Reserve System’’;
(ii) in paragraph (4)(B), in the subparagraph
heading, by striking ‘‘BY DIRECTOR’’;
(iii) in paragraph (6)(D), in the subparagraph
heading, by striking ‘‘BY DIRECTOR’’; and
(iv) in paragraph (9)(E), by inserting ‘‘(in consultation with the appropriate Federal banking agency)’’
after ‘‘including a determination’’;
(D) in subsection (g)(5)(B), by striking ‘‘the Director’s
discretion’’ and inserting ‘‘the discretion of the Board’’;
(E) in subsection (l), by striking ‘‘Director’’ each place
that term appears and inserting ‘‘appropriate Federal
banking agency’’;
(F) in subsection (m), by striking ‘‘Director’’ and
inserting ‘‘appropriate Federal banking agency’’;

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(G) in subsection (p)—
(i) in paragraph (1)—
(I) by striking ‘‘Director determines’’ the 1st
place such term appears and inserting ‘‘Board or
the appropriate Federal banking agency for the
savings association determines’’;
(II) by striking ‘‘Director may’’ and inserting
‘‘Board may’’; and
(III) by striking ‘‘Director determines’’ the 2nd
place such term appears and inserting ‘‘Board, in
consultation with the appropriate Federal banking
agency for the savings association determines’’;
and
(ii) in paragraph (2), by striking ‘‘Director’’, each
place such term appears, and inserting ‘‘Board’’;
(H) in subsection (q), by striking ‘‘Director’’, each place
such term appears, and inserting ‘‘Board’’;
(I) in subsection (r), by striking ‘‘Director’’, each place
such term appears, and inserting ‘‘Board or appropriate
Federal banking agency’’;
(J) in subsection (s)—
(i) in paragraph (2)—
(I) in subparagraph (B)(ii), by striking ‘‘Director’s judgment’’ and inserting ‘‘judgment of the
appropriate Federal banking agency for the
savings association’’; and
(II) by striking ‘‘Director’’ each place that term
appears and inserting ‘‘appropriate Federal
banking agency for the savings association’’; and
(ii) in paragraph (4), by striking ‘‘Director’’ and
inserting ‘‘Comptroller’’; and
(K) except as provided in subparagraphs (A) through
(J), by striking ‘‘Director’’ each place that term appears
and inserting ‘‘Board’’;
(9) in section 11 (12 U.S.C. 1468), by striking ‘‘Director’’
each place that term appears and inserting ‘‘appropriate Federal banking agency’’;
(10) in section 12 (12 U.S.C. 1468a), by striking ‘‘the
Director’’ and inserting ‘‘a Federal banking agency’’; and
(11) in section 13 (12 U.S.C. 1468a) is amended by striking
‘‘Director’’ and inserting ‘‘a Federal banking agency’’.

12 USC 1468b.

SEC. 370. HOUSING ACT OF 1948.

Section 502(c) of the Housing Act of 1948 (12 U.S.C. 1701c(c))
is amended—
(1) in the matter preceding paragraph (1), by striking ‘‘and
the Director of the Office of Thrift Supervision’’ and inserting
‘‘, the Comptroller of the Currency, and the Federal Deposit
Insurance Corporation’’; and
(2) in paragraph (3), by striking ‘‘Board’’ and inserting
‘‘Agency’’.

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SEC. 371. HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1992.

Section 543 of the Housing and Community Development Act
of 1992 (Public Law 102–550; 106 Stat. 3798) is amended—
(1) in subsection (c)(1)—
(A) by striking subparagraphs (D) through (F); and

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(B) by redesignating subparagraphs (G) and (H) as
subparagraphs (D) and (E), respectively; and
(2) in subsection (f)—
(A) in paragraph (2), by striking ‘‘the Office of Thrift
Supervision,’’ each place that term appears; and
(B) in paragraph (3)—
(i) in the matter preceding subparagraph (A), by
striking ‘‘the Office of Thrift Supervision,’’; and
(ii) in subparagraph (D), by striking ‘‘Office of
Thrift Supervision,’’.

SEC. 372. HOUSING AND URBAN-RURAL RECOVERY ACT OF 1983.

Section 469 of the Housing and Urban-Rural Recovery Act
of 1983 (12 U.S.C. 1701p–1) is amended in the first sentence,
by striking ‘‘Federal Home Loan Bank Board’’ and inserting ‘‘Federal Housing Finance Agency’’.
SEC. 373. NATIONAL HOUSING ACT.

Section 202(f) of the National Housing Act (12 U.S.C. 1708(f))
is amended—
(1) by striking paragraph (5) and inserting the following:
‘‘(5) if the mortgagee is a national bank, a subsidiary or
affiliate of such bank, a Federal savings association or a subsidiary or affiliate of a savings association, the Comptroller
of the Currency;’’;
(2) in paragraph (6), by adding ‘‘and’’ at the end;
(3) in paragraph (7)—
(A) by inserting ‘‘or State savings association’’ after
‘‘State bank’’; and
(B) by striking ‘‘; and’’ and inserting a period; and
(4) by striking paragraph (8).
SEC. 374. NEIGHBORHOOD REINVESTMENT CORPORATION ACT.

Section 606(c)(3) of the Neighborhood Reinvestment Corporation Act (42 U.S.C. 8105(c)(3)) is amended by striking ‘‘Federal
Home Loan Bank Board’’ and inserting ‘‘Federal Housing Finance
Agency’’.
SEC. 375. PUBLIC LAW 93–100.

Section 5(d) of Public Law 93–100 (12 U.S.C. 1470(a)) is
amended—
(1) in paragraph (1), by striking ‘‘Federal Savings and
Loan Insurance Corporation with respect to insured institutions, the Board of Governors of the Federal Reserve System
with respect to State member insured banks, and the Federal
Deposit Insurance Corporation with respect to State nonmember insured banks’’ and inserting ‘‘appropriate Federal
banking agency, with respect to the institutions subject to
the jurisdiction of each such agency,’’; and
(2) in paragraph (2), by striking ‘‘supervisory’’ and inserting
‘‘banking’’.

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SEC. 376. SECURITIES EXCHANGE ACT OF 1934.

The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.)
is amended—
(1) in section 3(a)(34) (15 U.S.C. 78c(a)(34))—
(A) in subparagraph (A)—

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(i) in clause (i), by striking ‘‘or a subsidiary or
a department or division of any such bank’’ and
inserting ‘‘a subsidiary or a department or division
of any such bank, a Federal savings association (as
defined in section 3(b)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1813(b)(2))), the deposits of which
are insured by the Federal Deposit Insurance Corporation, or a subsidiary or department or division of any
such Federal savings association’’;
(ii) in clause (ii), by striking ‘‘or a subsidiary or
a department or division of such subsidiary’’ and
inserting ‘‘a subsidiary or a department or division
of such subsidiary, or a savings and loan holding company’’;
(iii) in clause (iii), by striking ‘‘or a subsidiary
or department or division thereof;’’ and inserting ‘‘a
subsidiary or department or division of any such bank,
a State savings association (as defined in section 3(b)(3)
of the Federal Deposit Insurance Act (12 U.S.C.
1813(b)(3))), the deposits of which are insured by the
Federal Deposit Insurance Corporation, or a subsidiary
or a department or division of any such State savings
association; and’’;
(iv) by striking clause (iv); and
(v) by redesignating clause (v) as clause (iv);
(B) in subparagraph (B)—
(i) in clause (i), by striking ‘‘or a subsidiary of
any such bank’’ and inserting ‘‘a subsidiary of any
such bank, a Federal savings association (as defined
in section 3(b)(2) of the Federal Deposit Insurance
Act (12 U.S.C. 1813(b)(2))), the deposits of which are
insured by the Federal Deposit Insurance Corporation,
or a subsidiary of any such Federal savings association’’;
(ii) in clause (ii), by striking ‘‘or a subsidiary of
a bank holding company which is a bank other than
a bank specified in clause (i), (iii), or (iv) of this
subparagraph’’ and inserting ‘‘a subsidiary of a bank
holding company that is a bank other than a bank
specified in clause (i) or (iii) of this subparagraph,
or a savings and loan holding company’’;
(iii) in clause (iii), by striking ‘‘or a subsidiary
thereof;’’ and inserting ‘‘a subsidiary of any such bank,
a State savings association (as defined in section 3(b)(3)
of the Federal Deposit Insurance Act (12 U.S.C.
1813(b)(3))), the deposits of which are insured by the
Federal Deposit Insurance Corporation, or a subsidiary
of any such State savings association; and’’;
(iv) by striking clause (iv); and
(v) by redesignating clause (v) as clause (iv);
(C) in subparagraph (C)—
(i) in clause (i), by striking ‘‘bank’’ and inserting
‘‘bank or a Federal savings association (as defined in
section 3(b)(2) of the Federal Deposit Insurance Act
(12 U.S.C. 1813(b)(2))), the deposits of which are
insured by the Federal Deposit Insurance Corporation’’;

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(ii) in clause (ii), by striking ‘‘or a subsidiary of
a bank holding company which is a bank other than
a bank specified in clause (i), (iii), or (iv) of this
subparagraph’’ and inserting ‘‘a subsidiary of a bank
holding company that is a bank other than a bank
specified in clause (i) or (iii) of this subparagraph,
or a savings and loan holding company’’;
(iii) in clause (iii), by striking ‘‘System)’’ and
inserting, ‘‘System) or a State savings association (as
defined in section 3(b)(3) of the Federal Deposit Insurance Act (12 U.S.C. 1813(b)(3))), the deposits of which
are insured by the Federal Deposit Insurance Corporation; and’’;
(iv) by striking clause (iv); and
(v) by redesignating clause (v) as clause (iv);
(D) in subparagraph (D)—
(i) in clause (i), by inserting after ‘‘bank’’ the following: ‘‘or a Federal savings association (as defined
in section 3(b)(2) of the Federal Deposit Insurance
Act (12 U.S.C. 1813(b)(2))), the deposits of which are
insured by the Federal Deposit Insurance Corporation’’;
(ii) in clause (ii), by adding ‘‘and’’ at the end;
(iii) by striking clause (iii);
(iv) by redesignating clause (iv) as clause (iii); and
(v) in clause (iii), as so redesignated, by inserting
after ‘‘bank’’ the following: ‘‘or a State savings association (as defined in section 3(b)(3) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(b)(3))), the deposits of
which are insured by the Federal Deposit Insurance
Corporation’’;
(E) in subparagraph (F)—
(i) in clause (i), by inserting after ‘‘bank’’ the following: ‘‘or a Federal savings association (as defined
in section 3(b)(2) of the Federal Deposit Insurance
Act (12 U.S.C. 1813(b)(2))), the deposits of which are
insured by the Federal Deposit Insurance Corporation’’;
(ii) by striking clause (ii);
(iii) by redesignating clauses (iii), (iv), and (v) as
clauses (ii), (iii), and (iv), respectively; and
(iv) in clause (iii), as so redesignated, by inserting
before the semicolon the following: ‘‘or a State savings
association (as defined in section 3(b)(3) of the Federal
Deposit Insurance Act (12 U.S.C. 1813(b)(3))), the
deposits of which are insured by the Federal Deposit
Insurance Corporation’’;
(F) in subparagraph (G)—
(i) in clause (i), by inserting after ‘‘national bank’’
the following: ‘‘, a Federal savings association (as
defined in section 3(b)(2) of the Federal Deposit Insurance Act), the deposits of which are insured by the
Federal Deposit Insurance Corporation,’’;
(ii) in clause (iii)—
(I) by inserting after ‘‘bank)’’ the following:
‘‘, a State savings association (as defined in section
3(b)(3) of the Federal Deposit Insurance Act), the
deposits of which are insured by the Federal
Deposit Insurance Corporation,’’; and

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(II) by adding ‘‘and’’ at the end;
(iii) by striking clause (iv); and
(iv) by redesignating clause (v) as clause (iv); and
(G) in the undesignated matter following subparagraph
(H), by striking ‘‘, and the term ‘District of Columbia
savings and loan association’ means any association subject
to examination and supervision by the Office of Thrift
Supervision under section 8 of the Home Owners’ Loan
Act of 1933’’;
(2) in section 12(i) (15 U.S.C. 78l(i))—
(A) in paragraph (1), by inserting after ‘‘national
banks’’ the following: ‘‘and Federal savings associations,
the accounts of which are insured by the Federal Deposit
Insurance Corporation’’;
(B) by striking ‘‘(3)’’ and all that follows through ‘‘vested
in the Office of Thrift Supervision’’ and inserting ‘‘and
(3) with respect to all other insured banks and State
savings associations, the accounts of which are insured
by the Federal Deposit Insurance Corporation, are vested
in the Federal Deposit Insurance Corporation’’; and
(C) in the second sentence, by striking ‘‘the Federal
Deposit Insurance Corporation, and the Office of Thrift
Supervision’’ and inserting ‘‘and the Federal Deposit Insurance Corporation’’;
(3) in section 15C(g)(1) (15 U.S.C. 78o–5(g)(1)), by striking
‘‘the Director of the Office of Thrift Supervision, the Federal
Savings and Loan Insurance Corporation,’’; and
(4) in section 23(b)(1) (15 U.S.C. 78w(b)(1)), by striking
‘‘, other than the Office of Thrift Supervision,’’.

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SEC. 377. TITLE 18, UNITED STATES CODE.

Title 18, United States Code, is amended—
(1) in section 212(c)(2)—
(A) by striking subparagraph (C); and
(B) by redesignating subparagraphs (D) through (H)
as subparagraphs (C) through (G), respectively;
(2) in section 657, by striking ‘‘Office of Thrift Supervision,
the Resolution Trust Corporation,’’;
(3) in section 981(a)(1)(D)—
(A) by striking ‘‘Resolution Trust Corporation,’’; and
(B) by striking ‘‘or the Office of Thrift Supervision’’;
(4) in section 982(a)(3)—
(A) by striking ‘‘Resolution Trust Corporation,’’; and
(B) by striking ‘‘or the Office of Thrift Supervision’’;
(5) in section 1006—
(A) by striking ‘‘Office of Thrift Supervision,’’; and
(B) by striking ‘‘the Resolution Trust Corporation,’’;
(6) in section 1014—
(A) by striking ‘‘the Office of Thrift Supervision’’; and
(B) by striking ‘‘the Resolution Trust Corporation,’’;
and
(7) in section 1032(1)—
(A) by striking ‘‘the Resolution Trust Corporation,’’;
and
(B) by striking ‘‘or the Director of the Office of Thrift
Supervision’’.

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SEC. 378. TITLE 31, UNITED STATES CODE.

Title 31, United States Code, is amended—
(1) in section 321—
(A) in subsection (c)—
(i) in paragraph (1), by adding ‘‘and’’ at the end;
(ii) in paragraph (2), by striking ‘‘; and’’ and
inserting a period; and
(iii) by striking paragraph (3); and
(B) by striking subsection (e); and
(2) in section 714(a), by striking ‘‘the Office of the Comptroller of the Currency, and the Office of Thrift Supervision.’’
and inserting ‘‘and the Office of the Comptroller of the Currency.’’.
Private Fund
Investment
Advisers
Registration Act
of 2010.
15 USC 80b–20
note.

TITLE IV—REGULATION OF ADVISERS
TO HEDGE FUNDS AND OTHERS
SEC. 401. SHORT TITLE.

This title may be cited as the ‘‘Private Fund Investment
Advisers Registration Act of 2010’’.

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SEC. 402. DEFINITIONS.

15 USC 80b–2
note.

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(a) INVESTMENT ADVISERS ACT OF 1940 DEFINITIONS.—Section
202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–
2(a)) is amended by adding at the end the following:
‘‘(29) The term ‘private fund’ means an issuer that would
be an investment company, as defined in section 3 of the
Investment Company Act of 1940 (15 U.S.C. 80a–3), but for
section 3(c)(1) or 3(c)(7) of that Act.
‘‘(30) The term ‘foreign private adviser’ means any investment adviser who—
‘‘(A) has no place of business in the United States;
‘‘(B) has, in total, fewer than 15 clients and investors
in the United States in private funds advised by the investment adviser;
‘‘(C) has aggregate assets under management attributable to clients in the United States and investors in
the United States in private funds advised by the investment adviser of less than $25,000,000, or such higher
amount as the Commission may, by rule, deem appropriate
in accordance with the purposes of this title; and
‘‘(D) neither—
‘‘(i) holds itself out generally to the public in the
United States as an investment adviser; nor
‘‘(ii) acts as—
‘‘(I) an investment adviser to any investment
company registered under the Investment Company Act of 1940; or
‘‘(II) a company that has elected to be a business development company pursuant to section 54
of the Investment Company Act of 1940 (15 U.S.C.
80a–53), and has not withdrawn its election.’’.
(b) OTHER DEFINITIONS.—As used in this title, the terms
‘‘investment adviser’’ and ‘‘private fund’’ have the same meanings
as in section 202 of the Investment Advisers Act of 1940, as
amended by this title.

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124 STAT. 1571

SEC. 403. ELIMINATION OF PRIVATE ADVISER EXEMPTION; LIMITED
EXEMPTION FOR FOREIGN PRIVATE ADVISERS; LIMITED
INTRASTATE EXEMPTION.

Section 203(b) of the Investment Advisers Act of 1940 (15
U.S.C. 80b–3(b)) is amended—
(1) in paragraph (1), by inserting ‘‘, other than an investment adviser who acts as an investment adviser to any private
fund,’’ before ‘‘all of whose’’;
(2) by striking paragraph (3) and inserting the following:
‘‘(3) any investment adviser that is a foreign private
adviser;’’; and
(3) in paragraph (5), by striking ‘‘or’’ at the end;
(4) in paragraph (6)—
(A) by striking ‘‘any investment adviser’’ and inserting
‘‘(A) any investment adviser’’;
(B) by redesignating subparagraphs (A) and (B) as
clauses (i) and (ii), respectively; and
(C) in clause (ii) (as so redesignated), by striking the
period at the end and inserting ‘‘; or’’; and
(D) by adding at the end the following:
‘‘(B) any investment adviser that is registered with the Commodity Futures Trading Commission as a commodity trading
advisor and advises a private fund, provided that, if after the
date of enactment of the Private Fund Investment Advisers Registration Act of 2010, the business of the advisor should become
predominately the provision of securities-related advice, then such
adviser shall register with the Commission.’’.
(5) by adding at the end the following:
‘‘(7) any investment adviser, other than any entity that
has elected to be regulated or is regulated as a business development company pursuant to section 54 of the Investment Company Act of 1940 (15 U.S.C. 80a–54), who solely advises—
‘‘(A) small business investment companies that are
licensees under the Small Business Investment Act of 1958;
‘‘(B) entities that have received from the Small Business Administration notice to proceed to qualify for a
license as a small business investment company under
the Small Business Investment Act of 1958, which notice
or license has not been revoked; or
‘‘(C) applicants that are affiliated with 1 or more
licensed small business investment companies described
in subparagraph (A) and that have applied for another
license under the Small Business Investment Act of 1958,
which application remains pending.’’.

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SEC. 404. COLLECTION OF SYSTEMIC RISK DATA; REPORTS; EXAMINATIONS; DISCLOSURES.

Section 204 of the Investment Advisers Act of 1940 (15 U.S.C.
80b–4) is amended—
(1) by redesignating subsections (b) and (c) as subsections
(c) and (d), respectively; and
(2) by inserting after subsection (a) the following:
‘‘(b) RECORDS AND REPORTS OF PRIVATE FUNDS.—
‘‘(1) IN GENERAL.—The Commission may require any investment adviser registered under this title—
‘‘(A) to maintain such records of, and file with the
Commission such reports regarding, private funds advised

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124 STAT. 1572

PUBLIC LAW 111–203—JULY 21, 2010
by the investment adviser, as necessary and appropriate
in the public interest and for the protection of investors,
or for the assessment of systemic risk by the Financial
Stability Oversight Council (in this subsection referred to
as the ‘Council’); and
‘‘(B) to provide or make available to the Council those
reports or records or the information contained therein.
‘‘(2) TREATMENT OF RECORDS.—The records and reports of
any private fund to which an investment adviser registered
under this title provides investment advice shall be deemed
to be the records and reports of the investment adviser.
‘‘(3) REQUIRED INFORMATION.—The records and reports
required to be maintained by an investment adviser and subject
to inspection by the Commission under this subsection shall
include, for each private fund advised by the investment
adviser, a description of—
‘‘(A) the amount of assets under management and use
of leverage, including off-balance-sheet leverage;
‘‘(B) counterparty credit risk exposure;
‘‘(C) trading and investment positions;
‘‘(D) valuation policies and practices of the fund;
‘‘(E) types of assets held;
‘‘(F) side arrangements or side letters, whereby certain
investors in a fund obtain more favorable rights or entitlements than other investors;
‘‘(G) trading practices; and
‘‘(H) such other information as the Commission, in
consultation with the Council, determines is necessary and
appropriate in the public interest and for the protection
of investors or for the assessment of systemic risk, which
may include the establishment of different reporting
requirements for different classes of fund advisers, based
on the type or size of private fund being advised.
‘‘(4) MAINTENANCE OF RECORDS.—An investment adviser
registered under this title shall maintain such records of private
funds advised by the investment adviser for such period or
periods as the Commission, by rule, may prescribe as necessary
and appropriate in the public interest and for the protection
of investors, or for the assessment of systemic risk.
‘‘(5) FILING OF RECORDS.—The Commission shall issue rules
requiring each investment adviser to a private fund to file
reports containing such information as the Commission deems
necessary and appropriate in the public interest and for the
protection of investors or for the assessment of systemic risk.
‘‘(6) EXAMINATION OF RECORDS.—
‘‘(A) PERIODIC AND SPECIAL EXAMINATIONS.—The
Commission—
‘‘(i) shall conduct periodic inspections of the records
of private funds maintained by an investment adviser
registered under this title in accordance with a
schedule established by the Commission; and
‘‘(ii) may conduct at any time and from time to
time such additional, special, and other examinations
as the Commission may prescribe as necessary and
appropriate in the public interest and for the protection
of investors, or for the assessment of systemic risk.

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124 STAT. 1573

‘‘(B) AVAILABILITY OF RECORDS.—An investment adviser
registered under this title shall make available to the
Commission any copies or extracts from such records as
may be prepared without undue effort, expense, or delay,
as the Commission or its representatives may reasonably
request.
‘‘(7) INFORMATION SHARING.—
‘‘(A) IN GENERAL.—The Commission shall make available to the Council copies of all reports, documents, records,
and information filed with or provided to the Commission
by an investment adviser under this subsection as the
Council may consider necessary for the purpose of assessing
the systemic risk posed by a private fund.
‘‘(B) CONFIDENTIALITY.—The Council shall maintain
the confidentiality of information received under this paragraph in all such reports, documents, records, and information, in a manner consistent with the level of confidentiality
established for the Commission pursuant to paragraph (8).
The Council shall be exempt from section 552 of title 5,
United States Code, with respect to any information in
any report, document, record, or information made available, to the Council under this subsection.’’.
‘‘(8) COMMISSION CONFIDENTIALITY OF REPORTS.—Notwithstanding any other provision of law, the Commission may not
be compelled to disclose any report or information contained
therein required to be filed with the Commission under this
subsection, except that nothing in this subsection authorizes
the Commission—
‘‘(A) to withhold information from Congress, upon an
agreement of confidentiality; or
‘‘(B) prevent the Commission from complying with—
‘‘(i) a request for information from any other Federal department or agency or any self-regulatory
organization requesting the report or information for
purposes within the scope of its jurisdiction; or
‘‘(ii) an order of a court of the United States in
an action brought by the United States or the Commission.
‘‘(9) OTHER RECIPIENTS CONFIDENTIALITY.—Any department, agency, or self-regulatory organization that receives
reports or information from the Commission under this subsection shall maintain the confidentiality of such reports, documents, records, and information in a manner consistent with
the level of confidentiality established for the Commission
under paragraph (8).
‘‘(10) PUBLIC INFORMATION EXCEPTION.—
‘‘(A) IN GENERAL.—The Commission, the Council, and
any other department, agency, or self-regulatory organization that receives information, reports, documents, records,
or information from the Commission under this subsection,
shall be exempt from the provisions of section 552 of title
5, United States Code, with respect to any such report,
document, record, or information. Any proprietary information of an investment adviser ascertained by the Commission from any report required to be filed with the Commission pursuant to this subsection shall be subject to the
same limitations on public disclosure as any facts

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PUBLIC LAW 111–203—JULY 21, 2010
ascertained during an examination, as provided by section
210(b) of this title.
‘‘(B) PROPRIETARY INFORMATION.—For purposes of this
paragraph, proprietary information includes sensitive, nonpublic information regarding—
‘‘(i) the investment or trading strategies of the
investment adviser;
‘‘(ii) analytical or research methodologies;
‘‘(iii) trading data;
‘‘(iv) computer hardware or software containing
intellectual property; and
‘‘(v) any additional information that the Commission determines to be proprietary.
‘‘(11) ANNUAL REPORT TO CONGRESS.—The Commission
shall report annually to Congress on how the Commission has
used the data collected pursuant to this subsection to monitor
the markets for the protection of investors and the integrity
of the markets.’’.

SEC. 405. DISCLOSURE PROVISION AMENDMENT.

Section 210(c) of the Investment Advisers Act of 1940 (15
U.S.C. 80b–10(c)) is amended by inserting before the period at
the end the following: ‘‘or for purposes of assessment of potential
systemic risk’’.
SEC. 406. CLARIFICATION OF RULEMAKING AUTHORITY.

Consultation.
Deadline.

Section 211 of the Investment Advisers Act of 1940 (15 U.S.C.
80b–11) is amended—
(1) in subsection (a), by inserting before the period at
the end of the first sentence the following: ‘‘, including rules
and regulations defining technical, trade, and other terms used
in this title, except that the Commission may not define the
term ‘client’ for purposes of paragraphs (1) and (2) of section
206 to include an investor in a private fund managed by an
investment adviser, if such private fund has entered into an
advisory contract with such adviser’’; and
(2) by adding at the end the following:
‘‘(e) DISCLOSURE RULES ON PRIVATE FUNDS.—The Commission
and the Commodity Futures Trading Commission shall, after consultation with the Council but not later than 12 months after
the date of enactment of the Private Fund Investment Advisers
Registration Act of 2010, jointly promulgate rules to establish the
form and content of the reports required to be filed with the
Commission under subsection 204(b) and with the Commodity
Futures Trading Commission by investment advisers that are registered both under this title and the Commodity Exchange Act
(7 U.S.C. 1a et seq.).’’.

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SEC. 407. EXEMPTION OF AND REPORTING BY VENTURE CAPITAL FUND
ADVISERS.

Regulations.

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Section 203 of the Investment Advisers Act of 1940 (15 U.S.C.
80b–3) is amended by adding at the end the following:
‘‘(l) EXEMPTION OF VENTURE CAPITAL FUND ADVISERS.—No
investment adviser that acts as an investment adviser solely to
1 or more venture capital funds shall be subject to the registration
requirements of this title with respect to the provision of investment
advice relating to a venture capital fund. Not later than 1 year
after the date of enactment of this subsection, the Commission

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124 STAT. 1575

shall issue final rules to define the term ‘venture capital fund’
for purposes of this subsection. The Commission shall require such
advisers to maintain such records and provide to the Commission
such annual or other reports as the Commission determines necessary or appropriate in the public interest or for the protection
of investors.’’.

Records.

SEC. 408. EXEMPTION OF AND REPORTING BY CERTAIN PRIVATE FUND
ADVISERS.

Section 203 of the Investment Advisers Act of 1940 (15 U.S.C.
80b–3) is amended by adding at the end the following:
‘‘(m) EXEMPTION OF AND REPORTING BY CERTAIN PRIVATE FUND
ADVISERS.—
‘‘(1) IN GENERAL.—The Commission shall provide an exemption from the registration requirements under this section to
any investment adviser of private funds, if each of such investment adviser acts solely as an adviser to private funds and
has assets under management in the United States of less
than $150,000,000.
‘‘(2) REPORTING.—The Commission shall require investment
advisers exempted by reason of this subsection to maintain
such records and provide to the Commission such annual or
other reports as the Commission determines necessary or appropriate in the public interest or for the protection of investors.
‘‘(n) REGISTRATION AND EXAMINATION OF MID-SIZED PRIVATE
FUND ADVISERS.—In prescribing regulations to carry out the
requirements of this section with respect to investment advisers
acting as investment advisers to mid-sized private funds, the
Commission shall take into account the size, governance, and investment strategy of such funds to determine whether they pose systemic risk, and shall provide for registration and examination procedures with respect to the investment advisers of such funds which
reflect the level of systemic risk posed by such funds.’’.

Records.

Regulations.
Procedures.

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SEC. 409. FAMILY OFFICES.

(a) IN GENERAL.—Section 202(a)(11) of the Investment Advisers
Act of 1940 (15 U.S.C. 80b–2(a)(11)) is amended by striking ‘‘or
(G)’’ and inserting the following: ‘‘; (G) any family office, as defined
by rule, regulation, or order of the Commission, in accordance
with the purposes of this title; or (H)’’.
(b) RULEMAKING.—The rules, regulations, or orders issued by
the Commission pursuant to section 202(a)(11)(G) of the Investment
Advisers Act of 1940, as added by this section, regarding the definition of the term ‘‘family office’’ shall provide for an exemption
that—
(1) is consistent with the previous exemptive policy of the
Commission, as reflected in exemptive orders for family offices
in effect on the date of enactment of this Act, and the
grandfathering provisions in paragraph (3);
(2) recognizes the range of organizational, management,
and employment structures and arrangements employed by
family offices; and
(3) does not exclude any person who was not registered
or required to be registered under the Investment Advisers
Act of 1940 on January 1, 2010 from the definition of the
term ‘‘family office’’, solely because such person provides investment advice to, and was engaged before January 1, 2010 in
providing investment advice to—

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note.

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Deadline.

PUBLIC LAW 111–203—JULY 21, 2010

(A) natural persons who, at the time of their applicable
investment, are officers, directors, or employees of the
family office who—
(i) have invested with the family office before
January 1, 2010; and
(ii) are accredited investors, as defined in Regulation D of the Commission (or any successor thereto)
under the Securities Act of 1933, or, as the Commission
may prescribe by rule, the successors-in-interest
thereto;
(B) any company owned exclusively and controlled by
members of the family of the family office, or as the
Commission may prescribe by rule;
(C) any investment adviser registered under the Investment Adviser Act of 1940 that provides investment advice
to the family office and who identifies investment
opportunities to the family office, and invests in such transactions on substantially the same terms as the family office
invests, but does not invest in other funds advised by
the family office, and whose assets as to which the family
office directly or indirectly provides investment advice represent, in the aggregate, not more than 5 percent of the
value of the total assets as to which the family office
provides investment advice.
(c) ANTIFRAUD AUTHORITY.—A family office that would not be
a family office, but for subsection (b)(3), shall be deemed to be
an investment adviser for the purposes of paragraphs (1), (2) and
(4) of section 206 of the Investment Advisers Act of 1940.

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SEC. 410. STATE AND FEDERAL RESPONSIBILITIES; ASSET THRESHOLD
FOR FEDERAL REGISTRATION OF INVESTMENT ADVISERS.

Section 203A(a) of the of the Investment Advisers Act of 1940
(15 U.S.C. 80b–3a(a)) is amended—
(1) by redesignating paragraph (2) as paragraph (3); and
(2) by inserting after paragraph (1) the following:
‘‘(2) TREATMENT OF MID-SIZED INVESTMENT ADVISERS.—
‘‘(A) IN GENERAL.—No investment adviser described
in subparagraph (B) shall register under section 203, unless
the investment adviser is an adviser to an investment
company registered under the Investment Company Act
of 1940, or a company which has elected to be a business
development company pursuant to section 54 of the Investment Company Act of 1940, and has not withdrawn the
election, except that, if by effect of this paragraph an
investment adviser would be required to register with 15
or more States, then the adviser may register under section
203.
‘‘(B) COVERED PERSONS.—An investment adviser
described in this subparagraph is an investment adviser
that—
‘‘(i) is required to be registered as an investment
adviser with the securities commissioner (or any
agency or office performing like functions) of the State
in which it maintains its principal office and place
of business and, if registered, would be subject to examination as an investment adviser by any such commissioner, agency, or office; and

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124 STAT. 1577

‘‘(ii) has assets under management between—
‘‘(I) the amount specified under subparagraph
(A) of paragraph (1), as such amount may have
been adjusted by the Commission pursuant to that
subparagraph; and
‘‘(II) $100,000,000, or such higher amount as
the Commission may, by rule, deem appropriate
in accordance with the purposes of this title.’’.
SEC. 411. CUSTODY OF CLIENT ASSETS.

The Investment Advisers Act of 1940 (15 U.S.C. 80b–1 et seq.)
is amended by adding at the end the following new section:
‘‘SEC. 223. CUSTODY OF CLIENT ACCOUNTS.

15 USC 80b–18b.

‘‘An investment adviser registered under this title shall take
such steps to safeguard client assets over which such adviser has
custody, including, without limitation, verification of such assets
by an independent public accountant, as the Commission may,
by rule, prescribe.’’.
SEC. 412. COMPTROLLER GENERAL STUDY ON CUSTODY RULE COSTS.

The Comptroller General of the United States shall—
(1) conduct a study of—
(A) the compliance costs associated with the current
Securities and Exchange Commission rules 204–2 (17
C.F.R. Parts 275.204–2) and rule 206(4)–2 (17 C.F.R.
275.206(4)–2) under the Investment Advisers Act of 1940
regarding custody of funds or securities of clients by investment advisers; and
(B) the additional costs if subsection (b)(6) of rule
206(4)–2 (17 C.F.R. 275.206(4)–2(b)(6)) relating to operational independence were eliminated; and
(2) submit a report to the Committee on Banking, Housing,
and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives on the results
of such study, not later than 3 years after the date of enactment
of this Act.

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SEC. 413. ADJUSTING THE ACCREDITED INVESTOR STANDARD.

Reports.
Deadline.

15 USC 77b note.

(a) IN GENERAL.—The Commission shall adjust any net worth
standard for an accredited investor, as set forth in the rules of
the Commission under the Securities Act of 1933, so that the
individual net worth of any natural person, or joint net worth
with the spouse of that person, at the time of purchase, is more
than $1,000,000 (as such amount is adjusted periodically by rule
of the Commission), excluding the value of the primary residence
of such natural person, except that during the 4-year period that
begins on the date of enactment of this Act, any net worth standard
shall be $1,000,000, excluding the value of the primary residence
of such natural person.
(b) REVIEW AND ADJUSTMENT.—
(1) INITIAL REVIEW AND ADJUSTMENT.—
(A) INITIAL REVIEW.—The Commission may undertake
a review of the definition of the term ‘‘accredited investor’’,
as such term applies to natural persons, to determine
whether the requirements of the definition, excluding the
requirement relating to the net worth standard described
in subsection (a), should be adjusted or modified for the

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PUBLIC LAW 111–203—JULY 21, 2010
protection of investors, in the public interest, and in light
of the economy.
(B) ADJUSTMENT OR MODIFICATION.—Upon completion
of a review under subparagraph (A), the Commission may,
by notice and comment rulemaking, make such adjustments
to the definition of the term ‘‘accredited investor’’, excluding
adjusting or modifying the requirement relating to the
net worth standard described in subsection (a), as such
term applies to natural persons, as the Commission may
deem appropriate for the protection of investors, in the
public interest, and in light of the economy.
(2) SUBSEQUENT REVIEWS AND ADJUSTMENT.—
(A) SUBSEQUENT REVIEWS.—Not earlier than 4 years
after the date of enactment of this Act, and not less frequently than once every 4 years thereafter, the Commission
shall undertake a review of the definition, in its entirety,
of the term ‘‘accredited investor’’, as defined in section
230.215 of title 17, Code of Federal Regulations, or any
successor thereto, as such term applies to natural persons,
to determine whether the requirements of the definition
should be adjusted or modified for the protection of investors, in the public interest, and in light of the economy.
(B) ADJUSTMENT OR MODIFICATION.—Upon completion
of a review under subparagraph (A), the Commission may,
by notice and comment rulemaking, make such adjustments
to the definition of the term ‘‘accredited investor’’, as
defined in section 230.215 of title 17, Code of Federal
Regulations, or any successor thereto, as such term applies
to natural persons, as the Commission may deem appropriate for the protection of investors, in the public interest,
and in light of the economy.

Deadlines.

SEC. 414. RULE OF CONSTRUCTION RELATING TO THE COMMODITIES
EXCHANGE ACT.

The Investment Advisers Act of 1940 (15 U.S.C. 80b–1 et seq.)
is further amended by adding at the end the following new section:
15 USC 80b–18c.

‘‘SEC. 224. RULE OF CONSTRUCTION RELATING TO THE COMMODITIES
EXCHANGE ACT.

‘‘Nothing in this title shall relieve any person of any obligation
or duty, or affect the availability of any right or remedy available
to the Commodity Futures Trading Commission or any private
party, arising under the Commodity Exchange Act (7 U.S.C. 1
et seq.) governing commodity pools, commodity pool operators, or
commodity trading advisors.’’.

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SEC. 415. GAO STUDY AND REPORT ON ACCREDITED INVESTORS.

The Comptroller General of the United States shall conduct
a study on the appropriate criteria for determining the financial
thresholds or other criteria needed to qualify for accredited investor
status and eligibility to invest in private funds, and shall submit
a report to the Committee on Banking, Housing, and Urban Affairs
of the Senate and the Committee on Financial Services of the
House of Representatives on the results of such study not later
than 3 years after the date of enactment of this Act.

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SEC. 416. GAO STUDY ON SELF-REGULATORY ORGANIZATION FOR PRIVATE FUNDS.

The Comptroller General of the United States shall—
(1) conduct a study of the feasibility of forming a selfregulatory organization to oversee private funds; and
(2) submit a report to the Committee on Banking, Housing,
and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives on the results
of such study, not later than 1 year after the date of enactment
of this Act.

Reports.
Deadline.

SEC. 417. COMMISSION STUDY AND REPORT ON SHORT SELLING.

(a) STUDIES.—The Division of Risk, Strategy, and Financial
Innovation of the Commission shall conduct—
(1) a study, taking into account current scholarship, on
the state of short selling on national securities exchanges and
in the over-the-counter markets, with particular attention to
the impact of recent rule changes and the incidence of—
(A) the failure to deliver shares sold short; or
(B) delivery of shares on the fourth day following the
short sale transaction; and
(2) a study of—
(A) the feasibility, benefits, and costs of requiring
reporting publicly, in real time short sale positions of publicly listed securities, or, in the alternative, reporting such
short positions in real time only to the Commission and
the Financial Industry Regulatory Authority; and
(B) the feasibility, benefits, and costs of conducting
a voluntary pilot program in which public companies will
agree to have all trades of their shares marked ‘‘short’’,
‘‘market maker short’’, ‘‘buy’’, ‘‘buy-to-cover’’, or ‘‘long’’, and
reported in real time through the Consolidated Tape.
(b) REPORTS.—The Commission shall submit a report to the
Committee on Banking, Housing, and Urban Affairs of the Senate
and the Committee on Financial Services of the House of Representatives—
(1) on the results of the study required under subsection
(a)(1), including recommendations for market improvements,
not later than 2 years after the date of enactment of this
Act; and
(2) on the results of the study required under subsection
(a)(2), not later than 1 year after the date of enactment of
this Act.

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SEC. 418. QUALIFIED CLIENT STANDARD.

Section 205(e) of the Investment Advisers Act of 1940 (15
U.S.C. 80b–5(e)) is amended by adding at the end the following:
‘‘With respect to any factor used in any rule or regulation by
the Commission in making a determination under this subsection,
if the Commission uses a dollar amount test in connection with
such factor, such as a net asset threshold, the Commission shall,
by order, not later than 1 year after the date of enactment of
the Private Fund Investment Advisers Registration Act of 2010,
and every 5 years thereafter, adjust for the effects of inflation
on such test. Any such adjustment that is not a multiple of $100,000
shall be rounded to the nearest multiple of $100,000.’’.

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124 STAT. 1580
15 USC 80b–2
note.
Effective date.

PUBLIC LAW 111–203—JULY 21, 2010

SEC. 419. TRANSITION PERIOD.

Except as otherwise provided in this title, this title and the
amendments made by this title shall become effective 1 year after
the date of enactment of this Act, except that any investment
adviser may, at the discretion of the investment adviser, register
with the Commission under the Investment Advisers Act of 1940
during that 1-year period, subject to the rules of the Commission.

TITLE V—INSURANCE
Federal
Insurance Office
Act of 2010.
31 USC 301 note.

Subtitle A—Federal Insurance Office
SEC. 501. SHORT TITLE.

This subtitle may be cited as the ‘‘Federal Insurance Office
Act of 2010’’.
SEC. 502. FEDERAL INSURANCE OFFICE.

(a) ESTABLISHMENT OF OFFICE.—Subchapter I of chapter 3 of
subtitle I of title 31, United States Code, is amended—
(1) by redesignating section 312 as section 315;
(2) by redesignating section 313 as section 312; and
(3) by inserting after section 312 (as so redesignated) the
following new sections:

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‘‘SEC. 313. FEDERAL INSURANCE OFFICE.

‘‘(a) ESTABLISHMENT.—There is established within the Department of the Treasury the Federal Insurance Office.
‘‘(b) LEADERSHIP.—The Office shall be headed by a Director,
who shall be appointed by the Secretary of the Treasury. The
position of Director shall be a career reserved position in the Senior
Executive Service, as that position is defined under section 3132
of title 5, United States Code.
‘‘(c) FUNCTIONS.—
‘‘(1) AUTHORITY PURSUANT TO DIRECTION OF SECRETARY.—
The Office, pursuant to the direction of the Secretary, shall
have the authority—
‘‘(A) to monitor all aspects of the insurance industry,
including identifying issues or gaps in the regulation of
insurers that could contribute to a systemic crisis in the
insurance industry or the United States financial system;
‘‘(B) to monitor the extent to which traditionally underserved communities and consumers, minorities (as such
term is defined in section 1204(c) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12
U.S.C. 1811 note)), and low- and moderate-income persons
have access to affordable insurance products regarding all
lines of insurance, except health insurance;
‘‘(C) to recommend to the Financial Stability Oversight
Council that it designate an insurer, including the affiliates
of such insurer, as an entity subject to regulation as a
nonbank financial company supervised by the Board of
Governors pursuant to title I of the Dodd-Frank Wall Street
Reform and Consumer Protection Act;
‘‘(D) to assist the Secretary in administering the Terrorism Insurance Program established in the Department

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1581

of the Treasury under the Terrorism Risk Insurance Act
of 2002 (15 U.S.C. 6701 note);
‘‘(E) to coordinate Federal efforts and develop Federal
policy on prudential aspects of international insurance matters, including representing the United States, as appropriate, in the International Association of Insurance Supervisors (or a successor entity) and assisting the Secretary
in negotiating covered agreements (as such term is defined
in subsection (r));
‘‘(F) to determine, in accordance with subsection (f),
whether State insurance measures are preempted by covered agreements;
‘‘(G) to consult with the States (including State insurance regulators) regarding insurance matters of national
importance and prudential insurance matters of international importance; and
‘‘(H) to perform such other related duties and authorities as may be assigned to the Office by the Secretary.
‘‘(2) ADVISORY FUNCTIONS.—The Office shall advise the Secretary on major domestic and prudential international insurance policy issues.
‘‘(3) ADVISORY CAPACITY ON COUNCIL.—The Director shall
serve in an advisory capacity on the Financial Stability Oversight Council established under the Financial Stability Act
of 2010.
‘‘(d) SCOPE.—The authority of the Office shall extend to all
lines of insurance except—
‘‘(1) health insurance, as determined by the Secretary in
coordination with the Secretary of Health and Human Services
based on section 2791 of the Public Health Service Act (42
U.S.C. 300gg–91);
‘‘(2) long-term care insurance, except long-term care insurance that is included with life or annuity insurance components,
as determined by the Secretary in coordination with the Secretary of Health and Human Services, and in the case of
long-term care insurance that is included with such components, the Secretary shall coordinate with the Secretary of
Health and Human Services in performing the functions of
the Office; and
‘‘(3) crop insurance, as established by the Federal Crop
Insurance Act (7 U.S.C. 1501 et seq.).
‘‘(e) GATHERING OF INFORMATION.—
‘‘(1) IN GENERAL.—In carrying out the functions required
under subsection (c), the Office may—
‘‘(A) receive and collect data and information on and
from the insurance industry and insurers;
‘‘(B) enter into information-sharing agreements;
‘‘(C) analyze and disseminate data and information;
and
‘‘(D) issue reports regarding all lines of insurance
except health insurance.
‘‘(2) COLLECTION OF INFORMATION FROM INSURERS AND
AFFILIATES.—
‘‘(A) IN GENERAL.—Except as provided in paragraph
(3), the Office may require an insurer, or any affiliate
of an insurer, to submit such data or information as the

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PUBLIC LAW 111–203—JULY 21, 2010
Office may reasonably require in carrying out the functions
described under subsection (c).
‘‘(B) RULE OF CONSTRUCTION.—Notwithstanding any
other provision of this section, for purposes of subparagraph
(A), the term ‘insurer’ means any entity that writes insurance or reinsures risks and issues contracts or policies
in 1 or more States.
‘‘(3) EXCEPTION FOR SMALL INSURERS.—Paragraph (2) shall
not apply with respect to any insurer or affiliate thereof that
meets a minimum size threshold that the Office may establish,
whether by order or rule.
‘‘(4) ADVANCE COORDINATION.—Before collecting any data
or information under paragraph (2) from an insurer, or affiliate
of an insurer, the Office shall coordinate with each relevant
Federal agency and State insurance regulator (or other relevant
Federal or State regulatory agency, if any, in the case of an
affiliate of an insurer) and any publicly available sources to
determine if the information to be collected is available from,
and may be obtained in a timely manner by, such Federal
agency or State insurance regulator, individually or collectively,
other regulatory agency, or publicly available sources. If the
Director determines that such data or information is available,
and may be obtained in a timely manner, from such an agency,
regulator, regulatory agency, or source, the Director shall obtain
the data or information from such agency, regulator, regulatory
agency, or source. If the Director determines that such data
or information is not so available, the Director may collect
such data or information from an insurer (or affiliate) only
if the Director complies with the requirements of subchapter
I of chapter 35 of title 44, United States Code (relating to
Federal information policy; commonly known as the Paperwork
Reduction Act), in collecting such data or information. Notwithstanding any other provision of law, each such relevant Federal
agency and State insurance regulator or other Federal or State
regulatory agency is authorized to provide to the Office such
data or information.
‘‘(5) CONFIDENTIALITY.—
‘‘(A) RETENTION OF PRIVILEGE.—The submission of any
nonpublicly available data and information to the Office
under this subsection shall not constitute a waiver of,
or otherwise affect, any privilege arising under Federal
or State law (including the rules of any Federal or State
court) to which the data or information is otherwise subject.
‘‘(B) CONTINUED APPLICATION OF PRIOR CONFIDENTIALITY AGREEMENTS.—Any requirement under Federal or
State law to the extent otherwise applicable, or any requirement pursuant to a written agreement in effect between
the original source of any nonpublicly available data or
information and the source of such data or information
to the Office, regarding the privacy or confidentiality of
any data or information in the possession of the source
to the Office, shall continue to apply to such data or
information after the data or information has been provided
pursuant to this subsection to the Office.
‘‘(C) INFORMATION-SHARING AGREEMENT.—Any data or
information obtained by the Office may be made available

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1583

to State insurance regulators, individually or collectively,
through an information-sharing agreement that—
‘‘(i) shall comply with applicable Federal law; and
‘‘(ii) shall not constitute a waiver of, or otherwise
affect, any privilege under Federal or State law
(including the rules of any Federal or State court)
to which the data or information is otherwise subject.
‘‘(D) AGENCY DISCLOSURE REQUIREMENTS.—Section 552
of title 5, United States Code, shall apply to any data
or information submitted to the Office by an insurer or
an affiliate of an insurer.
‘‘(6) SUBPOENAS AND ENFORCEMENT.—The Director shall
have the power to require by subpoena the production of the
data or information requested under paragraph (2), but only
upon a written finding by the Director that such data or
information is required to carry out the functions described
under subsection (c) and that the Office has coordinated with
such regulator or agency as required under paragraph (4).
Subpoenas shall bear the signature of the Director and shall
be served by any person or class of persons designated by
the Director for that purpose. In the case of contumacy or
failure to obey a subpoena, the subpoena shall be enforceable
by order of any appropriate district court of the United States.
Any failure to obey the order of the court may be punished
by the court as a contempt of court.
‘‘(f) PREEMPTION OF STATE INSURANCE MEASURES.—
‘‘(1) STANDARD.—A State insurance measure shall be preempted pursuant to this section or section 314 if, and only
to the extent that the Director determines, in accordance with
this subsection, that the measure—
‘‘(A) results in less favorable treatment of a non-United
States insurer domiciled in a foreign jurisdiction that is
subject to a covered agreement than a United States
insurer domiciled, licensed, or otherwise admitted in that
State; and
‘‘(B) is inconsistent with a covered agreement.
‘‘(2) DETERMINATION.—
‘‘(A) NOTICE OF POTENTIAL INCONSISTENCY.—Before
making any determination under paragraph (1), the
Director shall—
‘‘(i) notify and consult with the appropriate State
regarding any potential inconsistency or preemption;
‘‘(ii) notify and consult with the United States
Trade Representative regarding any potential
inconsistency or preemption;
‘‘(iii) cause to be published in the Federal Register
notice of the issue regarding the potential inconsistency
or preemption, including a description of each State
insurance measure at issue and any applicable covered
agreement;
‘‘(iv) provide interested parties a reasonable opportunity to submit written comments to the Office; and
‘‘(v) consider any comments received.
‘‘(B) SCOPE OF REVIEW.—For purposes of this subsection, any determination of the Director regarding State
insurance measures, and any preemption under paragraph
(1) as a result of such determination, shall be limited

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PUBLIC LAW 111–203—JULY 21, 2010

to the subject matter contained within the covered agreement involved and shall achieve a level of protection for
insurance or reinsurance consumers that is substantially
equivalent to the level of protection achieved under State
insurance or reinsurance regulation.
‘‘(C) NOTICE OF DETERMINATION OF INCONSISTENCY.—
Upon making any determination under paragraph (1), the
Director shall—
‘‘(i) notify the appropriate State of the determination and the extent of the inconsistency;
‘‘(ii) establish a reasonable period of time, which
shall not be less than 30 days, before the determination
shall become effective; and
‘‘(iii) notify the Committees on Financial Services
and Ways and Means of the House of Representatives
and the Committees on Banking, Housing, and Urban
Affairs and Finance of the Senate.
‘‘(3) NOTICE OF EFFECTIVENESS.—Upon the conclusion of
the period referred to in paragraph (2)(C)(ii), if the basis for
such determination still exists, the determination shall become
effective and the Director shall—
‘‘(A) cause to be published a notice in the Federal
Register that the preemption has become effective, as well
as the effective date; and
‘‘(B) notify the appropriate State.
‘‘(4) LIMITATION.—No State may enforce a State insurance
measure to the extent that such measure has been preempted
under this subsection.
‘‘(g) APPLICABILITY OF ADMINISTRATIVE PROCEDURES ACT.—
Determinations of inconsistency made pursuant to subsection (f)(2)
shall be subject to the applicable provisions of subchapter II of
chapter 5 of title 5, United States Code (relating to administrative
procedure), and chapter 7 of such title (relating to judicial review),
except that in any action for judicial review of a determination
of inconsistency, the court shall determine the matter de novo.
‘‘(h) REGULATIONS, POLICIES, AND PROCEDURES.—The Secretary
may issue orders, regulations, policies, and procedures to implement
this section.
‘‘(i) CONSULTATION.—The Director shall consult with State
insurance regulators, individually or collectively, to the extent the
Director determines appropriate, in carrying out the functions of
the Office.
‘‘(j) SAVINGS PROVISIONS.—Nothing in this section shall—
‘‘(1) preempt—
‘‘(A) any State insurance measure that governs any
insurer’s rates, premiums, underwriting, or sales practices;
‘‘(B) any State coverage requirements for insurance;
‘‘(C) the application of the antitrust laws of any State
to the business of insurance; or
‘‘(D) any State insurance measure governing the capital
or solvency of an insurer, except to the extent that such
State insurance measure results in less favorable treatment
of a non-United State insurer than a United States insurer;
‘‘(2) be construed to alter, amend, or limit any provision
of the Consumer Financial Protection Agency Act of 2010; or
‘‘(3) affect the preemption of any State insurance measure
otherwise inconsistent with and preempted by Federal law.

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124 STAT. 1585

‘‘(k) RETENTION OF EXISTING STATE REGULATORY AUTHORITY.—
Nothing in this section or section 314 shall be construed to establish
or provide the Office or the Department of the Treasury with
general supervisory or regulatory authority over the business of
insurance.
‘‘(l) RETENTION OF AUTHORITY OF FEDERAL FINANCIAL REGULATORY AGENCIES.—Nothing in this section or section 314 shall
be construed to limit the authority of any Federal financial regulatory agency, including the authority to develop and coordinate
policy, negotiate, and enter into agreements with foreign governments, authorities, regulators, and multinational regulatory
committees and to preempt State measures to affect uniformity
with international regulatory agreements.
‘‘(m) RETENTION OF AUTHORITY OF UNITED STATES TRADE REPRESENTATIVE.—Nothing in this section or section 314 shall be construed to affect the authority of the Office of the United States
Trade Representative pursuant to section 141 of the Trade Act
of 1974 (19 U.S.C. 2171) or any other provision of law, including
authority over the development and coordination of United States
international trade policy and the administration of the United
States trade agreements program.
‘‘(n) ANNUAL REPORTS TO CONGRESS.—
‘‘(1) SECTION 313(f) REPORTS.—Beginning September 30,
2011, the Director shall submit a report on or before September
30 of each calendar year to the President and to the Committees
on Financial Services and Ways and Means of the House of
Representatives and the Committees on Banking, Housing, and
Urban Affairs and Finance of the Senate on any actions taken
by the Office pursuant to subsection (f) (regarding preemption
of inconsistent State insurance measures).
‘‘(2) INSURANCE INDUSTRY.—Beginning September 30, 2011,
the Director shall submit a report on or before September
30 of each calendar year to the President and to the Committee
on Financial Services of the House of Representatives and
the Committee on Banking, Housing, and Urban Affairs of
the Senate on the insurance industry and any other information
as deemed relevant by the Director or requested by such
Committees.
‘‘(o) REPORTS ON U.S. AND GLOBAL REINSURANCE MARKET.—
The Director shall submit to the Committee on Financial Services
of the House of Representatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate—
‘‘(1) a report received not later than September 30, 2012,
describing the breadth and scope of the global reinsurance
market and the critical role such market plays in supporting
insurance in the United States; and
‘‘(2) a report received not later than January 1, 2013,
and updated not later than January 1, 2015, describing the
impact of part II of the Nonadmitted and Reinsurance Reform
Act of 2010 on the ability of State regulators to access reinsurance information for regulated companies in their jurisdictions.
‘‘(p) STUDY AND REPORT ON REGULATION OF INSURANCE.—
‘‘(1) IN GENERAL.—Not later than 18 months after the date
of enactment of this section, the Director shall conduct a study
and submit a report to Congress on how to modernize and
improve the system of insurance regulation in the United
States.

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‘‘(2) CONSIDERATIONS.—The study and report required
under paragraph (1) shall be based on and guided by the
following considerations:
‘‘(A) Systemic risk regulation with respect to insurance.
‘‘(B) Capital standards and the relationship between
capital allocation and liabilities, including standards
relating to liquidity and duration risk.
‘‘(C) Consumer protection for insurance products and
practices, including gaps in State regulation.
‘‘(D) The degree of national uniformity of State insurance regulation.
‘‘(E) The regulation of insurance companies and affiliates on a consolidated basis.
‘‘(F) International coordination of insurance regulation.
‘‘(3) ADDITIONAL FACTORS.—The study and report required
under paragraph (1) shall also examine the following factors:
‘‘(A) The costs and benefits of potential Federal regulation of insurance across various lines of insurance (except
health insurance).
‘‘(B) The feasibility of regulating only certain lines
of insurance at the Federal level, while leaving other lines
of insurance to be regulated at the State level.
‘‘(C) The ability of any potential Federal regulation
or Federal regulators to eliminate or minimize regulatory
arbitrage.
‘‘(D) The impact that developments in the regulation
of insurance in foreign jurisdictions might have on the
potential Federal regulation of insurance.
‘‘(E) The ability of any potential Federal regulation
or Federal regulator to provide robust consumer protection
for policyholders.
‘‘(F) The potential consequences of subjecting insurance
companies to a Federal resolution authority, including the
effects of any Federal resolution authority—
‘‘(i) on the operation of State insurance guaranty
fund systems, including the loss of guaranty fund coverage if an insurance company is subject to a Federal
resolution authority;
‘‘(ii) on policyholder protection, including the loss
of the priority status of policyholder claims over other
unsecured general creditor claims;
‘‘(iii) in the case of life insurance companies, on
the loss of the special status of separate account assets
and separate account liabilities; and
‘‘(iv) on the international competitiveness of insurance companies.
‘‘(G) Such other factors as the Director determines
necessary or appropriate, consistent with the principles
set forth in paragraph (2).
‘‘(4) REQUIRED RECOMMENDATIONS.—The study and report
required under paragraph (1) shall also contain any legislative,
administrative, or regulatory recommendations, as the Director
determines appropriate, to carry out or effectuate the findings
set forth in such report.
‘‘(5) CONSULTATION.—With respect to the study and report
required under paragraph (1), the Director shall consult with

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the State insurance regulators, consumer organizations, representatives of the insurance industry and policyholders, and
other organizations and experts, as appropriate.
‘‘(q) USE OF EXISTING RESOURCES.—To carry out this section,
the Office may employ personnel, facilities, and any other resource
of the Department of the Treasury available to the Secretary and
the Secretary shall dedicate specific personnel to the Office.
‘‘(r) DEFINITIONS.—In this section and section 314, the following
definitions shall apply:
‘‘(1) AFFILIATE.—The term ‘affiliate’ means, with respect
to an insurer, any person who controls, is controlled by, or
is under common control with the insurer.
‘‘(2) COVERED AGREEMENT.—The term ‘covered agreement’
means a written bilateral or multilateral agreement regarding
prudential measures with respect to the business of insurance
or reinsurance that—
‘‘(A) is entered into between the United States and
one or more foreign governments, authorities, or regulatory
entities; and
‘‘(B) relates to the recognition of prudential measures
with respect to the business of insurance or reinsurance
that achieves a level of protection for insurance or reinsurance consumers that is substantially equivalent to the level
of protection achieved under State insurance or reinsurance
regulation.
‘‘(3) INSURER.—The term ‘insurer’ means any person
engaged in the business of insurance, including reinsurance.
‘‘(4) FEDERAL FINANCIAL REGULATORY AGENCY.—The term
‘Federal financial regulatory agency’ means the Department
of the Treasury, the Board of Governors of the Federal Reserve
System, the Office of the Comptroller of the Currency, the
Office of Thrift Supervision, the Securities and Exchange
Commission, the Commodity Futures Trading Commission, the
Federal Deposit Insurance Corporation, the Federal Housing
Finance Agency, or the National Credit Union Administration.
‘‘(5) NON-UNITED STATES INSURER.—The term ‘non-United
States insurer’ means an insurer that is organized under the
laws of a jurisdiction other than a State, but does not include
any United States branch of such an insurer.
‘‘(6) OFFICE.—The term ‘Office’ means the Federal Insurance Office established by this section.
‘‘(7) STATE INSURANCE MEASURE.—The term ‘State insurance measure’ means any State law, regulation, administrative
ruling, bulletin, guideline, or practice relating to or affecting
prudential measures applicable to insurance or reinsurance.
‘‘(8) STATE INSURANCE REGULATOR.—The term ‘State insurance regulator’ means any State regulatory authority responsible for the supervision of insurers.
‘‘(9) SUBSTANTIALLY EQUIVALENT TO THE LEVEL OF PROTECTION ACHIEVED.—The term ‘substantially equivalent to the level
of protection achieved’ means the prudential measures of a
foreign government, authority, or regulatory entity achieve a
similar outcome in consumer protection as the outcome achieved
under State insurance or reinsurance regulation.
‘‘(10) UNITED STATES INSURER.—The term ‘United States
insurer’ means—

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‘‘(A) an insurer that is organized under the laws of
a State; or
‘‘(B) a United States branch of a non-United States
insurer.
‘‘(s) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated for the Office for each fiscal year such sums
as may be necessary.
‘‘SEC. 314. COVERED AGREEMENTS.

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Time period.

‘‘(a) AUTHORITY.—The Secretary and the United States Trade
Representative are authorized, jointly, to negotiate and enter into
covered agreements on behalf of the United States.
‘‘(b) REQUIREMENTS FOR CONSULTATION WITH CONGRESS.—
‘‘(1) IN GENERAL.—Before initiating negotiations to enter
into a covered agreement under subsection (a), during such
negotiations, and before entering into any such agreement,
the Secretary and the United States Trade Representative shall
jointly consult with the Committee on Financial Services and
the Committee on Ways and Means of the House of Representatives and the Committee on Banking, Housing, and Urban
Affairs and the Committee on Finance of the Senate.
‘‘(2) SCOPE.—The consultation described in paragraph (1)
shall include consultation with respect to—
‘‘(A) the nature of the agreement;
‘‘(B) how and to what extent the agreement will achieve
the applicable purposes, policies, priorities, and objectives
of section 313 and this section; and
‘‘(C) the implementation of the agreement, including
the general effect of the agreement on existing State laws.
‘‘(c) SUBMISSION AND LAYOVER PROVISIONS.—A covered agreement under subsection (a) may enter into force with respect to
the United States only if—
‘‘(1) the Secretary and the United States Trade Representative jointly submit to the congressional committees specified
in subsection (b)(1), on a day on which both Houses of Congress
are in session, a copy of the final legal text of the agreement;
and
‘‘(2) a period of 90 calendar days beginning on the date
on which the copy of the final legal text of the agreement
is submitted to the congressional committees under paragraph
(1) has expired.’’.
(b) DUTIES OF SECRETARY.—Section 321(a) of title 31, United
States Code, is amended—
(1) in paragraph (7), by striking ‘‘; and’’ and inserting
a semicolon;
(2) in paragraph (8)(C), by striking the period at the end
and inserting ‘‘; and’’; and
(3) by adding at the end the following new paragraph:
‘‘(9) advise the President on major domestic and international prudential policy issues in connection with all lines
of insurance except health insurance.’’.
(c) CLERICAL AMENDMENT.—The table of sections for subchapter
I of chapter 3 of title 31, United States Code, is amended by
striking the item relating to section 312 and inserting the following
new items:
‘‘Sec. 312. Terrorism and financial intelligence.
‘‘Sec. 313. Federal Insurance Office.

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124 STAT. 1589

‘‘Sec. 314. Covered agreements.
‘‘Sec. 315. Continuing in office.’’.

Subtitle B—State-Based Insurance Reform
SEC. 511. SHORT TITLE.

This subtitle may be cited as the ‘‘Nonadmitted and Reinsurance Reform Act of 2010’’.
SEC. 512. EFFECTIVE DATE.

Except as otherwise specifically provided in this subtitle, this
subtitle shall take effect upon the expiration of the 12-month period
beginning on the date of the enactment of this subtitle.

Nonadmitted and
Reinsurance
Reform Act
of 2010.
15 USC 8201
note.
15 USC 8201
note.

PART I—NONADMITTED INSURANCE

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SEC. 521. REPORTING, PAYMENT, AND ALLOCATION OF PREMIUM
TAXES.

(a) HOME STATE’S EXCLUSIVE AUTHORITY.—No State other than
the home State of an insured may require any premium tax payment for nonadmitted insurance.
(b) ALLOCATION OF NONADMITTED PREMIUM TAXES.—
(1) IN GENERAL.—The States may enter into a compact
or otherwise establish procedures to allocate among the States
the premium taxes paid to an insured’s home State described
in subsection (a).
(2) EFFECTIVE DATE.—Except as expressly otherwise provided in such compact or other procedures, any such compact
or other procedures—
(A) if adopted on or before the expiration of the 330day period that begins on the date of the enactment of
this subtitle, shall apply to any premium taxes that, on
or after such date of enactment, are required to be paid
to any State that is subject to such compact or procedures;
and
(B) if adopted after the expiration of such 330-day
period, shall apply to any premium taxes that, on or after
January 1 of the first calendar year that begins after
the expiration of such 330-day period, are required to be
paid to any State that is subject to such compact or procedures.
(3) REPORT.—Upon the expiration of the 330-day period
referred to in paragraph (2), the NAIC may submit a report
to the Committee on Financial Services and the Committee
on the Judiciary of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate
identifying and describing any compact or other procedures
for allocation among the States of premium taxes that have
been adopted during such period by any States.
(4) NATIONWIDE SYSTEM.—The Congress intends that each
State adopt nationwide uniform requirements, forms, and procedures, such as an interstate compact, that provide for the
reporting, payment, collection, and allocation of premium taxes
for nonadmitted insurance consistent with this section.
(c) ALLOCATION BASED ON TAX ALLOCATION REPORT.—To facilitate the payment of premium taxes among the States, an insured’s
home State may require surplus lines brokers and insureds who

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15 USC 8201.

Applicability.

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124 STAT. 1590

PUBLIC LAW 111–203—JULY 21, 2010

have independently procured insurance to annually file tax allocation reports with the insured’s home State detailing the portion
of the nonadmitted insurance policy premium or premiums attributable to properties, risks, or exposures located in each State.
The filing of a nonadmitted insurance tax allocation report and
the payment of tax may be made by a person authorized by the
insured to act as its agent.
15 USC 8202.

SEC. 522. REGULATION OF NONADMITTED INSURANCE BY INSURED’S
HOME STATE.

(a) HOME STATE AUTHORITY.—Except as otherwise provided
in this section, the placement of nonadmitted insurance shall be
subject to the statutory and regulatory requirements solely of the
insured’s home State.
(b) BROKER LICENSING.—No State other than an insured’s home
State may require a surplus lines broker to be licensed in order
to sell, solicit, or negotiate nonadmitted insurance with respect
to such insured.
(c) ENFORCEMENT PROVISION.—With respect to section 521 and
subsections (a) and (b) of this section, any law, regulation, provision,
or action of any State that applies or purports to apply to nonadmitted insurance sold to, solicited by, or negotiated with an
insured whose home State is another State shall be preempted
with respect to such application.
(d) WORKERS’ COMPENSATION EXCEPTION.—This section may
not be construed to preempt any State law, rule, or regulation
that restricts the placement of workers’ compensation insurance
or excess insurance for self-funded workers’ compensation plans
with a nonadmitted insurer.
SEC. 523. PARTICIPATION IN NATIONAL PRODUCER DATABASE.

Time period.

After the expiration of the 2-year period beginning on the
date of the enactment of this subtitle, a State may not collect
any fees relating to licensing of an individual or entity as a surplus
lines broker in the State unless the State has in effect at such
time laws or regulations that provide for participation by the State
in the national insurance producer database of the NAIC, or any
other equivalent uniform national database, for the licensure of
surplus lines brokers and the renewal of such licenses.

15 USC 8204.

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15 USC 8203.

SEC. 524. UNIFORM STANDARDS FOR SURPLUS LINES ELIGIBILITY.

A State may not—
(1) impose eligibility requirements on, or otherwise establish eligibility criteria for, nonadmitted insurers domiciled in
a United States jurisdiction, except in conformance with such
requirements and criteria in sections 5A(2) and 5C(2)(a) of
the Non-Admitted Insurance Model Act, unless the State has
adopted nationwide uniform requirements, forms, and procedures developed in accordance with section 521(b) of this subtitle that include alternative nationwide uniform eligibility
requirements; or
(2) prohibit a surplus lines broker from placing nonadmitted insurance with, or procuring nonadmitted insurance
from, a nonadmitted insurer domiciled outside the United
States that is listed on the Quarterly Listing of Alien Insurers
maintained by the International Insurers Department of the
NAIC.

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PUBLIC LAW 111–203—JULY 21, 2010
SEC.

525.

STREAMLINED
CHASERS.

APPLICATION

FOR

COMMERCIAL

124 STAT. 1591
PUR-

A surplus lines broker seeking to procure or place nonadmitted
insurance in a State for an exempt commercial purchaser shall
not be required to satisfy any State requirement to make a due
diligence search to determine whether the full amount or type
of insurance sought by such exempt commercial purchaser can
be obtained from admitted insurers if—
(1) the broker procuring or placing the surplus lines insurance has disclosed to the exempt commercial purchaser that
such insurance may or may not be available from the admitted
market that may provide greater protection with more regulatory oversight; and
(2) the exempt commercial purchaser has subsequently
requested in writing the broker to procure or place such insurance from a nonadmitted insurer.

15 USC 8205.

Written request.

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SEC. 526. GAO STUDY OF NONADMITTED INSURANCE MARKET.

(a) IN GENERAL.—The Comptroller General of the United States
shall conduct a study of the nonadmitted insurance market to
determine the effect of the enactment of this part on the size
and market share of the nonadmitted insurance market for providing coverage typically provided by the admitted insurance
market.
(b) CONTENTS.—The study shall determine and analyze—
(1) the change in the size and market share of the nonadmitted insurance market and in the number of insurance
companies and insurance holding companies providing such
business in the 18-month period that begins upon the effective
date of this subtitle;
(2) the extent to which insurance coverage typically provided by the admitted insurance market has shifted to the
nonadmitted insurance market;
(3) the consequences of any change in the size and market
share of the nonadmitted insurance market, including differences in the price and availability of coverage available
in both the admitted and nonadmitted insurance markets;
(4) the extent to which insurance companies and insurance
holding companies that provide both admitted and nonadmitted
insurance have experienced shifts in the volume of business
between admitted and nonadmitted insurance; and
(5) the extent to which there has been a change in the
number of individuals who have nonadmitted insurance policies, the type of coverage provided under such policies, and
whether such coverage is available in the admitted insurance
market.
(c) CONSULTATION WITH NAIC.—In conducting the study under
this section, the Comptroller General shall consult with the NAIC.
(d) REPORT.—The Comptroller General shall complete the study
under this section and submit a report to the Committee on
Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives
regarding the findings of the study not later than 30 months after
the effective date of this subtitle.
SEC. 527. DEFINITIONS.

15 USC 8206.

For purposes of this part, the following definitions shall apply:

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124 STAT. 1592

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Effective dates.

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PUBLIC LAW 111–203—JULY 21, 2010
(1) ADMITTED INSURER.—The term ‘‘admitted insurer’’
means, with respect to a State, an insurer licensed to engage
in the business of insurance in such State.
(2) AFFILIATE.—The term ‘‘affiliate’’ means, with respect
to an insured, any entity that controls, is controlled by, or
is under common control with the insured.
(3) AFFILIATED GROUP.—The term ‘‘affiliated group’’ means
any group of entities that are all affiliated.
(4) CONTROL.—An entity has ‘‘control’’ over another entity
if—
(A) the entity directly or indirectly or acting through
1 or more other persons owns, controls, or has the power
to vote 25 percent or more of any class of voting securities
of the other entity; or
(B) the entity controls in any manner the election
of a majority of the directors or trustees of the other entity.
(5) EXEMPT COMMERCIAL PURCHASER.—The term ‘‘exempt
commercial purchaser’’ means any person purchasing commercial insurance that, at the time of placement, meets the following requirements:
(A) The person employs or retains a qualified risk
manager to negotiate insurance coverage.
(B) The person has paid aggregate nationwide commercial property and casualty insurance premiums in excess
of $100,000 in the immediately preceding 12 months.
(C)(i) The person meets at least 1 of the following
criteria:
(I) The person possesses a net worth in excess
of $20,000,000, as such amount is adjusted pursuant
to clause (ii).
(II) The person generates annual revenues in
excess of $50,000,000, as such amount is adjusted
pursuant to clause (ii).
(III) The person employs more than 500 full-time
or full-time equivalent employees per individual
insured or is a member of an affiliated group employing
more than 1,000 employees in the aggregate.
(IV) The person is a not-for-profit organization or
public entity generating annual budgeted expenditures
of at least $30,000,000, as such amount is adjusted
pursuant to clause (ii).
(V) The person is a municipality with a population
in excess of 50,000 persons.
(ii) Effective on the fifth January 1 occurring after
the date of the enactment of this subtitle and each fifth
January 1 occurring thereafter, the amounts in subclauses
(I), (II), and (IV) of clause (i) shall be adjusted to reflect
the percentage change for such 5-year period in the Consumer Price Index for All Urban Consumers published
by the Bureau of Labor Statistics of the Department of
Labor.
(6) HOME STATE.—
(A) IN GENERAL.—Except as provided in subparagraph
(B), the term ‘‘home State’’ means, with respect to an
insured—

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124 STAT. 1593

(i) the State in which an insured maintains its
principal place of business or, in the case of an individual, the individual’s principal residence; or
(ii) if 100 percent of the insured risk is located
out of the State referred to in clause (i), the State
to which the greatest percentage of the insured’s taxable premium for that insurance contract is allocated.
(B) AFFILIATED GROUPS.—If more than 1 insured from
an affiliated group are named insureds on a single nonadmitted insurance contract, the term ‘‘home State’’ means
the home State, as determined pursuant to subparagraph
(A), of the member of the affiliated group that has the
largest percentage of premium attributed to it under such
insurance contract.
(7) INDEPENDENTLY PROCURED INSURANCE.—The term
‘‘independently procured insurance’’ means insurance procured
directly by an insured from a nonadmitted insurer.
(8) NAIC.—The term ‘‘NAIC’’ means the National Association of Insurance Commissioners or any successor entity.
(9) NONADMITTED INSURANCE.—The term ‘‘nonadmitted
insurance’’ means any property and casualty insurance permitted to be placed directly or through a surplus lines broker
with a nonadmitted insurer eligible to accept such insurance.
(10) NON-ADMITTED INSURANCE MODEL ACT.—The term
‘‘Non-Admitted Insurance Model Act’’ means the provisions of
the Non-Admitted Insurance Model Act, as adopted by the
NAIC on August 3, 1994, and amended on September 30,
1996, December 6, 1997, October 2, 1999, and June 8, 2002.
(11) NONADMITTED INSURER.—The term ‘‘nonadmitted
insurer’’—
(A) means, with respect to a State, an insurer not
licensed to engage in the business of insurance in such
State; but
(B) does not include a risk retention group, as that
term is defined in section 2(a)(4) of the Liability Risk
Retention Act of 1986 (15 U.S.C. 3901(a)(4)).
(12) PREMIUM TAX.—The term ‘‘premium tax’’ means, with
respect to surplus lines or independently procured insurance
coverage, any tax, fee, assessment, or other charge imposed
by a government entity directly or indirectly based on any
payment made as consideration for an insurance contract for
such insurance, including premium deposits, assessments, registration fees, and any other compensation given in consideration for a contract of insurance.
(13) QUALIFIED RISK MANAGER.—The term ‘‘qualified risk
manager’’ means, with respect to a policyholder of commercial
insurance, a person who meets all of the following requirements:
(A) The person is an employee of, or third-party
consultant retained by, the commercial policyholder.
(B) The person provides skilled services in loss prevention, loss reduction, or risk and insurance coverage analysis, and purchase of insurance.
(C) The person—
(i)(I) has a bachelor’s degree or higher from an
accredited college or university in risk management,
business administration, finance, economics, or any

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124 STAT. 1594

PUBLIC LAW 111–203—JULY 21, 2010
other field determined by a State insurance commissioner or other State regulatory official or entity to
demonstrate minimum competence in risk management; and
(II)(aa) has 3 years of experience in risk financing,
claims administration, loss prevention, risk and insurance analysis, or purchasing commercial lines of insurance; or
(bb) has—
(AA) a designation as a Chartered Property
and Casualty Underwriter (in this subparagraph
referred to as ‘‘CPCU’’) issued by the American
Institute for CPCU/Insurance Institute of America;
(BB) a designation as an Associate in Risk
Management (ARM) issued by the American
Institute for CPCU/Insurance Institute of America;
(CC) a designation as Certified Risk Manager
(CRM) issued by the National Alliance for Insurance Education & Research;
(DD) a designation as a RIMS Fellow (RF)
issued by the Global Risk Management Institute;
or
(EE) any other designation, certification, or
license determined by a State insurance commissioner or other State insurance regulatory official
or entity to demonstrate minimum competency in
risk management;
(ii)(I) has at least 7 years of experience in risk
financing, claims administration, loss prevention, risk
and insurance coverage analysis, or purchasing
commercial lines of insurance; and
(II) has any 1 of the designations specified in
subitems (AA) through (EE) of clause (i)(II)(bb);
(iii) has at least 10 years of experience in risk
financing, claims administration, loss prevention, risk
and insurance coverage analysis, or purchasing
commercial lines of insurance; or
(iv) has a graduate degree from an accredited college or university in risk management, business
administration, finance, economics, or any other field
determined by a State insurance commissioner or other
State regulatory official or entity to demonstrate minimum competence in risk management.
(14) REINSURANCE.—The term ‘‘reinsurance’’ means the
assumption by an insurer of all or part of a risk undertaken
originally by another insurer.
(15) SURPLUS LINES BROKER.—The term ‘‘surplus lines
broker’’ means an individual, firm, or corporation which is
licensed in a State to sell, solicit, or negotiate insurance on
properties, risks, or exposures located or to be performed in
a State with nonadmitted insurers.
(16) STATE.—The term ‘‘State’’ includes any State of the
United States, the District of Columbia, the Commonwealth
of Puerto Rico, Guam, the Northern Mariana Islands, the Virgin
Islands, and American Samoa.

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124 STAT. 1595

PART II—REINSURANCE
SEC. 531. REGULATION OF CREDIT FOR REINSURANCE AND REINSURANCE AGREEMENTS.

15 USC 8221.

(a) CREDIT FOR REINSURANCE.—If the State of domicile of a
ceding insurer is an NAIC-accredited State, or has financial solvency
requirements substantially similar to the requirements necessary
for NAIC accreditation, and recognizes credit for reinsurance for
the insurer’s ceded risk, then no other State may deny such credit
for reinsurance.
(b) ADDITIONAL PREEMPTION OF EXTRATERRITORIAL APPLICATION
OF STATE LAW.—In addition to the application of subsection (a),
all laws, regulations, provisions, or other actions of a State that
is not the domiciliary State of the ceding insurer, except those
with respect to taxes and assessments on insurance companies
or insurance income, are preempted to the extent that they—
(1) restrict or eliminate the rights of the ceding insurer
or the assuming insurer to resolve disputes pursuant to contractual arbitration to the extent such contractual provision is
not inconsistent with the provisions of title 9, United States
Code;
(2) require that a certain State’s law shall govern the
reinsurance contract, disputes arising from the reinsurance
contract, or requirements of the reinsurance contract;
(3) attempt to enforce a reinsurance contract on terms
different than those set forth in the reinsurance contract, to
the extent that the terms are not inconsistent with this part;
or
(4) otherwise apply the laws of the State to reinsurance
agreements of ceding insurers not domiciled in that State.
SEC. 532. REGULATION OF REINSURER SOLVENCY.

15 USC 8222.

(a) DOMICILIARY STATE REGULATION.—If the State of domicile
of a reinsurer is an NAIC-accredited State or has financial solvency
requirements substantially similar to the requirements necessary
for NAIC accreditation, such State shall be solely responsible for
regulating the financial solvency of the reinsurer.
(b) NONDOMICILIARY STATES.—
(1) LIMITATION ON FINANCIAL INFORMATION REQUIREMENTS.—If the State of domicile of a reinsurer is an NAICaccredited State or has financial solvency requirements
substantially similar to the requirements necessary for NAIC
accreditation, no other State may require the reinsurer to provide any additional financial information other than the
information the reinsurer is required to file with its domiciliary
State.
(2) RECEIPT OF INFORMATION.—No provision of this section
shall be construed as preventing or prohibiting a State that
is not the State of domicile of a reinsurer from receiving a
copy of any financial statement filed with its domiciliary State.

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SEC. 533. DEFINITIONS.

15 USC 8223.

For purposes of this part, the following definitions shall apply:
(1) CEDING INSURER.—The term ‘‘ceding insurer’’ means
an insurer that purchases reinsurance.
(2) DOMICILIARY STATE.—The terms ‘‘State of domicile’’ and
‘‘domiciliary State’’ mean, with respect to an insurer or

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124 STAT. 1596

PUBLIC LAW 111–203—JULY 21, 2010
reinsurer, the State in which the insurer or reinsurer is incorporated or entered through, and licensed.
(3) NAIC.—The term ‘‘NAIC’’ means the National Association of Insurance Commissioners or any successor entity.
(4) REINSURANCE.—The term ‘‘reinsurance’’ means the
assumption by an insurer of all or part of a risk undertaken
originally by another insurer.
(5) REINSURER.—
(A) IN GENERAL.—The term ‘‘reinsurer’’ means an
insurer to the extent that the insurer—
(i) is principally engaged in the business of reinsurance;
(ii) does not conduct significant amounts of direct
insurance as a percentage of its net premiums; and
(iii) is not engaged in an ongoing basis in the
business of soliciting direct insurance.
(B) DETERMINATION.—A determination of whether an
insurer is a reinsurer shall be made under the laws of
the State of domicile in accordance with this paragraph.
(6) STATE.—The term ‘‘State’’ includes any State of the
United States, the District of Columbia, the Commonwealth
of Puerto Rico, Guam, the Northern Mariana Islands, the Virgin
Islands, and American Samoa.

PART III—RULE OF CONSTRUCTION
SEC. 541. RULE OF CONSTRUCTION.

15 USC 8231.

Nothing in this subtitle or the amendments made by this subtitle shall be construed to modify, impair, or supersede the application of the antitrust laws. Any implied or actual conflict between
this subtitle and any amendments to this subtitle and the antitrust
laws shall be resolved in favor of the operation of the antitrust
laws.
SEC. 542. SEVERABILITY.

15 USC 8232.

If any section or subsection of this subtitle, or any application
of such provision to any person or circumstance, is held to be
unconstitutional, the remainder of this subtitle, and the application
of the provision to any other person or circumstance, shall not
be affected.

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Bank and
Savings
Association
Holding
Company and
Depository
Institution
Regulatory
Improvements
Act of 2010.
12 USC 1811
note.

12 USC 1815
note.

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TITLE VI—IMPROVEMENTS TO REGULATION OF BANK AND SAVINGS ASSOCIATION HOLDING COMPANIES AND
DEPOSITORY INSTITUTIONS
SEC. 601. SHORT TITLE.

This title may be cited as the ‘‘Bank and Savings Association
Holding Company and Depository Institution Regulatory Improvements Act of 2010’’.
SEC. 602. DEFINITION.

For purposes of this title, a company is a ‘‘commercial firm’’
if the annual gross revenues derived by the company and all of
its affiliates from activities that are financial in nature (as defined

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in section 4(k) of the Bank Holding Company Act of 1956 (12
U.S.C. 1843(k))) and, if applicable, from the ownership or control
of one or more insured depository institutions, represent less than
15 percent of the consolidated annual gross revenues of the company.

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SEC. 603. MORATORIUM AND STUDY ON TREATMENT OF CREDIT CARD
BANKS, INDUSTRIAL LOAN COMPANIES, AND CERTAIN
OTHER COMPANIES UNDER THE BANK HOLDING COMPANY
ACT OF 1956.

(a) MORATORIUM.—
(1) DEFINITIONS.—In this subsection—
(A) the term ‘‘credit card bank’’ means an institution
described in section 2(c)(2)(F) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(c)(2)(F));
(B) the term ‘‘industrial bank’’ means an institution
described in section 2(c)(2)(H) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(c)(2)(H)); and
(C) the term ‘‘trust bank’’ means an institution
described in section 2(c)(2)(D) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(c)(2)(D)).
(2) MORATORIUM ON PROVISION OF DEPOSIT INSURANCE.—
The Corporation may not approve an application for deposit
insurance under section 5 of the Federal Deposit Insurance
Act (12 U.S.C. 1815) that is received after November 23, 2009,
for an industrial bank, a credit card bank, or a trust bank
that is directly or indirectly owned or controlled by a commercial firm.
(3) CHANGE IN CONTROL.—
(A) IN GENERAL.—Except as provided in subparagraph
(B), the appropriate Federal banking agency shall disapprove a change in control, as provided in section 7(j)
of the Federal Deposit Insurance Act (12 U.S.C. 1817(j)),
of an industrial bank, a credit card bank, or a trust bank
if the change in control would result in direct or indirect
control of the industrial bank, credit card bank, or trust
bank by a commercial firm.
(B) EXCEPTIONS.—Subparagraph (A) shall not apply
to a change in control of an industrial bank, credit card
bank, or trust bank—
(i) that—
(I) is in danger of default, as determined by
the appropriate Federal banking agency;
(II) results from the merger or whole acquisition of a commercial firm that directly or indirectly
controls the industrial bank, credit card bank, or
trust bank in a bona fide merger with or acquisition by another commercial firm, as determined
by the appropriate Federal banking agency; or
(III) results from an acquisition of voting
shares of a publicly traded company that controls
an industrial bank, credit card bank, or trust bank,
if, after the acquisition, the acquiring shareholder
(or group of shareholders acting in concert) holds
less than 25 percent of any class of the voting
shares of the company; and

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12 USC 1815
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124 STAT. 1598

PUBLIC LAW 111–203—JULY 21, 2010

(ii) that has obtained all regulatory approvals
otherwise required for such change of control under
any applicable Federal or State law, including section
7(j) of the Federal Deposit Insurance Act (12 U.S.C.
1817(j)).
(4) SUNSET.—This subsection shall cease to have effect
3 years after the date of enactment of this Act.
(b) GOVERNMENT ACCOUNTABILITY OFFICE STUDY OF EXCEPTIONS UNDER THE BANK HOLDING COMPANY ACT OF 1956.—
(1) STUDY REQUIRED.—The Comptroller General of the
United States shall carry out a study to determine whether
it is necessary, in order to strengthen the safety and soundness
of institutions or the stability of the financial system, to eliminate the exceptions under section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841) for institutions described
in—
(A) section 2(a)(5)(E) of the Bank Holding Company
Act of 1956 (12 U.S.C. 1841(a)(5)(E));
(B) section 2(a)(5)(F) of the Bank Holding Company
Act of 1956 (12 U.S.C. 1841(a)(5)(F));
(C) section 2(c)(2)(D) of the Bank Holding Company
Act of 1956 (12 U.S.C. 1841(c)(2)(D));
(D) section 2(c)(2)(F) of the Bank Holding Company
Act of 1956 (12 U.S.C. 1841(c)(2)(F));
(E) section 2(c)(2)(H) of the Bank Holding Company
Act of 1956 (12 U.S.C. 1841(c)(2)(H)); and
(F) section 2(c)(2)(B) of the Bank Holding Company
Act of 1956 (12 U.S.C. 1841(c)(2)(B)).
(2) CONTENT OF STUDY.—
(A) IN GENERAL.—The study required under paragraph
(1), with respect to the institutions referenced in each
of subparagraphs (A) through (E) of paragraph (1), shall,
to the extent feasible be based on information provided
to the Comptroller General by the appropriate Federal
or State regulator, and shall—
(i) identify the types and number of institutions
excepted from section 2 of the Bank Holding Company
Act of 1956 (12 U.S.C. 1841) under each of the subparagraphs described in subparagraphs (A) through (E)
of paragraph (1);
(ii) generally describe the size and geographic locations of the institutions described in clause (i);
(iii) determine the extent to which the institutions
described in clause (i) are held by holding companies
that are commercial firms;
(iv) determine whether the institutions described
in clause (i) have any affiliates that are commercial
firms;
(v) identify the Federal banking agency responsible
for the supervision of the institutions described in
clause (i) on and after the transfer date;
(vi) determine the adequacy of the Federal bank
regulatory framework applicable to each category of
institution described in clause (i), including any restrictions (including limitations on affiliate transactions or
cross-marketing) that apply to transactions between

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124 STAT. 1599

an institution, the holding company of the institution,
and any other affiliate of the institution; and
(vii) evaluate the potential consequences of subjecting the institutions described in clause (i) to the
requirements of the Bank Holding Company Act of
1956, including with respect to the availability and
allocation of credit, the stability of the financial system
and the economy, the safe and sound operation of
each category of institution, and the impact on the
types of activities in which such institutions, and the
holding companies of such institutions, may engage.
(B) SAVINGS ASSOCIATIONS.—With respect to institutions described in paragraph (1)(F), the study required
under paragraph (1) shall—
(i) determine the adequacy of the Federal bank
regulatory framework applicable to such institutions,
including any restrictions (including limitations on
affiliate transactions or cross-marketing) that apply
to transactions between an institution, the holding
company of the institution, and any other affiliate of
the institution; and
(ii) evaluate the potential consequences of subjecting the institutions described in paragraph (1)(F)
to the requirements of the Bank Holding Company
Act of 1956, including with respect to the availability
and allocation of credit, the stability of the financial
system and the economy, the safe and sound operation
of such institutions, and the impact on the types of
activities in which such institutions, and the holding
companies of such institutions, may engage.
(3) REPORT.—Not later than 18 months after the date of
enactment of this Act, the Comptroller General shall submit
to the Committee on Banking, Housing, and Urban Affairs
of the Senate and the Committee on Financial Services of
the House of Representatives a report on the study required
under paragraph (1).

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SEC. 604. REPORTS AND EXAMINATIONS OF HOLDING COMPANIES;
REGULATION OF FUNCTIONALLY REGULATED SUBSIDIARIES.

(a) REPORTS BY BANK HOLDING COMPANIES.—Sections 5(c)(1)
of the Bank Holding Company Act of 1956 (12 U.S.C. 1844(c)(1))
is amended—
(1) by striking subclause (A)(ii) and inserting the following:
‘‘(ii) compliance by the bank holding company or
subsidiary with—
‘‘(I) this Act;
‘‘(II) Federal laws that the Board has specific
jurisdiction to enforce against the company or subsidiary; and
‘‘(III) other than in the case of an insured
depository institution or functionally regulated
subsidiary, any other applicable provision of Federal law.’’;
(2) by striking subparagraph (B) and inserting the following:

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PUBLIC LAW 111–203—JULY 21, 2010

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‘‘(B) USE OF EXISTING REPORTS AND OTHER SUPERVISORY
INFORMATION.—The Board shall, to the fullest extent possible, use—
‘‘(i) reports and other supervisory information that
the bank holding company or any subsidiary thereof
has been required to provide to other Federal or State
regulatory agencies;
‘‘(ii) externally audited financial statements of the
bank holding company or subsidiary;
‘‘(iii) information otherwise available from Federal
or State regulatory agencies; and
‘‘(iv) information that is otherwise required to be
reported publicly.’’; and
(3) by adding at the end the following:
‘‘(C) AVAILABILITY.—Upon the request of the Board,
the bank holding company or a subsidiary of the bank
holding company shall promptly provide to the Board any
information described in clauses (i) through (iii) of subparagraph (B).’’.
(b) EXAMINATIONS OF BANK HOLDING COMPANIES.—Section
5(c)(2) of the Bank Holding Company Act of 1956 (12 U.S.C.
1844(c)(2)) is amended to read as follows:
‘‘(2) EXAMINATIONS.—
‘‘(A) IN GENERAL.—Subject to subtitle B of the Consumer Financial Protection Act of 2010, the Board may
make examinations of a bank holding company and each
subsidiary of a bank holding company in order to—
‘‘(i) inform the Board of—
‘‘(I) the nature of the operations and financial
condition of the bank holding company and the
subsidiary;
‘‘(II) the financial, operational, and other risks
within the bank holding company system that may
pose a threat to—
‘‘(aa) the safety and soundness of the bank
holding company or of any depository institution subsidiary of the bank holding company;
or
‘‘(bb) the stability of the financial system
of the United States; and
‘‘(III) the systems of the bank holding company
for monitoring and controlling the risks described
in subclause (II); and
‘‘(ii) monitor the compliance of the bank holding
company and the subsidiary with—
‘‘(I) this Act;
‘‘(II) Federal laws that the Board has specific
jurisdiction to enforce against the company or subsidiary; and
‘‘(III) other than in the case of an insured
depository institution or functionally regulated
subsidiary, any other applicable provisions of Federal law.
‘‘(B) USE OF REPORTS TO REDUCE EXAMINATIONS.—For
purposes of this paragraph, the Board shall, to the fullest
extent possible, rely on—

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1601

‘‘(i) examination reports made by other Federal
or State regulatory agencies relating to a bank holding
company and any subsidiary of a bank holding company; and
‘‘(ii) the reports and other information required
under paragraph (1).
‘‘(C) COORDINATION WITH OTHER REGULATORS.—The
Board shall—
‘‘(i) provide reasonable notice to, and consult with,
the appropriate Federal banking agency, the Securities
and Exchange Commission, the Commodity Futures
Trading Commission, or State regulatory agency, as
appropriate, for a subsidiary that is a depository
institution or a functionally regulated subsidiary of
a bank holding company before commencing an examination of the subsidiary under this section; and
‘‘(ii) to the fullest extent possible, avoid duplication
of examination activities, reporting requirements, and
requests for information.’’.
(c) AUTHORITY TO REGULATE FUNCTIONALLY REGULATED
SUBSIDIARIES OF BANK HOLDING COMPANIES.—The Bank Holding
Company Act of 1956 (12 U.S.C. 1841 et seq.) is amended—
(1) in section 5(c)(5)(B) (12 U.S.C. 1844(c)(5)(B)), by striking
clause (v) and inserting the following:
‘‘(v) an entity that is subject to regulation by,
or registration with, the Commodity Futures Trading
Commission, with respect to activities conducted as
a futures commission merchant, commodity trading
adviser, commodity pool, commodity pool operator,
swap execution facility, swap data repository, swap
dealer, major swap participant, and activities that are
incidental to such commodities and swaps activities.’’;
and
(2) by striking section 10A (12 U.S.C. 1848a).
(d) ACQUISITIONS OF BANKS.—Section 3(c) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1842(c)) is amended by adding
at the end the following:
‘‘(7) FINANCIAL STABILITY.—In every case, the Board shall
take into consideration the extent to which a proposed acquisition, merger, or consolidation would result in greater or more
concentrated risks to the stability of the United States banking
or financial system.’’.
(e) ACQUISITIONS OF NONBANKS.—
(1) NOTICE PROCEDURES.—Section 4(j)(2)(A) of the Bank
Holding Company Act of 1956 (12 U.S.C. 1843(j)(2)(A)) is
amended by striking ‘‘or unsound banking practices’’ and
inserting ‘‘unsound banking practices, or risk to the stability
of the United States banking or financial system’’.
(2) ACTIVITIES THAT ARE FINANCIAL IN NATURE.—Section
4(k)(6)(B) of the Bank Holding Company Act of 1956 (12 U.S.C.
1843(k)(6)(B)) is amended to read as follows:
‘‘(B) APPROVAL NOT REQUIRED FOR CERTAIN FINANCIAL
ACTIVITIES.—
‘‘(i) IN GENERAL.—Except as provided in subsection
(j) with regard to the acquisition of a savings association and clause (ii), a financial holding company may

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124 STAT. 1602

PUBLIC LAW 111–203—JULY 21, 2010

commence any activity, or acquire any company, pursuant to paragraph (4) or any regulation prescribed or
order issued under paragraph (5), without prior
approval of the Board.
‘‘(ii) EXCEPTION.—A financial holding company may
not acquire a company, without the prior approval
of the Board, in a transaction in which the total consolidated assets to be acquired by the financial holding
company exceed $10,000,000,000.
‘‘(iii) HART-SCOTT-RODINO FILING REQUIREMENT.—
Solely for purposes of section 7A(c)(8) of the Clayton
Act (15 U.S.C. 18a(c)(8)), the transactions subject to
the requirements of this paragraph shall be treated
as if the approval of the Board is not required.’’.
(f) BANK MERGER ACT TRANSACTIONS.—Section 18(c)(5) of the
Federal Deposit Insurance Act (12 U.S.C. 1828(c)(5)) is amended,
in the matter immediately following subparagraph (B), by striking
‘‘and the convenience and needs of the community to be served’’
and inserting ‘‘the convenience and needs of the community to
be served, and the risk to the stability of the United States banking
or financial system’’.
(g) REPORTS BY SAVINGS AND LOAN HOLDING COMPANIES.—
Section 10(b)(2) of the Home Owners’ Loan Act (12 U.S.C.
1467a(b)(2) is amended—
(1) by striking ‘‘Each savings’’ and inserting the following:
‘‘(A) IN GENERAL.—Each savings’’; and
(2) by adding at the end the following:
‘‘(B) USE OF EXISTING REPORTS AND OTHER SUPERVISORY
INFORMATION.—The Board shall, to the fullest extent possible, use—
‘‘(i) reports and other supervisory information that
the savings and loan holding company or any subsidiary thereof has been required to provide to other
Federal or State regulatory agencies;
‘‘(ii) externally audited financial statements of the
savings and loan holding company or subsidiary;
‘‘(iii) information that is otherwise available from
Federal or State regulatory agencies; and
‘‘(iv) information that is otherwise required to be
reported publicly.
‘‘(C) AVAILABILITY.—Upon the request of the Board,
a savings and loan holding company or a subsidiary of
a savings and loan holding company shall promptly provide
to the Board any information described in clauses (i)
through (iii) of subparagraph (B).’’.
(h) EXAMINATION OF SAVINGS AND LOAN HOLDING COMPANIES.—
(1) DEFINITIONS.—Section 2 of the Home Owners’ Loan
Act (12 U.S.C. 1462) is amended by adding at the end the
following:
‘‘(10) APPROPRIATE FEDERAL BANKING AGENCY.—The term
‘appropriate Federal banking agency’ has the same meaning
as in section 3(q) of the Federal Deposit Insurance Act (12
U.S.C. 1813(q)).
‘‘(11) FUNCTIONALLY REGULATED SUBSIDIARY.—The term
‘functionally regulated subsidiary’ has the same meaning as
in section 5(c)(5) of the Bank Holding Company Act of 1956
(12 U.S.C. 1844(c)(5)).’’.

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1603

(2) EXAMINATION.—Section 10(b) of the Home Owners’ Loan
Act (12 U.S.C. 1467a(b)) is amended by striking paragraph
(4) and inserting the following:
‘‘(4) EXAMINATIONS.—
‘‘(A) IN GENERAL.—Subject to subtitle B of the Consumer Financial Protection Act of 2010, the Board may
make examinations of a savings and loan holding company
and each subsidiary of a savings and loan holding company
system, in order to—
‘‘(i) inform the Board of—
‘‘(I) the nature of the operations and financial
condition of the savings and loan holding company
and the subsidiary;
‘‘(II) the financial, operational, and other risks
within the savings and loan holding company
system that may pose a threat to—
‘‘(aa) the safety and soundness of the
savings and loan holding company or of any
depository institution subsidiary of the savings
and loan holding company; or
‘‘(bb) the stability of the financial system
of the United States; and
‘‘(III) the systems of the savings and loan
holding company for monitoring and controlling
the risks described in subclause (II); and
‘‘(ii) monitor the compliance of the savings and
loan holding company and the subsidiary with—
‘‘(I) this Act;
‘‘(II) Federal laws that the Board has specific
jurisdiction to enforce against the company or subsidiary; and
‘‘(III) other than in the case of an insured
depository institution or functionally regulated
subsidiary, any other applicable provisions of Federal law.
‘‘(B) USE OF REPORTS TO REDUCE EXAMINATIONS.—For
purposes of this subsection, the Board shall, to the fullest
extent possible, rely on—
‘‘(i) the examination reports made by other Federal
or State regulatory agencies relating to a savings and
loan holding company and any subsidiary; and
‘‘(ii) the reports and other information required
under paragraph (2).
‘‘(C) COORDINATION WITH OTHER REGULATORS.—The
Board shall—
‘‘(i) provide reasonable notice to, and consult with,
the appropriate Federal banking agency, the Securities
and Exchange Commission, the Commodity Futures
Trading Commission, or State regulatory agency, as
appropriate, for a subsidiary that is a depository
institution or a functionally regulated subsidiary of
a savings and loan holding company before commencing an examination of the subsidiary under this
section; and
‘‘(ii) to the fullest extent possible, avoid duplication
of examination activities, reporting requirements, and
requests for information.’’.

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PUBLIC LAW 111–203—JULY 21, 2010

(i) DEFINITION OF THE TERM ‘‘SAVINGS AND LOAN HOLDING
COMPANY’’.—Section 10(a)(1)(D)(ii) of the Home Owners’ Loan Act
(12 U.S.C. 1467a(a)(1)(D)(ii)) is amended to read as follows:
‘‘(ii) EXCLUSION.—The term ‘savings and loan
holding company’ does not include—
‘‘(I) a bank holding company that is registered
under, and subject to, the Bank Holding Company
Act of 1956 (12 U.S.C. 1841 et seq.), or to any
company directly or indirectly controlled by such
company (other than a savings association);
‘‘(II) a company that controls a savings association that functions solely in a trust or fiduciary
capacity as described in section 2(c)(2)(D) of the
Bank Holding Company Act of 1956 (12 U.S.C.
1841(c)(2)(D)); or
‘‘(III) a company described in subsection
(c)(9)(C) solely by virtue of such company’s control
of an intermediate holding company established
pursuant to section 10A.’’.
(j) EFFECTIVE DATE.—The amendments made by this section
shall take effect on the transfer date.

12 USC 1462
note.

SEC.

605.

ASSURING CONSISTENT OVERSIGHT OF PERMISSIBLE
ACTIVITIES OF DEPOSITORY INSTITUTION SUBSIDIARIES
OF HOLDING COMPANIES.

(a) IN GENERAL.—The Federal Deposit Insurance Act (12 U.S.C.
1811 et seq.) is amended by inserting after section 25 the following
new section:

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12 USC 1831c.

‘‘SEC. 26. ASSURING CONSISTENT OVERSIGHT OF SUBSIDIARIES OF
HOLDING COMPANIES.

‘‘(a) DEFINITIONS.—For purposes of this section:
‘‘(1) BOARD.—The term ‘Board’ means the Board of Governors of the Federal Reserve System.
‘‘(2) FUNCTIONALLY REGULATED SUBSIDIARY.—The term
‘functionally regulated subsidiary’ has the same meaning as
in section 5(c)(5) of the Bank Holding Company Act.
‘‘(3) LEAD INSURED DEPOSITORY INSTITUTION.—The term
‘lead insured depository institution’ has the same meaning as
in section 2(o)(8) of the Bank Holding Company Act.
‘‘(b) EXAMINATION REQUIREMENTS.—Subject to subtitle B of the
Consumer Financial Protection Act of 2010, the Board shall examine
the activities of a nondepository institution subsidiary (other than
a functionally regulated subsidiary or a subsidiary of a depository
institution) of a depository institution holding company that are
permissible for the insured depository institution subsidiaries of
the depository institution holding company in the same manner,
subject to the same standards, and with the same frequency as
would be required if such activities were conducted in the lead
insured depository institution of the depository institution holding
company.
‘‘(c) STATE COORDINATION.—
‘‘(1) CONSULTATION AND COORDINATION.—If a nondepository
institution subsidiary is supervised by a State bank supervisor
or other State regulatory authority, the Board, in conducting
the examinations required in subsection (b), shall consult and
coordinate with such State regulator.

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1605

‘‘(2)
ALTERNATING
EXAMINATIONS
PERMITTED.—The
examinations required under subsection (b) may be conducted
in joint or alternating manner with a State regulator, if the
Board determines that an examination of a nondepository
institution subsidiary conducted by the State carries out the
purposes of this section.
‘‘(d) APPROPRIATE FEDERAL BANKING AGENCY BACKUP EXAMINATION AUTHORITY.—
‘‘(1) IN GENERAL.—In the event that the Board does not
conduct examinations required under subsection (b) in the same
manner, subject to the same standards, and with the same
frequency as would be required if such activities were conducted
by the lead insured depository institution subsidiary of the
depository institution holding company, the appropriate Federal
banking agency for the lead insured depository institution may
recommend in writing (which shall include a written explanation of the concerns giving rise to the recommendation) that
the Board perform the examination required under subsection
(b).
‘‘(2) EXAMINATION BY AN APPROPRIATE FEDERAL BANKING
AGENCY.—If the Board does not, before the end of the 60day period beginning on the date on which the Board receives
a recommendation under paragraph (1), begin an examination
as required under subsection (b) or provide a written explanation or plan to the appropriate Federal banking agency
making such recommendation responding to the concerns raised
by the appropriate Federal banking agency for the lead insured
depository institution, the appropriate Federal banking agency
for the lead insured depository institution may, subject to the
Consumer Financial Protection Act of 2010, examine the activities that are permissible for a depository institution subsidiary
conducted by such nondepository institution subsidiary (other
than a functionally regulated subsidiary or a subsidiary of
a depository institution) of the depository institution holding
company as if the nondepository institution subsidiary were
an insured depository institution for which the appropriate
Federal banking agency of the lead insured depository institution was the appropriate Federal banking agency, to determine
whether the activities—
‘‘(A) pose a material threat to the safety and soundness
of any insured depository institution subsidiary of the
depository institution holding company;
‘‘(B) are conducted in accordance with applicable Federal law; and
‘‘(C) are subject to appropriate systems for monitoring
and controlling the financial, operating, and other material
risks of the activities that may pose a material threat
to the safety and soundness of the insured depository
institution subsidiaries of the holding company.
‘‘(3) AGENCY COORDINATION WITH THE BOARD.—An appropriate Federal banking agency that conducts an examination
pursuant to paragraph (2) shall coordinate examination of the
activities of nondepository institution subsidiaries described in
subsection (b) with the Board in a manner that—
‘‘(A) avoids duplication;
‘‘(B) shares information relevant to the supervision
of the depository institution holding company;

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Time period.

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PUBLIC LAW 111–203—JULY 21, 2010

‘‘(C) achieves the objectives of subsection (b); and
‘‘(D) ensures that the depository institution holding
company and the subsidiaries of the depository institution
holding company are not subject to conflicting supervisory
demands by such agency and the Board.
‘‘(4) FEE PERMITTED FOR EXAMINATION COSTS.—An appropriate Federal banking agency that conducts an examination
or enforcement action pursuant to this section may collect an
assessment, fee, or such other charge from the subsidiary as
the appropriate Federal banking agency determines necessary
or appropriate to carry out the responsibilities of the appropriate Federal banking agency in connection with such examination.
‘‘(e) REFERRALS FOR ENFORCEMENT BY APPROPRIATE FEDERAL
BANKING AGENCY.—
‘‘(1) RECOMMENDATION OF ENFORCEMENT ACTION.—The
appropriate Federal banking agency for the lead insured depository institution, based upon its examination of a nondepository
institution subsidiary conducted pursuant to subsection (d),
or other relevant information, may submit to the Board, in
writing, a recommendation that the Board take enforcement
action against such nondepository institution subsidiary,
together with an explanation of the concerns giving rise to
the recommendation, if the appropriate Federal banking agency
determines (by a vote of its members, if applicable) that the
activities of the nondepository institution subsidiary pose a
material threat to the safety and soundness of any insured
depository institution subsidiary of the depository institution
holding company.
‘‘(2) BACK-UP AUTHORITY OF THE APPROPRIATE FEDERAL
BANKING AGENCY.—If, within the 60-day period beginning on
the date on which the Board receives a recommendation under
paragraph (1), the Board does not take enforcement action
against the nondepository institution subsidiary or provide a
plan for supervisory or enforcement action that is acceptable
to the appropriate Federal banking agency that made the recommendation pursuant to paragraph (1), such agency may take
the recommended enforcement action against the nondepository
institution subsidiary, in the same manner as if the nondepository institution subsidiary were an insured depository institution for which the agency was the appropriate Federal banking
agency.
‘‘(f) COORDINATION AMONG APPROPRIATE FEDERAL BANKING
AGENCIES.—Each Federal banking agency, prior to or when exercising authority under subsection (d) or (e) shall—
‘‘(1) provide reasonable notice to, and consult with, the
appropriate Federal banking agency or State bank supervisor
(or other State regulatory agency) of the nondepository institution subsidiary of a depository institution holding company
that is described in subsection (d) before commencing any examination of the subsidiary;
‘‘(2) to the fullest extent possible—
‘‘(A) rely on the examinations, inspections, and reports
of the appropriate Federal banking agency or the State
bank supervisor (or other State regulatory agency) of the
subsidiary;

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124 STAT. 1607

‘‘(B) avoid duplication of examination activities,
reporting requirements, and requests for information; and
‘‘(C) ensure that the depository institution holding company and the subsidiaries of the depository institution
holding company are not subject to conflicting supervisory
demands by the appropriate Federal banking agencies.
‘‘(g) RULE OF CONSTRUCTION.—No provision of this section shall
be construed as limiting any authority of the Board, the Corporation, or the Comptroller of the Currency under any other provision
of law.’’.
(b) EFFECTIVE DATE.—The amendment made by subsection (a)
shall take effect on the transfer date.

12 USC 1831c
note.

SEC. 606. REQUIREMENTS FOR FINANCIAL HOLDING COMPANIES TO
REMAIN WELL CAPITALIZED AND WELL MANAGED.

(a) AMENDMENT.—Section 4(l)(1) of the Bank Holding Company
Act of 1956 (12 U.S.C. 1843(l)(1)) is amended—
(1) in subparagraph (B), by striking ‘‘and’’ at the end;
(2) by redesignating subparagraph (C) as subparagraph
(D);
(3) by inserting after subparagraph (B) the following:
‘‘(C) the bank holding company is well capitalized and
well managed; and’’; and
(4) in subparagraph (D)(ii), as so redesignated, by striking
‘‘subparagraphs (A) and (B)’’ and inserting ‘‘subparagraphs (A),
(B), and (C)’’.
(b) HOME OWNERS’ LOAN ACT AMENDMENT.—Section 10(c)(2)
of the Home Owners’ Loan Act (12 U.S.C. 1467a(c)(2)) is amended
by adding at the end the following new subparagraph:
‘‘(H) Any activity that is permissible for a financial
holding company (as such term is defined under section
2(p) of the Bank Holding Company Act of 1956 (12 U.S.C.
1841(p)) to conduct under section 4(k) of the Bank Holding
Company Act of 1956 if—
‘‘(i) the savings and loan holding company meets
all of the criteria to qualify as a financial holding
company, and complies with all of the requirements
applicable to a financial holding company, under sections 4(l) and 4(m) of the Bank Holding Company
Act and section 804(c) of the Community Reinvestment
Act of 1977 (12 U.S.C. 2903(c)) as if the savings and
loan holding company was a bank holding company;
and
‘‘(ii) the savings and loan holding company conducts the activity in accordance with the same terms,
conditions, and requirements that apply to the conduct
of such activity by a bank holding company under
the Bank Holding Company Act of 1956 and the
Board’s regulations and interpretations under such
Act.’’.
(c) EFFECTIVE DATE.—The amendments made by this section
shall take effect on the transfer date.

12 USC 1467a
note.

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SEC. 607. STANDARDS FOR INTERSTATE ACQUISITIONS.

(a) ACQUISITION OF BANKS.—Section 3(d)(1)(A) of the Bank
Holding Company Act of 1956 (12 U.S.C. 1842(d)(1)(A)) is amended
by striking ‘‘adequately capitalized and adequately managed’’ and
inserting ‘‘well capitalized and well managed’’.

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12 USC 1831u
note.

PUBLIC LAW 111–203—JULY 21, 2010

(b) INTERSTATE BANK MERGERS.—Section 44(b)(4)(B) of the Federal Deposit Insurance Act (12 U.S.C. 1831u(b)(4)(B)) is amended
by striking ‘‘will continue to be adequately capitalized and adequately managed’’ and inserting ‘‘will be well capitalized and well
managed’’.
(c) EFFECTIVE DATE.—The amendments made by this section
shall take effect on the transfer date.

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SEC. 608. ENHANCING EXISTING RESTRICTIONS ON BANK TRANSACTIONS WITH AFFILIATES.

(a) AFFILIATE TRANSACTIONS.—Section 23A of the Federal
Reserve Act (12 U.S.C. 371c) is amended—
(1) in subsection (b)—
(A) in paragraph (1), by striking subparagraph (D)
and inserting the following:
‘‘(D) any investment fund with respect to which a
member bank or affiliate thereof is an investment adviser;
and’’; and
(B) in paragraph (7)—
(i) in subparagraph (A), by inserting before the
semicolon at the end the following: ‘‘, including a purchase of assets subject to an agreement to repurchase’’;
(ii) in subparagraph (C), by striking ‘‘, including
assets subject to an agreement to repurchase,’’;
(iii) in subparagraph (D)—
(I) by inserting ‘‘or other debt obligations’’ after
‘‘acceptance of securities’’; and
(II) by striking ‘‘or’’ at the end; and
(iv) by adding at the end the following:
‘‘(F) a transaction with an affiliate that involves the
borrowing or lending of securities, to the extent that the
transaction causes a member bank or a subsidiary to have
credit exposure to the affiliate; or
‘‘(G) a derivative transaction, as defined in paragraph
(3) of section 5200(b) of the Revised Statutes of the United
States (12 U.S.C. 84(b)), with an affiliate, to the extent
that the transaction causes a member bank or a subsidiary
to have credit exposure to the affiliate;’’;
(2) in subsection (c)—
(A) in paragraph (1)—
(i) in the matter preceding subparagraph (A), by
striking ‘‘subsidiary’’ and all that follows through ‘‘time
of the transaction’’ and inserting ‘‘subsidiary, and any
credit exposure of a member bank or a subsidiary
to an affiliate resulting from a securities borrowing
or lending transaction, or a derivative transaction,
shall be secured at all times’’; and
(ii) in each of subparagraphs (A) through (D), by
striking ‘‘or letter of credit’’ and inserting ‘‘letter of
credit, or credit exposure’’;
(B) by striking paragraph (2);
(C) by redesignating paragraphs (3) through (5) as
paragraphs (2) through (4), respectively;
(D) in paragraph (2), as so redesignated, by inserting
before the period at the end ‘‘, or credit exposure to an
affiliate resulting from a securities borrowing or lending
transaction, or derivative transaction’’; and

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124 STAT. 1609

(E) in paragraph (3), as so redesignated—
(i) by inserting ‘‘or other debt obligations’’ after
‘‘securities’’; and
(ii) by striking ‘‘or guarantee’’ and all that follows
through ‘‘behalf of,’’ and inserting ‘‘guarantee, acceptance, or letter of credit issued on behalf of, or credit
exposure from a securities borrowing or lending transaction, or derivative transaction to,’’;
(3) in subsection (d)(4), in the matter preceding subparagraph (A), by striking ‘‘or issuing’’ and all that follows through
‘‘behalf of,’’ and inserting ‘‘issuing a guarantee, acceptance,
or letter of credit on behalf of, or having credit exposure
resulting from a securities borrowing or lending transaction,
or derivative transaction to,’’; and
(4) in subsection (f)—
(A) in paragraph (2)—
(i) by striking ‘‘or order’’;
(ii) by striking ‘‘if it finds’’ and all that follows
through the end of the paragraph and inserting the
following: ‘‘if—
‘‘(i) the Board finds the exemption to be in the
public interest and consistent with the purposes of
this section, and notifies the Federal Deposit Insurance
Corporation of such finding; and
‘‘(ii) before the end of the 60-day period beginning
on the date on which the Federal Deposit Insurance
Corporation receives notice of the finding under clause
(i), the Federal Deposit Insurance Corporation does
not object, in writing, to the finding, based on a determination that the exemption presents an unacceptable
risk to the Deposit Insurance Fund.’’;
(iii) by striking the Board and inserting the following:
‘‘(A) IN GENERAL.—The Board’’; and
(iv) by adding at the end the following:
‘‘(B) ADDITIONAL EXEMPTIONS.—
‘‘(i) NATIONAL BANKS.—The Comptroller of the Currency may, by order, exempt a transaction of a national
bank from the requirements of this section if—
‘‘(I) the Board and the Office of the Comptroller of the Currency jointly find the exemption
to be in the public interest and consistent with
the purposes of this section and notify the Federal
Deposit Insurance Corporation of such finding; and
‘‘(II) before the end of the 60-day period beginning on the date on which the Federal Deposit
Insurance Corporation receives notice of the
finding under subclause (I), the Federal Deposit
Insurance Corporation does not object, in writing,
to the finding, based on a determination that the
exemption presents an unacceptable risk to the
Deposit Insurance Fund.
‘‘(ii) STATE BANKS.—The Federal Deposit Insurance
Corporation may, by order, exempt a transaction of
a State nonmember bank, and the Board may, by order,
exempt a transaction of a State member bank, from
the requirements of this section if—

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Notification.

Time period.
Notice.

Notification.

Time period.
Notice.

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124 STAT. 1610

Notification.

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Time period.
Notice.

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‘‘(I) the Board and the Federal Deposit Insurance Corporation jointly find that the exemption
is in the public interest and consistent with the
purposes of this section; and
‘‘(II) the Federal Deposit Insurance Corporation finds that the exemption does not present
an unacceptable risk to the Deposit Insurance
Fund.’’; and
(B) by adding at the end the following:
‘‘(4) AMOUNTS OF COVERED TRANSACTIONS.—The Board may
issue such regulations or interpretations as the Board determines are necessary or appropriate with respect to the manner
in which a netting agreement may be taken into account in
determining the amount of a covered transaction between a
member bank or a subsidiary and an affiliate, including the
extent to which netting agreements between a member bank
or a subsidiary and an affiliate may be taken into account
in determining whether a covered transaction is fully secured
for purposes of subsection (d)(4). An interpretation under this
paragraph with respect to a specific member bank, subsidiary,
or affiliate shall be issued jointly with the appropriate Federal
banking agency for such member bank, subsidiary, or affiliate.’’.
(b) TRANSACTIONS WITH AFFILIATES.—Section 23B(e) of the Federal Reserve Act (12 U.S.C. 371c–1(e)) is amended—
(1) by striking the undesignated matter following subparagraph (B);
(2) by redesignating subparagraphs (A) and (B) as clauses
(i) and (ii), respectively, and adjusting the clause margins
accordingly;
(3) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively, and adjusting the subparagraph margins accordingly;
(4) by striking ‘‘The Board’’ and inserting the following:
‘‘(1) IN GENERAL.—The Board’’;
(5) in paragraph (1)(B), as so redesignated—
(A) in the matter preceding clause (i), by inserting
before ‘‘regulations’’ the following: ‘‘subject to paragraph
(2), if the Board finds that an exemption or exclusion
is in the public interest and is consistent with the purposes
of this section, and notifies the Federal Deposit Insurance
Corporation of such finding,’’; and
(B) in clause (ii), by striking the comma at the end
and inserting a period; and
(6) by adding at the end the following:
‘‘(2) EXCEPTION.—The Board may grant an exemption or
exclusion under this subsection only if, during the 60-day period
beginning on the date of receipt of notice of the finding from
the Board under paragraph (1)(B), the Federal Deposit Insurance Corporation does not object, in writing, to such exemption
or exclusion, based on a determination that the exemption
presents an unacceptable risk to the Deposit Insurance Fund.’’.
(c) HOME OWNERS’ LOAN ACT.—Section 11 of the Home Owners’
Loan Act (12 U.S.C. 1468) is amended by adding at the end the
following:
‘‘(d) EXEMPTIONS.—

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124 STAT. 1611

‘‘(1) FEDERAL SAVINGS ASSOCIATIONS.—The Comptroller of
the Currency may, by order, exempt a transaction of a Federal
savings association from the requirements of this section if—
‘‘(A) the Board and the Office of the Comptroller of
the Currency jointly find the exemption to be in the public
interest and consistent with the purposes of this section
and notify the Federal Deposit Insurance Corporation of
such finding; and
‘‘(B) before the end of the 60-day period beginning
on the date on which the Federal Deposit Insurance Corporation receives notice of the finding under subparagraph
(A), the Federal Deposit Insurance Corporation does not
object, in writing, to the finding, based on a determination
that the exemption presents an unacceptable risk to the
Deposit Insurance Fund.
‘‘(2) STATE SAVINGS ASSOCIATION.—The Federal Deposit
Insurance Corporation may, by order, exempt a transaction
of a State savings association from the requirements of this
section if the Board and the Federal Deposit Insurance Corporation jointly find that—
‘‘(A) the exemption is in the public interest and consistent with the purposes of this section; and
‘‘(B) the exemption does not present an unacceptable
risk to the Deposit Insurance Fund.’’.
(d) EFFECTIVE DATE.—The amendments made by this section
shall take effect 1 year after the transfer date.

Notification.

Time period.
Notice.

12 USC 371c
note.

SEC. 609. ELIMINATING EXCEPTIONS FOR TRANSACTIONS WITH FINANCIAL SUBSIDIARIES.

(a) AMENDMENT.—Section 23A(e) of the Federal Reserve Act
(12 U.S.C. 371c(e)) is amended—
(1) by striking paragraph (3); and
(2) by redesignating paragraph (4) as paragraph (3).
(b) PROSPECTIVE APPLICATION OF AMENDMENT.—The amendments made by this section shall apply with respect to any covered
transaction between a bank and a subsidiary of the bank, as those
terms are defined in section 23A of the Federal Reserve Act (12
U.S.C. 371c), that is entered into on or after the date of enactment
of this Act.
(c) EFFECTIVE DATE.—The amendments made by this section
shall take effect 1 year after the transfer date.

12 USC 371c
note.

12 USC 371c
note.

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SEC. 610. LENDING LIMITS APPLICABLE TO CREDIT EXPOSURE ON
DERIVATIVE TRANSACTIONS, REPURCHASE AGREEMENTS,
REVERSE REPURCHASE AGREEMENTS, AND SECURITIES
LENDING AND BORROWING TRANSACTIONS.

(a) NATIONAL BANKS.—Section 5200(b) of the Revised Statutes
of the United States (12 U.S.C. 84(b)) is amended—
(1) in paragraph (1), by striking ‘‘shall include’’ and all
that follows through the end of the paragraph and inserting
the following: ‘‘shall include—
‘‘(A) all direct or indirect advances of funds to a person
made on the basis of any obligation of that person to
repay the funds or repayable from specific property pledged
by or on behalf of the person;
‘‘(B) to the extent specified by the Comptroller of the
Currency, any liability of a national banking association

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12 USC 84 note.

PUBLIC LAW 111–203—JULY 21, 2010

to advance funds to or on behalf of a person pursuant
to a contractual commitment; and
‘‘(C) any credit exposure to a person arising from a
derivative transaction, repurchase agreement, reverse
repurchase agreement, securities lending transaction, or
securities borrowing transaction between the national
banking association and the person;’’;
(2) in paragraph (2), by striking the period at the end
and inserting ‘‘; and’’; and
(3) by adding at the end the following:
‘‘(3) the term ‘derivative transaction’ includes any transaction that is a contract, agreement, swap, warrant, note, or
option that is based, in whole or in part, on the value of,
any interest in, or any quantitative measure or the occurrence
of any event relating to, one or more commodities, securities,
currencies, interest or other rates, indices, or other assets.’’.
(b) SAVINGS ASSOCIATIONS.—Section 5(u)(3) of the Home
Owners’ Loan Act (12 U.S.C. 1464(u)(3)) is amended by striking
‘‘Director’’ each place that term appears and inserting ‘‘Comptroller
of the Currency’’.
(c) EFFECTIVE DATE.—The amendments made by this section
shall take effect 1 year after the transfer date.
SEC. 611. CONSISTENT TREATMENT OF DERIVATIVE TRANSACTIONS
IN LENDING LIMITS.

12 USC 1828
note.

(a) AMENDMENT.—Section 18 of the Federal Deposit Insurance
Act (12 U.S.C. 1828) is amended by adding at the end the following:
‘‘(y) STATE LENDING LIMIT TREATMENT OF DERIVATIVES TRANSACTIONS.—An insured State bank may engage in a derivative transaction, as defined in section 5200(b)(3) of the Revised Statutes
of the United States (12 U.S.C. 84(b)(3)), only if the law with
respect to lending limits of the State in which the insured State
bank is chartered takes into consideration credit exposure to derivative transactions.’’.
(b) EFFECTIVE DATE.—The amendment made by this section
shall take effect 18 months after the transfer date.
SEC. 612. RESTRICTION ON CONVERSIONS OF TROUBLED BANKS.

(a) CONVERSION OF A NATIONAL BANKING ASSOCIATION.—The
Act entitled ‘‘An Act to provide for the conversion of national
banking associations into and their merger or consolidation with
State banks, and for other purposes.’’ (12 U.S.C. 214 et seq.) is
amended by adding at the end the following:

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12 USC 214d.

‘‘SEC. 10. PROHIBITION ON CONVERSION.

‘‘A national banking association may not convert to a State
bank or State savings association during any period in which the
national banking association is subject to a cease and desist order
(or other formal enforcement order) issued by, or a memorandum
of understanding entered into with, the Comptroller of the Currency
with respect to a significant supervisory matter.’’.
(b) CONVERSION OF A STATE BANK OR SAVINGS ASSOCIATION.—
Section 5154 of the Revised Statutes of the United States (12
U.S.C. 35) is amended by adding at the end the following: ‘‘The
Comptroller of the Currency may not approve the conversion of
a State bank or State savings association to a national banking
association or Federal savings association during any period in
which the State bank or State savings association is subject to

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124 STAT. 1613

a cease and desist order (or other formal enforcement order) issued
by, or a memorandum of understanding entered into with, a State
bank supervisor or the appropriate Federal banking agency with
respect to a significant supervisory matter or a final enforcement
action by a State Attorney General.’’.
(c) CONVERSION OF A FEDERAL SAVINGS ASSOCIATION.—Section
5(i) of the Home Owners’ Loan Act (12 U.S.C. 1464(i)) is amended
by adding at the end the following:
‘‘(6) LIMITATION ON CERTAIN CONVERSIONS BY FEDERAL
SAVINGS ASSOCIATIONS.—A Federal savings association may not
convert to a State bank or State savings association during
any period in which the Federal savings association is subject
to a cease and desist order (or other formal enforcement order)
issued by, or a memorandum of understanding entered into
with, the Office of Thrift Supervision or the Comptroller of
the Currency with respect to a significant supervisory matter.’’.
(d) EXCEPTION.—The prohibition on the approval of conversions
under the amendments made by subsections (a), (b), and (c) shall
not apply, if—
(1) the Federal banking agency that would be the appropriate Federal banking agency after the proposed conversion
gives the appropriate Federal banking agency or State bank
supervisor that issued the cease and desist order (or other
formal enforcement order) or memorandum of understanding,
as appropriate, written notice of the proposed conversion
including a plan to address the significant supervisory matter
in a manner that is consistent with the safe and sound operation of the institution;
(2) within 30 days of receipt of the written notice required
under paragraph (1), the appropriate Federal banking agency
or State bank supervisor that issued the cease and desist order
(or other formal enforcement order) or memorandum of understanding, as appropriate, does not object to the conversion
or the plan to address the significant supervisory matter;
(3) after conversion of the insured depository institution,
the appropriate Federal banking agency after the conversion
implements such plan; and
(4) in the case of a final enforcement action by a State
Attorney General, approval of the conversion is conditioned
on compliance by the insured depository institution with the
terms of such final enforcement action.
(e) NOTIFICATION OF PENDING ENFORCEMENT ACTIONS.—
(1) COPY OF CONVERSION APPLICATION.—At the time an
insured depository institution files a conversion application,
the insured depository institution shall transmit a copy of the
conversion application to—
(A) the appropriate Federal banking agency for the
insured depository institution; and
(B) the Federal banking agency that would be the
appropriate Federal banking agency of the insured depository institution after the proposed conversion.
(2) NOTIFICATION AND ACCESS TO INFORMATION.—Upon
receipt of a copy of the application described in paragraph
(1), the appropriate Federal banking agency for the insured
depository institution proposing the conversion shall—
(A) notify the Federal banking agency that would be
the appropriate Federal banking agency for the institution

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12 USC 35 note.

Notice.

Deadline.

12 USC 35 note.

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124 STAT. 1614

PUBLIC LAW 111–203—JULY 21, 2010
after the proposed conversion in writing of any ongoing
supervisory or investigative proceedings that the appropriate Federal banking agency for the institution proposing
to convert believes is likely to result, in the near term
and absent the proposed conversion, in a cease and desist
order (or other formal enforcement order) or memorandum
of understanding with respect to a significant supervisory
matter; and
(B) provide the Federal banking agency that would
be the appropriate Federal banking agency for the institution after the proposed conversion access to all investigative
and supervisory information relating to the proceedings
described in subparagraph (A).

SEC. 613. DE NOVO BRANCHING INTO STATES.

(a) NATIONAL BANKS.—Section 5155(g)(1)(A) of the Revised Statutes of the United States (12 U.S.C. 36(g)(1)(A)) is amended to
read as follows:
‘‘(A) the law of the State in which the branch is located,
or is to be located, would permit establishment of the
branch, if the national bank were a State bank chartered
by such State; and’’.
(b) STATE INSURED BANKS.—Section 18(d)(4)(A)(i) of the Federal
Deposit Insurance Act (12 U.S.C. 1828(d)(4)(A)(i)) is amended to
read as follows:
‘‘(i) the law of the State in which the branch is
located, or is to be located, would permit establishment
of the branch, if the bank were a State bank chartered
by such State; and’’.
SEC. 614. LENDING LIMITS TO INSIDERS.

12 USC 375b
note.

(a) EXTENSIONS OF CREDIT.—Section 22(h)(9)(D)(i) of the Federal Reserve Act (12 U.S.C. 375b(9)(D)(i)) is amended—
(1) by striking the period at the end and inserting ‘‘; or’’;
(2) by striking ‘‘a person’’ and inserting ‘‘the person’’;
(3) by striking ‘‘extends credit by making’’ and inserting
the following: ‘‘extends credit to a person by—
‘‘(I) making’’; and
(4) by adding at the end the following:
‘‘(II) having credit exposure to the person
arising from a derivative transaction (as defined
in section 5200(b) of the Revised Statutes of the
United States (12 U.S.C. 84(b))), repurchase agreement, reverse repurchase agreement, securities
lending transaction, or securities borrowing transaction between the member bank and the person.’’.
(b) EFFECTIVE DATE.—The amendments made by this section
shall take effect 1 year after the transfer date.

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SEC. 615. LIMITATIONS ON PURCHASES OF ASSETS FROM INSIDERS.

(a) AMENDMENT TO THE FEDERAL DEPOSIT INSURANCE ACT.—
Section 18 of the Federal Deposit Insurance Act (12 U.S.C. 1828)
is amended by adding at the end the following:
‘‘(z) GENERAL PROHIBITION ON SALE OF ASSETS.—
‘‘(1) IN GENERAL.—An insured depository institution may
not purchase an asset from, or sell an asset to, an executive
officer, director, or principal shareholder of the insured depository institution, or any related interest of such person (as

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124 STAT. 1615

such terms are defined in section 22(h) of Federal Reserve
Act), unless—
‘‘(A) the transaction is on market terms; and
‘‘(B) if the transaction represents more than 10 percent
of the capital stock and surplus of the insured depository
institution, the transaction has been approved in advance
by a majority of the members of the board of directors
of the insured depository institution who do not have an
interest in the transaction.
‘‘(2) RULEMAKING.—The Board of Governors of the Federal
Reserve System may issue such rules as may be necessary
to define terms and to carry out the purposes this subsection.
Before proposing or adopting a rule under this paragraph,
the Board of Governors of the Federal Reserve System shall
consult with the Comptroller of the Currency and the Corporation as to the terms of the rule.’’.
(b) AMENDMENTS TO THE FEDERAL RESERVE ACT.—Section 22(d)
of the Federal Reserve Act (12 U.S.C. 375) is amended to read
as follows:
‘‘(d) [Reserved]’’.
(c) EFFECTIVE DATE.—The amendments made by this section
shall take effect on the transfer date.

Consultation.

12 USC 375 note.

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SEC. 616. REGULATIONS REGARDING CAPITAL LEVELS.

(a) CAPITAL LEVELS OF BANK HOLDING COMPANIES.—Section
5(b) of the Bank Holding Company Act of 1956 (12 U.S.C. 1844(b))
is amended—
(1) by inserting after ‘‘orders’’ the following: ‘‘, including
regulations and orders relating to the capital requirements
for bank holding companies,’’; and
(2) by adding at the end the following: ‘‘In establishing
capital regulations pursuant to this subsection, the Board shall
seek to make such requirements countercyclical, so that the
amount of capital required to be maintained by a company
increases in times of economic expansion and decreases in
times of economic contraction, consistent with the safety and
soundness of the company.’’.
(b) CAPITAL LEVELS OF SAVINGS AND LOAN HOLDING COMPANIES.—Section 10(g)(1) of the Home Owners’ Loan Act (12 U.S.C.
1467a(g)(1)) is amended—
(1) by inserting after ‘‘orders’’ the following: ‘‘, including
regulations and orders relating to capital requirements for
savings and loan holding companies,’’; and
(2) by inserting at the end the following: ‘‘In establishing
capital regulations pursuant to this subsection, the appropriate
Federal banking agency shall seek to make such requirements
countercyclical so that the amount of capital required to be
maintained by a company increases in times of economic expansion and decreases in times of economic contraction, consistent
with the safety and soundness of the company.’’.
(c) CAPITAL LEVELS OF INSURED DEPOSITORY INSTITUTIONS.—
Section 908(a)(1) of the International Lending Supervision Act of
1983 (12 U.S.C. 3907(a)(1)) is amended by adding at the end the
following: ‘‘Each appropriate Federal banking agency shall seek
to make the capital standards required under this section or other
provisions of Federal law for insured depository institutions countercyclical so that the amount of capital required to be maintained

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by an insured depository institution increases in times of economic
expansion and decreases in times of economic contraction, consistent
with the safety and soundness of the insured depository institution.’’
(d) SOURCE OF STRENGTH.—The Federal Deposit Insurance Act
(12 U.S.C. 1811 et seq.) is amended by inserting after section
38 (12 U.S.C. 1831o) the following:
12 USC 1831o–1.

Deadline.

12 USC 1467a
note.

‘‘SEC. 38A. SOURCE OF STRENGTH.

‘‘(a) HOLDING COMPANIES.—The appropriate Federal banking
agency for a bank holding company or savings and loan holding
company shall require the bank holding company or savings and
loan holding company to serve as a source of financial strength
for any subsidiary of the bank holding company or savings and
loan holding company that is a depository institution.
‘‘(b) OTHER COMPANIES.—If an insured depository institution
is not the subsidiary of a bank holding company or savings and
loan holding company, the appropriate Federal banking agency
for the insured depository institution shall require any company
that directly or indirectly controls the insured depository institution
to serve as a source of financial strength for such institution.
‘‘(c) REPORTS.—The appropriate Federal banking agency for
an insured depository institution described in subsection (b) may,
from time to time, require the company, or a company that directly
or indirectly controls the insured depository institution, to submit
a report, under oath, for the purposes of—
‘‘(1) assessing the ability of such company to comply with
the requirement under subsection (b); and
‘‘(2) enforcing the compliance of such company with the
requirement under subsection (b).
‘‘(d) RULES.—Not later than 1 year after the transfer date,
as defined in section 311 of the Enhancing Financial Institution
Safety and Soundness Act of 2010, the appropriate Federal banking
agencies shall jointly issue final rules to carry out this section.
‘‘(e) DEFINITION.—In this section, the term ‘source of financial
strength’ means the ability of a company that directly or indirectly
owns or controls an insured depository institution to provide financial assistance to such insured depository institution in the event
of the financial distress of the insured depository institution.’’.
(e) EFFECTIVE DATE.—The amendments made by this section
shall take effect on the transfer date.
SEC. 617. ELIMINATION OF ELECTIVE INVESTMENT BANK HOLDING
COMPANY FRAMEWORK.

15 USC 78q note.

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12 USC 1850a.

(a) AMENDMENT.—Section 17 of the Securities Exchange Act
of 1934 (15 U.S.C. 78q) is amended—
(1) by striking subsection (i); and
(2) by redesignating subsections (j) and (k) as subsections
(i) and (j), respectively.
(b) EFFECTIVE DATE.—The amendments made by this section
shall take effect on the transfer date.
SEC. 618. SECURITIES HOLDING COMPANIES.

(a) DEFINITIONS.—In this section—
(1) the term ‘‘associated person of a securities holding company’’ means a person directly or indirectly controlling, controlled by, or under common control with, a securities holding
company;

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124 STAT. 1617

(2) the term ‘‘foreign bank’’ has the same meaning as
in section 1(b)(7) of the International Banking Act of 1978
(12 U.S.C. 3101(7));
(3) the term ‘‘insured bank’’ has the same meaning as
in section 3 of the Federal Deposit Insurance Act (12 U.S.C.
1813);
(4) the term ‘‘securities holding company’’—
(A) means—
(i) a person (other than a natural person) that
owns or controls 1 or more brokers or dealers registered
with the Commission; and
(ii) the associated persons of a person described
in clause (i); and
(B) does not include a person that is—
(i) a nonbank financial company supervised by the
Board under title I;
(ii) an insured bank (other than an institution
described in subparagraphs (D), (F), or (H) of section
2(c)(2) of the Bank Holding Company Act of 1956 (12
U.S.C. 1841(c)(2)) or a savings association;
(iii) an affiliate of an insured bank (other than
an institution described in subparagraphs (D), (F), or
(H) of section 2(c)(2) of the Bank Holding Company
Act of 1956 (12 U.S.C. 1841(c)(2)) or an affiliate of
a savings association;
(iv) a foreign bank, foreign company, or company
that is described in section 8(a) of the International
Banking Act of 1978 (12 U.S.C. 3106(a));
(v) a foreign bank that controls, directly or
indirectly, a corporation chartered under section 25A
of the Federal Reserve Act (12 U.S.C. 611 et seq.);
or
(vi) subject to comprehensive consolidated supervision by a foreign regulator;
(5) the term ‘‘supervised securities holding company’’ means
a securities holding company that is supervised by the Board
of Governors under this section; and
(6) the terms ‘‘affiliate’’, ‘‘bank’’, ‘‘bank holding company’’,
‘‘company’’, ‘‘control’’, ‘‘savings association’’, and ‘‘subsidiary’’
have the same meanings as in section 2 of the Bank Holding
Company Act of 1956.
(b) SUPERVISION OF A SECURITIES HOLDING COMPANY NOT
HAVING A BANK OR SAVINGS ASSOCIATION AFFILIATE.—
(1) IN GENERAL.—A securities holding company that is
required by a foreign regulator or provision of foreign law
to be subject to comprehensive consolidated supervision may
register with the Board of Governors under paragraph (2) to
become a supervised securities holding company. Any securities
holding company filing such a registration shall be supervised
in accordance with this section, and shall comply with the
rules and orders prescribed by the Board of Governors
applicable to supervised securities holding companies.
(2) REGISTRATION AS A SUPERVISED SECURITIES HOLDING
COMPANY.—
(A) REGISTRATION.—A securities holding company that
elects to be subject to comprehensive consolidated supervision shall register by filing with the Board of Governors

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124 STAT. 1618

PUBLIC LAW 111–203—JULY 21, 2010
such information and documents as the Board of Governors,
by regulation, may prescribe as necessary or appropriate
in furtherance of the purposes of this section.
(B) EFFECTIVE DATE.—A securities holding company
that registers under subparagraph (A) shall be deemed
to be a supervised securities holding company, effective
on the date that is 45 days after the date of receipt of
the registration information and documents under subparagraph (A) by the Board of Governors, or within such shorter
period as the Board of Governors, by rule or order, may
determine.
(c) SUPERVISION OF SECURITIES HOLDING COMPANIES.—
(1) RECORDKEEPING AND REPORTING.—
(A) RECORDKEEPING AND REPORTING REQUIRED.—Each
supervised securities holding company and each affiliate
of a supervised securities holding company shall make
and keep for periods determined by the Board of Governors
such records, furnish copies of such records, and make
such reports, as the Board of Governors determines to
be necessary or appropriate to carry out this section, to
prevent evasions thereof, and to monitor compliance by
the supervised securities holding company or affiliate with
applicable provisions of law.
(B) FORM AND CONTENTS.—
(i) IN GENERAL.—Any record or report required
to be made, furnished, or kept under this paragraph
shall—
(I) be prepared in such form and according
to such specifications (including certification by
a registered public accounting firm), as the Board
of Governors may require; and
(II) be provided promptly to the Board of Governors at any time, upon request by the Board
of Governors.
(ii) CONTENTS.—Records and reports required to
be made, furnished, or kept under this paragraph may
include—
(I) a balance sheet or income statement of
the supervised securities holding company or an
affiliate of a supervised securities holding company;
(II) an assessment of the consolidated capital
and liquidity of the supervised securities holding
company;
(III) a report by an independent auditor
attesting to the compliance of the supervised securities holding company with the internal risk
management and internal control objectives of the
supervised securities holding company; and
(IV) a report concerning the extent to which
the supervised securities holding company or affiliate has complied with the provisions of this section and any regulations prescribed and orders
issued under this section.
(2) USE OF EXISTING REPORTS.—
(A) IN GENERAL.—The Board of Governors shall, to
the fullest extent possible, accept reports in fulfillment

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124 STAT. 1619

of the requirements of this paragraph that a supervised
securities holding company or an affiliate of a supervised
securities holding company has been required to provide
to another regulatory agency or a self-regulatory organization.
(B) AVAILABILITY.—A supervised securities holding
company or an affiliate of a supervised securities holding
company shall promptly provide to the Board of Governors,
at the request of the Board of Governors, any report
described in subparagraph (A), as permitted by law.
(3) EXAMINATION AUTHORITY.—
(A) FOCUS OF EXAMINATION AUTHORITY.—The Board
of Governors may make examinations of any supervised
securities holding company and any affiliate of a supervised
securities holding company to carry out this subsection,
to prevent evasions thereof, and to monitor compliance
by the supervised securities holding company or affiliate
with applicable provisions of law.
(B) DEFERENCE TO OTHER EXAMINATIONS.—For purposes of this subparagraph, the Board of Governors shall,
to the fullest extent possible, use the reports of examination
made by other appropriate Federal or State regulatory
authorities with respect to any functionally regulated subsidiary or any institution described in subparagraph (D),
(F), or (H) of section 2(c)(2) of the Bank Holding Company
Act of 1956 (12 U.S.C. 1841(c)(2)).
(d) CAPITAL AND RISK MANAGEMENT.—
(1) IN GENERAL.—The Board of Governors shall, by regulation or order, prescribe capital adequacy and other risk management standards for supervised securities holding companies
that are appropriate to protect the safety and soundness of
the supervised securities holding companies and address the
risks posed to financial stability by supervised securities
holding companies.
(2) DIFFERENTIATION.—In imposing standards under this
subsection, the Board of Governors may differentiate among
supervised securities holding companies on an individual basis,
or by category, taking into consideration the requirements
under paragraph (3).
(3) CONTENT.—Any standards imposed on a supervised
securities holding company under this subsection shall take
into account—
(A) the differences among types of business activities
carried out by the supervised securities holding company;
(B) the amount and nature of the financial assets of
the supervised securities holding company;
(C) the amount and nature of the liabilities of the
supervised securities holding company, including the
degree of reliance on short-term funding;
(D) the extent and nature of the off-balance sheet
exposures of the supervised securities holding company;
(E) the extent and nature of the transactions and relationships of the supervised securities holding company with
other financial companies;
(F) the importance of the supervised securities holding
company as a source of credit for households, businesses,

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124 STAT. 1620

Effective date.

PUBLIC LAW 111–203—JULY 21, 2010

and State and local governments, and as a source of
liquidity for the financial system; and
(G) the nature, scope, and mix of the activities of
the supervised securities holding company.
(4) NOTICE.—A capital requirement imposed under this
subsection may not take effect earlier than 180 days after
the date on which a supervised securities holding company
is provided notice of the capital requirement.
(e) OTHER PROVISIONS OF LAW APPLICABLE TO SUPERVISED
SECURITIES HOLDING COMPANIES.—
(1) FEDERAL DEPOSIT INSURANCE ACT.—Subsections (b), (c)
through (s), and (u) of section 8 of the Federal Deposit Insurance
Act (12 U.S.C. 1818) shall apply to any supervised securities
holding company, and to any subsidiary (other than a bank
or an institution described in subparagraph (D), (F), or (H)
of section 2(c)(2) of the Bank Holding Company Act of 1956
(12 U.S.C. 1841(c)(2))) of a supervised securities holding company, in the same manner as such subsections apply to a
bank holding company for which the Board of Governors is
the appropriate Federal banking agency. For purposes of
applying such subsections to a supervised securities holding
company or a subsidiary (other than a bank or an institution
described in subparagraph (D), (F), or (H) of section 2(c)(2)
of the Bank Holding Company Act of 1956 (12 U.S.C.
1841(c)(2))) of a supervised securities holding company, the
Board of Governors shall be deemed the appropriate Federal
banking agency for the supervised securities holding company
or subsidiary.
(2) BANK HOLDING COMPANY ACT OF 1956.—Except as the
Board of Governors may otherwise provide by regulation or
order, a supervised securities holding company shall be subject
to the provisions of the Bank Holding Company Act of 1956
(12 U.S.C. 1841 et seq.) in the same manner and to the same
extent a bank holding company is subject to such provisions,
except that a supervised securities holding company may not,
by reason of this paragraph, be deemed to be a bank holding
company for purposes of section 4 of the Bank Holding Company
Act of 1956 (12 U.S.C. 1843).
SEC. 619. PROHIBITIONS ON PROPRIETARY TRADING AND CERTAIN
RELATIONSHIPS WITH HEDGE FUNDS AND PRIVATE
EQUITY FUNDS.

The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et
seq.) is amended by adding at the end the following:

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12 USC 1851.

‘‘SEC. 13. PROHIBITIONS ON PROPRIETARY TRADING AND CERTAIN
RELATIONSHIPS WITH HEDGE FUNDS AND PRIVATE EQUITY
FUNDS.

‘‘(a) IN GENERAL.—
‘‘(1) PROHIBITION.—Unless otherwise provided in this section, a banking entity shall not—
‘‘(A) engage in proprietary trading; or
‘‘(B) acquire or retain any equity, partnership, or other
ownership interest in or sponsor a hedge fund or a private
equity fund.
‘‘(2) NONBANK FINANCIAL COMPANIES SUPERVISED BY THE
BOARD.—Any nonbank financial company supervised by the
Board that engages in proprietary trading or takes or retains

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124 STAT. 1621

any equity, partnership, or other ownership interest in or sponsors a hedge fund or a private equity fund shall be subject,
by rule, as provided in subsection (b)(2), to additional capital
requirements for and additional quantitative limits with
regards to such proprietary trading and taking or retaining
any equity, partnership, or other ownership interest in or
sponsorship of a hedge fund or a private equity fund, except
that permitted activities as described in subsection (d) shall
not be subject to the additional capital and additional quantitative limits except as provided in subsection (d)(3), as if
the nonbank financial company supervised by the Board were
a banking entity.
‘‘(b) STUDY AND RULEMAKING.—
‘‘(1) STUDY.—Not later than 6 months after the date of
enactment of this section, the Financial Stability Oversight
Council shall study and make recommendations on implementing the provisions of this section so as to—
‘‘(A) promote and enhance the safety and soundness
of banking entities;
‘‘(B) protect taxpayers and consumers and enhance
financial stability by minimizing the risk that insured
depository institutions and the affiliates of insured depository institutions will engage in unsafe and unsound activities;
‘‘(C) limit the inappropriate transfer of Federal subsidies from institutions that benefit from deposit insurance
and liquidity facilities of the Federal Government to
unregulated entities;
‘‘(D) reduce conflicts of interest between the selfinterest of banking entities and nonbank financial companies supervised by the Board, and the interests of the
customers of such entities and companies;
‘‘(E) limit activities that have caused undue risk or
loss in banking entities and nonbank financial companies
supervised by the Board, or that might reasonably be
expected to create undue risk or loss in such banking
entities and nonbank financial companies supervised by
the Board;
‘‘(F) appropriately accommodate the business of insurance within an insurance company, subject to regulation
in accordance with the relevant insurance company investment laws, while protecting the safety and soundness of
any banking entity with which such insurance company
is affiliated and of the United States financial system;
and
‘‘(G) appropriately time the divestiture of illiquid assets
that are affected by the implementation of the prohibitions
under subsection (a).
‘‘(2) RULEMAKING.—
‘‘(A) IN GENERAL.—Unless otherwise provided in this
section, not later than 9 months after the completion of
the study under paragraph (1), the appropriate Federal
banking agencies, the Securities and Exchange Commission, and the Commodity Futures Trading Commission,
shall consider the findings of the study under paragraph
(1) and adopt rules to carry out this section, as provided
in subparagraph (B).

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124 STAT. 1622

‘‘(B) COORDINATED RULEMAKING.—
‘‘(i) REGULATORY AUTHORITY.—The regulations
issued under this paragraph shall be issued by—
‘‘(I) the appropriate Federal banking agencies,
jointly, with respect to insured depository institutions;
‘‘(II) the Board, with respect to any company
that controls an insured depository institution, or
that is treated as a bank holding company for
purposes of section 8 of the International Banking
Act, any nonbank financial company supervised
by the Board, and any subsidiary of any of the
foregoing (other than a subsidiary for which an
agency described in subclause (I), (III), or (IV)
is the primary financial regulatory agency);
‘‘(III) the Commodity Futures Trading
Commission, with respect to any entity for which
the Commodity Futures Trading Commission is
the primary financial regulatory agency, as defined
in section 2 of the Dodd-Frank Wall Street Reform
and Consumer Protection Act; and
‘‘(IV) the Securities and Exchange Commission, with respect to any entity for which the Securities and Exchange Commission is the primary
financial regulatory agency, as defined in section
2 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
‘‘(ii) COORDINATION, CONSISTENCY, AND COMPARABILITY.—In developing and issuing regulations
pursuant to this section, the appropriate Federal
banking agencies, the Securities and Exchange
Commission, and the Commodity Futures Trading
Commission shall consult and coordinate with each
other, as appropriate, for the purposes of assuring,
to the extent possible, that such regulations are comparable and provide for consistent application and
implementation of the applicable provisions of this section to avoid providing advantages or imposing disadvantages to the companies affected by this subsection
and to protect the safety and soundness of banking
entities and nonbank financial companies supervised
by the Board.
‘‘(iii) COUNCIL ROLE.—The Chairperson of the
Financial Stability Oversight Council shall be responsible for coordination of the regulations issued under
this section.
‘‘(c) EFFECTIVE DATE.—
‘‘(1) IN GENERAL.—Except as provided in paragraphs (2)
and (3), this section shall take effect on the earlier of—
‘‘(A) 12 months after the date of the issuance of final
rules under subsection (b); or
‘‘(B) 2 years after the date of enactment of this section.
‘‘(2) CONFORMANCE PERIOD FOR DIVESTITURE.—A banking
entity or nonbank financial company supervised by the Board
shall bring its activities and investments into compliance with
the requirements of this section not later than 2 years after
the date on which the requirements become effective pursuant

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124 STAT. 1623

to this section or 2 years after the date on which the entity
or company becomes a nonbank financial company supervised
by the Board. The Board may, by rule or order, extend this
two-year period for not more than one year at a time, if,
in the judgment of the Board, such an extension is consistent
with the purposes of this section and would not be detrimental
to the public interest. The extensions made by the Board under
the preceding sentence may not exceed an aggregate of 3 years.
‘‘(3) EXTENDED TRANSITION FOR ILLIQUID FUNDS.—
‘‘(A) APPLICATION.—The Board may, upon the application of a banking entity, extend the period during which
the banking entity, to the extent necessary to fulfill a
contractual obligation that was in effect on May 1, 2010,
may take or retain its equity, partnership, or other ownership interest in, or otherwise provide additional capital
to, an illiquid fund.
‘‘(B) TIME LIMIT ON APPROVAL.—The Board may grant
1 extension under subparagraph (A), which may not exceed
5 years.
‘‘(4) DIVESTITURE REQUIRED.—Except as otherwise provided
in subsection (d)(1)(G), a banking entity may not engage in
any activity prohibited under subsection (a)(1)(B) after the earlier of—
‘‘(A) the date on which the contractual obligation to
invest in the illiquid fund terminates; and
‘‘(B) the date on which any extensions granted by the
Board under paragraph (3) expire.
‘‘(5) ADDITIONAL CAPITAL DURING TRANSITION PERIOD.—Notwithstanding paragraph (2), on the date on which the rules
are issued under subsection (b)(2), the appropriate Federal
banking agencies, the Securities and Exchange Commission,
and the Commodity Futures Trading Commission shall issue
rules, as provided in subsection (b)(2), to impose additional
capital requirements, and any other restrictions, as appropriate,
on any equity, partnership, or ownership interest in or sponsorship of a hedge fund or private equity fund by a banking
entity.
‘‘(6) SPECIAL RULEMAKING.—Not later than 6 months after
the date of enactment of this section, the Board shall issues
rules to implement paragraphs (2) and (3).
‘‘(d) PERMITTED ACTIVITIES.—
‘‘(1) IN GENERAL.—Notwithstanding the restrictions under
subsection (a), to the extent permitted by any other provision
of Federal or State law, and subject to the limitations under
paragraph (2) and any restrictions or limitations that the appropriate Federal banking agencies, the Securities and Exchange
Commission, and the Commodity Futures Trading Commission,
may determine, the following activities (in this section referred
to as ‘permitted activities’) are permitted:
‘‘(A) The purchase, sale, acquisition, or disposition of
obligations of the United States or any agency thereof,
obligations, participations, or other instruments of or issued
by the Government National Mortgage Association, the
Federal National Mortgage Association, the Federal Home
Loan Mortgage Corporation, a Federal Home Loan Bank,
the Federal Agricultural Mortgage Corporation, or a Farm
Credit System institution chartered under and subject to

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124 STAT. 1624

PUBLIC LAW 111–203—JULY 21, 2010
the provisions of the Farm Credit Act of 1971 (12 U.S.C.
2001 et seq.), and obligations of any State or of any political
subdivision thereof.
‘‘(B) The purchase, sale, acquisition, or disposition of
securities and other instruments described in subsection
(h)(4) in connection with underwriting or market-makingrelated activities, to the extent that any such activities
permitted by this subparagraph are designed not to exceed
the reasonably expected near term demands of clients,
customers, or counterparties.
‘‘(C) Risk-mitigating hedging activities in connection
with and related to individual or aggregated positions,
contracts, or other holdings of a banking entity that are
designed to reduce the specific risks to the banking entity
in connection with and related to such positions, contracts,
or other holdings.
‘‘(D) The purchase, sale, acquisition, or disposition of
securities and other instruments described in subsection
(h)(4) on behalf of customers.
‘‘(E) Investments in one or more small business investment companies, as defined in section 102 of the Small
Business Investment Act of 1958 (15 U.S.C. 662), investments designed primarily to promote the public welfare,
of the type permitted under paragraph (11) of section 5136
of the Revised Statutes of the United States (12 U.S.C.
24), or investments that are qualified rehabilitation
expenditures with respect to a qualified rehabilitated
building or certified historic structure, as such terms are
defined in section 47 of the Internal Revenue Code of
1986 or a similar State historic tax credit program.
‘‘(F) The purchase, sale, acquisition, or disposition of
securities and other instruments described in subsection
(h)(4) by a regulated insurance company directly engaged
in the business of insurance for the general account of
the company and by any affiliate of such regulated insurance company, provided that such activities by any affiliate
are solely for the general account of the regulated insurance
company, if—
‘‘(i) the purchase, sale, acquisition, or disposition
is conducted in compliance with, and subject to, the
insurance company investment laws, regulations, and
written guidance of the State or jurisdiction in which
each such insurance company is domiciled; and
‘‘(ii) the appropriate Federal banking agencies,
after consultation with the Financial Stability Oversight Council and the relevant insurance commissioners of the States and territories of the United
States, have not jointly determined, after notice and
comment, that a particular law, regulation, or written
guidance described in clause (i) is insufficient to protect
the safety and soundness of the banking entity, or
of the financial stability of the United States.
‘‘(G) Organizing and offering a private equity or hedge
fund, including serving as a general partner, managing
member, or trustee of the fund and in any manner selecting
or controlling (or having employees, officers, directors, or
agents who constitute) a majority of the directors, trustees,

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124 STAT. 1625

or management of the fund, including any necessary
expenses for the foregoing, only if—
‘‘(i) the banking entity provides bona fide trust,
fiduciary, or investment advisory services;
‘‘(ii) the fund is organized and offered only in
connection with the provision of bona fide trust, fiduciary, or investment advisory services and only to persons that are customers of such services of the banking
entity;
‘‘(iii) the banking entity does not acquire or retain
an equity interest, partnership interest, or other
ownership interest in the funds except for a de minimis
investment subject to and in compliance with paragraph (4);
‘‘(iv) the banking entity complies with the restrictions under paragraphs (1) and (2) of subparagraph
(f);
‘‘(v) the banking entity does not, directly or
indirectly, guarantee, assume, or otherwise insure the
obligations or performance of the hedge fund or private
equity fund or of any hedge fund or private equity
fund in which such hedge fund or private equity fund
invests;
‘‘(vi) the banking entity does not share with the
hedge fund or private equity fund, for corporate, marketing, promotional, or other purposes, the same name
or a variation of the same name;
‘‘(vii) no director or employee of the banking entity
takes or retains an equity interest, partnership
interest, or other ownership interest in the hedge fund
or private equity fund, except for any director or
employee of the banking entity who is directly engaged
in providing investment advisory or other services to
the hedge fund or private equity fund; and
‘‘(viii) the banking entity discloses to prospective
and actual investors in the fund, in writing, that any
losses in such hedge fund or private equity fund are
borne solely by investors in the fund and not by the
banking entity, and otherwise complies with any additional rules of the appropriate Federal banking agencies, the Securities and Exchange Commission, or the
Commodity Futures Trading Commission, as provided
in subsection (b)(2), designed to ensure that losses
in such hedge fund or private equity fund are borne
solely by investors in the fund and not by the banking
entity.
‘‘(H) Proprietary trading conducted by a banking entity
pursuant to paragraph (9) or (13) of section 4(c), provided
that the trading occurs solely outside of the United States
and that the banking entity is not directly or indirectly
controlled by a banking entity that is organized under
the laws of the United States or of one or more States.
‘‘(I) The acquisition or retention of any equity, partnership, or other ownership interest in, or the sponsorship
of, a hedge fund or a private equity fund by a banking
entity pursuant to paragraph (9) or (13) of section 4(c)

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PUBLIC LAW 111–203—JULY 21, 2010
solely outside of the United States, provided that no ownership interest in such hedge fund or private equity fund
is offered for sale or sold to a resident of the United
States and that the banking entity is not directly or
indirectly controlled by a banking entity that is organized
under the laws of the United States or of one or more
States.
‘‘(J) Such other activity as the appropriate Federal
banking agencies, the Securities and Exchange Commission, and the Commodity Futures Trading Commission
determine, by rule, as provided in subsection (b)(2), would
promote and protect the safety and soundness of the
banking entity and the financial stability of the United
States.
‘‘(2) LIMITATION ON PERMITTED ACTIVITIES.—
‘‘(A) IN GENERAL.—No transaction, class of transactions, or activity may be deemed a permitted activity
under paragraph (1) if the transaction, class of transactions,
or activity—
‘‘(i) would involve or result in a material conflict
of interest (as such term shall be defined by rule as
provided in subsection (b)(2)) between the banking
entity and its clients, customers, or counterparties;
‘‘(ii) would result, directly or indirectly, in a material exposure by the banking entity to high-risk assets
or high-risk trading strategies (as such terms shall
be defined by rule as provided in subsection (b)(2));
‘‘(iii) would pose a threat to the safety and soundness of such banking entity; or
‘‘(iv) would pose a threat to the financial stability
of the United States.
‘‘(B) RULEMAKING.—The appropriate Federal banking
agencies, the Securities and Exchange Commission, and
the Commodity Futures Trading Commission shall issue
regulations to implement subparagraph (A), as part of the
regulations issued under subsection (b)(2).
‘‘(3) CAPITAL AND QUANTITATIVE LIMITATIONS.—The appropriate Federal banking agencies, the Securities and Exchange
Commission, and the Commodity Futures Trading Commission
shall, as provided in subsection (b)(2), adopt rules imposing
additional capital requirements and quantitative limitations,
including diversification requirements, regarding the activities
permitted under this section if the appropriate Federal banking
agencies, the Securities and Exchange Commission, and the
Commodity Futures Trading Commission determine that additional capital and quantitative limitations are appropriate to
protect the safety and soundness of banking entities engaged
in such activities.
‘‘(4) DE MINIMIS INVESTMENT.—
‘‘(A) IN GENERAL.—A banking entity may make and
retain an investment in a hedge fund or private equity
fund that the banking entity organizes and offers, subject
to the limitations and restrictions in subparagraph (B)
for the purposes of—
‘‘(i) establishing the fund and providing the fund
with sufficient initial equity for investment to permit
the fund to attract unaffiliated investors; or

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1627

‘‘(ii) making a de minimis investment.
‘‘(B) LIMITATIONS AND RESTRICTIONS ON INVESTMENTS.—
‘‘(i) REQUIREMENT TO SEEK OTHER INVESTORS.—
A banking entity shall actively seek unaffiliated investors to reduce or dilute the investment of the banking
entity to the amount permitted under clause (ii).
‘‘(ii) LIMITATIONS ON SIZE OF INVESTMENTS.—Notwithstanding any other provision of law, investments
by a banking entity in a hedge fund or private equity
fund shall—
‘‘(I) not later than 1 year after the date of
establishment of the fund, be reduced through
redemption, sale, or dilution to an amount that
is not more than 3 percent of the total ownership
interests of the fund;
‘‘(II) be immaterial to the banking entity, as
defined, by rule, pursuant to subsection (b)(2), but
in no case may the aggregate of all of the interests
of the banking entity in all such funds exceed
3 percent of the Tier 1 capital of the banking
entity.
‘‘(iii) CAPITAL.—For purposes of determining
compliance with applicable capital standards under
paragraph (3), the aggregate amount of the outstanding
investments by a banking entity under this paragraph,
including retained earnings, shall be deducted from
the assets and tangible equity of the banking entity,
and the amount of the deduction shall increase
commensurate with the leverage of the hedge fund
or private equity fund.
‘‘(C) EXTENSION.—Upon an application by a banking
entity, the Board may extend the period of time to meet
the requirements under subparagraph (B)(ii)(I) for 2 additional years, if the Board finds that an extension would
be consistent with safety and soundness and in the public
interest.
‘‘(e) ANTI-EVASION.—
‘‘(1) RULEMAKING.—The appropriate Federal banking agencies, the Securities and Exchange Commission, and the Commodity Futures Trading Commission shall issue regulations,
as part of the rulemaking provided for in subsection (b)(2),
regarding internal controls and recordkeeping, in order to
insure compliance with this section.
‘‘(2) TERMINATION OF ACTIVITIES OR INVESTMENT.—Notwithstanding any other provision of law, whenever an appropriate
Federal banking agency, the Securities and Exchange Commission, or the Commodity Futures Trading Commission, as appropriate, has reasonable cause to believe that a banking entity
or nonbank financial company supervised by the Board under
the respective agency’s jurisdiction has made an investment
or engaged in an activity in a manner that functions as an
evasion of the requirements of this section (including through
an abuse of any permitted activity) or otherwise violates the
restrictions under this section, the appropriate Federal banking
agency, the Securities and Exchange Commission, or the Commodity Futures Trading Commission, as appropriate, shall

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124 STAT. 1628

PUBLIC LAW 111–203—JULY 21, 2010

order, after due notice and opportunity for hearing, the banking
entity or nonbank financial company supervised by the Board
to terminate the activity and, as relevant, dispose of the investment. Nothing in this paragraph shall be construed to limit
the inherent authority of any Federal agency or State regulatory authority to further restrict any investments or activities
under otherwise applicable provisions of law.
‘‘(f) LIMITATIONS ON RELATIONSHIPS WITH HEDGE FUNDS AND
PRIVATE EQUITY FUNDS.—
‘‘(1) IN GENERAL.—No banking entity that serves, directly
or indirectly, as the investment manager, investment adviser,
or sponsor to a hedge fund or private equity fund, or that
organizes and offers a hedge fund or private equity fund pursuant to paragraph (d)(1)(G), and no affiliate of such entity,
may enter into a transaction with the fund, or with any other
hedge fund or private equity fund that is controlled by such
fund, that would be a covered transaction, as defined in section
23A of the Federal Reserve Act (12 U.S.C. 371c), with the
hedge fund or private equity fund, as if such banking entity
and the affiliate thereof were a member bank and the hedge
fund or private equity fund were an affiliate thereof.
‘‘(2) TREATMENT AS MEMBER BANK.—A banking entity that
serves, directly or indirectly, as the investment manager, investment adviser, or sponsor to a hedge fund or private equity
fund, or that organizes and offers a hedge fund or private
equity fund pursuant to paragraph (d)(1)(G), shall be subject
to section 23B of the Federal Reserve Act (12 U.S.C. 371c–
1), as if such banking entity were a member bank and such
hedge fund or private equity fund were an affiliate thereof.
‘‘(3) PERMITTED SERVICES.—
‘‘(A) IN GENERAL.—Notwithstanding paragraph (1), the
Board may permit a banking entity to enter into any prime
brokerage transaction with any hedge fund or private
equity fund in which a hedge fund or private equity fund
managed, sponsored, or advised by such banking entity
has taken an equity, partnership, or other ownership
interest, if—
‘‘(i) the banking entity is in compliance with each
of the limitations set forth in subsection (d)(1)(G) with
regard to a hedge fund or private equity fund organized
and offered by such banking entity;
‘‘(ii) the chief executive officer (or equivalent
officer) of the banking entity certifies in writing
annually (with a duty to update the certification if
the information in the certification materially changes)
that the conditions specified in subsection (d)(1)(g)(v)
are satisfied; and
‘‘(iii) the Board has determined that such transaction is consistent with the safe and sound operation
and condition of the banking entity.
‘‘(B) TREATMENT OF PRIME BROKERAGE TRANSACTIONS.—
For purposes of subparagraph (A), a prime brokerage transaction described in subparagraph (A) shall be subject to
section 23B of the Federal Reserve Act (12 U.S.C. 371c1) as if the counterparty were an affiliate of the banking
entity.

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124 STAT. 1629

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‘‘(4) APPLICATION TO NONBANK FINANCIAL COMPANIES SUPERVISED BY THE BOARD.—The appropriate Federal banking agen-

Regulations.

cies, the Securities and Exchange Commission, and the Commodity Futures Trading Commission shall adopt rules, as provided in subsection (b)(2), imposing additional capital charges
or other restrictions for nonbank financial companies supervised
by the Board to address the risks to and conflicts of interest
of banking entities described in paragraphs (1), (2), and (3)
of this subsection.
‘‘(g) RULES OF CONSTRUCTION.—
‘‘(1) LIMITATION ON CONTRARY AUTHORITY.—Except as provided in this section, notwithstanding any other provision of
law, the prohibitions and restrictions under this section shall
apply to activities of a banking entity or nonbank financial
company supervised by the Board, even if such activities are
authorized for a banking entity or nonbank financial company
supervised by the Board.
‘‘(2) SALE OR SECURITIZATION OF LOANS.—Nothing in this
section shall be construed to limit or restrict the ability of
a banking entity or nonbank financial company supervised
by the Board to sell or securitize loans in a manner otherwise
permitted by law.
‘‘(3) AUTHORITY OF FEDERAL AGENCIES AND STATE REGULATORY AUTHORITIES.—Nothing in this section shall be construed to limit the inherent authority of any Federal agency
or State regulatory authority under otherwise applicable provisions of law.
‘‘(h) DEFINITIONS.—In this section, the following definitions
shall apply:
‘‘(1) BANKING ENTITY.—The term ‘banking entity’ means
any insured depository institution (as defined in section 3 of
the Federal Deposit Insurance Act (12 U.S.C. 1813)), any company that controls an insured depository institution, or that
is treated as a bank holding company for purposes of section
8 of the International Banking Act of 1978, and any affiliate
or subsidiary of any such entity. For purposes of this paragraph,
the term ‘insured depository institution’ does not include an
institution that functions solely in a trust or fiduciary capacity,
if—
‘‘(A) all or substantially all of the deposits of such
institution are in trust funds and are received in a bona
fide fiduciary capacity;
‘‘(B) no deposits of such institution which are insured
by the Federal Deposit Insurance Corporation are offered
or marketed by or through an affiliate of such institution;
‘‘(C) such institution does not accept demand deposits
or deposits that the depositor may withdraw by check
or similar means for payment to third parties or others
or make commercial loans; and
‘‘(D) such institution does not—
‘‘(i) obtain payment or payment related services
from any Federal Reserve bank, including any service
referred to in section 11A of the Federal Reserve Act
(12 U.S.C. 248a); or
‘‘(ii) exercise discount or borrowing privileges
pursuant to section 19(b)(7) of the Federal Reserve
Act (12 U.S.C. 461(b)(7)).

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124 STAT. 1630

PUBLIC LAW 111–203—JULY 21, 2010
‘‘(2) HEDGE FUND; PRIVATE EQUITY FUND.—The terms ‘hedge
fund’ and ‘private equity fund’ mean an issuer that would
be an investment company, as defined in the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.), but for section
3(c)(1) or 3(c)(7) of that Act, or such similar funds as the
appropriate Federal banking agencies, the Securities and
Exchange Commission, and the Commodity Futures Trading
Commission may, by rule, as provided in subsection (b)(2),
determine.
‘‘(3) NONBANK FINANCIAL COMPANY SUPERVISED BY THE
BOARD.—The term ‘nonbank financial company supervised by
the Board’ means a nonbank financial company supervised
by the Board of Governors, as defined in section 102 of the
Financial Stability Act of 2010.
‘‘(4) PROPRIETARY TRADING.—The term ‘proprietary trading’,
when used with respect to a banking entity or nonbank financial
company supervised by the Board, means engaging as a principal for the trading account of the banking entity or nonbank
financial company supervised by the Board in any transaction
to purchase or sell, or otherwise acquire or dispose of, any
security, any derivative, any contract of sale of a commodity
for future delivery, any option on any such security, derivative,
or contract, or any other security or financial instrument that
the appropriate Federal banking agencies, the Securities and
Exchange Commission, and the Commodity Futures Trading
Commission may, by rule as provided in subsection (b)(2), determine.
‘‘(5) SPONSOR.—The term to ‘sponsor’ a fund means—
‘‘(A) to serve as a general partner, managing member,
or trustee of a fund;
‘‘(B) in any manner to select or to control (or to have
employees, officers, or directors, or agents who constitute)
a majority of the directors, trustees, or management of
a fund; or
‘‘(C) to share with a fund, for corporate, marketing,
promotional, or other purposes, the same name or a variation of the same name.
‘‘(6) TRADING ACCOUNT.—The term ‘trading account’ means
any account used for acquiring or taking positions in the securities and instruments described in paragraph (4) principally
for the purpose of selling in the near term (or otherwise with
the intent to resell in order to profit from short-term price
movements), and any such other accounts as the appropriate
Federal banking agencies, the Securities and Exchange
Commission, and the Commodity Futures Trading Commission
may, by rule as provided in subsection (b)(2), determine.
‘‘(7) ILLIQUID FUND.—
‘‘(A) IN GENERAL.—The term ‘illiquid fund’ means a
hedge fund or private equity fund that—
‘‘(i) as of May 1, 2010, was principally invested
in, or was invested and contractually committed to
principally invest in, illiquid assets, such as portfolio
companies, real estate investments, and venture capital investments; and
‘‘(ii) makes all investments pursuant to, and consistent with, an investment strategy to principally
invest in illiquid assets. In issuing rules regarding

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1631

this subparagraph, the Board shall take into consideration the terms of investment for the hedge fund or
private equity fund, including contractual obligations,
the ability of the fund to divest of assets held by
the fund, and any other factors that the Board determines are appropriate.
‘‘(B) HEDGE FUND.—For the purposes of this paragraph,
the term ‘hedge fund’ means any fund identified under
subsection (h)(2), and does not include a private equity
fund, as such term is used in section 203(m) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-3(m)).’’.
SEC. 620. STUDY OF BANK INVESTMENT ACTIVITIES.

(a) STUDY.—
(1) IN GENERAL.—Not later than 18 months after the date
of enactment of this Act, the appropriate Federal banking agencies shall jointly review and prepare a report on the activities
that a banking entity, as such term is defined in the Bank
Holding Company Act of 1956 (12 U.S.C. 1841 et. seq.), may
engage in under Federal and State law, including activities
authorized by statute and by order, interpretation and guidance.
(2) CONTENT.—In carrying out the study under paragraph
(1), the appropriate Federal banking agencies shall review and
consider—
(A) the type of activities or investments;
(B) any financial, operational, managerial, or reputation risks associated with or presented as a result of the
banking entity engaged in the activity or making the investment; and
(C) risk mitigation activities undertaken by the
banking entity with regard to the risks.
(b) REPORT AND RECOMMENDATIONS TO THE COUNCIL AND TO
CONGRESS.—The appropriate Federal banking agencies shall submit
to the Council, the Committee on Financial Services of the House
of Representatives, and the Committee on Banking, Housing, and
Urban Affairs of the Senate the study conducted pursuant to subsection (a) no later than 2 months after its completion. In addition
to the information described in subsection (a), the report shall
include recommendations regarding—
(1) whether each activity or investment has or could have
a negative effect on the safety and soundness of the banking
entity or the United States financial system;
(2) the appropriateness of the conduct of each activity or
type of investment by banking entities; and
(3) additional restrictions as may be necessary to address
risks to safety and soundness arising from the activities or
types of investments described in subsection (a).

Deadline.

SEC. 621. CONFLICTS OF INTEREST.

(a) IN GENERAL.—The Securities Act of 1933 (15 U.S.C. 77a
et seq.) is amended by inserting after section 27A the following:

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‘‘SEC.

27B.

CONFLICTS OF INTEREST
SECURITIZATIONS.

RELATING

TO

CERTAIN

15 USC 77z–2a.

‘‘(a) IN GENERAL.—An underwriter, placement agent, initial
purchaser, or sponsor, or any affiliate or subsidiary of any such
entity, of an asset-backed security (as such term is defined in

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124 STAT. 1632

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15 USC 77z–2a
note.

PUBLIC LAW 111–203—JULY 21, 2010

section 3 of the Securities and Exchange Act of 1934 (15 U.S.C.
78c), which for the purposes of this section shall include a synthetic
asset-backed security), shall not, at any time for a period ending
on the date that is one year after the date of the first closing
of the sale of the asset-backed security, engage in any transaction
that would involve or result in any material conflict of interest
with respect to any investor in a transaction arising out of such
activity.
‘‘(b) RULEMAKING.—Not later than 270 days after the date
of enactment of this section, the Commission shall issue rules
for the purpose of implementing subsection (a).
‘‘(c) EXCEPTION.—The prohibitions of subsection (a) shall not
apply to—
‘‘(1) risk-mitigating hedging activities in connection with
positions or holdings arising out of the underwriting, placement,
initial purchase, or sponsorship of an asset-backed security,
provided that such activities are designed to reduce the specific
risks to the underwriter, placement agent, initial purchaser,
or sponsor associated with positions or holdings arising out
of such underwriting, placement, initial purchase, or sponsorship; or
‘‘(2) purchases or sales of asset-backed securities made
pursuant to and consistent with—
‘‘(A) commitments of the underwriter, placement agent,
initial purchaser, or sponsor, or any affiliate or subsidiary
of any such entity, to provide liquidity for the asset-backed
security, or
‘‘(B) bona fide market-making in the asset backed security.
‘‘(d) RULE OF CONSTRUCTION.—This subsection shall not otherwise limit the application of section 15G of the Securities Exchange
Act of 1934.’’.
(b) EFFECTIVE DATE.—Section 27B of the Securities Act of 1933,
as added by this section, shall take effect on the effective date
of final rules issued by the Commission under subsection (b) of
such section 27B, except that subsections (b) and (d) of such section
27B shall take effect on the date of enactment of this Act.
SEC. 622. CONCENTRATION LIMITS ON LARGE FINANCIAL FIRMS.

The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et
seq.) is amended by adding at the end the following:

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12 USC 1852.

‘‘SEC. 14. CONCENTRATION LIMITS ON LARGE FINANCIAL FIRMS.

‘‘(a) DEFINITIONS.—In this section—
‘‘(1) the term ‘Council’ means the Financial Stability Oversight Council;
‘‘(2) the term ‘financial company’ means—
‘‘(A) an insured depository institution;
‘‘(B) a bank holding company;
‘‘(C) a savings and loan holding company;
‘‘(D) a company that controls an insured depository
institution;
‘‘(E) a nonbank financial company supervised by the
Board under title I of the Dodd-Frank Wall Street Reform
and Consumer Protection Act; and
‘‘(F) a foreign bank or company that is treated as
a bank holding company for purposes of this Act; and
‘‘(3) the term ‘liabilities’ means—

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124 STAT. 1633

‘‘(A) with respect to a United States financial company—
‘‘(i) the total risk-weighted assets of the financial
company, as determined under the risk-based capital
rules applicable to bank holding companies, as adjusted
to reflect exposures that are deducted from regulatory
capital; less
‘‘(ii) the total regulatory capital of the financial
company under the risk-based capital rules applicable
to bank holding companies;
‘‘(B) with respect to a foreign-based financial company—
‘‘(i) the total risk-weighted assets of the United
States operations of the financial company, as determined under the applicable risk-based capital rules,
as adjusted to reflect exposures that are deducted from
regulatory capital; less
‘‘(ii) the total regulatory capital of the United
States operations of the financial company, as determined under the applicable risk-based capital rules;
and
‘‘(C) with respect to an insurance company or other
nonbank financial company supervised by the Board, such
assets of the company as the Board shall specify by rule,
in order to provide for consistent and equitable treatment
of such companies.
‘‘(b) CONCENTRATION LIMIT.—Subject to the recommendations
by the Council under subsection (e), a financial company may not
merge or consolidate with, acquire all or substantially all of the
assets of, or otherwise acquire control of, another company, if the
total consolidated liabilities of the acquiring financial company upon
consummation of the transaction would exceed 10 percent of the
aggregate consolidated liabilities of all financial companies at the
end of the calendar year preceding the transaction.
‘‘(c) EXCEPTION TO CONCENTRATION LIMIT.—With the prior written consent of the Board, the concentration limit under subsection
(b) shall not apply to an acquisition—
‘‘(1) of a bank in default or in danger of default;
‘‘(2) with respect to which assistance is provided by the
Federal Deposit Insurance Corporation under section 13(c) of
the Federal Deposit Insurance Act (12 U.S.C. 1823(c)); or
‘‘(3) that would result only in a de minimis increase in
the liabilities of the financial company.
‘‘(d) RULEMAKING AND GUIDANCE.—The Board shall issue regulations implementing this section in accordance with the recommendations of the Council under subsection (e), including the
definition of terms, as necessary. The Board may issue interpretations or guidance regarding the application of this section to an
individual financial company or to financial companies in general.
‘‘(e) COUNCIL STUDY AND RULEMAKING.—
‘‘(1) STUDY AND RECOMMENDATIONS.—Not later than 6
months after the date of enactment of this section, the Council
shall—
‘‘(A) complete a study of the extent to which the concentration limit under this section would affect financial
stability, moral hazard in the financial system, the efficiency and competitiveness of United States financial firms

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PUBLIC LAW 111–203—JULY 21, 2010
and financial markets, and the cost and availability of
credit and other financial services to households and
businesses in the United States; and
‘‘(B) make recommendations regarding any modifications to the concentration limit that the Council determines
would more effectively implement this section.
‘‘(2) RULEMAKING.—Not later than 9 months after the date
of completion of the study under paragraph (1), and notwithstanding subsections (b) and (d), the Board shall issue final
regulations implementing this section, which shall reflect any
recommendations by the Council under paragraph (1)(B).’’.

Deadline.

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SEC. 623. INTERSTATE MERGER TRANSACTIONS.

(a) INTERSTATE MERGER TRANSACTIONS.—Section 18(c) of the
Federal Deposit Insurance Act (12 U.S.C. 1828(c)) is amended by
adding at the end the following:
‘‘(13)(A) Except as provided in subparagraph (B), the responsible
agency may not approve an application for an interstate merger
transaction if the resulting insured depository institution (including
all insured depository institutions which are affiliates of the
resulting insured depository institution), upon consummation of
the transaction, would control more than 10 percent of the total
amount of deposits of insured depository institutions in the United
States.
‘‘(B) Subparagraph (A) shall not apply to an interstate merger
transaction that involves 1 or more insured depository institutions
in default or in danger of default, or with respect to which the
Corporation provides assistance under section 13.
‘‘(C) In this paragraph—
‘‘(i) the term ‘interstate merger transaction’ means a merger
transaction involving 2 or more insured depository institutions
that have different home States and that are not affiliates;
and
‘‘(ii) the term ‘home State’ means—
‘‘(I) with respect to a national bank, the State in which
the main office of the bank is located;
‘‘(II) with respect to a State bank or State savings
association, the State by which the State bank or State
savings association is chartered; and
‘‘(III) with respect to a Federal savings association,
the State in which the home office (as defined by the
regulations of the Director of the Office of Thrift Supervision, or, on and after the transfer date, the Comptroller
of the Currency) of the Federal savings association is
located.’’.
(b) ACQUISITIONS BY BANK HOLDING COMPANIES.—
(1) IN GENERAL.—Section 4 of the Bank Holding Company
Act of 1956 (12 U.S.C. 1843) is amended—
(A) in subsection (i), by adding at the end the following:
‘‘(8) INTERSTATE ACQUISITIONS.—
‘‘(A) IN GENERAL.—The Board may not approve an
application by a bank holding company to acquire an
insured depository institution under subsection (c)(8) or
any other provision of this Act if—
‘‘(i) the home State of such insured depository
institution is a State other than the home State of
the bank holding company; and

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124 STAT. 1635

‘‘(ii) the applicant (including all insured depository
institutions which are affiliates of the applicant) controls, or upon consummation of the transaction would
control, more than 10 percent of the total amount
of deposits of insured depository institutions in the
United States.
‘‘(B) EXCEPTION.—Subparagraph (A) shall not apply
to an acquisition that involves an insured depository
institution in default or in danger of default, or with respect
to which the Federal Deposit Insurance Corporation provides assistance under section 13 of the Federal Deposit
Insurance Act (12 U.S.C. 1823).’’; and
(B) in subsection (k)(6)(B), by striking ‘‘savings association’’ and inserting ‘‘insured depository institution’’.
(2) DEFINITIONS.—Section 2(o)(4) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(o)(4)) is amended—
(A) in subparagraph (B), by striking ‘‘and’’ at the end;
(B) in subparagraph (C)(ii), by striking the period at
the end and inserting a semicolon; and
(C) by adding at the end the following:
‘‘(D) with respect to a State savings association, the
State by which the savings association is chartered; and
‘‘(E) with respect to a Federal savings association, the
State in which the home office (as defined by the regulations of the Director of the Office of Thrift Supervision,
or, on and after the transfer date, the Comptroller of the
Currency) of the Federal savings association is located.’’.
(c) ACQUISITIONS BY SAVINGS AND LOAN HOLDING COMPANIES.—
Section 10(e)(2) of the Home Owners’ Loan Act (12 U.S.C.
1467a(e)(2)) is amended—
(1) in paragraph (2)—
(A) in subparagraph (C), by striking ‘‘or’’ at the end;
(B) in subparagraph (D), by striking the period at
the end and inserting ‘‘, or’’; and
(C) by adding at the end the following:
‘‘(E) in the case of an application by a savings and
loan holding company to acquire an insured depository
institution, if—
‘‘(i) the home State of the insured depository
institution is a State other than the home State of
the savings and loan holding company;
‘‘(ii) the applicant (including all insured depository
institutions which are affiliates of the applicant) controls, or upon consummation of the transaction would
control, more than 10 percent of the total amount
of deposits of insured depository institutions in the
United States; and
‘‘(iii) the acquisition does not involve an insured
depository institution in default or in danger of default,
or with respect to which the Federal Deposit Insurance
Corporation provides assistance under section 13 of
the Federal Deposit Insurance Act (12 U.S.C. 1823).’’;
and
(2) by adding at the end the following:
‘‘(7) DEFINITIONS.—For purposes of paragraph (2)(E)—
‘‘(A) the terms ‘default’, ‘in danger of default’, and
‘insured depository institution’ have the same meanings

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PUBLIC LAW 111–203—JULY 21, 2010
as in section 3 of the Federal Deposit Insurance Act (12
U.S.C. 1813); and
‘‘(B) the term ‘home State’ means—
‘‘(i) with respect to a national bank, the State
in which the main office of the bank is located;
‘‘(ii) with respect to a State bank or State savings
association, the State by which the savings association
is chartered;
‘‘(iii) with respect to a Federal savings association,
the State in which the home office (as defined by
the regulations of the Director of the Office of Thrift
Supervision, or, on and after the transfer date, the
Comptroller of the Currency) of the Federal savings
association is located; and
‘‘(iv) with respect to a savings and loan holding
company, the State in which the amount of total
deposits of all insured depository institution subsidiaries of such company was the greatest on the date
on which the company became a savings and loan
holding company.’’.

SEC. 624. QUALIFIED THRIFT LENDERS.

Section 10(m)(3) of the Home Owners’ Loan Act (12 U.S.C.
1467a(m)(3)) is amended—
(1) by striking subparagraph (A) and inserting the following:
‘‘(A) IN GENERAL.—A savings association that fails to
become or remain a qualified thrift lender shall immediately be subject to the restrictions under subparagraph
(B).’’; and
(2) in subparagraph (B)(i), by striking subclause (III) and
inserting the following:
‘‘(III) DIVIDENDS.—The savings association
may not pay dividends, except for dividends that—
‘‘(aa) would be permissible for a national
bank;
‘‘(bb) are necessary to meet obligations of
a company that controls such savings association; and
‘‘(cc) are specifically approved by the
Comptroller of the Currency and the Board
after a written request submitted to the Comptroller of the Currency and the Board by the
savings association not later than 30 days
before the date of the proposed payment.
‘‘(IV) REGULATORY AUTHORITY.—A savings
association that fails to become or remain a qualified thrift lender shall be deemed to have violated
section 5 of the Home Owners’ Loan Act (12 U.S.C.
1464) and subject to actions authorized by section
5(d) of the Home Owners’ Loan Act (12 U.S.C.
1464(d)).’’.

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SEC. 625. TREATMENT OF DIVIDENDS BY CERTAIN MUTUAL HOLDING
COMPANIES.

(a) IN GENERAL.—Section 10(o) of the Home Owners’ Loan
Act (12 U.S.C. 1467a(o) is amended by adding at the end the
following:

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1637

‘‘(11) DIVIDENDS.—
‘‘(A) DECLARATION OF DIVIDENDS.—
‘‘(i) ADVANCE NOTICE REQUIRED.—Each subsidiary
of a mutual holding company that is a savings association shall give the appropriate Federal banking agency
and the Board notice not later than 30 days before
the date of a proposed declaration by the board of
directors of the savings association of any dividend
on the guaranty, permanent, or other nonwithdrawable
stock of the savings association.
‘‘(ii) INVALID DIVIDENDS.—Any dividend described
in clause (i) that is declared without giving notice
to the appropriate Federal banking agency and the
Board under clause (i), or that is declared during the
30-day period preceding the date of a proposed declaration for which notice is given to the appropriate Federal
banking agency and the Board under clause (i), shall
be invalid and shall confer no rights or benefits upon
the holder of any such stock.
‘‘(B) WAIVER OF DIVIDENDS.—A mutual holding company may waive the right to receive any dividend declared
by a subsidiary of the mutual holding company, if—
‘‘(i) no insider of the mutual holding company,
associate of an insider, or tax-qualified or non-taxqualified employee stock benefit plan of the mutual
holding company holds any share of the stock in the
class of stock to which the waiver would apply; or
‘‘(ii) the mutual holding company gives written
notice to the Board of the intent of the mutual holding
company to waive the right to receive dividends, not
later than 30 days before the date of the proposed
date of payment of the dividend, and the Board does
not object to the waiver.
‘‘(C) RESOLUTION INCLUDED IN WAIVER NOTICE.—A
notice of a waiver under subparagraph (B) shall include
a copy of the resolution of the board of directors of the
mutual holding company, in such form and substance as
the Board may determine, together with any supporting
materials relied upon by the board of directors of the
mutual holding company, concluding that the proposed dividend waiver is consistent with the fiduciary duties of the
board of directors to the mutual members of the mutual
holding company.
‘‘(D) STANDARDS FOR WAIVER OF DIVIDEND.—The Board
may not object to a waiver of dividends under subparagraph
(B) if—
‘‘(i) the waiver would not be detrimental to the
safe and sound operation of the savings association;
‘‘(ii) the board of directors of the mutual holding
company expressly determines that a waiver of the
dividend by the mutual holding company is consistent
with the fiduciary duties of the board of directors to
the mutual members of the mutual holding company;
and
‘‘(iii) the mutual holding company has, prior to
December 1, 2009—

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12 USC 1467a
note.

PUBLIC LAW 111–203—JULY 21, 2010

‘‘(I) reorganized into a mutual holding company under subsection (o);
‘‘(II) issued minority stock either from its midtier stock holding company or its subsidiary stock
savings association; and
‘‘(III) waived dividends it had a right to receive
from the subsidiary stock savings association.
‘‘(E) VALUATION.—
‘‘(i) IN GENERAL.—The appropriate Federal banking
agency shall consider waived dividends in determining
an appropriate exchange ratio in the event of a full
conversion to stock form.
‘‘(ii) EXCEPTION.—In the case of a savings association that has reorganized into a mutual holding company, has issued minority stock from a mid-tier stock
holding company or a subsidiary stock savings association of the mutual holding company, and has waived
dividends it had a right to receive from a subsidiary
savings association before December 1, 2009, the appropriate Federal banking agency shall not consider
waived dividends in determining an appropriate
exchange ratio in the event of a full conversion to
stock form.’’.
(b) EFFECTIVE DATE.—The amendment made by subsection (a)
shall take effect on the transfer date.
SEC. 626. INTERMEDIATE HOLDING COMPANIES.

The Home Owners’ Loan Act (12 U.S.C. 1461 et seq.) is
amended by inserting after section 10 (12 U.S.C. 1467a) the following new section:
12 USC 1467b.

‘‘SEC. 10A. INTERMEDIATE HOLDING COMPANIES.

‘‘(a) DEFINITION.—For purposes of this section:
‘‘(1) FINANCIAL ACTIVITIES.—The term ‘financial activities’
means activities described in clauses (i) and (ii) of section
10(c)(9)(A).
‘‘(2) GRANDFATHERED UNITARY SAVINGS AND LOAN HOLDING
COMPANY.—The term ‘grandfathered unitary savings and loan
holding company’ means a company described in section
10(c)(9)(C).
‘‘(3) INTERNAL FINANCIAL ACTIVITIES.—The term ‘internal
financial activities’ includes—
‘‘(A) internal financial activities conducted by a grandfathered savings and loan holding company or any affiliate;
and
‘‘(B) internal treasury, investment, and employee benefit functions.
‘‘(b) REQUIREMENT.—
‘‘(1) IN GENERAL.—
‘‘(A) ACTIVITIES OTHER THAN FINANCIAL ACTIVITIES.—
If a grandfathered unitary savings and loan holding company conducts activities other than financial activities, the
Board may require such company to establish and conduct
all or a portion of such financial activities in or through
an intermediate holding company, which shall be a savings
and loan holding company, established pursuant to regulations of the Board, not later than 90 days (or such longer

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124 STAT. 1639

period as the Board may deem appropriate) after the
transfer date.
‘‘(B) OTHER ACTIVITIES.—Notwithstanding subparagraph (A), the Board shall require a grandfathered unitary
savings and loan holding company to establish an intermediate holding company if the Board makes a determination that the establishment of such intermediate holding
company is necessary—
‘‘(i) to appropriately supervise activities that are
determined to be financial activities; or
‘‘(ii) to ensure that supervision by the Board does
not extend to the activities of such company that are
not financial activities.
‘‘(2) INTERNAL FINANCIAL ACTIVITIES.—
‘‘(A) TREATMENT OF INTERNAL FINANCIAL ACTIVITIES.—
For purposes of this subsection, the internal financial
activities of a grandfathered unitary savings and loan
holding company shall not be required to be placed in
an intermediate holding company.
‘‘(B) GRANDFATHERED ACTIVITIES.—A grandfathered
unitary savings and loan holding company may continue
to engage in an internal financial activity, subject to review
by the Board to determine whether engaging in such
activity presents undue risk to the grandfathered unitary
savings and loan holding company or to the financial stability of the United States, if—
‘‘(i) the grandfathered unitary savings and loan
holding company engaged in the activity during the
year before the date of enactment of this section; and
‘‘(ii) at least 2⁄3 of the assets or 2⁄3 of the revenues
generated from the activity are from or attributable
to the grandfathered unitary savings and loan holding
company.
‘‘(3) SOURCE OF STRENGTH.—A grandfathered unitary
savings and loan holding company that directly or indirectly
controls an intermediate holding company established under
this section shall serve as a source of strength to its subsidiary
intermediate holding company.
‘‘(4) PARENT COMPANY REPORTS.—The Board, may from time
to time, examine and require reports under oath from a grandfathered unitary savings and loan holding company that controls an intermediate holding company, and from the appropriate officers or directors of such company, solely for purposes
of ensuring compliance with the provisions of this section,
including assessing the ability of the company to serve as
a source of strength to its subsidiary intermediate holding
company as required under paragraph (3) and enforcing compliance with such requirement.
‘‘(5) LIMITED PARENT COMPANY ENFORCEMENT.—
‘‘(A) IN GENERAL.—In addition to any other authority
of the Board, the Board may enforce compliance with the
provisions of this subsection that are applicable to any
company described in paragraph (1)(A) that controls an
intermediate holding company under section 8 of the Federal Deposit Insurance Act, and a company described in
paragraph (1)(A) shall be subject to such section (solely
for purposes of this subparagraph) in the same manner

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124 STAT. 1640

PUBLIC LAW 111–203—JULY 21, 2010
and to the same extent as if the company described in
paragraph (1)(A) were a savings and loan holding company.
‘‘(B) APPLICATION OF OTHER ACT.—Any violation of this
subsection by a grandfathered unitary savings and loan
holding company that controls an intermediate holding
company may also be treated as a violation of the Federal
Deposit Insurance Act for purposes of subparagraph (A).
‘‘(C) NO EFFECT ON OTHER AUTHORITY.—No provision
of this paragraph shall be construed as limiting any
authority of the Board or any other Federal agency under
any other provision of law.
‘‘(c) REGULATIONS.—The Board—
‘‘(1) shall promulgate regulations to establish the criteria
for determining whether to require a grandfathered unitary
savings and loan holding company to establish an intermediate
holding company under subsection (b); and
‘‘(2) may promulgate regulations to establish any restrictions or limitations on transactions between an intermediate
holding company or a parent of such company and its affiliates,
as necessary to prevent unsafe and unsound practices in connection with transactions between the intermediate holding company, or any subsidiary thereof, and its parent company or
affiliates that are not subsidiaries of the intermediate holding
company, except that such regulations shall not restrict or
limit any transaction in connection with the bona fide acquisition or lease by an unaffiliated person of assets, goods, or
services.
‘‘(d) RULES OF CONSTRUCTION.—
‘‘(1) ACTIVITIES.—Nothing in this section shall be construed
to require a grandfathered unitary savings and loan holding
company to conform its activities to permissible activities.
‘‘(2) PERMISSIBLE CORPORATE REORGANIZATION.—The formation of an intermediate holding company as required in subsection (b) shall be presumed to be a permissible corporate
reorganization as described in section 10(c)(9)(D).’’.

SEC. 627. INTEREST-BEARING TRANSACTION ACCOUNTS AUTHORIZED.

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12 USC 371a
note.

(a) REPEAL OF PROHIBITION ON PAYMENT OF INTEREST ON
DEMAND DEPOSITS.—
(1) FEDERAL RESERVE ACT.—Section 19(i) of the Federal
Reserve Act (12 U.S.C. 371a) is amended to read as follows:
‘‘(i) [Repealed]’’.
(2) HOME OWNERS’ LOAN ACT.—The first sentence of section
5(b)(1)(B) of the Home Owners’ Loan Act (12 U.S.C.
1464(b)(1)(B)) is amended by striking ‘‘savings association may
not—’’ and all that follows through ‘‘(ii) permit any’’ and
inserting ‘‘savings association may not permit any’’.
(3) FEDERAL DEPOSIT INSURANCE ACT.—Section 18(g) of the
Federal Deposit Insurance Act (12 U.S.C. 1828(g)) is amended
to read as follows:
‘‘(g) [Repealed]’’.
(b) EFFECTIVE DATE.—The amendments made by subsection
(a) shall take effect 1 year after the date of the enactment of
this Act.
SEC. 628. CREDIT CARD BANK SMALL BUSINESS LENDING.

Section 2(c)(2)(F)(v) of the Bank Holding Company Act of 1956
(12 U.S.C. 1841(c)(2)(F)(v)) is amended by inserting before the

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124 STAT. 1641

period the following: ‘‘, other than credit card loans that are made
to businesses that meet the criteria for a small business concern
to be eligible for business loans under regulations established by
the Small Business Administration under part 121 of title 13,
Code of Federal Regulations’’.

TITLE VII—WALL STREET
TRANSPARENCY AND ACCOUNTABILITY
SEC. 701. SHORT TITLE.

This title may be cited as the ‘‘Wall Street Transparency and
Accountability Act of 2010’’.

Wall Street
Transparency
and
Accountability
Act of 2010.
15 USC 8301
note.

Subtitle A—Regulation of Over-theCounter Swaps Markets
PART I—REGULATORY AUTHORITY
SEC. 711. DEFINITIONS.

15 USC 8301.

In this subtitle, the terms ‘‘prudential regulator’’, ‘‘swap’’, ‘‘swap
dealer’’, ‘‘major swap participant’’, ‘‘swap data repository’’, ‘‘associated person of a swap dealer or major swap participant’’, ‘‘eligible
contract participant’’, ‘‘swap execution facility’’, ‘‘security-based
swap’’, ‘‘security-based swap dealer’’, ‘‘major security-based swap
participant’’, and ‘‘associated person of a security-based swap dealer
or major security-based swap participant’’ have the meanings given
the terms in section 1a of the Commodity Exchange Act (7 U.S.C.
1a), including any modification of the meanings under section 721(b)
of this Act.

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SEC. 712. REVIEW OF REGULATORY AUTHORITY.

15 USC 8302.

(a) CONSULTATION.—
(1) COMMODITY FUTURES TRADING COMMISSION.—Before
commencing any rulemaking or issuing an order regarding
swaps, swap dealers, major swap participants, swap data
repositories, derivative clearing organizations with regard to
swaps, persons associated with a swap dealer or major swap
participant, eligible contract participants, or swap execution
facilities pursuant to this subtitle, the Commodity Futures
Trading Commission shall consult and coordinate to the extent
possible with the Securities and Exchange Commission and
the prudential regulators for the purposes of assuring regulatory consistency and comparability, to the extent possible.
(2) SECURITIES AND EXCHANGE COMMISSION.—Before commencing any rulemaking or issuing an order regarding securitybased swaps, security-based swap dealers, major security-based
swap participants, security-based swap data repositories,
clearing agencies with regard to security-based swaps, persons
associated with a security-based swap dealer or major securitybased swap participant, eligible contract participants with
regard to security-based swaps, or security-based swap execution facilities pursuant to subtitle B, the Securities and
Exchange Commission shall consult and coordinate to the

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PUBLIC LAW 111–203—JULY 21, 2010
extent possible with the Commodity Futures Trading Commission and the prudential regulators for the purposes of assuring
regulatory consistency and comparability, to the extent possible.
(3) PROCEDURES AND DEADLINE.—Such regulations shall
be prescribed in accordance with applicable requirements of
title 5, United States Code, and shall be issued in final form
not later than 360 days after the date of enactment of this
Act.
(4) APPLICABILITY.—The requirements of paragraphs (1)
and (2) shall not apply to an order issued—
(A) in connection with or arising from a violation or
potential violation of any provision of the Commodity
Exchange Act (7 U.S.C. 1 et seq.);
(B) in connection with or arising from a violation or
potential violation of any provision of the securities laws;
or
(C) in any proceeding that is conducted on the record
in accordance with sections 556 and 557 of title 5, United
States Code.
(5) EFFECT.—Nothing in this subsection authorizes any
consultation or procedure for consultation that is not consistent
with the requirements of subchapter II of chapter 5, and chapter
7, of title 5, United States Code (commonly known as the
‘‘Administrative Procedure Act’’).
(6) RULES; ORDERS.—In developing and promulgating rules
or orders pursuant to this subsection, each Commission shall
consider the views of the prudential regulators.
(7) TREATMENT OF SIMILAR PRODUCTS AND ENTITIES.—
(A) IN GENERAL.—In adopting rules and orders under
this subsection, the Commodity Futures Trading Commission and the Securities and Exchange Commission shall
treat functionally or economically similar products or entities described in paragraphs (1) and (2) in a similar
manner.
(B) EFFECT.—Nothing in this subtitle requires the
Commodity Futures Trading Commission or the Securities
and Exchange Commission to adopt joint rules or orders
that treat functionally or economically similar products
or entities described in paragraphs (1) and (2) in an identical manner.
(8) MIXED SWAPS.—The Commodity Futures Trading
Commission and the Securities and Exchange Commission,
after consultation with the Board of Governors, shall jointly
prescribe such regulations regarding mixed swaps, as described
in section 1a(47)(D) of the Commodity Exchange Act (7 U.S.C.
1a(47)(D)) and in section 3(a)(68)(D) of the Securities Exchange
Act of 1934 (15 U.S.C. 78c(a)(68)(D)), as may be necessary
to carry out the purposes of this title.
(b) LIMITATION.—
(1) COMMODITY FUTURES TRADING COMMISSION.—Nothing
in this title, unless specifically provided, confers jurisdiction
on the Commodity Futures Trading Commission to issue a
rule, regulation, or order providing for oversight or regulation
of—
(A) security-based swaps; or
(B) with regard to its activities or functions concerning
security-based swaps—

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124 STAT. 1643

(i) security-based swap dealers;
(ii) major security-based swap participants;
(iii) security-based swap data repositories;
(iv) associated persons of a security-based swap
dealer or major security-based swap participant;
(v) eligible contract participants with respect to
security-based swaps; or
(vi) swap execution facilities with respect to security-based swaps.
(2) SECURITIES AND EXCHANGE COMMISSION.—Nothing in
this title, unless specifically provided, confers jurisdiction on
the Securities and Exchange Commission or State securities
regulators to issue a rule, regulation, or order providing for
oversight or regulation of—
(A) swaps; or
(B) with regard to its activities or functions concerning
swaps—
(i) swap dealers;
(ii) major swap participants;
(iii) swap data repositories;
(iv) persons associated with a swap dealer or major
swap participant;
(v) eligible contract participants with respect to
swaps; or
(vi) swap execution facilities with respect to swaps.
(3) PROHIBITION ON CERTAIN FUTURES ASSOCIATIONS AND
NATIONAL SECURITIES ASSOCIATIONS.—
(A) FUTURES ASSOCIATIONS.—Notwithstanding any
other provision of law (including regulations), unless otherwise authorized by this title, no futures association registered under section 17 of the Commodity Exchange Act
(7 U.S.C. 21) may issue a rule, regulation, or order for
the oversight or regulation of, or otherwise assert jurisdiction over, for any purpose, any security-based swap, except
that this subparagraph shall not limit the authority of
a registered futures association to examine for compliance
with, and enforce, its rules on capital adequacy.
(B) NATIONAL SECURITIES ASSOCIATIONS.—Notwithstanding any other provision of law (including regulations),
unless otherwise authorized by this title, no national securities association registered under section 15A of the Securities Exchange Act of 1934 (15 U.S.C. 78o–3) may issue
a rule, regulation, or order for the oversight or regulation
of, or otherwise assert jurisdiction over, for any purpose,
any swap, except that this subparagraph shall not limit
the authority of a national securities association to examine
for compliance with, and enforce, its rules on capital adequacy.
(c) OBJECTION TO COMMISSION REGULATION.—
(1) FILING OF PETITION FOR REVIEW.—
(A) IN GENERAL.—If either Commission referred to in
this section determines that a final rule, regulation, or
order of the other Commission conflicts with subsection
(a)(7) or (b), then the complaining Commission may obtain
review of the final rule, regulation, or order in the United
States Court of Appeals for the District of Columbia Circuit
by filing in the court, not later than 60 days after the

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124 STAT. 1644

date of publication of the final rule, regulation, or order,
a written petition requesting that the rule, regulation, or
order be set aside.
(B) EXPEDITED PROCEEDING.—A proceeding described
in subparagraph (A) shall be expedited by the United States
Court of Appeals for the District of Columbia Circuit.
(2) TRANSMITTAL OF PETITION AND RECORD.—
(A) IN GENERAL.—A copy of a petition described in
paragraph (1) shall be transmitted not later than 1 business
day after the date of filing by the complaining Commission
to the Secretary of the responding Commission.
(B) DUTY OF RESPONDING COMMISSION.—On receipt of
the copy of a petition described in paragraph (1), the
responding Commission shall file with the United States
Court of Appeals for the District of Columbia Circuit—
(i) a copy of the rule, regulation, or order under
review (including any documents referred to therein);
and
(ii) any other materials prescribed by the United
States Court of Appeals for the District of Columbia
Circuit.
(3) STANDARD OF REVIEW.—The United States Court of
Appeals for the District of Columbia Circuit shall—
(A) give deference to the views of neither Commission;
and
(B) determine to affirm or set aside a rule, regulation,
or order of the responding Commission under this subsection, based on the determination of the court as to
whether the rule, regulation, or order is in conflict with
subsection (a)(7) or (b), as applicable.
(4) JUDICIAL STAY.—The filing of a petition by the complaining Commission pursuant to paragraph (1) shall operate
as a stay of the rule, regulation, or order until the date on
which the determination of the United States Court of Appeals
for the District of Columbia Circuit is final (including any
appeal of the determination).
(d) JOINT RULEMAKING.—
(1) IN GENERAL.—Notwithstanding any other provision of
this title and subsections (b) and (c), the Commodity Futures
Trading Commission and the Securities and Exchange Commission, in consultation with the Board of Governors, shall further
define the terms ‘‘swap’’, ‘‘security-based swap’’, ‘‘swap dealer’’,
‘‘security-based swap dealer’’, ‘‘major swap participant’’, ‘‘major
security-based swap participant’’, ‘‘eligible contract participant’’,
and ‘‘security-based swap agreement’’ in section 1a(47)(A)(v)
of the Commodity Exchange Act (7 U.S.C. 1a(47)(A)(v)) and
section 3(a)(78) of the Securities Exchange Act of 1934 (15
U.S.C. 78c(a)(78)).
(2) AUTHORITY OF THE COMMISSIONS.—
(A) IN GENERAL.—Notwithstanding any other provision
of this title, the Commodity Futures Trading Commission
and the Securities and Exchange Commission, in consultation with the Board of Governors, shall jointly adopt such
other rules regarding such definitions as the Commodity
Futures Trading Commission and the Securities and

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Exchange Commission determine are necessary and appropriate, in the public interest, and for the protection of
investors.
(B) TRADE REPOSITORY RECORDKEEPING.—Notwithstanding any other provision of this title, the Commodity
Futures Trading Commission and the Securities and
Exchange Commission, in consultation with the Board of
Governors, shall engage in joint rulemaking to jointly adopt
a rule or rules governing the books and records that are
required to be kept and maintained regarding securitybased swap agreements by persons that are registered as
swap data repositories under the Commodity Exchange
Act, including uniform rules that specify the data elements
that shall be collected and maintained by each repository.
(C) BOOKS AND RECORDS.—Notwithstanding any other
provision of this title, the Commodity Futures Trading
Commission and the Securities and Exchange Commission,
in consultation with the Board of Governors, shall engage
in joint rulemaking to jointly adopt a rule or rules governing books and records regarding security-based swap
agreements, including daily trading records, for swap
dealers, major swap participants, security-based swap
dealers, and security-based swap participants.
(D) COMPARABLE RULES.—Rules and regulations prescribed jointly under this title by the Commodity Futures
Trading Commission and the Securities and Exchange
Commission shall be comparable to the maximum extent
possible, taking into consideration differences in
instruments and in the applicable statutory requirements.
(E) TRACKING UNCLEARED TRANSACTIONS.—Any rules
prescribed under subparagraph (A) shall require the
maintenance of records of all activities relating to securitybased swap agreement transactions defined under subparagraph (A) that are not cleared.
(F) SHARING OF INFORMATION.—The Commodity
Futures Trading Commission shall make available to the
Securities and Exchange Commission information relating
to security-based swap agreement transactions defined in
subparagraph (A) that are not cleared.
(3) FINANCIAL STABILITY OVERSIGHT COUNCIL.—In the event
that the Commodity Futures Trading Commission and the Securities and Exchange Commission fail to jointly prescribe rules
pursuant to paragraph (1) or (2) in a timely manner, at the
request of either Commission, the Financial Stability Oversight
Council shall resolve the dispute—
(A) within a reasonable time after receiving the
request;
(B) after consideration of relevant information provided
by each Commission; and
(C) by agreeing with 1 of the Commissions regarding
the entirety of the matter or by determining a compromise
position.
(4) JOINT INTERPRETATION.—Any interpretation of, or guidance by either Commission regarding, a provision of this title,
shall be effective only if issued jointly by the Commodity
Futures Trading Commission and the Securities and Exchange
Commission, after consultation with the Board of Governors,

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if this title requires the Commodity Futures Trading Commission and the Securities and Exchange Commission to issue
joint regulations to implement the provision.
(e) GLOBAL RULEMAKING TIMEFRAME.—Unless otherwise provided in this title, or an amendment made by this title, the Commodity Futures Trading Commission or the Securities and Exchange
Commission, or both, shall individually, and not jointly, promulgate
rules and regulations required of each Commission under this title
or an amendment made by this title not later than 360 days
after the date of enactment of this Act.
(f) RULES AND REGISTRATION BEFORE FINAL EFFECTIVE
DATES.—Beginning on the date of enactment of this Act and notwithstanding the effective date of any provision of this Act, the
Commodity Futures Trading Commission and the Securities and
Exchange Commission may, in order to prepare for the effective
dates of the provisions of this Act—
(1) promulgate rules, regulations, or orders permitted or
required by this Act;
(2) conduct studies and prepare reports and recommendations required by this Act;
(3) register persons under the provisions of this Act; and
(4) exempt persons, agreements, contracts, or transactions
from provisions of this Act, under the terms contained in this
Act,
provided, however, that no action by the Commodity Futures
Trading Commission or the Securities and Exchange Commission
described in paragraphs (1) through (4) shall become effective prior
to the effective date applicable to such action under the provisions
of this Act.
SEC. 713. PORTFOLIO MARGINING CONFORMING CHANGES.

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(a) SECURITIES EXCHANGE ACT OF 1934.—Section 15(c)(3) of
the Securities Exchange Act of 1934 (15 U.S.C. 78o(c)(3)) is amended
by adding at the end the following:
‘‘(C) Notwithstanding any provision of sections
2(a)(1)(C)(i) or 4d(a)(2) of the Commodity Exchange Act
and the rules and regulations thereunder, and pursuant
to an exemption granted by the Commission under section
36 of this title or pursuant to a rule or regulation, cash
and securities may be held by a broker or dealer registered
pursuant to subsection (b)(1) and also registered as a
futures commission merchant pursuant to section 4f(a)(1)
of the Commodity Exchange Act, in a portfolio margining
account carried as a futures account subject to section
4d of the Commodity Exchange Act and the rules and
regulations thereunder, pursuant to a portfolio margining
program approved by the Commodity Futures Trading
Commission, and subject to subchapter IV of chapter 7
of title 11 of the United States Code and the rules and
regulations thereunder. The Commission shall consult with
the Commodity Futures Trading Commission to adopt rules
to ensure that such transactions and accounts are subject
to comparable requirements to the extent practicable for
similar products.’’.
(b) COMMODITY EXCHANGE ACT.—Section 4d of the Commodity
Exchange Act (7 U.S.C. 6d) is amended by adding at the end
the following:

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124 STAT. 1647

‘‘(h) Notwithstanding subsection (a)(2) or the rules and regulations thereunder, and pursuant to an exemption granted by the
Commission under section 4(c) of this Act or pursuant to a rule
or regulation, a futures commission merchant that is registered
pursuant to section 4f(a)(1) of this Act and also registered as a
broker or dealer pursuant to section 15(b)(1) of the Securities
Exchange Act of 1934 may, pursuant to a portfolio margining program approved by the Securities and Exchange Commission pursuant to section 19(b) of the Securities Exchange Act of 1934, hold
in a portfolio margining account carried as a securities account
subject to section 15(c)(3) of the Securities Exchange Act of 1934
and the rules and regulations thereunder, a contract for the purchase or sale of a commodity for future delivery or an option
on such a contract, and any money, securities or other property
received from a customer to margin, guarantee or secure such
a contract, or accruing to a customer as the result of such a
contract. The Commission shall consult with the Securities and
Exchange Commission to adopt rules to ensure that such transactions and accounts are subject to comparable requirements to
the extent practical for similar products.’’.
(c) DUTY OF COMMODITY FUTURES TRADING COMMISSION.—Section 20 of the Commodity Exchange Act (7 U.S.C. 24) is amended
by adding at the end the following:
‘‘(c) The Commission shall exercise its authority to ensure that
securities held in a portfolio margining account carried as a futures
account are customer property and the owners of those accounts
are customers for the purposes of subchapter IV of chapter 7 of
title 11 of the United States Code.’’.

Contracts.

SEC. 714. ABUSIVE SWAPS.

15 USC 8303.

The Commodity Futures Trading Commission or the Securities
and Exchange Commission, or both, individually may, by rule or
order—
(1) collect information as may be necessary concerning
the markets for any types of—
(A) swap (as defined in section 1a of the Commodity
Exchange Act (7 U.S.C. 1a)); or
(B) security-based swap (as defined in section 1a of
the Commodity Exchange Act (7 U.S.C. 1a)); and
(2) issue a report with respect to any types of swaps or
security-based swaps that the Commodity Futures Trading
Commission or the Securities and Exchange Commission determines to be detrimental to—
(A) the stability of a financial market; or
(B) participants in a financial market.

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SEC. 715. AUTHORITY TO PROHIBIT PARTICIPATION IN SWAP ACTIVITIES.

Consultation.

Reports.

15 USC 8304.

Except as provided in section 4 of the Commodity Exchange
Act (7 U.S.C. 6), if the Commodity Futures Trading Commission
or the Securities and Exchange Commission determines that the
regulation of swaps or security-based swaps markets in a foreign
country undermines the stability of the United States financial
system, either Commission, in consultation with the Secretary of
the Treasury, may prohibit an entity domiciled in the foreign
country from participating in the United States in any swap or
security-based swap activities.

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124 STAT. 1648
15 USC 8305.

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PUBLIC LAW 111–203—JULY 21, 2010

SEC. 716. PROHIBITION AGAINST FEDERAL GOVERNMENT BAILOUTS
OF SWAPS ENTITIES.

(a) PROHIBITION ON FEDERAL ASSISTANCE.—Notwithstanding
any other provision of law (including regulations), no Federal assistance may be provided to any swaps entity with respect to any
swap, security-based swap, or other activity of the swaps entity.
(b) DEFINITIONS.—In this section:
(1) FEDERAL ASSISTANCE.—The term ‘‘Federal assistance’’
means the use of any advances from any Federal Reserve
credit facility or discount window that is not part of a program
or facility with broad-based eligibility under section 13(3)(A)
of the Federal Reserve Act, Federal Deposit Insurance Corporation insurance or guarantees for the purpose of—
(A) making any loan to, or purchasing any stock, equity
interest, or debt obligation of, any swaps entity;
(B) purchasing the assets of any swaps entity;
(C) guaranteeing any loan or debt issuance of any
swaps entity; or
(D) entering into any assistance arrangement
(including tax breaks), loss sharing, or profit sharing with
any swaps entity.
(2) SWAPS ENTITY.—
(A) IN GENERAL.—The term ‘‘swaps entity’’ means any
swap dealer, security-based swap dealer, major swap
participant, major security-based swap participant, that
is registered under—
(i) the Commodity Exchange Act (7 U.S.C. 1 et
seq.); or
(ii) the Securities Exchange Act of 1934 (15 U.S.C.
78a et seq.).
(B) EXCLUSION.—The term ‘‘swaps entity’’ does not
include any major swap participant or major security-based
swap participant that is an insured depository institution.
(c) AFFILIATES OF INSURED DEPOSITORY INSTITUTIONS.—The
prohibition on Federal assistance contained in subsection (a) does
not apply to and shall not prevent an insured depository institution
from having or establishing an affiliate which is a swaps entity,
as long as such insured depository institution is part of a bank
holding company, or savings and loan holding company, that is
supervised by the Federal Reserve and such swaps entity affiliate
complies with sections 23A and 23B of the Federal Reserve Act
and such other requirements as the Commodity Futures Trading
Commission or the Securities Exchange Commission, as appropriate, and the Board of Governors of the Federal Reserve System,
may determine to be necessary and appropriate.
(d) ONLY BONA FIDE HEDGING AND TRADITIONAL BANK ACTIVITIES PERMITTED.—The prohibition in subsection (a) shall apply to
any insured depository institution unless the insured depository
institution limits its swap or security-based swap activities to:
(1) Hedging and other similar risk mitigating activities
directly related to the insured depository institution’s activities.
(2) Acting as a swaps entity for swaps or security-based
swaps involving rates or reference assets that are permissible
for investment by a national bank under the paragraph designated as ‘‘Seventh.’’ of section 5136 of the Revised Statutes
of the United States ( 12 U.S.C. 24), other than as described
in paragraph (3).

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1649

(3) LIMITATION ON CREDIT DEFAULT SWAPS.—Acting as a
swaps entity for credit default swaps, including swaps or security-based swaps referencing the credit risk of asset-backed
securities as defined in section 3(a)(77) of the Securities
Exchange Act of 1934 (15 U.S.C. 78c(a)(77)) (as amended by
this Act) shall not be considered a bank permissible activity
for purposes of subsection (d)(2) unless such swaps or securitybased swaps are cleared by a derivatives clearing organization
(as such term is defined in section la of the Commodity
Exchange Act (7 U.S.C. la)) or a clearing agency (as such
term is defined in section 3 of the Securities Exchange Act
(15 U.S.C. 78c)) that is registered, or exempt from registration,
as a derivatives clearing organization under the Commodity
Exchange Act or as a clearing agency under the Securities
Exchange Act, respectively.
(e) EXISTING SWAPS AND SECURITY-BASED SWAPS.—The prohibition in subsection (a) shall only apply to swaps or security-based
swaps entered into by an insured depository institution after the
end of the transition period described in subsection (f).
(f) TRANSITION PERIOD.—To the extent an insured depository
institution qualifies as a ‘‘swaps entity’’ and would be subject to
the Federal assistance prohibition in subsection (a), the appropriate
Federal banking agency, after consulting with and considering the
views of the Commodity Futures Trading Commission or the Securities Exchange Commission, as appropriate, shall permit the insured
depository institution up to 24 months to divest the swaps entity
or cease the activities that require registration as a swaps entity.
In establishing the appropriate transition period to effect such
divestiture or cessation of activities, which may include making
the swaps entity an affiliate of the insured depository institution,
the appropriate Federal banking agency shall take into account
and make written findings regarding the potential impact of such
divestiture or cessation of activities on the insured depository
institution’s (1) mortgage lending, (2) small business lending, (3)
job creation, and (4) capital formation versus the potential negative
impact on insured depositors and the Deposit Insurance Fund of
the Federal Deposit Insurance Corporation. The appropriate Federal
banking agency may consider such other factors as may be appropriate. The appropriate Federal banking agency may place such
conditions on the insured depository institution’s divestiture or
ceasing of activities of the swaps entity as it deems necessary
and appropriate. The transition period under this subsection may
be extended by the appropriate Federal banking agency, after consultation with the Commodity Futures Trading Commission and
the Securities and Exchange Commission, for a period of up to
1 additional year.
(g) EXCLUDED ENTITIES.—For purposes of this section, the term
‘‘swaps entity’’ shall not include any insured depository institution
under the Federal Deposit Insurance Act or a covered financial
company under title II which is in a conservatorship, receivership,
or a bridge bank operated by the Federal Deposit Insurance Corporation.
(h) EFFECTIVE DATE.—The prohibition in subsection (a) shall
be effective 2 years following the date on which this Act is effective.
(i) LIQUIDATION REQUIRED.—
(1) IN GENERAL.—

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124 STAT. 1650

PUBLIC LAW 111–203—JULY 21, 2010

(A) FDIC INSURED INSTITUTIONS.—All swaps entities
that are FDIC insured institutions that are put into
receivership or declared insolvent as a result of swap or
security-based swap activity of the swaps entities shall
be subject to the termination or transfer of that swap
or security-based swap activity in accordance with
applicable law prescribing the treatment of those contracts.
No taxpayer funds shall be used to prevent the receivership
of any swap entity resulting from swap or security-based
swap activity of the swaps entity.
(B) INSTITUTIONS THAT POSE A SYSTEMIC RISK AND ARE
SUBJECT TO HEIGHTENED PRUDENTIAL SUPERVISION AS REGULATED UNDER SECTION 113.—All swaps entities that are
institutions that pose a systemic risk and are subject to
heightened prudential supervision as regulated under section 113, that are put into receivership or declared insolvent
as a result of swap or security-based swap activity of the
swaps entities shall be subject to the termination or
transfer of that swap or security-based swap activity in
accordance with applicable law prescribing the treatment
of those contracts. No taxpayer funds shall be used to
prevent the receivership of any swap entity resulting from
swap or security-based swap activity of the swaps entity.
(C) NON-FDIC INSURED, NON-SYSTEMICALLY SIGNIFICANT INSTITUTIONS NOT SUBJECT TO HEIGHTENED PRUDENTIAL SUPERVISION AS REGULATED UNDER SECTION 113.—No
taxpayer resources shall be used for the orderly liquidation
of any swaps entities that are non-FDIC insured, nonsystemically significant institutions not subject to heightened prudential supervision as regulated under section 113.
(2) RECOVERY OF FUNDS.—All funds expended on the termination or transfer of the swap or security-based swap activity
of the swaps entity shall be recovered in accordance with
applicable law from the disposition of assets of such swap
entity or through assessments, including on the financial sector
as provided under applicable law.
(3) NO LOSSES TO TAXPAYERS.—Taxpayers shall bear no
losses from the exercise of any authority under this title.
(j) PROHIBITION ON UNREGULATED COMBINATION OF SWAPS
ENTITIES AND BANKING.—At no time following adoption of the rules
in subsection (k) may a bank or bank holding company be permitted
to be or become a swap entity unless it conducts its swap or
security-based swap activity in compliance with such minimum
standards set by its prudential regulator as are reasonably calculated to permit the swaps entity to conduct its swap or securitybased swap activities in a safe and sound manner and mitigate
systemic risk.
(k) RULES.—In prescribing rules, the prudential regulator for
a swaps entity shall consider the following factors:
(1) The expertise and managerial strength of the swaps
entity, including systems for effective oversight.
(2) The financial strength of the swaps entity.
(3) Systems for identifying, measuring and controlling risks
arising from the swaps entity’s operations.
(4) Systems for identifying, measuring and controlling the
swaps entity’s participation in existing markets.

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1651

(5) Systems for controlling the swaps entity’s participation
or entry into in new markets and products.
(l) AUTHORITY OF THE FINANCIAL STABILITY OVERSIGHT
COUNCIL.—The Financial Stability Oversight Council may determine that, when other provisions established by this Act are insufficient to effectively mitigate systemic risk and protect taxpayers,
that swaps entities may no longer access Federal assistance with
respect to any swap, security-based swap, or other activity of the
swaps entity. Any such determination by the Financial Stability
Oversight Council of a prohibition of federal assistance shall be
made on an institution-by-institution basis, and shall require the
vote of not fewer than two-thirds of the members of the Financial
Stability Oversight Council, which must include the vote by the
Chairman of the Council, the Chairman of the Board of Governors
of the Federal Reserve System, and the Chairperson of the Federal
Deposit Insurance Corporation. Notice and hearing requirements
for such determinations shall be consistent with the standards
provided in title I.
(m) BAN ON PROPRIETARY TRADING IN DERIVATIVES.—An
insured depository institution shall comply with the prohibition
on proprietary trading in derivatives as required by section 619
of the Dodd-Frank Wall Street Reform and Consumer Protection
Act.
SEC. 717. NEW PRODUCT APPROVAL CFTC—SEC PROCESS.

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(a) AMENDMENTS TO THE COMMODITY EXCHANGE ACT.—Section
2(a)(1)(C) of the Commodity Exchange Act (7 U.S.C. 2(a)(1)(C))
is amended—
(1) in clause (i) by striking ‘‘This’’ and inserting ‘‘(I) Except
as provided in subclause (II), this’’; and
(2) by adding at the end of clause (i) the following:
‘‘(II) This Act shall apply to and the Commission shall have jurisdiction with respect to
accounts, agreements, and transactions involving,
and may permit the listing for trading pursuant
to section 5c(c) of, a put, call, or other option
on 1 or more securities (as defined in section 2(a)(1)
of the Securities Act of 1933 or section 3(a)(10)
of the Securities Exchange Act of 1934 on the
date of enactment of the Futures Trading Act of
1982), including any group or index of such securities, or any interest therein or based on the value
thereof, that is exempted by the Securities and
Exchange Commission pursuant to section 36(a)(1)
of the Securities Exchange Act of 1934 with the
condition that the Commission exercise concurrent
jurisdiction over such put, call, or other option;
provided, however, that nothing in this paragraph
shall be construed to affect the jurisdiction and
authority of the Securities and Exchange Commission over such put, call, or other option.’’.
(b) AMENDMENTS TO THE SECURITIES EXCHANGE ACT OF 1934.—
The Securities Exchange Act of 1934 is amended by adding the
following section after section 3A (15 U.S.C. 78c–1):
‘‘SEC. 3B. SECURITIES-RELATED DERIVATIVES.

15 USC 78c–2.

‘‘(a) Any agreement, contract, or transaction (or class thereof)
that is exempted by the Commodity Futures Trading Commission

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124 STAT. 1652

PUBLIC LAW 111–203—JULY 21, 2010

pursuant to section 4(c)(1) of the Commodity Exchange Act (7
U.S.C. 6(c)(1)) with the condition that the Commission exercise
concurrent jurisdiction over such agreement, contract, or transaction
(or class thereof) shall be deemed a security for purposes of the
securities laws.
‘‘(b) With respect to any agreement, contract, or transaction
(or class thereof) that is exempted by the Commodity Futures
Trading Commission pursuant to section 4(c)(1) of the Commodity
Exchange Act (7 U.S.C. 6(c)(1)) with the condition that the Commission exercise concurrent jurisdiction over such agreement, contract,
or transaction (or class thereof), references in the securities laws
to the ‘purchase’ or ‘sale’ of a security shall be deemed to include
the execution, termination (prior to its scheduled maturity date),
assignment, exchange, or similar transfer or conveyance of, or extinguishing of rights or obligations under such agreement, contract,
or transaction, as the context may require.’’.
(c) AMENDMENT TO SECURITIES EXCHANGE ACT OF 1934.—Section 19(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78s(b))
is amended by adding at the end the following:
‘‘(10) Notwithstanding paragraph (2), the time period
within which the Commission is required by order to approve
a proposed rule change or institute proceedings to determine
whether the proposed rule change should be disapproved is
stayed pending a determination by the Commission upon the
request of the Commodity Futures Trading Commission or its
Chairman that the Commission issue a determination as to
whether a product that is the subject of such proposed rule
change is a security pursuant to section 718 of the Wall Street
Transparency and Accountability Act of 2010.’’.
(d) AMENDMENT TO COMMODITY EXCHANGE ACT.—Section
5c(c)(1) of the Commodity Exchange Act (7 U.S.C. 7a–2(c)(1)) is
amended—
(1) by striking ‘‘Subject to paragraph (2)’’ and inserting
the following:
‘‘(A) ELECTION.—Subject to paragraph (2)’’; and
(2) by adding at the end the following:
‘‘(B) CERTIFICATION.—The certification of a product
pursuant to this paragraph shall be stayed pending a determination by the Commission upon the request of the Securities and Exchange Commission or its Chairman that the
Commission issue a determination as to whether the
product that is the subject of such certification is a contract
of sale of a commodity for future delivery, an option on
such a contract, or an option on a commodity pursuant
to section 718 of the Wall Street Transparency and Accountability Act of 2010.’’.
15 USC 8306.

SEC. 718. DETERMINING STATUS OF NOVEL DERIVATIVE PRODUCTS.

(a) PROCESS FOR DETERMINING THE STATUS OF A NOVEL DERIVAPRODUCT.—
(1) NOTICE.—
(A) IN GENERAL.—Any person filing a proposal to list
or trade a novel derivative product that may have elements
of both securities and contracts of sale of a commodity
for future delivery (or options on such contracts or options
on commodities) may concurrently provide notice and furnish a copy of such filing with the Securities and Exchange

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1653

Commission and the Commodity Futures Trading Commission. Any such notice shall state that notice has been
made with both Commissions.
(B) NOTIFICATION.—If no concurrent notice is made
pursuant to subparagraph (A), within 5 business days after
determining that a proposal that seeks to list or trade
a novel derivative product may have elements of both securities and contracts of sale of a commodity for future
delivery (or options on such contracts or options on
commodities), the Securities and Exchange Commission or
the Commodity Futures Trading Commission, as applicable,
shall notify the other Commission and provide a copy of
such filing to the other Commission.
(2) REQUEST FOR DETERMINATION.—
(A) IN GENERAL.—No later than 21 days after receipt
of a notice under paragraph (1), or upon its own initiative
if no such notice is received, the Commodity Futures
Trading Commission may request that the Securities and
Exchange Commission issue a determination as to whether
a product is a security, as defined in section 3(a)(10) of
the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(10)).
(B) REQUEST.—No later than 21 days after receipt of
a notice under paragraph (1), or upon its own initiative
if no such notice is received, the Securities and Exchange
Commission may request that the Commodity Futures
Trading Commission issue a determination as to whether
a product is a contract of sale of a commodity for future
delivery, an option on such a contract, or an option on
a commodity subject to the Commodity Futures Trading
Commission’s exclusive jurisdiction under section 2(a)(1)(A)
of the Commodity Exchange Act (7 U.S.C. 2(a)(1)(A)).
(C) REQUIREMENT RELATING TO REQUEST.—A request
under subparagraph (A) or (B) shall be made by submitting
such request, in writing, to the Securities and Exchange
Commission or the Commodity Futures Trading Commission, as applicable.
(D) EFFECT.—Nothing in this paragraph shall be construed to prevent—
(i) the Commodity Futures Trading Commission
from requesting that the Securities and Exchange
Commission grant an exemption pursuant to section
36(a)(1) of the Securities Exchange Act of 1934 (15
U.S.C. 78mm(a)(1)) with respect to a product that is
the subject of a filing under paragraph (1); or
(ii) the Securities and Exchange Commission from
requesting that the Commodity Futures Trading
Commission grant an exemption pursuant to section
4(c)(1) of the Commodity Exchange Act (7 U.S.C.
6(c)(1)) with respect to a product that is the subject
of a filing under paragraph (1),
Provided, however, that nothing in this subparagraph shall
be construed to require the Commodity Futures Trading
Commission or the Securities and Exchange Commission
to issue an exemption requested pursuant to this subparagraph; provided further, That an order granting or denying
an exemption described in this subparagraph and issued

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124 STAT. 1654

under paragraph (3)(B) shall not be subject to judicial
review pursuant to subsection (b).
(E) WITHDRAWAL OF REQUEST.—A request under
subparagraph (A) or (B) may be withdrawn by the Commission making the request at any time prior to a determination being made pursuant to paragraph (3) for any reason
by providing written notice to the head of the other
Commission.
(3) DETERMINATION.—Notwithstanding any other provision
of law, no later than 120 days after the date of receipt of
a request—
(A) under subparagraph (A) or (B) of paragraph (2),
unless such request has been withdrawn pursuant to paragraph (2)(E), the Securities and Exchange Commission or
the Commodity Futures Trading Commission, as applicable,
shall, by order, issue the determination requested in
subparagraph (A) or (B) of paragraph (2), as applicable,
and the reasons therefor; or
(B) under paragraph (2)(D), unless such request has
been withdrawn, the Securities and Exchange Commission
or the Commodity Futures Trading Commission, as
applicable, shall grant an exemption or provide reasons
for not granting such exemption, provided that any decision
by the Securities and Exchange Commission not to grant
such exemption shall not be reviewable under section 25
of the Securities Exchange Act of 1934 (15 U.S.C. 78y).
(b) JUDICIAL RESOLUTION.—
(1) IN GENERAL.—The Commodity Futures Trading
Commission or the Securities and Exchange Commission may
petition the United States Court of Appeals for the District
of Columbia Circuit for review of a final order of the other
Commission issued pursuant to subsection (a)(3)(A), with
respect to a novel derivative product that may have elements
of both securities and contracts of sale of a commodity for
future delivery (or options on such contracts or options on
commodities) that it believes affects its statutory jurisdiction
within 60 days after the date of entry of such order, a written
petition requesting a review of the order. Any such proceeding
shall be expedited by the Court of Appeals.
(2) TRANSMITTAL OF PETITION AND RECORD.—A copy of a
petition described in paragraph (1) shall be transmitted not
later than 1 business day after filing by the complaining
Commission to the responding Commission. On receipt of the
petition, the responding Commission shall file with the court
a copy of the order under review and any documents referred
to therein, and any other materials prescribed by the court.
(3) STANDARD OF REVIEW.—The court, in considering a petition filed pursuant to paragraph (1), shall give no deference
to, or presumption in favor of, the views of either Commission.
(4) JUDICIAL STAY.—The filing of a petition by the complaining Commission pursuant to paragraph (1) shall operate
as a stay of the order, until the date on which the determination
of the court is final (including any appeal of the determination).

Deadline.

Deadline.

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Deadline.

15 USC 8307.

PUBLIC LAW 111–203—JULY 21, 2010

SEC. 719. STUDIES.

(a) STUDY ON EFFECTS OF POSITION LIMITS
EXCHANGES IN THE UNITED STATES.—

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124 STAT. 1655

(1) STUDY.—The Commodity Futures Trading Commission,
in consultation with each entity that is a designated contract
market under the Commodity Exchange Act, shall conduct a
study of the effects (if any) of the position limits imposed
pursuant to the other provisions of this title on excessive speculation and on the movement of transactions from exchanges
in the United States to trading venues outside the United
States.
(2) REPORT TO THE CONGRESS.—Within 12 months after
the imposition of position limits pursuant to the other provisions of this title, the Commodity Futures Trading Commission,
in consultation with each entity that is a designated contract
market under the Commodity Exchange Act, shall submit to
the Congress a report on the matters described in paragraph
(1).
(3) REQUIRED HEARING.—Within 30 legislative days after
the submission to the Congress of the report described in paragraph (2), the Committee on Agriculture of the House of Representatives shall hold a hearing examining the findings of
the report.
(4) BIENNIAL REPORTING.—In addition to the study required
in paragraph (1), the Chairman of the Commodity Futures
Trading Commission shall prepare and submit to the Congress
biennial reports on the growth or decline of the derivatives
markets in the United States and abroad, which shall include
assessments of the causes of any such growth or decline, the
effectiveness of regulatory regimes in managing systemic risk,
a comparison of the costs of compliance at the time of the
report for market participants subject to regulation by the
United States with the costs of compliance in December 2008
for the market participants, and the quality of the available
data. In preparing the report, the Chairman shall solicit the
views of, consult with, and address the concerns raised by,
market participants, regulators, legislators, and other
interested parties.
(b) STUDY ON FEASIBILITY OF REQUIRING USE OF STANDARDIZED
ALGORITHMIC DESCRIPTIONS FOR FINANCIAL DERIVATIVES.—
(1) IN GENERAL.—The Securities and Exchange Commission
and the Commodity Futures Trading Commission shall conduct
a joint study of the feasibility of requiring the derivatives
industry to adopt standardized computer-readable algorithmic
descriptions which may be used to describe complex and
standardized financial derivatives.
(2) GOALS.—The algorithmic descriptions defined in the
study shall be designed to facilitate computerized analysis of
individual derivative contracts and to calculate net exposures
to complex derivatives. The algorithmic descriptions shall be
optimized for simultaneous use by—
(A) commercial users and traders of derivatives;
(B) derivative clearing houses, exchanges and electronic trading platforms;
(C) trade repositories and regulator investigations of
market activities; and
(D) systemic risk regulators.
The study will also examine the extent to which the algorithmic
description, together with standardized and extensible legal

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definitions, may serve as the binding legal definition of derivative contracts. The study will examine the logistics of possible
implementations of standardized algorithmic descriptions for
derivatives contracts. The study shall be limited to electronic
formats for exchange of derivative contract descriptions and
will not contemplate disclosure of proprietary valuation models.
(3) INTERNATIONAL COORDINATION.—In conducting the
study, the Securities and Exchange Commission and the Commodity Futures Trading Commission shall coordinate the study
with international financial institutions and regulators as
appropriate and practical.
(4) REPORT.—Within 8 months after the date of the enactment of this Act, the Securities and Exchange Commission
and the Commodity Futures Trading Commission shall jointly
submit to the Committees on Agriculture and on Financial
Services of the House of Representatives and the Committees
on Agriculture, Nutrition, and Forestry and on Banking,
Housing, and Urban Affairs of the Senate a written report
which contains the results of the study required by paragraphs
(1) through (3).
(c) INTERNATIONAL SWAP REGULATION.—
(1) IN GENERAL.—The Commodity Futures Trading
Commission and the Securities and Exchange Commission shall
jointly conduct a study—
(A) relating to—
(i) swap regulation in the United States, Asia,
and Europe; and
(ii) clearing house and clearing agency regulation
in the United States, Asia, and Europe; and
(B) that identifies areas of regulation that are similar
in the United States, Asia and Europe and other areas
of regulation that could be harmonized
(2) REPORT.—Not later than 18 months after the date of
enactment of this Act, the Commodity Futures Trading
Commission and the Securities and Exchange Commission shall
submit to the Committee on Agriculture, Nutrition, and Forestry and the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Agriculture and
the Committee on Financial Services of the House of Representatives a report that includes a description of the results of
the study under subsection (a), including—
(A) identification of the major exchanges and their
regulator in each geographic area for the trading of swaps
and security-based swaps including a listing of the major
contracts and their trading volumes and notional values
as well as identification of the major swap dealers participating in such markets;
(B) identification of the major clearing houses and
clearing agencies and their regulator in each geographic
area for the clearing of swaps and security-based swaps,
including a listing of the major contracts and the clearing
volumes and notional values as well as identification of
the major clearing members of such clearing houses and
clearing agencies in such markets;
(C) a description of the comparative methods of clearing
swaps in the United States, Asia, and Europe; and

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(D) a description of the various systems used for establishing margin on individual swaps, security-based swaps,
and swap portfolios.
(d) STABLE VALUE CONTRACTS.—
(1) DETERMINATION.—
(A) STATUS.—Not later than 15 months after the date
of the enactment of this Act, the Securities and Exchange
Commission and the Commodity Futures Trading Commission shall, jointly, conduct a study to determine whether
stable value contracts fall within the definition of a swap.
In making the determination required under this subparagraph, the Commissions jointly shall consult with the
Department of Labor, the Department of the Treasury,
and the State entities that regulate the issuers of stable
value contracts.
(B) REGULATIONS.—If the Commissions determine that
stable value contracts fall within the definition of a swap,
the Commissions jointly shall determine if an exemption
for stable value contracts from the definition of swap is
appropriate and in the public interest. The Commissions
shall issue regulations implementing the determinations
required under this paragraph. Until the effective date
of such regulations, and notwithstanding any other provision of this title, the requirements of this title shall not
apply to stable value contracts.
(C) LEGAL CERTAINTY.—Stable value contracts in effect
prior to the effective date of the regulations described in
subparagraph (B) shall not be considered swaps.
(2) DEFINITION.—For purposes of this subsection, the term
‘‘stable value contract’’ means any contract, agreement, or transaction that provides a crediting interest rate and guaranty
or financial assurance of liquidity at contract or book value
prior to maturity offered by a bank, insurance company, or
other State or federally regulated financial institution for the
benefit of any individual or commingled fund available as an
investment in an employee benefit plan (as defined in section
3(3) of the Employee Retirement Income Security Act of 1974,
including plans described in section 3(32) of such Act) subject
to participant direction, an eligible deferred compensation plan
(as defined in section 457(b) of the Internal Revenue Code
of 1986) that is maintained by an eligible employer described
in section 457(e)(1)(A) of such Code, an arrangement described
in section 403(b) of such Code, or a qualified tuition program
(as defined in section 529 of such Code).

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SEC. 720. MEMORANDUM.

(a)(1) The Commodity Futures Trading Commission and the
Federal Energy Regulatory Commission shall, not later than 180
days after the date of the enactment of this Act, negotiate a memorandum of understanding to establish procedures for—
(A) applying their respective authorities in a manner so
as to ensure effective and efficient regulation in the public
interest;
(B) resolving conflicts concerning overlapping jurisdiction
between the 2 agencies; and
(C) avoiding, to the extent possible, conflicting or duplicative regulation.

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(2) Such memorandum and any subsequent amendments to
the memorandum shall be promptly submitted to the appropriate
committees of Congress.
(b) The Commodity Futures Trading Commission and the Federal Energy Regulatory Commission shall, not later than 180 days
after the date of the enactment of this section, negotiate a memorandum of understanding to share information that may be
requested where either Commission is conducting an investigation
into potential manipulation, fraud, or market power abuse in markets subject to such Commission’s regulation or oversight. Shared
information shall remain subject to the same restrictions on disclosure applicable to the Commission initially holding the information.

PART II—REGULATION OF SWAP MARKETS

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SEC. 721. DEFINITIONS.

(a) IN GENERAL.—Section 1a of the Commodity Exchange Act
(7 U.S.C. 1a) is amended—
(1) by redesignating paragraphs (2), (3) and (4), (5) through
(17), (18) through (23), (24) through (28), (29), (30), (31) through
(33), and (34) as paragraphs (6), (8) and (9), (11) through
(23), (26) through (31), (34) through (38), (40), (41), (44) through
(46), and (51), respectively;
(2) by inserting after paragraph (1) the following:
‘‘(2) APPROPRIATE FEDERAL BANKING AGENCY.—The term
‘appropriate Federal banking agency’—
‘‘(A) has the meaning given the term in section 3
of the Federal Deposit Insurance Act (12 U.S.C. 1813);
‘‘(B) means the Board in the case of a noninsured
State bank; and
‘‘(C) is the Farm Credit Administration for farm credit
system institutions.
‘‘(3) ASSOCIATED PERSON OF A SECURITY-BASED SWAP DEALER
OR MAJOR SECURITY-BASED SWAP PARTICIPANT.—The term ‘associated person of a security-based swap dealer or major securitybased swap participant’ has the meaning given the term in
section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C.
78c(a)).
‘‘(4) ASSOCIATED PERSON OF A SWAP DEALER OR MAJOR SWAP
PARTICIPANT.—
‘‘(A) IN GENERAL.—The term ‘associated person of a
swap dealer or major swap participant’ means a person
who is associated with a swap dealer or major swap participant as a partner, officer, employee, or agent (or any person
occupying a similar status or performing similar functions),
in any capacity that involves—
‘‘(i) the solicitation or acceptance of swaps; or
‘‘(ii) the supervision of any person or persons so
engaged.
‘‘(B) EXCLUSION.—Other than for purposes of section
4s(b)(6), the term ‘associated person of a swap dealer or
major swap participant’ does not include any person associated with a swap dealer or major swap participant the
functions of which are solely clerical or ministerial.
‘‘(5) BOARD.—The term ‘Board’ means the Board of Governors of the Federal Reserve System.’’;

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(3) by inserting after paragraph (6) (as redesignated by
paragraph (1)) the following:
‘‘(7) CLEARED SWAP.—The term ‘cleared swap’ means any
swap that is, directly or indirectly, submitted to and cleared
by a derivatives clearing organization registered with the
Commission.’’;
(4) in paragraph (9) (as redesignated by paragraph (1)),
by striking ‘‘except onions’’ and all that follows through the
period at the end and inserting the following: ‘‘except onions
(as provided by the first section of Public Law 85–839 (7 U.S.C.
13–1)) and motion picture box office receipts (or any index,
measure, value, or data related to such receipts), and all services, rights, and interests (except motion picture box office
receipts, or any index, measure, value or data related to such
receipts) in which contracts for future delivery are presently
or in the future dealt in.’’;
(5) by inserting after paragraph (9) (as redesignated by
paragraph (1)) the following:
‘‘(10) COMMODITY POOL.—
‘‘(A) IN GENERAL.—The term ‘commodity pool’ means
any investment trust, syndicate, or similar form of enterprise operated for the purpose of trading in commodity
interests, including any—
‘‘(i) commodity for future delivery, security futures
product, or swap;
‘‘(ii) agreement, contract, or transaction described
in section 2(c)(2)(C)(i) or section 2(c)(2)(D)(i);
‘‘(iii) commodity option authorized under section
4c; or
‘‘(iv) leverage transaction authorized under section
19.
‘‘(B) FURTHER DEFINITION.—The Commission, by rule
or regulation, may include within, or exclude from, the
term ‘commodity pool’ any investment trust, syndicate, or
similar form of enterprise if the Commission determines
that the rule or regulation will effectuate the purposes
of this Act.’’;
(6) by striking paragraph (11) (as redesignated by paragraph (1)) and inserting the following:
‘‘(11) COMMODITY POOL OPERATOR.—
‘‘(A) IN GENERAL.—The term ‘commodity pool operator’
means any person—
‘‘(i) engaged in a business that is of the nature
of a commodity pool, investment trust, syndicate, or
similar form of enterprise, and who, in connection
therewith, solicits, accepts, or receives from others,
funds, securities, or property, either directly or through
capital contributions, the sale of stock or other forms
of securities, or otherwise, for the purpose of trading
in commodity interests, including any—
‘‘(I) commodity for future delivery, security
futures product, or swap;
‘‘(II) agreement, contract, or transaction
described in section 2(c)(2)(C)(i) or section
2(c)(2)(D)(i);
‘‘(III) commodity option authorized under section 4c; or

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PUBLIC LAW 111–203—JULY 21, 2010
‘‘(IV) leverage transaction authorized under
section 19; or
‘‘(ii) who is registered with the Commission as
a commodity pool operator.
‘‘(B) FURTHER DEFINITION.—The Commission, by rule
or regulation, may include within, or exclude from, the
term ‘commodity pool operator’ any person engaged in a
business that is of the nature of a commodity pool, investment trust, syndicate, or similar form of enterprise if the
Commission determines that the rule or regulation will
effectuate the purposes of this Act.’’;
(7) in paragraph (12) (as redesignated by paragraph (1)),
in subparagraph (A)—
(A) in clause (i)—
(i) in subclause (I), by striking ‘‘made or to be
made on or subject to the rules of a contract market
or derivatives transaction execution facility’’ and
inserting ‘‘, security futures product, or swap’’;
(ii) by redesignating subclauses (II) and (III) as
subclauses (III) and (IV);
(iii) by inserting after subclause (I) the following:
‘‘(II) any agreement, contract, or transaction
described in section 2(c)(2)(C)(i) or section
2(c)(2)(D)(i)’’; and
(iv) in subclause (IV) (as so redesignated), by
striking ‘‘or’’;
(B) in clause (ii), by striking the period at the end
and inserting a semicolon; and
(C) by adding at the end the following:
‘‘(iii) is registered with the Commission as a commodity trading advisor; or
‘‘(iv) the Commission, by rule or regulation, may
include if the Commission determines that the rule
or regulation will effectuate the purposes of this Act.’’;
(8) in paragraph (17) (as redesignated by paragraph (1)),
in subparagraph (A), in the matter preceding clause (i), by
striking ‘‘paragraph (12)(A)’’ and inserting ‘‘paragraph (18)(A)’’;
(9) in paragraph (18) (as redesignated by paragraph (1))—
(A) in subparagraph (A)—
(i) in the matter following clause (vii)(III)—
(I) by striking ‘‘section 1a (11)(A)’’ and
inserting ‘‘paragraph (17)(A)’’; and
(II) by striking ‘‘$25,000,000’’ and inserting
‘‘$50,000,000’’; and
(ii) in clause (xi), in the matter preceding subclause
(I), by striking ‘‘total assets in an amount’’ and
inserting ‘‘amounts invested on a discretionary basis,
the aggregate of which is’’;
(10) by striking paragraph (22) (as redesignated by paragraph (1)) and inserting the following:
‘‘(22) FLOOR BROKER.—
‘‘(A) IN GENERAL.—The term ‘floor broker’ means any
person—
‘‘(i) who, in or surrounding any pit, ring, post,
or other place provided by a contract market for the
meeting of persons similarly engaged, shall purchase
or sell for any other person—

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‘‘(I) any commodity for future delivery, security
futures product, or swap; or
‘‘(II) any commodity option authorized under
section 4c; or
‘‘(ii) who is registered with the Commission as
a floor broker.
‘‘(B) FURTHER DEFINITION.—The Commission, by rule
or regulation, may include within, or exclude from, the
term ‘floor broker’ any person in or surrounding any pit,
ring, post, or other place provided by a contract market
for the meeting of persons similarly engaged who trades
for any other person if the Commission determines that
the rule or regulation will effectuate the purposes of this
Act.’’;
(11) by striking paragraph (23) (as redesignated by paragraph (1)) and inserting the following:
‘‘(23) FLOOR TRADER.—
‘‘(A) IN GENERAL.—The term ‘floor trader’ means any
person—
‘‘(i) who, in or surrounding any pit, ring, post,
or other place provided by a contract market for the
meeting of persons similarly engaged, purchases, or
sells solely for such person’s own account—
‘‘(I) any commodity for future delivery, security
futures product, or swap; or
‘‘(II) any commodity option authorized under
section 4c; or
‘‘(ii) who is registered with the Commission as
a floor trader.
‘‘(B) FURTHER DEFINITION.—The Commission, by rule
or regulation, may include within, or exclude from, the
term ‘floor trader’ any person in or surrounding any pit,
ring, post, or other place provided by a contract market
for the meeting of persons similarly engaged who trades
solely for such person’s own account if the Commission
determines that the rule or regulation will effectuate the
purposes of this Act.’’;
(12) by inserting after paragraph (23) (as redesignated
by paragraph (1)) the following:
‘‘(24) FOREIGN EXCHANGE FORWARD.—The term ‘foreign
exchange forward’ means a transaction that solely involves
the exchange of 2 different currencies on a specific future
date at a fixed rate agreed upon on the inception of the contract
covering the exchange.
‘‘(25) FOREIGN EXCHANGE SWAP.—The term ‘foreign
exchange swap’ means a transaction that solely involves—
‘‘(A) an exchange of 2 different currencies on a specific
date at a fixed rate that is agreed upon on the inception
of the contract covering the exchange; and
‘‘(B) a reverse exchange of the 2 currencies described
in subparagraph (A) at a later date and at a fixed rate
that is agreed upon on the inception of the contract covering
the exchange.’’;
(13) by striking paragraph (28) (as redesignated by paragraph (1)) and inserting the following:
‘‘(28) FUTURES COMMISSION MERCHANT.—

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‘‘(A) IN GENERAL.—The term ‘futures commission merchant’ means an individual, association, partnership, corporation, or trust—
‘‘(i) that—
‘‘(I) is—
‘‘(aa) engaged in soliciting or in accepting
orders for—
‘‘(AA) the purchase or sale of a commodity for future delivery;
‘‘(BB) a security futures product;
‘‘(CC) a swap;
‘‘(DD) any agreement, contract, or
transaction
described
in
section
2(c)(2)(C)(i) or section 2(c)(2)(D)(i);
‘‘(EE) any commodity option authorized under section 4c; or
‘‘(FF)
any
leverage
transaction
authorized under section 19; or
‘‘(bb) acting as a counterparty in any
agreement, contract, or transaction described
in section 2(c)(2)(C)(i) or section 2(c)(2)(D)(i);
and
‘‘(II) in or in connection with the activities
described in items (aa) or (bb) of subclause (I),
accepts any money, securities, or property (or
extends credit in lieu thereof) to margin, guarantee, or secure any trades or contracts that result
or may result therefrom; or
‘‘(ii) that is registered with the Commission as
a futures commission merchant.
‘‘(B) FURTHER DEFINITION.—The Commission, by rule
or regulation, may include within, or exclude from, the
term ‘futures commission merchant’ any person who
engages in soliciting or accepting orders for, or acting as
a counterparty in, any agreement, contract, or transaction
subject to this Act, and who accepts any money, securities,
or property (or extends credit in lieu thereof) to margin,
guarantee, or secure any trades or contracts that result
or may result therefrom, if the Commission determines
that the rule or regulation will effectuate the purposes
of this Act.’’;
(14) in paragraph (30) (as redesignated by paragraph (1)),
in subparagraph (B), by striking ‘‘state’’ and inserting ‘‘State’’;
(15) by striking paragraph (31) (as redesignated by paragraph (1)) and inserting the following:
‘‘(31) INTRODUCING BROKER.—
‘‘(A) IN GENERAL.—The term ‘introducing broker’ means
any person (except an individual who elects to be and
is registered as an associated person of a futures commission merchant)—
‘‘(i) who—
‘‘(I) is engaged in soliciting or in accepting
orders for—
‘‘(aa) the purchase or sale of any commodity for future delivery, security futures
product, or swap;

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‘‘(bb) any agreement, contract, or transaction described in section 2(c)(2)(C)(i) or section 2(c)(2)(D)(i);
‘‘(cc) any commodity option authorized
under section 4c; or
‘‘(dd) any leverage transaction authorized
under section 19; and
‘‘(II) does not accept any money, securities,
or property (or extend credit in lieu thereof) to
margin, guarantee, or secure any trades or contracts that result or may result therefrom; or
‘‘(ii) who is registered with the Commission as
an introducing broker.
‘‘(B) FURTHER DEFINITION.—The Commission, by rule
or regulation, may include within, or exclude from, the
term ‘introducing broker’ any person who engages in soliciting or accepting orders for any agreement, contract, or
transaction subject to this Act, and who does not accept
any money, securities, or property (or extend credit in
lieu thereof) to margin, guarantee, or secure any trades
or contracts that result or may result therefrom, if the
Commission determines that the rule or regulation will
effectuate the purposes of this Act.’’;
(16) by inserting after paragraph (31) (as redesignated
by paragraph (1)) the following:
‘‘(32) MAJOR SECURITY-BASED SWAP PARTICIPANT.—The term
‘major security-based swap participant’ has the meaning given
the term in section 3(a) of the Securities Exchange Act of
1934 (15 U.S.C. 78c(a)).
‘‘(33) MAJOR SWAP PARTICIPANT.—
‘‘(A) IN GENERAL.—The term ‘major swap participant’
means any person who is not a swap dealer, and—
‘‘(i) maintains a substantial position in swaps for
any of the major swap categories as determined by
the Commission, excluding—
‘‘(I) positions held for hedging or mitigating
commercial risk; and
‘‘(II) positions maintained by any employee
benefit plan (or any contract held by such a plan)
as defined in paragraphs (3) and (32) of section
3 of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1002) for the primary purpose of hedging or mitigating any risk directly
associated with the operation of the plan;
‘‘(ii) whose outstanding swaps create substantial
counterparty exposure that could have serious adverse
effects on the financial stability of the United States
banking system or financial markets; or
‘‘(iii)(I) is a financial entity that is highly leveraged
relative to the amount of capital it holds and that
is not subject to capital requirements established by
an appropriate Federal banking agency; and
‘‘(II) maintains a substantial position in outstanding swaps in any major swap category as determined by the Commission.
‘‘(B) DEFINITION OF SUBSTANTIAL POSITION.—For purposes of subparagraph (A), the Commission shall define

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by rule or regulation the term ‘substantial position’ at
the threshold that the Commission determines to be prudent for the effective monitoring, management, and oversight of entities that are systemically important or can
significantly impact the financial system of the United
States. In setting the definition under this subparagraph,
the Commission shall consider the person’s relative position
in uncleared as opposed to cleared swaps and may take
into consideration the value and quality of collateral held
against counterparty exposures.
‘‘(C) SCOPE OF DESIGNATION.—For purposes of subparagraph (A), a person may be designated as a major swap
participant for 1 or more categories of swaps without being
classified as a major swap participant for all classes of
swaps.
‘‘(D) EXCLUSIONS.—The definition under this paragraph
shall not include an entity whose primary business is providing financing, and uses derivatives for the purpose of
hedging underlying commercial risks related to interest
rate and foreign currency exposures, 90 percent or more
of which arise from financing that facilitates the purchase
or lease of products, 90 percent or more of which are
manufactured by the parent company or another subsidiary
of the parent company.’’;
(17) by inserting after paragraph (38) (as redesignated
by paragraph (1)) the following:
‘‘(39) PRUDENTIAL REGULATOR.—The term ‘prudential regulator’ means—
‘‘(A) the Board in the case of a swap dealer, major
swap participant, security-based swap dealer, or major
security-based swap participant that is—
‘‘(i) a State-chartered bank that is a member of
the Federal Reserve System;
‘‘(ii) a State-chartered branch or agency of a foreign
bank;
‘‘(iii) any foreign bank which does not operate an
insured branch;
‘‘(iv) any organization operating under section 25A
of the Federal Reserve Act or having an agreement
with the Board under section 225 of the Federal
Reserve Act;
‘‘(v) any bank holding company (as defined in section 2 of the Bank Holding Company Act of 1965
(12 U.S.C. 1841)), any foreign bank (as defined in
section 1(b)(7) of the International Banking Act of 1978
(12 U.S.C. 3101(b)(7)) that is treated as a bank holding
company under section 8(a) of the International
Banking Act of 1978 (12 U.S.C. 3106(a)), and any subsidiary of such a company or foreign bank (other than
a subsidiary that is described in subparagraph (A)
or (B) or that is required to be registered with the
Commission as a swap dealer or major swap participant under this Act or with the Securities and
Exchange Commission as a security-based swap dealer
or major security-based swap participant);

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124 STAT. 1665

‘‘(vi) after the transfer date (as defined in section
311 of the Dodd-Frank Wall Street Reform and Consumer Protection Act), any savings and loan holding
company (as defined in section 10 of the Home Owners’
Loan Act (12 U.S.C. 1467a)) and any subsidiary of
such company (other than a subsidiary that is
described in subparagraph (A) or (B) or that is required
to be registered as a swap dealer or major swap participant with the Commission under this Act or with the
Securities and Exchange Commission as a securitybased swap dealer or major security-based swap
participant); or
‘‘(vii) any organization operating under section 25A
of the Federal Reserve Act (12U.S.C. 611 et seq.) or
having an agreement with the Board under section
25 of the Federal Reserve Act (12 U.S.C. 601 et seq.);
‘‘(B) the Office of the Comptroller of the Currency
in the case of a swap dealer, major swap participant, security-based swap dealer, or major security-based swap
participant that is—
‘‘(i) a national bank;
‘‘(ii) a federally chartered branch or agency of a
foreign bank; or
‘‘(iii) any Federal savings association;
‘‘(C) the Federal Deposit Insurance Corporation in the
case of a swap dealer, major swap participant, securitybased swap dealer, or major security-based swap participant that is—
‘‘(i) a State-chartered bank that is not a member
of the Federal Reserve System; or
‘‘(ii) any State savings association;
‘‘(D) the Farm Credit Administration, in the case of
a swap dealer, major swap participant, security-based swap
dealer, or major security-based swap participant that is
an institution chartered under the Farm Credit Act of
1971 (12 U.S.C. 2001 et seq.); and
‘‘(E) the Federal Housing Finance Agency in the case
of a swap dealer, major swap participant, security-based
swap dealer, or major security-based swap participant that
is a regulated entity (as such term is defined in section
1303 of the Federal Housing Enterprises Financial Safety
and Soundness Act of 1992).’’;
(18) in paragraph (40) (as redesignated by paragraph (1))—
(A) by striking subparagraph (B);
(B) by redesignating subparagraphs (C), (D), and (E)
as subparagraphs (B), (C), and (F), respectively;
(C) in subparagraph (C) (as so redesignated), by
striking ‘‘and’’; and
(D) by inserting after subparagraph (C) (as so redesignated) the following:
‘‘(D) a swap execution facility registered under section
5h;
‘‘(E) a swap data repository registered under section
21; and’’;
(19) by inserting after paragraph (41) (as redesignated
by paragraph (1)) the following:

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124 STAT. 1666

PUBLIC LAW 111–203—JULY 21, 2010
‘‘(42) SECURITY-BASED SWAP.—The term ‘security-based
swap’ has the meaning given the term in section 3(a) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).
‘‘(43) SECURITY-BASED SWAP DEALER.—The term ‘securitybased swap dealer’ has the meaning given the term in section
3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).’’;
(20) in paragraph (46) (as redesignated by paragraph (1)),
by striking ‘‘subject to section 2(h)(7)’’ and inserting ‘‘subject
to section 2(h)(5)’’;
(21) by inserting after paragraph (46) (as redesignated
by paragraph (1)) the following:
‘‘(47) SWAP.—
‘‘(A) IN GENERAL.—Except as provided in subparagraph
(B), the term ‘swap’ means any agreement, contract, or
transaction—
‘‘(i) that is a put, call, cap, floor, collar, or similar
option of any kind that is for the purchase or sale,
or based on the value, of 1 or more interest or other
rates, currencies, commodities, securities, instruments
of indebtedness, indices, quantitative measures, or
other financial or economic interests or property of
any kind;
‘‘(ii) that provides for any purchase, sale, payment,
or delivery (other than a dividend on an equity security) that is dependent on the occurrence, nonoccurrence, or the extent of the occurrence of an event
or contingency associated with a potential financial,
economic, or commercial consequence;
‘‘(iii) that provides on an executory basis for the
exchange, on a fixed or contingent basis, of 1 or more
payments based on the value or level of 1 or more
interest or other rates, currencies, commodities, securities, instruments of indebtedness, indices, quantitative
measures, or other financial or economic interests or
property of any kind, or any interest therein or based
on the value thereof, and that transfers, as between
the parties to the transaction, in whole or in part,
the financial risk associated with a future change in
any such value or level without also conveying a current or future direct or indirect ownership interest
in an asset (including any enterprise or investment
pool) or liability that incorporates the financial risk
so transferred, including any agreement, contract, or
transaction commonly known as—
‘‘(I) an interest rate swap;
‘‘(II) a rate floor;
‘‘(III) a rate cap;
‘‘(IV) a rate collar;
‘‘(V) a cross-currency rate swap;
‘‘(VI) a basis swap;
‘‘(VII) a currency swap;
‘‘(VIII) a foreign exchange swap;
‘‘(IX) a total return swap;
‘‘(X) an equity index swap;
‘‘(XI) an equity swap;
‘‘(XII) a debt index swap;
‘‘(XIII) a debt swap;

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1667

‘‘(XIV) a credit spread;
‘‘(XV) a credit default swap;
‘‘(XVI) a credit swap;
‘‘(XVII) a weather swap;
‘‘(XVIII) an energy swap;
‘‘(XIX) a metal swap;
‘‘(XX) an agricultural swap;
‘‘(XXI) an emissions swap; and
‘‘(XXII) a commodity swap;
‘‘(iv) that is an agreement, contract, or transaction
that is, or in the future becomes, commonly known
to the trade as a swap;
‘‘(v) including any security-based swap agreement
which meets the definition of ‘swap agreement’ as
defined in section 206A of the Gramm-Leach-Bliley
Act (15 U.S.C. 78c note) of which a material term
is based on the price, yield, value, or volatility of any
security or any group or index of securities, or any
interest therein; or
‘‘(vi) that is any combination or permutation of,
or option on, any agreement, contract, or transaction
described in any of clauses (i) through (v).
‘‘(B) EXCLUSIONS.—The term ‘swap’ does not include—
‘‘(i) any contract of sale of a commodity for future
delivery (or option on such a contract), leverage contract authorized under section 19, security futures
product, or agreement, contract, or transaction
described in section 2(c)(2)(C)(i) or section 2(c)(2)(D)(i);
‘‘(ii) any sale of a nonfinancial commodity or security for deferred shipment or delivery, so long as the
transaction is intended to be physically settled;
‘‘(iii) any put, call, straddle, option, or privilege
on any security, certificate of deposit, or group or index
of securities, including any interest therein or based
on the value thereof, that is subject to—
‘‘(I) the Securities Act of 1933 (15 U.S.C. 77a
et seq.); and
‘‘(II) the Securities Exchange Act of 1934 (15
U.S.C. 78a et seq.);
‘‘(iv) any put, call, straddle, option, or privilege
relating to a foreign currency entered into on a national
securities exchange registered pursuant to section 6(a)
of the Securities Exchange Act of 1934 (15 U.S.C.
78f(a));
‘‘(v) any agreement, contract, or transaction providing for the purchase or sale of 1 or more securities
on a fixed basis that is subject to—
‘‘(I) the Securities Act of 1933 (15 U.S.C. 77a
et seq.); and
‘‘(II) the Securities Exchange Act of 1934 (15
U.S.C. 78a et seq.);
‘‘(vi) any agreement, contract, or transaction providing for the purchase or sale of 1 or more securities
on a contingent basis that is subject to the Securities
Act of 1933 (15 U.S.C. 77a et seq.) and the Securities
Exchange Act of 1934 (15 U.S.C. 78a et seq.), unless
the agreement, contract, or transaction predicates the

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124 STAT. 1668

Determination.

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PUBLIC LAW 111–203—JULY 21, 2010
purchase or sale on the occurrence of a bona fide
contingency that might reasonably be expected to affect
or be affected by the creditworthiness of a party other
than a party to the agreement, contract, or transaction;
‘‘(vii) any note, bond, or evidence of indebtedness
that is a security, as defined in section 2(a)(1) of the
Securities Act of 1933 (15 U.S.C. 77b(a)(1));
‘‘(viii) any agreement, contract, or transaction that
is—
‘‘(I) based on a security; and
‘‘(II) entered into directly or through an underwriter (as defined in section 2(a)(11) of the Securities Act of 1933 (15 U.S.C. 77b(a)(11)) by the issuer
of such security for the purposes of raising capital,
unless the agreement, contract, or transaction is
entered into to manage a risk associated with capital raising;
‘‘(ix) any agreement, contract, or transaction a
counterparty of which is a Federal Reserve bank, the
Federal Government, or a Federal agency that is
expressly backed by the full faith and credit of the
United States; and
‘‘(x) any security-based swap, other than a securitybased swap as described in subparagraph (D).
‘‘(C) RULE OF CONSTRUCTION REGARDING MASTER
AGREEMENTS.—
‘‘(i) IN GENERAL.—Except as provided in clause
(ii), the term ‘swap’ includes a master agreement that
provides for an agreement, contract, or transaction that
is a swap under subparagraph (A), together with each
supplement to any master agreement, without regard
to whether the master agreement contains an agreement, contract, or transaction that is not a swap pursuant to subparagraph (A).
‘‘(ii) EXCEPTION.—For purposes of clause (i), the
master agreement shall be considered to be a swap
only with respect to each agreement, contract, or transaction covered by the master agreement that is a swap
pursuant to subparagraph (A).
‘‘(D) MIXED SWAP.—The term ‘security-based swap’
includes any agreement, contract, or transaction that is
as described in section 3(a)(68)(A) of the Securities
Exchange Act of 1934 (15 U.S.C. 78c(a)(68)(A)) and also
is based on the value of 1 or more interest or other rates,
currencies, commodities, instruments of indebtedness,
indices, quantitative measures, other financial or economic
interest or property of any kind (other than a single security or a narrow-based security index), or the occurrence,
non-occurrence, or the extent of the occurrence of an event
or contingency associated with a potential financial, economic, or commercial consequence (other than an event
described in subparagraph (A)(iii)).
‘‘(E) TREATMENT OF FOREIGN EXCHANGE SWAPS AND
FORWARDS.—
‘‘(i) IN GENERAL.—Foreign exchange swaps and foreign exchange forwards shall be considered swaps
under this paragraph unless the Secretary makes a

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1669

written determination under section 1b that either foreign exchange swaps or foreign exchange forwards or
both—
‘‘(I) should be not be regulated as swaps under
this Act; and
‘‘(II) are not structured to evade the DoddFrank Wall Street Reform and Consumer Protection Act in violation of any rule promulgated by
the Commission pursuant to section 721(c) of that
Act.
‘‘(ii) CONGRESSIONAL NOTICE; EFFECTIVENESS.—The
Secretary shall submit any written determination
under clause (i) to the appropriate committees of Congress, including the Committee on Agriculture, Nutrition, and Forestry of the Senate and the Committee
on Agriculture of the House of Representatives. Any
such written determination by the Secretary shall not
be effective until it is submitted to the appropriate
committees of Congress.
‘‘(iii) REPORTING.—Notwithstanding a written
determination by the Secretary under clause (i), all
foreign exchange swaps and foreign exchange forwards
shall be reported to either a swap data repository,
or, if there is no swap data repository that would
accept such swaps or forwards, to the Commission
pursuant to section 4r within such time period as
the Commission may by rule or regulation prescribe.
‘‘(iv) BUSINESS STANDARDS.—Notwithstanding a
written determination by the Secretary pursuant to
clause (i), any party to a foreign exchange swap or
forward that is a swap dealer or major swap participant
shall conform to the business conduct standards contained in section 4s(h).
‘‘(v) SECRETARY.—For purposes of this subparagraph, the term ‘Secretary’ means the Secretary of
the Treasury.
‘‘(F) EXCEPTION FOR CERTAIN FOREIGN EXCHANGE SWAPS
AND FORWARDS.—
‘‘(i) REGISTERED ENTITIES.—Any foreign exchange
swap and any foreign exchange forward that is listed
and traded on or subject to the rules of a designated
contract market or a swap execution facility, or that
is cleared by a derivatives clearing organization, shall
not be exempt from any provision of this Act or amendments made by the Wall Street Transparency and
Accountability Act of 2010 prohibiting fraud or manipulation.
‘‘(ii) RETAIL TRANSACTIONS.—Nothing in subparagraph (E) shall affect, or be construed to affect, the
applicability of this Act or the jurisdiction of the
Commission with respect to agreements, contracts, or
transactions in foreign currency pursuant to section
2(c)(2).
‘‘(48) SWAP DATA REPOSITORY.—The term ‘swap data repository’ means any person that collects and maintains information
or records with respect to transactions or positions in, or the
terms and conditions of, swaps entered into by third parties

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124 STAT. 1670

15 USC 8321.

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15 USC 8321.

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PUBLIC LAW 111–203—JULY 21, 2010

for the purpose of providing a centralized recordkeeping facility
for swaps.
‘‘(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 in the trade 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 with that 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) EXCEPTION.—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 a part of a regular business.
‘‘(D) DE MINIMIS EXCEPTION.—The Commission shall
exempt from designation as a swap dealer an entity that
engages in a de minimis quantity of swap dealing in connection with transactions with or on behalf of its customers.
The Commission shall promulgate regulations to establish
factors with respect to the making of this determination
to exempt.
‘‘(50) SWAP EXECUTION FACILITY.—The term ‘swap execution
facility’ means a trading system or platform in which multiple
participants have the ability to execute or trade swaps by
accepting bids and offers made by multiple participants in
the facility or system, through any means of interstate commerce, including any trading facility, that—
‘‘(A) facilitates the execution of swaps between persons;
and
‘‘(B) is not a designated contract market.’’.
(22) in paragraph (51) (as redesignated by paragraph (1)),
in subparagraph (A)(i), by striking ‘‘partipants’’ and inserting
‘‘participants’’.
(b) AUTHORITY TO DEFINE TERMS.—The Commodity Futures
Trading Commission may adopt a rule to define—
(1) the term ‘‘commercial risk’’; and
(2) any other term included in an amendment to the Commodity Exchange Act (7 U.S.C. 1 et seq.) made by this subtitle.
(c) MODIFICATION OF DEFINITIONS.—To include transactions and
entities that have been structured to evade this subtitle (or an
amendment made by this subtitle), the Commodity Futures Trading
Commission shall adopt a rule to further define the terms ‘‘swap’’,
‘‘swap dealer’’, ‘‘major swap participant’’, and ‘‘eligible contract
participant’’.

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1671

(d) EXEMPTIONS.—Section 4(c)(1) of the Commodity Exchange
Act (7 U.S.C. 6(c)(1)) is amended by striking ‘‘except that’’ and
all that follows through the period at the end and inserting the
following: ‘‘except that—
‘‘(A) unless the Commission is expressly authorized by any
provision described in this subparagraph to grant exemptions,
with respect to amendments made by subtitle A of the Wall
Street Transparency and Accountability Act of 2010—
‘‘(i) with respect to—
‘‘(I) paragraphs (2), (3), (4), (5), and (7), paragraph
(18)(A)(vii)(III), paragraphs (23), (24), (31), (32), (38),
(39), (41), (42), (46), (47), (48), and (49) of section
1a, and sections 2(a)(13), 2(c)(1)(D), 4a(a), 4a(b), 4d(c),
4d(d), 4r, 4s, 5b(a), 5b(b), 5(d), 5(g), 5(h), 5b(c), 5b(i),
8e, and 21; and
‘‘(II) section 206(e) of the Gramm-Leach-Bliley Act
(Public Law 106–102; 15 U.S.C. 78c note); and
‘‘(ii) in sections 721(c) and 742 of the Dodd-Frank Wall
Street Reform and Consumer Protection Act; and
‘‘(B) the Commission and the Securities and Exchange
Commission may by rule, regulation, or order jointly exclude
any agreement, contract, or transaction from section 2(a)(1)(D))
if the Commissions determine that the exemption would be
consistent with the public interest.’’.
(e) CONFORMING AMENDMENTS.—
(1) Section 2(c)(2)(B)(i)(II) of the Commodity Exchange Act
(7 U.S.C. 2(c)(2)(B)(i)(II)) is amended—
(A) in item (cc)—
(i) in subitem (AA), by striking ‘‘section 1a(20)’’
and inserting ‘‘section 1a’’; and
(ii) in subitem (BB), by striking ‘‘section 1a(20)’’
and inserting ‘‘section 1a’’; and
(B) in item (dd), by striking ‘‘section 1a(12)(A)(ii)’’ and
inserting ‘‘section 1a(18)(A)(ii)’’.
(2) Section 4m(3) of the Commodity Exchange Act (7 U.S.C.
6m(3)) is amended by striking ‘‘section 1a(6)’’ and inserting
‘‘section 1a’’.
(3) Section 4q(a)(1) of the Commodity Exchange Act (7
U.S.C. 6o–1(a)(1)) is amended by striking ‘‘section 1a(4)’’ and
inserting ‘‘section 1a(9)’’.
(4) Section 5(e)(1) of the Commodity Exchange Act (7 U.S.C.
7(e)(1)) is amended by striking ‘‘section 1a(4)’’ and inserting
‘‘section 1a(9)’’.
(5) Section 5a(b)(2)(F) of the Commodity Exchange Act
(7 U.S.C. 7a(b)(2)(F)) is amended by striking ‘‘section 1a(4)’’
and inserting ‘‘section 1a(9)’’.
(6) Section 5b(a) of the Commodity Exchange Act (7 U.S.C.
7a–1(a)) is amended, in the matter preceding paragraph (1),
by striking ‘‘section 1a(9)’’ and inserting ‘‘section 1a’’.
(7) Section 5c(c)(2)(B) of the Commodity Exchange Act (7
U.S.C. 7a–2(c)(2)(B)) is amended by striking ‘‘section 1a(4)’’
and inserting ‘‘section 1a(9)’’.
(8) Section 6(g)(5)(B)(i) of the Securities Exchange Act of
1934 (15 U.S.C. 78f(g)(5)(B)(i)) is amended—
(A) in subclause (I), by striking ‘‘section 1a(12)(B)(ii)’’
and inserting ‘‘section 1a(18)(B)(ii)’’; and

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124 STAT. 1672

7 USC 27.

7 USC 1a note.

PUBLIC LAW 111–203—JULY 21, 2010

(B) in subclause (II), by striking ‘‘section 1a(12)’’ and
inserting ‘‘section 1a(18)’’.
(9) Section 402 of the Legal Certainty for Bank Products
Act of 2000 (7 U.S.C. 27 et seq.) is amended—
(A) in subsection (a)(7), by striking ‘‘section 1a(20)’’
and inserting ‘‘section 1a’’;
(B) in subsection (b)(2), by striking ‘‘section 1a(12)’’
and inserting ‘‘section 1a’’; and
(C) in subsection (c), by striking ‘‘section 1a(4)’’ and
inserting ‘‘section 1a’’.
(10) The first section of Public Law 85–839 (7 U.S.C. 13–
1) is amended in subsection (a), in the first sentence, by
inserting ‘‘motion picture box office receipts (or any index,
measure, value, or data related to such receipts) or’’ after
‘‘sale of’’.
(f) EFFECTIVE DATE.—Notwithstanding any other provision of
this Act, the amendments made by subsection (a)(4) shall take
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SEC. 722. JURISDICTION.

(a) EXCLUSIVE JURISDICTION.—Section 2(a)(1) of the Commodity
Exchange Act (7 U.S.C. 2(a)(1)) is amended—
(1) in subparagraph (A), in the first sentence—
(A) by inserting ‘‘the Wall Street Transparency and
Accountability Act of 2010 (including an amendment made
by that Act) and’’ after ‘‘otherwise provided in’’;
(B) by striking ‘‘(C) and (D)’’ and inserting ‘‘(C), (D),
and (I)’’;
(C) by striking ‘‘(c) through (i) of this section’’ and
inserting ‘‘(c) and (f)’’;
(D) by striking ‘‘contracts of sale’’ and inserting ‘‘swaps
or contracts of sale’’; and
(E) by striking ‘‘or derivatives transaction execution
facility registered pursuant to section 5 or 5a’’ and inserting
‘‘pursuant to section 5 or a swap execution facility pursuant
to section 5h’’; and
(2) by adding at the end the following:
‘‘(G)(i) Nothing in this paragraph shall limit the jurisdiction conferred on the Securities and Exchange Commission by the Wall Street Transparency and Accountability
Act of 2010 with regard to security-based swap agreements
as defined pursuant to section 3(a)(78) of the Securities
Exchange Act of 1934, and security-based swaps.
‘‘(ii) In addition to the authority of the Securities and
Exchange Commission described in clause (i), nothing in
this subparagraph shall limit or affect any statutory
authority of the Commission with respect to an agreement,
contract, or transaction described in clause (i).
‘‘(H) Notwithstanding any other provision of law, the
Wall Street Transparency and Accountability Act of 2010
shall not apply to, and the Commodity Futures Trading
Commission shall have no jurisdiction under such Act (or
any amendments to the Commodity Exchange Act made
by such Act) with respect to, any security other than a
security-based swap.’’.

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1673

(b) REGULATION OF SWAPS UNDER FEDERAL AND STATE LAW.—
Section 12 of the Commodity Exchange Act (7 U.S.C. 16) is amended
by adding at the end the following:
‘‘(h) REGULATION OF SWAPS AS INSURANCE UNDER STATE LAW.—
A swap—
‘‘(1) shall not be considered to be insurance; and
‘‘(2) may not be regulated as an insurance contract under
the law of any State.’’.
(c) AGREEMENTS, CONTRACTS, AND TRANSACTIONS TRADED ON
AN ORGANIZED EXCHANGE.—Section 2(c)(2)(A) of the Commodity
Exchange Act (7 U.S.C. 2(c)(2)(A)) is amended—
(1) in clause (i), by striking ‘‘or’’ at the end;
(2) by redesignating clause (ii) as clause (iii); and
(3) by inserting after clause (i) the following:
‘‘(ii) a swap; or’’.
(d) APPLICABILITY.—Section 2 of the Commodity Exchange Act
(7 U.S.C. 2) (as amended by section 723(a)(3)) is amended by adding
at the end the following:
‘‘(i) APPLICABILITY.—The provisions of this Act relating to swaps
that were enacted by the Wall Street Transparency and Accountability Act of 2010 (including any rule prescribed or regulation
promulgated under that Act), shall not apply to activities outside
the United States unless those activities—
‘‘(1) have a direct and significant connection with activities
in, or effect on, commerce of the United States; or
‘‘(2) contravene such rules or regulations as the Commission
may prescribe or promulgate as are necessary or appropriate
to prevent the evasion of any provision of this Act that was
enacted by the Wall Street Transparency and Accountability
Act of 2010.’’.
(e) FEDERAL ENERGY REGULATORY COMMISSION.—Section
2(a)(1) of the Commodity Exchange Act (7 U.S.C. 2(a)(1)) is amended
by adding at the end the following:
‘‘(I)(i) Nothing in this Act shall limit or affect any
statutory authority of the Federal Energy Regulatory
Commission or a State regulatory authority (as defined
in section 3(21) of the Federal Power Act (16 U.S.C. 796(21))
with respect to an agreement, contract, or transaction that
is entered into pursuant to a tariff or rate schedule
approved by the Federal Energy Regulatory Commission
or a State regulatory authority and is—
‘‘(I) not executed, traded, or cleared on a registered
entity or trading facility; or
‘‘(II) executed, traded, or cleared on a registered
entity or trading facility owned or operated by a
regional transmission organization or independent
system operator.
‘‘(ii) In addition to the authority of the Federal Energy
Regulatory Commission or a State regulatory authority
described in clause (i), nothing in this subparagraph shall
limit or affect—
‘‘(I) any statutory authority of the Commission
with respect to an agreement, contract, or transaction
described in clause (i); or
‘‘(II) the jurisdiction of the Commission under
subparagraph (A) with respect to an agreement, contract, or transaction that is executed, traded, or cleared

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124 STAT. 1674

15 USC 8322.

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7 USC 1b.

PUBLIC LAW 111–203—JULY 21, 2010

on a registered entity or trading facility that is not
owned or operated by a regional transmission organization or independent system operator (as defined by
sections 3(27) and (28) of the Federal Power Act (16
U.S.C. 796(27), 796(28)).’’.
(f) PUBLIC INTEREST WAIVER.—Section 4(c) of the Commodity
Exchange Act (7 U.S.C. 6(c)) (as amended by section 721(d)) is
amended by adding at the end the following:
‘‘(6) If the Commission determines that the exemption
would be consistent with the public interest and the purposes
of this Act, the Commission shall, in accordance with paragraphs (1) and (2), exempt from the requirements of this Act
an agreement, contract, or transaction that is entered into—
‘‘(A) pursuant to a tariff or rate schedule approved
or permitted to take effect by the Federal Energy Regulatory Commission;
‘‘(B) pursuant to a tariff or rate schedule establishing
rates or charges for, or protocols governing, the sale of
electric energy approved or permitted to take effect by
the regulatory authority of the State or municipality having
jurisdiction to regulate rates and charges for the sale of
electric energy within the State or municipality; or
‘‘(C) between entities described in section 201(f) of the
Federal Power Act (16 U.S.C. 824(f)).’’.
(g) AUTHORITY OF FERC.—Nothing in the Wall Street Transparency and Accountability Act of 2010 or the amendments to
the Commodity Exchange Act made by such Act shall limit or
affect any statutory enforcement authority of the Federal Energy
Regulatory Commission pursuant to section 222 of the Federal
Power Act and section 4A of the Natural Gas Act that existed
prior to the date of enactment of the Wall Street Transparency
and Accountability Act of 2010.
(h) DETERMINATION.—The Commodity Exchange Act is
amended by inserting after section 1a (7 U.S.C. 1a) the following:
‘‘SEC.

1b.

REQUIREMENTS OF SECRETARY OF THE TREASURY
REGARDING EXEMPTION OF FOREIGN EXCHANGE SWAPS
AND FOREIGN EXCHANGE FORWARDS FROM DEFINITION
OF THE TERM ‘SWAP’.

‘‘(a) REQUIRED CONSIDERATIONS.—In determining whether to
exempt foreign exchange swaps and foreign exchange forwards from
the definition of the term ‘swap’, the Secretary of the Treasury
(referred to in this section as the ‘Secretary’) shall consider—
‘‘(1) whether the required trading and clearing of foreign
exchange swaps and foreign exchange forwards would create
systemic risk, lower transparency, or threaten the financial
stability of the United States;
‘‘(2) whether foreign exchange swaps and foreign exchange
forwards are already subject to a regulatory scheme that is
materially comparable to that established by this Act for other
classes of swaps;
‘‘(3) the extent to which bank regulators of participants
in the foreign exchange market provide adequate supervision,
including capital and margin requirements;
‘‘(4) the extent of adequate payment and settlement systems; and

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124 STAT. 1675

‘‘(5) the use of a potential exemption of foreign exchange
swaps and foreign exchange forwards to evade otherwise
applicable regulatory requirements.
‘‘(b) DETERMINATION.—If the Secretary makes a determination
to exempt foreign exchange swaps and foreign exchange forwards
from the definition of the term ‘swap’, the Secretary shall submit
to the appropriate committees of Congress a determination that
contains—
‘‘(1) an explanation regarding why foreign exchange swaps
and foreign exchange forwards are qualitatively different from
other classes of swaps in a way that would make the foreign
exchange swaps and foreign exchange forwards ill-suited for
regulation as swaps; and
‘‘(2) an identification of the objective differences of foreign
exchange swaps and foreign exchange forwards with respect
to standard swaps that warrant an exempted status.
‘‘(c) EFFECT OF DETERMINATION.—A determination by the Secretary under subsection (b) shall not exempt any foreign exchange
swaps and foreign exchange forwards traded on a designated contract market or swap execution facility from any applicable antifraud and antimanipulation provision under this title.’’.

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SEC. 723. CLEARING.

(a) CLEARING REQUIREMENT.—
(1) IN GENERAL.—Section 2 of the Commodity Exchange
Act (7 U.S.C. 2) is amended—
(A) by striking subsections (d), (e), (g), and (h); and
(B) by redesignating subsection (i) as subsection (g).
(2) SWAPS; LIMITATION ON PARTICIPATION.—Section 2 of the
Commodity Exchange Act (7 U.S.C. 2) (as amended by paragraph (1)) is amended by inserting after subsection (c) the
following:
‘‘(d) SWAPS.—Nothing in this Act (other than subparagraphs
(A), (B), (C), (D), (G), and (H) of subsection (a)(1), subsections
(f) and (g), sections 1a, 2(a)(13), 2(c)(2)(A)(ii), 2(e), 2(h), 4(c), 4a,
4b, and 4b–1, subsections (a), (b), and (g) of section 4c, sections
4d, 4e, 4f, 4g, 4h, 4i, 4j, 4k, 4l, 4m, 4n, 4o, 4p, 4r, 4s, 4t, 5,
5b, 5c, 5e, and 5h, subsections (c) and (d) of section 6, sections
6c, 6d, 8, 8a, and 9, subsections (e)(2), (f), and (h) of section 12,
subsections (a) and (b) of section 13, sections 17, 20, 21, and 22(a)(4),
and any other provision of this Act that is applicable to registered
entities or Commission registrants) governs or applies to a swap.
‘‘(e) LIMITATION ON PARTICIPATION.—It shall be unlawful for
any person, other than an eligible contract participant, to enter
into a swap unless the swap is entered into on, or subject to
the rules of, a board of trade designated as a contract market
under section 5.’’.
(3) MANDATORY CLEARING OF SWAPS.—Section 2 of the Commodity Exchange Act (7 U.S.C. 2) is amended by inserting
after subsection (g) (as redesignated by paragraph (1)(B)) the
following:
‘‘(h) CLEARING REQUIREMENT.—
‘‘(1) IN GENERAL.—
‘‘(A) STANDARD FOR CLEARING.—It shall be unlawful
for any person to engage in a swap unless that person
submits such swap for clearing to a derivatives clearing

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124 STAT. 1676

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Time period.

Notice.

Public
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PUBLIC LAW 111–203—JULY 21, 2010
organization that is registered under this Act or a derivatives clearing organization that is exempt from registration
under this Act if the swap is required to be cleared.
‘‘(B) OPEN ACCESS.—The rules of a derivatives clearing
organization described in subparagraph (A) shall—
‘‘(i) prescribe that all swaps (but not contracts
of sale of a commodity for future delivery or options
on such contracts) submitted to the derivatives clearing
organization with the same terms and conditions are
economically equivalent within the derivatives clearing
organization and may be offset with each other within
the derivatives clearing organization; and
‘‘(ii) provide for non-discriminatory clearing of a
swap (but not a contract of sale of a commodity for
future delivery or option on such contract) executed
bilaterally or on or through the rules of an unaffiliated
designated contract market or swap execution facility.
‘‘(2) COMMISSION REVIEW.—
‘‘(A) COMMISSION-INITIATED REVIEW.—
‘‘(i) The Commission on an ongoing basis shall
review each swap, or any group, category, type, or
class of swaps to make a determination as to whether
the swap or group, category, type, or class of swaps
should be required to be cleared.
‘‘(ii) The Commission shall provide at least a 30day public comment period regarding any determination made under clause (i).
‘‘(B) SWAP SUBMISSIONS.—
‘‘(i) A derivatives clearing organization shall
submit to the Commission each swap, or any group,
category, type, or class of swaps that it plans to accept
for clearing, and provide notice to its members (in
a manner to be determined by the Commission) of
the submission.
‘‘(ii) Any swap or group, category, type, or class
of swaps listed for clearing by a derivative clearing
organization as of the date of enactment of this subsection shall be considered submitted to the Commission.
‘‘(iii) The Commission shall—
‘‘(I) make available to the public submissions
received under clauses (i) and (ii);
‘‘(II) review each submission made under
clauses (i) and (ii), and determine whether the
swap, or group, category, type, or class of swaps
described in the submission is required to be
cleared; and
‘‘(III) provide at least a 30-day public comment
period regarding its determination as to whether
the clearing requirement under paragraph (1)(A)
shall apply to the submission.
‘‘(C) DEADLINE.—The Commission shall make its determination under subparagraph (B)(iii) not later than 90
days after receiving a submission made under subparagraphs (B)(i) and (B)(ii), unless the submitting derivatives
clearing organization agrees to an extension for the time
limitation established under this subparagraph.

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124 STAT. 1677

‘‘(D) DETERMINATION.—
‘‘(i) In reviewing a submission made under
subparagraph (B), the Commission shall review
whether the submission is consistent with section
5b(c)(2).
‘‘(ii) In reviewing a swap, group of swaps, or class
of swaps pursuant to subparagraph (A) or a submission
made under subparagraph (B), the Commission shall
take into account the following factors:
‘‘(I) The existence of significant outstanding
notional exposures, trading liquidity, and adequate
pricing data.
‘‘(II) The availability of rule framework,
capacity, operational expertise and resources, and
credit support infrastructure to clear the contract
on terms that are consistent with the material
terms and trading conventions on which the contract is then traded.
‘‘(III) The effect on the mitigation of systemic
risk, taking into account the size of the market
for such contract and the resources of the derivatives clearing organization available to clear the
contract.
‘‘(IV) The effect on competition, including
appropriate fees and charges applied to clearing.
‘‘(V) The existence of reasonable legal certainty
in the event of the insolvency of the relevant
derivatives clearing organization or 1 or more of
its clearing members with regard to the treatment
of customer and swap counterparty positions,
funds, and property.
‘‘(iii) In making a determination under subparagraph (A) or (B)(iii) that the clearing requirement shall
apply, the Commission may require such terms and
conditions to the requirement as the Commission determines to be appropriate.
‘‘(E) RULES.—Not later than 1 year after the date of
the enactment of this subsection, the Commission shall
adopt rules for a derivatives clearing organization’s submission for review, pursuant to this paragraph, of a swap,
or a group, category, type, or class of swaps, that it seeks
to accept for clearing. Nothing in this subparagraph limits
the Commission from making a determination under
subparagraph (B)(iii) for swaps described in subparagraph
(B)(ii).
‘‘(3) STAY OF CLEARING REQUIREMENT.—
‘‘(A) IN GENERAL.—After making a determination
pursuant to paragraph (2)(B), the Commission, on application of a counterparty to a swap or on its own initiative,
may stay the clearing requirement of paragraph (1) until
the Commission completes a review of the terms of the
swap (or the group, category, type, or class of swaps) and
the clearing arrangement.
‘‘(B) DEADLINE.—The Commission shall complete a
review undertaken pursuant to subparagraph (A) not later
than 90 days after issuance of the stay, unless the derivatives clearing organization that clears the swap, or group,

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124 STAT. 1678

category, type, or class of swaps agrees to an extension
of the time limitation established under this subparagraph.
‘‘(C) DETERMINATION.—Upon completion of the review
undertaken pursuant to subparagraph (A), the Commission
may—
‘‘(i) determine, unconditionally or subject to such
terms and conditions as the Commission determines
to be appropriate, that the swap, or group, category,
type, or class of swaps must be cleared pursuant to
this subsection if it finds that such clearing is consistent with paragraph (2)(D); or
‘‘(ii) determine that the clearing requirement of
paragraph (1) shall not apply to the swap, or group,
category, type, or class of swaps.
‘‘(D) RULES.—Not later than 1 year after the date
of the enactment of the Wall Street Transparency and
Accountability Act of 2010, the Commission shall adopt
rules for reviewing, pursuant to this paragraph, a derivatives clearing organization’s clearing of a swap, or a group,
category, type, or class of swaps, that it has accepted for
clearing.
‘‘(4) PREVENTION OF EVASION.—
‘‘(A) IN GENERAL.—The Commission shall prescribe
rules under this subsection (and issue interpretations of
rules prescribed under this subsection) as determined by
the Commission to be necessary to prevent evasions of
the mandatory clearing requirements under this Act.
‘‘(B) DUTY OF COMMISSION TO INVESTIGATE AND TAKE
CERTAIN ACTIONS.—To the extent the Commission finds
that a particular swap, group, category, type, or class of
swaps would otherwise be subject to mandatory clearing
but no derivatives clearing organization has listed the
swap, group, category, type, or class of swaps for clearing,
the Commission shall—
‘‘(i) investigate the relevant facts and circumstances;
‘‘(ii) within 30 days issue a public report containing
the results of the investigation; and
‘‘(iii) take such actions as the Commission determines to be necessary and in the public interest, which
may include requiring the retaining of adequate
margin or capital by parties to the swap, group, category, type, or class of swaps.
‘‘(C) EFFECT ON AUTHORITY.—Nothing in this paragraph—
‘‘(i) authorizes the Commission to adopt rules
requiring a derivatives clearing organization to list
for clearing a swap, group, category, type, or class
of swaps if the clearing of the swap, group, category,
type, or class of swaps would threaten the financial
integrity of the derivatives clearing organization; and
‘‘(ii) affects the authority of the Commission to
enforce the open access provisions of paragraph (1)(B)
with respect to a swap, group, category, type, or class
of swaps that is listed for clearing by a derivatives
clearing organization.

Deadline.

Regulations.

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PUBLIC LAW 111–203—JULY 21, 2010

124 STAT. 1679

‘‘(5) REPORTING TRANSITION RULES.—Rules adopted by the
Commission under this section shall provide for the reporting
of data, as follows:
‘‘(A) Swaps entered into before the date of the enactment of this subsection shall be reported to a registered
swap data repository or the Commission no later than
180 days after the effective date of this subsection.
‘‘(B) Swaps entered into on or after such date of enactment shall be reported to a registered swap data repository
or the Commission no later than the later of—
‘‘(i) 90 days after such effective date; or
‘‘(ii) such other time after entering into the swap
as the Commission may prescribe by rule or regulation.
‘‘(6) CLEARING TRANSITION RULES.—
‘‘(A) Swaps entered into before the date of the enactment of this subsection are exempt from the clearing
requirements of this subsection if reported pursuant to
paragraph (5)(A).
‘‘(B) Swaps entered into before application of the
clearing requirement pursuant to this subsection are
exempt from the clearing requirements of this subsection
if reported pursuant to paragraph (5)(B).
‘‘(7) EXCEPTIONS.—
‘‘(A) IN GENERAL.—The requirements of paragraph
(1)(A) shall not apply to a swap if 1 of the counterparties
to the swap—
‘‘(i) is not a financial entity;
‘‘(ii) is using swaps to hedge or mitigate commercial
risk; and
‘‘(iii) notifies the Commission, in a manner set
forth by the Commission, how it generally meets its
financial obligations associated with entering into noncleared swaps.
‘‘(B) OPTION TO CLEAR.—The application of the clearing
exception in subparagraph (A) is solely at the discretion
of the counterparty to the swap that meets the conditions
of clauses (i) through (iii) of subparagraph (A).
‘‘(C) FINANCIAL ENTITY DEFINITION.—
‘‘(i) IN GENERAL.—For the purposes of this paragraph, the term ‘financial entity’ means—
‘‘(I) a swap dealer;
‘‘(II) a security-based swap dealer;
‘‘(III) a major swap participant;
‘‘(IV) a major security-based swap participant;
‘‘(V) a commodity pool;
‘‘(VI) a private fund as defined in section
202(a) of the Investment Advisers Act of 1940 (15
U.S.C. 80-b-2(a));
‘‘(VII) an employee benefit plan as defined in
paragraphs (3) and (32) of section 3 of the
Employee Retirement Income Security Act of 1974
(29 U.S.C. 1002);
‘‘(VIII) a person predominantly engaged in
activities that are in the business of banking, or
in activities that are financial in nature, as defined
in section 4(k) of the Bank Holding Company Act
of 1956.

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PUBLIC LAW 111–203—JULY 21, 2010
‘‘(ii) EXCLUSION.—The Commission shall consider
whether to exempt small banks, savings associations,
farm credit system institutions, and credit unions,
including—
‘‘(I) depository institutions with total assets
of $10,000,000,000 or less;
‘‘(II) farm credit system institutions with total
assets of $10,000,000,000 or less; or
‘‘(III) credit unions with total assets of
$10,000,000,000 or less.
‘‘(iii) LIMITATION.—Such definition shall not
include an entity whose primary business is providing
financing, and uses derivatives for the purpose of
hedging underlying commercial risks related to interest
rate and foreign currency exposures, 90 percent or
more of which arise from financing that facilitates
the purchase or lease of products, 90 percent or more
of which are manufactured by the parent company
or another subsidiary of the parent company.
‘‘(D) TREATMENT OF AFFILIATES.—
‘‘(i) IN GENERAL.—An affiliate of a person that
qualifies for an exception under subparagraph (A)
(including affiliate entities predominantly engaged in
providing financing for the purchase of the merchandise or manufactured goods of the person) may qualify
for the exception only if the affiliate, acting on behalf
of the person and as an agent, uses the swap to hedge
or mitigate the commercial risk of the person or other
affiliate of the person that is not a financial entity.
‘‘(ii) PROHIBITION RELATING TO CERTAIN AFFILIATES.—The exception in clause (i) shall not apply if
the affiliate is—
‘‘(I) a swap dealer;
‘‘(II) a security-based swap dealer;
‘‘(III) a major swap participant;
‘‘(IV) a major security-based swap participant;
‘‘(V) an issuer that would be an investment
company, as defined in section 3 of the Investment
Company Act of 1940 (15 U.S.C. 80a–3), but for
paragraph (1) or (7) of subsection (c) of that Act
(15 U.S.C. 80a–3(c));
‘‘(VI) a commodity pool; or
‘‘(VII) a bank holding company with over
$50,000,000,000 in consolidated assets.
‘‘(iii) TRANSITION RULE FOR AFFILIATES.—An affiliate, subsidiary, or a wholly owned entity of a person
that qualifies for an exception under subparagraph
(A) and is predominantly engaged in providing
financing for the purchase or lease of merchandise
or manufactured goods of the person shall be exempt
from the margin requirement described in section 4s(e)
and the clearing requirement described in paragraph
(1) with regard to swaps entered into to mitigate the
risk of the financing activities for not less than a
2-year period beginning on the date of enactment of
this clause.
‘‘(E) ELECTION OF COUNTERPARTY.—

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Time period.

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124 STAT. 1681

‘‘(i) SWAPS REQUIRED TO BE CLEARED.—With
respect to any swap that is subject to the mandatory
clearing requirement under this subsection and entered
into by a swap dealer or a major swap participant
with a counterparty that is not a swap dealer, major
swap participant, security-based swap dealer, or major
security-based swap participant, the counterparty shall
have the sole right to select the derivatives clearing
organization at which the swap will be cleared.
‘‘(ii) SWAPS NOT REQUIRED TO BE CLEARED.—With
respect to any swap that is not subject to the mandatory clearing requirement under this subsection and
entered into by a swap dealer or a major swap participant with a counterparty that is not a swap dealer,
major swap participant, security-based swap dealer,
or major security-based swap participant, the
counterparty—
‘‘(I) may elect to require clearing of the swap;
and
‘‘(II) shall have the sole right to select the
derivatives clearing organization at which the
swap will be cleared.
‘‘(F) ABUSE OF EXCEPTION.—The Commission may prescribe such rules or issue interpretations of the rules as
the Commission determines to be necessary to prevent
abuse of the exceptions described in this paragraph. The
Commission may also request information from those persons claiming the clearing exception as necessary to prevent
abuse of the exceptions described in this paragraph.
‘‘(8) TRADE EXECUTION.—
‘‘(A) IN GENERAL.—With respect to transactions
involving swaps subject to the clearing requirement of paragraph (1), counterparties shall—
‘‘(i) execute the transaction on a board of trade
designated as a contract market under section 5; or
‘‘(ii) execute the transaction on a swap execution
facility registered under 5h or a swap execution facility
that is exempt from registration under section 5h(f)
of this Act.
‘‘(B) EXCEPTION.—The requirements of clauses (i) and
(ii) of subparagraph (A) shall not apply if no board of
trade or swap execution facility makes the swap available
to trade or for swap transactions subject to the clearing
exception under paragraph (7).’’.
(b) COMMODITY EXCHANGE ACT.—Section 2 of the Commodity
Exchange Act (7 U.S.C. 2) is amended by adding at the end the
following:
‘‘(j) COMMITTEE APPROVAL BY BOARD.—Exemptions from the
requirements of subsection (h)(1) to clear a swap and subsection
(h)(8) to execute a swap through a board of trade or swap execution
facility shall be available to a counterparty that is an issuer of
securities that are registered under section 12 of the Securities
Exchange Act of 1934 (15 U.S.C. 78l) or that is required to file
reports pursuant to section 15(d) of the Securities Exchange Act
of 1934 (15 U.S.C. 78o) only if an appropriate committee of the
issuer’s board or governing body has reviewed and approved its
decision to enter into swaps that are subject to such exemptions.’’.

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PUBLIC LAW 111–203—JULY 21, 2010
(c) GRANDFATHER PROVISIONS.—
(1) LEGAL CERTAINTY FOR CERTAIN TRANSACTIONS IN EXEMPT
COMMODITIES.—Not later than 60 days after the date of enactment of this Act, a person may submit to the Commodity
Futures Trading Commission a petition to remain subject to
section 2(h) of the Commodity Exchange Act (7 U.S.C. 2(h))
(as in effect on the day before the date of enactment of this
Act).
(2) CONSIDERATION; AUTHORITY OF COMMODITY FUTURES
TRADING COMMISSION.—The Commodity Futures Trading
Commission—
(A) shall consider any petition submitted under
subparagraph (A) in a prompt manner; and
(B) may allow a person to continue operating subject
to section 2(h) of the Commodity Exchange Act (7 U.S.C.
2(h)) (as in effect on the day before the date of enactment
of this Act) for not longer than a 1-year period.
(3) AGRICULTURAL SWAPS.—
(A) IN GENERAL.—Except as provided in subparagraph
(B), no person shall offer to enter into, enter into, or confirm
the execution of, any swap in an agricultural commodity
(as defined by the Commodity Futures Trading Commission).
(B) EXCEPTION.—Notwithstanding subparagraph (A), a
person may offer to enter into, enter into, or confirm the
execution of, any swap in an agricultural commodity pursuant to section 4(c) of the Commodity Exchange Act (7
U.S.C. 6(c)) or any rule, regulation, or order issued thereunder (including any rule, regulation, or order in effect
as of the date of enactment of this Act) by the Commodity
Futures Trading Commission to allow swaps under such
terms and conditions as the Commission shall prescribe.
(4) REQUIRED REPORTING.—If the exception described in
section 2(h)(8)(B) of the Commodity Exchange Act applies, the
counterparties shall comply with any recordkeeping and transaction reporting requirements that may be prescribed by the
Commission with respect to swaps subject to section 2(h)(8)(B)
of the Commodity Exchange Act.

7 USC 2 note.
Deadline.

Regulations.

Compliance.
Records.

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SEC. 724. SWAPS; SEGREGATION AND BANKRUPTCY TREATMENT.

(a) SEGREGATION REQUIREMENTS FOR CLEARED SWAPS.—Section
4d of the Commodity Exchange Act (7 U.S.C. 6d) (as amended
by section 732) is amended by adding at the end the following:
‘‘(f) SWAPS.—
‘‘(1) REGISTRATION REQUIREMENT.—It shall be unlawful for
any person to accept any money, securities, or property (or
to extend any credit in lieu of money, securities, or property)
from, for, or on behalf of a swaps customer to margin, guarantee, or secure a swap cleared by or through a derivatives
clearing organization (including money, securities, or property
accruing to the customer as the result of such a swap), unless
the person shall have registered under this Act with the
Commission as a futures commission merchant, and the registration shall not have expired nor been suspended nor
revoked.
‘‘(2) CLEARED SWAPS.—

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124 STAT. 1683

‘‘(A) SEGREGATION REQUIRED.—A futures commission
merchant shall treat and deal with all money, securities,
and property of any swaps customer received to margin,
guarantee, or secure a swap cleared by or though a derivatives clearing organization (including money, securities, or
property accruing to the swaps customer as the result
of such a swap) as belonging to the swaps customer.
‘‘(B) COMMINGLING PROHIBITED.—Money, securities,
and property of a swaps customer described in subparagraph (A) shall be separately accounted for and shall not
be commingled with the funds of the futures commission
merchant or be used to margin, secure, or guarantee any
trades or contracts of any swaps customer or person other
than the person for whom the same are held.
‘‘(3) EXCEPTIONS.—
‘‘(A) USE OF FUNDS.—
‘‘(i) IN GENERAL.—Notwithstanding paragraph (2),
money, securities, and property of swap customers of
a futures commission merchant described in paragraph
(2) may, for convenience, be commingled and deposited
in the same account or accounts with any bank or
trust company or with a derivatives clearing organization.
‘‘(ii) WITHDRAWAL.—Notwithstanding paragraph
(2), such share of the money, securities, and property
described in clause (i) as in the normal course of business shall be necessary to margin, guarantee, secure,
transfer, adjust, or settle a cleared swap with a derivatives clearing organization, or with any member of
the derivatives clearing organization, may be withdrawn and applied to such purposes, including the
payment of commissions, brokerage, interest, taxes,
storage, and other charges, lawfully accruing in connection with the cleared swap.
‘‘(B) COMMISSION ACTION.—Notwithstanding paragraph
(2), in accordance with such terms and conditions as the
Commission may prescribe by rule, regulation, or order,
any money, securities, or property of the swaps customers
of a futures commission merchant described in paragraph
(2) may be commingled and deposited in customer accounts
with any other money, securities, or property received by
the futures commission merchant and required by the
Commission to be separately accounted for and treated
and dealt with as belonging to the swaps customer of
the futures commission merchant.
‘‘(4) PERMITTED INVESTMENTS.—Money described in paragraph (2) may be invested in obligations of the United States,
in general obligations of any State or of any political subdivision
of a State, and in obligations fully guaranteed as to principal
and interest by the United States, or in any other investment
that the Commission may by rule or regulation prescribe, and
such investments shall be made in accordance with such rules
and regulations and subject to such conditions as the Commission may prescribe.
‘‘(5) COMMODITY CONTRACT.—A swap cleared by or through
a derivatives clearing organization shall be considered to be
a commodity contract as such term is defined in section 761

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7 USC 6s.

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PUBLIC LAW 111–203—JULY 21, 2010

of title 11, United States Code, with regard to all money,
securities, and property of any swaps customer received by
a futures commission merchant or a derivatives clearing
organization to margin, guarantee, or secure the swap
(including money, securities, or property accruing to the customer as the result of the swap).
‘‘(6) PROHIBITION.—It shall be unlawful for any person,
including any derivatives clearing organization and any depository institution, that has received any money, securities, or
property for deposit in a separate account or accounts as provided in paragraph (2) to hold, dispose of, or use any such
money, securities, or property as belonging to the depositing
futures commission merchant or any person other than the
swaps customer of the futures commission merchant.’’.
(b) BANKRUPTCY TREATMENT OF CLEARED SWAPS.—Section 761
of title 11, United States Code, is amended—
(1) in paragraph (4), by striking subparagraph (F) and
inserting the following:
‘‘(F)(i) any other contract, option, agreement, or transaction that is similar to a contract, option, agreement,
or transaction referred to in this paragraph; and
‘‘(ii) with respect to a futures commission merchant
or a clearing organization, any other contract, option, agreement, or transaction, in each case, that is cleared by a
clearing organization;’’; and
(2) in paragraph (9)(A)(i), by striking ‘‘the commodity
futures account’’ and inserting ‘‘a commodity contract account’’.
(c) SEGREGATION REQUIREMENTS FOR UNCLEARED SWAPS.—Section 4s of the Commodity Exchange Act (as added by section 731)
is amended by adding at the end the following:
‘‘(l) SEGREGATION REQUIREMENTS.—
‘‘(1) SEGREGATION OF ASSETS HELD AS COLLATERAL IN
UNCLEARED SWAP TRANSACTIONS.—
‘‘(A) NOTIFICATION.—A swap dealer or major swap
participant shall be required to notify the counterparty
of the swap dealer or major swap participant at the beginning of a swap transaction that the counterparty has the
right to require segregation of the funds or other property
supplied to margin, guarantee, or secure the obligations
of the counterparty.
‘‘(B) SEGREGATION AND MAINTENANCE OF FUNDS.—At
the request of a counterparty to a swap that provides
funds or other property to a swap dealer or major swap
participant to margin, guarantee, or secure the obligations
of the counterparty, the swap dealer or major swap participant shall—
‘‘(i) segregate the funds or other property for the
benefit of the counterparty; and
‘‘(ii) in accordance with such rules and regulations
as the Commission may promulgate, maintain the
funds or other property in a segregated account separate from the assets and other interests of the swap
dealer or major swap participant.
‘‘(2) APPLICABILITY.—The requirements described in paragraph (1) shall—

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124 STAT. 1685

‘‘(A) apply only to a swap between a counterparty and
a swap dealer or major swap participant that is not submitted for clearing to a derivatives clearing organization;
and
‘‘(B)(i) not apply to variation margin payments; or
‘‘(ii) not preclude any commercial arrangement
regarding—
‘‘(I) the investment of segregated funds or other
property that may only be invested in such investments
as the Commission may permit by rule or regulation;
and
‘‘(II) the related allocation of gains and losses
resulting from any investment of the segregated funds
or other property.
‘‘(3) USE OF INDEPENDENT THIRD-PARTY CUSTODIANS.—The
segregated account described in paragraph (1) shall be—
‘‘(A) carried by an independent third-party custodian;
and
‘‘(B) designated as a segregated account for and on
behalf of the counterparty.
‘‘(4) REPORTING REQUIREMENT.—If the counterparty does
not choose to require segregation of the funds or other property
supplied to margin, guarantee, or secure the obligations of
the counterparty, the swap dealer or major swap participant
shall report to the counterparty of the swap dealer or major
swap participant on a quarterly basis that the back office
procedures of the swap dealer or major swap participant
relating to margin and collateral requirements are in compliance with the agreement of the counterparties.’’.

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SEC. 725. DERIVATIVES CLEARING ORGANIZATIONS.

(a) REGISTRATION REQUIREMENT.—Section 5b of the Commodity
Exchange Act (7 U.S.C. 7a–1) is amended by striking subsections
(a) and (b) and inserting the following:
‘‘(a) REGISTRATION REQUIREMENT.—
‘‘(1) IN GENERAL.—Except as provided in paragraph (2),
it shall be unlawful for a derivatives clearing organization,
directly or indirectly, to make use of the mails or any means
or instrumentality of interstate commerce to perform the functions of a derivatives clearing organization with respect to—
‘‘(A) a contract of sale of a commodity for future
delivery (or an option on the contract of sale) or option
on a commodity, in each case, unless the contract or option
is—
‘‘(i) excluded from this Act by subsection
(a)(1)(C)(i), (c), or (f) of section 2; or
‘‘(ii) a security futures product cleared by a clearing
agency registered with the Securities and Exchange
Commission under the Securities Exchange Act of 1934
(15 U.S.C. 78a et seq.); or
‘‘(B) a swap.
‘‘(2) EXCEPTION.—Paragraph (1) shall not apply to a derivatives clearing organization that is registered with the Commission.
‘‘(b) VOLUNTARY REGISTRATION.—A person that clears 1 or more
agreements, contracts, or transactions that are not required to

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124 STAT. 1686

PUBLIC LAW 111–203—JULY 21, 2010

be cleared under this Act may register with the Commission as
a derivatives clearing organization.’’.
(b) REGISTRATION FOR DEPOSITORY INSTITUTIONS AND CLEARING
AGENCIES; EXEMPTIONS; COMPLIANCE OFFICER; ANNUAL REPORTS.—
Section 5b of the Commodity Exchange Act (7 U.S.C. 7a–1) is
amended by adding at the end the following:
‘‘(g) EXISTING DEPOSITORY INSTITUTIONS AND CLEARING AGENCIES.—
‘‘(1) IN GENERAL.—A depository institution or clearing
agency registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934 (15 U.S.C.
78a et seq.) that is required to be registered as a derivatives
clearing organization under this section is deemed to be registered under this section to the extent that, before the date
of enactment of this subsection—
‘‘(A) the depository institution cleared swaps as a multilateral clearing organization; or
‘‘(B) the clearing agency cleared swaps.
‘‘(2) CONVERSION OF DEPOSITORY INSTITUTIONS.—A depository institution to which this subsection applies may, by the
vote of the shareholders owning not less than 51 percent of
the voting interests of the depository institution, be converted
into a State corporation, partnership, limited liability company,
or similar legal form pursuant to a plan of conversion, if the
conversion is not in contravention of applicable State law.
‘‘(3) SHARING OF INFORMATION.—The Securities and
Exchange Commission shall make available to the Commission,
upon request, all information determined to be relevant by
the Securities and Exchange Commission regarding a clearing
agency deemed to be registered with the Commission under
paragraph (1).
‘‘(h) EXEMPTIONS.—The Commission may exempt, conditionally
or unconditionally, a derivatives clearing organization from registration under this section for the clearing of swaps if the Commission
determines that the derivatives clearing organization is subject
to comparable, comprehensive supervision and regulation by the
Securities and Exchange Commission or the appropriate government authorities in the home country of the organization. Such
conditions may include, but are not limited to, requiring that the
derivatives clearing organization be available for inspection by the
Commission and make available all information requested by the
Commission.
‘‘(i) DESIGNATION OF CHIEF COMPLIANCE OFFICER.—
‘‘(1) IN GENERAL.—Each derivatives clearing organization
shall designate an individual to serve as a chief compliance
officer.
‘‘(2) DUTIES.—The chief compliance officer shall—
‘‘(A) report directly to the board or to the senior officer
of the derivatives clearing organization;
‘‘(B) review the compliance of the derivatives clearing
organization with respect to the core principles described
in subsection (c)(2);
‘‘(C) in consultation with the board of the derivatives
clearing organization, a body performing a function similar
to the board of the derivatives clearing organization, or
the senior officer of the derivatives clearing organization,
resolve any conflicts of interest that may arise;

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124 STAT. 1687

‘‘(D) be responsible for administering each policy and
procedure that is required to be established pursuant to
this section;
‘‘(E) ensure compliance with this Act (including regulations) relating to agreements, contracts, or transactions,
including each rule prescribed by the Commission under
this section;
‘‘(F) establish procedures for the remediation of noncompliance issues identified by the compliance officer
through any—
‘‘(i) compliance office review;
‘‘(ii) look-back;
‘‘(iii) internal or external audit finding;
‘‘(iv) self-reported error; or
‘‘(v) validated complaint; and
‘‘(G) establish and follow appropriate procedures for
the handling, management response, remediation, retesting, and closing of noncompliance issues.
‘‘(3) ANNUAL REPORTS.—
‘‘(A) IN GENERAL.—In accordance with rules prescribed
by the Commission, the chief compliance officer shall
annually prepare and sign a report that contains a description of—
‘‘(i) the compliance of the derivatives clearing
organization of the compliance officer with respect to
this Act (including regulations); and
‘‘(ii) each policy and procedure of the derivatives
clearing organization of the compliance officer
(including the code of ethics and conflict of interest
policies of the derivatives clearing organization).
‘‘(B) REQUIREMENTS.—A compliance report under
subparagraph (A) shall—
‘‘(i) accompany each appropriate financial report
of the derivatives clearing organization that is required
to be furnished to the Commission pursuant to this
section; and
‘‘(ii) include a certification that, under penalty of
law, the compliance report is accurate and complete.’’.
(c) CORE PRINCIPLES FOR DERIVATIVES CLEARING ORGANIZATIONS.—Section 5b(c) of the Commodity Exchange Act (7 U.S.C.
7a–1(c)) is amended by striking paragraph (2) and inserting the
following:
‘‘(2) CORE PRINCIPLES FOR DERIVATIVES CLEARING ORGANIZATIONS.—
‘‘(A) COMPLIANCE.—
‘‘(i) IN GENERAL.—To be registered and to maintain
registration as a derivatives clearing organization, a
derivatives clearing organization shall comply with
each core principle described in this paragraph and
any requirement that the Commission may impose by
rule or regulation pursuant to section 8a(5).
‘‘(ii) DISCRETION OF DERIVATIVES CLEARING
ORGANIZATION.—Subject to any rule or regulation prescribed by the Commission, a derivatives clearing
organization shall have reasonable discretion in establishing the manner by which the derivatives clearing

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124 STAT. 1688

PUBLIC LAW 111–203—JULY 21, 2010
organization complies with each core principle
described in this paragraph.
‘‘(B) FINANCIAL RESOURCES.—
‘‘(i) IN GENERAL.—Each derivatives clearing
organization shall have adequate financial, operational,
and managerial resources, as determined by the
Commission, to discharge each responsibility of the
derivatives clearing organization.
‘‘(ii) MINIMUM AMOUNT OF FINANCIAL RESOURCES.—
Each derivatives clearing organization shall possess
financial resources that, at a minimum, exceed the
total amount that would—
‘‘(I) enable the organization to meet its financial obligations to its members and participants
notwithstanding a default by the member or
participant creating the largest financial exposure
for that organization in extreme but plausible
market conditions; and
‘‘(II) enable the derivatives clearing organization to cover the operating costs of the derivatives
clearing organization for a period of 1 year (as
calculated on a rolling basis).
‘‘(C) PARTICIPANT AND PRODUCT ELIGIBILITY.—
‘‘(i) IN GENERAL.—Each derivatives clearing
organization shall establish—
‘‘(I) appropriate admission and continuing
eligibility standards (including sufficient financial
resources and operational capacity to meet obligations arising from participation in the derivatives
clearing organization) for members of, and participants in, the derivatives clearing organization; and
‘‘(II) appropriate standards for determining the
eligibility of agreements, contracts, or transactions
submitted to the derivatives clearing organization
for clearing.
‘‘(ii) REQUIRED PROCEDURES.—Each derivatives
clearing organization shall establish and implement
procedures to verify, on an ongoing basis, the compliance of each participation and membership requirement of the derivatives clearing organization.
‘‘(iii) REQUIREMENTS.—The participation and membership requirements of each derivatives clearing
organization shall—
‘‘(I) be objective;
‘‘(II) be publicly disclosed; and
‘‘(III) permit fair and open access.
‘‘(D) RISK MANAGEMENT.—
‘‘(i) IN GENERAL.—Each derivatives clearing
organization shall ensure that the derivatives clearing
organization possesses the ability to manage the risks
associated with discharging the responsibilities of the
derivatives clearing organization through the use of
appropriate tools and procedures.
‘‘(ii) MEASUREMENT OF CREDIT EXPOSURE.—Each
derivatives clearing organization shall—
‘‘(I) not less than once during each business
day of the derivatives clearing organization,

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124 STAT. 1689

measure the credit exposures of the derivatives
clearing organization to each member and participant of the derivatives clearing organization; and
‘‘(II) monitor each exposure described in subclause (I) periodically during the business day of
the derivatives clearing organization.
‘‘(iii) LIMITATION OF EXPOSURE TO POTENTIAL
LOSSES FROM DEFAULTS.—Each derivatives clearing
organization, through margin requirements and other
risk control mechanisms, shall limit the exposure of
the derivatives clearing organization to potential losses
from defaults by members and participants of the
derivatives clearing organization to ensure that—
‘‘(I) the operations of the derivatives clearing
organization would not be disrupted; and
‘‘(II) nondefaulting members or participants
would not be exposed to losses that nondefaulting
members or participants cannot anticipate or control.
REQUIREMENTS.—The
margin
‘‘(iv)
MARGIN
required from each member and participant of a derivatives clearing organization shall be sufficient to cover
potential exposures in normal market conditions.
‘‘(v) REQUIREMENTS REGARDING MODELS AND
PARAMETERS.—Each model and parameter used in setting margin requirements under clause (iv) shall be—
‘‘(I) risk-based; and
‘‘(II) reviewed on a regular basis.
‘‘(E) SETTLEMENT PROCEDURES.—Each derivatives
clearing organization shall—
‘‘(i) complete money settlements on a timely basis
(but not less frequently than once each business day);
‘‘(ii) employ money settlement arrangements to
eliminate or strictly limit the exposure of the derivatives clearing organization to settlement bank risks
(including credit and liquidity risks from the use of
banks to effect money settlements);
‘‘(iii) ensure that money settlements are final when
effected;
‘‘(iv) maintain an accurate record of the flow of
funds associated with each money settlement;
‘‘(v) possess the ability to comply with each term
and condition of any permitted netting or offset
arrangement with any other clearing organization;
‘‘(vi) regarding physical settlements, establish
rules that clearly state each obligation of the derivatives clearing organization with respect to physical
deliveries; and
‘‘(vii) ensure that each risk arising from an obligation described in clause (vi) is identified and managed.
‘‘(F) TREATMENT OF FUNDS.—
‘‘(i) REQUIRED STANDARDS AND PROCEDURES.—Each
derivatives clearing organization shall establish standards and procedures that are designed to protect and
ensure the safety of member and participant funds
and assets.

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124 STAT. 1690

‘‘(ii) HOLDING OF FUNDS AND ASSETS.—Each derivatives clearing organization shall hold member and
participant funds and assets in a manner by which
to minimize the risk of loss or of delay in the access
by the derivatives clearing organization to the assets
and funds.
‘‘(iii) PERMISSIBLE INVESTMENTS.—Funds and
assets invested by a derivatives clearing organization
shall be held in instruments with minimal credit,
market, and liquidity risks.
‘‘(G) DEFAULT RULES AND PROCEDURES.—
‘‘(i) IN GENERAL.—Each derivatives clearing
organization shall have rules and procedures designed
to allow for the efficient, fair, and safe management
of events during which members or participants—
‘‘(I) become insolvent; or
‘‘(II) otherwise default on the obligations of
the members or participants to the derivatives
clearing organization.
‘‘(ii) DEFAULT PROCEDURES.—Each derivatives
clearing organization shall—
‘‘(I) clearly state the default procedures of the
derivatives clearing organization;
‘‘(II) make publicly available the default rules
of the derivatives clearing organization; and
‘‘(III) ensure that the derivatives clearing
organization may take timely action—
‘‘(aa) to contain losses and liquidity pressures; and
‘‘(bb) to continue meeting each obligation
of the derivatives clearing organization.
‘‘(H) RULE ENFORCEMENT.—Each derivatives clearing
organization shall—
‘‘(i) maintain adequate arrangements and
resources for—
‘‘(I) the effective monitoring and enforcement
of compliance with the rules of the derivatives
clearing organization; and
‘‘(II) the resolution of disputes;
‘‘(ii) have the authority and ability to discipline,
limit, suspend, or terminate the activities of a member
or participant due to a violation by the member or
participant of any rule of the derivatives clearing
organization; and
‘‘(iii) report to the Commission regarding rule
enforcement activities and sanctions imposed against
members and participants as provided in clause (ii).
‘‘(I) SYSTEM SAFEGUARDS.—Each derivatives clearing
organization shall—
‘‘(i) establish and maintain a program of risk analysis and oversight to identify and minimize sources
of operational risk through the development of appropriate controls and procedures, and automated systems, that are reliable, secure, and have adequate scalable capacity;

Public
information.

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Reports.

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‘‘(ii) establish and maintain emergency procedures,
backup facilities, and a plan for disaster recovery that
allows for—
‘‘(I) the timely recovery and resumption of
operations of the derivatives clearing organization;
and
‘‘(II) the fulfillment of each obligation and
responsibility of the derivatives clearing organization; and
‘‘(iii) periodically conduct tests to verify that the
backup resources of the derivatives clearing organization are sufficient to ensure daily processing, clearing,
and settlement.
‘‘(J) REPORTING.—Each derivatives clearing organization shall provide to the Commission all information that
the Commission determines to be necessary to conduct
oversight of the derivatives clearing organization.
‘‘(K) RECORDKEEPING.—Each derivatives clearing
organization shall maintain records of all activities related
to the business of the derivatives clearing organization
as a derivatives clearing organization—
‘‘(i) in a form and manner that is acceptable to
the Commission; and
‘‘(ii) for a period of not less than 5 years.
‘‘(L) PUBLIC INFORMATION.—
‘‘(i) IN GENERAL.—Each derivatives clearing
organization shall provide to market participants sufficient information to enable the market participants
to identify and evaluate accurately the risks and costs
associated with using the services of the derivatives
clearing organization.
‘‘(ii) AVAILABILITY OF INFORMATION.—Each derivatives clearing organization shall make information concerning the rules and operating and default procedures
governing the clearing and settlement systems of the
derivatives clearing organization available to market
participants.
‘‘(iii) PUBLIC DISCLOSURE.—Each derivatives
clearing organization shall disclose publicly and to the
Commission information concerning—
‘‘(I) the terms and conditions of each contract,
agreement, and transaction cleared and settled by
the derivatives clearing organization;
‘‘(II) each clearing and other fee that the
derivatives clearing organization charges the members and participants of the derivatives clearing
organization;
‘‘(III) the margin-setting methodology, and the
size and composition, of the financial resource
package of the derivatives clearing organization;
‘‘(IV) daily settlement prices, volume, and open
interest for each contract settled or cleared by
the derivatives clearing organization; and
‘‘(V) any other matter relevant to participation
in the settlement and clearing activities of the
derivatives clearing organization.

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Contracts.

Regulations.

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Regulations.
7 USC 7a–1 note.

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‘‘(M)
INFORMATION-SHARING.—Each
derivatives
clearing organization shall—
‘‘(i) enter into, and abide by the terms of, each
appropriate and applicable domestic and international
information-sharing agreement; and
‘‘(ii) use relevant information obtained from each
agreement described in clause (i) in carrying out the
risk management program of the derivatives clearing
organization.
‘‘(N) ANTITRUST CONSIDERATIONS.—Unless necessary or
appropriate to achieve the purposes of this Act, a derivatives clearing organization shall not—
‘‘(i) adopt any rule or take any action that results
in any unreasonable restraint of trade; or
‘‘(ii) impose any material anticompetitive burden.
‘‘(O) GOVERNANCE FITNESS STANDARDS.—
‘‘(i) GOVERNANCE ARRANGEMENTS.—Each derivatives clearing organization shall establish governance
arrangements that are transparent—
‘‘(I) to fulfill public interest requirements; and
‘‘(II) to permit the consideration of the views
of owners and participants.
‘‘(ii) FITNESS STANDARDS.—Each derivatives
clearing organization shall establish and enforce appropriate fitness standards for—
‘‘(I) directors;
‘‘(II) members of any disciplinary committee;
‘‘(III) members of the derivatives clearing
organization;
‘‘(IV) any other individual or entity with direct
access to the settlement or clearing activities of
the derivatives clearing organization; and
‘‘(V) any party affiliated with any individual
or entity described in this clause.
‘‘(P) CONFLICTS OF INTEREST.—Each derivatives
clearing organization shall—
‘‘(i) establish and enforce rules to minimize conflicts of interest in the decision-making process of the
derivatives clearing organization; and
‘‘(ii) establish a process for resolving conflicts of
interest described in clause (i).
‘‘(Q) COMPOSITION OF GOVERNING BOARDS.—Each
derivatives clearing organization shall ensure that the composition of the governing board or committee of the derivatives clearing organization includes market participants.
‘‘(R) LEGAL RISK.—Each derivatives clearing organization shall have a well-founded, transparent, and enforceable
legal framework for each aspect of the activities of the
derivatives clearing organization.’’.
(d) CONFLICTS OF INTEREST.—The Commodity Futures Trading
Commission shall adopt rules mitigating conflicts of interest in
connection with the conduct of business by a swap dealer or a
major swap participant with a derivatives clearing organization,
board of trade, or a swap execution facility that clears or trades
swaps in which the swap dealer or major swap participant has
a material debt or material equity investment.

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124 STAT. 1693

(e) REPORTING REQUIREMENTS.—Section 5b of the Commodity
Exchange Act (7 U.S.C. 7a–1) (as amended by subsection (b)) is
amended by adding at the end the following:
‘‘(k) REPORTING REQUIREMENTS.—
‘‘(1) DUTY OF DERIVATIVES CLEARING ORGANIZATIONS.—Each
derivatives clearing organization that clears swaps shall provide
to the Commission all information that is determined by the
Commission to be necessary to perform each responsibility of
the Commission under this Act.
‘‘(2) DATA COLLECTION AND MAINTENANCE REQUIREMENTS.—
The Commission shall adopt data collection and maintenance
requirements for swaps cleared by derivatives clearing
organizations that are comparable to the corresponding requirements for—
‘‘(A) swaps data reported to swap data repositories;
and
‘‘(B) swaps traded on swap execution facilities.
‘‘(3) REPORTS ON SECURITY-BASED SWAP AGREEMENTS TO
BE SHARED WITH THE SECURITIES AND EXCHANGE COMMISSION.—
‘‘(A) IN GENERAL.—A derivatives clearing organization
that clears security-based swap agreements (as defined
in section 1a(47)(A)(v)) shall, upon request, open to inspection and examination to the Securities and Exchange
Commission all books and records relating to such securitybased swap agreements, consistent with the confidentiality
and disclosure requirements of section 8.
‘‘(B) JURISDICTION.—Nothing in this paragraph shall
affect the exclusive jurisdiction of the Commission to prescribe recordkeeping and reporting requirements for a
derivatives clearing organization that is registered with
the Commission.
‘‘(4) INFORMATION SHARING.—Subject to section 8, and upon
request, the Commission shall share information collected
under paragraph (2) with—
‘‘(A) the Board;
‘‘(B) the Securities and Exchange Commission;
‘‘(C) each appropriate prudential regulator;
‘‘(D) the Financial Stability Oversight Council;
‘‘(E) the Department of Justice; and
‘‘(F) any other person that the Commission determines
to be appropriate, including—
‘‘(i) foreign financial supervisors (including foreign
futures authorities);
‘‘(ii) foreign central banks; and
‘‘(iii) foreign ministries.
‘‘(5) CONFIDENTIALITY AND INDEMNIFICATION AGREEMENT.—
Before the Commission may share information with any entity
described in paragraph (4)—
‘‘(A) the Commission shall receive a written agreement
from each entity stating that the entity shall abide by
the confidentiality requirements described in section 8
relating to the information on swap transactions that is
provided; and
‘‘(B) each entity shall agree to indemnify the Commission for any expenses arising from litigation relating to
the information provided under section 8.

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‘‘(6) PUBLIC INFORMATION.—Each derivatives clearing
organization that clears swaps shall provide to the Commission
(including any designee of the Commission) information under
paragraph (2) in such form and at such frequency as is required
by the Commission to comply with the public reporting requirements contained in section 2(a)(13).’’.
(f) PUBLIC DISCLOSURE.—Section 8(e) of the Commodity
Exchange Act (7 U.S.C. 12(e)) is amended in the last sentence—
(1) by inserting ‘‘, central bank and ministries,’’ after
‘‘department’’ each place it appears; and
(2) by striking ‘‘. is a party.’’ and inserting ‘‘, is a party.’’.
(g) LEGAL CERTAINTY FOR IDENTIFIED BANKING PRODUCTS.—
(1) REPEALS.—The Legal Certainty for Bank Products Act
of 2000 (7 U.S.C. 27 et seq.) is amended—
(A) by striking sections 404 and 407 (7 U.S.C. 27b,
27e);
(B) in section 402 (7 U.S.C. 27), by striking subsection
(d); and
(C) in section 408 (7 U.S.C. 27f)—
(i) in subsection (c)—
(I) by striking ‘‘in the case’’ and all that follows
through ‘‘a hybrid’’ and inserting ‘‘in the case of
a hybrid’’;
(II) by striking ‘‘; or’’ and inserting a period;
and
(III) by striking paragraph (2);
(ii) by striking subsection (b); and
(iii) by redesignating subsection (c) as subsection
(b).
(2) LEGAL CERTAINTY FOR BANK PRODUCTS ACT OF 2000.—
Section 403 of the Legal Certainty for Bank Products Act of
2000 (7 U.S.C. 27a) is amended to read as follows:

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‘‘SEC. 403. EXCLUSION OF IDENTIFIED BANKING PRODUCT.

‘‘(a) EXCLUSION.—Except as provided in subsection (b) or (c)—
‘‘(1) the Commodity Exchange Act (7 U.S.C. 1 et seq.)
shall not apply to, and the Commodity Futures Trading
Commission shall not exercise regulatory authority under the
Commodity Exchange Act (7 U.S.C. 1 et seq.) with respect
to, an identified banking product; and
‘‘(2) the definitions of ‘security-based swap’ in section
3(a)(68) of the Securities Exchange Act of 1934 and ‘securitybased swap agreement’ in section 1a(47)(A)(v) of the Commodity
Exchange Act and section 3(a)(78) of the Securities Exchange
Act of 1934 do not include any identified bank product.
‘‘(b) EXCEPTION.—An appropriate Federal banking agency may
except an identified banking product of a bank under its regulatory
jurisdiction from the exclusion in subsection (a) if the agency determines, in consultation with the Commodity Futures Trading
Commission and the Securities and Exchange Commission, that
the product—
‘‘(1) would meet the definition of a ‘swap’ under section
1a(47) of the Commodity Exchange Act (7 U.S.C. 1a) or a
‘security-based swap’ under that section 3(a)(68) of the Securities Exchange Act of 1934; and
‘‘(2) has become known to the trade as a swap or securitybased swap, or otherwise has been structured as an identified

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124 STAT. 1695

banking product for the purpose of evading the provisions of
the Commodity Exchange Act (7 U.S.C. 1 et seq.), the Securities
Act of 1933 (15 U.S.C. 77a et seq.), or the Securities Exchange
Act of 1934 (15 U.S.C. 78a et seq.).
‘‘(c) EXCEPTION.—The exclusions in subsection (a) shall not
apply to an identified bank product that—
‘‘(1) is a product of a bank that is not under the regulatory
jurisdiction of an appropriate Federal banking agency;
‘‘(2) meets the definition of swap in section 1a(47) of the
Commodity Exchange Act or security-based swap in section
3(a)(68) of the Securities Exchange Act of 1934; and
‘‘(3) has become known to the trade as a swap or securitybased swap, or otherwise has been structured as an identified
banking product for the purpose of evading the provisions of
the Commodity Exchange Act (7 U.S.C. 1 et seq.), the Securities
Act of 1933 (15 U.S.C. 77a et seq.), or the Securities Exchange
Act of 1934 (15 U.S.C. 78a et seq.).’’.
(h) REDUCING CLEARING SYSTEMIC RISK.—Section 5b(f)(1) of
the Commodity Exchange Act (7 U.S.C. 7a-1(F)(i)) is amended by
adding at the end the following: ‘‘In order to minimize systemic
risk, under no circumstances shall a derivatives clearing organization be compelled to accept the counterparty credit risk of another
clearing organization.’’.

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SEC. 726. RULEMAKING ON CONFLICT OF INTEREST.

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15 USC 8323.

(a) IN GENERAL.—In order to mitigate conflicts of interest,
not later than 180 days after the date of enactment of the Wall
Street Transparency and Accountability Act of 2010, the Commodity
Futures Trading Commission shall adopt rules which may include
numerical limits on the control of, or the voting rights with respect
to, any derivatives clearing organization that clears swaps, or swap
execution facility or board of trade designated as a contract market
that posts swaps or makes swaps available for trading, by a bank
holding company (as defined in section 2 of the Bank Holding
Company Act of 1956 (12 U.S.C. 1841)) with total consolidated
assets of $50,000,000,000 or more, a nonbank financial company
(as defined in section 102) supervised by the Board, an affiliate
of such a bank holding company or nonbank financial company,
a swap dealer, major swap participant, or associated person of
a swap dealer or major swap participant.
(b) PURPOSES.—The Commission shall adopt rules if it determines, after the review described in subsection (a), that such rules
are necessary or appropriate to improve the governance of, or to
mitigate systemic risk, promote competition, or mitigate conflicts
of interest in connection with a swap dealer or major swap participant’s conduct of business with, a derivatives clearing organization,
contract market, or swap execution facility that clears or posts
swaps or makes swaps available for trading and in which such
swap dealer or major swap participant has a material debt or
equity investment.
(c) CONSIDERATIONS.—In adopting rules pursuant to this section, the Commodity Futures Trading Commission shall consider
any conflicts of interest arising from the amount of equity owned
by a single investor, the ability to vote, cause the vote of, or
withhold votes entitled to be cast on any matters by the holders
of the ownership interest, and the governance arrangements of
any derivatives clearing organization that clears swaps, or swap

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124 STAT. 1696

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execution facility or board of trade designated as a contract market
that posts swaps or makes swaps available for trading.

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SEC. 727. PUBLIC REPORTING OF SWAP TRANSACTION DATA.

Section 2(a) of the Commodity Exchange Act (7 U.S.C. 2(a))
is amended by adding at the end the following:
‘‘(13) PUBLIC AVAILABILITY OF SWAP TRANSACTION DATA.—
‘‘(A) DEFINITION OF REAL-TIME PUBLIC REPORTING.—
In this paragraph, the term ‘real-time public reporting’
means to report data relating to a swap transaction,
including price and volume, as soon as technologically practicable after the time at which the swap transaction has
been executed.
‘‘(B) PURPOSE.—The purpose of this section is to
authorize the Commission to make swap transaction and
pricing data available to the public in such form and at
such times as the Commission determines appropriate to
enhance price discovery.
‘‘(C) GENERAL RULE.—The Commission is authorized
and required to provide by rule for the public availability
of swap transaction and pricing data as follows:
‘‘(i) With respect to those swaps that are subject
to the mandatory clearing requirement described in
subsection (h)(1) (including those swaps that are
excepted from the requirement pursuant to subsection
(h)(7)), the Commission shall require real-time public
reporting for such transactions.
‘‘(ii) With respect to those swaps that are not subject to the mandatory clearing requirement described
in subsection (h)(1), but are cleared at a registered
derivatives clearing organization, the Commission shall
require real-time public reporting for such transactions.
‘‘(iii) With respect to swaps that are not cleared
at a registered derivatives clearing organization and
which are reported to a swap data repository or the
Commission under subsection (h)(6), the Commission
shall require real-time public reporting for such transactions, in a manner that does not disclose the business
transactions and market positions of any person.
‘‘(iv) With respect to swaps that are determined
to be required to be cleared under subsection (h)(2)
but are not cleared, the Commission shall require realtime public reporting for such transactions.
‘‘(D) REGISTERED ENTITIES AND PUBLIC REPORTING.—
The Commission may require registered entities to publicly
disseminate the swap transaction and pricing data required
to be reported under this paragraph.
‘‘(E) RULEMAKING REQUIRED.—With respect to the rule
providing for the public availability of transaction and
pricing data for swaps described in clauses (i) and (ii)
of subparagraph (C), the rule promulgated by the Commission shall contain provisions—
‘‘(i) to ensure such information does not identify
the participants;

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124 STAT. 1697

‘‘(ii) to specify the criteria for determining what
constitutes a large notional swap transaction (block
trade) for particular markets and contracts;
‘‘(iii) to specify the appropriate time delay for
reporting large notional swap transactions (block
trades) to the public; and
‘‘(iv) that take into account whether the public
disclosure will materially reduce market liquidity.
‘‘(F) TIMELINESS OF REPORTING.—Parties to a swap
(including agents of the parties to a swap) shall be responsible for reporting swap transaction information to the
appropriate registered entity in a timely manner as may
be prescribed by the Commission.
‘‘(G) REPORTING OF SWAPS TO REGISTERED SWAP DATA
REPOSITORIES.—Each swap (whether cleared or uncleared)
shall be reported to a registered swap data repository.
‘‘(14) SEMIANNUAL AND ANNUAL PUBLIC REPORTING OF
AGGREGATE SWAP DATA.—
‘‘(A) IN GENERAL.—In accordance with subparagraph
(B), the Commission shall issue a written report on a
semiannual and annual basis to make available to the
public information relating to—
‘‘(i) the trading and clearing in the major swap
categories; and
‘‘(ii) the market participants and developments in
new products.
‘‘(B) USE; CONSULTATION.—In preparing a report under
subparagraph (A), the Commission shall—
‘‘(i) use information from swap data repositories
and derivatives clearing organizations; and
‘‘(ii) consult with the Office of the Comptroller
of the Currency, the Bank for International Settlements, and such other regulatory bodies as may be
necessary.
‘‘(C) AUTHORITY OF THE COMMISSION.—The Commission
may, by rule, regulation, or order, delegate the public
reporting responsibilities of the Commission under this
paragraph in accordance with such terms and conditions
as the Commission determines to be appropriate and in
the public interest.’’.
SEC. 728. SWAP DATA REPOSITORIES.

The Commodity Exchange Act is amended by inserting after
section 20 (7 U.S.C. 24) the following:

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‘‘SEC. 21. SWAP DATA REPOSITORIES.

7 USC 24a.

‘‘(a) REGISTRATION REQUIREMENT.—
‘‘(1) REQUIREMENT; AUTHORITY OF DERIVATIVES CLEARING
ORGANIZATION.—
‘‘(A) IN GENERAL.—It shall be unlawful for any person,
unless registered with the Commission, directly or
indirectly to make use of the mails or any means or
instrumentality of interstate commerce to perform the functions of a swap data repository.
‘‘(B)
REGISTRATION
OF
DERIVATIVES
CLEARING
ORGANIZATIONS.—A derivatives clearing organization may
register as a swap data repository.

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124 STAT. 1698

PUBLIC LAW 111–203—JULY 21, 2010
‘‘(2) INSPECTION AND EXAMINATION.—Each registered swap
data repository shall be subject to inspection and examination
by any representative of the Commission.
‘‘(3) COMPLIANCE WITH CORE PRINCIPLES.—
‘‘(A) IN GENERAL.—To be registered, and maintain registration, as a swap data repository, the swap data repository shall comply with—
‘‘(i) the requirements and core principles described
in this section; and
‘‘(ii) any requirement that the Commission may
impose by rule or regulation pursuant to section 8a(5).
‘‘(B) REASONABLE DISCRETION OF SWAP DATA REPOSITORY.—Unless otherwise determined by the Commission
by rule or regulation, a swap data repository described
in subparagraph (A) shall have reasonable discretion in
establishing the manner in which the swap data repository
complies with the core principles described in this section.
‘‘(b) STANDARD SETTING.—
‘‘(1) DATA IDENTIFICATION.—
‘‘(A) IN GENERAL.—In accordance with subparagraph
(B), the Commission shall prescribe standards that specify
the data elements for each swap that shall be collected
and maintained by each registered swap data repository.
‘‘(B) REQUIREMENT.—In carrying out subparagraph (A),
the Commission shall prescribe consistent data element
standards applicable to registered entities and reporting
counterparties.
‘‘(2) DATA COLLECTION AND MAINTENANCE.—The Commission shall prescribe data collection and data maintenance standards for swap data repositories.
‘‘(3) COMPARABILITY.—The standards prescribed by the
Commission under this subsection shall be comparable to the
data standards imposed by the Commission on derivatives
clearing organizations in connection with their clearing of
swaps.
‘‘(c) DUTIES.—A swap data repository shall—
‘‘(1) accept data prescribed by the Commission for each
swap under subsection (b);
‘‘(2) confirm with both counterparties to the swap the
accuracy of the data that was submitted;
‘‘(3) maintain the data described in paragraph (1) in such
form, in such manner, and for such period as may be required
by the Commission;
‘‘(4)(A) provide direct electronic access to the Commission
(or any designee of the Commission, including another registered entity); and
‘‘(B) provide the information described in paragraph (1)
in such form and at such frequency as the Commission may
require to comply with the public reporting requirements contained in section 2(a)(13);
‘‘(5) at the direction of the Commission, establish automated
systems for monitoring, screening, and analyzing swap data,
including compliance and frequency of end user clearing exemption claims by individual and affiliated entities;
‘‘(6) maintain the privacy of any and all swap transaction
information that the swap data repository receives from a swap
dealer, counterparty, or any other registered entity; and

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124 STAT. 1699

‘‘(7) on a confidential basis pursuant to section 8, upon
request, and after notifying the Commission of the request,
make available all data obtained by the swap data repository,
including individual counterparty trade and position data, to—
‘‘(A) each appropriate prudential regulator;
‘‘(B) the Financial Stability Oversight Council;
‘‘(C) the Securities and Exchange Commission;
‘‘(D) the Department of Justice; and
‘‘(E) any other person that the Commission determines
to be appropriate, including—
‘‘(i) foreign financial supervisors (including foreign
futures authorities);
‘‘(ii) foreign central banks; and
‘‘(iii) foreign ministries; and
‘‘(8) establish and maintain emergency procedures, backup
facilities, and a plan for disaster recovery that allows for the
timely recovery and resumption of operations and the fulfillment of the responsibilities and obligations of the organization.
‘‘(d) CONFIDENTIALITY AND INDEMNIFICATION AGREEMENT.—
Before the swap data repository may share information with any
entity described in subsection (c)(7)—
‘‘(1) the swap data repository shall receive a written agreement from each entity stating that the entity shall abide by
the confidentiality requirements described in section 8 relating
to the information on swap transactions that is provided; and
‘‘(2) each entity shall agree to indemnify the swap data
repository and the Commission for any expenses arising from
litigation relating to the information provided under section
8.
‘‘(e) DESIGNATION OF CHIEF COMPLIANCE OFFICER.—
‘‘(1) IN GENERAL.—Each swap data repository shall designate an individual to serve as a chief compliance officer.
‘‘(2) DUTIES.—The chief compliance officer shall—
‘‘(A) report directly to the board or to the senior officer
of the swap data repository;
‘‘(B) review the compliance of the swap data repository
with respect to the requirements and core principles
described in this section;
‘‘(C) in consultation with the board of the swap data
repository, a body performing a function similar to the
board of the swap data repository, or the senior officer
of the swap data repository, resolve any conflicts of interest
that may arise;
‘‘(D) be responsible for administering each policy and
procedure that is required to be established pursuant to
this section;
‘‘(E) ensure compliance with this Act (including regulations) relating to agreements, contracts, or transactions,
including each rule prescribed by the Commission under
this section;
‘‘(F) establish procedures for the remediation of noncompliance issues identified by the chief compliance officer
through any—
‘‘(i) compliance office review;
‘‘(ii) look-back;
‘‘(iii) internal or external audit finding;
‘‘(iv) self-reported error; or

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124 STAT. 1700

Certification.

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Regulations.

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PUBLIC LAW 111–203—JULY 21, 2010

‘‘(v) validated complaint; and
‘‘(G) establish and follow appropriate procedures for
the handling, management response, remediation, retesting, and closing of noncompliance issues.
‘‘(3) ANNUAL REPORTS.—
‘‘(A) IN GENERAL.—In accordance with rules prescribed
by the Commission, the chief compliance officer shall
annually prepare and sign a report that contains a description of—
‘‘(i) the compliance of the swap data repository
of the chief compliance officer with respect to this
Act (including regulations); and
‘‘(ii) each policy and procedure of the swap data
repository of the chief compliance officer (including
the code of ethics and conflict of interest policies of
the swap data repository).
‘‘(B) REQUIREMENTS.—A compliance report under
subparagraph (A) shall—
‘‘(i) accompany each appropriate financial report
of the swap data repository that is required to be
furnished to the Commission pursuant to this section;
and
‘‘(ii) include a certification that, under penalty of
law, the compliance report is accurate and complete.
‘‘(f) CORE PRINCIPLES APPLICABLE TO SWAP DATA REPOSITORIES.—
‘‘(1) ANTITRUST CONSIDERATIONS.—Unless necessary or
appropriate to achieve the purposes of this Act, a swap data
repository shall not—
‘‘(A) adopt any rule or take any action that results
in any unreasonable restraint of trade; or
‘‘(B) impose any material anticompetitive burden on
the trading, clearing, or reporting of transactions.
‘‘(2) GOVERNANCE ARRANGEMENTS.—Each swap data repository shall establish governance arrangements that are transparent—
‘‘(A) to fulfill public interest requirements; and
‘‘(B) to support the objectives of the Federal Government, owners, and participants.
‘‘(3) CONFLICTS OF INTEREST.—Each swap data repository
shall—
‘‘(A) establish and enforce rules to minimize conflicts
of interest in the decision-making process of the swap data
repository; and
‘‘(B) establish a process for resolving conflicts of
interest described in subparagraph (A).
‘‘(4) ADDITIONAL DUTIES DEVELOPED BY COMMISSION.—
‘‘(A) IN GENERAL.—The Commission may develop 1 or
more additional duties applicable to swap data repositories.
‘‘(B) CONSIDERATION OF EVOLVING STANDARDS.—In
developing additional duties under subparagraph (A), the
Commission may take into consideration any evolving
standard of the United States or the international community.
‘‘(C) ADDITIONAL DUTIES FOR COMMISSION DESIGNEES.—
The Commission shall establish additional duties for any
registrant described in section 1a(48) in order to minimize

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124 STAT. 1701

conflicts of interest, protect data, ensure compliance, and
guarantee the safety and security of the swap data repository.
‘‘(g) REQUIRED REGISTRATION FOR SWAP DATA REPOSITORIES.—
Any person that is required to be registered as a swap data repository under this section shall register with the Commission regardless of whether that person is also licensed as a bank or registered
with the Securities and Exchange Commission as a swap data
repository.
‘‘(h) RULES.—The Commission shall adopt rules governing persons that are registered under this section.’’.
SEC. 729. REPORTING AND RECORDKEEPING.
7 USC 6q.

‘‘SEC. 4r. REPORTING AND RECORDKEEPING FOR UNCLEARED SWAPS.

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The Commodity Exchange Act is amended by inserting after
section 4q (7 U.S.C. 6o–1) the following:

7 USC 6r.

‘‘(a) REQUIRED REPORTING OF SWAPS NOT ACCEPTED BY ANY
DERIVATIVES CLEARING ORGANIZATION.—
‘‘(1) IN GENERAL.—Each swap that is not accepted for
clearing by any derivatives clearing organization shall be
reported to—
‘‘(A) a swap data repository described in section 21;
or
‘‘(B) in the case in which there is no swap data repository that would accept the swap, to the Commission pursuant to this section within such time period as the Commission may by rule or regulation prescribe.
‘‘(2) TRANSITION RULE FOR PREENACTMENT SWAPS.—
‘‘(A) SWAPS ENTERED INTO BEFORE THE DATE OF ENACTMENT OF THE WALL STREET TRANSPARENCY AND ACCOUNTABILITY ACT OF 2010.—Each swap entered into before the
date of enactment of the Wall Street Transparency and
Accountability Act of 2010, the terms of which have not
expired as of the date of enactment of that Act, shall
be reported to a registered swap data repository or the
Commission by a date that is not later than—
‘‘(i) 30 days after issuance of the interim final
rule; or
‘‘(ii) such other period as the Commission determines to be appropriate.
‘‘(B) COMMISSION RULEMAKING.—The Commission shall
promulgate an interim final rule within 90 days of the
date of enactment of this section providing for the reporting
of each swap entered into before the date of enactment
as referenced in subparagraph (A).
‘‘(C) EFFECTIVE DATE.—The reporting provisions
described in this section shall be effective upon the enactment of this section.
‘‘(3) REPORTING OBLIGATIONS.—
‘‘(A) SWAPS IN WHICH ONLY 1 COUNTERPARTY IS A SWAP
DEALER OR MAJOR SWAP PARTICIPANT.—With respect to a
swap in which only 1 counterparty is a swap dealer or
major swap participant, the swap dealer or major swap
participant shall report the swap as required under paragraphs (1) and (2).
‘‘(B) SWAPS IN WHICH 1 COUNTERPARTY IS A SWAP
DEALER AND THE OTHER A MAJOR SWAP PARTICIPANT.—With

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respect to a swap in which 1 counterparty is a swap dealer
and the other a major swap participant, the swap dealer
shall report the swap as required under paragraphs (1)
and (2).
‘‘(C) OTHER SWAPS.—With respect to any other swap
not described in subparagraph (A) or (B), the counterparties
to the swap shall select a counterparty to report the swap
as required under paragraphs (1) and (2).
‘‘(b) DUTIES OF CERTAIN INDIVIDUALS.—Any individual or entity
that enters into a swap shall meet each requirement described
in subsection (c) if the individual or entity did not—
‘‘(1) clear the swap in accordance with section 2(h)(1); or
‘‘(2) have the data regarding the swap accepted by a swap
data repository in accordance with rules (including timeframes)
adopted by the Commission under section 21.
‘‘(c) REQUIREMENTS.—An individual or entity described in subsection (b) shall—
‘‘(1) upon written request from the Commission, provide
reports regarding the swaps held by the individual or entity
to the Commission in such form and in such manner as the
Commission may request; and
‘‘(2) maintain books and records pertaining to the swaps
held by the individual or entity in such form, in such manner,
and for such period as the Commission may require, which
shall be open to inspection by—
‘‘(A) any representative of the Commission;
‘‘(B) an appropriate prudential regulator;
‘‘(C) the Securities and Exchange Commission;
‘‘(D) the Financial Stability Oversight Council; and
‘‘(E) the Department of Justice.
‘‘(d) IDENTICAL DATA.—In prescribing rules under this section,
the Commission shall require individuals and entities described
in subsection (b) to submit to the Commission a report that contains
data that is not less comprehensive than the data required to
be collected by swap data repositories under section 21.’’.
SEC. 730. LARGE SWAP TRADER REPORTING.

The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended
by adding after section 4s (as added by section 731) the following:

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7 USC 6t.

‘‘SEC. 4t. LARGE SWAP TRADER REPORTING.

‘‘(a) PROHIBITION.—
‘‘(1) IN GENERAL.—Except as provided in paragraph (2),
it shall be unlawful for any person to enter into any swap
that the Commission determines to perform a significant price
discovery function with respect to registered entities if—
‘‘(A) the person directly or indirectly enters into the
swap during any 1 day in an amount equal to or in excess
of such amount as shall be established periodically by
the Commission; and
‘‘(B) the person directly or indirectly has or obtains
a position in the swap equal to or in excess of such amount
as shall be established periodically by the Commission.
‘‘(2) EXCEPTION.—Paragraph (1) shall not apply if—
‘‘(A) the person files or causes to be filed with the
properly designated officer of the Commission such reports

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regarding any transactions or positions described in subparagraphs (A) and (B) of paragraph (1) as the Commission
may require by rule or regulation; and
‘‘(B) in accordance with the rules and regulations of
the Commission, the person keeps books and records of
all such swaps and any transactions and positions in any
related commodity traded on or subject to the rules of
any designated contract market or swap execution facility,
and of cash or spot transactions in, inventories of, and
purchase and sale commitments of, such a commodity.
‘‘(b) REQUIREMENTS.—
‘‘(1) IN GENERAL.—Books and records described in subsection (a)(2)(B) shall—
‘‘(A) show such complete details concerning all transactions and positions as the Commission may prescribe
by rule or regulation;
‘‘(B) be open at all times to inspection and examination
by any representative of the Commission; and
‘‘(C) be open at all times to inspection and examination
by the Securities and Exchange Commission, to the extent
such books and records relate to transactions in swaps
(as that term is defined in section 1a(47)(A)(v)), and consistent with the confidentiality and disclosure requirements
of section 8.
‘‘(2) JURISDICTION.—Nothing in paragraph (1) shall affect
the exclusive jurisdiction of the Commission to prescribe recordkeeping and reporting requirements for large swap traders
under this section.
‘‘(c) APPLICABILITY.—For purposes of this section, the swaps,
futures, and cash or spot transactions and positions of any person
shall include the swaps, futures, and cash or spot transactions
and positions of any persons directly or indirectly controlled by
the person.
‘‘(d) SIGNIFICANT PRICE DISCOVERY FUNCTION.—In making a
determination as to whether a swap performs or affects a significant
price discovery function with respect to registered entities, the
Commission shall consider the factors described in section 4a(a)(3).’’.

Records.

SEC. 731. REGISTRATION AND REGULATION OF SWAP DEALERS AND
MAJOR SWAP PARTICIPANTS.

The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended
by inserting after section 4r (as added by section 729) the following:

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‘‘SEC. 4s. REGISTRATION AND REGULATION OF SWAP DEALERS AND
MAJOR SWAP PARTICIPANTS.

7 USC 6s.

‘‘(a) REGISTRATION.—
‘‘(1) SWAP DEALERS.—It shall be unlawful for any person
to act as a swap dealer unless the person is registered as
a swap dealer with the Commission.
‘‘(2) MAJOR SWAP PARTICIPANTS.—It shall be unlawful for
any person to act as a major swap participant unless the
person is registered as a major swap participant with the
Commission.
‘‘(b) REQUIREMENTS.—
‘‘(1) IN GENERAL.—A person shall register as a swap dealer
or major swap participant by filing a registration application
with the Commission.
‘‘(2) CONTENTS.—

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124 STAT. 1704

‘‘(A) IN GENERAL.—The application shall be made in
such form and manner as prescribed by the Commission,
and shall contain such information, as the Commission
considers necessary concerning the business in which the
applicant is or will be engaged.
‘‘(B) CONTINUAL REPORTING.—A person that is registered as a swap dealer or major swap participant shall
continue to submit to the Commission reports that contain
such information pertaining to the business of the person
as the Commission may require.
‘‘(3) EXPIRATION.—Each registration under this section shall
expire at such time as the Commission may prescribe by rule
or regulation.
‘‘(4) RULES.—Except as provided in subsections (d) and
(e), the Commission may prescribe rules applicable to swap
dealers and major swap participants, including rules that limit
the activities of swap dealers and major swap participants.
‘‘(5) TRANSITION.—Rules under this section shall provide
for the registration of swap dealers and major swap participants
not later than 1 year after the date of enactment of the Wall
Street Transparency and Accountability Act of 2010.
‘‘(6) STATUTORY DISQUALIFICATION.—Except to the extent
otherwise specifically provided by rule, regulation, or order,
it shall be unlawful for a swap dealer or a major swap participant to permit any person associated with a swap dealer or
a major swap participant who is subject to a statutory disqualification to effect or be involved in effecting swaps on behalf
of the swap dealer or major swap participant, if the swap
dealer or major swap participant knew, or in the exercise
of reasonable care should have known, of the statutory disqualification.
‘‘(c) DUAL REGISTRATION.—
‘‘(1) SWAP DEALER.—Any person that is required to be registered as a swap dealer under this section shall register with
the Commission regardless of whether the person also is a
depository institution or is registered with the Securities and
Exchange Commission as a security-based swap dealer.
‘‘(2) MAJOR SWAP PARTICIPANT.—Any person that is required
to be registered as a major swap participant under this section
shall register with the Commission regardless of whether the
person also is a depository institution or is registered with
the Securities and Exchange Commission as a major securitybased swap participant.
‘‘(d) RULEMAKINGS.—
‘‘(1) IN GENERAL.—The Commission shall adopt rules for
persons that are registered as swap dealers or major swap
participants under this section.
‘‘(2) EXCEPTION FOR PRUDENTIAL REQUIREMENTS.—
‘‘(A) IN GENERAL.—The Commission may not prescribe
rules imposing prudential requirements on swap dealers
or major swap participants for which there is a prudential
regulator.
‘‘(B) APPLICABILITY.—Subparagraph (A) does not limit
the authority of the Commission to prescribe rules as
directed under this section.
‘‘(e) CAPITAL AND MARGIN REQUIREMENTS.—
‘‘(1) IN GENERAL.—

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Regulations.
Deadline.

Regulations.

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124 STAT. 1705

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‘‘(A) SWAP DEALERS AND MAJOR SWAP PARTICIPANTS
THAT ARE BANKS.—Each registered swap dealer and major
swap participant for which there is a prudential regulator
shall meet such minimum capital requirements and minimum initial and variation margin requirements as the
prudential regulator shall by rule or regulation prescribe
under paragraph (2)(A).
‘‘(B) SWAP DEALERS AND MAJOR SWAP PARTICIPANTS
THAT ARE NOT BANKS.—Each registered swap dealer and
major swap participant for which there is not a prudential
regulator shall meet such minimum capital requirements
and minimum initial and variation margin requirements
as the Commission shall by rule or regulation prescribe
under paragraph (2)(B).
‘‘(2) RULES.—
‘‘(A) SWAP DEALERS AND MAJOR SWAP PARTICIPANTS
THAT ARE BANKS.—The prudential regulators, in consultation with the Commission and the Securities and Exchange
Commission, shall jointly adopt rules for swap dealers and
major swap participants, with respect to their activities
as a swap dealer or major swap participant, for which
there is a prudential regulator imposing—
‘‘(i) capital requirements; and
‘‘(ii) both initial and variation margin requirements
on all swaps that are not cleared by a registered derivatives clearing organization.
‘‘(B) SWAP DEALERS AND MAJOR SWAP PARTICIPANTS
THAT ARE NOT BANKS.—The Commission shall adopt rules
for swap dealers and major swap participants, with respect
to their activities as a swap dealer or major swap participant, for which there is not a prudential regulator
imposing—
‘‘(i) capital requirements; and
‘‘(ii) both initial and variation margin requirements
on all swaps that are not cleared by a registered derivatives clearing organization.
‘‘(C) CAPITAL.—In setting capital requirements for a
person that is designated as a swap dealer or a major
swap participant for a single type or single class or category
of swap or activities, the prudential regulator and the
Commission shall take into account the risks associated
with other types of swaps or classes of swaps or categories
of swaps engaged in and the other activities conducted
by that person that are not otherwise subject to regulation
applicable to that person by virtue of the status of the
person as a swap dealer or a major swap participant.
‘‘(3) STANDARDS FOR CAPITAL AND MARGIN.—
‘‘(A) IN GENERAL.—To offset the greater risk to the
swap dealer or major swap participant and the financial
system arising from the use of swaps that are not cleared,
the requirements imposed under paragraph (2) shall—
‘‘(i) help ensure the safety and soundness of the
swap dealer or major swap participant; and
‘‘(ii) be appropriate for the risk associated with
the non-cleared swaps held as a swap dealer or major
swap participant.
‘‘(B) RULE OF CONSTRUCTION.—

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124 STAT. 1706

‘‘(i) IN GENERAL.—Nothing in this section shall
limit, or be construed to limit, the authority—
‘‘(I) of the Commission to set financial responsibility rules for a futures commission merchant
or introducing broker registered pursuant to section 4f(a) (except for section 4f(a)(3)) in accordance
with section 4f(b); or
‘‘(II) of the Securities and Exchange Commission to set financial responsibility rules for a
broker or dealer registered pursuant to section
15(b) of the Securities Exchange Act of 1934 (15
U.S.C. 78o(b)) (except for section 15(b)(11) of that
Act (15 U.S.C. 78o(b)(11)) in accordance with section 15(c)(3) of the Securities Exchange Act of 1934
(15 U.S.C. 78o(c)(3)).
‘‘(ii) FUTURES COMMISSION MERCHANTS AND OTHER
DEALERS.—A futures commission merchant, introducing broker, broker, or dealer shall maintain sufficient capital to comply with the stricter of any
applicable capital requirements to which such futures
commission merchant, introducing broker, broker, or
dealer is subject to under this Act or the Securities
Exchange Act of 1934 (15 U.S.C. 78a et seq.).
‘‘(C) MARGIN REQUIREMENTS.—In prescribing margin
requirements under this subsection, the prudential regulator with respect to swap dealers and major swap participants for which it is the prudential regulator and the
Commission with respect to swap dealers and major swap
participants for which there is no prudential regulator
shall permit the use of noncash collateral, as the regulator
or the Commission determines to be consistent with—
‘‘(i) preserving the financial integrity of markets
trading swaps; and
‘‘(ii) preserving the stability of the United States
financial system.
‘‘(D) COMPARABILITY OF CAPITAL AND MARGIN REQUIREMENTS.—
‘‘(i) IN GENERAL.—The prudential regulators, the
Commission, and the Securities and Exchange
Commission shall periodically (but not less frequently
than annually) consult on minimum capital requirements and minimum initial and variation margin
requirements.
‘‘(ii) COMPARABILITY.—The entities described in
clause (i) shall, to the maximum extent practicable,
establish and maintain comparable minimum capital
requirements and minimum initial and variation
margin requirements, including the use of non cash
collateral, for—
‘‘(I) swap dealers; and
‘‘(II) major swap participants.
‘‘(f) REPORTING AND RECORDKEEPING.—
‘‘(1) IN GENERAL.—Each registered swap dealer and major
swap participant—

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124 STAT. 1707

‘‘(A) shall make such reports as are required by the
Commission by rule or regulation regarding the transactions and positions and financial condition of the registered swap dealer or major swap participant;
‘‘(B)(i) for which there is a prudential regulator, shall
keep books and records of all activities related to the business as a swap dealer or major swap participant in such
form and manner and for such period as may be prescribed
by the Commission by rule or regulation; and
‘‘(ii) for which there is no prudential regulator, shall
keep books and records in such form and manner and
for such period as may be prescribed by the Commission
by rule or regulation;
‘‘(C) shall keep books and records described in subparagraph (B) open to inspection and examination by any representative of the Commission; and
‘‘(D) shall keep any such books and records relating
to swaps defined in section 1a(47)(A)(v) open to inspection
and examination by the Securities and Exchange Commission.
‘‘(2) RULES.—The Commission shall adopt rules governing
reporting and recordkeeping for swap dealers and major swap
participants.
‘‘(g) DAILY TRADING RECORDS.—
‘‘(1) IN GENERAL.—Each registered swap dealer and major
swap participant shall maintain daily trading records of the
swaps of the registered swap dealer and major swap participant
and all related records (including related cash or forward transactions) and recorded communications, including electronic
mail, instant messages, and recordings of telephone calls, for
such period as may be required by the Commission by rule
or regulation.
‘‘(2) INFORMATION REQUIREMENTS.—The daily trading
records shall include such information as the Commission shall
require by rule or regulation.
‘‘(3) COUNTERPARTY RECORDS.—Each registered swap dealer
and major swap participant shall maintain daily trading records
for each counterparty in a manner and form that is identifiable
with each swap transaction.
‘‘(4) AUDIT TRAIL.—Each registered swap dealer and major
swap participant shall maintain a complete audit trail for conducting comprehensive and accurate trade reconstructions.
‘‘(5) RULES.—The Commission shall adopt rules governing
daily trading records for swap dealers and major swap participants.
‘‘(h) BUSINESS CONDUCT STANDARDS.—
‘‘(1) IN GENERAL.—Each registered swap dealer and major
swap participant shall conform with such business conduct
standards as prescribed in paragraph (3) and as may be prescribed by the Commission by rule or regulation that relate
to—
‘‘(A) fraud, manipulation, and other abusive practices
involving swaps (including swaps that are offered but not
entered into);
‘‘(B) diligent supervision of the business of the registered swap dealer and major swap participant;
‘‘(C) adherence to all applicable position limits; and

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124 STAT. 1708

‘‘(D) such other matters as the Commission determines
to be appropriate.
‘‘(2) RESPONSIBILITIES WITH RESPECT TO SPECIAL ENTITIES.—
‘‘(A) ADVISING SPECIAL ENTITIES.—A swap dealer or
major swap participant that acts as an advisor to a special
entity regarding a swap shall comply with the requirements
of subparagraph (4) with respect to such Special Entity.
‘‘(B) ENTERING OF SWAPS WITH RESPECT TO SPECIAL
ENTITIES.—A swap dealer that enters into or offers to enter
into swap with a Special Entity shall comply with the
requirements of subparagraph (5) with respect to such
Special Entity.
‘‘(C) SPECIAL ENTITY DEFINED.—For purposes of this
subsection, the term ‘special entity’ means—
‘‘(i) a Federal agency;
‘‘(ii) a State, State agency, city, county, municipality, or other political subdivision of a State;
‘‘(iii) any employee benefit plan, as defined in section 3 of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1002);
‘‘(iv) any governmental plan, as defined in section
3 of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1002); or
‘‘(v) any endowment, including an endowment that
is an organization described in section 501(c)(3) of the
Internal Revenue Code of 1986.
‘‘(3) BUSINESS CONDUCT REQUIREMENTS.—Business conduct
requirements adopted by the Commission shall—
‘‘(A) establish a duty for a swap dealer or major swap
participant to verify that any counterparty meets the eligibility standards for an eligible contract participant;
‘‘(B) require disclosure by the swap dealer or major
swap participant to any counterparty to the transaction
(other than a swap dealer, major swap participant, securitybased swap dealer, or major security-based swap participant) of—
‘‘(i) information about the material risks and
characteristics of the swap;
‘‘(ii) any material incentives or conflicts of interest
that the swap dealer or major swap participant may
have in connection with the swap; and
‘‘(iii)(I) for cleared swaps, upon the request of the
counterparty, receipt of the daily mark of the transaction from the appropriate derivatives clearing
organization; and
‘‘(II) for uncleared swaps, receipt of the daily mark
of the transaction from the swap dealer or the major
swap participant;
‘‘(C) establish a duty for a swap dealer or major swap
participant to communicate in a fair and balanced manner
based on principles of fair dealing and good faith; and
‘‘(D) establish such other standards and requirements
as the Commission may determine are appropriate in the
public interest, for the protection of investors, or otherwise
in furtherance of the purposes of this Act.
‘‘(4) SPECIAL REQUIREMENTS FOR SWAP DEALERS ACTING AS
ADVISORS.—

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124 STAT. 1709

‘‘(A) IN GENERAL.—It shall be unlawful for a swap
dealer or major swap participant—
‘‘(i) to employ any device, scheme, or artifice to
defraud any Special Entity or prospective customer
who is a Special Entity;
‘‘(ii) to engage in any transaction, practice, or
course of business that operates as a fraud or deceit
on any Special Entity or prospective customer who
is a Special Entity; or
‘‘(iii) to engage in any act, practice, or course of
business that is fraudulent, deceptive or manipulative.
‘‘(B) DUTY.—Any swap dealer that acts as an advisor
to a Special Entity shall have a duty to act in the best
interests of the Special Entity.
‘‘(C) REASONABLE EFFORTS.—Any swap dealer that acts
as an advisor to a Special Entity shall make reasonable
efforts to obtain such information as is necessary to make
a reasonable determination that any swap recommended
by the swap dealer is in the best interests of the Special
Entity, including information relating to—
‘‘(i) the financial status of the Special Entity;
‘‘(ii) the tax status of the Special Entity;
‘‘(iii) the investment or financing objectives of the
Special Entity; and
‘‘(iv) any other information that the Commission
may prescribe by rule or regulation.
‘‘(5) SPECIAL REQUIREMENTS FOR SWAP DEALERS AS
COUNTERPARTIES TO SPECIAL ENTITIES.—
‘‘(A) Any swap dealer or major swap participant that
offers to enter or enters into a swap with a Special Entity
shall—
‘‘(i) comply with any duty established by the
Commission for a swap dealer or major swap participant, with respect to a counterparty that is an eligible
contract participant within the meaning of subclause
(I) or (II) of clause (vii) of section 1a(18) of this Act,
that requires the swap dealer or major swap participant to have a reasonable basis to believe that the
counterparty that is a Special Entity has an independent representative that—
‘‘(I) has sufficient knowledge to evaluate the
transaction and risks;
‘‘(II) is not subject to a statutory disqualification;
‘‘(III) is independent of the swap dealer or
major swap participant;
‘‘(IV) undertakes a duty to act in the best
interests of the counterparty it represents;
‘‘(V) makes appropriate disclosures;
‘‘(VI) will provide written representations to
the Special Entity regarding fair pricing and the
appropriateness of the transaction; and
‘‘(VII) in the case of employee benefit plans
subject to the Employee Retirement Income Security act of 1974, is a fiduciary as defined in section
3 of that Act (29 U.S.C. 1002); and

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124 STAT. 1710

PUBLIC LAW 111–203—JULY 21, 2010

‘‘(ii) before the initiation of the transaction, disclose
to the Special Entity in writing the capacity in which
the swap dealer is acting; and
‘‘(B) the Commission may establish such other standards and requirements as the Commission may determine
are appropriate in the public interest, for the protection
of investors, or otherwise in furtherance of the purposes
of this Act.
‘‘(6) RULES.—The Commission shall prescribe rules under
this subsection governing business conduct standards for swap
dealers and major swap participants.
‘‘(7) APPLICABILITY.—This section shall not apply with
respect to a transaction that is—
‘‘(A) initiated by a Special Entity on an exchange or
swap execution facility; and
‘‘(B) one in which the swap dealer or major swap
participant does not know the identity of the counterparty
to the transaction.
‘‘(i) DOCUMENTATION STANDARDS.—
‘‘(1) IN GENERAL.—Each registered swap dealer and major
swap participant shall conform with such standards as may
be prescribed by the Commission by rule or regulation that
relate to timely and accurate confirmation, processing, netting,
documentation, and valuation of all swaps.
‘‘(2) RULES.—The Commission shall adopt rules governing
documentation standards for swap dealers and major swap
participants.
‘‘(j) DUTIES.—Each registered swap dealer and major swap
participant at all times shall comply with the following requirements:
‘‘(1) MONITORING OF TRADING.—The swap dealer or major
swap participant shall monitor its trading in swaps to prevent
violations of applicable position limits.
‘‘(2) RISK MANAGEMENT PROCEDURES.—The swap dealer or
major swap participant shall establish robust and professional
risk management systems adequate for managing the dayto-day business of the swap dealer or major swap participant.
‘‘(3) DISCLOSURE OF GENERAL INFORMATION.—The swap
dealer or major swap participant shall disclose to the Commission and to the prudential regulator for the swap dealer or
major swap participant, as applicable, information concerning—
‘‘(A) terms and conditions of its swaps;
‘‘(B) swap trading operations, mechanisms, and practices;
‘‘(C) financial integrity protections relating to swaps;
and
‘‘(D) other information relevant to its trading in swaps.
‘‘(4) ABILITY TO OBTAIN INFORMATION.—The swap dealer
or major swap participant shall—
‘‘(A) establish and enforce internal systems and procedures to obtain any necessary information to perform any
of the functions described in this section; and
‘‘(B) provide the information to the Commission and
to the prudential regulator for the swap dealer or major
swap participant, as applicable, on request.

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124 STAT. 1711

‘‘(5) CONFLICTS OF INTEREST.—The swap dealer and major
swap participant shall implement conflict-of-interest systems
and procedures that—
‘‘(A) establish structural and institutional safeguards
to ensure that the activities of any person within the firm
relating to research or analysis of the price or market
for any commodity or swap or acting in a role of providing
clearing activities or making determinations as to accepting
clearing customers are separated by appropriate informational partitions within the firm from the review, pressure,
or oversight of persons whose involvement in pricing,
trading, or clearing activities might potentially bias their
judgment or supervision and contravene the core principles
of open access and the business conduct standards
described in this Act; and
‘‘(B) address such other issues as the Commission
determines to be appropriate.
‘‘(6) ANTITRUST CONSIDERATIONS.—Unless necessary or
appropriate to achieve the purposes of this Act, a swap dealer
or major swap participant shall not—
‘‘(A) adopt any process or take any action that results
in any unreasonable restraint of trade; or
‘‘(B) impose any material anticompetitive burden on
trading or clearing.
‘‘(7) RULES.—The Commission shall prescribe rules under
this subsection governing duties of swap dealers and major
swap participants.
‘‘(k) DESIGNATION OF CHIEF COMPLIANCE OFFICER.—
‘‘(1) IN GENERAL.—Each swap dealer and major swap
participant shall designate an individual to serve as a chief
compliance officer.
‘‘(2) DUTIES.—The chief compliance officer shall—
‘‘(A) report directly to the board or to the senior officer
of the swap dealer or major swap participant;
‘‘(B) review the compliance of the swap dealer or major
swap participant with respect to the swap dealer and major
swap participant requirements described in this section;
‘‘(C) in consultation with the board of directors, a body
performing a function similar to the board, or the senior
officer of the organization, resolve any conflicts of interest
that may arise;
‘‘(D) be responsible for administering each policy and
procedure that is required to be established pursuant to
this section;
‘‘(E) ensure compliance with this Act (including regulations) relating to swaps, including each rule prescribed
by the Commission under this section;
‘‘(F) establish procedures for the remediation of noncompliance issues identified by the chief compliance officer
through any—
‘‘(i) compliance office review;
‘‘(ii) look-back;
‘‘(iii) internal or external audit finding;
‘‘(iv) self-reported error; or
‘‘(v) validated complaint; and

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PUBLIC LAW 111–203—JULY 21, 2010
‘‘(G) establish and follow appropriate procedures for
the handling, management response, remediation, retesting, and closing of noncompliance issues.
‘‘(3) ANNUAL REPORTS.—
‘‘(A) IN GENERAL.—In accordance with rules prescribed
by the Commission, the chief compliance officer shall
annually prepare and sign a report that contains a description of—
‘‘(i) the compliance of the swap dealer or major
swap participant with respect to this Act (including
regulations); and
‘‘(ii) each policy and procedure of the swap dealer
or major swap participant of the chief compliance
officer (including the code of ethics and conflict of
interest policies).
‘‘(B) REQUIREMENTS.—A compliance report under
subparagraph (A) shall—
‘‘(i) accompany each appropriate financial report
of the swap dealer or major swap participant that
is required to be furnished to the Commission pursuant
to this section; and
‘‘(ii) include a certification that, under penalty of
law, the compliance report is accurate and complete.’’.

Certification.

SEC. 732. CONFLICTS OF INTEREST.

Procedures.

Regulations.

Section 4d of the Commodity Exchange Act (7 U.S.C. 6d) is
amended—
(1) by redesignating subsection (c) as subsection (e); and
(2) by inserting after subsection (b) the following:
‘‘(c) CONFLICTS OF INTEREST.—The Commission shall require
that futures commission merchants and introducing brokers implement conflict-of-interest systems and procedures that—
‘‘(1) establish structural and institutional safeguards to
ensure that the activities of any person within the firm relating
to research or analysis of the price or market for any commodity
are separated by appropriate informational partitions within
the firm from the review, pressure, or oversight of persons
whose involvement in trading or clearing activities might potentially bias the judgment or super