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PUBLIC LAW 111–203—JULY 21, 2010 anorris on DSK5R6SHH1PROD with PUBLIC LAWS DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00001 Fmt 6579 Sfmt 6579 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 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. PO 00203 Frm 00002 Fmt 6580 Sfmt 6582 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00003 Fmt 6580 Sfmt 6582 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 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. Sec. Sec. Sec. 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00004 Fmt 6580 Sfmt 6582 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Subtitle A—Regulation of Over-the-Counter Swaps Markets Sec. Sec. Sec. Sec. Sec. VerDate Nov 24 2008 711. 712. 713. 714. 715. 00:54 Jul 29, 2010 PART I—REGULATORY AUTHORITY Definitions. Review of regulatory authority. Portfolio margining conforming changes. Abusive swaps. Authority to prohibit participation in swap activities. Jkt 089139 PO 00203 Frm 00005 Fmt 6580 Sfmt 6582 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 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. Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec. 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Sec. Sec. Sec. Sec. Sec. VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00006 Fmt 6580 Sfmt 6582 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00007 Fmt 6580 Sfmt 6582 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 124 STAT. 1382 PUBLIC LAW 111–203—JULY 21, 2010 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00008 Fmt 6580 Sfmt 6582 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1383 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. 1011. 1012. 1013. 1014. 1015. 1016. 1017. 1018. Sec. Sec. Sec. 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. Sec. 1045. Sec. 1046. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. 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. VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00009 Fmt 6580 Sfmt 6582 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 124 STAT. 1384 PUBLIC LAW 111–203—JULY 21, 2010 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 1101. 1102. 1103. 1104. PO 00203 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. Frm 00010 Fmt 6580 Sfmt 6582 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 1441. 1442. 1443. 1444. 1445. 1446. 1447. 1448. 1449. 1450. 00:54 Jul 29, 2010 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. Jkt 089139 PO 00203 Frm 00011 Fmt 6580 Sfmt 6582 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 124 STAT. 1386 PUBLIC LAW 111–203—JULY 21, 2010 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00012 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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; VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00013 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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; VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00014 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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). VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00015 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 12 USC 5303. Definition. VerDate Nov 24 2008 00:54 Jul 29, 2010 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 Jkt 089139 PO 00203 Frm 00016 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 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’’. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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). VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00017 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Subtitle A—Financial Stability Oversight Council VerDate Nov 24 2008 12 USC 5321. SEC. 111. FINANCIAL STABILITY OVERSIGHT COUNCIL ESTABLISHED. Effective date. (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— 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00018 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00019 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00020 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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; VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00021 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Recommendations. Recommendations. GPO1 PsN: PUBL203 124 STAT. 1396 anorris on DSK5R6SHH1PROD with PUBLIC LAWS Deadline. Reports. VerDate Nov 24 2008 00:54 Jul 29, 2010 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 Jkt 089139 PO 00203 Frm 00022 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00023 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Consultation. GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 124 STAT. 1398 PUBLIC LAW 111–203—JULY 21, 2010 Applicability. (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. 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, VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00024 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00025 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 124 STAT. 1400 Applicability. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Definition. VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 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 PO 00203 Frm 00026 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00027 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Deadline. Deadlines. Deadlines. Waiver authority. GPO1 PsN: PUBL203 124 STAT. 1402 Consultation. Deadline. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Consultation. VerDate Nov 24 2008 00:54 Jul 29, 2010 PUBLIC LAW 111–203—JULY 21, 2010 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. Jkt 089139 PO 00203 Frm 00028 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1403 SEC. 114. REGISTRATION OF NONBANK FINANCIAL COMPANIES SUPERVISED BY THE BOARD OF GOVERNORS. 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. 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. VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00029 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 124 STAT. 1404 PUBLIC LAW 111–203—JULY 21, 2010 anorris on DSK5R6SHH1PROD with PUBLIC LAWS (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; VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00030 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00031 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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— VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00032 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00033 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Deadlines. Reports. GPO1 PsN: PUBL203 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00034 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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), VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00035 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Consultation. Public comments. Deadline. GPO1 PsN: PUBL203 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Deadlines. VerDate Nov 24 2008 00:54 Jul 29, 2010 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 Jkt 089139 PO 00203 Frm 00036 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00037 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Records. GPO1 PsN: PUBL203 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 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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; VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00038 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1413 (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). anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00039 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 President. Appointment. GPO1 PsN: PUBL203 124 STAT. 1414 anorris on DSK5R6SHH1PROD with PUBLIC LAWS Regulations. VerDate Nov 24 2008 00:54 Jul 29, 2010 PUBLIC LAW 111–203—JULY 21, 2010 (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.’’. Jkt 089139 PO 00203 Frm 00040 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1415 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00041 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Time period. Reports. GPO1 PsN: PUBL203 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00042 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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; VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00043 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Public information. Public information. GPO1 PsN: PUBL203 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00044 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1419 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00045 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 124 STAT. 1420 PUBLIC LAW 111–203—JULY 21, 2010 (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 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00046 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1421 (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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00047 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 124 STAT. 1422 PUBLIC LAW 111–203—JULY 21, 2010 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Applicability. VerDate Nov 24 2008 00:54 Jul 29, 2010 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 Jkt 089139 PO 00203 Frm 00048 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 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). anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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, VerDate Nov 24 2008 15:46 Sep 08, 2010 Jkt 089139 PO 00203 Frm 00049 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 124 STAT. 1424 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— VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00050 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00051 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00052 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00053 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Deadline. Regulations. GPO1 PsN: PUBL203 124 STAT. 1428 Definition. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Effective date. VerDate Nov 24 2008 00:54 Jul 29, 2010 PUBLIC LAW 111–203—JULY 21, 2010 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. Jkt 089139 PO 00203 Frm 00054 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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— VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00055 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Establishment. Deadline. GPO1 PsN: PUBL203 124 STAT. 1430 Deadline. Effective date. Publication. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Deadlines. VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PUBLIC LAW 111–203—JULY 21, 2010 (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 PO 00203 Frm 00056 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1431 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). VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00057 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Publication. Procedures. GPO1 PsN: PUBL203 124 STAT. 1432 PUBLIC LAW 111–203—JULY 21, 2010 anorris on DSK5R6SHH1PROD with PUBLIC LAWS (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. 12 USC 5366. SEC. 166. EARLY REMEDIATION REQUIREMENTS. Regulations. (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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00058 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00059 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Deadline. Notification. GPO1 PsN: PUBL203 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00060 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1435 SEC. 170. SAFE HARBOR. 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. 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. VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00061 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 124 STAT. 1436 PUBLIC LAW 111–203—JULY 21, 2010 anorris on DSK5R6SHH1PROD with PUBLIC LAWS (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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00062 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00063 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS (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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00064 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00065 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Review. 12 USC 5372. GPO1 PsN: PUBL203 124 STAT. 1440 PUBLIC LAW 111–203—JULY 21, 2010 examine or bring enforcement actions with respect to any insured depository institution or institution-affiliated party. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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.’’. VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00066 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1441 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00067 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 124 STAT. 1442 PUBLIC LAW 111–203—JULY 21, 2010 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 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00068 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00069 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Appointment. VerDate Nov 24 2008 00:54 Jul 29, 2010 PUBLIC LAW 111–203—JULY 21, 2010 Jkt 089139 (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 PO 00203 Frm 00070 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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. VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00071 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Records. GPO1 PsN: PUBL203 124 STAT. 1446 Deadline. Deadline. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Records. VerDate Nov 24 2008 00:54 Jul 29, 2010 PUBLIC LAW 111–203—JULY 21, 2010 (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.— Jkt 089139 PO 00203 Frm 00072 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00073 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Deadline. Certification. GPO1 PsN: PUBL203 124 STAT. 1448 Deadline. Termination date. Reports. Deadline. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Evaluation. VerDate Nov 24 2008 00:54 Jul 29, 2010 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; Jkt 089139 PO 00203 Frm 00074 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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. VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00075 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Evaluation. GPO1 PsN: PUBL203 124 STAT. 1450 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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— VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00076 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1451 (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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00077 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 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 anorris on DSK5R6SHH1PROD with PUBLIC LAWS Notification. VerDate Nov 24 2008 00:54 Jul 29, 2010 PUBLIC LAW 111–203—JULY 21, 2010 Jkt 089139 PO 00203 Frm 00078 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00079 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Publication. Web posting. Deadline. Deadline. GPO1 PsN: PUBL203 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00080 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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; VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00081 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00082 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00083 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00084 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00085 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Effective dates. 12 USC 5388. GPO1 PsN: PUBL203 124 STAT. 1460 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00086 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00087 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 124 STAT. 1462 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 may not be construed as limiting any rights that the Reports. Notification. Deadline. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Termination date. VerDate Nov 24 2008 15:53 Sep 08, 2010 PUBLIC LAW 111–203—JULY 21, 2010 Jkt 089139 PO 00203 Frm 00088 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1463 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00089 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 124 STAT. 1464 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 Reports. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Publication. Deadlines. Deadline. VerDate Nov 24 2008 00:54 Jul 29, 2010 PUBLIC LAW 111–203—JULY 21, 2010 Jkt 089139 PO 00203 Frm 00090 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1465 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— VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00091 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Notification. Deadline. GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 124 STAT. 1466 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00092 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1467 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00093 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Notification. Time period. GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 124 STAT. 1468 PUBLIC LAW 111–203—JULY 21, 2010 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00094 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1469 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; VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00095 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Time period. GPO1 PsN: PUBL203 124 STAT. 1470 (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— (I) made such transfer or incurred such obligation with actual intent to hinder, delay, or defraud anorris on DSK5R6SHH1PROD with PUBLIC LAWS Time period. VerDate Nov 24 2008 00:54 Jul 29, 2010 PUBLIC LAW 111–203—JULY 21, 2010 Jkt 089139 PO 00203 Frm 00096 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1471 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00097 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 124 STAT. 1472 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00098 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1473 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 VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00099 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Time periods. GPO1 PsN: PUBL203 124 STAT. 1474 Definition. Time period. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Applicability. VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PUBLIC LAW 111–203—JULY 21, 2010 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 PO 00203 Frm 00100 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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) VerDate Nov 24 2008 00:54 Jul 29, 2010 Jkt 089139 PO 00203 Frm 00101 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Public information. Regulations. Deadline. GPO1 PsN: PUBL203 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 financial company; or anorris on DSK5R6SHH1PROD with PUBLIC LAWS Deadline. VerDate Nov 24 2008 21:17 Aug 02, 2010 PUBLIC LAW 111–203—JULY 21, 2010 Jkt 089139 PO 00203 Frm 00102 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1477 (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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00103 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 124 STAT. 1478 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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00104 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1479 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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00105 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 124 STAT. 1480 PUBLIC LAW 111–203—JULY 21, 2010 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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00106 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1481 (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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00107 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 124 STAT. 1482 PUBLIC LAW 111–203—JULY 21, 2010 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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00108 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1483 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; VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00109 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 124 STAT. 1484 PUBLIC LAW 111–203—JULY 21, 2010 (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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00110 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1485 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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00111 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 124 STAT. 1486 PUBLIC LAW 111–203—JULY 21, 2010 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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00112 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1487 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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00113 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Time period. VerDate Nov 24 2008 21:17 Aug 02, 2010 PUBLIC LAW 111–203—JULY 21, 2010 Jkt 089139 PO 00203 Frm 00114 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1489 (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, anorris on DSK5R6SHH1PROD with PUBLIC LAWS TIONS.—In VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00115 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 124 STAT. 1490 PUBLIC LAW 111–203—JULY 21, 2010 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— VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00116 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1491 (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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00117 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Time period. PUBL203 124 STAT. 1492 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 anorris on DSK5R6SHH1PROD with PUBLIC LAWS Time period. VerDate Nov 24 2008 21:17 Aug 02, 2010 PUBLIC LAW 111–203—JULY 21, 2010 Jkt 089139 PO 00203 Frm 00118 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00119 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 124 STAT. 1494 anorris on DSK5R6SHH1PROD with PUBLIC LAWS Determination. VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PUBLIC LAW 111–203—JULY 21, 2010 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 PO 00203 Frm 00120 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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. VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00121 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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.— VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00122 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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.— VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00123 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS (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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00124 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00125 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00126 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1501 (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 VerDate Nov 24 2008 16:32 Sep 08, 2010 Jkt 089139 PO 00203 Frm 00127 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Notification. Reports. Deadline. Termination date. Termination date. PUBL203 124 STAT. 1502 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 anorris on DSK5R6SHH1PROD with PUBLIC LAWS Delaware. VerDate Nov 24 2008 21:17 Aug 02, 2010 PUBLIC LAW 111–203—JULY 21, 2010 Jkt 089139 PO 00203 Frm 00128 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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.— VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00129 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Time period. PUBL203 124 STAT. 1504 anorris on DSK5R6SHH1PROD with PUBLIC LAWS Deadlines. VerDate Nov 24 2008 21:17 Aug 02, 2010 PUBLIC LAW 111–203—JULY 21, 2010 (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. Jkt 089139 PO 00203 Frm 00130 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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— VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00131 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Courts. Applicability. PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 124 STAT. 1506 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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00132 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00133 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Determination. PUBL203 124 STAT. 1508 (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 anorris on DSK5R6SHH1PROD with PUBLIC LAWS Contracts. Records. Time period. VerDate Nov 24 2008 16:32 Sep 08, 2010 PUBLIC LAW 111–203—JULY 21, 2010 Jkt 089139 PO 00203 Frm 00134 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00135 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Deadline. PUBL203 124 STAT. 1510 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; anorris on DSK5R6SHH1PROD with PUBLIC LAWS Recommendation. VerDate Nov 24 2008 21:17 Aug 02, 2010 PUBLIC LAW 111–203—JULY 21, 2010 Jkt 089139 PO 00203 Frm 00136 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1511 (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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00137 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Consultation. PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 124 STAT. 1512 PUBLIC LAW 111–203—JULY 21, 2010 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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00138 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1513 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 VerDate Nov 24 2008 16:32 Sep 08, 2010 Jkt 089139 PO 00203 Frm 00139 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Regulations. PUBL203 124 STAT. 1514 PUBLIC LAW 111–203—JULY 21, 2010 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 anorris on DSK5R6SHH1PROD with PUBLIC LAWS Audits. Investigations. VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00140 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1515 (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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00141 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Deadlines. Audits. Investigations. Deadlines. PUBL203 124 STAT. 1516 Reports. Evaluation. Recommendation. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00142 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1517 (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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00143 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 12 USC 5393. Notice. Time period. PUBL203 124 STAT. 1518 PUBLIC LAW 111–203—JULY 21, 2010 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00144 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1519 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). anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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; VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00145 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 124 STAT. 1520 PUBLIC LAW 111–203—JULY 21, 2010 (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 anorris on DSK5R6SHH1PROD with PUBLIC LAWS Deadline. VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00146 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1521 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). anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00147 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 124 STAT. 1522 PUBLIC LAW 111–203—JULY 21, 2010 (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; VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00148 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1523 ‘‘(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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS ‘‘(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.’’. VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00149 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 124 STAT. 1524 PUBLIC LAW 111–203—JULY 21, 2010 (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,’’. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00150 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00151 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Deadlines. Federal Register, publication. PUBL203 124 STAT. 1526 PUBLIC LAW 111–203—JULY 21, 2010 (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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS SEC. 318. FUNDING. 12 USC 16. VerDate Nov 24 2008 21:17 Aug 02, 2010 (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. Jkt 089139 PO 00203 Frm 00152 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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. VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00153 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 12 USC 16 note. PUBL203 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Payment. VerDate Nov 24 2008 21:17 Aug 02, 2010 (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 Jkt 089139 PO 00203 Frm 00154 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 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). anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00155 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Determination. PUBL203 124 STAT. 1530 Deadlines. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Notice. Time period. VerDate Nov 24 2008 16:32 Sep 08, 2010 PUBLIC LAW 111–203—JULY 21, 2010 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 Jkt 089139 PO 00203 Frm 00156 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1531 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.— VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00157 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Definition. Applicability. PUBL203 124 STAT. 1532 (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. Time period. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Time period. VerDate Nov 24 2008 21:17 Aug 02, 2010 PUBLIC LAW 111–203—JULY 21, 2010 Jkt 089139 PO 00203 Frm 00158 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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.— VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00159 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Time period. PUBL203 124 STAT. 1534 anorris on DSK5R6SHH1PROD with PUBLIC LAWS Deadline. VerDate Nov 24 2008 21:17 Aug 02, 2010 PUBLIC LAW 111–203—JULY 21, 2010 (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; Jkt 089139 PO 00203 Frm 00160 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS SEC. 323. PROPERTY TRANSFERRED. 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00161 Study. Deadline. Time period. 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 VerDate Nov 24 2008 Procedures. Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Deadline. PUBL203 124 STAT. 1536 PUBLIC LAW 111–203—JULY 21, 2010 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Time periods. 12 USC 5435. VerDate Nov 24 2008 16:32 Sep 08, 2010 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. Jkt 089139 PO 00203 Frm 00162 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1537 (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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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; VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00163 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 124 STAT. 1538 PUBLIC LAW 111–203—JULY 21, 2010 (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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 12 USC 1817 note. VerDate Nov 24 2008 21:17 Aug 02, 2010 (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. Jkt 089139 PO 00203 Frm 00164 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1539 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)’’. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 16:32 Sep 08, 2010 Jkt 089139 PO 00203 Frm 00165 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 12 USC 1813. Time period. Public information. 12 USC 1817 note. PUBL203 124 STAT. 1540 PUBLIC LAW 111–203—JULY 21, 2010 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 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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— VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00166 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1541 (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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 16:32 Sep 08, 2010 Jkt 089139 PO 00203 Frm 00167 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 12 USC 5452. Deadlines. Standards. PUBL203 124 STAT. 1542 anorris on DSK5R6SHH1PROD with PUBLIC LAWS Standards. Procedures. VerDate Nov 24 2008 21:17 Aug 02, 2010 PUBLIC LAW 111–203—JULY 21, 2010 (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. Jkt 089139 PO 00203 Frm 00168 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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) VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00169 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Applicability. PUBL203 124 STAT. 1544 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 12 USC 1821 note. Effective date. 12 USC 1821 note. VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 (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 PO 00203 Frm 00170 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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)’’. VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00171 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 12 USC 1787 note. Effective date. 12 USC 1787 note. PUBL203 124 STAT. 1546 PUBLIC LAW 111–203—JULY 21, 2010 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.’’. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00172 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00173 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 124 STAT. 1548 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’’. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00174 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1549 (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’’. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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; VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00175 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 124 STAT. 1550 PUBLIC LAW 111–203—JULY 21, 2010 (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). anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00176 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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)— VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00177 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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’’; VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00178 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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)— VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00179 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 124 STAT. 1554 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))— VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00180 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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’’. VerDate Nov 24 2008 16:32 Sep 08, 2010 Jkt 089139 PO 00203 Frm 00181 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 124 STAT. 1556 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’’. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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’’ VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00182 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 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’’. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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: VerDate Nov 24 2008 16:32 Sep 08, 2010 Jkt 089139 PO 00203 Frm 00183 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Definitions. PUBL203 124 STAT. 1558 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: anorris on DSK5R6SHH1PROD with PUBLIC LAWS ‘‘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)— VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00184 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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)— VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00185 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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)— VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00186 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1561 (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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00187 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 124 STAT. 1562 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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00188 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1563 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)— VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00189 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 124 STAT. 1564 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’’; VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00190 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1565 (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’’. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00191 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 12 USC 1707 note. PUBL203 124 STAT. 1566 PUBLIC LAW 111–203—JULY 21, 2010 (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’’. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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)— VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00192 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1567 (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’’; VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00193 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 124 STAT. 1568 PUBLIC LAW 111–203—JULY 21, 2010 (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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00194 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1569 (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,’’. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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’’. VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00195 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 124 STAT. 1570 PUBLIC LAW 111–203—JULY 21, 2010 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’’. anorris on DSK5R6SHH1PROD with PUBLIC LAWS SEC. 402. DEFINITIONS. 15 USC 80b–2 note. VerDate Nov 24 2008 21:17 Aug 02, 2010 (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. Jkt 089139 PO 00203 Frm 00196 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 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.’’. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00197 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00198 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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 VerDate Nov 24 2008 21:17 Aug 02, 2010 Jkt 089139 PO 00203 Frm 00199 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 124 STAT. 1574 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.).’’. anorris on DSK5R6SHH1PROD with PUBLIC LAWS SEC. 407. EXEMPTION OF AND REPORTING BY VENTURE CAPITAL FUND ADVISERS. Regulations. VerDate Nov 24 2008 21:17 Aug 02, 2010 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 Jkt 089139 PO 00203 Frm 00200 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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— VerDate Nov 24 2008 16:32 Sep 08, 2010 Jkt 089139 PO 00203 Frm 00201 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 15 USC 80b–2 note. PUBL203 124 STAT. 1576 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00202 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00203 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 124 STAT. 1578 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.’’. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 15:19 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00204 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1579 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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.’’. VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00205 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Order. Deadlines. APPS06 PsN: PUBL203 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: anorris on DSK5R6SHH1PROD with PUBLIC LAWS ‘‘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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00206 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00207 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 124 STAT. 1582 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00208 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00209 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Federal Register, publication. Comments. APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 124 STAT. 1584 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. VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00210 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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. VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00211 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 124 STAT. 1586 PUBLIC LAW 111–203—JULY 21, 2010 ‘‘(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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00212 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1587 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— VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00213 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 124 STAT. 1588 PUBLIC LAW 111–203—JULY 21, 2010 ‘‘(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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00214 Fmt 6580 Sfmt 6582 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 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 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00215 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 15 USC 8201. Applicability. APPS06 PsN: PUBL203 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS (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. 15 USC 8203. 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. 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. VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00216 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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: VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00217 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 124 STAT. 1592 anorris on DSK5R6SHH1PROD with PUBLIC LAWS Effective dates. VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 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— PO 00203 Frm 00218 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00219 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00220 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00221 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Bank and Savings Association Holding Company and Depository Institution Regulatory Improvements Act of 2010. 12 USC 1811 note. 12 USC 1815 note. VerDate Nov 24 2008 12:15 Aug 04, 2010 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 Jkt 089139 PO 00203 Frm 00222 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1597 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00223 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 12 USC 1815 note. APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00224 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 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). anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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: VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00225 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 124 STAT. 1600 PUBLIC LAW 111–203—JULY 21, 2010 anorris on DSK5R6SHH1PROD with PUBLIC LAWS ‘‘(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— VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00226 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00227 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Notice. Consultation. APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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)).’’. VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00228 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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.’’. VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00229 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Notice. Consultation. APPS06 PsN: PUBL203 124 STAT. 1604 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: anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00230 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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; VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00231 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Time period. APPS06 PsN: PUBL203 124 STAT. 1606 Time period. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Notice. Consultation. VerDate Nov 24 2008 12:15 Aug 04, 2010 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; Jkt 089139 PO 00203 Frm 00232 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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’’. VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00233 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 124 STAT. 1608 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00234 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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— VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00235 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Notification. Time period. Notice. Notification. Time period. Notice. APPS06 PsN: PUBL203 124 STAT. 1610 Notification. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Time period. Notice. VerDate Nov 24 2008 12:15 Aug 04, 2010 PUBLIC LAW 111–203—JULY 21, 2010 ‘‘(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.— Jkt 089139 PO 00203 Frm 00236 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00237 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 124 STAT. 1612 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: anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00238 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00239 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 12 USC 35 note. Notice. Deadline. 12 USC 35 note. APPS06 PsN: PUBL203 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00240 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00241 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 124 STAT. 1616 PUBLIC LAW 111–203—JULY 21, 2010 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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; VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00242 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00243 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Regulations. APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00244 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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, VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00245 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Regulations. APPS06 PsN: PUBL203 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: anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00246 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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). VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00247 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Deadline. Recommendations. Deadline. APPS06 PsN: PUBL203 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 Consultation. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Deadline. VerDate Nov 24 2008 12:15 Aug 04, 2010 PUBLIC LAW 111–203—JULY 21, 2010 Jkt 089139 PO 00203 Frm 00248 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00249 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Regulations. Deadline. APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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, VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00250 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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) VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00251 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 124 STAT. 1626 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00252 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00253 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Deadline. APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00254 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1629 anorris on DSK5R6SHH1PROD with PUBLIC LAWS ‘‘(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)). VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00255 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00256 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 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: anorris on DSK5R6SHH1PROD with PUBLIC LAWS ‘‘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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00257 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 124 STAT. 1632 Deadline. 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: anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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— VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00258 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00259 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Deadline. APPS06 PsN: PUBL203 124 STAT. 1634 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00260 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00261 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 124 STAT. 1636 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)).’’. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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: VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00262 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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— VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00263 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Deadline. Time period. Deadline. APPS06 PsN: PUBL203 124 STAT. 1638 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 anorris on DSK5R6SHH1PROD with PUBLIC LAWS Deadline. VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00264 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00265 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00266 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00267 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 124 STAT. 1642 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— VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00268 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00269 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Deadline. APPS06 PsN: PUBL203 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 anorris on DSK5R6SHH1PROD with PUBLIC LAWS Deadline. VerDate Nov 24 2008 12:15 Aug 04, 2010 PUBLIC LAW 111–203—JULY 21, 2010 Jkt 089139 PO 00203 Frm 00270 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1645 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, VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00271 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 124 STAT. 1646 Deadline. PUBLIC LAW 111–203—JULY 21, 2010 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Consultation. VerDate Nov 24 2008 12:15 Aug 04, 2010 (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: Jkt 089139 PO 00203 Frm 00272 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00273 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 124 STAT. 1648 15 USC 8305. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Applicability. VerDate Nov 24 2008 12:15 Aug 04, 2010 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). Jkt 089139 PO 00203 Frm 00274 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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.— VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00275 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Applicability. APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00276 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS (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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00277 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 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 anorris on DSK5R6SHH1PROD with PUBLIC LAWS TIVE VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00278 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00279 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Deadline. Deadline. Deadline. APPS06 PsN: PUBL203 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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.— VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00280 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 ON TRADING APPS06 ON PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00281 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Deadline. APPS06 PsN: PUBL203 124 STAT. 1656 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 anorris on DSK5R6SHH1PROD with PUBLIC LAWS Study. VerDate Nov 24 2008 12:15 Aug 04, 2010 PUBLIC LAW 111–203—JULY 21, 2010 Jkt 089139 PO 00203 Frm 00282 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1657 anorris on DSK5R6SHH1PROD with PUBLIC LAWS (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). VerDate Nov 24 2008 Deadline. Study. SEC. 720. MEMORANDUM. 15 USC 8308. (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. Deadline. 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00283 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 124 STAT. 1658 Deadline. PUBLIC LAW 111–203—JULY 21, 2010 (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 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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.’’; VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00284 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1659 (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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00285 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 124 STAT. 1660 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— VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00286 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1661 ‘‘(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.— VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00287 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 124 STAT. 1662 PUBLIC LAW 111–203—JULY 21, 2010 ‘‘(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; VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00288 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1663 ‘‘(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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00289 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Regulations. APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 124 STAT. 1664 PUBLIC LAW 111–203—JULY 21, 2010 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); VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00290 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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: VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00291 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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; VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00292 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00293 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 124 STAT. 1668 Determination. VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 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 PO 00203 Frm 00294 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00295 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 124 STAT. 1670 15 USC 8321. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 15 USC 8321. VerDate Nov 24 2008 12:15 Aug 04, 2010 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’’. Jkt 089139 PO 00203 Frm 00296 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00297 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 7 USC 6q. APPS06 PsN: PUBL203 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 effect on June 1, 2010. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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.’’. VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00298 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00299 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 124 STAT. 1674 15 USC 8322. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 15:19 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00300 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 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.’’. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00301 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203 124 STAT. 1676 Public comment. Time period. Notice. Public information. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Public comment. Time period. VerDate Nov 24 2008 15:33 Aug 19, 2010 Jkt 089139 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. PO 00000 Frm 00302 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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, VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00303 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Deadline. GPO1 PsN: PUBL203 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Deadline. Public information. Reports. VerDate Nov 24 2008 12:08 Aug 19, 2010 PUBLIC LAW 111–203—JULY 21, 2010 Jkt 089139 PO 00000 Frm 00304 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00305 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Notification. GPO1 PsN: PUBL203 124 STAT. 1680 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.— anorris on DSK5R6SHH1PROD with PUBLIC LAWS Exemption. Time period. VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00306 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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.’’. VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00307 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 124 STAT. 1682 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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.— VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00308 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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 VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00309 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 124 STAT. 1684 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 7 USC 6s. VerDate Nov 24 2008 12:08 Aug 19, 2010 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— Jkt 089139 PO 00000 Frm 00310 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 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.’’. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00311 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Contracts. GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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; VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00312 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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 VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00313 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Certification. GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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, VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00314 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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. VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00315 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 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. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Reports. VerDate Nov 24 2008 12:08 Aug 19, 2010 PUBLIC LAW 111–203—JULY 21, 2010 Jkt 089139 PO 00000 Frm 00316 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1691 ‘‘(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. VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00317 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Procedures. Tests. Time period. GPO1 PsN: PUBL203 124 STAT. 1692 Contracts. Regulations. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Regulations. 7 USC 7a–1 note. VerDate Nov 24 2008 15:33 Aug 19, 2010 PUBLIC LAW 111–203—JULY 21, 2010 ‘‘(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. Jkt 089139 PO 00000 Frm 00318 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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. VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00319 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 124 STAT. 1694 PUBLIC LAW 111–203—JULY 21, 2010 ‘‘(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: anorris on DSK5R6SHH1PROD with PUBLIC LAWS ‘‘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 VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00320 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1695 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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.’’. VerDate Nov 24 2008 SEC. 726. RULEMAKING ON CONFLICT OF INTEREST. 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 Deadline. 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00321 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 124 STAT. 1696 PUBLIC LAW 111–203—JULY 21, 2010 execution facility or board of trade designated as a contract market that posts swaps or makes swaps available for trading. anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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; VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00322 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 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: anorris on DSK5R6SHH1PROD with PUBLIC LAWS ‘‘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. VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00323 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00324 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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 VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00325 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 124 STAT. 1700 Certification. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Regulations. VerDate Nov 24 2008 12:08 Aug 19, 2010 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 Jkt 089139 PO 00000 Frm 00326 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 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.’’. anorris on DSK5R6SHH1PROD with PUBLIC LAWS SEC. 729. REPORTING AND RECORDKEEPING. The Commodity Exchange Act is amended by inserting after section 4q (7 U.S.C. 6o–1) the following: 7 USC 6q. ‘‘SEC. 4r. REPORTING AND RECORDKEEPING FOR UNCLEARED SWAPS. 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 VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00327 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 124 STAT. 1702 PUBLIC LAW 111–203—JULY 21, 2010 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: anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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 VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00328 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1703 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: anorris on DSK5R6SHH1PROD with PUBLIC LAWS ‘‘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.— VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00329 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 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.— anorris on DSK5R6SHH1PROD with PUBLIC LAWS Regulations. Deadline. Regulations. VerDate Nov 24 2008 12:08 Aug 19, 2010 PUBLIC LAW 111–203—JULY 21, 2010 Jkt 089139 PO 00000 Frm 00330 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1705 anorris on DSK5R6SHH1PROD with PUBLIC LAWS ‘‘(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.— VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00331 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 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— anorris on DSK5R6SHH1PROD with PUBLIC LAWS Consultation. VerDate Nov 24 2008 12:08 Aug 19, 2010 PUBLIC LAW 111–203—JULY 21, 2010 Jkt 089139 PO 00000 Frm 00332 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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 VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00333 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Reports. Regulations. GPO1 PsN: PUBL203 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.— anorris on DSK5R6SHH1PROD with PUBLIC LAWS Compliance. VerDate Nov 24 2008 12:08 Aug 19, 2010 PUBLIC LAW 111–203—JULY 21, 2010 Jkt 089139 PO 00000 Frm 00334 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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 VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00335 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 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. VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00336 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 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 VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00337 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 124 STAT. 1712 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 supervision of the persons; and ‘‘(2) address such other issues as the Commission determines to be appropriate. ‘‘(d) DESIGNATION OF CHIEF COMPLIANCE OFFICER.—Each futures commission merchant shall designate an individual to serve as its Chief Compliance Officer and perform such duties and responsibilities as shall be set forth in regulations to be adopted by the Commission or rules to be adopted by a futures association registered under section 17.’’. SEC. 733. SWAP EXECUTION FACILITIES. The Commodity Exchange Act is amended by inserting after section 5g (7 U.S.C. 7b–2) the following: anorris on DSK5R6SHH1PROD with PUBLIC LAWS 7 USC 7b–3. ‘‘SEC. 5h. SWAP EXECUTION FACILITIES. ‘‘(a) REGISTRATION.— ‘‘(1) IN GENERAL.—No person may operate a facility for the trading or processing of swaps unless the facility is registered as a swap execution facility or as a designated contract market under this section. VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00338 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1713 ‘‘(2) DUAL REGISTRATION.—Any person that is registered as a swap execution facility under this section shall register with the Commission regardless of whether the person also is registered with the Securities and Exchange Commission as a swap execution facility. ‘‘(b) TRADING AND TRADE PROCESSING.— ‘‘(1) IN GENERAL.—Except as specified in paragraph (2), a swap execution facility that is registered under subsection (a) may— ‘‘(A) make available for trading any swap; and ‘‘(B) facilitate trade processing of any swap. ‘‘(2) AGRICULTURAL SWAPS.—A swap execution facility may not list for trading or confirm the execution of any swap in an agricultural commodity (as defined by the Commission) except pursuant to a rule or regulation of the Commission allowing the swap under such terms and conditions as the Commission shall prescribe. ‘‘(c) IDENTIFICATION OF FACILITY USED TO TRADE SWAPS BY CONTRACT MARKETS.—A board of trade that operates a contract market shall, to the extent that the board of trade also operates a swap execution facility and uses the same electronic trade execution system for listing and executing trades of swaps on or through the contract market and the swap execution facility, identify whether the electronic trading of such swaps is taking place on or through the contract market or the swap execution facility. ‘‘(d) RULE-WRITING.— ‘‘(1) The Securities and Exchange Commission and Commodity Futures Trading Commission may promulgate rules defining the universe of swaps that can be executed on a swap execution facility. These rules shall take into account the price and nonprice requirements of the counterparties to a swap and the goal of this section as set forth in subsection (e). ‘‘(2) For all swaps that are not required to be executed through a swap execution facility as defined in paragraph (1), such trades may be executed through any other available means of interstate commerce. ‘‘(3) The Securities and Exchange Commission and Commodity Futures Trading Commission shall update these rules as necessary to account for technological and other innovation. ‘‘(e) RULE OF CONSTRUCTION.—The goal of this section is to promote the trading of swaps on swap execution facilities and to promote pre-trade price transparency in the swaps market. ‘‘(f) CORE PRINCIPLES FOR SWAP EXECUTION FACILITIES.— ‘‘(1) COMPLIANCE WITH CORE PRINCIPLES.— ‘‘(A) IN GENERAL.—To be registered, and maintain registration, as a swap execution facility, the swap execution facility shall comply with— ‘‘(i) the core principles described in this subsection; and ‘‘(ii) any requirement that the Commission may impose by rule or regulation pursuant to section 8a(5). ‘‘(B) REASONABLE DISCRETION OF SWAP EXECUTION FACILITY.—Unless otherwise determined by the Commission by rule or regulation, a swap execution facility VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00339 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Regulations. GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS 124 STAT. 1714 PUBLIC LAW 111–203—JULY 21, 2010 described in subparagraph (A) shall have reasonable discretion in establishing the manner in which the swap execution facility complies with the core principles described in this subsection. ‘‘(2) COMPLIANCE WITH RULES.—A swap execution facility shall— ‘‘(A) establish and enforce compliance with any rule of the swap execution facility, including— ‘‘(i) the terms and conditions of the swaps traded or processed on or through the swap execution facility; and ‘‘(ii) any limitation on access to the swap execution facility; ‘‘(B) establish and enforce trading, trade processing, and participation rules that will deter abuses and have the capacity to detect, investigate, and enforce those rules, including means— ‘‘(i) to provide market participants with impartial access to the market; and ‘‘(ii) to capture information that may be used in establishing whether rule violations have occurred; ‘‘(C) establish rules governing the operation of the facility, including rules specifying trading procedures to be used in entering and executing orders traded or posted on the facility, including block trades; and ‘‘(D) provide by its rules that when a swap dealer or major swap participant enters into or facilitates a swap that is subject to the mandatory clearing requirement of section 2(h), the swap dealer or major swap participant shall be responsible for compliance with the mandatory trading requirement under section 2(h)(8). ‘‘(3) SWAPS NOT READILY SUSCEPTIBLE TO MANIPULATION.— The swap execution facility shall permit trading only in swaps that are not readily susceptible to manipulation. ‘‘(4) MONITORING OF TRADING AND TRADE PROCESSING.— The swap execution facility shall— ‘‘(A) establish and enforce rules or terms and conditions defining, or specifications detailing— ‘‘(i) trading procedures to be used in entering and executing orders traded on or through the facilities of the swap execution facility; and ‘‘(ii) procedures for trade processing of swaps on or through the facilities of the swap execution facility; and ‘‘(B) monitor trading in swaps to prevent manipulation, price distortion, and disruptions of the delivery or cash settlement process through surveillance, compliance, and disciplinary practices and procedures, including methods for conducting real-time monitoring of trading and comprehensive and accurate trade reconstructions. ‘‘(5) ABILITY TO OBTAIN INFORMATION.—The swap execution facility shall— ‘‘(A) establish and enforce rules that will allow the facility to obtain any necessary information to perform any of the functions described in this section; ‘‘(B) provide the information to the Commission on request; and VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00340 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1715 ‘‘(C) have the capacity to carry out such international information-sharing agreements as the Commission may require. ‘‘(6) POSITION LIMITS OR ACCOUNTABILITY.— ‘‘(A) IN GENERAL.—To reduce the potential threat of market manipulation or congestion, especially during trading in the delivery month, a swap execution facility that is a trading facility shall adopt for each of the contracts of the facility, as is necessary and appropriate, position limitations or position accountability for speculators. ‘‘(B) POSITION LIMITS.—For any contract that is subject to a position limitation established by the Commission pursuant to section 4a(a), the swap execution facility shall— ‘‘(i) set its position limitation at a level no higher than the Commission limitation; and ‘‘(ii) monitor positions established on or through the swap execution facility for compliance with the limit set by the Commission and the limit, if any, set by the swap execution facility. ‘‘(7) FINANCIAL INTEGRITY OF TRANSACTIONS.—The swap execution facility shall establish and enforce rules and procedures for ensuring the financial integrity of swaps entered on or through the facilities of the swap execution facility, including the clearance and settlement of the swaps pursuant to section 2(h)(1). ‘‘(8) EMERGENCY AUTHORITY.—The swap execution facility shall adopt rules to provide for the exercise of emergency authority, in consultation or cooperation with the Commission, as is necessary and appropriate, including the authority to liquidate or transfer open positions in any swap or to suspend or curtail trading in a swap. ‘‘(9) TIMELY PUBLICATION OF TRADING INFORMATION.— ‘‘(A) IN GENERAL.—The swap execution facility shall make public timely information on price, trading volume, and other trading data on swaps to the extent prescribed by the Commission. ‘‘(B) CAPACITY OF SWAP EXECUTION FACILITY.—The swap execution facility shall be required to have the capacity to electronically capture and transmit trade information with respect to transactions executed on the facility. ‘‘(10) RECORDKEEPING AND REPORTING.— ‘‘(A) IN GENERAL.—A swap execution facility shall— ‘‘(i) maintain records of all activities relating to the business of the facility, including a complete audit trail, in a form and manner acceptable to the Commission for a period of 5 years; ‘‘(ii) report to the Commission, in a form and manner acceptable to the Commission, such information as the Commission determines to be necessary or appropriate for the Commission to perform the duties of the Commission under this Act; and ‘‘(iii) shall keep any such records relating to swaps defined in section 1a(47)(A)(v) open to inspection and examination by the Securities and Exchange Commission.’’ VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00341 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 Contracts. Procedures. Public information. Time period. GPO1 PsN: PUBL203 124 STAT. 1716 ‘‘(B) REQUIREMENTS.—The Commission shall adopt data collection and reporting requirements for swap execution facilities that are comparable to corresponding requirements for derivatives clearing organizations and swap data repositories. ‘‘(11) ANTITRUST CONSIDERATIONS.—Unless necessary or appropriate to achieve the purposes of this Act, the swap execution facility shall not— ‘‘(A) adopt any rules or taking any actions that result in any unreasonable restraint of trade; or ‘‘(B) impose any material anticompetitive burden on trading or clearing. ‘‘(12) CONFLICTS OF INTEREST.—The swap execution facility shall— ‘‘(A) establish and enforce rules to minimize conflicts of interest in its decision-making process; and ‘‘(B) establish a process for resolving the conflicts of interest. ‘‘(13) FINANCIAL RESOURCES.— ‘‘(A) IN GENERAL.—The swap execution facility shall have adequate financial, operational, and managerial resources to discharge each responsibility of the swap execution facility. ‘‘(B DETERMINATION OF RESOURCE ADEQUACY.—The financial resources of a swap execution facility shall be considered to be adequate if the value of the financial resources exceeds the total amount that would enable the swap execution facility to cover the operating costs of the swap execution facility for a 1-year period, as calculated on a rolling basis. ‘‘(14) SYSTEM SAFEGUARDS.—The swap execution facility shall— ‘‘(A) 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— ‘‘(i) are reliable and secure; and ‘‘(ii) have adequate scalable capacity; ‘‘(B) establish and maintain emergency procedures, backup facilities, and a plan for disaster recovery that allow for— ‘‘(i) the timely recovery and resumption of operations; and ‘‘(ii) the fulfillment of the responsibilities and obligations of the swap execution facility; and ‘‘(C) periodically conduct tests to verify that the backup resources of the swap execution facility are sufficient to ensure continued— ‘‘(i) order processing and trade matching; ‘‘(ii) price reporting; ‘‘(iii) market surveillance and ‘‘(iv) maintenance of a comprehensive and accurate audit trail. ‘‘(15) DESIGNATION OF CHIEF COMPLIANCE OFFICER.— ‘‘(A) IN GENERAL.—Each swap execution facility shall designate an individual to serve as a chief compliance officer. anorris on DSK5R6SHH1PROD with PUBLIC LAWS Time period. VerDate Nov 24 2008 15:33 Aug 19, 2010 PUBLIC LAW 111–203—JULY 21, 2010 Jkt 089139 PO 00000 Frm 00342 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203 anorris on DSK5R6SHH1PROD with PUBLIC LAWS PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1717 ‘‘(B) DUTIES.—The chief compliance officer shall— ‘‘(i) report directly to the board or to the senior officer of the facility; ‘‘(ii) review compliance with the core principles in this subsection; ‘‘(iii) in consultation with the board of the facility, a body performing a function similar to that of a board, or the senior officer of the facility, resolve any conflicts of interest that may arise; ‘‘(iv) be responsible for establishing and administering the policies and procedures required to be established pursuant to this section; ‘‘(v) ensure compliance with this Act and the rules and regulations issued under this Act, including rules prescribed by the Commission pursuant to this section; and ‘‘(vi) establish procedures for the remediation of noncompliance issues found during compliance office reviews, look backs, internal or external audit findings, self-reported errors, or through validated complaints. ‘‘(C) REQUIREMENTS FOR PROCEDURES.—In establishing procedures under subparagraph (B)(vi), the chief compliance officer shall design the procedures to establish the handling, management response, remediation, retesting, and closing of noncompliance issues. ‘‘(D) ANNUAL REPORTS.— ‘‘(i) 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 execution facility with this Act; and ‘‘(II) the policies and procedures, including the code of ethics and conflict of interest policies, of the swap execution facility. ‘‘(ii) REQUIREMENTS.—The chief compliance officer shall— ‘‘(I) submit each report described in clause (i) with the appropriate financial report of the swap execution facility that is required to be submitted to the Commission pursuant to this section; a
@FedFRASER