Retirement Income Protection Act of 2011 - Amends the Employee Retirement Income Security Act of 1974 (ERISA) to declare that no person shall be considered a fiduciary to an employee benefit plan (special entity) by reason of that person's performing any service, act, or duty as a swap dealer, major swap participant, security-based swap dealer, or major security-based swap participant with respect to such entity.
Amends the Commodity Exchange Act (CEA) and the Securities Exchange Act of 1934 to redefine "special entity" to exclude from its meaning as well as from certain business conduct standards: (1) employee benefit plans, and (2) any collective investment vehicle in which one or more special entities invest.
Declares that no swap dealer shall be treated as an advisor to a Special Entity (and thus subject to specified duties and restrictions related to fraudulent, deceptive, or manipulative behavior) if: (1) the Special Entity represents in writing that it will not rely on recommendations of the swap dealer, but will rely on advice from an independent representative; and (2) the swap dealer discloses to the Special Entity that it is not undertaking to act in the Special Entity 's best interests. Declares further that no swap dealer shall be considered to act as an advisor to a Special Entity solely by reason of providing information to an independent representative of a Special Entity.
Prescribes criteria for considering a representative of a Special Entity to be independent of a swap dealer.
[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3045 Introduced in House (IH)]
112th CONGRESS
1st Session
H. R. 3045
To amend the Employee Retirement Income Security Act of 1974, the
Commodity Exchange Act, and the Securities Exchange Act of 1934 to
ensure that pension plans can use swaps to hedge risks, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 23, 2011
Mr. Canseco (for himself and Mr. Garrett) introduced the following
bill; which was referred to the Committee on Agriculture, and in
addition to the Committees on Education and the Workforce and Financial
Services, for a period to be subsequently determined by the Speaker, in
each case for consideration of such provisions as fall within the
jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend the Employee Retirement Income Security Act of 1974, the
Commodity Exchange Act, and the Securities Exchange Act of 1934 to
ensure that pension plans can use swaps to hedge risks, 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.
This Act may be cited as the ``Retirement Income Protection Act of
2011''.
SEC. 2. CLARIFICATION OF THE DEFINITION OF FIDUCIARY.
Section 3(21) of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1002(21)) is amended--
(1) in subparagraph (A), by striking ``subparagraph (B)''
and inserting ``subparagraphs (B) and (C)'';
(2) by adding at the end the following subparagraph:
``(C) No person shall be a fiduciary with respect to a plan
by reason of any service, act, or duty that such person is
required to perform with respect to such plan by reason of
section 4s(h) of the Commodity Exchange Act, section 15F(h) of
the Securities Exchange Act of 1934, any rule, regulation, or
standard prescribed pursuant to such sections, or any other
Federal law, rule, or regulation.''.
SEC. 3. CLARIFICATION OF THE DEFINITION OF SPECIAL ENTITY AND REMOVAL
OF ERISA PLANS.
(a) Amendment to the CEA.--Section 4s(h)(2)(C) of the Commodity
Exchange Act (7 U.S.C. 6s(h)(2)(C)) is amended--
(1) by striking ``For purposes'' and inserting ``(i) For
purposes'';
(2) by striking clause (iii) and redesignating clauses (i),
(ii), (iv), and (v) as subclauses (I), (II), (III) and (IV),
respectively; and
(3) by adding at the end the following:.
``(ii) Such term shall not include any collective
investment vehicle in which one or more special
entities invest.''.
(b) Amendment to the 1934 Act.--Section 15F(h)(2)(C) of the
Securities Exchange Act of 1934 (15 U.S.C. 78o-10(h)(2)(C)) is
amended--
(1) by striking ``For purposes'' and inserting ``(i) For
purposes'';
(2) by striking clause (iii) and redesignating clauses (i),
(ii), (iv), and (v) as subclauses (I), (II), (III) and (IV),
respectively; and
(3) by adding at the end the following:
``(ii) Such term shall not include any collective
investment vehicle in which one or more special
entities invest.''.
SEC. 4. CONFORMING AMENDMENTS TO COUNTERPARTY REQUIREMENTS.
(a) Amendment to the CEA.--Section 4s(h)(5)(A)(i) of the Commodity
Exchange Act (7 U.S.C. 6s(h)(5)(A)(i)) is amended--
(1) by inserting ``and'' after the semicolon in subclause
(V); and
(2) by striking subclause (VII).
(b) Amendment to the 1934 Act.--Section 15F(h)(5)(A)(i) of the
Securities Exchange Act of 1934 (15 U.S.C. 78o-10(h)(5)(A)(i)) is
amended--
(1) by inserting ``and'' after the semicolon in subclause
(V); and
(2) by striking subclause (VII).
SEC. 5. CLARIFICATION OF THE DEFINITION OF ADVISOR.
(a) Amendment to the CEA.--Section 4s(h)(4) of the Commodity
Exchange Act (7 U.S.C. 6s(h)(4)) is amended--
(1) in subparagraph (B), by adding at the end the
following: ``The duty of a swap dealer to act in the best
interests of a Special Entity shall not be construed to be a
fiduciary standard under Federal or State Law.''; and
(2) by adding at the end the following:
``(D) Rule of construction.--A swap dealer will not
be treated as an advisor to a Special Entity if--
``(i) the Special Entity represents in
writing that--
``(I) the Special Entity will not
rely on recommendations provided by the
swap dealer; and
``(II) the Special Entity will rely
on advice from an independent
representative as described in
paragraph (5); and
``(ii) the swap dealer discloses to the
Special Entity that it is not undertaking to
act in the best interests of the Special
Entity, as otherwise required by this
paragraph.
No swap dealer shall be considered to act as an advisor
to a Special Entity solely by reason of providing
information to an independent representative described
in paragraph (5)(D) of a Special Entity.''.
(b) Amendment to the 1934 Act.--Section 15F(h)(4)(B) of the
Securities Exchange Act of 1934 (15 U.S.C. 78o-10(h)(4)(B)) is
amended--
(1) in subparagraph (B), by adding at the end the
following: ``The duty of a security-based swap dealer to act in
the best interests of a Special Entity shall not be construed
to be a fiduciary standard under Federal or State Law.''; and
(2) by adding at the end the following:
``(D) Rule of construction.--A security-based swap
dealer will not be treated as an advisor to a Special
Entity if--
``(i) the Special Entity represents in
writing that--
``(I) the Special Entity will not
rely on recommendations provided by the
security-based swap dealer; and
``(II) the Special Entity will rely
on advice from an independent
representative as described in
paragraph (5); and
``(ii) the security-based swap dealer
discloses to the Special Entity that it is not
undertaking to act in the best interests of the
Special Entity, as otherwise required by this
paragraph.
No security-based swap dealer shall be considered to
act as an advisor to a Special Entity solely by reason
of providing information to an independent
representative described in paragraph (5)(D) of a
Special Entity.''.
SEC. 6. CLARIFICATION OF THE DEFINITION OF INDEPENDENT REPRESENTATIVES.
(a) Amendment to the CEA.--Section 4s(h)(5) of the Commodity
Exchange Act (7 U.S.C. 6s(h)(5)) is amended--
(1) in subparagraph (A)(ii) by striking ``; and'' and
inserting a period;
(2) in subparagraph (B), by striking ``the Commission'' and
inserting ``The Commission'';
(3) by adding at the end the following subparagraphs:
``(C) A representative of a Special Entity will be
considered to be independent of a swap dealer if--
``(i) the representative is not an
associated person of the swap dealer within the
meaning of section 1a(4); and
``(ii) no more than 10 percent of the gross
revenues of the representative are derived from
the swap dealer.
``(D) Each of the requirements of this paragraph
shall be considered to be met if the Special Entity
represents to the swap dealer that it is represented
by--
``(i) an entity registered as an investment
adviser under the Investment Advisers Act of
1940;
``(ii) a commodity trading adviser as
defined in section 1a(12);
``(iii) a municipal advisor as defined in
section 15B(e)(4) of the Securities Exchange
Act of 1934; or
``(iv) an advisor certified by the National
Futures Association.''.
(b) Amendment to the 1934 Act.--Section 15F(h)(5) of the Securities
Exchange Act of 1934 (15 U.S.C. 78o-10(h)(5)) is amended by adding at
the end the following subparagraphs:
``(C) Independence.--A representative of a Special
Entity will be considered to be independent of a
security-based swap dealer if--
``(i) the representative is not an
associated person of the security-based swap
dealer within the meaning of section 1a(4) of
the Commodity Exchange Act; and
``(ii) no more than 10 percent of the gross
revenues of the representative are derived from
the security-based swap dealer.
``(D) Rule of construction.--Each of the
requirements of this paragraph shall be considered to
be met if the Special Entity represents to the
security-based swap dealer that it is represented by--
``(i) an entity registered as an investment
adviser under the Investment Advisers Act of
1940;
``(ii) a commodity trading adviser as
defined in section 1a(12) of the Commodity
Exchange Act;
``(iii) a municipal advisor as defined in
section 15B(e)(4); or
``(iv) an advisor certified by the
Financial Industry Regulatory Authority.''.
SEC. 7. AMENDMENT TO THE DEFINITION OF COMMODITY TRADING ADVISOR.
Section 1a(12)(B)(iii) of the Commodity Exchange Act (7 U.S.C.
1a(12)(B)(iii)) is amended by striking ``or futures commission
merchant'' and inserting ``, futures commission merchant, or swap
dealer''.
SEC. 8. EFFECTIVE DATE.
(a) In General.--The amendments made by sections 3 through 7 to the
respective provisions of the Commodity Exchange Act and the Securities
Exchange Act of 1934 shall take effect as if included in the sections
of the Dodd-Frank Wall Street Reform and Consumer Protection Act that
added such respective provisions to such Acts.
(b) ERISA Amendments.--The amendment made by section 2 of this Act
shall take effect as if enacted on the date of enactment of the Dodd-
Frank Wall Street Reform and Consumer Protection Act.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Agriculture, and in addition to the Committees on Education and the Workforce, and Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Agriculture, and in addition to the Committees on Education and the Workforce, and Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Agriculture, and in addition to the Committees on Education and the Workforce, and Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Subcommittee on General Farm Commodities and Risk Management.
Hearings Held by the Subcommittee on Capital Markets and Government Sponsored Enterprises Prior to Referral.
Referred to the Subcommittee on Capital Markets and Government Sponsored Enterprises.
Subcommittee Consideration and Mark-up Session Held.
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Forwarded by Subcommittee to Full Committee by the Yeas and Nays: 19 - 14 .
Referred to the Subcommittee on Health, Employment, Labor, and Pensions.