Swaps Regulatory Improvement Act

(This measure has not been amended since it was introduced. The summary of that version is repeated here.)

Swaps Regulatory Improvement Act - Amends the Dodd-Frank Wall Street Reform and Consumer Protection Act with respect to the prohibition against certain federal assistance to swaps entities, namely the use of any advances from specified Federal Reserve credit facilities or discount windows, or Federal Deposit Insurance Corporation (FDIC) insurance or guarantees, for the purpose of: (1) making any loan to, or purchasing any stock, equity interest, or debt obligation of, any swaps entity; (2) purchasing the assets of any swaps entity; (3) guaranteeing any loan or debt issuance of any swaps entity; or (4) entering into any assistance arrangement (including tax breaks), loss sharing, or profit sharing with any swaps entity.

Extends to any major swap participant or major security-based swap participant that is an uninsured U.S. branch or agency of a foreign bank the exemption from the prohibition against federal assistance to swaps entities which is currently limited to any major swap participant or major security-based swap participant that is an FDIC-insured bank or savings association.

Designates both uninsured U.S. branches or agencies of a foreign bank and insured depository institutions as "covered depository institutions."

Requires any covered depository institution exempted from the prohibition to limit its swap and security-based swap activities to hedging and similar risk mitigating activities (as under current law), non-structured finance swap activities, or certain structured finance swap activities. (Defines "structured finance swap" as a swap or security-based swap based on an asset-backed security [or group or index primarily composed of asset-backed securities].)

Qualifies a structured finance swap activity for the exemption if: (1) it is undertaken for hedging or risk management purposes, or (2) each asset-backed security underlying the structured finance swap is of a credit quality and of a type or category with respect to which the prudential regulators have jointly adopted rules authorizing such a swap or security-based swap activity by covered depository institutions.

Repeals the exemption from the prohibition for any insured depository institution that limits its swap and security-based swap activities to acting as a swaps entity for: (1) swaps or security-based swaps involving rates or reference assets that are permissible for investment by a national bank; or (2) credit default swaps, including those referencing the credit risk of asset-backed securities unless they are cleared by a derivatives clearing organization or a clearing agency registered, or exempt from registration, under the Commodity Exchange Act or the Securities Exchange Act.

[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 992 Introduced in House (IH)]

113th CONGRESS
  1st Session
                                H. R. 992

To amend provisions in section 716 of the Dodd-Frank Wall Street Reform 
 and Consumer Protection Act relating to Federal assistance for swaps 
                               entities.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 6, 2013

Mr. Hultgren (for himself, Mr. Himes, Mr. Hudson, and Mr. Sean Patrick 
Maloney of New York) introduced the following bill; which was referred 
    to the Committee on Financial Services, and in addition to the 
Committee on Agriculture, 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 provisions in section 716 of the Dodd-Frank Wall Street Reform 
 and Consumer Protection Act relating to Federal assistance for swaps 
                               entities.

    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 ``Swaps Regulatory Improvement Act''.

SEC. 2. REFORM OF PROHIBITION ON SWAP ACTIVITY ASSISTANCE.

    Section 716 of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (15 U.S.C. 8305) is amended--
            (1) in subsection (b)--
                    (A) in paragraph (2)(B), by striking ``insured 
                depository institution'' and inserting ``covered 
                depository institution''; and
                    (B) by adding at the end the following:
            ``(3) Covered depository institution.--The term `covered 
        depository institution' means--
                    ``(A) an insured depository institution, as that 
                term is defined in section 3 of the Federal Deposit 
                Insurance Act (12 U.S.C. 1813); and
                    ``(B) a United States uninsured branch or agency of 
                a foreign bank.'';
            (2) in subsection (c)--
                    (A) in the heading for such subsection, by striking 
                ``Insured'' and inserting ``Covered'';
                    (B) by striking ``an insured'' and inserting ``a 
                covered'';
                    (C) by striking ``such insured'' and inserting 
                ``such covered''; and
                    (D) by striking ``or savings and loan holding 
                company'' and inserting ``savings and loan holding 
                company, or foreign banking organization (as such term 
                is defined under Regulation K of the Board of Governors 
                of the Federal Reserve System (12 C.F.R. 211.21(o)))'';
            (3) by amending subsection (d) to read as follows:
    ``(d) Only Bona Fide Hedging and Traditional Bank Activities 
Permitted.--
            ``(1) In general.--The prohibition in subsection (a) shall 
        not apply to any covered depository institution that limits its 
        swap and security-based swap activities to the following:
                    ``(A) Hedging and other similar risk mitigation 
                activities.--Hedging and other similar risk mitigating 
                activities directly related to the covered depository 
                institution's activities.
                    ``(B) Non-structured finance swap activities.--
                Acting as a swaps entity for swaps or security-based 
                swaps other than a structured finance swap.
                    ``(C) Certain structured finance swap activities.--
                Acting as a swaps entity for swaps or security-based 
                swaps that are structured finance swaps, if--
                            ``(i) such structured finance swaps are 
                        undertaken for hedging or risk management 
                        purposes; or
                            ``(ii) each asset-backed security 
                        underlying such structured finance swaps is of 
                        a credit quality and of a type or category with 
                        respect to which the prudential regulators have 
                        jointly adopted rules authorizing swap or 
                        security-based swap activity by covered 
                        depository institutions.
            ``(2) Definitions.--For purposes of this subsection:
                    ``(A) Structured finance swap.--The term 
                `structured finance swap' means a swap or security-
                based swap based on an asset-backed security (or group 
                or index primarily comprised of asset-backed 
                securities).
                    ``(B) Asset-backed security.--The term `asset-
                backed security' has the meaning given such term under 
                section 3(a) of the Securities Exchange Act of 1934 (15 
                U.S.C. 78c(a)).'';
            (4) in subsection (e), by striking ``an insured'' and 
        inserting ``a covered''; and
            (5) in subsection (f)--
                    (A) by striking ``an insured depository'' and 
                inserting ``a covered depository''; and
                    (B) by striking ``the insured depository'' each 
                place such term appears and inserting ``the covered 
                depository''.
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