Keep Repos to Maturity on Balance Sheet Act of 2017

Keep Repos to Maturity on Balance Sheet Act of 2017

This bill requires the Securities and Exchange Commission, in establishing accounting principles or standards for purposes of the securities laws, to require that a repurchase-to-maturity transaction be treated as a secured borrowing in which the transferred asset serves as collateral.

A "repurchase-to-maturity transaction" is one in which: (1) a financial asset is transferred in exchange for cash, other financial assets, or letters of credit; and (2) the transferor and transferee agree that the transferee may return or redeem the transferred asset upon the asset's maturity.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 317 Introduced in House (IH)]

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115th CONGRESS
  1st Session
                                H. R. 317

   To direct the Securities and Exchange Commission to require that 
 repurchase-to-maturity transactions be treated as secured borrowings.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 5, 2017

 Mr. Capuano introduced the following bill; which was referred to the 
                    Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
   To direct the Securities and Exchange Commission to require that 
 repurchase-to-maturity transactions be treated as secured borrowings.

    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 ``Keep Repos to Maturity on Balance 
Sheet Act of 2017''.

SEC. 2. ACCOUNTING TREATMENT OF RTM TRANSACTIONS.

    (a) In General.--In establishing accounting principles or standards 
for purposes of the securities laws, the Securities and Exchange 
Commission shall require that a repurchase-to-maturity transaction be 
treated as a secured borrowing in which the transferred asset serves as 
collateral.
    (b) Definitions.--In this section:
            (1) Repurchase-to-maturity transaction.--The term 
        ``repurchase-to-maturity transaction'' means a transaction in 
        which--
                    (A) a financial asset is transferred in exchange 
                for cash, other financial assets, or letters of credit; 
                and
                    (B) concurrently with the transfer, the transferor 
                and the transferee agree that, at the maturity of the 
                transferred asset, the transferee may either, at the 
                option of the transferee--
                            (i) return the transferred asset (or a 
                        substantially similar asset) to the transferor, 
                        thereby obligating the transferor to reacquire 
                        the transferred asset (or to acquire the 
                        substantially similar asset, as the case may 
                        be) for an amount equal to the value of the 
                        cash, other financial assets, or letters of 
                        credit described in subparagraph (A), plus a 
                        stipulated interest factor; or
                            (ii) redeem the transferred asset from the 
                        issuer of the transferred asset.
            (2) Securities laws.--The term ``securities laws'' has the 
        meaning given such term in section 3(a) of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78c(a)).
            (3) Transferred asset.--The term ``transferred asset'' 
        means a financial asset transferred in exchange for cash, other 
        financial assets, or letters of credit in a repurchase-to-
        maturity transaction, as described in paragraph (1)(A).
    (c) Effective Date.--The treatment required under subsection (a) 
shall apply beginning on the date that is 90 days after the date of the 
enactment of this Act.
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