Sec. 301 Short title
This title may be cited as the “End-User Relief and Market Certainty Act”.
Title III — End-user relief
III End-user relief
A End-User exemption from margin requirements
Sec. 311 End-user margin requirements
Commodity Exchange Act amendment— Section 4s(e) of the Commodity Exchange Act (7 U.S.C. 6s(e)) is amended by adding at the end the following new paragraph:
“(4) Applicability with respect to counterparties—The requirements of paragraphs (2)(A)(ii) and (2)(B)(ii), including the initial and variation margin requirements imposed by rules adopted pursuant to paragraphs (2)(A)(ii) and (2)(B)(ii), shall not apply to a swap in which a counterparty qualifies for an exception under section 2(h)(7)(A), or an exemption issued under section 4(c)(1) from the requirements of section 2(h)(1)(A) for cooperative entities as defined in such exemption, or satisfies the criteria in section 2(h)(7)(D).”
Securities Exchange Act of 1934 amendment— Section 15F(e) of the Securities Exchange Act of 1934 (15 U.S.C. 78o–10(e)) is amended by adding at the end the following new paragraph:
“(4) Applicability with respect to counterparties—The requirements of paragraphs (2)(A)(ii) and (2)(B)(ii) shall not apply to a security-based swap in which a counterparty qualifies for an exception under section 3C(g)(1) or satisfies the criteria in section 3C(g)(4).”
Sec. 312 Implementation
The amendment made to the Commodity Exchange Act by this subtitle shall be implemented—
without regard to—
chapter 35 of title 44, United States Code; and
the notice and comment provisions of section 553 of title 5, United States Code;
through the promulgation of an interim final rule, pursuant to which public comment will be sought before a final rule is issued; and
such that paragraph (1) shall apply solely to changes to rules and regulations, or proposed rules and regulations, that are limited to and directly a consequence of the amendment.
B Inter-Affiliate swaps
Sec. 321 Treatment of affiliate transactions
In general—
Commodity Exchange Act amendment— Section 2(h)(7)(D)(i) of the Commodity Exchange Act (7 U.S.C. 2(h)(7)(D)(i)) is amended to read as follows:
“(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 enters into the swap to hedge or mitigate the commercial risk of the person or other affiliate of the person that is not a financial entity, provided that if the transfer of commercial risk is addressed by entering into a swap with a swap dealer or major swap participant, an appropriate credit support measure or other mechanism is utilized.”
Securities Exchange Act of 1934 amendment— Section 3C(g)(4)(A) of the Securities Exchange Act of 1934 (15 U.S.C. 78c–3(g)(4)(A)) is amended to read as follows:
“(A) In general—An affiliate of a person that qualifies for an exception under paragraph (1) (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 enters into the security-based swap to hedge or mitigate the commercial risk of the person or other affiliate of the person that is not a financial entity, provided that if the transfer of commercial risk is addressed by entering into a security-based swap with a security-based swap dealer or major security-based swap participant, an appropriate credit support measure or other mechanism is utilized.”
Applicability of credit support measure requirement— Notwithstanding section 371 of this Act, the requirements in section 2(h)(7)(D)(i) of the Commodity Exchange Act and section 3C(g)(4)(A) of the Securities Exchange Act of 1934, as amended by subsection (a), requiring that a credit support measure or other mechanism be utilized if the transfer of commercial risk referred to in such sections is addressed by entering into a swap with a swap dealer or major swap participant or a security-based swap with a security-based swap dealer or major security-based swap participant, as appropriate, shall not apply with respect to swaps or security-based swaps, as appropriate, entered into before the date of the enactment of this Act.
C Indemnification requirements related to swap data repositories
Sec. 331 Indemnification requirements
Derivatives clearing organizations— Section 5b(k)(5) of the Commodity Exchange Act (7 U.S.C. 7a–1(k)(5)) is amended to read as follows:
“(5) Confidentiality agreement—Before the Commission may share information with any entity described in paragraph (4), 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.”
Swap data repositories— Section 21(d) of such Act (7 U.S.C. 24a(d)) is amended to read as follows:
“(d) Confidentiality agreement—Before the swap data repository may share information with any entity described in subsection (c)(7), 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.”
Security-Based swap data repositories— Section 13(n)(5)(H) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(n)(5)(H)) is amended to read as follows:
“(H) Confidentiality agreement—Before the security-based swap data repository may share information with any entity described in subparagraph (G), the security-based swap data repository shall receive a written agreement from each entity stating that the entity shall abide by the confidentiality requirements described in section 24 relating to the information on security-based swap transactions that is provided.”
D Relief for municipal utilities
Sec. 341 Transactions with utility special entities
Section 1a(49) of the Commodity Exchange Act (7 U.S.C. 1a(49)) is amended by adding at the end the following:
“(E) Certain transactions with a utility special entity
“(i) Transactions in utility operations-related swaps shall be reported pursuant to section 4r.
“(ii) In making a determination to exempt pursuant to subparagraph (D), the Commission shall treat a utility operations-related swap entered into with a utility special entity, as defined in section 4s(h)(2)(D), as if it were entered into with an entity that is not a special entity, as defined in section 4s(h)(2)(C).”
Sec. 342 Utility special entity defined
Section 4s(h)(2) of the Commodity Exchange Act (7 U.S.C. 6s(h)(2)) is amended by adding at the end the following:
“(D) Utility special entity—For purposes of this Act, the term utility special entity means a special entity, or any instrumentality, department, or corporation of or established by a State or political subdivision of a State, that—
“(i) owns or operates an electric or natural gas facility or an electric or natural gas operation;
“(ii) supplies natural gas and or electric energy to another utility special entity;
“(iii) has public service obligations under Federal, State, or local law or regulation to deliver electric energy or natural gas service to customers; or
“(iv) is a Federal power marketing agency, as defined in section 3 of the Federal Power Act.”
Sec. 343 Utility operations-Related swap
Swap further defined— Section 1a(47)(A)(iii) of the Commodity Exchange Act (7 U.S.C. 1a(47)(A)(iii)) is amended—
by striking “and” at the end of subclause (XXI);
by adding “and” at the end of subclause (XXII); and
by adding at the end the following:
“(XXIII) a utility operations-related swap;”
Utility operations-Related swap defined— Section 1a of such Act (7 U.S.C. 1a) is amended by adding at the end the following:
“(52) Utility operations-related swap—The term utility operations-related swap means a swap that—
“(A) is entered into to hedge or mitigate a commercial risk;
“(B) is not a contract, agreement, or transaction based on, derived on, or referencing—
“(i) an interest rate, credit, equity, or currency asset class; or
“(ii) a metal, agricultural commodity, or crude oil or gasoline commodity of any grade, except as used as fuel for electric energy generation; and
“(C) is associated with—
“(i) the generation, production, purchase, or sale of natural gas or electric energy, the supply of natural gas or electric energy to a utility, or the delivery of natural gas or electric energy service to utility customers;
“(ii) all fuel supply for the facilities or operations of a utility;
“(iii) compliance with an electric system reliability obligation;
“(iv) compliance with an energy, energy efficiency, conservation, or renewable energy or environmental statute, regulation, or government order applicable to a utility; or
“(v) any other electric energy or natural gas swap to which a utility is a party.”
E End-User regulatory relief
Sec. 351 End-users not treated as financial entities
In general— Section 2(h)(7)(C)(iii) of the Commodity Exchange Act (7 U.S.C. 2(h)(7)(C)(iii)) is amended to read as follows:
“(iii) Limitation—Such definition shall not include an entity—
“(I) whose primary business is providing financing, and who 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; or
“(II) who is not supervised by a prudential regulator, and is not described in any of subclauses (I) through (VII) of clause (i), and—
“(aa) is a commercial market participant and is considered a financial entity under clause (i)(VIII) because the entity predominantly engages in physical delivery contracts; or
“(bb) enters into swaps, contracts for future delivery, and other derivatives on behalf of, or to hedge or mitigate the commercial risk of, whether directly or in the aggregate, affiliates that are not so supervised or described.”
Commercial market participant defined—
In general— Section 1a of such Act (7 U.S.C. 1a), as amended by section 343(b) of this Act, is amended by redesignating paragraphs (8) through (52) as paragraphs (9) through (53), respectively, and by inserting after paragraph (6) the following:
“(7) Commercial market participant—The term commercial market participant means any producer, processor, merchant, or commercial user of an exempt or agricultural commodity, or the products or byproducts of such a commodity.”
Conforming amendments—
Section 1a of such Act (7 U.S.C. 1a) is amended—
in subparagraph (A) of paragraph (18) (as so redesignated by paragraph (1) of this subsection), in the matter preceding clause (i), by striking “(18)(A)” and inserting “(19)(A)”; and
in subparagraph (A)(vii) of paragraph (19) (as so redesignated by paragraph (1) of this subsection), in the matter following subclause (III), by striking “(17)(A)” and inserting “(18)(A)”.
Section 4(c)(1)(A)(i)(I) of such Act (7 U.S.C. 6(c)(1)(A)(i)(I)) is amended by striking “(7), paragraph (18)(A)(vii)(III), paragraphs (23), (24), (31), (32), (38), (39), (41), (42), (46), (47), (48), and (49)” and inserting “(8), paragraph (19)(A)(vii)(III), paragraphs (24), (25), (32), (33), (39), (40), (42), (43), (47), (48), (49), and (50)”.
Section 4q(a)(1) of such Act (7 U.S.C. 6o–1(a)(1)) is amended by striking “1a(9)” and inserting “1a(10)”.
Section 4s(f)(1)(D) of such Act (7 U.S.C. 6s(f)(1)(D)) is amended by striking “1a(47)(A)(v)” and inserting “1a(48)(A)(v)”.
Section 4s(h)(5)(A)(i) of such Act (7 U.S.C. 6s(h)(5)(A)(i)) is amended by striking “1a(18)” and inserting “1a(19)”.
Section 4t(b)(1)(C) of such Act (7 U.S.C. 6t(b)(1)(C)) is amended by striking “1a(47)(A)(v)” and inserting “1a(48)(A)(v)”.
Section 5(d)(23) of such Act (7 U.S.C. 7(d)(23)) is amended by striking “1a(47)(A)(v)” and inserting “1a(48)(A)(v)”.
Section 5(e)(1) of such Act (7 U.S.C. 7(e)(1)) is amended by striking “1a(9)” and inserting “1a(10)”.
Section 5b(k)(3)(A) of such Act (7 U.S.C. 7a–1(k)(3)(A)) is amended by striking “1a(47)(A)(v)” and inserting “1a(48)(A)(v)”.
Section 5c(c)(4)(B) of such Act (7 U.S.C. 7a–2(c)(4)(B)) is amended by striking “1a(10)” and inserting “1a(11)”.
Section 5h(f)(10)(A)(iii) of such Act (7 U.S.C. 7b–3(f)(10)(A)(iii)) is amended by striking “1a(47)(A)(v)” and inserting “1a(48)(A)(v)”.
Section 21(f)(4)(C) of such Act (7 U.S.C. 24a(f)(4)(C)) is amended by striking “1a(48)” and inserting “1a(49)”.
Sec. 352 Reporting of illiquid swaps so as to not disadvantage certain non-financial end-users
Section 2(a)(13) of the Commodity Exchange Act (7 U.S.C. 2(a)(13)) is amended—
in subparagraph (C), by striking “The Commission” and inserting “Except as provided in subparagraph (D), the Commission”; and
by redesignating subparagraphs (D) through (G) as subparagraphs (E) through (H), respectively, and inserting after subparagraph (C) the following:
“(D) Requirements for swap transactions in illiquid markets—Notwithstanding subparagraph (C):
“(i) The Commission shall provide by rule for the public reporting of swap transactions, including price and volume data, in illiquid markets that are not cleared and entered into by a non-financial entity that is hedging or mitigating commercial risk in accordance with subsection (h)(7)(A).
“(ii) The Commission shall ensure that the swap transaction information referred to in clause (i) of this subparagraph is available to the public no sooner than 30 days after the swap transaction has been executed or at such later date as the Commission determines appropriate to protect the identity of participants and positions in illiquid markets and to prevent the elimination or reduction of market liquidity.
“(iii) In this subparagraph, the term illiquid markets means any market in which the volume and frequency of trading in swaps is at such a level as to allow identification of individual market participants.”
Sec. 353 Relief for grain elevator operators, farmers, agricultural counterparties, and commercial market participants
The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by inserting after section 4t the following:
“4u. Recordkeeping requirements applicable to non-registered members of certain registered entities
“Except as provided in section 4(a)(3), a member of a designated contract market or a swap execution facility that is not registered with the Commission and not required to be registered with the Commission in any capacity shall satisfy the recordkeeping requirements of this Act and any recordkeeping rule, order, or regulation under this Act by maintaining a written record of each transaction in a contract for future delivery, option on a future, swap, swaption, trade option, or related cash or forward transaction. The written record shall be sufficient if it includes the final agreement between the parties and the material economic terms of the transaction and is identifiable and searchable by transaction.”
Sec. 354 Relief for end-users who use physical contracts with volumetric optionality
Section 1a(47)(B)(ii) of the Commodity Exchange Act (7 U.S.C. 1a(47)(B)(ii)) is amended to read as follows:
“(ii) any purchase or sale of a nonfinancial commodity or security for deferred shipment or delivery, so long as the transaction is intended to be physically settled, including any stand-alone or embedded option—
“(I) for which exercise results in a physical delivery obligation;
“(II) that cannot be severed or marketed separately from the overall transaction for the purpose of financial settlement; and
“(III) for which both parties are commercial market participants;”
Sec. 355 Commission vote required before automatic change of swap dealer de minimis level
Section 1a(49)(D) of the Commodity Exchange Act (7 U.S.C. 1a(49)(D)) is amended—
by striking all that precedes “shall exempt” and inserting the following:
“(D) De minimis exception
“(i) In general—The Commission”
by adding after and below the end the following new clause:
“(ii) Special rule—The de minimis quantity of swap dealing as described in clause (i) that is currently set at a quantity of $8,000,000,000 shall only be amended or reduced through a new affirmative action of the Commission undertaken by rule or regulation.”
Sec. 356 Capital requirements for non-bank swap dealers
in paragraph (2)(B), by striking “shall” and inserting the following: “and the Securities and Exchange Commission, in consultation with the prudential regulators, shall jointly”; and
in paragraph (3)(D)—
in clause (ii), by striking “shall, to the maximum extent practicable,” and inserting “shall”; and
by adding at the end the following:
“(iii) Financial models—To the extent that swap dealers and major swap participants that are banks are permitted to use financial models approved by the prudential regulators or the Securities and Exchange Commission to calculate minimum capital requirements and minimum initial and variation margin requirements, including the use of non-cash collateral, the Commission shall, in consultation with the prudential regulators and the Securities and Exchange Commission, permit the use of comparable financial models by swap dealers and major swap participants that are not banks.”
Securities Exchange Act of 1934— Section 15F(e) of the Securities Exchange Act of 1934 (15 U.S.C. 78o–10(e)) is amended—
in paragraph (2)(B), by striking “shall” and inserting the following: “and the Commodity Futures Trading Commission, in consultation with the prudential regulators, shall jointly”; and
in paragraph (3)(D)—
in clause (ii), by striking “shall, to the maximum extent practicable,” and inserting “shall”; and
by adding at the end the following:
“(iii) Financial models—To the extent that security-based swap dealers and major security-based swap participants that are banks are permitted to use financial models approved by the prudential regulators or the Commodity Futures Trading Commission to calculate minimum capital requirements and minimum initial and variation margin requirements, including the use of non-cash collateral, the Commission shall, in consultation with the Commodity Futures Trading Commission, permit the use of comparable financial models by security-based swap dealers and major security-based swap participants that are not banks.”
Sec. 357 Harmonization with the Jumpstart Our Business Startups Act
Within 90 days after the date of the enactment of this Act, the Commodity Futures Trading Commission shall—
revise section 4.7(b) of title 17, Code of Federal Regulations, in the matter preceding paragraph (1), to read as follows:
“(b) Relief available to commodity pool operators. Upon filing the notice required by paragraph (d) of this section, and subject to compliance with the conditions specified in paragraph (d) of this section, any registered commodity pool operator who sells participations in a pool solely to qualified eligible persons in an offering which qualifies for exemption from the registration requirements of the Securities Act pursuant to section 4(2) of that Act or pursuant to Regulation S, 17 CFR 230.901 et seq., and any bank registered as a commodity pool operator in connection with a pool that is a collective trust fund whose securities are exempt from registration under the Securities Act pursuant to section 3(a)(2) of that Act and are sold solely to qualified eligible persons, may claim any or all of the following relief with respect to such pool:”
revise section 4.13(a)(3)(i) of such title to read as follows:
“(i) Interests in the pool are exempt from registration under the Securities Act of 1933, and such interests are offered and sold pursuant to section 4 of the Securities Act of 1933 and the regulations thereunder;”
Sec. 358 Bona fide hedge defined to protect end-user risk management needs
Section 4a(c) of the Commodity Exchange Act (7 U.S.C. 6a(c)) is amended—
in paragraph (1)—
by striking “may” and inserting “shall”; and
by striking “future for which” and inserting “future, to be determined by the Commission, for which either an appropriate swap is available or”;
in paragraph (2)—
in the matter preceding subparagraph (A), by striking “subsection (a)(2)” and all that follows through “position as” and inserting “paragraphs (2) and (5) of subsection (a) for swaps, contracts of sale for future delivery, or options on the contracts or commodities, a bona fide hedging transaction or position is”; and
in subparagraph (A)(ii), by striking “of risks” and inserting “or management of current or anticipated risks”; and
by adding at the end the following:
“(3) The Commission may further define, by rule or regulation, what constitutes a bona fide hedging transaction, provided that the rule or regulation is consistent with the requirements of subparagraphs (A) and (B) of paragraph (2).”
Sec. 359 Cross-border regulation of derivatives transactions
Joint rulemaking required—
In general— Not later than 270 days after the date of enactment of this Act, the Securities and Exchange Commission and the Commodity Futures Trading Commission shall jointly issue rules setting forth the application of United States swaps requirements of the Securities Exchange Act of 1934 and the Commodity Exchange Act relating to cross-border swaps and security-based swaps transactions involving U.S. persons or non-U.S. persons.
Construction— The rules required under paragraph (1) shall be identical, notwithstanding any difference in the authorities granted the Commissions in section 30(c) of the Securities Exchange Act of 1934 (15 U.S.C. 78dd(c)) and section 2(i) of the Commodity Exchange Act (7 U.S.C. 2(i)), respectively, except to the extent necessary to accommodate differences in other underlying statutory requirements under such Acts, and the rules thereunder.
Considerations— The Commissions shall jointly issue rules that address—
the nature of the connections to the United States that require a non-U.S. person to register as a swap dealer, major swap participant, security-based swap dealer, or major security-based swap participant under each Commission’s respective Acts and the regulations issued under such Acts;
which of the United States swaps requirements shall apply to the swap and security-based swap activities of non-U.S. persons, U.S. persons, and their branches, agencies, subsidiaries, and affiliates outside of the United States and the extent to which such requirements shall apply; and
the circumstances under which a non-U.S. person in compliance with the regulatory requirements of a foreign jurisdiction shall be exempt from United States swaps requirements.
Rule in accordance with APA required— No guidance, memorandum of understanding, or any such other agreement may satisfy the requirement to issue a joint rule from the Commissions in accordance with section 553 of title 5, United States Code.
General application to countries or administrative regions having nine largest markets—
General application— In issuing rules under this section, the Commissions shall provide that a non-U.S. person in compliance with the swaps regulatory requirements of a country or administrative region that has one of the nine largest combined swap and security-based swap markets by notional amount in the calendar year preceding issuance of such rules, or other foreign jurisdiction as jointly determined by the Commissions, shall be exempt from United States swaps requirements in accordance with the schedule set forth in paragraph (2), unless the Commissions jointly determine that the regulatory requirements of such country or administrative region or other foreign jurisdiction are not broadly equivalent to United States swaps requirements.
Effective date schedule— The exemption described in paragraph (1) and set forth under the rules required by this section shall apply to persons or transactions relating to or involving—
countries or administrative regions described in such paragraph, or any other foreign jurisdiction as jointly determined by the Commissions, accounting for the five largest combined swap and security-based swap markets by notional amount in the calendar year preceding issuance of such rules, on the date on which final rules are issued under this section; and
the remaining countries or administrative regions described in such paragraph, and any other foreign jurisdiction as jointly determined by the Commissions, 1 year after the date on which such rules are issued.
Criteria— In such rules, the Commissions shall jointly establish criteria for determining that one or more categories of regulatory requirements of a country or administrative region described in paragraph (1) or other foreign jurisdiction is not broadly equivalent to United States swaps requirements and shall jointly determine the appropriate application of certain United States swap requirements to persons or transactions relating to or involving such country or administrative region or other foreign jurisdiction. Such criteria shall include the scope and objectives of the regulatory requirements of a country or administrative region described in paragraph (1) or other foreign jurisdiction as well as the effectiveness of the supervisory compliance program administered, and the enforcement authority exercised, by such country or administrative region or other foreign jurisdiction, and such other factors as the Commissions, by rule, jointly determine to be necessary or appropriate in the public interest.
Required assessment— Beginning on the date on which final rules are issued under this section, the Commissions shall begin to jointly assess the regulatory requirements of countries or administrative regions described in paragraph (1), as the Commissions jointly determine appropriate, in accordance with the criteria established pursuant to this subsection, to determine if one or more categories of regulatory requirements of such a country or administrative region or other foreign jurisdiction is not broadly equivalent to United States swaps requirements.
Report to Congress— If the Commissions make the joint determination described in subsection (d)(1) that the regulatory requirements of a country or administrative region described in such subsection or other foreign jurisdiction are not broadly equivalent to United States swaps requirements, the Commissions shall articulate the basis for such a determination in a written report transmitted to the Committee on Financial Services and the Committee on Agriculture of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs and the Committee on Agriculture, Nutrition, and Forestry of the Senate within 30 days of the determination. The determination shall not be effective until the transmission of such report.
Definitions— As used in this Act and for purposes of the rules issued pursuant to this Act, the following definitions apply:
The term U.S. person—
means—
any natural person resident in the United States;
any partnership, corporation, trust, or other legal person organized or incorporated under the laws of the United States or having its principal place of business in the United States;
any account (whether discretionary or non-discretionary) of a U.S. person; and
any other person as the Commissions may further jointly define to more effectively carry out the purposes of this Act; and
does not include the International Monetary Fund, the International Bank for Reconstruction and Development, the Inter-American Development Bank, the Asian Development Bank, the African Development Bank, the United Nations, their agencies and pension plans, and any other similar international organizations and their agencies and pension plans.
The term United States swaps requirements means the provisions relating to swaps and security-based swaps contained in the Commodity Exchange Act (7 U.S.C. 1a et seq.) and the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) that were added by title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (15 U.S.C. 8301 et seq.) and any rules or regulations prescribed by the Securities and Exchange Commission and the Commodity Futures Trading Commission pursuant to such provisions.
Conforming amendments—
Securities Exchange Act of 1934— Section 36(c) of the Securities Exchange Act of 1934 (15 U.S.C. 78mm(c)) is amended by inserting “or except as necessary to effectuate the purposes of the Customer Protection and End-User Relief Act,” after “to grant exemptions,”.
Commodity Exchange Act— Section 4(c)(1)(A) of the Commodity Exchange Act (7 U.S.C. 6(c)(1)(A)) is amended by inserting “or except as necessary to effectuate the purposes of the Customer Protection and End-User Relief Act,” after “to grant exemptions,”.
Sec. 360 Report on foreign boards of trade
Within 1 year after the date of the enactment of this Act, the Commodity Futures Trading Commission shall prepare and submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a written report reviewing the standards and rules of foreign boards of trade related to the physical delivery of base metals, including warehousing facilities, as compared to the standards and rules for domestic designated contract markets and related warehouses for base metals.
Sec. 361 Treatment of certain funds
Amendment to the definition of commodity pool operator— Section 1a(11) of the Commodity Exchange Act (7 U.S.C. 1a(11)) is amended by adding at the end the following:
“(C)
“(i) The term “commodity pool operator” does not include a person who serves as an investment adviser to an investment company registered pursuant to section 8 of the Investment Company Act of 1940 or a subsidiary of such a company, if the investment company or subsidiary invests, reinvests, owns, holds, or trades in commodity interests limited to only financial commodity interests.
“(ii) For purposes of this subparagraph only, the term “financial commodity interest” means a futures contract, an option on a futures contract, or a swap, involving a commodity that is not an exempt commodity or an agricultural commodity, including any index of financial commodity interests, whether cash settled or involving physical delivery.
“(iii) For purposes of this subparagraph only, the term “commodity” does not include a security issued by a real estate investment trust, business development company, or issuer of asset-backed securities, including any index of such securities.”
Amendment to the definition of commodity trading advisor— Section 1a(12) of such Act (7 U.S.C. 1a(12)) is amended by adding at the end the following:
“(E) The term “commodity trading advisor” does not include a person who serves as an investment adviser to an investment company registered pursuant to section 8 of the Investment Company Act of 1940 or a subsidiary of such a company, if the commodity trading advice relates only to a financial commodity interest, as defined in paragraph (11)(C)(ii) of this section. For purposes of this subparagraph only, the term “commodity” does not include a security issued by a real estate investment trust, business development company, or issuer of asset-backed securities, including any index of such securities.”
F Effective date
Sec. 371 Effective date
Except as otherwise provided in this title, the amendments made by this title shall take effect as if enacted on July 21, 2010.