Section 1 Short title
This Act may be cited as the “Swap Trading Improvement Act”.
Swap Trading Improvement Act
A BILL
To improve swap execution facility administration, swap entity compliance, and for other purposes.
Sec. 2 Simplification of swap data aggregation requirements
Obligations for designated contract markets— Section 5(d)(5) of the Commodity Exchange Act (7 U.S.C. 7(d)(5)) is amended—
in subparagraph (A), by inserting “that is not a swap contract” after “for each contract of the board of trade”; and
in subparagraph (B), by inserting “that is not a swap contract” after “contract”.
Obligations for swap execution facilities— Section 5h(f)(4)(B) of such Act (7 U.S.C. 7b–3(f)(4)(B)) is amended by striking “in swaps” and inserting “activity in swaps occurring on the swap execution facility”.
Cross-Facility data aggregation relief— Section 5h(f) of such Act (7 U.S.C. 7b–3(f)) is amended by striking paragraph (6).
Sec. 3 Swap entity administrative improvements
Authority of registered entities To use third-Party service providers— Section 5c(b) of the Commodity Exchange Act (7 U.S.C. 7a–2(b)) is amended to read as follows:
“(b) Delegation of functions under core principles
“(1) In general—A registered entity may comply with any applicable core principle through delegation of any relevant function to a third-party service provider.
“(2) Responsibility—A registered entity that delegates a function under paragraph (1) shall remain responsible for carrying out the function.
“(3) Noncompliance—If a registered entity that delegates a function under paragraph (1) becomes aware that the function is not being performed as required under this Act, the registered entity shall promptly take steps to address the noncompliance.”
Registration of swap execution facilities— Section 5h(a)(1) of such Act (7 U.S.C. 7b–3(a)(1)) is amended by striking “or processing”.
Core principles for swap execution facilities—
Modification of emergency authority requirements— Section 5h(f)(8) of such Act (7 U.S.C. 7b–3(f)(8)) is amended by striking all that follows “cooperation with the Commission” and inserting “or other registered entities, as is necessary and appropriate, to facilitate the liquidation or transfer of open positions in any swap, or to suspend or curtail trading in a swap.”.
Reduction of operating capital requirement— Section 5h(f)(13)(B) of such Act (7 U.S.C. 7b–3(f)(13)(B)) is amended by striking “1-year period, as calculated on a rolling basis,” and inserting “90-day period, as calculated on a rolling basis, or conduct an orderly wind-down of its operations, whichever is greater.”.
Sec. 4 Simplification of swap execution facility chief compliance officer obligations
Section 5h(f)(15) of the Commodity Exchange Act (7 U.S.C. 7b–3(f)(15)) is amended—
in subparagraph (A), by adding at the end the following: “The individual may also perform other responsibilities for the swap execution facility.”;
in subparagraph (B)—
in clause (i), by inserting “, to a committee of the board,” after “directly to the board”;
by striking clauses (iii) through (v) and inserting the following:
“(iii) establish and administer policies and procedures that are reasonably designed to resolve any conflicts of interest that may arise;
“(iv) establish and administer policies and procedures that reasonably 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”
by redesignating clause (vi) as clause (v);
in subparagraph (C), by striking “(B)(vi)” and inserting “(B)(v)”; and
in subparagraph (D)—
in clause (i)—
by striking “In accordance with rules prescribed by the Commission, the” and inserting “The”; and
by striking “and sign”; and
in clause (ii)—
in the matter preceding subclause (I), by inserting “or senior officer” after “officer”;
by amending subclause (I) to read as follows:
“(I) submit each report described in clause (i) to the Commission; and”
in subclause (II), by inserting “materially” before “accurate”.
Sec. 5 Clarification of CFTC authority over swaps entities
Section 6b of the Commodity Exchange Act (7 U.S.C. 13a) is amended by inserting “or section 5h” after “sections 5 through 5c”.
Section 8a of such Act (7 U.S.C. 12a) is amended—
in paragraph (7)(A), by inserting “or swap contracts” after “contracts of sale”; and
in paragraph (9), by striking “futures contract” and inserting “contract of sale for future delivery or swap contract” each place it occurs.
Section 15(b) of such Act (7 U.S.C. 19(b)) is amended by striking “contract market” and inserting “registered entity”.
Sec. 6 Technical correction
Section 5h(h) of the Commodity Exchange Act (7 U.S.C. 7b–3)(h)) is amended by striking “alternative”.