---
kind: "section"
citation: "15 U.S.C. § 78c–3"
title: "15"
title_heading: "Commerce and Trade"
number: "78c–3"
heading: "Clearing for security-based swaps"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/15/78c-3"
units:
  - "Chapter 2B — Securities Exchanges"
---

# §78c–3. Clearing for security-based swaps

- (a) **In general—**
  - (1) **Standard for clearing—** It shall be unlawful for any [person](/usc/15/78c.md?p=a-9) to engage in a [security-based swap](/usc/15/78c.md?p=a-68-A) unless that [person](/usc/15/78c.md?p=a-9) submits such [security-based swap](/usc/15/78c.md?p=a-68-A) for clearing to a [clearing agency](/usc/15/78c.md?p=a-23-A) that is registered under this chapter or a [clearing agency](/usc/15/78c.md?p=a-23-A) that is exempt from registration under this chapter if the [security-based swap](/usc/15/78c.md?p=a-68-A) is required to be cleared.
  - (2) **Open access—** The [rules of a clearing agency](/usc/15/78c.md?p=a-27) described in [paragraph (1)](#a-1) shall—
    - (A) prescribe that all [security-based swaps](/usc/15/78c.md?p=a-68-A) submitted to the [clearing agency](/usc/15/78c.md?p=a-23-A) with the same terms and conditions are economically equivalent within the [clearing agency](/usc/15/78c.md?p=a-23-A) and may be offset with each other within the [clearing agency](/usc/15/78c.md?p=a-23-A); and
    - (B) provide for non-discriminatory clearing of a [security-based swap](/usc/15/78c.md?p=a-68-A) executed bilaterally or on or through the rules of an unaffiliated national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) or [security-based swap execution facility](/usc/15/78c.md?p=a-77).
- (b) **Commission review—**
  - (1) **Commission-initiated review—**
    - (A) The [Commission](/usc/15/78c.md?p=a-15) on an ongoing basis shall review each [security-based swap](/usc/15/78c.md?p=a-68-A), or any group, category, type, or class of [security-based swaps](/usc/15/78c.md?p=a-68-A) to make a determination that such [security-based swap](/usc/15/78c.md?p=a-68-A), or group, category, type, or class of [security-based swaps](/usc/15/78c.md?p=a-68-A) should be required to be cleared.
    - (B) The [Commission](/usc/15/78c.md?p=a-15) shall provide at least a 30-day public comment period regarding any determination under [subparagraph (A)](#b-1-A).
  - (2) **Swap submissions—**
    - (A) A [clearing agency](/usc/15/78c.md?p=a-23-A) shall submit to the [Commission](/usc/15/78c.md?p=a-15) each [security-based swap](/usc/15/78c.md?p=a-68-A), or any group, category, type, or class of [security-based swaps](/usc/15/78c.md?p=a-68-A) that it plans to accept for clearing and provide notice to its [members](/usc/15/78c.md?p=a-3-A) (in a manner to be determined by the [Commission](/usc/15/78c.md?p=a-15)) of such submission.
    - (B) Any [security-based swap](/usc/15/78c.md?p=a-68-A) or group, category, type, or class of [security-based swaps](/usc/15/78c.md?p=a-68-A) listed for clearing by a [clearing agency](/usc/15/78c.md?p=a-23-A) as of July 21, 2010, shall be considered submitted to the [Commission](/usc/15/78c.md?p=a-15).
    - (C) The [Commission](/usc/15/78c.md?p=a-15) shall—
      - (i) make available to the public any submission received under subparagraphs [(A)](#b-2-A) and [(B)](#b-2-B);
      - (ii) review each submission made under subparagraphs [(A)](#b-2-A) and [(B)](#b-2-B), and determine whether the [security-based swap](/usc/15/78c.md?p=a-68-A), or group, category, type, or class of [security-based swaps](/usc/15/78c.md?p=a-68-A), described in the submission is required to be cleared; and
      - (iii) provide at least a 30-day public comment period regarding its determination whether the clearing requirement under [subsection (a)(1)](#a-1) shall apply to the submission.
  - (3) **Deadline—** The [Commission](/usc/15/78c.md?p=a-15) shall make its determination under [paragraph (2)(C)](#b-2-C) not later than 90 days after receiving a submission made under paragraphs [(2)(A)](#b-2-A) and [(2)(B)](#b-2-B), unless the submitting [clearing agency](/usc/15/78c.md?p=a-23-A) agrees to an extension for the time limitation established under this paragraph.
  - (4) **Determination—**
    - (A) In reviewing a submission made under [paragraph (2)](#b-2), the [Commission](/usc/15/78c.md?p=a-15) shall review whether the submission is consistent with [section 78q–1 of this title](/usc/15/78q–1.md).
    - (B) In reviewing a [security-based swap](/usc/15/78c.md?p=a-68-A), group of [security-based swaps](/usc/15/78c.md?p=a-68-A) or class of [security-based swaps](/usc/15/78c.md?p=a-68-A) pursuant to [paragraph (1)](#b-1) or a submission made under [paragraph (2)](#b-2), the [Commission](/usc/15/78c.md?p=a-15) shall take into account the following factors:
      - (i) The existence of significant outstanding notional exposures, trading liquidity and adequate pricing data.
      - (ii) The availability of rule framework, capacity, operational expertise and resources, and credit support infrastructure to clear the contract on terms that are consistent with the material terms and trading conventions on which the contract is then traded.
      - (iii) The effect on the mitigation of systemic risk, taking into account the size of the market for such contract and the resources of the [clearing agency](/usc/15/78c.md?p=a-23-A) available to clear the contract.
      - (iv) The effect on competition, including appropriate fees and charges applied to clearing.
      - (v) The existence of reasonable legal certainty in the event of the insolvency of the relevant [clearing agency](/usc/15/78c.md?p=a-23-A) or 1 or more of its clearing [members](/usc/15/78c.md?p=a-3-A) with regard to the treatment of customer and [security-based swap](/usc/15/78c.md?p=a-68-A) counterparty positions, funds, and property.
    - (C) In making a determination under [subsection (b)(1)](#b-1) or [paragraph (2)(C)](#b-2-C) that the clearing requirement shall apply, the [Commission](/usc/15/78c.md?p=a-15) may require such terms and conditions to the requirement as the [Commission](/usc/15/78c.md?p=a-15) determines to be appropriate.
  - (5) **Rules—** Not later than 1 year after July 21, 2010, the [Commission](/usc/15/78c.md?p=a-15) shall adopt rules for a [clearing agency](/usc/15/78c.md?p=a-23-A)’s submission for review, pursuant to this subsection, of a [security-based swap](/usc/15/78c.md?p=a-68-A), or a group, category, type, or class of [security-based swaps](/usc/15/78c.md?p=a-68-A), that it seeks to accept for clearing. Nothing in this paragraph limits the [Commission](/usc/15/78c.md?p=a-15) from making a determination under [paragraph (2)(C)](#b-2-C) for [security-based swaps](/usc/15/78c.md?p=a-68-A) described in [paragraph (2)(B)](#b-2-B).
- (c) **Stay of clearing requirement—**
  - (1) **In general—** After making a determination pursuant to [subsection (b)(2)](#b-2), the [Commission](/usc/15/78c.md?p=a-15), on application of a counterparty to a [security-based swap](/usc/15/78c.md?p=a-68-A) or on its own initiative, may stay the clearing requirement of [subsection (a)(1)](#a-1) until the [Commission](/usc/15/78c.md?p=a-15) completes a review of the terms of the [security-based swap](/usc/15/78c.md?p=a-68-A) (or the group, category, type, or class of [security-based swaps](/usc/15/78c.md?p=a-68-A)) and the clearing arrangement.
  - (2) **Deadline—** The [Commission](/usc/15/78c.md?p=a-15) shall complete a review undertaken pursuant to [paragraph (1)](#c-1) not later than 90 days after issuance of the stay, unless the [clearing agency](/usc/15/78c.md?p=a-23-A) that clears the [security-based swap](/usc/15/78c.md?p=a-68-A), or group, category, type, or class of [security-based swaps](/usc/15/78c.md?p=a-68-A), agrees to an extension of the time limitation established under this paragraph.
  - (3) **Determination—** Upon completion of the review undertaken pursuant to [paragraph (1)](#c-1), the [Commission](/usc/15/78c.md?p=a-15) may—
    - (A) determine, unconditionally or subject to such terms and conditions as the [Commission](/usc/15/78c.md?p=a-15) determines to be appropriate, that the [security-based swap](/usc/15/78c.md?p=a-68-A), or group, category, type, or class of [security-based swaps](/usc/15/78c.md?p=a-68-A), must be cleared pursuant to this subsection if it finds that such clearing is consistent with [subsection (b)(4)](#b-4); or
    - (B) determine that the clearing requirement of [subsection (a)(1)](#a-1) shall not apply to the [security-based swap](/usc/15/78c.md?p=a-68-A), or group, category, type, or class of [security-based swaps](/usc/15/78c.md?p=a-68-A).
  - (4) **Rules—** Not later than 1 year after July 21, 2010, the [Commission](/usc/15/78c.md?p=a-15) shall adopt rules for reviewing, pursuant to this subsection, a [clearing agency](/usc/15/78c.md?p=a-23-A)’s clearing of a [security-based swap](/usc/15/78c.md?p=a-68-A), or a group, category, type, or class of [security-based swaps](/usc/15/78c.md?p=a-68-A), that it has accepted for clearing.
- (d) **Prevention of evasion—**
  - (1) **In general—** The [Commission](/usc/15/78c.md?p=a-15) shall prescribe rules under this section (and issue interpretations of rules prescribed under this section), as determined by the [Commission](/usc/15/78c.md?p=a-15) to be necessary to prevent evasions of the mandatory clearing requirements under this chapter.
  - (2) **Duty of Commission to investigate and take certain actions—** To the extent the [Commission](/usc/15/78c.md?p=a-15) finds that a particular [security-based swap](/usc/15/78c.md?p=a-68-A) or any group, category, type, or class of [security-based swaps](/usc/15/78c.md?p=a-68-A) that would otherwise be subject to mandatory clearing but no [clearing agency](/usc/15/78c.md?p=a-23-A) has listed the [security-based swap](/usc/15/78c.md?p=a-68-A) or the group, category, type, or class of [security-based swaps](/usc/15/78c.md?p=a-68-A) for clearing, the [Commission](/usc/15/78c.md?p=a-15) shall—
    - (A) investigate the relevant facts and circumstances;
    - (B) within 30 days issue a public report containing the results of the investigation; and
    - (C) take such actions as the [Commission](/usc/15/78c.md?p=a-15) determines to be necessary and in the public interest, which may include requiring the retaining of adequate [margin](/usc/15/78c.md?p=a-57-A) or capital by parties to the [security-based swap](/usc/15/78c.md?p=a-68-A) or the group, category, type, or class of [security-based swaps](/usc/15/78c.md?p=a-68-A).
  - (3) **Effect on authority—** Nothing in this subsection—
    - (A) authorizes the [Commission](/usc/15/78c.md?p=a-15) to adopt rules requiring a [clearing agency](/usc/15/78c.md?p=a-23-A) to list for clearing a [security-based swap](/usc/15/78c.md?p=a-68-A) or any group, category, type, or class of [security-based swaps](/usc/15/78c.md?p=a-68-A) if the clearing of the [security-based swap](/usc/15/78c.md?p=a-68-A) or the group, category, type, or class of [security-based swaps](/usc/15/78c.md?p=a-68-A) would threaten the financial integrity of the [clearing agency](/usc/15/78c.md?p=a-23-A); and
    - (B) affects the authority of the [Commission](/usc/15/78c.md?p=a-15) to enforce the open access provisions of [subsection (a)(2)](#a-2) with respect to a [security-based swap](/usc/15/78c.md?p=a-68-A) or the group, category, type, or class of [security-based swaps](/usc/15/78c.md?p=a-68-A) that is listed for clearing by a [clearing agency](/usc/15/78c.md?p=a-23-A).
- (e) **Reporting transition rules—** Rules adopted by the [Commission](/usc/15/78c.md?p=a-15) under this section shall provide for the reporting of data, as follows:
  - (1) [Security-based swaps](/usc/15/78c.md?p=a-68-A) entered into before July 21, 2010, shall be reported to a registered [security-based swap data repository](/usc/15/78c.md?p=a-75) or the [Commission](/usc/15/78c.md?p=a-15) no later than 180 days after the effective date of this section.
  - (2) [Security-based swaps](/usc/15/78c.md?p=a-68-A) entered into on or after July 21, 2010, shall be reported to a registered [security-based swap data repository](/usc/15/78c.md?p=a-75) or the [Commission](/usc/15/78c.md?p=a-15) no later than the later of—
    - (A) 90 days after such effective date; or
    - (B) such other time after entering into the [security-based swap](/usc/15/78c.md?p=a-68-A) as the [Commission](/usc/15/78c.md?p=a-15) may prescribe by rule or regulation.
- (f) **Clearing transition rules—**
  - (1) [Security-based swaps](/usc/15/78c.md?p=a-68-A) entered into before July 21, 2010, are exempt from the clearing requirements of this subsection if reported pursuant to [subsection (e)(1)](#e-1).
  - (2) [Security-based swaps](/usc/15/78c.md?p=a-68-A) entered into before application of the clearing requirement pursuant to this section are exempt from the clearing requirements of this section if reported pursuant to [subsection (e)(2)](#e-2).
- (g) **Exceptions—**
  - (1) **In general—** The requirements of [subsection (a)(1)](#a-1) shall not apply to a [security-based swap](/usc/15/78c.md?p=a-68-A) if 1 of the counterparties to the [security-based swap](/usc/15/78c.md?p=a-68-A)—
    - (A) is not a financial entity;
    - (B) is using [security-based swaps](/usc/15/78c.md?p=a-68-A) to hedge or mitigate commercial risk; and
    - (C) notifies the [Commission](/usc/15/78c.md?p=a-15), in a manner set forth by the [Commission](/usc/15/78c.md?p=a-15), how it generally meets its financial obligations associated with entering into non-cleared [security-based swaps](/usc/15/78c.md?p=a-68-A).
  - (2) **Option to clear—** The application of the clearing exception in [paragraph (1)](#g-1) is solely at the discretion of the counterparty to the [security-based swap](/usc/15/78c.md?p=a-68-A) that meets the conditions of subparagraphs [(A)](#g-1-A) through [(C)](#g-1-C) of paragraph (1).
  - (3) **Financial entity definition—**
    - (A) **In general—** For the purposes of this subsection, the term “financial entity” means—
      - (i) a [swap dealer](/usc/15/78c.md?p=a-76);
      - (ii) a [security-based swap dealer](/usc/15/78c.md?p=a-71-A);
      - (iii) a [major swap participant](/usc/15/78c.md?p=a-66);
      - (iv) a [major security-based swap participant](/usc/15/78c.md?p=a-67-A);
      - (v) a commodity pool as defined in [section 1a(10) of title 7](/usc/7/1a.md?p=10);
      - (vi) a private fund as defined in [section 80b–2(a) of this title](/usc/15/80b–2.md?p=a);
      - (vii) an employee benefit plan as defined in paragraphs (3) and (32) of [section 1002 of title 29](/usc/29/1002.md);
      - (viii) a [person](/usc/15/78c.md?p=a-9) predominantly engaged in activities that are in the business of banking or financial in nature, as defined in [section 1843(k) of title 12](/usc/12/1843.md?p=k).
    - (B) **Exclusion—** The [Commission](/usc/15/78c.md?p=a-15) shall consider whether to exempt small [banks](/usc/15/78c.md?p=a-6), savings associations, farm credit system institutions, and credit unions, including—
      - (i) depository institutions with total assets of $10,000,000,000 or less;
      - (ii) farm credit system institutions with total assets of $10,000,000,000 or less; or
      - (iii) credit unions with total assets of $10,000,000,000 or less.
  - (4) **Treatment of affiliates—**
    - (A) **In general—** An affiliate of a [person](/usc/15/78c.md?p=a-9) that qualifies for an exception under this subsection (including affiliate entities predominantly engaged in providing financing for the [purchase](/usc/15/78c.md?p=a-13) of the merchandise or manufactured goods of the [person](/usc/15/78c.md?p=a-9)) may qualify for the exception only if the affiliate—
      - (i) enters into the [security-based swap](/usc/15/78c.md?p=a-68-A) to hedge or mitigate the commercial risk of the [person](/usc/15/78c.md?p=a-9) or other affiliate of the [person](/usc/15/78c.md?p=a-9) that is not a financial entity, and the commercial risk that the affiliate is hedging or mitigating has been transferred to the affiliate;
      - (ii) is directly and wholly-owned by another affiliate qualified for the exception under this paragraph or an entity that is not a financial entity;
      - (iii) is not indirectly majority-owned by a financial entity;
      - (iv) is not ultimately owned by a parent [company](/usc/15/78c.md?p=a-19) that is a financial entity; and
      - (v) does not provide any services, financial or otherwise, to any affiliate that is a nonbank financial [company](/usc/15/78c.md?p=a-19) supervised by the [Board](/usc/15/78c.md?p=a-73) of Governors (as defined under [section 5311 of title 12](/usc/12/5311.md)).
    - (B) **Limitation on qualifying affiliates—** The exception in [subparagraph (A)](#g-4-A) shall not apply if the affiliate is—
      - (i) a [swap dealer](/usc/15/78c.md?p=a-76);
      - (ii) a [security-based swap dealer](/usc/15/78c.md?p=a-71-A);
      - (iii) a [major swap participant](/usc/15/78c.md?p=a-66);
      - (iv) a [major security-based swap participant](/usc/15/78c.md?p=a-67-A);
      - (v) a commodity pool;
      - (vi) a [bank](/usc/15/78c.md?p=a-6) holding [company](/usc/15/78c.md?p=a-19);
      - (vii) a private fund, as defined in [section 80b–2(a) of this title](/usc/15/80b–2.md?p=a);
      - (viii) an employee benefit plan or government[^1] plan, as defined in paragraphs (3) and (32) of [section 1002 of title 29](/usc/29/1002.md);
      - (ix) an [insured depository institution](/usc/15/78c.md?p=a-53-B-iii);
      - (x) a farm credit system institution;
      - (xi) a credit union;
      - (xii) a nonbank financial [company](/usc/15/78c.md?p=a-19) supervised by the [Board](/usc/15/78c.md?p=a-73) of Governors (as defined under [section 5311 of title 12](/usc/12/5311.md)); or
      - (xiii) an entity engaged in the business of insurance and subject to capital requirements established by an insurance governmental authority of a [State](/usc/15/78c.md?p=a-16), a territory of the United States, the District of Columbia, a country other than the United States, or a political subdivision of a country other than the United States that is engaged in the supervision of [insurance companies](/usc/15/78c.md?p=a-19) under insurance law.
    - (C) **Limitation on affiliates’ affiliates—** Unless the [Commission](/usc/15/78c.md?p=a-15) determines, by order, rule, or regulation, that it is in the public interest, the exception in [subparagraph (A)](#g-4-A) shall not apply with respect to an affiliate if such affiliate is itself affiliated with—
      - (i) a [major security-based swap participant](/usc/15/78c.md?p=a-67-A);
      - (ii) a [security-based swap dealer](/usc/15/78c.md?p=a-71-A);
      - (iii) a [major swap participant](/usc/15/78c.md?p=a-66); or
      - (iv) a [swap dealer](/usc/15/78c.md?p=a-76).
    - (D) **Conditions on transactions—** With respect to an affiliate that qualifies for the exception in [subparagraph (A)](#g-4-A)—
      - (i) such affiliate may not enter into any [security-based swap](/usc/15/78c.md?p=a-68-A) other than for the purpose of hedging or mitigating commercial risk; and
      - (ii) neither such affiliate nor any [person](/usc/15/78c.md?p=a-9) affiliated with such affiliate that is not a financial entity may enter into a [security-based swap](/usc/15/78c.md?p=a-68-A) with or on behalf of any affiliate that is a financial entity or otherwise assume, net, combine, or consolidate the risk of [security-based swaps](/usc/15/78c.md?p=a-68-A) entered into by any such financial entity, except one that is an affiliate that qualifies for the exception under [subparagraph (A)](#g-4-A).
    - (E) **Transition rule for affiliates—** An affiliate, subsidiary, or a wholly owned entity of a [person](/usc/15/78c.md?p=a-9) that qualifies for an exception under [subparagraph (A)](#g-4-A) and is predominantly engaged in providing financing for the [purchase](/usc/15/78c.md?p=a-13) or lease of merchandise or manufactured goods of the [person](/usc/15/78c.md?p=a-9) shall be exempt from the [margin](/usc/15/78c.md?p=a-57-A) requirement described in [section 78o–10(e)](/usc/15/78o–10.md?p=e) of this title and the clearing requirement described in [subsection (a)](#a) with regard to [security-based swaps](/usc/15/78c.md?p=a-68-A) entered into to mitigate the risk of the financing activities for not less than a 2-year period beginning on July 21, 2010.
    - (F) **Risk management program—** Any [security-based swap](/usc/15/78c.md?p=a-68-A) entered into by an affiliate that qualifies for the exception in [subparagraph (A)](#g-4-A) shall be subject to a centralized risk management program of the affiliate, which is reasonably designed both to monitor and manage the risks associated with the [security-based swap](/usc/15/78c.md?p=a-68-A) and to identify each of the affiliates on whose behalf a [security-based swap](/usc/15/78c.md?p=a-68-A) was entered into.
  - (5) **Election of counterparty—**
    - (A) **Security-based swaps required to be cleared—** With respect to any [security-based swap](/usc/15/78c.md?p=a-68-A) that is subject to the mandatory clearing requirement under [subsection (a)](#a) and entered into by a [security-based swap dealer](/usc/15/78c.md?p=a-71-A) or a [major security-based swap participant](/usc/15/78c.md?p=a-67-A) with a counterparty that is not a [swap dealer](/usc/15/78c.md?p=a-76), [major swap participant](/usc/15/78c.md?p=a-66), [security-based swap dealer](/usc/15/78c.md?p=a-71-A), or [major security-based swap participant](/usc/15/78c.md?p=a-67-A), the counterparty shall have the sole right to select the [clearing agency](/usc/15/78c.md?p=a-23-A) at which the [security-based swap](/usc/15/78c.md?p=a-68-A) will be cleared.
    - (B) **Security-based swaps not required to be cleared—** With respect to any [security-based swap](/usc/15/78c.md?p=a-68-A) that is not subject to the mandatory clearing requirement under [subsection (a)](#a) and entered into by a [security-based swap dealer](/usc/15/78c.md?p=a-71-A) or a [major security-based swap participant](/usc/15/78c.md?p=a-67-A) with a counterparty that is not a [swap dealer](/usc/15/78c.md?p=a-76), [major swap participant](/usc/15/78c.md?p=a-66), [security-based swap dealer](/usc/15/78c.md?p=a-71-A), or [major security-based swap participant](/usc/15/78c.md?p=a-67-A), the counterparty—
      - (i) may elect to require clearing of the [security-based swap](/usc/15/78c.md?p=a-68-A); and
      - (ii) shall have the sole right to select the [clearing agency](/usc/15/78c.md?p=a-23-A) at which the [security-based swap](/usc/15/78c.md?p=a-68-A) will be cleared.
  - (6) **Abuse of exception—** The [Commission](/usc/15/78c.md?p=a-15) may prescribe such rules or issue interpretations of the rules as the [Commission](/usc/15/78c.md?p=a-15) determines to be necessary to prevent abuse of the exceptions described in this subsection. The [Commission](/usc/15/78c.md?p=a-15) may also request information from those [persons](/usc/15/78c.md?p=a-9) claiming the clearing exception as necessary to prevent abuse of the exceptions described in this subsection.
- (h) **Trade execution—**
  - (1) **In general—** With respect to transactions involving [security-based swaps](/usc/15/78c.md?p=a-68-A) subject to the clearing requirement of [subsection (a)(1)](#a-1), counterparties shall—
    - (A) execute the transaction on an [exchange](/usc/15/78c.md?p=a-1); or
    - (B) execute the transaction on a [security-based swap execution facility](/usc/15/78c.md?p=a-77) registered under [section 78c–4 of this title](/usc/15/78c–4.md) or a [security-based swap execution facility](/usc/15/78c.md?p=a-77) that is exempt from registration under [section 78c–4(e) of this title](/usc/15/78c–4.md?p=e).
  - (2) **Exception—** The requirements of subparagraphs [(A)](#h-1-A) and [(B)](#h-1-B) of paragraph (1) shall not apply if no [exchange](/usc/15/78c.md?p=a-1) or [security-based swap execution facility](/usc/15/78c.md?p=a-77) makes the [security-based swap](/usc/15/78c.md?p=a-68-A) available to trade or for [security-based swap](/usc/15/78c.md?p=a-68-A) transactions subject to the clearing exception under [subsection (g)](#g).
- (i) **Board approval—** Exemptions from the requirements of this section to clear a [security-based swap](/usc/15/78c.md?p=a-68-A) or execute a [security-based swap](/usc/15/78c.md?p=a-68-A) through a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) or [security-based swap execution facility](/usc/15/78c.md?p=a-77) shall be available to a counterparty that is an [issuer](/usc/15/78c.md?p=a-8) of [securities](/usc/15/78c.md?p=a-10) that are registered under [section 78l](/usc/15/78l.md) of this title or that is required to file reports pursuant to [section 78o(d)](/usc/15/78o.md?p=d) of this title, only if an appropriate committee of the [issuer](/usc/15/78c.md?p=a-8)’s [board](/usc/15/78c.md?p=a-73) or governing body has reviewed and approved the [issuer](/usc/15/78c.md?p=a-8)’s decision to enter into [security-based swaps](/usc/15/78c.md?p=a-68-A) that are subject to such exemptions.
- (j) **Designation of chief compliance officer—**
  - (1) **In general—** Each registered [clearing agency](/usc/15/78c.md?p=a-23-A) shall designate an individual to serve as a chief compliance officer.
  - (2) **Duties—** The chief compliance officer shall—
    - (A) report directly to the [board](/usc/15/78c.md?p=a-73) or to the senior officer of the [clearing agency](/usc/15/78c.md?p=a-23-A);
    - (B) in consultation with its [board](/usc/15/78c.md?p=a-73), a body performing a function similar thereto, or the senior officer of the registered [clearing agency](/usc/15/78c.md?p=a-23-A), resolve any conflicts of interest that may arise;
    - (C) be responsible for administering each policy and procedure that is required to be established pursuant to this section;
    - (D) ensure compliance with this chapter (including regulations issued under this chapter) relating to [agreements](/usc/15/7a.md?p=2), contracts, or transactions, including each rule prescribed by the [Commission](/usc/15/78c.md?p=a-15) under this section;
    - (E) establish procedures for the remediation of noncompliance issues identified by the compliance officer through any—
      - (i) compliance office review;
      - (ii) look-back;
      - (iii) internal or external audit finding;
      - (iv) self-reported error; or
      - (v) validated complaint; and
    - (F) establish and follow appropriate procedures for the handling, management response, remediation, retesting, and closing of noncompliance issues.
  - (3) **Annual reports—**
    - (A) **In general—** In accordance with rules prescribed by the [Commission](/usc/15/78c.md?p=a-15), the chief compliance officer shall annually prepare and sign a report that contains a description of—
      - (i) the compliance of the registered [clearing agency](/usc/15/78c.md?p=a-23-A) or [security-based swap execution facility](/usc/15/78c.md?p=a-77) of the compliance officer with respect to this chapter (including regulations under this chapter); and
      - (ii) each policy and procedure of the registered [clearing agency](/usc/15/78c.md?p=a-23-A) of the compliance officer (including the code of ethics and conflict of interest policies of the registered [clearing agency](/usc/15/78c.md?p=a-23-A)).
    - (B) **Requirements—** A compliance report under [subparagraph (A)](#j-3-A) shall—
      - (i) accompany each appropriate financial report of the registered [clearing agency](/usc/15/78c.md?p=a-23-A) that is required to be furnished to the [Commission](/usc/15/78c.md?p=a-15) pursuant to this section; and
      - (ii) include a certification that, under penalty of law, the compliance report is accurate and complete.

## Footnotes

[^1]: So in original. Probably should be “governmental”.

## Source credit

(June 6, 1934, ch. 404, title I, § 3C, as added Pub. L. 111–203, title VII, § 763(a), July 21, 2010, 124 Stat. 1762; amended Pub. L. 114–113, div. O, title VII, § 705(b), Dec. 18, 2015, 129 Stat. 3027.)

## Notes

### Editorial Notes

### References in Text

This chapter, referred to in subsecs. (a)(1) and (d)(1), was in the original “this Act”, and this chapter, referred to in subsec. (j)(2)(D), (3)(A)(i), was in the original “this title”. See References in Text note set out under section 78a of this title.

For the effective date of this section, referred to in subsec. (e), see section 774 of Pub. L. 111–203, set out as an Effective Date of 2010 Amendment note under section 77b of this title.

Subsection (c) of that section, referred to in subsec. (g)(4)(B)(v), was in the original “subsection (c) of that Act”, and was translated as meaning subsec. (c) of section 3 of act Aug. 22, 1940, ch. 686, to reflect the probable intent of Congress.

### Amendments

2015—Subsec. (g)(4). Pub. L. 114–113 added subpars. (A) to (D) and (F), redesignated former subpar. (C) as (E), and struck out former subpars. (A) and (B) which related to application of exception to affiliates and prohibition relating to certain affiliates, respectively.

### Statutory Notes and Related Subsidiaries

### Effective Date

Section effective on the later of 360 days after July 21, 2010, or, to the extent a provision of subtitle B (§§ 761–774) of title VII of Pub. L. 111–203 requires a rulemaking, not less than 60 days after publication of the final rule or regulation implementing such provision of subtitle B, see section 774 of Pub. L. 111–203, set out as an Effective Date of 2010 Amendment note under section 77b of this title.