Sec. 872. Treatment of transactions between affiliates
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Section 1a(47) of the Commodity Exchange Act ( 7 U.S.C. 1a(47) ) is amended by adding at the end the following: Except as provided under clause (ii), the Commission may not regulate a swap under this Act if all of the following apply to such swap: One counterparty, directly or indirectly, holds a majority ownership interest in the other counterparty, or a third party, directly or indirectly, holds a majority ownership interest in both counterparties. The affiliated counterparty that holds the majority interest in the other counterparty or the third party that, directly or indirectly, holds the majority interests in both affiliated counterparties, reports its financial statements on a consolidated basis under generally accepted accounting principles or International Financial Reporting Standards, or other similar standards, and the financial statements include the financial results of the majority-owned affiliated counterparty or counterparties.
With respect to a swap described under clause (i): If at least one counterparty is a swap dealer or major swap participant, that counterparty shall report the swap pursuant to section 4r, within such time period as the Commission may by rule or regulation prescribe— to a swap data repository; or if there is no swap data repository that would accept the agreement, contract or transaction, to the Commission. If at least one counterparty is a swap dealer or major swap participant, the swap shall be subject to a centralized risk management program pursuant to section 4s(j) that is reasonably designed to monitor and to manage the risks associated with the swap.
The swap shall not be structured to evade the Dodd-Frank Wall Street Reform and Consumer Protection Act in violation of any rule promulgated by the Commission pursuant to section 721(c) of such Act. . Section 3(a)(68) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78c(a)(68) ) is amended by inserting before subsection
(b)the following: Except as provided under clause (ii), the Commission may not regulate a security-based swap under this Act if all of the following apply to such security-based swap: One counterparty, directly or indirectly, holds a majority ownership interest in the other counterparty, or a third party, directly or indirectly, holds a majority ownership interest in both counterparties. The affiliated counterparty that holds the majority interest in the other counterparty or the third party that, directly or indirectly, holds the majority interests in both affiliated counterparties, reports its financial statements on a consolidated basis under generally accepted accounting principles or International Financial Reporting Standards, or other similar standards, and the financial statements include the financial results of the majority-owned affiliated counterparty or counterparties. With respect to a security-based swap described under clause (i): If at least one counterparty is a security-based swap dealer or major security-based swap participant, that counterparty shall report the security-based swap pursuant to section 13A, within such time period as the Commission may by rule or regulation prescribe— to a security-based swap data repository; or if there is no security-based swap data repository that would accept the agreement, contract or transaction, to the Commission. If at least one counterparty is a security-based swap dealer or major security-based swap participant, the security-based swap shall be subject to a centralized risk management program pursuant to section 15F(j) that is reasonably designed to monitor and to manage the risks associated with the security-based swap. The security-based swap shall not be structured to evade the Dodd-Frank Wall Street Reform and Consumer Protection Act in violation of any rule promulgated by the Commission pursuant to section 761(b)(3) of such Act. .
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