text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Authorizing the Regulation of Swaps 
  Act''.
  
  SEC. 2. REPEAL OF PROHIBITION ON CERTAIN REGULATION OF SWAP AGREEMENTS.
  
      The following provisions of law are repealed:
              (1) Sections 206A, 206B, and 206C of the Gramm-Leach-Bliley 
          Act (15 U.S.C. 78c note).
              (2) Section 2A of the Securities Act of 1933 (15 U.S.C. 
          77b-1).
              (3) Section 17(d) of the Securities Act of 1933 (15 U.S.C. 
          77q(d)).
              (4) Section 3A of the Securities Exchange Act of 1934 (15 
          U.S.C. 78c-1).
              (5) Section 9(i) of the Securities Exchange Act of 1934 (15 
          U.S.C. 78i(i)).
              (6) Section 15(i) of the Securities Exchange Act of 1934 
          (15 U.S.C. 78o(i)), as added by section 303(f) of the Commodity 
          Futures Modernization Act of 2000 (Public Law 106-554; 114 
          Stat. 2763A-455).
              (7) Section 16(g) of the Securities Exchange Act of 1934 
          (15 U.S.C. 78p(g)).
              (8) Section 20(f) of the Securities Exchange Act of 1934 
          (15 U.S.C. 78t(f)).
              (9) Section 21A(g) of the Securities Exchange Act of 1934 
          (15 U.S.C. 78u-1(g)).
              (10) Sections 301(b) and 304 of the Commodity Futures 
          Modernization Act of 2000 (Public Law 106-554; 114 Stat. 2763A-
          451, 2763A-457).
              (11) Sections 403, 404, and 407 of the Legal Certainty for 
          Bank Products Act of 2000 (7 U.S.C. 27a, 27b, 27e).
              (12) Subsection (d), subsection (g), and paragraphs (1) and 
          (2) of subsection (h) of section 2 of the Commodity Exchange 
          Act (7 U.S.C. 2).
              (13) Section 5d of the Commodity Exchange Act (7 U.S.C. 7a-
          3).
  
  SEC. 3. AUTHORIZATION OF REGULATION AND OVERSIGHT REGARDING SWAP 
                AGREEMENTS.
  
      (a) Authorization of Regulation and Oversight.--Notwithstanding any 
  other provision of law, and subject to subsections (b) through (d), 
  each Federal financial regulator may--
              (1) exercise oversight over--
                      (A) any swap agreement that is entered into, 
                  purchased, or sold (or as to which the transaction, 
                  purchase, or sale is effected) by any financial 
                  institution, entity, or person (for its own account or 
                  for the account of others) that is subject to the 
                  jurisdiction of the Federal financial regulator; and
                      (B) any swap agreement that is subject to the 
                  jurisdiction of the Federal financial regulator; and
              (2) promulgate, interpret, and enforce regulations, issue 
          orders of general applicability, and impose disclosure, 
          reporting, or recordkeeping requirements, procedures, or 
          standards, relating to any swap agreement--
                      (A) that is entered into, purchased, or sold (or as 
                  to which the transaction, purchase, or sale is 
                  effected) by any financial institution, entity, or 
                  person (for its own account or for the account of 
                  others) that is subject to the jurisdiction of the 
                  Federal financial regulator; and
                      (B) that is subject to the jurisdiction of the 
                  Federal financial regulator.
      (b) Exchanges and Trading Facilities.--In carrying out subsection 
  (a)--
              (1) the Securities and Exchange Commission (and not any 
          other Federal financial regulator) shall exercise oversight and 
          carry out regulatory or oversight activity over--
                      (A) any exchange or clearing agency (as those terms 
                  are defined in section 3(a) of the Securities Exchange 
                  Act of 1934 (15 U.S.C. 78c(a)); and
                      (B) any swap agreement traded on or cleared through 
                  such exchange or clearing agency; and
              (2) the Commodity Futures Trading Commission (and not any 
          other Federal financial regulator) shall exercise oversight and 
          carry out regulatory or oversight activity over--
                      (A) any trading facility or registered entity (as 
                  those terms are defined in section 1a of the Commodity 
                  Exchange Act (7 U.S.C. 1a)); and
                      (B) any swap agreement executed on, traded on, or 
                  cleared through such trading facility or registered 
                  entity.
      (c) Rules of Construction.--Nothing in this Act may be construed 
  as--
              (1) limiting or reducing the authority of a Federal 
          financial regulator in effect on the date of enactment of this 
          Act with respect to swap agreements;
              (2) affecting the authority of the Commodity Futures 
          Trading Commission under section 2(h)(3) or 4(c) of the 
          Commodity Exchange Act (7 U.S.C. 2(h)(3), 6(c)), or affecting 
          any exemption granted under that section 4(c); or
              (3) requiring any swap agreement to be--
                      (A) conducted on or subject to the rules of a board 
                  of trade which has been designated or registered by the 
                  Commodity Futures Trading Commission as a contract 
                  market or derivatives transaction execution facility; 
                  or
                      (B) traded through an exchange or broker or dealer 
                  registered or required to be registered under the 
                  Securities Exchange Act of 1934 (15 U.S.C. 78a et 
                  seq.).
      (d) Consistent Treatment of Swap Agreements.--Prior to taking 
  action under subsection (a)(2), each Federal financial regulator shall 
  consult, work, and cooperate with other Federal financial regulators to 
  promote consistency in the treatment of swap agreements.
  
  SEC. 4. DEFINITIONS.
  
      For the purposes of this Act, the following definitions shall 
  apply:
              (1) Federal financial regulator.--
                      (A) In general.--The term ``Federal financial 
                  regulator'' means--
                              (i) the Commodity Futures Trading 
                          Commission;
                              (ii) the Federal Deposit Insurance 
                          Corporation;
                              (iii) the Board of Governors of the Federal 
                          Reserve System;
                              (iv) the National Credit Union 
                          Administration;
                              (v) the Office of the Comptroller of the 
                          Currency;
                              (vi) the Office of Thrift Supervision;
                              (vii) the Securities and Exchange 
                          Commission; and
                              (viii) any other Federal agency that is 
                          authorized under any provision of Federal law 
                          to regulate any financial institution or type 
                          or class of financial instrument or offering 
                          thereof.
              (2) Purchase; sale.--The terms ``purchase'' and ``sale'', 
          when used with respect to a swap agreement, means the 
          execution, termination (prior to its scheduled maturity date), 
          assignment, exchange, or similar transfer or conveyance of, or 
          extinguishing of rights or obligations under a swap agreement, 
          as the context may require.
              (3) Swap agreement.--
                      (A) In general.--The term ``swap agreement'' means 
                  any agreement, contract, or transaction between 
                  eligible contract participants (as defined in section 
                  1a(12) of the Commodity Exchange Act (7 U.S.C. 
                  1a(12))), the material terms of which (other than price 
                  and quantity) are subject to individual negotiation and 
                  that--
                              (i) is a put, call, cap, floor, collar, or 
                          similar option of any kind for the purchase or 
                          sale of, or based on the value of, 1 or more 
                          interest or other rates, currencies, 
                          commodities, indices, quantitative measures, or 
                          other financial or economic interests or 
                          property of any kind;
                              (ii) provides for any purchase, sale, 
                          payment, or delivery (other than a dividend on 
                          an equity security) that is dependent on the 
                          occurrence, nonoccurrence, or the extent of the 
                          occurrence of any event or contingency 
                          associated with a potential financial, 
                          economic, or commercial consequence;
                              (iii) provides on an executory basis for 
                          the exchange, on a fixed or contingent basis, 
                          of 1 or more payments based on the value or 
                          level of 1 or more interest or other rates, 
                          currencies, commodities, securities, instrument 
                          of indebtedness, indices, quantitative 
                          measures, or other financial or economic 
                          interests or property of any kind, or any 
                          interest therein or based on the value thereof, 
                          and that transfers, as between the parties to 
                          the transactions, in whole or in part, the 
                          financial risk associated with a future change 
                          in any such value or level without also 
                          conveying a current or future direct or 
                          indirect ownership interest in an asset 
                          (including any enterprise or investment pool) 
                          or liability that incorporates the financial 
                          risk so transferred, including any such 
                          agreement, contract, or transaction commonly 
                          known as an ``interest rate swap'', including a 
                          rate floor, rate cap, rate collar, cross-
                          currency rate swap, basis swap, currency swap, 
                          equity index swap, equity swap, debt index 
                          swap, debt swap, credit spread, credit default 
                          swap, credit swap, weather swap, or commodity 
                          swap;
                              (iv) provides for the purchase or sale, on 
                          a fixed or contingent basis, of any commodity, 
                          currency, instrument, interest, right, service, 
                          good, articles, or property of any kind; or
                              (v) is any combination or permutation of, 
                          or option on, any agreement, contract, or 
                          transaction described in any of clauses (i) 
                          through (iv).
                      (B) Exclusions.--The term ``swap agreement'' does 
                  not include--
                              (i) any put, call, straddle, option, or 
                          privilege on any security, certificate of 
                          deposit, or group or index of securities, 
                          including any interest therein or based on the 
                          value thereof;
                              (ii) any put, call, straddle, option, or 
                          privilege entered into on a national securities 
                          exchange registered pursuant to section 6(a) of 
                          the Securities Exchange Act of 1934 (15 U.S.C. 
                          78f(a)) relating to foreign currency;
                              (iii) any agreement, contract, or 
                          transaction providing for the purchase or sale 
                          of 1 or more securities on a fixed basis;
                              (iv) any agreement, contract, or 
                          transaction providing for the purchase or sale 
                          of 1 or more securities on a contingent basis, 
                          unless the agreement, contract, or transaction 
                          predicates the purchase or sale on the 
                          occurrence of a bona fide contingency that 
                          might reasonably be expected to affect or be 
                          affected by the creditworthiness of a party 
                          other than a party to the agreement, contract, 
                          or transaction;
                              (v) any note, bond, or evidence of 
                          indebtedness that is a security; or
                              (vi) any agreement, contract, or 
                          transaction that is--
                                      (I) based on a security; and
                                      (II) entered into directly or 
                                  through an underwriter (as defined in 
                                  section 2(a) of the Securities Act of 
                                  1933 (15 U.S.C. 77b(a))) by the issuer 
                                  of the security for the purpose of 
                                  raising capital, unless such agreement, 
                                  contract, or transaction is entered 
                                  into to manage a risk associated with 
                                  capital raising.
                      (C) Inclusion.--The term ``swap agreement'' 
                  includes a master agreement that provides for an 
                  agreement, contract, or transaction that is a swap 
                  agreement pursuant to subparagraphs (A) and (B), 
                  together with all supplements to any such master 
                  agreement, without regard to whether the master 
                  agreement contains an agreement, contract, or 
                  transaction that is not a swap agreement pursuant to 
                  subparagraphs (A) and (B), except that the master 
                  agreement shall be considered to be a swap agreement 
                  only with respect to each agreement, contract, or 
                  transaction under the master agreement that is a swap 
                  agreement pursuant to subparagraphs (A) and (B).
                      (D) Meaning of security.--For purposes of this 
                  paragraph, the term ``security'' has the same meaning 
                  as in section 2(a)(1) of the Securities Act of 1933 (15 
                  U.S.C. 77b(a)(1)) or section 3(a)(10) of the Securities 
                  Exchange Act of 1934 (15 U.S.C. 78c(a)(10)).
  
  SEC. 5. CONFORMING AMENDMENTS.
  
      (a) Securities Act of 1933.--Section 17(a) of the Securities Act of 
  1933 (15 U.S.C. 77q(a)) is amended by striking ``security-based swap 
  agreement (as defined in section 206B of the Gramm-Leach-Bliley Act)'' 
  and inserting ``swap agreement''.
      (b) Securities Exchange Act of 1934.--The Securities Exchange Act 
  of 1934 (15 U.S.C. 78a et seq.) is amended--
              (1) by striking ``security-based swap agreement (as defined 
          in section 206B of the Gramm-Leach-Bliley Act)'' each place 
          that term appears and inserting ``swap agreement'';
              (2) by striking ``security-based swap agreements (as 
          defined in section 206B of the Gramm-Leach-Bliley Act)'' each 
          place that term appears and inserting ``swap agreements'';
              (3) in each of sections 9 and 16 (15 U.S.C. 78i, 78p)--
                      (A) by striking ``security-based swap agreement'' 
                  each place that term appears and inserting ``swap 
                  agreement''; and
                      (B) by striking ``security-based swap agreements'' 
                  each place that term appears and inserting ``swap 
                  agreements'';
              (4) in section 10(b) (15 U.S.C. 78j(b)), by striking 
          ``securities-based swap agreement (as defined in section 206B 
          of the Gramm-Leach-Bliley Act)'' and inserting ``swap 
          agreement'';
              (5) in section 16(a)(2)(C) (15 U.S.C. 78p(a)(2)(C)), by 
          striking ``security-based swap agreement (as defined in section 
          206(b) of the Gramm-Leach-Bliley Act (15 U.S.C. 78c note))'' 
          and inserting ``swap agreement''; and
              (6) in section 3(a)(55)(A) (15 U.S.C. 78c(a)(55)(A)), by 
          striking ``2(c), 2(d), 2(f), or 2(g)'' and inserting ``2(c) or 
          2(f)''.
      (c) Commodity Exchange Act.--
              (1) Section 1a of the Commodity Exchange Act (7 U.S.C. 1a) 
          is amended--
                      (A) in paragraph (12)(A)(x), by striking ``or an 
                  exempt board of trade''; and
                      (B) in paragraph (31), in the second sentence, by 
                  striking ``2(c), 2(d), 2(f), or 2(g) of this Act'' and 
                  inserting ``2(c) or 2(f)''.
              (2) Section 2 of the Commodity Exchange Act (7 U.S.C. 2) is 
          amended--
                      (A) in subsection (c)(1), by striking ``5d,'';
                      (B) in subsection (e)--
                              (i) in paragraph (1), by striking 
                          ``2(d)(2), 2(g), or''; and
                              (ii) in paragraph (2), by striking ``, or 
                          operating as an exempt board of trade'';
                      (C) in subsection (h)(4)(A), by striking ``5d,''; 
                  and
                      (D) in subsection (i)--
                              (i) in paragraph (1)(A), by striking 
                          ``2(d), 2(e), 2(f), or 2(g)'' and inserting 
                          ``2(e), or 2(f)''; and
                              (ii) in paragraph (2), by striking ``Act), 
                          5b of this Act, or 5d of this Act'' and 
                          inserting ``Act) or 5b of this Act''.
              (3) Section 5a(g)(1) of the Commodity Exchange Act (7 
          U.S.C. 7a(g)(1)) is amended by striking ``2(c), 2(d), or 2(g)'' 
          and inserting ``2(c)''.
              (4) Section 5b of the Commodity Exchange Act (7 U.S.C. 7a-
          1) is amended--
                      (A) in subsection (a)(1), by striking ``2(d), 2(f), 
                  or 2(g)'' and inserting ``or 2(f)''; and
                      (B) in subsection (b), by striking ``2(c), 2(d), 
                  2(f), or 2(g)'' and inserting ``2(c) or 2(f)''.
              (5) Section 12(e) of the Commodity Exchange Act (7 U.S.C. 
          16(e)) is amended--
                      (A) in paragraph (1)(B)(i), by striking ``or exempt 
                  board of trade''; and
                      (B) in paragraph (2)(B), by striking ``2(c), 2(d), 
                  2(f), or 2(g)'' and inserting ``2(c) or 2(f)''.
      (d) Federal Deposit Insurance Corporation Improvement Act.--Section 
  408(2)(C) of the Federal Deposit Insurance Corporation Improvement Act 
  of 1991 (12 U.S.C. 4421(2)(C)) is amended by striking ``2(c), 2(d), 
  2(f), or 2(g)'' and inserting ``2(c) or 2(f)''.
target: Authorizing the Regulation of Swaps Act - Amends the Gramm-Leach-Bliley Act, the Securities Act of 1933, the Securities Exchange Act of 1934, the Commodity Futures Modernization Act of 2000, the Legal Certainty for Bank Products Act of 2000, and the Commodity Exchange Act to repeal prohibitions against regulation of credit default swaps and other swap agreements, whether traded on an exchange or over-the-counter, including commodity, equity, foreign currency, and interest rate swaps.
  
  Authorizes the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and specified other federal financial regulators to: (1) exercise oversight over any swap agreement entered into, purchased, or sold by any financial institution, entity, or person (for its own account or for the account of others), and any swap agreement, that is subject to the regulator's jurisdiction; and (2) promulgate, interpret, and enforce regulations, issue orders of general applicability, and impose disclosure, reporting, or recordkeeping requirements relating to any such swap agreement.
  
  Grants the SEC sole oversight authority over: (1) any exchange or clearing agency; and (2) any swap agreement traded on or cleared through such exchange or clearing agency.
  
  Grants the CFTC sole oversight authority over: (1) any trading facility or registered entity; and (2) any swap agreement executed on, traded on, or cleared through such trading facility or registered entity.
feat_title: A bill to authorize the regulation of credit default swaps and other swap agreements, and for other purposes.