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PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1685

‘‘(A) apply only to a swap between a counterparty and
a swap dealer or major swap participant that is not sub-
mitted for clearing to a derivatives clearing organization;
and
‘‘(B)(i) not apply to variation margin payments; or
‘‘(ii) not preclude any commercial arrangement
regarding—
‘‘(I) the investment of segregated funds or other
property that may only be invested in such investments
as the Commission may permit by rule or regulation;
and
‘‘(II) the related allocation of gains and losses
resulting from any investment of the segregated funds
or other property.
‘‘(3) USE OF INDEPENDENT THIRD-PARTY CUSTODIANS.—The
segregated account described in paragraph (1) shall be—
‘‘(A) carried by an independent third-party custodian;
and
‘‘(B) designated as a segregated account for and on
behalf of the counterparty.
‘‘(4) REPORTING REQUIREMENT.—If the counterparty does
not choose to require segregation of the funds or other property
supplied to margin, guarantee, or secure the obligations of
the counterparty, the swap dealer or major swap participant
shall report to the counterparty of the swap dealer or major
swap participant on a quarterly basis that the back office
procedures of the swap dealer or major swap participant
relating to margin and collateral requirements are in compli-
ance with the agreement of the counterparties.’’.

SEC. 725. DERIVATIVES CLEARING ORGANIZATIONS.
(a) REGISTRATION REQUIREMENT.—Section 5b of the Commodity
Exchange Act (7 U.S.C. 7a–1) is amended by striking subsections
(a) and (b) and inserting the following:
‘‘(a) REGISTRATION REQUIREMENT.—
‘‘(1) IN GENERAL.—Except as provided in paragraph (2),
it shall be unlawful for a derivatives clearing organization,
directly or indirectly, to make use of the mails or any means
or instrumentality of interstate commerce to perform the func-
tions of a derivatives clearing organization with respect to—
‘‘(A) a contract of sale of a commodity for future Contracts.
delivery (or an option on the contract of sale) or option
on a commodity, in each case, unless the contract or option
is—
‘‘(i) excluded from this Act by subsection
(a)(1)(C)(i), (c), or (f) of section 2; or
‘‘(ii) a security futures product cleared by a clearing
agency registered with the Securities and Exchange
Commission under the Securities Exchange Act of 1934
(15 U.S.C. 78a et seq.); or
‘‘(B) a swap.
‘‘(2) EXCEPTION.—Paragraph (1) shall not apply to a deriva-
tives clearing organization that is registered with the Commis-

LAWS sion. ‘‘(b) VOLUNTARY REGISTRATION.—A person that clears 1 or more agreements, contracts, or transactions that are not required toPUBLIC with on anorris VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00311 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203