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banking product for the purpose of evading the provisions of the Commodity Exchange Act (7 U.S.C. 1 et seq.), the Securities Act of 1933 (15 U.S.C. 77a et seq.), or the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.). ‘‘(c) EXCEPTION.—The exclusions in subsection (a) shall not apply to an identified bank product that— ‘‘(1) is a product of a bank that is not under the regulatory jurisdiction of an appropriate Federal banking agency; ‘‘(2) meets the definition of swap in section 1a(47) of the Commodity Exchange Act or security-based swap in section 3(a)(68) of the Securities Exchange Act of 1934; and ‘‘(3) has become known to the trade as a swap or security- based swap, or otherwise has been structured as an identified banking product for the purpose of evading the provisions of the Commodity Exchange Act (7 U.S.C. 1 et seq.), the Securities Act of 1933 (15 U.S.C. 77a et seq.), or the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.).’’. (h) REDUCING CLEARING SYSTEMIC RISK.—Section 5b(f)(1) of the Commodity Exchange Act (7 U.S.C. 7a-1(F)(i)) is amended by adding at the end the following: ‘‘In order to minimize systemic risk, under no circumstances shall a derivatives clearing organiza- tion be compelled to accept the counterparty credit risk of another clearing organization.’’.

SEC. 726. RULEMAKING ON CONFLICT OF INTEREST. 15 USC 8323.
(a) IN GENERAL.—In order to mitigate conflicts of interest, Deadline.
not later than 180 days after the date of enactment of the Wall
Street Transparency and Accountability Act of 2010, the Commodity
Futures Trading Commission shall adopt rules which may include
numerical limits on the control of, or the voting rights with respect
to, any derivatives clearing organization that clears swaps, or swap
execution facility or board of trade designated as a contract market
that posts swaps or makes swaps available for trading, by a bank
holding company (as defined in section 2 of the Bank Holding
Company Act of 1956 (12 U.S.C. 1841)) with total consolidated
assets of $50,000,000,000 or more, a nonbank financial company
(as defined in section 102) supervised by the Board, an affiliate
of such a bank holding company or nonbank financial company,
a swap dealer, major swap participant, or associated person of
a swap dealer or major swap participant.
(b) PURPOSES.—The Commission shall adopt rules if it deter-
mines, after the review described in subsection (a), that such rules
are necessary or appropriate to improve the governance of, or to
mitigate systemic risk, promote competition, or mitigate conflicts
of interest in connection with a swap dealer or major swap partici-
pant’s conduct of business with, a derivatives clearing organization,
contract market, or swap execution facility that clears or posts
swaps or makes swaps available for trading and in which such
swap dealer or major swap participant has a material debt or
equity investment.
(c) CONSIDERATIONS.—In adopting rules pursuant to this sec-
tion, the Commodity Futures Trading Commission shall consider
any conflicts of interest arising from the amount of equity owned
by a single investor, the ability to vote, cause the vote of, or

LAWS withhold votes entitled to be cast on any matters by the holders of the ownership interest, and the governance arrangements of any derivatives clearing organization that clears swaps, or swapPUBLIC with on anorris VerDate Nov 24 2008 12:08 Aug 19, 2010 Jkt 089139 PO 00000 Frm 00321 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203