Page 404

shall, for the purposes of this subsection, by rules and regulations define, and prescribe means reasonably designed to prevent, such transactions, acts, practices, and courses of business as are fraudu- lent, deceptive, or manipulative, and such quotations as are ficti- tious.’’. (h) POSITION LIMITS AND POSITION ACCOUNTABILITY FOR SECU- RITY-BASED SWAPS.—The Securities Exchange Act of 1934 is amended by inserting after section 10A (15 U.S.C. 78j–1) the fol- lowing:

15 USC 78j–2. ‘‘SEC. 10B. POSITION LIMITS AND POSITION ACCOUNTABILITY FOR
SECURITY-BASED SWAPS AND LARGE TRADER REPORTING.
Fraud. ‘‘(a) POSITION LIMITS.—As a means reasonably designed to pre-
Regulations. vent fraud and manipulation, the Commission shall, by rule or
regulation, as necessary or appropriate in the public interest or
for the protection of investors, establish limits (including related
hedge exemption provisions) on the size of positions in any security-
based swap that may be held by any person. In establishing such
limits, the Commission may require any person to aggregate posi-
tions in—
‘‘(1) any security-based swap and any security or loan or
group of securities or loans on which such security-based swap
is based, which such security-based swap references, or to which
such security-based swap is related as described in paragraph
(68) of section 3(a), and any other instrument relating to such
security or loan or group or index of securities or loans; or
‘‘(2) any security-based swap and—
‘‘(A) any security or group or index of securities, the
price, yield, value, or volatility of which, or of which any
interest therein, is the basis for a material term of such
security-based swap as described in paragraph (68) of sec-
tion 3(a); and
‘‘(B) any other instrument relating to the same security
or group or index of securities described under subpara-
graph (A).
‘‘(b) EXEMPTIONS.—The Commission, by rule, regulation, or
order, may conditionally or unconditionally exempt any person or
class of persons, any security-based swap or class of security-based
swaps, or any transaction or class of transactions from any require-
ment the Commission may establish under this section with respect
to position limits.
‘‘(c) SRO RULES.—
‘‘(1) IN GENERAL.—As a means reasonably designed to pre-
vent fraud or manipulation, the Commission, by rule, regula-
tion, or order, as necessary or appropriate in the public interest,
for the protection of investors, or otherwise in furtherance
of the purposes of this title, may direct a self-regulatory
organization—
‘‘(A) to adopt rules regarding the size of positions in
any security-based swap that may be held by—
‘‘(i) any member of such self-regulatory organiza-
tion; or

LAWS ‘‘(ii) any person for whom a member of such self- regulatory organization effects transactions in such security-based swap; andPUBLIC with on anorris VerDate Nov 24 2008 00:49 Aug 26, 2010 Jkt 089139 PO 00203 Frm 00404 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203