No person may operate a facility for the trading or processing of swaps unless the facility is registered as a swap execution facility or as a designated contract market under this section.
Any person that is registered as a swap execution facility under this section shall register with the Commission regardless of whether the person also is registered with the Securities and Exchange Commission as a swap execution facility.
Except as specified in paragraph (2), a swap execution facility that is registered under subsection (a) may-
A swap execution facility may not list for trading or confirm the execution of any swap in an agricultural commodity (as defined by the Commission) except pursuant to a rule or regulation of the Commission allowing the swap under such terms and conditions as the Commission shall prescribe.
A board of trade that operates a contract market shall, to the extent that the board of trade also operates a swap execution facility and uses the same electronic trade execution system for listing and executing trades of swaps on or through the contract market and the swap execution facility, identify whether the electronic trading of such swaps is taking place on or through the contract market or the swap execution facility.
The goal of this section is to promote the trading of swaps on swap execution facilities and to promote pre-trade price transparency in the swaps market.
To be registered, and maintain registration, as a swap execution facility, the swap execution facility shall comply with-
Unless otherwise determined by the Commission by rule or regulation, a swap execution facility described in subparagraph (A) shall have reasonable discretion in establishing the manner in which the swap execution facility complies with the core principles described in this subsection.
A swap execution facility shall-
The swap execution facility shall permit trading only in swaps that are not readily susceptible to manipulation.
The swap execution facility shall-
The swap execution facility shall-
To reduce the potential threat of market manipulation or congestion, especially during trading in the delivery month, a swap execution facility that is a trading facility shall adopt for each of the contracts of the facility, as is necessary and appropriate, position limitations or position accountability for speculators.
For any contract that is subject to a position limitation established by the Commission pursuant to section 6a(a) of this title, the swap execution facility shall-
The swap execution facility shall establish and enforce rules and procedures for ensuring the financial integrity of swaps entered on or through the facilities of the swap execution facility, including the clearance and settlement of the swaps pursuant to section 2(h)(1) of this title.
The swap execution facility shall adopt rules to provide for the exercise of emergency authority, in consultation or cooperation with the Commission, as is necessary and appropriate, including the authority to liquidate or transfer open positions in any swap or to suspend or curtail trading in a swap.
The swap execution facility shall make public timely information on price, trading volume, and other trading data on swaps to the extent prescribed by the Commission.
The swap execution facility shall be required to have the capacity to electronically capture and transmit trade information with respect to transactions executed on the facility.
A swap execution facility shall-
The Commission shall adopt data collection and reporting requirements for swap execution facilities that are comparable to corresponding requirements for derivatives clearing organizations and swap data repositories.
Unless necessary or appropriate to achieve the purposes of this chapter, the swap execution facility shall not-
The swap execution facility shall-
The swap execution facility shall have adequate financial, operational, and managerial resources to discharge each responsibility of the swap execution facility.
The financial resources of a swap execution facility shall be considered to be adequate if the value of the financial resources exceeds the total amount that would enable the swap execution facility to cover the operating costs of the swap execution facility for a 1-year period, as calculated on a rolling basis.
The swap execution facility shall-
Each swap execution facility shall designate an individual to serve as a chief compliance officer.
The chief compliance officer shall-
In establishing procedures under subparagraph (B)(vi), the chief compliance officer shall design the procedures to establish the handling, management response, remediation, retesting, and closing of noncompliance issues.
In accordance with rules prescribed by the Commission, the chief compliance officer shall annually prepare and sign a report that contains a description of-
The chief compliance officer shall-
The Commission may exempt, conditionally or unconditionally, a swap execution facility from registration under this section if the Commission finds that the facility is subject to comparable, comprehensive supervision and regulation on a consolidated basis by the Securities and Exchange Commission, a prudential regulator, or the appropriate governmental authorities in the home country of the facility.
The Commission shall prescribe rules governing the regulation of alternative swap execution facilities under this section.
1So in original. The closing quotation marks probably should not appear.
2So in original. Probably should be "take".
7 U.S.C. § 7b-3
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATESection effective on the later of 360 days after July 21, 2010, or, to the extent a provision of subtitle A (§§711-754) of title VII of Pub. L. 111-203 requires a rulemaking, not less than 60 days after publication of the final rule or regulation implementing such provision of subtitle A, see section 754 of Pub. L. 111-203 set out as an Effective Date of 2010 Amendment note under section 1a of this title.
- Board
- The term "Board" means the Board of Governors of the Federal Reserve System.
- Commission
- The term "Commission" means the Commodity Futures Trading Commission established under section 2(a)(2) of this title.
- board of trade
- The term "board of trade" means any organized exchange or other trading facility.
- interstate commerce
- The term "interstate commerce" means commerce-(A) between any State, territory, or possession, or the District of Columbia, and any place outside thereof; or(B) between points within the same State, territory, or possession, or the District of Columbia, but through any place outside thereof, or within any territory or possession, or the District of Columbia.
- prudential regulator
- The term "prudential regulator" means-(A) the Board in the case of a swap dealer, major swap participant, security-based swap dealer, or major security-based swap participant that is-(i) a State-chartered bank that is a member of the Federal Reserve System;(ii) a State-chartered branch or agency of a foreign bank;(iii) any foreign bank which does not operate an insured branch;(iv) any organization operating under section 25A of the Federal Reserve Act [12 U.S.C. 611 et seq.] or having an agreement with the Board under section 225 of the Federal Reserve Act4;(v) any bank holding company (as defined in section 2 of the Bank Holding Company Act of 19654 (12 U.S.C. 1841)), any foreign bank (as defined in section 3101(7) of title 12) that is treated as a bank holding company under section 3106(a) of title 12, and any subsidiary of such a company or foreign bank (other than a subsidiary that is described in subparagraph (A) or (B) or that is required to be registered with the Commission as a swap dealer or major swap participant under this chapter or with the Securities and Exchange Commission as a security-based swap dealer or major security-based swap participant);(vi) after the transfer date (as defined in section 311 of the Dodd-Frank Wall Street Reform and Consumer Protection Act [12 U.S.C. 5411] ), any savings and loan holding company (as defined in section 1467a of title 12) and any subsidiary of such company (other than a subsidiary that is described in subparagraph (A) or (B) or that is required to be registered as a swap dealer or major swap participant with the Commission under this chapter or with the Securities and Exchange Commission as a security-based swap dealer or major security-based swap participant); or(vii) any organization operating under section 25A of the Federal Reserve Act (12 U.S.C. 611 et seq.) or having an agreement with the Board under section 25 of the Federal Reserve Act (12 U.S.C. 601 et seq.);(B) the Office of the Comptroller of the Currency in the case of a swap dealer, major swap participant, security-based swap dealer, or major security-based swap participant that is-(i) a national bank;(ii) a federally chartered branch or agency of a foreign bank; or(iii) any Federal savings association;(C) the Federal Deposit Insurance Corporation in the case of a swap dealer, major swap participant, security-based swap dealer, or major security-based swap participant that is-(i) a State-chartered bank that is not a member of the Federal Reserve System; or(ii) any State savings association;(D) the Farm Credit Administration, in the case of a swap dealer, major swap participant, security-based swap dealer, or major security-based swap participant that is an institution chartered under the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.); and(E) the Federal Housing Finance Agency in the case of a swap dealer, major swap participant, security-based swap dealer, or major security-based swap participant that is a regulated entity (as such term is defined in section 4502 of title 12).
- swap execution facility
- The term "swap execution facility" means a trading system or platform in which multiple participants have the ability to execute or trade swaps by accepting bids and offers made by multiple participants in the facility or system, through any means of interstate commerce, including any trading facility, that-(A) facilitates the execution of swaps between persons; and(B) is not a designated contract market.