§8323 — Title 15 Commerce and Trade | U.S. Code

Summary

The Commodity Futures Trading Commission must adopt rules within 180 days after July 21, 2010 to reduce conflicts of interest. The rules can limit how much control or voting power big firms have over derivatives clearing organizations, swap execution facilities, or contract markets that clear or post swaps or make swaps available for trading. Those firms include very large bank holding companies (see 12 U.S.C. 1841), certain nonbank financial companies supervised by the Board (see 12 U.S.C. 5311), their affiliates, swap dealers, major swap participants, and related persons. The Commission must also make rules if, after review, it finds they are needed to improve governance, reduce systemic risk, promote competition, or limit conflicts when a swap dealer or major swap participant has a major debt or equity stake. In writing the rules, the Commission must look at how much one investor owns, voting power, the ability to influence votes, and the governance setup of the clearinghouse or trading venue.

Title 15, §8323

Commerce and Trade — Source: USLM XML via OLRC

(a)In order to mitigate conflicts of interest, not later than 180 days after July 21, 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 1841 of title 12) with total consolidated assets of $50,000,000,000 or more, a nonbank financial company (as defined in section 5311 of title 12) 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)The Commission shall adopt rules if it determines, 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 participant’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)In adopting rules pursuant to this section, 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 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 swap execution facility or board of trade designated as a contract market that posts swaps or makes swaps available for trading.

Statutory Notes and Related Subsidiaries

Definitions For definitions of terms used in this section, see section 5301 of Title 12, Banks and Banking.

§8323 Rulemaking on Conflict of Interest

Summary

Title 15, §8323

Notes & Related Subsidiaries

Statutory Notes and Related Subsidiaries

Citations & Metadata