S.Amdt. 3914

SA 3914. Mr. CHAMBLISS submitted an amendment intended to be proposed
to amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself
and Mrs. Lincoln)) to the bill S. 3217, to promote the financial
stability of the United States by improving accountability and
transparency in the financial system, to end ``too big to fail'', to
protect the American taxpayer by ending bailouts, to protect consumers
from abusive financial services practices, and for other purposes;
which was ordered to lie on the table; as follows:

Beginning on page 539, strike line 14 and all that follows
through page 541, line 24, and insert the following:
``(33) Major swap participant.--
``(A) In general.--The term `major swap participant' means
any person who is not a swap dealer, and--
``(i)(I) maintains a substantial net position in swaps for
any of the major swap categories as determined by the
Commission, excluding--

``(aa) positions held for hedging or mitigating commercial
risk, including operating risk and balance sheet risk, of
such person or its affiliates; and
``(bb) positions maintained by any employee benefit plan
(or any contract held by such a plan) as defined in
paragraphs (3) and (32) of section 3 of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1002) for
the primary purpose of hedging or mitigating any risk
directly associated with the operation of the plan; and

``(II) whose outstanding swaps create substantial net
counterparty exposure that could have serious adverse effects
on the financial stability of the United States banking
system or financial markets; or
``(ii)(I) is a financial entity, other than an entity
predominantly engaged in providing customer financing for the
purchase of an affiliate's merchandise or manufactured goods,
that is highly leveraged relative to the amount of capital it
holds;
``(II) maintains a substantial net position in outstanding
swaps in any major swap category as determined by the
Commission; and
``(III) whose outstanding swaps create substantial net
counterparty exposure that could have serious adverse effects
on the financial stability of the United States banking
system or financial markets.
``(B) Definition of substantial net position.--For purposes
of subparagraph (A), the Commission shall define by rule or
regulation the term `substantial net position' to mean a
position after application of legally enforceable netting or
collateral arrangements that meets a threshold the Commission
determines to be prudent for the effective monitoring,
management, and oversight of entities that are systemically
important or can significantly impact the financial system of
the United States.
``(C) Scope of designation.--For purposes of subparagraph
(A), a person may be designated as a major swap participant
for 1 or more categories of swaps without being classified as
a major swap participant for all classes of swaps.
``(D) Capital.--In setting capital requirements for a
person that is designated as a major swap participant for a
single type or single class or category of swaps or
activities, the prudential regulator and the Commission shall
take into account the risks associated with other types of
swaps or classes of swaps or categories of swaps engaged in
by

[[Page S3427]]

virtue of the status of the person as a major swap
participant.'';
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