S.Amdt. 3974

SA 3974. Mr. LEVIN (for himself, Mr. Kaufman, and Mrs. McCaskill)
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:

On page 1056, line 17, strike the second period and insert
the following: ``.

SEC. 946. RESTRICTION ON SYNTHETIC ASSET-BACKED SECURITIES.

The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.)
is amended by inserting after section 15G, as added by this
Act, the following new section:

``SEC. 15H. RESTRICTION ON SYNTHETIC ASSET-BACKED SECURITIES.

``(a) Definition.--For purposes of this section, the term
`synthetic asset-backed security' means an asset-backed
security with respect to which, by design, the self-
liquidating financial assets referenced in the synthetic
securitization do not provide any direct payment or cash flow
to the holder of the security.
``(b) Restriction.--
``(1) In general.--No issuer, underwriter, placement agent,
sponsor, or initial purchaser may offer, sell, or transfer a
synthetic asset-backed security that has no substantial or
material economic purpose apart from speculation on a
possible future gain or loss associated with the value or
condition of the referenced assets. The Commission may
determine whether a synthetic asset-backed security meets the
requirements of this section. A determination by the
Commission under the preceding sentence is not subject to
judicial review.
``(2) Rulemaking.--Not later than 180 days after the date
of enactment of this section, the Commission shall issue
rules to carry out this section and to prevent evasions
thereof.''.
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