S.Amdt. 4092

1. Rewrites title VIII

   Replaces

   Removes title VIII.

   Inserted: TITLE VIII--PAYMENT, CLEARING, AND SETTLEMENT SUPERVISION

   Inserted: SEC. 801. SHORT TITLE.

   Inserted: This title may be cited as the "Payment, Clearing, and Settlement Supervision Act of 2010".

   Inserted: SEC. 802. FINDINGS.

   Inserted: Congress finds the following:

   Inserted: (1) The proper functioning of the financial markets is dependent upon safe and efficient arrangements for the clearing and settlement of payment, securities, and other financial transactions.

   Inserted: (2) Financial market utilities that conduct or support multilateral payment, clearing, or settlement activities may reduce risks for their participants and the broader financial system, but such utilities may also concentrate and create new risks and thus must be well designed and operated in a safe and sound manner.

   Inserted: (3) Payment, clearing, and settlement activities conducted by financial institutions also present important risks to the participating financial institutions and to the financial system.

   Inserted: (4) Enhancements to the regulation and supervision of systemically important financial market utilities and the conduct of systemically important payment, clearing, and settlement activities by financial institutions are necessary--

   Inserted: (A) to provide consistency;

   Inserted: (B) to promote robust risk management and safety and soundness;

   Inserted: (C) to reduce systemic risks; and

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   Inserted: (D) to support the stability of the broader financial system.

   Inserted: SEC. 803. DEFINITIONS.

   Inserted: In this title, the following definitions shall apply:

   Inserted: (1) Designated activity.--The term "designated activity" means a payment, clearing, or settlement activity (other than a payment, clearing, or settlement activity that is regulated by the Commodity Futures Trading Commission or the Securities and Exchange Commission) that the Council has designated as systemically important under section 804.

   Inserted: (2) Designated financial market utility.--The term "designated financial market utility" means a financial market utility that the Council has designated as systemically important under section 804.

   Inserted: (3) Financial institution.--The term "financial institution" means--

   Inserted: (A) a depository institution, as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813);

   Inserted: (B) a branch or agency of a foreign bank, as defined in section 1(b) of the International Banking Act of 1978 (12 U.S.C. 3101);

   Inserted: (C) an organization operating under section 25 or 25A of the Federal Reserve Act (12 U.S.C. 601-604a and 611 through 631);

   Inserted: (D) a credit union, as defined in section 101 of the Federal Credit Union Act (12 U.S.C. 1752);

   Inserted: (E) a broker or dealer, as defined in section 3 of the Securities Exchange Act of 1934 (15 U.S.C. 78c);

   Inserted: (F) an investment company, as defined in section 3 of the Investment Company Act of 1940 (15 U.S.C. 80a-3);

   Inserted: (G) an insurance company, as defined in section 2 of the Investment Company Act of 1940 (15 U.S.C. 80a-2);

   Inserted: (H) an investment adviser, as defined in section 202 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-2);

   Inserted: (I) a futures commission merchant, commodity trading advisor, or commodity pool operator, as defined in section 1a of the Commodity Exchange Act (7 U.S.C. 1a); and

   Inserted: (J) any company engaged in activities that are financial in nature or incidental to a financial activity, as described in section 4 of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(k)).

   Inserted: (4) Financial market utility.--The term "financial market utility" means any person that manages or operates a multilateral system for the purpose of transferring, clearing, or settling payments, securities, or other financial transactions among financial institutions or between financial institutions and the person.

   Inserted: (5) Payment, clearing, or settlement activity.--

   Inserted: (A) In general.--The term "payment, clearing, or settlement activity" means an activity carried out by 1 or more financial institutions to facilitate the completion of financial transactions.

   Inserted: (B) Financial transaction.--For the purposes of subparagraph (A), the term "financial transaction" includes--

   Inserted: (i) funds transfers;

   Inserted: (ii) securities contracts;

   Inserted: (iii) contracts of sale of a commodity for future delivery;

   Inserted: (iv) forward contracts;

   Inserted: (v) repurchase agreements;

   Inserted: (vi) swaps;

   Inserted: (vii) security-based swaps;

   Inserted: (viii) foreign exchange swaps and forwards; and

   Inserted: (ix) any similar transaction that the Council determines to be a financial transaction for purposes of this title.

   Inserted: (C) Included activities.--When conducted with respect to a financial transaction, payment, clearing, and settlement activities may include--

   Inserted: (i) the calculation and communication of unsettled financial transactions between counterparties;

   Inserted: (ii) the netting of transactions;

   Inserted: (iii) provision and maintenance of trade, contract, or instrument information;

   Inserted: (iv) the management of risks and activities associated with continuing financial transactions;

   Inserted: (v) transmittal and storage of payment instructions;

   Inserted: (vi) the movement of funds;

   Inserted: (vii) the final settlement of financial transactions; and

   Inserted: (viii) other similar functions that the Council may determine.

   Inserted: (6) Supervisory agency.--

   Inserted: (A) In general.--The term "Supervisory Agency" means the Federal agency that has primary jurisdiction over a designated financial market utility under Federal banking, securities, or commodity futures laws, including--

   Inserted: (i) the Securities and Exchange Commission, with respect to a designated financial market utility that is registered with the Securities and Exchange Commission;

   Inserted: (ii) the Commodity Futures Trading Commission, with respect to a designated financial market utility that is registered with the Commodity Futures Trading Commission;

   Inserted: (iii) the appropriate Federal banking agency, with respect to a designated financial market utility that is an institution described in section 3(q) of the Federal Deposit Insurance Act; and

   Inserted: (iv) the Board of Governors, with respect to a designated financial market utility that is otherwise not subject to the jurisdiction of any agency listed in clauses (i), (ii), and (iii).

   Inserted: (B) Multiple agency jurisdiction.--

   Inserted: (i) If a designated financial market utility is subject to the primary jurisdictional supervision of more than 1 agency listed in clauses (iii) or (iv) of subparagraph (A), then such agencies should agree on 1 agency to act as the Supervisory Agency, and if such agencies cannot agree on which agency has primary jurisdiction, the Council shall decide which agency is the Supervisory Agency for purposes of this title.

   Inserted: (ii) If a designated financial market utility is subject to the primary jurisdictional supervision of more than 1 agency listed in clauses (i) through (iv) of subparagraph (A), and such designated financial market utility is registered with either the Commodity Futures Trading Commission or the Securities and Exchange Commission, the Commodity Futures Trading Commission or the Securities and Exchange Commission, as applicable, shall be the Supervisory Agency for purposes of this title. If the designated financial market utility is registered with both the Commodity Futures Trading Commission and the Securities and Exchange Commission, then the agency which oversees the predominance of the payment, clearing, and settlement activities conducted by the designated financial market utility shall be the Supervisory Agency for purposes of this title.

   Inserted: (7) Systemically important and systemic importance.--The terms "systemically important" and "systemic importance" mean a situation where the failure of or a disruption to the functioning of a financial market utility or the conduct of a payment, clearing, or settlement activity could create, or increase, the risk of significant liquidity or credit problems spreading among financial institutions or markets and thereby threaten the stability of the financial system.

   Inserted: SEC. 804. DESIGNATION OF SYSTEMIC IMPORTANCE.

   Inserted: (a) Designation.--

   Inserted: (1) Financial stability oversight council.--The Council, on a nondelegable basis and by a vote of not fewer than \2/3\ of members then serving, including an affirmative vote by the Chairperson, shall designate those financial market utilities or payment, clearing, or settlement activities that the Council determines are, or are likely to become, systemically important.

   Inserted: (2) Considerations.--In determining whether a financial market utility or payment, clearing, or settlement activity is, or is likely to become, systemically important, the Council shall take into consideration the following:

   Inserted: (A) The aggregate monetary value of transactions processed by the financial market utility or carried out through the payment, clearing, or settlement activity.

   Inserted: (B) The aggregate exposure of the financial market utility or a financial institution engaged in payment, clearing, or settlement activities to its counterparties.

   Inserted: (C) The relationship, interdependencies, or other interactions of the financial market utility or payment, clearing, or settlement activity with other financial market utilities or payment, clearing, or settlement activities.

   Inserted: (D) The effect that the failure of or a disruption to the financial market utility or payment, clearing, or settlement activity would have on critical markets, financial institutions, or the broader financial system.

   Inserted: (E) Any other factors that the Council deems appropriate.

   Inserted: (b) Rescission of Designation.--

   Inserted: (1) In general.--The Council, on a nondelegable basis and by a vote of not fewer than \2/3\ of members then serving, including an affirmative vote by the Chairperson, shall rescind a designation of systemic importance for a designated financial market utility or designated activity if the Council determines that the utility or activity no longer meets the standards for systemic importance.

   Inserted: (2) Effect of rescission.--Upon rescission, the financial market utility or financial institutions conducting the activity will no longer be subject to the provisions of this title or any rules or orders prescribed by the Council under this title.

   Inserted: (c) Consultation and Notice and Opportunity for Hearing.--

   Inserted: (1) Consultation.--Before making any determination under subsection (a) or (b), the Council shall consult with the relevant Supervisory Agency.

   Inserted: (2) Advance notice and opportunity for hearing.--

   Inserted: (A) In general.--Before making any determination under subsection (a) or (b), the Council shall provide the financial market utility or, in the case of a payment, clearing, or settlement activity, financial institutions with advance notice of the proposed determination of the Council.

   Inserted: (B) Notice in federal register.--The Council shall provide such advance notice to financial institutions by publishing a notice in the Federal Register.

   Inserted: (C) Requests for hearing.--Within 30 days from the date of any notice of the proposed determination of the Council, the financial market utility or, in the case of a payment, clearing, or settlement activity, a financial institution engaged in the designated activity may request, in writing, an opportunity for a written or oral hearing before the Council to demonstrate that the proposed designation or rescission of designation is not supported by substantial evidence.

   Inserted: (D) Written submissions.--Upon receipt of a timely request, the Council shall fix a time, not more than 30 days after receipt of the request, unless extended at the request of the financial market utility or financial institution, and place at which the financial market utility or financial institution may appear, personally or through counsel, to submit written materials, or, at the sole discretion of the Council, oral testimony or oral argument.

   Inserted: (3) Emergency exception.--

   Inserted: (A) Waiver or modification by vote of the council.--The Council may waive or modify the requirements of paragraph (2) if the Council determines, by an affirmative vote of not less than \2/3\ of all members then serving, including an affirmative vote by the Chairperson, that the waiver or modification is necessary to prevent or mitigate an immediate threat to the financial system posed by the financial market utility or the payment, clearing, or settlement activity.

   Inserted: (B) Notice of waiver or modification.--The Council shall provide notice of the waiver or modification to the financial market utility concerned or, in the case of a payment, clearing, or settlement activity, to financial institutions, as soon as practicable, which shall be no later than 24 hours after the waiver or modification in the case of a financial market utility and 3 business days in the case of financial institutions. The Council shall provide the notice to financial institutions by posting a notice on the website of the Council and by publishing a notice in the Federal Register.

   Inserted: (d) Notification of Final Determination.--

   Inserted: (1) After hearing.--Within 60 days of any hearing under subsection (c)(2), the Council shall notify the financial market utility or financial institutions of the final determination of the Council in writing, which shall include findings of fact upon which the determination of the Council is based.

   Inserted: (2) When no hearing requested.--If the Council does not receive a timely request for a hearing under subsection (c)(2), the Council shall notify the financial market utility or financial institutions of the final determination of the Council in writing not later than 30 days after the expiration of the date by which a financial market utility or a financial institution could have requested a hearing. All notices to financial institutions under this subsection shall be published in the Federal Register.

   Inserted: (e) Extension of Time Periods.--The Council may extend the time periods established in subsections (c) and (d) as the Council determines to be necessary or appropriate.

   Inserted: SEC. 805. STANDARDS FOR SYSTEMICALLY IMPORTANT DESIGNATED FINANCIAL MARKET UTILITIES AND PAYMENT, CLEARING, OR SETTLEMENT ACTIVITIES.

   Inserted: (a) Authority To Prescribe Standards.--The Board of Governors, by rule or order, and in consultation with the Council and the Supervisory Agencies, shall prescribe risk management standards, taking into consideration relevant international standards and existing prudential requirements, governing--

   Inserted: (1) the operations related to the payment, clearing, and settlement activities of designated financial market utilities other than designated financial market utilities for which the Supervisory Agency is either the Commodity Futures Trading Commission or the Securities and Exchange Commission; and

   Inserted: (2) the conduct of designated activities by financial institutions.

   Inserted: (b) Recommended Standards.--

   Inserted: (1) In general.--The Council may recommend risk management standards regarding the operations of payment, clearing, and settlement activities of designated financial market utilities for which the Commodity Futures Trading Commission or the Securities and Exchange Commission is the Supervisory Agency, taking into consideration relevant international standards and existing prudential requirements.

   Inserted: (2) Procedure for recommendation.--The Council shall consult with the Commodity Futures Trading Commission or the Securities and Exchange Commission, as applicable, and shall provide notice to the public and opportunity for comment for any proposed recommendation under paragraph (1).

   Inserted: (3) Consideration and implementation.--The Commodity Futures Trading Commission or the Securities and Exchange Commission, as applicable, may impose the standards recommended by the Council under paragraph (1), or shall explain in writing to the Council, not later than 90 days after the date on which it receives the Council's recommendation, why the agency has determined not to follow the recommendation of the Council.

   Inserted: (c) Objectives and Principles.--The objectives and principles for the risk management standards prescribed under subsection (a) or recommended under subsection (b) shall be to--

   Inserted: (1) promote robust risk management;

   Inserted: (2) promote safety and soundness;

   Inserted: (3) reduce systemic risks; and

   Inserted: (4) support the stability of the broader financial system.

   Inserted: (d) Scope.--The standards prescribed under subsection (a) or recommended under subsection (b) may address areas such as--

   Inserted: (1) risk management policies and procedures;

   Inserted: (2) margin and collateral requirements;

   Inserted: (3) participant or counterparty default policies and procedures;

   Inserted: (4) the ability to complete timely clearing and settlement of financial transactions;

   Inserted: (5) capital and financial resource requirements for designated financial market utilities; and

   Inserted: (6) other areas that the Board of Governors determines are necessary to achieve the objectives and principles in subsection (c).

   Inserted: (e) Threshold Level.--The standards prescribed under subsection (a) governing the conduct of designated activities by financial institutions shall, where appropriate, establish a threshold as to the level or significance of engagement in the activity at which a financial institution will become subject to the standards with respect to that activity.

   Inserted: (f) Compliance Required.--Designated financial market utilities and financial institutions subject to the standards prescribed by the Board of Governors under subsection (a) for a designated activity shall conduct their operations in compliance with the applicable risk management standards prescribed by the Board of Governors.

   Inserted: SEC. 806. OPERATIONS OF DESIGNATED FINANCIAL MARKET UTILITIES.

   Inserted: (a) Federal Reserve Account and Services.--The Board of Governors may authorize a Federal Reserve Bank to establish and maintain an account for a designated financial market utility and provide services to the designated financial market utility that the Federal Reserve Bank is authorized under the Federal Reserve Act to provide to a depository institution, subject to any applicable rules, orders, standards, or guidelines prescribed by the Board of Governors.

   Inserted: (b) Advances.--The Board of Governors may authorize a Federal Reserve Bank to provide to a designated financial market utility the same discount and borrowing privileges as the Federal Reserve Bank may provide to a depository institution under the Federal Reserve Act, subject to any applicable rules, orders, standards, or guidelines prescribed by the Board of Governors.

   Inserted: (c) Earnings on Federal Reserve Balances.--A Federal Reserve Bank may pay earnings on balances maintained by or on behalf of a designated financial market utility in the same manner and to the same extent as the Federal Reserve Bank may pay earnings to a depository institution under the Federal Reserve Act, subject to any applicable rules, orders, standards, or guidelines prescribed by the Board of Governors.

   Inserted: (d) Reserve Requirements.--The Board of Governors may exempt a designated financial market utility from, or modify any, reserve requirements under section 19 of the Federal Reserve Act (12 U.S.C. 461) applicable to a designated financial market utility.

   Inserted: (e) Changes to Rules, Procedures, or Operations.--

   Inserted: (1) Advance notice.--

   Inserted: (A) Advance notice of proposed changes required.--A designated financial market utility shall provide 60-days' advance notice to its Supervisory Agency and the Board of Governors of any proposed change to its rules, procedures, or operations that could, as defined in rules of the Board of Governors, materially affect, the nature or level of risks presented by the designated financial market utility.

   Inserted: (B) Terms and standards prescribed by the board of governors.--The Board of Governors shall prescribe regulations that define and describe the standards for determining when notice is required to be provided under subparagraph (A).

   Inserted: (C) Contents of notice.--The notice of a proposed change shall describe--

   Inserted: (i) the nature of the change and expected effects on risks to the designated financial market utility, its participants, or the market; and

   Inserted: (ii) how the designated financial market utility plans to manage any identified risks.

   Inserted: (D) Additional information.--The Supervisory Agency or the Board of Governors may require a designated financial market utility to provide any information necessary to assess the effect the proposed change would have on the nature or level of risks associated with the designated financial market utility's payment, clearing, or settlement activities and the sufficiency of any proposed risk management techniques.

   Inserted: (E) Notice of objection.--The Supervisory Agency or the Board of Governors shall notify the designated financial market utility of any objection regarding the proposed change within 60 days from the later of--

   Inserted: (i) the date that the notice of the proposed change is received; or

   Inserted: (ii) the date any further information requested for consideration of the notice is received.

   Inserted: (F) Change not allowed if objection.--A designated financial market utility shall not implement a change to which the Board of Governors or the Supervisory Agency has an objection.

   Inserted: (G) Change allowed if no objection within 60 days.--A designated financial market utility may implement a change if it has not received an objection to the proposed change within 60 days of the later of--

   Inserted: (i) the date that the Supervisory Agency or the Board of Governors receives the notice of proposed change; or

   Inserted: (ii) the date the Supervisory Agency or the Board of Governors receives any further information it requests for consideration of the notice.

   Inserted: (H) Review extension for novel or complex issues.--The Supervisory Agency or the Board of Governors may, during the 60-day review period, extend the review period for an additional 60 days for proposed changes that raise novel or complex issues, subject to the Supervisory Agency or the Board of Governors providing the designated financial market utility with prompt written notice of the extension. Any extension under this subparagraph will extend the time periods under subparagraphs (E) and (G).

   Inserted: (I) Change allowed earlier if notified of no objection.--A designated financial market utility may implement a change in less than 60 days from the date of receipt of the notice of proposed change by the Supervisory Agency or the Board of Governors, or the date the Supervisory Agency or the Board of Governors receives any further information it requested, if the Supervisory Agency or the Board of Governors notifies the designated financial market utility in writing that it does not object to the proposed change and authorizes the designated financial market utility to implement the change on an earlier date, subject to any conditions imposed by the Supervisory Agency or the Board of Governors.

   Inserted: (2) Emergency changes.--

   Inserted: (A) In general.--A designated financial market utility may implement a change that would otherwise require advance notice under this subsection if it determines that--

   Inserted: (i) an emergency exists; and

   Inserted: (ii) immediate implementation of the change is necessary for the designated financial market utility to continue to provide its services in a safe and sound manner.

   Inserted: (B) Notice required within 24 hours.--The designated financial market utility shall provide notice of any such emergency change to its Supervisory Agency and the Board of Governors, as soon as practicable, which shall be no later than 24 hours after implementation of the change.

   Inserted: (C) Contents of emergency notice.--In addition to the information required for changes requiring advance notice, the notice of an emergency change shall describe--

   Inserted: (i) the nature of the emergency; and

   Inserted: (ii) the reason the change was necessary for the designated financial market utility to continue to provide its services in a safe and sound manner.

   Inserted: (D) Modification or rescission of change may be required.--The Supervisory Agency or the Board of Governors may require modification or rescission of the change if it finds that the change is not consistent with the purposes of this Act or any rules, orders, or standards prescribed by the Board of Governors hereunder.

   Inserted: (3) Copying the board of governors.--The Supervisory Agency shall provide the Board of Governors concurrently with a complete copy of any notice, request, or other information it issues, submits, or receives under this subsection.

   Inserted: (4) Consultation with board of governors.--Before taking any action on, or completing its review of, a change proposed by a designated financial market utility, the Supervisory Agency shall consult with the Board of Governors.

   Inserted: (f) Applicability.--Nothing in this section shall be applicable to any designated financial market utility for which the Supervisory Agency is the Commodity Futures Trading Commission or the Securities and Exchange Commission. Notwithstanding the previous sentence, nothing in this subsection shall limit or be construed to limit the authority of the Board under section 13(3) of the Federal Reserve Act (12 U.S.C. 343).

   Inserted: SEC. 807. EXAMINATION OF AND ENFORCEMENT ACTIONS AGAINST DESIGNATED FINANCIAL MARKET UTILITIES.

   Inserted: (a) Examination.--Notwithstanding any other provision of law and subject to subsection (d), the Supervisory Agency shall conduct examinations of a designated financial market utility at least once annually in order to determine the following:

   Inserted: (1) The nature of the operations of, and the risks borne by, the designated financial market utility.

   Inserted: (2) The financial and operational risks presented by the designated financial market utility to financial institutions, critical markets, or the broader financial system.

   Inserted: (3) The resources and capabilities of the designated financial market utility to monitor and control such risks.

   Inserted: (4) The safety and soundness of the designated financial market utility.

   Inserted: (5) For a designated financial market utility for which the Supervisory Agency is not the Commodity Futures Trading Commission or the Securities and Exchange Commission, the designated financial market utility's compliance with--

   Inserted: (A) this title; and

   Inserted: (B) the rules and orders prescribed by the Board of Governors under this title.

   Inserted: (b) Service Providers.--Whenever a service integral to the operation of a designated financial market utility is performed for the designated financial market utility by another entity, whether an affiliate or non-affiliate and whether on or off the premises of the designated financial market utility, the Supervisory Agency may examine whether the provision of that service is in compliance with applicable law, rules, orders, and standards to the same extent as if the designated financial market utility were performing the service on its own premises.

   Inserted: (c) Enforcement.--For purposes of enforcing the provisions of this section, a designated financial market utility shall be subject to, and the appropriate Supervisory Agency shall have authority under the provisions of subsections (b) through (n) of section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818) in the same manner and to the same extent as if the designated financial market utility was an insured depository institution and the Supervisory Agency was the appropriate Federal banking agency for such insured depository institution.

   Inserted: (d) Board of Governors Involvement in Examinations.--

   Inserted: (1) Board of governors consultation on examination planning.--The Supervisory Agency shall consult with the Board of Governors regarding the scope and methodology of any examination conducted under subsections (a) and (b).

   Inserted: (2) Board of governors participation in examination.--The Board of Governors may, in its discretion, participate in any examination led by a Supervisory Agency and conducted under subsections (a) and (b).

   Inserted: (e) Board of Governors Enforcement Recommendations.--

   Inserted: (1) Recommendation.--The Board of Governors may at any time recommend to the Supervisory Agency that such agency take enforcement action against a designated financial market utility. Any such recommendation for enforcement action shall provide a detailed analysis supporting the recommendation of the Board of Governors.

   Inserted: (2) Consideration.--The Supervisory Agency shall consider the recommendation of the Board of Governors and submit a response to the Board of Governors within 60 days.

   Inserted: (3) Mediation.--If the Supervisory Agency rejects, in whole or in part, the recommendation of the Board of Governors, the Board of Governors may dispute the matter by referring the recommendation to the Council, which shall attempt to resolve the dispute.

   Inserted: (4) Enforcement action.--If the Council is unable to resolve the dispute under paragraph (3) within 30 days from the date of referral, the Board of Governors may, upon a vote of its members--

   Inserted: (A) exercise the enforcement authority referenced in subsection (c) as if it were the Supervisory Agency; and

   Inserted: (B) take enforcement action against the designated financial market utility.

   Inserted: (f) Emergency Enforcement Actions by the Board of Governors.--

   Inserted: (1) Imminent risk of substantial harm.--The Board of Governors may, after consulting with the Council and the Supervisory Agency, take enforcement action against a designated financial market utility if the Board of Governors has reasonable cause to believe that--

   Inserted: (A) either--

   Inserted: (i) an action engaged in, or contemplated by, a designated financial market utility (including any change proposed by the designated financial market utility to its rules, procedures, or operations that would otherwise be subject to section 806(e)) poses an imminent risk of substantial harm to financial institutions, critical markets, or the broader financial system; or

   Inserted: (ii) the condition of a designated financial market utility, poses an imminent risk of substantial harm to financial institutions, critical markets, or the broader financial system; and

   Inserted: (B) the imminent risk of substantial harm precludes the Board of Governors' use of the procedures in subsection (e).

   Inserted: (2) Enforcement authority.--For purposes of taking enforcement action under paragraph (1), a designated financial market utility shall be subject to, and the Board of Governors shall have authority under the provisions of subsections (b) through (n) of section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818) in the same manner and to the same extent as if the designated financial market utility was an insured depository institution and the Board of Governors was the appropriate Federal banking agency for such insured depository institution.

   Inserted: (3) Prompt notice to supervisory agency of enforcement action.--Within 24 hours of taking an enforcement action under this subsection, the Board of Governors shall provide written notice to the designated financial market utility's Supervisory Agency containing a detailed analysis of the action of the Board of Governors, with supporting documentation included.

   Inserted: (g) Rule of Construction.--Nothing in this section shall be construed to make the provisions of subsections (c), (d), (e), or (f) applicable with respect to any designated financial market utility for which the Supervisory Agency is the Commodity Futures Trading Commission or the Securities and Exchange Commission.

   Inserted: SEC. 808. EXAMINATION OF AND ENFORCEMENT ACTIONS AGAINST FINANCIAL INSTITUTIONS SUBJECT TO STANDARDS FOR DESIGNATED ACTIVITIES.

   Inserted: (a) Examination.--The primary financial regulatory agency is authorized to examine a financial institution subject to the standards prescribed by the Board of Governors for a designated activity in order to determine the following:

   Inserted: (1) The nature and scope of the designated activities engaged in by the financial institution.

   Inserted: (2) The financial and operational risks the designated activities engaged in by the financial institution may pose to the safety and soundness of the financial institution.

   Inserted: (3) The financial and operational risks the designated activities engaged in by the financial institution may pose to other financial institutions, critical markets, or the broader financial system.

   Inserted: (4) The resources available to and the capabilities of the financial institution to monitor and control the risks described in paragraphs (2) and (3).

   Inserted: (5) The financial institution's compliance with this title and the rules and orders prescribed by the Board of Governors under this title.

   Inserted: (b) Enforcement.--For purposes of enforcing the provisions of this section, and the rules and orders prescribed by the Board of Governors under this section, a financial institution subject to the standards prescribed by the Board of Governors for a designated activity shall be subject to, and the primary financial regulatory agency shall have authority under the provisions of subsections (b) through (n) of section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818) in the same manner and to the same extent as if the financial institution was an insured depository institution and the primary financial regulatory agency was the appropriate Federal banking agency for such insured depository institution.

   Inserted: (c) Technical Assistance.--The Board of Governors shall consult with and provide such technical assistance as may be required by the primary financial regulatory agencies to ensure that the rules and orders prescribed by the Board of Governors with respect to a designated activity under this title are interpreted and applied in as consistent and uniform a manner as practicable.

   Inserted: (d) Delegation.--

   Inserted: (1) Examination.--

   Inserted: (A) Request to board of governors.--The primary financial regulatory agency may request the Board of Governors to conduct or participate in an examination of a financial institution subject to the standards prescribed by the Board of Governors for a designated activity in order to assess the compliance of such financial institution with--

   Inserted: (i) this title; or

   Inserted: (ii) the rules or orders prescribed by the Board of Governors under this title.

   Inserted: (B) Examination by board of governors.--Upon receipt of an appropriate written request, the Board of Governors will conduct the examination under such terms and conditions to which the Board of Governors and the primary financial regulatory agency mutually agree.

   Inserted: (2) Enforcement.--

   Inserted: (A) Request to board of governors.--The primary financial regulatory agency may request the Board of Governors to enforce this title or the rules or orders prescribed by the Board of Governors under this title against a financial institution that is subject to the standards prescribed by the Board of Governors for a designated activity.

   Inserted: (B) Enforcement by board of governors.--Upon receipt of an appropriate written request, the Board of Governors shall determine whether an enforcement action is warranted, and, if so, it shall enforce compliance with this title or the rules or orders prescribed by the Board of Governors with respect to a designated activity under this title and, if so, the financial institution shall be subject to, and the Board of Governors shall have authority under the provisions of subsections (b) through (n) of section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818) in the same manner and to the same extent as if the financial institution was an insured depository institution and the Board of Governors was the appropriate Federal banking agency for such insured depository institution

   Inserted: (e) Back-up Authority of the Board of Governors.--

   Inserted: (1) Examination and enforcement.--Notwithstanding any other provision of law, the Board of Governors may--

   Inserted: (A) conduct an examination of the type described in subsection (a) of any financial institution that is subject to the standards prescribed by the Board of Governors for a designated activity; and

   Inserted: (B) enforce the provisions of this title or any rules or orders prescribed by the Board of Governors under this title against any financial institution that is subject to the standards prescribed by the Board of Governors for a designated activity.

   Inserted: (2) Limitations.--

   Inserted: (A) Examination.--The Board of Governors may exercise the authority described in paragraph (1)(A) only if the Board of Governors has--

   Inserted: (i) reasonable cause to believe that a financial institution is not in compliance with this title or the rules or orders prescribed by the Board of Governors under this title with respect to a designated activity;

   Inserted: (ii) notified, in writing, the primary financial regulatory agency and the Council of its belief under clause (i) with supporting documentation included;

   Inserted: (iii) requested the primary financial regulatory agency to conduct a prompt examination of the financial institution; and

   Inserted: (iv) either--

   Inserted: (I) not been afforded a reasonable opportunity to participate in an examination of the financial institution by the primary financial regulatory agency within 30 days after the date of the Board's notification under clause (ii); or

   Inserted: (II) reasonable cause to believe that the financial institution's noncompliance with this title or the rules or orders prescribed by the Board of Governors with respect to a designated activity under this title poses a substantial risk to other financial institutions, critical markets, or the broader financial system, subject to the Board of Governors affording the primary financial regulatory agency a reasonable opportunity to participate in the examination.

   Inserted: (B) Enforcement.--The Board of Governors may exercise the authority described in paragraph (1)(B) only if the Board of Governors has--

   Inserted: (i) reasonable cause to believe that a financial institution is not in compliance with this title or the rules or orders prescribed by the Board of Governors under this title with respect to a designated activity;

   Inserted: (ii) notified, in writing, the primary financial regulatory agency and the Council of its belief under clause (i) with supporting documentation included and with a recommendation that the primary financial regulatory agency take 1 or more specific enforcement actions against the financial institution; and

   Inserted: (iii) either--

   Inserted: (I) not been notified, in writing, by the primary financial regulatory agency of the commencement of an enforcement action recommended by the Board of Governors against the financial institution within 60 days from the date of the notification under clause (ii); or

   Inserted: (II) reasonable cause to believe that the financial institution's noncompliance with this title or the rules or orders prescribed by the Board of Governors with respect to a designated activity under this title poses a substantial risk to other financial institutions, critical markets, or the broader financial system, subject to the Board of Governors notifying the primary financial regulatory agency of the Board's enforcement action.

   Inserted: (3) Enforcement provisions.--For purposes of taking enforcement action under paragraph (1), the financial institution shall be subject to, and the Board of Governors shall have authority under the provisions of subsections (b) through (n) of section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818) in the same manner and to the same extent as if the financial institution was an insured depository institution and the Board of Governors was the appropriate Federal banking agency for such insured depository institution.

   Inserted: SEC. 809. REQUESTS FOR INFORMATION, REPORTS, OR RECORDS.

   Inserted: (a) Information To Assess Systemic Importance.--

   Inserted: (1) Financial market utilities.--The Council is authorized to require any financial market utility to submit such information as the Council may require for the sole purpose of assessing whether that financial market utility is systemically important, but only if the Council has reasonable cause to believe that the financial market utility meets the standards for systemic importance set forth in section 804.

   Inserted: (2) Financial institutions engaged in payment, clearing, or settlement activities.--The Council is authorized to require any financial institution to submit such information as the Council may require for the sole purpose of assessing whether any payment, clearing, or settlement activity engaged in or supported by a financial institution is systemically important, but only if the Council has reasonable cause to believe that the activity meets the standards for systemic importance set forth in section 804.

   Inserted: (b) Reporting After Designation.--

   Inserted: (1) Designated financial market utilities.--The Board of Governors and the Council may require a designated financial market utility to submit reports or data to the Board of Governors and the Council in such frequency and form as deemed necessary by the Board of Governors and the Council in order to assess the safety and soundness of the utility and the systemic risk that the utility's operations pose to the financial system.

   Inserted: (2) Financial institutions subject to standards designated activities.--The Board of Governors and the Council may require 1 or more financial institutions subject to the standards prescribed by the Board of Governors for a designated activity to submit, in such frequency and form as deemed necessary by the Board of Governors and the Council, reports and data to the Board of Governors and the Council solely with respect to the conduct of the designated activity and solely to assess whether--

   Inserted: (A) the rules, orders, or standards prescribed by the Board of Governors with respect to the designated activity appropriately address the risks to the financial system presented by such activity; and

   Inserted: (B) the financial institutions are in compliance with this title and the rules and orders prescribed by the Board of Governors under this title with respect to the designated activity.

   Inserted: (c) Coordination With Appropriate Federal Supervisory Agency.--

   Inserted: (1) Advance coordination.--Before directly requesting any material information from, or imposing reporting or recordkeeping requirements on, any financial market utility or any financial institution engaged in a payment, clearing, or settlement activity as provided in subsections (a) and (b), the Board of Governors and the Council shall coordinate with the Supervisory Agency for a financial market utility or the primary financial regulatory agency for a financial institution to determine if the information is available from or may be obtained by the agency in the form, format, or detail required by the Board of Governors and the Council.

   Inserted: (2) Supervisory reports.--For purposes of the coordination required by paragraph (1), and notwithstanding any other provision of law, the Supervisory Agency, the primary financial regulatory agency, and the Board of Governors are authorized to disclose to each other and the Council copies of its examination reports or similar reports regarding any financial market utility or any financial institution engaged in payment, clearing, or settlement activities.

   Inserted: (d) Timing of Response From Appropriate Federal Supervisory Agency.--

   Inserted: (1) In general.--If the information, report, records, or data requested by the Board of Governors or the Council under subsection (c)(1) are not provided in full by the Supervisory Agency or the primary financial regulatory agency in less than 15 days after the date on which the material is requested, the Board of Governors or the Council may request the information or impose recordkeeping or reporting requirements directly on such persons as provided in subsections (a) and (b) with notice to the agency.

   Inserted: (2) Rule of construction.--Nothing in this section authorizes or shall be construed to authorize the Board of Governors or the Council to prescribe any recordkeeping or reporting requirements on designated financial market utilities for which the Supervisory Agency is the Commodity Futures Trading Commission or the Securities and Exchange Commission.

   Inserted: (e) Sharing of Information.--

   Inserted: (1) Material concerns.--Notwithstanding any other provision of law, the Board of Governors, the Council, the primary financial regulatory agency, and any Supervisory Agency are authorized to--

   Inserted: (A) promptly notify each other of material concerns about a designated financial market utility or any financial institution engaged in designated activities; and

   Inserted: (B) share appropriate reports, information or data relating to such concerns.

   Inserted: (2) Other information.--Notwithstanding any other provision of law, the Board of Governors, the Council, the primary financial regulatory agency, or any Supervisory Agency may, under such terms and conditions as it deems appropriate, provide confidential supervisory information and other information obtained under this title to other persons it deems appropriate, including the Secretary, State financial institution supervisory agencies, foreign financial supervisors, foreign central banks, and foreign finance ministries, subject to reasonable assurances of confidentiality.

   Inserted: (f) Privilege Maintained.--The Board of Governors, the Council, the primary financial regulatory agency, and any Supervisory Agency providing reports or data under this section shall not be deemed to have waived any privilege applicable to those reports or data, or any portion thereof, by providing the reports or data under this section or by permitting the reports or data, or any copies thereof, to be used pursuant to this section.

   Inserted: (g) Disclosure Exemption.--Information obtained by the Board of Governors or the Council under this section and any materials prepared by the Board of Governors or the Council regarding its assessment of the systemic importance of financial market utilities or any payment, clearing, or settlement activities engaged in by financial institutions, and in connection with its supervision of designated financial market utilities and designated activities, shall be confidential supervisory information exempt from disclosure under section 552 of title 5, United States Code. For purposes of such section 552, this subsection shall be considered a statute described in subsection (b)(3) of such section 552.

   Inserted: SEC. 810. RULEMAKING.

   Inserted: The Board of Governors and the Council are authorized to prescribe such rules and issue such orders as may be necessary to administer and carry out the authorities and duties granted to the Board of Governors or the Council, respectively, under this title and prevent evasions thereof.

   Inserted: SEC. 811. OTHER AUTHORITY.

   Inserted: Unless otherwise provided by its terms, this title does not divest any primary financial regulatory agency, any Supervisory Agency, or any other Federal or State agency, of any authority derived from any other applicable law, except that any standards prescribed by the Board of Governors under section 805 shall supersede any less stringent requirements established under other authority to the extent of any conflict.

   Inserted: SEC. 812. EFFECTIVE DATE.

   Inserted: This title is effective as of the date of enactment of this Act.

   Original wording

   Strike title VIII and insert the following:

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As printed