S.Amdt. 4138

SA 4138. Mr. LEVIN (for himself, Mr. Kaufman, Mr. Reed, and Mrs.
McCaskill) submitted an amendment intended to be proposed to amendment
SA 3789 proposed by Mr. Brownback (for himself, Mr. Bond, and Mr.
Inhofe) to the 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:

At the end of the amendment, add the following:

SEC. __. 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:

[[Page S4010]]

``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.--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.''.
______