HR 5649 IHCommentsClose CommentsPermalink

112th CONGRESSCommentsClose CommentsPermalink

2d SessionCommentsClose CommentsPermalink

H. R. 5649CommentsClose CommentsPermalink

To amend the Commodity Exchange Act to clarify the exemptions for captive finance companies from the definition of major swap participant and from the swap clearing requirement.CommentsClose CommentsPermalink

IN THE HOUSE OF REPRESENTATIVESCommentsClose CommentsPermalink

May 8, 2012CommentsClose CommentsPermalink

Mr. SCHILLING (for himself, Mr. OWENS, and Mr. MCINTYRE) introduced the following bill; which was referred to the Committee on AgricultureCommentsClose CommentsPermalink

A BILLCommentsClose CommentsPermalink

To amend the Commodity Exchange Act to clarify the exemptions for captive finance companies from the definition of major swap participant and from the swap clearing requirement.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Manufacturing Certainty and Captive Finance Affiliate Clarification Act’.CommentsClose CommentsPermalink

SEC. 2. CLARIFICATION OF THE EXEMPTIONS FOR CAPTIVE FINANCE COMPANIES FROM THE DEFINITION OF MAJOR SWAP PARTICIPANT AND FROM THE SWAP CLEARING REQUIREMENT.

(a) Exclusion From Definition of Major Swap Participant- Section 1a(33)(D) of the Commodity Exchange Act (7 U.S.C. 1a(33)(D)) is amended to read as follows:CommentsClose CommentsPermalink





‘(D) EXCLUSION OF CERTAIN CAPTIVE FINANCE ENTITIES-CommentsClose CommentsPermalink





‘(i) IN GENERAL- The definition under this paragraph shall not include an entity whose primary business is providing financing that facilitates the sale or lease of products by or on behalf of the parent company or another subsidiary of the parent company, and uses derivatives only for the purpose of hedging underlying commercial risks in a consolidated financing and leasing portfolio, at least 90 percent of which, as of the end of its preceding fiscal year, is qualifying financing (including loans, notes, installment sales contracts, receivables, and operating and financing leases).CommentsClose CommentsPermalink





‘(ii) DEFINITIONS- In this subparagraph:CommentsClose CommentsPermalink





‘(I) QUALIFYING FINANCING- The term ‘qualifying financing’ means--CommentsClose CommentsPermalink

‘(aa) any financing or lease of, or that includes, a product; orCommentsClose CommentsPermalink

‘(bb) any financing to or for the benefit of an affiliate of the entity, a distribution entity, or any customer or affiliate of a distribution entity,CommentsClose CommentsPermalink

except that the term does not include any financing that does not facilitate the sale of a product manufactured by the entity or its affiliates, as determined by the Commission.CommentsClose CommentsPermalink





‘(II) PRODUCT- The term ‘product’ means--CommentsClose CommentsPermalink

‘(aa) any good that is manufactured or sold by an affiliate of the entity; andCommentsClose CommentsPermalink

‘(bb) any service that is provided by an affiliate of the entity.CommentsClose CommentsPermalink

‘(III) DISTRIBUTION ENTITY- The term ‘distribution entity’ means a person whose primary business is the sale, lease or servicing of a product that is manufactured by the entity or its affiliates.CommentsClose CommentsPermalink





‘(IV) AFFILIATE- The term ‘affiliate’ means, with respect to an entity--CommentsClose CommentsPermalink

‘(aa) a person that reports information or prepares financial statements on a consolidated basis with the entity, or for which a parent company reports information or prepares financial statements on a consolidated basis for the person and the entity; orCommentsClose CommentsPermalink

‘(bb) a person of which the entity or the parent of the entity holds 50 percent or more of the equity interests.CommentsClose CommentsPermalink

‘(V) PERSON- The term ‘person’ means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.’.CommentsClose CommentsPermalink





(b) Exclusion From Swap Clearing Requirement- Section 2(h)(7)(C)(iii) of such Act (7 U.S.C. 2(h)(7)(C)(iii)) is amended to read as follows:CommentsClose CommentsPermalink





‘(iii) EXCLUSION OF CERTAIN CAPTIVE FINANCE ENTITIES- Such term shall not include an entity excluded from the definition of major swap participant by reason of section 1a(33)(D).’.CommentsClose CommentsPermalink

SEC. 3. EFFECTIVE DATE.

The amendments made by this Act shall take effect as if they had been included in subtitle A of title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act.CommentsClose CommentsPermalink