15 U.S.C. § 8306 — Determining status of novel derivative

Page 2416 TITLE 15—COMMERCE AND TRADE § 8306 ter 53 of Title 12, Banks and Banking. For complete classification of title II to the Code, see Tables. For the date on which this Act is effective, referred to in subsec. (h), see section 4 of Pub. L. 111–203, set out as an Effective Date note under section 5301 of Title 12, Banks and Banking, and section 754 of Pub. L. 111–203, set out as an Effective Date of 2010 Amendment note under section 1a of Title 7, Agriculture. This title, referred to in subsec. (i)(3), is title VII of Pub. L. 111–203, July 21, 2010, 124 Stat. 1641, known as the Wall Street Transparency and Accountability Act of 2010, which enacted this chapter and enacted and amended numerous other sections and notes in the Code. For complete classification of title VII to the Code, see Short Title note set out under section 8301 of this title and Tables. This Act, referred to in subsec. (l), is Pub. L. 111–203, July 21, 2010, 124 Stat. 1376, known as the Dodd-Frank Wall Street Reform and Consumer Protection Act. For complete classification of this Act to the Code, see Short Title note set out under section 5301 of Title 12, Banks and Banking, and Tables. Title I, referred to in subsec. (l), is title I of Pub. L. 111–203, July 21, 2010, 124 Stat. 1391, known as the Finan- cial Stability Act of 2010, which is classified principally to subchapter I (§ 5311 et seq.) of chapter 53 of Title 12, Banks and Banking. For complete classification of title I to the Code, see Short Title note set out under section 5301 of Title 12 and Tables. Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, referred to in subsec. (m), is section 619 of Pub. L. 111–203, which enacted sec- tion 1851 of Title 12, Banks and Banking. AMENDMENTS 2014—Subsec. (b)(2)(B). Pub. L. 113–235, § 630(1)(A), sub- stituted ‘‘covered depository institution’’ for ‘‘insured depository institution’’. Subsec. (b)(3). Pub. L. 113–235, § 630(1)(B), added par. (3). Subsec. (c). Pub. L. 113–235, § 630(2), in heading, sub- stituted ‘‘covered’’ for ‘‘insured’’ and, in text, sub- stituted ‘‘a covered’’ for ‘‘an insured’’, ‘‘such covered’’ for ‘‘such insured’’, and ‘‘savings and loan holding com- pany, or foreign banking organization (as such term is defined under Regulation K of the Board of Governors of the Federal Reserve System (12 CFR 211.21(o)))’’ for ‘‘or savings and loan holding company’’. Subsec. (d). Pub. L. 113–235, § 630(3), amended subsec. (d) generally. Prior to amendment, text read as follows: ‘‘The prohibition in subsection (a) shall apply to any insured depository institution unless the insured depos- itory institution limits its swap or security-based swap activities to: ‘‘(1) Hedging and other similar risk mitigating ac- tivities directly related to the insured depository in- stitution’s activities. ‘‘(2) Acting as a swaps entity for swaps or security- based swaps involving rates or reference assets that are permissible for investment by a national bank under the paragraph designated as ‘Seventh.’ of sec- tion 24 of title 12, other than as described in para- graph (3). ‘‘(3) LIMITATION ON CREDIT DEFAULT SWAPS.—Acting as a swaps entity for credit default swaps, including swaps or security-based swaps referencing the credit risk of asset-backed securities as defined in section 3(a)(77) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(77)) (as amended by this Act) shall not be considered a bank permissible activity for pur- poses of subsection (d)(2) unless such swaps or secu- rity-based swaps are cleared by a derivatives clearing organization (as such term is defined in section la of the Commodity Exchange Act (7 U.S.C. la)) or a clear- ing agency (as such term is defined in section 3 of the Securities Exchange Act (15 U.S.C. 78c)) that is reg- istered, or exempt from registration, as a derivatives clearing organization under the Commodity Ex- change Act or as a clearing agency under the Securi- ties Exchange Act, respectively.’’ Subsec. (e). Pub. L. 113–235, § 630(4), substituted ‘‘a covered’’ for ‘‘an insured’’. Subsec. (f). Pub. L. 113–235, § 630(5), substituted ‘‘a covered depository’’ for ‘‘an insured depository’’ and substituted ‘‘the covered depository’’ for ‘‘the insured depository’’ wherever appearing. Statutory Notes and Related Subsidiaries DEFINITIONS For definitions of terms used in this section, see sec- tion 5301 of Title 12, Banks and Banking. § 8306. Determining status of novel derivative products (a) Process for determining the status of a novel derivative product (1) Notice (A) In general Any person filing a proposal to list or trade a novel derivative product that may have elements of both securities and con- tracts of sale of a commodity for future de- livery (or options on such contracts or op- tions on commodities) may concurrently provide notice and furnish a copy of such fil- ing with the Securities and Exchange Com- mission and the Commodity Futures Trad- ing Commission. Any such notice shall state that notice has been made with both Com- missions. (B) Notification If no concurrent notice is made pursuant to subparagraph (A), within 5 business days after determining that a proposal that seeks to list or trade a novel derivative product may have elements of both securities and contracts of sale of a commodity for future delivery (or options on such contracts or op- tions on commodities), the Securities and Exchange Commission or the Commodity Futures Trading Commission, as applicable, shall notify the other Commission and pro- vide a copy of such filing to the other Com- mission. (2) Request for determination (A) In general No later than 21 days after receipt of a no- tice under paragraph (1), or upon its own ini- tiative if no such notice is received, the Commodity Futures Trading Commission may request that the Securities and Ex- change Commission issue a determination as to whether a product is a security, as defined in section 78c(a)(10) of this title. (B) Request No later than 21 days after receipt of a no- tice under paragraph (1), or upon its own ini- tiative if no such notice is received, the Se- curities and Exchange Commission may re- quest that the Commodity Futures Trading Commission issue a determination as to whether a product is a contract of sale of a commodity for future delivery, an option on such a contract, or an option on a com- modity subject to the Commodity Futures Trading Commission’s exclusive jurisdiction under section 2(a)(1)(A) of title 7. Page 2417 TITLE 15—COMMERCE AND TRADE § 8307 1 See References in Text note below. (C) Requirement relating to request A request under subparagraph (A) or (B) shall be made by submitting such request, in writing, to the Securities and Exchange Commission or the Commodity Futures Trading Commission, as applicable. (D) Effect Nothing in this paragraph shall be con- strued to prevent— (i) the Commodity Futures Trading Com- mission from requesting that the Securi- ties and Exchange Commission grant an exemption pursuant to section 78mm(a)(1) of this title with respect to a product that is the subject of a filing under paragraph (1); or (ii) the Securities and Exchange Com- mission from requesting that the Com- modity Futures Trading Commission grant an exemption pursuant to section 6(c)(1) of title 7 with respect to a product that is the subject of a filing under paragraph (1), Provided, however, that nothing in this sub- paragraph shall be construed to require the Commodity Futures Trading Commission or the Securities and Exchange Commission to issue an exemption requested pursuant to this subparagraph; provided further, That an order granting or denying an exemption de- scribed in this subparagraph and issued under paragraph (3)(B) shall not be subject to judicial review pursuant to subsection (b). (E) Withdrawal of request A request under subparagraph (A) or (B) may be withdrawn by the Commission mak- ing the request at any time prior to a deter- mination being made pursuant to paragraph (3) for any reason by providing written no- tice to the head of the other Commission. (3) Determination Notwithstanding any other provision of law, no later than 120 days after the date of receipt of a request— (A) under subparagraph (A) or (B) of para- graph (2), unless such request has been with- drawn pursuant to paragraph (2)(E), the Se- curities and Exchange Commission or the Commodity Futures Trading Commission, as applicable, shall, by order, issue the deter- mination requested in subparagraph (A) or (B) of paragraph (2), as applicable, and the reasons therefor; or (B) under paragraph (2)(D), unless such re- quest has been withdrawn, the Securities and Exchange Commission or the Com- modity Futures Trading Commission, as ap- plicable, shall grant an exemption or provide reasons for not granting such exemption, provided that any decision by the Securities and Exchange Commission not to grant such exemption shall not be reviewable under sec- tion 78y of this title. (b) Judicial resolution (1) In general The Commodity Futures Trading Commis- sion or the Securities and Exchange Commis- sion may petition the United States Court of Appeals for the District of Columbia Circuit for review of a final order of the other Com- mission issued pursuant to subsection (a)(3)(A), with respect to a novel derivative product that may have elements of both secu- rities and contracts of sale of a commodity for future delivery (or options on such contracts or options on commodities) that it believes af- fects its statutory jurisdiction within 60 days after the date of entry of such order, a written petition requesting a review of the order. Any such proceeding shall be expedited by the Court of Appeals. (2) Transmittal of petition and record A copy of a petition described in paragraph (1) shall be transmitted not later than 1 busi- ness day after filing by the complaining Com- mission to the responding Commission. On re- ceipt of the petition, the responding Commis- sion shall file with the court a copy of the order under review and any documents re- ferred to therein, and any other materials pre- scribed by the court. (3) Standard of review The court, in considering a petition filed pursuant to paragraph (1), shall give no def- erence to, or presumption in favor of, the views of either Commission. (4) Judicial stay The filing of a petition by the complaining Commission pursuant to paragraph (1) shall operate as a stay of the order, until the date on which the determination of the court is final (including any appeal of the determina- tion). (Pub. L. 111–203, title VII, § 718, July 21, 2010, 124 Stat. 1652.) Statutory Notes and Related Subsidiaries DEFINITION For definition of ‘‘including’’ as used in this section, see section 5301 of Title 12, Banks and Banking. § 8307. Studies (a) Study on effects of position limits on trading on exchanges in the United States (1) Study The Commodity Futures Trading Commis- sion, in consultation with each entity that is a designated contract market under the Com- modity Exchange Act [7 U.S.C. 1 et seq.], shall conduct a study of the effects (if any) of the position limits imposed pursuant to the other provisions of this title 1 on excessive specula- tion and on the movement of transactions from exchanges in the United States to trad- ing venues outside the United States. (2) Report to the Congress Within 12 months after the imposition of po- sition limits pursuant to the other provisions of this title,1 the Commodity Futures Trading Commission, in consultation with each entity that is a designated contract market under the Commodity Exchange Act, shall submit to