124 STAT. 1685 PUBLIC LAW 111–203—JULY 21, 2010 ‘‘(A) apply only to a swap between a counterparty and a swap dealer or major swap participant that is not sub- mitted for clearing to a derivatives clearing organization; and ‘‘(B)(i) not apply to variation margin payments; or ‘‘(ii) not preclude any commercial arrangement regarding— ‘‘(I) the investment of segregated funds or other property that may only be invested in such investments as the Commission may permit by rule or regulation; and ‘‘(II) the related allocation of gains and losses resulting from any investment of the segregated funds or other property. ‘‘(3) USE OF INDEPENDENT THIRD-PARTY CUSTODIANS.—The segregated account described in paragraph (1) shall be— ‘‘(A) carried by an independent third-party custodian; and ‘‘(B) designated as a segregated account for and on behalf of the counterparty. ‘‘(4) REPORTING REQUIREMENT.—If the counterparty does not choose to require segregation of the funds or other property supplied to margin, guarantee, or secure the obligations of the counterparty, the swap dealer or major swap participant shall report to the counterparty of the swap dealer or major swap participant on a quarterly basis that the back office procedures of the swap dealer or major swap participant relating to margin and collateral requirements are in compli- ance with the agreement of the counterparties.’’. SEC. 725. DERIVATIVES CLEARING ORGANIZATIONS. (a) REGISTRATION REQUIREMENT.—Section 5b of the Commodity Exchange Act (7 U.S.C. 7a–1) is amended by striking subsections (a) and (b) and inserting the following: ‘‘(a) REGISTRATION REQUIREMENT.— ‘‘(1) IN GENERAL.—Except as provided in paragraph (2), it shall be unlawful for a derivatives clearing organization, directly or indirectly, to make use of the mails or any means or instrumentality of interstate commerce to perform the func- tions of a derivatives clearing organization with respect to— ‘‘(A) a contract of sale of a commodity for future delivery (or an option on the contract of sale) or option on a commodity, in each case, unless the contract or option is— ‘‘(i) excluded from this Act by subsection (a)(1)(C)(i), (c), or (f) of section 2; or ‘‘(ii) a security futures product cleared by a clearing agency registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.); or ‘‘(B) a swap. ‘‘(2) EXCEPTION.—Paragraph (1) shall not apply to a deriva- tives clearing organization that is registered with the Commis- sion. ‘‘(b) VOLUNTARY REGISTRATION.—A person that clears 1 or more agreements, contracts, or transactions that are not required to Contracts.
