124 STAT. 1776 PUBLIC LAW 111–203—JULY 21, 2010 has the right to require segregation of the funds of other property supplied to margin, guarantee, or secure the obligations of the counterparty. ‘‘(B) SEGREGATION AND MAINTENANCE OF FUNDS.—At the request of a counterparty to a security-based swap that provides funds or other property to a security-based swap dealer or major security-based swap participant to margin, guarantee, or secure the obligations of the counterparty, the security-based swap dealer or major secu- rity-based swap participant shall— ‘‘(i) segregate the funds or other property for the benefit of the counterparty; and ‘‘(ii) in accordance with such rules and regulations as the Commission may promulgate, maintain the funds or other property in a segregated account sepa- rate from the assets and other interests of the security- based swap dealer or major security-based swap participant. ‘‘(2) APPLICABILITY.—The requirements described in para- graph (1) shall— ‘‘(A) apply only to a security-based swap between a counterparty and a security-based swap dealer or major security-based swap participant that is not submitted for clearing to a clearing agency; 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 security-based swap dealer or major secu- rity-based swap participant shall report to the counterparty of the security-based swap dealer or major security-based swap participant on a quarterly basis that the back office procedures of the security-based swap dealer or major security-based swap participant relating to margin and collateral requirements are in compliance with the agreement of the counterparties. ‘‘(g) BANKRUPTCY.—A security-based swap, as defined in section 3(a)(68) shall be considered to be a security as such term is used in section 101(53A)(B) and subchapter III of title 11, United States Code. An account that holds a security-based swap, other than a portfolio margining account referred to in section 15(c)(3)(C) shall be considered to be a securities account, as that term is defined in section 741 of title 11, United States Code. The definitions Applicability.
