Page:United States Statutes at Large Volume 114 Part 5.djvu/499

 PUBLIC LAW 106-554—APPENDIX E 114 STAT. 2763A-459 SEC. 404. EXCLUSION OF CERTAIN IDENTIFIED BANKING PRODUCTS OFFERED BY BANKS AFTER DECEMBER 5, 2000. No provision of the Commodity Exchange Act shall apply to, and the Commodity Futures Trading Commission shall not exercise regulatory authority with respect to, an identified banking product which had not been commonly offered, entered into, or provided in the United States by any bank on or before December 5, 2000, under applicable banking law if— (1) the product has no payment indexed to the value, level, or rate of, and does not provide for the delivery of, any commodity (as defined in section la(4) of the Commodity Exchange Act); or (2) the product or commodity is otherwise excluded from the Commodity Exchange Act. SEC. 405. EXCLUSION OF CERTAIN OTHER IDENTIFIED BANKING PROD- UCTS. (a) IN GENERAL.—No provision of the Commodity Exchange Act shall apply to, and the Commodity Futures Trading Commission shall not exercise regulatory authority with respect to, a banking product if the product is a hybrid instrument that is predominantly a banking product under the predominance test set forth in subsection (b). (b) PREDOMINANCE TEST.— A hybrid instrument shall be considered to be predominantly a banking product for purposes of this section if— (1) the issuer of the hybrid instrument receives payment in full of the purchase price of the hybrid instrument substantially contemporaneously with delivery of the hybrid instrument; (2) the purchaser or holder of the hybrid instrument is not required to make under the terms of the instrument, or any arrangement referred to in the instrument, any payment to the issuer in addition to the purchase price referred to in paragraph (1), whether as margin, settlement payment, or otherwise during the life of the hybrid instrument or at maturity; (3) the issuer of the hybrid instrument is not subject by the terms of the instrument to mark-to-market margining requirements; and (4) the hybrid instrument is not marketed as a contract of sale of a commodity for future delivery (or option on such a contract) subject to the Commodity Exchange Act. (c) MARK-TO-MARKET MARGINING REQUIREMENT.—For purposes of subsection (b)(3), mark-to-market margining requirements shall not include the obligation of an issuer of a secured debt instrument to increase the amount of collateral held in pledge for the benefit of the purchaser of the secured debt instrument to secure the repayment obligations of the issuer under the secured debt instrument. SEC. 406. ADMINISTRATION OF THE PREDOMINANCE TEST. (a) IN GENERAL.—No provision of the Commodity Exchange Act shall apply to, and the Commodity Futures Trading Commission shall not regulate, a hybrid instrument, unless the Commission determines, by or under a rule issued in accordance with this section, that—

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