Page:United States Statutes at Large Volume 124.djvu/1676

 124 STAT. 1650 PUBLIC LAW 111–203—JULY 21, 2010 (A) FDIC INSURED INSTITUTIONS.—Al l swaps entities that are FDIC insured institutions that are put into receivership or declared insolvent as a result of swap or security-based swap activity of the swaps entities shall be subject to the termination or transfer of that swap or security-based swap activity in accordance with applicable law prescribing the treatment of those contracts. No taxpayer funds shall be used to prevent the receivership of any swap entity resulting from swap or security-based swap activity of the swaps entity. (B) INSTITUTIONS THAT POSE A SYSTEMIC RISK AND ARE SUBJECT TO HEIGHTENED PRUDENTIAL SUPERVISION AS REGU- LATED UNDER SECTION 113.—All swaps entities that are institutions that pose a systemic risk and are subject to heightened prudential supervision as regulated under sec- tion 113, that are put into receivership or declared insolvent as a result of swap or security-based swap activity of the swaps entities shall be subject to the termination or transfer of that swap or security-based swap activity in accordance with applicable law prescribing the treatment of those contracts. No taxpayer funds shall be used to prevent the receivership of any swap entity resulting from swap or security-based swap activity of the swaps entity. (C) NON-FDIC INSURED, NON-SYSTEMICALLY SIGNIFI- CANT INSTITUTIONS NOT SUBJECT TO HEIGHTENED PRUDEN- TIAL SUPERVISION AS REGULATED UNDER SECTION 113.—No taxpayer resources shall be used for the orderly liquidation of any swaps entities that are non-FDIC insured, non- systemically significant institutions not subject to height- ened prudential supervision as regulated under section 113. (2) RECOVERY OF FUNDS.—All funds expended on the termi- nation or transfer of the swap or security-based swap activity of the swaps entity shall be recovered in accordance with applicable law from the disposition of assets of such swap entity or through assessments, including on the financial sector as provided under applicable law. (3) NO LOSSES TO TAXPAYERS.—Taxpayers shall bear no losses from the exercise of any authority under this title. (j) PROHIBITION ON UNREGULATED COMBINATION OF SWAPS ENTITIES AND BANKING.—At no time following adoption of the rules in subsection (k) may a bank or bank holding company be permitted to be or become a swap entity unless it conducts its swap or security-based swap activity in compliance with such minimum standards set by its prudential regulator as are reasonably cal- culated to permit the swaps entity to conduct its swap or security- based swap activities in a safe and sound manner and mitigate systemic risk. (k) RULES.—In prescribing rules, the prudential regulator for a swaps entity shall consider the following factors: (1) The expertise and managerial strength of the swaps entity, including systems for effective oversight. (2) The financial strength of the swaps entity. (3) Systems for identifying, measuring and controlling risks arising from the swaps entity’s operations. (4) Systems for identifying, measuring and controlling the swaps entity’s participation in existing markets.