Page:United States Statutes at Large Volume 124.djvu/1816

 124 STAT. 1790 PUBLIC LAW 111–203—JULY 21, 2010 ‘‘(v) any endowment, including an endowment that is an organization described in section 501(c)(3) of the Internal Revenue Code of 1986. ‘‘(3) BUSINESS CONDUCT REQUIREMENTS.—Business conduct requirements adopted by the Commission shall— ‘‘(A) establish a duty for a security-based swap dealer or major security-based swap participant to verify that any counterparty meets the eligibility standards for an eligible contract participant; ‘‘(B) require disclosure by the security-based swap dealer or major security-based swap participant to any counterparty to the transaction (other than a security- based swap dealer, major security-based swap participant, security-based swap dealer, or major security-based swap participant) of— ‘‘(i) information about the material risks and characteristics of the security-based swap; ‘‘(ii) any material incentives or conflicts of interest that the security-based swap dealer or major security- based swap participant may have in connection with the security-based swap; and ‘‘(iii)(I) for cleared security-based swaps, upon the request of the counterparty, receipt of the daily mark of the transaction from the appropriate derivatives clearing organization; and ‘‘(II) for uncleared security-based swaps, receipt of the daily mark of the transaction from the security- based swap dealer or the major security-based swap participant; ‘‘(C) establish a duty for a security-based swap dealer or major security-based swap participant to communicate in a fair and balanced manner based on principles of fair dealing and good faith; and ‘‘(D) establish such other standards and requirements as the Commission may determine are appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of this Act. ‘‘(4) SPECIAL REQUIREMENTS FOR SECURITY-BASED SWAP DEALERS ACTING AS ADVISORS.— ‘‘(A) IN GENERAL.—It shall be unlawful for a security- based swap dealer or major security-based swap partici- pant— ‘‘(i) to employ any device, scheme, or artifice to defraud any special entity or prospective customer who is a special entity; ‘‘(ii) to engage in any transaction, practice, or course of business that operates as a fraud or deceit on any special entity or prospective customer who is a special entity; or ‘‘(iii) to engage in any act, practice, or course of business that is fraudulent, deceptive, or manipulative. ‘‘(B) DUTY.—Any security-based swap dealer that acts as an advisor to a special entity shall have a duty to act in the best interests of the special entity. ‘‘(C) REASONABLE EFFORTS.—Any security-based swap dealer that acts as an advisor to a special entity shall make reasonable efforts to obtain such information as is Verification.