Risk Management Improvement and Derivatives Oversight Act of 1995

Summary

TABLE OF CONTENTS: Title I: Federal Derivatives Commission Title II: Supervisory Improvements Title III: Financial Institution Insolvency Reforms Title IV: Derivatives Dealer Self-Regulation Title V: Miscellaneous Risk Management Improvement and Derivatives Oversight Act of 1995 - Title I: Federal Derivatives Commission - Establishes the Federal Derivatives Commission to establish principles and standards to improve risk management techniques and the prudent use of derivative financial instruments by financial institutions. (Sec. 105) Directs the Commission to develop training programs in risk management techniques and derivatives activities for Federal and State regulatory personnel. (Sec. 108) Directs the Commission to establish a liaison committee to encourage the application of uniform examination standards by State and Federal supervisory agencies. (Sec. 110) Directs the Chairman of the Board of Governors of the Federal Reserve System (Federal Reserve Board) to encourage governments, central banks, and regulatory authorities of other countries to work toward adopting and maintaining certain supervisory and capital standards for financial institutions engaged in derivatives activities. (Sec. 111) Mandates that insured credit unions be supervised for purposes of derivatives activities by the National Credit Union Administration under standards no less stringent than those for Federal depository institutions. Title II: Supervisory Improvements - States that failure of an institution-affiliated party engaged in derivatives activities to have adequate technical expertise may be deemed by a Federal regulatory agency to constitute an unsafe or unsound banking practice. (Sec. 203) Amends the International Banking Act of 1978 to include as a prerequisite for approval of a foreign bank office in the United States that its derivatives activities are subject to comprehensive regulation in its home country. (Sec. 204) Mandates that the Federal financial institution regulatory agencies develop the means to obtain all necessary information relating to derivatives activities (or any class of derivative financial instruments) whenever an appropriate regulatory agency determines that the information is necessary as a result of adverse market conditions or other emergency situations. Title III: Financial Institution Insolvency Reforms - Amends the Federal Deposit Insurance Act and Federal bankruptcy law to include derivative financial instruments within the definition of "swap agreement" (thereby bringing such instruments within the parameters of their conservatorship and bankruptcy guidelines). (Sec. 302) Authorizes the Federal Deposit Insurance Corporation to prescribe expanded recordkeeping requirements for qualified financial contracts (including market valuations) by insured depository institutions. Title IV: Derivatives Dealer Self-Regulation - Derivatives Dealer Self-Regulation Act of 1995 - Authorizes the Federal Reserve Board to mandate the establishment of a self-regulatory system for the supervision of derivatives dealers (a national derivatives association). Prescribes implementation guidelines. Mandates membership in such association as a prerequisite to any transaction by a derivatives dealer relating to a derivative financial instrument. Sets forth criminal penalties for violations of this Act. Authorizes the Board to: (1) modify association rules; (2) impose sanctions upon the association; and (3) expel members and remove its officers. Title V: Miscellaneous - Sets forth savings provisions.

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3 official files

• Introduced in House (text)

  Introduced in House · EN · 4 January 1995

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• Introduced in House (PDF)

  Introduced in House · EN · 4 January 1995

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• Introduced in House

  summary · EN · 4 January 1995

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