Derivatives Supervision Act of 1994

Summary

Derivatives Supervision Act of 1994 - Prohibits a regulated entity from engaging in derivatives transactions either for its own account or for any speculative purpose. (Sec. 4) Requires the Federal financial institutions regulatory agencies to jointly establish principles and standards for the supervision of regulated entities and major dealers engaged in derivatives financial instruments activities (including capital, accounting, disclosures, and internal controls structures). (Sec. 5) Includes specified disclosure requirements in statutory calls of condition. (Sec. 6) Prohibits a regulated entity or a major dealer from engaging in derivatives activities unless: (1) it has a prescribed management control plan (including direct oversight by senior executive officers); and (2) its board of directors periodically reviews compliance with such plan. (Sec. 7) Amends the Securities Exchange Act of 1934 to bring within the jurisdiction of the Securities and Exchange Commission (SEC) any major dealer whose derivative financial instruments activities are not subject to regulation by a Federal financial institutions regulatory agency. (Sec. 8) Directs the Secretary of the Treasury and the Chairman of the Board of Governors of the Federal Reserve System to encourage governments, central banks, and regulatory authorities of other industrialized countries to implement comparable supervisory schemes for derivative financial instruments transactions. (Sec. 9) Amends the Bank Holding Company Act of 1956 to: (1) permit a subsidiary of a bank holding company to conduct derivative activities for its own account if it is neither an insured depository institution nor a subsidiary of an insured depository institution; (2) prohibit the capital of such subsidiary from being included in the consolidated capital of its parent bank holding company for purposes of determining such company's compliance with capital requirements; and (3) direct the Board of Governors of the Federal Reserve System to promulgate regulations for such a subsidiary consistent with the mandate for regulatory coordination. (Sec. 10) Requires the Federal financial institutions regulatory agencies to promulgate certain regulations governing regulated entities and major dealers in order to reduce the risk of potential systemic financial market failure due to derivatives activities. (Sec. 11) Amends the following Acts to reflect the provisions of this Act: (1) the Federal Deposit Insurance Act; (2) the Federal Deposit Insurance Corporation Improvement Act; and (3) the Federal bankruptcy code. (Sec. 12) Requires each Federal financial institutions regulatory agency to issue consistent regulations governing derivative financial instruments activities for purposes of implementing this Act.

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3 official files

• Introduced in Senate (text)

  Introduced in Senate · EN · 18 July 1994

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• Introduced in Senate (PDF)

  Introduced in Senate · EN · 18 July 1994

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• Introduced in Senate

  summary · EN · 18 July 1994

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