7 U.S.C. § 1b — Requirements of Secretary of the Treasury regarding exemption of foreign exchange swaps and foreign exchange forwards from definition of the term “swap”

(a) Required considerations Before deciding whether to exempt foreign exchange swaps and foreign exchange forwards from the legal definition of "swap," the Secretary of the Treasury (called the "Secretary" in this section) must consider five things: (1) Whether requiring these trades to go through standard trading and clearing rules would create systemic risk, lower transparency, or threaten the financial stability of the United States. (2) Whether foreign exchange swaps and forwards are already covered by a regulatory scheme materially comparable to the one this chapter sets up for other classes of swaps. (3) How much adequate supervision — including capital and margin requirements — bank regulators already provide for participants in the foreign exchange market. (4) Whether adequate payment and settlement systems already exist for these trades. (5) Whether an exemption could be used to evade regulatory requirements that would otherwise apply. (b) Determination If the Secretary decides to exempt foreign exchange swaps and forwards from the "swap" definition, the Secretary must send the appropriate committees of Congress a written determination containing: (1) An explanation of why foreign exchange swaps and forwards are different enough, in kind, from other classes of swaps that regulating them the same way as other swaps would not fit them well. (2) A description of the specific, objective differences between foreign exchange swaps and forwards and standard swaps that justify giving them exempt status. (c) Effect of determination Even if the Secretary makes this determination, it does not exempt any foreign exchange swap or forward that is traded on a designated contract market or swap execution facility from this chapter's rules against fraud and manipulation.