124 STAT. 1709 PUBLIC LAW 111–203—JULY 21, 2010 ‘‘(A) IN GENERAL.—It shall be unlawful for a swap dealer or major swap participant— ‘‘(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 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 swap dealer that acts as an advisor to a Special Entity shall make reasonable efforts to obtain such information as is necessary to make a reasonable determination that any swap recommended by the swap dealer is in the best interests of the Special Entity, including information relating to— ‘‘(i) the financial status of the Special Entity; ‘‘(ii) the tax status of the Special Entity; ‘‘(iii) the investment or financing objectives of the Special Entity; and ‘‘(iv) any other information that the Commission may prescribe by rule or regulation. ‘‘(5) SPECIAL REQUIREMENTS FOR SWAP DEALERS AS COUNTERPARTIES TO SPECIAL ENTITIES.— ‘‘(A) Any swap dealer or major swap participant that offers to enter or enters into a swap with a Special Entity shall— ‘‘(i) comply with any duty established by the Commission for a swap dealer or major swap partici- pant, with respect to a counterparty that is an eligible contract participant within the meaning of subclause (I) or (II) of clause (vii) of section 1a(18) of this Act, that requires the swap dealer or major swap partici- pant to have a reasonable basis to believe that the counterparty that is a Special Entity has an inde- pendent representative that— ‘‘(I) has sufficient knowledge to evaluate the transaction and risks; ‘‘(II) is not subject to a statutory disqualifica- tion; ‘‘(III) is independent of the swap dealer or major swap participant; ‘‘(IV) undertakes a duty to act in the best interests of the counterparty it represents; ‘‘(V) makes appropriate disclosures; ‘‘(VI) will provide written representations to the Special Entity regarding fair pricing and the appropriateness of the transaction; and ‘‘(VII) in the case of employee benefit plans subject to the Employee Retirement Income Secu- rity act of 1974, is a fiduciary as defined in section 3 of that Act (29 U.S.C. 1002); and
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