FACTBOX: Keys to House financial regulation reform bill

(Reuters) - The House of Representatives passed historic legislation on Friday to overhaul financial regulation.

Below is a summary of the 1,279-page bill's provisions.

MANAGING SYSTEMIC RISK

* Establishes inter-agency Financial Services Oversight Council, with staff and funding, chaired by Treasury secretary

* Council could tighten regulatory screws on high-risk firms due to their "material financial distress" or "nature, scope, size, scale, concentration and interconnectedness"

* Council members include Federal Reserve, Securities and Exchange Commission, Commodity Futures Trading Commission, Federal Deposit Insurance Corp, other bank supervisors

* Firms' debt-to-equity ratio could be capped at 15-to-1, credit exposure to unaffiliated companies limited to 25 percent of capital stock, among balance-sheet strengthening steps

* Firms could be ordered to hold contingent capital, or long-term hybrid debt convertible to equity in emergencies

* In extreme cases, firms could be ordered to restructure, restrict executive pay, sell businesses, or otherwise break up

* Treasury secretary would have to approve an order to divest assets of more than $10 billion; president would have to approve orders involving more than $100 billion

* Risky firms would undergo annual "stress tests" and submit "living wills" on how firms could be unwound quickly

* For first time, Federal Reserve monetary policy would be subjected to audits by congressional watchdog

DEALING WITH TROUBLED FIRMS

* In emergencies, FDIC could back debts of solvent firms, drawing on Treasury borrowings and fees charged to firms

* FDIC could liquidate risky insolvent firms through orderly receivership, like FDIC now dismantles failing banks

* Fully secured creditors in FDIC dissolutions could have up to 20 percent of their claims treated as unsecured claims

* "Systemic dissolution fund" of $200 billion would help pay for FDIC actions, drawn from fees charged to firms with more than $50 billion in assets, and Treasury borrowings

* Fees paid by banks into FDIC's existing Deposit Insurance Fund would become risk-based, cutting small banks' fee burden

* In financial emergencies, Fed could extend loans to a wide variety of businesses up to a total of $4 trillion

SUPERVISING BANKS, SECURITIZERS

* Office of Thrift Supervision would be abolished and its operations merged into Office of Comptroller of the Currency

* Lenders would have to retain 5 percent of credit risk of loans securitized for sale onto secondary debt market

REGULATING OTC DERIVATIVES

* Over-the-counter derivatives would go through clearing and exchanges or equivalent facilities where possible

* Swaps not cleared centrally would have to be reported to swap repository or to regulators

* "End users" of swaps, such as airlines and agribusinesses, could be exempted from central clearing

* Regulators could set position limits on swap trading

CREATING CONSUMER WATCHDOG

* Consumer Financial Protection Agency would be created to regulate mortgages, credit cards, other financial products

* Fed, other existing agencies would be stripped of consumer protection duties, which would go to CFPA

* Exempted from CFPA oversight would be auto dealers, retailers, accountants, tax preparers, real estate agents

* States could have tougher rules than CFPA, but regulators could block state laws in some circumstances

* Banks with less than $10 billion in assets would not have full-scale CFPA exams, but would have to follow agency's rules

PROTECTING INVESTORS, CURBING PAY

* SEC standards for brokers and investment advisers would be harmonized, mandatory investor-broker arbitration curbed

* SEC's budget would double, enforcement powers stiffen

* Investors would get annual, nonbinding votes on executive pay, while pay encouraging excessive risk could be prohibited

REGULATING HEDGE FUNDS, CREDIT RATERS

* Hedge funds, private equity firms, offshore funds would have to register with SEC

* Venture capital firms and funds with less than $150 million in assets would be exempted

* SEC would get new oversight over agencies, which would be exposed to more investor lawsuits

MONITORING INSURERS

* Federal Insurance Office (FIO) would be set up to monitor insurance industry for first time, but not regulate it

* FIO could not preempt state insurance laws except under limited circumstances, preserving state-level regulation

For a text of the House bill, please double-click on

here

(Reporting by Kevin Drawbaugh; Editing by Kim Coghill)