Sec. 359. Cross-border regulation of derivatives transactions
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Within 180 days after the date of the enactment of this Act, the Commodity Futures Trading Commission shall issue rules that address— the nature of the connections to the United States that require a non-U.S. person to register as a swap dealer or major swap participant under the Commodity Exchange Act and the regulations issued under such Act; which of the United States swaps requirements shall apply to the swap activities of non-U.S. persons, U.S. persons, and their branches, agencies, subsidiaries, and affiliates outside of the United States and the extent to which such requirements shall apply; and the circumstances under which a non-U.S. person in compliance with the regulatory requirements of a foreign jurisdiction shall be exempt from United States swaps requirements.
No guidance, memorandum of understanding, or any such other agreement may satisfy the requirement to issue a rule from the Commission in accordance with section 553 of title 5, United States Code. 9 largest markets In issuing rules under this section, the Commission shall provide that a non-U.S. person in compliance with the swaps regulatory requirements of a country or administrative region that has 1 of the 9 largest swap markets by notional amount in the calendar year preceding issuance of such rules, or other foreign jurisdiction as determined by the Commission, shall be exempt from United States swaps requirements in accordance with the schedule set forth in paragraph (2), unless the Commission determines that the regulatory requirements of the country or administrative region or other foreign jurisdiction are not broadly equivalent to United States swaps requirements.
The exemption described in paragraph
(1)and set forth under the rules required by this section shall apply to persons or transactions relating to or involving— countries or administrative regions described in such paragraph, or any other foreign jurisdiction as determined by the Commission, accounting for the 5 largest swap markets by notional amount in the calendar year preceding issuance of such rules, on the date on which final rules are issued under this section; and the remaining countries or administrative regions described in such paragraph, and any other foreign jurisdiction as determined by the Commission, 1 year after the date on which such rules are issued. In such rules, the Commission shall establish criteria for determining that 1 or more categories of regulatory requirements of a country or administrative region described in paragraph
(1)or other foreign jurisdiction is not broadly equivalent to United States swaps requirements and shall determine the appropriate application of certain United States swap requirements to persons or transactions relating to or involving the country or administrative region or other foreign jurisdiction. The criteria shall include the scope and objectives of the regulatory requirements of a country or administrative region described in paragraph
(1)or other foreign jurisdiction as well as the effectiveness of the supervisory compliance program administered, and the enforcement authority exercised, by the country or administrative region or other foreign jurisdiction, and such other factors as the Commission, by rule, determines to be necessary or appropriate in the public interest. Beginning on the date on which final rules are issued under this section, the Commission shall begin to assess the regulatory requirements of countries or administrative regions described in paragraph (1), as the Commission determines appropriate, in accordance with the criteria established pursuant to this subsection, to determine if 1 or more categories of regulatory requirements of such a country or administrative region or other foreign jurisdiction is not broadly equivalent to United States swaps requirements. If the Commission makes the determination described in subsection (c)(1) that the regulatory requirements of a country or administrative region described in such subsection or other foreign jurisdiction are not broadly equivalent to United States swaps requirements, the Commission shall articulate the basis for the determination in a written report transmitted to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate within 30 days of the determination. The determination shall not be effective until the transmission of the report. As used in this section and for purposes of the rules issued pursuant to this section, the following definitions apply: The term U.S. person — means— any natural person resident in the United States; any partnership, corporation, trust, or other legal person organized or incorporated under the laws of the United States or having its principal place of business in the United States; any account (whether discretionary or non-discretionary) of a U.S. person; and any other person as the Commission may further define to more effectively carry out the purposes of this section; and does not include the International Monetary Fund, the International Bank for Reconstruction and Development, the Inter-American Development Bank, the Asian Development Bank, the African Development Bank, the United Nations, their agencies and pension plans, and any other similar international organizations and their agencies and pension plans. The term United States swaps requirements means the provisions relating to swaps contained in the Commodity Exchange Act (7 U.S.C. 1a et seq.) that were added by title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and any rules or regulations prescribed by the Commodity Futures Trading Commission pursuant to such provisions. Section 4(c)(1)(A) of the Commodity Exchange Act ( 7 U.S.C. 6(c)(1)(A) ) is amended by inserting or except as necessary to effectuate section 361 of the Customer Protection and End User Relief Act, after to grant exemptions, .
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