Sec. 312. Cross-border regulation of derivatives transactions
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Within 1 year after the date of the enactment of this Act, the Commodity Futures Trading Commission shall issue a rule that addresses— the nature of the connections to the United States that require a non-United States person to register as a swap dealer or a major swap participant under the Commodity Exchange Act and the regulations issued under such Act; which of the United States swaps requirements apply to the swap activities of non-United States persons and United States persons and their branches, agencies, subsidiaries, and affiliates outside of the United States, and the extent to which the requirements apply; and the circumstances under which a United States person or non-United States person in compliance with the swaps regulatory requirements of a foreign jurisdiction shall be exempt from United States swaps requirements.
In the rule, the Commission shall establish criteria for determining that one or more categories of the swaps regulatory requirements of a foreign jurisdiction are comparable to and as comprehensive as United States swaps requirements. The criteria shall include— the scope and objectives of the swaps regulatory requirements of the foreign jurisdiction; the effectiveness of the supervisory compliance program administered; the enforcement authority exercised by the foreign jurisdiction; and such other factors as the Commission, by rule, determines to be necessary or appropriate in the public interest.
In the rule, the Commission shall— provide that any non-United States person or any transaction between two non-United States persons shall be exempt from United States swaps requirements if the person or transaction is in compliance with the swaps regulatory requirements of a foreign jurisdiction which the Commission has determined to be comparable to and as comprehensive as United States swaps requirements; and set forth the circumstances in which a United States person or a transaction between a United States person and a non-United States person shall be exempt from United States swaps requirements if the person or transaction is in compliance with the swaps regulatory requirements of a foreign jurisdiction which the Commission has determined to be comparable to and as comprehensive as United States swaps requirements.
In developing and applying the criteria, the Commission shall emphasize the results and outcomes of, rather than the design and construction of, foreign swaps regulatory requirements. In the rule, the Commission shall not take into account, for the purposes of determining the applicability of United States swaps requirements, the location of personnel that arrange, negotiate, or execute swaps. No part of any rulemaking under this section shall limit the Commission’s antifraud or antimanipulation authority.
Beginning on the date on which a final rule is issued under this section, the Commission shall begin to assess the swaps regulatory requirements of foreign jurisdictions, in the order the Commission determines appropriate, in accordance with the criteria established pursuant to subsection (b)(1). Following each assessment, the Commission shall determine, by rule or by order, whether the swaps regulatory requirements of the foreign jurisdiction are comparable to and as comprehensive as United States swaps requirements.
Beginning 18 months after the date of enactment of this Act— the swaps regulatory requirements of each of the 8 foreign jurisdictions with the largest swaps markets, as calculated by notional value during the 12-month period ending with such date of enactment, except those with respect to which a determination has been made under paragraph (1), shall be considered to be comparable to and as comprehensive as United States swaps requirements; and a non-United States person or a transaction between two non-United States persons shall be exempt from United States swaps requirements if the person or transaction is in compliance with the swaps regulatory requirements of any of such unexcepted foreign jurisdictions.
If the Commission determines, by rule or by order, that— the swaps regulatory requirements of a foreign jurisdiction are not comparable to and as comprehensive as United States swaps requirements, using the categories and criteria established under subsection (b)(1); the foreign jurisdiction does not exempt from its swaps regulatory requirements United States persons who are in compliance with United States swaps requirements; or the foreign jurisdiction is not providing equivalent recognition of, or substituted compliance for, registered entities (as defined in section 1a(41) of the Commodity Exchange Act) domiciled in the United States, the Commission may suspend, in whole or in part, a determination made under paragraph
(1)or a consideration granted under paragraph (2). A registered entity, commercial market participant (as defined in section 1a(7) of the Commodity Exchange Act), or Commission registrant (within the meaning of such Act) who petitions the Commission to make or change a determination under subsection (c)(1) or (c)(3) of this section shall be entitled to expedited consideration of the petition. A petition shall include any evidence or other supporting materials to justify why the petitioner believes the Commission should make or change the determination. Petitions under this section shall be considered by the Commission any time following the enactment of this Act. Within 180 days after receipt of a petition for a rulemaking under this section, the Commission shall take final action on the petition. Within 90 days after receipt of a petition to issue an order or change an order issued under this section, the Commission shall take final action on the petition. If the Commission makes a determination described in this section through an order, the Commission shall articulate the basis for the determination in a written report published in the Federal Register and transmitted to the Committee on Agriculture of the House of Representatives and Committee on Agriculture, Nutrition, and Forestry of the Senate within 15 days of the determination. The determination shall not be effective until 15 days after the committees receive the report. As used in this Act and for purposes of the rules issued pursuant to this Act, the following definitions apply: The term United States 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 United States 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 or pension plans, or any other similar international organizations or their agencies or 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 ( 15 U.S.C. 8301 et seq. ) and any rules or regulations prescribed by the Commodity Futures Trading Commission pursuant to such provisions. The term foreign jurisdiction means any national or supranational political entity with common rules governing swaps transactions. The term swaps regulatory requirements means any provisions of law, and any rules or regulations pursuant to the provisions, governing swaps transactions or the counterparties to swaps transactions. 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 the purposes of the Commodity End-User Relief Act, after to grant exemptions, .
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