Swap Jurisdiction Certainty Act

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Swap Jurisdiction Certainty Act''.

SEC. 2. JOINT RULEMAKING ON CROSS-BORDER SWAPS.

    (a) Joint Rulemaking Required.--
            (1) In general.--Not later than 270 days after the date of 
        enactment of this Act, the Securities and Exchange Commission 
        and the Commodity Futures Trading Commission shall jointly 
        issue rules setting forth the application of United States 
        swaps requirements of the Securities Exchange Act of 1934 and 
        the Commodity Exchange Act relating to cross-border swaps and 
        security-based swaps transactions involving U.S. persons or 
        non-U.S. persons.
            (2) Construction.--The rules required under paragraph (1) 
        shall be identical, notwithstanding any difference in the 
        authorities granted the Commissions in section 30(c) of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78dd(c)) and section 
        2(i) of the Commodity Exchange Act (7 U.S.C. 2(i)), 
        respectively, except to the extent necessary to accommodate 
        differences in other underlying statutory requirements under 
        such Acts, and the rules thereunder.
    (b) Considerations.--The Commissions shall jointly issue rules that 
address--
            (1) the nature of the connections to the United States that 
        require a non-U.S. person to register as a swap dealer, major 
        swap participant, security-based swap dealer, or major 
        security-based swap participant under each Commission's 
        respective Acts and the regulations issued under such Acts;
            (2) which of the United States swaps requirements shall 
        apply to the swap and security-based 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
            (3) 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.
    (c) Rule in Accordance With APA Required.--No guidance, memorandum 
of understanding, or any such other agreement may satisfy the 
requirement to issue a joint rule from the Commissions in accordance 
with section 553 of title 5, United States Code.
    (d) General Application to Countries or Administrative Regions 
Having Nine Largest Markets.--
            (1) General application.--In issuing rules under this 
        section, the Commissions shall provide that a non-U.S. person 
        in compliance with the swaps regulatory requirements of a 
        country or administrative region that has one of the nine 
        largest combined swap and security-based swap markets by 
        notional amount in the calendar year preceding issuance of such 
        rules, or other foreign jurisdiction as jointly determined by 
        the Commissions, shall be exempt from United States swaps 
        requirements in accordance with the schedule set forth in 
        paragraph (2), unless the Commissions jointly determine that 
        the regulatory requirements of such country or administrative 
        region or other foreign jurisdiction are not broadly equivalent 
        to United States swaps requirements.
            (2) Effective date schedule.--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--
                    (A) countries or administrative regions described 
                in such paragraph, or any other foreign jurisdiction as 
                jointly determined by the Commissions, accounting for 
                the five largest combined swap and security-based 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
                    (B) the remaining countries or administrative 
                regions described in such paragraph, and any other 
                foreign jurisdiction as jointly determined by the 
                Commissions, 1 year after the date on which such rules 
                are issued.
            (3) Criteria.--In such rules, the Commissions shall jointly 
        establish criteria for determining that one 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 jointly determine the appropriate application of 
        certain United States swap requirements to persons or 
        transactions relating to or involving such country or 
        administrative region or other foreign jurisdiction. Such 
        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 such 
        country or administrative region or other foreign jurisdiction, 
        and such other factors as the Commissions, by rule, jointly 
        determine to be necessary or appropriate in the public 
        interest.
            (4) Required assessment.--Beginning on the date on which 
        final rules are issued under this section, the Commissions 
        shall begin to jointly assess the regulatory requirements of 
        countries or administrative regions described in paragraph (1), 
        as the Commissions jointly determine appropriate, in accordance 
        with the criteria established pursuant to this subsection, to 
        determine if one 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.
    (e) Report to Congress.--If the Commissions make the joint 
determination described in subsection (d)(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 Commissions shall articulate the 
basis for such a determination in a written report transmitted to the 
Committee on Financial Services and the Committee on Agriculture of the 
House of Representatives and the Committee on Banking, Housing, and 
Urban Affairs 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 such report.
    (f) Definitions.--As used in this Act and for purposes of the rules 
issued pursuant to this Act, the following definitions apply:
            (1) The term ``U.S. person''--
                    (A) means--
                            (i) any natural person resident in the 
                        United States;
                            (ii) 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;
                            (iii) any account (whether discretionary or 
                        non-discretionary) of a U.S. person; and
                            (iv) any other person as the Commissions 
                        may further jointly define to more effectively 
                        carry out the purposes of this Act; and
                    (B) 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.
             (2) The term ``United States swaps requirements'' means 
        the provisions relating to swaps and security-based swaps 
        contained in the Commodity Exchange Act (7 U.S.C. 1a et seq.) 
        and the Securities Exchange Act of 1934 (15 U.S.C. 78a 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 Securities and 
        Exchange Commission and the Commodity Futures Trading 
        Commission pursuant to such provisions.
    (g) Conforming Amendments.--
            (1) Securities exchange act of 1934.--Section 36(c) of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78mm(c)) is amended 
        by inserting ``or except as necessary to effectuate the 
        purposes of the Swap Jurisdiction Certainty Act,'' after ``to 
        grant exemptions,''.
            (2) Commodity exchange act.--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 Swap Jurisdiction Certainty Act,'' after ``to grant 
        exemptions,''.

            Passed the House of Representatives June 12, 2013.

            Attest:

                                                 KAREN L. HAAS,

                                                                 Clerk.

Summary: (This measure has not been amended since it was reported to the House as amended, Part I, on June 10, 2013.  Swap Jurisdiction Certainty Act - Directs the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to issue jointly rules governing the application of swaps requirements of the Securities Exchange Act of 1934 and the Commodity Exchange Act, relating to cross-border swaps and security-based swaps transactions involving U.S. persons or non-U.S. persons. Requires such rules to be identical (except to the extent necessary to accommodate differences in other underlying statutory requirements), and to address: (1) the nature of the connections to the United States that require a non-U.S. person to register as a swap dealer, major swap participant, security-based swap dealer, or security-based swap participant under each Commission's respective Acts and related regulations; (2) the extent to which U.S. swaps requirements shall apply to the swap and security-based swap activities of non-U.S. persons, U.S. persons, and their branches, agencies, subsidiaries, and affiliates outside the United States; and (3) the circumstances under which a non-U.S. person in compliance with the regulatory requirements of a foreign jurisdiction shall be exempt from U.S. swaps requirements. Directs the Commissions to exempt from U.S. swaps requirements any non-U.S. person in compliance with the swaps regulatory requirements of a country or administrative region having one of the nine largest combined swap and security-based swap markets by notional amount in the calendar year preceding issuance of such rules (unless the Commissions jointly determine that such requirements are not broadly equivalent to U.S. swaps requirements). Requires the Commissions to report to Congress if they determine jointly that the regulatory requirements of such foreign jurisdictions are not broadly equivalent to U.S. swaps requirements.