Swap Jurisdiction Certainty Act

Floor Speech

BREAK IN TRANSCRIPT

Mr. HUDSON. Mr. Speaker, I rise today in strong support of H.R. 1256, the Swap Jurisdiction Certainty Act, which requires the CFTC and the SEC to cooperate on a single rule for how U.S. derivatives regulations are applied overseas.

This bill and several others we will consider today are critically important to the work we have begun in the House Agriculture Committee to reform Dodd-Frank and make this bill less onerous for our farmers and bankers.

As Commissioner Jill Sommers noted, it appears as though the CFTC was ``guided by what could only be called the 'Intergalactic Commerce Clause''' as they prepared their cross-border guidance when it was released last summer.

How foreign institutions comply with Dodd-Frank is of enormous consequence. The CFTC has taken the position that virtually everyone everywhere is a U.S. person and subject to its jurisdiction. Without question, this expansive claim of jurisdiction is going to raise the cost for farmers and end users in my home State of North Carolina to hedge their risk and diminish global competitiveness of our domestic financial firms, which employ many people back home in North Carolina.

The CFTC is risking all this to an end that no one seems to fully understand. Their actions are making financial regulatory reform more burdensome and more complicated, while serving only to alienate the CFTC and U.S. markets from the rest of the world.

The Swap Jurisdiction Certainty Act would force the CFTC to cooperate with the SEC on a single standard for cross-border application of swaps regulations. In addition, the bill is narrowly tailored to guarantee that the top nine foreign swaps markets will be recognized by the CFTC and SEC as having comparable rules so foreign firms would be governed by the laws of their home countries.

This bill does not allow unchecked swaps markets to spring up in Caribbean island nations or the four corners of Southeast Asia, as some on the other side of the aisle have alluded. Instead, it directs the CFTC to do what it should have done in the first place: to cooperate with its fellow regulators both down the street and around the world.

I urge its adoption.

BREAK IN TRANSCRIPT

Source