15 U.S.C. § 8302 — Review of regulatory authority

Page 2410 TITLE 15—COMMERCE AND TRADE § 8302 rity-based swap participant’’ have the meanings given the terms in section 1a of title 7, including any modification of the meanings under section 8321(a) of this title. (Pub. L. 111–203, title VII, § 711, July 21, 2010, 124 Stat. 1641.) Editorial Notes REFERENCES IN TEXT This subtitle, referred to in text, is subtitle A (§§ 711–754) of title VII of Pub. L. 111–203, July 21, 2010, 124 Stat. 1641, which enacted this subchapter, section 78c–2 of this title, and sections 1b, 6b–1, 6r to 6t, 7b–3, 24a, and 26 of Title 7, Agriculture, amended sections 78f, 78o, and 78s of this title, sections 1a, 2, 6 to 6b, 6c, 6d, 6m, 6q, 6s, 7 to 7b, 8 to 9a, 12, 12a, 13, 13–1, 13a–1, 13b, 15, 16, 21, 24, 25, 27 to 27b, 27e, and 27f of Title 7, section 761 of Title 11, Bankruptcy, and sections 4421 and 4422 of Title 12, Banks and Banking, enacted provisions set out as notes under sections 1a, 2, 6a, 7a–1, 7a–3, and 9 of Title 7, and amended provisions set out as a note under section 78c of this title. For complete classification of subtitle A to the Code, see Tables. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Provisions of subchapter effective on the later of 360 days after July 21, 2010, or, to the extent the provision requires a rulemaking, not less than 60 days after pub- lication of the final rule or regulation implementing such provision, see section 754 of Pub. L. 111–203, set out as an Effective Date of 2010 Amendment note under sec- tion 1a of Title 7, Agriculture. SHORT TITLE Pub. L. 111–203, title VII, § 701, July 21, 2010, 124 Stat. 1641, provided that: ‘‘This title [enacting this chapter, sections 78c–2 to 78c–5, 78j–2, 78m–1, and 78o–10 of this title, and sections 1b, 6b–1, 6r to 6t, 7b–3, 24a, and 26 of Title 7, Agriculture, amending sections 77b, 77b–1, 77e, 77q, 78c, 78c–1, 78f, 78i, 78j, 78m, 78o, 78p, 78q–1, 78s, 78t, 78u–1, 78u–2, 78bb, 78dd, 78mm, 80a–2, and 80b–2 of this title, sections 1a, 2, 6 to 6b, 6c, 6d, 6m, 6q, 6s, 7 to 7b, 8 to 9a, 12, 12a, 13, 13–1, 13a–1, 13b, 15, 16, 21, 24, 25, 27 to 27b, 27e, and 27f of Title 7, section 761 of Title 11, Bank- ruptcy, and sections 4421 and 4422 of Title 12, Banks and Banking, enacting provisions set out as notes under section 77b of this title and sections 1a, 2, 6a, 7a–1, 7a–3, and 9 of Title 7, and amending provisions set out as notes under section 78c of this title] may be cited as the ‘Wall Street Transparency and Accountability Act of 2010’.’’ DEFINITION For definition of ‘‘including’’ as used in this section, see section 5301 of Title 12, Banks and Banking. § 8302. Review of regulatory authority (a) Consultation (1) Commodity Futures Trading Commission Before commencing any rulemaking or issuing an order regarding swaps, swap deal- ers, major swap participants, swap data re- positories, derivative clearing organizations with regard to swaps, persons associated with a swap dealer or major swap participant, eligi- ble contract participants, or swap execution facilities pursuant to this subtitle, the Com- modity Futures Trading Commission shall consult and coordinate to the extent possible with the Securities and Exchange Commission and the prudential regulators for the purposes of assuring regulatory consistency and com- parability, to the extent possible. (2) Securities and Exchange Commission Before commencing any rulemaking or issuing an order regarding security-based swaps, security-based swap dealers, major se- curity-based swap participants, security-based swap data repositories, clearing agencies with regard to security-based swaps, persons associ- ated with a security-based swap dealer or major security-based swap participant, eligi- ble contract participants with regard to secu- rity-based swaps, or security-based swap exe- cution facilities pursuant to subtitle B, the Securities and Exchange Commission shall consult and coordinate to the extent possible with the Commodity Futures Trading Com- mission and the prudential regulators for the purposes of assuring regulatory consistency and comparability, to the extent possible. (3) Procedures and deadline Such regulations shall be prescribed in ac- cordance with applicable requirements of title 5 and shall be issued in final form not later than 360 days after July 21, 2010. (4) Applicability The requirements of paragraphs (1) and (2) shall not apply to an order issued— (A) in connection with or arising from a violation or potential violation of any provi- sion of the Commodity Exchange Act (7 U.S.C. 1 et seq.); (B) in connection with or arising from a violation or potential violation of any provi- sion of the securities laws; or (C) in any proceeding that is conducted on the record in accordance with sections 556 and 557 of title 5. (5) Effect Nothing in this subsection authorizes any consultation or procedure for consultation that is not consistent with the requirements of subchapter II of chapter 5, and chapter 7, of title 5 (commonly known as the ‘‘Administra- tive Procedure Act’’). (6) Rules; orders In developing and promulgating rules or or- ders pursuant to this subsection, each Com- mission shall consider the views of the pruden- tial regulators. (7) Treatment of similar products and entities (A) In general In adopting rules and orders under this subsection, the Commodity Futures Trading Commission and the Securities and Ex- change Commission shall treat functionally or economically similar products or entities described in paragraphs (1) and (2) in a simi- lar manner. (B) Effect Nothing in this subtitle requires the Com- modity Futures Trading Commission or the Securities and Exchange Commission to adopt joint rules or orders that treat func- tionally or economically similar products or entities described in paragraphs (1) and (2) in an identical manner. Page 2411 TITLE 15—COMMERCE AND TRADE § 8302 1 See References in Text note below. (8) Mixed swaps The Commodity Futures Trading Commis- sion and the Securities and Exchange Commis- sion, after consultation with the Board of Gov- ernors, shall jointly prescribe such regulations regarding mixed swaps, as described in section 1a(47)(D) of the Commodity Exchange Act (7 U.S.C. 1a(47)(D)) and in section 78c(a)(68)(D) of this title, as may be necessary to carry out the purposes of this title.1 (b) Limitation (1) Commodity Futures Trading Commission Nothing in this title,1 unless specifically provided, confers jurisdiction on the Com- modity Futures Trading Commission to issue a rule, regulation, or order providing for over- sight or regulation of— (A) security-based swaps; or (B) with regard to its activities or func- tions concerning security-based swaps— (i) security-based swap dealers; (ii) major security-based swap partici- pants; (iii) security-based swap data reposi- tories; (iv) associated persons of a security- based swap dealer or major security-based swap participant; (v) eligible contract participants with re- spect to security-based swaps; or (vi) swap execution facilities with re- spect to security-based swaps. (2) Securities and Exchange Commission Nothing in this title,1 unless specifically provided, confers jurisdiction on the Securi- ties and Exchange Commission or State secu- rities regulators to issue a rule, regulation, or order providing for oversight or regulation of— (A) swaps; or (B) with regard to its activities or func- tions concerning swaps— (i) swap dealers; (ii) major swap participants; (iii) swap data repositories; (iv) persons associated with a swap deal- er or major swap participant; (v) eligible contract participants with re- spect to swaps; or (vi) swap execution facilities with re- spect to swaps. (3) Prohibition on certain futures associations and national securities associations (A) Futures associations Notwithstanding any other provision of law (including regulations), unless otherwise authorized by this title,1 no futures associa- tion registered under section 17 of the Com- modity Exchange Act (7 U.S.C. 21) may issue a rule, regulation, or order for the oversight or regulation of, or otherwise assert jurisdic- tion over, for any purpose, any security- based swap, except that this subparagraph shall not limit the authority of a registered futures association to examine for compli- ance with, and enforce, its rules on capital adequacy. (B) National securities associations Notwithstanding any other provision of law (including regulations), unless otherwise authorized by this title,1 no national securi- ties association registered under section 78o–3 of this title may issue a rule, regula- tion, or order for the oversight or regulation of, or otherwise assert jurisdiction over, for any purpose, any swap, except that this sub- paragraph shall not limit the authority of a national securities association to examine for compliance with, and enforce, its rules on capital adequacy. (c) Objection to Commission regulation (1) Filing of petition for review (A) In general If either Commission referred to in this section determines that a final rule, regula- tion, or order of the other Commission con- flicts with subsection (a)(7) or (b), then the complaining Commission may obtain review of the final rule, regulation, or order in the United States Court of Appeals for the Dis- trict of Columbia Circuit by filing in the court, not later than 60 days after the date of publication of the final rule, regulation, or order, a written petition requesting that the rule, regulation, or order be set aside. (B) Expedited proceeding A proceeding described in subparagraph (A) shall be expedited by the United States Court of Appeals for the District of Colum- bia Circuit. (2) Transmittal of petition and record (A) In general A copy of a petition described in paragraph (1) shall be transmitted not later than 1 business day after the date of filing by the complaining Commission to the Secretary of the responding Commission. (B) Duty of responding Commission On receipt of the copy of a petition de- scribed in paragraph (1), the responding Commission shall file with the United States Court of Appeals for the District of Colum- bia Circuit— (i) a copy of the rule, regulation, or order under review (including any documents re- ferred to therein); and (ii) any other materials prescribed by the United States Court of Appeals for the District of Columbia Circuit. (3) Standard of review The United States Court of Appeals for the District of Columbia Circuit shall— (A) give deference to the views of neither Commission; and (B) determine to affirm or set aside a rule, regulation, or order of the responding Com- mission under this subsection, based on the determination of the court as to whether the rule, regulation, or order is in conflict with subsection (a)(7) or (b), as applicable. (4) Judicial stay The filing of a petition by the complaining Commission pursuant to paragraph (1) shall Page 2412 TITLE 15—COMMERCE AND TRADE § 8302 operate as a stay of the rule, regulation, or order until the date on which the determina- tion of the United States Court of Appeals for the District of Columbia Circuit is final (in- cluding any appeal of the determination). (d) Joint rulemaking (1) In general Notwithstanding any other provision of this title 1 and subsections (b) and (c), the Com- modity Futures Trading Commission and the Securities and Exchange Commission, in con- sultation with the Board of Governors, shall further define the terms ‘‘swap’’, ‘‘security- based swap’’, ‘‘swap dealer’’, ‘‘security-based swap dealer’’, ‘‘major swap participant’’, ‘‘major security-based swap participant’’, ‘‘eli- gible contract participant’’, and ‘‘security- based swap agreement’’ in section 1a(47)(A)(v) of the Commodity Exchange Act (7 U.S.C. 1a(47)(A)(v)) and section 78c(a)(78) of this title. (2) Authority of the Commissions (A) In general Notwithstanding any other provision of this title,1 the Commodity Futures Trading Commission and the Securities and Ex- change Commission, in consultation with the Board of Governors, shall jointly adopt such other rules regarding such definitions as the Commodity Futures Trading Commis- sion and the Securities and Exchange Com- mission determine are necessary and appro- priate, in the public interest, and for the protection of investors. (B) Trade repository recordkeeping Notwithstanding any other provision of this title,1 the Commodity Futures Trading Commission and the Securities and Ex- change Commission, in consultation with the Board of Governors, shall engage in joint rulemaking to jointly adopt a rule or rules governing the books and records that are re- quired to be kept and maintained regarding security-based swap agreements by persons that are registered as swap data repositories under the Commodity Exchange Act, includ- ing uniform rules that specify the data ele- ments that shall be collected and main- tained by each repository. (C) Books and records Notwithstanding any other provision of this title,1 the Commodity Futures Trading Commission and the Securities and Ex- change Commission, in consultation with the Board of Governors, shall engage in joint rulemaking to jointly adopt a rule or rules governing books and records regarding secu- rity-based swap agreements, including daily trading records, for swap dealers, major swap participants, security-based swap deal- ers, and security-based swap participants. (D) Comparable rules Rules and regulations prescribed jointly under this title 1 by the Commodity Futures Trading Commission and the Securities and Exchange Commission shall be comparable to the maximum extent possible, taking into consideration differences in instruments and in the applicable statutory requirements. (E) Tracking uncleared transactions Any rules prescribed under subparagraph (A) shall require the maintenance of records of all activities relating to security-based swap agreement transactions defined under subparagraph (A) that are not cleared. (F) Sharing of information The Commodity Futures Trading Commis- sion shall make available to the Securities and Exchange Commission information re- lating to security-based swap agreement transactions defined in subparagraph (A) that are not cleared. (3) Financial Stability Oversight Council In the event that the Commodity Futures Trading Commission and the Securities and Exchange Commission fail to jointly prescribe rules pursuant to paragraph (1) or (2) in a timely manner, at the request of either Com- mission, the Financial Stability Oversight Council shall resolve the dispute— (A) within a reasonable time after receiv- ing the request; (B) after consideration of relevant infor- mation provided by each Commission; and (C) by agreeing with 1 of the Commissions regarding the entirety of the matter or by determining a compromise position. (4) Joint interpretation Any interpretation of, or guidance by either Commission regarding, a provision of this title,1 shall be effective only if issued jointly by the Commodity Futures Trading Commis- sion and the Securities and Exchange Commis- sion, after consultation with the Board of Gov- ernors, if this title 1 requires the Commodity Futures Trading Commission and the Securi- ties and Exchange Commission to issue joint regulations to implement the provision. (e) Global rulemaking timeframe Unless otherwise provided in this title,1 or an amendment made by this title,1 the Commodity Futures Trading Commission or the Securities and Exchange Commission, or both, shall indi- vidually, and not jointly, promulgate rules and regulations required of each Commission under this title 1 or an amendment made by this title 1 not later than 360 days after July 21, 2010. (f) Rules and registration before final effective dates Beginning on July 21, 2010, and notwith- standing the effective date of any provision of this Act, the Commodity Futures Trading Com- mission and the Securities and Exchange Com- mission may, in order to prepare for the effec- tive dates of the provisions of this Act— (1) promulgate rules, regulations, or orders permitted or required by this Act; (2) conduct studies and prepare reports and recommendations required by this Act; (3) register persons under the provisions of this Act; and (4) exempt persons, agreements, contracts, or transactions from provisions of this Act, under the terms contained in this Act, provided, however, that no action by the Com- modity Futures Trading Commission or the Se- Page 2413 TITLE 15—COMMERCE AND TRADE § 8305 1 So in original. Probably should be ‘‘a’’. curities and Exchange Commission described in paragraphs (1) through (4) shall become effective prior to the effective date applicable to such ac- tion under the provisions of this Act. (Pub. L. 111–203, title VII, § 712, July 21, 2010, 124 Stat. 1641.) Editorial Notes REFERENCES IN TEXT This subtitle, referred to in subsec. (a)(1), (7)(B), is subtitle A (§§ 711–754) of title VII of Pub. L. 111–203, July 21, 2010, 124 Stat. 1641, which enacted this subchapter, section 78c–2 of this title, and sections 1b, 6b–1, 6r to 6t, 7b–3, 24a, and 26 of Title 7, Agriculture, amended sec- tions 78f, 78o, and 78s of this title, sections 1a, 2, 6 to 6b, 6c, 6d, 6m, 6q, 6s, 7 to 7b, 8 to 9a, 12, 12a, 13, 13–1, 13a–1, 13b, 15, 16, 21, 24, 25, 27 to 27b, 27e, and 27f of Title 7, section 761 of Title 11, Bankruptcy, and sections 4421 and 4422 of Title 12, Banks and Banking, enacted provi- sions set out as notes under sections 1a, 2, 6a, 7a–1, 7a–3, and 9 of Title 7, and amended provisions set out as a note under section 78c of this title. For complete classi- fication of subtitle A to the Code, see Tables. Subtitle B, referred to in subsec. (a)(2), is subtitle B (§§ 761–774) of title VII of Pub. L. 111–203, July 21, 2010, 124 Stat. 1754, which enacted subchapter II of this chap- ter and sections 78c–3 to 78c–5, 78j–2, 78m–1, and 78o–10 of this title, amended sections 77b, 77b–1, 77e, 77q, 78c, 78c–1, 78f, 78i, 78j, 78m, 78o, 78p, 78q–1, 78t, 78u–1, 78u–2, 78bb, 78dd, 78mm, 80a–2, and 80b–2 of this title, enacted provisions set out as a note under section 77b of this title, and amended provisions set out as a note under section 78c of this title. For complete classification of subtitle B to the Code, see Tables. The Commodity Exchange Act, referred to in subsecs. (a)(4)(A) and (d)(2)(B), is act Sept. 21, 1922, ch. 369, 42 Stat. 998, which is classified generally to chapter 1 (§ 1 et seq.) of Title 7, Agriculture. For complete classifica- tion of this Act to the Code, see section 1 of Title 7 and Tables. This title, where footnoted in subsecs. (a)(8), (b), (d)(1), (2)(A)–(D), (4), and (e), is title VII of Pub. L. 111–203, July 21, 2010, 124 Stat. 1641, known as the Wall Street Transparency and Accountability Act of 2010, which enacted this chapter and enacted and amended numerous other sections and notes in the Code. For complete classification of title VII to the Code, see Short Title note set out under section 8301 of this title and Tables. This Act, referred to in subsec. (f), is Pub. L. 111–203, July 21, 2010, 124 Stat. 1376, known as the Dodd-Frank Wall Street Reform and Consumer Protection Act. For complete classification of this Act to the Code, see Short Title note set out under section 5301 of Title 12, Banks and Banking, and Tables. Statutory Notes and Related Subsidiaries DEFINITIONS For definitions of terms used in this section, see sec- tion 5301 of Title 12, Banks and Banking. § 8303. Abusive swaps The Commodity Futures Trading Commission or the Securities and Exchange Commission, or both, individually may, by rule or order— (1) collect information as may be necessary concerning the markets for any types of— (A) swap (as defined in section 1a of title 7); or (B) security-based swap (as defined in sec- tion 1a of title 7); and (2) issue a report with respect to any types of swaps or security-based swaps that the Commodity Futures Trading Commission or the Securities and Exchange Commission de- termines to be detrimental to— (A) the stability of a financial market; or (B) participants in a financial market. (Pub. L. 111–203, title VII, § 714, July 21, 2010, 124 Stat. 1647.) § 8304. Authority to prohibit participation in swap activities Except as provided in section 6 of title 7, if the Commodity Futures Trading Commission or the Securities and Exchange Commission deter- mines that the regulation of swaps or security- based swaps markets in a foreign country under- mines the stability of the United States finan- cial system, either Commission, in consultation with the Secretary of the Treasury, may pro- hibit an entity domiciled in the foreign country from participating in the United States in any swap or security-based swap activities. (Pub. L. 111–203, title VII, § 715, July 21, 2010, 124 Stat. 1647.) § 8305. Prohibition against Federal Government bailouts of swaps entities (a) Prohibition on Federal assistance Notwithstanding any other provision of law (including regulations), no Federal assistance may be provided to any swaps entity with re- spect to any swap, security-based swap, or other activity of the swaps entity. (b) Definitions In this section: (1) Federal assistance The term ‘‘Federal assistance’’ means the use of any advances from any Federal Reserve credit facility or discount window that is not part of a program or facility with broad-based eligibility under section 343(3)(A) of title 12, Federal Deposit Insurance Corporation insur- ance or guarantees for the purpose of— (A) making any loan to, or purchasing any stock, equity interest, or debt obligation of, any swaps entity; (B) purchasing the assets of any swaps en- tity; (C) guaranteeing any loan or debt issuance of any swaps entity; or (D) entering into any assistance arrange- ment (including tax breaks), loss sharing, or profit sharing with any swaps entity. (2) Swaps entity (A) In general The term ‘‘swaps entity’’ means any swap dealer, security-based swap dealer, major swap participant, major security-based swap participant, that is registered under— (i) the Commodity Exchange Act (7 U.S.C. 1 et seq.); or (ii) the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.). (B) Exclusion The term ‘‘swaps entity’’ does not include any major swap participant or major secu- rity-based swap participant that is an 1 cov- ered depository institution.