Legislation has been introduced in Congress to clarify the applicability of the Dodd-Frank Act swap rules to non-U.S. Persons and for U.S. Persons engaging in swap transactions with non-U.S. Persons.

The extraterritorial application of the Dodd-Frank derivatives rules has been uncertain. Under the proposed Swap Jurisdiction Certainty Act, U.S. registered swap dealers engaging in swap transactions with a non-U.S. Person will not be subject to the Dodd-Frank derivatives rules if each party reports the swap to an SEC registered swap repository. Additionally, non-U.S. persons who register as swap dealers under Dodd-Frank would only be subject to the Dodd-Frank derivatives rules for swaps executed with a U.S. Person and are not required to comply with the Dodd-Frank derivative capital requirements if they are complying with similar requirements in their home country as long as the home country is a signatory to the Basel Accords. Click here to read the proposed legislation.