Archived Content

BRT Letter Supporting Swaps Jurisdiction Certainty Act

The Honorable John Boehner
Speaker
U.S. House of Representatives
H-232 Capitol Building
Washington, DC 20515

The Honorable Nancy Pelosi
Minority Leader
U.S. House of Representatives
H-204 Capitol Building
Washington, DC 20515 

Dear Mr. Speaker and Minority Leader Pelosi:

Business Roundtable urges your support for H.R. 1256, the "Swaps Jurisdiction Certainty Act," which the House of Representatives is scheduled to take up today. This bipartisan compromise bill, introduced by Reps. Scott Garrett (R-NJ), John Carney (D-DE), Mike Conaway (R-TX) and David Scott (D- GA), is a common sense approach that simply promotes regulatory coordination to provide certainty and consistency, while ensuring U.S. competitiveness in the global marketplace.

Business Roundtable is an association of chief executive officers of leading U.S. companies with over $6 trillion in annual revenues and more than14 million employees. Business Roundtable member companies generate an estimated $420 billion in sales for small and medium-sized businesses annually. Passage of H.R. 1256 in the House would move us a crucial step closer to addressing the lack of coordination and uncertainty that today threatens to decrease competitiveness and kill jobs that our members create.

Currently, there is considerable disagreement, both domestically and internationally, about the expansion of Dodd-Frank derivatives rules to overseas jurisdictions, particularly in major swap markets where new foreign regulation is being crafted consistent with international agreements.

Section 722 of the Act explicitly states, in part, that the title “shall not apply to activities outside the United States unless those activities have a direct and significant connection to activities in, or effect on, commerce of the United States.” The question of what “direct and significant connection” means has been pending for some time with U.S. regulators taking a different approach, both on policy and process, to their rules and foreign regulators raising serious concerns about over-reach. Significantly, market participants need certainty and consistency in how multiple U.S. regulators interpret the law to avoid serious disruptions that occurred last year when international regulators noted that foreign counterparties would not transact with U.S. businesses due to a lack of clarity. Accordingly, H.R. 1256 is a compromise approach that would alleviate these concerns and promote a sound regulatory construct by simply ensuring that U.S. regulators carefully coordinate any rules that they may wish to extend overseas.

Businesses need to know what rules apply before they enter into a derivatives transaction. There is enough complexity in trying to understand the differing rules of multiple jurisdictions in a global economy. U.S. regulators should not add to that complexity by creating differing regimes right here at home or fail to recognize an equivalent regulatory regime abroad, both of which this bipartisan bill would address.

Business Roundtable supports the thoughtful approach to regulation that this bipartisan compromise bill promotes by providing much needed transparency and certainty to the derivatives markets. At the same time, we ask that, where possible, Congress and regulators avoid imposing duplicative, inconsistent or burdensome mandates on businesses that will hinder job creation and economic growth. We appreciate you considering our request to vote for H.R. 1256.

Sincerely,
 

John Engler

JE/dg

C:
House Majority Leader Eric Cantor
House Majority Whip Kevin McCarthy
House Minority Whip Steny Hoyer
Members of the House Financial Services Committee 

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