What exactly is "Sushi Grade" fish?

"Sushi grade" means that it is safe to prepare and eat raw. In order to do that, it must be frozen to kill any parasites. That means it either has to be:

• Frozen at -20° C (-4° F) for 7 days; or
• Frozen at -35° C (-31° F - "flash frozen") for 15 hours.

There aren't any official regulations about the fish itself or its quality, and most sushi/sashimi distributors have much more stringent rules of their own beyond the freezing guarantee.

There is no real definition of 'sushi grade' fish. It's purely a marketing term to imply a higher quality piece of fish.

There are some actions that should be done for tuna (really for all fish, but especially for tuna) when they are caught, such as bleeding them immediately, destroying the neural canal, reducing the temperature of the fish immediately, etc.

Here's a blog post on the seven different ways to kill/fillet fish and how those ways affect the taste of the meat.

To quote this FAQ:

The only concern any inspectors have is referred to as the parasite destruction guarantee, which is accomplished by ‘freezing and storing seafood at -4°F (-20°C) or below for 7 days (total time), or freezing at -31°F (-35°C) or below until solid and storing at -31°F (-35°C) or below for 15 hours, or freezing at -31°F (-35°C) or below until solid and storing at -4°F (-20°C) or below for 24 hours’ which is sufficient to kill parasites. [...] This means that, aside from the FDA recommendations and local Health Department requirements, there are no laws or recommendations for "sushi/sashimi grade" fish. It is no more than a marketing term.

[...] In the U.S. parasite destruction is required for those species where that hazard is identified but you’ll find that most chefs will claim that they use "fresh" salmon and other products. [...]

The term "fresh" for sushi fish has been linked to higher quality in the minds of many consumers and therefore the restaurants use this as a selling point even though the product may have been previously frozen (usually aboard the fishing vessel) and serving certain species without proper freezing is against regulations - See more at: http://www.sushifaq.com/sushi-sashimi-info/sushi-grade-fish/#sthash.rCOSqanN.dpuf

sushi grade fish is typically salt water fish that has been frozen under very low temperatures to ensure that any harmful bacteria and parasites are killed off. Fresh water fish is not used in sushi because it is considered to be more polluted by the human environment then the saltwater fish.

Source: http://osmsushi.com/sushi-near-me/