[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4066 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 4066

   To amend the Commodity Exchange Act to close the Enron loophole, 
prevent price manipulation and excessive speculation in the trading of 
              energy commodities, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            November 1, 2007

   Mr. Welch of Vermont (for himself and Mr. Andrews) introduced the 
   following bill; which was referred to the Committee on Agriculture

_______________________________________________________________________

                                 A BILL


 
   To amend the Commodity Exchange Act to close the Enron loophole, 
prevent price manipulation and excessive speculation in the trading of 
              energy commodities, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Close the Enron Loophole Act''.

SEC. 2. ENERGY TRADING FACILITIES.

    (a) Definitions.--Section 1a of the Commodity Exchange Act (7 
U.S.C. 1a) is amended by redesignating paragraphs (13) through (33) as 
paragraphs (15) through (35), respectively, and by inserting after 
paragraph (12) the following:
            ``(13) Energy commodity.--The term `energy commodity' means 
        a commodity (other than an excluded commodity, a metal, or an 
        agricultural commodity) that--
                    ``(A) is used as a source of energy, including but 
                not limited to--
                            ``(i) crude oil;
                            ``(ii) gasoline, diesel fuel, heating oil, 
                        and any other product derived or refined from 
                        crude oil;
                            ``(iii) natural gas, including methane, 
                        propane, and any other gas or liquid derived 
                        from natural gas; and
                            ``(iv) electricity; or
                    ``(B) results from the burning of fossil fuels to 
                produce energy, including but not limited to carbon 
                dioxide and sulfur dioxide.
            ``(14) Energy trading facility.--The term `energy trading 
        facility' means a trading facility that--
                    ``(A) is not a designated contract market; and
                    ``(B) facilitates the execution or trading of 
                agreements, contracts, or transactions in an energy 
                commodity that are not spot sales of a cash commodity 
                or sales of a cash commodity for deferred shipment or 
                delivery, and that are entered into on a principal-to-
                principal basis solely between persons that are 
                eligible commercial entities at the time the persons 
                enter into the agreement, contract, or transaction; and
                            ``(i) facilitates the clearance and 
                        settlement of such agreements, contracts, or 
                        transactions; or
                            ``(ii) the Commission determines performs a 
                        significant price discovery function in 
                        relation to an energy commodity listed for 
                        trading on a trading facility or in the cash 
                        market for the energy commodity. In making a 
                        determination whether a trading facility 
                        performs a significant price discovery function 
                        the Commission may consider, as appropriate--
                                    ``(I) the extent to which the price 
                                of an agreement, contract, or 
                                transaction traded or executed on the 
                                trading facility is derived from or 
                                linked to the price of a contract in an 
                                energy commodity listed for trading on 
                                a designated contract market;
                                    ``(II) the extent to which cash 
                                market bids, offers, or transactions in 
                                an energy commodity are directly based 
                                on, or quoted at a differential to, the 
                                prices generated by agreements, 
                                contracts, or transactions in the same 
                                energy commodity being traded or 
                                executed on the trading facility;
                                    ``(III) the volume of agreements, 
                                contracts, or transactions in the 
                                energy commodity being traded on the 
                                trading facility;
                                    ``(IV) the extent to which data 
                                regarding completed transactions are 
                                posted, disseminated, or made available 
                                immediately after completion of such 
                                transactions, with or without a fee, to 
                                other market participants and other 
                                persons;
                                    ``(V) the extent to which an 
                                arbitrage market exists between the 
                                agreements, contracts, or transactions 
                                traded or executed on the trading 
                                facility and a contract in an energy 
                                commodity listed for trading on a 
                                designated contract market; and
                                    ``(VI) such other factors as the 
                                Commission determines appropriate.''.
    (b) Commission Oversight of Energy Trading Facilities.--Section 
2(h) of such Act (7 U.S.C. 2(h)) is amended--
            (1) in paragraph (3)(B) after ``an electronic trading 
        facility'' by inserting ``that is not an energy trading 
        facility''; and
            (2) by adding at the end the following:
            ``(7) Energy trading facilities.--Notwithstanding any other 
        provision of this Act, an energy trading facility shall be 
        subject to section 2(j).''.
    (c) Standards Applicable to Energy Trading Facilities.--Section 2 
of such Act (7 U.S.C. 2) is amended by adding at the end the following:
    ``(j) Registration of Energy Trading Facilities.--
            ``(1) In general.--It shall be unlawful for any person to 
        enter into an agreement, contract, or transaction for future 
        delivery of an energy commodity that is not a spot sale of a 
        cash commodity or a sale of a cash commodity for deferred 
        shipment or delivery, on or through an energy trading facility 
        unless such facility is registered with the Commission as an 
        energy trading facility.
            ``(2) Applications.--Any trading facility applying to the 
        Commission for registration as an energy trading facility shall 
        submit an application to the Commission that includes any 
        relevant materials and records, consistent with the Act, that 
        the Commission may require.
            ``(3) Commission action.--The Commission shall make a 
        determination whether to approve an application for 
        registration as an energy trading facility within 120 days 
        after such application is submitted.
            ``(4) Criteria for registration.--To be registered as an 
        energy trading facility, the applicant shall demonstrate to the 
        Commission that the trading facility meets the criteria 
        specified in this paragraph.
                    ``(A) Prevention of price manipulation and 
                excessive speculation.--The trading facility shall have 
                the capacity to prevent price manipulation, excessive 
                speculation, price distortion, and disruption of the 
                delivery or cash-settlement process through market 
                surveillance, compliance, and enforcement practices and 
                procedures, including methods for conducting real-time 
                monitoring of trading and comprehensive and accurate 
                trade reconstructions.
                    ``(B) Monitoring of trading.--The trading facility 
                shall monitor trading to prevent price manipulation, 
                excessive speculation, price distortion, and disruption 
                of the delivery or cash-settlement process.
                    ``(C) Contracts not readily susceptible to 
                manipulation.--The trading facility shall list for 
                trading only contracts that are not readily susceptible 
                to manipulation.
                    ``(D) Financial integrity of transactions.--A 
                trading facility that facilitates the clearance and 
                settlement of agreements, contracts, or transactions by 
                a derivatives clearing organization shall establish and 
                enforce rules and procedures for ensuring the financial 
                integrity of such agreements, contracts, and 
                transactions.
                    ``(E) Ability to obtain information.--The trading 
                facility shall establish and enforce rules that will 
                allow the trading facility to obtain any necessary 
                information to perform any of the functions described 
                in this subsection, including the capacity to carry out 
                such international information-sharing agreements as 
                the Commission may require.
                    ``(F) Position limits or accountability levels.--To 
                reduce the threat of price manipulation, excessive 
                speculation, price distortion, or disruption of the 
                delivery or cash-settlement process, the trading 
                facility shall adopt position limits or position 
                accountability levels for speculators, where necessary 
                and appropriate.
                    ``(G) Emergency authority.--The trading facility 
                shall adopt rules to provide for the exercise of 
                emergency authority, in consultation and cooperation 
                with the Commission, where necessary and appropriate, 
                including the authority to--
                            ``(i) liquidate open positions in any 
                        contract;
                            ``(ii) suspend or curtail trading in any 
                        contract; and
                            ``(iii) require market participants in any 
                        contract to meet special margin requirements.
                    ``(H) Daily publication of trading information.--
                The trading facility shall make public daily 
                information on settlement prices, volume, open 
                interest, and opening and closing ranges for actively 
                traded contracts on the facility.
                    ``(I) Deterrence of abuses.--The trading facility 
                shall establish and enforce trading and participation 
                rules that will deter abuses and shall have the 
                capacity to detect, investigate violations of, and 
                enforce those rules, including means to--
                            ``(i) obtain information necessary to 
                        perform the functions required under this 
                        section; or
                            ``(ii) use technological means to capture 
                        information that may be used in establishing 
                        whether rule violations have occurred.
                    ``(J) Trade information.--The trading facility 
                shall maintain rules and procedures to provide for the 
                recording and safe storage of all identifying trade 
                information in a manner that enables the facility to 
                use the information for the purposes of assisting in 
                the prevention of price manipulation, excessive 
                speculation, price distortion, or disruption of the 
                delivery or cash-settlement process, and providing 
                evidence of any violations of the rules of the 
                facility.
                    ``(K) Trading procedures.--The trading facility 
                shall establish and enforce rules or terms and 
                conditions defining, or specifications detailing, 
                trading procedures to be used in entering and executing 
                orders traded on the facility, including procedures to 
                provide participants with impartial access to the 
                trading facility.
                    ``(L) Compliance with rules.--The trading facility 
                shall monitor and enforce the rules of the facility, 
                including any terms and conditions of any contracts 
                traded on or through the facility and any limitations 
                on access to the facility.
                    ``(M) Disclosure of general information.--The 
                trading facility shall disclose publicly and to the 
                Commission information concerning--
                            ``(i) contract terms and conditions;
                            ``(ii) trading conventions, mechanisms, and 
                        practices;
                            ``(iii) financial integrity protections; 
                        and
                            ``(iv) other information relevant to 
                        participation in trading on the facility.
                    ``(N) Fitness standards.--The trading facility 
                shall establish and enforce appropriate fitness 
                standards for directors, members of any disciplinary 
                committee, and any other persons with direct access to 
                the facility, including any parties affiliated with any 
                of the persons described in this paragraph.
                    ``(O) Conflicts of interest.--The trading facility 
                shall establish and enforce rules to minimize conflicts 
                of interest in the decision making process of the 
                facility and establish a process for resolving such 
                conflicts of interest.
                    ``(P) Recordkeeping.--The trading facility shall 
                maintain records of all activities related to the 
                business of the facility in a form and manner 
                acceptable to the Commission for a period of 5 years.
                    ``(Q) Antitrust considerations.--Unless necessary 
                or appropriate to achieve the purposes of this Act, the 
                trading facility shall endeavor to avoid--
                            ``(i) adopting any rules or taking any 
                        actions that result in any unreasonable 
                        restraint of trade; or
                            ``(ii) imposing any material 
                        anticompetitive burden on trading on the 
                        facility.
            ``(5) Criteria for energy trading facilities.--To maintain 
        the registration as an energy trading facility, the trading 
        facility shall comply with all of the criteria in paragraph 
        (4). Failure to comply with any of these criteria shall 
        constitute a violation of this Act. The trading facility shall 
        have reasonable discretion in establishing the manner in which 
        it complies with the criteria in paragraph (4).
            ``(6) Position limits and accountability levels.--
                    ``(A) Duty of commission.--The Commission shall 
                ensure that the position limits and accountability 
                levels applicable to contracts in an energy commodity 
                listed for trading on a designated contract market and 
                the position limits and accountability levels 
                applicable to similar contracts in the same energy 
                commodity listed for trading on an energy trading 
                facility--
                            ``(i) appropriately prevent price 
                        manipulation, excessive speculation, price 
                        distortion, and disruption of the delivery or 
                        cash-settlement process; and
                            ``(ii) are on a parity with each other and 
                        applied in a functionally equivalent manner.
                    ``(B) Commission review.--Upon learning that a 
                person has exceeded an applicable position limit or 
                accountability level in an energy commodity, the 
                Commission shall obtain such information as it 
                determines to be necessary and appropriate regarding 
                all of the positions held by such person in such energy 
                commodity and take such action as may be necessary and 
                appropriate, in addition to any action taken by an 
                energy trading facility or a designated contract 
                market, to require, or direct an energy trading 
                facility or a designated contract market to require, 
                such person to limit, reduce, or liquidate any position 
                to prevent or reduce the threat of price manipulation, 
                excessive speculation, price distortion, or disruption 
                of the delivery or cash-settlement process.
                    ``(C) Information to commission.--In order to make 
                any determination required under this section, the 
                Commission may request all relevant information 
                regarding all of the positions held by any person in 
                the energy commodity for which the person has exceeded 
                a position limit or accountability level, including 
                positions held or controlled or transactions executed--
                            ``(i) on or through--
                                    ``(I) a designated contract market;
                                    ``(II) an energy trading facility;
                                    ``(III) an electronic trading 
                                facility operating pursuant to 
                                paragraphs (3) through (5) of section 
                                2(h);
                                    ``(IV) an exempt board of trade 
                                operating pursuant to section 5d;
                                    ``(V) a derivative transaction 
                                execution facility; or
                                    ``(VI) a foreign board of trade;
                            ``(ii) within the scope of section 2(g), or 
                        paragraphs (1) and (2) of section 2(h); or
                            ``(iii) in the cash market for the 
                        commodity.
                    ``(D) Requirement to retain and provide position 
                information.--
                            ``(i) In general.--Any person entering into 
                        or executing an agreement, contract, or 
                        transaction with respect to an energy commodity 
                        on a designated contract market or on an energy 
                        trading facility shall retain such books and 
                        records as the Commission may require in order 
                        to provide such information upon request, and 
                        upon request shall promptly provide such 
                        information to the Commission or the Department 
                        of Justice.
                            ``(ii) Alternate means of obtaining 
                        position information.--Notwithstanding this 
                        requirement to retain and provide position 
                        information, the Commission may alternatively 
                        choose to obtain any of the position 
                        information specified in this paragraph from 
                        the trading facility at which such positions 
                        are maintained.
                    ``(E) Criteria for commission determination.--In 
                making any determination to require a limitation, 
                reduction, or liquidation of any position with respect 
                to an energy commodity, the Commission may consider, as 
                appropriate--
                            ``(i) the person's open interest in a 
                        contract, agreement, or transaction involving 
                        an energy commodity relative to the total open 
                        interest in such contracts, agreements, or 
                        transactions;
                            ``(ii) the daily volume of trading in such 
                        contracts, agreements or transactions;
                            ``(iii) the person's overall position in 
                        related contracts, including options, and the 
                        overall open interest or liquidity in such 
                        related contracts and options;
                            ``(iv) the potential for such positions to 
                        cause or allow price manipulation, excessive 
                        speculation, price distortion, or disruption of 
                        the delivery or cash-settlement process;
                            ``(v) the person's record of compliance 
                        with rules, regulations, and orders of the 
                        Commission, a designated contract market, or an 
                        energy trading facility, as appropriate;
                            ``(vi) the person's financial ability to 
                        support such positions on an ongoing basis;
                            ``(vii) any justification provided by the 
                        person for such positions; and
                            ``(viii) other such factors determined to 
                        be appropriate by the Commission.''.
    (d) Information for Price Discovery Determination.--
            (1) Section 2(h)(5)(B) of such Act (7 U.S.C. 2(h)(5)(B)) is 
        amended--
                    (A) by striking ``and'' at the end of clause 
                (ii)(II);
                    (B) by adding ``and'' at the end of clause 
                (iii)(III); and
                    (C) by adding at the end the following:
                            ``(iv) to the extent that the electronic 
                        trading facility provides for the trading of 
                        agreements, contracts, or transactions in an 
                        energy commodity, provide the Commission with 
                        such information as the Commission determines 
                        necessary to evaluate whether the energy 
                        trading facility performs a significant price 
                        discovery function in relation to a contract in 
                        an energy commodity listed for trading on a 
                        trading facility or in the cash market for the 
                        energy commodity, including the provision of 
                        such requested information on a continuous 
                        basis;''.
            (2) Section 5a(b) of the Commodity Exchange Act (7 U.S.C. 
        7a(b)) is amended by adding the following:
            ``(5) Price discovery for energy commodity.--A registered 
        derivatives transaction execution facility shall, to the extent 
        that it provides for the trading of any contract of sale of a 
        commodity for future delivery (or option on such contract) 
        based on an energy commodity, provide the Commission with such 
        information as the Commission determines necessary to evaluate 
        whether the registered derivatives transaction execution 
        facility performs a significant price discovery function in 
        relation to a contract in an energy commodity listed for 
        trading on a trading facility or in the cash market for the 
        energy commodity, including the provision of such requested 
        information on a continuous basis.''.
    (e) Conforming Amendments.--The Commodity Exchange Act is amended--
            (1) in section 1a(29) (7 U.S.C. 1a(29))--
                    (A) in subparagraph (C), by striking ``and'';
                    (B) in subparagraph (D), by striking the period and 
                inserting ``; and''; and
                    (C) by adding at the end the following:
                    ``(E) an energy trading facility registered under 
                section 2(j).'';
            (2) in section 4(a) (7 U.S.C. 6(a))--
                    (A) in paragraph (1), by inserting ``registered 
                energy trading facility or a'' after ``subject to the 
                rules of a''; and
                    (B) in paragraph (3), by striking ``or derivatives 
                transaction execution facility'' and inserting ``, 
                derivatives transaction execution facility, or energy 
                trading facility'';
            (3) in section 4(c) (7 U.S.C. 6(c)), by inserting 
        ``registered energy trading facility or'' in the parenthetical 
        after ``including any'';
            (4) in section 4a(a) (7 U.S.C. 6a(a))--
                    (A) in the 1st sentence, by striking ``or 
                derivatives transaction execution facilities'' and 
                inserting ``, derivatives transaction execution 
                facilities, or energy trading facilities''; and
                    (B) in the 2nd sentence, by striking ``or 
                derivatives transaction execution facility'' and 
                inserting ``, derivatives transaction execution 
                facility, or energy trading facility'';
            (5) in section 4a(b) (7 U.S.C. 6a(b))--
                    (A) in paragraph (1), by striking ``or derivatives 
                transaction execution facility or facilities'' and 
                inserting ``derivatives transaction execution facility 
                or facilities, or energy trading facility or 
                facilities'';
                    (B) in paragraph (2), by striking ``or derivatives 
                transaction execution facility'' and inserting ``, 
                derivatives transaction execution facility, or energy 
                trading facility'';
            (6) in section 4a(e) (7 U.S.C. 6a(e))--
                    (A) in the 1st sentence--
                            (i) by inserting ``or by any energy trading 
                        facility'' after ``registered by the 
                        Commission'';
                            (ii) by striking ``or derivatives 
                        transaction execution facility'' and inserting 
                        ``, derivatives transaction execution facility, 
                        or energy trading facility''; and
                            (iii) by inserting ``energy trading 
                        facility,'' before ``or such board of trade'' 
                        each time it appears; and
                    (B) in the 2nd sentence, by inserting ``or energy 
                trading facility'' after ``registered by the 
                Commission'';
            (7) in each of sections 4e, 4i, paragraphs (1), (2), and 
        (3) of section 5c(b), and 6(b) (7 U.S.C. 6e, 6i, 7a-2(b)(1), 
        (2), and (3), and 8(b)), by striking ``or derivatives 
        transaction execution facility'' and inserting ``, derivatives 
        transaction execution facility, or energy trading facility'' 
        each place it appears;
            (8) in each of paragraphs (2) and (3) of section 4l (7 
        U.S.C. 6l(2) and (3)), by striking ``or derivatives transaction 
        execution facilities'' and inserting ``derivatives transaction 
        execution facilities, or energy trading facilities'';
            (9) in section 6(b) (7 U.S.C. 8(b)), by striking ``sections 
        5 through 5b'' and inserting ``section 2(j), sections 5 through 
        5b,''; and
            (10) in section 6d(1) (7 U.S.C. 13a-2(1)), by inserting 
        ``energy trading facility,'' after ``derivatives transaction 
        execution facility,''.

SEC. 3. REPORTING OF UNITED STATES ENERGY TRADES.

    Section 2 of the Commodity Exchange Act (7 U.S.C. 1a), as amended 
by section 2(c) of this Act, is amended by adding at the end the 
following:
    ``(k) Domestic Energy Trades on a Foreign Board of Trade.--
            ``(1) Definitions.--In this subsection:
                    ``(A) Domestic terminal.--The term `domestic 
                terminal' means a technology, software, or other means 
                of providing electronic access within the United States 
                to a contract, agreement, or transaction traded on a 
                foreign board of trade.
                    ``(B) Reportable contract.--The term `reportable 
                contract' means a contract, agreement, or transaction 
                for future delivery of an energy commodity (or option 
                thereon), or an option on an energy commodity, for 
                which the underlying commodity has a physical delivery 
                point within the United States and that is executed 
                through a domestic terminal.
            ``(2) Record keeping.--The Commission, by rule, shall 
        require any person holding, maintaining, or controlling any 
        position in any reportable contract under this section--
                    ``(A) to maintain such records as directed by the 
                Commission for a period of 5 years, or longer, if 
                directed by the Commission; and
                    ``(B) to provide such records upon request to the 
                Commission or the Department of Justice.
            ``(3) Reporting.--The Commission shall prescribe rules 
        requiring such regular or continuous reporting of positions in 
        a reportable contract in accordance with such requirements 
        regarding size limits for reportable contracts and the form, 
        timing, and manner of filing such reports under this paragraph, 
        as the Commission shall determine.
            ``(4) Equivalent means of obtaining information.--The 
        Commission may waive the requirement under paragraph (3) if the 
        Commission determines that the foreign board of trade is 
        providing the Commission with equivalent information in a 
        usable format pursuant to an agreement between the Commission 
        and the foreign board of trade or a foreign futures authority, 
        department or agency of a foreign government, or political 
        subdivision thereof.
            ``(5) Other rules not affected.--
                    ``(A) In general.--Except as provided in clause 
                (ii), this paragraph does not prohibit or impair the 
                adoption by any board of trade or energy trading 
                facility licensed, designated, or registered by the 
                Commission of any bylaw, rule, regulation, or 
                resolution requiring reports of positions in any 
                agreement, contract, or transaction for future delivery 
                of an energy commodity (or option thereon), or option 
                on an energy commodity, including any bylaw, rule, 
                regulation, or resolution pertaining to filing or 
                recordkeeping, which may be held by any person subject 
                to the rules of the board of trade or energy trading 
                facility.
                    ``(B) Exception.--Any bylaw, rule, regulation, or 
                resolution established by a board of trade or energy 
                trading facility described in clause (i) shall not be 
                inconsistent with any requirement prescribed by the 
                Commission under this paragraph.''.

SEC. 4. ANTIFRAUD AUTHORITY.

    Section 4b of the Commodity Exchange Act (7 U.S.C. 6b) is amended--
            (1) by redesignating subsections (b) and (c) as subsections 
        (c) and (d), respectively; and
            (2) by striking ``sec. 4b.'' and all that follows through 
        the end of subsection (a) and inserting the following:

``SEC. 4B. CONTRACTS DESIGNED TO DEFRAUD OR MISLEAD.

    ``(a) Unlawful Actions.--It shall be unlawful--
            ``(1) for any person, in or in connection with any order to 
        make, or the making of, any contract of sale of any commodity 
        in interstate commerce or for future delivery that is made, or 
        to be made, on or subject to the rules of a designated contract 
        market, for or on behalf of any other person; or
            ``(2) for any person, in or in connection with any order to 
        make, or the making of, any contract of sale of any commodity 
        for future delivery, or other agreement, contract, or 
        transaction subject to paragraphs (1) and (2) of section 5a(g), 
        that is made, or to be made, for or on behalf of, or with, any 
        other person, other than on or subject to the rules of a 
        designated contract market--
                    ``(A) to cheat or defraud or attempt to cheat or 
                defraud the other person;
                    ``(B) willfully to make or cause to be made to the 
                other person any false report or statement or willfully 
                to enter or cause to be entered for the other person 
                any false record;
                    ``(C) willfully to deceive or attempt to deceive 
                the other person by any means whatsoever in regard to 
                any order or contract or the disposition or execution 
                of any order or contract, or in regard to any act of 
                agency performed, with respect to any order or contract 
                for or, in the case of paragraph (2), with the other 
                person; or
                    ``(D)(i) to bucket an order if the order is 
                represented by the person as an order to be executed, 
                or is required to be executed, on or subject to the 
                rules of a designated contract market; or
                    ``(ii) to fill an order by offset against the order 
                or orders of any other person, or willfully and 
                knowingly and without the prior consent of the other 
                person to become the buyer in respect to any selling 
                order of the other person, or become the seller in 
                respect to any buying order of the other person, if the 
                order is represented by the person as an order to be 
                executed, or is required to be executed, on or subject 
                to the rules of a designated contract market unless the 
                order is executed in accordance with the rules of the 
                designated contract market.
    ``(b) Clarification.--Subsection (a)(2) of this section shall not 
obligate any person, in or in connection with a transaction in a 
contract of sale of a commodity for future delivery, or other 
agreement, contract or transaction subject to paragraphs (1) and (2) of 
section 5a(g), with another person, to disclose to the other person 
nonpublic information that may be material to the market price, rate, 
or level of the commodity or transaction, except as necessary to make 
any statement made to the other person in or in connection with the 
transaction, not misleading in any material respect.''.

SEC. 5. COMMISSION RULEMAKING.

    Not later than 180 days after the date of the enactment of this 
Act, the Commission shall issue a proposed rule regarding the 
requirements for an application for registration for an energy trading 
facility, and not later than 270 days after such date of enactment, 
shall issue a final rule regarding the requirements.

SEC. 6. EFFECTIVE DATE.

    (a) In General.--Except as provided in this section, this Act shall 
become effective immediately upon enactment.
    (b) Trading Facilities.--With respect to any trading facility 
operating on the date of enactment of this Act in reliance upon the 
exemption set forth in section 2(h)(3) of the Commodity Exchange Act 
with respect to an energy commodity, the prohibition in section 2(j)(1) 
of the Commodity Exchange Act, as added by this Act, shall not apply, 
if the trading facility submits an application to the Commodity Futures 
Trading Commission (in this section referred to as the ``Commission'') 
for registration as an energy trading facility within 180 days after 
the Commission promulgates a final rule regarding the requirements for 
an application for registration for an energy trading facility, prior 
to a determination by the Commission on whether to approve such 
application.
    (c) Extensions.--(1) At the time the Commission approves an 
application by a trading facility operating on the date of enactment of 
this Act in reliance on the exemption set forth in section 2(h)(3) of 
the Commodity Exchange Act for registration as an energy trading 
facility, the Commission shall, upon the written request of the 
facility, grant an extension of up to 180 days to fully implement a 
requirement applicable under this Act to an energy trading facility.
    (2) The Commission may in its discretion, upon the written request 
of the facility and for good cause, grant an additional extension of up 
to 6 months to fully implement a requirement for which an initial 
extension has been granted under paragraph (1).
    (3) The Commission may not grant any extension under paragraphs (1) 
or (2) for any information reporting or recordkeeping requirement.
    (d) Domestic Trading on Foreign Boards of Trade.--Section 3 shall 
take effect 180 days after the date of the enactment of this Act.
                                 <all>