Short title

This Act may be cited as the

Commodity Prices Oversight and Transparency Act of 2008

Sense of the House on additional funding for Commission

(a)

Findings

The House of Representatives finds that— (1)the Commodity Futures Trading Commission should further examine whether speculators are manipulating futures market prices to cause artificial prices that do not reflect the legitimate forces of supply and demand; (2)the public is concerned that trades executed on foreign boards of trade when linked to the prices of contracts traded on U.S. registered entities may need additional oversight; (3)the exclusive Federal regulator of commodity futures markets, the Commodity Futures Trading Commission, has staffing levels that have dropped to the lowest levels in the 33-year history of the Commission; and (4)the acting Chairman of the Commission has said publicly that an additional 100 employees are needed in light of the inflow of trading volume. (b)

Sense of the House

It is the sense of the House of Representatives that the President should immediately send to Congress a request for additional appropriations for fiscal year 2008 for the Commodity Futures Trading Commission in an amount that is sufficient— (1)to help restore public confidence in commodity futures markets and Federal oversight of those markets; (2)to allow the Commission to reduce the potential threat of market manipulation or congestion by potential imposition of position limitations for speculators should the Commission determine the absence of position limitations for speculators is causing an increase in the price of oil, gasoline, diesel, and other energy commodities; (3)to significantly improve the information technology capabilities of the Commission to help the Commission effectively regulate the commodity futures markets; and (4)to fund at least 100 new full-time positions at the Commission to regulate commodity futures market transactions and to enforce the Commodity Exchange Act (7 U.S.C. 1 et seq.).

Additional Commission employees for improved enforcement

Section 2(a)(7) of the Commodity Exchange Act (7 U.S.C. 2(a)(7)) is amended by adding at the end the following:

(D)

Additional employees

Contingent on sufficient appropriations, as soon as practicable after the date of enactment of this subparagraph, the Commission shall appoint additional full-time employees (in addition to the employees employed by the Commission as of the date of enactment of this subparagraph)— (i)to increase the public transparency of operations in commodity futures markets; (ii)to improve the enforcement of this Act in those markets; and (iii)to carry out such other duties as are prescribed by the Commission.

Accountability and transparency for contracts trading on foreign boards of trade

Section 4 of the Commodity Exchange Act (7 U.S.C. 6) is amended by adding at the end the following:

(e)

Foreign boards of trade

(1)Whenever a foreign board of trade lists for trading a contract of sale of a commodity for future delivery (or related option) which, by its terms, settles against the price of any contract or contracts traded on a registered entity and the Commission determines that it is necessary or appropriate to enhance and coordinate market surveillance and regulatory oversight with respect to trading on the registered entity and the foreign board of trade, the Commission shall contact the foreign board of trade’s applicable foreign futures authority to discuss, adopt, and implement mutually acceptable, enhanced procedures and processes for preventing market manipulation or congestion and ensuring coordinated market surveillance. (2)Whenever a registered entity lists for trading a contract of sale of a commodity for future delivery (or related option) which, by its terms, settles against the price of any contract or contracts in a commodity traded on a foreign board of trade and the foreign futures authority that regulates such foreign board of trade determines that it is necessary or appropriate to enhance and coordinate market surveillance and regulatory oversight with respect to trading on the registered entity and the foreign board of trade, the Commission shall cooperate with any reasonable request from the foreign futures authority to discuss, adopt, and implement mutually acceptable, enhanced procedures and processes for preventing market manipulation or congestion and ensuring coordinated market surveillance. (3)When it is determined necessary or appropriate to enhance and coordinate market surveillance and regulatory oversight under paragraphs (1) or (2) of this subsection, the Commission shall discuss with the applicable foreign futures authority whether, among other processes for preventing market manipulation or congestion and ensuring coordinated market surveillance to be agreed to by the Commission and the foreign futures authority, it is necessary and appropriate to provide for— (A)a foreign board of trade or registered entity to make public daily information on settlement prices, volume, open interest, and opening and closing ranges for the agreement, contract or transaction that is comparable to the daily trading information made public for the contract against which it settles; (B)position limitations (including provisions allowing for exemptions for bona fide hedging transactions or positions) or position accountability for speculators for the agreement, contract, or transaction that are comparable to the position limitations (including provisions allowing for exemptions for bona fide hedging transactions or positions) or position accountability for the contract or contracts against which it settles; (C)the foreign board of trade (or its foreign futures authority) or registered entity to provide information to the Commission or foreign futures authority regarding large trader positions in the agreement, contract, or transaction that is comparable to the large trader position information collected by the foreign futures authority or Commission for the contract or contracts against which it settles; or (D)the foreign board of trade or registered entity to provide information to the Commission or foreign futures authority regarding the extent of trading by bona fide hedgers and other types of traders in the agreement, contract, or transaction that is comparable to the information collected by the foreign futures authority or Commission for the contract or contracts against which it settles.

Liablity of registered persons trading on a foreign board of trade

(a)Section 4(a) of the Commodity Exchange Act (7 U.S.C. 6(a)) is amended by inserting or by subsection (f) after the phrase Unless exempted by the Commission pursuant to subsection (c). (b)Section 4 of the Commodity Exchange Act (7 U.S.C. 6) is further amended by adding at the end the following:

(f)No person registered with the Commission, or exempt from registration by the Commission, under this Act may be found to violate subsection (a) if such person has reason to believe the contract of sale of a commodity for future delivery is made on or subject to the rules of a board of trade that is legally organized under the laws of a foreign country, authorized to act as a board of trade by a foreign futures authority, subject to regulation by such foreign futures authority, and has not been determined by the Commission to be operating in violation of subsection (a).

Contract enforcement for foreign futures contracts

Section 22(a) of the Commodity Exchange Act (7 U.S.C. 25(a)) is amended by adding at the end the following:

(5)No contract of sale of a commodity for future delivery traded or executed on or through the facilities of a board of trade, exchange, or market located outside the United States for purposes of section 4(a) shall be void, voidable, or unenforceable and no party to such contract shall be entitled to rescind or recover any payments made with respect to such contract based upon the failure of the foreign board of trade to comply with any provision of this Act.

Disaggregation of index funds and other data in commodity markets

Section 4 of the Commodity Exchange Act (7 U.S.C. 6) is further amended by adding at the end the following:

(g)

Index traders and swap dealers; disaggregation of index funds

(1)

Reporting

The Commission shall— (A)issue a proposed rule regarding routine reporting requirements for index traders and swap dealers (as those terms are defined by the Commission) in futures markets for exempt and agricultural commodities not later than 180 days after the date of enactment of this subsection, and issue a final rule regarding such reporting not later than 270 days after the date of enactment of this subsection; and (B)subject to the provisions of section 8, disaggregate and make public monthly information on the positions and value of index funds and other passive positions (as that term is defined by the Commission) where such positions are material to a commodity futures or options markets. (2)

Report

The Commission shall, at such intervals as the Commission determines necessary to provide current information and recommendations that will further congressional oversight of the futures markets, submit a report to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate regarding— (A)the scope of commodity index trading in the futures market; (B)whether, and if so how, classification of index traders and swap dealers in the future markets can be improved for published Commission reports and other regulatory purposes; and (C)whether, based on review of the trading practices for index traders in the futures markets— (i)index trading activity is adversely affecting the price discovery process in the futures markets; and (ii)different practices and controls should be required to protect the price discovery process.