II 110th CONGRESS 2d Session S. 3129 IN THE SENATE OF THE UNITED STATES June 12, 2008 Mr. Levin (for himself, Mrs. Feinstein, Mr. Durbin, Mr. Dorgan, and Mr. Bingaman) introduced the following bill; which was read twice and referred to the Committee on Agriculture, Nutrition, and Forestry A BILL To amend the Commodity Exchange Act to prevent price manipulation and excessive speculation and to increase transparency with respect to energy trading on foreign exchanges conducted within the United States.

1.

Short title

This Act may be cited as the Close the London Loophole Act of 2008.

2.

Commission authority over traders

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

Commission authority over traders

(1)

In general

Notwithstanding any other provision of this section or any determination made by the Commission to grant relief from the requirements of subsection (a) to become a designated contract market, derivatives transaction execution facility, or other registered entity, in the case of a person located within the United States, or otherwise subject to the jurisdiction of the Commission, trading on a foreign board of trade, exchange, or market located outside the United States (including the territories and or possessions of the United States), the Commission shall have authority under this Act— (A)to apply and enforce section 9, including provisions relating to manipulation or attempted manipulation, the making of false statements, and willful violations of this Act; (B)to require or direct the person to limit, reduce, or liquidate any position to prevent or reduce the threat of price manipulation, excessive speculation, price distortion, or disruption of delivery or the cash settlement process; and (C)to apply such recordkeeping requirements as the Commission determines are necessary. (2)

Consultation

Prior to the issuance of any order under paragraph (1) to reduce a position on a foreign board of trade, exchange, or market located outside the United States (including the territories and possessions of the United States), the Commission shall consult with the foreign board of trade, exchange, or market and the appropriate regulatory authority. (3)

Administration

Nothing in this subsection limits any of the otherwise applicable authorities of the Commission. .

3.

Speculative limits and transparency for off-shore oil trading

Section 4 of the Commodity Exchange Act (7 U.S.C. 6) (as amended by section 2) is amended by adding at the end the following: (f)

Foreign boards of trade

(1)

In general

In the case of any foreign board of trade for which the Commission has granted or is considering an application to grant a board of trade located outside of the United States relief from the requirement of subsection (a) to become a designated contract market, derivatives transaction execution facility, or other registered entity, with respect to an energy commodity that is physically delivered in the United States, prior to continuing to or initially granting the relief, the Commission shall determine that the foreign board of trade— (A)applies comparable principles or requirements regarding the daily publication of trading information and position limits or accountability levels for speculators as apply to a designated contract market, derivatives transaction execution facility, or other registered entity trading energy commodities physically delivered in the United States; and (B)provides such information to the Commission regarding the extent of speculative and nonspeculative trading in the energy commodity that is comparable to the information the Commission determines necessary to publish a Commitment of Traders report for a designated contract market, derivatives transaction execution facility, or other registered entity trading energy commodities physically delivered in the United States. (2)

Existing foreign boards of trade

During the period beginning 1 year after the date of enactment of this subsection and ending 18 months after the date of enactment of this subsection, the Commission shall determine whether to continue to grant relief in accordance with paragraph (1) to any foreign board of trade for which the Commission granted relief prior to the date of enactment of this subsection. .