[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2448 Introduced in House (IH)]
111th CONGRESS
1st Session
H. R. 2448
To provide for regulation of futures transactions involving energy
commodities, to regulate credit default swaps, to strengthen the
enforcement authorities of the Federal Energy Regulatory Commission
under the Natural Gas Act, Natural Gas Policy Act of 1978, and the
Federal Power Act, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 14, 2009
Mr. Stupak (for himself, Mr. Doyle, Mr. Inslee, Mr. Van Hollen, Mr.
Bishop of New York, Mr. Carney, Mr. Larson of Connecticut, Mr. Wilson
of Ohio, Ms. Slaughter, Mr. Gene Green of Texas, Ms. Kilpatrick of
Michigan, and Mr. McHugh) introduced the following bill; which was
referred to the Committee on Agriculture, and in addition to the
Committees on Energy and Commerce and Financial Services, for a period
to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the
committee concerned
_______________________________________________________________________
A BILL
To provide for regulation of futures transactions involving energy
commodities, to regulate credit default swaps, to strengthen the
enforcement authorities of the Federal Energy Regulatory Commission
under the Natural Gas Act, Natural Gas Policy Act of 1978, and the
Federal Power Act, 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 ``Prevent Unfair Manipulation of
Prices Act of 2009''.
SEC. 2. TABLE OF CONTENTS.
The table of contents of this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Regulation of certain transactions in derivatives involving
energy commodities.
Sec. 4. No effect on authority of the Federal Energy Regulatory
Commission.
Sec. 5. Inspector general of the Commodity Futures Trading Commission.
Sec. 6. Settlement and clearing through registered derivatives clearing
organizations.
Sec. 7. Limitation on eligibility to purchase a credit default swap.
Sec. 8. Transaction fees.
Sec. 9. No effect on authority of the Federal Trade Commission.
Sec. 10. Cease-and-desist authority.
Sec. 11. Natural Gas Act refunds.
Sec. 12. Regulation of carbon derivatives markets.
SEC. 3. REGULATION OF CERTAIN TRANSACTIONS IN DERIVATIVES INVOLVING
ENERGY COMMODITIES.
(a) Energy Commodity Defined.--Section 1a of the Commodity Exchange
Act (7 U.S.C. 1a) is amended--
(1) in paragraph (14), by inserting ``, an energy
commodity,'' after ``excluded commodity'';
(2) by redesignating paragraphs (13) through (21) and
paragraphs (22) through (34) as paragraphs (14) through (22)
and paragraphs (24) through (36), respectively;
(3) by inserting after paragraph (12) the following:
``(13) Energy commodity.--The term `energy commodity'
means--
``(A) coal;
``(B) crude oil, gasoline, diesel fuel, jet fuel,
heating oil, and propane;
``(C) electricity (excluding financial transmission
rights which are subject to regulation and oversight by
the Federal Energy Regulatory Commission);
``(D) natural gas; and
``(E) any other substance (other than an excluded
commodity, a metal, or an agricultural commodity) that
is used as a source of energy, as the Commission, in
its discretion, deems appropriate.''; and
(4) by inserting after paragraph (22) (as so redesignated
by paragraph (2) of this subsection) the following:
``(23) Included energy transaction.--The term `included
energy transaction' means a contract, agreement, or transaction
in an energy commodity for future delivery that provides for a
delivery point of the energy commodity in the United States or
a territory or possession of the United States, or that is
offered or transacted on or through a computer terminal located
in the United States.''.
(b) Extension of Regulatory Authority to Swaps Involving Energy
Transactions.--Section 2(g) of such Act (7 U.S.C. 2(g)) is amended by
inserting ``or an energy commodity'' after ``agricultural commodity''.
(c) Elimination of Exemption for Over-the-Counter Swaps Involving
Energy Commodities.--Section 2(h)(1) of such Act (7 U.S.C. 2(h)(1)) is
amended by inserting ``(other than an energy commodity)'' after
``exempt commodity''.
(d) Extension of Regulatory Authority to Included Energy
Transactions on Foreign Boards of Trade.--Section 4 of such Act (7
U.S.C. 6) is amended--
(1) in subsection (a), by inserting ``, and which is not an
included energy transaction'' after ``territories or
possessions'' the 2nd place it appears; and
(2) in subsection (b), by adding at the end the following:
``The preceding sentence shall not apply with respect to
included energy transactions.''.
(e) Limitation of General Exemptive Authority of the CFTC With
Respect to Included Energy Transactions.--
(1) In general.--Section 4(c) of such Act (7 U.S.C. 6(c))
is amended by adding at the end the following:
``(6) The Commission may not exempt any included energy
transaction from the requirements of subsection (a), unless the
Commission provides 60 days advance notice to the Congress and
the Position Limit Energy Advisory Group and solicits public
comment about the exemption request and any proposed Commission
action.''.
(2) Nullification of no-action letter exemptions to certain
requirements applicable to included energy transactions.--
Beginning 180 days after the date of the enactment of this Act,
any exemption provided by the Commodity Futures Trading
Commission that has allowed included energy transactions (as
defined in section 1a(13) of the Commodity Exchange Act) to be
conducted without regard to the requirements of section 4(a) of
such Act shall be null and void.
(f) Requirement To Establish Uniform Speculative Position Limits
for Energy Transactions.--
(1) In general.--Section 4a(a) of such Act (7 U.S.C. 6a(a))
is amended--
(A) by inserting ``(1)'' after ``(a)'';
(B) by inserting after the 2nd sentence the
following: ``With respect to energy transactions, the
Commission shall fix limits on the aggregate number of
positions which may be held by any person for each
month across all markets subject to the jurisdiction of
the Commission.'';
(C) in the 4th sentence by inserting ``, consistent
with the 3rd sentence,'' after ``Commission''; and
(D) by adding after and below the end the
following:
``(2)(A) Not later than 60 days after the date of the enactment of
this paragraph, the Commission shall convene a Position Limit Energy
Advisory Group consisting of representatives from--
``(i) 7 predominantly commercial short hedgers of the
actual energy commodity for future delivery;
``(ii) 7 predominantly commercial long hedgers of the
actual energy commodity for future delivery;
``(iii) 4 non-commercial participants in markets for energy
commodities for future delivery; and
``(iv) each designated contract market or derivatives
transaction execution facility upon which a contract in the
energy commodity for future delivery is traded, and each
electronic trading facility that has a significant price
discovery contract in the energy commodity.
``(B) Not later than 60 days after the date on which the advisory
group is convened under subparagraph (A), and annually thereafter, the
advisory group shall submit to the Commission advisory recommendations
regarding the position limits to be established in paragraph (1).
``(C) The Commission shall have exclusive authority to grant
exemptions for bona fide hedging transactions and positions from
position limits imposed under this Act on energy transactions.''.
(2) Conforming amendments.--
(A) Significant price discovery contracts.--Section
2(h)(7) of such Act (7 U.S.C. 2(h)(7)) is amended--
(i) in subparagraph (A)--
(I) by inserting ``of this
paragraph and section 4a(a)'' after
``(B) through (D)''; and
(II) by inserting ``of this
paragraph'' before the period; and
(ii) in subparagraph (C)(ii)(IV)--
(I) in the heading, by striking
``limitations or''; and
(II) by striking ``position
limitations or''.
(B) Contracts traded on or through designated
contract markets.--Section 5(d)(5) of such Act (7
U.S.C. 7(d)(5)) is amended--
(i) in the heading by striking
``limitations or''; and
(ii) by striking ``position limitations
or''.
(C) Contracts traded on or through derivatives
transaction execution facilities.--Section 5a(d)(4) of
such Act (7 U.S.C. 7a(d)(4)) is amended--
(i) in the heading by striking
``limitations or''; and
(ii) by striking ``position limits or''.
(g) Elimination of the Swaps Loophole.--Section 4a(c) of such Act
(7 U.S.C. 6a(c)) is amended--
(1) by inserting ``(1)'' after ``(c)''; and
(2) by adding after and below the end the following:
``(2) For the purposes of contracts of sale for future delivery and
options on such contracts or commodities, the Commission shall define
what constitutes a bona fide hedging transaction or position as a
transaction or position that--
``(A)(i) represents a substitute for transactions made or
to be made or positions taken or to be taken at a later time in
a physical marketing channel;
``(ii) is economically appropriate to the reduction of
risks in the conduct and management of a commercial enterprise;
and
``(iii) arises from the potential change in the value of--
``(I) assets that a person owns, produces,
manufactures, processes, or merchandises or anticipates
owning, producing, manufacturing, processing, or
merchandising;
``(II) liabilities that a person owns or
anticipates incurring; or
``(III) services that a person provides, purchases,
or anticipates providing or purchasing; or
``(B) reduces risks attendant to a position resulting from
a transaction that--
``(i) was executed pursuant to subsection (d), (g),
(h)(1), or (h)(2) of section 2, or an exemption issued
by the Commission by rule, regulation or order; and
``(ii) was executed opposite a counterparty for
which the transaction would qualify as a bona fide
hedging transaction pursuant to paragraph (2)(A) of
this subsection.''.
(h) Detailed Reporting and Disaggregation of Market Data.--Section
4 of such Act (7 U.S.C. 6) is amended by adding at the end the
following:
``(e) Detailed Reporting and Disaggregation of Market Data.--
``(1) Index traders and swap dealers reporting.--The
Commission shall issue a proposed rule defining and classifying
index traders and swap dealers (as those terms are defined by
the Commission) for purposes of data reporting requirements and
setting routine detailed reporting requirements for any
positions of such entities in contracts traded on designated
contract markets, over-the-counter markets, derivatives
transaction execution facilities, foreign boards of trade
subject to section 4(f), and electronic trading facilities with
respect to significant price discovery contracts not later than
120 days after the date of the enactment of this subsection,
and issue a final rule within 180 days after such date of
enactment.
``(2) Disaggregation of index funds and other data in
markets.--Subject to section 8 and beginning within 60 days of
the issuance of the final rule required by paragraph (1), the
Commission shall disaggregate and make public weekly--
``(A) the number of positions and total notional
value of index funds and other passive, long-only and
short-only positions (as defined by the Commission) in
all markets to the extent such information is
available; and
``(B) data on speculative positions relative to
bona fide physical hedgers in those markets to the
extent such information is available.
``(3) Disclosure of identity of holders of positions in
indexes in excess of position limits.--The Commission shall
include in its weekly Commitment of Trader reports the identity
of each person who holds a position in an index in excess of a
limit imposed under section 4i.''.
(i) Authority To Set Limits To Prevent Excessive Speculation in
Indexes.--
(1) In general.--Section 4a of such Act (7 U.S.C. 6a) is
amended by adding at the end the following:
``(f) The provisions of this section shall apply to the amounts of
trading which may be done or positions which may be held by any person
under contracts of sale of an index for future delivery on or subject
to the rules of any contract market, derivatives transaction execution
facility, or over-the-counter market, or on an electronic trading
facility with respect to a significant price discovery contract, in the
same manner in which this section applies to contracts of sale of a
commodity for future delivery.''.
(2) Regulations.--The Commodity Futures Trading Commission
shall issue regulations under section 4a(f) of the Commodity
Exchange Act within 180 days after the date of the enactment of
this Act.
SEC. 4. NO EFFECT ON AUTHORITY OF THE FEDERAL ENERGY REGULATORY
COMMISSION.
Section 2 of the Commodity Exchange Act (7 U.S.C. 2) is amended by
adding at the end the following:.
``(j) No Effect on FERC Authority.--This Act shall not be
interpreted to affect the jurisdiction of the Federal Energy Regulatory
Commission with respect to the authority of the Federal Energy
Regulatory Commission under the Federal Power Act (16 U.S.C. 791a et
seq.), the Natural Gas Act (15 U.S.C. 717 et seq.), or other law to
obtain information, carry out enforcement actions, or otherwise carry
out the responsibilities of the Federal Energy Regulatory
Commission.''.
SEC. 5. INSPECTOR GENERAL OF THE COMMODITY FUTURES TRADING COMMISSION.
(a) Elevation of Office.--
(1) Inclusion of cftc in definition of establishment.--
(A) Section 11(1) of the Inspector General Act of
1978 (5 U.S.C. App.) is amended by striking ``or the
Federal Cochairpersons of the Commissions established
under section 15301 of title 40, United States Code;''
and inserting ``the Federal Cochairpersons of the
Commissions established under section 15301 of title
40, United States Code; or the Chairman of the
Commodity Futures Trading Commission;''.
(B) Section 11(2) of the Inspector General Act of
1978 (5 U.S.C. App.) is amended by striking ``or the
Commissions established under section 15301 of title
40, United States Code,'' and inserting ``the
Commissions established under section 15301 of title
40, United States Code, or the Commodity Futures
Trading Commission,''.
(2) Exclusion of cftc from definition of designated federal
entity.--Section 8G(a)(2) of the Inspector General Act of 1978
(5 U.S.C. App.) is amended by striking ``the Commodity Futures
Trading Commission,''.
(b) Effective Date; Transition Rule.--
(1) Effective date.--The amendments made by this section
shall take effect 30 days after the date of the enactment of
this Act.
(2) Transition rule.--An individual serving as Inspector
General of the Commodity Futures Trading Commission on the
effective date of this section pursuant to an appointment made
under section 8G of the Inspector General Act of 1978 (5 U.S.C.
App.)--
(A) may continue so serving until the President
makes an appointment under section 3(a) of such Act
consistent with the amendments made by this section;
and
(B) shall, while serving under subparagraph (A),
remain subject to the provisions of section 8G of such
Act which apply with respect to the Commodity Futures
Trading Commission.
SEC. 6. SETTLEMENT AND CLEARING THROUGH REGISTERED DERIVATIVES CLEARING
ORGANIZATIONS.
(a) In General.--
(1) Application to excluded derivative transactions.--
(A) Section 2(d)(1) of the Commodity Exchange Act
(7 U.S.C. 2(d)(1)) is amended--
(i) by striking ``and'' at the end of
subparagraph (A);
(ii) by striking the period at the end of
subparagraph (B) and inserting ``and''; and
(iii) by adding at the end the following:
``(C) except as provided in section 4(f), the
agreement, contract, or transaction is settled and
cleared through a derivatives clearing organization
registered with the Commission.''.
(B) Section 2(d)(2) of such Act (7 U.S.C. 2(d)(2))
is amended--
(i) by striking ``and'' at the end of
subparagraph (B);
(ii) by striking the period at the end of
subparagraph (C) and inserting ``; and''; and
(iii) by adding at the end the following:
``(D) except as provided in section 4(f), the
agreement, contract, or transaction is settled and
cleared through a derivatives clearing organization
registered with the Commission.''.
(2) Application to certain swap transactions.--Section 2(g)
of such Act (7 U.S.C. 2(g)) is amended--
(A) by striking ``and'' at the end of paragraph
(2);
(B) by striking the period at the end of paragraph
(3) and inserting ``; and''; and
(C) by adding at the end the following:
``(4) except as provided in section 4(f), settled and
cleared through a derivatives clearing organization registered
with the Commission.''.
(3) Application to certain transactions in exempt
commodities.--
(A) Section 2(h)(1) of such Act (7 U.S.C. 2(h)(1))
is amended--
(i) by striking ``and'' at the end of
subparagraph (A);
(ii) by striking the period at the end of
subparagraph (B) and inserting ``; and''; and
(iii) by adding at the end the following:
``(C) except as provided in section 4(f), is
settled and cleared through a derivatives clearing
organization registered with the Commission.''.
(B) Section 2(h)(3) of such Act (7 U.S.C. 2(h)(3))
is amended--
(i) by striking ``and'' at the end of
subparagraph (A);
(ii) by striking the period at the end of
subparagraph (B) and inserting ``; and''; and
(iii) by adding at the end the following:
``(C) except as provided in section 4(f), settled
and cleared through a derivatives clearing organization
registered with the Commission.''.
(4) General exemptive authority.--Section 4(c)(1) of such
Act (7 U.S.C. 6(c)(1)) is amended by inserting ``the agreement,
contract, or transaction, except as provided in section 4(h),
will be settled and cleared through a derivatives clearing
organization registered with the Commission and'' before ``the
Commission determines''.
(5) Conforming amendment relating to significant price
discovery contracts.--Section 2(h)(7)(D) of such Act (7 U.S.C.
2(h)(7)(D)) is amended by striking the heading for the
subparagraph and all that follows through ``As part of'' and
inserting the following:
``(D) Review of implementation.--As part of''.
(b) Alternatives To Clearing Through Designated Clearing
Organizations.--Section 4 of such Act (7 U.S.C. 6), as amended by
section 3(h) of this Act, is amended by adding at the end the
following:
``(f) Alternatives To Clearing Through Designated Clearing
Organizations.--
``(1) Settlement and clearing through certain other
regulated entities.--An agreement, contract, or transaction, or
class thereof, relating to an excluded commodity, that would
otherwise be required to be settled and cleared by section
2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 2(h)(1)(C), or 2(h)(3)(C) of
this Act, or subsection (c)(1) of this section may be settled
and cleared through an entity listed in subsections (a) or (b)
of section 409 of the Federal Deposit Insurance Corporation
Improvement Act of 1991.
``(2) Waiver of clearing requirement.--
``(A) The Commission, in its discretion, may exempt
an agreement, contract, or transaction, or class
thereof, that would otherwise be required by section
2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 2(h)(1)(C), or
2(h)(3)(C) of this Act, or subsection (c)(1) of this
section to be settled and cleared through a derivatives
clearing organization registered with the Commission
from such requirement.
``(B) In granting exemptions pursuant to
subparagraph (A), the Commission shall consult with the
Securities and Exchange Commission and the Board of
Governors of the Federal Reserve System regarding
exemptions that relate to excluded commodities or
entities for which the Securities Exchange Commission
or the Board of Governors of the Federal Reserve System
serve as the primary regulator.
``(C) Before granting an exemption pursuant to
subparagraph (A), the Commission shall find that the
agreement, contract, or transaction, or class thereof--
``(i) is highly customized as to its
material terms and conditions;
``(ii) is transacted infrequently;
``(iii) does not serve a significant price-
discovery function in the marketplace; and
``(iv) is being entered into by parties who
can demonstrate the financial integrity of the
agreement, contract, or transaction and their
own financial integrity, as such terms and
standards are determined by the Commission. The
standards may include, with respect to any
federally regulated financial entity for which
net capital requirements are imposed, a net
capital requirement associated with any
agreement, contract, or transaction subject to
an exemption from the clearing requirement that
is higher than the net capital requirement that
would be associated with such a transaction
were it cleared.
``(D) Any agreement, contract, or transaction, or
class thereof, which is exempted pursuant to
subparagraph (A) shall be reported to the Commission in
a manner designated by the Commission, or to such other
entity the Commission deems appropriate.
``(E) The Commission, the Securities and Exchange
Commission, and the Board of Governors of the Federal
Reserve System shall enter into a memorandum of
understanding by which the information reported to the
Commission pursuant to subparagraph (D) with regard to
excluded commodities or entities for which the
Securities Exchange Commission or the Board of
Governors of the Federal Reserve System serve as the
primary regulator may be provided to the other
agencies.
``(g) Spot and Forward Exclusion.--The settlement and clearing
requirements of section 2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 2(h)(1)(C),
2(h)(3)(C), or 4(c)(1) shall not apply to an agreement, contract, or
transaction of any cash commodity for immediate or deferred shipment or
delivery, as defined by the Commission.''.
(c) Additional Requirements Applicable to Applicants for
Registration as a Derivative Clearing Organization.--Section 5b(c)(2)
of such Act (7 U.S.C. 7a-1(c)(2)) is amended by adding at the end the
following:
``(O) Disclosure of general information.--The
applicant shall disclose publicly and to the Commission
information concerning--
``(i) the terms and conditions of
contracts, agreements, and transactions cleared
and settled by the applicant;
``(ii) the conventions, mechanisms, and
practices applicable to the contracts,
agreements, and transactions;
``(iii) the margin-setting methodology and
the size and composition of the financial
resource package of the applicant; and
``(iv) other information relevant to
participation in the settlement and clearing
activities of the applicant.
``(P) Daily publication of trading information.--
The applicant shall make public daily information on
settlement prices, volume, and open interest for
contracts settled or cleared pursuant to the
requirements of 2(d)(1)(C), 2(d)(2)(D), 2(g)(4),
2(h)(1)(C), 2(h)(3)(C) or 4(c)(1) of this Act by the
applicant if the Commission determines that the
contracts perform a significant price discovery
function for transactions in the cash market for the
commodity underlying the contracts.
``(Q) Fitness standards.--The applicant shall
establish and enforce appropriate fitness standards for
directors, members of any disciplinary committee, and
members of the applicant, and any other persons with
direct access to the settlement or clearing activities
of the applicant, including any parties affiliated with
any of the persons described in this subparagraph.''.
(d) Amendments.--
(1) Section 409 of the Federal Deposit Insurance
Corporation Improvement Act of 1991 (12 U.S.C. 4422) is amended
by adding at the end the following:
``(c) Clearing Requirement.--A multilateral clearing organization
described in subsections (a) or (b) of this section shall comply with
requirements similar to the requirements of sections 5b and 5c or the
Commodity Exchange Act.''.
(2) Section 407 of the Legal Certainty for Bank Products
Act of 2000 (7 U.S.C. 27e) is amended by inserting ``and the
settlement and clearing requirements of sections 2(d)(1)(C),
2(d)(2)(D), 2(g)(4), 2(h)(1)(C), 2(h)(3)(C), and 4(c)(1) of
such Act'' after ``the clearing of covered swap agreements''.
(e) Effective Date.--The amendments made by this section shall take
effect 150 days after the date of the enactment of this Act.
(f) Transition Rule.--Any agreement, contract, or transaction
entered into before the date of the enactment of this Act or within 150
days after such date of enactment, in reliance on subsection (d), (g),
(h)(1), or (h)(3) of section 2 of the Commodity Exchange Act or any
other exemption issued by the Commission Futures Trading Commission by
rule, regulation, or order shall, within 90 days after such date of
enactment, unless settled and cleared through an entity registered with
the Commission as a derivatives clearing organization or another
clearing entity pursuant to section 4(f) of such Act, be reported to
the Commission in a manner designated by the Commission, or to such
other entity as the Commission deems appropriate.
SEC. 7. LIMITATION ON ELIGIBILITY TO PURCHASE A CREDIT DEFAULT SWAP.
(a) In General.--Section 4c of the Commodity Exchange Act (7 U.S.C.
6c) is amended by adding at the end the following:
``(h) Limitation on Eligibility To Purchase a Credit Default
Swap.--It shall be unlawful for any person to enter into a credit
default swap unless the person--
``(1) owns a credit instrument which is insured by the
credit default swap;
``(2) would experience financial loss if an event that is
the subject of the credit default swap occurs with respect to
the credit instrument; and
``(3) meets such minimum capital adequacy standards as may
be established by the Commission, in consultation with the
Board of Governors of the Federal Reserve System, or such more
stringent minimum capital adequacy standards as may be
established by or under the law of any State in which the swap
is originated or entered into, or in which possession of the
contract involved takes place.''.
(b) Elimination of Preemption of State Bucketing Laws Regarding
Naked Credit Default Swaps.--Section 12(e)(2)(B) of such Act (7 U.S.C.
16(e)(2)(B)) is amended by inserting ``(other than a credit default
swap in which the purchaser of the swap would not experience financial
loss if an event that is the subject of the swap occurred)'' before
``that is excluded''.
(c) Definition of Credit Default Swap.--Section 1a of such Act (7
U.S.C. 1a), as amended by section 3(a) of this Act, is amended by
adding at the end the following:
``(37) Credit default swap.--the term `credit default swap'
means a contract which insures a party to the contract against
the risk that an entity may experience a loss of value as a
result of an event specified in the contract, such as a default
or credit downgrade. A credit default swap that is traded on or
cleared by a registered entity shall be excluded from the
definition of a security as defined in this Act and in section
2(a)(1) of the Securities Act of 1933 or section 3(a)(10) of
the Securities Exchange Act of 1934, except it shall be deemed
a security solely for purpose of enforcing prohibitions against
insider trading in sections 10 and 16 of the Securities
Exchange Act of 1934.''.
(d) Effective Date.--The amendments made by this section shall be
effective for credit default swaps (as defined in section 1a(37) of the
Commodity Exchange Act) entered into after 60 days after the date of
the enactment of this section.
SEC. 8. TRANSACTION FEES.
(a) In General.--Section 12 of the Commodity Exchange Act (7 U.S.C.
16) is amended by redesignating subsections (e), (f), and (g) as
subsections (f), (g), and (h), respectively, and inserting after
subsection (d) the following:
``(e) Clearing Fees.--
``(1) In general.--The Commission shall, in accordance with
this subsection, charge and collect from each registered
clearing organization, and each such organization shall pay to
the Commission, transaction fees at a rate calculated to
recover the costs to the Federal Government of the supervision
and regulation of futures markets, except those directly
related to enforcement.
``(2) Fees assessed per side of cleared contracts.--
``(A) In general.--The Commission shall determine
the fee rate referred to in paragraph (1), and shall
apply the fee rate per side of any transaction cleared.
``(B) Authority to delegate.--The Commission may
determine the procedures by which the fee rate is to be
applied on the transactions subject to the fee, or
delegate the authority to make the determination to any
appropriate derivatives clearing organization.
``(3) Exemptions.--The Commision may not impose a fee under
paragraph (1) on--
``(A) a class of contracts or transactions if the
Commission finds that it is in the public interest to
exempt the class from the fee; or
``(B) a contract or transaction cleared by a
registered derivatives clearing organization that is--
``(i) subject to fees under section 31 of
the Securities Exchange Act of 1934; or
``(ii) a security as defined in the
Securities Act of 1933 or the Securities
Exchange Act of 1934.
``(4) Dates for payment of fees.--The fees imposed under
paragraph (1) shall be paid on or before--
``(A) March 15 of each year, with respect to
transactions occurring on or after the preceding
September 1 and on or before the preceding December 31;
and
``(B) September 15 of each year, with respect to
transactions occurring on or after the preceding
January 1 and on or before the preceding August 31.
``(5) Annual adjustment of fee rates.--
``(A) In general.--Not later than April 30 of each
fiscal year, the Commission shall, by order, adjust
each fee rate determined under paragraph (2) for the
fiscal year to a uniform adjusted rate that, when
applied to the estimated aggregate number of cleared
sides of transactions for the fiscal year, is
reasonably likely to produce aggregate fee receipts
under this subsection for the fiscal year equal to the
target offsetting receipt amount for the fiscal year.
``(B) Definitions.--In subparagraph (A):
``(i) Estimated aggregate number of cleared
sides of transactions.--The term `estimated
aggregate number of cleared sides of
transactions' means, with respect to a fiscal
year, the aggregate number of cleared sides of
transactions to be cleared by registered
derivatives clearing organizations during the
fiscal year, as estimated by the Commission,
after consultation with the Office of
Management and Budget, using the methodology
required for making projections pursuant to
section 257 of the Balanced Budget and
Emergency Deficit Control Act of 1985.
``(ii) Target offsetting receipt amount.--
The term `target offsetting receipt amount'
means, with respect to a fiscal year, the total
level of Commission budget authority for all
non-enforcement activities of the Commission,
as contained in the regular appropriations Acts
for the fiscal year.
``(C) No judicial review.--An adjusted fee rate
prescribed under subparagraph (A) shall not be subject
to judicial review.
``(6) Publication.--Not later than April 30 of each fiscal
year, the Commission shall cause to be published in the Federal
Register notices of the fee rates applicable under this
subsection for the succeeding fiscal year, and any estimate or
projection on which the fee rates are based.
``(7) Inapplicability of certain procedural rules.--Section
553 of title 5, United States Code, shall not apply with
respect to any exercise of authority under this subsection.
``(8) Establishment of futures and options transaction fee
account; deposit of fees.--There is established in the Treasury
of the United States an account which shall be known as the
`Futures and Options Transaction Fee Account'. All fees
collected under this subsection for a fiscal year shall be
deposited in the account. Amounts in the account are authorized
to be appropriated to fund the expenditures of the
Commission.''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply to fiscal years beginning 30 or more days after the date of the
enactment of this Act.
(c) Transition Rule.--If this section becomes law after March 31
and before September 1 of a fiscal year, then paragraphs (5)(A) and (6)
of section 12(e) of the Commodity Exchange Act shall be applied, in the
case of the 1st fiscal year beginning after the date of the enactment
of this Act, by substituting ``August 31'' for ``April 30''.
SEC. 9. NO EFFECT ON AUTHORITY OF THE FEDERAL TRADE COMMISSION.
Nothing in this Act shall be interpreted to affect or diminish the
jurisdiction or authority of the Federal Trade Commission with respect
to its authorities under the Federal Trade Commission Act (15 U.S.C. 41
et seq.) or the Energy Independence and Security Act of 2007 (Public
Law 110-140) to obtain information, to carry out enforcement activities
or otherwise carry out the responsibilities of the Federal Trade
Commission.
SEC. 10. CEASE-AND-DESIST AUTHORITY.
(a) Natural Gas Act.--Section 20 of the Natural Gas Act (15 U.S.C.
717s) is amended by adding the following at the end:
``(e) Cease-and-Desist Proceedings; Temporary Orders; Authority of
the Commission.--
``(1) In general.--If the Commission finds, after notice
and opportunity for hearing, that any entity may be violating,
may have violated, or may be about to violate any provision of
this Act, or any rule, regulation, restriction, condition, or
order made or imposed by the Commission under the authority of
this Act, the Commission may publish its findings and issue an
order requiring such entity, and any other entity that is, was,
or would be a cause of the violation, due to an act or omission
the entity knew or should have known would contribute to such
violation, to cease and desist from committing or causing such
violation and any future violation of the same provision, rule,
or regulation. Such order may, in addition to requiring an
entity to cease and desist from committing or causing a
violation, require such entity to comply, to provide an
accounting and disgorgement, or to take steps to effect
compliance, with such provision, rule, or regulation, upon such
terms and conditions and within such time as the Commission may
specify in such order. Any such order may, as the Commission
deems appropriate, require future compliance or steps to effect
future compliance, either permanently or for such period of
time as the Commission may specify.
``(2) Timing of entry.--An order issued under this
subsection shall be entered only after notice and opportunity
for a hearing, unless the Commission determines that notice and
hearing prior to entry would be impracticable or contrary to
the public interest.
``(f) Hearing.--The notice instituting proceedings pursuant to
subsection (e) shall fix a hearing date not earlier than 30 days nor
later than 60 days after service of the notice unless an earlier or a
later date is set by the Commission with the consent of any respondent
so served.
``(g) Temporary Order.--Whenever the Commission determines that--
``(1) a respondent may take actions to dissipate or convert
assets prior to the completion of the proceedings referred to
in subsection (e), and such assets would be necessary to comply
with or otherwise satisfy a final enforcement order of the
Commission pursuant to alleged violations or threatened
violations specified in the notice instituting proceedings, or
``(2) a respondent is engaged in actual or threatened
violations of this Act or a Commission rule, regulation,
restriction or order referred to in subsection (e),
the Commission may issue a temporary order requiring the respondent to
take such action to prevent dissipation or conversion of assets,
significant harm to energy consumers, or substantial harm to the public
interest, frustration of the Commission's ability to conduct the
proceedings, or frustration of the Commission's ability to redress said
violation at the conclusion of the proceedings, as the Commission deems
appropriate pending completion of such proceedings.
``(h) Review of Temporary Orders.--
``(1) Commission review.--At any time after the respondent
has been served with a temporary cease-and-desist order
pursuant to subsection (g), the respondent may apply to the
Commission to have the order set aside, limited, or suspended.
If the respondent has been served with a temporary cease-and-
desist order entered without a prior Commission hearing, the
respondent may, within 10 days after the date on which the
order was served, request a hearing on such application and the
Commission shall hold a hearing and render a decision on such
application at the earliest possible time.
``(2) Judicial review.--Within--
``(A) 10 days after the date the respondent was
served with a temporary cease-and-desist order entered
with a prior Commission hearing; or
``(B) 10 days after the Commission renders a
decision on an application and hearing under paragraph
(1), with respect to any temporary cease-and-desist
order entered without a prior Commission hearing, the
respondent may apply to the United States district
court for the district in which the respondent resides
or has its principal place of business, or for the
District of Columbia, for an order setting aside,
limiting, or suspending the effectiveness or
enforcement of the order, and the court shall have
jurisdiction to enter such an order. A respondent
served with a temporary cease-and-desist order entered
without a prior Commission hearing may not apply to the
court except after hearing and decision by the
Commission on the respondent's application under
paragraph (1) of this subsection.
``(3) No automatic stay of temporary order.--The
commencement of proceedings under paragraph (2) of this
subsection shall not, unless specifically ordered by the court,
operate as a stay of the Commission's order.
``(4) Exclusive review.--Sections 19(d) and 24 shall not
apply to a temporary order entered pursuant to this section.
``(i) Implementation.--The Commission is authorized to adopt rules,
regulations, and orders as it deems appropriate to implement this
section.''.
(b) Federal Power Act.--Section 314 of the Federal Power Act (16
U.S.C. 825m) is amended by adding the following at the end:
``(e) Cease-and-Desist Proceedings; Temporary Orders; Authority of
the Commission.--
``(1) In general.--If the Commission finds, after notice
and opportunity for hearing, that any entity may be violating,
may have violated, or may be about to violate any provision of
this Act, or any rule, regulation, restriction, condition, or
order made or imposed by the Commission under the authority of
this Act, the Commission may publish its findings and issue an
order requiring such entity, and any other entity that is, was,
or would be a cause of the violation, due to an act or omission
the entity knew or should have known would contribute to such
violation, to cease and desist from committing or causing such
violation and any future violation of the same provision, rule,
or regulation. Such order may, in addition to requiring an
entity to cease and desist from committing or causing a
violation, require such entity to comply, to provide an
accounting and disgorgement, or to take steps to effect
compliance, with such provision, rule, or regulation, upon such
terms and conditions and within such time as the Commission may
specify in such order. Any such order may, as the Commission
deems appropriate, require future compliance or steps to effect
future compliance, either permanently or for such period of
time as the Commission may specify.
``(2) Timing of entry.--An order issued under this
subsection shall be entered only after notice and opportunity
for a hearing, unless the Commission determines that notice and
hearing prior to entry would be impracticable or contrary to
the public interest.
``(3) Hearing.--The notice instituting proceedings pursuant
to paragraph (1) shall fix a hearing date not earlier than 30
days nor later than 60 days after service of the notice unless
an earlier or a later date is set by the Commission with the
consent of any respondent so served.
``(4) Temporary order.--Whenever the Commission determines
that--
``(A) a respondent may take actions to dissipate or
convert assets prior to the completion of the
proceedings referred to in paragraph (1), and such
assets would be necessary to comply with or otherwise
satisfy a final enforcement order of the Commission
pursuant to alleged violations or threatened violations
specified in the notice instituting proceedings, or
``(B) a respondent is engaged in actual or
threatened violations of this Act or a Commission rule,
regulation, restriction or order referred to in
paragraph (1),
the Commission may issue a temporary order requiring the
respondent to take such action to prevent dissipation or
conversion of assets, significant harm to energy consumers, or
substantial harm to the public interest, frustration of the
Commission's ability to conduct the proceedings, or frustration
of the Commission's ability to redress said violation at the
conclusion of the proceedings, as the Commission deems
appropriate pending completion of such proceedings.
``(5) Review of temporary orders.--
``(A) Commission review.--At any time after the
respondent has been served with a temporary cease-and-
desist order pursuant to paragraph (4), the respondent
may apply to the Commission to have the order set
aside, limited, or suspended. If the respondent has
been served with a temporary cease-and-desist order
entered without a prior Commission hearing, the
respondent may, within 10 days after the date on which
the order was served, request a hearing on such
application and the Commission shall hold a hearing and
render a decision on such application at the earliest
possible time.
``(B) Judicial review.--Within--
``(i) 10 days after the date the respondent
was served with a temporary cease-and-desist
order entered with a prior Commission hearing;
or
``(ii) 10 days after the Commission renders
a decision on an application and hearing under
subparagraph (A), with respect to any temporary
cease-and-desist order entered without a prior
Commission hearing, the respondent may apply to
the United States district court for the
district in which the respondent resides or has
its principal place of business, or for the
District of Columbia, for an order setting
aside, limiting, or suspending the
effectiveness or enforcement of the order, and
the court shall have jurisdiction to enter such
an order. A respondent served with a temporary
cease-and-desist order entered without a prior
Commission hearing may not apply to the court
except after hearing and decision by the
Commission on the respondent's application
under subparagraph (A) of this paragraph.
``(C) No automatic stay of temporary order.--The
commencement of proceedings under subparagraph (B) of
this subsection shall not, unless specifically ordered
by the court, operate as a stay of the Commission's
order.
``(D) Exclusive review.--Section 317 shall not
apply to a temporary order entered pursuant to this
section.
``(6) Implementation.--The Commission is authorized to
adopt rules, regulations, and orders as it deems appropriate to
implement this subsection.''.
(c) Natural Gas Policy Act of 1978.--Section 504 of the Natural Gas
Policy Act of 1978 (15 U.S.C. 3414) is amended by adding the following
at the end:
``(c) Cease-and-Desist Proceedings; Temporary Orders; Authority of
the Commission.--
``(1) In general.--If the Commission finds, after notice
and opportunity for hearing, that any entity may be violating,
may have violated, or may be about to violate any provision of
this Act, or any rule, regulation, restriction, condition, or
order made or imposed by the Commission under the authority of
this Act, the Commission may publish its findings and issue an
order requiring such entity, and any other entity that is, was,
or would be a cause of the violation, due to an act or omission
the entity knew or should have known would contribute to such
violation, to cease and desist from committing or causing such
violation and any future violation of the same provision, rule,
or regulation. Such order may, in addition to requiring an
entity to cease and desist from committing or causing a
violation, require such entity to comply, to provide an
accounting and disgorgement, or to take steps to effect
compliance, with such provision, rule, or regulation, upon such
terms and conditions and within such time as the Commission may
specify in such order. Any such order may, as the Commission
deems appropriate, require future compliance or steps to effect
future compliance, either permanently or for such period of
time as the Commission may specify.
``(2) Timing of entry.--An order issued under this
subsection shall be entered only after notice and opportunity
for a hearing, unless the Commission determines that notice and
hearing prior to entry would be impracticable or contrary to
the public interest.
``(3) Hearing.--The notice instituting proceedings pursuant
to paragraph (1) shall fix a hearing date not earlier than 30
days nor later than 60 days after service of the notice unless
an earlier or a later date is set by the Commission with the
consent of any respondent so served.
``(4) Temporary order.--Whenever the Commission determines
that--
``(A) a respondent may take actions to dissipate or
convert assets prior to the completion of the
proceedings referred to in paragraph (1) and such
assets would be necessary to comply with or otherwise
satisfy a final enforcement order of the Commission
pursuant to alleged violations or threatened violations
specified in the notice instituting proceedings, or
``(B) a respondent is engaged in actual or
threatened violations of this Act or a Commission rule,
regulation, restriction or order referred to in
paragraph (1),
the Commission may issue a temporary order requiring the
respondent to take such action to prevent dissipation or
conversion of assets, significant harm to energy consumers, or
substantial harm to the public interest, frustration of the
Commission's ability to conduct the proceedings, or frustration
of the Commission's ability to redress said violation at the
conclusion of the proceedings, as the Commission deems
appropriate pending completion of such proceedings.
``(5) Review of temporary orders.--
``(A) Commission review.--At any time after the
respondent has been served with a temporary cease-and-
desist order pursuant to paragraph (4), the respondent
may apply to the Commission to have the order set
aside, limited, or suspended. If the respondent has
been served with a temporary cease-and-desist order
entered without a prior Commission hearing, the
respondent may, within 10 days after the date on which
the order was served, request a hearing on such
application and the Commission shall hold a hearing and
render a decision on such application at the earliest
possible time.
``(B) Judicial review.--Within--
``(i) 10 days after the date the respondent
was served with a temporary cease-and-desist
order entered with a prior Commission hearing;
or
``(ii) 10 days after the Commission renders
a decision on an application and hearing under
subparagraph (A), with respect to any temporary
cease-and-desist order entered without a prior
Commission hearing, the respondent may apply to
the United States district court for the
district in which the respondent resides or has
its principal place of business, or for the
District of Columbia, for an order setting
aside, limiting, or suspending the
effectiveness or enforcement of the order, and
the court shall have jurisdiction to enter such
an order. A respondent served with a temporary
cease-and-desist order entered without a prior
Commission hearing may not apply to the court
except after hearing and decision by the
Commission on the respondent's application
under paragraph (1) of this subsection.
``(C) No automatic stay of temporary order.--The
commencement of proceedings under subparagrpah (B) of
this paragraph shall not, unless specifically ordered
by the court, operate as a stay of the Commission's
order.
``(6) Implementation.--The Commission is authorized to
adopt rules, regulations, and orders as it deems appropriate to
implement this subsection.''.
SEC. 11. NATURAL GAS ACT REFUNDS.
Section 5(a) of the Natural Gas Act (15 U.S.C. 717d(a)) is amended
by adding the following new paragraphs at the end thereof:
``(3) Refund effective date.--
``(A) In general.--In accordance with subparagraphs
(B) and (C), the Commission shall establish a refund
effective date for any proceeding initiated under this
subsection.
``(B) Complaints.--In the case of a proceeding
initiated by a complaint, the refund effective date
shall be--
``(i) not earlier than the date on which
the complaint is submitted to the Commission;
and
``(ii) not later than 150 days after the
date on which the complaint was submitted to
the Commission.
``(C) Commission motion.--In the case of a
proceeding initiated on motion of the Commission, the
refund effective date shall be--
``(i) not earlier than the date on which
the Commission publishes notice of the
intention of the Commission to initiate the
proceeding; and
``(ii) not later than 150 days after the
date on which the notice under clause (i) is
published.
``(4) Issuance of refunds.--
``(A) In general.--At the conclusion of any hearing
under this section, the Commission may order, for the
period beginning on the refund effective date and
ending on a date 15 months after the refund effective
date, refunds of any amounts paid in excess of the
amounts that would have been paid under the just and
reasonable rate, charge, classification, rule,
regulation, practice, or contract that the Commission
orders that would be in effect after the hearing.
``(B) Exception.--Notwithstanding subparagraph (A),
the Commission may order refunds of any or all amounts
paid for the period beginning on the refund effective
date and ending on the date on which the hearing
concludes--
``(i) if the proceeding is not concluded by
the date that is 15 months after the refund
effective date; and
``(ii) if the Commission determines at the
conclusion of the proceeding that the
proceeding was not resolved within the 15-month
period primarily because of dilatory behavior
by the natural gas company.
``(C) Interest.--Refunds under this subsection
shall be issued in an amount determined by the
proceeding, plus interest, to the persons that paid the
rates or charges.''.
SEC. 12. REGULATION OF CARBON DERIVATIVES MARKETS.
(a) In General.--Section 2 of the Commodity Exchange Act (7 U.S.C.
2), as amended by section 4 of this Act, is amended by adding at the
end the following:
``(k) The Commission shall have jurisdiction over the
establishment, operation, and oversight of markets for regulated
allowance derivatives, and shall provide for the establishment,
operation, and oversight of the markets in accordance with the same
regulations that apply under this Act to included energy
transactions.''.
(b) Definitions.--Section 1a of such Act (7 U.S.C. 1a), as amended
by section 3(a) of this Act, is amended by redesignating paragraphs
(32) through (36) as paragraphs (34) through (38), respectively, and by
inserting after paragraph (31) the following:
``(32) Regulated allowance.--The term `regulated allowance'
means any allowance authorized under law to emit a greenhouse
gas, and any credit authorized under law based on a reduction
in greenhouse gas emissions, the production of renewable
energy, a carbon emission offset, or an increase in carbon
sequestration.
``(33) Regulated allowance derivative.--The term `regulated
allowance derivative' means an instrument that is, or includes,
an instrument--
``(A) which--
``(i) is of the character of, or is
commonly known to the trade as, a `put option',
`call option', `privilege', `indemnity',
`advance guaranty', `decline guaranty', or
`swap agreement'; or
``(ii) is a contract of sale for future
delivery, other than a written agreement for
the origination and development of an offset
project, and the related issuance of offset
credits, pursuant to title VII of the Clean Air
Act; and
``(B) the value of which, in whole or in part, is
expressly linked to the price of a regulated allowance
or another regulated allowance derivative.''.
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