[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.''.
                                 <all>