Energy market manipulation prevention

(a)

Findings

Congress finds that— (1)in 1974, the Commodity Futures Trading Commission (referred to in this Act as the Commission) was established as an independent agency with a mandate— (A)to enforce and administer the Commodity Exchange Act (7 U.S.C. 1 et seq.); (B)to ensure market integrity; (C)to protect market users from fraud and abusive trading practices; and (D)to prevent and prosecute manipulation of the price of any covered commodity in interstate commerce; (2)Congress has given the Commission authority under the Commodity Exchange Act (7 U.S.C. 1 et seq.) to take necessary actions to address market emergencies; (3)the Commission may use the emergency authority of the Commission with respect to any major market disturbance that prevents the market from accurately reflecting the forces of supply and demand for a covered commodity; (4)in section 4a(a) of the Commodity Exchange Act (7 U.S.C. 6a(a)), Congress has declared that excessive speculation imposes an undue and unnecessary burden on interstate commerce; (5)in May 2009, crude oil inventories in the United States were at the highest level of crude oil inventories on record; (6)in May 2009, demand for oil in the United States dropped to the lowest level of demand in more than a decade; (7)the national average price of a gallon of gasoline has jumped from $1.64 per gallon in late December of 2008 to over $2.61 per gallon as of June 8, 2009; (8)crude oil prices have increased by over 70 percent since the middle of January 2009; and (9)in May 2009, the International Energy Agency predicted that global demand for oil will decrease in 2009 to the lowest level of demand since 1981. (b)

Duties of Commission

The Commission shall use the authority of the Commission, including the emergency authority of the Commission— (1)to curb immediately the role of excessive speculation in any contract market— (A)that is within the jurisdiction and control of the Commission; and (B)on or through which energy futures or swaps are traded; (2)to eliminate excessive speculation, price distortion, sudden or unreasonable fluctuations or unwarranted changes in prices, or other unlawful activity that causes major market disturbances that prevent the market from accurately reflecting the forces of supply and demand for energy commodities; (3)to classify immediately each bank holding company that engages in energy futures trading as a noncommercial participant, and subject the bank holding company to strict position limits; (4)to require immediately that each hedge fund engaged in the trading of energy futures for the hedge fund, or on behalf of a client of the hedge fund— (A)to register with the Commission as a noncommercial participant; and (B)to be subject to strict speculation limits; (5)to eliminate conflicts of interest that may arise in situations during which 1 entity owns or controls a unit that is— (A)designed to predict the future price of oil; (B)engaged in the operations of oil assets, including pipelines and storage facilities; and (C)engaged in the buying or selling of energy derivatives for the unit, or on behalf of a client of the unit; and (6)to revoke immediately each staff no-action letter that covers a foreign board of trade that has established trading terminals in the United States for the purpose of trading United States commodities to United States investors.