1.This Act may be cited as the
Carbon Market Oversight Act of
2009
.
2.Regulation of carbon
markets
(a)The Commodity
Exchange Act (7 U.S.C. 1 et seq.) is amended by adding at the end the
following:
<enum>II</enum><header>Regulation of
carbon markets</header>
<section id="ID139b453b4db547d8a9990a4b95038150"><enum>201.</enum><header>Purposes</header><text display-inline="no-display-inline">The purposes of this title are—</text>
<paragraph id="IDb275fa8444dd4ee8b87246686bb08ea7"><enum>(1)</enum><text>to ensure that
the greenhouse gas market established by this title—</text>
<subparagraph id="ID7e0be0ad6fef417a825c58c0b0496235"><enum>(A)</enum><text>is formed in a
manner consistent with the public interest;</text>
</subparagraph><subparagraph id="id0118A29E583E411783A8D21D70B9DD00"><enum>(B)</enum><text>is formed in a
manner consistent with the goal of reducing greenhouse gas emissions in the
United States;</text>
</subparagraph><subparagraph id="ID95df6c0b8574434a990aed2da675b792"><enum>(C)</enum><text>is designed to
prevent fraud and manipulation, which could potentially arise from many
sources, including—</text>
<clause id="ID836d318f662b4336a6433e0c44d68b19"><enum>(i)</enum><text>the concentration
of market power within the control of a limited number of individuals or
entities;</text>
</clause><clause id="IDdf0ec69efb3b40519600be72f85f8074"><enum>(ii)</enum><text>the abuse of
material, nonpublic information; and</text>
</clause><clause id="ID73bd2d9685614d61939ecdb0c9152fdb"><enum>(iii)</enum><text>the unique
nature of the allowance markets in which supply is known and declining over
time, but demand is unknown, which can create an inherent potential for
scarcity;</text>
</clause></subparagraph><subparagraph id="IDb2f0a53b91ba483ebaa715dc09e0a519"><enum>(D)</enum><clause commented="no" display-inline="yes-display-inline" id="id4F9EA8CE85D54986BDF85D29196EEA6D"><enum>(i)</enum><text>is appropriately
transparent, with real-time reporting of quotes and trades;</text>
</clause><clause id="id02D767E06A4A4FAC8B1A3175F3C8E1B9" indent="up1"><enum>(ii)</enum><text>makes information on price,
volume, and supply, and other important statistical information, available to
the public on fair, reasonable, and nondiscriminatory terms;</text>
</clause><clause id="id9D3DCA262FCC435C8AD9F430C8F54A47" indent="up1"><enum>(iii)</enum><text>is subject to appropriate
recordkeeping and reporting requirements regarding transactions; and</text>
</clause><clause id="id4B5A930B67F2412993555EBAFB187AF5" indent="up1"><enum>(iv)</enum><text>has the confidence of
investors;</text>
</clause></subparagraph><subparagraph id="ID0e35c0db070b4f7b8a911ebd66d99582"><enum>(E)</enum><text>functions
smoothly and efficiently, generating prices that accurately reflect supply and
demand for emission allowances;</text>
</subparagraph><subparagraph id="ID82762f7ed59f43e3aa7125ce61b57107"><enum>(F)</enum><text>promotes just and
equitable principles of trade; and</text>
</subparagraph><subparagraph id="ID748f6c733fee4057bc27b5701c451b8d"><enum>(G)</enum><text>establishes an
equitable system for the best execution of customer orders;</text>
</subparagraph></paragraph><paragraph id="IDd0eaf77dbbb74e309109c57853409215"><enum>(2)</enum><text>to minimize
transaction costs for regulated entities so that the cost of abatement is
reduced for those entities and customers of those entities;</text>
</paragraph><paragraph id="IDe0dfdd35251f4f5ebf9f205b6592da01"><enum>(3)</enum><text>to establish a
cost-effective capability for real-time monitoring of the market in order to
avoid manipulation and market failure;</text>
</paragraph><paragraph id="ID1ff8f5da2e9c433188b211c7a93e52b1"><enum>(4)</enum><text>to minimize the
volatility induced by the structure of the marketplace itself in the interest
of providing an accurate price signal for regulated entities; and</text>
</paragraph><paragraph id="IDa4f776498b7d46d28b81c77607d2921c"><enum>(5)</enum><text>to ensure that
the markets will function in a stable and efficient manner to promote the
environmental and economic objectives of the United States.</text>
</paragraph></section><section id="IDd8fb7d59edd94a179471431461df1d2b"><enum>202.</enum><header>Definitions</header><text display-inline="no-display-inline">In this title:</text>
<paragraph id="IDe199bafb0188413681e5e9bb9bce68bc"><enum>(1)</enum><header>Carbon Clearing
Organization</header><text>The term <term>Carbon Clearing Organization</term>
means the entity established under section 206(a).</text>
</paragraph><paragraph id="idA6AEB67604C4489DAD2F9A1899D0B2B0"><enum>(2)</enum><header>Carbon dioxide
equivalent</header><text>The term <term>carbon dioxide equivalent</term> means
for each greenhouse gas, the quantity of the greenhouse gas that the
Administrator of the Environmental Protection Agency determines makes the same
contribution to global warming as 1 metric ton of carbon dioxide.</text>
</paragraph><paragraph id="ID5ac07b3c351141779cd2276ee51c4b85"><enum>(3)</enum><header>Dealer</header><text>The
term <term>dealer</term> means an individual, association, partnership,
corporation, or trust that—</text>
<subparagraph id="IDb46bda2b592149c8b81dc56c582be9a0"><enum>(A)</enum><text>is engaged in
soliciting or in accepting orders for the purchase or sale of a regulated
instrument on or subject to the rules of a registered carbon trading facility;
and</text>
</subparagraph><subparagraph id="ID51f6bc89b60847009ed600c5eac2b14e"><enum>(B)</enum><text>in or in
connection with the solicitation or acceptance of such an order, accepts money,
securities, or property (or extends credit in lieu of such an acceptance) to
margin, guarantee, or secure any trade or contract that results or may result
from such an acceptance.</text>
</subparagraph></paragraph><paragraph id="IDebf519992b6b43ca8cb1826e373d213d"><enum>(4)</enum><header>Director</header><text>The
term <term>Director</term> means the Director of the Office.</text>
</paragraph><paragraph id="idDF1D9CCA926F4CC69392F99D414C2CA6"><enum>(5)</enum><header>Electronic
market trader</header><text>The term <term>electronic market trader</term>
means a person who executes a trade on an electronic trading facility.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID00BC4F2DE20E44E8A10F68D1816CE348"><enum>(6)</enum><header display-inline="yes-display-inline">Electronic trading facility</header><text display-inline="yes-display-inline">The term <term>electronic trading
facility</term> means a trading facility that—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID82F87EAEA91745B6997C3D9A4C4514D3"><enum>(A)</enum><text>operates by means
of an electronic or telecommunications network; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDEA67D3FA6F124FE5A913D40366F6B188"><enum>(B)</enum><text>maintains an
automated audit trail of bids, offers, and the matching of orders or the
execution of transactions on the facility.</text>
</subparagraph></paragraph><paragraph id="ID27acbf2b36aa4d3ab31f08d572ca62b3"><enum>(7)</enum><header>Emission
allowance</header><text>The term <term>emission allowance</term> means a
Government-issued or Government-accredited authorization to emit 1 carbon
dioxide equivalent of greenhouse gas.</text>
</paragraph><paragraph id="id2DD26102763343BAA00BD456B2E34BF0"><enum>(8)</enum><header>Greenhouse
gas</header><text>The term <term>greenhouse gas</term> means any of—</text>
<subparagraph id="ID1b5b630473a4420da0d2fe989dce01e8"><enum>(A)</enum><text>carbon
dioxide;</text>
</subparagraph><subparagraph id="IDd73e048532ac4c89a908d3f82573cb94"><enum>(B)</enum><text>methane;</text>
</subparagraph><subparagraph id="ID3088234037444fe3a574ecb550abe85d"><enum>(C)</enum><text>nitrous
oxide;</text>
</subparagraph><subparagraph id="ID81379c40766741e9a0ab52c1524a8969"><enum>(D)</enum><text>sulfur
hexafluoride;</text>
</subparagraph><subparagraph id="IDfe510c6822ba400794306e01f2ebb1d7"><enum>(E)</enum><text>a
perfluorocarbon; or</text>
</subparagraph><subparagraph id="idC2DD59DF901F4BA994AB8BEAAD25F2E4"><enum>(F)</enum><text>a
hydrofluorocarbon.</text>
</subparagraph></paragraph><paragraph id="ID6f2ebc4fe3914b7a815d723bb79ea311"><enum>(9)</enum><header>Introducing
broker</header>
<subparagraph id="id1C31F556416349F287CA213610EFE4B9"><enum>(A)</enum><header>In
general</header><text>The term <term>introducing broker</term> means any person
engaged in soliciting or in accepting orders for the purchase or sale of a
regulated instrument on or subject to the rules of a registered carbon trading
facility, who does not accept money, securities, or property (or extend credit
in lieu of such an acceptance) to margin, guarantee, or secure any trade or
contract that results or may result from such a solicitation or
acceptance.</text>
</subparagraph><subparagraph id="id178F54A818FA49049F8496AAC9E6AF53"><enum>(B)</enum><header>Exclusion</header><text>The
term <term>introducing broker</term> does not include an individual who elects
to be and is registered as an associated person of a dealer.</text>
</subparagraph></paragraph><paragraph id="ID544b034c50cb48c5821aa03ef91d631e"><enum>(10)</enum><header>Member</header><text>The
term <term>member</term> means, with respect to a trading facility, an
individual, association, partnership, corporation, or trust owning or holding
membership in, admitted to membership representation on, or having trading
privileges on the trading facility.</text>
</paragraph><paragraph id="id13BAF4540CC84228A9AFEEE016AAE9C5"><enum>(11)</enum><header>Office</header><text>The
term <term>Office</term> means the Office of Carbon Market Oversight
established by section 203(a)(1).</text>
</paragraph><paragraph id="ID70389cf733044e55bd389e1c19b956fa"><enum>(12)</enum><header>Private
bilateral contract</header><text>The term <term>private bilateral
contract</term> means a nonstandard contract that lacks each of the following
characteristics:</text>
<subparagraph id="ID7e828754c61e4b9ab93036e8e6308f54"><enum>(A)</enum><text>The applicable
transaction or class of transactions settles against any price (including the
daily or final settlement price) of 1 or more contracts listed for trading on a
registered trading facility.</text>
</subparagraph><subparagraph id="IDf1530624e81143a6b0490eb119c7c4b7"><enum>(B)</enum><text>The price of the
applicable transaction or class of transactions is reported to a third party,
published, or otherwise disseminated.</text>
</subparagraph><subparagraph id="ID05dc510023594e6b990585e25f6d9270"><enum>(C)</enum><text>The price of the
applicable transaction or class of transactions is referenced in another
transaction.</text>
</subparagraph><subparagraph id="ID6fd5f8508c2b4e54934f1e2c1a5f6f58"><enum>(D)</enum><text>There is a
significant volume of the applicable transaction or class of
transactions.</text>
</subparagraph><subparagraph id="IDe02216de5bf44426b4c1685bacf37694"><enum>(E)</enum><text>The value of the
applicable transaction is significant in comparison to the value of the
underlying carbon derivative market.</text>
</subparagraph><subparagraph id="ID7e6ab97dece64336b40e2c938790de4e"><enum>(F)</enum><text>The contract or
applicable transactions meets other criteria that the Commission determines to
be appropriate.</text>
</subparagraph></paragraph><paragraph id="IDe6f9442746bc4abab551d0ff7d3039d4"><enum>(13)</enum><header>Registered
carbon trader</header><text>The term <term>registered carbon trader</term>
means a member, in good standing, of a registered carbon trading facility who
has registered with the Commission under section 205(b).</text>
</paragraph><paragraph id="id8EE770EABA004978ABA6FBCA6374A393"><enum>(14)</enum><header>Registered
carbon trading facility</header><text>The term <term>registered carbon trading
facility</term> means a facility that meets standards established by the
Commission under section 203(d)(1).</text>
</paragraph><paragraph id="IDa8d5f7fc2f124aebb294a08e714bbcb9"><enum>(15)</enum><header>Regulated
allowance</header><text>The term <term>regulated allowance</term> means—</text>
<subparagraph id="idF4C7CA65522E4EBC81C5416739E706CD"><enum>(A)</enum><text>an emission
allowance; or</text>
</subparagraph><subparagraph id="id133D87BDAC2F4E5E9924FCB32A855CB6"><enum>(B)</enum><text>a
Government-issued unit of reduction in the quantity of emissions, or an
increase in sequestration, equal to 1 carbon dioxide equivalent.</text>
</subparagraph></paragraph><paragraph id="IDe412b5a3253a46b1a3dfbc14c386d497"><enum>(16)</enum><header>Regulated
allowance derivative</header><text>The term <term>regulated allowance
derivative</term> means an instrument that is or includes—</text>
<subparagraph id="ID0c41c8b5fdbc4aeaad1a54781bb81a68"><enum>(A)</enum><text>any instrument,
contract, or other obligation (or guaranty or indemnity of such an obligation),
the value of which, in whole or in part, is linked to the price of a regulated
allowance or another regulated allowance derivative;</text>
</subparagraph><subparagraph id="ID5dce40c551394ebdb2b23e71cf9fcada"><enum>(B)</enum><text>any contract for
future delivery (including an option, a swap agreement, or a futures contract)
of—</text>
<clause id="id18E146254CFC492EA45362DB839DF793"><enum>(i)</enum><text>a
regulated allowance; or</text>
</clause><clause id="id438B66F4633C4F86BEC8387B6EAC6459"><enum>(ii)</enum><text>any obligation
described in subparagraph (A); or</text>
</clause></subparagraph><subparagraph id="ID29a8fb5895134558af9d962769839d08"><enum>(C)</enum><text>any other
contract—</text>
<clause id="id34A56AFB464149E88712B35A141F24CC"><enum>(i)</enum><text>the value of
which is derived from the existence of a market for regulated allowances;
and</text>
</clause><clause id="id6D0EB4900BDE4AEDB2B0EEB231E2BBB5"><enum>(ii)</enum><text>that the
Commission has not determined to be a private bilateral contract.</text>
</clause></subparagraph></paragraph><paragraph id="ID3c59bd08f4e74e3cb8fb530c41d9f67e"><enum>(17)</enum><header>Regulated
instrument</header><text>The term <term>regulated instrument</term>
means—</text>
<subparagraph id="id6A22A3F3C56045FA99AAF676CCC5096E"><enum>(A)</enum><text>a regulated
allowance; or</text>
</subparagraph><subparagraph id="id95DD0360A1944E1E8B51377345989FE7"><enum>(B)</enum><text>a regulated
allowance derivative.</text>
</subparagraph></paragraph><paragraph id="ID9690e083894d4adeac0006db3cdd3047"><enum>(18)</enum><header>Short
sale</header><text>The term <term>short sale</term> means—</text>
<subparagraph id="id407E100C18C54F40880D98D704858A1B"><enum>(A)</enum><text>any sale of a
regulated allowance that the seller does not own; and</text>
</subparagraph><subparagraph id="id3CBAEE50F3314A338C06284EE1EAF833"><enum>(B)</enum><text>any sale that is
consummated by the delivery of a regulated allowance borrowed by, or for the
account of, the seller.</text>
</subparagraph></paragraph><paragraph id="ID27b30ed719ae4a24a01718997e2ab566"><enum>(19)</enum><header>Trading
facility</header>
<subparagraph id="idCCA2E771F0264FBB9E1E0010CEB261F0"><enum>(A)</enum><header>In
general</header><text>The term <term>trading facility</term> means 1 or more
individuals or entities that constitute, maintain, or provide a physical or
electronic facility or system in which multiple participants have the ability
to execute or trade agreements, contracts, or transactions involving a
regulated instrument by accepting bids and offers made by other participants
that are open to multiple participants in the facility or system.</text>
</subparagraph><subparagraph id="idC318932B0B514FEEA255D473A675AC4D"><enum>(B)</enum><header>Inclusion</header><text>The
term <term>trading facility</term> includes a telephone voice brokerage that
executes multiple, largely offsetting, bilateral transactions.</text>
</subparagraph></paragraph><paragraph id="IDede668aab9314b359d174aeeaec4e1a5"><enum>(20)</enum><header>United
States</header><text>The term <term>United States</term> includes the
territories and possessions of the United States.</text>
</paragraph></section><section id="ID49fd2a37338241b88f980276f6385bb8"><enum>203.</enum><header>Office of
Carbon Market Oversight; jurisdiction</header>
<subsection id="ID33dbb02bdad341bc8ca25213c4db8c74"><enum>(a)</enum><header>Establishment
of Office of Carbon Market Oversight</header>
<paragraph id="ID118ad592ebe04fbebb0cbb363da185e2"><enum>(1)</enum><header>In
general</header><text>There is established within the Commission an Office of
Carbon Market Oversight.</text>
</paragraph><paragraph id="id8E56A817A04A411789C2CA4D1235870E"><enum>(2)</enum><header>Director</header>
<subparagraph id="id98AA5052568E49F7AEA525D59BC8B2A6"><enum>(A)</enum><header>In
general</header><text>The Office shall be headed by a Director for Carbon
Market Oversight.</text>
</subparagraph><subparagraph id="id700FBBE036EB4100A5B3912C97D6328E"><enum>(B)</enum><header>Additional
nature of position</header><text>The position of Director for Carbon Market
Oversight shall be in addition to the directors of other offices of the
Commission.</text>
</subparagraph><subparagraph id="IDa603837c8ae94955ab279b8ab6650696"><enum>(C)</enum><header>Appointment;
qualifications</header><text>The Director shall be—</text>
<clause id="id36EBA5664ACE496BB97B2243AD76CAAF"><enum>(i)</enum><text>appointed by the
Commission; and</text>
</clause><clause id="id228D461530D24652996FBF438AAC1367"><enum>(ii)</enum><text>an individual
who is, by reason of background and experience in the regulation of
commodities, securities, or other financial markets, especially qualified to
direct a program of oversight of the market in regulated instruments.</text>
</clause></subparagraph></paragraph></subsection><subsection id="ID3d7f5255aa404ef09e350076d6838029"><enum>(b)</enum><header>Administration
of this title</header><text>The Commission, acting through the Director, shall
administer this title.</text>
</subsection><subsection id="IDe36352cc750c4cab9152dc921a884034"><enum>(c)</enum><header>Duty of
Commission</header><text>The Commission shall regulate all contracts of sale
involving regulated instruments under the jurisdiction of the
Commission.</text>
</subsection><subsection id="ID2765c27a01904d318e3344f0d8b5b4d1"><enum>(d)</enum><header>Regulations</header><text>The
Commission shall, not later than 1 year after the date of enactment of this
title, promulgate regulations governing the implementation of this title, and
periodically thereafter, revise the regulations as necessary, including
regulations that relate to—</text>
<paragraph id="IDd314d9d202f942a093d341f0783d6aa2"><enum>(1)</enum><text>specific initial
and ongoing standards for qualification as a registered carbon trading
facility;</text>
</paragraph><paragraph id="ID122a1d66a7564ca0a3435e0e9c76f9d8"><enum>(2)</enum><text>position limits
for individual market participants, adjusted as necessary based on market
conditions;</text>
</paragraph><paragraph id="ID83af0fe7c68a4645a738d7a0db3aaf19"><enum>(3)</enum><text>margin
requirements for the instruments traded by registered carbon trading
facilities;</text>
</paragraph><paragraph id="IDc9474c458c8645889c237c1d4b1eaaee"><enum>(4)</enum><text>suitability
standards for the solicitation by members of carbon instruments to retail
investors;</text>
</paragraph><paragraph id="IDdb67b35359d8457ca6f2655625caa2c1"><enum>(5)</enum><text>a best execution
standard for regulated allowance trading, such as the standard used in the
national securities markets;</text>
</paragraph><paragraph id="ID00bd5cdbfd4346a0b38ae3f4246eb9b7"><enum>(6)</enum><text>approval
of—</text>
<subparagraph id="id828F0E49ABAF4E78ABE5D5E4C663FEDF"><enum>(A)</enum><text>specific
protocols of the central limit order books of carbon trading facilities;
and</text>
</subparagraph><subparagraph id="idF5F99299D8E34A5785E08688B0F1970C"><enum>(B)</enum><text>the connection of
those facilities to—</text>
<clause id="id8FA4C4E25E744046970C9CA41D3E1534"><enum>(i)</enum><text>Carbon Clearing
Organizations established under section 206; and</text>
</clause><clause id="idE21DE951B5B148FAB35DAC619D8672BD"><enum>(ii)</enum><text>the automated
quotation system established under section 207;</text>
</clause></subparagraph></paragraph><paragraph id="ID7381ec7a716648429a31fac8104570a2"><enum>(7)</enum><text>the establishment
of baseline initial and ongoing membership standards for registered carbon
trading facilities;</text>
</paragraph><paragraph id="ID0c12de534cba4579b8eb3e7eb58a7cb8"><enum>(8)</enum><text>subject to
section 204(a)(4), specific standards for short sale transactions involving
regulated instruments;</text>
</paragraph><paragraph id="ID0f8dde57da98498f9d2009e9e7f1b25a"><enum>(9)</enum><text>such other
matters as are necessary for the carbon market to operate with the highest
standards of fairness and efficiency; and</text>
</paragraph><paragraph id="IDa727c78d02364e098aca6fb18349a1e7"><enum>(10)</enum><text>the
establishment and operation of a carbon clearing organization.</text>
</paragraph></subsection><subsection id="IDcf8081c9dc464d6e9555edaebafa9209"><enum>(e)</enum><header>Memorandum of
understanding</header>
<paragraph id="idFCE535D97320440380E8612D4899F816"><enum>(1)</enum><header>In
general</header><text>Not later than 180 days after the date of enactment of
this title, the Commission shall enter into a memorandum of understanding with
the Federal Energy Regulatory Commission, the Environmental Protection Agency,
and any State or regional organization operating a market-based greenhouse gas
emissions control program relating to information-sharing and coordination of
oversight roles regarding—</text>
<subparagraph id="id3B7EAE7E34344AA0B31D48DF6D3C8FEF"><enum>(A)</enum><text>trading
facilities;</text>
</subparagraph><subparagraph id="id83B36910C5B549DBA567DF31D9217201"><enum>(B)</enum><text>registered carbon
traders;</text>
</subparagraph><subparagraph id="id702F4E6528C04DDB9B2D54C0881EC5DD"><enum>(C)</enum><text>carbon clearing
organizations; and</text>
</subparagraph><subparagraph id="id804B9496B02E45609F58CACB81187271"><enum>(D)</enum><text>derivative
clearing organizations.</text>
</subparagraph></paragraph><paragraph id="idB1821FCD747A420CBB18437434888BC3"><enum>(2)</enum><header>Inclusions</header><text>The
memorandum of understanding shall include, at a minimum, provisions—</text>
<subparagraph id="id8125EA18801C4C18B84912F9C12BEF0A"><enum>(A)</enum><text>ensuring that
information requests to markets within the respective jurisdictions of each
agency are properly coordinated to minimize duplicative information requests;
and</text>
</subparagraph><subparagraph id="idEEA65397000E4B5EBBD72B86E6C82464"><enum>(B)</enum><text>regarding the
treatment of proprietary trading information.</text>
</subparagraph></paragraph></subsection><subsection id="IDb0200fb1e6fc430ab3ed687c4c557817"><enum>(f)</enum><header>Coordination
for foreign regulators</header><text>Not later than 180 days after the date of
enactment of this title, the Commission shall, to the maximum extent
practicable, enter into agreements with foreign regulatory bodies to ensure
that foreign boards of trade do not offer for sale allowance derivatives beyond
the jurisdiction of the Commission that would undermine the authority of the
carbon market regulators in the United States or reduce the effectiveness of
Commission oversight.</text>
</subsection><subsection id="ID87663543ac7d4cdf84b914e8771f46a5"><enum>(g)</enum><header>Regulations</header><text>The
regulations issued to carry out this section shall take into account impacts on
liquidity, flexibility, and robust participation in carbon markets, in order to
maximize cost-effective and efficient reductions in carbon emissions.</text>
</subsection></section><section id="ID7999bfdc27ee4cf294ab45f507d19cd5"><enum>204.</enum><header>Regulation of
carbon trading</header>
<subsection id="ID272720d48a77499db285c1a57640f71d"><enum>(a)</enum><header>Limitation of
certain activities to registered entities</header>
<paragraph id="ID76b235bee4a348a58ce5c77372cf0d6d"><enum>(1)</enum><header>Carbon
allowance trading facility activities</header><text>It shall be unlawful for a
person to offer to enter into, execute, confirm the execution of, or conduct an
office or a business for the purpose of soliciting, accepting an order for, or
otherwise dealing in, an agreement, contract, or transaction involving a
contract for the purchase or sale of a regulated allowance, unless—</text>
<subparagraph id="ID465f504bd35540949ce6b0c4c6e594ca"><enum>(A)</enum><text>the transaction
is conducted through the carbon allowance trading facility established under
section 205(a);</text>
</subparagraph><subparagraph id="ID818f5f8da573426d9835762ac54ace6e"><enum>(B)</enum><text>the contract for
the purchase or sale is evidenced by a record in writing (or other form
acceptable to the Commission) that includes—</text>
<clause id="id8E334332D05F4F518B93A5B15FD655D0"><enum>(i)</enum><text>the date;</text>
</clause><clause id="idB722711E31F14DC285D2ED644610A3D5"><enum>(ii)</enum><text>the names of the
parties to the contract (including the addresses of those parties);</text>
</clause><clause id="id56D890859BC74C50BA5BDD6D1F969708"><enum>(iii)</enum><text>a description
of the property covered by the contract (including the price of the
property);</text>
</clause><clause id="id97BED4BE0F8D4F709F14CC779520EEAE"><enum>(iv)</enum><text>the terms of
delivery; and</text>
</clause><clause id="id7C1ACDC0C1D8447086D38E34DE7D4306"><enum>(v)</enum><text>all other
nonstandardized terms and conditions; and</text>
</clause></subparagraph><subparagraph id="ID56b20a2df5f642f6a44de0e470f8c6aa"><enum>(C)</enum><text>the contract is
cleared through the Carbon Clearing Organization.</text>
</subparagraph></paragraph><paragraph id="ID6f642043cd574f1f83863d8577faa1a0"><enum>(2)</enum><header>Carbon
derivative trading facility activities</header><text>It shall be unlawful for a
person to offer to enter into, execute, confirm the execution of, or conduct an
office or a business for the purpose of soliciting, accepting an order for, or
otherwise dealing in, an agreement, contract, or transaction involving a
contract for the purchase or sale of a regulated allowance derivative,
unless—</text>
<subparagraph id="ID037a7c1a9e7447b2b743818fd64ed0c2"><enum>(A)</enum><text>the Commission
has determined that the contract is a private bilateral contract that has been
reported to the Commission and included as part of the total market risk
exposure of a participant; or</text>
</subparagraph><subparagraph id="ID7482af33431343f49f9bc4e4960fbc5e"><enum>(B)</enum><clause commented="no" display-inline="yes-display-inline" id="idA5831A28E6DB4A3193A6F160DC13E033"><enum>(i)</enum><text>the transaction is
conducted through a trading facility designated as a registered carbon
derivative trading facility under section 205(a);</text>
</clause><clause id="id17EA81E792CE4D32902EF09F35024703" indent="up1"><enum>(ii)</enum><text>the contract for the purchase or
sale is evidenced by a record in writing (or other form acceptable to the
Commission) that includes—</text>
<subclause id="id122B19AF2C4646B499467A0B4B59502A"><enum>(I)</enum><text>the date;</text>
</subclause><subclause id="id4C1717008E174435AB1E2459D4406CEA"><enum>(II)</enum><text>the names of the parties to the contract
(including the addresses of those parties);</text>
</subclause><subclause id="id6129C588182E44589EE8DA2C7B416A3E"><enum>(III)</enum><text>a description of the property covered
by the contract (including the price of the property);</text>
</subclause><subclause id="id557CB45D2981418582519E224BE95EAB"><enum>(IV)</enum><text>the terms of delivery; and</text>
</subclause><subclause id="id7AAADA2617BC49A1BCDA425474AC828D"><enum>(V)</enum><text>all other nonstandardized terms and
conditions; and</text>
</subclause></clause><clause id="id33001FD9B8AA476BA7DB25C8478EE59D" indent="up1"><enum>(iii)</enum><text>the contract is cleared through a
derivatives clearing organization registered with the Commission pursuant to
section 5b.</text>
</clause></subparagraph></paragraph><paragraph id="ID5de9e1037dc34e58918bc8a8a7fbca4b"><enum>(3)</enum><header>Broker or
dealer activities</header><text>It shall be unlawful for a person to act in the
capacity of an introducing broker, dealer, floor broker, electronic market
trader, or floor trader in connection with the purchase or sale of a regulated
instrument, unless—</text>
<subparagraph id="id17C71496D1124F359CB1B5B01577E21E"><enum>(A)</enum><text>the person is a
registered carbon trader; and</text>
</subparagraph><subparagraph id="idC93605FFE7D6470D8CF9AE5117402139"><enum>(B)</enum><text>the registration
of the person is not suspended, revoked, or expired.</text>
</subparagraph></paragraph><paragraph id="ID3ee463f583ce4dd481c574bd569b99e4"><enum>(4)</enum><header>Short sale
transactions</header><text>A short sale transaction involving a regulated
instrument that occurs without the borrowing of a regulated allowance shall be
unlawful unless the Commission determines that the transaction is in the best
interest of regulated entities and the public.</text>
</paragraph></subsection><subsection id="ID202355ce40564b56af9e8791d3b2db30"><enum>(b)</enum><header>Prohibition on
price or market manipulation, fraud, and false or misleading statements or
reports</header><text>It shall be unlawful for a person, directly or
indirectly—</text>
<paragraph id="ID8d8f71179c894886bb47119af7c563fd"><enum>(1)</enum><text>to use or employ,
or attempt to use or employ, in connection with a transaction involving the
purchase or sale of a regulated instrument or private bilateral contract, in
violation of such rules and regulations as the Commission may promulgate to
protect the public interest or consumers, including—</text>
<subparagraph id="ID954d584f4150482891874e194651d7a8"><enum>(A)</enum><text>any manipulative
or deceptive device or contrivance (within the meaning of section 10(b) of the
Securities Exchange Act of 1934 (15 U.S.C. 78j(b)));</text>
</subparagraph><subparagraph id="IDd1213a6faa714d398ae6705eca1d9bbf"><enum>(B)</enum><text>any corner;
or</text>
</subparagraph><subparagraph id="IDda156089018446beb4461176d7361c49"><enum>(C)</enum><text>any device or
contrivance that cheats or defrauds any other person;</text>
</subparagraph></paragraph><paragraph id="ID3fadced3780c4ec3968f53848778c8a7"><enum>(2)</enum><text>for the purpose
of creating a false or misleading appearance of active trading in a regulated
instrument or private bilateral contract, or a false or misleading appearance
with respect to the market for such an instrument—</text>
<subparagraph id="ID49c5ad77b030423b8b055c5d622cc0d5"><enum>(A)</enum><text>to effect any
transaction in the instrument that involves no change in the beneficial
ownership of the instrument;</text>
</subparagraph><subparagraph id="ID3ab2ce747af44a9ab0ae9f757c372a90"><enum>(B)</enum><text>to enter an order
for the purchase of the instrument, with the knowledge that 1 or more orders of
substantially the same size, at substantially the same time, and at
substantially the same price, for the sale of any such instrument, has been or
will be entered by or for the same or different parties; or</text>
</subparagraph><subparagraph id="ID567cea7ce5504f568b910a900fb765a2"><enum>(C)</enum><text>to enter an order
for the sale of the instrument with the knowledge that 1 or more orders of
substantially the same size, at substantially the same time, and at
substantially the same price, for the purchase of the instrument, has been or
will be entered by or for the same or different parties;</text>
</subparagraph></paragraph><paragraph id="IDc628eb70200a472ab00a93bb89630e8f"><enum>(3)</enum><text>to deliver or
cause to be delivered a knowingly false, misleading, or inaccurate report
concerning information or conditions that affect or tend to affect the price of
a regulated instrument;</text>
</paragraph><paragraph id="ID66f5546b1d5243dc9ff4f2f183386d3b"><enum>(4)</enum><subparagraph commented="no" display-inline="yes-display-inline" id="idFCF5F5AF66344E4D988BAC59606DBCD2"><enum>(A)</enum><text>to make, or cause to be
made, in an application, report, or document required to be filed under this
title or any regulation promulgated under this title, a statement that is false
or misleading with respect to a material fact; or</text>
</subparagraph><subparagraph id="idEC58191BC0E9448099BCDE16417D13D1" indent="up1"><enum>(B)</enum><text>to omit any material fact that is
required to be stated in such an application, report, or document, or that is
necessary to make the statements in such an application, report, or document
not misleading; or</text>
</subparagraph></paragraph><paragraph id="IDb84845058b7e4ed1937d64481b9e41cd"><enum>(5)</enum><text>to falsify,
conceal, or cover up by any trick, scheme, or artifice a material fact, make
any false, fictitious, or fraudulent statements or representations, or make or
use any false writing or document that contains a false, fictitious, or
fraudulent statement or entry, to an entity registered under this title acting
in furtherance of the official duties of the entity under this title.</text>
</paragraph></subsection><subsection id="IDc2757ffc3e0c43168c3f26b91b32057f"><enum>(c)</enum><header>Prevention of
excessive speculation</header>
<paragraph id="IDd7b8ef9f698f4a03b6528c113f285827"><enum>(1)</enum><header>In
general</header><text>To prevent, decrease, or eliminate burdens associated
with excessive speculation relating to regulated instruments (which may be more
severe in markets in which supply is known and declining and demand is
unknown), the Commission shall promulgate regulations establishing such
position or transaction limitations, in the aggregate, as the Commission
determines to be necessary to prevent potential upward bias in price with
respect to any regulated instrument.</text>
</paragraph><paragraph id="id641593F7001646D395DECE679D61927F"><enum>(2)</enum><header>Aggregate
positions</header><text>In carrying out paragraph (1), the Commission shall, to
the maximum extent practicable, aggregate carbon dioxide equivalent positions
in natural gas, electricity, and regulated instruments.</text>
</paragraph><paragraph id="IDab27e077354c4c25ba5cbfdc8ca57b98"><enum>(3)</enum><header>Inapplicability
to bona fide hedging transactions and positions</header><text>The limitations
and requirements established under paragraph (1) shall not apply to a position
or transaction that is a bona fide hedging position or transaction, as defined
by the Commission in accordance with the purposes of this title.</text>
</paragraph></subsection><subsection id="IDaacde3ad64264eafae5579c08719aca6"><enum>(d)</enum><header>Recordkeeping;
reporting; access to books and records</header>
<paragraph id="ID2b00ac195d024e2dacde4b63c5c4bc47"><enum>(1)</enum><header>Members of
registered entities</header><text>Each member of an entity registered under
this title shall—</text>
<subparagraph id="ID552a4984ec6247beaa12ae03fd162e6f"><enum>(A)</enum><text>keep books and
records, and make such reports as are required by the Commission, regarding the
transactions and positions of the member, and the transactions and positions of
the customer involved, in regulated instruments and private bilateral
contracts, in such form and manner, and for such period, as may be required by
the Commission; and</text>
</subparagraph><subparagraph id="ID4afbcb3fadd84bb48b0873d505127879"><enum>(B)</enum><text>make the books
and records available for inspection by any representative of the Commission or
the Department of Justice.</text>
</subparagraph></paragraph><paragraph id="ID5d9241831c4442039d1b36a27433eb86"><enum>(2)</enum><header>Registered
entities</header><text>Each entity registered under this title shall—</text>
<subparagraph id="ID10e45ecd05ee4918a94003cbd41e1a40"><enum>(A)</enum><text>maintain daily
trading records (including a time-stamped audit trail), that include such
information, in such form, and for such period as the Commission may require by
regulation;</text>
</subparagraph><subparagraph id="IDbb237747bbcb4bfa994de8ed68289945"><enum>(B)</enum><text>before the
beginning of trading each day, insofar as is practicable and under terms and
conditions specified by the Commission, make public the volume of trading on
each type of contract for the previous day and such other information as the
Commission considers necessary in the public interest and prescribes by rule,
order, or regulation; and</text>
</subparagraph><subparagraph id="ID06bafae608b846ea884f530210dfa62a"><enum>(C)</enum><text>make such reports
from the records, at such times and places, and in such form, as the Commission
may require by regulation to protect the public interest and the interest of
persons trading in regulated instruments.</text>
</subparagraph></paragraph></subsection><subsection id="IDe63d9ff9fb4e4d439c62c8645b620d64"><enum>(e)</enum><header>Foreign
transactions</header>
<paragraph id="id9849EAD4C2A844CE954F6C1D6C1A3A90"><enum>(1)</enum><header>In
general</header><text>Any United States person or corporation shall be subject
to this section for all contracts executed by the United States person or
corporation, including contracts executed outside of the United States.</text>
</paragraph><paragraph id="idD8C6F6891B7E44EAB09D27A5F3882913"><enum>(2)</enum><header>Foreign persons
and corporations</header><text>A foreign person or corporation shall be subject
to this section for all contracts executed by the foreign person or corporation
within the United States.</text>
</paragraph></subsection></section><section id="ID9c83574ba9cb497d88bcbe544c1ecb0f"><enum>205.</enum><header>Establishment
and registration of a carbon trading facilities; registration of traders,
brokers, and dealers</header>
<subsection id="ID00e506401c33483cb5b7f8e7656ea9e9"><enum>(a)</enum><header>Carbon trading
facilities</header>
<paragraph id="ID8737003be4a54d9f8c3b6c72526e3683"><enum>(1)</enum><header>Establishment
of a carbon allowance trading facility</header><text>The Commission may
establish a carbon allowance trading facility in accordance with this section
to process trades of regulated allowances.</text>
</paragraph><paragraph id="IDb757b5e931ef48cf8de1a0252760d205"><enum>(2)</enum><header>Registration of
carbon trading facilities</header>
<subparagraph id="id400B2D17F5274E558CA51C781AE43101"><enum>(A)</enum><header>In
general</header><text>A trading facility may apply to the Commission for
designation as a registered carbon allowance trading facility or a registered
carbon allowance derivative trading facility by submitting to the Commission an
application that contains such information and commitments as the Commission
may require.</text>
</subparagraph><subparagraph id="id1230A5D3A5A9486F8FCA56E263AF4441"><enum>(B)</enum><header>Review</header><text>A
designation under this paragraph shall be reviewed by the Commission from time
to time, but not less frequently than once every 3 years.</text>
</subparagraph></paragraph><paragraph commented="no" id="ID441cc356e90440b78b30c9f731903eb8"><enum>(3)</enum><header>Operation of
the carbon trading facilities</header>
<subparagraph commented="no" id="id3869F40E5A764AFE8F9E24D7289426B7"><enum>(A)</enum><header>In
general</header><text>To obtain or maintain designation and continue operating
as a registered carbon allowance trading facility or a registered carbon
allowance derivative trading facility under this title, a carbon allowance
trading facility established by the Commission or registered with the
Commission under this section shall comply with the requirements and principles
described in this paragraph.</text>
</subparagraph><subparagraph id="ID997a0c7d69074c339cafe9b7a6f6ef73"><enum>(B)</enum><header>Prevention of
market manipulation</header><text>The trading facility shall demonstrate
capability to prevent market manipulation through market surveillance,
compliance, and enforcement practices and procedures, including methods for
conducting real-time monitoring of trading and comprehensive and accurate trade
reconstructions.</text>
</subparagraph><subparagraph id="ID4bcb74a06b234987b289907e4d29860c"><enum>(C)</enum><header>Electronic
monitoring of trading</header><text>The trading facility shall
demonstrate—</text>
<clause id="idB2CFB013C3884904811B5A14FC86A7A2"><enum>(i)</enum><text>that the trading
facility monitors trading on or through the facility to prevent manipulation,
price distortion, and disruptions of the delivery or cash-settlement process;
and</text>
</clause><clause id="id6700BA5A74D84C87AC71025F51743632"><enum>(ii)</enum><text>in addition to
traditional methods, a capability to monitor market activities electronically
on a real-time basis and, if appropriate, by algorithm and other such means as
are determined to be appropriate by the Commission.</text>
</clause></subparagraph><subparagraph id="ID22d8283d326843dab9813a3ba902fb81"><enum>(D)</enum><header>Fair and
equitable trading</header><text>The trading facility shall establish and
enforce rules to ensure—</text>
<clause id="idD0D921AD866B4A698958930396CFB306"><enum>(i)</enum><text>fair and
equitable trading through the trading facility;</text>
</clause><clause id="idA041AA742333402F9CCF563608722FE3"><enum>(ii)</enum><text>the capacity to
detect, investigate, and discipline any person that violates the rules;</text>
</clause><clause id="id326A4E4602DE46D2BE7C39B57C1D1EB9"><enum>(iii)</enum><text>the operation
of any electronic matching platform;</text>
</clause><clause id="id0AC48AC5798F49889A9A5F99165043D1"><enum>(iv)</enum><text>the terms and
conditions of any contracts to be traded on or through the trading
facility;</text>
</clause><clause id="id66E08B961F454B96A4253C2370BFFA27"><enum>(v)</enum><text>any limitations
on access to the trading facility;</text>
</clause><clause id="id32CD5F4739994785A69A0B78405DD034"><enum>(vi)</enum><text>the financial
integrity of transactions and contracts entered into by or through the trading
facility, including the clearance and settlement of the transactions;</text>
</clause><clause id="id07A2708EEBDC49F4985CF39DD605A082"><enum>(vii)</enum><text>the financial
integrity of brokers, dealers, and traders doing business on or through the
trading facility;</text>
</clause><clause id="idD8C41DFB1277423BA5853DCC3B8A8165"><enum>(viii)</enum><text>the protection
of customer funds;</text>
</clause><clause id="IDba9179fba3894fadb7ac0ab74108bdcb"><enum>(ix)</enum><text>that the trading
facility is able to discipline, suspend, or expel members or market
participants that violate the rules of the trading facility, or similar methods
for performing the same functions, including delegation of the functions to
third parties; and</text>
</clause><clause id="ID05231ee4c7074beb9276901e8362153f"><enum>(x)</enum><text>that market
participants are protected from abusive practices committed by any party acting
as an agent for the participants.</text>
</clause></subparagraph><subparagraph id="ID08a9d70e34ce4ee4ac3df5375a3955a1"><enum>(E)</enum><header>Aggregate
position limitations or accountability</header><text>The trading facility
shall—</text>
<clause id="idAF9633BC6F6D42B1B14A9412FFC066E8"><enum>(i)</enum><text>adopt and enforce
aggregate position limitations or position accountability for speculators, as
necessary and appropriate, to reduce the potential threat of market
manipulation and excessive speculation in a marketplace in which supply is
fixed by government policy and demand is set by market prices;</text>
</clause><clause id="id603041138D2446DFB9343D9146E427BC"><enum>(ii)</enum><text>facilitate
netting of members’ positions across all of the instruments through the trading
facility, in order to minimize the cost of trading while ensuring adequate risk
management; and</text>
</clause><clause id="id80302CD7DDCC48019CF2244D88EA42E6"><enum>(iii)</enum><text>monitor and
enforce any limitations on leverage or position size that might be imposed by
the Commission.</text>
</clause></subparagraph><subparagraph id="ID2bb34f331277451fbaf9fdc6d07701b7"><enum>(F)</enum><header>Emergency
authority</header><text>The trading facility shall adopt and enforce rules to
provide for the exercise of emergency authority, in consultation or cooperation
with the Commission, as necessary and appropriate, including the
authority—</text>
<clause id="IDc4bb3c2dfb0f4c3e9579b8e579e21297"><enum>(i)</enum><text>to liquidate or
transfer open positions in any contract;</text>
</clause><clause id="ID5aecc6d2105648649673b3c83f733255"><enum>(ii)</enum><text>to suspend or
curtail trading in any regulated instrument; and</text>
</clause><clause id="ID94461502da384d27a18a6c8df31351ff"><enum>(iii)</enum><text>in the case of
a regulated derivative, to require market participants to meet special margin
requirements.</text>
</clause></subparagraph><subparagraph id="IDe5b3d82d73de4b718aeaae374f401f7a"><enum>(G)</enum><header>Availability of
general information</header><text>The trading facility shall make available to
market authorities, market participants, and the public information
concerning—</text>
<clause id="ID3bde12f5cee242bcb389bd5e9ee3f90f"><enum>(i)</enum><text>the terms,
conditions, and specifications of the contracts traded on or through the
trading facility;</text>
</clause><clause id="IDc43aac22e381455f88cddad0c6f4d1e8"><enum>(ii)</enum><text>the mechanisms
for executing transactions on or through the trading facility; and</text>
</clause><clause id="ID868d8f73a7ef4cffaaf2596ca4101fc9"><enum>(iii)</enum><text>the rules and
regulations of the trading facility.</text>
</clause></subparagraph><subparagraph id="ID24f31f2cf0234d9abfb9ea9318fe00e1"><enum>(H)</enum><header>Publication of
trading information</header>
<clause id="idD8C9D9CAB2D645C7A438E5526E981511"><enum>(i)</enum><header>In
general</header><text>The trading facility shall, in real time, to the maximum
extent practicable, provide the public with information on bids, offers,
settlement prices, volume, open interest, and opening and closing ranges for
all regulated instruments traded on the trading facility.</text>
</clause><clause id="id571AEC02DEFF4309A81ED66A34257D62"><enum>(ii)</enum><header>Centralized
entity</header><text>The Commission may by regulation permit compliance with
this subparagraph through the provision of pricing information described in
clause (i) to a centralized entity that will simultaneously post that
information to the public.</text>
</clause></subparagraph><subparagraph id="IDe1c00242d76b42f797301191d851559e"><enum>(I)</enum><header>Execution of
transactions</header><text>The trading facility shall provide a competitive,
open, and efficient market and mechanism for executing transactions on or
through the trading facility.</text>
</subparagraph><subparagraph id="ID2e87c0d3c3ca4ead8820ebf61e8837ff"><enum>(J)</enum><header>Security of
trade information</header><text>The trading facility shall maintain rules and
procedures to provide for the recording and safe storage of all identifying
trade information in a manner that enables the trading facility to use the
information—</text>
<clause id="id55FD6EAC41104BA881D0311472025337"><enum>(i)</enum><text>to assist the
prevention of customer and market abuses; and</text>
</clause><clause id="idE1AC5AF4932C4AB9A05CFD802D3B8181"><enum>(ii)</enum><text>provide evidence
of violations of the rules of the trading facility.</text>
</clause></subparagraph><subparagraph id="IDe803bdbeef0c408399f8d48d2057381f"><enum>(K)</enum><header>Dispute
resolution</header><text>The trading facility shall establish and enforce rules
regarding and provide facilities for alternative dispute resolution as
appropriate for market participants and any market intermediaries.</text>
</subparagraph><subparagraph id="IDdb56cb3648aa44cc8a305d614dfd1284"><enum>(L)</enum><header>Governance
fitness standards</header><text>The trading facility shall establish and
enforce appropriate fitness standards for directors, members of any
disciplinary committee, members of the trading facility, and any other person
with direct access to the trading facility (including any parties affiliated
with any of the persons described in this subparagraph).</text>
</subparagraph><subparagraph id="ID6d71c385f5754a9988f28caf254b501f"><enum>(M)</enum><header>Conflicts of
interest</header><text>The trading facility shall—</text>
<clause id="id3033B02085244FB3A964ABF12DBA0E5E"><enum>(i)</enum><text>establish and
enforce rules to minimize conflicts of interest in the decisionmaking process
of the trading facility; and</text>
</clause><clause id="id5D445616B15D4BA3AC355AC1E2BA7283"><enum>(ii)</enum><text>establish a
process for resolving any such conflict of interest.</text>
</clause></subparagraph><subparagraph id="ID1940db407a0d4f388754b413244b9e0b"><enum>(N)</enum><header>Composition of
boards of mutually owned trading facilities</header><text>In the case of a
mutually owned trading facility, the trading facility shall ensure that the
composition of the governing board reflects market participants.</text>
</subparagraph><subparagraph id="ID950bcef8e75642f18ce34392ed26ca86"><enum>(O)</enum><header>Recordkeeping</header><text>The
trading facility shall maintain records of all activities relating to the
business of the trading facility in a form and manner acceptable to the
Commission for a period of at least 5 years.</text>
</subparagraph><subparagraph id="ID2bef6c74ab7845dd97247d5e4fed0c6c"><enum>(P)</enum><header>Antitrust
considerations</header><text>Unless necessary or appropriate to achieve the
purposes of this title, the trading facility shall endeavor to avoid—</text>
<clause id="ID43e5b32ddb6449d2a0fdade5a9420652"><enum>(i)</enum><text>adopting any
rules or taking any actions that result in any unreasonable restraint of trade;
or</text>
</clause><clause id="ID5f1b20041ca845bcacf80283ed1349ff"><enum>(ii)</enum><text>imposing any
material anticompetitive burden on trading on or through the trading
facility.</text>
</clause></subparagraph><subparagraph id="ID590f9b3a6cff440094cb8d9c2768d31f"><enum>(Q)</enum><header>Trading
fees</header><text>The trading facility shall establish and enforce rules
requiring the payment of fees for the purpose of funding Commission oversight,
as established under section 208(h).</text>
</subparagraph><subparagraph id="ID68b360202954404184ab48a072f62a65"><enum>(R)</enum><header>Central limit
order book</header><text>The trading facility shall operate an electronic
central limit order book as the trading mechanism for regulated derivatives and
regulated allocations and share sufficient information, in a timely manner,
with the automated quotation system to allow implementation of section
207.</text>
</subparagraph><subparagraph id="ID54b9360e40ce4d559669b8f5847106e9"><enum>(S)</enum><header>National market
system</header><text>The trading facility shall participate, along with the
Commission, in the formation and operation of a national market system that
allows for best execution in the trading of regulated instruments among
registered carbon trading facilities.</text>
</subparagraph><subparagraph id="ID6f6f413adf3b4af49f8429bdf0644135"><enum>(T)</enum><header>Screening</header><text>The
trading facility shall establish and enforce rules to screen members based on
capital, systems, and standards of compliance, and other such membership
standards as the Commission determines to be appropriate.</text>
</subparagraph><subparagraph id="ID6f07231808dd47159b4b275ea5344d3b"><enum>(U)</enum><header>Use of
clearing</header><text>The trading facility shall facilitate the clearing of
all trades of regulated allowances through the Carbon Clearing Organization and
the clearing of all trades of regulated allowance derivatives through a
Derivatives Clearing Organization registered with the Commission.</text>
</subparagraph><subparagraph id="IDe1cc8a11a92c4cd1b1e6f3a37e303588"><enum>(V)</enum><header>Enforcement</header><text>The
trading facility shall establish and enforce rules that allow the trading
facility to obtain any necessary information to perform any of the functions
described in this paragraph, including the capacity to carry out such
international information-sharing agreements as the Commission may
require.</text>
</subparagraph></paragraph></subsection><subsection id="ID0a30343997fd4c0f9a4ee88ef1042c03"><enum>(b)</enum><header>Brokers,
dealers, traders, and their associates</header><text>The Commission shall
promulgate regulations governing—</text>
<paragraph id="IDd3a2d40286b04305bc40b5e4631659c5"><enum>(1)</enum><text>the eligibility
of a person to act in the capacity of an introducing broker, a dealer, a floor
broker, an electronic market trader, or a floor trader of regulated instruments
in the United States;</text>
</paragraph><paragraph id="ID0c1ee013c4ad4052a1dcd5d2f6593e32"><enum>(2)</enum><text>the registration
of introducing brokers, dealers, floor brokers, electronic market traders, and
floor traders as registered carbon traders with the Commission;</text>
</paragraph><paragraph id="ID58b78bb6b89a42348149cec9a9d14219"><enum>(3)</enum><text>the conduct of a
person registered pursuant to regulations promulgated under paragraph (2), and
of a partner, officer, employee, or agent of the registered person, in
connection with transactions involving a regulated instrument; and</text>
</paragraph><paragraph id="ID6c473a27545043b680b14dacd02e55db"><enum>(4)</enum><text>minimum standards
for eligibility of a person to register as a registered carbon trader,
including the requirements that an applicant for such a position—</text>
<subparagraph id="ID336718e7ad904b5d821244d9223fa229"><enum>(A)</enum><text>has never had an
applicable license or registration revoked in any governmental
jurisdiction;</text>
</subparagraph><subparagraph id="ID69a88e0ebf20467d9445651cad76614c"><enum>(B)</enum><text>has never been
convicted of, or pled guilty or nolo contendere to, a felony in a domestic,
foreign, or military court;</text>
</subparagraph><subparagraph id="IDd7b0e937ea7c4d1c90c877a6570ae137"><enum>(C)</enum><text>has demonstrated
such financial responsibility, character, and general fitness as to command the
confidence of the community and to warrant a determination that the applicant
will operate honestly, fairly, and efficiently within the purposes of this
title;</text>
</subparagraph><subparagraph id="ID1a0ad0fa27e040489621f967cd796621"><enum>(D)</enum><text>has completed the
preregistration education requirement described in paragraph (5); and</text>
</subparagraph><subparagraph id="ID70770a0098d0414a85ab788b61e45426"><enum>(E)</enum><text>has passed a
written test that meets the test requirement described in paragraph (6).</text>
</subparagraph></paragraph><paragraph id="IDc3ee3e375834468fbb1b02ed6e879fed"><enum>(5)</enum><header>Preregistration
education of a carbon trader</header>
<subparagraph id="ID49ba2b579ad74725a74829a263f09ddf"><enum>(A)</enum><header>Minimum
educational requirements</header><text>In order to meet the preregistration
education requirement referred to in paragraph (4)(D), a person shall complete
at least 20 hours of education approved in accordance with subparagraph (B),
which shall include at least—</text>
<clause id="IDe5f33612d57443e59605abac5d17e96a"><enum>(i)</enum><text>6
hours of instruction on applicable Federal law (including regulations);</text>
</clause><clause id="ID136c37ec86fd4af28be6cc7d8f509be3"><enum>(ii)</enum><text>10 hours of
instruction in ethics, which shall include instruction on fraud, manipulation,
excessive speculation, and consumer protection; and</text>
</clause><clause id="ID019aa2d952ee42ebbf4d10c430c8a3b5"><enum>(iii)</enum><text>2 hours of
training relating to reporting requirements under this title.</text>
</clause></subparagraph><subparagraph id="IDa91332d5c2404fb48a9ee360b3b73d6b"><enum>(B)</enum><header>Approved
educational courses</header>
<clause id="id9239FAF581CE43E3851C14C3CE1E8D2C"><enum>(i)</enum><header>In
general</header><text>For the purpose of subparagraph (A), preregistration
educational courses shall be reviewed and approved by the Commission.</text>
</clause><clause id="id4CA83A53BF5D4F0BBFD2255CB602EAF5"><enum>(ii)</enum><header>Prohibition</header><text>To
maintain the independence of the approval process, the Commission shall not
directly or indirectly offer preregistration educational courses for loan
originators.</text>
</clause></subparagraph><subparagraph id="IDa15059e34cb840a2b3303e97d461ebc7"><enum>(C)</enum><header>Standards</header><text>In
approving courses under this paragraph, the Commission shall apply reasonable
standards in the review and approval of courses.</text>
</subparagraph></paragraph><paragraph id="ID191f70b3bc25431ca10d360343be9143"><enum>(6)</enum><header>Testing of a
carbon trader</header>
<subparagraph id="ID1acd5aea9e0d4114b4367c2388b30330"><enum>(A)</enum><header>In
general</header><text>In order to meet the written test requirement referred to
in paragraph (4)(E), an individual shall pass, in accordance with the standards
established under this paragraph, a qualified written test developed by the
Commission and administered by an approved test provider.</text>
</subparagraph><subparagraph id="IDcba7da156f794abb97a768a9ed17052a"><enum>(B)</enum><header>Qualified
test</header><text>A written test shall not be treated as a qualified written
test for purposes of subparagraph (A) unless—</text>
<clause id="IDd9c8c9c1e8ff4477bd7a34f93d5ab7f4"><enum>(i)</enum><text>the test consists
of a minimum of 100 questions; and</text>
</clause><clause id="ID3ee9f38a242e4885a615824da243b6f2"><enum>(ii)</enum><text>the test
adequately measures the knowledge and comprehension of the individual taking
the test in appropriate subject areas, including—</text>
<subclause id="ID88adbb20cbbd4a50bd7ac1a8be513f66"><enum>(I)</enum><text>ethics;</text>
</subclause><subclause id="ID1f94fc5c97c84667a7b8fa458d92aebb"><enum>(II)</enum><text>Federal law
(including regulations) pertaining to trading regulated instruments; and</text>
</subclause><subclause id="ID7bde7fb8a8154f4190715cca186c2cc0"><enum>(III)</enum><text>Federal law
(including regulations) on fraud, manipulation, excessive speculation, and
reporting.</text>
</subclause></clause></subparagraph><subparagraph id="IDc12ed85d4b9c4c2383afcdad3d7925b6"><enum>(C)</enum><header>Minimum
competence</header>
<clause id="IDa1d9bdf29524465592b79b32e2c08155"><enum>(i)</enum><header>Passing
score</header><text>An individual shall not be considered to have passed a
qualified written test under this paragraph unless the individual achieves a
test score of not less than 75 percent correct answers to questions on the
test.</text>
</clause><clause id="ID7b7a4254646a4642b536bcf41e1d6fcd"><enum>(ii)</enum><header>Initial
retests</header><text>An individual may retake a test 3 consecutive times, with
each consecutive taking occurring not later than 14 days after the preceding
test.</text>
</clause><clause id="IDc47345d3b0044719b9c052610c5d8fbf"><enum>(iii)</enum><header>Subsequent
retests</header><text>After 3 consecutive tests, an individual shall be
required to wait at least 14 days before retaking the test.</text>
</clause><clause id="IDb23ad43e0e474c61bebd7715ce30905d"><enum>(iv)</enum><header>Retest after
lapse of registration</header><text>A registered carbon trader who fails to
maintain a valid registration for a period of 5 years or longer shall retake
the test.</text>
</clause></subparagraph></paragraph><paragraph id="IDe7d578f6e78748919f9384cef52727a3"><enum>(7)</enum><header>Background
checks</header><text>An applicant for registration shall, at a minimum, provide
to the Commission—</text>
<subparagraph id="idB98CD8E6C6974CEAAEB73523F407EBDB"><enum>(A)</enum><text>fingerprints for
submission to the Federal Bureau of Investigation for a State and national
criminal history background check;</text>
</subparagraph><subparagraph id="id997BF493B9BD4DFEA467B7DACFD380CF"><enum>(B)</enum><text>a description of
personal history and experience, including an independent credit report
obtained from a consumer reporting agency described in section 603(p) of the
Fair Credit Reporting Act (15 U.S.C. 1681a(p)); and</text>
</subparagraph><subparagraph id="id5609DE908A4E4D4FA8FDE740C157305B"><enum>(C)</enum><text>information
relating to any administrative, civil, or criminal findings by any governmental
jurisdiction.</text>
</subparagraph></paragraph></subsection></section><section id="ID315f8ec042a549bb949f0aa60ce35656"><enum>206.</enum><header>Carbon
clearing organization</header>
<subsection id="ID7589e9eaee3e41b793c7cf84fc3c00e9"><enum>(a)</enum><header>Establishment</header>
<paragraph id="id53D5DDBF00BF425FB3F2FE8516674728"><enum>(1)</enum><header>In
general</header><text>The Commission shall establish an entity to be known as
the <quote>Carbon Clearing Organization</quote> for the purpose of creating a
common clearing platform for regulated allowances.</text>
</paragraph><paragraph id="id1B147AB2AB4049309F64774B261AF571"><enum>(2)</enum><header>Application by
derivatives clearing organization</header><text>A derivatives clearing
organization registered with the Commission pursuant to section 5b may apply to
the Commission for designation as the Carbon Clearing Organization by
submitting to the Commission an application that contains such information and
commitments as the Commission may require.</text>
</paragraph></subsection><subsection id="IDf5bae71c435e451db43acecc04c77bfd"><enum>(b)</enum><header>Operation</header>
<paragraph id="ID46024f01090d44c69e977a03e3184ce8"><enum>(1)</enum><header>Requirements</header>
<subparagraph id="idA6E8F3AAE980436ABDCB143B7496FBE8"><enum>(A)</enum><header>In
general</header><text>The Carbon Clearing Organization shall comply with the
requirements described in this paragraph.</text>
</subparagraph><subparagraph id="ID9158530a464144379a170970ab3144d2"><enum>(B)</enum><header>Financial
resources</header><text>The Carbon Clearing Organization shall demonstrate
adequate financial, operational, and managerial resources to discharge the
responsibilities of a clearing organization.</text>
</subparagraph><subparagraph id="ID12a3ef0bd977403786f25b9e7a242222"><enum>(C)</enum><header>Participant and
product eligibility</header><text>The Carbon Clearing Organization shall
establish—</text>
<clause id="IDc90d9eb5307840e2ad6053bd1ca9ab42"><enum>(i)</enum><text>appropriate
admission and continuing eligibility standards (including appropriate minimum
financial requirements) for members of and participants in the Carbon Clearing
Organization; and</text>
</clause><clause id="ID34f2f719f8f7481588a25a735fadb381"><enum>(ii)</enum><text>appropriate
standards for determining eligibility of agreements, contracts, or transactions
submitted to the Carbon Clearing Organization.</text>
</clause></subparagraph><subparagraph id="ID22de2f9c513740eb889cbff9cb50b323"><enum>(D)</enum><header>Risk
management</header><text>The Carbon Clearing Organization shall manage the
risks associated with discharging the responsibilities of a clearing
organization through the use of appropriate tools and procedures.</text>
</subparagraph><subparagraph id="IDbfa34e8a46ac436499611358a1e9f498"><enum>(E)</enum><header>Settlement
procedures</header><text>The Carbon Clearing Organization shall—</text>
<clause id="ID8c58d6301f3f481c97a6967a70e788d8"><enum>(i)</enum><text>complete
settlements on a timely basis under varying circumstances; and</text>
</clause><clause id="IDacefcf137ace4118828333776156dde1"><enum>(ii)</enum><text>maintain an
adequate record of the flow of funds associated with each transaction that the
Carbon Clearing Organization clears.</text>
</clause></subparagraph><subparagraph id="ID8e9b627269634b2886d6cdbbdd96461c"><enum>(F)</enum><header>Treatment of
funds</header><text>The Carbon Clearing Organization shall have standards and
procedures designed to protect and ensure the safety of member and participant
funds.</text>
</subparagraph><subparagraph id="IDa5a30763ebdb48aba7495f1f5fee43f3"><enum>(G)</enum><header>Default rules
and procedures</header><text>The Carbon Clearing Organization shall have rules
and procedures designed to allow for efficient, fair, and safe management of
events if members or participants become insolvent or otherwise default on
obligations to the Carbon Clearing Organization.</text>
</subparagraph><subparagraph id="ID3805b42eb43846ce9efcaec98a73f8b6"><enum>(H)</enum><header>Rule
enforcement</header><text>The Carbon Clearing Organization shall—</text>
<clause id="ID0b0909eb7b8549ec860adb3d51ecab0a"><enum>(i)</enum><text>maintain adequate
arrangements and resources for the effective monitoring and enforcement of
compliance with rules of Carbon Clearing Organization and for resolution of
disputes; and</text>
</clause><clause id="ID0582b4286eb94b8cb946489bbca6712c"><enum>(ii)</enum><text>have the
authority and ability to discipline, limit, suspend, or terminate the
activities of a member or participant for violations of rules of the Carbon
Clearing Organization.</text>
</clause></subparagraph><subparagraph id="IDf32e1522b74d451b91ec7e049807784e"><enum>(I)</enum><header>System
safeguards</header><text>The Carbon Clearing Organization shall—</text>
<clause id="IDff500cd58a404fc7a9bebd5be6c31b9e"><enum>(i)</enum><text>establish and
maintain a program of oversight and risk analysis to ensure that the automated
systems of the Carbon Clearing Organization function properly and have adequate
capacity and security; and</text>
</clause><clause id="ID2edaeae40b04450e87e3c919cd984829"><enum>(ii)</enum><text>establish and
maintain emergency procedures and a plan for disaster recovery, and will
periodically test backup facilities sufficient to ensure daily processing,
clearing, and settlement of transactions.</text>
</clause></subparagraph><subparagraph id="ID415e1ef689c24feca9701fab5703addf"><enum>(J)</enum><header>Public
information</header><text>The Carbon Clearing Organization shall make
information concerning the rules and operating procedures governing the
clearing and settlement systems (including default procedures) available to
market participants.</text>
</subparagraph><subparagraph id="IDc92e4ff4a5b94b65a148603c71c058c1"><enum>(K)</enum><header>Information-sharing</header><text>The
Carbon Clearing Organization shall—</text>
<clause id="ID1168e293dbea4b649bb427d7b4749d27"><enum>(i)</enum><text>enter into and
abide by the terms of all appropriate and applicable domestic and international
information-sharing agreements; and</text>
</clause><clause id="ID0ce38035dc62499ba14d73061e8cd714"><enum>(ii)</enum><text>use relevant
information obtained from the agreements in carrying out the risk management
program of the Carbon Clearing Organization.</text>
</clause></subparagraph></paragraph></subsection></section><section id="IDf3939682582741108f8d34fa271974a7"><enum>207.</enum><header>Automated
quotation systems</header>
<subsection id="ID23752778db344a6ea0e811f9ae083daa"><enum>(a)</enum><header>In
general</header><text>The Commission shall facilitate the widespread
dissemination of reliable and accurate last-sale and quotation information with
respect to regulated instruments, short sales, and private bilateral contracts
the value of which, in whole or in part, is linked to the price of a regulated
instrument by establishing an automated quotation system that will collect and
disseminate information regarding all regulated instruments.</text>
</subsection><subsection id="IDfd90cad8625544909964164aebacaa2a"><enum>(b)</enum><header>Characteristics
of system</header><text>The automated quotation system shall—</text>
<paragraph id="IDe85a409bc4c04ed3bc4890a66da5d538"><enum>(1)</enum><text>collect and
disseminate quotation and transaction information;</text>
</paragraph><paragraph id="IDb8498ce9f6dd478095011beee4fa5308"><enum>(2)</enum><text>provide bid and
ask quotations of participating brokers or dealers; and</text>
</paragraph><paragraph id="IDf348563a10b04f708ffcc0640ec52419"><enum>(3)</enum><text>provide for the
reporting of information on bids, offers, settlement prices, volume, open
interest, and opening and closing ranges for all regulated instrument
transactions, including last-sale reporting.</text>
</paragraph></subsection><subsection id="IDa90dd19d060d41ad9747a907c07920dd"><enum>(c)</enum><header>Electronic
linkage</header><text>The carbon allowance trading facility and all registered
carbon derivative trading facilities shall be linked electronically with the
automated quotation system.</text>
</subsection><subsection id="ID0134a44c00fa4dccbadbe71723db1dad"><enum>(d)</enum><header>Missing</header><text>All
registered carbon trading facilities shall share sufficient information with
the automated quotation system to allow the implementation of this
section.</text>
</subsection></section><section id="IDe03dcb6e0e0f43c68b3bf626dcfa0e5c"><enum>208.</enum><header>Administrative
enforcement</header>
<subsection id="IDcc49652a05da44649155ca502b3eacce"><enum>(a)</enum><header>Investigations</header><text>The
Commission may conduct such investigations as the Commission determines to be
necessary to carry out this title, in accordance with this Act.</text>
</subsection><subsection id="ID40f5a8e846b04b57b981c068cdf4da26"><enum>(b)</enum><header>Review of
adverse action by registered carbon trading facility</header>
<paragraph id="IDa10b3dbcd1b04659bd7858c9e0ed56dc"><enum>(1)</enum><header>In
general</header>
<subparagraph id="ID3a1d1596faa940758bae5f75a86bc8bd"><enum>(A)</enum><header>Disciplinary
actions</header><text>The Commission may, in accordance with such standards and
procedures as the Commission determines to be appropriate, review a decision by
a registered carbon trading facility—</text>
<clause id="id9E94E5DA50714A8EA13AABCB3739B292"><enum>(i)</enum><text>to suspend,
expel, or otherwise discipline a member of the trading facility; or</text>
</clause><clause id="id7EF8253FBC4246AFBC7936AEFDB59A66"><enum>(ii)</enum><text>to deny access
to the trading facility.</text>
</clause></subparagraph><subparagraph id="ID0101e234cea9446d803a597546e3e2a1"><enum>(B)</enum><header>Other
actions</header><text>On application of any person who is adversely affected by
any decision by a registered carbon trading facility described in subparagraph
(A), the Commission may—</text>
<clause id="id5D0180E41881457DBE36B4270D140F58"><enum>(i)</enum><text>review the
decision; and</text>
</clause><clause id="id99522B4F6E1C45569C3721B4E8FBB45B"><enum>(ii)</enum><text>issue such order
with respect to the decision as the Commission determines to be appropriate to
protect the public interest.</text>
</clause></subparagraph></paragraph><paragraph id="ID40df4d0f38d8486080fa45337bb24127"><enum>(2)</enum><header>Scope of
authority</header><text>The Commission may affirm, modify, set aside, or remand
a trading facility decision reviewed under paragraph (1), after a determination
on the record as to whether the decision was made in accordance with the rules
of the trading facility.</text>
</paragraph></subsection><subsection id="ID7c6d2d5976454a12b2c404a4379226cc"><enum>(c)</enum><header>Complaints</header><text>The
Commission shall enforce this title in accordance with this Act.</text>
</subsection><subsection id="ID00775cd8ea0045ff8e65b21f9f3751a4"><enum>(d)</enum><header>Authority To
suspend or revoke registered carbon trading facility
designation</header><text>The Commission may suspend for a period of not more
than 180 days, or revoke, the designation of a trading facility as a registered
carbon trading facility if, after notice and opportunity for a hearing on the
record, the Commission finds that—</text>
<paragraph id="IDe00dd426b63a4ee3af372e14f10ee738"><enum>(1)</enum><text>the trading
facility or the entity, as the case may be, has not complied with a requirement
of subsection (a)(3) or (c) of section 205, as the case may be; or</text>
</paragraph><paragraph id="IDdd45bcb3d5404a5e94ec6a79dad38b9e"><enum>(2)</enum><text>a director,
officer, employee, or agent of the trading facility or entity, as the case may
be, has violated this title or a regulation or order promulgated or issued
under this title.</text>
</paragraph></subsection><subsection id="IDe2c13809b1f54977931b6f2acf93fed9"><enum>(e)</enum><header>Injunctive
relief</header><text>If the Commission finds that a person has violated this
title or a regulation or order promulgated or issued under this title, the
Commission may seek injunctive relief in accordance with this Act.</text>
</subsection><subsection id="ID6813e3e852974b23b844831a927df5bd"><enum>(f)</enum><header>Trading
suspensions; emergency authority</header>
<paragraph id="IDefef88759ecb433bafe5bb4e548c7d89"><enum>(1)</enum><header>Definition of
emergency</header><text>In this subsection, the term <term>emergency</term>
means—</text>
<subparagraph id="ID2cde74cdf4e148bba9490c5aa21cc7b3"><enum>(A)</enum><text>a major market
disturbance characterized by or constituting—</text>
<clause id="IDd22e09429c2e4644adb45e0fc631debb"><enum>(i)</enum><text>sudden and
excessive fluctuations of prices of regulated instruments generally (or a
substantial threat of such sudden and excessive fluctuations) that threaten
fair and orderly markets; or</text>
</clause><clause id="ID7a57273b4240497297944602089e55cc"><enum>(ii)</enum><text>a substantial
disruption of the safe or efficient operation of the national system for
clearance and settlement of transactions in regulated instruments (or a
substantial threat of such a disruption); or</text>
</clause></subparagraph><subparagraph id="ID61a116f6c0834e258093b0404db92a0c"><enum>(B)</enum><text>a major
disturbance that substantially disrupts, or threatens to substantially
disrupt—</text>
<clause id="ID7ed812d410c943c797924a4eed57d832"><enum>(i)</enum><text>the functioning
of markets in regulated instruments, or any significant portion or segment of
the markets; or</text>
</clause><clause id="ID887d9a43993142daa2f7a65e768daa02"><enum>(ii)</enum><text>the transmission
or processing of transactions in regulated instruments.</text>
</clause></subparagraph></paragraph><paragraph id="IDfe0d6c63c86743eeaa3a102b3ac1b844"><enum>(2)</enum><header>Trading
suspensions</header>
<subparagraph id="idBCE57D59E8684B6088060419760BF5A1"><enum>(A)</enum><header>In
general</header><text>Subject to subparagraph (B), if the Commission determines
that the public interest so requires, the Commission may, by order, summarily
suspend all trading of regulated instruments on any trading facility or
otherwise, for a period not exceeding 90 calendar days.</text>
</subparagraph><subparagraph id="id862DF4A60E5045D4B30D0F85D67E1B39"><enum>(B)</enum><header>Notification of
decision</header><text>An order issued by the Commission under subparagraph (A)
shall not take effect unless—</text>
<clause id="id56AF3AB4D4F740B6B472E41F2B96C2C6"><enum>(i)</enum><text>the Commission
notifies the President of the decision of the Commission; and</text>
</clause><clause id="id188C2F53196F43F4A78AA9F02385742B"><enum>(ii)</enum><text>the President
notifies the Commission that the President does not disapprove of the
decision.</text>
</clause></subparagraph></paragraph><paragraph id="IDb9e38e09164f4a31bc8d538ac097545f"><enum>(3)</enum><header>Emergency
orders</header>
<subparagraph id="ID8205b6f33cd84b1486625dcdb5fdb43c"><enum>(A)</enum><header>In
general</header><text>The Commission, in an emergency, may by order summarily
take such action to alter, supplement, suspend, or impose requirements or
restrictions with respect to any matter or action subject to regulation by the
Commission or an entity registered under this title, as the Commission
determines is necessary in the public interest—</text>
<clause id="ID4242fe65e137420aad6945809b2e7f57"><enum>(i)</enum><text>to maintain or
restore fair and orderly markets in regulated instruments; or</text>
</clause><clause id="ID98798b130b5643feaa6c5c8540ab4e00"><enum>(ii)</enum><text>to ensure
prompt, accurate, and safe clearance and settlement of transactions in
regulated instruments.</text>
</clause></subparagraph><subparagraph id="ID86915f38bd394d01beb1e9807d4cfa20"><enum>(B)</enum><header>Effective
period</header><text>An order of the Commission under this paragraph—</text>
<clause id="idE4E4511D162D40DFA1FB1C525EE49B40"><enum>(i)</enum><text>shall continue in
effect for the period specified by the Commission;</text>
</clause><clause id="id304A0CA06E274A2F8D7C98230F6BA02D"><enum>(ii)</enum><text>may be extended
in accordance with subparagraph (C); and</text>
</clause><clause id="id9DA7747DD72242CCBB9EFF7FE7026F15"><enum>(iii)</enum><text>except as
provided in subparagraph (C), may not continue in effect for more than 10
business days, including extensions.</text>
</clause></subparagraph><subparagraph id="ID164a09cc18de4a66b42e302efc60a636"><enum>(C)</enum><header>Extension</header><text>An
order of the Commission under this paragraph may be extended to continue in
effect for more than 10 business days, but in no event may continue in effect
for more than 30 calendar days, if, at the time of the extension, the
Commission determines that—</text>
<clause id="idF2912B78D583475DB3D325F5994708ED"><enum>(i)</enum><text>the emergency
situation still exists; and</text>
</clause><clause id="idA75E040BC1FC4D5B80EB782ED8BD76FA"><enum>(ii)</enum><text>the continuation
of the order beyond 10 business days is necessary in the public interest and
for the protection of investors to attain an objective described in clause (i)
or (ii) of subparagraph (A).</text>
</clause></subparagraph><subparagraph id="IDb4356ff1b19a45c7b4e6765d969c9548"><enum>(D)</enum><header>Exemption</header><text>In
exercising the authority provided by this paragraph, the Commission shall not
be required to comply with section 553 of title 5, United States Code.</text>
</subparagraph></paragraph><paragraph id="ID7ee60b0d82c34214a020f21b61abe984"><enum>(4)</enum><header>Termination of
emergency actions by President</header><text>The President may direct that
action taken by the Commission under paragraph (3) shall not continue in
effect.</text>
</paragraph><paragraph id="ID2d3e0bc83ca64a5a80472b80965889e9"><enum>(5)</enum><header>Compliance with
orders</header><text>A member of a trading facility, introducing broker,
dealer, floor broker, or floor trader shall not effect any transaction in, or
induce the purchase or sale of, any regulated instrument in contravention of an
order of the Commission under this subsection, unless the order—</text>
<subparagraph id="id3599517461844498984FAA0BB9C1DA68"><enum>(A)</enum><text>has been stayed,
modified, or set aside as provided in paragraph (6); or</text>
</subparagraph><subparagraph id="idA4476C741FE848BBB8FFF9DC4B085800"><enum>(B)</enum><text>has ceased to be
effective on direction of the President as provided in paragraph (4).</text>
</subparagraph></paragraph><paragraph id="IDc0893d5ad2dc46e888c96a8cec9aad3b"><enum>(6)</enum><header>Limitations on
review of orders</header>
<subparagraph id="idAF82DA72D773451F90387008E3B020CE"><enum>(A)</enum><header>In
general</header><text>An order of the Commission pursuant to this subsection
shall be subject to review by the United States Court of Appeals for the
District of Columbia Circuit.</text>
</subparagraph><subparagraph id="id1C07F1BA9BE146F58362CBD598251097"><enum>(B)</enum><header>Basis</header><text>A
review of an order under subparagraph (A) shall be based on an examination of
all the information before the Commission at the time the order was
issued.</text>
</subparagraph><subparagraph id="idE68EBD3B0E714E6689517F509D587761"><enum>(C)</enum><header>Standard for
findings</header><text>The reviewing court shall not enter a stay, writ of
mandamus, or similar relief unless the court finds, after notice and hearing
before a panel of the court, that the action of the Commission is arbitrary,
capricious, an abuse of discretion, or otherwise not in accordance with
law.</text>
</subparagraph></paragraph></subsection><subsection id="ID4391553ea2d64c9eaa31895c748b6da0"><enum>(g)</enum><header>Other authority
To issue orders</header><text>The Commission may issue such other orders as are
necessary to ensure compliance with this title (including regulations
promulgated under this title).</text>
</subsection><subsection id="ID0b136739a56a44689daf1ba0aa8650fe"><enum>(h)</enum><header>Trading fees To
support commission activities</header>
<paragraph id="idC4BF58EEB5CB47AAAE4B08D37C70E8FC"><enum>(1)</enum><header>In
general</header><text>To support oversight by the Commission of markets under
this title, each registered trading facility shall charge a trading fee, per
transaction, to be established by the Commission at a level not to exceed
<fraction>1/2</fraction> of 1 percent of the value of the contract being
executed.</text>
</paragraph><paragraph id="idCC8FC6A079364B1A9D3743F59BE33CA8"><enum>(2)</enum><header>Remittance of
fees</header><text>Each registered trading facility shall submit fees charged
under this subsection to the Commission on such schedule as the Commission
shall designate.</text>
</paragraph></subsection></section><section id="ID4c4d7d379f0748bb9905473050b00be9"><enum>209.</enum><header>Civil judicial
enforcement</header>
<subsection id="ID8532913ab9064753ad9baf33095533cf"><enum>(a)</enum><header>In
general</header><text>If it appears to the Commission that a person has
engaged, is engaging, or is about to engage in any act or practice constituting
a violation of this title (including a regulation promulgated or order issued
under this title), the Commission may bring a civil action in the appropriate
United States district court or United States court of any territory or other
place subject to the jurisdiction of the United States—</text>
<paragraph id="id5E68DC961D5743B69BC8ACA7986B5C9C"><enum>(1)</enum><text>to enjoin the act
or practice; or</text>
</paragraph><paragraph id="id879D3DF5F85B42A9A9E85CF9AAC3FF4E"><enum>(2)</enum><text>to enforce
compliance with this title (or a regulation or order promulgated or issued
under this title).</text>
</paragraph></subsection><subsection id="ID6f8874dc9c464cf7a087470ff99d11fb"><enum>(b)</enum><header>Forms of
relief</header>
<paragraph id="IDa7c57a0887e94ebfa12708f91fbb5c8c"><enum>(1)</enum><header>Injunctive
relief; restraining order</header><text>On a proper showing, a court described
in subsection (a) shall grant a permanent or temporary injunction or issue a
restraining order, without bond.</text>
</paragraph><paragraph id="IDc289ff16635240e08ea3481f0d988e4e"><enum>(2)</enum><header>Civil money
penalty</header>
<subparagraph id="ID38a19322937a47638f8c1e178f009946"><enum>(A)</enum><header>In
general</header><text>The Commission may seek and the court, on a proper
showing, shall have jurisdiction to impose on any person found in the civil
action brought under this section to have committed a violation, a civil
penalty in an amount that is not more than the greater of—</text>
<clause id="id67B5996E508D44319A1FE7ACFA335CA1"><enum>(i)</enum><text>$100,000;
or</text>
</clause><clause id="idD1ED93B9E0E847B39B1D0799C72F1DBE"><enum>(ii)</enum><text>triple the
monetary gain to the person for the violation.</text>
</clause></subparagraph><subparagraph id="ID485fad9b1f664ae7bd2ec31aa1b0826c"><enum>(B)</enum><header>Enforcement of
penalty by the attorney general</header><text>If a person on whom such a
penalty is imposed fails to pay the penalty within the time prescribed in the
order of the court, the Commission may refer the matter to the Attorney
General, who shall recover the penalty by action in the appropriate United
States district court.</text>
</subparagraph></paragraph></subsection></section><section id="ID169016078c17486b9ed145a2a50eb628"><enum>210.</enum><header>Criminal
enforcement</header>
<subsection id="ID7ed61cf29b954d6fb2297263eda57f4a"><enum>(a)</enum><header>Violations
generally</header><text>A person that knowingly violates section 204 (or any
regulation promulgated under section 204), or willfully violates any other
provision of this title (or a regulation promulgated under this title) the
violation of which is made unlawful or the observance of which is required by
or under this title, shall—</text>
<paragraph id="id9AEAFF7346254314A80F3EFEB0930199"><enum>(1)</enum><text>be fined not more
than $1,000,000 (or not more than $500,000, if the violator is an individual),
imprisoned not more than 5 years, or both; and</text>
</paragraph><paragraph id="id15A798EE584F43B9BDFD0592EAF04B66"><enum>(2)</enum><text>shall pay the
costs of prosecution.</text>
</paragraph></subsection><subsection id="IDaabd55bf21e34eb184a355319c2f510b"><enum>(b)</enum><header>Failure To
comply with cease and desist order</header>
<paragraph id="ID128a59b4c9a34f48b89523ff24716cb3"><enum>(1)</enum><header>In
general</header><text>If, after the period allowed for appeal of an order
issued under section 206(e) or after the affirmance of such an order, a person
subject to the order fails or refuses to comply with the order, the person
shall be—</text>
<subparagraph id="IDfeb0f8b7c6294469af5f054d36226891"><enum>(A)</enum><text>fined not more
than the greater of $100,000 or triple the monetary gain to the person,
imprisoned not less than 180 days nor more than 1 year, or both; or</text>
</subparagraph><subparagraph id="ID45241c2c543549df8ab344ae9c0a4d57"><enum>(B)</enum><text>if the failure or
refusal to comply involves a violation referred to in subsection (a), subject
to the penalties provided in that subsection for the violation.</text>
</subparagraph></paragraph><paragraph id="ID923167746f0a4e3eaa4af8c619eb941a"><enum>(2)</enum><header>Special
rule</header><text>Each day during which a failure or refusal to comply with
such an order continues shall be considered to be a separate offense for
purposes of paragraph (1).</text>
</paragraph></subsection></section><section id="IDafaca0bdaa7a44aaac34887531ee8cee"><enum>211.</enum><header>Market
reports</header>
<subsection id="IDca58d8a36fb74365a4c1d1eaa6c901df"><enum>(a)</enum><header>Collection and
analysis of information</header><text>The Commission shall, on a continuous
basis, collect and analyze the following information on the functioning of the
markets for regulated instruments established under this title:</text>
<paragraph id="ID80b55a336fce46b6b0ec6c08fc1fdafb"><enum>(1)</enum><text>The status of,
and trends in, the markets, including prices, trading volumes, transaction
types, and trading channels and mechanisms.</text>
</paragraph><paragraph id="IDb71b7bd13aee4051ad0193d0013c460c"><enum>(2)</enum><text>Spikes,
collapses, and volatility in prices of regulated instruments, and the causes of
the spikes, collapses, and volatility.</text>
</paragraph><paragraph id="IDb15312bb60cd4af5b7ec7a42f6286dce"><enum>(3)</enum><text>The relationship
between the market for emission allowances, offset credits, and allowance
derivatives, and the spot and futures markets for energy commodities, including
electricity.</text>
</paragraph><paragraph id="ID54292fbca2d246ecadae162f0b47b1ed"><enum>(4)</enum><text>Evidence of fraud
or manipulation in any such market, the effects on any such market of any such
fraud or manipulation (or threat of fraud or manipulation) that the Commission
has identified, and the effectiveness of corrective measures undertaken by the
Commission to address the fraud or manipulation, or threat.</text>
</paragraph><paragraph id="ID5476def55cc34e999bc245c068435d59"><enum>(5)</enum><text>The economic
effects of the markets, including to the macro- and micro-economic effects of
unexpected significant increases and decreases in the price of regulated
instruments.</text>
</paragraph><paragraph id="IDc562092936aa46cf949fcfc2df0a13df"><enum>(6)</enum><text>Any changes in
the roles, activities, or strategies of various market participants.</text>
</paragraph><paragraph id="IDc7139c567c2c4f17a91d3aea06884544"><enum>(7)</enum><text>Regional,
industrial, and consumer responses to the market, and energy investment
responses to the markets.</text>
</paragraph><paragraph id="IDa1215631f2d0492081241c27b5963d88"><enum>(8)</enum><text>Any other issue
relating to the markets that the Commission determines to be
appropriate.</text>
</paragraph></subsection><subsection id="ID5f2a2617b1de4612a9b17030a2664fb1"><enum>(b)</enum><header>Quarterly
reports to Congress</header><text>Not later than 30 days after the end of each
calendar quarter, the Commission shall submit to the President, the Committee
on Energy and Commerce of the House of Representatives, the Committee on Energy
and Natural Resources of the Senate, and the Committee on Environment and
Public Works of the Senate, and make available to the public, a report on the
matters described in subsection (a) with respect to the quarter, including
recommendations for any administrative or statutory measures the Commission
considers necessary to address any threats to the transparency, fairness, or
integrity of the markets in regulated instruments.</text>
</subsection></section><section id="ID43a68c0e8f71402da783a00c7e215eff"><enum>212.</enum><header>Authorization
of appropriations</header><text display-inline="no-display-inline">In addition
to any fees collected by the Commission under this Act, there are authorized to
be appropriated such sums as are necessary to carry out this
title.</text>
</section>.
(b)The Commodity Exchange Act (7 U.S.C. 1 et seq.) is
amended by inserting after section 1a (7 U.S.C. 1a) the following:
<enum>I</enum><header>Regulation of
commodity
exchanges</header>
.