[Congressional Record Volume 161, Number 91 (Tuesday, June 9, 2015)]
[House]
[Pages H3932-H3950]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     COMMODITY END-USER RELIEF ACT


                             General Leave

  Mr. CONAWAY. Mr. Speaker, I ask unanimous consent that all Members 
have 5 legislative days within which to revise and extend their remarks 
and include extraneous material on the bill, H.R. 2289.
  The SPEAKER pro tempore (Mr. LaMalfa). Is there objection to the 
request of the gentleman from Texas?
  There was no objection.
  The SPEAKER pro tempore. Pursuant to House Resolution 288 and rule 
XVIII, the Chair declares the House in the Committee of the Whole House 
on the state of the Union for the consideration of the bill, H.R. 2289.
  The Chair appoints the gentleman from Idaho (Mr. Simpson) to preside 
over the Committee of the Whole.

                              {time}  1526


                     In the Committee of the Whole

  Accordingly, the House resolved itself into the Committee of the 
Whole House on the state of the Union for the consideration of the bill 
(H.R. 2289) to reauthorize the Commodity Futures Trading Commission, to 
better protect futures customers, to provide end-users with market 
certainty, to make basic reforms to ensure transparency and 
accountability at the Commission, to help farmers, ranchers, and end-
users manage risks, to help keep consumer costs low, and for other 
purposes, with Mr. Simpson in the chair.
  The Clerk read the title of the bill.
  The CHAIR. Pursuant to the rule, the bill is considered read the 
first time.
  The gentleman from Texas (Mr. Conaway) and the gentleman from 
Minnesota (Mr. Peterson) each will control 30 minutes.
  The Chair recognizes the gentleman from Texas.
  Mr. CONAWAY. Mr. Chairman, I yield myself such time as I may consume.
  I rise today in support of H.R. 2289, the Commodity End-User Relief 
Act.
  I want to start by thanking Chairman Austin Scott and Ranking Member 
David Scott of the Commodity Exchanges, Energy, and Credit 
Subcommittee. They have done a tremendous job over the past few months 
working on these issues. They have held three hearings on 
reauthorization, listening to testimony from end users, financial 
intermediaries, and even the commissioners themselves. Without their 
work, we would not have been able to move this bill today.
  H.R. 2289, the Commodity End-User Relief Act, does exactly what the 
name suggests: it provides relief from unnecessary red tape for the 
businesses that ``make things'' in our country.
  End users are the businesses that provide Americans with food, 
clothing, transportation, electricity, heat, and much, much more. 
Companies that produce, consume, and transport the commodities that 
make modern life possible use futures and swaps markets to reduce the 
uncertainties that their businesses face. Farmers hedge their crops in 
the spring so that they know what price they will get paid in the fall. 
Utilities hedge the price of energy so they can charge customers at a 
steady rate. Manufacturers hedge the cost of steel, energy, and other 
inputs to lock in prices as they work to fill their orders.
  The fact is, no end user played any part in the financial crisis of 
2008, and no end user poses a systemic risk to U.S. derivatives 
markets. Yet, as the Agriculture Committee heard in countless hours of 
testimony, it is now more difficult and more expensive for farmers, 
ranchers, processors, manufacturers, merchandisers, and other end users 
to manage their risks than it was 5 years ago.
  To address their concerns, H.R. 2289 makes targeted reforms to the 
Commodity Exchange Act that fall into three broad categories: consumer 
protections, commission reforms, and end-user relief.
  Title I of the bill protects customers and the margin funds they 
deposit at their FCMs by codifying critical changes made in the wake of 
the collapse and bankruptcy of both MF Global and Peregrine Financial.
  Title II makes meaningful reforms to the operations of the Commission 
to improve the agency's deliberative process. In doing so, it also 
requires the Commission to conduct more robust cost-benefit analysis to 
help get future rulemakings right the first time and to avoid the 
endless cycle of re-proposing and delaying unworkable rules.
  Finally, title III fixes numerous problems faced directly by end 
users who rely on derivatives markets. From unnecessary recordkeeping 
burdens, to improperly categorizing physical transactions as swaps, to 
narrowing the bona fide hedge definition, CFTC rules have discouraged 
exactly the kind of prudent risk management activities Congress 
intended to protect with the end-users exemptions in the Dodd-Frank 
bill.
  These regulatory burdens present challenges to American businesses 
and will cost them significant capital to comply with, unless Congress 
acts to provide the relief.
  Title VII of Dodd-Frank sought to require that most swaps, one, be 
executed on an electronic exchange to ensure price transparency; two, 
be subject to initial and variation margin and central clearing through 
the lifetime of the transaction, to ensure performance on the 
obligation for counterparties; and, last, to be reported to a central 
repository to ensure that regulators have an accurate picture of the 
entire marketplace at any one point in time.

                              {time}  1530

  H.R. 2289 does not roll back a single core tenet of title VII. It 
does not change the execution, clearing, margining, and reporting 
framework set up by the act. In fact, not a single witness who appeared 
before the House Committee on Agriculture ever asked us to upend these 
principles. But what they did ask for were fixes to portions of the 
statute that didn't work as intended, to provide more flexibility in 
complying with the rules when they impaired end users' ability to 
hedge, and to bring more certainty to the Commission and how it 
operates. That is exactly what H.R. 2289 provides.
  Similar to the CFTC reauthorization bill passed by the House with 
overwhelming bipartisan support last Congress, the Commodity End-User 
Relief Act makes narrowly targeted changes to the Commodity Exchange 
Act. This legislation offers meaningful improvements for market 
participants without undermining the basic tenets of title VII. I am 
proud that the committee has again put together a bill that has earned 
the bipartisan support of our members because it provides the right 
relief to the right people.
  Mr. Chairman, I urge support of the Commodity End-User Relief Act.
  I reserve the balance of my time.

                                                     June 8, 2015.
       Dear Member of the House of Representatives: The 
     undersigned organizations represent a very broad cross-
     section of U.S. production agriculture and agribusiness. We 
     urge you to cast an affirmative vote on H.R. 2289, the 
     ``Commodity End-User Relief Act,'' when it moves to the floor 
     for consideration.
       This legislation contains a number of important provisions 
     for agricultural and agribusiness hedgers who use futures and 
     swaps to manage their business and production risks. Some, 
     but certainly not all, of the bill's important provisions 
     include:
       Sections 101-103--Codify important customer protections to 
     help prevent another MF Global situation.

[[Page H3933]]

       Section 104--Provides a permanent solution to the residual 
     interest problem that would have put more customer funds at 
     risk--and potentially driven farmers, ranchers and small 
     hedgers out of futures markets--by forcing pre-margining of 
     their hedge accounts.
       Section 308--Relief from burdensome and technologically 
     infeasible recordkeeping requirements in commodity markets.
       Section 310--Requires the CFTC to conduct a study and issue 
     a rule before reducing the de minimis threshold for swap 
     dealer registration in order to make sure that doing so would 
     not harm market liquidity and end-user access to markets.
       Section 313--Confirms the intent of Dodd-Frank that 
     anticipatory hedging is considered bona fide hedging 
     activity.
       Thank you in advance for your support of this bill that is 
     so important to U.S. farmers, ranchers, hedgers and futures 
     customers.
           Sincerely,
         Agribusiness Association of Iowa; Agribusiness Council of 
           Indiana/Indiana Grain and Feed Association; American 
           Cotton Shippers Association; American Farm Bureau 
           Federation; American Feed Industry Association; 
           American Soybean Association; Commodity Markets 
           Council; Grain and Feed Association of Illinois; Kansas 
           Grain and Feed Association; Michigan Agri-Business 
           Association; Michigan Bean Shippers Association; 
           Minnesota Grain and Feed Association; Missouri 
           Agribusiness Association; National Cattlemen's Beef 
           Association; National Corn Growers Association; 
           National Cotton Council; National Council of Farmer 
           Cooperatives; National Grain and Feed Association; 
           National Pork Producers Council; Nebraska Grain and 
           Feed Association; North American Export Grain 
           Association; North Dakota Grain Dealers Association; 
           Northeast Agribusiness and Feed Alliance; Ohio 
           AgriBusiness Association; Oklahoma Grain and Feed 
           Association; Pacific Northwest Grain and Feed 
           Association; Rocky Mountain Agribusiness Association; 
           Southeast Minnesota Grain and Feed Dealers Association; 
           South Dakota Grain and Feed Association; Tennessee Feed 
           and Grain Association; Texas Grain and Feed 
           Association; USA Rice Federation; Wisconsin Agri-
           Business Association.
                                  ____

                                                     June 5, 2015.
     House of Representatives,
     Washington, DC.
       Dear Representative: The National Association of 
     Manufacturers (NAM), the largest manufacturing association in 
     the United States representing manufacturers in every 
     industrial sector and in all 50 states, supports provisions 
     in the Commodity End User Relief Act (H.R. 2289), to clarify 
     that non-financial companies, like manufacturers, that use 
     derivatives to manage business risk will not be subject to 
     onerous and harmful regulatory requirements.
       Manufacturers use derivatives to manage and mitigate 
     against fluctuations in commodity prices and currency and 
     interest rates. The NAM worked to include provisions in the 
     Dodd-Frank Wall Street Reform and Consumer Protection Act 
     (P.L.111-203) to protect manufacturers' use of over-the-
     counter derivatives. We continue to work to ensure that, as 
     Dodd-Frank is implemented, end-users do not face undue 
     burdens. Imposing unnecessary regulation on end-users would 
     limit their ability to use these important risk management 
     tools, increasing costs and negatively impacting business 
     investment, U.S. competitiveness and job growth.
       Provisions included in H.R. 2289 would ensure that non-
     financial end-users trading through a centralized treasury 
     unit (``CTU'') are covered by the end-user clearing exemption 
     provided by the Dodd-Frank Act. Without the clarification on 
     CTUs, non-financial end-users may be swept into costly 
     clearing requirements meant for financial entities, simply 
     because they use a CTU to manage internal and external 
     trading to mitigate risk within a corporate entity--an 
     industry ``best practice''.
       The CFTC reauthorization also includes an NAM-supported 
     provision that requires the CFTC to take an affirmative 
     action before lowering the swap dealer de minimis threshold. 
     Without this provision, the de minimis level of swap dealing 
     automatically drops from the $8 billion to $3 billion in the 
     near future, sweeping some manufacturers into bank-like 
     regulatory requirements.
       Almost five years after the enactment of Dodd-Frank, 
     implementation of the Act is well underway and deadlines for 
     compliance with various regulations are looming. End-users 
     remain extremely concerned about the lack of clarity on the 
     CTU issue and the automatic drop in the de minimis threshold 
     for swap dealing among other issues. Thank you in advance for 
     supporting provisions in H.R. 2289 to ensure that derivatives 
     regulation is focused on needed areas, and not on imposing 
     unnecessary regulatory burdens on manufacturers.
           Sincerely,
     Dorothy Coleman.
                                  ____

                                                     May 11, 2015.
     Hon. Michael Conaway,
     Chairman, House Committee on Agriculture, Longworth House 
         Office Building, Washington, DC.
     Hon. Collin C. Peterson,
     Ranking Member, House Committee on Agriculture, Longworth 
         House Office Building, Washington, DC.
       Dear Chairman Conaway and Ranking Member Peterson: As the 
     House prepares to vote on and reauthorize the Commodity 
     Futures Trading Commission (CFTC) oversight of the futures 
     and swaps markets, the National Corn Growers Association 
     (NCGA) and the Natural Gas Supply Association (NGSA) wish to 
     express support for the end user provisions in the CFTC 
     reauthorization bill which will help to ensure that corn and 
     natural gas markets are able to function efficiently.
       Specifically, NCGA and NGSA support the provision which 
     will provide relief for end-users using physical contracts 
     with volumetric optionality and ensure that non-financial, 
     physical energy delivery agreements are not regulated as 
     swaps.
       Founded in 1957, NCGA represents more than 40,000 dues-
     paying corn farmers nationwide. NCGA and its 48 affiliated 
     state organizations work together to create and increase 
     opportunities for their members and their industry.
       Established in 1965, NGSA encourages the use of natural gas 
     within a balanced national energy policy, and promotes the 
     benefits of competitive markets, thus encouraging increased 
     supply and the reliable and efficient delivery of natural gas 
     to U.S. customers.
       Because of the potential for the Dodd-Frank Wall Street 
     Reform and Consumer Protection Act of 2010 (the Dodd-Frank 
     Act or the Act) to impede what are and have been healthy, 
     competitive, and resilient corn and natural gas markets, NCGA 
     and NGSA played an active role in the shaping of the Act 
     during its passage and have continued this role in ensuring 
     the Act's successful implementation by the CFTC.
       The CEA as amended by the Dodd-Frank Act excludes forward 
     contracts and includes options in commodities in the 
     definition of ``swap.'' This raises the practical question of 
     how to treat forward contracts containing terms that provide 
     for some form of flexibility in delivered volumes, i.e., 
     ``embedded optionality.''
       Flexibility in the terms of physical commodity forward 
     contracts is essential in everyday commerce given the 
     commercial uncertainties that exist in commodity delivery and 
     receipt. One important form of such flexibility involves the 
     volumes to be transacted in a forward contract. This 
     flexibility is necessary because parties cannot always 
     accurately predict the required or optimal amounts of 
     physical commodities to meet their business needs and 
     objectives. The CFTC refers to this flexibility as 
     ``volumetric optionality'' and has formulated rules that 
     suggest that the CFTC will regulate forward contracts with 
     such ``optionality'' as swaps.
       Volumetric optionality is a contractual tool used in the 
     physical commodity industry to ``right size'' physical 
     delivery. The ability to appropriately size a physical 
     commodity delivery via a contractual tool facilitates market 
     efficiency because it allows commercial market participants 
     to adjust delivery volumes seamlessly in response to changes 
     in supply and demand requirements at the time of delivery. 
     Volumetric optionality is a delivery tool that mitigates the 
     uncertainty inherent in any physical commodity contract, 
     making both parties aware of potential delivery variability 
     embedded within the intent to deliver. Thus, volumetric 
     optionality in a physical forward contract allows commercial 
     uncertainties to be accommodated up front, providing a 
     process for orderly physical delivery and settlement even in 
     the absence of precision in the delivery volume. Importantly, 
     the intent to physically deliver remains despite the 
     variability in final delivery terms.
       In August of 2012, the CFTC issued the final rule further 
     defining the term ``swap,'' Final Rule, Further Definition of 
     ``Swap,'' et al., 77 Fed. Reg. 48, 208 (August 13, 2012) 
     (Swap Definition Final Rule or Final Rule). As part of the 
     definition of swap, the Final Rule provides an interpretation 
     that an agreement, contract or transaction with embedded 
     optionality falls within the forward exclusion when seven 
     criteria are met. The seventh criterion or element requires 
     that:
       7. The exercise or non-exercise of the embedded volumetric 
     optionality is based primarily on physical factors, or 
     regulatory requirements, that are outside the control of the 
     parties and are influencing demand for, or supply of, the 
     nonfinancial commodity.
       In the Final Rule, the Commission specifically requested 
     comments on whether this seventh element is necessary, 
     appropriate and sufficiently clear and unambiguous. On 
     October 12, 2012, NCGA and NGSA submitted written comments to 
     the CFTC highlighting the market uncertainty that the new 
     seven-criterion test creates in light of very clear statutory 
     language stating that contracts with the intent to physically 
     deliver are physical forward contracts. Specifically, NCGA 
     and NGSA asked the Commission to affirm that the seven 
     criteria identified in the Final Rule are simply illustrative 
     of certain common characteristics in forward contracts with 
     embedded optionality, and thus, a safe harbor instead of 
     requirements for satisfaction of the forward contract 
     exclusion.
       NCGA and NGSA recognize the Commission's interest in 
     retaining the ability to regulate physical contracts with 
     embedded options as swaps if ``intent to physically deliver'' 
     is not genuine and simply crafted to evade regulation. 
     However, in this case, the Commission has created so much 
     ambiguity in the applicability of the forward-contract

[[Page H3934]]

     exclusion that market participants may be reluctant to use 
     volumetric optionality in their forward contracting. 
     Consequently, the regulatory uncertainty caused by the seven-
     criterion test compromises the viability of a physical 
     commodity market delivery tool that is critical to market 
     efficiency. The forward-contract exclusion should not be 
     implemented in a way that limits its usefulness to catching 
     bad actors at the expense of physical market efficiency.
       The definition of swap has far-reaching effects beyond 
     physical market efficiency. Determining what is and is not a 
     swap impacts the calculation of notional amount and thus, 
     which entities are swap dealers. It also impacts the 
     application of position limits and the appropriate scope of 
     the bona fide hedge exemption, clearing requirements, 
     reporting requirements and capital and margin requirements. 
     In short, the definition of swap is the heart and soul of the 
     end-user protections.
       The October 12, 2012 NCGA and NGSA request for clarity 
     regarding the Commission's expected application of the seven-
     criterion test remains unanswered. In light of the lingering 
     uncertainty created by the seven-criterion test, clarity 
     regarding the applicability of the forward-contract exclusion 
     to volumetric options embedded within a physical contract has 
     become essential to commodity producers and consumers. Given 
     the importance of the definition of swap to implementation of 
     so many other Dodd-Frank-Act-related CFTC regulations, 
     clarity is crucial to the sound implementation the Dodd-Frank 
     Act. This regulatory uncertainty has complicated sound 
     implementation of the Dodd-Frank Act and risks harming 
     commodity market efficiency. The CFTC is contemplating some 
     clarifying language on volumetric optionality which would be 
     welcome news. Regardless of the CFTC's clarification, 
     however, the implementation uncertainty that has persisted 
     for the last four years illustrates the need for legislative 
     changes.
       The swap definition is fundamental to implementation of the 
     CFTC's new Dodd-Frank rules and consequently to the on-going 
     availability of cost-effective risk management tools. 
     However, if the definition is too broad, it can bring in 
     common commercial agreements that have no relationship to the 
     types of transactions that the Dodd-Frank Act was intended to 
     regulate. Market participants demonstrating the potential to 
     exercise physical delivery or a history of physical delivery 
     must have confidence in the forward-contract exclusion from 
     the definition of a swap.
       NCGA and NGSA are committed to working with you to achieve 
     a positive outcome that both protects the integrity of 
     commodity markets and ensures the continued availability of 
     cost effective hedging tools.
           Sincerely,
     National Corn Growers Association.
     Natural Gas Supply Association.
                                  ____

                                                     June 2, 2015.
     Hon. John Boehner,
     Speaker, House of Representatives,
     Washington, DC.
     Hon. Michael Conaway,
     Chairman, House Agriculture Committee, House of 
         Representatives,Washington, DC.
     Hon. Nancy Pelosi,
     Minority Leader, House of Representatives,Washington, DC.
     Hon. Collin Peterson,
     Ranking Member, House Agriculture Committee, House of 
         Representatives,Washington, DC.
       Dear Speaker Boehner, Leader Pelosi, Chairman Conaway, and 
     Ranking Member Peterson: On behalf of the member companies of 
     the Edison Electric Institute (EEI), I want to express our 
     strong support for H.R. 2289, the Commodity End-User Relief 
     Act. Key provisions in the legislation provide additional 
     certainty and clarify congressional intent on a number of 
     issues of significant importance to EEI members.
       EEI is the association of U.S. investor-owned utilities, 
     international affiliates and industry associates worldwide. 
     Our members provide electricity for 220 million Americans, 
     directly employ more than a half-million workers, and operate 
     in all 50 states. With approximately $90 billion in annual 
     capital expenditures, the electric utility industry is 
     responsible for providing reliable, affordable, and 
     increasingly clean electricity that powers the economy and 
     enhances the lives of all Americans.
       EEI members are non-financial entities that participate in 
     the physical commodity market and rely on swaps and futures 
     contracts primarily to hedge and mitigate their commercial 
     risk. The goal of our member companies is to provide their 
     customers with reliable electric service at affordable and 
     stable rates, which has a direct and significant impact on 
     literally every area of the U.S. economy. Since wholesale 
     electricity and natural gas historically have been two of the 
     most volatile commodity groups, our member companies place a 
     strong emphasis on managing the price volatility inherent in 
     these wholesale commodity markets to the benefit of their 
     customers. The derivatives market has proven to be an 
     extremely effective tool in insulating our customers from 
     this risk and price volatility. In sum, our members are the 
     quintessential commercial end-users of swaps. As such, 
     regulations that make effective risk management options more 
     costly for end-users of swaps will likely result in higher 
     and more volatile energy prices for retail, commercial, and 
     industrial customers. H.R. 2289 goes a long way in providing 
     much needed regulatory relief and even greater clarity to the 
     compliance landscape facing EEI and the entire end-user 
     community going forward.
       Thank you for your leadership on these important issues. We 
     look forward to working with you to advance this legislation 
     through the House.
           Sincerely,
     Thomas R. Kuhn.
                                  ____

                                                     May 12, 2015.
     Hon. K. Michael Conaway,
     Chairman, Committee on Agriculture, House of Representatives, 
         Longworth House Office Building, Washington, DC.
       Dear Chairman Conaway: The American Gas Association 
     strongly supports the Commodity End User Relief Act, a bill 
     to reauthorize the Commodity Exchange Act (CEA) that would 
     improve Commodity Future Trading Commission (CFTC) operations 
     and provide much-needed marketplace certainty and regulatory 
     relief for natural gas utilities and the American homes and 
     businesses to which they deliver natural gas.
       The American Gas Association (AGA), founded in 1918, 
     represents more than 200 local energy companies that deliver 
     clean natural gas throughout the United States. There are 
     more than 71 million residential, commercial and industrial 
     natural gas customers in the U.S., of which 94 percent--over 
     68 million customers--receive their gas from AGA members. AGA 
     is an advocate for natural gas utility companies and their 
     customers and provides a broad range of programs and services 
     for member natural gas pipelines, marketers, gatherers, 
     international natural gas companies and industry associates. 
     Today, natural gas meets more than one-fourth of the United 
     States' energy needs.
       The Commodity End User Relief Act will help the CFTC become 
     a more responsive and well-equipped regulator. Commercial 
     market participants currently lack basic procedural 
     opportunities to hold the CFTC accountable for arbitrary and 
     capricious actions. The lack of good process is self-evident 
     in the haphazard pattern of rulemaking and non-rule 
     ``guidance'' issued by the Commissioners or staff. Just 
     yesterday, the CFTC answered a critical industry question 
     about whether ``swaps'' (financial derivatives) include non-
     financial natural gas delivery contracts through an 
     ``Interpretation'' rather than through formal regulation. 
     Even this action is five months late: The CFTC asked for 
     comments on this draft in November 2014 and closed the 
     comment period in December 2014. The goal was to provide 
     time-sensitive response to market participants. And yet, it 
     took five months to finalize.
       The Commodity End User Relief Act will help fix several 
     problems described above--changes that can neither be made by 
     the CFTC's evolving leadership nor by revisions to internal 
     rules.
       1. Direct Review in Federal Appellate Courts: The bill 
     would allow the federal appellate courts to directly review 
     CFTC rules, replacing the protracted and expensive trial 
     court process currently in effect as the default rule for 
     judicial review. This change will not increase litigation nor 
     will it disrupt the CFTC. Rather, it will incentivize the 
     CFTC to write better rules and avoid challenge altogether. 
     Also, any inevitable legal challenges will be more swiftly 
     decided by appellate courts, benefitting the regulator and 
     the regulated community. All of the key federal rulemaking 
     agencies are subject to direct appellate review -- including 
     the Securities Exchange Commission and Federal Energy 
     Regulatory Commission. There is no logical justification to 
     treat the CFTC differently.
       2. Strict Compliance with the Administrative Procedures Act 
     (APA): The CFTC's administrative process suffers from vague 
     and varying levels of compliance with federal procedural 
     laws. Strict compliance with federal laws requiring due 
     process and notice should not be contingent on how the 
     Commission leadership directs staff, shares information among 
     Commissioners, or chooses between a legal rule, non-binding 
     guidance, or interpretation for resolving a public concern. 
     This bill would eliminate subjectivity and require strict 
     compliance with the APA and Executive Orders that instruct 
     agencies to ensure public notice-and-comment on rules or 
     guidance that have legally-binding effects.
       3. Give the CFTC Comprehensive Authority to Exempt End-
     Users' Physical Contracts from ``Swaps'' and ``Options'' 
     Regulation: The CFTC undertook a tortuous four-year path of 
     issuing interim final rules, policy guidance, and no-action 
     letters, to arrive yesterday at yet another 
     ``interpretation'' regarding how much of the physical 
     marketplace will not be regulated as ``swaps''. In the 
     interim, gas utilities have seen their physical gas 
     counterparties (natural gas suppliers) exit the marketplace. 
     Those that remain, offer less flexible and more costly 
     contracting terms to avoid any confusion generated by CFTC 
     policies that suggest these physical transactions are 
     ``swaps''. In the past year alone, many AGA members' 
     counterparties have abstained from providing the physical 
     delivery flexibility that is needed to manage customer demand 
     during hard winters and cold snaps. For AGA's rate-regulated 
     utilities, cost increases for flexible gas supplies are 
     passed directly to consumers.
       Yesterday's Interpretation does help clarify the morass of 
     regulatory guidance that

[[Page H3935]]

     the CFTC has issued in prior years. However, confusion 
     remains as at least two Commissioners disagree about what the 
     CFTC has actually accomplished (see statements from CFTC 
     Chairman Massad and Commissioner Bowen). Natural gas 
     utilities cannot afford to wait any longer for policy clarity 
     because energy consumers are paying the price for the CFTC's 
     confusion. The Commodity End User Relief Act will 
     definitively clarify that non-financial energy delivery 
     agreements, that ensure physical delivery of natural gas to 
     homes and businesses, will not be treated by the CFTC as 
     speculative, financial instruments. The bill will help 
     restore liquidity to the physical energy marketplace, which 
     gas utilities rely on to mitigate commercial risk on behalf 
     of consumers.
       Congress certainly did not intend to provide the CFTC a 
     tremendous regulatory mandate without giving it the necessary 
     guidance and authority to do its job. Furthermore, Congress 
     did not intend for the CEA to constrain liquidity in the 
     physical natural gas marketplace, create business-changing 
     impacts on regulated natural gas utilities, or increase the 
     costs of reliable service for natural gas consumers. As such, 
     AGA supports the Commodity End User Relief Act because it 
     provides the CFTC the tools necessary to be a responsive 
     regulator and restores the regulatory confidence that natural 
     gas utilities rely on to procure natural gas supplies at the 
     lowest reasonable cost for the benefit of America's natural 
     gas consumers.
           Sincerely,

                                                 Dave McCurdy,

                                                President and CEO,
     American Gas Association.
                                  ____

                                                     June 8, 2015.
     Re End-User Support for Passage of Derivatives End-User 
         Clarifications in H.R. 2289, the Commodity End-User 
         Relief Act.

       To The Members of the U.S. House of Representatives: The 
     Coalition for Derivatives End-Users represents the views of 
     companies that employ derivatives primarily to manage risks 
     associated with their businesses. Hundreds of companies and 
     business associations have been active in the Coalition, 
     seeking strong, effective and fair regulation of derivatives 
     markets that brings transparency and mitigates the risk of 
     another systemic collapse while not unduly burdening American 
     businesses and harming job growth. The Coalition supports 
     H.R. 2289, the Commodity End-User Relief Act, which 
     incorporates vital legislation aimed at protecting 
     derivatives end-users.
       In particular, the Coalition strongly supports the bill's 
     inclusion of the language of H.R. 1317, the Derivatives End-
     User Clarification Act, sponsored by Representatives Moore, 
     Stivers, Fudge and Gibson. H.R. 1317 is a narrowly targeted 
     bill providing much-needed clarification that certain swap 
     transactions with centralized treasury units (``CTUs'') of 
     non-financial end-users are exempt from clearing requirements 
     and fixes a language glitch in the Dodd-Frank Wall Street 
     Reform and Consumer Protection Act (the ``Dodd-Frank Act'') 
     that denies some end-users that employ CTUs the clearing 
     exception that Congress passed specifically for them.
       A Coalition survey of chief financial officers and 
     corporate treasurers found that nearly half of the 
     respondents use CTUs to execute over-the-counter derivatives. 
     The Coalition is encouraged that the House of Representatives 
     last year passed this CTU language (H.R. 5471/S. 2976) by 
     voice vote, reflecting the fact that CTUs are a best practice 
     among corporate treasurers and their use should be 
     encouraged, not penalized.
       While the Commodity Futures Trading Commission has issued 
     no-action relief allowing some end-users to use the clearing 
     exception, the relief does not fix the problematic language 
     in the Dodd-Frank Act. This language, which also is 
     referenced in regulatory proposals on margin, places 
     corporate boards in the difficult position of approving 
     decisions not to clear trades based on a staff letter 
     indicating that the law will not be enforced against the 
     company.
       It also is important to note that international regulators 
     often look to U.S. rules--but not no-action letters--when 
     developing their regulations. Unless we fix the underlying 
     problem in the Dodd-Frank Act, our denial of clearing relief 
     to end-users with CTUs may be propagated overseas.
       Throughout the legislative and regulatory process 
     surrounding the Dodd-Frank Act, the Coalition has supported 
     efforts to increase transparency in the derivatives markets 
     and enhance financial stability for the U.S. economy through 
     thoughtful new regulation while avoiding needless costs. We 
     urge you to support the efforts to move this essential 
     clarification in H.R. 2289.
           Sincerely,
                              Coalition for Derivatives End-Users.

  Mr. PETERSON. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, I oppose this legislation because it will roll back 
important financial regulations and interfere with the CFTC's ability 
to do its work. I am very concerned that H.R. 2289 will open the door 
to the types of things that created the financial mess that we are just 
beginning to get ourselves out of.
  So let me be clear. I don't have an issue with many of the provisions 
that are relevant to end-user protections. In fact, the Dodd-Frank bill 
that I helped write states very clearly that end users were not the 
problem, and the CFTC has been very receptive to that fact and taken 
that into consideration as they have adopted rules.
  One of my biggest concerns in this bill is the new cost-benefit 
analysis. This is, in my opinion, all cost and not a lot of benefit 
unless you are one of the nine big banks who, as far as I am concerned, 
have not learned a thing from the financial crisis. This not only adds 
an unneeded layer of government bureaucracy; it opens the doors to 
lawsuits from major banks seeking to delay or completely derail CFTC 
rulemakings.
  I also have serious concerns with the trouble that will be caused by 
section 314, the cross-border section of this bill.
  Chairman Massad has been negotiating extensively and in good faith 
with our European counterparts to harmonize their rules with ours. I 
have talked to the Chairman a number of times about this, and he has 
assured me and it has been independently verified that they are 85 
percent of the way to getting a deal in this area. This provision in my 
opinion will cut the negotiators off at the knees. I am worried that 
this provision will take us back to where we were and what was 
happening prior to the financial crash. The big banks at that time that 
have offices both in London and New York were playing us against each 
other, getting the United States to water down rules by threatening to 
move their business elsewhere and vice versa, and that was verified on 
committee trips that we took over to Europe and in discussions with 
their regulators.
  The cost-benefit requirement, as I said, along with the cross-border 
rule, will cost $45 billion over 5 years, according to the CBO. And 
again, this is a cost that I believe doesn't have a whole lot of 
benefit.
  H.R. 2289 has a whole host of other problems. The bill unravels the 
transparency provided by Dodd-Frank, slows down CFTC staff ability to 
respond to industry concerns, mucks up the Commission's ability to 
issue guidance if rules need updating or clarification, and relitigates 
a disagreement between former commissioners that has no place in this 
bill.
  This is a bad bill that can't be fixed. It should be defeated by the 
House. I urge my colleagues to oppose H.R. 2289.
  Mr. Chairman, I have a statement from the administration where they 
have indicated their displeasure with this bill and the fact that they 
are going to recommend vetoing it.
  I reserve the balance of my time.

                   Statement of Administration Policy


                H.R. 2289--Commodity End-User Relief Act

                   (Rep. Conaway, R-TX, June 2, 2015)

       The Administration is firmly committed to strengthening the 
     Nation's financial system through the implementation of key 
     reforms to safeguard derivatives markets and ensure a 
     stronger and fairer financial system for investors and 
     consumers. The full benefit to the Nation's citizens and the 
     economy cannot be realized unless the entities charged with 
     establishing and enforcing the rules of the road have the 
     resources to do so.
       The Administration strongly opposes the passage of H.R. 
     2289 because it undermines the efficient functioning of the 
     Commodity Futures Trading Commission (CFTC) by imposing a 
     number of organizational and procedural changes and would 
     undercut efforts taken by the CFTC over the last year to 
     address end-user concerns. H.R. 2289 also offers no solution 
     to address the persistent inadequacy of the agency's finding. 
     The CFTC is one of only two Federal financial regulators 
     funded through annual discretionary appropriations, and the 
     funding the Congress has provided for it over the past five 
     years has failed to keep pace with the increasing complexity 
     of the Nation's financial markets. The changes proposed in 
     H.R. 2289 would hinder the ability of the CFTC to operate 
     effectively, thereby threatening the financial security of 
     the middle class by encouraging the same kind of risky, 
     irresponsible behavior that led to the great recession.
       Prior to enactment of the Dodd-Frank Wall Street Reform and 
     Consumer Protection Act, the derivatives markets were largely 
     unregulated. Losses connected to derivatives rippled through 
     that hidden network, playing a central role in the financial 
     crisis. Wall Street Reform resulted in significant expansion 
     of the CFTC's responsibilities, establishing a framework for 
     standardized over-the-counter derivatives to be traded on 
     regulated platforms and centrally cleared, and for data to be 
     reported to repositories to increase transparency and price 
     discovery. The changes proposed in H.R. 2289 would hinder the 
     CFTC's progress in successfully implementing these critical 
     responsibilities

[[Page H3936]]

     and would unnecessarily disrupt the effective management and 
     operation of the agency without providing the more robust and 
     reliable funding that the agency needs.
       In order to respond quickly to market events and market 
     participants, the CFTC needs funding commensurate with its 
     evolving oversight framework. The Administration looks 
     forward to working with the Congress to authorize fee funding 
     for the CFTC as proposed in the FY 2016 Budget request, a 
     shift that would directly reduce the deficit. User fees were 
     first proposed in the President's Budget by the Reagan 
     Administration more than 30 years ago and have been supported 
     by every Democratic and Republican Administration since that 
     time. Fee funding would shift CFTC costs from the general 
     taxpayer to the primary beneficiaries of the CFTC's oversight 
     in a manner that maintains the efficiency, competitiveness, 
     and financial integrity of the Nation's futures, options, and 
     swaps markets, and supports market access for smaller market 
     participants hedging or mitigating commercial or agricultural 
     risk.
       If the President were presented with H.R. 2289, his senior 
     advisors would recommend that he veto the bill.

  Mr. CONAWAY. Mr. Chairman, I yield myself 1 minute.
  I remind my colleagues that the cost-benefit analysis provisions that 
are in this bill are remarkably similar to the bill last year, which 
garnered overwhelming support, including support out of the Agriculture 
Committee itself. Cost-benefit analysis is an important tool for any 
regulatory agency to have at its disposal to be able to use. This 
agency did not use the cost-benefit analysis rule that was in place 
because it was so weak and toothless that they just basically gave lip 
service to it, according to their own IG.
  The cost-benefit analysis in this bill mirrors in most instances 
President Obama's executive order from January 2011 that required all 
nonindependent agencies to conduct cost-benefit analysis in a 
transparent manner to get to better rules in that regard.
  Mr. Chairman, I yield 2 minutes to the gentleman from California (Mr. 
LaMalfa).
  Mr. LaMALFA. Mr. Chairman, I thank my colleague, Chairman Conaway, 
for allowing me to speak today.
  I rise today in support of H.R. 2289, the Commodity End-User Relief 
Act.
  End users, such as our ranchers, farmers, manufacturers, and public 
utilities, face risks that they have no control over on a daily basis. 
For years now, they have used tools available to manage risks like 
volatile markets or changing interest rates, such as a farmer who uses 
futures contracts to establish a guaranteed price to offset the risk of 
a decrease in crop value before harvest or a grain company using 
derivatives to hedge commercial risks associated with buying wheat from 
a farmer. This is part of day-to-day operations that allow them to do 
their jobs and provide products in an affordable and accessible manner. 
However, the implementation of Dodd-Frank placed a number of costly 
burdens on our end users that limit their ability to use these tools.
  It is important that we do all we can to erase this unintended and 
excessive red tape. One measure included in this bill today will do 
just that, which is my Public Power Risk Management Act, which passed 
with the full support of the House last year. Again, it is included in 
the bill today.
  There are over 2,000 publicly owned utilities across the United 
States, including one in my district in the city of Redding, that have 
used swaps to manage their risk for years. However, Dodd-Frank put them 
at a major disadvantage to private utilities by limiting their ability 
to negotiate with swap dealers.
  This bill would level the playing field permanently and ensure the 47 
million Americans who rely on public power for electricity will not see 
their rates increase due to unnecessary regulatory policies. Our 
farmers, ranchers, and small businesses who pose no systemic risk to 
our financial system and certainly did not cause the financial crisis 
should not have to face costly bureaucratic overreach from policies 
originally intended to protect them in the first place.
  I thank Chairman Conaway for his leadership on this bill. Let's help 
our agriculture community by passing this commonsense piece of 
legislation.
  Mr. PETERSON. Mr. Chairman, I yield 5 minutes to the gentleman from 
Georgia (Mr. David Scott).
  Mr. DAVID SCOTT of Georgia. Mr. Chairman, as the ranking member of 
the subcommittee of jurisdiction over this bill, I would like to 
address the three major areas of contention here. We have put a lot of 
time, a lot of work in this over the years.
  First, we want to deal with, as Mr. Peterson brought up, some of his 
concerns and share how we are responding to that. I am a sponsor of 
this bill. We have worked on it. It is a similar bill to what we had 
before. The first area I want to deal with is cross border, and then I 
will go to cost-benefit analysis, and then end users.
  What is important for the House and the people of this Nation to 
understand is that we operate in a global market, and our United States 
financial system is best served with deep financial liquidity. But if 
global regulations are not well harmonized, are not well coordinated, 
or we have good cross-border access, then these global markets will 
fragment into separate regulatory jurisdictions and become far less 
liquid, to the detriment of the United States financial system.
  We know now that the derivatives swaps market is about an $815 
trillion piece of the economy, and we must not--and I am sure we will 
not--put our financial system of the United States at a disadvantage on 
the world stage. By passing this bill, we will not do that. If we delay 
it again, we will be putting our financial system at a disadvantage on 
the stage.
  Let me deal with the first concern that has been brought up. The 
claim that our legislation subverts the CFTC's authority to regulate 
foreign derivatives, this is flat-out false because at no point is an 
entity of the United States person able to escape U.S. rules that the 
CFTC, itself, has deemed equivalent. Let me read section 314 that has 
been referred to. In section (b)(2)(A) of 314, it clearly states that 
only the CFTC can make sure that foreign entities, regulations are 
comparable to the United States. At no point do we yield the power of 
the CFTC to any foreign entity unless the CFTC makes sure that that 
foreign entity has equivalent rules to our Nation.
  Now, let me go to the claim that we are making it harder to challenge 
the cross border in 314. We are doing no such thing. It is important 
that if there is a country, if there is anybody in the world that wants 
to challenge, that wants to have a way of challenging the ruling of the 
CFTC, it is in our best interest to make sure that they go through a 
petition process, and the petition process is there to give the CFTC 
ample time--180 days--to review the challenge and be able to respond 
appropriately. And after the Commission makes its decision, we request 
them to report to the Congress. Now, how is that making it harder? As a 
matter of fact, it is making it easier and more transparent.
  Now, the concern about the bill's attempts to rein in the CFTC's 
capacity to impose certain rules on Wall Street trades, this concern 
refers to what we refer to as U.S. persons and location tests. At no 
time, Mr. Chairman, does our bill state that U.S. persons are not 
subject to U.S. rules. Individuals and transactions are still allowed 
to be carved in definitions and, thus, subject to the same rules, the 
same tests, and regulations. And our own Commissioner Bowen, who is a 
Democrat serving on the CFTC, stated before my subcommittee, ``risk 
should be about risk and not about location.'' Tests should be about 
where the risk is, instead of where someone wrote something on a piece 
of paper.
  Now let me deal with the business that our bill creates a presumption 
that each of the eight foreign jurisdictions with the largest swaps 
markets automatically have swap rules that are considered to be 
comparable to and as comprehensive as the United States requirements. 
Yes, they are correct, but that presumption comes only after the CFTC 
makes sure that those eight foreign markets have comparable rules to 
us. Here is what it says in section 1: ``The Commission shall 
determine, by rule or by order, whether the swaps regulatory 
requirements of foreign jurisdictions are comparable to and as 
comprehensive as United States requirements.''
  I rest my case.
  But now, Mr. Chairman, I want to turn to what is the most important 
cross-border issue, this business with the European Union. The European 
Union is discriminating against the United States.

[[Page H3937]]

  The CHAIR. The time of the gentleman has expired.
  Mr. PETERSON. I yield the gentleman an additional 2 minutes.
  Mr. DAVID SCOTT of Georgia. The European Union is denying our country 
status in terms of equivalency of rules. Historically, we have always 
had that. But what is very interesting is they have already given this 
standing to jurisdictions that have the same regime as ours.
  Why is that?
  Something very strange is going on in the European Union. They are 
discriminating against our financial system when they will go ahead and 
approve other regimes that are equal to ours but not ours.
  Why is this a terrible thing?
  Because, Mr. Chairman, our clearinghouses can't do business in Europe 
if we are not qualified, if we do not have that equivalency. So by 
taking that equivalency away, they are keeping our clearinghouses and 
our businesses from being able to be used there because the other 
market participants will go elsewhere rather than come and do business 
with us.
  There are millions of dollars at stake here, so we have got to 
certainly deal with that.

                              {time}  1545

  Mr. Chairman, I do want to say something about this cost-benefit 
analysis because this is not all truth is being told here. This cost-
benefit analysis is being put on because it has the way of being able 
to make us more efficient.
  Mr. Peterson brought up the point of litigation; that is a legitimate 
concern, but here is what we did: we accepted and approved an amendment 
by Democratic Representative DelBene and some Republicans to make sure 
that the CFTC's back door is protected. The amendment clearly states 
that the court must uphold the decision of the CFTC unless there has 
been an abuse of discretion.
  In a court of law, abuse is a high threshold to attain.
  The CHAIR. The time of the gentleman has again expired.
  Mr. CONAWAY. Mr. Chairman, I yield the gentleman an additional 3 
minutes.
  Mr. DAVID SCOTT of Georgia. This is important, Mr. Chairman. I have 
got my name on this bill. I have put the work and time into this bill. 
It is important that I give the reasons why I am supporting this bill.
  Now, this amendment says, as I said before, that a court must uphold 
the decision of the CFTC unless there has been an abuse of discretion. 
In a court of law, abuse is a high threshold to attain. If a firm wants 
to challenge the CFTC, they know right off that they better have beyond 
compelling facts to prove it.
  The CFTC's abuse of power is a discretion. We are letting anyone know 
who would dare to pursue litigation against the CFTC that they better 
think twice.
  Now, about the funding, Mr. Chairman, perhaps this cost analysis can 
help us build a case to take to the Appropriations Committee to get 
more money. The President has appropriately asked for more money for 
the CFTC.
  Year after year after year, I have been asking for more money, but I 
do believe that if we put the cost-benefit analysis in there--and, 
again, Mr. Chairman, we have a section in there where this cost-benefit 
analysis would be more succinct if it is done with an economist. Cost 
benefit is an economic issue, a financial issue; an economist should be 
doing that, not a lawyer.
  I believe, Mr. Chairman, that if we pass this bill, we will be taking 
a great step forward to be able to put our CFTC on the world stage to 
be able to negotiate the rules and regulations for the United States of 
America from a position of strength, not weakness. This is a very 
delicate time for us, and we are losing respect.
  Look at the EU; look at how other nations are treating us. Could it 
be, Mr. Chairman, that we are losing this respect largely because in a 
way by continuing year after year--this is the third year of not 
reauthorizing CFTC--by us doing that, we are not respecting ourselves, 
Mr. Chairman?
  Now, finally, Mr. Chairman, I do want to say this one thing about the 
end users. This is a very important piece of this bill. They can't wait 
another 3 years. They need this relief right away, and we need to do 
and be able to get them out of an identification of being a financial 
institution.
  Let me tell you why that is. End users are businesses who use a 
single entity that allows their company to centralize functions such as 
credit and risk; however, when the banking laws come in on finance, 
they put them in that category.
  The CHAIR. The time of the gentleman has again expired.
  Mr. CONAWAY. Mr. Chairman, I yield myself such time as I may consume.
  I enter into the Record a statement from the Chamber of Commerce and 
would like to read a couple of paragraphs from that.
  ``This bill also takes a practical approach to address one of the 
most problematic areas of regulatory implementation in the global 
derivatives market: cross-border harmonization. Many end users operate 
internationally and are struggling to meet the changing demands of 
multiple, conflicting, and sometimes duplicative regulatory regimes. 
H.R. 2289 would require the CFTC to move quickly to make substituted 
compliance determinations that would significantly reduce needless 
complexity and uncertainty for U.S. businesses, without reducing market 
transparency.
  The Chamber also supports provisions in this bill intended to promote 
transparency and accountability in the CFTC's rulemaking process, 
including a requirement to conduct a cost-benefit analysis for new 
rules, and the establishment of an Office of the Chief Economist to 
support such analysis. Cost-benefit analysis has been a fundamental 
tool of effective government for more than three decades, and these 
requirements would help protect Main Street businesses, investors, and 
consumers from some of the unintended consequences of regulation.''

         Chamber of Commerce of the United States of America,
                                     Washington, DC, June 8, 2015.
       To The Members of The U.S. House of Representatives: The 
     U.S. Chamber of Commerce, the world's largest business 
     federation representing the interests of more than three 
     million businesses of all sizes, sectors, and regions, as 
     well as state and local chambers and industry associations, 
     and dedicated to promoting, protecting, and defending 
     America's free enterprise system, strongly supports H.R. 
     2289, the ``Commodity End-User Relief Act,'' a bipartisan 
     bill that would reauthorize the Commodity Futures Trading 
     Commission (CFTC). This bill also includes a number of 
     important reforms designed to promote smart regulation, 
     enhance accountability at the CFTC, and protect Main Street 
     businesses from onerous and unintended derivatives 
     regulation.
       The Chamber is particularly supportive of provisions in 
     H.R. 2289 that would help preserve the ability of commercial 
     end users to manage their financial risks by using 
     derivatives. This bill includes a critical fix that would 
     ensure non-financial companies would be protected from 
     burdensome and unnecessary regulations, consistent with 
     Congress's clear intent under the Dodd-Frank Act almost five 
     years ago. Non-financial companies that use centralized 
     treasury units to manage their enterprise-wide risk should 
     not be penalized for adopting this risk reducing structure, 
     and H.R. 2289 acknowledges and would address this issue.
       This bill also takes a practical approach to address one of 
     the most problematic areas of regulatory implementation in 
     the global derivatives market: cross-border harmonization. 
     Many end users operate internationally and are struggling to 
     meet the changing demands of multiple, conflicting, and 
     sometimes duplicative regulatory regimes. H.R. 2289 would 
     require the CFTC to move quickly to make substituted 
     compliance determinations that would significantly reduce 
     needless complexity and uncertainty for U.S. businesses, 
     without reducing market transparency.
       The Chamber also supports provisions in this bill intended 
     to promote transparency and accountability in the CFTC's 
     rulemaking process, including a requirement to conduct a 
     cost-benefit analysis for new rules, and the establishment of 
     an Office of the Chief Economist to support such analysis. 
     Cost-benefit analysis has been a fundamental tool of 
     effective government for more than three decades, and these 
     requirements would help protect Main Street businesses, 
     investors, and consumers from some of the unintended 
     consequences of regulation.
       Additionally, H.R. 2289 contains a number of sensible 
     provisions that would promote principles of good governance, 
     including providing market participants with better 
     Commission oversight regarding ``no action'' letters issued 
     by the CFTC staff, and a requirement that the CFTC develop 
     internal risk control mechanisms in order to protect 
     sensitive market data. These are common sense measures that 
     would help make the CFTC a more effective and accountable 
     regulator, and the Chamber appreciates their inclusion in 
     this bill.

[[Page H3938]]

       The Chamber strongly urges you to support H.R. 2289 and may 
     consider including votes on, or in relation to, this bill in 
     our annual How They Voted scorecard.
           Sincerely,
                                                  R. Bruce Josten.

  Mr. CONAWAY. Mr. Chairman, I yield 2 minutes to the gentleman from 
Illinois (Mr. Rodney Davis).
  Mr. RODNEY DAVIS of Illinois. Mr. Chairman, I thank Chairman Conaway 
for his leadership on this issue.
  I rise today in support of H.R. 2289, the Commodity End-User Relief 
Act.
  The use of derivatives is an important tool that farmers, 
agribusinesses, and manufacturers in my district use to hedge the risks 
that come with doing their business. Because of the risk of price 
movements and commodities, such as corn and soybeans, these end users 
use derivatives to ensure they and their customers aren't negatively 
impacted by sudden changes in prices.
  The CFTC has an important role in overseeing these end users, who 
responsibly use derivatives to hedge. Unfortunately, following the 
passage of Dodd-Frank in 2010, many of these responsible hedgers, 
including farmers right in my congressional district in central and 
southwestern Illinois, have been impacted by these new regulations that 
often treat them as speculators. Mr. Chairman, farmers aren't 
speculators. Farmers didn't cause the global financial crisis, and 
farmers shouldn't be treated like they did.
  This bill includes language that I authored to address regulations 
that could directly increase transportation prices for consumers back 
home. Additionally, the final bill includes an amendment I offered at 
committee that removes unnecessary and duplicative regulations created 
by the CFTC that require certain registered investment companies, such 
as mutual funds, to be regulated by both the SEC and the CFTC.
  This language, which was adopted unanimously in the committee, 
removes this duplicative burden in a manner that would not undermine 
investor protection because these companies would still be regulated by 
the SEC.
  This bill is an important and necessary opportunity for Congress to 
use the reauthorization process as a means to improve the regulatory 
environment and the impact it has on responsible market participants, 
as well as exchanges like the CME Group, which is headquartered in my 
home State of Illinois.
  Mr. Chairman, I am proud of the committee's work on this bill. I want 
to express my appreciation for the work of Chairman Conaway and what he 
has done to get us here, as well as Chairman Austin Scott and Ranking 
Member David Scott of the Commodity Exchanges, Energy, and Credit 
Subcommittee.
  This is an important bill, and I urge my colleagues to vote ``yes.''
  Mr. PETERSON. Mr. Chairman, I yield 2 minutes to the gentlewoman from 
Connecticut (Ms. DeLauro).
  Ms. DeLAURO. Mr. Chairman, I rise in opposition to this bill; yet 
again, this bill deliberately sets out to weaken one of our most 
important financial regulators, the Commodity Futures Trading 
Commission.
  It fails to address the CFTC's biggest challenge, its flawed funding 
mechanism. It prioritizes Wall Street special interests over the 
economic security of our Nation's families.
  This bill is a recipe for another financial disaster like the one 
that led to the Great Recession and cost nearly 9 million American 
jobs.
  Americans are tired of casino banking and speculation. They want big 
banks and oil speculators held accountable. They want to increase the 
transparency of our markets, prevent market failures, and avoid future 
bailouts. That is the CFTC's job.
  This bill takes us in the wrong direction. Instead of helping the 
CFTC fulfill its mandate in an increasingly complex global financial 
sector, the bill throws up roadblock after roadblock.
  The CFTC is one of only two Federal financial regulators completely 
reliant upon the general fund. The Securities and Exchange Commission, 
the Federal Deposit Insurance Corporation, Federal Housing Finance 
Agency, and a host of others all collect user fees, so should the CFTC.
  This is not a partisan proposition. The first President to propose 
user-fee funding for the CFTC was Ronald Reagan. Every President since 
then, Republican or Democrat, has done the same.
  User fees would directly reduce the deficit while securing CFTC's 
funding for the long term. That is even more important now that the 
agency's responsibilities have been expanded in response to the bad 
behavior that created the financial crisis.
  I submitted an amendment that would have dealt with this problem, but 
the majority refused to allow it to be heard.
  We must avoid at all costs a return to the conditions that allowed 
the Great Recession to happen, and I urge my colleagues to vote ``no'' 
on this bill.
  Mr. CONAWAY. Mr. Chairman, I yield myself such time as I may consume.
  I would like to remind or at least acknowledge to the committee that 
CFTC's funding is up 49 percent since 2010 when the Dodd-Frank bill was 
presented, 49 percent increase in funding.
  Mr. Chairman, I yield 3 minutes to the gentleman from Virginia (Mr. 
Goodlatte), the former chairman of the House Agriculture Committee and 
the current chairman of the House Judiciary Committee.
  Mr. GOODLATTE. Mr. Chairman, I thank Chairman Conaway for yielding me 
this time and thank him for his leadership on this important 
legislation.
  I rise today to support H.R. 2289, the Commodity End-User Relief Act, 
a bill to reauthorize the Commodity Futures Trading Commission.
  As we have heard today, the CFTC's mission is to foster a 
transparent, balanced, and functional marketplace. However, uncertainty 
and delays in the marketplace mean higher prices for families and small 
businesses across America. As the committee charged with ensuring the 
oversight of our commodity markets, it is our duty to ensure that those 
markets are functioning properly.
  For the last several years, the Agriculture Committee, through the 
strong leadership of former Chairman Frank Lucas and current Chairman 
Mike Conaway, has done an excellent job of educating Congress and the 
American public about the importance of our commodity markets and the 
need for a strong reauthorization of the CFTC.
  I was also pleased to work closely with the Subcommittee on Commodity 
Exchanges, Energy, and Credit's Chairman Austin Scott on this 
legislation. He and his staff have been leading an open and transparent 
process that involved all stakeholder groups and took input from across 
the country.
  In an effort to help the CFTC achieve its mission, I worked with the 
committee and the CFTC to craft an amendment which was adopted in 
committee to address the issue of manufacturers being able to take 
timely delivery of aluminum for production at a fair price. These 
manufacturers support a broad set of industries from common drink cans 
to airplane parts.
  The persistence of long, disruptive market queues for the delivery of 
aluminum at warehouses in the United States, licensed overseas, has 
attracted considerable concern for end users and the consumers of 
products which many Americans utilize on a daily basis.
  My provision will prevent the unreasonable delay of delivery of such 
commodities stored in warehouses, which can cost end-user companies 
increased storage fees, potentially higher prices due to supply and 
demand implications from improper exchange contract design, and result 
in uneconomic commodity prices.
  Specifically, the amendment directs the CFTC to report to Congress 
regarding the ongoing review of foreign board of trade applications of 
metal exchanges and the status of its negotiations with foreign 
regulators regarding aluminum warehousing.
  Such status reports shall inform the CFTC in determining foreign 
boards of trade status for metals exchange applications, and such 
determination shall be made no later than September 30, 2016.
  In closing, I would like to again applaud Chairman Conaway and 
subcommittee Chairman Scott for their hard work to get this bill to the 
floor today. This bipartisan bill takes steps to improve consumer 
protections for

[[Page H3939]]

farmers and ranchers, as well as implementing reforms, to ensure a more 
balanced regulatory approach that will help our markets thrive.
  Mr. PETERSON. Mr. Chairman, I yield myself such time as I may 
consume.
  With all due respect to my colleagues who have been claiming that the 
bill does this and does that, there are a lot of groups that have a 
different view.
  There are over two-hundred-and-some groups that disagree with how the 
impacts of these bills were going to affect the markets, including the 
chairman of the Commodity Futures Trading Commission, who are the 
people who actually have to administer this law.

                              {time}  1600

  And we have a letter from the chairman that has a completely 
different point of view than Mr. Scott has and others in terms of how 
this will impact the situation. According to the chairman, you know, he 
is opposed to this. He says: ``I believe that many of the provisions in 
this bill before the committee are either unnecessary or impose 
requirements on the Commission that would make it harder to fulfill 
their mission. The bill limits the agency's ability to respond quickly 
to both market events and market participants. It will make it more 
difficult for us to make adjustments to rules and achieve greater 
global harmonization of swaps rules. With respect to the provisions 
pertaining to commercial end users' concerns, the agency has sufficient 
authority to address the goals outlined in the legislation and in most 
cases has already done so.''
  He also states: ``I have concerns that title II of the bill includes 
language that would complicate the agency's longstanding statutory 
requirements to consider costs and benefits in its rulemaking, imposing 
additional, unworkable standards and creating confusion that is likely 
to lead to more lawsuits instead of policy grounded in data-driven 
analysis. Had this language been in effect, it would have been harder 
for the agency to positively respond over the past 10 months to market 
participants' concerns. Title II also imposes procedural requirements 
on the agency that, to my knowledge, are not followed by any other 
independent agency. These changes would make it difficult to manage the 
agency and to ensure accountability and could weaken the Commission for 
administrations to come.''
  So there is a disagreement of opinion about how this bill will 
actually impact the marketplace and how it will actually work. And if, 
as was claimed, it wasn't going to have any effect, I would be here 
supporting it.
  In my opinion, this is going to have significant impacts on the way 
the Commission does its work, and I think it is going to do more harm 
than good.
  I reserve the balance of my time.
  Mr. CONAWAY. Mr. Chairman, may I inquire as to how much time is left 
on both sides?
  The CHAIR. The gentleman from Texas has 13 minutes remaining. The 
gentleman from Minnesota has 15 minutes remaining.
  Mr. CONAWAY. I reserve the balance of my time.
  Mr. PETERSON. Apparently, I have a speaker coming, but she is not 
here yet, so we could wrap up, I guess.
  Mr. CONAWAY. I am prepared to close if you are, and I reserve the 
balance of my time.
  Mr. PETERSON. Mr. Chair, I think I made clear my position. I was 
hoping that we could work out a bill here that could have support 
across the board, but I just think that there are areas we have gone 
into with this bill that are going to cause more harm than good, and I 
think it is not a good bill. It is not the kind of bill that we need to 
give the Commission the reauthorization that they need to do their job, 
so I ask my colleagues to oppose the bill.
  I yield back the balance of my time.
  Mr. CONAWAY. Mr. Chairman, I yield myself the balance of the time.
  It should come as no surprise that those who are being regulated have 
a difference of opinion with the folks proposing regulations. In this 
instance, the roles are actually reversed.
  Tim Massad is a good guy, a good friend of mine, and an individual I 
look forward to working with. He doesn't want to change the deal he has 
got.
  Well, if you look back at all the testimony that has been delivered 
throughout all of our hearings, most of the folks on the regulated 
side, the end users, the banks, the brokers, the SEFs, everybody else, 
they didn't like what the CFTC was doing to them. So the CFTC was able 
to power through the objections, and I would like for us to do the same 
thing, because what we have asked the CFTC to do is rational, 
straightforward stuff with respect to the changes at the operations of 
the Committee itself.
  Over the past 4 years, the Committee on Agriculture has heard dozens 
of witnesses testify about the upheaval end users have been facing 
while trying to use derivatives markets in the wake of the postcrisis 
financial reforms. While this Congress took affirmative steps in Dodd-
Frank to protect end users from harm, today it is clear there is still 
work to be done.
  It isn't enough to simply raise these issues and hope that the CFTC 
will take care of them for us. For one, sometimes they cannot. There 
are numerous small oversights in the statute that have huge 
implications for end users that we correct in this legislation.
  The CEA prevents many end users from claiming their exemption because 
they conduct their hedging activity out of an affiliate specifically 
created to manage risks throughout the entire corporate enterprise. The 
Commission can't fix this req.
  The CEA requires foreign regulators to indemnify the CFTC, even 
though that is a legal concept that does not exist in many foreign 
legal jurisdictions. The Commission can't fix it.
  Currently, the CEA defines some utility companies as financial 
entities, stripping them of their status as end users. The Commission 
can't fix that.
  The core principles of SEFs were lifted almost word for word from the 
core principles for future exchanges, even though SEFs and future 
exchanges operate completely differently and SEFs cannot perform many 
of the functions of a futures exchange. The Commission can't fix this.
  Certainly, the Commission can and has tried to paper over these 
problems by issuing staff letters explaining how it would deal with 
incongruities of the law, but this isn't good enough. We know the 
problems, and we should fix them.
  Sometimes, though, the problem isn't the statute. There are a number 
of end users that we have heard testimony about which the CFTC will not 
fix because the Commission simply disagrees with Congress about how to 
apply the law. We know these problems, too.
  The Commission has promulgated a rule that reduces the transaction 
threshold, which triggers the requirement to register as a swap dealer 
from $8 billion to $3 billion, a 60 percent decline, while they are 
still studying the matter. We require that the CFTC complete the study 
and have a public vote on the matter before that automatic decrease 
occurs.
  The Commission has proposed a new and significantly narrower method 
of granting bona fide hedge exemptions, upending longstanding hedging 
conventions for market participants. This proposal is also dramatically 
more labor intensive for the Commission to implement than the current 
process. We should insist that historic hedging practices be protected.
  The Commission has dramatically expanded the recordkeeping 
requirements, requiring businesses to trade only for themselves and 
have no fiduciary obligations to customers to retain any record that 
would lead to a trade. This requirement demands that end users retain 
emails, texts, phone messages, and other records in which a potential 
trade or hedge was simply contemplated or discussed. We should clearly 
spell out that end users need only retain written records for actual 
transactions.
  The challenges facing businesses that hedge their risks in derivative 
markets are real, and we have an opportunity today to fix some of those 
problems. Every dollar that a business can save by better managing 
risks is a dollar available to grow its business, to pay higher wages, 
to protect investors, or to lower the costs to consumers.
  Over the past week, over 40 organizations representing thousands of 
American businesses have voiced their support for the important reforms 
of the Commodity End-User Relief Act. Businesses from agriculture 
producers, to

[[Page H3940]]

major manufacturers, to public utilities need every tool available to 
manage their businesses and reduce the uncertainties they face each and 
every day.
  I urge my colleagues to support the Commodity End-User Relief Act to 
protect these companies and to ensure that they have the tools they 
need to compete in a global economy. I urge my colleagues to support 
H.R. 2289.
  I yield back the balance of my time.
  Ms. MAXINE WATERS of California. Mr. Chair, I rise today in strong 
opposition to H.R. 2289. The bill would obstruct our cop on the Wall 
Street beat, the Commodity Futures Trading Commission, from doing its 
job. The CFTC is charged with fostering open, transparent, competitive, 
and financially sound markets, mitigates systemic risk, and protects 
market participants, consumers, and the public from fraud, 
manipulation, and abusive practices related to derivatives. In sum, the 
CFTC protects farmers, manufacturers, municipalities, pension funds and 
retirees but would be thwarted from doing so if H.R. 2289 is enacted.
  In the wake of the worst financial crisis since the Great Depression, 
Congress passed Wall Street Reform--and gave our derivatives regulator 
the authority necessary to oversee previously unregulated transactions 
in which parties agree to exchange--or ``swap''--the risks of one 
financial instrument with another. The most notorious of these are 
credit-default swaps, made famous by AIG and which fueled the 2008 
crisis, bankrupted millions of homeowners and cost taxpayers trillions 
of dollars.
  Nevertheless, under the guise of reauthorizing the CFTC, Republicans 
are proposing a bill that undermines its regulatory authority, imposes 
new procedural requirements on an overburdened and underfunded agency, 
and ultimately hamstrings the Commission's ability to protect the 
American people.
  This bill imposes heavy administrative hurdles and new litigation 
risks on the CFTC by requiring the agency to conduct a cost-benefit 
analysis slanted towards industry--a tactic that has been pushed in the 
past by opponents of financial reform to prevent, delay or weaken any 
rules implementing the Dodd-Frank Act.
  The bill also makes it much more difficult for the CFTC to regulate 
and oversee derivatives transactions involving the foreign operations 
of megabanks like Citigroup, JP Morgan, and Bank of America. Earlier 
this Congress, Republicans overreached when they tried to pass a 
provision weakening the Volcker Rule's ban on banks taking bets with 
taxpayer dollars. H.R. 2289 is cut from the same cloth--instead 
allowing these same institutions to avoid U.S. law by setting up shop 
in a foreign jurisdiction, even though the risk may still be borne by 
U.S. taxpayers. There is even a provision in this bill that absurdly 
directs the CFTC to ignore the physical location of a bank's swap 
trader when determining whether the derivative was conducted inside the 
United States for purposes of applying U.S. law.
  And all of this is done without providing one red cent to pay for 
these new burdens. CBO estimates that this bill costs at least $45 
million, but the Republicans wouldn't even let the House consider an 
amendment to pay for it, offered by Representative DeLauro. The result 
is that H.R. 2289 will deplete the CFTC's modest resources currently 
spent enforcing against fraud.
  But don't take my word for it. The Commission's own Chairman says the 
bill makes it harder for the CFTC to fulfill its mission and creates 
``unintended loopholes and uncertainties.'' The White House says the 
bill ``[threatens] the financial security of the middle class.'' And 
public interest groups, such as the Consumer Federation of America, and 
some industry groups, have weighed in as well, voicing their strong 
opposition to the bill.
  While not necessarily surprising, Republicans on the Agricultural 
Committee refused to work with Ranking Member Peterson to improve this 
bill--despite his deep commitment to making the Commission work better 
for farmers, ranchers and manufacturers. Even though several of the 
megabanks that directly benefit from H.R. 2289 pled guilty to 
manipulating our foreign exchange markets, Republicans also rejected my 
amendment, which sought to ensure that these banks' admissions of 
violating our laws have real collateral consequences and are not merely 
symbolic.
  Ultimately, this legislation is part of an ongoing, multifaceted 
Republican effort to undercut financial reform laws and regulations 
that protect consumers, investors and the economy. That's why it should 
come as no surprise that Koch Industries, for instance, spent $2.8 
million lobbying to ensure the passage of this bill alone. The playbook 
is well-known: create huge loopholes and carve-outs for special 
interests, while simultaneously underfunding the cop with the authority 
to ensure compliance with the law.
  I urge my colleagues to join me in voting ``No'' on this bill.
  Mr. VAN HOLLEN. Mr. Chair, just yesterday, I signed a letter with 
five other Ranking Members on this side of the aisle in opposition to 
this poorly conceived Commodity Futures Trading Commission (CFTC) 
Reauthorization bill--which is also opposed by the Obama 
Administration, CFTC Chairman Massad, and a whole host of consumer 
groups.
  For those who aren't familiar with it, the Commodity Futures Trading 
Commission (CFTC) has a very important job: it regulates the futures 
and options markets in the agricultural sector, including commodity-
related derivatives. While there's no question that the appropriate use 
of these financial instruments can help farmers and commercial end 
users hedge their commercial risk, recent history clearly demonstrates 
that the unregulated abuse of these kinds of products can distort 
markets, hurt consumers and put our entire economy at risk. The CFTC's 
authority was allowed to expire in 2013, so its reauthorization is long 
overdue. Having said that, today's legislation has multiple major 
defects. I will briefly describe three.
  First, Title II of H.R. 2289 imposes new bureaucratic requirements on 
an agency whose activities are already governed by the Commodity 
Exchange Act, the Paperwork Reduction Act, the Congressional Review 
Act, and the Regulatory Flexibility Act. With all due respect, the 
bureaucracy does not need more bureaucracy. In this case, it simply 
needs to do its job policing our financial markets. If enacted into 
law, Title II of this bill would undermine the CFTC's ability to do its 
job and subject the commission to unnecessary and costly litigation 
risk.
  Second, Title III of H.R. 2289 requires a complex new rulemaking for 
our international derivatives markets. While I support the goal of 
harmonizing global rules in this area, this provision of the bill 
interferes with the CFTC's ongoing negotiations to achieve that 
objective and instead substitutes and attempts to predetermine the 
majority's preferred outcome for those negotiations. In my judgment, 
the CFTC should be allowed to complete its negotiations unfettered by 
the dictates of this legislation.
  Finally, the non-partisan Congressional Budget Office estimates that 
all of the additional requirements placed on the CFTC by this 
legislation will require 30 new employees at a cost of $45 million over 
the next five years--a cost this bill does not even attempt to pay for. 
Moreover, an amendment to permit the CFTC to collect user fees to close 
that gap and help pay for the CFTC's operations was not even afforded 
the opportunity for an up or down vote on the floor of the House today.
  Mr. Chair, the reauthorization of the CFTC is an important subject, 
worthy of a far more thoughtful bill than we are being asked to 
consider today. I strongly urge a no vote, and I yield back the balance 
of my time.
  The CHAIR. All time for general debate has expired.
  Pursuant to the rule, the bill shall be considered for amendment 
under the 5-minute rule.
  In lieu of the amendment in the nature of a substitute recommended by 
the Committee on Agriculture, printed in the bill, it shall be in order 
to consider as an original bill for the purpose of amendment under the 
5-minute rule an amendment in the nature of a substitute consisting of 
the text of Rules Committee Print 114-18. That amendment in the nature 
of a substitute shall be considered as read.
  The text of the amendment in the nature of a substitute is as 
follows:

                               H.R. 2289

       Be it enacted by the Senate and the House of 
     Representatives of the United States of America in Congress 
     assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Commodity End-User Relief 
     Act''.

     SEC. 2. TABLE OF CONTENTS.

       The table of contents of this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.

                     TITLE I--CUSTOMER PROTECTIONS

Sec. 101. Enhanced protections for futures customers.
Sec. 102. Electronic confirmation of customer funds.
Sec. 103. Notice and certifications providing additional customer 
              protections.
Sec. 104. Futures commission merchant compliance.
Sec. 105. Certainty for futures customers and market participants.

         TITLE II--COMMODITY FUTURES TRADING COMMISSION REFORMS

Sec. 201. Extension of operations.
Sec. 202. Consideration by the Commodity Futures Trading Commission of 
              the costs and benefits of its regulations and orders.
Sec. 203. Division directors.
Sec. 204. Office of the Chief Economist.
Sec. 205. Procedures governing actions taken by Commission staff.
Sec. 206. Strategic technology plan.
Sec. 207. Internal risk controls.
Sec. 208. Subpoena duration and renewal.

[[Page H3941]]

Sec. 209. Applicability of notice and comment requirements of the 
              Administrative Procedure Act to guidance voted on by the 
              Commission.
Sec. 210. Judicial review of Commission rules.
Sec. 211. GAO study on use of Commission resources.
Sec. 212. Disclosure of required data of other registered entities.
Sec. 213. Report on status of any application of metals exchange to 
              register as a foreign board of trade; deadline for action 
              on application.

                       TITLE III--END-USER RELIEF

Sec. 301. Relief for hedgers utilizing centralized risk management 
              practices.
Sec. 302. Indemnification requirements.
Sec. 303. Transactions with utility special entities.
Sec. 304. Utility special entity defined.
Sec. 305. Utility operations-related swap.
Sec. 306. End-users not treated as financial entities.
Sec. 307. Reporting of illiquid swaps so as to not disadvantage certain 
              non-financial end-users.
Sec. 308. Relief for grain elevator operators, farmers, agricultural 
              counterparties, and commercial market participants.
Sec. 309. Relief for end-users who use physical contracts with 
              volumetric optionality.
Sec. 310. Commission vote required before automatic change of swap 
              dealer de minimis level.
Sec. 311. Capital requirements for non-bank swap dealers.
Sec. 312. Harmonization with the Jumpstart Our Business Startups Act.
Sec. 313. Bona fide hedge defined to protect end-user risk management 
              needs.
Sec. 314. Cross-border regulation of derivatives transactions.
Sec. 315. Exemption of qualified charitable organizations from 
              designation and regulation as commodity pool operators.
Sec. 316. Small bank holding company clearing exemption.
Sec. 317. Core principle certainty.
Sec. 318. Treatment of Federal Home Loan Bank products.
Sec. 319. Treatment of certain funds.

                    TITLE IV--TECHNICAL CORRECTIONS

Sec. 401. Correction of references.
Sec. 402. Elimination of obsolete references to dealer options.
Sec. 403. Updated trade data publication requirement.
Sec. 404. Flexibility for registered entities.
Sec. 405. Elimination of obsolete references to electronic trading 
              facilities.
Sec. 406. Elimination of obsolete reference to alternative swap 
              execution facilities.
Sec. 407. Elimination of redundant references to types of registered 
              entities.
Sec. 408. Clarification of Commission authority over swaps trading.
Sec. 409. Elimination of obsolete reference to the Commodity Exchange 
              Commission.
Sec. 410. Elimination of obsolete references to derivative transaction 
              execution facilities.
Sec. 411. Elimination of obsolete references to exempt boards of trade.
Sec. 412. Elimination of report due in 1986.
Sec. 413. Compliance report flexibility.
Sec. 414. Miscellaneous corrections.

                     TITLE I--CUSTOMER PROTECTIONS

     SEC. 101. ENHANCED PROTECTIONS FOR FUTURES CUSTOMERS.

       Section 17 of the Commodity Exchange Act (7 U.S.C. 21) is 
     amended by adding at the end the following:
       ``(s) A registered futures association shall--
       ``(1) require each member of the association that is a 
     futures commission merchant to maintain written policies and 
     procedures regarding the maintenance of--
       ``(A) the residual interest of the member, as described in 
     section 1.23 of title 17, Code of Federal Regulations, in any 
     customer segregated funds account of the member, as 
     identified in section 1.20 of such title, and in any foreign 
     futures and foreign options customer secured amount funds 
     account of the member, as identified in section 30.7 of such 
     title; and
       ``(B) the residual interest of the member, as described in 
     section 22.2(e)(4) of such title, in any cleared swaps 
     customer collateral account of the member, as identified in 
     section 22.2 of such title; and
       ``(2) establish rules to govern the withdrawal, transfer or 
     disbursement by any member of the association, that is a 
     futures commission merchant, of the member's residual 
     interest in customer segregated funds as provided in such 
     section 1.20, in foreign futures and foreign options customer 
     secured amount funds, identified as provided in such section 
     30.7, and from a cleared swaps customer collateral, 
     identified as provided in such section 22.2.''.

     SEC. 102. ELECTRONIC CONFIRMATION OF CUSTOMER FUNDS.

       Section 17 of the Commodity Exchange Act (7 U.S.C. 21), as 
     amended by section 101 of this Act, is amended by adding at 
     the end the following:
       ``(t) A registered futures association shall require any 
     member of the association that is a futures commission 
     merchant to--
       ``(1) use an electronic system or systems to report 
     financial and operational information to the association or 
     another party designated by the registered futures 
     association, including information related to customer 
     segregated funds, foreign futures and foreign options 
     customer secured amount funds accounts, and cleared swaps 
     customer collateral, in accordance with such terms, 
     conditions, documentation standards, and regular time 
     intervals as are established by the registered futures 
     association;
       ``(2) instruct each depository, including any bank, trust 
     company, derivatives clearing organization, or futures 
     commission merchant, holding customer segregated funds under 
     section 1.20 of title 17, Code of Federal Regulations, 
     foreign futures and foreign options customer secured amount 
     funds under section 30.7 of such title, or cleared swap 
     customer funds under section 22.2 of such title, to report 
     balances in the futures commission merchant's section 1.20 
     customer segregated funds, section 30.7 foreign futures and 
     foreign options customer secured amount funds, and section 
     22.2 cleared swap customer funds, to the registered futures 
     association or another party designated by the registered 
     futures association, in the form, manner, and interval 
     prescribed by the registered futures association; and
       ``(3) hold section 1.20 customer segregated funds, section 
     30.7 foreign futures and foreign options customer secured 
     amount funds and section 22.2 cleared swaps customer funds in 
     a depository that reports the balances in these accounts of 
     the futures commission merchant held at the depository to the 
     registered futures association or another party designated by 
     the registered futures association in the form, manner, and 
     interval prescribed by the registered futures association.''.

     SEC. 103. NOTICE AND CERTIFICATIONS PROVIDING ADDITIONAL 
                   CUSTOMER PROTECTIONS.

       Section 17 of the Commodity Exchange Act (7 U.S.C. 21), as 
     amended by sections 101 and 102 of this Act, is amended by 
     adding at the end the following:
       ``(u) A futures commission merchant that has adjusted net 
     capital in an amount less than the amount required by 
     regulations established by the Commission or a self-
     regulatory organization of which the futures commission 
     merchant is a member shall immediately notify the Commission 
     and the self-regulatory organization of this occurrence.
       ``(v) A futures commission merchant that does not hold a 
     sufficient amount of funds in segregated accounts for futures 
     customers under section 1.20 of title 17, Code of Federal 
     Regulations, in foreign futures and foreign options secured 
     amount accounts for foreign futures and foreign options 
     secured amount customers under section 30.7 of such title, or 
     in segregated accounts for cleared swap customers under 
     section 22.2 of such title, as required by regulations 
     established by the Commission or a self-regulatory 
     organization of which the futures commission merchant is a 
     member, shall immediately notify the Commission and the self-
     regulatory organization of this occurrence.
       ``(w) Within such time period established by the Commission 
     after the end of each fiscal year, a futures commission 
     merchant shall file with the Commission a report from the 
     chief compliance officer of the futures commission merchant 
     containing an assessment of the internal compliance programs 
     of the futures commission merchant.''.

     SEC. 104. FUTURES COMMISSION MERCHANT COMPLIANCE.

       (a) In General.--Section 4d(a) of the Commodity Exchange 
     Act (7 U.S.C. 6d(a)) is amended--
       (1) by redesignating paragraphs (1) and (2) as 
     subparagraphs (A) and (B);
       (2) by inserting ``(1)'' before ``It shall be unlawful''; 
     and
       (3) by adding at the end the following new paragraph:
       ``(2) Any rules or regulations requiring a futures 
     commission merchant to maintain a residual interest in 
     accounts held for the benefit of customers in amounts at 
     least sufficient to exceed the sum of all uncollected margin 
     deficits of such customers shall provide that a futures 
     commission merchant shall meet its residual interest 
     requirement as of the end of each business day calculated as 
     of the close of business on the previous business day.''.
       (b) Conforming Amendment.--Section 4d(h) of such Act (7 
     U.S.C. 6d(h)) is amended by striking ``Notwithstanding 
     subsection (a)(2)'' and inserting ``Notwithstanding 
     subsection (a)(1)(B)''.

     SEC. 105. CERTAINTY FOR FUTURES CUSTOMERS AND MARKET 
                   PARTICIPANTS.

       Section 20(a) of the Commodity Exchange Act (7 U.S.C. 
     24(a)) is amended--
       (1) by striking ``and'' at the end of paragraph (4);
       (2) by striking the period at the end of paragraph (5) and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(6) that cash, securities, or other property of the 
     estate of a commodity broker, including the trading or 
     operating accounts of the commodity broker and commodities 
     held in inventory by the commodity broker, shall be included 
     in customer property, subject to any otherwise unavoidable 
     security interest, or otherwise unavoidable contractual 
     offset or netting rights of creditors (including rights set 
     forth in a rule or bylaw of a derivatives clearing 
     organization or a clearing agency) in respect of such 
     property, but only to the extent that the property that is 
     otherwise customer property is insufficient to satisfy the 
     net equity claims of public customers (as such term may be 
     defined by the Commission by rule or regulation) of the 
     commodity broker.''.

         TITLE II--COMMODITY FUTURES TRADING COMMISSION REFORMS

     SEC. 201. EXTENSION OF OPERATIONS.

       Section 12(d) of the Commodity Exchange Act (7 U.S.C. 
     16(d)) is amended by striking ``2013'' and inserting 
     ``2019''.

     SEC. 202. CONSIDERATION BY THE COMMODITY FUTURES TRADING 
                   COMMISSION OF THE COSTS AND BENEFITS OF ITS 
                   REGULATIONS AND ORDERS.

       Section 15(a) of the Commodity Exchange Act (7 U.S.C. 
     19(a)) is amended--

[[Page H3942]]

       (1) by striking paragraphs (1) and (2) and inserting the 
     following:
       ``(1) In general.--Before promulgating a regulation under 
     this Act or issuing an order (except as provided in paragraph 
     (3)), the Commission, through the Office of the Chief 
     Economist, shall assess and publish in the regulation or 
     order the costs and benefits, both qualitative and 
     quantitative, of the proposed regulation or order, and the 
     proposed regulation or order shall state its statutory 
     justification.
       ``(2) Considerations.--In making a reasoned determination 
     of the costs and the benefits, the Commission shall 
     evaluate--
       ``(A) considerations of protection of market participants 
     and the public;
       ``(B) considerations of the efficiency, competitiveness, 
     and financial integrity of futures and swaps markets;
       ``(C) considerations of the impact on market liquidity in 
     the futures and swaps markets;
       ``(D) considerations of price discovery;
       ``(E) considerations of sound risk management practices;
       ``(F) available alternatives to direct regulation;
       ``(G) the degree and nature of the risks posed by various 
     activities within the scope of its jurisdiction;
       ``(H) the costs of complying with the proposed regulation 
     or order by all regulated entities, including a methodology 
     for quantifying the costs (recognizing that some costs are 
     difficult to quantify);
       ``(I) whether the proposed regulation or order is 
     inconsistent, incompatible, or duplicative of other Federal 
     regulations or orders;
       ``(J) the cost to the Commission of implementing the 
     proposed regulation or order by the Commission staff, 
     including a methodology for quantifying the costs;
       ``(K) whether, in choosing among alternative regulatory 
     approaches, those approaches maximize net benefits (including 
     potential economic and other benefits, distributive impacts, 
     and equity); and
       ``(L) other public interest considerations.''; and
       (2) by adding at the end the following:
       ``(4) Judicial review.--Notwithstanding section 24(d), a 
     court shall affirm a Commission assessment of costs and 
     benefits under this subsection, unless the court finds the 
     assessment to be an abuse of discretion.''.

     SEC. 203. DIVISION DIRECTORS.

       Section 2(a)(6)(C) of the Commodity Exchange Act (7 U.S.C. 
     2(a)(6)(C)) is amended by inserting ``, and the heads of the 
     units shall serve at the pleasure of the Commission'' before 
     the period.

     SEC. 204. OFFICE OF THE CHIEF ECONOMIST.

       (a) In General.--Section 2(a) of the Commodity Exchange Act 
     (7 U.S.C. 2(a)) is amended by adding at the end the 
     following:
       ``(17) Office of the chief economist.--
       ``(A) Establishment.--There is established in the 
     Commission the Office of the Chief Economist.
       ``(B) Head.--The Office of the Chief Economist shall be 
     headed by the Chief Economist, who shall be appointed by the 
     Commission and serve at the pleasure of the Commission.
       ``(C) Functions.--The Chief Economist shall report directly 
     to the Commission and perform such functions and duties as 
     the Commission may prescribe.
       ``(D) Professional staff.--The Commission shall appoint 
     such other economists as may be necessary to assist the Chief 
     Economist in performing such economic analysis, regulatory 
     cost-benefit analysis, or research any member of the 
     Commission may request.''.
       (b) Conforming Amendment.--Section 2(a)(6)(A) of such Act 
     (7 U.S.C. 2(a)(6)(A)) is amended by striking ``(4) and (5) of 
     this subsection'' and inserting ``(4), (5), and (17)''.

     SEC. 205. PROCEDURES GOVERNING ACTIONS TAKEN BY COMMISSION 
                   STAFF.

       Section 2(a)(12) of the Commodity Exchange Act (7 U.S.C. 
     2(a)(12)) is amended--
       (1) by striking ``(12) The'' and inserting the following:
       ``(12) Rules and regulations.--
       ``(A) In general.--Subject to the other provisions of this 
     paragraph, the''; and
       (2) by adding after and below the end the following new 
     subparagraph:
       ``(B) Notice to commissioners.--The Commission shall 
     develop and publish internal procedures governing the 
     issuance by any division or office of the Commission of any 
     response to a formal, written request or petition from any 
     member of the public for an exemptive, a no-action, or an 
     interpretive letter and such procedures shall provide that 
     the commissioners be provided with the final version of the 
     matter to be issued with sufficient notice to review the 
     matter prior to its issuance.''.

     SEC. 206. STRATEGIC TECHNOLOGY PLAN.

       Section 2(a) of the Commodity Exchange Act (7 U.S.C. 2(a)), 
     as amended by section 204(a) of this Act, is amended by 
     adding at the end the following:
       ``(18) Strategic technology plan.--
       ``(A) In general.--Every 5 years, the Commission shall 
     develop and submit to the Committee on Agriculture of the 
     House of Representatives and the Committee on Agriculture, 
     Nutrition, and Forestry of the Senate a detailed plan focused 
     on the acquisition and use of technology by the Commission.
       ``(B) Contents.--The plan shall--
       ``(i) include for each related division or office a 
     detailed technology strategy focused on market surveillance 
     and risk detection, market data collection, aggregation, 
     interpretation, standardization, harmonization, 
     normalization, validation, streamlining or other data 
     analytic processes, and internal management and protection of 
     data collected by the Commission, including a detailed 
     accounting of how the funds provided for technology will be 
     used and the priorities that will apply in the use of the 
     funds; and
       ``(ii) set forth annual goals to be accomplished and annual 
     budgets needed to accomplish the goals.''.

     SEC. 207. INTERNAL RISK CONTROLS.

       Section 2(a)(12) of the Commodity Exchange Act (7 U.S.C. 
     2(a)(12)), as amended by section 205 of this Act, is amended 
     by adding at the end the following:
       ``(C) Internal risk controls.--The Commission, in 
     consultation with the Chief Economist, shall develop 
     comprehensive internal risk control mechanisms to safeguard 
     and govern the storage of all market data by the Commission, 
     all market data sharing agreements of the Commission, and all 
     academic research performed at the Commission using market 
     data.''.

     SEC. 208. SUBPOENA DURATION AND RENEWAL.

       Section 6(c)(5) of the Commodity Exchange Act (7 U.S.C. 
     9(5)) is amended--
       (1) by striking ``(5) Subpoena.--For'' and inserting the 
     following:
       ``(5) Subpoena.--
       ``(A) In general.--For''; and
       (2) by adding after and below the end the following:
       ``(B) Omnibus orders of investigation.--
       ``(i) Duration and renewal.--An omnibus order of 
     investigation shall not be for an indefinite duration and may 
     be renewed only by Commission action.
       ``(ii) Definition.--In clause (i), the term `omnibus order 
     of investigation' means an order of the Commission 
     authorizing 1 of more members of the Commission or its staff 
     to issue subpoenas under subparagraph (A) to multiple persons 
     in relation to a particular subject matter area.''.

     SEC. 209. APPLICABILITY OF NOTICE AND COMMENT REQUIREMENTS OF 
                   THE ADMINISTRATIVE PROCEDURE ACT TO GUIDANCE 
                   VOTED ON BY THE COMMISSION.

       Section 2(a)(12) of the Commodity Exchange Act (7 U.S.C. 
     2(a)(12)), as amended by sections 205 and 207 of this Act, is 
     amended by adding at the end the following:
       ``(D) Applicability of notice and comment rules to guidance 
     voted on by the commission.--The notice and comment 
     requirements of section 553 of title 5, United States Code, 
     shall also apply with respect to any Commission statement or 
     guidance, including interpretive rules, general statements of 
     policy, or rules of Commission organization, procedure, or 
     practice, that has the effect of implementing, interpreting 
     or prescribing law or policy and that is voted on by the 
     Commission.''.

     SEC. 210. JUDICIAL REVIEW OF COMMISSION RULES.

       The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended 
     by adding at the end the following:

     ``SEC. 24. JUDICIAL REVIEW OF COMMISSION RULES.

       ``(a) A person adversely affected by a rule of the 
     Commission promulgated under this Act may obtain review of 
     the rule in the United States Court of Appeals for the 
     District of Columbia Circuit or the United States Court of 
     Appeals for the circuit where the party resides or has the 
     principal place of business, by filing in the court, within 
     60 days after publication in the Federal Register of the 
     entry of the rule, a written petition requesting that the 
     rule be set aside.
       ``(b) A copy of the petition shall be transmitted forthwith 
     by the clerk of the court to an officer designated by the 
     Commission for that purpose. Thereupon the Commission shall 
     file in the court the record on which the rule complained of 
     is entered, as provided in section 2112 of title 28, United 
     States Code, and the Federal Rules of Appellate Procedure.
       ``(c) On the filing of the petition, the court has 
     jurisdiction, which becomes exclusive on the filing of the 
     record, to affirm and enforce or to set aside the rule in 
     whole or in part.
       ``(d) The court shall affirm and enforce the rule unless 
     the Commission's action in promulgating the rule is found to 
     be arbitrary, capricious, an abuse of discretion, or 
     otherwise not in accordance with law; contrary to 
     constitutional right, power, privilege, or immunity; in 
     excess of statutory jurisdiction, authority, or limitations, 
     or short of statutory right; or without observance of 
     procedure required by law.''.

     SEC. 211. GAO STUDY ON USE OF COMMISSION RESOURCES.

       (a) Study.--The Comptroller General of the United States 
     shall conduct a study of the resources of the Commodity 
     Futures Trading Commission that--
       (1) assesses whether the resources of the Commission are 
     sufficient to enable the Commission to effectively carry out 
     the duties of the Commission;
       (2) examines the expenditures of the Commission on 
     hardware, software, and analytical processes designed to 
     protect customers in the areas of--
       (A) market surveillance and risk detection; and
       (B) market data collection, aggregation, interpretation, 
     standardization, harmonization, and streamlining;
       (3) analyzes the additional workload undertaken by the 
     Commission, and ascertains where self-regulatory 
     organizations could be more effectively utilized; and
       (4) examines existing and emerging post-trade risk 
     reduction services in the swaps market, the notional amount 
     of risk reduction transactions provided by the services, and 
     the effects the services have on financial stability, 
     including--
       (A) market surveillance and risk detection;
       (B) market data collection, aggregation, interpretation, 
     standardization, harmonization, and streamlining; and
       (C) oversight and compliance work by market participants 
     and regulators.
       (b) Report.--Not later than 180 days after the date of the 
     enactment of this Act, the Comptroller General of the United 
     States shall submit

[[Page H3943]]

     to the Committee on Agriculture of the House of 
     Representatives and the Committee on Agriculture, Nutrition, 
     and Forestry of the Senate a report that contains the results 
     of the study required by subsection (a).

     SEC. 212. DISCLOSURE OF REQUIRED DATA OF OTHER REGISTERED 
                   ENTITIES.

       Section 8 of the Commodity Exchange Act (7 U.S.C. 12) is 
     amended by adding at the end the following:
       ``(j) Disclosure of Required Data of Other Registered 
     Entities.--
       ``(1) Except as provided in this subsection, the Commission 
     may not be compelled to disclose any proprietary information 
     provided to the Commission, except that nothing in this 
     subsection--
       ``(A) authorizes the Commission to withhold information 
     from Congress; or
       ``(B) prevents the Commission from--
       ``(i) complying with a request for information from any 
     other Federal department or agency, any State or political 
     subdivision thereof, or any foreign government or any 
     department, agency, or political subdivision thereof 
     requesting the report or information for purposes within the 
     scope of its jurisdiction, upon an agreement of 
     confidentiality to protect the information in a manner 
     consistent with this paragraph and subsection (e); or
       ``(ii) making a disclosure made pursuant to a court order 
     in connection with an administrative or judicial proceeding 
     brought under this Act, in any receivership proceeding 
     involving a receiver appointed in a judicial proceeding 
     brought under this Act, or in any bankruptcy proceeding in 
     which the Commission has intervened or in which the 
     Commission has the right to appear and be heard under title 
     11 of the United States Code.
       ``(2) Any proprietary information of a commodity trading 
     advisor or commodity pool operator ascertained by the 
     Commission in connection with Form CPO-PQR, Form CTA-PR, and 
     any successor forms thereto, shall be subject to the same 
     limitations on public disclosure, as any facts ascertained 
     during an investigation, as provided by subsection (a); 
     provided, however, that the Commission shall not be precluded 
     from publishing aggregate information compiled from such 
     forms, to the extent such aggregate information does not 
     identify any individual person or firm, or such person's 
     proprietary information.
       ``(3) For purposes of section 552 of title 5, United States 
     Code, this subsection, and the information contemplated 
     herein, shall be considered a statute described in subsection 
     (b)(3)(B) of such section 552.
       ``(4) For purposes of the definition of proprietary 
     information in paragraph (5), the records and reports of any 
     client account or commodity pool to which a commodity trading 
     advisor or commodity pool operator registered under this 
     title provides services that are filed with the Commission on 
     Form CPO-PQR, CTA-PR, and any successor forms thereto, shall 
     be deemed to be the records and reports of the commodity 
     trading advisor or commodity pool operator, respectively.
       ``(5) For purposes of this section, proprietary information 
     of a commodity trading advisor or commodity pool operator 
     includes sensitive, non-public information regarding--
       ``(A) the commodity trading advisor, commodity pool 
     operator or the trading strategies of the commodity trading 
     advisor or commodity pool operator;
       ``(B) analytical or research methodologies of a commodity 
     trading advisor or commodity pool operator;
       ``(C) trading data of a commodity trading advisor or 
     commodity pool operator; and
       ``(D) computer hardware or software containing intellectual 
     property of a commodity trading advisor or commodity pool 
     operator;''.

     SEC. 213. REPORT ON STATUS OF ANY APPLICATION OF METALS 
                   EXCHANGE TO REGISTER AS A FOREIGN BOARD OF 
                   TRADE; DEADLINE FOR ACTION ON APPLICATION.

       (a) Report to Congress.--Within 90 days after the date of 
     the enactment of this section, the Commodity Futures Trading 
     Commission shall submit to the Congress a written report on--
       (1) the status of the review by the Commission of any 
     application submitted by a metals exchange to register with 
     the Commission under section 4(b)(1) of the Commodity 
     Exchange Act; and
       (2) the status of Commission negotiations with foreign 
     regulators regarding aluminum warehousing.
       (b) Deadline for Action.--Not later than September 30, 
     2016, the Commission shall take action on any such 
     application submitted to the Commission on or before August 
     14, 2012.

                       TITLE III--END-USER RELIEF

     SEC. 301. RELIEF FOR HEDGERS UTILIZING CENTRALIZED RISK 
                   MANAGEMENT PRACTICES.

       (a) In General.--
       (1) Commodity exchange act amendment.--Section 
     2(h)(7)(D)(i) of the Commodity Exchange Act (7 U.S.C. 
     2(h)(7)(D)(i)) is amended to read as follows:
       ``(i) In general.--An affiliate of a person that qualifies 
     for an exception under subparagraph (A) (including an 
     affiliate entity predominantly engaged in providing financing 
     for the purchase of the merchandise or manufactured goods of 
     the person) may qualify for the exception only if the 
     affiliate enters into the swap to hedge or mitigate the 
     commercial risk of the person or other affiliate of the 
     person that is not a financial entity, provided that if the 
     hedge or mitigation of such commercial risk is addressed by 
     entering into a swap with a swap dealer or major swap 
     participant, an appropriate credit support measure or other 
     mechanism must be utilized.''.
       (2) Securities exchange act of 1934 amendment.--Section 
     3C(g)(4)(A) of the Securities Exchange Act of 1934 (15 U.S.C. 
     78c-3(g)(4)(A)) is amended to read as follows:
       ``(A) In general.--An affiliate of a person that qualifies 
     for an exception under paragraph (1) (including affiliate 
     entities predominantly engaged in providing financing for the 
     purchase of the merchandise or manufactured goods of the 
     person) may qualify for the exception only if the affiliate 
     enters into the security-based swap to hedge or mitigate the 
     commercial risk of the person or other affiliate of the 
     person that is not a financial entity, provided that if the 
     hedge or mitigation of such commercial risk is addressed by 
     entering into a security-based swap with a security-based 
     swap dealer or major security-based swap participant, an 
     appropriate credit support measure or other mechanism must be 
     utilized.''.
       (b) Applicability of Credit Support Measure Requirement.--
     The requirements in section 2(h)(7)(D)(i) of the Commodity 
     Exchange Act and section 3C(g)(4)(A) of the Securities 
     Exchange Act of 1934, as amended by subsection (a), requiring 
     that a credit support measure or other mechanism be utilized 
     if the transfer of commercial risk referred to in such 
     sections is addressed by entering into a swap with a swap 
     dealer or major swap participant or a security-based swap 
     with a security-based swap dealer or major security-based 
     swap participant, as appropriate, shall not apply with 
     respect to swaps or security-based swaps, as appropriate, 
     entered into before the date of the enactment of this Act.

     SEC. 302. INDEMNIFICATION REQUIREMENTS.

       (a) Derivatives Clearing Organizations.--Section 5b(k)(5) 
     of the Commodity Exchange Act (7 U.S.C. 7a-1(k)(5)) is 
     amended to read as follows:
       ``(5) Confidentiality agreement.--Before the Commission may 
     share information with any entity described in paragraph (4), 
     the Commission shall receive a written agreement from each 
     entity stating that the entity shall abide by the 
     confidentiality requirements described in section 8 relating 
     to the information on swap transactions that is provided.''.
       (b) Swap Data Repositories.--Section 21(d) of such Act (7 
     U.S.C. 24a(d)) is amended to read as follows:
       ``(d) Confidentiality Agreement.--Before the swap data 
     repository may share information with any entity described in 
     subsection (c)(7), the swap data repository shall receive a 
     written agreement from each entity stating that the entity 
     shall abide by the confidentiality requirements described in 
     section 8 relating to the information on swap transactions 
     that is provided.''.
       (c) Security-based Swap Data Repositories.--Section 
     13(n)(5)(H) of the Securities Exchange Act of 1934 (15 U.S.C. 
     78m(n)(5)(H)) is amended to read as follows:
       ``(H) Confidentiality agreement.--Before the security-based 
     swap data repository may share information with any entity 
     described in subparagraph (G), the security-based swap data 
     repository shall receive a written agreement from each entity 
     stating that the entity shall abide by the confidentiality 
     requirements described in section 24 relating to the 
     information on security-based swap transactions that is 
     provided.''.

     SEC. 303. TRANSACTIONS WITH UTILITY SPECIAL ENTITIES.

       Section 1a(49) of the Commodity Exchange Act (7 U.S.C. 
     1a(49)) is amended by adding at the end the following:
       ``(E) Certain transactions with a utility special entity.--
       ``(i) Transactions in utility operations-related swaps 
     shall be reported pursuant to section 4r.
       ``(ii) In making a determination to exempt pursuant to 
     subparagraph (D), the Commission shall treat a utility 
     operations-related swap entered into with a utility special 
     entity, as defined in section 4s(h)(2)(D), as if it were 
     entered into with an entity that is not a special entity, as 
     defined in section 4s(h)(2)(C).''.

     SEC. 304. UTILITY SPECIAL ENTITY DEFINED.

       Section 4s(h)(2) of the Commodity Exchange Act (7 U.S.C. 
     6s(h)(2)) is amended by adding at the end the following:
       ``(D) Utility special entity.--For purposes of this Act, 
     the term `utility special entity' means a special entity, or 
     any instrumentality, department, or corporation of or 
     established by a State or political subdivision of a State, 
     that--
       ``(i) owns or operates, or anticipates owning or operating, 
     an electric or natural gas facility or an electric or natural 
     gas operation;
       ``(ii) supplies, or anticipates supplying, natural gas and 
     or electric energy to another utility special entity;
       ``(iii) has, or anticipates having, public service 
     obligations under Federal, State, or local law or regulation 
     to deliver electric energy or natural gas service to 
     customers; or
       ``(iv) is a Federal power marketing agency, as defined in 
     section 3 of the Federal Power Act.''.

     SEC. 305. UTILITY OPERATIONS-RELATED SWAP.

       (a) Swap Further Defined.--Section 1a(47)(A)(iii) of the 
     Commodity Exchange Act (7 U.S.C. 1a(47)(A)(iii)) is amended--
       (1) by striking ``and'' at the end of subclause (XXI);
       (2) by adding ``and'' at the end of subclause (XXII); and
       (3) by adding at the end the following:

       ``(XXIII) a utility operations-related swap;''.

       (b) Utility Operations-related Swap Defined.--Section 1a of 
     such Act (7 U.S.C. 1a) is amended by adding at the end the 
     following:
       ``(52) Utility operations-related swap.--The term `utility 
     operations-related swap' means a swap that--
       ``(A) is entered into by a utility to hedge or mitigate a 
     commercial risk;
       ``(B) is not a contract, agreement, or transaction based 
     on, derived on, or referencing--

[[Page H3944]]

       ``(i) an interest rate, credit, equity, or currency asset 
     class; or
       ``(ii) except as used for fuel for electric energy 
     generation, a metal, agricultural commodity, or crude oil or 
     gasoline commodity of any grade; or
       ``(iii) any other commodity or category of commodities 
     identified for this purpose in a rule or order adopted by the 
     Commission in consultation with the appropriate Federal and 
     State regulatory commissions; and
       ``(C) is associated with--
       ``(i) the generation, production, purchase, or sale of 
     natural gas or electric energy, the supply of natural gas or 
     electric energy to a utility, or the delivery of natural gas 
     or electric energy service to utility customers;
       ``(ii) fuel supply for the facilities or operations of a 
     utility;
       ``(iii) compliance with an electric system reliability 
     obligation;
       ``(iv) compliance with an energy, energy efficiency, 
     conservation, or renewable energy or environmental statute, 
     regulation, or government order applicable to a utility; or
       ``(v) any other electric energy or natural gas swap to 
     which a utility is a party.''.

     SEC. 306. END-USERS NOT TREATED AS FINANCIAL ENTITIES.

       (a) In General.--Section 2(h)(7)(C)(iii) of the Commodity 
     Exchange Act (7 U.S.C. 2(h)(7)(C)(iii)) is amended to read as 
     follows:
       ``(iii) Limitation.--Such definition shall not include an 
     entity--

       ``(I) whose primary business is providing financing, and 
     who uses derivatives for the purpose of hedging underlying 
     commercial risks related to interest rate and foreign 
     currency exposures, 90 percent or more of which arise from 
     financing that facilitates the purchase or lease of products, 
     90 percent or more of which are manufactured by the parent 
     company or another subsidiary of the parent company; or
       ``(II) who is not supervised by a prudential regulator, and 
     is not described in any of subclauses (I) through (VII) of 
     clause (i), and--

       ``(aa) is a commercial market participant; or
       ``(bb) enters into swaps, contracts for future delivery, 
     and other derivatives on behalf of, or to hedge or mitigate 
     the commercial risk of, whether directly or in the aggregate, 
     affiliates that are not so supervised or described.''.
       (b) Commercial Market Participant Defined.--
       (1) In general.--Section 1a of such Act (7 U.S.C. 1a), as 
     amended by section 305(b) of this Act, is amended by 
     redesignating paragraphs (8) through (52) as paragraphs (9) 
     through (53), respectively, and by inserting after paragraph 
     (6) the following:
       ``(7) Commercial market participant.--The term `commercial 
     market participant' means any producer, processor, merchant, 
     or commercial user of an exempt or agricultural commodity, or 
     the products or byproducts of such a commodity.''.
       (2) Conforming amendments.--
       (A) Section 1a of such Act (7 U.S.C. 1a) is amended--
       (i) in subparagraph (A) of paragraph (18) (as so 
     redesignated by paragraph (1) of this subsection), in the 
     matter preceding clause (i), by striking ``(18)(A)'' and 
     inserting ``(19)(A)''; and
       (ii) in subparagraph (A)(vii) of paragraph (19) (as so 
     redesignated by paragraph (1) of this subsection), in the 
     matter following subclause (III), by striking ``(17)(A)'' and 
     inserting ``(18)(A)''.
       (B) Section 4(c)(1)(A)(i)(I) of such Act (7 U.S.C. 
     6(c)(1)(A)(i)(I)) is amended by striking ``(7), paragraph 
     (18)(A)(vii)(III), paragraphs (23), (24), (31), (32), (38), 
     (39), (41), (42), (46), (47), (48), and (49)'' and inserting 
     ``(8), paragraph (19)(A)(vii)(III), paragraphs (24), (25), 
     (32), (33), (39), (40), (42), (43), (47), (48), (49), and 
     (50)''.
       (C) Section 4q(a)(1) of such Act (7 U.S.C. 6o-1(a)(1)) is 
     amended by striking ``1a(9)'' and inserting ``1a(10)''.
       (D) Section 4s(f)(1)(D) of such Act (7 U.S.C. 6s(f)(1)(D)) 
     is amended by striking ``1a(47)(A)(v)'' and inserting 
     ``1a(48)(A)(v)''.
       (E) Section 4s(h)(5)(A)(i) of such Act (7 U.S.C. 
     6s(h)(5)(A)(i)) is amended by striking ``1a(18)'' and 
     inserting ``1a(19)''.
       (F) Section 4t(b)(1)(C) of such Act (7 U.S.C. 6t(b)(1)(C)) 
     is amended by striking ``1a(47)(A)(v)'' and inserting 
     ``1a(48)(A)(v)''.
       (G) Section 5(d)(23) of such Act (7 U.S.C. 7(d)(23)) is 
     amended by striking ``1a(47)(A)(v)'' and inserting 
     ``1a(48)(A)(v)''.
       (H) Section 5(e)(1) of such Act (7 U.S.C. 7(e)(1)) is 
     amended by striking ``1a(9)'' and inserting ``1a(10)''.
       (I) Section 5b(k)(3)(A) of such Act (7 U.S.C. 7a-
     1(k)(3)(A)) is amended by striking ``1a(47)(A)(v)'' and 
     inserting ``1a(48)(A)(v)''.
       (J) Section 5h(f)(10)(A)(iii) of such Act (7 U.S.C. 7b-
     3(f)(10)(A)(iii)) is amended by striking ``1a(47)(A)(v)'' and 
     inserting ``1a(48)(A)(v)''.
       (K) Section 21(f)(4)(C) of such Act (7 U.S.C. 24a(f)(4)(C)) 
     is amended by striking ``1a(48)'' and inserting ``1a(49)''.

     SEC. 307. REPORTING OF ILLIQUID SWAPS SO AS TO NOT 
                   DISADVANTAGE CERTAIN NON-FINANCIAL END-USERS.

       Section 2(a)(13) of the Commodity Exchange Act (7 U.S.C. 
     2(a)(13)) is amended--
       (1) in subparagraph (C), by striking ``The Commission'' and 
     inserting ``Except as provided in subparagraph (D), the 
     Commission''; and
       (2) by redesignating subparagraphs (D) through (G) as 
     subparagraphs (E) through (H), respectively, and inserting 
     after subparagraph (C) the following:
       ``(D) Requirements for swap transactions in illiquid 
     markets.--Notwithstanding subparagraph (C):
       ``(i) The Commission shall provide by rule for the public 
     reporting of swap transactions, including price and volume 
     data, in illiquid markets that are not cleared and entered 
     into by a non-financial entity that is hedging or mitigating 
     commercial risk in accordance with subsection (h)(7)(A).
       ``(ii) The Commission shall ensure that the swap 
     transaction information referred to in clause (i) of this 
     subparagraph is available to the public no sooner than 30 
     days after the swap transaction has been executed or at such 
     later date as the Commission determines appropriate to 
     protect the identity of participants and positions in 
     illiquid markets and to prevent the elimination or reduction 
     of market liquidity.
       ``(iii) In this subparagraph, the term `illiquid markets' 
     means any market in which the volume and frequency of trading 
     in swaps is at such a level as to allow identification of 
     individual market participants.''.

     SEC. 308. RELIEF FOR GRAIN ELEVATOR OPERATORS, FARMERS, 
                   AGRICULTURAL COUNTERPARTIES, AND COMMERCIAL 
                   MARKET PARTICIPANTS.

       The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended 
     by inserting after section 4t the following:

     ``SEC. 4U. RECORDKEEPING REQUIREMENTS APPLICABLE TO NON-
                   REGISTERED MEMBERS OF CERTAIN REGISTERED 
                   ENTITIES.

       ``Except as provided in section 4(a)(3), a member of a 
     designated contract market or a swap execution facility that 
     is not registered with the Commission and not required to be 
     registered with the Commission in any capacity shall satisfy 
     the recordkeeping requirements of this Act and any 
     recordkeeping rule, order, or regulation under this Act by 
     maintaining a written record of each transaction in a 
     contract for future delivery, option on a future, swap, 
     swaption, trade option, or related cash or forward 
     transaction. The written record shall be sufficient if it 
     includes the final agreement between the parties and the 
     material economic terms of the transaction.''.

     SEC. 309. RELIEF FOR END-USERS WHO USE PHYSICAL CONTRACTS 
                   WITH VOLUMETRIC OPTIONALITY.

       Section 1a(47)(B)(ii) of the Commodity Exchange Act (7 
     U.S.C. 1a(47)(B)(ii)) is amended to read as follows:
       ``(ii) any purchase or sale of a nonfinancial commodity or 
     security for deferred shipment or delivery, so long as the 
     transaction is intended to be physically settled, including 
     any stand-alone or embedded option for which exercise results 
     in a physical delivery obligation;''.

     SEC. 310. COMMISSION VOTE REQUIRED BEFORE AUTOMATIC CHANGE OF 
                   SWAP DEALER DE MINIMIS LEVEL.

       Section 1a(49)(D) of the Commodity Exchange Act (7 U.S.C. 
     1a(49)(D)) is amended--
       (1) by striking all that precedes ``shall exempt'' and 
     inserting the following:
       ``(D) Exception.--
       ``(i) In general.--The Commission''; and
       (2) by adding after and below the end the following new 
     clause:
       ``(ii) De minimis quantity.--The de minimis quantity of 
     swap dealing described in clause (i) shall be set at a 
     quantity of $8,000,000,000, and may be amended or changed 
     only through a new affirmative action of the Commission 
     undertaken by rule or regulation.''.

     SEC. 311. CAPITAL REQUIREMENTS FOR NON-BANK SWAP DEALERS.

       (a) Commodity Exchange Act.--Section 4s(e) of the Commodity 
     Exchange Act (7 U.S.C. 6s(e)) is amended--
       (1) in paragraph (2)(B), by striking ``shall'' and 
     inserting the following: ``and the Securities and Exchange 
     Commission, in consultation with the prudential regulators, 
     shall jointly''; and
       (2) in paragraph (3)(D)--
       (A) in clause (ii), by striking ``shall, to the maximum 
     extent practicable,'' and inserting ``shall''; and
       (B) by adding at the end the following:
       ``(iii) Financial models.--To the extent that swap dealers 
     and major swap participants that are banks are permitted to 
     use financial models approved by the prudential regulators or 
     the Securities and Exchange Commission to calculate minimum 
     capital requirements and minimum initial and variation margin 
     requirements, including the use of non-cash collateral, the 
     Commission shall, in consultation with the prudential 
     regulators and the Securities and Exchange Commission, permit 
     the use of comparable financial models by swap dealers and 
     major swap participants that are not banks.''.
       (b) Securities Exchange Act of 1934.--Section 15F(e) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78o-10(e)) is 
     amended--
       (1) in paragraph (2)(B), by striking ``shall'' and 
     inserting the following: ``and the Commodity Futures Trading 
     Commission, in consultation with the prudential regulators, 
     shall jointly''; and
       (2) in paragraph (3)(D)--
       (A) in clause (ii), by striking ``shall, to the maximum 
     extent practicable,'' and inserting ``shall''; and
       (B) by adding at the end the following:
       ``(iii) Financial models.--To the extent that security-
     based swap dealers and major security-based swap participants 
     that are banks are permitted to use financial models approved 
     by the prudential regulators or the Commodity Futures Trading 
     Commission to calculate minimum capital requirements and 
     minimum initial and variation margin requirements, including 
     the use of non-cash collateral, the Commission shall, in 
     consultation with the Commodity Futures Trading Commission, 
     permit the use of comparable financial models by security-
     based swap dealers and major security-based swap participants 
     that are not banks.''.

     SEC. 312. HARMONIZATION WITH THE JUMPSTART OUR BUSINESS 
                   STARTUPS ACT.

       Within 90 days after the date of the enactment of this Act, 
     the Commodity Futures Trading Commission shall--
       (1) revise section 4.7(b) of title 17, Code of Federal 
     Regulations, in the matter preceding paragraph (1), to read 
     as follows:
       ``(b) Relief available to commodity pool operators. Upon 
     filing the notice required by paragraph (d) of this section, 
     and subject to compliance with the conditions specified in 
     paragraph

[[Page H3945]]

     (d) of this section, any registered commodity pool operator 
     who sells participations in a pool solely to qualified 
     eligible persons in an offering which qualifies for exemption 
     from the registration requirements of the Securities Act 
     pursuant to section 4(2) of that Act or pursuant to 
     Regulation S, 17 CFR 230.901 et seq., and any bank registered 
     as a commodity pool operator in connection with a pool that 
     is a collective trust fund whose securities are exempt from 
     registration under the Securities Act pursuant to section 
     3(a)(2) of that Act and are sold solely to qualified eligible 
     persons, may claim any or all of the following relief with 
     respect to such pool:''; and
       (2) revise section 4.13(a)(3)(i) of such title to read as 
     follows:
       ``(i) Interests in the pool are exempt from registration 
     under the Securities Act of 1933, and such interests are 
     offered and sold pursuant to section 4 of the Securities Act 
     of 1933 and the regulations thereunder;''.

     SEC. 313. BONA FIDE HEDGE DEFINED TO PROTECT END-USER RISK 
                   MANAGEMENT NEEDS.

       Section 4a(c) of the Commodity Exchange Act (7 U.S.C. 
     6a(c)) is amended--
       (1) in paragraph (1)--
       (A) by striking ``may'' and inserting ``shall''; and
       (B) by striking ``future for which'' and inserting 
     ``future, to be determined by the Commission, for which 
     either an appropriate swap is available or'';
       (2) in paragraph (2)--
       (A) in the matter preceding subparagraph (A), by striking 
     ``subsection (a)(2)'' and all that follows through ``position 
     as'' and inserting ``paragraphs (2) and (5) of subsection (a) 
     for swaps, contracts of sale for future delivery, or options 
     on the contracts or commodities, a bona fide hedging 
     transaction or position is''; and
       (B) in subparagraph (A)(ii), by striking ``of risks'' and 
     inserting ``or management of current or anticipated risks''; 
     and
       (3) by adding at the end the following:
       ``(3) The Commission may further define, by rule or 
     regulation, what constitutes a bona fide hedging transaction, 
     provided that the rule or regulation is consistent with the 
     requirements of subparagraphs (A) and (B) of paragraph 
     (2).''.

     SEC. 314. CROSS-BORDER REGULATION OF DERIVATIVES 
                   TRANSACTIONS.

       (a) Rulemaking Required.--Within 1 year after the date of 
     the enactment of this Act, the Commodity Futures Trading 
     Commission shall issue a rule that addresses--
       (1) the nature of the connections to the United States that 
     require a non-U.S. person to register as a swap dealer or a 
     major swap participant under the Commodity Exchange Act and 
     the regulations issued under such Act;
       (2) which of the United States swaps requirements apply to 
     the swap activities of non-U.S. persons and U.S. persons and 
     their branches, agencies, subsidiaries, and affiliates 
     outside of the United States, and the extent to which the 
     requirements apply; and
       (3) the circumstances under which a U.S. person or non-U.S. 
     person in compliance with the swaps regulatory requirements 
     of a foreign jurisdiction shall be exempt from United States 
     swaps requirements.
       (b) Content of the Rule.--
       (1) Criteria.--In the rule, the Commission shall establish 
     criteria for determining that 1 or more categories of the 
     swaps regulatory requirements of a foreign jurisdiction are 
     comparable to and as comprehensive as United States swaps 
     requirements. The criteria shall include--
       (A) the scope and objectives of the swaps regulatory 
     requirements of the foreign jurisdiction;
       (B) the effectiveness of the supervisory compliance program 
     administered;
       (C) the enforcement authority exercised by the foreign 
     jurisdiction; and
       (D) such other factors as the Commission, by rule, 
     determines to be necessary or appropriate in the public 
     interest.
       (2) Comparability.--In the rule, the Commission shall--
       (A) provide that any non-U.S. person or any transaction 
     between two non-U.S. persons shall be exempt from United 
     States swaps requirements if the person or transaction is in 
     compliance with the swaps regulatory requirements of a 
     foreign jurisdiction which the Commission has determined to 
     be comparable to and as comprehensive as United States swaps 
     requirements; and
       (B) set forth the circumstances in which a U.S. person or a 
     transaction between a U.S. person and a non-U.S. person shall 
     be exempt from United States swaps requirements if the person 
     or transaction is in compliance with the swaps regulatory 
     requirements of a foreign jurisdiction which the Commission 
     has determined to be comparable to and as comprehensive as 
     United States swaps requirements.
       (3) Outcomes-based comparison.--In developing and applying 
     the criteria, the Commission shall emphasize the results and 
     outcomes of, rather than the design and construction of, 
     foreign swaps regulatory requirements.
       (4) Risk-based rulemaking.--In the rule, the Commission 
     shall not take into account, for the purposes of determining 
     the applicability of United States swaps requirements, the 
     location of personnel that arrange, negotiate, or execute 
     swaps.
       (5) No part of any rulemaking under this section shall 
     limit the Commission's antifraud or antimanipulation 
     authority.
       (c) Application of the Rule.--
       (1) Assessments of foreign jurisdictions.--Beginning on the 
     date on which a final rule is issued under this section, the 
     Commission shall begin to assess the swaps regulatory 
     requirements of foreign jurisdictions, in the order the 
     Commission determines appropriate, in accordance with the 
     criteria established pursuant to subsection (b)(1). Following 
     each assessment, the Commission shall determine, by rule or 
     by order, whether the swaps regulatory requirements of the 
     foreign jurisdiction are comparable to and as comprehensive 
     as United States swaps requirements.
       (2) Substituted compliance for unassessed major markets.--
     Beginning 18 months after the date of enactment of this Act--
       (A) the swaps regulatory requirements of each of the 8 
     foreign jurisdictions with the largest swaps markets, as 
     calculated by notional value during the 12-month period 
     ending with such date of enactment, except those with respect 
     to which a determination has been made under paragraph (1), 
     shall be considered to be comparable to and as comprehensive 
     as United States swaps requirements; and
       (B) a non-U.S. person or a transaction between 2 non-U.S. 
     persons shall be exempt from United States swaps requirements 
     if the person or transaction is in compliance with the swaps 
     regulatory requirements of any of such unexcepted foreign 
     jurisdictions.
       (3) Suspension of substituted compliance.--If the 
     Commission determines, by rule or by order, that--
       (A) the swaps regulatory requirements of a foreign 
     jurisdiction are not comparable to and as comprehensive as 
     United States swaps requirements, using the categories and 
     criteria established under subsection (b)(1);
       (B) the foreign jurisdiction does not exempt from its swaps 
     regulatory requirements U.S. persons who are in compliance 
     with United States swaps requirements; or
       (C) the foreign jurisdiction is not providing equivalent 
     recognition of, or substituted compliance for, registered 
     entities (as defined in section 1a(41) of the Commodity 
     Exchange Act) domiciled in the United States,
     the Commission may suspend, in whole or in part, a 
     determination made under paragraph (1) or a consideration 
     granted under paragraph (2).
       (d) Petition for Review of Foreign Jurisdiction 
     Practices.--A registered entity, commercial market 
     participant (as defined in section 1a(7) of the Commodity 
     Exchange Act), or Commission registrant (within the meaning 
     of such Act) who petitions the Commission to make or change a 
     determination under subsection (c)(1) or (c)(3) of this 
     section shall be entitled to expedited consideration of the 
     petition. A petition shall include any evidence or other 
     supporting materials to justify why the petitioner believes 
     the Commission should make or change the determination. 
     Petitions under this section shall be considered by the 
     Commission any time following the enactment of this Act. 
     Within 180 days after receipt of a petition for a rulemaking 
     under this section, the Commission shall take final action on 
     the petition. Within 90 days after receipt of a petition to 
     issue an order or change an order issued under this section, 
     the Commission shall take final action on the petition.
       (e) Report to Congress.--If the Commission makes a 
     determination described in this section through an order, the 
     Commission shall articulate the basis for the determination 
     in a written report published in the Federal Register and 
     transmitted to the Committee on Agriculture of the House of 
     Representatives and Committee on Agriculture, Nutrition, and 
     Forestry of the Senate within 15 days of the determination. 
     The determination shall not be effective until 15 days after 
     the committees receive the report.
       (f) Definitions.--As used in this Act and for purposes of 
     the rules issued pursuant to this Act, the following 
     definitions apply:
       (1) U.S. person.--The term ``U.S. person''--
       (A) means--
       (i) any natural person resident in the United States;
       (ii) any partnership, corporation, trust, or other legal 
     person organized or incorporated under the laws of the United 
     States or having its principal place of business in the 
     United States;
       (iii) any account (whether discretionary or non-
     discretionary) of a U.S. person; and
       (iv) any other person as the Commission may further define 
     to more effectively carry out the purposes of this section; 
     and
       (B) does not include the International Monetary Fund, the 
     International Bank for Reconstruction and Development, the 
     Inter-American Development Bank, the Asian Development Bank, 
     the African Development Bank, the United Nations, their 
     agencies or pension plans, or any other similar international 
     organizations or their agencies or pension plans.
       (2) United states swaps requirements.--The term ``United 
     States swaps requirements'' means the provisions relating to 
     swaps contained in the Commodity Exchange Act (7 U.S.C. 1a et 
     seq.) that were added by title VII of the Dodd-Frank Wall 
     Street Reform and Consumer Protection Act (15 U.S.C. 8301 et 
     seq.) and any rules or regulations prescribed by the 
     Commodity Futures Trading Commission pursuant to such 
     provisions.
       (3) Foreign jurisdiction.--The term ``foreign 
     jurisdiction'' means any national or supranational political 
     entity with common rules governing swaps transactions.
       (4) Swaps regulatory requirements.--The term ``swaps 
     regulatory requirements'' means any provisions of law, and 
     any rules or regulations pursuant to the provisions, 
     governing swaps transactions or the counterparties to swaps 
     transactions.
       (g) Conforming Amendment.--Section 4(c)(1)(A) of the 
     Commodity Exchange Act (7 U.S.C. 6(c)(1)(A)) is amended by 
     inserting ``or except as necessary to effectuate the purposes 
     of the Commodity End-User Relief Act,'' after ``to grant 
     exemptions,''.

     SEC. 315. EXEMPTION OF QUALIFIED CHARITABLE ORGANIZATIONS 
                   FROM DESIGNATION AND REGULATION AS COMMODITY 
                   POOL OPERATORS.

       (a) Exclusion From Definition of Commodity Pool.--Section 
     1a(10) of the Commodity

[[Page H3946]]

     Exchange Act (7 U.S.C. 1a(10)) is amended by adding at the 
     end the following:
       ``(C) Exclusion.--The term `commodity pool' shall not 
     include any investment trust, syndicate, or similar form of 
     enterprise excluded from the definition of `investment 
     company' pursuant to sections 3(c)(10) or 3(c)(14) of the 
     Investment Company Act of 1940.''.
       (b) Inapplicability of Prohibition on Use of 
     Instrumentalities of Interstate Commerce by Unregistered 
     Commodity Trading Advisor.--Section 4m of such Act (7 U.S.C. 
     6m) is amended--
       (1) in paragraph (1), in the 2nd sentence, by inserting ``: 
     Provided further, That the provisions of this section shall 
     not apply to any commodity trading advisor that is: (A) a 
     charitable organization, as defined in section 3(c)(10)(D) of 
     the Investment Company Act of 1940, or a trustee, director, 
     officer, employee, or volunteer of such a charitable 
     organization acting within the scope of the employment or 
     duties of the person with the organization, whose trading 
     advice is provided only to, or with respect to, 1 or more of 
     the following: (i) any such charitable organization, or (ii) 
     an investment trust, syndicate or similar form of enterprise 
     excluded from the definition of `investment company' pursuant 
     to section 3(c)(10) of the Investment Company Act of 1940; or 
     (B) any plan, company, or account described in section 
     3(c)(14) of the Investment Company Act of 1940, any person or 
     entity who establishes or maintains such a plan, company, or 
     account, or any trustee, director, officer, employee, or 
     volunteer for any of the foregoing plans, persons, or 
     entities acting within the scope of the employment or duties 
     of the person with the organization, whose trading advice is 
     provided only to, or with respect to, any investment trust, 
     syndicate, or similar form of enterprise excluded from the 
     definition of `investment company' pursuant to section 
     3(c)(14) of the Investment Company Act of 1940'' before the 
     period; and
       (2) by adding at the end the following:
       ``(4) Disclosure Concerning Excluded Charitable 
     Organizations.--The operator of or advisor to any investment 
     trust, syndicate, or similar form of enterprise excluded from 
     the definition of `commodity pool' by reason of section 
     1a(10)(C) of this Act pursuant to section 3(c)(10) of the 
     Investment Company Act of 1940 shall provide disclosure in 
     accordance with section 7(e) of the Investment Company Act of 
     1940.''.

     SEC. 316. SMALL BANK HOLDING COMPANY CLEARING EXEMPTION.

       Section 2(h)(7)(C) of the Commodity Exchange Act (7 U.S.C. 
     2(h)(7)(C)) is amended by adding at the end the following:
       ``(iv) Holding companies.--A determination made by the 
     Commission under clause (ii) shall, with respect to small 
     banks and savings associations, also apply to their 
     respective bank holding company (as defined in section 2 of 
     the Bank Holding Company Act of 1956), or savings and loan 
     holding company (as defined in section 10 of the Home Owners' 
     Loan Act of 1933)), if the total consolidated assets of the 
     holding company are no greater than the asset threshold set 
     by the Commission in determining small bank and savings 
     association eligibility under clause (ii).''.

     SEC. 317. CORE PRINCIPLE CERTAINTY.

       Section 5h(f) of the Commodity Exchange Act (7 U.S.C. 7b-
     3(f)) is amended--
       (1) in paragraph (1)(B), by inserting ``except as described 
     in this subsection,'' after ``Commission by rule or 
     regulation'';
       (2) in paragraph (2), by amending subparagraph (D) to read 
     as follows:
       ``(D) have reasonable discretion in establishing and 
     enforcing its rules related to trade practice surveillance, 
     market surveillance, real-time marketing monitoring, and 
     audit trail given that a swap execution facility may offer a 
     trading system or platform to execute or trade swaps through 
     any means of interstate commerce. A swap execution facility 
     shall be responsible for monitoring trading in swaps only on 
     its own facility.'';
       (3) in paragraph (4)(B), by adding at the end the 
     following: ``A swap execution facility shall be responsible 
     for monitoring trading in swaps only on its own facility.'';
       (4) in paragraph (6)(B)--
       (A) by striking ``shall--'' and all that follows through 
     ``compliance with the'' and insert ``shall monitor the 
     trading activity on its facility for compliance with any'';
       (B) by striking ``or through''; and
       (C) by adding at the end the following: ``A swap execution 
     facility shall be responsible for monitoring positions only 
     on its own facility.'';
       (5) in paragraph (8), by striking ``to liquidate'' and all 
     that follows and inserting ``to suspend or curtail trading in 
     a swap on its own facility.'';
       (6) in paragraph (13)(B), by striking ``1-year period, as 
     calculated on a rolling basis'' and inserting ``90-day 
     period, as calculated on a rolling basis, or conduct an 
     orderly wind-down of its operations, whichever is greater''; 
     and
       (7) in paragraph (15)--
       (A) in subparagraph (A), by adding at the end the 
     following: ``The individual may also perform other 
     responsibilities for the swap execution facility.'';
       (B) in subparagraph (B)--
       (i) in clause (i), by inserting ``, a committee of the 
     board,'' after ``directly to the board'';
       (ii) by striking clauses (iii) through (v) and inserting 
     the following:
       ``(iii) establish and administer policies and procedures 
     that are reasonably designed to resolve any conflicts of 
     interest that may arise;
       ``(iv) establish and administer policies and procedures 
     that reasonably ensure compliance with this Act and the rules 
     and regulations issued under this Act, including rules 
     prescribed by the Commission pursuant to this section; and''; 
     and
       (iii) by redesignating clause (vi) as clause (v);
       (C) in subparagraph (C), by striking ``(B)(vi)'' and 
     inserting ``(B)(v)''; and
       (D) in subparagraph (D)--
       (i) in clause (i)--

       (I) by striking ``In accordance with rules prescribed by 
     the Commission, the'' and inserting ``The''; and
       (II) by striking ``and sign''; and

       (ii) in clause (ii)--

       (I) in the matter preceding subclause (I), by inserting 
     ``or senior officer'' after ``officer'';
       (II) by amending subclause (I) to read as follows:
       ``(I) submit each report described in clause (i) to the 
     Commission; and''; and
       (III) in subclause (II), by inserting ``materially'' before 
     ``accurate''.

     SEC. 318. TREATMENT OF FEDERAL HOME LOAN BANK PRODUCTS.

       (a) Section 1a(2) of the Commodity Exchange Act (7 U.S.C. 
     1a(2)) is amended--
       (1) in subparagraph (B), by striking ``and'';
       (2) in subparagraph (C), by striking the period and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(D) is the Federal Housing Finance Agency for any Federal 
     Home Loan Bank (as defined in section 2 of the Federal Home 
     Loan Bank Act).''.
       (b) Section 402(a) of the Legal Certainty for Bank Products 
     Act of 2000 (7 U.S.C. 27(a)) is amended--
       (1) by striking ``or'' at the end of paragraph (6);
       (2) by striking the period at the end of paragraph (7) and 
     inserting ``; or''; and
       (3) by adding at the end the following:
       ``(8) any Federal Home Loan Bank (as defined in section 2 
     of the Federal Home Loan Bank Act).''.

     SEC. 319. TREATMENT OF CERTAIN FUNDS.

       (a) Amendment to the Definition of Commodity Pool 
     Operator.--Section 1a(11) of the Commodity Exchange Act (7 
     U.S.C. 1a(11)) is amended by adding at the end the following:
       ``(C)(i) The term `commodity pool operator' does not 
     include a person who serves as an investment adviser to an 
     investment company registered pursuant to section 8 of the 
     Investment Company Act of 1940 or a subsidiary of such a 
     company, if the investment company or subsidiary invests, 
     reinvests, owns, holds, or trades in commodity interests 
     limited to only financial commodity interests.
       ``(ii) For purposes of this subparagraph only, the term 
     `financial commodity interest' means a futures contract, an 
     option on a futures contract, or a swap, involving a 
     commodity that is not an exempt commodity or an agricultural 
     commodity, including any index of financial commodity 
     interests, whether cash settled or involving physical 
     delivery.
       ``(iii) For purposes of this subparagraph only, the term 
     `commodity' does not include a security issued by a real 
     estate investment trust, business development company, or 
     issuer of asset-backed securities, including any index of 
     such securities.''.
       (b) Amendment to the Definition of Commodity Trading 
     Advisor.--Section 1a(12) of such Act (7 U.S.C. 1a(12)) is 
     amended by adding at the end the following:
       ``(E) The term `commodity trading advisor' does not include 
     a person who serves as an investment adviser to an investment 
     company registered pursuant to section 8 of the Investment 
     Company Act of 1940 or a subsidiary of such a company, if the 
     commodity trading advice relates only to a financial 
     commodity interest, as defined in paragraph (11)(C)(ii) of 
     this section. For purposes of this subparagraph only, the 
     term `commodity' does not include a security issued by a real 
     estate investment trust, business development company, or 
     issuer of asset-backed securities, including any index of 
     such securities.''.

                    TITLE IV--TECHNICAL CORRECTIONS

     SEC. 401. CORRECTION OF REFERENCES.

       (a) Section 2(h)(8)(A)(ii) of the Commodity Exchange Act (7 
     U.S.C. 2(h)(8)(A)(ii)) is amended by striking ``5h(f) of this 
     Act'' and inserting ``5h(g)''.
       (b) Section 5c(c)(5)(C)(i) of such Act (7 U.S.C. 7a-
     2(c)(5)(C)(i)) is amended by striking ``1a(2)(i))'' and 
     inserting ``1a(19)(i))''.
       (c) Section 23(f) of such Act (7 U.S.C. 26(f)) is amended 
     by striking ``section 7064'' and inserting ``section 706''.

     SEC. 402. ELIMINATION OF OBSOLETE REFERENCES TO DEALER 
                   OPTIONS.

       (a) In General.--Section 4c of the Commodity Exchange Act 
     (7 U.S.C. 6c) is amended by striking subsections (d) and (e) 
     and redesignating subsections (f) and (g) as subsections (d) 
     and (e), respectively.
       (b) Conforming Amendments.--
       (1) Section 2(d) of such Act (7 U.S.C. 2(d)) is amended by 
     striking ``(g) of'' and inserting ``(e) of''.
       (2) Section 4f(a)(4)(A)(i) of such Act (7 U.S.C. 
     6f(a)(4)(A)(i)) is amended by striking ``(d), (e), and (g)'' 
     and inserting ``and (e)''.
       (3) Section 4k(5)(A) of such Act (7 U.S.C. 6k(5)(A)) is 
     amended by striking ``(d), (e), and (g)'' and inserting ``and 
     (e)''.
       (4) Section 5f(b)(1)(A) of such Act (7 U.S.C. 7b-
     1(b)(1)(A)) is amended by striking ``, (e) and (g)'' and 
     inserting ``and (e)''.
       (5) Section 9(a)(2) of such Act (7 U.S.C. 13(a)(2)) is 
     amended by striking ``through (e)'' and inserting ``and 
     (c)''.

     SEC. 403. UPDATED TRADE DATA PUBLICATION REQUIREMENT.

       Section 4g(e) of the Commodity Exchange Act (7 U.S.C. 
     6g(e)) is amended by striking ``exchange'' and inserting 
     ``each designated contract market and swap execution 
     facility''.

     SEC. 404. FLEXIBILITY FOR REGISTERED ENTITIES.

       Section 5c(b) of the Commodity Exchange Act (7 U.S.C. 7a-
     2(b)) is amended by striking ``contract market, derivatives 
     transaction execution

[[Page H3947]]

     facility, or electronic trading facility'' each place it 
     appears and inserting ``registered entity''.

     SEC. 405. ELIMINATION OF OBSOLETE REFERENCES TO ELECTRONIC 
                   TRADING FACILITIES.

       (a) Section 1a(18)(A)(x) of the Commodity Exchange Act (7 
     U.S.C. 1a(18)(A)(x)) is amended by striking ``(other than an 
     electronic trading facility with respect to a significant 
     price discovery contract)''.
       (b) Section 1a(40) of such Act (7 U.S.C. 1a(40)) is 
     amended--
       (1) by adding ``and'' at the end of subparagraph (D); and
       (2) by striking all that follows ``section 21'' and 
     inserting a period.
       (c) Section 4a(e) of such Act (7 U.S.C. 6a(e)) is amended--
       (1) in the 1st sentence--
       (A) by striking ``or by any electronic trading facility'';
       (B) by striking ``or on an electronic trading facility''; 
     and
       (C) by striking ``or electronic trading facility'' each 
     place it appears; and
       (2) in the 2nd sentence, by striking ``or electronic 
     trading facility with respect to a significant price 
     discovery contract''.
       (d) Section 4g(a) of such Act (7 U.S.C. 6g(a)) is amended 
     by striking ``any significant price discovery contract traded 
     or executed on an electronic trading facility or''.
       (e) Section 4i(a) of such Act (7 U.S.C. 6i(a)) is amended--
       (1) by striking ``, or any significant price discovery 
     contract traded or executed on an electronic trading facility 
     or any agreement, contract, or transaction that is treated by 
     a derivatives clearing organization, whether registered or 
     not registered, as fungible with a significant price 
     discovery contract''; and
       (2) by striking ``or electronic trading facility''
       (f) Section 6(b) of such Act (7 U.S.C. 8(b)) is amended by 
     striking ``or electronic trading facility'' each place it 
     appears.
       (g) Section 12(e)(2) of such Act (7 U.S.C. 16(e)(2)) is 
     amended by striking ``in the case of--'' and all that follows 
     and inserting ``in the case of an agreement, contract, or 
     transaction that is excluded from this Act under section 2(c) 
     or 2(f) of this Act or title IV of the Commodity Futures 
     Modernization Act of 2000, or exempted under section 4(c) of 
     this Act (regardless of whether any such agreement, contract, 
     or transaction is otherwise subject to this Act).''.

     SEC. 406. ELIMINATION OF OBSOLETE REFERENCE TO ALTERNATIVE 
                   SWAP EXECUTION FACILITIES.

       Section 5h(h) of the Commodity Exchange Act (7 U.S.C. 7b-
     3(h)) is amended by striking ``alternative'' before ``swap''.

     SEC. 407. ELIMINATION OF REDUNDANT REFERENCES TO TYPES OF 
                   REGISTERED ENTITIES.

       Section 6b of the Commodity Exchange Act (7 U.S.C. 13a) is 
     amended in the 1st sentence by striking ``as set forth in 
     sections 5 through 5c''.

     SEC. 408. CLARIFICATION OF COMMISSION AUTHORITY OVER SWAPS 
                   TRADING.

       Section 8a of the Commodity Exchange Act (7 U.S.C. 12a) is 
     amended--
       (1) in paragraph (7)--
       (A) by inserting ``the protection of swaps traders and to 
     assure fair dealing in swaps, for'' after ``appropriate 
     for'';
       (B) in subparagraph (A), by inserting ``swaps or'' after 
     ``conditions in''; and
       (C) in subparagraph (B), by inserting ``or swaps'' after 
     ``future delivery''; and
       (2) in paragraph (9)--
       (A) by inserting ``swap or'' after ``or liquidation of 
     any''; and
       (B) by inserting ``swap or'' after ``margin levels on 
     any''.

     SEC. 409. ELIMINATION OF OBSOLETE REFERENCE TO THE COMMODITY 
                   EXCHANGE COMMISSION.

       Section 13(c) of the Commodity Exchange Act (7 U.S.C. 
     13c(c)) is amended by striking ``or the Commission''.

     SEC. 410. ELIMINATION OF OBSOLETE REFERENCES TO DERIVATIVE 
                   TRANSACTION EXECUTION FACILITIES.

       (a) Section 1a(12)(B)(vi) of the Commodity Exchange Act (7 
     U.S.C. 1a(12)(B)(vi)) is amended by striking ``derivatives 
     transaction execution facility'' and inserting ``swap 
     execution facility''.
       (b) Section 1a(34) of such Act (7 U.S.C. 1a(34)) is amended 
     by striking ``or derivatives transaction execution facility'' 
     each place it appears.
       (c) Section 1a(35)(B)(iii)(I) of such Act (7 U.S.C. 
     1a(35)(B)(iii)(I)) is amended by striking ``or registered 
     derivatives transaction execution facility''.
       (d) Section 2(a)(1)(C)(ii) of such Act (7 U.S.C. 
     2(a)(1)(C)(ii)) is amended--
       (1) by striking ``, or register a derivatives transaction 
     execution facility that trades or executes,'';
       (2) by striking ``, and no derivatives transaction 
     execution facility shall trade or execute such contracts of 
     sale (or options on such contracts) for future delivery''; 
     and
       (3) by striking ``or the derivatives transaction execution 
     facility,''.
       (e) Section 2(a)(1)(C)(v)(I) of such Act (7 U.S.C. 
     2(a)(1)(C)(v)(I)) is amended by striking ``, or any 
     derivatives transaction execution facility on which such 
     contract or option is traded,''.
       (f) Section 2(a)(1)(C)(v)(II) of such Act (7 U.S.C. 
     2(a)(1)(C)(v)(II)) is amended by striking ``or derivatives 
     transaction execution facility'' each place it appears.
       (g) Section 2(a)(1)(C)(v)(V) of such Act (7 U.S.C. 
     2(a)(1)(C)(v)(V)) is amended by striking ``or registered 
     derivatives transaction execution facility''.
       (h) Section 2(a)(1)(D)(i) of such Act (7 U.S.C. 
     2(a)(1)(D)(i)) is amended in the matter preceding subclause 
     (I)--
       (1) by striking ``in, or register a derivatives transaction 
     execution facility''; and
       (2) by striking ``, or registered as a derivatives 
     transaction execution facility for,''.
       (i) Section 2(a)(1)(D)(i)(IV) of such Act (7 U.S.C. 
     2(a)(1)(D)(i)(IV)) is amended by striking ``registered 
     derivatives transaction execution facility,'' each place it 
     appears.
       (j) Section 2(a)(1)(D)(ii)(I) of such Act (7 U.S.C. 
     2(a)(1)(D)(ii)(I)) is amended to read as follows:
       ``(I) the transaction is conducted on or subject to the 
     rules of a board of trade that has been designated by the 
     Commission as a contract market in such security futures 
     product; or''.
       (k) Section 2(a)(1)(D)(ii)(II) of such Act (7 U.S.C. 
     2(a)(1)(D)(ii)(II)) is amended by striking ``or registered 
     derivatives transaction execution facility''.
       (l) Section 2(a)(1)(D)(ii)(III) of such Act (7 U.S.C. 
     2(a)(1)(D)(ii)(III)) is amended by striking ``or registered 
     derivatives transaction execution facility member''.
       (m) Section 2(a)(9)(B)(ii) of such Act (7 U.S.C. 
     2(a)(9)(B)(ii)) is amended--
       (1) by striking ``or registration'' each place it appears;
       (2) by striking ``or derivatives transaction execution 
     facility'' each place it appears;
       (3) by striking ``or register'';
       (4) by striking ``registering,'';
       (5) by striking ``or registering,'' each place it appears; 
     and
       (6) by striking ``registration,''.
       (n) Section 2(c)(2) of such Act (7 U.S.C. 2(c)(2)) is 
     amended by striking ``or a derivatives transaction execution 
     facility'' each place it appears.
       (o) Section 4(a)(1) of such Act (7 U.S.C. 6(a)(1)) is 
     amended by striking ``or derivatives transaction execution 
     facility'' each place it appears.
       (p) Section 4(c)(1) of such Act (7 U.S.C. 6(c)(1)) is 
     amended--
       (1) by striking ``or registered'' after ``designated''; and
       (2) by striking ``or derivative transaction execution 
     facility''.
       (q) Section 4a(a)(1) of such Act (7 U.S.C. 6a(a)(1)) is 
     amended by striking ``or derivatives transaction execution 
     facilities'' each place it appears.
       (r) Section 4a(e) of such Act (7 U.S.C. 6a(e)) is amended--
       (1) by striking ``, derivatives transaction execution 
     facility,'' each place it appears; and
       (2) by striking ``or derivatives transaction execution 
     facility''.
       (s) Section 4c(g) of such Act (7 U.S.C. 6c(g)) is amended 
     by striking ``or derivatives transaction execution facility'' 
     each place it appears.
       (t) Section 4d of such Act (7 U.S.C. 6d) is amended by 
     striking ``or derivatives transaction execution facility'' 
     each place it appears.
       (u) Section 4e of such Act (7 U.S.C. 6e) is amended by 
     striking ``or derivatives transaction execution facility''.
       (v) Section 4f(b) of such Act (7 U.S.C. 6f(b)) is amended 
     by striking ``or derivatives transaction execution facility'' 
     each place it appears.
       (w) Section 4i of such Act (7 U.S.C. 6i) is amended by 
     striking ``or derivatives transaction execution facility''.
       (x) Section 4j(a) of such Act (7 U.S.C. 6j(a)) is amended 
     by striking ``and registered derivatives transaction 
     execution facility''.
       (y) Section 4p(a) of such Act (7 U.S.C. 6p(a)) is amended 
     by striking ``, or derivatives transaction execution 
     facilities''.
       (z) Section 4p(b) of such Act (7 U.S.C. 6p(b)) is amended 
     by striking ``derivatives transaction execution facility,''.
       (aa) Section 5c(f) of such Act (7 U.S.C. 7a-2(f)) is 
     amended by striking ``and registered derivatives transaction 
     execution facility''.
       (bb) Section 5c(f)(1) of such Act (7 U.S.C. 7a-2(f)(1)) is 
     amended by striking ``or registered derivatives transaction 
     execution facility''.
       (cc) Section 6 of such Act (7 U.S.C. 8) is amended--
       (1) by striking ``or registered'';
       (2) by striking ``or derivatives transaction execution 
     facility'' each place it appears; and
       (3) by striking ``or registration'' each place it appears.
       (dd) Section 6a(a) of such Act (7 U.S.C. 10a(a)) is 
     amended--
       (1) by striking ``or registered'';
       (2) by striking ``or a derivatives transaction execution 
     facility''; and
       (3) by inserting ``shall'' before ``exclude''.
       (ee) Section 6a(b) of such Act (7 U.S.C. 10a(b)) is 
     amended--
       (1) by striking ``or registered''; and
       (2) by striking ``or a derivatives transaction execution 
     facility''.
       (ff) Section 6d(1) of such Act (7 U.S.C. 13a-2(1)) is 
     amended by striking ``derivatives transaction execution 
     facility,''.

     SEC. 411. ELIMINATION OF OBSOLETE REFERENCES TO EXEMPT BOARDS 
                   OF TRADE.

       (a) Section 1a(18)(A)(x) of the Commodity Exchange Act (7 
     U.S.C. 1a(18)(A)(x)) is amended by striking ``or an exempt 
     board of trade''.
       (b) Section 12(e)(1)(B)(i) of such Act (7 U.S.C. 
     16(e)(1)(B)(i)) is amended by striking ``or exempt board of 
     trade''.

     SEC. 412. ELIMINATION OF REPORT DUE IN 1986.

       Section 26 of the Futures Trading Act of 1978 (7 U.S.C. 
     16a) is amended by striking subsection (b) and redesignating 
     subsection (c) as subsection (b).

     SEC. 413. COMPLIANCE REPORT FLEXIBILITY.

       Section 4s(k)(3)(B) of the Commodity Exchange Act (7 U.S.C. 
     6s(k)(3)(B)) is amended to read as follows:
       ``(B) Requirements.--A compliance report under subparagraph 
     (A) shall--
       ``(i) include a certification that, under penalty of law, 
     the compliance report is materially accurate and complete; 
     and
       ``(ii) be furnished at such time as the Commission 
     determines by rule, regulation, or order, to be 
     appropriate.''.

[[Page H3948]]

     SEC. 414. MISCELLANEOUS CORRECTIONS.

       (a) Section 1a(12)(A)(i)(II) of the Commodity Exchange Act 
     (7 U.S.C. 1a(12)(A)(i)(II)) is amended by adding at the end a 
     semicolon.
       (b) Section 2(a)(1)(C)(ii)(III) of such Act (7 U.S.C. 
     2(a)(1)(C)(ii)(III)) is amended by moving the provision 2 ems 
     to the right.
       (c) Section 2(a)(1)(C)(iii) of such Act (7 U.S.C. 
     2(a)(1)(C)(iii)) is amended by moving the provision 2 ems to 
     the right.
       (d) Section 2(a)(1)(C)(iv) of such Act (7 U.S.C. 
     2(a)(1)(C)(iv)) is amended by striking ``under or'' and 
     inserting ``under''.
       (e) Section 2(a)(1)(C)(v) of such Act (7 U.S.C. 
     2(a)(1)(C)(v)) is amended by moving the provision 2 ems to 
     the right.
       (f) Section 2(a)(1)(C)(v)(VI) of such Act (7 U.S.C. 
     2(a)(1)(C)(v)(VI)) is amended by striking ``III'' and 
     inserting ``(III)''.
       (g) Section 2(c)(1) of such Act (7 U.S.C. 2(c)(1)) is 
     amended by striking the 2nd comma.
       (h) Section 4(c)(3)(H) of such Act (7 U.S.C. 6(c)(3)(H)) is 
     amended by striking ``state'' and inserting ``State''.
       (i) Section 4c(c) of such Act (7 U.S.C. 6c(c)) is amended 
     to read as follows:
       ``(c) The Commission shall issue regulations to continue to 
     permit the trading of options on contract markets under such 
     terms and conditions that the Commission from time to time 
     may prescribe.''.
       (j) Section 4d(b) of such Act (7 U.S.C. 6d(b)) is amended 
     by striking ``paragraph (2) of this section'' and inserting 
     ``subsection (a)(2)''.
       (k) Section 4f(c)(3)(A) of such Act (7 U.S.C. 6f(c)(3)(A)) 
     is amended by striking the 1st comma.
       (l) Section 4f(c)(4)(A) of such Act (7 U.S.C. 6f(c)(4)(A)) 
     is amended by striking ``in developing'' and inserting ``In 
     developing''.
       (m) Section 4f(c)(4)(B) of such Act (7 U.S.C. 6f(c)(4)(B)) 
     is amended by striking ``1817(a)'' and inserting 
     ``1817(a))''.
       (n) Section 5 of such Act (7 U.S.C. 7) is amended by 
     redesignating subsections (c) through (e) as subsections (b) 
     through (d), respectively.
       (o) Section 5b of such Act (7 U.S.C. 7a-1) is amended by 
     redesignating subsection (k) as subsection (j).
       (p) Section 5f(b)(1) of such Act (7 U.S.C. 7b-1(b)(1)) is 
     amended by striking ``section 5f'' and inserting ``this 
     section''.
       (q) Section 6(a) of such Act (7 U.S.C. 8(a)) is amended by 
     striking ``the the'' and inserting ``the''.
       (r) Section 8a of such Act (7 U.S.C. 12a) is amended in 
     each of paragraphs (1)(E) and (3)(B) by striking 
     ``Investors'' and inserting ``Investor''.
       (s) Section 9(a)(2) of such Act (7 U.S.C. 13(a)(2)) is 
     amended by striking ``subsection 4c'' and inserting ``section 
     4c''.
       (t) Section 12(b)(4) of such Act (7 U.S.C. 16(b)(4)) is 
     amended by moving the provision 2 ems to the left.
       (u) Section 14(a)(2) of such Act (7 U.S.C. 18(a)(2)) is 
     amended by moving the provision 2 ems to the left.
       (v) Section 17(b)(9)(D) of such Act (7 U.S.C. 21(b)(9)(D)) 
     is amended by striking the semicolon and inserting a period.
       (w) Section 17(b)(10)(C)(ii) of such Act (7 U.S.C. 
     21(b)(10)(C)(ii)) is amended by striking ``and'' at the end.
       (x) Section 17(b)(11) of such Act (7 U.S.C. 21(b)(11)) is 
     amended by striking the period and inserting a semicolon.
       (y) Section 17(b)(12) of such Act (7 U.S.C. 21(b)(12)) is 
     amended--
       (1) by striking ``(A)''; and
       (2) by striking the period and inserting ``; and''.
       (z) Section 17(b)(13) of such Act (7 U.S.C. 21(b)(13)) is 
     amended by striking ``A'' and inserting ``a''.
       (aa) Section 17 of such Act (7 U.S.C. 21) is amended by 
     redesignating subsection (q), as added by section 233(5) of 
     Public Law 97-444, and subsection (r) as subsections (r) and 
     (s), respectively.
       (bb) Section 22(b)(3) of such Act (7 U.S.C. 25(b)(3)) is 
     amended by striking ``of registered'' and inserting ``of a 
     registered''.
       (cc) Section 22(b)(4) of such Act (7 U.S.C. 25(b)(4)) is 
     amended by inserting a comma after ``entity''.

  The CHAIR. No amendment to the amendment in the nature of a 
substitute shall be in order except those printed in House Report 114-
136. Each such amendment may be offered only in the order printed in 
the report, by a Member designated in the report, shall be considered 
read, shall be debatable for the time specified in the report equally 
divided and controlled by the proponent and an opponent, shall not be 
subject to amendment, and shall not be subject to a demand for division 
of the question.


                 Amendment No. 1 Offered by Mr. Conaway

  The CHAIR. It is now in order to consider amendment No. 1 printed in 
House Report 114-136.
  Mr. CONAWAY. Mr. Chairman, I have an amendment at the desk.
  The CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Page 3, line 7, strike ``(s)'' and insert ``(t)''.
       Page 4, line 15, strike ``(t)'' and insert ``(u)''.
       Page 6, line 9, strike ``(u)'' and insert ``(v)''.
       Page 6, line 16, strike ``(v)'' and insert ``(w)''.
       Page 7, line 4, strike ``(w)'' and insert ``(x)''.
       Page 12, line 10, strike ``(17)'' and insert ``(16)''.
       Page 13, line 6, strike ``(17)'' and insert ``(16)''.
       Page 14, line 8, strike ``(18)'' and insert ``(17)''.
       Page 30, line 18, strike ``or''.
       Page 33, line 12, strike ``(8)'' and insert ``(7)''.
       Page 33, line 13, strike ``(9)'' and insert ``(8)''.
       Page 38, line 8, strike ``1a(47)(B)(ii)'' and insert 
     ``1a(48)(B)(ii)''.
       Page 38, line 9, after the parenthetical phrase, insert ``, 
     as so redesignated by section 306(b)(1) of this Act,''.
       Page 38, line 21, strike ``1a(49)(D)'' and insert 
     ``1a(50)(D)''.
       Page 38, line 22, after the parenthetical phrase, insert 
     ``, as so redesignated by section 306(b)(1) of this Act,''.
       Page 52, line 15, strike ``1a(10)'' and insert ``1a(11)''.
       Page 52, line 16, after the parenthetical phrase, insert 
     ``, as so redesignated by section 306(b)(1) of this Act,''.
       Page 55, line 13, strike ``subsection,'' and insert 
     ``subsection''.
       Page 56, line 11, insert ``and'' after the semicolon.
       Page 56, strike line 12.
       Page 56, line 13, strike ``(C)'' and insert ``(B)''.
       Page 59, line 16, strike ``1a(11)'' and insert ``1a(12)''.
       Page 59, line 17, after the parenthetical phrase, insert 
     ``, as so redesignated by section 306(b)(1) of this Act,''.
       Page 60, line 18, strike ``1a(12)'' and insert ``1a(13)''.
       Page 60, line 19, after the parenthetical phrase, insert 
     ``, as so redesignated by section 306(b)(1) of this Act,'' 
     after ``(7 U.S.C. 1a(12))''.
       Page 61, line 3, strike ``(11)(C)(ii)'' and insert 
     ``(12)(C)(ii)''.
       Page 62, line 7, strike ``(d),'' and insert ``, (d),''.
       Page 62, line 10, strike ``(d),'' and insert ``, (d),''.
       Page 62, line 13, strike ``(e)'' and insert ``(e),''.
       Page 63, line 9, strike ``1a(18)(A)(x)'' and insert 
     ``1a(19)(A)(x)''.
       Page 63, line 10, after the parenthetical phrase, insert 
     ``, as so redesignated by section 306(b)(1) of this Act,''.
       Page 63, line 13, strike ``1a(40)'' and insert ``1a(41)''.
       Page 63, line 14, after the parenthetical phrase, insert 
     ``, as so redesignated by section 306(b)(1) of this Act,''.
       Page 64, line 10, strike ``4i(a)'' and insert ``4i''.
       Page 64, line 10, strike ``6i(a)'' and insert ``6i''.
       Page 66, line 18, strike ``1a(12)(B)(vi)'' and insert 
     ``1a(13)(B)(vi)''.
       Page 66, line 19, after the parenthetical phrase, insert 
     ``, as so redesignated by section 306(b)(1) of this Act,''.
       Page 66, line 22, strike ``1a(34)'' and insert ``1a(35)''.
       Page 66, line 22, after the parenthetical phrase, insert 
     ``, as so redesignated by section 306(b)(1) of this Act,''.
       Page 67, line 1, strike ``1a(35)(B)(iii)(I)'' and insert 
     ``1a(36)(B)(iii)(I)''.
       Page 67, line 2, after the parenthetical phrase, insert ``, 
     as so redesignated by section 306(b)(1) of this Act,''.
       Page 69, strike lines 6 through 9 and insert the following:
       (4) by striking ``, registering,''; and
       (5) by striking ``registration,''.
       Page 69, line 12, strike ``each place it appears''.
       Page 69, line 20, strike ``derivative'' and insert 
     ``derivatives''.
       Page 69, strike lines 22 through 24 and insert the 
     following:
       (q) Section 4a(a)(1) of such Act (7 U.S.C. 6a(a)(1)) is 
     amended--
       (1) by striking ``or derivatives transaction execution 
     facilities''; and
       (2) by striking ``or derivatives transaction execution 
     facility''.
       Page 70, line 7, strike ``4c(g)'' and insert ``4c(e)''.
       Page 70, line 7, after the parenthetical phrase, insert ``, 
     as so redesignated by section 402(a) of this Act,''.
       Page 71, line 21, strike ``before `exclude'.'' and insert 
     ``before `exclude' the first place it appears.''.
       Page 72, line 8, strike ``1a(18)(A)(x)'' and insert 
     ``1a(19)(A)(x)''.
       Page 72, line 9, after the parenthetical phrase, insert ``, 
     as so redesignated by section 306(b)(1) of this Act,''.
       Page 73, line 5, strike ``1a(12)(A)(i)(II)'' and insert 
     ``1a(13)(A)(i)(II)''.
       Page 73, line 6, after the parenthetical phrase, insert ``, 
     as so redesignated by section 306(b)(1) of this Act,''.
       Page 75, line 7, strike ``(1)(E)'' and insert ``(2)(E)''.
       Page 76, line 6, after the parenthetical phrase, insert ``, 
     as amended by sections 101 through 103 of this Act,''.
       Page 76, beginning on line 8, strike ``subsection (r) as 
     subsections (r) and (s)'' and insert ``subsections (s) 
     through (w) as subsections (r) through (x)''.

  The CHAIR. Pursuant to House Resolution 288, the gentleman from Texas 
(Mr. Conaway) and a Member opposed each will control 5 minutes.
  The Chair recognizes the gentleman from Texas.
  Mr. CONAWAY. Mr. Chairman, this amendment corrects the technical 
errors found by legislative counsel in the

[[Page H3949]]

process of preparing the Ramseyer for the reported bill, including 
section, subsection, and paragraph references, punctuation, and 
pluralization. I urge my colleagues to support this amendment.
  I yield back the balance of my time.
  The CHAIR. The question is on the amendment offered by the gentleman 
from Texas (Mr. Conaway).
  The amendment was agreed to.
  The CHAIR. It is now in order to consider amendment No. 2 printed in 
House Report 114-136.
  It is now in order to consider amendment No. 3 printed in House 
Report 114-136.

                              {time}  1615


                  Amendment No. 4 Offered by Ms. Moore

  The CHAIR. It is now in order to consider amendment No. 4 printed in 
House Report 114-136.
  Ms. MOORE. Mr. Chair, I have an amendment at the desk.
  The CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Page 27, strike line 4 and all that follows through page 
     28, line 2, and insert the following:
       (b) Swap Data Repositories.--Section 21 of such Act (7 
     U.S.C. 24a) is amended--
       (1) in subsection (c)(7)--
       (A) in the matter preceding subparagraph (A), by striking 
     ``all'' and inserting ``swap''; and
       (B) in subparagraph (E)--
       (i) in clause (ii), by striking ``and'' at the end; and
       (ii) by adding at the end the following:
       ``(iv) other foreign authorities; and''; and
       (2) by striking subsection (d) and inserting the following:
       ``(d) Confidentiality Agreement.--Before the swap data 
     repository may share information with any entity described in 
     subsection (c)(7), the swap data repository shall receive a 
     written agreement from each entity stating that the entity 
     shall abide by the confidentiality requirements described in 
     section 8 relating to the information on swap transactions 
     that is provided.''.
       (c) Security-based Swap Data Repositories.--Section 
     13(n)(5) of the Securities Exchange Act of 1934 25 (15 U.S.C. 
     78m(n)(5)) is amended--
       (1) in subparagraph (G)--
       (A) in the matter preceding clause (i), by striking ``all'' 
     and inserting ``security-based swap''; and
       (B) in subclause (v)--
       (i) in subclause (II), by striking ``; and'' and inserting 
     a semicolon;
       (ii) in subclause (III), by striking the period at the end 
     and inserting ``; and''; and
       (iii) by adding at the end the following:

       ``(IV) other foreign authorities.''; and

       (2) by striking subparagraph (H) and inserting the 
     following:
       ``(H) Confidentiality agreement.--Before the security-based 
     swap data repository may share information with any entity 
     described in subparagraph (G), the security-based swap data 
     repository shall receive a written agreement from each entity 
     stating that the entity shall abide by the confidentiality 
     requirements described in section 24 relating to the 
     information on security-based swap transactions that is 
     provided.''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect as if enacted on July 21, 2010.

  The CHAIR. Pursuant to House Resolution 288, the gentlewoman from 
Wisconsin (Ms. Moore) and a Member opposed each will control 5 minutes.
  The Chair recognizes the gentlewoman from Wisconsin.
  Ms. MOORE. Mr. Chair, my amendment is simple. It really seeks to 
harmonize the regulatory regime for both the security- and commodity-
based swaps. I am so pleased to be joined on a bipartisan basis with 
Representatives Rick Crawford, Bill Huizenga, and Sean Patrick Maloney 
in offering this amendment.
  As we all know, Mr. Chairman, the regulation of the swaps market is 
under the jurisdiction of both the Securities and Exchange Commission 
and the Commodity Futures Trading Commission. As such, legislation that 
amends the swap regulation must be addressed in both the securities law 
and the Commodity Exchange Act.
  Mr. Chairman, I have worked with Chairman Hensarling, Ranking Member 
Waters, and the Committee on Financial Services, and we have offered 
the same language to amend the securities law section of a bill. This 
amendment in committee, Mr. Chairman, was adopted by a voice vote.
  This amendment makes the same minor change to the Commodity Exchange 
Act section so that the regulatory regime is the same for both 
security- and commodity-based swaps.
  This section of H.R. 2289 mirrors legislation, H.R. 1847, sponsored 
by Representative Crawford and has enjoyed broad bipartisan support and 
passed both the Committee on Financial Services and Committee on 
Agriculture without controversy and with the support and blessing of 
the SEC.
  So why the amendment? Foreign regulators and some industry 
participants reached out to the SEC seeking to tighten the language to 
narrow the requirement to share data to clarify that swap data 
repositories are only required to share data related to the swap trade.
  The amendment will in no way weaken swap regulation or inhibit the 
aggregation of swap data; rather, the amendment will make a narrow 
modification to protect market participant information. This change is 
supported by both industry and the SEC.
  This bill has global impact on swap participants and regulators, so I 
think it is important to get it right. I applaud the SEC for working 
with industry to refine the bill, and I want to thank the chairman and 
ranking members of both the Committee on Financial Services and the 
Committee on Agriculture for working with me on this amendment and to 
the sponsor and cosponsors of this legislation for also working with me 
for their support on this amendment.
  I do have some concerns about the underlying bill. The cost-benefit 
analysis, I think, will hamper the regulatory ability of the CFTC, but 
I do urge the adoption of this amendment.
  I reserve the balance of my time.
  Mr. CRAWFORD. Mr. Chairman, I claim time in opposition, although I do 
not oppose the amendment.
  The CHAIR. Without objection, the gentleman from Arkansas is 
recognized for 5 minutes.
  There was no objection.
  Mr. CRAWFORD. Mr. Chair, I would like to thank the cosponsors of this 
amendment. I would like to thank the gentlewoman from Wisconsin for 
introducing the amendment and the cosponsors--Ms. Moore, Mr. Huizenga, 
Mr. Maloney--for joining me in efforts to help bring transparency to 
the global swap markets.
  While I may not agree with every position in the Dodd-Frank law, 
today, I believe we are working towards its bipartisan goal of giving 
regulators the tools they need to improve systemic risk mitigation in 
global financial markets.
  I think everyone agrees that the lack of transparency into the over-
the-counter derivatives market escalated the financial crisis of 2008. 
In order to provide market transparency, the Dodd-Frank law requires 
posttrade reporting to swap data repositories, or SDRs, so that 
regulators and market participants have access to real-time market data 
that will help identify systemic risk in the financial system.
  So far, we have made great strides in reaching this goal, but 
unfortunately, a provision in the law threatens to undermine our 
progress unless we fix it.
  Currently, Dodd-Frank includes a provision requiring a foreign 
regulator to indemnify a U.S.-based SDR for any expenses arising from 
litigation relating to a request for market data. Although well 
intentioned, the effect has been a reluctance of foreign regulators to 
comply, which threatens to fragment global data on swap markets and 
making it harder for regulators to see a complete picture of the 
marketplace.
  Without effective coordination between international regulators and 
SDRs, monitoring and mitigating global systemic risk is severely 
limited. H.R. 2289 includes a bipartisan provision that removes the 
indemnification provisions in Dodd-Frank.
  This provision received broad bipartisan support when it came to the 
floor as a stand-alone last year, passing the House by a vote of 420-2. 
Additionally, both the CFTC and the SEC support the fix.
  This amendment makes a small technical change to make clear that only 
swap data can be shared with foreign regulators. It will ensure that 
regulators will have access to a global set of swap market data, which 
is essential to maintaining the highest degree of market transparency 
and systemic risk mitigation.
  Again, I thank the gentlewoman for introducing the amendment.
  I reserve the balance of my time.
  Ms. MOORE. Mr. Chair, how much time do I have remaining?
  The CHAIR. The gentlewoman from Wisconsin has 2 minutes remaining.

[[Page H3950]]

  Ms. MOORE. Mr. Chair, I yield the balance of my time to the 
gentlewoman from Minnesota (Ms. McCollum).
  Ms. McCOLLUM. Mr. Chair, I thank the gentlewoman from Wisconsin (Ms. 
Moore), and I rise in full support of her amendment, but I join Ranking 
Member Peterson in his opposition of the bill before us.
  Although reauthorization of the Commodity Exchange Act is an 
important endeavor, this legislation rolls back critical Dodd-Frank 
reforms and places unnecessary restrictions on the Commodity Futures 
Trading Commission. The changes proposed in this underlying bill would 
stifle the Commission's capacities to respond to a rapidly changing 
market and would add unneeded layers of government bureaucracy.
  The underlying bill, H.R. 2289, threatens the financial stability of 
hard-working Americans by encouraging the same type of risky behavior 
that led to the recession just 7 years ago.
  I urge my colleagues to join me in supporting the Moore amendment. 
However, I urge my colleagues to use great caution and join me in 
voting against the underlying bill.
  Ms. MOORE. Mr. Chair, I yield back the balance of my time.
  Mr. CRAWFORD. I yield 1 minute to the gentleman from Texas (Mr. 
Conaway), the distinguished chairman of the full committee.
  Mr. CONAWAY. Mr. Chair, I don't oppose the amendment. It does improve 
the bill. We appreciate that. I am looking forward to supporting the 
amendment. I would also expect support on the underlying bill itself.
  We have had a good discussion on why this bill is the right answer, 
bringing the right relief to the right people at the right time and 
does not do the things that have been spoken of in terms of rolling 
back Dodd-Frank.
  This is a very light touch on Dodd-Frank, and it improves a bill that 
I don't think anybody would argue is perfect, but maybe they do argue 
that Dodd-Frank is perfect. I don't think it is perfect, and it does 
need these light touches.
  Mr. CRAWFORD. Mr. Chair, I thank the chairman. I would urge adoption 
of the amendment, as well as support of the underlying bill.
  I yield back the balance of my time.
  The CHAIR. The question is on the amendment offered by the 
gentlewoman from Wisconsin (Ms. Moore).
  The amendment was agreed to.


                Amendment No. 5 Offered by Mrs. Walorski

  The CHAIR. It is now in order to consider amendment No. 5 printed in 
House Report 114-136.
  Mrs. WALORSKI. Mr. Chairman, I have an amendment made in order by the 
rule.
  The CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Page 24, line 2, strike ``and''.
       Page 24, line 4, strike the period and insert ``; and''.
       Page 24, after line 4, insert the following:
       (3) the status of consultations with all United States 
     market participants including major producers and consumers.

  The CHAIR. Pursuant to House Resolution 288, the gentlewoman from 
Indiana (Mrs. Walorski) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentlewoman from Indiana.
  Mrs. WALORSKI. Mr. Chairman, I would like to thank Congressman 
Goodlatte and Chairman Conaway for their continued leadership in 
support of my amendment.
  My amendment today would encourage the CFTC to keep both U.S. 
producers and users of aluminum firmly in mind as they proceed in their 
work. We might take it for granted, but aluminum is part of our 
everyday life. It is used in everything from food packaging to 
commercial buildings and homes to automotive and air transportation.
  In my home State of Indiana, aluminum is home to 10,000 industry jobs 
that account for over $5 billion in economic activity every year. About 
1,800 of those workers are employed at an integrated facility in 
southern Indiana that boasts the largest operating smelter in the 
United States and is one of eight still in use in the country.
  My amendment would require the CFTC provide this body with an update 
of the status of its consultations with U.S. producers and consumers of 
aluminum. To better protect the thousands of workers in my district and 
businesses and consumers across the country, we must ensure the CFTC is 
operating in a transparent manner where the rules are designed to help 
fair and open price discovery.
  It is imperative that everyone who participates in the physical 
aluminum market have confidence in the system, and my amendment will 
ensure the protection of our workers, businesses, and consumers.
  I ask my colleagues to join me in support of my amendment.
  I reserve the balance of my time.
  The CHAIR. Does any Member claim time in opposition? If not, the 
gentlewoman from Indiana is recognized.
  Mrs. WALORSKI. Mr. Chair, may I inquire how much time I have 
remaining?
  The CHAIR. The gentlewoman from Indiana has 3\1/2\ minutes remaining.
  Mrs. WALORSKI. Mr. Chair, I yield 2 minutes to the gentleman from 
Virginia (Mr. Goodlatte).
  Mr. GOODLATTE. Mr. Chair, I thank the gentlewoman for yielding me the 
time.
  As someone who has worked very hard to ensure that this CFTC 
reauthorization process is transparent for commodity purchasers, users, 
and the markets that facility these transactions, I was pleased to work 
with Mrs. Walorski on her amendment to bring further transparency and 
openness to the issue of aluminum warehousing.
  Her amendment would clarify that the bill's required report on the 
status of any application of metal exchange to register as a foreign 
board of trade should also include the status of consultations with all 
U.S. market participants, including major producers and consumers.
  I applaud her for offering this targeted amendment to improve the 
underlying legislation and help everyone in the aluminum market have 
the best information possible to strengthen aluminum supplies and bring 
the best cost for consumers, helping to create jobs and grow our 
economy.
  I support her amendment.
  Mrs. WALORSKI. Mr. Chair, I yield back the balance of my time.
  The CHAIR. The question is on the amendment offered by the 
gentlewoman from Indiana (Mrs. Walorski).
  The amendment was agreed to.
  Mr. CONAWAY. Mr. Chair, I move that the Committee do now rise.
  The motion was agreed to.
  Accordingly, the Committee rose; and the Speaker pro tempore (Mr. 
LaMalfa) having assumed the chair, Mr. Simpson, Chair of the Committee 
of the Whole House on the state of the Union, reported that that 
Committee, having had under consideration the bill (H.R. 2289) to 
reauthorize the Commodity Futures Trading Commission, to better protect 
futures customers, to provide end-users with market certainty, to make 
basic reforms to ensure transparency and accountability at the 
Commission, to help farmers, ranchers, and end-users manage risks, to 
help keep consumer costs low, and for other purposes, had come to no 
resolution thereon.

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