[House Report 110-859]
[From the U.S. Government Publishing Office]



110th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     110-859

======================================================================

 
   PROVIDING FOR CONSIDERATION OF THE BILL (H.R. 6604) TO AMEND THE 
COMMODITY EXCHANGE ACT TO BRING GREATER TRANSPARENCY AND ACCOUNTABILITY 
              TO COMMODITY MARKETS, AND FOR OTHER PURPOSES

                                _______
                                

 September 17, 2008.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

    Ms. Sutton, from the Committee on Rules, submitted the following

                              R E P O R T

                      [To accompany H. Res. 1449]

    The Committee on Rules, having had under consideration 
House Resolution 1449, by a nonrecord vote, report the same to 
the House with the recommendation that the resolution be 
adopted.

                SUMMARY OF PROVISIONS OF THE RESOLUTION

    The resolution provides for consideration of H.R. 6604, the 
``Commodity Markets Transparency and Accountability Act of 
2008'', under a closed rule. The resolution provides for one 
hour of debate equally divided and controlled by the chairman 
and ranking minority member of the Committee on Agriculture.
    The resolution waives all points of order against 
consideration of the bill except those arising under clause 9 
or 10 of rule XXI. The resolution provides that the amendment 
in the nature of a substitute printed in this report shall be 
considered as adopted and that the bill, as amended, shall be 
considered as read. The resolution waives all points of order 
against the bill, as amended. This waiver does not affect the 
point of order available under clause 9 of rule XXI (regarding 
earmark disclosure). The resolution provides one motion to 
recommit the bill. The resolution permits the Chair, during 
consideration of the bill, to postpone further consideration of 
it to a time designated by the Speaker.

                         EXPLANATION OF WAIVERS

    Although the rule waives all points of order against 
consideration of the bill (except for those arising under 
clause 9 or 10 of rule XXI), and all points of order against 
the bill, as amended, the Committee is not aware of any points 
of order against the bill or its consideration. The waivers are 
prophylactic in nature.

                            COMMITTEE VOTES

    The results of each record vote on an amendment or motion 
to report, together with the names of those voting for and 
against, are printed below:

Rules Committee record vote No. 598

    Date: September 17, 2008.
    Measure: H.R. 6604.
    Motion by: Mr. Hastings (WA).
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment if offered by Rep. Boehner (OH), which 
would add, as a new title at the end of the bill, the text of 
H.R. 6566, the American Energy Act.
    Results: Defeated 1-7.
    Vote by Members: Matsui--Nay; Cardoza--Nay; Welch--Nay; 
Castor--Nay; Arcuri--Nay; Sutton--Nay; Hastings (WA)--Yea; 
Slaughter--Nay.

Rules Committee record vote No. 599

    Date: September 17, 2008.
    Measure: H.R. 6604.
    Motion by: Mr. Hastings (WA).
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment if offered by Rep. Peterson (PA), 
which would add, as a new title at the end of the bill, the 
text of H.R. 6709, the National Conservation, Environment, and 
Energy Independence Act.
    Results: Defeated 1-7.
    Vote by Members: Matsui--Nay; Cardoza--Nay; Welch--Nay; 
Castor--Nay; Arcuri--Nay; Sutton--Nay; Hastings (WA)--Yea; 
Slaughter--Nay.

Rules Committee record vote No. 600

    Date: September 17, 2008.
    Measure: H.R. 6604.
    Motion by: Mr. Hastings (WA).
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment in the nature of a substitute by Rep. 
Moran (KS), #2, which puts into statute recommendations the 
CFTC suggested would benefit from codification in its September 
11, 2007, report titled: ``Staff Report on Commodity Swap 
Dealers & Index Traders with Commission Recommendations.''
    Results: Defeated 1-7.
    Vote by Members: Matsui--Nay; Cardoza--Nay; Welch--Nay; 
Castor--Nay; Arcuri--Nay; Sutton--Nay; Hastings (WA)--Yea; 
Slaughter--Nay.

 SUMMARY OF THE AMENDMENT IN THE NATURE OF A SUBSTITUTE CONSIDERED AS 
                                ADOPTED

    The substitute: brings greater transparency to commodity 
and futures markets; brings improved price discovery and risk 
mitigation functions that will work to benefit producers, 
processors and consumers; toughens position limits on oil and 
other futures markets as a way to prevent potential price 
distortions caused by excessive speculative trading; extends 
Commodity Futures Trading Commission (CFTC) oversight to 
previously exempt over-the-counter markets; and it calls for 
new full-time CFTC staff to improve enforcement, to prevent 
manipulation, and to prosecute fraud.

   TEXT OF THE AMENDMENT IN THE NATURE OF A SUBSTITUTE CONSIDERED AS 
                                ADOPTED

  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Commodity Markets Transparency 
and Accountability Act of 2008''.

SEC. 2. TABLE OF CONTENTS.

  The table of contents of this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Definition of energy commodity.
Sec. 4. Speculative limits and transparency of off-shore trading.
Sec. 5. Disaggregation of index funds and other data in energy and 
          agriculture markets.
Sec. 6. Detailed reporting from index traders and swap dealers.
Sec. 7. Transparency and recordkeeping authorities.
Sec. 8. Trading limits to prevent excessive speculation.
Sec. 9. Modifications to core principles applicable to position limits 
          for contracts in agricultural and energy commodities.
Sec. 10. CFTC Administration.
Sec. 11. Review of prior actions.
Sec. 12. Review of over-the-counter markets.
Sec. 13. Studies; reports.
Sec. 14. Over-the-counter authority.
Sec. 15. Expedited process.

SEC. 3. DEFINITION OF ENERGY COMMODITY.

  (a) Definition of Energy Commodity.--Section 1a of the 
Commodity Exchange Act (7 U.S.C. 1a) is amended--
          (1) by redesignating paragraphs (13) through (34) as 
        paragraphs (14) through (35), respectively; and
          (2) by inserting after paragraph (12) the following:
          ``(13) Energy commodity.--The term `energy commodity' 
        means--
                  ``(A) coal;
                  ``(B) crude oil, gasoline, diesel fuel, jet 
                fuel, heating oil, and propane;
                  ``(C) electricity;
                  ``(D) natural gas; and
                  ``(E) any other substance that is used as a 
                source of energy, as the Commission, in its 
                discretion, deems appropriate.''.
  (b) Conforming Amendments.--
          (1) Section 2(c)(2)(B)(i)(II)(cc) of the Commodity 
        Exchange Act (7 U.S.C. 2(c)(2)(B)(i)(II)(cc)) is 
        amended--
                  (A) in subitem (AA), by striking ``section 
                1a(20)'' and inserting ``section 1a(21)''; and
                  (B) in subitem (BB), by striking ``section 
                1a(20)'' and inserting ``section 1a(21)''.
          (2) Section 13106(b)(1) of the Food, Conservation, 
        and Energy Act of 2008 is amended by striking ``section 
        1a(32)'' and inserting ``section 1a''.
          (3) Section 402 of the Legal Certainty for Bank 
        Products Act of 2000 (7 U.S.C. 27) is amended--
                  (A) in subsection (a)(7), by striking 
                ``section 1a(20)'' and inserting ``section 
                1a''; and
                  (B) in subsection (d)--
                          (i) in paragraph (1)(B), by striking 
                        ``section 1a(33)'' and inserting 
                        ``section 1a''; and
                          (ii) in paragraph (2)(D), by striking 
                        ``section 1a(13)'' and inserting 
                        ``section 1a''.

SEC. 4. SPECULATIVE LIMITS AND TRANSPARENCY OF OFF-SHORE TRADING.

  (a) In General.--Section 4 of the Commodity Exchange Act (7 
U.S.C. 6) is amended by adding at the end the following:
  ``(e) Foreign Boards of Trade.--
          ``(1) In general.--The Commission may not permit a 
        foreign board of trade to provide to the members of the 
        foreign board of trade or other participants located in 
        the United States direct access to the electronic 
        trading and order matching system of the foreign board 
        of trade with respect to an agreement, contract, or 
        transaction in an energy or agricultural commodity that 
        settles against any price (including the daily or final 
        settlement price) of 1 or more contracts listed for 
        trading on a registered entity, unless--
                  ``(A) the foreign board of trade makes public 
                daily trading information regarding the 
                agreement, contract, or transaction that is 
                comparable to the daily trading information 
                published by the registered entity for the 1 or 
                more contracts against which the agreement, 
                contract, or transaction traded on the foreign 
                board of trade settles; and
                  ``(B) the foreign board of trade (or the 
                foreign futures authority that oversees the 
                foreign board of trade)--
                          ``(i) adopts position limits 
                        (including related hedge exemption 
                        provisions) for the agreement, 
                        contract, or transaction that are 
                        comparable, taking into consideration 
                        the relative sizes of the respective 
                        markets, to the position limits 
                        (including related hedge exemption 
                        provisions) adopted by the registered 
                        entity for the 1 or more contracts 
                        against which the agreement, contract, 
                        or transaction traded on the foreign 
                        board of trade settles;
                          ``(ii) has the authority to require 
                        or direct market participants to limit, 
                        reduce, or liquidate any position the 
                        foreign board of trade (or the foreign 
                        futures authority that oversees the 
                        foreign board of trade) determines to 
                        be necessary to prevent or reduce the 
                        threat of price manipulation, excessive 
                        speculation as described in section 4a, 
                        price distortion, or disruption of 
                        delivery or the cash settlement 
                        process;
                          ``(iii) agrees to promptly notify the 
                        Commission of any change regarding--
                                  ``(I) the information that 
                                the foreign board of trade will 
                                make publicly available;
                                  ``(II) the position limits 
                                that the foreign board of trade 
                                or foreign futures authority 
                                will adopt and enforce;
                                  ``(III) the position 
                                reductions required to prevent 
                                manipulation, excessive 
                                speculation as described in 
                                section 4a, price distortion, 
                                or disruption of delivery or 
                                the cash settlement process; 
                                and
                                  ``(IV) any other area of 
                                interest expressed by the 
                                Commission to the foreign board 
                                of trade or foreign futures 
                                authority;
                          ``(iv) provides information to the 
                        Commission regarding large trader 
                        positions in the agreement, contract, 
                        or transaction that is comparable to 
                        the large trader position information 
                        collected by the Commission for the 1 
                        or more contracts against which the 
                        agreement, contract, or transaction 
                        traded on the foreign board of trade 
                        settles; and
                          ``(v) provides the Commission with 
                        information necessary to publish 
                        reports on aggregate trader positions 
                        for the agreement, contract, or 
                        transaction traded on the foreign board 
                        of trade that are comparable to such 
                        reports for 1 or more contracts against 
                        which the agreement, contract, or 
                        transaction traded on the foreign board 
                        of trade settles.
          ``(2) Existing foreign boards of trade.--Paragraph 
        (1) shall not be effective with respect to any 
        agreement, contract, or transaction in an energy 
        commodity executed on a foreign board of trade to which 
        the Commission had granted direct access permission 
        before the date of the enactment of this subsection 
        until the date that is 180 days after such date of 
        enactment.''.
  (b) Liability of Registered Persons Trading on a Foreign 
Board of Trade.--
          (1) Section 4(a) of such Act (7 U.S.C. 6(a)) is 
        amended by inserting ``or by subsection (f)'' after 
        ``Unless exempted by the Commission pursuant to 
        subsection (c)''.
          (2) Section 4 of such Act (7 U.S.C. 6) is further 
        amended by adding at the end the following:
  ``(f) A person registered with the Commission, or exempt from 
registration by the Commission, under this Act may not be found 
to have violated subsection (a) with respect to a transaction 
in, or in connection with, a contract of sale of a commodity 
for future delivery if the person has reason to believe the 
transaction and the contract is made on or subject to the rules 
of a board of trade that is legally organized under the laws of 
a foreign country, authorized to act as a board of trade by a 
foreign futures authority, subject to regulation by the foreign 
futures authority, and has not been determined by the 
Commission to be operating in violation of subsection (a).''.
  (c) Contract Enforcement for Foreign Futures Contracts.--
Section 22(a) of such Act (7 U.S.C. 25(a)) is amended by adding 
at the end the following:
          ``(5) A contract of sale of a commodity for future 
        delivery traded or executed on or through the 
        facilities of a board of trade, exchange, or market 
        located outside the United States for purposes of 
        section 4(a) shall not be void, voidable, or 
        unenforceable, and a party to such a contract shall not 
        be entitled to rescind or recover any payment made with 
        respect to the contract, based on the failure of the 
        foreign board of trade to comply with any provision of 
        this Act.''.

SEC. 5. DISAGGREGATION OF INDEX FUNDS AND OTHER DATA IN ENERGY AND 
                    AGRICULTURE MARKETS.

  Section 4 of the Commodity Exchange Act (7 U.S.C. 6), as 
amended by section 4 of this Act, is amended by adding at the 
end the following:
  ``(g) Disaggregation of Index Funds and Other Data in Energy 
and Agriculture Markets.--Subject to section 8 and beginning 
within 30 days of the issuance of the final rule required by 
section 4(h), the Commission shall disaggregate and make public 
weekly--
          ``(1) the number of positions and total value of 
        index funds and other passive, long-only and short-only 
        positions (as defined by the Commission) in all energy 
        and agricultural markets to the extent such information 
        is available; and
          ``(2) data on speculative positions relative to bona 
        fide physical hedgers in those markets to the extent 
        such information is available.''.

SEC. 6. DETAILED REPORTING FROM INDEX TRADERS AND SWAP DEALERS.

  Section 4 of the Commodity Exchange Act (7 U.S.C. 6), as 
amended by sections 4 and 5 of this Act, is amended by adding 
at the end the following:
  ``(h) Index Traders and Swap Dealers Reporting.--The 
Commission shall issue a proposed rule defining and classifying 
index traders and swap dealers (as those terms are defined by 
the Commission) for purposes of data reporting requirements and 
setting routine detailed reporting requirements for such 
entities in designated contract markets, derivatives 
transaction execution facilities, foreign boards of trade 
subject to section 4(e), and electronic trading facilities with 
respect to significant price discovery contracts with respect 
to exempt and agricultural commodities not later than 60 days 
after the date of the enactment of this subsection, and issue a 
final rule within 120 days after such date of enactment.''.

SEC. 7. TRANSPARENCY AND RECORDKEEPING AUTHORITIES.

  (a) In General.--Section 4g(a) of the Commodity Exchange Act 
(7 U.S.C. 6g(a)) is amended--
          (1) by inserting ``a'' before ``futures commission 
        merchant''; and
          (2) by inserting ``and transactions and positions 
        traded pursuant to subsection (g), (h)(1), or (h)(2) of 
        section 2, or any exemption issued by the Commission by 
        rule, regulation or order,'' after ``United States or 
        elsewhere,''.
  (b) Reports of Deals Equal to or in Excess of Trading 
Limits.--Section 4i of such Act (7 U.S.C. 6i) is amended--
          (1) in the first sentence--
                  (A) by inserting ``(a)'' before ``It shall''; 
                and
                  (B) by inserting ``in the United States or 
                elsewhere, and of transactions and positions in 
                any such commodity entered into pursuant to 
                subsection (g), (h)(1), or (h)(2) of section 2, 
                or any exemption issued by the Commission by 
                rule, regulation or order'' before ``, and of 
                cash or spot''; and
          (2) by striking all that follows the 1st sentence and 
        inserting the following:
  ``(b) With respect to agricultural and energy commodities, 
upon special call by the Commission, any person shall provide 
to the Commission, in a form and manner and within the period 
specified in the special call, books and records of all 
transactions and positions traded on or subject to the rules of 
any board of trade or electronic trading facility in the United 
States or elsewhere, or pursuant to subsection (g), (h)(1), or 
(h)(2) of section 2, or any exemption issued by the Commission 
by rule, regulation, or order, as the Commission may determine 
appropriate to deter and prevent price manipulation or any 
other disruption to market integrity or to diminish, eliminate, 
or prevent excessive speculation as described in section 4a(a).
  ``(c) Such books and records described in subsections (a) and 
(b) shall show complete details concerning all such 
transactions, positions, inventories, and commitments, 
including the names and addresses of all persons having any 
interest therein, shall be kept for a period of 5 years, and 
shall be open at all times to inspection by any representative 
of the Commission or the Department of Justice. For the 
purposes of this section, the futures and cash or spot 
transactions and positions of any person shall include such 
transactions and positions of any persons directly or 
indirectly controlled by the person.''.
  (c) Conforming Amendments.--
          (1) Section 2(g) of such Act (7 U.S.C. 2(g)) is 
        amended--
                  (A) by inserting ``4g(a), 4i,'' before ``5a 
                (to''; and
                  (B) by inserting ``, and the regulations of 
                the Commission pursuant to section 4i(b) 
                requiring reporting in connection with 
                commodity option transactions,'' before ``shall 
                apply''.
          (2) Section 2(h)(2)(A) of such Act (7 U.S.C. 
        2(h)(2)(A)) is amended to read as follows:
                  ``(A) sections 4g(a), 4i, 5b and 12(e)(2)(B), 
                and the regulations of the Commission pursuant 
                to section 4i(b) requiring reporting in 
                connection with commodity option 
                transactions;''.

SEC. 8. TRADING LIMITS TO PREVENT EXCESSIVE SPECULATION.

  Section 4a of the Commodity Exchange Act (7 U.S.C. 6a) is 
amended--
          (1) in subsection (a)--
                  (A) by inserting ``(1)'' after ``(a)''; and
                  (B) by adding after and below the end the 
                following:
  ``(2) In accordance with the standards set forth in paragraph 
(1) of this subsection and consistent with the good faith 
exception cited in subsection (b)(2), with respect to 
agricultural commodities enumerated in section 1a(4) and energy 
commodities, the Commission, within 60 days after the date of 
the enactment of this paragraph, shall by rule, regulation, or 
order establish limits on the amount of positions, other than 
bona fide hedge positions, that may be held by any person with 
respect to contracts of sale for future delivery or with 
respect to options on such contracts or commodities traded on 
or subject to the rules of a contract market or derivatives 
transaction execution facility, or on an electronic trading 
facility as a significant price discovery contract.
  ``(3) In establishing the limits required in paragraph (2), 
the Commission shall set limits--
          ``(A) on the number of positions that may be held by 
        any person for the spot month, each other month, and 
        the aggregate number of positions that may be held by 
        any person for all months;
          ``(B) to the maximum extent practicable, in its 
        discretion--
                  ``(i) to diminish, eliminate, or prevent 
                excessive speculation as described under this 
                section;
                  ``(ii) to deter and prevent market 
                manipulation, squeezes, and corners;
                  ``(iii) to ensure sufficient market liquidity 
                for bona fide hedgers; and
                  ``(iv) to ensure that the price discovery 
                function of the underlying market is not 
                disrupted; and
          ``(C) to the maximum extent practicable, in its 
        discretion, take into account the total number of 
        positions in fungible agreements, contracts, or 
        transactions that a person can hold in agricultural and 
        energy commodities in other markets.
  ``(4)(A) Not later than 150 days after the date of the 
enactment of this paragraph, the Commission shall convene a 
Position Limit Agricultural Advisory Group and a Position Limit 
Energy Group, each group consisting of representatives from--
          ``(i) 7 predominantly commercial short hedgers of the 
        actual physical commodity for future delivery;
          ``(ii) 7 predominantly commercial long hedgers of the 
        actual physical commodity for future delivery;
          ``(iii) 4 non-commercial participants in markets for 
        commodities for future delivery; and
          ``(iv) each designated contract market or derivatives 
        transaction execution facility upon which a contract in 
        the commodity for future delivery is traded, and each 
        electronic trading facility that has a significant 
        price discovery contract in the commodity.
  ``(B) Not later than 60 days after the date on which the 
advisory groups are convened under subparagraph (A), and 
annually thereafter, the advisory groups shall submit to the 
Commission advisory recommendations regarding the position 
limits to be established in paragraph (2) and a recommendation 
as to whether the position limits should be administered 
directly by the Commission, or by the registered entity on 
which the commodity is listed (with enforcement by both the 
registered entity and the Commission).''; and
          (2) in subsection (c)--
                  (A) by inserting ``(1)'' after ``(c)''; and
                  (B) by adding after and below the end the 
                following:
  ``(2) With respect to agricultural and energy commodities, 
for the purposes of contracts of sale for future delivery and 
options on such contracts or commodities, the Commission shall 
define what constitutes a bona fide hedging transaction or 
position as a transaction or position that--
          ``(A)(i) represents a substitute for transactions to 
        be made or positions to be taken at a later time in a 
        physical marketing channel;
          ``(ii) is economically appropriate to the reduction 
        of risks in the conduct and management of a commercial 
        enterprise; and
          ``(iii) arises from the potential change in the value 
        of--
                  ``(I) assets that a person owns, produces, 
                manufactures, processes, or merchandises or 
                anticipates owning, producing, manufacturing, 
                processing, or merchandising;
                  ``(II) liabilities that a person owns or 
                anticipates incurring; or
                  ``(III) services that a person provides, 
                purchases, or anticipates providing or 
                purchasing; or
          ``(B) reduces risks attendant to a position resulting 
        from a transaction that--
                  ``(i) was executed pursuant to subsection 
                (g), (h)(1), or (h)(2) of section 2, or an 
                exemption issued by the Commission by rule, 
                regulation or order; and
                  ``(ii) was executed opposite a counterparty 
                for which the transaction would qualify as a 
                bona fide hedging transaction pursuant to 
                paragraph (2)(A) of this subsection.''.

SEC. 9. MODIFICATIONS TO CORE PRINCIPLES APPLICABLE TO POSITION LIMITS 
                    FOR CONTRACTS IN AGRICULTURAL AND ENERGY 
                    COMMODITIES.

  (a) Contracts Traded on Contract Markets.--Section 5(d)(5) of 
the Commodity Exchange Act (7 U.S.C. 7(d)(5)) is amended by 
striking all that follows ``adopt'' and inserting ``, for 
speculators, position limitations with respect to agricultural 
commodities enumerated in section 1a(4) or energy commodities, 
and position limitations or position accountability with 
respect to other commodities, where necessary and 
appropriate.''.
  (b) Contracts Traded on Derivatives Transaction Execution 
Facilities.--Section 5a(d)(4) of such Act (7 U.S.C. 7a(d)(4)) 
is amended by striking all that follows ``adopt'' and inserting 
``, for speculators, position limitations with respect to 
energy commodities, and position limitations or position 
accountability with respect to other commodities, where 
necessary and appropriate for a contract, agreement or 
transaction with an underlying commodity that has a physically 
deliverable supply.''.
  (c) Significant Price Discovery Contracts.--Section 
2(h)(7)(C)(ii)(IV) of such Act (7 U.S.C. 2(h)(7)(C)(ii)(IV)) is 
amended by striking ``where necessary'' and all that follows 
through ``in significant price discovery contracts'' and 
inserting ``for speculators, position limitations with respect 
to significant price discovery contracts in energy commodities, 
and position limitations or position accountability with 
respect to significant price discovery contracts in other 
commodities''.

SEC. 10. CFTC ADMINISTRATION.

  Section 2(a)(7) of the Commodity Exchange Act (7 U.S.C. 
2(a)(7)) is amended by adding at the end the following:
                  ``(D) Additional employees.--As soon as 
                practicable after the date of the enactment of 
                this subparagraph, subject to appropriations, 
                the Commission shall appoint at least 100 full-
                time employees (in addition to the employees 
                employed by the Commission as of the date of 
                the enactment of this subparagraph)--
                          ``(i) to increase the public 
                        transparency of operations in 
                        agriculture and energy markets;
                          ``(ii) to improve the enforcement of 
                        this Act in those markets; and
                          ``(iii) to carry out such other 
                        duties as are prescribed by the 
                        Commission.''.

SEC. 11. REVIEW OF PRIOR ACTIONS.

  Notwithstanding any other provision of the Commodity Exchange 
Act, the Commodity Futures Trading Commission shall review, as 
appropriate, all regulations, rules, exemptions, exclusions, 
guidance, no action letters, orders, other actions taken by or 
on behalf of the Commission, and any action taken pursuant to 
the Commodity Exchange Act by an exchange, self-regulatory 
organization, or any other registered entity, that are 
currently in effect, to ensure that such prior actions are in 
compliance with the provisions of this Act.

SEC. 12. REVIEW OF OVER-THE-COUNTER MARKETS.

  (a) Study.--The Commodity Futures Trading Commission shall 
conduct a study--
          (1) to determine the efficacy, practicality, and 
        consequences of establishing limits on the amount of 
        positions, other than bona fide hedge positions, that 
        may be held by any person with respect to agreements, 
        contracts, or transactions involving an agricultural or 
        energy commodity, conducted in reliance on sections 
        2(g) and 2(h) of the Commodity Exchange Act and of any 
        exemption issued by the Commission by rule, regulation 
        or order, that are fungible (as defined by the 
        Commission) with agreements, contracts, or transactions 
        traded on or subject to the rules of any board of trade 
        or of any electronic trading facility with respect to a 
        signifcant price discovery contract, as a means to 
        deter and prevent price manipulation or any other 
        disruption to market integrity or to diminish, 
        eliminate, or prevent excessive speculation as 
        described in section 4a of such Act for physical-based 
        agricultural or energy commodities; and
          (2) to determine the efficacy, practicality, and 
        consequences of establishing aggregate position limits 
        for similar agreements, contracts, or transactions for 
        physical-based agricultural or energy commodities 
        traded--
                  (A) on designated contract markets;
                  (B) on derivatives transaction execution 
                facilities; and
                  (C) in reliance on such sections 2(g) and 
                2(h) and of any exemption issued by the 
                Commission by rule, regulation or order.
  (b) Public Hearings.--The Commission shall provide for not 
less than 2 public hearings to take testimony, on the record, 
as part of the fact- gathering process in preparation of the 
report.
  (c) Report and Recommendations.--Not less than 12 months 
after the date of the enactment of this section, the Commission 
shall provide to the Committee on Agriculture of the House of 
Representatives and the Committee on Agriculture, Nutrition, 
and Forestry of the Senate a report that--
          (1) describes the results of the study; and
          (2) provides recommendations on any actions necessary 
        to deter and prevent price manipulation or any other 
        disruption to market integrity or to diminish, 
        eliminate, or prevent excessive speculation as 
        described in section 4a of the Commodity Exchange Act 
        for physical-based commodities, including--
                  (A) any additional statutory authority that 
                the Commission determines to be necessary to 
                implement the recommendations; and
                  (B) a description of the resources that the 
                Commission considers to be necessary to 
                implement the recommendations.

SEC. 13. STUDIES; REPORTS.

  (a) Study Relating to International Regulation of Energy 
Commodity Markets.--
          (1) In general.--The Comptroller General of the 
        United States shall conduct a study of the 
        international regime for regulating the trading of 
        energy commodity futures and derivatives.
          (2) Analysis.--The study shall include an analysis 
        of, at a minimum--
                  (A) key common features and differences among 
                countries in the regulation of energy commodity 
                trading, including with respect to market 
                oversight and enforcement standards and 
                activities;
                  (B) variations among countries with respect 
                to the use of position limits, position 
                accountability levels, or other thresholds to 
                detect and prevent price manipulation, 
                excessive speculation as described in section 
                4a of the Commodity Exchange Act, or other 
                unfair trading practices;
                  (C) variations in practices regarding the 
                differentiation of commercial and noncommercial 
                trading;
                  (D) agreements and practices for sharing 
                market and trading data among futures 
                authorities and between futures authorities and 
                the entities that the futures authorities 
                oversee; and
                  (E) agreements and practices for facilitating 
                international cooperation on market oversight, 
                compliance, and enforcement.
          (3) Report.--Not later than 1 year after the date of 
        the enactment of this Act, the Comptroller General 
        shall submit to the Committee on Agriculture of the 
        House of Representatives and the Committee on 
        Agriculture, Nutrition, and Forestry of the Senate a 
        report that--
                  (A) describes the results of the study;
                  (B) addresses whether there is excessive 
                speculation, and if so, the effects of any such 
                speculation and energy price volatility on 
                energy futures; and
                  (C) provides recommendations to improve 
                openness, transparency, and other necessary 
                elements of a properly functioning market in a 
                manner that protects consumers in the United 
                States.
  (b) Study Relating to Effects of Speculators on Agriculture 
and Energy Futures Markets and Agriculture and Energy Prices.--
          (1) Study.--The Commodity Futures Trading Commission 
        shall conduct a study of the effects of speculators on 
        agriculture and energy futures markets and agriculture 
        and energy prices.
          (2) Analysis.--The study shall include an analysis 
        of, at a minimum--
                  (A) the effect of increased amounts of 
                capital in agriculture and energy futures 
                markets;
                  (B) the impact of the roll-over of positions 
                by index fund traders and swap dealers on 
                agriculture and energy futures markets and 
                agriculture and energy prices; and
                  (C) the extent to which each factor described 
                in subparagraphs (A) and (B) and speculators--
                          (i) affect--
                                  (I) the pricing of 
                                agriculture and energy 
                                commodities; and
                                  (II) risk management 
                                functions; and
                          (ii) contribute to economically 
                        efficient price discovery.
          (3) Report.--Not later than 2 years after the date of 
        the enactment of this Act, the Commodity Futures 
        Trading Commission shall submit to the Committee on 
        Agriculture of the House of Representatives and the 
        Committee on Agriculture, Nutrition, and Forestry of 
        the Senate a report that describes the results of the 
        study.

SEC. 14. OVER-THE-COUNTER AUTHORITY.

  (a) In General.--Section 2 of the Commodity Exchange Act (7 
U.S.C. 2) is amended by adding at the end the following:
  ``(j) Over-the-Counter Authority.--
          ``(1) Within 60 days after the date of the enactment 
        of this subsection, the Commission shall, by rule, 
        regulation, or order, require routine reporting as it 
        deems in its discretion appropriate, on not less than a 
        monthly basis, of agreements, contracts, or 
        transactions, with regard to an agricultural or energy 
        commodity, entered into in reliance on subsection (g), 
        (h)(1), or (h)(2) of section 2, or any exemption issued 
        by the Commission by rule, regulation, or order that 
        are fungible (as defined by the Commission) with 
        agreements, contracts, or transactions traded on or 
        subject to the rules of any board of trade or of any 
        electronic trading facility with respect to a 
        significant price discovery contract.
          ``(2) Notwithstanding subsections (g), (h)(1), and 
        (h)(2) of section 2, and any exemption issued by the 
        Commission by rule, regulation, or order, the 
        Commission shall assess and issue a finding on whether 
        the agreements, contracts, or transactions reported 
        pursuant to paragraph (1), alone or in conjunction with 
        other similar agreements, contracts, or transactions, 
        have the potential to--
                  ``(A) disrupt the liquidity or price 
                discovery function on a registered entity;
                  ``(B) cause a severe market disturbance in 
                the underlying cash or futures market for an 
                agricultural or energy commodity; or
                  ``(C) prevent or otherwise impair the price 
                of a contract listed for trading on a 
                registered entity from reflecting the forces of 
                supply and demand in any market for an 
                agricultural commodity enumerated in section 
                1a(4) or an energy commodity.
          ``(3) If the Commission makes a finding pursuant to 
        paragraph (2) of this subsection, the Commission may, 
        in its discretion, utilize its authority under section 
        8a(9) to impose position limits (including, as 
        appropriate and in its discretion, related hedge 
        exemption provisions for bona fide hedging comparable 
        to bona fide hedge provisions of section 4a(c)(2)) on 
        agreements, contracts, or transactions involved, and 
        take corrective actions to enforce the limits.''.
  (b) Conforming Amendments.--
          (1) Section 2(g) of such Act (7 U.S.C. 2(g)) is 
        amended by inserting ``subsection (j) of this section, 
        and'' after ``(other than''.
          (2) Section 2(h)(2)(A) of such Act (7 U.S.C. 
        2(h)(2)(A)) is amended by inserting ``subsection (j) of 
        this section and'' before ``sections''.
          (3) Section 8a(9) of such Act (7 U.S.C. 12a(a)(9)) is 
        amended by inserting after ``of the Commission's 
        action'' the following: ``, and to fix and enforce 
        limits to agreements, contracts, or transaction subject 
        to section 2(j)(1) pursuant to a finding made under 
        section 2(j)(2)''.

SEC. 15. EXPEDITED PROCESS.

  The Commodity Futures Trading Commission may use emergency 
and expedited procedures (including any administrative or other 
procedure as appropriate) to carry out this Act if, in its 
discretion, it deems it necessary to do so.

                                  
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