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116th Congress    }                                     {      Report
                        HOUSE OF REPRESENTATIVES
 1st Session      }                                     {     116-313

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



 
                    CFTC REAUTHORIZATION ACT OF 2019

                                _______
                                

 November 26, 2019.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

    Mr. Peterson, from the Committee on Agriculture, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 4895]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Agriculture, to whom was referred the bill 
(H.R. 4895) to reauthorize the Commodity Futures Trading 
Commission, having considered the same, report favorably 
thereon with an amendment and recommend that the bill as 
amended do pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``CFTC Reauthorization Act of 2019''.

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--POLICY AMENDMENTS

Sec. 101. Foreign futures authority.
Sec. 102. Honors program.
Sec. 103. Advisory committee changes.
Sec. 104. Enhancement of Office of Minority and Women Inclusion at the 
Commission; internship program.
Sec. 105. Detailing and resource-sharing.
Sec. 106. Office of the Chief Economist.
Sec. 107. Equal consideration for holding companies.
Sec. 108. Exemption of qualified charitable organizations from 
regulation as commodity pool operators.
Sec. 109. Digital commodity.
Sec. 110. System safeguards.
Sec. 111. Administration of swap execution facilities.
Sec. 112. Applicability of prohibitions on fraud and manipulation to 
activities outside the United States.
Sec. 113. Privilege retention.
Sec. 114. Proprietary information.
Sec. 115. Authority to provide food and incidental assistance to 
foreign officials hosted by the Commission.
Sec. 116. Extension of operations.
Sec. 117. Aiding and abetting.
Sec. 118. Modernization of authority of the Commission to conduct 
research, development, demonstration, and information programs.
Sec. 119. Protecting customer property during commodity broker 
bankruptcy.
Sec. 120. Elimination of the double-sided confirmation requirement for 
swap data repositories.
Sec. 121. Whistleblower protections for internal disclosures.
Sec. 122. Updating standards for natural persons to meet requirements 
for qualified eligible persons.
Sec. 123. Government Accountability Office study on aluminum markets.
Sec. 124. Response to foreign regulatory authority.
Sec. 125. Affiliate conditions.

                    TITLE II--TECHNICAL CORRECTIONS

Sec. 201. Correction of references.
Sec. 202. Elimination of obsolete references to dealer options.
Sec. 203. Updated trade data publication requirement.
Sec. 204. Flexibility for all registered entities.
Sec. 205. Elimination of obsolete references to electronic trading 
facilities.
Sec. 206. Elimination of obsolete reference to alternative swap 
execution facilities.
Sec. 207. Clarification of Commission authority over swaps trading.
Sec. 208. Elimination of obsolete reference to the Commodity Exchange 
Commission.
Sec. 209. Elimination of obsolete references to derivative transaction 
execution facilities.
Sec. 210. Elimination of obsolete references to exempt boards of trade.
Sec. 211. Elimination of completed reports.
Sec. 212. Miscellaneous corrections.
Sec. 213. Technical amendments to section 14(e).
Sec. 214. Technical clarifications for retail foreign currency.
Sec. 215. Miscellaneous swap technical corrections.

                       TITLE I--POLICY AMENDMENTS

SEC. 101. FOREIGN FUTURES AUTHORITY.

  (a) In General.--Section 1a(26) of the Commodity Exchange Act (7 
U.S.C. 1a(26)) is amended to read as follows:
          ``(26) Foreign futures authority.--The term `foreign futures 
        authority' means any foreign government, or any law enforcement 
        authority, department, central bank, ministry, agency, 
        governmental body, or regulatory organization empowered by a 
        foreign government to administer, enforce, or prosecute a law, 
        rule, or regulation relating to matters involving futures, 
        options, swaps, or commodities, or any such authority, 
        department, or agency of a political subdivision of a foreign 
        government empowered to administer, enforce, or prosecute a 
        law, rule, or regulation as it relates to such matters.''.
  (b) Conforming Amendment.--Section 12(f) of such Act (7 U.S.C. 16(f)) 
is amended--
          (1) in paragraph (1)--
                  (A) by striking ``futures or options'' and inserting 
                ``futures, options, swaps, or commodities''; and
                  (B) by striking ``administers or enforces'' and 
                inserting ``administers, enforces, or prosecutes''; and
          (2) in paragraph (2)(A), by striking ``in futures and 
        options'' and inserting ``in futures, options, swaps, or 
        commodities''.

SEC. 102. HONORS PROGRAM.

  (a) In General.--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) Honors program.--The Commission may establish 
                the Honors Program under its appointment and 
                compensation authorities.''.
  (b) Conforming Amendment.--Section 12(b)(1) of such Act (7 U.S.C. 
16(b)(1)) is amended by adding at the end the following: ``To clarify 
the Commission's authority to establish the Honors Program under 
section 2(a)(7)(D), the Commission may coordinate with the Office of 
Personnel Management, as needed.''.

SEC. 103. ADVISORY COMMITTEE CHANGES.

  (a) In General.--Section 2(a)(15) of the Commodity Exchange Act (7 
U.S.C. 2(a)(15)) is amended to read as follows:
          ``(15) Advisory committees.--
                  ``(A) Establishment.--
                          ``(i) In general.--The Commission shall 
                        establish advisory committees to serve as 
                        vehicles for discussion and communication on 
                        matters related to the regulatory activities of 
                        the Commission.
                          ``(ii) Membership.--The Commission shall 
                        appoint to an advisory committee such members 
                        as the Commission finds appropriate to promote 
                        robust discussion of the subject mater before 
                        the advisory committee. In appointing members 
                        to an advisory committee, the Commission shall 
                        seek to include a wide diversity of opinion and 
                        represent a broad cross-section of interests, 
                        as applicable to the subject matter.
                  ``(B) Activities.--The activities of an advisory 
                committee shall include the following:
                          ``(i) to hold meetings at such intervals as 
                        necessary to carry out the functions of the 
                        advisory committee;
                          ``(ii) to submit to the Commission such 
                        reports and recommendations to the Commission 
                        (including minority views, if any) as the 
                        advisory committee deems appropriate; and
                          ``(iii) such activities as the Commission 
                        determines is appropriate.
                  ``(C) Applicability of the federal advisory committee 
                act.--An advisory committee established under this 
                paragraph shall be subject to the Federal Advisory 
                Committee Act.''.
  (b) Existing Advisory Committees.--Notwithstanding section 2(a)(15) 
of the Commodity Exchange Act, the Commodity Futures Trading Commission 
may permit an advisory committee that, as of the date of the enactment 
of this Act, had a charter established by the Commission, or that was 
established under such section as in effect before such date of 
enactment, to continue to operate in accordance with the charter or in 
accordance with such predecessor section until the sponsor of the 
advisory committee is changed. After which such advisory committee will 
become subject to section 2(a)(15) of the Commodity Exchange Act.

SEC. 104. ENHANCEMENT OF OFFICE OF MINORITY AND WOMEN INCLUSION AT THE 
                    COMMISSION; INTERNSHIP PROGRAM.

  (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:
          ``(16) Office of minority and women inclusion.--Within 1 year 
        after the date of the enactment of this paragraph, the 
        Commission shall comply with section 342 of the Dodd-Frank Wall 
        Street Reform and Consumer Protection Act.
          ``(17) Annual internship program.--
                  ``(A) In general.--The Executive Director shall 
                establish a program to place an appropriate number of 
                students attending qualified institutions in a 
                semester-length internship within the Commission's 
                divisions and offices.
                  ``(B) Funding.--The Commission shall set aside an 
                appropriate percentage of the funds allocated to the 
                office of the Chairman to enable the selected interns 
                identified in subparagraph (A) to afford living 
                expenses, including rent and a per-diem, in the 
                metropolitan areas where the Director identifies 
                internship opportunities.
                  ``(C) Qualified institution defined.--In this 
                paragraph, the term `qualified institution' means--
                          ``(i) an 1890 Institution (as defined in 
                        section 2 of the Agricultural Research, 
                        Extension, and Education Reform Act of 1998 (7 
                        U.S.C. 7601));
                          ``(ii) a 1994 Institution (as defined in 
                        section 532 of the Equity in Educational Land-
                        Grant Status Act of 1994 (Public Law 103-382; 7 
                        U.S.C. 301 note));
                          ``(iii) an eligible institution (as defined 
                        in section 1489 of the National Agricultural 
                        Research, Extension, and Teaching Policy Act of 
                        1977 (7 U.S.C. 3361)); or
                          ``(iv) a Hispanic-serving institution (as 
                        defined in section 1404 of the Food and 
                        Agriculture Act of 1977 (7 U.S.C. 3103)).''.
  (b) Joint Standards.--In carrying out section 2(a)(16) of the 
Commodity Exchange Act, the Commodity Futures Trading Commission shall 
adopt the joint standards established in the Interagency Policy 
Statement published in the Federal Register on June 10, 2015 (80 Fed. 
Reg. 33016), or any successor Policy Statement.

SEC. 105. DETAILING AND RESOURCE-SHARING.

  Section 2(a) of the Commodity Exchange Act (7 U.S.C. 2(a)), as 
amended by section 104 of this Act, is amended by adding at the end the 
following:
          ``(18) Assistance from federal agencies.--
                  ``(A) In general.--The Commission may accept any 
                assistance, including services, funds, facilities, and 
                other support services as determined by the Commission, 
                to effectuate the purposes and provisions of this Act, 
                from any department or agency of the United States that 
                is authorized under other law to provide the 
                assistance.
                  ``(B) Detail flexibility.--When an employee from 
                another department or agency is detailed to the 
                Commission, the employee may be detailed on either a 
                reimbursable or non-reimbursable basis, and such detail 
                shall be without interruption or loss of civil service 
                status or privilege.
          ``(19) Assistance from foreign governmental entities.--
                  ``(A) In general.--The Commission may--
                          ``(i) accept details of officers or employees 
                        of a foreign futures authority or any 
                        department or agency of a foreign government, 
                        including a central bank or ministry, on a 
                        temporary basis as employees of the Commission 
                        pursuant to section 12(b) of this Act, or 
                        section 3101 or 3109 of title 5, United States 
                        Code; and
                          ``(ii) detail officers or employees of the 
                        Commission to work on a temporary basis for an 
                        entity described in clause (i).
                  ``(B) Reciprocity and reimbursement.--
                          ``(i) Reciprocity not required.--Assistance 
                        described in subparagraph (A) need not be 
                        provided on a reciprocal basis.
                          ``(ii) Reimbursement.--
                                  ``(I) In general.--The Commission may 
                                provide and accept assistance described 
                                in subparagraph (A) on a reimbursable 
                                or non-reimbursable basis, only in 
                                accordance with a written agreement 
                                between the Commission and the 
                                respective foreign governmental entity.
                                  ``(II) Form.--A reimbursement to or 
                                from the Commission may be made in cash 
                                or in kind. The Commission shall credit 
                                a reimbursement received from a foreign 
                                governmental entity to the appropriate 
                                Commission appropriation, fund, or 
                                account.
                  ``(C) Standards of conduct.--An officer or employee 
                detailed under subparagraph (A)(i) shall be subject to 
                the provisions of law relating to ethics, conflicts of 
                interest, or corruption, and to any other statute 
                governing the standards of conduct for Commission 
                employees that are applicable to the type of 
                appointment.
                  ``(D) Limitation.--An officer or employee detailed 
                under subparagraph (A)(i) may not hold any management 
                position at the Commission.''.

SEC. 106. OFFICE OF THE CHIEF ECONOMIST.

  (a) In General.--Section 2(a) of the Commodity Exchange Act, as 
amended by sections 104 and 105 of this Act, is amended by adding at 
the end the following:
          ``(20) 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.
                  ``(C) Functions.--The Chief Economist shall serve as 
                economic advisor to the Commission and perform 
                functions such as economic analysis, regulatory cost-
                benefit analysis, and research.
                  ``(D) Professional staff.--
                          ``(i) In general.--The Commission shall 
                        appoint such other economists and any related 
                        positions as may be necessary for the Office of 
                        the Chief Economist--
                                  ``(I) in accordance with the 
                                statutes, rules, and regulations 
                                governing appointments in the excepted 
                                service; and
                                  ``(II) notwithstanding any statutes, 
                                rules, and regulations governing 
                                appointments in the competitive 
                                service.
                          ``(ii) Rule of construction.--The appointment 
                        of a candidate to a position under authority of 
                        this subsection shall not be considered to 
                        cause such position to be converted from the 
                        competitive service to the excepted service.''.
  (b) Conforming Amendment.--Section 15(a) of such Act (7 U.S.C. 19(a)) 
is amended--
          (1) in paragraph (1), by inserting ``, after coordinating 
        with the Office of the Chief Economist,'' before ``shall'';
          (2) in paragraph (2)(B), by striking ``futures markets'' and 
        inserting ``markets under the jurisdiction of the Commission'';
          (3) in paragraph (2), by redesignating subparagraphs (D) and 
        (E) as subparagraphs (E) and (F); and
          (4) in paragraph (2), by inserting after subparagraph (C) the 
        following:
                  ``(D) considerations of market liquidity;''.

SEC. 107. EQUAL CONSIDERATION FOR HOLDING COMPANIES.

  Section 2(h)(7)(C)(ii) of the Commodity Exchange Act (7 U.S.C. 
2(h)(7)(C)(ii)) is amended--
          (1) in the matter before subclause (I), by striking ``unions, 
        including--'' and inserting ``unions, bank holding companies, 
        and savings and loan holding companies, including--'';
          (2) in subclause (II), by striking ``or'' at the end;
          (3) in subclause (III), by striking the period at the end and 
        inserting a semicolon; and
          (4) by adding at the end the following:
                                  ``(IV) bank holding companies (as 
                                defined in section 2 of the Bank 
                                Holding Company Act of 1956) that have 
                                aggregated assets, including the assets 
                                of their subsidiaries, of 
                                $10,000,000,000 or less; and
                                  ``(V) savings and loan holding 
                                companies (as defined in section 10 of 
                                the Home Owners' Loan Act of 1933) that 
                                have aggregated assets, including the 
                                assets of their subsidiaries, of 
                                $10,000,000,000 or less.''.

SEC. 108. EXEMPTION OF QUALIFIED CHARITABLE ORGANIZATIONS FROM 
                    REGULATION AS COMMODITY POOL OPERATORS.

  Section 4m of the Commodity Exchange Act (7 U.S.C. 6m) is amended to 
read as follows:

``SEC. 4M. USE OF MAILS OR OTHER MEANS OR INSTRUMENTALITIES OF 
                    INTERSTATE COMMERCE BY COMMODITY TRADING ADVISORS 
                    AND COMMODITY POOL OPERATORS.

  ``(a) Prohibition.--It shall be unlawful for any commodity trading 
advisor or commodity pool operator, unless registered under this Act, 
to make use of the mails or any means or instrumentality of interstate 
commerce in connection with business as the commodity trading advisor 
or commodity pool operator.
  ``(b) Exceptions.--
          ``(1) In general.--Subsection (a) shall not apply to a 
        commodity trading advisor whose commodity trading advice is 
        solely incidental to the conduct of that person's business, and 
        who is a--
                  ``(A) dealer, processor, broker, or seller in cash 
                market transactions of any commodity specifically set 
                forth in section 2(a) of this Act before the enactment 
                of the Commodity Futures Trading Commission Act of 1974 
                (or products thereof); or
                  ``(B) nonprofit, voluntary membership, general farm 
                organization, that provides advice on the sale or 
                purchase of any commodity specifically set forth in 
                section 2(a) of this Act before the enactment of the 
                Commodity Futures Trading Commission Act of 1974.
          ``(2) Charitable organization.--Subsection (a) shall not 
        apply to any commodity trading advisor or commodity pool 
        operator that is--
                  ``(A) a charitable organization, as defined in 
                section 3(c)(10)(D) of the Investment Company Act of 
                1940 (15 U.S.C. 80a-3(c)(10)(D)), 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 advisory or pool activities are 
                conducted only on behalf of, or with respect to, 1 or 
                more of--
                          ``(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 (15 U.S.C. 80a-3(c)(10)), or the 
                        trustees, administrators, settlors (or 
                        potential settlors), or beneficiaries of the 
                        foregoing; or
                  ``(B) any plan, company, or account described in 
                section 3(c)(14) of the Investment Company Act of 1940 
                (15 U.S.C. 80a-3(c)(14)), 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 
                advisory or pool activities are conducted only on 
                behalf of, 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 
                (15 U.S.C. 80a-3(c)(14)).
          ``(3) Small commodity trading advisors.--Subsection (a) shall 
        not apply to any commodity trading advisor who, during the 
        course of the preceding 12 months, has not furnished commodity 
        trading advice to more than 15 persons and who does not hold 
        themselves out generally to the public as a commodity trading 
        advisor.
          ``(4) SEC-registered.--
                  ``(A) In general.--Subsection (a) shall not apply to 
                any commodity trading advisor that is registered with 
                the Securities and Exchange Commission as an investment 
                adviser whose business does not consist primarily of 
                acting as a commodity trading advisor and that does not 
                act as a commodity trading advisor to any commodity 
                pool that is primarily engaged in trading commodity 
                interests.
                  ``(B) Engaged primarily.--For purposes of this 
                paragraph, a commodity trading advisor or a commodity 
                pool shall be considered to be `engaged primarily' in 
                the business of being a commodity trading advisor or 
                commodity pool if it is or holds itself out to the 
                public as being engaged primarily, or proposes to 
                engage primarily, in the business of advising on 
                commodity interests or investing, reinvesting, owning, 
                holding, or trading in commodity interests, 
                respectively.
                  ``(C) Commodity interests.--For purposes of this 
                paragraph, commodity interests shall include contracts 
                of sale of a commodity for future delivery, options on 
                such contracts, security futures, swaps, leverage 
                contracts, foreign exchange, spot and forward contracts 
                on physical commodities, and any monies held in an 
                account used for trading commodity interests.
          ``(5) Subject to proceedings.--A person described in 
        paragraphs (1) and (2) shall be subject to proceedings under 
        section 14.
  ``(c) Relationship to Other Law.--Nothing in this Act shall relieve 
any person of any obligation or duty, or affect the availability of any 
right or remedy available to the Securities and Exchange Commission or 
any private party arising under the Securities Act of 1933 (15 U.S.C. 
77a et seq.) or the Securities Exchange Act of 1934 (15 U.S.C. 78a et 
seq.) governing the issuance, offer, purchase, or sale of securities of 
a commodity pool, or of persons engaged in transactions with respect to 
the securities, or reporting by a commodity pool.
  ``(d) Disclosure Concerning Exempted Charitable Organizations.--A 
commodity trading advisor or commodity pool operator that is an 
organization or person described in subsection (b)(2)(A) of this 
section to or of any investment trust, syndicate, or similar form of 
enterprise excluded from the definition of `investment company' 
pursuant to section 3(c)(10)(B) of the Investment Company Act of 1940 
(15 U.S.C. 80a-3(c)(10)(B)) shall provide disclosure in accordance with 
section 7(e) of that Act (15 U.S.C. 80a-7(e)).''.

SEC. 109. DIGITAL COMMODITY.

  (a) Requirements Applicable to Boards of Trade.--Section 5(d)(4) of 
such Act (7 U.S.C. 7(d)(4)) is amended--
          (1) by striking all that precedes ``board of trade'' and 
        inserting the following:
          ``(4) Prevention of market disruption.--
                  ``(A) In general.--The'';
          (2) by redesignating each of subparagraphs (A) and (B) as 
        clauses (i) and (ii), respectively, and moving each of such 
        provisions 2 ems to the right; and
          (3) by adding after and below the end the following:
                  ``(B) Digital commodity.--With regard to a contract 
                on the contract market that references a digital 
                commodity available on a cash market, the Commission 
                shall adopt rules detailing the content and 
                availability of trade and trader data and other 
                information the board of trade must be able to access 
                from the referenced cash markets and data sources in 
                order to comply with this paragraph.''.
  (b) Requirements Applicable to Swap Execution Facilities.--Section 
5h(f)(4) of such Act (7 U.S.C. 7b-3(f)(4)) is amended--
          (1) by striking all that precedes ``swap execution facility 
        shall'' and inserting the following:
          ``(4) Monitoring of trading and trade processing.--
                  ``(A) In general.--The'';
          (2) by redesignating each of clauses (i) and (ii) of 
        subparagraph (A) as subclauses (I) and (II), respectively, and 
        moving each of such provisions 2 ems to the right;
          (3) by redesignating subparagraphs (A) and (B) as clauses (i) 
        and (ii), respectively, and moving each of such provisions 2 
        ems to the right; and
          (4) by adding after and below the end the following:
                  ``(B) Digital commodity.--With regard to a swap on 
                the swap execution facility that references a digital 
                commodity available on a cash market, the Commission 
                shall adopt rules detailing the content and 
                availability of trade and trader data and other 
                information the swap execution facility must be able to 
                access from the referenced cash markets and data 
                sources in order to comply with this paragraph.''.

SEC. 110. SYSTEM SAFEGUARDS.

  (a) Contract Markets.--Section 5(d)(20) of the Commodity Exchange Act 
(7 U.S.C. 7(d)(20)) is amended--
          (1) in subparagraph (A), by striking ``through'' and all that 
        follows and inserting ``through--
                          ``(i) the implementation of appropriate 
                        controls and procedures; and
                          ``(ii) the development and operation of 
                        automated systems that--
                                  ``(I) are reliable, secure, and 
                                resilient;
                                  ``(II) have adequate scalable 
                                capacity; and
                                  ``(III) maintain the confidentiality, 
                                integrity, and availability of the data 
                                they contain;''; and
          (2) in subparagraph (C), by striking ``tests to'' and all 
        that follows and inserting ``tests to--
                          ``(i) verify the reliability, security, 
                        resilience, and capacity of the board of 
                        trade's automated systems;
                          ``(ii) verify the confidentiality, integrity, 
                        and availability of the data contained in those 
                        systems; and
                          ``(iii) verify that backup resources are 
                        sufficient to ensure continued order processing 
                        and trade matching, price reporting, market 
                        surveillance, and maintenance of a 
                        comprehensive and accurate audit trail.''.
  (b) Clearinghouses.--Section 5b(c)(2)(I) of such Act (7 U.S.C. 7a-
1(c)(2)(I)) is amended--
          (1) in clause (i), by striking ``through the'' and all that 
        follows and inserting ``through the--
                                  ``(I) implementation of appropriate 
                                controls and procedures; and
                                  ``(II) development and operation of 
                                automated systems that--
                                          ``(aa) are reliable, secure, 
                                        and resilient;
                                          ``(bb) have adequate scalable 
                                        capacity; and
                                          ``(cc) maintain the 
                                        confidentiality, integrity, and 
                                        availability of the data that 
                                        they contain;'';
          (2) in clause (ii), by striking ``allows'' and inserting 
        ``allow''; and
          (3) in clause (iii), by striking ``tests to'' and all that 
        follows and inserting ``tests to--
                                  ``(I) verify the reliability, 
                                security, resilience, and capacity of 
                                the derivatives clearing organization's 
                                automated systems;
                                  ``(II) verify the confidentiality, 
                                integrity, and availability of the data 
                                contained in those systems; and
                                  ``(III) verify that the backup 
                                resources of the derivatives clearing 
                                organization are sufficient to ensure 
                                daily processing, clearing, and 
                                settlement.''.
  (c) Swap Execution Facilities.--Section 5h(f)(14) of such Act (7 
U.S.C. 7b-3(f)(14)) is amended--
          (1) in subparagraph (A), by striking ``through'' and all that 
        follows and inserting ``through--
                          ``(i) the implementation of appropriate 
                        controls and procedures; and
                          ``(ii) the development and operation of 
                        automated systems that--
                                  ``(I) are reliable, secure, and 
                                resilient;
                                  ``(II) have adequate scalable 
                                capacity; and
                                  ``(III) maintain the confidentiality, 
                                integrity, and availability of the data 
                                they contain;''; and
          (2) in subparagraph (C), by striking ``tests to'' and all 
        that follows and inserting ``tests to--
                          ``(i) verify the reliability, security, 
                        resilience, and capacity of the swap execution 
                        facility's automated systems;
                          ``(ii) verify the confidentiality, integrity, 
                        and availability of the data contained in those 
                        systems; and
                          ``(iii) verify that backup resources are 
                        sufficient to ensure continued order processing 
                        and trade matching, price reporting, market 
                        surveillance, and maintenance of a 
                        comprehensive and accurate audit trail.''.
  (d) Swap Data Repositories.--Section 21(f) of such Act (7 U.S.C. 
24a(f)) is amended by redesignating paragraph (4) as paragraph (5) and 
inserting after paragraph (3) the following:
          ``(4) System safeguards.--Each swap data repository shall--
                  ``(A) establish and maintain a program of risk 
                analysis and oversight to identify and minimize sources 
                of operational risk, through--
                          ``(i) the implementation of appropriate 
                        controls and procedures; and
                          ``(ii) the development and operation of 
                        automated systems that--
                                  ``(I) are reliable, secure, and 
                                resilient;
                                  ``(II) have adequate scalable 
                                capacity; and
                                  ``(III) maintain the confidentiality, 
                                integrity, and availability of the data 
                                they contain;
                  ``(B) establish and maintain emergency procedures, 
                backup facilities, and a plan for disaster recovery 
                that allow for--
                          ``(i) the timely recovery and resumption of 
                        operations; and
                          ``(ii) the fulfillment of the 
                        responsibilities and obligations of the swap 
                        data repository; and
                  ``(C) periodically conduct tests to--
                          ``(i) verify the reliability, security, 
                        resilience, and capacity of the automated 
                        systems of the swap data repository;
                          ``(ii) verify the confidentiality, integrity, 
                        and availability of the data contained in those 
                        systems; and
                          ``(iii) verify that backup resources are 
                        sufficient to ensure continued fulfillment of 
                        all duties and obligations of the swap data 
                        repository established by this Act or the 
                        regulations of the Commission.''.

SEC. 111. ADMINISTRATION OF SWAP EXECUTION FACILITIES.

  Section 5h of the Commodity Exchange Act (7 U.S.C. 7b-3) is amended--
          (1) in subsection (f)(8), by striking all that follows 
        ``cooperation with the Commission'' and inserting ``and other 
        registered entities, as is necessary and appropriate, to 
        facilitate the liquidation or transfer of open positions in any 
        swap, or to suspend or curtail trading in a swap.''; and
          (2) in subsection (f)(15)--
                  (A) in subparagraph (A), by adding at the end the 
                following: ``The individual may also perform other 
                responsibilities for the swap execution facility, if--
                          ``(i) there are no conflicts of interest 
                        between the other responsibilities and the 
                        duties and obligations of the chief compliance 
                        officer under this Act and the regulations 
                        thereto; and
                          ``(ii) the other responsibilities do not 
                        limit the ability of the chief compliance 
                        officer to carry out the responsibilities of 
                        the chief compliance officer.'';
                  (B) in subparagraph (B)--
                          (i) by striking clauses (iii) through (v) and 
                        inserting the following:
                          ``(iii) establish and administer--
                                  ``(I) policies and procedures, in 
                                consultation with the board of the 
                                facility, a body performing a function 
                                similar to that of a board, or the 
                                senior officer of the facility, that 
                                are reasonably designed, as determined 
                                by the Commission, to resolve any 
                                conflicts of interest that may arise;
                                  ``(II) the policies and procedures 
                                required to be established pursuant to 
                                this section; and
                                  ``(III) policies and procedures that 
                                reasonably ensure, as determined by the 
                                Commission, 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
                          (ii) by redesignating clause (vi) as clause 
                        (iv);
                  (C) in subparagraph (C), by striking ``(B)(vi)'' and 
                inserting ``(B)(iv)''; and
                  (D) in subparagraph (D)--
                          (i) in clause (i), by striking ``and sign''; 
                        and
                          (ii) in clause (ii)--
                                  (I) in the matter preceding subclause 
                                (I), by inserting ``or senior officer'' 
                                after ``officer''; and
                                  (II) in subclause (II), by inserting 
                                ``materially'' before ``accurate''.

SEC. 112. APPLICABILITY OF PROHIBITIONS ON FRAUD AND MANIPULATION TO 
                    ACTIVITIES OUTSIDE THE UNITED STATES.

  Section 6 of the Commodity Exchange Act (7 U.S.C. 8) is amended by 
adding at the end the following:
  ``(h) Applicability to Activities Outside the United States.--
          ``(1) Applicability.--The provisions of this Act prohibiting 
        fraud, manipulation, attempted fraud, and attempted 
        manipulation, and providing for enforcement by the Commission 
        or the United States of such prohibitions (including sections 
        4b, 4c(a)(1)-(4), 4c(a)(7), 4c(b), 4o, 4s(h)(1), 4s(h)(4), 
        6(c), 6(e)(1)-(3), 6c, 9(a), 9(c), 9(d), and 9(e), including 
        any rule or regulation promulgated thereunder), shall apply to 
        activities outside the United States where such activities, 
        independently or in conjunction with activities in the United 
        States, have or would have a reasonably foreseeable substantial 
        effect within the United States.
          ``(2) Effect on other authority.--Nothing in this subsection 
        affects the application or interpretation of, or liability 
        under, any other provision of this Act, including section 
        22.''.

SEC. 113. PRIVILEGE RETENTION.

  Section 8 of the Commodity Exchange Act (7 U.S.C. 12) is amended--
          (1) by striking subsection (e) and inserting the following:
  ``(e) Disclosure Authorities.--
          ``(1) In general.--
                  ``(A) Previously disclosed.--The Commission may 
                disclose and make public, where such information has 
                previously been disclosed publicly in accordance with 
                the provisions of this section, the names and addresses 
                of all traders on the boards of trade on the commodity 
                markets with respect to whom the Commission has 
                information, and any other information in the 
                possession of the Commission relating to the amount of 
                commodities purchased or sold by each such trader.
                  ``(B) Congressional access.--Upon the request of any 
                committee of either House of Congress, acting within 
                the scope of its jurisdiction, the Commission shall 
                furnish to the committee the names and addresses of all 
                traders on the boards of trade with respect to whom the 
                Commission has information, and any other information 
                in the possession of the Commission relating to the 
                amount of any commodity purchased or sold by each such 
                trader.
          ``(2) Domestic agencies.--
                  ``(A) In general.--Upon the request of any department 
                or agency of the Government of the United States, 
                acting within the scope of its jurisdiction, the 
                Commission may furnish to the department or agency any 
                information in the possession of the Commission 
                obtained in connection with the administration of this 
                Act.
                  ``(B) Conditions.--Any information furnished under 
                this paragraph to any Federal department or agency 
                shall not be disclosed by the department or agency 
                except in any action or proceeding under the laws of 
                the United States to which the department or agency, 
                the Commission, or the United States is a party.
                  ``(C) Federal reserve banks.--In this paragraph, the 
                term `agency' includes the Federal Reserve Banks.
          ``(3) State agencies.--
                  ``(A) In general.--Upon the request of any department 
                or agency of any State or any political subdivision 
                thereof, acting within the scope of its jurisdiction, 
                the Commission may furnish to the department, agency, 
                or political subdivision any information in the 
                possession of the Commission obtained in connection 
                with the administration of this Act.
                  ``(B) Conditions.--Any information furnished to any 
                department or agency of any State or political 
                subdivision thereof shall not be disclosed by the 
                department or agency except in connection with an 
                adjudicatory action or proceeding under this Act or the 
                laws of the State or political subdivision to which the 
                State, political subdivision, department, or agency is 
                a party.
          ``(4) Foreign agencies.--
                  ``(A) In general.--Upon the request of any foreign 
                futures authority, or any department, central bank, 
                ministry, or agency of any foreign government or any 
                political subdivision thereof, acting within the scope 
                of its jurisdiction, the Commission may furnish to the 
                foreign futures authority, department, central bank, 
                ministry, agency of any foreign government, or any 
                political subdivision thereof, any information in the 
                possession of the Commission obtained in connection 
                with the administration of this Act.
                  ``(B) Conditions.--The Commission shall not furnish 
                any information to a foreign futures authority or to a 
                department, central bank, ministry, or agency of a 
                foreign government or political subdivision thereof, 
                unless the Commission is satisfied that the information 
                will not be disclosed by the foreign futures authority, 
                department, central bank, ministry, or agency of any 
                foreign government or any political subdivision 
                thereof, except in connection with an adjudicatory 
                action or proceeding under the laws of the foreign 
                government or political subdivision to which the 
                foreign government, political subdivision, department, 
                agency, central bank, ministry, or foreign futures 
                authority is a party.'';
          (2) by redesignating subsections (h) and (i) as subsections 
        (i) and (j), respectively; and
          (3) by inserting after subsection (g) the following:
  ``(h) Sharing Privileged Information With Other Authorities.--
          ``(1) Privilege definition.--The term `privilege' includes 
        any applicable work-product privilege, attorney-client 
        privilege, governmental privilege, or other privilege 
        recognized under Federal, State, or foreign law.
          ``(2) Privileged information provided by the commission.--The 
        Commission shall not be considered to have waived any privilege 
        by transferring information to or permitting that information 
        to be used in accordance with section 8a(6) or paragraphs (2), 
        (3), and (4) of subsection (e) of this section.
          ``(3) Nondisclosure of privileged information provided to the 
        commission.--The Commission shall not be compelled to disclose 
        privileged information obtained from any foreign futures 
        authority if the authority has in good faith determined and 
        represented to the Commission that the information is 
        privileged, except as provided for in subsection (a)(1).
          ``(4) Nonwaiver of privileged information provided to the 
        commission.--
                  ``(A) In general.--The entities listed in paragraphs 
                (2), (3), and (4) of subsection (e) and section 8(a)(6) 
                shall not be considered to have waived any privilege by 
                transferring information to or permitting information 
                to be used by the Commission.
                  ``(B) Exception.--Subparagraph (A) shall not apply to 
                an entity listed in section 8a(6) with respect to 
                information obtained by the Commission in an 
                investigation relating to or in any action against the 
                entity.
          ``(5) Rule of construction.--Nothing in this subsection shall 
        authorize the Commission to withhold information from the 
        Congress or prevent the Commission from complying with an order 
        of a court of the United States in an action commenced by the 
        United States or the Commission.''.

SEC. 114. PROPRIETARY INFORMATION.

  Section 8 of the Commodity Exchange Act (7 U.S.C. 12), as amended by 
section 113 of this Act, is amended by adding at the end the following:
  ``(k) Proprietary Information.--
          ``(1) In general.--For any proprietary information provided 
        to the Commission, the Commission may, in its discretion, after 
        notice and comment, adopt rules and regulations to apply any of 
        the provisions of this section to such information it obtains 
        or receives, as it deems necessary, to the extent such 
        information is not already covered by the provisions of this 
        section.
          ``(2) Policies.--With regard to proprietary information it 
        obtains or receives, the Commission shall adopt policies, as 
        determined by the Commission, after notice and comment, to--
                  ``(A) address circumstances when the Commission 
                requests proprietary information;
                  ``(B) safeguard the information, taking into 
                consideration the level of sensitivity of the 
                information;
                  ``(C) limit access to the information to appropriate 
                staff, as determined by the Commission; and
                  ``(D) protect the information from unlawful use or 
                disclosure.
          ``(3) Sharing.--To the extent the Commission adopts rules or 
        regulations, pursuant to paragraph (1), regarding the sharing 
        of such proprietary information with other governmental 
        entities, the Commission shall receive assurances that such 
        other governmental entity shall maintain sufficient safeguards 
        consistent with--
                  ``(A) policies that achieve the objectives of 
                subparagraphs (B), (C), and (D) of paragraph (2) of 
                this subsection; and
                  ``(B) the limitations set forth in paragraphs (2), 
                (3), and (4) of subsection (e) concerning the 
                confidentiality of any such information received.''.

SEC. 115. AUTHORITY TO PROVIDE FOOD AND INCIDENTAL ASSISTANCE TO 
                    FOREIGN OFFICIALS HOSTED BY THE COMMISSION.

  Section 12(b) of the Commodity Exchange Act (7 U.S.C. 16(b)) is 
amended by adding at the end the following:
          ``(5) The Commission may incur expenses for consultations and 
        meetings hosted by the Commission with foreign governmental and 
        other regulatory officials to exchange views concerning 
        derivatives matters, such expenses to include necessary 
        logistic and administrative expenses, including--
                  ``(A) meals;
                  ``(B) local travel and transportation; and
                  ``(C) related incidental expenses.''.

SEC. 116. EXTENSION OF OPERATIONS.

  Section 12(d) of the Commodity Exchange Act (7 U.S.C. 16(d)) is 
amended by striking ``2008 through 2013'' and inserting ``2020 through 
2025''.

SEC. 117. AIDING AND ABETTING.

  Section 13(a) of the Commodity Exchange Act (7 U.S.C. 13c(a)) is 
amended--
          (1) by inserting ``or recklessly provides substantial 
        assistance to,'' after ``commission of,''; and
          (2) by inserting ``, or who by recklessly providing 
        substantial assistance to another,'' before ``causes an act''.

SEC. 118. MODERNIZATION OF AUTHORITY OF THE COMMISSION TO CONDUCT 
                    RESEARCH, DEVELOPMENT, DEMONSTRATION, AND 
                    INFORMATION PROGRAMS.

  Section 18 of the Commodity Exchange Act (7 U.S.C. 22) is amended to 
read as follows:

``SEC. 18. RESEARCH AND DEVELOPMENT PROGRAMS.

  ``(a) Programs.--The Commission, as part of its ongoing operations, 
shall establish and maintain research, development, demonstration, and 
information programs that further the purposes of this Act, including 
programs that--
          ``(1) facilitate the understanding by the Commission of 
        emerging technologies, technological advances, and innovations 
        and their potential application to and effect on the 
        transactions and markets under the jurisdiction of the 
        Commission, and associated implications for cybersecurity, data 
        security, and systemic risk;
          ``(2) provide an environment where emerging technologies, 
        technological advances, and innovations may be explored by the 
        Commission with developers and potential users to evaluate 
        potential effects on the Commission and the markets under the 
        jurisdiction of the Commission;
          ``(3) identify areas where the Commission should adapt its 
        administration of this Act in light of emerging technologies, 
        technological advances, and innovations to benefit the markets 
        under the jurisdiction of the Commission; and
          ``(4) develop educational and other informational materials 
        for dissemination and use among producers, market-users, and 
        the general public regarding--
                  ``(A) derivatives;
                  ``(B) emerging technologies, technological advances, 
                and innovations in markets under the jurisdiction of 
                the Commission; and
                  ``(C) applicable requirements of this Act and the 
                regulations prescribed under this Act with regard to 
                the subjects described in subparagraphs (A) and (B).
  ``(b) Research and Development Plan.--
          ``(1) In general.--The Commission may, after notice and 
        comment, adopt a research and development plan for a program 
        established under subsection (a).
          ``(2) Conditions.--A research and development plan adopted 
        pursuant to paragraph (1) shall identify--
                  ``(A) specific areas of interest to the Commission;
                  ``(B) potential activities the Commission will 
                undertake to investigate an area of interest; and
                  ``(C) how the authority described in subsection (c) 
                will be utilized in the program.
  ``(c) Other Transaction Authority.--
          ``(1) In general.--Notwithstanding the Office of Federal 
        Procurement Policy Act of 1974 and the Competition in 
        Contracting Act, the Commission may enter into and perform a 
        transaction (other than a standard contract) for the purpose of 
        aiding or facilitating the programs and activities under 
        subsection (a).
          ``(2) Conditions.--The Commission may enter into a 
        transaction under this subsection only if--
                  ``(A) the transaction is used only in furtherance of 
                a research and development plan established under 
                subsection (b);
                  ``(B) the Commission endeavored to use a competitive 
                process, where appropriate, when determining the 
                parties to the transaction; and
                  ``(C) using a standard contract to do so is either 
                not feasible or not appropriate.
          ``(3) Policies.--The Commission shall, after notice and 
        comment, establish and publish written policies setting forth 
        the manner and criteria for utilizing the authority provided by 
        this subsection.
  ``(d) Gift Acceptance Authority.--
          ``(1) In general.--The Commission may accept and use, on 
        behalf of the United States, any non-monetary gift of a 
        provision of access, use of facilities, personal property, or 
        services, that is related to--
                  ``(A) sharing of research, data, or other 
                information;
                  ``(B) public presentations; or
                  ``(C) non-commercially available services or systems.
          ``(2) Conditions.--
                  ``(A) In general.--A gift may be accepted pursuant to 
                this subsection only if it is in furtherance of a 
                research and development plan established under 
                subsection (b).
                  ``(B) Limitations.--The Commission may not accept a 
                gift if--
                          ``(i) conditions inconsistent with applicable 
                        laws or regulations apply to the gift;
                          ``(ii) the gift is conditioned on, or will 
                        require, the expenditure of appropriated funds 
                        not available to the Commission;
                          ``(iii) using a standard contract or other 
                        transaction authority under subsection (c) to 
                        acquire the gift is either feasible or 
                        appropriate; or
                          ``(iv) acceptance of the gift would--
                                  ``(I) reflect unfavorably on the 
                                ability of the Commission to carry out 
                                its responsibilities or official duties 
                                in a fair and objective manner, or 
                                compromise the integrity or the 
                                appearance of the integrity of its 
                                programs or any official involved in 
                                its programs, or
                                  ``(II) give the endorsement or the 
                                appearance of the endorsement by the 
                                Commission or Commission staff of the 
                                products, services, activities, or 
                                policies of the donor.
                  ``(C) Solicitation prohibition.--
                          ``(i) In general.--Except as provided in 
                        clause (ii), no gift may be solicited by any 
                        Commissioner, employee of, or contractor at the 
                        Commission.
                          ``(ii) Exception.--A Commissioner or employee 
                        of the Commission may solicit only for a gift 
                        described in paragraph (1)(B).
                  ``(D) Duration.--To the extent applicable, the 
                Commission shall return any gift accepted pursuant to 
                this subsection within 90 days after accepting the 
                gift.
                  ``(E) Rules.--The Commission shall, after notice and 
                comment, establish and publish written rules setting 
                forth the manner and criteria to be used in determining 
                whether a gift meets the conditions of this paragraph.
          ``(3) Disclosure.--Within 30 days after accepting a gift 
        pursuant to this subsection, the Commission shall publish in 
        the Federal Register a notice detailing--
                  ``(A) the source of the gift;
                  ``(B) the nature of the gift;
                  ``(C) whether the gift was solicited pursuant to 
                paragraph (2)(C)(ii), and if so, by whom; and
                  ``(D) how the gift meets the conditions set forth in 
                paragraph (2).
          ``(4) Sunset.--The authority provided in this subsection may 
        not be exercised on or after October 1, 2025.
  ``(e) Annual Report.--Not later than 60 days after the end of each 
fiscal year, the Commission shall submit to the Committee on 
Agriculture, Nutrition, and Forestry of the Senate and the Committee on 
Agriculture of the House of Representatives a report on all 
transactions entered into under subsection (c) and all gifts accepted 
under subsection (d) in the fiscal year, which shall include the 
following:
          ``(1) A brief description of the subject of each such 
        transaction or gift, with an explanation of--
                  ``(A) its potential utility to the Commission or the 
                markets regulated by the Commission;
                  ``(B) how it fulfills the goals and objectives of the 
                research and development plan established under 
                subsection (b); and
                  ``(C) the status of all related projects.
          ``(2) The information required to be published pursuant to 
        subsection (d)(3).
          ``(3) A description of all sums expended by the Commission in 
        connection with a transaction entered into under subsection 
        (c), and, if readily ascertainable, the value of any gift 
        accepted under subsection (d).''.

SEC. 119. PROTECTING CUSTOMER PROPERTY DURING COMMODITY BROKER 
                    BANKRUPTCY.

  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, 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, be included in customer 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.''.

SEC. 120. ELIMINATION OF THE DOUBLE-SIDED CONFIRMATION REQUIREMENT FOR 
                    SWAP DATA REPOSITORIES.

  Section 21(c)(2) of the Commodity Exchange Act (7 U.S.C. 24a(c)(2)) 
is amended to read as follows:
          ``(2) confirm with any counterparty to the swap, as 
        determined by the Commission, the accuracy of the data that was 
        submitted, and the counterparty shall comply with the rules or 
        procedures of a swap data repository to confirm the accuracy of 
        the data;''.

SEC. 121. WHISTLEBLOWER PROTECTIONS FOR INTERNAL DISCLOSURES.

  (a) Internal Reporting.--Section 23 of the Commodity Exchange Act (7 
U.S.C. 26) is amended--
          (1) in subsection (a)(7)--
                  (A) by striking ``The term'' and inserting the 
                following:
                  ``(A) In general.--The term''; and
                  (B) by adding at the end the following:
                  ``(B) Special rule.--Solely for the purposes of 
                subsection (h)(1), the term `whistleblower' includes 
                any individual who takes, or 2 or more individuals 
                acting jointly who take, an action described in 
                subsection (h)(1)(A).''; and
          (2) in subsection (h)(1)(A)--
                  (A) in clause (i), by striking ``or'' at the end;
                  (B) in clause (ii), by striking the period at the end 
                and inserting ``; or''; and
                  (C) by adding at the end the following:
                          ``(iii) in providing information regarding 
                        any conduct that the whistleblower reasonably 
                        believes constitutes a violation of any law, 
                        rule, or regulation subject to the jurisdiction 
                        of the Commission to--
                                  ``(I) a person with supervisory 
                                authority over the whistleblower at the 
                                employer of the whistleblower, if that 
                                employer is an entity registered with, 
                                or required to be registered with, the 
                                Commission, a self-regulatory 
                                organization, or a State securities 
                                commission or office performing like 
                                functions; or
                                  ``(II) another individual working for 
                                the employer described in subclause (I) 
                                who the whistleblower reasonably 
                                believes has the authority--
                                          ``(aa) to investigate, 
                                        discover, or terminate the 
                                        misconduct; or
                                          ``(bb) to take any other 
                                        action to address the 
                                        misconduct.''.
  (b) Claims Processing.--
          (1) In general.--Section 23(b) of the Commodity Exchange Act 
        (7 U.S.C. 26) is amended by adding at the end the following:
          ``(3) Timely processing of claims.--
                  ``(A) Initial disposition.--
                          ``(i) In general.--Except as provided in 
                        subparagraph (B), and subject to clause (ii), 
                        the Commission shall make an initial 
                        disposition with respect to a claim submitted 
                        by a whistleblower for an award under this 
                        section (referred to in this paragraph as an 
                        `award claim') not later than 1 year after the 
                        deadline established by the Commission, by 
                        rule, for the whistleblower to file the award 
                        claim.
                          ``(ii) Multiple actions.--If a covered 
                        judicial or administrative action involves 1 or 
                        more related actions, the requirement under 
                        clause (i) shall apply with respect to the 
                        latest deadline with respect to the actions.
                  ``(B) Exceptions.--
                          ``(i) Initial extension.--If the Director of 
                        the Division of Enforcement of the Commission 
                        (referred to in this paragraph as the 
                        `Director'), or the designee of the Director, 
                        determines that an award claim is sufficiently 
                        complex or involves more than 1 whistleblower, 
                        or if other good cause exists such that the 
                        Commission cannot reasonably satisfy the 
                        requirement under subparagraph (A), the 
                        Director or the designee, as applicable, after 
                        providing notice to the Chairman of the 
                        Commission (referred to in this paragraph as 
                        the `Chairman'), may extend the deadline with 
                        respect to the satisfaction of that 
                        subparagraph by not more than 180 days.
                          ``(ii) Additional extensions.--If, after 
                        providing an extension under clause (i), the 
                        Director, or the designee of the Director, 
                        determines that the Commission cannot 
                        reasonably satisfy the requirement under 
                        subparagraph (A) with respect to an award 
                        claim, as extended under that clause, the 
                        Director or the designee, as applicable, after 
                        providing notice to the Chairman, may extend 
                        the period in which the Commission may satisfy 
                        subparagraph (A) by 1 additional 180-day 
                        period.
                          ``(iii) Notice to whistleblower required.--If 
                        the Director, or the designee of the Director, 
                        exercises authority under clause (i) or (ii), 
                        the Director or the designee, as applicable, 
                        shall submit to the whistleblower who filed the 
                        award claim that is subject to that action by 
                        the Director or the designee a written 
                        notification of that action by the Director or 
                        the designee.
                  ``(C) Applicability.--This paragraph shall apply only 
                to an award claim that is timely submitted under a 
                deadline established by the Commission after the date 
                of enactment of this paragraph.''.
          (2) Rules.--The Commodity Futures Trading Commission may 
        issue any rules that are necessary to carry out paragraph (3) 
        of section 23(b) of the Commodity Exchange Act (7 U.S.C. 26(b)) 
        (as added by paragraph (1)).
  (c) CFTC Whistleblower Program Education Initiatives.--Section 
23(g)(2) of the Commodity Exchange Act (7 U.S.C. 26(g)(2)) is amended--
          (1) in subparagraph (A), by striking ``and'' at the end;
          (2) in subparagraph (B), by striking the period at the end 
        and inserting ``; and''; and
          (3) by adding at the end the following:
                  ``(C) the funding of initiatives designed to educate 
                stakeholders regarding the incentives and protections 
                available under this section, including the benefits of 
                those incentives and protections.''.
  (d) Deposits Into CFTC Customer Protection Fund.--Section 23(g)(3)(A) 
of the Commodity Exchange Act (7 U.S.C. 26(g)(3)(A)) is amended by 
striking ``$100,000,000'' and inserting ``$150,000,000''.
  (e) Availability of Certain CFTC Information to Government 
Agencies.--Section 23(h)(2)(C) of the Commodity Exchange Act (7 U.S.C. 
26(h)(2)(C)) is amended--
          (1) in clause (i)--
                  (A) in subclause (II), by striking ``jurisdiction;'' 
                and inserting the following: ``jurisdiction, 
                including--
                                          ``(aa) the Federal Trade 
                                        Commission;
                                          ``(bb) the Internal Revenue 
                                        Service; and
                                          ``(cc) the Department of 
                                        State;''; and
                  (B) in subclause (VI), by inserting ``or other 
                foreign law enforcement authority'' before the period 
                at the end; and
          (2) in clause (ii)--
                  (A) by striking ``Each'' and inserting the following:
                                  ``(I) In general.--Each'';
                  (B) in subclause (I) (as so designated), by inserting 
                ``subclauses (I) through (V) of'' before ``clause 
                (i)''; and
                  (C) by adding at the end the following:
                                  ``(II) Foreign authorities.--An 
                                entity described in subclause (VI) of 
                                clause (i) shall maintain information 
                                described in that clause in accordance 
                                with such assurances of confidentiality 
                                as the Commission determines 
                                appropriate.''.

SEC. 122. UPDATING STANDARDS FOR NATURAL PERSONS TO MEET REQUIREMENTS 
                    FOR QUALIFIED ELIGIBLE PERSONS.

  (a) In General.--Within 1 year after the date of the enactment of 
this section, the Commodity Futures Trading Commission shall adopt a 
rule to update its regulations governing the requirements for natural 
persons to be qualified eligible persons who must satisfy portfolio 
requirements, for the purposes of providing relief to commodity trading 
advisors and commodity pool operators in their dealings with qualified 
eligible persons pursuant to section 4.7 of title 17, Code of Federal 
Regulations, so that a natural person, to be a qualified eligible 
person who must satisfy the portfolio requirement, must meet the 
requirement of paragraph (1) and the requirement of paragraph (2):
          (1) Means.--The requirement of this paragraph is that the 
        person must have--
                  (A) an individual net worth, or joint net worth with 
                the spouse, if any, of the person, at the time of the 
                opening of an exempt account or purchase of 1 or more 
                participation units in an exempt commodity pool, to 
                qualify the person as an accredited investor, as 
                defined in section 230.501(a)(5) of title 17, Code of 
                Federal Regulations, as if that regulation were amended 
                by striking ``$1,000,000'' and inserting 
                ``$5,000,000''; or
                  (B) individual income, or joint income with the 
                spouse, if any, of the person, in excess of $500,000 in 
                each of the 2 most recent years, and have a reasonable 
                expectation of reaching the same income level in the 
                current year.
          (2) Portfolio.--The requirement of this paragraph is that the 
        person must meet a portfolio requirement under section 
        4.7(a)(1)(v) of title 17, Code of Federal Regulations, as if 
        that regulation were amended--
                  (A) by striking ``$2,000,000'' and inserting 
                ``$5,000,000'';
                  (B) by striking ``$200,000'' and inserting 
                ``$500,000'';
                  (C) by striking ``$1,000,000'' and inserting 
                ``2,500,000''; and
                  (D) by striking ``$100,000'' and inserting 
                ``$250,000''.
  (b) Inflation.--In adopting a rule pursuant to subsection (a), the 
Commission shall--
          (1) include provisions providing for adjusting the dollar 
        amounts referred to in subsection (a) for inflation every three 
        years to the nearest $1,000 to reflect the change in the 
        Consumer Price Index for All Urban Consumers published by the 
        Bureau of Labor Statistics; and
          (2) allow any natural person who meets the requirements of a 
        qualified eligible person and is a participant in a commodity 
        pool or the customer of a commodity trading advisor provided 
        relief under section 4.7 of title 17, Code of Federal 
        Regulations, before the date of any adjustment in such 
        requirements established pursuant to this rule to remain a 
        qualified eligible person, notwithstanding such adjustments 
        established pursuant to this rule, if--
                  (A) the natural person continues to meet the 
                requirements of qualified eligible persons pursuant to 
                section 4.7 of title 17, Code of Federal Regulations, 
                as in effect before the date of any adjustment in such 
                requirements established pursuant to this rule; and
                  (B) the natural person does not--
                          (i) sell all shares of its participation in 
                        such exempt commodity pool;
                          (ii) withdraw all assets from any account 
                        managed by such exempt commodity trading 
                        advisor;
                          (iii) purchase any new shares of 
                        participation in such exempt commodity pool; or
                          (iv) contribute additional assets to any 
                        account managed by such exempt commodity 
                        trading advisor.

SEC. 123. GOVERNMENT ACCOUNTABILITY OFFICE STUDY ON ALUMINUM MARKETS.

  (a) Study.--The Comptroller General of the United States shall 
conduct a study of--
          (1) the aluminum markets in the United States and globally, 
        in general;
          (2) the effectiveness and efficiency of the markets for 
        purchasers of aluminum;
          (3) what factors and policies influence the supply, demand, 
        and movement of aluminum around the world; and
          (4) the effectiveness of government oversight over the 
        markets.
  (b) Report.--Within 180 days 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 written report 
that contains the results of the study required by subsection (a).

SEC. 124. RESPONSE TO FOREIGN REGULATORY AUTHORITY.

  Where a foreign authority seeks to assert direct supervisory 
authority over derivatives clearing organizations domiciled in the 
United States, the Commodity Futures Trading Commission should review 
the appropriateness of the exemptions granted to foreign entities, 
including clearinghouses, under the jurisdiction of the foreign 
authority.

SEC. 125. AFFILIATE CONDITIONS.

  Section 2(h)(7)(D)(iv) of the Commodity Exchange Act (7 U.S.C. 
2(h)(7)(D)(iv)) is amended--
          (1) in subclause (I), by striking ``risk; and'' and inserting 
        ``risk, unless the affiliate can demonstrate to the Commission, 
        as determined by the Commission, that--
                                          ``(aa) the affiliate has 
                                        utilized the exception in 
                                        clause (i) only to hedge or 
                                        mitigate commercial risk; and
                                          ``(bb) the affiliate 
                                        complies, as a financial 
                                        entity, with the obligations of 
                                        the affiliate with respect to 
                                        any swap for which the 
                                        exception in clause (i) is not 
                                        exercised; and''; and
          (2) in subclause (II), by striking ``neither the affiliate 
        nor any person affiliated with the affiliate that is not a 
        financial entity'' and inserting ``neither the affiliate that 
        qualifies for the exception in clause (i) nor any person 
        affiliated with the affiliate, that is directly or indirectly 
        wholly- or majority-owned by the same ultimate parent, and that 
        enters into swaps with the affiliate''.

                    TITLE II--TECHNICAL CORRECTIONS

SEC. 201. 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. 202. 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) of subsection'' and inserting 
        ``through (c) of section''.

SEC. 203. UPDATED TRADE DATA PUBLICATION REQUIREMENT.

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

SEC. 204. FLEXIBILITY FOR ALL REGISTERED ENTITIES.

  (a) Section 5c(b) of the Commodity Exchange Act (7 U.S.C. 7a-2(b)) is 
amended by striking ``contract market, derivatives transaction 
execution facility, or electronic trading facility'' each place it 
appears and inserting ``registered entity''.
  (b) Section 5c(b)(1) of such Act (7 U.S.C. 7a-2(b)(1)) is amended--
          (1) by striking ``(1) In general.--A'' and inserting the 
        following:
          ``(1) Delegation.--
                  ``(A) In general.--A'';
          (2) by striking ``with respect to a significant price 
        discovery contract''; and
          (3) by adding after and below the end the following:
                  ``(B) Swaps.--In addition to the authority described 
                in subparagraph (A), a registered entity may also 
                comply with any applicable core principle, as it 
                applies to swaps, through delegation of any relevant 
                function to a registered national securities 
                association.''.

SEC. 205. 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 first 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 second 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 of such Act (7 U.S.C. 6i) is amended--
          (1) by striking ``, or any significant price discovery 
        contract traded or executed on an electronic trading 
        facility''; 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. 206. 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. 207. 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. 208. 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. 209. 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--
          (1) in the heading, by striking ``; member of a derivatives 
        transaction execution facility''; and
          (2) 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;''.
  (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,''; and
          (5) 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) of such Act (7 U.S.C. 6(a)) is amended--
          (1) by striking ``or derivatives transaction execution 
        facility'' each place it appears; and
          (2) in paragraph (1), by striking ``or registered''.
  (p) Section 4(c)(1) of such Act (7 U.S.C. 6(c)(1)) is amended--
          (1) by striking ``or registered''; and
          (2) by striking ``or derivatives transaction execution 
        facility''.
  (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''.
  (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(e) of such Act (7 U.S.C. 6c(g)), as so redesignated by 
section 202(a) of this Act, 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(a) of such Act (7 U.S.C. 6f(a)) is amended by striking 
``or registered derivatives transaction execution facility''.
  (w) 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.
  (x) Section 4i of such Act (7 U.S.C. 6i) is amended by striking ``or 
derivatives transaction execution facility''.
  (y) Section 4j of such Act (7 U.S.C. 6j) is amended--
          (1) in the heading by striking ``and registered derivatives 
        transaction execution facilities'';
          (2) in subsection (a), by striking ``and registered 
        derivatives transaction execution facility'';
          (3) in subsection (b), by striking ``or registered 
        derivatives transaction execution facility''; and
          (4) in subsection (c), by striking ``or registered 
        derivatives transaction execution facility members''.
  (z) Section 4k of such Act (7 U.S.C. 6k) is amended by striking ``or 
registered derivatives transaction execution facility''.
  (aa) Section 4l of such Act (7 U.S.C. 6l) is amended by striking ``or 
derivatives transaction execution facilities'' each place it appears
  (bb) Section 4p(a) of such Act (7 U.S.C. 6p(a)) is amended by 
striking ``, or derivatives transaction execution facilities''.
  (cc) Section 4p(b) of such Act (7 U.S.C. 6p(b)) is amended by 
striking ``derivatives transaction execution facility,''.
  (dd) Section 5(e) of such Act (7 U.S.C. 7(e)) is amended--
          (1) by striking ``(e)'' and all that follows through ``a 
        contract for'' and inserting the following:
  ``(e) Current Agricultural Commodities.--A contract for''; and
          (2) by striking paragraph (2).
  (ee) Section 5c(b) of such Act (7 U.S.C. 7a-2(b)) is amended by 
striking ``, derivatives transaction execution facility,'' each place 
it appears.
  (ff) Section 5c(f) of such Act (7 U.S.C. 7a-2(f)) is amended by 
striking ``and registered derivatives transaction execution facility''.
  (gg) 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''.
  (hh) Section 6 of such Act (7 U.S.C. 8) is amended--
          (1) in subsection (a), 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.
  (ii) 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'' the first place 
        it appears.
  (jj) 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''.
  (kk) Section 6d(1) of such Act (7 U.S.C. 13a-2(1)) is amended by 
striking ``derivatives transaction execution facility,''.

SEC. 210. 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. 211. ELIMINATION OF COMPLETED REPORTS.

  (a) Section 23(h)(2)(C) of the Commodity Exchange Act (7 U.S.C. 
26(h)(2)(C)) is amended by striking clause (iii).
  (b) 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. 212. 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 second 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 first 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 (2)(E) and (3)(B) by striking ``Investors'' and inserting 
``Investor''.
  (s) 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.
  (t) Section 14(a)(2) of such Act (7 U.S.C. 18(a)(2)) is amended by 
moving the margin of the provision 2 ems to the left.
  (u) 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.
  (v) 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.
  (w) Section 17(b)(11) of such Act (7 U.S.C. 21(b)(11)) is amended by 
striking the period and inserting a semicolon.
  (x) 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''.
  (y) Section 17(b)(13) of such Act (7 U.S.C. 21(b)(13)) is amended by 
striking ``A'' and inserting ``a''.
  (z) 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.
  (aa) 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''.
  (bb) Section 22(b)(4) of such Act (7 U.S.C. 25(b)(4)) is amended by 
inserting a comma after ``entity''.

SEC. 213. TECHNICAL AMENDMENTS TO SECTION 14(E).

  Section 14(e) of the Commodity Exchange Act (7 U.S.C. 18(e)) is 
amended--
          (1) by inserting ``(1)'' after ``(e)'';
          (2) in the 1st sentence--
                  (A) by inserting ``final'' after ``Any'';
                  (B) by striking ``hereunder'' and inserting ``under 
                this section''; and
                  (C) by striking ``the appellee'' and inserting ``an 
                appellee'';
          (3) in the 2nd sentence--
                  (A) by striking ``Such appeal'' and inserting ``If 
                the order requires the petitioner to pay reparation, or 
                upholds a prior order requiring such a payment, the 
                petition for review'';
                  (B) by striking ``appellant'' each place it appears 
                and inserting ``petitioner'';
                  (C) by striking ``for the appellee, if the appellee 
                shall prevail'' and inserting ``as set forth below'';
          (4) in the 4th sentence, by striking ``The'' and inserting 
        ``An''; and
          (5) in the 5th sentence--
                  (A) by inserting ``participates in the proceedings 
                before the Court of Appeals through counsel and'' 
                before ``prevails''; and
                  (B) by striking ``his'' and inserting ``the 
                appellee's''; and
          (6) by adding after and below the end the following:
  ``(2) In paragraph (1), the term `appellee' means a party to a 
proceeding before the Commission under this section in whose favor the 
Commission ruled in an order that is the subject of a petition for 
review under paragraph (1) and whose interests are adverse to those of 
the petitioner.''.

SEC. 214. TECHNICAL CLARIFICATIONS FOR RETAIL FOREIGN CURRENCY.

  Section 2(c)(2) of the Commodity Exchange Act (7 U.S.C. 2(c)(2)) is 
amended--
          (1) in subparagraph (B)--
                  (A) in clause (i)(II), by redesignating item (ff) as 
                item (ee);
                  (B) by striking ``(gg)'' each place it appears and 
                inserting ``(ee)'';
                  (C) in clause (iii), by striking ``(ee), or (ff) of 
                clause (i)(II) of this subparagraph'' and inserting 
                ``or (dd) of clause (i)(II)''; and
                  (D) in clause (iv)--
                          (i) in each of subclauses (I) and (II), by 
                        striking ``(ee), or (ff)'' each place it 
                        appears and inserting ``or (dd)'';
                          (ii) in subclause (I)(bb), by inserting ``, 
                        or otherwise act as a commodity trading advisor 
                        with respect to any agreement, contract, or 
                        transaction described in clause (i)'' before 
                        the semicolon; and
                          (iii) in subclause (IV)(aa), by striking 
                        ``(ff)'' and inserting ``(dd)'';
          (2) in subparagraph (C)--
                  (A) by striking ``(ee), or (ff)'' each place it 
                appears and inserting ``or (dd)''; and
                  (B) in clause (iii)--
                          (i) in subclause (I)(bb), by inserting ``, or 
                        otherwise act as a commodity trading advisor 
                        with respect to any agreement, contract, or 
                        transaction described in clause (i)'' before 
                        the semicolon; and
                          (ii) in subclause (IV)(aa), by striking 
                        ``item (aa) through (ff)'' and inserting 
                        ``items (aa) through (dd)''; and
          (3) in subparagraph (E)(ii)(I), by inserting ``or (C)(i)(I)'' 
        after ``(B)(i)(I)''.

SEC. 215. MISCELLANEOUS SWAP TECHNICAL CORRECTIONS.

  (a) Section 6b of the Commodity Exchange Act (7 U.S.C. 13a) is 
amended by inserting ``or section 5h'' after ``sections 5 through 5c''.
  (b) Section 8a of such Act (7 U.S.C. 12a) is amended--
          (1) in paragraph (7)(A), by inserting ``or swap contracts'' 
        after ``contracts of sale''; and
          (2) in paragraph (9), by striking ``futures contract'' and 
        inserting ``contract of sale for future delivery or swap 
        contract'' each place it occurs.
  (c) Section 15(b) of such Act (7 U.S.C. 19(b)) is amended by striking 
``contract market'' and inserting ``registered entity''.

                           Brief Explanation


                        TITLE I--POLICY CHANGES

    The CFTC Reauthorization Act of 2019, H.R. 4895, includes 
many provisions designed to protect market participants, foster 
greater cooperation among Federal financial agencies and 
between the Commodity Futures Trading Commission (CFTC or 
Commission) and its foreign counterparts, strengthen the 
agency, provide relief and certainty to market participants, 
and increase opportunities for a young and diverse workforce. 
These include provisions to:
           Clarify that definition of foreign futures 
        authority includes foreign law enforcement authorities.
           Establish an Honors Program under its 
        appointment and compensation authority.
           Replace the provisions which only govern the 
        Energy and Environmental Markets Advisory Committee 
        with a general authority for the CFTC to establish 
        advisory committees under one single set of rules.
           Require the CFTC's Office of Minority and 
        Women Inclusion to comply with the requirements of 
        Section 342 of the Dodd-Frank Act.
           Require the Commission to establish an 
        internship program for students from eligible minority 
        serving institutions.
           Authorize the Commission to accept various 
        forms of assistance from other Federal agencies, as 
        otherwise authorized by law.
           Formally establish an Office of the Chief 
        Economist (OCE) and require that the Commission 
        coordinate with the OCE before its consideration of 
        costs and benefits for its rulemakings.
           Provide an exemption to the mandatory swaps 
        clearing requirement to bank holding companies and 
        savings and loan holding companies if they have 
        aggregated assets, including the assets of 
        subsidiaries, of $10 billion or less.
           Establish that persons acting as commodity 
        pool operators or commodity trading advisors on behalf 
        of charitable organizations and/or church plans are not 
        required to register with the Commission.
           Direct the CFTC to adopt rules detailing the 
        content and availability of trade and trader data and 
        other information that boards of trade and swap 
        execution facilities must be able to access from a cash 
        market in a digital commodity to meet their respective 
        obligations to prevent disruption of their market.
           Amend existing system safeguard core 
        principles for market infrastructure to clarify that 
        systems safeguards, particularly automated systems, 
        should be resilient and protect the confidentiality, 
        integrity, and availability of data they contain.
           Clarify that Swap Execution Facilities 
        emergency authority is to facilitate the liquidation or 
        transfer of open positions on swaps as opposed to 
        directly liquidating or transferring them.
           Clarify that chief compliance officers 
        (CCOs) may perform other responsibilities for the SEF 
        provided there are no conflicts of interest between 
        such other responsibilities and the duties of the CCOs 
        or limitations on the CCOs from carrying out their own 
        responsibilities.
           Confirm the Commission's authorities to 
        prosecute fraud and manipulation applies to activities 
        outside the United States.
           Establish protections to retain privileges 
        for information shared by the CFTC with other Federal 
        and state authorities, foreign authorities, and self-
        regulatory organizations as well as information shared 
        with the CFTC from such authorities and organizations.
           Clarify the Commission's authority to apply 
        Section 8 disclosure protections, in its discretion, to 
        proprietary information obtained or received by the 
        Commission.
           Require the Commission to adopt policies to 
        address issues concerning proprietary information.
           Reauthorize the Commission for Fiscal Years 
        2020 through 2025.
           Add a ``reckless'' standard to the 
        Commission's aiding and abetting provisions.
           Authorize the Commission to establish 
        research, development, and information programs to 
        further the purposes of this Act.
           Clarify that when there is a shortfall in 
        funds segregated for the benefit of customers, assets 
        from the debtor's bankruptcy estate can be available to 
        make up the shortfall.
           Eliminate the double-sided confirmation 
        requirement for swap data repositories.
           Expand whistleblower protections.
           Update standards for natural persons to meet 
        requirements for qualified eligible persons.
           Direct the Government Accountability Office 
        to conduct a study on aluminum markets.
           Amend the conditions that must be met by 
        Treasury affiliates to non-financial entities who hope 
        to use the end-user clearing exception on behalf of 
        their non-financial affiliates.

                    TITLE II--TECHNICAL CORRECTIONS

    Working with the CFTC and House Legislative Counsel, the 
Committee has prepared a section of technical edits and changes 
to the Commodity Exchange Act which corrects references, 
removes obsolete terms, comports ambiguous text to existing 
practices, fixes formatting errors, and removes studies long 
since completed.

                            Purpose and Need


                       TITLE I--POLICY AMENDMENTS

Section 101--Foreign futures authority

    This section is a revision to the definition of ``foreign 
futures authority'' to clarify that the definition includes 
foreign law enforcement authorities so as to more accurately 
characterize the Commodity Futures Trading Commission's (CFTC 
or Commission) international cooperative partners. Section 8 of 
the Commodity Exchange Act (CEA) authorizes the Commission to 
share information with a ``foreign futures authority''. This 
change would clarify that the Commission's authority also 
includes sharing information with foreign law enforcement 
authorities. The Commission shares information with its foreign 
cooperation partners under international agreements and the 
amendment will make it easier to bring in foreign law 
enforcement under those agreements. Finally, the revision to 
Section 12(f) would clarify that the Commission is authorized 
to provide assistance to both foreign futures and law 
enforcement authorities with respect to all transactions within 
the Commission's jurisdiction.

Section 102--Honors Program

    This section authorizes the CFTC to establish an Honors 
Program through its appointment and compensation authority as 
well as the ability to coordinate with the Office of Personnel 
Management, as needed, to create such a program. Currently, the 
CFTC does not have many entry level openings and thus lacks the 
opportunity to grow talent right out of college. Honors 
programs exist for this purpose across other agencies of 
government (e.g., Securities and Exchange Commission). 
Establishing an Honors Program is an opportunity for the 
Commission to do just that.

Section 103--Advisory committee changes

    This section strikes the statutory language establishing 
the Energy and Environmental Markets Advisory Committee (EEMAC) 
and replaces it with general authority language for the 
Commission to establish advisory committees. Finally, the 
section provides for a transition period to ensure the current 
vital work of the advisory committee is not disrupted.
    The EEMAC was authorized in the Dodd-Frank Wall Street 
Reform and Consumer Protection Act (Dodd-Frank Act). It is the 
only statutorily created advisory committee at the CFTC and it 
operates under different rules than the four other advisory 
committees at the Commission.
    Most notably, the membership of EEMAC is severely 
constrained in statute. Advisory committees at the Commission 
have historically been forums for the Commission to hear from a 
wide variety of market participants, from large financial 
institutions to small end-users, intermediaries, and consumer 
organizations. The wide diversity of membership ensures that 
the Commission receives a full picture of public opinion.
    While the other advisory committees have dozens of members, 
the EEMAC is statutorily limited to nine members, depriving the 
Commission of critical viewpoints. To solve this problem, the 
Commission, on its own, created ``associate members'' of EEMAC, 
who are invited to participate in meetings, but are not 
considered ``members'' when the advisory committee presents 
opinions to the Commission.
    Additionally, while advisory committees are generally 
subject to the Federal Advisory Committee Act (FACA), which 
imposes ``Sunshine Act-like'' obligations on advisory 
committees across the Federal Government, EEMAC is exempted 
from that law. With this section, the advisory committees will 
be able to operate under the same set of rules and be subject 
to FACA. The Committee fully expects EEMAC to be reconstituted 
by the Commission under this new authority once the transition 
period ends.

Section 104--Enhancement of Office of Minority and Women Inclusion at 
        the Commission; Internship Program

    This section requires the Commission to comply with Section 
342 of the Dodd-Frank Act, which created an Office of Minority 
and Women Inclusion (OMWI) at most of the other Federal 
financial regulators. The Commission previously acted on its 
own initiative to rename its Office of Diversity Inclusion into 
an OMWI office, which currently has some of the 
responsibilities outlined in Dodd-Frank. This section brings 
the Commission in line with the other Federal financial 
regulators by statutorily establishing the CFTC's OMWI and 
providing it with responsibility for all matters relating to 
diversity in management, employment, and business activities at 
the agency.
    Under the statute, each OMWI shall--
           be headed by a career position in the Senior 
        Executive Service or equivalent;
           directly report to the head of the agency;
           develop standards for equal employment 
        opportunity, including increasing participation of 
        minority- and women-owned businesses in programs and 
        contracts with the agency and assessing the diversity 
        policies of the agency; and
           advise on the impact of policies and 
        regulations on minority- and women-owned businesses.
    This section requires that the CFTC adopt the joint 
standards of the Interagency Policy Statement, which was 
published as required in Section 342 of Dodd-Frank.
    Additionally, the language instructs the Executive Director 
to establish a program to place an appropriate number of 
students attending 1890s land-grants, 1994 land-grants from 
among Tribal colleges and territorial colleges, and USDA 
designated Hispanic serving institutions in a semester-length 
internship within the Commission's divisions and offices.

Section 105--Detailing and resource-sharing

    This section provides authority for reimbursable and non-
reimbursable details and for the Commission to accept 
assistance from any Federal agency or department, as authorized 
under law. Additionally, the proposed amendment provides 
authority for the detailing of personnel between the CFTC and 
foreign futures authorities on a temporary basis.

Section 106--Office of the Chief Economist

    This section establishes by statute an Office of the Chief 
Economist (OCE) at the CFTC to be headed by a Chief Economist. 
In addition, this section provides the Commission with the 
authority to appoint staff to the OCE through the excepted 
service. This authority, already utilized by the Commission to 
hire attorneys, will aid the Commission in its ability to bring 
top economists and research analysts into the OCE.
    Finally, this section makes several minor amendments to 
Section 15(a) of the CEA which governs the Commission's 
consideration of the costs and benefits of its rules, 
regulations, and orders. First, it names the OCE as a 
participant in the cost-benefit process. Second, it updates 
Section 15(a) to apply to all markets under the Commission's 
jurisdiction, as opposed to just ``futures markets'' and to 
include considerations regarding market liquidity.
    The Committee notes that the OCE is already an active 
participant in the process to consider costs and benefits for 
regulations with the Office of General Counsel, as well as, the 
relevant divisions and offices responsible for crafting the 
rule or order under consideration. The Committee further notes 
that the Commission currently applies Section 15(a) to 
regulations across all of its regulated markets and that its 
considerations also include market liquidity.
    To that end, it is the Committee's intent that inclusion of 
the modifications to Section 15(a) of this language neither 
establishes any new requirement nor obligation upon the 
Commission that differs from current practice. Nor should this 
language be interpreted as placing the OCE on equal basis with 
the Commission or elevating the OCE over any other Division or 
Office engaged in preparing the cost-benefit analysis for the 
Commission. Rather, the purpose of this language is to codify 
the existing practices at the Commission and prevent the OCE 
from being removed from its current active participation.
    The Committee recognizes the significant strides the 
Commission has made in improving its consideration of costs and 
benefits over the past five years. The Committee believes 
robust consideration of costs and benefits is essential for a 
data-focused regulatory agency. Such consideration should not 
merely be an exercise in satisfying legal or procedural 
requirements, but serve to meaningfully inform the rulemaking 
and regulatory process.

Section 107--Equal consideration for holding companies

    Under the Dodd-Frank Act, end-users that are not considered 
a ``financial entity'' are exempt from the Act's swaps clearing 
mandate. The Act directed the CFTC to determine whether to 
exempt small banks and savings associations, Farm Credit System 
banks, and credit unions with assets less than $10 billion from 
the definition of ``financial entity,'' thereby making them 
eligible for the end-user exemption from the swaps clearing 
mandate. Small financial institutions often enter into interest 
rate swaps to hedge interest rate risk that they incur as a 
result of issuing debt securities or making loans. In July 
2012, the CFTC issued a final rule exempting ``small financial 
institutions'' with total assets of $10 billion or less from 
classification as a ``financial entity.''
    However, some small banks and savings associations are 
structured under bank holding companies (BHC) or savings and 
loan holding companies (SLHC). Under a holding company 
structure, small financial institutions may choose to manage 
the same swaps activity through their holding company in order 
to aggregate the activity of multiple institutions or to gain 
hedge accounting treatment. Yet, such activity is not 
statutorily eligible for relief from the clearing mandate.
    The CFTC extended relief from clearing to similarly 
situated BHCs and SLHCs in a no-action letter in January 2016. 
In that letter the Division of Clearing and Risk noted that the 
Commission had previously found that the swaps books that these 
institutions hold have a relatively small notional value and 
fall into the scope of what Congress intended when directing 
the CFTC to evaluate an exemption for small financial 
institutions from the ``financial entity'' definition.
    Section 107 gives the option for the CFTC to codify those 
exemptions for holding companies. Allowing the CFTC to codify 
this relief will provide confidence and security to these small 
institutions to continue to use swaps to manage risk.

Section 108--Exemption of qualified charitable organizations from 
        regulation as commodity pool operators

    As a result of the Dodd-Frank Act's addition of swaps to 
the ``commodity pool'' definition, certain colleges and 
universities currently face uncertainty as to whether the 
practices of universities managing their endowment funds 
together with funds of affiliated organizations (such as 
university newspapers, clubs, charitable remainder trusts, and 
other organizations within the university community) and 
entering into swaps in the ordinary course of managing their 
investment exposure and operational risk (e.g., interest rates 
or energy prices) would cause university endowments to be 
commodity pools and universities themselves to be commodity 
pool operators (CPOs) or commodity trading advisors (CTAs), 
subject to CFTC regulation.
    Many colleges, universities and other charitable 
organizations faced similar uncertainty with respect to the 
Investment Advisors Act of 1940, and this uncertainty was 
addressed by the Philanthropy Protection Act of 1995 (``PPA''). 
Since that time, university endowments have relied on the 
changes made by the PPA to provide an exemption from Securities 
and Exchange Commission (SEC) registration in recognition of 
the special status of these funds. The CFTC extended relief to 
these qualified university endowments in a no-action letter in 
September 2017.
    Similarly, church benefits boards often use investment 
managers or advisers that engage in commodities transactions. 
Church benefits boards also have the ability to pool plan 
assets with other funds for the benefit of the church (``church 
plan-related accounts''), purely for investment management 
purposes. While securities laws clearly exempt church plans and 
church plan-related accounts from SEC registration 
requirements, the CEA and CFTC rules are not so clear.
    The CFTC extended relief to these qualified churches and 
nonprofits in a no-action letter in February 2014.
    Section 108 will harmonize the exemptions between 
securities laws and the CEA and CFTC regulations. It will 
prevent university endowments, church pension plans, and church 
plan-related accounts from having to be registered as commodity 
pools. Likewise, Section 108 will prevent the universities and 
church benefits boards from having to register as CPOs or CTAs. 
These exemptions would reduce the cost to churches, 
universities, and charitable organizations, and would also 
ensure they have the full benefit of commodities investments 
that provide diversification, opportunities to hedge, and 
returns to their respective beneficiaries.

Section 109--Digital commodity

    Pursuant to the CEA, Designated Contract Markets (DCMs) and 
Swap Execution Facilities (SEFs), as self-regulatory 
organizations (SROs), are required as part of their core 
principles to establish and maintain an effective oversight 
program to ensure listed contracts are not susceptible to 
manipulation, and to detect and prevent manipulation, price 
distortion and disruptions to the delivery or cash-settlement 
process. Visibility into the underlying spot markets referenced 
by either a contract or a swap is an important component to 
ensuring an exchange can effectively identify and address those 
risks as they occur.
    In December 2017, when the first derivative contracts on 
Bitcoin were self-certified by various DCMs, the CFTC issued 
guidance for a ``heightened review'' with those exchanges of 
the terms and conditions for those contracts. At the heart of 
the CFTC's heightened review is extensive visibility and 
monitoring of markets for those virtual currency derivatives 
and underlying settlement reference rates. Part of that 
heightened review included guidance that DCMs should--
           enter into direct or indirect information 
        sharing agreements with cash market platforms for the 
        virtual currency to allow access to trade and trader 
        data, and
           monitor data from cash markets with respect 
        to price settlements and other Bitcoin prices more 
        broadly and identify anomalies and disproportionate 
        moves in the cash markets compare to the futures 
        markets.
    The section would require the Commission to promulgate 
rules detailing the content and availability of trade and 
trader data and other information DCMs and SEFs must be able to 
access from cash markets regarding their derivative contracts 
that reference a digital commodity (e.g., Bitcoin). The 
Committee believes that moving from guidance, which is 
technically non-binding, to a more definitive list of what is 
required by exchanges to ensure such listed contracts are not 
susceptible to manipulation and exchanges are effectively 
monitoring the markets, will not only strengthen the oversight 
of these new markets in digital commodities, but also 
consequently enhance the confidence in these markets by their 
users.
    In providing this new requirement, the Committee is mindful 
of the longstanding obligations of DCMs and SEFs to protect the 
integrity of all of their markets, and does not intend the 
Commission to impose new rules that place excessive burdens on 
digital commodity derivatives that are distinct from other 
commodity derivatives. The Committee also recognizes the 
emerging nature of these derivatives products, the digital 
commodity asset class, and the spot trading venues which 
provide the pricing data. It is the Committee's intention that 
in implementing this section the Commission does not impose 
requirements that would make producing or accessing spot market 
data disruptive to market participants.

Section 110--System safeguards

    This section amends the existing core principles for 
designated contract markets, designated clearing organizations, 
and swap execution facilities to clarify that system 
safeguards, particularly for automated systems, should be 
resilient (able to regain an ideal state or rapidly recover 
after undergoing a challenge) and maintain the confidentiality, 
integrity, and availability of data they contain. The section 
also applies the amended system safeguard core principles to 
swap data repositories. The changes to the core principles 
reflect current best practices in evaluating system safeguards.

Section 111--Administration of swap execution facilities

    This section amends provisions affecting SEFs to--
           clarify that SEF emergency authority is to 
        facilitate the liquidation or transfer of open 
        positions on swaps as opposed to directly liquidating 
        or transferring them;
           clarify that chief compliance officers 
        (CCOs) may perform other responsibilities for the SEF 
        provided there are no conflicts of interest between 
        such other responsibilities and the duties of CCOs or 
        limit the CCOs from carrying out its own 
        responsibilities;
           clarify policies and procedures CCOs must 
        establish and administer;
           remove a statutory requirement that CCOs 
        sign annual reports;
           allow a senior officer to submit an annual 
        report prepared by CCOs; and
           establish that such reports must be 
        materially accurate.
    This section removes a statutory requirement that a chief 
compliance officer for a SEF must sign the annual reports it 
sends to the Commission. The Committee notes that designated 
contract markets do not have a similar statutory requirement 
and therefore is comfortable removing the statutory requirement 
for SEFs.

Section 112--Applicability of prohibitions on fraud, and manipulation 
        to activities outside the United States

    In Prime International Trading, Ltd. v. BP P.L.C., 937 F.3d 
94 (2d Cir. Aug. 29, 2019), the U.S. Court of Appeals for the 
Second Circuit held that the provisions in the CEA that 
prohibit fraud and manipulation in connection with any swap, 
contract for commodity in interstate commerce, or for future 
delivery, i.e., Sections 6(c)(1) and 9(a)(2), lack ``a clear 
statement of extraterritorial effect.'' The Court found there 
was ``no allegation of manipulative conduct or statements made 
in the United States,'' notwithstanding plaintiffs' allegations 
that the defendants' conduct affected the price of contracts of 
sale of commodities for future delivery traded on a U.S. 
exchange, and therefore dismissed the plaintiffs' action. The 
Court's ruling opens the possibility that would-be fraudsters 
or manipulators of commodity markets within the United States 
would seek safe havens from--and assert challenges to--the 
CFTC's enforcement authority by conducting their manipulative 
or fraudulent activities outside the territory of the United 
States. This section clarifies the prohibitions on fraud, and 
manipulation, and the CFTC's enforcement authority, apply to 
activities outside the United States that have or would have 
reasonably foreseeable effects within the United States.
    The provisions of this section would not affect the 
substantive elements of the prohibitions on fraud and 
manipulation. The CFTC's burden in establishing a violation of 
these prohibitions with respect to activities outside the 
United States would be the same as for establishing a violation 
for the conduct if it had occurred within the United States. 
Rather, this provision would specify the nature of the 
activities that would apply these prohibitions to activities 
outside the United States. The extraterritorial provisions 
applicable in this section would apply only with respect to the 
prohibitions on fraud and manipulation.

Section 113--Privilege retention

    This provision clarifies that the Commission shall not be 
considered to have waived any privilege by transferring or 
permitting use of information in accordance with the disclosure 
authorities under the CEA. The bill also clarifies entities 
that shared or permitted use of information by the Commission 
shall not be considered to have waived any privilege. Such 
protection would not apply in the case of self-regulatory 
organizations (SROs) to information obtained as a result of 
investigations or enforcement actions against the SRO. Further, 
the Commission shall not be compelled to disclose privileged 
information obtained from any foreign futures authority.
    Privilege is defined as any applicable work-product 
privilege, attorney-client privilege, governmental privilege, 
or other privilege recognized under Federal, State or foreign 
law.
    Current law, under the CEA, allows the Commission to enter 
into access or sharing agreements with other enforcement and 
regulatory agencies. This creates a risk that the partner will 
claim any associated privileges are waived upon sharing that 
information. Because of the lack of established legal precedent 
in this context, the SEC and banking regulators have 
established statutory provisions clarifying privilege 
retention. This proposal would provide similar clarity to the 
CFTC's sharing of information and increase the scope and 
effectiveness of cooperation between the CFTC and other 
enforcement or regulatory agencies, domestic or abroad.

Section 114--Proprietary information

    This section clarifies that the CFTC has the authority to 
adopt rules and regulations to apply CEA Section 8 statutory 
disclosure of information limitations on types of proprietary 
information not already covered under Section 8. The provisions 
of Section 8 govern how and when the Commission may share 
information with other government entities (i.e., Federal, 
State, foreign). This section also requires the CFTC to create 
policies on the circumstances under which the CFTC will request 
proprietary information, and how the CFTC will safeguard, limit 
access, and protect proprietary information from unlawful use 
and disclosure. Given the growing dependence and use of 
proprietary information in derivatives trading, whether in the 
form of new technologies or trading strategies, this section 
provides market participants with a pathway to address concerns 
they may have regarding how such information is handled, 
shared, and protected at the agency.

Section 115--Authority to provide food and incidental assistance to 
        foreign officials hosted by the Commission

    This section provides the authority to expend appropriated 
funds for necessary logistic and administrative expenses 
including incidental meals, travel, local transportation, and 
related lodging and subsistence when there are meetings with 
foreign governmental and other regulatory officials that are 
hosted by the Commission. This is consistent with the SEC who 
was granted similar authority in its 2019 appropriation (Public 
Law No. 116-6).

Section 116--Extension of operations

    Section 116 authorizes the CFTC from FY 2020 through FY 
2025.

Section 117--Aiding and abetting

    Section 117 harmonizes CFTC and SEC standards for liability 
by expanding the CEA's aiding and abetting provisions to mirror 
the securities laws' inclusion of the ``reckless'' standard.

Section 118--Modernization of authority of the Commission to conduct 
        research, development, demonstration, and information programs

    Section 118 requires the Commission to create research and 
development programs and authorizes other transaction and term-
limited gift acceptance authorities in order to advance the 
Commission's understanding of emerging technologies. 
Technologies like artificial intelligence and advanced data 
analytics, distributed ledgers and blockchains, cryptography, 
cloud computing, and more are disrupting markets and creating 
new opportunities.
    The Committee recognizes that emerging financial 
technologies hold the promise to create new financial products, 
like digital assets, and also to remake existing institutions 
like clearinghouses, and provide greater insight to regulators 
by helping to better analyze the troves of data the Commission 
holds.
    Given this growing use of technology, it is important for 
the CFTC to understand how technology is changing and impacting 
markets under its jurisdiction. The research and development 
programs, along with the other transaction and gift acceptance 
authorities--which have been authorized by Congress for other 
agencies (e.g. Department of Defense, Office of Government 
Ethics)--gives the agency the tools necessary to interact and 
learn more about these technologies and be in a better position 
to promote responsible innovation.
    In providing these new authorities, the Committee reminds 
the Commission of the importance of Federal contracting law and 
reiterates that it does not intend these new authorities to be 
utilized for the day-to-day procurement requirements of the 
Commission. The section imposes significant restrictions on the 
use of the other transaction and gift authorities, including 
that any transaction entered into under either authority be 
related to a research and development plan adopted by the 
Commission. In addition, to promote transparency, this section 
requires notice and comment periods for the proposed program 
plan and the use of other transaction authority, the reporting 
of gifts within 30 days, and an annual report to the House and 
Senate Committees on Agriculture.

Section 119--Protecting customer property during commodity broker 
        bankruptcy

    CFTC Regulation 190.08(a)(1)(ii)(J) (17 C.F.R. 190) defines 
customer property as including cash, securities or other 
property of the debtor's estate, including the debtor's trading 
or operating accounts and commodities of the debtor held in 
inventory, but only to the extent that the property enumerated 
is insufficient to satisfy in full all claims of public 
customers.'' The Committee's plain reading of this CFTC 
regulation is that property of the debtor futures commission 
merchant (FCM), even though not held as customer property, 
becomes customer property to the extent necessary to satisfy 
net equity claims of public customers,'' who are defined in 
Regulation 190.01 as all customers other than certain control 
persons, affiliates, and related parties (i.e., non-public 
customers). In effect, in order to protect the funds of 
customers held in segregation, Regulation 190.08 subordinates 
the claims of non-public customers and non-customer creditors, 
other than properly perfected liens on such property of the 
debtor, to the claims of public customers with respect to the 
property of the FCM that was not held (and not required to be 
held) as customer property.
    However, in 2000, doubts as to the validity of Regulation 
190.08(a)(1)(ii)(J) arose after a Federal bankruptcy court (In 
re Griffin Trading Co., 245 B.R. 291 (Bankr. N.D. Ill. 2000)) 
rejected an attempt by the trustee to use a bankrupt commodity 
broker's estate to pay shortfalls in the customer accounts. 
Among the issues in the case, which was later settled, and 
resulted in no binding judicial precedent, was whether the 
CFTC's broad definition of customer property'' in Regulation 
190.08 would determine which assets could be used to repay 
customers. The court found that the CFTC exceeded its statutory 
authority in enacting Regulation 190.08 with a definition of 
customer property more expansive than that used in the U.S. 
Bankruptcy Code. Further, the court found that, any shortfall 
in the customer property as defined in 11 U.S.C. 761 must be 
treated as a general unsecured claim.'' This vacated court 
decision has left uncertainty about whether, in the event that 
customer assets are insufficient to cover all customer claims, 
customers can have first priority to a FCM's general estate 
assets until all customer claims are paid in full.
    In order to provide clarity that the CFTC did not exceed 
its authority to promulgate Regulation 190.08 under Section 
20(a) of the CEA, the Committee intends for this section to 
provide for the broad use of the assets of a commodity broker's 
estate, other than secured property (such as property held at a 
clearinghouse, including offset or netting rights of creditors 
with respect to such type of property), to satisfy shortfalls 
in customer property beyond what was held in customer 
segregated accounts at the time of a firm's failure.

Section 120--Elimination of the double-sided confirmation requirement 
        for swap data repositories

    Under Section 21 of the CEA, a defined duty of a swap data 
repository (SDR) is to confirm with both counterparties to a 
swap, the accuracy of submitted data. This has been interpreted 
as requiring a SDR to confirm the accuracy of data with both 
reporting and non-reporting counterparties. SDRs are able to 
easily confirm the data submitted by a reporting counterparty; 
however, they often do not have established means of 
communication with non-reporting counterparties. Furthermore, 
the section does not require counterparties to respond to the 
SDR's request, making the SDR duty to confirm an overly 
burdensome and often impossible task.
    This language provides the SDR with flexibility to seek 
confirmation from one or both counterparties, as determined by 
the Commission. While the Committee expects most, but not all, 
swap reporting can be confirmed effectively from one 
counterparty, specifically the reporting counterparty, 
flexibility has been preserved in case the Commission 
determines that a new type or class of swap is so complex and 
detailed that confirmation from both counterparties is 
necessary for accuracy. The amendment also directs 
counterparties to confirm with the SDR upon request.

Section 121--Whistleblower protections for internal disclosures

    In February 2018, the U.S. Supreme Court decided Digital 
Realty Trust, Inc. v. Somers, 138 S. Ct. 767 (2018), holding 
that the Dodd-Frank Act's anti-retaliation provision only 
applies to individuals who directly report violations of 
securities laws to the SEC. It is assumed that this precedent 
would apply equally to both whistleblowers under the securities 
laws and under the CEA, as the whistleblower provisions in both 
bodies of law mirror one another. This section expands the CEA 
definition of a whistleblower to clarify that individuals who 
report wrongdoing to their employers will also be protected 
from retaliation, independent of whether they report directly 
to the CFTC.
    The current CEA whistleblower definition is a person ``who 
provides information relating to a violation of the CEA to the 
CFTC.'' This section modifies the definition to also include a 
person ``who provides information regarding any conduct that 
the person reasonably believes violates any CFTC law, rule or 
regulation to: (1) a supervisor, if the employer is a CFTC 
registered entity, a self-regulatory organization, or a State 
securities regulator, or (2) another person working for the 
employer who the whistleblower reasonably believes has the 
authority to address the misconduct (e.g., internal reporting 
office or general counsel).''
    In addition, this section expedites payments to 
whistleblowers by requiring the CFTC to make an initial 
disposition on a claim for an award within one year after the 
deadline for filing the claim, while providing possible 
extensions for the CFTC under certain circumstances. The 
section also increases the deposits into the CFTC's Customer 
Protection Fund by $50 million to a level of $150 million and 
codifies an existing Government Accountability Office (GAO) 
authorization for the fund to be used for initiatives to 
educate stakeholders about whistleblower protections and 
incentives. The language in this section mirrors some of the 
proposed language in the Whistleblower Programs Improvement 
Act, S. 2529 and H.R. 4816 (116th Congress), as well as the 
Whistleblower Protection Reform Act, H.R. 2515 (116th 
Congress).

Section 122--Updating standards for natural persons to meet 
        requirements for qualified eligible persons

    Under regulations issued by the CFTC, CPOs and CTAs are 
exempt from certain disclosure requirements when only dealing 
with qualified eligible persons (QEPs). A natural person can 
qualify as a QEP if they meet the following conditions:
           have a new worth in excess of $1 million; or
           have an annual income in excess of $100,000 
        singly or $250,000 for a married couple; and
           owns securities with aggregate market value 
        of at least $2 million; or
           has on deposit with a futures commission 
        merchant at least $200,000 in margin.
    These income and investment figures were determined to be 
sufficient to demonstrate that a person was likely 
sophisticated enough to handle interactions with CPOs and CTAs 
without the customary customer protection disclosures required 
for retail customers. This rule was instituted in 1992 and 
these figures have not been updated for more than 25 years.
    This section would increase both the income and investment 
figures for natural persons and subsequently require periodic 
adjustments tied with inflation every three years.
    The Committee recognizes that many Americans have made 
investment decisions based on their ability to qualify as a QEP 
and their eligibility to participate in certain exempt 
commodity investment vehicles. Section 122 requires that the 
Commission, in implementing its new regulations, continue to 
permit investors to maintain or reduce, but not increase, their 
investment in an existing exempt commodity pool or with an 
existing exempt Commodity Trading Advisor, according to the QEP 
thresholds that were in place at the time of their last 
investment.

Section 123--Government Accountability Office study on aluminum markets

    Section 123 requires a GAO study addressing the aluminum 
markets in the U.S. and abroad, effectiveness and efficiency of 
the market for all market participants, factors and policies 
influencing aluminum supply, demand and movement globally, and 
effectiveness of government oversight of aluminum markets. To 
the extent that it is helpful, GAO should consult with the CFTC 
for data and insight into aluminum derivatives markets. In 
furtherance of this section, the Committee directs the 
Commission to provide GAO with any reasonable assistance it 
requests.
    This report will give lawmakers an in-depth understanding 
of the current aluminum markets. This report is due to the 
House Agriculture Committee and the Senate Agriculture, 
Nutrition, and Forestry Committee within 180 days of the 
signing of this bill.

Section 124--Response to foreign regulatory authority

    Section 124 provides that where a foreign authority, such 
as a non-U.S. supervisor or regulator, seeks to assert direct 
supervisory authority over U.S.-domiciled designated clearing 
organizations (DCOs), the Commission should review the 
appropriateness of exemptions granted to entities under the 
foreign authority's jurisdiction. The Commission's grant of 
exemptions and other relief to a foreign entity facilitates 
cross-border derivatives transactions between the United States 
and the foreign entity's home jurisdiction. Such relief is made 
in the interest of international comity and premised on the 
importance of robust, global capital markets to participants in 
both jurisdictions.
    The CFTC was one of the first regulators to take the lead 
on a cross-border recognition and deference approach, starting 
with foreign brokers in the 1980s and foreign exchanges in the 
1990s. Such recognition and deference undoubtedly contributed 
to the growth of foreign financial markets, as it provided a 
clear path for Americans to participate in those markets. It 
also provided American market participants with new 
counterparties and better opportunities to manage their risks. 
As deference and equivalence regimes have expanded to other 
regulatory jurisdictions, similar benefits have accrued across 
all participating jurisdictions.
    While the Committee has long viewed international 
cooperation as a positive development for capital markets, in 
certain circumstances it views the costs imposed by a lack of 
deference on specific issues as outweighing the benefits of 
other instances of cooperation. Where a foreign jurisdiction's 
rules call for actions that may not espouse international 
comity, including disrupting effective cooperation with the 
Commission in areas which present concerns of increased 
systemic risk, it calls into question the appropriateness of 
exemptions to entities in that jurisdiction.
    In light of the systemic importance of clearinghouses, 
derogations from international comity in the clearing space can 
be particularly concerning. Congress has set out in the CEA 
that the Commission is the principle, exclusive regulatory and 
supervisory authority of U.S.-domiciled DCOs. This encompasses 
administering any applicable regulatory and prudential 
requirements, and in discharging this responsibility, the 
Commission may consult and coordinate, as necessary, with other 
relevant authorities. This supervisory cooperation can 
facilitate effective risk management per the objectives of 
various involved domestic and foreign supervisors.
    To that end, Section 124 requires the Commission to review 
its exemptions granted to entities in the foreign authority's 
jurisdiction to determine whether the lack of comity would, in 
the Commission's discretion, call for the corresponding 
reversal of the exemptive relief. Specifically, the Committee 
directs the Commission's focus to the impacts of EMIR 2.2 and 
how regulations finalized under that law will alter the 
implementation of the 2016 Common Approach for Transatlantic 
CCPs (The Common Approach) agreed to by both the European 
Commission (EC) and the Commission.
    The Common Approach was signed in February 2016, after 
three years of negotiations, by the then-European Commissioner 
for Financial Stability, Financial Services and Capital Markets 
Union, Jonathan Hill, and the then-CFTC Chairman, Timothy 
Massad. In the agreement, the EC announced that it would adopt 
an equivalence decision with respect to CFTC requirements for 
U.S. CCPs which would allow the European Securities and Markets 
Authority (ESMA) to recognize U.S. CCPs as equivalently 
regulated to European Union (EU) CCPs. Once recognized by ESMA, 
U.S. CCPs would continue to be able to provide services in the 
EU while complying with CFTC requirements.
    The Common Approach also provided that the Commission would 
make a determination of comparability with respect to EU 
requirements, which would permit EU CCPs to provide services to 
U.S. clearing members and clients while complying with certain 
corresponding EU requirements. The CFTC staff would also 
propose to streamline the registration process for EU CCPs 
wishing to register with them.
    In March 2016, both the Commission and the EC fulfilled its 
commitments to each other under the Common Approach. Yet, 
subsequent events have called into question the EC's intention 
to maintain its commitments under that the agreement.
    On June 23, 2016, the United Kingdom voted to exit from the 
EU. In response, the EC granted ESMA new supervisory 
authorities (EMIR 2.2) to ensure ongoing oversight of the Euro 
currency and financial markets denominated in Euros. While the 
intention may have been to have greater oversight over British 
markets that were leaving the EU regulatory structure, EMIR 2.2 
has the consequence of capturing U.S. financial markets under 
ESMA's supervision, despite their limited exposure to the Euro. 
For all practical purposes, this proposed implementation of 
EMIR 2.2 would scrap the Common Approach.
    In 2019, the House Committee on Agriculture held two 
hearings where testimony on EMIR 2.2 was given:
     On May 1, 2019, at a Subcommittee on Commodity 
Exchanges, Energy, and Credit hearing entitled ``The State of 
the CFTC'' the following testimony was given pertaining to 
actions by the European Union regarding EMIR 2.2:

         ``Recently, EU co-legislators reached a political 
        agreement on the new amendments to the European Market 
        Infrastructure Regulation (EMIR 2.2) pertaining to the 
        regulation and supervision of central counterparties 
        (CCPs). To mark this occasion, I issued two statements: 
        a joint statement with Valdis Dombrovskis 
        (Dombrovskis), the Vice President of the European 
        Commission (EC), and a separate statement as Chair of 
        the CFTC. The statements publicly affirm that the 
        CFTC's concerns regarding the potential adverse impact 
        EMIR 2.2 on U.S. CCPs and the broader U.S. financial 
        markets remain a significant issue for the U.S. and it 
        is our expectation, that EU authorities will address 
        our concerns during the EMIR 2.2 legislative process. 
        The joint statement with Dombrovskis asserted that the 
        CFTC will continue to engage with EU authorities on 
        EMIR 2.2 through the next phase of the legislative 
        process, the drafting of the implementation regulations 
        (the Level 2 process), and that the EC will consider 
        the CFTC's concerns during this Level 2 process. It 
        also states that it is the expectation of the EC and 
        the CFTC that the implementation of EMIR 2.2, along 
        with the CFTC's on-going review of its cross-border 
        regime, will result in a future transatlantic 
        relationship between the EU and the CFTC, which will be 
        based on greater deference than there is now.''
                    Hon. Christopher Giancarlo, then-Chairman of the 
                            CFTC.

     On June 26, 2019, at a Subcommittee on Commodity 
Exchanges, Energy, and Credit hearing entitled ``Brexit and 
Other International Developments Affecting U.S. Derivatives 
Markets'' the following testimony was given pertaining to 
recent actions by the European Union regarding EMIR 2.2:

         ``Recent revisions to the European Market 
        Infrastructure Regulation legislation (EMIR 2.2) on 
        clearinghouse supervision may require direct compliance 
        with substantial elements of EU law and supervision by 
        EU regulators for U.S. clearinghouses deemed systemic 
        unless EU regulators find U.S. supervision to be 
        equivalent.
         If implemented without the proper recognition of home 
        country supervision, this could lead to contradictory 
        requirements, duplicative supervision and counter-
        reactions by global regulatory authorities. These EU 
        consultations, which are currently out for public 
        comment, may impact access to global markets if not 
        properly clarified and implemented.''
                    Hon. Walt Lukken, President and Chief Executive 
                            Officer, FIA.

         ``In effect, EMIR 2.2 and the ESMA Consultations 
        propose, in many cases, to supersede not only U.S. laws 
        but also CFTC regulations that were subject to a robust 
        notice and comment process. Instead of those 
        congressional and CFTC mandates, U.S. DCOs would be 
        subjected to recently developed E.U. laws and 
        regulations on risk management and governance which 
        were drafted with E.U. financial markets in mind. It is 
        notable that ESMA does not and will not under EMIR 2.2 
        or the ESMA Consultations, supervise any E.U. CCPs. In 
        fact, the E.U. policy-makers specifically considered 
        giving ESMA supervisory powers over E.U. CCPs as part 
        of the legislative process and decided to continue to 
        defer to the local regulators in the E.U. member 
        states.''
                    Hon. Terrance A. Duffy, Executive Chairman & 
                            President, CME Group Inc. (CME).

     In addition, on September 24, 2019, at the CFTC's 
Global Markets Advisory Committee (GMAC) meeting, EMIR 2.2 was 
a prominent part of the discussion:

         ``As currently envisioned, EMIR 2.2 could result in 
        one or more U.S. CCPs being designated systemically 
        important to the EU financial system. Such a `tier 2' 
        designation seemingly would, at a minimum, subject any 
        such U.S. CCPs to direct supervision by ESMA and, at 
        the extreme, require the relocation of any EU-derived 
        business to an EU-based entity. Direct supervision of 
        U.S. CCPs by European regulators has the potential to 
        introduce fragmentation into the U.S. financial markets 
        through inconsistent and contradictory risk management 
        requirements. It also has the potential to increase 
        systemic risk within the U.S. financial system.''
                    Hon. Heath Tarbert, Chairman of the CFTC.

    At our hearings in 2019 and those in years past, this 
Committee has long recognized the importance of seamless, 
global risk management markets and been a constant advocate for 
robust, effective international coordination. Such coordination 
is best built around a comprehensive regime of deference to 
jurisdictions which have regulations that lead to comparable 
regulatory outcomes, as both U.S. and the European regulators 
have already agreed to in the area of CCP regulations.
    As it has made clear repeatedly, this Committee remains 
deeply concerned about the path the EC is treading with EMIR 
2.2. Should the EC continue to pursue regulations which would 
abandon its commitments under the Common Approach and apply 
direct supervisory authority over U.S. financial markets, 
particularly CCPs, the Committee believes it is appropriate for 
the Commission to review its past grants of recognition and 
deference for European firms subject to the Commission's 
jurisdiction.

Section 125--Affiliate conditions

    This section contains two provisions meant to address 
problems arising from the 2015 amendment to the CEA regarding 
treasury affiliates. In Dodd-Frank, non-financial entities may 
claim an exemption from the swap clearing mandate. The law also 
allowed a financial entity affiliate (i.e., treasury affiliate) 
of the non-financial entity to claim the exemption if it was 
acting on behalf of, or as the agent for, the non-financial 
entity. Many treasury affiliates found the exemption cumbersome 
as they were taking upon themselves the risk of their end-
user's affiliates and not acting as an agent for the end-user. 
In response, the CFTC provided no-action relief to such 
treasury affiliates provided they and their end-user affiliates 
met certain conditions. In 2015, Congress attached to the 
Omnibus Appropriations Act of 2016, an amendment to codify this 
no-action relief.
    Unfortunately, the language did not match the conditions 
entirely and had unintended consequences for those end-user 
affiliates within the corporate group that did not have 
commercial risk mitigated through a treasury affiliate. One 
provision in this section addresses that problem by clarifying 
that non-financial affiliates that do not engage in swaps 
activity with its treasury affiliate may engage in swaps 
trading with other affiliates under the same corporate group.
    The other provision in this section provides more 
flexibility on the conditions the 2015 amendment required upon 
treasury affiliates seeking to utilize the swap clearing 
exception. Treasury affiliates can not only continue utilizing 
this exception for its hedging swaps for its end-user 
affiliate, but they can also now engage in non-hedging swaps 
for itself provided they meet certain conditions. First, they 
must demonstrate to the CFTC that their end-user hedging 
activity is in compliance with existing statutory requirements 
limiting use of the exception for hedging or mitigating 
commercial risk of the non-financial entities. Second, the 
treasury affiliate must otherwise comply with existing swap 
obligations for the non-hedging swap as a financial entity.

                    TITLE II--TECHNICAL CORRECTIONS

    Committee staff, CFTC staff, and House Legislative Counsel 
staff worked together to develop Title II and fix a number of 
statutory oversights and drafting errors.

Section 201--Correction of references

    Section 5h(f) refers to SEF core principles, whereas 
section 5h(g) is the intended provision under which a SEF can 
be exempt from registration due to being ``subject to 
comparable, comprehensive supervision and regulation.''
    Section 1a(2)(i) does not exist, and the provision is meant 
to reference the definition of ``excluded commodity'' in 
section 1a(19)(i).
    This section corrects a typographical error in the cross-
reference to the Administrative Procedure Act.

Section 202--Elimination of obsolete references to dealer options

    The provisions refer to activity that occurred prior to 
1978. Dealer options are no longer traded, and the Commission 
deleted the corresponding regulation (32.23) as part of its 
commodity options rulemaking.

Section 203--Updated trade data publication requirement

    The term ``exchange'' is not a defined term in the CEA, and 
this updated language reflects the current trade data 
publication requirements under the CEA.

Section 204--Flexibility for registered entities

    This section allows all registered entities to delegate 
functions under core principles to a third-party service 
provider. For consistency in regulation, SEFs, DCOs and SDRs 
should be allowed to delegate these functions as DCMs are 
currently able to do.

Section 205--Elimination of obsolete references to electronic trading 
        facilities

    The Commodity Futures Modernization Act (CFMA) added the 
term electronic trading facility'' to support two forms of 
trading that were abolished by the Dodd-Frank Act. There is no 
longer a need for this term in the CEA.

Section 206--Elimination of obsolete reference to alternative swap 
        execution facilities

    Initially, the Dodd-Frank Act referred to SEFs as 
``alternative swap execution facilities''. ``Alternative'' was 
dropped in later versions of the legislation, but not in this 
place.

Section 207--Elimination of redundant references to types of registered 
        entities.

    The reference to registered entities is sufficient. The 
deleted language is unnecessary.

Section 208--Clarification of Commission authority over swaps trading

    This section clarifies the Commission's authority under 
Section 8a includes swaps trading.

Section 209--Elimination of obsolete reference to the Commodity 
        Exchange Commission

    This strikes an obsolete reference to the Commodity 
Exchange Commission.

Section 210--Elimination of obsolete references to derivative 
        transaction execution facilities

    Derivatives Transaction Execution Facility (DTEF) was a 
type of registered entity created by the CFMA in 2000: it was 
abolished by the Dodd-Frank Act in 2010.

Section 211--Elimination of obsolete references to exempt boards of 
        trade

    Exempt Boards of Trade (EBOTs) were abolished by the Dodd- 
Frank Act in 2010.

Section 212--Elimination of completed reports

    Section 16a of the CEA required the CFTC to submit a study 
to the Congressional Agriculture Committees on the function of 
the National Futures Association. Section 23(h)(2)(C)(iii) of 
the CEA required the CFTC Inspector General to conduct a study 
on FOIA reports. This section would eliminate these studies as 
they are completed.

Section 213--Miscellaneous corrections

    This section provides a collection of additional 
miscellaneous statutory corrections that fix drafting errors 
from prior legislation.

Section 214--Clarification of petitioner and petition

    Section 14(e) of the CEA uses the terms appellant and 
appeal which is inconsistent with judicial review regulations 
similar to those referenced in this section. For consistency, 
those terms are changed to petitioner and petition 
respectively.

Section 215--Technical clarifications for retail foreign currency

    This section corrects omission of item (ee) from current 
section 2(c)(2)(B)(i)(II). It also updates cross-references to 
the reordered items in subparagraphs (B) and (C). Further, this 
section clarifies that the prohibition in current sections 
2(c)(2)(B)(iv)(I)(bb) and 2(c)(2)(C)(iii)(I)(bb) broadly apply 
to acting as a commodity trading advisor with respect to any 
agreement, contract, or transaction described in clause (i).

Section 216--Miscellaneous swap technical corrections

    This section updates references to the requirements of 
registered entities in Section 6b to include Section 5h. It 
updates Section 8a to specifically include swap contracts. This 
section also broadens the types of matters in Section 12(f) 
with which the CFTC may assist a foreign futures authority to 
any investigation relating to violations of laws, rules, or 
regulations enforced by the foreign futures authority. Last, it 
clarifies that Section 15(b) applies to bylaws, rules, or 
regulations of registered entities, as opposed to contract 
markets.

                      Section-by-Section Analysis


Sec. 1. Short title

    This section provides that the Act may be cited as the 
``CFTC Reauthorization Act of 2019''.

Sec. 2. Table of contents

                       TITLE I--POLICY AMENDMENTS

Sec. 101. Foreign futures authority

    This section clarifies that the definition of foreign 
futures authority includes foreign law enforcement authorities, 
which prosecute laws, rules, or regulations relating to 
futures, options, swaps, or commodities.

Sec. 102. Honors Program

    This section authorizes the Commodity Futures Trading 
Commission (CFTC) to establish an Honors Program under its 
appointment and compensation authority, and to coordinate with 
the Office of Personnel Management, as needed, to establish 
such a program.

Sec. 103. Advisory committee changes

    This section replaces language that outlines unique rules, 
which only govern the Energy and Environmental Markets Advisory 
Committee with a general authority for the CFTC to establish 
advisory committees under one single set of rules. It also 
changes the statute so that all advisory committees must be 
subject to the Federal Advisory Committee Act.

Sec. 104. Enhancement of Office of Minority and Women Inclusion at the 
        CFTC; internship program

    This section requires the CFTC's Office of Minority and 
Women Inclusion to comply with the requirements of Section 342 
of the Dodd-Frank Wall Street Reform and Consumer Protection 
Act of 2010, including:
           reporting directly to the head of the 
        agency;
           adopting standards for equal employment 
        opportunity within the CFTC;
           implementing policies to increase the 
        participation of minority- and women-owned businesses 
        in programs and contracts of agency;
           implementing policies to assess the 
        diversity policies of agency registrants; and
           advising the CFTC on the impacts of policies 
        and regulations on minority- and women-owned 
        businesses.
    This section requires the CFTC to adopt the joint standards 
established by the Interagency Policy Statement, or any 
successor Policy Statement, published to comply with Section 
342 of the Dodd-Frank Act.
    It further requires the Executive Director to establish an 
internship program for students attending qualified 
institutions, including Hispanic-serving agricultural colleges/
universities, 1994 land-grants (Tribal colleges/universities), 
1890 land-grants (historically black colleges/universities), 
and colleges/universities in insular areas with teaching/
extension programs in food/agricultural sciences.

Sec. 105. Detailing and resource-sharing

    This section authorizes the CFTC to accept assistance from 
other Federal agencies, as otherwise authorized by law, to 
accept details from other Federal agencies on a non-
reimbursable basis, and to accept and provide details of 
employees with foreign futures authorities on a reimbursable or 
non-reimbursable basis.

Sec. 106. Office of the Chief Economist

    This section establishes an Office of the Chief Economist 
(OCE) at the CFTC to serve as economic advisor to the CFTC. 
Amends the cost-benefit provisions of the Act to require that 
the CFTC coordinate with the OCE before its consideration of 
costs and benefits for its rulemakings. Updates the cost-
benefit provisions to include swaps and options, and market 
liquidity in its considerations.

Sec. 107. Equal consideration for holding companies

    This section permits the CFTC to extend an existing 
exemption from the clearing requirement provided to banks, 
savings and loans, and credit unions with assets of under $10 
billion to bank holding companies and savings and loan holding 
companies if they have aggregated assets, including the assets 
of any subsidiaries, of $10 billion or less.

Sec. 108. Exemption of qualified charitable organizations from 
        regulation as commodity pool operators

    This section establishes that persons acting as commodity 
pool operators or commodity trading advisors on behalf of 
church plans or other charitable organizations are not required 
to register with the CFTC.

Sec. 109. Digital commodities

    This section directs the CFTC to adopt rules detailing the 
content and availability of trade and trader data and other 
information that boards of trade and swap execution facilities 
must be able to access from cash markets of digital derivatives 
which settle to a benchmark.

Sec. 110. System safeguards

    This section amends existing core principles for designated 
contract markets, designated clearing organizations, and swap 
execution facilities to clarify that system safeguards, 
particularly for automated systems, should be resilient and 
maintain the confidentiality, integrity, and availability of 
data they contain. Applies amended system safeguard core 
principles to swap data repositories.

Sec. 111. Administration of swap execution facilities

    This section amends provisions affecting swap execution 
facilities (SEF) to--
           clarify that SEF emergency authority is to 
        facilitate the liquidation or transfer of open 
        positions on swaps as opposed to directly liquidating 
        or transferring them;
           clarify chief compliance officers (CCOs) may 
        perform other responsibilities for the SEF provided 
        there are no conflicts of interest between the new 
        responsibilities and regular duties of CCOs and the new 
        responsibilities do not impair the CCOs' performance of 
        regular duties;
           clarify policies and procedures CCOs must 
        establish and administer; and
           eliminate the statutory requirement that 
        CCOs sign annual reports, allow senior officers to 
        submit annual reports prepared by CCOs, and establish 
        that such reports must be materially accurate.

Sec. 112. Applicability of prohibitions on fraud and manipulation 
        activities outside the United States

    This section clarifies that the CFTC's various authorities 
to prosecute fraud, attempted fraud, manipulation, and 
attempted manipulation apply to activities outside the United 
States where such activities, independently or in conjunction 
with activities in the United States, have or would have a 
reasonably foreseeable substantial effect within the United 
States.

Sec. 113. Privilege retention

    This section facilitates cooperation between the CFTC, 
other agencies, and self-regulatory organizations by specifying 
that the CFTC does not waive certain privileges by sharing 
information with other Federal and State authorities, foreign 
authorities, and self-regulatory organizations. In turn, those 
authorities and organizations will also not have waived the 
same privileges by sharing information with the CFTC. The non-
waiver of privilege for information shared with the CFTC does 
not apply to information the Commission obtains from registered 
entities, registered futures associations, or self-regulatory 
organizations in an investigation or other adverse action. For 
the purposes of this section, ``privilege'' is defined as work-
product privilege, attorney-client privilege, governmental 
privilege, or any other privilege recognized under Federal, 
State or foreign law.

Sec. 114. Proprietary information

    This section clarifies the CFTC's authority to apply 
Section 8 disclosure protections to proprietary information 
obtained or received by the CFTC. Requires the CFTC to adopt 
policies to:
           address circumstances when the CFTC requests 
        proprietary information;
           safeguard such information;
           limit access to such information to 
        appropriate staff; and
           protect the information from unlawful use or 
        disclosure.
    Requires the CFTC, in sharing proprietary information with 
other governmental entities, to receive assurances that such 
entities maintain sufficient safeguards consistent with such 
policies and to apply disclosure limits upon such entities.

Sec. 115. Authority to provide food and incidental assistance to 
        foreign officials hosted by the CFTC

    This section authorizes the CFTC to incur expenses for 
meetings hosted by the CFTC with foreign officials to exchange 
views on derivative matters, including expenses relating to 
meals and local travel and transportation.

Sec. 116. Extension of operations

    This section authorizes the CFTC from FY 2020 through FY 
2025.

Sec. 117. Aiding and abetting

    This section adds a ``reckless'' standard to the CFTC's 
aiding and abetting provisions.

Sec. 118. Modernization of authority of the CFTC to conduct research, 
        development, demonstration, and information programs

    This section authorizes the CFTC to establish research, 
development, and information programs to further the purposes 
of the Commodity Exchange Act. Authorizes the CFTC to adopt a 
research and development plan for any such program established. 
Authorizes the CFTC to enter into transactions, notwithstanding 
Federal procurement laws, in furtherance of such research and 
development plans. Authorizes the CFTC to accept gifts of 
provision of access, use of facilities, personal property, or 
services, if such gift is in furtherance of a research and 
development plan. Requires reporting of gifts within 30 days of 
acceptance and annual reports to the House and Senate 
Agriculture Committees on use of other transaction or gift 
authorities.

Sec. 119. Protecting customer property during commodity broker 
        bankruptcy

    This section clarifies that when there is a shortfall in 
funds segregated for the benefit of customers during a 
commodity broker bankruptcy, assets from the debtor's estate 
may make up the shortfall.

Sec. 120. Elimination of the double-sided confirmation requirement for 
        swap data repositories

    This section changes the statutory requirements on swap 
data repositories (SDRs) to obtain confirmation of accuracy of 
swap data from both counterparties to any counterparty, as 
determined by the CFTC. Such counterparty is directed to comply 
with a SDR's rules and procedures to confirm the accuracy of 
such data.

Sec. 121. Whistleblower protections for internal disclosures

    This section expands the definition of a whistleblower from 
``a person who provides information relating to a violation of 
the CEA to the CFTC,'' to also include:
           a person who provides information regarding 
        any conduct that the person reasonably believes 
        violates any CFTC law, rule, or regulation to: a 
        supervisor (if the employer is a CFTC-registered 
        entity, a self-regulatory organization, or a State 
        securities regulator); or
           another person working for the employer who 
        the whistleblower reasonably believes has the authority 
        to address the misconduct (e.g., internal reporting 
        office or general counsel).
    Additionally, the section expedites payments to 
whistleblowers and increases the cap on the CFTC Consumer 
Protection Fund by $50 million.

Sec. 122. Updating standards for natural persons to meet requirements 
        for qualified eligible persons

    This section directs the CFTC to engage in rulemaking to 
update the requirements for natural persons to be qualified 
eligible persons (QEPs) for the purposes of providing relief to 
commodity pool operators (CPO) and commodity trading advisors 
(CTA) in their dealings with QEPs. Directs the CFTC in such 
rulemaking to increase net worth, income, and investment 
portfolio standards and index such standards to inflation. 
Requires the CFTC, in such rulemaking, to grandfather existing 
QEP status for QEPs prior to a change in requirements, for 
their previous investments, provided they do not liquidate 
their holdings or make new investments in their respective CPOs 
and CTAs.

Sec. 123. Government Accountability Office study on aluminum markets

    This section requires the Government Accountability Office 
to study the global aluminum market and return a report to the 
House and Senate Agriculture Committees.

Sec. 124. Response to foreign regulatory authority

    This section gives direction to the CFTC to review the 
appropriateness of current exemptions granted to entities in a 
foreign jurisdiction when regulators in such a jurisdiction are 
seeking to assert direct supervisory authority over U.S. 
clearinghouses.

Sec. 125. Affiliate conditions

    This section clarifies that a non-financial entity 
affiliate who does not enter into any swaps with its treasury 
affiliate may enter into swaps with any other affiliate within 
the corporate group and expands swap trading ability for 
affiliates to non-financial entities provided they can 
demonstrate to the CFTC their compliance with current statutory 
requirements for hedging or mitigating the commercial risk of 
such non-financial entities.

                      TITLE II--TECHNICAL CHANGES

    This title contains technical changes that have no effect 
on policy. The changes correct and clarify current CEA 
provisions, and remove obsolete references and drafting errors.

                        Committee Consideration


                              I. HEARINGS

    The Committee on Agriculture and Subcommittee on Commodity 
Exchanges, Energy, and Credit held five hearings in the 115th 
and 116th Congresses in anticipation of legislation to 
reauthorize the Commodity Futures Trading Commission (CFTC).
    On June 27, 2017, the full Committee on Agriculture held a 
hearing entitled ``Clearing the Next Crisis: Resilience, 
Recovery and Resolution of Derivative Clearinghouses'' where 
the following witnesses testified on matters included in H.R. 
4895:
           Mr. John Dabbs, Global Head of Prime 
        Derivatives, Credit Suisse, Washington, D.C.
           Ms. Amias Moore Gerety, Special Advisor, QED 
        Investors, Washington, D.C.
           Mr. Scott A. Hill, Chief Financial Officer, 
        Intercontinental Exchange, Atlanta, GA
           Mr. Jerrold Salzman, Of Counsel, Skadden, 
        Arps, Slate, Meagher & Flom, Chicago, IL; on behalf of 
        CME Group
           Mr. Robert Steigerwald, Senior Policy 
        Advisor, Federal Reserve Bank of Chicago, Chicago, IL
    On July 18, 2018, the full Committee on Agriculture held a 
hearing entitled ``Cryptocurrencies: Oversight of Assets in the 
Digital Age'' where the following witnesses testified on 
matters included in H.R. 4895:
           Ms. Amber Baldet, Co-Founder and CEO, 
        Clovyr, New York, NY
           Mr. Joshua Fairfield, William Donald Bain 
        Family Professor of Law, Washington and Lee University 
        School of Law, Staunton, VA
           The Honorable Gary Gensler, Senior Lecturer, 
        MIT Sloan School of Management, Brooklandville, MD
           Mr. Daniel Gorfine, Director, LabCFTC and 
        Chief Innovation Officer, CFTC, Washington, D.C.
           Mr. Scott Kupor, Managing Partner, 
        Andreessen Horowitz, Menlo Park, CA
           Mr. Lowell Ness, Managing Partner, Perkins 
        Coie LLP, Palo Alto, CA
    On July 25, 2018, the full Committee on Agriculture held a 
hearing entitled ``Examining the Upcoming Agenda for the 
Commodity Futures Trading Commission'' where Chairman 
Christopher Giancarlo testified on matters included in H.R. 
4895.
    On May 1, 2019, the Subcommittee on Commodity Exchanges, 
Credit, and Energy held a hearing entitled ``State of the 
CFTC'' where Chairman Christopher Giancarlo testified on 
matters included in H.R. 4895.
    On June 26, 2019, the Subcommittee on Commodity Exchanges, 
Energy, and Credit held a hearing entitled ``Brexit and Other 
International Developments Affecting U.S. Derivatives Markets'' 
where the following witnesses testified on matters included in 
H.R. 4895:
           The Honorable Terrence A. Duffy, Chairman 
        and CEO, CME Group, Chicago, IL
           Mr. Christopher Edmonds, Senior Vice 
        President of Financial Markets, Intercontinental 
        Exchange, Chicago, IL
           Mr. Daniel Maguire, CEO, LCH Group, London, 
        United Kingdom
           The Honorable Walt Lukken, President and 
        CEO, Futures Industry Association, Washington, D.C.
           Mr. Stephen Berger, Managing Director, 
        Global Head of Government and Regulatory Policy, 
        Citadel LLC, on behalf of Managed Funds Association, 
        New York, NY

                           II. FULL COMMITTEE

    On October 30, 2019, the Committee on Agriculture met 
pursuant to notice, with a quorum present, to consider H.R. 
4895. Chairman Peterson made an opening statement as did 
Ranking Member Conaway, Subcommittee Chairman David Scott, and 
Subcommittee Ranking Member Austin Scott.
    Ranking Member Conaway sought recognition to engage in a 
brief colloquy with Chairman Peterson regarding Section 112 of 
the legislation, which permits the CFTC to pursue fraud and 
manipulative activities which occur overseas and have an effect 
on the United States. Ranking Member Conaway expressed his 
desire for the Committee to work together in a bipartisan 
manner, going forward, to ensure that CFTC's authority is 
clear, precise, and does not interrupt legitimate business 
activities. Chairman Peterson thanked the Ranking Member for 
his comments and committed to work with him to avoid any 
unintended consequences from Section 112.
    Chairman Peterson placed H.R. 4895 before the Committee 
and, without objection, a first reading of the bill was waived 
and it was open to amendment. Chairman Peterson recognized 
himself to offer a Managers Amendment to the bill, which 
directed the CFTC to review the appropriateness of current 
exemptions granted to foreign entities in foreign jurisdictions 
that are seeking to assert direct supervisory authority over 
U.S. clearinghouses, clarified that a non-financial entity 
affiliate who does not enter into any swaps with its treasury 
affiliate may enter into swaps with any other affiliate within 
the corporate group, expanded swap trading ability for 
affiliates to non-financial entities provided they can 
demonstrate to the CFTC their compliance with current statutory 
requirements for hedging or mitigating the commercial risk of 
such non-financial entities, and made minor technical changes 
and corrections to the legislation.
    Ranking Member Conaway was recognized to offer comments in 
support of the Managers Amendment, highlighting specifically 
his support of the changes in Section 105, permitting the CFTC 
to exchange staff with foreign regulators.
    Ms. Adams asked to strike the last word and offered a brief 
statement in support of the legislation, specifically 
highlighting the provision of the bill which establishes an 
internship program for students attending 1890s land-grant 
universities, 1994 land-grant Tribal colleges, Hispanic-serving 
agricultural universities, and students in agricultural 
programs in U.S. territories.
    Ms. Plaskett asked to strike the last word and offered a 
brief statement in support of the legislation, but highlighted 
concerns around the new standard for extraterritoriality 
provided in section 112 which she stated might be overly broad 
and have a chilling effect on international commerce.
    Mr. Van Drew asked to strike the last word and offered a 
brief statement in support of the legislation, specifically 
highlighting the inclusion of language from H.R. 4325, 
establishing protections to retain privileges for information 
shared with the CFTC.
    Mr. Harder asked to strike the last word and offered a 
brief statement in support of the legislation, specifically 
highlighting the inclusion of language from H.R. 4247, the 
Financial Watchdog Support Act.
    Mrs. Hayes asked to strike the last word and offered a 
brief statement in support of the legislation, specifically 
highlighting language in Section 114 regarding safeguards for 
the handling of proprietary information.
    Mr. O'Halleran asked to strike the last word and offered a 
brief statement in support of the legislation, specifically 
highlighting his support of provisions giving the CFTC more 
tools to detect, investigate, and stop financial fraud.
    Mrs. Axne asked to strike the last word and offered a brief 
statement in support of the legislation, specifically 
highlighting language included from H.R. 4816, the 
Whistleblower Programs Improvement Act.
    Mr. Costa asked to strike the last word and offered a brief 
statement in support of the legislation and expressed his 
desire for the Subcommittee on Livestock and Foreign 
Agriculture to work closely with Chairman David Scott and 
Ranking Member Austin Scott to work out differences between the 
United States and European Union as it relates to trade.
    Mr. David Scott asked to strike the last word and offered a 
brief statement in support of the legislation, and his 
appreciation of the bipartisan nature of the bill. He also 
expressed concerns with the effects of Brexit and the EMIR 
regulations effort on U.S. markets.
    No further discussion was heard on the amendment, and by 
voice vote, the amendment passed.
    Ranking Member Conaway was recognized for a motion and 
moved that the bill, H.R. 4895, as amended, be reported 
favorably to the House with the recommendation that it do pass. 
By voice vote, the bill was passed.
    At the conclusion of the meeting, Chairman Peterson asked 
if any Member wished to file supplementary, minority, 
additional, or dissenting views to H.R. 4895: no request was 
made.
    Without objection, staff was given permission to make any 
necessary clerical, technical or conforming changes to reflect 
the intent of the Committee. Chairman Peterson thanked the 
Members and adjourned the meeting.

                            Committee Votes

    In compliance with clause 3(b) of rule XIII of the House of 
Representatives, H.R. 4895 was reported by voice vote with a 
majority quorum present. There was no request for a recorded 
vote.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee on Agriculture's 
oversight findings and recommendations are reflected in the 
body of this report.

           Budget Act Compliance (Sections 308, 402, and 423)

    The provisions of clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives and section 308(a)(1) of the 
Congressional Budget Act of 1974 (relating to estimates of new 
budget authority, new spending authority, new credit authority, 
or increased or decreased revenues or tax expenditures) are not 
considered applicable. The estimate and comparison required to 
be prepared by the Director of the Congressional Budget Office 
under clause 3(c)(3) of rule XIII of the Rules of the House of 
Representatives and sections 402 and 423 of the Congressional 
Budget Act of 1974 submitted to the Committee prior to the 
filing of this report are as follows:

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, November 25, 2019.
Hon. Collin C. Peterson,
Chairman, Committee on Agriculture,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4895, the CFTC 
Reauthorization Act of 2019.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is David Hughes.
            Sincerely,
                                         Phillip L. Swagel,
                                                          Director.
    Enclosure.

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    

    H.R. 4895 would authorize the appropriation of whatever 
amounts are necessary each year through 2025 for the operations 
of the Commodity Futures Trading Commission (CFTC). Under H.R. 
4895, the CFTC would:
           Adopt new rules regarding digital 
        commodities;
           Require commodities exchanges, derivatives 
        clearing organizations, and swap execution facilities 
        to safeguard their data and periodically test their 
        automated systems;
           Expand enforcement to cover violations that 
        occur outside the United States;
           Expand whistleblower protections; and
           Codify increased net worth, income, and 
        portfolio standards for investors who wish to trade in 
        certain sophisticated financial instruments including 
        hedge funds.
    Using information from the CFTC, CBO expects that the 
agency's cost of operations would not change substantially 
under H.R. 4895. Accordingly, CBO estimates that the 
authorization in the bill would equal the same amount each year 
as the CFTC received in 2019 ($268 million), with an increase 
each year through 2025 to account for expected inflation. 
Assuming appropriation of the estimated amounts and based on 
historical spending patterns, CBO estimates that implementing 
the bill would cost $1.1 billion over the 2020-2024 period (see 
Table 1) and $340 million after 2024. The costs of the 
legislation fall within budget function 370 (commerce and 
housing credit).\1\
---------------------------------------------------------------------------
    \1\See also CBO's Cost Estimates Explained, www.cbo.gov/
publication/54437; How CBO Prepares Cost Estimates, www.cbo.gov/
publication/53519; and Glossary, www.cbo.gov/publication/42904.

               TABLE 1.--ESTIMATED INCREASES IN SPENDING SUBJECT TO APPROPRIATION UNDER H.R. 4895
----------------------------------------------------------------------------------------------------------------
                                                                        By fiscal year, millions of dollars--
                                                                   ---------------------------------------------
                                                                     2020   2021   2022   2023   2024  2020-2024
----------------------------------------------------------------------------------------------------------------
Estimated Authorizationa..........................................      7    283    291    299    308     1,188
Estimated Outlays.................................................      6    252    284    292    301     1,135
----------------------------------------------------------------------------------------------------------------
CBO estimates that enacting H.R. 4895 also would increase revenues by less than $500,000 each year and by $2
  million over the 2020-2029 period.
a Although H.R. 4895 would authorize appropriations for the Commodity Futures Trading Commission for 2020, CBO
  estimates that $268 million has been allocated, on an annualized basis, from funds made available under the
  current continuing resolution (Public Law 116-69), which provided appropriations through December 20, 2019.
  CBO estimates that adjusting the 2019 level for inflation would authorize the appropriation of an additional
  $7 million in 2020.

    H.R. 4895 would authorize the CFTC to bring enforcement 
actions against, and secure civil monetary penalties from, 
people who recklessly assist violators of commodities law. 
Using information from the CFTC, CBO expects the agency would 
pursue additional cases related to violations of commodities 
law and estimates that collections of civil monetary penalties 
(which are recorded as revenues in the federal budget) would 
increase by $2 million over the 2020-2029 period.
    The bill contains private-sector mandates as defined in the 
Unfunded Mandates Reform Act (UMRA), but CBO cannot determine 
whether the aggregate cost of those mandates would exceed the 
threshold established in UMRA ($164 million in 2019, adjusted 
annually for inflation).
    H.R. 4895 would impose several new requirements that would 
broaden current practices and impose small changes to 
administrative procedures. Specifically, those provisions 
would:
           Require swap execution facilities to consult 
        and cooperate with other entities--including designated 
        contract markets--that are registered with the CFTC 
        concerning the rules that govern certain emergencies 
        (such as liquidation and suspension of swaps).
           Require chief compliance officers at swap 
        execution facilities to implement policies and 
        procedures regarding conflicts of interest.
           Expand Federal protections for 
        whistleblowers and prohibit employers from retaliating 
        against employees for disclosing information to their 
        supervisors about violations of CFTC rules or 
        regulations.
           Increase the net worth, income, and 
        portfolio thresholds that investors must meet to trade 
        in certain ``sophisticated funds,'' including futures 
        and hedge funds. Increasing the thresholds would raise 
        the barriers to entry for such funds, thus restricting 
        investors who seek to trade in such funds but not 
        affecting the status of investors who currently trade 
        in those funds.
    CBO estimates that the cost for private entities to comply 
with those provisions would be small.
    H.R. 4895 also would direct the CFTC to issue rules that 
would impose new requirements on private entities. 
Specifically, the bill would direct the CFTC to issue 
regulations establishing:
           Disclosure requirements that contract 
        markets and swap execution facilities must follow to 
        trade digital-commodity derivatives,
           Requirements that commodity brokers include 
        cash, securities, and other inventory of their 
        businesses in customer property in the event of the 
        broker's bankruptcy; and
           Requirements that swap execution facilities 
        publicly disclose information deemed necessary by the 
        CFTC.
    Because the CFTC has not yet established those rules, CBO 
cannot determine the costs to comply with these provisions.
    The bill contains no intergovernmental mandates as defined 
in UMRA.
    The CBO staff contacts for this estimate are David Hughes 
(for Federal costs), Joshua Shakin (for revenues), and Rachel 
Austin (for mandates). The estimate was reviewed by H. Samuel 
Papenfuss, Deputy Assistant Director for Budget Analysis.

                    Performance Goals and Objectives

    With respect to the requirement of clause 3(c)(4) of rule 
XIII of the Rules of the House of Representatives, the 
performance goals and objectives of this legislation are to 
reauthorize the Commodity Futures Trading Commission, to 
promote the integrity, resilience, and vibrancy of the U.S. 
derivatives markets through sound regulation, to maintain 
competitive and free markets, and for other purposes.

                        Committee Cost Estimate

    Pursuant to clause 3(d)(2) of rule XIII of the Rules of the 
House of Representatives, the Committee report incorporates the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to sections 402 and 423 of the 
Congressional Budget Act of 1974.

                      Advisory Committee Statement

    No advisory committee within the meaning of section 5(b) of 
the Federal Advisory Committee Act was created by this 
legislation.

                Applicability to the Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act (Public Law 
104-1).

                       Federal Mandates Statement

    The Committee adopted as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act (Public Law 104-4).

                           Earmark Statement

    H.R. 4895 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9(e), 9(f), or 9(g) of rule XXI of the Rules of the 
House Representatives.

                    Duplication of Federal Programs

    This bill does not establish or reauthorize a program of 
the Federal Government known to be duplicative of another 
Federal program, a program that was included in any report from 
the Government Accountability Office to Congress pursuant to 
section 21 of Public Law 111-139, or a program related to a 
program identified in the most recent Catalog of Federal 
Domestic Assistance.

                   Disclosure of Directed Rule Making

    The Committee estimates that H.R. 4895 includes the 
following rule makings within the meaning of 5 U.S.C. 551:
          Sec. 109 requires the Commission to adopt rules 
        detailing the content and availability of trade and 
        trader data and other information DCMs and SEFs must be 
        able to access from cash markets regarding their 
        derivative contracts that reference a digital 
        commodity.
          Sec. 122 requires the Commission to adopt a rule to 
        update its regulations governing the requirements for 
        natural persons to be qualified eligible persons who 
        must satisfy portfolio requirements, for the purposes 
        of providing relief to commodity trading advisors and 
        commodity pool operators in their dealings with 
        qualified eligible persons.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

                         COMMODITY EXCHANGE ACT




           *       *       *       *       *       *       *
SEC. 1A. DEFINITIONS.

   As used in this Act:
          (1) Alternative trading system.--The term 
        ``alternative trading system'' means an organization, 
        association, or group of persons that--
                  (A) is registered as a broker or dealer 
                pursuant to section 15(b) of the Securities 
                Exchange Act of 1934 (except paragraph (11) 
                thereof);
                  (B) performs the functions commonly performed 
                by an exchange (as defined in section 3(a)(1) 
                of the Securities Exchange Act of 1934);
                  (C) does not--
                          (i) set rules governing the conduct 
                        of subscribers other than the conduct 
                        of such subscribers' trading on the 
                        alternative trading system; or
                          (ii) discipline subscribers other 
                        than by exclusion from trading; and
                  (D) is exempt from the definition of the term 
                ``exchange'' under such section 3(a)(1) by rule 
                or regulation of the Securities and Exchange 
                Commission on terms that require compliance 
                with regulations of its trading functions.
          (2) Appropriate federal banking agency.--The term 
        ``appropriate Federal banking agency''--
                  (A) has the meaning given the term in section 
                3 of the Federal Deposit Insurance Act (12 
                U.S.C. 1813);
                  (B) means the Board in the case of a 
                noninsured State bank; and
                  (C) is the Farm Credit Administration for 
                farm credit system institutions.
          (3) Associated person of a security-based swap dealer 
        or major security-based swap participant.--The term 
        ``associated person of a security-based swap dealer or 
        major security-based swap participant'' has the meaning 
        given the term in section 3(a) of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78c(a)).
          (4) Associated person of a swap dealer or major swap 
        participant.--
                  (A) In general.--The term ``associated person 
                of a swap dealer or major swap participant'' 
                means a person who is associated with a swap 
                dealer or major swap participant as a partner, 
                officer, employee, or agent (or any person 
                occupying a similar status or performing 
                similar functions), in any capacity that 
                involves--
                          (i) the solicitation or acceptance of 
                        swaps; or
                          (ii) the supervision of any person or 
                        persons so engaged.
                  (B) Exclusion.--Other than for purposes of 
                section 4s(b)(6), the term ``associated person 
                of a swap dealer or major swap participant'' 
                does not include any person associated with a 
                swap dealer or major swap participant the 
                functions of which are solely clerical or 
                ministerial.
          (5) Board.--The term ``Board'' means the Board of 
        Governors of the Federal Reserve System.
          (6) Board of trade.--The term ``board of trade'' 
        means any organized exchange or other trading facility.
          (7) Cleared swap.--The term ``cleared swap'' means 
        any swap that is, directly or indirectly, submitted to 
        and cleared by a derivatives clearing organization 
        registered with the Commission.
          (8) Commission.--The term ``Commission'' means the 
        Commodity Futures Trading Commission established under 
        section 2(a)(2).
          (9) Commodity.--The term ``commodity'' means wheat, 
        cotton, rice, corn, oats, barley, rye, flaxseed, grain 
        sorghums, mill feeds, butter, eggs, Solanum tuberosum 
        (Irish potatoes), wool, wool tops, fats and oils 
        (including lard, tallow, cottonseed oil, peanut oil, 
        soybean oil, and all other fats and oils), cottonseed 
        meal, cottonseed, peanuts, soybeans, soybean meal, 
        livestock, livestock products, and frozen concentrated 
        orange juice, and all other goods and articles, except 
        onions (as provided by the first section of Public Law 
        85-839 (7 U.S.C. 13-1)) and motion picture box office 
        receipts (or any index, measure, value, or data related 
        to such receipts), and all services, rights, and 
        interests (except motion picture box office receipts, 
        or any index, measure, value or data related to such 
        receipts) in which contracts for future delivery are 
        presently or in the future dealt in.
          (10) Commodity pool.--
                  (A) In general.--The term ``commodity pool'' 
                means any investment trust, syndicate, or 
                similar form of enterprise operated for the 
                purpose of trading in commodity interests, 
                including any--
                          (i) commodity for future delivery, 
                        security futures product, or swap;
                          (ii) agreement, contract, or 
                        transaction described in section 
                        2(c)(2)(C)(i) or section 2(c)(2)(D)(i);
                          (iii) commodity option authorized 
                        under section 4c; or
                          (iv) leverage transaction authorized 
                        under section 19.
                  (B) Further definition.--The Commission, by 
                rule or regulation, may include within, or 
                exclude from, the term ``commodity pool'' any 
                investment trust, syndicate, or similar form of 
                enterprise if the Commission determines that 
                the rule or regulation will effectuate the 
                purposes of this Act.
          (11) Commodity pool operator.--
                  (A) In general.--The term ``commodity pool 
                operator'' means any person--
                          (i) engaged in a business that is of 
                        the nature of a commodity pool, 
                        investment trust, syndicate, or similar 
                        form of enterprise, and who, in 
                        connection therewith, solicits, 
                        accepts, or receives from others, 
                        funds, securities, or property, either 
                        directly or through capital 
                        contributions, the sale of stock or 
                        other forms of securities, or 
                        otherwise, for the purpose of trading 
                        in commodity interests, including any--
                                  (I) commodity for future 
                                delivery, security futures 
                                product, or swap;
                                  (II) agreement, contract, or 
                                transaction described in 
                                section 2(c)(2)(C)(i) or 
                                section 2(c)(2)(D)(i);
                                  (III) commodity option 
                                authorized under section 4c; or
                                  (IV) leverage transaction 
                                authorized under section 19; or
                          (ii) who is registered with the 
                        Commission as a commodity pool 
                        operator.
                  (B) Further definition.--The Commission, by 
                rule or regulation, may include within, or 
                exclude from, the term ``commodity pool 
                operator'' any person engaged in a business 
                that is of the nature of a commodity pool, 
                investment trust, syndicate, or similar form of 
                enterprise if the Commission determines that 
                the rule or regulation will effectuate the 
                purposes of this Act.
          (12) Commodity trading advisor.--
                  (A) In general.--Except as otherwise provided 
                in this paragraph, the term ``commodity trading 
                advisor'' means any person who--
                          (i) for compensation or profit, 
                        engages in the business of advising 
                        others, either directly or through 
                        publications, writings, or electronic 
                        media, as to the value of or the 
                        advisability of trading in--
                                  (I) any contract of sale of a 
                                commodity for future delivery, 
                                security futures product, or 
                                swap;
                                  (II) any agreement, contract, 
                                or transaction described in 
                                section 2(c)(2)(C)(i) or 
                                section 2(c)(2)(D)(i);
                                  (III) any commodity option 
                                authorized under section 4c; or
                                  (IV) any leverage transaction 
                                authorized under section 19;
                          (ii) for compensation or profit, and 
                        as part of a regular business, issues 
                        or promulgates analyses or reports 
                        concerning any of the activities 
                        referred to in clause (i);
                          (iii) is registered with the 
                        Commission as a commodity trading 
                        advisor; or
                          (iv) the Commission, by rule or 
                        regulation, may include if the 
                        Commission determines that the rule or 
                        regulation will effectuate the purposes 
                        of this Act.
                  (B) Exclusions.--Subject to subparagraph (C), 
                the term ``commodity trading advisor'' does not 
                include--
                          (i) any bank or trust company or any 
                        person acting as an employee thereof;
                          (ii) any news reporter, news 
                        columnist, or news editor of the print 
                        or electronic media, or any lawyer, 
                        accountant, or teacher;
                          (iii) any floor broker or futures 
                        commission merchant;
                          (iv) the publisher or producer of any 
                        print or electronic data of general and 
                        regular dissemination, including its 
                        employees;
                          (v) the fiduciary of any defined 
                        benefit plan that is subject to the 
                        Employee Retirement Income Security Act 
                        of 1974 (29 U.S.C. 1001 et seq.);
                          (vi) any contract market or 
                        [derivatives transaction execution 
                        facility] swap execution facility; and
                          (vii) such other persons not within 
                        the intent of this paragraph as the 
                        Commission may specify by rule, 
                        regulation, or order.
                  (C) Incidental services.--Subparagraph (B) 
                shall apply only if the furnishing of such 
                services by persons referred to in subparagraph 
                (B) is solely incidental to the conduct of 
                their business or profession.
                  (D) Advisors.--The Commission, by rule or 
                regulation, may include within the term 
                ``commodity trading advisor'', any person 
                advising as to the value of commodities or 
                issuing reports or analyses concerning 
                commodities if the Commission determines that 
                the rule or regulation will effectuate the 
                purposes of this paragraph.
          (13) Contract of sale.--The term ``contract of sale'' 
        includes sales, agreements of sale, and agreements to 
        sell.
          (14) Cooperative association of producers.--The term 
        ``cooperative association of producers'' means any 
        cooperative association, corporate, or otherwise, not 
        less than 75 percent in good faith owned or controlled, 
        directly or indirectly, by producers of agricultural 
        products and otherwise complying with the Act of 
        February 18, 1922 (42 Stat. 388, chapter 57; 7 U.S.C. 
        291 and 292), including any organization acting for a 
        group of such associations and owned or controlled by 
        such associations, except that business done for or 
        with the United States, or any agency thereof, shall 
        not be considered either member or nonmember business 
        in determining the compliance of any such association 
        with this Act.
          (15) Derivatives clearing organization.--
                  (A) In general.--The term ``derivatives 
                clearing organization'' means a clearinghouse, 
                clearing association, clearing corporation, or 
                similar entity, facility, system, or 
                organization that, with respect to an 
                agreement, contract, or transaction--
                          (i) enables each party to the 
                        agreement, contract, or transaction to 
                        substitute, through novation or 
                        otherwise, the credit of the 
                        derivatives clearing organization for 
                        the credit of the parties;
                          (ii) arranges or provides, on a 
                        multilateral basis, for the settlement 
                        or netting of obligations resulting 
                        from such agreements, contracts, or 
                        transactions executed by participants 
                        in the derivatives clearing 
                        organization; or
                          (iii) otherwise provides clearing 
                        services or arrangements that mutualize 
                        or transfer among participants in the 
                        derivatives clearing organization the 
                        credit risk arising from such 
                        agreements, contracts, or transactions 
                        executed by the participants.
                  (B) Exclusions.--The term ``derivatives 
                clearing organization'' does not include an 
                entity, facility, system, or organization 
                solely because it arranges or provides for--
                          (i) settlement, netting, or novation 
                        of obligations resulting from 
                        agreements, contracts, or transactions, 
                        on a bilateral basis and without a 
                        central counterparty;
                          (ii) settlement or netting of cash 
                        payments through an interbank payment 
                        system; or
                          (iii) settlement, netting, or 
                        novation of obligations resulting from 
                        a sale of a commodity in a transaction 
                        in the spot market for the commodity.
          (16) Electronic trading facility.--The term 
        ``electronic trading facility'' means a trading 
        facility that--
                  (A) operates by means of an electronic or 
                telecommunications network; and
                  (B) maintains an automated audit trail of 
                bids, offers, and the matching of orders or the 
                execution of transactions on the facility.
          (17) Eligible commercial entity.--The term ``eligible 
        commercial entity'' means, with respect to an 
        agreement, contract or transaction in a commodity--
                  (A) an eligible contract participant 
                described in clause (i), (ii), (v), (vii), 
                (viii), or (ix) of paragraph (18)(A) that, in 
                connection with its business--
                          (i) has a demonstrable ability, 
                        directly or through separate 
                        contractual arrangements, to make or 
                        take delivery of the underlying 
                        commodity;
                          (ii) incurs risks, in addition to 
                        price risk, related to the commodity; 
                        or
                          (iii) is a dealer that regularly 
                        provides risk management or hedging 
                        services to, or engages in market-
                        making activities with, the foregoing 
                        entities involving transactions to 
                        purchase or sell the commodity or 
                        derivative agreements, contracts, or 
                        transactions in the commodity;
                  (B) an eligible contract participant, other 
                than a natural person or an instrumentality, 
                department, or agency of a State or local 
                governmental entity, that--
                          (i) regularly enters into 
                        transactions to purchase or sell the 
                        commodity or derivative agreements, 
                        contracts, or transactions in the 
                        commodity; and
                          (ii) either--
                                  (I) in the case of a 
                                collective investment vehicle 
                                whose participants include 
                                persons other than--
                                          (aa) qualified 
                                        eligible persons, as 
                                        defined in Commission 
                                        rule 4.7(a) (17 CFR 
                                        4.7(a));
                                          (bb) accredited 
                                        investors, as defined 
                                        in Regulation D of the 
                                        Securities and Exchange 
                                        Commission under the 
                                        Securities Act of 1933 
                                        (17 CFR 230.501(a)), 
                                        with total assets of 
                                        $2,000,000; or
                                          (cc) qualified 
                                        purchasers, as defined 
                                        in section 2(a)(51)(A) 
                                        of the Investment 
                                        Company Act of 1940;
                                in each case as in effect on 
                                the date of the enactment of 
                                the Commodity Futures 
                                Modernization Act of 2000, has, 
                                or is one of a group of 
                                vehicles under common control 
                                or management having in the 
                                aggregate, $1,000,000,000 in 
                                total assets; or
                                  (II) in the case of other 
                                persons, has, or is one of a 
                                group of persons under common 
                                control or management having in 
                                the aggregate, $100,000,000 in 
                                total assets; or
                  (C) such other persons as the Commission 
                shall determine appropriate and shall designate 
                by rule, regulation, or order.
          (18) Eligible contract participant.--The term 
        ``eligible contract participant'' means--
                  (A) acting for its own account--
                          (i) a financial institution;
                          (ii) an insurance company that is 
                        regulated by a State, or that is 
                        regulated by a foreign government and 
                        is subject to comparable regulation as 
                        determined by the Commission, including 
                        a regulated subsidiary or affiliate of 
                        such an insurance company;
                          (iii) an investment company subject 
                        to regulation under the Investment 
                        Company Act of 1940 (15 U.S.C. 80a-1 et 
                        seq.) or a foreign person performing a 
                        similar role or function subject as 
                        such to foreign regulation (regardless 
                        of whether each investor in the 
                        investment company or the foreign 
                        person is itself an eligible contract 
                        participant);
                          (iv) a commodity pool that--
                                  (I) has total assets 
                                exceeding $5,000,000; and
                                  (II) is formed and operated 
                                by a person subject to 
                                regulation under this Act or a 
                                foreign person performing a 
                                similar role or function 
                                subject as such to foreign 
                                regulation (regardless of 
                                whether each investor in the 
                                commodity pool or the foreign 
                                person is itself an eligible 
                                contract participant) provided, 
                                however, that for purposes of 
                                section 2(c)(2)(B)(vi) and 
                                section 2(c)(2)(C)(vii), the 
                                term ``eligible contract 
                                participant'' shall not include 
                                a commodity pool in which any 
                                participant is not otherwise an 
                                eligible contract participant;
                          (v) a corporation, partnership, 
                        proprietorship, organization, trust, or 
                        other entity--
                                  (I) that has total assets 
                                exceeding $10,000,000;
                                  (II) the obligations of which 
                                under an agreement, contract, 
                                or transaction are guaranteed 
                                or otherwise supported by a 
                                letter of credit or keepwell, 
                                support, or other agreement by 
                                an entity described in 
                                subclause (I), in clause (i), 
                                (ii), (iii), (iv), or (vii), or 
                                in subparagraph (C); or
                                  (III) that--
                                          (aa) has a net worth 
                                        exceeding $1,000,000; 
                                        and
                                          (bb) enters into an 
                                        agreement, contract, or 
                                        transaction in 
                                        connection with the 
                                        conduct of the entity's 
                                        business or to manage 
                                        the risk associated 
                                        with an asset or 
                                        liability owned or 
                                        incurred or reasonably 
                                        likely to be owned or 
                                        incurred by the entity 
                                        in the conduct of the 
                                        entity's business;
                          (vi) an employee benefit plan subject 
                        to the Employee Retirement Income 
                        Security Act of 1974 (29 U.S.C. 1001 et 
                        seq.), a governmental employee benefit 
                        plan, or a foreign person performing a 
                        similar role or function subject as 
                        such to foreign regulation--
                                  (I) that has total assets 
                                exceeding $5,000,000; or
                                  (II) the investment decisions 
                                of which are made by--
                                          (aa) an investment 
                                        adviser or commodity 
                                        trading advisor subject 
                                        to regulation under the 
                                        Investment Advisers Act 
                                        of 1940 (15 U.S.C. 80b-
                                        1 et seq.) or this Act;
                                          (bb) a foreign person 
                                        performing a similar 
                                        role or function 
                                        subject as such to 
                                        foreign regulation;
                                          (cc) a financial 
                                        institution; or
                                          (dd) an insurance 
                                        company described in 
                                        clause (ii), or a 
                                        regulated subsidiary or 
                                        affiliate of such an 
                                        insurance company;
                          (vii)(I) a governmental entity 
                        (including the United States, a State, 
                        or a foreign government) or political 
                        subdivision of a governmental entity;
                          (II) a multinational or supranational 
                        government entity; or
                          (III) an instrumentality, agency, or 
                        department of an entity described in 
                        subclause (I) or (II);
                        except that such term does not include 
                        an entity, instrumentality, agency, or 
                        department referred to in subclause (I) 
                        or (III) of this clause unless (aa) the 
                        entity, instrumentality, agency, or 
                        department is a person described in 
                        clause (i), (ii), or (iii) of paragraph 
                        (17)(A); (bb) the entity, 
                        instrumentality, agency, or department 
                        owns and invests on a discretionary 
                        basis $50,000,000 or more in 
                        investments; or (cc) the agreement, 
                        contract, or transaction is offered by, 
                        and entered into with, an entity that 
                        is listed in any of subclauses (I) 
                        through (VI) of section 2(c)(2)(B)(ii);
                          (viii)(I) a broker or dealer subject 
                        to regulation under the Securities 
                        Exchange Act of 1934 (15 U.S.C. 78a et 
                        seq.) or a foreign person performing a 
                        similar role or function subject as 
                        such to foreign regulation, except 
                        that, if the broker or dealer or 
                        foreign person is a natural person or 
                        proprietorship, the broker or dealer or 
                        foreign person shall not be considered 
                        to be an eligible contract participant 
                        unless the broker or dealer or foreign 
                        person also meets the requirements of 
                        clause (v) or (xi);
                          (II) an associated person of a 
                        registered broker or dealer concerning 
                        the financial or securities activities 
                        of which the registered person makes 
                        and keeps records under section 15C(b) 
                        or 17(h) of the Securities Exchange Act 
                        of 1934 (15 U.S.C. 78o-5(b), 78q(h));
                          (III) an investment bank holding 
                        company (as defined in section 17(i) of 
                        the Securities Exchange Act of 1934 (15 
                        U.S.C. 78q(i));
                          (ix) a futures commission merchant 
                        subject to regulation under this Act or 
                        a foreign person performing a similar 
                        role or function subject as such to 
                        foreign regulation, except that, if the 
                        futures commission merchant or foreign 
                        person is a natural person or 
                        proprietorship, the futures commission 
                        merchant or foreign person shall not be 
                        considered to be an eligible contract 
                        participant unless the futures 
                        commission merchant or foreign person 
                        also meets the requirements of clause 
                        (v) or (xi);
                          (x) a floor broker or floor trader 
                        subject to regulation under this Act in 
                        connection with any transaction that 
                        takes place on or through the 
                        facilities of a registered entity 
                        [(other than an electronic trading 
                        facility with respect to a significant 
                        price discovery contract) or an exempt 
                        board of trade], or any affiliate 
                        thereof, on which such person regularly 
                        trades; or
                          (xi) an individual who has amounts 
                        invested on a discretionary basis, the 
                        aggregate of which is in excess of--
                                  (I) $10,000,000; or
                                  (II) $5,000,000 and who 
                                enters into the agreement, 
                                contract, or transaction in 
                                order to manage the risk 
                                associated with an asset owned 
                                or liability incurred, or 
                                reasonably likely to be owned 
                                or incurred, by the individual;
                  (B)(i) a person described in clause (i), 
                (ii), (iv), (v), (viii), (ix), or (x) of 
                subparagraph (A) or in subparagraph (C), acting 
                as broker or performing an equivalent agency 
                function on behalf of another person described 
                in subparagraph (A) or (C); or
                  (ii) an investment adviser subject to 
                regulation under the Investment Advisers Act of 
                1940, a commodity trading advisor subject to 
                regulation under this Act, a foreign person 
                performing a similar role or function subject 
                as such to foreign regulation, or a person 
                described in clause (i), (ii), (iv), (v), 
                (viii), (ix), or (x) of subparagraph (A) or in 
                subparagraph (C), in any such case acting as 
                investment manager or fiduciary (but excluding 
                a person acting as broker or performing an 
                equivalent agency function) for another person 
                described in subparagraph (A) or (C) and who is 
                authorized by such person to commit such person 
                to the transaction; or
                  (C) any other person that the Commission 
                determines to be eligible in light of the 
                financial or other qualifications of the 
                person.
          (19) Excluded commodity.--The term ``excluded 
        commodity'' means--
                  
                          (i) an interest rate, exchange rate, 
                        currency, security, security index, 
                        credit risk or measure, debt or equity 
                        instrument, index or measure of 
                        inflation, or other macroeconomic index 
                        or measure;
                          (ii) any other rate, differential, 
                        index, or measure of economic or 
                        commercial risk, return, or value that 
                        is--
                                  (I) not based in substantial 
                                part on the value of a narrow 
                                group of commodities not 
                                described in clause (i); or
                                  (II) based solely on one or 
                                more commodities that have no 
                                cash market;
                          (iii) any economic or commercial 
                        index based on prices, rates, values, 
                        or levels that are not within the 
                        control of any party to the relevant 
                        contract, agreement, or transaction; or
                          (iv) an occurrence, extent of an 
                        occurrence, or contingency (other than 
                        a change in the price, rate, value, or 
                        level of a commodity not described in 
                        clause (i)) that is--
                                  (I) beyond the control of the 
                                parties to the relevant 
                                contract, agreement, or 
                                transaction; and
                                  (II) associated with a 
                                financial, commercial, or 
                                economic consequence.
          (20) Exempt commodity.--The term ``exempt commodity'' 
        means a commodity that is not an excluded commodity or 
        an agricultural commodity.
          (21) Financial institution.--The term ``financial 
        institution'' means--
                  (A) a corporation operating under the fifth 
                undesignated paragraph of section 25 of the 
                Federal Reserve Act (12 U.S.C. 603), commonly 
                known as ``an agreement corporation'';
                  (B) a corporation organized under section 25A 
                of the Federal Reserve Act (12 U.S.C. 611 et 
                seq.), commonly known as an ``Edge Act 
                corporation'';
                  (C) an institution that is regulated by the 
                Farm Credit Administration;
                  (D) a Federal credit union or State credit 
                union (as defined in section 101 of the Federal 
                Credit Union Act (12 U.S.C. 1752));
                  (E) a depository institution (as defined in 
                section 3 of the Federal Deposit Insurance Act 
                (12 U.S.C. 1813));
                  (F) a foreign bank or a branch or agency of a 
                foreign bank (each as defined in section 1(b) 
                of the International Banking Act of 1978 (12 
                U.S.C. 3101(b)));
                  (G) any financial holding company (as defined 
                in section 2 of the Bank Holding Company Act of 
                1956);
                  (H) a trust company; or
                  (I) a similarly regulated subsidiary or 
                affiliate of an entity described in any of 
                subparagraphs (A) through (H).
          (22) Floor broker.--
                  (A) In general.--The term ``floor broker'' 
                means any person--
                          (i) who, in or surrounding any pit, 
                        ring, post, or other place provided by 
                        a contract market for the meeting of 
                        persons similarly engaged, shall 
                        purchase or sell for any other person--
                                  (I) any commodity for future 
                                delivery, security futures 
                                product, or swap; or
                                  (II) any commodity option 
                                authorized under section 4c; or
                          (ii) who is registered with the 
                        Commission as a floor broker.
                  (B) Further definition.--The Commission, by 
                rule or regulation, may include within, or 
                exclude from, the term ``floor broker'' any 
                person in or surrounding any pit, ring, post, 
                or other place provided by a contract market 
                for the meeting of persons similarly engaged 
                who trades for any other person if the 
                Commission determines that the rule or 
                regulation will effectuate the purposes of this 
                Act.
          (23) Floor trader.--
                  (A) In general.--The term ``floor trader'' 
                means any person--
                          (i) who, in or surrounding any pit, 
                        ring, post, or other place provided by 
                        a contract market for the meeting of 
                        persons similarly engaged, purchases, 
                        or sells solely for such person's own 
                        account--
                                  (I) any commodity for future 
                                delivery, security futures 
                                product, or swap; or
                                  (II) any commodity option 
                                authorized under section 4c; or
                          (ii) who is registered with the 
                        Commission as a floor trader.
                  (B) Further definition.--The Commission, by 
                rule or regulation, may include within, or 
                exclude from, the term ``floor trader'' any 
                person in or surrounding any pit, ring, post, 
                or other place provided by a contract market 
                for the meeting of persons similarly engaged 
                who trades solely for such person's own account 
                if the Commission determines that the rule or 
                regulation will effectuate the purposes of this 
                Act.
          (24) Foreign exchange forward.--The term ``foreign 
        exchange forward'' means a transaction that solely 
        involves the exchange of 2 different currencies on a 
        specific future date at a fixed rate agreed upon on the 
        inception of the contract covering the exchange.
          (25) Foreign exchange swap.--The term ``foreign 
        exchange swap'' means a transaction that solely 
        involves--
                  (A) an exchange of 2 different currencies on 
                a specific date at a fixed rate that is agreed 
                upon on the inception of the contract covering 
                the exchange; and
                  (B) a reverse exchange of the 2 currencies 
                described in subparagraph (A) at a later date 
                and at a fixed rate that is agreed upon on the 
                inception of the contract covering the 
                exchange.
          [(26) Foreign futures authority.--The term ``foreign 
        futures authority'' means any foreign government, or 
        any department, agency, governmental body, or 
        regulatory organization empowered by a foreign 
        government to administer or enforce a law, rule, or 
        regulation as it relates to a futures or options 
        matter, or any department or agency of a political 
        subdivision of a foreign government empowered to 
        administer or enforce a law, rule, or regulation as it 
        relates to a futures or options matter.]
          (26) Foreign futures authority.--The term ``foreign 
        futures authority'' means any foreign government, or 
        any law enforcement authority, department, central 
        bank, ministry, agency, governmental body, or 
        regulatory organization empowered by a foreign 
        government to administer, enforce, or prosecute a law, 
        rule, or regulation relating to matters involving 
        futures, options, swaps, or commodities, or any such 
        authority, department, or agency of a political 
        subdivision of a foreign government empowered to 
        administer, enforce, or prosecute a law, rule, or 
        regulation as it relates to such matters.
          (27) Future delivery.--The term ``future delivery'' 
        does not include any sale of any cash commodity for 
        deferred shipment or delivery.
          (28) Futures commission merchant.--
                  (A) In general.--The term ``futures 
                commission merchant'' means an individual, 
                association, partnership, corporation, or 
                trust--
                          (i) that--
                                  (I) is--
                                          (aa) engaged in 
                                        soliciting or in 
                                        accepting orders for--
                                                  (AA) the 
                                                purchase or 
                                                sale of a 
                                                commodity for 
                                                future 
                                                delivery;
                                                  (BB) a 
                                                security 
                                                futures 
                                                product;
                                                  (CC) a swap;
                                                  (DD) any 
                                                agreement, 
                                                contract, or 
                                                transaction 
                                                described in 
                                                section 
                                                2(c)(2)(C)(i) 
                                                or section 
                                                2(c)(2)(D)(i);
                                                  (EE) any 
                                                commodity 
                                                option 
                                                authorized 
                                                under section 
                                                4c; or
                                                  (FF) any 
                                                leverage 
                                                transaction 
                                                authorized 
                                                under section 
                                                19; or
                                          (bb) acting as a 
                                        counterparty in any 
                                        agreement, contract, or 
                                        transaction described 
                                        in section 
                                        2(c)(2)(C)(i) or 
                                        section 2(c)(2)(D)(i); 
                                        and
                                  (II) in or in connection with 
                                the activities described in 
                                items (aa) or (bb) of subclause 
                                (I), accepts any money, 
                                securities, or property (or 
                                extends credit in lieu thereof) 
                                to margin, guarantee, or secure 
                                any trades or contracts that 
                                result or may result therefrom; 
                                or
                          (ii) that is registered with the 
                        Commission as a futures commission 
                        merchant.
                  (B) Further definition.--The Commission, by 
                rule or regulation, may include within, or 
                exclude from, the term ``futures commission 
                merchant'' any person who engages in soliciting 
                or accepting orders for, or acting as a 
                counterparty in, any agreement, contract, or 
                transaction subject to this Act, and who 
                accepts any money, securities, or property (or 
                extends credit in lieu thereof) to margin, 
                guarantee, or secure any trades or contracts 
                that result or may result therefrom, if the 
                Commission determines that the rule or 
                regulation will effectuate the purposes of this 
                Act.
          (29) Hybrid instrument.--The term ``hybrid 
        instrument'' means a security having one or more 
        payments indexed to the value, level, or rate of, or 
        providing for the delivery of, one or more commodities.
          (30) Interstate commerce.--The term ``interstate 
        commerce'' means commerce--
                  (A) between any State, territory, or 
                possession, or the District of Columbia, and 
                any place outside thereof; or
                  (B) between points within the same State, 
                territory, or possession, or the District of 
                Columbia, but through any place outside 
                thereof, or within any territory or possession, 
                or the District of Columbia.
          (31) Introducing broker.--
                  (A) In general.--The term ``introducing 
                broker'' means any person (except an individual 
                who elects to be and is registered as an 
                associated person of a futures commission 
                merchant)--
                          (i) who--
                                  (I) is engaged in soliciting 
                                or in accepting orders for--
                                          (aa) the purchase or 
                                        sale of any commodity 
                                        for future delivery, 
                                        security futures 
                                        product, or swap;
                                          (bb) any agreement, 
                                        contract, or 
                                        transaction described 
                                        in section 
                                        2(c)(2)(C)(i) or 
                                        section 2(c)(2)(D)(i);
                                          (cc) any commodity 
                                        option authorized under 
                                        section 4c; or
                                          (dd) any leverage 
                                        transaction authorized 
                                        under section 19; and
                                  (II) does not accept any 
                                money, securities, or property 
                                (or extend credit in lieu 
                                thereof) to margin, guarantee, 
                                or secure any trades or 
                                contracts that result or may 
                                result therefrom; or
                          (ii) who is registered with the 
                        Commission as an introducing broker.
                  (B) Further definition.--The Commission, by 
                rule or regulation, may include within, or 
                exclude from, the term ``introducing broker'' 
                any person who engages in soliciting or 
                accepting orders for any agreement, contract, 
                or transaction subject to this Act, and who 
                does not accept any money, securities, or 
                property (or extend credit in lieu thereof) to 
                margin, guarantee, or secure any trades or 
                contracts that result or may result therefrom, 
                if the Commission determines that the rule or 
                regulation will effectuate the purposes of this 
                Act.
          (32) Major security-based swap participant.--The term 
        ``major security-based swap participant'' has the 
        meaning given the term in section 3(a) of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).
          (33) Major swap participant.--
                  (A) In general.--The term ``major swap 
                participant'' means any person who is not a 
                swap dealer, and--
                          (i) maintains a substantial position 
                        in swaps for any of the major swap 
                        categories as determined by the 
                        Commission, excluding--
                                  (I) positions held for 
                                hedging or mitigating 
                                commercial risk; and
                                  (II) positions maintained by 
                                any employee benefit plan (or 
                                any contract held by such a 
                                plan) as defined in paragraphs 
                                (3) and (32) of section 3 of 
                                the Employee Retirement Income 
                                Security Act of 1974 (29 U.S.C. 
                                1002) for the primary purpose 
                                of hedging or mitigating any 
                                risk directly associated with 
                                the operation of the plan;
                          (ii) whose outstanding swaps create 
                        substantial counterparty exposure that 
                        could have serious adverse effects on 
                        the financial stability of the United 
                        States banking system or financial 
                        markets; or
                          (iii)(I) is a financial entity that 
                        is highly leveraged relative to the 
                        amount of capital it holds and that is 
                        not subject to capital requirements 
                        established by an appropriate Federal 
                        banking agency; and
                          (II) maintains a substantial position 
                        in outstanding swaps in any major swap 
                        category as determined by the 
                        Commission.
                  (B) Definition of substantial position.--For 
                purposes of subparagraph (A), the Commission 
                shall define by rule or regulation the term 
                ``substantial position'' at the threshold that 
                the Commission determines to be prudent for the 
                effective monitoring, management, and oversight 
                of entities that are systemically important or 
                can significantly impact the financial system 
                of the United States. In setting the definition 
                under this subparagraph, the Commission shall 
                consider the person's relative position in 
                uncleared as opposed to cleared swaps and may 
                take into consideration the value and quality 
                of collateral held against counterparty 
                exposures.
                  (C) Scope of designation.--For purposes of 
                subparagraph (A), a person may be designated as 
                a major swap participant for 1 or more 
                categories of swaps without being classified as 
                a major swap participant for all classes of 
                swaps.
                  (D) Exclusions.--The definition under this 
                paragraph shall not include an entity whose 
                primary business is providing financing, and 
                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.
          (34) Member of a registered entity[; member of a 
        derivatives transaction execution facility].--The term 
        ``member'' means, with respect to a registered entity 
        [or derivatives transaction execution facility], an 
        individual, association, partnership, corporation, or 
        trust--
                  (A) owning or holding membership in, or 
                admitted to membership representation on, the 
                registered entity [or derivatives transaction 
                execution facility]; or
                  (B) having trading privileges on the 
                registered entity [or derivatives transaction 
                execution facility].
        A participant in an alternative trading system that is 
        designated as a contract market pursuant to section 5f 
        is deemed a member of the contract market for purposes 
        of transactions in security futures products through 
        the contract market.
          (35) Narrow-based security index.--
                  (A) The term ``narrow-based security index'' 
                means an index--
                          (i) that has 9 or fewer component 
                        securities;
                          (ii) in which a component security 
                        comprises more than 30 percent of the 
                        index's weighting;
                          (iii) in which the five highest 
                        weighted component securities in the 
                        aggregate comprise more than 60 percent 
                        of the index's weighting; or
                          (iv) in which the lowest weighted 
                        component securities comprising, in the 
                        aggregate, 25 percent of the index's 
                        weighting have an aggregate dollar 
                        value of average daily trading volume 
                        of less than $50,000,000 (or in the 
                        case of an index with 15 or more 
                        component securities, $30,000,000), 
                        except that if there are two or more 
                        securities with equal weighting that 
                        could be included in the calculation of 
                        the lowest weighted component 
                        securities comprising, in the 
                        aggregate, 25 percent of the index's 
                        weighting, such securities shall be 
                        ranked from lowest to highest dollar 
                        value of average daily trading volume 
                        and shall be included in the 
                        calculation based on their ranking 
                        starting with the lowest ranked 
                        security.
                  (B) Notwithstanding subparagraph (A), an 
                index is not a narrow-based security index if--
                          (i)(I) it has at least 9 component 
                        securities;
                          (II) no component security comprises 
                        more than 30 percent of the index's 
                        weighting; and
                          (III) each component security is--
                                  (aa) registered pursuant to 
                                section 12 of the Securities 
                                Exchange Act of 1934;
                                  (bb) one of 750 securities 
                                with the largest market 
                                capitalization; and
                                  (cc) one of 675 securities 
                                with the largest dollar value 
                                of average daily trading 
                                volume;
                          (ii) a board of trade was designated 
                        as a contract market by the Commodity 
                        Futures Trading Commission with respect 
                        to a contract of sale for future 
                        delivery on the index, before the date 
                        of the enactment of the Commodity 
                        Futures Modernization Act of 2000;
                          (iii)(I) a contract of sale for 
                        future delivery on the index traded on 
                        a designated contract market [or 
                        registered derivatives transaction 
                        execution facility] for at least 30 
                        days as a contract of sale for future 
                        delivery on an index that was not a 
                        narrow-based security index; and
                          (II) it has been a narrow-based 
                        security index for no more than 45 
                        business days over 3 consecutive 
                        calendar months;
                          (iv) a contract of sale for future 
                        delivery on the index is traded on or 
                        subject to the rules of a foreign board 
                        of trade and meets such requirements as 
                        are jointly established by rule or 
                        regulation by the Commission and the 
                        Securities and Exchange Commission;
                          (v) no more than 18 months have 
                        passed since the date of the enactment 
                        of the Commodity Futures Modernization 
                        Act of 2000 and--
                                  (I) it is traded on or 
                                subject to the rules of a 
                                foreign board of trade;
                                  (II) the offer and sale in 
                                the United States of a contract 
                                of sale for future delivery on 
                                the index was authorized before 
                                the date of the enactment of 
                                the Commodity Futures 
                                Modernization Act of 2000; and
                                  (III) the conditions of such 
                                authorization continue to be 
                                met; or
                          (vi) a contract of sale for future 
                        delivery on the index is traded on or 
                        subject to the rules of a board of 
                        trade and meets such requirements as 
                        are jointly established by rule, 
                        regulation, or order by the Commission 
                        and the Securities and Exchange 
                        Commission.
                  (C) Within 1 year after the date of the 
                enactment of the Commodity Futures 
                Modernization Act of 2000, the Commission and 
                the Securities and Exchange Commission jointly 
                shall adopt rules or regulations that set forth 
                the requirements under subparagraph (B)(iv).
                  (D) An index that is a narrow-based security 
                index solely because it was a narrow-based 
                security index for more than 45 business days 
                over 3 consecutive calendar months pursuant to 
                clause (iii) of subparagraph (B) shall not be a 
                narrow-based security index for the 3 following 
                calendar months.
                  (E) For purposes of subparagraphs (A) and 
                (B)--
                          (i) the dollar value of average daily 
                        trading volume and the market 
                        capitalization shall be calculated as 
                        of the preceding 6 full calendar 
                        months; and
                          (ii) the Commission and the 
                        Securities and Exchange Commission 
                        shall, by rule or regulation, jointly 
                        specify the method to be used to 
                        determine market capitalization and 
                        dollar value of average daily trading 
                        volume.
          (36) Option.--The term ``option'' means an agreement, 
        contract, or transaction that is of the character of, 
        or is commonly known to the trade as, an ``option'', 
        ``privilege'', ``indemnity'', ``bid'', ``offer'', 
        ``put'', ``call'', ``advance guaranty'', or ``decline 
        guaranty''.
          (37) Organized exchange.--The term ``organized 
        exchange'' means a trading facility that--
                  (A) permits trading--
                          (i) by or on behalf of a person that 
                        is not an eligible contract 
                        participant; or
                          (ii) by persons other than on a 
                        principal-to-principal basis; or
                  (B) has adopted (directly or through another 
                nongovernmental entity) rules that--
                          (i) govern the conduct of 
                        participants, other than rules that 
                        govern the submission of orders or 
                        execution of transactions on the 
                        trading facility; and
                          (ii) include disciplinary sanctions 
                        other than the exclusion of 
                        participants from trading.
          (38) Person.--The term ``person'' imports the plural 
        or singular, and includes individuals, associations, 
        partnerships, corporations, and trusts.
          (39) Prudential regulator.--The term ``prudential 
        regulator'' means--
                  (A) the Board in the case of a swap dealer, 
                major swap participant, security-based swap 
                dealer, or major security-based swap 
                participant that is--
                          (i) a State-chartered bank that is a 
                        member of the Federal Reserve System;
                          (ii) a State-chartered branch or 
                        agency of a foreign bank;
                          (iii) any foreign bank which does not 
                        operate an insured branch;
                          (iv) any organization operating under 
                        section 25A of the Federal Reserve Act 
                        or having an agreement with the Board 
                        under section 225 of the Federal 
                        Reserve Act;
                          (v) any bank holding company (as 
                        defined in section 2 of the Bank 
                        Holding Company Act of 1965 (12 U.S.C. 
                        1841)), any foreign bank (as defined in 
                        section 1(b)(7) of the International 
                        Banking Act of 1978 (12 U.S.C. 
                        3101(b)(7)) that is treated as a bank 
                        holding company under section 8(a) of 
                        the International Banking Act of 1978 
                        (12 U.S.C. 3106(a)), and any subsidiary 
                        of such a company or foreign bank 
                        (other than a subsidiary that is 
                        described in subparagraph (A) or (B) or 
                        that is required to be registered with 
                        the Commission as a swap dealer or 
                        major swap participant under this Act 
                        or with the Securities and Exchange 
                        Commission as a security-based swap 
                        dealer or major security-based swap 
                        participant);
                          (vi) after the transfer date (as 
                        defined in section 311 of the Dodd-
                        Frank Wall Street Reform and Consumer 
                        Protection Act), any savings and loan 
                        holding company (as defined in section 
                        10 of the Home Owners' Loan Act (12 
                        U.S.C. 1467a)) and any subsidiary of 
                        such company (other than a subsidiary 
                        that is described in subparagraph (A) 
                        or (B) or that is required to be 
                        registered as a swap dealer or major 
                        swap participant with the Commission 
                        under this Act or with the Securities 
                        and Exchange Commission as a security-
                        based swap dealer or major security-
                        based swap participant); or
                          (vii) any organization operating 
                        under section 25A of the Federal 
                        Reserve Act (12U.S.C. 611 et seq.) or 
                        having an agreement with the Board 
                        under section 25 of the Federal Reserve 
                        Act (12 U.S.C. 601 et seq.);
                  (B) the Office of the Comptroller of the 
                Currency in the case of a swap dealer, major 
                swap participant, security-based swap dealer, 
                or major security-based swap participant that 
                is--
                          (i) a national bank;
                          (ii) a federally chartered branch or 
                        agency of a foreign bank; or
                          (iii) any Federal savings 
                        association;
                  (C) the Federal Deposit Insurance Corporation 
                in the case of a swap dealer, major swap 
                participant, security-based swap dealer, or 
                major security-based swap participant that is--
                          (i) a State-chartered bank that is 
                        not a member of the Federal Reserve 
                        System; or
                          (ii) any State savings association;
                  (D) the Farm Credit Administration, in the 
                case of a swap dealer, major swap participant, 
                security-based swap dealer, or major security-
                based swap participant that is an institution 
                chartered under the Farm Credit Act of 1971 (12 
                U.S.C. 2001 et seq.); and
                  (E) the Federal Housing Finance Agency in the 
                case of a swap dealer, major swap participant, 
                security-based swap dealer, or major security-
                based swap participant that is a regulated 
                entity (as such term is defined in section 1303 
                of the Federal Housing Enterprises Financial 
                Safety and Soundness Act of 1992).
          (40) Registered entity.--The term ``registered 
        entity'' means--
                  (A) a board of trade designated as a contract 
                market under section 5;
                  (B) a derivatives clearing organization 
                registered under section 5b;
                  (C) a board of trade designated as a contract 
                market under section 5f;
                  (D) a swap execution facility registered 
                under section 5h; and
                  (E) a swap data repository registered under 
                section 21[; and].
                  (F) with respect to a contract that the 
                Commission determines is a significant price 
                discovery contract, any electronic trading 
                facility on which the contract is executed or 
                traded.
          (41) Security.--The term ``security'' means a 
        security as defined in section 2(a)(1) of the 
        Securities Act of 1933 (15 U.S.C. 77b(a)(1)) or section 
        3(a)(10) of the Securities Exchange Act of 1934 (15 
        U.S.C. 78c(a)(10)).
          (42) Security-based swap.--The term ``security-based 
        swap'' has the meaning given the term in section 3(a) 
        of the Securities Exchange Act of 1934 (15 U.S.C. 
        78c(a)).
          (43) Security-based swap dealer.--The term 
        ``security-based swap dealer'' has the meaning given 
        the term in section 3(a) of the Securities Exchange Act 
        of 1934 (15 U.S.C. 78c(a)).
          (44) Security future.--The term ``security future'' 
        means a contract of sale for future delivery of a 
        single security or of a narrow-based security index, 
        including any interest therein or based on the value 
        thereof, except an exempted security under section 
        3(a)(12) of the Securities Exchange Act of 1934 as in 
        effect on the date of the enactment of the Futures 
        Trading Act of 1982 (other than any municipal security 
        as defined in section 3(a)(29) of the Securities 
        Exchange Act of 1934 as in effect on the date of the 
        enactment of the Futures Trading Act of 1982). The term 
        ``security future'' does not include any agreement, 
        contract, or transaction excluded from this Act under 
        section 2(c), 2(d), 2(f), or 2(g) of this Act (as in 
        effect on the date of the enactment of the Commodity 
        Futures Modernization Act of 2000) or title IV of the 
        Commodity Futures Modernization Act of 2000.
          (45) Security futures product.--The term ``security 
        futures product'' means a security future or any put, 
        call, straddle, option, or privilege on any security 
        future.
          (46) Significant price discovery contract.--The term 
        ``significant price discovery contract'' means an 
        agreement, contract, or transaction subject to section 
        2(h)(5).
          (47) Swap.--
                  (A) In general.--Except as provided in 
                subparagraph (B), the term ``swap'' means any 
                agreement, contract, or transaction--
                          (i) that is a put, call, cap, floor, 
                        collar, or similar option of any kind 
                        that is for the purchase or sale, or 
                        based on the value, of 1 or more 
                        interest or other rates, currencies, 
                        commodities, securities, instruments of 
                        indebtedness, indices, quantitative 
                        measures, or other financial or 
                        economic interests or property of any 
                        kind;
                          (ii) that provides for any purchase, 
                        sale, payment, or delivery (other than 
                        a dividend on an equity security) that 
                        is dependent on the occurrence, 
                        nonoccurrence, or the extent of the 
                        occurrence of an event or contingency 
                        associated with a potential financial, 
                        economic, or commercial consequence;
                          (iii) that provides on an executory 
                        basis for the exchange, on a fixed or 
                        contingent basis, of 1 or more payments 
                        based on the value or level of 1 or 
                        more interest or other rates, 
                        currencies, commodities, securities, 
                        instruments of indebtedness, indices, 
                        quantitative measures, or other 
                        financial or economic interests or 
                        property of any kind, or any interest 
                        therein or based on the value thereof, 
                        and that transfers, as between the 
                        parties to the transaction, in whole or 
                        in part, the financial risk associated 
                        with a future change in any such value 
                        or level without also conveying a 
                        current or future direct or indirect 
                        ownership interest in an asset 
                        (including any enterprise or investment 
                        pool) or liability that incorporates 
                        the financial risk so transferred, 
                        including any agreement, contract, or 
                        transaction commonly known as--
                                  (I) an interest rate swap;
                                  (II) a rate floor;
                                  (III) a rate cap;
                                  (IV) a rate collar;
                                  (V) a cross-currency rate 
                                swap;
                                  (VI) a basis swap;
                                  (VII) a currency swap;
                                  (VIII) a foreign exchange 
                                swap;
                                  (IX) a total return swap;
                                  (X) an equity index swap;
                                  (XI) an equity swap;
                                  (XII) a debt index swap;
                                  (XIII) a debt swap;
                                  (XIV) a credit spread;
                                  (XV) a credit default swap;
                                  (XVI) a credit swap;
                                  (XVII) a weather swap;
                                  (XVIII) an energy swap;
                                  (XIX) a metal swap;
                                  (XX) an agricultural swap;
                                  (XXI) an emissions swap; and
                                  (XXII) a commodity swap;
                          (iv) that is an agreement, contract, 
                        or transaction that is, or in the 
                        future becomes, commonly known to the 
                        trade as a swap;
                          (v) including any security-based swap 
                        agreement which meets the definition of 
                        ``swap agreement'' as defined in 
                        section 206A of the Gramm-Leach-Bliley 
                        Act (15 U.S.C. 78c note) of which a 
                        material term is based on the price, 
                        yield, value, or volatility of any 
                        security or any group or index of 
                        securities, or any interest therein; or
                          (vi) that is any combination or 
                        permutation of, or option on, any 
                        agreement, contract, or transaction 
                        described in any of clauses (i) through 
                        (v).
                  (B) Exclusions.--The term ``swap'' does not 
                include--
                          (i) any contract of sale of a 
                        commodity for future delivery (or 
                        option on such a contract), leverage 
                        contract authorized under section 19, 
                        security futures product, or agreement, 
                        contract, or transaction described in 
                        section 2(c)(2)(C)(i) or section 
                        2(c)(2)(D)(i);
                          (ii) any sale of a nonfinancial 
                        commodity or security for deferred 
                        shipment or delivery, so long as the 
                        transaction is intended to be 
                        physically settled;
                          (iii) any put, call, straddle, 
                        option, or privilege on any security, 
                        certificate of deposit, or group or 
                        index of securities, including any 
                        interest therein or based on the value 
                        thereof, that is subject to--
                                  (I) the Securities Act of 
                                1933 (15 U.S.C. 77a et seq.); 
                                and
                                  (II) the Securities Exchange 
                                Act of 1934 (15 U.S.C. 78a et 
                                seq.);
                          (iv) any put, call, straddle, option, 
                        or privilege relating to a foreign 
                        currency entered into on a national 
                        securities exchange registered pursuant 
                        to section 6(a) of the Securities 
                        Exchange Act of 1934 (15 U.S.C. 
                        78f(a));
                          (v) any agreement, contract, or 
                        transaction providing for the purchase 
                        or sale of 1 or more securities on a 
                        fixed basis that is subject to--
                                  (I) the Securities Act of 
                                1933 (15 U.S.C. 77a et seq.); 
                                and
                                  (II) the Securities Exchange 
                                Act of 1934 (15 U.S.C. 78a et 
                                seq.);
                          (vi) any agreement, contract, or 
                        transaction providing for the purchase 
                        or sale of 1 or more securities on a 
                        contingent basis that is subject to the 
                        Securities Act of 1933 (15 U.S.C. 77a 
                        et seq.) and the Securities Exchange 
                        Act of 1934 (15 U.S.C. 78a et seq.), 
                        unless the agreement, contract, or 
                        transaction predicates the purchase or 
                        sale on the occurrence of a bona fide 
                        contingency that might reasonably be 
                        expected to affect or be affected by 
                        the creditworthiness of a party other 
                        than a party to the agreement, 
                        contract, or transaction;
                          (vii) any note, bond, or evidence of 
                        indebtedness that is a security, as 
                        defined in section 2(a)(1) of the 
                        Securities Act of 1933 (15 U.S.C. 
                        77b(a)(1));
                          (viii) any agreement, contract, or 
                        transaction that is--
                                  (I) based on a security; and
                                  (II) entered into directly or 
                                through an underwriter (as 
                                defined in section 2(a)(11) of 
                                the Securities Act of 1933 (15 
                                U.S.C. 77b(a)(11)) by the 
                                issuer of such security for the 
                                purposes of raising capital, 
                                unless the agreement, contract, 
                                or transaction is entered into 
                                to manage a risk associated 
                                with capital raising;
                          (ix) any agreement, contract, or 
                        transaction a counterparty of which is 
                        a Federal Reserve bank, the Federal 
                        Government, or a Federal agency that is 
                        expressly backed by the full faith and 
                        credit of the United States; and
                          (x) any security-based swap, other 
                        than a security-based swap as described 
                        in subparagraph (D).
                  (C) Rule of construction regarding master 
                agreements.--
                          (i) In general.--Except as provided 
                        in clause (ii), the term ``swap'' 
                        includes a master agreement that 
                        provides for an agreement, contract, or 
                        transaction that is a swap under 
                        subparagraph (A), together with each 
                        supplement to any master agreement, 
                        without regard to whether the master 
                        agreement contains an agreement, 
                        contract, or transaction that is not a 
                        swap pursuant to subparagraph (A).
                          (ii) Exception.--For purposes of 
                        clause (i), the master agreement shall 
                        be considered to be a swap only with 
                        respect to each agreement, contract, or 
                        transaction covered by the master 
                        agreement that is a swap pursuant to 
                        subparagraph (A).
                  (D) Mixed swap.--The term ``security-based 
                swap'' includes any agreement, contract, or 
                transaction that is as described in section 
                3(a)(68)(A) of the Securities Exchange Act of 
                1934 (15 U.S.C. 78c(a)(68)(A)) and also is 
                based on the value of 1 or more interest or 
                other rates, currencies, commodities, 
                instruments of indebtedness, indices, 
                quantitative measures, other financial or 
                economic interest or property of any kind 
                (other than a single security or a narrow-based 
                security index), or the occurrence, non-
                occurrence, or the extent of the occurrence of 
                an event or contingency associated with a 
                potential financial, economic, or commercial 
                consequence (other than an event described in 
                subparagraph (A)(iii)).
                  (E) Treatment of foreign exchange swaps and 
                forwards.--
                          (i) In general.--Foreign exchange 
                        swaps and foreign exchange forwards 
                        shall be considered swaps under this 
                        paragraph unless the Secretary makes a 
                        written determination under section 1b 
                        that either foreign exchange swaps or 
                        foreign exchange forwards or both--
                                  (I) should be not be 
                                regulated as swaps under this 
                                Act; and
                                  (II) are not structured to 
                                evade the Dodd-Frank Wall 
                                Street Reform and Consumer 
                                Protection Act in violation of 
                                any rule promulgated by the 
                                Commission pursuant to section 
                                721(c) of that Act.
                          (ii) Congressional notice; 
                        effectiveness.--The Secretary shall 
                        submit any written determination under 
                        clause (i) to the appropriate 
                        committees of Congress, including the 
                        Committee on Agriculture, Nutrition, 
                        and Forestry of the Senate and the 
                        Committee on Agriculture of the House 
                        of Representatives. Any such written 
                        determination by the Secretary shall 
                        not be effective until it is submitted 
                        to the appropriate committees of 
                        Congress.
                          (iii) Reporting.--Notwithstanding a 
                        written determination by the Secretary 
                        under clause (i), all foreign exchange 
                        swaps and foreign exchange forwards 
                        shall be reported to either a swap data 
                        repository, or, if there is no swap 
                        data repository that would accept such 
                        swaps or forwards, to the Commission 
                        pursuant to section 4r within such time 
                        period as the Commission may by rule or 
                        regulation prescribe.
                          (iv) Business standards.--
                        Notwithstanding a written determination 
                        by the Secretary pursuant to clause 
                        (i), any party to a foreign exchange 
                        swap or forward that is a swap dealer 
                        or major swap participant shall conform 
                        to the business conduct standards 
                        contained in section 4s(h).
                          (v) Secretary.--For purposes of this 
                        subparagraph, the term ``Secretary'' 
                        means the Secretary of the Treasury.
                  (F) Exception for certain foreign exchange 
                swaps and forwards.--
                          (i) Registered entities.--Any foreign 
                        exchange swap and any foreign exchange 
                        forward that is listed and traded on or 
                        subject to the rules of a designated 
                        contract market or a swap execution 
                        facility, or that is cleared by a 
                        derivatives clearing organization, 
                        shall not be exempt from any provision 
                        of this Act or amendments made by the 
                        Wall Street Transparency and 
                        Accountability Act of 2010 prohibiting 
                        fraud or manipulation.
                          (ii) Retail transactions.--Nothing in 
                        subparagraph (E) shall affect, or be 
                        construed to affect, the applicability 
                        of this Act or the jurisdiction of the 
                        Commission with respect to agreements, 
                        contracts, or transactions in foreign 
                        currency pursuant to section 2(c)(2).
          (48) Swap data repository.--The term ``swap data 
        repository'' means any person that collects and 
        maintains information or records with respect to 
        transactions or positions in, or the terms and 
        conditions of, swaps entered into by third parties for 
        the purpose of providing a centralized recordkeeping 
        facility for swaps.
          (49) Swap dealer.--
                  (A) In general.--The term ``swap dealer'' 
                means any person who--
                          (i) holds itself out as a dealer in 
                        swaps;
                          (ii) makes a market in swaps;
                          (iii) regularly enters into swaps 
                        with counterparties as an ordinary 
                        course of business for its own account; 
                        or
                          (iv) engages in any activity causing 
                        the person to be commonly known in the 
                        trade as a dealer or market maker in 
                        swaps,
                provided however, in no event shall an insured 
                depository institution be considered to be a 
                swap dealer to the extent it offers to enter 
                into a swap with a customer in connection with 
                originating a loan with that customer.
                  (B) Inclusion.--A person may be designated as 
                a swap dealer for a single type or single class 
                or category of swap or activities and 
                considered not to be a swap dealer for other 
                types, classes, or categories of swaps or 
                activities.
                  (C) Exception.--The term ``swap dealer'' does 
                not include a person that enters into swaps for 
                such person's own account, either individually 
                or in a fiduciary capacity, but not as a part 
                of a regular business.
                  (D) De minimis exception.--The Commission 
                shall exempt from designation as a swap dealer 
                an entity that engages in a de minimis quantity 
                of swap dealing in connection with transactions 
                with or on behalf of its customers. The 
                Commission shall promulgate regulations to 
                establish factors with respect to the making of 
                this determination to exempt.
          (50) Swap execution facility.--The term ``swap 
        execution facility'' means a trading system or platform 
        in which multiple participants have the ability to 
        execute or trade swaps by accepting bids and offers 
        made by multiple participants in the facility or 
        system, through any means of interstate commerce, 
        including any trading facility, that--
                  (A) facilitates the execution of swaps 
                between persons; and
                  (B) is not a designated contract market.
          (51) Trading facility.--
                  (A) In general.--The term ``trading 
                facility'' means a person or group of persons 
                that constitutes, maintains, or provides a 
                physical or electronic facility or system in 
                which multiple participants have the ability to 
                execute or trade agreements, contracts, or 
                transactions--
                          (i) by accepting bids or offers made 
                        by other participants that are open to 
                        multiple partipants in the facility or 
                        system; or
                          (ii) through the interaction of 
                        multiple bids or multiple offers within 
                        a system with a pre-determined non-
                        discretionary automated trade matching 
                        and execution algorithm.
                  (B) Exclusions.--The term ``trading 
                facility'' does not include--
                          (i) a person or group of persons 
                        solely because the person or group of 
                        persons constitutes, maintains, or 
                        provides an electronic facility or 
                        system that enables participants to 
                        negotiate the terms of and enter into 
                        bilateral transactions as a result of 
                        communications exchanged by the parties 
                        and not from interaction of multiple 
                        bids and multiple offers within a 
                        predetermined, nondiscretionary 
                        automated trade matching and execution 
                        algorithm;
                          (ii) a government securities dealer 
                        or government securities broker, to the 
                        extent that the dealer or broker 
                        executes or trades agreements, 
                        contracts, or transactions in 
                        government securities, or assists 
                        persons in communicating about, 
                        negotiating, entering into, executing, 
                        or trading an agreement, contract, or 
                        transaction in government securities 
                        (as the terms ``government securities 
                        dealer'', ``government securities 
                        broker'', and ``government securities'' 
                        are defined in section 3(a) of the 
                        Securities Exchange Act of 1934 (15 
                        U.S.C. 78c(a))); or
                          (iii) facilities on which bids and 
                        offers, and acceptances of bids and 
                        offers effected on the facility, are 
                        not binding.
                Any person, group of persons, dealer, broker, 
                or facility described in clause (i) or (ii) is 
                excluded from the meaning of the term ``trading 
                facility'' for the purposes of this Act without 
                any prior specific approval, certification, or 
                other action by the Commission.
                  (C) Special rule.--A person or group of 
                persons that would not otherwise constitute a 
                trading facility shall not be considered to be 
                a trading facility solely as a result of the 
                submission to a derivatives clearing 
                organization of transactions executed on or 
                through the person or group of persons.

           *       *       *       *       *       *       *


SEC. 2. JURISDICTION OF COMMISSION; LIABILITY OF PRINCIPAL FOR ACT OF 
                    AGENT; COMMODITY FUTURES TRADING COMMISSION; 
                    TRANSACTION IN INTERSTATE COMMERCE.

  (a) Jurisdiction of Commission; Commodity Futures Trading 
Commission.--
          (1) Jurisdiction of commission.--
                  (A) In general.--The Commission shall have 
                exclusive jurisdiction, except to the extent 
                otherwise provided in the Wall Street 
                Transparency and Accountability Act of 2010 
                (including an amendment made by that Act) and 
                subparagraphs (C), (D), and (I) of this 
                paragraph and subsections (c) and (f), with 
                respect to accounts, agreements (including any 
                transaction which is of the character of, or is 
                commonly known to the trade as, an ``option'', 
                ``privilege'', ``indemnity'', ``bid'', 
                ``offer'', ``put'', ``call'', ``advance 
                guaranty'', or ``decline guaranty''), and 
                transactions involving swaps or contracts of 
                sale of a commodity for future delivery 
                (including significant price discovery 
                contracts), traded or executed on a contract 
                market designated pursuant to section 5 or a 
                swap execution facility pursuant to section 5h 
                or any other board of trade, exchange, or 
                market, and transactions subject to regulation 
                by the Commission pursuant to section 19 of 
                this Act. Except as hereinabove provided, 
                nothing contained in this section shall (I) 
                supersede or limit the jurisdiction at any time 
                conferred on the Securities and Exchange 
                Commission or other regulatory authorities 
                under the laws of the United States or of any 
                State, or (II) restrict the Securities and 
                Exchange Commission and such other authorities 
                from carrying out their duties and 
                responsibilities in accordance with such laws. 
                Nothing in this section shall supersede or 
                limit the jurisdiction conferred on courts of 
                the United States or any State.
                  (B) Liability of principal for act of 
                agent.--The act, omission, or failure of any 
                official, agent, or other person acting for any 
                individual, association, partnership, 
                corporation, or trust within the scope of his 
                employment or office shall be deemed the act, 
                omission, or failure of such individual, 
                association, partnership, corporation, or 
                trust, as well as of such official, agent, or 
                other person.
  (C) Notwithstanding any other provision of law--
          (i)(I) Except as provided in subclause (II), this Act 
        shall not apply to and the Commission shall have no 
        jurisdiction to designate a board of trade as a 
        contract market for any transaction whereby any party 
        to such transaction acquires any put, call, or other 
        option on one or more securities (as defined in section 
        2(1) of the Securities Act of 1933 or section 3(a)(10) 
        of the Securities Exchange Act of 1934 on the date of 
        enactment of the Futures Trading Act of 1982), 
        including any group or index of such securities, or any 
        interest therein or based on the value thereof.
                  (II) This Act shall apply to and the 
                Commission shall have jurisdiction with respect 
                to accounts, agreements, and transactions 
                involving, and may permit the listing for 
                trading pursuant to section 5c(c) of, a put, 
                call, or other option on 1 or more securities 
                (as defined in section 2(a)(1) of the 
                Securities Act of 1933 or section 3(a)(10) of 
                the Securities Exchange Act of 1934 on the date 
                of enactment of the Futures Trading Act of 
                1982), including any group or index of such 
                securities, or any interest therein or based on 
                the value thereof, that is exempted by the 
                Securities and Exchange Commission pursuant to 
                section 36(a)(1) of the Securities Exchange Act 
                of 1934 with the condition that the Commission 
                exercise concurrent jurisdiction over such put, 
                call, or other option; provided, however, that 
                nothing in this paragraph shall be construed to 
                affect the jurisdiction and authority of the 
                Securities and Exchange Commission over such 
                put, call, or other option.
          (ii) This Act shall apply to and the Commission shall 
        have exclusive jurisdiction with respect to accounts, 
        agreements (including any transaction which is of the 
        character of, or is commonly known to the trade as, an 
        ``option'', ``privilege'', ``indemnity'', ``bid'', 
        ``offer'', ``put'', ``call'', ``advance guaranty'', or 
        ``decline guaranty'') and transactions involving, and 
        may designate a board of trade as a contract market 
        in[, or register a derivatives transaction execution 
        facility that trades or executes,] contracts of sale 
        (or options on such contracts) for future delivery of a 
        group or index of securities (or any interest therein 
        or based upon the value thereof): Provided, however, 
        That no board of trade shall be designated as a 
        contract market with respect to any such contracts of 
        sale (or options on such contracts) for future 
        delivery[, and no derivatives transaction execution 
        facility shall trade or execute such contracts of sale 
        (or options on such contracts) for future delivery], 
        unless the board of trade [or the derivatives 
        transaction execution facility,] and the applicable 
        contract, meet the following minimum requirements:
                  (I) Settlement of or delivery on such 
                contract (or option on such contract) shall be 
                effected in cash or by means other than the 
                transfer or receipt of any security, except an 
                exempted security under section 3 of the 
                Securities Act of 1933 or section 3(a)(12) of 
                the Securities Exchange Act of 1934 as in 
                effect on the date of enactment of the Futures 
                Trading Act of 1982 (other than any municipal 
                security, as defined in section 3(a)(29) of the 
                Securities Exchange Act of 1934 on the date of 
                enactment of the Futures Trading Act of 1982);
                  (II) Trading in such contract (or option on 
                such contract) shall not be readily susceptible 
                to manipulation of the price of such contract 
                (or option on such contract), nor to causing or 
                being used in the manipulation of the price of 
                any underlying security, option on such 
                security or option on a group or index 
                including such securities; and
                  (III) Such group or index of securities shall 
                not constitute a narrow-based security index.
          (iii) If, in its discretion, the Commission 
        determines that a stock index futures contract, 
        notwithstanding its conformance with the requirements 
        in clause (ii) of this subparagraph, can reasonably be 
        used as a surrogate for trading a security (including a 
        security futures product), it may, by order, require 
        such contract and any option thereon be traded and 
        regulated as security futures products as defined in 
        section 3(a)(56) of the Securities Exchange Act of 1934 
        and section 1a of this Act subject to all rules and 
        regulations applicable to security futures products 
        under this Act and the securities laws as defined in 
        section 3(a)(47) of the Securities Exchange Act of 
        1934.
          (iv) No person shall offer to enter into, enter into, 
        or confirm the execution of any contract of sale (or 
        option on such contract) for future delivery of any 
        security, or interest therein or based on the value 
        thereof, except an exempted security [under or] under 
        section 3(a)(12) of the Securities Exchange Act of 1934 
        as in effect on the date of enactment of the Futures 
        Trading Act of 1982 (other than any municipal security 
        as defined in section 3(a)(29) of the Securities 
        Exchange Act of 1934 on the date of enactment of the 
        Futures Trading Act of 1982), or except as provided in 
        clause (ii) of this subparagraph or subparagraph (D), 
        any group or index of such securities or any interest 
        therein or based on the value thereof.
          (v)(I) Notwithstanding any other provision of this 
        Act, any contract market in a stock index futures 
        contract (or option thereon) other than a security 
        futures product[, or any derivatives transaction 
        execution facility on which such contract or option is 
        traded,] shall file with the Board of Governors of the 
        Federal Reserve System any rule establishing or 
        changing the levels of margin (initial and maintenance) 
        for such stock index futures contract (or option 
        thereon) other than security futures products.
          (II) The Board may at any time request any contract 
        market [or derivatives transaction execution facility] 
        to set the margin for any stock index futures contract 
        (or option thereon), other than for any security 
        futures product, at such levels as the Board in its 
        judgment determines are appropriate to preserve the 
        financial integrity of the contract market [or 
        derivatives transaction execution facility], or its 
        clearing system, or to prevent systemic risk. If the 
        contract market [or derivatives transaction execution 
        facility] fails to do so within the time specified by 
        the Board in its request, the Board may direct the 
        contract market [or derivatives transaction execution 
        facility] to alter or supplement the rules of the 
        contract market [or derivatives transaction execution 
        facility] as specified in the request.
          (III) Subject to such conditions as the Board may 
        determine, the Board may delegate any or all of its 
        authority, relating to margin for any stock index 
        futures contract (or option thereon), other than 
        security futures products, under this clause to the 
        Commission.
          (IV) It shall be unlawful for any futures commission 
        merchant to, directly or indirectly, extend or maintain 
        credit to or for, or collect margin from any customer 
        on any security futures product unless such activities 
        comply with the regulations prescribed pursuant to 
        section 7(c)(2)(B) of the Securities Exchange Act of 
        1934.
          (V) Nothing in this clause shall supersede or limit 
        the authority granted to the Commission in section 
        8a(9) to direct a contract market [or registered 
        derivatives transaction execution facility], on finding 
        an emergency to exist, to raise temporary margin levels 
        on any futures contract, or option on the contract 
        covered by this clause, or on any security futures 
        product.
          (VI) Any action taken by the Board, or by the 
        Commission acting under the delegation of authority 
        under subclause [III] (III), under this clause 
        directing a contract market to alter or supplement a 
        contract market rule shall be subject to review only in 
        the Court of Appeals where the party seeking review 
        resides or has its principal place of business, or in 
        the United States Court of Appeals for the District of 
        Columbia Circuit. The review shall be based on the 
        examination of all information before the Board or the 
        Commission, as the case may be, at the time the 
        determination was made. The court reviewing the action 
        of the Board or the Commission shall not enter a stay 
        or order of mandamus unless the court has determined, 
        after notice and a hearing before a panel of the court, 
        that the agency action complained of was arbitrary, 
        capricious, an abuse of discretion, or otherwise not in 
        accordance with law.
  (D)(i) Notwithstanding any other provision of this Act, the 
Securities and Exchange Commission shall have jurisdiction and 
authority over security futures as defined in section 3(a)(55) 
of the Securities Exchange Act of 1934, section 2(a)(16) of the 
Securities Act of 1933, section 2(a)(52) of the Investment 
Company Act of 1940, and section 202(a)(27) of the Investment 
Advisers Act of 1940, options on security futures, and persons 
effecting transactions in security futures and options thereon, 
and this Act shall apply to and the Commission shall have 
jurisdiction with respect to accounts, agreements (including 
any transaction which is of the character of, or is commonly 
known to the trade as, an ``option'', ``privilege'', 
``indemnity'', ``bid'', ``offer'', ``put'', ``call'', ``advance 
guaranty'', or ``decline guaranty''), contracts, and 
transactions involving, and may designate a board of trade as a 
contract market [in, or register a derivatives transaction 
execution facility] that trades or executes, a security futures 
product as defined in section 1a of this Act: Provided, 
however, That, except as provided in clause (vi) of this 
subparagraph, no board of trade shall be designated as a 
contract market with respect to[, or registered as a 
derivatives transaction execution facility for,] any such 
contracts of sale for future delivery unless the board of trade 
and the applicable contract meet the following criteria:
          (I) Except as otherwise provided in a rule, 
        regulation, or order issued pursuant to clause (v) of 
        this subparagraph, any security underlying the security 
        future, including each component security of a narrow-
        based security index, is registered pursuant to section 
        12 of the Securities Exchange Act of 1934.
          (II) If the security futures product is not cash 
        settled, the board of trade on which the security 
        futures product is traded has arrangements in place 
        with a clearing agency registered pursuant to section 
        17A of the Securities Exchange Act of 1934 for the 
        payment and delivery of the securities underlying the 
        security futures product.
          (III) Except as otherwise provided in a rule, 
        regulation, or order issued pursuant to clause (v) of 
        this subparagraph, the security future is based upon 
        common stock and such other equity securities as the 
        Commission and the Securities and Exchange Commission 
        jointly determine appropriate.
          (IV) The security futures product is cleared by a 
        clearing agency that has in place provisions for linked 
        and coordinated clearing with other clearing agencies 
        that clear security futures products, which permits the 
        security futures product to be purchased on a 
        designated contract market, [registered derivatives 
        transaction execution facility,] national securities 
        exchange registered under section 6(a) of the 
        Securities Exchange Act of 1934, or national securities 
        association registered pursuant to section 15A(a) of 
        the Securities Exchange Act of 1934 and offset on 
        another designated contract market, [registered 
        derivatives transaction execution facility,] national 
        securities exchange registered under section 6(a) of 
        the Securities Exchange Act of 1934, or national 
        securities association registered pursuant to section 
        15A(a) of the Securities Exchange Act of 1934.
          (V) Only futures commission merchants, introducing 
        brokers, commodity trading advisors, commodity pool 
        operators or associated persons subject to suitability 
        rules comparable to those of a national securities 
        association registered pursuant to section 15A(a) of 
        the Securities Exchange Act of 1934 solicit, accept any 
        order for, or otherwise deal in any transaction in or 
        in connection with the security futures product.
          (VI) The security futures product is subject to a 
        prohibition against dual trading in section 4j of this 
        Act and the rules and regulations thereunder or the 
        provisions of section 11(a) of the Securities Exchange 
        Act of 1934 and the rules and regulations thereunder, 
        except to the extent otherwise permitted under the 
        Securities Exchange Act of 1934 and the rules and 
        regulations thereunder.
          (VII) Trading in the security futures product is not 
        readily susceptible to manipulation of the price of 
        such security futures product, nor to causing or being 
        used in the manipulation of the price of any underlying 
        security, option on such security, or option on a group 
        or index including such securities;
          (VIII) The board of trade on which the security 
        futures product is traded has procedures in place for 
        coordinated surveillance among such board of trade, any 
        market on which any security underlying the security 
        futures product is traded, and other markets on which 
        any related security is traded to detect manipulation 
        and insider trading, except that, if the board of trade 
        is an alternative trading system, a national securities 
        association registered pursuant to section 15A(a) of 
        the Securities Exchange Act of 1934 or national 
        securities exchange registered pursuant to section 6(a) 
        of the Securities Exchange Act of 1934 of which such 
        alternative trading system is a member has in place 
        such procedures.
          (IX) The board of trade on which the security futures 
        product is traded has in place audit trails necessary 
        or appropriate to facilitate the coordinated 
        surveillance required in subclause (VIII), except that, 
        if the board of trade is an alternative trading system, 
        a national securities association registered pursuant 
        to section 15A(a) of the Securities Exchange Act of 
        1934 or national securities exchange registered 
        pursuant to section 6(a) of the Securities Exchange Act 
        of 1934 of which such alternative trading system is a 
        member has rules to require such audit trails.
          (X) The board of trade on which the security futures 
        product is traded has in place procedures to coordinate 
        trading halts between such board of trade and markets 
        on which any security underlying the security futures 
        product is traded and other markets on which any 
        related security is traded, except that, if the board 
        of trade is an alternative trading system, a national 
        securities association registered pursuant to section 
        15A(a) of the Securities Exchange Act of 1934 or 
        national securities exchange registered pursuant to 
        section 6(a) of the Securities Exchange Act of 1934 of 
        which such alternative trading system is a member has 
        rules to require such coordinated trading halts.
          (XI) The margin requirements for a security futures 
        product comply with the regulations prescribed pursuant 
        to section 7(c)(2)(B) of the Securities Exchange Act of 
        1934, except that nothing in this subclause shall be 
        construed to prevent a board of trade from requiring 
        higher margin levels for a security futures product 
        when it deems such action to be necessary or 
        appropriate.
  (ii) It shall be unlawful for any person to offer, to enter 
into, to execute, to confirm the execution of, or to conduct 
any office or business anywhere in the United States, its 
territories or possessions, for the purpose of soliciting, or 
accepting any order for, or otherwise dealing in, any 
transaction in, or in connection with, a security futures 
product unless--
          [(I) the transaction is conducted on or subject to 
        the rules of a board of trade that--
                  [(aa) has been designated by the Commission 
                as a contract market in such security futures 
                product; or
                  [(bb) is a registered derivatives transaction 
                execution facility for the security futures 
                product that has provided a certification with 
                respect to the security futures product 
                pursuant to clause (vii);]
          (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;
          (II) the contract is executed or consummated by, 
        through, or with a member of the contract market [or 
        registered derivatives transaction execution facility]; 
        and
          (III) the security futures product is evidenced by a 
        record in writing which shows the date, the parties to 
        such security futures product and their addresses, the 
        property covered, and its price, and each contract 
        market member [or registered derivatives transaction 
        execution facility member] shall keep the record for a 
        period of 3 years from the date of the transaction, or 
        for a longer period if the Commission so directs, which 
        record shall at all times be open to the inspection of 
        any duly authorized representative of the Commission.
  (iii)(I) Except as provided in subclause (II) but 
notwithstanding any other provision of this Act, no person 
shall offer to enter into, enter into, or confirm the execution 
of any option on a security future.
  (II) After 3 years after the date of the enactment of the 
Commodity Futures Modernization Act of 2000, the Commission and 
the Securities and Exchange Commission may by order jointly 
determine to permit trading of options on any security future 
authorized to be traded under the provisions of this Act and 
the Securities Exchange Act of 1934.
  (iv)(I) All relevant records of a futures commission merchant 
or introducing broker registered pursuant to section 4f(a)(2), 
floor broker or floor trader exempt from registration pursuant 
to section 4f(a)(3), associated person exempt from registration 
pursuant to section 4k(6), or board of trade designated as a 
contract market in a security futures product pursuant to 
section 5f shall be subject to such reasonable periodic or 
special examinations by representatives of the Commission as 
the Commission deems necessary or appropriate in the public 
interest, for the protection of investors, or otherwise in 
furtherance of the purposes of this Act, and the Commission, 
before conducting any such examination, shall give notice to 
the Securities and Exchange Commission of the proposed 
examination and consult with the Securities and Exchange 
Commission concerning the feasibility and desirability of 
coordinating the examination with examinations conducted by the 
Securities and Exchange Commission in order to avoid 
unnecessary regulatory duplication or undue regulatory burdens 
for the registrant or board of trade.
  (II) The Commission shall notify the Securities and Exchange 
Commission of any examination conducted of any futures 
commission merchant or introducing broker registered pursuant 
to section 4f(a)(2), floor broker or floor trader exempt from 
registration pursuant to section 4f(a)(3), associated person 
exempt from registration pursuant to section 4k(6), or board of 
trade designated as a contract market in a security futures 
product pursuant to section 5f, and, upon request, furnish to 
the Securities and Exchange Commission any examination report 
and data supplied to or prepared by the Commission in 
connection with the examination.
  (III) Before conducting an examination under subclause (I), 
the Commission shall use the reports of examinations, unless 
the information sought is unavailable in the reports, of any 
futures commission merchant or introducing broker registered 
pursuant to section 4f(a)(2), floor broker or floor trader 
exempt from registration pursuant to section 4f(a)(3), 
associated person exempt from registration pursuant to section 
4k(6), or board of trade designated as a contract market in a 
security futures product pursuant to section 5f that is made by 
the Securities and Exchange Commission, a national securities 
association registered pursuant to section 15A(a) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78o-3(a)), or a 
national securities exchange registered pursuant to section 
6(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78f(a)).
  (IV) Any records required under this subsection for a futures 
commission merchant or introducing broker registered pursuant 
to section 4f(a)(2), floor broker or floor trader exempt from 
registration pursuant to section 4f(a)(3), associated person 
exempt from registration pursuant to section 4k(6), or board of 
trade designated as a contract market in a security futures 
product pursuant to section 5f, shall be limited to records 
with respect to accounts, agreements, contracts, and 
transactions involving security futures products.
  (v)(I) The Commission and the Securities and Exchange 
Commission, by rule, regulation, or order, may jointly modify 
the criteria specified in subclause (I) or (III) of clause (i), 
including the trading of security futures based on securities 
other than equity securities, to the extent such modification 
fosters the development of fair and orderly markets in security 
futures products, is necessary or appropriate in the public 
interest, and is consistent with the protection of investors.
  (II) The Commission and the Securities and Exchange 
Commission, by order, may jointly exempt any person from 
compliance with the criterion specified in clause (i)(IV) to 
the extent such exemption fosters the development of fair and 
orderly markets in security futures products, is necessary or 
appropriate in the public interest, and is consistent with the 
protection of investors.
  (vi)(I) Notwithstanding clauses (i) and (vii), until the 
compliance date, a board of trade shall not be required to meet 
the criterion specified in clause (i)(IV).
  (II) The Commission and the Securities and Exchange 
Commission shall jointly publish in the Federal Register a 
notice of the compliance date no later than 165 days before the 
compliance date.
  (III) For purposes of this clause, the term ``compliance 
date'' means the later of--
          (aa) 180 days after the end of the first full 
        calendar month period in which the average aggregate 
        comparable share volume for all security futures 
        products based on single equity securities traded on 
        all designated contract markets and registered 
        derivatives transaction execution facilities equals or 
        exceeds 10 percent of the average aggregate comparable 
        share volume of options on single equity securities 
        traded on all national securities exchanges registered 
        pursuant to section 6(a) of the Securities Exchange Act 
        of 1934 and any national securities associations 
        registered pursuant to section 15A(a) of such Act; or
          (bb) 2 years after the date on which trading in any 
        security futures product commences under this Act.
  (vii) It shall be unlawful for a board of trade to trade or 
execute a security futures product unless the board of trade 
has provided the Commission with a certification that the 
specific security futures product and the board of trade, as 
applicable, meet the criteria specified in subclauses (I) 
through (XI) of clause (i), except as otherwise provided in 
clause (vi).
  (E)(i) To the extent necessary or appropriate in the public 
interest, to promote fair competition, and consistent with 
promotion of market efficiency, innovation, and expansion of 
investment opportunities, the protection of investors, and the 
maintenance of fair and orderly markets, the Commission and the 
Securities and Exchange Commission shall jointly issue such 
rules, regulations, or orders as are necessary and appropriate 
to permit the offer and sale of a security futures product 
traded on or subject to the rules of a foreign board of trade 
to United States persons.
  (ii) The rules, regulations, or orders adopted under clause 
(i) shall take into account, as appropriate, the nature and 
size of the markets that the securities underlying the security 
futures product reflects.
  (F)(i) Nothing in this Act is intended to prohibit a futures 
commission merchant from carrying security futures products 
traded on or subject to the rules of a foreign board of trade 
in the accounts of persons located outside of the United 
States.
  (ii) Nothing in this Act is intended to prohibit any eligible 
contract participant located in the United States from 
purchasing or carrying securities futures products traded on or 
subject to the rules of a foreign board of trade, exchange, or 
market to the same extent such person may be authorized to 
purchase or carry other securities traded on a foreign board of 
trade, exchange, or market so long as any underlying security 
for such security futures products is traded principally on, 
by, or through any exchange or market located outside the 
United States.
                  (G)(i) Nothing in this paragraph shall limit 
                the jurisdiction conferred on the Securities 
                and Exchange Commission by the Wall Street 
                Transparency and Accountability Act of 2010 
                with regard to security-based swap agreements 
                as defined pursuant to section 3(a)(78) of the 
                Securities Exchange Act of 1934, and security-
                based swaps.
                  (ii) In addition to the authority of the 
                Securities and Exchange Commission described in 
                clause (i), nothing in this subparagraph shall 
                limit or affect any statutory authority of the 
                Commission with respect to an agreement, 
                contract, or transaction described in clause 
                (i).
                  (H) Notwithstanding any other provision of 
                law, the Wall Street Transparency and 
                Accountability Act of 2010 shall not apply to, 
                and the Commodity Futures Trading Commission 
                shall have no jurisdiction under such Act (or 
                any amendments to the Commodity Exchange Act 
                made by such Act) with respect to, any security 
                other than a security-based swap.
                  (I)(i) Nothing in this Act shall limit or 
                affect any statutory authority of the Federal 
                Energy Regulatory Commission or a State 
                regulatory authority (as defined in section 
                3(21) of the Federal Power Act (16 U.S.C. 
                796(21)) with respect to an agreement, 
                contract, or transaction that is entered into 
                pursuant to a tariff or rate schedule approved 
                by the Federal Energy Regulatory Commission or 
                a State regulatory authority and is--
                          (I) not executed, traded, or cleared 
                        on a registered entity or trading 
                        facility; or
                          (II) executed, traded, or cleared on 
                        a registered entity or trading facility 
                        owned or operated by a regional 
                        transmission organization or 
                        independent system operator.
                  (ii) In addition to the authority of the 
                Federal Energy Regulatory Commission or a State 
                regulatory authority described in clause (i), 
                nothing in this subparagraph shall limit or 
                affect--
                          (I) any statutory authority of the 
                        Commission with respect to an 
                        agreement, contract, or transaction 
                        described in clause (i); or
                          (II) the jurisdiction of the 
                        Commission under subparagraph (A) with 
                        respect to an agreement, contract, or 
                        transaction that is executed, traded, 
                        or cleared on a registered entity or 
                        trading facility that is not owned or 
                        operated by a regional transmission 
                        organization or independent system 
                        operator (as defined by sections 3(27) 
                        and (28) of the Federal Power Act (16 
                        U.S.C. 796(27), 796(28)).
          (2)(A) There is hereby established, as an independent 
        agency of the United States Government, a Commodity 
        Futures Trading Commission. The Commission shall be 
        composed of five Commissioners who shall be appointed 
        by the President, by and with the advice and consent of 
        the Senate. In nominating persons for appointment, the 
        President shall--
                  (i) select persons who shall each have 
                demonstrated knowledge in futures trading or 
                its regulation, or the production, 
                merchandising, processing or distribution of 
                one or more of the commodities or other goods 
                and articles, services, rights, and interests 
                covered by this Act; and
                  (ii) seek to ensure that the demonstrated 
                knowledge of the Commissioners is balanced with 
                respect to such areas.
        Not more than three of the members of the Commission 
        shall be members of the same political party. Each 
        Commissioner shall hold office for a term of five years 
        and until his successor is appointed and has qualified, 
        except that he shall not so continue to serve beyond 
        the expiration of the next session of Congress 
        subsequent to the expiration of said fixed term of 
        office, and except (i) any Commissioner appointed to 
        fill a vacancy occurring prior to the expiration of the 
        term for which his predecessor was appointed shall be 
        appointed for the remainder of such term, and (ii) the 
        terms of office of the Commissioners first taking 
        office after the enactment of this paragraph shall 
        expire as designated by the President at the time of 
        nomination, one at the end of one year, one at the end 
        of two years, one at the end of three years, one at the 
        end of four years, and one at the end of five years.
          (B) The President shall appoint, by and with the 
        advice and consent of the Senate, a member of the 
        Commission as Chairman, who shall serve as Chairman at 
        the pleasure of the President. An individual may be 
        appointed as Chairman at the same time that person is 
        appointed as a Commissioner. The Chairman shall be the 
        chief administrative officer of the Commission and 
        shall preside at hearings before the Commission. At any 
        time, the President may appoint, by and with the advice 
        and consent of the Senate, a different Chairman, and 
        the Commissioner previously appointed as Chairman may 
        complete that Commissioner's term as a Commissioner.
          (3) A vacancy in the Commission shall not impair the 
        right of the remaining Commissioners to exercise all 
        the powers of the Commission.
          (4) The Commission shall have a General Counsel, who 
        shall be appointed by the Commission and serve at the 
        pleasure of the Commission. The General Counsel shall 
        report directly to the Commission and serve as its 
        legal advisor. The Commission shall appoint such other 
        attorneys as may be necessary, in the opinion of the 
        Commission, to assist the General Counsel, represent 
        the Commission in all disciplinary proceedings pending 
        before it, represent the Commission in courts of law 
        whenever appropriate, assist the Department of Justice 
        in handling litigation concerning the Commission in 
        courts of law, and perform such other legal duties and 
        functions as the Commission may direct.
          (5) The Commission shall have an Executive Director, 
        who shall be appointed by the Commission and serve at 
        the pleasure of the Commission. The Executive Director 
        shall report directly to the Commission and perform 
        such functions and duties as the Commission may 
        prescribe.
          (6)(A) Except as otherwise provided in this paragraph 
        and in paragraphs (4) and (5) of this subsection, the 
        executive and administrative functions of the 
        Commission, including functions of the Commission with 
        respect to the appointment and supervision of personnel 
        employed under the Commission, the distribution of 
        business among such personnel and among administrative 
        units of the Commission, and the use and expenditure of 
        funds, according to budget categories, plans, programs, 
        and priorities established and approved by the 
        Commission, shall be exercised solely by the Chairman.
          (B) In carrying out any of his functions under the 
        provisions of this paragraph, the Chairman shall be 
        governed by general policies, plans, priorities, and 
        budgets approved by the Commission and by such 
        regulatory decisions, findings, and determinations as 
        the Commission may by law be authorized to make.
          (C) The appointment by the Chairman of the heads of 
        major administrative units under the Commission shall 
        be subject to the approval of the Commission.
          (D) Personnel employed regularly and full time in the 
        immediate offices of Commissioners other than the 
        Chairman shall not be affected by the provisions of 
        this paragraph.
          (E) There are hereby reserved to the Commission its 
        functions with respect to revising budget estimates and 
        with respect to determining the distribution of 
        appropriated funds according to major programs and 
        purposes.
          (F) The Chairman may from time to time make such 
        provisions as he shall deem appropriate authorizing the 
        performance by any officer, employee, or administrative 
        unit under his jurisdiction of any functions of the 
        Chairman under this paragraph.
          (7) Appointment and compensation.--
                  (A) In general.--The Commission may appoint 
                and fix the compensation of such officers, 
                attorneys, economists, examiners, and other 
                employees as may be necessary for carrying out 
                the functions of the Commission under this Act.
                  (B) Rates of pay.--Rates of basic pay for all 
                employees of the Commission may be set and 
                adjusted by the Commission without regard to 
                chapter 51 or subchapter III of chapter 53 of 
                title 5, United States Code.
                  (C) Comparability.--
                          (i) In general.--The Commission may 
                        provide additional compensation and 
                        benefits to employees of the Commission 
                        if the same type of compensation or 
                        benefits are provided by any agency 
                        referred to in section 1206(a) of the 
                        Financial Institutions Reform, 
                        Recovery, and Enforcement Act of 1989 
                        (12 U.S.C. 1833b(a)) or could be 
                        provided by such an agency under 
                        applicable provisions of law (including 
                        rules and regulations).
                          (ii) Consultation.--In setting and 
                        adjusting the total amount of 
                        compensation and benefits for 
                        employees, the Commission shall consult 
                        with, and seek to maintain 
                        comparability with, the agencies 
                        referred to in section 1206(a) of the 
                        Financial Institutions Reform, 
                        Recovery, and Enforcement Act of 1989 
                        (12 U.S.C. 1833b(a)).
                  (D) Honors program.--The Commission may 
                establish the Honors Program under its 
                appointment and compensation authorities.
          (8) No Commissioner or employee of the Commission 
        shall accept employment or compensation from any 
        person, exchange, or clearinghouse subject to 
        regulation by the Commission under this Act during his 
        term of office, nor shall he participate, directly or 
        indirectly, in any registered entity operations or 
        transactions of a character subject to regulation by 
        the Commission.
          (9)(A) The Commission shall, in cooperation with the 
        Secretary of Agriculture, maintain a liaison between 
        the Commission and the Department of Agriculture. The 
        Secretary shall take such steps as may be necessary to 
        enable the Commission to obtain information and utilize 
        such services and facilities of the Department of 
        Agriculture as may be necessary in order to maintain 
        effectively such liaison. In addition, the Secretary 
        shall appoint a liaison officer, who shall be an 
        employee of the Office of the Secretary, for the 
        purpose of maintaining a liaison between the Department 
        of Agriculture and the Commission. The Commission shall 
        furnish such liaison officer appropriate office space 
        within the offices of the Commission and shall allow 
        such liaison officer to attend and observe all 
        deliberations and proceedings of the Commission.
          (B)(i) The Commission shall maintain communications 
        with the Department of the Treasury, the Board of 
        Governors of the Federal Reserve System, and the 
        Securities and Exchange Commission for the purpose of 
        keeping such agencies fully informed of Commission 
        activities that relate to the responsibilities of those 
        agencies, for the purpose of seeking the views of those 
        agencies on such activities, and for considering the 
        relationships between the volume and nature of 
        investment and trading in contracts of sale of a 
        commodity for future delivery and in securities and 
        financial instruments under the jurisdiction of such 
        agencies.
          (ii) When a board of trade applies for designation 
        [or registration] as a contract market [or derivatives 
        transaction execution facility] involving transactions 
        for future delivery of any security issued or 
        guaranteed by the United States or any agency thereof, 
        the Commission shall promptly deliver a copy of such 
        application to the Department of the Treasury and the 
        Board of Governors of the Federal Reserve System. The 
        Commission may not designate [or register] a board of 
        trade as a contract market [or derivatives transaction 
        execution facility] based on such application until 
        forty-five days after the date the Commission delivers 
        the application to such agencies or until the 
        Commission receives comments from each of such agencies 
        on the application, whichever period is shorter. Any 
        comments received by the Commission from such agencies 
        shall be included as part of the public record of the 
        Commission's designation proceeding. In designating[, 
        registering,] or refusing, suspending, or revoking the 
        designation [or registration] of, a board of trade as a 
        contract market [or derivatives transaction execution 
        facility] involving transactions for future delivery 
        referred to in this clause or in considering any 
        possible action under this Act (including without 
        limitation emergency action under section 8a(9)) with 
        respect to such transactions, the Commission shall take 
        into consideration all comments it receives from the 
        Department of the Treasury and the Board of Governors 
        of the Federal Reserve System and shall consider the 
        effect that any such designation, [registration,] 
        suspension, revocation, or action may have on the debt 
        financing requirements of the United States Government 
        and the continued efficiency and integrity of the 
        underlying market for government securities.
          (iii) The provisions of this subparagraph shall not 
        create any rights, liabilities, or obligations upon 
        which actions may be brought against the Commission.
          (10)(A) Whenever the Commission submits any budget 
        estimate or request to the President or the Office of 
        Management and Budget, it shall concurrently transmit 
        copies of that estimate or request to the House and 
        Senate Appropriations Committees and the House 
        Committee on Agriculture and the Senate Committee on 
        Agriculture, Nutrition, and Forestry.
          (B) Whenever the Commission transmits any legislative 
        recommendations, or testimony, or comments on 
        legislation to the President or the Office of 
        Management and Budget, it shall concurrently transmit 
        copies thereof to the House Committee on Agriculture 
        and the Senate Committee on Agriculture, Nutrition, and 
        Forestry. No officer or agency of the United States 
        shall have any authority to require the Commission to 
        submit its legislative recommendations, or testimony, 
        or comments on legislation to any officer or agency of 
        the United States for approval, comments, or review, 
        prior to the submission of such recommendations, 
        testimony, or comments to the Congress. In instances in 
        which the Commission voluntarily seeks to obtain the 
        comments or review of any officer or agency of the 
        United States, the Commission shall include a 
        description of such actions in its legislative 
        recommendations, testimony, or comments on legislation 
        which it transmits to the Congress.
          (C) Whenever the Commission issues for official 
        publication any opinion, release, rule, order, 
        interpretation, or other determination on a matter, the 
        Commission shall provide that any dissenting, 
        concurring, or separate opinion by any Commissioner on 
        the matter be published in full along with the 
        Commission opinion, release, rule, order, 
        interpretation, or determination.
  (11) The Commission shall have an official seal, which shall 
be judicially noticed.
  (12) The Commission is authorized to promulgate such rules 
and regulations as it deems necessary to govern the operating 
procedures and conduct of the business of the Commission.
          (13) Public availability of swap transaction data.--
                  (A) Definition of real-time public 
                reporting.--In this paragraph, the term ``real-
                time public reporting'' means to report data 
                relating to a swap transaction, including price 
                and volume, as soon as technologically 
                practicable after the time at which the swap 
                transaction has been executed.
                  (B) Purpose.--The purpose of this section is 
                to authorize the Commission to make swap 
                transaction and pricing data available to the 
                public in such form and at such times as the 
                Commission determines appropriate to enhance 
                price discovery.
                  (C) General rule.--The Commission is 
                authorized and required to provide by rule for 
                the public availability of swap transaction and 
                pricing data as follows:
                          (i) With respect to those swaps that 
                        are subject to the mandatory clearing 
                        requirement described in subsection 
                        (h)(1) (including those swaps that are 
                        excepted from the requirement pursuant 
                        to subsection (h)(7)), the Commission 
                        shall require real-time public 
                        reporting for such transactions.
                          (ii) With respect to those swaps that 
                        are not subject to the mandatory 
                        clearing requirement described in 
                        subsection (h)(1), but are cleared at a 
                        registered derivatives clearing 
                        organization, the Commission shall 
                        require real-time public reporting for 
                        such transactions.
                          (iii) With respect to swaps that are 
                        not cleared at a registered derivatives 
                        clearing organization and which are 
                        reported to a swap data repository or 
                        the Commission under subsection (h)(6), 
                        the Commission shall require real-time 
                        public reporting for such transactions, 
                        in a manner that does not disclose the 
                        business transactions and market 
                        positions of any person.
                          (iv) With respect to swaps that are 
                        determined to be required to be cleared 
                        under subsection (h)(2) but are not 
                        cleared, the Commission shall require 
                        real-time public reporting for such 
                        transactions.
                  (D) Registered entities and public 
                reporting.--The Commission may require 
                registered entities to publicly disseminate the 
                swap transaction and pricing data required to 
                be reported under this paragraph.
                  (E) Rulemaking required.--With respect to the 
                rule providing for the public availability of 
                transaction and pricing data for swaps 
                described in clauses (i) and (ii) of 
                subparagraph (C), the rule promulgated by the 
                Commission shall contain provisions--
                          (i) to ensure such information does 
                        not identify the participants;
                          (ii) to specify the criteria for 
                        determining what constitutes a large 
                        notional swap transaction (block trade) 
                        for particular markets and contracts;
                          (iii) to specify the appropriate time 
                        delay for reporting large notional swap 
                        transactions (block trades) to the 
                        public; and
                          (iv) that take into account whether 
                        the public disclosure will materially 
                        reduce market liquidity.
                  (F) Timeliness of reporting.--Parties to a 
                swap (including agents of the parties to a 
                swap) shall be responsible for reporting swap 
                transaction information to the appropriate 
                registered entity in a timely manner as may be 
                prescribed by the Commission.
                  (G) Reporting of swaps to registered swap 
                data repositories.--Each swap (whether cleared 
                or uncleared) shall be reported to a registered 
                swap data repository.
          (14) Semiannual and annual public reporting of 
        aggregate swap data.--
                  (A) In general.--In accordance with 
                subparagraph (B), the Commission shall issue a 
                written report on a semiannual and annual basis 
                to make available to the public information 
                relating to--
                          (i) the trading and clearing in the 
                        major swap categories; and
                          (ii) the market participants and 
                        developments in new products.
                  (B) Use; consultation.--In preparing a report 
                under subparagraph (A), the Commission shall--
                          (i) use information from swap data 
                        repositories and derivatives clearing 
                        organizations; and
                          (ii) consult with the Office of the 
                        Comptroller of the Currency, the Bank 
                        for International Settlements, and such 
                        other regulatory bodies as may be 
                        necessary.
                  (C) Authority of the commission.--The 
                Commission may, by rule, regulation, or order, 
                delegate the public reporting responsibilities 
                of the Commission under this paragraph in 
                accordance with such terms and conditions as 
                the Commission determines to be appropriate and 
                in the public interest.
          [(15) Energy and environmental markets advisory 
        committee.--
                  [(A) Establishment.--
                          [(i) In general.--An Energy and 
                        Environmental Markets Advisory 
                        Committee is hereby established.
                          [(ii) Membership.--The Committee 
                        shall have 9 members.
                          [(iii) Activities.--The Committee's 
                        objectives and scope of activities 
                        shall be--
                                  [(I) to conduct public 
                                meetings;
                                  [(II) to submit reports and 
                                recommendations to the 
                                Commission (including 
                                dissenting or minority views, 
                                if any); and
                                  [(III) otherwise to serve as 
                                a vehicle for discussion and 
                                communication on matters of 
                                concern to exchanges, firms, 
                                end users, and regulators 
                                regarding energy and 
                                environmental markets and their 
                                regulation by the Commission.
                  [(B) Requirements.--
                          [(i) In general.--The Committee shall 
                        hold public meetings at such intervals 
                        as are necessary to carry out the 
                        functions of the Committee, but not 
                        less frequently than 2 times per year.
                          [(ii) Members.--Members shall be 
                        appointed to 3-year terms, but may be 
                        removed for cause by vote of the 
                        Commission.
                  [(C) Appointment.--The Commission shall 
                appoint members with a wide diversity of 
                opinion and who represent a broad spectrum of 
                interests, including hedgers and consumers.
                  [(D) Reimbursement.--Members shall be 
                entitled to per diem and travel expense 
                reimbursement by the Commission.
                  [(E) FACA.--The Committee shall not be 
                subject to the Federal Advisory Committee Act 
                (5 U.S.C. App.).]
          (15) Advisory committees.--
                  (A) Establishment.--
                          (i) In general.--The Commission shall 
                        establish advisory committees to serve 
                        as vehicles for discussion and 
                        communication on matters related to the 
                        regulatory activities of the 
                        Commission.
                          (ii) Membership.--The Commission 
                        shall appoint to an advisory committee 
                        such members as the Commission finds 
                        appropriate to promote robust 
                        discussion of the subject mater before 
                        the advisory committee. In appointing 
                        members to an advisory committee, the 
                        Commission shall seek to include a wide 
                        diversity of opinion and represent a 
                        broad cross-section of interests, as 
                        applicable to the subject matter.
                  (B) Activities.--The activities of an 
                advisory committee shall include the following:
                          (i) to hold meetings at such 
                        intervals as necessary to carry out the 
                        functions of the advisory committee;
                          (ii) to submit to the Commission such 
                        reports and recommendations to the 
                        Commission (including minority views, 
                        if any) as the advisory committee deems 
                        appropriate; and
                          (iii) such activities as the 
                        Commission determines is appropriate.
                  (C) Applicability of the federal advisory 
                committee act.--An advisory committee 
                established under this paragraph shall be 
                subject to the Federal Advisory Committee Act.
          (16) Office of Minority and Women Inclusion.--Within 
        1 year after the date of the enactment of this 
        paragraph, the Commission shall comply with section 342 
        of the Dodd-Frank Wall Street Reform and Consumer 
        Protection Act.
          (17) Annual Internship Program.--
                  (A) In general.--The Executive Director shall 
                establish a program to place an appropriate 
                number of students attending qualified 
                institutions in a semester-length internship 
                within the Commission's divisions and offices.
                  (B) Funding.--The Commission shall set aside 
                an appropriate percentage of the funds 
                allocated to the office of the Chairman to 
                enable the selected interns identified in 
                subparagraph (A) to afford living expenses, 
                including rent and a per-diem, in the 
                metropolitan areas where the Director 
                identifies internship opportunities.
                  (C) Qualified institution defined.--In this 
                paragraph, the term ``qualified institution'' 
                means--
                          (i) an 1890 Institution (as defined 
                        in section 2 of the Agricultural 
                        Research, Extension, and Education 
                        Reform Act of 1998 (7 U.S.C. 7601));
                          (ii) a 1994 Institution (as defined 
                        in section 532 of the Equity in 
                        Educational Land-Grant Status Act of 
                        1994 (Public Law 103-382; 7 U.S.C. 301 
                        note));
                          (iii) an eligible institution (as 
                        defined in section 1489 of the National 
                        Agricultural Research, Extension, and 
                        Teaching Policy Act of 1977 (7 U.S.C. 
                        3361)); or
                          (iv) a Hispanic-serving institution 
                        (as defined in section 1404 of the Food 
                        and Agriculture Act of 1977 (7 U.S.C. 
                        3103)).
          (18) Assistance from federal agencies.--
                  (A) In general.--The Commission may accept 
                any assistance, including services, funds, 
                facilities, and other support services as 
                determined by the Commission, to effectuate the 
                purposes and provisions of this Act, from any 
                department or agency of the United States that 
                is authorized under other law to provide the 
                assistance.
                  (B) Detail flexibility.--When an employee 
                from another department or agency is detailed 
                to the Commission, the employee may be detailed 
                on either a reimbursable or non-reimbursable 
                basis, and such detail shall be without 
                interruption or loss of civil service status or 
                privilege.
          (19) Assistance from foreign governmental entities.--
                  (A) In general.--The Commission may--
                          (i) accept details of officers or 
                        employees of a foreign futures 
                        authority or any department or agency 
                        of a foreign government, including a 
                        central bank or ministry, on a 
                        temporary basis as employees of the 
                        Commission pursuant to section 12(b) of 
                        this Act, or section 3101 or 3109 of 
                        title 5, United States Code; and
                          (ii) detail officers or employees of 
                        the Commission to work on a temporary 
                        basis for an entity described in clause 
                        (i).
                  (B) Reciprocity and reimbursement.--
                          (i) Reciprocity not required.--
                        Assistance described in subparagraph 
                        (A) need not be provided on a 
                        reciprocal basis.
                          (ii) Reimbursement.--
                                  (I) In general.--The 
                                Commission may provide and 
                                accept assistance described in 
                                subparagraph (A) on a 
                                reimbursable or non-
                                reimbursable basis, only in 
                                accordance with a written 
                                agreement between the 
                                Commission and the respective 
                                foreign governmental entity.
                                  (II) Form.--A reimbursement 
                                to or from the Commission may 
                                be made in cash or in kind. The 
                                Commission shall credit a 
                                reimbursement received from a 
                                foreign governmental entity to 
                                the appropriate Commission 
                                appropriation, fund, or 
                                account.
                  (C) Standards of conduct.--An officer or 
                employee detailed under subparagraph (A)(i) 
                shall be subject to the provisions of law 
                relating to ethics, conflicts of interest, or 
                corruption, and to any other statute governing 
                the standards of conduct for Commission 
                employees that are applicable to the type of 
                appointment.
                  (D) Limitation.--An officer or employee 
                detailed under subparagraph (A)(i) may not hold 
                any management position at the Commission.
          (20) Office of the chief economist.--
                  (A) Establishment.--There is established in 
                the Commission the Office of Chief Economist.
                  (B) Head.--The Office of Chief Economist 
                shall be headed by the Chief Economist.
                  (C) Functions.--The Chief Economist shall 
                serve as economic advisor to the Commission and 
                perform functions such as economic analysis, 
                regulatory cost-benefit analysis, and research.
                  (D) Professional staff.--
                          (i) In general.--The Commission shall 
                        appoint such other economists and any 
                        related positions as may be necessary 
                        for the Office of the Chief Economist--
                                  (I) in accordance with the 
                                statutes, rules, and 
                                regulations governing 
                                appointments in the excepted 
                                service; and
                                  (II) notwithstanding any 
                                statutes, rules, and 
                                regulations governing 
                                appointments in the competitive 
                                service.
                          (ii) Rule of construction.--The 
                        appointment of a candidate to a 
                        position under authority of this 
                        subsection shall not be considered to 
                        cause such position to be converted 
                        from the competitive service to the 
                        excepted service.
  (b) For the purposes of this Act (but not in any wise 
limiting the foregoing definition of interstate commerce) a 
transaction in respect to any article shall be considered to be 
in interstate commerce if such article is part of that current 
of commerce usual in the commodity trade whereby commodities 
and commodity products and by-products thereof are sent from 
one State with the expectation that they will end their 
transit, after purchase, in another, including, in addition to 
cases within the above general description, all cases where 
purchase or sale is either for shipment to another State, or 
for manufacture within the State and the shipment outside the 
State of the products resulting from such manufacture. Articles 
normally in such current of commerce shall not be considered 
out of such commerce through resort being had to any means or 
device intended to remove transactions in respect thereto from 
the provisions of this Act. For the purpose of this paragraph 
the word ``State'' includes Territory, the District of 
Columbia, possession of the United States, and foreign nation.
  (c) Agreements, Contracts, and Transactions in Foreign 
Currency, Government Securities, and Certain Other 
Commodities.--
          (1) In general.--Except as provided in paragraph (2), 
        nothing in this Act (other than section[,] 5b, or 
        12(e)(2)(B)) governs or applies to an agreement, 
        contract, or transaction in--
                  (A) foreign currency;
                  (B) government securities;
                  (C) security warrants;
                  (D) security rights;
                  (E) resales of installment loan contracts;
                  (F) repurchase transactions in an excluded 
                commodity; or
                  (G) mortgages or mortgage purchase 
                commitments.
          (2) Commission jurisdiction.--
                  (A) Agreements, contracts, and transactions 
                traded on an organized exchange.--This Act 
                applies to, and the Commission shall have 
                jurisdiction over, an agreement, contract, or 
                transaction described in paragraph (1) that 
                is--
                          (i) a contract of sale of a commodity 
                        for future delivery (or an option on 
                        such a contract), or an option on a 
                        commodity (other than foreign currency 
                        or a security or a group or index of 
                        securities), that is executed or traded 
                        on an organized exchange;
                          (ii) a swap; or
                          (iii) an option on foreign currency 
                        executed or traded on an organized 
                        exchange that is not a national 
                        securities exchange registered pursuant 
                        to section 6(a) of the Securities 
                        Exchange Act of 1934.
                  (B) Agreements, contracts, and transactions 
                in retail foreign currency.--
                          (i) This Act applies to, and the 
                        Commission shall have jurisdiction 
                        over, an agreement, contract, or 
                        transaction in foreign currency that--
                                  (I) is a contract of sale of 
                                a commodity for future delivery 
                                (or an option on such a 
                                contract) or an option (other 
                                than an option executed or 
                                traded on a national securities 
                                exchange registered pursuant to 
                                section 6(a) of the Securities 
                                Exchange Act of 1934 (15 U.S.C. 
                                78f(a))); and
                                  (II) is offered to, or 
                                entered into with, a person 
                                that is not an eligible 
                                contract participant, unless 
                                the counterparty, or the person 
                                offering to be the 
                                counterparty, of the person 
                                is--
                                          (aa) a United States 
                                        financial institution;
                                          (bb)(AA) a broker or 
                                        dealer registered under 
                                        section 15(b) (except 
                                        paragraph (11) thereof) 
                                        or 15C of the 
                                        Securities Exchange Act 
                                        of 1934 (15 U.S.C. 
                                        78o(b), 78o-5); or
                                          (BB) an associated 
                                        person of a broker or 
                                        dealer registered under 
                                        section 15(b) (except 
                                        paragraph (11) thereof) 
                                        or 15C of the 
                                        Securities Exchange Act 
                                        of 1934 (15 U.S.C. 
                                        78o(b), 78o-5) 
                                        concerning the 
                                        financial or securities 
                                        activities of which the 
                                        broker or dealer makes 
                                        and keeps records under 
                                        section 15C(b) or 17(h) 
                                        of the Securities 
                                        Exchange Act of 1934 
                                        (15 U.S.C. 78o-5(b), 
                                        78q(h));
                                          (cc)(AA) a futures 
                                        commission merchant 
                                        that is primarily or 
                                        substantially engaged 
                                        in the business 
                                        activities described in 
                                        section 1a of this Act, 
                                        is registered under 
                                        this Act, is not a 
                                        person described in 
                                        item (bb) of this 
                                        subclause, and 
                                        maintains adjusted net 
                                        capital equal to or in 
                                        excess of the dollar 
                                        amount that applies for 
                                        purposes of clause (ii) 
                                        of this subparagraph; 
                                        or
                                          (BB) an affiliated 
                                        person of a futures 
                                        commission merchant 
                                        that is primarily or 
                                        substantially engaged 
                                        in the business 
                                        activities described in 
                                        section 1a of this Act, 
                                        is registered under 
                                        this Act, and is not a 
                                        person described in 
                                        item (bb) of this 
                                        subclause, if the 
                                        affiliated person 
                                        maintains adjusted net 
                                        capital equal to or in 
                                        excess of the dollar 
                                        amount that applies for 
                                        purposes of clause (ii) 
                                        of this subparagraph 
                                        and is not a person 
                                        described in such item 
                                        (bb), and the futures 
                                        commission merchant 
                                        makes and keeps records 
                                        under section 
                                        4f(c)(2)(B) of this Act 
                                        concerning the futures 
                                        and other financial 
                                        activities of the 
                                        affiliated person;
                                          (dd) a financial 
                                        holding company (as 
                                        defined in section 2 of 
                                        the Bank Holding 
                                        Company Act of 1956); 
                                        or
                                          [(ff)] (ee) a retail 
                                        foreign exchange dealer 
                                        that maintains adjusted 
                                        net capital equal to or 
                                        in excess of the dollar 
                                        amount that applies for 
                                        purposes of clause (ii) 
                                        of this subparagraph 
                                        and is registered in 
                                        such capacity with the 
                                        Commission, subject to 
                                        such terms and 
                                        conditions as the 
                                        Commission shall 
                                        prescribe, and is a 
                                        member of a futures 
                                        association registered 
                                        under section 17.
                          (ii) The dollar amount that applies 
                        for purposes of this clause is--
                                  (I) $10,000,000, beginning 
                                120 days after the date of the 
                                enactment of this clause;
                                  (II) $15,000,000, beginning 
                                240 days after such date of 
                                enactment; and
                                  (III) $20,000,000, beginning 
                                360 days after such date of 
                                enactment.
                          (iii) Notwithstanding items (cc) and 
                        [(gg)] (ee) of clause (i)(II) of this 
                        subparagraph, agreements, contracts, or 
                        transactions described in clause (i) of 
                        this subparagraph, and accounts or 
                        pooled investment vehicles described in 
                        clause (vi), shall be subject to 
                        subsection (a)(1)(B) of this section 
                        and sections 4(b), 4b, 4c(b), 4o, 6(c) 
                        and 6(d) (except to the extent that 
                        sections 6(c) and 6(d) prohibit 
                        manipulation of the market price of any 
                        commodity in interstate commerce, or 
                        for future delivery on or subject to 
                        the rules of any market), 6c, 6d, 8(a), 
                        13(a), and 13(b) if the agreements, 
                        contracts, or transactions are offered, 
                        or entered into, by a person that is 
                        registered as a futures commission 
                        merchant or retail foreign exchange 
                        dealer, or an affiliated person of a 
                        futures commission merchant registered 
                        under this Act that is not also a 
                        person described in any of item (aa), 
                        (bb), [(ee), or (ff) of clause (i)(II) 
                        of this subparagraph] or (dd) of clause 
                        (i)(II).
                          (iv)(I) Notwithstanding items (cc) 
                        and [(gg)] (ee) of clause (i)(II), a 
                        person, unless registered in such 
                        capacity as the Commission by rule, 
                        regulation, or order shall determine 
                        and a member of a futures association 
                        registered under section 17, shall 
                        not--
                                  (aa) solicit or accept orders 
                                from any person that is not an 
                                eligible contract participant 
                                in connection with agreements, 
                                contracts, or transactions 
                                described in clause (i) entered 
                                into with or to be entered into 
                                with a person who is not 
                                described in item (aa), (bb), 
                                [(ee), or (ff)] or (dd) of 
                                clause (i)(II);
                                  (bb) exercise discretionary 
                                trading authority or obtain 
                                written authorization to 
                                exercise discretionary trading 
                                authority over any account for 
                                or on behalf of any person that 
                                is not an eligible contract 
                                participant in connection with 
                                agreements, contracts, or 
                                transactions described in 
                                clause (i) entered into with or 
                                to be entered into with a 
                                person who is not described in 
                                item (aa), (bb), [(ee), or 
                                (ff)] or (dd) of clause 
                                (i)(II), or otherwise act as a 
                                commodity trading advisor with 
                                respect to any agreement, 
                                contract, or transaction 
                                described in clause (i); or
                                  (cc) operate or solicit 
                                funds, securities, or property 
                                for any pooled investment 
                                vehicle that is not an eligible 
                                contract participant in 
                                connection with agreements, 
                                contracts, or transactions 
                                described in clause (i) entered 
                                into with or to be entered into 
                                with a person who is not 
                                described in item (aa), (bb), 
                                [(ee), or (ff)] or (dd) of 
                                clause (i)(II).
                          (II) Subclause (I) of this clause 
                        shall not apply to--
                                  (aa) any person described in 
                                any of item (aa), (bb), [(ee), 
                                or (ff)] or (dd) of clause 
                                (i)(II);
                                  (bb) any such person's 
                                associated persons; or
                                  (cc) any person who would be 
                                exempt from registration if 
                                engaging in the same activities 
                                in connection with transactions 
                                conducted on or subject to the 
                                rules of a contract market [or 
                                a derivatives transaction 
                                execution facility].
                          (III) Notwithstanding items (cc) and 
                        [(gg)] (ee) of clause (i)(II), the 
                        Commission may make, promulgate, and 
                        enforce such rules and regulations as, 
                        in the judgment of the Commission, are 
                        reasonably necessary to effectuate any 
                        of the provisions of, or to accomplish 
                        any of the purposes of, this Act in 
                        connection with the activities of 
                        persons subject to subclause (I).
                          (IV) Subclause (III) of this clause 
                        shall not apply to--
                                  (aa) any person described in 
                                any of item (aa) through [(ff)] 
                                (dd) of clause (i)(II);
                                  (bb) any such person's 
                                associated persons; or
                                  (cc) any person who would be 
                                exempt from registration if 
                                engaging in the same activities 
                                in connection with transactions 
                                conducted on or subject to the 
                                rules of a contract market [or 
                                a derivatives transaction 
                                execution facility].
                          (v) Notwithstanding items (cc) and 
                        [(gg)] (ee) of clause (i)(II), the 
                        Commission may make, promulgate, and 
                        enforce such rules and regulations as, 
                        in the judgment of the Commission, are 
                        reasonably necessary to effectuate any 
                        of the provisions of, or to accomplish 
                        any of the purposes of, this Act in 
                        connection with agreements, contracts, 
                        or transactions described in clause (i) 
                        which are offered, or entered into, by 
                        a person described in item (cc) or 
                        [(gg)] (ee) of clause (i)(II).
                          (vi) This Act applies to, and the 
                        Commission shall have jurisdiction 
                        over, an account or pooled investment 
                        vehicle that is offered for the purpose 
                        of trading, or that trades, any 
                        agreement, contract, or transaction in 
                        foreign currency described in clause 
                        (i).
                  (C)(i)(I) This subparagraph shall apply to 
                any agreement, contract, or transaction in 
                foreign currency that is--
                                  (aa) offered to, or entered 
                                into with, a person that is not 
                                an eligible contract 
                                participant (except that this 
                                subparagraph shall not apply if 
                                the counterparty, or the person 
                                offering to be the 
                                counterparty, of the person 
                                that is not an eligible 
                                contract participant is a 
                                person described in any of item 
                                (aa), (bb), [(ee), or (ff)] or 
                                (dd) of subparagraph 
                                (B)(i)(II)); and
                                  (bb) offered, or entered 
                                into, on a leveraged or 
                                margined basis, or financed by 
                                the offeror, the counterparty, 
                                or a person acting in concert 
                                with the offeror or 
                                counterparty on a similar 
                                basis.
                  (II) Subclause (I) of this clause shall not 
                apply to--
                          (aa) a security that is not a 
                        security futures product; or
                          (bb) a contract of sale that--
                                  (AA) results in actual 
                                delivery within 2 days; or
                                  (BB) creates an enforceable 
                                obligation to deliver between a 
                                seller and buyer that have the 
                                ability to deliver and accept 
                                delivery, respectively, in 
                                connection with their line of 
                                business.
                  (ii)(I) Agreements, contracts, or 
                transactions described in clause (i) of this 
                subparagraph, and accounts or pooled investment 
                vehicles described in clause (vii), shall be 
                subject to subsection (a)(1)(B) of this section 
                and sections 4(b), 4b, 4c(b), 4o, 6(c) and 6(d) 
                (except to the extent that sections 6(c) and 
                6(d) prohibit manipulation of the market price 
                of any commodity in interstate commerce, or for 
                future delivery on or subject to the rules of 
                any market), 6c, 6d, 8(a), 13(a), and 13(b).
                  (II) Subclause (I) of this clause shall not 
                apply to--
                          (aa) any person described in any of 
                        item (aa), (bb), [(ee), or (ff)] or 
                        (dd) of subparagraph (B)(i)(II); or
                          (bb) any such person's associated 
                        persons.
                  (III) The Commission may make, promulgate, 
                and enforce such rules and regulations as, in 
                the judgment of the Commission, are reasonably 
                necessary to effectuate any of the provisions 
                of or to accomplish any of the purposes of this 
                Act in connection with agreements, contracts, 
                or transactions described in clause (i) of this 
                subparagraph if the agreements, contracts, or 
                transactions are offered, or entered into, by a 
                person that is not described in item (aa) 
                through (ff) of subparagraph (B)(i)(II).
                  (iii)(I) A person, unless registered in such 
                capacity as the Commission by rule, regulation, 
                or order shall determine and a member of a 
                futures association registered under section 
                17, shall not--
                          (aa) solicit or accept orders from 
                        any person that is not an eligible 
                        contract participant in connection with 
                        agreements, contracts, or transactions 
                        described in clause (i) of this 
                        subparagraph entered into with or to be 
                        entered into with a person who is not 
                        described in item (aa), (bb), [(ee), or 
                        (ff)] or (dd) of subparagraph 
                        (B)(i)(II);
                          (bb) exercise discretionary trading 
                        authority or obtain written 
                        authorization to exercise written 
                        trading authority over any account for 
                        or on behalf of any person that is not 
                        an eligible contract participant in 
                        connection with agreements, contracts, 
                        or transactions described in clause (i) 
                        of this subparagraph entered into with 
                        or to be entered into with a person who 
                        is not described in item (aa), (bb), 
                        [(ee), or (ff)] or (dd) of subparagraph 
                        (B)(i)(II), or otherwise act as a 
                        commodity trading advisor with respect 
                        to any agreement, contract, or 
                        transaction described in clause (i); or
                          (cc) operate or solicit funds, 
                        securities, or property for any pooled 
                        investment vehicle that is not an 
                        eligible contract participant in 
                        connection with agreements, contracts, 
                        or transactions described in clause (i) 
                        of this subparagraph entered into with 
                        or to be entered into with a person who 
                        is not described in item (aa), (bb), 
                        [(ee), or (ff)] or (dd) of subparagraph 
                        (B)(i)(II).
                  (II) Subclause (I) of this clause shall not 
                apply to--
                          (aa) any person described in item 
                        (aa), (bb), [(ee), or (ff)] or (dd) of 
                        subparagraph (B)(i)(II);
                          (bb) any such person's associated 
                        persons; or
                          (cc) any person who would be exempt 
                        from registration if engaging in the 
                        same activities in connection with 
                        transactions conducted on or subject to 
                        the rules of a contract market [or a 
                        derivatives transaction execution 
                        facility].
                  (III) The Commission may make, promulgate, 
                and enforce such rules and regulations as, in 
                the judgment of the Commission, are reasonably 
                necessary to effectuate any of the provisions 
                of, or to accomplish any of the purposes of, 
                this Act in connection with the activities of 
                persons subject to subclause (I).
                  (IV) Subclause (III) of this clause shall not 
                apply to--
                          (aa) any person described in [item 
                        (aa) through (ff)] items (aa) through 
                        (dd) of subparagraph (B)(i)(II);
                          (bb) any such person's associated 
                        persons; or
                          (cc) any person who would be exempt 
                        from registration if engaging in the 
                        same activities in connection with 
                        transactions conducted on or subject to 
                        the rules of a contract market [or a 
                        derivatives transaction execution 
                        facility].
                  (iv) Sections 4(b) and 4b shall apply to any 
                agreement, contract, or transaction described 
                in clause (i) of this subparagraph as if the 
                agreement, contract, or transaction were a 
                contract of sale of a commodity for future 
                delivery.
                  (v) This subparagraph shall not be construed 
                to limit any jurisdiction that the Commission 
                may otherwise have under any other provision of 
                this Act over an agreement, contract, or 
                transaction that is a contract of sale of a 
                commodity for future delivery.
                  (vi) This subparagraph shall not be construed 
                to limit any jurisdiction that the Commission 
                or the Securities and Exchange Commission may 
                otherwise have under any other provision of 
                this Act with respect to security futures 
                products and persons effecting transactions in 
                security futures products.
                          (vii) This Act applies to, and the 
                        Commission shall have jurisdiction 
                        over, an account or pooled investment 
                        vehicle that is offered for the purpose 
                        of trading, or that trades, any 
                        agreement, contract, or transaction in 
                        foreign currency described in clause 
                        (i).
                  (D) Retail commodity transactions.--
                          (i) Applicability.--Except as 
                        provided in clause (ii), this 
                        subparagraph shall apply to any 
                        agreement, contract, or transaction in 
                        any commodity that is--
                                  (I) entered into with, or 
                                offered to (even if not entered 
                                into with), a person that is 
                                not an eligible contract 
                                participant or eligible 
                                commercial entity; and
                                  (II) entered into, or offered 
                                (even if not entered into), on 
                                a leveraged or margined basis, 
                                or financed by the offeror, the 
                                counterparty, or a person 
                                acting in concert with the 
                                offeror or counterparty on a 
                                similar basis.
                          (ii) Exceptions.--This subparagraph 
                        shall not apply to--
                                  (I) an agreement, contract, 
                                or transaction described in 
                                paragraph (1) or subparagraphs 
                                (A), (B), or (C), including any 
                                agreement, contract, or 
                                transaction specifically 
                                excluded from subparagraph (A), 
                                (B), or (C);
                                  (II) any security;
                                  (III) a contract of sale 
                                that--
                                          (aa) results in 
                                        actual delivery within 
                                        28 days or such other 
                                        longer period as the 
                                        Commission may 
                                        determine by rule or 
                                        regulation based upon 
                                        the typical commercial 
                                        practice in cash or 
                                        spot markets for the 
                                        commodity involved; or
                                          (bb) creates an 
                                        enforceable obligation 
                                        to deliver between a 
                                        seller and a buyer that 
                                        have the ability to 
                                        deliver and accept 
                                        delivery, respectively, 
                                        in connection with the 
                                        line of business of the 
                                        seller and buyer; or
                                  (IV) an agreement, contract, 
                                or transaction that is listed 
                                on a national securities 
                                exchange registered under 
                                section 6(a) of the Securities 
                                Exchange Act of 1934 (15 U.S.C. 
                                78f(a)); or
                                  (V) an identified banking 
                                product, as defined in section 
                                402(b) of the Legal Certainty 
                                for Bank Products Act of 2000 
                                (7 U.S.C.27(b)).
                          (iii) Enforcement.--Sections 4(a), 
                        4(b), and 4b apply to any agreement, 
                        contract, or transaction described in 
                        clause (i), as if the agreement, 
                        contract, or transaction was a contract 
                        of sale of a commodity for future 
                        delivery.
                          (iv) Eligible commercial entity.--For 
                        purposes of this subparagraph, an 
                        agricultural producer, packer, or 
                        handler shall be considered to be an 
                        eligible commercial entity for any 
                        agreement, contract, or transaction for 
                        a commodity in connection with the line 
                        of business of the agricultural 
                        producer, packer, or handler.
                  (E) Prohibition.--
                          (i) Definition of federal regulatory 
                        agency.--In this subparagraph, the term 
                        ``Federal regulatory agency'' means--
                                  (I) the Commission;
                                  (II) the Securities and 
                                Exchange Commission;
                                  (III) an appropriate Federal 
                                banking agency;
                                  (IV) the National Credit 
                                Union Association; and
                                  (V) the Farm Credit 
                                Administration.
                          (ii) Prohibition.--
                                  (I) In general.--Except as 
                                provided in subclause (II), a 
                                person described in 
                                subparagraph (B)(i)(II) for 
                                which there is a Federal 
                                regulatory agency shall not 
                                offer to, or enter into with, a 
                                person that is not an eligible 
                                contract participant, any 
                                agreement, contract, or 
                                transaction in foreign currency 
                                described in subparagraph 
                                (B)(i)(I) or (C)(i)(I) except 
                                pursuant to a rule or 
                                regulation of a Federal 
                                regulatory agency allowing the 
                                agreement, contract, or 
                                transaction under such terms 
                                and conditions as the Federal 
                                regulatory agency shall 
                                prescribe.
                                  (II) Effective date.--With 
                                regard to persons described in 
                                subparagraph (B)(i)(II) for 
                                which a Federal regulatory 
                                agency has issued a proposed 
                                rule concerning agreements, 
                                contracts, or transactions in 
                                foreign currency described in 
                                subparagraph (B)(i)(I) prior to 
                                the date of enactment of this 
                                subclause, subclause (I) shall 
                                take effect 90 days after the 
                                date of enactment of this 
                                subclause.
                          (iii) Requirements of rules and 
                        regulations.--
                                  (I) In general.--The rules 
                                and regulations described in 
                                clause (ii) shall prescribe 
                                appropriate requirements with 
                                respect to--
                                          (aa) disclosure;
                                          (bb) recordkeeping;
                                          (cc) capital and 
                                        margin;
                                          (dd) reporting;
                                          (ee) business 
                                        conduct;
                                          (ff) documentation; 
                                        and
                                          (gg) such other 
                                        standards or 
                                        requirements as the 
                                        Federal regulatory 
                                        agency shall determine 
                                        to be necessary.
                                  (II) Treatment.--The rules or 
                                regulations described in clause 
                                (ii) shall treat all 
                                agreements, contracts, and 
                                transactions in foreign 
                                currency described in 
                                subparagraph (B)(i)(I), and all 
                                agreements, contracts, and 
                                transactions in foreign 
                                currency that are functionally 
                                or economically similar to 
                                agreements, contracts, or 
                                transactions described in 
                                subparagraph (B)(i)(I), 
                                similarly.
  (d) Swaps.--Nothing in this Act (other than subparagraphs 
(A), (B), (C), (D), (G), and (H) of subsection (a)(1), 
subsections (f) and (g), sections 1a, 2(a)(13), 2(c)(2)(A)(ii), 
2(e), 2(h), 4(c), 4a, 4b, and 4b-1, subsections (a), (b), and 
[(g) of] (e) of section 4c, sections 4d, 4e, 4f, 4g, 4h, 4i, 
4j, 4k, 4l, 4m, 4n, 4o, 4p, 4r, 4s, 4t, 5, 5b, 5c, 5e, and 5h, 
subsections (c) and (d) of section 6, sections 6c, 6d, 8, 8a, 
and 9, subsections (e)(2), (f), and (h) of section 12, 
subsections (a) and (b) of section 13, sections 17, 20, 21, and 
22(a)(4), and any other provision of this Act that is 
applicable to registered entities or Commission registrants) 
governs or applies to a swap.
  (e) Limitation on Participation.--It shall be unlawful for 
any person, other than an eligible contract participant, to 
enter into a swap unless the swap is entered into on, or 
subject to the rules of, a board of trade designated as a 
contract market under section 5.
  (f) Exclusion for Qualifying Hybrid Instruments.--
          (1) In general.--Nothing in this Act (other than 
        section 12(e)(2)(B)) governs or is applicable to a 
        hybrid instrument that is predominantly a security.
          (2) Predominance.--A hybrid instrument shall be 
        considered to be predominantly a security if--
                  (A) the issuer of the hybrid instrument 
                receives payment in full of the purchase price 
                of the hybrid instrument, substantially 
                contemporaneously with delivery of the hybrid 
                instrument;
                  (B) the purchaser or holder of the hybrid 
                instrument is not required to make any payment 
                to the issuer in addition to the purchase price 
                paid under subparagraph (A), whether as margin, 
                settlement payment, or otherwise, during the 
                life of the hybrid instrument or at maturity;
                  (C) the issuer of the hybrid instrument is 
                not subject by the terms of the instrument to 
                mark-to-market margining requirements; and
                  (D) the hybrid instrument is not marketed as 
                a contract of sale of a commodity for future 
                delivery (or option on such a contract) subject 
                to this Act.
          (3) Mark-to-market margining requirements.--For the 
        purposes of paragraph (2)(C), mark-to-market margining 
        requirements do not include the obligation of an issuer 
        of a secured debt instrument to increase the amount of 
        collateral held in pledge for the benefit of the 
        purchaser of the secured debt instrument to secure the 
        repayment obligations of the issuer under the secured 
        debt instrument.
  (g) Application of Commodity Futures Laws.--
          (1) No provision of this Act shall be construed as 
        implying or creating any presumption that--
                  (A) any agreement, contract, or transaction 
                that is excluded from this Act under section 
                2(c), 2(d), 2(e), 2(f), or 2(g) of this Act or 
                title IV of the Commodity Futures Modernization 
                Act of 2000, or exempted under section 2(h) or 
                4(c) of this Act; or
                  (B) any agreement, contract, or transaction, 
                not otherwise subject to this Act, that is not 
                so excluded or exempted,
        is or would otherwise be subject to this Act.
          (2) No provision of, or amendment made by, the 
        Commodity Futures Modernization Act of 2000 shall be 
        construed as conferring jurisdiction on the Commission 
        with respect to any such agreement, contract, or 
        transaction, except as expressly provided in section 5b 
        of this Act.
  (h) Clearing Requirement.--
          (1) In general.--
                  (A) Standard for clearing.--It shall be 
                unlawful for any person to engage in a swap 
                unless that person submits such swap for 
                clearing to a derivatives clearing organization 
                that is registered under this Act or a 
                derivatives clearing organization that is 
                exempt from registration under this Act if the 
                swap is required to be cleared.
                  (B) Open access.--The rules of a derivatives 
                clearing organization described in subparagraph 
                (A) shall--
                          (i) prescribe that all swaps (but not 
                        contracts of sale of a commodity for 
                        future delivery or options on such 
                        contracts) submitted to the derivatives 
                        clearing organization with the same 
                        terms and conditions are economically 
                        equivalent within the derivatives 
                        clearing organization and may be offset 
                        with each other within the derivatives 
                        clearing organization; and
                          (ii) provide for non-discriminatory 
                        clearing of a swap (but not a contract 
                        of sale of a commodity for future 
                        delivery or option on such contract) 
                        executed bilaterally or on or through 
                        the rules of an unaffiliated designated 
                        contract market or swap execution 
                        facility.
          (2) Commission review.--
                  (A) Commission-initiated review.--
                          (i) The Commission on an ongoing 
                        basis shall review each swap, or any 
                        group, category, type, or class of 
                        swaps to make a determination as to 
                        whether the swap or group, category, 
                        type, or class of swaps should be 
                        required to be cleared.
                          (ii) The Commission shall provide at 
                        least a 30-day public comment period 
                        regarding any determination made under 
                        clause (i).
                  (B) Swap submissions.--
                          (i) A derivatives clearing 
                        organization shall submit to the 
                        Commission each swap, or any group, 
                        category, type, or class of swaps that 
                        it plans to accept for clearing, and 
                        provide notice to its members (in a 
                        manner to be determined by the 
                        Commission) of the submission.
                          (ii) Any swap or group, category, 
                        type, or class of swaps listed for 
                        clearing by a derivative clearing 
                        organization as of the date of 
                        enactment of this subsection shall be 
                        considered submitted to the Commission.
                          (iii) The Commission shall--
                                  (I) make available to the 
                                public submissions received 
                                under clauses (i) and (ii);
                                  (II) review each submission 
                                made under clauses (i) and 
                                (ii), and determine whether the 
                                swap, or group, category, type, 
                                or class of swaps described in 
                                the submission is required to 
                                be cleared; and
                                  (III) provide at least a 30-
                                day public comment period 
                                regarding its determination as 
                                to whether the clearing 
                                requirement under paragraph 
                                (1)(A) shall apply to the 
                                submission.
                  (C) Deadline.--The Commission shall make its 
                determination under subparagraph (B)(iii) not 
                later than 90 days after receiving a submission 
                made under subparagraphs (B)(i) and (B)(ii), 
                unless the submitting derivatives clearing 
                organization agrees to an extension for the 
                time limitation established under this 
                subparagraph.
                  (D) Determination.--
                          (i) In reviewing a submission made 
                        under subparagraph (B), the Commission 
                        shall review whether the submission is 
                        consistent with section 5b(c)(2).
                          (ii) In reviewing a swap, group of 
                        swaps, or class of swaps pursuant to 
                        subparagraph (A) or a submission made 
                        under subparagraph (B), the Commission 
                        shall take into account the following 
                        factors:
                                  (I) The existence of 
                                significant outstanding 
                                notional exposures, trading 
                                liquidity, and adequate pricing 
                                data.
                                  (II) The availability of rule 
                                framework, capacity, 
                                operational expertise and 
                                resources, and credit support 
                                infrastructure to clear the 
                                contract on terms that are 
                                consistent with the material 
                                terms and trading conventions 
                                on which the contract is then 
                                traded.
                                  (III) The effect on the 
                                mitigation of systemic risk, 
                                taking into account the size of 
                                the market for such contract 
                                and the resources of the 
                                derivatives clearing 
                                organization available to clear 
                                the contract.
                                  (IV) The effect on 
                                competition, including 
                                appropriate fees and charges 
                                applied to clearing.
                                  (V) The existence of 
                                reasonable legal certainty in 
                                the event of the insolvency of 
                                the relevant derivatives 
                                clearing organization or 1 or 
                                more of its clearing members 
                                with regard to the treatment of 
                                customer and swap counterparty 
                                positions, funds, and property.
                          (iii) In making a determination under 
                        subparagraph (A) or (B)(iii) that the 
                        clearing requirement shall apply, the 
                        Commission may require such terms and 
                        conditions to the requirement as the 
                        Commission determines to be 
                        appropriate.
                  (E) Rules.--Not later than 1 year after the 
                date of the enactment of this subsection, the 
                Commission shall adopt rules for a derivatives 
                clearing organization's submission for review, 
                pursuant to this paragraph, of a swap, or a 
                group, category, type, or class of swaps, that 
                it seeks to accept for clearing. Nothing in 
                this subparagraph limits the Commission from 
                making a determination under subparagraph 
                (B)(iii) for swaps described in subparagraph 
                (B)(ii).
          (3) Stay of clearing requirement.--
                  (A) In general.--After making a determination 
                pursuant to paragraph (2)(B), the Commission, 
                on application of a counterparty to a swap or 
                on its own initiative, may stay the clearing 
                requirement of paragraph (1) until the 
                Commission completes a review of the terms of 
                the swap (or the group, category, type, or 
                class of swaps) and the clearing arrangement.
                  (B) Deadline.--The Commission shall complete 
                a review undertaken pursuant to subparagraph 
                (A) not later than 90 days after issuance of 
                the stay, unless the derivatives clearing 
                organization that clears the swap, or group, 
                category, type, or class of swaps agrees to an 
                extension of the time limitation established 
                under this subparagraph.
                  (C) Determination.--Upon completion of the 
                review undertaken pursuant to subparagraph (A), 
                the Commission may--
                          (i) determine, unconditionally or 
                        subject to such terms and conditions as 
                        the Commission determines to be 
                        appropriate, that the swap, or group, 
                        category, type, or class of swaps must 
                        be cleared pursuant to this subsection 
                        if it finds that such clearing is 
                        consistent with paragraph (2)(D); or
                          (ii) determine that the clearing 
                        requirement of paragraph (1) shall not 
                        apply to the swap, or group, category, 
                        type, or class of swaps.
                  (D) Rules.--Not later than 1 year after the 
                date of the enactment of the Wall Street 
                Transparency and Accountability Act of 2010, 
                the Commission shall adopt rules for reviewing, 
                pursuant to this paragraph, a derivatives 
                clearing organization's clearing of a swap, or 
                a group, category, type, or class of swaps, 
                that it has accepted for clearing.
          (4) Prevention of evasion.--
                  (A) In general.--The Commission shall 
                prescribe rules under this subsection (and 
                issue interpretations of rules prescribed under 
                this subsection) as determined by the 
                Commission to be necessary to prevent evasions 
                of the mandatory clearing requirements under 
                this Act.
                  (B) Duty of commission to investigate and 
                take certain actions.--To the extent the 
                Commission finds that a particular swap, group, 
                category, type, or class of swaps would 
                otherwise be subject to mandatory clearing but 
                no derivatives clearing organization has listed 
                the swap, group, category, type, or class of 
                swaps for clearing, the Commission shall--
                          (i) investigate the relevant facts 
                        and circumstances;
                          (ii) within 30 days issue a public 
                        report containing the results of the 
                        investigation; and
                          (iii) take such actions as the 
                        Commission determines to be necessary 
                        and in the public interest, which may 
                        include requiring the retaining of 
                        adequate margin or capital by parties 
                        to the swap, group, category, type, or 
                        class of swaps.
                  (C) Effect on authority.--Nothing in this 
                paragraph--
                          (i) authorizes the Commission to 
                        adopt rules requiring a derivatives 
                        clearing organization to list for 
                        clearing a swap, group, category, type, 
                        or class of swaps if the clearing of 
                        the swap, group, category, type, or 
                        class of swaps would threaten the 
                        financial integrity of the derivatives 
                        clearing organization; and
                          (ii) affects the authority of the 
                        Commission to enforce the open access 
                        provisions of paragraph (1)(B) with 
                        respect to a swap, group, category, 
                        type, or class of swaps that is listed 
                        for clearing by a derivatives clearing 
                        organization.
          (5) Reporting transition rules.--Rules adopted by the 
        Commission under this section shall provide for the 
        reporting of data, as follows:
                  (A) Swaps entered into before the date of the 
                enactment of this subsection shall be reported 
                to a registered swap data repository or the 
                Commission no later than 180 days after the 
                effective date of this subsection.
                  (B) Swaps entered into on or after such date 
                of enactment shall be reported to a registered 
                swap data repository or the Commission no later 
                than the later of--
                          (i) 90 days after such effective 
                        date; or
                          (ii) such other time after entering 
                        into the swap as the Commission may 
                        prescribe by rule or regulation.
          (6) Clearing transition rules.--
                  (A) Swaps entered into before the date of the 
                enactment of this subsection are exempt from 
                the clearing requirements of this subsection if 
                reported pursuant to paragraph (5)(A).
                  (B) Swaps entered into before application of 
                the clearing requirement pursuant to this 
                subsection are exempt from the clearing 
                requirements of this subsection if reported 
                pursuant to paragraph (5)(B).
          (7) Exceptions.--
                  (A) In general.--The requirements of 
                paragraph (1)(A) shall not apply to a swap if 1 
                of the counterparties to the swap--
                          (i) is not a financial entity;
                          (ii) is using swaps to hedge or 
                        mitigate commercial risk; and
                          (iii) notifies the Commission, in a 
                        manner set forth by the Commission, how 
                        it generally meets its financial 
                        obligations associated with entering 
                        into non-cleared swaps.
                  (B) Option to clear.--The application of the 
                clearing exception in subparagraph (A) is 
                solely at the discretion of the counterparty to 
                the swap that meets the conditions of clauses 
                (i) through (iii) of subparagraph (A).
                  (C) Financial entity definition.--
                          (i) In general.--For the purposes of 
                        this paragraph, the term ``financial 
                        entity'' means--
                                  (I) a swap dealer;
                                  (II) a security-based swap 
                                dealer;
                                  (III) a major swap 
                                participant;
                                  (IV) a major security-based 
                                swap participant;
                                  (V) a commodity pool;
                                  (VI) a private fund as 
                                defined in section 202(a) of 
                                the Investment Advisers Act of 
                                1940 (15 U.S.C. 80-b-2(a));
                                  (VII) an employee benefit 
                                plan as defined in paragraphs 
                                (3) and (32) of section 3 of 
                                the Employee Retirement Income 
                                Security Act of 1974 (29 U.S.C. 
                                1002);
                                  (VIII) a person predominantly 
                                engaged in activities that are 
                                in the business of banking, or 
                                in activities that are 
                                financial in nature, as defined 
                                in section 4(k) of the Bank 
                                Holding Company Act of 1956.
                          (ii) Exclusion.--The Commission shall 
                        consider whether to exempt small banks, 
                        savings associations, farm credit 
                        system institutions, and credit 
                        [unions, including--] unions, bank 
                        holding companies, and savings and loan 
                        holding companies, including--
                                  (I) depository institutions 
                                with total assets of 
                                $10,000,000,000 or less;
                                  (II) farm credit system 
                                institutions with total assets 
                                of $10,000,000,000 or less; 
                                [or]
                                  (III) credit unions with 
                                total assets of $10,000,000,000 
                                or less[.];
                                  (IV) bank holding companies 
                                (as defined in section 2 of the 
                                Bank Holding Company Act of 
                                1956) that have aggregated 
                                assets, including the assets of 
                                their subsidiaries, of 
                                $10,000,000,000 or less; and
                                  (V) savings and loan holding 
                                companies (as defined in 
                                section 10 of the Home Owners' 
                                Loan Act of 1933) that have 
                                aggregated assets, including 
                                the assets of their 
                                subsidiaries, of 
                                $10,000,000,000 or less.
                          (iii) Limitation.--Such definition 
                        shall not include an entity whose 
                        primary business is providing 
                        financing, and 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.
                  (D) Treatment of affiliates.--
                          (i) In general.--An affiliate of a 
                        person that qualifies for an exception 
                        under subparagraph (A) (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--
                                  (I) 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, and the commercial risk 
                                that the affiliate is hedging 
                                or mitigating has been 
                                transferred to the affiliate;
                                  (II) is directly and wholly-
                                owned by another affiliate 
                                qualified for the exception 
                                under this subparagraph or an 
                                entity that is not a financial 
                                entity;
                                  (III) is not indirectly 
                                majority-owned by a financial 
                                entity;
                                  (IV) is not ultimately owned 
                                by a parent company that is a 
                                financial entity; and
                                  (V) does not provide any 
                                services, financial or 
                                otherwise, to any affiliate 
                                that is a nonbank financial 
                                company supervised by the Board 
                                of Governors (as defined under 
                                section 102 of the Financial 
                                Stability Act of 2010).
                          (ii) Limitation on qualifying 
                        affiliates.--The exception in clause 
                        (i) shall not apply if the affiliate 
                        is--
                                  (I) a swap dealer;
                                  (II) a security-based swap 
                                dealer;
                                  (III) a major swap 
                                participant;
                                  (IV) a major security-based 
                                swap participant;
                                  (V) a commodity pool;
                                  (VI) a bank holding company;
                                  (VII) a private fund, as 
                                defined in section 202(a) of 
                                the Investment Advisers Act of 
                                1940 (15 U.S.C. 80-b-2(a));
                                  (VIII) an employee benefit 
                                plan or government plan, as 
                                defined in paragraphs (3) and 
                                (32) of section 3 of the 
                                Employee Retirement Income 
                                Security Act of 1974 (29 U.S.C. 
                                1002);
                                  (IX) an insured depository 
                                institution;
                                  (X) a farm credit system 
                                institution;
                                  (XI) a credit union;
                                  (XII) a nonbank financial 
                                company supervised by the Board 
                                of Governors (as defined under 
                                section 102 of the Financial 
                                Stability Act of 2010); or
                                  (XIII) an entity engaged in 
                                the business of insurance and 
                                subject to capital requirements 
                                established by an insurance 
                                governmental authority of a 
                                State, a territory of the 
                                United States, the District of 
                                Columbia, a country other than 
                                the United States, or a 
                                political subdivision of a 
                                country other than the United 
                                States that is engaged in the 
                                supervision of insurance 
                                companies under insurance law.
                          (iii) Limitation on affiliates' 
                        affiliates.--Unless the Commission 
                        determines, by order, rule, or 
                        regulation, that it is in the public 
                        interest, the exception in clause (i) 
                        shall not apply with respect to an 
                        affiliate if the affiliate is itself 
                        affiliated with--
                                  (I) a major security-based 
                                swap participant;
                                  (II) a security-based swap 
                                dealer;
                                  (III) a major swap 
                                participant; or
                                  (IV) a swap dealer.
                          (iv) Conditions on transactions.--
                        With respect to an affiliate that 
                        qualifies for the exception in clause 
                        (i)--
                                  (I) the affiliate may not 
                                enter into any swap other than 
                                for the purpose of hedging or 
                                mitigating commercial [risk; 
                                and] risk, unless the affiliate 
                                can demonstrate to the 
                                Commission, as determined by 
                                the Commission, that--
                                          (aa) the affiliate 
                                        has utilized the 
                                        exception in clause (i) 
                                        only to hedge or 
                                        mitigate commercial 
                                        risk; and 
                                          (bb) the affiliate 
                                        complies, as a 
                                        financial entity, with 
                                        the obligations of the 
                                        affiliate with respect 
                                        to any swap for which 
                                        the exception in clause 
                                        (i) is not exercised; 
                                        and 
                                  (II) [neither the affiliate 
                                nor any person affiliated with 
                                the affiliate that is not a 
                                financial entity] neither the 
                                affiliate that qualifies for 
                                the exception in clause (i) nor 
                                any person affiliated with the 
                                affiliate, that is directly or 
                                indirectly wholly- or majority-
                                owned by the same ultimate 
                                parent, and that enters into 
                                swaps with the affiliate may 
                                enter into a swap with or on 
                                behalf of any affiliate that is 
                                a financial entity or otherwise 
                                assume, net, combine, or 
                                consolidate the risk of swaps 
                                entered into by any such 
                                financial entity, except one 
                                that is an affiliate that 
                                qualifies for the exception 
                                under clause (i).
                          (v) Transition rule for affiliates.--
                        An affiliate, subsidiary, or a wholly 
                        owned entity of a person that qualifies 
                        for an exception under subparagraph (A) 
                        and is predominantly engaged in 
                        providing financing for the purchase or 
                        lease of merchandise or manufactured 
                        goods of the person shall be exempt 
                        from the margin requirement described 
                        in section 4s(e) and the clearing 
                        requirement described in paragraph (1) 
                        with regard to swaps entered into to 
                        mitigate the risk of the financing 
                        activities for not less than a 2-year 
                        period beginning on the date of 
                        enactment of this clause.
                          (vi) Risk management program.--Any 
                        swap entered into by an affiliate that 
                        qualifies for the exception in clause 
                        (i) shall be subject to a centralized 
                        risk management program of the 
                        affiliate, which is reasonably designed 
                        both to monitor and manage the risks 
                        associated with the swap and to 
                        identify each of the affiliates on 
                        whose behalf a swap was entered into.
                  (E) Election of counterparty.--
                          (i) Swaps required to be cleared.--
                        With respect to any swap that is 
                        subject to the mandatory clearing 
                        requirement under this subsection and 
                        entered into by a swap dealer or a 
                        major swap participant with a 
                        counterparty that is not a swap dealer, 
                        major swap participant, security-based 
                        swap dealer, or major security-based 
                        swap participant, the counterparty 
                        shall have the sole right to select the 
                        derivatives clearing organization at 
                        which the swap will be cleared.
                          (ii) Swaps not required to be 
                        cleared.--With respect to any swap that 
                        is not subject to the mandatory 
                        clearing requirement under this 
                        subsection and entered into by a swap 
                        dealer or a major swap participant with 
                        a counterparty that is not a swap 
                        dealer, major swap participant, 
                        security-based swap dealer, or major 
                        security-based swap participant, the 
                        counterparty--
                                  (I) may elect to require 
                                clearing of the swap; and
                                  (II) shall have the sole 
                                right to select the derivatives 
                                clearing organization at which 
                                the swap will be cleared.
                  (F) Abuse of exception.--The Commission may 
                prescribe such rules or issue interpretations 
                of the rules as the Commission determines to be 
                necessary to prevent abuse of the exceptions 
                described in this paragraph. The Commission may 
                also request information from those persons 
                claiming the clearing exception as necessary to 
                prevent abuse of the exceptions described in 
                this paragraph.
          (8) Trade execution.--
                  (A) In general.--With respect to transactions 
                involving swaps subject to the clearing 
                requirement of paragraph (1), counterparties 
                shall--
                          (i) execute the transaction on a 
                        board of trade designated as a contract 
                        market under section 5; or
                          (ii) execute the transaction on a 
                        swap execution facility registered 
                        under 5h or a swap execution facility 
                        that is exempt from registration under 
                        section [5h(f) of this Act] 5h(g).
                  (B) Exception.--The requirements of clauses 
                (i) and (ii) of subparagraph (A) shall not 
                apply if no board of trade or swap execution 
                facility makes the swap available to trade or 
                for swap transactions subject to the clearing 
                exception under paragraph (7).
  (i) Applicability.--The provisions of this Act relating to 
swaps that were enacted by the Wall Street Transparency and 
Accountability Act of 2010 (including any rule prescribed or 
regulation promulgated under that Act), shall not apply to 
activities outside the United States unless those activities--
          (1) have a direct and significant connection with 
        activities in, or effect on, commerce of the United 
        States; or
          (2) contravene such rules or regulations as the 
        Commission may prescribe or promulgate as are necessary 
        or appropriate to prevent the evasion of any provision 
        of this Act that was enacted by the Wall Street 
        Transparency and Accountability Act of 2010.
  (j) Committee Approval by Board.--Exemptions from the 
requirements of subsection (h)(1) to clear a swap and 
subsection (h)(8) to execute a swap through a board of trade or 
swap execution facility shall be available to a counterparty 
that is an issuer of securities that are registered under 
section 12 of the Securities Exchange Act of 1934 (15 U.S.C. 
78l) or that is required to file reports pursuant to section 
15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78o) 
only if an appropriate committee of the issuer's board or 
governing body has reviewed and approved its decision to enter 
into swaps that are subject to such exemptions.

           *       *       *       *       *       *       *

  Sec. 4. (a) Unless exempted by the Commission pursuant to 
subsection (c) or by subsection (e), it shall be unlawful for 
any person to offer to enter into, to enter into, to execute, 
to confirm the execution of, or to conduct any office or 
business anywhere in the United States, its territories or 
possessions, for the purpose of soliciting, or accepting any 
order for, or otherwise dealing in, any transaction in, or in 
connection with, a contract for the purchase or sale of a 
commodity for future delivery (other than a contract which is 
made on or subject to the rules of a board of trade, exchange, 
or market located outside the United States, its territories or 
possessions) unless--
          (1) such transaction is conducted on or subject to 
        the rules of a board of trade which has been designated 
        [or registered] by the Commission as a contract market 
        [or derivatives transaction execution facility] for 
        such commodity;
          (2) such contract is executed or consummated by or 
        through a contract market; and
          (3) such contract is evidenced by a record in writing 
        which shows the date, the parties to such contract and 
        their addresses, the property covered and its price, 
        and the terms of delivery: Provided, That each contract 
        market [or derivatives transaction execution facility] 
        member shall keep such record for a period of three 
        years from the date thereof, or for a longer period if 
        the Commission shall so direct, which record shall at 
        all times be open to the inspection of any 
        representative of the Commission or the Department of 
        Justice.
  (b)
          (1) Foreign boards of trade.--
                  (A) Registration.--The Commission may adopt 
                rules and regulations requiring registration 
                with the Commission for a foreign board of 
                trade that provides the members of the foreign 
                board of trade or other participants located in 
                the United States with direct access to the 
                electronic trading and order matching system of 
                the foreign board of trade, including rules and 
                regulations prescribing procedures and 
                requirements applicable to the registration of 
                such foreign boards of trade. For purposes of 
                this paragraph, ``direct access'' refers to an 
                explicit grant of authority by a foreign board 
                of trade to an identified member or other 
                participant located in the United States to 
                enter trades directly into the trade matching 
                system of the foreign board of trade. In 
                adopting such rules and regulations, the 
                commission shall consider--
                          (i) whether any such foreign board of 
                        trade is subject to comparable, 
                        comprehensive supervision and 
                        regulation by the appropriate 
                        governmental authorities in the foreign 
                        board of trade's home country; and
                          (ii) any previous commission findings 
                        that the foreign board of trade is 
                        subject to comparable comprehensive 
                        supervision and regulation by the 
                        appropriate government authorities in 
                        the foreign board of trade's home 
                        country.
                  (B) Linked contracts.--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 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 the Commission 
                determines that--
                          (i) 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
                          (ii) 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 
                                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, with 
                                regard to the agreement, 
                                contract, or transaction that 
                                settles against any price 
                                (including the daily or final 
                                settlement price) of 1 or more 
                                contracts listed for trading on 
                                a registered entity, of any 
                                change regarding--
                                          (aa) the information 
                                        that the foreign board 
                                        of trade will make 
                                        publicly available;
                                          (bb) the position 
                                        limits that the foreign 
                                        board of trade or 
                                        foreign futures 
                                        authority will adopt 
                                        and enforce;
                                          (cc) 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
                                          (dd) 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 
                                such information as is 
                                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 on 
                                aggregate trader positions for 
                                the 1 or more contracts against 
                                which the agreement, contract, 
                                or transaction traded on the 
                                foreign board of trade settles.
                  (C) Existing foreign boards of trade.--
                Subparagraphs (A) and (B) shall not be 
                effective with respect to any foreign board of 
                trade to which, prior to the date of enactment 
                of this paragraph, the Commission granted 
                direct access permission until the date that is 
                180 days after that date of enactment.
          (2) Persons located in the united states.--
                  (A) In general.--The Commission may adopt 
                rules and regulations proscribing fraud and 
                requiring minimum financial standards, the 
                disclosure of risk, the filing of reports, the 
                keeping of books and records, the safeguarding 
                of customers' funds, and registration with the 
                Commission by any person located in the United 
                States, its territories or possessions, who 
                engages in the offer or sale of any contract of 
                sale of a commodity for future delivery that is 
                made or to be made on or subject to the rules 
                of a board of trade, exchange, or market 
                located outside the United States, its 
                territories or possessions.
                  (B) Different requirements.--Rules and 
                regulations described in subparagraph (A) may 
                impose different requirements for such persons 
                depending upon the particular foreign board of 
                trade, exchange, or market involved.
                  (C) Prohibition.--Except as provided in 
                paragraphs (1) and (2), no rule or regulation 
                may be adopted by the Commission under this 
                subsection that--
                          (i) requires Commission approval of 
                        any contract, rule, regulation, or 
                        action of any foreign board of trade, 
                        exchange, or market, or clearinghouse 
                        for such board of trade, exchange, or 
                        market; or
                          (ii) governs in any way any rule or 
                        contract term or action of any foreign 
                        board of trade, exchange, or market, or 
                        clearinghouse for such board of trade, 
                        exchange, or market.
  (c)(1) In order to promote responsible economic or financial 
innovation and fair competition, the Commission by rule, 
regulation, or order, after notice and opportunity for hearing, 
may (on its own initiative or on application of any person, 
including any board of trade designated [or registered] as a 
contract market [or derivatives transaction execution facility] 
for transactions for future delivery in any commodity under 
section 5 of this Act) exempt any agreement, contract, or 
transaction (or class thereof) that is otherwise subject to 
subsection (a) (including any person or class of persons 
offering, entering into, rendering advice or rendering other 
services with respect to, the agreement, contract, or 
transaction), either unconditionally or on stated terms or 
conditions or for stated periods and either retroactively or 
prospectively, or both, from any of the requirements of 
subsection (a), or from any other provision of this Act (except 
subparagraphs (C)(ii) and (D) of section 2(a)(1), except that--
          (A) unless the Commission is expressly authorized by 
        any provision described in this subparagraph to grant 
        exemptions, with respect to amendments made by subtitle 
        A of the Wall Street Transparency and Accountability 
        Act of 2010--
                  (i) with respect to--
                          (I) paragraphs (2), (3), (4), (5), 
                        and (7), paragraph (18)(A)(vii)(III), 
                        paragraphs (23), (24), (31), (32), 
                        (38), (39), (41), (42), (46), (47), 
                        (48), and (49) of section 1a, and 
                        sections 2(a)(13), 2(c)(1)(D), 4a(a), 
                        4a(b), 4d(c), 4d(d), 4r, 4s, 5b(a), 
                        5b(b), 5(d), 5(g), 5(h), 5b(c), 5b(i), 
                        8e, and 21; and
                          (II) section 206(e) of the Gramm-
                        Leach-Bliley Act (Public Law 106-102; 
                        15 U.S.C. 78c note); and
                  (ii) in sections 721(c) and 742 of the Dodd-
                Frank Wall Street Reform and Consumer 
                Protection Act; and
          (B) the Commission and the Securities and Exchange 
        Commission may by rule, regulation, or order jointly 
        exclude any agreement, contract, or transaction from 
        section 2(a)(1)(D)) if the Commissions determine that 
        the exemption would be consistent with the public 
        interest.
  (2) The Commission shall not grant any exemption under 
paragraph (1) from any of the requirements of subsection (a) 
unless the Commission determines that--
          (A) the requirement should not be applied to the 
        agreement, contract, or transaction for which the 
        exemption is sought and that the exemption would be 
        consistent with the public interest and the purposes of 
        this Act; and
          (B) the agreement, contract, or transaction--
                  (i) will be entered into solely between 
                appropriate persons; and
                  (ii) will not have a material adverse effect 
                on the ability of the Commission or any 
                contract market or derivatives transaction 
                execution facility to discharge its regulatory 
                or self-regulatory duties under this Act.
  (3) For purposes of this subsection, the term ``appropriate 
person'' shall be limited to the following persons or classes 
thereof:
          (A) A bank or trust company (acting in an individual 
        or fiduciary capacity).
          (B) A savings association.
          (C) An insurance company.
          (D) An investment company subject to regulation under 
        the Investment Company Act of 1940 (15 U.S.C. 80a-1 et 
        seq.).
          (E) A commodity pool formed or operated by a person 
        subject to regulation under this Act.
          (F) A corporation, partnership, proprietorship, 
        organization, trust, or other business entity with a 
        net worth exceeding $1,000,000 or total assets 
        exceeding $5,000,000, or the obligations of which under 
        the agreement, contract or transaction are guaranteed 
        or otherwise supported by a letter of credit or 
        keepwell, support, or other agreement by any such 
        entity or by an entity referred to in subparagraph (A), 
        (B), (C), (H), (I), or (K) of this paragraph.
          (G) An employee benefit plan with assets exceeding 
        $1,000,000, or whose investment decisions are made by a 
        bank, trust company, insurance company, investment 
        adviser registered under the Investment Advisers Act of 
        1940 (15 U.S.C. 80a-1 et seq.), or a commodity trading 
        advisor subject to regulation under this Act.
          (H) Any governmental entity (including the United 
        States, any [state] State, or any foreign government) 
        or political subdivision thereof, or any multinational 
        or supranational entity or any instrumentality, agency, 
        or department of any of the foregoing.
          (I) A broker-dealer subject to regulation under the 
        Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) 
        acting on its own behalf or on behalf of another 
        appropriate person.
          (J) A futures commission merchant, floor broker, or 
        floor trader subject to regulation under this Act 
        acting on its own behalf or on behalf of another 
        appropriate person.
          (K) Such other persons that the Commission determines 
        to be appropriate in light of their financial or other 
        qualifications, or the applicability of appropriate 
        regulatory protections.
  (4) During the pendency of an application for an order 
granting an exemption under paragraph (1), the Commission may 
limit the public availability of any information received from 
the applicant if the applicant submits a written request to 
limit disclosure contemporaneous with the application, and the 
Commission determines that--
          (A) the information sought to be restricted 
        constitutes a trade secret; or
          (B) public disclosure of the information would result 
        in material competitive harm to the applicant.
  (5) The Commission may--
          (A) promptly following the enactment of this 
        subsection, or upon application by any person, exercise 
        the exemptive authority granted under paragraph (1) 
        with respect to classes of hybrid instruments that are 
        predominantly securities or depository instruments, to 
        the extent that such instruments may be regarded as 
        subject to the provisions of this Act; or
          (B) promptly following the enactment of this 
        subsection, or upon application by any person, exercise 
        the exemptive authority granted under paragraph (1) 
        effective as of October 23, 1974, with respect to 
        classes of swap agreements (as defined in section 101 
        of title 11, United States Code) that are not part of a 
        fungible class of agreements that are standardized as 
        to their material economic terms, to the extent that 
        such agreements may be regarded as subject to the 
        provisions of this Act.
Any exemption pursuant to this paragraph shall be subject to 
such terms and conditions as the Commission shall determine to 
be appropriate pursuant to paragraph (1).
          (6) If the Commission determines that the exemption 
        would be consistent with the public interest and the 
        purposes of this Act, the Commission shall, in 
        accordance with paragraphs (1) and (2), exempt from the 
        requirements of this Act an agreement, contract, or 
        transaction that is entered into--
                  (A) pursuant to a tariff or rate schedule 
                approved or permitted to take effect by the 
                Federal Energy Regulatory Commission;
                  (B) pursuant to a tariff or rate schedule 
                establishing rates or charges for, or protocols 
                governing, the sale of electric energy approved 
                or permitted to take effect by the regulatory 
                authority of the State or municipality having 
                jurisdiction to regulate rates and charges for 
                the sale of electric energy within the State or 
                municipality; or
                  (C) between entities described in section 
                201(f) of the Federal Power Act (16 U.S.C. 
                824(f)).
  (d) The granting of an exemption under this section shall not 
affect the authority of the Commission under any other 
provision of this Act to conduct investigations in order to 
determine compliance with the requirements or conditions of 
such exemption or to take enforcement action for any violation 
of any provision of this Act or any rule, regulation or order 
thereunder caused by the failure to comply with or satisfy such 
conditions or requirements.
  (e) Liability of Registered Persons Trading on a Foreign 
Board of Trade.--
          (1) In general.--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--
                  (A) has reason to believe that the 
                transaction and the contract is made on or 
                subject to the rules of a foreign board of 
                trade that is--
                          (i) legally organized under the laws 
                        of a foreign country;
                          (ii) authorized to act as a board of 
                        trade by a foreign futures authority; 
                        and
                          (iii) subject to regulation by the 
                        foreign futures authority; and
                  (B) has not been determined by the Commission 
                to be operating in violation of subsection (a).
          (2) Rule of construction.--Nothing in this subsection 
        shall be construed as implying or creating any 
        presumption that a board of trade, exchange, or market 
        is located outside the United States, or its 
        territories or possessions, for purposes of subsection 
        (a).
  Sec. 4a. (a)
          (1) In general.--Excessive speculation in any 
        commodity under contracts of sale of such commodity for 
        future delivery made on or subject to the rules of 
        contract markets [or derivatives transaction execution 
        facilities], or swaps that perform or affect a 
        significant price discovery function with respect to 
        registered entities causing sudden or unreasonable 
        fluctuations or unwarranted changes in the price of 
        such commodity, is an undue and unnecessary burden on 
        interstate commerce in such commodity. For the purpose 
        of diminishing, eliminating, or preventing such burden, 
        the Commission shall, from time to time, after due 
        notice and opportunity for hearing, by rule, 
        regulation, or order, proclaim and fix such limits on 
        the amounts of trading which may be done or positions 
        which may be held by any person, including any group or 
        class of traders, under contracts of sale of such 
        commodity for future delivery on or subject to the 
        rules of any contract market [or derivatives 
        transaction execution facility], swaps traded on or 
        subject to the rules of a designated contract market or 
        a swap execution facility, or swaps not traded on or 
        subject to the rules of a designated contract market or 
        a swap execution facility that performs a significant 
        price discovery function with respect to a registered 
        entity, as the Commission finds are necessary to 
        diminish, eliminate, or prevent such burden. In 
        determining whether any person has exceeded such 
        limits, the positions held and trading done by any 
        persons directly or indirectly controlled by such 
        person shall be included with the positions held and 
        trading done by such person; and further, such limits 
        upon positions and trading shall apply to positions 
        held by, and trading done by, two or more persons 
        acting pursuant to an expressed or implied agreement or 
        understanding, the same as if the positions were held 
        by, or the trading were done by, a single person. 
        Nothing in this section shall be construed to prohibit 
        the Commission from fixing different trading or 
        position limits for different commodities, markets, 
        futures, or delivery months, or for different number of 
        days remaining until the last day of trading in a 
        contract, or different trading limits for buying and 
        selling operations, or different limits for the 
        purposes of paragraphs (1) and (2) of subsection (b) of 
        this section, or from exempting transactions normally 
        known to the trade as ``spreads'' or ``straddles'' or 
        ``arbitrage'' or from fixing limits applying to such 
        transactions or positions different from limits fixed 
        for other transactions or positions. The word 
        ``arbitrage'' in domestic markets shall be defined to 
        mean the same as a ``spread'' or ``straddle''. The 
        Commission is authorized to define the term 
        ``international arbitrage''.
          (2) Establishment of limitations.--
                  (A) In general.--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 physical commodities other than 
                excluded commodities as defined by the 
                Commission, the Commission shall by rule, 
                regulation, or order establish limits on the 
                amount of positions, as appropriate, 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 the contracts or commodities traded on or 
                subject to the rules of a designated contract 
                market.
                  (B) Timing.--
                          (i) Exempt commodities.--For exempt 
                        commodities, the limits required under 
                        subparagraph (A) shall be established 
                        within 180 days after the date of the 
                        enactment of this paragraph.
                          (ii) Agricultural commodities.--For 
                        agricultural commodities, the limits 
                        required under subparagraph (A) shall 
                        be established within 270 days after 
                        the date of the enactment of this 
                        paragraph.
                  (C) Goal.--In establishing the limits 
                required under subparagraph (A), the Commission 
                shall strive to ensure that trading on foreign 
                boards of trade in the same commodity will be 
                subject to comparable limits and that any 
                limits to be imposed by the Commission will not 
                cause price discovery in the commodity to shift 
                to trading on the foreign boards of trade.
          (3) Specific limitations.--In establishing the limits 
        required in paragraph (2), the Commission, as 
        appropriate, 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; and
                  (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.
          (4) Significant price discovery function.--In making 
        a determination whether a swap performs or affects a 
        significant price discovery function with respect to 
        regulated markets, the Commission shall consider, as 
        appropriate:
                  (A) Price linkage.--The extent to which the 
                swap uses or otherwise relies on a daily or 
                final settlement price, or other major price 
                parameter, of another contract traded on a 
                regulated market based upon the same underlying 
                commodity, to value a position, transfer or 
                convert a position, financially settle a 
                position, or close out a position.
                  (B) Arbitrage.--The extent to which the price 
                for the swap is sufficiently related to the 
                price of another contract traded on a regulated 
                market based upon the same underlying commodity 
                so as to permit market participants to 
                effectively arbitrage between the markets by 
                simultaneously maintaining positions or 
                executing trades in the swaps on a frequent and 
                recurring basis.
                  (C) Material price reference.--The extent to 
                which, on a frequent and recurring basis, bids, 
                offers, or transactions in a contract traded on 
                a regulated market are directly based on, or 
                are determined by referencing, the price 
                generated by the swap.
                  (D) Material liquidity.--The extent to which 
                the volume of swaps being traded in the 
                commodity is sufficient to have a material 
                effect on another contract traded on a 
                regulated market.
                  (E) Other material factors.--Such other 
                material factors as the Commission specifies by 
                rule or regulation as relevant to determine 
                whether a swap serves a significant price 
                discovery function with respect to a regulated 
                market.
          (5) Economically equivalent contracts.--
                  (A) Notwithstanding any other provision of 
                this section, the Commission shall establish 
                limits on the amount of positions, including 
                aggregate position limits, as appropriate, 
                other than bona fide hedge positions, that may 
                be held by any person with respect to swaps 
                that are economically equivalent to contracts 
                of sale for future delivery or to options on 
                the contracts or commodities traded on or 
                subject to the rules of a designated contract 
                market subject to paragraph (2).
                  (B) In establishing limits pursuant to 
                subparagraph (A), the Commission shall--
                          (i) develop the limits concurrently 
                        with limits established under paragraph 
                        (2), and the limits shall have similar 
                        requirements as under paragraph (3)(B); 
                        and
                          (ii) establish the limits 
                        simultaneously with limits established 
                        under paragraph (2).
          (6) Aggregate position limits.--The Commission shall, 
        by rule or regulation, establish limits (including 
        related hedge exemption provisions) on the aggregate 
        number or amount of positions in contracts based upon 
        the same underlying commodity (as defined by the 
        Commission) that may be held by any person, including 
        any group or class of traders, for each month across--
                  (A) contracts listed by designated contract 
                markets;
                  (B) with respect to an agreement contract, or 
                transaction that settles against any price 
                (including the daily or final settlement price) 
                of 1 or more contracts listed for trading on a 
                registered entity, contracts traded on a 
                foreign board of trade that provides members or 
                other participants located in the United States 
                with direct access to its electronic trading 
                and order matching system; and
                  (C) swap contracts that perform or affect a 
                significant price discovery function with 
                respect to regulated entities.
          (7) Exemptions.--The Commission, by rule, regulation, 
        or order, may exempt, conditionally or unconditionally, 
        any person or class of persons, any swap or class of 
        swaps, any contract of sale of a commodity for future 
        delivery or class of such contracts, any option or 
        class of options, or any transaction or class of 
        transactions from any requirement it may establish 
        under this section with respect to position limits.
  (b) The Commission shall, in such rule, regulation, or order, 
fix a reasonable time (not to exceed ten days) after the 
promulgation of the rule, regulation, or order; after which, 
and until such rule, regulation, or order is suspended, 
modified, or revoked, it shall be unlawful for any person--
          (1) directly or indirectly to buy or sell, or agree 
        to buy or sell, under contracts of sale of such 
        commodity for future delivery on or subject to the 
        rules of the contract market or markets, or swap 
        execution facility or facilities with respect to a 
        significant price discovery contract, to which the 
        rule, regulation, or order applies, any amount of such 
        commodity during any one business day in excess of any 
        trading limit fixed for one business day by the 
        Commission in such rule, regulation, or order for or 
        with respect to such commodity; or
          (2) directly or indirectly to hold or control a net 
        long or a net short position in any commodity for 
        future delivery on or subject to the rules of any 
        contract market or swap execution facility with respect 
        to a significant price discovery contract in excess of 
        any position limit fixed by the Commission for or with 
        respect to such commodity: Provided, That such position 
        limit shall not apply to a position acquired in good 
        faith prior to the effective date of such rule, 
        regulation, or order.
  (c)(1) No rule, regulation, or order issued under subsection 
(a) of this section shall apply to transactions or positions 
which are shown to be bona fide hedging transactions or 
positions, as such terms shall be defined by the Commission by 
rule, regulation, or order consistent with the purposes of this 
Act. Such terms may be defined to permit producers, purchasers, 
sellers, middlemen, and users of a commodity or a product 
derived therefrom to hedge their legitimate anticipated 
business needs for that period of time into the future for 
which an appropriate futures contract is open and available on 
an exchange. To determine the adequacy of this Act and the 
powers of the Commission acting thereunder to prevent 
unwarranted price pressures by large hedgers, the Commission 
shall monitor and analyze the trading activities of the largest 
hedgers, as determined by the Commission, operating in the 
cattle, hog, or pork belly markets and shall report its 
findings and recommendations to the Senate Committee on 
Agriculture, Nutrition, and Forestry and the House Committee on 
Agriculture in its annual reports for at least two years 
following the date of enactment of the Futures Trading Act of 
1982.
          (2) For the purposes of implementation of subsection 
        (a)(2) for contracts of sale for future delivery or 
        options on the contracts or commodities, the Commission 
        shall define what constitutes a bona fide hedging 
        transaction or position as a transaction or position 
        that--
                  (A)(i) represents a substitute for 
                transactions made or to be made or positions 
                taken or to be taken at a later time in a 
                physical marketing channel;
                  (ii) is economically appropriate to the 
                reduction of risks in the conduct and 
                management of a commercial enterprise; and
                  (iii) arises from the potential change in the 
                value of--
                          (I) assets that a person owns, 
                        produces, manufactures, processes, or 
                        merchandises or anticipates owning, 
                        producing, manufacturing, processing, 
                        or merchandising;
                          (II) liabilities that a person owns 
                        or anticipates incurring; or
                          (III) services that a person 
                        provides, purchases, or anticipates 
                        providing or purchasing; or
                  (B) reduces risks attendant to a position 
                resulting from a swap that--
                          (i) was executed opposite a 
                        counterparty for which the transaction 
                        would qualify as a bona fide hedging 
                        transaction pursuant to subparagraph 
                        (A); or
                          (ii) meets the requirements of 
                        subparagraph (A).
  (d) This section shall apply to a person that is registered 
as a futures commission merchant, an introducing broker, or a 
floor broker under authority of this Act only to the extent 
that transactions made by such person are made on behalf of or 
for the account or benefit of such person. This section shall 
not apply to transactions made by, or on behalf of, or at the 
direction of, the United States, or a duly authorized agency 
thereof.
  (e) Nothing in this section shall prohibit or impair the 
adoption by any contract market[, derivatives transaction 
execution facility,] or by any other board of trade licensed, 
designated, or registered by the Commission [or by any 
electronic trading facility] of any bylaw, rule, regulation, or 
resolution fixing limits on the amount of trading which may be 
done or positions which may be held by any person under 
contracts of sale of any commodity for future delivery traded 
on or subject to the rules of such contract market [or 
derivatives transaction execution facility] [or on an 
electronic trading facility], or under options on such 
contracts or commodities traded on or subject to the rules of 
such contract market[, derivatives transaction execution 
facility,][or electronic trading facility] or such board of 
trade: Provided, That if the Commission shall have fixed limits 
under this section for any contract or under section 4c of this 
Act for any commodity option, then the limits fixed by the 
bylaws, rules, regulations, and resolutions adopted by such 
contract market[, derivatives transaction execution 
facility,][or electronic trading facility] or such board of 
trade shall not be higher than the limits fixed by the 
Commission. It shall be a violation of this Act for any person 
to violate any bylaw, rule, regulation, or resolution of any 
contract market[, derivatives transaction execution facility,] 
or other board of trade licensed, designated, or registered by 
the Commission [or electronic trading facility with respect to 
a significant price discovery contract] fixing limits on the 
amount of trading which may be done or positions which may be 
held by any person under contracts of sale of any commodity for 
future delivery or under options on such contracts or 
commodities, if such bylaw, rule, regulation, or resolution has 
been approved by the Commission or certified by a registered 
entity pursuant to section 5c(c)(1): Provided, That the 
provisions of section 9(a)(5) of this Act shall apply only to 
those who knowingly violate such limits.

           *       *       *       *       *       *       *


SEC. 4C. PROHIBITED TRANSACTIONS.

  (a) In General.--
          (1) Prohibition.--It shall be unlawful for any person 
        to offer to enter into, enter into, or confirm the 
        execution of a transaction described in paragraph (2) 
        involving the purchase or sale of any commodity for 
        future delivery (or any option on such a transaction or 
        option on a commodity) or swap if the transaction is 
        used or may be used to--
                  (A) hedge any transaction in interstate 
                commerce in the commodity or the product or 
                byproduct of the commodity;
                  (B) determine the price basis of any such 
                transaction in interstate commerce in the 
                commodity; or
                  (C) deliver any such commodity sold, shipped, 
                or received in interstate commerce for the 
                execution of the transaction.
          (2) Transaction.--A transaction referred to in 
        paragraph (1) is a transaction that--
                  (A)(i) is, of the character of, or is 
                commonly known to the trade as, a ``wash sale'' 
                or ``accommodation trade''; or
                  (ii) is a fictitious sale; or
                  (B) is used to cause any price to be 
                reported, registered, or recorded that is not a 
                true and bona fide price.
          (3) Contract of sale.--It shall be unlawful for any 
        employee or agent of any department or agency of the 
        Federal Government or any Member of Congress or 
        employee of Congress (as such terms are defined under 
        section 2 of the STOCK Act) or any judicial officer or 
        judicial employee (as such terms are defined, 
        respectively, under section 2 of the STOCK Act) who, by 
        virtue of the employment or position of the Member, 
        officer, employee or agent, acquires information that 
        may affect or tend to affect the price of any commodity 
        in interstate commerce, or for future delivery, or any 
        swap, and which information has not been disseminated 
        by the department or agency of the Federal Government 
        holding or creating the information or by Congress or 
        by the judiciary in a manner which makes it generally 
        available to the trading public, or disclosed in a 
        criminal, civil, or administrative hearing, or in a 
        congressional, administrative, or Government 
        Accountability Office report, hearing, audit, or 
        investigation, to use the information in his personal 
        capacity and for personal gain to enter into, or offer 
        to enter into--
                  (A) a contract of sale of a commodity for 
                future delivery (or option on such a contract);
                  (B) an option (other than an option executed 
                or traded on a national securities exchange 
                registered pursuant to section 6(a) of the 
                Securities Exchange Act of 1934 (15 U.S.C. 
                78f(a)); or
                  (C) a swap.
          (4) Nonpublic information.--
                  (A) Imparting of nonpublic information.--It 
                shall be unlawful for any employee or agent of 
                any department or agency of the Federal 
                Government or any Member of Congress or 
                employee of Congress or any judicial officer or 
                judicial employee who, by virtue of the 
                employment or position of the Member, officer, 
                employee or agent, acquires information that 
                may affect or tend to affect the price of any 
                commodity in interstate commerce, or for future 
                delivery, or any swap, and which information 
                has not been disseminated by the department or 
                agency of the Federal Government holding or 
                creating the information or by Congress or by 
                the judiciary in a manner which makes it 
                generally available to the trading public, or 
                disclosed in a criminal, civil, or 
                administrative hearing, or in a congressional, 
                administrative, or Government Accountability 
                Office report, hearing, audit, or 
                investigation, to impart the information in his 
                personal capacity and for personal gain with 
                intent to assist another person, directly or 
                indirectly, to use the information to enter 
                into, or offer to enter into--
                          (i) a contract of sale of a commodity 
                        for future delivery (or option on such 
                        a contract);
                          (ii) an option (other than an option 
                        executed or traded on a national 
                        securities exchange registered pursuant 
                        to section 6(a) of the Securities 
                        Exchange Act of 1934 (15 U.S.C. 
                        78f(a)); or
                          (iii) a swap.
                  (B) Knowing use.--It shall be unlawful for 
                any person who receives information imparted by 
                any employee or agent of any department or 
                agency of the Federal Government or any Member 
                of Congress or employee of Congress or any 
                judicial officer or judicial employee as 
                described in subparagraph (A) to knowingly use 
                such information to enter into, or offer to 
                enter into--
                          (i) a contract of sale of a commodity 
                        for future delivery (or option on such 
                        a contract);
                          (ii) an option (other than an option 
                        executed or traded on a national 
                        securities exchange registered pursuant 
                        to section 6(a) of the Securities 
                        Exchange Act of 1934 (15 U.S.C. 
                        78f(a)); or
                          (iii) a swap.
                  (C) Theft of nonpublic information.--It shall 
                be unlawful for any person to steal, convert, 
                or misappropriate, by any means whatsoever, 
                information held or created by any department 
                or agency of the Federal Government or by 
                Congress or by the judiciary that may affect or 
                tend to affect the price of any commodity in 
                interstate commerce, or for future delivery, or 
                any swap, where such person knows, or acts in 
                reckless disregard of the fact, that such 
                information has not been disseminated by the 
                department or agency of the Federal Government 
                holding or creating the information or by 
                Congress or by the judiciary in a manner which 
                makes it generally available to the trading 
                public, or disclosed in a criminal, civil, or 
                administrative hearing, or in a congressional, 
                administrative, or Government Accountability 
                Office report, hearing, audit, or 
                investigation, and to use such information, or 
                to impart such information with the intent to 
                assist another person, directly or indirectly, 
                to use such information to enter into, or offer 
                to enter into--
                          (i) a contract of sale of a commodity 
                        for future delivery (or option on such 
                        a contract);
                          (ii) an option (other than an option 
                        executed or traded on a national 
                        securities exchange registered pursuant 
                        to section 6(a) of the Securities 
                        Exchange Act of 1934 (15 U.S.C. 
                        78f(a)); or
                          (iii) a swap, provided, however, that 
                        nothing in this subparagraph shall 
                        preclude a person that has provided 
                        information concerning, or generated 
                        by, the person, its operations or 
                        activities, to any employee or agent of 
                        any department or agency of the Federal 
                        Government, to Congress, any Member of 
                        Congress, any employee of Congress, any 
                        judicial officer, or any judicial 
                        employee, voluntarily or as required by 
                        law, from using such information to 
                        enter into, or offer to enter into, a 
                        contract of sale, option, or swap 
                        described in clauses (i), (ii), or 
                        (iii).
          (5) Disruptive practices.--It shall be unlawful for 
        any person to engage in any trading, practice, or 
        conduct on or subject to the rules of a registered 
        entity that--
                  (A) violates bids or offers;
                  (B) demonstrates intentional or reckless 
                disregard for the orderly execution of 
                transactions during the closing period; or
                  (C) is, is of the character of, or is 
                commonly known to the trade as, ``spoofing'' 
                (bidding or offering with the intent to cancel 
                the bid or offer before execution).
          (6) Rulemaking authority.--The Commission may make 
        and promulgate such rules and regulations as, in the 
        judgment of the Commission, are reasonably necessary to 
        prohibit the trading practices described in paragraph 
        (5) and any other trading practice that is disruptive 
        of fair and equitable trading.
          (7) Use of swaps to defraud.--It shall be unlawful 
        for any person to enter into a swap knowing, or acting 
        in reckless disregard of the fact, that its 
        counterparty will use the swap as part of a device, 
        scheme, or artifice to defraud any third party.
  (b) No person shall offer to enter into, enter into or 
confirm the execution of, any transaction involving any 
commodity regulated under this Act which is of the character 
of, or is commonly known to the trade as, an ``option'', 
``privilege'', ``indemnity'', ``bid'', ``offer'', ``put'', 
``call'', ``advance guaranty'', or ``decline guaranty'', 
contrary to any rule, regulation, or order of the Commission 
prohibiting any such transaction or allowing any such 
transaction under such terms and conditions as the Commission 
shall prescribe. Any such order, rule, or regulation may be 
made only after notice and opportunity for hearing, and the 
Commission may set different terms and conditions for different 
markets.
  [(c) Not later than 90 days after the date of the enactment 
of the Futures Trading Act of 1986, the Commission shall issue 
regulations--
          [(1) to eliminate the pilot status of its program for 
        commodity option transactions involving the trading of 
        options on contract markets, including any numerical 
        restrictions on the number of commodities or option 
        contracts for which a contract market may be 
        designated; and
          [(2) otherwise to continue to permit the trading of 
        such commodity options under such terms and conditions 
        that the Commission from time to time may prescribe.
  [(d) Notwithstanding the provisions of subsection (c) of this 
section--
          [(1) any person domiciled in the United States who on 
        May 1, 1978, was in the business of granting an option 
        on a physical commodity, other than a commodity 
        specifically set forth in section 2(a) of this Act 
        prior to enactment of the Commodity Futures Trading 
        Commission Act of 1974, and was in the business of 
        buying, selling, producing, or otherwise using that 
        commodity, may continue to grant or issue options on 
        that commodity in accordance with Commission 
        regulations in effect on August 17, 1978, until thirty 
        days after the effective date of regulations issued by 
        the Commission under clause (2) of this subsection: 
        Provided, That if such person files an application for 
        registration under the regulations issued under clause 
        (2) of this subsection within thirty days after the 
        effective date of such regulations, that person may 
        continue to grant or issue options pending a final 
        determination by the Commission on the application; and
          [(2) the Commission shall issue regulations that 
        permit grantors and futures commission merchants to 
        offer to enter into, enter into, or confirm the 
        execution of, any commodity option transaction on a 
        physical commodity subject to the provisions of 
        subsection (b) of this section, other than a commodity 
        specifically set forth in section 2(a) of this Act 
        prior to enactment of the Commodity Futures Trading 
        Commission Act of 1974, if--
                  [(A) the grantor is a person domiciled in the 
                United States who--
                          [(i) is in the business of buying, 
                        selling, producing, or otherwise using 
                        the underlying commodity;
                          [(ii) at all times has a net worth of 
                        at least $5,000,000 certified annually 
                        by an independent public accountant 
                        using generally accepted accounting 
                        principles;
                          [(iii) notifies the Commission and 
                        every futures commission merchant 
                        offering the grantor's option if the 
                        grantor knows or has reason to believe 
                        that the grantor's net worth has fallen 
                        below $5,000,000;
                          [(iv) segregates daily, exclusively 
                        for the benefit of purchasers, money, 
                        exempted securities (within the meaning 
                        of section 3(a)(12) of the Securities 
                        Exchange Act of 1934 (15 U.S.C. 
                        78c(a)(12)), commercial paper, bankers' 
                        acceptances, commercial bills, or 
                        unencumbered warehouse receipts, equal 
                        to an amount by which the value of each 
                        transaction exceeds the amount received 
                        or to be received by the grantor for 
                        such transaction;
                          [(v) provides an identification 
                        number for each transaction; and
                          [(vi) provides confirmation of all 
                        orders for such transactions executed, 
                        including the execution price and a 
                        transaction identification number;
                  [(B) the futures commission merchant is a 
                person who--
                          [(i) has evidence that the grantor 
                        meets the requirements specified in 
                        subclause (A) of this clause;
                          [(ii) treats and deals with all 
                        money, securities, or property received 
                        from its customers as payment of the 
                        purchase price in connection with such 
                        transactions, as belonging to such 
                        customers until the expiration of the 
                        term of the option, or, if the customer 
                        exercises the option, until all rights 
                        of the customer under the commodity 
                        option transaction have been fulfilled;
                          [(iii) records each transaction in 
                        its customer's name by the transaction 
                        identification number provided by the 
                        grantor;
                          [(iv) provides a disclosure statement 
                        to its customers, under regulations of 
                        the Commission, that discloses, among 
                        other things, all costs, including any 
                        markups or commissions involved in such 
                        transaction; and
                  [(C) the grantor and futures commission 
                merchant comply with any additional uniform and 
                reasonable terms and conditions the Commission 
                may prescribe, including registration with the 
                Commission.
The Commission may permit persons not domiciled in the United 
States to grant options under this subsection, other than 
options on a commodity specifically set forth in section 2(a) 
of this Act prior to enactment of the Commodity Futures Trading 
Commission Act of 1974, under such additional rules, 
regulations, and orders as the Commission may adopt to provide 
protection to purchasers that are substantially the equivalent 
of those applicable to grantors domiciled in the United States. 
The Commission may terminate the right of any person to grant, 
offer, or sell options under this subsection only after a 
hearing, including a finding that the continuation of such 
right is contrary to the public interest: Provided, That 
pending the completion of such termination proceedings, the 
Commission may suspend the right to grant, offer, or sell 
options of any person whose activities in the Commission's 
judgment present a substantial risk to the public interest.
  [(e) The Commission may adopt rules and regulations, after 
public notice and opportunity for a hearing on the record, 
prohibiting the granting, issuance, or sale of options 
permitted under subsection (d) of this section if the 
Commission determines that such options are contrary to the 
public interest.]
  (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.
  [(f)] (d) Nothing in this Act shall be deemed to govern or in 
any way be applicable to any transaction in an option on 
foreign currency traded on a national securities exchange.
  [(g)] (e) The Commission shall adopt rules requiring that a 
contemporaneous written record be made, as practicable, of all 
orders for execution on the floor or subject to the rules of 
each contract market [or derivatives transaction execution 
facility] placed by a member of the contract market [or 
derivatives transaction execution facility] who is present on 
the floor at the time such order is placed.
  Sec. 4d. (a) It shall be unlawful for any person to be a 
futures commission merchant unless--
          (1) such person shall have registered, under this 
        Act, with the Commission as such futures commission 
        merchant and such registration shall not have expired 
        nor been suspended nor revoked; and
          (2) such person shall, whether a member or nonmember 
        of a contract market [or derivatives transaction 
        execution facility], treat and deal with all money, 
        securities, and property received by such person to 
        margin, guarantee, or secure the trades or contracts of 
        any customer of such person, or accruing to such 
        customer as the result of such trades or contracts, as 
        belonging to such customer. Such money, securities, and 
        property shall be separately accounted for and shall 
        not be commingled with the funds of such commission 
        merchant or be used to margin or guarantee the trades 
        or contracts, or to secure or extend the credit, of any 
        customer or person other than the one for whom the same 
        are held: Provided, however, That such money, 
        securities, and property of the customers of such 
        futures commission merchant may, for convenience, be 
        commingled and deposited in the same account or 
        accounts with any bank or trust company or with the 
        clearing house organization of such contract market [or 
        derivatives transaction execution facility], and that 
        such share thereof as in the normal course of business 
        shall be necessary to margin, guarantee, secure, 
        transfer, adjust, or settle the contracts or trades of 
        such customers, or resulting market positions, with the 
        clearing-house organization of such contract market [or 
        derivatives transaction execution facility] or with any 
        member of such contract market [or derivatives 
        transaction execution facility], may be withdrawn and 
        applied to such purposes, including the payment of 
        commissions, brokerage, interest, taxes, storage, and 
        other charges, lawfully accruing in connection with 
        such contracts and trades: Provided further, That in 
        accordance with such terms and conditions as the 
        Commission may prescribe by rule, regulation, or order, 
        such money, securities, and property of the customers 
        of such futures commission merchant may be commingled 
        and deposited as provided in this section with any 
        other money, securities, and property received by such 
        futures commission merchant and required by the 
        Commission to be separately accounted for and treated 
        and dealt with as belonging to the customers of such 
        futures commission merchant: Provided further, That 
        such money may be invested in obligations of the United 
        States, in general obligations of any State or of any 
        political subdivision thereof, and in obligations fully 
        guaranteed as to principal and interest by the United 
        States, such investments to be made in accordance with 
        such rules and regulations and subject to such 
        conditions as the Commission may prescribe.
  (b) It shall be unlawful for any person, including but not 
limited to any clearing agency of a contract market [or 
derivatives transaction execution facility] and any depository, 
that has received any money, securities, or property for 
deposit in a separate account as provided in [paragraph (2) of 
this section] subsection (a)(2), to hold, dispose of, or use 
any such money, securities, or property as belonging to the 
depositing futures commission merchant or any person other than 
the customers of such futures commission merchant.
  (c) Conflicts of Interest.--The Commission shall require that 
futures commission merchants and introducing brokers implement 
conflict-of-interest systems and procedures that--
          (1) establish structural and institutional safeguards 
        to ensure that the activities of any person within the 
        firm relating to research or analysis of the price or 
        market for any commodity are separated by appropriate 
        informational partitions within the firm from the 
        review, pressure, or oversight of persons whose 
        involvement in trading or clearing activities might 
        potentially bias the judgment or supervision of the 
        persons; and
          (2) address such other issues as the Commission 
        determines to be appropriate.
  (d) Designation of Chief Compliance Officer.--Each futures 
commission merchant shall designate an individual to serve as 
its Chief Compliance Officer and perform such duties and 
responsibilities as shall be set forth in regulations to be 
adopted by the Commission or rules to be adopted by a futures 
association registered under section 17.
  (e) Consistent with this Act, the Commission, in consultation 
with the Securities and Exchange Commission, shall issue such 
rules, regulations, or orders as are necessary to avoid 
duplicative or conflicting regulations applicable to any 
futures commission merchant registered with the Commission 
pursuant to section 4f(a) (except paragraph (2) thereof), that 
is also registered with the Securities and Exchange Commission 
pursuant to section 15(b) of the Securities Exchange Act 
(except paragraph (11) thereof), involving the application of--
          (1) section 8, section 15(c)(3), and section 17 of 
        the Securities Exchange Act of 1934 and the rules and 
        regulations thereunder related to the treatment of 
        customer funds, securities, or property, maintenance of 
        books and records, financial reporting or other 
        financial responsibility rules (as defined in section 
        3(a)(40) of the Securities Exchange Act of 1934), 
        involving security futures products; and
          (2) similar provisions of this Act and the rules and 
        regulations thereunder involving security futures 
        products.
  (f) Swaps.--
          (1) Registration requirement.--It shall be unlawful 
        for any person to accept any money, securities, or 
        property (or to extend any credit in lieu of money, 
        securities, or property) from, for, or on behalf of a 
        swaps customer to margin, guarantee, or secure a swap 
        cleared by or through a derivatives clearing 
        organization (including money, securities, or property 
        accruing to the customer as the result of such a swap), 
        unless the person shall have registered under this Act 
        with the Commission as a futures commission merchant, 
        and the registration shall not have expired nor been 
        suspended nor revoked.
          (2) Cleared swaps.--
                  (A) Segregation required.--A futures 
                commission merchant shall treat and deal with 
                all money, securities, and property of any 
                swaps customer received to margin, guarantee, 
                or secure a swap cleared by or though a 
                derivatives clearing organization (including 
                money, securities, or property accruing to the 
                swaps customer as the result of such a swap) as 
                belonging to the swaps customer.
                  (B) Commingling prohibited.--Money, 
                securities, and property of a swaps customer 
                described in subparagraph (A) shall be 
                separately accounted for and shall not be 
                commingled with the funds of the futures 
                commission merchant or be used to margin, 
                secure, or guarantee any trades or contracts of 
                any swaps customer or person other than the 
                person for whom the same are held.
          (3) Exceptions.--
                  (A) Use of funds.--
                          (i) In general.--Notwithstanding 
                        paragraph (2), money, securities, and 
                        property of swap customers of a futures 
                        commission merchant described in 
                        paragraph (2) may, for convenience, be 
                        commingled and deposited in the same 
                        account or accounts with any bank or 
                        trust company or with a derivatives 
                        clearing organization.
                          (ii) Withdrawal.--Notwithstanding 
                        paragraph (2), such share of the money, 
                        securities, and property described in 
                        clause (i) as in the normal course of 
                        business shall be necessary to margin, 
                        guarantee, secure, transfer, adjust, or 
                        settle a cleared swap with a 
                        derivatives clearing organization, or 
                        with any member of the derivatives 
                        clearing organization, may be withdrawn 
                        and applied to such purposes, including 
                        the payment of commissions, brokerage, 
                        interest, taxes, storage, and other 
                        charges, lawfully accruing in 
                        connection with the cleared swap.
                  (B) Commission action.--Notwithstanding 
                paragraph (2), in accordance with such terms 
                and conditions as the Commission may prescribe 
                by rule, regulation, or order, any money, 
                securities, or property of the swaps customers 
                of a futures commission merchant described in 
                paragraph (2) may be commingled and deposited 
                in customer accounts with any other money, 
                securities, or property received by the futures 
                commission merchant and required by the 
                Commission to be separately accounted for and 
                treated and dealt with as belonging to the 
                swaps customer of the futures commission 
                merchant.
          (4) Permitted investments.--Money described in 
        paragraph (2) may be invested in obligations of the 
        United States, in general obligations of any State or 
        of any political subdivision of a State, and in 
        obligations fully guaranteed as to principal and 
        interest by the United States, or in any other 
        investment that the Commission may by rule or 
        regulation prescribe, and such investments shall be 
        made in accordance with such rules and regulations and 
        subject to such conditions as the Commission may 
        prescribe.
          (5) Commodity contract.--A swap cleared by or through 
        a derivatives clearing organization shall be considered 
        to be a commodity contract as such term is defined in 
        section 761 of title 11, United States Code, with 
        regard to all money, securities, and property of any 
        swaps customer received by a futures commission 
        merchant or a derivatives clearing organization to 
        margin, guarantee, or secure the swap (including money, 
        securities, or property accruing to the customer as the 
        result of the swap).
          (6) Prohibition.--It shall be unlawful for any 
        person, including any derivatives clearing organization 
        and any depository institution, that has received any 
        money, securities, or property for deposit in a 
        separate account or accounts as provided in paragraph 
        (2) to hold, dispose of, or use any such money, 
        securities, or property as belonging to the depositing 
        futures commission merchant or any person other than 
        the swaps customer of the futures commission merchant.
  (g) It shall be unlawful for any person to be an introducing 
broker unless such person shall have registered under this Act 
with the Commission as an introducing broker and such 
registration shall not have expired nor been suspended nor 
revoked.
  (h) Notwithstanding subsection (a)(2) or the rules and 
regulations thereunder, and pursuant to an exemption granted by 
the Commission under section 4(c) of this Act or pursuant to a 
rule or regulation, a futures commission merchant that is 
registered pursuant to section 4f(a)(1) of this Act and also 
registered as a broker or dealer pursuant to section 15(b)(1) 
of the Securities Exchange Act of 1934 may, pursuant to a 
portfolio margining program approved by the Securities and 
Exchange Commission pursuant to section 19(b) of the Securities 
Exchange Act of 1934, hold in a portfolio margining account 
carried as a securities account subject to section 15(c)(3) of 
the Securities Exchange Act of 1934 and the rules and 
regulations thereunder, a contract for the purchase or sale of 
a commodity for future delivery or an option on such a 
contract, and any money, securities or other property received 
from a customer to margin, guarantee or secure such a contract, 
or accruing to a customer as the result of such a contract. The 
Commission shall consult with the Securities and Exchange 
Commission to adopt rules to ensure that such transactions and 
accounts are subject to comparable requirements to the extent 
practical for similar products.
  Sec. 4e. It shall be unlawful for any person to act as floor 
trader in executing purchases and sales, or as floor broker in 
executing any orders for the purchase or sale, of any commodity 
for future delivery, or involving any contracts of sale of any 
commodity for future delivery, on or subject to the rules of 
any contract market [or derivatives transaction execution 
facility] unless such person shall have registered, under this 
Act, with the Commission as such floor trader or floor broker 
and such registration shall not have expired nor been suspended 
nor revoked.
  Sec. 4f. (a)(1) Any person desiring to register as a futures 
commission merchant, introducing broker, floor broker, or floor 
trader hereunder shall be registered upon application to the 
Commission. The application shall be made in such form and 
manner as prescribed by the Commission, giving such information 
and facts as the Commission may deem necessary concerning the 
business in which the applicant is or will be engaged, 
including in the case of an application of a futures commission 
merchant or an introducing broker, the names and addresses of 
the managers of all branch offices, and the names of such 
officers and partners, if a partnership, and of such officers, 
directors, and stockholders, if a corporation, as the 
Commission may direct. Such person, when registered hereunder, 
shall likewise continue to report and furnish to the Commission 
the above-mentioned information and such other information 
pertaining to such person's business as the Commission may 
require. Each registration shall expire on December 31 of the 
year for which issued or at such other time, not less than one 
year from the date of issuance, as the Commission may by rule, 
regulation, or order prescribe, and shall be renewed upon 
application therefor unless the registration has been suspended 
(and the period of such suspension has not expired) or revoked 
pursuant to the provisions of this Act.
  (2) Notwithstanding paragraph (1), and except as provided in 
paragraph (3), any broker or dealer that is registered with the 
Securities and Exchange Commission shall be registered as a 
futures commission merchant or introducing broker, as 
applicable, if--
          (A) the broker or dealer limits its solicitation of 
        orders, acceptance of orders, or execution of orders, 
        or placing of orders on behalf of others involving any 
        contracts of sale of any commodity for future delivery, 
        on or subject to the rules of any contract market [or 
        registered derivatives transaction execution facility] 
        to security futures products;
          (B) the broker or dealer files written notice with 
        the Commission in such form as the Commission, by rule, 
        may prescribe containing such information as the 
        Commission, by rule, may prescribe as necessary or 
        appropriate in the public interest or for the 
        protection of investors;
          (C) the registration of the broker or dealer is not 
        suspended pursuant to an order of the Securities and 
        Exchange Commission; and
          (D) the broker or dealer is a member of a national 
        securities association registered pursuant to section 
        15A(a) of the Securities Exchange Act of 1934.
The registration shall be effective contemporaneously with the 
submission of notice, in written or electronic form, to the 
Commission.
  (3) A floor broker or floor trader shall be exempt from the 
registration requirements of section 4e and paragraph (1) of 
this subsection if--
          (A) the floor broker or floor trader is a broker or 
        dealer registered with the Securities and Exchange 
        Commission;
          (B) the floor broker or floor trader limits its 
        solicitation of orders, acceptance of orders, or 
        execution of orders, or placing of orders on behalf of 
        others involving any contracts of sale of any commodity 
        for future delivery, on or subject to the rules of any 
        contract market to security futures products; and
          (C) the registration of the floor broker or floor 
        trader is not suspended pursuant to an order of the 
        Securities and Exchange Commission.
  (4)(A) A broker or dealer that is registered as a futures 
commission merchant or introducing broker pursuant to paragraph 
(2), or that is a floor broker or floor trader exempt from 
registration pursuant to paragraph (3), shall be exempt from 
the following provisions of this Act and the rules thereunder:
          (i) Subsections (b)[, (d), (e), and (g)] and (e) of 
        section 4c.
          (ii) Sections 4d, 4e, and 4h.
          (iii) Subsections (b) and (c) of this section.
          (iv) Section 4j.
          (v) Section 4k(1).
          (vi) Section 4p.
          (vii) Section 6d.
          (viii) Subsections (d) and (g) of section 8.
          (ix) Section 16.
  (B)(i) Except as provided in clause (ii) of this 
subparagraph, but notwithstanding any other provision of this 
Act, the Commission, by rule, regulation, or order, may 
conditionally or unconditionally exempt any broker or dealer 
subject to the registration requirement of paragraph (2), or 
any broker or dealer exempt from registration pursuant to 
paragraph (3), from any provision of this Act or of any rule or 
regulation thereunder, to the extent the exemption is necessary 
or appropriate in the public interest and is consistent with 
the protection of investors.
  (ii) The Commission shall, by rule or regulation, determine 
the procedures under which an exemptive order under this 
section shall be granted and may, in its sole discretion, 
decline to entertain any application for an order of exemption 
under this section.
  (C)(i) A broker or dealer that is registered as a futures 
commission merchant or introducing broker pursuant to paragraph 
(2) or an associated person thereof, or that is a floor broker 
or floor trader exempt from registration pursuant to paragraph 
(3), shall not be required to become a member of any futures 
association registered under section 17.
  (ii) No futures association registered under section 17 shall 
limit its members from carrying an account, accepting an order, 
or transacting business with a broker or dealer that is 
registered as a futures commission merchant or introducing 
broker pursuant to paragraph (2) or an associated person 
thereof, or that is a floor broker or floor trader exempt from 
registration pursuant to paragraph (3).
  (b) Notwithstanding any other provisions of this Act, no 
person desiring to register as futures commission merchant or 
as introducing broker shall be so registered unless he meets 
such minimum financial requirements as the Commission may by 
regulation prescribe as necessary to insure his meeting his 
obligations as a registrant, and each person so registered 
shall at all times continue to meet such prescribed minimum 
financial requirements: Provided, That such minimum financial 
requirements will be considered met if the applicant for 
registration or registrant is a member of a contract market [or 
derivatives transaction execution facility] and conforms to 
minimum financial standards and related reporting requirements 
set by such contract market [or derivatives transaction 
execution facility] in its bylaws, rules, regulations, or 
resolutions and approved by the Commission as adequate to 
effectuate the purposes of this subsection.
  (c)(1) As used in this subsection:
                  
          (i) The term ``affiliated person'' means any person 
        directly or indirectly controlling, controlled by, or 
        under common control with a futures commission 
        merchant, as the Commission, by rule or regulation, may 
        determine will effectuate the purposes of this 
        subsection.
          (ii) The term ``Federal banking agency'' shall have 
        the same meaning as the term ``appropriate Federal 
        banking agency'' in section 3(q) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1813(q)).
  (2)(A) Each registered futures commission merchant shall 
obtain such information and make and keep such records as the 
Commission, by rule or regulation, prescribes concerning the 
registered futures commission merchant's policies, procedures, 
or systems for monitoring and controlling financial and 
operational risks to it resulting from the activities of any of 
its affiliated persons, other than a natural person.
  (B) The records required under subparagraph (A) shall 
describe, in the aggregate, each of the futures and other 
financial activities conducted by, and the customary sources of 
capital and funding of, those of its affiliated persons whose 
business activities are reasonably likely to have a material 
impact on the financial or operational condition of the futures 
commission merchant, including its adjusted net capital, its 
liquidity, or its ability to conduct or finance its operations.
  (C) The Commission, by rule or regulation, may require 
summary reports of such information to be filed by the futures 
commission merchant with the Commission no more frequently than 
quarterly.
  (3)(A) [,]If, as a result of adverse market conditions or 
based on reports provided to the Commission pursuant to 
paragraph (2) or other available information, the Commission 
reasonably concludes that the Commission has concerns regarding 
the financial or operational condition of any registered 
futures commission merchant, the Commission may require the 
futures commission merchant to make reports concerning the 
futures and other financial activities of any of such person's 
affiliated persons, other than a natural person, whose business 
activities are reasonably likely to have a material impact on 
the financial or operational condition of the futures 
commission merchant.
  (B) The Commission, in requiring reports pursuant to this 
paragraph, shall specify the information required, the period 
for which it is required, the time and date on which the 
information must be furnished, and whether the information is 
to be furnished directly to the Commission or to a contract 
market or derivatives transaction execution facility or other 
self-regulatory organization with primary responsibility for 
examining the registered futures commission merchant's 
financial and operational condition.
  (4)(A) [in developing] In developing and implementing 
reporting requirements pursuant to paragraph (2) with respect 
to affiliated persons subject to examination by or reporting 
requirements of a Federal banking agency, the Commission shall 
consult with and consider the views of each such Federal 
banking agency. If a Federal banking agency comments in writing 
on a proposed rule of the Commission under this subsection that 
has been published for comment, the Commission shall respond in 
writing to the written comment before adopting the proposed 
rule. The Commission shall, at the request of the Federal 
banking agency, publish the comment and response in the Federal 
Register at the time of publishing the adopted rule.
  (B)(i) Except as provided in clause (ii), a registered 
futures commission merchant shall be considered to have 
complied with a recordkeeping or reporting requirement adopted 
pursuant to paragraph (2) concerning an affiliated person that 
is subject to examination by, or reporting requirements of, a 
Federal banking agency if the futures commission merchant 
utilizes for the recordkeeping or reporting requirement copies 
of reports filed by the affiliated person with the Federal 
banking agency pursuant to section 5211 of the Revised Statutes 
(12 U.S.C. 161), section 9 of the Federal Reserve Act (12 
U.S.C. 321 et seq.), section 7(a) of the Federal Deposit 
Insurance Act (12 U.S.C. [1817(a)] 1817(a)), section 10(b) of 
the Home Owners' Loan Act (12 U.S.C. 1467a(b)), or section 5 of 
the Bank Holding Company Act of 1956 (12 U.S.C. 1844).
  (ii) The Commission may, by rule adopted pursuant to 
paragraph (2), require any futures commission merchant filing 
the reports with the Commission to obtain, maintain, or report 
supplemental information if the Commission makes an explicit 
finding that the supplemental information is necessary to 
inform the Commission regarding potential risks to the futures 
commission merchant. Prior to requiring any such supplemental 
information, the Commission shall first request the Federal 
banking agency to expand its reporting requirements to include 
the information.
  (5) Prior to making a request pursuant to paragraph (3) for 
information with respect to an affiliated person that is 
subject to examination by or reporting requirements of a 
Federal banking agency, the Commission shall--
          (A) notify the agency of the information required 
        with respect to the affiliated person; and
          (B) consult with the agency to determine whether the 
        information required is available from the agency and 
        for other purposes, unless the Commission determines 
        that any delay resulting from the consultation would be 
        inconsistent with ensuring the financial and 
        operational condition of the futures commission 
        merchant or the stability or integrity of the futures 
        markets.
  (6) Nothing in this subsection shall be construed to permit 
the Commission to require any futures commission merchant to 
obtain, maintain, or furnish any examination report of any 
Federal banking agency or any supervisory recommendations or 
analysis contained in the report.
  (7) No information provided to or obtained by the Commission 
from any Federal banking agency pursuant to a request under 
paragraph (5) regarding any affiliated person that is subject 
to examination by or reporting requirements of a Federal 
banking agency may be disclosed to any other person (other than 
as provided in section 8 or section 8a(6)), without the prior 
written approval of the Federal banking agency.
  (8) The Commission shall notify a Federal banking agency of 
any concerns of the Commission regarding significant financial 
or operational risks resulting from the activities of any 
futures commission merchant to any affiliated person thereof 
that is subject to examination by or reporting requirements of 
the Federal banking agency.
  (9) The Commission, by rule, regulation, or order, may exempt 
any person or class of persons under such terms and conditions 
and for such periods as the Commission shall provide in the 
rule, regulation, or order, from this subsection and the rules 
and regulations issued under this subsection. In granting the 
exemption, the Commission shall consider, among other factors--
          (A) whether information of the type required under 
        this subsection is available from a supervisory agency 
        (as defined in section 1101(7) of the Right to 
        Financial Privacy Act of 1978 (12 U.S.C. 3401(7))), a 
        State insurance commission or similar State agency, the 
        Securities and Exchange Commission, or a similar 
        foreign regulator;
          (B) the primary business of any affiliated person;
          (C) the nature and extent of domestic or foreign 
        regulation of the affiliated person's activities;
          (D) the nature and extent of the registered futures 
        commission merchant's commodity futures and options 
        activities; and
          (E) with respect to the registered futures commission 
        merchant and its affiliated persons, on a consolidated 
        basis, the amount and proportion of assets devoted to, 
        and revenues derived from activities in the United 
        States futures markets.
  (10) Information required to be provided pursuant to this 
subsection shall be subject to section 8. Except as 
specifically provided in section 8 and notwithstanding any 
other provision of law, the Commission shall not be compelled 
to disclose any information required to be reported under this 
subsection, or any information supplied to the Commission by 
any domestic or foreign regulatory agency that relates to the 
financial or operational condition of any affiliated person of 
a registered futures commission merchant.
  (11) Nothing in paragraphs (1) through (10) shall be 
construed to supersede or to limit in any way the authority or 
powers of the Commission pursuant to any other provision of 
this Act or regulations issued under this Act.
  Sec. 4g. (a) Every person registered hereunder as futures 
commission merchant, introducing broker, floor broker, or floor 
trader shall make such reports as are required by the 
Commission regarding the transactions and positions of such 
person, and the transactions and positions of the customer 
thereof, in commodities for future delivery on any board of 
trade in the United States or elsewhere, and in [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; shall keep books 
and records pertaining to such transactions and positions in 
such form and manner and for such period as may be required by 
the Commission; and shall keep such books and records open to 
inspection by any representative of the Commission or the 
United States Department of Justice.
  (b) Every registered entity shall maintain daily trading 
records. The daily trading records shall include such 
information as the Commission shall prescribe by rule.
  (c) Floor brokers, introducing brokers, and futures 
commission merchants shall maintain daily trading records for 
each customer in such manner and form as to be identifiable 
with the trades referred to in subsection (b).
  (d) Daily trading records shall be maintained in a form 
suitable to the Commission for such period as may be required 
by the Commission. Reports shall be made from the records 
maintained at such times and at such places and in such form as 
the Commission may prescribe by rule, order, or regulation in 
order to protect the public interest and the interest of 
persons trading in commodity futures.
  (e) Before the beginning of trading each day, [the exchange] 
each designated contract market and swap execution facility 
shall, insofar as is practicable and under terms and conditions 
specified by the Commission, make public the volume of trading 
on each type of contract for the previous day and such other 
information as the Commission deems necessary in the public 
interest and prescribes by rule, order, or regulation.
  (f) Nothing contained in this section shall be construed to 
prohibit the Commission from making separate determinations for 
different registered entities when such determinations are 
warranted in the judgment of the Commission.

           *       *       *       *       *       *       *

  Sec. 4i. It shall be unlawful for any person to make any 
contract for the purchase or sale of any commodity for future 
delivery on or subject to the rules of any contract market [or 
derivatives transaction execution facility, 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--
          (1) if such person shall directly or indirectly make 
        such contracts with respect to any commodity or any 
        future of such commodity during any one day in an 
        amount equal to or in excess of such amount as shall be 
        fixed from time to time by the Commission, and
          (2) if such person shall directly or indirectly have 
        or obtain a long or short position in any commodity or 
        any future of such commodity equal to or in excess of 
        such amount as shall be fixed from time to time by the 
        Commission,
unless such person files or causes to be filed with the 
properly designated officer of the Commission such reports 
regarding any transactions or positions described in clauses 
(1) and (2) hereof as the Commission may by rule or regulation 
require and unless, in accordance with rules and regulations of 
the Commission, such person shall keep books and records of all 
such transactions and positions and transactions and positions 
in any such commodity traded on or subject to the rules of any 
other board of trade [or electronic trading facility], and of 
cash or spot transactions in, and inventories and purchase and 
sale commitments of such commodity. Such books and records 
shall show complete details concerning all such transactions, 
positions, inventories, and commitments, including the names 
and addresses of all persons having any interest therein, 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 such person.

SEC. 4J. RESTRICTIONS ON DUAL TRADING IN SECURITY FUTURES PRODUCTS ON 
                    DESIGNATED CONTRACT MARKETS [AND REGISTERED 
                    DERIVATIVES TRANSACTION EXECUTION FACILITIES].

  (a) The Commission shall issue regulations to prohibit the 
privilege of dual trading in security futures products on each 
contract market [and registered derivatives transaction 
execution facility]. The regulations issued by the Commission 
under this section--
          (1) shall provide that the prohibition of dual 
        trading thereunder shall take effect upon issuance of 
        the regulations; and
          (2) shall provide exceptions, as the Commission 
        determines appropriate, to ensure fairness and orderly 
        trading in security futures product markets, 
        including--
                  (A) exceptions for spread transactions and 
                the correction of trading errors;
                  (B) allowance for a customer to designate in 
                writing not less than once annually a named 
                floor broker to execute orders for such 
                customer, notwithstanding the regulations to 
                prohibit the privilege of dual trading required 
                under this section; and
                  (C) other measures reasonably designed to 
                accommodate unique or special characteristics 
                of individual boards of trade or contract 
                markets, to address emergency or unusual market 
                conditions, or otherwise to further the public 
                interest consistent with the promotion of 
                market efficiency, innovation, and expansion of 
                investment opportunities, the protection of 
                investors, and with the purposes of this 
                section.
  (b) As used in this section, the term ``dual trading'' means 
the execution of customer orders by a floor broker during the 
same trading session in which the floor broker executes any 
trade in the same contract market [or registered derivatives 
transaction execution facility] for--
          (1) the account of such floor broker;
          (2) an account for which such floor broker has 
        trading discretion; or
          (3) an account controlled by a person with whom such 
        floor broker has a relationship through membership in a 
        broker association.
  (c) As used in this section, the term ``broker association'' 
shall include two or more contract market members [or 
registered derivatives transaction execution facility members] 
with floor trading privileges of whom at least one is acting as 
a floor broker, who--
          (1) engage in floor brokerage activity on behalf of 
        the same employer,
          (2) have an employer and employee relationship which 
        relates to floor brokerage activity,
          (3) share profits and losses associated with their 
        brokerage or trading activity, or
          (4) regularly share a deck of orders.
  Sec. 4k. (1) It shall be unlawful for any person to be 
associated with a futures commission merchant as a partner, 
officer, or employee, or to be associated with an introducing 
broker as a partner, officer, employee, or agent (or any person 
occupying a similar status or performing similar functions), in 
any capacity that involves (i) the solicitation or acceptance 
of customers' orders (other than in a clerical capacity) or 
(ii) the supervision of any person or persons so engaged, 
unless such person is registered with the Commission under this 
Act as an associated person of such futures commission merchant 
or of such introducing broker and such registration shall not 
have expired, been suspended (and the period of suspension has 
not expired), or been revoked. It shall be unlawful for a 
futures commission merchant or introducing broker to permit 
such a person to become or remain associated with the futures 
commission merchant or introducing broker in any such capacity 
if such futures commission merchant or introducing broker knew 
or should have known that such person was not so registered or 
that such registration had expired, been suspended (and the 
period of suspension has not expired), or been revoked. Any 
individual who is registered as a floor broker, futures 
commission merchant, or introducing broker (and such 
registration is not suspended or revoked) need not also 
register under this subsection.
  (2) It shall be unlawful for any person to be associated with 
a commodity pool operator as a partner, officer, employee, 
consultant, or agent (or any person occupying a similar status 
or performing similar functions), in any capacity that involves 
(i) the solicitation of funds, securities, or property for a 
participation in a commodity pool or (ii) the supervision of 
any person or persons so engaged, unless such person is 
registered with the Commission under this Act as an associated 
person of such commodity pool operator and such registration 
shall not have expired, been suspended (and the period of 
suspension has not expired), or been revoked. It shall be 
unlawful for a commodity pool operator to permit such a person 
to become or remain associated with the commodity pool operator 
in any such capacity if the commodity pool operator knew or 
should have known that such person was not so registered or 
that such registration had expired, been suspended (and the 
period of suspension has not expired), or been revoked. Any 
individual who is registered as a floor broker, futures 
commission merchant, introducing broker, commodity pool 
operator, or as an associated person of another category of 
registrant under this section (and such registration is not 
suspended or revoked) need not also register under this 
subsection. The Commission may exempt any person or class of 
persons from having to register under this subsection by rule, 
regulation, or order.
  (3) It shall be unlawful for any person to be associated with 
a commodity trading advisor as a partner, officer, employee, 
consultant, or agent (or any person occupying a similar status 
or performing similar functions), in any capacity which 
involves (i) the solicitation of a client's or prospective 
client's discretionary account or (ii) the supervision of any 
person or persons so engaged, unless such person is registered 
with the Commission under this Act as an associated person of 
such commodity trading advisor and such registration shall not 
have expired, been suspended (and the period of suspension has 
not expired), or been revoked. It shall be unlawful for a 
commodity trading advisor to permit such a person to become or 
remain associated with the commodity trading advisor in any 
such capacity if the commodity trading advisor knew or should 
have known that such person was not so registered or that such 
registration had expired, been suspended (and the period of 
suspension has not expired), or been revoked. Any individual 
who is registered as a floor broker, futures commission 
merchant, introducing broker, commodity trading advisor, or as 
an associated person of another category of registrant under 
this section (and such registration is not suspended or 
revoked) need not also register under this subsection. The 
Commission may exempt any person or class of persons from 
having to register under this subsection by rule, regulation, 
or order.
  (4) Any person desiring to be registered as an associated 
person of a futures commission merchant, of an introducing 
broker, of a commodity pool operator, or of a commodity trading 
advisor shall make application to the Commission in the form 
and manner prescribed by the Commission, giving such 
information and facts as the Commission may deem necessary 
concerning the applicant. Such person, when registered 
hereunder, shall likewise continue to report and furnish to the 
Commission such information as the Commission may require. Such 
registration shall expire at such time as the Commission may by 
rule, regulation, or order prescribe.
  (5) Any associated person of a broker or dealer that is 
registered with the Securities and Exchange Commission, and who 
limits its solicitation of orders, acceptance of orders, or 
execution of orders, or placing of orders on behalf of others 
involving any contracts of sale of any commodity for future 
delivery or any option on such a contract, on or subject to the 
rules of any contract market [or registered derivatives 
transaction execution facility] to security futures products, 
shall be exempt from the following provisions of this Act and 
the rules thereunder:
          (A) Subsections (b)[, (d), (e), and (g)] and (e) of 
        section 4c.
          (B) Sections 4d, 4e, and 4h.
          (C) Subsections (b) and (c) of section 4f.
          (D) Section 4j.
          (E) Paragraph (1) of this section.
          (F) Section 4p.
          (G) Section 6d.
          (H) Subsections (d) and (g) of section 8.
          (I) Section 16.
  (6) It shall be unlawful for any registrant to permit a 
person to become or remain an associated person of such 
registrant, if the registrant knew or should have known of 
facts regarding such associated person that are set forth as 
statutory disqualifications in section 8a(2) of this Act, 
unless such registrant has notified the Commission of such 
facts and the Commission has determined that such person should 
be registered or temporarily licensed.
  Sec. 4l. It is hereby found that the activities of commodity 
trading advisors and commodity pool operators are affected with 
a national public interest in that, among other things--
          (1) their advice, counsel, publications, writings, 
        analyses, and reports are furnished and distributed, 
        and their contracts, solicitations, subscriptions, 
        agreements, and other arrangements with clients take 
        place and are negotiated and performed by the use of 
        the mails and other means and instrumentalities of 
        interstate commerce;
          (2) their advice, counsel, publications, writings, 
        analyses, and reports customarily relate to and their 
        operations are directed toward and cause the purchase 
        and sale of commodities for future delivery on or 
        subject to the rules of contract markets [or 
        derivatives transaction execution facilities]; and
          (3) the foregoing transactions occur in such volume 
        as to affect substantially transactions on contract 
        markets [or derivatives transaction execution 
        facilities].
  [Sec. 4m. (1) It shall be unlawful for any commodity trading 
advisor or commodity pool operator, unless registered under 
this Act, to make use of the mails or any means or 
instrumentality of interstate commerce in connection with his 
business as such commodity trading advisor or commodity pool 
operator: Provided, That the provisions of this section shall 
not apply to any commodity trading advisor who, during the 
course of the preceding twelve months, has not furnished 
commodity trading advice to more than fifteen persons and who 
does not hold himself out generally to the public as a 
commodity trading advisor. The provisions of this section shall 
not apply to any commodity trading advisor who is a (1) dealer, 
processor, broker, or seller in cash market transactions of any 
commodity specifically set forth in section 2(a) of this Act 
prior to the enactment of the Commodity Futures Trading 
Commission Act of 1974 (or products thereof) or (2) nonprofit, 
voluntary membership, general farm organization, who provides 
advice on the sale or purchase of any commodity specifically 
set forth in section 2(a) of this Act prior to the enactment of 
the Commodity Futures Trading Commission Act of 1974; if the 
advice by the person described in clause (1) or (2) of this 
sentence as a commodity trading advisor is solely incidental to 
the conduct of that person's business: Provided, That such 
person shall be subject to proceedings under section 14 of this 
Act.
  [(2) Nothing in this Act shall relieve any person of any 
obligation or duty, or affect the availability of any right or 
remedy available to the Securities and Exchange Commission or 
any private party arising under the Securities Act of 1933 or 
the Securities Exchange Act of 1934 governing the issuance, 
offer, purchase, or sale of securities of a commodity pool, or 
of persons engaged in transactions with respect to such 
securities, or reporting by a commodity pool.
  [(3) Exception.--
          [(A) In general.--Paragraph (1) shall not apply to 
        any commodity trading advisor that is registered with 
        the Securities and Exchange Commission as an investment 
        adviser whose business does not consist primarily of 
        acting as a commodity trading advisor, as defined in 
        section 1a, and that does not act as a commodity 
        trading advisor to any commodity pool that is engaged 
        primarily in trading commodity interests.
          [(B) Engaged primarily.--For purposes of subparagraph 
        (A), a commodity trading advisor or a commodity pool 
        shall be considered to be ``engaged primarily'' in the 
        business of being a commodity trading advisor or 
        commodity pool if it is or holds itself out to the 
        public as being engaged primarily, or proposes to 
        engage primarily, in the business of advising on 
        commodity interests or investing, reinvesting, owning, 
        holding, or trading in commodity interests, 
        respectively.
          [(C) Commodity interests.--For purposes of this 
        paragraph, commodity interests shall include contracts 
        of sale of a commodity for future delivery, options on 
        such contracts, security futures, swaps, leverage 
        contracts, foreign exchange, spot and forward contracts 
        on physical commodities, and any monies held in an 
        account used for trading commodity interests.]

SEC. 4M. USE OF MAILS OR OTHER MEANS OR INSTRUMENTALITIES OF INTERSTATE 
                    COMMERCE BY COMMODITY TRADING ADVISORS AND 
                    COMMODITY POOL OPERATORS.

  (a) Prohibition.--It shall be unlawful for any commodity 
trading advisor or commodity pool operator, unless registered 
under this Act, to make use of the mails or any means or 
instrumentality of interstate commerce in connection with 
business as the commodity trading advisor or commodity pool 
operator.
  (b) Exceptions.--
          (1) In general.--Subsection (a) shall not apply to a 
        commodity trading advisor whose commodity trading 
        advice is solely incidental to the conduct of that 
        person's business, and who is a--
                  (A) dealer, processor, broker, or seller in 
                cash market transactions of any commodity 
                specifically set forth in section 2(a) of this 
                Act before the enactment of the Commodity 
                Futures Trading Commission Act of 1974 (or 
                products thereof); or
                  (B) nonprofit, voluntary membership, general 
                farm organization, that provides advice on the 
                sale or purchase of any commodity specifically 
                set forth in section 2(a) of this Act before 
                the enactment of the Commodity Futures Trading 
                Commission Act of 1974.
          (2) Charitable organization.--Subsection (a) shall 
        not apply to any commodity trading advisor or commodity 
        pool operator that is--
                  (A) a charitable organization, as defined in 
                section 3(c)(10)(D) of the Investment Company 
                Act of 1940 (15 U.S.C. 80a-3(c)(10)(D)), 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 advisory or pool activities are conducted 
                only on behalf of, or with respect to, 1 or 
                more of--
                          (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 
                        (15 U.S.C. 80a-3(c)(10)), or the 
                        trustees, administrators, settlors (or 
                        potential settlors), or beneficiaries 
                        of the foregoing; or
                  (B) any plan, company, or account described 
                in section 3(c)(14) of the Investment Company 
                Act of 1940 (15 U.S.C. 80a-3(c)(14)), 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 advisory or pool activities 
                are conducted only on behalf of, 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 (15 U.S.C. 80a-3(c)(14)).
          (3) Small commodity trading advisors.--Subsection (a) 
        shall not apply to any commodity trading advisor who, 
        during the course of the preceding 12 months, has not 
        furnished commodity trading advice to more than 15 
        persons and who does not hold themselves out generally 
        to the public as a commodity trading advisor.
          (4) Sec-registered.--
                  (A) In general.--Subsection (a) shall not 
                apply to any commodity trading advisor that is 
                registered with the Securities and Exchange 
                Commission as an investment adviser whose 
                business does not consist primarily of acting 
                as a commodity trading advisor and that does 
                not act as a commodity trading advisor to any 
                commodity pool that is primarily engaged in 
                trading commodity interests.
                  (B) Engaged primarily.--For purposes of this 
                paragraph, a commodity trading advisor or a 
                commodity pool shall be considered to be 
                ``engaged primarily'' in the business of being 
                a commodity trading advisor or commodity pool 
                if it is or holds itself out to the public as 
                being engaged primarily, or proposes to engage 
                primarily, in the business of advising on 
                commodity interests or investing, reinvesting, 
                owning, holding, or trading in commodity 
                interests, respectively.
                  (C) Commodity interests.--For purposes of 
                this paragraph, commodity interests shall 
                include contracts of sale of a commodity for 
                future delivery, options on such contracts, 
                security futures, swaps, leverage contracts, 
                foreign exchange, spot and forward contracts on 
                physical commodities, and any monies held in an 
                account used for trading commodity interests.
          (5) Subject to proceedings.--A person described in 
        paragraphs (1) and (2) shall be subject to proceedings 
        under section 14.
  (c) Relationship to Other Law.--Nothing in this Act shall 
relieve any person of any obligation or duty, or affect the 
availability of any right or remedy available to the Securities 
and Exchange Commission or any private party arising under the 
Securities Act of 1933 (15 U.S.C. 77a et seq.) or the 
Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) 
governing the issuance, offer, purchase, or sale of securities 
of a commodity pool, or of persons engaged in transactions with 
respect to the securities, or reporting by a commodity pool.
  (d) Disclosure Concerning Exempted Charitable 
Organizations.--A commodity trading advisor or commodity pool 
operator that is an organization or person described in 
subsection (b)(2)(A) of this section to or of any investment 
trust, syndicate, or similar form of enterprise excluded from 
the definition of ``investment company'' pursuant to section 
3(c)(10)(B) of the Investment Company Act of 1940 (15 U.S.C. 
80a-3(c)(10)(B)) shall provide disclosure in accordance with 
section 7(e) of that Act (15 U.S.C. 80a-7(e)).

           *       *       *       *       *       *       *

  Sec. 4p. (a) The Commission may specify by rules and 
regulations appropriate standards with respect to training, 
experience, and such other qualifications as the Commission 
finds necessary or desirable to insure the fitness of persons 
required to be registered with the Commission. In connection 
therewith, the Commission may prescribe by rules and 
regulations the adoption of written proficiency examinations to 
be given to applicants for registration and the establishment 
of reasonable fees to be charged to such applicants to cover 
the administration of such examinations. The Commission may 
further prescribe by rules and regulations that, in lieu of 
examinations administered by the Commission, futures 
associations registered under section 17 of this Act, contract 
markets[, or derivatives transaction execution facilities] may 
adopt written proficiency examinations to be given to 
applicants for registration and charge reasonable fees to such 
applicants to cover the administration of such examinations. 
Notwithstanding any other provision of this section, the 
Commission may specify by rules and regulations such terms and 
conditions as it deems appropriate to protect the public 
interest wherein exception to any written proficiency 
examination shall be made with respect to individuals who have 
demonstrated, through training and experience, the degree of 
proficiency and skill necessary to protect the interests of 
customers, clients, pool participants, or other members of the 
public with whom such individuals deal.
  (b) The Commission shall issue regulations to require new 
registrants, within six months after receiving such 
registration, to attend a training session, and all other 
registrants to attend periodic training sessions, to ensure 
that registrants understand their responsibilities to the 
public under this Act, including responsibilities to observe 
just and equitable principles of trade, any rule or regulation 
of the Commission, any rule of any appropriate contract market, 
[derivatives transaction execution facility,] registered 
futures association, or other self-regulatory organization, or 
any other applicable Federal or state law, rule or regulation.

           *       *       *       *       *       *       *


SEC. 5. DESIGNATION OF BOARDS OF TRADE AS CONTRACT MARKETS.

  (a) Applications.--A board of trade applying to the 
Commission for designation as a contract market shall submit an 
application to the Commission that includes any relevant 
materials and records the Commission may require consistent 
with this Act.
  [(c)] (b) Existing Contract Markets.--A board of trade that 
is designated as a contract market on the date of the enactment 
of the Commodity Futures Modernization Act of 2000 shall be 
considered to be a designated contract market under this 
section.
  [(d)] (c) Core Principles for Contract Markets.--
          (1) Designation as contract market.--
                  (A) In general.--To be designated, and 
                maintain a designation, as a contract market, a 
                board of trade shall comply with--
                          (i) any core principle described in 
                        this subsection; and
                          (ii) any requirement that the 
                        Commission may impose by rule or 
                        regulation pursuant to section 8a(5).
                  (B) Reasonable discretion of contract 
                market.--Unless otherwise determined by the 
                Commission by rule or regulation, a board of 
                trade described in subparagraph (A) shall have 
                reasonable discretion in establishing the 
                manner in which the board of trade complies 
                with the core principles described in this 
                subsection.
          (2) Compliance with rules.--
                  (A) In general.--The board of trade shall 
                establish, monitor, and enforce compliance with 
                the rules of the contract market, including--
                          (i) access requirements;
                          (ii) the terms and conditions of any 
                        contracts to be traded on the contract 
                        market; and
                          (iii) rules prohibiting abusive trade 
                        practices on the contract market.
                  (B) Capacity of contract market.--The board 
                of trade shall have the capacity to detect, 
                investigate, and apply appropriate sanctions to 
                any person that violates any rule of the 
                contract market.
                  (C) Requirement of rules.--The rules of the 
                contract market shall provide the board of 
                trade with the ability and authority to obtain 
                any necessary information to perform any 
                function described in this subsection, 
                including the capacity to carry out such 
                international information-sharing agreements as 
                the Commission may require.
          (3) Contracts not readily subject to manipulation.--
        The board of trade shall list on the contract market 
        only contracts that are not readily susceptible to 
        manipulation.
          [(4) Prevention of Market Disruption.--The]
          (4) Prevention of market disruption.--
                  (A) In general.--The board of trade shall 
                have the capacity and responsibility to prevent 
                manipulation, price distortion, and disruptions 
                of the delivery or cash-settlement process 
                through market surveillance, compliance, and 
                enforcement practices and procedures, 
                including--
                          [(A)] (i) methods for conducting 
                        real-time monitoring of trading; and
                          [(B)] (ii) comprehensive and accurate 
                        trade reconstructions.
                  (B) Digital commodity.--With regard to a 
                contract on the contract market that references 
                a digital commodity available on a cash market, 
                the Commission shall adopt rules detailing the 
                content and availability of trade and trader 
                data and other information the board of trade 
                must be able to access from the referenced cash 
                markets and data sources in order to comply 
                with this paragraph.
          (5) Position limitations or accountability.--
                  (A) In general.--To reduce the potential 
                threat of market manipulation or congestion 
                (especially during trading in the delivery 
                month), the board of trade shall adopt for each 
                contract of the board of trade, as is necessary 
                and appropriate, position limitations or 
                position accountability for speculators.
                  (B) Maximum allowable position limitation.--
                For any contract that is subject to a position 
                limitation established by the Commission 
                pursuant to section 4a(a), the board of trade 
                shall set the position limitation of the board 
                of trade at a level not higher than the 
                position limitation established by the 
                Commission.
          (6) Emergency authority.--The board of trade, in 
        consultation or cooperation with the Commission, shall 
        adopt rules to provide for the exercise of emergency 
        authority, as is necessary and appropriate, including 
        the authority--
                  (A) to liquidate or transfer open positions 
                in any contract;
                  (B) to suspend or curtail trading in any 
                contract; and
                  (C) to require market participants in any 
                contract to meet special margin requirements.
          (7) Availability of general information.--The board 
        of trade shall make available to market authorities, 
        market participants, and the public accurate 
        information concerning--
                  (A) the terms and conditions of the contracts 
                of the contract market; and
                  (B)(i) the rules, regulations, and mechanisms 
                for executing transactions on or through the 
                facilities of the contract market; and
                  (ii) the rules and specifications describing 
                the operation of the contract market's--
                          (I) electronic matching platform; or
                          (II) trade execution facility.
          (8) Daily publication of trading information.--The 
        board of trade shall make public daily information on 
        settlement prices, volume, open interest, and opening 
        and closing ranges for actively traded contracts on the 
        contract market.
          (9) Execution of transactions.--
                  (A) In general.--The board of trade shall 
                provide a competitive, open, and efficient 
                market and mechanism for executing transactions 
                that protects the price discovery process of 
                trading in the centralized market of the board 
                of trade.
                  (B) Rules.--The rules of the board of trade 
                may authorize, for bona fide business 
                purposes--
                          (i) transfer trades or office trades;
                          (ii) an exchange of--
                                  (I) futures in connection 
                                with a cash commodity 
                                transaction;
                                  (II) futures for cash 
                                commodities; or
                                  (III) futures for swaps; or
                          (iii) a futures commission merchant, 
                        acting as principal or agent, to enter 
                        into or confirm the execution of a 
                        contract for the purchase or sale of a 
                        commodity for future delivery if the 
                        contract is reported, recorded, or 
                        cleared in accordance with the rules of 
                        the contract market or a derivatives 
                        clearing organization.
          (10) Trade information.--The board of trade shall 
        maintain rules and procedures to provide for the 
        recording and safe storage of all identifying trade 
        information in a manner that enables the contract 
        market to use the information--
                  (A) to assist in the prevention of customer 
                and market abuses; and
                  (B) to provide evidence of any violations of 
                the rules of the contract market.
          (11) Financial integrity of transactions.--The board 
        of trade shall establish and enforce--
                  (A) rules and procedures for ensuring the 
                financial integrity of transactions entered 
                into on or through the facilities of the 
                contract market (including the clearance and 
                settlement of the transactions with a 
                derivatives clearing organization); and
                  (B) rules to ensure--
                          (i) the financial integrity of any--
                                  (I) futures commission 
                                merchant; and
                                  (II) introducing broker; and
                          (ii) the protection of customer 
                        funds.
          (12) Protection of markets and market participants.--
        The board of trade shall establish and enforce rules--
                  (A) to protect markets and market 
                participants from abusive practices committed 
                by any party, including abusive practices 
                committed by a party acting as an agent for a 
                participant; and
                  (B) to promote fair and equitable trading on 
                the contract market.
          (13) Disciplinary procedures.--The board of trade 
        shall establish and enforce disciplinary procedures 
        that authorize the board of trade to discipline, 
        suspend, or expel members or market participants that 
        violate the rules of the board of trade, or similar 
        methods for performing the same functions, including 
        delegation of the functions to third parties.
          (14) Dispute resolution.--The board of trade shall 
        establish and enforce rules regarding, and provide 
        facilities for alternative dispute resolution as 
        appropriate for, market participants and any market 
        intermediaries.
          (15) Governance fitness standards.--The board of 
        trade shall establish and enforce appropriate fitness 
        standards for directors, members of any disciplinary 
        committee, members of the contract market, and any 
        other person with direct access to the facility 
        (including any party affiliated with any person 
        described in this paragraph).
          (16) Conflicts of interest.--The board of trade shall 
        establish and enforce rules--
                  (A) to minimize conflicts of interest in the 
                decision-making process of the contract market; 
                and
                  (B) to establish a process for resolving 
                conflicts of interest described in subparagraph 
                (A).
          (17) Composition of governing boards of contract 
        markets.--The governance arrangements of the board of 
        trade shall be designed to permit consideration of the 
        views of market participants.
          (18) Recordkeeping.--The board of trade shall 
        maintain records of all activities relating to the 
        business of the contract market--
                  (A) in a form and manner that is acceptable 
                to the Commission; and
                  (B) for a period of at least 5 years.
          (19) Antitrust considerations.--Unless necessary or 
        appropriate to achieve the purposes of this Act, the 
        board of trade shall not--
                  (A) adopt any rule or taking any action that 
                results in any unreasonable restraint of trade; 
                or
                  (B) impose any material anticompetitive 
                burden on trading on the contract market.
          (20) System safeguards.--The board of trade shall--
                  (A) establish and maintain a program of risk 
                analysis and oversight to identify and minimize 
                sources of operational risk, [through the 
                development of appropriate controls and 
                procedures, and the development of automated 
                systems, that are reliable, secure, and have 
                adequate scalable capacity;] through--
                          (i) the implementation of appropriate 
                        controls and procedures; and 
                          (ii) the development and operation of 
                        automated systems that--
                                  (I) are reliable, secure, and 
                                resilient; 
                                  (II) have adequate scalable 
                                capacity; and 
                                  (III) maintain the 
                                confidentiality, integrity, and 
                                availability of the data they 
                                contain; 
                  (B) establish and maintain emergency 
                procedures, backup facilities, and a plan for 
                disaster recovery that allow for the timely 
                recovery and resumption of operations and the 
                fulfillment of the responsibilities and 
                obligations of the board of trade; and
                  (C) periodically conduct [tests to verify 
                that backup resources are sufficient to ensure 
                continued order processing and trade matching, 
                price reporting, market surveillance, and 
                maintenance of a comprehensive and accurate 
                audit trail.] tests to--
                          (i) verify the reliability, security, 
                        resilience, and capacity of the board 
                        of trade's automated systems; 
                          (ii) verify the confidentiality, 
                        integrity, and availability of the data 
                        contained in those systems; and 
                          (iii) verify that backup resources 
                        are sufficient to ensure continued 
                        order processing and trade matching, 
                        price reporting, market surveillance, 
                        and maintenance of a comprehensive and 
                        accurate audit trail. 
          (21) Financial resources.--
                  (A) In general.--The board of trade shall 
                have adequate financial, operational, and 
                managerial resources to discharge each 
                responsibility of the board of trade.
                  (B) Determination of adequacy.--The financial 
                resources of the board of trade shall be 
                considered to be adequate if the value of the 
                financial resources exceeds the total amount 
                that would enable the contract market to cover 
                the operating costs of the contract market for 
                a 1-year period, as calculated on a rolling 
                basis.
          (22) Diversity of board of directors.--The board of 
        trade, if a publicly traded company, shall endeavor to 
        recruit individuals to serve on the board of directors 
        and the other decision-making bodies (as determined by 
        the Commission) of the board of trade from among, and 
        to have the composition of the bodies reflect, a broad 
        and culturally diverse pool of qualified candidates.
          (23) Securities and exchange commission.--The board 
        of trade shall keep any such records relating to swaps 
        defined in section 1a(47)(A)(v) open to inspection and 
        examination by the Securities and Exchange Commission.
  [(e) Current Agricultural Commodities.--]
          [(1) Subject to paragraph (2) of this subsection, a 
        contract for]
  (d) Current Agricultural Commodities.--A contract for 
purchase or sale for future delivery of an agricultural 
commodity enumerated in section 1a(9) that is available for 
trade on a contract market, as of the date of the enactment of 
this subsection, may be traded only on a contract market 
designated under this section.
          [(2) In order to promote responsible economic or 
        financial innovation and fair competition, the 
        Commission, on application by any person, after notice 
        and public comment and opportunity for hearing, may 
        prescribe rules and regulations to provide for the 
        offer and sale of contracts for future delivery or 
        options on such contracts to be conducted on a 
        derivatives transaction execution facility.]

SEC. 5B. DERIVATIVES CLEARING ORGANIZATIONS.

  (a) Registration Requirement.--
          (1) In general.--Except as provided in paragraph (2), 
        it shall be unlawful for a derivatives clearing 
        organization, directly or indirectly, to make use of 
        the mails or any means or instrumentality of interstate 
        commerce to perform the functions of a derivatives 
        clearing organization with respect to--
                  (A) a contract of sale of a commodity for 
                future delivery (or an option on the contract 
                of sale) or option on a commodity, in each 
                case, unless the contract or option is--
                          (i) excluded from this Act by 
                        subsection (a)(1)(C)(i), (c), or (f) of 
                        section 2; or
                          (ii) a security futures product 
                        cleared by a clearing agency registered 
                        with the Securities and Exchange 
                        Commission under the Securities 
                        Exchange Act of 1934 (15 U.S.C. 78a et 
                        seq.); or
                  (B) a swap.
          (2) Exception.--Paragraph (1) shall not apply to a 
        derivatives clearing organization that is registered 
        with the Commission.
  (b) Voluntary Registration.--A person that clears 1 or more 
agreements, contracts, or transactions that are not required to 
be cleared under this Act may register with the Commission as a 
derivatives clearing organization.
  (c) Registration of Derivatives Clearing Organizations.--
          (1) Application.--A person desiring to register as a 
        derivatives clearing organization shall submit to the 
        Commission an application in such form and containing 
        such information as the Commission may require for the 
        purpose of making the determinations required for 
        approval under paragraph (2).
          (2) Core principles for derivatives clearing 
        organizations.--
                  (A) Compliance.--
                          (i) In general.--To be registered and 
                        to maintain registration as a 
                        derivatives clearing organization, a 
                        derivatives clearing organization shall 
                        comply with each core principle 
                        described in this paragraph and any 
                        requirement that the Commission may 
                        impose by rule or regulation pursuant 
                        to section 8a(5).
                          (ii) Discretion of derivatives 
                        clearing organization.--Subject to any 
                        rule or regulation prescribed by the 
                        Commission, a derivatives clearing 
                        organization shall have reasonable 
                        discretion in establishing the manner 
                        by which the derivatives clearing 
                        organization complies with each core 
                        principle described in this paragraph.
                  (B) Financial resources.--
                          (i) In general.--Each derivatives 
                        clearing organization shall have 
                        adequate financial, operational, and 
                        managerial resources, as determined by 
                        the Commission, to discharge each 
                        responsibility of the derivatives 
                        clearing organization.
                          (ii) Minimum amount of financial 
                        resources.--Each derivatives clearing 
                        organization shall possess financial 
                        resources that, at a minimum, exceed 
                        the total amount that would--
                                  (I) enable the organization 
                                to meet its financial 
                                obligations to its members and 
                                participants notwithstanding a 
                                default by the member or 
                                participant creating the 
                                largest financial exposure for 
                                that organization in extreme 
                                but plausible market 
                                conditions; and
                                  (II) enable the derivatives 
                                clearing organization to cover 
                                the operating costs of the 
                                derivatives clearing 
                                organization for a period of 1 
                                year (as calculated on a 
                                rolling basis).
                  (C) Participant and product eligibility.--
                          (i) In general.--Each derivatives 
                        clearing organization shall establish--
                                  (I) appropriate admission and 
                                continuing eligibility 
                                standards (including sufficient 
                                financial resources and 
                                operational capacity to meet 
                                obligations arising from 
                                participation in the 
                                derivatives clearing 
                                organization) for members of, 
                                and participants in, the 
                                derivatives clearing 
                                organization; and
                                  (II) appropriate standards 
                                for determining the eligibility 
                                of agreements, contracts, or 
                                transactions submitted to the 
                                derivatives clearing 
                                organization for clearing.
                          (ii) Required procedures.--Each 
                        derivatives clearing organization shall 
                        establish and implement procedures to 
                        verify, on an ongoing basis, the 
                        compliance of each participation and 
                        membership requirement of the 
                        derivatives clearing organization.
                          (iii) Requirements.--The 
                        participation and membership 
                        requirements of each derivatives 
                        clearing organization shall--
                                  (I) be objective;
                                  (II) be publicly disclosed; 
                                and
                                  (III) permit fair and open 
                                access.
                  (D) Risk management.--
                          (i) In general.--Each derivatives 
                        clearing organization shall ensure that 
                        the derivatives clearing organization 
                        possesses the ability to manage the 
                        risks associated with discharging the 
                        responsibilities of the derivatives 
                        clearing organization through the use 
                        of appropriate tools and procedures.
                          (ii) Measurement of credit 
                        exposure.--Each derivatives clearing 
                        organization shall--
                                  (I) not less than once during 
                                each business day of the 
                                derivatives clearing 
                                organization, measure the 
                                credit exposures of the 
                                derivatives clearing 
                                organization to each member and 
                                participant of the derivatives 
                                clearing organization; and
                                  (II) monitor each exposure 
                                described in subclause (I) 
                                periodically during the 
                                business day of the derivatives 
                                clearing organization.
                          (iii) Limitation of exposure to 
                        potential losses from defaults.--Each 
                        derivatives clearing organization, 
                        through margin requirements and other 
                        risk control mechanisms, shall limit 
                        the exposure of the derivatives 
                        clearing organization to potential 
                        losses from defaults by members and 
                        participants of the derivatives 
                        clearing organization to ensure that--
                                  (I) the operations of the 
                                derivatives clearing 
                                organization would not be 
                                disrupted; and
                                  (II) nondefaulting members or 
                                participants would not be 
                                exposed to losses that 
                                nondefaulting members or 
                                participants cannot anticipate 
                                or control.
                          (iv) Margin requirements.--The margin 
                        required from each member and 
                        participant of a derivatives clearing 
                        organization shall be sufficient to 
                        cover potential exposures in normal 
                        market conditions.
                          (v) Requirements regarding models and 
                        parameters.--Each model and parameter 
                        used in setting margin requirements 
                        under clause (iv) shall be--
                                  (I) risk-based; and
                                  (II) reviewed on a regular 
                                basis.
                  (E) Settlement procedures.--Each derivatives 
                clearing organization shall--
                          (i) complete money settlements on a 
                        timely basis (but not less frequently 
                        than once each business day);
                          (ii) employ money settlement 
                        arrangements to eliminate or strictly 
                        limit the exposure of the derivatives 
                        clearing organization to settlement 
                        bank risks (including credit and 
                        liquidity risks from the use of banks 
                        to effect money settlements);
                          (iii) ensure that money settlements 
                        are final when effected;
                          (iv) maintain an accurate record of 
                        the flow of funds associated with each 
                        money settlement;
                          (v) possess the ability to comply 
                        with each term and condition of any 
                        permitted netting or offset arrangement 
                        with any other clearing organization;
                          (vi) regarding physical settlements, 
                        establish rules that clearly state each 
                        obligation of the derivatives clearing 
                        organization with respect to physical 
                        deliveries; and
                          (vii) ensure that each risk arising 
                        from an obligation described in clause 
                        (vi) is identified and managed.
                  (F) Treatment of funds.--
                          (i) Required standards and 
                        procedures.--Each derivatives clearing 
                        organization shall establish standards 
                        and procedures that are designed to 
                        protect and ensure the safety of member 
                        and participant funds and assets.
                          (ii) Holding of funds and assets.--
                        Each derivatives clearing organization 
                        shall hold member and participant funds 
                        and assets in a manner by which to 
                        minimize the risk of loss or of delay 
                        in the access by the derivatives 
                        clearing organization to the assets and 
                        funds.
                          (iii) Permissible investments.--Funds 
                        and assets invested by a derivatives 
                        clearing organization shall be held in 
                        instruments with minimal credit, 
                        market, and liquidity risks.
                  (G) Default rules and procedures.--
                          (i) In general.--Each derivatives 
                        clearing organization shall have rules 
                        and procedures designed to allow for 
                        the efficient, fair, and safe 
                        management of events during which 
                        members or participants--
                                  (I) become insolvent; or
                                  (II) otherwise default on the 
                                obligations of the members or 
                                participants to the derivatives 
                                clearing organization.
                          (ii) Default procedures.--Each 
                        derivatives clearing organization 
                        shall--
                                  (I) clearly state the default 
                                procedures of the derivatives 
                                clearing organization;
                                  (II) make publicly available 
                                the default rules of the 
                                derivatives clearing 
                                organization; and
                                  (III) ensure that the 
                                derivatives clearing 
                                organization may take timely 
                                action--
                                          (aa) to contain 
                                        losses and liquidity 
                                        pressures; and
                                          (bb) to continue 
                                        meeting each obligation 
                                        of the derivatives 
                                        clearing organization.
                  (H) Rule enforcement.--Each derivatives 
                clearing organization shall--
                          (i) maintain adequate arrangements 
                        and resources for--
                                  (I) the effective monitoring 
                                and enforcement of compliance 
                                with the rules of the 
                                derivatives clearing 
                                organization; and
                                  (II) the resolution of 
                                disputes;
                          (ii) have the authority and ability 
                        to discipline, limit, suspend, or 
                        terminate the activities of a member or 
                        participant due to a violation by the 
                        member or participant of any rule of 
                        the derivatives clearing organization; 
                        and
                          (iii) report to the Commission 
                        regarding rule enforcement activities 
                        and sanctions imposed against members 
                        and participants as provided in clause 
                        (ii).
                  (I) System safeguards.--Each derivatives 
                clearing organization shall--
                          (i) establish and maintain a program 
                        of risk analysis and oversight to 
                        identify and minimize sources of 
                        operational risk [through the 
                        development of appropriate controls and 
                        procedures, and automated systems, that 
                        are reliable, secure, and have adequate 
                        scalable capacity;] through the--
                                  (I) implementation of 
                                appropriate controls and 
                                procedures; and 
                                  (II) development and 
                                operation of automated systems 
                                that--
                                          (aa) are reliable, 
                                        secure, and resilient; 
                                          (bb) have adequate 
                                        scalable capacity; and 
                                          (cc) maintain the 
                                        confidentiality, 
                                        integrity, and 
                                        availability of the 
                                        data that they contain; 

                          (ii) establish and maintain emergency 
                        procedures, backup facilities, and a 
                        plan for disaster recovery that 
                        [allows] allow for--
                                  (I) the timely recovery and 
                                resumption of operations of the 
                                derivatives clearing 
                                organization; and
                                  (II) the fulfillment of each 
                                obligation and responsibility 
                                of the derivatives clearing 
                                organization; and
                          (iii) periodically conduct [tests to 
                        verify that the backup resources of the 
                        derivatives clearing organization are 
                        sufficient to ensure daily processing, 
                        clearing, and settlement.] tests to--
                                  (I) verify the reliability, 
                                security, resilience, and 
                                capacity of the derivatives 
                                clearing organization's 
                                automated systems; 
                                  (II) verify the 
                                confidentiality, integrity, and 
                                availability of the data 
                                contained in those systems; and 

                                  (III) verify that the backup 
                                resources of the derivatives 
                                clearing organization are 
                                sufficient to ensure daily 
                                processing, clearing, and 
                                settlement. 
                  (J) Reporting.--Each derivatives clearing 
                organization shall provide to the Commission 
                all information that the Commission determines 
                to be necessary to conduct oversight of the 
                derivatives clearing organization.
                  (K) Recordkeeping.--Each derivatives clearing 
                organization shall maintain records of all 
                activities related to the business of the 
                derivatives clearing organization as a 
                derivatives clearing organization--
                          (i) in a form and manner that is 
                        acceptable to the Commission; and
                          (ii) for a period of not less than 5 
                        years.
                  (L) Public information.--
                          (i) In general.--Each derivatives 
                        clearing organization shall provide to 
                        market participants sufficient 
                        information to enable the market 
                        participants to identify and evaluate 
                        accurately the risks and costs 
                        associated with using the services of 
                        the derivatives clearing organization.
                          (ii) Availability of information.--
                        Each derivatives clearing organization 
                        shall make information concerning the 
                        rules and operating and default 
                        procedures governing the clearing and 
                        settlement systems of the derivatives 
                        clearing organization available to 
                        market participants.
                          (iii) Public disclosure.--Each 
                        derivatives clearing organization shall 
                        disclose publicly and to the Commission 
                        information concerning--
                                  (I) the terms and conditions 
                                of each contract, agreement, 
                                and transaction cleared and 
                                settled by the derivatives 
                                clearing organization;
                                  (II) each clearing and other 
                                fee that the derivatives 
                                clearing organization charges 
                                the members and participants of 
                                the derivatives clearing 
                                organization;
                                  (III) the margin-setting 
                                methodology, and the size and 
                                composition, of the financial 
                                resource package of the 
                                derivatives clearing 
                                organization;
                                  (IV) daily settlement prices, 
                                volume, and open interest for 
                                each contract settled or 
                                cleared by the derivatives 
                                clearing organization; and
                                  (V) any other matter relevant 
                                to participation in the 
                                settlement and clearing 
                                activities of the derivatives 
                                clearing organization.
                  (M) Information-sharing.--Each derivatives 
                clearing organization shall--
                          (i) enter into, and abide by the 
                        terms of, each appropriate and 
                        applicable domestic and international 
                        information-sharing agreement; and
                          (ii) use relevant information 
                        obtained from each agreement described 
                        in clause (i) in carrying out the risk 
                        management program of the derivatives 
                        clearing organization.
                  (N) Antitrust considerations.--Unless 
                necessary or appropriate to achieve the 
                purposes of this Act, a derivatives clearing 
                organization shall not--
                          (i) adopt any rule or take any action 
                        that results in any unreasonable 
                        restraint of trade; or
                          (ii) impose any material 
                        anticompetitive burden.
                  (O) Governance fitness standards.--
                          (i) Governance arrangements.--Each 
                        derivatives clearing organization shall 
                        establish governance arrangements that 
                        are transparent--
                                  (I) to fulfill public 
                                interest requirements; and
                                  (II) to permit the 
                                consideration of the views of 
                                owners and participants.
                          (ii) Fitness standards.--Each 
                        derivatives clearing organization shall 
                        establish and enforce appropriate 
                        fitness standards for--
                                  (I) directors;
                                  (II) members of any 
                                disciplinary committee;
                                  (III) members of the 
                                derivatives clearing 
                                organization;
                                  (IV) any other individual or 
                                entity with direct access to 
                                the settlement or clearing 
                                activities of the derivatives 
                                clearing organization; and
                                  (V) any party affiliated with 
                                any individual or entity 
                                described in this clause.
                  (P) Conflicts of interest.--Each derivatives 
                clearing organization shall--
                          (i) establish and enforce rules to 
                        minimize conflicts of interest in the 
                        decision-making process of the 
                        derivatives clearing organization; and
                          (ii) establish a process for 
                        resolving conflicts of interest 
                        described in clause (i).
                  (Q) Composition of governing boards.--Each 
                derivatives clearing organization shall ensure 
                that the composition of the governing board or 
                committee of the derivatives clearing 
                organization includes market participants.
                  (R) Legal risk.--Each derivatives clearing 
                organization shall have a well-founded, 
                transparent, and enforceable legal framework 
                for each aspect of the activities of the 
                derivatives clearing organization.''.
          (3) Orders concerning competition.--A derivatives 
        clearing organization may request the Commission to 
        issue an order concerning whether a rule or practice of 
        the applicant is the least anticompetitive means of 
        achieving the objectives, purposes, and policies of 
        this Act.
  (d) Existing Derivatives Clearing Organizations.--A 
derivatives clearing organization shall be deemed to be 
registered under this section to the extent that the 
derivatives clearing organization clears agreements, contracts, 
or transactions for a board of trade that has been designated 
by the Commission as a contract market for such agreements, 
contracts, or transactions before the date of the enactment of 
this section.
  (e) Appointment of Trustee.--
          (1) In general.--If a proceeding under section 5e 
        results in the suspension or revocation of the 
        registration of a derivatives clearing organization, or 
        if a derivatives clearing organization withdraws from 
        registration, the Commission, on notice to the 
        derivatives clearing organization, may apply to the 
        appropriate United States district court where the 
        derivatives clearing organization is located for the 
        appointment of a trustee.
          (2) Assumption of jurisdiction.--If the Commission 
        applies for appointment of a trustee under paragraph 
        (1)--
                  (A) the court may take exclusive jurisdiction 
                over the derivatives clearing organization and 
                the records and assets of the derivatives 
                clearing organization, wherever located; and
                  (B) if the court takes jurisdiction under 
                subparagraph (A), the court shall appoint the 
                Commission, or a person designated by the 
                Commission, as trustee with power to take 
                possession and continue to operate or terminate 
                the operations of the derivatives clearing 
                organization in an orderly manner for the 
                protection of participants, subject to such 
                terms and conditions as the court may 
                prescribe.
  (f) Linking of Regulated Clearing Facilities.--
          (1) In general.--The Commission shall facilitate the 
        linking or coordination of derivatives clearing 
        organizations registered under this Act with other 
        regulated clearance facilities for the coordinated 
        settlement of cleared transactions. In order to 
        minimize systemic risk, under no circumstances shall a 
        derivatives clearing organization be compelled to 
        accept the counterparty credit risk of another clearing 
        organization.
          (2) Coordination.--In carrying out paragraph (1), the 
        Commission shall coordinate with the Federal banking 
        agencies and the Securities and Exchange Commission.
  (g) Existing Depository Institutions and Clearing Agencies.--
          (1) In general.--A depository institution or clearing 
        agency registered with the Securities and Exchange 
        Commission under the Securities Exchange Act of 1934 
        (15 U.S.C. 78a et seq.) that is required to be 
        registered as a derivatives clearing organization under 
        this section is deemed to be registered under this 
        section to the extent that, before the date of 
        enactment of this subsection--
                  (A) the depository institution cleared swaps 
                as a multilateral clearing organization; or
                  (B) the clearing agency cleared swaps.
          (2) Conversion of depository institutions.--A 
        depository institution to which this subsection applies 
        may, by the vote of the shareholders owning not less 
        than 51 percent of the voting interests of the 
        depository institution, be converted into a State 
        corporation, partnership, limited liability company, or 
        similar legal form pursuant to a plan of conversion, if 
        the conversion is not in contravention of applicable 
        State law.
          (3) Sharing of information.--The Securities and 
        Exchange Commission shall make available to the 
        Commission, upon request, all information determined to 
        be relevant by the Securities and Exchange Commission 
        regarding a clearing agency deemed to be registered 
        with the Commission under paragraph (1).
  (h) Exemptions.--The Commission may exempt, conditionally or 
unconditionally, a derivatives clearing organization from 
registration under this section for the clearing of swaps if 
the Commission determines that the derivatives clearing 
organization is subject to comparable, comprehensive 
supervision and regulation by the Securities and Exchange 
Commission or the appropriate government authorities in the 
home country of the organization. Such conditions may include, 
but are not limited to, requiring that the derivatives clearing 
organization be available for inspection by the Commission and 
make available all information requested by the Commission.
  (i) Designation of Chief Compliance Officer.--
          (1) In general.--Each derivatives clearing 
        organization shall designate an individual to serve as 
        a chief compliance officer.
          (2) Duties.--The chief compliance officer shall--
                  (A) report directly to the board or to the 
                senior officer of the derivatives clearing 
                organization;
                  (B) review the compliance of the derivatives 
                clearing organization with respect to the core 
                principles described in subsection (c)(2);
                  (C) in consultation with the board of the 
                derivatives clearing organization, a body 
                performing a function similar to the board of 
                the derivatives clearing organization, or the 
                senior officer of the derivatives clearing 
                organization, resolve any conflicts of interest 
                that may arise;
                  (D) be responsible for administering each 
                policy and procedure that is required to be 
                established pursuant to this section;
                  (E) ensure compliance with this Act 
                (including regulations) relating to agreements, 
                contracts, or transactions, including each rule 
                prescribed by the Commission under this 
                section;
                  (F) establish procedures for the remediation 
                of noncompliance issues identified by the 
                compliance officer through any--
                          (i) compliance office review;
                          (ii) look-back;
                          (iii) internal or external audit 
                        finding;
                          (iv) self-reported error; or
                          (v) validated complaint; and
                  (G) establish and follow appropriate 
                procedures for the handling, management 
                response, remediation, retesting, and closing 
                of noncompliance issues.
          (3) Annual reports.--
                  (A) In general.--In accordance with rules 
                prescribed by the Commission, the chief 
                compliance officer shall annually prepare and 
                sign a report that contains a description of--
                          (i) the compliance of the derivatives 
                        clearing organization of the compliance 
                        officer with respect to this Act 
                        (including regulations); and
                          (ii) each policy and procedure of the 
                        derivatives clearing organization of 
                        the compliance officer (including the 
                        code of ethics and conflict of interest 
                        policies of the derivatives clearing 
                        organization).
                  (B) Requirements.--A compliance report under 
                subparagraph (A) shall--
                          (i) accompany each appropriate 
                        financial report of the derivatives 
                        clearing organization that is required 
                        to be furnished to the Commission 
                        pursuant to this section; and
                          (ii) include a certification that, 
                        under penalty of law, the compliance 
                        report is accurate and complete.
  [(k)] (j) Reporting Requirements.--
          (1) Duty of derivatives clearing organizations.--Each 
        derivatives clearing organization that clears swaps 
        shall provide to the Commission all information that is 
        determined by the Commission to be necessary to perform 
        each responsibility of the Commission under this Act.
          (2) Data collection and maintenance requirements.--
        The Commission shall adopt data collection and 
        maintenance requirements for swaps cleared by 
        derivatives clearing organizations that are comparable 
        to the corresponding requirements for--
                  (A) swaps data reported to swap data 
                repositories; and
                  (B) swaps traded on swap execution 
                facilities.
          (3) Reports on security-based swap agreements to be 
        shared with the securities and exchange commission.--
                  (A) In general.--A derivatives clearing 
                organization that clears security-based swap 
                agreements (as defined in section 1a(47)(A)(v)) 
                shall, upon request, open to inspection and 
                examination to the Securities and Exchange 
                Commission all books and records relating to 
                such security-based swap agreements, consistent 
                with the confidentiality and disclosure 
                requirements of section 8.
                  (B) Jurisdiction.--Nothing in this paragraph 
                shall affect the exclusive jurisdiction of the 
                Commission to prescribe recordkeeping and 
                reporting requirements for a derivatives 
                clearing organization that is registered with 
                the Commission.
          (4) Information sharing.--Subject to section 8, and 
        upon request, the Commission shall share information 
        collected under paragraph (2) with--
                  (A) the Board;
                  (B) the Securities and Exchange Commission;
                  (C) each appropriate prudential regulator;
                  (D) the Financial Stability Oversight 
                Council;
                  (E) the Department of Justice; and
                  (F) any other person that the Commission 
                determines to be appropriate, including--
                          (i) foreign financial supervisors 
                        (including foreign futures 
                        authorities);
                          (ii) foreign central banks; and
                          (iii) foreign ministries.
          (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.
          (6) Public information.--Each derivatives clearing 
        organization that clears swaps shall provide to the 
        Commission (including any designee of the Commission) 
        information under paragraph (2) in such form and at 
        such frequency as is required by the Commission to 
        comply with the public reporting requirements contained 
        in section 2(a)(13).

SEC. 5C. COMMON PROVISIONS APPLICABLE TO REGISTERED ENTITIES.

  (a) Acceptable Business Practices Under Core Principles.--
          (1) In general.--Consistent with the purposes of this 
        Act, the Commission may issue interpretations, or 
        approve interpretations submitted to the Commission, of 
        sections 5(d) and 5b(c)(2), to describe what would 
        constitute an acceptable business practice under such 
        sections.
          (2) Effect of interpretation.--An interpretation 
        issued under paragraph (1) may provide the exclusive 
        means for complying with each section described in 
        paragraph (1).
  (b) Delegation of Functions Under Core Principles.--
          [(1) In general.--] [A]
          (1) Delegation._
                  (A) In general._A  [contract market, 
                derivatives transaction execution facility, or 
                electronic trading facility] registered entity 
                [with respect to a significant price discovery 
                contract] may comply with any applicable core 
                principle through delegation of any relevant 
                function to a registered futures association or 
                a registered entity that is not an electronic 
                trading facility.
                  (B) Swaps.--In addition to the authority 
                described in subparagraph (A), a registered 
                entity may also comply with any applicable core 
                principle, as it applies to swaps, through 
                delegation of any relevant function to a 
                registered national securities association.
          (2) Responsibility.--A [contract market, derivatives 
        transaction execution facility, or electronic trading 
        facility] registered entity that delegates a function 
        under paragraph (1) shall remain responsible for 
        carrying out the function.
          (3) Noncompliance.--If a contract market[, 
        derivatives transaction execution facility,] or 
        electronic trading facility that delegates a function 
        under paragraph (1) becomes aware that a delegated 
        function is not being performed as required under this 
        Act, the contract market[, derivatives transaction 
        execution facility,] or electronic trading facility 
        shall promptly take steps to address the noncompliance.
  (c) New Contracts, New Rules, and Rule Amendments.--
          (1) In general.--A registered entity may elect to 
        list for trading or accept for clearing any new 
        contract, or other instrument, or may elect to approve 
        and implement any new rule or rule amendment, by 
        providing to the Commission (and the Secretary of the 
        Treasury, in the case of a contract of sale of a 
        government security for future delivery (or option on 
        such a contract) or a rule or rule amendment 
        specifically related to such a contract) a written 
        certification that the new contract or instrument or 
        clearing of the new contract or instrument, new rule, 
        or rule amendment complies with this Act (including 
        regulations under this Act).
          (2) Rule review.--The new rule or rule amendment 
        described in paragraph (1) shall become effective, 
        pursuant to the certification of the registered entity 
        and notice of such certification to its members (in a 
        manner to be determined by the Commission), on the date 
        that is 10 business days after the date on which the 
        Commission receives the certification (or such shorter 
        period as determined by the Commission by rule or 
        regulation) unless the Commission notifies the 
        registered entity within such time that it is staying 
        the certification because there exist novel or complex 
        issues that require additional time to analyze, an 
        inadequate explanation by the submitting registered 
        entity, or a potential inconsistency with this Act 
        (including regulations under this Act).
          (3) Stay of certification for rules.--
                  (A) A notification by the Commission pursuant 
                to paragraph (2) shall stay the certification 
                of the new rule or rule amendment for up to an 
                additional 90 days from the date of the 
                notification.
                  (B) A rule or rule amendment subject to a 
                stay pursuant to subparagraph (A) shall become 
                effective, pursuant to the certification of the 
                registered entity, at the expiration of the 
                period described in subparagraph (A) unless the 
                Commission--
                          (i) withdraws the stay prior to that 
                        time; or
                          (ii) notifies the registered entity 
                        during such period that it objects to 
                        the proposed certification on the 
                        grounds that it is inconsistent with 
                        this Act (including regulations under 
                        this Act).
                  (C) The Commission shall provide a not less 
                than 30-day public comment period, within the 
                90-day period in which the stay is in effect as 
                described in subparagraph (A), whenever the 
                Commission reviews a rule or rule amendment 
                pursuant to a notification by the Commission 
                under this paragraph.
          (4) Prior approval.--
                  (A) In general.--A registered entity may 
                request that the Commission grant prior 
                approval to any new contract or other 
                instrument, new rule, or rule amendment.
                  (B) Prior approval required.--Notwithstanding 
                any other provision of this section, a 
                designated contract market shall submit to the 
                Commission for prior approval each rule 
                amendment that materially changes the terms and 
                conditions, as determined by the Commission, in 
                any contract of sale for future delivery of a 
                commodity specifically enumerated in section 
                1a(10) (or any option thereon) traded through 
                its facilities if the rule amendment applies to 
                contracts and delivery months which have 
                already been listed for trading and have open 
                interest.
                  (C) Deadline.--If prior approval is requested 
                under subparagraph (A), the Commission shall 
                take final action on the request not later than 
                90 days after submission of the request, unless 
                the person submitting the request agrees to an 
                extension of the time limitation established 
                under this subparagraph.
          (5) Approval.--
                  (A) Rules.--The Commission shall approve a 
                new rule, or rule amendment, of a registered 
                entity unless the Commission finds that the new 
                rule, or rule amendment, is inconsistent with 
                this subtitle (including regulations).
                  (B) Contracts and instruments.--The 
                Commission shall approve a new contract or 
                other instrument unless the Commission finds 
                that the new contract or other instrument would 
                violate this Act (including regulations).
                  (C) Special rule for review and approval of 
                event contracts and swaps contracts.--
                          (i) Event contracts.--In connection 
                        with the listing of agreements, 
                        contracts, transactions, or swaps in 
                        excluded commodities that are based 
                        upon the occurrence, extent of an 
                        occurrence, or contingency (other than 
                        a change in the price, rate, value, or 
                        levels of a commodity described in 
                        section [1a(2)(i))] 1a(19)(i)), by a 
                        designated contract market or swap 
                        execution facility, the Commission may 
                        determine that such agreements, 
                        contracts, or transactions are contrary 
                        to the public interest if the 
                        agreements, contracts, or transactions 
                        involve--
                                  (I) activity that is unlawful 
                                under any Federal or State law;
                                  (II) terrorism;
                                  (III) assassination;
                                  (IV) war;
                                  (V) gaming; or
                                  (VI) other similar activity 
                                determined by the Commission, 
                                by rule or regulation, to be 
                                contrary to the public 
                                interest.
                          (ii) Prohibition.--No agreement, 
                        contract, or transaction determined by 
                        the Commission to be contrary to the 
                        public interest under clause (i) may be 
                        listed or made available for clearing 
                        or trading on or through a registered 
                        entity.
                          (iii) Swaps contracts.--
                                  (I) In general.--In 
                                connection with the listing of 
                                a swap for clearing by a 
                                derivatives clearing 
                                organization, the Commission 
                                shall determine, upon request 
                                or on its own motion, the 
                                initial eligibility, or the 
                                continuing qualification, of a 
                                derivatives clearing 
                                organization to clear such a 
                                swap under those criteria, 
                                conditions, or rules that the 
                                Commission, in its discretion, 
                                determines.
                                  (II) Requirements.--Any such 
                                criteria, conditions, or rules 
                                shall consider--
                                          (aa) the financial 
                                        integrity of the 
                                        derivatives clearing 
                                        organization; and
                                          (bb) any other 
                                        factors which the 
                                        Commission determines 
                                        may be appropriate.
                          (iv) Deadline.--The Commission shall 
                        take final action under clauses (i) and 
                        (ii) in not later than 90 days from the 
                        commencement of its review unless the 
                        party seeking to offer the contract or 
                        swap agrees to an extension of this 
                        time limitation.
  (e) Reservation of Emergency Authority.--Nothing in this 
section shall limit or in any way affect the emergency powers 
of the Commission provided in section 8a(9).
  (f) Consistent with this Act, each designated contract market 
[and registered derivatives transaction execution facility] 
shall issue such rules as are necessary to avoid duplicative or 
conflicting rules applicable to any futures commission merchant 
registered with the Commission pursuant to section 4f(a) of 
this Act (except paragraph (2) thereof), that is also 
registered with the Securities and Exchange Commission pursuant 
to section 15(b) of the Securities Exchange Act of 1934 (except 
paragraph (11) thereof) with respect to the application of--
          (1) rules of such designated contract market [or 
        registered derivatives transaction execution facility] 
        of the type specified in section 4d(e) involving 
        security futures products; and
          (2) similar rules of national securities associations 
        registered pursuant to section 15A(a) of the Securities 
        Exchange Act of 1934 and national securities exchanges 
        registered pursuant to section 6(g) of such Act 
        involving security futures products.

           *       *       *       *       *       *       *


SEC. 5F. DESIGNATION OF SECURITIES EXCHANGES AND ASSOCIATIONS AS 
                    CONTRACT MARKETS.

  (a) Any board of trade that is registered with the Securities 
and Exchange Commission as a national securities exchange, is a 
national securities association registered pursuant to section 
15A(a) of the Securities Exchange Act of 1934, or is an 
alternative trading system shall be a designated contract 
market in security futures products if--
          (1) such national securities exchange, national 
        securities association, or alternative trading system 
        lists or trades no other contracts of sale for future 
        delivery, except for security futures products;
          (2) such national securities exchange, national 
        securities association, or alternative trading system 
        files written notice with the Commission in such form 
        as the Commission, by rule, may prescribe containing 
        such information as the Commission, by rule, may 
        prescribe as necessary or appropriate in the public 
        interest or for the protection of customers; and
          (3) the registration of such national securities 
        exchange, national securities association, or 
        alternative trading system is not suspended pursuant to 
        an order by the Securities and Exchange Commission.
Such designation shall be effective contemporaneously with the 
submission of notice, in written or electronic form, to the 
Commission.
  (b)(1) A national securities exchange, national securities 
association, or alternative trading system that is designated 
as a contract market pursuant to [section 5f] this section 
shall be exempt from the following provisions of this Act and 
the rules thereunder:
          (A) Subsections (c)[, (e), and (g)] and (e) of 
        section 4c.
          (B) Section 4j.
          (C) Section 5.
          (D) Section 5c.
          (E) Section 6a.
          (F) Section 8(d).
          (G) Section 9(f).
          (H) Section 16.
  (2) An alternative trading system that is a designated 
contract market under this section shall be required to be a 
member of a futures association registered under section 17 and 
shall be exempt from any provision of this Act that would 
require such alternative trading system to--
          (A) set rules governing the conduct of subscribers 
        other than the conduct of such subscribers' trading on 
        such alternative trading system; or
          (B) discipline subscribers other than by exclusion 
        from trading.
  (3) To the extent that an alternative trading system is 
exempt from any provision of this Act pursuant to paragraph (2) 
of this subsection, the futures association registered under 
section 17 of which the alternative trading system is a member 
shall set rules governing the conduct of subscribers to the 
alternative trading system and discipline the subscribers.
  (4)(A) Except as provided in subparagraph (B), but 
notwithstanding any other provision of this Act, the 
Commission, by rule, regulation, or order, may conditionally or 
unconditionally exempt any designated contract market in 
security futures subject to the designation requirement of this 
section from any provision of this Act or of any rule or 
regulation thereunder, to the extent such exemption is 
necessary or appropriate in the public interest and is 
consistent with the protection of investors.
  (B) The Commission shall, by rule or regulation, determine 
the procedures under which an exemptive order under this 
section is granted and may, in its sole discretion, decline to 
entertain any application for an order of exemption under this 
section.
  (C) An alternative trading system shall not be deemed to be 
an exchange for any purpose as a result of the designation of 
such alternative trading system as a contract market under this 
section.

           *       *       *       *       *       *       *


SEC. 5H. SWAP EXECUTION FACILITIES.

  (a) Registration.--
          (1) In general.--No person may operate a facility for 
        the trading or processing of swaps unless the facility 
        is registered as a swap execution facility or as a 
        designated contract market under this section.
          (2) Dual registration.--Any person that is registered 
        as a swap execution facility under this section shall 
        register with the Commission regardless of whether the 
        person also is registered with the Securities and 
        Exchange Commission as a swap execution facility.
  (b) Trading and Trade Processing.--
          (1) In general.--Except as specified in paragraph 
        (2), a swap execution facility that is registered under 
        subsection (a) may--
                  (A) make available for trading any swap; and
                  (B) facilitate trade processing of any swap.
          (2) Agricultural swaps.--A swap execution facility 
        may not list for trading or confirm the execution of 
        any swap in an agricultural commodity (as defined by 
        the Commission) except pursuant to a rule or regulation 
        of the Commission allowing the swap under such terms 
        and conditions as the Commission shall prescribe.
  (c) Identification of Facility Used To Trade Swaps by 
Contract Markets.--A board of trade that operates a contract 
market shall, to the extent that the board of trade also 
operates a swap execution facility and uses the same electronic 
trade execution system for listing and executing trades of 
swaps on or through the contract market and the swap execution 
facility, identify whether the electronic trading of such swaps 
is taking place on or through the contract market or the swap 
execution facility.
  (d) Rule-writing.--
          (1) The Securities and Exchange Commission and 
        Commodity Futures Trading Commission may promulgate 
        rules defining the universe of swaps that can be 
        executed on a swap execution facility. These rules 
        shall take into account the price and nonprice 
        requirements of the counterparties to a swap and the 
        goal of this section as set forth in subsection (e).
          (2) For all swaps that are not required to be 
        executed through a swap execution facility as defined 
        in paragraph (1), such trades may be executed through 
        any other available means of interstate commerce.
          (3) The Securities and Exchange Commission and 
        Commodity Futures Trading Commission shall update these 
        rules as necessary to account for technological and 
        other innovation.
  (e) Rule of Construction.--The goal of this section is to 
promote the trading of swaps on swap execution facilities and 
to promote pre-trade price transparency in the swaps market.
  (f) Core Principles for Swap Execution Facilities.--
          (1) Compliance with core principles.--
                  (A) In general.--To be registered, and 
                maintain registration, as a swap execution 
                facility, the swap execution facility shall 
                comply with--
                          (i) the core principles described in 
                        this subsection; and
                          (ii) any requirement that the 
                        Commission may impose by rule or 
                        regulation pursuant to section 8a(5).
                  (B) Reasonable discretion of swap execution 
                facility.--Unless otherwise determined by the 
                Commission by rule or regulation, a swap 
                execution facility described in subparagraph 
                (A) shall have reasonable discretion in 
                establishing the manner in which the swap 
                execution facility complies with the core 
                principles described in this subsection.
          (2) Compliance with rules.--A swap execution facility 
        shall--
                  (A) establish and enforce compliance with any 
                rule of the swap execution facility, 
                including--
                          (i) the terms and conditions of the 
                        swaps traded or processed on or through 
                        the swap execution facility; and
                          (ii) any limitation on access to the 
                        swap execution facility;
                  (B) establish and enforce trading, trade 
                processing, and participation rules that will 
                deter abuses and have the capacity to detect, 
                investigate, and enforce those rules, including 
                means--
                          (i) to provide market participants 
                        with impartial access to the market; 
                        and
                          (ii) to capture information that may 
                        be used in establishing whether rule 
                        violations have occurred;
                  (C) establish rules governing the operation 
                of the facility, including rules specifying 
                trading procedures to be used in entering and 
                executing orders traded or posted on the 
                facility, including block trades; and
                  (D) provide by its rules that when a swap 
                dealer or major swap participant enters into or 
                facilitates a swap that is subject to the 
                mandatory clearing requirement of section 2(h), 
                the swap dealer or major swap participant shall 
                be responsible for compliance with the 
                mandatory trading requirement under section 
                2(h)(8).
          (3) Swaps not readily susceptible to manipulation.--
        The swap execution facility shall permit trading only 
        in swaps that are not readily susceptible to 
        manipulation.
[Craig started making edits here--]
          (4) Monitoring of trading and trade processing.--
                  (A) In general.--The swap execution facility 
                shall--
                          [(A)] (i) establish and enforce rules 
                        or terms and conditions defining, or 
                        specifications detailing--
                                  [(i)] (I) trading procedures 
                                to be used in entering and 
                                executing orders traded on or 
                                through the facilities of the 
                                swap execution facility; and
                                  [(ii)] (II) procedures for 
                                trade processing of swaps on or 
                                through the facilities of the 
                                swap execution facility; and
                          [(B)] (ii) monitor trading in swaps 
                        to prevent manipulation, price 
                        distortion, and disruptions of the 
                        delivery or cash settlement process 
                        through surveillance, compliance, and 
                        disciplinary practices and procedures, 
                        including methods for conducting real-
                        time monitoring of trading and 
                        comprehensive and accurate trade 
                        reconstructions.
                  (B) Digital commodity.--With regard to a swap 
                on the swap execution facility that references 
                a digital commodity available on a cash market, 
                the Commission shall adopt rules detailing the 
                content and availability of trade and trader 
                data and other information the swap execution 
                facility must be able to access from the 
                referenced cash markets and data sources in 
                order to comply with this paragraph.
          (5) Ability to obtain information.--The swap 
        execution facility shall--
                  (A) establish and enforce rules that will 
                allow the facility to obtain any necessary 
                information to perform any of the functions 
                described in this section;
                  (B) provide the information to the Commission 
                on request; and
                  (C) have the capacity to carry out such 
                international information-sharing agreements as 
                the Commission may require.
          (6) Position limits or accountability.--
                  (A) In general.--To reduce the potential 
                threat of market manipulation or congestion, 
                especially during trading in the delivery 
                month, a swap execution facility that is a 
                trading facility shall adopt for each of the 
                contracts of the facility, as is necessary and 
                appropriate, position limitations or position 
                accountability for speculators.
                  (B) Position limits.--For any contract that 
                is subject to a position limitation established 
                by the Commission pursuant to section 4a(a), 
                the swap execution facility shall--
                          (i) set its position limitation at a 
                        level no higher than the Commission 
                        limitation; and
                          (ii) monitor positions established on 
                        or through the swap execution facility 
                        for compliance with the limit set by 
                        the Commission and the limit, if any, 
                        set by the swap execution facility.
          (7) Financial integrity of transactions.--The swap 
        execution facility shall establish and enforce rules 
        and procedures for ensuring the financial integrity of 
        swaps entered on or through the facilities of the swap 
        execution facility, including the clearance and 
        settlement of the swaps pursuant to section 2(h)(1).
          (8) Emergency authority.--The swap execution facility 
        shall adopt rules to provide for the exercise of 
        emergency authority, in consultation or cooperation 
        with the Commission[, as is necessary and appropriate, 
        including the authority to liquidate or transfer open 
        positions in any swap or to suspend or curtail trading 
        in a swap.] and other registered entities, as is 
        necessary and appropriate, to facilitate the 
        liquidation or transfer of open positions in any swap, 
        or to suspend or curtail trading in a swap.
          (9) Timely publication of trading information.--
                  (A) In general.--The swap execution facility 
                shall make public timely information on price, 
                trading volume, and other trading data on swaps 
                to the extent prescribed by the Commission.
                  (B) Capacity of swap execution facility.--The 
                swap execution facility shall be required to 
                have the capacity to electronically capture and 
                transmit trade information with respect to 
                transactions executed on the facility.
          (10) Recordkeeping and reporting.--
                  (A) In general.--A swap execution facility 
                shall--
                          (i) maintain records of all 
                        activities relating to the business of 
                        the facility, including a complete 
                        audit trail, in a form and manner 
                        acceptable to the Commission for a 
                        period of 5 years;
                          (ii) report to the Commission, in a 
                        form and manner acceptable to the 
                        Commission, such information as the 
                        Commission determines to be necessary 
                        or appropriate for the Commission to 
                        perform the duties of the Commission 
                        under this Act; and
                          (iii) shall keep any such records 
                        relating to swaps defined in section 
                        1a(47)(A)(v) open to inspection and 
                        examination by the Securities and 
                        Exchange Commission.''
                  (B) Requirements.--The Commission shall adopt 
                data collection and reporting requirements for 
                swap execution facilities that are comparable 
                to corresponding requirements for derivatives 
                clearing organizations and swap data 
                repositories.
          (11) Antitrust considerations.--Unless necessary or 
        appropriate to achieve the purposes of this Act, the 
        swap execution facility shall not--
                  (A) adopt any rules or taking any actions 
                that result in any unreasonable restraint of 
                trade; or
                  (B) impose any material anticompetitive 
                burden on trading or clearing.
          (12) Conflicts of interest.--The swap execution 
        facility shall--
                  (A) establish and enforce rules to minimize 
                conflicts of interest in its decision-making 
                process; and
                  (B) establish a process for resolving the 
                conflicts of interest.
          (13) Financial resources.--
                  (A) In general.--The swap execution facility 
                shall have adequate financial, operational, and 
                managerial resources to discharge each 
                responsibility of the swap execution facility.
                  (B) Determination of resource adequacy.--The 
                financial resources of a swap execution 
                facility shall be considered to be adequate if 
                the value of the financial resources exceeds 
                the total amount that would enable the swap 
                execution facility to cover the operating costs 
                of the swap execution facility for a 1-year 
                period, as calculated on a rolling basis.
          (14) System safeguards.--The swap execution facility 
        shall--
                  (A) establish and maintain a program of risk 
                analysis and oversight to identify and minimize 
                sources of operational risk, [through the 
                development of appropriate controls and 
                procedures, and automated systems, that--
                          [(i) are reliable and secure; and
                          [(ii) have adequate scalable 
                        capacity;] through--
                          (i) the implementation of appropriate 
                        controls and procedures; and 
                          (ii) the development and operation of 
                        automated systems that--
                                  (I) are reliable, secure, and 
                                resilient; 
                                  (II) have adequate scalable 
                                capacity; and 
                                  (III) maintain the 
                                confidentiality, integrity, and 
                                availability of the data they 
                                contain; 
                  (B) establish and maintain emergency 
                procedures, backup facilities, and a plan for 
                disaster recovery that allow for--
                          (i) the timely recovery and 
                        resumption of operations; and
                          (ii) the fulfillment of the 
                        responsibilities and obligations of the 
                        swap execution facility; and
                  (C) periodically conduct [tests to verify 
                that the backup resources of the swap execution 
                facility are sufficient to ensure continued--
                          [(i) order processing and trade 
                        matching;
                          [(ii) price reporting;
                          [(iii) market surveillance and
                          [(iv) maintenance of a comprehensive 
                        and accurate audit trail.] tests to--
                          (i) verify the reliability, security, 
                        resilience, and capacity of the swap 
                        execution facility's automated systems; 

                          (ii) verify the confidentiality, 
                        integrity, and availability of the data 
                        contained in those systems; and 
                          (iii) verify that backup resources 
                        are sufficient to ensure continued 
                        order processing and trade matching, 
                        price reporting, market surveillance, 
                        and maintenance of a comprehensive and 
                        accurate audit trail. 
          (15) Designation of chief compliance officer.--
                  (A) In general.--Each swap execution facility 
                shall designate an individual to serve as a 
                chief compliance officer. The individual may 
                also perform other responsibilities for the 
                swap execution facility, if--
                          (i) there are no conflicts of 
                        interest between the other 
                        responsibilities and the duties and 
                        obligations of the chief compliance 
                        officer under this Act and the 
                        regulations thereto; and 
                          (ii) the other responsibilities do 
                        not limit the ability of the chief 
                        compliance officer to carry out the 
                        responsibilities of the chief 
                        compliance officer. 
                  (B) Duties.--The chief compliance officer 
                shall--
                          (i) report directly to the board or 
                        to the senior officer of the facility;
                          (ii) review compliance with the core 
                        principles in this subsection;
                          [(iii) in consultation with the board 
                        of the facility, a body performing a 
                        function similar to that of a board, or 
                        the senior officer of the facility, 
                        resolve any conflicts of interest that 
                        may arise;
                          [(iv) be responsible for establishing 
                        and administering the policies and 
                        procedures required to be established 
                        pursuant to this section;
                          [(v) 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]
                          (iii) establish and administer--
                                  (I) policies and procedures, 
                                in consultation with the board 
                                of the facility, a body 
                                performing a function similar 
                                to that of a board, or the 
                                senior officer of the facility, 
                                that are reasonably designed, 
                                as determined by the 
                                Commission, to resolve any 
                                conflicts of interest that may 
                                arise;
                                  (II) the policies and 
                                procedures required to be 
                                established pursuant to this 
                                section; and
                                  (III) policies and procedures 
                                that reasonably ensure, as 
                                determined by the Commission, 
                                compliance with this Act and 
                                the rules and regulations 
                                issued under this Act, 
                                including rules prescribed by 
                                the Commission pursuant to this 
                                section; and
                          [(vi)] (iv) establish procedures for 
                        the remediation of noncompliance issues 
                        found during compliance office reviews, 
                        look backs, internal or external audit 
                        findings, self-reported errors, or 
                        through validated complaints.
                  (C) Requirements for procedures.--In 
                establishing procedures under subparagraph 
                [(B)(vi)] (B)(iv), the chief compliance officer 
                shall design the procedures to establish the 
                handling, management response, remediation, 
                retesting, and closing of noncompliance issues.
                  (D) Annual reports.--
                          (i) In general.--In accordance with 
                        rules prescribed by the Commission, the 
                        chief compliance officer shall annually 
                        prepare [and sign] a report that 
                        contains a description of--
                                  (I) the compliance of the 
                                swap execution facility with 
                                this Act; and
                                  (II) the policies and 
                                procedures, including the code 
                                of ethics and conflict of 
                                interest policies, of the swap 
                                execution facility.
                          (ii) Requirements.--The chief 
                        compliance officer or senior officer 
                        shall--
                                  (I) submit each report 
                                described in clause (i) with 
                                the appropriate financial 
                                report of the swap execution 
                                facility that is required to be 
                                submitted to the Commission 
                                pursuant to this section; and
                                  (II) include in the report a 
                                certification that, under 
                                penalty of law, the report is 
                                materially accurate and 
                                complete.
  (g) Exemptions.--The Commission may exempt, conditionally or 
unconditionally, a swap execution facility from registration 
under this section if the Commission finds that the facility is 
subject to comparable, comprehensive supervision and regulation 
on a consolidated basis by the Securities and Exchange 
Commission, a prudential regulator, or the appropriate 
governmental authorities in the home country of the facility.
  (h) Rules.--The Commission shall prescribe rules governing 
the regulation of [alternative] swap execution facilities under 
this section.
  Sec. 6. (a) Any person desiring to be designated [or 
registered] as a contract market [or derivatives transaction 
execution facility] shall make application to the Commission 
for the designation [or registration] and accompany the same 
with a showing that it complies with the conditions set forth 
in this Act, and with a sufficient assurance that it will 
continue to comply with [the the] the requirements of this Act. 
The Commission shall approve or deny an application for 
designation [or registration] as a contract market [or 
derivatives transaction execution facility] within 180 days of 
the filing of the application. If the Commission notifies the 
person that its application is materially incomplete and 
specifies the deficiencies in the application, the running of 
the 180-day period shall be stayed from the time of such 
notification until the application is resubmitted in completed 
form: Provided, That the Commission shall have not less than 
sixty days to approve or deny the application from the time the 
application is resubmitted in completed form. If the Commission 
denies an application, it shall specify the grounds for the 
denial. In the event of a refusal to designate or register as a 
contract market [or derivatives transaction execution facility] 
any person that has made application therefor, the person shall 
be afforded an opportunity for a hearing on the record before 
the Commission, with the right to appeal an adverse decision 
after such hearing to the court of appeals as provided for in 
other cases in subsection (b) of this section.
  (b) The Commission is authorized to suspend for a period not 
to exceed 6 months or to revoke the designation [or 
registration] of any contract market [or derivatives 
transaction execution facility] on a showing that the contract 
market [or derivatives transaction execution facility] is not 
enforcing or has not enforced its rules of government, made a 
condition of its designation [or registration] as set forth in 
sections 5 through 5b or section 5f, or that the contract 
market [or derivatives transaction execution facility or 
electronic trading facility], or any director, officer, agent, 
or employee thereof, otherwise is violating or has violated any 
of the provisions of this Act or any of the rules, regulations, 
or orders of the Commission thereunder. Such suspension or 
revocation shall only be made after a notice to the officers of 
the contract market [or derivatives transaction execution 
facility or electronic trading facility] affected and upon a 
hearing on the record: Provided, That such suspension or 
revocation shall be final and conclusive, unless within fifteen 
days after such suspension or revocation by the Commission such 
person appeals to the court of appeals for the circuit in which 
it has its principal place of business, by filing with the 
clerk of such court a written petition praying that the order 
of the Commission be set aside or modified in the manner stated 
in the petition, together with a bond in such sum as the court 
may determine, conditioned that such person will pay the costs 
of the proceedings if the court so directs. The clerk of the 
court in which such a petition is filed shall immediately cause 
a copy thereof to be delivered to the Commission and file in 
the court the record in such proceedings, as provided in 
section 2112 of title 28, United States Code. The testimony and 
evidence taken or submitted before the Commission, duly filed 
as aforesaid as a part of the record, shall be considered by 
the court of appeals as the evidence in the case. Such a court 
may affirm or set aside the order of the Commission or may 
direct it to modify its order. No such order of the Commission 
shall be modified or set aside by the court of appeals unless 
it is shown by the person that the order is unsupported by the 
weight of the evidence or was issued without due notice and a 
reasonable opportunity having been afforded to such person for 
a hearing, or infringes the Constitution of the United States, 
or is beyond the jurisdiction of the Commission.
  (c) Prohibition Regarding Manipulation and False 
Information.--
          (1) Prohibition against manipulation.--It shall be 
        unlawful for any person, directly or indirectly, to use 
        or employ, or attempt to use or employ, in connection 
        with any swap, or a contract of sale of any commodity 
        in interstate commerce, or for future delivery on or 
        subject to the rules of any registered entity, any 
        manipulative or deceptive device or contrivance, in 
        contravention of such rules and regulations as the 
        Commission shall promulgate by not later than 1 year 
        after the date of enactment of the Dodd-Frank Wall 
        Street Reform and Consumer Protection Act, provided no 
        rule or regulation promulgated by the Commission shall 
        require any person to disclose to another person 
        nonpublic information that may be material to the 
        market price, rate, or level of the commodity 
        transaction, except as necessary to make any statement 
        made to the other person in or in connection with the 
        transaction not misleading in any material respect.
                  (A) Special provision for manipulation by 
                false reporting.--Unlawful manipulation for 
                purposes of this paragraph shall include, but 
                not be limited to, delivering, or causing to be 
                delivered for transmission through the mails or 
                interstate commerce, by any means of 
                communication whatsoever, a false or misleading 
                or inaccurate report concerning crop or market 
                information or conditions that affect or tend 
                to affect the price of any commodity in 
                interstate commerce, knowing, or acting in 
                reckless disregard of the fact that such report 
                is false, misleading or inaccurate.
                  (B) Effect on other law.--Nothing in this 
                paragraph shall affect, or be construed to 
                affect, the applicability of section 9(a)(2).
                  (C) Good faith mistakes.--Mistakenly 
                transmitting, in good faith, false or 
                misleading or inaccurate information to a price 
                reporting service would not be sufficient to 
                violate subsection (c)(1)(A).
          (2) Prohibition regarding false information.--It 
        shall be unlawful for any person to make any false or 
        misleading statement of a material fact to the 
        Commission, including in any registration application 
        or any report filed with the Commission under this Act, 
        or any other information relating to a swap, or a 
        contract of sale of a commodity, in interstate 
        commerce, or for future delivery on or subject to the 
        rules of any registered entity, or to omit to state in 
        any such statement any material fact that is necessary 
        to make any statement of a material fact made not 
        misleading in any material respect, if the person knew, 
        or reasonably should have known, the statement to be 
        false or misleading.
          (3) Other manipulation.--In addition to the 
        prohibition in paragraph (1), it shall be unlawful for 
        any person, directly or indirectly, to manipulate or 
        attempt to manipulate the price of any swap, or of any 
        commodity in interstate commerce, or for future 
        delivery on or subject to the rules of any registered 
        entity.
          (4) Enforcement.--
                  (A) Authority of commission.--If the 
                Commission has reason to believe that any 
                person (other than a registered entity) is 
                violating or has violated this subsection, or 
                any other provision of this Act (including any 
                rule, regulation, or order of the Commission 
                promulgated in accordance with this subsection 
                or any other provision of this Act), the 
                Commission may serve upon the person a 
                complaint.
                  (B) Contents of complaint.--A complaint under 
                subparagraph (A) shall--
                          (i) contain a description of the 
                        charges against the person that is the 
                        subject of the complaint; and
                          (ii) have attached or contain a 
                        notice of hearing that specifies the 
                        date and location of the hearing 
                        regarding the complaint.
                  (C) Hearing.--A hearing described in 
                subparagraph (B)(ii)--
                          (i) shall be held not later than 3 
                        days after service of the complaint 
                        described in subparagraph (A);
                          (ii) shall require the person to show 
                        cause regarding why--
                                  (I) an order should not be 
                                made--
                                          (aa) to prohibit the 
                                        person from trading on, 
                                        or subject to the rules 
                                        of, any registered 
                                        entity; and
                                          (bb) to direct all 
                                        registered entities to 
                                        refuse all privileges 
                                        to the person until 
                                        further notice of the 
                                        Commission; and
                                  (II) the registration of the 
                                person, if registered with the 
                                Commission in any capacity, 
                                should not be suspended or 
                                revoked; and
                          (iii) may be held before--
                                  (I) the Commission; or
                                  (II) an administrative law 
                                judge designated by the 
                                Commission, under which the 
                                administrative law judge shall 
                                ensure that all evidence is 
                                recorded in written form and 
                                submitted to the Commission.
          (5) Subpoena.--For the purpose of securing effective 
        enforcement of the provisions of this Act, for the 
        purpose of any investigation or proceeding under this 
        Act, and for the purpose of any action taken under 
        section 12(f), any member of the Commission or any 
        Administrative Law Judge or other officer designated by 
        the Commission (except as provided in paragraph (7)) 
        may administer oaths and affirmations, subpoena 
        witnesses, compel their attendance, take evidence, and 
        require the production of any books, papers, 
        correspondence, memoranda, or other records that the 
        Commission deems relevant or material to the inquiry.
          (6) Witnesses.--The attendance of witnesses and the 
        production of any such records may be required from any 
        place in the United States, any State, or any foreign 
        country or jurisdiction at any designated place of 
        hearing.
          (7) Service.--A subpoena issued under this section 
        may be served upon any person who is not to be found 
        within the territorial jurisdiction of any court of the 
        United States in such manner as the Federal Rules of 
        Civil Procedure prescribe for service of process in a 
        foreign country, except that a subpoena to be served on 
        a person who is not to be found within the territorial 
        jurisdiction of any court of the United States may be 
        issued only on the prior approval of the Commission.
          (8) Refusal to obey.--In case of contumacy by, or 
        refusal to obey a subpoena issued to, any person, the 
        Commission may invoke the aid of any court of the 
        United States within the jurisdiction in which the 
        investigation or proceeding is conducted, or where such 
        person resides or transacts business, in requiring the 
        attendance and testimony of witnesses and the 
        production of books, papers, correspondence, memoranda, 
        and other records. Such court may issue an order 
        requiring such person to appear before the Commission 
        or member or Administrative Law Judge or other officer 
        designated by the Commission, there to produce records, 
        if so ordered, or to give testimony touching the matter 
        under investigation or in question.
          (9) Failure to obey.--Any failure to obey such order 
        of the court may be punished by the court as a contempt 
        thereof. All process in any such case may be served in 
        the judicial district wherein such person is an 
        inhabitant or transacts business or wherever such 
        person may be found.
          (10) Evidence.--On the receipt of evidence under 
        paragraph (4)(C)(iii), the Commission may--
                  (A) prohibit the person that is the subject 
                of the hearing from trading on, or subject to 
                the rules of, any registered entity and require 
                all registered entities to refuse the person 
                all privileges on the registered entities for 
                such period as the Commission may require in 
                the order;
                  (B) if the person is registered with the 
                Commission in any capacity, suspend, for a 
                period not to exceed 180 days, or revoke, the 
                registration of the person;
                  (C) assess such person--
                          (i) a civil penalty of not more than 
                        an amount equal to the greater of--
                                  (I) $140,000; or
                                  (II) triple the monetary gain 
                                to such person for each such 
                                violation; or
                          (ii) in any case of manipulation or 
                        attempted manipulation in violation of 
                        this subsection or section 9(a)(2), a 
                        civil penalty of not more than an 
                        amount equal to the greater of--
                                  (I) $1,000,000; or
                                  (II) triple the monetary gain 
                                to the person for each such 
                                violation; and
                  (D) require restitution to customers of 
                damages proximately caused by violations of the 
                person.
          (11) Orders.--
                  (A) Notice.--The Commission shall provide to 
                a person described in paragraph (10) and the 
                appropriate governing board of the registered 
                entity notice of the order described in 
                paragraph (10) by--
                          (i) registered mail;
                          (ii) certified mail; or
                          (iii) personal delivery.
                  (B) Review.--
                          (i) In general.--A person described 
                        in paragraph (10) may obtain a review 
                        of the order or such other equitable 
                        relief as determined to be appropriate 
                        by a court described in clause (ii).
                          (ii) Petition.--To obtain a review or 
                        other relief under clause (i), a person 
                        may, not later than 15 days after 
                        notice is given to the person under 
                        clause (i), file a written petition to 
                        set aside the order with the United 
                        States Court of Appeals--
                                  (I) for the circuit in which 
                                the petitioner carries out the 
                                business of the petitioner; or
                                  (II) in the case of an order 
                                denying registration, the 
                                circuit in which the principal 
                                place of business of the 
                                petitioner is located, as 
                                listed on the application for 
                                registration of the petitioner.
                  (C) Procedure.--
                          (i) Duty of clerk of appropriate 
                        court.--The clerk of the appropriate 
                        court under subparagraph (B)(ii) shall 
                        transmit to the Commission a copy of a 
                        petition filed under subparagraph 
                        (B)(ii).
                          (ii) Duty of commission.--In 
                        accordance with section 2112 of title 
                        28, United States Code, the Commission 
                        shall file in the appropriate court 
                        described in subparagraph (B)(ii) the 
                        record theretofore made.
                          (iii) Jurisdiction of appropriate 
                        court.--Upon the filing of a petition 
                        under subparagraph (B)(ii), the 
                        appropriate court described in 
                        subparagraph (B)(ii) may affirm, set 
                        aside, or modify the order of the 
                        Commission.
  (d) If any person (other than a registered entity), is 
violating or has violated subsection (c) or any other 
provisions of this Act or of the rules, regulations, or orders 
of the Commission thereunder, the Commission may, upon notice 
and hearing, and subject to appeal as in other cases provided 
for in subsection (c), make and enter an order directing that 
such person shall cease and desist therefrom and, if such 
person thereafter and after the lapse of the period allowed for 
appeal of such order or after the affirmance of such order, 
shall knowingly fail or refuse to obey or comply with such 
order, such person, upon conviction thereof, shall be fined not 
more than the higher of $140,000 or triple the monetary gain to 
such person, or imprisoned for not more than 1 year, or both, 
except that if such knowing failure or refusal to obey or 
comply with such order involves any offense within subsection 
(a) or (b) of section 9, such person, upon conviction thereof, 
shall be subject to the penalties of said subsection (a) or 
(b):  Provided, That any such cease and desist order under this 
subsection against any respondent in any case of manipulation 
shall be issued only in conjunction with an order issued 
against such respondent under subsection (c).
  (e)(1) In determining the amount of the money penalty 
assessed under subsection (c), the Commission shall consider 
the appropriateness of such penalty to the gravity of the 
violation.
  (2) Unless the person against whom a money penalty is 
assessed under subsection (c) shows to the satisfaction of the 
Commission within fifteen days from the expiration of the 
period allowed for payment of such penalty that either an 
appeal as authorized by subsection (c) has been taken or 
payment of the full amount of the penalty then due has been 
made, at the end of such fifteen-day period and until such 
person shows to the satisfaction of the Commission that payment 
of such amount with interest thereon to date of payment has 
been made--
          (A) such person shall be prohibited automatically 
        from the privileges of all registered entities; and
          (B) if such person is registered with the Commission, 
        such registration shall be suspended automatically.
  (3) If a person against whom a money penalty is assessed 
under subsection (c) takes an appeal and if the Commission 
prevails or the appeal is dismissed, unless such person shows 
to the satisfaction of the Commission that payment of the full 
amount of the penalty then due has been made by the end of 
thirty days from the date of entry of judgment on the appeal--
          (A) such person shall be prohibited automatically 
        from the privileges of all registered entities; and
          (B) if such person is registered with the Commission, 
        such registration shall be suspended automatically.
If the person against whom the money penalty is assessed fails 
to pay such penalty after the lapse of the period allowed for 
appeal or after the affirmance of such penalty, the Commission 
may refer the matter to the Attorney General who shall recover 
such penalty by action in the appropriate United States 
district court.
          (4) Any designated clearing organization that 
        knowingly or recklessly evades or participates in or 
        facilitates an evasion of the requirements of section 
        2(h) shall be liable for a civil money penalty in twice 
        the amount otherwise available for a violation of 
        section 2(h).
          (5) Any swap dealer or major swap participant that 
        knowingly or recklessly evades or participates in or 
        facilitates an evasion of the requirements of section 
        2(h) shall be liable for a civil money penalty in twice 
        the amount otherwise available for a violation of 
        section 2(h).
  (f)(1) Except as provided in paragraph (2), not later than 
six months after the effective date of rules promulgated by the 
Federal Trade Commission under section 3(a) of the 
Telemarketing and Consumer Fraud and Abuse Prevention Act, the 
Commission shall promulgate, or require each registered futures 
association to promulgate, rules substantially similar to such 
rules to prohibit deceptive and other abusive telemarketing 
acts or practices by any person registered or exempt from 
registration under this Act in connection with such person's 
business as a futures commission merchant, introducing broker, 
commodity trading advisor, commodity pool operator, leverage 
transaction merchant, floor broker, or floor trader, or a 
person associated with any such person.
  (2) The Commission is not required to promulgate rules under 
paragraph (1) if it determines that--
          (A) rules adopted by the Commission under this Act 
        provide protection from deceptive and abusive 
        telemarketing by persons described under paragraph (1) 
        substantially similar to that provided by rules 
        promulgated by the Federal Trade Commission under 
        section 3(a) of the Telemarketing and Consumer Fraud 
        and Abuse Prevention Act; or
          (B) such a rule promulgated by the Commission is not 
        necessary or appropriate in the public interest, or for 
        the pro- tection of customers in the futures and 
        options markets, or would be inconsistent with the 
        maintenance of fair and orderly markets.
If the Commission determines that an exception described in 
subparagraph (A) or (B) applies, the Commission shall publish 
in the Federal Register its determination with the reasons for 
it.
  (g) The Commission shall provide the Securities and Exchange 
Commission with notice of the commencement of any proceeding 
and a copy of any order entered by the Commission pursuant to 
subsections (c) and (d) of this section against any futures 
commission merchant or introducing broker registered pursuant 
to section 4f(a)(2), any floor broker or floor trader exempt 
from registration pursuant to section 4f(a)(3), any associated 
person exempt from registration pursuant to section 4k(6), or 
any board of trade designated as a contract market pursuant to 
section 5f.
  (h) Applicability to Activities Outside the United States.--
          (1) Applicability.--The provisions of this Act 
        prohibiting fraud, manipulation, attempted fraud, and 
        attempted manipulation, and providing for enforcement 
        by the Commission or the United States of such 
        prohibitions (including sections 4b, 4c(a)(1)-(4), 
        4c(a)(7), 4c(b), 4o, 4s(h)(1), 4s(h)(4), 6(c), 6(e)(1)-
        (3), 6c, 9(a), 9(c), 9(d), and 9(e), including any rule 
        or regulation promulgated thereunder), shall apply to 
        activities outside the United States where such 
        activities, independently or in conjunction with 
        activities in the United States, have or would have a 
        reasonably foreseeable substantial effect within the 
        United States.
          (2) Effect on other authority.--Nothing in this 
        subsection affects the application or interpretation 
        of, or liability under, any other provision of this 
        Act, including section 22.
  Sec. 6a. (a) No board of trade which has been designated [or 
registered] as a contract market [or a derivatives transaction 
execution facility] shall exclude from membership in, and all 
privileges on, such board of trade, any association or 
corporation engaged in cash commodity business having adequate 
financial responsibility which is organized under the 
cooperative laws of any State, or which has been recognized as 
a cooperative association of producers by the United States 
Government or by any agency thereof, if such association or 
corporation complies and agrees to comply with such terms and 
conditions as are or may be imposed lawfully upon other members 
of such board, and as are or may be imposed lawfully upon a 
cooperative association of producers engaged in cash commodity 
business, unless such board of trade is authorized by the 
Commission to exclude such association or corporation from 
membership and privileges after hearing held upon at least 
three days' notice subsequent to the filing of complaint by the 
board of trade: Provided, however, That if any such association 
or corporation shall fail to meet its obligations with any 
established clearing house or clearing agency of any contract 
market, such association or corporation shall be ipso facto 
debarred from further trading on such contract market, except 
such trading as may be necessary to close open trades and to 
discharge existing contracts in accordance with the rules of 
such contract market applicable in such cases. Such Commission 
may prescribe that such association or corporation shall have 
and retain membership and privileges, with or without imposing 
conditions, or it may permit such board of trade immediately to 
bar such association or corporation from membership and 
privileges. Any order of said Commission entered hereunder 
shall be reviewable by the court of appeals for the circuit in 
which such association or corporation, or such board of trade, 
has its principal place of business, on written petition either 
of such association or corporation, or of such board of trade, 
under the procedure provided in section 6(b) of this Act, but 
such order shall not be stayed by the court pending review.
  (b) No rule of any board of trade designated [or registered] 
as a contract market [or a derivatives transaction execution 
facility] shall forbid or be construed to forbid the payment of 
compensation on a commodity-unit basis, or otherwise, by any 
federated cooperative association to its regional member-
associations for services rendered or to be rendered in 
connection with any organization work, educational activity, or 
procurement of patronage, provided no part of any such 
compensation is returned to patrons (whether members or 
nonmembers) of such cooperative association, or of its regional 
or local member-associations, otherwise than as a dividend on 
capital stock or as a patronage dividend out of the net 
earnings or surplus of such federated cooperative association.
  Sec. 6b. If any registered entity is not enforcing or has not 
enforced its rules of government made a condition of its 
designation or registration as set forth in sections 5 through 
5c or section 5h, or if any registered entity, or any director, 
officer, agent, or employee of any registered entity otherwise 
is violating or has violated any of the provisions of this Act 
or any of the rules, regulations, or orders of the Commission 
thereunder, the Commission may, upon notice and hearing on the 
record and subject to appeal as in other cases provided for in 
section 6(b) of this Act, make and enter an order directing 
that such registered entity, director, officer, agent, or 
employee shall cease and desist from such violation, and assess 
a civil penalty of not more than $500,000 for each such 
violation, or, in any case of manipulation or attempted 
manipulation in violation of section 6(c), 6(d), or 9(a)(2), a 
civil penalty of not more than $1,000,000 for each such 
violation. If such registered entity, director, officer, agent, 
or employee, after the entry of such a cease and desist order 
and the lapse of the period allowed for appeal of such order or 
after the affirmance of such order, shall fail or refuse to 
obey or comply with such order, such registered entity, 
director, officer, agent, or employee shall be guilty of a 
misdemeanor and, upon conviction thereof, shall be fined not 
more than $500,000 or imprisoned for not less than six months 
nor more than one year, or both, except that if the failure or 
refusal to obey or comply with the order involved any offense 
under section 9(a)(2), the registered entity, director, 
officer, agent, or employee shall be guilty of a felony and, on 
conviction, shall be subject to penalties under section 
9(a)(2). Each day during which such failure or refusal to obey 
such cease and desist order continues shall be deemed a 
separate offense. If the offending registered entity or other 
person upon whom such penalty is imposed, after the lapse of 
the period allowed for appeal or after the affirmance of such 
penalty, shall fail to pay such penalty, the Commission shall 
refer the matter to the Attorney General who shall recover such 
penalty by action in the appropriate United States district 
court. In determining the amount of the money penalty assessed 
under this section, the Commission shall consider the gravity 
of the offense, and in the case of a registered entity shall 
further consider whether the amount of the penalty will 
materially impair the ability of the registered entity to carry 
on its operations and duties.

           *       *       *       *       *       *       *

  Sec. 6d. (1) Whenever it shall appear to the attorney general 
of any State, the administrator of the securities laws of any 
State, or such other official as a State may designate, that 
the interests of the residents of that State have been, are 
being, or may be threatened or adversely affected because any 
person (other than a contract market, [derivatives transaction 
execution facility,] clearinghouse, floor broker, or floor 
trader) has engaged in, is engaging or is about to engage in, 
any act or practice constituting a violation of any provision 
of this Act or any rule, regulation, or order of the Commission 
thereunder, the State may bring a suit in equity or an action 
at law on behalf of its residents to enjoin such act or 
practice, to enforce compliance with this Act, or any rule, 
regulation, or order of the Commission thereunder, to obtain 
damages on behalf of their residents, or to obtain such further 
and other relief as the court may deem appropriate.
  (2) The district courts of the United States, the United 
States courts of any territory, and the District Court of the 
United States for the District of Columbia, shall have 
jurisdiction of all suits in equity and actions at law brought 
under this section to enforce any liability or duty created by 
this Act or any rule, regulation, or order of the Commission 
thereunder, or to obtain damages or other relief with respect 
thereto. Upon proper application, such courts shall also have 
jurisdiction to issue writs of mandamus, or orders affording 
like relief, commanding the defendant to comply with the 
provisions of this Act, or any rule, regulation, or order of 
the Commission thereunder, including the requirement that the 
defendant take such action as is necessary to remove the danger 
of violation of this Act or of any such rule, regulation, or 
order. Upon a proper showing, a permanent or temporary 
injunction or restraining order shall be granted without bond.
  (3) Immediately upon instituting any such suit or action, the 
State shall serve written notice thereof upon the Commission 
and provide the Commission with a copy of its complaint, and 
the Commission shall have the right to (A) intervene in the 
suit or action and, upon doing so, shall be heard on all 
matters arising therein, and (B) file petitions for appeal.
  (4) Any suit or action brought under this section in a 
district court of the United States may be brought in the 
district wherein the defendant is found or is an inhabitant or 
transacts business or wherein the act or practice occurred, is 
occurring, or is about to occur, and process in such cases may 
be served in any district in which the defendant is an 
inhabitant or wherever the defendant may be found.
  (5) For purposes of bringing any suit or action under this 
section, nothing in this Act shall prevent the attorney 
general, the administrator of the State securities laws, or 
other duly authorized State officials from exercising the 
powers conferred on them by the laws of such State to conduct 
investigations or to administer oaths or affirmations or to 
compel the attendance of witnesses or the production of 
documentary and other evidence.
  (6) For purposes of this section ``State'' means any State of 
the United States, the District of Columbia, the Commonwealth 
of Puerto Rico, or any territory or possession of the United 
States.
  (7) Nothing contained in this section shall prohibit an 
authorized State official from proceeding in State court on the 
basis of an alleged violation of any general civil or criminal 
antifraud statute of such State.
  (8)(A) Nothing in this Act shall prohibit an authorized State 
official from proceeding in a State court against any person 
registered under this Act (other than a floor broker, floor 
trader, or registered futures association) for an alleged 
violation of any antifraud provision of this Act or any 
antifraud rule, regulation, or order issued pursuant to the 
Act.
  (B) The State shall give the Commission prior written notice 
of its intent to proceed before instituting a proceeding in 
State court as described in this subsection and shall furnish 
the Commission with a copy of its complaint immediately upon 
instituting any such proceeding. The Commission shall have the 
right to (i) intervene in the proceeding and, upon doing so, 
shall be heard on all matters arising therein, and (ii) file a 
petition for appeal. The Commission or the defendant may remove 
such proceeding to the district court of the United States for 
the proper district by following the procedure for removal 
otherwise provided by law, except that the petition for removal 
shall be filed within sixty days after service of the summons 
and complaint upon the defendant. The Commission shall have the 
right to appear as amicus curiae in any such proceeding.

           *       *       *       *       *       *       *

  Sec. 8. (a)(1) For the efficient execution of the provisions 
of this Act, and in order to provide information for the use of 
Congress, the Commission may make such investigations as it 
deems necessary to ascertain the facts regarding the operations 
of boards of trade and other persons subject to the provisions 
of this Act. The Commission may publish from time to time the 
results of any such investigation and such general statistical 
information gathered therefrom as it deems of interest to the 
public: Provided, That except as otherwise specifically 
authorized in this Act, the Commission may not publish data and 
information that would separately disclose the business 
transactions or market positions of any person and trade 
secrets or names of customers: Provided further, That the 
Commission may withhold from public disclosure any data or 
information concerning or obtained in connection with any 
pending investigation of any person. The Commission shall not 
be compelled to disclose any information or data obtained from 
a foreign futures authority if--
          (A) the foreign futures authority has in good faith 
        determined and represented to the Commission that 
        disclosure of such information or data by that foreign 
        futures authority would violate the laws applicable to 
        that foreign futures authority; and
          (B) the Commission obtains such information pursuant 
        to--
                  (i) such procedure as the Commission may 
                authorize for use in connection with the 
                administration or enforcement of this Act; or
                  (ii) a memorandum of understanding with that 
                foreign futures authority;
        except that nothing in this subsection shall prevent 
        the Commission from disclosing publicly any information 
        or data obtained by the Commission from a foreign 
        futures authority when such disclosure is made in 
        connection with a congressional proceeding, an 
        administrative or judicial proceeding commenced by the 
        United States or the Commission, in any receivership 
        proceeding involving a receiver appointed in a judicial 
        proceeding commenced by the United States or the 
        Commission, or in any proceeding under title 11 of the 
        United States Code in which the Commission has 
        intervened or in which the Commission has the right to 
        appear and be heard. Nothing in this subsection shall 
        be construed to authorize the Commission to withhold 
        information or data from Congress. For purposes of 
        section 552 of title 5, United States Code, this 
        subsection shall be considered a statute described in 
        subsection (b)(3)(B) of section 552.
  (2) In conducting investigations authorized under this 
subsection or any other provision of this Act, the Commission 
shall continue, as the Commission determines necessary, to 
request the assistance of and cooperate with the appropriate 
Federal agencies in the conduct of such investigations, 
including undercover operations by such agencies. The 
Commission and the Department of Justice shall assess the 
effectiveness of such undercover operations and, within two 
years of the date of enactment of the Futures Trading Practices 
Act of 1992, shall recommend to Congress any additional 
undercover or other authority for the Commission that the 
Commission or the Department of Justice believes to be 
necessary.
  (3) The Commission shall provide the Securities and Exchange 
Commission with notice of the commencement of any proceeding 
and a copy of any order entered by the Commission against any 
futures commission merchant or introducing broker registered 
pursuant to section 4f(a)(2), any floor broker or floor trader 
exempt from registration pursuant to section 4f(a)(3), any 
associated person exempt from registration pursuant to section 
4k(6), or any board of trade designated as a contract market 
pursuant to section 5f.
  (b) The Commission may disclose publicly any data or 
information that would separately disclose the market 
positions, business transactions, trade secrets, or names of 
customers of any person when such disclosure is made in 
connection with a congressional proceeding, in 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. This subsection shall 
not apply to the disclosure of data or information obtained by 
the Commission from a foreign futures authority.
  (c) The Commission may make or issue such reports as it deems 
necessary, or such opinions or orders as may be required under 
other provisions of law, relative to the conduct of any 
registered entity or to the transactions of any person found 
guilty of violating the provisions of this Act or the rules, 
regulations, or orders of the Commission thereunder in 
proceedings brought under section 6 of this Act. In any such 
report or opinion, the Commission may set forth the facts as to 
any actual transaction or any information referred to in 
subsection (b) of this section, if such facts or information 
have previously been disclosed publicly in connection with a 
congressional proceeding, or in an administrative or judicial 
proceeding brought under this Act.
  (d) The Commission, upon its own initiative or in cooperation 
with existing governmental agencies, shall investigate the 
marketing conditions of commodities and commodity products and 
byproducts, including supply and demand for these commodities, 
cost to the consumer, and handling and transportation charges. 
It shall also compile and furnish to producers, consumers, and 
distributors, by means of regular or special reports, or by 
such other methods as it deems most effective, information 
respecting the commodity markets, together with information on 
supply, demand, prices, and other conditions in this and other 
countries that affect the markets.
  [(e) The Commission may disclose and make public, where such 
information has previously been disclosed publicly in 
accordance with the provisions of this section, the names and 
addresses of all traders on the boards of trade on the 
commodity markets with respect to whom the Commission has 
information, and any other information in the possession of the 
Commission relating to the amount of commodities purchased or 
sold by each such trader. Upon the request of any committee of 
either House of Congress, acting within the scope of its 
jurisdiction, the Commission shall furnish to such committee 
the names and addresses of all traders on such boards of trade 
with respect to whom the Commission has information, and any 
other information in the possession of the Commission relating 
to the amount of any commodity purchased or sold by each such 
trader. Upon the request of any department or agency of the 
Government of the United States, acting within the scope of its 
jurisdiction, the Commission may furnish to such department or 
agency any information in the possession of the Commission 
obtained in connection with the administration of this Act. 
However, any information furnished under this subsection to any 
Federal department or agency shall not be disclosed by such 
department or agency except in any action or proceeding under 
the laws of the United States to which it, the Commission, or 
the United States is a party. Upon the request of any 
department or agency of any State or any political subdivision 
thereof, acting within the scope of its jurisdiction, any 
foreign futures authority, or any department or agency of any 
foreign government or any political subdivision thereof, acting 
within the scope of its jurisdiction, the Commission may 
furnish to such foreign futures authority, department or agency 
any information in the possession of the Commission obtained in 
connection with the administration of this Act. Any information 
furnished to any department or agency of any State or political 
subdivision thereof shall not be disclosed by such department 
or agency except in connection with an adjudicatory action or 
proceeding brought under this Act or the laws of such State or 
political subdivision to which such State or political 
subdivision or any department or agency thereof is a party. The 
Commission shall not furnish any information to a foreign 
futures authority or to a department, central bank and 
ministries, or agency of a foreign government or political 
subdivision thereof unless the Commission is satisfied that the 
information will not be disclosed by such foreign futures 
authority, department, central bank and ministries, or agency 
except in connection with an adjudicatory action or proceeding 
brought under the laws of such foreign government or political 
subdivision to which such foreign government or political 
subdivision or any department or agency thereof, or foreign 
futures authority is a party.]
  (e) Disclosure Authorities.--
          (1) In general.--
                  (A) Previously disclosed.--The Commission may 
                disclose and make public, where such 
                information has previously been disclosed 
                publicly in accordance with the provisions of 
                this section, the names and addresses of all 
                traders on the boards of trade on the commodity 
                markets with respect to whom the Commission has 
                information, and any other information in the 
                possession of the Commission relating to the 
                amount of commodities purchased or sold by each 
                such trader.
                  (B) Congressional access.--Upon the request 
                of any committee of either House of Congress, 
                acting within the scope of its jurisdiction, 
                the Commission shall furnish to the committee 
                the names and addresses of all traders on the 
                boards of trade with respect to whom the 
                Commission has information, and any other 
                information in the possession of the Commission 
                relating to the amount of any commodity 
                purchased or sold by each such trader.
          (2) Domestic agencies.--
                  (A) In general.--Upon the request of any 
                department or agency of the Government of the 
                United States, acting within the scope of its 
                jurisdiction, the Commission may furnish to the 
                department or agency any information in the 
                possession of the Commission obtained in 
                connection with the administration of this Act.
                  (B) Conditions.--Any information furnished 
                under this paragraph to any Federal department 
                or agency shall not be disclosed by the 
                department or agency except in any action or 
                proceeding under the laws of the United States 
                to which the department or agency, the 
                Commission, or the United States is a party.
                  (C) Federal reserve banks.--In this 
                paragraph, the term ``agency'' includes the 
                Federal Reserve Banks.
          (3) State agencies.--
                  (A) In general.--Upon the request of any 
                department or agency of any State or any 
                political subdivision thereof, acting within 
                the scope of its jurisdiction, the Commission 
                may furnish to the department, agency, or 
                political subdivision any information in the 
                possession of the Commission obtained in 
                connection with the administration of this Act.
                  (B) Conditions.--Any information furnished to 
                any department or agency of any State or 
                political subdivision thereof shall not be 
                disclosed by the department or agency except in 
                connection with an adjudicatory action or 
                proceeding under this Act or the laws of the 
                State or political subdivision to which the 
                State, political subdivision, department, or 
                agency is a party.
          (4) Foreign agencies.--
                  (A) In general.--Upon the request of any 
                foreign futures authority, or any department, 
                central bank, ministry, or agency of any 
                foreign government or any political subdivision 
                thereof, acting within the scope of its 
                jurisdiction, the Commission may furnish to the 
                foreign futures authority, department, central 
                bank, ministry, agency of any foreign 
                government, or any political subdivision 
                thereof, any information in the possession of 
                the Commission obtained in connection with the 
                administration of this Act.
                  (B) Conditions.--The Commission shall not 
                furnish any information to a foreign futures 
                authority or to a department, central bank, 
                ministry, or agency of a foreign government or 
                political subdivision thereof, unless the 
                Commission is satisfied that the information 
                will not be disclosed by the foreign futures 
                authority, department, central bank, ministry, 
                or agency of any foreign government or any 
                political subdivision thereof, except in 
                connection with an adjudicatory action or 
                proceeding under the laws of the foreign 
                government or political subdivision to which 
                the foreign government, political subdivision, 
                department, agency, central bank, ministry, or 
                foreign futures authority is a party.
  (f) The Commission shall disclose information in its 
possession pursuant to a subpoena or summons only if--
          (1) a copy of the subpoena or summons has been mailed 
        to the last known home or business address of the 
        person who submitted the information that is the 
        subject of the subpoena or summons, if the address is 
        known to the Commission, or, if such mailing would be 
        unduly burdensome, the Commission provides other 
        appropriate notice of the subpoena or summons to such 
        person, and
          (2) at least fourteen days have expired from the date 
        of such mailing of the subpoena or summons, or such 
        other notice.
This subsection shall not apply to congressional subpoenas or 
congressional requests for information.
  (g) The Commission shall provide any registration information 
maintained by the Commission on any registrant upon reasonable 
request made by any department or agency of any State or any 
political subdivision thereof. Whenever the Commission 
determines that such information may be appropriate for use by 
any department or agency of a State or political subdivision 
thereof, the Commission shall provide such information without 
request.
  (h) Sharing Privileged Information With Other Authorities.--
          (1) Privilege definition.--The term ``privilege'' 
        includes any applicable work-product privilege, 
        attorney-client privilege, governmental privilege, or 
        other privilege recognized under Federal, State, or 
        foreign law.
          (2) Privileged information provided by the 
        commission.--The Commission shall not be considered to 
        have waived any privilege by transferring information 
        to or permitting that information to be used in 
        accordance with section 8a(6) or paragraphs (2), (3), 
        and (4) of subsection (e) of this section.
          (3) Nondisclosure of privileged information provided 
        to the commission.--The Commission shall not be 
        compelled to disclose privileged information obtained 
        from any foreign futures authority if the authority has 
        in good faith determined and represented to the 
        Commission that the information is privileged, except 
        as provided for in subsection (a)(1).
          (4) Nonwaiver of privileged information provided to 
        the commission.--
                  (A) In general.--The entities listed in 
                paragraphs (2), (3), and (4) of subsection (e) 
                and section 8(a)(6) shall not be considered to 
                have waived any privilege by transferring 
                information to or permitting information to be 
                used by the Commission.
                  (B) Exception.--Subparagraph (A) shall not 
                apply to an entity listed in section 8a(6) with 
                respect to information obtained by the 
                Commission in an investigation relating to or 
                in any action against the entity.
          (5) Rule of construction.--Nothing in this subsection 
        shall authorize the Commission to withhold information 
        from the Congress or prevent the Commission from 
        complying with an order of a court of the United States 
        in an action commenced by the United States or the 
        Commission.
  [(h)] (i) The Commission shall submit to Congress a written 
report within one hundred and twenty days after the end of each 
fiscal year detailing the operations of the Commission during 
such fiscal year. The Commission shall include in such report 
such information, data, and legislative recommendations as it 
deems advisable with respect to the administration of this Act 
and its powers and functions under this Act.
  [(i)] (j) The Comptroller General of the United States shall 
conduct reviews and audits of the Commission and make reports 
thereon. For the purpose of conducting such reviews and audits, 
the Comptroller General shall be furnished such information 
regarding the powers, duties, organizations, transactions, 
operations, and activities of the Commission as the Comptroller 
General may require and the Comptroller General and the duly 
authorized representatives of the Comptroller General shall, 
for the purpose of securing such information, have access to 
and the right to examine any books, documents, papers, or 
records of the Commission, except that in reports the 
Comptroller General shall not include data and information that 
would separately disclose the business transactions of any 
person and trade secrets or names of customers, although such 
data shall be provided upon request by any committee of either 
House of Congress acting within the scope of its jurisdiction.
  (k) Proprietary Information.--
          (1) In general.--For any proprietary information 
        provided to the Commission, the Commission may, in its 
        discretion, after notice and comment, adopt rules and 
        regulations to apply any of the provisions of this 
        section to such information it obtains or receives, as 
        it deems necessary, to the extent such information is 
        not already covered by the provisions of this section.
          (2) Policies.--With regard to proprietary information 
        it obtains or receives, the Commission shall adopt 
        policies, as determined by the Commission, after notice 
        and comment, to--
                  (A) address circumstances when the Commission 
                requests proprietary information;
                  (B) safeguard the information, taking into 
                consideration the level of sensitivity of the 
                information;
                  (C) limit access to the information to 
                appropriate staff, as determined by the 
                Commission; and
                  (D) protect the information from unlawful use 
                or disclosure.
          (3) Sharing.--To the extent the Commission adopts 
        rules or regulations, pursuant to paragraph (1), 
        regarding the sharing of such proprietary information 
        with other governmental entities, the Commission shall 
        receive assurances that such other governmental entity 
        shall maintain sufficient safeguards consistent with--
                  (A) policies that achieve the objectives of 
                subparagraphs (B), (C), and (D) of paragraph 
                (2) of this subsection; and
                  (B) the limitations set forth in paragraphs 
                (2), (3), and (4) of subsection (e) concerning 
                the confidentiality of any such information 
                received.
  Sec. 8a. The Commission is authorized--
          (1) to register futures commission merchants, 
        associated persons of futures commission merchants, 
        introducing brokers, associated persons of introducing 
        brokers, commodity trading advisors, associated persons 
        of commodity trading advisors, commodity pool 
        operators, associated persons of commodity pool 
        operators, floor brokers, and floor traders upon 
        application in accordance with rules and regulations 
        and in the form and manner to be prescribed by the 
        Commission, which may require the applicant, and such 
        persons associated with the applicant as the Commission 
        may specify, to be fingerprinted and to submit, or 
        cause to be submitted, such fingerprints to the 
        Attorney General for identification and appropriate 
        processing, and in connection therewith to fix and 
        establish from time to time reasonable fees and charges 
        for registrations and renewals thereof: Provided, That 
        notwithstanding any provision of this Act, the 
        Commission may grant a temporary license to any 
        applicant for registration with the Commission pursuant 
        to such rules, regulations, or orders as the Commission 
        may adopt, except that the term of any such temporary 
        license shall not exceed six months from the date of 
        its issuance;
          (2) upon notice, but without a hearing and pursuant 
        to such rules, regulations, or orders as the Commission 
        may adopt, to refuse to register, to register 
        conditionally, or to suspend or place restrictions upon 
        the registration of, any person and with such a hearing 
        as may be appropriate to revoke the registration of any 
        person--
                  (A) if a prior registration of such person in 
                any capacity has been suspended (and the period 
                of such suspension has not expired) or has been 
                revoked;
                  (B) if registration of such person in any 
                capacity has been refused under the provisions 
                of paragraph (3) of this section within five 
                years preceding the filing of the application 
                for registration or at any time thereafter;
                  (C) if such person is permanently or 
                temporarily enjoined by order, judgment, or 
                decree of any court of competent jurisdiction 
                (except that registration may not be revoked 
                solely on the basis of such temporary order, 
                judgment, or decree), including an order 
                entered pursuant to an agreement of settlement 
                to which the Commission or any Federal or State 
                agency or other governmental body is a party, 
                from (i) acting as a futures commission 
                merchant, introducing broker, floor broker, 
                floor trader, commodity trading advisor, 
                commodity pool operator, associated person of 
                any registrant under this Act, securities 
                broker, securities dealer, municipal securities 
                broker, municipal securities dealer, transfer 
                agent, clearing agency, securities information 
                processor, investment adviser, investment 
                company, or affiliated person or employee of 
                any of the foregoing or (ii) engaging in or 
                continuing any activity where such activity 
                involves embezzlement, theft, extortion, fraud, 
                fraudulent conversion, misappropriation of 
                funds, securities or property, forgery, 
                counterfeiting, false pretenses, bribery, 
                gambling, or any transaction in or advice 
                concerning contracts of sale of a commodity for 
                future delivery, concerning matters subject to 
                Commission regulation under section 4c or 19, 
                or concerning securities;
                  (D) if such person has been convicted within 
                ten years preceding the filing of the 
                application for registration or at any time 
                thereafter of any felony that (i) involves any 
                transactions or advice concerning any contract 
                of sale of a commodity for future delivery, or 
                any activity subject to Commission regulation 
                under section 4c or 19 of this Act, or 
                concerning a security, (ii) arises out of the 
                conduct of the business of a futures commission 
                merchant, introducing broker, floor broker, 
                floor trader, commodity trading advisor, 
                commodity pool operator, associated person of 
                any registrant under this Act, securities 
                broker, securities dealer, municipal securities 
                broker, municipal securities dealer, transfer 
                agent, clearing agency, securities information 
                processor, investment adviser, investment 
                company, or an affiliated person or employee of 
                any of the foregoing, (iii) involves 
                embezzlement, theft, extortion, fraud, 
                fraudulent conversion, misappropriation of 
                funds, securities or property, forgery, 
                counterfeiting, false pretenses, bribery, or 
                gambling, or (iv) involves the violation of 
                section 152, 1001, 1341, 1342, 1343, 1503, 
                1623, 1961, 1962, 1963, or 2314, or chapter 25, 
                47, 95, or 96 of title 18, United States Code, 
                or section 7201 or 7206 of the Internal Revenue 
                Code of 1986;
                  (E) if such person, within ten years 
                preceding the filing of the application or at 
                any time thereafter, has been found in a 
                proceeding brought by the Commission or any 
                Federal or State agency or other governmental 
                body, or by agreement of settlement to which 
                the Commission or any Federal or State agency 
                or other governmental body is a party, (i) to 
                have violated any provision of this Act, the 
                Securities Act of 1933, the Securities Exchange 
                Act of 1934, the Public Utility Holding Company 
                Act of 1935, the Trust Indenture Act of 1939, 
                the Investment Advisers Act of 1940, the 
                Investment Company Act of 1940, the Securities 
                [Investors] Investor Protection Act of 1970, 
                the Foreign Corrupt Practices Act of 1977, 
                chapter 96 of title 18 of the United States 
                Code, or any similar statute of a State or 
                foreign jurisdiction, or any rule, regulation, 
                or order under any such statutes, or the rules 
                of the Municipal Securities Rulemaking Board 
                where such violation involves embezzlement, 
                theft, extortion, fraud, fraudulent conversion, 
                misappropriation of funds, securities or 
                property, forgery, counterfeiting, false 
                pretenses, bribery, or gambling, or (ii) to 
                have willfully aided, abetted, counseled, 
                commanded, induced, or procured such violation 
                by any other person;
                  (F) if such person is subject to an 
                outstanding order of the Commission denying 
                privileges on any registered entity to such 
                person, denying, suspending, or revoking such 
                person's membership in any registered entity or 
                registered futures association, or barring or 
                suspending such person from being associated 
                with a registrant under this Act or with a 
                member of a registered entity or with a member 
                of a registered futures association;
                  (G) if, as to any of the matters set forth in 
                this paragraph and paragraph (3), such person 
                willfully made any materially false or 
                misleading statement or omitted to state any 
                material fact in such person's application or 
                any update thereto; or
                  (H) if refusal, suspension, or revocation of 
                the registration of any principal of such 
                person would be warranted because of a 
                statutory disqualification listed in this 
                paragraph:
         Provided, That such person may appeal from a decision 
        to refuse registration, condition registration, 
        suspend, revoke or to place restrictions upon 
        registration made pursuant to the provisions of this 
        paragraph in the manner provided in section 6(c) of 
        this Act; and
         Provided, further, That for the purposes of paragraphs 
        (2) and (3) of this section, ``principal'' shall mean, 
        if the person is a partnership, any general partner or, 
        if the person is a corporation, any officer, director, 
        or beneficial owner of at least 10 per centum of the 
        voting shares of the corporation, and any other person 
        that the Commission by rule, regulation, or order 
        determines has the power, directly or indirectly, 
        through agreement or otherwise, to exercise a 
        controlling influence over the activities of such 
        person which are subject to regulation by the 
        Commission;
          (3) to refuse to register or to register 
        conditionally any person, if it is found, after 
        opportunity for hearing, that--
                  (A) such person has been found by the 
                Commission or by any court of competent 
                jurisdiction to have violated, or has consented 
                to findings of a violation of, any provision of 
                this Act, or any rule, regulation, or order 
                thereunder (other than a violation set forth in 
                paragraph (2) of this section), or to have 
                willfully aided, abetted, counseled, commanded, 
                induced, or procured the violation by any other 
                person of any such provision;
                  (B) such person has been found by any court 
                of competent jurisdiction or by any Federal or 
                State agency or other governmental body, or by 
                agreement of settlement to which any Federal or 
                State agency or other governmental body is a 
                party, (i) to have violated any provision of 
                the Securities Act of 1933, the Securities 
                Exchange Act of 1934, the Public Utility 
                Holding Company Act of 1935, the Trust 
                Indenture Act of 1939, the Investment Advisers 
                Act of 1940, the Investment Company Act of 
                1940, the Securities [Investors] Investor 
                Protection Act of 1970, the Foreign Corrupt 
                Practices Act of 1977, or any similar statute 
                of a State or foreign jurisdiction, or any 
                rule, regulation, or order under any such 
                statutes, or the rules of the Municipal 
                Securities Rulemaking Board or (ii) to have 
                willfully aided, abetted, counseled, commanded, 
                induced, or procured such violation by any 
                other person;
                  (C) such person failed reasonably to 
                supervise another person, who is subject to 
                such person's supervision, with a view to 
                preventing violations of this Act, or of any of 
                the statutes set forth in subparagraph (B) of 
                this paragraph, or of any of the rules, 
                regulations, or orders thereunder, and the 
                person subject to supervision committed such a 
                violation: Provided, That no person shall be 
                deemed to have failed reasonably to supervise 
                another person, within the meaning of this 
                subparagraph if (i) there have been established 
                procedures, and a system for applying such 
                procedures, which would reasonably be expected 
                to prevent and detect, insofar as practicable, 
                any such violation by such other person and 
                (ii) such person has reasonably discharged the 
                duties and obligations incumbent upon that 
                person, as supervisor, by reason of such 
                procedures and system, without reasonable cause 
                to believe that such procedures and system were 
                not being complied with;
                  (D) such person pleaded guilty to or was 
                convicted of a felony other than a felony of 
                the type specified in paragraph (2)(D) of this 
                section, or was convicted of a felony of the 
                type specified in paragraph (2)(D) of this 
                section more than ten years preceding the 
                filing of the application;
                  (E) such person pleaded guilty to or was 
                convicted of any misdemeanor which (i) involves 
                any transaction or advice concerning any 
                contract of sale of a commodity for future 
                delivery or any activity subject to Commission 
                regulation under section 4c or 19 of this Act 
                or concerning a security, (ii) arises out of 
                the conduct of the business of a futures 
                commission merchant, introducing broker, floor 
                broker, floor trader, commodity trading 
                advisor, commodity pool operator, associated 
                person of any registrant under this Act, 
                securities broker, securities dealer, municipal 
                securities broker, municipal securities dealer, 
                transfer agent, clearing agency, securities 
                information processor, investment adviser, 
                investment company, or an affiliated person or 
                employee of any of the foregoing, (iii) 
                involves embezzlement, theft, extortion, fraud, 
                fraudulent conversion, misappropriation of 
                funds, securities or property, forgery, 
                counterfeiting, false pretenses, bribery, or 
                gambling, (iv) involves the violation of 
                section 152, 1341, 1342, or 1343 or chapter 25, 
                47, 95, or 96 of title 18, United States Code, 
                or section 7203, 7204, 7205, or 7207 of the 
                Internal Revenue Code of 1986;
                  (F) such person was debarred by any agency of 
                the United States from contracting with the 
                United States;
                  (G) such person willfully made any materially 
                false or misleading statement or willfully 
                omitted to state any material fact in such 
                person's application or any update thereto, in 
                any report required to be filed with the 
                Commission by this Act or the regulations 
                thereunder, in any proceeding before the 
                Commission or in any registration 
                disqualification proceeding;
                  (H) such person has pleaded nolo contendere 
                to criminal charges of felonious conduct, or 
                has been convicted in a State court, in a 
                United States military court, or in a foreign 
                court of conduct which would constitute a 
                felony under Federal law if the offense had 
                been committed under Federal jurisdiction;
                  (I) in the case of an applicant for 
                registration in any capacity for which there 
                are minimum financial requirements prescribed 
                under this Act or under the rules or 
                regulations of the Commission, such person has 
                not established that such person meets such 
                minimum financial requirements;
                  (J) such person is subject to an outstanding 
                order denying, suspending, or expelling such 
                person from membership in a registered entity, 
                a registered futures association, any other 
                self-regulatory organization, or any foreign 
                regulatory body that the Commission recognizes 
                as having a comparable regulatory program or 
                barring or suspending such person from being 
                associated with any member or members of such 
                registered entity, association, self-regulatory 
                organization, or foreign regulatory body;
                  (K) such person has been found by any court 
                of competent jurisdiction or by any Federal or 
                State agency or other governmental body, or by 
                agreement of settlement to which any Federal or 
                State agency or other governmental body is a 
                party, (i) to have violated any statute or any 
                rule, regulation, or order thereunder which 
                involves embezzlement, theft, extortion, fraud, 
                fraudulent conversion, misappropriation of 
                funds, securities or property, forgery, 
                counterfeiting, false pretenses, bribery, or 
                gambling or (ii) to have willfully aided, 
                abetted, counseled, commanded, induced or 
                procured such violation by any other person;
                  (L) such person has associated with such 
                person any other person and knows, or in the 
                exercise of reasonable care should know, of 
                facts regarding such other person that are set 
                forth as statutory disqualifications in 
                paragraph (2) of this section, unless such 
                person has notified the Commission of such 
                facts and the Commission has determined that 
                such other person should be registered or 
                temporarily licensed;
                  (M) there is other good cause; or
                  (N) any principal, as defined in paragraph 
                (2) of this section, of such person has been or 
                could be refused registration:
         Provided, That pending final determination under this 
        paragraph, registration shall not be granted: Provided 
        further, That such person may appeal from a decision to 
        refuse registration or to condition registration made 
        pursuant to this paragraph in the manner provided in 
        section 6(c) of this Act;
          (4) in accordance with the procedure provided for in 
        section 6(c) of this Act, to suspend, revoke, or place 
        restrictions upon the registration of any person 
        registered under this Act if cause exists under 
        paragraph (3) of this section which would warrant a 
        refusal of registration of such person, and to suspend 
        or revoke the registration of any futures commission 
        merchant or introducing broker who shall knowingly 
        accept any order for the purchase or sale of any 
        commodity for future delivery on or subject to the 
        rules of any registered entity from any person if such 
        person has been denied trading privileges on any 
        registered entity by order of the Commission under 
        section 6(c) of this Act and the period of denial 
        specified in such order shall not have expired: 
        Provided, That such person may appeal from a decision 
        to suspend, revoke, or place restrictions upon 
        registration made pursuant to this paragraph in the 
        manner provided in section 6(c) of this Act;
          (5) to make and promulgate such rules and regulations 
        as, in the judgment of the Commission, are reasonably 
        necessary to effectuate any of the provisions or to 
        accomplish any of the purposes of this Act;
          (6) to communicate to the proper committee or officer 
        of any registered entity, registered futures 
        association, or self-regulatory organization as defined 
        in section 3(a)(26) of the Securities Exchange Act of 
        1934, notwithstanding the provisions of section 8 of 
        this Act, the full facts concerning any transaction or 
        market operation, including the names of parties 
        thereto, which in the judgment of the Commission 
        disrupts or tends to disrupt any market or is otherwise 
        harmful or against the best interests of producers, 
        consumers, or investors, or which is necessary or 
        appropriate to effectuate the purposes of this Act: 
        Provided, That any information furnished by the 
        Commission under this paragraph shall not be disclosed 
        by such registered entity, registered futures 
        association, or self-regulatory organization except in 
        any self-regulatory action or proceeding;
          (7) to alter or supplement the rules of a registered 
        entity insofar as necessary or appropriate by rule or 
        regulation or by order, if after making the appropriate 
        request in writing to a registered entity that such 
        registered entity effect on its own behalf specified 
        changes in its rules and practices, and after 
        appropriate notice and opportunity for hearing, the 
        Commission determines that such registered entity has 
        not made the changes so required, and that such changes 
        are necessary or appropriate for the protection of 
        swaps traders and to assure fair dealing in swaps, for 
        the protection of persons producing, handling, 
        processing, or consuming any commodity traded for 
        future delivery on such registered entity, or the 
        product or byproduct thereof, or for the protection of 
        traders or to insure fair dealing in commodities traded 
        for future delivery on such registered entity. Such 
        rules, regulations, or orders may specify changes with 
        respect to such matters as--
                  (A) terms or conditions in swaps or contracts 
                of sale or swap contracts to be executed on or 
                subject to the rules of such registered entity;
                  (B) the form or manner of execution of 
                purchases and sales for future delivery or 
                swaps;
                  (C) other trading requirements;
                  (D) margin requirements, provided that the 
                rules, regulations, or orders shall--
                          (i) be limited to protecting the 
                        financial integrity of the derivatives 
                        clearing organization;
                          (ii) be designed for risk management 
                        purposes to protect the financial 
                        integrity of transactions; and
                          (iii) not set specific margin 
                        amounts;
                  (E) safeguards with respect to the financial 
                responsibility of members;
                  (F) the manner, method, and place of 
                soliciting business, including the content of 
                such solicitations; and
                  (G) the form and manner of handling, 
                recording, and accounting for customers' 
                orders, transactions, and accounts;
          (8) to make and promulgate such rules and regulations 
        with respect to those persons registered under this 
        Act, who are not members of a registered entity, as in 
        the judgment of the Commission are reasonably necessary 
        to protect the public interest and promote just and 
        equitable principles of trade, including but not 
        limited to the manner, method, and place of soliciting 
        business, including the content of such solicitation;
          (9) to direct the registered entity, whenever it has 
        reason to believe that an emergency exists, to take 
        such action as in the Commission's judgment is 
        necessary to maintain or restore orderly trading in or 
        liquidation of any swap or [futures contract] contract 
        of sale for future delivery or swap contract, 
        including, but not limited to, the setting of temporary 
        emergency margin levels on any swap or [futures 
        contract] contract of sale for future delivery or swap 
        contract, and the fixing of limits that may apply to a 
        market position acquired in good faith prior to the 
        effective date of the Commission's action. The term 
        ``emergency'' as used herein shall mean, in addition to 
        threatened or actual market manipulations and corners, 
        any act of the United States or a foreign government 
        affecting a commodity or any other major market 
        disturbance which prevents the market from accurately 
        reflecting the forces of supply and demand for such 
        commodity. Any action taken by the Commission under 
        this paragraph shall be subject to review only in the 
        United States Court of Appeals for the circuit in which 
        the party seeking review resides or has its principal 
        place of business, or in the United States Court of 
        Appeals for the District of Columbia Circuit. Such 
        review shall be based upon an examination of all the 
        information before the Commission at the time the 
        determination was made. The court reviewing the 
        Commission's action shall not enter a stay or order of 
        mandamus unless it has determined, after notice and 
        hearing before a panel of the court, that the agency 
        action complained of was arbitrary, capricious, an 
        abuse of discretion, or otherwise not in accordance 
        with law. Nothing herein shall be deemed to limit the 
        meaning or interpretation given by a registered entity 
        to the terms ``market emergency'', ``emergency'', or 
        equivalent language in its own bylaws, rules, 
        regulations, or resolutions;
          (10) to authorize any person to perform any portion 
        of the registration functions under this Act, in 
        accordance with rules, notwithstanding any other 
        provision of law, adopted by such person and submitted 
        to the Commission for approval or, if applicable, for 
        review pursuant to section 17(j) of this Act, and 
        subject to the provisions of this Act applicable to 
        registrations granted by the Commission; and
          (11)(A) by written notice served on the person and 
        pursuant to such rules, regulations, and orders as the 
        Commission may adopt, to suspend or modify the 
        registration of any person registered under this Act 
        who is charged (in any information, indictment, or 
        complaint authorized by a United States attorney or an 
        appropriate official of any State) with the commission 
        of or participation in a crime involving a violation of 
        this Act, or a violation of any other provision of 
        Federal or State law that would reflect on the honesty 
        or the fitness of the person to act as a fiduciary 
        (including an offense specified in subparagraph (D) or 
        (E) of paragraph (2)) that is punishable by 
        imprisonment for a term exceeding one year, if the 
        Commission determines that continued registration of 
        the person may pose a threat to the public interest or 
        may threaten to impair public confidence in any market 
        regulated by the Commission.
          (B) Prior to the suspension or modification of the 
        registration of a person under this paragraph, the 
        person shall be afforded an opportunity for a hearing 
        at which the Commission shall have the burden of 
        showing that the continued registration of the person 
        does, or is likely to, pose a threat to the public 
        interest or threaten to impair public confidence in any 
        market regulated by the Commission.
          (C) Any notice of suspension or modification issued 
        under this paragraph shall remain in effect until such 
        information, indictment, or complaint is disposed of or 
        until terminated by the Commission.
          (D) On disposition of such information, indictment, 
        or complaint, the Commission may issue and serve on 
        such person an order pursuant to paragraph (2) or (4) 
        to suspend, restrict, or revoke the registration of 
        such person.
          (E) A finding of not guilty or other disposition of 
        the charge shall not preclude the Commission from 
        thereafter instituting any other proceedings under this 
        Act.
          (F) A person aggrieved by an order issued under this 
        paragraph may obtain review of such order in the same 
        manner and on the same terms and conditions as are 
        provided in section 6(b).

           *       *       *       *       *       *       *

  Sec. 9. (a) It shall be a felony punishable by a fine of not 
more than $1,000,000 or imprisonment for not more than 10 
years, or both, together with the costs of prosecution, for:
          (1) Any person registered or required to be 
        registered under this Act, or any employee or agent 
        thereof, to embezzle, steal, purloin, or with criminal 
        intent convert to such person's use or to the use of 
        another, any money, securities, or property having a 
        value in excess of $100, which was received by such 
        person or any employee or agent thereof to margin, 
        guarantee, or secure the trades or contracts of any 
        customer or accruing to such customer as a result of 
        such trades or contracts or which otherwise was 
        received from any customer, client, or pool participant 
        in connection with the business of such person. The 
        word ``value'' as used in this paragraph means face, 
        par, or market value, or cost price, either wholesale 
        or retail, whichever is greater.
          (2) Any person to manipulate or attempt to manipulate 
        the price of any commodity in interstate commerce, or 
        for future delivery on or subject to the rules of any 
        registered entity, or of any swap, or to corner or 
        attempt to corner any such commodity or knowingly to 
        deliver or cause to be delivered for transmission 
        through the mails or interstate commerce by telegraph, 
        telephone, wireless, or other means of communication 
        false or misleading or knowingly inaccurate reports 
        concerning crop or market information or conditions 
        that affect or tend to affect the price of any 
        commodity in interstate commerce, or knowingly to 
        violate the provisions of section 4, section 4b, 
        subsections (a) [through (e) of subsection] through (c) 
        of section 4c, section 4h, section 4o(1), or section 
        19.
          (3) Any person knowingly to make, or cause to be 
        made, any statement in any application, report, or 
        document required to be filed under this Act or any 
        rule or regulation thereunder or any undertaking 
        contained in a registration statement required under 
        this Act, or by any registered entity or registered 
        futures association in connection with an application 
        for membership or participation therein or to become 
        associated with a member thereof, which statement was 
        false or misleading with respect to any material fact, 
        or knowingly to omit any material fact required to be 
        stated therein or necessary to make the statements 
        therein not misleading.
          (4) Any person willfully to falsify, conceal, or 
        cover up by any trick, scheme, or artifice a material 
        fact, make any false, fictitious, or fraudulent 
        statements or representations, or make or use any false 
        writing or document knowing the same to contain any 
        false, fictitious, or fraudulent statement or entry to 
        a registered entity, board of trade, swap data 
        repository, or futures association designated or 
        registered under this Act acting in furtherance of its 
        official duties under this Act.
          (5) Any person willfully to violate any other 
        provision of this Act, or any rule or regulation 
        thereunder, the violation of which is made unlawful or 
        the observance of which is required under the terms of 
        this Act, but no person shall be subject to 
        imprisonment under this paragraph for the violation of 
        any rule or regulation if such person proves that he 
        had no knowledge of such rule or regulation.
          (6) Any person to abuse the end user clearing 
        exemption under section 2(h)(4), as determined by the 
        Commission.
  (b) Any person convicted of a felony under this section shall 
be suspended from registration under this Act and shall be 
denied registration or reregistration for five years or such 
longer period as the Commission may determine, and barred from 
using, or participating in any manner in, any market regulated 
by the Commission for five years or such longer period as the 
Commission shall determine, on such terms and conditions as the 
Commission may prescribe, unless the Commission determines that 
the imposition of such suspension, denial of registration or 
reregistration, or market bar is not required to protect the 
public interest. The Commission may upon petition later review 
such disqualification and market bar and for good cause shown 
reduce the period thereof.
  (c) It shall be a felony punishable by a fine of not more 
than $500,000 or imprisonment for not more than five years, or 
both, together with the costs of prosecution, for any 
Commissioner of the Commission or any employee or agent 
thereof, to participate, directly or indirectly, in any 
transaction in commodity futures or any transaction of the 
character of or which is commonly known to the trade as an 
``option'', ``privilege'', ``indemnity'', ``bid'', ``offer'', 
``put'', ``call'', ``advance guaranty'', or ``decline 
guaranty'', or any transaction for the delivery of any 
commodity under a standardized contract commonly known to the 
trade as a margin account, margin contract, leverage account, 
or leverage contract, or under any contract, account, 
arrangement, scheme, or device that the Commission determines 
serves the same function or functions as such a standardized 
contract, or is marketed or managed in substantially the same 
manner as such a standardized contract, or for any such person 
to participate, directly or indirectly, in any investment 
transaction in an actual commodity if nonpublic information is 
used in the investment transaction, if the investment 
transaction is prohibited by rule or regulation of the 
Commission, or if the investment transaction is effected by 
means of any instrument regulated by the Commission. The 
foregoing prohibitions shall not apply to any transaction or 
class of transactions that the Commission, by rule or 
regulation, has determined would not be contrary to the public 
interest or otherwise inconsistent with the purposes of this 
subsection.
  (d) It shall be a felony punishable by a fine of not more 
than $500,000 or imprisonment for not more than five years, or 
both, together with the costs of prosecution--(1) for any 
Commissioner of the Commission or any employee or agent thereof 
who, by virtue of his employment or position, acquires 
information which may affect or tend to affect the price of any 
commodity futures or commodity and which information has not 
been made public to impart such information with intent to 
assist another person, directly or indirectly, to participate 
in any transaction in commodity futures, any transaction in an 
actual commodity, or in any transaction of the character of or 
which is commonly known to the trade as an ``option'', 
``privilege'', ``indemnity'', ``bid'', ``offer'', ``put'', 
``call'', ``advance guaranty'', or ``decline guaranty'', or in 
any transaction for the delivery of any commodity under a 
standardized contract commonly known to the trade as a margin 
account, margin contract, leverage account, or leverage 
contract, or under any contract, account, arrangement, scheme, 
or device that the Commission determines serves the same 
function or functions as such a standardized contract, or is 
marketed or managed in substantially the same manner as such a 
standardized contract; and (2) for any person to acquire such 
information from any Commissioner of the Commission or any 
employee or agent thereof and to use such information in any 
transaction in commodity futures, any transaction in an actual 
commodity, or in any transaction of the character of or which 
is commonly known to the trade as an ``option'', ``privilege'', 
``indemnity'', ``bid'', ``offer'', ``put'', ``call'', ``advance 
guaranty'', or ``decline guaranty'', or in any transaction for 
the delivery of any commodity under a standardized contract 
commonly known to the trade as a margin account, margin 
contract, leverage account, or leverage contract, or under any 
contract, account, arrangement, scheme, or device that the 
Commission determines serves the same function or functions as 
such a standardized contract, or is marketed or managed in 
substantially the same manner as such a standardized contract.
  (e) It shall be a felony for any person--
          (1) who is an employee, member of the governing 
        board, or member of any committee of a board of trade, 
        registered entity, swap data repository, or registered 
        futures association, in violation of a regulation 
        issued by the Commission, willfully and knowingly to 
        trade for such person's own account, or for or on 
        behalf of any other account, in contracts for future 
        delivery or options thereon, or swaps, on the basis of, 
        or willfully and knowingly to disclose for any purpose 
        inconsistent with the performance of such person's 
        official duties as an employee or member, any material 
        nonpublic information obtained through special access 
        related to the performance of such duties; or
          (2) willfully and knowingly to trade for such 
        person's own account, or for or on behalf of any other 
        account, in contracts for future delivery or options 
        thereon on the basis of any material nonpublic 
        information that such person knows was obtained in 
        violation of paragraph (1) from an employee, member of 
        the governing board, or member of any committee of a 
        board of trade, registered entity, or registered 
        futures association.
Such felony shall be punishable by a fine of not more than 
$500,000, plus the amount of any profits realized from such 
trading or disclosure made in violation of this subsection, or 
imprisonment for not more than five years, or both, together 
with the costs of prosecution.

           *       *       *       *       *       *       *

  Sec. 12. (a) The Commission may cooperate with any Department 
or agency of the Government, any State, territory, district, or 
possession, or department, agency, or political subdivision 
thereof, any foreign futures authority, any department or 
agency of a foreign government or political subdivision 
thereof, or any person.
  (b)(1) The Commission shall have the authority to employ such 
investigators, special experts, Administrative Law Judges, 
clerks, and other employees as it may from time to time find 
necessary for the proper performance of its duties and as may 
be from time to time appropriated for by Congress. To clarify 
the Commission's authority to establish the Honors Program 
under section 2(a)(7)(D), the Commission may coordinate with 
the Office of Personnel Management, as needed.
  (2) The Commission may employ experts and consultants in 
accordance with section 3109 of title 5 of the United States 
Code, and compensate such persons at rates not in excess of the 
maximum daily rate prescribed for GS-18 under section 5332 of 
title 5 of the United States Code.
  (3) The Commission shall also have authority to make and 
enter into contracts with respect to all matters which in the 
judgment of the Commission are necessary and appropriate to 
effectuate the purposes and provisions of this Act, including, 
but not limited to, the rental of necessary space at the seat 
of Government and elsewhere.
  (4) The Commission may request (in accordance with the 
procedures set forth in subchapter II of chapter 31 of title 5, 
United States Code) and the Office of Personnel Management 
shall authorize pursuant to the request, eight positions in the 
Senior Executive Service in addition to the number of such 
positions authorized for the Commission on the date of 
enactment of this sentence.
          (5) The Commission may incur expenses for 
        consultations and meetings hosted by the Commission 
        with foreign governmental and other regulatory 
        officials to exchange views concerning derivatives 
        matters, such expenses to include necessary logistic 
        and administrative expenses, including--
                  (A) meals;
                  (B) local travel and transportation; and
                  (C) related incidental expenses.
  (c) All of the expenses of the Commissioners, including all 
necessary expenses for transportation incurred by them while on 
official business of the Commission, shall be allowed and paid 
on the presentation of itemized vouchers therefor approved by 
the Commission.
  (d) There are authorized to be appropriated such sums as are 
necessary to carry out this Act for each of the fiscal years 
[2008 through 2013] 2020 through 2025.
  (e) Relation to Other Law, Departments, or Agencies.--
          (1) Nothing in this Act shall supersede or preempt--
                  (A) criminal prosecution under any Federal 
                criminal statute;
                  (B) the application of any Federal or State 
                statute (except as provided in paragraph (2)), 
                including any rule or regulation thereunder, to 
                any transaction in or involving any commodity, 
                product, right, service, or interest--
                          (i) that is not conducted on or 
                        subject to the rules of a registered 
                        entity [or exempt board of trade];
                          (ii) (except as otherwise specified 
                        by the Commission by rule or 
                        regulation) that is not conducted on or 
                        subject to the rules of any board of 
                        trade, exchange, or market located 
                        outside the United States, its 
                        territories or possessions; or
                          (iii) that is not subject to 
                        regulation by the Commission under 
                        section 4c or 19; or
                  (C) the application of any Federal or State 
                statute, including any rule or regulation 
                thereunder, to any person required to be 
                registered or designated under this Act who 
                shall fail or refuse to obtain such 
                registration or designation.
          (2) This Act shall supersede and preempt the 
        application of any State or local law that prohibits or 
        regulates gaming or the operation of bucket shops 
        (other than antifraud provisions of general 
        applicability) [in the case of--
                  [(A) an electronic trading facility excluded 
                under section 2(e) of this Act; and
                  [(B) 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).] 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).
  (f)(1) On request from a foreign futures authority, the 
Commission may, in its discretion, provide assistance in 
accordance with this section if the requesting authority states 
that the requesting authority is conducting an investigation 
which it deems necessary to determine whether any person has 
violated, is violating, or is about to violate any laws, rules 
or regulations relating to [futures or options] futures, 
options, swaps, or commodities matters that the requesting 
authority [administers or enforces] administers, enforces, or 
prosecutes. The Commission may conduct such investigation as 
the Commission deems necessary to collect information and 
evidence pertinent to the request for assistance. Such 
assistance may be provided without regard to whether the facts 
stated in the request would also constitute a violation of the 
laws of the United States.
  (2) In deciding whether to provide assistance under this 
subsection, the Commission shall consider whether--
          (A) the requesting authority has agreed to provide 
        reciprocal assistance to the Commission [in futures and 
        options] in futures, options, swaps, or commodities 
        matters; and
          (B) compliance with the request would prejudice the 
        public interest of the United States.
  (3) Notwithstanding any other provision of law, the 
Commission may accept payment and reimbursement, in cash or in 
kind, from a foreign futures authority, or made on behalf of 
such authority, for necessary expenses incurred by the 
Commission, its members, and employees in carrying out any 
investigation, or in providing any other assistance to a 
foreign futures authority, pursuant to this section. Any 
payment or reimbursement accepted shall be considered a 
reimbursement to the appropriated funds of the Commission.
  (g) Consistent with its responsibilities under section 18, 
the Commission is directed to facilitate the development and 
operation of computerized trading as an adjunct to the open 
outcry auction system. The Commission is further directed to 
cooperate with the Office of the United States Trade 
Representative, the Department of the Treasury, the Department 
of Commerce, and the Department of State in order to remove any 
trade barriers that may be imposed by a foreign nation on the 
international use of electronic trading systems.
  (h) Regulation of Swaps as Insurance Under State Law.--A 
swap--
          (1) shall not be considered to be insurance; and
          (2) may not be regulated as an insurance contract 
        under the law of any State.
  Sec. 13. (a) Any person who commits, or who willfully aids, 
abets, counsels, commands, induces, or procures the commission 
of, or recklessly provides substantial assistance to, a 
violation of any of the provisions of this Act, or any of the 
rules, regulations, or orders issued pursuant to this Act, or 
who acts in combination or concert with any other person in any 
such violation, or who willfully, or who by recklessly 
providing substantial assistance to another, causes an act to 
be done or omitted which if directly performed or omitted by 
him or another would be a violation of the provisions of this 
Act or any of such rules, regulations, or orders may be held 
responsible for such violation as a principal.
  (b) Any person who, directly or indirectly, controls any 
person who has violated any provision of this Act or any of the 
rules, regulations, or orders issued pursuant to this Act may 
be held liable for such violation in any action brought by the 
Commission to the same extent as such controlled person. In 
such action, the Commission has the burden of proving that the 
controlling person did not act in good faith or knowingly 
induced, directly or indirectly, the act or acts constituting 
the violation.
  (c) Nothing in this Act shall be construed as requiring the 
Commission [or the Commission] to report minor violations of 
this Act for prosecution, whenever it appears that the public 
interest does not require such action.
  Sec. 14. (a)(1) Any person complaining of any violation of 
any provision of this Act, or any rule, regulation, or order 
issued pursuant to this Act, by any person who is registered 
under this Act may, at any time within two years after the 
cause of action accrues, apply to the Commission for an order 
awarding--
          (A) actual damages proximately caused by such 
        violation. If an award of actual damages is made 
        against a floor broker in connection with the execution 
        of a customer order, and the futures commission 
        merchant which selected the floor broker for the 
        execution of the customer order is held to be 
        responsible under section 2(a)(1) for the floor 
        broker's violation, such futures commission merchant 
        may be required to satisfy such award; and
          (B) in the case of any action arising from a willful 
        and intentional violation in the execution of an order 
        on the floor of a registered entity, punitive or 
        exemplary damages equal to no more than two times the 
        amount of such actual damages. If an award of punitive 
        or exemplary damages is made against a floor broker in 
        connection with the execution of a customer order, and 
        the futures commission merchant which selected the 
        floor broker for the execution of the customer order is 
        held to be responsible under section 2(a)(1) for the 
        floor broker's violation, such futures commission 
        merchant may be required to satisfy such award if the 
        floor broker fails to do so, except that such 
        requirement shall apply to the futures commission 
        merchant only if it willfully and intentionally 
        selected the floor broker with the intent to assist or 
        facilitate the floor broker's violation.
  (2)(A) An action may be brought under this subsection by any 
one or more persons described in this subsection for and in 
behalf of such person or persons and other persons similarly 
situated, if the Commission permits such actions pursuant to a 
final rule issued by the Commission.
  (B) Not later than two hundred and seventy days after the 
date of enactment of this paragraph, the Commission shall 
propose and publish for public comment such rules as are 
necessary to carry out subparagraph (A). In developing such 
rules, the Commission shall consider the potential impact of 
such actions on resources available to the reparations system 
established under this Act and the relative merits of bringing 
such actions in Federal court.
  (b) The Commission may promulgate such rules, regulations, 
and orders as it deems necessary or appropriate for the 
efficient and expeditious administration of this section. 
Notwithstanding any other provision of law, such rules, 
regulations, and orders may prescribe, or otherwise condition, 
without limitation, the form, filing, and service of pleadings 
or orders, the nature and scope of discovery, counterclaims, 
motion practice (including the grounds for dismissal of any 
claim or counterclaim), hearings (including the waiver thereof, 
which may relate to the amount in controversy), rights of 
appeal, if any, and all other matters governing proceedings 
before the Commission under this section.
  (c) In case a complaint is made by a nonresident of the 
United States, the complainant shall be required, before any 
formal action is taken on his complaint, to furnish a bond in 
double the amount of the claim conditioned upon the payment of 
costs, including a reasonable attorney's fee for the respondent 
if the respondent shall prevail, and any reparation award that 
may be issued by the Commission against the complainant on any 
counterclaim by respondent: Provided, That the Commission shall 
have authority to waive the furnishing of a bond by a 
complainant who is a resident of a country which permits the 
filing of a complaint by a resident of the United States 
without the furnishing of a bond.
  (d)(1) If any person against whom an award has been made does 
not pay the reparation award within the time specified in the 
Commission's order, the complainant, or any person for whose 
benefit such order was made, within three years of the date of 
the order, may file a certified copy of the order of the 
Commission, in the district court of the United States for the 
district in which he resides or in which is located the 
principal place of business of the respondent, for enforcement 
of such reparation award by appropriate orders. The orders, 
writs, and processes of such district court may in such case 
run, be served, and be returnable anywhere in the United 
States. The petitioner shall not be liable for costs in the 
district court, nor for costs at any subsequent state of the 
proceedings, unless they accrue upon his appeal. If the 
petitioner finally prevails, he shall be allowed a reasonable 
attorney's fee, to be taxed and collected as a part of the 
costs of the suit. Subject to the right of appeal under 
subsection (e) of this section, an order of the Commission 
awarding reparations shall be final and conclusive.
          (2) A reparation award shall be directly enforceable 
        in district court as if it were a judgment pursuant to 
        section 1963 of title 28, United States Code. This 
        paragraph shall operate retroactively from the 
        effective date of its enactment, and shall apply to all 
        reparation awards for which a proceeding described in 
        paragraph (1) is commenced within 3 years of the date 
        of the Commission's order.
  (e)(1) Any final order of the Commission entered [hereunder] 
under this section shall be reviewable on petition of any party 
aggrieved thereby, by the United States Court of Appeals for 
any circuit in which a hearing was held, or if no hearing was 
held, any circuit in which [the appellee] an appellee is 
located, under the procedure provided in section 6(c) of this 
Act. [Such appeal] If the order requires the petitioner to pay 
reparation, or upholds a prior order requiring such a payment, 
the petition for review shall not be effective unless within 30 
days from and after the date of the reparation order the 
[appellant] petitioner also files with the clerk of the court a 
bond in double the amount of the reparation awarded against the 
[appellant] petitioner conditioned upon the payment of the 
judgment entered by the court, plus interest and costs, 
including a reasonable attorney's fee [for the appellee, if the 
appellee shall prevail] as set forth below. Such bond shall be 
in the form of cash, negotiable securities having a market 
value at least equivalent to the amount of bond prescribed, or 
the undertaking of a surety company on the approved list of 
sureties issued by the Treasury Department of the United 
States. [The] An appellee shall not be liable for costs in said 
court. If the appellee participates in the proceedings before 
the Court of Appeals through counsel and prevails, he shall be 
allowed a reasonable attorney's fee to be taxed and collected 
as a part of [his] the appellee's costs.
  (2) In paragraph (1), the term ``appellee'' means a party to 
a proceeding before the Commission under this section in whose 
favor the Commission ruled in an order that is the subject of a 
petition for review under paragraph (1) and whose interests are 
adverse to those of the petitioner.
  (f) Unless the party against whom a reparation order has been 
issued shows to the satisfaction of the Commission within 
fifteen days from the expiration of the period allowed for 
compliance with such order that either an appeal as herein 
authorized has been taken or payment of the full amount of the 
order (or any agreed settlement thereof) has been made, such 
party shall be prohibited automatically from trading on all 
registered entities and, if the party is registered with the 
Commission, such registration shall be suspended automatically 
at the expiration of such fifteen-day period until such party 
shows to the satisfaction of the Commission that payment of 
such amount with interest thereon to date of payment has been 
made: Provided, That if on appeal the appellee prevails or if 
the appeal is dismissed, the automatic prohibition against 
trading and suspension of registration shall become effective 
at the expiration of thirty days from the date of judgment on 
the appeal, but if the judgment is stayed by a court of 
competent jurisdiction, the suspension shall become effective 
ten days after the expiration of such stay, unless prior 
thereto the judgment of the court has been satisfied.
  (g) Predispute Resolution Agreements for Institutional 
Customers.--Nothing in this section prohibits a registered 
futures commission merchant from requiring a customer that is 
an eligible contract participant, as a condition to the 
commission merchant's conducting a transaction for the 
customer, to enter into an agreement waiving the right to file 
a claim under this section.

SEC. 15. CONSIDERATION OF COSTS AND BENEFITS AND ANTITRUST LAWS.

  (a) Costs and Benefits.--
          (1) In general.--Before promulgating a regulation 
        under this Act or issuing an order (except as provided 
        in paragraph (3)), the Commission, after coordinating 
        with the Office of the Chief Economist, shall consider 
        the costs and benefits of the action of the Commission.
          (2) Considerations.--The costs and benefits of the 
        proposed Commission action shall be evaluated in light 
        of--
                  (A) considerations of protection of market 
                participants and the public;
                  (B) considerations of the efficiency, 
                competitiveness, and financial integrity of 
                [futures markets] markets under the 
                jurisdiction of the Commission;
                  (C) considerations of price discovery;
                  (D) considerations of market liquidity;
                  [(D)] (E) considerations of sound risk 
                management practices; and
                  [(E)] (F) other public interest 
                considerations.
          (3) Applicability.--This subsection does not apply to 
        the following actions of the Commission:
                  (A) An order that initiates, is part of, or 
                is the result of an adjudicatory or 
                investigative process of the Commission.
                  (B) An emergency action.
                  (C) A finding of fact regarding compliance 
                with a requirement of the Commission.
  (b) Antitrust Laws.--The Commission shall take into 
consideration the public interest to be protected by the 
antitrust laws and endeavor to take the least anticompetitive 
means of achieving the objectives of this Act, as well as the 
policies and purposes of this Act, in issuing any order or 
adopting any Commission rule or regulation (including any 
exemption under section 4(c) or 4c(b)), or in requiring or 
approving any bylaw, rule, or regulation of a [contract market] 
registered entity or registered futures association established 
pursuant to section 17 of this Act.

           *       *       *       *       *       *       *

  Sec. 17. (a) Any association of persons may be registered 
with the Commission as a registered futures association 
pursuant to subsection (b) of this section, under the terms and 
conditions hereinafter provided in this section, by filing with 
the Commission for review and approval a registration statement 
in such form as the Commission may prescribe, setting forth the 
information, and accompanied by the documents, below specified:
          (1) Data as to its organization, membership, and 
        rules of procedure, and such other information as the 
        Commission may by rules and regulations require as 
        necessary or appropriate in the public interest; and
          (2) Copies of its constitution, charter, or articles 
        of incorporation or association, with all amendments 
        thereto, and of its bylaws, and of any rules or 
        instruments corresponding to the foregoing, whatever 
        the name, hereinafter in this section collectively 
        referred to as the ``rules of the association''.
  (b) An applicant association shall not be registered as a 
futures association unless the Commission finds, under 
standards established by the Commission, that--
          (1) such association is in the public interest and 
        that it will be able to comply with the provisions of 
        this section and the rules and regulations thereunder 
        and to carry out the purposes of this section;
          (2) the rules of the association provide that any 
        person registered under this Act, registered entity, or 
        any other person designated pursuant to the rules of 
        the Commission as eligible for membership may become a 
        member of such association, except such as are excluded 
        pursuant to paragraph (3) or (4) of this subsection, or 
        a rule of the association permitted under this 
        paragraph. The rules of the association may restrict 
        membership in such association on such specified basis 
        relating to the type of business done by its members, 
        or on such other specified and appropriate basis, as 
        appears to the Commission to be necessary or 
        appropriate in the public interest and to carry out the 
        purpose of this section. Rules adopted by the 
        association may provide that the association may, 
        unless the Commission directs otherwise in cases in 
        which the Commission finds it appropriate in the public 
        interest so to direct, deny admission to, or refuse to 
        continue in such association any person if (i) such 
        person, whether prior or subsequent to becoming 
        registered as such, or (ii) any person associated 
        within the meaning of ``associated person'' as set 
        forth in section 4k of this Act, whether prior or 
        subsequent to becoming so associated, has been and is 
        suspended or expelled from a registered entity or has 
        been and is barred or suspended from being associated 
        with all members of such registered entity, for 
        violation of any rule of such registered entity;
          (3) the rules of the association provide that, except 
        with the approval or at the direction of the Commission 
        in cases in which the Commission finds it appropriate 
        in the public interest so to approve or direct, no 
        person shall be admitted to or continued in membership 
        in such association, if such person--
                  (A) has been and is suspended or expelled 
                from a registered futures association or from a 
                registered entity or has been and is barred or 
                suspended from being associated with all 
                members of such association or from being 
                associated with all members of such registered 
                entity, for violation of any rule of such 
                association or registered entity which 
                prohibits any act or transaction constituting 
                conduct inconsistent with just and equitable 
                principles of trade, or requires any act the 
                omission of which constitutes conduct 
                inconsistent with just and equitable principles 
                of trade;
                  (B) is subject to an order of the Commission 
                denying, suspending, or revoking his 
                registration pursuant to section 6(c) of this 
                Act, or expelling or suspending him from 
                membership in a registered futures association 
                or a registered entity, or barring or 
                suspending him from being associated with a 
                futures commission merchant;
                  (C) whether prior or subsequent to becoming a 
                member, by his conduct while associated with a 
                member, was a cause of any suspension, 
                expulsion, or order of the character described 
                in clause (A) or (B) which is in effect with 
                respect to such member, and in entering such a 
                suspension, expulsion, or order, the Commission 
                or any such registered entity or association 
                shall have jurisdiction to determine whether or 
                not any person was a cause thereof; or
                  (D) has associated with him any person who is 
                known, or in the exercise of reasonable care 
                should be known, to him to be a person who 
                would be ineligible for admission to or 
                continuance in membership under clause (A), 
                (B), or (C) of this paragraph;
          (4) the rules of the association provide that, except 
        with the approval or at the direction of the Commission 
        in cases in which the Commission finds it appropriate 
        in the public interest so to approve or direct, no 
        person shall become a member and no natural person 
        shall become a person associated with a member, unless 
        such person is qualified to become a member or a person 
        associated with a member in conformity with specified 
        and appropriate standards with respect to the training, 
        experience, and such other qualifications of such 
        person as the association finds necessary or desirable, 
        and in the case of a member, the financial 
        responsibility of such a member. For the purpose of 
        defining such standards and the application thereof, 
        such rules may--
                  (A) appropriately classify prospective 
                members (taking into account relevant matters, 
                including type or nature of business done) and 
                persons proposed to be associated with members;
                  (B) specify that all or any portion of such 
                standard shall be applicable to any such class;
                  (C) require persons in any such class to pass 
                examinations prescribed in accordance with such 
                rules;
                  (D) provide that persons in any such class 
                other than prospective members and partners, 
                officers and supervisory employees (which 
                latter term may be defined by such rules and as 
                so defined shall include branch managers of 
                members) of members, may be qualified solely on 
                the basis of compliance with specified 
                standards of training and such other 
                qualifications as the association finds 
                appropriate;
                  (E) provide that applications to become a 
                member or a person associated with a member 
                shall set forth such facts as the association 
                may prescribe as to the training, experience, 
                and other qualifications (including, in the 
                case of an applicant for membership, financial 
                responsibility) of the applicant and that the 
                association shall adopt procedures for 
                verification of qualifications of the 
                applicant, which may require the applicant to 
                be fingerprinted and to submit, or cause to be 
                submitted, such fingerprints to the Attorney 
                General for identification and appropriate 
                processing. Notwithstanding any other provision 
                of law, such an association may receive from 
                the Attorney General all the results of such 
                identification and processing; and
                  (F) require any class of persons associated 
                with a member to be registered with the 
                association in accordance with procedures 
                specified by such rules (and any application or 
                document supplemental thereto required by such 
                rules of a person seeking to be registered with 
                such association shall, for the purposes of 
                section 6(c) of the Act, be deemed an 
                application required to be filed under this 
                section);
          (5) the rules of the association assure a fair 
        representation of its members in the adoption of any 
        rule of the association or amendment thereto, the 
        selection of its officers and directors, and in all 
        other phases of the administration of its affairs;
          (6) the rules of the association provide for the 
        equitable allocation of dues among its members, to 
        defray reasonable expenses of administration;
          (7) the rules of the association are designed to 
        prevent fraudulent and manipulative acts and practices, 
        to promote just and equitable principles of trade, in 
        general, to protect the public interest, and to remove 
        impediments to and perfect the mechanism of free and 
        open futures trading;
          (8) the rules of the association provide that its 
        members and persons associated with its members shall 
        be appropriately disciplined, by expulsion, suspension, 
        fine, censure, or being suspended or barred from being 
        associated with all members, or any other fitting 
        penalty, for any violation of its rules;
          (9) the rules of the association provide a fair and 
        orderly procedure with respect to the disciplining of 
        members and persons associated with members and the 
        denial of membership to any person seeking membership 
        therein or the barring of any person from being 
        associated with a member. In any proceeding to 
        determine whether any member or other person shall be 
        disciplined, such rules shall require that specific 
        charges be brought; that such member or person shall be 
        notified of, and be given an opportunity to defend 
        against, such charges; that a record shall be kept; and 
        that the determination shall include--
                  (A) a statement setting forth any act or 
                practice in which such member or other person 
                may be found to have engaged, or which such 
                member or other person may be found to have 
                omitted;
                  (B) a statement setting forth the specific 
                rule or rules of the association of which any 
                such act or practice, or omission to act, is 
                deemed to be in violation;
                  (C) a statement whether the acts or practices 
                prohibited by such rule or rules, or the 
                omission of any act required thereby, are 
                deemed to constitute conduct inconsistent with 
                just and equitable principles of trade; and
                  (D) a statement setting forth the penalty 
                imposed[;].
        In any proceeding to determine whether a person shall 
        be denied membership or whether any person shall be 
        barred from being associated with a member, such rules 
        shall provide that the person shall be notified of, and 
        be given an opportunity to be heard upon, the specific 
        grounds for denial or bar which are under 
        consideration; that a record shall be kept; and that 
        the determination shall set forth the specific grounds 
        upon which the denial or bar is based;
          (10) the rules of the association provide a fair, 
        equitable, and expeditious procedure through 
        arbitration or otherwise for the settlement of 
        customers' claims and grievances against any member or 
        employee thereof: Provided, That (A) the use of such 
        procedure by a customer shall be voluntary, (B) the 
        term ``customer'' as used in this paragraph shall not 
        include another member of the association, and (C) in 
        the case of a claim arising from a violation in the 
        execution of an order on the floor of a registered 
        entity, such procedure shall provide, to the extent 
        appropriate--
                  
                  (i) for payment of actual damages proximately 
                caused by such violation. If an award of actual 
                damages is made against a floor broker in 
                connection with the execution of a customer 
                order, and the futures commission merchant 
                which selected the floor broker for the 
                execution of the customer order is held to be 
                responsible under section 2(a)(1) for the floor 
                broker's violation, such futures commission 
                merchant may be required to satisfy such award; 
                and
                  (ii) where the violation is willful and 
                intentional, for payment to the customer of 
                punitive or exemplary damages, in addition to 
                losses proximately caused by the violation, in 
                an amount equal to no more than two times the 
                amount of such losses. If punitive or exemplary 
                damages are awarded against a floor broker in 
                connection with the execution of a customer 
                order, and the futures commission merchant 
                which selected the floor broker for the 
                execution of such order is held to be 
                responsible under section 2(a)(1) for the floor 
                broker's violation, such futures commission 
                merchant may be required to satisfy the award 
                of punitive or exemplary damages if the floor 
                broker fails to do so, except that such 
                requirement shall apply to the futures 
                commission merchant only if it willfully and 
                intentionally selected the floor broker with 
                the intent to assist or facilitate the floor 
                broker's violation; [and]
          (11) such association provides for meaningful 
        representation on the governing board of such 
        association of a diversity of membership interests and 
        provides that no less than 20 percent of the regular 
        voting members of such board be comprised of qualified 
        nonmembers of or persons who are not regulated by such 
        association[.];
          (12)[(A)] such association provides on all major 
        disciplinary committees for a diversity of membership 
        sufficient to ensure fairness and to prevent special 
        treatment or preference for any person in the conduct 
        of disciplinary proceedings and the assessment of 
        penalties[.]; and
          (13) [A] a major disciplinary committee hearing a 
        disciplinary matter shall include--
                  (A) qualified persons representing segments 
                of the association membership other than that 
                of the subject of the proceeding; and
                  (B) where appropriate to carry out the 
                purposes of this paragraph, qualified persons 
                who are not members of the association.
  (c) The Commission may, after notice and opportunity for 
hearing, suspend the registration of any futures association if 
it finds that the rules thereof do not conform to the 
requirements of the Commission, and any such suspension shall 
remain in effect until the Commission issues an order 
determining that such rules have been modified to conform with 
such requirements.
  (d) In addition to the fees and charges authorized by section 
8a(1) of this Act, each person registered under this Act, who 
is not a member of a futures association registered pursuant to 
this section, shall pay to the Commission such reasonable fees 
and charges as may be necessary to defray the costs of 
additional regulatory duties required to be performed by the 
Commission because such person is not a member of a registered 
futures association. The Commission shall establish such 
additional fees and charges by rules and regulations.
  (e) Any person registered under this Act, who is not a member 
of a futures association registered pursuant to this section, 
in addition to the other requirements and obligations of this 
Act and the regulations thereunder shall be subject to such 
other rules and regulations as the Commission may find 
necessary to protect the public interest and promote just and 
equitable principles of trade.
  (f) Upon filing of an application for registration pursuant 
to subsection (a), the Commission may by order grant such 
registration if the requirements of this section are satisfied. 
If, after appropriate notice and opportunity for hearing, it 
appears to the Commission that any requirement of this section 
is not satisfied, the Commission shall by order deny such 
registration.
  (g) A registered futures association may, upon such 
reasonable notice as the Commission may deem necessary in the 
public interest, withdraw from registration by filing with the 
Commission a written notice of withdrawal in such form as the 
Commission may by rules and regulations prescribe.
  (h)(1) If any registered futures association takes any final 
disciplinary action against a member of the association or a 
person associated with a member, denies admission to any person 
seeking membership therein, or bars any person from being 
associated with a member, the association promptly shall give 
notice thereof to such member or person and file notice thereof 
with the Commission. The notice shall be in such form and 
contain such information as the Commission, by rule or 
regulation, may prescribe as necessary or appropriate to carry 
out the purposes of this Act.
  (2) Any action with respect to which a registered futures 
association is required by paragraph (1) to file notice shall 
be subject to review by the Commission on its motion, or on 
application by any person aggrieved by the action. Such 
application shall be filed within 30 days after the date such 
notice is filed with the Commission and received by the 
aggrieved person, or within such longer period as the 
Commission may determine.
  (3)(A) Application to the Commission for review, or the 
institution of review by the Commission on its own motion, 
shall not operate as a stay of such action unless the 
Commission otherwise orders, summarily or after notice and 
opportunity for hearing on the question of a stay (which 
hearing may consist solely of the submission of affidavits or 
presentation of oral arguments).
  (B) The Commission shall establish procedures for expedited 
consideration and determination of the question of a stay.
  (i)(1) In a proceeding to review a final disciplinary action 
taken by a registered futures association against a member 
thereof or a person associated with a member, after appropriate 
notice and opportunity for a hearing (which hearing may consist 
solely of consideration of the record before the association 
and opportunity for the presentation of supporting reasons to 
affirm, modify, or set aside the sanction imposed by the 
association)--
          (A) if the Commission finds that--
                  (i) the member or person associated with a 
                member has engaged in the acts or practices, or 
                has omitted the acts, that the association has 
                found the member or person to have engaged in 
                or omitted;
                  (ii) the acts or practices, or omissions to 
                act, are in violation of the rules of the 
                association specified in the determination of 
                the association; and
                  (iii) such rules are, and were applied in a 
                manner, consistent with the purposes of this 
                Act,
        the Commission, by order, shall so declare and, as 
        appropriate, affirm the sanction imposed by the 
        association, modify the sanction in accordance with 
        paragraph (2), or remand the case to the association 
        for further proceedings; or
          (B) if the Commission does not make any such finding, 
        the Commission, by order, shall set aside the sanction 
        imposed by the association and, if appropriate, remand 
        the case to the association for further proceedings.
  (2) If, after a proceeding under paragraph (1), the 
Commission finds that any penalty imposed on a member or person 
associated with a member is excessive or oppressive, having due 
regard for the public interest, the Commission, by order, shall 
cancel, reduce, or require the remission of the penalty.
  (3) In a proceeding to review the denial of membership in a 
registered futures association or the barring of any person 
from being associated with a member, after appropriate notice 
and opportunity for a hearing (which hearing may consist solely 
of consideration of the record before the association and 
opportunity for the presentation of supporting reasons to 
affirm, modify, or set aside the action of the association)--
          (A) if the Commission finds that--
                  (i) the specific grounds on which the denial 
                or bar is based exist in fact;
                  (ii) the denial or bar is in accordance with 
                the rules of the association; and
                  (iii) such rules are, and were applied in a 
                manner, consistent with the purposes of this 
                Act,
        the Commission, by order, shall so declare and, as 
        appropriate, affirm or modify the action of the 
        association, or remand the case to the association for 
        further proceedings; or
          (B) if the Commission does not make any such finding, 
        the Commission, by order, shall set aside the action of 
        the association and require the association to admit 
        the applicant to membership or permit the person to be 
        associated with a member, or, as appropriate, remand 
        the case to the association for further proceedings.
  (4) Any person aggrieved by a final order of the Commission 
entered under this subsection may file a petition for review 
with a United States court of appeals in the same manner as 
provided in section 6(c).
  (j) Every registered futures association shall file with the 
Commission in accordance with such rules and regulations as the 
Commission may prescribe as necessary or appropriate in the 
public interest, copies of any changes in or additions to the 
rules of the association, and such other information and 
documents as the Commission may require to keep current or to 
supplement the registration statement and documents filed 
pursuant to subsection (a) of this section. A registered 
futures association shall submit to the Commission any change 
in or addition to its rules and may make such rules effective 
ten days after receipt of such submission by the Commission 
unless, within the ten-day period, the registered futures 
association requests review and approval thereof by the 
Commission or the Commission notifies such registered futures 
association in writing of its determination to review such 
rules for approval. The Commission shall approve such rules if 
such rules are determined by the Commission to be consistent 
with the requirements of this section and not otherwise in 
violation of this Act or the regulations issued pursuant to 
this Act, and the Commission shall disapprove, after 
appropriate notice and opportunity for hearing, any such rule 
which the Commission determines at any time to be inconsistent 
with the requirements of this section or in violation of this 
Act or the regulations issued pursuant to this Act. If the 
Commission does not approve or institute disapproval 
proceedings with respect to any rule within one hundred and 
eighty days after receipt or within such longer period of time 
as the registered futures association may agree to, or if the 
Commission does not conclude a disapproval proceeding with 
respect to any rule within one year after receipt or within 
such longer period as the registered futures association may 
agree to, such rule may be made effective by the registered 
futures association until such time as the Commission 
disapproves such rule in accordance with this subsection.
  (k)(1) The Commission is authorized by order to abrogate any 
rule of a registered futures association, if after appropriate 
notice and opportunity for hearing, it appears to the 
Commission that such abrogation is necessary or appropriate to 
assure fair dealing by the members of such association, to 
assure a fair representation of its members in the 
administration of its affairs or effectuate the purposes of 
this section.
  (2) The Commission may in writing request any registered 
futures association to adopt any specified alteration or 
supplement to its rules with respect to any of the matters 
hereinafter enumerated. If such association fails to adopt such 
alteration or supplement within a reasonable time, the 
Commission is authorized by order to alter or supplement the 
rules of such association in the manner theretofore requested, 
or with such modifications of such alteration or supplement as 
it deems necessary if, after appropriate notice and opportunity 
for hearing, it appears to the Commission that such alteration 
or supplement is necessary or appropriate in the public 
interest or to effectuate the purposes of this section, with 
respect to--
          (A) the basis for, and procedure in connection with, 
        the denial of membership or the barring from being 
        associated with a member or the disciplining of members 
        or persons associated with members, or the 
        qualifications required for members or natural persons 
        associated with members or any class thereof:
          (B) the method for adoption of any change in or 
        addition to the rules of the association;
          (C) the method of choosing officers and directors.
  (l) The Commission is authorized, if such action appears to 
it to be necessary or appropriate in the public interest or to 
carry out the purposes of this section--
          (1) after appropriate notice and opportunity for 
        hearing, by order to suspend for a period not exceeding 
        twelve months or to revoke the registration of a 
        registered futures association, if the Commission finds 
        that such association has violated any provisions of 
        this Act or any rule or regulation thereunder, or has 
        failed to enforce compliance with its own rules, or has 
        engaged in any other activity tending to defeat the 
        purposes of this Act;
          (2) after appropriate notice and opportunity for 
        hearing, by order to suspend for a period not exceeding 
        twelve months or to expel from a registered futures 
        association any member thereof, or to suspend for a 
        period not exceeding twelve months or to bar any person 
        from being associated with a member thereof, if the 
        Commission finds that such member or person--
                  (A) has violated any provision of this Act or 
                any rule or regulation thereunder, or has 
                effected any transaction for any other person 
                who, he had reason to believe, was violating 
                with respect to such transaction any provision 
                of this Act or any rule or regulation 
                thereunder; or
                  (B) has willfully violated any provision of 
                this Act, as amended, or of any rule, 
                regulation, or order thereunder, or has 
                effected any transaction for any other person 
                who, he had reason to believe, was willfully 
                violating with respect to such transaction any 
                provision of such Act or rule, regulation, or 
                order; and
          (3) after appropriate notice and opportunity for 
        hearing, by order to remove from office any officer or 
        director of a registered futures association who, the 
        Commission finds, has willfully failed to enforce the 
        rules of the association, or has willfully abused his 
        authority.
  (m) Notwithstanding any other provision of law, the 
Commission may approve rules of futures associations that, 
directly or indirectly, require persons eligible for membership 
in such associations to become members of at least one such 
association, upon a determination by the Commission that such 
rules are necessary or appropriate to achieve the purposes and 
objectives of this Act.
  (n) The Commission shall include in its annual reports to 
Congress information concerning any futures associations 
registered pursuant to this section and the effectiveness of 
such associations in regulating the practices of the members.
  (o)(1) The Commission may require any futures association 
registered pursuant to this section to perform any portion of 
the registration functions under this Act with respect to each 
member of the association other than a registered entity and 
with respect to each associated person of such member, in 
accordance with rules, notwithstanding any other provision of 
law, adopted by such futures association and submitted to the 
Commission pursuant to section 17(j) of this Act, and subject 
to the provisions of this Act applicable to registrations 
granted by the Commission.
  (2) In performing any Commission registration function 
authorized by the Commission under section 8a(10), this 
section, or any other applicable provisions of this Act, a 
futures association may issue orders (A) to refuse to register 
any person, (B) to register conditionally any person, (C) to 
suspend the registration of any person, (D) to place 
restrictions on the registration of any person, or (E) to 
revoke the registration of any person. If such an order is the 
final decision of the futures association, any person against 
whom the order has been issued may petition the Commission to 
review the decision. The Commission may on its own initiative 
or upon petition decline review or grant review and affirm, set 
aside, or modify such an order of the futures association; and 
the findings of the futures association as to the facts, if 
supported by the weight of the evidence, shall be conclusive. 
Unless the Commission grants review under this section of an 
order concerning registration issued by a futures association, 
the order of the futures association shall be considered to be 
an order issued by the Commission.
  (3) Nothing in this section shall affect the Commission's 
authority to review the granting of a registration application 
by a registered futures association that is performing any 
Commission registration function authorized by the Commission 
under section 8a(10), this section, or any other applicable 
provision of this Act.
  (4) If a person against whom a futures association has issued 
a registration order under this subsection petitions the 
Commission to review that order and the Commission declines to 
take review, such person may file a petition for review with a 
United States court of appeals, in accordance with section 6(c) 
of this Act.
  (p) Notwithstanding any other provision of this section, each 
futures association registered under this section on the date 
of enactment of the Futures Trading Act of 1982, shall adopt 
and submit for Commission approval not later than ninety days 
after such date of enactment, and each futures association that 
applies for registration after such date shall adopt and 
include with its application for registration, rules of the 
association that require the association to--
          (1) establish training standards and proficiency 
        testing for persons involved in the solicitation of 
        transactions subject to the provisions of this Act, 
        supervisors of such persons, and all persons for which 
        it has registration responsibilities, and a program to 
        audit and enforce compliance with such standards;
          (2) establish minimum capital, segregation, and other 
        financial requirements applicable to its members for 
        which such requirements are imposed by the Commission 
        and implement a program to audit and enforce compliance 
        with such requirements, except that such requirements 
        may not be less stringent an those imposed on such 
        firms by this Act or by Commission regulation;
          (3) establish minimum standards governing the sales 
        practices of its members and persons associated 
        therewith for transactions subject to the provisions of 
        this Act; and
          (4) establish special supervisory guidelines to 
        protect the public interest relating to the 
        solicitation by telephone of new futures or options 
        accounts and make such guidelines applicable to those 
        members determined to require such guidelines in 
        accordance with standards established by the Commission 
        consistent with this Act. Such guidelines may include a 
        requirement that, with respect to a customer with no 
        previous futures or commodity options trading 
        experience, the member may not enter an order for the 
        account of such customer for a period of three days 
        following opening of the account and receipt of a 
        signed acknowledgment by the customer of receipt of a 
        risk disclosure statement.
  (q)(1) The Commission shall issue regulations requiring each 
registered futures association to establish and make available 
to the public a schedule of major violations of any rule within 
the disciplinary jurisdiction of such registered futures 
association.
  (2) The regulations issued by the Commission pursuant to this 
subsection shall prohibit, for a period of time to be 
determined by the Commission, any member of a registered 
futures association who is found to have committed any major 
violation from service on the governing board of any registered 
futures association or registered entity, or on any 
disciplinary committee thereof.
  [(q)] (r) Each futures association registered under this 
section shall develop a comprehensive program that fully 
implements the rules approved by the Commission under this 
section as soon as practicable but not later than September 30, 
1985, in the case of any futures association registered on the 
date of enactment of the Futures Trading Act of 1982, and not 
later than two and one-half years after the date of 
registration in the case of any other futures association 
registered under this section.
  [(r)] (s) Consistent with this Act, each futures association 
registered under this section shall issue such rules as are 
necessary to avoid duplicative or conflicting rules applicable 
to any futures commission merchant registered with the 
Commission pursuant to section 4f(a) of this Act (except 
paragraph (2) thereof), that is also registered with the 
Securities and Exchange Commission pursuant to section 15(b) of 
the Securities and Exchange Act of 1934 (except paragraph (11) 
thereof), with respect to the application of--
          (1) rules of such futures association of the type 
        specified in section 4d(e) involving security futures 
        products; and
          (2) similar rules of national securities associations 
        registered pursuant to section 15A(a) of the Securities 
        and Exchange Act of 1934 involving security futures 
        products.
  [Sec. 18. (a) The Commission shall establish and maintain, as 
part of its ongoing operations, research and information 
programs to (1) determine the feasibility of trading by 
computer, and the expanded use of modern information system 
technology, electronic data processing, and modern 
communication systems by commodity exchanges, boards of trade, 
and by the Commission itself for purposes of improving, 
strengthening, facilitating, or regulating futures trading 
operations; (2) assist in the development of educational and 
other informational materials regarding futures trading for 
dissemination and use among producers, market users, and the 
general public; and (3) carry out the general purposes of this 
Act.
  [(b) The Commission shall include in its annual reports to 
Congress plans and findings with respect to implementing this 
section.]

SEC. 18. RESEARCH AND DEVELOPMENT PROGRAMS.

  (a) Programs.--The Commission, as part of its ongoing 
operations, shall establish and maintain research, development, 
demonstration, and information programs that further the 
purposes of this Act, including programs that--
          (1) facilitate the understanding by the Commission of 
        emerging technologies, technological advances, and 
        innovations and their potential application to and 
        effect on the transactions and markets under the 
        jurisdiction of the Commission, and associated 
        implications for cybersecurity, data security, and 
        systemic risk;
          (2) provide an environment where emerging 
        technologies, technological advances, and innovations 
        may be explored by the Commission with developers and 
        potential users to evaluate potential effects on the 
        Commission and the markets under the jurisdiction of 
        the Commission;
          (3) identify areas where the Commission should adapt 
        its administration of this Act in light of emerging 
        technologies, technological advances, and innovations 
        to benefit the markets under the jurisdiction of the 
        Commission; and
          (4) develop educational and other informational 
        materials for dissemination and use among producers, 
        market-users, and the general public regarding--
                  (A) derivatives;
                  (B) emerging technologies, technological 
                advances, and innovations in markets under the 
                jurisdiction of the Commission; and
                  (C) applicable requirements of this Act and 
                the regulations prescribed under this Act with 
                regard to the subjects described in 
                subparagraphs (A) and (B).
  (b) Research and Development Plan.--
          (1) In general.--The Commission may, after notice and 
        comment, adopt a research and development plan for a 
        program established under subsection (a).
          (2) Conditions.--A research and development plan 
        adopted pursuant to paragraph (1) shall identify--
                  (A) specific areas of interest to the 
                Commission;
                  (B) potential activities the Commission will 
                undertake to investigate an area of interest; 
                and
                  (C) how the authority described in subsection 
                (c) will be utilized in the program.
  (c) Other Transaction Authority.--
          (1) In general.--Notwithstanding the Office of 
        Federal Procurement Policy Act of 1974 and the 
        Competition in Contracting Act, the Commission may 
        enter into and perform a transaction (other than a 
        standard contract) for the purpose of aiding or 
        facilitating the programs and activities under 
        subsection (a).
          (2) Conditions.--The Commission may enter into a 
        transaction under this subsection only if--
                  (A) the transaction is used only in 
                furtherance of a research and development plan 
                established under subsection (b);
                  (B) the Commission endeavored to use a 
                competitive process, where appropriate, when 
                determining the parties to the transaction; and
                  (C) using a standard contract to do so is 
                either not feasible or not appropriate.
          (3) Policies.--The Commission shall, after notice and 
        comment, establish and publish written policies setting 
        forth the manner and criteria for utilizing the 
        authority provided by this subsection.
  (d) Gift Acceptance Authority.--
          (1) In general.--The Commission may accept and use, 
        on behalf of the United States, any non-monetary gift 
        of a provision of access, use of facilities, personal 
        property, or services, that is related to--
                  (A) sharing of research, data, or other 
                information;
                  (B) public presentations; or
                  (C) non-commercially available services or 
                systems.
          (2) Conditions.--
                  (A) In general.--A gift may be accepted 
                pursuant to this subsection only if it is in 
                furtherance of a research and development plan 
                established under subsection (b).
                  (B) Limitations.--The Commission may not 
                accept a gift if--
                          (i) conditions inconsistent with 
                        applicable laws or regulations apply to 
                        the gift;
                          (ii) the gift is conditioned on, or 
                        will require, the expenditure of 
                        appropriated funds not available to the 
                        Commission;
                          (iii) using a standard contract or 
                        other transaction authority under 
                        subsection (c) to acquire the gift is 
                        either feasible or appropriate; or
                          (iv) acceptance of the gift would--
                                  (I) reflect unfavorably on 
                                the ability of the Commission 
                                to carry out its 
                                responsibilities or official 
                                duties in a fair and objective 
                                manner, or compromise the 
                                integrity or the appearance of 
                                the integrity of its programs 
                                or any official involved in its 
                                programs, or
                                  (II) give the endorsement or 
                                the appearance of the 
                                endorsement by the Commission 
                                or Commission staff of the 
                                products, services, activities, 
                                or policies of the donor.
                  (C) Solicitation prohibition.--
                          (i) In general.--Except as provided 
                        in clause (ii), no gift may be 
                        solicited by any Commissioner, employee 
                        of, or contractor at the Commission.
                          (ii) Exception.--A Commissioner or 
                        employee of the Commission may solicit 
                        only for a gift described in paragraph 
                        (1)(B).
                  (D) Duration.--To the extent applicable, the 
                Commission shall return any gift accepted 
                pursuant to this subsection within 90 days 
                after accepting the gift.
                  (E) Rules.--The Commission shall, after 
                notice and comment, establish and publish 
                written rules setting forth the manner and 
                criteria to be used in determining whether a 
                gift meets the conditions of this paragraph.
          (3) Disclosure.--Within 30 days after accepting a 
        gift pursuant to this subsection, the Commission shall 
        publish in the Federal Register a notice detailing--
                  (A) the source of the gift;
                  (B) the nature of the gift;
                  (C) whether the gift was solicited pursuant 
                to paragraph (2)(C)(ii), and if so, by whom; 
                and
                  (D) how the gift meets the conditions set 
                forth in paragraph (2).
          (4) Sunset.--The authority provided in this 
        subsection may not be exercised on or after October 1, 
        2025.
  (e) Annual Report.--Not later than 60 days after the end of 
each fiscal year, the Commission shall submit to the Committee 
on Agriculture, Nutrition, and Forestry of the Senate and the 
Committee on Agriculture of the House of Representatives a 
report on all transactions entered into under subsection (c) 
and all gifts accepted under subsection (d) in the fiscal year, 
which shall include the following:
          (1) A brief description of the subject of each such 
        transaction or gift, with an explanation of--
                  (A) its potential utility to the Commission 
                or the markets regulated by the Commission;
                  (B) how it fulfills the goals and objectives 
                of the research and development plan 
                established under subsection (b); and
                  (C) the status of all related projects.
          (2) The information required to be published pursuant 
        to subsection (d)(3).
          (3) A description of all sums expended by the 
        Commission in connection with a transaction entered 
        into under subsection (c), and, if readily 
        ascertainable, the value of any gift accepted under 
        subsection (d).

           *       *       *       *       *       *       *

  Sec. 20. (a) Notwithstanding title 11 of the United States 
Code, the Commission may provide, with respect to a commodity 
broker that is a debtor under chapter 7 of title 11 of the 
United States Code, by rule or regulation--
          (1) that certain cash, securities, other property, or 
        commodity contracts are to be included in or excluded 
        from customer property or member property;
          (2) that certain cash, securities, other property, or 
        commodity contracts are to be specifically identifiable 
        to a particular customer in a specific capacity;
          (3) the method by which the business of such 
        commodity broker is to be conducted or liquidated after 
        the date of the filing of the petition under such 
        chapter, including the payment and allocation of margin 
        with respect to commodity contracts not specifically 
        identifiable to a particular customer pending their 
        orderly liquidation;
          (4) any persons to which customer property and 
        commodity contracts may be transferred under section 
        766 of title 11 of the United States Code; [and]
          (5) how the net equity of a customer is to be 
        determined[.]; and
          (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, 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, be included in customer 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.
  (b) As used in this section, the terms ``commodity broker'', 
``commodity contract'', ``customer'', ``customer property'', 
``member property'', ``net equity'', and ``security'' have the 
meanings assigned such terms for the purposes of subchapter IV 
of chapter 7 of title 11 of the United States Code.
  (c) The Commission shall exercise its authority to ensure 
that securities held in a portfolio margining account carried 
as a futures account are customer property and the owners of 
those accounts are customers for the purposes of subchapter IV 
of chapter 7 of title 11 of the United States Code.

SEC. 21. SWAP DATA REPOSITORIES.

  (a) Registration Requirement.--
          (1) Requirement; authority of derivatives clearing 
        organization.--
                  (A) In general.--It shall be unlawful for any 
                person, unless registered with the Commission, 
                directly or indirectly to make use of the mails 
                or any means or instrumentality of interstate 
                commerce to perform the functions of a swap 
                data repository.
                  (B) Registration of derivatives clearing 
                organizations.--A derivatives clearing 
                organization may register as a swap data 
                repository.
          (2) Inspection and examination.--Each registered swap 
        data repository shall be subject to inspection and 
        examination by any representative of the Commission.
          (3) Compliance with core principles.--
                  (A) In general.--To be registered, and 
                maintain registration, as a swap data 
                repository, the swap data repository shall 
                comply with--
                          (i) the requirements and core 
                        principles described in this section; 
                        and
                          (ii) any requirement that the 
                        Commission may impose by rule or 
                        regulation pursuant to section 8a(5).
                  (B) Reasonable discretion of swap data 
                repository.--Unless otherwise determined by the 
                Commission by rule or regulation, a swap data 
                repository described in subparagraph (A) shall 
                have reasonable discretion in establishing the 
                manner in which the swap data repository 
                complies with the core principles described in 
                this section.
  (b) Standard Setting.--
          (1) Data identification.--
                  (A) In general.--In accordance with 
                subparagraph (B), the Commission shall 
                prescribe standards that specify the data 
                elements for each swap that shall be collected 
                and maintained by each registered swap data 
                repository.
                  (B) Requirement.--In carrying out 
                subparagraph (A), the Commission shall 
                prescribe consistent data element standards 
                applicable to registered entities and reporting 
                counterparties.
          (2) Data collection and maintenance.--The Commission 
        shall prescribe data collection and data maintenance 
        standards for swap data repositories.
          (3) Comparability.--The standards prescribed by the 
        Commission under this subsection shall be comparable to 
        the data standards imposed by the Commission on 
        derivatives clearing organizations in connection with 
        their clearing of swaps.
  (c) Duties.--A swap data repository shall--
          (1) accept data prescribed by the Commission for each 
        swap under subsection (b);
          [(2) confirm with both counterparties to the swap the 
        accuracy of the data that was submitted;]
          (2) confirm with any counterparty to the swap, as 
        determined by the Commission, the accuracy of the data 
        that was submitted, and the counterparty shall comply 
        with the rules or procedures of a swap data repository 
        to confirm the accuracy of the data;
          (3) maintain the data described in paragraph (1) in 
        such form, in such manner, and for such period as may 
        be required by the Commission;
          (4)(A) provide direct electronic access to the 
        Commission (or any designee of the Commission, 
        including another registered entity); and
          (B) provide the information described in paragraph 
        (1) in such form and at such frequency as the 
        Commission may require to comply with the public 
        reporting requirements contained in section 2(a)(13);
          (5) at the direction of the Commission, establish 
        automated systems for monitoring, screening, and 
        analyzing swap data, including compliance and frequency 
        of end user clearing exemption claims by individual and 
        affiliated entities;
          (6) maintain the privacy of any and all swap 
        transaction information that the swap data repository 
        receives from a swap dealer, counterparty, or any other 
        registered entity; and
          (7) on a confidential basis pursuant to section 8, 
        upon request, and after notifying the Commission of the 
        request, make available swap data obtained by the swap 
        data repository, including individual counterparty 
        trade and position data, to--
                  (A) each appropriate prudential regulator;
                  (B) the Financial Stability Oversight 
                Council;
                  (C) the Securities and Exchange Commission;
                  (D) the Department of Justice; and
                  (E) any other person that the Commission 
                determines to be appropriate, including--
                          (i) foreign financial supervisors 
                        (including foreign futures 
                        authorities);
                          (ii) foreign central banks;
                          (iii) foreign ministries; and
                          (iv) other foreign authorities; and
          (8) establish and maintain emergency procedures, 
        backup facilities, and a plan for disaster recovery 
        that allows for the timely recovery and resumption of 
        operations and the fulfillment of the responsibilities 
        and obligations of the organization.
  (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.
  (e) Designation of Chief Compliance Officer.--
          (1) In general.--Each swap data repository shall 
        designate an individual to serve as a chief compliance 
        officer.
          (2) Duties.--The chief compliance officer shall--
                  (A) report directly to the board or to the 
                senior officer of the swap data repository;
                  (B) review the compliance of the swap data 
                repository with respect to the requirements and 
                core principles described in this section;
                  (C) in consultation with the board of the 
                swap data repository, a body performing a 
                function similar to the board of the swap data 
                repository, or the senior officer of the swap 
                data repository, resolve any conflicts of 
                interest that may arise;
                  (D) be responsible for administering each 
                policy and procedure that is required to be 
                established pursuant to this section;
                  (E) ensure compliance with this Act 
                (including regulations) relating to agreements, 
                contracts, or transactions, including each rule 
                prescribed by the Commission under this 
                section;
                  (F) establish procedures for the remediation 
                of noncompliance issues identified by the chief 
                compliance officer through any--
                          (i) compliance office review;
                          (ii) look-back;
                          (iii) internal or external audit 
                        finding;
                          (iv) self-reported error; or
                          (v) validated complaint; and
                  (G) establish and follow appropriate 
                procedures for the handling, management 
                response, remediation, retesting, and closing 
                of noncompliance issues.
          (3) Annual reports.--
                  (A) In general.--In accordance with rules 
                prescribed by the Commission, the chief 
                compliance officer shall annually prepare and 
                sign a report that contains a description of--
                          (i) the compliance of the swap data 
                        repository of the chief compliance 
                        officer with respect to this Act 
                        (including regulations); and
                          (ii) each policy and procedure of the 
                        swap data repository of the chief 
                        compliance officer (including the code 
                        of ethics and conflict of interest 
                        policies of the swap data repository).
                  (B) Requirements.--A compliance report under 
                subparagraph (A) shall--
                          (i) accompany each appropriate 
                        financial report of the swap data 
                        repository that is required to be 
                        furnished to the Commission pursuant to 
                        this section; and
                          (ii) include a certification that, 
                        under penalty of law, the compliance 
                        report is accurate and complete.
  (f) Core Principles Applicable To Swap Data Repositories.--
          (1) Antitrust considerations.--Unless necessary or 
        appropriate to achieve the purposes of this Act, a swap 
        data repository shall not--
                  (A) adopt any rule or take any action that 
                results in any unreasonable restraint of trade; 
                or
                  (B) impose any material anticompetitive 
                burden on the trading, clearing, or reporting 
                of transactions.
          (2) Governance arrangements.--Each swap data 
        repository shall establish governance arrangements that 
        are transparent--
                  (A) to fulfill public interest requirements; 
                and
                  (B) to support the objectives of the Federal 
                Government, owners, and participants.
          (3) Conflicts of interest.--Each swap data repository 
        shall--
                  (A) establish and enforce rules to minimize 
                conflicts of interest in the decision-making 
                process of the swap data repository; and
                  (B) establish a process for resolving 
                conflicts of interest described in subparagraph 
                (A).
          (4) System safeguards.--Each swap data repository 
        shall--
                  (A) establish and maintain a program of risk 
                analysis and oversight to identify and minimize 
                sources of operational risk, through--
                          (i) the implementation of appropriate 
                        controls and procedures; and
                          (ii) the development and operation of 
                        automated systems that--
                                  (I) are reliable, secure, and 
                                resilient;
                                  (II) have adequate scalable 
                                capacity; and
                                  (III) maintain the 
                                confidentiality, integrity, and 
                                availability of the data they 
                                contain;
                  (B) establish and maintain emergency 
                procedures, backup facilities, and a plan for 
                disaster recovery that allow for--
                          (i) the timely recovery and 
                        resumption of operations; and
                          (ii) the fulfillment of the 
                        responsibilities and obligations of the 
                        swap data repository; and
                  (C) periodically conduct tests to--
                          (i) verify the reliability, security, 
                        resilience, and capacity of the 
                        automated systems of the swap data 
                        repository;
                          (ii) verify the confidentiality, 
                        integrity, and availability of the data 
                        contained in those systems; and
                          (iii) verify that backup resources 
                        are sufficient to ensure continued 
                        fulfillment of all duties and 
                        obligations of the swap data repository 
                        established by this Act or the 
                        regulations of the Commission.
          [(4)] (5) Additional duties developed by 
        commission.--
                  (A) In general.--The Commission may develop 1 
                or more additional duties applicable to swap 
                data repositories.
                  (B) Consideration of evolving standards.--In 
                developing additional duties under subparagraph 
                (A), the Commission may take into consideration 
                any evolving standard of the United States or 
                the international community.
                  (C) Additional duties for commission 
                designees.--The Commission shall establish 
                additional duties for any registrant described 
                in section 1a(48) in order to minimize 
                conflicts of interest, protect data, ensure 
                compliance, and guarantee the safety and 
                security of the swap data repository.
  (g) Required Registration for Swap Data Repositories.--Any 
person that is required to be registered as a swap data 
repository under this section shall register with the 
Commission regardless of whether that person is also licensed 
as a bank or registered with the Securities and Exchange 
Commission as a swap data repository.
  (h) Rules.--The Commission shall adopt rules governing 
persons that are registered under this section.
  Sec. 22. (a)(1) Any person (other than a registered entity or 
registered futures association) who violates this Act or who 
willfully aids, abets, counsels, induces, or procures the 
commission of a violation of this Act shall be liable for 
actual damages resulting from one or more of the transactions 
referred to in subparagraphs (A) through (D) of this paragraph 
and caused by such violation to any other person--
          (A) who received trading advice from such person for 
        a fee;
          (B) who made through such person any contract of sale 
        of any commodity for future delivery (or option on such 
        contract or any commodity) or any swap; or who 
        deposited with or paid to such person money, 
        securities, or property (or incurred debt in lieu 
        thereof) in connection with any order to make such 
        contract or any swap;
          (C) who purchased from or sold to such person or 
        placed through such person an order for the purchase or 
        sale of--
                  (i) an option subject to section 4c of this 
                Act (other than an option purchased or sold on 
                a registered entity or other board of trade);
                  (ii) a contract subject to section 19 of this 
                Act; or
                  (iii) an interest or participation in a 
                commodity pool; or
                  (iv) a swap; or
          (D) who purchased or sold a contract referred to in 
        subparagraph (B) hereof or swap if the violation 
        constitutes--
                  (i) the use or employment of, or an attempt 
                to use or employ, in connection with a swap, or 
                a contract of sale of a commodity, in 
                interstate commerce, or for future delivery on 
                or subject to the rules of any registered 
                entity, any manipulative device or contrivance 
                in contravention of such rules and regulations 
                as the Commission shall promulgate by not later 
                than 1 year after the date of enactment of the 
                Dodd-Frank Wall Street Reform and Consumer 
                Protection Act; or
                  (ii) a manipulation of the price of any such 
                contract or swap or the price of the commodity 
                underlying such contract or swap.
  (2) Except as provided in subsection (b), the rights of 
action authorized by this subsection and by sections 5(d)(13), 
5b(c)(2)(H), 14, and 17(b)(10) of this Act shall be the 
exclusive remedies under this Act available to any person who 
sustains loss as a result of any alleged violation of this Act. 
Nothing in this subsection shall limit or abridge the rights of 
the parties to agree in advance of a dispute upon any forum for 
resolving claims under this section, including arbitration.
  (3) In any action arising from a violation in the execution 
of an order on the floor of a registered entity, the person 
referred to in paragraph (1) shall be liable for--
          (A) actual damages proximately caused by such 
        violation. If an award of actual damages is made 
        against a floor broker in connection with the execution 
        of a customer order, and the futures commission 
        merchant which selected the floor broker for the 
        execution of the customer order is held to be 
        responsible under section 2(a)(1) for the floor 
        broker's violation, such futures commission merchant 
        may be required to satisfy such award; and
          (B) where the violation is willful and intentional, 
        punitive or exemplary damages equal to no more than two 
        times the amount of such actual damages. If an award of 
        punitive or exemplary damages is made against a floor 
        broker in connection with the execution of a customer 
        order, and the futures commission merchant which 
        selected the floor broker for the execution of the 
        customer order is held to be responsible under section 
        2(a)(1) for the floor broker's violation, such futures 
        commission merchant may be required to satisfy such 
        award if the floor broker fails to do so, except that 
        such requirement shall apply to the futures commission 
        merchant only if it willfully and intentionally 
        selected the floor broker with the intent to assist or 
        facilitate the floor broker's violation.
  (4) Contract Enforcement Between Eligible Counterparties.--
          (A) In general.--No hybrid instrument sold to any 
        investor shall be void, voidable, or unenforceable, and 
        no party to a hybrid instrument shall be entitled to 
        rescind, or recover any payment made with respect to, 
        the hybrid instrument under this section or any other 
        provision of Federal or State law, based solely on the 
        failure of the hybrid instrument to comply with the 
        terms or conditions of section 2(f) or regulations of 
        the Commission.
          (B) Swaps.--No agreement, contract, or transaction 
        between eligible contract participants or persons 
        reasonably believed to be eligible contract 
        participants shall be void, voidable, or unenforceable, 
        and no party to such agreement, contract, or 
        transaction shall be entitled to rescind, or recover 
        any payment made with respect to, the agreement, 
        contract, or transaction under this section or any 
        other provision of Federal or State law, based solely 
        on the failure of the agreement, contract, or 
        transaction--
                  (i) to meet the definition of a swap under 
                section 1a; or
                  (ii) to be cleared in accordance with section 
                2(h)(1).
  (5) Legal Certainty for Long-term Swaps Entered Into Before 
the Date of Enactment of the Wall Street Transparency and 
Accountability Act of 2010.--
          (A) Effect on swaps.--Unless specifically reserved in 
        the applicable swap, neither the enactment of the Wall 
        Street Transparency and Accountability Act of 2010, nor 
        any requirement under that Act or an amendment made by 
        that Act, shall constitute a termination event, force 
        majeure, illegality, increased costs, regulatory 
        change, or similar event under a swap (including any 
        related credit support arrangement) that would permit a 
        party to terminate, renegotiate, modify, amend, or 
        supplement 1 or more transactions under the swap.
          (B) Position limits.--Any position limit established 
        under the Wall Street Transparency and Accountability 
        Act of 2010 shall not apply to a position acquired in 
        good faith prior to the effective date of any rule, 
        regulation, or order under the Act that establishes the 
        position limit; provided, however, that such positions 
        shall be attributed to the trader if the trader's 
        position is increased after the effective date of such 
        position limit rule, regulation, or order.
  (6) Contract Enforcement for Foreign Futures Contracts.--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.
  (b)(1)(A) A registered entity that fails to enforce any 
bylaw, rule, regulation, or resolution that it is required to 
enforce by section 5, 5b, 5c, 5h, or 21, (B) a licensed board 
of trade that fails to enforce any bylaw, rule, regulation, or 
resolution that it is required to enforce by the Commission, or 
(C) any registered entity that in enforcing any such bylaw, 
rule, regulation, or resolution violates this Act or any 
Commission rule, regulation, or order, shall be liable for 
actual damages sustained by a person who engaged in any 
transaction on or subject to the rules of such registered 
entity to the extent of such person's actual losses that 
resulted from such transaction and were caused by such failure 
to enforce or enforcement of such bylaws, rules, regulations, 
or resolutions.
  (2) A registered futures association that fails to enforce 
any bylaw or rule that is required under section 17 of this Act 
or in enforcing any such bylaw or rule violates this Act or any 
Commission rule, regulation, or order shall be liable for 
actual damages sustained by a person that engaged in any 
transaction specified in subsection (a) of this section to the 
extent of such person's actual losses that resulted from such 
transaction and were caused by such failure to enforce or 
enforcement of such bylaw or rule.
  (3) Any individual who, in the capacity as an officer, 
director, governor, committee member, or employee [of 
registered] of a registered entity or a registered futures 
association willfully aids, abets, counsels, induces, or 
procures any failure by any such entity to enforce (or any 
violation of the Act in enforcing) any bylaw, rule, regulation, 
or resolution referred to in paragraph (1) or (2) of this 
subsection, shall be liable for actual damages sustained by a 
person who engaged in any transaction specified in subsection 
(a) of this section on, or subject to the rules of, such 
registered entity or, in the case of an officer, director, 
governor, committee member, or employee of a registered futures 
association, any transaction specified in subsection (a) of 
this section, in either case to the extent of such person's 
actual losses that resulted from such transaction and were 
caused by such failure or violation.
  (4) A person seeking to enforce liability under this section 
must establish that the registered entity, registered futures 
association, officer, director, governor, committee member, or 
employee acted in bad faith in failing to take action or in 
taking such action as was taken, and that such failure or 
action caused the loss.
  (5) The rights of action authorized by this subsection shall 
be the exclusive remedy under this Act available to any person 
who sustains a loss as a result of (A) the alleged failure by a 
registered entity or registered futures association or by any 
officer, director, governor, committee member, or employee to 
enforce any bylaw, rule, regulation, or resolution referred to 
in paragraph (1) or (2) of this subsection, or (B) the taking 
of action in enforcing any bylaw, rule, regulation, or 
resolution referred to in this subsection that is alleged to 
have violated this Act, or any Commission rule, regulation, or 
order.
  (c) The United States district courts shall have exclusive 
jurisdiction of actions brought under this section. Any such 
action shall be brought not later than two years after the date 
the cause of action arises. Any action brought under subsection 
(a) of this section may be brought in any judicial district 
wherein the defendant is found, resides, or transacts business, 
or in the judicial district wherein any act or transaction 
constituting the violation occurs. Process in such action may 
be served in any judicial district of which the defendant is an 
inhabitant or wherever the defendant may be found.
  (d) The provisions of this section shall become effective 
with respect to causes of action accruing on or after the date 
of enactment of the Futures Trading Act of 1982: Provided, That 
the enactment of the Futures Trading Act of 1982 shall not 
affect any right of any parties which may exist with respect to 
causes of action accruing prior to such date.

SEC. 23. COMMODITY WHISTLEBLOWER INCENTIVES AND PROTECTION.

  (a) Definitions.--In this section:
          (1) Covered judicial or administrative action.--The 
        term ``covered judicial or administrative action'' 
        means any judicial or administrative action brought by 
        the Commission under this Act that results in monetary 
        sanctions exceeding $1,000,000.
          (2) Fund.--The term ``Fund'' means the Commodity 
        Futures Trading Commission Customer Protection Fund 
        established under subsection (g).
          (3) Monetary sanctions.--The term ``monetary 
        sanctions'', when used with respect to any judicial or 
        administrative action means--
                  (A) any monies, including penalties, 
                disgorgement, restitution, and interest ordered 
                to be paid; and
                  (B) any monies deposited into a disgorgement 
                fund or other fund pursuant to section 308(b) 
                of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 
                7246(b)), as a result of such action or any 
                settlement of such action.
          (4) Original information.--The term ``original 
        information'' means information that--
                  (A) is derived from the independent knowledge 
                or analysis of a whistleblower;
                  (B) is not known to the Commission from any 
                other source, unless the whistleblower is the 
                original source of the information; and
                  (C) is not exclusively derived from an 
                allegation made in a judicial or administrative 
                hearing, in a governmental report, hearing, 
                audit, or investigation, or from the news 
                media, unless the whistleblower is a source of 
                the information.
          (5) Related action.--The term ``related action'', 
        when used with respect to any judicial or 
        administrative action brought by the Commission under 
        this Act, means any judicial or administrative action 
        brought by an entity described in subclauses (I) 
        through (VI) of subsection (h)(2)(C) that is based upon 
        the original information provided by a whistleblower 
        pursuant to subsection (a) that led to the successful 
        enforcement of the Commission action.
          (6) Successful resolution.--The term ``successful 
        resolution'', when used with respect to any judicial or 
        administrative action brought by the Commission under 
        this Act, includes any settlement of such action.
          (7) Whistleblower.--[The term]
                  (A) In general._The term  ``whistleblower'' 
                means any individual, or 2 or more individuals 
                acting jointly, who provides information 
                relating to a violation of this Act to the 
                Commission, in a manner established by rule or 
                regulation by the Commission.
                  (B) Special rule.--Solely for the purposes of 
                subsection (h)(1), the term ``whistleblower'' 
                includes any individual who takes, or 2 or more 
                individuals acting jointly who take, an action 
                described in subsection (h)(1)(A).
  (b) Awards.--
          (1) In general.--In any covered judicial or 
        administrative action, or related action, the 
        Commission, under regulations prescribed by the 
        Commission and subject to subsection (c), shall pay an 
        award or awards to 1 or more whistleblowers who 
        voluntarily provided original information to the 
        Commission that led to the successful enforcement of 
        the covered judicial or administrative action, or 
        related action, in an aggregate amount equal to--
                  (A) not less than 10 percent, in total, of 
                what has been collected of the monetary 
                sanctions imposed in the action or related 
                actions; and
                  (B) not more than 30 percent, in total, of 
                what has been collected of the monetary 
                sanctions imposed in the action or related 
                actions.
          (2) Payment of awards.--Any amount paid under 
        paragraph (1) shall be paid from the Fund.
          (3) Timely processing of claims.--
                  (A) Initial disposition.--
                          (i) In general.--Except as provided 
                        in subparagraph (B), and subject to 
                        clause (ii), the Commission shall make 
                        an initial disposition with respect to 
                        a claim submitted by a whistleblower 
                        for an award under this section 
                        (referred to in this paragraph as an 
                        ``award claim'') not later than 1 year 
                        after the deadline established by the 
                        Commission, by rule, for the 
                        whistleblower to file the award claim.
                          (ii) Multiple actions.--If a covered 
                        judicial or administrative action 
                        involves 1 or more related actions, the 
                        requirement under clause (i) shall 
                        apply with respect to the latest 
                        deadline with respect to the actions.
                  (B) Exceptions.--
                          (i) Initial extension.--If the 
                        Director of the Division of Enforcement 
                        of the Commission (referred to in this 
                        paragraph as the ``Director''), or the 
                        designee of the Director, determines 
                        that an award claim is sufficiently 
                        complex or involves more than 1 
                        whistleblower, or if other good cause 
                        exists such that the Commission cannot 
                        reasonably satisfy the requirement 
                        under subparagraph (A), the Director or 
                        the designee, as applicable, after 
                        providing notice to the Chairman of the 
                        Commission (referred to in this 
                        paragraph as the ``Chairman''), may 
                        extend the deadline with respect to the 
                        satisfaction of that subparagraph by 
                        not more than 180 days.
                          (ii) Additional extensions.--If, 
                        after providing an extension under 
                        clause (i), the Director, or the 
                        designee of the Director, determines 
                        that the Commission cannot reasonably 
                        satisfy the requirement under 
                        subparagraph (A) with respect to an 
                        award claim, as extended under that 
                        clause, the Director or the designee, 
                        as applicable, after providing notice 
                        to the Chairman, may extend the period 
                        in which the Commission may satisfy 
                        subparagraph (A) by 1 additional 180-
                        day period.
                          (iii) Notice to whistleblower 
                        required.--If the Director, or the 
                        designee of the Director, exercises 
                        authority under clause (i) or (ii), the 
                        Director or the designee, as 
                        applicable, shall submit to the