69–008 

115TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 115–3 

PROVIDING FOR CONSIDERATION OF THE BILL (H.R. 78) TO IMPROVE THE 

CONSIDERATION BY THE SECURITIES AND EXCHANGE COMMISSION OF 

THE COSTS AND BENEFITS OF ITS REGULATIONS AND ORDERS; PROVIDING FOR CONSIDERATION OF THE BILL (H.R. 238) TO REAUTHORIZE 

THE COMMODITY FUTURES TRADING COMMISSION, TO BETTER PROTECT FUTURES CUSTOMERS, TO PROVIDE END-USERS WITH MARKET 

CERTAINTY, TO MAKE BASIC REFORMS TO ENSURE TRANSPARENCY 

AND ACCOUNTABILITY AT THE COMMISSION, TO HELP FARMERS, 

RANCHERS, AND END-USERS MANAGE RISKS, TO HELP KEEP CONSUMER COSTS LOW, AND FOR OTHER PURPOSES; AND FOR OTHER PURPOSES 

JANUARY 10, 2017.—Referred to the House Calendar and ordered to be printed 

Mr. NEWHOUSE, from the Committee on Rules, 

submitted the following 

R E P O R T 

[To accompany H. Res. 40] 

The Committee on Rules, having had under consideration House 

Resolution 40, by a nonrecord vote, report the same to the House 

with the recommendation that the resolution be adopted. 

SUMMARY OF PROVISIONS OF THE RESOLUTION

The resolution provides for consideration of H.R. 78, the SEC 

Regulatory Accountability Act, under a structured rule. The resolution provides one hour of general debate equally divided and controlled by the chair and ranking minority member of the Committee on Financial Services or their respective designees. The resolution waives all points of order against consideration of the bill. 

The resolution provides that the bill shall be considered as read. 

The resolution waives all points of order against provisions in the 

bill. The resolution makes in order only those amendments printed 

in part A of this report. Each such amendment may be offered only 

in the order printed in this report, may be offered only by a Member designated in this report, shall be considered as read, shall be 

debatable for the time specified in this report equally divided and 

controlled by the proponent and an opponent, shall not be subject 

to amendment, and shall not be subject to a demand for division 

of the question in the House or in the Committee of the Whole. The 

resolution waives all points of order against the amendments printVerDate Sep 11 2014 04:14 Jan 11, 2017 Jkt 069008 PO 00000 Frm 00001 Fmt 6659 Sfmt 6602 E:\HR\OC\HR003.XXX HR003

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ed in part A of this report. The resolution provides one motion to 

recommit with or without instructions. 

Section 2 of the resolution provides for consideration of H.R. 238, 

the Commodity End-User Relief Act, under a structured rule. The 

resolution provides one hour of general debate equally divided and 

controlled by the Majority Leader and the Minority Leader or their 

respective designees. The resolution waives all points of order 

against consideration of the bill. The resolution makes in order as 

original text for the purpose of amendment an amendment in the 

nature of a substitute consisting of the text of the Rules Committee 

Print 115–2, and provides that it shall be considered as read. The 

resolution waives all points of order against that amendment in the 

nature of a substitute. The resolution makes in order only those 

further amendments printed in part B of this report. Each such 

amendment may be offered only in the order printed in this report, 

may be offered only by a Member designated in this report, shall 

be considered as read, shall be debatable for the time specified in 

this report equally divided and controlled by the proponent and an 

opponent, shall not be subject to amendment, and shall not be subject to a demand for division of the question in the House or in the 

Committee of the Whole. The resolution waives all points of order 

against the amendments printed in part B of this report. The resolution provides one motion to recommit with or without instructions. 

Section 3 of the resolution provides that on any legislative day 

during the period from January 16, 2017, through January 20, 

2017: the Journal of the proceedings of the previous day shall be 

considered as approved; and the Chair may at any time declare the 

House adjourned to meet at a date and time to be announced by 

the Chair in declaring the adjournment. 

Section 4 of the resolution provides that the Speaker may appoint Members to perform the duties of the Chair for the duration 

of the period addressed by section 3 of the resolution as though 

under clause 8(a) of rule I. 

Section 5 of the resolution provides that it shall be in order at 

any time on the legislative day of January 13, 2017, for the Speaker to entertain motions that the House suspend the rules as though 

under clause 1 of rule XV, and that the Speaker or his designee 

shall consult with the Minority Leader or her designee on the designation of any matter for consideration pursuant to this section. 

EXPLANATION OF WAIVERS

Although the resolution waives all points of order against consideration of H.R. 78, the Committee is not aware of any points of 

order. The waiver is prophylactic in nature. 

Although the resolution waives all points of order against provisions in H.R. 78, the Committee is not aware of any points of order. 

The waiver is prophylactic in nature. 

Although the resolution waives all points of order against the 

amendments to H.R. 78 printed in part A of this report, the Committee is not aware of any points of order. The waiver is prophylactic in nature. 

Although the resolution waives all points of order against consideration of H.R. 238, the Committee is not aware of any points of 

order. The waiver is prophylactic in nature. 


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Although the resolution waives all points of order against the 

amendment in the nature of a substitute made in order as original 

text, the Committee is not aware of any points of order. The waiver 

is prophylactic in nature. 

Although the resolution waives all points of order against the 

amendments to H.R. 238 printed in part B of this report, the Committee is not aware of any points of order. The waiver is prophylactic in nature. 

COMMITTEE VOTES

The results of each record vote on an amendment or motion to 

report, together with the names of those voting for and against, are 

printed below: 

Rules Committee record vote No. 8 

Motion by Mr. McGovern to report open rules for H.R. 78 and 

H.R. 238. 

Defeated: 4–8 

Majority Members Vote Minority Members Vote 

Mr. Cole ............................................................ Nay Ms. Slaughter .................................................. Yea 

Mr. Woodall ...................................................... Nay Mr. McGovern ................................................... Yea 

Mr. Burgess ...................................................... Nay Mr. Hastings of Florida ................................... Yea 

Mr. Collins ........................................................ ................... Mr. Polis ........................................................... Yea 

Mr. Byrne .......................................................... Nay 

Mr. Newhouse ................................................... Nay 

Mr. Buck ........................................................... Nay 

Ms. Cheney ....................................................... Nay 

Mr. Sessions, Chairman ................................... Nay 

SUMMARY OF THE AMENDMENTS TO H.R. 78 IN PART A MADE IN ORDER

1. Waters (CA): Requires the SEC to identify, analyze and address potential conflicts of interest related to its rulemakings. (10 

minutes) 

2. Vela ́zquez (NY): Requires the SEC consider the protection of 

investors, in addition to promoting efficiency, competition, and capital formation when conducting such a review and also expressly 

instructs the SEC to consider the public interest, the protection of 

investors as well as the promotion of efficiency, competition, and 

capital formation when conducting such a review of existing SEC 

regulations. (10 minutes) 

3. Green, Al (TX): Exempts regulations promulgated to maintain 

or support U.S. financial stability or prevent or reduce systemic 

risk. (10 minutes) 

4. DeSaulnier (CA): Requires the Chairman of the SEC and his 

immediate family to divest from too-big-to-fail banks. (10 minutes) 

5. Raskin (MD): Requires the Chairman of the Securities and 

Exchange Commission to be trained on ethical standards and codes 

of conduct to ensure all regulations enacted are not done so with 

a conflict of interest, specifically regarding prior employment and 

legal representation of too-big-to-fail banks. (10 minutes) 

SUMMARY OF THE AMENDMENTS TO H.R 238 IN PART B MADE IN ORDER

1. Aderholt (AL): Amends the Commodity Exchange Act to give 

the Commodity Futures Trading Commission authority to designate other agencies to manage its leases. (10 minutes) 


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2. Scott, Austin (GA): Reforms the Customer Protection Fund at 

the CFTC to amend the size of the fund, annual expenditures from 

the fund and return excess balance to the Treasury. (10 minutes) 

3. Conaway (TX): Makes technical and conforming changes. (10 

minutes) 

4. Conaway (TX): Makes clear Congress’s intent that the Commission may impose and implement position limits as it finds necessary, provided the Commission makes a finding prior to imposing 

such limits. It makes no changes to the longstanding federal position limits regime for the enumerated agricultural commodities or 

the existing statutory requirements that Designated Contract Markets impose position limits or accountability levels on all contracts. 

(10 minutes) 

5. Duffy (WI), Scott, David (GA): Prohibits the CFTC from compelling the production of algorithmic trading source code and similar intellectual property unless it has issued a subpoena. (10 minutes) 

6. LaMalfa (CA): Prevents a situation in which an end-user loses 

its ability to rely on the end-user exception to the clearing requirement due simply to the positive performance of transactions entered into solely to mitigate the prospect of falling revenues and 

asset values. (10 minutes) 

7. Lucas (OK): Exempts all inter-affiliate transactions from 

being regulated as ‘‘swaps’’ under the Dodd-Frank related provisions of the Commodity Exchange Act (‘‘CEA’’) and Commodity Futures Trading Commission (‘‘CFTC’’) regulations promulgated 

thereunder. (10 minutes) 

8. Hartzler (MO): Delays implementation of the CFTC Ownership and Control Reports Rule until the Chairman determines the 

rule has been amended by adjusting reporting trading volume levels to 300 contracts per day, removing the requirements for natural 

person controller data, and ensuring the rule does not require entities to violate foreign privacy laws. (10 minutes) 

PART A—TEXT OF AMENDMENTS TO H.R. 78 MADE IN ORDER

1. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE WATERS OF

CALIFORNIA OR HER DESIGNEE, DEBATABLE FOR 10 MINUTES

Page 3, line 3, strike ‘‘and’’. 

Page 3, line 8, strike the period and insert ‘‘; and’’. 

Page 3, after line 8, insert the following: 

‘‘(E) in consultation with the Office of Ethics Counsel of 

the Commission, identify any former nongovernmental employer of a Commissioner, Director, Deputy Director, Associate Director, or Assistant Director that would receive direct or indirect benefit from a rule or regulation, analyze 

the benefits to such employer, and whether the regulation 

should be amended to address any potential conflict of interest or appearance of a conflict of interest.’’. 

Page 6, after line 5, insert the following: 

‘‘(5) CONFLICTS OF INTEREST.—The Commission shall identify 

the employers of any Commissioners, Directors, Deputy Directors, Associate Directors, and Assistant Directors who have left 

the Commission within five years of the scheduled adoption of 

the final rule, and whether such employers receive direct or inVerDate Sep 11 2014 04:14 Jan 11, 2017 Jkt 069008 PO 00000 Frm 00004 Fmt 6659 Sfmt 6602 E:\HR\OC\HR003.XXX HR003

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direct benefits, and whether the Commission should amend the 

rule to address the identified conflict of interest.’’. 

Page 7, line 19, insert after the period the following: ‘‘The assessment plan shall also include an analysis of whether and how any 

former nongovernmental employer of a Commissioner, Director, 

Deputy Director, Associate Director, or Assistant Director, or the 

current employer of a former Commissioner, Director, Deputy Director, Associate Director, or Assistant Director who departed the 

Commission within five years of the scheduled adoption of the regulation, directly and indirectly benefits from the regulation, and a 

recommendation as to whether such regulation should be amended 

to address the identified conflict of interest.’’. 

2. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE VELA ́ ZQUEZ

OF NEW YORK OR HER DESIGNEE, DEBATABLE FOR 10 MINUTES

Page 4, line 1, insert after ‘‘making’’ the following: ‘‘, in addition 

to being in the interest of protecting investors,’’. 

Page 5, line 21, insert after the period the following: ‘‘Whenever 

pursuant to this paragraph the Commission is engaged in a review, 

it shall consider whether an action is necessary or appropriate in 

the public interest, the protection of investors, and whether the action will promote efficiency, competition, and capital formation.’’. 

3. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE GREEN OF

TEXAS OR HIS DESIGNEE, DEBATABLE FOR 10 MINUTES

Page 10, line 16, strike ‘‘and’’. 

Page 10, line 20, strike the first period and all that follows and 

insert ‘‘; and’’. 

Page 10, after line 20, insert the following: 

‘‘(iv) a regulation promulgated to maintain or support U.S. financial stability or prevent or reduce systemic risk.’’. 

4. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE

DESAULNIER OF CALIFORNIA OR HIS DESIGNEE, DEBATABLE FOR

10 MINUTES

At the end of the bill, add the following new section: 

SEC. 5. DIVESTITURE REQUIREMENT. 

The amendment made by section 2 shall not take effect until the 

Chairman of the Securities and Exchange Commission, and all immediate family members of the Chairman, divests all securities 

owned by the Chairman and such immediate family members of 

the Chairman from any financial institution regulated by the Securities and Exchange Commission to ensure that proper and fair 

rule-making is administered in accordance with this Act. 

5. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE RASKIN OF

MARYLAND OR HIS DESIGNEE, DEBATABLE FOR 10 MINUTES

At the end of the bill, add the following new section: 


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SEC. 5. TRAINING REQUIREMENT FOR THE CHAIRMAN AND COMMISSIONERS OF THE SEC. 

The amendment made by section 2 shall not take effect until the 

Chairman and each Commissioner of the Securities and Exchange 

Commission undergoes effective training on conduct and ethical 

standards to ensure all actions of the Commission are done in a 

manner free of conflicts of interest, specifically those related to 

prior employment at financial institutions and prior legal representation of financial institutions. 

PART B—TEXT OF AMENDMENTS TO H.R. 238 MADE IN ORDER

1. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE ADERHOLT

OF ALABAMA OR HIS DESIGNEE, DEBATABLE FOR 10 MINUTES

Add at the end of title II the following: 

SEC. 213. ELIMINATION OF CERTAIN LEASING AUTHORITY OF THE 

COMMISSION. 

Section 12(b)(3) of the Commodity Exchange Act (7 U.S.C. 

16(b)(3)) is amended— 

(1) by striking ‘‘including, but not limited to,’’ and inserting 

‘‘excluding’’; and 

(2) by adding at the end the following new sentence: ‘‘In the 

case of an existing lease contract entered into under this paragraph, the Commission may not extend the lease term, but 

may agree to any other contract modification that does not result in any additional cost to the Federal Government.’’. 

2. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE SCOTT OF

GEORGIA OR HIS DESIGNEE, DEBATABLE FOR 10 MINUTES

At the end of title II, add the following: 

SEC. 213. REFORM OF THE CUSTOMER PROTECTION FUND. 

Section 23(g) of the Commodity Exchange Act (7 U.S.C. 26(g)) is 

amended— 

(1) in paragraph (2)— 

(A) in the matter preceding subparagraph (A), by striking ‘‘or fiscal year limitation’’; 

(B) in subparagraph (A), by striking ‘‘; and’’ and inserting ‘‘, without fiscal year limitation;’’; and 

(C) in subparagraph (B), by striking ‘‘thereunder.’’ and 

inserting ‘‘, the total amount of which shall not exceed 

$5,000,000 per fiscal year.’’; 

(2) in paragraph (3)(A), by striking ‘‘unless the balance of the 

Fund at the time the monetary judgment is collected exceeds 

$100,000,000’’ and inserting ‘‘, but only to the extent that the 

resulting balance of the Fund does not exceed $50,000,000’’; 

and 

(3) by redesignating paragraph (5) as paragraph (6) and inserting after paragraph (4) the following: 

‘‘(5) REVERSION TO TREASURY.—Notwithstanding the preceding provisions of this subsection, to the extent the balance 

of the Fund exceeds $50,000,000, the excess amount shall be 


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deposited in the Treasury of the United States as miscellaneous receipts.’’. 

3. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE CONAWAY

OF TEXAS OR HIS DESIGNEE, DEBATABLE FOR 10 MINUTES

Page 32, after line 3, insert the following: 

(L) Section 3a(68)(A)(i) of the Securities Exchange Act of 

1934 (15 U.S.C. 78c(a)(68)(A)(i)) is amended by striking 

‘‘(47)(B)(x)’’ and inserting ‘‘(48)(B)(x)’’. 

(M) Section 3C(g)(3)(A)(v) of the Securities Exchange Act 

of 1934 (15 U.S.C. 78c-3(g)(3)(A)(v)) is amended by striking 

‘‘1a(10)’’ and inserting ‘‘1a(11)’’. 

(N) Section 6(g)(5)(B)(i) of the Securities Exchange Act of 

1934 (15 U.S.C. 78f(g)(5)(B)(i)) is amended— 

(i) in sublcause (I), by striking ‘‘1a(18)(B)(ii)’’ and inserting ‘‘1a(19)(B)(ii)’’; and 

(ii) in subclause (II), by striking ‘‘1a(18)’’ and inserting ‘‘1a(19)’’. 

(O) Section 15F(h)(5)(A)(i) of the Securities Exchange 

Act of 1934 (15 U.S.C. 78o-10(h)(5)(A)(i)) is amended by 

striking ‘‘1a(18)’’ and inserting ‘‘1a(19)’’. 

Page 50, line 21, strike ‘‘1a(10)(C)’’ and insert ‘‘1a(11)(C)’’. 

4. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE CONAWAY

OF TEXAS OR HIS DESIGNEE, DEBATABLE FOR 10 MINUTES

Page 40, line 4, strike ‘‘paragraphs (2) and (5) of subsection (a)’’ 

and insert ‘‘paragraph (1)’’. 

Add at the end of title III the following: 

SEC. 318. REQUIREMENTS RELATED TO POSITION LIMITS. 

(a) IN GENERAL.—Section 4a(a) of the Commodity Exchange Act 

(7 U.S.C. 6a(a)) is amended— 

(1) by striking paragraphs (2), (3), (5), and (6); and 

(2) by redesignating paragraphs (4) and (7) as paragraphs (2) 

and (3), respectively. 

(b) BONA FIDE HEDGING TRANSACTION DEFINITION.—Section 

4a(c)(2)(A)(i) of such Act (7 U.S.C. 6a(c)(2)(A)(i)) is amended by inserting ‘‘normally’’ before ‘‘represents’’. 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall take effect on the date of the enactment of this section. 

5. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE DUFFY OF

WISCONSIN OR HIS DESIGNEE, DEBATABLE FOR 10 MINUTES

Add at the end of title III the following: 

SEC. 318. PROCEDURE FOR OBTAINING CERTAIN INTELLECTUAL 

PROPERTY. 

The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by 

inserting after section 4t the following: 

‘‘SEC. 4u. PROCEDURE FOR OBTAINING CERTAIN INTELLECTUAL 

PROPERTY. 

‘‘The Commission is not authorized to compel persons to produce 

or furnish algorithmic trading source code or similar intellectual 


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property to the Commission, unless the Commission first issues a 

subpoena.’’. 

6. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE LAMALFA

OF CALIFORNIA OR HIS DESIGNEE, DEBATABLE FOR 10 MINUTES

At the end of title III, insert the following: 

SEC. lll. DETERMINATION OF PREDOMINANT ENGAGEMENT. 

Section 2(h)(7)(C) of the Commodity Exchange Act (7 U.S.C. 

2(h)(7)(C)), as amended by section 314 of this Act, is amended by 

adding at the end the following: 

‘‘(v) In determining whether a person is predominantly engaged in a business or activity for purposes 

of clause (i)(VIII), there shall be excluded revenues 

and assets that are, or result from, any transaction 

that is entered into solely for purposes of hedging or 

mitigating commercial risk (as defined by the Commission for purposes of subparagraph (A)(ii)).’’. 

7. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE LUCAS OF

OKLAHOMA OR HIS DESIGNEE, DEBATABLE FOR 10 MINUTES

At the end of title III, insert the following: 

SEC. lll. TREATMENT OF TRANSACTIONS BETWEEN AFFILIATES. 

Section 1a(48) of the Commodity Exchange Act (7 U.S.C. 1a(47)), 

as so redesignated by section 304(b)(1) of this Act, is amended by 

adding at the end the following: 

‘‘(G) TREATMENT OF TRANSACTIONS BETWEEN AFFILIATES.— 

‘‘(i) EXEMPTION FROM SWAP RULES.—An agreement, 

contract, or transaction described in subparagraphs 

(A) through (F) shall not be regulated as a swap under 

this Act if all of the following apply with respect to the 

agreement, contract, or transaction: 

‘‘(I) AFFILIATION.—1 counterparty, directly or indirectly, holds a majority ownership interest in 

the other counterparty, or a third party, directly 

or indirectly, holds a majority ownership interest 

in both counterparties. 

‘‘(II) FINANCIAL STATEMENTS.—The affiliated 

counterparty that holds the majority interest in 

the other counterparty or the third party that, directly or indirectly, holds the majority interests in 

both affiliated counterparties, reports its financial 

statements on a consolidated basis under generally accepted accounting principles or International Financial Reporting Standards, or other 

similar standards, and the financial statements 

include the financial results of the majority-owned 

affiliated counterparty or counterparties. 

‘‘(ii) REPORTING REQUIREMENT.—If at least 1 

counterparty to an agreement, contract, or transaction 

that meets the requirements of clause (i) is a swap 

dealer or major swap participant, that counterparty 


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shall report the agreement, contract, or transaction 

pursuant to section 4r, within such time period as the 

Commission may by rule or regulation prescribe— 

‘‘(I) to a swap data repository; or 

‘‘(II) if there is no swap data repository that 

would accept the agreement, contract or transaction, to the Commission. 

‘‘(iii) RISK MANAGEMENT REQUIREMENT.—If at least 1 

counterparty to an agreement, contract, or transaction 

that meets the requirements of clause (i) is a swap 

dealer or major swap participant, the agreement, contract, or transaction shall be subject to a centralized 

risk management program pursuant to section 4s(j) 

that is reasonably designed to monitor and to manage 

the risks associated with the agreement, contract, or 

transaction. 

‘‘(iv) VARIATION MARGIN REQUIREMENT.—Affiliated 

counterparties to an agreement, contract, or transaction that meets the requirements of clause (i) shall 

exchange variation margin to the extent prescribed 

under any rule promulgated by the Commission or any 

prudential regulator pursuant to section 4s(e). 

‘‘(v) ANTI-EVASION REQUIREMENT.—An agreement, 

contract, or transaction that meets the requirements 

of clause (i) shall not be structured to evade the DoddFrank Wall Street Reform and Consumer Protection 

Act in violation of any rule promulgated by the Commission pursuant to section 721(c) of such Act.’’. 

8. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE HARTZLER

OF MISSOURI OR HER DESIGNEE, DEBATABLE FOR 10 MINUTES

At the end of the bill, add the following: 

SEC. lll. DELAY IN FULL IMPLEMENTATION OF THE FINAL RULE 

ON OWNERSHIP AND CONTROL REPORTING. 

The Commodity Futures Trading Commission may not enforce 

non-compliance with the final rule titled ‘‘Ownership and Control 

Reports, Forms 102/2S, 40/40S, and 71’’ (78 FR 69178; November 

18, 2013) until the Commission votes to approve a final rule that 

has been amended to— 

(1) provide that the reportable trading volume level shall be 

at least 300 contracts; 

(2) provide that the reporting entity shall not be required to 

provide natural person controller data; and 

(3) provide that the reporting entity is not obligated to supply data that violates foreign privacy laws. 

Æ 


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