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[House Report 113-476]
[From the U.S. Government Publishing Office]

113th Congress   }                                          {    Report
                        HOUSE OF REPRESENTATIVES
 2d Session      }                                          {   113-476

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PROVIDING FOR CONSIDERATION OF THE BILL (H.R. 4413) 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

                                _______
                                

   June 18, 2014.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

              Mr. Sessions, from the Committee on Rules, 
                        submitted the following

                              R E P O R T

                       [To accompany H. Res. 629]

    The Committee on Rules, having had under consideration 
House Resolution 629, by a record vote of 8 to 2, 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. 4413, the 
Customer Protection and End User Relief 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 Agriculture. The resolution 
waives all points of order against consideration of the bill. 
The resolution makes in order as original text for purpose of 
amendment an amendment in the nature of a substitute consisting 
of the text of Rules Committee Print 113-47 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 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 this 
report. The resolution provides one motion to recommit with or 
without instructions.

                         EXPLANATION OF WAIVERS

    Although the resolution waives all points of order against 
consideration of the bill, the Committee is not aware of any 
points of order. The waiver is prophylactic in nature.
    The waiver of all points of order against the amendment in 
the nature of a substitute to H.R. 4413 made in order as 
original text includes a waiver of clause 7 of rule XVI, 
requiring that no motion or proposition on a subject different 
from that under consideration shall be admitted under color of 
amendment. Provisions contained in Rules Committee Print 113-47 
fall outside of the jurisdiction of the Committee on 
Agriculture.
    Although the resolution waives all points of order against 
the amendments printed in 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. 142

    Motion by Ms. Slaughter to divide the debate time equally 
between the Committees on Agriculture and Financial Services. 
Defeated: 2-8

----------------------------------------------------------------------------------------------------------------
                Majority Members                      Vote               Minority Members               Vote
----------------------------------------------------------------------------------------------------------------
Ms. Foxx........................................          Nay   Ms. Slaughter.....................          Yea
Mr. Bishop of Utah..............................          Nay   Mr. McGovern......................  ............
Mr. Cole........................................          Nay   Mr. Hastings of Florida...........          Yea
Mr. Woodall.....................................          Nay   Mr. Polis.........................  ............
Mr. Nugent......................................          Nay
Mr. Webster.....................................          Nay
Ms. Ros-Lehtinen................................  ............
Mr. Burgess.....................................          Nay
Mr. Sessions, Chairman..........................          Nay
----------------------------------------------------------------------------------------------------------------

Rules Committee record vote No. 143

    Motion by Mr. Hastings of Florida to report an open rule. 
Defeated: 2-8

----------------------------------------------------------------------------------------------------------------
                Majority Members                      Vote               Minority Members               Vote
----------------------------------------------------------------------------------------------------------------
Ms. Foxx........................................          Nay   Ms. Slaughter.....................          Yea
Mr. Bishop of Utah..............................          Nay   Mr. McGovern......................  ............
Mr. Cole........................................          Nay   Mr. Hastings of Florida...........          Yea
Mr. Woodall.....................................          Nay   Mr. Polis.........................  ............
Mr. Nugent......................................          Nay
Mr. Webster.....................................          Nay
Ms. Ros-Lehtinen................................  ............
Mr. Burgess.....................................          Nay
Mr. Sessions, Chairman..........................          Nay
----------------------------------------------------------------------------------------------------------------

Rules Committee record vote No. 144

    Motion by Ms. Foxx to report the rule. Adopted: 8-2

----------------------------------------------------------------------------------------------------------------
                Majority Members                      Vote               Minority Members               Vote
----------------------------------------------------------------------------------------------------------------
Ms. Foxx........................................          Yea   Ms. Slaughter.....................          Nay
Mr. Bishop of Utah..............................          Yea   Mr. McGovern......................  ............
Mr. Cole........................................          Yea   Mr. Hastings of Florida...........          Nay
Mr. Woodall.....................................          Yea   Mr. Polis.........................  ............
Mr. Nugent......................................          Yea
Mr. Webster.....................................          Yea
Ms. Ros-Lehtinen................................  ............
Mr. Burgess.....................................          Yea
Mr. Sessions, Chairman..........................          Yea
----------------------------------------------------------------------------------------------------------------

                SUMMARY OF THE AMENDMENTS MADE IN ORDER

    1. DeFazio (OR): Adds one requirement to the study on high 
frequency trading: Whether such trading increases market 
volatility, including short term market swings such as the 
``flash crash.'' (10 minutes)
    2. Jackson Lee (TX): Requires a study on entities regulated 
by the Commodities Futures Trading Commission. (10 minutes)
    3. DelBene (WA), Gibson (NY), Vargas (CA): Ensures that the 
Commission's assessment of costs and benefits regarding rules 
and orders will be affirmed by a court unless that assessment 
is found to be an abuse of discretion. (10 minutes)
    4. Waters (CA): Prohibits judicial review of any 
consideration by the CFTC of the costs and benefits of its 
rules and orders. (10 minutes)
    5. Moore, Gwen (WI): Strikes Section 203, and replaces with 
the SENSE OF CONGRESS that the Commodities Future Trading 
Commission is already required by law to consider costs and 
benefits when promulgating rules and issuing orders, and is 
held accountable to this requirement by courts. (10 minutes)
    6. Jackson Lee (TX): Preserves existing law by striking 
``United States Court of Appeals for the District of Columbia 
Circuit or the United States Court of Appeals for the 
circuit,'' and replaces with ``United States District Court for 
the District of Columbia or the United States District Court 
for the district.'' (10 minutes)
    7. Fincher (TN): Directs the Comptroller General of the 
United States to conduct a study of the efficiencies in leasing 
and rental costs at the Commodity Futures Trading Commission. 
(10 minutes)
    8. Garrett (NJ): Exempts Registered Investment Companies 
(RICs) that are currently registered with the Securities and 
Exchange Commission (SEC) under the Investment Company Act of 
1940 from duplicative registration requirements with the 
Commodity Futures Trading Commission (CFTC). The SEC will 
continue to have full regulatory oversight and enforcement 
authority over RICs. Does not remove the jurisdiction and 
regulatory authority that the CFTC has over all futures, 
options and swaps transactions that the RICs invest in on 
behalf of their customers who are pensioners, retirees, and 
savers. (10 minutes)

                    TEXT OF AMENDMENTS MADE IN ORDER

 1. An Amendment To Be Offered by Representative DeFazio of Oregon or 
                 His Designee, Debatable for 10 Minutes

  Page 10, after line 12, insert the following:
          (5) Whether such trading increases market volatility, 
        including short term market swings.
                              ----------                              

2. An Amendment To Be Offered by Representative Jackson Lee of Texas or 
                 Her Designee, Debatable for 10 Minutes

  Page 10, after line 12, insert the following:

SEC. ___. REPORT ON ENTITIES REGULATED BY THE CFTC.

  Not later than 2 years after the date of the enactment of 
this Act, the Commodity Futures Trading Commission shall submit 
to the Committees on Agriculture, Financial Services, and the 
Judiciary of the House of Representatives and the Committees on 
Agriculture, Nutrition, and Forestry, Banking, Housing, and 
Urban Affairs, and the Judiciary of the Senate a report 
examining the number of entities regulated by the Commodity 
Futures Trading Commission, and with respect to those entities, 
their size, practice models, and assets under management, and 
those rendered defunct via bankruptcy or obsolescence.
                              ----------                              

 3. An Amendment To Be Offered by Representative DelBene of Washington 
               or Her Designee, Debatable for 10 Minutes

  Page 11, strike lines 5 through 7 and insert the following:
  Section 15(a) of the Commodity Exchange Act (7 U.S.C. 19(a)) 
is amended--
          (1) by striking paragraphs (1) and (2) and inserting 
        the following:
  Page 12, line 22, strike the last period and insert ``; 
and''.
  Page 12, after line 22, insert the following:
          (2) by adding at the end the following:
          ``(4) Judicial review.--Notwithstanding section 
        24(d), a court shall affirm a Commission assessment of 
        costs and benefits under this subsection, unless the 
        court finds the assessment to be an abuse of 
        discretion.''.
                              ----------                              

4. An Amendment To Be Offered by Representative Waters of California or 
                 Her Designee, Debatable for 10 Minutes

  Page 11, strike lines 5 through 7 and insert the following:
  Section 15(a) of the Commodity Exchange Act (7 U.S.C. 19(a)) 
is amended--
          (1) by striking paragraphs (1) and (2) and inserting 
        the following:
  Page 12, line 22, strike the last period and insert ``; 
and''.
  Page 12, after line 22, insert the following:
          (2) by adding at the end the following:
          ``(4) Judicial review.--This subsection is intended 
        only to improve the internal management of the 
        Commission and any estimate, analysis, statement, 
        description or report prepared under this subsection, 
        and any compliance or noncompliance with the provisions 
        of this subsection, and any determination concerning 
        the applicability of the provisions of this subsection 
        shall not be subject to judicial review. No provision 
        of this subsection shall be construed to create any 
        right or benefit, substantive or procedural, 
        enforceable at law by a party against the United 
        States, its agencies, its officers, or any person.''.
                              ----------                              

 5. An Amendment To Be Offered by Representative Moore of Wisconsin or 
                 Her Designee, Debatable for 10 Minutes

  Page 11, strike line 1 and all that follows through page 12, 
line 22, and insert the following:

SEC. ___. SENSE OF THE CONGRESS.

  It is the sense of the Congress that the Commodity Futures 
Trading Commission is required by law to consider the costs and 
benefits when promulgating rules and issuing orders, and is 
held accountable to this requirement by our courts. Current law 
requires the Commission to conduct economic analyses pursuant 
to the Paperwork Reduction Act, the Congressional Review Act, 
and the Regulatory Flexibility Act, as other agencies do. 
Unlike any other financial regulator, the Commission is also 
bound by the Commodity Exchange Act to consider the protection 
of market participants and the public; the efficiency, 
competitiveness, and financial integrity of futures markets; 
price discovery; sound risk management practices; and other 
public interest considerations. Notably, the Federal courts 
hold the Commission accountable and vacate rulemaking that does 
not meet statutory requirements, as demonstrated by the ruling 
by a United States district court on the Commission's rule on 
commodity position limits.
                              ----------                              

6. An Amendment To Be Offered by Representative Jackson Lee of Texas or 
                 Her Designee, Debatable for 10 Minutes

  Page 19, beginning on line 15, strike ``United States Court 
of Appeals for the District of Columbia Circuit or the United 
States Court of Appeals for the circuit'' and insert ``United 
States District Court for the District of Columbia or the 
United States District Court for the district''.
                              ----------                              

7. An Amendment To Be Offered by Representative Fincher of Tennessee or 
                 His Designee, Debatable for 10 Minutes

  Page 24, after line 21, insert the following:

SEC. ___. GAO STUDY ON COMMISSION LEASES.

  (a) The Comptroller General of the United States shall, in 
consultation with the Commodity Futures Trading Commission 
Inspector General, conduct a study and publish a report 
regarding achieving efficiencies in leasing and rental costs at 
the Commodity Futures Trading Commission.
  (b) The report shall be published within 90 days after the 
date of the enactment of this Act regarding achieving 
efficiencies in leasing and rental costs of buildings occupied 
by the Commodity Futures Trading Commission, and shall include 
recommendations to the Chairman of the Commodity Futures 
Trading Commission and the congressional committees of 
jurisdiction regarding the following:
          (1) Average occupancy rates and leasing costs of 
        buildings across the Federal Government compared to 
        those currently in effect with respect to buildings and 
        locations occupied by the Commodity Futures Trading 
        Commission;
          (2) Changes to leasing authority that could achieve 
        efficiencies, including the revocation of independent 
        leasing authority and transfer of authority to the 
        Administrator of General Services;
          (3) The recommendations and responses contained in 
        the report by the Commodity Futures Trading Commission 
        Inspector General, dated June 4, 2014.
          (4) Other related recommendations that would achieve 
        efficiencies in leasing and rental costs of buildings 
        currently occupied by the Commodity Futures Trading 
        Commission.
          (5) Is the Commodity Futures Trading Commission 
        violating any laws, including the Anti-Deficiency Act, 
        by entering into these leases, particularly those with 
        more than 5-year terms, and if so, how they can avoid 
        violating Federal law in the future.
  (c) The Chairman of the Commodity Futures Trading Commission 
shall report to the congressional committees of jurisdiction 
within 60 days after receipt of the report as to whether the 
Chairman accepts or rejects each of the recommendations of the 
Comptroller General, and an explanation for each decision.
                              ----------                              

 8. An Amendment To Be Offered by Representative Garrett of New Jersey 
               or His Designee, Debatable for 10 Minutes

  Page 55, after line 2, insert the following:

SEC. ___. TREATMENT OF CERTAIN FUNDS.

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

                                  
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