I 

111TH CONGRESS 

1ST SESSION H. R. 2448 

To provide for regulation of futures transactions involving energy commodities, to regulate credit default swaps, to strengthen the enforcement 

authorities of the Federal Energy Regulatory Commission under the 

Natural Gas Act, Natural Gas Policy Act of 1978, and the Federal 

Power Act, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 14, 2009 

Mr. STUPAK (for himself, Mr. DOYLE, Mr. INSLEE, Mr. VAN HOLLEN, Mr. 

BISHOP of New York, Mr. CARNEY, Mr. LARSON of Connecticut, Mr. 

WILSON of Ohio, Ms. SLAUGHTER, Mr. GENE GREEN of Texas, Ms. KILPATRICK of Michigan, and Mr. MCHUGH) introduced the following bill; 

which was referred to the Committee on Agriculture, and in addition to 

the Committees on Energy and Commerce and Financial Services, for a 

period to be subsequently determined by the Speaker, in each case for 

consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To provide for regulation of futures transactions involving 

energy commodities, to regulate credit default swaps, 

to strengthen the enforcement authorities of the Federal 

Energy Regulatory Commission under the Natural Gas 

Act, Natural Gas Policy Act of 1978, and the Federal 

Power Act, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Prevent Unfair Manip3 ulation of Prices Act of 2009’’. 

4 SEC. 2. TABLE OF CONTENTS. 

5 The table of contents of this Act is as follows: 

Sec. 1. Short title. 

Sec. 2. Table of contents. 

Sec. 3. Regulation of certain transactions in derivatives involving energy commodities. 

Sec. 4. No effect on authority of the Federal Energy Regulatory Commission. 

Sec. 5. Inspector general of the Commodity Futures Trading Commission. 

Sec. 6. Settlement and clearing through registered derivatives clearing organizations. 

Sec. 7. Limitation on eligibility to purchase a credit default swap. 

Sec. 8. Transaction fees. 

Sec. 9. No effect on authority of the Federal Trade Commission. 

Sec. 10. Cease-and-desist authority. 

Sec. 11. Natural Gas Act refunds. 

Sec. 12. Regulation of carbon derivatives markets. 

6 SEC. 3. REGULATION OF CERTAIN TRANSACTIONS IN DE7 RIVATIVES INVOLVING ENERGY COMMOD8 ITIES. 

9 (a) ENERGY COMMODITY DEFINED.—Section 1a of 

10 the Commodity Exchange Act (7 U.S.C. 1a) is amended— 

11 (1) in paragraph (14), by inserting ‘‘, an energy 

12 commodity,’’ after ‘‘excluded commodity’’; 

13 (2) by redesignating paragraphs (13) through 

14 (21) and paragraphs (22) through (34) as para15 graphs (14) through (22) and paragraphs (24) 

16 through (36), respectively; 

17 (3) by inserting after paragraph (12) the fol18 lowing: 


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1 ‘‘(13) ENERGY COMMODITY.—The term ‘energy 

2 commodity’ means— 

3 ‘‘(A) coal; 

4 ‘‘(B) crude oil, gasoline, diesel fuel, jet 

5 fuel, heating oil, and propane; 

6 ‘‘(C) electricity (excluding financial trans7 mission rights which are subject to regulation 

8 and oversight by the Federal Energy Regu9 latory Commission); 

10 ‘‘(D) natural gas; and 

11 ‘‘(E) any other substance (other than an 

12 excluded commodity, a metal, or an agricultural 

13 commodity) that is used as a source of energy, 

14 as the Commission, in its discretion, deems ap15 propriate.’’; and 

16 (4) by inserting after paragraph (22) (as so re17 designated by paragraph (2) of this subsection) the 

18 following: 

19 ‘‘(23) INCLUDED ENERGY TRANSACTION.—The 

20 term ‘included energy transaction’ means a contract, 

21 agreement, or transaction in an energy commodity 

22 for future delivery that provides for a delivery point 

23 of the energy commodity in the United States or a 

24 territory or possession of the United States, or that 


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1 is offered or transacted on or through a computer 

2 terminal located in the United States.’’. 

3 (b) EXTENSION OF REGULATORY AUTHORITY TO

4 SWAPS INVOLVING ENERGY TRANSACTIONS.—Section 

5 2(g) of such Act (7 U.S.C. 2(g)) is amended by inserting 

6 ‘‘or an energy commodity’’ after ‘‘agricultural com7 modity’’. 

8 (c) ELIMINATION OF EXEMPTION FOR OVER-THE9 COUNTER SWAPS INVOLVING ENERGY COMMODITIES.— 

10 Section 2(h)(1) of such Act (7 U.S.C. 2(h)(1)) is amended 

11 by inserting ‘‘(other than an energy commodity)’’ after 

12 ‘‘exempt commodity’’. 

13 (d) EXTENSION OF REGULATORY AUTHORITY TO IN14 CLUDED ENERGY TRANSACTIONS ON FOREIGN BOARDS

15 OF TRADE.—Section 4 of such Act (7 U.S.C. 6) is amend16 ed— 

17 (1) in subsection (a), by inserting ‘‘, and which 

18 is not an included energy transaction’’ after ‘‘terri19 tories or possessions’’ the 2nd place it appears; and 

20 (2) in subsection (b), by adding at the end the 

21 following: ‘‘The preceding sentence shall not apply 

22 with respect to included energy transactions.’’. 

23 (e) LIMITATION OF GENERAL EXEMPTIVE AUTHOR24 ITY OF THE CFTC WITH RESPECT TO INCLUDED EN25 ERGY TRANSACTIONS.— 


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1 (1) IN GENERAL.—Section 4(c) of such Act (7 

2 U.S.C. 6(c)) is amended by adding at the end the 

3 following: 

4 ‘‘(6) The Commission may not exempt any in5 cluded energy transaction from the requirements of 

6 subsection (a), unless the Commission provides 60 

7 days advance notice to the Congress and the Posi8 tion Limit Energy Advisory Group and solicits pub9 lic comment about the exemption request and any 

10 proposed Commission action.’’. 

11 (2) NULLIFICATION OF NO-ACTION LETTER EX12 EMPTIONS TO CERTAIN REQUIREMENTS APPLICABLE

13 TO INCLUDED ENERGY TRANSACTIONS.—Beginning 

14 180 days after the date of the enactment of this Act, 

15 any exemption provided by the Commodity Futures 

16 Trading Commission that has allowed included en17 ergy transactions (as defined in section 1a(13) of 

18 the Commodity Exchange Act) to be conducted with19 out regard to the requirements of section 4(a) of 

20 such Act shall be null and void. 

21 (f) REQUIREMENT TO ESTABLISH UNIFORM SPECU22 LATIVE POSITION LIMITS FOR ENERGY TRANSACTIONS.— 

23 (1) IN GENERAL.—Section 4a(a) of such Act (7 

24 U.S.C. 6a(a)) is amended— 

25 (A) by inserting ‘‘(1)’’ after ‘‘(a)’’; 


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1 (B) by inserting after the 2nd sentence the 

2 following: ‘‘With respect to energy transactions, 

3 the Commission shall fix limits on the aggre4 gate number of positions which may be held by 

5 any person for each month across all markets 

6 subject to the jurisdiction of the Commission.’’; 

7 (C) in the 4th sentence by inserting ‘‘, con8 sistent with the 3rd sentence,’’ after ‘‘Commis9 sion’’; and 

10 (D) by adding after and below the end the 

11 following: 

12 ‘‘(2)(A) Not later than 60 days after the date of the 

13 enactment of this paragraph, the Commission shall con14 vene a Position Limit Energy Advisory Group consisting 

15 of representatives from— 

16 ‘‘(i) 7 predominantly commercial short hedgers 

17 of the actual energy commodity for future delivery; 

18 ‘‘(ii) 7 predominantly commercial long hedgers 

19 of the actual energy commodity for future delivery; 

20 ‘‘(iii) 4 non-commercial participants in markets 

21 for energy commodities for future delivery; and 

22 ‘‘(iv) each designated contract market or de23 rivatives transaction execution facility upon which a 

24 contract in the energy commodity for future delivery 

25 is traded, and each electronic trading facility that 


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1 has a significant price discovery contract in the en2 ergy commodity. 

3 ‘‘(B) Not later than 60 days after the date on which 

4 the advisory group is convened under subparagraph (A), 

5 and annually thereafter, the advisory group shall submit 

6 to the Commission advisory recommendations regarding 

7 the position limits to be established in paragraph (1). 

8 ‘‘(C) The Commission shall have exclusive authority 

9 to grant exemptions for bona fide hedging transactions 

10 and positions from position limits imposed under this Act 

11 on energy transactions.’’. 

12 (2) CONFORMING AMENDMENTS.— 

13 (A) SIGNIFICANT PRICE DISCOVERY CON14 TRACTS.—Section 2(h)(7) of such Act (7 U.S.C. 

15 2(h)(7)) is amended— 

16 (i) in subparagraph (A)— 

17 (I) by inserting ‘‘of this para18 graph and section 4a(a)’’ after ‘‘(B) 

19 through (D)’’; and 

20 (II) by inserting ‘‘of this para21 graph’’ before the period; and 

22 (ii) in subparagraph (C)(ii)(IV)— 

23 (I) in the heading, by striking 

24 ‘‘LIMITATIONS OR’’; and 


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1 (II) by striking ‘‘position limita2 tions or’’. 

3 (B) CONTRACTS TRADED ON OR THROUGH

4 DESIGNATED CONTRACT MARKETS.—Section 

5 5(d)(5) of such Act (7 U.S.C. 7(d)(5)) is 

6 amended— 

7 (i) in the heading by striking ‘‘LIMI8 TATIONS OR’’; and 

9 (ii) by striking ‘‘position limitations 

10 or’’. 

11 (C) CONTRACTS TRADED ON OR THROUGH

12 DERIVATIVES TRANSACTION EXECUTION FACILI13 TIES.—Section 5a(d)(4) of such Act (7 U.S.C. 

14 7a(d)(4)) is amended— 

15 (i) in the heading by striking ‘‘LIMI16 TATIONS OR’’; and 

17 (ii) by striking ‘‘position limits or’’. 

18 (g) ELIMINATION OF THE SWAPS LOOPHOLE.—Sec19 tion 4a(c) of such Act (7 U.S.C. 6a(c)) is amended— 

20 (1) by inserting ‘‘(1)’’ after ‘‘(c)’’; and 

21 (2) by adding after and below the end the fol22 lowing: 

23 ‘‘(2) For the purposes of contracts of sale for future 

24 delivery and options on such contracts or commodities, the 

25 Commission shall define what constitutes a bona fide 


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1 hedging transaction or position as a transaction or posi2 tion that— 

3 ‘‘(A)(i) represents a substitute for transactions 

4 made or to be made or positions taken or to be 

5 taken at a later time in a physical marketing chan6 nel; 

7 ‘‘(ii) is economically appropriate to the reduc8 tion of risks in the conduct and management of a 

9 commercial enterprise; and 

10 ‘‘(iii) arises from the potential change in the 

11 value of— 

12 ‘‘(I) assets that a person owns, produces, 

13 manufactures, processes, or merchandises or 

14 anticipates owning, producing, manufacturing, 

15 processing, or merchandising; 

16 ‘‘(II) liabilities that a person owns or an17 ticipates incurring; or 

18 ‘‘(III) services that a person provides, pur19 chases, or anticipates providing or purchasing; 

20 or 

21 ‘‘(B) reduces risks attendant to a position re22 sulting from a transaction that— 

23 ‘‘(i) was executed pursuant to subsection 

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1 emption issued by the Commission by rule, reg2 ulation or order; and 

3 ‘‘(ii) was executed opposite a counterparty 

4 for which the transaction would qualify as a 

5 bona fide hedging transaction pursuant to para6 graph (2)(A) of this subsection.’’. 

7 (h) DETAILED REPORTING AND DISAGGREGATION OF

8 MARKET DATA.—Section 4 of such Act (7 U.S.C. 6) is 

9 amended by adding at the end the following: 

10 ‘‘(e) DETAILED REPORTING AND DISAGGREGATION

11 OF MARKET DATA.— 

12 ‘‘(1) INDEX TRADERS AND SWAP DEALERS RE13 PORTING.—The Commission shall issue a proposed 

14 rule defining and classifying index traders and swap 

15 dealers (as those terms are defined by the Commis16 sion) for purposes of data reporting requirements 

17 and setting routine detailed reporting requirements 

18 for any positions of such entities in contracts traded 

19 on designated contract markets, over-the-counter 

20 markets, derivatives transaction execution facilities, 

21 foreign boards of trade subject to section 4(f), and 

22 electronic trading facilities with respect to signifi23 cant price discovery contracts not later than 120 

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1 section, and issue a final rule within 180 days after 

2 such date of enactment. 

3 ‘‘(2) DISAGGREGATION OF INDEX FUNDS AND

4 OTHER DATA IN MARKETS.—Subject to section 8 

5 and beginning within 60 days of the issuance of the 

6 final rule required by paragraph (1), the Commis7 sion shall disaggregate and make public weekly— 

8 ‘‘(A) the number of positions and total no9 tional value of index funds and other passive, 

10 long-only and short-only positions (as defined 

11 by the Commission) in all markets to the extent 

12 such information is available; and 

13 ‘‘(B) data on speculative positions relative 

14 to bona fide physical hedgers in those markets 

15 to the extent such information is available. 

16 ‘‘(3) DISCLOSURE OF IDENTITY OF HOLDERS

17 OF POSITIONS IN INDEXES IN EXCESS OF POSITION

18 LIMITS.—The Commission shall include in its weekly 

19 Commitment of Trader reports the identity of each 

20 person who holds a position in an index in excess of 

21 a limit imposed under section 4i.’’. 

22 (i) AUTHORITY TO SET LIMITS TO PREVENT EXCES23 SIVE SPECULATION IN INDEXES.— 


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1 (1) IN GENERAL.—Section 4a of such Act (7 

2 U.S.C. 6a) is amended by adding at the end the fol3 lowing: 

4 ‘‘(f) The provisions of this section shall apply to the 

5 amounts of trading which may be done or positions which 

6 may be held by any person under contracts of sale of an 

7 index for future delivery on or subject to the rules of any 

8 contract market, derivatives transaction execution facility, 

9 or over-the-counter market, or on an electronic trading fa10 cility with respect to a significant price discovery contract, 

11 in the same manner in which this section applies to con12 tracts of sale of a commodity for future delivery.’’. 

13 (2) REGULATIONS.—The Commodity Futures 

14 Trading Commission shall issue regulations under 

15 section 4a(f) of the Commodity Exchange Act within 

16 180 days after the date of the enactment of this Act. 

17 SEC. 4. NO EFFECT ON AUTHORITY OF THE FEDERAL EN18 ERGY REGULATORY COMMISSION. 

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

20 2) is amended by adding at the end the following:. 

21 ‘‘(j) NO EFFECT ON FERC AUTHORITY.—This Act 

22 shall not be interpreted to affect the jurisdiction of the 

23 Federal Energy Regulatory Commission with respect to 

24 the authority of the Federal Energy Regulatory Commis25 sion under the Federal Power Act (16 U.S.C. 791a et 


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1 seq.), the Natural Gas Act (15 U.S.C. 717 et seq.), or 

2 other law to obtain information, carry out enforcement ac3 tions, or otherwise carry out the responsibilities of the 

4 Federal Energy Regulatory Commission.’’. 

5 SEC. 5. INSPECTOR GENERAL OF THE COMMODITY FU6 TURES TRADING COMMISSION. 

7 (a) ELEVATION OF OFFICE.— 

8 (1) INCLUSION OF CFTC IN DEFINITION OF ES9 TABLISHMENT.— 

10 (A) Section 11(1) of the Inspector General 

11 Act of 1978 (5 U.S.C. App.) is amended by 

12 striking ‘‘or the Federal Cochairpersons of the 

13 Commissions established under section 15301 

14 of title 40, United States Code;’’ and inserting 

15 ‘‘the Federal Cochairpersons of the Commis16 sions established under section 15301 of title 

17 40, United States Code; or the Chairman of the 

18 Commodity Futures Trading Commission;’’. 

19 (B) Section 11(2) of the Inspector General 

20 Act of 1978 (5 U.S.C. App.) is amended by 

21 striking ‘‘or the Commissions established under 

22 section 15301 of title 40, United States Code,’’ 

23 and inserting ‘‘the Commissions established 

24 under section 15301 of title 40, United States 


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1 Code, or the Commodity Futures Trading Com2 mission,’’. 

3 (2) EXCLUSION OF CFTC FROM DEFINITION OF

4 DESIGNATED FEDERAL ENTITY.—Section 8G(a)(2) 

5 of the Inspector General Act of 1978 (5 U.S.C. 

6 App.) is amended by striking ‘‘the Commodity Fu7 tures Trading Commission,’’. 

8 (b) EFFECTIVE DATE; TRANSITION RULE.— 

9 (1) EFFECTIVE DATE.—The amendments made 

10 by this section shall take effect 30 days after the 

11 date of the enactment of this Act. 

12 (2) TRANSITION RULE.—An individual serving 

13 as Inspector General of the Commodity Futures 

14 Trading Commission on the effective date of this 

15 section pursuant to an appointment made under sec16 tion 8G of the Inspector General Act of 1978 (5 

17 U.S.C. App.)— 

18 (A) may continue so serving until the 

19 President makes an appointment under section 

20 3(a) of such Act consistent with the amend21 ments made by this section; and 

22 (B) shall, while serving under subpara23 graph (A), remain subject to the provisions of 

24 section 8G of such Act which apply with respect 


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1 to the Commodity Futures Trading Commis2 sion. 

3 SEC. 6. SETTLEMENT AND CLEARING THROUGH REG4 ISTERED DERIVATIVES CLEARING ORGANIZA5 TIONS. 

6 (a) IN GENERAL.— 

7 (1) APPLICATION TO EXCLUDED DERIVATIVE

8 TRANSACTIONS.— 

9 (A) Section 2(d)(1) of the Commodity Ex10 change Act (7 U.S.C. 2(d)(1)) is amended— 

11 (i) by striking ‘‘and’’ at the end of 

12 subparagraph (A); 

13 (ii) by striking the period at the end 

14 of subparagraph (B) and inserting ‘‘and’’; 

15 and 

16 (iii) by adding at the end the fol17 lowing: 

18 ‘‘(C) except as provided in section 4(f), the 

19 agreement, contract, or transaction is settled 

20 and cleared through a derivatives clearing orga21 nization registered with the Commission.’’. 

22 (B) Section 2(d)(2) of such Act (7 U.S.C. 

23 2(d)(2)) is amended— 

24 (i) by striking ‘‘and’’ at the end of 

25 subparagraph (B); 


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1 (ii) by striking the period at the end 

2 of subparagraph (C) and inserting ‘‘; and’’; 

3 and 

4 (iii) by adding at the end the fol5 lowing: 

6 ‘‘(D) except as provided in section 4(f), the 

7 agreement, contract, or transaction is settled 

8 and cleared through a derivatives clearing orga9 nization registered with the Commission.’’. 

10 (2) APPLICATION TO CERTAIN SWAP TRANS11 ACTIONS.—Section 2(g) of such Act (7 U.S.C. 2(g)) 

12 is amended— 

13 (A) by striking ‘‘and’’ at the end of para14 graph (2); 

15 (B) by striking the period at the end of 

16 paragraph (3) and inserting ‘‘; and’’; and 

17 (C) by adding at the end the following: 

18 ‘‘(4) except as provided in section 4(f), settled 

19 and cleared through a derivatives clearing organiza20 tion registered with the Commission.’’. 

21 (3) APPLICATION TO CERTAIN TRANSACTIONS

22 IN EXEMPT COMMODITIES.— 

23 (A) Section 2(h)(1) of such Act (7 U.S.C. 

24 2(h)(1)) is amended— 


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1 (i) by striking ‘‘and’’ at the end of 

2 subparagraph (A); 

3 (ii) by striking the period at the end 

4 of subparagraph (B) and inserting ‘‘; 

5 and’’; and 

6 (iii) by adding at the end the fol7 lowing: 

8 ‘‘(C) except as provided in section 4(f), is 

9 settled and cleared through a derivatives clear10 ing organization registered with the Commis11 sion.’’. 

12 (B) Section 2(h)(3) of such Act (7 U.S.C. 

13 2(h)(3)) is amended— 

14 (i) by striking ‘‘and’’ at the end of 

15 subparagraph (A); 

16 (ii) by striking the period at the end 

17 of subparagraph (B) and inserting ‘‘; 

18 and’’; and 

19 (iii) by adding at the end the fol20 lowing: 

21 ‘‘(C) except as provided in section 4(f), set22 tled and cleared through a derivatives clearing 

23 organization registered with the Commission.’’. 

24 (4) GENERAL EXEMPTIVE AUTHORITY.—Sec25 tion 4(c)(1) of such Act (7 U.S.C. 6(c)(1)) is 


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1 amended by inserting ‘‘the agreement, contract, or 

2 transaction, except as provided in section 4(h), will 

3 be settled and cleared through a derivatives clearing 

4 organization registered with the Commission and’’ 

5 before ‘‘the Commission determines’’. 

6 (5) CONFORMING AMENDMENT RELATING TO

7 SIGNIFICANT PRICE DISCOVERY CONTRACTS.—Sec8 tion 2(h)(7)(D) of such Act (7 U.S.C. 2(h)(7)(D)) is 

9 amended by striking the heading for the subpara10 graph and all that follows through ‘‘As part of’’ and 

11 inserting the following: 

12 ‘‘(D) REVIEW OF IMPLEMENTATION.—As 

13 part of’’. 

14 (b) ALTERNATIVES TO CLEARING THROUGH DES15 IGNATED CLEARING ORGANIZATIONS.—Section 4 of such 

16 Act (7 U.S.C. 6), as amended by section 3(h) of this Act, 

17 is amended by adding at the end the following: 

18 ‘‘(f) ALTERNATIVES TO CLEARING THROUGH DES19 IGNATED CLEARING ORGANIZATIONS.— 

20 ‘‘(1) SETTLEMENT AND CLEARING THROUGH

21 CERTAIN OTHER REGULATED ENTITIES.—An agree22 ment, contract, or transaction, or class thereof, re23 lating to an excluded commodity, that would other24 wise be required to be settled and cleared by section 

25 2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 2(h)(1)(C), or 


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1 2(h)(3)(C) of this Act, or subsection (c)(1) of this 

2 section may be settled and cleared through an entity 

3 listed in subsections (a) or (b) of section 409 of the 

4 Federal Deposit Insurance Corporation Improvement 

5 Act of 1991. 

6 ‘‘(2) WAIVER OF CLEARING REQUIREMENT.— 

7 ‘‘(A) The Commission, in its discretion, 

8 may exempt an agreement, contract, or trans9 action, or class thereof, that would otherwise be 

10 required by section 2(d)(1)(C), 2(d)(2)(D), 

11 2(g)(4), 2(h)(1)(C), or 2(h)(3)(C) of this Act, 

12 or subsection (c)(1) of this section to be settled 

13 and cleared through a derivatives clearing orga14 nization registered with the Commission from 

15 such requirement. 

16 ‘‘(B) In granting exemptions pursuant to 

17 subparagraph (A), the Commission shall consult 

18 with the Securities and Exchange Commission 

19 and the Board of Governors of the Federal Re20 serve System regarding exemptions that relate 

21 to excluded commodities or entities for which 

22 the Securities Exchange Commission or the 

23 Board of Governors of the Federal Reserve Sys24 tem serve as the primary regulator. 


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1 ‘‘(C) Before granting an exemption pursu2 ant to subparagraph (A), the Commission shall 

3 find that the agreement, contract, or trans4 action, or class thereof— 

5 ‘‘(i) is highly customized as to its ma6 terial terms and conditions; 

7 ‘‘(ii) is transacted infrequently; 

8 ‘‘(iii) does not serve a significant 

9 price-discovery function in the market10 place; and 

11 ‘‘(iv) is being entered into by parties 

12 who can demonstrate the financial integ13 rity of the agreement, contract, or trans14 action and their own financial integrity, as 

15 such terms and standards are determined 

16 by the Commission. The standards may in17 clude, with respect to any federally regu18 lated financial entity for which net capital 

19 requirements are imposed, a net capital re20 quirement associated with any agreement, 

21 contract, or transaction subject to an ex22 emption from the clearing requirement 

23 that is higher than the net capital require24 ment that would be associated with such a 

25 transaction were it cleared. 


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1 ‘‘(D) Any agreement, contract, or trans2 action, or class thereof, which is exempted pur3 suant to subparagraph (A) shall be reported to 

4 the Commission in a manner designated by the 

5 Commission, or to such other entity the Com6 mission deems appropriate. 

7 ‘‘(E) The Commission, the Securities and 

8 Exchange Commission, and the Board of Gov9 ernors of the Federal Reserve System shall 

10 enter into a memorandum of understanding by 

11 which the information reported to the Commis12 sion pursuant to subparagraph (D) with regard 

13 to excluded commodities or entities for which 

14 the Securities Exchange Commission or the 

15 Board of Governors of the Federal Reserve Sys16 tem serve as the primary regulator may be pro17 vided to the other agencies. 

18 ‘‘(g) SPOT AND FORWARD EXCLUSION.—The settle19 ment and clearing requirements of section 2(d)(1)(C), 

20 2(d)(2)(D), 2(g)(4), 2(h)(1)(C), 2(h)(3)(C), or 4(c)(1) 

21 shall not apply to an agreement, contract, or transaction 

22 of any cash commodity for immediate or deferred ship23 ment or delivery, as defined by the Commission.’’. 

24 (c) ADDITIONAL REQUIREMENTS APPLICABLE TO

25 APPLICANTS FOR REGISTRATION AS A DERIVATIVE


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1 CLEARING ORGANIZATION.—Section 5b(c)(2) of such Act 

2 (7 U.S.C. 7a–1(c)(2)) is amended by adding at the end 

3 the following: 

4 ‘‘(O) DISCLOSURE OF GENERAL INFORMA5 TION.—The applicant shall disclose publicly and 

6 to the Commission information concerning— 

7 ‘‘(i) the terms and conditions of con8 tracts, agreements, and transactions 

9 cleared and settled by the applicant; 

10 ‘‘(ii) the conventions, mechanisms, 

11 and practices applicable to the contracts, 

12 agreements, and transactions; 

13 ‘‘(iii) the margin-setting methodology 

14 and the size and composition of the finan15 cial resource package of the applicant; and 

16 ‘‘(iv) other information relevant to 

17 participation in the settlement and clearing 

18 activities of the applicant. 

19 ‘‘(P) DAILY PUBLICATION OF TRADING IN20 FORMATION.—The applicant shall make public 

21 daily information on settlement prices, volume, 

22 and open interest for contracts settled or 

23 cleared pursuant to the requirements of 

24 2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 2(h)(1)(C), 

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1 cant if the Commission determines that the 

2 contracts perform a significant price discovery 

3 function for transactions in the cash market for 

4 the commodity underlying the contracts. 

5 ‘‘(Q) FITNESS STANDARDS.—The applicant 

6 shall establish and enforce appropriate fitness 

7 standards for directors, members of any dis8 ciplinary committee, and members of the appli9 cant, and any other persons with direct access 

10 to the settlement or clearing activities of the 

11 applicant, including any parties affiliated with 

12 any of the persons described in this subpara13 graph.’’. 

14 (d) AMENDMENTS.— 

15 (1) Section 409 of the Federal Deposit Insur16 ance Corporation Improvement Act of 1991 (12 

17 U.S.C. 4422) is amended by adding at the end the 

18 following: 

19 ‘‘(c) CLEARING REQUIREMENT.—A multilateral 

20 clearing organization described in subsections (a) or (b) 

21 of this section shall comply with requirements similar to 

22 the requirements of sections 5b and 5c or the Commodity 

23 Exchange Act.’’. 

24 (2) Section 407 of the Legal Certainty for 

25 Bank Products Act of 2000 (7 U.S.C. 27e) is 


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1 amended by inserting ‘‘and the settlement and clear2 ing requirements of sections 2(d)(1)(C), 2(d)(2)(D), 

3 2(g)(4), 2(h)(1)(C), 2(h)(3)(C), and 4(c)(1) of such 

4 Act’’ after ‘‘the clearing of covered swap agree5 ments’’. 

6 (e) EFFECTIVE DATE.—The amendments made by 

7 this section shall take effect 150 days after the date of 

8 the enactment of this Act. 

9 (f) TRANSITION RULE.—Any agreement, contract, or 

10 transaction entered into before the date of the enactment 

11 of this Act or within 150 days after such date of enact12 ment, in reliance on subsection (d), (g), (h)(1), or (h)(3) 

13 of section 2 of the Commodity Exchange Act or any other 

14 exemption issued by the Commission Futures Trading 

15 Commission by rule, regulation, or order shall, within 90 

16 days after such date of enactment, unless settled and 

17 cleared through an entity registered with the Commission 

18 as a derivatives clearing organization or another clearing 

19 entity pursuant to section 4(f) of such Act, be reported 

20 to the Commission in a manner designated by the Com21 mission, or to such other entity as the Commission deems 

22 appropriate. 


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1 SEC. 7. LIMITATION ON ELIGIBILITY TO PURCHASE A 

2 CREDIT DEFAULT SWAP. 

3 (a) IN GENERAL.—Section 4c of the Commodity Ex4 change Act (7 U.S.C. 6c) is amended by adding at the 

5 end the following: 

6 ‘‘(h) LIMITATION ON ELIGIBILITY TO PURCHASE A

7 CREDIT DEFAULT SWAP.—It shall be unlawful for any 

8 person to enter into a credit default swap unless the per9 son— 

10 ‘‘(1) owns a credit instrument which is insured 

11 by the credit default swap; 

12 ‘‘(2) would experience financial loss if an event 

13 that is the subject of the credit default swap occurs 

14 with respect to the credit instrument; and 

15 ‘‘(3) meets such minimum capital adequacy 

16 standards as may be established by the Commission, 

17 in consultation with the Board of Governors of the 

18 Federal Reserve System, or such more stringent 

19 minimum capital adequacy standards as may be es20 tablished by or under the law of any State in which 

21 the swap is originated or entered into, or in which 

22 possession of the contract involved takes place.’’. 

23 (b) ELIMINATION OF PREEMPTION OF STATE

24 BUCKETING LAWS REGARDING NAKED CREDIT DEFAULT

25 SWAPS.—Section 12(e)(2)(B) of such Act (7 U.S.C. 

26 16(e)(2)(B)) is amended by inserting ‘‘(other than a credit 


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1 default swap in which the purchaser of the swap would 

2 not experience financial loss if an event that is the subject 

3 of the swap occurred)’’ before ‘‘that is excluded’’. 

4 (c) DEFINITION OF CREDIT DEFAULT SWAP.—Sec5 tion 1a of such Act (7 U.S.C. 1a), as amended by section 

6 3(a) of this Act, is amended by adding at the end the fol7 lowing: 

8 ‘‘(37) CREDIT DEFAULT SWAP.—the term ‘cred9 it default swap’ means a contract which insures a 

10 party to the contract against the risk that an entity 

11 may experience a loss of value as a result of an 

12 event specified in the contract, such as a default or 

13 credit downgrade. A credit default swap that is trad14 ed on or cleared by a registered entity shall be ex15 cluded from the definition of a security as defined in 

16 this Act and in section 2(a)(1) of the Securities Act 

17 of 1933 or section 3(a)(10) of the Securities Ex18 change Act of 1934, except it shall be deemed a se19 curity solely for purpose of enforcing prohibitions 

20 against insider trading in sections 10 and 16 of the 

21 Securities Exchange Act of 1934.’’. 

22 (d) EFFECTIVE DATE.—The amendments made by 

23 this section shall be effective for credit default swaps (as 

24 defined in section 1a(37) of the Commodity Exchange Act) 


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1 entered into after 60 days after the date of the enactment 

2 of this section. 

3 SEC. 8. TRANSACTION FEES. 

4 (a) IN GENERAL.—Section 12 of the Commodity Ex5 change Act (7 U.S.C. 16) is amended by redesignating 

6 subsections (e), (f), and (g) as subsections (f), (g), and 

7 (h), respectively, and inserting after subsection (d) the fol8 lowing: 

9 ‘‘(e) CLEARING FEES.— 

10 ‘‘(1) IN GENERAL.—The Commission shall, in 

11 accordance with this subsection, charge and collect 

12 from each registered clearing organization, and each 

13 such organization shall pay to the Commission, 

14 transaction fees at a rate calculated to recover the 

15 costs to the Federal Government of the supervision 

16 and regulation of futures markets, except those di17 rectly related to enforcement. 

18 ‘‘(2) FEES ASSESSED PER SIDE OF CLEARED

19 CONTRACTS.— 

20 ‘‘(A) IN GENERAL.—The Commission shall 

21 determine the fee rate referred to in paragraph 

22 (1), and shall apply the fee rate per side of any 

23 transaction cleared. 

24 ‘‘(B) AUTHORITY TO DELEGATE.—The 

25 Commission may determine the procedures by 


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1 which the fee rate is to be applied on the trans2 actions subject to the fee, or delegate the au3 thority to make the determination to any appro4 priate derivatives clearing organization. 

5 ‘‘(3) EXEMPTIONS.—The Commision may not 

6 impose a fee under paragraph (1) on— 

7 ‘‘(A) a class of contracts or transactions if 

8 the Commission finds that it is in the public in9 terest to exempt the class from the fee; or 

10 ‘‘(B) a contract or transaction cleared by 

11 a registered derivatives clearing organization 

12 that is— 

13 ‘‘(i) subject to fees under section 31 

14 of the Securities Exchange Act of 1934; or 

15 ‘‘(ii) a security as defined in the Secu16 rities Act of 1933 or the Securities Ex17 change Act of 1934. 

18 ‘‘(4) DATES FOR PAYMENT OF FEES.—The fees 

19 imposed under paragraph (1) shall be paid on or be20 fore— 

21 ‘‘(A) March 15 of each year, with respect 

22 to transactions occurring on or after the pre23 ceding September 1 and on or before the pre24 ceding December 31; and 


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1 ‘‘(B) September 15 of each year, with re2 spect to transactions occurring on or after the 

3 preceding January 1 and on or before the pre4 ceding August 31. 

5 ‘‘(5) ANNUAL ADJUSTMENT OF FEE RATES.— 

6 ‘‘(A) IN GENERAL.—Not later than April 

7 30 of each fiscal year, the Commission shall, by 

8 order, adjust each fee rate determined under 

9 paragraph (2) for the fiscal year to a uniform 

10 adjusted rate that, when applied to the esti11 mated aggregate number of cleared sides of 

12 transactions for the fiscal year, is reasonably 

13 likely to produce aggregate fee receipts under 

14 this subsection for the fiscal year equal to the 

15 target offsetting receipt amount for the fiscal 

16 year. 

17 ‘‘(B) DEFINITIONS.—In subparagraph (A): 

18 ‘‘(i) ESTIMATED AGGREGATE NUMBER

19 OF CLEARED SIDES OF TRANSACTIONS.— 

20 The term ‘estimated aggregate number of 

21 cleared sides of transactions’ means, with 

22 respect to a fiscal year, the aggregate 

23 number of cleared sides of transactions to 

24 be cleared by registered derivatives clear25 ing organizations during the fiscal year, as 


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1 estimated by the Commission, after con2 sultation with the Office of Management 

3 and Budget, using the methodology re4 quired for making projections pursuant to 

5 section 257 of the Balanced Budget and 

6 Emergency Deficit Control Act of 1985. 

7 ‘‘(ii) TARGET OFFSETTING RECEIPT

8 AMOUNT.—The term ‘target offsetting re9 ceipt amount’ means, with respect to a fis10 cal year, the total level of Commission 

11 budget authority for all non-enforcement 

12 activities of the Commission, as contained 

13 in the regular appropriations Acts for the 

14 fiscal year. 

15 ‘‘(C) NO JUDICIAL REVIEW.—An adjusted 

16 fee rate prescribed under subparagraph (A) 

17 shall not be subject to judicial review. 

18 ‘‘(6) PUBLICATION.—Not later than April 30 of 

19 each fiscal year, the Commission shall cause to be 

20 published in the Federal Register notices of the fee 

21 rates applicable under this subsection for the suc22 ceeding fiscal year, and any estimate or projection 

23 on which the fee rates are based. 

24 ‘‘(7) INAPPLICABILITY OF CERTAIN PROCE25 DURAL RULES.—Section 553 of title 5, United 


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1 States Code, shall not apply with respect to any ex2 ercise of authority under this subsection. 

3 ‘‘(8) ESTABLISHMENT OF FUTURES AND OP4 TIONS TRANSACTION FEE ACCOUNT; DEPOSIT OF

5 FEES.—There is established in the Treasury of the 

6 United States an account which shall be known as 

7 the ‘Futures and Options Transaction Fee Account’. 

8 All fees collected under this subsection for a fiscal 

9 year shall be deposited in the account. Amounts in 

10 the account are authorized to be appropriated to 

11 fund the expenditures of the Commission.’’. 

12 (b) EFFECTIVE DATE.—The amendments made by 

13 subsection (a) shall apply to fiscal years beginning 30 or 

14 more days after the date of the enactment of this Act. 

15 (c) TRANSITION RULE.—If this section becomes law 

16 after March 31 and before September 1 of a fiscal year, 

17 then paragraphs (5)(A) and (6) of section 12(e) of the 

18 Commodity Exchange Act shall be applied, in the case of 

19 the 1st fiscal year beginning after the date of the enact20 ment of this Act, by substituting ‘‘August 31’’ for ‘‘April 

21 30’’. 

22 SEC. 9. NO EFFECT ON AUTHORITY OF THE FEDERAL 

23 TRADE COMMISSION. 

24 Nothing in this Act shall be interpreted to affect or 

25 diminish the jurisdiction or authority of the Federal Trade 


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1 Commission with respect to its authorities under the Fed2 eral Trade Commission Act (15 U.S.C. 41 et seq.) or the 

3 Energy Independence and Security Act of 2007 (Public 

4 Law 110–140) to obtain information, to carry out enforce5 ment activities or otherwise carry out the responsibilities 

6 of the Federal Trade Commission. 

7 SEC. 10. CEASE-AND-DESIST AUTHORITY. 

8 (a) NATURAL GAS ACT.—Section 20 of the Natural 

9 Gas Act (15 U.S.C. 717s) is amended by adding the fol10 lowing at the end: 

11 ‘‘(e) CEASE-AND-DESIST PROCEEDINGS; TEMPORARY

12 ORDERS; AUTHORITY OF THE COMMISSION.— 

13 ‘‘(1) IN GENERAL.—If the Commission finds, 

14 after notice and opportunity for hearing, that any 

15 entity may be violating, may have violated, or may 

16 be about to violate any provision of this Act, or any 

17 rule, regulation, restriction, condition, or order made 

18 or imposed by the Commission under the authority 

19 of this Act, the Commission may publish its findings 

20 and issue an order requiring such entity, and any 

21 other entity that is, was, or would be a cause of the 

22 violation, due to an act or omission the entity knew 

23 or should have known would contribute to such vio24 lation, to cease and desist from committing or caus25 ing such violation and any future violation of the 


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1 same provision, rule, or regulation. Such order may, 

2 in addition to requiring an entity to cease and desist 

3 from committing or causing a violation, require such 

4 entity to comply, to provide an accounting and 

5 disgorgement, or to take steps to effect compliance, 

6 with such provision, rule, or regulation, upon such 

7 terms and conditions and within such time as the 

8 Commission may specify in such order. Any such 

9 order may, as the Commission deems appropriate, 

10 require future compliance or steps to effect future 

11 compliance, either permanently or for such period of 

12 time as the Commission may specify. 

13 ‘‘(2) TIMING OF ENTRY.—An order issued 

14 under this subsection shall be entered only after no15 tice and opportunity for a hearing, unless the Com16 mission determines that notice and hearing prior to 

17 entry would be impracticable or contrary to the pub18 lic interest. 

19 ‘‘(f) HEARING.—The notice instituting proceedings 

20 pursuant to subsection (e) shall fix a hearing date not ear21 lier than 30 days nor later than 60 days after service of 

22 the notice unless an earlier or a later date is set by the 

23 Commission with the consent of any respondent so served. 

24 ‘‘(g) TEMPORARY ORDER.—Whenever the Commis25 sion determines that— 


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1 ‘‘(1) a respondent may take actions to dissipate 

2 or convert assets prior to the completion of the pro3 ceedings referred to in subsection (e), and such as4 sets would be necessary to comply with or otherwise 

5 satisfy a final enforcement order of the Commission 

6 pursuant to alleged violations or threatened viola7 tions specified in the notice instituting proceedings, 

8 or 

9 ‘‘(2) a respondent is engaged in actual or 

10 threatened violations of this Act or a Commission 

11 rule, regulation, restriction or order referred to in 

12 subsection (e), 

13 the Commission may issue a temporary order requiring 

14 the respondent to take such action to prevent dissipation 

15 or conversion of assets, significant harm to energy con16 sumers, or substantial harm to the public interest, frustra17 tion of the Commission’s ability to conduct the pro18 ceedings, or frustration of the Commission’s ability to re19 dress said violation at the conclusion of the proceedings, 

20 as the Commission deems appropriate pending completion 

21 of such proceedings. 

22 ‘‘(h) REVIEW OF TEMPORARY ORDERS.— 

23 ‘‘(1) COMMISSION REVIEW.—At any time after 

24 the respondent has been served with a temporary 

25 cease-and-desist order pursuant to subsection (g), 


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1 the respondent may apply to the Commission to have 

2 the order set aside, limited, or suspended. If the re3 spondent has been served with a temporary cease4 and-desist order entered without a prior Commission 

5 hearing, the respondent may, within 10 days after 

6 the date on which the order was served, request a 

7 hearing on such application and the Commission 

8 shall hold a hearing and render a decision on such 

9 application at the earliest possible time. 

10 ‘‘(2) JUDICIAL REVIEW.—Within— 

11 ‘‘(A) 10 days after the date the respondent 

12 was served with a temporary cease-and-desist 

13 order entered with a prior Commission hearing; 

14 or 

15 ‘‘(B) 10 days after the Commission ren16 ders a decision on an application and hearing 

17 under paragraph (1), with respect to any tem18 porary cease-and-desist order entered without a 

19 prior Commission hearing, the respondent may 

20 apply to the United States district court for the 

21 district in which the respondent resides or has 

22 its principal place of business, or for the Dis23 trict of Columbia, for an order setting aside, 

24 limiting, or suspending the effectiveness or en25 forcement of the order, and the court shall have 


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1 jurisdiction to enter such an order. A respond2 ent served with a temporary cease-and-desist 

3 order entered without a prior Commission hear4 ing may not apply to the court except after 

5 hearing and decision by the Commission on the 

6 respondent’s application under paragraph (1) of 

7 this subsection. 

8 ‘‘(3) NO AUTOMATIC STAY OF TEMPORARY

9 ORDER.—The commencement of proceedings under 

10 paragraph (2) of this subsection shall not, unless 

11 specifically ordered by the court, operate as a stay 

12 of the Commission’s order. 

13 ‘‘(4) EXCLUSIVE REVIEW.—Sections 19(d) and 

14 24 shall not apply to a temporary order entered pur15 suant to this section. 

16 ‘‘(i) IMPLEMENTATION.—The Commission is author17 ized to adopt rules, regulations, and orders as it deems 

18 appropriate to implement this section.’’. 

19 (b) FEDERAL POWER ACT.—Section 314 of the Fed20 eral Power Act (16 U.S.C. 825m) is amended by adding 

21 the following at the end: 

22 ‘‘(e) CEASE-AND-DESIST PROCEEDINGS; TEMPORARY

23 ORDERS; AUTHORITY OF THE COMMISSION.— 

24 ‘‘(1) IN GENERAL.—If the Commission finds, 

25 after notice and opportunity for hearing, that any 


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•HR 2448 IH

1 entity may be violating, may have violated, or may 

2 be about to violate any provision of this Act, or any 

3 rule, regulation, restriction, condition, or order made 

4 or imposed by the Commission under the authority 

5 of this Act, the Commission may publish its findings 

6 and issue an order requiring such entity, and any 

7 other entity that is, was, or would be a cause of the 

8 violation, due to an act or omission the entity knew 

9 or should have known would contribute to such vio10 lation, to cease and desist from committing or caus11 ing such violation and any future violation of the 

12 same provision, rule, or regulation. Such order may, 

13 in addition to requiring an entity to cease and desist 

14 from committing or causing a violation, require such 

15 entity to comply, to provide an accounting and 

16 disgorgement, or to take steps to effect compliance, 

17 with such provision, rule, or regulation, upon such 

18 terms and conditions and within such time as the 

19 Commission may specify in such order. Any such 

20 order may, as the Commission deems appropriate, 

21 require future compliance or steps to effect future 

22 compliance, either permanently or for such period of 

23 time as the Commission may specify. 

24 ‘‘(2) TIMING OF ENTRY.—An order issued 

25 under this subsection shall be entered only after noVerDate Nov 24 2008 01:00 May 16, 2009 Jkt 079200 PO 00000 Frm 00037 Fmt 6652 Sfmt 6201 E:\BILLS\H2448.IH H2448

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1 tice and opportunity for a hearing, unless the Com2 mission determines that notice and hearing prior to 

3 entry would be impracticable or contrary to the pub4 lic interest. 

5 ‘‘(3) HEARING.—The notice instituting pro6 ceedings pursuant to paragraph (1) shall fix a hear7 ing date not earlier than 30 days nor later than 60 

8 days after service of the notice unless an earlier or 

9 a later date is set by the Commission with the con10 sent of any respondent so served. 

11 ‘‘(4) TEMPORARY ORDER.—Whenever the Com12 mission determines that— 

13 ‘‘(A) a respondent may take actions to dis14 sipate or convert assets prior to the completion 

15 of the proceedings referred to in paragraph (1), 

16 and such assets would be necessary to comply 

17 with or otherwise satisfy a final enforcement 

18 order of the Commission pursuant to alleged 

19 violations or threatened violations specified in 

20 the notice instituting proceedings, or 

21 ‘‘(B) a respondent is engaged in actual or 

22 threatened violations of this Act or a Commis23 sion rule, regulation, restriction or order re24 ferred to in paragraph (1), 


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1 the Commission may issue a temporary order requir2 ing the respondent to take such action to prevent 

3 dissipation or conversion of assets, significant harm 

4 to energy consumers, or substantial harm to the 

5 public interest, frustration of the Commission’s abil6 ity to conduct the proceedings, or frustration of the 

7 Commission’s ability to redress said violation at the 

8 conclusion of the proceedings, as the Commission 

9 deems appropriate pending completion of such pro10 ceedings. 

11 ‘‘(5) REVIEW OF TEMPORARY ORDERS.— 

12 ‘‘(A) COMMISSION REVIEW.—At any time 

13 after the respondent has been served with a 

14 temporary cease-and-desist order pursuant to 

15 paragraph (4), the respondent may apply to the 

16 Commission to have the order set aside, limited, 

17 or suspended. If the respondent has been served 

18 with a temporary cease-and-desist order entered 

19 without a prior Commission hearing, the re20 spondent may, within 10 days after the date on 

21 which the order was served, request a hearing 

22 on such application and the Commission shall 

23 hold a hearing and render a decision on such 

24 application at the earliest possible time. 

25 ‘‘(B) JUDICIAL REVIEW.—Within— 


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1 ‘‘(i) 10 days after the date the re2 spondent was served with a temporary 

3 cease-and-desist order entered with a prior 

4 Commission hearing; or 

5 ‘‘(ii) 10 days after the Commission 

6 renders a decision on an application and 

7 hearing under subparagraph (A), with re8 spect to any temporary cease-and-desist 

9 order entered without a prior Commission 

10 hearing, the respondent may apply to the 

11 United States district court for the district 

12 in which the respondent resides or has its 

13 principal place of business, or for the Dis14 trict of Columbia, for an order setting 

15 aside, limiting, or suspending the effective16 ness or enforcement of the order, and the 

17 court shall have jurisdiction to enter such 

18 an order. A respondent served with a tem19 porary cease-and-desist order entered with20 out a prior Commission hearing may not 

21 apply to the court except after hearing and 

22 decision by the Commission on the re23 spondent’s application under subparagraph 

24 (A) of this paragraph. 


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1 ‘‘(C) NO AUTOMATIC STAY OF TEMPORARY

2 ORDER.—The commencement of proceedings 

3 under subparagraph (B) of this subsection shall 

4 not, unless specifically ordered by the court, op5 erate as a stay of the Commission’s order. 

6 ‘‘(D) EXCLUSIVE REVIEW.—Section 317 

7 shall not apply to a temporary order entered 

8 pursuant to this section. 

9 ‘‘(6) IMPLEMENTATION.—The Commission is 

10 authorized to adopt rules, regulations, and orders as 

11 it deems appropriate to implement this subsection.’’. 

12 (c) NATURAL GAS POLICY ACT OF 1978.—Section 

13 504 of the Natural Gas Policy Act of 1978 (15 U.S.C. 

14 3414) is amended by adding the following at the end: 

15 ‘‘(c) CEASE-AND-DESIST PROCEEDINGS; TEMPORARY

16 ORDERS; AUTHORITY OF THE COMMISSION.— 

17 ‘‘(1) IN GENERAL.—If the Commission finds, 

18 after notice and opportunity for hearing, that any 

19 entity may be violating, may have violated, or may 

20 be about to violate any provision of this Act, or any 

21 rule, regulation, restriction, condition, or order made 

22 or imposed by the Commission under the authority 

23 of this Act, the Commission may publish its findings 

24 and issue an order requiring such entity, and any 

25 other entity that is, was, or would be a cause of the 


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•HR 2448 IH

1 violation, due to an act or omission the entity knew 

2 or should have known would contribute to such vio3 lation, to cease and desist from committing or caus4 ing such violation and any future violation of the 

5 same provision, rule, or regulation. Such order may, 

6 in addition to requiring an entity to cease and desist 

7 from committing or causing a violation, require such 

8 entity to comply, to provide an accounting and 

9 disgorgement, or to take steps to effect compliance, 

10 with such provision, rule, or regulation, upon such 

11 terms and conditions and within such time as the 

12 Commission may specify in such order. Any such 

13 order may, as the Commission deems appropriate, 

14 require future compliance or steps to effect future 

15 compliance, either permanently or for such period of 

16 time as the Commission may specify. 

17 ‘‘(2) TIMING OF ENTRY.—An order issued 

18 under this subsection shall be entered only after no19 tice and opportunity for a hearing, unless the Com20 mission determines that notice and hearing prior to 

21 entry would be impracticable or contrary to the pub22 lic interest. 

23 ‘‘(3) HEARING.—The notice instituting pro24 ceedings pursuant to paragraph (1) shall fix a hear25 ing date not earlier than 30 days nor later than 60 


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•HR 2448 IH

1 days after service of the notice unless an earlier or 

2 a later date is set by the Commission with the con3 sent of any respondent so served. 

4 ‘‘(4) TEMPORARY ORDER.—Whenever the Com5 mission determines that— 

6 ‘‘(A) a respondent may take actions to dis7 sipate or convert assets prior to the completion 

8 of the proceedings referred to in paragraph (1) 

9 and such assets would be necessary to comply 

10 with or otherwise satisfy a final enforcement 

11 order of the Commission pursuant to alleged 

12 violations or threatened violations specified in 

13 the notice instituting proceedings, or 

14 ‘‘(B) a respondent is engaged in actual or 

15 threatened violations of this Act or a Commis16 sion rule, regulation, restriction or order re17 ferred to in paragraph (1), 

18 the Commission may issue a temporary order requir19 ing the respondent to take such action to prevent 

20 dissipation or conversion of assets, significant harm 

21 to energy consumers, or substantial harm to the 

22 public interest, frustration of the Commission’s abil23 ity to conduct the proceedings, or frustration of the 

24 Commission’s ability to redress said violation at the 

25 conclusion of the proceedings, as the Commission 


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1 deems appropriate pending completion of such pro2 ceedings. 

3 ‘‘(5) REVIEW OF TEMPORARY ORDERS.— 

4 ‘‘(A) COMMISSION REVIEW.—At any time 

5 after the respondent has been served with a 

6 temporary cease-and-desist order pursuant to 

7 paragraph (4), the respondent may apply to the 

8 Commission to have the order set aside, limited, 

9 or suspended. If the respondent has been served 

10 with a temporary cease-and-desist order entered 

11 without a prior Commission hearing, the re12 spondent may, within 10 days after the date on 

13 which the order was served, request a hearing 

14 on such application and the Commission shall 

15 hold a hearing and render a decision on such 

16 application at the earliest possible time. 

17 ‘‘(B) JUDICIAL REVIEW.—Within— 

18 ‘‘(i) 10 days after the date the re19 spondent was served with a temporary 

20 cease-and-desist order entered with a prior 

21 Commission hearing; or 

22 ‘‘(ii) 10 days after the Commission 

23 renders a decision on an application and 

24 hearing under subparagraph (A), with re25 spect to any temporary cease-and-desist 


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1 order entered without a prior Commission 

2 hearing, the respondent may apply to the 

3 United States district court for the district 

4 in which the respondent resides or has its 

5 principal place of business, or for the Dis6 trict of Columbia, for an order setting 

7 aside, limiting, or suspending the effective8 ness or enforcement of the order, and the 

9 court shall have jurisdiction to enter such 

10 an order. A respondent served with a tem11 porary cease-and-desist order entered with12 out a prior Commission hearing may not 

13 apply to the court except after hearing and 

14 decision by the Commission on the re15 spondent’s application under paragraph (1) 

16 of this subsection. 

17 ‘‘(C) NO AUTOMATIC STAY OF TEMPORARY

18 ORDER.—The commencement of proceedings 

19 under subparagrpah (B) of this paragraph shall 

20 not, unless specifically ordered by the court, op21 erate as a stay of the Commission’s order. 

22 ‘‘(6) IMPLEMENTATION.—The Commission is 

23 authorized to adopt rules, regulations, and orders as 

24 it deems appropriate to implement this subsection.’’. 


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1 SEC. 11. NATURAL GAS ACT REFUNDS. 

2 Section 5(a) of the Natural Gas Act (15 U.S.C. 

3 717d(a)) is amended by adding the following new para4 graphs at the end thereof: 

5 ‘‘(3) REFUND EFFECTIVE DATE.— 

6 ‘‘(A) IN GENERAL.—In accordance with 

7 subparagraphs (B) and (C), the Commission 

8 shall establish a refund effective date for any 

9 proceeding initiated under this subsection. 

10 ‘‘(B) COMPLAINTS.—In the case of a pro11 ceeding initiated by a complaint, the refund ef12 fective date shall be— 

13 ‘‘(i) not earlier than the date on which 

14 the complaint is submitted to the Commis15 sion; and 

16 ‘‘(ii) not later than 150 days after the 

17 date on which the complaint was submitted 

18 to the Commission. 

19 ‘‘(C) COMMISSION MOTION.—In the case of 

20 a proceeding initiated on motion of the Com21 mission, the refund effective date shall be— 

22 ‘‘(i) not earlier than the date on which 

23 the Commission publishes notice of the in24 tention of the Commission to initiate the 

25 proceeding; and 


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1 ‘‘(ii) not later than 150 days after the 

2 date on which the notice under clause (i) 

3 is published. 

4 ‘‘(4) ISSUANCE OF REFUNDS.— 

5 ‘‘(A) IN GENERAL.—At the conclusion of 

6 any hearing under this section, the Commission 

7 may order, for the period beginning on the re8 fund effective date and ending on a date 15 

9 months after the refund effective date, refunds 

10 of any amounts paid in excess of the amounts 

11 that would have been paid under the just and 

12 reasonable rate, charge, classification, rule, reg13 ulation, practice, or contract that the Commis14 sion orders that would be in effect after the 

15 hearing. 

16 ‘‘(B) EXCEPTION.—Notwithstanding sub17 paragraph (A), the Commission may order re18 funds of any or all amounts paid for the period 

19 beginning on the refund effective date and end20 ing on the date on which the hearing con21 cludes— 

22 ‘‘(i) if the proceeding is not concluded 

23 by the date that is 15 months after the re24 fund effective date; and 


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1 ‘‘(ii) if the Commission determines at 

2 the conclusion of the proceeding that the 

3 proceeding was not resolved within the 15- 

4 month period primarily because of dilatory 

5 behavior by the natural gas company. 

6 ‘‘(C) INTEREST.—Refunds under this sub7 section shall be issued in an amount determined 

8 by the proceeding, plus interest, to the persons 

9 that paid the rates or charges.’’. 

10 SEC. 12. REGULATION OF CARBON DERIVATIVES MARKETS. 

11 (a) IN GENERAL.—Section 2 of the Commodity Ex12 change Act (7 U.S.C. 2), as amended by section 4 of this 

13 Act, is amended by adding at the end the following: 

14 ‘‘(k) The Commission shall have jurisdiction over the 

15 establishment, operation, and oversight of markets for reg16 ulated allowance derivatives, and shall provide for the es17 tablishment, operation, and oversight of the markets in 

18 accordance with the same regulations that apply under 

19 this Act to included energy transactions.’’. 

20 (b) DEFINITIONS.—Section 1a of such Act (7 U.S.C. 

21 1a), as amended by section 3(a) of this Act, is amended 

22 by redesignating paragraphs (32) through (36) as para23 graphs (34) through (38), respectively, and by inserting 

24 after paragraph (31) the following: 


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1 ‘‘(32) REGULATED ALLOWANCE.—The term 

2 ‘regulated allowance’ means any allowance author3 ized under law to emit a greenhouse gas, and any 

4 credit authorized under law based on a reduction in 

5 greenhouse gas emissions, the production of renew6 able energy, a carbon emission offset, or an increase 

7 in carbon sequestration. 

8 ‘‘(33) REGULATED ALLOWANCE DERIVATIVE.— 

9 The term ‘regulated allowance derivative’ means an 

10 instrument that is, or includes, an instrument— 

11 ‘‘(A) which— 

12 ‘‘(i) is of the character of, or is com13 monly known to the trade as, a ‘put op14 tion’, ‘call option’, ‘privilege’, ‘indemnity’, 

15 ‘advance guaranty’, ‘decline guaranty’, or 

16 ‘swap agreement’; or 

17 ‘‘(ii) is a contract of sale for future 

18 delivery, other than a written agreement 

19 for the origination and development of an 

20 offset project, and the related issuance of 

21 offset credits, pursuant to title VII of the 

22 Clean Air Act; and 

23 ‘‘(B) the value of which, in whole or in 

24 part, is expressly linked to the price of a reguVerDate Nov 24 2008 01:00 May 16, 2009 Jkt 079200 PO 00000 Frm 00049 Fmt 6652 Sfmt 6201 E:\BILLS\H2448.IH H2448

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1 lated allowance or another regulated allowance 

2 derivative.’’. 

Æ 


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