II 

110TH CONGRESS 

2D SESSION S. 3255 

To amend the Commodity Exchange Act to provide for the oversight of 

large trades of over-the-counter energy and agricultural contracts to 

prevent price manipulation and excessive speculation, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 11, 2008 

Mr. LEVIN (for himself and Mrs. FEINSTEIN) introduced the following bill; 

which was read twice and referred to the Committee on Agriculture, Nutrition, and Forestry 

A BILL 

To amend the Commodity Exchange Act to provide for the 

oversight of large trades of over-the-counter energy and 

agricultural contracts to prevent price manipulation and 

excessive speculation, 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, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Over-the-Counter 

5 Speculation Act’’. 


bajohnson on PROD1PC77 with BILLS
2 

S 3255 IS 

1 SEC. 2. LARGE OVER-THE-COUNTER TRANSACTIONS. 

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

3 2) is amended by adding at the end the following: 

4 ‘‘(j) COMMISSION OVERSIGHT OF OVER-THE5 COUNTER TRANSACTIONS.— 

6 ‘‘(1) OVER-THE-COUNTER TRANSACTIONS.— 

7 ‘‘(A) DEFINITION.—The term ‘over-the8 counter transaction’ means a contract, agree9 ment, or transaction in an exempt or agricul10 tural commodity that is— 

11 ‘‘(i) entered into only between persons 

12 that are eligible contract participants at 

13 the time the persons enter into the agree14 ment, contract, or transaction; 

15 ‘‘(ii) not entered into on a trading fa16 cility; and 

17 ‘‘(iii) not a sale of any cash com18 modity for deferred shipment or delivery. 

19 ‘‘(B) ALL OTC TRANSACTIONS IN20 CLUDED.—Notwithstanding subsections (g) and 

21 (h) and any exemption issued by the Commis22 sion under section 4(c), each over-the-counter 

23 transaction shall be subject to this subsection. 

24 ‘‘(2) COMMISSION OVERSIGHT AUTHORITY.— 

25 ‘‘(A) IN GENERAL.—In the case of a major 

26 market disturbance, as determined by the ComVerDate Aug 31 2005 05:23 Jul 12, 2008 Jkt 069200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3255.IS S3255

bajohnson on PROD1PC77 with BILLS
3 

S 3255 IS 

1 mission, the Commission may require any trad2 er required to report information under para3 graph (3) to take such action as the Commis4 sion considers to be necessary to maintain or 

5 restore orderly trading in any contract listed for 

6 trading on a registered entity, including— 

7 ‘‘(i) the liquidation of any over-the8 counter transaction; and 

9 ‘‘(ii) the fixing of any limit that may 

10 apply to a market position involving any 

11 over-the-country transaction acquired in 

12 good faith before the date of the deter13 mination of the Commission. 

14 ‘‘(B) MAJOR MARKET DISTURBANCE.—The 

15 term ‘major market disturbance’ means any 

16 market disturbance in a commodity market that 

17 prevents the commodity market from accurately 

18 reflecting the forces of supply and demand for 

19 a commodity, including— 

20 ‘‘(i) a threatened or actual market 

21 manipulation or corner; 

22 ‘‘(ii) excessive speculation; and 

23 ‘‘(iii) any action of the United States 

24 or a foreign government that affects a 

25 commodity. 


bajohnson on PROD1PC77 with BILLS
4 

S 3255 IS 

1 ‘‘(C) MARKET DISTURBANCE.—The term 

2 ‘market disturbance’ shall be interpreted in a 

3 manner consistent with section 8a(9). 

4 ‘‘(D) JUDICIAL REVIEW.—Any action 

5 taken by the Commission under subparagraph 

6 (A) shall be subject to judicial review carried 

7 out in accordance with section 8a(9). 

8 ‘‘(3) REPORTING; RECORDKEEPING.— 

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

10 require each covered person to submit to the 

11 Commission a report at such times and in such 

12 manner as the Commission determines appro13 priate, and containing the information required 

14 under subparagraph (C) to assist the Commis15 sion in detecting and preventing potential price 

16 manipulation of, or excessive speculation in, any 

17 contract listed for trading on a registered enti18 ty. 

19 ‘‘(B) COVERED PERSON.—In this sub20 section, the term ‘covered person’ means a per21 son that enters into an over-the-counter trans22 action the reporting of which is required as the 

23 result of a determination made under para24 graph (D). 


bajohnson on PROD1PC77 with BILLS
5 

S 3255 IS 

1 ‘‘(C) CONTENTS OF REPORT.—A report re2 quired under subparagraph (A) shall contain— 

3 ‘‘(i) information describing large trad4 ing positions of the covered person ob5 tained through 1 or more over-the-counter 

6 transactions that involve— 

7 ‘‘(I) substantial quantities of a 

8 commodity in the cash market; or 

9 ‘‘(II) substantial positions, in10 vestments, or trades in agreements or 

11 contracts relating to the commodity; 

12 and 

13 ‘‘(ii) any other information relating to 

14 each covered over-the-counter transaction 

15 carried out by the covered person that the 

16 Commission determines to be necessary to 

17 accomplish the purposes described in sub18 paragraph (A). 

19 ‘‘(D) LARGE TRANSACTIONS.—The Com20 mission shall identify the large over-the-counter 

21 transactions or class of large over-the-counter 

22 transactions the reporting of which the Com23 mission determines to be appropriate to assist 

24 the Commission in detecting and preventing po25 tential price manipulation of, or excessive specVerDate Aug 31 2005 05:23 Jul 12, 2008 Jkt 069200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S3255.IS S3255

bajohnson on PROD1PC77 with BILLS
6 

S 3255 IS 

1 ulation in, any contract listed for trading on a 

2 registered entity. In making the determinations 

3 as to which over-the-counter transactions shall 

4 be reported, the Commission shall consider the 

5 extent to which one or more of the following 

6 criteria applies— 

7 ‘‘(i) a standardized agreement is used 

8 to execute the transaction; 

9 ‘‘(ii) the transaction settles against 

10 any price (including the daily or final set11 tlement price) of 1 or more contracts listed 

12 for trading on a registered entity; 

13 ‘‘(iii) the price of the transaction is 

14 reported to a third party, published, or 

15 otherwise disseminated; 

16 ‘‘(iv) the price of the transaction is 

17 referenced in any other transaction; 

18 ‘‘(v) there is a significant volume of 

19 transactions; and 

20 ‘‘(vi) any other factor that the Com21 mission determines to be appropriate. 

22 ‘‘(E) RECORDKEEPING.—The Commission, 

23 by rule, shall require each covered person— 

24 ‘‘(i) in accordance with section 4i, to 

25 maintain such records as directed by the 


bajohnson on PROD1PC77 with BILLS
7 

S 3255 IS 

1 Commission for a period of 5 years, or 

2 longer, if directed by the Commission; and 

3 ‘‘(ii) to provide such records upon re4 quest to the Commission or the Depart5 ment of Justice. 

6 ‘‘(4) PROTECTION OF PROPRIETARY INFORMA7 TION.—In carrying out this subsection, the Commis8 sion may not— 

9 ‘‘(A) require the real-time publication of 

10 any proprietary information; 

11 ‘‘(B) prohibit the commercial sale or li12 censing of any real-time proprietary informa13 tion; and 

14 ‘‘(C) except as provided in section 8, pub15 licly disclose any information relating to any 

16 market position, business transaction, trade se17 cret, or name of any customer of a covered per18 son. 

19 ‘‘(5) RULEMAKING.— 

20 ‘‘(A) PROPOSED RULEMAKING.—Not later 

21 than 180 days after the date of enactment of 

22 this subsection, the Commission shall issue a 

23 notice of proposed rulemaking to specify the in24 formation required to be provided and mainVerDate Aug 31 2005 05:23 Jul 12, 2008 Jkt 069200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S3255.IS S3255

bajohnson on PROD1PC77 with BILLS
8 

S 3255 IS 

1 tained by a covered person under this sub2 section. 

3 ‘‘(B) FINAL RULE.—Not later than 1 year 

4 after the date of enactment of this subsection, 

5 the Commission shall promulgate a final rule to 

6 accomplish the purpose described in subpara7 graph (A).’’. 

Æ 


bajohnson on PROD1PC77 with BILLS