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[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 3268 Placed on Calendar Senate (PCS)]

                                                       Calendar No. 882
110th CONGRESS
  2d Session
                                S. 3268

    To amend the Commodity Exchange Act to prevent excessive price 
speculation with respect to energy commodities, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             July 15, 2008

    Mr. Reid (for himself, Mr. Durbin, Mr. Dorgan, Mrs. Murray, Mr. 
   Schumer, Mr. Casey, Ms. Mikulski, Mr. Carper, and Ms. Klobuchar) 
  introduced the following bill; which was ordered read the first time

                             July 16, 2008

            Read the second time and placed on the Calendar

_______________________________________________________________________

                                 A BILL

 
    To amend the Commodity Exchange Act to prevent excessive price 
speculation with respect to energy commodities, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Stop Excessive 
Energy Speculation Act of 2008''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definition of energy commodity.
Sec. 3. Speculative limits and transparency of off-shore trading.
Sec. 4. Authority of Commodity Futures Trading Commission with respect 
                            to certain traders.
Sec. 5. Working group of international regulators.
Sec. 6. Elimination of manipulation and excessive speculation as cause 
                            of high oil, gas, and energy prices.
Sec. 7. Large over-the-counter transactions.
Sec. 8. Index traders and swap dealers.
Sec. 9. Disaggregation of index funds and other data in energy markets.
Sec. 10. Additional Commodity Futures Trading Commission employees for 
                            improved enforcement.
Sec. 11. Working Group on Energy Markets.
Sec. 12. Study of regulatory framework for energy markets.
Sec. 13. Collection and analysis of information on energy commodities.
Sec. 14. National natural gas market investigation.
Sec. 15. Studies; reports.
Sec. 16. Expedited procedures.

SEC. 2. DEFINITION OF ENERGY COMMODITY.

    (a) Definition of Energy Commodity.--Section 1a of the Commodity 
Exchange Act (7 U.S.C. 1a) is amended--
            (1) by redesignating paragraphs (13) through (34) as 
        paragraphs (14) through (35), respectively; and
            (2) by inserting after paragraph (12) the following:
            ``(13) Energy commodity.--The term `energy commodity' 
        means--
                    ``(A) a petroleum product; and
                    ``(B) natural gas.''.
    (b) Conforming Amendments.--
            (1) Section 2(c)(2)(B)(i)(II)(cc) of the Commodity Exchange 
        Act (7 U.S.C. 2(c)(2)(B)(i)(II)(cc)) is amended--
                    (A) in subitem (AA), by striking ``section 1a(20)'' 
                and inserting ``section 1a(21)''; and
                    (B) in subitem (BB), by striking ``section 1a(20)'' 
                and inserting ``section 1a(21)''.
            (2) Section 13106(b)(1) of the Food, Conservation, and 
        Energy Act of 2008 is amended by striking ``section 1a(32)'' 
        and inserting ``section 1a''.
            (3) Section 402 of the Legal Certainty for Bank Products 
        Act of 2000 (7 U.S.C. 27) is amended--
                    (A) in subsection (a)(7), by striking ``section 
                1a(20)'' and inserting ``section 1a''; and
                    (B) in subsection (d)--
                            (i) in paragraph (1)(B), by striking 
                        ``section 1a(33)'' and inserting ``section 
                        1a''; and
                            (ii) in paragraph (2)(D), by striking 
                        ``section 1a(13)'' and inserting ``section 
                        1a''.

SEC. 3. SPECULATIVE LIMITS AND TRANSPARENCY OF OFF-SHORE TRADING.

    Section 4 of the Commodity Exchange Act (7 U.S.C. 6) is amended by 
adding at the end the following:
    ``(e) Foreign Boards of Trade.--
            ``(1) In general.--The Commission may not permit a foreign 
        board of trade to provide to the members of the foreign board 
        of trade or other participants located in the United States, or 
        otherwise subject to the jurisdiction of the Commission, direct 
        access to the electronic trading and order matching system of 
        the foreign board of trade with respect to an agreement, 
        contract, or transaction in an energy commodity that settles 
        against any price (including the daily or final settlement 
        price) of 1 or more contracts listed for trading on a 
        registered entity, unless--
                    ``(A) the foreign board of trade--
                            ``(i) makes public daily trading 
                        information regarding the agreement, contract, 
                        or transaction that is comparable to the daily 
                        trading information published by the registered 
                        entity for the 1 or more contracts against 
                        which the foreign board of trade settles; and
                            ``(ii) promptly notifies the Commission of 
                        any change regarding--
                                    ``(I) the information that the 
                                foreign board of trade will make 
                                publicly available;
                                    ``(II) the position limits, 
                                speculation limits, and position 
                                accountability provisions that the 
                                foreign board of trade will adopt and 
                                enforce;
                                    ``(III) the position reductions 
                                required to prevent manipulation; and
                                    ``(IV) any other area of interest 
                                expressed by the Commission to the 
                                foreign board of trade; and
                    ``(B) the foreign board of trade (or the foreign 
                futures authority that oversees the foreign board of 
                trade)--
                            ``(i) adopts position limits (including 
                        related hedge exemption provisions), 
                        speculation limits, or position accountability 
                        provisions for speculators for the agreement, 
                        contract, or transaction that are comparable to 
                        the position limits (including related hedge 
                        exemption provisions), speculation limits, or 
                        position accountability provisions adopted by 
                        the registered entity for the 1 or more 
                        contracts against which the foreign board of 
                        trade settles;
                            ``(ii) has the authority to require or 
                        direct market participants to limit, reduce, or 
                        liquidate any position the foreign board of 
                        trade (or the foreign futures authority that 
                        oversees the foreign board of trade) determines 
                        to be necessary to prevent or reduce the threat 
                        of price manipulation, excessive speculation, 
                        price distortion, or disruption of delivery or 
                        the cash settlement process; and
                            ``(iii) provides information to the 
                        Commission regarding the extent of legitimate 
                        and nonlegitimate hedge trading in the 
                        agreement, contract, or transaction that is 
                        comparable to the information that the 
                        Commission determines to be necessary to 
                        publish the commitments of traders report of 
                        the Commission for the 1 or more contracts 
                        against which the foreign board of trade 
                        settles.
            ``(2) Existing foreign boards of trade.--Paragraph (1) 
        shall not be effective with respect to any agreement, contract, 
        or transaction in an energy commodity executed on a foreign 
        board of trade to which the Commission had granted direct 
        access permission prior to the date of enactment of this 
        subsection until the date that is 180 days after the date of 
        enactment of this subsection.''.

SEC. 4. AUTHORITY OF COMMODITY FUTURES TRADING COMMISSION WITH RESPECT 
              TO CERTAIN TRADERS.

    (a) In General.--
            (1) Restriction of futures trading to contract markets or 
        derivatives transaction execution facilities.--Section 4(b) of 
        the Commodity Exchange Act (7 U.S.C. 6(b)) is amended by 
        inserting after the first sentence the following: ``The 
        Commission may adopt rules and regulations requiring the 
        maintenance of books and records by any person that is located 
        within the United States (including the territories and 
        possessions of the United States) or that enters trades 
        directly into the trade matching system of a foreign board of 
        trade from the United States (including the territories and 
        possessions of the United States).''
            (2) Excessive speculation as a burden on interstate 
        commerce.--Section 4a of the Commodity Exchange Act (7 U.S.C. 
        6a) is amended--
                    (A) in subsection (e), in the second sentence--
                            (i) by striking ``this Act for any person'' 
                        and inserting ``this Act for (1) any person''; 
                        and
                            (ii) by inserting after ``to section 
                        5c(c)(1)'' the following: ``, and (2) any 
                        person that is located within the United States 
                        (including the territories and possessions of 
                        the United States) or that enters trades 
                        directly into the trade matching system of a 
                        foreign board of trade from the United States 
                        (including the territories and possessions of 
                        the United States) to violate any bylaw, rule, 
                        regulation, or resolution of any foreign board 
                        of trade or foreign futures authority fixing 
                        limits on the amount of trading that may be 
                        carried out or positions that may be held under 
                        any contract of sale of an energy commodity for 
                        future delivery or under any option on such 
                        contract or energy commodity, that settles 
                        against any price (including the daily or final 
                        settlement price) of 1 or more contracts listed 
                        for trading on a registered entity''; and
                    (B) by adding at the end the following:
    ``(f) Consultation.--Before taking any action under subsection (e), 
the Commission shall consult with the appropriate--
            ``(1) foreign board of trade; and
            ``(2) foreign futures authority.''.
            (3) Violations.--Section 9(a) of the Commodity Exchange Act 
        (7 U.S.C. 13(a)) is amended by inserting ``(including any 
        person trading on a foreign board of trade)'' after ``Any 
        person'' each place it appears.
            (4) Effect.--No amendment made by this subsection limits 
        any of the otherwise applicable authorities of the Commodity 
        Futures Trading Commission.

SEC. 5. WORKING GROUP OF INTERNATIONAL REGULATORS.

    Section 4a of the Commodity Exchange Act (7 U.S.C. 6a) (as amended 
by section 4(a)(2)(B)) is amended by adding at the end the following:
    ``(g) Working Group of International Regulators.--Not later than 90 
days after the date of enactment of this subsection, the Commission 
shall convene a working group of international regulators to develop 
uniform international reporting and regulatory standards to ensure the 
protection of the energy futures markets from nonlegitimate hedge 
trading, excessive speculation, manipulation, location shopping, and 
lowest common dominator regulation, each of which pose systemic risks 
to all energy futures markets, countries, and consumers.''.

SEC. 6. ELIMINATION OF MANIPULATION AND EXCESSIVE SPECULATION AS CAUSE 
              OF HIGH OIL, GAS, AND ENERGY PRICES.

    Section 4a of the Commodity Exchange Act (7 U.S.C. 6a) (as amended 
by section 5) is amended by adding at the end the following:
    ``(h) Elimination of Excessive Speculation and Nonlegitimate Hedge 
Trading as a Cause of High Oil, Gas, and Energy Prices.--
            ``(1) Definition of legitimate hedge trading.--
                    ``(A) In general.--The term `legitimate hedge 
                trading' means the conduct of trading that involves 
                transactions by commercial producers and purchasers of 
                actual physical petroleum and energy commodities for 
                future delivery and the direct counterparties to such 
                trades (regardless of whether the counterparties are 
                commercial producers or purchasers).
                    ``(B) Inclusion.--To the extent a commercial 
                producer or purchaser of an actual physical energy 
                commodity for future delivery trades with an 
                intermediary (referred to in this subparagraph as an 
                `initial trade'), each subsequent trade by the 
                intermediary arising solely due to the initial trade 
                and that directly results from such initial trade 
                (referred to in this subparagraph as a `follow-on 
                trade') shall be considered to be the conduct of 
                `legitimate hedge trading' if each follow-on trade 
                executed by the intermediary is--
                            ``(i) done proximate to the initial trade; 
                        and
                            ``(ii) in the aggregate, economically the 
                        same in size and substance as the initial 
                        trade.
            ``(2) Identification of legitimate hedge trading.--In 
        carrying out this Act, the Commission shall distinguish 
        between--
                    ``(A) legitimate hedge trading; and
                    ``(B) all other trading in energy commodities.
            ``(3) Type of trading.--Notwithstanding any other provision 
        of this Act, the Commission shall modify (or delegate any 
        appropriate entity to modify) such definitions, 
        classifications, and data collection under this Act as are 
        necessary to ensure that all direct and indirect parties and 
        counterparties to all trades in the energy commodities market 
        are clearly identified for all purposes as engaging in--
                    ``(A) legitimate hedge trading; or
                    ``(B) any other type of trading.
            ``(4) Elimination of excessive speculation.--
                    ``(A) In general.--Notwithstanding any other 
                provision of this Act, the Commission shall review all 
                regulations, rules, exemptions, exclusions, guidance, 
                no action letters, orders, and other actions taken by 
                or on behalf of the Commission (including any action or 
                inaction taken pursuant to delegated authority by an 
                exchange, self-regulatory organization, or any other 
                entity) regarding all energy futures market 
                participants or market activity (referred to in this 
                subsection individually as a `prior action') to ensure 
                that--
                            ``(i) legitimate hedge trading is protected 
                        and promoted; and
                            ``(ii) excessive speculation is eliminated.
                    ``(B) Prior action.--
                            ``(i) In general.--The Commission shall 
                        consider modifying or revoking the application 
                        after the date of enactment of this subsection 
                        of any prior action taken by the Commission 
                        (including any prior action taken pursuant to 
                        delegated authority by any other entity) with 
                        respect to any trade on any market, exchange, 
                        foreign board of trade, swap or swap 
                        transaction, index or index market participant 
                        or trade, hedge fund, pension fund, and any 
                        other transaction, trade, trader, or petroleum 
                        or energy futures market activity unless the 
                        Commission affirmatively determines that such 
                        prior action will protect and promote 
                        legitimate hedge trading and does not permit or 
                        encourage excessive speculation.
                            ``(ii) Revocation.--In carrying out this 
                        subparagraph, the Commission shall consider 
                        modifying or revoking the results of each prior 
                        action that, in whole or in part, has the 
                        direct or indirect affect of limiting, 
                        reducing, or eliminating the filing of any 
                        report or data regarding any direct or indirect 
                        trade or trader, including the filing of large 
                        trader reports.
                    ``(C) Speculative position limits applicable to 
                nonlegitimate hedge trading in energy commodities and 
                derivatives.--
                            ``(i) Speculative position limits.--
                                    ``(I) In general.--Not later than 
                                30 days after the date of enactment of 
                                this subsection, the Commission shall 
                                impose, by rule, regulation, or order, 
                                speculative position limits on trading 
                                that is not legitimate hedge trading.
                                    ``(II) Application.--The Commission 
                                shall apply the limits imposed under 
                                subclause (I) to any person who 
                                executes accounts, agreements, or 
                                transactions involving an energy 
                                commodity for the own account of the 
                                person and to any person for whom an 
                                agent in fact or substance executes 
                                accounts, agreements, or transactions 
                                involving an energy commodity, on a 
                                registered entity or in covered over-
                                the-counter trading.
                            ``(ii) Advisory group.--
                                    ``(I) In general.--Not later than 
                                30 days after the date of enactment of 
                                this subsection, the Commission shall 
                                convene an advisory group primarily 
                                consisting of commercial producers and 
                                purchasers of actual physical energy 
                                commodities for future delivery.
                                    ``(II) Recommendations.--Not later 
                                than 60 days after the date on which 
                                the advisory group is convened under 
                                subclause (I), and annually thereafter, 
                                the advisory group shall submit to the 
                                Commission recommendations regarding an 
                                appropriate level for position limits--
                                            ``(aa) that are designed 
                                        for traders or entities that 
                                        are not legitimate hedge 
                                        traders; and
                                            ``(bb) to replace the 
                                        position limits imposed by the 
                                        Commission under clause (i)(I).
                                    ``(III) Applicability of faca.--The 
                                advisory group shall be subject to the 
                                Federal Advisory Committee Act (5 
                                U.S.C. App.).
                            ``(iii) Review of recommendations.--Not 
                        later than 270 days after the date of enactment 
                        of this subsection, the Commission shall--
                                    ``(I) analyze and review the 
                                recommendations submitted by the 
                                advisory group under clause (ii)(II); 
                                and
                                    ``(II) submit to the appropriate 
                                committees of Congress a report 
                                describing each recommendation 
                                (including each modification to the 
                                statutory authority of the Commission 
                                that the Commission determines to be 
                                necessary to effectuate each 
                                recommendation).
                            ``(iv) Rulemaking.--
                                    ``(I) In general.--Not later than 
                                18 months after the date of enactment 
                                of this subsection, the Commission 
                                shall promulgate a final rule that 
                                establishes speculative position 
                                limits--
                                            ``(aa) for any person 
                                        engaged in nonlegitimate hedge 
                                        trading of an energy commodity; 
                                        and
                                            ``(bb) that are consistent 
                                        with this Act.
                                    ``(II) Effective date.--The final 
                                rule described in subclause (I) shall 
                                take effect on the date that is 30 days 
                                after the date on which the Commission 
                                promulgates the final rule.
                            ``(v) Development of methodology.--
                                    ``(I) In general.--Not later than 
                                180 days after the date of enactment of 
                                this subsection, the Commission shall 
                                propose a methodology to determine and 
                                set aggregate speculative position 
                                limits at the control entity level for 
                                all nonlegitimate traders of energy 
                                commodities--
                                            ``(aa) on designated 
                                        contract markets;
                                            ``(bb) on derivatives 
                                        transaction execution 
                                        facilities; and
                                            ``(cc) in over-the-counter 
                                        commodity derivatives.
                                    ``(II) Report.--Not later than 180 
                                days after the date of enactment of 
                                this subsection, the Commission shall 
                                submit to the appropriate committees of 
                                Congress a report that contains--
                                            ``(aa) any recommendations 
                                        regarding any additional 
                                        statutory authority that the 
                                        Commission determines to be 
                                        necessary for the imposition of 
                                        the speculative position limits 
                                        described in subclause (I); and
                                            ``(bb) a description of the 
                                        resources that the Commission 
                                        considers to be necessary to 
                                        implement the speculative 
                                        position limits.
                    ``(D) Maximum level of speculative position 
                limits.--
                            ``(i) In general.--In establishing 
                        speculative position limits under this section 
                        (including subparagraph (C)(iv)), the 
                        Commission shall set the limits at the maximum 
                        level practicable--
                                    ``(I) to ensure sufficient market 
                                liquidity for the conduct of legitimate 
                                hedging activities;
                                    ``(II) to ensure that price 
                                discovery is not disrupted;
                                    ``(III) to protect and promote 
                                legitimate hedge trading;
                                    ``(IV) to minimize nonlegitimate 
                                hedge trading; and
                                    ``(V) to eliminate excess 
                                speculation.
                            ``(ii) Effect.--
                                    ``(I) In general.--Nothing in this 
                                subparagraph modifies the spot month 
                                position limitation of 3,000 contracts 
                                that is designed to prevent a corner or 
                                squeeze at the delivery date.
                                    ``(II) Commission action.--If the 
                                Commission sets position limits under 
                                clause (i) that are different from the 
                                spot month position limit described in 
                                subclause (I), the Commission shall 
                                include in the report required under 
                                subparagraph (C)(v)(II) an analysis 
                                describing the reasons for the position 
                                limits.''.

SEC. 7. LARGE OVER-THE-COUNTER TRANSACTIONS.

    Section 2 of the Commodity Exchange Act (7 U.S.C. 2) is amended by 
adding at the end the following:
    ``(j) Over-the-Counter Transactions.--
            ``(1) Definitions.--In this subsection:
                    ``(A) Covered over-the-counter transaction.--The 
                term `covered over-the-counter transaction' means an 
                over-the-counter transaction the reporting of which is 
                required by the Commission as the result of a 
                determination made under paragraph (3)(C).
                    ``(B) Covered person.--The term `covered person' 
                means a person that enters into a covered over-the-
                counter transaction.
                    ``(C) Major market disturbance.--The term `major 
                market disturbance' means any disturbance in a 
                commodity market that disrupts the liquidity and price 
                discovery function of that market from accurately 
                reflecting the forces of supply and demand for a 
                commodity, including--
                            ``(i) a threatened or actual market 
                        manipulation or corner;
                            ``(ii) excessive speculation;
                            ``(iii) nonlegitimate hedge trading; and
                            ``(iv) any action of the United States or a 
                        foreign government that affects a commodity.
                    ``(D) Market disturbance.--The term `market 
                disturbance' shall be interpreted in accordance with 
                section 8a(9)).
                    ``(E) Over-the-counter transaction.--The term 
                `over-the-counter transaction' means a contract, 
                agreement, or transaction in a petroleum or energy 
                commodity that is--
                            ``(i) entered into only between persons 
                        that are eligible contract participants at the 
                        time the persons enter into the agreement, 
                        contract, or transaction;
                            ``(ii) not entered into on a trading 
                        facility; and
                            ``(iii) not a sale of any cash commodity 
                        for deferred shipment or delivery.
            ``(2) Commission oversight authority.--
                    ``(A) In general.--In the case of a major market 
                disturbance, as determined by the Commission, the 
                Commission may require any trader subject to the 
                reporting requirements described in paragraph (3) to 
                take such action as the Commission considers to be 
                necessary to maintain or restore orderly trading in any 
                contract listed for trading on a registered entity, 
                including--
                            ``(i) the liquidation of any over-the-
                        counter transaction; and
                            ``(ii) the fixing of any limit that may 
                        apply to a market position involving any over-
                        the-counter transaction acquired in good faith 
                        before the date of the determination of the 
                        Commission.
                    ``(B) Judicial review.--Any action taken by the 
                Commission under subparagraph (A) shall be subject to 
                judicial review carried out in accordance with section 
                8a(9).
            ``(3) Reporting; recordkeeping.--
                    ``(A) In general.--The Commission shall require 
                each covered person to submit to the Commission a 
                report--
                            ``(i) at such time and in such manner as 
                        the Commission determines to be appropriate; 
                        and
                            ``(ii) containing the information required 
                        under subparagraph (B) to assist the Commission 
                        in detecting and preventing potential price 
                        manipulation of, or excessive speculation in, 
                        any contract listed for trading on a registered 
                        entity.
                    ``(B) Contents of report.--A report required under 
                subparagraph (A) shall contain--
                            ``(i) information describing large trading 
                        positions of the covered person obtained 
                        through 1 or more over-the-counter transactions 
                        that involve--
                                    ``(I) substantial quantities of a 
                                commodity in the cash market; or
                                    ``(II) substantial positions, 
                                investments, or trades in agreements or 
                                contracts relating to the commodity;
                            ``(ii) any other information relating to 
                        each covered over-the-counter transaction 
                        carried out by the covered person that the 
                        Commission determines to be necessary to 
                        accomplish the purposes described in 
                        subparagraph (A); and
                            ``(iii) information distinguishing 
                        legitimate hedge trading from nonlegitimate 
                        hedge trading.
                    ``(C) Determination of covered over-the-counter 
                transactions.--
                            ``(i) In general.--The Commission shall 
                        identify each large over-the-counter 
                        transaction or class of large over-the-counter 
                        transactions the reporting of which the 
                        Commission determines to be appropriate to 
                        assist the Commission in detecting and 
                        preventing potential price manipulation of, or 
                        excessive speculation in, any contract listed 
                        for trading on a registered entity.
                            ``(ii) Mandatory factors for 
                        determinations.--
                                    ``(I) In general.--In carrying out 
                                a determination under clause (i), the 
                                Commission shall consider the extent to 
                                which each factor described in 
                                subclause (II) applies.
                                    ``(II) Factors.--The factors 
                                required for carrying out a 
                                determination under clause (i) include 
                                whether--
                                            ``(aa) a standardized 
                                        agreement is used to execute 
                                        the over-the-counter 
                                        transaction;
                                            ``(bb) the over-the-counter 
                                        transaction settles against any 
                                        price (including the daily or 
                                        final settlement price) of 1 or 
                                        more contracts listed for 
                                        trading on a registered entity;
                                            ``(cc) the price of the 
                                        over-the-counter transaction is 
                                        reported to a third party, 
                                        published, or otherwise 
                                        disseminated;
                                            ``(dd) the price of the 
                                        over-the-counter transaction is 
                                        referenced in any other 
                                        transaction;
                                            ``(ee) there is a 
                                        significant volume of the over-
                                        the-counter transaction or 
                                        class of over-the-counter 
                                        transactions; and
                                            ``(ff) there is any other 
                                        factor that the Commission 
                                        determines to be appropriate.
                    ``(D) Recordkeeping.--The Commission, by rule, 
                shall require each covered person--
                            ``(i) in accordance with section 4i, to 
                        maintain such records as directed by the 
                        Commission for a period of 5 years, or longer, 
                        if directed by the Commission; and
                            ``(ii) to provide such records upon request 
                        to the Commission or the Department of Justice.
            ``(4) Protection of proprietary information.--In carrying 
        out this subsection, the Commission may not--
                    ``(A) require the real-time publication of any 
                proprietary information;
                    ``(B) prohibit the commercial sale or licensing of 
                any real-time proprietary information; and
                    ``(C) except as provided in section 8, publicly 
                disclose any information relating to any market 
                position, business transaction, trade secret, or name 
                of any customer of a covered person.
            ``(5) Applicability.--Notwithstanding subsections (g) and 
        (h), and any exemption issued by the Commission for any energy 
        commodity, each over-the-counter transaction shall be subject 
        to this subsection.
            ``(6) Savings clause.--Nothing in this subsection modifies 
        or alters--
                    ``(A) the guidance of the Commission; or
                    ``(B) any applicable requirements with respect the 
                disclosure of proprietary information.''.

SEC. 8. INDEX TRADERS AND SWAP DEALERS.

    Section 4 of the Commodity Exchange Act (7 U.S.C. 6) (as amended by 
section 3) is amended by adding at the end the following:
    ``(f) Index Traders and Swap Dealers.--Not later than 60 days after 
the date of enactment of this subsection, the Commission shall--
            ``(1) routinely require detailed reporting from index 
        traders and swap dealers in markets under the jurisdiction of 
        the Commission;
            ``(2) reclassify the types of traders for regulatory and 
        reporting purposes to distinguish between index traders and 
        swaps dealers;
            ``(3) review the trading practices for index traders in 
        markets under the jurisdiction of the Commission--
                    ``(A) to ensure that index trading is not adversely 
                impacting the price discovery process; and
                    ``(B) to determine whether different practices or 
                regulations should be implemented; and
            ``(4) ensure, to the maximum extent practicable, that the 
        reports required under this subsection distinguish between 
        legitimate and nonlegitimate hedge trading.''.

SEC. 9. DISAGGREGATION OF INDEX FUNDS AND OTHER DATA IN ENERGY MARKETS.

    Section 4 of the Commodity Exchange Act (7 U.S.C. 6) (as amended by 
section 8) is amended by adding at the end the following:
    ``(g) Disaggregation of Index Funds and Other Data in Energy 
Markets.--The Commission shall disaggregate and make public monthly--
            ``(1) the number of positions and total value of index 
        funds and other passive, long-only positions in energy markets; 
        and
            ``(2) data on speculative positions relative to bona fide 
        physical hedgers in those markets.''.

SEC. 10. ADDITIONAL COMMODITY FUTURES TRADING COMMISSION EMPLOYEES FOR 
              IMPROVED ENFORCEMENT.

    Section 2(a)(7) of the Commodity Exchange Act (7 U.S.C. 2(a)(7)) is 
amended by adding at the end the following:
                    ``(D) Additional employees.--As soon as practicable 
                after the date of enactment of this subparagraph, the 
                Commission shall appoint at least 100 full-time 
                employees (in addition to the employees employed by the 
                Commission as of the date of enactment of this 
                subparagraph)--
                            ``(i) to increase the public transparency 
                        of operations in energy futures markets;
                            ``(ii) to improve the enforcement of this 
                        Act in those markets; and
                            ``(iii) to carry out such other duties as 
                        are prescribed by the Commission.''.

SEC. 11. WORKING GROUP ON ENERGY MARKETS.

    (a) Establishment.--There is established a Working Group on Energy 
Markets.
    (b) Composition.--The Working Group shall be composed of--
            (1) the Secretary of Energy (referred to in this section as 
        the ``Secretary'');
            (2) the Secretary of the Treasury;
            (3) the Chairman of the Federal Energy Regulatory 
        Commission;
            (4) the Chairman of Federal Trade Commission;
            (5) the Chairman of the Securities and Exchange Commission;
            (6) the Chairman of the Commodity Futures Trading 
        Commission; and
            (7) the Administrator of the Energy Information 
        Administration.
    (c) Chairperson.--
            (1) Initial chairperson.--The Secretary shall serve as the 
        Chairperson of the Working Group for the 1-year period 
        beginning on the date of enactment of this Act.
            (2) Rotation of chairpersons.--For each 1-year period 
        following the period described in paragraph (1), each 
        individual described in subsection (b) shall serve as the 
        Chairperson of the Working Group in the order corresponding to 
        which the individual is described in that subsection.
    (d) Purpose and Function.--The Working Group shall--
            (1) investigate the effect of speculation in energy 
        commodities on energy prices and the energy security of the 
        United States;
            (2) recommend to the President and Congress laws (including 
        regulations) that may be needed to prevent excessive 
        speculation in energy commodities to prevent or minimize the 
        adverse impact of high energy prices on consumers and the 
        economy of the United States; and
            (3) review energy security considerations posed by 
        developments in international energy markets.
    (e) Administration.--The Secretary shall provide the Working Group 
with such administrative and support services as may be necessary for 
the performance of the functions of the Working Group.
    (f) Cooperation of Other Agencies.--The heads of Executive 
departments, agencies, and independent instrumentalities shall, to the 
extent permitted by law, provide the Working Group with such 
information as the Working Group requires to carry out this section.
    (g) Consultation.--The Working Group shall consult, as appropriate, 
with representatives of the various exchanges, clearinghouses, self-
regulatory bodies, other major market participants, consumers, and the 
general public.

SEC. 12. STUDY OF REGULATORY FRAMEWORK FOR ENERGY MARKETS.

    (a) Study.--The Working Group established under section 11(a) shall 
conduct a study to--
            (1) identify the factors that affect the pricing of crude 
        oil and refined petroleum products, including an examination of 
        the effects of market speculation on prices; and
            (2) review and assess the roles, missions, and structures 
        of relevant Federal agencies, examine interagency coordination, 
        and identify and assess the gaps that need to be filled for the 
        Federal Government to effectively oversee and regulate markets 
        critical to the energy security of the United States.
    (b) Elements of Study.--The study shall include--
            (1) an examination of price formation with respect to crude 
        oil and refined petroleum products;
            (2) an examination of relevant international regulatory 
        regimes; and
            (3) an examination of the degree to which changes in energy 
        market transparency, liquidity, and structure have influenced 
        or driven abuse, manipulation, excessive speculation, or 
        inefficient price formation.
    (c) Report and Recommendations.--Not later than 1 year after the 
date of enactment of this Act, the Secretary of Energy shall submit to 
the appropriate committees of Congress a report that--
            (1) describes the results of the study; and
            (2) provides options and the recommendations of the Working 
        Group for appropriate Federal coordination of oversight and 
        regulatory actions to ensure transparency of crude oil and 
        refined petroleum product pricing and the elimination of 
        excessive speculation.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

SEC. 13. COLLECTION AND ANALYSIS OF INFORMATION ON ENERGY COMMODITIES.

    (a) Accurate and Complete Information on Energy Producing 
Companies.--Section 205(h)(1) of the Department of Energy Organization 
Act (42 U.S.C. 7135(h)(1)) is amended by adding at the end the 
following:
                    ``(C) Information on energy-producing companies.--
                Notwithstanding any other provision of law, the head of 
                each Federal department or agency shall provide to the 
                Administrator, on the request of the Administrator, 
                such information as the Administrator may require to 
                identify each energy-producing company.''.
    (b) Enhanced Data on Ownership of Critical Energy Commodities.--
Section 205 of the Department of Energy Organization Act (42 U.S.C. 
7135) is amended by adding at the end the following:
    ``(n) Collection of Information on Ownership of Energy 
Commodities.--
            ``(1) In general.--To ensure transparency of information 
        with respect to critical energy infrastructure and product 
        ownership in the United States, the Administrator shall collect 
        on a weekly basis information identifying the ownership of all 
        commercially held oil and natural gas inventories in the United 
        States.
            ``(2) Company-specific data.--The information shall include 
        company-specific data, including--
                    ``(A) volumes of product under ownership; and
                    ``(B) storage and transportation capacity 
                (including owned and leased capacity).
            ``(3) Protection of proprietary information.--Section 11(d) 
        of the Energy Supply and Environmental Coordination Act of 1974 
        (15 U.S.C. 796(d)) shall apply to information collected under 
        this section.
    ``(o) Monthly Reporting on Energy Commodity Transactions.--
            ``(1) In general.--In accordance with paragraph (2), to 
        improve the ability to evaluate the energy security of the 
        United States, any person holding or controlling energy futures 
        contracts or energy commodity swaps (as defined in section 202 
        of the Energy Policy and Conservation Act) at a level to be 
        determined by the Secretary for which the underlying energy 
        commodity is physically delivered within the United States 
        shall report on a monthly basis, with respect to the energy 
        commodities and the byproducts of the energy commodities--
                    ``(A) the quantity of physical stocks owned;
                    ``(B) the quantity of fixed price purchase 
                commitments open;
                    ``(C) the quantity of fixed price sales commitments 
                open;
                    ``(D) the physical storage capacity owned or 
                leased; and
                    ``(E) such other information as the Secretary 
                determines is necessary to provide adequate 
                transparency with respect to entities that control 
                critical energy assets in the United States.
            ``(2) Use of data.--Any data collected under paragraph (1) 
        shall not be made public in a manner that is inconsistent with 
        this Act.
    ``(p) Financial Market Analysis Office.--
            ``(1) Establishment.--There shall be within the Energy 
        Information Administration a Financial Market Analysis Office, 
        headed by a director, who shall report directly to the 
        Administrator of the Energy Information Administration.
            ``(2) Duties.--The Office shall be responsible for analysis 
        of the financial aspects of energy markets.
            ``(3) Analyses.--The Administrator of the Energy 
        Information Administration shall take analyses by the Office 
        into account in conducting analyses and forecasting of energy 
        prices.''.
    (c) Conforming Amendment.--Section 645 of the Department of Energy 
Organization Act (42 U.S.C. 7255) is amended by inserting ``(15 U.S.C. 
3301 et seq.) and the Natural Gas Act (15 U.S.C. 717 et seq.)'' after 
``Natural Gas Policy Act of 1978''.

SEC. 14. NATIONAL NATURAL GAS MARKET INVESTIGATION.

    (a) In General.--Not later than 30 days after the date of enactment 
of this Act, in order to ensure the integrity of natural gas markets, 
the Federal Energy Regulatory Commission (referred to in this section 
as the ``Commission'') shall commence an investigation into the role of 
financial institutions in natural gas markets, including--
            (1) trends in investment in natural gas storage, 
        transportation capacity, and pipeline infrastructure;
            (2) factors contributing to potential effects on wholesale 
        natural gas prices, including the mechanisms covered by 
        physical natural gas supply contracts;
            (3) the character and number of positions held in related 
        financial markets; and
            (4) any international considerations the Commission 
        considers relevant.
    (b) Assessment.--The Commission may include in the investigation an 
assessment of real-time market dynamics during the 2008 winter heating 
season.
    (c) Required Data.--Each Federal department and agency shall comply 
with any request from the Commission for records, papers, and 
information in the possession of the department or agency relating to 
any agreement, contract, or transaction for the sale of an energy 
commodity for future delivery in interstate or foreign commerce, or any 
energy commodity swap.
    (d) Reports.--Not later than 270 days after the date of enactment 
of this Act, the Commission shall submit to the Committee on Energy and 
Natural Resources of the Senate and the Committee on Energy and 
Commerce of the House of Representatives a report on the findings, 
conclusions, and recommendations of the investigation conducted under 
this section.
    (e) Additional Investigations.--On an annual basis and during any 
other period the Commission determines necessary, the Commission 
shall--
            (1) conduct an investigation that is similar to the 
        investigation required under subsections (a) through (c); and
            (2) submit to the Committee on Energy and Natural Resources 
        of the Senate and the Committee on Energy and Commerce of the 
        House of Representatives a report on the findings, conclusions, 
        and recommendations of the investigation.
    (f) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

SEC. 15. STUDIES; REPORTS.

    (a) Study Relating to International Regulation of Energy Commodity 
Markets.--
            (1) In general.--The Comptroller General of the United 
        States shall conduct a study of the international regime for 
        regulating the trading of energy commodity futures and 
        derivatives.
            (2) Analysis.--The study shall include an analysis of, at a 
        minimum--
                    (A) key common features and differences among 
                countries in the regulation of energy commodity 
                trading, including with respect to market oversight and 
                enforcement standards and activities;
                    (B) variations among countries with respect to the 
                use of position limits, accountability limits, or other 
                thresholds to detect and prevent price manipulation, 
                excessive speculation, or other unfair trading 
                practices;
                    (C) variations in practices regarding the 
                differentiation of commercial and noncommercial 
                trading;
                    (D) agreements and practices for sharing market and 
                trading data among regulatory bodies and among 
                individual regulators and the entities that the bodies 
                and regulators oversee; and
                    (E) agreements and practices for facilitating 
                international cooperation on market oversight, 
                compliance, and enforcement.
            (3) Report.--Not later than 1 year after the date of 
        enactment of this Act, the Comptroller General shall submit to 
        the appropriate committees of Congress a report that--
                    (A) describes the results of the study;
                    (B) addresses the effects of excessive speculation 
                and energy price volatility on energy futures; and
                    (C) provides recommendations to improve openness, 
                transparency, and other necessary elements of a 
                properly functioning market in a manner that protects 
                consumers in the United States.
    (b) Study Relating to Effects of Noncommercial Speculators on 
Energy Futures Markets and Energy Prices.--
            (1) Study.--The Comptroller General of the United States 
        shall conduct a study of the effects of noncommercial 
        speculators on energy futures markets and energy prices.
            (2) Analysis.--The study shall include an analysis of, at a 
        minimum--
                    (A) the effect of increased amounts of capital in 
                energy futures markets;
                    (B) the impact of the roll-over of positions by 
                index fund traders and swap dealers on energy futures 
                markets and energy prices; and
                    (C) the extent to which each factor described in 
                subparagraphs (A) and (B) and noncommercial 
                speculators--
                            (i) affect--
                                    (I) the pricing of energy 
                                commodities; and
                                    (II) risk management functions; and
                            (ii) contribute to economically efficient 
                        price discovery.
            (3) Report.--Not later than 2 years after the date of 
        enactment of this Act, the Comptroller General shall submit to 
        the appropriate committees of Congress a report that describes 
        the results of the study.
    (c) Reports of Commodity Futures Trading Commission.--
            (1) In general.--The Commission shall submit to Congress--
                    (A) not later than 60 days after the date of 
                enactment of this Act, a report that describes in 
                detail the actions the Commission has taken, is taking, 
                and intends to take to carry out this subsection 
                (including any recommended legislative changes that are 
                necessary to carry out this subsection); and
                    (B) not later than 45 days after the date described 
                in subparagraph (A) and every 45 days thereafter until 
                the date of implementation of this subsection, an 
                update on the report required under subparagraph (A).
            (2) Additional employees or resources.--Not later than 60 
        days after the date of enactment of this Act, the Commission 
        shall submit to Congress a report that describes the number of 
        additional positions and resources that the Commission 
        determines to be necessary to carry out this subsection 
        (including the specific duty of each additional employee).

SEC. 16. EXPEDITED PROCEDURES.

    (a) In General.--Subject to subsection (b), the Commodity Futures 
Trading Commission (referred to in this section as the ``Commission'') 
shall use emergency and expedited procedures (including any 
administrative or other procedure as appropriate) to carry out this Act 
(including the amendments made by this Act).
    (b) Report.--If the Commission decides not to use the procedures 
described in subsection (a) in a specific instance, not later than 30 
days after the date of the decision, the Commission shall submit to 
Congress a detailed report that describes in each instance the reasons 
for not using the procedures.
                                                       Calendar No. 882

110th CONGRESS

  2d Session

                                S. 3268

_______________________________________________________________________

                                 A BILL

    To amend the Commodity Exchange Act to prevent excessive price 
speculation with respect to energy commodities, and for other purposes.

_______________________________________________________________________

                             July 16, 2008

            Read the second time and placed on the Calendar
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