II 

110TH CONGRESS 

2D SESSION S. 3577 

To amend the Commodity Exchange Act to prevent excessive price speculation 

with respect to energy and agricultural commodities, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 25 (legislative day, SEPTEMBER 17), 2008 

Mr. LEVIN (for himself, Mr. BINGAMAN, and Mr. HARKIN) 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 prevent excessive 

price speculation with respect to energy and agricultural 

commodities, 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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Prevent Excessive Speculation Act’’. 

6 (b) TABLE OF CONTENTS.—The table of contents of 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Definition of energy and agricultural commodity. 

Sec. 3. Speculative limits and transparency of off-shore trading. 


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Sec. 4. Authority of Commodity Futures Trading Commission with respect to 

certain traders. 

Sec. 5. Working group of international regulators. 

Sec. 6. Position limits for energy and agricultural commodities. 

Sec. 7. Over-the-counter transactions. 

Sec. 8. Index traders and swap dealers. 

Sec. 9. Disaggregation of index funds and other data in energy and agricultural 

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. 

1 SEC. 2. DEFINITIONS OF ENERGY AND AGRICULTURAL 

2 COMMODITY. 

3 (a) DEFINITION OF ENERGY COMMODITY.—Section 

4 1a of the Commodity Exchange Act (7 U.S.C. 1a) is 

5 amended— 

6 (1) by redesignating paragraphs (13) through 

7 (34) as paragraphs (14) through (35), respectively; 

8 and 

9 (2) by inserting after paragraph (12) the fol10 lowing: 

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

12 commodity’ means— 

13 ‘‘(A) crude oil; 

14 ‘‘(B) natural gas; 

15 ‘‘(C) coal; 

16 ‘‘(D) gasoline, heating oil, diesel fuel, and any 

17 other source of energy derived from coal, crude oil, 

18 or natural gas; 


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1 ‘‘(E) electricity; 

2 ‘‘(F) ethanol and any other fuel derived from a 

3 renewable biomass; 

4 ‘‘(G) any commodity that results from the man5 agement of air emissions, including but not limited 

6 to greenhouse gases, sulfur dioxide, and nitrogen ox7 ides; and 

8 ‘‘(H) any other substance that is used as a 

9 source of energy, as the Commission, in its discre10 tion, deems appropriate.’’. 

11 (b) DEFINITION OF AGRICULTURAL COMMODITY.— 

12 Section 1a of the Commodity Exchange Act (7 U.S.C. 1a) 

13 is amended— 

14 (1) by redesignating paragraphs (1) through 

15 (35) as paragraphs (2) through (36), respectively; 

16 and 

17 (2) by inserting a new paragraph (1) as follows: 

18 ‘‘(1) AGRICULTURAL COMMODITY.—The term 

19 ‘agricultural commodity’ means any commodity spe20 cifically described in paragraph (5).’’. 

21 (c) CONFORMING AMENDMENTS.— 

22 (1) Section 2(c)(2)(B)(i)(II)(cc) of the Com23 modity Exchange Act (7 U.S.C. 

24 2(c)(2)(B)(i)(II)(cc)) is amended— 


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1 (A) in subitem (AA), by striking ‘‘section 

2 1a(20)’’ and inserting ‘‘section 1a(21)’’; and 

3 (B) in subitem (BB), by striking ‘‘section 

4 1a(20)’’ and inserting ‘‘section 1a(21)’’. 

5 (2) Section 13106(b)(1) of the Food, Conserva6 tion, and Energy Act of 2008 is amended by striking 

7 ‘‘section 1a(32)’’ and inserting ‘‘section 1a’’. 

8 (3) Section 402 of the Legal Certainty for 

9 Bank Products Act of 2000 (7 U.S.C. 27) is amend10 ed— 

11 (A) in subsection (a)(7), by striking ‘‘sec12 tion 1a(20)’’ and inserting ‘‘section 1a’’; and 

13 (B) in subsection (d)— 

14 (i) in paragraph (1)(B), by striking 

15 ‘‘section 1a(33)’’ and inserting ‘‘section 

16 1a’’; and 

17 (ii) in paragraph (2)(D), by striking 

18 ‘‘section 1a(13)’’ and inserting ‘‘section 

19 1a’’. 

20 SEC. 3. SPECULATIVE LIMITS AND TRANSPARENCY OF OFF21 SHORE TRADING. 

22 Section 4 of the Commodity Exchange Act (7 U.S.C. 

23 6) is amended by adding at the end the following: 

24 ‘‘(e) FOREIGN BOARDS OF TRADE.— 


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1 ‘‘(1) IN GENERAL.—The Commission may not 

2 permit a foreign board of trade to provide to the 

3 members of the foreign board of trade or other par4 ticipants located in the United States, or otherwise 

5 subject to the jurisdiction of the Commission, direct 

6 access to the electronic trading and order matching 

7 system of the foreign board of trade with respect to 

8 an agreement, contract, or transaction in an energy 

9 commodity that settles against any price (including 

10 the daily or final settlement price) of one or more 

11 contracts listed for trading on a registered entity, 

12 unless— 

13 ‘‘(A) the foreign board of trade— 

14 ‘‘(i) makes public daily trading infor15 mation regarding the agreement, contract, 

16 or transaction that is comparable to the 

17 daily trading information published by the 

18 registered entity for the one or more con19 tracts against which the agreement, con20 tract or transaction traded on the foreign 

21 board of trade settles; and 

22 ‘‘(ii) promptly notifies the Commission 

23 of any change regarding— 


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1 ‘‘(I) the information that the for2 eign board of trade will make publicly 

3 available; 

4 ‘‘(II) the position limits and posi5 tion accountability provisions that the 

6 foreign board of trade will adopt and 

7 enforce; 

8 ‘‘(III) the position reductions re9 quired to prevent manipulation; and 

10 ‘‘(IV) any other area of interest 

11 expressed by the Commission to the 

12 foreign board of trade; and 

13 ‘‘(B) the foreign board of trade (or the for14 eign futures authority that oversees the foreign 

15 board of trade)— 

16 ‘‘(i) adopts position limits or position 

17 accountability provisions for the agree18 ment, contract, or transaction that are 

19 comparable to the position limits or posi20 tion accountability provisions adopted by 

21 the registered entity for the one or more 

22 contracts against which the agreement, 

23 contract or transaction traded on foreign 

24 board of trade settles; 


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1 ‘‘(ii) has the authority to require or 

2 direct market participants to limit, reduce, 

3 or liquidate any position the foreign board 

4 of trade (or the foreign futures authority 

5 that oversees the foreign board of trade) 

6 determines to be necessary to prevent or 

7 reduce the threat of price manipulation, 

8 excessive speculation, price distortion, or 

9 disruption of delivery or the cash settle10 ment process; and 

11 ‘‘(iii) provides information to the 

12 Commission that is comparable to the in13 formation that the Commission determines 

14 to be necessary to publish the commit15 ments of traders report of the Commission 

16 for the one or more contracts against 

17 which the agreement, contract or trans18 action traded on the foreign board of trade 

19 settles. 

20 ‘‘(2) EXISTING FOREIGN BOARDS OF TRADE.— 

21 Paragraph (1) shall not be effective with respect to 

22 any agreement, contract, or transaction in an energy 

23 commodity executed on a foreign board of trade to 

24 which the Commission had granted direct access 

25 permission prior to the date of enactment of this 


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1 subsection until the date that is 180 days after the 

2 date of enactment of this subsection. 

3 ‘‘(3) EXISTING CONTRACTS.—No contract of 

4 sale of a commodity for future delivery traded or ex5 ecuted on or through the facilities of a board of 

6 trade, exchange or market located outside the 

7 United States for purposes of subsection (a) shall be 

8 void, voidable or unenforceable and no party to such 

9 contract shall be entitled to rescind or recover any 

10 payments made with respect to such contract based 

11 upon the failure of the foreign board of trade to 

12 comply with any provision of this Act.’’. 

13 SEC. 4. AUTHORITY OF COMMODITY FUTURES TRADING 

14 COMMISSION WITH RESPECT TO CERTAIN 

15 TRADERS. 

16 (a) IN GENERAL.— 

17 (1) RESTRICTION OF FUTURES TRADING TO

18 CONTRACT MARKETS OR DERIVATIVES TRANSACTION

19 EXECUTION FACILITIES.—Section 4(b) of the Com20 modity Exchange Act (7 U.S.C. 6(b)) is amended by 

21 inserting after the first sentence the following: ‘‘The 

22 Commission may adopt rules and regulations requir23 ing the maintenance of books and records by any 

24 person that is located within the United States (in25 cluding the territories and possessions of the United 


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1 States) or that enters trades directly into the trade 

2 matching system of a foreign board of trade from 

3 the United States (including the territories and pos4 sessions of the United States).’’ 

5 (2) COMMISSION AUTHORITY OVER TRADERS.— 

6 Section 4 of the Commodity Exchange Act (7 U.S.C. 

7 6) is amended by adding at the end the following: 

8 ‘‘(e) The Commission shall have authority under this 

9 Act to require or direct a person located in the United 

10 States, or otherwise subject to the jurisdiction of the Com11 mission, to limit, reduce, or liquidate any position on a 

12 foreign board of trade to prevent or reduce the threat of 

13 price manipulation, excessive speculation, price distortion, 

14 or disruption of delivery or the cash settlement process 

15 with respect to any contract listed for trading on a reg16 istered entity. 

17 ‘‘(f) CONSULTATION.—Before taking any action 

18 under subsection (e), the Commission shall consult with 

19 the appropriate— 

20 ‘‘(1) foreign board of trade; and 

21 ‘‘(2) foreign futures authority.’’. 

22 (3) VIOLATIONS.—Section 9(a) of the Com23 modity Exchange Act (7 U.S.C. 13(a)) is amended 

24 by inserting ‘‘(including any person trading on a forVerDate Aug 31 2005 03:46 Oct 09, 2008 Jkt 079200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S3577.IS S3577

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1 eign board of trade)’’ after ‘‘Any person’’ each place 

2 it appears. 

3 (4) EFFECT.—No amendment made by this 

4 subsection limits any of the otherwise applicable au5 thorities of the Commodity Futures Trading Com6 mission. 

7 SEC. 5. WORKING GROUP OF INTERNATIONAL REGU8 LATORS. 

9 Section 4a of the Commodity Exchange Act (7 U.S.C. 

10 6a) (as amended by section 4(a)(2)(B)) is amended by 

11 adding at the end the following: 

12 ‘‘(g) WORKING GROUP OF INTERNATIONAL REGU13 LATORS.—Not later than 90 days after the date of enact14 ment of this subsection, the Commission shall invite regu15 lators of foreign boards of trade to participate in a work16 ing group of international regulators to develop uniform 

17 international reporting and regulatory standards to ensure 

18 the protection of the energy and agricultural futures mar19 kets from excessive speculation, manipulation, and other 

20 trading practices that may pose systemic risks to energy 

21 and agricultural futures markets, countries, and con22 sumers.’’. 


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1 SEC. 6. POSITION LIMITS FOR ENERGY AND AGRICUL2 TURAL COMMODITIES. 

3 Section 4a of the Commodity Exchange Act (7 U.S.C. 

4 6a) is amended— 

5 (1) in subsection (a)— 

6 (A) by inserting ‘‘(1)’’ after ‘‘(a)’’; and 

7 (B) by adding after and below the end the 

8 following: 

9 ‘‘(2) In accordance with the standards set forth 

10 in paragraph (1) of this subsection and consistent 

11 with the good faith exception cited in subsection 

12 (b)(2), with respect to energy and agricultural com13 modities, the Commission, within 90 days after the 

14 date of the enactment of this paragraph, shall issue 

15 a proposed rule, and within 180 days after issuance 

16 of such proposed rule shall adopt a final rule, after 

17 notice and an opportunity for public comment, to es18 tablish limits on the amount of positions that may 

19 be held by any person with respect to contracts of 

20 sale for future delivery or with respect to options on 

21 such contracts or commodities traded on or subject 

22 to the rules of a contract market or derivatives 

23 transaction execution facility, or on an electronic 

24 trading facility with respect to a significant price 

25 discovery contract. 


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1 ‘‘(3) In establishing the limits required in para2 graph (2), the Commission shall set limits— 

3 ‘‘(A) on the number of positions that may 

4 be held by any person for the spot month, each 

5 other month, and the aggregate number of posi6 tions that may be held by any person for all 

7 months; 

8 ‘‘(B) to the maximum extent practicable, 

9 in its discretion— 

10 ‘‘(i) to diminish, eliminate, or prevent 

11 excessive speculation; 

12 ‘‘(ii) to deter and prevent market ma13 nipulation, squeezes, and corners; 

14 ‘‘(iii) to ensure sufficient market li15 quidity; and 

16 ‘‘(iv) to ensure that the price dis17 covery function of the underlying cash 

18 market is not distorted or disrupted. 

19 ‘‘(4) In addition to the position limits for en20 ergy and agricultural commodities that the Commis21 sion establishes under paragraph (2), the Commis22 sion may require or permit a contract market, de23 rivatives transaction execution facility, or electronic 

24 trading facility with respect to a significant price 

25 discovery contract, to establish and enforce position 


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1 accountability, as the Commission determines may 

2 be necessary and appropriate to accomplish the ob3 jectives set forth in paragraph (3)(B), provided that 

4 the number of positions that may be authorized 

5 under position accountability may not exceed the po6 sition limits established under paragraph (2). 

7 ‘‘(5) Nothing in this section shall require the 

8 Commission to revise any position limit for an agri9 cultural commodity that is in effect on the date of 

10 enactment of this Act.’’. 

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

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

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

14 ‘‘(j) OVER-THE-COUNTER TRANSACTIONS.— 

15 ‘‘(1) DEFINITIONS.—In this subsection: 

16 ‘‘(A) COVERED PERSON.—The term ‘cov17 ered person’ means a person that enters into an 

18 over-the-counter transaction that is required to 

19 be reported under paragraph (3)(C). 

20 ‘‘(B) OVER-THE-COUNTER TRANS21 ACTION.—The term ‘over-the-counter trans22 action’ means a contract, agreement, or trans23 action in an energy or agricultural commodity 

24 that is— 


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1 ‘‘(i) entered into only between persons 

2 that are eligible contract participants at 

3 the time the persons enter into the agree4 ment, contract, or transaction; 

5 ‘‘(ii) not entered into on a trading fa6 cility; and 

7 ‘‘(iii) not a sale of any cash com8 modity for delivery. 

9 ‘‘(2) AUTHORITY IN MAJOR MARKET DISTURB10 ANCES.— 

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

12 market disturbance, as determined by the Com13 mission, the Commission may require any trad14 er subject to the reporting requirements de15 scribed in paragraph (3) to take such action as 

16 the Commission considers to be necessary to 

17 maintain or restore orderly trading in any con18 tract listed for trading on a registered entity, 

19 including— 

20 ‘‘(i) the liquidation of any futures con21 tract; and 

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

23 apply to a market position involving any 

24 over-the-counter transaction acquired in 


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1 good faith before the date of the deter2 mination of the Commission. 

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

4 term ‘major market disturbance’ means any 

5 disturbance in a commodity market that dis6 rupts the liquidity and price discovery function 

7 of that market from accurately reflecting the 

8 forces of supply and demand for a commodity, 

9 including— 

10 ‘‘(i) a threatened or actual market 

11 manipulation or corner; 

12 ‘‘(ii) excessive speculation; and 

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

14 or a foreign government that affects a 

15 commodity. 

16 ‘‘(C) The term ‘market disturbance’ shall 

17 be interpreted in a manner consistent with sec18 tion 8a(9). 

19 ‘‘(D) JUDICIAL REVIEW.—Any action 

20 taken by the Commission under subparagraph 

21 (A) shall be subject to judicial review carried 

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

23 ‘‘(3) REPORTING; RECORDKEEPING.— 


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

2 require each covered person to submit to the 

3 Commission a report— 

4 ‘‘(i) at such time and in such manner 

5 as the Commission determines to be appro6 priate; and 

7 ‘‘(ii) containing the information re8 quired under subparagraph (B) to assist 

9 the Commission in detecting and pre10 venting potential price manipulation of, or 

11 excessive speculation in, any contract listed 

12 for trading on a registered entity. 

13 ‘‘(B) CONTENTS OF REPORT.—A report re14 quired under subparagraph (A) shall contain— 

15 ‘‘(i) information describing large trad16 ing positions of the covered person ob17 tained through one or more over-the18 counter transactions that involve— 

19 ‘‘(I) substantial quantities of a 

20 commodity in the cash market; or 

21 ‘‘(II) substantial positions, in22 vestments, or trades in agreements or 

23 contracts relating to the commodity; 

24 and 


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1 ‘‘(ii) any other information relating to 

2 over-the-counter transactions required to 

3 be reported under subparagraph (C) car4 ried out by the covered person that the 

5 Commission determines to be necessary to 

6 accomplish the purposes described in sub7 paragraph (A). 

8 ‘‘(C) OVER-THE-COUNTER TRANSACTIONS

9 TO BE REPORTED.— 

10 ‘‘(i) IN GENERAL.—The Commission 

11 shall identify each large over-the-counter 

12 transaction or class of large over-the13 counter transactions the reporting of which 

14 the Commission determines to be appro15 priate to assist the Commission in detect16 ing and preventing potential price manipu17 lation of, or excessive speculation in, any 

18 contract listed for trading on a registered 

19 entity. 

20 ‘‘(ii) MANDATORY FACTORS FOR DE21 TERMINATIONS.— 

22 ‘‘(I) IN GENERAL.—In carrying 

23 out a determination under clause (i), 

24 the Commission shall consider the exVerDate Aug 31 2005 03:46 Oct 09, 2008 Jkt 079200 PO 00000 Frm 00017 Fmt 6652 Sfmt 6201 E:\BILLS\S3577.IS S3577

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1 tent to which each factor described in 

2 subclause (II) applies. 

3 ‘‘(II) FACTORS.—The factors re4 quired for carrying out a determina5 tion under clause (i) include wheth6 er— 

7 ‘‘(aa) a standardized agree8 ment is used to execute the over9 the-counter transaction; 

10 ‘‘(bb) the over-the-counter 

11 transaction settles against any 

12 price (including the daily or final 

13 settlement price) of one or more 

14 contracts listed for trading on a 

15 registered entity; 

16 ‘‘(cc) the price of the over17 the-counter transaction is re18 ported to a third party, pub19 lished, or otherwise disseminated; 

20 ‘‘(dd) the price of the over21 the-counter transaction is ref22 erenced in any other transaction; 

23 ‘‘(ee) there is a significant 

24 volume of the over-the-counter 


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1 transaction or class of over-the2 counter transactions; and 

3 ‘‘(ff) there is any other fac4 tor that the Commission deter5 mines to be appropriate. 

6 ‘‘(iii) PERIODIC REVIEW.—The Com7 mission shall periodically conduct a review, 

8 but not less than once every 2 years, to de9 termine whether to initiate a rulemaking to 

10 include any additional transactions or 

11 classes of transactions or to exclude any 

12 transactions or classes of transactions from 

13 the reporting requirements of this para14 graph. 

15 ‘‘(D) ALTERNATE REPORTING.—The Com16 mission may permit any report required to be 

17 reported under paragraph (A) by— 

18 ‘‘(i) a member of a derivatives clear19 ing organization; or 

20 ‘‘(ii) only one of the persons entering 

21 into the transaction, provided that each 

22 person entering into the transaction or 

23 transactions has notified the Commission, 

24 in the manner specified by the Commis25 sion, that one of the persons to the transVerDate Aug 31 2005 03:46 Oct 09, 2008 Jkt 079200 PO 00000 Frm 00019 Fmt 6652 Sfmt 6201 E:\BILLS\S3577.IS S3577

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1 action or transactions has assumed, on be2 half of the other person to the transaction, 

3 the legal obligations for such other person 

4 to submit reports under this section, in5 cluding liabilities for failure to file such re6 ports in accordance with the Commission’s 

7 regulations. Any notification provided 

8 under this paragraph shall be effective in 

9 imposing such legal obligations and liabil10 ities upon such person. 

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

12 by rule, shall require each covered person— 

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

14 maintain such records as directed by the 

15 Commission for a period of 5 years, or 

16 longer, if directed by the Commission; and 

17 ‘‘(ii) to provide such records upon re18 quest to the Commission or the Depart19 ment of Justice. 

20 ‘‘(4) POSITION LIMITS FOR OVER-THE-COUNTER

21 TRANSACTIONS.—Upon review of the information re22 ported to the Commission under paragraph (3), or 

23 following a major market disturbance as determined 

24 by the Commission under paragraph (2), the Com25 mission may establish, after due notice and opporVerDate Aug 31 2005 03:46 Oct 09, 2008 Jkt 079200 PO 00000 Frm 00020 Fmt 6652 Sfmt 6201 E:\BILLS\S3577.IS S3577

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1 tunity for hearing, by rule, regulation, or order, such 

2 limits on the amount of trading in over-the-counter 

3 transactions as the Commission determines are nec4 essary and appropriate to accomplish one or more of 

5 the following objectives with respect to any contract 

6 listed for trading on a registered entity— 

7 ‘‘(A) diminish, eliminate, or prevent exces8 sive speculation; 

9 ‘‘(B) deter and prevent market manipula10 tion, squeezes, and corners; 

11 ‘‘(C) ensure sufficient market liquidity; 

12 and 

13 ‘‘(D) ensure that the price discovery func14 tion of the underlying cash market is not dis15 torted or disrupted. 

16 ‘‘(5) PROTECTION OF PROPRIETARY INFORMA17 TION.—In carrying out this subsection, the Commis18 sion may not— 

19 ‘‘(A) require the publication of any propri20 etary information; 

21 ‘‘(B) prohibit the commercial sale or li22 censing of any proprietary information; and 

23 ‘‘(C) except as provided in section 8, pub24 licly disclose any information relating to any 

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1 cret, or name of any customer of a covered per2 son. 

3 ‘‘(6) APPLICABILITY.—Notwithstanding sub4 sections (g) and (h), and any exemption issued by 

5 the Commission for any energy or agricultural com6 modity, each over-the-counter transaction shall be 

7 subject to this subsection. 

8 ‘‘(7) SAVINGS CLAUSE.—Nothing in this sub9 section modifies or alters— 

10 ‘‘(A) the guidance of the Commission; or 

11 ‘‘(B) any applicable requirements with re12 spect the disclosure of proprietary information. 

13 ‘‘(8) BONA FIDE HEDGING TRANSACTION RE14 VIEW.— 

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

16 review and revise the definition of bona fide 

17 hedging transaction in subsection (c) of Section 

18 4a of the Commodity Exchange Act (7 U.S.C 

19 2(h)(2)(A)) as the Commission determines is 

20 necessary and appropriate to ensure that the 

21 commodity markets effectively perform their 

22 risk management and price discovery func23 tions.’’. 


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1 SEC. 8. INDEX TRADERS AND SWAP DEALERS. 

2 Section 4 of the Commodity Exchange Act (7 U.S.C. 

3 6) (as amended by section 3) is amended by adding at 

4 the end the following: 

5 ‘‘(f) INDEX TRADERS AND SWAP DEALERS.—Not 

6 later than 60 days after the date of enactment of this sub7 section, the Commission shall— 

8 ‘‘(1) routinely require detailed reporting from 

9 index traders and swap dealers in markets under the 

10 jurisdiction of the Commission; 

11 ‘‘(2) reclassify the types of traders for regu12 latory and reporting purposes to distinguish between 

13 index traders and swaps dealers; and 

14 ‘‘(3) review the trading practices for index trad15 ers in markets under the jurisdiction of the Commis16 sion— 

17 ‘‘(A) to ensure that index trading is not 

18 adversely impacting the price discovery process; 

19 and 

20 ‘‘(B) to determine whether different prac21 tices or regulations should be implemented.’’. 


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1 SEC. 9. DISAGGREGATION OF INDEX FUNDS AND OTHER 

2 DATA IN ENERGY AND AGRICULTURAL MAR3 KETS. 

4 Section 4 of the Commodity Exchange Act (7 U.S.C. 

5 6) (as amended by section 8) is amended by adding at 

6 the end the following: 

7 ‘‘(g) DISAGGREGATION OF INDEX FUNDS AND

8 OTHER DATA IN ENERGY AND AGRICULTURAL MAR9 KETS.—The Commission shall disaggregate and make 

10 public monthly— 

11 ‘‘(1) the number of positions and total value of 

12 index funds and other passive, long-only positions in 

13 energy and agricultural markets; and 

14 ‘‘(2) data on speculative positions relative to 

15 bona fide physical hedgers in those markets.’’. 

16 SEC. 10. ADDITIONAL COMMODITY FUTURES TRADING 

17 COMMISSION EMPLOYEES FOR IMPROVED 

18 ENFORCEMENT. 

19 Section 2(a)(7) of the Commodity Exchange Act (7 

20 U.S.C. 2(a)(7)) is amended by adding at the end the fol21 lowing: 

22 ‘‘(D) ADDITIONAL EMPLOYEES.—As soon 

23 as practicable after the date of enactment of 

24 this subparagraph, the Commission shall ap25 point at least 100 full-time employees (in addi26 tion to the employees employed by the CommisVerDate Aug 31 2005 03:46 Oct 09, 2008 Jkt 079200 PO 00000 Frm 00024 Fmt 6652 Sfmt 6201 E:\BILLS\S3577.IS S3577

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1 sion as of the date of enactment of this sub2 paragraph)— 

3 ‘‘(i) to increase the public trans4 parency of operations in energy futures 

5 markets; 

6 ‘‘(ii) to improve the enforcement of 

7 this Act in those markets; and 

8 ‘‘(iii) to carry out such other duties as 

9 are prescribed by the Commission.’’. 

10 SEC. 11. WORKING GROUP ON ENERGY MARKETS. 

11 (a) ESTABLISHMENT.—There is established a Work12 ing Group on Energy Markets. 

13 (b) COMPOSITION.—The Working Group shall be 

14 composed of— 

15 (1) the Secretary of Energy (referred to in this 

16 section as the ‘‘Secretary’’); 

17 (2) the Secretary of the Treasury; 

18 (3) the Chairman of the Federal Energy Regu19 latory Commission; 

20 (4) the Chairman of Federal Trade Commis21 sion; 

22 (5) the Chairman of the Securities and Ex23 change Commission; 

24 (6) the Chairman of the Commodity Futures 

25 Trading Commission; and 


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1 (7) the Administrator of the Energy Informa2 tion Administration. 

3 (c) CHAIRPERSON.— 

4 (1) INITIAL CHAIRPERSON.—The Secretary 

5 shall serve as the Chairperson of the Working Group 

6 for the 1-year period beginning on the date of enact7 ment of this Act. 

8 (2) ROTATION OF CHAIRPERSONS.—For each 1- 

9 year period following the period described in para10 graph (1), each individual described in subsection 

11 (b) shall serve as the Chairperson of the Working 

12 Group in the order corresponding to which the indi13 vidual is described in that subsection. 

14 (d) PURPOSE AND FUNCTION.—The Working Group 

15 shall— 

16 (1) investigate the effect of speculation in en17 ergy commodities on energy prices and the energy 

18 security of the United States; 

19 (2) recommend to the President and Congress 

20 laws (including regulations) that may be needed to 

21 prevent excessive speculation in energy commodities 

22 to prevent or minimize the adverse impact of high 

23 energy prices on consumers and the economy of the 

24 United States; and 


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1 (3) review energy security considerations posed 

2 by developments in international energy markets. 

3 (e) ADMINISTRATION.—The Secretary shall provide 

4 the Working Group with such administrative and support 

5 services as may be necessary for the performance of the 

6 functions of the Working Group. 

7 (f) COOPERATION OF OTHER AGENCIES.—The heads 

8 of Executive departments, agencies, and independent in9 strumentalities shall, to the extent permitted by law, pro10 vide the Working Group with such information as the 

11 Working Group requires to carry out this section. 

12 (g) CONSULTATION.—The Working Group shall con13 sult, as appropriate, with representatives of the various 

14 exchanges, clearinghouses, self-regulatory bodies, other 

15 major market participants, consumers, and the general 

16 public. 

17 SEC. 12. STUDY OF REGULATORY FRAMEWORK FOR EN18 ERGY MARKETS. 

19 (a) STUDY.—The Working Group established under 

20 section 11(a) shall conduct a study to— 

21 (1) identify the factors that affect the pricing of 

22 crude oil and refined petroleum products, including 

23 an examination of the effects of market speculation 

24 on prices; and 


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1 (2) review and assess the roles, missions, and 

2 structures of relevant Federal agencies, examine 

3 interagency coordination, and identify and assess the 

4 gaps that need to be filled for the Federal Govern5 ment to effectively oversee and regulate markets 

6 critical to the energy security of the United States. 

7 (b) ELEMENTS OF STUDY.—The study shall in8 clude— 

9 (1) an examination of price formation with re10 spect to crude oil and refined petroleum products; 

11 (2) an examination of relevant international 

12 regulatory regimes; and 

13 (3) an examination of the degree to which 

14 changes in energy market transparency, liquidity, 

15 and structure have influenced or driven abuse, ma16 nipulation, excessive speculation, or inefficient price 

17 formation. 

18 (c) REPORT AND RECOMMENDATIONS.—Not later 

19 than 1 year after the date of enactment of this Act, the 

20 Secretary of Energy shall submit to the appropriate com21 mittees of Congress a report that— 

22 (1) describes the results of the study; and 

23 (2) provides options and the recommendations 

24 of the Working Group for appropriate Federal co25 ordination of oversight and regulatory actions to enVerDate Aug 31 2005 03:46 Oct 09, 2008 Jkt 079200 PO 00000 Frm 00028 Fmt 6652 Sfmt 6201 E:\BILLS\S3577.IS S3577

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1 sure transparency of crude oil and refined petroleum 

2 product pricing and the elimination of excessive 

3 speculation. 

4 (d) AUTHORIZATION OF APPROPRIATIONS.—There 

5 are authorized to be appropriated such sums as are nec6 essary to carry out this section. 

7 SEC. 13. COLLECTION AND ANALYSIS OF INFORMATION ON 

8 ENERGY COMMODITIES. 

9 (a) ACCURATE AND COMPLETE INFORMATION ON

10 ENERGY PRODUCING COMPANIES.—Section 205(h)(1) of 

11 the Department of Energy Organization Act (42 U.S.C. 

12 7135(h)(1)) is amended by adding at the end the fol13 lowing: 

14 ‘‘(C) INFORMATION ON ENERGY-PRO15 DUCING COMPANIES.—Notwithstanding any 

16 other provision of law, the head of each Federal 

17 department or agency shall provide to the Ad18 ministrator, on the request of the Adminis19 trator, such information as the Administrator 

20 may require to identify each energy-producing 

21 company.’’. 

22 (b) ENHANCED DATA ON OWNERSHIP OF CRITICAL

23 ENERGY COMMODITIES.—Section 205 of the Department 

24 of Energy Organization Act (42 U.S.C. 7135) is amended 

25 by adding at the end the following: 


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1 ‘‘(n) COLLECTION OF INFORMATION ON OWNERSHIP

2 OF ENERGY COMMODITIES.— 

3 ‘‘(1) IN GENERAL.—To ensure transparency of 

4 information with respect to critical energy infra5 structure and product ownership in the United 

6 States, the Administrator shall collect on a weekly 

7 basis information identifying the ownership of all 

8 commercially held oil and natural gas inventories in 

9 the United States. 

10 ‘‘(2) COMPANY-SPECIFIC DATA.—The informa11 tion shall include company-specific data, including— 

12 ‘‘(A) volumes of product under ownership; 

13 and 

14 ‘‘(B) storage and transportation capacity 

15 (including owned and leased capacity). 

16 ‘‘(3) PROTECTION OF PROPRIETARY INFORMA17 TION.—Section 11(d) of the Energy Supply and En18 vironmental Coordination Act of 1974 (15 U.S.C. 

19 796(d)) shall apply to information collected under 

20 this section. 

21 ‘‘(o) MONTHLY REPORTING ON ENERGY COMMODITY

22 TRANSACTIONS.— 

23 ‘‘(1) IN GENERAL.—In accordance with para24 graph (2), to improve the ability to evaluate the en25 ergy security of the United States, any person holdVerDate Aug 31 2005 03:46 Oct 09, 2008 Jkt 079200 PO 00000 Frm 00030 Fmt 6652 Sfmt 6201 E:\BILLS\S3577.IS S3577

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1 ing or controlling energy futures contracts or energy 

2 commodity swaps (as defined in section 202 of the 

3 Energy Policy and Conservation Act) at a level to be 

4 determined by the Secretary for which the under5 lying energy commodity is physically delivered within 

6 the United States shall report on a monthly basis, 

7 with respect to the energy commodities and the by8 products of the energy commodities— 

9 ‘‘(A) the quantity of physical stocks owned; 

10 ‘‘(B) the quantity of fixed price purchase 

11 commitments open; 

12 ‘‘(C) the quantity of fixed price sales com13 mitments open; 

14 ‘‘(D) the physical storage capacity owned 

15 or leased; and 

16 ‘‘(E) such other information as the Sec17 retary determines is necessary to provide ade18 quate transparency with respect to entities that 

19 control critical energy assets in the United 

20 States. 

21 ‘‘(2) USE OF DATA.—Any data collected under 

22 paragraph (1) shall not be made public in a manner 

23 that is inconsistent with this Act. 

24 ‘‘(p) FINANCIAL MARKET ANALYSIS OFFICE.— 


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1 ‘‘(1) ESTABLISHMENT.—There shall be within 

2 the Energy Information Administration a Financial 

3 Market Analysis Office, headed by a director, who 

4 shall report directly to the Administrator of the En5 ergy Information Administration. 

6 ‘‘(2) DUTIES.—The Office shall be responsible 

7 for analysis of the financial aspects of energy mar8 kets. 

9 ‘‘(3) ANALYSES.—The Administrator of the En10 ergy Information Administration shall take analyses 

11 by the Office into account in conducting analyses 

12 and forecasting of energy prices.’’. 

13 (c) CONFORMING AMENDMENT.—Section 645 of the 

14 Department of Energy Organization Act (42 U.S.C. 7255) 

15 is amended by inserting ‘‘(15 U.S.C. 3301 et seq.) and 

16 the Natural Gas Act (15 U.S.C. 717 et seq.)’’ after ‘‘Nat17 ural Gas Policy Act of 1978’’. 

18 SEC. 14. NATIONAL NATURAL GAS MARKET INVESTIGA19 TION. 

20 (a) IN GENERAL.—Not later than 30 days after the 

21 date of enactment of this Act, in order to ensure the integ22 rity of natural gas markets, the Federal Energy Regu23 latory Commission (referred to in this section as the 

24 ‘‘Commission’’) shall commence an investigation into the 


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1 role of financial institutions in natural gas markets, in2 cluding— 

3 (1) trends in investment in natural gas storage, 

4 transportation capacity, and pipeline infrastructure; 

5 (2) factors contributing to potential effects on 

6 wholesale natural gas prices, including the mecha7 nisms covered by physical natural gas supply con8 tracts; 

9 (3) the character and number of positions held 

10 in related financial markets; and 

11 (4) any international considerations the Com12 mission considers relevant. 

13 (b) ASSESSMENT.—The Commission may include in 

14 the investigation an assessment of real-time market dy15 namics during the 2008 winter heating season. 

16 (c) REQUIRED DATA.—Each Federal department and 

17 agency shall comply with any request from the Commis18 sion for records, papers, and information in the possession 

19 of the department or agency relating to any agreement, 

20 contract, or transaction for the sale of an energy com21 modity for future delivery in interstate or foreign com22 merce, or any energy commodity swap. 

23 (d) REPORTS.—Not later than 270 days after the 

24 date of enactment of this Act, the Commission shall sub25 mit to the Committee on Energy and Natural Resources 


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1 of the Senate and the Committee on Energy and Com2 merce of the House of Representatives a report on the 

3 findings, conclusions, and recommendations of the inves4 tigation conducted under this section. 

5 (e) ADDITIONAL INVESTIGATIONS.—On an annual 

6 basis and during any other period the Commission deter7 mines necessary, the Commission shall— 

8 (1) conduct an investigation that is similar to 

9 the investigation required under subsections (a) 

10 through (c); and 

11 (2) submit to the Committee on Energy and 

12 Natural Resources of the Senate and the Committee 

13 on Energy and Commerce of the House of Rep14 resentatives a report on the findings, conclusions, 

15 and recommendations of the investigation. 

16 (f) AUTHORIZATION OF APPROPRIATIONS.—There 

17 are authorized to be appropriated such sums as are nec18 essary to carry out this section. 

19 SEC. 15. STUDIES; REPORTS. 

20 (a) STUDY RELATING TO INTERNATIONAL REGULA21 TION OF ENERGY COMMODITY MARKETS.— 

22 (1) IN GENERAL.—The Comptroller General of 

23 the United States shall conduct a study of the inter24 national regime for regulating the trading of energy 

25 commodity futures and derivatives. 


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1 (2) ANALYSIS.—The study shall include an 

2 analysis of, at a minimum— 

3 (A) key common features and differences 

4 among countries in the regulation of energy 

5 commodity trading, including with respect to 

6 market oversight and enforcement standards 

7 and activities; 

8 (B) variations among countries with re9 spect to the use of position limits, account10 ability limits, or other thresholds to detect and 

11 prevent price manipulation, excessive specula12 tion, or other unfair trading practices; 

13 (C) variations in practices regarding the 

14 differentiation of commercial and noncommer15 cial trading; 

16 (D) agreements and practices for sharing 

17 market and trading data among regulatory bod18 ies and among individual regulators and the en19 tities that the bodies and regulators oversee; 

20 and 

21 (E) agreements and practices for facili22 tating international cooperation on market over23 sight, compliance, and enforcement. 

24 (3) REPORT.—Not later than 1 year after the 

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1 eral shall submit to the appropriate committees of 

2 Congress a report that— 

3 (A) describes the results of the study; 

4 (B) addresses the effects of excessive spec5 ulation and energy price volatility on energy fu6 tures; and 

7 (C) provides recommendations to improve 

8 openness, transparency, and other necessary 

9 elements of a properly functioning market in a 

10 manner that protects consumers in the United 

11 States. 

12 (b) STUDY RELATING TO EFFECTS OF NONCOMMER13 CIAL SPECULATORS ON ENERGY FUTURES MARKETS AND

14 ENERGY PRICES.— 

15 (1) STUDY.—The Comptroller General of the 

16 United States shall conduct a study of the effects of 

17 noncommercial speculators on energy futures mar18 kets and energy prices. 

19 (2) ANALYSIS.—The study shall include an 

20 analysis of, at a minimum— 

21 (A) the effect of increased amounts of cap22 ital in energy futures markets; 

23 (B) the impact of the roll-over of positions 

24 by index fund traders and swap dealers on en25 ergy futures markets and energy prices; and 


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1 (C) the extent to which each factor de2 scribed in subparagraphs (A) and (B) and non3 commercial speculators— 

4 (i) affect— 

5 (I) the pricing of energy com6 modities; and 

7 (II) risk management functions; 

8 and 

9 (ii) contribute to economically efficient 

10 price discovery. 

11 (3) REPORT.—Not later than 2 years after the 

12 date of enactment of this Act, the Comptroller Gen13 eral shall submit to the appropriate committees of 

14 Congress a report that describes the results of the 

15 study. 

16 (c) REPORTS OF COMMODITY FUTURES TRADING

17 COMMISSION.— 

18 (1) IN GENERAL.—The Commission shall sub19 mit to Congress— 

20 (A) not later than 60 days after the date 

21 of enactment of this Act, a report that describes 

22 in detail the actions the Commission has taken, 

23 is taking, and intends to take to carry out this 

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1 tive changes that are necessary to carry out this 

2 subsection); and 

3 (B) not later than 45 days after the date 

4 described in subparagraph (A) and every 45 

5 days thereafter until the date of implementation 

6 of this subsection, an update on the report re7 quired under subparagraph (A). 

8 (2) ADDITIONAL EMPLOYEES OR RESOURCES.— 

9 Not later than 60 days after the date of enactment 

10 of this Act, the Commission shall submit to Con11 gress a report that describes the number of addi12 tional positions and resources that the Commission 

13 determines to be necessary to carry out this sub14 section (including the specific duty of each addi15 tional employee). 

16 SEC. 16. EXPEDITED PROCEDURES. 

17 (a) IN GENERAL.—Except as specifically provided 

18 otherwise in this Act, the Commodity Futures Trading 

19 Commission (referred to in this section as the ‘‘Commis20 sion’’) shall issue any proposed rule required by this Act 

21 within 90 days of enactment of this Act and shall issue 

22 any final rule or order required by this Act within 180 

23 days of enactment. 

24 (b) REPORT.—If the Commission is unable to issue 

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1 fied in subsection (a), the Commission shall submit to 

2 Congress a detailed report that describes in each instance 

3 the reasons for its inability to act in a timely manner. 

Æ 


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