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[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4413 Engrossed in House (EH)]

113th CONGRESS
  2d Session
                                H. R. 4413

_______________________________________________________________________

                                 AN ACT

 
  To reauthorize the Commodity Futures Trading Commission, to better 
protect futures customers, to provide end users with market certainty, 
to make basic reforms to ensure transparency and accountability at the 
 Commission, to help farmers, ranchers, and end users manage risks to 
         help keep consumer costs low, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Customer Protection and End-User 
Relief Act''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents of this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
                     TITLE I--CUSTOMER PROTECTIONS

Sec. 101. Short title.
Sec. 102. Enhanced protections for futures customers.
Sec. 103. Electronic confirmation of customer funds.
Sec. 104. Notice and certifications providing additional customer 
                            protections.
Sec. 105. Futures commission merchant compliance.
Sec. 106. Certainty for futures customers and market participants.
Sec. 107. Study on high-frequency trading.
         TITLE II--COMMODITY FUTURES TRADING COMMISSION REFORMS

Sec. 201. Short title.
Sec. 202. Extension of operations.
Sec. 203. Consideration by the Commodity Futures Trading Commission of 
                            the costs and benefits of its regulations 
                            and orders.
Sec. 204. Division directors.
Sec. 205. Office of the Chief Economist.
Sec. 206. Procedures governing actions taken without a commission vote.
Sec. 207. Strategic technology plan.
Sec. 208. Internal risk controls.
Sec. 209. Subpoena duration and renewal.
Sec. 210. Implementation plan for Commission rulemakings.
Sec. 211. Applicability of notice and comment requirements of the 
                            Administrative Procedure Act to guidance 
                            voted on by the Commission.
Sec. 212. Judicial review of Commission rules.
Sec. 213. GAO study on adequacy of CFTC resources.
Sec. 214. Disclosure of required data of other registered entities.
Sec. 215. GAO study on Commission leases.
                       TITLE III--END-USER RELIEF

Sec. 301. Short title.
        Subtitle A--End-User Exemption From Margin Requirements

Sec. 311. End-user margin requirements.
Sec. 312. Implementation.
                   Subtitle B--Inter-Affiliate Swaps

Sec. 321. Treatment of affiliate transactions.
     Subtitle C--Indemnification Requirements Related to Swap Data 
                              Repositories

Sec. 331. Indemnification requirements.
               Subtitle D--Relief for Municipal Utilities

Sec. 341. Transactions with utility special entities.
Sec. 342. Utility special entity defined.
Sec. 343. Utility operations-related swap.
                 Subtitle E--End-User Regulatory Relief

Sec. 351. End-users not treated as financial entities.
Sec. 352. Reporting of illiquid swaps so as to not disadvantage certain 
                            non-financial end-users.
Sec. 353. Relief for grain elevator operators, farmers, agricultural 
                            counterparties, and commercial market 
                            participants.
Sec. 354. Relief for end-users who use physical contracts with 
                            volumetric optionality.
Sec. 355. Commission vote required before automatic change of swap 
                            dealer de minimis level.
Sec. 356. Capital requirements for non-bank swap dealers.
Sec. 357. Harmonization with the Jumpstart Our Business Startups Act.
Sec. 358. Bona fide hedge defined to protect end-user risk management 
                            needs.
Sec. 359. Cross-border regulation of derivatives transactions.
Sec. 360. Report on foreign boards of trade.
Sec. 361. Treatment of certain funds.
                       Subtitle F--Effective Date

Sec. 371. Effective date.

                     TITLE I--CUSTOMER PROTECTIONS

SEC. 101. SHORT TITLE.

    This title may be cited as the ``Futures Customer Protection Act''.

SEC. 102. ENHANCED PROTECTIONS FOR FUTURES CUSTOMERS.

    Section 17 of the Commodity Exchange Act (7 U.S.C. 21) is amended 
by adding at the end the following:
    ``(s) A registered futures association shall--
            ``(1) require each member of the association that is a 
        futures commission merchant to maintain written policies and 
        procedures regarding the maintenance of--
                    ``(A) the residual interest of the member, as 
                described in section 1.23 of title 17, Code of Federal 
                Regulations, in any customer segregated funds account 
                of the member, as identified in section 1.20 of such 
                title, and in any foreign futures and foreign options 
                customer secured amount funds account of the member, as 
                identified in section 30.7 of such title; and
                    ``(B) the residual interest of the member, as 
                described in section 22.2(e)(4) of such title, in any 
                cleared swaps customer collateral account of the 
                member, as identified in section 22.2 of such title; 
                and
            ``(2) establish rules to govern the withdrawal, transfer or 
        disbursement by any member of the association, that is a 
        futures commission merchant, of the member's residual interest 
        in customer segregated funds as provided in such section 1.20, 
        in foreign futures and foreign options customer secured amount 
        funds, identified as provided in such section 30.7, and from a 
        cleared swaps customer collateral, identified as provided in 
        such section 22.2.''.

SEC. 103. ELECTRONIC CONFIRMATION OF CUSTOMER FUNDS.

    Section 17 of the Commodity Exchange Act (7 U.S.C. 21), as amended 
by section 102 of this Act, is amended by adding at the end the 
following:
    ``(t) A registered futures association shall require any member of 
the association that is a futures commission merchant to--
            ``(1) use an electronic system or systems to report 
        financial and operational information to the association, 
        including information related to customer segregated funds, 
        foreign futures and foreign options customer secured amount 
        funds accounts, and cleared swaps customer collateral, in 
        accordance with such terms, conditions, documentation 
        standards, and regular time intervals as are established by the 
        association;
            ``(2) instruct each depository, including any bank, trust 
        company, derivatives clearing organization, or futures 
        commission merchant, holding customer segregated funds under 
        section 1.20 of title 17, Code of Federal Regulations, foreign 
        futures and foreign options customer secured amount funds under 
        section 30.7 of such title, or cleared swap customer funds 
        under section 22.2 of such title, to report balances in the 
        futures commission merchant's section 1.20 customer segregated 
        funds, section 30.7 foreign futures and foreign options 
        customer secured amount funds, and section 22.2 cleared swap 
        customer funds, to the registered futures association or 
        another party designated by the registered futures association, 
        in the form, manner, and interval prescribed by the registered 
        futures association; and
            ``(3) hold section 1.20 customer segregated funds, section 
        30.7 foreign futures and foreign options customer secured 
        amount funds and section 22.2 cleared swaps customer funds in a 
        depository that reports the balances in these accounts of the 
        futures commission merchant held at the depository to the 
        registered futures association or another party designated by 
        the registered futures association in the form, manner, and 
        interval prescribed by the registered futures association.''.

SEC. 104. NOTICE AND CERTIFICATIONS PROVIDING ADDITIONAL CUSTOMER 
              PROTECTIONS.

    Section 17 of the Commodity Exchange Act (7 U.S.C. 21), as amended 
by sections 102 and 103 of this Act, is amended by adding at the end 
the following:
    ``(u) A futures commission merchant that has adjusted net capital 
in an amount less than the amount required by regulations established 
by the Commission or a self-regulatory organization of which the 
futures commission merchant is a member shall immediately notify the 
Commission and the self-regulatory organization of this occurrence.
    ``(v) A futures commission merchant that does not hold a sufficient 
amount of funds in segregated accounts for futures customers under 
section 1.20 of title 17, Code of Federal Regulations, in foreign 
futures and foreign options secured amount accounts for foreign futures 
and foreign options secured amount customers under section 30.7 of such 
title, or in segregated accounts for cleared swap customers under 
section 22.2 of such title, as required by regulations established by 
the Commission or a self-regulatory organization of which the futures 
commission merchant is a member, shall immediately notify the 
Commission and the self-regulatory organization of this occurrence.
    ``(w) Within such time period established by the Commission after 
the end of each fiscal year, a futures commission merchant shall file 
with the Commission a report from the chief compliance officer of the 
futures commission merchant containing an assessment of the internal 
compliance programs of the futures commission merchant.''.

SEC. 105. FUTURES COMMISSION MERCHANT COMPLIANCE.

    (a) In General.--Section 4d(a) of the Commodity Exchange Act (7 
U.S.C. 6d(a)) is amended--
            (1) by redesignating paragraphs (1) and (2) as 
        subparagraphs (A) and (B);
            (2) by inserting ``(1)'' before ``It shall be unlawful''; 
        and
            (3) by adding at the end the following new paragraph:
    ``(2) Any rules or regulations requiring a futures commission 
merchant to maintain a residual interest in accounts held for the 
benefit of customers in amounts at least sufficient to exceed the sum 
of all uncollected margin deficits of such customers shall provide that 
a futures commission merchant shall meet its residual interest 
requirement as of the end of each business day calculated as of the 
close of business on the previous business day.''.
    (b) Conforming Amendment.--Section 4d(h) of the Commodity Exchange 
Act (7 U.S.C. 6d(h)) is amended by striking ``Notwithstanding 
subsection (a)(2)'' and inserting ``Notwithstanding subsection 
(a)(1)(B)''.

SEC. 106. CERTAINTY FOR FUTURES CUSTOMERS AND MARKET PARTICIPANTS.

    Section 20(a) of the Commodity Exchange Act (7 U.S.C. 24(a)) is 
amended--
            (1) by striking ``and'' at the end of paragraph (4);
            (2) by striking the period at the end of paragraph (5) and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(6) that cash, securities, or other property of the 
        estate of a commodity broker, including the trading or 
        operating accounts of the commodity broker and commodities held 
        in inventory by the commodity broker, shall be included in 
        customer property, subject to any otherwise unavoidable 
        security interest, or otherwise unavoidable contractual offset 
        or netting rights of creditors (including rights set forth in a 
        rule or bylaw of a derivatives clearing organization or a 
        clearing agency) in respect of such property, but only to the 
        extent that the property that is otherwise customer property is 
        insufficient to satisfy the net equity claims of public 
        customers (as such term may be defined by the Commission by 
        rule or regulation) of the commodity broker.''.

SEC. 107. STUDY ON HIGH-FREQUENCY TRADING.

    (a) In General.--Not later than one year after the date of the 
enactment of this Act, the Commodity Futures Trading Commission shall 
submit to the Committee on Agriculture of the House of Representatives 
and the Committee on Agriculture, Nutrition, and Forestry of the Senate 
a report examining the effect of the practice commonly referred to as 
high-frequency trading on markets under its jurisdiction.
    (b) Specific Areas Examined in Report.--In preparing the report 
submitted under subsection (a), the Commission shall particularly 
examine each of the following areas:
            (1) The technology, personnel, or other resources the 
        Commission may require for purposes of monitoring the effect of 
        high-frequency trading.
            (2) The role such trading plays in providing market 
        liquidity.
            (3) Whether the technology creates discrepancies in the 
        marketplace between market participants.
            (4) Whether the existing authority of the Commission with 
        respect to such trading is sufficient to meet the Commission's 
        mission to--
                    (A) protect market participants and the public from 
                fraud, manipulation, abusive practices, and systemic 
                risk related to derivatives; and
                    (B) foster transparent, open, competitive, and 
                financially sound markets.
            (5) Whether such trading increases market volatility, 
        including short term market swings.

         TITLE II--COMMODITY FUTURES TRADING COMMISSION REFORMS

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Commodity Futures Trading 
Commission Reform Act''.

SEC. 202. EXTENSION OF OPERATIONS.

    Section 12(d) of the Commodity Exchange Act (7 U.S.C. 16(d)) is 
amended by striking ``2013'' and inserting ``2018''.

SEC. 203. CONSIDERATION BY THE COMMODITY FUTURES TRADING COMMISSION OF 
              THE COSTS AND BENEFITS OF ITS REGULATIONS AND ORDERS.

    Section 15(a) of the Commodity Exchange Act (7 U.S.C. 19(a)) is 
amended--
            (1) by striking paragraphs (1) and (2) and inserting the 
        following:
            ``(1) In general.--Before promulgating a regulation under 
        this Act or issuing an order (except as provided in paragraph 
        (3)), the Commission, through the Office of the Chief 
        Economist, shall assess and publish in the regulation or order 
        the costs and benefits, both qualitative and quantitative, of 
        the proposed regulation or order, and the proposed regulation 
        or order shall state its statutory justification.
            ``(2) Considerations.--In making a reasoned determination 
        of the costs and the benefits, the Commission shall evaluate--
                    ``(A) considerations of protection of market 
                participants and the public;
                    ``(B) considerations of the efficiency, 
                competitiveness, and financial integrity of futures and 
                swaps markets;
                    ``(C) considerations of the impact on market 
                liquidity in the futures and swaps markets;
                    ``(D) considerations of price discovery;
                    ``(E) considerations of sound risk management 
                practices;
                    ``(F) available alternatives to direct regulation;
                    ``(G) the degree and nature of the risks posed by 
                various activities within the scope of its 
                jurisdiction;
                    ``(H) the costs of complying with the proposed 
                regulation or order by all regulated entities, 
                including a methodology for quantifying the costs 
                (recognizing that some costs are difficult to 
                quantify);
                    ``(I) whether the proposed regulation or order is 
                inconsistent, incompatible, or duplicative of other 
                Federal regulations or orders;
                    ``(J) whether, in choosing among alternative 
                regulatory approaches, those approaches maximize net 
                benefits (including potential economic and other 
                benefits, distributive impacts, and equity); and
                    ``(K) other public interest considerations.''; and
            (2) by adding at the end the following:
            ``(4) Judicial review.--Notwithstanding section 24(d), a 
        court shall affirm a Commission assessment of costs and 
        benefits under this subsection, unless the court finds the 
        assessment to be an abuse of discretion.''.

SEC. 204. DIVISION DIRECTORS.

    Section 2(a)(6)(C) of the Commodity Exchange Act (7 U.S.C. 
2(a)(6)(C)) is amended by inserting ``, and the heads of the units 
shall serve at the pleasure of the Commission, report directly to the 
Commission, and perform such functions and duties as the Commission may 
prescribe'' before the period.

SEC. 205. OFFICE OF THE CHIEF ECONOMIST.

    (a) In General.--Section 2(a) of the Commodity Exchange Act (7 
U.S.C. 2(a)) is amended by adding at the end the following:
            ``(17) Office of the chief economist.--
                    ``(A) Establishment.--There is established in the 
                Commission the Office of the Chief Economist.
                    ``(B) Head.--The Office of the Chief Economist 
                shall be headed by the Chief Economist, who shall be 
                appointed by the Commission and serve at the pleasure 
                of the Commission.
                    ``(C) Functions.--The Chief Economist shall report 
                directly to the Commission and perform such functions 
                and duties as the Commission may prescribe.
                    ``(D) Professional staff.--The Commission shall 
                appoint such other economists as may be necessary to 
                assist the Chief Economist in performing such economic 
                analysis, regulatory cost-benefit analysis, or research 
                as the Commission may direct.''.
    (b) Conforming Amendment.--Section 2(a)(6)(A) of such Act (7 U.S.C. 
2(a)(6)(A)) is amended by striking ``(4) and (5)'' and inserting ``(4), 
(5), and (17)''.

SEC. 206. PROCEDURES GOVERNING ACTIONS TAKEN WITHOUT A COMMISSION VOTE.

    Section 2(a)(12) of the Commodity Exchange Act (7 U.S.C. 2(a)(12)) 
is amended--
            (1) by striking ``(12) The'' and inserting the following:
            ``(12) Rules and regulations.--
                    ``(A) In general.--Subject to the other provisions 
                of this paragraph, the''; and
            (2) by adding after and below the end the following new 
        subparagraph:
                    ``(B) Notice to commission.--The Commission shall 
                develop and publish internal procedures governing the 
                issuance by any division or office of the Commission of 
                any response to a formal, written request or petition 
                from any member of the public for an exemptive, a no-
                action, or an interpretive letter and such procedures 
                shall provide that the Commission be provided with the 
                final version of the matter to be issued with 
                sufficient notice to thoroughly review the matter prior 
                to its issuance.''.

SEC. 207. STRATEGIC TECHNOLOGY PLAN.

    Section 2(a) of the Commodity Exchange Act (7 U.S.C. 2(a)), as 
amended by section 204(a) of this Act, is amended by adding at the end 
the following:
            ``(18) Strategic technology plan.--
                    ``(A) In general.--Every 5 years, the Commission 
                shall develop and submit to the Committee on 
                Agriculture of the House of Representatives and the 
                Committee on Agriculture, Nutrition, and Forestry of 
                the Senate a detailed plan focused on the acquisition 
                and use of technology by the Commission.
                    ``(B) Contents.--The plan shall--
                            ``(i) include for each related division or 
                        office a detailed technology strategy focused 
                        on market surveillance and risk detection, 
                        market data collection, aggregation, 
                        interpretation, standardization, harmonization, 
                        normalization, validation, streamlining or 
                        other data analytic processes, and internal 
                        management and protection of data collected by 
                        the Commission, including a detailed accounting 
                        of how the funds provided for technology will 
                        be used and the priorities that will apply in 
                        the use of the funds; and
                            ``(ii) set forth annual goals to be 
                        accomplished and annual budgets needed to 
                        accomplish the goals.''.

SEC. 208. INTERNAL RISK CONTROLS.

    (a) In General.--Section 2(a)(12) of the Commodity Exchange Act (7 
U.S.C. 2(a)(12)), as amended by section 206 of this Act, is amended by 
adding at the end the following:
                    ``(C) Internal risk controls.--The Commission, in 
                consultation with the Chief Economist, shall develop 
                comprehensive internal risk control mechanisms to 
                safeguard and govern the storage of all market data by 
                the Commission, all market data sharing agreements of 
                the Commission, and all academic research performed at 
                the Commission using market data.''.
    (b) Reports to the Congress.--
            (1) Content.--The Commission shall submit to the Committee 
        on Agriculture of the House of Representatives and the 
        Committee on Agriculture, Nutrition, and Forestry of the Senate 
        2 reports on the progress made in implementing the internal 
        risk controls provided for in section 2(a)(12)(C) of the 
        Commodity Exchange Act.
            (2) Timing.--The Commission shall submit the 1st report 
        required by paragraph (1) within 60 days after the date of the 
        enactment of this Act, and the 2nd such report within 120 days 
        after such date of enactment.

SEC. 209. SUBPOENA DURATION AND RENEWAL.

    Section 6(c)(5) of the Commodity Exchange Act (7 U.S.C. 9(5)) is 
amended--
            (1) by striking ``(5) Subpoena.--For'' and inserting the 
        following:
            ``(5) Subpoena.--
                    ``(A) In general.--For''; and
            (2) by adding after and below the end the following:
                    ``(B) Content of order.--An order of the Commission 
                authorizing the issuance of a subpoena in an 
                investigation shall state in good faith--
                            ``(i) the legitimate purpose of the 
                        investigation; and
                            ``(ii) the information sought by any 
                        subpoena order that will be reasonably relevant 
                        to that purpose.
                    ``(C) Duration and renewal.--An order issued under 
                this paragraph shall not be for an indefinite duration 
                and may be renewed only by Commission action.''.

SEC. 210. IMPLEMENTATION PLAN FOR COMMISSION RULEMAKINGS.

    Section 2(a)(12) of the Commodity Exchange Act (7 U.S.C. 2(a)(12)), 
as amended by sections 206 and 208(a) of this Act, is amended by adding 
at the end the following:
                    ``(D) Requirement to publish implementation plan 
                for commission rules.--The Commission shall direct its 
                staff to develop and publish in any proposed rule a 
                plan for--
                            ``(i) when and for how long the proposed 
                        rule will be subject to public comment; and
                            ``(ii) by when compliance with the final 
                        rule will be required.''.

SEC. 211. APPLICABILITY OF NOTICE AND COMMENT REQUIREMENTS OF THE 
              ADMINISTRATIVE PROCEDURE ACT TO GUIDANCE VOTED ON BY THE 
              COMMISSION.

    Section 2(a)(12) of the Commodity Exchange Act (7 U.S.C. 2(a)(12)), 
as amended by sections 206, 208(a), and 210 of this Act, is amended by 
adding at the end the following:
                    ``(E) Applicability of notice and comment rules to 
                guidance voted on by the commission.--The notice and 
                comment requirements of chapter 5 of title 5, United 
                States Code, shall also apply with respect to any 
                guidance issued by the Commission.''.

SEC. 212. JUDICIAL REVIEW OF COMMISSION RULES.

    The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by 
adding at the end the following:

``SEC. 24. JUDICIAL REVIEW OF COMMISSION RULES.

    ``(a) A person adversely affected by a rule of the Commission 
promulgated under this Act may obtain review of the rule in the United 
States Court of Appeals for the District of Columbia Circuit or the 
United States Court of Appeals for the circuit where the party resides 
or has the principal place of business, by filing in the court, within 
60 days after publication in the Federal Register of the entry of the 
rule, a written petition requesting that the rule be set aside.
    ``(b) A copy of the petition shall be transmitted forthwith by the 
clerk of the court to an officer designated by the Commission for that 
purpose. Thereupon the Commission shall file in the court the record on 
which the rule complained of is entered, as provided in section 2112 of 
title 28, United States Code, and the Federal Rules of Appellate 
Procedure.
    ``(c) On the filing of the petition, the court has jurisdiction, 
which becomes exclusive on the filing of the record, to affirm and 
enforce or to set aside the rule.
    ``(d) The court shall affirm and enforce the rule unless the 
Commission's action in promulgating the rule is found to be arbitrary, 
capricious, an abuse of discretion, or otherwise not in accordance with 
law; contrary to constitutional right, power, privilege, or immunity; 
in excess of statutory jurisdiction, authority, or limitations, or 
short of statutory right; or without observance of procedure required 
by law.''.

SEC. 213. GAO STUDY ON ADEQUACY OF CFTC RESOURCES.

    (a) Study.--The Comptroller General of the United States shall 
conduct a study of the resources of the Commodity Futures Trading 
Commission that--
            (1) assesses whether the resources of the Commission are 
        sufficient to enable the Commission to effectively carry out 
        the duties of the Commission; and
            (2) examines the prior expenditures of the Commission on 
        hardware, software, and analytical processes designed to 
        protect customers in the areas of--
                    (A) market surveillance and risk detection; and
                    (B) market data collection, aggregation, 
                interpretation, standardization, harmonization, 
                normalization, validation, and streamlining or other 
                data analytic processes.
    (b) Report.--Not later than 180 days after the date of the 
enactment of this Act, the Comptroller General of the United States 
shall submit to the Committee on Agriculture of the House of 
Representatives and the Committee on Agriculture, Nutrition, and 
Forestry of the Senate a report that contains the results of the study.

SEC. 214. DISCLOSURE OF REQUIRED DATA OF OTHER REGISTERED ENTITIES.

    Section 8 of the Commodity Exchange Act (7 U.S.C. 12) is amended by 
adding at the end the following:
    ``(j) Disclosure of Required Data of Other Registered Entities.--
            ``(1) Except as provided in this subsection, the Commission 
        may not be compelled to disclose any proprietary information 
        provided to the Commission, except that nothing in this 
        subsection--
                    ``(A) authorizes the Commission to withhold 
                information from Congress, upon an agreement of 
                confidentiality; or
                    ``(B) prevents the Commission from--
                            ``(i) complying with a request for 
                        information from any other Federal department 
                        or agency, any State or political subdivision 
                        thereof, or any foreign government or any 
                        department, agency, or political subdivision 
                        thereof requesting the report or information 
                        for purposes within the scope of its 
                        jurisdiction, upon an agreement of 
                        confidentiality to protect the information in a 
                        manner consistent with this paragraph and 
                        subsection (e); or
                            ``(ii) a disclosure made pursuant to a 
                        court order in connection with an 
                        administrative or judicial proceeding brought 
                        under this Act, in any receivership proceeding 
                        involving a receiver appointed in a judicial 
                        proceeding brought under this Act, or in any 
                        bankruptcy proceeding in which the Commission 
                        has intervened or in which the Commission has 
                        the right to appear and be heard under title 11 
                        of the United States Code.
            ``(2) Any proprietary information of a commodity trading 
        advisor or commodity pool operator ascertained by the 
        Commission in connection with Form CPO-PQR, Form CTA-PR, and 
        any successor forms thereto, shall be subject to the same 
        limitations on public disclosure, as any facts ascertained 
        during an investigation, as provided by subsection (a); 
        provided, however, that the Commission shall not be precluded 
        from publishing aggregate information compiled from such forms, 
        to the extent such aggregate information does not identify any 
        individual person or firm, or such person's proprietary 
        information.
            ``(3) For purposes of section 552 of title 5, United States 
        Code, this subsection, and the information contemplated herein, 
        shall be considered a statute described in subsection (b)(3)(B) 
        of such section 552.
            ``(4) For purposes of the definition of proprietary 
        information in paragraph (5), the records and reports of any 
        client account or commodity pool to which a commodity trading 
        advisor or commodity pool operator registered under this title 
        provides services that are filed with the Commission on Form 
        CPO-PQR, CTA-PR, and any successor forms thereto, shall be 
        deemed to be the records and reports of the commodity trading 
        advisor or commodity pool operator, respectively.
            ``(5) For purposes of this section, proprietary information 
        of a commodity trading advisor or commodity pool operator 
        includes sensitive, non-public information regarding--
                    ``(A) the commodity trading advisor, commodity pool 
                operator or the trading strategies of the commodity 
                trading advisor or commodity pool operator;
                    ``(B) analytical or research methodologies of a 
                commodity trading advisor or commodity pool operator;
                    ``(C) trading data of a commodity trading advisor 
                or commodity pool operator; and
                    ``(D) computer hardware or software containing 
                intellectual property of a commodity trading advisor or 
                commodity pool operator;''.

SEC. 215. GAO STUDY ON COMMISSION LEASES.

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

                       TITLE III--END-USER RELIEF

SEC. 301. SHORT TITLE.

    This title may be cited as the ``End-User Relief and Market 
Certainty Act''.

        Subtitle A--End-User Exemption From Margin Requirements

SEC. 311. END-USER MARGIN REQUIREMENTS.

    (a) Commodity Exchange Act Amendment.--Section 4s(e) of the 
Commodity Exchange Act (7 U.S.C. 6s(e)) is amended by adding at the end 
the following new paragraph:
            ``(4) Applicability with respect to counterparties.--The 
        requirements of paragraphs (2)(A)(ii) and (2)(B)(ii), including 
        the initial and variation margin requirements imposed by rules 
        adopted pursuant to paragraphs (2)(A)(ii) and (2)(B)(ii), shall 
        not apply to a swap in which a counterparty qualifies for an 
        exception under section 2(h)(7)(A), or an exemption issued 
        under section 4(c)(1) from the requirements of section 
        2(h)(1)(A) for cooperative entities as defined in such 
        exemption, or satisfies the criteria in section 2(h)(7)(D).''.
    (b) Securities Exchange Act of 1934 Amendment.--Section 15F(e) of 
the Securities Exchange Act of 1934 (15 U.S.C. 78o-10(e)) is amended by 
adding at the end the following new paragraph:
            ``(4) Applicability with respect to counterparties.--The 
        requirements of paragraphs (2)(A)(ii) and (2)(B)(ii) shall not 
        apply to a security-based swap in which a counterparty 
        qualifies for an exception under section 3C(g)(1) or satisfies 
        the criteria in section 3C(g)(4).''.

SEC. 312. IMPLEMENTATION.

    The amendment made to the Commodity Exchange Act by this subtitle 
shall be implemented--
            (1) without regard to--
                    (A) chapter 35 of title 44, United States Code; and
                    (B) the notice and comment provisions of section 
                553 of title 5, United States Code;
            (2) through the promulgation of an interim final rule, 
        pursuant to which public comment will be sought before a final 
        rule is issued; and
            (3) such that paragraph (1) shall apply solely to changes 
        to rules and regulations, or proposed rules and regulations, 
        that are limited to and directly a consequence of the 
        amendment.

                   Subtitle B--Inter-Affiliate Swaps

SEC. 321. TREATMENT OF AFFILIATE TRANSACTIONS.

    (a) In General.--
            (1) Commodity exchange act amendment.--Section 
        2(h)(7)(D)(i) of the Commodity Exchange Act (7 U.S.C. 
        2(h)(7)(D)(i)) is amended to read as follows:
                            ``(i) In general.--An affiliate of a person 
                        that qualifies for an exception under 
                        subparagraph (A) (including affiliate entities 
                        predominantly engaged in providing financing 
                        for the purchase of the merchandise or 
                        manufactured goods of the person) may qualify 
                        for the exception only if the affiliate enters 
                        into the swap to hedge or mitigate the 
                        commercial risk of the person or other 
                        affiliate of the person that is not a financial 
                        entity, provided that if the transfer of 
                        commercial risk is addressed by entering into a 
                        swap with a swap dealer or major swap 
                        participant, an appropriate credit support 
                        measure or other mechanism is utilized.''.
            (2) Securities exchange act of 1934 amendment.--Section 
        3C(g)(4)(A) of the Securities Exchange Act of 1934 (15 U.S.C. 
        78c-3(g)(4)(A)) is amended to read as follows:
                    ``(A) In general.--An affiliate of a person that 
                qualifies for an exception under paragraph (1) 
                (including affiliate entities predominantly engaged in 
                providing financing for the purchase of the merchandise 
                or manufactured goods of the person) may qualify for 
                the exception only if the affiliate enters into the 
                security-based swap to hedge or mitigate the commercial 
                risk of the person or other affiliate of the person 
                that is not a financial entity, provided that if the 
                transfer of commercial risk is addressed by entering 
                into a security-based swap with a security-based swap 
                dealer or major security-based swap participant, an 
                appropriate credit support measure or other mechanism 
                is utilized.''.
    (b) Applicability of Credit Support Measure Requirement.--
Notwithstanding section 371 of this Act, the requirements in section 
2(h)(7)(D)(i) of the Commodity Exchange Act and section 3C(g)(4)(A) of 
the Securities Exchange Act of 1934, as amended by subsection (a), 
requiring that a credit support measure or other mechanism be utilized 
if the transfer of commercial risk referred to in such sections is 
addressed by entering into a swap with a swap dealer or major swap 
participant or a security-based swap with a security-based swap dealer 
or major security-based swap participant, as appropriate, shall not 
apply with respect to swaps or security-based swaps, as appropriate, 
entered into before the date of the enactment of this Act.

     Subtitle C--Indemnification Requirements Related to Swap Data 
                              Repositories

SEC. 331. INDEMNIFICATION REQUIREMENTS.

    (a) Derivatives Clearing Organizations.--Section 5b(k)(5) of the 
Commodity Exchange Act (7 U.S.C. 7a-1(k)(5)) is amended to read as 
follows:
            ``(5) Confidentiality agreement.--Before the Commission may 
        share information with any entity described in paragraph (4), 
        the Commission shall receive a written agreement from each 
        entity stating that the entity shall abide by the 
        confidentiality requirements described in section 8 relating to 
        the information on swap transactions that is provided.''.
    (b) Swap Data Repositories.--Section 21(d) of such Act (7 U.S.C. 
24a(d)) is amended to read as follows:
    ``(d) Confidentiality Agreement.--Before the swap data repository 
may share information with any entity described in subsection (c)(7), 
the swap data repository shall receive a written agreement from each 
entity stating that the entity shall abide by the confidentiality 
requirements described in section 8 relating to the information on swap 
transactions that is provided.''.
    (c) Security-Based Swap Data Repositories.--Section 13(n)(5)(H) of 
the Securities Exchange Act of 1934 (15 U.S.C. 78m(n)(5)(H)) is amended 
to read as follows:
                    ``(H) Confidentiality agreement.--Before the 
                security-based swap data repository may share 
                information with any entity described in subparagraph 
                (G), the security-based swap data repository shall 
                receive a written agreement from each entity stating 
                that the entity shall abide by the confidentiality 
                requirements described in section 24 relating to the 
                information on security-based swap transactions that is 
                provided.''.

               Subtitle D--Relief for Municipal Utilities

SEC. 341. TRANSACTIONS WITH UTILITY SPECIAL ENTITIES.

    Section 1a(49) of the Commodity Exchange Act (7 U.S.C. 1a(49)) is 
amended by adding at the end the following:
                    ``(E) Certain transactions with a utility special 
                entity.--
                            ``(i) Transactions in utility operations-
                        related swaps shall be reported pursuant to 
                        section 4r.
                            ``(ii) In making a determination to exempt 
                        pursuant to subparagraph (D), the Commission 
                        shall treat a utility operations-related swap 
                        entered into with a utility special entity, as 
                        defined in section 4s(h)(2)(D), as if it were 
                        entered into with an entity that is not a 
                        special entity, as defined in section 
                        4s(h)(2)(C).''.

SEC. 342. UTILITY SPECIAL ENTITY DEFINED.

    Section 4s(h)(2) of the Commodity Exchange Act (7 U.S.C. 6s(h)(2)) 
is amended by adding at the end the following:
                    ``(D) Utility special entity.--For purposes of this 
                Act, the term `utility special entity' means a special 
                entity, or any instrumentality, department, or 
                corporation of or established by a State or political 
                subdivision of a State, that--
                            ``(i) owns or operates an electric or 
                        natural gas facility or an electric or natural 
                        gas operation;
                            ``(ii) supplies natural gas and or electric 
                        energy to another utility special entity;
                            ``(iii) has public service obligations 
                        under Federal, State, or local law or 
                        regulation to deliver electric energy or 
                        natural gas service to customers; or
                            ``(iv) is a Federal power marketing agency, 
                        as defined in section 3 of the Federal Power 
                        Act.''.

SEC. 343. UTILITY OPERATIONS-RELATED SWAP.

    (a) Swap Further Defined.--Section 1a(47)(A)(iii) of the Commodity 
Exchange Act (7 U.S.C. 1a(47)(A)(iii)) is amended--
            (1) by striking ``and'' at the end of subclause (XXI);
            (2) by adding ``and'' at the end of subclause (XXII); and
            (3) by adding at the end the following:
                                    ``(XXIII) a utility operations-
                                related swap;''.
    (b) Utility Operations-Related Swap Defined.--Section 1a of such 
Act (7 U.S.C. 1a) is amended by adding at the end the following:
            ``(52) Utility operations-related swap.--The term `utility 
        operations-related swap' means a swap that--
                    ``(A) is entered into to hedge or mitigate a 
                commercial risk;
                    ``(B) is not a contract, agreement, or transaction 
                based on, derived on, or referencing--
                            ``(i) an interest rate, credit, equity, or 
                        currency asset class; or
                            ``(ii) a metal, agricultural commodity, or 
                        crude oil or gasoline commodity of any grade, 
                        except as used as fuel for electric energy 
                        generation; and
                    ``(C) is associated with--
                            ``(i) the generation, production, purchase, 
                        or sale of natural gas or electric energy, the 
                        supply of natural gas or electric energy to a 
                        utility, or the delivery of natural gas or 
                        electric energy service to utility customers;
                            ``(ii) all fuel supply for the facilities 
                        or operations of a utility;
                            ``(iii) compliance with an electric system 
                        reliability obligation;
                            ``(iv) compliance with an energy, energy 
                        efficiency, conservation, or renewable energy 
                        or environmental statute, regulation, or 
                        government order applicable to a utility; or
                            ``(v) any other electric energy or natural 
                        gas swap to which a utility is a party.''.

                 Subtitle E--End-User Regulatory Relief

SEC. 351. END-USERS NOT TREATED AS FINANCIAL ENTITIES.

    (a) In General.--Section 2(h)(7)(C)(iii) of the Commodity Exchange 
Act (7 U.S.C. 2(h)(7)(C)(iii)) is amended to read as follows:
                            ``(iii) Limitation.--Such definition shall 
                        not include an entity--
                                    ``(I) whose primary business is 
                                providing financing, and who uses 
                                derivatives for the purpose of hedging 
                                underlying commercial risks related to 
                                interest rate and foreign currency 
                                exposures, 90 percent or more of which 
                                arise from financing that facilitates 
                                the purchase or lease of products, 90 
                                percent or more of which are 
                                manufactured by the parent company or 
                                another subsidiary of the parent 
                                company; or
                                    ``(II) who is not supervised by a 
                                prudential regulator, and is not 
                                described in any of subclauses (I) 
                                through (VII) of clause (i), and--
                                            ``(aa) is a commercial 
                                        market participant and is 
                                        considered a financial entity 
                                        under clause (i)(VIII) because 
                                        the entity predominantly 
                                        engages in physical delivery 
                                        contracts; or
                                            ``(bb) enters into swaps, 
                                        contracts for future delivery, 
                                        and other derivatives on behalf 
                                        of, or to hedge or mitigate the 
                                        commercial risk of, whether 
                                        directly or in the aggregate, 
                                        affiliates that are not so 
                                        supervised or described.''.
    (b) Commercial Market Participant Defined.--
            (1) In general.--Section 1a of such Act (7 U.S.C. 1a), as 
        amended by section 343(b) of this Act, is amended by 
        redesignating paragraphs (8) through (52) as paragraphs (9) 
        through (53), respectively, and by inserting after paragraph 
        (6) the following:
            ``(7) Commercial market participant.--The term `commercial 
        market participant' means any producer, processor, merchant, or 
        commercial user of an exempt or agricultural commodity, or the 
        products or byproducts of such a commodity.''.
            (2) Conforming amendments.--
                    (A) Section 1a of such Act (7 U.S.C. 1a) is 
                amended--
                            (i) in subparagraph (A) of paragraph (18) 
                        (as so redesignated by paragraph (1) of this 
                        subsection), in the matter preceding clause 
                        (i), by striking ``(18)(A)'' and inserting 
                        ``(19)(A)''; and
                            (ii) in subparagraph (A)(vii) of paragraph 
                        (19) (as so redesignated by paragraph (1) of 
                        this subsection), in the matter following 
                        subclause (III), by striking ``(17)(A)'' and 
                        inserting ``(18)(A)''.
                    (B) Section 4(c)(1)(A)(i)(I) of such Act (7 U.S.C. 
                6(c)(1)(A)(i)(I)) is amended by striking ``(7), 
                paragraph (18)(A)(vii)(III), paragraphs (23), (24), 
                (31), (32), (38), (39), (41), (42), (46), (47), (48), 
                and (49)'' and inserting ``(8), paragraph 
                (19)(A)(vii)(III), paragraphs (24), (25), (32), (33), 
                (39), (40), (42), (43), (47), (48), (49), and (50)''.
                    (C) Section 4q(a)(1) of such Act (7 U.S.C. 6o-
                1(a)(1)) is amended by striking ``1a(9)'' and inserting 
                ``1a(10)''.
                    (D) Section 4s(f)(1)(D) of such Act (7 U.S.C. 
                6s(f)(1)(D)) is amended by striking ``1a(47)(A)(v)'' 
                and inserting ``1a(48)(A)(v)''.
                    (E) Section 4s(h)(5)(A)(i) of such Act (7 U.S.C. 
                6s(h)(5)(A)(i)) is amended by striking ``1a(18)'' and 
                inserting ``1a(19)''.
                    (F) Section 4t(b)(1)(C) of such Act (7 U.S.C. 
                6t(b)(1)(C)) is amended by striking ``1a(47)(A)(v)'' 
                and inserting ``1a(48)(A)(v)''.
                    (G) Section 5(d)(23) of such Act (7 U.S.C. 
                7(d)(23)) is amended by striking ``1a(47)(A)(v)'' and 
                inserting ``1a(48)(A)(v)''.
                    (H) Section 5(e)(1) of such Act (7 U.S.C. 7(e)(1)) 
                is amended by striking ``1a(9)'' and inserting 
                ``1a(10)''.
                    (I) Section 5b(k)(3)(A) of such Act (7 U.S.C. 7a-
                1(k)(3)(A)) is amended by striking ``1a(47)(A)(v)'' and 
                inserting ``1a(48)(A)(v)''.
                    (J) Section 5c(c)(4)(B) of such Act (7 U.S.C. 7a-
                2(c)(4)(B)) is amended by striking ``1a(10)'' and 
                inserting ``1a(11)''.
                    (K) Section 5h(f)(10)(A)(iii) of such Act (7 U.S.C. 
                7b-3(f)(10)(A)(iii)) is amended by striking 
                ``1a(47)(A)(v)'' and inserting ``1a(48)(A)(v)''.
                    (L) Section 21(f)(4)(C) of such Act (7 U.S.C. 
                24a(f)(4)(C)) is amended by striking ``1a(48)'' and 
                inserting ``1a(49)''.

SEC. 352. REPORTING OF ILLIQUID SWAPS SO AS TO NOT DISADVANTAGE CERTAIN 
              NON-FINANCIAL END-USERS.

    Section 2(a)(13) of the Commodity Exchange Act (7 U.S.C. 2(a)(13)) 
is amended--
            (1) in subparagraph (C), by striking ``The Commission'' and 
        inserting ``Except as provided in subparagraph (D), the 
        Commission''; and
            (2) by redesignating subparagraphs (D) through (G) as 
        subparagraphs (E) through (H), respectively, and inserting 
        after subparagraph (C) the following:
                    ``(D) Requirements for swap transactions in 
                illiquid markets.--Notwithstanding subparagraph (C):
                            ``(i) The Commission shall provide by rule 
                        for the public reporting of swap transactions, 
                        including price and volume data, in illiquid 
                        markets that are not cleared and entered into 
                        by a non-financial entity that is hedging or 
                        mitigating commercial risk in accordance with 
                        subsection (h)(7)(A).
                            ``(ii) The Commission shall ensure that the 
                        swap transaction information referred to in 
                        clause (i) of this subparagraph is available to 
                        the public no sooner than 30 days after the 
                        swap transaction has been executed or at such 
                        later date as the Commission determines 
                        appropriate to protect the identity of 
                        participants and positions in illiquid markets 
                        and to prevent the elimination or reduction of 
                        market liquidity.
                            ``(iii) In this subparagraph, the term 
                        `illiquid markets' means any market in which 
                        the volume and frequency of trading in swaps is 
                        at such a level as to allow identification of 
                        individual market participants.''.

SEC. 353. RELIEF FOR GRAIN ELEVATOR OPERATORS, FARMERS, AGRICULTURAL 
              COUNTERPARTIES, AND COMMERCIAL MARKET PARTICIPANTS.

    The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by 
inserting after section 4t the following:

``SEC. 4U. RECORDKEEPING REQUIREMENTS APPLICABLE TO NON-REGISTERED 
              MEMBERS OF CERTAIN REGISTERED ENTITIES.

    ``Except as provided in section 4(a)(3), a member of a designated 
contract market or a swap execution facility that is not registered 
with the Commission and not required to be registered with the 
Commission in any capacity shall satisfy the recordkeeping requirements 
of this Act and any recordkeeping rule, order, or regulation under this 
Act by maintaining a written record of each transaction in a contract 
for future delivery, option on a future, swap, swaption, trade option, 
or related cash or forward transaction. The written record shall be 
sufficient if it includes the final agreement between the parties and 
the material economic terms of the transaction and is identifiable and 
searchable by transaction.''.

SEC. 354. RELIEF FOR END-USERS WHO USE PHYSICAL CONTRACTS WITH 
              VOLUMETRIC OPTIONALITY.

    Section 1a(47)(B)(ii) of the Commodity Exchange Act (7 U.S.C. 
1a(47)(B)(ii)) is amended to read as follows:
                            ``(ii) any purchase or sale of a 
                        nonfinancial commodity or security for deferred 
                        shipment or delivery, so long as the 
                        transaction is intended to be physically 
                        settled, including any stand-alone or embedded 
                        option--
                                    ``(I) for which exercise results in 
                                a physical delivery obligation;
                                    ``(II) that cannot be severed or 
                                marketed separately from the overall 
                                transaction for the purpose of 
                                financial settlement; and
                                    ``(III) for which both parties are 
                                commercial market participants;''.

SEC. 355. COMMISSION VOTE REQUIRED BEFORE AUTOMATIC CHANGE OF SWAP 
              DEALER DE MINIMIS LEVEL.

    Section 1a(49)(D) of the Commodity Exchange Act (7 U.S.C. 
1a(49)(D)) is amended--
            (1) by striking all that precedes ``shall exempt'' and 
        inserting the following:
                    ``(D) De minimis exception.--
                            ``(i) In general.--The Commission''; and
            (2) by adding after and below the end the following new 
        clause:
                            ``(ii) Special rule.--The de minimis 
                        quantity of swap dealing as described in clause 
                        (i) that is currently set at a quantity of 
                        $8,000,000,000 shall only be amended or reduced 
                        through a new affirmative action of the 
                        Commission undertaken by rule or regulation.''.

SEC. 356. CAPITAL REQUIREMENTS FOR NON-BANK SWAP DEALERS.

    (a) Commodity Exchange Act.--Section 4s(e) of the Commodity 
Exchange Act (7 U.S.C. 6s(e)) is amended--
            (1) in paragraph (2)(B), by striking ``shall'' and 
        inserting the following: ``and the Securities and Exchange 
        Commission, in consultation with the prudential regulators, 
        shall jointly''; and
            (2) in paragraph (3)(D)--
                    (A) in clause (ii), by striking ``shall, to the 
                maximum extent practicable,'' and inserting ``shall''; 
                and
                    (B) by adding at the end the following:
                            ``(iii) Financial models.--To the extent 
                        that swap dealers and major swap participants 
                        that are banks are permitted to use financial 
                        models approved by the prudential regulators or 
                        the Securities and Exchange Commission to 
                        calculate minimum capital requirements and 
                        minimum initial and variation margin 
                        requirements, including the use of non-cash 
                        collateral, the Commission shall, in 
                        consultation with the prudential regulators and 
                        the Securities and Exchange Commission, permit 
                        the use of comparable financial models by swap 
                        dealers and major swap participants that are 
                        not banks.''.
    (b) Securities Exchange Act of 1934.--Section 15F(e) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78o-10(e)) is amended--
            (1) in paragraph (2)(B), by striking ``shall'' and 
        inserting the following: ``and the Commodity Futures Trading 
        Commission, in consultation with the prudential regulators, 
        shall jointly''; and
            (2) in paragraph (3)(D)--
                    (A) in clause (ii), by striking ``shall, to the 
                maximum extent practicable,'' and inserting ``shall''; 
                and
                    (B) by adding at the end the following:
                            ``(iii) Financial models.--To the extent 
                        that security-based swap dealers and major 
                        security-based swap participants that are banks 
                        are permitted to use financial models approved 
                        by the prudential regulators or the Commodity 
                        Futures Trading Commission to calculate minimum 
                        capital requirements and minimum initial and 
                        variation margin requirements, including the 
                        use of non-cash collateral, the Commission 
                        shall, in consultation with the Commodity 
                        Futures Trading Commission, permit the use of 
                        comparable financial models by security-based 
                        swap dealers and major security-based swap 
                        participants that are not banks.''.

SEC. 357. HARMONIZATION WITH THE JUMPSTART OUR BUSINESS STARTUPS ACT.

    Within 90 days after the date of the enactment of this Act, the 
Commodity Futures Trading Commission shall--
            (1) revise section 4.7(b) of title 17, Code of Federal 
        Regulations, in the matter preceding paragraph (1), to read as 
        follows:
    ``(b) Relief available to commodity pool operators. Upon filing the 
notice required by paragraph (d) of this section, and subject to 
compliance with the conditions specified in paragraph (d) of this 
section, any registered commodity pool operator who sells 
participations in a pool solely to qualified eligible persons in an 
offering which qualifies for exemption from the registration 
requirements of the Securities Act pursuant to section 4(2) of that Act 
or pursuant to Regulation S, 17 CFR 230.901 et seq., and any bank 
registered as a commodity pool operator in connection with a pool that 
is a collective trust fund whose securities are exempt from 
registration under the Securities Act pursuant to section 3(a)(2) of 
that Act and are sold solely to qualified eligible persons, may claim 
any or all of the following relief with respect to such pool:''; and
            (2) revise section 4.13(a)(3)(i) of such title to read as 
        follows:
    ``(i) Interests in the pool are exempt from registration under the 
Securities Act of 1933, and such interests are offered and sold 
pursuant to section 4 of the Securities Act of 1933 and the regulations 
thereunder;''.

SEC. 358. BONA FIDE HEDGE DEFINED TO PROTECT END-USER RISK MANAGEMENT 
              NEEDS.

    Section 4a(c) of the Commodity Exchange Act (7 U.S.C. 6a(c)) is 
amended--
            (1) in paragraph (1)--
                    (A) by striking ``may'' and inserting ``shall''; 
                and
                    (B) by striking ``future for which'' and inserting 
                ``future, to be determined by the Commission, for which 
                either an appropriate swap is available or'';
            (2) in paragraph (2)--
                    (A) in the matter preceding subparagraph (A), by 
                striking ``subsection (a)(2)'' and all that follows 
                through ``position as'' and inserting ``paragraphs (2) 
                and (5) of subsection (a) for swaps, contracts of sale 
                for future delivery, or options on the contracts or 
                commodities, a bona fide hedging transaction or 
                position is''; and
                    (B) in subparagraph (A)(ii), by striking ``of 
                risks'' and inserting ``or management of current or 
                anticipated risks''; and
            (3) by adding at the end the following:
            ``(3) The Commission may further define, by rule or 
        regulation, what constitutes a bona fide hedging transaction, 
        provided that the rule or regulation is consistent with the 
        requirements of subparagraphs (A) and (B) of paragraph (2).''.

SEC. 359. CROSS-BORDER REGULATION OF DERIVATIVES TRANSACTIONS.

    (a) Joint Rulemaking Required.--
            (1) In general.--Not later than 270 days after the date of 
        enactment of this Act, the Securities and Exchange Commission 
        and the Commodity Futures Trading Commission shall jointly 
        issue rules setting forth the application of United States 
        swaps requirements of the Securities Exchange Act of 1934 and 
        the Commodity Exchange Act relating to cross-border swaps and 
        security-based swaps transactions involving U.S. persons or 
        non-U.S. persons.
            (2) Construction.--The rules required under paragraph (1) 
        shall be identical, notwithstanding any difference in the 
        authorities granted the Commissions in section 30(c) of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78dd(c)) and section 
        2(i) of the Commodity Exchange Act (7 U.S.C. 2(i)), 
        respectively, except to the extent necessary to accommodate 
        differences in other underlying statutory requirements under 
        such Acts, and the rules thereunder.
    (b) Considerations.--The Commissions shall jointly issue rules that 
address--
            (1) the nature of the connections to the United States that 
        require a non-U.S. person to register as a swap dealer, major 
        swap participant, security-based swap dealer, or major 
        security-based swap participant under each Commission's 
        respective Acts and the regulations issued under such Acts;
            (2) which of the United States swaps requirements shall 
        apply to the swap and security-based swap activities of non-
        U.S. persons, U.S. persons, and their branches, agencies, 
        subsidiaries, and affiliates outside of the United States and 
        the extent to which such requirements shall apply; and
            (3) the circumstances under which a non-U.S. person in 
        compliance with the regulatory requirements of a foreign 
        jurisdiction shall be exempt from United States swaps 
        requirements.
    (c) Rule in Accordance With APA Required.--No guidance, memorandum 
of understanding, or any such other agreement may satisfy the 
requirement to issue a joint rule from the Commissions in accordance 
with section 553 of title 5, United States Code.
    (d) General Application to Countries or Administrative Regions 
Having Nine Largest Markets.--
            (1) General application.--In issuing rules under this 
        section, the Commissions shall provide that a non-U.S. person 
        in compliance with the swaps regulatory requirements of a 
        country or administrative region that has one of the nine 
        largest combined swap and security-based swap markets by 
        notional amount in the calendar year preceding issuance of such 
        rules, or other foreign jurisdiction as jointly determined by 
        the Commissions, shall be exempt from United States swaps 
        requirements in accordance with the schedule set forth in 
        paragraph (2), unless the Commissions jointly determine that 
        the regulatory requirements of such country or administrative 
        region or other foreign jurisdiction are not broadly equivalent 
        to United States swaps requirements.
            (2) Effective date schedule.--The exemption described in 
        paragraph (1) and set forth under the rules required by this 
        section shall apply to persons or transactions relating to or 
        involving--
                    (A) countries or administrative regions described 
                in such paragraph, or any other foreign jurisdiction as 
                jointly determined by the Commissions, accounting for 
                the five largest combined swap and security-based swap 
                markets by notional amount in the calendar year 
                preceding issuance of such rules, on the date on which 
                final rules are issued under this section; and
                    (B) the remaining countries or administrative 
                regions described in such paragraph, and any other 
                foreign jurisdiction as jointly determined by the 
                Commissions, 1 year after the date on which such rules 
                are issued.
            (3) Criteria.--In such rules, the Commissions shall jointly 
        establish criteria for determining that one or more categories 
        of regulatory requirements of a country or administrative 
        region described in paragraph (1) or other foreign jurisdiction 
        is not broadly equivalent to United States swaps requirements 
        and shall jointly determine the appropriate application of 
        certain United States swap requirements to persons or 
        transactions relating to or involving such country or 
        administrative region or other foreign jurisdiction. Such 
        criteria shall include the scope and objectives of the 
        regulatory requirements of a country or administrative region 
        described in paragraph (1) or other foreign jurisdiction as 
        well as the effectiveness of the supervisory compliance program 
        administered, and the enforcement authority exercised, by such 
        country or administrative region or other foreign jurisdiction, 
        and such other factors as the Commissions, by rule, jointly 
        determine to be necessary or appropriate in the public 
        interest.
            (4) Required assessment.--Beginning on the date on which 
        final rules are issued under this section, the Commissions 
        shall begin to jointly assess the regulatory requirements of 
        countries or administrative regions described in paragraph (1), 
        as the Commissions jointly determine appropriate, in accordance 
        with the criteria established pursuant to this subsection, to 
        determine if one or more categories of regulatory requirements 
        of such a country or administrative region or other foreign 
        jurisdiction is not broadly equivalent to United States swaps 
        requirements.
    (e) Report to Congress.--If the Commissions make the joint 
determination described in subsection (d)(1) that the regulatory 
requirements of a country or administrative region described in such 
subsection or other foreign jurisdiction are not broadly equivalent to 
United States swaps requirements, the Commissions shall articulate the 
basis for such a determination in a written report transmitted to the 
Committee on Financial Services and the Committee on Agriculture of the 
House of Representatives and the Committee on Banking, Housing, and 
Urban Affairs and the Committee on Agriculture, Nutrition, and Forestry 
of the Senate within 30 days of the determination. The determination 
shall not be effective until the transmission of such report.
    (f) Definitions.--As used in this Act and for purposes of the rules 
issued pursuant to this Act, the following definitions apply:
            (1) The term ``U.S. person''--
                    (A) means--
                            (i) any natural person resident in the 
                        United States;
                            (ii) any partnership, corporation, trust, 
                        or other legal person organized or incorporated 
                        under the laws of the United States or having 
                        its principal place of business in the United 
                        States;
                            (iii) any account (whether discretionary or 
                        non-discretionary) of a U.S. person; and
                            (iv) any other person as the Commissions 
                        may further jointly define to more effectively 
                        carry out the purposes of this Act; and
                    (B) does not include the International Monetary 
                Fund, the International Bank for Reconstruction and 
                Development, the Inter-American Development Bank, the 
                Asian Development Bank, the African Development Bank, 
                the United Nations, their agencies and pension plans, 
                and any other similar international organizations and 
                their agencies and pension plans.
             (2) The term ``United States swaps requirements'' means 
        the provisions relating to swaps and security-based swaps 
        contained in the Commodity Exchange Act (7 U.S.C. 1a et seq.) 
        and the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) 
        that were added by title VII of the Dodd-Frank Wall Street 
        Reform and Consumer Protection Act (15 U.S.C. 8301 et seq.) and 
        any rules or regulations prescribed by the Securities and 
        Exchange Commission and the Commodity Futures Trading 
        Commission pursuant to such provisions.
    (g) Conforming Amendments.--
            (1) Securities exchange act of 1934.--Section 36(c) of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78mm(c)) is amended 
        by inserting ``or except as necessary to effectuate the 
        purposes of the Customer Protection and End-User Relief Act,'' 
        after ``to grant exemptions,''.
            (2) Commodity exchange act.--Section 4(c)(1)(A) of the 
        Commodity Exchange Act (7 U.S.C. 6(c)(1)(A)) is amended by 
        inserting ``or except as necessary to effectuate the purposes 
        of the Customer Protection and End-User Relief Act,'' after 
        ``to grant exemptions,''.

SEC. 360. REPORT ON FOREIGN BOARDS OF TRADE.

    Within 1 year after the date of the enactment of this Act, the 
Commodity Futures Trading Commission shall prepare and submit to the 
Committee on Agriculture of the House of Representatives and the 
Committee on Agriculture, Nutrition, and Forestry of the Senate a 
written report reviewing the standards and rules of foreign boards of 
trade related to the physical delivery of base metals, including 
warehousing facilities, as compared to the standards and rules for 
domestic designated contract markets and related warehouses for base 
metals.

SEC. 361. TREATMENT OF CERTAIN FUNDS.

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

                       Subtitle F--Effective Date

SEC. 371. EFFECTIVE DATE.

    Except as otherwise provided in this title, the amendments made by 
this title shall take effect as if enacted on July 21, 2010.

            Passed the House of Representatives June 24, 2014.

            Attest:

                                                                 Clerk.
113th CONGRESS

  2d Session

                               H. R. 4413

_______________________________________________________________________

                                 AN ACT

  To reauthorize the Commodity Futures Trading Commission, to better 
protect futures customers, to provide end users with market certainty, 
to make basic reforms to ensure transparency and accountability at the 
 Commission, to help farmers, ranchers, and end users manage risks to 
         help keep consumer costs low, and for other purposes.
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