IIB 

113TH CONGRESS 

2D SESSION H. R. 4413 

IN THE SENATE OF THE UNITED STATES 

JUNE 25, 2014 

Received; read twice and referred to the Committee on Agriculture, Nutrition, 

and Forestry 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Customer Protection 

5 and End-User Relief Act’’. 

6 SEC. 2. TABLE OF CONTENTS. 

7 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. 


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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. 

1 TITLE I—CUSTOMER 

2 PROTECTIONS 

3 SEC. 101. SHORT TITLE. 

4 This title may be cited as the ‘‘Futures Customer 

5 Protection Act’’. 

6 SEC. 102. ENHANCED PROTECTIONS FOR FUTURES CUS7 TOMERS. 

8 Section 17 of the Commodity Exchange Act (7 U.S.C. 

9 21) is amended by adding at the end the following: 

10 ‘‘(s) A registered futures association shall— 


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1 ‘‘(1) require each member of the association 

2 that is a futures commission merchant to maintain 

3 written policies and procedures regarding the main4 tenance of— 

5 ‘‘(A) the residual interest of the member, 

6 as described in section 1.23 of title 17, Code of 

7 Federal Regulations, in any customer seg8 regated funds account of the member, as identi9 fied in section 1.20 of such title, and in any for10 eign futures and foreign options customer se11 cured amount funds account of the member, as 

12 identified in section 30.7 of such title; and 

13 ‘‘(B) the residual interest of the member, 

14 as described in section 22.2(e)(4) of such title, 

15 in any cleared swaps customer collateral ac16 count of the member, as identified in section 

17 22.2 of such title; and 

18 ‘‘(2) establish rules to govern the withdrawal, 

19 transfer or disbursement by any member of the asso20 ciation, that is a futures commission merchant, of 

21 the member’s residual interest in customer seg22 regated funds as provided in such section 1.20, in 

23 foreign futures and foreign options customer secured 

24 amount funds, identified as provided in such section 


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1 30.7, and from a cleared swaps customer collateral, 

2 identified as provided in such section 22.2.’’. 

3 SEC. 103. ELECTRONIC CONFIRMATION OF CUSTOMER 

4 FUNDS. 

5 Section 17 of the Commodity Exchange Act (7 U.S.C. 

6 21), as amended by section 102 of this Act, is amended 

7 by adding at the end the following: 

8 ‘‘(t) A registered futures association shall require any 

9 member of the association that is a futures commission 

10 merchant to— 

11 ‘‘(1) use an electronic system or systems to re12 port financial and operational information to the as13 sociation, including information related to customer 

14 segregated funds, foreign futures and foreign options 

15 customer secured amount funds accounts, and 

16 cleared swaps customer collateral, in accordance 

17 with such terms, conditions, documentation stand18 ards, and regular time intervals as are established 

19 by the association; 

20 ‘‘(2) instruct each depository, including any 

21 bank, trust company, derivatives clearing organiza22 tion, or futures commission merchant, holding cus23 tomer segregated funds under section 1.20 of title 

24 17, Code of Federal Regulations, foreign futures and 

25 foreign options customer secured amount funds 


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1 under section 30.7 of such title, or cleared swap cus2 tomer funds under section 22.2 of such title, to re3 port balances in the futures commission merchant’s 

4 section 1.20 customer segregated funds, section 30.7 

5 foreign futures and foreign options customer secured 

6 amount funds, and section 22.2 cleared swap cus7 tomer funds, to the registered futures association or 

8 another party designated by the registered futures 

9 association, in the form, manner, and interval pre10 scribed by the registered futures association; and 

11 ‘‘(3) hold section 1.20 customer segregated 

12 funds, section 30.7 foreign futures and foreign op13 tions customer secured amount funds and section 

14 22.2 cleared swaps customer funds in a depository 

15 that reports the balances in these accounts of the fu16 tures commission merchant held at the depository to 

17 the registered futures association or another party 

18 designated by the registered futures association in 

19 the form, manner, and interval prescribed by the 

20 registered futures association.’’. 

21 SEC. 104. NOTICE AND CERTIFICATIONS PROVIDING ADDI22 TIONAL CUSTOMER PROTECTIONS. 

23 Section 17 of the Commodity Exchange Act (7 U.S.C. 

24 21), as amended by sections 102 and 103 of this Act, is 

25 amended by adding at the end the following: 


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1 ‘‘(u) A futures commission merchant that has ad2 justed net capital in an amount less than the amount re3 quired by regulations established by the Commission or 

4 a self-regulatory organization of which the futures com5 mission merchant is a member shall immediately notify 

6 the Commission and the self-regulatory organization of 

7 this occurrence. 

8 ‘‘(v) A futures commission merchant that does not 

9 hold a sufficient amount of funds in segregated accounts 

10 for futures customers under section 1.20 of title 17, Code 

11 of Federal Regulations, in foreign futures and foreign op12 tions secured amount accounts for foreign futures and for13 eign options secured amount customers under section 30.7 

14 of such title, or in segregated accounts for cleared swap 

15 customers under section 22.2 of such title, as required by 

16 regulations established by the Commission or a self-regu17 latory organization of which the futures commission mer18 chant is a member, shall immediately notify the Commis19 sion and the self-regulatory organization of this occur20 rence. 

21 ‘‘(w) Within such time period established by the Com22 mission after the end of each fiscal year, a futures com23 mission merchant shall file with the Commission a report 

24 from the chief compliance officer of the futures commis25 sion merchant containing an assessment of the internal 


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1 compliance programs of the futures commission mer2 chant.’’. 

3 SEC. 105. FUTURES COMMISSION MERCHANT COMPLIANCE. 

4 (a) IN GENERAL.—Section 4d(a) of the Commodity 

5 Exchange Act (7 U.S.C. 6d(a)) is amended— 

6 (1) by redesignating paragraphs (1) and (2) as 

7 subparagraphs (A) and (B); 

8 (2) by inserting ‘‘(1)’’ before ‘‘It shall be unlaw9 ful’’; and 

10 (3) by adding at the end the following new 

11 paragraph: 

12 ‘‘(2) Any rules or regulations requiring a futures 

13 commission merchant to maintain a residual interest in 

14 accounts held for the benefit of customers in amounts at 

15 least sufficient to exceed the sum of all uncollected margin 

16 deficits of such customers shall provide that a futures 

17 commission merchant shall meet its residual interest re18 quirement as of the end of each business day calculated 

19 as of the close of business on the previous business day.’’. 

20 (b) CONFORMING AMENDMENT.—Section 4d(h) of 

21 the Commodity Exchange Act (7 U.S.C. 6d(h)) is amend22 ed by striking ‘‘Notwithstanding subsection (a)(2)’’ and 

23 inserting ‘‘Notwithstanding subsection (a)(1)(B)’’. 


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1 SEC. 106. CERTAINTY FOR FUTURES CUSTOMERS AND MAR2 KET PARTICIPANTS. 

3 Section 20(a) of the Commodity Exchange Act (7 

4 U.S.C. 24(a)) is amended— 

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

6 (4); 

7 (2) by striking the period at the end of para8 graph (5) and inserting ‘‘; and’’; and 

9 (3) by adding at the end the following: 

10 ‘‘(6) that cash, securities, or other property of 

11 the estate of a commodity broker, including the 

12 trading or operating accounts of the commodity 

13 broker and commodities held in inventory by the 

14 commodity broker, shall be included in customer 

15 property, subject to any otherwise unavoidable secu16 rity interest, or otherwise unavoidable contractual 

17 offset or netting rights of creditors (including rights 

18 set forth in a rule or bylaw of a derivatives clearing 

19 organization or a clearing agency) in respect of such 

20 property, but only to the extent that the property 

21 that is otherwise customer property is insufficient to 

22 satisfy the net equity claims of public customers (as 

23 such term may be defined by the Commission by 

24 rule or regulation) of the commodity broker.’’. 


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1 SEC. 107. STUDY ON HIGH-FREQUENCY TRADING. 

2 (a) IN GENERAL.—Not later than one year after the 

3 date of the enactment of this Act, the Commodity Futures 

4 Trading Commission shall submit to the Committee on 

5 Agriculture of the House of Representatives and the Com6 mittee on Agriculture, Nutrition, and Forestry of the Sen7 ate a report examining the effect of the practice commonly 

8 referred to as high-frequency trading on markets under 

9 its jurisdiction. 

10 (b) SPECIFIC AREAS EXAMINED IN REPORT.—In 

11 preparing the report submitted under subsection (a), the 

12 Commission shall particularly examine each of the fol13 lowing areas: 

14 (1) The technology, personnel, or other re15 sources the Commission may require for purposes of 

16 monitoring the effect of high-frequency trading. 

17 (2) The role such trading plays in providing 

18 market liquidity. 

19 (3) Whether the technology creates discrep20 ancies in the marketplace between market partici21 pants. 

22 (4) Whether the existing authority of the Com23 mission with respect to such trading is sufficient to 

24 meet the Commission’s mission to— 

25 (A) protect market participants and the 

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1 tices, and systemic risk related to derivatives; 

2 and 

3 (B) foster transparent, open, competitive, 

4 and financially sound markets. 

5 (5) Whether such trading increases market vol6 atility, including short term market swings. 

7 TITLE II—COMMODITY FUTURES 

8 TRADING COMMISSION RE9 FORMS 

10 SEC. 201. SHORT TITLE. 

11 This title may be cited as the ‘‘Commodity Futures 

12 Trading Commission Reform Act’’. 

13 SEC. 202. EXTENSION OF OPERATIONS. 

14 Section 12(d) of the Commodity Exchange Act (7 

15 U.S.C. 16(d)) is amended by striking ‘‘2013’’ and insert16 ing ‘‘2018’’. 

17 SEC. 203. CONSIDERATION BY THE COMMODITY FUTURES 

18 TRADING COMMISSION OF THE COSTS AND 

19 BENEFITS OF ITS REGULATIONS AND OR20 DERS. 

21 Section 15(a) of the Commodity Exchange Act (7 

22 U.S.C. 19(a)) is amended— 

23 (1) by striking paragraphs (1) and (2) and in24 serting the following: 


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1 ‘‘(1) IN GENERAL.—Before promulgating a reg2 ulation under this Act or issuing an order (except as 

3 provided in paragraph (3)), the Commission, 

4 through the Office of the Chief Economist, shall as5 sess and publish in the regulation or order the costs 

6 and benefits, both qualitative and quantitative, of 

7 the proposed regulation or order, and the proposed 

8 regulation or order shall state its statutory justifica9 tion. 

10 ‘‘(2) CONSIDERATIONS.—In making a reasoned 

11 determination of the costs and the benefits, the 

12 Commission shall evaluate— 

13 ‘‘(A) considerations of protection of market 

14 participants and the public; 

15 ‘‘(B) considerations of the efficiency, com16 petitiveness, and financial integrity of futures 

17 and swaps markets; 

18 ‘‘(C) considerations of the impact on mar19 ket liquidity in the futures and swaps markets; 

20 ‘‘(D) considerations of price discovery; 

21 ‘‘(E) considerations of sound risk manage22 ment practices; 

23 ‘‘(F) available alternatives to direct regula24 tion; 


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1 ‘‘(G) the degree and nature of the risks 

2 posed by various activities within the scope of 

3 its jurisdiction; 

4 ‘‘(H) the costs of complying with the pro5 posed regulation or order by all regulated enti6 ties, including a methodology for quantifying 

7 the costs (recognizing that some costs are dif8 ficult to quantify); 

9 ‘‘(I) whether the proposed regulation or 

10 order is inconsistent, incompatible, or duplica11 tive of other Federal regulations or orders; 

12 ‘‘(J) whether, in choosing among alter13 native regulatory approaches, those approaches 

14 maximize net benefits (including potential eco15 nomic and other benefits, distributive impacts, 

16 and equity); and 

17 ‘‘(K) other public interest considerations.’’; 

18 and 

19 (2) by adding at the end the following: 

20 ‘‘(4) JUDICIAL REVIEW.—Notwithstanding sec21 tion 24(d), a court shall affirm a Commission as22 sessment of costs and benefits under this subsection, 

23 unless the court finds the assessment to be an abuse 

24 of discretion.’’. 


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1 SEC. 204. DIVISION DIRECTORS. 

2 Section 2(a)(6)(C) of the Commodity Exchange Act 

3 (7 U.S.C. 2(a)(6)(C)) is amended by inserting ‘‘, and the 

4 heads of the units shall serve at the pleasure of the Com5 mission, report directly to the Commission, and perform 

6 such functions and duties as the Commission may pre7 scribe’’ before the period. 

8 SEC. 205. OFFICE OF THE CHIEF ECONOMIST. 

9 (a) IN GENERAL.—Section 2(a) of the Commodity 

10 Exchange Act (7 U.S.C. 2(a)) is amended by adding at 

11 the end the following: 

12 ‘‘(17) OFFICE OF THE CHIEF ECONOMIST.— 

13 ‘‘(A) ESTABLISHMENT.—There is estab14 lished in the Commission the Office of the Chief 

15 Economist. 

16 ‘‘(B) HEAD.—The Office of the Chief 

17 Economist shall be headed by the Chief Econo18 mist, who shall be appointed by the Commission 

19 and serve at the pleasure of the Commission. 

20 ‘‘(C) FUNCTIONS.—The Chief Economist 

21 shall report directly to the Commission and per22 form such functions and duties as the Commis23 sion may prescribe. 

24 ‘‘(D) PROFESSIONAL STAFF.—The Com25 mission shall appoint such other economists as 

26 may be necessary to assist the Chief Economist 


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1 in performing such economic analysis, regu2 latory cost-benefit analysis, or research as the 

3 Commission may direct.’’. 

4 (b) CONFORMING AMENDMENT.—Section 2(a)(6)(A) 

5 of such Act (7 U.S.C. 2(a)(6)(A)) is amended by striking 

6 ‘‘(4) and (5)’’ and inserting ‘‘(4), (5), and (17)’’. 

7 SEC. 206. PROCEDURES GOVERNING ACTIONS TAKEN WITH8 OUT A COMMISSION VOTE. 

9 Section 2(a)(12) of the Commodity Exchange Act (7 

10 U.S.C. 2(a)(12)) is amended— 

11 (1) by striking ‘‘(12) The’’ and inserting the 

12 following: 

13 ‘‘(12) RULES AND REGULATIONS.— 

14 ‘‘(A) IN GENERAL.—Subject to the other 

15 provisions of this paragraph, the’’; and 

16 (2) by adding after and below the end the fol17 lowing new subparagraph: 

18 ‘‘(B) NOTICE TO COMMISSION.—The Com19 mission shall develop and publish internal pro20 cedures governing the issuance by any division 

21 or office of the Commission of any response to 

22 a formal, written request or petition from any 

23 member of the public for an exemptive, a no-ac24 tion, or an interpretive letter and such proce25 dures shall provide that the Commission be proVerDate Mar 15 2010 00:38 Jun 26, 2014 Jkt 039200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6201 E:\BILLS\H4413.RFS H4413

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1 vided with the final version of the matter to be 

2 issued with sufficient notice to thoroughly re3 view the matter prior to its issuance.’’. 

4 SEC. 207. STRATEGIC TECHNOLOGY PLAN. 

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

6 U.S.C. 2(a)), as amended by section 204(a) of this Act, 

7 is amended by adding at the end the following: 

8 ‘‘(18) STRATEGIC TECHNOLOGY PLAN.— 

9 ‘‘(A) IN GENERAL.—Every 5 years, the 

10 Commission shall develop and submit to the 

11 Committee on Agriculture of the House of Rep12 resentatives and the Committee on Agriculture, 

13 Nutrition, and Forestry of the Senate a detailed 

14 plan focused on the acquisition and use of tech15 nology by the Commission. 

16 ‘‘(B) CONTENTS.—The plan shall— 

17 ‘‘(i) include for each related division 

18 or office a detailed technology strategy fo19 cused on market surveillance and risk de20 tection, market data collection, aggrega21 tion, interpretation, standardization, har22 monization, normalization, validation, 

23 streamlining or other data analytic proc24 esses, and internal management and pro25 tection of data collected by the CommisVerDate Mar 15 2010 00:38 Jun 26, 2014 Jkt 039200 PO 00000 Frm 00016 Fmt 6652 Sfmt 6201 E:\BILLS\H4413.RFS H4413

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1 sion, including a detailed accounting of 

2 how the funds provided for technology will 

3 be used and the priorities that will apply in 

4 the use of the funds; and 

5 ‘‘(ii) set forth annual goals to be ac6 complished and annual budgets needed to 

7 accomplish the goals.’’. 

8 SEC. 208. INTERNAL RISK CONTROLS. 

9 (a) IN GENERAL.—Section 2(a)(12) of the Com10 modity Exchange Act (7 U.S.C. 2(a)(12)), as amended by 

11 section 206 of this Act, is amended by adding at the end 

12 the following: 

13 ‘‘(C) INTERNAL RISK CONTROLS.—The 

14 Commission, in consultation with the Chief 

15 Economist, shall develop comprehensive internal 

16 risk control mechanisms to safeguard and gov17 ern the storage of all market data by the Com18 mission, all market data sharing agreements of 

19 the Commission, and all academic research per20 formed at the Commission using market data.’’. 

21 (b) REPORTS TO THE CONGRESS.— 

22 (1) CONTENT.—The Commission shall submit 

23 to the Committee on Agriculture of the House of 

24 Representatives and the Committee on Agriculture, 

25 Nutrition, and Forestry of the Senate 2 reports on 


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1 the progress made in implementing the internal risk 

2 controls provided for in section 2(a)(12)(C) of the 

3 Commodity Exchange Act. 

4 (2) TIMING.—The Commission shall submit the 

5 1st report required by paragraph (1) within 60 days 

6 after the date of the enactment of this Act, and the 

7 2nd such report within 120 days after such date of 

8 enactment. 

9 SEC. 209. SUBPOENA DURATION AND RENEWAL. 

10 Section 6(c)(5) of the Commodity Exchange Act (7 

11 U.S.C. 9(5)) is amended— 

12 (1) by striking ‘‘(5) SUBPOENA.—For’’ and in13 serting the following: 

14 ‘‘(5) SUBPOENA.— 

15 ‘‘(A) IN GENERAL.—For’’; and 

16 (2) by adding after and below the end the fol17 lowing: 

18 ‘‘(B) CONTENT OF ORDER.—An order of 

19 the Commission authorizing the issuance of a 

20 subpoena in an investigation shall state in good 

21 faith— 

22 ‘‘(i) the legitimate purpose of the in23 vestigation; and 


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1 ‘‘(ii) the information sought by any 

2 subpoena order that will be reasonably rel3 evant to that purpose. 

4 ‘‘(C) DURATION AND RENEWAL.—An order 

5 issued under this paragraph shall not be for an 

6 indefinite duration and may be renewed only by 

7 Commission action.’’. 

8 SEC. 210. IMPLEMENTATION PLAN FOR COMMISSION 

9 RULEMAKINGS. 

10 Section 2(a)(12) of the Commodity Exchange Act (7 

11 U.S.C. 2(a)(12)), as amended by sections 206 and 208(a) 

12 of this Act, is amended by adding at the end the following: 

13 ‘‘(D) REQUIREMENT TO PUBLISH IMPLE14 MENTATION PLAN FOR COMMISSION RULES.— 

15 The Commission shall direct its staff to develop 

16 and publish in any proposed rule a plan for— 

17 ‘‘(i) when and for how long the pro18 posed rule will be subject to public com19 ment; and 

20 ‘‘(ii) by when compliance with the 

21 final rule will be required.’’. 


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1 SEC. 211. APPLICABILITY OF NOTICE AND COMMENT RE2 QUIREMENTS OF THE ADMINISTRATIVE PRO3 CEDURE ACT TO GUIDANCE VOTED ON BY 

4 THE COMMISSION. 

5 Section 2(a)(12) of the Commodity Exchange Act (7 

6 U.S.C. 2(a)(12)), as amended by sections 206, 208(a), 

7 and 210 of this Act, is amended by adding at the end 

8 the following: 

9 ‘‘(E) APPLICABILITY OF NOTICE AND COM10 MENT RULES TO GUIDANCE VOTED ON BY THE

11 COMMISSION.—The notice and comment re12 quirements of chapter 5 of title 5, United 

13 States Code, shall also apply with respect to 

14 any guidance issued by the Commission.’’. 

15 SEC. 212. JUDICIAL REVIEW OF COMMISSION RULES. 

16 The Commodity Exchange Act (7 U.S.C. 1 et seq.) 

17 is amended by adding at the end the following: 

18 ‘‘SEC. 24. JUDICIAL REVIEW OF COMMISSION RULES. 

19 ‘‘(a) A person adversely affected by a rule of the 

20 Commission promulgated under this Act may obtain re21 view of the rule in the United States Court of Appeals 

22 for the District of Columbia Circuit or the United States 

23 Court of Appeals for the circuit where the party resides 

24 or has the principal place of business, by filing in the 

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1 ister of the entry of the rule, a written petition requesting 

2 that the rule be set aside. 

3 ‘‘(b) A copy of the petition shall be transmitted forth4 with by the clerk of the court to an officer designated by 

5 the Commission for that purpose. Thereupon the Commis6 sion shall file in the court the record on which the rule 

7 complained of is entered, as provided in section 2112 of 

8 title 28, United States Code, and the Federal Rules of 

9 Appellate Procedure. 

10 ‘‘(c) On the filing of the petition, the court has juris11 diction, which becomes exclusive on the filing of the 

12 record, to affirm and enforce or to set aside the rule. 

13 ‘‘(d) The court shall affirm and enforce the rule un14 less the Commission’s action in promulgating the rule is 

15 found to be arbitrary, capricious, an abuse of discretion, 

16 or otherwise not in accordance with law; contrary to con17 stitutional right, power, privilege, or immunity; in excess 

18 of statutory jurisdiction, authority, or limitations, or short 

19 of statutory right; or without observance of procedure re20 quired by law.’’. 

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

22 (a) STUDY.—The Comptroller General of the United 

23 States shall conduct a study of the resources of the Com24 modity Futures Trading Commission that— 


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1 (1) assesses whether the resources of the Com2 mission are sufficient to enable the Commission to 

3 effectively carry out the duties of the Commission; 

4 and 

5 (2) examines the prior expenditures of the Com6 mission on hardware, software, and analytical proc7 esses designed to protect customers in the areas 

8 of— 

9 (A) market surveillance and risk detection; 

10 and 

11 (B) market data collection, aggregation, 

12 interpretation, standardization, harmonization, 

13 normalization, validation, and streamlining or 

14 other data analytic processes. 

15 (b) REPORT.—Not later than 180 days after the date 

16 of the enactment of this Act, the Comptroller General of 

17 the United States shall submit to the Committee on Agri18 culture of the House of Representatives and the Com19 mittee on Agriculture, Nutrition, and Forestry of the Sen20 ate a report that contains the results of the study. 

21 SEC. 214. DISCLOSURE OF REQUIRED DATA OF OTHER REG22 ISTERED ENTITIES. 

23 Section 8 of the Commodity Exchange Act (7 U.S.C. 

24 12) is amended by adding at the end the following: 


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1 ‘‘(j) DISCLOSURE OF REQUIRED DATA OF OTHER

2 REGISTERED ENTITIES.— 

3 ‘‘(1) Except as provided in this subsection, the 

4 Commission may not be compelled to disclose any 

5 proprietary information provided to the Commission, 

6 except that nothing in this subsection— 

7 ‘‘(A) authorizes the Commission to with8 hold information from Congress, upon an agree9 ment of confidentiality; or 

10 ‘‘(B) prevents the Commission from— 

11 ‘‘(i) complying with a request for in12 formation from any other Federal depart13 ment or agency, any State or political sub14 division thereof, or any foreign government 

15 or any department, agency, or political 

16 subdivision thereof requesting the report or 

17 information for purposes within the scope 

18 of its jurisdiction, upon an agreement of 

19 confidentiality to protect the information 

20 in a manner consistent with this paragraph 

21 and subsection (e); or 

22 ‘‘(ii) a disclosure made pursuant to a 

23 court order in connection with an adminis24 trative or judicial proceeding brought 

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1 ceeding involving a receiver appointed in a 

2 judicial proceeding brought under this Act, 

3 or in any bankruptcy proceeding in which 

4 the Commission has intervened or in which 

5 the Commission has the right to appear 

6 and be heard under title 11 of the United 

7 States Code. 

8 ‘‘(2) Any proprietary information of a com9 modity trading advisor or commodity pool operator 

10 ascertained by the Commission in connection with 

11 Form CPO–PQR, Form CTA–PR, and any suc12 cessor forms thereto, shall be subject to the same 

13 limitations on public disclosure, as any facts 

14 ascertained during an investigation, as provided by 

15 subsection (a); provided, however, that the Commis16 sion shall not be precluded from publishing aggre17 gate information compiled from such forms, to the 

18 extent such aggregate information does not identify 

19 any individual person or firm, or such person’s pro20 prietary information. 

21 ‘‘(3) For purposes of section 552 of title 5, 

22 United States Code, this subsection, and the infor23 mation contemplated herein, shall be considered a 

24 statute described in subsection (b)(3)(B) of such 

25 section 552. 


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1 ‘‘(4) For purposes of the definition of propri2 etary information in paragraph (5), the records and 

3 reports of any client account or commodity pool to 

4 which a commodity trading advisor or commodity 

5 pool operator registered under this title provides 

6 services that are filed with the Commission on Form 

7 CPO–PQR, CTA–PR, and any successor forms 

8 thereto, shall be deemed to be the records and re9 ports of the commodity trading advisor or com10 modity pool operator, respectively. 

11 ‘‘(5) For purposes of this section, proprietary 

12 information of a commodity trading advisor or com13 modity pool operator includes sensitive, non-public 

14 information regarding— 

15 ‘‘(A) the commodity trading advisor, com16 modity pool operator or the trading strategies 

17 of the commodity trading advisor or commodity 

18 pool operator; 

19 ‘‘(B) analytical or research methodologies 

20 of a commodity trading advisor or commodity 

21 pool operator; 

22 ‘‘(C) trading data of a commodity trading 

23 advisor or commodity pool operator; and 


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1 ‘‘(D) computer hardware or software con2 taining intellectual property of a commodity 

3 trading advisor or commodity pool operator;’’. 

4 SEC. 215. GAO STUDY ON COMMISSION LEASES. 

5 (a) The Comptroller General of the United States 

6 shall, in consultation with the Commodity Futures Trad7 ing Commission Inspector General, conduct a study and 

8 publish a report regarding achieving efficiencies in leasing 

9 and rental costs at the Commodity Futures Trading Com10 mission. 

11 (b) The report shall be published within 90 days after 

12 the date of the enactment of this Act regarding achieving 

13 efficiencies in leasing and rental costs of buildings occu14 pied by the Commodity Futures Trading Commission, and 

15 shall include recommendations to the Chairman of the 

16 Commodity Futures Trading Commission and the con17 gressional committees of jurisdiction regarding the fol18 lowing: 

19 (1) Average occupancy rates and leasing costs 

20 of buildings across the Federal Government com21 pared to those currently in effect with respect to 

22 buildings and locations occupied by the Commodity 

23 Futures Trading Commission. 

24 (2) Changes to leasing authority that could 

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1 pendent leasing authority and transfer of authority 

2 to the Administrator of General Services. 

3 (3) The recommendations and responses con4 tained in the report by the Commodity Futures 

5 Trading Commission Inspector General, dated June 

6 4, 2014. 

7 (4) Other related recommendations that would 

8 achieve efficiencies in leasing and rental costs of 

9 buildings currently occupied by the Commodity Fu10 tures Trading Commission. 

11 (5) Is the Commodity Futures Trading Com12 mission violating any laws, including the Anti-Defi13 ciency Act, by entering into these leases, particularly 

14 those with more than 5-year terms, and if so, how 

15 they can avoid violating Federal law in the future. 

16 (c) The Chairman of the Commodity Futures Trad17 ing Commission shall report to the congressional commit18 tees of jurisdiction within 60 days after receipt of the re19 port as to whether the Chairman accepts or rejects each 

20 of the recommendations of the Comptroller General, and 

21 an explanation for each decision. 

22 TITLE III—END-USER RELIEF 

23 SEC. 301. SHORT TITLE. 

24 This title may be cited as the ‘‘End-User Relief and 

25 Market Certainty Act’’. 


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1 Subtitle A—End-User Exemption 

2 From Margin Requirements 

3 SEC. 311. END-USER MARGIN REQUIREMENTS. 

4 (a) COMMODITY EXCHANGE ACT AMENDMENT.— 

5 Section 4s(e) of the Commodity Exchange Act (7 U.S.C. 

6 6s(e)) is amended by adding at the end the following new 

7 paragraph: 

8 ‘‘(4) APPLICABILITY WITH RESPECT TO

9 COUNTERPARTIES.—The requirements of paragraphs 

10 (2)(A)(ii) and (2)(B)(ii), including the initial and 

11 variation margin requirements imposed by rules 

12 adopted pursuant to paragraphs (2)(A)(ii) and 

13 (2)(B)(ii), shall not apply to a swap in which a 

14 counterparty qualifies for an exception under section 

15 2(h)(7)(A), or an exemption issued under section 

16 4(c)(1) from the requirements of section 2(h)(1)(A) 

17 for cooperative entities as defined in such exemption, 

18 or satisfies the criteria in section 2(h)(7)(D).’’. 

19 (b) SECURITIES EXCHANGE ACT OF 1934 AMEND20 MENT.—Section 15F(e) of the Securities Exchange Act of 

21 1934 (15 U.S.C. 78o–10(e)) is amended by adding at the 

22 end the following new paragraph: 

23 ‘‘(4) APPLICABILITY WITH RESPECT TO

24 COUNTERPARTIES.—The requirements of paragraphs 

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1 rity-based swap in which a counterparty qualifies for 

2 an exception under section 3C(g)(1) or satisfies the 

3 criteria in section 3C(g)(4).’’. 

4 SEC. 312. IMPLEMENTATION. 

5 The amendment made to the Commodity Exchange 

6 Act by this subtitle shall be implemented— 

7 (1) without regard to— 

8 (A) chapter 35 of title 44, United States 

9 Code; and 

10 (B) the notice and comment provisions of 

11 section 553 of title 5, United States Code; 

12 (2) through the promulgation of an interim 

13 final rule, pursuant to which public comment will be 

14 sought before a final rule is issued; and 

15 (3) such that paragraph (1) shall apply solely 

16 to changes to rules and regulations, or proposed 

17 rules and regulations, that are limited to and di18 rectly a consequence of the amendment. 

19 Subtitle B—Inter-Affiliate Swaps 

20 SEC. 321. TREATMENT OF AFFILIATE TRANSACTIONS. 

21 (a) IN GENERAL.— 

22 (1) COMMODITY EXCHANGE ACT AMEND23 MENT.—Section 2(h)(7)(D)(i) of the Commodity Ex24 change Act (7 U.S.C. 2(h)(7)(D)(i)) is amended to 

25 read as follows: 


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1 ‘‘(i) IN GENERAL.—An affiliate of a 

2 person that qualifies for an exception 

3 under subparagraph (A) (including affiliate 

4 entities predominantly engaged in pro5 viding financing for the purchase of the 

6 merchandise or manufactured goods of the 

7 person) may qualify for the exception only 

8 if the affiliate enters into the swap to 

9 hedge or mitigate the commercial risk of 

10 the person or other affiliate of the person 

11 that is not a financial entity, provided that 

12 if the transfer of commercial risk is ad13 dressed by entering into a swap with a 

14 swap dealer or major swap participant, an 

15 appropriate credit support measure or 

16 other mechanism is utilized.’’. 

17 (2) SECURITIES EXCHANGE ACT OF 1934

18 AMENDMENT.—Section 3C(g)(4)(A) of the Securities 

19 Exchange Act of 1934 (15 U.S.C. 78c–3(g)(4)(A)) 

20 is amended to read as follows: 

21 ‘‘(A) IN GENERAL.—An affiliate of a per22 son that qualifies for an exception under para23 graph (1) (including affiliate entities predomi24 nantly engaged in providing financing for the 

25 purchase of the merchandise or manufactured 


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1 goods of the person) may qualify for the excep2 tion only if the affiliate enters into the security3 based swap to hedge or mitigate the commercial 

4 risk of the person or other affiliate of the per5 son that is not a financial entity, provided that 

6 if the transfer of commercial risk is addressed 

7 by entering into a security-based swap with a 

8 security-based swap dealer or major security9 based swap participant, an appropriate credit 

10 support measure or other mechanism is uti11 lized.’’. 

12 (b) APPLICABILITY OF CREDIT SUPPORT MEASURE

13 REQUIREMENT.—Notwithstanding section 371 of this Act, 

14 the requirements in section 2(h)(7)(D)(i) of the Com15 modity Exchange Act and section 3C(g)(4)(A) of the Se16 curities Exchange Act of 1934, as amended by subsection 

17 (a), requiring that a credit support measure or other 

18 mechanism be utilized if the transfer of commercial risk 

19 referred to in such sections is addressed by entering into 

20 a swap with a swap dealer or major swap participant or 

21 a security-based swap with a security-based swap dealer 

22 or major security-based swap participant, as appropriate, 

23 shall not apply with respect to swaps or security-based 

24 swaps, as appropriate, entered into before the date of the 

25 enactment of this Act. 


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1 Subtitle C—Indemnification Re2 quirements Related to Swap 

3 Data Repositories 

4 SEC. 331. INDEMNIFICATION REQUIREMENTS. 

5 (a) DERIVATIVES CLEARING ORGANIZATIONS.—Sec6 tion 5b(k)(5) of the Commodity Exchange Act (7 U.S.C. 

7 7a–1(k)(5)) is amended to read as follows: 

8 ‘‘(5) CONFIDENTIALITY AGREEMENT.—Before 

9 the Commission may share information with any en10 tity described in paragraph (4), the Commission 

11 shall receive a written agreement from each entity 

12 stating that the entity shall abide by the confiden13 tiality requirements described in section 8 relating to 

14 the information on swap transactions that is pro15 vided.’’. 

16 (b) SWAP DATA REPOSITORIES.—Section 21(d) of 

17 such Act (7 U.S.C. 24a(d)) is amended to read as follows: 

18 ‘‘(d) CONFIDENTIALITY AGREEMENT.—Before the 

19 swap data repository may share information with any enti20 ty described in subsection (c)(7), the swap data repository 

21 shall receive a written agreement from each entity stating 

22 that the entity shall abide by the confidentiality require23 ments described in section 8 relating to the information 

24 on swap transactions that is provided.’’. 


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1 (c) SECURITY-BASED SWAP DATA REPOSITORIES.— 

2 Section 13(n)(5)(H) of the Securities Exchange Act of 

3 1934 (15 U.S.C. 78m(n)(5)(H)) is amended to read as 

4 follows: 

5 ‘‘(H) CONFIDENTIALITY AGREEMENT.— 

6 Before the security-based swap data repository 

7 may share information with any entity de8 scribed in subparagraph (G), the security-based 

9 swap data repository shall receive a written 

10 agreement from each entity stating that the en11 tity shall abide by the confidentiality require12 ments described in section 24 relating to the in13 formation on security-based swap transactions 

14 that is provided.’’. 

15 Subtitle D—Relief for Municipal 

16 Utilities 

17 SEC. 341. TRANSACTIONS WITH UTILITY SPECIAL ENTITIES. 

18 Section 1a(49) of the Commodity Exchange Act (7 

19 U.S.C. 1a(49)) is amended by adding at the end the fol20 lowing: 

21 ‘‘(E) CERTAIN TRANSACTIONS WITH A

22 UTILITY SPECIAL ENTITY.— 

23 ‘‘(i) Transactions in utility operations24 related swaps shall be reported pursuant to 

25 section 4r. 


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1 ‘‘(ii) In making a determination to ex2 empt pursuant to subparagraph (D), the 

3 Commission shall treat a utility operations4 related swap entered into with a utility 

5 special entity, as defined in section 

6 4s(h)(2)(D), as if it were entered into with 

7 an entity that is not a special entity, as de8 fined in section 4s(h)(2)(C).’’. 

9 SEC. 342. UTILITY SPECIAL ENTITY DEFINED. 

10 Section 4s(h)(2) of the Commodity Exchange Act (7 

11 U.S.C. 6s(h)(2)) is amended by adding at the end the fol12 lowing: 

13 ‘‘(D) UTILITY SPECIAL ENTITY.—For pur14 poses of this Act, the term ‘utility special enti15 ty’ means a special entity, or any instrumen16 tality, department, or corporation of or estab17 lished by a State or political subdivision of a 

18 State, that— 

19 ‘‘(i) owns or operates an electric or 

20 natural gas facility or an electric or nat21 ural gas operation; 

22 ‘‘(ii) supplies natural gas and or elec23 tric energy to another utility special entity; 

24 ‘‘(iii) has public service obligations 

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1 lation to deliver electric energy or natural 

2 gas service to customers; or 

3 ‘‘(iv) is a Federal power marketing 

4 agency, as defined in section 3 of the Fed5 eral Power Act.’’. 

6 SEC. 343. UTILITY OPERATIONS-RELATED SWAP. 

7 (a) SWAP FURTHER DEFINED.—Section 

8 1a(47)(A)(iii) of the Commodity Exchange Act (7 U.S.C. 

9 1a(47)(A)(iii)) is amended— 

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

11 (XXI); 

12 (2) by adding ‘‘and’’ at the end of subclause 

13 (XXII); and 

14 (3) by adding at the end the following: 

15 ‘‘(XXIII) a utility operations-re16 lated swap;’’. 

17 (b) UTILITY OPERATIONS-RELATED SWAP DE18 FINED.—Section 1a of such Act (7 U.S.C. 1a) is amended 

19 by adding at the end the following: 

20 ‘‘(52) UTILITY OPERATIONS-RELATED SWAP.— 

21 The term ‘utility operations-related swap’ means a 

22 swap that— 

23 ‘‘(A) is entered into to hedge or mitigate a 

24 commercial risk; 


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1 ‘‘(B) is not a contract, agreement, or 

2 transaction based on, derived on, or ref3 erencing— 

4 ‘‘(i) an interest rate, credit, equity, or 

5 currency asset class; or 

6 ‘‘(ii) a metal, agricultural commodity, 

7 or crude oil or gasoline commodity of any 

8 grade, except as used as fuel for electric 

9 energy generation; and 

10 ‘‘(C) is associated with— 

11 ‘‘(i) the generation, production, pur12 chase, or sale of natural gas or electric en13 ergy, the supply of natural gas or electric 

14 energy to a utility, or the delivery of nat15 ural gas or electric energy service to utility 

16 customers; 

17 ‘‘(ii) all fuel supply for the facilities or 

18 operations of a utility; 

19 ‘‘(iii) compliance with an electric sys20 tem reliability obligation; 

21 ‘‘(iv) compliance with an energy, en22 ergy efficiency, conservation, or renewable 

23 energy or environmental statute, regula24 tion, or government order applicable to a 

25 utility; or 


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1 ‘‘(v) any other electric energy or nat2 ural gas swap to which a utility is a 

3 party.’’. 

4 Subtitle E—End-User Regulatory 

5 Relief 

6 SEC. 351. END-USERS NOT TREATED AS FINANCIAL ENTI7 TIES. 

8 (a) IN GENERAL.—Section 2(h)(7)(C)(iii) of the 

9 Commodity Exchange Act (7 U.S.C. 2(h)(7)(C)(iii)) is 

10 amended to read as follows: 

11 ‘‘(iii) LIMITATION.—Such definition 

12 shall not include an entity— 

13 ‘‘(I) whose primary business is 

14 providing financing, and who uses de15 rivatives for the purpose of hedging 

16 underlying commercial risks related to 

17 interest rate and foreign currency ex18 posures, 90 percent or more of which 

19 arise from financing that facilitates 

20 the purchase or lease of products, 90 

21 percent or more of which are manu22 factured by the parent company or 

23 another subsidiary of the parent com24 pany; or 


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1 ‘‘(II) who is not supervised by a 

2 prudential regulator, and is not de3 scribed in any of subclauses (I) 

4 through (VII) of clause (i), and— 

5 ‘‘(aa) is a commercial mar6 ket participant and is considered 

7 a financial entity under clause 

8 (i)(VIII) because the entity pre9 dominantly engages in physical 

10 delivery contracts; or 

11 ‘‘(bb) enters into swaps, 

12 contracts for future delivery, and 

13 other derivatives on behalf of, or 

14 to hedge or mitigate the commer15 cial risk of, whether directly or in 

16 the aggregate, affiliates that are 

17 not so supervised or described.’’. 

18 (b) COMMERCIAL MARKET PARTICIPANT DE19 FINED.— 

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

21 U.S.C. 1a), as amended by section 343(b) of this 

22 Act, is amended by redesignating paragraphs (8) 

23 through (52) as paragraphs (9) through (53), re24 spectively, and by inserting after paragraph (6) the 

25 following: 


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1 ‘‘(7) COMMERCIAL MARKET PARTICIPANT.—The 

2 term ‘commercial market participant’ means any 

3 producer, processor, merchant, or commercial user 

4 of an exempt or agricultural commodity, or the prod5 ucts or byproducts of such a commodity.’’. 

6 (2) CONFORMING AMENDMENTS.— 

7 (A) Section 1a of such Act (7 U.S.C. 1a) 

8 is amended— 

9 (i) in subparagraph (A) of paragraph 

10 (18) (as so redesignated by paragraph (1) 

11 of this subsection), in the matter preceding 

12 clause (i), by striking ‘‘(18)(A)’’ and in13 serting ‘‘(19)(A)’’; and 

14 (ii) in subparagraph (A)(vii) of para15 graph (19) (as so redesignated by para16 graph (1) of this subsection), in the matter 

17 following subclause (III), by striking 

18 ‘‘(17)(A)’’ and inserting ‘‘(18)(A)’’. 

19 (B) Section 4(c)(1)(A)(i)(I) of such Act (7 

20 U.S.C. 6(c)(1)(A)(i)(I)) is amended by striking 

21 ‘‘(7), paragraph (18)(A)(vii)(III), paragraphs 

22 (23), (24), (31), (32), (38), (39), (41), (42), 

23 (46), (47), (48), and (49)’’ and inserting ‘‘(8), 

24 paragraph (19)(A)(vii)(III), paragraphs (24), 


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1 (25), (32), (33), (39), (40), (42), (43), (47), 

2 (48), (49), and (50)’’. 

3 (C) Section 4q(a)(1) of such Act (7 U.S.C. 

4 6o–1(a)(1)) is amended by striking ‘‘1a(9)’’ and 

5 inserting ‘‘1a(10)’’. 

6 (D) Section 4s(f)(1)(D) of such Act (7 

7 U.S.C. 6s(f)(1)(D)) is amended by striking 

8 ‘‘1a(47)(A)(v)’’ and inserting ‘‘1a(48)(A)(v)’’. 

9 (E) Section 4s(h)(5)(A)(i) of such Act (7 

10 U.S.C. 6s(h)(5)(A)(i)) is amended by striking 

11 ‘‘1a(18)’’ and inserting ‘‘1a(19)’’. 

12 (F) Section 4t(b)(1)(C) of such Act (7 

13 U.S.C. 6t(b)(1)(C)) is amended by striking 

14 ‘‘1a(47)(A)(v)’’ and inserting ‘‘1a(48)(A)(v)’’. 

15 (G) Section 5(d)(23) of such Act (7 U.S.C. 

16 7(d)(23)) is amended by striking 

17 ‘‘1a(47)(A)(v)’’ and inserting ‘‘1a(48)(A)(v)’’. 

18 (H) Section 5(e)(1) of such Act (7 U.S.C. 

19 7(e)(1)) is amended by striking ‘‘1a(9)’’ and in20 serting ‘‘1a(10)’’. 

21 (I) Section 5b(k)(3)(A) of such Act (7 

22 U.S.C. 7a–1(k)(3)(A)) is amended by striking 

23 ‘‘1a(47)(A)(v)’’ and inserting ‘‘1a(48)(A)(v)’’. 


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1 (J) Section 5c(c)(4)(B) of such Act (7 

2 U.S.C. 7a–2(c)(4)(B)) is amended by striking 

3 ‘‘1a(10)’’ and inserting ‘‘1a(11)’’. 

4 (K) Section 5h(f)(10)(A)(iii) of such Act 

5 (7 U.S.C. 7b–3(f)(10)(A)(iii)) is amended by 

6 striking ‘‘1a(47)(A)(v)’’ and inserting 

7 ‘‘1a(48)(A)(v)’’. 

8 (L) Section 21(f)(4)(C) of such Act (7 

9 U.S.C. 24a(f)(4)(C)) is amended by striking 

10 ‘‘1a(48)’’ and inserting ‘‘1a(49)’’. 

11 SEC. 352. REPORTING OF ILLIQUID SWAPS SO AS TO NOT 

12 DISADVANTAGE CERTAIN NON-FINANCIAL 

13 END-USERS. 

14 Section 2(a)(13) of the Commodity Exchange Act (7 

15 U.S.C. 2(a)(13)) is amended— 

16 (1) in subparagraph (C), by striking ‘‘The 

17 Commission’’ and inserting ‘‘Except as provided in 

18 subparagraph (D), the Commission’’; and 

19 (2) by redesignating subparagraphs (D) 

20 through (G) as subparagraphs (E) through (H), re21 spectively, and inserting after subparagraph (C) the 

22 following: 

23 ‘‘(D) REQUIREMENTS FOR SWAP TRANS24 ACTIONS IN ILLIQUID MARKETS.—Notwith25 standing subparagraph (C): 


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1 ‘‘(i) The Commission shall provide by 

2 rule for the public reporting of swap trans3 actions, including price and volume data, 

4 in illiquid markets that are not cleared and 

5 entered into by a non-financial entity that 

6 is hedging or mitigating commercial risk in 

7 accordance with subsection (h)(7)(A). 

8 ‘‘(ii) The Commission shall ensure 

9 that the swap transaction information re10 ferred to in clause (i) of this subparagraph 

11 is available to the public no sooner than 30 

12 days after the swap transaction has been 

13 executed or at such later date as the Com14 mission determines appropriate to protect 

15 the identity of participants and positions in 

16 illiquid markets and to prevent the elimi17 nation or reduction of market liquidity. 

18 ‘‘(iii) In this subparagraph, the term 

19 ‘illiquid markets’ means any market in 

20 which the volume and frequency of trading 

21 in swaps is at such a level as to allow iden22 tification of individual market partici23 pants.’’. 


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1 SEC. 353. RELIEF FOR GRAIN ELEVATOR OPERATORS, 

2 FARMERS, AGRICULTURAL COUNTERPAR3 TIES, AND COMMERCIAL MARKET PARTICI4 PANTS. 

5 The Commodity Exchange Act (7 U.S.C. 1 et seq.) 

6 is amended by inserting after section 4t the following: 

7 ‘‘SEC. 4u. RECORDKEEPING REQUIREMENTS APPLICABLE 

8 TO NON-REGISTERED MEMBERS OF CERTAIN 

9 REGISTERED ENTITIES. 

10 ‘‘Except as provided in section 4(a)(3), a member of 

11 a designated contract market or a swap execution facility 

12 that is not registered with the Commission and not re13 quired to be registered with the Commission in any capac14 ity shall satisfy the recordkeeping requirements of this Act 

15 and any recordkeeping rule, order, or regulation under 

16 this Act by maintaining a written record of each trans17 action in a contract for future delivery, option on a future, 

18 swap, swaption, trade option, or related cash or forward 

19 transaction. The written record shall be sufficient if it in20 cludes the final agreement between the parties and the 

21 material economic terms of the transaction and is identifi22 able and searchable by transaction.’’. 


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1 SEC. 354. RELIEF FOR END-USERS WHO USE PHYSICAL 

2 CONTRACTS WITH VOLUMETRIC 

3 OPTIONALITY. 

4 Section 1a(47)(B)(ii) of the Commodity Exchange 

5 Act (7 U.S.C. 1a(47)(B)(ii)) is amended to read as fol6 lows: 

7 ‘‘(ii) any purchase or sale of a non8 financial commodity or security for de9 ferred shipment or delivery, so long as the 

10 transaction is intended to be physically set11 tled, including any stand-alone or embed12 ded option— 

13 ‘‘(I) for which exercise results in 

14 a physical delivery obligation; 

15 ‘‘(II) that cannot be severed or 

16 marketed separately from the overall 

17 transaction for the purpose of finan18 cial settlement; and 

19 ‘‘(III) for which both parties are 

20 commercial market participants;’’. 

21 SEC. 355. COMMISSION VOTE REQUIRED BEFORE AUTO22 MATIC CHANGE OF SWAP DEALER DE MINI23 MIS LEVEL. 

24 Section 1a(49)(D) of the Commodity Exchange Act 

25 (7 U.S.C. 1a(49)(D)) is amended— 


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1 (1) by striking all that precedes ‘‘shall exempt’’ 

2 and inserting the following: 

3 ‘‘(D) DE MINIMIS EXCEPTION.— 

4 ‘‘(i) IN GENERAL.—The Commission’’; 

5 and 

6 (2) by adding after and below the end the fol7 lowing new clause: 

8 ‘‘(ii) SPECIAL RULE.—The de minimis 

9 quantity of swap dealing as described in 

10 clause (i) that is currently set at a quan11 tity of $8,000,000,000 shall only be 

12 amended or reduced through a new affirm13 ative action of the Commission undertaken 

14 by rule or regulation.’’. 

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

16 DEALERS. 

17 (a) COMMODITY EXCHANGE ACT.—Section 4s(e) of 

18 the Commodity Exchange Act (7 U.S.C. 6s(e)) is amend19 ed— 

20 (1) in paragraph (2)(B), by striking ‘‘shall’’ 

21 and inserting the following: ‘‘and the Securities and 

22 Exchange Commission, in consultation with the pru23 dential regulators, shall jointly’’; and 

24 (2) in paragraph (3)(D)— 


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1 (A) in clause (ii), by striking ‘‘shall, to the 

2 maximum extent practicable,’’ and inserting 

3 ‘‘shall’’; and 

4 (B) by adding at the end the following: 

5 ‘‘(iii) FINANCIAL MODELS.—To the 

6 extent that swap dealers and major swap 

7 participants that are banks are permitted 

8 to use financial models approved by the 

9 prudential regulators or the Securities and 

10 Exchange Commission to calculate min11 imum capital requirements and minimum 

12 initial and variation margin requirements, 

13 including the use of non-cash collateral, 

14 the Commission shall, in consultation with 

15 the prudential regulators and the Securi16 ties and Exchange Commission, permit the 

17 use of comparable financial models by 

18 swap dealers and major swap participants 

19 that are not banks.’’. 

20 (b) SECURITIES EXCHANGE ACT OF 1934.—Section 

21 15F(e) of the Securities Exchange Act of 1934 (15 U.S.C. 

22 78o–10(e)) is amended— 

23 (1) in paragraph (2)(B), by striking ‘‘shall’’ 

24 and inserting the following: ‘‘and the Commodity 


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1 Futures Trading Commission, in consultation with 

2 the prudential regulators, shall jointly’’; and 

3 (2) in paragraph (3)(D)— 

4 (A) in clause (ii), by striking ‘‘shall, to the 

5 maximum extent practicable,’’ and inserting 

6 ‘‘shall’’; and 

7 (B) by adding at the end the following: 

8 ‘‘(iii) FINANCIAL MODELS.—To the 

9 extent that security-based swap dealers 

10 and major security-based swap participants 

11 that are banks are permitted to use finan12 cial models approved by the prudential reg13 ulators or the Commodity Futures Trading 

14 Commission to calculate minimum capital 

15 requirements and minimum initial and var16 iation margin requirements, including the 

17 use of non-cash collateral, the Commission 

18 shall, in consultation with the Commodity 

19 Futures Trading Commission, permit the 

20 use of comparable financial models by se21 curity-based swap dealers and major secu22 rity-based swap participants that are not 

23 banks.’’. 


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1 SEC. 357. HARMONIZATION WITH THE JUMPSTART OUR 

2 BUSINESS STARTUPS ACT. 

3 Within 90 days after the date of the enactment of 

4 this Act, the Commodity Futures Trading Commission 

5 shall— 

6 (1) revise section 4.7(b) of title 17, Code of 

7 Federal Regulations, in the matter preceding para8 graph (1), to read as follows: 

9 ‘‘(b) Relief available to commodity pool operators. 

10 Upon filing the notice required by paragraph (d) of this 

11 section, and subject to compliance with the conditions 

12 specified in paragraph (d) of this section, any registered 

13 commodity pool operator who sells participations in a pool 

14 solely to qualified eligible persons in an offering which 

15 qualifies for exemption from the registration requirements 

16 of the Securities Act pursuant to section 4(2) of that Act 

17 or pursuant to Regulation S, 17 CFR 230.901 et seq., 

18 and any bank registered as a commodity pool operator in 

19 connection with a pool that is a collective trust fund whose 

20 securities are exempt from registration under the Securi21 ties Act pursuant to section 3(a)(2) of that Act and are 

22 sold solely to qualified eligible persons, may claim any or 

23 all of the following relief with respect to such pool:’’; and 

24 (2) revise section 4.13(a)(3)(i) of such title to 

25 read as follows: 


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1 ‘‘(i) Interests in the pool are exempt from registration 

2 under the Securities Act of 1933, and such interests are 

3 offered and sold pursuant to section 4 of the Securities 

4 Act of 1933 and the regulations thereunder;’’. 

5 SEC. 358. BONA FIDE HEDGE DEFINED TO PROTECT END6 USER RISK MANAGEMENT NEEDS. 

7 Section 4a(c) of the Commodity Exchange Act (7 

8 U.S.C. 6a(c)) is amended— 

9 (1) in paragraph (1)— 

10 (A) by striking ‘‘may’’ and inserting 

11 ‘‘shall’’; and 

12 (B) by striking ‘‘future for which’’ and in13 serting ‘‘future, to be determined by the Com14 mission, for which either an appropriate swap is 

15 available or’’; 

16 (2) in paragraph (2)— 

17 (A) in the matter preceding subparagraph 

18 (A), by striking ‘‘subsection (a)(2)’’ and all that 

19 follows through ‘‘position as’’ and inserting 

20 ‘‘paragraphs (2) and (5) of subsection (a) for 

21 swaps, contracts of sale for future delivery, or 

22 options on the contracts or commodities, a bona 

23 fide hedging transaction or position is’’; and 


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1 (B) in subparagraph (A)(ii), by striking 

2 ‘‘of risks’’ and inserting ‘‘or management of 

3 current or anticipated risks’’; and 

4 (3) by adding at the end the following: 

5 ‘‘(3) The Commission may further define, by 

6 rule or regulation, what constitutes a bona fide 

7 hedging transaction, provided that the rule or regu8 lation is consistent with the requirements of sub9 paragraphs (A) and (B) of paragraph (2).’’. 

10 SEC. 359. CROSS-BORDER REGULATION OF DERIVATIVES 

11 TRANSACTIONS. 

12 (a) JOINT RULEMAKING REQUIRED.— 

13 (1) IN GENERAL.—Not later than 270 days 

14 after the date of enactment of this Act, the Securi15 ties and Exchange Commission and the Commodity 

16 Futures Trading Commission shall jointly issue rules 

17 setting forth the application of United States swaps 

18 requirements of the Securities Exchange Act of 

19 1934 and the Commodity Exchange Act relating to 

20 cross-border swaps and security-based swaps trans21 actions involving U.S. persons or non-U.S. persons. 

22 (2) CONSTRUCTION.—The rules required under 

23 paragraph (1) shall be identical, notwithstanding 

24 any difference in the authorities granted the Com25 missions in section 30(c) of the Securities Exchange 


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1 Act of 1934 (15 U.S.C. 78dd(c)) and section 2(i) of 

2 the Commodity Exchange Act (7 U.S.C. 2(i)), re3 spectively, except to the extent necessary to accom4 modate differences in other underlying statutory re5 quirements under such Acts, and the rules there6 under. 

7 (b) CONSIDERATIONS.—The Commissions shall joint8 ly issue rules that address— 

9 (1) the nature of the connections to the United 

10 States that require a non-U.S. person to register as 

11 a swap dealer, major swap participant, security12 based swap dealer, or major security-based swap 

13 participant under each Commission’s respective Acts 

14 and the regulations issued under such Acts; 

15 (2) which of the United States swaps require16 ments shall apply to the swap and security-based 

17 swap activities of non-U.S. persons, U.S. persons, 

18 and their branches, agencies, subsidiaries, and affili19 ates outside of the United States and the extent to 

20 which such requirements shall apply; and 

21 (3) the circumstances under which a non-U.S. 

22 person in compliance with the regulatory require23 ments of a foreign jurisdiction shall be exempt from 

24 United States swaps requirements. 


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1 (c) RULE IN ACCORDANCE WITH APA REQUIRED.— 

2 No guidance, memorandum of understanding, or any such 

3 other agreement may satisfy the requirement to issue a 

4 joint rule from the Commissions in accordance with sec5 tion 553 of title 5, United States Code. 

6 (d) GENERAL APPLICATION TO COUNTRIES OR AD7 MINISTRATIVE REGIONS HAVING NINE LARGEST MAR8 KETS.— 

9 (1) GENERAL APPLICATION.—In issuing rules 

10 under this section, the Commissions shall provide 

11 that a non-U.S. person in compliance with the swaps 

12 regulatory requirements of a country or administra13 tive region that has one of the nine largest combined 

14 swap and security-based swap markets by notional 

15 amount in the calendar year preceding issuance of 

16 such rules, or other foreign jurisdiction as jointly de17 termined by the Commissions, shall be exempt from 

18 United States swaps requirements in accordance 

19 with the schedule set forth in paragraph (2), unless 

20 the Commissions jointly determine that the regu21 latory requirements of such country or administra22 tive region or other foreign jurisdiction are not 

23 broadly equivalent to United States swaps require24 ments. 


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1 (2) EFFECTIVE DATE SCHEDULE.—The exemp2 tion described in paragraph (1) and set forth under 

3 the rules required by this section shall apply to per4 sons or transactions relating to or involving— 

5 (A) countries or administrative regions de6 scribed in such paragraph, or any other foreign 

7 jurisdiction as jointly determined by the Com8 missions, accounting for the five largest com9 bined swap and security-based swap markets by 

10 notional amount in the calendar year preceding 

11 issuance of such rules, on the date on which 

12 final rules are issued under this section; and 

13 (B) the remaining countries or administra14 tive regions described in such paragraph, and 

15 any other foreign jurisdiction as jointly deter16 mined by the Commissions, 1 year after the 

17 date on which such rules are issued. 

18 (3) CRITERIA.—In such rules, the Commissions 

19 shall jointly establish criteria for determining that 

20 one or more categories of regulatory requirements of 

21 a country or administrative region described in para22 graph (1) or other foreign jurisdiction is not broadly 

23 equivalent to United States swaps requirements and 

24 shall jointly determine the appropriate application of 

25 certain United States swap requirements to persons 


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1 or transactions relating to or involving such country 

2 or administrative region or other foreign jurisdiction. 

3 Such criteria shall include the scope and objectives 

4 of the regulatory requirements of a country or ad5 ministrative region described in paragraph (1) or 

6 other foreign jurisdiction as well as the effectiveness 

7 of the supervisory compliance program administered, 

8 and the enforcement authority exercised, by such 

9 country or administrative region or other foreign ju10 risdiction, and such other factors as the Commis11 sions, by rule, jointly determine to be necessary or 

12 appropriate in the public interest. 

13 (4) REQUIRED ASSESSMENT.—Beginning on the 

14 date on which final rules are issued under this sec15 tion, the Commissions shall begin to jointly assess 

16 the regulatory requirements of countries or adminis17 trative regions described in paragraph (1), as the 

18 Commissions jointly determine appropriate, in ac19 cordance with the criteria established pursuant to 

20 this subsection, to determine if one or more cat21 egories of regulatory requirements of such a country 

22 or administrative region or other foreign jurisdiction 

23 is not broadly equivalent to United States swaps re24 quirements. 


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1 (e) REPORT TO CONGRESS.—If the Commissions 

2 make the joint determination described in subsection 

3 (d)(1) that the regulatory requirements of a country or 

4 administrative region described in such subsection or other 

5 foreign jurisdiction are not broadly equivalent to United 

6 States swaps requirements, the Commissions shall articu7 late the basis for such a determination in a written report 

8 transmitted to the Committee on Financial Services and 

9 the Committee on Agriculture of the House of Representa10 tives and the Committee on Banking, Housing, and Urban 

11 Affairs and the Committee on Agriculture, Nutrition, and 

12 Forestry of the Senate within 30 days of the determina13 tion. The determination shall not be effective until the 

14 transmission of such report. 

15 (f) DEFINITIONS.—As used in this Act and for pur16 poses of the rules issued pursuant to this Act, the fol17 lowing definitions apply: 

18 (1) The term ‘‘U.S. person’’— 

19 (A) means— 

20 (i) any natural person resident in the 

21 United States; 

22 (ii) any partnership, corporation, 

23 trust, or other legal person organized or 

24 incorporated under the laws of the United 


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1 States or having its principal place of busi2 ness in the United States; 

3 (iii) any account (whether discre4 tionary or non-discretionary) of a U.S. per5 son; and 

6 (iv) any other person as the Commis7 sions may further jointly define to more ef8 fectively carry out the purposes of this Act; 

9 and 

10 (B) does not include the International 

11 Monetary Fund, the International Bank for Re12 construction and Development, the Inter-Amer13 ican Development Bank, the Asian Development 

14 Bank, the African Development Bank, the 

15 United Nations, their agencies and pension 

16 plans, and any other similar international orga17 nizations and their agencies and pension plans. 

18 (2) The term ‘‘United States swaps require19 ments’’ means the provisions relating to swaps and 

20 security-based swaps contained in the Commodity 

21 Exchange Act (7 U.S.C. 1a et seq.) and the Securi22 ties Exchange Act of 1934 (15 U.S.C. 78a et seq.) 

23 that were added by title VII of the Dodd-Frank Wall 

24 Street Reform and Consumer Protection Act (15 

25 U.S.C. 8301 et seq.) and any rules or regulations 


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1 prescribed by the Securities and Exchange Commis2 sion and the Commodity Futures Trading Commis3 sion pursuant to such provisions. 

4 (g) CONFORMING AMENDMENTS.— 

5 (1) SECURITIES EXCHANGE ACT OF 1934.— 

6 Section 36(c) of the Securities Exchange Act of 

7 1934 (15 U.S.C. 78mm(c)) is amended by inserting 

8 ‘‘or except as necessary to effectuate the purposes of 

9 the Customer Protection and End-User Relief Act,’’ 

10 after ‘‘to grant exemptions,’’. 

11 (2) COMMODITY EXCHANGE ACT.—Section 

12 4(c)(1)(A) of the Commodity Exchange Act (7 

13 U.S.C. 6(c)(1)(A)) is amended by inserting ‘‘or ex14 cept as necessary to effectuate the purposes of the 

15 Customer Protection and End-User Relief Act,’’ 

16 after ‘‘to grant exemptions,’’. 

17 SEC. 360. REPORT ON FOREIGN BOARDS OF TRADE. 

18 Within 1 year after the date of the enactment of this 

19 Act, the Commodity Futures Trading Commission shall 

20 prepare and submit to the Committee on Agriculture of 

21 the House of Representatives and the Committee on Agri22 culture, Nutrition, and Forestry of the Senate a written 

23 report reviewing the standards and rules of foreign boards 

24 of trade related to the physical delivery of base metals, 

25 including warehousing facilities, as compared to the standVerDate Mar 15 2010 00:38 Jun 26, 2014 Jkt 039200 PO 00000 Frm 00057 Fmt 6652 Sfmt 6201 E:\BILLS\H4413.RFS H4413

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1 ards and rules for domestic designated contract markets 

2 and related warehouses for base metals. 

3 SEC. 361. TREATMENT OF CERTAIN FUNDS. 

4 (a) AMENDMENT TO THE DEFINITION OF COM5 MODITY POOL OPERATOR.—Section 1a(11) of the Com6 modity Exchange Act (7 U.S.C. 1a(11)) is amended by 

7 adding at the end the following: 

8 ‘‘(C)(i) The term ‘commodity pool oper9 ator’ does not include a person who serves as 

10 an investment adviser to an investment com11 pany registered pursuant to section 8 of the In12 vestment Company Act of 1940 or a subsidiary 

13 of such a company, if the investment company 

14 or subsidiary invests, reinvests, owns, holds, or 

15 trades in commodity interests limited to only fi16 nancial commodity interests. 

17 ‘‘(ii) For purposes of this subparagraph 

18 only, the term ‘financial commodity interest’ 

19 means a futures contract, an option on a fu20 tures contract, or a swap, involving a com21 modity that is not an exempt commodity or an 

22 agricultural commodity, including any index of 

23 financial commodity interests, whether cash set24 tled or involving physical delivery. 


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1 ‘‘(iii) For purposes of this subparagraph 

2 only, the term ‘commodity’ does not include a 

3 security issued by a real estate investment 

4 trust, business development company, or issuer 

5 of asset-backed securities, including any index 

6 of such securities.’’. 

7 (b) AMENDMENT TO THE DEFINITION OF COM8 MODITY TRADING ADVISOR.—Section 1a(12) of such Act 

9 (7 U.S.C. 1a(12)) is amended by adding at the end the 

10 following: 

11 ‘‘(E) The term ‘commodity trading advisor’ 

12 does not include a person who serves as an in13 vestment adviser to an investment company reg14 istered pursuant to section 8 of the Investment 

15 Company Act of 1940 or a subsidiary of such 

16 a company, if the commodity trading advice re17 lates only to a financial commodity interest, as 

18 defined in paragraph (11)(C)(ii) of this section. 

19 For purposes of this subparagraph only, the 

20 term ‘commodity’ does not include a security 

21 issued by a real estate investment trust, busi22 ness development company, or issuer of asset23 backed securities, including any index of such 

24 securities.’’. 


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1 Subtitle F—Effective Date 

2 SEC. 371. EFFECTIVE DATE. 

3 Except as otherwise provided in this title, the amend4 ments made by this title shall take effect as if enacted 

5 on July 21, 2010. 

Passed the House of Representatives June 24, 2014. 

Attest: KAREN L. HAAS, 

Clerk. 


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