II 

109TH CONGRESS 

1ST SESSION S. 509

To improve the operation of energy markets. 

IN THE SENATE OF THE UNITED STATES 

MARCH 3, 2005

Mrs. FEINISTEIN (for herself, Mr. LEVIN, Mr. WYDEN, Mr. HARKIN, and Ms. 

CANTWELL) introduced the following bill; which was read twice and referred to the Committee on Agriculture, Nutrition, and Forestry 

A BILL

To improve the operation of energy markets.

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

5 ‘‘Energy Markets Improvement Act of 2005’’. 

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

7 this Act is as follows:

Sec. 1. Short title; table of contents. 

TITLE I—TRANSPARENCY IN WHOLESALE ELECTRICITY 

MARKETS 

Sec. 101. Market transparency. 

Sec. 102. Round trip trading. 

Sec. 103. Enforcement. 

Sec. 104. Refund effective date. 
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Sec. 105. Discovery and evidentiary hearings under the Federal Power Act. 

TITLE II—MARKET MANIPULATION 

Sec. 201. Prohibition of market manipulation. 

TITLE III—ENERGY MARKET OVERSIGHT 

Sec. 301. Over-the-counter transactions in energy commodities. 

Sec. 302. Electronic trading facilities for energy commodities. 

Sec. 303. No effect on other authority. 

Sec. 304. Prohibition of fraudulent transactions. 

Sec. 305. Criminal and civil penalties. 

Sec. 306. Conforming amendments.

1 TITLE I—TRANSPARENCY IN 

2 WHOLESALE ELECTRICITY 

3 MARKETS 

4 SEC. 101. MARKET TRANSPARENCY. 

5 Part II of the Federal Power Act (16 U.S.C. 824 et 

6 seq.) is amended by adding at the end the following: 

7 ‘‘SEC. 215. MARKET TRANSPARENCY. 

8 ‘‘(a) IN GENERAL.—Not later than 180 days after 

9 the date of enactment of this section, the Commission 

10 shall promulgate regulations establishing an electronic in11 formation system to provide the Commission and the pub12 lic with access to such information as is appropriate to 

13 facilitate price transparency and participation in markets 

14 subject to the jurisdiction of the Commission. 

15 ‘‘(b) INFORMATION TO BE MADE AVAILABLE.—

16 ‘‘(1) IN GENERAL.—The system under sub17 section (a) shall provide information about the avail18 ability and market price of wholesale electric energy 

19 and transmission services to the Commission, State 
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1 commissions, buyers and sellers of wholesale electric 

2 energy, users of transmission services, and the pub3 lic. 

4 ‘‘(2) PROTECTION OF CONSUMERS AND COM5 PETITIVE MARKETS.—In determining the informa6 tion to be made available under the system and the 

7 time at which to make such information available, 

8 the Commission shall seek to ensure that consumers 

9 and competitive markets are protected from false or 

10 misleading information and from the adverse effects 

11 of potential collusion or other anticompetitive behav12 iors that can be facilitated by untimely public disclo13 sure of transaction-specific information. 

14 ‘‘(c) AUTHORITY TO OBTAIN INFORMATION.—The 

15 Commission shall have authority to obtain information de16 scribed in subsections (a) and (b) from any electric utility 

17 or transmitting utility (including any entity described in 

18 section 201(f)). 

19 ‘‘(d) EXEMPTION.—The Commission shall exempt 

20 from disclosure information that the Commission deter21 mines would, if disclosed—

22 ‘‘(1) be detrimental to the operation of an effec23 tive market; or 

24 ‘‘(2) jeopardize system security. 
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1 ‘‘(e) APPLICABILITY.—The system under subsection 

2 (a) shall not apply to an entity described in section 

3 212(k)(2)(B) with respect to transactions for the purchase 

4 or sale of wholesale electric energy and transmission serv5 ices within the area described in section 212(k)(2)(A).’’. 

6 SEC. 102. ROUND TRIP TRADING. 

7 Part II of the Federal Power Act (16 U.S.C. 824 et 

8 seq.) (as amended by section 101) is amended by adding 

9 at the end the following: 

10 ‘‘SEC. 216. ROUND TRIP TRADING. 

11 ‘‘(a) PROHIBITION.—It shall be unlawful for any per12 son or entity (including an entity described in section 

13 201(f)) knowingly to enter into any contract or other ar14 rangement to execute a round trip trade. 

15 ‘‘(b) DEFINITION OF ROUND TRIP TRADE.—In this 

16 section, the term ‘round trip trade’ means a transaction 

17 (or combination of transactions) in which a person or enti18 ty, with the intent to affect reported revenues, trading vol19 umes, or prices—

20 ‘‘(1) enters into a contract or other arrange21 ment to purchase from, or sell to, any other person 

22 or entity electric energy at wholesale; and 

23 ‘‘(2) simultaneously with entering into the con24 tract or arrangement described in paragraph (1), ar25 ranges a financially offsetting trade with the other 
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1 person or entity for the same electric energy at sub2 stantially the same location, price, quantity, and 

3 terms so that, collectively, the purchase and sale 

4 transactions in themselves result in a de minimis or 

5 no financial gain or loss.’’. 

6 SEC. 103. ENFORCEMENT. 

7 (a) COMPLAINTS.—Section 306 of the Federal Power 

8 Act (16 U.S.C. 825e) is amended—

9 (1) in the first sentence—

10 (A) by inserting ‘‘(including an electric 

11 utility)’’ after ‘‘Any person’’; and 

12 (B) by inserting ‘‘, transmitting utility,’’ 

13 after ‘‘licensee’’; and 

14 (2) in the second sentence, by inserting ‘‘, 

15 transmitting utility,’’ after ‘‘licensee’’. 

16 (b) INVESTIGATIONS.—Section 307(a) of the Federal 

17 Power Act (16 U.S.C. 825f(a)) is amended in the first 

18 sentence by inserting ‘‘(including a transmitting utility)’’ 

19 after ‘‘any person’’. 

20 (c) REVIEW OF COMMISSION ORDERS.—Section 

21 313(a) of the Federal Power Act (16 U.S.C. 825l) is 

22 amended in the first sentence by inserting ‘‘(including an 

23 electric utility)’’ after ‘‘Any person’’. 

24 (d) CRIMINAL PENALTIES.—Section 316 of the Fed25 eral Power Act (16 U.S.C. 825o) is amended—
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1 (1) in subsection (a)—

2 (A) by striking ‘‘$5,000’’ and inserting 

3 ‘‘$1,000,000’’; and 

4 (B) by striking ‘‘two years’’ and inserting 

5 ‘‘5 years’’; 

6 (2) in subsection (b), by striking ‘‘$500’’ and 

7 inserting ‘‘$25,000’’; and 

8 (3) by striking subsection (c). 

9 (e) CIVIL PENALTIES.—Section 316A of the Federal 

10 Power Act (16 U.S.C. 825o–1) is amended—

11 (1) in subsections (a) and (b), by striking ‘‘sec12 tion 211, 212, 213, or 214’’ each place it appears 

13 and inserting ‘‘part II’’; and 

14 (2) in subsection (b), by striking ‘‘$10,000’’ 

15 and inserting ‘‘$1,000,000’’. 

16 (f) GENERAL PENALTIES.—Section 21 of the Natural 

17 Gas Act (15 U.S.C. 717t) is amended—

18 (1) in subsection (a), by striking ‘‘$5,000’’ and 

19 inserting ‘‘$1,000,000’’, and by striking ‘‘two years’’ 

20 and inserting ‘‘5 years’’; and 

21 (2) in subsection (b), by striking ‘‘$500’’ and 

22 inserting ‘‘$50,000’’. 

23 SEC. 104. REFUND EFFECTIVE DATE. 

24 Section 206(b) of the Federal Power Act (16 U.S.C. 

25 824e(b)) is amended—
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1 (1) in the second sentence, by striking ‘‘the 

2 date 60 days after the filing of such complaint nor 

3 later than 5 months after the expiration of such 60-

4 day period’’ and inserting ‘‘the date of the filing of 

5 the complaint nor later than 5 months after the fil6 ing of the complaint’’; 

7 (2) in the third sentence—

8 (A) by striking ‘‘60 days after the’’ and in9 serting ‘‘of’’; and 

10 (B) by striking ‘‘expiration of such 60-day 

11 period’’ and inserting ‘‘publication date’’; and 

12 (3) by striking the fifth sentence and inserting 

13 the following: ‘‘If no final decision is rendered by the 

14 conclusion of the 180-day period that begins on the 

15 date of institution of a proceeding under this sec16 tion, the Commission shall state the reasons why the 

17 Commission has failed to do so and shall state its 

18 best estimate as to when the Commission reasonably 

19 expects to render a final decision.’’. 

20 SEC. 105. DISCOVERY AND EVIDENTIARY HEARINGS UNDER 

21 THE FEDERAL POWER ACT. 

22 The Federal Power Act is amended—

23 (1) in section 206 (16 U.S.C. 824e), by adding 

24 at the end the following: 
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1 ‘‘(e) DISCOVERY AND EVIDENTIARY HEARINGS.—On 

2 receipt of a complaint by a State or a State Commission 

3 under subsection (a), the Commission shall provide—

4 ‘‘(1) an opportunity for the State or the State 

5 Commission to conduct reasonable discovery; and 

6 ‘‘(2) on request of the State or the State Com7 mission and a showing of a dispute as to material 

8 facts, an evidentiary hearing.’’; and 

9 (2) in section 306 (16 U.S.C. 825e)—

10 (A) by inserting ‘‘(a) IN GENERAL.—’’ be11 fore ‘‘Any person’’; and 

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

13 ‘‘(b) DISCOVERY AND EVIDENTIARY HEARINGS.—On 

14 receipt of a complaint by a State or State Commission 

15 under this section, the Commission shall provide—

16 ‘‘(1) an opportunity for the State or the State 

17 Commission to conduct reasonable discovery; and 

18 ‘‘(2) on request of the State or the State Com19 mission and a showing of dispute as to material 

20 facts, an evidentiary hearing.’’. 
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1 TITLE II—MARKET 

2 MANIPULATION 

3 SEC. 201. PROHIBITION OF MARKET MANIPULATION. 

4 (a) IN GENERAL.—Part II of the Federal Power Act 

5 (as amended by section 102) is amended by adding at the 

6 end the following: 

7 ‘‘SEC. 217. PROHIBITION OF MARKET MANIPULATION. 

8 ‘‘(a) IN GENERAL.—It shall be unlawful for any per9 son, directly or indirectly, to knowingly use or employ, in 

10 connection with the purchase or sale of electric energy or 

11 the purchase or sale of transmission services subject to 

12 the jurisdiction of the Commission, any manipulative or 

13 deceptive device or contrivance to affect the price, avail14 ability, or reliability of the electric energy or transmission 

15 services. 

16 ‘‘(b) REGULATIONS.—The Commission may promul17 gate regulations as appropriate in the public interest or 

18 for the protection of electric ratepayers to enforce this sec19 tion.’’. 

20 (b) ADDITIONAL REMEDY FOR MARKET MANIPULA21 TION.—Section 206 of the Federal Power Act (16 U.S.C. 

22 824e) is amended by adding at the end the following: 

23 ‘‘(e) REMEDY FOR MARKET MANIPULATION.—If the 

24 Commission finds that a public utility has knowingly em25 ployed any manipulative or deceptive device or contrivance 
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1 in violation of this Act (including a regulation promul2 gated under this Act), the Commission may, in addition 

3 to any other remedy available under this Act, revoke the 

4 authority of the public utility to charge market-based 

5 rates.’’. 

6 TITLE III—ENERGY MARKET 

7 OVERSIGHT 

8 SEC. 301. OVER-THE-COUNTER TRANSACTIONS IN ENERGY 

9 COMMODITIES. 

10 (a) DEFINITIONS.—Section 1a of the Commodity Ex11 change Act (7 U.S.C. 1a) is amended by adding at the 

12 end the following: 

13 ‘‘(34) INCLUDED ENERGY TRANSACTION.—The 

14 term ‘included energy transaction’ means a contract, 

15 agreement, or transaction in an energy commodity 

16 that is—

17 ‘‘(A)(i) executed or traded on an electronic 

18 trading facility; and 

19 ‘‘(ii) entered into on a principal-to-prin20 cipal basis solely between persons that are eligi21 ble commercial entities at the time the persons 

22 enter into the agreement, contract, or trans23 action; or 

24 ‘‘(B)(i) executed or traded not on or 

25 through a trading facility; and
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1 ‘‘(ii) entered into solely between persons 

2 that are eligible contract participants at the 

3 time the persons enter into the agreement, con4 tract, or transaction, regardless of the means of 

5 execution of the agreement, contract, or trans6 action. 

7 ‘‘(35) ENERGY COMMODITY.—

8 ‘‘(A) IN GENERAL.—The term ‘energy 

9 commodity’ means a commodity (other than an 

10 excluded commodity, a metal, or an agricultural 

11 commodity) that is used as a source of energy. 

12 ‘‘(B) INCLUSIONS.—The term ‘energy com13 modity’ includes—

14 ‘‘(i) coal; 

15 ‘‘(ii) crude oil, gasoline, heating oil, 

16 and propane; 

17 ‘‘(iii) electricity; and 

18 ‘‘(iv) natural gas. 

19 ‘‘(36) ELECTRONIC ENERGY TRADING FACIL20 ITY.—The term ‘electronic energy trading facility’ 

21 means an electronic trading facility on or through 

22 which included energy transactions are traded or ex23 ecuted.’’. 
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1 (b) OFF-EXCHANGE TRANSACTIONS IN ENERGY

2 COMMODITIES.—Section 2(g) of the Commodity Exchange 

3 Act (7 U.S.C. 2(g)) is amended—

4 (1) by inserting ‘‘or an energy commodity’’ 

5 after ‘‘agricultural commodity’’; 

6 (2) by redesignating paragraphs (1) through 

7 (3) as subparagraphs (A) through (C), respectively; 

8 (3) by striking ‘‘No provision’’ and inserting 

9 the following: 

10 ‘‘(1) IN GENERAL.—No provision’’; and 

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

12 ‘‘(2) TRANSACTIONS IN ENERGY COMMOD13 ITIES.—

14 ‘‘(A) IN GENERAL.—Except as provided in 

15 subparagraphs (B) and (C) and subsection 

16 (h)(7), nothing in this Act applies to an in17 cluded energy transaction. 

18 ‘‘(B) PROHIBITED CONDUCT.—

19 ‘‘(i) IN GENERAL.—An included en20 ergy transaction shall be subject to—

21 ‘‘(I) sections 5b, 12(e)(2)(B), 

22 and 22(a)(4); and 

23 ‘‘(II) the prohibitions in sections 

24 4b, 4c(a), 4c(b), 4o, 6(c), 6(d), 6c, 6d, 

25 8a, and 9(a)(2). 
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1 ‘‘(ii) TRANSACTIONS EXEMPTED BY

2 COMMISSION ACTION.—Notwithstanding 

3 any exemption by the Commission under 

4 section 4(c), an included energy trans5 action shall be subject to the sections spec6 ified in clause (i) of this subparagraph, 

7 subparagraph (C), and subsection (h)(7). 

8 ‘‘(C) REPORTING AND RECORDKEEPING

9 REQUIREMENTS.—

10 ‘‘(i) IN GENERAL.—An eligible con11 tract participant that enters into or exe12 cutes an included energy transaction that 

13 performs, or together with other such 

14 transactions performs, a significant price 

15 discovery function in the cash market for 

16 an energy commodity or in any other mar17 ket for agreements, contracts, or trans18 actions relating to an energy commodity, 

19 or an eligible commercial entity that enters 

20 into or executes an included energy trans21 action described in section 1a(34)(A) 

22 shall—

23 ‘‘(I) provide to the Commission 

24 on a timely basis the information re25 quired under clause (ii); and 
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1 ‘‘(II)(aa) consistent with section 

2 4i, maintain books and records relat3 ing to each included energy trans4 action, for a period of at least 5 years 

5 after the date of the transaction, in 

6 such form as the Commission shall re7 quire; and 

8 ‘‘(bb) keep the books and records 

9 open to inspection by any representa10 tive of the Commission or the Attor11 ney General. 

12 ‘‘(ii) REQUIRED INFORMATION.—

13 ‘‘(I) IN GENERAL.—The Commis14 sion shall require that such informa15 tion regarding included energy trans16 actions be provided to the Commission 

17 as the Commission considers nec18 essary to assist in detecting and pre19 venting price manipulation. 

20 ‘‘(II) INFORMATION TO BE IN21 CLUDED.—Such information shall in22 clude information regarding large 

23 trading positions obtained through 1 

24 or more included energy transactions 

25 that involve—
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1 ‘‘(aa) substantial quantities 

2 of the commodity in the cash 

3 market; or 

4 ‘‘(bb) substantial positions, 

5 investments, or trades in agree6 ments or contracts related to en7 ergy commodities. 

8 ‘‘(III) MANNER OF COMPLI9 ANCE.—The Commission shall specify 

10 when and how such information shall 

11 be provided and maintained by eligible 

12 contract participants and eligible com13 mercial entities. 

14 ‘‘(IV) PRICE DISCOVERY TRANS15 ACTIONS.—

16 ‘‘(aa) IN GENERAL.—In 

17 specifying the information to be 

18 provided under this paragraph, 

19 the Commission shall identify the 

20 transactions or class of trans21 actions that the Commission con22 siders to perform a significant 

23 price discovery function. 

24 ‘‘(bb) CONSIDERATIONS.—In 

25 determining which included en-
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1 ergy transactions perform a sig2 nificant price discovery function, 

3 the Commission shall consider 

4 the extent to which—

5 ‘‘(AA) standardized 

6 agreements are used to exe7 cute the transactions; 

8 ‘‘(BB) the transactions 

9 involve standardized types or 

10 measures of a commodity; 

11 ‘‘(CC) the prices of the 

12 transactions are reported to 

13 third parties, published, or 

14 disseminated; 

15 ‘‘(DD) the prices of the 

16 transactions are referenced 

17 in other transactions; and 

18 ‘‘(EE) other factors 

19 considered appropriate by 

20 the Commission. 

21 ‘‘(V) PERSONS FILING.—

22 ‘‘(aa) IN GENERAL.—The 

23 Commission, in its discretion, 

24 may allow large trader position 

25 reports required to be provided 
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1 by an eligible commercial entity 

2 to be provided by an electronic 

3 energy trading facility if the eli4 gible commercial entity author5 izes the facility to provide such 

6 information on its behalf. 

7 ‘‘(bb) INFORMATION AND

8 ENFORCEMENT.—Nothing in an 

9 authorization under item (aa) 

10 shall impair the ability of the 

11 Commission to obtain informa12 tion from an eligible commercial 

13 entity or otherwise enforce this 

14 Act. 

15 ‘‘(VI) REGULATIONS.—Not later 

16 than 180 days after the date of enact17 ment of this paragraph, the Commis18 sion shall issue a notice of proposed 

19 rulemaking, and not later than 1 year 

20 after the date of enactment of this 

21 paragraph, the Commission shall pro22 mulgate final regulations, specifying 

23 the information to be provided and 

24 maintained under this subpara25 graph.’’.
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1 SEC. 302. ELECTRONIC TRADING FACILITIES FOR ENERGY 

2 COMMODITIES. 

3 Section 2(h) of the Commodity Exchange Act (7 

4 U.S.C. 2(h)) is amended—

5 (1) in paragraph (1), by inserting after ‘‘an ex6 empt commodity’’ the following: ‘‘other than an en7 ergy commodity’’; 

8 (2) in paragraph (3), by inserting after ‘‘an ex9 empt commodity’’ the following: ‘‘other than an en10 ergy commodity’’; and 

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

12 ‘‘(7) ENERGY TRANSACTIONS.—

13 ‘‘(A) IN GENERAL.—To the extent that the 

14 Commission determines to be appropriate under 

15 subparagraph (C), an electronic energy trading 

16 facility shall—

17 ‘‘(i) be subject to the requirements of 

18 section 5a, to the extent provided in sec19 tions 5a(g) and 5d; 

20 ‘‘(ii)(I) consistent with section 4i, 

21 maintain books and records relating to the 

22 business of the electronic energy trading 

23 facility, including books and records relat24 ing to each transaction in such form as the 

25 Commission may require; and 
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1 ‘‘(II) make the books and records re2 quired under this section available to rep3 resentatives of the Commission and the At4 torney General for inspection for a period 

5 of at least 5 years after the date of each 

6 included energy transaction; 

7 ‘‘(iii) make available to the public in8 formation on trading volumes, settlement 

9 prices, open interest (where applicable), 

10 and opening and closing ranges (or daily 

11 highs and lows, as appropriate) for in12 cluded energy transactions; and 

13 ‘‘(iv) provide the information to the 

14 Commission in such form and at such 

15 times as the Commission may require. 

16 ‘‘(B) APPLICABILITY OF OTHER PROVI17 SIONS.—

18 ‘‘(i) PARAGRAPH 5.—An electronic en19 ergy trading facility shall comply with 

20 paragraph (5). 

21 ‘‘(ii) PARAGRAPH 6.—Paragraph (6) 

22 shall apply with respect to a subpoena 

23 issued to any foreign person that the Com24 mission believes is conducting or has con-
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1 ducted transactions on or through an elec2 tronic energy trading facility. 

3 ‘‘(C) REGULATIONS.—Not later than 180 

4 days after the date of enactment of this para5 graph, the Commission shall issue a notice of 

6 proposed rulemaking, and not later than 1 year 

7 after the date of enactment of this paragraph, 

8 the Commission shall promulgate final regula9 tions, specifying the information to be provided, 

10 maintained, or made available to the public 

11 under subparagraphs (A) and (B). 

12 ‘‘(8) NONDISCLOSURE OF PROPRIETARY INFOR13 MATION.—In carrying out paragraph (7) and sub14 section (g)(2), the Commission shall not—

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

16 proprietary information; 

17 ‘‘(B) prohibit the commercial sale or li18 censing of real-time proprietary information; or 

19 ‘‘(C) publicly disclose information regard20 ing market positions, business transactions, 

21 trade secrets, or names of customers, except as 

22 provided in section 8.’’. 

23 SEC. 303. NO EFFECT ON OTHER AUTHORITY. 

24 (a) NO EFFECT ON FERC AUTHORITY.—Nothing 

25 contained in this title shall affect the jurisdiction of the 
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1 Federal Energy Regulatory Commission with respect to 

2 the authority of the Federal Energy Regulatory Commis3 sion under the Federal Power Act (16 U.S.C. 791a et 

4 seq.), the Natural Gas Act (15 U.S.C. 717 et seq.), or 

5 other law to obtain information or otherwise carry out the 

6 responsibilities of the Federal Energy Regulatory Commis7 sion. 

8 (b) NO EFFECT ON EXCLUDED COMMODITIES.—The 

9 amendments made by this title have no effect on the regu10 lation of excluded commodities under the Commodity Ex11 change Act (7 U.S.C. 1a et seq.). 

12 (c) NO EFFECT ON METALS.—The amendments 

13 made by this title have no effect on the regulation of met14 als under the Commodity Exchange Act (7 U.S.C. 1a et 

15 seq.). 

16 SEC. 304. PROHIBITION OF FRAUDULENT TRANSACTIONS. 

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

18 6b) is amended by striking subsection (a) and inserting 

19 the following: 

20 ‘‘(a) PROHIBITIONS.—

21 ‘‘(1) IN GENERAL.—It shall be unlawful (A) for 

22 any person, in or in connection with any order to 

23 make, or the making of, any contract of sale of any 

24 commodity for future delivery or in interstate com25 merce, that is made, or to be made, on or subject 
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1 to the rules of a designated contract market, for or 

2 on behalf of any other person, or (B) for any person, 

3 in or in connection with any order to make, or the 

4 making of, any contract of sale of any commodity 

5 for future delivery or other agreement, contract or 

6 transaction subject to paragraphs (1) and (2) of sec7 tion 5a(g), that is made, or to be made, for or on 

8 behalf of or with, any other person, other than on 

9 or subject to the rules of a designated contract mar10 ket—

11 ‘‘(i) to cheat or defraud or attempt to 

12 cheat or defraud the other person; 

13 ‘‘(ii) willfully to make or cause to be made 

14 to such other person any false report or state15 ment or willfully to enter or cause to be entered 

16 for the other person any false record; 

17 ‘‘(iii) willfully to deceive or attempt to de18 ceive the other person by any means whatsoever 

19 in regard to any order or contract or the dis20 position or execution of any order or contract, 

21 or in regard to any act of agency performed, 

22 with respect to any order or contract for (or, in 

23 the case of a contract described in subpara24 graph (B), with the other person); or
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1 ‘‘(iv)(I) to bucket an order represented by 

2 the person as an order to be executed, for or on 

3 behalf of the other person, on an organized ex4 change; or 

5 ‘‘(II) to—

6 ‘‘(aa) fill an order by offset against 

7 the order or orders of the other person; or 

8 ‘‘(bb) willfully and knowingly and 

9 without the prior consent of the other per10 son, to—

11 ‘‘(AA) become the buyer in re12 spect to any selling order of the other 

13 person; or 

14 ‘‘(BB) become the seller in re15 spect to any buying order of the other 

16 person; 

17 if the order is to be executed on or subject to 

18 the rules of a designated contract market. 

19 ‘‘(2) LIMITATION.—This subsection does not 

20 obligate any person, in connection with a transaction 

21 in a contract of sale of a commodity for future deliv22 ery with another person, to disclose to any other 

23 person nonpublic information that may be material 

24 to the market price of the commodity or transaction, 

25 except as necessary to make any statement made to 
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1 the other person in connection with the transaction 

2 not misleading in any material respect.’’. 

3 SEC. 305. CRIMINAL AND CIVIL PENALTIES. 

4 (a) ENFORCEMENT POWERS OF COMMISSION.—Sec5 tion 6(c) of the Commodity Exchange Act (7 U.S.C. 9, 

6 15) is amended in paragraph (3) of the tenth sentence—

7 (1) by inserting ‘‘(A)’’ after ‘‘assess such per8 son’’; and 

9 (2) by inserting after ‘‘each such violation’’ the 

10 following: ‘‘, or (B) in any case of manipulation of, 

11 or attempt to manipulate, the price of any com12 modity, a civil penalty of not more than the greater 

13 of $1,000,000 or triple the monetary gain to such 

14 person for each such violation,’’. 

15 (b) MANIPULATIONS AND OTHER VIOLATIONS.—Sec16 tion 6(d) of the Commodity Exchange Act (7 U.S.C. 13b) 

17 is amended in the first sentence—

18 (1) by striking ‘‘paragraph (a) or (b) of section 

19 9 of this Act’’ and inserting ‘‘subsection (a), (b), or 

20 (f) of section 9’’; and 

21 (2) by striking ‘‘said paragraph 9(a) or 9(b)’’ 

22 and inserting ‘‘subsection (a), (b), or (f) of section 

23 9’’. 
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1 (c) NONENFORCEMENT OF RULES OF GOVERNMENT

2 OR OTHER VIOLATIONS.—Section 6b of the Commodity 

3 Exchange Act (7 U.S.C. 13a) is amended—

4 (1) in the first sentence, by inserting before the 

5 period at the end the following: ‘‘, or, in any case 

6 of manipulation of, or an attempt to manipulate, the 

7 price of any commodity, a civil penalty of not more 

8 than $1,000,000 for each such violation’’; and 

9 (2) in the second sentence, by inserting before 

10 the period at the end the following: ‘‘, except that 

11 if the failure or refusal to obey or comply with the 

12 order involved any offense under section 9(f), the 

13 registered entity, director, officer, agent, or employee 

14 shall be guilty of a felony and, on conviction, shall 

15 be subject to penalties under section 9(f)’’. 

16 (d) ACTION TO ENJOIN OR RESTRAIN VIOLA17 TIONS.—Section 6c(d) of the Commodity Exchange Act (7 

18 U.S.C. 13a–1(d)) is amended by striking ‘‘(d)’’ and all 

19 that follows through the end of paragraph (1) and insert20 ing the following: 

21 ‘‘(d) CIVIL PENALTIES.—In any action brought 

22 under this section, the Commission may seek and the 

23 court shall have jurisdiction to impose, on a proper show24 ing, on any person found in the action to have committed 

25 any violation—
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1 ‘‘(1) a civil penalty in the amount of not more 

2 than the greater of $100,000 or triple the monetary 

3 gain to the person for each violation; or 

4 ‘‘(2) in any case of manipulation of, or an at5 tempt to manipulate, the price of any commodity, a 

6 civil penalty in the amount of not more than the 

7 greater of $1,000,000 or triple the monetary gain to 

8 the person for each violation.’’. 

9 (e) VIOLATIONS GENERALLY.—Section 9(a) of the 

10 Commodity Exchange Act (7 U.S.C. 13) is amended—

11 (1) by striking ‘‘(or $500,000 in the case of a 

12 person who is an individual)’’; 

13 (2) by striking ‘‘five years’’ and inserting ‘‘10 

14 years’’; and 

15 (3) in paragraph (2), by striking ‘‘false or mis16 leading or knowingly inaccurate reports’’ and insert17 ing ‘‘knowingly false, misleading, or inaccurate re18 ports’’. 

19 SEC. 306. CONFORMING AMENDMENTS. 

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

21 U.S.C. 2) is amended—

22 (1) in subsection (d)(1), by striking ‘‘section 

23 5b’’ and inserting ‘‘section 5a(g), 5b,’’; 

24 (2) in subsection (e)(1), by inserting ‘‘(1)’’ after 

25 ‘‘(g)’’; and 
27

•S 509 IS 

1 (3) in subsection (i)—

2 (A) in paragraph (1)—

3 (i) by striking ‘‘No provision’’ and in4 serting ‘‘IN GENERAL.—Subject to sub5 sections (g)(2) and (h)(7), no provision’’; 

6 and 

7 (ii) in subparagraph (A), by inserting 

8 ‘‘(1)’’ after ‘‘2(g)’’; and 

9 (B) in paragraph (2), by striking ‘‘No pro10 vision’’ and inserting ‘‘IN GENERAL.—Subject 

11 to subsections (g)(2) and (h)(7), no provision’’. 

12 (b) Section 4i of the Commodity Exchange Act (7 

13 U.S.C. 6i) is amended in the first sentence by inserting 

14 ‘‘, or pursuant to an exemption under section 4(c)’’ after 

15 ‘‘transaction execution facility’’. 

16 (c) Section 8a(9) of the Commodity Exchange Act (7 

17 U.S.C. 12a(9)) is amended—

18 (1) by inserting ‘‘or an electronic energy trad19 ing facility’’ after ‘‘direct the contract market’’; 

20 (2) by inserting after ‘‘liquidation of any fu21 tures contract’’ the following: ‘‘or included energy 

22 transaction’’; and 

23 (3) by inserting ‘‘or an electronic energy trad24 ing facility’’ after ‘‘given by a contract market’’.

Æ