I 
115TH CONGRESS 
1ST SESSION 
H. R. 316 
To protect investors in futures contracts. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 5, 2017 
Mr. CAPUANO introduced the following bill; which was referred to the 
Committee on Agriculture 
A BILL 
To protect investors in futures contracts. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Futures Investor Pro-
tection Act’’. 
SEC. 2. FUTURES INVESTORS PROTECTION FUND. 
(a) FUTURES INVESTOR PROTECTION CORPORA-
TION.— 
(1) CREATION AND MEMBERSHIP.— 
(A) CREATION.—There is established a 
nonprofit corporation to be known as the ‘‘Fu-
tures Investor Protection Corporation’’ (in this 
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Act referred to as the ‘‘FIPC’’), which shall not 
be an agency or establishment of the United 
States Government. 
(B) MEMBERSHIP.— 
(i) MEMBERS
OF
FIPC.—The FIPC 
shall be a membership corporation the 
members of which shall be all persons reg-
istered under the Commodity Exchange 
Act with the Commission as a futures com-
mission merchant, other than persons 
whose principal business, in the determina-
tion of the FIPC, taking into account busi-
ness of affiliated entities, is conducted out-
side the United States and its territories 
and possessions. 
(ii) COMMISSION REVIEW; ADDITIONAL 
MEMBERS.—Subparagraphs (B) and (C) of 
section 3(a)(2) of SIPA shall apply with 
respect to determinations of the FIPC in 
the same way the subparagraphs apply 
with respect to determinations of the SIPC 
and to brokers and dealers referred to in 
such subparagraph (D). 
(iii) 
DISCLOSURE.—Section 
3(a)(2)(D) of SIPA shall apply to futures 
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commission merchants in the same way the 
section applies to brokers and dealers re-
ferred to in such section. 
(2) POWERS.—The FIPC shall have all the 
powers conferred on the SIPC. 
(3) BOARD OF DIRECTORS.— 
(A) FUNCTIONS.—The FIPC shall have a 
Board of Directors which, subject to the provi-
sions of this Act, shall determine the policies 
which shall govern the operations of FIPC. 
(B) NUMBER
AND
APPOINTMENT.—The 
Board of Directors shall consist of 7 persons as 
follows: 
(i) 1 director shall be appointed by 
the Secretary of the Treasury from among 
the officers and employees of the Depart-
ment of the Treasury. 
(ii) 1 director shall be appointed by 
the Board of Governors of the Federal Re-
serve System from among the officers and 
employees of that Board. 
(iii) 5 directors shall be appointed by 
the President, by and with the advice and 
consent of the Senate, as follows: 
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(I) 3 directors shall be selected 
from among persons who are associ-
ated with, and representative of dif-
ferent aspects of, the futures industry, 
not all of whom shall be from the 
same geographical area of the United 
States. 
(II) 2 directors shall be selected 
from the general public from among 
persons who are not associated with a 
futures commission merchant or a 
contract market, or similarly associ-
ated with any self-regulatory organi-
zation or other futures industry 
group, and who have not had any 
such association during the 2 years 
preceding appointment. 
(C) CHAIRMAN AND VICE CHAIRMAN.—The 
President shall designate a Chairman and Vice 
Chairman from among those directors ap-
pointed under subparagraph (B)(iii)(II). 
(D) TERMS.— 
(i) IN GENERAL.—Except as provided 
in clauses (ii) and (iii), each director shall 
be appointed for a term of 3 years. 
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(ii) 
INITIALLY
APPOINTED
MEM-
BERS.—Of the directors first appointed 
under subparagraph (B)— 
(I) 2 shall hold office for a term 
expiring on December 31, 2017; 
(II) 2 shall hold office for a term 
expiring on December 31, 2018; and 
(III) 3 shall hold office for a 
term expiring on December 31, 2019, 
as designated by the President at the time 
they take office. The designation shall be 
made in a manner which will assure that 
no 2 persons appointed under the author-
ity of the same subclause of subparagraph 
(B)(iii) shall have terms which expire si-
multaneously. 
(iii) VACANCIES.—A vacancy in the 
Board shall be filled in the same manner 
as the original appointment was made. Any 
director appointed to fill a vacancy occur-
ring prior to the expiration of the term for 
which the predecessor of the director was 
appointed shall be appointed only for the 
remainder of the term. A director may 
serve after the expiration of the term for 
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which appointed until the successor of the 
director has taken office. 
(E) COMPENSATION.—All matters relating 
to compensation of directors shall be as pro-
vided in the bylaws of the FIPC. 
(4) MEETINGS
OF
BOARD; 
BYLAWS
AND 
RULES.—Subsections (d) and (e) of section 3 of 
SIPA shall apply with respect to the FIPC and the 
Commission in the same way the subsections apply 
with respect to the SIPC and the Securities and Ex-
change Commission. 
(b) FIPC FUND.— 
(1) IN GENERAL.—The FIPC shall establish, 
and make deposits into and payments from, an 
‘‘FIPC fund’’ (in this Act referred to as the ‘‘fund’’) 
in the same manner in which the SIPC has estab-
lished, and is authorized to make deposits into and 
payments from, the SIPC fund. 
(2) ASSESSMENTS.—The FIPC shall impose on 
its members assessments subject to the same rules 
that apply to the imposition by the SIPC of assess-
ments on the members of the SIPC. 
(c) OTHER PROVISIONS.—Sections 5 through 16 of 
the SIPA shall apply with respect to the FIPC and the 
members, directors, officers, and employees of the FIPC, 
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the Commission, the FIPC fund, futures commission mer-
chants and their affiliates, futures contracts, futures 
transactions, customers, and debtors in the same way the 
sections apply with respect to the SIPC and the members, 
directors, officers, and employees of the SIPC, the Securi-
ties and Exchange Commission, the SIPC fund, persons 
registered as brokers or dealers (as defined in section 
16(12) of the SIPA) and their affiliates, securities, securi-
ties transactions, customers (as defined in section 16(2) 
of the SIPA), and debtors (as defined in section 16(5) of 
the SIPA), respectively. 
(d) DEFINITIONS.—In this section: 
(1) COMMISSION.—The term ‘‘Commission’’ 
means the Commodity Futures Trading Commission. 
(2) CONTRACT MARKET.—The term ‘‘contract 
market’’ means a board of trade designated as a 
contract market under the Commodity Exchange 
Act. 
(3) FUTURES CONTRACT.—The term ‘‘futures 
contract’’ means a contract of sale of a commodity 
for future delivery, within the meaning of the Com-
modity Exchange Act. 
(4) FUTURES
COMMISSION
MERCHANT.—The 
term ‘‘futures commission merchant’’ has the mean-
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ing given the term in section 1a(28) of the Com-
modity Exchange Act. 
(5) SIPA.—The term ‘‘SIPA’’ means the Secu-
rity Investors Protection Act of 1970. 
(6) SIPC.—The term ‘‘SIPC’’ means the Secu-
rity Investors Protection Corporation. 
(7) SIPC FUND.—The term ‘‘SIPC fund’’ 
means the fund established under section 4(a)(1) of 
the SIPA. 
SEC. 3. SUITABILITY RULES. 
(a) IN GENERAL.—The Commodity Exchange Act (7 
U.S.C. 1 et seq.) is amended by inserting after section 
4t the following: 
‘‘SEC. 4u. SUITABILITY RULES. 
‘‘(a) IN GENERAL.— 
‘‘(1) RECOMMENDATIONS MUST BE SUITABLE 
FOR THE CUSTOMER.—A futures commission mer-
chant shall not recommend a transaction or invest-
ment strategy involving a contract of sale of a com-
modity for future delivery, unless the futures com-
mission merchant has a reasonable basis to believe 
that the transaction or investment strategy is suit-
able for the customer, based on the information ob-
tained through the reasonable diligence of the fu-
tures commission merchant to ascertain the cus-
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tomer’s investment profile. A customer’s investment 
profile includes, but is not limited to, the customer’s 
age, other investments, financial situation and 
needs, tax status, investment objectives, investment 
experience, investment time horizon, liquidity needs, 
risk tolerance, and any other information the cus-
tomer may disclose to the futures commission mer-
chant in connection with the recommendation. 
‘‘(2) SAFE HARBOR IN CERTAIN CASES.—A fu-
tures commission merchant is deemed to comply 
with paragraph (1) in the case of a customer with 
an institutional account, if— 
‘‘(A) the futures commission merchant has 
a reasonable basis to believe that the customer 
is capable of evaluating investment risks inde-
pendently, both in general and with regard to 
particular transactions and investment strate-
gies involving a contract of sale of a commodity 
for future delivery; and 
‘‘(B) the customer affirmatively indicates 
that it is exercising independent judgment in 
evaluating the recommendations of the futures 
commission merchant. 
‘‘(b) APPLICABILITY WITH RESPECT TO CERTAIN 
AGENTS.—If a customer with an institutional account has 
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delegated decisionmaking authority to an agent, sub-
section (a) shall be applied with respect to the agent. 
‘‘(c) INSTITUTIONAL ACCOUNT DEFINED.—In this 
section, the term ‘institutional account’ means the account 
of— 
‘‘(1) a bank, savings and loan association, in-
surance company or registered investment company; 
‘‘(2) an investment adviser registered with the 
Securities and Exchange Commission under section 
203 of the Investment Advisers Act or with a State 
securities commission (or any agency or office per-
forming like functions); or 
‘‘(3) any other person (whether a natural per-
son, corporation, partnership, trust or otherwise) 
with total assets of at least $50,000,000. 
‘‘(d) PENALTIES.—The Commission may impose one 
or more of the following sanctions on a person found by 
the Commission to have violated this section or to have 
neglected or refused to comply with an order issued by 
the Commission under this section: 
‘‘(1) Censure. 
‘‘(2) A fine. 
‘‘(3) Expulsion of the person from, or revoca-
tion of the membership of the person in, a registered 
entity. 
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‘‘(4) Suspension for a definite period or a pe-
riod contingent on the performance of a particular 
act, or revocation, of the registration of the person 
under this Act with the Commission as a futures 
commission merchant. 
‘‘(5) Suspension or bar of the person from asso-
ciation with any other futures commission merchant. 
‘‘(6) A temporary or permanent cease and de-
sist order against the person. 
‘‘(7) Any other fitting sanction.’’. 
(b) EFFECTIVE DATE.—Within 6 months after the 
date of the enactment of this Act, the Commodity Futures 
Trading Commission shall issue regulations for the imple-
mentation of the amendment made by subsection (a). 
SEC. 4. REVIEW OF PROOF OF CLAIMS RULES. 
(a) IN GENERAL.—The Commodity Futures Trading 
Commission shall review the guidelines for establishing ac-
count classes and determining the basis for pro rata 
shares under, and the sample claim form set forth in, part 
190 of title 17, Code of Federal Regulations, and consider 
the desirability of allowing use of a set date for valuation 
purposes rather than the date of actual liquidation of posi-
tions. 
(b) REPORT TO THE CONGRESS.—Within 1 year after 
the date of the enactment of this Act, the Commodity Fu-
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