I 
113TH CONGRESS 
2D SESSION 
H. R. 4413 
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 Commis-
sion, to help farmers, ranchers, and end users manage risks to help 
keep consumer costs low, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 7, 2014 
Mr. LUCAS (for himself, Mr. PETERSON, Mr. CONAWAY, and Mr. DAVID 
SCOTT of Georgia) introduced the following bill; which was referred to the 
Committee on Agriculture 
A BILL 
To reauthorize the Commodity Futures Trading Commission, 
to better protect futures customers, to provide end users 
with market certainty, to make basic reforms to ensure 
transparency and accountability at the Commission, to 
help farmers, ranchers, and end users manage risks to 
help keep consumer costs low, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Customer Protection 
and End User Relief Act’’. 
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SEC. 2. TABLE OF CONTENTS. 
The table of contents of this Act is as follows: 
Sec. 1. Short title. 
Sec. 2. Table of contents. 
TITLE I—CUSTOMER PROTECTIONS 
Sec. 101. Short title. 
Sec. 102. Enhanced protections for futures customers. 
Sec. 103. Electronic confirmation of customer funds. 
Sec. 104. Notice and certifications providing additional customer protections. 
Sec. 105. Futures commission merchant compliance. 
Sec. 106. Certainty for futures customers and market participants. 
Sec. 107. Study on high-frequency trading. 
TITLE II—COMMODITY FUTURES TRADING COMMISSION 
REFORMS 
Sec. 201. Short title. 
Sec. 202. Extension of operations. 
Sec. 203. Consideration by the Commodity Futures Trading Commission of the 
costs and benefits of its regulations and orders. 
Sec. 204. Division directors. 
Sec. 205. Office of the Chief Economist. 
Sec. 206. Procedures governing actions taken without a commission vote. 
Sec. 207. Strategic technology plan. 
Sec. 208. Internal risk controls. 
Sec. 209. Subpoena duration and renewal. 
Sec. 210. Implementation plan for Commission rulemakings. 
Sec. 211. Applicability of notice and comment requirements of the Administra-
tive 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. 
TITLE III—END-USER RELIEF 
Sec. 301. Short title. 
Subtitle A—End-User Exemption From Margin Requirements 
Sec. 311. End-user margin requirements. 
Sec. 312. Implementation. 
Subtitle B—Inter-Affiliate Swaps 
Sec. 321. Treatment of affiliate transactions. 
Subtitle C—Indemnification Requirements Related to Swap Data Repositories 
Sec. 331. Indemnification requirements. 
Subtitle D—Relief for Municipal Utilities 
Sec. 341. Transactions with utility special entities. 
Sec. 342. Utility special entity defined. 
Sec. 343. Utility operations-related swap. 
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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-fi-
nancial end users. 
Sec. 353. Relief for grain elevator operators, farmers, agricultural counterpar-
ties, 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. 
Subtitle F—Effective Date 
Sec. 371. Effective date. 
TITLE I—CUSTOMER 
PROTECTIONS 
SEC. 101. SHORT TITLE. 
This title may be cited as the ‘‘Futures Customer 
Protection Act’’. 
SEC. 102. ENHANCED PROTECTIONS FOR FUTURES CUS-
TOMERS. 
Section 17 of the Commodity Exchange Act (7 U.S.C. 
21) is amended by adding at the end the following: 
‘‘(s) A registered futures association shall— 
‘‘(1) require each member of the association 
that is a futures commission merchant to maintain 
written policies and procedures regarding the main-
tenance of— 
‘‘(A) the residual interest of the member, 
as described in section 1.23 of title 17, Code of 
Federal Regulations, in any customer seg-
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regated funds account of the member, as identi-
fied in section 1.20 of such title, and in any for-
eign futures and foreign options customer se-
cured amount funds account of the member, as 
identified in section 30.7 of such title; and 
‘‘(B) the residual interest of the member, 
as described in section 22.2(e)(4) of such title, 
in any cleared swaps customer collateral ac-
count of the member, as identified in section 
22.2 of such title; and 
‘‘(2) establish rules to govern the withdrawal, 
transfer or disbursement by any member of the asso-
ciation, that is a futures commission merchant, of 
the member’s residual interest in customer seg-
regated funds as provided in such section 1.20, in 
foreign futures and foreign options customer secured 
amount funds, identified as provided in such section 
30.7, and from a cleared swaps customer collateral, 
identified as provided in such section 22.2.’’. 
SEC. 103. ELECTRONIC CONFIRMATION OF CUSTOMER 
FUNDS. 
Section 17 of the Commodity Exchange Act (7 U.S.C. 
21), as amended by section 102 of this Act, is amended 
by adding at the end the following: 
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(1) by redesignating paragraphs (1) and (2) as 
subparagraphs (A) and (B) and by moving the mar-
gins of such subparagraphs two ems to the right; 
(2) by inserting ‘‘(1)’’ before ‘‘It shall be unlaw-
ful’’; and 
(3) by adding at the end the following new 
paragraph: 
‘‘(2) Any rules or regulations requiring a fu-
tures commission merchant to maintain a residual 
interest in accounts held for the benefit of customers 
in amounts at least sufficient to exceed the sum of 
all uncollected margin deficits of such customers 
shall provide that a futures commission merchant 
shall meet its residual interest requirement as of the 
end of each business day calculated as of the close 
of business on the previous business day.’’. 
(b) CONFORMING AMENDMENT.—Section 4d(h) of 
the Commodity Exchange Act (7 U.S.C. 6d(h)) is amend-
ed by striking ‘‘Notwithstanding subsection (a)(2)’’ and 
inserting ‘‘Notwithstanding subsection (a)(1)(B)’’. 
SEC. 106. CERTAINTY FOR FUTURES CUSTOMERS AND MAR-
KET PARTICIPANTS. 
Section 20(a) of the Commodity Exchange Act (7 
U.S.C. 24(a)) is amended— 
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(1) by striking ‘‘and’’ at the end of paragraph 
(4); 
(2) by striking the period at the end of para-
graph (5) and inserting ‘‘; and’’; and 
(3) by adding at the end the following: 
‘‘(6) that cash, securities, or other property of 
the estate of a commodity broker, including the 
trading or operating accounts of the commodities 
broker and commodities held in inventory by the 
commodity broker, shall be included in customer 
property, but only to the extent that the property 
that is otherwise customer property is insufficient to 
satisfy the net equity claims of public customers (as 
such term may be defined by the Commission by 
rule or regulation) of the commodity broker.’’. 
SEC. 107. STUDY ON HIGH-FREQUENCY TRADING. 
(a) IN GENERAL.—Not later than one year after the 
date of the enactment of this Act, the Commodity Futures 
Trading Commission shall submit to the Committee on 
Agriculture of the House of Representatives and the Com-
mittee on Agriculture, Nutrition, and Forestry of the Sen-
ate a report examining the effect of the practice commonly 
referred to as high-frequency trading on markets under 
its jurisdiction. 
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(b) SPECIFIC AREAS EXAMINED
IN REPORT.—In 
preparing the report submitted under subsection (a), the 
Commission shall particularly examine each of the fol-
lowing areas: 
(1) The technology, personnel, or other re-
sources the Commission may require for purposes of 
monitoring the effect of high-frequency trading. 
(2) The role such trading plays in providing 
market liquidity. 
(3) Whether the technology creates discrep-
ancies in the marketplace between market partici-
pants. 
(4) Whether the existing authority of the Com-
mission with respect to such trading is sufficient to 
meet the Commission’s mission to— 
(A) protect market participants and the 
public from fraud, manipulation, abusive prac-
tices, and systemic risk related to derivatives; 
and 
(B) foster transparent, open, competitive, 
and financially sound markets. 
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TITLE II—COMMODITY FUTURES 
TRADING 
COMMISSION 
RE-
FORMS 
SEC. 201. SHORT TITLE. 
This title may be cited as the ‘‘Commodity Futures 
Trading Commission Reform Act’’. 
SEC. 202. EXTENSION OF OPERATIONS. 
Section 12(d) of the Commodity Exchange Act (7 
U.S.C. 16(d)) is amended by striking ‘‘2013’’ and insert-
ing ‘‘2018’’. 
SEC. 203. CONSIDERATION BY THE COMMODITY FUTURES 
TRADING COMMISSION OF THE COSTS AND 
BENEFITS OF ITS REGULATIONS AND OR-
DERS. 
Section 15(a) of the Commodity Exchange Act (7 
U.S.C. 19(a)) is amended by striking paragraphs (1) and 
(2) and inserting the following: 
‘‘(1) IN GENERAL.—Before promulgating a reg-
ulation under this Act or issuing an order (except as 
provided in paragraph (3)), the Commission, 
through the Office of the Chief Economist, shall as-
sess and publish in the regulation or order the costs 
and benefits, both qualitative and quantitative, of 
the proposed regulation or order, and the proposed 
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regulation or order shall state its statutory justifica-
tion. 
‘‘(2) CONSIDERATIONS.—In making a reasoned 
determination of the costs and the benefits, the 
Commission shall evaluate— 
‘‘(A) considerations of protection of market 
participants and the public; 
‘‘(B) considerations of the efficiency, com-
petitiveness, and financial integrity of futures 
and swaps markets; 
‘‘(C) considerations of the impact on mar-
ket liquidity in the futures and swaps markets; 
‘‘(D) considerations of price discovery; 
‘‘(E) considerations of sound risk manage-
ment practices; 
‘‘(F) available alternatives to direct regula-
tion; 
‘‘(G) the degree and nature of the risks 
posed by various activities within the scope of 
its jurisdiction; 
‘‘(H) the costs of complying with the pro-
posed regulation or order by all regulated enti-
ties, including a methodology for quantifying 
the costs (recognizing that some costs are dif-
ficult to quantify); 
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‘‘(I) whether the proposed regulation or 
order is inconsistent, incompatible, or duplica-
tive of other Federal regulations or orders; 
‘‘(J) whether, in choosing among alter-
native regulatory approaches, those approaches 
maximize net benefits (including potential eco-
nomic and other benefits, distributive impacts, 
and equity); and 
‘‘(K) other public interest considerations.’’. 
SEC. 204. DIVISION DIRECTORS. 
Section 2(a)(6)(C) of the Commodity Exchange Act 
(7 U.S.C. 2(a)(6)(C)) is amended by inserting ‘‘, and the 
heads of the units shall serve at the pleasure of the Com-
mission, report directly to the Commission, and perform 
such functions and duties as the Commission may pre-
scribe’’ before the period. 
SEC. 205. OFFICE OF THE CHIEF ECONOMIST. 
(a) IN GENERAL.—Section 2(a) of the Commodity 
Exchange Act (7 U.S.C. 2(a)) is amended by adding at 
the end the following: 
‘‘(17) OFFICE OF THE CHIEF ECONOMIST.— 
‘‘(A) ESTABLISHMENT.—There is estab-
lished in the Commission the Office of the Chief 
Economist. 
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‘‘(B) HEAD.—The Office of the Chief 
Economist shall be headed by the Chief Econo-
mist, who shall be appointed by the Commission 
and serve at the pleasure of the Commission. 
‘‘(C) FUNCTIONS.—The Chief Economist 
shall report directly to the Commission and per-
form such functions and duties as the Commis-
sion may prescribe. 
‘‘(D) PROFESSIONAL
STAFF.—The Com-
mission shall appoint such other economists as 
may be necessary to assist the Chief Economist 
in performing such economic analysis, regu-
latory cost-benefit analysis, or research the 
Commission may direct.’’. 
(b) CONFORMING AMENDMENT.—Section 2(a)(6)(A) 
of such Act (7 U.S.C. 2(a)(6)(A)) is amended by striking 
‘‘(4) and (5)’’ and inserting ‘‘(4), (5), and (17)’’. 
SEC. 206. PROCEDURES GOVERNING ACTIONS TAKEN WITH-
OUT A COMMISSION VOTE. 
Section 2(a)(12) of the Commodity Exchange Act (7 
U.S.C. 2(a)(12)) is amended— 
(1) by striking ‘‘(12) The’’ and inserting the 
following: 
‘‘(12) RULES AND REGULATIONS.— 
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‘‘(A) IN GENERAL.—Subject to the other 
provisions of this paragraph, the’’; and 
(2) by adding after and below the end the fol-
lowing new subparagraph: 
‘‘(B) NOTICE TO COMMISSION.— 
‘‘(i) GENERAL RULE.—A division or 
office of the Commission may not issue an 
interpretive rule of general applicability, a 
statement of general policy, a response to 
a formal, written request or petition from 
any member of the public for guidance, or 
an exemptive, a no-action, or an interpre-
tive letter, unless, at least 7 calendar days 
before the issuance, the division or office 
has provided the Commission with a copy 
of the matter to be issued. 
‘‘(ii) OPPORTUNITY FOR MEETING RE-
QUIRED.—After receiving a copy of the 
matter provided in accordance with clause 
(i), any member of the Commission may 
request that the Commission hold a meet-
ing to review the matter, and the Chair-
man shall immediately put any such re-
quest for a meeting before the Commis-
sion, and if the Commission decides to hold 
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the meeting by a majority vote, the matter 
may not be issued until the Commission 
has concluded the meeting. 
‘‘(iii) 
LIMITATIONS
ON
APPLICA-
BILITY.—By a majority vote, the Commis-
sion may waive the 7-day prior notice re-
quirement of clause (i) when the Commis-
sion finds that requiring such a notice 
would be impracticable, unnecessary, or 
contrary to the public interest.’’. 
SEC. 207. STRATEGIC TECHNOLOGY PLAN. 
Section 2(a) of the Commodity Exchange Act (7 
U.S.C. 2(a)), as amended by section 204(a) of this Act, 
is amended by adding at the end the following: 
‘‘(18) STRATEGIC TECHNOLOGY PLAN.— 
‘‘(A) IN
GENERAL.—Every 5 years, the 
Commission shall develop and submit to the 
Committee on Agriculture of the House of Rep-
resentatives and the Committee on Agriculture, 
Nutrition, and Forestry of the Senate a detailed 
plan focused on the acquisition and use of tech-
nology by the Commission. 
‘‘(B) CONTENTS.—The plan shall— 
‘‘(i) include for each related division 
or office a detailed technology strategy fo-
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cused exclusively on market surveillance 
and risk detection, market data collection, 
aggregation, interpretation, standardiza-
tion, harmonization, streamlining, and in-
ternal management and protection of data 
collected by the Commission, including a 
detailed accounting of how the funds pro-
vided for technology will be used and the 
priorities that will apply in the use of the 
funds; and 
‘‘(ii) set forth annual goals to be ac-
complished and annual budgets needed to 
accomplish the goals.’’. 
SEC. 208. INTERNAL RISK CONTROLS. 
(a) IN GENERAL.—Section 2(a)(12) of the Com-
modity Exchange Act (7 U.S.C. 2(a)(12)), as amended by 
section 206 of this Act, is amended by adding at the end 
the following: 
‘‘(C) INTERNAL
RISK
CONTROLS.—The 
Commission staff and the Chief Economist shall 
develop comprehensive internal risk control 
mechanisms to safeguard and govern the stor-
age of all market data by the Commission, all 
market data sharing agreements of the Com-
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mission, and all academic research performed at 
the Commission using market data.’’. 
(b) REPORTS TO THE CONGRESS.— 
(1) CONTENT.—The Commission shall submit 
to the Committee on Agriculture of the House of 
Representatives and the Committee on Agriculture, 
Nutrition, and Forestry of the Senate 2 reports on 
the progress made in implementing the internal risk 
controls provided for in section 2(a)(12)(C) of the 
Commodity Exchange Act. 
(2) TIMING.—The Commission shall submit the 
1st report required by paragraph (1) within 60 days 
after the date of the enactment of this Act, and the 
2nd such report within 120 days after such date of 
enactment. 
SEC. 209. SUBPOENA DURATION AND RENEWAL. 
Section 6(c)(5) of the Commodity Exchange Act (7 
U.S.C. 9(5)) is amended— 
(1) by striking ‘‘(5) SUBPOENA.—For’’ and in-
serting the following: 
‘‘(5) SUBPOENA.— 
‘‘(A) IN GENERAL.—For’’; and 
(2) by adding after and below the end the fol-
lowing: 
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‘‘(B) CONTENT OF SUBPOENA ORDER.—An 
order of the Commission authorizing the 
issuance of a subpoena— 
‘‘(i) shall state in good faith the pur-
pose of the investigation; 
‘‘(ii) shall require only the provision of 
information reasonably relevant to that 
purpose; and 
‘‘(iii) shall not be for an indefinite du-
ration. 
‘‘(C) RENEWAL.—An order issued under 
this paragraph may be renewed only by Com-
mission action.’’. 
SEC. 
210. 
IMPLEMENTATION 
PLAN 
FOR 
COMMISSION 
RULEMAKINGS. 
Section 2(a)(12) of the Commodity Exchange Act (7 
U.S.C. 2(a)(12)), as amended by sections 206 and 208(a) 
of this Act, is amended by adding at the end the following: 
‘‘(E) REQUIREMENT TO PUBLISH IMPLE-
MENTATION PLAN FOR COMMISSION RULES.— 
The Commission shall direct its staff to develop 
and publish in any proposed rule a plan for— 
‘‘(i) when and for how long the pro-
posed rule will be subject to public com-
ment; and 
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‘‘(ii) by when compliance with the 
final rule will be required.’’. 
SEC. 211. APPLICABILITY OF NOTICE AND COMMENT RE-
QUIREMENTS OF THE ADMINISTRATIVE PRO-
CEDURE ACT TO GUIDANCE VOTED ON BY 
THE COMMISSION. 
Section 2(a)(12) of the Commodity Exchange Act (7 
U.S.C. 2(a)(12)), as amended by sections 206, 208(a), 
and 210 of this Act, is amended by adding at the end 
the following: 
‘‘(F) APPLICABILITY OF NOTICE AND COM-
MENT RULES TO GUIDANCE VOTED ON BY THE 
COMMISSION.—The notice and comment re-
quirements of chapter 5 of title 5, United 
States Code, shall also apply with respect to 
any guidance issued by the Commission after 
being voted on by the Commission.’’. 
SEC. 212. JUDICIAL REVIEW OF COMMISSION RULES. 
The Commodity Exchange Act (7 U.S.C. 1 et seq.) 
is amended by adding at the end the following: 
‘‘SEC. 24. JUDICIAL REVIEW OF COMMISSION RULES. 
‘‘(a) A person aggrieved by a final rule of the Com-
mission under this Act may obtain review of the rule in 
the United States Court of Appeals for the District of Co-
lumbia Circuit or the United States Court of Appeals for 
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the circuit where the party resides, by filing in the court, 
within 60 days after publication in the Federal Register 
of the entry of the rule, a written petition requesting that 
the rule be modified or set aside in whole or in part. 
‘‘(b) A copy of the petition shall be transmitted forth-
with by the clerk of the court to an officer designated by 
the Commission for that purpose. Thereupon the Commis-
sion shall file in the court the record on which the rule 
complained of is entered, as provided in section 2112 of 
title 28, United States Code, and the Federal Rules of 
Appellate Procedure. 
‘‘(c) On the filing of the petition, the court has juris-
diction, which becomes exclusive on the filing of the 
record, to affirm or modify and enforce or to set aside 
the rule in whole or in part. 
‘‘(d) The findings of the Commission as to the facts 
identified by the Commission as the basis, in whole or in 
part, of the rule, if supported by substantial evidence, are 
conclusive. The court shall affirm and enforce the rule un-
less the Commission’s action in promulgating the rule is 
found to be arbitrary, capricious, an abuse of discretion, 
or otherwise not in accordance with law; contrary to con-
stitutional right, power, privilege, or immunity; in excess 
of statutory jurisdiction, authority, or limitations, or short 
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of statutory right; or without observance of procedure re-
quired by law. 
‘‘(e) If either party applies to the court for leave to 
adduce additional evidence and shows to the satisfaction 
of the court that the additional evidence is material and 
that there was reasonable ground for failure to adduce it 
before the Commission, the court may remand the case 
to the Commission for further proceedings, in whatever 
manner and on whatever conditions the court considers 
appropriate. If the case is remanded to the Commission, 
it shall file in the court a supplemental record containing 
any new evidence, any further or modified findings, and 
any new order.’’. 
SEC. 213. GAO STUDY ON ADEQUACY OF CFTC RESOURCES. 
(a) STUDY.—The Comptroller General of the United 
States shall conduct a study of the resources of the Com-
modity Futures Trading Commission that— 
(1) assesses whether the resources of the Com-
mission are sufficient to enable the Commission to 
effectively carry out the duties of the Commission; 
and 
(2) examines the prior expenditures of the Com-
mission on hardware, software, and analytical proc-
esses designed to protect customers in the areas 
of— 
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(A) market surveillance and risk detection; 
and 
(B) market data collection, aggregation, 
interpretation, standardization, harmonization, 
and streamlining. 
(b) REPORT.—Not later than 180 days after the date 
of the enactment of this Act, the Comptroller General of 
the United States shall submit to the Committee on Agri-
culture of the House of Representatives and the Com-
mittee on Agriculture, Nutrition, and Forestry of the Sen-
ate a report that contains the results of the study. 
TITLE III—END-USER RELIEF 
SEC. 301. SHORT TITLE. 
This title may be cited as the ‘‘End-User Relief and 
Market Certainty Act’’. 
Subtitle A—End-User Exemption 
From Margin Requirements 
SEC. 311. END-USER MARGIN REQUIREMENTS. 
Section 4s(e) of the Commodity Exchange Act (7 
U.S.C. 6s(e)) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(4) 
APPLICABILITY
WITH
RESPECT
TO 
COUNTERPARTIES.—The requirements of paragraphs 
(2)(A)(ii) and (2)(B)(ii), including the initial and 
variation margin requirements imposed by rules 
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adopted pursuant to paragraphs (2)(A)(ii) and 
(2)(B)(ii), shall not apply to a swap in which a 
counterparty qualifies for an exception under section 
2(h)(7)(A), or an exemption issued under section 
4(c)(1) from the requirements of section 2(h)(1)(A) 
for cooperative entities as defined in such exemption, 
or satisfies the criteria in section 2(h)(7)(D).’’. 
SEC. 312. IMPLEMENTATION. 
The amendment made by this subtitle shall be imple-
mented— 
(1) without regard to— 
(A) chapter 35 of title 44, United States 
Code; and 
(B) the notice and comment provisions of 
section 553 of title 5, United States Code; 
(2) through the promulgation of an interim 
final rule, pursuant to which public comment will be 
sought before a final rule is issued; and 
(3) such that paragraph (1) shall apply solely 
to changes to rules and regulations, or proposed 
rules and regulations, that are limited to and di-
rectly a consequence of the amendment. 
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Subtitle B—Inter-Affiliate Swaps 
SEC. 321. TREATMENT OF AFFILIATE TRANSACTIONS. 
(a) IN GENERAL.—Section 2(h)(7)(D)(i) of the Com-
modity Exchange Act (7 U.S.C. 2(h)(7)(D)(i)) is amended 
to read as follows: 
‘‘(i) IN GENERAL.—An affiliate of a 
person that qualifies for an exception 
under subparagraph (A) (including affiliate 
entities predominantly engaged in pro-
viding financing for the purchase of the 
merchandise or manufactured goods of the 
person) may qualify for the exception only 
if the affiliate enters into the swap to 
hedge or mitigate the commercial risk of 
the person or other affiliate of the person 
that is not a financial entity, provided that 
if the transfer of commercial risk is ad-
dressed by entering into a swap with a 
swap dealer or major swap participant, a 
credit support measure or other mecha-
nism is utilized.’’. 
(b) APPLICABILITY OF CREDIT SUPPORT MEASURE 
REQUIREMENT.—Notwithstanding section 371 of this Act, 
the requirement in section 2(h)(7)(D)(i) of the Commodity 
Exchange Act, as amended by subsection (a), requiring 
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that a credit support measure or other mechanism be uti-
lized if the transfer of commercial risk referred to in such 
section is addressed by entering into a swap with a swap 
dealer or major swap participant, shall not apply with re-
spect to swaps entered into before the date of the enact-
ment of this Act. 
Subtitle 
C—Indemnification 
Re-
quirements 
Related 
to 
Swap 
Data Repositories 
SEC. 331. INDEMNIFICATION REQUIREMENTS. 
(a) DERIVATIVES CLEARING ORGANIZATIONS.—Sec-
tion 5b(k)(5) of the Commodity Exchange Act (7 U.S.C. 
7a–1(k)(5)) is amended to read as follows: 
‘‘(5) CONFIDENTIALITY
AGREEMENT.—Before 
the Commission may share information with any en-
tity described in paragraph (4), the Commission 
shall receive a written agreement from each entity 
stating that the entity shall abide by the confiden-
tiality requirements described in section 8 relating to 
the information on swap transactions that is pro-
vided.’’. 
(b) SWAP DATA REPOSITORIES.—Section 21(d) of 
such Act (7 U.S.C. 24a(d)) is amended to read as follows: 
‘‘(d) CONFIDENTIALITY AGREEMENT.—Before the 
swap data repository may share information with any enti-
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ty described in subsection (c)(7), the swap data repository 
shall receive a written agreement from each entity stating 
that the entity shall abide by the confidentiality require-
ments described in section 8 relating to the information 
on swap transactions that is provided.’’. 
Subtitle D—Relief for Municipal 
Utilities 
SEC. 341. TRANSACTIONS WITH UTILITY SPECIAL ENTITIES. 
Section 1a(49) of the Commodity Exchange Act (7 
U.S.C. 1a(49)) is amended by adding at the end the fol-
lowing: 
‘‘(E) CERTAIN
TRANSACTIONS
WITH
A 
UTILITY SPECIAL ENTITY.— 
‘‘(i) Transactions in utility operations- 
related swaps shall be reported pursuant to 
section 4r. 
‘‘(ii) In making a determination to ex-
empt pursuant to subparagraph (D), the 
Commission shall treat a utility operations- 
related swap entered into with a utility 
special entity, as defined in section 
4s(h)(2)(D), as if it were entered into with 
an entity that is not a special entity, as de-
fined in section 4s(h)(2)(C).’’. 
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SEC. 342. UTILITY SPECIAL ENTITY DEFINED. 
Section 4s(h)(2) of the Commodity Exchange Act (7 
U.S.C. 6s(h)(2)) is amended by adding at the end the fol-
lowing: 
‘‘(D) UTILITY SPECIAL ENTITY.—For pur-
poses of this Act, the term ‘utility special enti-
ty’ means a special entity, or any instrumen-
tality, department, or corporation of or estab-
lished by a State or political subdivision of a 
State, that— 
‘‘(i) owns or operates an electric or 
natural gas facility or an electric or nat-
ural gas operation; 
‘‘(ii) supplies natural gas and or elec-
tric energy to another utility special entity; 
‘‘(iii) has public service obligations 
under Federal, State, or local law or regu-
lation to deliver electric energy or natural 
gas service to customers; or 
‘‘(iv) is a Federal power marketing 
agency, as defined in section 3 of the Fed-
eral Power Act.’’. 
SEC. 343. UTILITY OPERATIONS-RELATED SWAP. 
(a) 
SWAP
FURTHER
DEFINED.—Section 
1a(47)(A)(iii) of the Commodity Exchange Act (7 U.S.C. 
1a(47)(A)(iii)) is amended— 
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(1) by striking ‘‘and’’ at the end of subclause 
(XXI); 
(2) by adding ‘‘and’’ at the end of subclause 
(XXII); and 
(3) by adding at the end the following: 
‘‘(XXIII) a utility operations-re-
lated swap;’’. 
(b) UTILITY
OPERATIONS-RELATED
SWAP
DE-
FINED.—Section 1a of such Act (7 U.S.C. 1a) is amended 
by adding at the end the following: 
‘‘(52) UTILITY OPERATIONS-RELATED SWAP.— 
The term ‘utility operations-related swap’ means a 
swap that— 
‘‘(A) is entered into to hedge or mitigate a 
commercial risk; 
‘‘(B) is not a contract, agreement, or 
transaction based on, derived on, or ref-
erencing— 
‘‘(i) an interest rate, credit, equity, or 
currency asset class; or 
‘‘(ii) a metal, agricultural commodity, 
or crude oil or gasoline commodity of any 
grade, except as used as fuel for electric 
energy generation; and 
‘‘(C) is associated with— 
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‘‘(i) the generation, production, pur-
chase, or sale of natural gas or electric en-
ergy, the supply of natural gas or electric 
energy to a utility, or the delivery of nat-
ural gas or electric energy service to utility 
customers; 
‘‘(ii) all fuel supply for the facilities or 
operations of a utility; 
‘‘(iii) compliance with an electric sys-
tem reliability obligation; 
‘‘(iv) compliance with an energy, en-
ergy efficiency, conservation, or renewable 
energy or environmental statute, regula-
tion, or government order applicable to a 
utility; or 
‘‘(v) any other electric energy or nat-
ural gas swap to which a utility is a 
party.’’. 
Subtitle E—End-User Regulatory 
Relief 
SEC. 351. END USERS NOT TREATED AS FINANCIAL ENTI-
TIES. 
(a) IN GENERAL.—Section 2(h)(7)(C)(iii) of the 
Commodity Exchange Act (7 U.S.C. 2(h)(7)(C)(iii)) is 
amended to read as follows: 
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‘‘(iii) LIMITATION.—Such definition 
shall not include an entity— 
‘‘(I) whose primary business is 
providing financing, and who uses de-
rivatives for the purpose of hedging 
underlying commercial risks related to 
interest rate and foreign currency ex-
posures, 90 percent or more of which 
arise from financing that facilitates 
the purchase or lease of products, 90 
percent or more of which are manu-
factured by the parent company or 
another subsidiary of the parent com-
pany; or 
‘‘(II) who is not supervised by a 
prudential regulator, and is not de-
scribed in any of subclauses (I) 
through (VII) of clause (i), and— 
‘‘(aa) is a commercial mar-
ket participant and is considered 
a financial entity under clause 
(i)(VIII) because the entity pre-
dominantly engages in physical 
delivery contracts; or 
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‘‘(bb) enters into swaps, 
contracts for future delivery, and 
other derivatives on behalf of, or 
to hedge or mitigate the commer-
cial risk of, whether directly or in 
the aggregate, affiliates that are 
not so supervised or described.’’. 
(b) 
COMMERCIAL
MARKET
PARTICIPANT
DE-
FINED.— 
(1) IN GENERAL.—Section 1a of such Act (7 
U.S.C. 1a) is amended by redesignating paragraphs 
(8) through (51) as paragraphs (9) through (52), re-
spectively, and by inserting after paragraph (6) the 
following: 
‘‘(7) COMMERCIAL MARKET PARTICIPANT.—The 
term ‘commercial market participant’ means any 
producer, processor, merchant, or commercial user 
of an exempt or agricultural commodity, or the prod-
ucts or byproducts of such a commodity.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 1a of such Act (7 U.S.C. 1a) 
is amended— 
(i) in subparagraph (A) of paragraph 
(18) (as so redesignated by paragraph (1) 
of this subsection), in the matter preceding 
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clause (i), by striking ‘‘(18)(A)’’ and in-
serting ‘‘(19)(A)’’; and 
(ii) in subparagraph (A)(vii) of para-
graph (19) (as so redesignated by para-
graph (1) of this subsection), in the matter 
following subclause (III), by striking 
‘‘(17)(A)’’ and inserting ‘‘(18)(A)’’. 
(B) Section 4(c)(1)(A)(i)(I) of such Act (7 
U.S.C. 6(c)(1)(A)(i)(I)) is amended by striking 
‘‘(7), paragraph (18)(A)(vii)(III), paragraphs 
(23), (24), (31), (32), (38), (39), (41), (42), 
(46), (47), (48), and (49)’’ and inserting ‘‘(8), 
paragraph (19)(A)(vii)(III), paragraphs (24), 
(25), (32), (33), (39), (40), (42), (43), (47), 
(48), (49), and (50)’’. 
(C) Section 4q(a)(1) of such Act (7 U.S.C. 
6o–1(a)(1)) is amended by striking ‘‘1a(9)’’ and 
inserting ‘‘1a(10)’’. 
(D) Section 4s(f)(1)(D) of such Act (7 
U.S.C. 6s(f)(1)(D)) is amended by striking 
‘‘1a(47)(A)(v)’’ and inserting ‘‘1a(48)(A)(v)’’. 
(E) Section 4s(h)(5)(A)(i) of such Act (7 
U.S.C. 6s(h)(5)(A)(i)) is amended by striking 
‘‘1a(18)’’ and inserting ‘‘1a(19)’’. 
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(F) Section 4t(b)(1)(C) of such Act (7 
U.S.C. 6t(b)(1)(C)) is amended by striking 
‘‘1a(47)(A)(v)’’ and inserting ‘‘1a(48)(A)(v)’’. 
(G) Section 5(d)(23) of such Act (7 U.S.C. 
7(d)(23)) 
is 
amended 
by 
striking 
‘‘1a(47)(A)(v)’’ and inserting ‘‘1a(48)(A)(v)’’. 
(H) Section 5(e)(1) of such Act (7 U.S.C. 
7(e)(1)) is amended by striking ‘‘1a(9)’’ and in-
serting ‘‘1a(10)’’. 
(I) Section 5b(k)(3)(A) of such Act (7 
U.S.C. 7a–1(k)(3)(A)) is amended by striking 
‘‘1a(47)(A)(v)’’ and inserting ‘‘1a(48)(A)(v)’’. 
(J) Section 5c(c)(4)(B) of such Act (7 
U.S.C. 7a–2(c)(4)(B)) is amended by striking 
‘‘1a(10)’’ and inserting ‘‘1a(11)’’. 
(K) Section 5h(f)(10)(A)(iii) of such Act 
(7 U.S.C. 7b–3(f)(10)(A)(iii)) is amended by 
striking 
‘‘1a(47)(A)(v)’’ 
and 
inserting 
‘‘1a(48)(A)(v)’’. 
(L) Section 21(f)(4)(C) of such Act (7 
U.S.C. 24a(f)(4)(C)) is amended by striking 
‘‘1a(48)’’ and inserting ‘‘1a(49)’’. 
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SEC. 352. REPORTING OF ILLIQUID SWAPS SO AS TO NOT 
DISADVANTAGE 
CERTAIN 
NON-FINANCIAL 
END USERS. 
Section 2(a)(13) of the Commodity Exchange Act (7 
U.S.C. 2(a)(13)) is amended— 
(1) in subparagraph (C), by striking ‘‘The 
Commission’’ and inserting ‘‘Except as provided in 
subparagraph (D), the Commission’’; and 
(2) 
by 
redesignating 
subparagraphs 
(D) 
through (G) as subparagraphs (E) through (H), re-
spectively, and inserting after subparagraph (C) the 
following: 
‘‘(D) REQUIREMENTS
FOR
SWAP
TRANS-
ACTIONS
IN
ILLIQUID
MARKETS.—Notwith-
standing subparagraph (C): 
‘‘(i) The Commission shall provide by 
rule for the public reporting of swap trans-
actions, including price and volume data, 
in illiquid markets that are not cleared and 
entered into by a non-financial entity that 
is hedging or mitigating commercial risk in 
accordance with subsection (h)(7)(A). 
‘‘(ii) The Commission shall ensure 
that the swap transaction information re-
ferred to in clause (i) of this subparagraph 
is available to the public no sooner than 30 
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days after the swap transaction has been 
executed or at such later date as the Com-
mission determines appropriate to protect 
the identity of participants and positions in 
illiquid markets and to prevent the elimi-
nation or reduction of market liquidity. 
‘‘(iii) In this subparagraph, the term 
‘illiquid markets’ means any market in 
which the volume and frequency of trading 
in swaps is at such a level as to allow iden-
tification of individual market partici-
pants.’’. 
SEC. 353. RELIEF FOR GRAIN ELEVATOR OPERATORS, 
FARMERS, 
AGRICULTURAL 
COUNTERPAR-
TIES, AND COMMERCIAL MARKET PARTICI-
PANTS. 
The Commodity Exchange Act (7 U.S.C. 1 et seq.) 
is amended by inserting after section 4t the following: 
‘‘SEC. 4u. RECORDKEEPING REQUIREMENTS APPLICABLE 
TO NON-REGISTERED MEMBERS OF CERTAIN 
REGISTERED ENTITIES. 
‘‘Except as provided in section 4(a)(3), a member of 
a designated contract market or a swap execution facility 
that is not registered with the Commission and not re-
quired to be registered with the Commission in any capac-
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ity shall satisfy the recordkeeping requirements of this Act 
and any recordkeeping rule, order, or regulation under 
this Act by maintaining a written record of each trans-
action in a contract for future delivery, option on a future, 
swap, swaption, trade option, or related cash or forward 
transaction. The written record shall be sufficient if it in-
cludes the final agreement between the parties and the 
material economic terms of the transaction and is identifi-
able and searchable by transaction.’’. 
SEC. 354. RELIEF FOR END USERS WHO USE PHYSICAL 
CONTRACTS WITH VOLUMETRIC OPTIONALI-
TY. 
Section 1a(47)(B)(ii) of the Commodity Exchange 
Act (7 U.S.C. 1a(47)(B)(ii)) is amended to read as fol-
lows: 
‘‘(ii) any purchase or sale of a non-
financial commodity or security for de-
ferred shipment or delivery, so long as the 
transaction is intended to be physically set-
tled, including any stand-alone or embed-
ded option for which— 
‘‘(I) exercise results in a physical 
delivery obligation; 
‘‘(II) cannot be severed or mar-
keted separately from the overall 
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transaction for the purpose of finan-
cial settlement; and 
‘‘(III) both parties are commer-
cial market participants.’’. 
SEC. 355. COMMISSION VOTE REQUIRED BEFORE AUTO-
MATIC CHANGE OF SWAP DEALER DE MINI-
MIS LEVEL. 
Section 1a(49)(D) of the Commodity Exchange Act 
(7 U.S.C. 1a(49)(D)) is amended— 
(1) by striking all that precedes ‘‘shall exempt’’ 
and inserting the following: 
‘‘(D) DE MINIMIS EXCEPTION.— 
‘‘(i) IN GENERAL.—The Commission’’; 
and 
(2) by adding after and below the end the fol-
lowing new clause: 
‘‘(ii) The de minimis quantity of swap 
dealing as described in clause (i) that is 
currently 
set 
at 
a 
quantity 
of 
$8,000,000,000 shall only be amended or 
reduced through a new affirmative action 
of the Commission undertaken by rule or 
regulation.’’. 
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SEC. 356. CAPITAL REQUIREMENTS FOR NON-BANK SWAP 
DEALERS. 
Section 4s(e) of the Commodity Exchange Act (7 
U.S.C. 6s(e)) is amended— 
(1) in paragraph (2)(B), by inserting ‘‘, in con-
sultation with the prudential regulators and the Se-
curities and Exchange Commission,’’ before ‘‘shall’’; 
and 
(2) in paragraph (3)(D)— 
(A) in clause (ii), by striking ‘‘shall, to the 
maximum extent practicable,’’ and inserting 
‘‘shall’’; and 
(B) by adding at the end the following: 
‘‘(iii) FINANCIAL
MODELS.—To the 
extent that swap dealers and major swap 
participants that are banks are permitted 
to use financial models approved by the 
prudential regulators or the Securities and 
Exchange Commission to calculate min-
imum capital requirements and minimum 
initial and variation margin requirements, 
including the use of non-cash collateral, 
the Commission shall, in consultation with 
the prudential regulators and the Securi-
ties and Exchange Commission, permit the 
use of comparable financial models by 
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swap dealers and major swap participants 
that are not banks.’’. 
SEC. 357. HARMONIZATION WITH THE JUMPSTART OUR 
BUSINESS STARTUPS ACT. 
Within 90 days after the date of the enactment of 
this Act, the Commodity Futures Trading Commission 
shall— 
(1) revise section 4.7(b) of title 17, Code of 
Federal Regulations, in the matter preceding para-
graph (1), to read as follows: 
‘‘(b) Relief available to commodity pool operators. 
Upon filing the notice required by paragraph (d) of this 
section, and subject to compliance with the conditions 
specified in paragraph (d) of this section, any registered 
commodity pool operator who sells participations in a pool 
solely to qualified eligible persons in an offering which 
qualifies for exemption from the registration requirements 
of the Securities Act pursuant to section 4(2) of that Act 
or pursuant to Regulation S, 17 CFR 230.901 et seq., and 
any bank registered as a commodity pool operator in con-
nection with a pool that is a collective trust fund whose 
securities are exempt from registration under the Securi-
ties Act pursuant to section 3(a)(2) of that Act and are 
sold solely to qualified eligible persons, may claim any or 
all of the following relief with respect to such pool:’’; and 
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(2) revise section 4.13(a)(3)(i) of such title to 
read as follows: 
‘‘(i) Interests in the pool are exempt from registration 
under the Securities Act of 1933, and such interests are 
offered and sold pursuant to section 4 of the Securities 
Act of 1933 and the regulations thereunder;’’. 
SEC. 358. BONA FIDE HEDGE DEFINED TO PROTECT END 
USER RISK MANAGEMENT NEEDS. 
Section 4a(c) of the Commodity Exchange Act (7 
U.S.C. 6a(c)) is amended— 
(1) in paragraph (1)— 
(A) by striking ‘‘may’’ and inserting 
‘‘shall’’; and 
(B) by striking ‘‘future for which’’ and in-
serting ‘‘future, to be determined by the Com-
mission, for which either an appropriate swap is 
available or’’; 
(2) in paragraph (2)— 
(A) in the matter preceding subparagraph 
(A), by striking ‘‘subsection (a)(2)’’ and all that 
follows through ‘‘position as’’ and inserting 
‘‘paragraphs (2) and (5) of subsection (a) for 
swaps, contracts of sale for future delivery, or 
options on the contracts or commodities, a bona 
fide hedging transaction or position is’’; and 
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(B) in subparagraph (A)(ii), by striking 
‘‘of risks’’ and inserting ‘‘or management of 
current or anticipated risks’’; and 
(3) by adding at the end the following: 
‘‘(3) The Commission may further define, by 
rule or regulation, what constitutes a bona fide 
hedging transaction, provided that the rule or regu-
lation is consistent with the requirements of sub-
paragraphs (A) and (B) of paragraph (2).’’. 
SEC. 359. CROSS-BORDER REGULATION OF DERIVATIVES 
TRANSACTIONS. 
(a) RULES REQUIRED.—Within 180 days after the 
date of the enactment of this Act, the Commodity Futures 
Trading Commission shall issue rules that address— 
(1) the nature of the connections to the United 
States that require a non-U.S. person to register as 
a swap dealer or major swap participant under the 
Commodity Exchange Act and the regulations issued 
under such Act; 
(2) which of the United States swaps require-
ments shall apply to the swap activities of non-U.S. 
persons, U.S. persons, and their branches, agencies, 
subsidiaries, and affiliates outside of the United 
States and the extent to which such requirements 
shall apply; and 
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(3) the circumstances under which a non-U.S. 
person in compliance with the regulatory require-
ments of a foreign jurisdiction shall be exempt from 
United States swaps requirements. 
(b) RULE IN ACCORDANCE WITH APA REQUIRED.— 
No guidance, memorandum of understanding, or any such 
other agreement may satisfy the requirement to issue a 
rule from the Commission in accordance with section 553 
of title 5, United States Code. 
(c) GENERAL APPLICATION TO COUNTRIES OR AD-
MINISTRATIVE REGIONS HAVING 9 LARGEST MARKETS.— 
(1) GENERAL APPLICATION.—In issuing rules 
under this section, the Commission shall provide 
that a non-U.S. person in compliance with the swaps 
regulatory requirements of a country or administra-
tive region that has 1 of the 9 largest swap markets 
by notional amount in the calendar year preceding 
issuance of such rules, or other foreign jurisdiction 
as determined by the Commission, shall be exempt 
from United States swaps requirements in accord-
ance with the schedule set forth in paragraph (2), 
unless the Commission determines that the regu-
latory requirements of the country or administrative 
region or other foreign jurisdiction are not broadly 
equivalent to United States swaps requirements. 
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(2) EFFECTIVE DATE SCHEDULE.—The exemp-
tion described in paragraph (1) and set forth under 
the rules required by this section shall apply to per-
sons or transactions relating to or involving— 
(A) countries or administrative regions de-
scribed in such paragraph, or any other foreign 
jurisdiction as determined by the Commission, 
accounting for the 5 largest swap markets by 
notional amount in the calendar year preceding 
issuance of such rules, on the date on which 
final rules are issued under this section; and 
(B) the remaining countries or administra-
tive regions described in such paragraph, and 
any other foreign jurisdiction as determined by 
the Commission, 1 year after the date on which 
such rules are issued. 
(3) CRITERIA.—In such rules, the Commission 
shall establish criteria for determining that 1 or 
more categories of regulatory requirements of a 
country or administrative region described in para-
graph (1) or other foreign jurisdiction is not broadly 
equivalent to United States swaps requirements and 
shall determine the appropriate application of cer-
tain United States swap requirements to persons or 
transactions relating to or involving the country or 
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administrative region or other foreign jurisdiction. 
The criteria shall include the scope and objectives of 
the regulatory requirements of a country or adminis-
trative region described in paragraph (1) or other 
foreign jurisdiction as well as the effectiveness of the 
supervisory compliance program administered, and 
the enforcement authority exercised, by the country 
or administrative region or other foreign jurisdiction, 
and such other factors as the Commission, by rule, 
determines to be necessary or appropriate in the 
public interest. 
(4) REQUIRED ASSESSMENT.—Beginning on the 
date on which final rules are issued under this sec-
tion, the Commission shall begin to assess the regu-
latory requirements of countries or administrative 
regions described in paragraph (1), as the Commis-
sion determines appropriate, in accordance with the 
criteria established pursuant to this subsection, to 
determine if 1 or more categories of regulatory re-
quirements of such a country or administrative re-
gion or other foreign jurisdiction is not broadly 
equivalent to United States swaps requirements. 
(d) REPORT
TO CONGRESS.—If the Commission 
makes the determination described in subsection (c)(1) 
that the regulatory requirements of a country or adminis-
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trative region described in such subsection or other foreign 
jurisdiction are not broadly equivalent to United States 
swaps requirements, the Commission shall articulate the 
basis for the determination in a written report transmitted 
to the Committee on Agriculture of the House of Rep-
resentatives and the Committee on Agriculture, Nutrition, 
and Forestry of the Senate within 30 days of the deter-
mination. The determination shall not be effective until 
the transmission of the report. 
(e) DEFINITIONS.—As used in this section and for 
purposes of the rules issued pursuant to this section, the 
following definitions apply: 
(1) The term ‘‘U.S. person’’— 
(A) means— 
(i) any natural person resident in the 
United States; 
(ii) 
any 
partnership, 
corporation, 
trust, or other legal person organized or 
incorporated under the laws of the United 
States or having its principal place of busi-
ness in the United States; 
(iii) any account (whether discre-
tionary or non-discretionary) of a U.S. per-
son; and 
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(iv) any other person as the Commis-
sion may further define to more effectively 
carry out the purposes of this section; and 
(B) does not include the International 
Monetary Fund, the International Bank for Re-
construction and Development, the Inter-Amer-
ican Development Bank, the Asian Development 
Bank, the African Development Bank, the 
United Nations, their agencies and pension 
plans, and any other similar international orga-
nizations and their agencies and pension plans. 
(2) The term ‘‘United States swaps require-
ments’’ means the provisions relating to swaps con-
tained in the Commodity Exchange Act (7 U.S.C. 1a 
et seq.) that were added by title VII of the Dodd- 
Frank Wall Street Reform and Consumer Protection 
Act, and any rules or regulations prescribed by the 
Commodity Futures Trading Commission pursuant 
to such provisions. 
(f) CONFORMING AMENDMENT.—Section 4(c)(1)(A) 
of the Commodity Exchange Act (7 U.S.C. 6(c)(1)(A)) is 
amended by inserting ‘‘or except as necessary to effectuate 
section 361 of the Customer Protection and End User Re-
lief Act,’’ after ‘‘to grant exemptions,’’. 
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Subtitle F—Effective Date 
SEC. 371. EFFECTIVE DATE. 
The amendments made by this title shall take effect 
as if enacted on July 21, 2010. 
Æ 
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