notify the Commission of the emergency rule
before making the emergency rule effective. The
notification shall include a complete explanation
of the emergency involved. If the contract mar-
ket does not provide the Commission with such
notification and explanation before making the
emergency rule effective, the contract market
shall provide the Commission with such notifi-
cation and explanation at the earliest possible
date. The Commission may delegate the power
to receive such notification and explanation to
such individuals as the Commission determines
necessary and appropriate.
‘‘(B) COMMISSION
CONSIDERATION
OF
EMERGENCY RULES.—Within 10 days of the re-
ceipt from a contract market of notification of
an emergency rule and an explanation of the
emergency involved, or as soon as practicable,
the Commission shall determine whether it is
appropriate either—
‘‘(i) to permit the emergency rule to
remain in effect during the pendency of the
emergency; or
‘‘(ii) to suspend the effect of the
emergency rule pending review either
under the procedures of this subsection or
otherwise.
‘‘(C) REPORT
ON
CONSIDERATION.—The
Commission shall submit to the affected con-
tract market, to the Committee on Agriculture
of the House of Representatives and the Com-
mittee on Agriculture, Nutrition, and Forestry
of the Senate a report regarding its determina-
tion (and the basis thereof) with respect to an
emergency rule. If the report is submitted more
than 10 days after the Commission’s receipt of
notification of the emergency rule, the report
shall also contain an explanation of why sub-
mission within such period was not practicable.
A determination by the Commission to suspend
the effect of a rule under this paragraph shall
be subject to judicial review on the same basis
as an emergency determination under section
8a(9). Nothing in this paragraph shall be con-
strued to limit the authority of the Commission
under section 8a(9).’’.
SEC. 105. REGULATION OF AUDIT TRAIL REQUIREMENTS.
Section 5a(b) of the Commodity Exchange Act (7
U.S.C. 7a(b)) is amended—
(1) by striking paragraphs (3), (4), and (6);
(2) by redesignating paragraph (5) as para-
graph (6);
(3) in paragraph (6) (as so redesignated)—
(A) by striking ‘‘paragraph (3)’’ both
places it appears and inserting ‘‘this sub-
section’’ and
(B) by striking ‘‘such paragraph’’ and in-
serting ‘‘this subsection’’; and
(4) by inserting after paragraph (2) the follow-
ing new paragraphs:
‘‘(3) DEVELOPMENT OF STANDARDS FOR TIME
OF EXECUTION.—Not later than nine months after
the date of the enactment of this paragraph, the
Commission shall issue a regulation, after notice and
an opportunity for a hearing, that prescribes an ob-
jective standard or methodology for establishing
whether a contract market meets the requirement
under paragraph (2) that each contract market must
be able to determine, with reasonable accuracy, the
time of execution, in increments of no more than one
minute in length. In issuing the regulation, the Com-
mission—
‘‘(A) shall take into account any unique
features and trading practices of each contract
market and any surveillance mechanisms be-
yond a manual trade recordation system adopt-
ed by each contract market;
‘‘(B) shall not prescribe a specific means
or technology for meeting the accuracy or any
other requirement.
‘‘(4) USE
OF
TRADE
RECORDATION
DATA.—
Consistent with Commission regulations, the audit
trail system for a contract market shall rely upon
trade recordation data that are—
‘‘(A) entered by floor traders, floor brokers
or others in nonerasable ink or other form that
cannot be altered without leaving a complete
record of such alteration; and
‘‘(B) continually provided to the contract
market during the trading day in intervals of
not more than 30 minutes for processing by the
contract market.
‘‘(5) USE OF TIME STAMPS.—The audit trail
system for a contract market shall rely upon accu-
rate time stamps or similarly reliable devices for re-
cording when a customer’s order reaches the trading
floor and when that order is reported from the floor
as having been executed.’’.
SEC. 106. USE OF BENEFIT-COST ANALYSIS.
Section 12 of the Commodity Exchange Act (7 U.S.C.
16) is amended by adding at the end the following new
subsection:
‘‘(h) USE OF BENEFIT-COST ANALYSIS.—
‘‘(1) ANALYSIS REQUIRED.—Except as provided
in paragraph (4), the Commission shall not adopt
any rule, regulation, or order, or take any other reg-
ulatory action, if the benefits of such an action do
not exceed the costs. The Commission shall make
this benefit-cost determination based upon the infor-
mation available in the record of such action main-
tained by the Commission.
‘‘(2) BENEFITS
DEFINED.—For purposes of
this subsection, the term ‘benefits’ means the signifi-
cant, reasonably identifiable, favorable effects (in-
cluding the impact on market liquidity and effi-
ciency, financial and market integrity, customer pro-
tection, and fair competition) that are reasonably ex-
pected to result, directly or indirectly, from the
adoption of a rule or other agency action.
‘‘(3) COSTS DEFINED.—For purposes of this
subsection, the term ‘costs’ means the significant,
reasonably identifiable, adverse effects (including the
impact on market liquidity and efficiency, financial
and market integrity, customer protection, and fair
competition) that are reasonably expected to result,
directly or indirectly, from the adoption of a rule or
other agency action.
‘‘(4) EXCEPTION FOR CERTAIN RULES AND AC-
TIONS.—This subsection shall not apply to the fol-
lowing:
‘‘(A) Any adjudicatory or formal rule-
making determinations made by the Commis-
sion after a hearing on the record.
‘‘(B) Any emergency determination made
by the Commission under section 8a(a)(9).
‘‘(C) Any review or action taken by the
Commission on appeal from a contract market
disciplinary action in accordance with section
8c.
‘‘(D) Any Commission approvals of rules
or rule changes in accordance with section
5a(c).
‘‘(E) Any Commission approvals of con-
tract market designation applications under sec-
tion 6.’’.
SEC. 107. COMMISSION OVERSIGHT AND DEFICIENCY OR-
DERS.
(a) REPEAL.—Section 8e of the Commodity Ex-
change Act (7 U.S.C. 12e) is repealed.
(b) CONFORMING AMENDMENTS.—(1) Section 4j(a)
of the Commodity Exchange Act (7 U.S.C. 6j(a)) is
amended—
(1) in paragraph (3)(B)(ii), by striking ‘‘, such
as those described in section 8e,’’; and
(2) in paragraph (5)(A)(ii), by striking ‘‘, such
as those described in section 8e,’’.
TITLE II—TREASURY
AMENDMENT CLARIFICATION
SEC. 201. TREASURY AMENDMENT CLARIFICATION.
Section 2(a)(1)(A)(ii) of the Commodity Exchange
Act (7 U.S.C. 2(ii)) is amended—
(1) by inserting ‘‘or transactions involving’’
after ‘‘transactions in’’;
(2) by inserting ‘‘to the general public’’ after
‘‘sale thereof’’; and
(3) by adding at the end the following new sen-
tence: ‘‘For purposes of this clause only, the term
‘board of trade’, as it applies to transactions in or
involving foreign currency, means any facility where-
by standardized contracts are systematically mar-
keted to retail investors (other than individuals and
entities described as eligible participants under the
regulations of the Commission published in the Fed-
eral Register on January 22, 1993, as codified in
section 35.1(b)(2) of part 35 of title 17, Code of
Federal Regulations).’’.
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