‘‘(iii)(I) Notwithstanding item (cc) of 
clause (i)(II), a particular person shall not 
participate in the solicitation or rec-
ommendation of any agreement, contract, 
or transaction described in clause (i) en-
tered into with or to be entered into with 
a person described in such item, unless the 
particular person—
‘‘(aa) is registered in such capac-
ity as the Commission by rule, regula-
tion, or order shall determine; and 
‘‘(bb) is a member of a futures 
association registered under section 
17. 
‘‘(II) Subclause (I) shall not apply 
to—
‘‘(aa) any person described in 
any of item (aa), (bb), (dd), (ee), or 
(ff) of subparagraph (B)(i)(II); or 
‘‘(bb) any such person’s associ-
ated persons. 
‘‘(C)(i)(I) This subparagraph shall apply to 
any agreement, contract, or transaction in for-
eign currency that is—
‘‘(aa) offered to, or entered into 
with, a person that is not an eligible 
contract participant (except that this 
subparagraph shall not apply if the 
counterparty, or the person offering to 
be the counterparty, of the person 
that is not an eligible contract partici-
pant is a person described in any of 
item (aa), (bb), (dd), (ee), or (ff) of 
subparagraph (B)(i)(II)); and 
‘‘(bb) offered, or entered into, on 
a leveraged or margined basis, or fi-
nanced 
by 
the 
offeror, 
the 
counterparty, or a person acting in 
concert 
with 
the 
offeror 
or 
counterparty on a similar basis. 
‘‘(II) Subclause (I) shall not apply to—
‘‘(aa) a security that is not a security 
futures product; or 
‘‘(bb) a contract of sale that—
‘‘(AA) results in actual delivery 
within 2 days; or 
‘‘(BB) creates an enforceable ob-
ligation to deliver between a seller and 
buyer that have the ability to deliver
and accept delivery, respectively, in 
connection with their line of business. 
‘‘(ii)(I) Agreements, contracts, or trans-
actions described in clause (i) of this subpara-
graph shall be subject to subsection (a)(1)(B) 
of this section and sections 4(b), 4b, 4c(b), 4o, 
6(c) and 6(d) (except to the extent that sections 
6(c) and 6(d) prohibit manipulation of the mar-
ket price of any commodity in interstate com-
merce, or for future delivery on or subject to 
the rules of any market), 6c, 6d, 8(a), 13(a), 
and 13(b). 
‘‘(II) Subclause (I) of this clause shall not 
apply to—
‘‘(aa) any person described in any of 
item (aa), (bb), (dd), (ee), or (ff) of sub-
paragraph (B)(i)(II); or 
‘‘(bb) any such person’s associated 
persons. 
‘‘(iii)(I) A person shall not participate in 
the solicitation or recommendation of any 
agreement, contract, or transaction described in 
clause (i) of this subparagraph unless the per-
son is registered in such capacity as the Com-
mission by rule, regulation or order shall deter-
mine, and is a member of a futures association 
registered under section 17. 
‘‘(II) Subclause (I) shall not apply to any 
person—
‘‘(aa) any person described in any of 
item (aa), (bb), (dd), (ee), or (ff) of sub-
paragraph (B)(i)(II); or 
‘‘(bb) any such person’s associated 
persons. 
‘‘(iv) Sections 4(b) and 4b shall apply to 
any agreement, contract, or transaction de-
scribed in clause (i) of this subparagraph as if 
the agreement, contract, or transaction were a 
contract of sale of a commodity for future deliv-
ery. 
‘‘(v) This subparagraph shall not be con-
strued to limit any jurisdiction that the Com-
mission may otherwise have under any other 
provision of this Act over an agreement, con-
tract, or transaction that is a contract of sale 
of a commodity for future delivery. 
‘‘(vi) This subparagraph shall not be con-
strued to limit any jurisdiction that the Com-
mission or the Securities and Exchange Com-
mission may otherwise have under any other
provision of this Act with respect to security fu-
tures products and persons effecting trans-
actions in security futures products.’’. 
(b) EFFECTIVE
DATE.—Clause (iii) of section 
2(c)(2)(B) and clause (iii) of section 2(c)(2)(C) of the 
Commodity Exchange Act, as amended by subsection (a) 
of this section, shall be effective 120 days after the date 
of the enactment of this Act or such other time as the 
Commodity Futures Trading Commission shall determine. 
SEC. 102. ANTIFRAUD AUTHORITY. 
Section 4b of the Commodity Exchange Act (7 U.S.C. 
6b) is amended—
(1) by redesignating subsections (b) and (c) as 
subsections (c) and (d), respectively; and 
(2) by striking ‘‘SEC. 4b.’’ and all that follows 
through the end of subsection (a) and inserting the 
following: 
‘‘SEC. 4b. CONTRACTS DESIGNED TO DEFRAUD OR MIS-
LEAD. 
‘‘(a) UNLAWFUL ACTIONS.—It shall be unlawful—
‘‘(1) for any person, in or in connection with 
any order to make, or the making of, any contract 
of sale of any commodity in interstate commerce or 
for future delivery that is made, or to be made, on
or subject to the rules of a designated contract mar-
ket, for or on behalf of any other person; or 
‘‘(2) for any person, in or in connection with 
any order to make, or the making of, any contract 
of sale of any commodity for future delivery, or 
other agreement, contract, or transaction subject to 
paragraphs (1) and (2) of section 5a(g), that is 
made, or to be made, for or on behalf of, or with, 
any other person, other than on or subject to the 
rules of a designated contract market—
‘‘(A) to cheat or defraud or attempt to 
cheat or defraud the other person; 
‘‘(B) willfully to make or cause to be made 
to the other person any false report or state-
ment or willfully to enter or cause to be entered 
for the other person any false record; 
‘‘(C) willfully to deceive or attempt to de-
ceive the other person by any means whatsoever 
in regard to any order or contract or the dis-
position or execution of any order or contract, 
or in regard to any act of agency performed, 
with respect to any order or contract for or, in 
the case of paragraph (2), with the other per-
son; or
‘‘(D)(i) to bucket an order if the order is 
represented by the person as an order to be ex-
ecuted, or is required to be executed, on or sub-
ject to the rules of a designated contract mar-
ket; or 
‘‘(ii) to fill an order by offset against the 
order or orders of any other person, or willfully 
and knowingly and without the prior consent of 
the other person to become the buyer in respect 
to any selling order of the other person, or be-
come the seller in respect to any buying order 
of the other person, if the order is represented 
by the person as an order to be executed, or is 
required to be executed, on or subject to the 
rules of a designated contract market unless the 
order is executed in accordance with the rules 
of the designated contract market. 
‘‘(b) CLARIFICATION.—Subsection (a)(2) of this sec-
tion shall not obligate any person, in or in connection with 
a transaction in a contract of sale of a commodity for fu-
ture delivery, or other agreement, contract or transaction 
subject to paragraphs (1) and (2) of section 5a(g), with 
another person, to disclose to the other person nonpublic 
information that may be material to the market price, 
rate, or level of the commodity or transaction, except as
necessary to make any statement made to the other person 
in or in connection with the transaction, not misleading 
in any material respect.’’. 
SEC. 103. PORTFOLIO MARGINING AND SECURITY INDEX 
ISSUES. 
(a) The agencies represented on the President’s 
Working Group on Financial Markets shall work to ensure 
that the Securities and Exchange Commission (SEC), the 
Commodity Futures Trading Commission (CFTC), or 
both, as appropriate, have taken the actions required 
under subsection (b). 
(b) The SEC, the CFTC, or both, as appropriate, 
shall take action under their existing authorities to per-
mit—
(1) by September 30, 2006, risk-based portfolio 
margining for security options and security futures 
products; and 
(2) by June 30, 2006, the trading of futures on 
certain security indexes by resolving issues related to 
debt security indexes and foreign security indexes. 
SEC. 104. AUTHORIZATION OF APPROPRIATIONS. 
Section 12(d) of the Commodity Exchange Act (7 
U.S.C. 16(d)) is amended to read as follows:
‘‘(d) There are authorized to be appropriated such 
sums as are necessary to carry out this Act for each of 
the fiscal years 2006 through 2010.’’
SEC. 105. TECHNICAL AND CONFORMING AMENDMENTS. 
(a) Section 4a(e) of the Commodity Exchange Act (7 
U.S.C 6a(e)) is amended in the last proviso by striking 
‘‘section 9(c)’’ and inserting ‘‘section 9(a)(5)’’. 
(b) Section 4f(c)(4)(B)(i) of such Act (7 U.S.C. 
6f(c)(4)(B)(i)) is amended by striking ‘‘compiled’’ and in-
serting ‘‘complied’’. 
(c) Section 4k of such Act (7 U.S.C. 6k) is amended 
by redesignating the second paragraph (5) as paragraph 
(6). 
(d) The Commodity Exchange Act is amended—
(1) by redesignating the first section 4p (7 
U.S.C. 6o–1), as added by section 121 of the Com-
modity Futures Modernization Act of 2000, as sec-
tion 4q; and 
(2) by moving such section to after the second 
section 4p, as added by section 206 of Public Law 
93–446. 
(e) Subsections (a)(1) and (d)(1) of section 5c of such 
Act (7 U.S.C. 7a–2(a)(1), (d)(1)) are each amended by 
striking ‘‘5b(d)(2)’’ and inserting ‘‘5b(c)(2)’’.
(f) Sections 5c(f) and 17(r) of such Act (7 U.S.C. 
7a–2(f), 21(r)) are each amended by striking ‘‘4d(3)’’ and 
inserting ‘‘4d(c)’’. 
(g) Section 8(a)(1) of such Act (7 U.S.C. 12(a)(1)) 
is amended in the matter following subparagraph (B)—
(1) by striking ‘‘commenced’’ the 2nd place it 
appears; and 
(2) by inserting ‘‘commenced’’ after ‘‘in a judi-
cial proceeding’’. 
(h) Section 22(a)(2) of such Act (7 U.S.C. 25(a)(2)) 
is amended by striking ‘‘5b(b)(1)(E)’’ and inserting 
‘‘5b(c)(2)(H)’’. 
TITLE II—NATURAL GAS PRICE 
TRANSPARENCY 
SEC. 201. MARKET SURVEILLANCE. 
(a) IN GENERAL.—The Commodity Futures Trading 
Commission (in this section referred to as the ‘‘Commis-
sion’’) shall detect and deter manipulation and attempted 
manipulation and increase the transparency of the pricing 
of natural gas by conducting surveillance of trading in 
contracts for natural gas. 
(b) CERTAIN
EVENTS
REQUIRED
TO
BE
RE-
VIEWED.—
(1) REQUIREMENT.—In the event of a signifi-
cant and highly unusual change in the settlement
price of any physically delivered natural gas futures 
contract traded on a contract market (within the 
meaning of section 5 of the Commodity Exchange 
Act) or derivatives transaction execution facility 
(within the meaning of section 5a of such Act), the 
Commission shall conduct a review of the factors 
that caused the price movement in order to deter-
mine if manipulation or attempted manipulation in 
violation of such Act has occurred. 
(2) CERTAIN FACTORS REQUIRED TO BE CON-
SIDERED.—The Commission shall consider in its re-
view, among other things and as appropriate to the 
circumstances, the following: 
(A) Prices and price relationships in the 
futures and cash markets. 
(B) Market information, and cash market 
supply and demand factors which may be rel-
evant to the price event. 
(C) Large futures and options market po-
sitions and large futures and options market 
transactions on the contract market or deriva-
tives transaction execution facility. 
(D) Any related contract, agreement or 
transaction in natural gas.