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† HR 4173 EAS 
‘‘(c) APPLICABILITY.—For purposes of this section, the 
swaps, futures, and cash or spot transactions and positions 
of any person shall include the swaps, futures, and cash 
or spot transactions and positions of any persons directly 
or indirectly controlled by the person. 
‘‘(d) SIGNIFICANT PRICE DISCOVERY FUNCTION.—In 
making a determination as to whether a swap performs or 
affects a significant price discovery function with respect 
to registered entities, the Commission shall consider the fac-
tors described in section 4a(a)(3).’’. 
SEC. 731. REGISTRATION AND REGULATION OF SWAP DEAL-
ERS AND MAJOR SWAP PARTICIPANTS. 
The Commodity Exchange Act (7 U.S.C. 1 et seq.) is 
amended by inserting after section 4r (as added by section 
729) the following: 
‘‘SEC. 4s. REGISTRATION AND REGULATION OF SWAP DEAL-
ERS AND MAJOR SWAP PARTICIPANTS. 
‘‘(a) REGISTRATION.— 
‘‘(1) SWAP DEALERS.—It shall be unlawful for 
any person to act as a swap dealer unless the person 
is registered as a swap dealer with the Commission. 
‘‘(2) MAJOR SWAP PARTICIPANTS.—It shall be 
unlawful for any person to act as a major swap par-
ticipant unless the person is registered as a major 
swap participant with the Commission.
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† HR 4173 EAS 
‘‘(b) REQUIREMENTS.— 
‘‘(1) IN GENERAL.—A person shall register as a 
swap dealer or major swap participant by filing a 
registration application with the Commission. 
‘‘(2) CONTENTS.— 
‘‘(A) IN GENERAL.—The application shall 
be made in such form and manner as prescribed 
by the Commission, and shall contain such infor-
mation, as the Commission considers necessary 
concerning the business in which the applicant is 
or will be engaged. 
‘‘(B) CONTINUAL
REPORTING.—A person 
that is registered as a swap dealer or major 
swap participant shall continue to submit to the 
Commission reports that contain such informa-
tion pertaining to the business of the person as 
the Commission may require. 
‘‘(3) EXPIRATION.—Each registration under this 
section shall expire at such time as the Commission 
may prescribe by rule or regulation. 
‘‘(4) RULES.—Except as provided in subsections 
(c), (e), and (f), the Commission may prescribe rules 
applicable to non-bank swap dealers and non-bank 
major swap participants, including rules that limit
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† HR 4173 EAS 
the activities of swap dealers and major swap partici-
pants. 
‘‘(5) TRANSITION.—Rules under this section shall 
provide for the registration of swap dealers and major 
swap participants not later than 1 year after the date 
of enactment of the Wall Street Transparency and Ac-
countability Act of 2010. 
‘‘(6) STATUTORY DISQUALIFICATION.—Except to 
the extent otherwise specifically provided by rule, reg-
ulation, or order, it shall be unlawful for a swap 
dealer or a major swap participant to permit any 
person associated with a swap dealer or a major swap 
participant who is subject to a statutory disqualifica-
tion to effect or be involved in effecting swaps on be-
half of the swap dealer or major swap participant, if 
the swap dealer or major swap participant knew, or 
in the exercise of reasonable care should have known, 
of the statutory disqualification. 
‘‘(c) DUAL REGISTRATION.— 
‘‘(1) SWAP
DEALER.—Any person that is re-
quired to be registered as a swap dealer under this 
section shall register with the Commission regardless 
of whether the person also is a depository institution 
or is registered with the Securities and Exchange 
Commission as a security-based swap dealer.
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† HR 4173 EAS 
‘‘(2) MAJOR
SWAP
PARTICIPANT.—Any person 
that is required to be registered as a major swap par-
ticipant under this section shall register with the 
Commission regardless of whether the person also is 
a depository institution or is registered with the Se-
curities and Exchange Commission as a major secu-
rity-based swap participant. 
‘‘(d) RULEMAKINGS.— 
‘‘(1) IN GENERAL.—The Commission shall adopt 
rules for persons that are registered as swap dealers 
or major swap participants under this section. 
‘‘(2) EXCEPTION
FOR
PRUDENTIAL
REQUIRE-
MENTS.— 
‘‘(A) IN GENERAL.—The Commission may 
not prescribe rules imposing prudential require-
ments on swap dealers or major swap partici-
pants for which there is a prudential regulator. 
‘‘(B) APPLICABILITY.—Subparagraph (A) 
does not limit the authority of the Commission 
to prescribe appropriate business conduct, re-
porting, and recordkeeping requirements to pro-
tect investors. 
‘‘(e) CAPITAL AND MARGIN REQUIREMENTS.— 
‘‘(1) IN GENERAL.—
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† HR 4173 EAS 
‘‘(A) SWAP DEALERS AND MAJOR SWAP PAR-
TICIPANTS
THAT
ARE
DEPOSITORY
INSTITU-
TIONS.—Each registered swap dealer and major 
swap participant that is a depository institu-
tion, as that term is defined in section 3 of the 
Federal Deposit Insurance Act (12 U.S.C. 1813), 
shall meet such minimum capital requirements 
and minimum initial and variation margin re-
quirements as the appropriate Federal banking 
agency shall by rule or regulation prescribe 
under paragraph (2)(A) to help ensure the safety 
and soundness of the swap dealer or major swap 
participant. 
‘‘(B) SWAP DEALERS AND MAJOR SWAP PAR-
TICIPANTS THAT ARE NOT DEPOSITORY INSTITU-
TIONS.—Each registered swap dealer and major 
swap participant that is not a depository insti-
tution, as that term is defined in section 3 of the 
Federal Deposit Insurance Act (12 U.S.C. 1813), 
shall meet such minimum capital requirements 
and minimum initial and variation margin re-
quirements as the Commission and the Securities 
and Exchange Commission shall by rule or regu-
lation prescribe under paragraph (2)(B) to help
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† HR 4173 EAS 
ensure the safety and soundness of the swap deal-
er or major swap participant. 
‘‘(2) RULES.— 
‘‘(A) SWAP DEALERS AND MAJOR SWAP PAR-
TICIPANTS
THAT
ARE
DEPOSITORY
INSTITU-
TIONS.—The appropriate Federal banking agen-
cies, in consultation with the Commission and 
the Securities and Exchange Commission, shall 
adopt rules imposing capital and margin re-
quirements under this subsection for swap deal-
ers and major swap participants that are deposi-
tory institutions, as that term is defined in sec-
tion 3 of the Federal Deposit Insurance Act (12 
U.S.C. 1813). 
‘‘(B) SWAP DEALERS AND MAJOR SWAP PAR-
TICIPANTS THAT ARE NOT DEPOSITORY INSTITU-
TIONS.—The Commission shall adopt rules im-
posing capital and margin requirements under 
this subsection for swap dealers and major swap 
participants that are not depository institutions, 
as that term is defined in section 3 of the Fed-
eral Deposit Insurance Act (12 U.S.C. 1813). 
‘‘(3) CAPITAL.— 
‘‘(A) SWAP DEALERS AND MAJOR SWAP PAR-
TICIPANTS
THAT
ARE
DEPOSITORY
INSTITU-
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† HR 4173 EAS 
TIONS.—The capital requirements prescribed 
under paragraph (2)(A) for swap dealers and 
major swap participants that are depository in-
stitutions shall contain— 
‘‘(i) a capital requirement that is 
greater than zero for swaps that are cleared 
by a registered derivatives clearing organi-
zation or a derivatives clearing organiza-
tion that is exempt from registration under 
section 5b(j); and 
‘‘(ii) to offset the greater risk to the 
swap dealer or major swap participant and 
to the financial system arising from the use 
of swaps that are not cleared, substantially 
higher capital requirements for swaps that 
are not cleared by a registered derivatives 
clearing organization or a derivatives clear-
ing organization that is exempt from reg-
istration under section 5b(j) than for swaps 
that are cleared. 
‘‘(B) SWAP DEALERS AND MAJOR SWAP PAR-
TICIPANTS THAT ARE NOT DEPOSITORY INSTITU-
TIONS.—The capital requirements prescribed 
under paragraph (2)(B) for swap dealers and 
major swap participants that are not depository
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† HR 4173 EAS 
institutions shall be as strict as or stricter than 
the capital requirements prescribed for swap 
dealers and major swap participants that are 
depository institutions under paragraph (2)(A). 
‘‘(C) RULE OF CONSTRUCTION.— 
‘‘(i) IN GENERAL.—Nothing in this sec-
tion shall limit, or be construed to limit, the 
authority— 
‘‘(I) of the Commission to set fi-
nancial responsibility rules for a fu-
tures commission merchant or intro-
ducing broker registered pursuant to 
section 
4f(a) 
(except 
for 
section 
4f(a)(3)) in accordance with section 
4f(b); or 
‘‘(II) of the Securities and Ex-
change Commission to set financial re-
sponsibility rules for a broker or dealer 
registered pursuant to section 15(b) of 
the Securities Exchange Act of 1934 
(15 U.S.C. 78o(b)) (except for section 
15(b)(11) of that Act (15 U.S.C. 
78o(b)(11)) in accordance with section 
15(c)(3) of the Securities Exchange Act 
of 1934 (15 U.S.C. 78o(c)(3)).
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† HR 4173 EAS 
‘‘(ii) 
FUTURES
COMMISSION
MER-
CHANTS AND OTHER DEALERS.—A futures 
commission merchant, introducing broker, 
broker, or dealer shall maintain sufficient 
capital to comply with the stricter of any 
applicable capital requirements to which 
such futures commission merchant, intro-
ducing broker, broker, or dealer is subject to 
under this Act or the Securities Exchange 
Act of 1934 (15 U.S.C. 78a et seq.). 
‘‘(4) MARGIN.— 
‘‘(A) SWAP DEALERS AND MAJOR SWAP PAR-
TICIPANTS
THAT
ARE
DEPOSITORY
INSTITU-
TIONS.—The appropriate Federal banking agen-
cy for swap dealers and major swap participants 
that are depository institutions shall impose both 
initial and variation margin requirements in 
accordance with paragraph (2)(A) on all swaps 
that are not cleared by a registered derivatives 
clearing organization or a derivatives clearing 
organization that is exempt from registration 
under section 5b(j). 
‘‘(B) SWAP DEALERS AND MAJOR SWAP PAR-
TICIPANTS THAT ARE NOT DEPOSITORY INSTITU-
TIONS.—The Commission and the Securities and
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† HR 4173 EAS 
Exchange Commission shall impose both initial 
and variation margin requirements in accord-
ance with paragraph (2)(B) for swap dealers 
and major swap participants that are not depos-
itory institutions on all swaps that are not 
cleared by a registered derivatives clearing orga-
nization or a derivatives clearing organization 
that is exempt from registration under section 
5b(j). Any such initial and variation margin re-
quirements shall be as strict as or stricter than 
the margin requirements prescribed under para-
graph (4)(A). 
‘‘(5) MARGIN
REQUIREMENTS.—In prescribing 
margin requirements under this subsection, the ap-
propriate Federal banking agency with respect to 
swap dealers and major swap participants that are 
depository institutions and the Commission with re-
spect to swap dealers and major swap participants 
that are not depository institutions may permit the 
use of noncash collateral, as the agency or the Com-
mission determines to be consistent with— 
‘‘(A) preserving the financial integrity of 
markets trading swaps; and 
‘‘(B) preserving the stability of the United 
States financial system.
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† HR 4173 EAS 
‘‘(6) COMPARABILITY OF CAPITAL AND MARGIN 
REQUIREMENTS.— 
‘‘(A) IN GENERAL.—The appropriate Fed-
eral banking agencies, the Commission, and the 
Securities and Exchange Commission shall peri-
odically (but not less frequently than annually) 
consult on minimum capital requirements and 
minimum initial and variation margin require-
ments. 
‘‘(B) COMPARABILITY.—The entities de-
scribed in subparagraph (A) shall, to the max-
imum extent practicable, establish and maintain 
comparable minimum capital requirements and 
minimum initial and variation margin require-
ments, including the use of non cash collateral, 
for— 
‘‘(i) swap dealers; and 
‘‘(ii) major swap participants. 
‘‘(7) REQUESTED MARGIN.—If any party to a 
swap that is exempt from the margin requirements of 
paragraph (4)(A)(i) pursuant to the provisions of 
paragraph (4)(A)(ii), or from the margin require-
ments of paragraph (4)(B)(i) pursuant to the provi-
sions of paragraph (4)(B)(ii), requests that such swap 
be margined, then—
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† HR 4173 EAS 
‘‘(A) the exemption shall not apply; and 
‘‘(B) the counterparty to such swap shall 
provide the requested margin. 
‘‘(8) 
APPLICABILITY
WITH
RESPECT
TO 
COUNTERPARTIES.—Paragraph (4) shall not apply to 
initial and variation margin for swaps in which 1 of 
the counterparties is not— 
‘‘(A) a swap dealer; 
‘‘(B) a major swap participant; or 
‘‘(C) a financial entity as described in sec-
tion 2(h)(9)(A)(ii), and such counterparty is eli-
gible for and utilizing the commercial end user 
clearing exemption under section 2(h)(9). 
‘‘(f) REPORTING AND RECORDKEEPING.— 
‘‘(1) IN GENERAL.—Each registered swap dealer 
and major swap participant— 
‘‘(A) shall make such reports as are re-
quired by the Commission by rule or regulation 
regarding the transactions and positions and fi-
nancial condition of the registered swap dealer 
or major swap participant; 
‘‘(B)(i) for which there is a prudential regu-
lator, shall keep books and records of all activi-
ties related to the business as a swap dealer or 
major swap participant in such form and man-
646 
† HR 4173 EAS 
ner and for such period as may be prescribed by 
the Commission by rule or regulation; and 
‘‘(ii) for which there is no prudential regu-
lator, shall keep books and records in such form 
and manner and for such period as may be pre-
scribed by the Commission by rule or regulation; 
and 
‘‘(C) shall keep books and records described 
in subparagraph (B) open to inspection and ex-
amination by any representative of the Commis-
sion. 
‘‘(2) RULES.—The Commission shall adopt rules 
governing reporting and recordkeeping for swap deal-
ers and major swap participants. 
‘‘(g) DAILY TRADING RECORDS.— 
‘‘(1) IN GENERAL.—Each registered swap dealer 
and major swap participant shall maintain daily 
trading records of the swaps of the registered swap 
dealer and major swap participant and all related 
records (including related cash or forward trans-
actions) and recorded communications, including 
electronic mail, instant messages, and recordings of 
telephone calls, for such period as may be required by 
the Commission by rule or regulation.
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† HR 4173 EAS 
‘‘(2) INFORMATION REQUIREMENTS.—The daily 
trading records shall include such information as the 
Commission shall require by rule or regulation. 
‘‘(3) COUNTERPARTY RECORDS.—Each registered 
swap dealer and major swap participant shall main-
tain daily trading records for each counterparty in a 
manner and form that is identifiable with each swap 
transaction. 
‘‘(4) AUDIT TRAIL.—Each registered swap dealer 
and major swap participant shall maintain a com-
plete audit trail for conducting comprehensive and 
accurate trade reconstructions. 
‘‘(5) RULES.—The Commission shall adopt rules 
governing daily trading records for swap dealers and 
major swap participants. 
‘‘(h) BUSINESS CONDUCT STANDARDS.— 
‘‘(1) IN GENERAL.—Each registered swap dealer 
and major swap participant shall conform with such 
business conduct standards as may be prescribed by 
the Commission by rule or regulation that relate to— 
‘‘(A) fraud, manipulation, and other abu-
sive practices involving swaps (including swaps 
that are offered but not entered into);
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† HR 4173 EAS 
‘‘(B) diligent supervision of the business of 
the registered swap dealer and major swap par-
ticipant; 
‘‘(C) adherence to all applicable position 
limits; and 
‘‘(D) such other matters as the Commission 
determines to be appropriate. 
‘‘(2) SPECIAL RULE; FIDUCIARY DUTIES TO CER-
TAIN ENTITIES.— 
‘‘(A) GOVERNMENTAL
ENTITIES.—A swap 
dealer that provides advice regarding, or offers to 
enter into, or enters into a swap with a State, 
State agency, city, county, municipality, or 
other political subdivision of a State or a Fed-
eral agency shall have a fiduciary duty to the 
State, State agency, city, county, municipality, 
or other political subdivision of a State, or the 
Federal agency, as appropriate. 
‘‘(B) PENSION
PLANS; ENDOWMENTS; RE-
TIREMENT PLANS.—A swap dealer that provides 
advice regarding, or offers to enter into, or enters 
into a swap with a pension plan, endowment, or 
retirement plan shall have a fiduciary duty to 
the pension plan, endowment, or retirement 
plan, as appropriate.
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† HR 4173 EAS 
‘‘(3) BUSINESS
CONDUCT
REQUIREMENTS.— 
Business conduct requirements adopted by the Com-
mission shall— 
‘‘(A) establish the standard of care for a 
swap dealer or major swap participant to verify 
that any counterparty meets the eligibility 
standards for an eligible contract participant; 
‘‘(B) require disclosure by the swap dealer 
or major swap participant to any counterparty 
to the transaction (other than a swap dealer, 
major swap participant, security-based swap 
dealer, or major security-based swap partici-
pant) of— 
‘‘(i) information about the material 
risks and characteristics of the swap; 
‘‘(ii) the source and amount of any fees 
or other material remuneration that the 
swap dealer or major swap participant 
would directly or indirectly expect to receive 
in connection with the swap; 
‘‘(iii) any other material incentives or 
conflicts of interest that the swap dealer or 
major swap participant may have in con-
nection with the swap; and
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† HR 4173 EAS 
‘‘(iv)(I) for cleared swaps, upon the re-
quest of the counterparty, the daily mark 
from the appropriate derivatives clearing 
organization; and 
‘‘(II) for uncleared swaps, the daily 
mark of the swap dealer or the major swap 
participant; 
‘‘(C) establish a standard of conduct for a 
swap dealer or major swap participant to com-
municate in a fair and balanced manner based 
on principles of fair dealing and good faith; 
‘‘(D) establish a standard of conduct for a 
swap dealer or major swap participant, with re-
spect to a counterparty that is an eligible con-
tract participant within the meaning of sub-
clause (I) or (II) of clause (vii) of section 1a(18) 
of this Act, to have a reasonable basis to believe 
that the counterparty has an independent rep-
resentative that— 
‘‘(i) has sufficient knowledge to evalu-
ate the transaction and risks; 
‘‘(ii) is not subject to a statutory dis-
qualification; 
‘‘(iii) is independent of the swap dealer 
or major swap participant;
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† HR 4173 EAS 
‘‘(iv) undertakes a duty to act in the 
best interests of the counterparty it rep-
resents; 
‘‘(v) makes appropriate disclosures; 
and 
‘‘(vi) will provide written representa-
tions to the eligible contract participant re-
garding fair pricing and the appropriate-
ness of the transaction; and 
‘‘(E) establish such other standards and re-
quirements as the Commission may determine 
are appropriate in the public interest, for the 
protection of investors, or otherwise in further-
ance of the purposes of this Act. 
‘‘(4) RULES.—The Commission shall prescribe 
rules under this subsection governing business conduct 
standards for swap dealers and major swap partici-
pants. 
‘‘(i) DOCUMENTATION
AND BACK OFFICE STAND-
ARDS.— 
‘‘(1) IN GENERAL.—Each registered swap dealer 
and major swap participant shall conform with such 
standards as may be prescribed by the Commission by 
rule or regulation that relate to timely and accurate
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† HR 4173 EAS 
confirmation, processing, netting, documentation, and 
valuation of all swaps. 
‘‘(2) RULES.—The Commission shall adopt rules 
governing documentation and back office standards 
for swap dealers and major swap participants. 
‘‘(j) DUTIES.—Each registered swap dealer and major 
swap participant at all times shall comply with the fol-
lowing requirements: 
‘‘(1) MONITORING OF TRADING.—The swap deal-
er or major swap participant shall monitor its trad-
ing in swaps to prevent violations of applicable posi-
tion limits. 
‘‘(2) RISK
MANAGEMENT
PROCEDURES.—The 
swap dealer or major swap participant shall establish 
robust and professional risk management systems ade-
quate for managing the day-to-day business of the 
swap dealer or major swap participant. 
‘‘(3) DISCLOSURE OF GENERAL INFORMATION.— 
The swap dealer or major swap participant shall dis-
close to the Commission and to the prudential regu-
lator for the swap dealer or major swap participant, 
as applicable, information concerning— 
‘‘(A) terms and conditions of its swaps; 
‘‘(B) swap trading operations, mechanisms, 
and practices;
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† HR 4173 EAS 
‘‘(C) financial integrity protections relating 
to swaps; and 
‘‘(D) other information relevant to its trad-
ing in swaps. 
‘‘(4) ABILITY
TO
OBTAIN
INFORMATION.—The 
swap dealer or major swap participant shall— 
‘‘(A) establish and enforce internal systems 
and procedures to obtain any necessary informa-
tion to perform any of the functions described in 
this section; and 
‘‘(B) provide the information to the Com-
mission and to the prudential regulator for the 
swap dealer or major swap participant, as ap-
plicable, on request. 
‘‘(5) CONFLICTS OF INTEREST.—The swap dealer 
and major swap participant shall implement conflict- 
of-interest systems and procedures that— 
‘‘(A) establish structural and institutional 
safeguards to ensure that the activities of any 
person within the firm relating to research or 
analysis of the price or market for any com-
modity or swap or acting in a role of providing 
clearing activities or making determinations as 
to accepting clearing customers are separated by 
appropriate informational partitions within the
654 
† HR 4173 EAS 
firm from the review, pressure, or oversight of 
persons whose involvement in pricing, trading, 
or clearing activities might potentially bias their 
judgment or supervision and contravene the core 
principles of open access and the business con-
duct standards described in this Act; and 
‘‘(B) address such other issues as the Com-
mission determines to be appropriate. 
‘‘(6) ANTITRUST CONSIDERATIONS.—Unless nec-
essary or appropriate to achieve the purposes of this 
Act, a swap dealer or major swap participant shall 
not— 
‘‘(A) adopt any process or take any action 
that results in any unreasonable restraint of 
trade; or 
‘‘(B) impose any material anticompetitive 
burden on trading or clearing. 
‘‘(k) DESIGNATION
OF CHIEF COMPLIANCE OFFI-
CER.— 
‘‘(1) IN GENERAL.—Each swap dealer and major 
swap participant shall designate an individual to 
serve as a chief compliance officer. 
‘‘(2) DUTIES.—The chief compliance officer 
shall—
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† HR 4173 EAS 
‘‘(A) report directly to the board or to the 
senior officer of the swap dealer or major swap 
participant; 
‘‘(B) review the compliance of the swap 
dealer or major swap participant with respect to 
the swap dealer and major swap participant re-
quirements described in this section; 
‘‘(C) in consultation with the board of di-
rectors, a body performing a function similar to 
the board, or the senior officer of the organiza-
tion, resolve any conflicts of interest that may 
arise; 
‘‘(D) be responsible for administering each 
policy and procedure that is required to be estab-
lished pursuant to this section; 
‘‘(E) ensure compliance with this Act (in-
cluding regulations) relating to swaps, including 
each rule prescribed by the Commission under 
this section; 
‘‘(F) establish procedures for the remedi-
ation of noncompliance issues identified by the 
chief compliance officer through any— 
‘‘(i) compliance office review; 
‘‘(ii) look-back;
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† HR 4173 EAS 
‘‘(iii) internal or external audit find-
ing; 
‘‘(iv) self-reported error; or 
‘‘(v) validated complaint; and 
‘‘(G) establish and follow appropriate proce-
dures for the handling, management response, re-
mediation, retesting, and closing of noncompli-
ance issues. 
‘‘(3) ANNUAL REPORTS.— 
‘‘(A) IN
GENERAL.—In accordance with 
rules prescribed by the Commission, the chief 
compliance officer shall annually prepare and 
sign a report that contains a description of— 
‘‘(i) the compliance of the swap dealer 
or major swap participant with respect to 
this Act (including regulations); and 
‘‘(ii) each policy and procedure of the 
swap dealer or major swap participant of 
the chief compliance officer (including the 
code of ethics and conflict of interest poli-
cies). 
‘‘(B) REQUIREMENTS.—A compliance re-
port under subparagraph (A) shall— 
‘‘(i) accompany each appropriate fi-
nancial report of the swap dealer or major
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† HR 4173 EAS 
swap participant that is required to be fur-
nished to the Commission pursuant to this 
section; and 
‘‘(ii) include a certification that, under 
penalty of law, the compliance report is ac-
curate and complete.’’. 
SEC. 732. CONFLICTS OF INTEREST. 
Section 4d of the Commodity Exchange Act (7 U.S.C. 
6d) is amended— 
(1) by redesignating subsection (c) as subsection 
(e); and 
(2) by inserting after subsection (b) the fol-
lowing: 
‘‘(c) CONFLICTS OF INTEREST.—The Commission shall 
require that futures commission merchants and introducing 
brokers implement conflict-of-interest systems and proce-
dures that— 
‘‘(1) establish structural and institutional safe-
guards to ensure that the activities of any person 
within the firm relating to research or analysis of the 
price or market for any commodity are separated by 
appropriate informational partitions within the firm 
from the review, pressure, or oversight of persons 
whose involvement in trading or clearing activities
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† HR 4173 EAS 
might potentially bias the judgment or supervision of 
the persons; and 
‘‘(2) address such other issues as the Commission 
determines to be appropriate. 
‘‘(d) DESIGNATION
OF CHIEF COMPLIANCE OFFI-
CER.— 
‘‘(1) IN
GENERAL.—Each futures commission 
merchant shall designate an individual to serve as a 
chief compliance officer. 
‘‘(2) DUTIES.—The chief compliance officer 
shall— 
‘‘(A) report directly to the board or to the 
senior officer of the futures commission mer-
chant; 
‘‘(B) review the compliance of the futures 
commission merchant with respect to require-
ments described in this section; 
‘‘(C) in consultation with the board of di-
rectors, a body performing a function similar to 
the board, or the senior officer of the organiza-
tion, resolve any conflicts of interest that may 
arise; 
‘‘(D) be responsible for administering each 
policy and procedure that is required to be estab-
lished pursuant to this section;
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† HR 4173 EAS 
‘‘(E) ensure compliance with this Act (in-
cluding regulations and each rule prescribed by 
the Commission under this section) relating, but 
not limited, to— 
‘‘(i) contracts of sale of a commodity 
for future delivery; 
‘‘(ii) options on the contracts described 
in clause (i); 
‘‘(iii) commodity options; 
‘‘(iv) retail commodity transactions; 
‘‘(v) security futures products; 
‘‘(vi) leverage contracts; and 
‘‘(vii) swaps; 
‘‘(F) establish procedures for the remedi-
ation of noncompliance issues identified by the 
chief compliance officer through any— 
‘‘(i) compliance office review; 
‘‘(ii) look-back; 
‘‘(iii) internal or external audit find-
ing; 
‘‘(iv) self-reported error; or 
‘‘(v) validated complaint; and 
‘‘(G) establish and follow appropriate proce-
dures for the handling, management response, re-
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† HR 4173 EAS 
mediation, retesting, and closing of noncompli-
ance issues. 
‘‘(3) ANNUAL REPORTS.— 
‘‘(A) IN
GENERAL.—In accordance with 
rules prescribed by the Commission, the chief 
compliance officer shall annually prepare and 
sign a report that contains a description of— 
‘‘(i) the compliance of the futures com-
mission merchant with respect to this Act 
(including regulations); and 
‘‘(ii) each policy and procedure of the 
futures commission merchant of the chief 
compliance officer (including the code of 
ethics and conflict of interest policies). 
‘‘(B) REQUIREMENTS.—A compliance re-
port under subparagraph (A) shall— 
‘‘(i) accompany each appropriate fi-
nancial report of the futures commission 
merchant that is required to be furnished to 
the Commission pursuant to this section; 
and 
‘‘(ii) include a certification that, under 
penalty of law, the compliance report is ac-
curate and complete.’’.
661 
† HR 4173 EAS 
SEC. 733. SWAP EXECUTION FACILITIES. 
The Commodity Exchange Act is amended by inserting 
after section 5g (7 U.S.C. 7b–2) the following: 
‘‘SEC. 5h. SWAP EXECUTION FACILITIES. 
‘‘(a) REGISTRATION.— 
‘‘(1) IN GENERAL.—No person may operate a fa-
cility for the trading or processing of swaps unless the 
facility is registered as a swap execution facility or 
as a designated contract market under this section. 
‘‘(2) DUAL REGISTRATION.—Any person that is 
registered as a swap execution facility under this sec-
tion shall register with the Commission regardless of 
whether the person also is registered with the Securi-
ties and Exchange Commission as a swap execution 
facility. 
‘‘(b) TRADING AND TRADE PROCESSING.—A swap exe-
cution facility that is registered under subsection (a) may— 
‘‘(1) make available for trading any swap; and 
‘‘(2) facilitate trade processing of any swap. 
‘‘(c) IDENTIFICATION OF FACILITY USED TO TRADE 
SWAPS BY CONTRACT MARKETS.—A board of trade that op-
erates a contract market shall, to the extent that the board 
of trade also operates a swap execution facility and uses 
the same electronic trade execution system for listing and 
executing trades of swaps on or through the contract market 
and the swap execution facility, identify whether the elec-
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tronic trading of such swaps is taking place on or through 
the contract market or the swap execution facility. 
‘‘(d) CORE PRINCIPLES FOR SWAP EXECUTION FACILI-
TIES.— 
‘‘(1) COMPLIANCE WITH CORE PRINCIPLES.— 
‘‘(A) IN GENERAL.—To be registered, and 
maintain registration, as a swap execution facil-
ity, the swap execution facility shall comply 
with— 
‘‘(i) the core principles described in 
this subsection; and 
‘‘(ii) any requirement that the Com-
mission may impose by rule or regulation 
pursuant to section 8a(5). 
‘‘(B) REASONABLE
DISCRETION
OF
SWAP 
EXECUTION
FACILITY.—Unless otherwise deter-
mined by the Commission by rule or regulation, 
a swap execution facility described in subpara-
graph (A) shall have reasonable discretion in es-
tablishing the manner in which the swap execu-
tion facility complies with the core principles de-
scribed in this subsection. 
‘‘(2) COMPLIANCE WITH RULES.—A swap execu-
tion facility shall—
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‘‘(A) monitor and enforce compliance with 
any rule of the swap execution facility, includ-
ing— 
‘‘(i) the terms and conditions of the 
swaps traded or processed on or through the 
swap execution facility; and 
‘‘(ii) any limitation on access to the 
swap execution facility; 
‘‘(B) establish and enforce trading, trade 
processing, and participation rules that will 
deter abuses and have the capacity to detect, in-
vestigate, and enforce those rules, including 
means— 
‘‘(i) to provide market participants 
with impartial access to the market; and 
‘‘(ii) to capture information that may 
be used in establishing whether rule viola-
tions have occurred; 
‘‘(C) establish rules governing the operation 
of the facility, including rules specifying trading 
procedures to be used in entering and executing 
orders traded or posted on the facility, including 
block trades; and 
‘‘(D) provide by its rules that when a swap 
dealer or major swap participant enters into or
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facilitates a swap that is subject to the manda-
tory clearing requirement of section 2(h)(2)(F), 
the swap dealer or major swap participant shall 
be responsible for compliance with the manda-
tory trading requirement of section 113(d) of the 
Wall Street Transparency and Accountability 
Act of 2010. 
‘‘(3) SWAPS NOT READILY SUSCEPTIBLE TO MA-
NIPULATION.—The swap execution facility shall per-
mit trading only in swaps that are not readily sus-
ceptible to manipulation. 
‘‘(4) MONITORING OF TRADING AND TRADE PROC-
ESSING.—The swap execution facility shall— 
‘‘(A) establish and enforce rules or terms 
and conditions defining, or specifications detail-
ing— 
‘‘(i) trading procedures to be used in 
entering and executing orders traded on or 
through the facilities of the swap execution 
facility; and 
‘‘(ii) procedures for trade processing of 
swaps on or through the facilities of the 
swap execution facility; and 
‘‘(B) monitor trading in swaps to prevent 
manipulation, price distortion, and disruptions
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of the delivery or cash settlement process through 
surveillance, compliance, and disciplinary prac-
tices and procedures, including methods for con-
ducting real-time monitoring of trading and 
comprehensive and accurate trade reconstruc-
tions. 
‘‘(5) ABILITY
TO
OBTAIN
INFORMATION.—The 
swap execution facility shall— 
‘‘(A) establish and enforce rules that will 
allow the facility to obtain any necessary infor-
mation to perform any of the functions described 
in this section; 
‘‘(B) provide the information to the Com-
mission on request; and 
‘‘(C) have the capacity to carry out such 
international information-sharing agreements as 
the Commission may require. 
‘‘(6) POSITION LIMITS OR ACCOUNTABILITY.— 
‘‘(A) IN GENERAL.—To reduce the potential 
threat of market manipulation or congestion, es-
pecially during trading in the delivery month, a 
swap execution facility that is a trading facility 
shall adopt for each of the contracts of the facil-
ity, as is necessary and appropriate, position
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limitations or position accountability for specu-
lators. 
‘‘(B) POSITION LIMITS.—For any contract 
that is subject to a position limitation estab-
lished by the Commission pursuant to section 
4a(a), the swap execution facility shall set its po-
sition limitation at a level no higher than the 
Commission limitation. 
‘‘(C) POSITION
ENFORCEMENT.—For any 
contract that is subject to a position limitation 
established by the Commission pursuant to sec-
tion 4a(a), a swap execution facility shall reject 
any proposed swap transaction if, based on in-
formation readily available to a swap execution 
facility, any proposed swap transaction would 
cause a swap execution facility customer that 
would be a party to such swap transaction to ex-
ceed such position limitation. 
‘‘(7) FINANCIAL INTEGRITY OF TRANSACTIONS.— 
The swap execution facility shall establish and enforce 
rules and procedures for ensuring the financial integ-
rity of swaps entered on or through the facilities of 
the swap execution facility, including the clearance 
and settlement of the swaps pursuant to section 
2(h)(1).
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‘‘(8) EMERGENCY AUTHORITY.—The swap execu-
tion facility shall adopt rules to provide for the exer-
cise of emergency authority, in consultation or co-
operation with the Commission, as is necessary and 
appropriate, including the authority to liquidate or 
transfer open positions in any swap or to suspend or 
curtail trading in a swap. 
‘‘(9) TIMELY PUBLICATION OF TRADING INFOR-
MATION.— 
‘‘(A) IN GENERAL.—The swap execution fa-
cility shall make public timely information on 
price, trading volume, and other trading data on 
swaps to the extent prescribed by the Commis-
sion. 
‘‘(B) CAPACITY OF SWAP EXECUTION FACIL-
ITY.—The swap execution facility shall be re-
quired to have the capacity to electronically cap-
ture trade information with respect to trans-
actions executed on the facility. 
‘‘(10) RECORDKEEPING AND REPORTING.— 
‘‘(A) IN GENERAL.—A swap execution facil-
ity shall— 
‘‘(i) maintain records of all activities 
relating to the business of the facility, in-
cluding a complete audit trail, in a form
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and manner acceptable to the Commission 
for a period of 5 years; and 
‘‘(ii) report to the Commission, in a 
form and manner acceptable to the Commis-
sion, such information as the Commission 
determines to be necessary or appropriate 
for the Commission to perform the duties of 
the Commission under this Act. 
‘‘(B) 
REQUIREMENTS.—The 
Commission 
shall adopt data collection and reporting re-
quirements for swap execution facilities that are 
comparable to corresponding requirements for de-
rivatives clearing organizations and swap data 
repositories. 
‘‘(11) ANTITRUST CONSIDERATIONS.—Unless nec-
essary or appropriate to achieve the purposes of this 
Act, the swap execution facility shall not— 
‘‘(A) adopt any rules or taking any actions 
that result in any unreasonable restraint of 
trade; or 
‘‘(B) impose any material anticompetitive 
burden on trading or clearing. 
‘‘(12) CONFLICTS OF INTEREST.—The swap exe-
cution facility shall—
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‘‘(A) establish and enforce rules to minimize 
conflicts of interest in its decision-making proc-
ess; and 
‘‘(B) establish a process for resolving the 
conflicts of interest. 
‘‘(13) FINANCIAL RESOURCES.— 
‘‘(A) IN GENERAL.—The swap execution fa-
cility shall have adequate financial, operational, 
and managerial resources to discharge each re-
sponsibility of the swap execution facility. 
‘‘(B) DETERMINATION OF RESOURCE ADE-
QUACY.—The financial resources of a swap exe-
cution facility shall be considered to be adequate 
if the value of the financial resources exceeds the 
total amount that would enable the swap execu-
tion facility to cover the operating costs of the 
swap execution facility for a 1-year period, as 
calculated on a rolling basis. 
‘‘(14) SYSTEM SAFEGUARDS.—The swap execu-
tion facility shall— 
‘‘(A) establish and maintain a program of 
risk analysis and oversight to identify and mini-
mize sources of operational risk, through the de-
velopment of appropriate controls and proce-
dures, and automated systems, that—
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‘‘(i) are reliable and secure; and 
‘‘(ii) have adequate scalable capacity; 
‘‘(B) establish and maintain emergency pro-
cedures, backup facilities, and a plan for disaster 
recovery that are designed to allow for— 
‘‘(i) the timely recovery and resump-
tion of operations; and 
‘‘(ii) the fulfillment of the responsibil-
ities and obligation of the swap execution 
facility; and 
‘‘(C) periodically conduct tests to verify that 
the backup resources of the swap execution facil-
ity are sufficient to ensure continued— 
‘‘(i) order processing and trade match-
ing; 
‘‘(ii) price reporting; 
‘‘(iii) market surveillance and 
‘‘(iv) maintenance of a comprehensive 
and accurate audit trail. 
‘‘(15) DESIGNATION OF CHIEF COMPLIANCE OFFI-
CER.— 
‘‘(A) IN
GENERAL.—Each swap execution 
facility shall designate an individual to serve as 
a chief compliance officer.
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‘‘(B) DUTIES.—The chief compliance officer 
shall— 
‘‘(i) report directly to the board or to 
the senior officer of the facility; 
‘‘(ii) review compliance with the core 
principles in this subsection; 
‘‘(iii) in consultation with the board of 
the facility, a body performing a function 
similar to that of a board, or the senior offi-
cer of the facility, resolve any conflicts of 
interest that may arise; 
‘‘(iv) be responsible for establishing 
and administering the policies and proce-
dures required to be established pursuant to 
this section; 
‘‘(v) ensure compliance with this Act 
and the rules and regulations issued under 
this Act, including rules prescribed by the 
Commission pursuant to this section; and 
‘‘(vi) establish procedures for the reme-
diation of noncompliance issues found dur-
ing compliance office reviews, look backs, 
internal or external audit findings, self-re-
ported errors, or through validated com-
plaints.
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‘‘(C) REQUIREMENTS FOR PROCEDURES.— 
In establishing procedures under subparagraph 
(B)(vi), the chief compliance officer shall design 
the procedures to establish the handling, manage-
ment response, remediation, retesting, and clos-
ing of noncompliance issues. 
‘‘(D) ANNUAL REPORTS.— 
‘‘(i) IN GENERAL.—In accordance with 
rules prescribed by the Commission, the 
chief compliance officer shall annually pre-
pare and sign a report that contains a de-
scription of— 
‘‘(I) the compliance of the swap 
execution facility with this Act; and 
‘‘(II) the policies and procedures, 
including the code of ethics and con-
flict of interest policies, of the swap 
execution facility. 
‘‘(ii) REQUIREMENTS.—The chief com-
pliance officer shall— 
‘‘(I) submit each report described 
in clause (i) with the appropriate fi-
nancial report of the swap execution 
facility that is required to be submitted
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to the Commission pursuant to this 
section; and 
‘‘(II) include in the report a cer-
tification that, under penalty of law, 
the report is accurate and complete. 
‘‘(e) EXEMPTIONS.—The Commission may exempt, 
conditionally or unconditionally, a swap execution facility 
from registration under this section if the Commission finds 
that the facility is subject to comparable, comprehensive su-
pervision and regulation on a consolidated basis by the Se-
curities and Exchange Commission, a prudential regulator, 
or the appropriate governmental authorities in the home 
country of the facility. 
‘‘(f) RULES.—The Commission shall prescribe rules 
governing the regulation of alternative swap execution fa-
cilities under this section.’’. 
SEC. 734. DERIVATIVES TRANSACTION EXECUTION FACILI-
TIES AND EXEMPT BOARDS OF TRADE. 
(a) IN GENERAL.—Sections 5a and 5d of the Com-
modity Exchange Act (7 U.S.C. 7a, 7a–3) are repealed. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 2 of the Commodity Exchange Act (7 
U.S.C. 2) is amended— 
(A) in subsection (a)(1)(A), in the first sen-
tence, by striking ‘‘or 5a’’; and
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(B) in paragraph (2) of subsection (g) (as 
redesignated by section 723(a)(1)(B)), by strik-
ing ‘‘section 5a of this Act’’ and all that follows 
through ‘‘5d of this Act’’ and inserting ‘‘section 
5b of this Act’’. 
(2) Section 6(g)(1)(A) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78f(g)(1)(A)) is amended— 
(A) by striking ‘‘that—’’ and all that fol-
lows through ‘‘(i) has been designated’’ and in-
serting ‘‘that has been designated’’; 
(B) by striking ‘‘; or’’ and inserting ‘‘; and’’ 
and 
(C) by striking clause (ii). 
SEC. 735. DESIGNATED CONTRACT MARKETS. 
(a) CRITERIA FOR DESIGNATION.—Section 5 of the 
Commodity Exchange Act (7 U.S.C. 7) is amended by strik-
ing subsection (b). 
(b) CORE PRINCIPLES FOR CONTRACT MARKETS.— 
Section 5 of the Commodity Exchange Act (7 U.S.C. 7) is 
amended by striking subsection (d) and inserting the fol-
lowing: 
‘‘(d) CORE PRINCIPLES FOR CONTRACT MARKETS.— 
‘‘(1) DESIGNATION AS CONTRACT MARKET.—
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† HR 4173 EAS 
‘‘(A) IN GENERAL.—To be designated, and 
maintain a designation, as a contract market, a 
board of trade shall comply with— 
‘‘(i) any core principle described in 
this subsection; and 
‘‘(ii) any requirement that the Com-
mission may impose by rule or regulation 
pursuant to section 8a(5). 
‘‘(B) REASONABLE
DISCRETION
OF
CON-
TRACT
MARKET.—Unless otherwise determined 
by the Commission by rule or regulation, a 
board of trade described in subparagraph (A) 
shall have reasonable discretion in establishing 
the manner in which the board of trade complies 
with the core principles described in this sub-
section. 
‘‘(2) COMPLIANCE WITH RULES.— 
‘‘(A) IN
GENERAL.—The board of trade 
shall establish, monitor, and enforce compliance 
with the rules of the contract market, includ-
ing— 
‘‘(i) access requirements; 
‘‘(ii) the terms and conditions of any 
contracts to be traded on the contract mar-
ket; and
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‘‘(iii) rules prohibiting abusive trade 
practices on the contract market. 
‘‘(B) CAPACITY
OF
CONTRACT
MARKET.— 
The board of trade shall have the capacity to de-
tect, investigate, and apply appropriate sanc-
tions to any person that violates any rule of the 
contract market. 
‘‘(C) REQUIREMENT OF RULES.—The rules 
of the contract market shall provide the board of 
trade with the ability and authority to obtain 
any necessary information to perform any func-
tion described in this subsection, including the 
capacity to carry out such international infor-
mation-sharing agreements as the Commission 
may require. 
‘‘(3) CONTRACTS NOT READILY SUBJECT TO MA-
NIPULATION.—The board of trade shall list on the 
contract market only contracts that are not readily 
susceptible to manipulation. 
‘‘(4) PREVENTION OF MARKET DISRUPTION.—The 
board of trade shall have the capacity and responsi-
bility to prevent manipulation, price distortion, and 
disruptions of the delivery or cash-settlement process 
through market surveillance, compliance, and enforce-
ment practices and procedures, including—
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‘‘(A) methods for conducting real-time mon-
itoring of trading; and 
‘‘(B) comprehensive and accurate trade re-
constructions. 
‘‘(5) 
POSITION
LIMITATIONS
OR
ACCOUNT-
ABILITY.— 
‘‘(A) IN GENERAL.—To reduce the potential 
threat of market manipulation or congestion (es-
pecially during trading in the delivery month), 
the board of trade shall adopt for each contract 
of the board of trade, as is necessary and appro-
priate, position limitations or position account-
ability for speculators. 
‘‘(B) MAXIMUM ALLOWABLE POSITION LIMI-
TATION.—For any contract that is subject to a 
position limitation established by the Commis-
sion pursuant to section 4a(a), the board of trade 
shall set the position limitation of the board of 
trade at a level not higher than the position lim-
itation established by the Commission. 
‘‘(6) EMERGENCY
AUTHORITY.—The board of 
trade, in consultation or cooperation with the Com-
mission, shall adopt rules to provide for the exercise 
of emergency authority, as is necessary and appro-
priate, including the authority—
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‘‘(A) IN
GENERAL.—The board of trade 
shall provide a competitive, open, and efficient 
market and mechanism for executing trans-
actions that protects the price discovery process 
of trading in the centralized market of the board 
of trade. 
‘‘(B) RULES.—The rules of the board of 
trade may authorize, for bona fide business pur-
poses— 
‘‘(i) transfer trades or office trades; 
‘‘(ii) an exchange of— 
‘‘(I) futures in connection with a 
cash commodity transaction; 
‘‘(II) futures for cash commod-
ities; or 
‘‘(III) futures for swaps; or 
‘‘(iii) a futures commission merchant, 
acting as principal or agent, to enter into 
or confirm the execution of a contract for 
the purchase or sale of a commodity for fu-
ture delivery if the contract is reported, re-
corded, or cleared in accordance with the 
rules of the contract market or a derivatives 
clearing organization.
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‘‘(10) TRADE INFORMATION.—The board of trade 
shall maintain rules and procedures to provide for the 
recording and safe storage of all identifying trade in-
formation in a manner that enables the contract mar-
ket to use the information— 
‘‘(A) to assist in the prevention of customer 
and market abuses; and 
‘‘(B) to provide evidence of any violations of 
the rules of the contract market. 
‘‘(11) 
FINANCIAL
INTEGRITY
OF
TRANS-
ACTIONS.—The board of trade shall establish and en-
force— 
‘‘(A) rules and procedures for ensuring the 
financial integrity of transactions entered into 
on or through the facilities of the contract market 
(including the clearance and settlement of the 
transactions with a derivatives clearing organi-
zation); and 
‘‘(B) rules to ensure— 
‘‘(i) the financial integrity of any— 
‘‘(I) futures commission merchant; 
and 
‘‘(II) introducing broker; and 
‘‘(ii) the protection of customer funds.
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‘‘(12) PROTECTION OF MARKETS AND MARKET 
PARTICIPANTS.—The board of trade shall establish 
and enforce rules— 
‘‘(A) to protect markets and market partici-
pants from abusive practices committed by any 
party, including abusive practices committed by 
a party acting as an agent for a participant; 
and 
‘‘(B) to promote fair and equitable trading 
on the contract market. 
‘‘(13) DISCIPLINARY
PROCEDURES.—The board 
of trade shall establish and enforce disciplinary proce-
dures that authorize the board of trade to discipline, 
suspend, or expel members or market participants 
that violate the rules of the board of trade, or similar 
methods for performing the same functions, including 
delegation of the functions to third parties. 
‘‘(14) DISPUTE
RESOLUTION.—The board of 
trade shall establish and enforce rules regarding, and 
provide facilities for alternative dispute resolution as 
appropriate for, market participants and any market 
intermediaries. 
‘‘(15) GOVERNANCE FITNESS STANDARDS.—The 
board of trade shall establish and enforce appropriate 
fitness standards for directors, members of any dis-
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ciplinary committee, members of the contract market, 
and any other person with direct access to the facility 
(including any party affiliated with any person de-
scribed in this paragraph). 
‘‘(16) CONFLICTS OF INTEREST.—The board of 
trade shall establish and enforce rules— 
‘‘(A) to minimize conflicts of interest in the 
decision-making process of the contract market; 
and 
‘‘(B) to establish a process for resolving con-
flicts of interest described in subparagraph (A). 
‘‘(17) COMPOSITION OF GOVERNING BOARDS OF 
CONTRACT MARKETS.—The governance arrangements 
of the board of trade shall be designed to promote the 
objectives of market participants. 
‘‘(18) RECORDKEEPING.—The board of trade 
shall maintain records of all activities relating to the 
business of the contract market— 
‘‘(A) in a form and manner that is accept-
able to the Commission; and 
‘‘(B) for a period of at least 5 years. 
‘‘(19) ANTITRUST CONSIDERATIONS.—Unless nec-
essary or appropriate to achieve the purposes of this 
Act, the board of trade shall not—
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† HR 4173 EAS 
‘‘(A) adopt any rule or taking any action 
that results in any unreasonable restraint of 
trade; or 
‘‘(B) impose any material anticompetitive 
burden on trading on the contract market. 
‘‘(20) SYSTEM SAFEGUARDS.—The board of trade 
shall— 
‘‘(A) establish and maintain a program of 
risk analysis and oversight to identify and mini-
mize sources of operational risk, through the de-
velopment of appropriate controls and proce-
dures, and the development of automated sys-
tems, that are reliable, secure, and have adequate 
scalable capacity; 
‘‘(B) establish and maintain emergency pro-
cedures, backup facilities, and a plan for disaster 
recovery that allow for the timely recovery and 
resumption of operations and the fulfillment of 
the responsibilities and obligations of the board 
of trade; and 
‘‘(C) periodically conduct tests to verify that 
backup resources are sufficient to ensure contin-
ued order processing and trade matching, price 
reporting, market surveillance, and maintenance 
of a comprehensive and accurate audit trail.
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† HR 4173 EAS 
‘‘(21) FINANCIAL RESOURCES.— 
‘‘(A) IN
GENERAL.—The board of trade 
shall have adequate financial, operational, and 
managerial resources to discharge each responsi-
bility of the board of trade. 
‘‘(B) DETERMINATION OF ADEQUACY.—The 
financial resources of the board of trade shall be 
considered to be adequate if the value of the fi-
nancial resources exceeds the total amount that 
would enable the contract market to cover the op-
erating costs of the contract market for a 1-year 
period, as calculated on a rolling basis.’’. 
SEC. 736. MARGIN. 
Section 8a(7) of the Commodity Exchange Act (7 
U.S.C. 12a(7)) is amended— 
(1) in subparagraph (C), by striking ‘‘, excepting 
the setting of levels of margin’’; 
(2) by redesignating subparagraphs (D) through 
(F) as subparagraphs (E) through (G), respectively; 
and 
(3) by inserting after subparagraph (C) the fol-
lowing: 
‘‘(D) margin requirements, provided that 
the rules, regulations, or orders shall—
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† HR 4173 EAS 
or subject to the rules of an swaps execution fa-
cility, or swaps not traded on or subject to the 
rules of an swaps execution facility that perform 
a significant price discovery function with re-
spect to a registered entity,’’; and 
(4) by adding at the end the following: 
‘‘(2) AGGREGATE POSITION LIMITS.—The Com-
mission shall, by rule or regulation, establish limits 
(including related hedge exemption provisions) on the 
aggregate number or amount of positions in contracts 
based on the same underlying commodity (as defined 
by the Commission) that may be held by any person, 
including any group or class of traders, for each 
month across— 
‘‘(A) contracts listed by designated contract 
markets; 
‘‘(B) with respect to an agreement, contract, 
or transaction that settles against, or in relation 
to, any price (including the daily or final settle-
ment price) of 1 or more contracts listed for 
trading on a registered entity, contracts traded 
on a foreign board of trade that provides mem-
bers or other participants located in the United 
States with direct access to the electronic trading
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† HR 4173 EAS 
and order matching system of the foreign board 
of trade; 
‘‘(C) swaps traded on or subject to the rules 
of a swap execution facility; and 
‘‘(D) swaps not traded on or subject to the 
rules of a swap execution facility that perform or 
affect a significant price discovery function with 
respect to a registered entity. 
‘‘(3) SIGNIFICANT
PRICE
DISCOVERY
FUNC-
TION.—In making a determination as to whether a 
swap performs or affects a significant price discovery 
function with respect to registered entities, the Com-
mission shall consider, as appropriate, the following 
factors: 
‘‘(A) PRICE LINKAGE.—The extent to which 
the swap uses or otherwise relies on a daily or 
final settlement price, or other major price pa-
rameter, of another contract traded on a reg-
istered entity based on the same underlying com-
modity, to value a position, transfer or convert 
a position, financially settle a position, or close 
out a position. 
‘‘(B) ARBITRAGE.—The extent to which the 
price for the swap is sufficiently related to the 
price of another contract traded on a registered
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† HR 4173 EAS 
entity based on the same underlying commodity 
so as to permit market participants to effectively 
arbitrage between the markets by simultaneously 
maintaining positions or executing trades in the 
swaps on a frequent and recurring basis. 
‘‘(C) MATERIAL
PRICE
REFERENCE.—The 
extent to which, on a frequent and recurring 
basis, bids, offers, or transactions in a contract 
traded on a registered entity are directly based 
on, or are determined by referencing, the price 
generated by the swap. 
‘‘(D) MATERIAL LIQUIDITY.—The extent to 
which the volume of swaps being traded in the 
commodity is sufficient to have a material effect 
on another contract traded on a registered entity. 
‘‘(E) OTHER
MATERIAL
FACTORS.—Such 
other material factors as the Commission speci-
fies by rule or regulation as relevant to deter-
mine whether a swap serves a significant price 
discovery function with respect to a regulated 
market. 
‘‘(4) EXEMPTIONS.—The Commission, by rule, 
regulation, or order, may exempt, conditionally or 
unconditionally, any person or class of persons, any 
swap or class of swaps, or any transaction or class
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† HR 4173 EAS 
of transactions from any requirement that the Com-
mission establishes under this section with respect to 
position limits.’’. 
(b) CONFORMING AMENDMENTS.—Section 4a(b) of the 
Commodity Exchange Act (7 U.S.C. 6a(b)) is amended— 
(1) in paragraph (1), by striking ‘‘or derivatives 
transaction execution facility or facilities or electronic 
trading facility’’ and inserting ‘‘or swap execution fa-
cility or facilities’’; and 
(2) in paragraph (2), by striking ‘‘or derivatives 
transaction execution facility or facilities or electronic 
trading facility’’ and inserting ‘‘or swap execution fa-
cility’’. 
SEC. 738. FOREIGN BOARDS OF TRADE. 
(a) IN GENERAL.—Section 4(b) of the Commodity Ex-
change Act (7 U.S.C. 6(b)) is amended— 
(1) in the first sentence, by striking ‘‘The Com-
mission’’ and inserting the following: 
‘‘(2) 
PERSONS
LOCATED
IN
THE
UNITED 
STATES.— 
‘‘(A) IN GENERAL.—The Commission’’; 
(2) in the second sentence, by striking ‘‘Such 
rules and regulations’’ and inserting the following: 
‘‘(B) DIFFERENT
REQUIREMENTS.—Rules 
and regulations described in subparagraph (A)’’;
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† HR 4173 EAS 
(3) in the third sentence— 
(A) by striking ‘‘No rule or regulation’’ and 
inserting the following: 
‘‘(C) PROHIBITION.—Except as provided in 
paragraphs (1) and (2), no rule or regulation’’; 
(B) by striking ‘‘that (1) requires’’ and in-
serting the following: ‘‘that— 
‘‘(i) requires’’; and 
(C) by striking ‘‘market, or (2) governs’’ 
and inserting the following: ‘‘market; or 
‘‘(ii) governs’’; and 
(4) by inserting before paragraph (2) (as des-
ignated by paragraph (1)) the following: 
‘‘(1) FOREIGN BOARDS OF TRADE.— 
‘‘(A) IN GENERAL.—It shall be unlawful for 
a foreign board of trade to provide to the mem-
bers of the foreign board of trade or other par-
ticipants located in the United States direct ac-
cess to the electronic trading and order-matching 
system of the foreign board of trade with respect 
to an agreement, contract, or transaction that 
settles against any price (including the daily or 
final settlement price) of 1 or more contracts 
listed for trading on a registered entity, unless 
the Commission determines that—
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† HR 4173 EAS 
‘‘(i) the foreign board of trade makes 
public daily trading information regarding 
the agreement, contract, or transaction that 
is comparable to the daily trading informa-
tion published by the registered entity for 
the 1 or more contracts against which the 
agreement, contract, or transaction traded 
on the foreign board of trade settles; and 
‘‘(ii) the foreign board of trade (or the 
foreign futures authority that oversees the 
foreign board of trade)— 
‘‘(I) adopts position limits (in-
cluding related hedge exemption provi-
sions) for the agreement, contract, or 
transaction that are comparable to the 
position limits (including related hedge 
exemption provisions) adopted by the 
registered entity for the 1 or more con-
tracts against which the agreement, 
contract, or transaction traded on the 
foreign board of trade settles; 
‘‘(II) has the authority to require 
or direct market participants to limit, 
reduce, or liquidate any position the 
foreign board of trade (or the foreign
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† HR 4173 EAS 
futures authority that oversees the for-
eign board of trade) determines to be 
necessary to prevent or reduce the 
threat of price manipulation, excessive 
speculation as described in section 4a, 
price distortion, or disruption of deliv-
ery or the cash settlement process; 
‘‘(III) agrees to promptly notify 
the Commission, with regard to the 
agreement, contract, or transaction 
that settles against any price (includ-
ing the daily or final settlement price) 
of 1 or more contracts listed for trad-
ing on a registered entity, of any 
change regarding— 
‘‘(aa) the information that 
the foreign board of trade will 
make publicly available; 
‘‘(bb) the position limits that 
the foreign board of trade or for-
eign futures authority will adopt 
and enforce; 
‘‘(cc) the position reductions 
required to prevent manipulation, 
excessive speculation as described
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† HR 4173 EAS 
in section 4a, price distortion, or 
disruption of delivery or the cash 
settlement process; and 
‘‘(dd) any other area of in-
terest expressed by the Commis-
sion to the foreign board of trade 
or foreign futures authority; 
‘‘(IV) provides information to the 
Commission regarding large trader po-
sitions in the agreement, contract, or 
transaction that is comparable to the 
large trader position information col-
lected by the Commission for the 1 or 
more contracts against which the 
agreement, contract, or transaction 
traded on the foreign board of trade 
settles; and 
‘‘(V) provides the Commission 
such information as is necessary to 
publish reports on aggregate trader po-
sitions for the agreement, contract, or 
transaction traded on the foreign board 
of trade that are comparable to such 
reports on aggregate trader positions 
for the 1 or more contracts against
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† HR 4173 EAS 
which the agreement, contract, or 
transaction traded on the foreign board 
of trade settles. 
‘‘(B) 
EXISTING
FOREIGN
BOARDS
OF 
TRADE.—Subparagraph (A) shall not be effective 
with respect to any foreign board of trade to 
which, prior to the date of enactment of this 
paragraph, the Commission granted direct access 
permission until the date that is 180 days after 
that date of enactment.’’. 
(b) LIABILITY OF REGISTERED PERSONS TRADING ON 
A FOREIGN BOARD OF TRADE.—Section 4 of the Com-
modity Exchange Act (7 U.S.C. 6) is amended— 
(1) in subsection (a), in the matter preceding 
paragraph (1), by inserting ‘‘or by subsection (e)’’ 
after ‘‘Unless exempted by the Commission pursuant 
to subsection (c)’’; and 
(2) by adding at the end the following: 
‘‘(e) LIABILITY OF REGISTERED PERSONS TRADING ON 
A FOREIGN BOARD OF TRADE.—A person registered with 
the Commission, or exempt from registration by the Com-
mission, under this Act may not be found to have violated 
subsection (a) with respect to a transaction in, or in connec-
tion with, a contract of sale of a commodity for future deliv-
ery if the person has reason to believe that the transaction
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† HR 4173 EAS 
and the contract is made on or subject to the rules of a 
foreign board of trade that has complied with paragraphs 
(1) and (2) of subsection (b).’’. 
(c) CONTRACT ENFORCEMENT FOR FOREIGN FUTURES 
CONTRACTS.—Section 22(a) of the Commodity Exchange 
Act (7 U.S.C. 25(a)) (as amended by section 739) is amend-
ed by adding at the end the following: 
‘‘(6) CONTRACT ENFORCEMENT FOR FOREIGN FU-
TURES
CONTRACTS.—A contract of sale of a com-
modity for future delivery traded or executed on or 
through the facilities of a board of trade, exchange, or 
market located outside the United States for purposes 
of section 4(a) shall not be void, voidable, or unen-
forceable, and a party to such a contract shall not be 
entitled to rescind or recover any payment made with 
respect to the contract, based on the failure of the for-
eign board of trade to comply with any provision of 
this Act.’’. 
SEC. 739. LEGAL CERTAINTY FOR SWAPS. 
Section 22(a) of the Commodity Exchange Act (7 
U.S.C. 25(a)) is amended by striking paragraph (4) and 
inserting the following: 
‘‘(4) CONTRACT ENFORCEMENT BETWEEN ELIGI-
BLE COUNTERPARTIES.—
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† HR 4173 EAS 
‘‘(A) IN GENERAL.—No hybrid instrument 
sold to any investor shall be void, voidable, or 
unenforceable, and no party to a hybrid instru-
ment shall be entitled to rescind, or recover any 
payment made with respect to, the hybrid instru-
ment under this section or any other provision 
of Federal or State law, based solely on the fail-
ure of the hybrid instrument to comply with the 
terms or conditions of section 2(f) or regulations 
of the Commission. 
‘‘(B) SWAPS.—No agreement, contract, or 
transaction between eligible contract partici-
pants or persons reasonably believed to be eligi-
ble contract participants shall be void, voidable, 
or unenforceable, and no party to an agreement, 
contract, or transaction shall be entitled to re-
scind, or recover any payment made with respect 
to, the agreement, contract, or transaction under 
this section or any other provision of Federal or 
State law, based solely on the failure of the 
agreement, contract, or transaction— 
‘‘(i) to meet the definition of a swap 
under section 1a; or 
‘‘(ii) to be cleared in accordance with 
section 2(h)(1).
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† HR 4173 EAS 
‘‘(5) LEGAL CERTAINTY FOR LONG-TERM SWAPS 
ENTERED INTO BEFORE THE DATE OF ENACTMENT OF 
THE
WALL
STREET
TRANSPARENCY
AND
ACCOUNT-
ABILITY ACT OF 2010.— 
‘‘(A) IN GENERAL.—Any swap entered into 
before the date of enactment of the Wall Street 
Transparency and Accountability Act of 2010, 
the terms of which have not expired as of the 
date of enactment, shall not be subject to the 
mandatory clearing requirements under this Act. 
‘‘(B) EFFECT
ON
SWAPS.—Unless specifi-
cally reserved in the applicable bilateral trading 
agreement, neither the enactment of the Wall 
Street Transparency and Accountability Act of 
2010, nor any requirement under that Act or an 
amendment made by that Act, shall constitute a 
termination event, force majeure, illegality, in-
creased costs, regulatory change, or similar event 
under a bilateral trading agreement (including 
any related credit support arrangement) that 
would permit a party to terminate, renegotiate, 
modify, amend, or supplement 1 or more trans-
actions under the bilateral trading agreement. 
‘‘(C) POSITION LIMITS.—Any position limit 
established under the Wall Street Transparency
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† HR 4173 EAS 
and Accountability Act of 2010 shall not apply 
to a position acquired in good faith prior to the 
effective date of any rule, regulation, or order 
under the Act that establishes the position limit; 
provided, however, that such positions shall be 
attributed to the trader if the trader’s position is 
increased after the effective date such position 
limit rule, regulation, or order.’’. 
SEC. 740. MULTILATERAL CLEARING ORGANIZATIONS. 
Sections 408 and 409 of the Federal Deposit Insurance 
Corporation Improvement Act of 1991 (12 U.S.C. 4421, 
4422) are repealed. 
SEC. 741. ENFORCEMENT. 
(a) ENFORCEMENT AUTHORITY.—The Commodity Ex-
change Act is amended by inserting after section 4b (7 
U.S.C. 6b) the following: 
‘‘SEC. 4b–1. ENFORCEMENT AUTHORITY. 
‘‘(a) COMMISSION.—Except as provided in subsections 
(b), (c), and (d), the Commission shall have primary au-
thority to enforce the amendments made by the Wall Street 
Transparency and Accountability Act of 2010 with respect 
to any person. 
‘‘(b) APPROPRIATE FEDERAL BANKING AGENCIES.— 
The appropriate Federal banking agency for swap dealers 
or major swap participants that are depository institu-
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† HR 4173 EAS 
tions, as that term is defined under section 3 of the Federal 
Deposit Insurance Act (12 U.S.C. 1813), shall have exclu-
sive authority to enforce the provisions of section 4s(e) and 
other prudential requirements of this Act, with respect to 
depository institutions that are swap dealers or major swap 
participants. 
‘‘(c) REFERRALS.— 
‘‘(1) PRUDENTIAL REGULATORS.—If the pruden-
tial regulator for a swap dealer or major swap partic-
ipant has cause to believe that the swap dealer or 
major swap participant, or any affiliate or division 
of the swap dealer or major swap participant, may 
have engaged in conduct that constitutes a violation 
of the nonprudential requirements of this Act (includ-
ing section 4s or rules adopted by the Commission 
under that section), the prudential regulator shall 
promptly notify the Commission in a written report 
that includes— 
‘‘(A) a request that the Commission initiate 
an enforcement proceeding under this Act; and 
‘‘(B) an explanation of the facts and cir-
cumstances that led to the preparation of the 
written report. 
‘‘(2) COMMISSION.—If the Commission has cause 
to believe that a swap dealer or major swap partici-
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† HR 4173 EAS 
pant that has a prudential regulator may have en-
gaged in conduct that constitutes a violation of any 
prudential requirement of section 4s or rules adopted 
by the Commission under that section, the Commis-
sion may notify the prudential regulator of the con-
duct in a written report that includes— 
‘‘(A) a request that the prudential regulator 
initiate an enforcement proceeding under this 
Act or any other Federal law (including regula-
tions); and 
‘‘(B) an explanation of the concerns of the 
Commission, and a description of the facts and 
circumstances, that led to the preparation of the 
written report. 
‘‘(d) BACKSTOP ENFORCEMENT AUTHORITY.— 
‘‘(1) INITIATION OF ENFORCEMENT PROCEEDING 
BY
PRUDENTIAL
REGULATOR.—If the Commission 
does not initiate an enforcement proceeding before the 
end of the 90-day period beginning on the date on 
which the Commission receives a written report under 
subsection (c)(1), the prudential regulator may ini-
tiate an enforcement proceeding. 
‘‘(2) INITIATION OF ENFORCEMENT PROCEEDING 
BY COMMISSION.—If the prudential regulator does not 
initiate an enforcement proceeding before the end of
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† HR 4173 EAS 
the 90-day period beginning on the date on which the 
prudential regulator receives a written report under 
subsection (c)(2), the Commission may initiate an en-
forcement proceeding.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 4b of the Commodity Exchange Act 
(7 U.S.C. 6b) is amended— 
(A) in subsection (a)(2), by striking ‘‘or 
other agreement, contract, or transaction subject 
to paragraphs (1) and (2) of section 5a(g),’’ and 
inserting ‘‘or swap,’’; 
(B) in subsection (b), by striking ‘‘or other 
agreement, contract or transaction subject to 
paragraphs (1) and (2) of section 5a(g),’’ and 
inserting ‘‘or swap,’’; and 
(C) by adding at the end the following: 
‘‘(e) It shall be unlawful for any person, directly or 
indirectly, by the use of any means or instrumentality of 
interstate commerce, or of the mails, or of any facility of 
any registered entity, in or in connection with any order 
to make, or the making of, any contract of sale of any com-
modity for future delivery (or option on such a contract), 
or any swap, on a group or index of securities (or any in-
terest therein or based on the value thereof)—
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† HR 4173 EAS 
‘‘(1) to employ any device, scheme, or artifice to 
defraud; 
‘‘(2) to make any untrue statement of a material 
fact or to omit to state a material fact necessary in 
order to make the statements made, in the light of the 
circumstances under which they were made, not mis-
leading; or 
‘‘(3) to engage in any act, practice, or course of 
business which operates or would operate as a fraud 
or deceit upon any person.’’. 
(2) Section 4c(a)(1) of the Commodity Exchange 
Act (7 U.S.C. 6c(a)(1)) is amended by inserting ‘‘or 
swap’’ before ‘‘if the transaction is used or may be 
used’’. 
(3) Section 6(c) of the Commodity Exchange Act 
(7 U.S.C. 9) is amended in the first sentence by in-
serting ‘‘or of any swap,’’ before ‘‘or has willfully 
made’’. 
(4) Section 6(d) of the Commodity Exchange Act 
(7 U.S.C. 13b) is amended in the first sentence, in the 
matter preceding the proviso, by inserting ‘‘or of any 
swap,’’ before ‘‘or otherwise is violating’’. 
(5) Section 6c(a) of the Commodity Exchange 
Act (7 U.S.C. 13a–1(a)) is amended in the matter
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† HR 4173 EAS 
preceding the proviso by inserting ‘‘or any swap’’ 
after ‘‘commodity for future delivery’’. 
(6) Section 9 of the Commodity Exchange Act (7 
U.S.C. 13) is amended— 
(A) in subsection (a)— 
(i) in paragraph (2), by inserting ‘‘or 
of any swap,’’ before ‘‘or to corner’’; and 
(ii) in paragraph (4), by inserting 
‘‘swap data repository,’’ before ‘‘or futures 
association’’ and 
(B) in subsection (e)(1)— 
(i) by inserting ‘‘swap data reposi-
tory,’’ before ‘‘or registered futures associa-
tion’’; and 
(ii) by inserting ‘‘, or swaps,’’ before 
‘‘on the basis’’. 
(7) Section 9(a) of the Commodity Exchange Act 
(7 U.S.C. 13(a)) is amended by adding at the end the 
following: 
‘‘(6) Any person to abuse the end user clearing 
exemption under section 2(h)(4), as determined by the 
Commission.’’. 
(8) Section 8(b) of the Federal Deposit Insurance 
Act (12 U.S.C. 1818(b)) is amended by adding at the 
end the following:
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† HR 4173 EAS 
‘‘(11) SWAPS.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), this section shall apply to any swap 
dealer, major swap participant, security-based 
swap dealer, major security-based swap partici-
pant, derivatives clearing organization, swap 
data repository, or swap execution facility, re-
gardless of whether the dealer, participant, orga-
nization, repository, or facility is an insured de-
pository institution, for which the Board, the 
Corporation, or the Office of the Comptroller of 
the Currency is the appropriate Federal banking 
agency or prudential regulator for purposes of 
the amendments made by the Wall Street Trans-
parency and Accountability Act of 2010. 
‘‘(B) LIMITATION.—The authority described 
in subparagraph (A) shall be limited by, and ex-
ercised in accordance with, section 4b–1 of the 
Commodity Exchange Act.’’. 
(9) Section 2(c)(2)(B) of the Commodity Ex-
change Act (7 U.S.C. 2(c)(2)(B)) is amended— 
(A) by striking ‘‘(dd),’’ each place it ap-
pears;
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† HR 4173 EAS 
(B) in clause (iii), by inserting ‘‘, and ac-
counts or pooled investment vehicles described in 
clause (vi),’’ before ‘‘shall be subject to’’; and 
(C) by adding at the end the following: 
‘‘(vi) This Act applies to, and the 
Commission shall have jurisdiction over, an 
account or pooled investment vehicle that is 
offered for the purpose of trading, or that 
trades, any agreement, contract, or trans-
action in foreign currency described in 
clause (i).’’. 
(10) Section 2(c)(2)(C) of the Commodity Ex-
change Act (7 U.S.C. 2(c)(2)(C)) is amended— 
(A) by striking ‘‘(dd),’’ each place it ap-
pears; 
(B) in clause (ii)(I), by inserting ‘‘, and ac-
counts or pooled investment vehicles described in 
clause (vii),’’ before ‘‘shall be subject to’’; and 
(C) by adding at the end the following: 
‘‘(vii) This Act applies to, and the 
Commission shall have jurisdiction over, an 
account or pooled investment vehicle that is 
offered for the purpose of trading, or that 
trades, any agreement, contract, or trans-
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† HR 4173 EAS 
action in foreign currency described in 
clause (i).’’. 
(11) Section 1a(19)(A)(iv)(II) of the Commodity 
Exchange Act (7 U.S.C. 1a(19)(A)(iv)(II)) (as redes-
ignated by section 721(a)(1)) is amended by inserting 
before the semicolon at the end the following: ‘‘pro-
vided, 
however, 
that 
for 
purposes 
of 
section 
2(c)(2)(B)(vi) and section 2(c)(2)(C)(vii), the term 
‘eligible contract participant’ shall not include a com-
modity pool in which any participant is not other-
wise an eligible contract participant’’. 
SEC. 742. RETAIL COMMODITY TRANSACTIONS. 
(a) IN GENERAL.—Section 2(c) of the Commodity Ex-
change Act (7 U.S.C. 2(c)) is amended— 
(1) in paragraph (1), by striking ‘‘(to the extent 
provided in section 5a(g)), 5b, 5d, or 12(e)(2)(B))’’ 
and inserting ‘‘, 5b, or 12(e)(2)(B))’’; and 
(2) in paragraph (2), by adding at the end the 
following: 
‘‘(D) RETAIL COMMODITY TRANSACTIONS.— 
‘‘(i) APPLICABILITY.—Except as pro-
vided in clause (ii), this subparagraph shall 
apply to any agreement, contract, or trans-
action in any commodity that is—
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† HR 4173 EAS 
‘‘(I) entered into with, or offered 
to (even if not entered into with), a 
person that is not an eligible contract 
participant or eligible commercial en-
tity; and 
‘‘(II) entered into, or offered (even 
if not entered into), on a leveraged or 
margined basis, or financed by the of-
feror, the counterparty, or a person 
acting in concert with the offeror or 
counterparty on a similar basis. 
‘‘(ii) 
EXCEPTIONS.—This 
subpara-
graph shall not apply to— 
‘‘(I) an agreement, contract, or 
transaction described in paragraph (1) 
or subparagraphs (A), (B), or (C), in-
cluding any agreement, contract, or 
transaction specifically excluded from 
subparagraph (A), (B), or (C); 
‘‘(II) any security; 
‘‘(III) a contract of sale that— 
‘‘(aa) results in actual deliv-
ery within 28 days or such other 
period as the Commission may 
determine by rule or regulation
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† HR 4173 EAS 
based upon the typical commer-
cial practice in cash or spot mar-
kets for the commodity involved; 
or 
‘‘(bb) creates an enforceable 
obligation to deliver between a 
seller and a buyer that have the 
ability to deliver and accept deliv-
ery, respectively, in connection 
with the line of business of the 
seller and buyer; or 
‘‘(IV) an agreement, contract, or 
transaction that is listed on a national 
securities exchange registered under 
section 6(a) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78f(a)); or 
‘‘(V) an identified banking prod-
uct, as defined in section 402(b) of the 
Legal Certainty for Bank Products Act 
of 2000 (7 U.S.C.27(b)). 
‘‘(iii) ENFORCEMENT.—Sections 4(a), 
4(b), and 4b apply to any agreement, con-
tract, or transaction described in clause (i), 
as if the agreement, contract, or transaction
709 
† HR 4173 EAS 
was a contract of sale of a commodity for 
future delivery. 
‘‘(iv) ELIGIBLE
COMMERCIAL
ENTI-
TY.—For purposes of this subparagraph, an 
agricultural producer, packer, or handler 
shall be considered to be an eligible commer-
cial entity for any agreement, contract, or 
transaction for a commodity in connection 
with the line of business of the agricultural 
producer, packer, or handler. 
‘‘(v) ACTUAL DELIVERY.—For purposes 
of clause (ii)(III), the term ‘actual delivery’ 
does not include delivery to a third party in 
a financed transaction in which the com-
modity is held as collateral.’’. 
(b) GRAMM-LEACH-BLILEY ACT.—Section 206(a) of 
the Gramm-Leach-Bliley Act (Public Law 106–102; 15 
U.S.C. 78c note) is amended, in the matter preceding para-
graph (1), by striking ‘‘For purposes of’’ and inserting ‘‘Ex-
cept as provided in subsection (e), for purposes of’’. 
(c) CONFORMING AMENDMENTS RELATING TO RETAIL 
FOREIGN EXCHANGE TRANSACTIONS.— 
(1) Section 2(c)(2)(B)(i)(II) of the Commodity 
Exchange Act (7 U.S.C. 2(c)(2)(B)(i)(II)) is amend-
ed—
710 
† HR 4173 EAS 
(A) in item (aa), by inserting ‘‘United 
States’’ before ‘‘financial institution’’; 
(B) by striking items (dd) and (ff); 
(C) by redesignating items (ee) and (gg) as 
items (dd) and (ff), respectively; and 
(D) in item (dd) (as so redesignated), by 
striking the semicolon and inserting ‘‘; or’’. 
(2) Section 2(c)(2) of the Commodity Exchange 
Act (7 U.S.C. 2(c)(2)) (as amended by subsection 
(a)(2)) is amended by adding at the end the fol-
lowing: 
‘‘(E) PROHIBITION.— 
‘‘(i) DEFINITION OF FEDERAL REGU-
LATORY
AGENCY.—In this subparagraph, 
the 
term 
‘Federal 
regulatory 
agency’ 
means— 
‘‘(I) the Commission; 
‘‘(II) the Securities and Exchange 
Commission; 
‘‘(III) an appropriate Federal 
banking agency; 
‘‘(IV) the National Credit Union 
Association; and 
‘‘(V) the Farm Credit Administra-
tion.
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† HR 4173 EAS 
‘‘(ii) 
PROHIBITION.—A 
person 
de-
scribed in subparagraph (B)(i)(II) for 
which there is a Federal regulatory agency 
shall not offer to, or enter into with, a per-
son that is not an eligible contract partici-
pant, any agreement, contract, or trans-
action in foreign currency described in sub-
paragraph (B)(i)(I) except pursuant to a 
rule or regulation of a Federal regulatory 
agency allowing the agreement, contract, or 
transaction under such terms and condi-
tions as the Federal regulatory agency shall 
prescribe. 
‘‘(iii) REQUIREMENTS OF RULES AND 
REGULATIONS.— 
‘‘(I) IN GENERAL.—The rules and 
regulations described in clause (ii) 
shall prescribe appropriate require-
ments with respect to— 
‘‘(aa) disclosure; 
‘‘(bb) recordkeeping; 
‘‘(cc) capital and margin; 
‘‘(dd) reporting; 
‘‘(ee) business conduct; 
‘‘(ff) documentation; and
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† HR 4173 EAS 
‘‘(gg) such other standards or 
requirements as the Federal regu-
latory agency shall determine to 
be necessary. 
‘‘(II) TREATMENT.—The rules or 
regulations described in clause (ii) 
shall treat all agreements, contracts, 
and transactions in foreign currency 
described in subparagraph (B)(i)(I), 
and all agreements, contracts, and 
transactions in foreign currency that 
are functionally or economically simi-
lar to agreements, contracts, or trans-
actions 
described 
in 
subparagraph 
(B)(i)(I), similarly.’’. 
SEC. 743. OTHER AUTHORITY. 
Unless otherwise provided by the amendments made by 
this subtitle, the amendments made by this subtitle do not 
divest any appropriate Federal banking agency, the Com-
modity Futures Trading Commission, the Securities and 
Exchange Commission, or other Federal or State agency of 
any authority derived from any other applicable law.
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† HR 4173 EAS 
SEC. 744. RESTITUTION REMEDIES. 
Section 6c(d) of the Commodity Exchange Act (7 
U.S.C. 13a–1(d)) is amended by adding at the end the fol-
lowing: 
‘‘(3) EQUITABLE
REMEDIES.—In any action 
brought under this section, the Commission may seek, 
and the court shall have jurisdiction to impose, on a 
proper showing, on any person found in the action to 
have committed any violation, equitable remedies in-
cluding— 
‘‘(A) restitution to persons who have sus-
tained losses proximately caused by such viola-
tion (in the amount of such losses); and 
‘‘(B) disgorgement of gains received in con-
nection with such violation.’’. 
SEC. 745. ENHANCED COMPLIANCE BY REGISTERED ENTI-
TIES. 
(a) CORE PRINCIPLES FOR CONTRACT MARKETS.— 
Section 5(d) of the Commodity Exchange Act (7 U.S.C. 
7(d)) (as amended by section 735(b)) is amended by strik-
ing paragraph (1) and inserting the following: 
‘‘(1) DESIGNATION.— 
‘‘(A) IN
GENERAL.—To be designated as, 
and to maintain the designation of, a board of 
trade as a contract market, the board of trade 
shall comply with—
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† HR 4173 EAS 
‘‘(i) the core principles described in 
this subsection; and 
‘‘(ii) any requirement that the Com-
mission may impose by rule or regulation 
pursuant to section 8a(5). 
‘‘(B) DISCRETION OF BOARD OF TRADE.— 
Unless the Commission determines otherwise by 
rule or regulation, the board of trade shall have 
reasonable discretion in establishing the manner 
by which the board of trade complies with each 
core principle.’’. 
(b) CORE PRINCIPLES.—Section 5b(c)(2) of the Com-
modity Exchange Act (7 U.S.C. 7a–1(c)(2)) (as amended 
by section 725(c)) is amended by striking subparagraph (A) 
and inserting the following: 
‘‘(A) REGISTRATION.— 
‘‘(i) IN
GENERAL.—To be registered 
and to maintain registration as a deriva-
tives clearing organization, a derivatives 
clearing organization shall comply with— 
‘‘(I) the core principles described 
in this paragraph; and 
‘‘(II) any requirement that the 
Commission may impose by rule or 
regulation pursuant to section 8a(5).
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† HR 4173 EAS 
‘‘(ii) DISCRETION
OF
COMMISSION.— 
Unless the Commission determines otherwise 
by rule or regulation, a derivatives clearing 
organization shall have reasonable discre-
tion in establishing the manner by which 
the derivatives clearing organization com-
plies with each core principle.’’. 
(c) EFFECT OF INTERPRETATION.—Section 5c(a) of 
the Commodity Exchange Act (7 U.S.C. 7a–2(a)) is amend-
ed by striking paragraph (2) and inserting the following: 
‘‘(2) EFFECT
OF
INTERPRETATION.—An inter-
pretation issued under paragraph (1) may provide 
the exclusive means for complying with each section 
described in paragraph (1).’’. 
(d) NEW CONTRACTS, NEW RULES, AND RULE AMEND-
MENTS.— 
(1) IN GENERAL.—A registered entity may elect 
to list for trading or accept for clearing any new con-
tract, or other instrument, or may elect to approve 
and implement any new rule or rule amendment, by 
providing to the Commission (and the Secretary of 
the Treasury, in the case of a contract of sale of a 
government security for future delivery (or option on 
such a contract) or a rule or rule amendment specifi-
cally related to such a contract) a written certifi-
716 
† HR 4173 EAS 
cation that the new contract or instrument or clear-
ing of the new contract or instrument, new rule, or 
rule amendment complies with this Act (including 
regulations under this Act). 
(2) RULE
REVIEW.—The new rule or rule 
amendment described in paragraph (1) shall become 
effective, pursuant to the certification of the registered 
entity, on the date that is 10 business days after the 
date on which the Commission receives the certifi-
cation (or such shorter period as determined by the 
Commission by rule or regulation) unless the Com-
mission notifies the registered entity within such time 
that it is staying the certification because there exist 
novel or complex issues that require additional time 
to analyze, an inadequate explanation by the submit-
ting registered entity, or a potential inconsistency 
with this Act (including regulations under this Act). 
(3) STAY OF CERTIFICATION FOR RULES.— 
(A) A notification by the Commission pur-
suant to paragraph (2) shall stay the certifi-
cation of the new rule or rule amendment for up 
to an additional 90 days from the date of the no-
tification. 
(B) A rule or rule amendment subject to a 
stay pursuant to subparagraph (A) shall become
717 
† HR 4173 EAS 
effective, pursuant to the certification of the reg-
istered entity, at the expiration of the period de-
scribed in subparagraph (A) unless the Commis-
sion— 
(i) withdraws the stay prior to that 
time; or 
(ii) notifies the registered entity during 
such period that it objects to the proposed 
certification on the grounds that it is incon-
sistent with this Act (including regulations 
under this Act). 
(4) PRIOR APPROVAL.— 
(A) IN GENERAL.—A registered entity may 
request that the Commission grant prior ap-
proval to any new contract or other instrument, 
new rule, or rule amendment. 
(B) PRIOR APPROVAL REQUIRED.—Notwith-
standing any other provision of this section, a 
designated contract market shall submit to the 
Commission for prior approval each rule amend-
ment that materially changes the terms and con-
ditions, as determined by the Commission, in 
any contract of sale for future delivery of a com-
modity specifically enumerated in section 1a(10) 
(or any option thereon) traded through its facili-
718 
† HR 4173 EAS 
ties if the rule amendment applies to contracts 
and delivery months which have already been 
listed for trading and have open interest. 
(C) DEADLINE.—If prior approval is re-
quested under subparagraph (A), the Commis-
sion shall take final action on the request not 
later than 90 days after submission of the re-
quest, unless the person submitting the request 
agrees to an extension of the time limitation es-
tablished under this subparagraph. 
(5) APPROVAL.— 
(A) RULES.—The Commission shall ap-
prove a new rule, or rule amendment, of a reg-
istered entity unless the Commission finds that 
the new rule, or rule amendment, is inconsistent 
with this subtitle (including regulations). 
(B) CONTRACTS
AND
INSTRUMENTS.—The 
Commission shall approve a new contract or 
other instrument unless the Commission finds 
that the new contract or other instrument would 
violate this subtitle (including regulations). 
(C) SPECIAL RULE FOR REVIEW AND AP-
PROVAL OF EVENT CONTRACTS AND SWAPS CON-
TRACTS.—
719 
† HR 4173 EAS 
(i) EVENT CONTRACTS.—In connection 
with the listing of agreements, contracts, 
transactions, or swaps in excluded commod-
ities that are based upon the occurrence, ex-
tent of an occurrence, or contingency (other 
than a change in the price, rate, value, or 
levels of a commodity described in section 
1a(2)(i)), by a designated contract market 
or swap execution facility, the Commission 
may determine that such agreements, con-
tracts, or transactions are contrary to the 
public interest if the agreements, contracts, 
or transactions involve— 
(I) activity that is unlawful 
under any Federal or State law; 
(II) terrorism; 
(III) assassination; 
(IV) war; 
(V) gaming; or 
(VI) other similar activity deter-
mined by the Commission, by rule or 
regulation, to be contrary to the public 
interest. 
(ii) 
PROHIBITION.—No 
agreement, 
contract, or transaction determined by the
720 
† HR 4173 EAS 
Commission to be contrary to the public in-
terest under clause (i) may be listed or 
made available for clearing or trading on or 
through a registered entity. 
(iii) SWAPS CONTRACTS.— 
(I) IN GENERAL.—In connection 
with the listing of a swap for clearing 
by a derivatives clearing organization, 
the Commission shall determine, upon 
request or on its own motion, the ini-
tial eligibility, or the continuing quali-
fication, of a derivatives clearing orga-
nization to clear such a swap under 
those criteria, conditions, or rules that 
the Commission, in its discretion, de-
termines. 
(II) REQUIREMENTS.—Any such 
criteria, conditions, or rules shall con-
sider— 
(aa) the financial integrity 
of the derivatives clearing organi-
zation; and 
(bb) any other factors which 
the Commission determines may 
be appropriate.
721 
† HR 4173 EAS 
(iv) 
DEADLINE.—The 
Commission 
shall take final action under clauses (i) and 
(ii) in not later than 90 days from the com-
mencement of its review unless the party 
seeking to offer the contract or swap agrees 
to an extension of this time limitation. 
(e) VIOLATION OF CORE PRINCIPLES.—Section 5c of 
the Commodity Exchange Act (7 U.S.C. 7a–2) is amended 
by striking subsection (d). 
SEC. 746. INSIDER TRADING. 
Section 4c(a) of the Commodity Exchange Act (7 
U.S.C. 6c(a)) is amended by adding at the end the fol-
lowing: 
‘‘(3) CONTRACT OF SALE.—It shall be unlawful 
for any employee or agent of any department or agen-
cy of the Federal Government who, by virtue of the 
employment or position of the employee or agent, ac-
quires information that may affect or tend to affect 
the price of any commodity in interstate commerce, 
or for future delivery, or any swap, and which infor-
mation has not been disseminated by the department 
or agency of the Federal Government holding or cre-
ating the information in a manner which makes it 
generally available to the trading public, or disclosed 
in a criminal, civil, or administrative hearing, or in
722 
† HR 4173 EAS 
a congressional, administrative, or Government Ac-
countability Office report, hearing, audit, or inves-
tigation, to use the information in his personal ca-
pacity and for personal gain to enter into, or offer to 
enter into— 
‘‘(A) a contract of sale of a commodity for 
future delivery (or option on such a contract); 
‘‘(B) an option (other than an option exe-
cuted or traded on a national securities exchange 
registered pursuant to section 6(a) of the Securi-
ties Exchange Act of 1934 (15 U.S.C. 78f(a)); or 
‘‘(C) a swap. 
‘‘(4) NONPUBLIC INFORMATION.— 
‘‘(A) IMPARTING OF NONPUBLIC INFORMA-
TION.—It shall be unlawful for any employee or 
agent of any department or agency of the Fed-
eral Government who, by virtue of the employ-
ment or position of the employee or agent, ac-
quires information that may affect or tend to af-
fect the price of any commodity in interstate 
commerce, or for future delivery, or any swap, 
and which information has not been dissemi-
nated by the department or agency of the Federal 
Government holding or creating the information 
in a manner which makes it generally available
723 
† HR 4173 EAS 
to the trading public, or disclosed in a criminal, 
civil, or administrative hearing, or in a congres-
sional, administrative, or Government Account-
ability Office report, hearing, audit, or inves-
tigation, to impart the information in his per-
sonal capacity and for personal gain with intent 
to assist another person, directly or indirectly, to 
use the information to enter into, or offer to 
enter into— 
‘‘(i) a contract of sale of a commodity 
for future delivery (or option on such a con-
tract); 
‘‘(ii) an option (other than an option 
executed or traded on a national securities 
exchange registered pursuant to section 6(a) 
of the Securities Exchange Act of 1934 (15 
U.S.C. 78f(a)); or 
‘‘(iii) a swap. 
‘‘(B) KNOWING USE.—It shall be unlawful 
for any person who receives information im-
parted by any employee or agent of any depart-
ment or agency of the Federal Government as de-
scribed in subparagraph (A) to knowingly use 
such information to enter into, or offer to enter 
into—
724 
† HR 4173 EAS 
‘‘(i) a contract of sale of a commodity 
for future delivery (or option on such a con-
tract); 
‘‘(ii) an option (other than an option 
executed or traded on a national securities 
exchange registered pursuant to section 6(a) 
of the Securities Exchange Act of 1934 (15 
U.S.C. 78f(a)); or 
‘‘(iii) a swap. 
‘‘(C) THEFT
OF
NONPUBLIC
INFORMA-
TION.—It shall be unlawful for any person to 
steal, convert, or misappropriate, by any means 
whatsoever, information held or created by any 
department or agency of the Federal Government 
that may affect or tend to affect the price of any 
commodity in interstate commerce, or for future 
delivery, or any swap, where such person knows, 
or acts in reckless disregard of the fact, that such 
information has not been disseminated by the de-
partment or agency of the Federal Government 
holding or creating the information in a manner 
which makes it generally available to the trading 
public, or disclosed in a criminal, civil, or ad-
ministrative hearing, or in a congressional, ad-
ministrative, or Government Accountability Of-
725 
† HR 4173 EAS 
fice report, hearing, audit, or investigation, and 
to use such information, or to impart such infor-
mation with the intent to assist another person, 
directly or indirectly, to use such information to 
enter into, or offer to enter into— 
‘‘(i) a contract of sale of a commodity 
for future delivery (or option on such a con-
tract); 
‘‘(ii) an option (other than an option 
executed or traded on a national securities 
exchange registered pursuant to section 6(a) 
of the Securities Exchange Act of 1934 (15 
U.S.C. 78f(a)); or 
‘‘(iii) a swap. 
Provided, however, that nothing in this sub-
paragraph shall preclude a person that has 
provided information concerning, or gen-
erated by, the person, its operations or ac-
tivities, to any employee or agent of any de-
partment or agency of the Federal Govern-
ment, voluntarily or as required by law, 
from using such information to enter into, 
or offer to enter into, a contract of sale, op-
tion, or swap described in clauses (i), (ii), 
or (iii).’’.
726 
† HR 4173 EAS 
SEC. 747. ANTIDISRUPTIVE PRACTICES AUTHORITY. 
Section 4c(a) of the Commodity Exchange Act (7 
U.S.C. 6c(a)) (as amended by section 746) is amended by 
adding at the end the following: 
‘‘(5) DISRUPTIVE PRACTICES.—It shall be un-
lawful for any person to engage in any trading, prac-
tice, or conduct on or subject to the rules of a reg-
istered entity that— 
‘‘(A) violates bids or offers; 
‘‘(B) demonstrates intentional or reckless 
disregard for the orderly execution of trans-
actions during the closing period; or 
‘‘(C) is, is of the character of, or is com-
monly known to the trade as, ‘spoofing’ (bidding 
or offering with the intent to cancel the bid or 
offer before execution). 
‘‘(6) RULEMAKING
AUTHORITY.—The Commis-
sion may make and promulgate such rules and regu-
lations as, in the judgment of the Commission, are 
reasonably necessary to prohibit the trading practices 
described in paragraph (5) and any other trading 
practice that is disruptive of fair and equitable trad-
ing. 
‘‘(7) USE OF SWAPS TO DEFRAUD.—It shall be 
unlawful for any person to enter into a swap know-
ing, or acting in reckless disregard of the fact, that
727 
† HR 4173 EAS 
its counterparty will use the swap as part of a device, 
scheme, or artifice to defraud any third party.’’. 
SEC. 748. COMMODITY WHISTLEBLOWER INCENTIVES AND 
PROTECTION. 
The Commodity Exchange Act (7 U.S.C. 1 et seq.) is 
amended by adding at the end the following: 
‘‘SEC. 23. COMMODITY WHISTLEBLOWER INCENTIVES AND 
PROTECTION. 
‘‘(a) DEFINITIONS.—In this section: 
‘‘(1) COVERED JUDICIAL OR ADMINISTRATIVE AC-
TION.—The term ‘covered judicial or administrative 
action’ means any judicial or administrative action 
brought by the Commission under this Act that results 
in monetary sanctions exceeding $1,000,000. 
‘‘(2) FUND.—The term ‘Fund’ means the Com-
modity Futures Trading Commission Customer Pro-
tection Fund established under subsection (g). 
‘‘(3) MONETARY SANCTIONS.—The term ‘mone-
tary sanctions’, when used with respect to any judi-
cial or administrative action means— 
‘‘(A) any monies, including penalties, 
disgorgement, restitution, and interest ordered to 
be paid; and 
‘‘(B) 
any 
monies 
deposited 
into 
a 
disgorgement fund or other fund pursuant to sec-
728 
† HR 4173 EAS 
tion 308(b) of the Sarbanes-Oxley Act of 2002 
(15 U.S.C. 7246(b)), as a result of such action 
or any settlement of such action. 
‘‘(4) ORIGINAL INFORMATION.—The term ‘origi-
nal information’ means information that— 
‘‘(A) is derived from the independent knowl-
edge or analysis of a whistleblower; 
‘‘(B) is not known to the Commission from 
any other source, unless the whistleblower is the 
original source of the information; and 
‘‘(C) is not exclusively derived from an alle-
gation made in a judicial or administrative 
hearing, in a governmental report, hearing, 
audit, or investigation, or from the news media, 
unless the whistleblower is a source of the infor-
mation. 
‘‘(5) RELATED ACTION.—The term ‘related ac-
tion’, when used with respect to any judicial or ad-
ministrative action brought by the Commission under 
this Act, means any judicial or administrative action 
brought by an entity described in subclauses (i) 
through (vi) of subsection (g)(2)(B) that is based upon 
the original information provided by a whistleblower 
pursuant to subsection (a) that led to the successful 
enforcement of the Commission action.
729 
† HR 4173 EAS 
‘‘(6) SUCCESSFUL RESOLUTION.—The term ‘suc-
cessful resolution’, when used with respect to any ju-
dicial or administrative action brought by the Com-
mission under this Act, includes any settlement of 
such action. 
‘‘(7) 
WHISTLEBLOWER.—The 
term 
‘whistle-
blower’ means any individual, or 2 or more individ-
uals acting jointly, who provides information relating 
to a violation of this Act to the Commission, in a 
manner established by rule or regulation, by the Com-
mission. 
‘‘(b) AWARDS.— 
‘‘(1) IN GENERAL.—In any covered judicial or 
administrative action, or related action, the Commis-
sion, under regulations prescribed by the Commission 
and subject to subsection (c), shall pay an award or 
awards to 1 or more whistleblowers who voluntarily 
provided original information to the Commission that 
led to the successful enforcement of the covered judi-
cial or administrative action, or related action, in an 
aggregate amount equal to— 
‘‘(A) not less than 10 percent, in total, of 
what has been collected of the monetary sanctions 
imposed in the action or related actions; and
730 
† HR 4173 EAS 
‘‘(B) not more than 30 percent, in total, of 
what has been collected of the monetary sanctions 
imposed in the action or related actions. 
‘‘(2) PAYMENT OF AWARDS.—Any amount paid 
under paragraph (1) shall be paid from the Fund. 
‘‘(c) DETERMINATION OF AMOUNT OF AWARD; DENIAL 
OF AWARD.— 
‘‘(1) DETERMINATION OF AMOUNT OF AWARD.— 
‘‘(A) DISCRETION.—The determination of 
the amount of an award made under subsection 
(b) shall be in the discretion of the Commission. 
‘‘(B) 
CRITERIA.—In 
determining 
the 
amount of an award made under subsection (b), 
the Commission shall take into account— 
‘‘(i) the significance of the information 
provided by the whistleblower to the success 
of the covered judicial or administrative ac-
tion; 
‘‘(ii) the degree of assistance provided 
by the whistleblower and any legal rep-
resentative of the whistleblower in a covered 
judicial or administrative action; 
‘‘(iii) the programmatic interest of the 
Commission in deterring violations of the 
Act (including regulations under the Act)
731 
† HR 4173 EAS 
by making awards to whistleblowers who 
provide information that leads to the suc-
cessful enforcement of such laws; and 
‘‘(iv) such additional relevant factors 
as the Commission may establish by rule or 
regulation. 
‘‘(2) DENIAL OF AWARD.—No award under sub-
section (b) shall be made— 
‘‘(A) to any whistleblower who is, or was at 
the time the whistleblower acquired the original 
information submitted to the Commission, a 
member, officer, or employee of— 
‘‘(i) a appropriate regulatory agency; 
‘‘(ii) the Department of Justice; 
‘‘(iii) a registered entity; 
‘‘(iv) a registered futures association; 
or 
‘‘(v) a self-regulatory organization as 
defined in section 3(a) of the Securities Ex-
change Act of 1934 (15 U.S.C. 78c(a)); or 
‘‘(vi) a law enforcement organization; 
‘‘(B) to any whistleblower who is convicted 
of a criminal violation related to the judicial or 
administrative action for which the whistle-
732 
† HR 4173 EAS 
blower otherwise could receive an award under 
this section; 
‘‘(C) to any whistleblower who submits in-
formation to the Commission that is based on the 
facts underlying the covered action submitted 
previously by another whistleblower; 
‘‘(D) to any whistleblower who fails to sub-
mit information to the Commission in such form 
as the Commission may, by rule or regulation, 
require. 
‘‘(d) REPRESENTATION.— 
‘‘(1) PERMITTED REPRESENTATION.—Any whis-
tleblower who makes a claim for an award under sub-
section (b) may be represented by counsel. 
‘‘(2) REQUIRED REPRESENTATION.— 
‘‘(A) IN GENERAL.—Any whistleblower who 
anonymously makes a claim for an award under 
subsection (b) shall be represented by counsel if 
the whistleblower submits the information upon 
which the claim is based. 
‘‘(B) DISCLOSURE OF IDENTITY.—Prior to 
the payment of an award, a whistleblower shall 
disclose the identity of the whistleblower and 
provide such other information as the Commis-
733 
† HR 4173 EAS 
sion may require, directly or through counsel for 
the whistleblower. 
‘‘(e) NO CONTRACT NECESSARY.—No contract with the 
Commission is necessary for any whistleblower to receive 
an award under subsection (b), unless otherwise required 
by the Commission, by rule or regulation. 
‘‘(f) APPEALS.— 
‘‘(1) IN
GENERAL.—Any determination made 
under this section, including whether, to whom, or in 
what amount to make awards, shall be in the discre-
tion of the Commission. 
‘‘(2) APPEALS.—Any determination described in 
paragraph (1) may be appealed to the appropriate 
court of appeals of the United States not more than 
30 days after the determination is issued by the Com-
mission. 
‘‘(3) REVIEW.—The court shall review the deter-
mination made by the Commission in accordance 
with section 7064 of title 5, United States Code. 
‘‘(g) COMMODITY FUTURES TRADING COMMISSION 
CUSTOMER PROTECTION FUND.— 
‘‘(1) ESTABLISHMENT.—There is established in 
the Treasury of the United States a revolving fund to 
be known as the ‘Commodity Futures Trading Com-
mission Customer Protection Fund’.
734 
† HR 4173 EAS 
‘‘(2) USE OF FUND.—The Fund shall be avail-
able to the Commission, without further appropria-
tion or fiscal year limitation, for— 
‘‘(A) the payment of awards to whistle-
blowers as provided in subsection (a); and 
‘‘(B) the funding of customer education ini-
tiatives designed to help customers protect them-
selves against fraud or other violations of this 
Act, or the rules and regulations thereunder. 
‘‘(3) DEPOSITS AND CREDITS.—There shall be 
deposited into or credited to the Fund— 
‘‘(A) any monetary judgment collected by 
the Commission in any judicial or administra-
tive action brought by the Commission under 
this Act, that is not otherwise distributed to vic-
tims of a violation of this Act or the rules and 
regulations thereunder underlying such action, 
unless the balance of the Fund at the time the 
monetary 
judgment 
is 
collected 
exceeds 
$100,000,000; and 
‘‘(B) all income from investments made 
under paragraph (4). 
‘‘(4) INVESTMENTS.— 
‘‘(A) AMOUNTS
IN
FUND
MAY
BE
IN-
VESTED.—The Commission may request the Sec-
735 
† HR 4173 EAS 
retary of the Treasury to invest the portion of 
the Fund that is not, in the Commission’s judg-
ment, required to meet the current needs of the 
Fund. 
‘‘(B) ELIGIBLE INVESTMENTS.—Investments 
shall be made by the Secretary of the Treasury 
in obligations of the United States or obligations 
that are guaranteed as to principal and interest 
by the United States, with maturities suitable to 
the needs of the Fund as determined by the Com-
mission. 
‘‘(C) INTEREST
AND
PROCEEDS
CRED-
ITED.—The interest on, and the proceeds from 
the sale or redemption of, any obligations held in 
the Fund shall be credited to, and form a part 
of, the Fund. 
‘‘(5) REPORTS TO CONGRESS.—Not later than 
October 30 of each year, the Commission shall trans-
mit to the Committee on Agriculture, Nutrition, and 
Forestry of the Senate, and the Committee on Agri-
culture of the House of Representatives a report on— 
‘‘(A) the Commission’s whistleblower award 
program under this section, including a descrip-
tion of the number of awards granted and the
736 
† HR 4173 EAS 
types of cases in which awards were granted 
during the preceding fiscal year; 
‘‘(B) customer education initiatives de-
scribed in paragraph (2)(B) that were funded by 
the Fund during the preceding fiscal year; 
‘‘(C) the balance of the Fund at the begin-
ning of the preceding fiscal year; 
‘‘(D) the amounts deposited into or credited 
to the Fund during the preceding fiscal year; 
‘‘(E) the amount of earnings on investments 
of amounts in the Fund during the preceding fis-
cal year; 
‘‘(F) the amount paid from the Fund dur-
ing the preceding fiscal year to whistleblowers 
pursuant to subsection (b); 
‘‘(G) the amount paid from the Fund dur-
ing the preceding fiscal year for customer edu-
cation initiatives described in paragraph (2)(B); 
‘‘(H) the balance of the Fund at the end of 
the preceding fiscal year; and 
‘‘(I) a complete set of audited financial 
statements, including a balance sheet, income 
statement, and cash flow analysis. 
‘‘(h) PROTECTION OF WHISTLEBLOWERS.— 
‘‘(1) PROHIBITION AGAINST RETALIATION.—
737 
† HR 4173 EAS 
‘‘(A) IN GENERAL.—No employer may dis-
charge, demote, suspend, threaten, harass, di-
rectly or indirectly, or in any other manner dis-
criminate against, a whistleblower in the terms 
and conditions of employment because of any 
lawful act done by the whistleblower— 
‘‘(i) in providing information to the 
Commission in accordance with subsection 
(b); or 
‘‘(ii) in assisting in any investigation 
or judicial or administrative action of the 
Commission based upon or related to such 
information. 
‘‘(B) ENFORCEMENT.— 
‘‘(i) CAUSE
OF
ACTION.—An indi-
vidual who alleges discharge or other dis-
crimination in violation of subparagraph 
(A) may bring an action under this sub-
section in the appropriate district court of 
the United States for the relief provided in 
subparagraph (C), unless the individual 
who is alleging discharge or other discrimi-
nation in violation of subparagraph (A) is 
an employee of the federal government, in 
which case the individual shall only bring
738 
† HR 4173 EAS 
an action under section 1221 of title 5 
United States Code. 
‘‘(ii) SUBPOENAS.—A subpoena requir-
ing the attendance of a witness at a trial or 
hearing conducted under this subsection 
may be served at any place in the United 
States. 
‘‘(iii) STATUTE OF LIMITATIONS.—An 
action under this subsection may not be 
brought more than 2 years after the date on 
which the violation reported in subpara-
graph (A) is committed. 
‘‘(C) RELIEF.—Relief for an individual 
prevailing in an action brought under subpara-
graph (B) shall include— 
‘‘(i) reinstatement with the same se-
niority status that the individual would 
have had, but for the discrimination; 
‘‘(ii) the amount of back pay otherwise 
owed to the individual, with interest; and 
‘‘(iii) compensation for any special 
damages sustained as a result of the dis-
charge or discrimination, including litiga-
tion costs, expert witness fees, and reason-
able attorney’s fees.
739 
† HR 4173 EAS 
‘‘(2) CONFIDENTIALITY.— 
‘‘(A) INFORMATION PROVIDED.— 
‘‘(i) IN GENERAL.—Except as provided 
in subparagraph (B), all information pro-
vided to the Commission by a whistleblower 
shall be confidential and privileged as an 
evidentiary matter (and shall not be subject 
to civil discovery or other legal process) in 
any proceeding in any Federal or State 
court or administrative agency, and shall be 
exempt from disclosure, in the hands of a 
department or agency of the Federal Gov-
ernment, under section 552 of title 5, 
United States Code (commonly known as 
the ‘Freedom of Information Act’) or other-
wise, unless and until required to be dis-
closed to a defendant or respondent in con-
nection with a public proceeding instituted 
by the Commission or any entity described 
in subparagraph (B). 
‘‘(ii) CONSTRUCTION.—For purposes of 
section 552 of title 5, United States Code, 
this paragraph shall be considered to be a 
statute described in subsection (b)(3)(B) of 
that section.
740 
† HR 4173 EAS 
‘‘(iii) EFFECT.—Nothing in this para-
graph is intended to limit the ability of the 
Attorney General to present such evidence to 
a grand jury or to share such evidence with 
potential witnesses or defendants in the 
course of an ongoing criminal investigation. 
‘‘(B) AVAILABILITY TO GOVERNMENT AGEN-
CIES.— 
‘‘(i) IN GENERAL.—Without the loss of 
its status as confidential and privileged in 
the hands of the Commission, all informa-
tion referred to in subparagraph (A) may, 
in the discretion of the Commission, when 
determined by the Commission to be nec-
essary or appropriate to accomplish the 
purposes of this Act and protect customers 
and in accordance with clause (ii), be made 
available to— 
‘‘(I) the Department of Justice; 
‘‘(II) an appropriate department 
or agency of the Federal Government, 
acting within the scope of its jurisdic-
tion; 
‘‘(III) a registered entity, reg-
istered futures association, or self-regu-
741 
† HR 4173 EAS 
latory organization as defined in sec-
tion 3(a) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78c(a)); 
‘‘(IV) a State attorney general in 
connection with any criminal inves-
tigation; 
‘‘(V) an appropriate department 
or agency of any State, acting within 
the scope of its jurisdiction; and 
‘‘(VI) a foreign futures authority. 
‘‘(ii) 
MAINTENANCE
OF
INFORMA-
TION.—Each of the entities, agencies, or 
persons described in clause (i) shall main-
tain information described in that clause as 
confidential and privileged, in accordance 
with the requirements in subparagraph (A). 
‘‘(3) RIGHTS RETAINED.—Nothing in this section 
shall be deemed to diminish the rights, privileges, or 
remedies of any whistleblower under any Federal or 
State law, or under any collective bargaining agree-
ment. 
‘‘(i) RULEMAKING
AUTHORITY.—The Commission 
shall have the authority to issue such rules and regulations 
as may be necessary or appropriate to implement the provi-
742 
† HR 4173 EAS 
sions of this section consistent with the purposes of this sec-
tion. 
‘‘(j) IMPLEMENTING RULES.—The Commission shall 
issue final rules or regulations implementing the provisions 
of this section not later than 270 days after the date of en-
actment of the Wall Street Transparency and Account-
ability Act of 2010. 
‘‘(k) ORIGINAL INFORMATION.—Information submitted 
to the Commission by a whistleblower in accordance with 
rules or regulations implementing this section shall not lose 
its status as original information solely because the whistle-
blower submitted such information prior to the effective 
date of such rules or regulations, provided such information 
was submitted after the date of enactment of the Wall Street 
Transparency and Accountability Act of 2010. 
‘‘(l) AWARDS.—A whistleblower may receive an award 
pursuant to this section regardless of whether any violation 
of a provision of this Act, or a rule or regulation thereunder, 
underlying the judicial or administrative action upon 
which the award is based occurred prior to the date of en-
actment of the Wall Street Transparency and Account-
ability Act of 2010. 
‘‘(m) PROVISION OF FALSE INFORMATION.—A whistle-
blower who knowingly and willfully makes any false, ficti-
tious, or fraudulent statement or representation, or who
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makes or uses any false writing or document knowing the 
same to contain any false, fictitious, or fraudulent state-
ment or entry, shall not be entitled to an award under this 
section and shall be subject to prosecution under section 
1001 of title 18, United States Code.’’. 
SEC. 749. CONFORMING AMENDMENTS. 
(a) Section 2(c)(1) of the Commodity Exchange Act (7 
U.S.C. 2(c)(1)) is amended, in the matter preceding sub-
paragraph (A), by striking ‘‘5a (to the extent provided in 
section 5a(g)),’’. 
(b) Section 4d of the Commodity Exchange Act (7 
U.S.C. 6d) (as amended by section 724) is amended— 
(1) in subsection (a)— 
(A) in the matter preceding paragraph 
(1)— 
(i) by striking ‘‘engage as’’ and insert-
ing ‘‘be a’’; and 
(ii) 
by 
striking 
‘‘or 
introducing 
broker’’ and all that follows through ‘‘or de-
rivatives transaction execution facility’’; 
(B) in paragraph (1), by striking ‘‘or intro-
ducing broker’’; and 
(C) in paragraph (2), by striking ‘‘if a fu-
tures commission merchant,’’; and 
(2) by adding at the end the following:
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‘‘(g) It shall be unlawful for any person to be an intro-
ducing broker unless such person shall have registered under 
this Act with the Commission as an introducing broker and 
such registration shall not have expired nor been suspended 
nor revoked.’’. 
(c) Section 4m(3) of the Commodity Exchange Act (7 
U.S.C. 6m(3)) is amended— 
(1) by striking ‘‘(3) Subsection (1) of this sec-
tion’’ and inserting the following: 
‘‘(3) EXCEPTION.— 
‘‘(A) IN GENERAL.—Paragraph (1)’’; and 
(2) by striking ‘‘to any investment trust’’ and all 
that follows through the period at the end and insert-
ing the following: ‘‘to any commodity pool that is en-
gaged primarily in trading commodity interests. 
‘‘(B) ENGAGED PRIMARILY.—For purposes 
of subparagraph (A), a commodity trading advi-
sor or a commodity pool shall be considered to 
be ‘engaged primarily’ in the business of being a 
commodity trading advisor or commodity pool if 
it is or holds itself out to the public as being en-
gaged primarily, or proposes to engage pri-
marily, in the business of advising on com-
modity interests or investing, reinvesting, own-
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(f) Section 6(b) of the Commodity Exchange Act (7 
U.S.C. 8(b)) is amended in the first sentence by striking 
‘‘, or to revoke the right of an electronic trading facility 
to rely on the exemption set forth in section 2(h)(3) with 
respect to a significant price discovery contract,’’. 
(g) Section 12(e)(2)(B) of the Commodity Exchange 
Act (7 U.S.C. 16(e)(2)(B)) is amended— 
(1) by striking ‘‘section 2(c), 2(d), 2(f), or 2(g) 
of this Act’’ and inserting ‘‘section 2(c), 2(f), or 2(i) 
of this Act’’; and 
(2) by striking ‘‘2(h) or’’. 
(h) Section 17(r)(1) of the Commodity Exchange Act 
(7 U.S.C. 21(r)(1)) is amended by striking ‘‘section 4d(c) 
of this Act’’ and inserting ‘‘section 4d(e)’’. 
(i) Section 22(b)(1)(A) of the Commodity Exchange 
Act (7 U.S.C. 25(b)(1)(A)) is amended by striking ‘‘section 
2(h)(7) or’’. 
(j) Section 408(2)(C) of the Federal Deposit Insurance 
Corporation Improvement Act of 1991 (12 U.S.C. 
4421(2)(C)) is amended— 
(1) by striking ‘‘section 2(c), 2(d), 2(f), or (2)(g) 
of such Act’’ and inserting ‘‘section 2(c), 2(f), or 2(i) 
of that Act’’; and 
(2) by striking ‘‘2(h) or’’.
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SEC. 750. STUDY ON OVERSIGHT OF CARBON MARKETS. 
(a) INTERAGENCY WORKING GROUP.—There is estab-
lished to carry out this section an interagency working 
group (referred to in this section as the ‘‘interagency 
group’’) composed of the following members or designees: 
(1) The Chairman of the Commodity Futures 
Trading Commission (referred to in this section as 
the ‘‘Commission’’), who shall serve as Chairman of 
the interagency group. 
(2) The Secretary of Agriculture. 
(3) The Secretary of the Treasury. 
(4) The Chairman of the Securities and Ex-
change Commission. 
(5) The Administrator of the Environmental 
Protection Agency. 
(6) The Chairman of the Federal Energy Regu-
latory Commission. 
(7) The Commissioner of the Federal Trade Com-
mission. 
(8) The Administrator of the Energy Informa-
tion Administration. 
(b) ADMINISTRATIVE
SUPPORT.—The Commission 
shall provide the interagency group such administrative 
support services as are necessary to enable the interagency 
group to carry out the functions of the interagency group 
under this section.
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(c) CONSULTATION.—In carrying out this section, the 
interagency group shall consult with representatives of ex-
changes, clearinghouses, self-regulatory bodies, major carbon 
market participants, consumers, and the general public, as 
the interagency group determines to be appropriate. 
(d) STUDY.—The interagency group shall conduct a 
study on the oversight of existing and prospective carbon 
markets to ensure an efficient, secure, and transparent car-
bon market, including oversight of spot markets and deriva-
tive markets. 
(e) REPORT.—Not later than 180 days after the date 
of enactment of this Act, the interagency group shall submit 
to Congress a report on the results of the study conducted 
under subsection (b), including recommendations for the 
oversight of existing and prospective carbon markets to en-
sure an efficient, secure, and transparent carbon market, 
including oversight of spot markets and derivative markets. 
SEC. 751. ENERGY AND ENVIRONMENTAL MARKETS ADVI-
SORY COMMITTEE. 
Section 2(a) of the Commodity Exchange Act (7 U.S.C. 
2(a)) (as amended by section 727) is amended by adding 
at the end the following: 
‘‘(15) ENERGY AND ENVIRONMENTAL MARKETS 
ADVISORY COMMITTEE.— 
‘‘(A) ESTABLISHMENT.—
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‘‘(i) IN
GENERAL.—An Energy and 
Environmental Markets Advisory Com-
mittee is hereby established. 
‘‘(ii) MEMBERSHIP.—The Committee 
shall have 9 members. 
‘‘(iii) ACTIVITIES.—The Committee’s 
objectives and scope of activities shall be— 
‘‘(I) to conduct public meetings; 
‘‘(II) to submit reports and rec-
ommendations to the Commission (in-
cluding dissenting or minority views, 
if any); and 
‘‘(III) otherwise to serve as a vehi-
cle for discussion and communication 
on matters of concern to exchanges, 
firms, end users, and regulators re-
garding energy and environmental 
markets and their regulation by the 
Commission. 
‘‘(B) REQUIREMENTS.— 
‘‘(i) IN
GENERAL.—The Committee 
shall hold public meetings at such intervals 
as are necessary to carry out the functions 
of the Committee, but not less frequently 
than 2 times per year.
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† HR 4173 EAS 
‘‘(ii) MEMBERS.—Members shall be ap-
pointed to 3-year terms, but may be re-
moved for cause by vote of the Commission. 
‘‘(C) APPOINTMENT.—The Commission shall 
appoint members with a wide diversity of opin-
ion and who represent a broad spectrum of inter-
ests, including hedgers and consumers. 
‘‘(D) REIMBURSEMENT.—Members shall be 
entitled to per diem and travel expense reim-
bursement by the Commission. 
‘‘(E) FACA.—The Committee shall not be 
subject to the Federal Advisory Committee Act (5 
U.S.C. App.).’’. 
SEC. 752. INTERNATIONAL HARMONIZATION. 
In order to promote effective and consistent global reg-
ulation of swaps and security-based swaps, the Securities 
and Exchange Commission, the Commodity Futures Trad-
ing Commission, the Financial Stability Oversight Council, 
and the Treasury Department— 
(1) shall, both individually and collectively, con-
sult and coordinate with foreign regulatory authori-
ties on the establishment of consistent international 
standards with respect to the regulation of such 
swaps; and