‘‘(13) ENERGY COMMODITY.—The term ‘energy 
commodity’ means— 
‘‘(A) coal; 
‘‘(B) crude oil, gasoline, diesel fuel, jet 
fuel, heating oil, and propane; 
‘‘(C) electricity (excluding financial trans-
mission rights which are subject to regulation 
and oversight by the Federal Energy Regu-
latory Commission); 
‘‘(D) natural gas; and 
‘‘(E) any other substance (other than an 
excluded commodity, a metal, or an agricultural 
commodity) that is used as a source of energy, 
as the Commission, in its discretion, deems ap-
propriate.’’; and 
(4) by inserting after paragraph (22) (as so re-
designated by paragraph (2) of this subsection) the 
following: 
‘‘(23) INCLUDED ENERGY TRANSACTION.—The 
term ‘included energy transaction’ means a contract, 
agreement, or transaction in an energy commodity 
for future delivery that provides for a delivery point 
of the energy commodity in the United States or a 
territory or possession of the United States, or that 
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is offered or transacted on or through a computer 
terminal located in the United States.’’. 
(b) EXTENSION
OF REGULATORY AUTHORITY
TO 
SWAPS
INVOLVING
ENERGY
TRANSACTIONS.—Section 
2(g) of such Act (7 U.S.C. 2(g)) is amended by inserting 
‘‘or an energy commodity’’ after ‘‘agricultural com-
modity’’. 
(c) ELIMINATION OF EXEMPTION FOR OVER-THE- 
COUNTER SWAPS INVOLVING ENERGY COMMODITIES.— 
Section 2(h)(1) of such Act (7 U.S.C. 2(h)(1)) is amended 
by inserting ‘‘(other than an energy commodity)’’ after 
‘‘exempt commodity’’. 
(d) EXTENSION OF REGULATORY AUTHORITY TO IN-
CLUDED ENERGY TRANSACTIONS ON FOREIGN BOARDS 
OF TRADE.—Section 4 of such Act (7 U.S.C. 6) is amend-
ed— 
(1) in subsection (a), by inserting ‘‘, and which 
is not an included energy transaction’’ after ‘‘terri-
tories or possessions’’ the 2nd place it appears; and 
(2) in subsection (b), by adding at the end the 
following: ‘‘The preceding sentence shall not apply 
with respect to included energy transactions.’’. 
(e) LIMITATION OF GENERAL EXEMPTIVE AUTHOR-
ITY OF THE CFTC WITH RESPECT TO INCLUDED EN-
ERGY TRANSACTIONS.— 
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(1) IN GENERAL.—Section 4(c) of such Act (7 
U.S.C. 6(c)) is amended by adding at the end the 
following: 
‘‘(6) The Commission may not exempt any in-
cluded energy transaction from the requirements of 
subsection (a), unless the Commission provides 60 
days advance notice to the Congress and the Posi-
tion Limit Energy Advisory Group and solicits pub-
lic comment about the exemption request and any 
proposed Commission action.’’. 
(2) NULLIFICATION OF NO-ACTION LETTER EX-
EMPTIONS TO CERTAIN REQUIREMENTS APPLICABLE 
TO INCLUDED ENERGY TRANSACTIONS.—Beginning 
180 days after the date of the enactment of this Act, 
any exemption provided by the Commodity Futures 
Trading Commission that has allowed included en-
ergy transactions (as defined in section 1a(13) of 
the Commodity Exchange Act) to be conducted with-
out regard to the requirements of section 4(a) of 
such Act shall be null and void. 
(f) REQUIREMENT TO ESTABLISH UNIFORM SPECU-
LATIVE POSITION LIMITS FOR ENERGY TRANSACTIONS.— 
(1) IN GENERAL.—Section 4a(a) of such Act (7 
U.S.C. 6a(a)) is amended— 
(A) by inserting ‘‘(1)’’ after ‘‘(a)’’; 
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(B) by inserting after the 2nd sentence the 
following: ‘‘With respect to energy transactions, 
the Commission shall fix limits on the aggre-
gate number of positions which may be held by 
any person for each month across all markets 
subject to the jurisdiction of the Commission.’’; 
(C) in the 4th sentence by inserting ‘‘, con-
sistent with the 3rd sentence,’’ after ‘‘Commis-
sion’’; and 
(D) by adding after and below the end the 
following: 
‘‘(2)(A) Not later than 60 days after the date of the 
enactment of this paragraph, the Commission shall con-
vene a Position Limit Energy Advisory Group consisting 
of representatives from— 
‘‘(i) 7 predominantly commercial short hedgers 
of the actual energy commodity for future delivery; 
‘‘(ii) 7 predominantly commercial long hedgers 
of the actual energy commodity for future delivery; 
‘‘(iii) 4 non-commercial participants in markets 
for energy commodities for future delivery; and 
‘‘(iv) each designated contract market or de-
rivatives transaction execution facility upon which a 
contract in the energy commodity for future delivery 
is traded, and each electronic trading facility that 
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has a significant price discovery contract in the en-
ergy commodity. 
‘‘(B) Not later than 60 days after the date on which 
the advisory group is convened under subparagraph (A), 
and annually thereafter, the advisory group shall submit 
to the Commission advisory recommendations regarding 
the position limits to be established in paragraph (1). 
‘‘(C) The Commission shall have exclusive authority 
to grant exemptions for bona fide hedging transactions 
and positions from position limits imposed under this Act 
on energy transactions.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) SIGNIFICANT PRICE DISCOVERY CON-
TRACTS.—Section 2(h)(7) of such Act (7 U.S.C. 
2(h)(7)) is amended— 
(i) in subparagraph (A)— 
(I) by inserting ‘‘of this para-
graph and section 4a(a)’’ after ‘‘(B) 
through (D)’’; and 
(II) by inserting ‘‘of this para-
graph’’ before the period; and 
(ii) in subparagraph (C)(ii)(IV)— 
(I) in the heading, by striking 
‘‘LIMITATIONS OR’’; and 
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(II) by striking ‘‘position limita-
tions or’’. 
(B) CONTRACTS TRADED ON OR THROUGH 
DESIGNATED
CONTRACT
MARKETS.—Section 
5(d)(5) of such Act (7 U.S.C. 7(d)(5)) is 
amended— 
(i) in the heading by striking ‘‘LIMI-
TATIONS OR’’; and 
(ii) by striking ‘‘position limitations 
or’’. 
(C) CONTRACTS TRADED ON OR THROUGH 
DERIVATIVES TRANSACTION EXECUTION FACILI-
TIES.—Section 5a(d)(4) of such Act (7 U.S.C. 
7a(d)(4)) is amended— 
(i) in the heading by striking ‘‘LIMI-
TATIONS OR’’; and 
(ii) by striking ‘‘position limits or’’. 
(g) ELIMINATION OF THE SWAPS LOOPHOLE.—Sec-
tion 4a(c) of such Act (7 U.S.C. 6a(c)) is amended— 
(1) by inserting ‘‘(1)’’ after ‘‘(c)’’; and 
(2) by adding after and below the end the fol-
lowing: 
‘‘(2) For the purposes of contracts of sale for future 
delivery and options on such contracts or commodities, the 
Commission shall define what constitutes a bona fide 
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hedging transaction or position as a transaction or posi-
tion that— 
‘‘(A)(i) represents a substitute for transactions 
made or to be made or positions taken or to be 
taken at a later time in a physical marketing chan-
nel; 
‘‘(ii) is economically appropriate to the reduc-
tion of risks in the conduct and management of a 
commercial enterprise; and 
‘‘(iii) arises from the potential change in the 
value of— 
‘‘(I) assets that a person owns, produces, 
manufactures, processes, or merchandises or 
anticipates owning, producing, manufacturing, 
processing, or merchandising; 
‘‘(II) liabilities that a person owns or an-
ticipates incurring; or 
‘‘(III) services that a person provides, pur-
chases, or anticipates providing or purchasing; 
or 
‘‘(B) reduces risks attendant to a position re-
sulting from a transaction that— 
‘‘(i) was executed pursuant to subsection 
(d), (g), (h)(1), or (h)(2) of section 2, or an ex-
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emption issued by the Commission by rule, reg-
ulation or order; and 
‘‘(ii) was executed opposite a counterparty 
for which the transaction would qualify as a 
bona fide hedging transaction pursuant to para-
graph (2)(A) of this subsection.’’. 
(h) DETAILED REPORTING AND DISAGGREGATION OF 
MARKET DATA.—Section 4 of such Act (7 U.S.C. 6) is 
amended by adding at the end the following: 
‘‘(e) DETAILED REPORTING AND DISAGGREGATION 
OF MARKET DATA.— 
‘‘(1) INDEX TRADERS AND SWAP DEALERS RE-
PORTING.—The Commission shall issue a proposed 
rule defining and classifying index traders and swap 
dealers (as those terms are defined by the Commis-
sion) for purposes of data reporting requirements 
and setting routine detailed reporting requirements 
for any positions of such entities in contracts traded 
on designated contract markets, over-the-counter 
markets, derivatives transaction execution facilities, 
foreign boards of trade subject to section 4(f), and 
electronic trading facilities with respect to signifi-
cant price discovery contracts not later than 120 
days after the date of the enactment of this sub-
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section, and issue a final rule within 180 days after 
such date of enactment. 
‘‘(2) DISAGGREGATION OF INDEX FUNDS AND 
OTHER
DATA
IN
MARKETS.—Subject to section 8 
and beginning within 60 days of the issuance of the 
final rule required by paragraph (1), the Commis-
sion shall disaggregate and make public weekly— 
‘‘(A) the number of positions and total no-
tional value of index funds and other passive, 
long-only and short-only positions (as defined 
by the Commission) in all markets to the extent 
such information is available; and 
‘‘(B) data on speculative positions relative 
to bona fide physical hedgers in those markets 
to the extent such information is available. 
‘‘(3) DISCLOSURE OF IDENTITY OF HOLDERS 
OF POSITIONS IN INDEXES IN EXCESS OF POSITION 
LIMITS.—The Commission shall include in its weekly 
Commitment of Trader reports the identity of each 
person who holds a position in an index in excess of 
a limit imposed under section 4i.’’. 
(i) AUTHORITY TO SET LIMITS TO PREVENT EXCES-
SIVE SPECULATION IN INDEXES.— 
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(1) IN GENERAL.—Section 4a of such Act (7 
U.S.C. 6a) is amended by adding at the end the fol-
lowing: 
‘‘(f) The provisions of this section shall apply to the 
amounts of trading which may be done or positions which 
may be held by any person under contracts of sale of an 
index for future delivery on or subject to the rules of any 
contract market, derivatives transaction execution facility, 
or over-the-counter market, or on an electronic trading fa-
cility with respect to a significant price discovery contract, 
in the same manner in which this section applies to con-
tracts of sale of a commodity for future delivery.’’. 
(2) REGULATIONS.—The Commodity Futures 
Trading Commission shall issue regulations under 
section 4a(f) of the Commodity Exchange Act within 
180 days after the date of the enactment of this Act. 
SEC. 4. NO EFFECT ON AUTHORITY OF THE FEDERAL EN-
ERGY REGULATORY COMMISSION. 
Section 2 of the Commodity Exchange Act (7 U.S.C. 
2) is amended by adding at the end the following:. 
‘‘(j) NO EFFECT ON FERC AUTHORITY.—This Act 
shall not be interpreted to affect the jurisdiction of the 
Federal Energy Regulatory Commission with respect to 
the authority of the Federal Energy Regulatory Commis-
sion under the Federal Power Act (16 U.S.C. 791a et 
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seq.), the Natural Gas Act (15 U.S.C. 717 et seq.), or 
other law to obtain information, carry out enforcement ac-
tions, or otherwise carry out the responsibilities of the 
Federal Energy Regulatory Commission.’’. 
SEC. 5. INSPECTOR GENERAL OF THE COMMODITY FU-
TURES TRADING COMMISSION. 
(a) ELEVATION OF OFFICE.— 
(1) INCLUSION OF CFTC IN DEFINITION OF ES-
TABLISHMENT.— 
(A) Section 11(1) of the Inspector General 
Act of 1978 (5 U.S.C. App.) is amended by 
striking ‘‘or the Federal Cochairpersons of the 
Commissions established under section 15301 
of title 40, United States Code;’’ and inserting 
‘‘the Federal Cochairpersons of the Commis-
sions established under section 15301 of title 
40, United States Code; or the Chairman of the 
Commodity Futures Trading Commission;’’. 
(B) Section 11(2) of the Inspector General 
Act of 1978 (5 U.S.C. App.) is amended by 
striking ‘‘or the Commissions established under 
section 15301 of title 40, United States Code,’’ 
and inserting ‘‘the Commissions established 
under section 15301 of title 40, United States 
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Code, or the Commodity Futures Trading Com-
mission,’’. 
(2) EXCLUSION OF CFTC FROM DEFINITION OF 
DESIGNATED
FEDERAL
ENTITY.—Section 8G(a)(2) 
of the Inspector General Act of 1978 (5 U.S.C. 
App.) is amended by striking ‘‘the Commodity Fu-
tures Trading Commission,’’. 
(b) EFFECTIVE DATE; TRANSITION RULE.— 
(1) EFFECTIVE DATE.—The amendments made 
by this section shall take effect 30 days after the 
date of the enactment of this Act. 
(2) TRANSITION RULE.—An individual serving 
as Inspector General of the Commodity Futures 
Trading Commission on the effective date of this 
section pursuant to an appointment made under sec-
tion 8G of the Inspector General Act of 1978 (5 
U.S.C. App.)— 
(A) may continue so serving until the 
President makes an appointment under section 
3(a) of such Act consistent with the amend-
ments made by this section; and 
(B) shall, while serving under subpara-
graph (A), remain subject to the provisions of 
section 8G of such Act which apply with respect 
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to the Commodity Futures Trading Commis-
sion. 
SEC. 6. SETTLEMENT AND CLEARING THROUGH REG-
ISTERED DERIVATIVES CLEARING ORGANIZA-
TIONS. 
(a) IN GENERAL.— 
(1) APPLICATION
TO
EXCLUDED
DERIVATIVE 
TRANSACTIONS.— 
(A) Section 2(d)(1) of the Commodity Ex-
change Act (7 U.S.C. 2(d)(1)) is amended— 
(i) by striking ‘‘and’’ at the end of 
subparagraph (A); 
(ii) by striking the period at the end 
of subparagraph (B) and inserting ‘‘and’’; 
and 
(iii) by adding at the end the fol-
lowing: 
‘‘(C) except as provided in section 4(f), the 
agreement, contract, or transaction is settled 
and cleared through a derivatives clearing orga-
nization registered with the Commission.’’. 
(B) Section 2(d)(2) of such Act (7 U.S.C. 
2(d)(2)) is amended— 
(i) by striking ‘‘and’’ at the end of 
subparagraph (B); 
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(ii) by striking the period at the end 
of subparagraph (C) and inserting ‘‘; and’’; 
and 
(iii) by adding at the end the fol-
lowing: 
‘‘(D) except as provided in section 4(f), the 
agreement, contract, or transaction is settled 
and cleared through a derivatives clearing orga-
nization registered with the Commission.’’. 
(2) APPLICATION
TO
CERTAIN
SWAP
TRANS-
ACTIONS.—Section 2(g) of such Act (7 U.S.C. 2(g)) 
is amended— 
(A) by striking ‘‘and’’ at the end of para-
graph (2); 
(B) by striking the period at the end of 
paragraph (3) and inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
‘‘(4) except as provided in section 4(f), settled 
and cleared through a derivatives clearing organiza-
tion registered with the Commission.’’. 
(3) APPLICATION TO CERTAIN TRANSACTIONS 
IN EXEMPT COMMODITIES.— 
(A) Section 2(h)(1) of such Act (7 U.S.C. 
2(h)(1)) is amended— 
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(i) by striking ‘‘and’’ at the end of 
subparagraph (A); 
(ii) by striking the period at the end 
of subparagraph (B) and inserting ‘‘; 
and’’; and 
(iii) by adding at the end the fol-
lowing: 
‘‘(C) except as provided in section 4(f), is 
settled and cleared through a derivatives clear-
ing organization registered with the Commis-
sion.’’. 
(B) Section 2(h)(3) of such Act (7 U.S.C. 
2(h)(3)) is amended— 
(i) by striking ‘‘and’’ at the end of 
subparagraph (A); 
(ii) by striking the period at the end 
of subparagraph (B) and inserting ‘‘; 
and’’; and 
(iii) by adding at the end the fol-
lowing: 
‘‘(C) except as provided in section 4(f), set-
tled and cleared through a derivatives clearing 
organization registered with the Commission.’’. 
(4) GENERAL
EXEMPTIVE
AUTHORITY.—Sec-
tion 4(c)(1) of such Act (7 U.S.C. 6(c)(1)) is 
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amended by inserting ‘‘the agreement, contract, or 
transaction, except as provided in section 4(h), will 
be settled and cleared through a derivatives clearing 
organization registered with the Commission and’’ 
before ‘‘the Commission determines’’. 
(5) CONFORMING
AMENDMENT
RELATING
TO 
SIGNIFICANT
PRICE
DISCOVERY
CONTRACTS.—Sec-
tion 2(h)(7)(D) of such Act (7 U.S.C. 2(h)(7)(D)) is 
amended by striking the heading for the subpara-
graph and all that follows through ‘‘As part of’’ and 
inserting the following: 
‘‘(D) REVIEW OF IMPLEMENTATION.—As 
part of’’. 
(b) ALTERNATIVES TO CLEARING THROUGH DES-
IGNATED CLEARING ORGANIZATIONS.—Section 4 of such 
Act (7 U.S.C. 6), as amended by section 3(h) of this Act, 
is amended by adding at the end the following: 
‘‘(f) ALTERNATIVES TO CLEARING THROUGH DES-
IGNATED CLEARING ORGANIZATIONS.— 
‘‘(1) SETTLEMENT
AND
CLEARING
THROUGH 
CERTAIN OTHER REGULATED ENTITIES.—An agree-
ment, contract, or transaction, or class thereof, re-
lating to an excluded commodity, that would other-
wise be required to be settled and cleared by section 
2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 2(h)(1)(C), or 
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2(h)(3)(C) of this Act, or subsection (c)(1) of this 
section may be settled and cleared through an entity 
listed in subsections (a) or (b) of section 409 of the 
Federal Deposit Insurance Corporation Improvement 
Act of 1991. 
‘‘(2) WAIVER OF CLEARING REQUIREMENT.— 
‘‘(A) The Commission, in its discretion, 
may exempt an agreement, contract, or trans-
action, or class thereof, that would otherwise be 
required by section 2(d)(1)(C), 2(d)(2)(D), 
2(g)(4), 2(h)(1)(C), or 2(h)(3)(C) of this Act, 
or subsection (c)(1) of this section to be settled 
and cleared through a derivatives clearing orga-
nization registered with the Commission from 
such requirement. 
‘‘(B) In granting exemptions pursuant to 
subparagraph (A), the Commission shall consult 
with the Securities and Exchange Commission 
and the Board of Governors of the Federal Re-
serve System regarding exemptions that relate 
to excluded commodities or entities for which 
the Securities Exchange Commission or the 
Board of Governors of the Federal Reserve Sys-
tem serve as the primary regulator. 
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‘‘(C) Before granting an exemption pursu-
ant to subparagraph (A), the Commission shall 
find that the agreement, contract, or trans-
action, or class thereof— 
‘‘(i) is highly customized as to its ma-
terial terms and conditions; 
‘‘(ii) is transacted infrequently; 
‘‘(iii) does not serve a significant 
price-discovery function in the market-
place; and 
‘‘(iv) is being entered into by parties 
who can demonstrate the financial integ-
rity of the agreement, contract, or trans-
action and their own financial integrity, as 
such terms and standards are determined 
by the Commission. The standards may in-
clude, with respect to any federally regu-
lated financial entity for which net capital 
requirements are imposed, a net capital re-
quirement associated with any agreement, 
contract, or transaction subject to an ex-
emption from the clearing requirement 
that is higher than the net capital require-
ment that would be associated with such a 
transaction were it cleared. 
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‘‘(D) Any agreement, contract, or trans-
action, or class thereof, which is exempted pur-
suant to subparagraph (A) shall be reported to 
the Commission in a manner designated by the 
Commission, or to such other entity the Com-
mission deems appropriate. 
‘‘(E) The Commission, the Securities and 
Exchange Commission, and the Board of Gov-
ernors of the Federal Reserve System shall 
enter into a memorandum of understanding by 
which the information reported to the Commis-
sion pursuant to subparagraph (D) with regard 
to excluded commodities or entities for which 
the Securities Exchange Commission or the 
Board of Governors of the Federal Reserve Sys-
tem serve as the primary regulator may be pro-
vided to the other agencies. 
‘‘(g) SPOT AND FORWARD EXCLUSION.—The settle-
ment and clearing requirements of section 2(d)(1)(C), 
2(d)(2)(D), 2(g)(4), 2(h)(1)(C), 2(h)(3)(C), or 4(c)(1) 
shall not apply to an agreement, contract, or transaction 
of any cash commodity for immediate or deferred ship-
ment or delivery, as defined by the Commission.’’. 
(c) ADDITIONAL REQUIREMENTS APPLICABLE
TO 
APPLICANTS
FOR
REGISTRATION
AS
A
DERIVATIVE 
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CLEARING ORGANIZATION.—Section 5b(c)(2) of such Act 
(7 U.S.C. 7a–1(c)(2)) is amended by adding at the end 
the following: 
‘‘(O) DISCLOSURE OF GENERAL INFORMA-
TION.—The applicant shall disclose publicly and 
to the Commission information concerning— 
‘‘(i) the terms and conditions of con-
tracts, 
agreements, 
and 
transactions 
cleared and settled by the applicant; 
‘‘(ii) the conventions, mechanisms, 
and practices applicable to the contracts, 
agreements, and transactions; 
‘‘(iii) the margin-setting methodology 
and the size and composition of the finan-
cial resource package of the applicant; and 
‘‘(iv) other information relevant to 
participation in the settlement and clearing 
activities of the applicant. 
‘‘(P) DAILY PUBLICATION OF TRADING IN-
FORMATION.—The applicant shall make public 
daily information on settlement prices, volume, 
and open interest for contracts settled or 
cleared pursuant to the requirements of 
2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 2(h)(1)(C), 
2(h)(3)(C) or 4(c)(1) of this Act by the appli-
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cant if the Commission determines that the 
contracts perform a significant price discovery 
function for transactions in the cash market for 
the commodity underlying the contracts. 
‘‘(Q) FITNESS STANDARDS.—The applicant 
shall establish and enforce appropriate fitness 
standards for directors, members of any dis-
ciplinary committee, and members of the appli-
cant, and any other persons with direct access 
to the settlement or clearing activities of the 
applicant, including any parties affiliated with 
any of the persons described in this subpara-
graph.’’. 
(d) AMENDMENTS.— 
(1) Section 409 of the Federal Deposit Insur-
ance Corporation Improvement Act of 1991 (12 
U.S.C. 4422) is amended by adding at the end the 
following: 
‘‘(c) 
CLEARING
REQUIREMENT.—A 
multilateral 
clearing organization described in subsections (a) or (b) 
of this section shall comply with requirements similar to 
the requirements of sections 5b and 5c or the Commodity 
Exchange Act.’’. 
(2) Section 407 of the Legal Certainty for 
Bank Products Act of 2000 (7 U.S.C. 27e) is 
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amended by inserting ‘‘and the settlement and clear-
ing requirements of sections 2(d)(1)(C), 2(d)(2)(D), 
2(g)(4), 2(h)(1)(C), 2(h)(3)(C), and 4(c)(1) of such 
Act’’ after ‘‘the clearing of covered swap agree-
ments’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall take effect 150 days after the date of 
the enactment of this Act. 
(f) TRANSITION RULE.—Any agreement, contract, or 
transaction entered into before the date of the enactment 
of this Act or within 150 days after such date of enact-
ment, in reliance on subsection (d), (g), (h)(1), or (h)(3) 
of section 2 of the Commodity Exchange Act or any other 
exemption issued by the Commission Futures Trading 
Commission by rule, regulation, or order shall, within 90 
days after such date of enactment, unless settled and 
cleared through an entity registered with the Commission 
as a derivatives clearing organization or another clearing 
entity pursuant to section 4(f) of such Act, be reported 
to the Commission in a manner designated by the Com-
mission, or to such other entity as the Commission deems 
appropriate. 
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SEC. 7. LIMITATION ON ELIGIBILITY TO PURCHASE A 
CREDIT DEFAULT SWAP. 
(a) IN GENERAL.—Section 4c of the Commodity Ex-
change Act (7 U.S.C. 6c) is amended by adding at the 
end the following: 
‘‘(h) LIMITATION ON ELIGIBILITY TO PURCHASE A 
CREDIT DEFAULT SWAP.—It shall be unlawful for any 
person to enter into a credit default swap unless the per-
son— 
‘‘(1) owns a credit instrument which is insured 
by the credit default swap; 
‘‘(2) would experience financial loss if an event 
that is the subject of the credit default swap occurs 
with respect to the credit instrument; and 
‘‘(3) meets such minimum capital adequacy 
standards as may be established by the Commission, 
in consultation with the Board of Governors of the 
Federal Reserve System, or such more stringent 
minimum capital adequacy standards as may be es-
tablished by or under the law of any State in which 
the swap is originated or entered into, or in which 
possession of the contract involved takes place.’’. 
(b) ELIMINATION
OF
PREEMPTION
OF
STATE 
BUCKETING LAWS REGARDING NAKED CREDIT DEFAULT 
SWAPS.—Section 12(e)(2)(B) of such Act (7 U.S.C. 
16(e)(2)(B)) is amended by inserting ‘‘(other than a credit 
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default swap in which the purchaser of the swap would 
not experience financial loss if an event that is the subject 
of the swap occurred)’’ before ‘‘that is excluded’’. 
(c) DEFINITION OF CREDIT DEFAULT SWAP.—Sec-
tion 1a of such Act (7 U.S.C. 1a), as amended by section 
3(a) of this Act, is amended by adding at the end the fol-
lowing: 
‘‘(37) CREDIT DEFAULT SWAP.—the term ‘cred-
it default swap’ means a contract which insures a 
party to the contract against the risk that an entity 
may experience a loss of value as a result of an 
event specified in the contract, such as a default or 
credit downgrade. A credit default swap that is trad-
ed on or cleared by a registered entity shall be ex-
cluded from the definition of a security as defined in 
this Act and in section 2(a)(1) of the Securities Act 
of 1933 or section 3(a)(10) of the Securities Ex-
change Act of 1934, except it shall be deemed a se-
curity solely for purpose of enforcing prohibitions 
against insider trading in sections 10 and 16 of the 
Securities Exchange Act of 1934.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall be effective for credit default swaps (as 
defined in section 1a(37) of the Commodity Exchange Act) 
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entered into after 60 days after the date of the enactment 
of this section. 
SEC. 8. TRANSACTION FEES. 
(a) IN GENERAL.—Section 12 of the Commodity Ex-
change Act (7 U.S.C. 16) is amended by redesignating 
subsections (e), (f), and (g) as subsections (f), (g), and 
(h), respectively, and inserting after subsection (d) the fol-
lowing: 
‘‘(e) CLEARING FEES.— 
‘‘(1) IN GENERAL.—The Commission shall, in 
accordance with this subsection, charge and collect 
from each registered clearing organization, and each 
such organization shall pay to the Commission, 
transaction fees at a rate calculated to recover the 
costs to the Federal Government of the supervision 
and regulation of futures markets, except those di-
rectly related to enforcement. 
‘‘(2) FEES ASSESSED PER SIDE OF CLEARED 
CONTRACTS.— 
‘‘(A) IN GENERAL.—The Commission shall 
determine the fee rate referred to in paragraph 
(1), and shall apply the fee rate per side of any 
transaction cleared. 
‘‘(B) AUTHORITY
TO
DELEGATE.—The 
Commission may determine the procedures by 
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which the fee rate is to be applied on the trans-
actions subject to the fee, or delegate the au-
thority to make the determination to any appro-
priate derivatives clearing organization. 
‘‘(3) EXEMPTIONS.—The Commision may not 
impose a fee under paragraph (1) on— 
‘‘(A) a class of contracts or transactions if 
the Commission finds that it is in the public in-
terest to exempt the class from the fee; or 
‘‘(B) a contract or transaction cleared by 
a registered derivatives clearing organization 
that is— 
‘‘(i) subject to fees under section 31 
of the Securities Exchange Act of 1934; or 
‘‘(ii) a security as defined in the Secu-
rities Act of 1933 or the Securities Ex-
change Act of 1934. 
‘‘(4) DATES FOR PAYMENT OF FEES.—The fees 
imposed under paragraph (1) shall be paid on or be-
fore— 
‘‘(A) March 15 of each year, with respect 
to transactions occurring on or after the pre-
ceding September 1 and on or before the pre-
ceding December 31; and 
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‘‘(B) September 15 of each year, with re-
spect to transactions occurring on or after the 
preceding January 1 and on or before the pre-
ceding August 31. 
‘‘(5) ANNUAL ADJUSTMENT OF FEE RATES.— 
‘‘(A) IN GENERAL.—Not later than April 
30 of each fiscal year, the Commission shall, by 
order, adjust each fee rate determined under 
paragraph (2) for the fiscal year to a uniform 
adjusted rate that, when applied to the esti-
mated aggregate number of cleared sides of 
transactions for the fiscal year, is reasonably 
likely to produce aggregate fee receipts under 
this subsection for the fiscal year equal to the 
target offsetting receipt amount for the fiscal 
year. 
‘‘(B) DEFINITIONS.—In subparagraph (A): 
‘‘(i) ESTIMATED AGGREGATE NUMBER 
OF CLEARED SIDES OF TRANSACTIONS.— 
The term ‘estimated aggregate number of 
cleared sides of transactions’ means, with 
respect to a fiscal year, the aggregate 
number of cleared sides of transactions to 
be cleared by registered derivatives clear-
ing organizations during the fiscal year, as 
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estimated by the Commission, after con-
sultation with the Office of Management 
and Budget, using the methodology re-
quired for making projections pursuant to 
section 257 of the Balanced Budget and 
Emergency Deficit Control Act of 1985. 
‘‘(ii) TARGET
OFFSETTING
RECEIPT 
AMOUNT.—The term ‘target offsetting re-
ceipt amount’ means, with respect to a fis-
cal year, the total level of Commission 
budget authority for all non-enforcement 
activities of the Commission, as contained 
in the regular appropriations Acts for the 
fiscal year. 
‘‘(C) NO JUDICIAL REVIEW.—An adjusted 
fee rate prescribed under subparagraph (A) 
shall not be subject to judicial review. 
‘‘(6) PUBLICATION.—Not later than April 30 of 
each fiscal year, the Commission shall cause to be 
published in the Federal Register notices of the fee 
rates applicable under this subsection for the suc-
ceeding fiscal year, and any estimate or projection 
on which the fee rates are based. 
‘‘(7) INAPPLICABILITY
OF
CERTAIN
PROCE-
DURAL
RULES.—Section 553 of title 5, United 
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States Code, shall not apply with respect to any ex-
ercise of authority under this subsection. 
‘‘(8) ESTABLISHMENT
OF
FUTURES
AND
OP-
TIONS
TRANSACTION
FEE
ACCOUNT; DEPOSIT
OF 
FEES.—There is established in the Treasury of the 
United States an account which shall be known as 
the ‘Futures and Options Transaction Fee Account’. 
All fees collected under this subsection for a fiscal 
year shall be deposited in the account. Amounts in 
the account are authorized to be appropriated to 
fund the expenditures of the Commission.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to fiscal years beginning 30 or 
more days after the date of the enactment of this Act. 
(c) TRANSITION RULE.—If this section becomes law 
after March 31 and before September 1 of a fiscal year, 
then paragraphs (5)(A) and (6) of section 12(e) of the 
Commodity Exchange Act shall be applied, in the case of 
the 1st fiscal year beginning after the date of the enact-
ment of this Act, by substituting ‘‘August 31’’ for ‘‘April 
30’’. 
SEC. 9. NO EFFECT ON AUTHORITY OF THE FEDERAL 
TRADE COMMISSION. 
Nothing in this Act shall be interpreted to affect or 
diminish the jurisdiction or authority of the Federal Trade 
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Commission with respect to its authorities under the Fed-
eral Trade Commission Act (15 U.S.C. 41 et seq.) or the 
Energy Independence and Security Act of 2007 (Public 
Law 110–140) to obtain information, to carry out enforce-
ment activities or otherwise carry out the responsibilities 
of the Federal Trade Commission. 
SEC. 10. CEASE-AND-DESIST AUTHORITY. 
(a) NATURAL GAS ACT.—Section 20 of the Natural 
Gas Act (15 U.S.C. 717s) is amended by adding the fol-
lowing at the end: 
‘‘(e) CEASE-AND-DESIST PROCEEDINGS; TEMPORARY 
ORDERS; AUTHORITY OF THE COMMISSION.— 
‘‘(1) IN GENERAL.—If the Commission finds, 
after notice and opportunity for hearing, that any 
entity may be violating, may have violated, or may 
be about to violate any provision of this Act, or any 
rule, regulation, restriction, condition, or order made 
or imposed by the Commission under the authority 
of this Act, the Commission may publish its findings 
and issue an order requiring such entity, and any 
other entity that is, was, or would be a cause of the 
violation, due to an act or omission the entity knew 
or should have known would contribute to such vio-
lation, to cease and desist from committing or caus-
ing such violation and any future violation of the 
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same provision, rule, or regulation. Such order may, 
in addition to requiring an entity to cease and desist 
from committing or causing a violation, require such 
entity to comply, to provide an accounting and 
disgorgement, or to take steps to effect compliance, 
with such provision, rule, or regulation, upon such 
terms and conditions and within such time as the 
Commission may specify in such order. Any such 
order may, as the Commission deems appropriate, 
require future compliance or steps to effect future 
compliance, either permanently or for such period of 
time as the Commission may specify. 
‘‘(2) TIMING
OF
ENTRY.—An order issued 
under this subsection shall be entered only after no-
tice and opportunity for a hearing, unless the Com-
mission determines that notice and hearing prior to 
entry would be impracticable or contrary to the pub-
lic interest. 
‘‘(f) HEARING.—The notice instituting proceedings 
pursuant to subsection (e) shall fix a hearing date not ear-
lier than 30 days nor later than 60 days after service of 
the notice unless an earlier or a later date is set by the 
Commission with the consent of any respondent so served. 
‘‘(g) TEMPORARY ORDER.—Whenever the Commis-
sion determines that— 
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‘‘(1) a respondent may take actions to dissipate 
or convert assets prior to the completion of the pro-
ceedings referred to in subsection (e), and such as-
sets would be necessary to comply with or otherwise 
satisfy a final enforcement order of the Commission 
pursuant to alleged violations or threatened viola-
tions specified in the notice instituting proceedings, 
or 
‘‘(2) a respondent is engaged in actual or 
threatened violations of this Act or a Commission 
rule, regulation, restriction or order referred to in 
subsection (e), 
the Commission may issue a temporary order requiring 
the respondent to take such action to prevent dissipation 
or conversion of assets, significant harm to energy con-
sumers, or substantial harm to the public interest, frustra-
tion of the Commission’s ability to conduct the pro-
ceedings, or frustration of the Commission’s ability to re-
dress said violation at the conclusion of the proceedings, 
as the Commission deems appropriate pending completion 
of such proceedings. 
‘‘(h) REVIEW OF TEMPORARY ORDERS.— 
‘‘(1) COMMISSION REVIEW.—At any time after 
the respondent has been served with a temporary 
cease-and-desist order pursuant to subsection (g), 
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the respondent may apply to the Commission to have 
the order set aside, limited, or suspended. If the re-
spondent has been served with a temporary cease- 
and-desist order entered without a prior Commission 
hearing, the respondent may, within 10 days after 
the date on which the order was served, request a 
hearing on such application and the Commission 
shall hold a hearing and render a decision on such 
application at the earliest possible time. 
‘‘(2) JUDICIAL REVIEW.—Within— 
‘‘(A) 10 days after the date the respondent 
was served with a temporary cease-and-desist 
order entered with a prior Commission hearing; 
or 
‘‘(B) 10 days after the Commission ren-
ders a decision on an application and hearing 
under paragraph (1), with respect to any tem-
porary cease-and-desist order entered without a 
prior Commission hearing, the respondent may 
apply to the United States district court for the 
district in which the respondent resides or has 
its principal place of business, or for the Dis-
trict of Columbia, for an order setting aside, 
limiting, or suspending the effectiveness or en-
forcement of the order, and the court shall have 
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jurisdiction to enter such an order. A respond-
ent served with a temporary cease-and-desist 
order entered without a prior Commission hear-
ing may not apply to the court except after 
hearing and decision by the Commission on the 
respondent’s application under paragraph (1) of 
this subsection. 
‘‘(3) NO
AUTOMATIC
STAY
OF
TEMPORARY 
ORDER.—The commencement of proceedings under 
paragraph (2) of this subsection shall not, unless 
specifically ordered by the court, operate as a stay 
of the Commission’s order. 
‘‘(4) EXCLUSIVE REVIEW.—Sections 19(d) and 
24 shall not apply to a temporary order entered pur-
suant to this section. 
‘‘(i) IMPLEMENTATION.—The Commission is author-
ized to adopt rules, regulations, and orders as it deems 
appropriate to implement this section.’’. 
(b) FEDERAL POWER ACT.—Section 314 of the Fed-
eral Power Act (16 U.S.C. 825m) is amended by adding 
the following at the end: 
‘‘(e) CEASE-AND-DESIST PROCEEDINGS; TEMPORARY 
ORDERS; AUTHORITY OF THE COMMISSION.— 
‘‘(1) IN GENERAL.—If the Commission finds, 
after notice and opportunity for hearing, that any 
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entity may be violating, may have violated, or may 
be about to violate any provision of this Act, or any 
rule, regulation, restriction, condition, or order made 
or imposed by the Commission under the authority 
of this Act, the Commission may publish its findings 
and issue an order requiring such entity, and any 
other entity that is, was, or would be a cause of the 
violation, due to an act or omission the entity knew 
or should have known would contribute to such vio-
lation, to cease and desist from committing or caus-
ing such violation and any future violation of the 
same provision, rule, or regulation. Such order may, 
in addition to requiring an entity to cease and desist 
from committing or causing a violation, require such 
entity to comply, to provide an accounting and 
disgorgement, or to take steps to effect compliance, 
with such provision, rule, or regulation, upon such 
terms and conditions and within such time as the 
Commission may specify in such order. Any such 
order may, as the Commission deems appropriate, 
require future compliance or steps to effect future 
compliance, either permanently or for such period of 
time as the Commission may specify. 
‘‘(2) TIMING
OF
ENTRY.—An order issued 
under this subsection shall be entered only after no-
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tice and opportunity for a hearing, unless the Com-
mission determines that notice and hearing prior to 
entry would be impracticable or contrary to the pub-
lic interest. 
‘‘(3) HEARING.—The notice instituting pro-
ceedings pursuant to paragraph (1) shall fix a hear-
ing date not earlier than 30 days nor later than 60 
days after service of the notice unless an earlier or 
a later date is set by the Commission with the con-
sent of any respondent so served. 
‘‘(4) TEMPORARY ORDER.—Whenever the Com-
mission determines that— 
‘‘(A) a respondent may take actions to dis-
sipate or convert assets prior to the completion 
of the proceedings referred to in paragraph (1), 
and such assets would be necessary to comply 
with or otherwise satisfy a final enforcement 
order of the Commission pursuant to alleged 
violations or threatened violations specified in 
the notice instituting proceedings, or 
‘‘(B) a respondent is engaged in actual or 
threatened violations of this Act or a Commis-
sion rule, regulation, restriction or order re-
ferred to in paragraph (1), 
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the Commission may issue a temporary order requir-
ing the respondent to take such action to prevent 
dissipation or conversion of assets, significant harm 
to energy consumers, or substantial harm to the 
public interest, frustration of the Commission’s abil-
ity to conduct the proceedings, or frustration of the 
Commission’s ability to redress said violation at the 
conclusion of the proceedings, as the Commission 
deems appropriate pending completion of such pro-
ceedings. 
‘‘(5) REVIEW OF TEMPORARY ORDERS.— 
‘‘(A) COMMISSION REVIEW.—At any time 
after the respondent has been served with a 
temporary cease-and-desist order pursuant to 
paragraph (4), the respondent may apply to the 
Commission to have the order set aside, limited, 
or suspended. If the respondent has been served 
with a temporary cease-and-desist order entered 
without a prior Commission hearing, the re-
spondent may, within 10 days after the date on 
which the order was served, request a hearing 
on such application and the Commission shall 
hold a hearing and render a decision on such 
application at the earliest possible time. 
‘‘(B) JUDICIAL REVIEW.—Within— 
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‘‘(i) 10 days after the date the re-
spondent was served with a temporary 
cease-and-desist order entered with a prior 
Commission hearing; or 
‘‘(ii) 10 days after the Commission 
renders a decision on an application and 
hearing under subparagraph (A), with re-
spect to any temporary cease-and-desist 
order entered without a prior Commission 
hearing, the respondent may apply to the 
United States district court for the district 
in which the respondent resides or has its 
principal place of business, or for the Dis-
trict of Columbia, for an order setting 
aside, limiting, or suspending the effective-
ness or enforcement of the order, and the 
court shall have jurisdiction to enter such 
an order. A respondent served with a tem-
porary cease-and-desist order entered with-
out a prior Commission hearing may not 
apply to the court except after hearing and 
decision by the Commission on the re-
spondent’s application under subparagraph 
(A) of this paragraph. 
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‘‘(C) NO AUTOMATIC STAY OF TEMPORARY 
ORDER.—The commencement of proceedings 
under subparagraph (B) of this subsection shall 
not, unless specifically ordered by the court, op-
erate as a stay of the Commission’s order. 
‘‘(D) EXCLUSIVE
REVIEW.—Section 317 
shall not apply to a temporary order entered 
pursuant to this section. 
‘‘(6) IMPLEMENTATION.—The Commission is 
authorized to adopt rules, regulations, and orders as 
it deems appropriate to implement this subsection.’’. 
(c) NATURAL GAS POLICY ACT OF 1978.—Section 
504 of the Natural Gas Policy Act of 1978 (15 U.S.C. 
3414) is amended by adding the following at the end: 
‘‘(c) CEASE-AND-DESIST PROCEEDINGS; TEMPORARY 
ORDERS; AUTHORITY OF THE COMMISSION.— 
‘‘(1) IN GENERAL.—If the Commission finds, 
after notice and opportunity for hearing, that any 
entity may be violating, may have violated, or may 
be about to violate any provision of this Act, or any 
rule, regulation, restriction, condition, or order made 
or imposed by the Commission under the authority 
of this Act, the Commission may publish its findings 
and issue an order requiring such entity, and any 
other entity that is, was, or would be a cause of the 
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violation, due to an act or omission the entity knew 
or should have known would contribute to such vio-
lation, to cease and desist from committing or caus-
ing such violation and any future violation of the 
same provision, rule, or regulation. Such order may, 
in addition to requiring an entity to cease and desist 
from committing or causing a violation, require such 
entity to comply, to provide an accounting and 
disgorgement, or to take steps to effect compliance, 
with such provision, rule, or regulation, upon such 
terms and conditions and within such time as the 
Commission may specify in such order. Any such 
order may, as the Commission deems appropriate, 
require future compliance or steps to effect future 
compliance, either permanently or for such period of 
time as the Commission may specify. 
‘‘(2) TIMING
OF
ENTRY.—An order issued 
under this subsection shall be entered only after no-
tice and opportunity for a hearing, unless the Com-
mission determines that notice and hearing prior to 
entry would be impracticable or contrary to the pub-
lic interest. 
‘‘(3) HEARING.—The notice instituting pro-
ceedings pursuant to paragraph (1) shall fix a hear-
ing date not earlier than 30 days nor later than 60 
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days after service of the notice unless an earlier or 
a later date is set by the Commission with the con-
sent of any respondent so served. 
‘‘(4) TEMPORARY ORDER.—Whenever the Com-
mission determines that— 
‘‘(A) a respondent may take actions to dis-
sipate or convert assets prior to the completion 
of the proceedings referred to in paragraph (1) 
and such assets would be necessary to comply 
with or otherwise satisfy a final enforcement 
order of the Commission pursuant to alleged 
violations or threatened violations specified in 
the notice instituting proceedings, or 
‘‘(B) a respondent is engaged in actual or 
threatened violations of this Act or a Commis-
sion rule, regulation, restriction or order re-
ferred to in paragraph (1), 
the Commission may issue a temporary order requir-
ing the respondent to take such action to prevent 
dissipation or conversion of assets, significant harm 
to energy consumers, or substantial harm to the 
public interest, frustration of the Commission’s abil-
ity to conduct the proceedings, or frustration of the 
Commission’s ability to redress said violation at the 
conclusion of the proceedings, as the Commission 
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deems appropriate pending completion of such pro-
ceedings. 
‘‘(5) REVIEW OF TEMPORARY ORDERS.— 
‘‘(A) COMMISSION REVIEW.—At any time 
after the respondent has been served with a 
temporary cease-and-desist order pursuant to 
paragraph (4), the respondent may apply to the 
Commission to have the order set aside, limited, 
or suspended. If the respondent has been served 
with a temporary cease-and-desist order entered 
without a prior Commission hearing, the re-
spondent may, within 10 days after the date on 
which the order was served, request a hearing 
on such application and the Commission shall 
hold a hearing and render a decision on such 
application at the earliest possible time. 
‘‘(B) JUDICIAL REVIEW.—Within— 
‘‘(i) 10 days after the date the re-
spondent was served with a temporary 
cease-and-desist order entered with a prior 
Commission hearing; or 
‘‘(ii) 10 days after the Commission 
renders a decision on an application and 
hearing under subparagraph (A), with re-
spect to any temporary cease-and-desist 
VerDate Nov 24 2008 
01:00 May 16, 2009
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rfrederick on PROD1PC67 with BILLS