CFTC Reauthorization Act of 2005

Bill: 109-hr-4473
Sponsor: Rep. Goodlatte, Bob [R-VA-6]
Introduced: 2005-12-08 in the House
Policy area: Finance and Financial Sector
Subjects: Administrative procedure
Agriculture and Food
Authorization
Business records
Commerce
Commodity Futures Trading Commission
Commodity exchanges
Contracts
Crime and Law Enforcement
Derivative securities
Economics and Public Finance
Energy
Energy prices
Fines (Penalties)
Foreign Trade and International Finance
Foreign exchange
Fraud
Futures trading
Government Operations and Politics
Government paperwork
Independent regulatory commissions
Information disclosure (Securities law)
Jurisdiction
Law
Margins (Security trading)
Market manipulation
Natural gas
Options (Contract)
Securities and Exchange Commission
Securities regulation

Summary:
action_date: 2005-12-08
text: 
CFTC Reauthorization Act of 2005 - Amends the Commodity Exchange Act to revise Commodities Futures Trading Commission (CFTC) jurisdiction over an agreement, contract, or retail transaction in foreign currency. Extends registration requirements to particular persons participating in the solicitation or recommendation of any such agreement, contract, or transaction.
 
Revises the prohibition against contracts designed to defraud or mislead. Declares that the requirements of such prohibition do not obligate any person, in connection with a transaction, to disclose to another person in the transaction any nonpublic information that may be material to the market price, rate, or level of the commodity or transaction, except as necessary to make any statement to such other person not misleading in any material respect.
 
Directs the agencies represented on the President's Working Group on Financial Markets to work to ensure that the Securities and Exchange Commission (SEC) and the CFTC have taken action to permit: (1) risk-based portfolio margining for security options and security futures products by September 30, 2006; and (2) by June 30, 2006, the trading of futures on certain security indexes by resolving issues related to debt security indexes and foreign security indexes.
 
Authorizes appropriations through FY2010.
 
Instructs the CFTC to increase transparency of natural gas prices by conducting: (1) surveillance of trading in natural gas contracts; and (2) a review of the factors that caused significant and highly unusual change in the settlement price of any physically delivered natural gas futures contract traded on a contract market or derivatives transaction execution facility.
 
Directs the CFTC to require any person holding, maintaining, or controlling any position in a contract of sale of natural gas for future delivery, or option on such a contract, at or exceeding reportable limits, to maintain records for five years regarding the position, including any related contract, agreement, or transaction in natural gas to which the person is a party.
 
Increases: (1) the civil penalty for market manipulation to $1 million, or triple the monetary gain for each such violation; and (2) the criminal penalty for market manipulation from five to ten years imprisonment.

action_date: 2005-12-14
text: 

(This measure has not been amended since it was introduced. The summary has been expanded because action occurred on the measure.)

 
CFTC Reauthorization Act of 2005 - 
Title I: General Provisions - 
(Sec. 101) Amends the Commodity Exchange Act (CEA) to revise Commodities Futures Trading Commission (CFTC) jurisdiction over an agreement, contract, or retail transaction in foreign currency. 
 
Specifies that CFTC jurisdiction extends to any agreement, contract, or transaction in foreign currency that is a commodity contract of sale for future delivery or an option on such a contract, and is offered to, or entered into with a person that is not an eligible contract participant, unless the counterparty, or the person offering to be the counterparty, of the person is: (1) a financial institution; (2) a specified broker, dealer, or associated person registered under the Securities Exchange Act of 1934; (3) a specified futures commission merchant registered under CEA; (4) a specified insurance company or affiliate; (5) a financial holding company; or (6) an investment bank holding company. Extends registration requirements to particular persons participating in the solicitation or recommendation of any such agreement, contract, or transaction.
 
(Sec. 102) Authorizes CFTC to bring anti-fraud actions in off-exchange principal-to-principal futures transactions. Provides that a person shall not be obligated, in connection with a covered futures transaction with another person, to disclose to such other person nonpublic information that may be material to the market price, rate, or level of such commodity or transaction except as necessary to make any statement not materially misleading.
 
(Sec. 103) Directs the agencies represented on the President's Working Group on Financial Markets to work to ensure that the Securities and Exchange Commission (SEC) and the CFTC have taken action to permit: (1) risk-based portfolio margining for security options and security futures products by September 30, 2006; and (2) by June 30, 2006, the trading of futures on certain security indexes by resolving issues related to debt security indexes and foreign security indexes.
 
(Sec. 104) Authorizes appropriations through FY2010.
 

Title II: Natural Gas Price Transparency
 - (Sec. 201) Instructs CFTC to increase transparency of natural gas prices by conducting: (1) surveillance of trading in natural gas contracts; and (2) a review of the factors that caused significant and highly unusual change in the settlement price of any physically delivered natural gas futures contract traded on a contract market or derivatives transaction execution facility. Includes among review factors: (1) prices and price relationships in the futures and cash markets; (2) market information and cash market supply and demand factors; (3) large futures and options market positions and transactions on the contract market or derivatives transaction execution facility; and (4) related natural gas contracts, agreements, or transactions. 
 
(Sec. 202) Directs CFTC to require any person holding, maintaining, or controlling any position in a contract of sale of natural gas for future delivery or option on such a contract, at or exceeding reportable limits, to maintain and provide on CFTC request records for five years regarding the position, including any related contract, agreement, or transaction in natural gas to which the person is a party.
 
(Sec. 203) Increases: (1) the civil penalty for specified commodity market manipulation-related offenses to $1 million, or triple the monetary gain for each such violation; and (2) the criminal penalty for specified commodity trading-related felonies from five to ten years imprisonment.


Legislative actions:
action_date: 2006-01-27
text: Read twice. Placed on Senate Legislative Calendar under General Orders. Calendar No. 358.
action_date: 2005-12-15
text: Received in the Senate.
action_date: 2005-12-14
text: Motion to reconsider laid on the table Agreed to without objection.
action_date: 2005-12-14
text: On motion to suspend the rules and pass the bill Agreed to by voice vote. (text: CR H11553-11555)
action_date: 2005-12-14
text: Passed/agreed to in House: On motion to suspend the rules and pass the bill Agreed to by voice vote.(text: CR H11553-11555)
action_date: 2005-12-14
text: DEBATE - The House proceeded with forty minutes of debate on H.R. 4473.
action_date: 2005-12-14
text: Considered under suspension of the rules. (consideration: CR H11553-11561)
action_date: 2005-12-14
text: Mr. Goodlatte moved to suspend the rules and pass the bill.
action_date: 2005-12-08
text: Referred to the Subcommittee on Farm Commodities and Risk Management.
action_date: 2005-12-08
text: Referred to the Committee on Agriculture, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
action_date: 2005-12-08
text: Referred to the Committee on Agriculture, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
action_date: 2005-12-08
text: Referred to the Committee on Agriculture, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
action_date: 2005-12-08
text: Introduced in House
action_date: 2005-12-08
text: Introduced in House