Commodity Exchange Reauthorization Act of 2005

Bill: 109-s-1566
Sponsor: Sen. Chambliss, Saxby [R-GA]
Introduced: 2005-07-29 in the Senate
Policy area: Finance and Financial Sector
Subjects: Administrative procedure
Agriculture and Food
Authorization
Bonds
Civil actions and liability
Commodity Futures Trading Commission
Commodity exchanges
Congress
Congressional reporting requirements
Crime and Law Enforcement
Criminal investigation
Economics and Public Finance
Fines (Penalties)
Fraud
Futures trading
Government Operations and Politics
Government securities
Independent regulatory commissions
Injunctions
Law
Margins (Security trading)
Prosecution
Securities and Exchange Commission
Securities regulation

Summary:
action_date: 2005-07-29
text: 
Commodity Exchange Reauthorization Act of 2005 - Amends the Commodity Exchange Act (CEA) to authorize the Commodity Futures Trading Commission (CFTC) to bring anti-fraud actions in off-exchange principal-to-principal futures transactions. 
 
Increases specified civil and criminal penalties for violations of such Act. 
 
Specifies, with exclusions, that CFTC jurisdiction extends to any agreement, contract, or transaction in foreign currency, and any person engaged in such transaction, that is offered to, or entered into: (1) with a person who is not an eligible contract participant; (2) on a leveraged, margined, or similarly financed basis; and (3) for purposes other than commercial or personal use, except that personal use shall include only those agreements, contracts, or transactions in which a person takes immediate ownership and possession of foreign currency. 
 
Directs CFTC to maintain a liaison with the Department of Justice to coordinate civil and criminal investigations and prosecutions of CEA violations.
 
Establishes a portfolio margining pilot program for security futures products.
 
Requires CFTC and the Securities and Exchange Commission (SEC) to jointly promulgate a final rule to exclude from the definition of &quot;narrow-based security index&quot; indexes based on: (1) U.S. debt instruments; (2) other U.S. securities; (3) foreign equities; and (4) foreign debt instruments. 

action_date: 2005-07-29
text: 

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

 
Commodity Exchange Reauthorization Act of 2005 - (Sec. 2) Amends the Commodity Exchange Act (CEA) to authorize the Commodity Futures Trading Commission (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. 3) Increases specified civil and criminal penalties for violations of such Act.
 
States that such provisions do not create new CFTC civil enforcement and administrative authority.
 
(Sec. 4) Revises foreign exchange transaction authority to specify that CFTC jurisdiction extends to any agreement, contract, or transaction in foreign currency, and any person engaged in such transaction, that is offered to, or entered into: (1) with a person who is not an eligible contract participant; (2) on a leveraged, margined, or similarly financed basis; and (3) for purposes other than commercial or personal use, except that personal use shall include only those agreements, contracts, or transactions in which a person takes immediate ownership and possession of foreign currency. 
 
States that such jurisdiction shall not apply if the counterparty, or the person offering to be the counterparty, of the person that is not an eligible contract participant is: (1) a financial institution; (2) a specified broker or dealer 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. 
 
(Sec. 5) Authorizes appropriations through FY2010.
 
(Sec. 6) Directs CFTC to maintain a liaison with the Department of Justice to coordinate civil and criminal investigations and prosecutions of CEA violations.
 
(Sec. 7) Establishes a two-year portfolio margining pilot program for security futures products, which shall continue to function unless a required report finds that such program has resulted in undue risks to the financial integrity of the relevant contract markets or derivatives transaction execution facilities, or to their respective clearing systems, or has resulted in systemic risk to financial markets or undue risk to customers.
 
(Sec. 8) Requires CFTC and the Securities and Exchange Commission (SEC) to jointly promulgate a final rule to exclude from the definition of &quot;narrow-based security index&quot; indexes based on: (1) U.S. debt instruments; (2) other U.S. securities; (3) foreign equities; and (4) foreign debt instruments. 


Legislative actions:
action_date: 2005-07-29
text: Placed on Senate Legislative Calendar under General Orders. Calendar No. 191.
action_date: 2005-07-29
text: Committee on Agriculture, Nutrition, and Forestry. Original measure reported to Senate by Senator Chambliss. With written report No. 109-119.
action_date: 2005-07-29
text: Committee on Agriculture, Nutrition, and Forestry. Original measure reported to Senate by Senator Chambliss. With written report No. 109-119.
action_date: 2005-07-29
text: Introduced in Senate
action_date: 2005-07-21
text: Committee on Agriculture, Nutrition, and Forestry ordered to be reported an original measure.