Home > 106th Congressional Bills > S. 50 (is) To improve options for excellence in education. [Introduced in Senate] ...S. 50 (is) To improve options for excellence in education. [Introduced in Senate] ...
on the covered entity; and
``(ii) the name and address of each
participant on the covered entity authorized to
enter into transactions; and
``(C) in the case of a transaction or covered
entity performing a significant price discovery
function for transactions in the cash market for the
underlying commodity, subject to paragraph (6), the
requirements (to the extent the Commission determines
appropriate by regulation) that--
``(i) information on trading volume,
settlement price, open interest, and opening
and closing ranges be made available to the
public on a daily basis;
``(ii) notice be provided to the Commission
in such form as the Commission may require;
``(iii) reports be filed with the
Commission (such as large trader position
reports); and
``(iv) consistent with section 4i, books
and records be maintained relating to each
transaction in such form as the Commission may
require for a period of at least 5 years after
the date of the transaction.
``(6) Proprietary information.--In carrying out paragraph
(5)(C), the Commission shall not--
``(A) require the real-time publication of
proprietary information;
``(B) prohibit the commercial sale or licensing of
real-time proprietary information; and
``(C) publicly disclose information regarding
market positions, business transactions, trade secrets,
or names of customers, except as provided in section 8.
``(7) Notification, disclosures, and other requirements for
covered entities.--A covered entity subject to the exemption
under paragraph (3) shall (to the extent the Commission
determines appropriate)--
``(A) notify the Commission of the intention of the
covered entity to operate as a covered entity subject
to the exemption under paragraph (3), which notice
shall include--
``(i) the name and address of the covered
entity and a person designated to receive
communications from the Commission;
``(ii) the commodity categories that the
covered entity intends to list or otherwise
make available for trading on the covered
entity in reliance on the exemption under
paragraph (3);
``(iii) certifications that--
``(I) no executive officer or
member of the governing board of, or
any holder of a 10 percent or greater
equity interest in, the covered entity
is a person described in any of
subparagraphs (A) through (H) of
section 8a(2);
``(II) the covered entity will
comply with the conditions for
exemption under this subsection; and
``(III) the covered entity will
notify the Commission of any material
change in the information previously
provided by the covered entity to the
Commission under this paragraph; and
``(iv) the identity of any derivatives
clearing organization to which the covered
entity transmits or intends to transmit
transaction data for the purpose of
facilitating the clearance and settlement of
transactions conducted on the covered entity
subject to the exemption under paragraph (3);
``(B)(i) provide the Commission with access to the
trading protocols of the covered entity and electronic
access to the covered entity with respect to
transactions conducted in reliance on the exemption
under paragraph (3); and
``(ii) on special call by the Commission, provide
to the Commission, in a form and manner and within the
period specified in the special call, such information
relating to the business of the covered entity as a
covered entity exempt under paragraph (3), including
information relating to data entry and transaction
details with respect to transactions entered into in
reliance on the exemption under paragraph (3), as the
Commission may determine appropriate--
``(I) to enforce the provisions specified
in paragraph (4);
``(II) to evaluate a systemic market event;
or
``(III) to obtain information requested by
a Federal financial regulatory authority to
enable the authority to fulfill the regulatory
or supervisory responsibilities of the
authority;
``(C)(i) on receipt of any subpoena issued by or on
behalf of the Commission to any foreign person that the
Commission believes is conducting or has conducted
transactions in reliance on the exemption under
paragraph (3) on or through the covered entity relating
to the transactions, promptly notify the foreign person
of, and transmit to the foreign person, the subpoena in
a manner that is reasonable under the circumstances, or
as specified by the Commission; and
``(ii) if the Commission has reason to believe that
a person has not timely complied with a subpoena issued
by or on behalf of the Commission under clause (i), and
the Commission in writing directs that a covered entity
relying on the exemption under paragraph (3) deny or
limit further transactions by the person, deny that
person further trading access to the covered entity or,
as applicable, limit that access of the person to the
covered entity for liquidation trading only;
``(D) comply with the requirements of this
subsection applicable to the covered entity and require
that each participant, as a condition of trading on the
covered entity in reliance on the exemption under
paragraph (3), agree to comply with all applicable law;
``(E) certify to the Commission that the covered
entity has a reasonable basis for believing that
participants authorized to conduct transactions on the
covered entity in reliance on the exemption under
paragraph (3) are eligible contract participants;
``(F) maintain sufficient capital, commensurate
with the risk associated with transactions conducted on
the covered entity; and
``(G) not represent to any person that the covered
entity is registered with, or designated, recognized,
licensed, or approved by the Commission.
``(8) Hearing.--A person named in a subpoena referred to in
paragraph (7)(C) that believes the person is or may be
adversely affected or aggrieved by action taken by the
Commission under this subsection, shall have the opportunity
for a prompt hearing after the Commission acts under procedures
that the Commission shall establish by rule, regulation, or
order.
``(9) Private regulatory organizations.--
``(A) Delegation of functions under core
principles.--A covered entity may comply with any core
principle under subparagraph (B) that is applicable to
the covered entity through delegation of any relevant
function to--
``(i) a registered futures association
under section 17; or
``(ii) another registered entity.
``(B) Core principles.--The Commission may
establish core principles requiring a covered entity to
monitor trading to--
``(i) prevent fraud and manipulation;
``(ii) prevent price distortion and
disruptions of the delivery or cash settlement
process;
``(iii) ensure that the covered entity has
adequate financial, operational, and managerial
resources to discharge the responsibilities of
the covered entity; and
``(iv) ensure that all reporting,
recordkeeping, notice, and registration
requirements under this subsection are
discharged in a timely manner.
``(C) Responsibility.--A covered entity that
delegates a function under subparagraph (A) shall
remain responsible for carrying out the function.
``(D) Noncompliance.--If a covered entity that
delegates a function under subparagraph (A) becomes
aware that a delegated function is not being performed
as required under this Act, the covered entity shall
promptly take action to address the noncompliance.
``(E) Violation of core principles.--
``(i) In general.--If the Commission
determines, on the basis of substantial
evidence, that a covered entity is violating
any applicable core principle specified in
subparagraph (B), the Commission shall--
``(I) notify the covered entity in
writing of the determination; and
``(II) afford the covered entity an
opportunity to make appropriate changes
to bring the covered entity into
compliance with the core principles.
``(ii) Failure to make changes.--If, not
later than 30 days after receiving a
notification under clause (i)(I), a covered
entity fails to make changes that, as
determined by the Commission, are necessary to
comply with the core principles, the Commission
may take further action in accordance with this
Act.
``(F) Reservation of emergency authority.--Nothing
in this paragraph limits or affects the emergency
powers of the Commission provided under section 8a(9).
``(10) No effect on other authority.--This subsection shall
not affect the authority of the Federal Energy Regulatory
Commission under the Federal Power Act (16 U.S.C. 791a et seq.)
or the Natural Gas Act (15 U.S.C 717 et seq.).''.
SEC. 8. PROHIBITION OF FRAUDULENT TRANSACTIONS.
Section 4b of the Commodity Exchange Act (7 U.S.C. 6b) is amended
by striking subsection (a) and inserting the following:
``(a) Prohibition.--It shall be unlawful for any person, directly
or indirectly, in or in connection with any account, or any offer to
enter into, the entry into, or the confirmation of the execution of,
any agreement, contract, or transaction subject to this Act--
``(1) to cheat or defraud or attempt to cheat or defraud
any person (but this paragraph does not impose on parties to
transactions executed on or subject to the rules of designated
contract markets or registered derivative transaction execution
facilities a legal duty to provide counterparties or any other
market participants with any material market information);
``(2) willfully to make or cause to be made to any person
any false report or statement, or willfully to enter or cause
to be entered for any person any false record (but this
paragraph does not impose on parties to transactions executed
on or subject to the rules of designated contract markets or
registered derivative transaction execution facilities a legal
duty to provide counterparties or any other market participants
with any material market information);
``(3) willfully to deceive or attempt to deceive any person
by any means whatsoever (but this paragraph does not impose on
parties to transactions executed on or subject to the rules of
designated contract markets or registered derivative
transaction execution facilities a legal duty to provide
counterparties or any other market participants with any
material market information); or
``(4) except as permitted in written rules of a board of
trade designated as a contract market or derivatives
transaction execution facility on which the agreement,
contract, or transaction is traded and executed--
``(A) to bucket an order;
``(B) to fill an order by offset against 1 or more
orders of another person; or
``(C) willfully and knowingly, for or on behalf of
any other person and without the prior consent of the
person, to become--
``(i) the buyer with respect to any selling
order of the person; or
``(ii) the seller with respect to any
buying order of the person.''.
SEC. 9. FERC LIAISON.
Section 2(a)(9) of the Commodity Exchange Act (7 U.S.C. 2(a)(9)) is
amended by adding at the end the following:
``(C) Liaison with federal energy regulatory
commission.--The Commission shall, in cooperation with
the Federal Energy Regulatory Commission, maintain a
liaison between the Commission and the Federal Energy
Regulatory Commission.''.
SEC. 10. CRIMINAL AND CIVIL PENALTIES.
(a) Enforcement Powers of Commission.--Section 6(c) of the
Commodity Exchange Act (7 U.S.C. 9, 15) is amended in paragraph (3) of
the tenth sentence--
(1) by inserting ``(A)'' after ``assess such person''; and
(2) by inserting after ``each such violation'' the
following: ``, or (B) in any case of manipulation of, or
attempt to manipulate, the price of any commodity, a civil
penalty of not more than the greater of $1,000,000 or triple
the monetary gain to such person for each such violation,''.
(b) Manipulations and Other Violations.--Section 6(d) of the
Commodity Exchange Act (7 U.S.C. 13b) is amended in the first
sentence--
(1) by striking ``paragraph (a) or (b) of section 9 of this
Act'' and inserting ``subsection (a), (b), or (f) of section
9''; and
(2) by striking ``said paragraph 9(a) or 9(b)'' and
inserting ``subsection (a), (b), or (f) of section 9''.
(c) Nonenforcement of Rules of Government or Other Violations.--
Section 6b of the Commodity Exchange Act (7 U.S.C. 13a) is amended--
(1) in the first sentence--
(A) by inserting ``section 2(g)(9),'' after
``sections 5 through 5c,''; and
(B) by inserting before the period at the end the
following: ``, or, in any case of manipulation of, or
an attempt to manipulate, the price of any commodity, a
civil penalty of not more than $1,000,000 for each such
violation''; and
(2) in the second sentence, by inserting before the period
at the end the following: ``, except that if the failure or
refusal to obey or comply with the order involved any offense
under section 9(f), the registered entity, director, officer,
agent, or employee shall be guilty of a felony and, on
conviction, shall be subject to penalties under section 9(f)''.
(d) Action To Enjoin or Restrain Violations.--Section 6c(d) of the
Commodity Exchange Act (7 U.S.C. 13a-1(d)) is amended by striking
``(d)'' and all that follows through the end of paragraph (1) and
inserting the following:
``(d) Civil Penalties.--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--
``(1) a civil penalty in the amount of not more than the
greater of $100,000 or triple the monetary gain to the person
for each violation; or
``(2) in any case of manipulation of, or an attempt to
manipulate, the price of any commodity, a civil penalty in the
amount of not more than the greater of $1,000,000 or triple the
monetary gain to the person for each violation.''.
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