201. Short title
This title may be cited as the “Commodity Futures Trading Commission Reform Act”.
Title II — Commodity Futures Trading Commission reforms
II Commodity Futures Trading Commission reforms
202. Extension of operations
Section 12(d) of the Commodity Exchange Act (7 U.S.C. 16(d)) is amended by striking “2013” and inserting “2018”.
203. Consideration by the Commodity Futures Trading Commission of the costs and benefits of its regulations and orders
Section 15(a) of the Commodity Exchange Act (7 U.S.C. 19(a)) is amended—
by striking paragraphs (1) and (2) and inserting the following:
“(1) In general—Before promulgating a regulation under this Act or issuing an order (except as provided in paragraph (3)), the Commission, through the Office of the Chief Economist, shall assess and publish in the regulation or order the costs and benefits, both qualitative and quantitative, of the proposed regulation or order, and the proposed regulation or order shall state its statutory justification.
“(2) Considerations—In making a reasoned determination of the costs and the benefits, the Commission shall evaluate—
“(A) considerations of protection of market participants and the public;
“(B) considerations of the efficiency, competitiveness, and financial integrity of futures and swaps markets;
“(C) considerations of the impact on market liquidity in the futures and swaps markets;
“(D) considerations of price discovery;
“(E) considerations of sound risk management practices;
“(F) available alternatives to direct regulation;
“(G) the degree and nature of the risks posed by various activities within the scope of its jurisdiction;
“(H) the costs of complying with the proposed regulation or order by all regulated entities, including a methodology for quantifying the costs (recognizing that some costs are difficult to quantify);
“(I) whether the proposed regulation or order is inconsistent, incompatible, or duplicative of other Federal regulations or orders;
“(J) whether, in choosing among alternative regulatory approaches, those approaches maximize net benefits (including potential economic and other benefits, distributive impacts, and equity); and
“(K) other public interest considerations.”
by adding at the end the following:
“(4) Judicial review—Notwithstanding section 24(d), a court shall affirm a Commission assessment of costs and benefits under this subsection, unless the court finds the assessment to be an abuse of discretion.”
204. Division directors
Section 2(a)(6)(C) of the Commodity Exchange Act (7 U.S.C. 2(a)(6)(C)) is amended by inserting “, and the heads of the units shall serve at the pleasure of the Commission, report directly to the Commission, and perform such functions and duties as the Commission may prescribe” before the period.
205. Office of the Chief Economist
In general— Section 2(a) of the Commodity Exchange Act (7 U.S.C. 2(a)) is amended by adding at the end the following:
“(17) Office of the chief economist
“(A) Establishment—There is established in the Commission the Office of the Chief Economist.
“(B) Head—The Office of the Chief Economist shall be headed by the Chief Economist, who shall be appointed by the Commission and serve at the pleasure of the Commission.
“(C) Functions—The Chief Economist shall report directly to the Commission and perform such functions and duties as the Commission may prescribe.
“(D) Professional staff—The Commission shall appoint such other economists as may be necessary to assist the Chief Economist in performing such economic analysis, regulatory cost-benefit analysis, or research as the Commission may direct.”
Conforming amendment— Section 2(a)(6)(A) of such Act (7 U.S.C. 2(a)(6)(A)) is amended by striking “(4) and (5)” and inserting “(4), (5), and (17)”.
206. Procedures governing actions taken without a commission vote
Section 2(a)(12) of the Commodity Exchange Act (7 U.S.C. 2(a)(12)) is amended—
by striking “(12) The” and inserting the following:
“(12) Rules and regulations
“(A) In general—Subject to the other provisions of this paragraph, the”
by adding after and below the end the following new subparagraph:
“(B) Notice to commission—The Commission shall develop and publish internal procedures governing the issuance by any division or office of the Commission of any response to a formal, written request or petition from any member of the public for an exemptive, a no-action, or an interpretive letter and such procedures shall provide that the Commission be provided with the final version of the matter to be issued with sufficient notice to thoroughly review the matter prior to its issuance.”
207. Strategic technology plan
Section 2(a) of the Commodity Exchange Act (7 U.S.C. 2(a)), as amended by section 204(a) of this Act, is amended by adding at the end the following:
“(18) Strategic technology plan
“(A) In general—Every 5 years, the Commission shall develop and submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a detailed plan focused on the acquisition and use of technology by the Commission.
“(B) Contents—The plan shall—
“(i) include for each related division or office a detailed technology strategy focused on market surveillance and risk detection, market data collection, aggregation, interpretation, standardization, harmonization, normalization, validation, streamlining or other data analytic processes, and internal management and protection of data collected by the Commission, including a detailed accounting of how the funds provided for technology will be used and the priorities that will apply in the use of the funds; and
“(ii) set forth annual goals to be accomplished and annual budgets needed to accomplish the goals.”
208. Internal risk controls
In general— Section 2(a)(12) of the Commodity Exchange Act (7 U.S.C. 2(a)(12)), as amended by section 206 of this Act, is amended by adding at the end the following:
“(C) Internal risk controls—The Commission, in consultation with the Chief Economist, shall develop comprehensive internal risk control mechanisms to safeguard and govern the storage of all market data by the Commission, all market data sharing agreements of the Commission, and all academic research performed at the Commission using market data.”
Reports to the Congress—
Content— The Commission shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate 2 reports on the progress made in implementing the internal risk controls provided for in section 2(a)(12)(C) of the Commodity Exchange Act.
Timing— The Commission shall submit the 1st report required by paragraph (1) within 60 days after the date of the enactment of this Act, and the 2nd such report within 120 days after such date of enactment.
209. Subpoena duration and renewal
Section 6(c)(5) of the Commodity Exchange Act (7 U.S.C. 9(5)) is amended—
by striking “(5) Subpoena.—For” and inserting the following:
“(5) Subpoena
“(A) In general—For”
by adding after and below the end the following:
“(B) Content of order—An order of the Commission authorizing the issuance of a subpoena in an investigation shall state in good faith—
“(i) the legitimate purpose of the investigation; and
“(ii) the information sought by any subpoena order that will be reasonably relevant to that purpose.
“(C) Duration and renewal—An order issued under this paragraph shall not be for an indefinite duration and may be renewed only by Commission action.”
210. Implementation plan for Commission rulemakings
Section 2(a)(12) of the Commodity Exchange Act (7 U.S.C. 2(a)(12)), as amended by sections 206 and 208(a) of this Act, is amended by adding at the end the following:
“(D) Requirement to publish implementation plan for Commission rules—The Commission shall direct its staff to develop and publish in any proposed rule a plan for—
“(i) when and for how long the proposed rule will be subject to public comment; and
“(ii) by when compliance with the final rule will be required.”
211. Applicability of notice and comment requirements of the Administrative Procedure Act to guidance voted on by the Commission
Section 2(a)(12) of the Commodity Exchange Act (7 U.S.C. 2(a)(12)), as amended by sections 206, 208(a), and 210 of this Act, is amended by adding at the end the following:
“(E) Applicability of notice and comment rules to guidance voted on by the Commission—The notice and comment requirements of chapter 5 of title 5, United States Code, shall also apply with respect to any guidance issued by the Commission.”
212. Judicial review of Commission rules
The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by adding at the end the following:
“24. Judicial review of commission rules
“(a) A person adversely affected by a rule of the Commission promulgated under this Act may obtain review of the rule in the United States Court of Appeals for the District of Columbia Circuit or the United States Court of Appeals for the circuit where the party resides or has the principal place of business, by filing in the court, within 60 days after publication in the Federal Register of the entry of the rule, a written petition requesting that the rule be set aside.
“(b) A copy of the petition shall be transmitted forthwith by the clerk of the court to an officer designated by the Commission for that purpose. Thereupon the Commission shall file in the court the record on which the rule complained of is entered, as provided in section 2112 of title 28, United States Code, and the Federal Rules of Appellate Procedure.
“(c) On the filing of the petition, the court has jurisdiction, which becomes exclusive on the filing of the record, to affirm and enforce or to set aside the rule.
“(d) The court shall affirm and enforce the rule unless the Commission's action in promulgating the rule is found to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; contrary to constitutional right, power, privilege, or immunity; in excess of statutory jurisdiction, authority, or limitations, or short of statutory right; or without observance of procedure required by law.”
213. GAO study on adequacy of CFTC resources
Study— The Comptroller General of the United States shall conduct a study of the resources of the Commodity Futures Trading Commission that—
assesses whether the resources of the Commission are sufficient to enable the Commission to effectively carry out the duties of the Commission; and
examines the prior expenditures of the Commission on hardware, software, and analytical processes designed to protect customers in the areas of—
market surveillance and risk detection; and
market data collection, aggregation, interpretation, standardization, harmonization, normalization, validation, and streamlining or other data analytic processes.
Report— Not later than 180 days after the date of the enactment of this Act, the Comptroller General of the United States shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that contains the results of the study.
214. Disclosure of required data of other registered entities
Section 8 of the Commodity Exchange Act (7 U.S.C. 12) is amended by adding at the end the following:
“(j) Disclosure of required data of other registered entities
“(1) Except as provided in this subsection, the Commission may not be compelled to disclose any proprietary information provided to the Commission, except that nothing in this subsection—
“(A) authorizes the Commission to withhold information from Congress, upon an agreement of confidentiality; or
“(B) prevents the Commission from—
“(i) complying with a request for information from any other Federal department or agency, any State or political subdivision thereof, or any foreign government or any department, agency, or political subdivision thereof requesting the report or information for purposes within the scope of its jurisdiction, upon an agreement of confidentiality to protect the information in a manner consistent with this paragraph and subsection (e); or
“(ii) a disclosure made pursuant to a court order in connection with an administrative or judicial proceeding brought under this Act, in any receivership proceeding involving a receiver appointed in a judicial proceeding brought under this Act, or in any bankruptcy proceeding in which the Commission has intervened or in which the Commission has the right to appear and be heard under title 11 of the United States Code.
“(2) Any proprietary information of a commodity trading advisor or commodity pool operator ascertained by the Commission in connection with Form CPO–PQR, Form CTA–PR, and any successor forms thereto, shall be subject to the same limitations on public disclosure, as any facts ascertained during an investigation, as provided by subsection (a); provided, however, that the Commission shall not be precluded from publishing aggregate information compiled from such forms, to the extent such aggregate information does not identify any individual person or firm, or such person’s proprietary information.
“(3) For purposes of section 552 of title 5, United States Code, this subsection, and the information contemplated herein, shall be considered a statute described in subsection (b)(3)(B) of such section 552.
“(4) For purposes of the definition of proprietary information in paragraph (5), the records and reports of any client account or commodity pool to which a commodity trading advisor or commodity pool operator registered under this title provides services that are filed with the Commission on Form CPO–PQR, CTA–PR, and any successor forms thereto, shall be deemed to be the records and reports of the commodity trading advisor or commodity pool operator, respectively.
“(5) For purposes of this section, proprietary information of a commodity trading advisor or commodity pool operator includes sensitive, non-public information regarding—
“(A) the commodity trading advisor, commodity pool operator or the trading strategies of the commodity trading advisor or commodity pool operator;
“(B) analytical or research methodologies of a commodity trading advisor or commodity pool operator;
“(C) trading data of a commodity trading advisor or commodity pool operator; and
“(D) computer hardware or software containing intellectual property of a commodity trading advisor or commodity pool operator;”
215. GAO study on Commission leases
The Comptroller General of the United States shall, in consultation with the Commodity Futures Trading Commission Inspector General, conduct a study and publish a report regarding achieving efficiencies in leasing and rental costs at the Commodity Futures Trading Commission.
The report shall be published within 90 days after the date of the enactment of this Act regarding achieving efficiencies in leasing and rental costs of buildings occupied by the Commodity Futures Trading Commission, and shall include recommendations to the Chairman of the Commodity Futures Trading Commission and the congressional committees of jurisdiction regarding the following:
Average occupancy rates and leasing costs of buildings across the Federal Government compared to those currently in effect with respect to buildings and locations occupied by the Commodity Futures Trading Commission.
Changes to leasing authority that could achieve efficiencies, including the revocation of independent leasing authority and transfer of authority to the Administrator of General Services.
The recommendations and responses contained in the report by the Commodity Futures Trading Commission Inspector General, dated June 4, 2014.
Other related recommendations that would achieve efficiencies in leasing and rental costs of buildings currently occupied by the Commodity Futures Trading Commission.
Is the Commodity Futures Trading Commission violating any laws, including the Anti-Deficiency Act, by entering into these leases, particularly those with more than 5-year terms, and if so, how they can avoid violating Federal law in the future.
The Chairman of the Commodity Futures Trading Commission shall report to the congressional committees of jurisdiction within 60 days after receipt of the report as to whether the Chairman accepts or rejects each of the recommendations of the Comptroller General, and an explanation for each decision.