H.R. 4066 would amend the Commodity Exchange Act to close the Enron loophole, prevent price manipulation and excessive speculation in the trading of energy commodities.
Detailed Summary
Close the Enron Loophole Act - Amends the Commodity Exchange Act to provide that it applies to an agreement, contract, or transaction in an exempt commodity that is executed or traded on an electronic trading facility that is an energy trading center.
Prohibits any person from entering into an agreement, contract, or transaction for future delivery of an energy commodity that is not a spot sale of cash commodity or a sale of a cash commodity for deferred shipment or delivery on or through an energy trading facility that is not registered as such with the U.S. Commodity Futures Trading Commission (CFTC). Sets forth registration criteria.
Requires CFTC to ensure that the position limits and accountability levels applicable to contracts in an energy commodity listed for trading on a designated contract market and similar contracts in the same energy commodity listed for trading on an energy trading facility: (1) prevent price manipulation, excessive speculation, price distortion, and disruption of the delivery or cash-settlement process; and (2) are on a parity with each other and are applied in a functionally equivalent manner.
Requires CFTC to take necessary action to direct an energy trading facility or a designated contract market to require a person who has exceeded an applicable position limit or accountability level in an energy commodity to limit, reduce, or liquidate any position to prevent or reduce the threat of price manipulation, excessive speculation, price distortion, or disruption of the delivery or cash-settlement process.
Sets forth provisions concerning the provision of information and records about energy trading contracts to CFTC.
Revises provisions concerning the prohibition on energy contracts designed to defraud or mislead, including by prohibiting any person from cheating or defrauding another person in connection with any contract of sale of any commodity in interstate commerce or for future delivery that is made subject to the rules of a designated contract market for or on behalf of any such person (currently the provisions prohibit members of registered entities, correspondent agents, or employees of members from such actions.)
Requires CFTC to issue a rule regarding the requirements for an application for registration for an energy trading facility.
Status of the Legislation
Latest Major Action: 11/1/2007: Referred to House committee. Status: Referred to the House Committee on Agriculture.
Points in Favor
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Points Against
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Visitor Comments
Karen Kearns
January 22, 2008, 2:00pm (report abuse)Requiring disclosure and oversight will do no harm, it will only strenghten everyone's belief that trading was done honestly. It will also serve to prevent and detect the manipulation of trading. With trading manipulation as a possible cause for rising commodity prices eliminated, economists can establish with greater certainty the true cause and better solutions to address the cause can be developed.
BRIAN PINELLI
January 22, 2008, 7:32pm (report abuse)VOTE TO CLOSE THIS BILL
Jeff Knight
March 30, 2008, 6:27pm (report abuse)I just read about Enron and the blackouts in California!!! Apparantly I simply did not learn everything I could in High School. Strong regulation to prevent this from happening should definitely not be ignored.
Jane Steinhauer
July 22, 2008, 1:46pm (report abuse)What kind of politician would change a regulation that would put the American people in harms way, the U.S. economy to be effected, and create a regulation that includes the CFTC not having any oversight in the matter - that is Phil Gramm (R), Texas. Mr. Gramm now works for UBS and as a Senator, also lobbied Congress to relax regulations put in place in 1933 that regulated banks so we wouldn't have another Depression, so goes the mortgage crisis. I now realize the Republicans are only concerned about corporate profits-to think otherwise one must be naive.