S.Amdt. 4950

1. Rewrites section 412

   Replaces

   Removes section 412.

   Inserted: SEC. 412. CARBON MARKET OVERSIGHT AND REGULATION.

   Inserted: (a) Delegation of Authority by President.--The President, taking into consideration the recommendations of the Working Group established by subsection (b), shall delegate to members of the Working Group and the heads of other appropriate Federal entities the authority to promulgate regulations to enhance the integrity, efficiency, orderliness, fairness, and competitiveness of the development and operation by the United States of any financial market for emission allowances, based on the following core principles:

   Inserted: (1) The market shall--

   Inserted: (A) be designed to prevent, detect, and remedy fraud and manipulation relating to the trading of emission allowances and related markets, which could potentially arise from many sources, including--

   Inserted: (i) the concentration of market power within the control of a limited number of individuals or entities; and

   Inserted: (ii) the abuse of material, nonpublic information;

   Inserted: (B)(i) be appropriately transparent, with real-time reporting of quotes and trades; and

   Inserted: (ii) make information on price, volume, and supply, and other important statistical information available to the public on fair, reasonable, and nondiscriminatory terms;

   Inserted: (C) be subject to appropriate recordkeeping and reporting requirements regarding transactions; and

   Inserted: (D) have the confidence of Federal and State regulators, investors, and covered entities subject to compliance obligations under this Act.

   Inserted: (2) The market shall--

   Inserted: (A) function smoothly and efficiently, generating prices that accurately reflect supply and demand for emission allowances;

   Show 63 more inserted paragraphsShow less

   Inserted: (B) be designed to prevent excessive speculation that could cause sudden or unreasonable fluctuations or unwarranted changes in--

   Inserted: (i) the price of emission allowances; or

   Inserted: (ii) prices in related markets; and

   Inserted: (C) promote just and equitable principles of trade.

   Inserted: (3) Market transparency measures shall be designed to prevent the disclosure of information the disclosure of which would be detrimental to the operation of an effective emission allowance market.

   Inserted: (4) The market shall be subject to effective and comprehensive oversight, which integrates strong enforcement mechanisms, including mechanisms for cooperation with other national and comparable international oversight regimes.

   Inserted: (5) There shall be an appropriate interagency forum--

   Inserted: (A) for ongoing assessment of emerging regulatory matters and information sharing; and

   Inserted: (B) to ensure regulatory coordination of the market.

   Inserted: (6) The market shall establish an equitable system for best execution of customer orders.

   Inserted: (7) The market shall protect investors and the public interest.

   Inserted: (8) To reduce the potential threats of market manipulation and the concentration of market power, the market shall be subject to position limitations or position accountability measures, as necessary and appropriate.

   Inserted: (b) Establishment.--There is established an interagency working group, to be known as the "Carbon Markets Working Group" (referred to in this section as the "Working Group").

   Inserted: (c) Membership.--The Working Group shall be composed of the following members (or their designees):

   Inserted: (1) The Administrator, who shall serve as Chairperson of the Working Group.

   Inserted: (2) The Secretary of the Treasury.

   Inserted: (3) The Chairman of the Securities and Exchange Commission.

   Inserted: (4) The Chairman of the Commodity Futures Trading Commission.

   Inserted: (5) The Chairman of the Federal Energy Regulatory Commission.

   Inserted: (6) The Chairperson of the Board.

   Inserted: (7) Such other Executive branch officials as may be appointed by the President.

   Inserted: (d) Duties.--

   Inserted: (1) Identification of issues and appropriate activities.--

   Inserted: (A) In general.--The Working Group shall identify--

   Inserted: (i) the major issues relating to the integrity, efficiency, orderliness, fairness, and competitiveness of the development by the United States of any financial market for emission allowances under the cap-and-trade system for emission allowances established under this Act;

   Inserted: (ii) any relevant recommendations provided to the Working Group by Federal, State, or local governments, organizations, individuals, and entities; and

   Inserted: (iii) the activities, such as market regulation, policy coordination, and contingency planning, that are appropriate to carry out those recommendations.

   Inserted: (B) Consultation.--In identifying appropriate activities under subparagraph (A)(iii), the Working Group shall consult with representatives of, as appropriate--

   Inserted: (i) various information exchanges and clearinghouses;

   Inserted: (ii) self-regulatory entities, securities exchanges, transfer agents, and clearing entities;

   Inserted: (iii) participants in the emission allowance trading market, including covered entities;

   Inserted: (iv) State regulatory authorities; and

   Inserted: (v) other Federal entities, including--

   Inserted: (I) the Federal Reserve; and

   Inserted: (II) the Federal Trade Commission.

   Inserted: (2) Study.--The Working Group shall conduct a study of the major issues relating to the regulation of the emission allowance trading market and other carbon markets.

   Inserted: (3) Report.--Not later than 270 days after the date of enactment of this Act, and annually thereafter, the Working Group shall submit to the President and Congress a report describing--

   Inserted: (A) the progress made by the Working Group;

   Inserted: (B) recommendations of the Working Group regarding any regulations proposed pursuant to subsection (a);

   Inserted: (C) recommendations for additional legislative action, if necessary; and

   Inserted: (D) a timetable for the implementation of the new regulations to ensure that the regulations take effect before the effective date of regulations governing the emission allowance trading system.

   Inserted: (4) Memoranda of understanding.--Not later than 270 days after the date of enactment of this Act, the Administrator shall enter into a memorandum of understanding with the head of each appropriate Federal entity (including each appropriate Federal entity represented by a member of the Working Group, as applicable) relating to regulatory and enforcement coordination, information sharing, and other related matters to minimize duplicative or conflicting regulatory efforts.

   Inserted: (5) Regulations.--Not later than 270 days after the date of enactment of this Act, the heads of other appropriate Federal entities to which the President has delegated regulatory authority under subsection (a) shall promulgate regulations in accordance with subsection (a).

   Inserted: (e) Authorities.--In promulgating and implementing regulations pursuant to this section, the promulgating Federal agencies shall have authorities equivalent to the authorities of those agencies under existing law.

   Inserted: (f) Enforcement.--Regulations promulgated under this section shall--

   Inserted: (1) be fully enforceable and subject to such fines and penalties as are provided under the laws (including regulations) administered by the Federal agency that promulgated the regulations under this section; and

   Inserted: (2) for the purpose of enforcement, in accordance with section 1722, be considered to have been promulgated pursuant to this Act.

   Inserted: (g) Administration.--

   Inserted: (1) Information from federal agencies.--

   Inserted: (A) In general.--The Working Group may secure directly from any Federal agency such information as the Working Group considers necessary to carry out this section.

   Inserted: (B) Provision of information.--On request of the Chairperson of the Working Group, the head of the agency shall provide the information to the Working Group.

   Inserted: (2) Compensation of members.--A member of the Working Group who is an officer or employee of the Federal Government shall serve without compensation in addition to the compensation received for the services of the member as an officer or employee of the Federal Government.

   Inserted: (3) Administrator support.--To the extent permitted by law and subject to the availability of appropriations, the Administrator shall provide to the Working Group such administrative and support services as are necessary to assist the Working Group in carrying out the duties described in subsection (d).

   Inserted: (h) Effect of Section.--Nothing in this section limits or restricts any regulatory or enforcement authority of a Federal entity as in effect on the date of enactment of this Act.

   Inserted: (i) Prohibitions.--

   Inserted: (1) In general.--It shall be unlawful for any individual or entity--

   Inserted: (A) to knowingly provide to the President (or a designee) any false information relating to the price or quantity of emission allowances sold, purchased, transferred, banked, or borrowed by the individual or entity, with the intent to fraudulently affect data complied by the Administrator or any other entity;

   Inserted: (B) directly or indirectly, to use in connection with the purchase or sale of an emission allowance any manipulative or deceptive device or contrivance (within the meaning of section 10(b) of the Securities and Exchange Act of 1934 (15 U.S.C. 78j(b)), in contravention of such regulations as are promulgated to protect public interest or consumers; or

   Inserted: (C) to cheat or defraud, or to attempt to cheat or defraud, another market participant, client, or customer.

   Inserted: (2) Regulations.--Not later than 270 days after the date of enactment of this Act, the President shall delegate the authority to promulgate regulations in accordance with paragraph (1) to 1 or more entities represented in the Working Group.

   Inserted: (3) Penalties.--An individual or entity that violates an applicable provision of paragraph (1) or a regulation promulgated pursuant to paragraph (2) shall be subject to a fine of not more than $1,000,000 or imprisonment for not more than 10 years, or both, for each such violation.

   Inserted: (4) Effect of subsection.--Nothing in this subsection establishes any private right of action.

   Inserted: (j) Authorization of Appropriations.--There are authorized to be appropriated such sums as are necessary to carry out this section.

   Original wording

   Strike section 412 and insert the following:

Read automatically from the Congressional Record. Check the original before relying on it.

As printed