A bill to amend the Commodity Exchange Act to exempt certain charitable organizations from regulation as commodity pool operators, and for other purposes.

II 116TH CONGRESS 1ST SESSION S. 552 To amend the Commodity Exchange Act to exempt certain charitable organi- zations from regulation as commodity pool operators, and for other purposes. IN THE SENATE OF THE UNITED STATES FEBRUARY 26, 2019 Ms. KLOBUCHAR (for herself and Mr. PERDUE) introduced the following bill; which was read twice and referred to the Committee on Agriculture, Nu- trition, and Forestry A BILL To amend the Commodity Exchange Act to exempt certain charitable organizations from regulation as commodity pool operators, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. EXEMPTION OF QUALIFIED CHARITABLE ORGA- 3 NIZATIONS FROM REGULATION AS COM- 4 MODITY POOL OPERATORS. 5 Section 4m of the Commodity Exchange Act (7 6 U.S.C. 6m) is amended— 7 (1) by striking ‘‘SEC. 4M. (1) It’’ and inserting 8 the following: 9 VerDate Sep 11 2014 04:16 Mar 01, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S552.IS S552 kjohnson on DSK79L0C42 with BILLS 2 •S 552 IS ‘‘SEC. 4m. USE OF MAILS OR OTHER MEANS OR INSTRU- 1 MENTALITIES OF INTERSTATE COMMERCE 2 BY COMMODITY TRADING ADVISORS AND 3 COMMODITY POOL OPERATORS. 4 ‘‘(a) PROHIBITION.— 5 ‘‘(1) IN GENERAL.—It’’; 6 (2) in the second sentence— 7 (A) by striking ‘‘The provisions of this sec- 8 tion’’ and inserting the following: 9 ‘‘(2) EXCEPTIONS.— 10 ‘‘(A) COMMODITY TRADING ADVISORS.— 11 ‘‘(i) IN GENERAL.—Subject to clause 12 (ii) and except as provided in subpara- 13 graphs (B) and (C), this section’’; 14 (B) by striking ‘‘commodity trading advi- 15 sor who is a (1) dealer’’ and inserting the fol- 16 lowing: ‘‘commodity trading advisor who is a— 17 ‘‘(I) dealer’’; 18 (C) by striking ‘‘or (2) nonprofit’’ and in- 19 serting the following: ‘‘; or 20 ‘‘(II) nonprofit’’; 21 (D) by striking ‘‘Commodity Futures 22 Trading Commission Act of 1974; if the advice 23 by the person described in clause (1) or (2) of 24 this sentence’’ and inserting the following: 25 VerDate Sep 11 2014 04:16 Mar 01, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S552.IS S552 kjohnson on DSK79L0C42 with BILLS 3 •S 552 IS ‘‘Commodity Futures Trading Commission Act 1 of 1974. 2 ‘‘(ii) APPLICABILITY.—Clause (i) only 3 applies if the advice by the person de- 4 scribed in subclause (I) or (II) of clause 5 (i)’’; 6 (E) by striking ‘‘business:’’ and inserting 7 ‘‘business.’’; and 8 (F) by striking ‘‘Provided, That such per- 9 son shall be subject to proceedings under sec- 10 tion 14 of this Act.’’ and inserting the fol- 11 lowing: 12 ‘‘(B) COMPLAINTS AGAINST EXCEPTED 13 PERSONS.—A person described in subclause (I) 14 or (II) of clause (i) shall be subject to pro- 15 ceedings under section 14. 16 ‘‘(C) CHARITABLE ORGANIZATIONS.—This 17 section shall not apply to any commodity trad- 18 ing advisor or commodity pool operator that 19 is— 20 ‘‘(i) a charitable organization, as de- 21 fined in section 3(c)(10)(D)(iii) of the In- 22 vestment Company Act of 1940 (15 U.S.C. 23 80a–3(c)(10)(D)(iii)), or a trustee, direc- 24 tor, officer, employee, or volunteer of such 25 VerDate Sep 11 2014 04:16 Mar 01, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S552.IS S552 kjohnson on DSK79L0C42 with BILLS 4 •S 552 IS a charitable organization acting within the 1 scope of the employment or duties of the 2 person with the organization, whose trad- 3 ing advice is provided only to, or with re- 4 spect to, 1 or more of— 5 ‘‘(I) any such charitable organi- 6 zations; or 7 ‘‘(II) an investment trust, syn- 8 dicate, or similar form of enterprise 9 excluded from the definition of ‘invest- 10 ment company’ pursuant to section 11 3(c)(10) of the Investment Company 12 Act of 1940 (15 U.S.C. 80a– 13 3(c)(10)); or 14 ‘‘(ii) any plan, company, or account 15 described in section 3(c)(14) of the Invest- 16 ment Company Act of 1940 (15 U.S.C. 17 80a–3(c)(14)), any person or entity who 18 establishes or maintains such a plan, com- 19 pany, or account, or any trustee, director, 20 officer, employee, or volunteer for any of 21 the foregoing plans, persons, or entities 22 acting within the scope of the employment 23 or duties of the person with the organiza- 24 tion, whose trading advice is provided only 25 VerDate Sep 11 2014 04:16 Mar 01, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S552.IS S552 kjohnson on DSK79L0C42 with BILLS 5 •S 552 IS to, or with respect to, any investment 1 trust, syndicate, or similar form of enter- 2 prise excluded from the definition of ‘in- 3 vestment company’ pursuant to section 4 3(c)(14) of the Investment Company Act 5 of 1940 (15 U.S.C. 80a–3(c)(14)).’’; 6 (3) by striking ‘‘(2) Nothing in this Act’’ and 7 inserting the following: 8 ‘‘(b) RELATIONSHIP TO OTHER LAW.—Nothing in 9 this Act’’; 10 (4) by striking ‘‘(3) EXCEPTION.—’’ and all 11 that follows through ‘‘Paragraph (1) shall not 12 apply’’ and inserting the following: 13 ‘‘(c) EXCEPTION.— 14 ‘‘(1) IN GENERAL.—Subsection (a) shall not 15 apply’’; 16 (5) by striking ‘‘(B) ENGAGED PRIMARILY.— 17 For purposes of subparagraph (A)’’ and inserting 18 the following: 19 ‘‘(2) ENGAGED PRIMARILY.—For purposes of 20 paragraph (1)’’; 21 (6) by striking ‘‘(C) COMMODITY INTERESTS.— 22 For purposes of this paragraph’’ and inserting the 23 following: 24 VerDate Sep 11 2014 04:16 Mar 01, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S552.IS S552 kjohnson on DSK79L0C42 with BILLS 6 •S 552 IS ‘‘(3) COMMODITY INTERESTS.—For purposes of 1 this subsection’’; and 2 (7) by adding at the end the following: 3 ‘‘(d) DISCLOSURE CONCERNING EXEMPTED CHARI- 4 TABLE ORGANIZATIONS.—A commodity trading advisor or 5 commodity pool operator that is an organization or person 6 described in subsection (a)(2)(C)(i) to or of any invest- 7 ment trust, syndicate, or similar form of enterprise ex- 8 cluded from the definition of ‘investment company’ pursu- 9 ant to section 3(c)(10)(B) of the Investment Company Act 10 of 1940 (15 U.S.C. 80a–3(c)(10)(B)) shall provide disclo- 11 sure in accordance with section 7(e) of that Act (15 U.S.C. 12 80a–7(e)).’’. 13 Æ VerDate Sep 11 2014 04:16 Mar 01, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\S552.IS S552 kjohnson on DSK79L0C42 with BILLS