1 RECOMMENDATION N: EXPAND THE SCOPE OF INSIDER TRADING

2 PROHIBITIONS UNDER THE COMMODITY EXCHANGE ACT

4 [Recommendation: The Report recommends legislation to expand the scope ofinsider trading

5 prohibitions under the Commodity Exchange Act. The Commodity Exchange Act should be

6 amended to make unlawful the misappropriation and trading on the basis ofmaterial non-public

7 information from any governmental authority.]

9 Section 4c(a) of the Commodity Exchange Act (7 U.S.C. 6c(a)), is amended by adding at the end

10 the following:

11

12 "CJ 1 It shall be unlawful for any employee or agent of any department or

13 agency of the Government of the United States who, by virtue of his employment or

14 position, acquires information which may affect or tend to affect the price of any

15 commodity in interstate commerce, or for future delivery, and which information has not

16 been made public, to use such information to enter into, or offer to enter into, a contract

17 of sale of a commodity for future delivery (or option on such a contract), or an option

18 (other than an option executed or traded on a national securities exchange registered

19 pursuant to section 6(a) of the Securities Exchange Act of 1934).

20 "CJ It shall be unlawful-

21 "(A) for any employee or agent of any department or agency of the

22 Government of the United States who, by virtue of his employment or

1 The paragraph numbers for these provisions in CEA Section 4c(a) will depend on whether Recommendation M to
enhance the CFTC' s disruptive trading practices authority also is incorporated, since the proposed statutory text for
that recommendation also would be placed in Section 4c(a).

CFTC-CREW-0430
 1 position, acquires information which may affect or tend to affect the price of

2 any commodity in interstate commerce, or for future delivery, and which

3 information has not been made public, to impart such information with intent

4 to assist another person, directly or indirectly, to use such information to enter

5 into, or offer to enter into, a contract of sale of a commodity for future

6 delivery (or option on such a contract), or an option (other than an option

7 executed or traded on a national securities exchange registered pursuant to

8 section 6(a) of the Securities Exchange Act of 1934); and

9 "(B) for any person knowingly to acquire, by any means

10 whatsoever, governmental information which may affect or tend to affect the

11 price of any commodity in interstate commerce, or for future delivery, and

12 which information has not been made public, and to use such information, or

13 to impart such information with intent to assist another person, directly or

14 indirectly, to use such information to enter into, or offer to enter into, a

15 contract of sale of a commodity for future delivery (or option on such a

16 contract), or an option (other than an option executed or traded on a national

17 securities exchange registered pursuant to section 6(a) of the Securities

18 Exchange Act of 1934).".

19

20

CFTC-CREW-0431