12 2 STA T . 21 98PUBLIC LA W 11 0– 2 46—J U NE 18 , 2008 (b)STAND A R D SAP P LIC A B L E T O SI G NI F ICANT P RICE D ISCO V ER YC ONTRACTS .— S ection2 ( h )o fsu chAct( 7U .S.C. 2(h)) is am en d ed b y addin g at the end the fo l lo w ing
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‘(7) SIGNIFICANT PRICE DISCOVERY CONTRACTS.— ‘‘(A) I N GENERAL.—An ag r eement , contract, or trans - action conducted in reliance on the e x em p tion in paragraph ( 3 ) shall be sub j ect to the pro v isions of subparagraphs ( B ) through (D), under such rules and regulations as the Commission shall promulgate, provided that the Commis- sion determines, in its discretion, that the agreement, con- tract, or transaction performs a significant price discovery function as described in subparagraph (B). ‘‘(B) SIGNIFICANT PRICE DISCOVERY DETER M INATION.— In ma k ing a determination whether an agreement, con- tract, or transaction performs a significant price discovery function, the Commission shall consider, as appropriate: ‘‘(i) PRICE LIN K AGE.— T he extent to which the agreement, contract, or transaction uses or otherwise relies on a daily or final settlement price, or other major price parameter, of a contract or contracts listed for trading on or subject to the rules of a designated contract market or a derivatives transaction execution facility, or a significant price discovery contract traded on an electronic trading facility, to value a position, transfer or convert a position, cash or financially settle a position, or close out a position. ‘‘(ii) ARBITRAGE.—The extent to which the price for the agreement, contract, or transaction is suffi- ciently related to the price of a contract or contracts listed for trading on or subject to the rules of a des- ignated contract market or derivatives transaction execution facility, or a significant price discovery con- tract or contracts trading on or subject to the rules of an electronic trading facility, so as to permit market participants to effectively arbitrage between the mar- kets by simultaneously maintaining positions or exe- cuting trades in the contracts on a fre q uent and recur- ring basis. ‘‘(iii) M ATERIAL PRICE REFERENCE.—The extent to which, on a frequent and recurring basis, bids, offers, or transactions in a commodity are directly based on, or are determined by referencing, the prices generated by agreements, contracts, or transactions being traded or executed on the electronic trading facility. ‘‘(iv) MATERIAL LI QU IDITY.—The extent to which the volume of agreements, contracts, or transactions in the commodity being traded on the electronic trading facility is sufficient to have a material effect on other agreements, contracts, or transactions listed for trading on or subject to the rules of a designated contract market, a derivatives transaction execution facility, or an electronic trading facility operating in reliance on the exemption in paragraph (3). ‘‘(v) O T H ER MATERIAL FACTORS.—Such other mate- rial factors as the Commission specifies by rule as relevant to determine whether an agreement, contract,
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