SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Oil Speculation Control Act of 
2008''.

SEC. 2. DEFINITION OF INSTITUTIONAL INVESTOR.

    (a) Definition.--Section 1a of the Commodity Exchange Act (7 U.S.C. 
1a) is amended--
            (1) by redesignating paragraphs (22) through (34) as 
        paragraphs (23) through (35), respectively; and
            (2) by inserting after paragraph (21) the following:
            ``(22) Institutional investor.--The term `institutional 
        investor' means a long-term investor in financial markets 
        (including pension funds, endowments, and foundations) that--
                    ``(A) invests in energy commodities as an asset 
                class in a portfolio of financial investments; and
                    ``(B) does not take or make physical delivery of 
                energy commodities on a frequent basis, as determined 
                by the Commission.''.
    (b) Conforming Amendments.--
            (1) Section 13106(b)(1) of the Food, Conservation, and 
        Energy Act of 2008 is amended by striking ``section 1a(32)'' 
        and inserting ``section 1a''.
            (2) Section 402(d)(1)(B) of the Legal Certainty for Bank 
        Products Act of 2000 (7 U.S.C. 27(d)(1)(B)) is amended by 
        striking ``section 1a(33)'' and inserting ``section 1a''.

SEC. 3. INSPECTOR GENERAL.

    Section 2(a) of the Commodity Exchange Act (7 U.S.C. 2(a)) is 
amended by adding at the end the following:
            ``(13) Inspector general.--
                    ``(A) Office.--There shall be in the Commission, as 
                an independent office, an Office of the Inspector 
                General.
                    ``(B) Appointment.--The Office shall be headed by 
                an Inspector General, appointed in accordance with the 
                Inspector General Act of 1978 (5 U.S.C. App.).
                    ``(C) Compensation.--The Inspector General shall be 
                compensated at the rate provided for level IV of the 
                Executive Schedule under section 5315 of title 5, 
                United States Code.
                    ``(D) Administration.--The Inspector General shall 
                exert independent control of the budget allocations, 
                expenditures, and staffing levels, personnel decisions 
                and processes, procurement, and other administrative 
                and management functions of the Office.''.

SEC. 4. TRADING PRACTICES REVIEW WITH RESPECT TO INDEX TRADERS, SWAP 
              DEALERS, AND INSTITUTIONAL INVESTORS.

    Section 4 of the Commodity Exchange Act (7 U.S.C. 6) is amended by 
adding at the end the following:
    ``(e) Trading Practices Review With Respect to Index Traders, Swap 
Dealers, and Institutional Investors.--
            ``(1) Review.--
                    ``(A) In general.--Not later than 30 days after the 
                date of enactment of this subsection, the Commission 
                shall carry out a review of the trading practices of 
                index traders, swap dealers, and institutional 
                investors in markets under the jurisdiction of the 
                Commission--
                            ``(i) to ensure that index trading is not 
                        adversely impacting the price discovery 
                        process;
                            ``(ii) to determine whether different 
                        practices or regulations should be implemented; 
                        and
                            ``(iii) to gather data for use in proposing 
                        regulations to limit the size and influence of 
                        institutional investor positions in commodity 
                        markets.
                    ``(B) Emergency authority.--For the 60-day period 
                described in subparagraph (A), in accordance with each 
                applicable rule adopted under section 5(d)(6), the 
                Commission shall exercise the emergency authority of 
                the Commission to prevent institutional investors from 
                increasing the positions of the institutional investors 
                in--
                            ``(i) energy commodity futures; and
                            ``(ii) commodity future index funds.
            ``(2) Report.--Not later than 30 days after the date 
        described in paragraph (1)(A), the Commission shall submit to 
        the appropriate committees of Congress a report that contains 
        recommendations for such legislation as the Commission 
        determines to be necessary to limit the size and influence of 
        institutional investor positions in commodity markets.''.

SEC. 5. BONA FIDE HEDGING TRANSACTIONS OR POSITIONS.

    Section 4a(c) of the Commodity Exchange Act (7 U.S.C. 6a(c)) is 
amended by striking ``(c) No rule'' and inserting the following:
    ``(c) Bona Fide Hedging Transactions or Positions.--
            ``(1) Definition of bona fide hedging transaction or 
        position.--The term `bona fide hedging transaction or position' 
        means a transaction or position that represents a hedge against 
        price risk exposure relating to physical transactions involving 
        an energy commodity.
            ``(2) Application with respect to bona fide hedging 
        transactions or positions.--No rule''.

SEC. 6. SPECULATION LIMITS RELATING TO SPECULATORS IN ENERGY MARKETS.

    Section 4a of the Commodity Exchange Act (7 U.S.C. 6a) is amended 
by adding at the end the following:
    ``(f) Speculation Limits Relating to Speculators in Energy 
Markets.--
            ``(1) Definition of speculator.--In this subsection, the 
        term `speculator' includes any institutional investor or 
        investor of an investment fund that holds a position through an 
        intermediary broker or dealer.
            ``(2) Enforcement of speculation limits.--The Commission 
        shall enforce speculation limits with respect to speculators in 
        energy markets.''.

SEC. 7. LARGE TRADER REPORTING WITH RESPECT TO INDEX TRADERS, SWAP 
              DEALERS, AND INSTITUTIONAL INVESTORS.

    Section 4g of the Commodity Exchange Act (7 U.S.C. 6g) is amended 
by adding at the end the following:
    ``(g) Large Trader Reporting With Respect to Index Traders, Swap 
Dealers, and Institutional Investors.--
            ``(1) In general.--Each recordkeeping and reporting 
        requirement under this section relating to large trader 
        transactions and positions shall apply to index traders, swaps 
        dealers, and institutional investors in markets under the 
        jurisdiction of the Commission.
            ``(2) Promulgation of regulations.--As soon as practicable 
        after the date of enactment of this subsection, the Commission 
        shall promulgate regulations to establish separate 
        classifications for index traders, swaps dealers, and 
        institutional investors--
                    ``(A) to enforce the recordkeeping and reporting 
                requirements described in paragraph (1); and
                    ``(B) to enforce position limits and position 
                accountability levels with respect to energy 
                commodities under section 4a(f).''.

SEC. 8. INSTITUTIONAL INVESTOR SPECULATION LIMITS.

    (a) Core Principles Applicable to Significant Price Discovery 
Contracts.--Section 2(h)(7)(C)(ii)(IV) of the Commodity Exchange Act (7 
U.S.C. 2(h)(7)(C)(ii)(IV)) is amended by inserting after 
``speculators'' the following: ``(including institutional investors 
that do not take delivery of energy commodities and that hold positions 
in energy commodities through swaps dealers or other third parties)''.
    (b) Core Principles for Contract Markets.--Section 5(d)(5) of the 
Commodity Exchange Act (7 U.S.C. 7(d)(5)) is amended by inserting after 
``speculators'' the following: ``(including institutional investors 
that do not take delivery of energy commodities and that hold positions 
in energy commodities through swaps dealers or other third parties)''.
Oil Speculation Control Act of 2008 - Amends the Commodity Exchange Act to define "institutional investor" as a long-term investor in financial markets (including pension funds, endowments, and foundations) that invests in energy commodities as an asset class in a portfolio of financial investments and does not take or make physical delivery of energy commodities on a frequent basis.

Establishes in the Commodity Futures Trading Commission (CFTC) an Office of the Inspector General.

Directs the CFTC to carry out a review of the trading practices of index traders, swap dealers, and institutional investors in markets under the CFTC's jurisdiction to: (1) ensure that index trading is not adversely impacting the price discovery process; (2) determine whether different practices or regulations should be implemented; and (3) gather data for use in proposing regulations to limit the size and influence of the institutional investor positions in commodity markets.

Directs the CFTC to exercise emergency authority to prevent institutional investors from increasing their positions in energy commodity futures and commodity future index funds.

Defines: (1) "bona fide hedging transaction or position" as a transaction or position that represents a hedge against price risk exposure relating to physical transactions involving an energy commodity and (2) "speculator" as any institutional investor or investor of an investment fund that holds a position through an intermediary broker or dealer.

Directs the CFTC to enforce speculation limits with respect to speculators in energy markets.

Set forth recordkeeping and reporting requirements relating to large trader transactions and positions applicable to index traders, swaps dealers, and institutional investors in markets under the CFTC's jurisdiction.

Requires the CFTC to promulgate regulations to establish separate classifications for index traders, swap dealers, and institutional investors to enforce recordkeeping and reporting requirements and to enforce position limits and position accountability levels with respect to energy commodities.

Imposes certain institutional investor speculation limits with respect to energy commodities.
A bill to amend the Commodity Exchange Act to ensure the application of speculation limits to speculators in energy markets, and for other purposes.