Sen. Dianne Feinstein (D-CA) and about a half a dozen other senators plan to soon introduce a “modified” version of her amendment to re-regulate the trading of over-the-counter (OTC) energy derivatives, a spokesman for her office said Monday. This marks the second time that Feinstein’s controversial measure to the Senate omnibus energy bill (S. 517) has been revised.

The introduction of the revised initiative is “up in the air because we’re not sure when the Senate will return to the energy debate,” he said. Floor action on the Senate energy bill is expected to be put on the shelf for at least part of this week as the Senate takes up campaign finance reform.

Feinstein’s week-long negotiations with Sen. Phil Gramm (R-TX) over the divisive amendment “resulted in some changes,” but the two did not reach a compromise, the spokesman said. The modified amendment addresses “some concerns” expressed by Gramm that the Feinstein amendment would lead to regulation of financial derivatives as well as energy derivatives, he noted.

But other changes sought by Gramm would have “gutted” the Feinstein amendment, which specifically seeks to close a loophole to the Commodity Futures Modernization Act of 2000 that exempted certain energy derivatives’ trades — swaps, future and options, for example — from regulatory oversight.

“I was hopeful that we could reach an agreement with Sen. Gramm to support the amendment, however, in the end he asked for four additional major changes that we felt would gut the heart out of the amendment,” said Sen. Feinstein in a statement Monday.

Notably, Gramm wanted to exempt energy swaps from the Commodity Futures Trading Commission (CFTC) anti-fraud and anti-manipulation authority; eliminate all public price-transparency requirements; exempt all on-line trading exchanges from requirements that they maintain sufficient capital to carry out their operations; and eliminate metal derivatives from regulatory oversight, she said.

Feinstein’s measure would bring most trading of energy derivatives under the umbrella of the CFTC, and would subject online trading platforms to the same reporting requirements as the New York Mercantile Exchange, the Chicago Mercantile Exchange and the Chicago Board of Trade.

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