cfr_sections
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1,197 rows where agency = "CFTC" sorted by section_id
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| section_id ▼ | title_number | title_name | chapter | subchapter | part_number | part_name | subpart | subpart_name | section_number | section_heading | agency | authority | source_citation | amendment_citations | full_text |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 17:17:1.0.1.1.1.0.1.1 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.1 [Reserved] | CFTC | ||||||||
| 17:17:1.0.1.1.1.0.1.2 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.2 Liability of principal for act of agent. | CFTC | The act, omission, or failure of any official, agent, or other person acting for any individual, association, partnership, corporation, or trust, within the scope of his employment or office, shall be deemed the act, omission, or failure of such individual, association, partnership, corporation, or trust as well as of such official, agent, or other person. | |||||||
| 17:17:1.0.1.1.1.0.1.3 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.3 Definitions. | CFTC | [41 FR 3194, Jan. 21, 1976] | Words used in the singular form in the rules and regulations in this chapter shall be deemed to import the plural and vice versa, as the context may require. The following terms, as used in the Commodity Exchange Act, or in the rules and regulations in this chapter, shall have the meanings hereby assigned to them, unless the context otherwise requires: Agricultural commodity. This term means: (1) The following commodities specifically enumerated in the definition of a “commodity” found in section 1a of the Act: Wheat, cotton, rice, corn, oats, barley, rye, flaxseed, grain sorghums, mill feeds, butter, eggs, Solanum tuberosum (Irish potatoes), wool, wool tops, fats and oils (including lard, tallow, cottonseed oil, peanut oil, soybean oil and all other fats and oils), cottonseed meal, cottonseed, peanuts, soybeans, soybean meal, livestock, livestock products, and frozen concentrated orange juice, but not onions; (2) All other commodities that are, or once were, or are derived from, living organisms, including plant, animal and aquatic life, which are generally fungible, within their respective classes, and are used primarily for human food, shelter, animal feed or natural fiber; (3) Tobacco, products of horticulture, and such other commodities used or consumed by animals or humans as the Commission may by rule, regulation or order designate after notice and opportunity for hearing; and (4) Commodity-based indexes based wholly or principally on underlying agricultural commodities. Associated person. This term means any natural person who is associated in any of the following capacities with: (1) A futures commission merchant as a partner, officer, or employee (or any natural person occupying a similar status or performing similar functions), in any capacity which involves (i) The solicitation or acceptance of customers' orders (other than in a clerical capacity) or (ii) the supervision of any person or persons so engaged; (2) An introducing broker as a partner, officer, employee, or agent (or any natural p… | ||||||
| 17:17:1.0.1.1.1.0.1.4 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.4 Electronic signatures, acknowledgments and verifications. | CFTC | [77 FR 66320, Nov. 2, 2012] | For purposes of complying with any provision in the Commodity Exchange Act or the rules or regulations in this Chapter I that requires a swap transaction to be acknowledged by a swap dealer or major swap participant or a document to be signed or verified by a customer of a futures commission merchant or introducing broker, a retail forex customer of a retail foreign exchange dealer or futures commission merchant, a pool participant or a client of a commodity trading advisor, or a counterparty of a swap dealer or major swap participant, an electronic signature executed by the customer, retail forex customer, participant, client, counterparty, swap dealer, or major swap participant will be sufficient, if the futures commission merchant, retail foreign exchange dealer, introducing broker, commodity pool operator, commodity trading advisor, swap dealer, or major swap participant elects generally to accept electronic signatures, acknowledgments or verifications or another Commission rule permits the use of electronic signatures for the purposes listed above; Provided, however, That the electronic signature must comply with applicable Federal laws and other Commission rules; And, Provided further, That the futures commission merchant, retail foreign exchange dealer, introducing broker, commodity pool operator, commodity trading advisor, swap dealer, or major swap participant must adopt and use reasonable safeguards regarding the use of electronic signatures, including at a minimum safeguards employed to prevent alteration of the electronic record with which the electronic signature is associated, after such record has been electronically signed. | ||||||
| 17:17:1.0.1.1.1.0.1.5 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.6 Anti-evasion. | CFTC | [77 FR 48354, Aug. 13, 2012] | (a) It shall be unlawful to conduct activities outside the United States, including entering into agreements, contracts, and transactions and structuring entities, to willfully evade or attempt to evade any provision of the Commodity Exchange Act as enacted by Subtitle A of the Wall Street Transparency and Accountability Act of 2010 or the rules, regulations, and orders of the Commission promulgated thereunder ( Subtitle A ). (b) The form, label, and written documentation of an agreement, contract, or transaction, or an entity, shall not be dispositive in determining whether the agreement, contract, or transaction, or entity, has been entered into or structured to willfully evade as provided in paragraph (a) of this section. (c) An activity conducted outside the United States to evade as provided in paragraph (a) of this section shall be subject to the provisions of Subtitle A. (d) Notwithstanding the foregoing, no agreement, contract, or transaction structured as a security (including a security-based swap) under the securities laws (as defined in section 3(a)(47) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(47))) shall be deemed a swap pursuant to this section. | ||||||
| 17:17:1.0.1.1.1.0.1.6 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.7 Books and records requirements for security-based swap agreements. | CFTC | [77 FR 48354, Aug. 13, 2012] | (a) A person registered as a swap data repository under section 21 of the Commodity Exchange Act and the rules and regulations thereunder: (1) Shall not be required to keep and maintain additional books and records regarding security-based swap agreements other than the books and records regarding swaps required to be kept and maintained pursuant to section 21 of the Commodity Exchange Act and the rules and regulations thereunder; and (2) Shall not be required to collect and maintain additional data regarding security-based swap agreements other than the data regarding swaps required to be collected and maintained by such persons pursuant to section 21 of the Commodity Exchange Act and the rules and regulations thereunder. (b) A person shall not be required to keep and maintain additional books and records, including daily trading records, regarding security-based swap agreements other than the books and records regarding swaps required to be kept and maintained by such persons pursuant to section 4s of the Commodity Exchange Act and the rules and regulations thereunder if such person is registered as: (1) A swap dealer under section 4s(a)(1) of the Commodity Exchange Act and the rules and regulations thereunder; (2) A major swap participant under section 4s(a)(2) of the Commodity Exchange Act and the rules and regulations thereunder; (3) A security-based swap dealer under section 15F(a)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 78o-10(a)(1)) and the rules and regulations thereunder; or (4) a major security-based swap participant under section 15F(a)(2) of the Securities Exchange Act of 1934 (15 U.S.C. 78o-10(a)(2)) and the rules and regulations thereunder. (c) The term security-based swap agreement has the meaning set forth in section 1a(47)(A)(v) of the Commodity Exchange Act. | ||||||
| 17:17:1.0.1.1.1.0.1.7 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.8 Requests for interpretation of swaps, security-based swaps, and mixed swaps. | CFTC | [77 FR 48354, Aug. 13, 2012] | (a) In general. Any person may submit a request to the Commission and the Securities and Exchange Commission to provide a joint interpretation of whether a particular agreement, contract, or transaction (or class thereof) is: (1) A swap, as that term is defined in section 1a(47) of the Commodity Exchange Act and the rules and regulations promulgated thereunder; (2) A security-based swap, as that term is defined in section 1a(42) of the Commodity Exchange Act and the rules and regulations promulgated thereunder; or (3) A mixed swap, as that term is defined in section 1a(47)(D) of the Commodity Exchange Act and the rules and regulations promulgated thereunder. (b) Request process. In making a request pursuant to paragraph (a) of this section, the requesting person must provide the Commission and the Securities and Exchange Commission with the following: (1) All material information regarding the terms of the agreement, contract, or transaction (or class thereof); (2) A statement of the economic characteristics and purpose of the agreement, contract, or transaction (or class thereof); (3) The requesting person's determination as to whether the agreement, contract, or transaction (or class thereof) should be characterized as a swap, a security-based swap, or both, ( i.e., a mixed swap), including the basis for such determination; and (4) Such other information as may be requested by the Commission or the Securities and Exchange Commission. (c) Request withdrawal. A person may withdraw a request made pursuant to paragraph (a) of this section at any time prior to the issuance of a joint interpretation or joint proposed rule by the Commission and the Securities and Exchange Commission in response to the request; provided, however, that notwithstanding such withdrawal, the Commission and the Securities and Exchange Commission may provide a joint interpretation of whether the agreement, contract, or transaction (or class thereof) is a swap, a security-based swap, or both ( i.e., a mixed swap). (d) Reque… | ||||||
| 17:17:1.0.1.1.1.0.1.8 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.9 Regulation of mixed swaps. | CFTC | [77 FR 48354, Aug. 13, 2012] | (a) In general. The term mixed swap has the meaning set forth in section 1a(47)(D) of the Commodity Exchange Act. (b) Regulation of bilateral uncleared mixed swaps entered into by dually-registered dealers or major participants. A mixed swap that is neither executed on nor subject to the rules of a designated contract market, national securities exchange, swap execution facility, security-based swap execution facility, or foreign board of trade; that will not be submitted to a derivatives clearing organization or registered or exempt clearing agency to be cleared; and where at least one party is registered with the Commission as a swap dealer or major swap participant and also with the Securities and Exchange Commission as a security-based swap dealer or major security-based swap participant, shall be subject to: (1) The following provisions of the Commodity Exchange Act, and the rules and regulations promulgated thereunder: (i) Examinations and information sharing: sections 4s(f) and 8 of the Commodity Exchange Act; (ii) Enforcement: sections 2(a)(1)(B), 4(b), 4b, 4c, 4s(h)(1)(A), 4s(h)(4)(A), 6(c), 6(d), 6c, 6d, 9, 13(a), 13(b), and 23 of the Commodity Exchange Act; (iii) Reporting to a swap data repository: section 4r of the Commodity Exchange Act; (iv) Real-time reporting: section 2(a)(13) of the Commodity Exchange Act; (v) Capital: section 4s(e) of the Commodity Exchange Act; and (vi) Position Limits: section 4a of the Commodity Exchange Act; and (2) The provisions of the Federal securities laws, as defined in section 3(a)(47) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(47)), and the rules and regulations promulgated thereunder. (c) Process for determining regulatory treatment for other mixed swaps —(1) In general. Any person who desires or intends to list, trade, or clear a mixed swap (or class thereof) that is not subject to paragraph (b) of this section may request the Commission and the Securities and Exchange Commission to issue a joint order permitting the requesting perso… | ||||||
| 17:17:1.0.1.1.1.0.2.10 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.11 Risk Management Program for futures commission merchants. | CFTC | [78 FR 68620, Nov. 14, 2013] | (a) Applicability. Nothing in this section shall apply to a futures commission merchant that does not accept any money, securities, or property (or extend credit in lieu thereof) to margin, guarantee, or secure any trades or contracts that result from soliciting or accepting orders for the purchase or sale of any commodity interest. (b) Definitions. For purposes of this section: (1) Business unit means any department, division, group, or personnel of a futures commission merchant or any of its affiliates, whether or not identified as such that: (i) Engages in soliciting or in accepting orders for the purchase or sale of any commodity interest and that, in or in connection with such solicitation or acceptance of orders, accepts any money, securities, or property (or extends credit in lieu thereof) to margin, guarantee, or secure any trades or contracts that result or may result therefrom; or (ii) Otherwise handles segregated funds, including managing, investing, and overseeing the custody of segregated funds, or any documentation in connection therewith, other than for risk management purposes; and (iii) Any personnel exercising direct supervisory authority of the performance of the activities described in paragraph (b)(1)(i) or (ii) of this section. (2) Customer means a futures customer as defined in § 1.3, Cleared Swaps Customer as defined in § 22.1 of this chapter, and 30.7 customer as defined in § 30.1 of this chapter. (3) Governing body means the proprietor, if the futures commission merchant is a sole proprietorship; a general partner, if the futures commission merchant is a partnership; the board of directors if the futures commission merchant is a corporation; the chief executive officer, the chief financial officer, the manager, the managing member, or those members vested with the management authority if the futures commission merchant is a limited liability company or limited liability partnership. (4) Segregated funds means money, securities, or other property held by a futures comm… | ||||||
| 17:17:1.0.1.1.1.0.2.11 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.12 Maintenance of minimum financial requirements by futures commission merchants and introducing brokers. | CFTC | [43 FR 39969, Sept. 8, 1978] | (a) Each person registered as a futures commission merchant or who files an application for registration as a futures commission merchant, and each person registered as an introducing broker or who files an application for registration as an introducing broker (except for an introducing broker or applicant for registration as an introducing broker operating pursuant to, or who has filed concurrently with its application for registration, a guarantee agreement and who is not also a securities broker or dealer), who knows or should have known that its adjusted net capital at any time is less than the minimum required by § 1.17 or by the capital rule of any self-regulatory organization to which such person is subject, or the minimum net capital requirements of the Securities and Exchange Commission if the applicant or registrant is registered with the Securities and Exchange Commission, must: (1) Give notice, as set forth in paragraph (n) of this section that the applicant's or registrant's capital is below the applicable minimum requirement. Such notice must be given immediately after the applicant or registrant knows or should have known that its adjusted net capital or net capital, as applicable, is less than minimum required amount; and (2) Provide together with such notice documentation, in such form as necessary, to adequately reflect the applicant's or registrant's capital condition as of any date on which such person's adjusted net capital is less than the minimum required; Provided, however, that if the applicant or registrant cannot calculate or otherwise immediately determine its financial condition, it must provide the notice required by paragraph (a)(1) of this section and include in such notice a statement that the entity cannot presently calculate its financial condition. The applicant or registrant must provide similar documentation of its financial condition for other days as the Commission may request. (b) Each person registered as a futures commission merchant, or who files an application for… | ||||||
| 17:17:1.0.1.1.1.0.2.12 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.13 [Reserved] | CFTC | ||||||||
| 17:17:1.0.1.1.1.0.2.13 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.14 Risk assessment recordkeeping requirements for futures commission merchants. | CFTC | [59 FR 66688, Dec. 28, 1994] | (a) Requirement to maintain and preserve information. (1) Each futures commission merchant registered with the Commission pursuant to Section 4d of the Act, unless exempt pursuant to paragraph (d) of this section, shall prepare, maintain and preserve the following information: (i) An organizational chart which includes the futures commission merchant and each of its affiliated persons. Included in the organizational chart shall be a designation of which affiliated persons are “Material Affiliated Persons” as that term is used in paragraph (a)(2) of this section, which Material Affiliated Persons file routine financial or risk exposure reports with the Securities and Exchange Commission, a federal banking agency, an insurance commissioner or other similar official or agency of a state, or a foreign regulatory authority, and which Material Affiliated Persons are dealers in financial instruments with off-balance sheet risk and, if a Material Affiliated Person is such a dealer, whether it is also an end-user of such instruments; (ii) Written policies, procedures, or systems concerning the futures commission merchant's: (A) Method(s) for monitoring and controlling financial and operational risks to it resulting from the activities of any of its affiliated persons; (B) Financing and capital adequacy, including information regarding sources of funding, together with a narrative discussion by management of the liquidity of the material assets of the futures commission merchant, the structure of debt capital, and sources of alternative funding; (C) Establishing and maintaining internal controls with respect to market risk, credit risk, and other risks created by the futures commission merchant's proprietary and noncustomer clearing activities, including systems and policies for supervising, monitoring, reporting and reviewing trading activities in securities, futures contracts, commodity options, forward contracts and financial instruments; policies for hedging or managing risks created by trading activities or sup… | ||||||
| 17:17:1.0.1.1.1.0.2.14 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.15 Risk assessment reporting requirements for futures commission merchants. | CFTC | [59 FR 66690, Dec. 28, 1994; 60 FR 13901, Mar. 15, 1995, as amended at 78 FR 68625, Nov. 14, 2013] | (a) Reporting requirements with respect to information required to be maintained by § 1.14. (1) Each futures commission merchant registered with the Commission pursuant to Section 4d of the Act, unless exempt pursuant to paragraph (c) of this section, shall file the following with the regional office with which it files periodic financial reports by no later than April 30, 1995, provided that in the case of a futures commission merchant whose registration becomes effective after December 31, 1994, such futures commission merchant shall file the following within 60 calendar days after the effective date of such registration, or by April 30, 1995, whichever comes later: (i) A copy of the organizational chart maintained by the futures commission merchant pursuant to paragraph (a)(l)(i) of § 1.14. Where there is a material change in information provided, an updated organizational chart shall be filed within sixty calendar days after the end of the fiscal quarter in which the change has occurred; and (ii) Copies of the financial, operational, and risk management policies, procedures and systems maintained by the futures commission merchant pursuant to paragraph (a)(l)(ii) of § 1.14. If the futures commission merchant has no such written policies, procedures or systems, it must file a statement so indicating. Where there is a material change in information provided, such change shall be reported within sixty calendar days after the end of the fiscal quarter in which the change has occurred. (2) Each futures commission merchant registered with the Commission pursuant to Section 4d of the Act, unless exempt pursuant to paragraph (c) of this section, shall file the following with the regional office with which it files periodic financial reports within 105 calendar days after the end of each fiscal year or, if a filing is made pursuant to a written notice issued under paragraph (a)(2)(iii) of this section, within the time period specified in the written notice: (i) Fiscal year-end consolidated and consolidating bala… | ||||||
| 17:17:1.0.1.1.1.0.2.15 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.16 Qualifications and reports of accountants. | CFTC | [43 FR 39970, Sept. 8, 1978, as amended at 46 FR 54516, Nov. 3, 1981; 46 FR 63035, Dec. 30, 1981; 48 FR 35284, Aug. 3, 1983; 49 FR 39526, Oct. 9, 1984; 52 FR 28995, Aug. 5, 1987; 53 FR 4612, Feb. 17, 1988; 69 FR 41426, July 9, 2004; 69 FR 49798, Aug. 12, 2004; 71 FR 5593, Feb. 2, 2006; 77 FR 66320, Nov. 2, 2012; 78 FR 68625, Nov. 14, 2013; 85 FR 57543, Sept. 15, 2020] | (a) Definitions— (1) Accountant's report. The term “accountant's report,” when used in regard to financial statements and schedules, means a document in which an independent licensed or certified public accountant indicates the scope of the audit (or examination) which he has made and sets forth his opinion regarding the financial statements and schedules taken as a whole or an assertion to the fact that an overall opinion cannot be expressed. When an overall opinion cannot be expressed, the reasons therefore must be stated. (2) Audit or examination. The terms “audit” and “examination,” when used in regard to financial statements and schedules, mean an examination of the statements and schedules by an accountant in accordance with generally accepted auditing standards for the purposes of expressing an opinion thereon. (3) Certified. The term “certified,” when used in regard to financial statements and schedules, means audited and reported upon with an opinion expressed by an independent certified public accountant or independent licensed public accountant. (4) Customer. The term “customer” means customer, as defined in §§ 1.3, and 30.7 customer, as defined in § 30.1 of this chapter. (b) Qualifications of accountants. (1) The Commission will recognize any person as a certified public accountant who is duly registered and in good standing as such under the laws of the place of his residence or principal office; Provided, however, that a certified public accountant engaged to conduct an examination of a futures commission merchant must be registered with the Public Company Accounting Oversight Board and must have undergone an examination by the Public Company Accounting Oversight Board, and may not be subject to a permanent or temporary bar to engage in the examination of public issuers or brokers or dealers registered with the Securities and Exchange Commission as a result of a Public Company Accounting Oversight Board disciplinary hearing. (2) The Commission will not recognize any certified publi… | ||||||
| 17:17:1.0.1.1.1.0.2.16 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.17 Minimum financial requirements for futures commission merchants and introducing brokers. | CFTC | [43 FR 39972, Sept. 8, 1978] | (a)(1)(i) Except as provided in paragraph (a)(2)(i) of this section, each person registered as a futures commission merchant must maintain adjusted net capital equal to or in excess of the greatest of: (A) $1,000,000, Provided, however, that if the futures commission merchant also is a swap dealer, the minimum amount shall be $20,000,000; (B) The futures commission merchant's risk-based capital requirement, computed as the sum of: ( 1 ) Eight percent of the total risk margin requirement (as defined in § 1.17(b)(8) of this section) for positions carried by the futures commission merchant in customer accounts and noncustomer accounts; and ( 2 ) For a futures commission merchant that is also a registered swap dealer, two percent of the total uncleared swap margin, as that term is defined in paragraph (b)(11) of this section. (C) The amount of adjusted net capital required by a registered futures association of which it is a member; or (D) For securities brokers and dealers, the amount of net capital required by Rule 15c3-1(a) of the Securities and Exchange Commission (17 CFR 240.15c3-1(a)). (ii) A futures commission merchant that is registered as a swap dealer and has received approval to use internal models to compute market risk and credit risk charges for uncleared swaps must maintain net capital equal to or in excess of $100 million and adjusted net capital equal to or in excess of $20 million. (iii) Except as provided in paragraph (a)(2) of this section, each person registered as an introducing broker must maintain adjusted net capital equal to or in excess of the greatest of: (A) $45,000; (B) The amount of adjusted net capital required by a registered futures association of which it is a member; or (C) For securities brokers and dealers, the amount of net capital required by Rule 15c3-1(a) of the Securities and Exchange Commission (17 CFR 240.15c3-1(a)). (2)(i) The requirements of paragraph (a)(1) of this section shall not be applicable if the registrant is a member of a designated self-regulator… | ||||||
| 17:17:1.0.1.1.1.0.2.17 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.18 Records for and relating to financial reporting and monthly computation by futures commission merchants and introducing brokers. | CFTC | [48 FR 35288, Aug. 3, 1983, as amended at 49 FR 39530, Oct. 9, 1984; 62 FR 4641, Jan. 31, 1997; 69 FR 49800, Aug. 12, 2004; 71 FR 5594, Feb. 2, 2006] | (a) No person shall be registered as a futures commission merchant or as an introducing broker under the Act unless, commencing on the date his application for such registration is filed, he prepares and keeps current ledgers or other similar records which show or summarize, with appropriate references to supporting documents, each transaction affecting his asset, liability, income, expense and capital accounts, and in which (except as otherwise permitted in writing by the Commission) all his asset, liability and capital accounts are classified into either the account classification subdivisions specified on Form 1-FR-FCM or Form 1-FR-IB, respectively, or, if such person is registered with the Securities and Exchange Commission as a securities broker or dealer and he files (in accordance with § 1.10(h)) a copy of his Financial and Operational Combined Uniform Single Report under the Securities Exchange Act of 1934, Part II, Part IIA, or Part II CSE (FOCUS report) in lieu of Form 1-FR-FCM or Form 1-FR-IB, the account classification subdivisions specified on such FOCUS report, or categories that are in accord with generally accepted accounting principles. Each person so registered shall prepare and keep current such records. (b)(1) Each applicant or registrant must make and keep as a record in accordance with § 1.31 formal computations of its adjusted net capital and of its minimum financial requirements pursuant to § 1.17 or the requirements of the designated self-regulatory organization to which it is subject as of the close of business each month. Such computations must be completed and made available for inspection by any representative of the National Futures Association, in the case of an applicant, or of the Commission or designated self-regulatory organization, if any, in the case of a registrant, within 17 business days after the date for which the computations are made, commencing the first month end after the date the application for registration is filed. (2) An applicant or registrant that has filed … | ||||||
| 17:17:1.0.1.1.1.0.2.9 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.10 Financial reports of futures commission merchants and introducing brokers. | CFTC | [43 FR 39967, Sept. 8, 1978] | (a) Application for registration. (1) Except as otherwise provided, a futures commission merchant or an applicant for registration as a futures commission merchant, in order to satisfy any requirement in this part that it file a Form 1-FR, must file a Form 1-FR-FCM, and any reference in this part to Form 1-FR with respect to a futures commission merchant or applicant therefor shall be deemed to be a reference to Form 1-FR-FCM. Except as otherwise provided, an introducing broker or an applicant for registration as an introducing broker, in order to satisfy any requirement in this part that it file a Form 1-FR, must file a Form 1-FR-IB, and any reference in this part to Form 1-FR with respect to an introducing broker or applicant therefor shall be deemed to be a reference to Form 1-FR-IB. (2) (i) (A) Except as provided in paragraphs (a)(3) and (h) of this section, each person who files an application for registration as a futures commission merchant and who is not so registered at the time of such filing, must, concurrently with the filing of such application, file either: ( 1 ) A Form 1-FR-FCM certified by an independent public accountant in accordance with § 1.16 as of a date not more than 45 days prior to the date on which such report is filed; or ( 2 ) A Form 1-FR-FCM as of a date not more than 17 business days prior to the date on which such report is filed and a Form 1-FR-FCM certified by an independent public accountant in accordance with § 1.16 as of a date not more than one year prior to the date on which such report is filed. (B) Each such person must include with such financial report a statement describing the source of his current assets and representing that his capital has been contributed for the purpose of operating his business and will continue to be used for such purpose. (ii) (A) Except as provided in paragraphs (a)(3) and (h) of this section, each person who files an application for registration as an introducing broker and who is not so registered at the time of such filing, must, conc… | ||||||
| 17:17:1.0.1.1.1.0.3.18 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.19 Prohibited trading in certain “puts” and “calls”. | CFTC | [52 FR 28997, Aug. 5, 1987, as amended at 58 FR 68520, Dec. 28, 1993] | No futures commission merchant or introducing broker may make, underwrite, issue, or otherwise assume any financial responsibility for the fulfillment of, any commodity option except: (a) Commodity options traded on or subject to the rules of a contract market in accordance with the requirements of part 33 of this chapter; (b) Commodity options traded on or subject to the rules of a foreign board of trade in accordance with the requirements of part 30 of this chapter; or (c) For futures commission merchants, any option permitted under § 32.4 of this chapter, provided however, that a capital treatment for such options is referenced in § 1.17(c)(5)(vi). | ||||||
| 17:17:1.0.1.1.1.0.4.19 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.20 Futures customer funds to be segregated and separately accounted for. | CFTC | [78 FR 68627, Nov. 14, 2013, as amended at 79 FR 26832, May 12, 2014; 81 FR 53267, Aug. 12, 2016; 85 FR 4850, Jan. 27, 2020; 90 FR 7867, 7933, Jan. 22, 2025] | (a) General. A futures commission merchant must separately account for all futures customer funds and segregate such funds as belonging to its futures customers. A futures commission merchant shall deposit futures customer funds under an account name that clearly identifies them as futures customer funds and shows that such funds are segregated as required by sections 4d(a) and 4d(b) of the Act and by this part. A futures commission merchant must at all times maintain in the separate account or accounts money, securities and property in an amount at least sufficient in the aggregate to cover its total obligations to all futures customers as computed under paragraph (i) of this section. The futures commission merchant must perform appropriate due diligence as required by § 1.11 on any and all locations of futures customer funds, as specified in paragraph (b) of this section, to ensure that the location in which the futures commission merchant has deposited such funds is a financially sound entity. (b) Location of futures customer funds. A futures commission merchant may deposit futures customer funds, subject to the risk management policies and procedures of the futures commission merchant required by § 1.11, with the following depositories: (1) A bank or trust company; (2) A derivatives clearing organization; or (3) Another futures commission merchant. (c) Limitation on the holding of futures customer funds outside of the United States. A futures commission merchant may hold futures customer funds with a depository outside of the United States only in accordance with § 1.49. (d) Written acknowledgment from depositories. (1) A futures commission merchant must obtain a written acknowledgment from each bank, trust company, derivatives clearing organization, or futures commission merchant prior to or contemporaneously with the opening of an account by the futures commission merchant with such depositories; provided, however, that a written acknowledgment need not be obtained from a derivatives clear… | ||||||
| 17:17:1.0.1.1.1.0.4.20 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.21 Care of money and equities accruing to futures customers. | CFTC | [77 FR 66321, Nov. 2, 2012] | All money received directly or indirectly by, and all money and equities accruing to, a futures commission merchant from any derivatives clearing organization or from any clearing member or from any member of a contract market incident to or resulting from any trade, contract or commodity option made by or through such futures commission merchant on behalf of any futures customer shall be considered as accruing to such futures customer within the meaning of the Act and these regulations. Such money and equities shall be treated and dealt with as belonging to such futures customer in accordance with the provisions of the Act and these regulations. Money and equities accruing in connection with futures customers' open trades, contracts, or commodity options need not be separately credited to individual accounts but may be treated and dealt with as belonging undivided to all futures customers having open trades, contracts, or commodity option positions which if closed would result in a credit to such futures customers. | ||||||
| 17:17:1.0.1.1.1.0.4.21 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.22 Use of futures customer funds restricted. | CFTC | [78 FR 68631, Nov. 14, 2013, as amended at 80 FR 15509, Mar. 24, 2015] | (a) No futures commission merchant shall use, or permit the use of, the futures customer funds of one futures customer to purchase, margin, or settle the trades, contracts, or commodity options of, or to secure or extend the credit of, any person other than such futures customer. (b) Futures customer funds shall not be used to carry trades or positions of the same futures customer other than in contracts for the purchase of sale of any commodity for future delivery or for options thereon traded through the facilities of a designated contract market. (c)(1) The undermargined amount for a futures customer's account is the amount, if any, by which: (i) The total amount of collateral required for that futures customer's positions in that account, at the time or times referred to in paragraph (c)(2) of this section, exceeds (ii) The value of the futures customer funds for that account, as calculated in § 1.20(i)(2). (2) Each futures commission merchant must compute, based on the information available to the futures commission merchant as of the close of each business day, (i) The undermargined amounts, based on the clearing initial margin that will be required to be maintained by that futures commission merchant for its futures customers, at each derivatives clearing organization of which the futures commission merchant is a member, at the point of the daily settlement (as described in § 39.14 of this chapter) that will complete during the following business day for each such derivatives clearing organization less (ii) Any debit balances referred to in § 1.20(i)(4) included in such undermargined amounts. (3)(i) Prior to the Residual Interest Deadline, such futures commission merchant must maintain residual interest in segregated funds that is at least equal to the computation set forth in paragraph (c)(2) of this section. Where a futures commission merchant is subject to multiple Residual Interest Deadlines, prior to each Residual Interest Deadline, such futures commission merchant must maintain residual inter… | ||||||
| 17:17:1.0.1.1.1.0.4.22 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.23 Interest of futures commission merchant in segregated futures customer funds; additions and withdrawals. | CFTC | [78 FR 68632, Nov. 14, 2013, as amended at 79 FR 44126, July 30, 2014] | (a)(1) The provision in sections 4d(a)(2) and 4d(b) of the Act and the provision in § 1.20 that prohibit the commingling of futures customer funds with the funds of a futures commission merchant, shall not be construed to prevent a futures commission merchant from having a residual financial interest in the futures customer funds segregated as required by the Act and the regulations in this part and set apart for the benefit of futures customers; nor shall such provisions be construed to prevent a futures commission merchant from adding to such segregated futures customer funds such amount or amounts of money, from its own funds or unencumbered securities from its own inventory, of the type set forth in § 1.25 of this part, as it may deem necessary to ensure any and all futures customers' accounts from becoming undersegregated at any time. (2) If a futures commission merchant discovers at any time that it is holding insufficient funds in segregated accounts to meet its obligations under §§ 1.20 and 1.22, the futures commission merchant shall immediately deposit sufficient funds into segregation to bring the account into compliance. (b) A futures commission merchant may not withdraw funds, except withdrawals that are made to or for the benefit of futures customers, from an account or accounts holding futures customer funds unless the futures commission merchant has prepared the daily segregation calculation required by § 1.32 as of the close of business on the previous business day. A futures commission merchant that has completed its daily segregation calculation may make withdrawals, in addition to withdrawals that are made to or for the benefit of futures customers, to the extent of its actual residual financial interest in funds held in segregated futures accounts, adjusted to reflect market activity and other events that may have decreased the amount of the firm's residual financial interest since the close of business on the previous business day, including the withdrawal of securities held in segregated s… | ||||||
| 17:17:1.0.1.1.1.0.4.23 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.24 Segregated funds; exclusions therefrom. | CFTC | [77 FR 66322, Nov. 2, 2012] | Money held in a segregated account by a futures commission merchant shall not include: (a) Money invested in obligations or stocks of any derivatives clearing organization or in memberships in or obligations of any contract market; or (b) Money held by any derivatives clearing organization which it may use for any purpose other than to purchase, margin, guarantee, secure, transfer, adjust, or settle the contracts, trades, or commodity options of the futures customers of such futures commission merchant. | ||||||
| 17:17:1.0.1.1.1.0.4.24 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.25 Investment of customer funds. | CFTC | [76 FR 78798, Dec. 19, 2011, as amended at 77 FR 66322, Nov. 2, 2012; 78 FR 68633, Nov. 14, 2013; 86 FR 19419, Apr. 13, 2021; 90 FR 7867, Jan. 22, 2025] | (a) Permitted investments. (1) Subject to the terms and conditions set forth in this section, a futures commission merchant or a derivatives clearing organization may invest customer money in the following instruments (permitted investments): (i) Obligations of the United States and obligations fully guaranteed as to principal and interest by the United States (U.S. government securities); (ii) General obligations of any State or of any political subdivision thereof (municipal securities); (iii) Obligations of any United States government corporation or enterprise sponsored by the United States government (U.S. agency obligations); (iv) Interests in government money market funds as defined in § 270.2a-7 of this title, provided that the government money market funds do not choose to rely on the ability to impose discretionary liquidity fees consistent with the requirements of 17 CFR 270.2a-7(c)(2)(i)(government money market fund); (v) Interests in exchange-traded funds, as defined in 17 CFR 270.6c-11, which seek to replicate the performance of a published short-term U.S. Treasury security index composed of bonds, notes, and bills with a remaining maturity of 12 months or less, issued by, or unconditionally guaranteed as to the timely payment of principal and interest by, the U.S. Department of the Treasury (U.S. Treasury exchange-traded fund); and (vi) General obligations of Canada, France, Germany, Japan, and the United Kingdom (permitted foreign sovereign debt), subject to the following: (A) A futures commission merchant may invest in the permitted foreign sovereign debt of a country to the extent the futures commission merchant has balances in segregated accounts owed to its customers denominated in that country's currency; and (B) A derivatives clearing organization may invest in the permitted foreign sovereign debt of a country to the extent the derivatives clearing organization has balances in segregated accounts owed to its clearing members that are futures commission merchants denominated in that… | ||||||
| 17:17:1.0.1.1.1.0.4.25 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.26 Deposit of instruments purchased with futures customer funds. | CFTC | [78 FR 68634, Nov. 14, 2013, as amended at 79 FR 26833, May 12, 2014; 90 FR 7869, Jan. 22, 2025] | (a) Each futures commission merchant who invests futures customer funds in instruments described in § 1.25, except for investments in government money market funds, shall separately account for such instruments as futures customer funds and segregate such instruments as funds belonging to such futures customers in accordance with the requirements of § 1.20. Each derivatives clearing organization which invests money belonging or accruing to futures customers of its clearing members in instruments described in § 1.25, except for investments in government money market funds, shall separately account for such instruments as customer funds and segregate such instruments as customer funds belonging to such futures customers in accordance with § 1.20. (b) Each futures commission merchant or derivatives clearing organization which invests futures customer funds in government money market funds, as permitted by § 1.25, shall separately account for such funds and segregate such funds as belonging to such futures customers. Such funds shall be deposited under an account name that clearly shows that they belong to futures customers and are segregated as required by sections 4d(a) and 4d(b) of the Act and by this part. Each futures commission merchant or derivatives clearing organization, upon opening such an account, shall obtain and maintain readily accessible in its files in accordance with § 1.31, for as long as the account remains open, and thereafter for the period provided in § 1.31, a written acknowledgment and shall file such acknowledgment in accordance with the requirements of § 1.20. In the event such funds are held directly with the government money market fund or its affiliate, the written acknowledgment shall be in the form as set out in appendix F or G to this part. In the event such funds are held with a depository, the written acknowledgment shall be in the form as set out in appendix C or D to this part. In either case, the written acknowledgment shall be obtained, provided to the Commission and designated… | ||||||
| 17:17:1.0.1.1.1.0.4.26 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.27 Record of investments. | CFTC | [46 FR 54520, Nov. 3, 1981, as amended at 46 FR 63035, Dec. 30, 1981; 62 FR 42401, Aug. 7, 1997; 65 FR 78013, Dec. 13, 2000; 70 FR 28204, May 17, 2005; 77 FR 66322, Nov. 2, 2012] | (a) Each futures commission merchant which invests customer funds, and each derivatives clearing organization which invests customer funds of its clearing members' customers, shall keep a record showing the following: (1) The date on which such investments were made; (2) The name of the person through whom such investments were made; (3) The amount of money or current market value of securities so invested; (4) A description of the instruments in which such investments were made, including the CUSIP or ISIN numbers; (5) The identity of the depositories or other places where such instruments are segregated; (6) The date on which such investments were liquidated or otherwise disposed of and the amount of money or current market value of securities received on such disposition, if any; and (7) The name of the person to or through whom such investments were disposed of; and (8) Daily valuation for each instrument and readily available documentation supporting the daily valuation for each instrument. Such supporting documentation must be sufficient to enable auditors to verify the valuations and the accuracy of any information from external sources used in those valuations. (b) Each derivatives clearing organization which receives documents from its clearing members representing investment of customer funds shall keep a record showing separately for each clearing member the following: (1) The date on which such documents were received from the clearing member; (2) A description of such documents, including the CUSIP or ISIN numbers; and (3) The date on which such documents were returned to the clearing member or the details of disposition by other means. (c) Such records shall be retained in accordance with § 1.31. No such investments shall be made except in instruments described in § 1.25. | ||||||
| 17:17:1.0.1.1.1.0.4.27 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.28 Appraisal of instruments purchased with customer funds. | CFTC | [58 FR 10953, Feb. 23, 1993, as amended at 65 FR 78013, Dec. 13, 2000] | Futures commission merchants who invest customer funds in instruments described in § 1.25 of this part shall include such instruments in segregated account records and reports at values which at no time exceed current market value, determined as of the close of the market on the date for which such computation is made. | ||||||
| 17:17:1.0.1.1.1.0.4.28 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.29 Gains and losses resulting from investment of customer funds. | CFTC | [78 FR 68637, Nov. 14, 2013] | (a) The investment of customer funds in instruments described in § 1.25 shall not prevent the futures commission merchant or derivatives clearing organization so investing such funds from receiving and retaining as its own any incremental income or interest income resulting therefrom. (b) The futures commission merchant or derivatives clearing organization, as applicable, shall bear sole responsibility for any losses resulting from the investment of customer funds in instruments described in § 1.25. No investment losses shall be borne or otherwise allocated to the customers of the futures commission merchant and, if customer funds are invested by a derivatives clearing organization in its discretion, to the futures commission merchant. | ||||||
| 17:17:1.0.1.1.1.0.4.29 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.30 Loans by futures commission merchants; treatment of proceeds. | CFTC | [78 FR 68637, Nov. 14, 2013] | Nothing in the regulations in this chapter shall prevent a futures commission merchant from lending its own funds to customers on securities and property pledged by such customers, or from repledging or selling such securities and property pursuant to specific written agreement with such customers. The proceeds of such loans used to purchase, margin, guarantee, or secure the trades, contracts, or commodity options of customers shall be treated and dealt with by a futures commission merchant as belonging to such customers, in accordance with and subject to the provisions of the Act and these regulations. A futures commission merchant may not loan funds on an unsecured basis to finance customers' trading, nor may a futures commission merchant loan funds to customers secured by the customer accounts of such customers. | ||||||
| 17:17:1.0.1.1.1.0.5.30 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.31 Regulatory records; retention and production. | CFTC | [82 FR 24486, May 30, 2017] | (a) Definitions. For purposes of this section: Electronic regulatory records means all regulatory records other than regulatory records exclusively created and maintained by a records entity on paper. Records entity means any person required by the Act or Commission regulations in this chapter to keep regulatory records. Regulatory records means all books and records required to be kept by the Act or Commission regulations in this chapter, including any record of any correction or other amendment to such books and records, provided that, with respect to such books and records stored electronically, regulatory records shall also include: (i) Any data necessary to access, search, or display any such books and records; and (ii) All data produced and stored electronically describing how and when such books and records were created, formatted, or modified. (b) Duration of retention. Unless specified elsewhere in the Act or Commission regulations in this chapter: (1) A records entity shall keep regulatory records of any swap or related cash or forward transaction (as defined in § 23.200(i) of this chapter), other than regulatory records required by § 23.202(a)(1) and (b)(1)-(3) of this chapter, from the date the regulatory record was created until the termination, maturity, expiration, transfer, assignment, or novation date of the transaction and for a period of not less than five years after such date. (2) A records entity that is required to retain oral communications, shall keep regulatory records of oral communications for a period of not less than one year from the date of such communication. (3) A records entity shall keep each regulatory record other than the records described in paragraphs (b)(1) or (b)(2) of this section for a period of not less than five years from the date on which the record was created. (4) A records entity shall keep regulatory records exclusively created and maintained on paper readily accessible for no less than two years. A records entity shall keep electronic regulato… | ||||||
| 17:17:1.0.1.1.1.0.5.31 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.32 Reporting of segregated account computation and details regarding the holding of futures customer funds. | CFTC | [66 FR 41133, Aug. 7, 2001, as amended at 68 FR 5551, Feb. 4, 2003; 77 FR 66323, Nov. 2, 2012; 78 FR 68637, Nov. 14, 2013; 90 FR 7870, 7934, Jan. 22, 2025] | (a) Each futures commission merchant must compute as of the close of each business day, on a currency-by-currency basis: (1) The total amount of futures customer funds on deposit in segregated accounts on behalf of futures customers; (2) The amount of such futures customer funds required by the Act and these regulations to be on deposit in segregated accounts on behalf of such futures customers; and (3) The amount of the futures commission merchant's residual interest in such futures customer funds. (b) In computing the amount of futures customer funds required to be in segregated accounts, a futures commission merchant may offset any net deficit in a particular futures customer's account against the current market value of readily marketable securities, less applicable deductions ( i.e., “securities haircuts”) as set forth in Rule 15c3-1(c)(2)(vi) of the Securities and Exchange Commission (17 CFR 240.15c3-1(c)(2)(vi)), held for the same futures customer's account. Futures commission merchants that establish and enforce written policies and procedures to assess the credit risk of commercial paper, convertible debt instruments, or nonconvertible debt instruments in accordance with Rule 240.15c3-1(c)(2)(vi) of the Securities and Exchange Commission (17 CFR 240.15c3-1(c)(2)(vi)) may apply the lower haircut percentages specified in Rule 240.15c3-1(c)(2)(vi) for such commercial paper, convertible debt instruments and nonconvertible debt instruments. The futures commission merchant must maintain a security interest in the securities, including a written authorization to liquidate the securities at the futures commission merchant's discretion, and must segregate the securities in a safekeeping account with a bank, trust company, derivatives clearing organization, or another futures commission merchant. For purposes of this section, a security will be considered readily marketable if it is traded on a “ready market” as defined in Rule 15c3-1(c)(11)(i) of the Securities and Exchange Commission (17 CFR 240.15c3-1(c)(1… | ||||||
| 17:17:1.0.1.1.1.0.5.32 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.33 Monthly and confirmation statements. | CFTC | [46 FR 54520, Nov. 3, 1981, as amended at 46 FR 63035, Dec. 30, 1981; 47 FR 57008, Dec. 22, 1982; 48 FR 1185, Jan. 11, 1983; 48 FR 35289, Aug. 3, 1983; 52 FR 28997, Aug. 5, 1987; 66 FR 53517, Oct. 23, 2001; 77 FR 66323, Nov. 2, 2012; 83 FR 7995, Feb. 23, 2018; 83 FR 30534, June 29, 2018] | (a) Monthly statements. Each futures commission merchant must promptly furnish in writing to each customer, and to each foreign futures or foreign options customer, as defined by § 30.1 of this chapter, as of the close of the last business day of each month or as of any regular monthly date selected, except for accounts in which there are neither open contracts at the end of the statement period nor any changes to the account balance since the prior statement period, but in any event not less frequently than once every three months, a statement which clearly shows: (1) For each commodity futures customer and foreign futures or foreign options customer position— (i) The open contracts with prices at which acquired; (ii) The net unrealized profits or losses in all open contracts marked to the market; and (iii) Any futures customer funds or foreign futures or foreign options secured amount, as defined by § 1.3, carried with the futures commission merchant. (2) For each commodity option position and foreign option position— (i) All commodity options and foreign options purchased, sold, exercised, or expired during the monthly reporting period, identified by underlying futures contract or underlying commodity, strike price, transaction date, and expiration date; (ii) The open commodity option and foreign option positions carried for such customer or foreign futures or foreign options customer as of the end of the monthly reporting period, identified by underlying futures contract or underlying commodity, strike price, transaction date, and expiration date; (iii) All open commodity option and foreign option positions marked to the market and the amount each position is in the money, if any; and (iv) Any related customer funds carried in such customer's account(s) or any related foreign futures or foreign options secured amount carried in the account(s) of a foreign futures or foreign options customer. (3) For each Cleared Swaps Customer position— (i) The Cleared Swaps, as § 22.1 of this chapter defines tha… | ||||||
| 17:17:1.0.1.1.1.0.5.33 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.34 Monthly record, “point balance”. | CFTC | [77 FR 66324, Nov. 2, 2012] | (a) With respect to commodity futures transactions, each futures commission merchant shall prepare, and retain in accordance with the requirements of § 1.31, a statement commonly known as a “point balance,” which accrues or brings to the official closing price, or settlement price fixed by the clearing organization, all open contracts of customers as of the last business day of each month or of any regular monthly date selected: Provided, however, That a futures commission merchant who carries part or all of customers' open contracts with other futures commission merchants on an “instruct basis” will be deemed to have met the requirements of this section as to open contracts so carried if a monthly statement is prepared which shows that the prices and amounts of such contracts long and short in the customers' accounts are in balance with those in the carrying futures commission merchants' accounts, and such statements are retained in accordance with the requirements of § 1.31. (b) With respect to commodity option transactions, each futures commission merchant shall prepare, and retain in accordance with the requirements of § 1.31, a listing in which all open commodity option positions carried for customers are marked to the market. Such listing shall be prepared as of the last business day of each month, or as of any regular monthly date selected, and shall be by put or by call, by underlying contract for future delivery (by delivery month) or underlying commodity (by option expiration date), and by strike price. | ||||||
| 17:17:1.0.1.1.1.0.5.34 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.35 Records of commodity interest and related cash or forward transactions. | CFTC | [77 FR 66324, Nov. 2, 2012, as amended at 77 FR 75541, Dec. 21, 2012; 80 FR 80255, Dec. 24, 2015; 82 FR 24487, May 30, 2017; 89 FR 78810, Sept. 26, 2024] | (a) Futures commission merchants, retail foreign exchange dealers, introducing brokers, and members of designated contract markets or swap execution facilities —(1) Futures commission merchants, retail foreign exchange dealers, and certain introducing brokers. Each futures commission merchant, retail foreign exchange dealer, and introducing broker that has generated over the preceding three years more than $5 million in aggregate gross revenues from its activities as an introducing broker, shall: (i) Keep full, complete, and systematic records (including all pertinent data and memoranda) of all transactions relating to its business of dealing in commodity interests and related cash or forward transactions, which shall include all orders (filled, unfilled, or canceled), trading cards, signature cards, street books, journals, ledgers, canceled checks, copies of confirmations, copies of statements of purchase and sale, and all other records, which have been prepared in the course of its business of dealing in commodity interests and related cash or forward transactions (for purposes of this section, all records described in this paragraph (a)(1)(i) are referred to as “ commodity interest and related records ”); (ii) If such person is a member of a designated contract market or swap execution facility, retain and produce for inspection all documents on which trade information is originally recorded, whether or not such documents must be prepared pursuant to the rules or regulations of either the Commission, the designated contract market or the swap execution facility (for purposes of this section, all records described in this paragraph (a)(1)(ii) are referred to as “ original source documents, ” and, together with commodity interest and related records, “ transaction records ”); and (iii) Keep all oral and written communications provided or received concerning quotes, solicitations, bids, offers, instructions, trading, and prices that lead to the execution of a transaction in a commodity interest and any rela… | ||||||
| 17:17:1.0.1.1.1.0.5.35 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.36 Record of securities and property received from customers. | CFTC | [77 FR 66328, Nov. 2, 2012] | (a) Each futures commission merchant and each retail foreign exchange dealer shall maintain, as provided in § 1.31, a record of all securities and property received from customers or retail forex customers in lieu of money to margin, purchase, guarantee, or secure the commodity interests of such customers or retail forex customers. Such record shall show separately for each customer or retail forex customer: A description of the securities or property received; the name and address of such customer or retail forex customer; the dates when the securities or property were received; the identity of the depositories or other places where such securities or property are segregated or held; the dates of deposits and withdrawals from such depositories; and the dates of return of such securities or property to such customer or retail forex customer, or other disposition thereof, together with the facts and circumstances of such other disposition. In the event any futures commission merchant deposits with a derivatives clearing organization, directly or with a bank or trust company acting as custodian for such derivatives clearing organization, securities and/or property which belong to a particular customer, such futures commission merchant shall obtain written acknowledgment from such derivatives clearing organization that it was informed that such securities or property belong to customers of the futures commission merchant making the deposit. Such acknowledgment shall be retained as provided in § 1.31. (b) Each derivatives clearing organization which receives from members securities or property belonging to particular customers of such members in lieu of money to margin, purchase, guarantee, or secure the commodity interests of such customers, or receives notice that any such securities or property have been received by a bank or trust company acting as custodian for such derivatives clearing organization, shall maintain, as provided in § 1.31, a record which will show separately for each member, the dates when such … | ||||||
| 17:17:1.0.1.1.1.0.5.36 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.37 Customer's name, address, and occupation recorded; record of guarantor or controller of account. | CFTC | [77 FR 66328, Nov. 2, 2012] | (a) Each futures commission merchant, retail foreign exchange dealer, introducing broker, and member of a contract market shall keep a record in permanent form which shall show for each commodity interest account carried or introduced by it the true name and address of the person for whom such account is carried or introduced and the principal occupation or business of such person as well as the name of any other person guaranteeing such account or exercising any trading control with respect to such account. For each such commodity option account, the records kept by such futures commission merchant, introducing broker, and member of a contract market must also show the name of the person who has solicited and is responsible for each customer's account or assign account numbers in such a manner to identify that person. (b) As of the close of the market each day, each futures commission merchant which carries an account for another futures commission merchant, foreign broker (as defined in § 15.00 of this chapter), member of a contract market, or other person, on an omnibus basis shall maintain a daily record for each such omnibus account of the total open long contracts and the total open short contracts in each future and in each swap and, for commodity option transactions, the total open put options purchased, the total open put options granted, the total open call options purchased, and the total open call options granted for each commodity option expiration date. (c) Each designated contract market and swap execution facility shall keep a record in permanent form, which shall show the true name, address, and principal occupation or business of any foreign trader executing transactions on the facility or exchange. In addition, upon request, a designated contract market or swap execution facility shall provide to the Commission information regarding the name of any person guaranteeing such transactions or exercising any control over the trading of such foreign trader. (d) Paragraph (c) of this section shall … | ||||||
| 17:17:1.0.1.1.1.0.5.37 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.38 Execution of transactions. | CFTC | [46 FR 54523, Nov. 3, 1981, as amended at 46 FR 63035, Dec. 30, 1981] | (a) Competitive execution required; exceptions. All purchases and sales of any commodity for future delivery, and of any commodity option, on or subject to the rules of a contract market shall be executed openly and competitively by open outcry or posting of bids and offers or by other equally open and competitive methods, in the trading pit or ring or similar place provided by the contract market, during the regular hours prescribed by the contract market for trading in such commodity or commodity option: Provided, however, That this requirement shall not apply to transactions which are executed non-competitively in accordance with written rules of the contract market which have been submitted to and approved by the Commission, specifically providing for the non-competitive execution of such transactions. (b) Noncompetitive trades; exchange of futures, etc.; requirements. Every person handling, executing, clearing, or carrying trades, transactions or positions which are not competitively executed, including transfer trades or office trades, or trades involving the exchange of futures for cash commodities or the exchange of futures in connection with cash commodity transactions, shall identify and mark by appropriate symbol or designation all such transactions or contracts and all orders, records, and memoranda pertaining thereto. | ||||||
| 17:17:1.0.1.1.1.0.5.38 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.39 Simultaneous buying and selling orders of different principals; execution of, for and between principals. | CFTC | [41 FR 3194, Jan. 21, 1976, as amended at 46 FR 63035, Dec. 30, 1981; 47 FR 57008, Dec. 22, 1982; 56 FR 12344, Mar. 25, 1991; 59 FR 5525, Feb. 7, 1994; 77 FR 66329, Nov. 2, 2012] | (a) Conditions and requirements. A member of a contract market or a swap execution facility who shall have at the same time both buying and selling orders of different principals for the same swap, commodity for future delivery in the same delivery month or the same option (both puts or both calls, with the same underlying contract for future delivery or the same underlying commodity, expiration date and strike price) may execute such orders for and directly between such principals at the market price, if in conformity with written rules of such contract market or swap execution facility which have been approved by or self-certified to the Commission, and: (1)(i) When trading is conducted in a trading pit or ring, such orders are first offered openly and competitively by open outcry in such trading pit or ring (A) by both bidding and offering at the same price, and neither such bid nor offer is accepted, or (B) by bidding and offering to a point where such offer is higher than such bid by not more than the minimum permissible price fluctuation applicable to such futures contract or commodity option on such contract market, and neither such bid nor offer is accepted; or (ii) When in non-pit trading in swaps or contracts of sale for future delivery, bids and offers are posted on a board, such member: (A) Pursuant to such buying order posts a bid on the board and, incident to the execution of such selling order, accepts such bid and all other bids posted at equal to or higher than the bid posted by him; or (B) Pursuant to such selling order posts an offer on the board and, incident to the execution of such buying order, accepts such offer and all other offers posted at prices equal to or lower than the offer posted by him; (2) Such member executes such orders in the presence of an official representative of such contract market or swap execution facility designated to observe such transactions and, by appropriate descriptive words or symbol, clearly identifies all such transactions on his trading card or othe… | ||||||
| 17:17:1.0.1.1.1.0.6.39 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.40 Crop, market information letters, reports; copies required. | CFTC | [77 FR 66329, Nov. 2, 2012] | Each futures commission merchant, each retail foreign exchange dealer, each introducing broker, and each member of a contract market or a swap execution facility shall, upon request, furnish or cause to be furnished to the Commission a true copy of any letter, circular, telecommunication, or report published or given general circulation by such futures commission merchant, retail foreign exchange dealer, introducing broker, member or eligible contract participant which concerns crop or market information or conditions that affect or tend to affect the price of any commodity, including any exchange rate, and the true source of or authority for the information contained therein. | ||||||
| 17:17:1.0.1.1.1.0.6.40 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.41 Designation of hedging accounts. | CFTC | [86 FR 19419, Apr. 13, 2021] | (a) A futures commission merchant must provide an opportunity to each customer, when it first opens a futures account, foreign futures account or cleared swaps account with such futures commission merchant, to designate such account as a hedging account. The futures commission merchant must indicate prominently in the accounting records in which it maintains open trade balances whether, for each customer account, the account is designated as a hedging account. (b) A futures commission merchant may permit the customer to open an account as a hedging account only if it obtains the customer's written representation that the customer's trading of futures or options on futures, foreign futures or options on foreign futures, or cleared swaps (as applicable) in the account constitutes hedging as such term may be defined under any relevant Commission regulation or rule of any clearing organization, designated contract market, swap execution facility or foreign board of trade. (c) The requirements set forth in paragraphs (a) and (b) of this section do not apply to a futures commission merchant with respect to any commodity contract account that the futures commission merchant opened prior to May 13, 2021. The futures commission merchant may continue to designate as a hedging account any account with respect to which the futures commission merchant received written hedging instructions from the customer in accordance with former § 190.06(d) of this chapter. (d) A futures commission merchant may designate an existing futures account, foreign futures account or cleared swaps account of a particular customer as a hedging account, provided that it has obtained the representation set out in paragraph (b) of this section from such customer. | ||||||
| 17:17:1.0.1.1.1.0.6.41 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.42 Delivery accounts. | CFTC | [86 FR 19419, Apr. 13, 2021] | In connection with the making or taking of delivery of a commodity under a commodity contract whose terms require settlement via physical delivery, if a futures commission merchant facilitates or effects the transfer of the physical delivery property and payment therefor on behalf of the customer, and does so outside the futures account, foreign futures account or cleared swaps account in which the commodity contract was held, the futures commission merchant must do so in a delivery account, provided, however, that when the commodity subject to delivery is a security, a futures commission merchant may, consistent with any applicable regulatory requirements, do so in a securities account. | ||||||
| 17:17:1.0.1.1.1.0.6.42 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.43 Letters of credit as collateral. | CFTC | [86 FR 19419, Apr. 13, 2021] | A futures commission merchant shall not accept a letter of credit as collateral unless such letter of credit may be exercised, through its stated date of expiry, under the following conditions, regardless of whether the customer posting that letter of credit is in default in any obligation: (a) In the event that an order for relief under chapter 7 of the Bankruptcy Code or a protective decree pursuant to section 5(b)(1) of SIPA is entered with respect to the futures commission merchant, or if the FDIC is appointed as receiver for the futures commission merchant pursuant to 12 U.S.C. 5382(a), the trustee for that futures commission merchant (or, as applicable, FDIC) may draw upon such letter of credit, in full or in part, in accordance with § 190.04(d)(3) of this chapter. (b) If the letter of credit is passed through to a clearing organization, then in the event that an order for relief under chapter 7 of the Bankruptcy Code is entered with respect to the clearing organization, or if the FDIC is appointed as receiver for the clearing organization pursuant to 12 U.S.C. 5382(a), the trustee for that clearing organization (or, as applicable, FDIC) may draw upon such letter of credit, in full or in part, in accordance with § 190.04(d)(3) of this chapter. (c) A futures commission merchant shall not accept a letter of credit from a customer as collateral if it has any agreement with the customer that is inconsistent with this section. | ||||||
| 17:17:1.0.1.1.1.0.6.43 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.44 Margin adequacy and treatment of separate accounts. | CFTC | [90 FR 7934, Jan. 22, 2025] | (a) Definitions. These following definitions apply only for purposes of this section, except to the extent explicitly noted: Account means a futures account as defined in § 1.3, a Cleared Swaps Customer Account as defined in § 1.3, or a 30.7 account as defined in § 30.1 of this chapter. Business day has the meaning set forth in § 1.3, with the clarification that “holiday” has the meaning defined in paragraph (a) of this section. Holiday means Federal holidays as established by 5 U.S.C. 6103. One business day margin call means a margin call that is issued and met in accordance with the requirements of paragraph (f) of this section. Ordinary course of business means the operation of the futures commission merchant's business relationship with its separate account customer absent the occurrence of one or more of the events specified in paragraph (e) of this section. Separate account means any one of multiple accounts of the same separate account customer that are carried by the same futures commission merchant. Separate account customer means a customer for which the futures commission merchant has made the election set forth in paragraph (d) of this section. Undermargined amount for an account means the amount, if any, by which the customer margin requirements with respect to all products held in that account exceed the net liquidating value plus the margin deposits currently remaining in that account. For purposes of this definition, “margin requirements” shall mean the level of maintenance margin or performance bond required for the positions in the account by the applicable exchanges or clearing organizations. Market risk collateral haircuts based on Rule 15c3-1 of the Securities and Exchange Commission (17 CFR 240.15c3-1) and § 1.17(c)(5) shall be applied to the value of the margin deposits held by a futures commission merchant. With respect to positions for which maintenance margin is not specified, “margin requirements” shall refer to the clearing organization margin requirements applicable … | ||||||
| 17:17:1.0.1.1.1.0.6.44 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.45 [Reserved] | CFTC | ||||||||
| 17:17:1.0.1.1.1.0.6.45 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.46 Application and closing out of offsetting long and short positions. | CFTC | [41 FR 3194, Jan. 21, 1976] | (a) Application of purchases and sales. (1) Except with respect to purchases or sales which are for omnibus accounts, or where the customer or account controller has instructed otherwise, any futures commission merchant who, on or subject to the rules of a designated contract market: (i) Purchases any commodity for future delivery for the account of any customer when the account of such customer at the time of such purchase has a short position in the same future of the same commodity on the same market; (ii) Sells any commodity for future delivery for the account of any customer when the account of such customer at the time of such sale has a long position in the same future of the same commodity on the same market; (iii) Purchases a put or call option for the account of any customer when the account of such customer at the time of such purchase has a short put or call option position with the same underlying futures contract or same underlying commodity, strike price, expiration date and contract market as that purchased; or (iv) Sells a put or call option for the account of any customer when the account of such customer at the time of such sale has a long put or call option position with the same underlying futures contract or same underlying commodity, strike price, expiration date and contract market as that sold—shall on the same day apply such purchase or sale against such previously held short or long futures or option position, as the case may be, and shall, for futures transactions, promptly furnish such customer a statement showing the financial result of the transactions involved and, if applicable, that the account was introduced to the futures commission merchant by an introducing broker and the names of the futures commission merchant and introducing broker. (2) Any futures commission merchant or retail foreign exchange dealer who: (i) Engages in a retail forex transaction involving the purchase of any currency for the account of any retail forex customer when the account of such retail for… | ||||||
| 17:17:1.0.1.1.1.0.6.46 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | §§ 1.47-1.48 [Reserved] | CFTC | ||||||||
| 17:17:1.0.1.1.1.0.6.47 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.49 Denomination of customer funds and location of depositories. | CFTC | [68 FR 5551, Feb. 4, 2003, as amended at 76 FR 44264, July 25, 2011; 77 FR 66330, Nov. 2, 2012] | (a) Definitions. For purposes of this section: (1) Money center country. This term means Canada, France, Italy, Germany, Japan, and the United Kingdom. (2) Money center currency. This term means the currency of any money center country and the Euro. (b) Permissible denominations of obligations. (1) Subject to the terms and conditions set forth in this section, a futures commission merchant's obligations to a customer shall be denominated: (i) In the United States dollar; (ii) In a currency in which funds were deposited by the customer or were converted at the request of the customer, to the extent of such deposits and conversions; or (iii) In a currency in which funds have accrued to the customer as a result of trading conducted on a designated contract market, to the extent of such accruals. (2)(i) A futures commission merchant shall prepare and maintain a written record of each transaction converting customer funds from one currency to another. (ii) A written record prepared under paragraph (b)(2)(i) of this section must include the date the transaction was executed, the currencies converted, the amount converted, and the resulting amount. (iii) The information required under paragraph (b)(2)(ii) of this section must be provided to the customer upon the customer's request. (c) Permissible locations of depositories. (1) Unless a customer provides instructions to the contrary, a futures commission merchant or a derivatives clearing organization may hold customer funds: (i) In the United States; (ii) In a money center country; or (iii) In the country of origin of the currency. (2) A futures commission merchant or derivatives clearing organization may hold customer funds outside the United States, in a jurisdiction that is not a money center country, or the country of origin of the currency only to the extent authorized by the customer, provided, that the futures commission merchant or derivatives clearing organization must make and maintain a written record of such authorization. Notwiths… | ||||||
| 17:17:1.0.1.1.1.0.6.48 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | §§ 1.50-1.51 [Reserved] | CFTC | ||||||||
| 17:17:1.0.1.1.1.0.6.49 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.52 Self-regulatory organization adoption and surveillance of minimum financial requirements. | CFTC | [78 FR 68638, Nov. 14, 2013, as amended at 83 FR 7995, Feb. 23, 2018; 84 FR 12892, Apr. 3, 2019] | (a) For purposes of this section, the following terms are defined as follows: (1) Examinations expert is defined as a Nationally recognized accounting and auditing firm with substantial expertise in audits of futures commission merchants, risk assessment and internal control reviews, and is an accounting and auditing firm that is acceptable to the Commission; and (2) Self-regulatory organization means a contract market (as defined in § 1.3) or a registered futures association under section 17 of the Act. The term “self-regulatory organization” for purpose of this section does not include a swap execution facility (as defined in § 1.3). (b)(1) Each self-regulatory organization must adopt rules prescribing minimum financial and related reporting requirements for members who are registered futures commission merchants or registered retail foreign exchange dealers. Each self-regulatory organization other than a contract market must adopt rules prescribing minimum financial and related reporting requirements for members who are registered introducing brokers. The self-regulatory organization's minimum financial and related reporting requirements must be the same as, or more stringent than, the requirements contained in §§ 1.10 and 1.17, for futures commission merchants and introducing brokers, and §§ 5.7 and 5.12 of this chapter for retail foreign exchange dealers; provided, however, that a self-regulatory organization may permit its member registrants that are registered with the Securities and Exchange Commission as securities brokers or dealers to file (in accordance with § 1.10(h)) a copy of their Financial and Operational Combined Uniform Single Report under the Securities Exchange Act of 1934 (“FOCUS Report”), Part II, Part IIA, or Part II CSE, as applicable, in lieu of Form 1-FR; provided, further, that such self-regulatory organization must require such member registrants to provide all information in Form 1-FR that is not included in the FOCUS Report Part II, Part IIA, or Part CSE provided by such … | ||||||
| 17:17:1.0.1.1.1.0.6.50 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.53 [Reserved] | CFTC | ||||||||
| 17:17:1.0.1.1.1.0.6.51 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.54 Contract market rules submitted to and approved or not disapproved by the Secretary of Agriculture. | CFTC | [45 FR 2314, Jan. 11, 1980] | Notwithstanding any provision of these rules, any bylaw, rule, regulation, or resolution of a contract market that was submitted to the Secretary of Agriculture pursuant or § 1.38(a) or § 1.39(a) of these rules, and was either approved by the Secretary or not disapproved by him, as of April 21, 1975, shall continue in full force and effect unless and until disapproved, altered or supplemented by or with the approval of the Commission. The adoption of this rule does not constitute approval by the Commission of any contract market bylaw, rule, regulation or resolution. | ||||||
| 17:17:1.0.1.1.1.0.6.52 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.55 Public disclosures by futures commission merchants. | CFTC | [43 FR 31890, July 24, 1978] | (a)(1) Except as provided in 1.65, no futures commission merchant, or in the case of an introduced account no introducing broker, may open a commodity futures account for a customer, other than for a customer specified in paragraph (f) of this section, unless the futures commission merchant or introducing broker first: (i) Furnishes the customer with a separate written disclosure statement containing only the language set forth in paragraph (b) of this section (except for nonsubstantive additions such as captions) or as otherwise approved under paragraph (c) of this section; Provided, however, that the disclosure statement may be attached to other documents as the cover page or the first page of such documents and as the only material on such page; and (ii) Receives from the customer an acknowledgment signed and dated by the customer that he received and understood the disclosure statement. (b) The language set forth in the written disclosure document required by paragraph (a) of this section shall be as follows: Risk Disclosure Statement The risk of loss in trading commodity futures contracts can be substantial. You should, therefore, carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should be aware of the following points: (1) You may sustain a total loss of the funds that you deposit with your broker to establish or maintain a position in the commodity futures market, and you may incur losses beyond these amounts. If the market moves against your position, you may be called upon by your broker to deposit a substantial amount of additional margin funds, on short notice, in order to maintain your position. If you do not provide the required funds within the time required by your broker, your position may be liquidated at a loss, and you will be liable for any resulting deficit in your account. (2) The funds you deposit with a futures commission merchant for trading futures positions are not protected by insurance in the event of… | ||||||
| 17:17:1.0.1.1.1.0.6.53 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.56 Prohibition of guarantees against loss. | CFTC | [46 FR 62844, Dec. 29, 1981, as amended at 48 FR 35291, Aug. 3, 1983] | (a) [Reserved] (b) No futures commission merchant or introducing broker may in any way represent that it will, with respect to any commodity interest in any account carried by the futures commission merchant for or on behalf of any person: (1) Guarantee such person against loss; (2) Limit the loss of such person; or (3) Not call for or attempt to collect initial and maintenance margin as established by the rules of the applicable board of trade. (c) No person may in any way represent that a futures commission merchant or introducing broker will engage in any of the acts or practices described in paragraph (b) of this section. (d) This section shall not be construed to prevent a futures commission merchant or introducing broker from: (1) Assuming or sharing in the losses resulting from an error or mishandling of an order; or (2) Participating as a general partner in a commodity pool which is a limited partnership. (e) This section shall not affect any guarantee entered into prior to January 28, 1982, but this section shall apply to any extension, modification or renewal thereof entered into after such date. | ||||||
| 17:17:1.0.1.1.1.0.6.54 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.57 Operations and activities of introducing brokers. | CFTC | [48 FR 35291, Aug. 3, 1983, as amended at 57 FR 23143, June 2, 1992; 77 FR 66330, Nov. 2, 2012] | (a) Each introducing broker must: (1) Open and carry each customer's account with a carrying futures commission merchant on a fully-disclosed basis: Provided, however, That an introducing broker which has entered into a guarantee agreement with a futures commission merchant in accordance with the provisions of § 1.10(j) must open and carry such customer's account with such guarantor futures commission merchant on a fully-disclosed basis; and (2) Transmit promptly for execution all customer orders to: (i) A carrying futures commission merchant; or (ii) A floor broker, if the introducing broker identifies its carrying futures commission merchant and that carrying futures commission merchant is also the clearing member with respect to the customer's order. (b) An introducing broker may not carry proprietary accounts, nor may an introducing broker carry accounts in foreign futures. (c) An introducing broker may not accept any money, securities or property (or extend credit in lieu thereof) to margin, guarantee or secure any trades or contracts of customers, or any money, securities or property accruing as a result of such trades or contracts: Provided, however, That an introducing broker may deposit a check in a qualifying account or forward a check drawn by a customer if: (1) The futures commission merchant carrying the customer's account authorizes the introducing broker, in writing, to receive a check in the name of the futures commission merchant, and the introducing broker retains such written authorization in its files in accordance with § 1.31; (2) The check is payable to the futures commission merchant carrying the customer's account; (3) The check is deposited by the introducing broker, on the same day upon which it is received, in a bank or trust company located in the United States in a qualifying account, or the check is mailed or otherwise transmitted by the introducing broker to the futures commission merchant on the same day upon which it is received; (4) For purposes of this paragraph (c… | ||||||
| 17:17:1.0.1.1.1.0.6.55 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.58 Gross collection of exchange-set margins. | CFTC | [90 FR 7937, Jan. 22, 2025] | (a) Each futures commission merchant which carries a futures, options on futures, or Cleared Swaps position for another futures commission merchant or for a foreign broker on an omnibus basis must collect, and each futures commission merchant and foreign broker for which an omnibus account is being carried must deposit, initial and maintenance margin on each position so carried at a level no less than that established for customer accounts by the rules of the applicable contract market or other board of trade. If the contract market or other board of trade does not specify any such margin level, the level required will be that specified by the relevant clearing organization. (b) If the futures commission merchant which carries a futures, options on futures, or Cleared Swaps position for another futures commission merchant or for a foreign broker on an omnibus basis allows a position to be margined as a spread position or as a hedged position in accordance with the rules of the applicable contract market, the carrying futures commission merchant must obtain and retain a written representation from the futures commission merchant or from the foreign broker for which the omnibus account is being carried that each such position is entitled to be so margined. (c) Where a futures commission merchant has established an omnibus account that is carried by another futures commission merchant, and the depositing futures commission merchant has elected to treat the separate accounts of a futures customer or a Cleared Swaps Customer as accounts of separate entities for purposes of § 1.44, the depositing futures commission merchant shall calculate the required initial and maintenance margin for purposes of paragraph (a) of this section separately for each such separate account. | ||||||
| 17:17:1.0.1.1.1.0.6.56 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.59 Activities of self-regulatory organization employees, governing board members, committee members, and consultants. | CFTC | [58 FR 54973, Oct. 25, 1993, as amended at 65 FR 47847, Aug. 4, 2000; 77 FR 66330, Nov. 2, 2012; 83 FR 7995, Feb. 23, 2018; 85 FR 4850, Jan. 27, 2020] | (a) Definitions. For purposes of this section: (1) Self-regulatory organization means a “self-regulatory organization,” as defined in § 1.3. (2) Governing board member means a member, or functional equivalent thereof, of the board of governors of a self-regulatory organization. (3) Committee member means a member, or functional equivalent thereof, of any committee of a self-regulatory organization. (4) Employee means any person hired or otherwise employed on a salaried or contract basis by a self-regulatory organization, but does not include: (i) Any governing board member compensated by a self-regulatory organization solely for governing board activities; or (ii) Any committee member compensated by a self-regulatory organization solely for committee activities; or (iii) Any consultant hired by a self-regulatory organization. (5) Material information means information which, if such information were publicly known, would be considered important by a reasonable person in deciding whether to trade a particular commodity interest on a contract market or a swap execution facility, or to clear a swap contract through a derivatives clearing organization. As used in this section, “material information” includes, but is not limited to, information relating to present or anticipated cash positions, commodity interests, trading strategies, the financial condition of members of self-regulatory organizations or members of linked exchanges or their customers, or the regulatory actions or proposed regulatory actions of a self-regulatory organization or a linked exchange. (6) Non-public information means information which has not been disseminated in a manner which makes it generally available to the trading public. (7) Linked exchange means: (i) Any board of trade, exchange or market outside the United States, its territories or possessions, which has an agreement with a contract market or swap execution facility in the United States that permits positions in a commodity interest which have been esta… | ||||||
| 17:17:1.0.1.1.1.0.6.57 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.60 Pending legal proceedings. | CFTC | [49 FR 17750, Apr. 25, 1984] | (a) Every contract market shall submit to the Commission copies of the complaint, any dispositive or partially dispositive decision, any notice of appeal filed concerning such decisions and such further documents as the Commission may thereafter request filed in any material legal proceeding to which the contract market is a party or its property or assets is subject. (b) Every futures commission merchant shall sumit to the Commission copies of any dispositive or partially dispositive decision for which a notice of appeal has been filed, the notice of appeal and such further documents as the Commission may thereafter request filed in any material legal proceeding to which the futures commission merchant is a party or its property or assets is subjects. (c) Every contract market shall submit to the Commission copies of the complaint, any dispositive or partially dispositive decision, any notice of appeal filed concerning such decisions and such further documents as the Commission may thereafter request filed in any material legal proceeding instituted against any officer, director, or other official of the contract market arising from conduct in such person's capacity as a contract market official and alleging violations of: (1) The act or any rule, regulation, or order thereunder; (2) the constitution, bylaws or rules of the contract market; or (3) the applicable provisions of state law relating to the duties of officers, directors, or other officials of business organizations. (d) Every futures commission merchant shall submit to the Commission copies of any dispositive or partially dispositive decision concerning which a notice of appeal has been filed, the notice of appeal, and such further documents as the Commission may thereafter request filed in any material legal proceeding instituted against any person who is a principal of the futures commission merchant (as that term is defined in § 3.1(a) of this chapter) arising from conduct in such person's capacity as a principal of the futures commission mer… | ||||||
| 17:17:1.0.1.1.1.0.6.58 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | §§ 1.61-1.62 [Reserved] | CFTC | ||||||||
| 17:17:1.0.1.1.1.0.6.59 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.63 Service on self-regulatory organization governing boards or committees by persons with disciplinary histories. | CFTC | [55 FR 7890, Mar. 6, 1990, as amended at 58 FR 37653, July 13, 1993; 64 FR 23, Jan. 4, 1999; 77 FR 66331, Nov. 2, 2012; 83 FR 7995, Feb. 23, 2018; 85 FR 4850, Jan. 27, 2020] | (a) Definitions. For purposes of this section: (1) Self-regulatory organization means a “self-regulatory organization,” as defined in § 1.3, except as defined in paragraph (b)(6) of this section. (2) Disciplinary committee means any person or committee of persons, or any subcommittee thereof, that is authorized by a self-regulatory organization to issue disciplinary charges, to conduct disciplinary proceedings, to settle disciplinary charges, to impose disciplinary sanctions or to hear appeals thereof. (3) Arbitration panel means any person or panel empowered by a self-regulatory organization to arbitrate disputes involving such organization's members or their customers. (4) Oversight panel means any panel authorized by a self-regulatory organization to review, recommend or establish policies or procedures with respect to the self-regulatory organization's surveillance, compliance, rule enforcement or disciplinary responsibilities. (5) Final decision means: (i) A decision of a self-regulatory organization which cannot be further appealed within the self-regulatory organization, is not subject to the stay of the Commission or a court of competent jurisdiction, and has not been reversed by the Commission or any court of competent jurisdiction; or, (ii) Any decision by an administrative law judge, a court of competent jurisdiction or the Commission which has not been stayed or reversed. (6) Disciplinary offense means: (i) Any violation of the rules of a self-regulatory organization except those rules related to (A) Decorum or attire, (B) Financial requirements, or (C) Reporting or recordkeeping unless resulting in fines aggregating more than $5,000 within any calendar year; (ii) Any rule violation described in subparagraphs (a)(6)(i) (A) through (C) of this regulation which involves fraud, deceit or conversion or results in a suspension or expulsion; (iii) Any violation of the Act or the regulations promulgated thereunder; or, (iv) Any failure to exercise supervisory responsibility with … | ||||||
| 17:17:1.0.1.1.1.0.6.60 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.64 Composition of various self-regulatory organization governing boards and major disciplinary committees. | CFTC | [58 FR 37654, July 13, 1993; 59 FR 5082, Feb. 3, 1994, as amended at 83 FR 7995, Feb. 23, 2018; 85 FR 4850, Jan. 27, 2020] | (a) Definitions. For purposes of this section: (1) Self-regulatory organization means “self-regulatory organization,” as defined in § 1.3. (2) Major disciplinary committee means a committee of persons who are authorized by a self-regulatory organization to conduct disciplinary hearings, to settle disciplinary charges, to impose disciplinary sanctions or to hear appeals thereof in cases involving any violation of the rules of the self-regulatory organization except those which: (i) Are related to: (A) Decorum or attire, (B) Financial requirements, or (C) Reporting or recordkeeping; and, (ii) Do not involve fraud, deceit or conversion. (3) Regular voting member of a governing board means any person who is eligible to vote routinely on matters being considered by the board and excludes those members who are only eligible to vote in the case of a tie vote by the board. (4) Membership interest (i) In the case of a contract market, each of the following will be considered a different membership interest: (A) Floor brokers, (B) Floor traders, (C) Futures commission merchants, (D) Producers, consumers, processors, distributors, and merchandisers of commodities traded on the particular contract market, (E) Participants in a variety of pits or principal groups of commodities traded on the particular contract market; and, (F) Other market users or participants; except that with respect to paragraph (c)(2) of this section, a contract market may define membership interests according to the different pits or principal groups of commodities traded on the contract market. (ii) In the case of a registered futures association, each of the following will be considered a different membership interest: (A) Futures commission merchants, (B) Introducing brokers, (C) Commodity pool operators, (D) Commodity trading advisors; and, (E) Associated persons, except that under paragraph (c)(3) of this section an associated person will be deemed to represent the same membership interest as its sponsor. (b) Each s… | ||||||
| 17:17:1.0.1.1.1.0.6.61 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.65 Notice of bulk transfers and disclosure obligations to customers. | CFTC | [58 FR 17504, Apr. 5, 1993, as amended at 60 FR 49334, Sept. 25, 1995; 63 FR 8571, Feb. 20, 1998; 67 FR 62351, Oct. 7, 2002; 78 FR 22419, Apr. 16, 2013; 85 FR 57547, Sept. 15, 2020; 86 FR 19420, Apr. 13, 2021] | (a) Notice and Disclosure to Customers. (1) Prior to transferring a customer account to another futures commission merchant or introducing broker other than at the request of the customer, a futures commission merchant or introducing broker must obtain the customer's specific consent to the transfer. (2) If the customer account agreement contains a valid consent by the customer to prospective transfers of the account, the transferor futures commission merchant or introducing broker may transfer the account if the customer is provided with written notice of, and a reasonable opportunity to object to, the transfer and the customer has not asserted an objection to the transfer or given other instructions as to the disposition of the account. The notice to the customer must include: (i) A clear statement of the reason(s) for the transfer, the name, address and telephone number of the proposed transferee firm and other information material to the transfer; (ii) A statement that the customer is not required to accept the proposed transfer and may direct the transfer or firm to liquidate the account or ransfer the account to a firm of the customer's selection; (iii) The name, telephone number and address of a contact person at the transferor firm to whom the customer may give instructions as to the disposition of the account; (iv) Notice that a failure to respond to the letter within a specified time period, which must be a reasonable period in the circumstances, will be deemed consent to the transfer; and (v) A clear statement as to the means by which the customer may object to or otherwise respond to the notice of proposed transfer. (3) Where customer accounts are transferred to a futures commission merchant or introducing broker, other than at the customer's request, the transferee introducing broker or futures commission merchant must provide each customer whose account is transferred with the risk disclosure statements and acknowledgments required by § 1.55 (domestic futures and foreign futures and options… | ||||||
| 17:17:1.0.1.1.1.0.6.62 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.66 No-action positions with respect to floor traders. | CFTC | [58 FR 19589, Apr. 15, 1993; 58 FR 21776, Apr. 23, 1993, as amended at 60 FR 54801, Oct. 26, 1995; 67 FR 62351, Oct. 7, 2002; 78 FR 22419, Apr. 16, 2013] | (a) Notwithstanding any other provision of law, if a contract market submits to the National Futures Association by April 26, 1993 a list of floor traders who were granted trading privileges on that contract market on or before April 26, 1993, and whose floor trading privileges remain in effect, which includes the name, date of birth and social security number of such floor traders, as well as facts regarding such floor traders which are set forth as statutory disqualifications in section 8a(2) of the Act if the contract market knows of such facts, and such list is signed by the chief operating officer of the contract market, the Commission will not commence an enforcement proceeding against a floor trader on that list based solely upon the floor trader's failure to register or receive a temporary license under section 4f of the Act and § 3.11 of this chapter, nor will the Commission commence an enforcement proceeding against the contract market under § 1.62 for failing to bar such floor trader from operating as such: Provided, however, That for those floor traders listed as to whom the contract market knows of facts set forth as statutory disqualifications in section 8a(2) of the Act, the no-action position contained in paragraph (a) of this section will only apply if the contract market submits a supplemental statement signed by the chief operating officer of the contract market stating that, in light of the Congressional mandate requiring registration of floor traders under the Act, the contract market acknowledges its responsibility to take affirmative action to conduct appropriate surveillance of such floor traders. These no-action positions shall expire upon the floor's trader being granted or denied registration under the Act, or on June 11, 1993, whichever comes earliest: Provided, however, That if the floor trader files an application for registration in accordance with § 3.11 of this chapter with the National Futures Association by June 11, 1993, the no-action positions for the floor trader and the … | ||||||
| 17:17:1.0.1.1.1.0.6.63 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.67 Notification of final disciplinary action involving financial harm to a customer. | CFTC | [77 FR 66331, Nov. 2, 2012] | (a) Definitions. For purposes of this section: Final disciplinary action means any decision by or settlement with a contract market or swap execution facility in a disciplinary matter which cannot be further appealed at the contract market or swap execution facility, is not subject to the stay of the Commission or a court of competent jurisdiction, and has not been reversed by the Commission or any court of competent jurisdiction. (b) Upon any final disciplinary action in which a contract market or swap execution facility finds that a member has committed a rule violation that involved a transaction for a customer, whether executed or not, and that resulted in financial harm to the customer: (1)(i) The contract market or swap execution facility shall promptly provide written notice of the disciplinary action to the futures commission merchant or other registrant; and (ii) A futures commission merchant or other registrant that receives a notice, under paragraph (b)(1)(i) of this section shall promptly provide written notice of the disciplinary action to the customer as disclosed on its books and records. If the customer is another futures commission merchant or other registrant, such futures commission merchant or other registrant shall promptly provide notice to the customer. (2) A written notice required by paragraph (b)(1) of this section must include the principal facts of the disciplinary action and a statement that the contract market or swap execution facility has found that the member has committed a rule violation that involved a transaction for the customer, whether executed or not, and that resulted in financial harm to the customer. For the purposes of this paragraph, a notice which includes the information listed in § 9.11(b) of this chapter shall be deemed to include the principal facts of the disciplinary action thereof. | ||||||
| 17:17:1.0.1.1.1.0.6.64 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.68 [Reserved] | CFTC | ||||||||
| 17:17:1.0.1.1.1.0.6.65 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.69 Voting by interested members of self-regulatory organization governing boards and various committees. | CFTC | [64 FR 23, Jan. 4, 1999; 64 FR 3340, Jan. 21, 1999, as amended at 83 FR 7995, Feb. 23, 2018; 85 FR 4850, Jan. 27, 2020] | (a) Definitions. For purposes of this section: (1) Disciplinary committee means any person or committee of persons, or any subcommittee thereof, that is authorized by a self-regulatory organization to issue disciplinary charges, to conduct disciplinary proceedings, to settle disciplinary charges, to impose disciplinary sanctions, or to hear appeals thereof in cases involving any violation of the rules of the self-regulatory organization except those cases where the person or committee is authorized summarily to impose minor penalties for violating rules regarding decorum, attire, the timely submission of accurate records for clearing or verifying each day's transactions or other similar activities. (2) Family relationship of a person means the person's spouse, former spouse, parent, stepparent, child, stepchild, sibling, stepbrother, stepsister, grandparent, grandchild, uncle, aunt, nephew, niece or in-law. (3) Governing board means a self-regulatory organization's board of directors, board of governors, board of managers, or similar body, or any subcommittee thereof, duly authorized, pursuant to a rule of the self-regulatory organization that has been approved by the Commission or has become effective pursuant to either Section 5a(a)(12)(A) or 17(j) of the Act to take action or to recommend the taking of action on behalf of the self-regulatory organization. (4) Oversight panel means any panel, or any subcommittee thereof, authorized by a self-regulatory organization to recommend or establish policies or procedures with respect to the self-regulatory organization's surveillance, compliance, rule enforcement, or disciplinary responsibilities. (5) Member's affiliated firm is a firm in which the member is a “principal,” as defined in § 3.1(a), or an employee. (6) Named party in interest means a person or entity that is identified by name as a subject of any matter being considered by a governing board, disciplinary committee, or oversight panel. (7) Self-regulatory organization means a “self-r… | ||||||
| 17:17:1.0.1.1.1.0.6.66 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.70 Notification of State enforcement actions brought under the Commodity Exchange Act. | CFTC | [48 FR 49503, Oct. 26, 1983, as amended at 60 FR 49334, Sept. 25, 1995] | (a) Immediately upon instituting any proceeding in any Federal district court for violation of the Act or any rule, regulation or order thereunder against any person who is subject to suit pursuant to sections 6d(1)-(6) of the Act, the authorized State official of the State instituting the proceeding shall submit to the Commission a copy of the complaint filed in the proceeding, together with a written notice which: (1) Indicates the names of parties to the proceeding; (2) Indicates the provision of the Act or the rule, regulation or order thereunder which is alleged to have been violated. The complaint and written notice must be sent by first-class U.S. mail or personally delivered to the Secretary, at the Commission's Washington, DC headquarters. (b) Prior to instituting any proceeding in a State court for the alleged violation of any antifraud provisions of the Act or any antifraud rule, regulation or order thereunder against any person registered with the Commission who is subject to suit pursuant to the provisions of section 6d(8) of the Act, the authorized State official of the State intending to institute the proceeding shall submit to the Commission written notice which: (1) Indicates the names of parties to the proposed proceeding; (2) Indicates the provision of the Act or the rule, regulation or order thereunder which will be alleged to have been violated; (3) Contains a brief statement of the facts on which the proposed action will be based. Except as provided in paragraph (c), this written notice must be sent by first-class U.S. mail or personally delivered to the Secretary, at the Commission's Washington, DC headquarters not less than 5 business days prior to instituting the proceeding in State court. (c) Where it is impracticable to provide the Commission with written notice within the time period specified in paragraph (b) of this section, the authorized state official must inform the Secretary of the Commission by telephone as soon as practicable to institute a proceeding in state court a… | ||||||
| 17:17:1.0.1.1.1.0.6.67 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.71 Conflicts of interest policies and procedures by futures commission merchants and introducing brokers. | CFTC | [77 FR 20198, Apr. 3, 2012] | (a) Definitions. For purposes of this section, the following terms shall be defined as provided. (1) Affiliate. This term means, with respect to any person, a person controlling, controlled by, or under common control with, such person. (2) Business trading unit. This term means any department, division, group, or personnel of a futures commission merchant or introducing broker or any of its affiliates, whether or not identified as such, that performs, or personnel exercising direct supervisory authority over the performance of, any pricing (excluding price verification for risk management purposes), trading, sales, marketing, advertising, solicitation, structuring, or brokerage activities on behalf of a futures commission merchant or introducing broker or any of its affiliates. (3) Clearing unit. This term means any department, division, group, or personnel of a futures commission merchant or any of its affiliates, whether or not identified as such, that performs, or personnel exercising direct supervisory authority over the performance of, any proprietary or customer clearing activities on behalf of a futures commission merchant or any of its affiliates. (4) Derivative. This term means: (i) A contract for the purchase or sale of a commodity for future delivery; (ii) A security futures product; (iii) A swap; (iv) Any agreement, contract, or transaction described in section 2(c)(2)(C)(i) or section 2(c)(2)(D)(i) of the Act; and (v) Any commodity option authorized under section 4c of the Act; and (vi) any leverage transaction authorized under section 19 of the Act. (5) Non-research personnel. This term means any employee of the business trading unit or clearing unit, or any other employee of the futures commission merchant or introducing broker, other than an employee performing a legal or compliance function, who is not directly responsible for, or otherwise not directly involved in, research or analysis intended for inclusion in a research report. (6) Public appearance. This term means a… | ||||||
| 17:17:1.0.1.1.1.0.6.68 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.72 Restrictions on customer clearing arrangements. | CFTC | [77 FR 21306, Apr. 9, 2012] | No futures commission merchant providing clearing services to customers shall enter into an arrangement that: (a) Discloses to the futures commission merchant or any swap dealer or major swap participant the identity of a customer's original executing counterparty; (b) Limits the number of counterparties with whom a customer may enter into a trade; (c) Restricts the size of the position a customer may take with any individual counterparty, apart from an overall limit for all positions held by the customer at the futures commission merchant; (d) Impairs a customer's access to execution of a trade on terms that have a reasonable relationship to the best terms available; or (e) Prevents compliance with the timeframes set forth in § 1.74(b), § 23.610(b), or § 39.12(b)(7) of this chapter. | ||||||
| 17:17:1.0.1.1.1.0.6.69 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.73 Clearing futures commission merchant risk management. | CFTC | [77 FR 21306, Apr. 9, 2012, as amended at 90 FR 7937, Jan. 22, 2025] | (a) Each futures commission merchant that is a clearing member of a derivatives clearing organization shall: (1) Establish risk-based limits in the proprietary account and in each customer account based on position size, order size, margin requirements, or similar factors; (2) Screen orders for compliance with the risk-based limits in accordance with the following: (i) When a clearing futures commission merchant provides electronic market access or accepts orders for automated execution, it shall use automated means to screen orders for compliance with the limits; (ii) When a clearing futures commission merchant accepts orders for non-automated execution, it shall establish and maintain systems of risk controls reasonably designed to ensure compliance with the limits; (iii) When a clearing futures commission merchant accepts transactions that were executed bilaterally and then submitted for clearing, it shall establish and maintain systems of risk management controls reasonably designed to ensure compliance with the limits; (iv) When a firm executes an order on behalf of a customer but gives it up to another firm for clearing, (A) The clearing futures commission merchant shall establish risk-based limits for the customer, and enter into an agreement in advance with the executing firm that requires the executing firm to screen orders for compliance with those limits in accordance with paragraph (a)(2)(i) or (ii) as applicable; and (B) The clearing futures commission merchant shall establish and maintain systems of risk management controls reasonably designed to ensure compliance with the limits. (v) When an account manager bunches orders on behalf of multiple customers for execution as a block and post-trade allocation to individual accounts for clearing: (A) The futures commission merchant that initially clears the block shall establish risk-based limits for the block account and screen the order in accordance with paragraph (a)(2)(i) or (ii) as applicable; (B) The futures commission merchants that cle… | ||||||
| 17:17:1.0.1.1.1.0.6.70 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.74 Futures commission merchant acceptance for clearing. | CFTC | [77 FR 21307, Apr. 9, 2012] | (a) Each futures commission merchant that is a clearing member of a derivatives clearing organization shall coordinate with each derivatives clearing organization on which it clears to establish systems that enable the futures commission merchant, or the derivatives clearing organization acting on its behalf, to accept or reject each trade submitted to the derivatives clearing organization for clearing by or for the futures commission merchant or a customer of the futures commission merchant as quickly as would be technologically practicable if fully automated systems were used; and (b) Each futures commission merchant that is a clearing member of a derivatives clearing organization shall accept or reject each trade submitted by or for it or its customers as quickly as would be technologically practicable if fully automated systems were used; a clearing futures commission merchant may meet this requirement by: (1) Establishing systems to pre-screen orders for compliance with criteria specified by the clearing futures commission merchant; (2) Establishing systems that authorize a derivatives clearing organization to accept or reject on its behalf trades that meet, or fail to meet, criteria specified by the clearing futures commission merchant; or (3) Establishing systems that enable the clearing futures commission merchant to communicate to the derivatives clearing organization acceptance or rejection of each trade as quickly as would be technologically practicable if fully automated systems were used. | ||||||
| 17:17:1.0.1.1.1.0.6.71 | 17 | Commodity and Securities Exchanges | I | 1 | PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT | § 1.75 Delegation of authority to the Director of the Division of Clearing and Risk to establish an alternative compliance schedule to comply with futures commission merchant acceptance for clearing. | CFTC | [77 FR 21307, Apr. 9, 2012] | (a) The Commission hereby delegates to the Director of the Division of Clearing and Risk or such other employee or employees as the Director may designate from time to time, the authority to establish an alternative compliance schedule for requirements of § 1.74 for swaps that are found to be technologically or economically impracticable for an affected futures commission merchant that seeks, in good faith, to comply with the requirements of § 1.74 within a reasonable time period beyond the date on which compliance by such futures commission merchant is otherwise required. (b) A request for an alternative compliance schedule under this section shall be acted upon by the Director of the Division of Clearing and Risk within 30 days from the time such a request is received, or it shall be deemed approved. (c) An exception granted under this section shall not cause a registrant to be out of compliance or deemed in violation of any registration requirements. (d) Notwithstanding any other provision of this section, in any case in which a Commission employee delegated authority under this section believes it appropriate, he or she may submit to the Commission for its consideration the question of whether an alternative compliance schedule should be established. Nothing in this section shall be deemed to prohibit the Commission, at its election, from exercising the authority delegated in this section. | ||||||
| 17:17:1.0.1.1.10.0.7.1 | 17 | Commodity and Securities Exchanges | I | 11 | PART 11—RULES RELATING TO INVESTIGATIONS | § 11.1 Scope and applicability of rules. | CFTC | [63 FR 5233, Feb. 2, 1998] | The rules of this part apply to investigatory proceedings conducted by the Commission or its staff pursuant to sections 6(c) and 8 and 12(f) of the Commodity Exchange Act, as amended, 7 U.S.C. 9 and 15 and 12 and 16(f) (Supp. IV, 1974), to determine whether there have been violations of that Act, or the rules, regulations or orders adopted thereunder, or, in accordance with the provisions of section 12(f) of the Act, whether there have been violations of the laws, rules or regulations relating to futures or options matters administered or enforced by a foreign futures authority, or whether an application for designation or registration under the Act should be denied. Except as otherwise specified herein, the rules will apply to the conduct of investigation whether or not the Commission has authorized the use of subpoenas in the particular matter to compel the production of evidence. | ||||||
| 17:17:1.0.1.1.10.0.7.2 | 17 | Commodity and Securities Exchanges | I | 11 | PART 11—RULES RELATING TO INVESTIGATIONS | § 11.2 Authority to conduct investigations. | CFTC | [41 FR 29799, July 19, 1976, as amended at 43 FR 55348, Nov. 28, 1978; 60 FR 54802, Oct. 26, 1995; 61 FR 1709, Jan. 23, 1996; 62 FR 17702, Apr. 11, 1997; 63 FR 5233, Feb. 2, 1998; 67 FR 62352, Oct. 7, 2002; 78 FR 22419, Apr. 16, 2013; 82 FR 28767, June 26, 2017; 89 FR 71808, Sept. 4, 2024] | (a) The Director of the Division of Enforcement and members of the Commission staff acting pursuant to his authority and under his direction may conduct such investigations as he deems appropriate to determine whether any persons have violated, are violating, or are about to violate the provisions of the Commodity Exchange Act, as amended, or the rules, regulations or orders adopted by the Commission pursuant to that Act, or, in accordance with the provisions of section 12(f) of the Act, whether any persons have violated, are violating or are about to violate the laws, rules or regulations relating to futures or options matters administered or enforced by a foreign futures authority, or whether an applicant for registration or designation meets the requisite statutory criteria. For this purpose, the Director may obtain evidence through voluntary statements and submissions, through exercise of inspection powers over boards of trade, reporting traders, and persons required by law to register with the Commission, or when authorized by order of the Commission, through the issuance of subpoenas. The Director shall report to the Commission the results of his investigations and recommend to the Commission such enforcement action as he deems appropriate. (b) The Commission hereby delegates, until the Commission orders otherwise, to its Regional Directors and to the Director, the Deputy Directors, the Program Coordinator, the Chief Counsel, the Associate Directors, and the Deputy Regional Counsel of the Division of Enforcement the authority to grant to any employee of the Division of Enforcement all or a portion of the authority which the Commission, by order, has authorized specified employees of the Commission to perform in connection with a Commission investigation conducted by the Division of Enforcement. With the approval of the Executive Director, the Director of the Division of Enforcement may also grant such authority to any Commission employee under the direction of the Executive Director. | ||||||
| 17:17:1.0.1.1.10.0.7.3 | 17 | Commodity and Securities Exchanges | I | 11 | PART 11—RULES RELATING TO INVESTIGATIONS | § 11.3 Confidentiality of investigations. | CFTC | All information and documents obtained during the course of an investigation, whether or not obtained pursuant to subpoena, and all investigative proceedings shall be treated as non-public by the Commission and its staff except to the extent that (a) the Commission directs or authorizes the public disclosure of the investigation; (b) the information or documents are made a matter of public record during the course of an adjudicatory proceeding; or (c) disclosure is required by the Freedom of Information Act, 5 U.S.C. 552, and the rules adopted by the Commission thereunder, 17 CFR part 145. Procedures by which persons submitting information to the Commission during the course of an investigation may specifically seek confidential treatment of information for purposes of Freedom of Information Act disclosure are set forth in 17 CFR 145.9. A request for confidential treatment of information for purposes of the Freedom of Information Act shall not, however, prevent disclosure for law enforcement purposes or when disclosure is otherwise found appropriate in the public interest and permitted by law. | |||||||
| 17:17:1.0.1.1.10.0.7.4 | 17 | Commodity and Securities Exchanges | I | 11 | PART 11—RULES RELATING TO INVESTIGATIONS | § 11.4 Subpoenas. | CFTC | [41 FR 29799, July 19, 1976, as amended at 67 FR 37322, May 29, 2002] | (a) Issuance of subpoenas. The Commission or any member of the Commission or of its staff who, by order of the Commission, has been authorized to issue subpoenas in the course of a particular investigation may issue a subpoena directing the person named therein to appear before a designated person at a specified time and place to testify or to produce documentary evidence, or both, relating to any matter under investigation. (b) Authorization to issue subpoenas. An order of the Commission authorizing one or more members of the Commission or of its staff to issue subpoenas in the course of a particular investigation shall include: (1) A general description of the scope of the investigation; (2) The authority under which the investigation is being conducted; and (3) A designation of the members of the Commission or of its staff authorized by the Commission to issue subpoenas. (c) Service. Service of subpoenas issued for investigative purposes shall be effected in the following manner: (1) Service upon a natural person. Delivery of a copy of a subpoena to a natural person may be effected by (i) Handing it to the person; (ii) Leaving it at his office with the person in charge thereof or, if there is no one in charge, by leaving it in a conspicuous place therein; (iii) Leaving it at his dwelling place or usual place of abode with some person of suitable age and discretion then residing therein; (iv) Mailing it by registered or certified mail to him at his last known address; or (v) Any other method whereby actual notice is given to him. (2) Service upon other persons. When the person to be served is not a natural person, delivery of a copy of the subpoena may be effected by (i) handing it to a registered agent for service, or to any officer, director, or agent in charge of any office of such person; (ii) mailing it by registered or certified mail to any such representative at his last known address; or (iii) any other method whereby actual notice is given to any such representative. (d) Witness… | ||||||
| 17:17:1.0.1.1.10.0.7.5 | 17 | Commodity and Securities Exchanges | I | 11 | PART 11—RULES RELATING TO INVESTIGATIONS | § 11.5 Transcripts. | CFTC | Transcripts of testimony taken in the course of an investigative proceeding shall be recorded solely by an official reporter or other person or by other means authorized by the Commission or by a member of the Commission or its staff conducting the investigation for the Commission. | |||||||
| 17:17:1.0.1.1.10.0.7.6 | 17 | Commodity and Securities Exchanges | I | 11 | PART 11—RULES RELATING TO INVESTIGATIONS | § 11.6 Oath; false statements. | CFTC | (a) Oath. At the discretion of the member of the Commission or staff member conducting the investigation, testimony of a witness may be taken under oath. (b) Penalties for false statements and other false information. Any person making false statements under oath during the course of a Commission investigation is subject to the criminal penalties for perjury in 18 U.S.C. 1621. Any person who knowingly and willfully makes false or fraudulent statements, whether under oath or otherwise, or who falsifies, conceals or covers up a material fact, or submits any false writing or document, knowing it to contain false, fictitious or fraudulent information, is subject to the criminal penalties set forth in 18 U.S.C. 1001. | |||||||
| 17:17:1.0.1.1.10.0.7.7 | 17 | Commodity and Securities Exchanges | I | 11 | PART 11—RULES RELATING TO INVESTIGATIONS | § 11.7 Rights of witnesses. | CFTC | [41 FR 29799, July 19, 1976, as amended at 61 FR 1709, Jan. 23, 1996; 89 FR 71808, Sept. 4, 2024] | (a) Orders authorizing issuance of subpoenas. Any person upon whom a subpoena has been served compelling him to furnish documentary evidence or testimony in an investigation shall, upon his request, be permitted to examine a copy of the Commission's order pursuant to which the subpoena has been issued. However, a copy of the order shall not be furnished for his retention except with the express approval of either the Director, a Deputy Director, the Principal Deputy Director, the Chief Counsel, an Associate Director, or a Deputy Regional Counsel of the Division of Enforcement; approval shall not be given unless it has been shown by the person seeking to retain a copy that his retention of a copy would be consistent both with the protection of privacy of persons involved in the investigation and with the unimpeded conduct of the investigation. (b) Copies of testimony or data. A person compelled to submit data or evidence in the course of an investigatory proceeding shall be entitled to retain or, upon payment of appropriate fees as set forth in the Schedule of Fees for records services, 17 CFR part 145b, procure a copy or transcript thereof, except that the witness may for good cause be limited to inspection of the official transcript of his testimony. (c) Right to counsel. A person compelled to appear, or who appears in person by request or permission of the Commission or its staff during an investigation, may be accompanied, represented, and advised by counsel. Subject to the provisions of § 11.8(b) of this part, he may be represented by any attorney-at-law who is admitted to practice before the highest court in any State or territory or the District of Columbia, who has not been suspended or disbarred from appearance and practice before the Commission in accordance with the provisions of part 14 of this title, and who has not been excluded from further participation in the particular investigatory proceeding for good cause established in accordance with paragraph (c)(2) of this section. (1) The right t… | ||||||
| 17:17:1.0.1.1.10.0.7.8 | 17 | Commodity and Securities Exchanges | I | 11 | PART 11—RULES RELATING TO INVESTIGATIONS | § 11.8 Sequestration. | CFTC | (a) Sequestration of witnesses. All witnesses and potential witnesses shall be sequestered and prohibited from being present during the examination of any other witness unless otherwise permitted in the discretion of the person conducting the investigation. (b) Sequestration of counsel. When a reasonable basis exists to believe that an investigation may be obstructed or impeded, directly or indirectly, by an attorney's representation of more than one witness during the course of an investigation, the member of the Commission or of the Commission's staff conducting the investigation may prohibit that attorney from being present during the testimony of any witness other than the witness in whose behalf counsel first appeared in the investigatory proceeding. To the extent practicable, consistent with the integrity of the investigation, the attorney will be advised of the reasons for his having been sequestered. | |||||||
| 17:17:1.0.1.1.11.1.7.1 | 17 | Commodity and Securities Exchanges | I | 12 | PART 12—RULES RELATING TO REPARATIONS | A | Subpart A—General Information and Preliminary Consideration of Pleadings | § 12.1 Scope and applicability of rules of practice relating to reparations. | CFTC | [49 FR 6621, Feb. 22, 1984, as amended at 59 FR 9635, Mar. 1, 1994] | (a) Part 12 Reparation Rules. These rules of practice are applicable to reparation applications filed pursuant to section 14 of the Commodity Exchange Act, as amended, 7 U.S.C. section 18. The rules in this part shall be construed liberally so as to secure the just, speedy and inexpensive determination of the issues presented with full protection for the rights of all parties. (b) Other rules of practice. Unless specifically made applicable, other Rules of Practice promulgated under the Commodity Exchange Act, as amended, shall not apply to reparation matters. (c) Applicability of these part 12 Reparation Rules. These rules shall apply in their entirety to all reparation complaints and matters relating thereto. | ||||
| 17:17:1.0.1.1.11.1.7.10 | 17 | Commodity and Securities Exchanges | I | 12 | PART 12—RULES RELATING TO REPARATIONS | A | Subpart A—General Information and Preliminary Consideration of Pleadings | § 12.10 Service. | CFTC | [78 FR 12936, Feb. 26, 2013, as amended at 86 FR 64352, Nov. 18, 2021] | (a) General requirements —(1) When service is required; number of copies. When one party serves another with documents under these rules, a copy must be served on all other parties as well as filed with the Proceedings Clerk. Similarly, when a person files a document with the Office of Proceedings, the person must serve a copy of the document on all other parties. This rule does not apply to a complaint filed pursuant to § 12.13 of these rules, which shall only be filed with the Commission. (2) How service is made. Service shall be made by: (i) Personal service; (ii) First-class or a more expeditious form of United States mail or an overnight or similar commercial delivery service; (iii) Facsimile (“fax”); or (iv) Electronic mail (“email”). (3) Service by fax or email shall be permitted at the discretion of the Presiding Officer, with the parties' consent. The consent of a party must specify the email address or fax number to be used. Signed documents that are served by email attachment must be in PDF or other non-alterable form. (4) Service will be complete at the time of personal service; upon deposit in the mail or with an overnight or similar commercial delivery service of a properly addressed document for which all postage or delivery service fees have been paid; or upon transmission by fax or email. Service by email or by fax will not be effective if the party making service learns that the attempted service did not reach the person to be served. (5) Where service is effected by mail or commercial delivery service (but not by fax or email), the time within which the person served may respond thereto shall be extended by five (5) days. (6) Statement of Service. A statement of service shall be made by filing with the Proceedings Clerk, simultaneously with the filing of the document, a statement signed by the party making service or by his attorney or representative that: (i) Confirms that service has been made; (ii) Identifies each person served; (iii) Sets forth the date of service; and (… | ||||
| 17:17:1.0.1.1.11.1.7.11 | 17 | Commodity and Securities Exchanges | I | 12 | PART 12—RULES RELATING TO REPARATIONS | A | Subpart A—General Information and Preliminary Consideration of Pleadings | § 12.11 Formalities of filing of documents with the Proceedings Clerk. | CFTC | [78 FR 12936, Feb. 26, 2013, as amended at 86 FR 64352, Nov. 18, 2021; 89 FR 71808, Sept. 4, 2024] | (a) If a party files by personal delivery or mail, an original of all documents shall be filed with the Proceedings Clerk. If a party files a document by fax or email in accordance with § 12.10(a)(2), they should not also send paper copies. (b) First page. The first page of all documents filed with the Proceedings Clerk must include the Commission's name, the docket number, the title of the proceeding, the subject of the document and the name of the person on whose behalf the document is being filed. In the complaint, the title of the proceeding shall include the names of all the complainants and respondents, but in documents subsequently filed it is sufficient to state the name of the first complainant and first respondent named in the complaint. (c) Format. Documents must be legible and printed on normal white paper of eight and one half by eleven inches. Documents emailed in accordance with the requirements of § 12.10(a)(2) must be in PDF or other non-alterable form. The typeface, margins, and spacing of all typed documents presented for filing should meet the following requirements: all text should be 12-point type or larger, except for text in footnotes which may be 10-point type; all documents should have at least one-inch margins on all sides; all text must be double-spaced, except for headings, text in footnotes, or block quotations, which may be single-spaced. (d) Signature —(1) Manner. The original of all papers must be signed in ink by persons filing the same or by their duly authorized agents or attorneys. (2) Effect. The signature on any document of persons acting either for themselves or as attorney or agent for another constitutes certification by them that: (i) They have read the document and know the contents thereof; (ii) If executed in any representative capacity, it was done with full power and authority to do so; (iii) To the best of their knowledge, information and belief, every statement contained in the document is true and not misleading; and (iv) The document has been fi… | ||||
| 17:17:1.0.1.1.11.1.7.12 | 17 | Commodity and Securities Exchanges | I | 12 | PART 12—RULES RELATING TO REPARATIONS | A | Subpart A—General Information and Preliminary Consideration of Pleadings | § 12.12 Signature. | CFTC | [49 FR 6621, Feb. 22, 1984, as amended at 86 FR 64352, Nov. 18, 2021] | (a) By whom. All documents filed with the Commission shall be signed personally: (1) By the person or persons on whose behalf they are tendered for filing; (2) By a general partner, officer or director of a partnership, corporation, association, or other legal entity; or (3) By an attorney-at-law having authority with respect thereto. The Proceedings Clerk may require appropriate evidence of the authority of a person subscribing a document on behalf of another person. (b) Effect. The signature on any document of any persons acting either for themselves or as attorney or agent for another constitutes certification by them that: (1) They have read the document subscribed and know the contents thereof; (2) If executed in any representative capacity, it was done with full power and authority to do so; (3) To the best of their knowledge, information, and belief, every statement contained in the document is true and not misleading; and (4) The document is not being interposed for delay. | ||||
| 17:17:1.0.1.1.11.1.7.13 | 17 | Commodity and Securities Exchanges | I | 12 | PART 12—RULES RELATING TO REPARATIONS | A | Subpart A—General Information and Preliminary Consideration of Pleadings | § 12.13 Complaint; election of procedure. | CFTC | [49 FR 6621, Feb. 22, 1984; 49 FR 15070, Apr. 17, 1984, as amended at 51 FR 35507, Oct. 6, 1986; 59 FR 9636, Mar. 1, 1994; 60 FR 49335, Sept. 25, 1995; 86 FR 64353, Nov. 18, 2021; 89 FR 71808, Sept. 4, 2024] | (a) In general. Any person complaining of a violation of any provision of the Act or a rule, regulation or order of the Commission thereunder by any person who is a registrant (as defined in § 12.2) may, at any time within two years after the cause of action accrues, apply to the Commission for a reparation award by filing a written complaint which satisfies the requirements of this rule. (b) Form of complaint. The form of each complaint filed under paragraph (a) of this section shall meet the following requirements: (1) Content. Each complaint shall include: (i) The name, residence address, and telephone number (during business hours) of the complainant; (ii) The name, address, and telephone number, if known, of each person alleged in the complaint to have violated the Act or any rule, regulation or order thereunder; (iii) If known, the specific provisions of the Act, rule, regulation, or order claimed to have been violated; (iv) A complete description of complainant's case, including, but not limited to: (A) A description of all relevant facts concerning each and every act or omission which it is claimed constitutes a violation of the Act; and (B) A description of all facts which show or tend to show the manner in which it is claimed that the complainant was injured by the alleged violations; (v) The amount of damages the complainant claims to have suffered and the method by which those damages have been computed, the amount of punitive damages (no more than two times the amount of such actual damages) the complainant claims, if any, and how complainant plans to demonstrate that punitive damages are appropriate; (vi) A statement indicating whether an arbitration proceeding or civil court litigation, based on the same set of facts set forth and involving any party named as a respondent in the complaint, has been instituted, and whether such a proceeding has reached a final disposition or is presently pending; (vii) A statement indicating whether any of the respondents is the subject of receivers… | ||||
| 17:17:1.0.1.1.11.1.7.14 | 17 | Commodity and Securities Exchanges | I | 12 | PART 12—RULES RELATING TO REPARATIONS | A | Subpart A—General Information and Preliminary Consideration of Pleadings | § 12.14 Withdrawal of complaint. | CFTC | [86 FR 64353, Nov. 18, 2021] | At any time prior to service of notification to the complainant pursuant to § 12.15(a) of the Director of the Office of Proceedings' determination to forward the complaint to a registrant, complainant may file a written notice of withdrawal of the complaint which shall terminate the Commission's consideration of the complaint without prejudice to complainant's right to re-file a reparations complaint based upon the same set of facts within two years after the cause of action accrues. If the complainant has previously filed a notice of withdrawal of a complaint based upon the same set of facts, the notice of withdrawal of complaint shall terminate the case with prejudice to complainant's rights to re-file a complaint in reparations based on the same set of facts, but such termination shall be regarded by the Commission as without prejudice to complainant's right to seek redress in such alternative forums as may be available for adjudication of the claims. | ||||
| 17:17:1.0.1.1.11.1.7.15 | 17 | Commodity and Securities Exchanges | I | 12 | PART 12—RULES RELATING TO REPARATIONS | A | Subpart A—General Information and Preliminary Consideration of Pleadings | § 12.15 Notification of complaint. | CFTC | [49 FR 6621, Feb. 22, 1984, as amended at 86 FR 64353, Nov. 18, 2021] | (a) Forwarding of complaint to registrant. If, in the opinion of the Director of the Office of Proceedings, the facts set forth in a complaint warrant such action as to any of the registrants, a copy of the complaint, together with any attachments thereto, shall be forwarded by serving by registered mail or certified mail any such registrant named therein at an address previously designated with the Commission by the registrant for receipt of reparation complaints, as provided in Commission Regulation 17 CFR 3.30, or, if no such designation has been filed with the Commission, at such address as will accomplish actual notice to the respondent. Should the Director determine to forward the complaint, the complainant shall be notified of this determination at the time the complaint is forwarded. (b) Determination not to forward complaint. The Director may, in their discretion, refuse to forward a complaint as to a particular respondent if it appears that the matters alleged therein are not cognizable in reparations, or that grounds exist pursuant to § 12.24(c) or (d) for refusing to forward the complaint. If the Director of the Office of Proceedings should determine not to forward the complaint to all registrants named in the complaint in accordance with this section, no proceeding shall be held thereon and the complainant shall be notified to that effect. If the Director determines to forward the complaint as to less than all of the registrants, the complainant shall be so notified. A termination of the complaint as to any registrant shall be regarded by the Commission as without prejudice to the right of the complainant to seek such alternative forms of relief as may be available. | ||||
| 17:17:1.0.1.1.11.1.7.16 | 17 | Commodity and Securities Exchanges | I | 12 | PART 12—RULES RELATING TO REPARATIONS | A | Subpart A—General Information and Preliminary Consideration of Pleadings | § 12.16 Response to complaint. | CFTC | [59 FR 9636, Mar. 1, 1994] | Within 25 days after the complaint has been served by the Office of Proceedings on the registrant, or within such additional time (not to exceed 10 days absent extraordinary circumstances) as the Director of the Office of Proceedings, or his/her delegee may grant, for good cause shown, each registrant shall either— (a) Satisfy the complaint in accordance with § 12.17 of these rules; or (b) Answer the complaint in the manner prescribed by § 12.18 of these rules. | ||||
| 17:17:1.0.1.1.11.1.7.17 | 17 | Commodity and Securities Exchanges | I | 12 | PART 12—RULES RELATING TO REPARATIONS | A | Subpart A—General Information and Preliminary Consideration of Pleadings | § 12.17 Satisfaction of complaint. | CFTC | [86 FR 64353, Nov. 18, 2021] | A respondent may satisfy the complaint: (a) By paying to the complainant either the amount to which the complainant claims to be entitled as set forth in the complaint or such other amount as the complainant will accept in satisfaction of the claim; and (b) By submitting to the Commission notice of satisfaction and withdrawal of the complaint, duly executed by the complainant and the respondent. | ||||
| 17:17:1.0.1.1.11.1.7.18 | 17 | Commodity and Securities Exchanges | I | 12 | PART 12—RULES RELATING TO REPARATIONS | A | Subpart A—General Information and Preliminary Consideration of Pleadings | § 12.18 Answer; election of procedure. | CFTC | [49 FR 6621, Feb. 22, 1984, as amended at 59 FR 9637, Mar. 1, 1994; 60 FR 49335, Sept. 25, 1995; 86 FR 64353, Nov. 18, 2021; 89 FR 71808, Sept. 4, 2024] | An answer filed pursuant to § 12.16 of these rules shall meet the following requirements: (a) Content. Each answer shall contain: (1) The full name, current address and telephone number (during business hours) of each respondent on whose behalf the answer is filed; (2) A complete description of each registrant's case, including but not limited to, a precise and detailed statement of the facts which constitute each registrant's ground for defense; (3) Admissions, if any, as to the registrant's liability for the amount (or any portion thereof) claimed as damages; (4) A statement indicating whether the registrant is (and if the answer is filed on behalf of two or more registrants, which if any of them are) in receivership or subject to bankruptcy proceedings; (5) A statement indicating whether an arbitration or civil court litigation, based on the same set of facts set forth in the complaint (involving any or all of the parties named therein), is pending; (6) A counterclaim which the registrant wishes to pursue under § 12.19 of these rules; (7) An election of an alternative decisional procedure pursuant to subparts C, D, or E of these rules. (A proceeding pursuant to subpart D may be elected only if the amount of actual damages claimed in the complaint or as counterclaims, exclusive of interest, costs, and punitive damages, does not exceed $30,000. A procedure pursuant to subpart E may be elected only if the amount of actual damages claimed in the complaint or as counterclaims, exclusive of interest, costs, and punitive damages exceeds $30,000; (8) If appropriate, a filing fee in the amount prescribed by § 12.25 shall be submitted with an answer at the time of its filing. (b) Motion for reconsideration of determination to forward the complaint. An answer may include a motion for reconsideration of the determination to forward the complaint, specifying the grounds therefor, which the Director of the Office of Proceedings, in their discretion, may grant by terminating the case pursuant to § 12.27, or den… | ||||
| 17:17:1.0.1.1.11.1.7.19 | 17 | Commodity and Securities Exchanges | I | 12 | PART 12—RULES RELATING TO REPARATIONS | A | Subpart A—General Information and Preliminary Consideration of Pleadings | § 12.19 Counterclaim. | CFTC | A registrant may, at the time of filing an answer to a complaint, set forth as a counterclaim: (a) Facts alleging a violation and a request for a reparation award that would be a proper subject for a complaint under § 12.13 of these rules; or (b) Any claim which at the time the complaint is served the registrant has against the complainant if it arises out of the transaction or occurrence or series of transactions or occurrences set forth in the complaint. | |||||
| 17:17:1.0.1.1.11.1.7.2 | 17 | Commodity and Securities Exchanges | I | 12 | PART 12—RULES RELATING TO REPARATIONS | A | Subpart A—General Information and Preliminary Consideration of Pleadings | § 12.2 Definitions. | CFTC | [86 FR 64350, Nov. 18, 2021, as amended at 89 FR 71808, Sept. 4, 2024] | For purposes of this part: Act means the Commodity Exchange Act, as amended, 7 U.S.C. 1, et seq. Administrative Judge means an employee of the Commission who is authorized to conduct all reparations proceedings. In appropriate circumstances, the functions of an Administrative Judge may be performed by an Administrative Law Judge. Administrative Law Judge means an administrative law judge appointed pursuant to the provisions of 5 U.S.C. 3105. Commission means the Commodity Futures Trading Commission. Commission decisional employee means an employee or employees of the Commission who are or may reasonably be expected to be involved in the decisionmaking process in any proceeding, including, but not limited to: An Administrative Judge; members of the personal staffs of the Commissioners, but not the Commissioners themselves; members of the staffs of the Administrative Law Judges, but not an Administrative Law Judge; members of the staffs of the Administrative Judges; members of the Office of the General Counsel; members of the staff of the Office of Proceedings; and other Commission employees who may be assigned to hear or to participate in the decision of a particular matter. Complainant means a person who, individually or jointly with others, has applied to the Commission for a reparation award pursuant to section 14(a) of the Act, but shall not include a cross claimant or any other type of third-party claimant. The term “complainant” under this part applies equally to two or more persons who have applied jointly for a reparation award. Complaint means any document which constitutes an application for a reparation award pursuant to section 14(a) of the Act, regardless of whether it is denominated as such. Counterclaim means an application for a reparation award by a respondent against a complainant which satisfies the requirements of § 12.19. A counterclaim does not mean a cross claim or other type of third party claim. Director of the Office of Proceedings means an employee of the Commission wh… | ||||
| 17:17:1.0.1.1.11.1.7.20 | 17 | Commodity and Securities Exchanges | I | 12 | PART 12—RULES RELATING TO REPARATIONS | A | Subpart A—General Information and Preliminary Consideration of Pleadings | § 12.20 Response to counterclaim; reply; election of procedure. | CFTC | [49 FR 6621, Feb. 22, 1984, as amended at 86 FR 64353, Nov. 18, 2021] | (a) Response to counterclaim. If an answer asserts a counterclaim, the complainant shall, within thirty (30) days after service of the answer by the respondent: (1) Satisfy the counterclaim as if it were a complaint, in the manner prescribed by § 12.17; or (2) File a reply to the counterclaim with the Commission. (b) Form and content of reply. Should the complainant, under this paragraph, elect to file a reply to a counterclaim, the reply shall be strictly confined to the matters alleged in the counterclaim and shall conform to the form and content and other requirements set forth in § 12.18 of these rules. (c) Election of decisional procedure. If neither the complainant nor the respondent, in the complaint or answer respectively, has previously made an election of the summary decisional procedure or the formal decisional procedure, the complainant may make such an election in the reply. | ||||
| 17:17:1.0.1.1.11.1.7.21 | 17 | Commodity and Securities Exchanges | I | 12 | PART 12—RULES RELATING TO REPARATIONS | A | Subpart A—General Information and Preliminary Consideration of Pleadings | § 12.21 Voluntary dismissal. | CFTC | [49 FR 6621, Feb. 22, 1984, as amended at 86 FR 64353, Nov. 18, 2021] | (a) At any time after the Director of the Office of Proceedings has served notification to the parties pursuant to § 12.15 of the Director's determination to forward the complaint to the respondent for a response, either the complainant or the respondent may obtain dismissal of the complaint (or the proceeding, if one has commenced) by filing a stipulation of dismissal, duly executed by all of the complainants and each respondent against whom the complaint has been forwarded (or added as a party in the course of a proceeding); provided however, that if the stipulation is filed after any respondent has filed an answer, the terms of the stipulation shall include a dismissal of any counterclaims in the answer. (b) A dismissal of a complaint pursuant to this paragraph shall be with prejudice to complainant's right to re-file a claim in reparations based upon the same set of facts as alleged in the dismissed complaint. Unless otherwise stated in the stipulation, a dismissal ordered pursuant to this paragraph shall be regarded by the Commission as without prejudice to the parties' right to seek redress in such alternative forums as may be available for adjudication of their claims. (c) Upon receiving a written stipulation of dismissal which satisfies the requirements of this rule, the official before whom the matter or proceeding is pending shall issue an order of dismissal, and serve a copy thereof upon each of the parties. (d) This rule shall be applicable at all stages of a reparation proceeding. | ||||
| 17:17:1.0.1.1.11.1.7.22 | 17 | Commodity and Securities Exchanges | I | 12 | PART 12—RULES RELATING TO REPARATIONS | A | Subpart A—General Information and Preliminary Consideration of Pleadings | § 12.22 Default proceedings. | CFTC | [49 FR 6621, Feb. 22, 1984, as amended at 57 FR 20638, May 14, 1992; 86 FR 64353, Nov. 18, 2021] | (a) Institution of a default proceeding. Failure timely to respond to a complaint or a counterclaim, as required by §§ 12.16 and 12.20 of these rules, or, if applicable, to pay a filing fee required by § 12.25(b) or (c), shall be treated as an admission of the allegations of the complaint or counterclaim by the non-responding party, shall constitute a waiver by such party of any decisional procedure afforded by these Rules on the facts set forth in the complaint or counterclaim, and shall result in the institution of a default proceeding. (b) Default procedure. Upon a party's failure to respond timely to a complaint or counterclaim as prescribed in §§ 12.16 and 12.20, or timely to comply with § 12.25(b) or (c), the Director of the Office of Proceedings shall forward the pleadings, and other materials then of record, to an Administrative Judge or Administrative Law Judge who may thereafter enter findings and conclusions concerning the questions of violations and damages and, if warranted, enter a reparation award against the non-responding party. If the facts which are treated as admitted are considered insufficient to support a violation or the amount of reparations sought, the Administrative Judge or Administrative Law Judge may order production of supplementary evidence from the party not in default and may enter a default order and an award based thereon. (c) Finality. A default order issued pursuant to this rule, or pursuant to any other provisions of these part 12 Reparation Rules, shall become the final decision and order of the Commission thirty (30) days after service thereof, unless the order is set aside pursuant to § 12.23(a) of these rules, or unless the Commission takes review of such order on its own motion on or before the thirtieth day. | ||||
| 17:17:1.0.1.1.11.1.7.23 | 17 | Commodity and Securities Exchanges | I | 12 | PART 12—RULES RELATING TO REPARATIONS | A | Subpart A—General Information and Preliminary Consideration of Pleadings | § 12.23 Setting aside of default. | CFTC | [49 FR 6621, Feb. 22, 1984, as amended at 86 FR 64354, Nov. 18, 2021] | (a) Default order not final. In order to prevent injustice or for good cause shown, and on such conditions as may be appropriate, a non-final default order (including any award therein) may be set aside by the official who issued the order. (1) Procedure for setting aside non-final default order. Any party or person who is the subject of a default order issued pursuant to these rules may, at any time before the order becomes final pursuant to § 12.22(c), file and serve a motion to set aside the default, which shall set forth reasons why the act or omission for which the party was defaulted was not willful, why there is a reasonable likelihood of success for the party's claim or defense if heard on the merits, and why no prejudice will be sustained by other parties if the default is set aside. A motion to set aside a default order filed pursuant to this paragraph (a)(1) shall be decided, in the first instance, by the official who issued the default order. (2) Review. A denial of a motion to set aside a non-final default order by the official who issued the order shall be treated as an initial decision, which may be appealed to the Commission in accordance with the requirements of § 12.401 of these rules. A grant of a motion to set aside a non-final default order may be appealed only in accordance with the requirements of § 12.309 of these rules. (b) Default order final. A default order that has become final pursuant to § 12.22(c) shall not be set aside except upon a motion filed and served by the defaulted party showing that the defaulted party should be relieved from the default order because of fraud perpetrated on a decisionmaking official or the Commission, mistake, excusable neglect, or because the order is void for want of jurisdiction. Such a motion shall also show that, if the default order were set aside, there would be a reasonable likelihood of success for the defaulted party's claim or defense on the merits and that no party would be prejudiced thereby. Motions to set aside a final default o… | ||||
| 17:17:1.0.1.1.11.1.7.24 | 17 | Commodity and Securities Exchanges | I | 12 | PART 12—RULES RELATING TO REPARATIONS | A | Subpart A—General Information and Preliminary Consideration of Pleadings | § 12.24 Parallel proceedings. | CFTC | [49 FR 6621, Feb. 22, 1984, as amended at 86 FR 64354, Nov. 18, 2021] | (a) Definition. For purposes of this section, a parallel proceeding shall include: (1) An arbitration proceeding or civil court proceeding, involving one or more of the respondents as a party, which is pending at the time the reparation complaint is filed and involves claims or counterclaims that are based on the same set of facts which serve as a basis for all of the claims in the reparations complaint, and which either: (i) Was commenced at the instance of the complainant in reparations; or (ii) Involves counterclaims by the complainant in reparations alleging violations of the Commodity Exchange Act, or any regulation or order issued thereunder; or (iii) Is governed by a compulsory counterclaim rule of Federal court procedure which required the complainant in reparations to assert all of complainant's claims (including those based on alleged violations of the Commodity Exchange Act, and any regulation or order issued thereunder) as counterclaims in that proceeding; (2) The appointment by a court of a receivership over the assets, property or proceeds of a respondent named in a reparation complaint where the responsibility of the receivership includes the resolution of claims made by customers; or (3) A petition filed under any chapter of the Bankruptcy Code, 11 U.S.C. 101 et seq., as amended, commenced pursuant to 11 U.S.C. 301 or 302 by a respondent in a reparation proceeding, or the issuance by a bankruptcy court of an order for relief after the filing against a respondent in a reparation proceeding of an involuntary petition in bankruptcy pursuant to 11 U.S.C. 303. (b) Notice. At the time a complaint in reparations is filed pursuant to these rules, or at any time thereafter, any party, receiver or trustee, or counsel to any of the foregoing with knowledge of a parallel proceeding shall promptly notify the Commission, by first-class mail addressed to the Office of Proceedings, attention of the Proceedings Clerk, and serve notice on all other parties, including the receiver or trustee. The notice… | ||||
| 17:17:1.0.1.1.11.1.7.25 | 17 | Commodity and Securities Exchanges | I | 12 | PART 12—RULES RELATING TO REPARATIONS | A | Subpart A—General Information and Preliminary Consideration of Pleadings | § 12.25 Filing fees. | CFTC | [49 FR 6621, Feb. 22, 1984; 49 FR 15070, Apr. 17, 1984, as amended at 59 FR 9637, Mar. 1, 1994; 86 FR 64354, Nov. 18, 2021] | (a) Fees payable upon filing a complaint. (1) A complainant who, in the complaint, has elected the voluntary decisional procedure shall, at the time of filing the complaint, pay a filing fee of $50.00; (2) A complainant who, in the complaint wherein the amount of damages claimed does not exceed $30,000, exclusive of interest and costs, has not elected the voluntary decisional procedure shall, at the time of filing the complaint, pay a filing fee of $125.00. (3) A complainant who, in the complaint wherein the amount of damages claimed exceeds $30,000, exclusive of interest and costs, has not elected the voluntary decisional procedure shall, at the time of filing the complaint, pay a filing fee of $250.00. (b) Fees payable upon filing an answer. (1) If a complainant, in the complaint, has elected the voluntary decisional procedure, a respondent who, in the answer, elects the summary decisional procedure (available only where the amount of damages claimed in the complaint or as counterclaims does not exceed $30,000) shall, at the time of filing the answer, pay a filing fee of $75.00. (2) If a complainant, in the complaint, has elected the voluntary decisional procedure, a respondent who, in the answer, elects the formal decisional procedure (available only where the amount of damages claimed in the complaint or as counterclaims exceeds $30,000) shall, at the time of filing the answer, pay a filing fee of $200.00. (c) Fees payable upon filing a reply. In any case in which a counterclaim has been made, unless a complainant in the complaint, or the respondent in an answer, has elected the summary decisional procedure or the formal decisional procedure a complainant, who in the reply elects either of these procedures, shall, at the time of filing the reply, pay a filing fee of $75.00 or $200.00, respectively, depending whether the procedure elected by complainant is pursuant to subpart D or E of this part. | ||||
| 17:17:1.0.1.1.11.1.7.26 | 17 | Commodity and Securities Exchanges | I | 12 | PART 12—RULES RELATING TO REPARATIONS | A | Subpart A—General Information and Preliminary Consideration of Pleadings | § 12.26 Commencement of a reparation proceeding. | CFTC | [86 FR 64354, Nov. 18, 2021] | (a) Commencement of voluntary decisional proceeding. Where complainant and respondent in the complaint and answer have elected the voluntary decisional procedure pursuant to subpart C of this part and the complainant has paid the filing fee required by § 12.25, the Director of the Office of Proceedings shall, if in the Director's opinion the facts warrant taking such action, forward the pleadings and all materials of record to the Proceedings Clerk for a proceeding to be conducted in accordance with subpart C of this part. The Proceedings Clerk shall forthwith notify the parties of such action. Such notification shall be accompanied by an order issued by the Proceedings Clerk requiring the parties to complete all discovery, as provided in subpart B of this part, within 50 days thereafter. A voluntary decisional proceeding commences upon service of such notification and order. As soon as practicable after service of such notification, the Proceedings Clerk shall assign the case to an Administrative Judge for a final decision. (b) Commencement of summary decisional proceeding. Where the amount claimed as damages, exclusive of interest and costs, in the complaint or in counterclaim does not exceed $30,000, and either a complainant or a respondent in the complaint, answer, or reply, has elected the summary decisional procedure pursuant to subpart D of this part, and has paid the filing fee required by § 12.25, the Director of the Office of Proceedings shall, if in the Director's opinion the facts warrant taking such action, forward the pleadings and all materials of record to the Proceedings Clerk for a proceeding to be conducted in accordance with subpart D of this part. The Proceedings Clerk shall forthwith notify the parties of such action. Such notification shall be accompanied by an order issued by the Proceedings Clerk requiring the parties to complete all discovery, as provided in subpart B of this part, within 50 days thereafter. A summary decisional proceeding commences upon service of such notification… | ||||
| 17:17:1.0.1.1.11.1.7.27 | 17 | Commodity and Securities Exchanges | I | 12 | PART 12—RULES RELATING TO REPARATIONS | A | Subpart A—General Information and Preliminary Consideration of Pleadings | § 12.27 Termination of consideration of pleadings. | CFTC | If the Director of the Office of Proceedings should determine not to proceed in a manner set forth in § 12.26 (a), (b), or (c), consideration of the complaint and the answer (and reply, if any) shall terminate, and no proceeding shall be held on the allegations in any such pleadings. Such termination shall be regarded by the Commission as without prejudice to the right of the parties to seek such alternative forms of relief as may be available to them. If the consideration of the pleadings should be terminated, the Proceedings Clerk shall immediately notify the parties to that effect by registered or certified mail. A determination by the Director not to proceed in the manner set forth in § 12.26 (a), (b), or (c) of these rules is not subject to appeal pursuant to subpart F of these rules. | |||||
| 17:17:1.0.1.1.11.1.7.3 | 17 | Commodity and Securities Exchanges | I | 12 | PART 12—RULES RELATING TO REPARATIONS | A | Subpart A—General Information and Preliminary Consideration of Pleadings | § 12.3 Business address; hours. | CFTC | [78 FR 12936, Feb. 26, 2013, as amended at 89 FR 71808, Sept. 4, 2024] | The Office of Proceedings is located at the Commission's Washington, DC headquarters. Faxes must be sent to (202) 418-5532, and emails must be sent to PROC__filings@cftc.gov. The office is open from 8:15 a.m. to 4:45 p.m., Eastern Time, Monday through Friday except on federal holidays. |
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