legislation: 97-s-2109
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| 97-s-2109 | 97 | s | 2109 | Futures Trading Act of 1982 | Finance and Financial Sector | 1982-02-11 | 1982-10-01 | Indefinitely postponed by Senate by Unanimous Consent. | Senate | Sen. Helms, Jesse [R-NC] | NC | R | H000463 | 1 | (Measure indefinitely postponed in Senate, H.R. 5447 passed in lieu) Futures Trading Act of 1982 - Amends the Commodity Exchange Act to define "introducing broker" as any person (other than a registered associate of a futures commission merchant) who solicits orders for futures contracts, but does not keep customers' funds, securities, or property to margin such contracts. Amends the definition of "commodity trading advisory" to mean persons who advise (for profit) others either directly or through the various media regarding futures trading. Excludes banks and specified professionals and other persons from such definition. Denies the Commodity Futures Trading Commission (CFTC) jurisdiction to designate boards of trade as contract markets for securities options (as defined in specified sections of the Securities Act of 1933 or the Securities Exchange Act of 1934). Sets forth requirements for CFTC approval of futures contracts for groups or indices of securities. Requires: (1) a public comment period; and (2) Securities Exchange Commission (SEC) consultation and oral hearing regarding such contracts. Prohibits trading of individual securities futures contracts, except those for specified exempted securities under the Securities Act of 1933 or the Securities Exchange Act of 1934, and futures contracts approved pursuant to this Act. States that: (1) foreign currency options traded on national securities exchanges are not within the CFTC's jurisdiction; and (2) nothing in such Act relieves a person of any duty, remedy, or protection available to the SEC or a private party under the Securities Act of 1933 or the Securities Exchange Act of 1934 concerning securities of a commodity pool, or persons involved in related transactions. Authorizes the CFTC to disclose transaction information to commodities and securities self-regulatory organizations. Eliminates the one-year bar on former Commissioners and senior employees appearing before the CFTC. (Such bar is in effect under other existing Federal law.) Makes changes to existing legislative findings, including a statement concerning the effect and importance of commodity option transactions on interstate commerce. Consolidates certain provisions concerning foreign futures traded in the United States. Provides with regard to such trading that the CFTC: (1) may promulgate rules, which may vary with different vendors or trade organizations, regarding fraud, risk disclosure, finances, recordkeeping, or registration; and (2) may not promulgate rules governing foreign trade boards or requiring CFTC approval of such boards' contracts or rules of action. Authorizes the CFTC to establish speculative limits by rulemaking, as well as by order, after notice and hearing. Applies such limits to introducing brokers as they presently apply to commission merchants and floor brokers. Permits contract markets and other licensed exchanges to set speculative limits for futures and option transactions. Restricts these ceilings to CFTC ceilings in situations where the CFTC has established speculative limits. Makes it a violation of such Act to exceed exchange board limits that have CFTC approval. Subjects such a violation to specified criminal penalties if done to manipulate a market. Repeals the ban on agricultural commodities option trading. Requires introducing brokers to register with the CFTC. Sets forth registration procedures. Requires such brokers to: (1) meet minimum financial requirements; (2) make reports and keep records; and (3) keep daily trading records for each customer. Extends coverage of contract and registration misrepresentations to include misrepresentation of any registration status or any agent status. States that the CFTC and the Department of Justice may inspect the records of any trader (regardless of whether required to file reports or not) whose dealings equal or exceed CFTC levels. Requires persons associated with introducing brokers to register with the CFTC. Excludes persons registered as floor brokers, introducing brokers, or futures commission brokers from such requirement. Requires any partner, officer, employee, consultant or agent of a commodity pool operator or of a commodity trading advisor who directly or indirectly solicits funds, to register as a person associated with such commodity pool operator. Makes it unlawful for an operator to knowingly retain an unregistered associated person. Exempts persons registered as floor brokers, introducing brokers, futures commission brokers, commodity pool operators, or registered associates of another category from such requirement. States that the registration of associated persons shall expire at such time as the CFTC provides for. Makes it unlawful for any registrant to engage any associated person whom he knew or should have known to be statutorily disqualified. Extends antifraud provisions to persons associated with commodity trading advisors and commodity pool operators. Extends CFTC authority to establish proficiency standards to standards for all applicants and registrants. Requires contract markets to enforce all bylaws, rules, regulations, and resolutions if so required by the CFTC. Eliminates: (1) the $15,000 arbitration claim limit; and (2) the compulsory awards agreement requirement. Requires: (1) prior CFTC approval of contract market rules, except those relating to the setting of margin levels and (2) the CFTC to provide the contract market with written notice of its grounds for disapproval. Permits a contract market to put a rule into effect if the CFTC does not approve or begin disapproval proceedings within 180 days, or conclude such proceedings within one year. Requires the CFTC to approve or disapprove a board of trade's application for contract market designation within one year. Requires review of registration denials in the United States court of appeals circuit in which the petitioner's principal place of business is located. Authorizes the CFTC to seek an ex parte court order prohibiting persons from: (1) destroying records or books; (2) refusing to permit inspections; or (3) withdrawing or disposing of assets, funds, or property. Extends the prohibition on CFTC disclosure of information to include information gained from any personal investigation, but permits disclosure of otherwise confidential material if necessary to obtain public comment. Authorizes the CFTC to disclose information to any Federal agency or department (currently limited to the executive branch), including State, local, and foreign enforcement agencies. Prohibits State and local entities from disclosing any confidential information except in a legal proceeding. Authorizes the CFTC to: (1) register associated persons of commodity pool operators and commodity trading advisors; and (2) grant temporary (six-month) licenses. Requires the CFTC to furnish registration information to a requesting State. Establishes a system of statutory disqualifications for registration. Lists circumstances in which the CFTC may refuse or condition registration without a hearing (where a previous registration has been suspended or revoked, or the applicant has been denied trading privileges as the result of legal proceedings). Specifies circumstances in which the CFTC may refuse or condition a registration only after granting an opportunity for a hearing (where the applicant has been found to have been convicted of felonies or misdemeanors relating to commodities or securities transactions). Permits the CFTC to authorize any person to perform any portion of the registration functions subject to rules approved by the CFTC. Authorizes judicial review in United States courts of appeal of CFTC emergency actions. Limits such review to the information available at the time the CFTC determination was made. Permits the CFTC, in an emergency action, to direct a contract market to set temporary levels of margin in a futures contract. Extends the provisions pertaining to embezzlement, theft, or criminal conversion to all persons and their agents covered by the registration requirements of such Act. Prohibits CFTC members and employees from engaging in leverage transactions. Exempts from such prohibition hedging and certain oil, mineral, and farming transactions entered into by trustees of trusts established by CFTCers and specified CFTC employees. Authorizes CFTC members and employees to invest in specified government securities and financial instruments if: (1) such instruments are not regulated by the CFTC; and (2) no nonpublic information was used in the transaction. Prohibits CFTC members and employees from imparting nonpublic information regarding leverage transactions. Extends authorization of appropriations under such Act through FY 1984. Provides for shared jurisdiction with other Federal agencies and States over transactions involving commodities, services, products, rights, or interests not subject to contract market rules or regulated by the CFTC. Authorizes the CFTC to refer any matter subject to other Federal or State statutes to the agency or department enforcing such statutes. Extends the aiding and abetting prohibition to all legal proceedings (currently limited to administrative proceedings) arising under such Act. Provides that any person who directly or indirectly controls any person who violates such Act shall be liable as a principal, if such controlling person did not act in good faith and induced the violation. Places the burden of proving bad faith upon the CFTC. Revises reparations provisions. Restricts the applicability of reparations procedures to registered persons. Eliminates the reparations investigation requirement. Authorizes the CFTC to promulgate necessary administrative regulations. Provides for automatic trading prohibition and suspension of registration (within 15 days) for failure to pay a reparations award. Authorizes a registered futures association to fingerprint applicants, send such fingerprints to the Attorney General, and to receive the results of such checks. Requires a registered futures association to submit rules changes to the CFTCs. Directs the CFTC, by January 1, 1984, to: (1) conduct a transaction fee study; and (2) report to the appropriate congressional committees. Authorizes States to exercise antifraud jurisdiction (under State statutes) over commodity exchanges. Requires: (1) notification and CFTC approval before a State may exercise such authority; and (2) the CFTC to respond to such request within 30 days. Requires the CFTC to complete: (1) a review of a futures association rule or rule change within 180 days; and (2) a disapproval proceeding within one year. Provides with regard to CFTC registration functions performed by a futures association that: (1) such association's registration procedures must be part of its rules and have CFTC approval; (2) the CFTC shall review final registration decisions; and (3) judicial review shall be available in U.S. appellate courts. Amends the Agricultural Act of 1970 to prohibit restrictions on the export of certain agricultural products in non-emergency periods. Authorizes the CFTC to exempt specified exchange rules from review requirements. Exempts congressional subpenas or information requests from CFTC subpena requirements. Makes certain registration and reparations provisions effective 120 days after enactment of this Act, or earlier if the CFTC so prescribes. Requires the CFTC to conduct an insider trading study and to report to the appropriate congressional committees within six months. | 2025-01-14T16:41:20Z |