[Code of Federal Regulations] [Title 17, Volume 1] [Revised as of April 1, 2006] From the U.S. Government Printing Office via GPO Access [CITE: 17CFR1.1] [Page 1-6] TITLE 17--COMMODITY AND SECURITIES EXCHANGES CHAPTER I--COMMODITY FUTURES TRADING COMMISSION PART 1_GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT--Table of Contents Sec. 1.1 Fraud in or in connection with transactions in foreign currency subject to the Commodity Exchange Act. [[Page 1]] (This book contains parts 1 to 199) -------------------------------------------------------------------- Part chapter i--Commodity Futures Trading Commission............. 1 [[Page 3]] -------------------------------------------------------------------- Part Page 1 General regulations under the Commodity Exchange Act............................ 5 2 Official seal............................... 120 3 Registration................................ 121 4 Commodity pool operators and commodity trading advisors........................ 162 5 [Reserved] 7 Contract market rules altered or supplemented by the Commission.......... 212 8 Exchange procedures for disciplinary, summary, and membership denial actions.. 212 9 Rules relating to review of exchange disciplinary, access denial or other adverse actions......................... 219 10 Rules of practice........................... 230 11 Rules relating to investigations............ 262 12 Rules relating to reparations............... 267 13 Public rulemaking procedures................ 305 14 Rules relating to suspension or disbarment from appearance and practice............ 307 15 Reports--general provisions................. 310 16 Reports by contract markets................. 315 17 Reports by futures commission merchants, members of contract markets and foreign brokers................................. 318 18 Reports by traders.......................... 323 19 Reports by persons holding bona fide hedge positions pursuant to Sec. 1.3(z) of this chapter and by merchants and dealers in cotton....................... 326 20 [Reserved] 21 Special calls............................... 328 30 Foreign futures and foreign options transactions............................ 330 31 Leverage transactions....................... 348 32 Regulation of commodity option transactions. 381 33 Regulation of domestic exchange-traded commodity option transactions........... 395 34 Regulation of hybrid instruments............ 405 [[Page 4]] 35 Exemption of swap agreements................ 406 36 Exempt markets.............................. 408 37 Derivatives transaction execution facilities 412 38 Designated contract markets................. 423 39 Derivatives clearing organizations.......... 435 40 Provisions common to contract markets, derivatives transaction execution facilities and derivatives clearing organizations........................... 443 41 Security futures products................... 457 42 Anti-money laundering, terrorist financing.. 482 100 Delivery period required.................... 482 140 Organization, functions, and procedures of the Commission.......................... 482 141 Salary offset............................... 507 142 Indemnification of CFTC employees........... 511 143 Collection of claims owed the United States arising from activities under the Commission's jurisdiction............... 512 144 Procedures regarding the disclosure of information and the testimony of present or former officers and employees in response to subpoenas or other demands of a court.............................. 515 145 Commission records and information.......... 518 146 Records maintained on individuals........... 532 147 Open Commission meetings.................... 541 148 Implementation of the Equal Access to Justice Act in covered adjudicatory proceedings before the Commission....... 548 149 Enforcement of nondiscrimination on the basis of handicap in programs or activities conducted by the Commodity Futures Trading Commission.............. 554 150 Limits on positions......................... 560 155 Trading standards........................... 566 156 Broker Associations......................... 570 160 Privacy of consumer financial information... 571 166 Customer protection rules................... 589 170 Registered futures associations............. 593 171 Rules relating to review of National Futures Association decisions in disciplinary, membership denial, registration and member responsibility actions........... 596 190 Bankruptcy.................................. 610 191-199 [Reserved] [[Page 5]] Definitions Sec. 1.1 Fraud in or in connection with transactions in foreign currency subject to the Commodity Exchange Act. 1.2 Liability of principal for act of agent. 1.3 Definitions. 1.4 Use of electronic signatures. Minimum Financial and Related Reporting Requirements 1.10 Financial reports of futures commission merchants and introducing brokers. 1.11 [Reserved] 1.12 Maintenance of minimum financial requirements by futures commission merchants and introducing brokers. 1.13 [Reserved] 1.14 Risk assessment recordkeeping requirements for futures commission merchants. 1.15 Risk assessment reporting requirements for futures commission merchants. 1.16 Qualifications and reports of accountants. 1.17 Minimum financial requirements for futures commission merchants and introducing brokers. 1.18 Records for and relating to financial reporting and monthly computation by futures commission merchants and introducing brokers. Prohibited Trading in Commodity Options 1.19 Prohibited trading in certain ``puts'' and ``calls''. Customers' Money, Securities, and Property 1.20 Customer funds to be segregated and separately accounted for. 1.21 Care of money and equities accruing to customers. 1.22 Use of customer funds restricted. 1.23 Interest of futures commission merchant in segregated funds; additions and withdrawals. 1.24 Segregated funds; exclusions therefrom. 1.25 Investment of customer funds. 1.26 Deposit of instruments purchased with customer funds. 1.27 Record of investments. 1.28 Appraisal of instruments purchased with customer funds. 1.29 Increment or interest resulting from investment of customer funds. 1.30 Loans by futures commission merchants; treatment of proceeds. Recordkeeping 1.31 Books and records; keeping and inspection. 1.32 Segregated account; daily computation and record. 1.33 Monthly and confirmation statements. 1.34 Monthly record, ``point balance''. 1.35 Records of cash commodity, futures, and option transactions. 1.36 Record of securities and property received from customers and option customers. 1.37 Customer's or option customer's name, address, and occupation recorded; record of guarantor or controller of account. 1.38 Execution of transactions. 1.39 Simultaneous buying and selling orders of different principals; execution of, for and between principals. Miscellaneous 1.40 Crop, market information letters, reports; copies required. 1.41-1.43 [Reserved] 1.44 Records and reports of warehouses, depositories, and other similar entities; visitation of premises. 1.45 [Reserved] 1.46 Application and closing out of offsetting long and short positions. 1.47 Requirements for classification of purchases or sales of contracts for future delivery as bona fide hedging under Sec. 1.3(z)(3) of the regulations. 1.48 Requirements for classification of sales or purchases for future delivery as bona fide hedging of unsold anticipated production or unfilled anticipated requirements under Sec. 1.3(z)(2) (i)(B) or (ii)(C) of the regulations. 1.49 Denomination of customer funds and location of depositories. 1.50-1.51 [Reserved] 1.52 Self-regulatory organization adoption and surveillance of minimum financial requirements. 1.53 Enforcement of contract market bylaws, rules, regulations, and resolutions. 1.54 Contract market rules submitted to and approved or not disapproved by the Secretary of Agriculture. 1.55 Distribution of ``Risk Disclosure Statement'' by futures commission merchants and introducing brokers. 1.56 Prohibition of guarantees against loss. 1.57 Operations and activities of introducing brokers. 1.58 Gross collection of exchange-set margins. 1.59 Activities of self-regulatory organization employees, governing board members, committee members, and consultants. 1.60 Pending legal proceedings. 1.61 [Reserved] [[Page 6]] 1.62 Contract market requirement for floor broker and floor trader registration. 1.63 Service on self-regulatory organization governing boards or committees by persons with disciplinary histories. 1.64 Composition of various self-regulatory organization governing boards and major disciplinary committees. 1.65 Notice of bulk transfers and disclosure obligations to customers. 1.66 No-action positions with respect to floor traders. 1.67 Notification of final disciplinary action involving financial harm to a customer. 1.68 Customer election not to have funds, carried by a futures commission merchant for trading on a registered derivatives transaction execution facility, separately accounted for and segregated. 1.69 Voting by interested members of self-regulatory organization governing boards and various committees. 1.70 Notification of State enforcement actions brought under the Commodity Exchange Act. Appendix A to Part 1 [Reserved] Appendix B to Part 1--Fees for Contract Market Rule Enforcement Reviews and Financial Reviews Authority: 7 U.S.C. 1a, 2, 5, 6, 6a, 6b, 6c, 6d, 6e, 6f, 6g, 6h, 6i, 6j, 6k, 6l, 6m, 6n, 6o, 6p, 7, 7a, 7b, 8, 9, 12, 12a, 12c, 13a, 13a-1, 16, 16a, 19, 21, 23, and 24, as amended by the Commodity Futures Modernization Act of 2000, Appendix E of Pub. L. 106-554, 114 Stat. 2763 (2000). Source: 41 FR 3194, Jan. 21, 1976, unless otherwise noted. Definitions (a) Scope. The provisions of this section shall be applicable to accounts, agreements, contracts, or transactions described in section 2(c)(1) of the Act, to the extent that the Commission exercises jurisdiction over such accounts, agreements, contracts and transactions as provided in section 2(c)(2)(B) of the Act (except that this section shall not be applicable to persons described in section 2(c)(2)(B)(ii)(II) or 2(c)(2)(B)(ii)(III) of the Act). (b) Fraudulent conduct prohibited. It shall be unlawful for any person, directly or indirectly, in or in connection with any account, agreement, contract or transaction that is subject to paragraph (a) of this section: (1) To cheat or defraud or attempt to cheat or defraud any person; (2) Willfully to make or cause to be made to any person any false report or statement or cause to be entered for any person any false record; or (3) Willfully to deceive or attempt to deceive any person by any means whatsoever. [66 FR 42269, Aug. 10, 2001]