§ 240.2 Definitions. For purposes of this part, the following terms have the same meaning as in the Commodity Exchange Act (7 U.S.C. 1 *et seq.*): “affiliated person of a futures commission merchant”; “associated person”; “contract of sale”; “commodity”; “futures commission merchant”; “future delivery”; “option”; “security”; and “security futures product.” ( a ) *Affiliate* has the same meaning as in section 2(k) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(k)).
( b ) *Banking institution* means: ( 1 ) A state member bank (as defined in 12 CFR 208.2);
( 2 ) An uninsured state-licensed U.S. branch or agency of a foreign bank;
( 3 ) A financial holding company (as defined in section 2 of the Bank Holding Company Act of 1956; 12 U.S.C. 1841);
( 4 ) A bank holding company (as defined in section 2 of the Bank Holding Company Act of 1956; 12 U.S.C. 1841);
( 5 ) A savings and loan holding company (as defined in section 10 of the Home Owners Loan Act; 12 U.S.C. 1467a)
( 6 ) A corporation operating under the fifth undesignated paragraph of section 25 of the Federal Reserve Act (12 U.S.C. 603), commonly known as “an agreement corporation;” and
( 7 ) A corporation organized under section 25A of the Federal Reserve Act (12 U.S.C. 611 *et seq.*), commonly known as an “Edge Act corporation.”
( c ) *Commodity Exchange Act* means the Commodity Exchange Act (7 U.S.C. 1 *et seq.*).
( d ) *Eligible contract participant* has the same meaning as in the Commodity Exchange Act (7 U.S.C. 1 *et seq.,* as implemented in 17 CFR 1.3(m).
( e ) *Forex* means foreign exchange.
( f ) *Identified banking product* has the same meaning as in section 401(b) of the Legal Certainty for Bank Products Act of 2000 (7 U.S.C. 27(b)).
( g ) Institution-affiliated party or IAP has the same meaning as in 12 U.S.C. 1813(u)(1), (2), or (3).
( h ) *Introducing broker* means any person who solicits or accepts orders from a retail forex customer in connection with retail forex transactions.
( i ) *Related person,* when used in reference to a retail forex counterparty, means: ( 1 ) Any general partner, officer, director, or owner of ten percent or more of the capital stock of the retail forex counterparty;
( 2 ) An associated person or employee of the retail forex counterparty, if the retail forex counterparty is not an insured depository institution;
( 3 ) An IAP, if the retail forex counterparty is an insured depository institution; and
( 4 ) Any relative or spouse of any of the foregoing persons, or any relative of such spouse, who shares the same home as any of the foregoing persons.
( j ) *Retail foreign exchange dealer* means any person other than a retail forex customer that is, or that offers to be, the counterparty to a retail forex transaction, except for a person described in item (aa), (bb), (cc)(AA), (dd), or (ff) of section 2(c)(2)(B)(i)(II) of the Commodity Exchange Act (7 U.S.C. 2(c)(2)(B)(i)(II)).
( k ) *Retail forex account* means the account of a retail forex customer, established with a banking institution, in which retail forex transactions with the banking institution as counterparty are undertaken, or the account of a retail forex customer that is established in order to enter into such transactions.
( l ) *Retail forex account agreement* means the contractual agreement between a banking institution and a retail forex customer that contains the terms governing the customer's retail forex account with the banking institution.
( m ) *Retail forex business* means engaging in one or more retail forex transactions with the intent to derive income from those transactions, either directly or indirectly.
( n ) *Retail forex counterparty* includes, as appropriate: ( 1 ) A banking institution;
( 2 ) A retail foreign exchange dealer;
( 3 ) A futures commission merchant;
( 4 ) An affiliated person of a futures commission merchant; and
( 5 ) A broker or dealer registered under section 15(b) (except paragraph (11) thereof) or 15C of the Securities Exchange Act of 1934 (15 U.S.C. 78o(b), 78o-5) or a U.S. financial institution other than a banking institution, provided the counterparty is subject to a rule or regulation of a Federal regulatory agency covering retail forex transactions.
( o ) *Retail forex customer* means a customer that is not an eligible contract participant, acting on his, her, or its own behalf and engaging in retail forex transactions.
( p ) *Retail forex proprietary account* means a retail forex account carried on the books of a banking institution for one of the following persons; a retail forex account of which 10 percent or more is owned by one of the following persons; or a retail forex account of which an aggregate of 10 percent or more of which is owned by more than one of the following persons: ( 1 ) The banking institution;
( 2 ) An officer, director or owner of ten percent or more of the capital stock of the banking institution; or
( 3 ) An employee of the banking institution, whose duties include: ( i ) The management of the banking institution's business;
( ii ) The handling of the banking institution's retail forex transactions;
( iii ) The keeping of records, including without limitation the software used to make or maintain those records, pertaining to the banking institution's retail forex transactions; or
( iv ) The signing or co-signing of checks or drafts on behalf of the banking institution;
( 4 ) A spouse or minor dependent living in the same household as of any of the foregoing persons; or
( 5 ) An affiliate of the banking institution;
( q ) *Retail forex transaction* means an agreement, contract, or transaction in foreign currency, other than an identified banking product or a part of an identified banking product, that is offered or entered into by a banking institution with a person that is not an eligible contract participant and that is: ( 1 ) A contract of sale of a commodity for future delivery or an option on such a contract; or
( 2 ) An option, other than an option executed or traded on a national securities exchange registered pursuant to section 6(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78f(a)); or
( 3 ) Offered or entered into on a leveraged or margined basis, or financed by a banking institution, its affiliate, or any person acting in concert with the banking institution or its affiliate on a similar basis, other than: ( i ) A security that is not a security futures product as defined in section 1a(47) of the Commodity Exchange Act (7 U.S.C. 1a(47)); or
( ii ) A contract of sale that— ( A ) Results in actual delivery within two days; or
( B ) Creates an enforceable obligation to deliver between a seller and buyer that have the ability to deliver and accept delivery, respectively, in connection with their line of business; or
( iii ) An agreement, contract, or transaction that the Board determines is not functionally or economically similar to an agreement, contract, or transaction described in paragraph (p)(1) or (p)(2) of this section.