572
contracts of sale of any commodity for fu-
ture delivery, on or subject to the rules of
any contract market to security future
products;
‘‘(B) such broker or dealer files writ-
ten notice with the Commission in such
form as the Commission, by rule, may pre-
scribe containing such information as the
Commission, by rule, may prescribe as
necessary or appropriate in the public in-
terest or for the protection of investors;
‘‘(C) the registration of such broker or
dealer is not suspended pursuant to an
order of the Securities and Exchange
Commission; and
‘‘(D) such broker or dealer is a mem-
ber of a national securities association
registered pursuant to section 15A(a) of
the Securities Exchange Act of 1934.
Such registration shall be effective imme-
diately upon filing of the written notice with
the Commission.
‘‘(3) A floor broker or floor trader shall be
exempt from the registration requirements of
573
section 4e and paragraph (1) of this subsection
if—
‘‘(A) such floor broker or floor trader
is a broker or dealer registered with the
Securities and Exchange Commission;
‘‘(B) such floor broker or floor trader
limits its solicitation of orders, accept-
ance of orders, or execution of orders, or
placing of orders on behalf of others in-
volving any contracts of sale of any com-
modity for future delivery, on or subject to
the rules of any contract market to secu-
rity future products; and
‘‘(C) the registration of such floor
broker or floor trader is not suspended
pursuant to an order of the Securities and
Exchange Commission.’’.
(c) EXEMPTION
FOR
SECURITIES
BROKER-
DEALERS.—Section 4f(a) of the Commodity Ex-
change Act (7 U.S.C. 6f(a)) is amended by in-
serting after paragraph (3), as added by sub-
section (b), the following:
‘‘(4)(A) A broker or dealer that is reg-
istered as a futures commission merchant or
introducing broker pursuant to paragraph (2),
574
or that is a floor broker or floor trader exempt
from registration pursuant to paragraph (3),
shall be exempt from the following provisions
of this Act and the rules thereunder:
‘‘(i) Subsections (b), (d), (e), and (g) of
section 4c.
‘‘(ii) Sections 4d, 4e, and 4h.
‘‘(iii) Subsections (b) and (c) of this
section.
‘‘(iv) Subsections (b) and (c) of section
4j.
‘‘(v) Section 4k(1).
‘‘(vi) Section 4p.
‘‘(vii) Section 6d.
‘‘(viii) Subsections (d) and (g) of sec-
tion 8.
‘‘(ix) Section 16.
‘‘(x) Section 22(a).
‘‘(B)(i) Except as provided in clause (ii),
but notwithstanding any other provision of
this Act, the Commission, by rule, regulation,
or order, may conditionally or unconditionally
exempt any broker or dealer subject to the reg-
istration requirement of paragraph (2) of this
subsection, or exempt from registration pursu-
575
ant to paragraph (3) of this subsection, from
any provision of this Act or of any rule or regu-
lation thereunder, to the extent such exemp-
tion is necessary or appropriate in the public
interest and is consistent with the protection
of investors.
‘‘(ii) The Commission shall, by rule or reg-
ulation, 
determine 
the 
procedures 
under
which an exemptive order under this section
shall be granted and may, in its sole discre-
tion, decline to entertain any application for
an order of exemption under this section.
‘‘(C)(i) A broker or dealer that is registered
as a futures commission merchant or intro-
ducing broker pursuant to paragraph (2) or
an associated person thereof, or that is a floor
broker or floor trader exempt from registra-
tion pursuant to paragraph (3), shall not be
required to become a member of any futures
association registered under section 17 of this
Act.
‘‘(ii) No futures association registered
under section 17 of this Act shall limit its
members from carrying an account, accepting
an order, or transacting business with a
576
broker or dealer that is registered as a futures
commission merchant or introducing broker
pursuant to paragraph (2) or an associated
person thereof, or that is a floor broker or floor
trader exempt from registration pursuant to
paragraph (3).’’.
(d) EXEMPTIONS FOR ASSOCIATED PERSONS
OF SECURITIES BROKER-DEALERS.—Section 4k of
the Commodity Exchange Act (7 U.S.C. 6k) is
amended by adding at the end the following:
‘‘(6) Any associated person of a broker or
dealer that is registered with the Securities
and Exchange Commission, and who limits its
solicitation of orders, acceptance of orders, or
execution of orders, or placing of orders on be-
half of others involving any contracts of sale
of any commodity for future delivery, on or
subject to the rules of any contract market to
security future products, shall be exempt from
the following provisions of this Act and the
rules thereunder:
‘‘(A) Subsections (b), (d), (e), and (g) of
section 4c.
‘‘(B) Sections 4d, 4e, and 4h.
577
‘‘(C) Subsections (b) and (c) of section
4f.
‘‘(D) Subsections (b) and (c) of section
4j.
‘‘(E) Paragraph (1) of this section.
‘‘(F) Section 4p.
‘‘(G) Section 6d.
‘‘(H) Subsections (d) and (g) of section
8.
‘‘(I) Section 16.
‘‘(J) Section 22(a).’’.
SEC. 223. NOTIFICATION OF INVESTIGATIONS AND EN-
FORCEMENT ACTIONS.
(a) Section 8(a) of the Commodity Ex-
change Act (7 U.S.C. 12(a)) is amended by add-
ing at the end the following:
‘‘(3) The Commission shall provide the Se-
curities and Exchange Commission with notice
of the commencement of any proceeding and a
copy of any order entered by the Commission
against any futures commission merchant or
introducing broker registered pursuant to sec-
tion 4f(a)(2), any floor broker or floor trader
exempt from registration pursuant to section
4f(a)(3), any associated person exempt from
578
registration pursuant to section 4k(6), or any
board of trade designated as a contract mar-
ket pursuant to section 5f.’’.
(b) Section 6 of the Commodity Exchange
Act (7 U.S.C. 8, 9, 9a, 9b, 13b, 15) is amended
by adding at the end the following:
‘‘(g) The Commission shall provide the Se-
curities and Exchange Commission with notice
of the commencement of any proceeding and a
copy of any order entered by the Commission
pursuant to subsections (c) and (d) of this sec-
tion against any futures commission merchant
or introducing broker registered pursuant to
section 4f(a)(2), any floor broker or floor trad-
er exempt from registration pursuant to sec-
tion 4f(a)(3), any associated person exempt
from registration pursuant to section 4k(6), or
any board of trade designated as a contract
market pursuant to section 5f.’’.
(c) Section 6c of the Commodity Exchange
Act (7 U.S.C. 13a–1) is amended by adding at
the end the following:
‘‘(h) The Commission shall provide the Se-
curities and Exchange Commission with notice
of the commencement of any proceeding and a
579
copy of any order entered by the Commission
against any futures commission merchant or
introducing broker registered pursuant to sec-
tion 4f(a)(2), any floor broker or floor trader
exempt from registration pursuant to section
4f(a)(3), any associated person exempt from
registration pursuant to section 4k(6), or any
board of trade designated as a contract mar-
ket pursuant to section 5f.’’.
Subtitle C—Effective Date
SEC. 231. EFFECTIVE DATE.
This title and the amendments made by
this title take effect on the date of enactment
of this Act.
Union Calendar No. 477
106TH CONGRESS
2D SESSION
H. R. 4541
[Report No. 106–711, Parts I, II, and III]
A BILL
To reauthorize and amend the Commodity Ex-
change Act to promote legal certainty, enhance
competition, and reduce systemic risk in markets
for futures and over-the-counter derivatives, and
for other purposes.
SEPTEMBER 6, 2000
Reported from the Committee on Banking and Financial
Services with amendments
SEPTEMBER 6, 2000
Reported from the Committee on Commerce with an
amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be
printed