Futures Trading Act of 1982
PL 97-444 (H.R.5447), enacted 01/11/1983

96 STAT. 2294 
PUBLIC LAW 97-444—JAN. 11, 1983 
Public Law 97-444 
97th Congress 
An Act 
Jan. 11, 1983 
fo extend the Commodity Exchange Act, and for other purposes. 
[H.R. 5447] 
Be it enacted by the Senate and House of Representatives of the 
Futures Trading United States of America in Congress assembled, That this Act may 
fuse 1 note. 
^ ^ited as the "Futures Trading Act of 1982". 
TITLE I-JURISDICTION 
OPTIONS; FUTURES CONTRACTS 
SEC. 101. (a) Section 2(a) of the Commodity Exchange Act (7 U.S.C. 
2) is amended by— 
7 use 2, 4. 
(1) redesignating paragraph (1) as paragraph (1)(A); 
'7 use 2. 
(2) inserting in the third sentence of paragraph (IXA), as so 
redesignated ", except to the extent otherwise provided in 
subparagraph 
(B) of 
this 
paragraph," 
after 
"exclusive 
jurisdiction"; 
7 use 2a. 
(3) adding a new subparagraph (B) to read as follows: 
"(B) Notwithstanding any other provision of law— 
"(i) This Act shall not apply to and the (I!ommission shall 
have no jurisdiction to designate a board of trade as a 
contract market for any transaction whereby any party to 
such transaction acquires any put, call, or other option on 
one or more securities (as defined in section 2(1) of the 
15 use 77b. 
Securities Act of 1933 or section 3(aX10) of the Securities 
15 use 78c. 
Exchange Act of 1934 on the date of enactment of the 
Futures Trading Act of 1982), including any group or index 
of such securities, or any interest therein or based on the 
value thereof. 
"(ii) This Act shall apply to and the Commission shall 
have exclusive jurisdiction with respect to accounts, Eigree-
ments (including any transaction which is of the character 
of, or is commonly known to the trade as, an 'option', 
'privilege', 'indemnity', 'bid', 'offer', 'put', 'call', 'advance 
guaranty', or 'decline guaranty') and transactions involv-
ing, and may designate a board of trade as a contract 
market in, contracts of sale (or options on such contracts) 
for future delivery of a group or index of securities (or any 
interest therein or based upon the value thereof): Provided, 
however. That no board of trade shall be designated as a 
contract market with respect to any such contracts of sale 
(or options on such contracts) for future delivery unless the 
board of trade making such application demonstrates and 
the Commission expressly finds that the specific contract 
(or option on such contract) with respect to which the 
application has been made meets the following minimum 
requirements: 
PUBLIC LAW 97-444—JAN. 11, 1983 
96 STAT. 2295 
"(I) Settlement of or delivery on such contract (or 
option on such contract) shall be effected in cash or by 
means other than the transfer or receipt of any secu-
rity, except an exempted security under section 3 of the 
Securities Act of 1933 or section 3(aX12) of the Securi- 15 use 77c. 
ties Exchange Act of 1934 as in effect on the date of 15 use 78c. 
enactment of the Futures Trading Act of 1982 (other 
than any municipal security, as defined in section 
3(aX29) of the Securities Exchange Act of 1934 on the 
date of enactment of the Futures Trading Act of 1982); 
"(n) Trading in such contract (or option on such 
contract) shall not be readily susceptible to manipula-
tion of the price of such contract (or option on such 
contract), nor to causing or being used in the manipula-
tion of the price of any underlying security, option on 
such security or option on a group or index including 
such securities; and 
"(IID Such group or index of securities shall be pre-
dominately composed of the securities of unaffiliated 
issuers and sh£ill be a widely published measure of, and 
shall reflect, the market for all publicly traded equity 
or debt securities or a substantial segment thereof, or 
shall be comparable to such measure, 
"(iii) Upon application by a board of trade for designation 
as a contract market with respect to any contract of sale (or 
option on such contract) for future delivery involving a 
group or index of securities, the Commission shall provide 
an opportunity for public comment on whether such con-
tracts (or options on such contracts) meet the minimum 
requirements set forth in clause (ii) of this subparagraph. 
(ivXI) The Commission shall consult with the Securities 
and Exchange Commission with respect to any application 
which is submitted by a board of trade before December 9, 
1982, for designation as a contract market with respect to 
any contract of sale (or option on such contract) for future 
delivery of a group or index of securities. If, no later than 
fifteen days following the close of the public comment 
period, the Securities and Exchange Commission shall 
object to the designation of a board of trade as a contract 
market in such contract (or option on such contract) on the 
ground that any minimum requirement of clause (ii) of this 
subparagraph is not met, the Commission shall afford the 
Securities and Exchange Commission an opportunity for an 
oral hearing, to be transcribed, before the Commission, and 
shall give appropriate weight to the views of the Securities 
and Exchange Commission. Such oral hearing shall be held 
after the public comment period, prior to CJommission 
action upon such designation, and not less than thirty nor 
more than forty-five days after the close of the public 
comment period, unless both the Commission and the Secu-
rities Exchange Commission otherwise agree. If such an 
oral hearing is held, the Securities and Exchange Commis-
sion fails to withdraw its objections, and the Commission 
issues an order designating a board of trade as a contract 
market with respect to any such contract (or option on such 
contract), the Securities and Exchange Commission shall 
have the right of 
judicial review of such order in accordance 
96 STAT. 2296 
PUBLIC LAW 97-444—JAN. 11, 1983 
7 use 9. 
with the standards of section 6(b) of this Act. If, pursuant to 
section 6 of this Act, there is a hearing on the record with 
respect to such application for designation, the Securities 
and Exchange Commission shall have the right to partici-
pate in that hearing as an interested party. 
"(II) Effective for any application submitted by a board of 
trade on or after December 9, 1982, for designation as a 
contract market with respect to any contract of sale (or 
option on such contract) for future delivery of a group or 
index of securities, the Commission shall transmit a copy of 
such application to the Securities and Exchange Commis-
sion for review. The Commission shall not approve any such 
application if the Securities and Exchange Commission 
determines that such contract (or option on such contract) 
fails to meet the minimum requirements set forth in clause 
(ii) of this subparagraph. Such determination shall be made 
by order no later than forty-five days after the close of the 
public comment period under clause (iii) of this subpara-
graph. In the event of such determination, the board of 
trade shall be afforded an opportunity for a hearing on the 
record before the Securities and Exchange Commission. If a 
board of trade requests a hearing on the record, the hearing 
shall commence no later than thirty days following the 
receipt of the request, and a final determination shall be 
made no later than thirty da3rs after the close of the 
hearing. A person aggrieved by any such order of the 
Securities and Exchange Commission may obtain judicial 
review thereof in the same manner and under such terms 
'
7 use 8. 
and conditions as are provided in section 6(a) of this Act. 
"(v) No person shall offer to enter into, enter into, or 
confirm the execution of any contract of sale (or option on 
such contract) for future delivery of any security, or inter-
est therein or based on the value thereof, except an 
exempted security under section 3 of the Securities Act of 
15 use 77c. 
1933 or section 3(aX12) of the Securities Exchange Act of 
15 use 78c. 
1934 as in effect on the date of enactment of the Futures 
Trading Act of 1982 (other than any municipal security as 
defined in section 3(aX29) of the Securities Exchange Act of 
1934 on the date of enactment of the Futures Trading Act of 
1982), or except as provided in clause (ii) of this subpara-
graph, any group or index of such securities or any interest 
therein or based on the value thereof.". 
OPTIONS ON FOREIGN CURRENCIES 
SEC. 102. Section 4c of the Commodity Exchange Act (7 U.S.C. 6c) 
is amended by adding at the end thereof the following new 
subsection: 
"(f) Nothing in this Act shall be deemed to govern or in any way 
be applicable to any transaction in an option on foreign currency 
traded on a national securities exchange.". 
COMMODITY POOLS 
SEC. 103. Section 4m of the Commodity Exchange Act (7 U.S.C. 
6m) is amended by— 
PUBLIC LAW 97-444—JAN. 11, 1983 
96 STAT. 2297 
(1) inserting "(1)" immediately following the section designa-
tion; and 
(2) adding at the end thereof the following new subsection: 
"(2) Nothing in this Act shall relieve any person of any obligation 
or duty, or affect the availability of any right or remedy available to 
the Securities and Exchange Commission or any private party aris-
ing under the Securities Act of 1933 or the Securities Exchange Act 15 use 77a. 
of 1934 governing the issuance, offer, purchase, or sale of securities 15 use 78a. 
of a commodity pool, or of persons engaged in transactions with 
respect to such securities, or reporting by a commodity pool.". 
SHARING INFORMATION WITH CONTRACT MARKETS AND OTHER SELF-
REGULATORY ORGANIZATIONS 
SEC. 104. Section 8a(6) of the Commodity Exchange Act (7 U.S.C. 
12a) is amended by— 
(1) inserting "registered futures association, or self-regulatory 
organization as defined in section 3(a)(26) of the Securities 
Exchange Act of 1934," before "notwithstanding"; and 
15 use 78c. 
(2) striking out "and consumers" and inserting in lieu thereof 
a comma and immediately thereafter "consumers, or investors, 
or which is necessary or appropriate to effectuate the purposes 
of this Act: Provided, That any information furnished by the 
Commission under this paragraph shall not be disclosed by such 
contract market, registered futures association, or self-regula-
tory organization except in any self-regulatory action or 
proceeding". 
TITLE II—MISCELLANEOUS AMENDMENTS TO THE 
COMMODITY EXCHANGE ACT 
DEFINITIONS 
SEC. 201. Section 2(a) of the Commodity Exchange Act (7 U.S.C. 2) 
is amended by— 
(1) inserting in paragraph (IXA), as redesignated by section 
101 of this Act, immediately after the sentence defining the Ante, p. 2294. 
term "futures commission merchant" a new sentence to read as 
follows: "The term 'introducing broker' shall mean any person, 
except an individual who elects to be and is registered as an 
associated person of a futures commission merchant, engaged in 
soliciting or in accepting orders for the purchase or sale of any 
commodity for future delivery on or subject to the rules of any 
contract market who 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 or may result 
therefrom."; and 
(2) amending the sentence defining the term "commodity 
trading advisor" in paragraph (IXA), as so redesignated, to read 
as follows: "The term 'commodity trading advisor' shall mean 
any person who, for compensation or profit, engages in the 
business of advising others, either directly or through publica-
tions, writings or electronic media, £is to the value of or the 
advisability of trading in any contract of sale of a commodity for 
future delivery made or to be made on or subject to the rules of 
a contract market, £iny commodity option authorized under 
section 4c, or any leverage transaction authorized under section 7 use 6c. 
96 STAT. 2298 
PUBLIC LAW 97-444—JAN. 11, 1983 
7 use 23. 
19^ or who, for compensation or profit, and as part of a regular 
business, issues or promulgates analyses or reports concerning 
any of the foregoing; but such term does not include (i) any bank 
or trust company or any person acting as an employee thereof, 
(ii) any news reporter, news columnist, or news editor of the 
print or electronic media, or any lawyer, accountant, or teacher, 
(iii) any floor broker or futures commission merchant, (iv) the 
puJDlisher or producer of any print or electronic data of general 
and regular dissemination, including its employees, (v) the fidu-
ciary of any defined benefit plan which is subject to the provi-
29 use 1001 
sions of the Employee Retirement Income Security Act of 1974, 
"°*® 
(vi) any contract market, and (vii) such other persons not within 
the intent of this definition as the Commission may specify by 
rule, regulation, or order: Provided, That the furnishing of such 
services by the foregoing persons is solely incidental to the 
conduct of their business or profession: Provided further. That 
the Commission, by rule or regulation, may include within this 
definition, any person advising as to the value of commodities or 
issuing reports or analyses concerning commodities, if the Com-
mission determines that such rule or regulation will effectuate 
the purposes of this provision.". 
PERSONNEL RESTRICTIONS 
SEC. 202. Section 2(a)(7) of the Commodity Exchange Act (7 U.S.C. 
4a(f)) is amended by— 
(1) striking out "(A)" after the paragraph designation; and 
(2) striking out subparagraph (B), 
LEGISLATIVE FINDINGS 
SEC. 203. Section 3 of the Commodity Exchange Act (7 U.S.C. 5) is 
amended to read as follows: 
"SEC. 3. Transactions in commodities involving the sale thereof for 
future delivery as commonly conducted on boards of trade smd 
known as 'futures' are affected with a national public interest. Such 
futures transactions are carried on in large volume by the public 
generally and by persons engaged in the business of bujdng and 
selling commodities and the products and b3T)roducts thereof in 
interstate commerce. The prices involved in such transactions are 
generally quoted and disseminated throughout the United States 
and in foreign countries as a basis for determining the prices to the 
producer and the consumer of commodities and the products and 
bj^roducts thereof and to facilitate the movements thereof in inter-
state commerce. Such transactions are utilized by shippers, dealers, 
millers, and others engaged in handling commodities and the prod-
ucts and bjTJroducts thereof in interstate commerce as a means of 
hedging themselves against possible loss through fluctuations in 
price. The transactions and prices of commodities on such boards of 
trade are susceptible to excessive speculation and can be manipu-
lated, controlled, cornered or squeezed, to the detriment of the 
producer or the consumer £ind the persons handling commodities 
and the products and byproducts thereof in interstate commerce, 
rendering regulation imperative for the protection of such com-
merce and the national public interest therein. Furthermore, trans-
actions which are of the character of, or are commonly known to the 
trade as, 'options' are or may be utilized by commercial and other 
PUBLIC LAW 97-444—JAN. 11, 1983 
96 STAT. 2299 
entities for risk shifting and other purposes. Options transactions 
are in interstate commerce or affect such commerce and the 
national economy, rendering regulation of such transactions imper-
ative for the protection of such commerce and the national public 
interest." 
UNLAWFUL FUTURES TRADING; FOREIGN FUTURES 
SEC. 204. Section 4 of the C!ommodity Exchange Act (7 U.S.C. 6) is 
amended to read as follows: 
"SEC. 4. (a) It shall be unlawful for any person to offer to enter 
into, to enter into, to execute, to confirm the execution of, or to 
conduct any office or business anywhere in the United States, its 
territories or pc^sessions, for the purpose of soliciting or accepting 
any order for, or otherwise dealing in, any transaction in, or in 
connection with, a contract for the purchase or sale of a commodity 
for future delivery (other than a contract which is made on or 
subject to the rules of a board of trade, exchange, or market located 
outside the United States, its territories or possessions) unless— 
"(1) such transaction is conducted on or subject to the rules of 
a board of trade which has been designated by the Commission 
as a 'contract market' for such commodity; 
"(2) such contract is executed or consummated by or through 
a member of such contract market; and 
"(3) such contract is evidenced by a record in writing which 
shows the date, the parties to such contract and their addresses, 
the property covered and its price, and the terms of delivery: 
Provided, That each contract market member shall keep such 
record for a period of three years from the date thereof, or for a 
longer period if the Commission shall so direct, which record 
shall at all times be open to the inspection of any representative 
of the Commission or the Department of Justice. 
"(b) The Commission may adopt rules and regulations proscribing 
fraud and requiring minimum financial standards, the disclosure of 
risk, the filing of reports, the keeping of books and records, the 
safeguarding of customers' funds, and registration with the Commis-
sion by any person located in the United States, its territories or 
possessions, who engages in the offer or sale of any contract of sale 
of a commodity for future delivery that is made or to be made on or 
subject to the rules of a board of trade, exchange, or market located 
outside the United States, its territories or possessions. Such rules 
and reg[ulations may impose different requirements for such persons 
depen£ng upon the particular foreign board of trade, exchange, or 
market involved. No rule or regulation may be adopted by the 
Commission under this subsection that (1) requires Commission 
approval of any contract, rule, regulation, or action of any foreign 
board of trade, exchange, or market, or clearinghouse for such board 
of trade, exchange, or market, or (2) governs in any way any rule or 
contract term or action of any foreign board of trade, exchange, or 
market, or clearinghouse for such board of trade, exchange, 
or market.". 
SPECULATIVE UMITS 
SEC. 205. Section 4a of the Commodity Exchange Act (7 U.S.C. 6a) 
is amended by— 
(1) inserting "rule, regulation, or" before "order" wherever it 
occurs in subsections (1) and (2); 
96 STAT. 2300 
PUBLIC LAW 97-444—JAN. 11, 1983 
(2) inserting in the fourth sentence of subsection (1) after 
"delivery months," the words "or for different number of days 
remaining until the last day of trading in a contract,"; 
(3) striking out in subsection (2) "order's promulgation" and 
inserting in lieu thereof "promulgation of the rule, regulation, 
or order"; 
(4) amending subsection (3) to read as follows: 
"(3) No rule, regulation, or order issued under subsection (1) of 
this section shall apply to transactions or positions which are shown 
to be bona fide hedging transactions or positions as such terms shall 
be defined by the Commission by rule, regulation, or order consist-
ent with the purposes of this Act. Such terms may be defined to 
permit producers, purchasers, sellers, middlemen, and users of a 
commodity or a product derived therefrom to hedge their legitimate 
anticipated business needs for that period of time into the future for 
which an appropriate futures contract is open and available on an 
exchange. To determine the adequacy of this Act and the powers of 
the Commission acting thereunder to prevent unwarranted price 
pressures by large hedgers, the Commission shall monitor and 
analyze the trading activities of the largest hedgers, as determined 
by the Commission, operating in the cattle, hog, or pork belly 
markets and shall report its findings and recommendations to the 
Senate Committee on Agriculture, Nutrition, and Forestry and the 
House Committee on Agriculture in its annual reports for at Ifeast 
two years following the date of enactment of the Futures Trading 
Act of 1982."; 
(5) inserting in the first sentence of subsection (4) ", an 
introducing broker," after "futures commission merchant", and 
striking out "as floor broker" and inserting in lieu thereof "a 
floor broker"; and 
(6) adding at the end thereof the following new subsection: 
"(5) Nothing in this section shall prohibit or impair the adoption 
by any contract market or by any other board of trade licensed or 
designated by the Commission of any bylaw, rule, regulation, or 
resolution fixing limits on the amount of trading which may be done 
or positions which may be held by any person under contracts of 
sale of any commodity for future delivery traded on or subject to the 
rules of such contract market, or under options on such contracts or 
commodities traded on or subject to the rules of such contract 
market or such board of trade: Provided, That if the Commission 
shall have fixed limits under this section for any contract or under 
section 4c of this Act for any commodity option, then the limits fixed 
by the bylaws, rules, regulations, and resolutions adopted by such 
contract market or such board of trade shall not be higher than the 
limits fixed by the Commission. It shall be a violation of this Act for 
any person to violate any bylaw, rule, regulation, or resolution of 
any contract market or other board of trade licensed or designated 
by the Commission fixing limits on the amount of trading which 
may be done or positions which may be held by any person under 
contracts of sale of any commodity for future delivery or under 
options on such contracts or commodities, if such bylaw, rule, regu-
lation, or resolution has been approved by the Commission: Pro-
7 use 13. 
vided, That the provisions of section 9(c) of this Act shall apply only 
to those who knowingly violate such limits.". 
PUBLIC LAW 97-444—JAN. 11, 1983 
96 STAT. 2301 
AGRICULTURAL OPTIONS 
SEC. 206. Section 4c of the C!ommodity Exchange Act (7 U.S.C. 6c) 
is amended by— 
(1) amending subsection (a) by— 
(A) inserting "or" at the end of clause (A); 
(B) striking out clause (B); and 
(C) redesignating clause (C) as clause (B); 
(2) amending subsection O
t
)
) to read as follows: 
"(b) No person shall offer to enter into, enter into or confirm the 
execution of, any transaction involving any commodity regulated 
under this Act which is of the character of, or is commonly known to 
the trade as, an 'option', 'privilege', 'indemnity', 'bid', 'offer', 'put', 
'call', 'advance guaranty', or 'decline guaranty', contrary to any rule, 
regulation, or order of the Commission prohibiting any such transac-
tion or allowing any such transaction under such terms and condi-
tions as the Commission shall prescribe. Any such order, rule, or 
regulation may be made only after notice and opportunity for 
hearing, and the Commission may set different terms and conditions 
for different markets."; 
(3) in subsection (c), inserting immediately after the first 
sentence the following: "With respect to any commodity regu-
lated under this Act and specifically set forth in section (2Xa) of 
this Act prior to the date of enactment of the Commodity 
Ante, p. 2294. 
Futures Trading Commission Act of 1974, the Commission may, 
'
^ use i note. 
pursuant to the procedures set forth in this subsection, establish 
a pilot program for a period not to exceed three years to permit 
such commodity option transactions. The Commission may 
authorize commodity option transactions during the pilot pro-
graia in as many commodities as will provide an adequate test 
of the trading of such option transactions. After completion of 
the pilot program, the Commission may authorize commodity 
option transactions without regard to the restrictions in the 
pilot program after the Commission transmits to the House 
Committee on Agriculture and the Senate Committee on Agri-
culture, Nutrition, and Forestry the documentation required 
under clause (1) of the first sentence of this subsection and the 
expiration of thirty calendar days of continuous session of 
Congress after the date of such transmittal."; and 
(4) amending subsection (d) by— 
(A) in clause (1), inserting ", other than a commodity 
specifically set forth in section 2(a) of this Act prior to 
enactment of the Commodity Futures Trading Commission 
Act of 1974," immediately after "physical commodity"; 
(B) in clause (2), inserting ", other than a commodity 
specifically set forth in section 2(a) of this Act prior to 
enactment of the Commodity Futures Trading Commission 
Act of 1974," immediately after "subsection (b) of this 
section"; and 
(C) inserting ", other than options on a commodity specifi-
cally set forth in section (2Xa) of this Act prior to enactment 
of the Commodity Futures Trading Commission Act of 
1974," immediately after "The Commission may permit 
persons not domiciled in the United States to grant options 
under this subsection". 
96 STAT. 2302 
PUBLIC LAW 97-444—JAN. 11, 1983 
INTRODUCING BROKER; REGISTRATION REQUIREMENT 
SEC. 207. Section 4d of the Commodity Exchange Act (7 U.S.C. 6d) 
is amended by— 
(1) inserting in the introductory clause "or introducing 
broker" after "futures commission merchant"; 
(2) inserting in paragraph (1) "or introducing broker" after 
"futures commission merchant"; and 
(3) inserting in paragraph (2) "if a futures commission mer-
chant," after "such person shall,". 
REGISTRATION PROCEDURE; TECHNICAL AMENDMENTS 
SEC. 208. Section 4f of the Commodity Exchange Act (7 U.S.C. 6f) is 
amended by— 
(1) amending subsection (1) to read as follows: 
"(1) Any person desiring to register as a futures commission 
merchant, introducing broker, or floor broker hereunder shall 
be registered upon application to the Commission. The applica-
tion sh^l be made in such form and manner as prescribed by 
the Commission, giving such information and facts as the Com-
mission may deem necessary concerning the business in which 
the applicant is or will be engaged, including in the case of an 
application of a futures commission merchant or an introducing 
broker, the names and addresses of the managers of all branch 
offices, and the names of such officers and partners, if a part-
nership, and of such officers, directors, and stockholders, if a 
corporation, as the Commission may direct. Such person, when 
registered hereunder, shall likewise continue to report and 
furnish to the Commission the above-mentioned information 
and such other information pertaining to such person's business 
Expiration date. 
as the Commission may require. Each registration shall expire 
on December 31 of the year for which issued or at such other 
time, not less than one year from the date of issuance, as the 
Commission may by rule, regulation, or order prescribe, and 
shall be renewed upon application therefor unless the registra-
tion has been suspended (and the period of such suspension has 
not expired) or revoked pursuant to the provisions of this Act."; 
and 
(2) inserting in subsection (2) "or as introducing broker" after 
"futures commission merchant". 
INTRODUCING BROKERS; REPORTS, BOOKS, AND RECORDS 
SEC. 209. Section 4g of the Commodity Exchange Act (7 U.S.C. 6g) 
is amended by— 
(1) inserting in subsection (1) ", introducing broker," after 
"futures commission merchant"; and 
(2) inserting in subsection (3) ", introducing brokers," after 
"Floor brokers". 
MISREPRESENTATION OF STATUS; TECHNICAL AMENDMENTS 
SEC. 210. Section 4h of the Commodity Exchange Act (7 U.S.C. 6h) 
is amended to read as follows: 
"SEC. 4h. It shall be unlawful for any person falsely to represent 
such person to be a member of a contract market or the representa-
PUBLIC LAW 97-444—JAN. 11, 1983 
96 STAT. 2303 
tive or agent of such member, or to be a registrant under this Act or 
the representative or agent of any registrant, in soliciting or han-
dling any order or contract for the purchase or sale of any commod-
ity in interstate commerce or for future delivery, or falsely to 
represent in connection with the handling of any such order or 
contract that the same is to be or has been executed on, or by or 
through a member of, any contract market.". 
RECORDKEEPING CONFORMED TO CURRENT SYSTEM; LARGE TRADER 
REPORTS 
SEC. 211. Section 4i of the Commodity Exchange Act (7 U.S.C. 6i) is 
amended to read as follows: 
"SEC. 4i. It shall be unlawful for any person to make any contract 
for the purchase or sale of any commodity for future delivery on or 
subject to the rules of any contract market— 
"(1) if such person shall directly or indirectly make such 
contracts with respect to any commodity or any future of such 
commodity during any one day in an amount equal to or in 
excess of such amount as shall be fixed from time to time by the 
Commission, and 
"(2) if such person shall directly or indirectly have or obtain a 
long or short position in any commodity or any future of such 
commodity equal to or in excess of such amount as shall be fixed 
from time to time by the Commission, 
unless such person files or causes to be filed with the properly 
designated officer of the Commission such reports regarding any 
transactions or positions described in clauses (1) and (2) hereof as the 
Commission may by rule or regulation require and unless, in accord-
ance with rules £ind regulations of the Commission, such person 
shall keep books and records of all such transactions and positions 
and transactions and positions in any such commodity traded on or 
subject to the rules of any other board of trade, and of cash or spot 
transactions in, and inventories and purchase and sale commit-
ments of such commodity. Such books and records shall show com-
plete details concerning all such transactions, positions, inventories, 
and commitments, including the names and addresses of all persons 
having any interest therein, and shall be open at all times to 
inspection by any representative of the Commission or the Depart-
ment of Justice. For the purposes of this section, the futures and 
cash or spot transactions and positions of any person shall include 
such transactions and positions of any persons directly or indirectly 
controlled by such person.". 
REGISTRATION; ASSOCIATED PERSON STATUS 
SEC. 212. Section 4k of the Commodity Exchange Act (7 U.S.C. 6k) 
is amended to read as follows: 
"SEC. 4k. (1) It shall be unlawful for any person to be associated 
with a futures commission merchant as a partner, officer, or 
employee, or to be associated with an introducing broker as a 
partner, officer, employee, or agent (or any person occupying a 
similar status or performing similar functions), in any capacity that 
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, unless such person is registered with the Com-
mission under this Act as an associated person of such futures 
96 STAT. 2304 
PUBLIC LAW 97-444—JAN. 11, 1983 
commission merchant or of such introducing broker and such regis-
tration shall not have expired, been suspended (and the period of 
suspension has not expired), or been revoked. It shall be unlawful 
for a futures commission merchant or introducing broker to permit 
such a person to become or remain associated with the futures 
commission merchant or introducing broker in any such capacity if 
such futures commission merchant or introducing broker knew or 
should have known that such person was not so registered or that 
such registration had expired, been suspended (and the period of 
suspension has not expired), or been revoked. Any individual who is 
registered as a floor broker, futures commission merchant, or intro-
ducing broker (and such registration is not suspended or revoked) 
need not also register under this subsection. 
"(2) It shall be unlawful for any person to be Eissociated with a 
commodity pool operator as a partner, officer, employee, consultant, 
or agent (or any person occupying a similar status or performing 
similar functions), in any capacity that involves (i) the solicitation of 
funds, securities, or property for a participation in a commodity pool 
or (ii) the supervision of any person or persons so engaged, unless 
such person is registered with the Commission under this Act as an 
associated person of such commodity pool operator and such regis-
tration shgdl not have expired, been suspended (and the period of 
suspension has not expired), or been revoked. It shall be unlawful 
for a commodity pool operator to permit such a person to become or 
remain associated with the commodity pool operator in any such 
capacity if the commodity pool operator knew or should have known 
that such person was not so registered or that such registration had 
expired, been suspended (and the period of suspension has not 
expired), or been revoked. Any individual who is registered as a floor 
broker, futures commission merchant, introducing broker, commod-
ity pool operator, or as an associated person of another category of 
registrant under this section (and such registration is not suspended 
or revoked) need not also register under this subsection. The Com-
mission may exempt any person or class of persons from having to 
register under this subsection by rule, regulation, or order. 
"(3) It shall be unlawful for any person to be associated with a 
commodity trading advisor as a partner, officer, employee, consul-
tant, or agent (or any person occupying a similar status or perform-
ing similar functions), in any capacity which involves (i) the 
solicitation of a client's or prospective client's discretionary account 
or (ii) the supervision of any person or persons so engaged, unless 
such person is registered with the Commission under this Act as an 
associated person of such commodity trading advisor and such regis-
tration shall not have expired, been suspended (and the period of 
suspension has not expired), or been revoked. It shall be unlawful 
for a commodity trading advisor to permit such a person to become 
or remain associated with the commodity trading advisor in any 
such capacity if the commodity trading advisor knew or should have 
known that such person was not so registered or that such registra-
tion had expired, been suspended (and the period of suspension has 
not expired), or been revoked. Any individual who is registered as a 
floor broker, futures commission merchant, introducing broker, 
commodity trading advisor, or as an associated person of another 
category of registrant under this section (and such registration is 
not suspended or revoked) need not also register under this subsec-
tion. The Commission may exempt any person or class of persons 
PUBLIC LAW 97-444—JAN. 11, 1983 
96 STAT. 2305 
from having to register under this subsection by rule, regulation, or 
order. 
"(4) Any person desiring to be registered as an associated person 
of a futures commission merchant, of an introducing broker, of a 
commodity pool operator, or of a commodity trading advisor shall 
make application to the Commission in the form and manner pre-
scribed by the Commission, giving such information and facts as the 
Commission may deem necessary concerning the applicant. Such 
person, when registered hereunder, shall likewise continue to report 
and furnish to the Commission such information as the Commission 
may require. Such registration shall expire at such time as the 
Commission may by rule, regulation, or order prescribe. 
"(5) It shall be unlawful for any registrant to permit a person to 
become or remain an associated person of such registrant, if the 
registrant knew or should have known of facts regarding such 
associated person that are set forth as statutory disqualifications in 
section 8a(2) of this Act, unless such registrant has notified the Post, p. 2310. 
Commission of such facts and the Commission has determined that 
such person should be registered or temporarily licensed.". 
CONFORMING AMENDMENT 
SEC. 213. Section 4n of the Commodity Exchange Act (7 U.S.C. 6n) 
is amended by striking out subsections (5) and (6). 
EXTENSION OF ANTIFRAUD PROVISION 
SEC. 214. Section 4o of the Commodity Exchange Act (7 U.S.C. 6o) 
is amended to read as follows: 
"SEC. 4o. (1) It shall be unlawful for a commodity trading advisor, 7 use 6o. 
associated person of a commodity trading advisor, commodity pool 
operator, or associated person of a commodity pool operator by use 
of the mails or any means or instrumentality of interstate com-
merce, directly or indirectly— 
"(A) to employ any device, scheme, or artifice to defraud any 
client or participant or prospective client or participant; or 
"(B) to engage in any transaction, practice, or course of 
business which operates as a fraud or deceit upon any client or 
participant or prospective client or participant. 
"(2) It shall be unlawful for any commoidity trading advisor, 
associated person of a commodity trading advisor, commodity pool 
operator, or associated person of a commodity pool operator regis-
tered under this Act to represent or imply in any manner what-
soever that such person has been sponsored, recommended, or 
approved, or that such person's abilities or qualifications have in 
any respect been passed upon, by the United States or any agency or 
officer thereof. This section shall not be construed to prohibit a 
statement that a person is registered under this Act as a commodity 
trading advisor, associated person of a commodity trading advisor, 
commodity pool operator, or associated person of a commodity pool 
operator, if such statement is true in fact and if the effect of such 
registration is not misrepresented.". 
EXTENSION OF AUTHORITY REGARDING PROFICIENCY EXAMINATIONS 
SEC. 215. Section 4p of the Commodity Exchange Act (7 U.S.C. 6p) 
is £unended by— 
96 STAT. 2306 
PUBLIC LAW 97-444—JAN. 11, 1983 
(1) striking out in the first sentence "futures commission 
merchants, floor brokers, and those persons associated with 
futures commission merchants or floor brokers" and inserting 
in lieu thereof "persons required to be registered with the 
Commission"; 
(2) striking out in the second and third sentences "as futures 
commission merchants, floor brokers, and those persons associ-
ated with futures commission merchants or floor brokers,"; and 
(3) striking out in the last sentence "the customers of futures 
commission merchants and floor brokers" and inserting in lieu 
thereof "customers, clients, pool participants, or other members 
of the public with whom such individuals deal". 
CONTRACT MARKET RULES 
SEC. 216. Section 5a of the Commodity Exchange Act (7 U.S.C. 7a) 
is amended by— 
(1) amending paragraph (8) to read as follows: 
"(8) enforce all bylaws, rules, regulations, and resolutions, 
made or issued by it or by the governing board thereof or any 
committee, that (i) have been approved by the Commission 
pursuemt to paragraph (12) of this section, (ii) have become 
effective under such paragraph, or (iii) must be enforced pursu-
ant to any Commission rule, regulation, or order; and revoke 
and not enforce any bylaw, rule, regulation, or resolution, made, 
issued, or proposed by it or by the governing board thereof or 
any committee, that has been disapproved by the Commission;"; 
(2) amending paragraph (12) to read as follows: 
"(12) except as otherwise provided in this paragraph, submit 
to the Commission for its prior approval all bylaws, rules, 
regulations, and resolutions ('rules') made or issued by such 
contract market, or by the governing board thereof or any 
committee thereof, that relate to terms and conditions in con-
tracts of sale to be executed on or subject to the rules of such 
contract market, as such terms and conditions are defined by 
the Commission by rule or regulation, except those rules relat-
ing to the setting of levels of margin. Each contract market 
shall submit to the Commission all other rules (except those 
relating to the setting of levels of margin and except those that 
the Commission may specify by regulation) and may make such 
rules effective ten days after receipt of such submission by the 
Commission unless, within the ten-day period, the contract 
market requests review and approval thereof by the (Dommis-
sion or the Commission notifies such contract market in writing 
of its determination to review such rules for approval. The 
determination to review such rules for approval shall not be 
delegable to any employee of the Commission. At least thirty 
days before approving any rules of major economic significance, 
as determined by the Commission, the Commission shall publish 
a notice of such rules in the Federal Register. The Commission 
shall give interested persons an opportunity to particpate in the 
approval process through the submission of written date, views, 
or arguments. The determination by the Commission whether 
any such rules are of major economic significance shall be final 
and not subject to judicial review. The C!ommission shall 
approve such rules if such rules are determined by the Commis-
sion not to be in violation of this Act or the regulations of the 
PUBLIC LAW 97-444—JAN. 11, 1983 
96 STAT. 2307 
Commission and the Commission shall disapprove, after appro-
priate notice and opportunity for hearing, any such rule which 
the Commission determines at any time to be in violation of the 
provisions of this Act or the regulations of the Commission. If 
the Commission institutes proceedings to determine whether a 
rule should be disapproved pursuant to this paragraph, it shall 
provide the contract market with written notice of the proposed 
grounds for disapproval, including the specific sections of this 
Act or the Commission's regulations which would be violated. 
At the conclusion of such proceedings, the Commission shall 
approve or disapprove such rule. Any disapproval shall specify 
the sections of this Act or the Commission's regulations which 
the Commission determines such rule has violated or, if effec-
tive, would violate. If the Commission does not approve or 
institute disapproval proceedings with respect to any rule 
within one hundred and eighty days after receipt or within such 
longer period as the contract market may agree to, or if the 
Commission does not conclude a disapproval proceeding with 
respect to any rule within one year after receipt or within such 
longer period as the contract market may agree to, such rule 
may be made effective by the contract market until such time 
as the Commission disapproves such rule in accordance with 
this paragraph. The Commission shall specify the terms and 
conditions under which a contract market may, in an emer-
gency as defined by the Commission, make a rule effective on a 
temporary basis without prior Commission approval, or without 
compliance with the ten-day notice requirement under this 
paragraph, or during any period of review by the Commission. 
In the event of such an emergency, as defined by the Commis-
sion, requiring immediate action, the contract market by a two- . 
thirds vote of its governing board may immediately make 
effective a temporary rule dealing with such emergency if the 
contract market notifies the Commission of such action with a 
complete explanation of the emergency involved.". 
ARBITRATION 
SEC. 217. (a) Section 5a(ll) of the Commodity Exchange Act (7 
U.S.C. 7a(ll)) is amended to read as follows: 
"(11) provide a fair and equitable procedure through arbitra-
tion or otherwise (such as by delegation to a registered futures 
association having rules providing for such procedures) for the 
settlement of customers' claims and grievances against any 
member or employee thereof: Provided, That (i) the use of such 
procedure by a customer shall be voluntary and (ii) the term 
'customer' as used in this paragraph shall not include another 
member of the contract market; and", 
(b) Section 17(bX10) of the Commodity Exchange Act (7 U.S.C. 
21(bX10)) is amended to read as follows: 
"(10) the rules of the association provide a fair, equitable, and 
expeditious procedure through arbitration or otherwise for the 
settlement of customers' claims and grievances against any 
member or employee thereof: Provided, That (i) the use of such 
procedure by a customer shall be voluntary and (ii) the term 
'customer' as used in this paragraph shall not include another 
member of the association.". 
96 STAT. 2308 
PUBLIC LAW 97-444—JAN. 11, 1983 
CONTRACT MARKET DESIGNATION PROCEDURES 
SEC. 218. Section 6 of the Commodity Exchange Act (7 U.S.C. 8) is 
amended by inserting immediately after the first sentence the 
following: "The Commission shall approve or deny an application for 
designation as a contract market within one year of the filing of the 
application. If the Commission notifies the board of trade that its 
application is materially incomplete and specifies the deficiencies in 
the application, the running of the one-year period shall be stayed 
from the time of such notification until the application is resubmit-
ted in completed form: Provided, That the Commission shall have 
not less than sixty days to approve or deny the application from the 
time the application is resubmitted in completed form. If the Com-
mission denies an application, it shall specify the grounds for the 
denial.". 
APPEALS; CONFORMING AMENDMENT 
SEC. 219. Section 6(b) of the Commodity Exchange Act (7 U.S.C. 9) 
is amended by— 
(1) striking out in the first and ninth sentences "as futures 
commission merchant or any person associated therewith as 
Ante, p. 2303. 
described in section 4k of this Act, commodity trading advisor, 
commodity pool operator, or as floor broker hereunder" and 
inserting in lieu thereof "with the Commission in any capacity"; 
and 
(2) inserting in the eleventh sentence after "doing business" 
the words ", or in the case of an order denying registration, the 
circuit in which the petitioner's principal place of business 
listed on petitioner's application for registration is located,". 
RESTRAINING ORDERS 
SEC. 220. Section 6c of the Commodity Exchange Act (7 U.S.C. 
13a-l) is amended by inserting in the proviso contained in the first 
sentence after "no restraining order" the following: "(other than a 
restraining order which prohibits any person from destroying, alter-
ing or disposing of, or refusing to permit authorized representatives 
of the Commission to inspect, when and as requested, any books and 
records or other documents or which prohibits any person from 
withdrawing, transferring, removing, dissipating, or disposing of 
any funds, assets, or other property)". 
STATE ANTIFRAUD JURISDICTION 
SEC. 221. Section 6d of the Commodity Exchange Act (7 U.S.C. 
13a-2) is amended by adding at the end thereof the following new 
subsection: 
"(8)(A) Nothing in this Act shall prohibit an authorized State 
official from proceeding in a State court against any person regis-
tered under this Act (other than a floor broker or registered futures 
association) for an alleged violation of any antifraud provision of 
this Act or any antifraud rule, regulation, or order issued pursuant 
to the Act. 
"(B) The State shall give the Commission prior written notice of 
its intent to proceed before instituting a proceeding in State court as 
described in this subsection and shall furnish the Commission with a 
copy of its complaint immediately upon instituting any such pro-
PUBLIC LAW 97-444—JAN. 11, 1983 
96 STAT. 2309 
ceeding. The Commission shall have the right to (i) intervene in the 
proceeding and, upon doing so, shall be heard on all matters arising 
therein, and (ii) file a petition for appeal. The Commission or the 
defendant may remove such proceeding to the district court of the 
United States for the proper district by following the procedure for 
removal otherwise provided by law, except that the petition for 
removal shall be filed within sixty days after service of the summons 
and complaint upon the defendant. The Commission shall have the 
right to appear as amicus curiae in any such proceeding.". 
CONFIDENTIALITY PROVISIONS; DISCLOSURE 
SEC. 222. Section 8 of the Commodity Exchange Act (7 U.S.C. 12) is 
amended by— 
(1) inserting immediately before the period at the end of 
subsection (a) the following: ": Provided further. That the Com-
mission may withhold from public disclosure any data or infor-
mation concerning or obtained in connection with any pending 
investigation of any person"; 
(2) amending subsection Qoi) by— 
(A) striking out "or" before "in an administrative or 
judicisil proceeding"; and 
(B) inserting immediately before the period at the end 
thereof ", in any receivership proceeding involving a 
receiver appointed in a judicial proceeding brought under 
this Act, or in any bankruptcy proceeding in which the Com-
mission has intervened or in which the Commission has 
the right to appear and be heard under title 11 of 
the United States Code"; 
(3) amending subsection (e) by— 
(A) striking out "of the Executive Branch"; and 
(B) adding at the end thereof the following: "Upon the 
request of any department or agency of any State or any 
political subdivision thereof, acting within the scope of its 
jurisdiction, or any department or agency of any foreign 
government or any political subdivision thereof, acting 
within the scope of its jurisdiction, the Commission may 
furnish to such department or agency any information in 
the possession of the Commission obtained in connection 
with the administration of this Act. Any information fur-
nished to any department or agency of any State or political 
subdivision 
thereof shall not be disclosed by 
such 
department or agency except in connection with an adjudi-
catory action or proceeding brought under this Act or the 
laws of such State or political subdivision to which such 
State or political subdivision or any department or agency 
thereof is a party. The Commission shall not furnish any 
information to a department or agency of a foreign govern-
ment or political subdivision thereof unless the Commission 
is satisfied that the information will not be disclosed by 
such department or agency except in connection with an 
adjudicatory action or proceeding brought under the laws of 
such foreign government or political subdivision to which 
such foreign government or political subdivision or any 
department or agency thereof is a party."; 
(4) redesignating subsections (f) and (g) as subsections (h) and 
(i), respectively; and 
96 STAT. 2310 
PUBLIC LAW 97-444—JAN. 11, 1983 
(5) adding new subsections (f) and (g) to read as follows: 
"(f) The Commission shall disclose information in its possession 
pursuant to a subpena or summons only if— 
"(1) a copy of the subpena or summons has been mailed to the 
last known home or business address of the person who submit-
ted the information that is the subject of the subpena or sum-
mons, if the address is known to the Commission, or, if such 
mailing would be unduly burdensome, the Commission provides 
other appropriate notice of the subpena or summons to such 
person, and 
"(2) at least fourteen days have expired from the date of such 
mailing of the subpena or summons, or such other notice. 
This subsection shall not apply to congressional subpenas or con-
gressional requests for information. 
"(g) The Commission shall provide any registration information 
maintained by the Commission on any registrant upon reasonable 
request made by any department or agency of any State or any 
political subdivision thereof. Whenever the Commission determines 
that such information may be appropriate for use by any depart-
ment or agency of a State or political subdivision thereof, the 
Commission shall provide such information without request.". 
REGISTRATION AUTHORITY; TEMPORARY LICENSE 
SEC. 223. Section Sad) of the Commodity Exchange Act (7 U.S.C. 
12a(l)) is amended to read as follows: 
"(1) to register futures commission merchants, associated per-
sons of futures commission merchants, introducing brokers, 
associated persons of introducing brokers, commodity trading 
advisors, associated persons of commodity trading advisors, com-
modity pool operators, associated persons of commodity pool 
operators, and floor brokers upon application in accordance 
with rules and regulations and in the form and manner to be 
prescribed by the Commission, which may require the applicant, 
and such persons associated with the applicant as the Commis-
sion may specify, to be fingerprinted and to submit, or cause to 
be submitted, such fingerprints to the Attorney General for 
identification and appropriate processing, and in connection 
therewith to fix and establish from time to time reasonable fees 
and charges for registrations and renewals thereof: Provided, 
That notwithstanding any provision of this Act, the Commission 
may grant a temporary license to any applicant for registration 
with the Commission pursuant to such rules, regulations, or 
orders as the Commission may adopt, except that the term of 
any such temporary license shall not exceed six months from 
the date of its issuance;". 
STATUTORY DISQUAUFICATION FROM REGISTRATION; DELEGATION OF 
REGISTRATION FUNCTIONS 
SEC. 224. Section 8a of the Commodity Exchange Act (7 U.S.C. 12a) 
is amended by— 
(1) amending paragraph (2) to read as follows: 
"(2) upon notice, but without a hearing and pursuant to such 
rules, regulations, or orders as the Commission may adopt, to 
refuse to register, to register conditionally, or to suspend or 
place restrictions upon the registration of, any person and with 
PUBLIC LAW 97-444—JAN. 11, 1983 
96 STAT. 2311 
such a hearing as may be appropriate to revoke the registration 
of any person— 
(A) if a prior registration of such person in any capacity 
has been suspended (and the period of such suspension has 
not expired) or has been revoked; 
"(B) if registration of such person in any capacity has 
been refused under the provisions of paragraph (3) of this 
section within five years preceding the filing of the applica-
tion for registration or at any time thereafter; 
"(C) if such person is permanently or temporarily 
enjoined by order, judgment, or decree of any court of 
competent jurisdiction (except that registration may not be 
revoked solely on the basis of such temporary order, judg-
ment, or decree), including an order entered pursuant to an 
agreement of settlement to which the Commission or any 
Federal or State agency or other governmental body is a 
party, from (i) acting as a futures commission merchant, 
introducing broker, floor broker, commodity trading advi-
sor, commodity pool operator, eissociated person of any 
registrant under this Act, securities broker, securities 
dealer, municipal securities broker, municipal securities 
dealer, transfer agent, clearing agency, securities informa-
tion processor, investment adviser, investment company, or 
affiliated person or employee of any of the foregoing or (ii) 
engaging in or continuing any activity involving any trans-
action in or advice concerning contracts of sale of a com-
modity for future delivery, concerning matters subject to 
Commission regulation under section 4c or 19 of this Act, or ^ use 6c, 23. 
concerning securities; 
"(D) if such person has been convicted within ten years 
preceding the filing of the application for registration or at 
any time thereafter of any felony that (i) involves any 
transactions or advice concerning any contract of sale of a 
commodity for future delivery, or any activity subject to 
Commission regulation under section 4c or 19 of this Act, or 
concerning a security, (ii) arises out of the conduct of the 
business of a futures commission merchant, introducing 
broker, floor broker, commodity trading advisor, commodity 
pool operator, associated person of any registrant under 
this Act, securities broker, securities dealer, municipal 
securities broker, municipal securities dealer, transfer 
agent, clearing agency, securities information processor, 
investment adviser, investment company, or an affiliated 
person or employee of any of the foregoing, (iii) involves 
embezzlement, theft, extortion, fraud, fraudulent conver-
sion, misappropriation of funds, securities or property, for-
gery, counterfeiting, false pretenses, bribery, or gambling, or 
(iv) involves the violation of section 152,1341,1342, or 1343, 
or chapter 25, 47, 95, or 96 of title 18, United States Code; 18 use 471 et 
"(E) if such person, within ten years preceding the filing f^^^ ^^^^ ^^ *f,'?-i 
of the application or at any time thereafter, has been found g
^ g^q *^^' 
by any court of competent jurisdiction, by the Commission 
or any Federal or State agency or other governmental body, 
or by agreement of settlement to which the Commission or 
any Federal or State agency or other governmental body is 
a party, (i) to have violated any provision of this Act, the 
Securities Act of 1933, the Securities Exchange Act of 1934, 15 use 77a, 78a. 
96 STAT. 2312 
PUBLIC LAW 97-444—JAN. 11, 1983 
15 use 79, 
77aaa, 80b-20, 
80a-51, 78aaa, 
78a note. 
7 use 9. 
"Principal." 
the Public Utility Holding Company Act of 1935, the Trust 
Indenture Act of 1939, the Investment Advisers Act of 1940, 
the Investment Company Act of 1940, the Securities Inves-
tors Protection Act of 1970, the Foreign Corrupt Practices 
Act of 1977, or any similar statute of a State or foreign 
jurisdiction, or any rule, regulation, or order under any 
such statutes, or the rules of the Municipal Securities 
Rulemaking Board where such violation involves embezzle-
ment, then, extortion, fraud, fraudulent conversion, mis-
appropriation of funds, securities or property, forgery, 
counterfeiting, false pretenses, bribery, or gambling, or (ii) 
to have willfully aided, abetted, counseled, commanded, 
induced, or procured such violation by any other person; 
"(F) if such person is subject to an outstanding order of 
the Commission denying trading privileges on any contract 
market to such person, denying, suspending, or revoking 
such person's membership in any contract market or regis-
tered futures association, or barring or suspending such 
person from being associated with a registrant under this 
Act or with a member of a contract market or with a 
member of a registered futures association; 
"(G) if, as to any of the matters set forth in subpara-
graphs (A) through (F) of this paragraph, such person will-
fully made any material false or misleading statement or 
omitted to state any material fact in such person's applica-
tion; or 
"(H) if refusal, suspension, or revocation of the registra-
tion of anv principal of such person would be warranted 
because of a statutory disqualification listed in this para-
graph: 
Provided, That such person may appeal from a decision to refuse 
registration, condition registration, suspend, revoke or to place 
restrictions upon registration made pursuant to the provisions 
of this paragraph in the manner provided in section 6(b) of this 
Act; and 
Provided, further, That for the purposes of paragraphs (2) and 
(3) of this section, 'principal' shall mean, if the person is a 
partnership, any general partner or, if the person is a corpora-
tion, any officer, director, or beneficial owner of at least 10 per 
centum of the voting shares of the corporation, and any other 
person that the Commission by rule, regulation, or order deter-
mines has the power, directly or indirectly, through agreement 
or otherwise, to exercise a controlling influence over the activi-
ties of such person which are subject to regulation by the 
Commission;"; 
(2) striking out paragraph (4) and redesignating paragraph (3) 
as paragraph (4); 
(3) inserting a new paragraph (3) to read as follows: 
"(3) to refuse to register or to register conditionally any 
person, if it is found, after opportunity for hearing, that— 
"(A) such person has been found by the Commission or by 
any court of competent jurisdiction to have violated, or has 
consented to findings of a violation of, any provision of this 
Act, or any rule, regulation, or order thereunder (other 
than a violation set forth in paragraph (2) of this section), or 
to have willfully aided, abetted, counseled, commanded, 
induced, or procured the violation by any other person of 
any such provision; 
PUBLIC LAW 97-444—JAN. 11, 1983 
96 STAT. 2313 
"(B) such person has been found by any court of compe-
tent jurisdiction or by any Federal or State agency or other 
governmental body, or by agreement of settlement to which 
any Federal or State agency or other governmental body is 
a party, (i) to have violated any provision of the Securities 
Act of 1933, the Securities Exchange Act of 1934, the Public 
15 use 77a, 78a, 
Utility Holding Ck)mpany Act of 1935, the Trust Indenture 80b-20^86a-5i 
Act of 1939, the Investment Advisers Act of 1940, the 78aaa, Vsa note. 
Investment Company Act of 1940, the Securities Investors 
Protection Act of 1970, the Foreign Corrupt Practices Act of 
1977, or any similar statute of a State or foreign jurisdic-
tion, or any rule, regulation, or order under any such 
statutes, or the rules of the Municipal Securities Rulemak-
ing Board or (ii) to have willfully aided, abetted, counseled, 
commanded, induced, or procured such violation by any 
other person; 
"(C) such person failed reasonably to supervise another 
person, who is subject to such person's supervision, with a 
view to preventing violations of this Act, or of any of the 
statutes set forth in subparagraph (B) of this paragraph, or 
of any of the rules, regulations, or orders thereunder, and 
the person subject to supervision committed such a viola-
tion: Provided, That no person shall be deemed to have 
failed reasonably to supervise another person, within the 
meaning of this subparagraph if (i) there have been estab-
lished procedures, and a system for applying such proce-
dures, which would reasonably be expected to prevent and 
detect, insofar as practicable, any such violation by such 
other person and (ii) such person has reasonably discharged 
the duties and obligations incumbent upon that person, as 
supervisor, by reason of such procedures and system, with-
out reasonable cause to believe that such procedures and 
system were not being complied with; 
"(D) such person was convicted of a felony other than a 
felony of the tjrpe specified in paragraph (2XD) of this 
section within ten years preceding the filing of the applica-
tion or at any time thereafter, or was convicted of a felony, 
including a felony of the type specified in paragraph (2)(D) 
of this section, more than ten years prece^ng the filing of 
the application; 
"(E) such person was convicted within ten years preced-
ing the filing of the application for registration or at any 
time thereafter of any misdemeanor which (i) involves any 
transaction or advice concerning any contract of sale of a 
commodity for future delivery or any activity subject to 
Commission regulation under section 4c or 19 of this Act or 
concerning a security, (ii) arises out of the conduct of the 
business of a futures commission merchant, introducing 
broker, floor broker, commodity trading advisor, commodity 
pool operator, associated person of any registrant under 
this Act, securities broker, securities dealer, municipal 
securities broker, municipal securities dealer, transfer 
agent, clearing agency, securities information processor, 
investment adviser, investment company, or an affiliated 
person or employee of any of the foregoing, (iii) involves 
embezzlement, theft, extortion, fraud, fraudulent conver-
sion, misappropriation of funds, securities or property, for-
96 STAT. 2314 
PUBLIC LAW 97-444—JAN. 11, 1983 
gery, counterfeiting, false pretenses, bribery, or gambling, 
(iv) involves the violation of section 152, 1341, 1342, or 1343 
18 use 471 et 
or chapter 25, 47, 95, or 96 of title 18, United States Code; 
19^1 e?se ^
^ 1961 
'^^ such person was debarred by any agency of the 
etseq. ^^' 
United States from contracting with the United States; 
"(G) such person willfully made any material false or 
misleading statement or willfully omitted to state any 
material fact in such person's application, in any report 
required to be filed with the Commission by this Act or the 
regulations thereunder, or in any proceeding before the 
Commission; 
"(H) such person has pleaded nolo contendere to criminal 
charges of felonious conduct, or has been convicted in a 
State court or in a foreign court of conduct which would 
constitute a felony under Federal law if the offense had 
been committed under Federal jurisdiction; 
"(I) in the case of an applicant for registration in any 
capacity for which there are minimum financial require-
ments prescribed under this Act or under the rules or 
regulations of the Commission, such person has not estab-
lished that such person meets such minimum 
financial 
requirements; 
"(J) such person is subject to an outstanding order deny-
ing, suspen(hng, or expelling such person from membership 
in a contract market, a registered futures association, or 
any other self-regulatory organization, or barring or sus-
pending such person from being associated with any 
member or members of such contract market, association, 
or self-regulatory organization; 
"(K) such person has been found by any court of compe-
tent jurisdiction or by any Federal or State agency or other 
governmental body, or by agreement of settlement to which 
any Federal or State agency or other governmental body is 
a party, (i) to have violated any statute or any rule, regula-
tion, or order thereunder which involves embezzlement, 
theft, extortion, fraud, fraudulent conversion, misappropri-
ation of funds, securities or property, forgery, counterfeit-
ing, false pretenses, bribery, or gambling or (ii) to have 
willfully aided, abetted, counseled, commanded, induced or 
procured such violation by any other person; 
"(L) such person has associated with such person any 
other person and knows, or in the exercise of reasonable 
care should know, of facts regarding such other person that 
are set forth as statutory disqualifications in paragraph (2) 
of this section, unless such person has notified the Commis-
sion of such facts and the Commission has determined that 
such other person should be registered or temporarily 
licensed; 
"(M) there is other good cause; or 
"(N) any principal, as defined in paragraph (2) of this 
section, of such person has been or could be refused 
registration: 
Provided^ That pending final determination under this para-
graph, registration shall not be granted: Provided further. That 
such person may appeal from a decision to refuse registration or 
PUBLIC LAW 97-444—JAN. 11, 1983 
96 STAT. 2315 
to condition registration made pursuant to this paragraph in 
the manner provided in section 6(b) of this Act;"; 
^"^«' P- 2308. 
(4) amending paragraph (4), as redesignated, to read as 
follows: 
"(4) in accordance with the procedure provided for in section 
6(b) of this Act, to suspend, revoke, or place restrictions upon 
the registration of any person registered under this Act if cause 
exists under paragraph (3) of this section which would warrant 
a refusal of registration of such person, and to suspend or 
revoke the registration of any futures commission merchant or 
introducing broker who shall knowingly accept any order for 
the purchase or sale of any commodity for future delivery on or 
subject to the rules of any contract market from any person if 
such person has been denied trading privileges on any contract 
market by order of the Commission under section 6Cb) of this 
Act and the period of denial specified in such order shall not 
have expired: Provided, That such person may appeal from a 
decision to suspend, revoke, or place restrictions upon registra-
tion made pursuant to this paragraph in the manner provided 
in section 6(b) of this Act;"; 
(5) striking out "and" at the end of each of paragraphs (6), (7), 
and (8); and 
(6) adding a new paragraph (10) to read as follows: 
"(10) to authorize any person to perform any portion of the 
registration functions under this Act, in accordance with rules, 
notwithstanding any other provision of law, adopted by such 
person and submitted to the Commission for approval or, if 
applicable, for review pursuant to section 17(j) of this Act, and 7 use 21. 
subject to the provisions of this Act applicable to registrations 
granted by the Commission.". 
EMERGENCY POWERS; JUDICIAL REVIEW 
SEC. 225. Section 8a(9) of the Commodity Exchange Act (7 U.S.C. 
12a(9)) is amended to read as follows: 
"(9) to direct the contract market, whenever it has reason to 
believe that an emergency exists, to take such action as in the 
Commission's judgment is necessary to maintain or restore 
orderly trading in or liquidation of any futures contract, includ-
ing, but not limited to, the setting of temporary emergency 
margin levels on any futures contract, and the fixing of limits 
that may apply to a market position acquired in good faith prior 
to the effective date of the Commission's action. The term "Emergency." 
'emergency' as used herein shall mean, in addition to threatened 
or actual market manipulations and corners, any act of the 
United States or a foreign government affecting a commodity or 
any other major market disturbance which prevents the market 
from accurately reflecting the forces of supply and demand for 
such commodity. Any action taken by the Commission under 
this paragraph shall be subject to review only in the United 
States Court of Appeals for the circuit in which the party 
seeking review resides or has its principal place of business, or in 
the United States Court of Appeals for the District of Columbia 
Circuit. Such review shall be based upon an examination of all 
the information before the Commission at the time the determi-
nation was made. The court reviewing the Commission's action 
shall not enter a stay or order of mandamus unless it has 
96 STAT. 2316 
7 use 12d. 
PUBLIC LAW 97-444—JAN. 11, 1983 
determined, after notice and hearing before a panel of the court, 
that the agency action complained of was arbitrary, capricious, 
an abuse of discretion, or otherwise not in accordance with law. 
Nothing herein shall be deemed to limit the meaning or inter-
pretation given by a contract market to the terms 'market 
emergency', 'emergency', or equivalent language in its own 
bylaws, rules, regulations, or resolutions; and". 
EXPORT SALES REPORTING 
SEC. 226. The Commodity Exchange Act is amended by adding 
immediately after section 8c (7 U.S.C. 12c) the following new section: 
"SEC. 8d. The Commission may, in accordance with the procedures 
provided for in this Act, refuse to register, register conditionally, or 
suspend, place restrictions upon, or revoke the registration of, any 
person, and may bar for any period as it deems appropriate any 
person from using or participating in any manner in any market 
regulated by the Commission, if such person is subject to a final 
decision or order of any court of competent jurisdiction or agency of 
the United States finding such person to have knowingly violated 
any provision of the export sales reporting requirements of section 
812 of the Agricultural Act of 1970 (7 U.S.C. section 612c-3), or of any 
regulation issued thereunder.". 
"Value. 
Review. 
CERTAIN PROHIBITED TRANSACTIONS 
SEC. 227. Section 9 of the Commodity Exchange Act (7 U.S.C. 13) is 
amended by— 
(1) amending subsection (a) to read as follows: 
"(a) It shall be a felony punishable by a fine of not more than 
$500,000 or imprisonment for not more than five years, or both, 
together with the costs of prosecution, for any person registered or 
required to be registered under this Act, or any employee or agent 
thereof, to embezzle, steal, purloin, or with criminal intent convert 
to his own use or the use of another, any money, securities, or 
property having a value in excess of $100, which was received by 
such person or any employee or agent thereof to margin, guarantee, 
or secure the trades or contracts of any customer or accruing to such 
customer as a result of such trades or contracts or which otherwise 
was received from any customer, client, or pool participant in 
connection with the business of such person. Notwithstanding the 
foregoing, in the case of any violation described in the foregoing 
sentence by a person who is an individual, the fine shall not be more 
than $100,000, together with the costs of prosecution. The word 
'value' as used in this subsection means face, par, or market value, 
or cost price, either wholesale or retail, whichever is greater. A 
person convicted of a felony under this subsection shall be sus-
pended from registration under this Act and shall be denied regis-
tration or reregistration for five years or such longer period as the 
Comriission shall determine, unless the Commission determines 
that the imposition of such suspension or denial of registration or 
reregistration is not required to protect the public interest. The 
Commission may upon petition later review such disqualification 
and for good cause shown reduce the period thereof."; 
(2) amending subsection (b) by adding at the end thereof the 
following: "A person convicted of a felony under this subsection 
shall be suspended from any registration under this Act, denied 
registration or reregistration for five years or such longer 
PUBLIC LAW 97-444—JAN. 11, 1983 
96 STAT. 2317 
period as the Commission shall determine, and barred from 
using or participating in any manner in any market regulated 
by the Commission for five years or such longer period as the 
Commission shall determine on such terms and conditions as 
the Commission may prescribe, unless the Commission deter-
mines that the imposition of such suspension, denial of registra-
tion or reregistration, or market bar is not required to protect 
the public interest. The Commission may upon petition later Review. 
review such disqualification and market bar and for good cause 
shown reduce the period thereof."; 
(3) amending subsection (c) by adding at the end thereof the 
following: "A person convicted under this subsection of know-
ingly violating the provisions of section 4a shall be suspended ^ use 6a. 
from any registration under this Act, denied registration or 
reregistration for a period of two years or such longer period as 
the Commission shall determine, and barred from using or 
participating in any manner in any market regulated by the 
Commission for two years or such longer period as the Commis-
sion shall determine on such terms and conditions as the Com-
mission may prescribe, unless the Commission determines that 
the imposition of such suspension, denial of registration or 
reregistration, or market bar is not required to protect the 
public interest. The Commission may upon petition later review Review. 
such disqualification and market bar and for good cause shown 
reduce the period thereof."; 
(4) amending subsection (d) to read as follows: 
"(d) It shall be a felony punishable by a fine of not more than 
$100,000 or imprisonment for not more than five years, or both, 
together with the costs of prosecution, for any Commissioner of the 
Commission or any employee or agent thereof, to participate, 
directly or indirectly, in any transaction in commodity futures or 
any transaction of the character of or which is commonly known to 
the trade as an 'option', 'privilege', 'indemnity', 'bid', 'offer', 'put', 
'call', 'advance guarantee', or 'decline guaranty', or any transaction 
for the delivery of any commodity under a standardized contract 
commonly known to the trade as a margin account, margin contract, 
leverage account, or leverage contract, or under any contract, 
account, arrangement, scheme, or device that the Commission deter-
mines serves the same function or functions as such a standardized 
contract, or is marketed or managed in substantially the same 
manner as such a standardized contract, or for any such person to 
participate, directly or indirectly, in any investment transaction in 
an actual commodity. Such prohibition against any investment 
transaction in an actual commodity shall not apply to (1) a transac-
tion in which such person buys an agricultural commodity or live-
stock for use in such person's own farming or ranching operations or 
sells an agricultural commodity which such person has produced in 
connection with such person's own farming or ranching operations 
nor to any transaction in which such person sells livestock owned by 
such person for at least three months, (2) a transaction entered into 
by the trustee of a trust established by such person over which such 
person exercises no control if such transaction is entered into solely 
to hedge against adverse price changes in connection with such 
farming or ranching operations or is a transaction for the lease of oil 
or gas or other mineral rights or interests owned by such person, or 
(3) a transaction in which such person buys or sells, directly or 
indirectly (except by means of an instrument regulated by the 
96 STAT. 2318 
PUBLIC LAW 97-444—JAN. 11, 1983 
Commission), a United States Government security, a certificate of 
deposit, or a similar financisil instrument if no nonpublic informa-
tion is used by such person in such transaction. With respect to such 
excepted transactions, the Commission shall require any Commis-
sioner of the Commission or any employee or agent thereof who 
participates in any such transaction to notify the Commission 
thereof in accordance with such regulations as the Commission shall 
prescribe and the Commission shall make such information availa-
ble to the public"; and 
(5) inserting after the words " 'decline guaranty' " each place 
they appear in subsection (e) the following: ", or in any transac-
tion for the delivery of any commodity under a standardized 
contract commonly known to the trade as a margin account, 
margin contract, leverage account, or leverage contract, or 
under any contract, account, arrangement, scheme, or device 
that the Commission determines serves the same function or 
functions as such a standardized contract, or is marketed or 
managed in substantially the seime manner as such a standard-
ized contract". 
REAUTHORIZATION 
SEC. 228. Section 12(d) of the Commodity Exchange Act (7 U.S.C. 
16(d)) is amended to read as follows: 
Appropriation 
"(d) There are hereby authorized to be appropriated to carry out 
authorization. 
^j^g provisions of this Act such sums as may be required for each of 
the fiscal years during the period beginning October 1, 1982, and 
ending September 30,1986.". 
OFF-EXCHANGE JURISDICTION; ROLE OF STATES 
SEC. 229. Section 12 of the Commodity Exchange Act (7 U.S.C. 16) 
is amended by adding at the end thereof the following new 
subsection: 
"(e) Nothing in this Act shall supersede or preempt— 
"(1) criminal prosecution under any Federal criminal statute; 
"(2) the application of any Federal or State statute, including 
any rule or regulation thereunder, to any transaction in or 
involving any commodity, product, right, service, or interest (A) 
that is not conducted on or subject to the rules of a contract 
market, or (B) (except as otherwise specified by the Commission 
by rule or regulation) that is not conducted on or subject to the 
rules of any board of trade, exchange, or market located outside 
the United States, its territories or possessions, or (C) that is not 
subject to regulation by the C!ommission under section 4c or 19 
7 use 6c, 23. 
of this Act; or 
"(3) the application of any Federal or State statute, including 
any rule or regulation thereunder, to any person required to be 
registered or designated under this Act who shall fail or refuse 
to obtain such registration or designation. 
The Commission may refer any trginsaction or matter subject to 
such other Federed or State statutes to any department or agency 
administering such statutes for such investigation, action, or pro-
ceedings as that department or agency shall deem appropriate.". 
PUBLIC LAW 97-444—JAN. 11, 1983 
96 STAT. 2319 
AIDING AND ABETTING; CONTROLLING PERSON 
SEC. 230. Section 13 of the Commodity Exchange Act (7 U.S.C. 13c) 
is amended by— 
(1) striking out "in administrative proceedings under this 
Act" in subsection (a); 
(2) redesignating subsection (b) as subsection (c); and 
(3) inserting a new subsection Ot)) to read as follows: 
"(b) Any person who, directly or indirectly, controls any person 
who has violated any provision of this Act or any of the rules, 
regulations, or orders issued pursuant to this Act may be held liable 
for such violation in any action brought by the Commission to the 
same extent as such controlled person. In such action, the Commis-
sion has the burden of proving that the controlling person did not 
act in good faith or knowingly induced, directly or indirectly, the act 
or acts constituting the violation.". 
REPARATIONS PROCEDURE 
SEC. 231. Section 14 of the Commodity Exchange Act (7 U.S.C. 18) 
is amended by— 
(1) amending subsection (a) to read as follows: 
"(a) Any person complaining of any violation of any provision of 
this Act, or any rule, regulation, or order issued pursuant to this 
Act, by any person who is registered under this Act may, at any 
time within two years after the cause of action accrues, apply to the 
Commission for an order awarding actual damages proximately 
caused by such violation."; 
(2) amending subsection (b) to read as follows: 
"(b) The Commission may promulgate such rules, regulations, and 
orders as it deems necessary or appropriate for the efficient and 
expeditious administration of this section. Notwithstanding any 
other provision of law, such rules, regulations, and orders may 
prescribe, or otherwise condition, without limitation, the form, 
filing, and service of pleadings or orders, the nature and scope of 
discovery, counterclaims, motion practice (including the grounds for 
dismissal of any claim or counterclaim), hearings (including the 
waiver thereof, which may relate to the amount in controversy), 
rights of appeal, if any, and all other matters governing proceedings 
before the Commission under this section."; 
(3) striking out subsections (c) and (e); 
(4) redesignating subsections (d), (f), (g), (h), and (i) as (c), (d), 
(e), (f), £ind (g), respectively; 
(5) striking out 'subsection (g)" in subsection (d), as so redesig-
nated, and inserting in lieu thereof "subsection (e)"; and 
(6) amending subsection (f), as so redesignated, to read as 
follows: 
"(f) Unless the party against whom a reparation order has been 
issued shows to the satisfaction of the Commission within fifteen 
days from the expiration of the period allowed for compliance with 
such order that either an appeal as herein authorized has been 
taken or payment of the full amount of the order (or any agreed 
settlement thereof) has been made, such party shall be prohibited 
automatically from trading on all contract markets and, if the party 
is registered with the Commission, such registration shall be sus-
pended automatically at the expiration of such fifteen-day period 
until such party shows to the satisfaction of the Commission that 
96 STAT. 2320 
PUBLIC LAW 97-444—JAN. 11, 1983 
payment of such amount with interest thereon to date of payment 
has been made: Provided, That if on appeal the appellee prevails or 
if the appeal is dismissed, the automatic prohibition against trading 
and suspension of registration shall become effective at the expira-
tion of thirty days from the date of judgment on the appeal, but if 
the judgment is stayed by a court of competent jurisdiction, the 
suspension shall become effective ten days after the expiration of 
such stay, unless prior thereto the judgment of the court has been 
satisfied.". 
TECHNICAL AMENDMENT 
SEC. 232. Section 16(d) of the Commodity Exchange Act (7 U.S.C. 
20(d)) is amended by inserting "or market positions" after 
"transactions". 
REGISTERED FUTURES ASSOCIATIONS 
SEC. 233. Section 17 of the Commodity Exchange Act (7 U.S.C. 21) 
is amended by— 
(1) amending subsection (b)(4)(E) by inserting before the 
period at the end thereof the following: ", which may require 
the applicant to be fingerprinted and to submit, or cause to be 
submitted, such fingerprints to the Attorney General for identi-
fication and appropriate processing. Notwithstanding any other 
provision of law, such an association may receive from the 
Attorney General all the results of such identification and 
processing"; 
(2) striking out "section 8a(4)" in subsection (d) and inserting 
in lieu thereof "section 8a(l)"; 
(3) striking out "subsection (k)" in subsection (h) and inserting 
in lieu thereof "subsection (i)"; 
(4) striking out the last sentence in subsection (j) and insert-
ing in lieu thereof the following: "A registered futures Eissoci-
ation shall submit to the Commission any change in or addition 
to its rules and may make such rules effective ten days after 
receipt of such submission by the Commission unless, within the 
ten-day period, the registered futures association requests 
review and approval thereof by the Commission or the Commis-
sion notifies such registered futures association in writing of its 
determination to review such rules for approval. The Commis-
sion shall approve such rules within thirty days of their receipt 
if Commission approval is requested under this subsection or 
within thirty days after the Commission determines to review 
for approval any other rules unless the Commission notifies the 
registered futures association of its inability to complete such 
approval or review within such period of time. The Commission 
shall approve such rules if such rules are determined by the 
Commission to be consistent with the requirements of this 
section and not otherwise in violation of this Act or the regula-
tions issued pursuant to this Act, and the Commission shall 
disapprove, after appropriate notice and opportunity for hear-
ing, any such rule which the Commission determines at any 
time to be inconsistent with the requirements of this section or 
in violation of this Act or the regulations issued pursuant to this 
Act. If the Commission does not approve or institute disapproval 
proceedings with respect to any rule within one hundred and 
eighty days after receipt or within such longer period of time as 
the registered futures association may agree to, or if the Com-
PUBLIC LAW 97-444—JAN. 11, 1983 
96 STAT. 2321 
mission does not conclude a disapproval proceeding with respect 
to any rule within one year after receipt or within such longer 
period as the registered futures association may agree to, such 
rule may be made effective by the registered futures association 
until such time as the Commission disapproves such rule in 
accordance with this subsection."; 
(5) adding at the end thereof the following new subsections: 
"(o)(l) The Commission may require any futures association regis-
tered pursuant to this section to perform any portion of the registra-
tion functions under this Act with respect to each member of the 
association other than a contract market and with respect to each 
associated person of such member, in accordance with rules, not-
withstanding any other provision of law, adopted by such futures 
association and submitted to the Commission pursuant to section 
17(j) of this Act, and subject to the provisions of this Act applicable 
'
^ use 21. 
to registrations granted by the Commission. 
"(2) In performing any Commission registration function author-
ized by the Commission under section 8a(10), this section, or any 
7 use I2a. 
other applicable provisions of this Act, a futures association may 
issue orders (A) to refuse to register any person, (B) to register 
conditionally any person, (C) to suspend the registration of any 
person, (D) to place restrictions on the registration of any person, or 
(E) to revoke the registration of any person. If such an order is the 
final decision of the futures association, any person against whom 
the order has been issued may petition the Commission to review 
the decision. The Commission may on its own initiative or upon 
petition decline review or grant review and affirm, set aside, or 
modify such an order of the futures association; and the findings of 
the futures association as to the facts, if supported by the weight of 
the evidence, shall be conclusive. Unless the Commission grants 
review under this section of an order concerning registration iissued 
by a futures association, the order of the futures association shall be 
considered to be an order issued by the Commission. 
"(3) Nothing in this section shall affect the Commission's author-
ity to review the granting of a registration application by a regis-
tered futures association that is performing any Commission 
registration function authorized by the Commission under section 
BaTlO), this section, or any other applicable provision of this Act. 
"(4) If a person against whom a futures association has issued a 
registration order under this subsection petitions the Commission to 
review that order and the Commission declines to take review, such 
person may file a petition for review with a United States court of 
appeals, in accordance with section 6(b) of this Act. 
7 use 9. 
"(p) Notwithstanding any other provision of this section, each 
futures association registered under this section on the date of 
enactment of the Futures Trading Act of 1982, shall adopt and 
submit for Commission approval not later than ninety days after 
such date of enactment, and each futures association that applies for 
registration after such date shall adopt and include with its applica-
tion for registration, rules of the association that require the associ-
ation to— 
"(1) establish training standards and proficiency testing for 
persons involved in the solicitation of transactions subject to the 
provisions of this Act, supervisors of such persons, and all 
persons for which it has registration responsibilities, and a 
program to audit and enforce compliance with such standards; 
96 STAT. 2322 
PUBLIC LAW 97-444—JAN. 11, 1983 
"(2) establish minimum capital, segregation, and other finan-
cial requirements applicable to its members for which such 
requirements are imposed by the Commission and implement a 
program to audit and enforce compliance with such require-
ments, except that such requirements may not be less stringent 
than those imposed on such firms by this Act or by Commission 
regulation; and 
"(3) establish minimum standards governing the sales prac-
tices of its members and persons associated therewith for trans-
actions subject to the provisions of this Act. 
"(q) Each futures association registered under this section shall 
develop a comprehensive program that fully implements the rules 
approved by the Commission under this section as soon as practica-
ble but not later than September 30,1985, in the case of any futures 
association registered on the date of enactment of the Futures 
Trading Act of 1982, and not later than two and one-half years after 
the date of registration in the case of any other futures association 
registered under this section.". 
LEVERAGE TRANSACTIONS 
SEC. 234. Section 19 of the Commodity Exchange Act (7 U.S.C. 23) 
is amended by— 
(1) amending subsection (c) to read as follows: 
"(c) The Commission shall regulate any transactions under a 
standardized contract described in subsection (a) of this section 
involving commodities described in subsection O
t
)
) of this section or 
any other commodities (except those commodities described in sub-
section (a) of this section) under such terms and conditions as the 
Commission shall prescribe by rule, regulation, or order made only 
after notice and opportunity for a hearing. The Commission may set 
different terms and conditions for such transactions involving differ-
ent commodities. Notwithstanding any other provision of this sec-
tion, the Commission may prohibit any transaction for the delivery 
of any commodity under a standardized contract described in subsec-
tion (a) of this section that is not permitted by the rules, regulations 
and orders of the Commission in effect on December 9, 1982, if the 
Commission determines that any such transactions would be con-
trary to the public interest."; and 
(2) striking out subsection (d). 
PRIVATE RIGHTS OP ACTION 
SEC. 235. The Commodity Exchange Act is amended by adding at 
the end thereof the following new section: 
7 use 25. 
"SEC. 22. (aXl) Any person (other than a contract market, clearing 
organization of a contract market, licensed board of trade, or regis-
tered futures association) who violates this Act or who willfully aids, 
abets, counsels, induces, or procures the commission of a violation of 
this Act shall be liable for actual damages resulting from one or 
more of the transactions referred to in clauses (A) through (D) of this 
paragraph and caused by such violation to any other person— 
"(A) who received trading advice from such person for a fee; 
"(B) who made through such person any contract of sale of 
any commodity for future delivery (or option on such contract or 
any commodity); or who deposited with or paid to such person 
PUBLIC LAW 97-444—JAN. 11, 1983 
96 STAT. 2323 
money, securities, or property (or incurred debt in lieu thereof) 
in connection with any order to make such contract; 
"(C) who purchased from or sold to such person or placed 
through such person an order for the purchase or sale o
f
— 
"(i) an option subject to section 4c of this Act (other than 7 use 6c. 
an option purchased or sold on a contract market or other 
board of trade); 
"(ii) a contract subject to section 19 of this Act; or 
7 use 23. 
"(iii) an interest or participation in a commodity pool; or 
"(D) who purchased or sold a contract referred to in clause (B) 
hereof if the violation constitutes a manipulation of the price of 
any such contract or the price of the commodity underljdng 
such contract. 
"(2) Except as provided in subsection (b), the rights of action 
authorized by this subsection and by sections 5a(ll), 14, and 17b(10) 
of this Act shall be the exclusive remedies under this Act available to ^ 
Y|' ^^' ^^^^' 
any person who sustains loss as a result of any alleged violation of 
this Act. Nothing in this subsection shall limit or abridge the rights 
of the parties to agree in advance of a dispute upon any forum for 
resolving claims under this section, including arbitration. 
"(bXl)(A) A contract market or clearing organization of a contract 
market that fails to enforce any bylaw, rule, regulation, or resolu-
tion that it is required to enforce by section 5a(8) and section 5a(9) of 
this Act, (B) a licensed board of trade that fails to enforce any bylaw, Ante, p. 2306. 
rule, regulation, or resolution that it is required to enforce by the 
Commission, or (C) any contract market, clearing organization of a 
contract market, or licensed board of trade that in enforcing any 
such bylaw, rule, regulation, or resolution violates this Act or any 
Commission rule, regulation, or order, shall be liable for actual 
damages sustained by a person who engaged in any transaction on 
or subject to the rules of such contract market or licensed board of 
trade to the extent of such person's actual losses that resulted from 
such transaction and were caused by such failure to enforce or 
enforcement of such bylaws, rules, regulations, or resolutions. 
"(2) A registered futures association that fails to enforce any 
bylaw or rule that is required under section 17 of this Act or in 7 use 21. 
enforcing any such bylaw or rule violates this Act or any Commis-
sion rule, regulation, or order shall be liable for actual damages 
sustained by a person that engaged in any transaction specified in 
subsection (a) of this section to the extent of such person's actual 
losses that resulted from such transaction and were caused by such 
failure to enforce or enforcement of such bylaw or rule. 
"(3) Any individual who, in the capacity as an officer, director, 
governor, committee member, or employee of a contract market, 
clearing organization, licensed board of trade, or a registered futures 
association willfully aids, abets, counsels, induces, or procures any 
failure by any such entity to enforce (or any violation of the Act in 
enforcing) any bylaw, rule, regulation, or resolution referred to in 
paragraph (1) or (2) of this subsection, shall be liable for actual 
damages sustained by a person who engaged in any trsmsaction 
specified in subsection (a) of this section on, or subject to the rules of, 
such contract market, licensed board of trade or, in the case of an 
officer, director, governor, committee member, or employee of a 
registered futures association, any transaction specified in subsec-
tion (a) of this section, in either case to the extent of such person's 
97-200 O—84—pt. 2 
31 : QL3 
96 STAT. 2324 
PUBLIC LAW 97-444—JAN. 11, 1983 
actual losses that resulted from such transaction and were caused by 
such failure or violation. 
"(4) A person seeking to enforce liability under this section must 
establish that the contract market, licensed board of trade, clearing 
organization, registered futures association, officer, director, gover-
nor, committee member, or employee acted in bad faith in failing to 
take action or in taking such action as was taken, and that such 
failure or action caused the loss. 
"(5) The rights of action authorized by this subsection shall be the 
exclusive remedy under this Act available to any person who sus-
tains a loss as a result of (A) the alleged failure by a contract 
market, licensed board of trade, clearing organization, or registered 
futures association or by any officer, director, governor, committee 
member, or employee to enforce any bylaw, rule, regulation, or 
resolution referred to in paragraph (1) or (2) of this subsection, or (B) 
the taking of action in enforcing any bylaw, rule, regulation, or 
resolution referred to in this subsection that is alleged to have 
violated this Act, or any Commission rule, regulation, or order. 
"(c) The United States district courts shall have exclusive jurisdic-
tion of actions brought under this section. Any such action must be 
brought within two years after the date the cause of action accrued. 
"(d) The provisions of this section shall become effective with 
respect to causes of action accruing on or after the date of enact-
ment of the Futures Trading Act of 1982: Provided, That the enact-
ment of the Futures Trading Act of 1982 shall not affect any right of 
any parties which may exist with respect to causes of action accru-
ing prior to such date. . 
SPECIAL STUDY OF FUTURES AND RELATED MARKETS 
SEC. 236. The Commodity Exchange Act is amended by adding at 
the end thereof the following new section: 
7 use 26. 
"SEC. 23. (a)(1) The Board of Governors of the Federal Reserve 
System, the Commission, and the Securities and Exchange Commis-
sion, with assistance from the Secretary of the Treasury, shall 
conduct a study of the effects on the economy of trading in contracts 
of sale of commodities for future delivery and in options (including 
options on commodities, options on contracts of sale of commodities 
for future delivery, options on foreign currencies, and options on 
securities, including exempted securities or on any group or index of 
securities). The agencies participating in the study may select repre-
sentative futures contracts and options contracts and representative 
periods of time for detailed study. 
"(2) The Board of Governors of the Federal Reserve System shall 
organize the study and shall do so in such manner that the total cost 
to all participating agencies of conducting the study is not more 
than $3,000,000. To the extent possible, such agencies shall use data 
which are readily available to them. 
"(3) among the areas to be studied are— 
"(A) the effects, if any, that trading in such instruments has 
on the formation of real capital in the economy (particularly 
that of a long-term nature) and the structure of liquidity in 
credit markets; 
"(B) the economic purposes, if any, served by the trading of 
such instruments; 
"(C) the sufficiency of the public policy tools available to 
regulate such trading activity to avoid harmful economic effects 
PUBLIC LAW 97-444—JAN. 11, 1983 
96 STAT. 2325 
in the markets for such instruments, the underlying cash mar-
kets, and related financial markets; 
"(D) the adequacy of investor protections afforded to partici-
pants in the markets for such instruments; and 
"(E) the extent to which such instruments may be utilized to 
manipulate, or profit from the manipulation of, the markets for 
evidences of indebtedness, foreign currency, and securities. 
"(4) The Commission shall have primary responsibility for select-
ing and studying the instruments under its jurisdiction, and the 
Securities and Exchange Commission shall have primary respon-
sibility for selecting and studying the instruments under its 
jurisdiction. 
"(5) The Board of Governors of the Federal Reserve System shall 
review, and may supplement with its own analyses, the studies 
conducted under this subsection by the Commission and the Securi-
ties and Exchange Commission. The Board of Governors, after con-
sultation with the Commission and the Securities and Exchange 
Commission, shall, not later than September 30, 1984, submit to 
Congress a report comprised of such studies, together with any 
supplementation and recommendations for legislative or regulatory 
action proposed by the participants. 
"(b)(1) The Commission shall conduct at a cost of not more than 
$200,000 a study of (A) the nature, extent, and effects of trading in 
representative futures markets by persons possessing material infor-
mation not generally available to the public regarding present or 
anticipated cash or futures transactions (to which such persons are 
not parties) in any commodity, and (B) the adequacy of the Commis-
sion's authority to prevent market and customer abuses resulting 
from the possession of such nonpublic information. 
"(2) To the extent possible, the Commission shall use data which 
are readily available to it in conducting the study. The Commission 
shall, not later than September 30,1984, transmit to the (Dommittee 
on Agriculture of the House of Representatives and the Committee 
on Agriculture, Nutrition, and Forestry of the Senate a report 
describing the results of the study and including any recommenda-
tions for legislative action.". 
Report to 
Congress. 
Report to 
congressional 
committees. 
NATIONAL FUTURES ASSOCIATION STUDY AND SERVICE FEES 
SEC. 237. Section 26 of the Futures Trading Act of 1978 (92 Stat. 
877) is amended by— 
(1) inserting "(a)" immediately following the section designa-
tion; and 
(2) adding at the end thereof the following new subsections: 
"(b) The Commodity Futures Trading Commission shall submit to 
Congress a report containing the results of a study of the regulatory 
experience of the National Futures Association for the period begin-
ning January 1, 1983 and ending September 30, 1985. The report 
shall be submitted not later than January 1, 1986. The report shall 
include (but not to be limited to) the following— 
"(1) the extent to which the National Futures Association has 
fully implemented the program provided in the rules approved 
by the Commission under section 17 (p) and (q) of the Commodity 
Exchange Act and the effectiveness of the operation of such 
program; 
7 u s e 16a. 
Report to 
Congress. 
7 use 21. 
96 STAT. 2326 
PUBLIC LAW 97-444—JAN. 11, 1983 
"(2) the actual and projected cost savings to the Federal 
Government, if any, resulting from operations of the National 
Futures Association; 
"(3) the actual and projected costs which the Commission and 
the public would have incurred if the Association had not 
undertaken self-regulatory responsibility for certain areas 
under the Commission's jurisdiction; 
"(4) problem areas, if any, encountered by the Association; 
"(5) the nature of the working relationship between the Asso-
ciation and the Commission; 
"(6) an assessment of the actual and projected efficiencies the 
Commission has achieved or expects to be achieved as a result of 
the continuing regulatory activities of the Association; and 
"(7) the immediate and projected capabilities of the Commis-
sion at the time of submission of the study to turn its attention 
to more immediate problems of regulation, as a result of the 
activities of the Association. 
"(c) Nothing in this section shall limit the authority of the Com-
mission to promulgate, after notice and opportunity for hearing, a 
schedule of appropriate fees to be charged for services rendered and 
activities and functions performed by the Commission in conjunc-
tion with its administration and enforcement of the Commodity 
7 use 1. 
Exchange Act: Provided, That the fees for any specified service or 
activity or function shall not exceed the actual cost thereof to the 
Commission.". 
AGRICULTURAL EXPORTS 
SEC. 238. Section 812 of the Agricultural Act of 1970 (7 U.S.C. 
612c-3) is amended by adding a^ the end thereof the following new 
sentence: "Notwithstanding any other provision of law, the Presi-
dent shall not prohibit or curtail the export of any agricultural 
commodity or the products thereof under an export sales contract (1) 
entered into before the President announces an action that would 
otherwise prohibit or curtail the export of the commodity or prod-
ucts thereof, (2) the terms of which require delivery of the commod-
ity or products thereof within two hundred and seventy days after 
the date the suspension of trade is imposed, except that the Presi-
dent may prohibit or curtail the export of any commodity or the 
products thereof during a period for which the President has 
declared a national emergency or for which Congress has declared 
war.". 
PUBLIC LAW 97-444—JAN. 11, 1983 
96 STAT. 2327 
EFFECTIVE DATE 
SEC. 239. This Act shall be effective upon the date of enactment of ? use 2 note. 
this Act, except that sections 207, 212, and 231 of this Act shall be 
effective one hundred and twenty days after the date of enactment 
of this Act, or such earlier date as the Commodity Futures Trading 
Commission shall prescribe by regulation. 
Approved January 11, 1983. 
LEGISLATIVE HISTORY—H.R. 5447: 
HOUSE REPORTS: No. 97-565, Pt. 1 (Ck)mm. on Agriculture) and Pt. 2 (Comm. on 
Energy and Commerce), and No. 97-964 (Comm. of Conference). 
CONGRESSIONAL RECORD, Vol. 128 (1982): 
Sept. 23, considered and passed House. 
Oct. 1, considered and passed Senate, amended. 
Dec. 15, Senate agreed to conference report. 
Dec. 16, House agreed to conference report.