Futures Trading Practices Act of 1992
PL 102-546 (H.R.707), enacted 10/28/1992

106 STAT. 3590 
PUBLIC LAW 102-546—OCT. 28, 1992 
Public Law 102-546 
102d Congress 
Oct. 28, 1992 
[H.R. 707] 
Futures Trading 
Practices Act of 
1992. 
Securities. 
7 u s e 1 note. 
An Act 
To amend the Commodity Exchange Act to improve the regulation of futures and 
options traded under rules and regulations of the Commodity Futures Trading 
Commission; to establish registration standards for all exchange floor traders; 
to restrict practices which may lead to the abuse of outside customers of the 
marketplace; to reinforce development of exchange audit trails to better enable 
the detection and prevention of such practices; to establish higher standards 
for service on governing boards and disciplinary committees of self-regulatory 
organizations; to enhance the international regulation of futures trading; to regu-
larize the process of authorizing appropriations for the Commodity Futures Trading 
Commission; and for other purposes. 
Be it enacted by the Senate and House of Representatives of 
the United States of 
America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the "Futures Trad-
ing Practices Act of 1992". 
(b) TABLE OF CONTENTS.—The table of contents is as follows: 
TABLE OF CONTENTS 
Sec. 1. Short title; table of contents. 
Sec. 2. References to the Commodity Exchange Act. 
TITLE I—LIMITATIONS ON CERTAIN TRADING PRACTICES 
Sec. 101. Dual trading. 
Sec. 102. Restrictions on trading among members of broker associations. 
Sec. 103. Broker association disclosure. 
TITLE II—ENHANCEMENT OF REGULATORY AND ENFORCEMENT 
ACTIVITIES 
Sec. 201. Duties of contract markets; audit trails. 
Sec. 202. Commission oversight; deficiency orders. 
Sec. 203. Oral Orders. 
Sec. 204. Telemarketing fraud. 
Sec. 205. Undercover operations and enforcement. 
Sec. 206. Self regulatory organization disciplinary committees and governing 
boards. 
Sec. 207. Required registration of floor traders. 
Sec. 208. Enhancement of registration requirements. 
Sec. 209. Enforcement of civil money penalties. 
Sec. 210. Ethics training for registrants. 
Sec. 211. Nationwide service of process and venue. 
Sec. 212. Increased penalties. 
Sec. 213. Contract market emergency actions. 
Sec. 214. Prohibition against insider trading. 
Sec. 215. Qualifications of Commissioners. 
Sec. 216. Commission operations. 
Sec. 217. Prohibition on voting by interested members. 
Sec. 218. Study of assessments on transactions. 
Sec. 219. Competitiveness study. 
Sec. 220. Computerized futures trading. 
Sec. 221. Money penalties in civil court actions. 
Sec. 222. Civil damages; liability of futures commission merchants. 
Sec. 223. Customer restitution. 
Sec. 224. Complaints against registered persons; class action suits. 
Sec. 225. Penalties study and guidelines. 
Sec. 226. Publication of Commission opinions. 
PUBLIC LAW 102-546—OCT. 28, 1992 
106 STAT. 3591 
Sec. 227. Suspensionof registrants charged with felonies. 
Sec. 228. Appeals by registered futures associations. 
Sec. 229. Ruk assessment for holding companies. 
TITLE III—ASSISTANCE TO FOREIGN FUTURES AUTHORITIES 
Sec. 301. Subpoena authority. 
Sec. 302. Cooperation with foreign futures authorities. 
Sec. 303. Investigative assistance to foreign futures authorities. 
Sec. 304. Disclosure of information received 
firom 
foreign futures authorities. 
Sec. 305. Disclosure of information to foreign futures authorities. 
TITLE IV—AUTHORIZATION OF APPROPRIATIONS; TECHNICAL 
AMENDMENTS; EFFECTIVE DATE 
Sec. 401. Authorization of appropriations. 
Sec. 402. Technical amendments. 
Sec. 403. Effective date. 
Sec. 404. Definitions. 
TITLE V—INTERMARKET COORDINATION 
Sec. 501. Margin on stock index futures. 
Sec. 502. Exemptive authority. 
SEC. 2. REFERENCES TO THE COMMODITY EXCHANGE ACT. 
Except as otherwise specifically provided, whenever in this 
Act an amendment or repeal is expressed in terms of an amendment 
to, or repeal of, a section or other provision, the reference shall 
be considered to be made to a section or other provision of the 
Commodity Exchange Act (7 U.S.C. 1 et seq.). 
TITLE I—LIMITATIONS ON CERTAIN TRADING 
PRACTICES 
SEC. 101. DUAL TRADING. 
(a) PROHIBITION.—Section 4j (7 U.S.C. 6j) is amended— 
(1) by redesignating paragraphs (1) and (2) as subsections 
(b) and (c), respectively; 
(2) in subsection (b), as so redesignated, by striking The 
Commission shall within nine months after the effective date 
of the Commodity Futures Trading Commission Act of 1974, 
and subsequently when it determines that changes are 
required," and inserting "If, in addition to the regulations issued 
pursuant to subsection (a), the Commission has reason to 
believe that dual trading-related or facilitated abuses are not 
being or cannot be effectively addressed by subsection (a), the 
Commission shall"; and 
(3) by inserting a new subsection (a) to read as follows: 
"(aXl) The Commission shall issue regulations to prohibit the 
privilege of dual trading on each contract market wmch has not 
been exempted from such regulations under paragraph (3). The 
regulations issued by the Commission imder this paragraph— 
"(A) shall provide that the prohibition of dual trading there-
imder shall take effect not less than thirty days after the 
issuance of the regulations; 
"(B) shall provide for exceptions, as the Commission deter-
mines necessary and appropriate, to ensure fairness and orderly 
trading in affected contract markets, including— 
"(i) transition measures and a reasonable phase-in 
period, 
"(ii) exceptions for spread transactions and the correc-
tion of trading errors, 
"(iii) allowance for a customer to designate in writing 
not less than once annually a named floor broker to execute 
106 STAT. 3592 
PUBLIC LAW 102-546—OCT. 28, 1992 
orders for such customer, notwithstanding the regulations 
to prohibit the privilege of dual trading required under 
this paragraph, and 
"(iv) other measures reasonably designed to accommo-
date unique or special characteristics of individual boards 
of trade or contract markets, to address emergency or 
unusual market conditions, or otherwise to further the 
public interest; 
"(C) shall establish procedures for the application for and 
issuance of exemptions under paragraph (3) which, among other 
things, shall specify the relevant data required to be submitted 
by the board of trade with each application; 
"(D) shall specify the methodology by which it shall deter-
mine the average daily trading volume on a contract market 
for purposes of paragraph (4) based on a moving daily average 
of either six or twelve months; and 
"(E) shall establish an expeditious procedure to revoke 
an exemption granted under paragraph (3) providing sufficient 
notice, opportunity for hearing, and findings to assure fun-
damental fairness. 
"(2) As used in this section, the term 'dual trading* means 
the execution of customer orders by a floor broker during any 
trading session in which the floor broker executes any trade in 
the same contract market for— 
"(A) the account of such floor broker; 
"(B) an account for which such floor broker has trading 
discretion; or 
"(C) an account controlled by a person with whom such 
floor broker is subject to trading restrictions under section 
4j(d). 
"(3) The Commission shall exempt a contract market from 
the regulations issued under paragraph (1), either unconditionally 
or on stated conditions (including stated periods of time) relevant 
to the attainment or maintenance of compliance with the standards 
in subparagraphs (A) and (B), upon finding that— 
"(A) the trade monitoring system in place at the contract 
market satisfies the requirements of section 5a(b) with regard 
to violations attributable to dual trading at such contract mar-
ket; or 
"(B)(i) there is a substantial likelihood that a dual trading 
suspension would harm the public interest in hedging or price 
basing at such contract market, and 
"(ii) other corrective actions, such as those described in 
section 8e, are sufficient and appropriate to bring the contract 
market into compliance with the standard in subparagraph 
(A). 
"(4)(A) The regulations issued by the Commission under para-
graph (1) shall not apply to any contract market in which the 
Commission determines that the average daily trading volume is 
less than the threshold trading level established for tne contract 
market under this paragraph. 
"(B) The threshold trading level shall be set initially at eight 
thousand contracts. 
"(C) The Commission may, by rule or order— 
"(i) increase, or 
"(ii) at any time following the date three years aft«r the 
date of enactment of this paragraph, decrease, 
PUBLIC LAW 102-546—OCT. 28, 1992 
106 STAT. 3593 
the threshold trading level for specific contract markets after taking 
into consideration the actual or pjotential effects of a dual trading 
han on the public interest in hedging or price basing at the affected 
contract market. 
"(D) The Commission shall provide the affected contract market 
with adequate notice of any such increase or decrease. 
"(5) Before the Commission denies an application for an exemp-
tion under paragraph (3) or exempts a contract market subject 
to conditions, it shsdl— 
"(A) provide the affected board of trade with notice of 
the reason or reasons that the application was not approved 
as submitted, including— 
"(i) €uiy reason the Commission has to beUeve that 
the trade monitoring system in place at the contract market 
does not satisfy the requirements of paragraph (3XA) and 
the basis for such reason; 
"(ii) any corrective action or actions, such as those 
described in se<;tion 8e, that the Commission believes the 
affected contract market must take to satisfy the require-
ments of paragraph (3XA), and an acceptable timetable 
for such corrective action; and 
"(iii) any conditions or Umitations that the Commission 
proposes to attach to the exemption under paragraph (3); 
**(B) provide the affected board of trade with an opportimity 
for a hearing through submission of written data, views, or 
arguments and, unaer terms set by the Commission at the 
request of the board of trade, through an oral presentation 
of views and comments to the Commission, in order to make 
the demonstration required under paragraph (3) or otherwise 
to petition the Commission with respect to its application; 
and 
"(C) make findings, based on the information, views, and 
arguments placed before it in connection with the application, 
as to whether— 
"(i) the standard in either paragraph (3XA) or (3XB) 
applies, and 
''(ii) any conditions or limitations which the Commis-
sion proposes to attach under paragraph (3) are appropriate 
in light of the purposes of this subsection. 
The Commission shall publish in the Federal Register notice of Federal 
any exemptive petitions filed under paragraph (3) and any proposed ^^^[-0^ 
or final actions the Commission may take on such petitions. Unless ^" 
the Commission determines that more immediate action is appro-
priate in the public interest, any Commission order denying an 
application or exempting a contract market conditionally shall not 
take efiTect for at least twenty days following the issuance of the 
order. 
"(6) Violation of an order issued under this subsection shall 
be considered a violation of an order of the Commission for purposes 
o
f
— 
"(i) establishing liability and assessing penalties against 
a contract market or any director, officer, agent, or employee 
tJiereof under section 6b or 6c; or 
"(ii) initiating proceedings under section 5b or 6(a). 
**(7) Any board of trade which has applied to the Commission 
to exempt a contract market firom the regulations issued under 
paragraph (1) may obtain judicial review of any final action of 
106 STAT. 3594 
PUBLIC LAW 102-546—OCT. 28, 1992 
the Commission to deny such apphcation, to issue an exemption 
subject to conditions, or to revoke an exemption, 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, 
under the standards applicable to rulemaking proceedings under 
section 553 of title 5, United States Code. 
"(SKA) The Commission shall issue the regulations required 
imder paragraph (1) not later than two himdred and seventy days 
after tne enactment of this section. If, prior to the effective date 
of the prohibition on dual trading under such regulations, a board 
of trade submits to the Commission an application for an exemption 
for a contract market under paragraph (3), the Commission shall 
not apply the prohibition against dual trading under paragraph 
(1) to the contract market until the Commission has approved 
or denied the application. 
"(B) The Commission shall approve or deny any application 
for an exemption under paragraph (3) within seventy-five days 
after receipt of the application, or as soon as practicable.". 
SEC. 102. RESTRICTIONS ON TRADING AMONG MEMBERS OF BROKER 
ASSOCIATIONS. 
(a) IN GENERAL.—Section 4j (7 U.S.C. 6j) is amended by adding 
at the end the following new subsection: 
"(dXD Except as provided in paragraph (2), a floor broker 
may not execute an order of a customer if such floor broker knows 
the opposite party to the transaction to be a floor broker or floor 
trader with whom such trader or broker has a relationship involving 
trading on such contract market as— 
"(A) a partner in a partnership; 
"(B) an employer or employee; or 
"(C) Such other affiliation as the Commission may specify 
by rule. 
**(2) Para^nraph (1) shall not apply— 
"(A) u the Commission has adopted rules that the Commis-
sion certifies to Congress require procedures and standards 
desired to prevent violations of this Act attributable to the 
trading described in paragraph (1); or 
"(B) to any contract msirket that has implemented rules 
desired to prevent violations of this Act attributable to the 
trading described in paragraph (1), except that, if the Commis-
sion determines, by rule or order, that such rules are not 
adequate to prevent such violations, paragraph (1) shall become 
effective with respect to such contract market after a reasonable 
period determined by the Commission.". 
7 use 6j note. 
(b) EFFECTIVE DATE.—^The amendment made by subsection (a) 
shall become effective two hundred and seventy days after the 
date of enactment of this Act. 
SEC. 103. BROKER ASSOCIATION DISCLOSURE. 
Subsection (a) of section 5a (7 U.S.C. 7a) (as amended by 
sections 201(aKl) and 217 of this Act) is further amended— 
(1) by striking "and" at the end of paragraph (11); 
(2) by striking the period at the end of paragraph (12) 
and inserting a semicolon; and 
(3) by adding at the end the following new paragraph: 
"(13) provide for disclosure to the contract market and 
the Commission of any trade, business, or financial partnership. 
PUBLIC LAW 102-546—OCT. 28, 1992 
106 STAT. 3595 
cost-, profit-, or capital-sharing agreements or other formal 
arrangement among or between floor brokers and traders on 
such contract market where such partnership agreement or 
arrangement is material and known to the floor broker or 
floor trader;". 
TITLE II—ENHANCEMENT OF REGULATORY AND 
ENFORCEMENT ACTIVITIES 
SEC. 201. DUTIES OF CONTRACT MARKETS; AUDIT TRAILS. 
(a) IN GENERAL.—Section 5a (7 U.S.C. 7a) is amended— 
(1) by inserting "(a)" after the section designation; and 
(2) by adding at the end the following new subsection: 
"(b)(1) Each contract market shall maintain and utilize a system 
to monitor trading to detect and deter violations of the contract 
market's rules and regulations committed in the making of trades 
and the execution of customer orders on the floor or subject to 
the rules of such contract market. The system shall include— 
"(A) physical observation of trading areas; 
"(B) audit trail and recordkeeping systems able to capture 
essential data on the terms, participants, and sequence of trans-
actions (including relevant data on unmatched trades and out-
trades); 
"(C) systems capable of reviewing, and used to review, 
data on trades effectively on a regular basis to detect violations 
committed in making trades and executing customer orders 
on the floor or subject to the rules of such contract market, 
including— 
"(i) all types of violations attributable to dual trading; 
and 
"(ii) to the full extent feasible, as determined by the 
Commission, all other types of violations involving the mak-
ing of trades and the execution of customer orders; 
"(D) the use of information gathered through such system 
on a consistent basis to bring appropriate disciplinary actions 
against violators; 
"(E) the commitment of resources to such system necessary 
for such system to be effective in detecting and deterring such 
violations, including adequate staff to develop and prosecute 
disciplinary actions; and 
(F) the assessment of meaningful penalties against viola-
tors and the referral of appropriate cases to the Commission. 
"(2) The audit trail system of the contract market shall, consist-
ent with Commission regialations, accurately record— 
"(A) the times of trades in increments of no more than 
one minute in length; and 
"(B) the sequence of trades for each floor trader and broker. 
"(3) Beginning three years after the date of enactment of this 
subsection, the audit trail system of each contract market, except 
as provided in paragraph (5) and except to the extent the Commis-
sion determines that circumstances beyond the control of the con-
tract market prevent compliance despite the contract market's 
affirmative good faith efforts to comply, shall— 
"(A) for all trades, record accurately and promptly the 
essential data on terms, participants, and times as required 
by the Commission by nue, including the time of execution 
of such trade, through a means that— 
Records. 
Records. 
106 STAT. 3596 
PUBLIC LAW 102-546—OCT. 28, 1992 
"(i) records such data in a form which cannot be altered 
except in a manner that will leave a complete and 
independent record of such alteration; 
"(ii) continually provides such data to the contract 
market; 
"(iii) identifies such time, to the extent practicable 
as determined by the Commission— 
"(I) independently of the person making the trade; 
"(II) through a mechanism that records the time 
automatically when entered by the person making the 
trade; or 
"(III) through such other means that will capture 
a similarlv reliable time; and 
"(iv) is adequately precise to determine, to the extent 
practicable as determined by the Commission by rule or 
order— 
"(I) the sequence of all trades by each floor trader; 
and 
"(II) the sequence of all trades by each floor broker; 
and 
"(B) to the extent practicable as determined by the Commis-
sion by rule or order, for customer trades, record the time 
that each order is received on the floor of the board of trade, 
is received by the floor broker for execution (or when such 
order is transmitted in an extremely rapid manner to the 
broker), and is reported from the floor of the board of trade 
as executed, through a means that— 
"(i) records such times in a form which cannot be 
altered except in a manner that will leave a complete 
and independent record of such alteration; 
"(ii) continually provides such data to the contract 
market; 
"(iii) identifies such time— 
"(I) independently of the person making the trade 
or processing the order; 
"(II) through a mechanism that records the time 
automatically when entered by the person making the 
trade or processing such order, as appropriate; or 
"(III) through such other means as will capture 
a similarly reliable time; and 
"(iv) is adequately precise to determine— 
"(I) the sequence in which, for each 
futures 
commission merchant, floor broker, or member firm, 
as applicable, all orders are received on and reported 
from the floor of the contract market; and 
"(II) the sequence in which orders are received 
by each floor broker for execution. 
"(4) The Commission may, by rule, establish standards under 
which the audit trail systems required under paragraph (3) shall 
record, to the extent practicable— 
"(A) the sequence of all trades made by all floor traders 
and floor brokers; and 
"(B) the interval between the time of receipt and the time 
of execution of each order by the floor broker executing the 
order. 
"(5)(A) The Commission shall, by rule or order, make exemp-
tions from the requirements of paragraph (3)— 
PUBUC LAW 102-546—OCT. 28,1992 
106 STAT. 3597 
**ii) for an exchange with respect to which the Commission 
finds that— 
"(I) the volume of trading on such exchange is relatively 
small and the exchange has demonstrated substantial 
compliance with the objectives of such paragraph; and 
"(n) tiie trade monitoring system at such exchange 
otherwise maintains a high level of compliance with this 
subsection; and 
"(ii) to the extent determined appropriate by the Commis-
sion, for categories of customer orders witii respect to which 
the Commission finds that such orders are transmitted to and 
reported fix)m the trading pit in an extremely rapid manner 
such that substantial compliance with the objectives of para-
graph (3) can be otherwise achieved. 
^B) For purposes of subparagraph (AXiXD the Commission 
shall find tliat the volume of tradiog at an exchange is relatively 
small if, among other things, the Commission determines that the 
average daily trading volume for each contract market for which 
the b
o
i
E
u
r
d of trade is designated is less than the threshold trading 
level established for the contract market under section 4j(aX4). 
'*(6) Any rule or order adopted by the Commission under para- Effective date. 
graphs (4) and (5) shall become effective thirty legislative days 
or ninety calendar days, whichever is later, after submission of 
such rule or order to the Committee on Agriculture of the House 
of Representatives and the Committee on Agriculture, Nutrition, 
and Forestry of the Senate. For purposes of this paragraph, the 
term legislative day* means any day on which either House of 
Congress is in session.". 
(b) STUDY.— 
7 use 7a note. 
(1) IN GENERAL.~Not later than two years afl»r the date Kepo'^ 
of enactment of this Act, the Commodity Futures Trading 
Commission shall submit to the Committee on Agriculture of 
the House of Representatives and the Committee on Agri-
culture, Nutrition, and Forestry of the Senate a report that 
containis— 
(A) an assessment of the progress of each contract 
market in developing and implementing systems to record 
the times of transactions independently, precisely, and com-
pletely as required under section 5a(b) of the Commodity 
Exchange Act (as added by subsection (a) of this section); 
and 
(B) recommendations as to whether any extension of 
time for the completion of such systems or any modification 
of the standards contained in such section is appropriate. 
(2) GAO VIEWS.—The Comptroller General of the United 
States shall state to Congress the views of the Comptroller 
General with regard to the issues addressed in such report. 
(c) AUDIT TRAIL COMPLIANCE AS CONDITION FOR CONTRACT 
MARKET DESIGNATION.—Section 5 (7 U.S.C. 7) is amended by— 
(1) indenting tlie left margin of subdivisions (a) through 
(g) by 2 ems; 
(2) striking "(ar, "(bf, 'KeT, "(dr, "(er, "(f)", and 'XgT, 
and inserting "(ir, -(2)", "(3)", **(4r, 'XBT, **(6r, and XTT, 
respectively; and 
(3) adding at the end the following: 
106 STAT. 3598 
PUBLIC LAW 102-546—OCT. 28, 1992 
"(8) When such board of trade demonstrates that every 
contract market for which such board of trade is designated 
compHes with the requirements of section 5a(b).". 
' 
SEC. 202. COMMISSION OVERSIGHT; DEFICIENCY ORDERS. 
(a) IN GENERAL.—^The Act is amended by inserting after section 
8d (7 U.S.C. 12d) the following new section: 
7 use 12e. 
"SEC. 8e. COMMISSION OVERSIGHT; DEFICIENCY ORDERS. 
"(a) ASSESSMENTS.—^At least once every two years, to the extent 
practicable, the Commission shall assess whether the trade monitor-
ing system of each contract market satisfies section 5a(b). 
"(b) DEFICIENCY ORDERS.— 
"(1) CAUSES.—^The Commission may issue a proposed defi-
ciency order in accordance with paragraph (2), or take such 
other administrative or enforcement action as the Commission 
determines is appropriate, if, based on its assessment or on 
other information, the Commission at any time has reason 
to believe that a contract market's trade monitoring system 
implemented pursuant to section 5a(b) does not satisfy one 
or more of the requirements of such section. 
"(2) CONTENTS.—^A proposed deficiency order issued under 
this subsection shall specify— 
"(A) the deficiencies the Commission has reason to 
believe exist in the trade monitoring system of the contract 
market and a statement of reasons supporting the Commis-
sion's belief that those deficiencies exist; 
"(B) the corrective action that the Commission believes 
that the contract market must take and an acceptable 
timetable for such corrective action; and 
"(C) a date, not less than twenty days from the date 
of issuance of the proposed deficiency order, when such 
deficiency order will become final, subject to subsection 
(d). 
"(3) REMEDIES.—On becoming final, the Commission defi-
ciency order may— 
"(A) require the contract market to— 
"(i) institute appropriate improvements in its trade 
monitoring system necessary to correct the deficiencies 
noted therein; 
"(ii) satisfy stated objective performance criteria 
to correct such deficiencies; 
"(iii) upgrade or reconfigure existing systems for 
collecting or processing relevant data on trading and 
trader or broker activity, including, where appropriate, 
the commitment of additional resources; or 
"(B) revoke any exemption of the contract market from 
the regulations prohibiting the privilege of dual trading 
under section 4j(a), if the deficiency noted in such deficiency 
order relates to— 
"(i) the audit trail system the contract market 
is required to maintain under paragraph (2), (3), or 
(4) of section 5a(b); or 
"(ii) the prevention, detection, or disciplining of 
violations attributable to such trading at sucn contract 
market, subject to the standards, exceptions, and dura-
tion provisions of section 4j(a); or 
PUBLIC LAW 102-546—OCT. 28, 1992 
106 STAT. 3599 
"(C) take any combination of the actions described 
in subparagraphs (A) and (B). 
"(4) I^MOVAL.—If the Commission finds, after notice and 
opportimity for a hearing on the record prior to such deficiency 
order becoming final, that a named officer, director, committee 
member, or employee of such contract market has willfiilly— 
"(A) violated this Act, the niles or regulations of the 
Commission therevinder, or the rules of such contract mar-
ket; 
"(B) abused the authority of such person; or 
"(C) without reasonable justification or excuse, failed 
to enforce compliance with any provision of the rules of 
such contract market by any member or person associated 
with a member thereof, 
the Commission may issue a deficiency order under this section 
to remove such officer, director, committee member, or 
employee. 
"(5) DESIGNATION AS CONTRACT MARKET.—Notwithstanding 
section 6, during the period that a proposed or final deficiency 
order under this section is in effect, the Commission may refrain 
from approving any application for designation as a contract 
market made by the board of trade whose contract market 
is the subject of such deficiency order. 
''(6) DELEGATION.—The Commission shall not delegate the 
authority to issue deficiency orders imder this subsection. 
"(c) RESCISSION, MODIFICATION, OR DELAY OF DEFICIENCY 
ORDERS.—Before any proposed deficiency order issued by the 
Commission under subsection (b) may become final, the Commission 
shall— 
"(1) provide the affected contract market with an oppor-
tunity for a hearing through submission of written data, views, 
or arguments and, under terms set by the Commission at 
the request of the contract market, through an oral presentation 
of views and comments to the Commission, in order to petition 
the Commission to rescind, modify, or delay such deficiency 
order; and 
"(2) rule on such petition, not less than twenty days before 
the deficiency order takes effect, making findings, as appro-
priate, as to whether— 
"(A) the deficiencies cited by the Commission have 
been corrected or are being corrected under an expeditious 
timetable acceptable to the Commission; 
"(B) the trade monitoring system of the contract market 
is deficient as noted in the deficiency order; or 
"(C) the timetable for corrective action by the contract 
market in the proposed deficiency order, and the particular 
corrective action proposed, is appropriate in light of the 
deficiencies noted and the purposes or this Act. 
"(d) PENALTIES.—^Violation of a final deficiency order issued 
under subsection (c) shall be considered a violation of an order 
of the Commission for purposes o
f
— 
"(1) establishmg liability and assessing penalties against 
a contract market or any director, officer, agent, or employee 
thereof under section 6b or 6c; or 
"(2) initiating proceedings under section 5b or 6(a). 
"(e) JUDICIAL REVIEW.— 
106 STAT. 3600 
PUBLIC LAW 102-546—OCT. 28, 1992 
"(1) PERSONS.—^Any person, other than a contract market, 
aggrieved by a deficiency order issued under subsection (b)(4), 
may obtain review of such deficiency order when issued by 
the Commission under the terms and conditions in section 
6(b). 
"(2) CONTRACT MARKETS.—Any contract market that has 
petitioned the Commission to rescind, modify, or delay any 
proposed deficiency order issued under subsection (b) may 
obtain judicial review of any final such deficiency order only 
in the United States Court of Appeals for the circuit in whicn 
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, under the standards applicable 
to rulemaking proceedings under section 553 of title 5, United 
States Code.". 
SEC. 203. ORAL ORDERS. 
(a) IN GENERAL.—Section 4c (7 U.S.C. 6c) is amended by adding 
at the end the following new subsection: 
"(g) The Commission shall adopt rules requiring that a contem-
poraneous written record be made, as practicable, of all orders 
for execution on the floor or subject to the rules of each contract 
market placed by a member of the contract market who is present 
on the floor at the time such order is placed.". 
7 use 6c note. 
(b) EFFECTIVE DATE.—The Commission shall adopt the rules 
required by the amendment made under subsection (a) within two 
hundred and seventy days after the date of enactment of this 
Act. 
SEC. 204. TELEMARKETING FRAUD. 
(a) IN GENERAL.—Sectioyi 17(p) (7 U.S.C. 21(p)) is amended— 
(1) by striking "and" at the end of paragraph (2); 
(2) by striking the period at the end of paragraph (3) 
and inserting "; and"; and 
(3) by adding at the end the following new paragraph: 
"(4) establish special supervisory guidelines to protect the 
public interest relating to the solicitation by telephone of new 
futures or options accounts and make such guidelines applicable 
to those members determined to require such guidelines in 
accordance with standards established by the Commission 
consistent with this Act. Such guidelines may include a require-
ment that, with respect to a customer with no previous futures 
or commodity options trading experience, the member may 
not enter an order for the account of such customer for a 
period of three days following opening of the account and receipt 
of a signed acknowledgment by the customer of receipt of a 
risk disclosure statement.". 
7 use 21 note. 
(b) IMPLEMENTATION.—^The guidelines required under section 
17(p)(4) of the Commodity Exchange Act (as added by subsection 
(a) of this section) shall be submitted by a futures association 
registered with the Commodity Futures Trading Commission on 
the date of enactment of this Act to the Commission for the approval 
of the Commission not later than one hundred and eighty days 
after the date of enactment of this Act. 
SEC. 205. UNDERCOVER OPERATIONS AND ENFORCEMENT. 
Section 8(a) of the Commodity Exchange Act (7 U.S.C. 12(a)) 
is amended by— 
PUBLIC LAW 102-546—OCT. 28, 1992 
106 STAT. 3601 
(1) inserting "(1)" after "(a)"; and 
(2) adding at the end the following: 
"(2) In conducting investigations authorized under this sub-
section or any other provision of this Act, the Commission shall 
continue, as the Commission determines necessary, to request the 
assistance of and cooperate with the appropriate Federal agencies 
in the conduct of such investigations, including undercover oper-
ations by such agencies. The Commission and the Department 
of Justice shall assess the effectiveness of such undercover oper-
ations and, within two years of the date of enactment of the Futures 
Trading Practices Act of 1992, shall recommend to Congress any 
additional undercover or other authority for the Commission that 
the Commission or the Department of Justice believes to be nec-
essary.". 
SEC. 206. SELF REGULATORY ORGANIZATION DISCIPLINARY COMMIT-
TEES AND GO^iHERNING BOARDS. 
(a) CONTRACT MARKETS.— 
(1) GOVERNING BOARDS AND DISCIPLINARY COMMITTEES.— 
Subsection (a) of section 5a (7 U.S.C. 7a) (as amended by 
sections 201(a)(1) and 217 of this Act) is further amended 
by adding at the end the following new paragraphs: 
"(14)(A) provide for meaningful representation on the 
governing board of the contract market's board of trade of 
a diversity of interests, including— 
"(i) futures commission merchants; 
"(ii) producers of, and consumers, processors, distribu-
tors, or merchandisers of, principal commodities traded 
on the board of trade; 
"(iii) floor brokers and traders; and 
"(iv) participants in a variety of pits or principal groups 
of commodities traded on the exchange. 
"(B) provide that no less than 20 percent of the regular 
voting members of such board be comprised of nonmembers 
of such contract market's board of trade with— 
"(i) expertise in futures trading, or the regulation 
thereof, or in commodities traded through contracts on 
the board of trade; or 
"(ii) other eminent qualiflcations making such person 
capable of participating in and contributing to board delib-
erations. 
"(C) provide that no less than 10 percent of the regular 
voting members of such board be comprised where applicable 
of farmers, producers, merchants, or exporters of principal 
commodities traded on the exchange; 
"(15)(A) provide on all major disciplinary committees for 
a diversity of membership sufficient to ensure fairness and 
to prevent special treatment or preference for any person in 
the conduct of disciplinary proceedings and the assessment 
of penalties. 
"(B) Consistent with Commission rules, a major disciplinary 
committee hearing a disciplinary matter shall include— 
"(i) a majority of qualified persons representing a trad-
ing status other than that of the subject of the proceeding; 
and 
59-194 O—93 
28 : QL 3 (Pt 4) 
106 STAT. 3602 
PUBLIC LAW 102-546—OCT. 28, 1992 
"(ii) where appropriate to carry out the purposes of 
this Act, qualified persons who are not members of the 
exchange. 
''(C) For purposes of this paragraph, a trading status on 
a contract market may include, consistent with Commission 
rules, such categories as 
(i) 
floor 
brokers and traders; 
(ii) producers, consumers, processors, distributors, or 
merchandisers of commodities; 
(iii) futures commission merchants; and 
(iv) members of the aforementioned categories who 
participate in particular contract markets or principal 
groups of commodities on the board of trade. 
"(D) If a contract market takes final disciplinary action 
against a member for a violation that involves the execution 
of a customer transaction £uid results in financial harm to 
such customer, the contract market shall promptly inform the 
futures commission merchant identified on the records of such 
contract market as having cleared such transaction, and such 
futures commission merchant shall promptly inform the person 
identified on its records as the owner of the account for which 
such transaction was executed, of the disciplinary action and 
the principal facts thereof; 
**(16) provide that no member foimd by the Commission, 
a contract market, a registered futures association, or a court 
of competent jurisdiction to have committed any violation of 
this Act or any other provision of law that would reflect on 
the fitness of the member may serve on any contract market 
oversight or disciplinary panel for an appropriate period (as 
defined by Commission rule); and". 
(2) MAJOR DISCIPLINARY RULE VIOLATIONS.—Section 8c (7 
U.S.C. 12c) is amended— 
(A) by redesignating subsections (1) through (4) as 
subsections (a) through (d); 
(B) in subsection (a), as so redesignated— 
(i) by striking "(A)" and inserting "(1)"; and 
(ii) by striking "(B)" and inserting "(2)*'; 
(C) in subsection (c), as so redesignated, by striking 
"subsection (2)" each place it appears and inserting "sub-
section (b)"; 
(D) in subsection (d), as so redesignated, by striking 
"subsection (1)" and inserting "subsection (a)"; and 
(E) by adding at the end the following: 
"(eXD The Commission shall issue regulations requiring each 
contract market to establish and make available to the public 
a schedule of major violations of any rule within the disciplinary 
jurisdiction of such contract market. 
"(2) The regulations issued by the Commission pursuant to 
this subsection shall prohibit, for a period of time to be determined 
by the Commission, any individual who is found to have committed 
any msgor violation firom service on the governing board of any 
contract market or registered futures association, or on any discipli-
nary committee thereof.". 
(b) REGISTERED FUTURES ASSOCIATIONS.— 
(1) GOVERNING BOARDS AND DISCIPLINARY COMMITTEES.— 
Section 17(b) (7 U.S.C. 21(b)) is amended— 
PUBLIC LAW 102-546—OCT. 28, 1992 
106 STAT. 3603 
(A) in subparagraphs (A) and (B) of paragraph (3) 
by striking "or" at the end; 
(B) in paragraphs (3XD), (4XA), (4XB), (4XC), (4XD), 
(4XF), (5), (6), (7), (8), (9), (9XA), (9XB), and (9XD) by 
striking the period at the end and inserting a semicolon; 
(C) in paragraphs (4XE), (9XC), and (10) by striking 
the period at the end and inserting "; and"; and 
(D) by adding at the end the following new paragraphs: 
"(11) such association provides for meaningful representa-
tion on the governing board of such association of a diversity 
of membership interests and provides that no less than 20 
percent of the regular voting members of such board be com-
prised of qualified nonmembers of or persons who are not 
regulated by such association. 
"(12)(A) such association provides on all major disciplinary 
committees for a diversity of membership sufficient to ensure 
fairness and to prevent special treatment or preference for 
any person in the conduct of disciplinary proceedings and the 
assessment of penalties. 
"(13) A major disciplinary committee hearing a disciplinary 
matter shall include— 
"(A) qualified persons representing segments of the 
association membership other than that of the subject of 
the proceeding; and 
"(B) where appropriate to carry out the purposes of 
this paragraph, qualified persons who are not members 
of the association.". 
(2) MAJOR DISCIPLINARY RULE VIOLATIONS.—Section 17 (7 
U.S.C. 21), as amended bv section 204, is amended by inserting 
after subsection (p) the following: 
"(q)(l) The Commission shall issue regulations requiring each 
registered futures association to establish and make available to 
the public a schedule of major violations of any rule within the 
disciplinarv jurisdiction of such registered futures association. 
"(2) The regulations issued oy the Commission pursuant to 
this subsection shall prohibit, for a period of time to be determined 
by the Commission, any member of a registered futures association 
who is found to have committed any major violation from service 
on the governing board of any registered futures association or 
contract market, or on any disciplinary committee thereof.". 
(c) IMPLEMENTATION.—Not later than two hundred and seventy 7 use 7a note, 
days after the date of enactment of this Act, the Commodity Futures 
Trading Commission shall adopt such rules as are necessary to 
carry out the amendments made by subsections (a) and (b), includ-
ing rules that— 
(1) specify membership categories that shall be represented 
on disciplinary panels; 
(2) define major disciplinary committee" for purposes of 
sections 5a(aX15) and 17(bX12) of the Commodity Exchange 
Act (as added by subsections (a) and (b), respectively); and 
(3) specify the conditions under which such panels shall 
include qualified persons who are not members of the exchange 
or association, which shall include at a minimum— 
(A) any disciplinary action where the subject of such 
action is a member of the contract market or association 
governing board or of any major disciplinary committee 
of such contract market or association; and 
106 STAT. 3604 
PUBLIC LAW 102-546—OCT. 28, 1992 
(B) any disciplinary action based on facts related to 
a claim that the subject of such action manipulated or 
attempted to manipulate the price of a commodity or future 
or option. 
SEC. 207. REQUIRED REGISTRATION OF FLOOR TRADERS. 
(a) REQUIREMENT.—Section 4e (7 U.S.C. 6e) is amended to 
read as follows: 
"SEC. 4e. It shall be unlawful for any person to act as floor 
trader in executing purchases and sales, or as floor broker in 
executing any orders for the purchase or sale, of any commodity 
for future delivery, or involving any contracts of sale of any commod-
ity for future delivery, on or subject to the rules of any contract 
market imless such person shall have registered, under this Act, 
with the Commission as such floor trader or floor broker and 
such registration shall not have expired nor been suspended nor 
revoked.**. 
(b) CONFORMING AMENDMENTS.—The Act is amended— 
(1) in sections 4f(l), 4g(l), and 6d(l) (7 U.S.C. 6£(1), 6g(l), 
13a-2(l)), by striking "or floor broker'* and inserting "floor 
broker, or floor trader^ 
(2) in section 6d(8XA) (7 U.S.C. 13a-2(8XA)), by inserting 
", 
floor 
trader,** after "floor broker**; 
(3) in section 8a(l), (7 U.S.C. 12a(l)), by striking "and 
floor brokers** and inserting "floor brokers, and floor traders**; 
and 
(4) in sections 8a(2XCXi), 8a(2XDXii), and 8a(3XEXii) (7 
U.S.C. 12a(2XCXi), 12a(2XDXii), and 12a(3XEXii)), by inserting 
"floor trader,** after "floor broker,**. 
Eff^ive date. 
(c) REGULATIONS.—The amendments made by this section shall 
become effective one himdred and eighty days after the date of 
enactment of this Act, and the Commodity Futures Trading 
Commission shall issue any regulations necessary to implement 
the amendments made by this section no later than one hundred 
and eighty days after the date of enactment of this Act. 
SEC. 208. ENHANCEMENT OF REGISTRATION REQUIREMENTS. 
(a) INJUNCTIONS.—Section 8a(2XCXii) (7 U.S.C. 12a(2XCXii)) 
is amended to read as follows: 
"(ii) engaging in or continuing any activity where such 
activity involves embezzlement, theft, extortion, fraud, fraudu-
lent conversion, misappropriation of funds, securities or prop-
erty, forgery, counterfeiting, false pretenses, bribery, gambling, 
or any transaction in or advice concerning contract of s£ue 
of a commodity for future delivery, concerning matters subject 
to Commission regulation under section 4c or 19, or concerning 
(b) CERTAIN VIOLATIONS OF LAW.—Section 8a(2XDXiv) (7 U.S.C. 
12a(2XDXiv)) is amended b y -
CD inserting "1001," after "152,**; 
(2) striking "or** after "1342,**; 
(3) inserting "1503, 1623, 1961, 1962, 1963, or 2314,** afl«r 
"1343,**; and 
(4) inserting ", or section 7201 or 7206 of the Internal 
Revenue Code of 1986** after "Code**. 
(c) OTHER VIOLATIONS OF LAW.—Section 8a(2XE) (7 U.S.C. 
12a(2XE)) is amended— 
.. 
., 
7 use 6e note. 
PUBLIC LAW 102-546—OCT. 28, 1992 
106 STAT. 3605 
(1) by striking "by any court of competent jurisdiction," 
and inserting "in a proceeding brought"; and 
(2) in clause (i) by inserting "chapter 96 of title 18 of 
the United States Code," after "1977,". 
(d) REGISTRATION REVOCATION BASED ON INACCURATE STATE-
MENTS.—Section 8a(2)(G) (7 U.S.C. 12a(2XG)) is amended b y -
C
D striking "subparagraphs (A) through (F) of this para-
graph," and inserting "this paragraph and paragraph (3),"; 
(2) striking "material" the first place it appears and insert-
ing "materially^; and 
(3) striking "application" and inserting "application or any 
update thereto". 
(e) GENERAL FELONY CONVICTIONS.—Section 8a(3XD) (7 U.S.C. 
12a(3)(D)) is amended b y -
CD inserting "pleaded guilty to or" aft«r "person"; 
(2) inserting a comma after "section" the first place it 
appears; 
(3) striking "within ten years preceding the filing of the 
application or at any time thereafter,"; 
(4) striking ", including a felony"; and 
(5) striking ", more than" and inserting "more than". 
(f) SPECIAL FELONY CONVICTIONS.—Section 8a(3)(E) (7 U.S.C. 
12a(3XE)) is amended— 
(1) by inserting "pleaded guilty to or" aft«r "person"; 
(2) by striking "within ten years preceding the filing of 
the application for registration or at any time thereafter"; and 
(3) in clause (iv) by inserting ", or section 7203, 7204, 
7205, or 7207 of the Internal Revenue Code of 1986" after 
"Code". 
(g) REGISTRATION DENIED OR CONDITIONED BASED ON INAC-
CURATE STATEMENTS.—Section 8a(3XG) (7 U.S.C. 12a(3XG)) is 
amended by— 
(1) striking "material" the first place it appears and insert-
ing "materially^; 
(2) striking the comma afl«r "application"; 
(3) inserting "or any update thereto," aft«r "application"; 
(4) striking "thereimder, or" and inserting "thereunder,"; 
and 
(5) inserting "or in any registration 
disqualification 
proceeding" aft«r "Commission". 
(h) NON-FEDERAL CRIMINAL CONDUCT.—Section 8a(3XH) (7 
U.S.C. 12a(3XH)) is amended by inserting ", in a United States 
military court," after "State court". 
(i) EXISTING RESTRicrriONS ON MEMBERSHIPS.—Section 8a(3XJ) 
(7 U.S.C. 12a(3XJ)) is amended b y -
C
D striking "or" after "association," the first place it 
appears; 
(2) inserting "or any foreign regulatory body that the 
Commission recognizes as having a comparable regulatory pro-
gram" aft«r "organization," the first place it appears; 
(3) striking "or" after "association," the second place it 
appears; and 
(4) striking "organization;" and inserting "organization, or 
foreign regulatory body;". 
106 STAT. 3606 
PUBLIC LAW 102-546—OCT. 28, 1992 
SEC. 209. ENFORCEMENT OF CIVIL MONEY PENALTIES. 
(a) MONEY PENALTIES.—Section 6 (7 U.S.C. 8 et seq.) is 
amended— 
"[use8, 9, 9a, 
(1) by redesignating subsections (a) through (d) as sub-
°' ^- 
sections (b) through (e), respectively; 
(2) by inserting "(a)" after "Sec. 6"; 
7 use 8. 
(3) in subsection (a), as so redesignated, by striking "para-
graph (a)" and inserting "subsection (b)"; 
7 use 13b. 
(4) in subsection (d), as so redesignated— 
(A) by striking "paragraph (b) of this section" and 
inserting "subsection (c)"; and 
(B) by striking "section 6(b) of this Act" and inserting 
"subsection (c)"; and 
7 use 9a. 
(5) by amending subsection (e), as so redesignated, to read 
as follows: 
"(eXD In determining the amount of the money penalty 
assessed imder subsection (c), the Commission shall consider the 
appropriateness of such penalty to the gravity of the violation. 
"(2) Unless the person against whom a money penalty is 
assessed under subsection (c) shows to the satisfaction of the 
Commission within fifteen days from the expiration of the period 
allowed for payment of such penalty that either an appeal as 
authorized by subsection (c) has been taken or payment of the 
full amount of the penalty then due has been made, at the end 
of such fifteen-day period and until such person shows to the 
satisfaction of the Commission that pa}nnent of such amount with 
interest thereon to date of payment has been made— 
"(A) such person shall be prohibited automatically from 
trading on all contract markets; and 
"(B) if such person is registered with the Commission, 
such registration shall be suspended automatically. 
"(3) If a person against whom a money penalty is assessed 
imder subsection (c) takes an appeal and if the Commission prevails 
or the appeal is dismissed, unless such person shows to the satisfac-
tion of the Commission that payment of the full amount of the 
penalty then due has been made by the end of thirty days from 
the date of entry of 
judgment on the appeal— 
"(A) such person shall be prohibited automatically from 
trading on all contract markets; and 
"(B) if such person is registered with the Commission, 
such registration shall be suspended automatically. 
If the person against whom the money penalty is assessed fails 
to pay such penalty after the lapse of the period allowed for appeal 
or after the affirmance of such penalty, the Commission may refer 
the matter to the Attorney Greneral who shall recover such penalty 
by action in the appropriate United States district court.". 
(b) CONFORMING AMENDMENTS.—^The Commodity Exchange Act 
(7 U.S.C. 1 et seq.) is amended— 
7 use 2a. 
(1) in section 2(aXl)(BXiv)— 
(A) in subclause (I) by striking "section 6(b)" and insert-
ing "section 6(c)"; and 
(B) in subclause (II) by striking "section 6(a)" and 
inserting "section 6(b)"; 
7 use 7. 
(2) in section 5(6), as so redesignated by section 201(cX2), 
by striking "paragraph (b) of section 6" and inserting "section 
6(c)"; 
PUBLIC LAW 102-546—OCT. 28, 1992 
106 STAT. 3607 
(3) in section 5b by striking "paragraph (a) of section 6
*
* 7 use 7b. 
and inserting "section 6ih)"; 
(4) in section 6a(l) by striking "paragraph (a) of section 7 use lOa. 
6" and inserting "section 6ihT; 
(5) in section 6b by striking "paragraph (a) of section 6" 7 use I3a. 
and inserting "section 6(b)"; 
(6) in section 8a— 
^ use I2a. 
(A) in the first proviso to paragraph (2) by striking 
"section 6(b)" and inserting "section 6(c)"; 
(B) in the second proviso to paragraph (3) by striking 
"section 6(b)" and inserting "section 6(c)"; and 
(C) in paragraph (4) by striking "section 6(b)" each 
place it appears and inserting "section 6(c)"; 
(7) in section 14(e) by striking "paragraph (b) of section 7 use 18. 
6" and inserting "section 6(c)"; and 
(8) in section 17— 
7 use 21. 
(A) in subsection (b)— 
(i) in paragraph (3XB) by striking "section 6(b)" 
and inserting "section 6(c)"; and 
(ii) in paragraph (4)(F) by striking "subsection (b) 
of section 6 and inserting "section 6(c) ; 
(B) in subsection (iX4) by striking "section 6(b)" and 
inserting "section 6(c)"; and 
(C) in subsection (oX4) by striking "section 6(b)" and 
inserting "section 6(c)". 
SEC. 210. ETHICS TRAINING FOR REGISTRANTS. 
(a) MANDATORY TRAINING FOR REGISTRANTS.—Section 4p (7 
U.S.C. 6p) is amended by— 
(1) inserting "(a)" after "SEC. 4p."; and 
(2) adding at the end the following: 
"(b) The Commission shall issue regulations to require new 
registrants, within six months after receiving such registration, 
to attend a training session, and all other registrants to attend 
periodic training sessions, to ensure that registrants imderstand 
their responsibilities to the public under this Act, including respon-
sibilities to observe just and equitable principles of trade, any 
rule or regulation of the Commission, any rule of any appropriate 
contract market, registered futures association, or otner self-regu-
latory organization, or any other applicable Federal or state law, 
rule or regulation.". 
(b) REGULATIONS.—The Commodity Futures Trading Commis- 7 use 6p note, 
sion shall issue the regulations required by section 4p(b) of the 
Commodity Exchange Act, as added by subsection (a), no later 
than one hundred and eighty days after the date of enactment 
of this Act. 
SEC. 211. NATIONWIDE SERVICE OF PROCESS AND VENUE. 
Section 22(c) (7 U.S.C. 25(c)) is amended to read as follows: 
"(c) The United States district courts shall have exclusive juris- Courts. 
diction of actions brought under this section. Any such action shall 
be brought not later than two years after the date the cause 
of action arises. Any action brought under subsection (a) of this 
section may be brought in any judicial district wherein the defend-
ant is found, resides, or transacts business, or in the judicial district 
wherein any act or transaction constituting the violation occurs. 
Process in such action may be served in any judicial district of 
106 STAT. 3608 
PUBLIC LAW 102-546—OCT. 28, 1992 
which the defendant is an inhabitant or wherever the defendant 
may be foxind.". 
SEC. 212. INCREASED PENALTIES. 
(a) FELONY VIOLATIONS.—Section 9 (7 U.S.C. 13) is amended— 
(Dby— 
(A) striking subsections (a), (b), and (c); 
(B) redesignating subsections (d) and (e) as subsections 
(c) and (d), respectively; and 
(C) inserting before subsection (c), as redesignated, 
the following new subsections: 
"(a) It shall be a felony punishable by a fine of not more 
than $1,000,000 (or $500,000 in the case of a person who is an 
individual) or imprisonment for not more than five years, or both, 
together with the costs of prosecution, for: 
"(1) Anv 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 such person's 
use or to 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. 
The word Value' as used in this paragraph means face, par, 
or market value, or cost price, either wholesale or retail, which-
ever is greater. 
"(2) Any person to manipulate or attempt to manipulate 
the price of any commodity in interstate commerce, or for 
future delivery on or subject to the rules of any contract market, 
or to corner or attempt to comer any such commodity or know-
ingly to deliver or cause to be delivered for transmission 
through the mails or interstate commerce by telegraph, tele-
phone, wireless, or other means of communication false or 
misleading or knowingly inaccurate reports concerning crop 
or market information or conditions that affect or tend to afiect 
the price of any commodity in interstate commerce, or know-
ingly to violate the provisions of section 4, section 4b, sub-
sections (a) through (e) of subsection 4c, section 4h, section 
4o(l), or section 19. 
"(3) Any person knowingly to make, or cause to be made, 
any statement in any application, report, or document required 
to be filed under this Act or any rule or regulation thereunder 
or any undertaking contained in a registration statement 
reqxiired under this Act, or by any contract market or registered 
futures association in connection with an application for mem-
bership or participation therein or to become associated with 
a member thereof, which statement was false or misleading 
with respect to any material fact, or knowingly to omit any 
material fact required to be stated therein or necessary to 
make the statements therein not misleading. 
"(4) Any person willfully to falsify, conceal, or cover up 
by any trick, scheme, or artifice a material fact, make any 
false, fictitious, or fraudulent statements or representations, 
or make or use any false writing or document knowing the 
same to contain any false, fictitious, or fraudulent statement 
PUBLIC LAW 102-546—OCT. 28, 1992 
106 STAT. 3609 
or entry to a contract market, board of trade, or futures associa-
tion designated or registered under this Act acting in further-
ance of its official duties under this Act. 
"(5) Any person willfully to violate any other provision 
of this Act, or anv rule or regulation thereunder, the violation 
of which is made unlawful or the observance of which is 
required under the terms of this Act, but no person shall 
be subject to imprisonment under this paragraph for the viola-
tion of any rule or regulation if such person proves that he 
had no knowledge of such rule or regulation. 
"(b) Any person convicted of a felonjr under this section shall 
be suspended from registration under this Act and shall be denied 
registration or reregistration for five years or such longer period 
as the Commission may 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 determines that the imposi-
tion 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 such disqualification 
and market bar and for good cause shown reduce the period 
thereof."; 
(2) in subsection (c) (as redesignated by paragraph (1) 
of this section) by striking "$100,000" and inserting "$500,000"; 
and 
(3) in subsection (d) (as redesignated by paragraph (1) 
of this section) by striking "$100,000" and inserting "$500,000". 
(b) OTHER VIOLATIONS.—Section 6(c) and 6(d) (7 U.S.C. 9 and 
13b), as such subsections are redesignated by section 209, are 
each amended by striking "$100,000" each place it appears and 
inserting "the higher of $100,000 or triple tne monetary gain to 
such person". 
(c) NONENFORCEMENT OF RULES OF GOVERNMENT OR OTHER 
VIOLATIONS.—Section 6b (7 U.S.C. 13a) is amended— 
(1) by striking "$100,000" each place it appears and insert-
ing "$500,000"; and 
(2) in the last sentence, by striking "the appropriateness 
of such penalty to the net worth of the offending person and". 
SEC. 213. CONTRACT MARKET EMERGENCY ACTIONS. 
(a) 
PRIOR 
COMMISSION 
NOTIFICATION 
REQUIRED.—Section 
5a(a)(12) (7 U.S.C. 7a(12)), as redesignated by section 201, is 
amended— 
(1) by striking "(12) except" and inserting "(12XA) except"; 
and 
(2) by striking the last two sentences of paragraph (12XA) 
as so redesignated, and inserting the following: 
"(B)(i) The Commission shall issue regulations to specify 
the terms and conditions under which, in an emergency as 
defined by the Commission, a contract market may, by a two-
thirds vote of its governing board, make a rule (hereinafter 
referred to as an 'emergency rule') effective on a temporary 
basis without prior Commission approval, or without compli-
ance with the ten-day notice requirement under subparagraph 
(A), or during any period of review by the Commission, if 
the contract market makes every effort practicable to notify 
106 STAT. 3610 
PUBLIC LAW 102-546—OCT. 28, 1992 
the Commission of such emergency rule, along with a complete 
explanation of the emergency involved, prior to making the 
emergency rule effective. If the contract market does not provide 
the Commission with such notification and explanation before 
making the emergency rule effective, the contract market shall 
provide the Commission with such notification and explanation 
at the earUest possible date. The Commission may delegate 
the power to receive such notification and explanation to such 
individuals as the Commission determines necessary and appro-
priate. 
"(ii) Within ten days of the receipt from a contract market 
of notification of such an emergency rule and an explanation 
of the emergency involved, or as soon as practicable, the 
Commission shall determine whether it is appropriate either— 
"(I) to permit such rule to remain in effect during 
the pendency of the emergency, or 
"(11) to suspend the effect of such rule pending review 
either under the procedures of subparagraph (A) or other-
wise. 
Reports. 
The Conunission shall submit a report on its determination 
and the basis thereof with respect to such emergency rule 
to the affected contract market, to the Committee on Agri-
culture of the House of Representatives and the Committee 
on Agriculture, Nutrition, and Forestry of the Senate. If the 
repoit is submitted more than ten days after the Commission's 
receipt of notification of such an emergency rule from a contract 
market, the report shall explain why submission within such 
ten-day period was not practicable. A determination by the 
Commission to suspend the effect of a rule under this subpara-
graph shall be subject to judicial review on the same basis 
as an emergency determination under section 8a(9). Nothing 
in this paragraph shall be construed to limit the authority 
of the Commission under section SaO);". 
7 use 7a note. 
(b) REGULATIONS.—The Commodity Futures Trading Commis-
sion shall issue regulations to implement section 5a(12XB) of the 
Commodity Exchange Act, as added by subsection (a), no later 
than one hundred and eighty days after the date of enactment 
of this Act. Until the effective date of such regulations, any regula-
tion of the Commission that implements the last two sentences 
of section 5a(12), as such sentences were in effect immediately 
before the date of enactment of this Act, shall remain in effect. 
SEC. 214. PROHIBrnON AGAINST INSIDER TRADING. 
(a) IN GENERAL.—Section 9 (7 U.S.C. 13) is amended by adding 
at the end the following: 
"(f) It shall be a felony for any person— 
"(1) who is an employee, member of the governing board, 
or member of any committee of a board of trade, contract 
market, or registered futures association, in violation of a regu-
lation issued by the Commission, willfully and knowingly to 
trade for such person's ovra account, or for or on behalf of 
any other account, in contracts for future delivery or options 
thereon on tlie basis of, or willfully and knowingly to disclose 
for any purpose inconsistent with the performance of such 
person s official duties as an employee or member, any material 
nonpublic information obtained through special access related 
to the performance of such duties. 
PUBLIC LAW 102-546—OCT. 28, 1992 
106 STAT. 3611 
(2) willfully and knowingly to trade for such person's own 
account, or for or on behalf of any other account, in contracts 
for future delivery or options thereon on the basis of any 
material nonpublic information that such person knows was 
obtained in violation of paragraph (1) from an employee, mem-
ber of the governing board, or member of any committee of 
a board of trade, contract market, or registered futures associa-
tion. 
Such felony shall be punishable by a fine of not more than $500,000, 
plus the amount of any profits realized from such trading or disclo-
sure made in violation of this subsection, or imprisonment for 
not more than five years, or both, together with the costs of prosecu-
tion.". 
(b) REGULATIONS.—The Commodity Futures Trading Commis- ? U
S
C 13 note. 
sion shall issue regulations to implement the amendment made 
by subsection (a) not later than three hundred and sixty days 
after the date of enactment of this Act. 
SEC. 215. QUALIFICATIONS OF COMMISSIONERS. 
Section 2(aX2)(A) (7 U.S.C. 4a(aXl)) is amended by striking 
the second and third sentences and inserting the following: "The President. 
Commission shall be composed of five Commissioners who shall 
be appointed by the President, by and with the advice and consent 
of the Senate. In nominating persons for appointment, the President 
shall— 
"(i) select persons who shall each have demonstrated knowl-
edge in futures trading or its regulation, or the production, 
merchandising, processing or distribution of one or more of 
the commodities or other goods and articles, services, rights, 
and interests covered by this Act; and 
"(ii) seek to ensure that the demonstrated knowledge of 
the Commissioners is balanced with respect to such areas.". 
SEC. 216. COMMISSION OPERATIONS. 
Section 12(b) (7 U.S.C. 16(b)) is amended— 
(1) by designating the first through third sentences as 
paragraphs (1) through (3), respectively; and 
(2) by adding at the end the following new paragraph: 
"(4) The Commission may request (in accordance with the 
procedures set forth in subchapter II of chapter 31 of title 
5, United States Code) and the Office of Personnel Management 
shall authorize pursuant to the request, eight positions in the 
Senior Executive Service in addition to the number of such 
positions authorized for the Commission on the date of enact-
ment of this sentence.". 
SEC. 217. PROHIBITION ON VOTING BY INTERESTED MEMBERS. 
Subsection (a) of section 5a (7 U.S.C. 7a) (as amended by 
sections 201(a) and 206(aXl) of this Act) is further amended by 
adding at the end the following: 
"(17XA) provide for the avoidance of conflict of interest 
in deliberations by the governing board and any disciplinary 
and oversight committees. In order to comply with this subpara-
graph, each contract market shall adopt rules and procedures 
to require, at a minimum, that 
"(i) any member of a governing board or a disciplinary 
or other oversight committee must abstain from confiden-
tial deliberations and voting on any matter where the 
106 STAT. 3612 
PUBLIC LAW 102-546—OCT. 28, 1992 
named party in interest is the member, the member's 
employer, the member's employee, or any other person 
that has a business, employment, or family relationship 
with the member that warrants abstention by the member; 
**(ii) any member of a governing board or a disciplinary 
or other oversight committee must abstain from voting 
on any significant action that would not be submitted to 
the Commission for its prior approval, if, as determined 
in accordance with regulations promulgated by the 
Commission, the member knowingly has a direct and 
substantial financial interest in the result of the vote, 
based either on positions held personally or at an affiliated 
firm; 
"(iii) prior to the deliberations of the governing board, 
disciplinary board, or other oversight committee, acting 
directly or indirectly through an authorized member or 
contract market official, the positions of the members of 
such board or committee, and positions of the firm or 
firms with which such members are affiliated, are reviewed: 
Provided, however, That no contract market or official, 
employee, member, other than the member whose position 
or positions are being reviewed, or agent thereof shall 
be subject to liability, except for liability in an action initi-
ated by the Commission, for having conducted this review 
and for having token or not token further action; and 
"(iv) the board or committoe shall clearly reflect, in 
the minutos of such meeting, that the review required 
in clause (iii) occurred and any decisions by a member 
to abstoin or by the board or committee whether to direct 
a member or members to abstoin from deliberations or 
voting on the matter before the board or committee. 
Any member prohibited from voting on a rule pursuant to 
this paragraph shall not be included in determining whether 
there has been a two-thirds vote of members of the governing 
board or committee as required by subparagraph (12). 
"(B) For the purposes of this paragraph, the term 'signifi-
cant action that would not be submitted to the Commission 
for ite prior approval' includes— 
**(i) any nonphysical emergency rule; or 
"(ii) any changes in margin levels designed to respond 
to extraordmary market conditions that are likely to nave 
a substontial affect on prices in any contract traded on 
such contract market, but does not include any rule not 
submitted for prior Commission approval because such rule 
is unrelated to terms and conditions of any contract traded 
on such contract market. 
"(C) Notwithstonding the provisions of subparagraph (AXii)> 
the Commission shall issue rules estoblishing the conditions 
under which a member of a board or committee who is required 
to abstoin from voting on a significant action, as provided 
in subparagraph (AXii), may participate in deliberations on 
that action prior to such vote, where the member's participation 
is consistent with the public interest.". 
7 use 16a note. 
SEC. 218. STUDY OF ASSESSMENTS ON TRANSACTIONS. 
(a) STUDY.—The Comptroller General of the United Stotes shall 
conduct a study to determme whether— 
PUBLIC LAW 102-546—OCT. 28, 1992 
106 STAT. 3613 
(1) it is feasible to fund some or all of the enforcement 
and market surveillance activities of the Commodity Futures 
Trading Commission, as required by the amendments to the 
Commodity Exchange Act made by the Futures Trading Prac-
tices Act of 1992, through the imposition of an assessment 
on commodity futures and options transactions executed pursu-
ant to the Commodity Exchange Act; and 
(2) a program of assessment-based fimding for some or 
all of such enforcement and market surveillance activities would 
better provide resources to the Commodity Futures Trading 
Commission to enable the Commission to— 
(A) protect the interests of market users (including 
hedgers and speculators), producers of commodities traded 
on the futures markets, and the general public; and 
(B) maintain and enhance the credibility of such 
futures and options markets. 
(b) REPORT.—Not later than one year after the date of enact-
ment of this Act, the Comptroller General shall submit to the 
Committee on Agriculture of the House of Representatives and 
the Committee on Agriculture, Nutrition, and Forestry of the Senate 
a report containing the Comptroller General's determinations pursu-
ant to subsection (a), together with any appropriate recommenda-
tions for the implementation of such a program of assessment-
based funding for some or all of the Commodity Futures Trading 
Commission's enforcement and market surveillance activities. 
SEC. 219. COMPETmVENESS STUDY. 
7 USC 4a note. 
(a) IN GENERAL.—No later than eighteen months following the 
enactment of this Act, the Commodity Futures Trading Commission 
shall study the competitiveness of boards of trade over which it 
has jurisdiction comi)ared with the boards of trade (or their foreign 
equivalent) over which foreign futures authorities, as defined in 
section 2(aXlXA) of the Commodity Exchange Act (7 U.S.C. 
2(aXlXA)), have jurisdiction, and submit to the Committee on Agri-
culture of the House of Representatives and the Committee on 
Agriculture, Nutrition, and Forestry of the Senate a report of its 
findings with respect to— 
(1) the overall competitive status of United States boards 
of trade in the world market; 
(2) a comparison of applicable statutes, rules, or regulations 
as they relate to futures and options administered and enforced 
by the Commission and those administered and enforced by 
foreign futures authorities; 
(3) any trends in, or movements of, volume of futures 
and options trading to or from United States boards of trade 
during the period of the study, and whether such trends or 
movements, if any, were the result of the adoption of statutes, 
regulations, or otner enforcement mechanisms in foreign coun-
tries or the United States, as opposed to other competitive, 
economic, regional, or commercial factors; 
(4) any significant harms or risks to the public interest, 
market users, traders, and commerce in relation to futures 
or options traded on such foreign boards of trade which may 
result from the absence of statutes, regulations, or other 
enforcement mechanisms in foreign countries or the United 
106 STAT. 3614 
PUBLIC LAW 102-546—OCT. 28, 1992 
States or disparities in regulatory protections offered by United 
States and foreign authorities; and 
(5) any recommendations the Commission may have as 
a result of the study to enhance the competitive status of 
United States boards of trade in the world market, or to 
enhance the regulations of markets in the global environment, 
that will not impair customer confidence in United States 
boards of trade. 
(b) COOPERATION.—^To promote the efficient use of resources, 
the Commission shall endeavor, as it determines appropriate, to 
obtain the assistance of the Greneral Accounting Office, the Office 
of the United States Trade Representative, or other appropriate 
offices of the Federal Government in order to obtain information 
with regard to trading at foreign boards of trade and the regulation 
of such boards of trade by foreign futures authorities. 
SEC. 220. COMPUTERIZED FUTURES TRADING. 
(a) INTERNATIONAL COMPETITIVENESS OF ELECTRONIC TRADING 
SYSTEMS.—Section 12 (7 U.S.C. 16) (as amended by section 303 
of this Act) is further amended by adding at the end the following 
new subsection: 
"(g) Consistent with its responsibilities under section 18, the 
Commission is directed to facilitate the development and operation 
of computerized trading as an adjunct to the open outcry auction 
system. The Commission is further directed to cooperate with the 
Office of the United States Trade Representative, the Department 
of the Treasury, the Department of Commerce, and the Department 
of State in order to remove any trade barriers that may be imposed 
by a foreign nation on the international use of electronic trading 
systems.". 
7 use 22 note. 
(b) STUDY.—The Commodity Futures Trading Commission shall 
conduct a study to assess— 
(1) the progress made under initiatives to conduct trading 
in futures and options subject to the jurisdiction of the Commis-
sion under the Commodity Exchange Act through systems of 
computers or by other electronic means; and 
(2) whether the experience with such systems of trading 
indicates that they may be useful or effective to enhance access 
to the futures and options markets by potential market partici-
pants, improve the ability of the Commission to audit the 
activities of the futures and options markets, reduce the oppor-
tunity for trading abuses, and otherwise be in the public 
interest or raise other related issues. 
(c) REPORT.—Not later than two years after the date of enact-
ment of this Act, the Commission shall submit to the Committee 
on Agriculture of the House of Representatives and the Committee 
on .^^riculture. Nutrition, and Forestry of the Senate a report 
containing the results of the study conducted under subsection 
(a), together with any appropriate recommendations. 
7 use 13a-l. 
SEC. 221. MONEY PENALTIES IN CIVIL COURT ACTIONS. 
Section 6c (7 U.S.C. 13c) is amended— 
(1) by designating the first, second, third, fourth, fifth, 
and sixth sentences as subsections (a), (b), (c), (e), (f), and 
(g), respectively; and 
(2) by inserting after subsection (c) (as so designated) the 
following new subsection: 
PUBLIC LAW 102-546—OCT. 28, 1992 
106 STAT. 3615 
"(d)(1) In any action brought under this section, the Commission 
may seek and the court shall have jurisdiction to impose, on a 
proper showing, on any person found in the action to have commit-
ted any violation a civil penalty in the amount of not more than 
the higher of $100,000 or triple the monetary gain to the person 
for each violation. 
"(2) If a person on whom such a penalty is imposed fails 
to pay the penalty within the time prescribed in the court's order, 
the (Commission may refer the matter to the Attorney CJeneral 
who shall recover the penalty by action in the appropriate United 
States district court.". 
SEC. 222. CIVIL DAMAGES; LIABILITY OF FUTURES COMMISSION MER-
CHANTS. 
(a) DUTIES OF CONTRACT MARKETS.—Subsection (a)(ll) of sec-
tion 5a (7 U.S.C. 7a) (as amended by section 201(a)(1) of this 
Act) is further amended— 
(1) by striking "(i)" and inserting "(A)"; 
(2) by striking "voluntary and (ii)" and inserting "voluntary, 
(B)'';and 
(3) by inserting after the word "market" the following: 
", and ((5) in the case of a claim arising from a violation 
in the execution of an order on the floor of a contract market, 
such procedure shall provide, to the extent appropriate— 
"(i) for payment of actual damages proximately caused 
by such violation. If an award of actual damages is made 
against a floor broker in connection with the execution 
of a customer order, and the futures commission merchant 
which selected the floor broker for the execution of the 
customer order is held to be responsible under section 
2(aXl) for the floor broker's violation, such futures commis-
sion merchant may be required to satisfy such award; 
and 
"(ii) where the violation is willful and intentional, for 
pajrment to the customer of punitive or exemplary damages, 
in addition to losses proximately caused by the violation, 
in an amount equal to no more than two times the amount 
of such losses. If punitive or exemplary damages are 
awarded against a floor broker in connection with the 
execution of a customer order, and the futures commission 
merchant which selected the floor broker for the execution 
of such order is held to be responsible under section 2(a)(1) 
for the floor broker's violation, such futures commission 
merchant may be required to satisfy the award of punitive 
or exemplary damages if the floor broker fails to do so, 
except that such requirement shall apply to the futures 
commission merchant only if it willfully and intentionallpr 
selected the floor broker with the intent to assist or facili-
tate the floor broker's violation;". 
(b) COMPLAINTS AGAINST REGISTERED PERSONS.—Section 14(a) 
(7 U.S.C. 18(a)) is amended by striking "awarding actual damages 
proximately caused by such violation." and inserting "awarding— 
"(1) actual damages proximately caused by such violation. 
If an award of actual damages is made against a floor broker 
in connection with the execution of a customer order, and 
the futures commission merchant which selected the floor 
broker for the execution of the customer order is held to be 
106 STAT. 3616 
PUBLIC LAW 102-546—OCT. 28, 1992 
responsible under section 2(a)(1) for the floor broker's violation, 
such futures commission merchant may be required to satisfy 
such award; and 
"(2) in the case of any action arising from a willful and 
intentional violation in the execution of an order on the floor 
of a contract market, punitive or exemplary damages equal 
to no more than two times the amount of such actual damages. 
If an award of punitive or exemplary damages is made against 
a floor broker in connection with the execution of a customer 
order, and the futures commission merchant which selected 
the floor broker for the execution of the customer order is 
held to be responsible under section 2(a)(1) for the floor broker's 
violation, such futures commission merchant may be required 
to satisfy such award if the floor broker fails to do so, except 
that such requirement shall apply to the futures commission 
merchant only if it willfully and intentionally selected the floor 
broker with the intent to assist or facilitate the floor broker's 
violation.". 
(c) REGISTERED FUTURES ASSOCIATIONS.—Section 17(bX10) (7 
U.S.C. 21(b)(10)) (as amended by section 206(b)(1) of this Act) 
is further amended— 
(1) by striking "(i)" and inserting "(A)"; 
(2) by striking "voluntary and (ii)" and inserting "voluntary, 
(B)"; and 
(3) by inserting after the word "association" the following: 
", and (C) in the case of a claim arising from a violation 
in the execution of an order on the floor of a contract market, 
such procedure shall provide, to the extent appropriate— 
"(i) for payment of actual damages proximately caused 
by such violation. If an award of actual damages is made 
against a floor broker in connection with the execution 
of a customer order, and the futures commission merchant 
which selected the floor broker for the execution of the 
customer order is held to be responsible under section 
2(a)(1) for the floor broker's violation, such futures commis-
sion merchant may be required to satisfy such award; 
and 
"(ii) where the violation is willful and intentional, for 
payment to the customer of punitive or exemplary damages, 
in addition to losses proximately caused by the violation, 
in an amount equal to no more than two times the amount 
of such losses. If punitive or exemplary damages are 
awarded against a floor broker in connection with the 
execution of a customer order, and the futures commission 
merchant which selected the floor broker for the execution 
of such order is held to be responsible under section 2(aXl) 
for the floor broker's violation, such futures commission 
merchant may be required to satisfy the award of punitive 
or exemplary damages if the floor broker fails to do so, 
except that such requirement shall apply to the futures 
commission merchant only if it willfully and intentionally 
selected the floor broker with the intent to assist or facili-
tate the floor broker's violation". 
(d) PRIVATE RIGHTS OF ACTION.—Section 22(a) (7 U.S.C. 25(a)) 
is amended by adding at the end the following new paragraph: 
PUBLIC LAW 102-546—OCT. 28, 1992 
106 STAT. 3617 
"(3) In any action arising from a violation in the execution 
of an order on the floor of a contract market, the person referred 
to in paragraph (1) shall be liable for— 
"(A) actual damages proximately caused by such violation. 
If an award of actual damages is made against a floor broker 
in connection with the execution of a customer order, and 
the futures commission merchant which selected the floor 
broker for the execution of the customer order is held to be 
responsible under section 2(a)(1) for the floor broker's violation, 
sucn futures commission merchant may be required to satisfy 
such award; and 
"(B) where the violation is willful and intentional, punitive 
or exemplary damages equal to no more than two times the 
amount of such actual damages. If an award of punitive or 
exemplary damages is made against a floor broker in connection 
with the execution of a customer order, and the futures commis-
sion merchant which selected the floor broker for the execution 
of the customer order is held to be responsible under section 
2(aXl) for the floor broker's violation, such futures commission 
merchant may be required to satisfy such award if the floor 
broker fails to do so, except that sucn requirement shall apply 
to the futures commission merchant only if it willfully and 
intentionally selected the floor broker with the intent to assist 
or facilitate the floor broker's violation.". 
SEC. 223. CUSTOMER RESTITUTION. 
The tenth sentence of section 6(c) (7 U.S.C. 9) (as redesignated 
by section 209(aXl) of this Act) is amended— 
(1) by inserting "(1)" after "maj^ the first place it appears; 
(2) by striking "and, if and inserting "(2) if; 
(3) by striking "may suspend" and inserting "suspend"; 
(4) by striking "and majr" and inserting "(3)"; and 
(5) by inserting before the period the following: "and (4) 
require restitution to customers of damages proximately caused 
by violations of such persons". 
SEC. 224. COMPLAINTS AGAINST REGISTERED 
PERSONS; CLASS 
ACTION SUITS. 
Section 14(a) (7 U.S.C. 18(a)) (as amended by section 222(b) 
of this Act) is further amended— 
(1) by redesignating paragraphs (1) and (2) as subpara-
graphs (A) and (B), respectively; 
(2) by inserting "(1)" after the subsection designation; and 
(3) by adding at the end the following new paragraph: 
"(2XA) An action may be brought under this subsection 
by any one or more persons described in this subsection for 
and in behalf of such person or persons and other persons 
similarly situated, if the Commission permits such actions 
pursuant to a final rule issued by the Commission. 
"(B) Not later than two hundred and seventy days aft«r 
the date of enactment of this paragraph, the Commission shall 
propose and publish for public comment such rules as are 
necessary to carry out subparagraph (A). In developing such 
rules, the Commission shall consider the potential impact of 
such actions on resources available to the reparations system 
established under this Act and the relative merits of bringing 
such actions in Federal court.". 
106 STAT. 3618 
PUBLIC LAW 102-546—OCT. 28, 1992 
7 use 13 note. 
SEC. 225. PENALTIES STUDY AND GUTOELINES. 
(a) STUDY.—^The Commodity Futures Trading Commission shall 
study the penalties the Commission imposes against persons found 
to have violated the Commodity Exchange Act (7 U.S.C. 1 et seq.) 
and the penalties imposed by contract markets and registered 
futures associations against persons found to have violated their 
respective rules established under such Act. 
(b) REPORT.—Not later than two years after the date of enact-
ment of this Act, the Commission shall submit to the Committee 
on Agriculture of the House of Representatives and the Committee 
on A^culture, Nutrition, and Forestry of the Senate a report 
that describes the results of the study conducted under subsection 
(a). The report shall— 
(1) include an analysis of whether systematic differences 
exist among penalties imposed by various contract markets 
and registered futures associations for similar offenses, and, 
if so, the causes of such differences; 
(2) propose industry-wide guidelines or rules to make pen-
alty levels among contract markets and registered futures 
associations consistent, including, if appropriate, minimum pen-
alties or penalty ranges for various offenses; and 
(3) propose guidelines or rules to make Commission penalty 
levels consistent, including, if appropriate, minimum penalties 
or penalty ranges for various offenses. 
SEC. 226. PUBUCATION OF COMMISSION OPINIONS. 
Section 2(a)(9) (7 U.S.C. 4a(h)) is amended by adding at the 
end the following new subparagraph: 
''(C) Whenever the Commission issues for official publication 
any opinion, release, rule, order, interpretation, or other determina-
tion on a matter, the Commission shall provide that any dissenting, 
concurring, or separate opinion by any Commissioner on the matter 
be published in full along with the Commission opinion, release, 
rule, order, interpretation, or determination.". 
SEC. 227. SUSPENSION OF REGISTRANTS CHARGED WITH FELONIES. 
Section 8a (7 U.S.C. 12a) is amended— 
(1) by striking "and" at the end of paragraph (9); 
(2) by striking the period at the end of paragraph (10) 
and inserting''; and"; and 
(3) by adding at the end the following new paragraph: 
**(11XA) by written notice served on the person and pursu-
ant to such rules, regulations, and orders as the Commission 
may adopt, to suspend or modify the registration of any person 
registered imder this Act who is charged (in any information, 
indictment, or complaint authorized by a United States attorney 
or an appropriate official of any State) with the commission 
of or participation in a crime involving a violation of this 
Act, or a violation of any other provision of Federal or State 
law that would reflect on the honesty or the fitness of the 
person to act as a fiducianr (including an offense specified 
in subparagraph (D) or (E) of paragraph (2)) that is punishable 
by imprisonment for a term exceeding one year, if the Commis-
sion determines that continued registration of the person may 
pose a threat to the pubUc interest or may threaten to impair 
public confidence in any market regulated by the Commission. 
PUBLIC LAW 102-546—(Xrr. 28, 1992 
106 STAT. 3619 
"(B) Prior to the suspension or modification of the registra-
tion of a person under this paragraph, the person shall be 
afiforded an opportunity for a hearing at which the Commission 
shall have the burden of showing tnat the continued registra-
tion of the person does, or is likely to, pose a threat to the 
public interest or threaten to impair public confidence in any 
market regulated by the Commission. 
"(C) Any notice of suspension or modification issued under 
this paragraph shall remain in effect until such information, 
indictment, or complaint is disposed of or until terminated 
by the Commission. 
"(D) On disposition of such information, indictment, or 
complaint, the Commission may issue and serve on such person 
an order pursuant to paragraph (2) or (4) to suspend, restrict, 
or revoke the registration or such person. 
"(E) A fincUng of not guilty or other disposition of the 
charge shall not preclude the Commission from thereafter 
instituting any other proceedings under this Act. 
"(F) A person aggrieved by an order issued under this 
paragraph may obtain review of such order in the same manner 
and on the same terms and conditions as are provided in 
section 60)).". 
SEC. 228. APPEALS BY REGISTERED FUTURES ASSOCIATIONS. 
Section 17(iX4) (7 U.S.C. 21(iX4)) is amended by striking "(other 
than a registered futures association)." 
SEC. 229. RISK ASSESSMENT FOR HOLDING COMPANY SYSTEMS. 
Section 4f (7 U.S.C. 6f) (as amended by section 207(bXl) of 
this Act) is further amended— 
(1) by redesignating paragraphs (1) and (2) as subsections 
(a) and (b), respectively; 
(2) in subsection (b) (as so redesignated), by striking "this 
paragraph (2)" and inserting "this subsection"; and 
(3) oy adding at the end the following new subsection: 
"(cXl) As used in mis subsection: 
"(i) The term 'affiliated person' means any person directly 
or indirectly controlling, controlled by, or imder common control 
with a futures commission merchant, as the Commission, by 
rule or regulation, may determine will effectuate the purposes 
of this subsection. 
"(ii) The term 'Federal banking agency* shall have the 
same meaning as the term 'appropriate Federal banking agencr/ 
in section 3(qj of the Federal Deposit Insurance Act (12 U.S.C. 
1813(q)). 
"(2XA) Each re^stered futures commission merchant shall Records. 
obtain such information and make and keep such records as the 
Commission, by rule or regulation, prescribes concerning the reg-
istered futures commission merchant's policies, procedures, or sys-
tems for monitoring and controlling financial and operational risks 
to it resulting from the activities of any of its affiliated persons, 
other theui a natural person. 
"(B) The records required under subparagraph (A) shall 
describe, in the aggregate, each of the futures and other financial 
activities conducted by, and the customary sources of capitel and 
funding of, those of its affiliated persons whose business activities 
are reasonably likely to have a material impact on the financial 
or operational condition of the futures commission merchant, includ-
106 STAT. 3620 
PUBLIC LAW 102-546—OCT. 28, 1992 
ing its adjusted net capital, its liquidity, or its ability to conduct 
or finance its operations. 
"(C) The Commission, by rule or regulation, may require sum-
mary reports of such information to be filed by the futures commis-
sion merchant with the Commission no more frequently than 
quarterly. 
"(3)(A), If, as a result of adverse market conditions or based 
on reports provided to the Commission pursuant to paragraph (2) 
or other available information, the Commission reasonably con-
cludes that the Commission has concerns regarding the financial 
or operational condition of any registered futures commission mer-
chant, the Commission may require the futures commission mer-
chant to make reports concerning the futures and other financial 
activities of any of such person's affiliated persons, other than 
a natural person, whose business activities are reasonably likely 
to have a material impact on the financial or operational condition 
of the futures commission merchant. 
"(B) The Commission, in requiring reports pursuant to this 
paragraph, shall specify the information required, the period for 
which it is required, the time and date on which the information 
must be furnished, and whether the information is to be furnished 
directly to the Commission or to a contract market or other self-
regulatory organization with primary responsibility for examining 
the registered futures commission merchant's financial and oper-
ational condition. 
"(4XA) in developing and implementing reporting requirements 
pursuant to paragraph (2) with respect to affiliated persons subject 
to examination by or reporting requirements of a Federal banlang 
agency, the Commission shall consult with and consider the views 
of each such Federal banking agency. If a Federal banking agency 
comments in writing on a proposed rule of the Commission under 
this subsection that has been published for comment, the Commis-
sion shall respond in writing to the written comment before adopting 
Federal 
the proposed rule. The Commission shall, at the request of the 
^®^?*®f.' 
Federal banking agency, publish the comment and response in 
pu ica ion. 
^j^^ Federal Register at the time of publishing the adopted rule. 
"(B)(i) Except as provided in clause (ii), a registered futures 
commission merchant shall be considered to have compiled with 
a recordkeeping or reporting requirement adopted pursuant to para-
graph (2) concerning an affiliated person that is subject to examina-
tion by, or reporting requirements of, a Federal banking agency 
if the futures commission merchant utilizes for the recordkeeping 
or reporting requirement copies of reports filed by the affiliated 
person with the Federal banking agency pursuant to section 5211 
of the Revised Statutes (12 U.S.C. 161), section 9 of the Federal 
Reserve Act (12 U.S.C. 321 et seq.), section 7(a) of the Federal 
Deposit Insurance Act (12 U.S.C. 1817(a), section 10(b) of the Home 
Owners' Loan Act (12 U.S.C. 1467a(b)), or section 5 of the Bank 
Holding Company Act of 1956 (12 U.S.C. 1844). 
"(ii) The Commission may, by rule adopted pursuant to para-
graph (2), require any futures commission merchant filing the 
reports with the Commission to obtain, maintain, or report supple-
mental information if the Commission makes an explicit finding 
that the supplemental information is necessary to inform the 
Commission regarding potential risks to the futures commission 
merchant. Prior to requiring any such supplemental information, 
PUBLIC LAW 102-546—OCT. 28, 1992 
106 STAT. 3621 
the Commission shall first request the Federal banking agency 
to expand its reporting requirements to include the information. 
"(5) Prior to making a request pursuant to paragraph (3) for 
information with respect to an afGliated person that is subject 
to examination by or reporting requirements of a Federal banlung 
agency, the Commission shall— 
"(A) notify the agency of the information required with 
respect to the affiliated person; and 
"(B) consult with the agency to determine whether the 
information required is available nrom the agency and for other 
purposes, unless the Commission determines that any delay 
resulting from the consultation would be inconsistent with 
ensuring the financial and operational condition of the futures 
commission merchant or the stability or integrity of the futures 
markets. 
"(6) Nothing in this subsection shall be construed to permit 
the Commission to require any futures commission merchant to 
obtain, maintain, or furnish any examination report of any Federal 
banking agency or any supervisory recommendations or analysis 
contained in the report. 
"(7) No information provided to or obtained by the Commission 
from any Federal banking agency pursuant to a request under 
paragraph (5) regarding any affiliated person that is subject to 
examination by or reporting requirements of a Federal banking 
agency may be disclosed to any other person (other than as provided 
in section 8 or section 8a(6)), without the prior written approval 
of the Federal banking agency. 
**(8) The Commission snail notify a Federal banking agency 
of any concerns of the Commission regarding significant financial 
or operational risks resulting from the activities of any futures 
commission merchant to any affiliated person thereof that is subject 
to examination by or reporting requirements of the Federal banlang 
agency. 
"(9) The Commission, by rule, regulation, or order, may exempt 
any person or class of persons under such terms and conditions 
and for such periods as the Commission shall provide in the rule, 
regulation, or order, from this subsection and the rules and regula-
tions issued under this subsection. In granting the exemption, the 
Commission shall consider, among other factors— 
"(A) whether information of the type required under this 
subsection is available from a supervisory agency (as defined 
in section 1101(7) of the Right to Financial Privacy Act of 
1978 (12 U.S.C. 3401(7))), a State insurance commission or 
similar State agency, the Securities and Exchange Commission, 
or a similar foreign regulator; 
"(B) the primary business of any affiliated person; 
"(C) the nature and extent of domestic or foreign regulation 
of the affiliated person's activities; 
"(D) the nature and extent of the registered futures commis-
sion merchant's commodity futures and options activities; and 
"(E) with respect to the registered futures commission mer-
chant and its affiliated persons, on a consolidated basis, the 
amount and proportion of assets devoted to, and revenues 
derived from activities in the United States futures markets. 
"(10) Information required to be provided pursuant to this 
subsection shall be subject to section 8. Except as specifically pro-
vided in section 8 and notv/ithstanding any other provision of law. 
106 STAT. 3622 
PUBLIC LAW 102-546—OCT. 28, 1992 
the Commission shall not be compelled to disclose any information 
required to be reported under this subsection, or any information 
supplied to the Commission b^ any domestic or foreign regulatory 
agency that relates to the financial or operational condition of 
any affiliated person of a registered futures commission merchant. 
"(11) Nothing in paragraphs (1) through (10) shall be construed 
to supersede or to limit in any way the authority or powers of 
the (Jommission pursuant to aiw other provision of this Act or 
regulations issued under this Act. . 
TITLE III—ASSISTANCE TO FOREIGN FUTURES 
AUTHORITIES 
SEC. 301. SUBPOENA AUTHORITY. 
The third sentence of section 6(c) (7 U.S.C. 15) (as redesignated 
by section 209(aXl)) is amended— 
(1) by striking "Act and" and inserting "Act,"; and 
(2) by striking "Act, a n / ' and inserting "Act, and for the 
purpose of any action taken under section 12(f), any". 
SEC. 302. COOPERATION WITH FOREIGN FUTURES AUTHORITIES. 
Section 12(a) (7 U.S.C. 16(a)) is amended by inserting after 
"thereof," the following: "any foreign futures authority, any depart-
ment or agency of a foreign government or political suodivision 
thereof,". 
SEC. 303. INVESTIGATIVE 
ASSISTANCE 
TO 
FOREIGN 
FUTURES 
AUTHORITIES. 
Section 12 (7 U.S.C. 16) is amended by adding at the end 
the following: 
"(f)(1) On request from a foreign futures authority, the Commis-
sion may, in its discretion, provide assistance in accordance with 
this section if the requesting authority states that the requesting 
authority is conducting an investigation which it deems necessary 
to determine whether any person has violated, is violating, or 
is about to violate any laws, rules or regulations relating to futures 
or options matters that the requesting authority administers or 
enforces. The Commission may conduct such investigation as the 
Commission deems necessary to collect information and evidence 
pertinent to the request for assistance. Such assistance may be 
provided without regard to whether the facts stated in the request 
would also constitute a violation of the laws of the United States. 
"(2) In deciding whether to provide assistance under this sub-
section, the Commission shall consider whether— 
"(A) the requesting authority has agreed to provide recip-
rocal assistance to the Commission in futures ana options mat-
ters; and 
"(B) compliance with the request would prejudice the public 
interest of the United States. 
"(3) Notwithstanding any other provision of law, the Commis-
sion may accept payment and reimbursement, in cash or in kind, 
from a foreign futures authority, or made on behalf of such author-
ity, for necessary expenses incurred by the Commission, its mem-
bers, and employees in carrying out any investigation, or in provid-
ing any other assistance to a foreign futures authority, pursuant 
to this section. Any payment or reimbursement accepted shall be 
considered a reimbursement to the appropriated funds of the 
Commission.". 
PUBLIC LAW 102-546—OCT. 28, 1992 
106 STAT. 3623 
SEC. 304. DISCLOSURE OF INFORMATION RECEIVED FROM FOREIGN 
FUTURES AUTHORITIES. 
Section 8 of the Commodity Exchange Act (7 U.S.C. 12) is 
amended— 
(1) by adding at the end of subsection (aXl) (as so redesig-
nated by section 205(1)), the following: 
The Commission shall not be compelled to disclose any information 
or data obtained 
from 
a foreign futures authority if— 
"(A) the foreign futures authority has in good faith deter-
mined and represented to the Commission that disclosure of 
such information or data by that foreign futures authority 
would violate the laws applicable to that foreign futures author-
ity; and 
"(B) the Commission obtains such information pursuant 
to— 
"(i) such procedure SLB the Commission may authorize 
for use in connection with the administration or enforce-
ment of this Act; or 
"(ii) a memorandum of imderstanding with that foreign 
futures authority; 
except that nothing in this subsection shedl prevent the 
Conunission from disclosing publicly any information or data 
obtained by the Commiission from a foreign futures authority 
when such disclosure is made in connection with a congressional 
E
roceeding, an administrative or judicial proceeding commenced 
y the United States or the Commission, in any receivership 
proceeding commenced involving a receiver appointed in a 
judicial proceeding by the United States or the Commission, 
or in any proceeding under title 11 of the United States Code 
in which the Commission has intervened or in which the 
Commission has the right to appear and be heard. Nothing 
in this subsection shall be construed to authorize the Commis-
sion to withhold information or data from Congress. For 
purposes of section 552 of title 5, United States Code, this 
subsection shall be considered a statute described in subsection 
(bX3XB) of section 552."; and 
(2) by adding at the end of subsection (b) the following: 
This subsection shall not apply to the disclosure of data or 
information obtained by the Commission from a foreign futures 
authority.". 
SEC. 305. DISCLOSURE OF INFORMATION TO FOREIGN FUTURES 
AUTHORITIES 
Section 8(e) (7 U.S.C. 12(e)) is amended— 
(1) in the fifth sentence— 
(A) by inserting after "jurisdiction," the first place it 
appears me following: "any foreign futures authority,"; and 
(B) by inserting after "suc^" the foUoMring: "foreign 
futures authority,"; and 
(2) in the last sentence— 
(A) by inserting after "information to a" the following: 
"foreign futures aumority or to a"; 
(B) by inserting after "disclosed by such" the following: 
"foreign futures autnority,"; and 
(C) by inserting after "or agency thereoP the following: 
", or foreign futures authority.". 
106 STAT. 3624 
PUBLIC LAW 102-546—OCT. 28, 1992 
TITLE IV—AUTHORIZATION OF APPROPRIATIONS; 
TECHNICAL AMENDMENTS; EFFECTIVE DATE 
SEC. 401. AUTHORIZATION OF APPROPRIATIONS. 
Section 12(d) (7 U.S.C. 16(d)) is amended to read as follows: 
"(d) There are authorized to be appropriated to carry out this 
"(1) $53,000,000 for fiscal year 1993; and 
"(2) $60,000,000 for fiscal year 1994.". 
SEC. 402. TECHNICAL AMENDMENTS. 
The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended— 
(1) by striking "commission" in— 
7 use 6a. 
(A) section 4a (as amended by paragraph (2)) each 
place it appears, other than in subsection (d), as so redesig-
nated; 
'7 use 8. 
(B) section 6(b), as so redesignated by section 209(a)(1), 
each place it appears; 
•
^ use 9. 
(C) section 6(c), as so redesignated by section 209(aXl); 
7 use 13c. 
(D) section 13(c); and inserting "Commission"; 
(2) in section 4a (7 U.S.C. 6a)— 
(A) in subsection (1) by striking "subparagraphs 2 (A) 
and (B)" and inserting "paragraphs (1) and (2) of subsection 
(b)"; 
(B) in subsection (3) by striking "subsection (1)" and 
inserting "subsection (a)"; 
(C) by redesignating subsections (1) through (5) as 
subsections (a) through (e), respectively; and 
(D) in subsection (b), as so redesignated, by redesignat-
ing paragraphs (A) and (B) as paragraphs (1) and (2), 
respectively. 
7 use 6b. 
(3) in section 4b— 
(A) by redesignating subdivisions (A) through (D) as 
subdivisions (i) through (iv), respectively; 
(B) by striking "(a)", "(b)*, and "(c)", and inserting 
"(A)", "(B)", and "(C)", respectively; 
(C) by inserting "(a)" after "SEC. 4b."; 
(D) by inserting "(b)" before "Nothing in this section 
or"; and 
(E) by inserting "(c)" before "Nothing in this section 
shall"; 
7 use 6c. 
(4) in section 4c(d)(2)— 
(A) in subparagraph (A)(iv) by striking "(15 U.S.C. 
78c(aX12))" and inserting "(15 U.S.C. 78c(a)(12))"; and 
(B) in the matter following subparagraph (C) by strik-
ing "section (2)(a)" and inserting "section 2(a)"; 
(5) in section 4g (7 U.S.C. 6g)— 
(A) by redesignating subsections (1) through (6) as 
subsections (a) through (0, respectively; and 
(B) in subsection (c), as so redesignated, by striking 
"subsection (2)" and inserting "subsection (b)"; 
7 use 9. 
(6) in section 6(c), as so redesignated by section 209(a)(1), 
by striking "offending person." and inserting "offending person"; 
7 use 15,12. 
(7) in section 6(c), as so redesignated by section 209(a)(1), 
and in section 8(0 by striking "subpena" and "subpenas" each 
place they appear and inserting "subpoena" and "subpoenas", 
respectively; 
PUBLIC LAW 102-546—OCT. 28, 1992 
106 STAT. 3625 
(8) in section 6a, as amended by section 209(b)(4), by 
? use lOa. 
redesignating subsections (1) and (2) as subsections (a) and 
(b), respectively; 
(9) by striking "the Secretary of Agriculture or"— 
(A) in the first sentence of section 6(b), as so redesig- 
7 use 8. 
nated by section 209(a)(1); 
(B) in the first sentence of section 6(c), as so redesig- 
'^ use 9. 
nated by section 207(aXl); and 
(C) in section 13(c); 
7 use I3c. 
(10) in section 8a— 
7 use I2a. 
(A) in paragraph (5) by striking "and" at the end; 
and 
(B) in paragraph (7) by striking "matters as:" and 
inserting "matters as—"; 
(11) in section 14(g) by striking "fifteen months" the second 
7 use 18. 
place it appears and inserting "15-month"; 
(12) in section 17— 
7 use 21. 
(A) in subsection (a) by indenting the left margin of 
paragraphs (1) and (2) by 2 ems; and 
(B) in subsection (1)(2)(B)— 
(i) by striking "the Commodity Exchange" and 
inserting "this"; and 
(ii) by striking the period at the end and inserting 
"; and"; 
(13) by striking section 21; 
7 use 4a note. 
(14) in section 22(a)^ 
7 use 25. 
(A) in paragraph (1)— 
(i) in the matter preceding subparagraph (A) by 
striking "clauses (A) through (D)" and inserting "sub-
paragraphs (A) through (D)"; and 
(ii) in subparagraph (D) by striking "clause (B)" 
and inserting "subparagraph (B)"; and 
(B) in paragraph (2) by striking "17b(10)" and inserting 
"17(bX10)"; and 
(15) by striking section 23. 
7 use 26. 
SEC. 403. EFFECTIVE DATE. 
7 USC la note. 
Except as otherwise specifically provided in this Act, this Act 
and the amendments made by this Act shall become effective on 
the date of enactment of this Act. 
SEC. 404. DEFINITIONS. 
(a) IN GENERAL.—^The Act is amended by inserting after the 
first section (7 U.S.C. 1) the following new section: 
"SEC. la. DEFINITIONS. 
7 USe la. 
"As used in this Act: 
"(1) BOARD OF TRADE.—The term 'board of trade' means 
any exchange or association, whether incorporated or unincor-
porated, of persons who are engaged in the business of buying 
or selling any commodity or receiving the same for sale on 
consignment. 
"(2) COMMISSION.—The term 'Commission' means 
the 
Commodity Futures Trading Commission established under sec-
tion 2(aX2). 
"(3) COMMODITY.—^The term 'commodity* means wheat, cot-
ton, rice, com, oats, barley, rye, flaxseed, grain sorghums, mill 
feeds, butter, eggs, Solanum tuberosum (Irish potatoes), wool. 
106 STAT. 3626 
PUBLIC LAW 102-546—OCT. 28, 1992 
wool tops, fats and oils (including lard, tallow, cottonseed oil, 
peanut oil, soybean oil, and all other fats and oils), cottonseed 
meal, cottonseed, peanuts, soybeans, soybean meal, livestock, 
livestock products, and frozen concentrated orange juice, and 
all other goods and articles, except onions as provided in Public 
Law 85-839 (7 U.S.C. 13-1), and all services, rights, and 
interests in which contracts for future delivery are presently 
or in the future dealt in. 
"(4) COMMODITY POOL OPERATOR.—The term 'commodity 
pool operator* means any person engaged in a business that 
is of the nature of an investment trust, syndicate, or similar 
form of enterprise, and who, in connection therewith, solicits, 
accepts, or receives from others, funds, securities, or property, 
either directly or through capital contributions, the sale of 
stock or other forms of securities, or otherwise, for the purpose 
of trading in any commodity for future delivery on or subject 
to the rules of any contract market, except that the term 
does not include such persons not within the intent of the 
definition of the term as the Commission may specify by rule, 
regulation, or order. 
"(5) COMMODITY TRADING ADVISOR.— 
"(A) IN GENERAL.—Except as otherwise provided in 
this paragraph, the term 'commodity trading advisor* 
means any person who— 
"(i) for compensation or profit, engages in the busi-
ness of advising others, either directly or through 
publications, writings, or electronic media, as to the 
value of or the advisability of trading in— 
"(I) 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; 
"(II) any commodity option authorized imder 
section 4c; or 
"(III) any leverage transaction 
authorized 
under section 19; or 
"(ii) for compensation or profit, and as part of 
a regular business, issues or promulgates analyses or 
reports concerning any of the activities referred to 
in clause (i). 
'*(B) EXCLUSIONS.—Subject to subparagraph (C), the 
term 'commodity trading advisor* does not include— 
"(i) any bank or trust company or any person act-
ing as an employee thereof; 
"(ii) any news reporter, news colunmist, or news 
editor of the print or electronic media, or any lawyer, 
accountant, or teacher; 
"(iii) any floor broker or futures commission mer-
chant; 
"(iv) the publisher or producer of any print or 
electronic data of general and regular dissemination, 
including its employees; 
"(v) the fiduciary of any defined benefit plan that 
is subject to the Employee Retirement Income Security 
Act of 1974 (29 U.S.C. 1001 et seq.); 
"(vi) any contract market; and 
PUBLIC LAW 102-546—OCT. 28, 1992 
106 STAT. 3627 
"(vii) such other persons not within the intent 
of this paragraph as the Commission may specify by 
rule, regulation, or order. 
"(C) INCIDENTAL SERVICES.—Subparagraph (B) shall 
apply only if the furnishing of such services by persons 
referred to in subparagraph (B) is solely incidental to the 
conduct of their business or profession. 
"(D) ADVISORS.—^The Commission, by rule or regula-
tion, may include within the term 'commodity trading 
advisor', any person advising as to the value of commodities 
or issuing reports or analyses concerning commodities if 
the Commission determines that the rule or regulation 
will effectuate the purposes of this paragraph. 
"(6) CONTRACT OF SALE.—The term 'contract of sale' 
includes sales, agreements of sale, and agreements to sell. 
"(7) COOPERATIVE ASSOCIATION OF PRODUCERS.—The term 
'cooperative association of producers' means any cooperative 
association, corporate, or otherwise, not less than 75 percent 
in good faith owned or controlled, directly or indirectly, by 
producers of agricultural products and otherwise complying 
with the Act of February 18, 1922 (42 Stat. 388, chapter 57; 
7 U.S.C. 291 and 292), including any organization acting for 
a group of such associations and owned or controlled by such 
associations, except that business done for or with the United 
States, or any agency thereof, shall not be considered either 
member or nonmember business in determining the compliance 
of any such association with this Act. 
"(8) FLOOR BROKER.—The term 'floor broker' means any 
person who, in or surrounding any pit, ring, post, or other 
place provided by a contract market for the meeting of persons 
similarly engaged, shall purchase or sell for any other person 
any commodity for future delivery on or subject to the rules 
of any contract market. 
"(9) FLOOR TRADER.—The term 'floor trader' means any 
person who, in or surrounding any pit, ring, post, or other 
place provided by a contract market for the meeting of persons 
similarly engaged, purchases, or sells solely for such person's 
own accoimt, any commodity for future delivery on or subject 
to the rules of any contract market. 
"(10) FOREIGN FUTURES AUTHORITY.—The term 'foreign 
futures authority* means any foreign government, or any 
department, agency, governmental body, or regulatory organiza-
tion empowered by a foreign government to administer or 
enforce a law, rule, or regulation as it relates to a futures 
or options matter, or any department or agency of a political 
subdivision of a foreign government empowered to administer 
or enforce a law, rule, or regulation as it relates to a futures 
or options matter. 
"(11) FUTURE DELIVERY.—The term 'future delivery* does 
not include any sale of any cash commodity for deferred ship-
ment or delivery. 
"(12) FUTURES COMMISSION MERCHANT.—The term 'futures 
commission merchant' means an individual, association, part-
nership, corporation, or trust that— 
"(A) is engaged in soliciting or in accepting orders 
for the purchase or sale of any commodity for future deliv-
106 STAT. 3628 
PUBLIC LAW 102-546—OCT. 28, 1992 
ery on or subject to the rules of any contract market; 
and 
"(B) in or in connection with such solicitation or accept-
ance of orders, accepts any money, securities, or property 
(or extends credit in lieu thereof) to margin, guarantee, 
or secure any trades or contracts that result or may result 
therefix)m. 
"(13) INTERSTATE COMMERCE.—The term 'interstate com-
merce' means conmaerce— 
"(A) between any State, territory, or possession, or 
the District of Columbia, and any place outside thereof; 
or 
"(B) between points within the same state, territory, 
or possession, or the District of Columbia, but through 
any place outside thereof, or within any territory or posses-
sion, or the District of Colximbia. 
"(14) INTRODUCING BROKER.—The term 'introducing broker* 
means 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 
piirchase 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. 
"(15) MEMBER OF A CONTRACT MARKET.—The term 'member 
of a contract market' means an individual, association, partner-
ship, corporation, or trust owning or holding membership in, 
or admitted to membership representation on, a contract mar-
ket or given members' trading privileges thereon. 
"(16) PERSON.—^The term 'person' imports the plural or 
singular, and includes individuals, associations, partnerships, 
corporations, and trusts.". 
(b) CONFORMING AMENDMENTS.—Section 2(aXlXA) (7 U.S.C. 
2 and 4) is amended— 
(1) by striking "For the purposes" and all that follows 
through "; Provided, That the Commission" and inserting "(i) 
The Commission"; 
(2) by striking ": And provided further, That, except" and 
inserting a period and "Except"; 
(3) by redesignating clauses (i) and (ii) of the third sentence 
(as in effect before the amendments made by this subsection) 
as subclauses (I) and (II), respectively; 
(4) by designating the fifth sentence (as in effect before 
the amendments made by this subsection) as clause (ii); 
(5) by striking the sixth and seventh sentences (as in 
effect before the amendments made by this subsection); 
(6) by designating the eighth sentence (as in effect before 
the amendments made b^ this subsection) as clause (iii); and 
(7) by striking the ninth sentence (as in effect before the 
amendments made by this subsection) through the end of the 
subparagraph. 
TITLE V—INTERMARKET COORDINATION 
SEC. 501. MARGIN ON STOCK INDEX FUTURES. 
Section 2(aXlXB) (7 U.S.C. 2a) is amended by adding at the 
end the following new clause: 
PUBLIC LAW 102-546—OCT. 28, 1992 
106 STAT. 3629 
"(viXD Notwithstanding any other provision of this Act, 
any contract market in a stock index futures contract (or option 
thereon) shall file with the Board of Governors of the Federal 
Reserve System any rule establishing or chsuiging the levels 
of margin (initial and m£untenance) for the stock index futures 
contract (or option thereon). 
"(II) The Board may at any time request any contract 
market to set the margin for any stock index futures contract 
(or option thereon) at such levels as the Board in its judgment 
determines are appropriate to preserve the financial integrity 
of the contract market or its clearing system or to prevent 
systemic risk. If the contract market fails to do so within 
the time specified by the Board in its request, the Board may 
direct the contract market to alter or supplement the rules 
of the contract market as specified in the request. 
"(Ill) Subject to such conditions as the Board may deter-
mine, the Board may delegate any or all of its authority under 
this clause only to the Commission. 
"(IV) Nothing in this clause shall supersede or limit the 
authority granted to the Commission in section 8a(9) to direct 
a contract market, on finding an emergency to exist, to raise 
temporary emergency margin levels on £uiy fiitures contract 
or option on the contract covered by this clause. 
"(V) Any action taken by the Board, or by the Commission 
acting under the delegation of authority under subclause III, 
imder this clause directing a contract market to alter or supple-
ment a contract market rule shall be subject to review only 
in the Court of Appeals where 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. The 
review shall be based on the examination of all information 
before the Board or the Commission, as the case may be, 
at the time the determination was made. The court reviewing 
the action of the Boa]rd or the Commission shall not enter 
a stay or order of mandamus unless the court has determined, 
after notice and a 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.". 
SEC. 502. EXEMPTIVE AUTHORITY. 
(a) IN GENERAL.—Section 4 (7 U.S.C. 6) is amended— 
(1) in subsection (a), by striking "It shall be unlawful" 
and inserting "Unless exempted by the Commission pursuant 
to subsection (c), it shall be unlawful"; and 
(2) by adding at the end the following new subsections: 
"(cXl) In order to promote responsible economic or financial 
innovation and fair competition, the Conmiission by rule, regulation, 
or order, after notice and opportunity for hearing, may (on its 
own initiative or on applic£ition of anv person, includ^g any board 
of trade designated as a contract market for transactions for future 
delivery in any commodity under section 5 of this Act) exempt 
any agreement, contract, or transaction (or class thereof) that is 
otherwise su^ect to subsection (a) (including any person or class 
of persons offering, entering into, rendering advice or rendering 
other services with respect to, the agreement, contract, or trans-
action), either unconditionally or on stated terms or conditions 
or for stated periods and either retroactively or prospectively, or 
106 STAT. 3630 
PUBLIC LAW 102-546—OCT. 28, 1992 
both, from any of the requirements of subsection (a), or from any 
other provision of this Act (except section 2(aXl)(B)), if the Commis-
sion determines that the exemption would be consistent with the 
public interest." 
"(2) The Commission shall not grant any exemption under 
paragraph (1) from any of the requirements of subsection (a) unless 
the Commission determines that— 
"(A) the requirement should not be applied to the agree-
ment, contract, or transaction for which the exemption is sought 
and that the exemption would be consistent with the public 
interest and the purposes of this Act; and 
"(B) the agreement, contract, or transaction— 
"(i) will be entered into solely between appropriate 
persons; and 
"(ii) will not have a material adverse effect on the 
ability of the Commission or any contract market to dis-
charge its regulatory or self-regulatory duties under this 
Act. 
"(3) For purposes of this subsection, the term 'appropriate per-
son' shall be limited to the following persons or classes thereof: 
"(A) A bank or trust company (acting in an individual 
or fiduciary capacity). 
"(B) A savings association. 
"(C) An insurance company. 
"(D) An investment company subject to regulation imder 
the Investment Company Act of 1940 (15 U.S.C. 80a-l et 
seq.). 
"(E) A commodity pool formed or operated by a person 
subject to regulation under this Act. 
"(F) A corporation, partnership, proprietorship, organiza-
tion, trust, or other business entity with a net worth exceeding 
$1,000,000 or total assets exceeding $5,000,000, or the obliga-
tions of which under the agreement, contract or transaction 
are guaranteed or otherwise supported by a letter of credit 
or keepwell, support, or other agreement by any such entity 
or by an entity referred to in subparagraph (A), (B), (C), (H), 
(I), or (K) of this paragraph. 
"(G) An employee benefit plan with assets exceeding 
$1,000,000, or whose investment decisions are made by a bank, 
trust company, insurance company, investment adviser reg-
istered under the Investment Advisers Act of 1940 (15 U.S.C. 
80a-l et seq.), or a commodity trading advisor subject to regula-
tion under this Act. 
"(H) Any governmental entity (including the United States, 
any state, or any foreign government) or political subdivision 
thereof, or any multinational or supranational entity or any 
instrumentality, agency, or department of any of the foregoing. 
"(I) A broker-dealer subject to regulation under the Securi-
ties Exchange Act of 1934 (15 U.S.C. 78a et seq.) acting on 
its own behalf or on behalf of another appropriate person. 
"(J) A futures commission merchant, floor broker, or floor 
trader subject to regulation under this Act acting on its own 
behalf or on behalf of another appropriate person. 
"(K) Such other persons that the Commission determines 
to be appropriate in light of their financial or other qualifica-
tions, or the applicability of appropriate regulatory protections. 
PUBLIC LAW 102-546—OCT. 28, 1992 
106 STAT. 3631 
"(4) During the pendency of an application for an order granting 
an exemption under paragraph (1), the Commission may limit the 
public availability of any information received from the applicant 
if the appUcant submits a wiitten request to limit disclosure contem-
poraneous with the application, and the Commission determines 
that^ 
"(A) the information sought to be restricted constitutes 
a trade secret; or 
"(B) public disclosure of the information would result in 
material competitive hai-m to the applicant. 
"(5) The Commission may— 
"(A) promptly foUomng the enactment of this subsection, 
or upon application by any person, exercise the exemptive 
authority Ranted under paragraph (1) with respect to classes 
of hybrid instruments that are predominantly securities or 
depository instnmients, to the extent that such instruments 
may be regarded as subject to the provisions of this Act; or 
"(B) promptly following the enactment of this subsection, 
or upon application by any person, exercise the exemptive 
authority granted under paragraph (1) effective as of October 
23, 1974, with respect to classes of swap agreements (as defined 
in section 101 of title 11, United States Code) that are not 
part of a fungible class of agreements that are standardized 
as to their material economic terms, to the extent that such 
agreements may be regarded as subject to the provisions of 
this Act. 
Any exemption pursuant to this paragraph shall be subject to 
such terms and conditions as the Commission shall determine to 
be appropriate pursuant to paragraph (1). 
(d) The granting of an exemption under this section shall 
not affect the authority of the Commission imder any other provision 
of this Act to conduct investigations in order to determine compli-
ance with the requirements or conditions of such exemption or 
to take enforcement action for any violation of any provision of 
this Act or any rule, regulation or order thereunder caused by 
the failure to comply wiUi or satisfy such conditions or require-
ments.**. 
(b) COMPETITIVE FAIRNESS.—Section 15 (7 U.S.C. 19) is amend-
ed by striking "regulation," and inserting "regulation (including 
any exemption under section 4(c) or 4c(b)),''. 
(c) (JONFORMING AMENDMENT.—Section 12(eX2XA) (7 U.S.C. 
16(eX2XA)) is amended by inserting after "market,** the following: 
"or, in the case of any State or local law that prohibits or regulates 
106 STAT. 3632 
PUBLIC LAW 102-546—OCT. 28, 1992 
gaming or the operation of TDucket shops' (other than antifraud 
provisions of general appUcability), that is not a transaction or 
class of transactions that has received or is covered by the terms 
of any exemption previously granted by the Commission imder 
subsection (c) of section 4 of this Act,". 
Approved October 28, 1992. 
LEGISLATIVE HISTORY—H.R. 707 (S. 207): 
HOUSE REPORTS: Nos. 102-6 (Comm. on Agriculture) and 102-978 (Comm. of 
Conference). 
SENATE REPORTS: No. 102-22 accompanying S. 207 (Comm. on Agriculture, 
Nutrition and Forestry). 
CONGRESSIONAL RECORD: 
Vol. 137 (1991): Mar. 5, considered and passed House. 
Apr. 16-18, S. 207 considered in Senate; H.R. 707, amended, 
passed in lieu. 
Vol. 138 (1992): Oct. 2, House agreed to conference report. 
Oct. 8, Senate agreed to conference report. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 28 (1992): 
Oct. 28, Presidential statement.