Futures Trading Act
PL 95-405 (S.2391), enacted 09/30/1978

PUBLIC LAW 95-405—SEPT. 30, 1978 
92 STAT. 865 
Public Law 95-405 
95th Congress 
An Act 
To extend the Commodity Exchange Act, and for other purposes. 
Sept. 30, 1978 
[S, 2391] 
Be it enacted hy the Senate and House of Representatives of the 
United States of America in Congress assembled^ That this Act may Futures Trading 
be cited as the "Futures Trading Act of 1978". 
Act of 1978. 
^ 
7 u s e 1 note. 
COMPOSITION AND FUNCTIONS OF COMMISSION,' CONFLICT OF INTEREST; 
LIAISON 
W I T H 
OTHER 
AGENCIES; 
CONFORMING 
AND 
TECHNICAL 
AMENDMENTS 
SEC. 2. Section 2(a) of the Commodity Exchange Act is amended 7 USC 2, 4, 4a. 
b y -
(1) striking out in the third sentence of paragraph (1) (7 
U.S.C. 2) "section 217 of the Commodity Futures Trading Com-
mission Act of 1974" and inserting in lieu thereof "section 19 
of this Act"; 
(2) inserting "(A)" immediately after the designation of 
paragraph (2) (7 U.S.C. 4a(a)) ; 
(3) striking out in the second sentence of paragraph (2) "a 
Chairman and four other Commissioners" and inserting in lieu 
thereof "five Commissioners"; 
(4) striking out in the last sentence of paragraph (2) " ( A ) " 
and " ( B ) " and inserting in lieu thereof "(i)" and "(ii)", 
respectively; 
(5) adding at the end of paragraph (2) a new subparagraph 
(B) as follows: 
"(B) The President shall appoint, by and with the advice and con-
sent of the Senate, a member of the Commission as Chairman, who 
shall serve as Chairman at the pleasure of the President. An individ-
ual may be appointed as Chairman at the same time that person is 
appointed as a Commissioner. The Chairman shall be the chief admin-
istrative oiRcer of the Commission and shall preside at hearings before 
the Commission. At any time, the President may appoint, by and 
with the advice and consent of the Senate, a different Chairman, and 
the Commissioner previously appointed as Chairman may complete 
that Commissioner's term as a Commissioner."; 
(6) striking out in paragraph (5) (7 U.S.C. 4a(d)) ", by and 
with the advice and consent of the Senate,"; 
(7) inserting in paragraph (6) (A) (7 U.S.C. 4a(e) (1)) after 
"use and expenditures of funds," the following: "according to 
budget categories, plans, programs, and priorities established and 
approved by the Commission,"; 
(8) striking out in paragraph (6) (B) (7 U.S.C. 4a(e) (2)) "of 
the Commission" and inserting in lieu thereof ", plans, priorities, 
and budgets approved by the Commission"; 
(9) inserting " (A)" immediately after the designation of para-
graph (7) (7U.S.C.4a(f)); 
(10) adding at the end of paragraph (7) a new subparagraph 
(B) as follows: 
92 STAT. 866 
PUBLIC LAW 95-405—SEPT. 30, 1978 
"(B) No Commissioner or employee of the Commission classi-
5 use 5332 
fied as a GS-16 or higher in a position excepted from the competi-
°^*®- 
tive service by reason of being of a confidential or policymaking 
character shall, for a period of one year beginning on the last day 
of service as such Commissioner or employee— 
" (i) make any appearance before the Commission, or 
" (ii) make any written or oral communication to the Com-
mission, or any Commissioner or employee of the Commis-
sion, on behalf of any person (other than the United States) 
• 
on any particular matter that is before the Commission, 
if such last day of service is more than four months after the date 
of enactment of this subparagraph. The restrictions in this sub-
paragraph shall not apply to an appearance or response under a 
subpena issued by the Commission, or any matter of an exclusively 
personal and individual nature."; 
(11) inserting "(A)" immediately after the designation of 
paragraph (8) (7U.S.C.4a(g)); 
(12) striking out in the first sentence of paragraph (8) "estab-
lish a separate office within the Department of Agriculture to be 
staffed with employees of the Commission for the purpose of 
maintaining" and inserting in lieu thereof "maintain"; 
(13) adding at the end of paragraph (8) a new subparagraph 
(B) as follows: 
"(B) (i) The Commission shall maintain communications with 
the Department of the Treasury, the Board of Governors of the 
Federal Reserve System, and the Securities and Exchange Com-
mission for the purpose of keeping such agencies inWj informed 
of Commission activities that relate to the responsibilities of those 
agencies, for the purpose of seeking the views of those agencies 
on such activities, and for considering the relationships between 
the volume and nature of investment and trading in contracts of 
sale of a commodity for future delivery and in securities and finan-
cial instruments under the jurisdiction of such agencies, 
"(ii) When a board of trade applies for designation as a con-
tract market involving transactions for future delivery of any 
security issued or guaranteed by the United States or any agency 
thereof, the Commission shall promptly deliver a copy of such 
application to the Department of the Treasury and the Board of 
Governors of the Federal Reserve System. The Commission may 
not designate a board of trade as a contract market based on such 
application until forty-five days after the date the Commission 
delivers the application to such agencies or until the Commission 
receives comments from each of such agencies on the application, 
whichever period is shorter. Any comments received by the Com-
mission from such agencies shall be included as part of the public 
record of the Commission's designation proceeding. In desig-
nating, or refusing, suspending, or revoking the designation of, a 
board of trade as a contract market involving transactions for 
future delivery referred to in this clause or in considering possible 
7 use 12a. 
emergency action under section 8a(9) of this Act with respect 
to such transactions, the Commission shall take into consideration 
all comments it receives from the Department of the Treasury and 
the Board of Governors of the Federal Reserve System and shall 
consider the effect that any such designation, suspension, revoca-
tion, or emergency action may have on the debt financing require-
ments of the United States Government and the continued 
efficiency and integrity of the underlying market for government 
securities. 
PUBLIC LAW 95-405—SEPT. 30, 1978 
92 STAT. 867 
"(iii) The provisions of this subparagraph shall not create any 
rights, liabilities, or obligations upon which actions may be 
brought against the Commission."; 
(14) striking out in paragraph (9) (A) (7 U.S.C. 4a(h)(l)) 
"Senate Committee on Agriculture and Forestry" and inserting 
in lieu thereof "Senate Committee on Agriculture, Nutrition, and 
Forestry"; and 
(15) striking out in paragraph (9)(B) (7 U.S.C. 4a(h)(2)) 
"Senate Committee on Agriculture and Forestry" and inserting 
in lieu thereof "Senate Committee on Agriculture, Nutrition, and 
Forestry". 
Report to 
congressional 
committees. 
Regulations. 
Ante, p. 865. 
7 u s e 1 notts. 
OPTIONS TRANSACTIONS; TECHNICAL AMENDMENTS 
SEC. 3. Section 4c of the Commodity Exchange Act (7 U.S.C. 6c) 
is amended by— 
(1) striking out in the last sentence of subsection (a) "not 
have been disapproved" and inserting in li6u thereof "have been 
approved"; 
(2) striking out in subsection (b) "Senate Committee on 
Agriculture and Forestry" and inserting in lieu thereof "Senate 
Committee on Agriculture, Nutrition, and Forestry"; and 
(3) adding at the end thereof new subsections (c), (d), and 
(e) as follows: 
"(c) Notwithstanding the provisions of subsection (b) of this 
section, no person may, after the enactment of the Futures Trading 
Act of 1978, offer to enter into, enter into, or confirm the execution 
of any commodity option transaction involving any commodity 
regulated under this Act but not specifically set forth in section 2(a) 
of this Act prior to the enactment of the Commodity Futures Trad-
ing Commission Act of 1974, until (1) the Commission transmits to 
the House Committee on Agriculture and the Senate Committee on 
Agriculture, Nutrition, and Forestry documentation of its ability 
to regulate successfully such transactions, including a copy of the 
Commission's proposed rules and regulations, and (2) the expiration 
of thirty calendar days of continuous session of Congress after the 
date of such transmittal. The Commission is not precluded from 
transmitting, at any time, documentation relating to its ability to 
regulate such transactions regarding individual commodities, classes 
of commodities, or regulation of such transactions on specific boards 
of trade. Nothing in this subsection shall affect any rights or obliga-
tions arising out of any transactions subject to the provisions of this 
subsection entered into, or the execution of which was confirmed, 
prior to October 1, 1978: Provided, That this prohibition shall not 
apply to any transaction expressly permitted under rules or regula-
tions prescribed by the Commission, before or after the date of 
enactment of the Futures Trading Act of 1978, to be offered to be Ante, p. 865 
entered into, entered into, or confirmed, in which the purchaser is a 
producer, processor, commercial user of, or a merchant handling, 
the commodity involved in the transaction, or the products or 
byproducts thereof. 
"(d) Notwithstanding the provisions of subsection (c) of this sec-
tion— 
"(1) any person domiciled in the United States who on May 1, Regulations. 
1978, was in the business of granting an option on a physical com-
modity and was in the business of buying, selling, producing, or 
otherwise using that commodity, may continue to grant or issue 
options on that commodity in accordance with Commission regu-
92 STAT. 868 
PUBLIC LAW 95-405—SEPT. 30, 1978 
lations in effect on August 17, 1978, until thirty days after the 
effective date of regulations issued by the Commission under clause 
(2) of this subsection: Provided^ 
That if such person files an 
\ 
application for registration under the regulations issued under 
clause (2) of this subsection within thirty days after the effective 
date of such regulations, that person may continue to grant or 
issue options pending a final determination by the Commission 
on the application; and 
Regulations. 
'V 
"(2) the Commission shall issue regulations that 
permit 
grantors and futures commission merchants to offer to enter into, 
enter into, or confirm the execution of, any commodity option 
transaction on a physical commodity subject to the provisions of 
subsection (b) of this section if— 
"(A) the grantor is a person domiciled in the United 
States who— 
" (i) is in the business of buying, selling, producing, or 
otherwise using the underlying commodity; 
" (ii) at all times has a net worth of at least $5,000,000 
certified annually by an independent public accountant 
using generally accepted accounting principles; 
"(lii) notifies the Commission and every futures com-
mission merchant offering the grantor's option if the 
grantor knows or has reason to believe that the grantor's 
net worth has fallen below $5,000,000; 
"(iv) segregates daily, exclusively for the benefit of 
purchasers, money, exempted securities 
(within 
the 
meaning of section 8(a) (12) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78c(a) (12)), commercial paper, 
bankers' acceptances, commercial bills, or unencumbered 
warehouse receipts, equal to an amount by which the 
value of each transaction exceeds the amount received or 
to be received by the grantor for such transaction; 
"(v) provides an identification number for each trans-
action ; and 
"(vi) provides confirmation of all orders for such 
transactions executed, including the execution price and 
' 
• 
a transaction identification number; 
"(B) the futures commission merchant is a person who— 
"(i) has evidence that the grantor meets the require-
ments specified in subclause (A) of this clause; 
"(ii) treats and deals with all money, securities, or 
property received from its customers as payment of the 
purchase price in connection with such transactions, as 
belonging to such customers until the expiration of the 
term of the option, or, if the customer exercises the 
option, until all rights of the customer under the com-
modity option transaction have been fulfilled; 
"(iii) records each transaction in its customer's name 
by the transaction identification number provided by the 
grantor; 
"(iv) provides a disclosure statement to its customers, 
under regulations of the Commission, that discloses, 
among other things, all costs, including any markups or 
": 
commissions involved in such transaction; and 
1 
"(C) the grantor and futures commission merchant comply 
with any additional uniform and reasonable terms and con-
ditions the Commission may prescribe, including registration 
with the Commission. 
PUBLIC LAW 95-405—SEPT. 30, 1978 
92 STAT. 869 
The Commission may permit persons not domiciled in the United Regulations. 
States to grant options under this subsection under such additional 
rules, regulations, and orders as the Commission may adopt to provide 
protection to purchasers that are substantially the equivalent of those 
applicable to grantors domiciled in the United States. The Commis- Hearing, 
sion may terminate the right of any person to grant, offer, or sell 
options under this subsection only after a hearing, including a finding 
that the continuation of such right is contrary to the public interest: 
Provided, That pending the completion of such termination proceed-
ings, the Conunission may suspend the right to grant, offer, or sell 
options of any person whose activities in the Commission's judgment 
present a substantial risk to the public interest. 
" (e) The Commission may adopt rules and regulations, after public Regulations, 
notice and opportunity foi' a hearing on the record, prohibiting the 
granting, issuance, or sale of options permitted under subsection (d) 
of this section if the Commission determines that such options are 
contrary to the public interest.". 
• 
CUSTOMER FUNDS AND PROPERTY 
SEC. 4. Section 4d of the Commodity Exchange Act (7 U.S.C. 6d) 
is amended by inserting in paragraph (2) after ^''Provided further,^'' 
the following: "That in accordance with such terms and conditions as 
the Commission may prescribe by rule, regulation, or order, such 
money, securities, and property of the customers of such futures com-
mission merchant may be commingled and deposited as provided in 
this section with any other money, securities, and property received 
by such futures commission merchant and required by the Commission 
to be separately accounted for and treated and dealt with as belonging 
to the customers of such futures commission merchant: Provided 
further,^\ 
R E G I S T R A T I O N O F F U T U R E S C03IMISSI0N MERCHANTS AND FLOOR BROKERS 
SEC. 5. Section 4(f) (1) of the Commodity Exchange Act (7 U.S.C. 
6f (1)) is amended by striking out in the third sentence "All registra-
tions shall expire on the 31st day of December of the year for which 
issued" and inserting in lieu thereof the following: "Each registration 
shall expire on December 81 of the year for which issued or at such 
other time, not less than one year from the date of issuance, as the 
Commission may by rule, regulation, or order prescribe". 
T E C H N I C A L 
AMENDMENT 
SEC 6. Section 4g(3) of the Commodity Exchange Act (7 U.S.C. 
6g(3)) is amended by striking out "Brokers" and inserting in lieu 
thereof "Floor brokers". 
R E G I S T R A T I O N O F ASSOCIATED PERSONS; AUTHORIZATION FOR REGISTRATION 
OF ASSOCIATED PERSONS BY A REGISTERED FUTURES ASSOCIATION 
SEC 7. Section 4k of the Commodity Exchange Act (7 U.S.C. 6k) 
is amended by— 
(1) amending the last sentence of subsection (2) to read as 
follows: "Such registration shall expire two years after the effec-
tive date thereof or at such other time, not less than one year from 
the date of issuance thereof, as the Commission may by rule, 
regulation, or order prescribe and shall be renewed upon appli-
cation therefor, unless the registration has been suspended (and the 
92 STAT. 870 
PUBLIC LAW 95-405—SEPT. 30, 1978 
period of such suspension has not expired) or revoked after notice 
7 use 9. 
and hearing as prescribed in section 6(b) of this Act: Provided^ 
That upon initial registration, unless the Commission otherwise 
prescribes by rule, regulation, or order, the effective period of 
such registration shall be not more than two years nor less than 
one year from the effective date thereof."; and 
(2) adding at the end thereof a new subsection (3) as follows: 
"(3) The Commission may authorize a registered futures associa-
tion to perform any portion of the registration functions under this 
section, in accordance with rules approved by the Commission, and 
subject to the provisions of this Act applicable to registrations granted 
by the Commission.". 
REGISTRATION OF COMMODITY TRADING ADVISORS 
SEC. 8. Section 4m of the Commodity Exchange Act (7 U.S.C. 6m) 
is amended by adding at the end thereof a new sentence as follows: 
"The provisions of this section shall not apply to any commodity trad-
ing advisor who is a (1) dealer, processor, broker, or seller in cash 
market transactions of any commodity specifically set forth in section 
Ante, p. 865. 
2(a) of this Act prior to the enactment of the Commodity Futures 
7 use 1 note. 
Trading Commission Act of 1974 (or products thereof) or (2) non-
profit, voluntary membership, general farm organization, who provides 
advice on the sale or purchase of any commodity specifically set forth 
in section 2(a) of this Act prior to the enactment of the Commodity 
Futures Trading Commission Act of 1974; if the advice by the person 
described in clause (1) or (2) of this sentence as a commodity trading 
advisor is solely incidental to the conduct of that person's business: 
Provided^ That such person shall be subject to proceedings under 
7 use 18. 
section 14 of this Act.". 
REGISTRATION OF COMMODITY TRAINING ADVISORS AND COMMODITY POOL 
OPERATORS 
SEC. 9. Section 4n of the Commodity Exchange Act (7 U.S.C. 6n) 
is amended by— 
(1) striking out subsection (2) and redesignating subsections 
(3), (4), (5), (6), and (7) as subsections (2), (3), (4), (5), and 
(6), respectively; 
(2) striking out in subsection (2), as redesignated by clause (1) 
of this section, "All registrations" and inserting in lieu thereof 
"Each registration"; and 
(3) inserting in subsection (2), as redesignated by clause (1) 
of this section, after "year," the following: "or at such other time, 
not less than one year from the effective date thereof, as the 
Commission may by rule, regulation, or order prescribe,". 
PROHIBITION ON FRAUDULENT TRANSACTIONS BY COMMODITY TRADING 
ADVISORS AND COMMODITY POOL OPERATORS 
SEC, 10. Section 4o(l) of the Commodity Exchange Act (7 U.S.C. 
7 use do. 
6o(l)) is amended by striking out "registered under this Act". 
ARBITRATION BY REGISTERED FUTURES ASSOCIATION 
SEC. 11. Section 5a(11) of the Commodity Exchange Act (7 U.S.C. 
7a(11)) is amended by inserting after "otherwise" the following: 
"(such as by delegation to a registered futures association having 
rules providing for such procedures) ". 
PUBLIC LAW 95-405—SEPT. 30, 1978 
92 STAT. 871 
PROCESS FOR APPROVAL OF BYLAWS, RULES, REGULATIONS, AND RESOLUTIONS 
OF CONTRACT MARKETS 
SEC. 12. Section 5a (12) of the Commodity Exchange Act (7 U.S.C. 
7a (12)) is amended by— 
(1) inserting in the second sentence after "receipt" the follow-
ing: "(or within sixty days of their receipt if the Commission 
determines them to be of major economic significance)"; and 
(2) inserting after tlie first sentence three new sentences as 
follows: "At least thirty days before approving any such bylaws, 
rules, regulations, and resolutions of major economic significance, 
as determined by the Commission, the Commission shall publish 
in the Federal Register such bylaws, rules, regulations, and res-
olutions. The Commission shall give interested persons an oppor-
tunity to participate in the approval process through the 
submission of written data, views, or arguments. The determina-
tion by the Commission whether any such bylaws, rules, 
regulations, or resolutions are of major economic significance shall 
be final and not subject to judicial review.". 
HEARING ON THE RECORD FOR REFUSAL, SUSPENSION, OR REVOCATION OF 
CONTRACT MARKET DESIGNATION; COMMISSION SUBPENA POWER 
SEC. 13. Section 6 of the Commodity Exchange Act is amended by— 
(1) inserting in the second sentence "on the record" after "a 
hearing" (7 U.S.C. 8); 
(2) inserting in the second sentence of paragraph (a) "on the 
record" after "hearing" (7 U.S.C. 8); and 
(3) striking out the third sentence of paragraph (b) (7 U.S.C. 
15) and inserting in lieu thereof the following: "For the purpose 
of securing effective enforcement of the provisions of this Act 
and for the purpose of any investigation or proceeding under this 
Act, any member of the Commission or any Administrative Law 
Judge or other officer designated by the Commission may admin-
ister oaths and affirmations, subpena witnesses, compel their 
attendance, take evidence, and require the production of any books, 
papers, correspondence, memoranda, or other records that the 
Commission deems relevant or material to the inquiry. The attend-
ance of witnesses and the production of any such records may be 
required from any place in the United States or any State at any 
designated place of hearing. In case of contumacy by, or refusal 
to obey a subpena issued to, any person, the Commission may 
invoke the aid of any court of the United States within the juris-
diction in which the investigation or proceeding is conducted, or 
where such person resides or transacts business, in requiring the 
attendance and testimony of witnesses and the production of 
books, papers, correspondence, memoranda, and other records. 
Such court may issue an order requiring such person to appear 
before the Commission or member or Administrative Law Judge 
or other officer designated by the Commission, there to produce 
records, if so ordered, or to give testimony touching the matter 
under investigation or in question. Any failure to obey such order 
of the court may be punished by the court as a contempt thereof. 
All process in any such case may be served in the judicial district 
wherein such person is an inhabitant or transacts business or 
wherever such person may be found.". 
Publication in 
Federal Register. 
92 STAT. 872 
PUBLIC LAW 95-405—SEPT. 30, 1978 
HEARING ON THE RECORD FOR CEASE AND DESIST ORDERS AND IMPOSITION OF 
CIVIL PENALTY 
SEC. 14. Section 6b of the Commodity Exchange Act (7 U.S.C. 13a) 
is amended by inserting in the first sentence "on the record" after 
"hearing". 
JURISDICTION OF THE STATES 
SEC. 15. The Commodity Exchange Act is amended by adding after 
section 6c a new section 6d as follows: 
7 use 13a-2. 
"SEC. 6d. (1) Whenever it shall appear to the attorney general of 
any State, the administrator of the securities laws of any State, or 
such other official as a State may designate, that the interests of the 
residents of that State have been, are being, or may be threatened 
or adversely affected because any person (other than a contract market, 
clearinghouse, or floor broker) has engaged in, is engaging or is about 
to engage in, any act or practice constituting a violation of any provi-
sion of this Act or any rule, regulation, or order of the Commission 
thereunder, the State may bring a suit in equity or an action at law 
on behalf of its residents to enjoin such act or practice, to enforce com-
pliance with this Act, or any rule, regulation, or order of the Com-
mission thereunder, to obtain damages on behalf of their residents, or 
to obtain such further and other relief as the court may deem 
appropriate. 
"(2) The district courts of the United States, the United States 
courts of any territory, and the District Court of the United States 
for the District of Columbia, shall have jurisdiction of all suits in 
equity and actions at law brought under this section to enforce any 
liability or duty created by this Act or any rule, regulation, or order 
of the Commission thereunder, or to obtain damages or other relief 
with respect thereto. Upon proper application, such courts shall also 
have jurisdiction to issue writs of mandamus, or orders affording like 
relief, commanding the defendant to comply with the provisions of this 
Act or any rule, regulation, or order of the Commission thereunder, 
including the requirement that the defendant take such action as is 
necessary to remove the danger of violation of this Act or of any such 
rule, regulation, or order. Upon a proper showing, a permanent or tem-
porary injunction or restraining order shall be granted without bond. 
"(3) Immediately upon instituting any such suit or action, the 
State shall serve written notice thereof upon the Commission and 
provide the Commission with a copy of its complaint, and the Com-
mission shall have the right to (A) intervene in the suit or action and, 
upon doing so, shall be heard on all matters arising therein, and (B) 
file petitions for appeal. 
" (4) Any suit or action brought under this section in a district court 
of the United States may be brought in the district wherein the defend-
ant is found or is an inhabitant or transacts business or wherein the 
act or practice occurred, is occurring, or is about to occur, and process 
in such cases may be served in anv district in which the defendant is 
an inhabitant or wherever the defendant may be found. 
" (5) For purposes of bringing any suit or action under this section, 
nothing in this Act shall prevent the attorney general, the administra-
tor of the State securities laws, or other duly authorized State officials 
from exercising the powers conferred on them by the laws of such 
State to conduct investigations or to administer oaths or affirmations 
or to compel the attendance of witnesses or the production of docu-
mentary and other evidence. 
PUBLIC LAW 95-405—SEPT. 30, 1978 
92 STAT. 873 
"(6) For purposes of this section, 'State' means any State of the 
United States, the District of Columbia, the Commonwealth of Puerto 
Rico, or any territory or possession of the United States. 
"(7) Nothing contained in this section shall prohibit an authorized 
State official from proceeding in State court on the basis of an alleged 
violation of any general civil or criminal anti fraud statute of such 
State.". 
'State.' 
DISCLOSURE TO THE PUBLIC OF TRADERS AND THEIR POSITIONS ON BOARDS 
o r TRADE 
SEC. 16. Section 8 of the Commodity Exchange Act (7 U.S.C. 12, 
12-1,12-2, and 12-3) is amended to read as follows: 
"SEC, 8. (a) For the efficient execution of the provisions of this Act, Investigations 
and in order to provide information for the use of Congress, the Com- *
°
<
^ reports, 
mission may make such investigations as it deems necessary to ascer-
tain the facts regarding the operations of boards of trade and other 
persons subject to the provisions of this Act. The Commission may 
publish from time to time the results of any such investigation and 
such general statistical information gathered therefrom as it deems of 
interest to the public: Provided, That except as otherwise specifically 
authorized in this Act, the Commission may not publish data and 
information that would separately disclose the business transactions 
or market positions of any person and trade secrets or names of 
customers. 
" (b) The Commission may disclose publicly any data or information 
that would separately disclose the market positions, business transac-
tions, trade secrets, or names of customers of any person when such 
disclosure is made in connection with a congressional proceeding, or 
in an administrative or judicial proceeding brought under this Act. 
"(c) The Commission may make or issue such reports as it deems 
necessary, or such opinions or orders as may be required under other 
provisions of law, relative to the conduct of any board of trade or to 
the transactions of any person found guilty of violating the provisions 
of this Act or the rules, regulations, or orders of the Commission there-
under in proceedings brought under section 6 of this Act. In any such 7 USC 8, 9, 9a, 
report or opinion, the Commission may set forth the facts as to any 13b, 15. 
actual transaction or any information referred to in subsection (b) 
of this section, if such facts or information have previously been dis-
closed publicly in connection with a congressional proceeding, or in an 
administrative or judicial proceeding brought under this Act. 
"(d) The Commission, upon its own initiative or in cooperation with 
existing governmental agencies, shall investigate the marketing condi-
tions of commodities and commodity products and byproducts, 
including supply and demand for these commodities, cost to the con-
sumer, and handling and transportation charges. It shall also compile 
and furnish to producers, consumers, and distributors, by means of 
regular or special reports, or by such other methods as it deems most 
effective, information respecting the commodity markets, together 
with information on supply, demand, prices, and other conditions in 
tliis and other countries that affect the markets. 
"(e) The Commission may disclose and make public, where such 
information has previously been disclosed publicly in accordance with 
the provisions of this section, the names and addresses of all traders 
on the boards of trade on the commodity markets with respect to whom 
the Commission has information, and any other information in the 
possession of the Commission relating to the amount of commodities 
92 STAT. 874 
PUBLIC LAW 95-405—SEPT. 30, 1978 
Report to 
Congress. 
Reviews and 
audits. 
purchased or sold by each such trader. Upon the request of any com-
mittee of either House of Congress, acting within the scope of its 
jurisdiction, the Commission shall furnish to such committee the 
names and addresses of all traders on such boards of trade with respect 
to whom the Commission has information, and any other information 
in the possession of the Commission relating to the amount of any 
commodity purchased or sold by each such trader. Upon the request 
of any department or agency of the Executive Branch of the Gov-
ernment of the United States, acting within the scope of its jurisdic-
tion, the Commission may furnish to such department or agency any 
information in the possession of the Commission obtained in connec-
tion with the administration of this Act. However, any information 
furnished under this subsection to any Federal department or agency 
shall not be disclosed by such department or agency except in any 
action or proceeding under the laws of the United States to which it, 
the Commission, or the United States is a party. 
"(f) The Commission shall submit to Congress a written report 
within one hundred and twenty days after the end of each fiscal year 
detailing the operations of the Commission during such fiscal year. 
The Commission shall include in such report such information, data, 
and legislative recommendations as it deems advisable with respect 
to the administration of this Act and its powers and functions under 
this Act. 
"(g) The Comptroller General of the United States shall conduct 
reviews and audits of the Commission and make reports thereon. For 
the purpose of conducting such reviews and audits, the Comptroller 
General shall be furnished such information regarding the powers, 
duties, organizations, transactions, operations, and activities of the 
Commission as the Comptroller General may require and the Comp-
troller General and the duly authorized representatives of the 
Comptroller General shall, for the purpose of securing such informa-
tion, have access to and the right to examine any books, documents, 
papers, or records of the Commission, except that in reports the Comp-
troller General shall not include data and information that would 
separately disclose the business transactions of any person and trade 
secrets or names of customers, although such data shall be provided 
upon request by any committee of either House of Congress acting 
within the scope of its jurisdiction.". 
FINGERPRINTING 
OF APPLICANTS 
FOR REGISTRATION; 
LIMITATION 
ON 
PDBMCATION OF CERTAIN INFORMATION 
SEC. 17. Section 8a of the Commodity Exchange Act (7 U.S.C. 12a) 
is amended by— 
(1) inserting in paragraph (1) after "bv the Commission" the 
following: ", which may require the applicant, and any persons 
associated with the applicant as the Commission may specify, to 
be fingerprinted and to submit, or cause to be submitted, such 
fingerprints to the Attorney General for identification and appro-
priate processing"; and 
(2) striking out in paragraph (6) "and to publish". 
DISCLOSURE OF RESULTS OF EXCHANGE DISCIPLINARY PROCEEDINGS 
SEC. 18. Section 8c(l)(B) of the Commodity Exchange Act (7 
U.S.C. 12c(1) (B)) is amended by amending the last sentence to read 
as follows: "An exchange shall make public its findings and the reasons 
for the exchange action in any such proceeding, including the action 
PUBLIC LAW 95-405—SEPT. 30, 1978 
92 STAT. 875 
taken or the penalty imposed, but shall not disclose the evidence there-
for, except to the person who is suspended, expelled, or disciplined, 
or denied access, and to the Commission.". 
CRIMINAL 
PENALTIES 
SEC. 19. Section 9 of the Commodity Exchange Act (7 U.S.C. 13) 
is amended by— 
(1) stiiking out in subsection (a) "$100,000" and inserting in 
lieu thereof "$500,000"; and inserting immediately after the first 
sentence of subsection (a) the following: "Notwithstanding the 
foregoing, in the case of any violation described in the foregoing 
sentence by a person who is an individual, the fine shall not be 
more than $100,000, together with the costs of prosecution."; 
(2) striking out in subsection (b) "$100,000" and inserting in 
lieu thereof "$500,000"; and inserting before the period at the end 
of subsection (b) the following:", or knowingly to violate the pro-
visions of section 4, section 4b, section 4c (b) through section 4c(e), 
section 4h, section 4o(l), or section 19 of this Act, or knowingly 7 USC 6, 6b, 6c, 
to make any false or misleading statement of a material fact in 6h, 6o. 
any registration application or report filed with the Commission, ""^^ P- ^^^• 
or knowingly to omit in any application or report any material 
fact that is required to be stated therein. Notwithstanding the 
foregoing, in the case of any violation described in the foregoing 
sentence by a person who is an individual, the fine shall not be 
more than $100,000, together with the costs of prosecution"; 
(3) amending subsection (c) to read as follows: 
" (c) Except as provided in subsections (a), (b), (d), and (e) of this 
section, it shall be a misdemeanor punishable Ijy a fine of not more than 
$100,000 or imprisonment for not more than one year, or both, together 
with the costs of prosecution, for any person to violate any provisions 
of section 4a, section 4c(a), section 4d, section 4e, section 4i, section 4k. 7 USC 6a, 6c, 
section 4m, section 4o(2), or section 8b, or to fail to evidence any con- 6d, 6e, 6i, 6k, 
tract mentioned in section 4 of this Act by a record in writing as ^™' ^ ' l^^-
therein required."; 
(4) striking out in subsection (d) "$10,000" and inserting in 
lieu thereof "$100,000"; and 
(5) striking out in subsection (e) "$10,000" and inserting in 
lieu thereof "$100,000". 
AUTHORIZATION FOR APPROPRIATIONS 
SEC. 20. Section 12(d) of the Commodity Exchange Act (7 U.S.C. 
16(d)) is amended to read as follows: 
"(d) There are hereby authorized to be appropriated to carry out 
the provisions of this Act such sums as may be required for each of the 
fiscal years during the period beginning October 1, 1978, and ending 
September 30,1982.". 
• 
REPARATIONS 
PROCEEDINGS 
SEC. 21. Section 14 of the Commodity Exchange Act (7 U.S.C. 18) 
is amended by— 
39-194 O—80—pt. 1 
59 : QL3 
92 STAT. 876 
PUBLIC LAW 95-405—SEPT. 30, 1978 
(1) striking out in subsection (a) "registered" and inserting 
in lieu thereof "who is registered or required to be registered"; 
(2) striking out in subsection (b) "$2,500" and inserting in 
lieu thereof "$5,000"; and 
(3) striking out in subsection (c) "$2,500" wherever it appears 
and inserting in lieu thereof "$5,000". 
REGISTERED FUTURES ASSOCIATION 
SEC. 22. Section 17 of the Commodity Exchange Act (7 U.S.C. 21) 
is amended by— 
(1) striking out in subsection (b) (3) (B) "(7 U.S.C. 9)"; 
(2) striking out in subsection (b) (10) "$5,000" and inserting 
in lieu thereof "$15,000"; 
(3) striking out in subsection (1) "title" each time that word 
appears and inserting in lieu thereof "Act"; and 
(4) redesignating subsection (m) as subsection (n), and insert-
ing after subsection (1) a new subsection (m) as follows: 
" (m) Notwithstanding any other provision of law, the Commission 
may approve rules of futures associations that, directly or indirectly, 
require persons eligible for membership in such associations to become 
members of at least one such association, upon a determination by the 
Commission that such rules are necessary or appropriate to achieve the 
purposes and objectives of this Act.". 
L E V E R A G E TRANSACTIONS 
SEC. 23. The Commodity Exchange Act is amended by adding at the 
end thereof a new section 19 as follows: 
7 use 23. 
"SEC, 19. (a) No person shall offer to enter into, enter into, or con-
firm the execution of, any transaction for the delivery of any com-
7 use 2, 4, 4a. 
modity specifically set forth in section 2(a) of this Act prior to the 
enactment of the Commodity Futures Trading Commission Act of 
7 use I note. 
1974 under a standardized contract commonly known to the trade as a 
margin account, margin contract, leverage account, or leverage con-
tract, or under any contract, account, arrangement, scheme, or device 
that the Commission determines serves the same function or functions 
as such a standardized contract, or is marketed or managed in substan-
tially the same manner as such a standardized contract. 
"(b) No person shall offer to enter into, enter into, or confirm the 
execution or any transaction for the delivery of silver bullion, gold 
bullion, or bulk silver coins or bulk gold coins, under a standardized 
contract described in subsection (a) of this section, contrary to any 
rule, regulation, or order of the Commission designed to ensure the 
financial solvency of the transaction or prevent manipulation or fraud: 
Provided^ That such rule, regulation, or order may be made only after 
notice and opportunity for hearing. 
Regulations. 
"(c) The Commission may prohibit or regulate any transactions, 
under a standardized contract described in subsection (a) of this sec-
tion, involving any other commodities under such terms and conditions 
as the Commission shall initially prescribe by October 1, 1979: Pro-
vided^ That any such order, rule, or regulation may be made only after 
notice and opportunity for hearing: Provided further^ That the Com-
mission may set different terms and conditions for such transactions 
involving different commodities. 
PUBLIC LAW 95-405—SEPT. 30, 1978 
92 STAT. 877 
"(d) If the Commission determines that any transaction under sub- Regulations, 
sections (b) and (c) of this section is a contract for future delivery 
within the meaning of this Act, such transaction shall be regulated in 
accordance with the applicable provisions of this Act.". 
REPEAL o r UEVERAGE TRANSACTION PROVISION IN THE 1974 ACT 
SEC. 24. Section 217 of the Commodity Futures Trading Commission 
Act of 1974 (7 U.S.C. 15a) is hereby repealed. 
USE IMMUNITY 
SEC. 25. Section 6001 of part V of title 18 of the United States Code 
(18 U.S.C. 6001) is amended by inserting after "Civil Aeronau-
tics Board," the following: "the Commodity Futures Trading 
Commission,". 
PLAN FOR USER FEES 
SEC. 26. Notwithstanding any other provision of law, the Commodity 
Futures Trading Commission may develop and implement a plan to 
charge and collect reasonable fees to cover the estimated cost of reg-
ulating transactions under the jurisdiction of the Commission. How-
ever, prior to implementing such a plan, the Commission shall report 
its intention to do so to the House Committee on Agriculture and the 
Senate Committee on Agriculture, Nutrition, and Forestry. The Com-
mission shall include in its report the feasibility and desirability of 
collecting such fees. Any plan developed under this section shall not 
be implemented until approved by the House Committee on Agri-
culture and the Senate Committee on Agriculture, Nutrition, and 
Forestry. Fees collected under any plan approved under this section 
shall be deposited in the Treasury of the United States as miscella-
neous receipts. 
POTATO FUTURES STUDY 
SEC. 27. Within one year of the effective date of this Act, the Sec-
retary of Agriculture shall— 
(1) conduct a comprehensive study of the marketing of Irish 
potatoes and of the making and trading of contracts of sale for 
the future delivery of Irish potatoes, including rules and regula-
tions pertaining to such trading issued by the Commodity Futures 
Trading Commission or any contract market designated by the 
Commission; and 
(2) submit to each House of Congress a detailed report on the 
results of such study. 
7 use 16a. 
Report to 
congressional 
committees. 
7 u s e 20 note. 
Report to 
eongress. 
92 STAT. 878 
PUBLIC LAW 95-405—SEPT. 30, 1978 
Legislative 
The report shall also include any proposals the Secretary may have 
recommenda- 
concerning any legislation needed to implement such recommendations 
' 
and concerning any modifications and rules and regulations needed to 
improve regulation of such contracts by the Commission or any con-
tract market designated by the Commission. 
tions. 
EFFECTIVE DATE 
7 use 2 note. 
SEO. 28. Except as otherwise provided in this Act, the provisions 
of this Act shall become effective October 1,1978. 
Approved September 30, 1978. 
LEGISLATIVE HISTORY: 
HOUSE REPORTS: No. 95-1181 accompanying H.R. 10285 (Comm. on Agriculture) 
and No. 95-1628 (Comm. of Conference). 
SENATE REPORTS: No. 95-850 (Comm. on Agriculture, Nutrition, and Forestry) and 
No. 95-1239 (Comm. of Conference). 
CONGRESSIONAL RECORD, Vol. 124 (1978): 
July 12, considered and passed Senate. 
July 24-26, H.R. 10285 considered and passed House; proceedings vacated and 
S. 2391, amended, passed in lieu. 
Sept. 28, Senate agreed to Conference report. 
Sept. 29, House agreed to Conference report. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 14, No. 40: 
Oct. 2, Presidential statement.