7 U.S.C. § 6a — Excessive speculation

Page 48 TITLE 7—AGRICULTURE § 6a Subsec. (a)(2). Pub. L. 106–554, § 1(a)(5) [title I, § 123(a)(3)(A)(ii)], struck out ‘‘member of such’’ after ‘‘by or through a’’. Subsec. (a)(3). Pub. L. 106–554, § 1(a)(5) [title I, § 123(a)(3)(A)(iii)], inserted ‘‘or derivatives transaction execution facility’’ after ‘‘contract market’’. Subsec. (c)(1). Pub. L. 106–554, § 1(a)(5) [title I, § 123(a)(3)(B)(i)], substituted ‘‘designated or registered as a contract market or derivatives transaction execu- tion facility’’ for ‘‘designated as a contract market’’ and ‘‘subparagraphs (C)(ii) and (D) of section 2(a)(1) of this title, except that the Commission and the Securi- ties and Exchange Commission may by rule, regulation, or order jointly exclude any agreement, contract, or transaction from section 2(a)(1)(D) of this title’’ for ‘‘section 2a of this title’’. Subsec. (c)(2)(B)(ii). Pub. L. 106–554, § 1(a)(5) [title I, § 123(a)(3)(B)(ii)], inserted ‘‘or derivatives transaction execution facility’’ after ‘‘contract market’’. 1992—Subsec. (a). Pub. L. 102–546, § 502(a)(1), sub- stituted ‘‘Unless exempted by the Commission pursuant to subsection (c) of this section, it shall be unlawful’’ for ‘‘It shall be unlawful’’. Subsecs. (c), (d). Pub. L. 102–546, § 502(a)(2), added sub- secs. (c) and (d). 1983—Pub. L. 97–444 amended section generally, com- bining into subsec. (a) existing provisions of this sec- tion together with provisions formerly contained in section 6h(1) of this title, relating to the conduct of of- fices or places of business anywhere in the United States or its territories that are used for dealing in commodities for future delivery unless such dealings are executed or consummated by or through a member of a contract market, and adding subsec. (b). 1974—Pub. L. 93–463 substituted ‘‘Commission’’ for ‘‘Secretary of Agriculture’’ and ‘‘United States Depart- ment of Agriculture’’. 1936—Act June 15, 1936, § 2, substituted ‘‘commodity’’ for ‘‘grain’’ wherever appearing. Act June 15, 1936, § 4, struck out par. (a) and combined par. (b) with first par. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Amendment by Pub. L. 111–203 effective on the later of 360 days after July 21, 2010, or, to the extent a provi- sion of subtitle A (§§ 711–754) of title VII of Pub. L. 111–203 requires a rulemaking, not less than 60 days after publication of the final rule or regulation imple- menting such provision of subtitle A, see section 754 of Pub. L. 111–203, set out as a note under section 1a of this title. EFFECTIVE DATE OF 1983 AMENDMENT Amendment by Pub. L. 97–444 effective Jan. 11, 1983, see section 239 of Pub. L. 97–444, set out as a note under section 2 of this title. EFFECTIVE DATE OF 1974 AMENDMENT For effective date of amendment by Pub. L. 93–463, see section 418 of Pub. L. 93–463, set out as a note under section 2 of this title. EFFECTIVE DATE OF 1936 AMENDMENT Amendment by act June 15, 1936, effective 90 days after June 15, 1936, see section 13 of that act, set out as a note under section 1 of this title. § 6a. Excessive speculation (a) Burden on interstate commerce; trading or position limits (1) In general Excessive speculation in any commodity under contracts of sale of such commodity for future delivery made on or subject to the rules of contract markets or derivatives transaction execution facilities, or swaps that perform or affect a significant price discovery function with respect to registered entities causing sudden or unreasonable fluctuations or unwar- ranted changes in the price of such com- modity, is an undue and unnecessary burden on interstate commerce in such commodity. For the purpose of diminishing, eliminating, or preventing such burden, the Commission shall, from time to time, after due notice and opportunity for hearing, by rule, regulation, or order, proclaim and fix such limits on the amounts of trading which may be done or posi- tions which may be held by any person, includ- ing any group or class of traders, under con- tracts of sale of such commodity for future de- livery on or subject to the rules of any con- tract market or derivatives transaction execu- tion facility, or swaps traded on or subject to the rules of a designated contract market or a swap execution facility, or swaps not traded on or subject to the rules of a designated con- tract market or a swap execution facility that performs a significant price discovery function with respect to a registered entity, as the Commission finds are necessary to diminish, eliminate, or prevent such burden. In deter- mining whether any person has exceeded such limits, the positions held and trading done by any persons directly or indirectly controlled by such person shall be included with the posi- tions held and trading done by such person; and further, such limits upon positions and trading shall apply to positions held by, and trading done by, two or more persons acting pursuant to an expressed or implied agreement or understanding, the same as if the positions were held by, or the trading were done by, a single person. Nothing in this section shall be construed to prohibit the Commission from fixing different trading or position limits for different commodities, markets, futures, or delivery months, or for different number of days remaining until the last day of trading in a contract, or different trading limits for buy- ing and selling operations, or different limits for the purposes of paragraphs (1) and (2) of subsection (b) of this section, or from exempt- ing transactions normally known to the trade as ‘‘spreads’’ or ‘‘straddles’’ or ‘‘arbitrage’’ or from fixing limits applying to such trans- actions or positions different from limits fixed for other transactions or positions. The word ‘‘arbitrage’’ in domestic markets shall be de- fined to mean the same as ‘‘spread’’ or ‘‘strad- dle’’. The Commission is authorized to define the term ‘‘international arbitrage’’. (2) Establishment of limitations (A) In general In accordance with the standards set forth in paragraph (1) of this subsection and con- sistent with the good faith exception cited in subsection (b)(2), with respect to physical commodities other than excluded commod- ities as defined by the Commission, the Com- mission shall by rule, regulation, or order establish limits on the amount of positions, as appropriate, other than bona fide hedge positions, that may be held by any person Page 49 TITLE 7—AGRICULTURE § 6a with respect to contracts of sale for future delivery or with respect to options on the contracts or commodities traded on or sub- ject to the rules of a designated contract market. (B) Timing (i) Exempt commodities For exempt commodities, the limits re- quired under subparagraph (A) shall be es- tablished within 180 days after July 21, 2010. (ii) Agricultural commodities For agricultural commodities, the limits required under subparagraph (A) shall be established within 270 days after July 21, 2010. (C) Goal In establishing the limits required under subparagraph (A), the Commission shall strive to ensure that trading on foreign boards of trade in the same commodity will be subject to comparable limits and that any limits to be imposed by the Commission will not cause price discovery in the commodity to shift to trading on the foreign boards of trade. (3) Specific limitations In establishing the limits required in para- graph (2), the Commission, as appropriate, shall set limits— (A) on the number of positions that may be held by any person for the spot month, each other month, and the aggregate number of positions that may be held by any person for all months; and (B) to the maximum extent practicable, in its discretion— (i) to diminish, eliminate, or prevent ex- cessive speculation as described under this section; (ii) to deter and prevent market manipu- lation, squeezes, and corners; (iii) to ensure sufficient market liquidity for bona fide hedgers; and (iv) to ensure that the price discovery function of the underlying market is not disrupted. (4) Significant price discovery function In making a determination whether a swap performs or affects a significant price dis- covery function with respect to regulated mar- kets, the Commission shall consider, as appro- priate: (A) Price linkage The extent to which the swap uses or oth- erwise relies on a daily or final settlement price, or other major price parameter, of an- other contract traded on a regulated market based upon the same underlying commodity, to value a position, transfer or convert a po- sition, financially settle a position, or close out a position. (B) Arbitrage The extent to which the price for the swap is sufficiently related to the price of another contract traded on a regulated market based upon the same underlying commodity so as to permit market participants to effectively arbitrage between the markets by simulta- neously maintaining positions or executing trades in the swaps on a frequent and recur- ring basis. (C) Material price reference The extent to which, on a frequent and re- curring basis, bids, offers, or transactions in a contract traded on a regulated market are directly based on, or are determined by ref- erencing, the price generated by the swap. (D) Material liquidity The extent to which the volume of swaps being traded in the commodity is sufficient to have a material effect on another con- tract traded on a regulated market. (E) Other material factors Such other material factors as the Com- mission specifies by rule or regulation as relevant to determine whether a swap serves a significant price discovery function with respect to a regulated market. (5) Economically equivalent contracts (A) Notwithstanding any other provision of this section, the Commission shall establish limits on the amount of positions, including aggregate position limits, as appropriate, other than bona fide hedge positions, that may be held by any person with respect to swaps that are economically equivalent to contracts of sale for future delivery or to options on the contracts or commodities traded on or subject to the rules of a designated contract market subject to paragraph (2). (B) In establishing limits pursuant to sub- paragraph (A), the Commission shall— (i) develop the limits concurrently with limits established under paragraph (2), and the limits shall have similar requirements as under paragraph (3)(B); and (ii) establish the limits simultaneously with limits established under paragraph (2). (6) Aggregate position limits The Commission shall, by rule or regulation, establish limits (including related hedge ex- emption provisions) on the aggregate number or amount of positions in contracts based upon the same underlying commodity (as defined by the Commission) that may be held by any per- son, including any group or class of traders, for each month across— (A) contracts listed by designated contract markets; (B) with respect to an agreement contract, or transaction that settles against any price (including the daily or final settlement price) of 1 or more contracts listed for trad- ing on a registered entity, contracts traded on a foreign board of trade that provides members or other participants located in the United States with direct access to its elec- tronic trading and order matching system; and (C) swap contracts that perform or affect a significant price discovery function with re- spect to regulated entities. Page 50 TITLE 7—AGRICULTURE § 6a (7) Exemptions The Commission, by rule, regulation, or order, may exempt, conditionally or uncondi- tionally, any person or class of persons, any swap or class of swaps, any contract of sale of a commodity for future delivery or class of such contracts, any option or class of options, or any transaction or class of transactions from any requirement it may establish under this section with respect to position limits. (b) Prohibition on trading or positions in excess of limits fixed by Commission The Commission shall, in such rule, regula- tion, or order, fix a reasonable time (not to ex- ceed ten days) after the promulgation of the rule, regulation, or order; after which, and until such rule, regulation, or order is suspended, modified, or revoked, it shall be unlawful for any person— (1) directly or indirectly to buy or sell, or agree to buy or sell, under contracts of sale of such commodity for future delivery on or sub- ject to the rules of the contract market or markets, or swap execution facility or facili- ties with respect to a significant price dis- covery contract, to which the rule, regulation, or order applies, any amount of such com- modity during any one business day in excess of any trading limit fixed for one business day by the Commission in such rule, regulation, or order for or with respect to such commodity; or (2) directly or indirectly to hold or control a net long or a net short position in any com- modity for future delivery on or subject to the rules of any contract market or swap execu- tion facility with respect to a significant price discovery contract in excess of any position limit fixed by the Commission for or with re- spect to such commodity: Provided, That such position limit shall not apply to a position ac- quired in good faith prior to the effective date of such rule, regulation, or order. (c) Applicability to bona fide hedging trans- actions or positions (1) No rule, regulation, or order issued under subsection (a) of this section shall apply to transactions or positions which are shown to be bona fide hedging transactions or positions as such terms shall be defined by the Commission by rule, regulation, or order consistent with the purposes of this chapter. Such terms may be de- fined to permit producers, purchasers, sellers, middlemen, and users of a commodity or a prod- uct derived therefrom to hedge their legitimate anticipated business needs for that period of time into the future for which an appropriate fu- tures contract is open and available on an ex- change. To determine the adequacy of this chap- ter and the powers of the Commission acting thereunder to prevent unwarranted price pres- sures by large hedgers, the Commission shall monitor and analyze the trading activities of the largest hedgers, as determined by the Com- mission, operating in the cattle, hog, or pork belly markets and shall report its findings and recommendations to the Senate Committee on Agriculture, Nutrition, and Forestry and the House Committee on Agriculture in its annual reports for at least two years following January 11, 1983. (2) For the purposes of implementation of sub- section (a)(2) for contracts of sale for future de- livery or options on the contracts or commod- ities, the Commission shall define what con- stitutes a bona fide hedging transaction or posi- tion as a transaction or position that— (A)(i) represents a substitute for trans- actions made or to be made or positions taken or to be taken at a later time in a physical marketing channel; (ii) is economically appropriate to the reduc- tion of risks in the conduct and management of a commercial enterprise; and (iii) arises from the potential change in the value of— (I) assets that a person owns, produces, manufactures, processes, or merchandises or anticipates owning, producing, manufac- turing, processing, or merchandising; (II) liabilities that a person owns or antici- pates incurring; or (III) services that a person provides, pur- chases, or anticipates providing or pur- chasing; or (B) reduces risks attendant to a position re- sulting from a swap that— (i) was executed opposite a counterparty for which the transaction would qualify as a bona fide hedging transaction pursuant to subparagraph (A); or (ii) meets the requirements of subpara- graph (A). (d) Persons subject to regulation; applicability to transactions made by or on behalf of United States This section shall apply to a person that is registered as a futures commission merchant, an introducing broker, or a floor broker under au- thority of this chapter only to the extent that transactions made by such person are made on behalf of or for the account or benefit of such person. This section shall not apply to trans- actions made by, or on behalf of, or at the direc- tion of, the United States, or a duly authorized agency thereof. (e) Rulemaking power and penalties for violation Nothing in this section shall prohibit or im- pair the adoption by any contract market, de- rivatives transaction execution facility, or by any other board of trade licensed, designated, or registered by the Commission or by any elec- tronic trading facility of any bylaw, rule, regu- lation, or resolution fixing limits on the amount of trading which may be done or positions which may be held by any person under contracts of sale of any commodity for future delivery traded on or subject to the rules of such contract mar- ket or derivatives transaction execution facility or on an electronic trading facility, or under op- tions on such contracts or commodities traded on or subject to the rules of such contract mar- ket, derivatives transaction execution facility, or electronic trading facility or such board of trade: Provided, That if the Commission shall have fixed limits under this section for any con- tract or under section 6c of this title for any commodity option, then the limits fixed by the Page 51 TITLE 7—AGRICULTURE § 6a bylaws, rules, regulations, and resolutions adopted by such contract market, derivatives transaction execution facility, or electronic trading facility or such board of trade shall not be higher than the limits fixed by the Commis- sion. It shall be a violation of this chapter for any person to violate any bylaw, rule, regula- tion, or resolution of any contract market, de- rivatives transaction execution facility, or other board of trade licensed, designated, or registered by the Commission or electronic trading facility with respect to a significant price discovery con- tract fixing limits on the amount of trading which may be done or positions which may be held by any person under contracts of sale of any commodity for future delivery or under op- tions on such contracts or commodities, if such bylaw, rule, regulation, or resolution has been approved by the Commission or certified by a registered entity pursuant to section 7a–2(c)(1) of this title: Provided, That the provisions of sec- tion 13(a)(5) of this title shall apply only to those who knowingly violate such limits. (Sept. 21, 1922, ch. 369, § 4a, as added June 15, 1936, ch. 545, § 5, 49 Stat. 1492; amended July 24, 1956, ch. 690, § 1, 70 Stat. 630; Pub. L. 90–258, §§ 2–4, Feb. 19, 1968, 82 Stat. 26, 27; Pub. L. 93–463, title IV, §§ 403, 404, Oct. 23, 1974, 88 Stat. 1413; Pub. L. 94–16, § 4, Apr. 16, 1975, 89 Stat. 78; Pub. L. 97–444, title II, § 205, Jan. 11, 1983, 96 Stat. 2299; Pub. L. 102–546, title IV, § 402(1)(A), (2), Oct. 28, 1992, 106 Stat. 3624; Pub. L. 106–554, § 1(a)(5) [title I, § 123(a)(4)], Dec. 21, 2000, 114 Stat. 2763, 2763A–407; Pub. L. 110–234, title XIII, §§ 13105(a), 13203(g), May 22, 2008, 122 Stat. 1434, 1439; Pub. L. 110–246, § 4(a), title XIII, §§ 13105(a), 13203(g), June 18, 2008, 122 Stat. 1664, 2196, 2201; Pub. L. 111–203, title VII, § 737(a)–(c), July 21, 2010, 124 Stat. 1722, 1725.) Editorial Notes CODIFICATION Pub. L. 110–234 and Pub. L. 110–246 made identical amendments to this section. The amendments by Pub. L. 110–234 were repealed by section 4(a) of Pub. L. 110–246. AMENDMENTS 2010—Subsec. (a). Pub. L. 111–203, § 737(a)(1)–(3), des- ignated existing provisions as par. (1), inserted heading, substituted ‘‘swaps that perform or affect a significant price discovery function with respect to registered en- tities’’ for ‘‘on electronic trading facilities with respect to a significant price discovery contract’’, inserted ‘‘, including any group or class of traders,’’ after ‘‘held by any person’’, and substituted ‘‘swaps traded on or subject to the rules of a designated contract market or a swap execution facility, or swaps not traded on or subject to the rules of a designated contract market or a swap execution facility that performs a significant price discovery function with respect to a registered entity,’’ for ‘‘on an electronic trading facility with re- spect to a significant price discovery contract,’’. Subsec. (a)(2) to (7). Pub. L. 111–203, § 737(a)(4), added pars. (2) to (7). Subsec. (b)(1). Pub. L. 111–203, § 737(b)(1), substituted ‘‘or swap execution facility or facilities’’ for ‘‘or deriva- tives transaction execution facility or facilities or elec- tronic trading facility’’. Subsec. (b)(2). Pub. L. 111–203, § 737(b)(2), which di- rected substitution of ‘‘or swap execution facility’’ for ‘‘or derivatives transaction execution facility or facili- ties or electronic trading facility’’, was executed by making the substitution for ‘‘or derivatives transaction execution facility or electronic trading facility’’ to re- flect the probable intent of Congress. Subsec. (c). Pub. L. 111–203, § 737(c), designated exist- ing provisions as par. (1) and added par. (2). 2008—Subsec. (a). Pub. L. 110–246, § 13203(g)(1), inserted ‘‘, or on electronic trading facilities with respect to a significant price discovery contract’’ after ‘‘execution facilities’’ in first sentence and ‘‘, or on an electronic trading facility with respect to a significant price dis- covery contract,’’ after ‘‘execution facility’’ in second sentence. Subsec. (b)(1). Pub. L. 110–246, § 13203(g)(2)(A), inserted ‘‘or electronic trading facility with respect to a signifi- cant price discovery contract’’ after ‘‘facility or facili- ties’’. Subsec. (b)(2). Pub. L. 110–246, § 13203(g)(2)(B), inserted ‘‘or electronic trading facility with respect to a signifi- cant price discovery contract’’ after ‘‘execution facil- ity’’. Subsec. (e). Pub. L. 110–246, § 13203(g)(3), in first sen- tence, inserted ‘‘or by any electronic trading facility’’ after ‘‘registered by the Commission’’, inserted ‘‘or on an electronic trading facility’’ after ‘‘derivatives trans- action execution facility’’ the second place it appeared, and inserted ‘‘or electronic trading facility’’ before ‘‘or such board of trade’’ in two places, and, in second sen- tence, inserted ‘‘or electronic trading facility with re- spect to a significant price discovery contract’’ after ‘‘registered by the Commission’’. Pub. L. 110–246, § 13105(a), inserted ‘‘or certified by a registered entity pursuant to section 7a–2(c)(1) of this title’’ after ‘‘approved by the Commission’’ and sub- stituted ‘‘section 13(a)(5)’’ for ‘‘section 13(c)’’. 2000—Subsec. (a). Pub. L. 106–554, § 1(a)(5) [title I, § 123(a)(4)(A)], inserted ‘‘or derivatives transaction exe- cution facilities’’ after ‘‘contract markets’’ in first sen- tence and ‘‘or derivatives transaction execution facil- ity’’ after ‘‘contract market’’ in second sentence. Subsec. (b)(1). Pub. L. 106–554, § 1(a)(5) [title I, § 123(a)(4)(B)(i)], inserted ‘‘, or derivatives transaction execution facility or facilities,’’ after ‘‘markets’’. Subsec. (b)(2). Pub. L. 106–554, § 1(a)(5) [title I, § 123(a)(4)(B)(ii)], inserted ‘‘or derivatives transaction execution facility’’ after ‘‘contract market’’. Subsec. (e). Pub. L. 106–554, § 1(a)(5) [title I, § 123(a)(4)(C)], substituted ‘‘contract market, deriva- tives transaction execution facility, or’’ for ‘‘contract market or’’ wherever appearing, ‘‘licensed, designated, or registered’’ for ‘‘licensed or designated’’ in two places, and ‘‘contract market or derivatives trans- action execution facility, or’’ for ‘‘contract market, or’’. 1992—Subsec. (a). Pub. L. 102–546, § 402(1)(A), (2)(A), (C), redesignated par. (1) as subsec. (a), substituted ‘‘Commission’’ for ‘‘commission’’ wherever appearing except in last sentence, and substituted ‘‘paragraphs (1) and (2) of subsection (b) of this section’’ for ‘‘subpara- graphs (A) and (B) of paragraph (2)’’. Subsec. (b). Pub. L. 102–546, § 402(1)(A), (2)(C), (D), re- designated par. (2) as subsec. (b) and subpars. (A) and (B) as pars. (1) and (2), respectively, and substituted ‘‘Commission’’ for ‘‘commission’’ wherever appearing. Subsec. (c). Pub. L. 102–546, § 402(2)(B), (C), redesig- nated par. (3) as subsec. (c) and substituted ‘‘subsection (a)’’ for ‘‘paragraph (1)’’. Subsecs. (d), (e). Pub. L. 102–546, § 402(2)(C), redesig- nated pars. (4) and (5) as subsecs. (d) and (e), respec- tively. 1983—Par. (1). Pub. L. 97–444, § 205(1), (2), substituted ‘‘by rule, regulation, or order, proclaim’’ for ‘‘by order, proclaim’’ and inserted ‘‘or for different number of days remaining until the last day of trading in a contract,’’ after ‘‘delivery months’’. Par. (2). Pub. L. 97–444, § 205(1), (3), substituted ‘‘after the promulgation of the rule, regulation, or order’’ for ‘‘after the order’s promulgation’’ in provisions before subpar. (A) and substituted ‘‘rule, regulation, or order’’ for ‘‘order’’ in provisions before subpar. (A) and in sub- pars. (A) and (B). Par. (3). Pub. L. 97–444, § 205(4), substituted ‘‘No rule, regulation, or order issued under paragraph (1) of this Page 52 TITLE 7—AGRICULTURE § 6b section shall apply to transactions or positions which are shown to be bona fide hedging transactions or posi- tions as such terms shall be defined by the Commission by rule, regulation, or order consistent with the pur- poses of this chapter’’ for ‘‘No order issued under para- graph (1) of this section shall apply to transactions or positions which are shown to be bona fide hedging transactions or positions as such terms shall be defined by the Commission within one hundred and eighty days after the effective date of the Commodity Futures Trading Commission Act of 1974 by order consistent with the purposes of this chapter’’ and inserted ‘‘Such terms may be defined to permit producers, purchasers, sellers, middlemen, and users of a commodity or a product derived therefrom to hedge their legitimate an- ticipated business needs for that period of time into the future for which an appropriate futures contract is open and available on an exchange. To determine the adequacy of this chapter and the powers of the Com- mission acting thereunder to prevent unwarranted price pressures by large hedgers, the Commission shall monitor and analyze the trading activities of the larg- est hedgers, as determined by the Commission, oper- ating in the cattle, hog, or pork belly markets and shall report its findings and recommendations to the Senate Committee on Agriculture, Nutrition, and For- estry and the House Committee on Agriculture in its annual reports for at least two years following January 11, 1983.’’ Par. (4). Pub. L. 97–444, § 205(5), substituted ‘‘a futures commission merchant, an introducing broker, or a floor broker’’ for ‘‘a futures commission merchant or as floor broker’’. Par. (5). Pub. L. 97–444, § 205(6), added par. (5). 1975—Par. (3). Pub. L. 94–16 substituted ‘‘one hundred and eighty days’’ for ‘‘ninety days’’. 1974—Par. (1). Pub. L. 93–463, § 403, inserted ‘‘or ‘arbi- trage’ ’’ after ‘‘or ‘straddles’ ’’, inserted definition of ‘‘arbitrage’’, and authorized Commission to define ‘‘international arbitrage’’. Par. (3). Pub. L. 93–463, § 404, directed Commission to define ‘‘bona fide hedging transactions or positions’’ within 90 days after the effective date of the Com- modity Futures Trading Commission Act of 1974 and struck out provisions which enumerated the factors to be taken into account in determining whether a hedg- ing transaction or position was a bona fide transaction or position. 1968—Par. (1). Pub. L. 90–258, § 2, substituted in second sentence ‘‘amounts of trading’’ for ‘‘amount of trad- ing’’, inserted ‘‘which may be done or positions which may be held by any person’’ before ‘‘under contracts of sale’’, and struck out ‘‘which may be done’’ after ‘‘rules of any contract market’’, inserted third sentence pro- viding for inclusion of controlled positions and trading in determining whether prescribed position or trading limits have been exceeded and for application of such position and trading limits to activities of two or more persons acting pursuant to agreement or understanding as if the activities of a single person, and included in fourth, formerly third, sentence references to position limits and to positions, substituted ‘‘normally’’ for ‘‘commonly’’, and struck out ‘‘trading’’ from ‘‘from fix- ing trading limits’’ and ‘‘from trading limits’’. Par. (2)(B). Pub. L. 90–258, § 3, substituted prohibition against holding of net long or net short positions in ex- cess of any position limit fixed by the Commission for former prohibition of purchases or sales which result in net long or net short positions in excess of trading lim- its fixed by the Commission and provided that the posi- tion limit shall not apply to a position acquired in good faith prior to the effective date of the order. Par. (3). Pub. L. 90–258, § 4, included references to po- sitions, made hedging applicable to short and long posi- tions, substituted ‘‘contract market’’ for ‘‘board of trade’’, and required the activities to be those of the same person to constitute hedging. 1956—Par. (3)(C). Act July 24, 1956, added subpar. (C). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Pub. L. 111–203, title VII, § 737(d), July 21, 2010, 124 Stat. 1725, provided that: ‘‘This section [amending this section] and the amendments made by this section shall become effective on the date of the enactment of this section [July 21, 2010].’’ EFFECTIVE DATE OF 2008 AMENDMENT Amendment of this section and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, except as other- wise provided, see section 4 of Pub. L. 110–246, set out as an Effective Date note under section 8701 of this title. Amendment by section 13203(g) of Pub. L. 110–246 ef- fective June 18, 2008, see section 13204(a) of Pub. L. 110–246, set out as a note under section 2 of this title. EFFECTIVE DATE OF 1983 AMENDMENT Amendment by Pub. L. 97–444 effective Jan. 11, 1983, see section 239 of Pub. L. 97–444, set out as a note under section 2 of this title. EFFECTIVE DATE OF 1974 AMENDMENT Pub. L. 93–463, title IV, § 404, Oct. 23, 1974, 88 Stat. 1413, provided that the amendment of par. (3) which struck out provisions that enumerated the factors to be taken into account in determining whether a hedging transaction or position was a bona fide transaction or position, was effective immediately upon the enact- ment of Pub. L. 93–463, which was approved Oct. 23, 1974. Amendment by Pub. L. 93–463 of par. (1) and that part of par. (3) directing the Commission to define ‘‘bona fide hedging transactions or positions’’ effective so as to allow implementation of all changes effected by this amendment to be carried out after Oct. 23, 1974, and be- fore as well as after the 180th day thereafter, see sec- tion 418 of Pub. L. 93–463, set out as a note under sec- tion 2 of this title. EFFECTIVE DATE OF 1968 AMENDMENT Amendment by Pub. L. 90–258 effective 120 days after Feb. 19, 1968, see section 28 of Pub. L. 90–258, set out as a note under section 2 of this title. EFFECTIVE DATE OF 1956 AMENDMENT Act July 24, 1956, ch. 690, § 2, 70 Stat. 630, provided that: ‘‘This Act [amending this section] shall take ef- fect sixty days after the date of its enactment [July 24, 1956].’’ EFFECTIVE DATE For effective date of section, see section 13 of act June 15, 1936, set out as an Effective Date of 1936 Amendment note under section 1 of this title. REGULATIONS DEFINING BONA FIDE HEDGING TRANSACTIONS AND POSITIONS Pub. L. 93–463, title IV, § 404, Oct. 23, 1974, 88 Stat. 1413, provided in part: ‘‘That notwithstanding any other provision of law, the Secretary of Agriculture, imme- diately upon the enactment of the Commodity Futures Trading Commission Act of 1974 [which was approved on Oct. 23, 1974], is authorized and directed to promul- gate regulations defining bona fide hedging trans- actions and positions: And provided further, That until the Secretary issues such regulations defining bona fide hedging transactions and positions and such regu- lations are in full force and effect, such terms shall continue to be defined as set forth in the Commodity Exchange Act [par. (3) of this section] prior to its amendment by the Commodity Futures Trading Com- mission Act of 1974 [Pub. L. 93–463].’’ § 6b. Contracts designed to defraud or mislead (a) Unlawful actions It shall be unlawful—