7 U.S.C. § 6j — Restrictions on dual trading in security fu-

Page 68 TITLE 7—AGRICULTURE § 6j 1983—Pub. L. 97–444 amended section generally by substantially restating provisions and inserting re- quirement that persons whose transactions and posi- tions in any cash commodity or commodity future are equal to or in excess of amounts fixed by the Commis- sion, must keep books and records of such transactions and positions as well as books and records of any such commodity traded on or subject to rules of any other board of trade, whether or not such person is required to file reports with the Commission concerning such transactions and positions. 1974—Pub. L. 93–463 substituted ‘‘Commission’’ for ‘‘Secretary of Agriculture’’ and ‘‘United States Depart- ment of Agriculture’’. 1968—Pub. L. 90–258 required recordkeeping of posi- tions and of cash or spot transactions in commodities entered into, and inventories and purchase and sale commitments of commodities held, in any month in which reports are required to be kept, including details concerning positions, inventories, and commitments, and included controlled transactions and positions in the futures and cash or spot transactions and positions of any person. Statutory Notes and Related Subsidiaries 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 13202(b) 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 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 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 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. § 6j. Restrictions on dual trading in security fu- tures products on designated contract mar- kets and registered derivatives transaction execution facilities (a) Issuance of regulations The Commission shall issue regulations to prohibit the privilege of dual trading in security futures products on each contract market and registered derivatives transaction execution fa- cility. The regulations issued by the Commis- sion under this section— (1) shall provide that the prohibition of dual trading thereunder shall take effect upon issuance of the regulations; and (2) shall provide exceptions, as the Commis- sion determines appropriate, to ensure fair- ness and orderly trading in security futures product markets, including— (A) exceptions for spread transactions and the correction of trading errors; (B) allowance for a customer to designate in writing not less than once annually a named floor broker to execute orders for such customer, notwithstanding the regula- tions to prohibit the privilege of dual trad- ing required under this section; and (C) other measures reasonably designed to accommodate unique or special characteris- tics of individual boards of trade or contract markets, to address emergency or unusual market conditions, or otherwise to further the public interest consistent with the pro- motion of market efficiency, innovation, and expansion of investment opportunities, the protection of investors, and with the pur- poses of this section. (b) ‘‘Dual trading’’ defined As used in this section, the term ‘‘dual trad- ing’’ means the execution of customer orders by a floor broker during the same trading session in which the floor broker executes any trade in the same contract market or registered deriva- tives transaction execution facility for— (1) the account of such floor broker; (2) an account for which such floor broker has trading discretion; or (3) an account controlled by a person with whom such floor broker has a relationship through membership in a broker association. (c) ‘‘Broker association’’ defined As used in this section, the term ‘‘broker asso- ciation’’ shall include two or more contract market members or registered derivatives trans- action execution facility members with floor trading privileges of whom at least one is acting as a floor broker, who— (1) engage in floor brokerage activity on be- half of the same employer, (2) have an employer and employee relation- ship which relates to floor brokerage activity, (3) share profits and losses associated with their brokerage or trading activity, or (4) regularly share a deck of orders. (Sept. 21, 1922, ch. 369, § 4j, as added Pub. L. 93–463, title II, § 203, Oct. 23, 1974, 88 Stat. 1396; amended Pub. L. 94–16, § 2, Apr. 16, 1975, 89 Stat. 77; Pub. L. 102–546, title I, §§ 101, 102(a), Oct. 28, 1992, 106 Stat. 3591, 3594; Pub. L. 106–554, § 1(a)(5) [title II, § 251(c)], Dec. 21, 2000, 114 Stat. 2763, 2763A–442.) Editorial Notes AMENDMENTS 2000—Pub. L. 106–554 amended section generally. Prior to amendment, section required Commission to issue regulations to prohibit the privilege of dual trading on contract markets, allowed for certain exemptions, re- quired Commission to make determinations relating to trading by floor brokers and futures commission mer- chants, and restricted trading among members of broker associations. 1992—Subsec. (a). Pub. L. 102–546, § 101(a)(3), added subsec. (a). Subsec. (b). Pub. L. 102–546, § 101(a)(1), (2), redesig- nated par. (1) as subsec. (b) and substituted ‘‘If, in addi- tion to the regulations issued pursuant to subsection (a) of this section, the Commission has reason to be- lieve that dual trading-related or facilitated abuses are Page 69 TITLE 7—AGRICULTURE § 6k not being or cannot be effectively addressed by sub- section (a) of this section, the Commission shall’’ for ‘‘The Commission shall within nine months after the effective date of the Commodity Futures Trading Com- mission Act of 1974, and subsequently when it deter- mines that changes are required,’’. Subsec. (c). Pub. L. 102–546, § 101(a)(1), redesignated par. (2) as subsec. (c). Subsec. (d). Pub. L. 102–546, § 102(a), added subsec. (d). 1975—Pub. L. 94–16 substituted ‘‘nine months’’ for ‘‘six months’’ in pars. (1) and (2). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1992 AMENDMENT Pub. L. 102–546, title I, § 102(b), Oct. 28, 1992, 106 Stat. 3594, provided that: ‘‘The amendment made by sub- section (a) [amending this section] shall become effec- tive two hundred and seventy days after the date of en- actment of this Act [Oct. 28, 1992].’’ EFFECTIVE DATE For effective date of section, see section 418 of Pub. L. 93–463, set out as an Effective Date of 1974 Amend- ment note under section 2 of this title. § 6k. Registration of associates of futures com- mission merchants, commodity pool opera- tors, and commodity trading advisors; re- quired disclosure of disqualifications; exemp- tions for associated persons (1) It shall be unlawful for any person to be as- sociated with a futures commission merchant as a partner, officer, or employee, or to be associ- ated with an introducing broker as a partner, of- ficer, employee, or agent (or any person occu- pying a similar status or performing similar functions), in any capacity that involves (i) the solicitation or acceptance of customers’ orders (other than in a clerical capacity) or (ii) the su- pervision of any person or persons so engaged, unless such person is registered with the Com- mission under this chapter as an associated per- son of such futures commission merchant or of such introducing broker and such registration shall not have expired, been suspended (and the period of suspension has not expired), or been re- voked. It shall be unlawful for a futures commis- sion merchant or introducing broker to permit such a person to become or remain associated with the futures commission merchant or intro- ducing broker in any such capacity if such fu- tures commission merchant or introducing broker knew or should have known that such person was not so registered or that such reg- istration had expired, been suspended (and the period of suspension has not expired), or been re- voked. Any individual who is registered as a floor broker, futures commission merchant, or introducing broker (and such registration is not suspended or revoked) need not also register under this paragraph. (2) It shall be unlawful for any person to be as- sociated with a commodity pool operator as a partner, officer, employee, consultant, or agent (or any person occupying a similar status or per- forming similar functions), in any capacity that involves (i) the solicitation of funds, securities, or property for a participation in a commodity pool or (ii) the supervision of any person or per- sons so engaged, unless such person is registered with the Commission under this chapter as an associated person of such commodity pool oper- ator and such registration shall not have ex- pired, been suspended (and the period of suspen- sion has not expired), or been revoked. It shall be unlawful for a commodity pool operator to permit such a person to become or remain asso- ciated with the commodity pool operator in any such capacity if the commodity pool operator knew or should have known that such person was not so registered or that such registration had expired, been suspended (and the period of suspension has not expired), or been revoked. Any individual who is registered as a floor broker, futures commission merchant, intro- ducing broker, commodity pool operator, or as an associated person of another category of reg- istrant under this section (and such registration is not suspended or revoked) need not also reg- ister under this paragraph. The Commission may exempt any person or class of persons from having to register under this paragraph by rule, regulation, or order. (3) It shall be unlawful for any person to be as- sociated with a commodity trading advisor as a partner, officer, employee, consultant, or agent (or any person occupying a similar status or per- forming similar functions), in any capacity which involves (i) the solicitation of a client’s or prospective client’s discretionary account or (ii) the supervision of any person or persons so en- gaged, unless such person is registered with the Commission under this chapter as an associated person of such commodity trading advisor and such registration shall not have expired, been suspended (and the period of suspension has not expired), or been revoked. It shall be unlawful for a commodity trading advisor to permit such a person to become or remain associated with the commodity trading advisor in any such ca- pacity if the commodity trading advisor knew or should have known that such person was not so registered or that such registration had expired, been suspended (and the period of suspension has not expired), or been revoked. Any individual who is registered as a floor broker, futures com- mission merchant, introducing broker, com- modity trading advisor, or as an associated per- son of another category of registrant under this section (and such registration is not suspended or revoked) need not also register under this paragraph. The Commission may exempt any person or class of persons from having to reg- ister under this paragraph by rule, regulation, or order. (4) Any person desiring to be registered as an associated person of a futures commission mer- chant, of an introducing broker, of a commodity pool operator, or of a commodity trading advi- sor shall make application to the Commission in the form and manner prescribed by the Commis- sion, giving such information and facts as the Commission may deem necessary concerning the applicant. Such person, when registered here- under, shall likewise continue to report and fur- nish to the Commission such information as the Commission may require. Such registration shall expire at such time as the Commission may by rule, regulation, or order prescribe. (5) It shall be unlawful for any registrant to permit a person to become or remain an associ- ated person of such registrant, if the registrant knew or should have known of facts regarding