Clerk session vote number: 27
Description: COMMODITY FUTURES IMPROVEMENTS ACT OF 1991
Bill summary: Futures Trading Practices Act of 1992 -
Title I: Limitations on Certain Trading Practices
- Amends the Commodity Exchange Act to prohibit dual trading by a floor broker in a contract market unless the market's trading volume is less than the trading level threshold determined by the Commodity Futures Trading Commission (CFTC). Authorizes CFTC threshold adjustments. Exempts other markets if: (1) a trade monitoring system is in place; or (2) there is substantial likelihood that a dual trading
suspension would harm public interest and other corrective measures are sufficient.
Prohibits trading between floor traders or brokers and affiliated customers. Requires disclosure of formal or informal business affiliations between floor brokers and traders.
Title II: Enhancement of Regulatory and Enforcement of Regulatory and Enforcement Activities
- Requires every contract market to maintain a system to monitor trading to detect and deter violations of the Act relating to the making of trades and the execution of customer orders. Requires any audit trail system that is part of such a monitoring system to capture transaction times independently, promptly, precisely, and completely, including a record of the time a customer order is received on the exchange floor and received and executed by the floor broker.
Authorizes audit trail exemptions for: (1) small exchanges with demonstrated compliance; and (2) certain categories of customer orders.
Requires biennial CFTC assessments of each market's trade monitoring system. Directs the CFTC to issue deficiency orders requiring timely correction of any such system failing to meet standards. Bars the placing of oral orders except according to certain CFTC rules.
Requires a CFTC compliance report to be filed with the appropriate congressional committees.
Requires each futures association to adopt telemarketing fraud disciplinary criteria, which shall include a prohibition on a person who has solicited a new account by telephone from entering any orders for such account for three days after the customer has signed the risk disclosure statement.
Continues CFTC authority to conduct undercover enforcement operations.
Prescribes meaningful representation on exchange boards of brokerage firms, commodity producers and consumers, and floor traders and brokers. Specifies diversity of membership that must prevail on major disciplinary panels.
Requires floor trader registration. Revises provisions regarding: (1) registration; and (2) enforcement of money penalties.
Requires ethics training for new registrants.
Provides for nationwide service of process and venue in U.S. district courts.
Increases money penalties for specified violations under such Act.
Provides for contract market emergency rules (effective on a temporary basis without prior CFTC approval or without compliance with notice requirements). Requires CFTC approval or disapproval within ten days of notification (or as soon as practicable) and a report to the appropriate congressional committees.
Makes insider trading a felony.
Sets forth Commissioner qualifications.
Prohibits voting by financially interested members of a governing board or committee.
Directs the Comptroller General to conduct studies and report to the appropriate congressional committees with regard to: (1) agricultural commodity contract delivery points; and (2) transaction assessments.
Directs the CFTC to conduct studies and report to the appropriate congressional committees with regard to: (1) competitiveness of boards of trade; and (2) computerized futures trading.
Authorizes the CFTC to seek monetary penalties in civil court. Makes CFTC merchants liable to customers for any losses caused by the malfeasance of their chosen floor brokers. Allows customers to sue floor brokers for punitive damages of up to double actual losses.
Authorizes the CFTC to require customer restitution.
Authorizes class action suits against registered persons if the Commission has issued final rules permitting such actions.
Directs the CFTC to make a study of CFTC and contract market penalties and related industry guidelines.
Permits futures associations to appeal certain CFTC decisions.
Requires the CFTC to publish any dissenting or separate opinions whenever it publishes any opinion, rule, or other official rule.
Authorizes the CFTC to suspend or modify the registration of a person charged with a felony that reflects on such person's fiduciary fitness.
Requires each registered futures commission merchant to keep records of its financial and operational risk control procedures with respect to affiliated persons, other than a natural person.
Title III: Assistance to Foreign Futures Authorities
- Provides for cooperation with foreign futures authorities with regard to: (1) subpoena authority; (2) investigative assistance; (3) information disclosure and receipt; and (4) payment for necessary investigative expenses.
Title IV: Authorization of Appropriations; Technical Amendments; Effective Date
- Authorizes FY 1993 and 1994 appropriations to carry out the purposes of such Act.
Makes technical amendments. Defines specified terms for purposes of such Act.
Title V: Intermarket Coordination
- Requires any contract market in a stock index futures contract to file with the Board of Governors of the Federal Reserve System any rule establishing or changing margin levels.
Authorizes the CFTC to exempt any agreement, contract, or transaction from the requirements of such Act (with a specified exception) if the CFTC determines the exemption would be consistent with the public interest.
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Bill titles: To improve the regulation of futures trading, authorize appropriations for the Commodity Futures Trading Commission, and for other purposes.
Links for more info on the vote: congress.gov