§ 1.1

DEFINITIONS

Words in singular and plural form. Words used in the singular form in the rules and regulations in this part shall be deemed to import the plural, and vice versa, as the case may require.

§ 1.2 Liability of principal for act of agent.

The act, omission, or failure of any official, agent, or other person acting for any individual, association, partnership, corporation, or trust, within the scope of his employment or office, shall be deemed the act, omission, or failure of such individual, association, partnership, corporation, or trust as well as of such official, agent, or other person. (Sec. 2, 42 Stat. 998; 7 U.S.C. 4) § 1.3

Definitions.

The following terms, as used in the Commodity Exchange Act or in the rules

and regulations in this chapter, shall have the meanings hereby assigned to them, unless the context otherwise requires:

(a) Board of Trade. This term means any exchange or association, whether incorporated or unincorporated, of persons who shall be engaged in the business of buying or selling any commodity or receiving the same for sale on consignment.

(b) Business day. This term means any day other than a Sunday or holiday. In all notices required by the act or by the rules and regulations in this chapter to be given in terms of business days the rule for computing time shall be to exIclude the day on which notice is given and inclue the day on which shall take place the act of which notice is given.

term

(c) Clearing member. This means any person who is a member of, or enjoys the privilege of clearing trades in his own name through, the clearing organization of a contract market.

(d) Clearing organization. This term means the person or organization which acts as a medium for clearing transactions in commodities for future delivery, or for effecting settlements of contracts for future delivery, for and between members of any board of trade.

(e) Commodity. This term means and includes wheat, cotton, rice, corn, oats, barley, rye, flaxseed, grain sorghums, millfeeds, butter, eggs (including shell eggs, frozen whole eggs, frozen plain egg whites, and frozen plain egg yolks), onions, Irish potatoes, wool, wool tops, fats, and oils (including lard, tallow, cottonseed oil, peanut oil, soybean oil, and all other fats and oils), cottonseed meal, cottonseed, peanuts, soybeans, soybean meal, livestock (including live cattle and live hogs), livestock products (including frozen pork bellies, frozen skinned hams, steer carcass beef, and hides), and frozen concentrated orange juice.

(f) Commodity Exchange Act; the act. These terms mean the Commodity Exchange Act approved September 21, 1922 (42 Stat. 998), as amended June 15, 1936 (49 Stat. 1491; 7 U.S.C. 1-17a), and other legislation supplementary thereto and amendatory thereof.

(g) Commodity Exchange Authority. This term means the Commodity Exchange Authority, United States Department of Agriculture.

(h) Contract market. This term means a board of trade designated by the Secretary of Agriculture as a contract market under the Commodity Exchange Act.

(i) Contract of sale. This term includes sales, purchases, agreements of sale or purchase, and agreements to sell or purchase.

(j) Controlled account. An account shall be deemed to be controlled by a person if such person by power of attorney or otherwise actually directs trading for such account.

(k) Customer; commodity customer. These terms have the same meaning and refer to a customer trading in any commodity named in the definition of commodity in paragraph (e) of this section.

(1) Delivery month. This term means the month of delivery specified in a contract of sale of any commodity for future delivery.

(m) [Reserved]

(n) Floor broker. This term means any person who, in or surrounding any pit, ring, post, or other place provided by a contract market for the meeting of persons similarly engaged, shall purchase or sell for any other person any commodity for future delivery on or subject to the rules of any contract market.

(0) Future delivery. This term does not include any sale of a cash commodity for deferred shipment or delivery.

(p) Futures commission merchant. This term means individuals, associations, partnerships, corporations, and trusts engaged in soliciting or in accepting orders for the purchase or sale of any commodity for future delivery on or subject to the rules of any contract market and that, in or in connection with such solicitation or acceptance of orders, accepts any money, securities, or property (or extends credit in lieu thereof) to margin, guarantee, or secure any trades or contracts that result or may result therefrom.

(q) Member of a contract market. This term means and includes individuals, associations, partnerships, corporations, and trusts owning or holding membership in, or admitted to membership representation on, a contract market or given members' trading privileges thereon.

(r) Net equity. This term means the credit balance which would be obtained by combining the commodity margin balance of any person with the net profit

or loss, if any, accruing on the open trades or contracts of such person.

(s) Net deficit. This term means the debit balance which would be obtained by combining the commodity margin balance of any person with the net profit or loss, if any, accruing on the open trades or contracts of such person.

(t) Open contracts. This term means contracts of purchase or sale of any commodity made by or for any person on or subject to the rules of a board of trade for future delivery during a specified month or delivery period which have not been fulfilled by delivery nor offset by other contracts of sale or purchase in the same commodity and delivery month.

(u) Person. This term includes individuals, associations, partnerships, corporations, and trusts.

(v) Act Administrator. This term means the Administrator of the Commodity Exchange Authority, United States Department of Agriculture, in his capacity as Administrator of the Commodity Exchange Act, or any officer or employee of the Commodity Exchange Authority to whom he has heretofore lawfully delegated or may hereafter lawfully delegate the authority to act in his stead.

(w) Secretary of Agriculture. This term means the Secretary of Agriculture or any person to whom authority has heretofore lawfully been delegated, or to whom authority may hereafter lawfully be delegated, to act in his stead.

(x) Floor trader. A member of a contract market who, on the exchange floor, executes a futures trade for his own account or an account controlled by him, or has such a trade made for him.

(Sec. 2, 42 Stat. 998, as amended; 7 U.S.C. 2). [13 F.R. 7834, Dec. 18, 1948, as amended at 32 F.R. 7593, May 24, 1967; 33 F.R. 6088, Apr. 20, 1968; 33 F.R. 17900, Dec. 3, 1968]

any facts or information regarding the business of any person which may come to the knowledge of such officer or employee through any inspection or examination of the reports or records of, or through any information given by, any person pursuant to the act or rules and regulations in this chapter, except as permitted by section 8 of the Commodity Exchange Act, as amended (7 U.S.C. 12), the regulations of the Secretary of Agriculture in 7 CFR Part 1, and the regulations in Part 140 of this chapter. [33 F.R. 14454, Sept. 26, 1968]

§ 1.6 Speculation in commodities by officers and employees prohibited.

No officer or employee of the Department of Agriculture engaged in the administration or enforcement of the Commodity Exchange Act, or having access to any confidential information obtained under authority of the act, shall have any interest directly or indirectly in any speculative transaction in any commodity for future delivery. REGISTRATION OF FUTURES COMMISSION MERCHANTS AND FLOOR BROKERS

§ 1.7 Registration required of futures commission merchants.

No person shall engage as futures commission merchant in the solicitation or acceptance of orders for the purchase or sale of any commodity for future delivery, or involving any contracts of sale of any commodity for future delivery, on or subject to the rules of any contract market, unless such person shall have been registered as futures commission merchant under the Commodity Exchange Act by the Secretary of Agriculture and such registration shall not have expired, been suspended, or been revoked. Such registration shall be required of every person engaged as described in this subpart irrespective of whether accounting records relating to such orders and trades and contracts resulting therefrom are maintained by other futures commission merchants to whom such orders are transmitted for execution or clearance. Any person who states on his application for registration that he intends to operate or is operating under the provisions of § 1.31a shall, if registered, be authorized to operate only in accord with the provisions of that regulation. [33 F.R. 14454, Sept. 26, 1968]

§ 1.8 Registration required of floor brokers.

No person shall act as floor broker in executing any orders for the purchase or sale of any commodity for future delivery, or involving any contracts of sale of any commodity for future delivery, on or subject to the rules of any contract market unless such person shall have been registered as floor broker under the Commodity Exchange Act by the Secretary of Agriculture and such registration shall not have expired, been suspended, or been revoked.

[33 F.R. 14454, Sept. 26, 1968]

§ 1.9 Registration as floor broker not included in registration as futures commission merchant and vice versa. Registration as futures commission merchant shall not include registration as floor broker nor shall registration as floor broker include registration as futures commission merchant.

§ 1.10

Applications for registration and financial reports.

(a) Application for registration as futures commission merchant shall be made on Form 1-R. Application for registration as floor broker shall be made on Form 2-R. Each application shall be executed and filed in accordance with the instructions accompanying the prescribed form.

(b) Except as provided in paragraph (e) of this section, every person who files an application for registration as futures commission merchant, and who is not so registered at the time of such filing, shall, concurrently with the filing of such applications, file on Form 1-FR a report of the applicant's financial condition as of a date not more than 3 months prior to the date on which such report is filed. Each such financial report shall be executed in accordance with the instructions accompanying the prescribed form.

(c) Except as provided in paragraphs (d) and (e) of this section, every person registered as futures commission merchant under the Act shall file on Form 1-FR a report of his financial conditions as of each June 30 and each December 31, unless the registrant's records are kept on a fiscal year basis, in which case he shall file on Form 1-FR such a report as of the midpoint and the end of each fiscal year. Each such report shall be executed and filed in accordance with the instructions accompanying the prescribed

(h) Contract market. This term means a board of trade designated by the Secretary of Agriculture as a contract market under the Commodity Exchange Act.

(i) Contract of sale. This term includes sales, purchases, agreements of sale or purchase, and agreements to sell or purchase.

(j) Controlled account. An account shall be deemed to be controlled by a person if such person by power of attorney or otherwise actually directs trading for such account.

(k) Customer; commodity customer. These terms have the same meaning and refer to a customer trading in any commodity named in the definition of commodity in paragraph (e) of this section.

(1) Delivery month. This term means the month of delivery specified in a contract of sale of any commodity for future delivery.

(m) [Reserved]

(n) Floor broker. This term means any person who, in or surrounding any pit, ring, post, or other place provided by a contract market for the meeting of persons similarly engaged, shall purchase or sell for any other person any commodity for future delivery on or subject to the rules of any contract market.

(0) Future delivery. This term does not include any sale of a cash commodity for deferred shipment or delivery.

(p) Futures commission merchant. This term means individuals, associations, partnerships, corporations, and trusts engaged in soliciting or in accepting orders for the purchase or sale of any commodity for future delivery on or subject to the rules of any contract market and that, in or in connection with such solicitation or acceptance of orders, accepts any money, securities, or property (or extends credit in lieu thereof) to margin, guarantee, or secure any trades or contracts that result or may result therefrom.

(q) Member of a contract market. This term means and includes individuals, associations, partnerships, corporations, and trusts owning or holding membership in, or admitted to membership representation on, a contract market or given members' trading privileges thereon.

(r) Net equity. This term means the credit balance which would be obtained by combining the commodity margin balance of any person with the net profit

or loss, if any, accruing on the open trades or contracts of such person.

(s) Net deficit. This term means the debit balance which would be obtained by combining the commodity margin balance of any person with the net profit or loss, if any, accruing on the open trades or contracts of such person.

(t) Open contracts. This term means contracts of purchase or sale of any commodity made by or for any person on or subject to the rules of a board of trade for future delivery during a specified month or delivery period which have not been fulfilled by delivery nor offset by other contracts of sale or purchase in the same commodity and delivery month.

(u) Person. This term includes individuals, associations, partnerships, corporations, and trusts.

(v) Act Administrator. This term means the Administrator of the Commodity Exchange Authority, United States Department of Agriculture, in his capacity as Administrator of the Commodity Exchange Act, or any officer or employee of the Commodity Exchange Authority to whom he has heretofore lawfully delegated or may hereafter lawfully delegate the authority to act in his stead.

(w) Secretary of Agriculture. This term means the Secretary of Agriculture or any person to whom authority has heretofore lawfully been delegated, or to whom authority may hereafter lawfully be delegated, to act in his stead.

(x) Floor trader. A member of a contract market who, on the exchange floor, executes a futures trade for his own account or an account controlled by him, or has such a trade made for him.

(Sec. 2, 42 Stat. 998, as amended; 7 U.S.C. 2). [13 F.R. 7834, Dec. 18, 1948, as amended at 32 F.R. 7593, May 24, 1967; 33 F.R. 6088, Apr. 20, 1968; 33 F.R. 17900, Dec. 3, 1968]

ADMINISTRATION

§ 1.4 Duties to be performed by Act Administrator.

The Act Administrator shall perform for and under the supervision of the Secretary of Agriculture such duties as the Secretary may require in enforcing the provisions of the act and of the rules and regulations promulgated thereunder. § 1.5 Disclosure of information.

No officer or employee of the Department of Agriculture shall publish, divulge, or make known in any manner,

brokers.

§ 1.6 Speculation in commodities by officers and employees prohibited.

No officer or employee of the Department of Agriculture engaged in the administration or enforcement of the Commodity Exchange Act, or having access to any confidential information obtained under authority of the act, shall have any interest directly or indirectly in any speculative transaction in any commodity for future delivery. REGISTRATION OF FUTURES COMMISSION MERCHANTS AND FLOOR BROKERS

§ 1.7

Registration required of futures commission merchants.

No person shall engage as futures commission merchant in the solicitation or acceptance of orders for the purchase or sale of any commodity for future delivery, or involving any contracts of sale of any commodity for future delivery, on or subject to the rules of any contract market, unless such person shall have been registered as futures commission merchant under the Commodity Exchange Act by the Secretary of Agriculture and such registration shall not have expired, been suspended, or been revoked. Such registration shall be required of every person engaged as described in this subpart irrespective of whether accounting records relating to such orders and trades and contracts resulting therefrom are maintained by other futures commission merchants to whom such orders are transmitted for execution or clearance. Any person who states on his application for registration that he intends to operate or is operating under the provisions of § 1.31a shall, if registered, be authorized to operate only in accord with the provisions of that regulation. [33 F.R. 14454, Sept. 26, 1968]

No person shall act as floor broker in executing any orders for the purchase or sale of any commodity for future delivery, or involving any contracts of sale of any commodity for future delivery, on or subject to the rules of any contract market unless such person shall have been registered as floor broker under the Commodity Exchange Act by the Secretary of Agriculture and such registration shall not have expired, been suspended, or been revoked.

[33 F.R. 14454, Sept. 26, 1968]

§ 1.9 Registration as floor broker not included in registration as futures commission merchant and vice versa. Registration as futures commission merchant shall not include registration as floor broker nor shall registration as floor broker include registration as futures commission merchant. § 1.10

Applications for registration and financial reports.

as

(a) Application for registration futures commission merchant shall be made on Form 1-R. Application for registration as floor broker shall be made on Form 2-R. Each application shall be executed and filed in accordance with the instructions accompanying the prescribed form.

(b) Except as provided in paragraph (e) of this section, every person who files an application for registration as futures commission merchant, and who is not so registered at the time of such filing, shall, concurrently with the filing of such applications, file on Form 1-FR a report of the applicant's financial condition as of a date not more than 3 months prior to the date on which such report is filed. Each such financial report shall be executed in accordance with the instructions accompanying the prescribed form.

(c) Except as provided in paragraphs (d) and (e) of this section, every person registered as futures commission merchant under the Act shall file on Form 1-FR a report of his financial conditions as of each June 30 and each December 31, unless the registrant's records are kept on a fiscal year basis, in which case he shall file on Form 1-FR such a report as of the midpoint and the end of each fiscal year. Each such report shall be executed and filed in accordance with the instructions accompanying the prescribed