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Special calls for information from futures commission merchants,
foreign brokers, and members of contract markets

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1.37

1.8

1.9

Registration required of floor brokers. Registration as one type of person not included in registration as any other type of person.

1.38

1.39

1.10

Application for registration and filnancial reports.

1.10a [Reserved]

1.10b Applications for registration of associated persons.

1.40

1.10c Applications for registration of commodity trading advisors.

1.41

1.10d Applications for registration of commodity pool operators.

1.11

1.13

Registration fees; form of remittance. Deposit of registration fee; fee not subject to refund after registration.

1.14

Deficiencies, inaccuracies,

and

changes, to be reported.

1.15

Changes requiring new registration.

1.17

1.18

Minimum financial requirements. Records for and relating to financial reporting and monthly computation.

1.42

1.43

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Customer's name, address, and oc-
cupation recorded; record of guar-
antor or controller of account.
Execution of transactions.
Simultaneous buying and selling or-
ders of different principals; execu-
tion of, for and between principals.
MISCELLANEOUS

Crop, market information letters, re-
ports; copies required.
Contract market rules, submission of
rules to Commission, exemption of
temporary emergency rules and cer-
tain operational and Administrative
rules, emergencies.

1.41a Delegation of authority to the Executive Director and the Director of the Division of Trading and Markets.

1.44

Delivery notice; filing of copy. Information required concerning warehouses, depositories, and other similar entities.

Records and reports of warehouses, depositories, and other similar entities; visitation of premises. Delivery of commodities conforming to United States standards. Application and closing out of offsetting long and short positions. Hedging anticipated requirements for processing or manufacturing or livestock and poultry production under § 1.3 (z) (4) of the regulations under the Act.

Filing of information by contract markets.

DEFINITIONS

§ 1.1 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 include the day on which shall take place the act of which notice is given.

(c) Clearing member. This term 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, 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, livestock products, and frozen concentrated orange juice, and all other goods and articles, except onions as provided in Pub. L. 85-839, and all services, rights and interests in which contracts for future delivery are presently or in the future dealt in.

(Sec. 2(a) (1), 88 Stat. 1395; 7 U.S.C. 2(1))

(f) Commodity Exchange Act; the Act. These terms mean the Commodity Exchange Act, as amended, 7 U.S.C. 1 et seq.

(g) [Reserved]

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

(1) 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 herein: Provided, however, An owner or holder of a proprietary account as defined in paragraph (y) of this section shall not be deemed to be a customer within the meaning of section 4d of the Act, the regulations that implement sections 4d and 4f of the Act and § 1.35, and such an owner or holder of such a proprietary account shall otherwise be deemed to be a customer within the meaning of the Act and §§ 1.37 and 1.46 and all other sections of these rules, regulations and orders which do not implement sections 4d and 4f.

(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 (1) 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 and (2) shall include any person required to register as a futures commission merchant under the Act by virtue of Part 32 of this chapter.

(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) [Reserved]

(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 future trade for his own account or an account controlled by him, or has such a trade made for him.

(y) Proprietary account. This term shall mean a commodity futures trading account carried on the books and records of an individual, a partnership, corporation or other type association, (1) for one of the following persons, or (2) which is partially or jointly owned by one of the following persons:

(i) Such individual himself, or such partnership, corporation or association itself;

(ii) In the case of a partnership, a general partner in such partnership;

(iii) In the case of a limited partnership, a limited or special partner in such partnership whose duties include:

(A) The management of the partnership business or any part thereof,

(B) The handling of trades and/or funds of customers of such partnership,

(C) The keeping of records pertaining to trades and/or funds of customers of such partnership, or

(D) The signing or co-signing of checks or drafts on behalf of such partnership;

(iv) In the case of a corporation or association, an officer, director or owner of ten percent or more of the capital stock, of such organization;

(v) An employee of such individual, partnership, corporation or association whose duties include:

(A) The management of the business of such individual, partnership, corporation or association or any part thereof,

(B) The handling of trades and/or funds of customers of such individual, partnership, corporation or association.

(C) The keeping of records pertaining to trades and/or funds of customers of such individual, partnership, corporation or association, or

(D) The signing or co-signing of checks or drafts on behalf of such individual, partnership, corporation or association;

(vi) A spouse or minor dependent living in the same household of any of the foregoing persons;

(vii) A business affiliate that directly or indirectly controls such individual, partnership, corporation or association.

(viii) A business affiliate that, directly or indirectly is controlled by or is under common control with, such individual, partnership, corporation or association.

Provided, however, That an account owned by any shareholder or member of a cooperative association of producers, within the meaning of sections 5(e) and 6(a) of the Act, which association is registered as a futures commission merchant and carries such account on its records, shall be deemed to be a customer's account and not a proprietary account of such association, unless the shareholder or member is an officer, director or manager of the association.

(z) Bona fide hedging transactions or positions. These shall mean sales of, or short positions in, any commodity for future delivery on or subject to the rules of any contract market made or held by any persons to the extent that such sales or short positions are offset in quantity by the ownership or fixed-price purchase of the same cash commodity by the same person or, conversely, purchases of, or long positions in, any commodity for future delivery on or subject to the rules of any contract market made or held by any person to the extent that such purchases or long positions are offset by fixed-price sales of the same cash commodity by the same person. In addition, there shall be included in the amount of any commodity which may be hedged by any person

(1) With respect to agricultural commodities the amount of such commodity such person is raising, or in good faith intends or expects to raise, within the next twelve months (eighteen months for cane sugar) on land which such person owns or leases;

(2) Any amount of such commodity the sale of which for future delivery would be a reasonable hedge against any product or by-product of such commodity owned or purchased at a fixed-price by such person or the purchase of which for future delivery would be a reasonable hedge against the fixed-price sale of any product or by-product of such commodity by such person;

(3) If such commodity is a product or by-product of another commodity, an amount of such product or by-product the sale of which for future delivery would be a reasonable hedge against the ownership or fixed-price purchase by such person of such other commodity of which it is a product or by-product;

(4) An amount of such commodity the purchase of which for future delivery shall not exceed:

90-062-77——-2

(1) Such person's unfilled anticipated requirements for processing or manufacturing;

(ii) The bushel value equivalent of corn reflecting such person's unfilled anticipated requirements for seed corn or sweet corn processing;

(iii) The wheat equivalent of such person's unfilled anticipated requirements of flour for baking;

(iv) The corn equivalent of such person's unfilled anticipated requirements of dry corn milling products for use in further processing or manufacturing;

(v) Such person's unfilled anticipated feeding requirements of corn, wheat, oats, barley, flaxseed, grain sorghum, rye, or soybean meal for the feeding of livestock or poultry or both; during a specified operating period not in excess of one year. Transactions and positions shall not be classified as hedging unless their bona fide purpose is to offset price risks incidental to commercial cash or spot operations, and such positions are established and liquidated in an orderly manner and in accordance with sound commercial practices in conformity with such regulations as may be prescribed pursuant to the Act, as amended.

(aa) Associated person. This term means any person who (as provided in section 4k of the Act) is associated with any futures commission merchant or with any agent of a futures commission merchant as a partner, officer, or employee (or any person occupying a similar status or performing similar functions), in any capacity which involves (1) the solicitation or acceptance of customers' orders (other than in a clerical capacity) or (2) the supervision of any person or persons so engaged.

(bb) Commodity trading advisor. This term means any person who, for compensation or profit, engages in the business of advising others, either directly or through publications or writings, as to the value of commodities or as to the advisability of trading in any commodity for future delivery on or subject to the rules of any contract market, or who for compensation or profit, and as part of a regular business, issues or promulgates analyses or reports concerning commodities; but does not include (1) any bank or trust company, (2) any newspaper reporter, newspaper columnist, newspaper editor, lawyer, accountant, or teacher, (3) any floor broker or futures commission merchant, (4) the publisher of any bona fide newspaper, news magazine, or

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