51-23-05. Exempt transactions.
774 words·~4 min read·
/nd/title-51/chapter-51-23-commodities-transactions/51-23-05·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
1. The prohibitions in section 51-23-03 do not apply to the following:
a. An account, agreement, or transaction within the exclusive jurisdiction of the
commodity futures trading commission as granted under the Commodity
Exchange Act.
b. A commodity contract for the purchase of one or more precious metals which
requires, and under which the purchaser receives, within twenty-eight calendar
days from the payment in good funds of any portion of the purchase price,
physical delivery of the quantity of the precious metals purchased by such
payment, provided that, for purposes of this subdivision, physical delivery must
be deemed to have occurred if, within such twenty-eight-day period, such quantity
of precious metals purchased by such payment is delivered, whether in
specifically segregated or fungible bulk form, into the possession of a depository,
other than the seller, which is either:
(1)A financial institution;
(2)A depository the warehouse receipts of which are recognized for delivery
purposes for any commodity on a contract market designated by the
commodity futures trading commission;
(3)A storage facility licensed or regulated by the United States or any agency
thereof; or
(4)A depository designated by the commissioner;
and such depository, or other person which itself qualifies as a depository as
aforesaid, issues and the purchaser receives, a certificate, document of title,
confirmation, or other instrument evidencing that such quantity of precious metals
has been delivered to the depository and is being and will continue to be held by
the depository on the purchaser's behalf, free and clear of all liens and
encumbrances, other than liens of the purchaser, tax liens, liens agreed to by the
purchaser, or liens of the depository for fees and expenses, which have
previously been disclosed to the purchaser.
c. A commodity contract solely between persons engaged in producing, processing,
using commercially or handling as merchants, each commodity subject thereto, or
any byproduct thereof.
d. A commodity contract under which the offeree or the purchaser is a person
referred to in section 51-23-04, an insurance company, or an investment
company as defined in the Investment Company Act of 1940. 2. The commissioner may issue rules or orders prescribing the terms and conditions of
all transactions and contracts covered by the provisions of this chapter which are not
within the exclusive jurisdiction of the commodity futures trading commission as
granted by the Commodity Exchange Act, exempting any person or transaction from
any provision of this chapter conditionally or unconditionally and otherwise
implementing the provisions of this chapter for the protection of purchasers and sellers
of commodities.
51-23-06. Unlawful commodity activities. 1. No person may engage in a trade or business or otherwise act as a commodity
merchant unless such person:
a. Is registered or temporarily licensed with the commodity futures trading
commission for each activity constituting such person as a commodity merchant
and such registration or temporary license shall not have expired, nor been
suspended nor revoked; or
b. Is exempt from such registration by virtue of the Commodity Exchange Act or of a
CFTC rule. 2. No board of trade may trade, or provide a place for the trading of, any commodity
contract or commodity option required to be traded on or subject to the rules of a
contract market designated by the commodity futures trading commission unless such
board of trade has been so designated for such commodity contract or commodity
option and such designation has not been vacated, suspended, or revoked.
51-23-07. Fraudulent conduct. No person may, directly or indirectly:
1. Cheat or defraud, or attempt to cheat or defraud, any other person or employ any
device, scheme, or artifice to defraud any other person;
2. Make any false report, enter any false record, or make any untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements
made, in the light of the circumstances under which they were made, not misleading;
3. Engage in any transaction, act, practice, or course of business, including, without
limitation, any form of advertising or solicitation, which operates or would operate as a
fraud or deceit upon any person; or
4. Misappropriate or convert the funds, security, or property of any other person; in or in connection with the purchase or sale of, the offer to sell, the offer to purchase, the offer to enter into, or the entry into of, any commodity contract or commodity option subject to the provisions of section 51-23-03 or 51-23-04, or subdivision b or d of subsection 1 of section 51-23-05. No action may be brought under this section by the commissioner after six years from the date of the alleged violation.