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Code · STATUTE-COMPILATIONS · Commodity Exchange Act · Sec. 5c

Sec. 5c. COMMON PROVISIONS APPLICABLE TO REGISTERED ENTITIES

1,480 words·~7 min read·/statute-compilations/comps-10309/sec-5c

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## SEC. 5c COMMON PROVISIONS APPLICABLE TO REGISTERED ENTITIES **[**[7 U.S.C. 7a–2](/us/usc/t7/s7a–2)**]** ###
(a)Acceptable Business Practices Under Core Principles ####
(1)In general Consistent with the purposes of this Act, the Commission may issue interpretations, or approve interpretations submitted to the Commission, of sections 5(d) and 5b(c)(2)26, to describe what would constitute an acceptable business practice under such sections. 26Sec. 13105(e) of the Food, Conservation, and Energy Act of 2008 (122 Stat. 2196) amended this paragraph by striking “5(b)(d)(2)” and inserting “5b(c)(2)”. Sec. 13203(i) of that Act (122 Stat. 2202) subsequently amended this paragraph by inserting “, and section 2(h)(7) with respect to significant price discovery contracts,” after “, and 5b(d)(2)”. Amendment executed to effectuate the probable intent of Congress. ####
(2)Effect of interpretation An interpretation issued under paragraph
(1)may provide the exclusive means for complying with each section described in paragraph (1). ###
(b)Delegation of Functions Under Core Principles ####
(1)In general A contract market, derivatives transaction execution facility, or electronic trading facility with respect to a significant price discovery contract may comply with any applicable core principle through delegation of any relevant function to a registered futures association or a registered entity that is not an electronic trading facility. ####
(2)Responsibility A contract market, derivatives transaction execution facility, or electronic trading facility that delegates a function under paragraph
(1)shall remain responsible for carrying out the function. ####
(3)Noncompliance If a contract market, derivatives transaction execution facility, or electronic trading facility that delegates a function under paragraph
(1)becomes aware that a delegated function is not being performed as required under this Act, the contract market, derivatives transaction execution facility, or electronic trading facility shall promptly take steps to address the noncompliance. ### (c)27 New Contracts, New Rules, and Rule Amendments 27The amendments made to subsec.
(c)by secs. 717(d) and 721(e)(7) of P.L. 111–203 (124 Stat. 1652, 1671) were eliminated when this subsection was amended in its entirety by sec. 745(b) of P.L. 111–203 (124 Stat. 1747). ####
(1)In general A registered entity may elect to list for trading or accept for clearing any new contract, or other instrument, or may elect to approve and implement any new rule or rule amendment, by providing to the Commission (and the Secretary of the Treasury, in the case of a contract of sale of a government security for future delivery (or option on such a contract) or a rule or rule amendment specifically related to such a contract) a written certification that the new contract or instrument or clearing of the new contract or instrument, new rule, or rule amendment complies with this Act (including regulations under this Act). ####
(2)Rule review The new rule or rule amendment described in paragraph
(1)shall become effective, pursuant to the certification of the registered entity and notice of such certification to its members (in a manner to be determined by the Commission), on the date that is 10 business days after the date on which the Commission receives the certification (or such shorter period as determined by the Commission by rule or regulation) unless the Commission notifies the registered entity within such time that it is staying the certification because there exist novel or complex issues that require additional time to analyze, an inadequate explanation by the submitting registered entity, or a potential inconsistency with this Act (including regulations under this Act). ####
(3)Stay of certification for rules #####
(A)A notification by the Commission pursuant to paragraph
(2)shall stay the certification of the new rule or rule amendment for up to an additional 90 days from the date of the notification. #####
(B)A rule or rule amendment subject to a stay pursuant to subparagraph
(A)shall become effective, pursuant to the certification of the registered entity, at the expiration of the period described in subparagraph
(A)unless the Commission— ######
(i)withdraws the stay prior to that time; or ######
(ii)notifies the registered entity during such period that it objects to the proposed certification on the grounds that it is inconsistent with this Act (including regulations under this Act). #####
(C)The Commission shall provide a not less than 30-day public comment period, within the 90-day period in which the stay is in effect as described in subparagraph (A), whenever the Commission reviews a rule or rule amendment pursuant to a notification by the Commission under this paragraph. ####
(4)Prior approval #####
(A)In general A registered entity may request that the Commission grant prior approval to any new contract or other instrument, new rule, or rule amendment. #####
(B)Prior approval required Notwithstanding any other provision of this section, a designated contract market shall submit to the Commission for prior approval each rule amendment that materially changes the terms and conditions, as determined by the Commission, in any contract of sale for future delivery of a commodity specifically enumerated in section 1a(10) (or any option thereon) traded through its facilities if the rule amendment applies to contracts and delivery months which have already been listed for trading and have open interest. #####
(C)Deadline If prior approval is requested under subparagraph (A), the Commission shall take final action on the request not later than 90 days after submission of the request, unless the person submitting the request agrees to an extension of the time limitation established under this subparagraph. ####
(5)Approval #####
(A)Rules The Commission shall approve a new rule, or rule amendment, of a registered entity unless the Commission finds that the new rule, or rule amendment, is inconsistent with this subtitle (including regulations). #####
(B)Contracts and instruments The Commission shall approve a new contract or other instrument unless the Commission finds that the new contract or other instrument would violate this Act (including regulations). #####
(C)Special rule for review and approval of event contracts and swaps contracts ######
(i)Event contracts In connection with the listing of agreements, contracts, transactions, or swaps in excluded commodities that are based upon the occurrence, extent of an occurrence, or contingency (other than a change in the price, rate, value, or levels of a commodity described in section 1a(2)(i)), by a designated contract market or swap execution facility, the Commission may determine that such agreements, contracts, or transactions are contrary to the public interest if the agreements, contracts, or transactions involve— ######
(I)activity that is unlawful under any Federal or State law; ######
(II)terrorism; ######
(III)assassination; ######
(IV)war; ######
(V)gaming; or ######
(VI)other similar activity determined by the Commission, by rule or regulation, to be contrary to the public interest. ######
(ii)Prohibition No agreement, contract, or transaction determined by the Commission to be contrary to the public interest under clause
(i)may be listed or made available for clearing or trading on or through a registered entity. ######
(iii)Swaps contracts ######
(I)In general In connection with the listing of a swap for clearing by a derivatives clearing organization, the Commission shall determine, upon request or on its own motion, the initial eligibility, or the continuing qualification, of a derivatives clearing organization to clear such a swap under those criteria, conditions, or rules that the Commission, in its discretion, determines. ######
(II)Requirements Any such criteria, conditions, or rules shall consider— ######
(aa)the financial integrity of the derivatives clearing organization; and ######
(bb)any other factors which the Commission determines may be appropriate. ######
(iv)Deadline The Commission shall take final action under clauses
(i)and
(ii)in not later than 90 days from the commencement of its review unless the party seeking to offer the contract or swap agrees to an extension of this time limitation. **[**Subsection
(d)was repealed by Pub. L. 111–203, title VII, §745(c), July 21, 2010, 124 Stat. 1737**]** ###
(e)Reservation of Emergency Authority Nothing in this section shall limit or in any way affect the emergency powers of the Commission provided in section 8a(9). ###
(f)Consistent with this Act, each designated contract market and registered derivatives transaction execution facility shall issue such rules as are necessary to avoid duplicative or conflicting rules applicable to any futures commission merchant registered with the Commission pursuant to section 4f(a) of this Act (except paragraph
(2)thereof), that is also registered with the Securities and Exchange Commission pursuant to section 15(b) of the Securities Exchange Act of 1934 (except paragraph
(11)thereof) with respect to the application of— ####
(1)rules of such designated contract market or registered derivatives transaction execution facility of the type specified in section 4d(e) involving security futures products; and ####
(2)similar rules of national securities associations registered pursuant to section 15A(a) of the Securities Exchange Act of 1934 and national securities exchanges registered pursuant to section 6(g) of such Act involving security futures products.
Connections7 off-index
7 references not yet in our index
  • 7 USC 7a–2
  • 122 Stat. 2196
  • 122 Stat. 2202
  • 124 Stat. 1652
  • 124 Stat. 1747
  • Pub. L. 111-203
  • 124 Stat. 1737
Citation graph
cites case law
Sec. 5c
COMMON PROVISIONS APPLICABLE TO REGISTERED ENTITIES
Cite7 USC 7a–2
Stat.122 Stat. 2196
Stat.122 Stat. 2202
Stat.124 Stat. 1652
Stat.124 Stat. 1747
Cites 7 · showing 5Cited by 0 across 0 sources
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