§ 6d. — Dealing by unregistered futures commission merchants or introducing brokers prohibited; duties in handling customer receipts; rules to avoid duplicative regulations.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 7USC6d]
TITLE 7--AGRICULTURE
CHAPTER 1--COMMODITY EXCHANGES
Sec. 6d. Dealing by unregistered futures commission merchants or
introducing brokers prohibited; duties in handling customer
receipts; rules to avoid duplicative regulations
(a) Registration requirements; duties of merchants in handling customer
receipts
It shall be unlawful for any person to engage as futures commission
merchant or introducing broker in soliciting orders or accepting 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 or derivatives
transaction execution facility unless--
(1) such person shall have registered, under this chapter, with
the Commission as such futures commission merchant or introducing
broker and such registration shall not have expired nor been
suspended nor revoked; and
(2) such person shall, if a futures commission merchant, whether
a member or nonmember of a contract market or derivatives
transaction execution facility, treat and deal with all money,
securities, and property received by such person to margin,
guarantee, or secure the trades or contracts of any customer of such
person, or accruing to such customer as the result of such trades or
contracts, as belonging to such customer. Such money, securities,
and property shall be separately accounted for and shall not be
commingled with the funds of such commission merchant or be used to
margin or guarantee the trades or contracts, or to secure or extend
the credit, of any customer or person other than the one for whom
the same are held: Provided, however, That such money, securities,
and property of the customers of such futures commission merchant
may, for convenience, be commingled and deposited in the same
account or accounts with any bank or trust company or with the
clearing house organization of such contract market or derivatives
transaction execution facility, and that such share thereof as in
the normal course of business shall be necessary to margin,
guarantee, secure, transfer, adjust, or settle the contracts or
trades of such customers, or resulting market positions, with the
clearinghouse organization of such contract market or derivatives
transaction execution facility or with any member of such contract
market or derivatives transaction execution facility, may be
withdrawn and applied to such purposes, including the payment of
commissions, brokerage, interest, taxes, storage, and other charges,
lawfully accruing in connection with such contracts and trades:
Provided further, That in accordance with such terms and conditions
as the Commission may prescribe by rule, regulation, or order, such
money, securities, and property of the customers of such futures
commission merchant may be commingled and deposited as provided in
this section with any other money, securities, and property received
by such futures commission merchant and required by the Commission
to be separately accounted for and treated and dealt with as
belonging to the customers of such futures commission merchant:
Provided further, That such money may be invested in obligations of
the United States, in general obligations of any State or of any
political subdivision thereof, and in obligations fully guaranteed
as to principal and interest by the United States, such investments
to be made in accordance with such rules and regulations and subject
to such conditions as the Commission may prescribe.
(b) Duties of clearing agencies, depositories, and others in handling
customer receipts
It shall be unlawful for any person, including but not limited to
any clearing agency of a contract market or derivatives transaction
execution facility and any depository, that has received any money,
securities, or property for deposit in a separate account as provided in
paragraph (2) of this section,\1\ to hold, dispose of, or use any such
money, securities, or property as belonging to the depositing futures
commission merchant or any person other than the customers of such
futures commission merchant.
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\1\ So in original. Probably means subsection (a)(2) of this
section.
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(c) Rules to avoid duplicative regulation of dual registrants
Consistent with this chapter, the Commission, in consultation with
the Securities and Exchange Commission, shall issue such rules,
regulations, or orders as are necessary to avoid duplicative or
conflicting regulations applicable to any futures commission merchant
registered with the Commission pursuant to section 6f(a) of this title
(except paragraph (2) thereof), that is also registered with the
Securities and Exchange Commission pursuant to section 78o(b) of title
15 (except paragraph (11) thereof), involving the application of--
(1) section 78h, section 78o(c)(3), and section 78q of title 15
and the rules and regulations thereunder related to the treatment of
customer funds, securities, or property, maintenance of books and
records, financial reporting or other financial responsibility rules
(as defined in section 78c(a)(40) of title 15), involving security
futures products; and
(2) similar provisions of this chapter and the rules and
regulations thereunder involving security futures products.
(Sept. 21, 1922, ch. 369, Sec. 4d, as added June 15, 1936, ch. 545,
Sec. 5, 49 Stat. 1494; amended Pub. L. 90-258, Sec. 6, Feb. 19, 1968, 82
Stat. 27; Pub. L. 93-463, title I, Sec. 103(a), Oct. 23, 1974, 88 Stat.
1392; Pub. L. 95-405, Sec. 4, Sept. 30, 1978, 92 Stat. 869; Pub. L. 97-
444, title II, Sec. 207, Jan. 11, 1983, 96 Stat. 2302; Pub. L. 106-554,
Sec. 1(a)(5) [title I, Sec. 123(a)(6), title II, Sec. 251(f)], Dec. 21,
2000, 114 Stat. 2763, 2763A-407, 2763A-443.)
Amendments
2000--Pub. L. 106-554, Sec. 1(a)(5) [title II, Sec. 251(f)],
designated first undesignated par. as subsec. (a), designated second
undesignated par. as subsec. (b), and added subsec. (c).
Pub. L. 106-554, Sec. 1(a)(5) [title I, Sec. 123(a)(6)], inserted
``or derivatives transaction execution facility'' after ``contract
market'' wherever appearing.
1983--Pub. L. 97-444, Sec. 207(1), inserted reference to introducing
brokers in provisions preceding par. (1).
Par. (1). Pub. L. 97-444, Sec. 207(2), inserted ``or introducing
broker'' after ``futures commission merchant''.
Par. (2). Pub. L. 97-444, Sec. 207(3), inserted ``if a futures
commission merchant,'' after ``such person shall,''.
1978--Pub. L. 95-405 in par. (2) inserted provisions authorizing
Commission to prescribe terms and conditions under which funds and
property commingled and deposited as permitted by par. (2) may be
commingled and deposited with other funds and property received by a
futures commission merchant and required by Commission to be separately
accounted for and treated as belonging to its customers.
1974--Pub. L. 93-463 substituted ``Commission'' for ``Secretary of
Agriculture'' in pars. (1) and (2).
1968--Pub. L. 90-258 struck out from second proviso of first par.
authorization for investment of customer funds in investment securities
of the kind national banking associations may buy or in loans secured by
negotiable warehouse receipts conveying or securing title to readily
marketable commodities to the extent of the current loan value of such
receipts and added second par., making it unlawful for any person,
including a clearing agency of a contract market or any depository, to
treat customer funds as belonging to any person other than the customer,
respectively.
Effective Date of 1983 Amendment
Amendment by Pub. L. 97-444 effective 120 days after Jan. 11, 1983,
or such earlier date as the Commission shall prescribe by regulation,
see section 239 of Pub. L. 97-444, set out as a note under section 2 of
this title.
Effective Date of 1978 Amendment
Amendment by Pub. L. 95-405 effective Oct. 1, 1978, see section 28
of Pub. L. 95-405, set out as a note under section 2 of this title.
Effective Date of 1974 Amendment
For effective date of amendment by Pub. L. 93-463, see section 418
of Pub. L. 93-463, set out as a note under section 2 of this title.
Effective Date of 1968 Amendment
Amendment by Pub. L. 90-258 effective 120 days after Feb. 19, 1968,
see section 28 of Pub. L. 90-258, set out as a note under section 2 of
this title.
Effective Date
For effective date of section, see section 13 of act June 15, 1936,
set out as an Effective Date of 1936 Amendment note under section 1 of
this title.
Section Referred to in Other Sections
This section is referred to in sections 6f, 6k, 7a-2, 21 of this
title.
