§ 7a-2. — Common provisions applicable to registered entities.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 7USC7a-2]
TITLE 7--AGRICULTURE
CHAPTER 1--COMMODITY EXCHANGES
Sec. 7a-2. Common provisions applicable to registered entities
(a) Acceptable business practices under core principles
(1) In general
Consistent with the purposes of this chapter, the Commission may
issue interpretations, or approve interpretations submitted to the
Commission, of sections 7(d), 7a(d), and 7a-1(d)(2) \1\ of this
title to describe what would constitute an acceptable business
practice under such sections.
---------------------------------------------------------------------------
\1\ So in original. Reference to section 7a-1(d)(2) probably should
be a reference to section 7a-1(c)(2).
---------------------------------------------------------------------------
(2) Effect of interpretation
An interpretation issued under paragraph (1) shall not provide
the exclusive means for complying with such sections.
(b) Delegation of functions under core principles
(1) In general
A contract market or derivatives transaction execution facility
may comply with any applicable core principle through delegation of
any relevant function to a registered futures association or another
registered entity.
(2) Responsibility
A contract market or derivatives transaction execution facility
that delegates a function under paragraph (1) shall remain
responsible for carrying out the function.
(3) Noncompliance
If a contract market or derivatives transaction execution
facility that delegates a function under paragraph (1) becomes aware
that a delegated function is not being performed as required under
this chapter, the contract market or derivatives transaction
execution facility shall promptly take steps to address the
noncompliance.
(c) New contracts, new rules, and rule amendments
(1) In general
Subject to paragraph (2), 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 chapter (including regulations under
this chapter).
(2) 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(4) of this title (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.
(3) Approval
The Commission shall approve any such new contract or
instrument, new rule, or rule amendment unless the Commission finds
that the new contract or instrument, new rule, or rule amendment
would violate this chapter.
(d) Violation of core principles
(1) In general
If the Commission determines, on the basis of substantial
evidence, that a registered entity is violating any applicable core
principle specified in section 7(d), 7a(d), or 7a-1(d)(2) \1\ of
this title, the Commission shall--
(A) notify the registered entity in writing of the
determination; and
(B) afford the registered entity an opportunity to make
appropriate changes to bring the registered entity into
compliance with the core principles.
(2) Failure to make changes
If, not later than 30 days after receiving a notification under
paragraph (1), a registered entity fails to make changes that, in
the opinion of the Commission, are necessary to comply with the core
principles, the Commission may take further action in accordance
with this chapter.
(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 12a(9) of this
title.
(f) Rules to avoid duplicative regulation of dual registrants
Consistent with this chapter, 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 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) 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 6d(3) of this title involving security futures products; and
(2) similar rules of national securities associations registered
pursuant to section 78o-3(a) of title 15 and national securities
exchanges registered pursuant to section 78f(g) of title 15
involving security futures products.
(Sept. 21, 1922, ch. 369, Sec. 5c, as added and amended Pub. L. 106-554,
Sec. 1(a)(5) [title I, Sec. 113, title II, Sec. 251(h)], Dec. 21, 2000,
114 Stat. 2763, 2763A-399, 2763A-444.)
Amendments
2000--Subsec. (f). Pub. L. 106-554, Sec. 1(a)(5) [title II,
Sec. 251(h)], added subsec. (f).
Section Referred to in Other Sections
This section is referred to in sections 7b-1, 13a, 25 of this title;
title 15 section 78s.
