§ 7a-3. — Exempt boards of trade.
[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-3]
TITLE 7--AGRICULTURE
CHAPTER 1--COMMODITY EXCHANGES
Sec. 7a-3. Exempt boards of trade
(a) Election to register with the Commission
A board of trade that meets the requirements of subsection (b) of
this section may operate as an exempt board of trade on receipt from the
board of trade of a notice, provided in such manner as the Commission
may by rule or regulation prescribe, that the board of trade elects to
operate as an exempt board of trade. Except as otherwise provided in
this section, no provision of this chapter (other than subparagraphs (C)
and (D) of sections 2(a)(1) and 16(e)(2)(B) of this title) shall apply
with respect to a contract of sale of a commodity for future delivery
(or option on such a contract) traded on or through the facilities of an
exempt board of trade.
(b) Criteria for exemption
To qualify for an exemption under subsection (a) of this section, a
board of trade shall limit trading on or through the facilities of the
board of trade to contracts of sale of a commodity for future delivery
(or options on such contracts or on a commodity)--
(1) for which the underlying commodity has--
(A) a nearly inexhaustible deliverable supply;
(B) a deliverable supply that is sufficiently large, and a
cash market sufficiently liquid, to render any contract traded
on the commodity highly unlikely to be susceptible to the threat
of manipulation; or
(C) no cash market;
(2) that are entered into only between persons that are eligible
contract participants at the time at which the persons enter into
the contract; and
(3) that are not contracts of sale (or options on such a
contract or on a commodity) for future delivery of any security,
including any group or index of securities or any interest in, or
based on the value of, any security or any group or index of
securities.
(c) Antimanipulation requirements
A party to a contract of sale of a commodity for future delivery (or
option on such a contract or on a commodity) that is traded on an exempt
board of trade shall be subject to sections 6b, 6c(b), 6o, 9, 15, and
13(a)(2) of this title, and the Commission shall enforce those
provisions with respect to any such trading.
(d) Price discovery
If the Commission finds that an exempt board of trade is a
significant source of price discovery for transactions in the cash
market for the commodity underlying any contract, agreement, or
transaction traded on or through the facilities of the board of trade,
the board of trade shall disseminate publicly on a daily basis trading
volume, opening and closing price ranges, open interest, and other
trading data as appropriate to the market.
(e) Jurisdiction
The Commission shall have exclusive jurisdiction over any account,
agreement, contract, or transaction involving a contract of sale of a
commodity for future delivery, or option on such a contract or on a
commodity, to the extent that the account, agreement, contract, or
transaction is traded on an exempt board of trade.
(f) Subsidiaries
A board of trade that is designated as a contract market or
registered as a derivatives transaction execution facility may operate
an exempt board of trade by establishing a separate subsidiary or other
legal entity and otherwise satisfying the requirements of this section.
(g) Misrepresentation of status
An exempt board of trade that meets the requirements of subsection
(b) of this section shall not represent to any person that the board of
trade is registered with, or designated, recognized, licensed, or
approved by the Commission.
(Sept. 21, 1922, ch. 369, Sec. 5d, as added Pub. L. 106-554,
Sec. 1(a)(5) [title I, Sec. 114], Dec. 21, 2000, 114 Stat. 2763, 2763A-
401.)
Section Referred to in Other Sections
This section is referred to in section 2 of this title.
