7 U.S.C. § 12a : US Code - Section 12A: Registration of commodity dealers and associated persons; regulation of registered entities

Search 7 U.S.C. § 12a : US Code - Section 12A: Registration of commodity dealers and associated persons; regulation of registered entities

The Commission is authorized - 
(1) to register futures commission merchants, associated
persons of futures commission merchants, introducing brokers,
associated persons of introducing brokers, commodity trading
advisors, associated persons of commodity trading advisors,
commodity pool operators, associated persons of commodity pool
operators, floor brokers, and floor traders upon application in
accordance with rules and regulations and in the form and manner
to be prescribed by the Commission, which may require the
applicant, and such persons associated with the applicant as the
Commission may specify, to be fingerprinted and to submit, or
cause to be submitted, such fingerprints to the Attorney General
for identification and appropriate processing, and in connection
therewith to fix and establish from time to time reasonable fees
and charges for registrations and renewals thereof: Provided,
That notwithstanding any provision of this chapter, the
Commission may grant a temporary license to any applicant for
registration with the Commission pursuant to such rules,
regulations, or orders as the Commission may adopt, except that
the term of any such temporary license shall not exceed six
months from the date of its issuance;
(2) upon notice, but without a hearing and pursuant to such
rules, regulations, or orders as the Commission may adopt, to
refuse to register, to register conditionally, or to suspend or
place restrictions upon the registration of, any person and with
such a hearing as may be appropriate to revoke the registration
of any person - 
(A) if a prior registration of such person in any capacity
has been suspended (and the period of such suspension has not
expired) or has been revoked;
(B) if registration of such person in any capacity has been
refused under the provisions of paragraph (3) of this section
within five years preceding the filing of the application for
registration or at any time thereafter;
(C) if such person is permanently or temporarily enjoined by
order, judgment, or decree of any court of competent
jurisdiction (except that registration may not be revoked
solely on the basis of such temporary order, judgment, or
decree), including an order entered pursuant to an agreement of
settlement to which the Commission or any Federal or State
agency or other governmental body is a party, from (i) acting
as a futures commission merchant, introducing broker, floor
broker, floor trader, commodity trading advisor, commodity pool
operator, associated person of any registrant under this
chapter, securities broker, securities dealer, municipal
securities broker, municipal securities dealer, transfer agent,
clearing agency, securities information processor, investment
adviser, investment company, or affiliated person or employee
of any of the foregoing or (ii) engaging in or continuing any
activity where such activity involves embezzlement, theft,
extortion, fraud, fraudulent conversion, misappropriation of
funds, securities or property, forgery, counterfeiting, false
pretenses, bribery, gambling, or any transaction in or advice
concerning contracts of sale of a commodity for future
delivery, concerning matters subject to Commission regulation
under section 6c or 23 of this title, or concerning securities;
(D) if such person has been convicted within ten years
preceding the filing of the application for registration or at
any time thereafter of any felony that (i) involves any
transactions or advice concerning any contract of sale of a
commodity for future delivery, or any activity subject to
Commission regulation under section 6c or 23 of this title, or
concerning a security, (ii) arises out of the conduct of the
business of a futures commission merchant, introducing broker,
floor broker, floor trader, commodity trading advisor,
commodity pool operator, associated person of any registrant
under this chapter, securities broker, securities dealer,
municipal securities broker, municipal securities dealer,
transfer agent, clearing agency, securities information
processor, investment adviser, investment company, or an
affiliated person or employee of any of the foregoing, (iii)
involves embezzlement, theft, extortion, fraud, fraudulent
conversion, misappropriation of funds, securities or property,
forgery, counterfeiting, false pretenses, bribery, or gambling,
or (iv) involves the violation of section 152, 1001, 1341,
1342, 1343, 1503, 1623, 1961, 1962, 1963, or 2314, or chapter
25, 47, 95, or 96 of title 18, or section 7201 or 7206 of title
26;
(E) if such person, within ten years preceding the filing of
the application or at any time thereafter, has been found in a
proceeding brought by the Commission or any Federal or State
agency or other governmental body, or by agreement of
settlement to which the Commission or any Federal or State
agency or other governmental body is a party, (i) to have
violated any provision of this chapter, the Securities Act of
1933 [15 U.S.C. 77a et seq.], the Securities Exchange Act of
1934 [15 U.S.C. 78a et seq.], the Public Utility Holding
Company Act of 1935,(!1) the Trust Indenture Act of 1939 [15
U.S.C. 77aaa et seq.], the Investment Advisers Act of 1940 [15
U.S.C. 80b-1 et seq.], the Investment Company Act of 1940 [15
U.S.C. 80a-1 et seq.], the Securities Investors (!2) Protection
Act of 1970 [15 U.S.C. 78aaa et seq.], the Foreign Corrupt
Practices Act of 1977, chapter 96 of title 18, or any similar
statute of a State or foreign jurisdiction, or any rule,
regulation, or order under any such statutes, or the rules of
the Municipal Securities Rulemaking Board where such violation
involves embezzlement, theft, extortion, fraud, fraudulent
conversion, misappropriation of funds, securities or property,
forgery, counterfeiting, false pretenses, bribery, or gambling,
or (ii) to have willfully aided, abetted, counseled, commanded,
induced, or procured such violation by any other person;
(F) if such person is subject to an outstanding order of the
Commission denying privileges on any registered entity to such
person, denying, suspending, or revoking such person's
membership in any registered entity or registered futures
association, or barring or suspending such person from being
associated with a registrant under this chapter or with a
member of a registered entity or with a member of a registered
futures association;
(G) if, as to any of the matters set forth in this paragraph
and paragraph (3), such person willfully made any materially
false or misleading statement or omitted to state any material
fact in such person's application or any update thereto; or
(H) if refusal, suspension, or revocation of the registration
of any principal of such person would be warranted because of a
statutory disqualification listed in this paragraph:
Provided, That such person may appeal from a decision to refuse
registration, condition registration, suspend, revoke or to place
restrictions upon registration made pursuant to the provisions of
this paragraph in the manner provided in sections 9 and 15 of
this title; and
Provided, further, That for the purposes of paragraphs (2) and
(3) of this section, "principal" shall mean, if the person is a
partnership, any general partner or, if the person is a
corporation, any officer, director, or beneficial owner of at
least 10 per centum of the voting shares of the corporation, and
any other person that the Commission by rule, regulation, or
order determines has the power, directly or indirectly, through
agreement or otherwise, to exercise a controlling influence over
the activities of such person which are subject to regulation by
the Commission;
(3) to refuse to register or to register conditionally any
person, if it is found, after opportunity for hearing, that - 
(A) such person has been found by the Commission or by any
court of competent jurisdiction to have violated, or has
consented to findings of a violation of, any provision of this
chapter, or any rule, regulation, or order thereunder (other
than a violation set forth in paragraph (2) of this section),
or to have willfully aided, abetted, counseled, commanded,
induced, or procured the violation by any other person of any
such provision;
(B) such person has been found by any court of competent
jurisdiction or by any Federal or State agency or other
governmental body, or by agreement of settlement to which any
Federal or State agency or other governmental body is a party,
(i) to have violated any provision of the Securities Act of
1933 [15 U.S.C. 77a et seq.], the Securities Exchange Act of
1934 [15 U.S.C. 78a et seq.], the Public Utility Holding
Company Act of 1935,(!1) the Trust Indenture Act of 1939 [15
U.S.C. 77aaa et seq.], the Investment Advisers Act of 1940 [15
U.S.C. 80b-1 et seq.], the Investment Company Act of 1940 [15
U.S.C. 80a-1 et seq.], the Securities Investors (!3) Protection
Act of 1970 [15 U.S.C. 78aaa et seq.], the Foreign Corrupt
Practices Act of 1977, or any similar statute of a State or
foreign jurisdiction, or any rule, regulation, or order under
any such statutes, or the rules of the Municipal Securities
Rulemaking Board or (ii) to have willfully aided, abetted,
counseled, commanded, induced, or procured such violation by
any other person;
(C) such person failed reasonably to supervise another
person, who is subject to such person's supervision, with a
view to preventing violations of this chapter, or of any of the
statutes set forth in subparagraph (B) of this paragraph, or of
any of the rules, regulations, or orders thereunder, and the
person subject to supervision committed such a violation:
Provided, That no person shall be deemed to have failed
reasonably to supervise another person, within the meaning of
this subparagraph if (i) there have been established
procedures, and a system for applying such procedures, which
would reasonably be expected to prevent and detect, insofar as
practicable, any such violation by such other person and (ii)
such person has reasonably discharged the duties and
obligations incumbent upon that person, as supervisor, by
reason of such procedures and system, without reasonable cause
to believe that such procedures and system were not being
complied with;
(D) such person pleaded guilty to or was convicted of a
felony other than a felony of the type specified in paragraph
(2)(D) of this section, or was convicted of a felony of the
type specified in paragraph (2)(D) of this section more than
ten years preceding the filing of the application;
(E) such person pleaded guilty to or was convicted of any
misdemeanor which (i) involves any transaction or advice
concerning any contract of sale of a commodity for future
delivery or any activity subject to Commission regulation under
section 6c or 23 of this title or concerning a security, (ii)
arises out of the conduct of the business of a futures
commission merchant, introducing broker, floor broker, floor
trader, commodity trading advisor, commodity pool operator,
associated person of any registrant under this chapter,
securities broker, securities dealer, municipal securities
broker, municipal securities dealer, transfer agent, clearing
agency, securities information processor, investment adviser,
investment company, or an affiliated person or employee of any
of the foregoing, (iii) involves embezzlement, theft,
extortion, fraud, fraudulent conversion, misappropriation of
funds, securities or property, forgery, counterfeiting, false
pretenses, bribery, or gambling, (iv) involves the violation of
section 152, 1341, 1342, or 1343 or chapter 25, 47, 95, or 96
of title 18, or section 7203, 7204, 7205, or 7207 of title 26;
(F) such person was debarred by any agency of the United
States from contracting with the United States;
(G) such person willfully made any materially false or
misleading statement or willfully omitted to state any material
fact in such person's application or any update thereto, in any
report required to be filed with the Commission by this chapter
or the regulations thereunder, in any proceeding before the
Commission or in any registration disqualification proceeding;
(H) such person has pleaded nolo contendere to criminal
charges of felonious conduct, or has been convicted in a State
court, in a United States military court, or in a foreign court
of conduct which would constitute a felony under Federal law if
the offense had been committed under Federal jurisdiction;
(I) in the case of an applicant for registration in any
capacity for which there are minimum financial requirements
prescribed under this chapter or under the rules or regulations
of the Commission, such person has not established that such
person meets such minimum financial requirements;
(J) such person is subject to an outstanding order denying,
suspending, or expelling such person from membership in a
registered entity, a registered futures association, any other
self-regulatory organization, or any foreign regulatory body
that the Commission recognizes as having a comparable
regulatory program or barring or suspending such person from
being associated with any member or members of such registered
entity, association, self-regulatory organization, or foreign
regulatory body;
(K) such person has been found by any court of competent
jurisdiction or by any Federal or State agency or other
governmental body, or by agreement of settlement to which any
Federal or State agency or other governmental body is a party,
(i) to have violated any statute or any rule, regulation, or
order thereunder which involves embezzlement, theft, extortion,
fraud, fraudulent conversion, misappropriation of funds,
securities or property, forgery, counterfeiting, false
pretenses, bribery, or gambling or (ii) to have willfully
aided, abetted, counseled, commanded, induced or procured such
violation by any other person;
(L) such person has associated with such person any other
person and knows, or in the exercise of reasonable care should
know, of facts regarding such other person that are set forth
as statutory disqualifications in paragraph (2) of this
section, unless such person has notified the Commission of such
facts and the Commission has determined that such other person
should be registered or temporarily licensed;
(M) there is other good cause; or
(N) any principal, as defined in paragraph (2) of this
section, of such person has been or could be refused
registration:
Provided, That pending final determination under this paragraph,
registration shall not be granted: Provided further, That such
person may appeal from a decision to refuse registration or to
condition registration made pursuant to this paragraph in the
manner provided in sections 9 and 15 of this title;
(4) in accordance with the procedure provided for in sections 9
and 15 of this title, to suspend, revoke, or place restrictions
upon the registration of any person registered under this chapter
if cause exists under paragraph (3) of this section which would
warrant a refusal of registration of such person, and to suspend
or revoke the registration of any futures commission merchant or
introducing broker who shall knowingly accept any order for the
purchase or sale of any commodity for future delivery on or
subject to the rules of any registered entity from any person if
such person has been denied trading privileges on any registered
entity by order of the Commission under sections 9 and 15 of this
title and the period of denial specified in such order shall not
have expired: Provided, That such person may appeal from a
decision to suspend, revoke, or place restrictions upon
registration made pursuant to this paragraph in the manner
provided in sections 9 and 15 of this title;
(5) to make and promulgate such rules and regulations as, in
the judgment of the Commission, are reasonably necessary to
effectuate any of the provisions or to accomplish any of the
purposes of this chapter;
(6) to communicate to the proper committee or officer of any
registered entity, registered futures association, or self-
regulatory organization as defined in section 3(a)(26) of the
Securities Exchange Act of 1934 [15 U.S.C. 78c(a)(26)],
notwithstanding the provisions of section 12 of this title, the
full facts concerning any transaction or market operation,
including the names of parties thereto, which in the judgment of
the Commission disrupts or tends to disrupt any market or is
otherwise harmful or against the best interests of producers,
consumers, or investors, or which is necessary or appropriate to
effectuate the purposes of this chapter: Provided, That any
information furnished by the Commission under this paragraph
shall not be disclosed by such registered entity, registered
futures association, or self-regulatory organization except in
any self-regulatory action or proceeding;
(7) to alter or supplement the rules of a registered entity
insofar as necessary or appropriate by rule or regulation or by
order, if after making the appropriate request in writing to a
registered entity that such registered entity effect on its own
behalf specified changes in its rules and practices, and after
appropriate notice and opportunity for hearing, the Commission
determines that such registered entity has not made the changes
so required, and that such changes are necessary or appropriate
for the protection of persons producing, handling, processing, or
consuming any commodity traded for future delivery on such
registered entity, or the product or byproduct thereof, or for
the protection of traders or to insure fair dealing in
commodities traded for future delivery on such registered entity.
Such rules, regulations, or orders may specify changes with
respect to such matters as - 
(A) terms or conditions in contracts of sale to be executed
on or subject to the rules of such registered entity;
(B) the form or manner of execution of purchases and sales
for future delivery;
(C) other trading requirements, excepting the setting of
levels of margin;
(D) safeguards with respect to the financial responsibility
of members;
(E) the manner, method, and place of soliciting business,
including the content of such solicitations; and
(F) the form and manner of handling, recording, and
accounting for customers' orders, transactions, and accounts;
(8) to make and promulgate such rules and regulations with
respect to those persons registered under this chapter, who are
not members of a registered entity, as in the judgment of the
Commission are reasonably necessary to protect the public
interest and promote just and equitable principles of trade,
including but not limited to the manner, method, and place of
soliciting business, including the content of such solicitation;
(9) to direct the registered entity, whenever it has reason to
believe that an emergency exists, to take such action as in the
Commission's judgment is necessary to maintain or restore orderly
trading in or liquidation of any futures contract, including, but
not limited to, the setting of temporary emergency margin levels
on any futures contract, and the fixing of limits that may apply
to a market position acquired in good faith prior to the
effective date of the Commission's action. The term "emergency"
as used herein shall mean, in addition to threatened or actual
market manipulations and corners, any act of the United States or
a foreign government affecting a commodity or any other major
market disturbance which prevents the market from accurately
reflecting the forces of supply and demand for such commodity.
Any action taken by the Commission under this paragraph shall be
subject to review only in the United States Court of Appeals for
the circuit in which the party seeking review resides or has its
principal place of business, or in the United States Court of
Appeals for the District of Columbia Circuit. Such review shall
be based upon an examination of all the information before the
Commission at the time the determination was made. The court
reviewing the Commission's action shall not enter a stay or order
of mandamus unless it has determined, after notice and hearing
before a panel of the court, that the agency action complained of
was arbitrary, capricious, an abuse of discretion, or otherwise
not in accordance with law. Nothing herein shall be deemed to
limit the meaning or interpretation given by a registered entity
to the terms "market emergency", "emergency", or equivalent
language in its own bylaws, rules, regulations, or resolutions;
(10) to authorize any person to perform any portion of the
registration functions under this chapter, in accordance with
rules, notwithstanding any other provision of law, adopted by
such person and submitted to the Commission for approval or, if
applicable, for review pursuant to section 21(j) of this title,
and subject to the provisions of this chapter applicable to
registrations granted by the Commission; and
(11)(A) by written notice served on the person and pursuant to
such rules, regulations, and orders as the Commission may adopt,
to suspend or modify the registration of any person registered
under this chapter who is charged (in any information,
indictment, or complaint authorized by a United States attorney
or an appropriate official of any State) with the commission of
or participation in a crime involving a violation of this
chapter, or a violation of any other provision of Federal or
State law that would reflect on the honesty or the fitness of the
person to act as a fiduciary (including an offense specified in
subparagraph (D) or (E) of paragraph (2)) that is punishable by
imprisonment for a term exceeding one year, if the Commission
determines that continued registration of the person may pose a
threat to the public interest or may threaten to impair public
confidence in any market regulated by the Commission.
(B) Prior to the suspension or modification of the registration
of a person under this paragraph, the person shall be afforded an
opportunity for a hearing at which the Commission shall have the
burden of showing that the continued registration of the person
does, or is likely to, pose a threat to the public interest or
threaten to impair public confidence in any market regulated by
the Commission.
(C) Any notice of suspension or modification issued under this
paragraph shall remain in effect until such information,
indictment, or complaint is disposed of or until terminated by
the Commission.
(D) On disposition of such information, indictment, or
complaint, the Commission may issue and serve on such person an
order pursuant to paragraph (2) or (4) to suspend, restrict, or
revoke the registration of such person.
(E) A finding of not guilty or other disposition of the charge
shall not preclude the Commission from thereafter instituting any
other proceedings under this chapter.
(F) A person aggrieved by an order issued under this paragraph
may obtain review of such order in the same manner and on the
same terms and conditions as are provided in section 8(b) of this
title.