Futures Trading Practices Act of 1989

Summary

Futures Trading Practices Act of 1989 - Title I: Authorization of Appropriations - Amends the Commodity Exchange Act (the Act) to authorize appropriations through FY 1994 for the Commodity Futures Trading Commission. Title II: Floor Surveillance and Dual Trading - Requires every contract market to maintain a system to monitor trading to detect and deter violations of the Act relating to the making of trades and the execution of customer orders. Requires any audit trail system that is part of such a monitoring system to capture transaction times independently, promptly, precisely, and completely. Requires biennial Commission assessments of each market's trade monitoring system. Directs the Commission to issue deficiency orders requiring timely correction of any such system failing to meet standards. Requires suspension of dual trading, except under specified circumstances, on any market subject to such an order. Bars the placing of oral orders except according to certain Commission rules. Title III: Broker Associations - Prohibits trading between floor traders or brokers and affiliated customers. Requires disclosure of formal or informal business affiliations between floor brokers and traders. Title IV: Governing Structure - Prescribes meaningful representation on exchange boards of brokerage firms, commodity producers and consumers, and floor traders and brokers. Specifies diversity of membership that must prevail on major disciplinary panels. Title V: Floor Trader Registration - Revises registration requirements for floor traders or brokers. Title VI: Penalties - Revises penalties for violations of the Act. Makes Commission merchants liable to customers for any losses caused by the malfeasance of their chosen floor brokers. Allows customers to sue floor brokers for punitive damages of up to double actual losses. Title VII: Assistance to Foreign Futures Authorities - Provides for cooperation with foreign futures authorities (as defined by this Act) with regard to: (1) subpoena authority; (2) investigative assistance; (3) information disclosure and receipt; and (4) payment for necessary investigative expenses. Title VIII: General Provisions - Grants the Commission authority to conduct limited undercover investigations where it has reason to believe that violations of the Act may be taking place and the Department of Justice has declined to do so. Revises registration requirements for floor traders or brokers, including fitness checks, fingerprinting, and FBI background investigations. Directs the Commission to issue a schedule of service fees to cover the costs of monitoring trading floors and insuring compliance by exchanges with self-regulatory standards. Prohibits a person who has solicited a new account by telephone from entering any orders for such account for three days after the customer has signed any contract and a risk disclosure statement. Provides for nationwide service of process and venue in U.S. district courts. Directs the Comptroller General to study delivery points for agricultural commodity contracts. Title IX: Effective Date - Sets forth the effective date of this Act.

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Documents

4 official files

• Reported to Senate (text)

  Reported to Senate · EN

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• Introduced in Senate (text)

  Introduced in Senate · EN

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• Reported to Senate with amendment(s)

  summary · EN · 6 November 1989

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• Introduced in Senate

  summary · EN · 5 October 1989

  Open at official source

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