Futures Trading Practices Act of 1991

Summary

Futures Trading Practices Act of 1991 - Title I: Commodity Futures Trading Commission; Funding and Personnel - Amends the Commodity Exchange Act to authorize appropriations for the Commodity Futures Trading Commission (CFTC). Directs the Commission to establish hiring and compensation levels comparable with the Federal bank regulatory agencies. Directs the Commission to establish a service fee schedule. (Currently authority to do so is discretionary.) Establishes annual aggregate fee limits. Title II: Futures Trading Practices - Subtitle A: 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. Subtitle B: 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. Subtitle C: 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. Subtitle D: Floor Trader Registration - Requires floor trader registration. Subtitle E: 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. Authorizes the CFTC to require customer restitution. Makes it a felony to make false or fraudulent representations to a self-regulatory organization. Authorizes class action suits against registered persons if the CFTC has issued final rules permitting such actions. Requires the CFTC to study and report to the appropriate congressional committees with regard to penalties and related industry guidelines. Subtitle F: 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. Subtitle G: General Provisions - Requires ethics training for new registrants. Grants the CFTC 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. Grants the General Accounting Office (GAO) access to information maintained by self-regulatory organizations, subject to specified confidentiality requirements. Authorizes the CFTC to suspend or modify the registration of a person charged with a felony that reflects on such person's fiduciary fitness. Prohibits insider trading. Directs the CFTC to: (1) facilitate the development of computerized trading as an adjunct to the open out cry auction system; and (2) seek to remove any foreign trade barriers on the international use of electronic trading systems. Permits futures associations to appeal certain CFTC decisions. Requires each futures association to adopt telemarketing fraud disciplinary criteria, which shall include a prohibition on 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 the risk disclosure statement. Provides for nationwide service of process and venue in U.S. district courts. Directs GAO to study delivery points for agricultural commodity contracts. Title III: Intermarket Coordination - Intermarket Coordination Act of 1991 - Empowers the Board of Governors of the Federal Reserve System to prescribe rules and regulations over margin on stuck index futures or options. Modifies hybrid instrument provisions to exempt transactions having specified characteristics from CFTC coverage. Authorizes the CFTC to exempt an agreement, contract, or transaction from the requirements of such Act if in the public interest and if: (1) limited to the appropriate parties; (2) commercial and nonspeculative in nature; and (3) it would not preclude CFTC or contract market regulatory authority. Exempts specified swap agreements from the requirements of such Act. Directs the Securities and Exchange Commission and the CFTC to take certain steps to strengthen domestic markets and coordinate intermarket transactions. Title IV: Effective Date - Sets forth effective dates for amendments made by this Act.

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Documents

5 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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• Indefinitely postponed in Senate

  summary · EN · 18 April 1991

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• Reported to Senate with amendment(s)

  summary · EN · 12 March 1991

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• Introduced in Senate

  summary · EN · 14 January 1991

  Open at official source

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