§ 6m. Use of mails or other means or instrumentalities of interstate commerce by commodity trading advisors and commodity pool operators; relation to other law

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 1922

   Commodity Futures Trading Commission Act of 1974

   Pub. L. 93–463 title II § 205(a) · 88 Stat. 1389

   Enacted · 7 U.S.C. § 6m

   Sept. 21, 1922, ch. 369, § 4m, as added Pub. L. 93–463, title II, § 205(a), Oct. 23, 1974, 88 Stat. 1398

   Source evidence

   Code source credit
   Sept. 21, 1922, ch. 369, § 4m, as added Pub. L. 93–463, title II, § 205(a), Oct. 23, 1974, 88 Stat. 1398

   Enacted provision · exact public law section
   (a) The Commodity Exchange Act, as amended, is Commodity trading advisors and commodity pool operators. 7 USC 6l. amended by adding the following new sections: “Sec. 41. It is hereby, found that the activities of commodity trading advisors and commodity pool operators are affected with a national public interest in that, among other things— “(1) their advice, counsel, publications, writings, analyses, and reports are furnished and distributed, and their contracts, solicitations, subscriptions, agreements, and other arrangements with clients take place and are negotiated and performed by the use of the mails and other means and instrumentalities of interstate commerce; “(2) their advice, counsel, publications, writings, analyses, and reports customarily relate to and their operations are directed toward and cause the purchase and sale of commodities for future delivery on or subject to the rules of contract markets; and “(3) the foregoing transactions occur in such volume as to affect substantially transactions on contract markets. “Sec. 4m. It Use of mails and interstate commerce. 7 USC 6m. shall be unlawful for any commodity trading advisor or commodity pool operator, unless registered under this Act, to make use of the mails or any means or instrumentality of interstate commerce in connection with his business as such commodity trading advisor or commodity pool operator: Provided, That the provisions of this section shall not apply to any commodity trading advisor who, during the course of the preceding twelve months, has not furnished commodity trading advice to more than fifteen persons and who does not hold himself out generally to the public as a commodity trading advisor. Sec. 4n. (1) Any Registration. 7 USC 6n. commodity trading advisor or commodity pool operator, or any person who contemplates becoming a commodity trading advisor or commodity pool operator, may register under this Act by filing an application with the Commission. Such application shall contain such information, in such form and detail, as the Commission may, by rules and regulations, prescribe as necessary or appropriate in the public interest, including the following: “(A) the name and form of organization, including capital structure, under which the applicant engages or intends to engage in business; the name of the State under the laws of which he is organized; the location of his principal business office and branch offices, if any; the names and addresses of all partners, officers, directors, and persons performing similar functions or, if the applicant be an individual, of such individual; and the number of employees; “(B) the education, the business affiliations for the past ten years, and the present business affiliations of the applicant and of his partners, officers, directors, and persons performing similar functions and of any controlling person thereof; “(C) the nature of the business of the applicant, including the manner of giving advice and rendering of analyses or reports; “(D) the nature and scope of the authority of the applicant with respect to clients’ funds and accounts; “(E) the basis upon which the applicant is or will be compensated; and “(F) such other information as the Commission may require to determine whether the applicant is qualified for registration. “(2) Except as hereinafter provided, such registration shall become effective thirty days after the receipt of such application by the Commission, or within such shorter period of time as the Commission may determine. “(3) All registrations under this section shall expire on the 30th day of June of each year, and shall be renewed upon application therefor subject to the same requirements as in the case of an original application. “(4) (A) Every Recordkeeping and reports. commodity trading advisor and commodity pool operator registered under this Act shall maintain books and records and file such reports in such form and manner as may be prescribed by the Commission. All such books and records shall be kept for a period of at least three years, or longer if the Commission so directs, and shall be open to inspection by any representative of the Commission or the Department of Justice. Upon the request of the Commission, a registered commodity trading advisor or commodity pool operator shall furnish the name and address of each client, subscriber, or participant, and submit samples or copies of all reports, letters, circulars, memorandums, publications, writings, or other literature or advice distributed to clients, subscribers, or participants, or prospective clients, subscribers, or participants. “(B) Unless otherwise authorized by the Commission by rule or Disclosure. regulation, all commodity trading advisors and commodity pool operators shall make a full and complete disclosure to their subscribers, clients, or participants of all futures market positions taken or held by the individual principals of their organization. “(5) Every commodity pool operator shall regularly furnish statements Statements of account. of account to each participant in his operations. Such statements shall be in such form and manner as may be prescribed by the Commission and shall include complete information as to the current status of all trading accounts in which such participant has an interest. “(6) The Commission is authorized, without hearing, to deny registration Denial of registration. to any person as a commodity trading advisor or commodity pool operator if such person is subject to an outstanding order under this Act denying to such person trading privileges on any contract market, or suspending or revoking the registration of such person as a commodity trading advisor, commodity pool operator, futures commission merchant, or floor broker, or suspending or expelling such person from membership on any contract market. “(7) The Commission after hearing may by order deny registration, revoke or suspend the registration of any commodity trading advisor or commodity pool operator if the Commission finds that such denial, revocation, or suspension is in the public interest and that— “(A) the operations of such person disrupt or tend to disrupt orderly marketing conditions, or cause or tend to cause sudden or unreasonable fluctuations or unwarranted changes in the prices of commodities; “(B) such commodity trading advisor or commodity pool operator, or any partner, officer, director, person performing similar function or controlling person thereof— “(i) has within ten years of the issuance of such order been convicted of any felony or misdemeanor involving the purchase or sale of any commodity or security, or arising out of any conduct or practice of such commodity trading advisor or commodity pool operator or affiliated person as a commodity trading advisor or commodity pool operator; or “(ii) at the time of the issuance of such order, is permanently or temporarily enjoined by order, judgment or decree of any court of competent jurisdiction from acting as a commodity trading advisor, commodity pool operator, futures commission merchant, or floor broker, or as an affiliated person or employee of any of the foregoing, or from engaging in or continuing any conduct or practice in connection with any such activity or in connection with the purchase or sale of commodities or securities; or “(C) any partner, officer, or director of such commodity trading advisor or commodity pool operator, or any person performing a similar function or any controlling person thereof is subject to an outstanding order of the Commission denying trading privileges on any contract market to such person, or suspending or revoking the registration of such person as a commodity trading advisor, commodity pool operator, futures commission merchant, or floor broker, or suspending or expelling such person from membership on any contract market. Sec. 4o. (1) It shall be unlawful for any commodity trading advisor 7 USC 6o. or commodity pool operator registered under this Act, by use of the mails or any means or instrumentality of interstate commerce, directly or indirectly— “(A) to employ any device, scheme, or artifice to defraud any client or participant or prospective client or participant; or “(B) to engage in any transaction, practice, or course of business which operates as a fraud or deceit upon any client or participant or prospective client or participant. “(2) It shall be unlawful for any commodity trading advisor or commodity pool operator registered under this Act to represent or imply in any manner whatsoever that he has been sponsored, recommended, or approved, or that his abilities or qualifications have in any respect been passed upon by the United States or any agency or officer thereof: Provided, That this section shall not be construed to prohibit a statement that a person is registered under this Act as a commodity trading advisor or commodity pool operator, if such statement is true in fact and if the effect of such registration is not misrepresented.”

2. 1978

   Futures Trading Act of 1978

   Pub. L. 95–405 § 8 · 92 Stat. 865

   Inserted · 7 U.S.C. § 6m

   Pub. L. 95–405 inserted provisions relating to applicability of this section to commodity trading advisors who are dealers, processors, brokers, or sellers in cash market transactions of specifically listed commodities or nonprofit, voluntary membership, general farm organizations who provide advice on sale or purchase of specifically listed commodities if the advice by the person described in cl. (1) or (2) of this sentence is incidental solely to the conduct to the person’s business and that such person be subject to proceedings under section 18 of this title

   Source evidence

   Code amendment note
   Pub. L. 95–405 inserted provisions relating to applicability of this section to commodity trading advisors who are dealers, processors, brokers, or sellers in cash market transactions of specifically listed commodities or nonprofit, voluntary membership, general farm organizations who provide advice on sale or purchase of specifically listed commodities if the advice by the person described in cl. (1) or (2) of this sentence is incidental solely to the conduct to the person’s business and that such person be subject to proceedings under section 18 of this title.

   Enacted provision · exact public law section
   Sec. 8. Section 4m of the Commodity Exchange Act (7 U.S.C. 6m) is amended by adding at the end thereof a new sentence as follows: “The provisions of this section shall not apply to any commodity trading advisor who is a (1) dealer, processor, broker, or seller in cash market transactions of any commodity specifically set forth in section 2(a) Ante, p. 865. 7 USC 1 note. of this Act prior to the enactment of the Commodity Futures Trading Commission Act of 1974 (or products thereof) or (2) nonprofit, voluntary membership, general farm organization, who provides advice on the sale or purchase of any commodity specifically set forth in section 2(a) of this Act prior to the enactment of the Commodity Futures Trading Commission Act of 1974; if the advice by the person described in clause (1) or (2) of this sentence as a commodity trading advisor is solely incidental to the conduct of that person’s business: Provided, That such person shall be subject to proceedings under section 7 USC 18. 14 of this Act.”.

3. 1983

   Futures Trading Act of 1982

   Pub. L. 97–444 title I § 103 · 96 Stat. 2294

   1. Amended · 7 U.S.C. § 6m

      Pub. L. 97–444 designated existing provisions as par. (1)

   2. Added · 7 U.S.C. § 6m

      Pub. L. 97–444 added par. (2)

   Source evidence

   Code amendment note
   Pub. L. 97–444 designated existing provisions as par. (1) and added par. (2).

   Enacted provision · exact public law section
   Sec. 103. commodity pools Section 4m of the Commodity Exchange Act (7 U.S.C. 6m) is amended by— (1) inserting “(1)” immediately following the section designation; and (2) adding at the end thereof the following new subsection: “(2) Nothing in this Act shall relieve any person of any obligation or duty, or affect the availability of any right or remedy available to the Securities and Exchange Commission or any private party arising under the Securities Act of 1933 or the Securities Exchange Act 15 USC 77a. of 1934 governing the issuance, offer, purchase, or sale of securities 15 USC 78a. of a commodity pool, or of persons engaged in transactions with respect to such securities, or reporting by a commodity pool.”.

4. 2000

   Consolidated Appropriations Act, 2001

   Pub. L. 106–554 § 1(a)(5)(tII)(s251)(d) · 114 Stat. 2763

   Added · 7 U.S.C. § 6m(3)

   Pub. L. 106–554 added par. (3)

   Source evidence

   Code amendment note
   Par. (3). Pub. L. 106–554 added par. (3).

   Enacted provision · exact public law section
   (5) H.R. 5660, as introduced on December 14, 2000.

5. 2010

   Wall Street Transparency and Accountability Act of 2010

   Pub. L. 111–203 § 749(b) · 124 Stat. 1376

   1. Inserted · 7 U.S.C. § 6m(3)

      Pub. L. 111–203, § 749(b), inserted heading

   2. Amended · 7 U.S.C. § 6m(3)

      Pub. L. 111–203, § 749(b), designated existing provisions as subpar. (A)

   3. Substituted · 7 U.S.C. § 6m(3)

      Pub. L. 111–203, § 749(b), substituted “Paragraph (1)” for “Subsection (1) of this section”

   4. Substituted · 7 U.S.C. § 6m(3)

      Pub. L. 111–203, § 749(b), substituted “to any commodity pool that is engaged primarily in trading commodity interests.” for “to any investment trust, syndicate, or similar form of enterprise that is engaged primarily in trading in any commodity for future delivery on or subject to the rules of any contract market or registered derivatives transaction execution facility.”

   5. Added · 7 U.S.C. § 6m(3)

      Pub. L. 111–203, § 749(b), added subpars. (B) and (C)

   Source evidence

   Code amendment note
   Par. (3). Pub. L. 111–203, § 749(b), inserted heading, designated existing provisions as subpar. (A) and inserted heading, substituted “Paragraph (1)” for “Subsection (1) of this section” and “to any commodity pool that is engaged primarily in trading commodity interests.” for “to any investment trust, syndicate, or similar form of enterprise that is engaged primarily in trading in any commodity for future delivery on or subject to the rules of any contract market or registered derivatives transaction execution facility.”, and added subpars. (B) and (C).

   Enacted provision · exact public law section
   (b) Section 4m(3) of the Commodity Exchange Act (7 U.S.C. 6m(3)) is amended— (1) by striking “(3) Subsection (1) of this section” and inserting the following: “(3) Exception.— “(A) In general.— Paragraph (1)” ; and (2) by striking “to any investment trust” and all that follows through the period at the end and inserting the following: “to any commodity pool that is engaged primarily in trading commodity interests. “(B) Engaged primarily.— For purposes of subparagraph (A), a commodity trading advisor or a commodity pool shall be considered to be ‘engaged primarily’ in the business of being a commodity trading advisor or commodity pool if it is or holds itself out to the public as being engaged primarily, or proposes to engage primarily, in the business of advising on commodity interests or investing, reinvesting, owning, holding, or trading in commodity interests, respectively. “(C) Commodity interests.— For purposes of this paragraph, commodity interests shall include contracts of sale of a commodity for future delivery, options on such contracts, security futures, swaps, leverage contracts, foreign exchange, spot and forward contracts on physical commodities, and any monies held in an account used for trading commodity interests.” .

   Effective date note
   Amendment by Pub. L. 111–203 effective on the later of 360 days after July 21, 2010, or, to the extent a provision of subtitle A (§§ 711–754) of title VII of Pub. L. 111–203 requires a rulemaking, not less than 60 days after publication of the final rule or regulation implementing such provision of subtitle A, see section 754 of Pub. L. 111–203, set out as a note under section 1a of this title.

6. 2010

   Wall Street Transparency and Accountability Act of 2010

   Pub. L. 111–203 § 721(e)(2) · 124 Stat. 1376

   Substituted · 7 U.S.C. § 6m(3)

   Pub. L. 111–203, § 721(e)(2), substituted “section 1a” for “section 1a(6)”

   Target inherited from the preceding amendment note.

   Source evidence

   Code amendment note
   Pub. L. 111–203, § 721(e)(2), substituted “section 1a” for “section 1a(6)”.

   Enacted provision · exact public law section
   (2) Section 4m(3) of the Commodity Exchange Act (7 U.S.C. 6m(3)) is amended by striking “section 1a(6)” and inserting “section 1a”.

   Effective date note
   Amendment by Pub. L. 111–203 effective on the later of 360 days after July 21, 2010, or, to the extent a provision of subtitle A (§§ 711–754) of title VII of Pub. L. 111–203 requires a rulemaking, not less than 60 days after publication of the final rule or regulation implementing such provision of subtitle A, see section 754 of Pub. L. 111–203, set out as a note under section 1a of this title.

11 of 11 references resolved to an enrolled provision