§ 6n. Registration of commodity trading advisors and commodity pool operators; application; expiration and renewal; record keeping and reports; disclosure; statements of account

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. § 6n

   Sept. 21, 1922, ch. 369, § 4n, 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, § 4n, 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 § 9(1) · 92 Stat. 865

   1. Redesignated · 7 U.S.C. § 6n(2)

      Pub. L. 95–405, § 9(1)–(3), redesignated par. (3) as (2)

   2. Substituted · 7 U.S.C. § 6n(2)

      Pub. L. 95–405, § 9(1)–(3), substituted “Each registration” for “All registrations”

   3. Struck and inserted · 7 U.S.C. § 6n(2)

      Pub. L. 95–405, § 9(1)–(3), inserted “or at such other time, not less than one year from the effective date thereof, as the Commission may rule, regulation, or order prescribe,” after “June of each year,”. Former par. (2), which provided that registration under this section becomes effective thirty days after the receipt of such application by the Commission, or within such shorter period of time as the Commission may determine, was struck out

   Source evidence

   Code amendment note
   Par. (2). Pub. L. 95–405, § 9(1)–(3), redesignated par. (3) as (2) and substituted “Each registration” for “All registrations” and inserted “or at such other time, not less than one year from the effective date thereof, as the Commission may rule, regulation, or order prescribe,” after “June of each year,”. Former par. (2), which provided that registration under this section becomes effective thirty days after the receipt of such application by the Commission, or within such shorter period of time as the Commission may determine, was struck out.

   Enacted provision · exact public law section
   (1) striking out subsection (2) and redesignating subsections (3), (4), (5), (6), and (7) as subsections (2), (3), (4), (5), and (6), respectively;

3. 1978

   Futures Trading Act of 1978

   Pub. L. 95–405 § 9(1) · 92 Stat. 865

   Redesignated · 7 U.S.C. § 6n(3)(6)

   Pub. L. 95–405, § 9(1), redesignated pars. (4) to (7) as (3) to (6), respectively. Former par. (3) redesignated (2)

   Source evidence

   Code amendment note
   Pars. (3) to (6). Pub. L. 95–405, § 9(1), redesignated pars. (4) to (7) as (3) to (6), respectively. Former par. (3) redesignated (2).

   Enacted provision · exact public law section
   (1) striking out subsection (2) and redesignating subsections (3), (4), (5), (6), and (7) as subsections (2), (3), (4), (5), and (6), respectively;

4. 1983

   Futures Trading Act of 1982

   Pub. L. 97–444 title II § 213 · 96 Stat. 2294

   Struck · 7 U.S.C. § 6n(5)

   Pub. L. 97–444 struck out par. (5) which authorized Commission, without hearing, to deny registration to any person as a commodity trading advisor or commodity pool operator if such person was subject to an outstanding order under this chapter 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

   Source evidence

   Code amendment note
   Par. (5). Pub. L. 97–444 struck out par. (5) which authorized Commission, without hearing, to deny registration to any person as a commodity trading advisor or commodity pool operator if such person was subject to an outstanding order under this chapter 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.

   Enacted provision · exact public law section
   Sec. 213. conforming amendment Section 4n of the Commodity Exchange Act (7 U.S.C. 6n) is amended by striking out subsections (5) and (6).

   Effective date note
   Amendment by Pub. L. 97–444 effective Jan. 11, 1983, see section 239 of Pub. L. 97–444, set out as a note under section 2 of this title.

5. 1983

   Futures Trading Act of 1982

   Pub. L. 97–444 title II § 213 · 96 Stat. 2294

   Struck · 7 U.S.C. § 6n(6)

   Pub. L. 97–444 struck out par. (6) which authorized Commission to deny registration or revoke or suspend the registration of any commodity trading advisor or commodity pool operator if the Commission found that such denial, revocation, or suspension was in the public interest and that such person had been guilty of certain specified activities. See section 12a(2), (3), and (4) of this title

   Source evidence

   Code amendment note
   Par. (6). Pub. L. 97–444 struck out par. (6) which authorized Commission to deny registration or revoke or suspend the registration of any commodity trading advisor or commodity pool operator if the Commission found that such denial, revocation, or suspension was in the public interest and that such person had been guilty of certain specified activities. See section 12a(2), (3), and (4) of this title.

   Enacted provision · exact public law section
   Sec. 213. conforming amendment Section 4n of the Commodity Exchange Act (7 U.S.C. 6n) is amended by striking out subsections (5) and (6).

   Effective date note
   Amendment by Pub. L. 97–444 effective Jan. 11, 1983, see section 239 of Pub. L. 97–444, set out as a note under section 2 of this title.

7 of 7 references resolved to an enrolled provision