Imágenes de páginas
PDF
EPUB

REGULATION OF COMMODITY EXCHANGES

TUESDAY, FEBRUARY 5, 1935

HOUSE OF REPRESENTATIVES,
COMMITTEE ON AGRICULTURE,

Washington, D.O. The committee met at 10:30 a. m., Hon. Marvin Jones (chairman) presiding.

The CHAIRMAN. The committee will come to order, please.

(The committee had under consideration H. R. 3009, to amend the Grain Futures Act, which is printed in the record, as follows:)

[H. R. 3009, 74th Cong., 1st sess.]

A BILL To amend the Grain Futures Act to prevent and remove obstructions and

burdens upon interstate commerce in grains and other commodities by regulating transactions therein on commodity futures exchanges, by providing means for limiting short selling and speculation in such commodities on such exchanges by licensing commission merchants dealing in such commodities for future delivery on such exchanges, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 1 of the Grain Futures Act (U. S. C., title 7, sec. 1) is amended to read as follows: “ This act shall be known by the short title of 'Commodity Exchange Act.'”

SEC. 2. The Grain Futures Act (U. S. C., title 7, secs. 1 to 17, inclusive) is amended by striking out the word "grain" wherever it appears in such act and inserting in lieu thereof “commodity”, “any commodity", or "commodities", as the case may require.

SEC. 3. Section 2 of the Grain Futures Act (U. S. C., title 7, sec. 2) is amended by

(a) striking out the third sentence of paragraph (a) and inserting in lieu thereof the following: “ The word 'commodity' shall mean wheat, cotton, rice, corn, oats, barley, rye, flaxseed, grain sorghums, and mill feeds."; and

(b) adding at the end of paragraph (a) the following sentences : “ The words . cooperative association of producers' shall mean any bona fide cooperative association, corporate or otherwise, owned or controlled by producers of agricultural products, whether or not qualified under the act of Congress of February 18, 1922 (U. S. C., title 7, secs. 291 and 292), or any organization acting for a group of such associations and owned or controlled by such associations. The words ' member of a contract market' shall mean and include individuals, associations, partnerships, corporations, and trusts owning or holding membership in, or admitted to membership representation on, a contract market or given members' trading privileges thereon. The words 'futures commission merchant'shall mean and include individuals, associations, partnerships, corporations, and trusts engaged in soliciting or in accepting orders for the purchase or sale of any commodity for future delivery on or subject to the rules of any contract market and that, in or in connection with such solicitation or acceptance of orders, accepts any money, securities, or property (or extends credit in lieu thereof) to margin, guarantee, or secure any trades or contracts that result or may result therefrom. The words 'floor broker'shall mean any person who, in or surrounding any 'pit', 'ring', 'post', or other place provided for the meeting of persons similarly engaged, shall engage in executing for others any order for the purchase or sale of any commodity for future delivery on or subject to the rules of any contract market, and who for such services receives or accepts any commission or other compensation. The words 'the commission' shall mean the Secretary of Agricuture, the Secretary of Commerce, and the Attorney General.”

SEC. 4. Section 4 of the Grain Futures Act (U. S. C., title 7, sec, 6) is amended by

(a) striking out the word “except” at the end of the first paragraph; (b) striking out all of paragraph (a); and

(c) striking out the parentheses and letter “b” and the word “Where” at the beginning of paragraph (b) and inserting in lieu thereof the words “ except, in any of the foregoing cases, where."

SEC. 5. The Grain Futures Act is amended by adding after section 4 (U. S. C., title 7, sec. 6) the following new sections:

“ SEC. 4a. (1) Excessive speculation in any commodity, causing sudden or unreasonable fiuctuations or unwarranted changes in the price of such commodity, is an undue and unnecessary burden on interstate commerce in such commodity. For the purpose of diminishing, eliminating, or preventing such burden, the commission shall, by order, fix such limit or limits on the amount of trading under contracts of sale of such commodity for future delivery on or subject to the rules of any contract market which may be done by any person as the commission finds is necessary to diminish, eliminate, or prevent such burden. The trading limit may be fixed in different amounts for different markets and for different futures or delivery months, or a trading limit may be fixed to apply to all markets and all futures of any commodity. Such trading limit may be different for the different purposes of subparagraphs (A) and (B) hereof and may be fixed in certain amounts for buying operations and in the same or different amounts for selling operations. The commission shall, in such order, fix a reasonable time (not to exceed ten days) after the order's promulgation; after which, and until such order is suspended, modified, or revoked, it shall be unlawful for any person,

“(A) directly or indirectly to buy or sell, or agree to buy or sell, under contracts of sale of such commodity for future delivery on or subject to the rules of any contract market, any amount of such commodity during any one business day in excess of the trading limit or limits fixed by the commission in such order for or with respect to such commodity; or

“(B) directly or indirectly to buy or sell, or agree to buy or sell, under contracts of sale of such commodity for future delivery on or subject to the rules of any contract market, any amount of such commodity that shall result in giving such person a net long or net short position at any one time in or with respect to any such commodity in excess of the trading limit or limits fixed by the commission in such order for or with respect to such commodity.

“(2) The trading limits authorized in paragraph (1) of this section shall not apply to transactions which are shown to be bona fide hedging transactions. Transactions known as 'spreads' or 'straddles' may be exempted in such order of the commission, or the commission in such order may fix different trading limits applying to such spread or straddle transactions.

“(3) For the purpose of paragraph (2) of this section, hedging transactions shall mean sales of any commodity for future delivery on or subject to the rules of any board of trade, to the extent that such sales are offset in quantity by the ownership or purchase of cash commodities or, conversely, purchases for future delivery to the extent that such purchases are offset by sales of cash commodities. There shall be included in the amount of any commodit' which may be hedged by any person

(A) the amount of such commodity such person is raising, or in good faith intends or expects to raise, within the next twelve months, on land (in the United States or its Territories) which such person owns or leases;

(B) and amount of such commodity the sale of which for future delivery would be a reasonable hedge against the products or byproducts of such commodity owned or purchased by such person, or the purchase of which for future delivery would be a reasonable hedge against the sale of any product or byproduct of such commodity by such person.

“(4) This section shall apply to a person that is licensed as a futures commission merchant or as floor broker under authority of this act only to the extent that transactions made by such persons are made on behalf of or for the account or benefit of such person. This section shall not apply to transactions made by, or on behalf of, or at the direction of, the United States, or a duly authorized agency thereof.

“ SEC. 4b. It shall be unlawful for any member of a contract market, or for any correspondent, agent, or employee of any member, in or in connection with any order to make, or the making of, any contract of sale of any commodity in interstate commerce, or for future delivery, made, or to be made, on or subject to the rules of any contract market for or on behalf of any person if such contract for future delivery is or may be used for (1) hedging any transaction in interstate commerce in such commodity or the products or byproducts thereof, or (2) determining the price basis of any such transaction in interstate commerce in such commodity, or (3) delivering any such commodity sold, shipped, or received in interstate commerce for the fulfillment thereof

“(A) to cheat or defraud or attempt to cheat or defraud such person;

"(B) willfully to make or cause to be made to such person any false report or statement thereof, or willfully to enter or cause to be entered for such person any false record thereof;

“(C) willfully to deceive or attempt to deceive such person by any means whatsoever in regard to any such order or contract or the disposition or execution of any such order or contract, or in regard to any act of agency performed with respect to such order or contract for such person; or

“(D) to bucket such order, or to fill such order by offset against the order or orders of any other person, or willfully and knowingly and without the prior consent of such person to become the buyer in respect to any selling order of such person, or become the seller in respect to any buying order of such person.

“ SEC. 4c. It shall be unlawful for any person to offer to enter into, enter into, or confirm the execution of, any transaction involving any commodity, which is or may be used for (1) hedging any transaction in interstate commerce in such commodity or the products or byproducts thereof, or (2) determining the price basis of any such transaction in interstate commerce in such commodity, or (3) delivering any commodity sold, shipped, or received in interstate commerce for the fulfillment thereof

(A) if such transaction is, or is of the character, commonly known to the trade as a 'wash sale', 'cross trade', or “accommodation trade', or is a fictitious sale;

“(B) if such transaction is, or is of the character, commonly known to the trade as a 'privilege', 'indemnity', 'bid', 'offer', put', 'call ', 'advancé guaranty', or 'decline guaranty', or

"(C) if such transaction is used to cause any price to be reported, registered, or recorded which is not a true and bona fide price.

“ Nothing contained in this act shall be construed to prevent the exchange of futures in connection with cash commodity transactions or of futures for cash commodities, or of 'transfer trades' or ' office trades’ if made in accordance with board of trade rules applying to such transactions and such rules shall not have been disapproved by the Secretary of Agriculture.

“ SEC. 4d. It shall be unlawful for any person to engage as futures commission merchant in soliciting orders or accepting orders for the purchase or sale of any commodity for future delivery, or involving any contracts of sale or contracts to sell any commodity for future delivery, on or subject to the rules of any contract market unless

“(1) such person shall have been licensed by the Secretary of Agriculture as such futures commission merchant and such license shall not have expired nor been suspended nor revoked; and

“(2) such person shall, whether a member or nonmember of a contract market, treat and deal with all money, securities, and property received by such person to margin, guarantee, or secure the trades or contracts of any customer of such person or accruing to such customer as the result of such trades or contracts as belonging to such customer. Such money, securities, and property shall not be used to margin or guarantee the trades or contracts, or to secure or extend the credit, of any customer or person other than the one for whom the same are held ; Provided, however, That such money, securities, and property may be deposited or pledged separately and a part or commingled with the deposits and pledges of such person with any bank or trust company and that such share thereof as shall be necessary to margin, guarantee, or secure the contracts or trades of such customer carried with the clearing house organization of such contract market or with a member of such contract market, may be deposited or pledged with such clearing house organization or with such member.

“ SEC. 4e. It shall be unlawful for any person to act as floor broker in executing any orders for the purchase or sale of any commodity for future delivery or involving any contracts of sale or contracts to sell any commodity for future delivery, on or subject to the rules of any contract market unless such person shall have been licensed by the Secretary of Agriculture as such floor broker and such license shall not have expired nor been suspended por revoked.

“ SEC. 4f. (1) Any person desiring to be licensed as futures commission merchant or as floor broker hereunder shall make application to the Secretary of Agriculture, which application shall be made in form and manner to be prescribed by the Secretary of Agriculture, giving such information and facts as the Secretary of Agriculture may deem necessary concerning the business in which the applicant is or will be engaged, including, in the case of applications of futures commission merchants, the names and addresses of the managers of all branch offices and of all correspondents and agents engaged in soliciting or accepting no behalf of such applicant any orders for the purchase or sale of any commodity for future delivery on or subject to the rules of any board of trade, and including also the names of its officers and partners, if a partnership, and of its officers, directors, and/or stockholders, as the Secretary of Agriculture may direct, if a corporation. Such person, when licensed hereunder, shall likewise continue to report and furnish to the Secretary of Agriculture the above-mentioned information and such other information pertaining to his business as the Secretary of Agriculture may require.

"(2) Any person licensed as futures commission merchant hereunder shall post in a conspicuous place in each of the offices maintained by such person in the United States in which orders for the purchase or sale of any commodity for future delivery are solicited or accepted, the original or duplicate copy (issued by the Secretary of Agriculture) of such person's license as such futures commission merchant. All licenses shall expire on the 31st day of December of the year for which issued.

“ SEC. 4g. If any person licensed hereunder as futures commission merchant or floor broker shall violate any of the provisions of this act, or any of the rules or regulations of the Secretary of Agriculture hereunder, or shall fail or refuse to make any report required by the Secretary of Agriculture regarding the transactions of such person, or the transactions of the customers thereof, in commodities for future delivery on any board of trade in the United States or elsewhere, or shall fail or refuse to keep the books and records pertaining to such transactions in the form and manner required by the Secretary of Agriculture, or shall fail or refuse to keep such books and records open to inspection by any representative of the United States Department of Agriculture or the United States Department of Justice, the license of such person may be suspended or revoked after notice and hearing in accordance with the procedure described in paragraph (b) of section 6 of this act.

“ SEC. 4h. It shall be unlawful for any person

“(1) to conduct any office or place of business anywhere in the United States for the purpose of soliciting or accepting any orders for the purchase or sale of any commodity for future delivery, or for making or offering to make any contracts for the purchase or sale of any commodity for future delivery, or for conducting any dealings in commodities for future delivery that are or may be used for (A) hedging any transactions in interstate commerce in such commodity or the products or byproducts thereof, or (B) determining the price basis of any such transaction in interstate commerce, or (C) delivering any such commodity sold, shipped, or received in interstate commerce for the fulfillment thereof, if such orders, contracts, or dealings are executed or consummated otherwise than by or through a member of a contract market; or

“(2) falsely to represent such person to be a member of a contract market, or the representative or agent of such member, or to be a licensed futures commission merchant, or the agent of such licensed futures commission merchant, in soliciting or handling any order or contract for the purchase or sale of any commodity in interstate commerce or for future delivery, or falsely to represent in connection with the handling of any such order or contract that the same is to be or has been executed on, or by or through any member of, any contract market.

“ SEC. 4i. It shall be unlawful for any person to make any contract for the purchase or sale of any commodity for future delivery on or subject to the rules of any contract market unless such person shall report or cause to be reported to the properly designated officer in accordance with the rules and regulations of the Secretary of Agriculture (1) whenever such person shall directly or indirectly make such contracts with respect to any commodity, or any future of such commodity, during any one day in an amount equal to or in excess of such amount as shall be fixed from time to time by the Secretary of Agriculture; and (2) whenever such person shall directly or indirectly have or obtain a long or short position in any commodity or in any future of such commodity, equal to or in excess of such amount as shall be fixed from time to time by the Secretary of Agriculture. Such person shall also keep books and records of transactions coming within the provisions of (1) and (2) hereof, which books and records shall show complete details concerning all of such transactions, including the names and addresses of all persons having any interest therein, and shall be open at all times to inspection by any representative of the United States Department of Agriculture or the United States Department of Justice.

“ SEC. 4j. It shall be unlawful for any person to make or enter into, or be a party to as principal or agent, any contract of sale of any commodity for future delivery on or subject to the rules of any contract market, unless

(1) such contract shall be made prior to a date to be fixed by rule or regulation of the Secretary of Agriculture, which shall not be earlier than the fifteenth day of the delivery month to which such contract relates: Provided, That the Secretary of Agriculture may fix different dates for different commodities, and if as to any commodity no date is fixed, then as to such commodity the provisions of this paragraph shall not apply; and

"(2) such contract shall require, in accordance with the rules or regulations of the Secretary of Agriculture, that the party making delivery thereon of any commodity shall furnish to the party receiving the same, written notice of the date of delivery, which notice shall be given at least three business days prior to the date of delivery: Provided, That the Secretary of Agriculture, by rule or regulation, may require longer notice of delivery as to any commodity or commodities, not exceeding ten business days; and

“(3) such contract provides for the delivery thereon of a commodity of a grade or grades conforming to United States standards, if such standards shall have been officially promulgated."

SEC. 6. Section 5 of the Grain Futures Act (U. S. C., title 7, sec. 7) is amended by

(a) striking out the word “is ” after the word “board” in paragraph (a) and inserting in lieu thereof the word “are";

(b) striking out the word “purpose.” at the end of paragraph (a) and inserting in lieu thereof the following: “purpose: Provided, That any board of trade not so located shall be designated as a contract market' if such board of trade provides for the delivery of commodities on such contracts at a delivery point or points and upon terms and conditions approved by the Secretary of Agriculture."; and

(c) striking out the word “or” after the word “prices" in paragraph (d) and inserting in lieu thereof the word "and".

SEC. 7. The Grain Futures Act is amended by adding after section 5 (U. S. C., title 7, sec. 7) the following new sections:

“ SEC. 5a. Each board of trade which shall have been designated as a contract market’ under authority of this act shall

"(1) promptly furnish the Secretary of Agriculture copies of all bylaws, rules, regulations, and resolutions made or issued by it or by the governing board thereof or any committee, and of all changes and proposed changes therein,

“(2) allow inspection at all times by any authorized representative of the United States Department of Agriculture or United States Department of Justice of the books, records, and all minutes and journals of proceedings of such board of trade, its governing board and all committees, and of all subsidiaries and affiliates of such board of trade, which books, records, minutes, and journals of proceedings shall be kept for a period of three years from the date thereof, or for a longer period if the Secretary of Agriculture shall so direct, and

(3) when so directed by the Secretary of Agriculture, require the operators of warehouses in which or out of which any commodity is delivered on any contract for future delivery on such board of trade, to make such reports, keep

« AnteriorContinuar »