The following terms, as used in the Commodity Exchange Act or in the rules and regulations in this chapter, shall have the meanings hereby assigned to them, unless the context otherwise requires:

(a) Board of Trade. This term means any exchange or association, whether incorporated or unincorporated, of persons who shall be engaged in the business of buying or selling any commodity or receiving the same for sale on consignment.

(b) Business day. This term means any day other than a Sunday or holiday. In all notices required by the act or by the rules and regulations in this chapter to be given in terms of business days the rule for computing time shall be to exIclude the day on which notice is given and include the day on which shall take place the act of which notice is given.

(c) Clearing member. This term means any person who is a member of, or enjoys the privilege of clearing trades in his own name through, the clearing organization of a contract market.

(d) Clearing organization. This term means the person or organization which acts as a medium for clearing transactions in commodities for future delivery, or for effecting settlements of contracts for future delivery, for and between members of any board of trade.

means

(e) Commodity. This term and includes wheat, cotton, rice, corn, oats, barley, rye, flaxseed, grain sorghums, millfeeds, butter, eggs (including shell eggs, frozen whole eggs, frozen plain egg whites, and frozen plain egg yolks), onions, Irish potatoes, wool, wool tops, fats and oils (including lard, tallow, cottonseed oil, peanut oil, soybean oil, and all other fats and oils), cottonseed meal, cottonseed, peanuts, soybeans, and soybean meal.

(f) Commodity Exchange Act; the act. These terms mean the Commodity Exchange Act approved September 21, 1922 (42 Stat. 998), as amended June 15, 1936 (49 Stat. 1491; 7 U.S.C. 1-17a),

and other legislation supplementary thereto and amendatory thereof.

(g) Commodity Exchange Authority. This term means the Commodity Exchange Authority, United States Department of Agriculture.

(h) Contract market. The term means a board of trade designated by the Secretary of Agriculture as a contract market under the Commodity Exchange Act.

(i) Contract of sale. This term includes sales, purchases, argeements of sale or purchase, and agreements to sell or purchase.

(j) Controlled account. An account shall be deemed to be controlled by a person if such person by power of attorney or otherwise actually directs trading for such account.

(k) Customer; commodity customer. These terms have the same meaning and refer to a customer trading in any commodity named in the definition of commodity in paragraph (e) of this section.

(1) Delivery month. This term means the month of delivery specified in a contract of sale of any commodity for future delivery.

(m) Executing for others. This term as used in the definition of floor broker means executing by any person of orders, including his own, for the purchase or sale of any commodity for future delivery in the name of, or for the account of, more than one principal (clearing member).

(n) Floor broker. This term means any person who, in or surrounding any pit, ring, post, or other place provided by a contract market 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.

(0) Future delivery. This term does not include any sale of a cash commodity for deferred shipment or delivery.

(p) Futures commission merchant. This term means 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.

(q) Member of a contract market. This term means and includes 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.

(r) Net equity. This term means the credit balance which would be obtained by combining the commodity margin balance of any person with the net profit or loss, if any, accruing on the open trades or contracts of such person.

(s) Net deficit. This term means the debit balance which would be obtained by combining the commodity margin balance of any person with the net profit or loss, if any, accruing on the open trades or contracts of such person.

(t) Open contracts. This term means contracts of purchase or sale of any commodity made by or for any person on or subject to the rules of a board of trade for future delivery during a specified month or delivery period which have not been fulfilled by delivery nor offset by other contracts of sale or purchase in the same commodity and delivery month.

(u) Person. This term includes individuals, associations, partnerships, corporations, and trusts.

(v) Act Administrator. This term means the Administrator of the Commodity Exchange Authority, United States Department of Agriculture, in his capacity as Administrator of the Commodity Exchange Act, or any officer or employee of the Commodity Exchange Authority to whom he has heretofore lawfully delegated or may hereafter lawfully delegate the authority to act in his stead.

(w) Secretary of Agriculture. This term means the Secretary of Agriculture or any person to whom authority has heretofore lawfully been delegated, or to whom authority may hereafter lawfully be delegated, to act in his stead.

(Sec. 2(a), 42 Stat. 998, as amended; 7 TTS.C. 2). [13 FR. 7834, Dec. 18, 1948, as aded at 19 F.R. 6880, Oct. 27, 1954; 20 85, Aug. 31, 1955; 26 F.R. 1662, Feb. 25,

ADMINISTRATION

§ 1.4 Duties to be performed by Act Administrator.

The Act Administrator shall perform for and under the supervision of the Secretary of Agriculture such duties as the Secretary may require in enforcing the provisions of the act and of the rules and regulations promulgated thereunder. § 1.5 Information confidential; disclosures to contract-market committees and officials.

No officer or employee of the Department of Agriculture shall publish, divulge, or make known in any manner, except insofar as may be required in the performance of his official duties or by a court of competent jurisdiction, any facts or information regarding the business of any person which may come to the knowledge of such officer or employee through any inspection or examination of the reports or records of, or through any information given by, any person pursuant to the Commodity Exchange Act or rules and regulations in this chapter: Provided, however, That this prohibition shall not apply to disclosures made in good faith to the Business Conduct Committee or other proper committee or official of a contract market of matters in respect to which such contract market has responsibility or duty under the Commodity Exchange Act, or which, in the judgment of the Act Administrator, adversely affect such market or are prejudicial to the interests of producers or consumers.

(Sec. 8, 42 Stat. 1003, as amended; 7 U.S.C. 12)

or acceptance of orders for the purchase or sale of any commodity for future delivery, or involving any contracts of sale of any commodity for future delivery, on or subject to the rules of any contract market, unless such person shall have secured a certificate of registration as futures commission merchant under the Commodity Exchange Act issued by the Secretary of Agriculture and countersigned by the Act Administrator and such registration shall not have expired, been suspended, or been revoked. Such registration shall be required of every person engaged as described in this subpart irrespective of whether accounting records relating to such orders and trades and contracts resulting therefrom are maintained by other futures commission merchants to whom such orders are transmitted for execution or clearance. (Sec. 4d, as added by sec. 5, 49 Stat. 1494; 7 U.S.C. 6d)

§ 1.8 Registration required of floor brokers.

No person shall act as floor broker in executing any orders for the purchase of any commodity for future delivery, or involving any contracts of sale of any commodity for future delivery, on or subject to the rules of any contract market unless such person shall have secured a certificate of registration as floor broker under the Commodity Exchange Act issued by the Secretary of Agriculture and countersigned by the Act Administrator and such registration shall not have expired, been suspended, or been revoked.

(Sec. 4e, as added by sec. 5, 49 Stat. 1495; 7 U.S.C. 6e)

on Form 2-R. Each application shall be executed and filed in accordance with the instructions appearing on the prescribed form.

(b) Every application for registration as futures commission merchant other than an application necessitated solely by reason of a change in the name of the registrant shall be accompanied by the applicant's latest statement of financial condition. If such statement is as of date more than 6 months prior to the date application is filed, the applicant shall file within 3 months following registration a statement of financial condition as of a date not more than 6 months prior to the date of filing such statement: Provided, That, for good cause shown, the Act Administrator may extend for a reasonable period the time for filing any statement of financial condition required under the provisions of this section.

(c) Every financial statement shall bear the certification of the applicant in the following form, to wit:

tance.

Each application for registration, or renewal thereof, as futures commission merchant shall be accompanied by a fee of $30. Each application for registration, or renewal thereof, as floor broker shall be accompanied by a fee of $15. Duplicates of registration certificates may be procured on request upon payment of $5 for each duplicate. Fees shall be remitted by money order, bank draft, or check, payable to the Commodity Exchange Authority, U.S.D.A. Applications and fees shall be forwarded to the Commodity Exchange Authority, United States Department of Agriculture, Washington 25, D.C.

[20 F.R. 7774, Oct. 15, 1955, as amended at 23 F.R. 6879, Sept. 6, 1958]

§ 1.12 Posting of registration certificate.

Every person registered as futures commission merchant under the act shall:

(a) Post in a conspicuous place in each office in the United States (except an office of another registered futures commission merchant) maintained by such person in which orders for the purchase or sale of any commodity for future delivery are solicited or accepted, the original or a duplicate (issued by the Secretary of Agriculture) of such registrant's registration certificate as futures commission merchant; and

(b) Post in a conspicuous place in each office in the United Sttaes in which orders for the purchase or sale of any commodity for future delivery are solicited or accepted for, and in the name of, such registrant, a duplicate (issued by the Secretary of Agriculture) of such registrant's registration certificate as futures commission merchant.

(Sec. 4f (2), as added by sec. 5, 49 Stat. 1495; 7 U.S.C. 6f(2)) [13 F.R. 7834, Dec. 18, 1948, as amended at 14 F.R. 2851, June 1, 1949; 20 F.R. 7774, Oct. 15, 1955]

§ 1.13 Deposit of registration fee; fee not subject to refund after registration; form of certificate.

Upon receipt of an application for registration (or renewal thereof) the Secretary of Agriculture will, if the application be approved, issue a certificate of registration certifying that the registrant has registered under the act as futures commission merchant or as floor broker. The registration fee (including the fee for duplicate copies of the certificate of registration, if any) so tendered, shall be deposited in a special deposit account until the registration is finally issued or denied. If registration be denied, the fee shall be returned to the applicant, but if issued the fee shall be deposited in the Treasury of the United States as a miscellaneous receipt and will not thereafter be subject to refund. Each registration certificate shall bear a serial number, the signature of the Secretary of Agriculture, be issued under the seal of the United States Department of Agriculture, and be countersigned by the Act Administrator.

§ 1.14 Deficiencies, inaccuracies,

changes, to be reported by futures commission merchants and floor brokers.

(a) Each registrant shall file promptly with the Commodity Exchange Authority a statement on Form 3-R to correct any deficiency or inaccuracy in the registrant's application for registration, or any supplemental statement thereto, and to report any change which renders no longer accurate and current the information contained in any of the following items of such application or supplemental statement:

(1) With respect to a futures commission merchant. Item 2 (address of principal office), item 3 (books and records), item 4 (form of organization), item 9 (addresses of branch offices and names of managers thereof), item 10 (agents authorized to solicit or accept commodity futures orders for, and in the name of, the registrant), and item 13 (refusal of, or suspension or expulsion from commodity-exchange membership). Any change in the personnel of a partnership resulting from the death, withdrawal, or addition of a partner which, as a matter of law, does not create a new partnership may be reported on Form 3-R, as provided in § 1.15.

(2) With respect to a floor broker. Item 2 (business address), item 5 (names and addresses of clearing members through whom registrant clears commodity futures transactions for his own account), and item 6 (refusal of, or suspension or expulsion from, commodityexchange membership).

(b) All statements on Form 3-R shall be prepared and filed in accordance with the instructions appearing thereon. [22 F. R. 8899, Nov. 6, 1957]

§ 1.15 Changes requiring new registration.

A new registration shall be required in the event of a change:

(a) In the name of the registrant; (b) In the form of organization of the registrant;

(c) In the ownership of the business of the registrant in the case of a sole proprietorship; and

(d) In the personnel of a partnership resulting from the death, withdrawal, or addition of a partner: Provided, That if such change does not, as a matter of law, create a new partnership, it may be reported by the registrant to the Commodity Exchange Authority on Form 3-R within 10 days of the date of such change, and if so reported a new registration shall not be required.

§ 1.16 Registrations expire December 31 of each year.

All registrations shall automatically terminate at midnight on December 31 of the year for which issued, unless sooner suspended or revoked in accordance with the provisions of the act and the rules and regulations thereunder. (Sec. 4f(1), as added by sec. 5, 49 Stat. 1495; 7 U.S.C. 6f (1))

CUSTOMERS' FUNDS

§ 1.20 Customers' funds to be segregated and separately accounted for. All money received by a futures commission merchant to margin, guarantee, or secure the trades or contracts of commodity customers and all money accruing to such customers as the result of such trades or contracts shall be separately accounted for and be segregated as belonging to such customers. Such funds, when deposited with any bank or trust company, shall be deposited under an account name which will clearly show that they are customers' funds segregated as required by the Commodity Exchange Act, and under a written agreement with such bank or trust company waiving any claim, lien, or right of set-off of any nature which such bank or trust company might otherwise have or obtain against such funds. An executed copy of such agreement shall be kept by the futures commission merchant in accordance with the requirements of § 1.31. If such funds are deposited with a clearing organization of a contract market, they shall be deposited under an account name which will clearly show that they are customers' funds segregated as required by the Commodity Exchange Act. Under no circumstances shall any portion of commodity customers' funds be obligated to the clearing organization of a contract market, or to any member of a contract market, except to margin,

guarantee, secure, transfer, adjust, or settle trades and contracts made in behalf of such commodity customers. [27 F.R. 12672, Dec. 21, 1962]

§ 1.21

Care of money and equities accruing to customer.

All money received directly or indirectly by, and all money and equities accruing to, a futures commission merchant from any clearing organization of any contract market, or from any member thereof or from any member of a contract market, incident to or resulting from any trade or contract in commodity futures made by or through such futures commission merchant in behalf of any customer shall be considered as accruing to such customer within the meaning of section 4d (2) of the Commodity Exchange Act. Such money and equities shall be treated and dealt with as belonging to such customer in accordance with the provisions of the act. Money and equities accruing in connection with customers' open trades or contracts need not be separately credited to individual customers' accounts but may be treated and dealt with as belonging undivided to all customers having open trades or contracts which if closed would result in a credit to such customers.

(Sec. 4d (2), as added by sec. 5, 49 Stat. 1494; 7 U.S.C. 6d (2))

§ 1.22

Use of money, securities, or property of customer restricted.

No futures commission merchant shall use, or permit the use of, the money, securities, or property of one customer to margin or settle the trades or contracts, or to secure or extend the credit, of any person other than such customer. The net equity of one customer shall not be used to carry the trades or contracts or to offset the net deficit of any other customer or person or to carry the trades or offset the net deficit of the same customer in goods or property not included in the term "commodity" as defined in § 1.2(e).

(Sec. 4d (2), as added by sec. 5, 49 Stat. 1494; 7 U.S.C. 6d (2))

§ 1.23 Interest of futures commission merchant in segregated funds, additions and withdrawals.

The prohibition in section 4d (2) of the Commodity Exchange Act (49 Stat. 1494; 7 U.S.C. 6d) against commingling cus