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U.S. Code as of:
01/03/05
Section 6j. Restrictions on dual trading in security futures products on designated contract markets and registered derivatives transaction execution facilities
(a) Issuance of regulations
The Commission shall issue regulations to prohibit the privilege
of dual trading in security futures products on each contract
market and registered derivatives transaction execution facility.
The regulations issued by the Commission under this section -
(1) shall provide that the prohibition of dual trading
thereunder shall take effect upon issuance of the regulations;
and
(2) shall provide exceptions, as the Commission determines
appropriate, to ensure fairness and orderly trading in security
futures product markets, including -
(A) exceptions for spread transactions and the correction of
trading errors;
(B) allowance for a customer to designate in writing not less
than once annually a named floor broker to execute orders for
such customer, notwithstanding the regulations to prohibit the
privilege of dual trading required under this section; and
(C) other measures reasonably designed to accommodate unique
or special characteristics of individual boards of trade or
contract markets, to address emergency or unusual market
conditions, or otherwise to further the public interest
consistent with the promotion of market efficiency, innovation,
and expansion of investment opportunities, the protection of
investors, and with the purposes of this section.
(b) "Dual trading" defined
As used in this section, the term "dual trading" means the
execution of customer orders by a floor broker during the same
trading session in which the floor broker executes any trade in the
same contract market or registered derivatives transaction
execution facility for -
(1) the account of such floor broker;
(2) an account for which such floor broker has trading
discretion; or
(3) an account controlled by a person with whom such floor
broker has a relationship through membership in a broker
association.
(c) "Broker association" defined
As used in this section, the term "broker association" shall
include two or more contract market members or registered
derivatives transaction execution facility members with floor
trading privileges of whom at least one is acting as a floor
broker, who -
(1) engage in floor brokerage activity on behalf of the same
employer,
(2) have an employer and employee relationship which relates to
floor brokerage activity,
(3) share profits and losses associated with their brokerage or
trading activity, or
(4) regularly share a deck of orders.
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