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U.S. Code as of:
01/03/05
Section 7a-3. Exempt boards of trade
(a) Election to register with the Commission
A board of trade that meets the requirements of subsection (b) of
this section may operate as an exempt board of trade on receipt
from the board of trade of a notice, provided in such manner as the
Commission may by rule or regulation prescribe, that the board of
trade elects to operate as an exempt board of trade. Except as
otherwise provided in this section, no provision of this chapter
(other than subparagraphs (C) and (D) of sections 2(a)(1) and
16(e)(2)(B) of this title) shall apply with respect to a contract
of sale of a commodity for future delivery (or option on such a
contract) traded on or through the facilities of an exempt board of
trade.
(b) Criteria for exemption
To qualify for an exemption under subsection (a) of this section,
a board of trade shall limit trading on or through the facilities
of the board of trade to contracts of sale of a commodity for
future delivery (or options on such contracts or on a commodity) -
(1) for which the underlying commodity has -
(A) a nearly inexhaustible deliverable supply;
(B) a deliverable supply that is sufficiently large, and a
cash market sufficiently liquid, to render any contract traded
on the commodity highly unlikely to be susceptible to the
threat of manipulation; or
(C) no cash market;
(2) that are entered into only between persons that are
eligible contract participants at the time at which the persons
enter into the contract; and
(3) that are not contracts of sale (or options on such a
contract or on a commodity) for future delivery of any security,
including any group or index of securities or any interest in, or
based on the value of, any security or any group or index of
securities.
(c) Antimanipulation requirements
A party to a contract of sale of a commodity for future delivery
(or option on such a contract or on a commodity) that is traded on
an exempt board of trade shall be subject to sections 6b, 6c(b),
6o, 9, 15, and 13(a)(2) of this title, and the Commission shall
enforce those provisions with respect to any such trading.
(d) Price discovery
If the Commission finds that an exempt board of trade is a
significant source of price discovery for transactions in the cash
market for the commodity underlying any contract, agreement, or
transaction traded on or through the facilities of the board of
trade, the board of trade shall disseminate publicly on a daily
basis trading volume, opening and closing price ranges, open
interest, and other trading data as appropriate to the market.
(e) Jurisdiction
The Commission shall have exclusive jurisdiction over any
account, agreement, contract, or transaction involving a contract
of sale of a commodity for future delivery, or option on such a
contract or on a commodity, to the extent that the account,
agreement, contract, or transaction is traded on an exempt board of
trade.
(f) Subsidiaries
A board of trade that is designated as a contract market or
registered as a derivatives transaction execution facility may
operate an exempt board of trade by establishing a separate
subsidiary or other legal entity and otherwise satisfying the
requirements of this section.
(g) Misrepresentation of status
An exempt board of trade that meets the requirements of
subsection (b) of this section shall not represent to any person
that the board of trade is registered with, or designated,
recognized, licensed, or approved by the Commission.
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