obe imposed becomes final, the exhange shall, within thirty (30) days hereafter provide written notice of uch action to the person against whom the action was taken and to the Commission. For purposes of this part, he written notice of disciplinary ction may be either a copy of a writen decision which accords with § 8.16, 8.18, or 8.19(c) (including opies of any materials incorporated by reference) of this chapter or other written notice which shall include:

(1) The name of the person against whom disciplinary action was taken;

(2) A statement of the reasons for he exchange action together with a isting of any rules which the person who was the subject of the disciplinary action was charged with having violated or which otherwise serve as the basis of the exchange action;

(3) A statement of the conclusions and findings made by the exchange with regard to each rule violation charged; or, in the event of settlement, a statement specifying those rule violations which the exchange has reason to believe were committed; and

(4) The terms of the disciplinary action.

(b) Delivery of the notice shall be made either personally to the person who was the subject of the disciplinary action or by mail to such person at his last known address. Copies of the notice shall be delivered to the Commission, either in person during normal business hours or by mail at its principal office in Washington, D.C.,

to the attention of the Division of Trading and Markets. Notice by mail to the Commission shall be effective upon receipt.

(c) Upon review of the notice, the Division of Trading and Markets may request that the exchange provide the record of the disciplinary proceeding or other adverse action or designated portions of the record, a brief statement of the evidence and testimony adduced to support the exchange's findings that a ruie or rules of the exchange were violated and such record ings, transcripts and other documents applicable to the particular disciplinary or other proceedings as may aid the Commission in the review of such proceeding and of the decision ren

dered therein. The exchange shall promptly advise the person who is the subject of the disciplinary action of the Division's request. Within thirty (30) days the exchange shall deliver the information requested to the Division and upon request to the person who is the subject of the disciplinary action. Delivery shall be in the manner prescribed by paragraph (b) of this section. A person subject to the disciplinary action requesting a copy of the information furnished to the Division, shall, if the exchange rules so provide, pay the exchange reasonable fees for the reproduction of his copy.

(d) Copies of the notice and the submission of any additional information provided pursuant to this section shall be certified as true and correct by a duly authorized officer, agent or employee of the exchange.

§9.12 Publication of disciplinary actions and rule violations.

Whenever an exchange suspends, expels, or otherwise disciplines or denies any person access to the exchange, it must make public its findings by disclosing at least the information contained in the notice required by § 9.11(a)(1)-(4) of this chapter. As soon as the disciplinary action becomes effective or within five days after an exchange provides the notice required by § 9.11 to the person against whom the action was taken, whichever occurs first, the exchange shall disclose the required information by posting a notice in a conspicuous place on its premises to which the members and the public regularly have access for a period of five consecutive business days. Thereafter, the exchange shall maintain and make available for public inspection a record of the information contained in the

disciplinary notice.

(Secs. 8a(5) and 8c of the Commodity Exchange Act, 7 U.S.C. 12a(5) and 12c (1976), as amended by the Futures Trade Act of 1978, Pub. L. 95-405, sec. 18, 92 Stat. 874-75 (1978))

[44 FR 34936, June 18, 1979]

ty imposed and the effective date of such penalty.

§ 8.20 Final decision.

Each exchange shall establish rules setting forth when a decision rendered pursuant to this Subpart B shall become the final decision of such exchange.

Subpart C-Summary Actions

§ 8.25 Member responsibility actions.

An exchange may suspend at any time, or take other summary action against, a person subject to its jurisdiction upon a reasonable belief that such immediate action is necessary to protect the best interest of the marketplace.

§ 8.26 Procedure for member responsibility actions.

An action pursuant to § 8.25 shall be taken in accordance with an exchange procedure which provides for the following:

(a) The respondent shall, whenever practicable, be served with a notice before the action is taken. If prior notice is not practicable, the respondent shall be served with a notice at the earliest possible opportunity. The notice shall:

(1) State the action,

(2) Briefly state the reasons for the action, and

(3) State the effective time and date and the duration of the action.

(b) The respondent shall have the right to be represented by legal counsel or any other representative of his choosing in all proceedings subsequent to the summary action taken pursuant to § 8.25.

(c) The respondent shall promptly be given opportunity for a subsequent hearing. The hearing shall be fair and shall be held before one or more persons authorized by the exchange to conduct hearings pursuant to this section. The hearing shall be conducted in accordance with the requirements set forth in §§ 8.17(a)(4)–(9) and (b).

(d) Promptly following the hearing provided for in paragraph (c) of this section, the exchange shall render a written decision based upon the

weight of the evidence contained in the record of the proceeding and shall provide a copy to the respondent. The decision shall include:

(1) A description of the summary action taken,

(2) The reasons for the summary action,

(3) A brief summary of the evidence produced at the hearing,

(4) Findings and conclusions,

(5) A determination that the summary action should be affirmed, modified or reversed, and

(6) A declaration of any action to be taken pursuant to the determination specified in paragraph (d)(5) of this section and the effective date and duration of such action.

(e) The rules of an exchange may permit the respondent to appeal promptly an adverse decision. Such rules shall be established in accordance with the requirements set forth in § 8.19.

§ 8.27 Violations of rules regarding decorum, submission of records or other similar activities.

An exchange may adopt rules which permit the enforcement staff or a designated committee of officials to summarily impose minor penalties against persons within its jurisdiction for violating rules regarding decorum, attire, the timely submission of accurate records required for clearing or verifying each day's transactions or other similar activities.

Sec.

Subpart B-Notice of Disciplinary Action

9.11 Form and content of notice.

9.12 Publication of disciplinary actions and

rule violations.

9.13 Effective date of disciplinary actions.

Subpart C-Initial Procedure With Respect to

Applications for Review

9.21 Application.

9.22 Stay pending review. 9.23 Answer.

Subpart D-Commission Review of Disciplinary or Other Adverse Action Initiated by Application

§ 9.2 Definitions.

For purposes of this part:

(a) "Disciplinary action" means the suspension, expulsion or other penalty imposed on a member of an exchange by that exchange or any action by an exchange which denies access to that exchange to any person; but does not include the imposition of a minor sanction against a person for violation of exchange rules of decorum, attire or similar rule.

(b) "Disciplinary proceeding" means any formal or informal proceeding by an exchange which results in a disciplinary action.

action.

9.31 Institution of review.

= 9.32 Docketing of the proceeding.

9.33 Consolidation.

9.34 Record.

9.35 Briefs.

9.36 Oral argument.

9.37 Decision by the Commission.

Subpart E-Commission Review of Disciplinary

Action on Its Own Motion

9.50 Institution of review.

AUTHORITY: Secs. 2(a)(4) and (11), 8a(5) and 8c of the Commodity Exchange Act, 7 U.S.C. 4a(c) and (j), 12a(5) and 12c (1976), as amended by the Futures Trading Act of 1978, Pub. L. No. 95-405 Sec. 18, 92 Stat. 874-75 (1978).

SOURCE: 43 FR 59350, Dec. 20, 1978, unless otherwise noted.

Subpart A-General Provisions

§ 9.1 Scope of rules.

This part governs the review by the Commission, pursuant to Section 8c of the Commodity Exchange Act, as amended, of any suspension, expulsion, disciplinary or access denial action, or other adverse action by an exchange, upon application of a member of an exchange who is suspended, expelled, or otherwise disciplined or of any person who is denied access to an exchange or who is otherwise adversely affected by any other action of an exchange. Under Subpart E the Commission may also institute review of an exchange disciplinary action on its own motion.

Commission which, among other things, reviews notices of disciplinary action under this part.

(d) "Exchange" means any board of trade which has been designated as a contract market for one or more commodities pursuant to Section 5 of the Commodity Exchange Act.

(e) "Hearing Clerk" means the employee of the Commission designated as such in the Commission's Office of Hearings and Appeals.

(f) "Member of an exchange” means any person who is admitted to membership or has been granted membership privileges on an exchange, any employee, officer, partner, director or affiliate of such member or person with membership privileges including any agent or associated person, and any other person under the supervision or control of such member or person with membership privileges.

(g) "Party" means both the person who has been the subject of a disciplinary action or other adverse action by an exchange and that exchange.

(h) "Record of the exchange disciplinary proceeding or other adverse action" means all testimony, exhibits, papers and records produced at or filed in an exchange disciplinary proceeding or served on a party to that proceeding; all documents, minutes or other exchange records serving as a basis for or reflecting the deliberations concerning other adverse action taken by an exchange; and a transcript or recording of any oral argument made before any body of the exchange in connection with the disciplinary proceeding or other adverse action.

(i) "Rules of an exchange” means any constitutional provision, article of incorporation, bylaw, rule, regulation, resolution, interpretation, or stated policy of an exchange or instrument corresponding thereto.

(j) "Rules of Practice" mean the Commission's Rules of Practice contained in Part 10 of this chapter.

§ 9.3 Provisions incorporated by refer

ence.

The following provisions of the rules of practice apply to this part: Section 10.4 (Business Address; Hours), Section 10.5 (Computation of Time), Section 10.6 (Changes in Time Permitted for Filing), Section 10.7 (Date of Entry of Orders), Section 10.10 (Ex Parte Communications), Section 10.11 (Appearance in Adjudicatory Proceedings), Section 10.12 (a), (b), (c), (d), (e)(1)-(e)(4), (e)(6), (f) and (g) (Service and Filing of Documents; Form and Execution) and such other sections of the rules of practice as the Commission shall declare to be applicable during a proceeding under this part. For purposes of this part, functions assigned by the rules of practice to an "Admininstrative Law Judge" shall be performed by the Commission.

§ 9.4 Default by the parties.

In the event that either party fails to file any docu:nent or make any appearance which is required under this part, the Commission, in its discretion, may dismiss the proceeding before it, or, based on the record before it, may affirm, modify, or set aside the exchange decision or remand the matter for further proceedings before the exchange, as it deems appropriate.

§9.5 Settlement.

At any time before there has been a final determination by the Commission of any review proceeding sought or initiated under this part, the parties may propose offers of settlement. All offers of settlement shall be in writing and shall be filed with the Commission. All offers of settlement shall:

(b) Admit the jurisdiction of the Commission with respect to the matters stated in the order,

(c) Include a waiver of (1) all subsequent procedures in the proceeding, (2) judicial review, and (3) any objection to staff participation in the Commission's consideration of the offer,

(d) Stipulate the record basis on which an order may be entered, and

(e) Consent to the entry of an order reflecting the terms of the settlement agreed upon.

The Commission will issue an order based on the settlement which will terminate the proceeding before the Commission as to all parties. Notwithstanding the entry of such an order, the Commission may undertake review of the exchange action on its own motion.

§ 9.6 Waiver of rules.

(a) To prevent undue hardship on any party or for other good cause the Commission may waive any rule in Subparts A through D of this part in a particular case and may order proceedings in accordance with its direction upon a determination that no party will be prejudiced and that the ends of justice will be served. Reasonable notice shall be given to all parties of any action taken pursuant to this provision.

(b) The Commission hereby delegates, until the Commission orders otherwise, to the General Counsel and such person or persons under his supervision as he may designate from time to time, the authority to waive or modify any of the requirements of §9.35 and to waive or modify the requirements of the Commission's rules of practice incorporated by § 9.3 insofar as such requirements pertain to exchanges in time permitted for filing, and to the form, execution, service and filing of documents.

Subpart B-Notice of Disciplinary Action

§ 9.11 Form and content of notice.

instituting review,

to be imposed becomes final, the exchange shall, within thirty (30) days thereafter provide written notice of such action to the person against whom the action was taken and to the Commission. For purposes of this part, the written notice of disciplinary action may be either a copy of a written decision which accords with §§ 8.16, 8.18, or 8.19(c) (including copies of any materials incorporated by reference) of this chapter or other written notice which shall include:

(1) The name of the person against whom disciplinary action was taken;

(2) A statement of the reasons for the exchange action together with a listing of any rules which the person who was the subject of the disciplinary action was charged with having violated or which otherwise serve as the basis of the exchange action;

(3) A statement of the conclusions and findings made by the exchange with regard to each rule violation charged; or, in the event of settlement, a statement specifying those rule violations which the exchange has reason to believe were committed; and

(4) The terms of the disciplinary action.

(b) Delivery of the notice shall be made either personally to the person who was the subject of the disciplinary action or by mail to such person at his last known address. Copies of the notice shall be delivered to the Commission, either in person during normal business hours or by mail at its principal office in Washington, D.C., to the attention of the Division of Trading and Markets. Notice by mail to the Commission shall be effective upon receipt.

(c) Upon review of the notice, the Division of Trading and Markets may request that the exchange provide the record of the disciplinary proceeding or other adverse action or designated portions of the record, a brief statement of the evidence and testimony adduced to support the exchange's findings that a rule or rules of the exchange were violated and such record ings, transcripts and other documents applicable to the particular disciplinary or other proceedings as may aid the Commission in the review of such proceeding and of the decision ren

dered therein. The exchange shall promptly advise the person who is the subject of the disciplinary action of the Division's request. Within thirty (30) days the exchange shall deliver the information requested to the Division and upon request to the person who is the subject of the disciplinary action. Delivery shall be in the manner prescribed by paragraph (b) of this section. A person subject to the disciplinary action requesting a copy of the information furnished to the Division, shall, if the exchange rules so provide, pay the exchange reasonable fees for the reproduction of his сору.

(d) Copies of the notice and the submission of any additional information provided pursuant to this section shall be certified as true and correct by a duly authorized officer, agent or employee of the exchange.

§9.12 Publication of disciplinary actions and rule violations.

Whenever an exchange suspends, expels, or otherwise disciplines or denies any person access to the exchange, it must make public its findings by disclosing at least the information contained in the notice required by § 9.11(a) (1)-(4) of this chapter. As soon as the disciplinary action becomes effective or within five days after an exchange provides the notice required by § 9.11 to the person against whom the action was taken, whichever occurs first, the exchange shall disclose the required information by posting a notice in a conspicuous place on its premises to which the members and the public regularly have access for a period of five consecutive business days. Thereafter, the exchange shall maintain and make available for public inspection a record of the information contained in the disciplinary notice.

(Secs. 8a(5) and 8c of the Commodity Exchange Act, 7 U.S.C. 12a(5) and 12c (1976), as amended by the Futures Trade Act of 1978, Pub. L. 95-405, sec. 18, 92 Stat. 874-75 (1978))

[44 FR 34936, June 18, 1979]