(4) The formal rules of evidence need not apply nevertheless, the probronce that the denipi.nary commit- cedures for the hearing may not be so The Tolations upon which the penalty If an offer of setiement is accepted by the daciplinary committee, it stail issue a written decision specifyne the nine violations it has reason to belere were committed and any penalty to be imposed. Where applicable, the decision shail aso include a statemene that the respondent has accepten the penalties imposed without etener admitting or denying the rule Solaions. informal as to deny a fair hearing. (5) The enforcement staff shall be a party to the hearing and shali present its case on those charges and penalties which are the subject of the hearing. (6) The respondent shall be entitled to appear personally at the hearing. (7) The respondent shall be entitled to cross-examine any persons appearing as witnesses at the hearing. (8) The respondent shall be entitled to call witnesses and to present such evidence as may be relevant to the charges. (9) The exchange shall require persons within its jurisdiction who are 12 called as witnesses to appear at the hearing and to produce evidence. It shall make reasonable efforts to secure the presence of all other persons called as witnesses whose testimony would be relevant. (10) If the respondent has requested a hearing, a substantially verbatim record of the hearing shall be made and shall become a part of the record of the proceeding. The record must be one that is capable of being accurately transcribed; however, it need not be transcribed unless the transcript is requested by Commission staff or the respondent, the decision is appealed under § 8.19, or is reviewed by the Commission pursuant to section 8c of the Act or Part 9 of this chapter. In all other instances a summary record of a hearing is permitted. (i) The rules of an exchange may provide that the cost of transcribing the record of the hearing shall be borne by a respondent who requests the transcript, appeals the decision pursuant to $8.19, or whose application for Commission review of the disciplinary action has been granted under Part 9 of this chapter. In all other instances, the cost of transcribing the record shall be borne by the exchange. (b) The rules of an exchange may provide that a penalty may be summarily imposed upon any person within its jurisdiction whose actions impede the progress of a hearing. §8.18 Decision. Promptly following a hearing conducted in accordance with § 8.17, the disciplinary committee 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: (a) The notice of charges or a summary of the charges; (b) The answer, if any, or a summary of the answer; (c) A brief summary of the evidence produced at the hearing or, where appropriate, incorporation by reference of the investigation report; (d) A statement of findings and conclusions with respect to each charge, including the specific rules which the respondent is found to have violated; and (e) A declaration of any penalty imposed and the effective date of such penalty. §8.19 Appeal. The rules of an exchange may permit a respondent to appeal promptly an adverse decision of a disciplinary committee in all or in certain classes of cases. Such rules may require a respondent's notice of appeal to be in writing and to specify the findings, conclusions, and/or penalty to which objection is taken. If the rules of an exchange permit appeal, they shall provide for the following: (a) The exchange shall establish a board of appeals which shall be authorized to hear appeals of respondents. In addition, the rules of an exchange may provide that the board of appeals may, on its own initiative, order review of a decision by the disciplinary committee within a reasonable period of time after the decision has been rendered. (b) No member of the board of appeals shall serve on an appeal or review panel if such member participated in any prior stage of the disciplinary proceeding or if he or any person or firm with which he is affiliated has a financial, personal, or other direct interest in the matter. The rules of an exchange may provide that the appeal or review proceeding may be conducted before all of the members of the board of appeals or a panel thereof. Except for good cause shown, the appeal or review shall be conducted solely on the record before the disciplinary committee, the written exceptions filed by the parties, and the oral or written arguments of the parties. (c) Promptly following the appeal or review proceeding, the board of ap peals shall issue a written decision and shall provide a copy to the respondent. The decision shall include a statement of findings and conclusions with respect to each charge or penalty reviewed, including the specific rules which the respondent was found to have violated by the disciplinary committee, and a declaration of any penal 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 weight of the evidence contained i the record of the proceeding and shal provide a copy to the respondent. Th decision shall include: (1) A description of the summar action taken, (2) The reasons for the summar action, (3) A brief summary of the evidenc produced at the hearing, (4) Findings and conclusions, (5) A determination that the sum mary action should be affirmed, modi fied 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 simi (3) State the effective time and date lar activities. 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 § 8.28 Final decision. Each exchange shall establish rules setting forth when a decision rendered pursuant to this Subpart C shall become the final decision of such exchange. PART 9-RULES RELATING TO Sec. Subpart A-General Provisions 9.1 Scope of rules. 9.2 Definitions. 9.3 Provisions incorporated by reference. 9.4 Default by the parties. 9.5 Settlement. 9.6 Waiver of rules. ec. Subpart B-Notice of Disciplinary Action 11 Form and content of notice. 12 Publication of disciplinary actions and rule violations. 13 Effective date of disciplinary actions. Subpart C-Initial Procedure With Respect to Applications for Review 21 Application. 22 Stay pending review. .23 Answer. ubpart D-Commission Review of Disciplinary or Other Adverse Action Initiated by Application (c) "Division of Trading and Mar1.30 Determination to review exchange kets" means that division within the (a) Whenever an exchange decision pursuant to which a disciplinary (a) Acknowledge service of the order action or other disciplinary penalty (as defined in § 8.03(i)) of this chapter is 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 (Арpearance 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 th Commission with respect to the mat ters stated in the order, (c) Include a waiver of (1) all subse quent procedures in the proceeding (2) judicial review, and (3) any objec tion to staff participation in the Com mission's consideration of the offer, (d) Stipulate the record basis which an order may be entered, and (e) Consent to the entry of an orde reflecting the terms of the settlemen 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, |