Subparts A through D of this part in a particular case and may order proceedngs in accordance with its direction ipon a determination that no party will be prejudiced and that the ends of ustice 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.

(a) Whenever an exchange decision pursuant to which a disciplinary action or other disciplinary penalty (as defined in § 8.03(i)) of this chapter is 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 vio

lations 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 recordings, 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 rendered 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.

(Approved by the Office of Management and Budget under control number 30380022)

53-047 0-85--6

that except for good cause shown no hearing shall be permitted on a penalty imposed pursuant to subparagraph (a)(1) of this section.

(c) The rules of an exchange may provide that if a respondent fails to request a hearing within the period of time stated in the notice he shall be deemed to have accepted the penalty. (Approved by the Office of Management and Budget under control number 30380022)

[43 FR 41950, Sept. 19, 1978, as amended at 46 FR 63036, Dec. 30, 1981]

§ 8.15 Denial of charges and right to hearing.

In every instance where the respondent has requested a hearing on a charge which is denied, or on a penalty set by the disciplinary committee under § 8.14(a)(2), he shall be given an opportunity for a hearing in accordance with the requirements of § 8.17. The exchange rules may provide that, except for good cause, the hearing shall be concerned only with those charges denied and/or penalties set by the disciplinary committee under § 8.14(a)(2) for which a hearing has been requested.

(a) The rules of an exchange may permit a respondent to submit a written offer of settlement to the disciplinary committee at any time after the investigation report is completed. The disciplinary committee may accept the offer of settlement, but may not alter its terms unless the respondent agrees.

(b) The rules of an exchange may provide that the disciplinary committee, in its discretion, may permit the respondent to accept a penalty without either admitting or denying the rule violations upon which the penalty is based.

(c) If an offer of setlement is accepted by the disciplinary committee, it shall issue a written decision specifying the rule violations it has reason to believe were committed and any penalty to be imposed. Where applicable, the decision shall also include a statement that the respondent has accepted the penalties imposed without either admitting or denying the rule violations.

(d) The respondent may withdraw his offer of settlement at any time before final acceptance by the discipli nary committee. If an offer is withdrawn after submission, or is rejected by the disciplinary committee, the respondent shall not be deemed to have made any admissions by reason of the offer of settlement and shall not be otherwise prejudiced by having submitted the offer of settlement.

(Approved by the Office of Management and Budget under control number 30380022)

[43 FR 41950, Sept. 19, 1978, as amended a 46 FR 63036, Dec. 30, 1981]

§ 8.17 Hearing.

(a) The following minimum requirements shall apply to any hearing required by this subpart:

(1) The hearing shall be fair and shall be conducted before members of the disciplinary committee. The hear ing may be conducted before all of the members of the disciplinary commit tee or a panel thereof, but no member of the disciplinary committee may serve on the committee or panel if he or any person or firm with which he is affiliated has a financial, personal, or other direct interest in the matter under consideration.

(2) The respondent shall be entitled in advance of the hearing to examine all books, documents, or other tangible evidence in the possession or under the control of the exchange which are to be relied upon by the enforcement staff in presenting the charges con tained in the notice of charges or which are relevant to those charges. (3) The hearing shall be promptly convened after reasonable notice to the respondent.

(4) The formal rules of evidence need not apply; nevertheless, the procedures for the hearing may not be so informal as to deny a fair hearing.

(5) The enforcement staff shall be a party to the hearing and shall 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 appear ing as witnesses at the hearing.

(10) If the respondent has requested hearing, a substantially verbatim ecord of the hearing shall be made nd shall become a part of the record the proceeding. The record must be ne that is capable of being accurately anscribed; however, it need not be anscribed unless the transcript is reested by Commission staff or the re>ondent, the decision is appealed nder § 8.19, or is reviewed by the ommission pursuant to section 8c of le Act or Part 9 of this chapter. In all ther instances a summary record of a earing is permitted.

(i) The rules of an exchange may rovide that the cost of transcribing he record of the hearing shall be orne by a respondent who requests he transcript, appeals the decision ursuant to § 8.19, or whose applicaon for Commission review of the disiplinary action has been granted nder Part 9 of this chapter. In all ther instances, the cost of transcribng the record shall be borne by the xchange.

(b) The rules of an exchange may rovide that a penalty may be sumnarily imposed upon any person ithin its jurisdiction whose actions mpede the progress of a hearing.

Approved by the Office of Management nd Budget under control number 3038022)

43 FR 41950, Sept. 19, 1978, as amended at 6 FR 63036, Dec. 30, 1981]

8.18 Decision.

Promptly following a hearing conlucted in accordance with § 8.17, the lisciplinary committee shall render a written decision based upon the weight of the evidence contained in he record of the proceeding and shall provide a copy to the respondent. The lecision 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.

(Approved by the Office of Management and Budget under control number 30380022)

[43 FR 41950, Sept. 19, 1978, as amended at 46 FR 63036, Dec. 30, 1981]

§ 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 appeals 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 penalty imposed and the effective date of such penalty.

(Approved by the Office of Management and 'Budget under control number 30380022)

[43 FR 41950, Sept. 19, 1978, as amended at 46 FR 63036, Dec. 30, 1981]

§ 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.

(Approved by the Office of Management and Budget under control number 30380022)

[43 FR 41950, Sept. 19, 1978, as amended at 46 FR 63036, Dec. 30, 1981]

§ 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 sum

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.

§ 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.

(c) "Division of Trading and Markets" means that division within the 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 Act or to trade commodity options pursuant to Part 33 of this chapter.

(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