Code of Federal Regulations: Containing a Codification of Documents of ...

[43 FR 59350, Dec. 20, 1978, as amended at 46 FR 63036, Dec. 30, 1981]

§ 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) through (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.

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

(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, as amended at 46 FR 63036, Dec. 30, 1981]

§ 9.13 Effective date of disciplinary actions.

(a) Any disciplinary action taken by an exchange shall not become effective until at least ten (10) days after written notice prescribed by § 9.11(a) is delivered to the Commission. However, the exchange may cause the disciplinary action to become effective prior to that time if:

(1) In accordance with § 8.25, the exchange reasonably believes that immediate action is necessary to protect the best interests of the marketplace;

(2) In accordance with § 8.17(b), the actions of a person who is within an exchange's jurisdiction impede the progess of disciplinary hearing;

(3) In accordance with § 8.27, a person has failed to timely submit ac

curate records required for clearing or verifying each day's transactions or other similar activities; or

(4) The person against whom the action is taken has consented to the sanction to be imposed.

(b) If the exchange determines in accordance with paragraph (a)(1) of this section that the disciplinary action shall become effective prior to the expiration of ten (10) days after written notice thereof, it shall by telegram or other means of written telecommunication immediately notify the Commission and the person against whom the action is taken, stating the reasons for that determination.

Subpart C-Initial Procedure With Respect to Applications for Review

§ 9.21 Application.

(a) Any person who is the subject of disciplinary action by an exchange or any person who is adversely affected by any other action of an exchange may, at any time within ten (10) days after notice of the disciplinary action has been provided to the person in accordance with § 9.11(a) or within ten (10) days of that adverse action, file a written notice of appeal with the Commission stating an intention to apply to the Commission for review of such action and within thirty (30) days after the notice of disciplinary or other adverse action has been mailed, file with the Commission a written application for review of the exchange action.

(b) Each application submitted to the Commission pursuant to this section shall include:

(1) The name and residence address of the applicant;

(2) The name of the exchange;

(3) If known, the specific rule or rules of the exchange which resulted in the applicant's being the subject of disciplinary or other adverse action;

(4) A concise statement of all facts relevant to the consideration of the application, including, if known, the date and place of each alleged act or omission forming the basis of the exchange's action;

(5) The date on which the disciplinary or other adverse action was im

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

89.11 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

[43 FR 59350, Dec. 20, 1978, as amended at 46 FR 63036, Dec. 30, 1981]

§ 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) through (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.

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

(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, as amended at 46 FR 63036, Dec. 30, 1981]

§ 9.13 Effective date of disciplinary actions.

(1) In accordance with § 8.25, the exchange reasonably believes that immediate action is necessary to protect the best interests of the marketplace;

(2) In accordance with § 8.17(b), the actions of a person who is within an exchange's jurisdiction impede the progess of disciplinary hearing;

(3) In accordance with § 8.27, a person has failed to timely submit ac

curate records required for clearing or verifying each day's transactions or other similar activities; or

(4) The person against whom the action is taken has consented to the sanction to be imposed.

Subpart C-Initial Procedure With Respect to Applications for Review § 9.21 Application.

(b) Each application submitted to the Commission pursuant to this section shall include:

(1) The name and residence address of the applicant;

(2) The name of the exchange;

(3) If known, the specific rule or rules of the exchange which resulted in the applicant's being the subject of disciplinary or other adverse action;

(5) The date on which the disciplinary or other adverse action was im

posed by the exchange or the date on which the final exchange decision was rendered;

(6) A full description of the disciplinary or other adverse action imposed and the relief sought; and

(7) A statement of the reasons why it is claimed that the disciplinary action or other adverse action is not in accordance with the rules of the exchange or the policies of the Act, and the specific facts which support those reasons.

(c) Each application shall be signed personally by an individual applicant or by a duly authorized officer or agent of an applicant that is not a natural person. The applicant must attest that he knows the facts set forth in the application to be true, or believes the facts set forth to be true, in which event the information upon which he formed that belief shall be set forth with particularity. The application must also include a certification showing that a true copy of the application has been served on the exchange involved concurrently with its filing with the Commission.

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

[43 FR 59350, Dec. 20, 1978, as amended at 46 FR 63036, Dec. 30, 1981]

§ 9.22 Stay pending review.

(a) A party who is the subject of a disciplinary action taken pursuant to § 9.13(a)(1) may petition the Commission to stay the effectiveness of the disciplinary action pending completion of the exchange hearing conducted under § 8.26. A party who has filed a notice of appeal in accordance with § 9.21(a) may petition the Commission to stay the disciplinary or other adverse action, pending consideration by the Commission of the application for review and, if granted, the appeal underlying the application. A petition filed under this section shall state the reasons that the stay is requested and the facts relied upon, and if the facts are subject to dispute, the petition shall be supported by affidavits or other sworn statements or copies thereof. The petition must also include a certification showing that a true copy of the petition has been

served on the exchange involved concurrent with the filing of the petition with the Commission. Based upon the petition, the Commission, in its discretion, may order a stay of the disciplinary or other adverse action.

(b) An exchange may serve and file a written response to any petition for a stay within ten (10) days after service of the petition. However, if a petition for a stay involves a disciplinary action taken pursuant to § 9.13(a)(1) or other disciplinary or other adverse action which is to become effective before the ten-day period for filing a response expires, the petition may be acted upon by the Commission at any time, without waiting for a response thereto. An exchange may, however, request reconsideration, vacation or modification of a stay granted.

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

[43 FR 59350, Dec. 20, 1978, as amended at 46 FR 63036, Dec. 30, 1981]

§ 9.23 Answer.

Within twenty (20) days after receipt of an application, served in accordance with § 9.21(c), the exchange may, at its election, file an answer with the Commission, setting forth facts which support the disciplinary action or other adverse action taken by the exchange, and a statement expressing why, notwithstanding the claims made in the application, the disciplinary action or other adverse action by the exchange is in accordance with the rules of the exchange and the policies of the Act. If an answer is filed, it shall be accompanied by certification showing that a true copy of the answer has been served upon the applicant. If no answer is filed by the exchange in the case of an application to review disciplinary

action of the exchange, the notice of the disciplinary action filed with the Commission under § 9.11 shall be deemed the exchange's answer to the application.

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

§ 9.30 Determination to review exchange action.

The determination to review any exchange disciplinary or other adverse action is a matter committed to the Commission's discretion. In determining whether to grant or deny review of any exchange disciplinary or other adverse action, the Commission may consider such factors as:

(a) Whether the issues presented involve an important policy under the Act;

(b) The extent to which a review proceeding would interfere with the efficient disposition of other Commission business;

(d) Whether there is substantial divergence among the exchanges in their treatment of similar matters;

(e) Whether it appears from the application or other information available to the Commission that the exchange action may not have been taken in accordance with any of the standards contained in § 9.37(b); or

(f) Any other factors which the Commission deems relevant.

§ 9.31 Institution of review.

(a) If the Commission determines to deny the application for review of the disciplinary action or other adverse action, it shall promptly give notice to that effect to the exchange and to the applicant.

(b) If the Commission determines to grant the application for review, the Commission shall issue an order to institute a review of the disciplinary action or other adverse action.

§ 9.32 Docketing of the proceeding.

If the Commission institutes review pursuant to the provisions of § 9.31, the Hearing Clerk shall promptly serve the order instituting review on the exchange and the applicant. Thereafter, the Hearing Clerk shall assign a docket number to the pro

ceeding and maintain the official docket. The proceeding may be identified by such number.

§ 9.33 Consolidation.

The Commission may consolidate a proceeding hereunder with any other proceedings under this part in accordance with the procedures set forth in § 10.63(a) of the rules of practice.

§ 9.34 Record.

(a) Within ten (10) days of the receipt of the order served under § 9.32, the exchange shall file a copy of the record of the disciplinary proceeding or other adverse action on the Hearing Clerk, and serve a copy on the applicant provided that the applicant agrees to pay the exchange reasonable fees for printing his copy.

(b) The Commission may remand the record to the exchange for other proceedings or to have the record supplemented with additional evidence as the Commission may deem necessary and relevant. The exchange shall promptly conduct proceedings or

adduce the additional evidence as ordered by the Commission, and shall promptly file a copy of the record of these additional proceedings or evidence with the Hearing Clerk and the applicant as set forth in paragraph (a) of this section.

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

[43 FR 59350, Dec. 20, 1978, as amended at 46 FR 63036, Dec. 30, 1981]

§ 9.35 Briefs.

(a) Unless otherwise ordered by the Commission, the applicant shall file an opening brief within twenty (20) days after receipt of the order instituting review under § 9.32. The brief shall not exceed forty (40) pages, without leave of the Commission.

(b) An answering brief shall be filed by the exchange within twenty (20) days after service of the opening brief and shall not exceed forty (40) pages, without leave of the Commission.

ted.

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