(a) Preparation of proposed final order. Within a reasonable period of time after the hearing, the presiding officer, assisted by such employees of the Commodity Exchange Authority and of the Office of the Solicitor as the Act Administrator and the Solicitor, respectively may direct, shall prepare such proposed final order as is appropriate and practicable. Such order shall include findings of fact and conclusions based thereon, but the findings of fact need not be based solely upon the testimony or exhibits received in evidence at the hearing.

(b) Submission of proposed final order to the Secretary. Immediately upon completion of its preparation, the proposed final order shall be submitted by the presiding officer to the Secretary for approval and signature. The proposed final order shall be accompanied by a copy of the transcript and of any exhibits that may have been introduced, and by a memorandum containing a summary of the evidence contained in the record and of such other factual data upon which the findings of fact in the proposed final order were based.

(c) Tentative issuance of proposed final order. The Secretary may, if he deems it advisable to do so, issue the proposed final order as a tentative order. In such event, the tentative order shall be published in the FEDERAL REGISTER, and interested persons who appeared at the hearing shall be given a reasonable opportunity to file exceptions to the tentative order and to file briefs in support of such exceptions.

(d) Publication of the final order. The full text of the final order in any rulemaking proceeding shall be published in the FEDERAL REGISTER, and a copy of the order shall be sent to each contract market.

RULES APPLICABLE TO ALL PROCEEDINGS § 0.28 Hearings before the Secretary.

The Secretary may act in the place and stead of a referee or presiding officer in any proceeding under this subpart. When he so acts, the hearing clerk shall transmit the record to the Secretary at the expiration of the period provided for the filing of proposed findings of fact, conclusions and orders, and the Secretary shall thereupon, after due consideration of the record, issue his final order

in the proceeding: Provided, That he may issue a tentative order, in which event the parties shall be afforded an opportunity to file exceptions before the issuance of the final order.

Subpart B-Rules Applicable to Proceedings Before the Commodity Exchange Commission

AUTHORITY: The provisions of this Subpart B issued under 42 Stat. 998, as amended; 7 U.S.C. 1-17a.

§ 0.50

Scope and applicability of rules of practice.

Sections 0.51-0.72, inclusive, shall apply to the conduct of all disciplinary proceedings as defined in § 0.52. Sections 0.51, 0.52, and 0.73-0.77, inclusive, shall apply to the conduct of all rulemaking proceedings as defined in § 0.52. Sections 0.51, 0.52, and 0.78-0.95, inclusive, shall apply to the conduct of all 6a proceedings as defined in § 0.52.

§ 0.51 Meaning of words.

Words in this subpart in the singular form shall be deemed to import the plural, and vice versa, as the case may demand.

§ 0.52 Definitions.

As used in this subpart, the terms as defined in section 2 of the act shall apply with equal force and effect. In addition, and except as may be provided otherwise in this subpart:

(a) The term "act" means the Commodity Exchange Act, approved September 21, 1922 (42 Stat. 998), as amended June 15, 1936 (49 Stat. 1491; 7 U.S.C. 1-17a), and other legislation supplementary thereto and amendatory

thereof;

(b) The term "Department" means the United States Department of Agriculture;

(c) The term "Secretary" means the Secretary of Agriculture or any person to whom authority has heretofore lawfully been delegated or to whom authority may hereafter lawfully be delegated to act in his stead;

(d) The term "Commission" means the Commodity Exchange Commission or any person to whom the Commission has to heretofore lawfully delegated, or whom the Commission may hereafter lawfully delegate, the authority to act in its stead;

(e) The term "Commodity Exchange Authority" means the Commodity Exchange Authority, United States Department of Agriculture;

(f) The term "FEDERAL REGISTER" means the publication provided for by the act of July 26, 1935 (49 Stat. 500, as amended; 44 U.S.C. 301-314), and acts supplementary thereto and amendatory thereof;

(g) The term "hearing" means that part of the proceeding which involves the submission of evidence and means either an oral or a written hearing;

(h) The term "party" includes the Commission in those instances in which it is named as a party of record in the proceeding;

(i) The term "complainant" means the party upon whose complaint the proceeding is instituted;

(j) The term "respondent" means the party proceeded against;

(k) The term “disciplinary proceeding" means any proceeding (other than a 6a proceeding) before the Commission arising under the act, in which proceeding it is required by law that the order or other determination of the Commission shall be made only after an opportunity for a hearing, and, if a hearing be held, only upon the basis of a record made in the course of such hearing;

(1) The term "rulemaking proceeding" means any proceeding before the Commission arising under subsection (1) of section 4a of the act;

(m) The term "6a proceeding" means any proceeding arising under section 6a of the act;

(n) The term "Solicitor" means the Solicitor of the Department;

(0) The term "hearing clerk" means the hearing clerk, United States Department of Agriculture, Washington 25, D.C.;

(p) The term "referee" means an examiner conducting a proceeding under the act;

(q) The term "referee's report" (presiding officer's report) means the referee's report to the Commission, and includes the referee's proposed (1) findings of fact and conclusions with respect to all material issues of fact, law or discretion, as well as the reasons or basis therefor, (2) order, and (3) rulings on findings, conclusions and orders submitted by the parties;

(r) The term "Act Administrator" means the Administrator of the Commodity Exchange Authority, United

States Department of Agriculture, in his capacity as Administrator of the Commodity Exchange Act, or any officer or employee of the Commodity Exchange Authority to whom he has heretofore lawfully delegated or may hereafter lawfully delegate the authority to act in his stead;

(s) The term "examiner" means any examiner in the Office of Hearing Examiners, United States Department of Agriculture.

RULES APPLICABLE TO DISCIPLINARY
PROCEEDINGS

§ 0.53 Institution of proceedings.

(a) Application to institute proceedings. Any interested person having any information of any violation of the act, or of any of the orders or regulations promulgated thereunder, by any board of trade or by any director, officer, agent, or employee thereof may file with the Act Administrator an application requesting the institution of such proceeding as is authorized under the act. Such application shall be in writing, signed by or on behalf of the applicant, and shall include a short and simple statement of the facts constituting the alleged violation and the name and address of the aplicant and the name and address of the person against whom the applicant complains.

(b) Status of applicant. The person filing an application as described in paragraph (a) of this section shall have no legal status in the proceeding which may be instituted as a result of the application, except where the applicant may be permitted to intervene therein, in the manner provided in this subpart, or may be called as a witness, and the applicant's identity shall not be divulged by any employee of the Department, except with the applicant's prior consent or upon court order.

(c) Who may institute. If, after investigation of the matters complained of in the application described in paragraph (a) of this section, or after investigation made on ist own motion, the Commission has reason to believe that any board of trade or any director, officer, agent, or employee thereof has violated or is violating any of the provisions of the act, or of any of the regulations promulgated thereunder, the Commission will institute an appropriate proceeding: Provided, That in any case, except one of wilfulness or one in which the public

health, interest or safety otherwise requires, prior to the institution of a proceeding for the suspension or revocation of any designation of a contract market, facts or conditions which may warrant such action shall be called to the attention of the market in writing and such market shall be accorded opportunity to demonstrate or achieve compliance with all lawful requirements. Proceedings will be instituted only upon complaints issued by the Commission and will not be instituted upon pleadings filed by private persons.

§ 0.54 Stipulations and consent orders.

(a) Stipulation of compliance. At any time prior to the issuance of the complaint in any proceeding, the Commission, in its discretion, may enter into a stipulation with the prospective respondent, whereby the latter admits the material facts and agrees to discontinue the acts or practices which are intended to be set up as violative of the act. stipulations shall be admissible as evidence of such acts and practices in any subsequent proceeding against such person before the Commission.

Such

(b) Consent order. At any time after the issuance of the complaint and prior to the hearing in any proceeding, the Commission, in its discretion, may allow the respondent to consent to an order. In so consenting, the respondent must submit, for filing in the record, a stipulation or statement in which he admits at least those facts necessary to the Commission's jurisdiction and agrees that an order may be entered against him. Upon a record composed of the complaint and the stipulation or agreement consenting to the order, the Commission may enter the order consented to by the respondent, which shall have the same force and effect as an order made after oral hearing.

§ 0.55 Complaints.

(a) Filing and service. All complaints shall be filed with the hearing clerk. The provisions of § 0.72 shall govern the filing, number of copies, and service of such papers.

(b) Contents. A complaint shall state briefly and clearly the allegations of fact which constitute a basis for the proceeding and shall specify with particularity the matters or things in issue. Complaints shall not include charges, implied charges, or requirements phrased generally in the words of the act, but the

words of the act may be identified and quoted or used in preliminary recitals.

(c) Amendments. At any time prior to the close of the hearing, the complaint may be amended; but, in case of an amendment adding new provisions, the hearing shall, at the request of the respondent, be adjourned for a period not exceeding 15 days. Amendments subsequent to the first amendment or subsequent to the filing of an answer by the respondent may be made only with leave of the referee or with the written consent of the adverse party.

(a) Assignment. No referee shall be assigned to serve in any proceeding who (1) has any pecuniary interest in any matter or business involved in the proceeding, (2) is related within the third degree by blood or marriage to any party to the proceeding, or (3) has participated in the investigation preceding the institution of the proceeding or in the determination that it should be instituted or in the preparation of the complaint or in the development of the evidence to be introduced therein.

Any

(b) Disqualification of referee. party may file with the hearing clerk a timely affidavit of disqualification of the referee which shall set forth with particularity the grounds of alleged disqualification. After such investigation or hearing as the Commission may deem necessary, it may find the affidavit without merit or may direct that another referee be assigned to the proceeding. Where the affidavit is found without merit, the affidavit, any record made thereon, and the finding and order of the Commission shall be made a part of the record.

A referee shall ask to be withdrawn from any proceeding in which he deems himself disqualified for any reason.

(c) Conduct. The referee shall conduct the proceeding in a fair and impartial manner and, save to the extent required for the disposition of ex parte matters as authorized by law, he shall not consult any person or party on any fact in issue unless upon notice and opportunity for all parties to participate.

(d) Powers of referee. Subject to review by the Commission as provided elsewhere in this subpart, the referee, in any proceeding assigned to him, shall have power to:

(1) Rule upon motions and requests;

(2) Set the time and place of hearing, adjourn the hearing from time to time, and change the time and place of hearing;

(3) Administer oaths and affirmations and take affidavits;

(4) Issue subpenas requiring the attendance and testimony of witnesses and the production of books, records, contracts, papers, and other documentary evidence;

(5) Summon and examine witnesses and receive evidence;

(6) Take or order the taking of depositions;

(7) Admit or exclude evidence;

(8) Hear oral argument on facts or law;

(9) Do all acts and take all measures necessary for the maintenance of order and efficient conduct of the proceeding.

(e) Who may act in the absence of the referee. In case of the absence of the referee, or his inability to act, the powers and duties to be performed by him under these rules of practice in connection with a proceeding assigned to him may, without abatement of the proceeding unless otherwise ordered by the Commission, be assigned to any other referee.

At any time after the institution of a proceeding, and before it has been submitted to the Commission for final consideration, the Commission or the referee may, upon petition in writing and for good cause shown, permit any person to intervene therein. The petition shall state with preciseness and particularity: (a) The petitioner's relationship to the matters involved in the proceeding, (b) the nature of the material he intends to present in evidence, (c) the nature of the argument he intends to make, (d) any other reason that he should be allowed to intervene.

§ 0.59 The answer.

(a) Filing and service. Within 20 days after service of the complaint, the respondent shall file, in quintuplicate, with the hearing clerk an answer, signed by the respondent or his attorney: Provided, That the Commission may order

that the hearing be held without answer or other pleading. The answer shall be served upon the complainant, and any other party of record, in the manner provided in § 0.72.

(b) Contents; failure to file. Such answer shall (1) contain a statement of the facts which constitute the grounds of defense, and shall specifically admit, deny, or explain each of the allegations of the complaint unless respondent is without knowledge, in which case the answer shall so state; or (2) state that the respondent admits all of the allegations of the complaint. The answer may contain a waiver of hearing.

Failure to file an answer to or plead specifically to any allegation of the complaint shall constitute an admission of such allegation.

(c) Procedure upon admission of facts. The admission, in the answer or by failure to file an answer, of all the material allegations of fact contained in the complaint shall constitute a waiver of hearing. Upon such admission of facts, the referee, without further investigation or hearing, shall prepare his report, in which he shall adopt as his proposed findings of fact the material facts alleged in the complaint. Unless the parties have waived service of the referee's report, it shall be served upon them in the manner provided in § 0.72. The parties shall be given an opportunity to file exceptions to the report, to file briefs in support of such exceptions, and to make oral argument thereon before the Commission. Any request to make oral argument before the Commission must be filed in the manner and within the time provided in § 0.66(d). § 0.60 Motions and requests.

(a) General. All motions and requests shall be filed with the hearing clerk, except that those made during the course of an oral hearing may be filed with the referee or may be stated orally and made a part of the transcript.

The referee is authorized to rule upon all motions and requests filed or made prior to the filing of his report with the hearing clerk as provided in this subpart. The Commission will rule upon all motions and requests filed after that time.

(b) Motions entertained. Any motion will be entertained except a motion to dismiss on the pleadings.

The submission or certification of any motion, request, objection, or other question to the Commission prior to the time

when the referee's report is filed with the hearing clerk shall be in the discretion of the referee.

§ 0.61

Oral hearing before referee.

(a) Request for oral hearing. Any party may request an oral hearing on the facts by including such request in the complaint or answer or by a separate request in writing filed with the hearing clerk. Failure by the respondent to request an oral hearing within the time allowed for the filing of the answer shall constitute a waiver of such hearing, and any respondent so failing to request an oral hearing will be deemed to have agreed that the proceeding may be decided upon a record formed under the shortened procedure provided for in § 0.77.

Waiver of oral hearing shall not be deemed to be a waiver of the right to make oral argument before the Commission upon exceptions to the referee's report. Such argument will be allowed in accordance with the provisions of § 0.69.

(b) Time and place. If and when the proceeding has reached the stage where an oral hearing is to be held, the referee, giving careful consideration to the convenience of the parties, shall set a time and place for hearing and shall file with the hearing clerk a notice stating the time and place. If any change in the time or place of the hearing is made, the referee shall file with the hearing clerk a notice of such change, which notice shall be served upon the parties, unless it is made during an oral hearing and made a part of the transcript.

(c) Appearances (1) Representation. In any proceeding, the parties may appear in person or by counsel or other representative. The Commission, if represented by counsel, shall be represented by an attorney assigned by the Solicitor of the Department.

Persons who appear as counsel or in a representative capacity at a hearing must conform to the standards of ethical conduct required of practitioners before the courts of the United States. Whenever the Commission finds, after notice and opportunity for hearing, that a person, who is acting or has acted as counsel or representative for another person in any proceeding before the Commission, is unfit to act as such representative or counsel, it will order that such person be precluded from acting as counsel or representative in any proceeding under the act. The procedure in such

case will be governed by the applicable provisions of this subpart.

(2) Failure to appear. If any party to the proceeding, after being duly notified, fails to appear at the hearing, he shall be deemed to have waived the right to an oral hearing in the proceeding. In the event that a party appears at the hearing and no party appears for the opposing side, the party who is present shall have an election to present his evidence, in whole or in part, in the form of affidavits or by oral testimony before the referee.

Failure to appear at a hearing shall not be deemed to be a waiver of the right to be served with a copy of the referee's report and to file exceptions and make oral argument before the Commission with respect thereto, in the manner provided in this subpart.

(d) Order of proceeding. Except as may be determined otherwise by the referee, the complainant shall proceed first at the hearing.

(e) Evidence-(1) In general. The testimony of witnesses at a hearing shall be upon oath or affirmation administered by the referee and shall be subject to cross-examination.

Any witness may, in the discretion of the referee, be examined separately and apart from all other witnesses except those who may be parties to the proceeding.

The referee shall exclude evidence which is immaterial, irrelevant, or unduly repetitious, or which is not of the sort upon which responsible persons are accustomed to rely.

(2) Objections. If a party objects to the admission or rejection of any evidence or to the limitations of the scope of any examination or cross-examination, he shall state briefly the grounds of such objection, whereupon an automatic exception will follow if the objection is overruled by the referee. The transcript shall not include argument or debate thereon except as ordered by the referee. The ruling of the referee on any objection shall be a part of the transcript.

Only objections made before the referee may subsequently be relied upon in the proceeding.

(3) Depositions. The deposition of any witness shall be admitted, in the manner provided in and subject to the provisions of § 0.62.

(4) Affidavits. Except as is otherwise provided in the rules in this subpart, affidavits may be admitted only if the