7 U.S.C. § 6c: Prohibited transactions

hedge any transaction in interstate commerce in the commodity or the product or byproduct of the commodity; determine the price basis of any such transaction in interstate commerce in the commodity; or deliver any such commodity sold, shipped, or received in interstate commerce for the execution of the transaction. is, of the character of, or is commonly known to the trade as, a “wash sale” or “accommodation trade”; or is a fictitious sale; or is used to cause any price to be reported, registered, or recorded that is not a true and bona fide price. a contract of sale of a commodity for future delivery (or option on such a contract); an option (other than an option executed or traded on a national securities exchange registered pursuant to section 78f(a) of title 15 ); or a swap. a contract of sale of a commodity for future delivery (or option on such a contract); an option (other than an option executed or traded on a national securities exchange registered pursuant to section 78f(a) of title 15 ); or a swap. a contract of sale of a commodity for future delivery (or option on such a contract); an option (other than an option executed or traded on a national securities exchange registered pursuant to section 78f(a) of title 15 ); or a swap. a contract of sale of a commodity for future delivery (or option on such a contract); an option (other than an option executed or traded on a national securities exchange registered pursuant to section 78f(a) of title 15 ); or a swap, provided, however, that nothing in this subparagraph shall preclude a person that has provided information concerning, or generated by, the person, its operations or activities, to any employee or agent of any department or agency of the Federal Government, to Congress, any Member of Congress, any employee of Congress, any judicial officer, or any judicial employee, voluntarily or as required by law, from using such information to enter into, or offer to enter into, a contract of sale, option, or swap described in clauses 1 (i), (ii), or (iii). 1 So in original. Probably should be “clause”. violates bids or offers; demonstrates intentional or reckless disregard for the orderly execution of transactions during the closing period; or is, is of the character of, or is commonly known to the trade as, “spoofing” (bidding or offering with the intent to cancel the bid or offer before execution). The Commission may make and promulgate such rules and regulations as, in the judgment of the Commission, are reasonably necessary to prohibit the trading practices described in paragraph (5) and any other trading practice that is disruptive of fair and equitable trading. It shall be unlawful for any person to enter into a swap knowing, or acting in reckless disregard of the fact, that its counterparty will use the swap as part of a device, scheme, or artifice to defraud any third party. No person shall offer to enter into, enter into or confirm the execution of, any transaction involving any commodity regulated under this chapter which is of the character of, or is commonly known to the trade as, an “option”, “privilege”, “indemnity”, “bid”, “offer”, “put”, “call”, “advance guaranty”, or “decline guaranty”, contrary to any rule, regulation, or order of the Commission prohibiting any such transaction or allowing any such transaction under such terms and conditions as the Commission shall prescribe. Any such order, rule, or regulation may be made only after notice and opportunity for hearing, and the Commission may set different terms and conditions for different markets. to eliminate the pilot status of its program for commodity option transactions involving the trading of options on contract markets, including any numerical restrictions on the number of commodities or option contracts for which a contract market may be designated; and otherwise to continue to permit the trading of such commodity options under such terms and conditions that the Commission from time to time may prescribe. any person domiciled in the United States who on May 1, 1978 , was in the business of granting an option on a physical commodity, other than a commodity specifically set forth in section 2(a) of this title prior to October 23, 1974 , and was in the business of buying, selling, producing, or otherwise using that commodity, may continue to grant or issue options on that commodity in accordance with Commission regulations in effect on August 17, 1978 , until thirty days after the effective date of regulations issued by the Commission under clause (2) of this subsection: Provided , That if such person files an application for registration under the regulations issued under clause (2) of this subsection within thirty days after the effective date of such regulations, that person may continue to grant or issue options pending a final determination by the Commission on the application; and is in the business of buying, selling, producing, or otherwise using the underlying commodity; at all times has a net worth of at least $5,000,000 certified annually by an independent public accountant using generally accepted accounting principles; notifies the Commission and every futures commission merchant offering the grantor’s option if the grantor knows or has reason to believe that the grantor’s net worth has fallen below $5,000,000; segregates daily, exclusively for the benefit of purchasers, money, exempted securities (within the meaning of section 78c(a)(12) of title 15 ), commercial paper, bankers’ acceptances, commercial bills, or unencumbered warehouse receipts, equal to an amount by which the value of each transaction exceeds the amount received or to be received by the grantor for such transaction; provides an identification number for each transaction; and provides confirmation of all orders for such transactions executed, including the execution price and a transaction identification number; has evidence that the grantor meets the requirements specified in subclause (A) of this clause; treats and deals with all money, securities, or property received from its customers as payment of the purchase price in connection with such transactions, as belonging to such customers until the expiration of the term of the option, or, if the customer exercises the option, until all rights of the customer under the commodity option transaction have been fulfilled; records each transaction in its customer’s name by the transaction identification number provided by the grantor; provides a disclosure statement to its customers, under regulations of the Commission, that discloses, among other things, all costs, including any markups or commissions involved in such transaction; and the grantor and futures commission merchant comply with any additional uniform and reasonable terms and conditions the Commission may prescribe, including registration with the Commission. The Commission may adopt rules and regulations, after public notice and opportunity for a hearing on the record, prohibiting the granting, issuance, or sale of options permitted under subsection (d) of this section if the Commission determines that such options are contrary to the public interest. Nothing in this chapter shall be deemed to govern or in any way be applicable to any transaction in an option on foreign currency traded on a national securities exchange. The Commission shall adopt rules requiring that a contemporaneous written record be made, as practicable, of all orders for execution on the floor or subject to the rules of each contract market or derivatives transaction execution facility placed by a member of the contract market or derivatives transaction execution facility who is present on the floor at the time such order is placed.