Page:United States Statutes at Large Volume 114 Part 5.djvu/424

 114 STAT. 2763A-384 PUBLIC LAW 106-554—APPENDIX E "(A)(i) is, of the character of, or is commonly known to the trade as, a 'wash sale' or 'accommodation trade'; or "(ii) is a fictitious sale; or "(B) is used to cause any price to be reported, registered, or recorded that is not a true and bona fide price.". SEC. 110. DESIGNATION OF BOARDS OF TRADE AS CONTRACT MAR- KETS. The Commodity Exchange Act is amended— (1) by redesignating section 5b (7 U.S.C. 7b) as section 5e; and (2) by striking sections 5 and 5a (7 U.S.C. 7, 7a) and inserting the following: "SEC. 5. DESIGNATION OF BOARDS OF TRADE AS CONTRACT MARKETS. "(a) APPLICATIONS.— ^A board of trade applying to the Commission for designation as a contract market shall submit an application to the Commission that includes any relevant materials and records the Commission may require consistent with this Act. " (b) CRITERIA FOR DESIGNATION.— "(1) IN GENERAL. —To be designated as a contract market, the board of trade shall demonstrate to the Commission that the board of trade meets the criteria specified in this subsection. "(2) PREVENTION OF MARKET MANIPULATION.— The board of trade shall have the capacity to prevent market manipulation through market surveillance, compliance, and enforcement practices and procedures, including methods for conducting real-time monitoring of trading and comprehensive and accurate trade reconstructions. "(3) FAIR AND EQUITABLE TRADING.— The board of trade shall establish and enforce trading rules to ensure fair and equitable trading through the facilities of the contract market, and the capacity to detect, investigate, and discipline any person that violates the rules. The rules may authorize— "(A) transfer trades or office trades; "(B) an exchange of— "(i) futures in connection with a cash commodity transaction; "(ii) futures for cash commodities; or "(iii) futures for swaps; or "(C) a futures commission merchant, acting as principal or agent, to enter into or confirm the execution of a contract for the purchase or sale of a commodity for future delivery if the contract is reported, recorded, or cleared in accordance with the rules of the contract market or a derivatives clearing organization. "(4) TRADE EXECUTION FACILITY.—The board of trade shall— "(A) establish and enforce rules defining, or specifications detailing, the manner of operation of the trade execution facility maintained by the board of trade, including rules or specifications describing the operation of any electronic matching platform; and "(B) demonstrate that the trade execution facility operates in accordance with the rules or specifications. "(5) FiNANCLVL INTEGRITY OF TRANSACTIONS. —The board of trade shall establish and enforce rules and procedures for

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