---
kind: "section"
citation: "7 U.S.C. § 6a"
title: "7"
title_heading: "Agriculture"
number: "6a"
heading: "Excessive speculation"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/7/6a"
units:
  - "Chapter 1 — Commodity Exchanges"
---

# §6a. Excessive speculation

- (a) **Burden on interstate commerce; trading or position limits—**
  - (1) **In general—** Excessive speculation in any [commodity](/usc/7/1a.md?p=9) under contracts of sale of such [commodity](/usc/7/1a.md?p=9) for [future delivery](/usc/7/1a.md?p=27) made on or subject to the rules of contract [markets](/usc/7/198.md?p=1) or derivatives transaction execution facilities, or [swaps](/usc/7/1a.md?p=47-A) that perform or affect a significant price discovery function with respect to [registered entities](/usc/7/1a.md?p=40) causing sudden or unreasonable fluctuations or unwarranted changes in the price of such [commodity](/usc/7/1a.md?p=9), is an undue and unnecessary burden on [interstate commerce](/usc/7/1a.md?p=30) in such [commodity](/usc/7/1a.md?p=9). For the purpose of diminishing, eliminating, or preventing such burden, the [Commission](/usc/7/1a.md?p=8) shall, from time to time, after due notice and opportunity for hearing, by rule, regulation, or order, proclaim and fix such limits on the amounts of trading which may be done or positions which may be held by any [person](/usc/7/1a.md?p=38), including any group or class of traders, under contracts of sale of such [commodity](/usc/7/1a.md?p=9) for [future delivery](/usc/7/1a.md?p=27) on or subject to the rules of any contract [market](/usc/7/198.md?p=1) or derivatives transaction execution facility, or [swaps](/usc/7/1a.md?p=47-A) traded on or subject to the rules of a designated contract [market](/usc/7/198.md?p=1) or a [swap execution facility](/usc/7/1a.md?p=50), or [swaps](/usc/7/1a.md?p=47-A) not traded on or subject to the rules of a designated contract [market](/usc/7/198.md?p=1) or a [swap execution facility](/usc/7/1a.md?p=50) that performs a significant price discovery function with respect to a [registered entity](/usc/7/1a.md?p=40), as the [Commission](/usc/7/1a.md?p=8) finds are necessary to diminish, eliminate, or prevent such burden. In determining whether any [person](/usc/7/1a.md?p=38) has exceeded such limits, the positions held and trading done by any [persons](/usc/7/1a.md?p=38) directly or indirectly controlled by such [person](/usc/7/1a.md?p=38) shall be included with the positions held and trading done by such [person](/usc/7/1a.md?p=38); and further, such limits upon positions and trading shall apply to positions held by, and trading done by, two or more [persons](/usc/7/1a.md?p=38) acting pursuant to an expressed or implied agreement or understanding, the same as if the positions were held by, or the trading were done by, a single [person](/usc/7/1a.md?p=38). Nothing in this section shall be construed to prohibit the [Commission](/usc/7/1a.md?p=8) from fixing different trading or position limits for different [commodities](/usc/7/1a.md?p=9), [markets](/usc/7/198.md?p=1), futures, or delivery months, or for different number of days remaining until the last day of trading in a contract, or different trading limits for buying and selling operations, or different limits for the purposes of paragraphs [(1)](#b-1) and [(2)](#b-2) of subsection (b) of this section, or from exempting transactions normally known to the trade as “spreads” or “straddles” or “arbitrage” or from fixing limits applying to such transactions or positions different from limits fixed for other transactions or positions. The word “arbitrage” in domestic [markets](/usc/7/198.md?p=1) shall be defined to mean the same as “spread” or “straddle”. The [Commission](/usc/7/1a.md?p=8) is authorized to define the term “international arbitrage”.
  - (2) **Establishment of limitations—**
    - (A) **In general—** In accordance with the standards set forth in paragraph (1) of this subsection and consistent with the good faith exception cited in [subsection (b)(2)](#b-2), with respect to physical [commodities](/usc/7/1a.md?p=9) other than [excluded commodities](/usc/7/1a.md?p=19) as defined by the [Commission](/usc/7/1a.md?p=8), the [Commission](/usc/7/1a.md?p=8) shall by rule, regulation, or order establish limits on the amount of positions, as appropriate, other than bona fide hedge positions, that may be held by any [person](/usc/7/1a.md?p=38) with respect to contracts of sale for [future delivery](/usc/7/1a.md?p=27) or with respect to [options](/usc/7/1a.md?p=36) on the contracts or [commodities](/usc/7/1a.md?p=9) traded on or subject to the rules of a designated contract [market](/usc/7/198.md?p=1).
    - (B) **Timing—**
      - (i) **Exempt commodities—** For [exempt commodities](/usc/7/1a.md?p=20), the limits required under [subparagraph (A)](#a-2-A) shall be established within 180 days after July 21, 2010.
      - (ii) **Agricultural commodities—** For agricultural [commodities](/usc/7/1a.md?p=9), the limits required under [subparagraph (A)](#a-2-A) shall be established within 270 days after July 21, 2010.
    - (C) **Goal—** In establishing the limits required under [subparagraph (A)](#a-2-A), the [Commission](/usc/7/1a.md?p=8) shall strive to ensure that trading on foreign [boards](/usc/7/1a.md?p=5) of trade in the same [commodity](/usc/7/1a.md?p=9) will be subject to comparable limits and that any limits to be imposed by the [Commission](/usc/7/1a.md?p=8) will not cause price discovery in the [commodity](/usc/7/1a.md?p=9) to shift to trading on the foreign [boards](/usc/7/1a.md?p=5) of trade.
  - (3) **Specific limitations—** In establishing the limits required in [paragraph (2)](#a-2), the [Commission](/usc/7/1a.md?p=8), as appropriate, shall set limits—
    - (A) on the number of positions that may be held by any [person](/usc/7/1a.md?p=38) for the spot month, each other month, and the aggregate number of positions that may be held by any [person](/usc/7/1a.md?p=38) for all months; and
    - (B) to the maximum extent practicable, in its discretion—
      - (i) to diminish, eliminate, or prevent excessive speculation as described under this section;
      - (ii) to deter and prevent [market](/usc/7/198.md?p=1) manipulation, squeezes, and corners;
      - (iii) to ensure sufficient [market](/usc/7/198.md?p=1) liquidity for bona fide hedgers; and
      - (iv) to ensure that the price discovery function of the underlying [market](/usc/7/198.md?p=1) is not disrupted.
  - (4) **Significant price discovery function—** In making a determination whether a [swap](/usc/7/1a.md?p=47-A) performs or affects a significant price discovery function with respect to regulated [markets](/usc/7/198.md?p=1), the [Commission](/usc/7/1a.md?p=8) shall consider, as appropriate:
    - (A) **Price linkage—** The extent to which the [swap](/usc/7/1a.md?p=47-A) uses or otherwise relies on a daily or final settlement price, or other major price parameter, of another contract traded on a regulated [market](/usc/7/198.md?p=1) based upon the same underlying [commodity](/usc/7/1a.md?p=9), to value a position, transfer or convert a position, financially settle a position, or close out a position.
    - (B) **Arbitrage—** The extent to which the price for the [swap](/usc/7/1a.md?p=47-A) is sufficiently related to the price of another contract traded on a regulated [market](/usc/7/198.md?p=1) based upon the same underlying [commodity](/usc/7/1a.md?p=9) so as to permit [market](/usc/7/198.md?p=1) participants to effectively arbitrage between the [markets](/usc/7/198.md?p=1) by simultaneously maintaining positions or executing trades in the [swaps](/usc/7/1a.md?p=47-A) on a frequent and recurring basis.
    - (C) **Material price reference—** The extent to which, on a frequent and recurring basis, [bids](/usc/7/1a.md?p=36), [offers](/usc/7/1a.md?p=36), or transactions in a contract traded on a regulated [market](/usc/7/198.md?p=1) are directly based on, or are determined by referencing, the price generated by the [swap](/usc/7/1a.md?p=47-A).
    - (D) **Material liquidity—** The extent to which the volume of [swaps](/usc/7/1a.md?p=47-A) being traded in the [commodity](/usc/7/1a.md?p=9) is sufficient to have a material effect on another contract traded on a regulated [market](/usc/7/198.md?p=1).
    - (E) **Other material factors—** Such other material factors as the [Commission](/usc/7/1a.md?p=8) specifies by rule or regulation as relevant to determine whether a [swap](/usc/7/1a.md?p=47-A) serves a significant price discovery function with respect to a regulated [market](/usc/7/198.md?p=1).
  - (5) **Economically equivalent contracts—**
    - (A) Notwithstanding any other provision of this section, the [Commission](/usc/7/1a.md?p=8) shall establish limits on the amount of positions, including aggregate position limits, as appropriate, other than bona fide hedge positions, that may be held by any [person](/usc/7/1a.md?p=38) with respect to [swaps](/usc/7/1a.md?p=47-A) that are economically equivalent to contracts of sale for [future delivery](/usc/7/1a.md?p=27) or to [options](/usc/7/1a.md?p=36) on the contracts or [commodities](/usc/7/1a.md?p=9) traded on or subject to the rules of a designated contract [market](/usc/7/198.md?p=1) subject to [paragraph (2)](#a-2).
    - (B) In establishing limits pursuant to [subparagraph (A)](#a-5-A), the [Commission](/usc/7/1a.md?p=8) shall—
      - (i) develop the limits concurrently with limits established under [paragraph (2)](#a-2), and the limits shall have similar requirements as under [paragraph (3)(B)](#a-3-B); and
      - (ii) establish the limits simultaneously with limits established under [paragraph (2)](#a-2).
  - (6) **Aggregate position limits—** The [Commission](/usc/7/1a.md?p=8) shall, by rule or regulation, establish limits (including related hedge exemption provisions) on the aggregate number or amount of positions in contracts based upon the same underlying [commodity](/usc/7/1a.md?p=9) (as defined by the [Commission](/usc/7/1a.md?p=8)) that may be held by any [person](/usc/7/1a.md?p=38), including any group or class of traders, for each month across—
    - (A) contracts listed by designated contract [markets](/usc/7/198.md?p=1);
    - (B) with respect to an agreement contract, or transaction that settles against any price (including the daily or final settlement price) of 1 or more contracts listed for trading on a [registered entity](/usc/7/1a.md?p=40), contracts traded on a foreign [board of trade](/usc/7/1a.md?p=6) that provides [members](/usc/7/1a.md?p=34) or other participants located in the United States with direct access to its electronic trading and order matching system; and
    - (C) [swap](/usc/7/1a.md?p=47-A) contracts that perform or affect a significant price discovery function with respect to regulated entities.
  - (7) **Exemptions—** The [Commission](/usc/7/1a.md?p=8), by rule, regulation, or order, may exempt, conditionally or unconditionally, any [person](/usc/7/1a.md?p=38) or class of [persons](/usc/7/1a.md?p=38), any [swap](/usc/7/1a.md?p=47-A) or class of [swaps](/usc/7/1a.md?p=47-A), any [contract of sale](/usc/7/1a.md?p=13) of a [commodity](/usc/7/1a.md?p=9) for [future delivery](/usc/7/1a.md?p=27) or class of such contracts, any [option](/usc/7/1a.md?p=36) or class of [options](/usc/7/1a.md?p=36), or any transaction or class of transactions from any requirement it may establish under this section with respect to position limits.
- (b) **Prohibition on trading or positions in excess of limits fixed by Commission—** The [Commission](/usc/7/1a.md?p=8) shall, in such rule, regulation, or order, fix a reasonable time (not to exceed ten days) after the promulgation of the rule, regulation, or order; after which, and until such rule, regulation, or order is suspended, modified, or revoked, it shall be unlawful for any [person](/usc/7/1a.md?p=38)—
  - (1) directly or indirectly to buy or sell, or agree to buy or sell, under contracts of sale of such [commodity](/usc/7/1a.md?p=9) for [future delivery](/usc/7/1a.md?p=27) on or subject to the rules of the contract [market](/usc/7/198.md?p=1) or [markets](/usc/7/198.md?p=1), or [swap execution facility](/usc/7/1a.md?p=50) or facilities with respect to a [significant price discovery contract](/usc/7/1a.md?p=46), to which the rule, regulation, or order applies, any amount of such [commodity](/usc/7/1a.md?p=9) during any one business day in excess of any trading limit fixed for one business day by the [Commission](/usc/7/1a.md?p=8) in such rule, regulation, or order for or with respect to such [commodity](/usc/7/1a.md?p=9); or
  - (2) directly or indirectly to hold or control a net long or a net short position in any [commodity](/usc/7/1a.md?p=9) for [future delivery](/usc/7/1a.md?p=27) on or subject to the rules of any contract [market](/usc/7/198.md?p=1) or [swap execution facility](/usc/7/1a.md?p=50) with respect to a [significant price discovery contract](/usc/7/1a.md?p=46) in excess of any position limit fixed by the [Commission](/usc/7/1a.md?p=8) for or with respect to such [commodity](/usc/7/1a.md?p=9): Provided, That such position limit shall not apply to a position acquired in good faith prior to the effective date of such rule, regulation, or order.
- (c) **Applicability to bona fide hedging transactions or positions—**
  - (1) No rule, regulation, or order issued under [subsection (a)](#a) of this section shall apply to transactions or positions which are shown to be bona fide hedging transactions or positions as such terms shall be defined by the [Commission](/usc/7/1a.md?p=8) by rule, regulation, or order consistent with the purposes of this chapter. Such terms may be defined to permit producers, purchasers, sellers, middlemen, and users of a [commodity](/usc/7/1a.md?p=9) or a product derived therefrom to hedge their legitimate anticipated business needs for that period of time into the future for which an appropriate futures contract is open and available on an [exchange](/usc/7/1a.md?p=1-D). To determine the adequacy of this chapter and the powers of the [Commission](/usc/7/1a.md?p=8) acting thereunder to prevent unwarranted price pressures by large hedgers, the [Commission](/usc/7/1a.md?p=8) shall monitor and analyze the trading activities of the largest hedgers, as determined by the [Commission](/usc/7/1a.md?p=8), operating in the cattle, hog, or [pork](/usc/7/198.md?p=3) belly [markets](/usc/7/198.md?p=1) and shall report its findings and recommendations to the Senate Committee on Agriculture, Nutrition, and Forestry and the House Committee on Agriculture in its annual reports for at least two years following January 11, 1983.
  - (2) For the purposes of implementation of [subsection (a)(2)](#a-2) for contracts of sale for [future delivery](/usc/7/1a.md?p=27) or [options](/usc/7/1a.md?p=36) on the contracts or [commodities](/usc/7/1a.md?p=9), the [Commission](/usc/7/1a.md?p=8) shall define what constitutes a bona fide hedging transaction or position as a transaction or position that—
    - (A)
      - (i) represents a substitute for transactions made or to be made or positions taken or to be taken at a later time in a physical marketing channel;
      - (ii) is economically appropriate to the reduction of risks in the conduct and management of a commercial enterprise; and
      - (iii) arises from the potential change in the value of—
        - (I) assets that a [person](/usc/7/1a.md?p=38) owns, produces, manufactures, processes, or merchandises or anticipates owning, producing, manufacturing, processing, or merchandising;
        - (II) liabilities that a [person](/usc/7/1a.md?p=38) owns or anticipates incurring; or
        - (III) services that a [person](/usc/7/1a.md?p=38) provides, purchases, or anticipates providing or purchasing; or
    - (B) reduces risks attendant to a position resulting from a [swap](/usc/7/1a.md?p=47-A) that—
      - (i) was executed opposite a counterparty for which the transaction would qualify as a bona fide hedging transaction pursuant to [subparagraph (A)](#c-2-A); or
      - (ii) meets the requirements of [subparagraph (A)](#c-2-A).
- (d) **Persons subject to regulation; applicability to transactions made by or on behalf of United States—** This section shall apply to a [person](/usc/7/1a.md?p=38) that is registered as a [futures commission merchant](/usc/7/1a.md?p=28-A), an [introducing broker](/usc/7/1a.md?p=31-A), or a [floor broker](/usc/7/1a.md?p=22-A) under authority of this chapter only to the extent that transactions made by such [person](/usc/7/1a.md?p=38) are made on behalf of or for the account or benefit of such [person](/usc/7/1a.md?p=38). This section shall not apply to transactions made by, or on behalf of, or at the direction of, the United States, or a duly authorized agency thereof.
- (e) **Rulemaking power and penalties for violation—** Nothing in this section shall prohibit or impair the adoption by any contract [market](/usc/7/198.md?p=1), derivatives transaction execution facility, or by any other [board of trade](/usc/7/1a.md?p=6) licensed, designated, or registered by the [Commission](/usc/7/1a.md?p=8) or by any [electronic trading facility](/usc/7/1a.md?p=16) of any bylaw, rule, regulation, or resolution fixing limits on the amount of trading which may be done or positions which may be held by any [person](/usc/7/1a.md?p=38) under contracts of sale of any [commodity](/usc/7/1a.md?p=9) for [future delivery](/usc/7/1a.md?p=27) traded on or subject to the rules of such contract [market](/usc/7/198.md?p=1) or derivatives transaction execution facility or on an [electronic trading facility](/usc/7/1a.md?p=16), or under [options](/usc/7/1a.md?p=36) on such contracts or [commodities](/usc/7/1a.md?p=9) traded on or subject to the rules of such contract [market](/usc/7/198.md?p=1), derivatives transaction execution facility, or [electronic trading facility](/usc/7/1a.md?p=16) or such [board of trade](/usc/7/1a.md?p=6): Provided, That if the [Commission](/usc/7/1a.md?p=8) shall have fixed limits under this section for any contract or under [section 6c of this title](/usc/7/6c.md) for any [commodity](/usc/7/1a.md?p=9) [option](/usc/7/1a.md?p=36), then the limits fixed by the bylaws, rules, regulations, and resolutions adopted by such contract [market](/usc/7/198.md?p=1), derivatives transaction execution facility, or [electronic trading facility](/usc/7/1a.md?p=16) or such [board of trade](/usc/7/1a.md?p=6) shall not be higher than the limits fixed by the [Commission](/usc/7/1a.md?p=8). It shall be a violation of this chapter for any [person](/usc/7/1a.md?p=38) to violate any bylaw, rule, regulation, or resolution of any contract [market](/usc/7/198.md?p=1), derivatives transaction execution facility, or other [board of trade](/usc/7/1a.md?p=6) licensed, designated, or registered by the [Commission](/usc/7/1a.md?p=8) or [electronic trading facility](/usc/7/1a.md?p=16) with respect to a [significant price discovery contract](/usc/7/1a.md?p=46) fixing limits on the amount of trading which may be done or positions which may be held by any [person](/usc/7/1a.md?p=38) under contracts of sale of any [commodity](/usc/7/1a.md?p=9) for [future delivery](/usc/7/1a.md?p=27) or under [options](/usc/7/1a.md?p=36) on such contracts or [commodities](/usc/7/1a.md?p=9), if such bylaw, rule, regulation, or resolution has been approved by the [Commission](/usc/7/1a.md?p=8) or certified by a [registered entity](/usc/7/1a.md?p=40) pursuant to [section 7a–2(c)(1) of this title](/usc/7/7a–2.md?p=c-1): Provided, That the provisions of [section 13(a)(5) of this title](/usc/7/13.md?p=a-5) shall apply only to those who knowingly violate such limits.

## Source credit

(Sept. 21, 1922, ch. 369, § 4a, as added June 15, 1936, ch. 545, § 5, 49 Stat. 1492; amended July 24, 1956, ch. 690, § 1, 70 Stat. 630; Pub. L. 90–258, §§ 2–4, Feb. 19, 1968, 82 Stat. 26, 27; Pub. L. 93–463, title IV, §§ 403, 404, Oct. 23, 1974, 88 Stat. 1413; Pub. L. 94–16, § 4, Apr. 16, 1975, 89 Stat. 78; Pub. L. 97–444, title II, § 205, Jan. 11, 1983, 96 Stat. 2299; Pub. L. 102–546, title IV, § 402(1)(A), (2), Oct. 28, 1992, 106 Stat. 3624; Pub. L. 106–554, § 1(a)(5) [title I, § 123(a)(4)], Dec. 21, 2000, 114 Stat. 2763, 2763A–407; Pub. L. 110–234, title XIII, §§ 13105(a), 13203(g), May 22, 2008, 122 Stat. 1434, 1439; Pub. L. 110–246, § 4(a), title XIII, §§ 13105(a), 13203(g), June 18, 2008, 122 Stat. 1664, 2196, 2201; Pub. L. 111–203, title VII, § 737(a)–(c), July 21, 2010, 124 Stat. 1722, 1725.)

## Notes

### Editorial Notes

### Codification

Pub. L. 110–234 and Pub. L. 110–246 made identical amendments to this section. The amendments by Pub. L. 110–234 were repealed by section 4(a) of Pub. L. 110–246.

### Amendments

2010—Subsec. (a). Pub. L. 111–203, § 737(a)(1)–(3), designated existing provisions as par. (1), inserted heading, substituted “swaps that perform or affect a significant price discovery function with respect to registered entities” for “on electronic trading facilities with respect to a significant price discovery contract”, inserted “, including any group or class of traders,” after “held by any person”, and substituted “swaps traded on or subject to the rules of a designated contract market or a swap execution facility, or swaps not traded on or subject to the rules of a designated contract market or a swap execution facility that performs a significant price discovery function with respect to a registered entity,” for “on an electronic trading facility with respect to a significant price discovery contract,”.

Subsec. (a)(2) to (7). Pub. L. 111–203, § 737(a)(4), added pars. (2) to (7).

Subsec. (b)(1). Pub. L. 111–203, § 737(b)(1), substituted “or swap execution facility or facilities” for “or derivatives transaction execution facility or facilities or electronic trading facility”.

Subsec. (b)(2). Pub. L. 111–203, § 737(b)(2), which directed substitution of “or swap execution facility” for “or derivatives transaction execution facility or facilities or electronic trading facility”, was executed by making the substitution for “or derivatives transaction execution facility or electronic trading facility” to reflect the probable intent of Congress.

Subsec. (c). Pub. L. 111–203, § 737(c), designated existing provisions as par. (1) and added par. (2).

2008—Subsec. (a). Pub. L. 110–246, § 13203(g)(1), inserted “, or on electronic trading facilities with respect to a significant price discovery contract” after “execution facilities” in first sentence and “, or on an electronic trading facility with respect to a significant price discovery contract,” after “execution facility” in second sentence.

Subsec. (b)(1). Pub. L. 110–246, § 13203(g)(2)(A), inserted “or electronic trading facility with respect to a significant price discovery contract” after “facility or facilities”.

Subsec. (b)(2). Pub. L. 110–246, § 13203(g)(2)(B), inserted “or electronic trading facility with respect to a significant price discovery contract” after “execution facility”.

Subsec. (e). Pub. L. 110–246, § 13203(g)(3), in first sentence, inserted “or by any electronic trading facility” after “registered by the Commission”, inserted “or on an electronic trading facility” after “derivatives transaction execution facility” the second place it appeared, and inserted “or electronic trading facility” before “or such board of trade” in two places, and, in second sentence, inserted “or electronic trading facility with respect to a significant price discovery contract” after “registered by the Commission”.

Pub. L. 110–246, § 13105(a), inserted “or certified by a registered entity pursuant to section 7a–2(c)(1) of this title” after “approved by the Commission” and substituted “section 13(a)(5)” for “section 13(c)”.

2000—Subsec. (a). Pub. L. 106–554, § 1(a)(5) [title I, § 123(a)(4)(A)], inserted “or derivatives transaction execution facilities” after “contract markets” in first sentence and “or derivatives transaction execution facility” after “contract market” in second sentence.

Subsec. (b)(1). Pub. L. 106–554, § 1(a)(5) [title I, § 123(a)(4)(B)(i)], inserted “, or derivatives transaction execution facility or facilities,” after “markets”.

Subsec. (b)(2). Pub. L. 106–554, § 1(a)(5) [title I, § 123(a)(4)(B)(ii)], inserted “or derivatives transaction execution facility” after “contract market”.

Subsec. (e). Pub. L. 106–554, § 1(a)(5) [title I, § 123(a)(4)(C)], substituted “contract market, derivatives transaction execution facility, or” for “contract market or” wherever appearing, “licensed, designated, or registered” for “licensed or designated” in two places, and “contract market or derivatives transaction execution facility, or” for “contract market, or”.

1992—Subsec. (a). Pub. L. 102–546, § 402(1)(A), (2)(A), (C), redesignated par. (1) as subsec. (a), substituted “Commission” for “commission” wherever appearing except in last sentence, and substituted “paragraphs (1) and (2) of subsection (b) of this section” for “subparagraphs (A) and (B) of paragraph (2)”.

Subsec. (b). Pub. L. 102–546, § 402(1)(A), (2)(C), (D), redesignated par. (2) as subsec. (b) and subpars. (A) and (B) as pars. (1) and (2), respectively, and substituted “Commission” for “commission” wherever appearing.

Subsec. (c). Pub. L. 102–546, § 402(2)(B), (C), redesignated par. (3) as subsec. (c) and substituted “subsection (a)” for “paragraph (1)”.

Subsecs. (d), (e). Pub. L. 102–546, § 402(2)(C), redesignated pars. (4) and (5) as subsecs. (d) and (e), respectively.

1983—Par. (1). Pub. L. 97–444, § 205(1), (2), substituted “by rule, regulation, or order, proclaim” for “by order, proclaim” and inserted “or for different number of days remaining until the last day of trading in a contract,” after “delivery months”.

Par. (2). Pub. L. 97–444, § 205(1), (3), substituted “after the promulgation of the rule, regulation, or order” for “after the order’s promulgation” in provisions before subpar. (A) and substituted “rule, regulation, or order” for “order” in provisions before subpar. (A) and in subpars. (A) and (B).

Par. (3). Pub. L. 97–444, § 205(4), substituted “No rule, regulation, or order issued under paragraph (1) of this section shall apply to transactions or positions which are shown to be bona fide hedging transactions or positions as such terms shall be defined by the Commission by rule, regulation, or order consistent with the purposes of this chapter” for “No order issued under paragraph (1) of this section shall apply to transactions or positions which are shown to be bona fide hedging transactions or positions as such terms shall be defined by the Commission within one hundred and eighty days after the effective date of the Commodity Futures Trading Commission Act of 1974 by order consistent with the purposes of this chapter” and inserted “Such terms may be defined to permit producers, purchasers, sellers, middlemen, and users of a commodity or a product derived therefrom to hedge their legitimate anticipated business needs for that period of time into the future for which an appropriate futures contract is open and available on an exchange. To determine the adequacy of this chapter and the powers of the Commission acting thereunder to prevent unwarranted price pressures by large hedgers, the Commission shall monitor and analyze the trading activities of the largest hedgers, as determined by the Commission, operating in the cattle, hog, or pork belly markets and shall report its findings and recommendations to the Senate Committee on Agriculture, Nutrition, and Forestry and the House Committee on Agriculture in its annual reports for at least two years following January 11, 1983.”

Par. (4). Pub. L. 97–444, § 205(5), substituted “a futures commission merchant, an introducing broker, or a floor broker” for “a futures commission merchant or as floor broker”.

Par. (5). Pub. L. 97–444, § 205(6), added par. (5).

1975—Par. (3). Pub. L. 94–16 substituted “one hundred and eighty days” for “ninety days”.

1974—Par. (1). Pub. L. 93–463, § 403, inserted “or ‘arbitrage’ ” after “or ‘straddles’ ”, inserted definition of “arbitrage”, and authorized Commission to define “international arbitrage”.

Par. (3). Pub. L. 93–463, § 404, directed Commission to define “bona fide hedging transactions or positions” within 90 days after the effective date of the Commodity Futures Trading Commission Act of 1974 and struck out provisions which enumerated the factors to be taken into account in determining whether a hedging transaction or position was a bona fide transaction or position.

1968—Par. (1). Pub. L. 90–258, § 2, substituted in second sentence “amounts of trading” for “amount of trading”, inserted “which may be done or positions which may be held by any person” before “under contracts of sale”, and struck out “which may be done” after “rules of any contract market”, inserted third sentence providing for inclusion of controlled positions and trading in determining whether prescribed position or trading limits have been exceeded and for application of such position and trading limits to activities of two or more persons acting pursuant to agreement or understanding as if the activities of a single person, and included in fourth, formerly third, sentence references to position limits and to positions, substituted “normally” for “commonly”, and struck out “trading” from “from fixing trading limits” and “from trading limits”.

Par. (2)(B). Pub. L. 90–258, § 3, substituted prohibition against holding of net long or net short positions in excess of any position limit fixed by the Commission for former prohibition of purchases or sales which result in net long or net short positions in excess of trading limits fixed by the Commission and provided that the position limit shall not apply to a position acquired in good faith prior to the effective date of the order.

Par. (3). Pub. L. 90–258, § 4, included references to positions, made hedging applicable to short and long positions, substituted “contract market” for “board of trade”, and required the activities to be those of the same person to constitute hedging.

1956—Par. (3)(C). Act July 24, 1956, added subpar. (C).

### Statutory Notes and Related Subsidiaries

### Effective Date of 2010 Amendment

Pub. L. 111–203, title VII, § 737(d), July 21, 2010, 124 Stat. 1725, provided that: “This section [amending this section] and the amendments made by this section shall become effective on the date of the enactment of this section [July 21, 2010].”

### Effective Date of 2008 Amendment

Amendment of this section and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, except as otherwise provided, see section 4 of Pub. L. 110–246, set out as an Effective Date note under section 8701 of this title.

Amendment by section 13203(g) of Pub. L. 110–246 effective June 18, 2008, see section 13204(a) of Pub. L. 110–246, set out as a note under section 2 of this title.

### Effective Date of 1983 Amendment

Amendment by Pub. L. 97–444 effective Jan. 11, 1983, see section 239 of Pub. L. 97–444, set out as a note under section 2 of this title.

### Effective Date of 1974 Amendment

Pub. L. 93–463, title IV, § 404, Oct. 23, 1974, 88 Stat. 1413, provided that the amendment of par. (3) which struck out provisions that enumerated the factors to be taken into account in determining whether a hedging transaction or position was a bona fide transaction or position, was effective immediately upon the enactment of Pub. L. 93–463, which was approved Oct. 23, 1974.

Amendment by Pub. L. 93–463 of par. (1) and that part of par. (3) directing the Commission to define “bona fide hedging transactions or positions” effective so as to allow implementation of all changes effected by this amendment to be carried out after Oct. 23, 1974, and before as well as after the 180th day thereafter, see section 418 of Pub. L. 93–463, set out as a note under section 2 of this title.

### Effective Date of 1968 Amendment

Amendment by Pub. L. 90–258 effective 120 days after Feb. 19, 1968, see section 28 of Pub. L. 90–258, set out as a note under section 2 of this title.

### Effective Date of 1956 Amendment

Act July 24, 1956, ch. 690, § 2, 70 Stat. 630, provided that: “This Act [amending this section] shall take effect sixty days after the date of its enactment [July 24, 1956].”

### Effective Date

For effective date of section, see section 13 of act June 15, 1936, set out as an Effective Date of 1936 Amendment note under section 1 of this title.

### Regulations Defining Bona Fide Hedging Transactions and Positions

Pub. L. 93–463, title IV, § 404, Oct. 23, 1974, 88 Stat. 1413, provided in part: “That notwithstanding any other provision of law, the Secretary of Agriculture, immediately upon the enactment of the Commodity Futures Trading Commission Act of 1974 [which was approved on Oct. 23, 1974], is authorized and directed to promulgate regulations defining bona fide hedging transactions and positions: And provided further, That until the Secretary issues such regulations defining bona fide hedging transactions and positions and such regulations are in full force and effect, such terms shall continue to be defined as set forth in the Commodity Exchange Act [par. (3) of this section] prior to its amendment by the Commodity Futures Trading Commission Act of 1974 [Pub. L. 93–463].”