Page:United States Statutes at Large Volume 106 Part 4.djvu/859
PUBLIC LAW 102-546—OCT. 28, 1992 106 STAT. 3595 cost-, profit-, or capital-sharing agreements or other formal arrangement among or between floor brokers and traders on such contract market where such partnership agreement or arrangement is material and known to the floor broker or floor trader;". TITLE II—ENHANCEMENT OF REGULATORY AND ENFORCEMENT ACTIVITIES SEC. 201. DUTIES OF CONTRACT MARKETS; AUDIT TRAILS. (a) IN GENERAL.—Section 5a (7 U.S.C. 7a) is amended— (1) by inserting "(a)" after the section designation; and (2) by adding at the end the following new subsection: "(b)(1) Each contract market shall maintain and utilize a system to monitor trading to detect and deter violations of the contract market's rules and regulations committed in the making of trades and the execution of customer orders on the floor or subject to the rules of such contract market. The system shall include— "(A) physical observation of trading areas; "(B) audit trail and recordkeeping systems able to capture essential data on the terms, participants, and sequence of transactions (including relevant data on unmatched trades and outtrades); "(C) systems capable of reviewing, and used to review, data on trades effectively on a regular basis to detect violations committed in making trades and executing customer orders on the floor or subject to the rules of such contract market, including— "(i) all types of violations attributable to dual trading; and "(ii) to the full extent feasible, as determined by the Commission, all other types of violations involving the making of trades and the execution of customer orders; "(D) the use of information gathered through such system on a consistent basis to bring appropriate disciplinary actions against violators; "(E) the commitment of resources to such system necessary for such system to be effective in detecting and deterring such violations, including adequate staff to develop and prosecute disciplinary actions; and (F) the assessment of meaningful penalties against violators and the referral of appropriate cases to the Commission. "(2) The audit trail system of the contract market shall, consistent with Commission regialations, accurately record— "(A) the times of trades in increments of no more than one minute in length; and "(B) the sequence of trades for each floor trader and broker. "(3) Beginning three years after the date of enactment of this subsection, the audit trail system of each contract market, except as provided in paragraph (5) and except to the extent the Commission determines that circumstances beyond the control of the contract market prevent compliance despite the contract market's affirmative good faith efforts to comply, shall— "(A) for all trades, record accurately and promptly the essential data on terms, participants, and times as required by the Commission by nue, including the time of execution of such trade, through a means that— Records. Records.