92 STAT. 868
Regulations.
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PUBLIC LAW 9 5 - 4 0 5 — S E P T. 30, 1978 lations in effect on August 17, 1978, until t h i r t y 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 g r a n t or issue options pending a final determination by the Commission on the application; and 'V " (2) the Commission shall issue regulations that permit grantors and futures commission merchants to offer to enter into, enter into, or confirm the execution of, any commodity option transaction on a physical commodity subject to the provisions of subsection (b) of this section if— " (A) the g r a n to r is a person domiciled in the United States who— " (i) is in the business of buying, selling, producing, or otherwise using the underlying commodity; " (ii) 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; " ( l i i) notifies the Commission and every futures commission merchant offering the grantor's option if the g r a n to r knows or has reason to believe that the grantor's net worth has fallen below $5,000,000; " ( i v) segregates daily, exclusively for the benefit of purchasers, money, exempted securities (within the meaning of section 8(a) (12) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a) ( 1 2)), 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; " (v) provides an identification number for each transaction; and " ( v i) provides confirmation of all orders for such transactions executed, including the execution price and ' • a transaction identification number; " (B) the futures commission merchant is a person who— " (i) has evidence that the grantor meets the requirements specified in subclause (A) of this clause; " ( i i) 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; " ( i i i) records each transaction in its customer's name by the transaction identification number provided by the grantor; " ( i v) 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 1 " (C) the g r a n to r and futures commission merchant comply with any additional uniform and reasonable terms and conditions the Commission may prescribe, including registration with the Commission.
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