For purposes of this part, the
following terms have the same meaning as in the Commodity Exchange
Act (7 U.S.C. 1 et seq.): “affiliated person of a futures commission
merchant”; “associated person”; “contract of sale”; “commodity”; “futures
commission merchant”; “future delivery”; “option”; “security”; and
“security futures product.”
(a) Affiliate has the same meaning as in section 2(k) of the Bank Holding Company
Act of 1956 (12 U.S.C. 1841(k)).
(b) Banking
institution means:
(1) A state member bank (as defined in
12 CFR 208.2);
(2)
An uninsured state-licensed U.S. branch or agency of a foreign bank;
(3) A financial holding
company (as defined in section 2 of the Bank Holding Company Act of
1956; 12 U.S.C. 1841);
(4) A bank holding company (as defined in section 2 of the Bank Holding Company
Act of 1956; 12 U.S.C. 1841);
(5) A savings and loan holding company
(as defined in section 10 of the Home Owners Loan Act; 12 U.S.C. 1467a)
(6) A corporation operating
under the fifth undesignated paragraph of section 25 of the Federal
Reserve Act (12 U.S.C. 603), commonly known as “an agreement corporation;”
and
(7) A corporation
organized under section 25A of the Federal Reserve Act (12 U.S.C.
611 et seq.), commonly known as an “Edge Act corporation.”
(c) Commodity Exchange Act means
the Commodity Exchange Act (7 U.S.C. 1 et seq.).
(d) Eligible contract participant has the same
meaning as in the Commodity Exchange Act (7 U.S.C. 1 et seq., as implemented in 17 CFR 1.3(m)).
(e) Forex means foreign exchange.
(f) Identified banking
product has the same meaning as in section 401(b) of the Legal
Certainty for Bank Products Act of 2000 (7 U.S.C. 27(b)).
(g) Institution-affiliated party or IAP has
the same meaning as in 12 U.S.C. 1813(u)(1), (2), or (3).
(h) Introducing broker means any person who solicits
or accepts orders from a retail forex customer in connection with
retail forex transactions.
(i) Related person, when used in reference to a retail forex counterparty, means:
(1) Any general partner, officer, director,
or owner of ten percent or more of the capital stock of the retail
forex counterparty;
(2) An associated person or employee of the retail forex counterparty,
if the retail forex counterparty is not an insured depository institution;
(3) An IAP, if the retail
forex counterparty is an insured depository institution; and
(4) Any relative or spouse
of any of the foregoing persons, or any relative of such spouse, who
shares the same home as any of the foregoing persons.
(j) Retail foreign exchange dealer means any
person other than a retail forex customer that is, or that offers
to be, the counterparty to a retail forex transaction, except for
a person described in item (aa), (bb), (cc)(AA), (dd), or (ff) of
section 2(c)(2)(B)(i)(II) of the Commodity Exchange Act (7 U.S.C.
2(c)(2)(B)(i)(II)).
(k) Retail forex account means the account of a retail forex customer, established with a
banking institution, in which retail forex transactions with the banking
institution as counterparty are undertaken, or the account of a retail
forex customer that is established in order to enter into such transactions.
(l) Retail forex account agreement means the contractual agreement between a banking institution and
a retail forex customer that contains the terms governing the customer’s
retail forex account with the banking institution.
(m) Retail forex business means engaging in one or more retail
forex transactions with the intent to derive income from those transactions,
either directly or indirectly.
(n) Retail forex
counterparty includes, as appropriate:
(1) A banking institution;
(2) A retail foreign exchange dealer;
(3) A futures commission
merchant;
(4) An affiliated
person of a futures commission merchant; and
(5) A broker or dealer registered under
section 15(b) (except paragraph (11) thereof) or 15C of the Securities
Exchange Act of 1934 (15 U.S.C. 78o(b), 78o-5) or a U.S. financial
institution other than a banking institution, provided the counterparty
is subject to a rule or regulation of a Federal regulatory agency
covering retail forex transactions.
(o) Retail forex customer means a customer that is not an eligible
contract participant, acting on his, her, or its own behalf and engaging
in retail forex transactions.
(p) Retail forex
proprietary account means a retail forex account carried on the
books of a banking institution for one of the following persons;
a retail forex account of which 10 percent or more is owned by one
of the following persons; or a retail forex account of which an aggregate
of 10 percent or more of which is owned by more than one of the following
persons:
(1) The banking institution;
(2) An officer, director
or owner of ten percent or more of the capital stock of the banking
institution; or
(3)
An employee of the banking institution, whose duties include:
(i) The management
of the banking institution’s business;
(ii) The handling of the banking institution’s
retail forex transactions;
(iii) The keeping of records, including
without limitation the software used to make or maintain those records,
pertaining to the banking institution’s retail forex transactions;
or
(iv) The signing
or co-signing of checks or drafts on behalf of the banking institution;
(4) A spouse
or minor dependent living in the same household as of any of the foregoing
persons; or
(5) An
affiliate of the banking institution.
(q) Retail forex transaction means an agreement, contract,
or transaction in foreign currency, other than an identified banking
product or a part of an identified banking product, that is offered
or entered into by a banking institution with a person that is not
an eligible contract participant and that is:
(1) A contract of sale of a commodity for
future delivery or an option on such a contract; or
(2) An option, other than an option executed
or traded on a national securities exchange registered pursuant to
section 6(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78f(a));
or
(3) Offered or entered
into on a leveraged or margined basis, or financed by a banking institution,
its affiliate, or any person acting in concert with the banking institution
or its affiliate on a similar basis, other than:
(i) A security
that is not a security futures product as defined in section 1a(47)
of the Commodity Exchange Act (7 U.S.C. 1a(47)); or
(ii) A contract of sale that—
(A) Results in
actual delivery within two days; or
(B) Creates an enforceable obligation to deliver
between a seller and buyer that have the ability to deliver and accept
delivery, respectively, in connection with their line of business;
or
(iii) An agreement, contract, or transaction that the Board determines
is not functionally or economically similar to an agreement, contract,
or transaction described in paragraph (p)(1) or (p)(2) of this section.
