Futures Trading Act of 1978

Futures Trading Act - Amends the Commodity Exchange Act to: (1) extend the Commodity Futures Trading Commission through fiscal year 1982; (2) exclude from the definition of commodity trading advisor any dealers of cash commodities and products thereof, and nonprofit, voluntary membership, general farm organizations that give advice relating to agricultural commodities in cash market transactions; (3) provide for appointment of the Commission Chairman by the President, to serve at the President's pleasure; and (4) subject the use and expenditure of funds by the Chairman to the budget categories, plans, and priorities established by the Commission.

Prohibits any Commissioner or employee of the Commission in a confidential or policymaking position at or above the GS-16 level from making any appearance before, or communication to the Commission on behalf of any person on any particular matter before the Commission for the period of a year following his or her last day of service.

Requires the Commission to maintain communications with the Department of Treasury, the Board of Governors of the Federal Reserve System, and the Securities and Exchange Commission to: (1) keep such agencies fully informed of Commission activities that relate to their responsibilities; (2) seek the views of those agencies for such activities; and (3) consider the relationships between the volume and nature of investment and trading in futures contracts under the jurisdiction of the Commission and in securities and/or financial instruments under the jurisdiction of such agencies.

Sets forth the procedure for designating a board of trade as a contract market.

Prohibits commodity options transactions, except "trade" options, until the Commission documents to the appropriate Congressional committees its ability to regulate these transactions. Permits certain option grantors to continue to grant such options until 30 days following the effective date of any Commission regulations issued under this Act.

Sets forth requirements a grantor of an option and a future commission merchant must satisfy. Authorizes the Commission to permit persons not domiciled in the United States to grant options in this country under requirements substantially equivalent to those applicable to domestic options grantors. Allows the Commission to prohibit any or all commodity option transactions, after notice and opportunity for a hearing on the record, if it determines that such options are contrary to the public interest.

Authorizes the Commissioner to permit futures commission merchants to commingle customers' segregated funds for different classes of transactions subject to such terms and conditions as the Commission may prescribe.

Allows the registration of Commission merchants and floor brokers to extend beyond December 31st and to expire not earlier than one year from the date of issue.

Permits the Commission to authorize a registered futures association to perform any part of the registration functions with respect to associated persons.

Applies the anti-fraud provisions of such Act to all advisors and pool operators regardless of whether they are registered or not.

Allows a contract market to delegate the conduct of an arbitration process to a registered futures association having rules providing for such procedures.

Requires the Commission, at least 30 days before approving rules and regulations of major economic significance submitted by contract markets for their own governance, to publish such proposed rules in the Federal Register. Extends the time in which the Commission must determine such approvals to 60 days.

Authorizes the Commission to administer oaths and affirmations, to subpena witnesses, and to invoke the aid of United States courts for the purpose of conducting investigations and proceedings.

Requires a hearing on the record for: (1) refusal, suspension, or revocation of contract market designations; (2) cease and desist orders; and (3) imposition of civil penalties. Grants subpena power to members of the Commission and any Administrative Law Judge or other officer designated by them.

Grants concurrent jurisdiction to State agencies or officials to investigate or prosecute civil violations of such Act committed by any persons or organizations other than a designated contract market or a board of trade licensed by the Commission.

Provides that United States' district courts shall have jurisdiction of all such suits.

Removes the requirements, under such Act, concerning disclosure of: (1) traders and their positions on boards of trade to the public; (2) results of exchange disciplinary proceedings; and (3) improper transactions.

Prohibits the Commission from making public disclosure of any data or information which would separately disclose the market positions, business transactions, trade secrets or names of customers not previously disclosed publicly in a judicial or congressional proceeding, or in an administrative proceeding pursuant to the Commodity Exchange Act, as amended.

Requires the Secretary of Agriculture to conduct a study of the marketing and futures trading of Irish potatoes.

Authorizes the Commission to require fingerprinting of applicants for registration as Commission merchants or associates.

Increases the maximum penalty for a felony violation of the Commodity Exchange Act to $500,000 for organizations.

Increases from $2,500 to $5,000 the amount of damages that may be claimed in complaints that may be adjusted without a hearing.

Authorizes to be appropriated to carry out the provisions of this Act such sums as may be required for fiscal year 1982.

Increases from $5,000 to $15,000 the upper limit on claims eligible for a registered futures association's arbitration proceedings.

Authorizes the Commission to approve rules of futures associations that, directly or indirectly, require persons eligible for membership in such associations to become members of at least one such association, if the Commission determines that such rules are necessary or appropriate.

Prohibits all leverage transactions on domestic basic agricultural commodities. Authorizes the Commission to prohibit or regulate leverage transactions on all other commodities by October 1, 1979.

Authorizes the Commission to grant use immunity to witnesses appearing before the Commission.

Authorizes the Commission to develop and implement a plan to charge and collect reasonable fees to cover the estimated cost of regulating transactions under its jurisdiction. Requires the Commission to report such intended plan to the appropriate committees for their approval prior to implementation.

Makes the provisions of this Act effective October 1, 1978.