§10a Cooperative Associations and Corporations, Exclusion From Board of Trade; Rules of Board Inapplicable to Payment of Compensation by Association

Summary

Registered boards of trade that operate as contract markets or derivatives facilities must allow cooperative associations or corporations that do cash commodity business and have enough financial responsibility to become members and use the market. These co-ops must be formed under State cooperative law or recognized by the U.S. government. They must follow the same rules and conditions that other members follow. A board can only block them after the commission allows it and after a hearing with at least three days’ notice following the board’s complaint. If a co-op fails to meet its duties to a market’s clearing house or clearing agency, it is automatically barred from trading except to close or settle its open trades under the market’s rules. The commission can require the co-op to keep membership (with or without conditions) or allow the board to bar it right away. Any commission order can be reviewed by the court of appeals for the circuit where the co-op or board has its main office, on written petition, but the order is not put on hold while the court reviews it. No board rule may stop a federated cooperative (a main co-op that works with regional member co-ops) from paying its regional member-associations for services like organizing, education, or getting patronage. Those payments are allowed so long as no part of them is returned to patrons except as a dividend on capital stock or as a patronage dividend paid from the co-op’s net earnings or surplus.