17 CFR § 31.20 - Prohibition of guarantees against loss.

---
identifier: "/us/cfr/t17/s31.20"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "17 CFR § 31.20 - Prohibition of guarantees against loss."
title_number: 17
title_name: "Commodity and Securities Exchanges"
section_number: "31.20"
section_name: "Prohibition of guarantees against loss."
chapter_name: "COMMODITY FUTURES TRADING COMMISSION"
part_number: "31"
part_name: "LEVERAGE TRANSACTIONS"
positive_law: false
currency: "2026-04-05"
last_updated: "2026-04-05"
format_version: "1.1.0"
generator: "[email protected]"
authority: "7 U.S.C. 12a and 23, unless otherwise noted."
cfr_part: "31"
---


# 31.20 Prohibition of guarantees against loss.

(a) No leverage transaction merchant shall in any way represent that it will, with respect to any leverage contract in any account carried by the leverage transaction merchant for or on behalf of any person:

(1) Guarantee such person against loss;

(2) Limit the loss of such person; or

(3) Not call for or attempt to collect initial, minimum or maintenance leverage margin established for customers.

(b) No person shall in any way represent that a leverage transaction merchant will engage in any of the acts or practices described in paragraphs (a)(1), (a)(2) or (a)(3) of this section.

(c) This section shall not be construed to prevent a leverage transaction merchant from assuming or sharing in the losses resulting from an error or mishandling of an order.

(d) This section shall not affect any guarantee entered into prior to the effective date of this section, but this section shall apply to any extension, modification or renewal thereof entered into after such date.

[49 FR 5540, Feb. 13, 1984]