Notes

Four Key Tactics The pros Use For 3
These rules provide strategies of calculation and guidance for national securities exchanges, designated contract markets, registered DTEFs, and foreign boards of trade in figuring out whether a safety index is slim-primarily based underneath the Exchange Act. Securities Markets Coalition ("Coalition"),139 raised concerns over sure tax implications that these markets imagine end result from the definition of narrow-based security index and the rules as proposed. As well as, https://ide.geeksforgeeks.org/tryit.php/3bda25ff-962c-4fb9-be62-05cd9eae4c9b believes that it isn't empowered to adopt the equivalent of CEA Rule 41.14 under the Exchange Act, which provides relief for futures on indexes that develop into broad-primarily based, because the SEC has no jurisdiction over broad-primarily based safety index futures. The SEC additionally obtained several comments relating to potential costs that is perhaps incurred unless completely different standards for the definition of slim-based mostly security index are adopted to accommodate indexes comprised of international securities.170 The SEC notes that the Commissions have adopted Rules 41.13 below the CEA and 3a55-3 underneath the Exchange Act, which establish that when a futures contract on a safety index is traded on or topic to the foundations of a overseas board of trade, that index will not be thought of a slim-based mostly safety index if it would not be a narrow-based mostly safety index if a futures contract on such index have been traded on a designated contract market or registered DTEF.

Two commenters raised points regarding the remedy of futures on Exchange Traded Funds.140 The Commissions imagine that these points fall exterior the scope of the present rulemaking and is not going to deal with them on this context. The current burden hour estimate for Rule 17a-1, as of July 20, 1998, is 50 hours per year for each exchange.160 Within the Proposing Release, the SEC estimated that it will take every of the eleven national securities exchanges, together with discover-registered national securities exchanges, anticipated to trade futures contracts on safety indexes one hour annually to retain any documents made or acquired by it in determining whether an index is a slim-based mostly security index. As to the willpower of which indexes qualify as broad-based mostly and that are treated as slim-based mostly, the tax legal guidelines incorporate by reference the definition of narrow-based security index in the Exchange Act. 2. Burden Hours National securities exchanges, together with notice-registered national securities exchanges, that commerce futures contacts on safety indexes can be required to comply with the recordkeeping necessities below Rule 17a-1. National securities exchanges, including notice-registered nationwide securities exchanges, might be required to retain and store any documents related to determinations made using the definitions in Exchange Act Rule 3a55-1 for no less than five years, the primary two years in an easily accessible place.

The CFMA requires that the determinations as to market capitalization and dollar worth of ADTV, and thus the status of a securities index as narrow-based mostly or broad-primarily based, be made, while Exchange Act Rule 17a-1 simply requires that such determinations be retained. Accordingly, to adjust to these recordkeeping necessities, a national securities exchange, together with a discover-registered nationwide securities exchange, that lists or trades futures contracts on slim-primarily based security indexes might be required to preserve information of any calculations used to find out whether an index is slim-based.158 B. Total Annual Reporting and Recordkeeping Burden 1. Capital Costs Rule 17a-1 underneath the Exchange Act requires a national securities exchange, including any discover-registered nationwide securities exchange, that trades futures contracts on a narrow-primarily based security index to carry on file for a period of no less than 5 years, the primary two years in an simply accessible place, all records regarding their determinations that such indexes were slim-primarily based. This commenter noted that a single compiler of the lists will end in constant remedy of futures on security indexes.

The CFMA lifted the ban on the trading of futures on single securities and on slender-based safety indexes and established a framework for the joint regulation of these products by the CFTC and the SEC. The CFTC believes good trigger exists for the rules to turn into efficient on August 21, 2001, in order that eligible contract participants may start trading the new products as contemplated by the CFMA. The CFMA supplies that principal-to-principal transactions between sure eligible contract individuals in safety futures merchandise could begin on August 21, 2001, or such date that a futures affiliation registered under Section 17 of the CEA meets the requirements in Section 15A(k)(2) of the Exchange Act.143 The CFMA lifted the ban on, and permits the trading of, futures contracts on single securities and on slim-primarily based safety indexes. The SEC proposed these guidelines on May 17, 2001. The preliminary comment interval for the foundations expired on June 18, 2001. The remark period, nevertheless, was prolonged by the CFTC and the SEC till July 11, 2001. After reviewing and considering the comments received, the SEC is adopting the foundations, which provide the methods for markets to determine whether or not a security index is slim-primarily based or broad-based as required by the Exchange Act, as amended by the CFMA.

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