Notes

7 Key Ways The professionals Use For 3
These guidelines provide strategies of calculation and steerage for national securities exchanges, designated contract markets, registered DTEFs, and overseas boards of trade in determining whether or not a safety index is slim-primarily based beneath the Exchange Act. Securities Markets Coalition ("Coalition"),139 raised concerns over certain tax implications that these markets consider outcome from the definition of narrow-based mostly safety index and the foundations as proposed. As well as, the SEC believes that it is not empowered to adopt the equal of CEA Rule 41.14 underneath the Exchange Act, which gives relief for futures on indexes that become broad-primarily based, as a result of the SEC has no jurisdiction over broad-primarily based safety index futures. The SEC additionally obtained a number of comments relating to potential costs that could be incurred until totally different criteria for the definition of narrow-based security index are adopted to accommodate indexes comprised of overseas securities.170 The SEC notes that the Commissions have adopted Rules 41.13 below the CEA and 3a55-3 beneath the Exchange Act, which set up that when a futures contract on a security index is traded on or subject to the rules of a overseas board of trade, that index will not be considered a slim-primarily based security index if it wouldn't be a slim-based mostly safety index if a futures contract on such index had been traded on a chosen contract market or registered DTEF.

Two commenters raised issues concerning the treatment of futures on Exchange Traded Funds.140 The Commissions consider that these issues fall outdoors the scope of the current rulemaking and won't deal with them in 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 could take every of the eleven national securities exchanges, including notice-registered national securities exchanges, anticipated to trade futures contracts on safety indexes one hour annually to retain any documents made or obtained by it in determining whether an index is a slim-primarily based safety index. As to https://ide.geeksforgeeks.org/tryit.php/513aafb9-bded-437b-81de-6fde20016b3e of which indexes qualify as broad-primarily based and which are handled as narrow-primarily based, the tax laws incorporate by reference the definition of narrow-based mostly safety index in the Exchange Act. 2. Burden Hours National securities exchanges, together with discover-registered national securities exchanges, that commerce futures contacts on security indexes can be required to adjust to the recordkeeping requirements below Rule 17a-1. National securities exchanges, together with notice-registered nationwide securities exchanges, will probably be required to retain and retailer any documents related to determinations made utilizing the definitions in Exchange Act Rule 3a55-1 for at least 5 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 slim-based or broad-based, be made, while Exchange Act Rule 17a-1 merely requires that such determinations be retained. Accordingly, to adjust to these recordkeeping requirements, a nationwide securities exchange, including a notice-registered national securities exchange, that lists or trades futures contracts on slim-based mostly security indexes will probably be required to preserve records of any calculations used to determine whether an index is slim-based.158 B. Total Annual Reporting and Recordkeeping Burden 1. Capital Costs Rule 17a-1 under the Exchange Act requires a national securities exchange, together with any notice-registered national securities exchange, that trades futures contracts on a slim-primarily based safety index to keep on file for a period of no lower than five years, the primary two years in an simply accessible place, all data regarding their determinations that such indexes have been narrow-primarily based. This commenter noted that a single compiler of the lists will end in consistent treatment of futures on security indexes.

The CFMA lifted the ban on the trading of futures on single securities and on narrow-primarily based safety indexes and established a framework for the joint regulation of these merchandise by the CFTC and the SEC. The CFTC believes good trigger exists for the foundations to develop into efficient on August 21, 2001, in order that eligible contract contributors could begin buying and selling the brand new merchandise as contemplated by the CFMA. The CFMA offers that principal-to-principal transactions between sure eligible contract participants in safety futures merchandise might begin on August 21, 2001, or such date that a futures association registered below Section 17 of the CEA meets the requirements in Section 15A(okay)(2) of the Exchange Act.143 The CFMA lifted the ban on, and permits the buying and selling of, futures contracts on single securities and on slim-based mostly security indexes. The SEC proposed these rules on May 17, 2001. The preliminary remark period for the foundations expired on June 18, 2001. The remark period, nonetheless, was prolonged by the CFTC and the SEC until July 11, 2001. After reviewing and considering the comments obtained, the SEC is adopting the rules, which provide the strategies for markets to find out whether or not a security index is slim-based mostly or broad-primarily based as required by the Exchange Act, as amended by the CFMA.

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