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These rules present strategies of calculation and steering for nationwide securities exchanges, designated contract markets, registered DTEFs, and overseas boards of trade in determining whether or not a security index is slim-based mostly underneath the Exchange Act. Securities Markets Coalition ("Coalition"),139 raised issues over sure tax implications that these markets believe result from the definition of slender-primarily based security index and the rules as proposed. In addition, the SEC believes that it is not empowered to adopt the equivalent of CEA Rule 41.14 below the Exchange Act, which provides relief for futures on indexes that become broad-based, because the SEC has no jurisdiction over broad-based safety index futures. The SEC additionally received a number of feedback concerning potential costs that is perhaps incurred except completely different standards for the definition of narrow-based mostly security index are adopted to accommodate indexes comprised of international securities.170 The SEC notes that the Commissions have adopted Rules 41.Thirteen beneath the CEA and 3a55-3 under the Exchange Act, which set up that when a futures contract on a security index is traded on or topic to the foundations of a international board of commerce, that index will not be thought of a narrow-based security index if it would not be a slim-based mostly safety index if a futures contract on such index had been traded on a designated contract market or registered DTEF.

Two commenters raised points concerning the treatment of futures on Exchange Traded Funds.140 The Commissions consider that these issues fall outdoors the scope of the present rulemaking and will not handle them in this context. The current burden hour estimate for Rule 17a-1, as of July 20, 1998, is 50 hours per year for every exchange.160 In the Proposing Release, the SEC estimated that it will take every of the 11 nationwide securities exchanges, including discover-registered national securities exchanges, anticipated to commerce futures contracts on safety indexes one hour yearly to retain any documents made or acquired by it in figuring out whether an index is a slim-based mostly safety index. As to the dedication of which indexes qualify as broad-primarily based and that are handled as slender-primarily based, the tax legal guidelines incorporate by reference the definition of narrow-based safety index within the Exchange Act. 2. Burden Hours National securities exchanges, including discover-registered national securities exchanges, that commerce futures contacts on safety indexes will be required to comply with the recordkeeping requirements under Rule 17a-1. National securities exchanges, together with discover-registered national securities exchanges, will likely be required to retain and retailer any paperwork associated to determinations made utilizing the definitions in Exchange Act Rule 3a55-1 for at least five years, the primary two years in an simply accessible place.

The CFMA requires that the determinations as to market capitalization and greenback worth of ADTV, and thus the standing of a securities index as slim-based mostly or broad-based mostly, be made, while Exchange Act Rule 17a-1 merely requires that such determinations be retained. Accordingly, to comply with these recordkeeping requirements, a national securities exchange, including a notice-registered nationwide securities exchange, that lists or trades futures contracts on slender-based security indexes might be required to preserve data of any calculations used to find out whether an index is narrow-based.158 B. Total Annual Reporting and Recordkeeping Burden 1. Capital Costs Rule 17a-1 below the Exchange Act requires a nationwide securities exchange, together with any notice-registered nationwide securities exchange, that trades futures contracts on a narrow-primarily based security index to carry on file for a interval of no less than five years, the first two years in an easily accessible place, all data concerning their determinations that such indexes had been slim-based. https://www.openlearning.com/u/suarezmckinnon-s2cuyw/blog/EveryThingYouWantedToKnowAboutBinanceP2PAndWereAfraidToAsk noted that a single compiler of the lists will end in constant remedy of futures on safety indexes.

The CFMA lifted the ban on the buying and selling of futures on single securities and on slim-primarily based security indexes and established a framework for the joint regulation of those merchandise by the CFTC and the SEC. The CFTC believes good cause exists for the principles to change into effective on August 21, 2001, in order that eligible contract participants may begin trading the brand new merchandise as contemplated by the CFMA. https://notes.io/wqHj8 that principal-to-principal transactions between sure eligible contract participants in security futures merchandise may begin on August 21, 2001, or such date that a futures association 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-based mostly safety indexes. The SEC proposed these rules on May 17, 2001. The preliminary comment interval for the principles expired on June 18, 2001. The comment period, however, was prolonged by the CFTC and the SEC till July 11, 2001. After reviewing and considering the feedback obtained, the SEC is adopting the principles, which provide the strategies for markets to find out whether or not a security index is slim-based or broad-primarily based as required by the Exchange Act, as amended by the CFMA.

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