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Nine Key Ways The pros Use For 3
These guidelines present strategies of calculation and steering for national securities exchanges, designated contract markets, registered DTEFs, and international boards of commerce in figuring out whether or not a security index is slender-primarily based below the Exchange Act. Securities Markets Coalition ("Coalition"),139 raised concerns over sure tax implications that these markets imagine consequence from the definition of slender-primarily based safety index and the rules as proposed. In addition, the SEC believes that it is not empowered to undertake the equivalent of CEA Rule 41.14 under the Exchange Act, which provides relief for futures on indexes that become broad-primarily based, as a result of the SEC has no jurisdiction over broad-based mostly security index futures. The SEC additionally acquired several feedback relating to potential prices that is perhaps incurred except totally different criteria for the definition of slim-primarily based 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 under the Exchange Act, which set up that when a futures contract on a safety index is traded on or subject to the foundations of a international board of trade, that index won't be considered a slim-primarily based security index if it would not be a narrow-based mostly security index if a futures contract on such index have been traded on a delegated contract market or registered DTEF.

Two commenters raised issues regarding the therapy of futures on Exchange Traded Funds.140 The Commissions consider that these points fall outdoors the scope of the current rulemaking and will not handle them on this context. The present burden hour estimate for Rule 17a-1, as of July 20, 1998, is 50 hours per 12 months for every exchange.160 Within the Proposing Release, the SEC estimated that it might take every of the 11 national securities exchanges, including discover-registered national securities exchanges, expected to commerce futures contracts on safety indexes one hour yearly to retain any paperwork made or received by it in determining whether or not an index is a slim-based mostly safety index. As to the dedication of which indexes qualify as broad-primarily based and which are treated as narrow-primarily based, the tax laws incorporate by reference the definition of slim-based security index within the Exchange Act. 2. Burden Hours National securities exchanges, together with notice-registered national securities exchanges, that trade futures contacts on safety indexes will probably be required to comply with the recordkeeping necessities underneath Rule 17a-1. National securities exchanges, together with notice-registered national securities exchanges, shall be required to retain and store any paperwork related to determinations made using 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 standing of a securities index as slim-primarily based or broad-based mostly, be made, whereas Exchange Act Rule 17a-1 merely requires that such determinations be retained. Accordingly, to adjust to these recordkeeping requirements, a national securities exchange, together with a discover-registered nationwide securities exchange, that lists or trades futures contracts on slender-based safety indexes can be required to preserve records of any calculations used to find out whether or not an index is narrow-primarily based.158 B. Total Annual Reporting and Recordkeeping Burden 1. Capital Costs Rule 17a-1 beneath the Exchange Act requires a nationwide securities exchange, including any notice-registered national securities exchange, that trades futures contracts on a narrow-based security index to carry on file for a period of no less than 5 years, the first two years in an easily accessible place, all data concerning their determinations that such indexes had been slender-based mostly. This commenter famous that a single compiler of the lists will result in consistent therapy 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 safety 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 rules to grow to be effective on August 21, 2001, so that eligible contract contributors might begin buying and selling the brand new merchandise as contemplated by the CFMA. https://Coin-viewer.com that principal-to-principal transactions between sure eligible contract contributors in safety futures products could begin on August 21, 2001, or such date that a futures association registered underneath Section 17 of the CEA meets the necessities in Section 15A(ok)(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 narrow-primarily based safety indexes. The SEC proposed these guidelines on May 17, 2001. The initial comment interval for the rules expired on June 18, 2001. The remark interval, 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 foundations, which give the strategies for markets to determine whether or not a security index is slim-based or broad-based mostly as required by the Exchange Act, as amended by the CFMA.

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