These guidelines provide methods of calculation and steering for national securities exchanges, designated contract markets, registered DTEFs, and overseas boards of trade in determining whether a security index is slender-based mostly below the Exchange Act. Securities Markets Coalition ("Coalition"),139 raised considerations over sure tax implications that these markets consider outcome from the definition of narrow-based mostly safety index and the principles as proposed. In addition, the SEC believes that it's not empowered to adopt the equivalent of CEA Rule 41.14 below the Exchange Act, which offers relief for futures on indexes that grow to be broad-based mostly, because the SEC has no jurisdiction over broad-based security index futures. The SEC additionally received a number of feedback relating to potential costs that is likely to be incurred except completely different criteria for the definition of slim-based safety index are adopted to accommodate indexes comprised of foreign securities.170 The SEC notes that the Commissions have adopted Rules 41.Thirteen under the CEA and 3a55-3 underneath the Exchange Act, which set up that when a futures contract on a safety index is traded on or topic to the rules of a international board of commerce, that index will not be thought-about a narrow-primarily based security index if it would not be a slim-primarily based security index if a futures contract on such index were 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 issues fall outside the scope of the present rulemaking and won't handle them on this context. The current 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 will take every of the 11 nationwide securities exchanges, including discover-registered nationwide securities exchanges, anticipated to trade futures contracts on safety indexes one hour annually to retain any paperwork made or obtained by it in figuring out whether an index is a narrow-based mostly safety index. As to the willpower of which indexes qualify as broad-based and that are treated as slim-primarily based, the tax legal guidelines incorporate by reference the definition of slender-based security index within the Exchange Act. 2. Burden Hours National securities exchanges, together with discover-registered national securities exchanges, that trade futures contacts on security indexes might be required to comply with the recordkeeping requirements beneath Rule 17a-1. National securities exchanges, including notice-registered nationwide securities exchanges, shall be required to retain and retailer any paperwork related to determinations made using 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 narrow-based or broad-based mostly, be made, whereas Exchange Act Rule 17a-1 merely requires that such determinations be retained. Accordingly, to comply with these recordkeeping requirements, a national securities exchange, together with a notice-registered nationwide securities exchange, that lists or trades futures contracts on slim-based mostly safety indexes will be required to preserve records of any calculations used to determine whether an index is narrow-primarily based.158 B. Total Annual Reporting and Recordkeeping Burden 1. https://bladedigitalmedia.com/contents/%eb%b0%94%ec%9d%b4%eb%b9%84%ed%8a%b8-%ed%8e%80%eb%94%a9-%eb%b9%84%ec%9c%a8-%eb%82%b4%ec%97%ad%ec%9d%b4-%ec%a4%91%ec%9a%94%ed%95%9c-%ec%9d%b4%ec%9c%a0%eb%8a%94-%eb%ac%b4%ec%97%87%ec%9d%b8%ea%b0%80/ -1 underneath the Exchange Act requires a national securities exchange, including any notice-registered nationwide securities exchange, that trades futures contracts on a slim-based safety index to carry on file for a period of no less than 5 years, the first two years in an simply accessible place, all records concerning their determinations that such indexes had been slim-based. This commenter famous that a single compiler of the lists will end in consistent remedy of futures on safety indexes.
The CFMA lifted the ban on the trading of futures on single securities and on narrow-primarily based security indexes and established a framework for the joint regulation of those products by the CFTC and the SEC. The CFTC believes good cause exists for the rules to turn out to be effective on August 21, 2001, so that eligible contract individuals may begin buying and selling the new products as contemplated by the CFMA. The CFMA supplies that principal-to-principal transactions between certain eligible contract members in safety futures merchandise might start on August 21, 2001, or such date that a futures association registered beneath 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 slender-primarily based safety indexes. The SEC proposed these rules on May 17, 2001. The initial comment interval for the foundations expired on June 18, 2001. The comment interval, however, was extended by the CFTC and the SEC till July 11, 2001. After reviewing and contemplating the comments obtained, the SEC is adopting the rules, which give the methods for markets to determine whether a security index is slim-based or broad-based mostly as required by the Exchange Act, as amended by the CFMA.