These rules present strategies of calculation and steerage for nationwide securities exchanges, designated contract markets, registered DTEFs, and international boards of commerce in determining whether a safety index is slim-based mostly beneath the Exchange Act. Securities Markets Coalition ("Coalition"),139 raised considerations over sure tax implications that these markets believe end result from the definition of slim-based safety index and the principles as proposed. In addition, the SEC believes that it is not empowered to adopt the equivalent of CEA Rule 41.14 underneath the Exchange Act, which supplies relief for futures on indexes that turn into broad-based, because the SEC has no jurisdiction over broad-based safety index futures. The SEC additionally received a number of comments concerning potential prices that may be incurred except completely different standards for the definition of slender-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 beneath the CEA and 3a55-3 underneath the Exchange Act, which establish that when a futures contract on a security index is traded on or subject to the foundations of a international board of commerce, that index is not going to be thought of a narrow-based safety index if it would not be a slender-based mostly safety index if a futures contract on such index were traded on a delegated contract market or registered DTEF.
Two commenters raised points concerning the treatment 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 address them on this context. The present burden hour estimate for Rule 17a-1, as of July 20, 1998, is 50 hours per yr for each exchange.160 Within the Proposing Release, the SEC estimated that it might take each 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 received by it in figuring out whether an index is a narrow-based security index. As to the determination of which indexes qualify as broad-based mostly and that are handled as slender-primarily based, the tax legal guidelines incorporate by reference the definition of slim-based security index within the Exchange Act. 2. Burden Hours National securities exchanges, including discover-registered national securities exchanges, that trade 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 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 simply 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-based mostly or broad-primarily based, be made, whereas Exchange Act Rule 17a-1 merely requires that such determinations be retained. Accordingly, to comply with these recordkeeping requirements, a nationwide securities exchange, together with a notice-registered national securities exchange, that lists or trades futures contracts on narrow-based security indexes shall be required to preserve information of any calculations used to find out whether an index is slender-based mostly.158 B. Total Annual Reporting and Recordkeeping Burden 1. https://www.youtube.com/@Coin_universe -1 below the Exchange Act requires a nationwide securities exchange, including any notice-registered national securities exchange, that trades futures contracts on a slender-based mostly safety index to keep on file for a period of no less than 5 years, the primary two years in an easily accessible place, all data concerning their determinations that such indexes have been slender-based mostly. This commenter famous that a single compiler of the lists will result in constant therapy of futures on security indexes.
The CFMA lifted the ban on the buying and selling of futures on single securities and on slender-based mostly 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 become effective on August 21, 2001, so that eligible contract contributors could start trading the brand new products as contemplated by the CFMA. The CFMA provides that principal-to-principal transactions between certain eligible contract individuals in security futures merchandise might begin on August 21, 2001, or such date that a futures affiliation registered beneath 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 buying and selling of, futures contracts on single securities and on slim-primarily based safety indexes. The SEC proposed these rules on May 17, 2001. The initial comment period for the rules expired on June 18, 2001. The remark period, however, was extended by the CFTC and the SEC until July 11, 2001. After reviewing and contemplating the feedback obtained, the SEC is adopting the principles, which offer the methods for markets to determine whether or not a safety index is slim-based mostly or broad-primarily based as required by the Exchange Act, as amended by the CFMA.