These guidelines present methods of calculation and steerage for nationwide securities exchanges, designated contract markets, registered DTEFs, and foreign boards of trade in determining whether a security index is slender-primarily based underneath the Exchange Act. Securities Markets Coalition (Coalition),139 raised issues over certain tax implications that these markets consider result from the definition of slender-primarily based security index and the rules as proposed. As well as, 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 out to be broad-based, as a result of the SEC has no jurisdiction over broad-based safety index futures. The SEC additionally received a number of feedback relating to potential prices that might be incurred unless different criteria for the definition of slender-based mostly security index are adopted to accommodate indexes comprised of overseas securities.170 The SEC notes that the Commissions have adopted Rules 41.Thirteen 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 topic to the principles of a overseas board of trade, that index is not going to be thought of a slim-primarily based safety index if it wouldn't be a narrow-primarily based security index if a futures contract on such index were traded on a chosen contract market or registered DTEF. Two commenters raised points regarding the treatment of futures on Exchange Traded Funds.140 The Commissions believe that these issues fall exterior the scope of the present rulemaking and is not going to deal with 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 In the Proposing Release, the SEC estimated that it could take each of the eleven nationwide securities exchanges, including notice-registered national securities exchanges, expected to commerce futures contracts on safety indexes one hour yearly to retain any paperwork made or acquired by it in figuring out whether an index is a narrow-primarily based security index. As to the willpower of which indexes qualify as broad-based and that are handled as slender-based, the tax legal guidelines incorporate by reference the definition of narrow-primarily based safety index in the Exchange Act. 2. Burden Hours National securities exchanges, including notice-registered nationwide securities exchanges, that commerce futures contacts on safety indexes shall be required to comply with the recordkeeping requirements underneath Rule 17a-1. National securities exchanges, including notice-registered national securities exchanges, might 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 easily accessible place. The CFMA requires that the determinations as to market capitalization and dollar value of ADTV, and thus the standing of a securities index as narrow-based mostly or broad-primarily based, be made, while Exchange Act Rule 17a-1 simply requires that such determinations be retained. Accordingly, to adjust to 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 security indexes shall be required to preserve data of any calculations used to determine whether or not an index is slender-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 discover-registered nationwide securities exchange, that trades futures contracts on a narrow-based mostly safety index to keep on file for a interval of no less than five years, the primary two years in an easily accessible place, all information regarding their determinations that such indexes were slender-based. This commenter noted that a single compiler of the lists will lead to consistent remedy of futures on security indexes. The CFMA lifted the ban on the buying and selling of futures on single securities and on slim-based mostly 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 may begin trading the brand new merchandise as contemplated by the CFMA. The CFMA offers that principal-to-principal transactions between certain eligible contract individuals in safety futures products might begin on August 21, 2001, or such date that a futures association registered underneath Section 17 of the CEA meets the requirements 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-based mostly safety indexes. https://gadzooksdesign.com/contents/%eb%b0%94%ec%9d%b4%eb%82%b8%ec%8a%a4-%ea%b1%b0%eb%9e%98%ec%86%8c-%ec%86%8c%ea%b0%9c/ proposed these rules on May 17, 2001. The preliminary comment interval for the foundations expired on June 18, 2001. The comment interval, however, was extended by the CFTC and the SEC until July 11, 2001. After reviewing and contemplating the feedback acquired, the SEC is adopting the principles, which offer the strategies for markets to determine whether a safety index is slender-based mostly or broad-based mostly as required by the Exchange Act, as amended by the CFMA.
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