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These rules provide strategies of calculation and steering for national securities exchanges, designated contract markets, registered DTEFs, and overseas boards of commerce in determining whether a security index is slim-based under the Exchange Act. Securities Markets Coalition ("Coalition"),139 raised issues over certain tax implications that these markets imagine outcome from the definition of slender-based mostly safety 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 under the Exchange Act, which offers relief for futures on indexes that become broad-primarily based, because the SEC has no jurisdiction over broad-based mostly safety index futures. The SEC additionally obtained a number of comments concerning potential prices that may be incurred until different standards for the definition of slender-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 topic to the principles of a overseas board of commerce, that index won't be thought of a slim-primarily 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 chosen contract market or registered DTEF.

Two commenters raised points regarding the treatment of futures on Exchange Traded Funds.140 The Commissions imagine that these issues fall exterior the scope of the present rulemaking and won't tackle them on this context. The current burden hour estimate for Rule 17a-1, as of July 20, 1998, is 50 hours per year for each exchange.160 Within the Proposing Release, the SEC estimated that it might take each of the 11 national securities exchanges, including discover-registered nationwide securities exchanges, anticipated to commerce 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 slim-primarily based safety index. As to the dedication of which indexes qualify as broad-primarily based and which are handled as slim-based mostly, the tax laws incorporate by reference the definition of slender-based mostly safety index in the Exchange Act. 2. Burden Hours National securities exchanges, including discover-registered nationwide securities exchanges, that commerce futures contacts on security indexes might be required to adjust to the recordkeeping requirements underneath Rule 17a-1. National securities exchanges, including discover-registered nationwide securities exchanges, will likely be required to retain and store any paperwork related to determinations made utilizing the definitions in Exchange Act Rule 3a55-1 for a minimum of 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, 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 discover-registered nationwide securities exchange, that lists or trades futures contracts on slim-based security indexes will probably be required to preserve data of any calculations used to determine whether or not an index is slim-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, together with any discover-registered nationwide securities exchange, that trades futures contracts on a slim-primarily based safety index to carry on file for a interval of no lower than 5 years, the primary two years in an simply accessible place, all data regarding their determinations that such indexes have been slender-based mostly. This commenter famous that a single compiler of the lists will lead to consistent treatment of futures on safety indexes.

The CFMA lifted the ban on the trading of futures on single securities and on slender-based mostly safety indexes and established a framework for the joint regulation of those products by the CFTC and the SEC.  https://Coin-viewer.com  believes good trigger exists for the rules to become effective on August 21, 2001, in order that eligible contract participants may start trading the brand new products as contemplated by the CFMA. The CFMA offers that principal-to-principal transactions between certain eligible contract individuals in security futures products may start on August 21, 2001, or such date that a futures association registered under 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 narrow-based mostly safety indexes. The SEC proposed these guidelines on May 17, 2001. The initial comment interval for the foundations expired on June 18, 2001. The remark period, nonetheless, was prolonged by the CFTC and the SEC until July 11, 2001. After reviewing and contemplating the comments obtained, the SEC is adopting the principles, which offer the methods for markets to determine whether a safety index is narrow-based mostly or broad-based as required by the Exchange Act, as amended by the CFMA.