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These rules provide strategies of calculation and steerage for nationwide securities exchanges, designated contract markets, registered DTEFs, and overseas boards of commerce in figuring out whether a security index is slender-primarily based under the Exchange Act. Securities Markets Coalition ("Coalition"),139 raised concerns over certain tax implications that these markets believe consequence from the definition of slender-based mostly safety index and the principles as proposed. In addition, the SEC believes that it isn't empowered to adopt the equal of CEA Rule 41.14 underneath the Exchange Act, which supplies relief for futures on indexes that turn into broad-based, as a result of the SEC has no jurisdiction over broad-based security index futures. The SEC also obtained several feedback concerning potential costs that might be incurred until completely different standards for the definition of slender-primarily based safety 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 safety index is traded on or subject to the foundations of a foreign board of trade, that index will not be considered a slender-based mostly security index if it wouldn't be a slim-based 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 remedy of futures on Exchange Traded Funds.140 The Commissions imagine that these points fall outside the scope of the present rulemaking and won't address them in 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 every of the 11 nationwide securities exchanges, together with discover-registered nationwide securities exchanges, anticipated to commerce futures contracts on security indexes one hour annually to retain any documents made or acquired by it in determining whether or not an index is a slim-primarily based safety index. As to  https://Bitcoinxxo.com  of which indexes qualify as broad-based mostly and which are handled as slim-based mostly, the tax laws incorporate by reference the definition of slim-primarily based safety index within the Exchange Act. 2. Burden Hours National securities exchanges, together with discover-registered nationwide securities exchanges, that commerce futures contacts on security indexes will probably be required to adjust to the recordkeeping necessities underneath Rule 17a-1. National securities exchanges, together with discover-registered national securities exchanges, can be required to retain and store any paperwork related to determinations made using the definitions in Exchange Act Rule 3a55-1 for a minimum of five years, the first 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 slender-based mostly or broad-based, be made, while 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 discover-registered national securities exchange, that lists or trades futures contracts on narrow-based mostly security indexes will probably be required to preserve information of any calculations used to find out whether or not an index is narrow-based mostly.158 B. Total Annual Reporting and Recordkeeping Burden 1. Capital Costs Rule 17a-1 underneath the Exchange Act requires a national securities exchange, including any discover-registered national securities exchange, that trades futures contracts on a slender-based security index to carry on file for a interval of no less than 5 years, the primary two years in an easily accessible place, all data concerning their determinations that such indexes were narrow-primarily based. This commenter noted that a single compiler of the lists will end in consistent remedy of futures on safety indexes.

The CFMA lifted the ban on the buying and selling of futures on single securities and on narrow-based safety indexes and established a framework for the joint regulation of these merchandise by the CFTC and the SEC. The CFTC believes good trigger exists for the principles to become effective on August 21, 2001, so that eligible contract contributors might begin trading the brand new merchandise as contemplated by the CFMA. The CFMA provides that principal-to-principal transactions between certain eligible contract participants in security futures products might commence on August 21, 2001, or such date that a futures affiliation 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 slim-based mostly safety indexes. The SEC proposed these rules on May 17, 2001. The initial comment period for the principles expired on June 18, 2001. The remark interval, nonetheless, was prolonged by the CFTC and the SEC until July 11, 2001. After reviewing and contemplating the feedback received, the SEC is adopting the foundations, which provide the strategies 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.