These guidelines provide strategies of calculation and steering for nationwide securities exchanges, designated contract markets, registered DTEFs, and foreign boards of commerce in figuring out whether a safety index is narrow-primarily based below the Exchange Act. Securities Markets Coalition ("Coalition"),139 raised considerations over sure tax implications that these markets believe outcome from the definition of narrow-based mostly safety index and the foundations as proposed. As well as, the SEC believes that it's not empowered to adopt the equivalent of CEA Rule 41.14 underneath the Exchange Act, which supplies relief for futures on indexes that become broad-based mostly, because the SEC has no jurisdiction over broad-based mostly safety index futures. The SEC also obtained several feedback regarding potential prices that is perhaps incurred until different criteria for the definition of narrow-based security index are adopted to accommodate indexes comprised of international securities.170 The SEC notes that the Commissions have adopted Rules 41.13 under 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 subject to the rules of a foreign board of commerce, that index will not be thought of a slender-based security index if it would not be a narrow-primarily based 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 remedy of futures on Exchange Traded Funds.140 The Commissions imagine that these issues fall exterior the scope of the present rulemaking and is not going to 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 will take each of the 11 nationwide securities exchanges, together with discover-registered national 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 an index is a slim-based mostly safety 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-based safety index in the Exchange Act. 2. Burden Hours National securities exchanges, together with notice-registered national securities exchanges, that commerce futures contacts on security indexes will be required to adjust to the recordkeeping necessities beneath Rule 17a-1. https://Bitcoinxxo.com , including notice-registered nationwide securities exchanges, can be required to retain and store any documents related to determinations made using the definitions in Exchange Act Rule 3a55-1 for no less than five years, the first two years in an simply accessible place.
The CFMA requires that the determinations as to market capitalization and dollar value of ADTV, and thus the status of a securities index as narrow-based or broad-primarily 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 slim-based mostly safety indexes will probably be required to preserve data of any calculations used to find out whether or not an index is narrow-primarily based.158 B. Total Annual Reporting and Recordkeeping Burden 1. Capital Costs Rule 17a-1 beneath the Exchange Act requires a national securities exchange, together with any discover-registered national securities exchange, that trades futures contracts on a slender-primarily based safety index to carry on file for a interval of no lower than 5 years, the primary two years in an easily accessible place, all information regarding their determinations that such indexes had been slender-based. This commenter noted that a single compiler of the lists will result in constant therapy of futures on safety indexes.
The CFMA lifted the ban on the buying and selling 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. The CFTC believes good trigger exists for the foundations to grow to be efficient on August 21, 2001, in order that eligible contract individuals may begin trading the brand new merchandise as contemplated by the CFMA. The CFMA offers that principal-to-principal transactions between certain eligible contract contributors in safety futures merchandise could begin on August 21, 2001, or such date that a futures affiliation registered beneath Section 17 of the CEA meets the necessities in Section 15A(ok)(2) of the Exchange Act.143 The CFMA lifted the ban on, and permits the trading of, futures contracts on single securities and on slim-based safety indexes. The SEC proposed these rules on May 17, 2001. The initial remark interval for the foundations expired on June 18, 2001. The remark interval, however, was prolonged by the CFTC and the SEC till July 11, 2001. After reviewing and considering the feedback obtained, the SEC is adopting the foundations, which give the strategies for markets to find out whether or not a security index is narrow-primarily based or broad-based as required by the Exchange Act, as amended by the CFMA.