cfr_sections
Data license: Public Domain (U.S. Government data) · Data source: Federal Register API & Regulations.gov API
28 rows where agency = "CFTC" and part_number = 41 sorted by section_id
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| section_id ▼ | title_number | title_name | chapter | subchapter | part_number | part_name | subpart | subpart_name | section_number | section_heading | agency | authority | source_citation | amendment_citations | full_text |
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| 17:17:2.0.1.1.1.1.1.1 | 17 | Commodity and Securities Exchanges | I | 41 | PART 41—SECURITY FUTURES PRODUCTS | A | Subpart A—General Provisions | § 41.1 Definitions. | CFTC | [66 FR 44511, Aug. 23, 2001, as amended at 66 FR 44965, Aug. 27, 2001; 67 FR 36761, May 24, 2002; 77 FR 66344, Nov. 2, 2012] | For purposes of this part: (a) Alternative trading system shall have the meaning set forth in section 1a(1) of the Act. (b) Board of trade shall have the meaning set forth in section 1a(2) of the Act. (c) Broad-based security index means a group or index of securities that does not constitute a narrow-based security index. (d) Foreign board of trade means a board of trade located outside of the United States, its territories or possessions, whether incorporated or unincorporated, where foreign futures or foreign options are entered into. (e) Narrow-based security index has the same meaning as in section 1a(35) of the Commodity Exchange Act. (f) National securities association means a board of trade registered with the Securities and Exchange Commission pursuant to section 15A(a) of the Securities Exchange Act of 1934. (g) National securities exchange means a board of trade registered with the Securities and Exchange Commission pursuant to section 6(a) of the Securities Exchange Act of 1934. (h) Rule shall have the meaning set forth in Commission regulation 40.1. (i) Security futures product shall have the meaning set forth in section 1a(32) of the Act. (j) Opening price means the price at which a security opened for trading, or a price that fairly reflects the price at which a security opened for trading, during the regular trading session of the national securities exchange or national securities association that lists the security. If the security is not listed on a national securities exchange or a national securities association, then opening price shall mean the price at which a security opened for trading, or a price that fairly reflects the price at which a security opened for trading, on the primary market for the security. (k) Regular trading session of a security means the normal hours for business of a national securities exchange or national securities association that lists the security. (l) Regulatory halt means a delay, halt, or suspension in the trading of a security, tha… | ||||
| 17:17:2.0.1.1.1.1.1.2 | 17 | Commodity and Securities Exchanges | I | 41 | PART 41—SECURITY FUTURES PRODUCTS | A | Subpart A—General Provisions | § 41.2 Required records. | CFTC | [77 FR 66344, Nov. 2, 2012] | A designated contract market that trades a security index or security futures product shall maintain in accordance with the requirements of § 1.31 of this chapter books and records of all activities related to the trading of such products, including: Records related to any determination under subpart B of this part whether or not a futures contract on a security index is a narrow-based security index or a broad-based security index. | ||||
| 17:17:2.0.1.1.1.1.1.3 | 17 | Commodity and Securities Exchanges | I | 41 | PART 41—SECURITY FUTURES PRODUCTS | A | Subpart A—General Provisions | § 41.3 Application for an exemptive order pursuant to section 4f(a)(4)(B) of the Act. | CFTC | [66 FR 43086, Aug. 17, 2001. Redesignated at 67 FR 53171, Aug. 14, 2002, as amended at 67 FR 62352, Oct. 7, 2002; 78 FR 22419, Apr. 16, 2013; 89 FR 71812, Sept. 4, 2024] | (a) Any futures commission merchant or introducing broker registered in accordance with the notice registration provisions of § 3.10 of this chapter, or any broker or dealer exempt from floor broker or floor trader registration pursuant to section 4f(a)(3) of the Act, may apply to the Commission for an order pursuant to section 4f(a)(4)(B) of the Act granting exemption to such person from any provision of the Act or the Commission's regulations other than sections 4c(b), 4c(d), 4c(e), 4c(g), 4d, 4e, 4h, 4f(b), 4f(c), 4j, 4k(1), 4p, 6d, 8(d), 8(g), and 16 of the Act and the rules thereunder. (b) An application pursuant to this section must set forth in writing or in an electronic mail message the following information: (1) The name, main business address and main business telephone number of the person applying for an order; (2) The capacity in which the person is registered with the Securities and Exchange Commission and the person's CRD number (if a member of the National Association of Securities Dealers, Inc.) or equivalent self-regulatory organization identification, together with a certification, if true, that the person's registration is not suspended pursuant to an order of the Securities and Exchange Commission; (3) The particular section(s) of the Act and/or provision(s) of the Commission's regulations with respect to which the person seeks exemption; (4) Any provision(s) of the securities laws or rules, or of the rules of a securities self-regulatory organization analogous to the provision(s); (5) A clear explanation of the facts and circumstances under which the person believes that the requested exemptive relief is necessary or appropriate in the public interest; and (6) A clear explanation of the extent to which the requested exemptive relief is consistent with the protection of investors. (c) A national securities exchange or other securities industry self-regulatory organization may submit an application for an order pursuant to this section on behalf of its members. (d) An application for… | ||||
| 17:17:2.0.1.1.1.1.1.4 | 17 | Commodity and Securities Exchanges | I | 41 | PART 41—SECURITY FUTURES PRODUCTS | A | Subpart A—General Provisions | §§ 41.4-41.9 [Reserved] | CFTC | ||||||
| 17:17:2.0.1.1.1.2.1.1 | 17 | Commodity and Securities Exchanges | I | 41 | PART 41—SECURITY FUTURES PRODUCTS | B | Subpart B—Narrow-Based Security Indexes | § 41.11 Method for determining market capitalization and dollar value of average daily trading volume; application of the definition of narrow-based security index. | CFTC | [66 FR 44511, Aug. 23, 2001, as amended at 70 FR 43750, July 29, 2005; 77 FR 66344, Nov. 2, 2012] | (a) Market capitalization. For purposes of section 1a(35)(B) of the Act (7 U.S.C. 1a(35)(B)): (1) On a particular day, a security shall be 1 of 750 securities with the largest market capitalization as of the preceding 6 full calendar months when it is included on a list of such securities designated by the Commission and the SEC as applicable for that day. (2) In the event that the Commission and the SEC have not designated a list under paragraph (a)(1) of this section: (i) The method to be used to determine market capitalization of a security as of the preceding 6 full calendar months is to sum the values of the market capitalization of such security for each U.S. trading day of the preceding 6 full calendar months, and to divide this sum by the total number of such trading days. (ii) The 750 securities with the largest market capitalization shall be identified from the universe of all NMS securities as defined in § 242.600 that are common stock or depositary shares. (b) Dollar value of ADTV. (1) For purposes of section 1a(35)(A) and (B) of the Act (7 U.S.C. 1a(35)(A) and (B)): (i)(A) The method to be used to determine the dollar value of ADTV of a security is to sum the dollar value of ADTV of all reported transactions in such security in each jurisdiction as calculated pursuant to paragraphs (b)(1)(ii) and (iii) of this section. (B) The dollar value of ADTV of a security shall include the value of all reported transactions for such security and for any depositary share that represents such security. (C) The dollar value of ADTV of a depositary share shall include the value of all reported transactions for such depositary share and for the security that is represented by such depositary share. (ii) For trading in a security in the United States, the method to be used to determine the dollar value of ADTV as of the preceding 6 full calendar months is to sum the value of all reported transactions in such security for each U.S. trading day during the preceding 6 full calendar months, and to divide thi… | ||||
| 17:17:2.0.1.1.1.2.1.2 | 17 | Commodity and Securities Exchanges | I | 41 | PART 41—SECURITY FUTURES PRODUCTS | B | Subpart B—Narrow-Based Security Indexes | § 41.12 Indexes underlying futures contracts trading for fewer than 30 days. | CFTC | [66 FR 44511, Aug. 23, 2001, as amended at 77 FR 66344, Nov. 2, 2012] | (a) An index on which a contract of sale for future delivery is trading on a designated contract market or foreign board of trade is not a narrow-based security index under section 1a(35) of the Act (7 U.S.C. 1a(35)) for the first 30 days of trading, if: (1) Such index would not have been a narrow-based security index on each trading day of the preceding 6 full calendar months with respect to a date no earlier than 30 days prior to the commencement of trading of such contract; (2) On each trading day of the preceding 6 full calendar months with respect to a date no earlier than 30 days prior to the commencement of trading such contract: (i) Such index had more than 9 component securities; (ii) No component security in such index comprised more than 30 percent of the index's weighting; (iii) The 5 highest weighted component securities in such index did not comprise, in the aggregate, more than 60 percent of the index's weighting; and (iv) The dollar value of the trading volume of the lowest weighted 25% of such index was not less than $50 million (or in the case of an index with 15 or more component securities, $30 million); or (3) On each trading day of the 6 full calendar months preceding a date no earlier than 30 days prior to the commencement of trading such contract: (i) Such index had at least 9 component securities; (ii) No component security in such index comprised more than 30 percent of the index's weighting; and (iii) Each component security in such index was: (A) Registered pursuant to Section 12 of the Securities Exchange Act of 1934 (15 U.S.C. 78) or was a depositary share representing a security registered pursuant to Section 12 of the Securities Exchange Act of 1934; (B) 1 of 750 securities with the largest market capitalization that day; and (C) 1 of 675 securities with the largest dollar value of trading volume that day. (b) An index that is not a narrow-based security index for the first 30 days of trading pursuant to paragraph (a) of this section, shall become a narrow-based secur… | ||||
| 17:17:2.0.1.1.1.2.1.3 | 17 | Commodity and Securities Exchanges | I | 41 | PART 41—SECURITY FUTURES PRODUCTS | B | Subpart B—Narrow-Based Security Indexes | § 41.13 Futures contracts on security indexes trading on or subject to the rules of a foreign board of trade. | CFTC | [77 FR 66344, Nov. 2, 2012] | When a contract of sale for future delivery on a security index is traded on or subject to the rules of a foreign board of trade, such index shall not be a narrow-based security index if it would not be a narrow-based security index if a futures contract on such index were traded on a designated contract market. | ||||
| 17:17:2.0.1.1.1.2.1.4 | 17 | Commodity and Securities Exchanges | I | 41 | PART 41—SECURITY FUTURES PRODUCTS | B | Subpart B—Narrow-Based Security Indexes | § 41.14 Transition period for indexes that cease being narrow-based security indexes. | CFTC | (a) Forty-five day tolerance provision. An index that is a narrow-based security index that becomes a broad-based security index for no more than 45 business days over 3 consecutive calendar months shall be a narrow-based security index. (b) Transition period for indexes that cease being narrow-based security indexes for more than forty-five days. An index that is a narrow-based security index that becomes a broad-based security index for more than 45 business days over 3 consecutive calendar months shall continue to be a narrow-based security index for the following 3 calendar months. (c) Trading in months with open interest following transition period. After the transition period provided for in paragraph (b) of this section ends, a national securities exchange may continue to trade only in those months in the security futures product that had open interest on the date the transition period ended. (d) Definition of calendar month. Calendar month means, with respect to a particular day, the period of time beginning on a calendar date and ending during another month on a day prior to such date. | |||||
| 17:17:2.0.1.1.1.2.1.5 | 17 | Commodity and Securities Exchanges | I | 41 | PART 41—SECURITY FUTURES PRODUCTS | B | Subpart B—Narrow-Based Security Indexes | § 41.15 Exclusion from definition of narrow-based security index for indexes composed of debt securities. | CFTC | [71 FR 39541, July 13, 2006] | (a) An index is not a narrow-based security index if: (1)(i) Each of the securities of an issuer included in the index is a security, as defined in section 2(a)(1) of the Securities Act of 1933 and section 3 (a)(10) of the Securities Exchange Act of 1934 and the respective rules promulgated thereunder, that is a note, bond, debenture, or evidence of indebtedness; (ii) None of the securities of an issuer included in the index is an equity security, as defined in section 3(a)(11) of the Securities Exchange Act of 1934 and the rules promulgated thereunder; (iii) The index is comprised of more than nine securities that are issued by more than nine non-affiliated issuers; (iv) The securities of any issuer included in the index do not comprise more than 30 percent of the index's weighting; (v) The securities of any five non-affiliated issuers included in the index do not comprise more than 60 percent of the index's weighting; (vi) Except as provided in paragraph (a)(1)(viii) of this section, for each security of an issuer included in the index one of the following criteria is satisfied: (A) The issuer of the security is required to file reports pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934; (B) The issuer of the security has a worldwide market value of its outstanding common equity held by non-affiliates of $700 million or more; (C) The issuer of the security has outstanding securities that are notes, bonds, debentures, or evidences of indebtedness having a total remaining principal amount of at least $1 billion; (D) The security is an exempted security as defined in section 3(a)(12) of the Securities Exchange Act of 1934 and the rules promulgated thereunder; or (E) The issuer of the security is a government of a foreign country or a political subdivision of a foreign country; and (vii) Except as provided in paragraph (a)(1)(viii) of this section, for each security of an issuer included in the index one of the following criteria is satisfied: (A) The security has a total re… | ||||
| 17:17:2.0.1.1.1.3.1.1 | 17 | Commodity and Securities Exchanges | I | 41 | PART 41—SECURITY FUTURES PRODUCTS | C | Subpart C—Requirements and Standards for Listing Security Futures Products | § 41.21 Requirements for underlying securities. | CFTC | [66 FR 55083, Nov. 1, 2001, as amended at 71 FR 39542, July 13, 2006; 77 FR 66344, Nov. 2, 2012] | (a) Security futures products based on a single security. A futures contract on a single security is eligible to be traded as a security futures product only if: (1) The underlying security is registered pursuant to section 12 of the Securities Exchange Act of 1934; (2) The underlying security is: (i) Common stock, (ii) Such other equity security as the Commission and the SEC jointly deem appropriate, or (iii) A note, bond, debenture, or evidence of indebtedness; and (3) The underlying security conforms with the listing standards for the security futures product that the designated contract market has filed with the SEC under section 19(b) of the Securities Exchange Act of 1934. (b) Security futures product based on two or more securities. A futures contract on an index of two or more securities is eligible to be traded as a security futures product only if: (1) The index is a narrow-based security index as defined in section 1a(35) of the Act; (2) The securities in the index are registered pursuant to section 12 of the Securities Exchange Act of 1934; (3) The securities in the index are: (i) Common stock, (ii) Such other equity securities as the Commission and the SEC jointly deem appropriate, or (iii) A note, bond, debenture, or evidence of indebtedness; and (4) The index conforms with the listing standards for the security futures product that the designated contract market has filed with the SEC under section 19(b) of the Securities Exchange Act of 1934. | ||||
| 17:17:2.0.1.1.1.3.1.2 | 17 | Commodity and Securities Exchanges | I | 41 | PART 41—SECURITY FUTURES PRODUCTS | C | Subpart C—Requirements and Standards for Listing Security Futures Products | § 41.22 Required certifications. | CFTC | [66 FR 44511, Aug. 23, 2001, as amended at 77 FR 66344, Nov. 2, 2012] | It shall be unlawful for a designated contract market to list for trading or execution a security futures product unless the designated contract market has provided the Commission with a certification that the specific security futures product or products and the designated contract market meet, as applicable, the following criteria: (a) The underlying security or securities satisfy the requirements of § 41.21; (b) If the security futures product is not cash settled, arrangements are in place with a clearing agency registered pursuant to section 17A of the Securities Exchange Act of 1934 for the payment and delivery of the securities underlying the security futures product; (c) Common clearing. [Reserved] (d) Only futures commission merchants, introducing brokers, commodity trading advisors, commodity pool operators or associated persons subject to suitability rules comparable to those of a national securities association registered pursuant to section 15A(a) of the Securities Exchange Act of 1934 and the rules and regulations thereunder, except to the extent otherwise permitted under the Securities Exchange Act of 1934 and the rules and regulations thereunder, may solicit, accept any order for, or otherwise deal in any transaction in or in connection with security futures products; (e) If the board of trade is a designated contract market pursuant to section 5 of the Act, dual trading in these security futures products is restricted in accordance with § 41.27; (f) Trading in the security futures products is not readily susceptible to manipulation of the price of such security futures product, nor to causing or being used in the manipulation of the price of any underlying security, option on such security, or option on a group or index including such securities, consistent with the conditions for trading of § 41.25; (g) Procedures are in place for coordinated surveillance among the board of trade, any market on which any security underlying a security futures product is traded, and other markets on which a… | ||||
| 17:17:2.0.1.1.1.3.1.3 | 17 | Commodity and Securities Exchanges | I | 41 | PART 41—SECURITY FUTURES PRODUCTS | C | Subpart C—Requirements and Standards for Listing Security Futures Products | § 41.23 Listing of security futures products for trading. | CFTC | [66 FR 55083, Nov. 1, 2001, as amended at 69 FR 67507, Nov. 18, 2004; 74 FR 17394, Apr. 15, 2009; 77 FR 66344, Nov. 2, 2012] | (a) Initial listing of products for trading. To list new security futures products for trading, a designated contract market shall submit to the Commission at its Washington, DC headquarters, either in electronic or hard-copy form, to be received by the Commission no later than the day prior to the initiation of trading, a filing that: (1) Is labeled “Listing of Security Futures Product;” (2) Includes a copy of the product's rules, including its terms and conditions; (3) Includes the certifications required by § 41.22; (4) Includes a certification that the terms and conditions of the contract comply with the additional conditions for trading of § 41.25; (5) If the board of trade is a designated contract market pursuant to section 5 of the Act, it includes a certification that the security futures product complies with the Act and rules thereunder; and (6) Includes a copy of the submission cover sheet in accordance with the instructions in appendix D of part 40. (7) Includes a request for confidential treatment as permitted under the procedures of § 40.8. (b) Voluntary submission of security futures products for Commission approval. A designated contract market may request that the Commission approve any security futures product under the procedures of § 40.5 of this chapter, provided however, that the registered entity shall include the certification required by § 41.22 with its submission under § 40.5 of this chapter. Notice designated contract markets may not request Commission approval of security futures products. | ||||
| 17:17:2.0.1.1.1.3.1.4 | 17 | Commodity and Securities Exchanges | I | 41 | PART 41—SECURITY FUTURES PRODUCTS | C | Subpart C—Requirements and Standards for Listing Security Futures Products | § 41.24 Rule amendments to security futures products. | CFTC | [66 FR 55083, Nov. 1, 2001, as amended at 69 FR 67507, Nov. 18, 2004; 74 FR 17394, Apr. 15, 2009; 77 FR 66344, Nov. 2, 2012] | (a) Self-certification of rules and rule amendments by designated contract markets and registered derivatives clearing organizations. A designated contract market or registered derivatives clearing organization may implement any new rule or rule amendment relating to a security futures product by submitting to the Commission at its Washington, DC headquarters, either in electronic or hard-copy form, to be received by the Commission no later than the day prior to the implementation of the rule or rule amendment, a filing that: (1) Is labeled “Security Futures Product Rule Submission;' (2) Includes a copy of the new rule or rule amendment; (3) Includes a certification that the designated contract market or registered derivatives clearing organization has filed the rule or rule amendment with the Securities and Exchange Commission, if such a filing is required; (4) If the board of trade is a designated contract market pursuant to section 5 of the Act or is a registered derivatives clearing organization pursuant to section 5b of the Act, it includes the documents and certifications required to be filed with the Commission pursuant to § 40.6 of this chapter, including a certification that the security futures product complies with the Act and rules thereunder; and (5) Includes a copy of the submission cover sheet in accordance with the instructions in appendix D of part 40. (6) Includes a request for confidential treatment as permitted under the procedures of § 40.8. (b) Voluntary submission of rules for Commission review and approval. A designated contract market or a registered derivatives clearing organization clearing security futures products may request that the Commission approve any rule or proposed rule or rule amendment relating to a security futures product under the procedures of § 40.5 of this chapter, provided however, that the registered entity shall include the certifications required by § 41.22 with its submission under § 40.5 of this chapter. Notice designated contract markets may not re… | ||||
| 17:17:2.0.1.1.1.3.1.5 | 17 | Commodity and Securities Exchanges | I | 41 | PART 41—SECURITY FUTURES PRODUCTS | C | Subpart C—Requirements and Standards for Listing Security Futures Products | § 41.25 Additional conditions for trading for security futures products. | CFTC | [66 FR 55083, Nov. 1, 2001, as amended at 67 FR 36761, May 24, 2002; 77 FR 66345, Nov. 2, 2012; 84 FR 51021, Sept. 27, 2019] | (a) Definitions. For purposes of this section: Estimated deliverable supply means the quantity of the security underlying a security futures product that reasonably can be expected to be readily available to short traders and salable by long traders at its market value in normal cash marketing channels during the specified delivery period. For guidance on estimating deliverable supply, designated contract markets may refer to appendix A of this subpart. Same side of the market means the aggregate of long positions in physically-delivered security futures products and cash-settled security futures products, in the same security, and, separately, the aggregate of short positions in physically-delivered security futures products and cash-settled security futures products, in the same security. (b) Common provisions —(1) Reporting of data. The designated contract market shall comply with part 16 of this chapter requiring the daily reporting of market data. (2) Regulatory trading halts. The rules of a designated contract market that lists or trades one or more security futures products must include the following provisions: (i) Trading of a security futures product based on a single security shall be halted at all times that a regulatory halt has been instituted for the underlying security; and (ii) Trading of a security futures product based on a narrow-based security index shall be halted at all times that a regulatory halt has been instituted for one or more underlying securities that constitute 50 percent or more of the market capitalization of the narrow-based security index. (3) Speculative position limits. A designated contract market shall have rules in place establishing position limits or position accountability procedures for the expiring futures contract month as specified in this paragraph (b)(3). (i) Limits for equity security futures products. For a security futures product on a single equity security, including a security futures product on an underlying security that represents ow… | ||||
| 17:17:2.0.1.1.1.3.1.6 | 17 | Commodity and Securities Exchanges | I | 41 | PART 41—SECURITY FUTURES PRODUCTS | C | Subpart C—Requirements and Standards for Listing Security Futures Products | § 41.27 Prohibition of dual trading in security futures products by floor brokers. | CFTC | [67 FR 11227, Mar. 13, 2002, as amended at 77 FR 66345, Nov. 2, 2012] | (a) Definitions. For purposes of this section: (1) Trading session means hours during which a designated contract market is scheduled to trade continuously during a trading day, as set forth in its rules, including any related post settlement trading session. A designated contract market may have more than one trading session during a trading day. (2) Member shall have the meaning set forth in section 1a(24) of the Act. (3) Broker association includes two or more designated contract market members with floor trading privileges of whom at least one is acting as a floor broker who: (i) Engage in floor brokerage activity on behalf of the same employer; (ii) Have an employer and employee relationship which relates to floor brokerage activity; (iii) Share profits and losses associated with their brokerage or trading activity; or (iv) Regularly share a deck of orders. (4) Customer means an account owner for which a trade is executed other than: (i) An account in which such floor broker has any interest; (ii) An account for which a floor broker has discretion; (iii) An account controlled by a person with whom a floor broker has a relationship through membership in a broker association; (iv) A house account of the floor broker's clearing member; or (v) An account for another member present on the floor of a designated contract market or an account controlled by such other member. (5) Dual trading means the execution of customer orders by a floor broker through open outcry during the same trading session in which the floor broker executes directly or by initiating and passing to another member, either through open outcry or through a trading system that electronically matches bids and offers pursuant to a predetermined algorithm, a transaction for the same security futures product on the same designated contract market for an account described in paragraphs (a)(4)(i) through (v) of this section. (b) Dual trading prohibition. (1) No floor broker shall engage in dual trading in a security futures product … | ||||
| 17:17:2.0.1.1.1.4.1.1 | 17 | Commodity and Securities Exchanges | I | 41 | PART 41—SECURITY FUTURES PRODUCTS | D | Subpart D—Notice-Designated Contract Markets in Security Futures Products | § 41.31 Notice-designation requirements. | CFTC | (a) Any board of trade that is a national securities exchange, a national securities association, or an alternative trading system, and that seeks to operate as a designated contract market in security futures products under section 5f of the Act, shall so notify the Commission. Such notification shall be filed with the Secretary of the Commission at its Washington, D.C. headquarters, in either electronic or hard copy form, shall be labeled as “Notice of Designation as a Contract Market in Security Futures Products,” and shall include: (1) The name and address of the board of trade; (2) The name and telephone number of a contact person designated to receive communications from the Commission on behalf of the board of trade; (3) A description of the security futures products that the board of trade intends to make available for trading, including an identification of all facilities that would clear transactions in security futures products on behalf of the board of trade; (4) A copy of the current rules of the board of trade; and (5) A certification that the board of trade— (i) Will not list or trade any contracts of sale for future delivery, except for security futures products; (ii) Is registered with the Securities and Exchange Commission as a national securities exchange, national securities association, or alternative trading system, and such registration is not suspended pursuant to an order by the Securities and Exchange Commission; (iii) Will meet the criteria specified in subclauses (I) through (XI) of section 2(a)(1)(D)(i) of the Act, except as otherwise provided in section 2(a)(1)(D)(vi) of the Act, for each specific security futures product that the board of trade intends to make available for trading; (iv) Will comply with the conditions for designation under this section and section 5f of the Act, including a specific representation by any alternative trading system that it is a member of a futures association registered under section 17 of the Act; and (v) Will comply with the continuing o… | |||||
| 17:17:2.0.1.1.1.4.1.2 | 17 | Commodity and Securities Exchanges | I | 41 | PART 41—SECURITY FUTURES PRODUCTS | D | Subpart D—Notice-Designated Contract Markets in Security Futures Products | § 41.32 Continuing obligations. | CFTC | (a)(1) A board of trade designated as a contract market in security futures products pursuant to § 41.31 of this chapter shall: (i) Notify the Commission of any change in its regulatory status with the Securities and Exchange Commission or with a futures association registered under section 17 of the Act; (ii) Comply with the filing requirements of section 2(a)(1)(D)(vii) of the Act each time the board of trade lists a security futures product for trading; (iii) Provide the Commission with any new rules or rule amendments that relate to the trading of security futures products, including both operational rules and the terms and conditions of products listed for trading on the facility, promptly after final implementation of such rules or rule amendments; and (iv) Upon request, file promptly with the Commission— (A) Such information related to its business as a designated contract market in security futures products as the Commission may request; and (B) A written demonstration, containing such supporting data and other information and documents as the Commission may specify, that the board of trade is in compliance with one or more applicable provisions of the Act or regulations thereunder as specified in the request. (2) Any information filed pursuant to paragraph (a) of this section shall be addressed to the Secretary of the Commission at its Washington, D.C. headquarters, shall be labeled “SFPCM Continuing Obligations,” and may be transmitted in either electronic or hard copy form. (b) Except as exempted under section 5f(b) of the Act or under §§ 41.33 and 41.34 of this chapter, any board of trade designated as a contract market in security futures products pursuant to § 41.31 of this chapter shall be subject to all applicable requirements of the Act and regulations thereunder. Failure to comply shall subject the board of trade to Commission action under, among other provisions, sections 5e and 6(b) of the Act. | |||||
| 17:17:2.0.1.1.1.4.1.3 | 17 | Commodity and Securities Exchanges | I | 41 | PART 41—SECURITY FUTURES PRODUCTS | D | Subpart D—Notice-Designated Contract Markets in Security Futures Products | § 41.33 Applications for exemptive orders. | CFTC | [66 FR 44511, Aug. 23, 2001, as amended at 67 FR 62352, Oct. 7, 2002] | (a) Any board of trade designated as a contract market in security futures products pursuant to § 41.31 of this chapter may apply to the Commission for an exemption from any provision of the Act or regulations thereunder. Except as provided in sections 5f(b)(1) and 5f(b)(2) of the Act, the Commission shall have sole discretion to exempt a board of trade, conditionally or unconditionally, from any provision of the Act or regulations thereunder pursuant to this section. The Commission may issue such an exemptive order in response to an application only to the extent it finds, after review, that the issuance of an exemptive order is necessary or appropriate in the public interest and is consistent with the protection of investors. (b) Each application for exemptive relief must comply with the requirements of this section. The Commission may, in its sole discretion, decline to entertain any application for an exemptive order under this section without explanation; provided, however, that the Commission shall notify the board of trade of such a decision in writing. (c) Application requirements. (1) Each application for an exemptive order made pursuant to this section must include: (i) The name and address of the board of trade requesting relief, and the name and telephone number of a person whom Commission staff may contact to obtain additional information regarding the request; (ii) A certification that the registration of the board of trade is not suspended pursuant to an order of the Securities and Exchange Commission; (iii) The provision(s) of the Act or regulations thereunder from which the board of trade seeks relief and, if applicable, whether the board of trade is otherwise subject to similar provisions as a result of Securities and Exchange Commission jurisdiction; and (iv) The type of relief requested and the order sought; an explanation of the need for relief, including all material facts and circumstances giving rise to the request; and the extent to which such relief is necessary or appropriate … | ||||
| 17:17:2.0.1.1.1.4.1.4 | 17 | Commodity and Securities Exchanges | I | 41 | PART 41—SECURITY FUTURES PRODUCTS | D | Subpart D—Notice-Designated Contract Markets in Security Futures Products | § 41.34 Exempt Provisions. | CFTC | [67 FR 11229, Mar. 13, 2002] | Any board of trade notice-designated as a contract market in security futures products pursuant to § 41.31 also shall be exempt from: (a) The following provisions of the Act, pursuant to section 5f(b)(1) of the Act: (1) Section 4(c)(c); (2) Section 4(c)(e); (3) Section 4(c)(g); (4) Section 4j; (5) Section 5; (6) Section 5c; (7) Section 6a; (8) Section 8(d); (9) Section 9(f); (10) Section 16 and; (b) The following provisions, pursuant to section 5f(b)(4) of the Act: (1) Section 6(a); (2) Part 38 of this chapter; (3) Part 40 of this chapter; and (4) Section 41.27. | ||||
| 17:17:2.0.1.1.1.5.1.1 | 17 | Commodity and Securities Exchanges | I | 41 | PART 41—SECURITY FUTURES PRODUCTS | E | Subpart E—Customer Accounts and Margin Requirements | § 41.41 Security futures products accounts. | CFTC | [67 FR 58297, Sept. 13, 2002, as amended at 83 FR 7997, Feb. 23, 2018; 86 FR 19421, Apr. 13, 2021] | (a) Where security futures products may be held. (1) A person registered with the Commission as a futures commission merchant pursuant to section 4f(a)(1) of the Commodity Exchange Act (“CEA”) and registered with the Securities and Exchange Commission (“SEC”) as a broker or dealer pursuant to section 15(b)(1) of the Securities Exchange Act of 1934 (“Securities Exchange Act”) (“Full FCM/Full BD”) may hold all of a customer's security futures products in a futures account, all of a customer's security futures products in a securities account, or some of a customer's security futures products in a futures account and other security futures products of the same customer in a securities account. A person registered with the Commission as a futures commission merchant pursuant to section 4f(a)(2) of the CEA (a notice-registered FCM) may hold a customer's security futures products only in a securities account. A person registered with the SEC as a broker or dealer pursuant to section 15(b)(11) of the Securities Exchange Act (a notice-registered broker-dealer) may hold a customer's security futures products only in a futures account. (2) A Full FCM/Full BD shall establish written policies or procedures for determining whether customer security futures products will be placed in a futures account and/or a securities account and, if applicable, the process by which a customer may elect the type or types of account in which security futures products will be held (including the procedure to be followed if a customer fails to make an election of account type). (b) Disclosure requirements. (1) Except as provided in paragraph (b)(2), before a futures commission merchant accepts the first order for a security futures product from or on behalf of a customer, the firm shall furnish the customer with a disclosure document containing the following information: (i) A description of the protections provided by the requirements set forth under section 4d of the CEA applicable to a futures account; (ii) A description of the prot… | ||||
| 17:17:2.0.1.1.1.5.1.2 | 17 | Commodity and Securities Exchanges | I | 41 | PART 41—SECURITY FUTURES PRODUCTS | E | Subpart E—Customer Accounts and Margin Requirements | § 41.42 Customer margin requirements for security futures—authority, purpose, interpretation, and scope. | CFTC | (a) Authority and purpose. Subpart E, §§ 41.42 through 41.49, and 17 CFR 242.400 through 242.406 (“this Regulation”) are issued by the Commodity Futures Trading Commission (“Commission”) jointly with the Securities and Exchange Commission (“SEC”), pursuant to authority delegated by the Board of Governors of the Federal Reserve System under section 7(c)(2)(A) of the Securities Exchange Act of 1934 (“Exchange Act”). The principal purpose of this Regulation (Subpart E, §§ 41.42 through 41.49) is to regulate customer margin collected by brokers, dealers, and members of national securities exchanges, including futures commission merchants required to register as brokers or dealers under section 15(b)(11) of the Exchange Act, relating to security futures. (b) Interpretation. This Regulation (Subpart E, §§ 41.42 through 41.49) shall be jointly interpreted by the SEC and the Commission, consistent with the criteria set forth in clauses (i) through (iv) of section 7(c)(2)(B) of the Exchange Act and the provisions of Regulation T (12 CFR part 220). (c) Scope. (1) This Regulation (Subpart E, §§ 41.42 through 41.49) does not preclude a self-regulatory authority, under rules that are effective in accordance with section 19(b)(2) of the Exchange Act or section 19(b)(7) of the Exchange Act and, as applicable, section 5c(c) of the Commodity Exchange Act (“Act”), or a security futures intermediary from imposing additional margin requirements on security futures, including higher initial or maintenance margin levels, consistent with this Regulation (Subpart E, §§ 41.42 through 41.49), or from taking appropriate action to preserve its financial integrity. (2) This Regulation (Subpart E, §§ 41.42 through 41.49) does not apply to: (i) Financial relations between a customer and a security futures intermediary to the extent that they comply with a portfolio margining system under rules that meet the criteria set forth in section 7(c)(2)(B) of the Exchange Act and that are effective in accordance with section 19(b)(2) of the E… | |||||
| 17:17:2.0.1.1.1.5.1.3 | 17 | Commodity and Securities Exchanges | I | 41 | PART 41—SECURITY FUTURES PRODUCTS | E | Subpart E—Customer Accounts and Margin Requirements | § 41.43 Definitions. | CFTC | [67 FR 53171, Aug. 14, 2002, as amended at 77 FR 66346, Nov. 2, 2012; 83 FR 7997, Feb. 23, 2018] | (a) For purposes of this Regulation (Subpart E, §§ 41.42 through 41.49) only, the following terms shall have the meanings set forth in this section. (1) Applicable margin rules and margin rules applicable to an account mean the rules and regulations applicable to financial relations between a security futures intermediary and a customer with respect to security futures and related positions carried in a securities account or futures account as provided in § 41.44(a) of this subpart. (2) Broker shall have the meaning provided in section 3(a)(4) of the Exchange Act. (3) Contract multiplier means the number of units of a narrow-based security index expressed as a dollar amount, in accordance with the terms of the security future contract. (4) Current market value means, on any day: (i) With respect to a security future: (A) If the instrument underlying such security future is a stock, the product of the daily settlement price of such security future as shown by any regularly published reporting or quotation service, and the applicable number of shares per contract; or (B) If the instrument underlying such security future is a narrow-based security index, as defined in section 1a(35)(A) of the Act, the product of the daily settlement price of such security future as shown by any regularly published reporting or quotation service, and the applicable contract multiplier. (ii) With respect to a security other than a security future, the most recent closing sale price of the security, as shown by any regularly published reporting or quotation service. If there is no recent closing sale price, the security futures intermediary may use any reasonable estimate of the market value of the security as of the most recent close of business. (5) Customer excludes an exempted person and includes: (i) Any person or persons acting jointly: (A) On whose behalf a security futures intermediary effects a security futures transaction or carries a security futures position; or (B) Who would be considered a customer… | ||||
| 17:17:2.0.1.1.1.5.1.4 | 17 | Commodity and Securities Exchanges | I | 41 | PART 41—SECURITY FUTURES PRODUCTS | E | Subpart E—Customer Accounts and Margin Requirements | § 41.44 General provisions. | CFTC | (a) Applicable margin rules. Except to the extent inconsistent with this Regulation (Subpart E, §§ 41.42 through 41.49): (1) A security futures intermediary that carries a security future on behalf of a customer in a securities account shall record and conduct all financial relations with respect to such security future and related positions in accordance with Regulation T and the margin rules of the self-regulatory authorities of which the security futures intermediary is a member. (2) A security futures intermediary that carries a security future on behalf of a customer in a futures account shall record and conduct all financial relations with respect to such security future and related positions in accordance with the margin rules of the self-regulatory authorities of which the security futures intermediary is a member. (b) Separation and consolidation of accounts. (1) The requirements for security futures and related positions in one account may not be met by considering items in any other account, except as permitted or required under paragraph (b)(2) of this section or applicable margin rules. If withdrawals of cash, securities or other assets deposited as margin are permitted under this Regulation (Subpart E, §§ 41.42 through 41.49), bookkeeping entries shall be made when such cash, securities, or assets are used for purposes of meeting requirements in another account. (2) Notwithstanding paragraph (b)(1) of this section, the security futures intermediary shall consider all futures accounts in which security futures and related positions are held that are within the same regulatory classification or account type and are owned by the same customer to be a single account for purposes of this Regulation (Subpart E, §§ 41.42 through 41.49). The security futures intermediary may combine such accounts with other futures accounts that are within the same regulatory classification or account type and are owned by the same customer for purposes of computing a customer's overall margin requirement, as permit… | |||||
| 17:17:2.0.1.1.1.5.1.5 | 17 | Commodity and Securities Exchanges | I | 41 | PART 41—SECURITY FUTURES PRODUCTS | E | Subpart E—Customer Accounts and Margin Requirements | § 41.45 Required margin. | CFTC | [67 FR 53171, Aug. 14, 2002, as amended at 85 FR 75146, Nov. 24, 2020] | (a) Applicability. Each security futures intermediary shall determine the required margin for the security futures and related positions held on behalf of a customer in a securities account or futures account as set forth in this section. (b) Required margin —(1) General rule. The required margin for each long or short position in a security future shall be fifteen (15) percent of the current market value of such security future. (2) Offsetting positions. Notwithstanding the margin levels specified in paragraph (b)(1) of this section, a self-regulatory authority may set the required initial or maintenance margin level for an offsetting position involving security futures and related positions at a level lower than the level that would be required under paragraph (b)(1) of this section if such positions were margined separately, pursuant to rules that meet the criteria set forth in section 7(c)(2)(B) of the Exchange Act and are effective in accordance with section 19(b)(2) of the Exchange Act and, as applicable, section 5c(c) of the Act. (c) Procedures for certain margin level adjustments. An exchange registered under section 6(g) of the Exchange Act, or a national securities association registered under section 15A(k) of the Exchange Act, may raise or lower the required margin level for a security future to a level not lower than that specified in this section, in accordance with section 19(b)(7) of the Exchange Act. | ||||
| 17:17:2.0.1.1.1.5.1.6 | 17 | Commodity and Securities Exchanges | I | 41 | PART 41—SECURITY FUTURES PRODUCTS | E | Subpart E—Customer Accounts and Margin Requirements | § 41.46 Type, form and use of margin. | CFTC | (a) When margin is required. Margin is required to be deposited whenever the required margin for security futures and related positions in an account is not satisfied by the equity in the account, subject to adjustment under paragraph (c) of this section. (b) Acceptable margin deposits. (1) The required margin may be satisfied by a deposit of cash, margin securities (subject to paragraph (b)(2) of this section), exempted securities, any other asset permitted under Regulation T to satisfy a margin deficiency in a securities margin account, or any combination thereof, each as valued in accordance with paragraph (c) of this section. (2) Shares of a money market mutual fund may be accepted as a margin deposit for purposes of this Regulation (Subpart E, §§ 41.42 through 41.49), Provided that: (i) The customer waives any right to redeem the shares without the consent of the security futures intermediary and instructs the fund or its transfer agent accordingly; (ii) The security futures intermediary (or clearing agency or derivatives clearing organization with which the shares are deposited as margin) obtains the right to redeem the shares in cash, promptly upon request; and (iii) The fund agrees to satisfy any conditions necessary or appropriate to ensure that the shares may be redeemed in cash, promptly upon request. (c) Adjustments —(1) Futures accounts. For purposes of this section, the equity in a futures account shall be computed in accordance with the margin rules applicable to the account, subject to the following: (i) A security future shall have no value; (ii) Each net long or short position in a listed option on a contract for future delivery shall be valued in accordance with the margin rules applicable to the account; (iii) Except as permitted in paragraph (e) of this section, each margin equity security shall be valued at an amount no greater than its Regulation T collateral value; (iv) Each other security shall be valued at an amount no greater than its current market value reduced by th… | |||||
| 17:17:2.0.1.1.1.5.1.7 | 17 | Commodity and Securities Exchanges | I | 41 | PART 41—SECURITY FUTURES PRODUCTS | E | Subpart E—Customer Accounts and Margin Requirements | § 41.47 Withdrawal of margin. | CFTC | (a) By the customer. Except as otherwise provided in § 41.46(e)(1)(ii) of this subpart, cash, securities, or other assets deposited as margin for positions in an account may be withdrawn, provided that the equity in the account after such withdrawal is sufficient to satisfy the required margin for the security futures and related positions in the account under this Regulation (Subpart E, §§ 41.42 through 41.49). (b) By the security futures intermediary. Notwithstanding paragraph (a) of this section, the security futures intermediary, in its usual practice, may deduct the following items from an account in which security futures or related positions are held if they are considered in computing the balance of such account: (1) Variation settlement payable, directly or indirectly, to a clearing agency that is registered under section 17A of the Exchange Act or a derivatives clearing organization that is registered under section 5b of the Act; (2) Interest charged on credit maintained in the account; (3) Communication or shipping charges with respect to transactions in the account; (4) Payment of commissions, brokerage, taxes, storage and other charges lawfully accruing in connection with the positions and transactions in the account; (5) Any service charges that the security futures intermediary may impose; or (6) Any other withdrawals that are permitted from a securities margin account under Regulation T, to the extent permitted under applicable margin rules. | |||||
| 17:17:2.0.1.1.1.5.1.8 | 17 | Commodity and Securities Exchanges | I | 41 | PART 41—SECURITY FUTURES PRODUCTS | E | Subpart E—Customer Accounts and Margin Requirements | § 41.48 Undermargined accounts. | CFTC | (a) Failure to satisfy margin call. If any margin call required by this Regulation (Subpart E, §§ 41.42 through 41.49) is not met in full, the security futures intermediary shall take the deduction required with respect to an undermargined account in computing its net capital under SEC or Commission rules. (b) Accounts that liquidate to a deficit. If at any time there is a liquidating deficit in an account in which security futures are held, the security futures intermediary shall take steps to liquidate positions in the account promptly and in an orderly manner. (c) Liquidation of undermargined accounts not required. Notwithstanding § 41.44(a)(1) of this subpart, § 220.4(d) of Regulation T (12 CFR 220.4(d)) respecting liquidation of positions in lieu of deposit shall not apply with respect to security futures carried in a securities account. | |||||
| 17:17:2.0.1.1.1.5.1.9 | 17 | Commodity and Securities Exchanges | I | 41 | PART 41—SECURITY FUTURES PRODUCTS | E | Subpart E—Customer Accounts and Margin Requirements | § 41.49 Filing proposed margin rule changes with the Commission. | CFTC | [67 FR 53171, Aug. 14, 2002, as amended at 77 FR 66346, Nov. 2, 2012] | (a) Notification requirement for notice-designated contract markets. Any self-regulatory authority that is registered with the Commission as a designated contract market under section 5f of the Act shall, when filing a proposed rule change regarding customer margin for security futures with the SEC for approval in accordance with section 19(b)(2) of the Exchange Act, concurrently provide to the Commission a copy of such proposed rule change and any accompanying documentation filed with the SEC. (b) Filing requirements under the Act. Any self-regulatory authority that is registered with the Commission as a designated contract market under section 5 of the Act shall, when filing a proposed rule change regarding customer margin for security futures with the SEC for approval in accordance with section 19(b)(2) of the Exchange Act, submit such proposed rule change to the Commission as follows: (1) If the self-regulatory authority elects to request the Commission's prior approval for the proposed rule change pursuant to section 5c(c)(2) of the Act, it shall concurrently file the proposed rule change with the Commission in accordance with § 40.5 of this chapter. (2) If the self-regulatory authority elects to implement a proposed rule change by written certification pursuant to section 5c(c)(1) of the Act, it shall concurrently provide to the Commission a copy of the proposed rule change and any accompanying documentation filed with the SEC. Promptly after obtaining SEC approval for the proposed rule change, such self-regulatory authority shall file its written certification with the Commission in accordance with § 40.6 of this chapter. |
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