7 U.S.C. § 7b–1: Designation of securities…

Summary

If a national securities exchange, a national securities association, or an alternative trading system only lists or trades security futures and is still properly registered (not suspended), it becomes a designated contract market for security futures when it files the written notice the Commission requires. The notice can be filed on paper or electronically and the designation starts when the notice is submitted. A designated market under this rule is excused from eight specific parts of this law. An alternative trading system that gets this designation must join a futures association registered under section 21. That futures association will make rules about subscriber behavior and handle discipline for subscribers. The Commission can also, by rule or order, grant other exemptions for designated markets if needed for the public interest and investor protection, set the procedures for those exemptions, and refuse to consider exemption requests. Naming an alternative trading system a contract market this way does not make it an "exchange" for any purpose.

Title 7, §7b–1

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(a)Any board of trade that is registered with the Securities and Exchange Commission as a national securities exchange, is a national securities association registered pursuant to section 78o–3(a) of title 15, or is an alternative trading system shall be a designated contract market in security futures products if—

(1)such national securities exchange, national securities association, or alternative trading system lists or trades no other contracts of sale for future delivery, except for security futures products;

(2)such national securities exchange, national securities association, or alternative trading system files written notice with the Commission in such form as the Commission, by rule, may prescribe containing such information as the Commission, by rule, may prescribe as necessary or appropriate in the public interest or for the protection of customers; and

(3)the registration of such national securities exchange, national securities association, or alternative trading system is not suspended pursuant to an order by the Securities and Exchange Commission.

Such designation shall be effective contemporaneously with the submission of notice, in written or electronic form, to the Commission.

(b)(1)A national securities exchange, national securities association, or alternative trading system that is designated as a contract market pursuant to this section shall be exempt from the following provisions of this chapter and the rules thereunder:

(A)Subsections (c), (e), and (g) of section 6c of this title.

(B)section 6j of this title.

(C)section 7 of this title.

(D)section 7a–2 of this title.

(E)section 10a of this title.

(F)section 12(d) of this title.

(G)section 13(f) of this title.

(H)section 20 of this title.

(2)An alternative trading system that is a designated contract market under this section shall be required to be a member of a futures association registered under section 21 of this title and shall be exempt from any provision of this chapter that would require such alternative trading system to—

(A)set rules governing the conduct of subscribers other than the conduct of such subscribers’ trading on such alternative trading system; or

(B)discipline subscribers other than by exclusion from trading.

(3)To the extent that an alternative trading system is exempt from any provision of this chapter pursuant to paragraph (2) of this subsection, the futures association registered under section 21 of this title of which the alternative trading system is a member shall set rules governing the conduct of subscribers to the alternative trading system and discipline the subscribers.

(4)(A)Except as provided in subparagraph (B), but notwithstanding any other provision of this chapter, the Commission, by rule, regulation, or order, may conditionally or unconditionally exempt any designated contract market in security futures subject to the designation requirement of this section from any provision of this chapter or of any rule or regulation thereunder, to the extent such exemption is necessary or appropriate in the public interest and is consistent with the protection of investors.

(B)The Commission shall, by rule or regulation, determine the procedures under which an exemptive order under this section is granted and may, in its sole discretion, decline to entertain any application for an order of exemption under this section.

(C)An alternative trading system shall not be deemed to be an exchange for any purpose as a result of the designation of such alternative trading system as a contract market under this section.

Editorial Notes

References in Text

Subsec. (f) of section 13 of this title, referred to in subsec. (b)(1)(G), was redesignated subsec. (e) by Pub. L. 110–246, title XIII, § 13105(h)(2), June 18, 2008, 122 Stat. 2197.

§7b–1 Designation of Securities Exchanges and Associations as Contract Markets

Summary

Title 7, §7b–1

Notes & Related Subsidiaries

Editorial Notes

References in Text

Citations & Metadata