TITLE 17 - COMMODITY AND SECURITIES EXCHANGES

CHAPTER II - SECURITIES AND EXCHANGE COMMISSION

PART 240 - GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF 1934

240.36a1 - 2 - Exemption from SIPA for OTC derivatives dealers.

Preliminary Note: OTC derivatives dealers are a special class of broker-dealers that are exempt from certain broker-dealer requirements, including membership in a self-regulatory organization (240.15b92), regular broker-dealer margin rules (240.36a11), and application of the Securities Investor Protection Act of 1970 (240.36a12). OTC derivative dealers are subject to special requirements, including limitations on the scope of their securities activities (240.15a1), specified internal risk management control systems (240.15c34), recordkeeping obligations (240.17a3(a)(10)), and reporting responsibilities (240.17a12). They are also subject to alternative net capital treatment (240.15c31(a)(5)).

OTC derivatives dealers, as defined in 240.3b12, shall be exempt from the provisions of the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa through 78lll).

[63 FR 59404, Nov. 3, 1998]