Position limits and position accountability for security-based swaps and large trader reporting

Source Credit

(a) Position limits
As a means reasonably designed to prevent fraud and manipulation, the Commission shall, by rule or regulation, as necessary or appropriate in the public interest or for the protection of investors, establish limits (including related hedge exemption provisions) on the size of positions in any security-based swap that may be held by any person. In establishing such limits, the Commission may require any person to aggregate positions in—
(1) any security-based swap and any security or loan or group of securities or loans on which such security-based swap is based, which such security-based swap references, or to which such security-based swap is related as described in paragraph (68) of section 78c(a) of this title, and any other instrument relating to such security or loan or group or index of securities or loans; or
(2) any security-based swap and—
(A) any security or group or index of securities, the price, yield, value, or volatility of which, or of which any interest therein, is the basis for a material term of such security-based swap as described in paragraph (68) of section 78c(a) of this title; and
(B) any other instrument relating to the same security or group or index of securities described under subparagraph (A).
(b) Exemptions
The Commission, by rule, regulation, or order, may conditionally or unconditionally exempt any person or class of persons, any security-based swap or class of security-based swaps, or any transaction or class of transactions from any requirement the Commission may establish under this section with respect to position limits.
(c) SRO rules
(1) In general
As a means reasonably designed to prevent fraud or manipulation, the Commission, by rule, regulation, or order, as necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of this chapter, may direct a self-regulatory organization—
(A) to adopt rules regarding the size of positions in any security-based swap that may be held by—
(i) any member of such self-regulatory organization; or
(ii) any person for whom a member of such self-regulatory organization effects transactions in such security-based swap; and
(B) to adopt rules reasonably designed to ensure compliance with requirements prescribed by the Commission under this subsection.
(2) Requirement to aggregate positions
In establishing the limits under paragraph (1), the self-regulatory organization may require such member or person to aggregate positions in—
(A) any security-based swap and any security or loan or group or narrow-based security index of securities or loans on which such security-based swap is based, which such security-based swap references, or to which such security-based swap is related as described in section 78c(a)(68) of this title, and any other instrument relating to such security or loan or group or narrow-based security index of securities or loans; or
(B)(i) any security-based swap; and
(ii) any security-based swap and any other instrument relating to the same security or group or narrow-based security index of securities.
(d) Large trader reporting
The Commission, by rule or regulation, may require any person that effects transactions for such person's own account or the account of others in any securities-based swap or uncleared security-based swap and any security or loan or group or narrow-based security index of securities or loans as set forth in paragraphs (1) and (2) of subsection (a) under this section to report such information as the Commission may prescribe regarding any position or positions in any security-based swap or uncleared security-based swap and any security or loan or group or narrow-based security index of securities or loans and any other instrument relating to such security or loan or group or narrow-based security index of securities or loans as set forth in paragraphs (1) and (2) of subsection (a) under this section.

History

(June 6, 1934, ch. 404, title I, §10B, as added Pub. L. 111–203, title VII, §763(h), July 21, 2010, 124 Stat. 1778.)

Editorial Notes

Editorial Notes

References in Text
This chapter, referred to in subsec. (c)(1), was in the original "this title". See References in Text note set out under section 78a of this title.

Statutory Notes and Related Subsidiaries

Effective Date
Section effective on the later of 360 days after July 21, 2010, or, to the extent a provision of subtitle B (§§761–774) of title VII of Pub. L. 111–203 requires a rulemaking, not less than 60 days after publication of the final rule or regulation implementing such provision of subtitle B, see section 774 of Pub. L. 111–203, set out as an Effective Date of 2010 Amendment note under section 77b of this title.