This page is no longer current. You are being redirected to the current text at http://www.law.cornell.edu/cfr/text/17/240.36a1-1. If you are not forwarded to the new page, please click here. To avoid this message in the future, please select your links from the Table of Contents page at http://www.law.uc.edu/CCL/sldtoc.html.

 Securities Lawyer's Deskbook
                         published by The University of Cincinnati College of Law
UC Law logo

Notice: The information on this page may not be current. To learn more, please click here.


General Rules and Regulations
promulgated
under the
Securities Exchange Act of 1934





Rule 36a1-1 -- Exemption from Section 7 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 (Rule 15b9-2), regular broker-dealer margin rules (Rule 36a1-1), and application of the Securities Investor Protection Act of 1970 (Rule 36a1-2). OTC derivative dealers are subject to special requirements, including limitations on the scope of their securities activities (Rule 15a-1), specified internal risk management control systems (Rule 15c3-4), recordkeeping obligations (Rule 17a-3(a)(10)), and reporting responsibilities (Rule 17a-12). They are also subject to alternative net capital treatment (Rule 15c3-1(a)(5)).
  1. Except as otherwise provided in paragraph (b) of this section, transactions involving the extension of credit by an OTC derivatives dealer shall be exempt from the provisions of section 7(c) of the Act, provided that the OTC derivatives dealer complies with section 7(d) of the Act.

  2. The exemption provided under paragraph (a) of this section shall not apply to extensions of credit made directly by a registered broker or dealer (other than an OTC derivatives dealer) in connection with transactions in eligible OTC derivative instruments for which an OTC derivatives dealer acts as counterparty.


Regulatory History


63 FR 59362, 59404, Nov. 3, 1998



Notice to Users: The Deskbook is made available with the understanding that the University of Cincinnati College of Law is not engaged in rendering legal, accounting or other professional services. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. See Terms and Conditions of Use.  UC Brand Ingot

© Copyright 1998-2009, University of Cincinnati, All Rights Reserved
 Contact: ronald.jones@uc.edu