---
kind: "section"
citation: "15 U.S.C. § 78f"
title: "15"
title_heading: "Commerce and Trade"
number: "78f"
heading: "National securities exchanges"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/15/78f"
units:
  - "Chapter 2B — Securities Exchanges"
---

# §78f. National securities exchanges

- (a) **Registration; application—** An [exchange](/usc/15/78c.md?p=a-1) may be registered as a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) under the terms and conditions hereinafter provided in this section and in accordance with the provisions of [section 78s(a) of this title](/usc/15/78s.md?p=a), by filing with the [Commission](/usc/15/78c.md?p=a-15) an application for registration in such form as the [Commission](/usc/15/78c.md?p=a-15), by rule, may prescribe containing the rules of the [exchange](/usc/15/78c.md?p=a-1) and such other information and documents as the [Commission](/usc/15/78c.md?p=a-15), by rule, may prescribe as necessary or appropriate in the public interest or for the protection of investors.
- (b) **Determination by Commission requisite to registration of applicant as a national securities exchange—** An [exchange](/usc/15/78c.md?p=a-1) shall not be registered as a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) unless the [Commission](/usc/15/78c.md?p=a-15) determines that—
  - (1) Such [exchange](/usc/15/78c.md?p=a-1) is so organized and has the capacity to be able to carry out the purposes of this chapter and to comply, and (subject to any rule or order of the [Commission](/usc/15/78c.md?p=a-15) pursuant to section [78q(d)](/usc/15/78q.md?p=d) or [78s(g)(2)](/usc/15/78s.md?p=g-2) of this title) to enforce compliance by its [members](/usc/15/78c.md?p=a-3-A) and [persons](/usc/15/78c.md?p=a-9) associated with its [members](/usc/15/78c.md?p=a-3-A), with the provisions of this chapter, the rules and regulations thereunder, and the rules of the [exchange](/usc/15/78c.md?p=a-1).
  - (2) Subject to the provisions of [subsection (c)](#c) of this section, the rules of the [exchange](/usc/15/78c.md?p=a-1) provide that any [registered broker or dealer](/usc/15/78c.md?p=a-48) or natural [person associated with](/usc/15/78c.md?p=a-63) a [registered broker or dealer](/usc/15/78c.md?p=a-48) may become a [member](/usc/15/78c.md?p=a-3-A) of such [exchange](/usc/15/78c.md?p=a-1) and any [person](/usc/15/78c.md?p=a-9) may become associated with a [member](/usc/15/78c.md?p=a-3-A) thereof.
  - (3) The rules of the [exchange](/usc/15/78c.md?p=a-1) assure a fair representation of its [members](/usc/15/78c.md?p=a-3-A) in the selection of its [directors](/usc/15/78c.md?p=a-7) and [administration](/usc/15/636e.md?p=1) of its affairs and provide that one or more [directors](/usc/15/78c.md?p=a-7) shall be representative of [issuers](/usc/15/78c.md?p=a-8) and investors and not be associated with a [member](/usc/15/78c.md?p=a-3-A) of the [exchange](/usc/15/78c.md?p=a-1), [broker](/usc/15/78c.md?p=a-4-A), or [dealer](/usc/15/78c.md?p=a-5-A).
  - (4) The rules of the [exchange](/usc/15/78c.md?p=a-1) provide for the equitable allocation of reasonable dues, fees, and other charges among its [members](/usc/15/78c.md?p=a-3-A) and [issuers](/usc/15/78c.md?p=a-8) and other [persons](/usc/15/78c.md?p=a-9) using its [facilities](/usc/15/78c.md?p=a-2).
  - (5) The rules of the [exchange](/usc/15/78c.md?p=a-1) are designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with [persons](/usc/15/78c.md?p=a-9) engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in [securities](/usc/15/78c.md?p=a-10), to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest; and are not designed to permit unfair discrimination between customers, [issuers](/usc/15/78c.md?p=a-8), [brokers](/usc/15/78c.md?p=a-4-A), or [dealers](/usc/15/78c.md?p=a-5-A), or to regulate by virtue of any authority conferred by this chapter matters not related to the purposes of this chapter or the [administration](/usc/15/636e.md?p=1) of the [exchange](/usc/15/78c.md?p=a-1).
  - (6) The rules of the [exchange](/usc/15/78c.md?p=a-1) provide that (subject to any rule or order of the [Commission](/usc/15/78c.md?p=a-15) pursuant to section [78q(d)](/usc/15/78q.md?p=d) or [78s(g)(2)](/usc/15/78s.md?p=g-2) of this title) its [members](/usc/15/78c.md?p=a-3-A) and [persons](/usc/15/78c.md?p=a-9) associated with its [members](/usc/15/78c.md?p=a-3-A) shall be appropriately disciplined for violation of the provisions of this chapter, the rules or regulations thereunder, or the rules of the [exchange](/usc/15/78c.md?p=a-1), by expulsion, suspension, limitation of activities, functions, and operations, fine, censure, being suspended or barred from being associated with a [member](/usc/15/78c.md?p=a-3-A), or any other fitting sanction.
  - (7) The rules of the [exchange](/usc/15/78c.md?p=a-1) are in accordance with the provisions of [subsection (d)](#d) of this section, and in general, provide a fair procedure for the disciplining of [members](/usc/15/78c.md?p=a-3-A) and [persons](/usc/15/78c.md?p=a-9) associated with [members](/usc/15/78c.md?p=a-3-A), the denial of membership to any [person](/usc/15/78c.md?p=a-9) seeking membership therein, the barring of any [person](/usc/15/78c.md?p=a-9) from becoming associated with a [member](/usc/15/78c.md?p=a-3-A) thereof, and the prohibition or limitation by the [exchange](/usc/15/78c.md?p=a-1) of any [person](/usc/15/78c.md?p=a-9) with respect to access to services offered by the [exchange](/usc/15/78c.md?p=a-1) or a [member](/usc/15/78c.md?p=a-3-A) thereof.
  - (8) The rules of the [exchange](/usc/15/78c.md?p=a-1) do not impose any burden on competition not necessary or appropriate in furtherance of the purposes of this chapter.
  - (9)
    - (A) The rules of the [exchange](/usc/15/78c.md?p=a-1) prohibit the listing of any [security](/usc/15/78c.md?p=a-10) issued in a limited partnership rollup transaction (as such term is defined in paragraphs (4) and (5) of [section 78n(h) of this title](/usc/15/78n.md?p=h)), unless such transaction was conducted in accordance with procedures designed to protect the rights of limited partners, including—
      - (i) the right of dissenting limited partners to one of the following:
        - (I) an appraisal and compensation;
        - (II) retention of a [security](/usc/15/78c.md?p=a-10) under substantially the same terms and conditions as the original issue;
        - (III) approval of the limited partnership rollup transaction by not less than 75 percent of the outstanding [securities](/usc/15/78c.md?p=a-10) of each of the participating limited partnerships;
        - (IV) the use of a committee of limited partners that is independent, as determined in accordance with rules prescribed by the [exchange](/usc/15/78c.md?p=a-1), of the general partner or sponsor, that has been approved by a majority of the outstanding units of each of the participating limited partnerships, and that has such authority as is necessary to protect the interest of limited partners, including the authority to hire independent advisors, to negotiate with the general partner or sponsor on behalf of the limited partners, and to make a recommendation to the limited partners with respect to the proposed transaction; or
        - (V) other comparable rights that are prescribed by rule by the [exchange](/usc/15/78c.md?p=a-1) and that are designed to protect dissenting limited partners;
      - (ii) the right not to have their voting power unfairly reduced or abridged;
      - (iii) the right not to bear an unfair portion of the costs of a proposed limited partnership rollup transaction that is rejected; and
      - (iv) restrictions on the conversion of contingent interests or fees into non-contingent interests or fees and restrictions on the receipt of a non-contingent equity interest in [exchange](/usc/15/78c.md?p=a-1) for fees for services which have not yet been provided.
    - (B) As used in this paragraph, the term “dissenting limited partner” means a [person](/usc/15/78c.md?p=a-9) who, on the date on which soliciting material is mailed to investors, is a holder of a beneficial interest in a limited partnership that is the subject of a limited partnership rollup transaction, and who casts a vote against the transaction and complies with procedures established by the [exchange](/usc/15/78c.md?p=a-1), except that for purposes of an [exchange](/usc/15/78c.md?p=a-1) or tender offer, such [person](/usc/15/78c.md?p=a-9) shall file an objection in writing under the rules of the [exchange](/usc/15/78c.md?p=a-1) during the period during which the offer is outstanding.
  - (10)
    - (A) The rules of the [exchange](/usc/15/78c.md?p=a-1) prohibit any [member](/usc/15/78c.md?p=a-3-A) that is not the beneficial owner of a [security](/usc/15/78c.md?p=a-10) registered under [section 78l](/usc/15/78l.md) of this title from granting a proxy to vote the [security](/usc/15/78c.md?p=a-10) in connection with a shareholder vote described in [subparagraph (B)](#b-10-B), unless the beneficial owner of the [security](/usc/15/78c.md?p=a-10) has instructed the [member](/usc/15/78c.md?p=a-3-A) to vote the proxy in accordance with the voting instructions of the beneficial owner.
    - (B) A shareholder vote described in this subparagraph is a shareholder vote with respect to the election of a [member](/usc/15/78c.md?p=a-3-A) of the [board](/usc/15/78c.md?p=a-73) of [directors](/usc/15/78c.md?p=a-7) of an [issuer](/usc/15/78c.md?p=a-8), executive compensation, or any other significant matter, as determined by the [Commission](/usc/15/78c.md?p=a-15), by rule, and does not include a vote with respect to the uncontested election of a [member](/usc/15/78c.md?p=a-3-A) of the [board](/usc/15/78c.md?p=a-73) of [directors](/usc/15/78c.md?p=a-7) of any [investment company](/usc/15/78c.md?p=a-12-A-iii) registered under the Investment Company Act of 1940 [[15 U.S.C. 80a–1](/usc/15/80a–1.md) et seq.].
    - (C) Nothing in this paragraph shall be construed to prohibit a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) from prohibiting a [member](/usc/15/78c.md?p=a-3-A) that is not the beneficial owner of a [security](/usc/15/78c.md?p=a-10) registered under [section 78l](/usc/15/78l.md) of this title from granting a proxy to vote the [security](/usc/15/78c.md?p=a-10) in connection with a shareholder vote not described in [subparagraph (A)](#b-10-A).
- (c) **Denial of membership in national exchanges; denial of association with member; conditions; limitation of membership—**
  - (1) A national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) shall deny membership to (A) any [person](/usc/15/78c.md?p=a-9), other than a natural [person](/usc/15/78c.md?p=a-9), which is not a [registered broker or dealer](/usc/15/78c.md?p=a-48) or (B) any natural [person](/usc/15/78c.md?p=a-9) who is not, or is not associated with, a [registered broker or dealer](/usc/15/78c.md?p=a-48).
  - (2) A national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) may, and in cases in which the [Commission](/usc/15/78c.md?p=a-15), by order, directs as necessary or appropriate in the public interest or for the protection of investors shall, deny membership to any [registered broker or dealer](/usc/15/78c.md?p=a-48) or natural [person associated with](/usc/15/78c.md?p=a-63) a [registered broker or dealer](/usc/15/78c.md?p=a-48), and bar from becoming associated with a [member](/usc/15/78c.md?p=a-3-A) any [person](/usc/15/78c.md?p=a-9), who is subject to a statutory disqualification. A national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) shall file notice with the [Commission](/usc/15/78c.md?p=a-15) not less than thirty days prior to admitting any [person](/usc/15/78c.md?p=a-9) to membership or permitting any [person](/usc/15/78c.md?p=a-9) to become associated with a [member](/usc/15/78c.md?p=a-3-A), if the [exchange](/usc/15/78c.md?p=a-1) knew, or in the exercise of reasonable care should have known, that such [person](/usc/15/78c.md?p=a-9) was subject to a statutory disqualification. The notice shall be in such form and contain such information as the [Commission](/usc/15/78c.md?p=a-15), by rule, may prescribe as necessary or appropriate in the public interest or for the protection of investors.
  - (3)
    - (A) A national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) may deny membership to, or condition the membership of, a [registered broker or dealer](/usc/15/78c.md?p=a-48) if (i) such [broker or dealer](/usc/15/78c.md?p=h-2) does not meet such standards of financial responsibility or operational capability or such [broker or dealer](/usc/15/78c.md?p=h-2) or any natural [person associated with](/usc/15/78c.md?p=a-63) such [broker or dealer](/usc/15/78c.md?p=h-2) does not meet such standards of training, experience, and competence as are prescribed by the rules of the [exchange](/usc/15/78c.md?p=a-1) or (ii) such [broker or dealer](/usc/15/78c.md?p=h-2) or [person associated with](/usc/15/78c.md?p=a-63) such [broker or dealer](/usc/15/78c.md?p=h-2) has engaged and there is a reasonable likelihood he may again engage in acts or practices inconsistent with just and equitable principles of trade. A national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) may examine and verify the qualifications of an [applicant](/usc/15/7a.md?p=3) to become a [member](/usc/15/78c.md?p=a-3-A) and the [natural persons](/usc/15/15g.md?p=3) associated with such an [applicant](/usc/15/7a.md?p=3) in accordance with procedures established by the rules of the [exchange](/usc/15/78c.md?p=a-1).
    - (B) A national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) may bar a natural [person](/usc/15/78c.md?p=a-9) from becoming a [member](/usc/15/78c.md?p=a-3-A) or associated with a [member](/usc/15/78c.md?p=a-3-A), or condition the membership of a natural [person](/usc/15/78c.md?p=a-9) or association of a natural [person](/usc/15/78c.md?p=a-9) with a [member](/usc/15/78c.md?p=a-3-A), if such natural [person](/usc/15/78c.md?p=a-9) (i) does not meet such standards of training, experience, and competence as are prescribed by the rules of the [exchange](/usc/15/78c.md?p=a-1) or (ii) has engaged and there is a reasonable likelihood he may again engage in acts or practices inconsistent with just and equitable principles of trade. A national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) may examine and verify the qualifications of an [applicant](/usc/15/7a.md?p=3) to become a [person associated with a member](/usc/15/78c.md?p=a-21) in accordance with procedures established by the rules of the [exchange](/usc/15/78c.md?p=a-1) and require any [person associated with a member](/usc/15/78c.md?p=a-21), or any class of such [persons](/usc/15/78c.md?p=a-9), to be registered with the [exchange](/usc/15/78c.md?p=a-1) in accordance with procedures so established.
    - (C) A national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) may bar any [person](/usc/15/78c.md?p=a-9) from becoming associated with a [member](/usc/15/78c.md?p=a-3-A) if such [person](/usc/15/78c.md?p=a-9) does not agree (i) to supply the [exchange](/usc/15/78c.md?p=a-1) with such information with respect to its relationship and dealings with the [member](/usc/15/78c.md?p=a-3-A) as may be specified in the rules of the [exchange](/usc/15/78c.md?p=a-1) and (ii) to permit the examination of its books and [records](/usc/15/78c.md?p=a-37) to verify the accuracy of any information so supplied.
  - (4) A national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) may limit (A) the number of [members](/usc/15/78c.md?p=a-3-A) of the [exchange](/usc/15/78c.md?p=a-1) and (B) the number of [members](/usc/15/78c.md?p=a-3-A) and designated representatives of [members](/usc/15/78c.md?p=a-3-A) permitted to effect transactions on the floor of the [exchange](/usc/15/78c.md?p=a-1) without the services of another [person](/usc/15/78c.md?p=a-9) acting as [broker](/usc/15/78c.md?p=a-4-A): Provided, however, That no national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) shall have the authority to decrease the number of memberships in such [exchange](/usc/15/78c.md?p=a-1), or the number of [members](/usc/15/78c.md?p=a-3-A) and designated representatives of [members](/usc/15/78c.md?p=a-3-A) permitted to effect transactions on the floor of such [exchange](/usc/15/78c.md?p=a-1) without the services of another [person](/usc/15/78c.md?p=a-9) acting as [broker](/usc/15/78c.md?p=a-4-A), below such number in effect on May 1, 1975, or the date such [exchange](/usc/15/78c.md?p=a-1) was registered with the [Commission](/usc/15/78c.md?p=a-15), whichever is later: And provided further, That the [Commission](/usc/15/78c.md?p=a-15), in accordance with the provisions of [section 78s(c) of this title](/usc/15/78s.md?p=c), may amend the rules of any national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) to increase (but not to decrease) or to remove any limitation on the number of memberships in such [exchange](/usc/15/78c.md?p=a-1) or the number of [members](/usc/15/78c.md?p=a-3-A) or designated representatives of [members](/usc/15/78c.md?p=a-3-A) permitted to effect transactions on the floor of the [exchange](/usc/15/78c.md?p=a-1) without the services of another [person](/usc/15/78c.md?p=a-9) acting as [broker](/usc/15/78c.md?p=a-4-A), if the [Commission](/usc/15/78c.md?p=a-15) finds that such limitation imposes a burden on competition not necessary or appropriate in furtherance of the purposes of this chapter.
- (d) **Discipline of national securities exchange members and persons associated with members; summary proceedings—**
  - (1) In any proceeding by a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) to determine whether a [member](/usc/15/78c.md?p=a-3-A) or [person associated with a member](/usc/15/78c.md?p=a-21) should be disciplined (other than a summary proceeding pursuant to paragraph (3) of this subsection), the [exchange](/usc/15/78c.md?p=a-1) shall bring specific charges, notify such [member](/usc/15/78c.md?p=a-3-A) or [person](/usc/15/78c.md?p=a-9) of, and give him an opportunity to defend against, such charges, and keep a record. A determination by the [exchange](/usc/15/78c.md?p=a-1) to impose a disciplinary sanction shall be supported by a statement setting forth—
    - (A) any act or practice in which such [member](/usc/15/78c.md?p=a-3-A) or [person associated with a member](/usc/15/78c.md?p=a-21) has been found to have engaged, or which such [member](/usc/15/78c.md?p=a-3-A) or [person](/usc/15/78c.md?p=a-9) has been found to have omitted;
    - (B) the specific provision of this chapter, the rules or regulations thereunder, or the rules of the [exchange](/usc/15/78c.md?p=a-1) which any such act or practice, or omission to act, is deemed to violate; and
    - (C) the sanction imposed and the reasons therefor.
  - (2) In any proceeding by a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) to determine whether a [person](/usc/15/78c.md?p=a-9) shall be denied membership, barred from becoming associated with a [member](/usc/15/78c.md?p=a-3-A), or prohibited or limited with respect to access to services offered by the [exchange](/usc/15/78c.md?p=a-1) or a [member](/usc/15/78c.md?p=a-3-A) thereof (other than a summary proceeding pursuant to paragraph (3) of this subsection), the [exchange](/usc/15/78c.md?p=a-1) shall notify such [person](/usc/15/78c.md?p=a-9) of, and give him an opportunity to be heard upon, the specific grounds for denial, bar, or prohibition or limitation under consideration and keep a record. A determination by the [exchange](/usc/15/78c.md?p=a-1) to deny membership, bar a [person](/usc/15/78c.md?p=a-9) from becoming associated with a [member](/usc/15/78c.md?p=a-3-A), or prohibit or limit a [person](/usc/15/78c.md?p=a-9) with respect to access to services offered by the [exchange](/usc/15/78c.md?p=a-1) or a [member](/usc/15/78c.md?p=a-3-A) thereof shall be supported by a statement setting forth the specific grounds on which the denial, bar, or prohibition or limitation is based.
  - (3) A national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) may summarily (A) suspend a [member](/usc/15/78c.md?p=a-3-A) or [person associated with a member](/usc/15/78c.md?p=a-21) who has been and is expelled or suspended from any [self-regulatory organization](/usc/15/78c.md?p=a-26) or barred or suspended from being associated with a [member](/usc/15/78c.md?p=a-3-A) of any [self-regulatory organization](/usc/15/78c.md?p=a-26), (B) suspend a [member](/usc/15/78c.md?p=a-3-A) who is in such financial or operating difficulty that the [exchange](/usc/15/78c.md?p=a-1) determines and so notifies the [Commission](/usc/15/78c.md?p=a-15) that the [member](/usc/15/78c.md?p=a-3-A) cannot be permitted to continue to do business as a [member](/usc/15/78c.md?p=a-3-A) with safety to investors, creditors, other [members](/usc/15/78c.md?p=a-3-A), or the [exchange](/usc/15/78c.md?p=a-1), or (C) limit or prohibit any [person](/usc/15/78c.md?p=a-9) with respect to access to services offered by the [exchange](/usc/15/78c.md?p=a-1) if subparagraph (A) or (B) of this paragraph is applicable to such [person](/usc/15/78c.md?p=a-9) or, in the case of a [person](/usc/15/78c.md?p=a-9) who is not a [member](/usc/15/78c.md?p=a-3-A), if the [exchange](/usc/15/78c.md?p=a-1) determines that such [person](/usc/15/78c.md?p=a-9) does not meet the qualification requirements or other prerequisites for such access and such [person](/usc/15/78c.md?p=a-9) cannot be permitted to continue to have such access with safety to investors, creditors, [members](/usc/15/78c.md?p=a-3-A), or the [exchange](/usc/15/78c.md?p=a-1). Any [person](/usc/15/78c.md?p=a-9) aggrieved by any such summary action shall be promptly afforded an opportunity for a hearing by the [exchange](/usc/15/78c.md?p=a-1) in accordance with the provisions of paragraph (1) or (2) of this subsection. The [Commission](/usc/15/78c.md?p=a-15), by order, may stay any such summary action on its own motion or upon application by any [person](/usc/15/78c.md?p=a-9) aggrieved thereby, if the [Commission](/usc/15/78c.md?p=a-15) determines summarily or after notice and opportunity for hearing (which hearing may consist solely of the submission of affidavits or presentation of oral arguments) that such stay is consistent with the public interest and the protection of investors.
- (e) **Commissions, allowances, discounts, and other fees—**
  - (1) On and after June 4, 1975, no national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) may impose any schedule or fix rates of [commissions](/usc/15/78c.md?p=a-15), allowances, discounts, or other fees to be charged by its [members](/usc/15/78c.md?p=a-3-A): Provided, however, That until May 1, 1976, the preceding provisions of this paragraph shall not prohibit any such [exchange](/usc/15/78c.md?p=a-1) from imposing or fixing any schedule of [commissions](/usc/15/78c.md?p=a-15), allowances, discounts, or other fees to be charged by its [members](/usc/15/78c.md?p=a-3-A) for acting as [broker](/usc/15/78c.md?p=a-4-A) on the floor of the [exchange](/usc/15/78c.md?p=a-1) or as odd-lot [dealer](/usc/15/78c.md?p=a-5-A): And provided further, That the [Commission](/usc/15/78c.md?p=a-15), in accordance with the provisions of [section 78s(b) of this title](/usc/15/78s.md?p=b) as modified by the provisions of paragraph (3) of this subsection, may—
    - (A) permit a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1), by rule, to impose a reasonable schedule or fix reasonable rates of [commissions](/usc/15/78c.md?p=a-15), allowances, discounts, or other fees to be charged by its [members](/usc/15/78c.md?p=a-3-A) for effecting transactions on such [exchange](/usc/15/78c.md?p=a-1) prior to November 1, 1976, if the [Commission](/usc/15/78c.md?p=a-15) finds that such schedule or fixed rates of [commissions](/usc/15/78c.md?p=a-15), allowances, discounts, or other fees are in the public interest; and
    - (B) permit a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1), by rule, to impose a schedule or fix rates of [commissions](/usc/15/78c.md?p=a-15), allowances, discounts, or other fees to be charged by its [members](/usc/15/78c.md?p=a-3-A) for effecting transactions on such [exchange](/usc/15/78c.md?p=a-1) after November 1, 1976, if the [Commission](/usc/15/78c.md?p=a-15) finds that such schedule or fixed rates of [commissions](/usc/15/78c.md?p=a-15), allowances, discounts, or other fees (i) are reasonable in relation to the costs of providing the service for which such fees are charged (and the [Commission](/usc/15/78c.md?p=a-15) publishes the standards employed in adjudging reasonableness) and (ii) do not impose any burden on competition not necessary or appropriate in furtherance of the purposes of this chapter, taking into consideration the competitive effects of permitting such schedule or fixed rates weighed against the competitive effects of other lawful actions which the [Commission](/usc/15/78c.md?p=a-15) is authorized to take under this chapter.
  - (2) Notwithstanding the provisions of [section 78s(c) of this title](/usc/15/78s.md?p=c), the [Commission](/usc/15/78c.md?p=a-15), by rule, may abrogate any [exchange](/usc/15/78c.md?p=a-1) rule which imposes a schedule or fixes rates of [commissions](/usc/15/78c.md?p=a-15), allowances, discounts, or other fees, if the [Commission](/usc/15/78c.md?p=a-15) determines that such schedule or fixed rates are no longer reasonable, in the public interest, or necessary to accomplish the purposes of this chapter.
  - (3)
    - (A) Before approving or disapproving any proposed rule change submitted by a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) which would impose a schedule or fix rates of [commissions](/usc/15/78c.md?p=a-15), allowances, discounts, or other fees to be charged by its [members](/usc/15/78c.md?p=a-3-A) for effecting transactions on such [exchange](/usc/15/78c.md?p=a-1), the [Commission](/usc/15/78c.md?p=a-15) shall afford interested [persons](/usc/15/78c.md?p=a-9) (i) an opportunity for oral presentation of data, views, and arguments and (ii) with respect to any such rule concerning transactions effected after November 1, 1976, if the [Commission](/usc/15/78c.md?p=a-15) determines there are disputed issues of material fact, to present such rebuttal submissions and to conduct (or have conducted under subparagraph (B) of this paragraph) such cross-examination as the [Commission](/usc/15/78c.md?p=a-15) determines to be appropriate and required for full disclosure and proper resolution of such disputed issues of material fact.
    - (B) The [Commission](/usc/15/78c.md?p=a-15) shall prescribe rules and make rulings concerning any proceeding in accordance with subparagraph (A) of this paragraph designed to avoid unnecessary costs or delay. Such rules or rulings may (i) impose reasonable time limits on each interested [person](/usc/15/78c.md?p=a-9)’s oral presentations, and (ii) require any cross-examination to which a [person](/usc/15/78c.md?p=a-9) may be entitled under subparagraph (A) of this paragraph to be conducted by the [Commission](/usc/15/78c.md?p=a-15) on behalf of that [person](/usc/15/78c.md?p=a-9) in such manner as the [Commission](/usc/15/78c.md?p=a-15) determines to be appropriate and required for full disclosure and proper resolution of disputed issues of material fact.
    - (C)
      - (i) If any class of [persons](/usc/15/78c.md?p=a-9), the [members](/usc/15/78c.md?p=a-3-A) of which are entitled to conduct (or have conducted) cross-examination under subparagraphs (A) and (B) of this paragraph and which have, in the view of the [Commission](/usc/15/78c.md?p=a-15), the same or similar interests in the proceeding, cannot agree upon a single representative of such interests for purposes of cross-examination, the [Commission](/usc/15/78c.md?p=a-15) may make rules and rulings specifying the manner in which such interests shall be represented and such cross-examination conducted.
      - (ii) No [member](/usc/15/78c.md?p=a-3-A) of any class of [persons](/usc/15/78c.md?p=a-9) with respect to which the [Commission](/usc/15/78c.md?p=a-15) has specified the manner in which its interests shall be represented pursuant to clause (i) of this subparagraph shall be denied, pursuant to such [clause (i)](#e-3-C-i), the opportunity to conduct (or have conducted) cross-examination as to issues affecting his particular interests if he satisfies the [Commission](/usc/15/78c.md?p=a-15) that he has made a reasonable and good faith effort to reach [agreement](/usc/15/7a.md?p=2) upon group representation and there are substantial and relevant issues which would not be presented adequately by group representation.
    - (D) A transcript shall be kept of any oral presentation and cross-examination.
    - (E) In addition to the bases specified in [section 78y(a) of this title](/usc/15/78y.md?p=a), a reviewing Court may set aside an order of the [Commission](/usc/15/78c.md?p=a-15) under [section 78s(b) of this title](/usc/15/78s.md?p=b) approving an [exchange](/usc/15/78c.md?p=a-1) rule imposing a schedule or fixing rates of [commissions](/usc/15/78c.md?p=a-15), allowances, discounts, or other fees, if the Court finds—

      has precluded full disclosure and proper resolution of disputed issues of material fact which were necessary for fair determination by the [Commission](/usc/15/78c.md?p=a-15).

- (f) **Compliance of non-members with exchange rules—** The [Commission](/usc/15/78c.md?p=a-15), by rule or order, as it deems necessary or appropriate in the public interest and for the protection of investors, to maintain fair and orderly markets, or to assure equal regulation, may require—
  - (1) any [person](/usc/15/78c.md?p=a-9) not a [member](/usc/15/78c.md?p=a-3-A) or a designated representative of a [member](/usc/15/78c.md?p=a-3-A) of a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) effecting transactions on such [exchange](/usc/15/78c.md?p=a-1) without the services of another [person](/usc/15/78c.md?p=a-9) acting as a [broker](/usc/15/78c.md?p=a-4-A), or
  - (2) any [broker or dealer](/usc/15/78c.md?p=h-2) not a [member](/usc/15/78c.md?p=a-3-A) of a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) effecting transactions on such [exchange](/usc/15/78c.md?p=a-1) on a regular basis,

  to comply with such rules of such [exchange](/usc/15/78c.md?p=a-1) as the [Commission](/usc/15/78c.md?p=a-15) may specify.

- (g) **Notice registration of security futures product exchanges—**
  - (1) **Registration required—** An [exchange](/usc/15/78c.md?p=a-1) that lists or trades [security futures products](/usc/15/78c.md?p=a-56) may register as a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) solely for the purposes of trading [security futures products](/usc/15/78c.md?p=a-56) if—
    - (A) the [exchange](/usc/15/78c.md?p=a-1) is a [board](/usc/15/78c.md?p=a-73) of trade, as that term is defined by the Commodity Exchange Act ([7 U.S.C. 1a(2)](/usc/7/1a.md?p=2)) [[7 U.S.C. 1](/usc/7/1.md) et seq.], that has been designated a contract market by the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15) and such designation is not suspended by order of the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15); and
    - (B) such [exchange](/usc/15/78c.md?p=a-1) does not serve as a market place for transactions in [securities](/usc/15/78c.md?p=a-10) other than—
      - (i) [security futures products](/usc/15/78c.md?p=a-56); or
      - (ii) futures on [exempted securities](/usc/15/78c.md?p=a-12-A) or groups or [indexes](/usc/15/78c.md?p=a-68-E) of [securities](/usc/15/78c.md?p=a-10) or options thereon that have been authorized under section 2(a)(1)(C) of the Commodity Exchange Act [[7 U.S.C. 2(a)(1)(C)](/usc/7/2.md?p=a-1-C)].
  - (2) **Registration by notice filing—**
    - (A) **Form and content—** An [exchange](/usc/15/78c.md?p=a-1) required to register only because such [exchange](/usc/15/78c.md?p=a-1) lists or trades [security futures products](/usc/15/78c.md?p=a-56) may register for purposes of this section by filing with the [Commission](/usc/15/78c.md?p=a-15) a written notice in such form as the [Commission](/usc/15/78c.md?p=a-15), by rule, may prescribe containing the rules of the [exchange](/usc/15/78c.md?p=a-1) and such other information and documents concerning such [exchange](/usc/15/78c.md?p=a-1), comparable to the information and documents required for national [securities](/usc/15/78c.md?p=a-10) [exchanges](/usc/15/78c.md?p=a-1) under [subsection (a)](#a), as the [Commission](/usc/15/78c.md?p=a-15), by rule, may prescribe as necessary or appropriate in the public interest or for the protection of investors. If such [exchange](/usc/15/78c.md?p=a-1) has filed documents with the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15), to the extent that such documents contain information satisfying the [Commission](/usc/15/78c.md?p=a-15)’s informational requirements, copies of such documents may be filed with the [Commission](/usc/15/78c.md?p=a-15) in lieu of the required written notice.
    - (B) **Immediate effectiveness—** Such registration shall be effective contemporaneously with the submission of notice, in written or electronic form, to the [Commission](/usc/15/78c.md?p=a-15), except that such registration shall not be effective if such registration would be subject to suspension or revocation.
    - (C) **Termination—** Such registration shall be terminated immediately if any of the conditions for registration set forth in this subsection are no longer satisfied.
  - (3) **Public availability—** The [Commission](/usc/15/78c.md?p=a-15) shall promptly publish in the Federal Register an acknowledgment of receipt of all notices the [Commission](/usc/15/78c.md?p=a-15) receives under this subsection and shall make all such notices available to the public.
  - (4) **Exemption of exchanges from specified provisions—**
    - (A) **Transaction exemptions—** An [exchange](/usc/15/78c.md?p=a-1) that is registered under paragraph (1) of this subsection shall be exempt from, and shall not be required to enforce compliance by its [members](/usc/15/78c.md?p=a-3-A) with, and its [members](/usc/15/78c.md?p=a-3-A) shall not, solely with respect to those transactions effected on such [exchange](/usc/15/78c.md?p=a-1) in [security futures products](/usc/15/78c.md?p=a-56), be required to comply with, the following provisions of this chapter and the rules thereunder:
      - (i) Subsections [(b)(2)](#b-2), [(b)(3)](#b-3), [(b)(4)](#b-4), [(b)(7)](#b-7), [(b)(9)](#b-9), [(c)](#c), [(d)](#d), and [(e)](#e) of this section.
      - (ii) [Section 78h of this title](/usc/15/78h.md).
      - (iii) [Section 78k of this title](/usc/15/78k.md).
      - (iv) Subsections [(d)](#d), [(f)](#f), and [(k)](#k)[^1] of [section 78q of this title](/usc/15/78q.md).
      - (v) Subsections (a), (f), and (h) of [section 78s of this title](/usc/15/78s.md).
    - (B) **Rule change exemptions—** An [exchange](/usc/15/78c.md?p=a-1) that registered under paragraph (1) of this subsection shall also be exempt from submitting proposed rule changes pursuant to [section 78s(b) of this title](/usc/15/78s.md?p=b), except that—
      - (i) such [exchange](/usc/15/78c.md?p=a-1) shall file proposed rule changes related to [higher margin levels](/usc/15/78c.md?p=a-57-C), fraud or manipulation, recordkeeping, reporting, listing standards, or decimal pricing for [security futures products](/usc/15/78c.md?p=a-56), sales practices for [security futures products](/usc/15/78c.md?p=a-56) for [persons](/usc/15/78c.md?p=a-9) who effect transactions in [security futures products](/usc/15/78c.md?p=a-56), or rules effectuating such [exchange](/usc/15/78c.md?p=a-1)’s obligation to enforce the [securities laws](/usc/15/78c.md?p=a-47) pursuant to [section 78s(b)(7) of this title](/usc/15/78s.md?p=b-7);
      - (ii) such [exchange](/usc/15/78c.md?p=a-1) shall file pursuant to sections [78s(b)(1)](/usc/15/78s.md?p=b-1) and [78s(b)(2)](/usc/15/78s.md?p=b-2) of this title proposed rule changes related to [margin](/usc/15/78c.md?p=a-57-A), except for changes resulting in [higher margin levels](/usc/15/78c.md?p=a-57-C); and
      - (iii) such [exchange](/usc/15/78c.md?p=a-1) shall file pursuant to [section 78s(b)(1) of this title](/usc/15/78s.md?p=b-1) proposed rule changes that have been abrogated by the [Commission](/usc/15/78c.md?p=a-15) pursuant to [section 78s(b)(7)(C) of this title](/usc/15/78s.md?p=b-7-C).
  - (5) **Trading in security futures products—**
    - (A) **In general—** Subject to [subparagraph (B)](#g-5-B), it shall be unlawful for any [person](/usc/15/78c.md?p=a-9) to execute or trade a [security futures product](/usc/15/78c.md?p=a-56) until the later of—
      - (i) 1 year after December 21, 2000; or
      - (ii) such date that a futures association registered under section 17 of the Commodity Exchange Act [[7 U.S.C. 21](/usc/7/21.md)] has met the requirements set forth in [section 78o–3(k)(2)](/usc/15/78o–3.md?p=k-2) of this title.
    - (B) **Principal-to-principal transactions—** Notwithstanding [subparagraph (A)](#g-5-A), a [person](/usc/15/78c.md?p=a-9) may execute or trade a [security futures product](/usc/15/78c.md?p=a-56) transaction if—
      - (i) the transaction is entered into—
        - (I) on a principal-to-principal basis between parties trading for their own accounts or as described in section 1a(18)(B)(ii) of the Commodity Exchange Act [[7 U.S.C. 1a(18)(B)(ii)](/usc/7/1a.md?p=18-B-ii)]; and
        - (II) only between [eligible contract participants](/usc/15/78c.md?p=a-65) (as defined in subparagraphs (A), (B)(ii), and (C) of such section 1a(18) [[7 U.S.C. 1a(18)(A)](/usc/7/1a.md?p=18-A), (B)(ii), (C)]) at the time at which the [persons](/usc/15/78c.md?p=a-9) enter into the [agreement](/usc/15/7a.md?p=2), contract, or transaction; and
      - (ii) the transaction is entered into on or after the later of—
        - (I) 8 months after December 21, 2000; or
        - (II) such date that a futures association registered under section 17 of the Commodity Exchange Act [[7 U.S.C. 21](/usc/7/21.md)] has met the requirements set forth in [section 78o–3(k)(2)](/usc/15/78o–3.md?p=k-2) of this title.
- (h) **Trading in security futures products—**
  - (1) **Trading on exchange or association required—** It shall be unlawful for any [person](/usc/15/78c.md?p=a-9) to effect transactions in [security futures products](/usc/15/78c.md?p=a-56) that are not listed on a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) or a national [securities](/usc/15/78c.md?p=a-10) association registered pursuant to [section 78o–3(a)](/usc/15/78o–3.md?p=a) of this title.
  - (2) **Listing standards required—** Except as otherwise provided in [paragraph (7)](#h-7), a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) or a national [securities](/usc/15/78c.md?p=a-10) association registered pursuant to [section 78o–3(a)](/usc/15/78o–3.md?p=a) of this title may trade only [security futures products](/usc/15/78c.md?p=a-56) that (A) conform with listing standards that such [exchange](/usc/15/78c.md?p=a-1) or association files with the [Commission](/usc/15/78c.md?p=a-15) under [section 78s(b) of this title](/usc/15/78s.md?p=b) and (B) meet the criteria specified in section 2(a)(1)(D)(i) of the Commodity Exchange Act [[7 U.S.C. 2(a)(1)(D)(i)](/usc/7/2.md?p=a-1-D-i)].
  - (3) **Requirements for listing standards and conditions for trading—** Such listing standards shall—
    - (A) except as otherwise provided in a rule, regulation, or order issued pursuant to [paragraph (4)](#h-4), require that any [security](/usc/15/78c.md?p=a-10) underlying the [security future](/usc/15/78c.md?p=a-55-A), including each component [security](/usc/15/78c.md?p=a-10) of a [narrow-based security index](/usc/15/78c.md?p=a-55-B), be registered pursuant to [section 78l](/usc/15/78l.md) of this title;
    - (B) require that if the [security futures product](/usc/15/78c.md?p=a-56) is not cash settled, the market on which the [security futures product](/usc/15/78c.md?p=a-56) is traded have arrangements in place with a registered [clearing agency](/usc/15/78c.md?p=a-23-A) for the payment and delivery of the [securities](/usc/15/78c.md?p=a-10) underlying the [security futures product](/usc/15/78c.md?p=a-56);
    - (C) be no less restrictive than comparable listing standards for options traded on a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) or national [securities](/usc/15/78c.md?p=a-10) association registered pursuant to [section 78o–3(a)](/usc/15/78o–3.md?p=a) of this title;
    - (D) except as otherwise provided in a rule, regulation, or order issued pursuant to [paragraph (4)](#h-4), require that the [security future](/usc/15/78c.md?p=a-55-A) be based upon common stock and such other [equity securities](/usc/15/78c.md?p=a-11) as the [Commission](/usc/15/78c.md?p=a-15) and the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15) jointly determine appropriate;
    - (E) require that the [security futures product](/usc/15/78c.md?p=a-56) is cleared by a [clearing agency](/usc/15/78c.md?p=a-23-A) that has in place provisions for linked and coordinated clearing with other [clearing agencies](/usc/15/78c.md?p=a-23-A) that clear [security futures products](/usc/15/78c.md?p=a-56), which permits the [security futures product](/usc/15/78c.md?p=a-56) to be purchased on one market and offset on another market that trades such product;
    - (F) require that only a [broker or dealer](/usc/15/78c.md?p=h-2) subject to suitability rules comparable to those of a national [securities](/usc/15/78c.md?p=a-10) association registered pursuant to [section 78o–3(a)](/usc/15/78o–3.md?p=a) of this title effect transactions in the [security futures product](/usc/15/78c.md?p=a-56);
    - (G) require that the [security futures product](/usc/15/78c.md?p=a-56) be subject to the prohibition against dual trading in section 4j of the Commodity Exchange Act ([7 U.S.C. 6j](/usc/7/6j.md)) and the rules and regulations thereunder or the provisions of [section 78k(a) of this title](/usc/15/78k.md?p=a) and the rules and regulations thereunder, except to the extent otherwise permitted under this chapter and the rules and regulations thereunder;
    - (H) require that trading in the [security futures product](/usc/15/78c.md?p=a-56) not be readily susceptible to manipulation of the price of such [security futures product](/usc/15/78c.md?p=a-56), nor to causing or being used in the manipulation of the price of any underlying [security](/usc/15/78c.md?p=a-10), option on such [security](/usc/15/78c.md?p=a-10), or option on a group or [index](/usc/15/78c.md?p=a-68-E) including such [securities](/usc/15/78c.md?p=a-10);
    - (I) require that procedures be in place for coordinated surveillance among the market on which the [security futures product](/usc/15/78c.md?p=a-56) is traded, any market on which any [security](/usc/15/78c.md?p=a-10) underlying the [security futures product](/usc/15/78c.md?p=a-56) is traded, and other markets on which any related [security](/usc/15/78c.md?p=a-10) is traded to detect manipulation and insider trading;
    - (J) require that the market on which the [security futures product](/usc/15/78c.md?p=a-56) is traded has in place audit trails necessary or appropriate to facilitate the coordinated surveillance required in [subparagraph (I)](#h-3-I);
    - (K) require that the market on which the [security futures product](/usc/15/78c.md?p=a-56) is traded has in place procedures to coordinate trading halts between such market and any market on which any [security](/usc/15/78c.md?p=a-10) underlying the [security futures product](/usc/15/78c.md?p=a-56) is traded and other markets on which any related [security](/usc/15/78c.md?p=a-10) is traded; and
    - (L) require that the [margin](/usc/15/78c.md?p=a-57-A) requirements for a [security futures product](/usc/15/78c.md?p=a-56) comply with the regulations prescribed pursuant to [section 78g(c)(2)(B) of this title](/usc/15/78g.md?p=c-2-B), except that nothing in this subparagraph shall be construed to prevent a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) or national [securities](/usc/15/78c.md?p=a-10) association from requiring [higher margin levels](/usc/15/78c.md?p=a-57-C) for a [security futures product](/usc/15/78c.md?p=a-56) when it deems such action to be necessary or appropriate.
  - (4) **Authority to modify certain listing standard requirements—**
    - (A) **Authority to modify—** The [Commission](/usc/15/78c.md?p=a-15) and the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15), by rule, regulation, or order, may jointly modify the listing standard requirements specified in subparagraph [(A)](#h-3-A) or [(D)](#h-3-D) of paragraph (3) to the extent such modification fosters the development of fair and orderly markets in [security futures products](/usc/15/78c.md?p=a-56), is necessary or appropriate in the public interest, and is consistent with the protection of investors.
    - (B) **Authority to grant exemptions—** The [Commission](/usc/15/78c.md?p=a-15) and the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15), by order, may jointly exempt any [person](/usc/15/78c.md?p=a-9) from compliance with the listing standard requirement specified in [subparagraph (E)](#h-3-E) of paragraph (3) to the extent such exemption fosters the development of fair and orderly markets in [security futures products](/usc/15/78c.md?p=a-56), is necessary or appropriate in the public interest, and is consistent with the protection of investors.
  - (5) **Requirements for other persons trading security future products—** It shall be unlawful for any [person](/usc/15/78c.md?p=a-9) (other than a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) or a national [securities](/usc/15/78c.md?p=a-10) association registered pursuant to [section 78o–3(a)](/usc/15/78o–3.md?p=a) of this title) to constitute, maintain, or provide a marketplace or [facilities](/usc/15/78c.md?p=a-2) for bringing together purchasers and sellers of [security future](/usc/15/78c.md?p=a-55-A) products or to otherwise perform with respect to [security future](/usc/15/78c.md?p=a-55-A) products the functions commonly performed by a stock [exchange](/usc/15/78c.md?p=a-1) as that term is generally understood, unless a national [securities](/usc/15/78c.md?p=a-10) association registered pursuant to [section 78o–3(a)](/usc/15/78o–3.md?p=a) of this title or a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) of which such [person](/usc/15/78c.md?p=a-9) is a [member](/usc/15/78c.md?p=a-3-A)—
    - (A) has in place procedures for coordinated surveillance among such [person](/usc/15/78c.md?p=a-9), the market trading the [securities](/usc/15/78c.md?p=a-10) underlying the [security future](/usc/15/78c.md?p=a-55-A) products, and other markets trading related [securities](/usc/15/78c.md?p=a-10) to detect manipulation and insider trading;
    - (B) has rules to require audit trails necessary or appropriate to facilitate the coordinated surveillance required in [subparagraph (A)](#h-5-A); and
    - (C) has rules to require such [person](/usc/15/78c.md?p=a-9) to coordinate trading halts with markets trading the [securities](/usc/15/78c.md?p=a-10) underlying the [security future](/usc/15/78c.md?p=a-55-A) products and other markets trading related [securities](/usc/15/78c.md?p=a-10).
  - (6) **Deferral of options on security futures trading—** No [person](/usc/15/78c.md?p=a-9) shall offer to enter into, enter into, or confirm the execution of any put, call, straddle, option, or privilege on a [security future](/usc/15/78c.md?p=a-55-A), except that, after 3 years after December 21, 2000, the [Commission](/usc/15/78c.md?p=a-15) and the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15) may by order jointly determine to permit trading of puts, calls, straddles, options, or privileges on any [security future](/usc/15/78c.md?p=a-55-A) authorized to be traded under the provisions of this chapter and the Commodity Exchange Act [[7 U.S.C. 1](/usc/7/1.md) et seq.].
  - (7) **Deferral of linked and coordinated clearing—**
    - (A) Notwithstanding [paragraph (2)](#h-2), until the compliance date, a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) or national [securities](/usc/15/78c.md?p=a-10) association registered pursuant to [section 78o–3(a)](/usc/15/78o–3.md?p=a) of this title may trade a [security futures product](/usc/15/78c.md?p=a-56) that does not—
      - (i) conform with any listing standard promulgated to meet the requirement specified in [subparagraph (E)](#h-3-E) of paragraph (3); or
      - (ii) meet the criterion specified in section 2(a)(1)(D)(i)(IV) of the Commodity Exchange Act [[7 U.S.C. 2(a)(1)(D)(i)(IV)](/usc/7/2.md?p=a-1-D-i-IV)].
    - (B) The [Commission](/usc/15/78c.md?p=a-15) and the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15) shall jointly publish in the Federal Register a notice of the compliance date no later than 165 days before the compliance date.
    - (C) For purposes of this paragraph, the term “compliance date” means the later of—
      - (i) 180 days after the end of the first full calendar month period in which the average aggregate comparable share volume for all [security futures products](/usc/15/78c.md?p=a-56) based on single [equity securities](/usc/15/78c.md?p=a-11) traded on all national [securities](/usc/15/78c.md?p=a-10) [exchanges](/usc/15/78c.md?p=a-1), any national [securities](/usc/15/78c.md?p=a-10) associations registered pursuant to [section 78o–3(a)](/usc/15/78o–3.md?p=a) of this title, and all other [persons](/usc/15/78c.md?p=a-9) equals or exceeds 10 percent of the average aggregate comparable share volume of options on single [equity securities](/usc/15/78c.md?p=a-11) traded on all national [securities](/usc/15/78c.md?p=a-10) [exchanges](/usc/15/78c.md?p=a-1) and any national [securities](/usc/15/78c.md?p=a-10) associations registered pursuant to [section 78o–3(a)](/usc/15/78o–3.md?p=a) of this title; or
      - (ii) 2 years after the date on which trading in any [security futures product](/usc/15/78c.md?p=a-56) commences under this chapter.
- (i) **Rules to avoid duplicative regulation of dual registrants—** Consistent with this chapter, each national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) registered pursuant to [subsection (a)](#a) of this section shall issue such rules as are necessary to avoid duplicative or conflicting rules applicable to any [broker or dealer](/usc/15/78c.md?p=h-2) registered with the [Commission](/usc/15/78c.md?p=a-15) pursuant to [section 78o(b)](/usc/15/78o.md?p=b) of this title (except paragraph (11) thereof), that is also registered with the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15) pursuant to section 4f(a) of the Commodity Exchange Act [[7 U.S.C. 6f(a)](/usc/7/6f.md?p=a)] (except [paragraph (2)](#i-2) thereof), with respect to the application of—
  - (1) rules of such national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) of the type specified in [section 78o(c)(3)(B)](/usc/15/78o.md?p=c-3-B) of this title involving [security futures products](/usc/15/78c.md?p=a-56); and
  - (2) similar rules of national [securities](/usc/15/78c.md?p=a-10) [exchanges](/usc/15/78c.md?p=a-1) registered pursuant to [subsection (g)](#g) and national [securities](/usc/15/78c.md?p=a-10) associations registered pursuant to [section 78o–3(k)](/usc/15/78o–3.md?p=k) of this title involving [security futures products](/usc/15/78c.md?p=a-56).
- (j) **Procedures and rules for security future products—** A national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) registered pursuant to [subsection (a)](#a) shall implement the procedures specified in [subsection (h)(5)(A)](#h-5-A) and adopt the rules specified in subparagraphs [(B)](#h-5-B) and [(C)](#h-5-C) of subsection (h)(5) not later than 8 months after the date of receipt of a request from an alternative trading system for such implementation and rules.
- (k) **Rules relating to security futures products traded on foreign boards of trade—**
  - (1) To the extent necessary or appropriate in the public interest, to promote fair competition, and consistent with the promotion of market efficiency, innovation, and expansion of investment opportunities, the protection of investors, and the maintenance of fair and orderly markets, the [Commission](/usc/15/78c.md?p=a-15) and the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15) shall jointly issue such rules, regulations, or orders as are necessary and appropriate to permit the offer and sale of a [security futures product](/usc/15/78c.md?p=a-56) traded on or subject to the rules of a foreign [board](/usc/15/78c.md?p=a-73) of trade to United States [persons](/usc/15/78c.md?p=a-9).
  - (2) The rules, regulations, or orders adopted under [paragraph (1)](#k-1) shall take into account, as appropriate, the nature and size of the markets that the [securities](/usc/15/78c.md?p=a-10) underlying the [security futures product](/usc/15/78c.md?p=a-56) reflect.
- (l) **Security-based swaps—** It shall be unlawful for any [person](/usc/15/78c.md?p=a-9) to effect a transaction in a [security-based swap](/usc/15/78c.md?p=a-68-A) with or for a [person](/usc/15/78c.md?p=a-9) that is not an [eligible contract participant](/usc/15/78c.md?p=a-65), unless such transaction is effected on a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) registered pursuant to [subsection (b)](#b).

## Footnotes

[^1]: See References in Text note below.

## Source credit

(June 6, 1934, ch. 404, title I, § 6, 48 Stat. 885; Pub. L. 94–29, § 4, June 4, 1975, 89 Stat. 104; Pub. L. 100–181, title III, §§ 309–312, Dec. 4, 1987, 101 Stat. 1255; Pub. L. 103–202, title III, § 303(b), Dec. 17, 1993, 107 Stat. 2365; Pub. L. 106–554, § 1(a)(5) [title II, §§ 202(a), 206(a), (i), (k)(2), (l)], Dec. 21, 2000, 114 Stat. 2763, 2763A–416, 2763A–426, 2763A–433, 2763A–434; Pub. L. 111–203, title VII, §§ 721(e)(8), 734(b)(2), 763(e), title IX, § 957, July 21, 2010, 124 Stat. 1671, 1718, 1777, 1906.)

## Notes

### Editorial Notes

### References in Text

This chapter, referred to in subsecs. (b) to (e), (g)(4)(A), (h)(3)(G), (7)(C)(ii), and (i), was in the original “this title”. This chapter, referred to in subsec. (h)(6), was in the original “this Act”. See References in Text note set out under section 78a of this title.

The Investment Company Act of 1940, referred to in subsec. (b)(10)(B), is title I of act Aug. 22, 1940, ch. 686, 54 Stat. 789, which is classified generally to subchapter I (§ 80a–1 et seq.) of chapter 2D of this title. For complete classification of this Act to the Code, see section 80a–51 of this title and Tables.

The Commodity Exchange Act, referred to in subsecs. (g)(1)(A) and (h)(6), is act Sept. 21, 1922, ch. 369, 42 Stat. 998, which is classified generally to chapter 1 (§ 1 et seq.) of Title 7, Agriculture. Section 1a(2) of Title 7 was redesignated section 1a(6) by Pub. L. 111–203, title VII, § 721(a)(1), July 21, 2010, 124 Stat. 1658. For complete classification of this Act to the Code, see section 1 of Title 7 and Tables.

Subsection (k) of section 78q of this title, referred to in subsec. (g)(4)(A)(iv), was redesignated subsec. (j) by Pub. L. 111–203, title VI, § 617(a)(2), July 21, 2010, 124 Stat. 1616.

### Amendments

2010—Subsec. (b)(9). Pub. L. 111–203, § 957(1), designated introductory provisions and subpars. (A) to (D) as subpar. (A), redesignated former subpars. (A) to (D) as cls. (i) to (iv), respectively, of subpar. (A) and realigned margins, redesignated former cls. (i) to (v) of subpar. (A) as subcls. (I) to (V), respectively, of cl. (i) and realigned margins, and designated concluding provisions as subpar. (B).

Subsec. (b)(10). Pub. L. 111–203, § 957(2), added par. (10).

Subsec. (g)(1)(A). Pub. L. 111–203, § 734(b)(2), substituted “that has been designated” for “that—(i) has been designated” and “and” for “or” at end and struck out cl. (ii) which read as follows: “is registered as a derivative transaction execution facility under section 5a of the Commodity Exchange Act and such registration is not suspended by the Commodity Futures Trading Commission; and”.

Subsec. (g)(5)(B)(i)(I). Pub. L. 111–203, § 721(e)(8)(A), substituted “section 1a(18)(B)(ii)” for “section 1a(12)(B)(ii)”.

Subsec. (g)(5)(B)(i)(II). Pub. L. 111–203, § 721(e)(8)(B), substituted “section 1a(18)” for “section 1a(12)”.

Subsec. (l). Pub. L. 111–203, § 763(e), added subsec. (l).

2000—Subsec. (g). Pub. L. 106–554, § 1(a)(5) [title II, § 202(a)], added subsec. (g).

Subsec. (h). Pub. L. 106–554, § 1(a)(5) [title II, § 206(a)], added subsec. (h).

Subsec. (i). Pub. L. 106–554, § 1(a)(5) [title II, § 206(i)], added subsec. (i).

Subsec. (j). Pub. L. 106–554, § 1(a)(5) [title II, § 206(k)(2)], added subsec. (j).

Subsec. (k). Pub. L. 106–554, § 1(a)(5) [title II, § 206(l)], added subsec. (k).

1993—Subsec. (b)(9). Pub. L. 103–202 added par. (9).

1987—Subsec. (c)(2). Pub. L. 100–181, § 309, substituted “protection of investors shall” for “protection shall”.

Subsec. (c)(3)(A). Pub. L. 100–181, § 310, substituted “associated” for “association”.

Subsec. (c)(4). Pub. L. 100–181, § 311, substituted “may limit (A)” for “may (A) limit”.

Subsec. (e)(1). Pub. L. 100–181, § 312(1), substituted “paragraph (3) of this subsection” for “paragraph (4) of this section”.

Subsec. (e)(3), (4). Pub. L. 100–181, § 312(2), (3), redesignated par. (4) as (3) and, in subpar. (E), substituted “fixing” for “fixes” in introductory provisions, “subparagraph (A) of this paragraph” for “paragraph (4)(A) of this subsection” in cl. (1), and “subparagraph (B) of this paragraph” for “paragraph (4)(B) of this subsection” in cl. (2), and struck out former par. (3) which read as follows: “Until December 31, 1976, the Commission, on a regular basis, shall file with the Speaker of the House and the President of the Senate information concerning the effect on the public interest, protection of investors, and maintenance of fair and orderly markets of the absence of any schedule or fixed rates of commissions, allowances, discounts, or other fees to be charged by members of any national securities exchange for effecting transactions on such exchange.”

1975—Pub. L. 94–29 restructured the entire section and, in addition, authorized the Commission to require an exchange to file such documents and information as it deems necessary or appropriate in the public interest or for the protection of investors and to prescribe the form and substance of an exchange’s application for registration, expanded to eight the number of explicit statutory requirements that must be satisfied before an exchange may be registered as a national securities exchange, set forth the authority of a national securities exchange to admit or deny persons membership or association with members, prescribed exchange procedures for instituting disciplinary actions, denying membership, and summarily suspending members or persons associated with members, specified the authority of national securities exchanges to impose schedules or fix rates of commissions, allowances, discounts, or other fees to be charged by its members for transacting business on the exchange, and empowered the Commission to regulate any broker or dealer who effects transactions on an exchange on a regular basis but who is not a member of that exchange and any person who effects transactions on an exchange without the services of another person acting as broker.

### Statutory Notes and Related Subsidiaries

### Effective Date of 2010 Amendment

Amendment by section 957 of Pub. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an Effective Date note under section 5301 of Title 12, Banks and Banking.

Amendment by sections 721(e)(8) and 734(b)(2) of Pub. L. 111–203 effective on the later of 360 days after July 21, 2010, or, to the extent a provision of subtitle A (§§ 711–754) 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 A, see section 754 of Pub. L. 111–203, set out as a note under section 1a of Title 7, Agriculture.

Amendment by section 763(e) of Pub. L. 111–203 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 a note under section 77b of this title.

### Effective Date of 1993 Amendment

Pub. L. 103–202, title III, § 304, Dec. 17, 1993, 107 Stat. 2367, provided that:Effective Date.— In general.—The amendments made by section 303 [amending this section and section 78o–3 of this title] shall become effective 12 months after the date of enactment of this Act [Dec. 17, 1993]. Rulemaking authority.—Notwithstanding paragraph (1), the authority of the Securities and Exchange Commission, a registered securities association, and a national securities exchange to commence rulemaking proceedings for the purpose of issuing rules pursuant to the amendments made by section 303 is effective on the date of enactment of this Act. Review of filings prior to effective date.—Prior to the effective date of regulations promulgated pursuant to this title [amending this section and sections 78n and 78o–3 of this title and enacting provisions set out as notes under sections 78a and 78n of this title], the Securities and Exchange Commission shall continue to review and declare effective registration statements and amendments thereto relating to limited partnership rollup transactions in accordance with applicable regulations then in effect. Effect on Existing Authority.—The amendments made by this title [amending this section and sections 78n and 78o–3 of this title] shall not limit the authority of the Securities and Exchange Commission, a registered securities association, or a national securities exchange under any provision of the Securities Exchange Act of 1934 [15 U.S.C. 78a et seq.], or preclude the Commission or such association or exchange from imposing, under any other such provision, a remedy or procedure required to be imposed under such amendments.”

### Effective Date of 1975 Amendment

Amendment by Pub. L. 94–29 effective June 4, 1975, except for amendment of subsecs. (a) through (d) by Pub. L. 94–29 to be effective 180 days after June 4, 1975, with provisions of subsecs. (b)(2) and (c)(6), as amended by Pub. L. 94–29, or rules or regulations thereunder, not to apply in a way so as to deprive any person of membership in any national securities exchange (or its successor) of which such person was, on June 4, 1975, a member or a member firm as defined in the constitution of such exchange, or so as to deny membership in any such exchange (or its successor) to a natural person who is or becomes associated with such member or member firm, see section 31(a) of Pub. L. 94–29, set out as a note under section 78b of this title.

### Changes in Organization and Rules of National Securities Exchanges and Registered Securities Associations

Pub. L. 94–29, § 31(b), June 4, 1975, 89 Stat. 170, provided that: “If it appears to the Commission at any time within one year of the effective date of any amendment made by this Act [see Short Title of 1975 Amendment note under section 78a of this title] to the Securities Exchange Act of 1934 that the organization or rules of any national securities exchange or registered securities association registered with the Commission on the date of enactment of this Act [June 4, 1975] do not comply with such Act as amended, the Commission shall so notify such exchange or association in writing, specifying the respects in which the exchange or association is not in compliance with such Act. On and after the one hundred eightieth day following the date of receipt of such notice by a national securities exchange or registered securities association, the Commission, without regard to the provisions of section 19(h) of the Securities Exchange Act of 1934 [section 78s(h) of this title], as amended by this Act, is authorized by order, to suspend the registration of any such exchange or association or impose limitations on the activities, functions, and operations of any such exchange or association, if the Commission finds, after notice and opportunity for hearing, that the organization or rules of such exchange or association do not comply with such Act. Any such suspension or limitation shall continue in effect until the Commission, by order, declares that such exchange or association is in compliance with such requirements.”

### Executive Documents

### Transfer of Functions

For transfer of functions of Securities and Exchange Commission, with certain exceptions, to Chairman of such Commission, see Reorg. Plan No. 10 of 1950, §§ 1, 2, eff. May 24, 1950, 15 F.R. 3175, 64 Stat. 1265, set out under section 78d of this title.