15 USC 78j-2 - Position limits and position accountability for security-based swaps and large trader reporting

U.S Code last checked for updates: Apr 26, 2024

§ 78j–2.

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

(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

(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

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

cite as: 15 USC 78j-2