"(a) that has 9 or fewer component securities;

"(b) in which a component security comprises more than 30% of the index's weighting;

"(c) in which the 5 highest weighted component securities in the aggregate comprise more than 60% of the index's weighting; or

"(d) in which any one or combination of securities, in the aggregate, has a dollar value of average daily trading volume of less than $50 million (or in the case of an index with 15 or more component securities, $30 million) and has an aggregate index weight in excess of 25%.

"(a)(i) it has at least 9 component securities;

"(ii) no component security comprises more than 30% of the index's weighting; and

"(iii) each component security is:

"(b) it is a contract of sale for future delivery with respect to which a board of trade was designated as a contract market by the Commodity Futures Trading Commission prior to the date of enactment of the Commodity Futures Modernization Act of 2000; or

"(c)(i) it traded on a designated contract market for at least 30 days as a contract of sale for future delivery that was not a narrow-based security index; and

"(ii) it has been a narrow-based security index for no more than 45 business days over three consecutive calendar months.

"(A) the exchange is a board of trade, as that term is defined by the Commodity Exchange Act (7 U.S.C. 1a(1)), that has been designated a contract market by the Commodity Futures Trading Commission and such designation is not suspended by order of the Commodity Futures Trading Commission; and

"(B) such exchange does not serve as a market place for transactions in securities other than—

"(A) FORM AND CONTENT.—An exchange required to register only because such exchange lists or trades security futures products may register for purposes of this section by filing with the Commission a written notice in such form as the Commission, by rule, may prescribe containing the rules of the exchange and such other information and documents concerning such exchange, required for national securities exchanges under section 6(a), as the Commission, by rule, may prescribe as necessary or appropriate in the public interest or for the protection of investors. If such exchange has filed documents with the Commodity Futures Trading Commission, to the extent that such documents contain information satisfying the Commission's informational requirements, copies of such documents may be filed with the Commission in lieu of the required written notice.

"(B) IMMEDIATE EFFECTIVENESS.—Such registration shall be effective immediately upon filing of the written notice with the Commission, 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.

"(A) TRANSACTION EXEMPTIONS.—An exchange that is registered under paragraph (1) of this subsection shall be exempt from, and shall not be required to enforce compliance by its members with, and its members shall not, solely with respect to those transactions effected on such exchange in security futures products, be required to comply with, the following provisions of this title and the rules thereunder:

"RULE OF CONSTRUCTION.—No inference should be drawn that any section that is not enumerated on this list applies to an exchange registered pursuant to section 6(g) of this title with respect to the trading of security futures products if such section does not apply by its terms.

"(B) RULE CHANGE EXEMPTIONS.—An exchange that is subject to the registration requirement of paragraph (1) of this subsection shall also be exempt from submitting proposed rule changes pursuant to section 19(b) of this title, except that—

"(A) It shall be unlawful for any person to execute or trade a security futures product until the later of—

"(B) Notwithstanding clause (ii) of subparagraph (A), execution of or trading in a security futures product may commence on January 2, 2003, except that, unless the Secretary of the Treasury, in consultation with the Commission and the Commodity Futures Trading Commission certifies that the Federal income tax treatment applicable to the security futures products permitted under this title is equivalent to the Federal income tax treatment of equity options traded on a national securities exchange, it shall be unlawful to—

"(C) It shall be unlawful for a national securities exchange registered pursuant to section 6(g) of this title to begin trading security futures products unless the margin required for such products at the outset of trading are set at the higher of—

"(A) FILING REQUIRED.—A self-regulatory organization that is an exchange registered with the Commission pursuant to section 6(g) of this title or that is a national securities association registered pursuant to section 15A(k) of this title shall file with the Commission, in accordance with such rules as the Commission may prescribe, copies of any proposed rule change or any proposed change in, addition to, or deletion from the rules of such self-regulatory organization (hereinafter in this paragraph collectively referred to as a 'proposed rule change') that relates to higher margin levels, fraud or manipulation, recordkeeping, reporting, listing standards, or decimal pricing for security futures products, sales practices for security futures products for persons who effect transactions in security futures products, or rules effectuating such self-regulatory organization's obligation to enforce the securities laws. Such proposed rule change shall be accompanied by a concise general statement of the basis and purpose of such proposed rule change. The Commission shall, upon the filing of any proposed rule change, publish notice thereof together with the terms of substance of the proposed rule change or a description of the subjects and issues involved. The Commission shall give interested persons an opportunity to submit written data, views, and arguments concerning such proposed rule change.

"(B) FILING WITH CFTC.—A proposed rule change filed with the Commission pursuant to subparagraph (A) shall be filed concurrently with the Commodity Futures Trading Commission. Such proposed rule change may take effect upon filing of a written certification with the Commodity Futures Trading Commission under section 5c(c) of the Commodity Exchange Act, upon a determination by the Commodity Futures Trading Commission that review of the proposed rule change is not necessary, or upon approval of the proposed rule change by the Commodity Futures Trading Commission.

"(C) ABROGATION OF RULE CHANGES.— Any proposed rule change of a self-regulatory organization that has taken effect pursuant to subparagraph (B) may be enforced by such self-regulatory organization to the extent such rule is not inconsistent with the provisions of this title, the rules and regulations thereunder, and applicable Federal law. At any time within 60 days of the date of the filing of a written certification with the Commodity Futures Trading Commission under section 5c(c) of the Commodity Exchange Act, the date the Commodity Futures Trading Commission determines that review of such proposed rule change is not necessary, or the date the Commodity Futures Trading Commission approves such proposed rule change, the Commission, after consultation with the Commodity Futures Trading Commission, summarily may abrogate the proposed rule change and require that the proposed rule change be refiled in accordance with the provisions of paragraph (1), if it appears to the Commission that such proposed rule change unduly burdens competition or efficiency, conflicts with the securities laws, or is inconsistent with the public interest and the protection of investors. Commission action pursuant to the preceding sentence shall not affect the validity or force of the rule change during the period it was in effect and shall not be reviewable under section 25 nor deemed to be a final agency action for purposes of section 704 of title 5, United States Code.

"(D) REVIEW OF RESUBMITTED ABRO- GATED RULES.—

"(i) PROCEEDINGS.—Within 35 days of the date of publication of notice of the filing of a proposed rule change that is abrogated in accordance with subparagraph (C) and refiled in accordance with paragraph (1), or within such longer period as the Commission may designate up to 90 days after such date if the Commission finds such longer period to be appropriate and publishes its reasons for so finding or as to which the self-regulatory organization consents, the Commission shall—

"(A) CONSULTATION REQUIRED.—The Commission shall consult with and consider the views of the Commodity Futures Trading Commission prior to approving a proposed rule change filed by a national securities association registered pursuant to section 15A(a) or a national securities exchange subject to the provisions of subsection (a) that primarily concerns conduct related to transactions in security futures products, except where the Commission determines that an emergency exists requiring expeditious or summary action and publishes its reasons therefor.

"(B) RESPONSES TO CFTC COMMENTS AND FINDINGS.—If the Commodity Futures Trading Commission comments in writing to the Commission on a proposed rule that has been published for comment, the Commission shall respond in writing to such written comment before approving the proposed rule. If the Commodity Futures Trading Commission determines, and notifies the Commission, that such rule, if implemented or as applied, would—

"(i) Section 8.

"(ii) Section 11.

"(iii) Subsections (c)(3) and (c)(5) of this section.

"(iv) Section 15B.

"(v) Section 15C.

"(vi) Subsections (d), (e), (f), (g), (h), and (i) of section 17.

"(A) REGISTRATION EXEMPTION.—A natural person shall be exempt from the registration requirements of this section if such person—

"(i) Section 8.

"(ii) Section 11.

"(iii) Subsections (c)(3), (c)(5), and (e) of this section.

"(iv) Section 15B.

"(v) Section 15C.

"(vi) Subsections (d), (e), (f), (g), (h), and (i) of section 17.

"(A) be so organized and have the capacity to carry out the purposes of the securities laws applicable to security futures products and to comply, and (subject to any rule or order of the Commission pursuant to section 19(g)(2)) to enforce compliance by its members and persons associated with its members, with the provisions of the securities laws applicable to security futures products, the rules and regulations thereunder, and its rules;

"(B) have rules that—

"(C) have rules that provide that (subject to any rule or order of the Commission pursuant to section 19(g)(2)) its members and persons associated with its members shall be appropriately disciplined for violation of any provision of the securities laws applicable to security futures products, the rules or regulations thereunder, or the rules of the association, by expulsion, suspension, limitation of activities, functions, and operations, fine, censure, being suspended or barred from being associated with a member, or any other fitting sanction; and

"(D) have rules that ensure that members and natural persons associated with members meet such standards of training, experience, and competence necessary to effect transactions in security futures products and are tested for their knowledge of securities and security futures products.

"(A) the association shall file proposed rule changes related to higher margin levels, fraud or manipulation, recordkeeping, reporting, listing standards, or decimal pricing for security futures products, sales practices for, advertising of, or standards of training, experience, competence, or other qualifications for security futures products for persons who effect transactions in security futures products, or rules effectuating the association's obligation to enforce the securities laws pursuant to section 19(b)(7);

"(B) the association shall file pursuant to sections 19(b)(1) and 19(b)(2) proposed rule changes related to margin, except for changes resulting in higher margin levels; and

"(C) the association shall file pursuant to section 19(b)(1) proposed rule changes that have been abrogated by the Commission pursuant to section 19(b)(7)(C).

"(A) Section 8

"(B) Subsections (b)(1), (b)(3), (b)(4), (b)(5), (b)(8), (b)(10), (b)(11), (b)(12), (b)(13), (c), (d), (e), (f), (g), (h), and (i) of this section.

"(C) Subsections (d), (f), and (k) of section 17.

"(D) Subsections (a), (f), and (h) of section 19.

(A) in clause (i), by striking "and" after the semicolon;

(B) in clause (ii), by striking the period and inserting "; and";

(C) by adding at the end the following:

"(A) registered clearing agency, registered transfer agent, or registered municipal securities dealer for which it is not the appropriate regulatory agency, gives notice to the appropriate regulatory agency for such clearing agency, transfer agent, or municipal securities dealer, of such proposed examination and consults with the appropriate regulatory agency concerning the feasibility and desirability of coordinating such examinations conducted by the appropriate regulatory agency with a view to avoiding unnecessary regulatory duplication or undue regulatory burdens for such clearing agency, transfer agent, or municipal securities dealer; or

"(B) broker or dealer registered pursuant to section 15(b)(11), exchange registered pursuant to section 6(g), or national securities association registered pursuant to section 15A(k) gives notice to the Commodity Futures Trading Commission of such proposed examination and consults with the Commodity Futures Trading Commission concerning the feasibility and desirability of coordinating such examination with examinations conducted by the Commodity Futures Trading Commission with a view to avoiding unnecessary regulatory duplication or undue regulatory burdens for such broker or dealer or exchange.

"(A) Notwithstanding any other provision of this subsection, the records of a broker or dealer registered pursuant to section 15(b)(11), an exchange registered pursuant to section 6(g), or a national securities association registered pursuant to section 15A(k) described in this subparagraph shall not be subject to routine periodic examinations by the Commission.

"(B) Any recordkeeping rules adopted under this subsection for a broker or dealer registered pursuant to section 15(b)(11), an exchange registered pursuant to section 6(g), or a national securities association registered pursuant to section 15A(k) shall be limited to records with respect to persons, accounts, agreements, and transactions involving security futures products.

"(C) Nothing in this subsection shall be construed to impair or limit (other than by the requirement of prior consultation and the requirement in subparagraph (A)) the power of the Commission under this subsection to examine any clearing agency, transfer agent, or municipal securities dealer, broker or dealer registered pursuant to section 15(b)(11), exchange registered pursuant to section 6(g), or national securities association registered pursuant to section 15A(k), or to affect in any way the power of the Commission under any other provision of this title or otherwise to inspect, examine, or investigate any clearing agency, transfer agent, or municipal securities dealer, broker or dealer registered pursuant to section 15(b)(11), exchange registered pursuant to section 6(g), or national securities association registered pursuant to section 15A(k).".

(i) by inserting "(A)" after "acquires"; and

(ii) by striking "; or" and inserting ", or (B) any security futures product on the security; or";

(i) by inserting "(A)" after "interest in any"; and

(ii) by striking "; or" and inserting ", or (B) such security futures product; or"; and

(i) by inserting "(A)" after "interest in any"; and

(ii) by inserting ", or (B) such security futures product" after "privilege".

(A) by inserting "(1)" after "(g)";

(B) by inserting "other than a security futures product" after "future delivery"; and

(C) by adding at the end following:

"(A) except as otherwise provided in a rule, regulation, or order issued pursuant to paragraph (4), require that any security underlying the security future, including each component security of a narrow-based security index, be registered pursuant to section 12 of this title;

"(B) require that if the security futures product is not cash settled, the market on which the security futures product is traded have arrangements in place with a registered clearing agency for the payment and delivery of the securities underlying the security futures product;

"(C) be no less restrictive than comparable listing standards for options traded on a national securities exchange or national securities association registered pursuant to section 15A(a) of this title;

"(D) except as otherwise provided in a rule, regulation, or order issued pursuant to paragraph (4), require that the security future be based upon common stock and such other equity securities as the Commission and the Commodity Futures Trading Commission jointly determine appropriate;

"(E) require that the security futures product is cleared by a clearing agency that has in place provisions for linked and coordinated clearing with other clearing agencies that clear security futures products, which permits the security futures product to be purchased on a national securities exchange or national securities association registered pursuant to section 15A(a) and offset on another national securities exchange or national securities association registered pursuant to section 15A(a);

"(F) require that only a broker or dealer subject to suitability rules comparable to those of a national securities association registered pursuant to section 15A(a) effect transactions in the security futures product;

"(G) require that the security futures product be subject to the prohibition against dual trading in section 4j of the Commodity Exchange Act (7 U.S.C. 6j) and the rules and regulations thereunder or the provisions of section 11(a) of this title and the rules and regulations thereunder, except to the extent otherwise permitted under this title and the rules and regulations thereunder;

"(H) require that trading in the security futures product not be readily susceptible to manipulation of the price of such security futures product, nor to causing or being used in the manipulation of the price of any underlying security, option on such security, or option on a group or index including such securities;

"(I) require that procedures be in place for coordinated surveillance among the market on which the security futures product is traded, any market on which any security underlying the security futures product is traded, and other markets on which any related security is traded to detect manipulation and insider trading;

"(J) require that the market on which the security futures product is traded has in place audit trails necessary or appropriate to facilitate the coordinated surveillance required in subparagraph (I);

"(K) require that the market on which the security futures product is traded has in place procedures to coordinate trading halts between such market and any market on which any security underlying the security futures product is traded and other markets on which any related security is traded; and

"(L) require that the margin requirements for a security futures product be consistent with the margin requirements for comparable option contracts traded on an exchange registered pursuant to section 6(a) of this title, except that nothing in this subparagraph shall be construed to prevent a national securities exchange or national securities association from requiring higher margin levels for a security futures product when it deems such action to be necessary or appropriate.

"(A) The Commission and the Commodity Futures Trading Commission, by rule, regulation, or order, may jointly modify the listing standard requirements specified in subparagraph (A) or (D) of paragraph (3) to the extent such modification fosters the development of fair and orderly markets in security futures products, is necessary or appropriate in the public interest, and is consistent with the protection of investors.

"(B) AUTHORITY TO GRANT EXEMPTIONS.—The Commission and the Commodity Futures Trading Commission, by order, may jointly exempt any person from compliance with the listing standard requirement specified in subparagraph (E) of paragraph (3) to the extent such exemption fosters the development of fair and orderly markets in security futures products, is necessary or appropriate in the public interest, and is consistent with the protection of investors.

"(A) Notwithstanding paragraph (2), until the compliance date, a national securities exchange or national securities association registered pursuant to section 15A(a) may trade a security futures product that does not—

"(B) The Commission and the Commodity Futures Trading Commission 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—

"(A) Three years after the date on which trading in any security futures product commences under this title, the Commission and the Commodity Futures Trading Commission shall jointly determine whether, based on their experience in overseeing the trading of such products, it is necessary or appropriate in the public interest or to remove unnecessary burdens on competition, and consistent with the protection of investors, to permit any organization, association, or group of persons that is registered as a broker or dealer pursuant to section 15(b) of this title (except paragraph (11) thereof) and that performs the functions commonly performed by an exchange, to trade security futures products.

"(B) If, pursuant to subparagraph (A), the Commission and the Commodity Futures Trading Commission determine to permit any organization, association, or group of persons that is registered as a broker or dealer pursuant to section 15(b) of this title (except paragraph (11) thereof) and that performs the functions commonly performed by an exchange, to trade security futures products, the Commission, by rule, as it deems necessary or appropriate in the public interest and for the protection of investors or to maintain fair and orderly markets, may require any organization, association, or group of persons not otherwise required to register under section 6(a) of this title to comply with any provision of this title (other than section 6(a)) or the rules or regulations thereunder which by its terms regulates or prohibits any act, practice, or course of business by a national securities exchange or a national securities association trading security futures products.".

"(A) COMPLIANCE WITH MARGIN RULES REQUIRED.—It shall be unlawful for any broker, dealer, or member of a national securities exchange to, directly or indirectly, extend or maintain credit to or for, or collect margin from any customer on, any security futures product unless such activities comply with the rules and regulations which the Commission and the Commodity Futures Trading Commission shall jointly prescribe pursuant to subparagraph (B).

"(B) CRITERIA FOR ISSUANCE OF RULES.—The Commission and the Commodity Futures Trading Commission shall jointly issue such regulations to establish margin requirements, including the establishment of levels of margin (initial and maintenance) and use of collateral for security futures products under such terms, and at such levels, as the Commission and the Commodity Futures Trading Commission jointly deem appropriate—

"(i) to preserve the financial integrity of markets trading security futures products;

"(ii) to prevent systemic risk;

"(iii) to make consistent the margin levels (initial and maintenance) and other margin requirements between security futures products and comparable options contracts traded on a national securities exchange; and

"(iv) to ensure that the margin requirements (other than levels of margin), including the type, form, and use of collateral for security futures products, are and remain consistent with the requirements established by the Federal Reserve Board, pursuant to subparagraphs (A) and (B) of paragraph (1).".

(A) in paragraph (1), by inserting after subparagraph (D) the following:

(A) in paragraph (3)(A), by inserting "and derivative agreements, contracts, and transactions" after "prompt and accurate clearance and settlement of securities transactions";

(B) in paragraph (3)(F), by inserting "and, to the extent applicable, derivative agreements, contracts, and transactions" after "designed to promote the prompt and accurate clearance and settlement of securities transactions"; and

(C) by inserting after paragraph (7), as added by section 206(d), the following:

"(A) cleared by a clearing agency registered under section 17A of the Securities Exchange Act of 1934 or exempt from registration under subsection (b)(7) of such section 17A; and

"(B) traded on a national securities exchange or a national securities association registered pursuant to section 15A(a) of the Securities Exchange Act of 1934.".

(1) by striking "or" at the end of paragraph (4);

(2) by striking the period at the end of paragraph (5) and inserting "; or"; and

(3) by adding at the end the following:

(A) by striking subclause (III) of clause (ii) and inserting the following:

"(III) Such group or index of securities shall not constitute a narrow-based security index."; and

(B) by striking clause (iv) and inserting the following:

"(iv) If, in its discretion, the Commission determines that a stock index futures contract, notwithstanding its conformance with the requirements in clause (ii) of subparagraph (C), can reasonably be used as a surrogate for trading a security (including a security futures product), it may, by order, require such contract and any option thereon be traded and regulated as security futures products as defined in section 3(a)(55) of the Securities Exchange Act of 1934 and section 1a(32) of this Act subject to all rules and regulations applicable to security futures products under this Act and the securities laws as defined in section 3(a)(47) of the Securities Exchange Act of 1934."; and

"(I) Except as otherwise provided in a rule, regulation, or order issued pursuant to clause (vi) of this subparagraph, any security underlying the security future, including each component security of a narrow-based security index, is registered pursuant to section 12 of the Securities Exchange Act of 1934.

"(II) If the security futures product is not cash settled, the board of trade on which the security futures product is traded has arrangements in place with a clearing agency registered pursuant to section 17A of the Securities Exchange Act of 1934 for the payment and delivery of the securities underlying the security futures product.

"(III) The security futures product is not traded on an exempt board of trade or a designated transaction execution facility.

"(IV) Except as otherwise provided in a rule, regulation, or order issued pursuant to clause (vi) of this subparagraph, the security future is based upon common stock and such other equity securities as the Commission and the Securities and Exchange Commission jointly determine appropriate.

"(V) The security futures product is cleared by a clearing agency that has in place provisions for linked and coordinated clearing with other clearing agencies that clear security futures products, which permits the security futures product to be purchased on a designated contract market, national securities exchange registered under section 6(a) of the Securities Exchange Act of 1934, or national securities association registered pursuant to section 15A(a) of the Securities Exchange Act of 1934 and offset on another designated contract market, national securities exchange registered under section 6(a) of the Securities Exchange Act of 1934, or national securities association registered pursuant to section 15A(a) of the Securities Exchange Act of 1934.

"(VI) Only futures commission merchants, introducing brokers, commodity trading advisors, commodity pool operators or associated persons subject to suitability rules comparable to those of a national securities association registered pursuant to section 15A(a) of the Securities Exchange Act of 1934 solicit, accept any order for, or otherwise deal in any transaction in or in connection with a security futures product.

"(VII) The security futures product is subject to a prohibition against dual trading in section 4j of this Act and the rules and regulations thereunder or the provisions of section 11(a) of the Securities Exchange Act of 1934 and the rules and regulations thereunder, except to the extent otherwise permitted under the Securities Exchange Act of 1934 and the rules and regulations thereunder.

"(VIII) Trading in the security futures product is not readily susceptible to manipulation of the price of such security futures product, nor to causing or being used in the manipulation of the price of any underlying security, option on such security, or option on a group or index including such securities;

"(IX) The board of trade on which the security futures product is traded has procedures in place for coordinated surveillance among such board of trade, any market on which any security underlying the security futures product is traded, and other markets on which any related security is traded to detect manipulation and insider trading.

"(X) The board of trade on which the security futures product is traded has in place audit trails necessary or appropriate to facilitate the coordinated surveillance required in subclause (IX).

"(XI) The board of trade on which the security futures product is traded has in place procedures to coordinate trading halts between such board of trade and markets on which any security underlying the security futures product is traded and other markets on which any related security is traded.

"(XII) The margin requirements for a security futures product are consistent with the margin requirements for comparable option contracts traded on an exchange registered pursuant to section 6(a) of the Securities Exchange Act of 1934, except that nothing in this subclause shall be construed to prevent a board of trade from requiring higher margin levels for a security futures product when it deems such action to be necessary or appropriate.

"(I) such transaction is conducted on or subject to the rules of a board of trade which has been designated by the Commission as a contract market in such security futures product;

"(II) such contract is executed or consummated by, through, or with a member of such contract market; and

"(III) such security futures product is evidenced by a record in writing which shows the date, the parties to such security futures product and their addresses, the property covered and its price: Provided, That each contract market member shall keep such record for a period of 3 years from the date thereof, or for a longer period if the Commission so directs, which record shall at all times be open to the inspection of any representative of the Commission, the Securities and Exchange Commission or the Department of Justice.

"(A) Any records required under this subsection for a futures commission merchant or introducing broker registered pursuant to section 4f(a)(2), floor broker or floor trader exempt from registration pursuant to section 4f(a)(3), associated person exempt from registration pursuant to section 4k(6), or board of trade designated as a contract market in a security futures product pursuant to section 5f, shall be limited to records with respect to accounts, agreements, and transactions involving security futures products.

"(B) Nothing in this subsection shall be construed to impair or limit (other than by the requirement of prior consultation) the power of the Commission under this subsection to examine any futures commission merchant or introducing broker registered pursuant to section 4f(a)(2), floor broker or floor trader exempt from registration pursuant to section 4f(a)(3), associated person exempt from registration pursuant to section 4k(6), or board of trade designated as a contract market in a security futures product pursuant to section 5f, or to affect in any way the power of the Commission under any other provision of this Act.

"(A) 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 based on single equity securities traded on all designated contract markets equals or exceeds 10% of the average aggregate comparable share volume of options on single equity securities traded on all national securities exchanges registered pursuant to section 6(a) of the Securities Exchange Act of 1934 and any national securities associations registered pursuant to section 15A(a) of the Securities Exchange Act of 1934; or

"(B) two years after the date on which trading in any security futures product commences under this Act.".

"(vi)(I) Notwithstanding any other provision of this Act, any contract market in a stock index futures contract (or option thereon), other than a security futures product, shall file with the Board of Governors of the Federal Reserve System any rule establishing or changing the levels of margin (initial and maintenance) for such stock index futures contract (or option thereon), other than security futures products.

"(II) The Board may at any time request any contract market to set the margin for any stock index futures contract (or option thereon), other than for any security futures product, at such levels as the Board in its judgment determines are appropriate to preserve the financial integrity of the contract market or its clearing system or to prevent systemic risk. If the contract market fails to do so within the time specified by the Board in its request, the Board may direct the contract market to alter or supplement the rules of the contract market as specified in the request.

"(III) Subject to such conditions as the Board may determine, the Board may delegate any or all of its authority, relating to margin for any stock index futures contract (or option thereon), other than security futures products, under this clause to the Commission.

"(IV) REGULATIONS.—It shall be unlawful for any futures commission merchant to, directly or indirectly, extend or maintain credit to or for, or collect margin from any customer on any security futures product unless such activities comply with the rules and regulations which the Commission and the Securities and Exchange Commission shall jointly prescribe pursuant to section 7(c)(2)(B) of the Securities Exchange Act of 1934.

"(V) Nothing in this clause shall supersede or limit the authority granted to the Commission in section 8a(9) to direct a contract market, on finding an emergency to exist, to raise temporary margin levels on any futures contract, or option on the contract covered by this clause, or on any security futures product.".

"(A) exceptions for spread transactions and the correction of trading errors;

"(B) allowance for a customer to designate in writing not less than once annually a named floor broker to execute orders for such customer, notwithstanding the regulations to prohibit the privilege of dual trading required under this section; and

"(C) other measures reasonably designed to accommodate unique or special characteristics of individual boards of trade or contract markets, to address emergency or unusual market conditions, or otherwise to that further the public interest consistent with the purposes of this section.

"(iii) Subsections (b) and (c) of this section.

"(iv) Section 4j.

"(v) Section 4k(1).