PUBLIC LAW 106-554—APPENDIX E 114 STAT. 2763A-437 (i) by inserting "or register a derivatives transaction execution facility that trades or executes," after "contract market in,"; (ii) by inserting after "contracts) for future delivery the following: ", and no derivatives transaction execution facility shall trade or execute such contracts of sale (or options on such contracts) for future delivery,; (iii) by striking "making such application demonstrates and the Commission expressly finds that the specific contract (or option on such contract) with respect to which the application has been made meets" and inserting "or the derivatives transaction execution facility, and the applicable contract, meet"; and (iv) 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."; (B) by striking clause (iii); (C) by striking clause (iv) and inserting the following: "(iii) If, in its discretion, the Commission determines that a stock index futures contract, notwithstanding its conformance with the requirements in clause (ii) of this subparagraph, 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)(56) of the Securities Exchange Act of 1934 and section la 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 (D) by redesignating clause (v) as clause (iv). (2) Section 2(a)( 1) of the Commodity Exchange Act (7 U.S.C. 2, 2a, 4) is amended by adding at the end the following: "(D)(i) Notwithstanding any other provision of this Act, the Securities and Exchange Commission shall have jurisdiction and authority over security futures as defined in section 3(a)(55) of the Securities Exchange Act of 1934, section 2(a)(16) of the Securities Act of 1933, section 2(a)(52) of the Investment Company Act of 1940, and section 202(a)(27) of the Investment Advisers Act of 1940, options on security futures, and persons effecting transactions in security futures and options thereon, and this Act shall apply to and the Commission shall have jurisdiction with respect to accounts, agreements (including any transaction which is of the character of, or is commonly known to the trade as, an 'option', 'privilege', 'indemnity', 'bid', 'offer', 'put', 'call', 'advance guaranty', or 'decline guaranty'), contracts, and transactions involving, and may designate a board of trade as a contract market in, or register a derivatives transaction execution facility that trades or executes, a security futures product as defined in section la of this Act: Provided, however, That, except as provided in clause (vi) of this subparagraph, no board of trade shall be designated as a contract market with respect to, or registered as a derivatives transaction execution facility for, any such contracts of sale for future delivery unless the board of trade and the applicable contract meet the following criteria:
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