Section 260.004 - Certification of Exchanges(a) Any exchange that desires to be certified as excluded from the definition of a "broker-dealer" pursuant to subdivision (a)(7) of Section 25004 of the Code shall file a written request for certification with the Commissioner. In addition to the most recent audited financial statement of the exchange, the request shall include the provisions of the governing documents of the exchange regarding the following:(1) the rights and obligations imposed upon holders and writers of options;(2) the requirements for approval of underlying stock and the issuers thereof;(3) the limitations on the number of options covering a given stock which may be exercised by a holder or group of holders within a specified period;(4) the limitations imposed upon the number of options which may be written, held or exercised by a single writer or investor, or group of investors;(5) the restrictions on trading in options upon the occurrence of specified conditions;(6) the requirements imposed upon members of the exchange, including net capital requirements, margin requirements applicable to accounts of member firms and their customers and recordkeeping requirements;(7) the requirements imposed upon exchange members regarding the approval of a prospective customer's account, including information required as to the customer's investment objectives, financial status and needs; and(8) the procedures for the suspension of members.(b) To the extent that the matters specified in subsection (a) are set forth in an application for registration under the Securities Act of 1933 and/or in a filing pursuant to Rule 19b-4 under the Securities Exchange Act of 1934, a copy of that filing should be filed in fulfilling the requirement of this section.Cal. Code Regs. Tit. 10, § 260.004
1. New section filed 12-31-74 as an emergency; designated effective 1-1-75 (Register 75, No. 1).
2. Certificate of Compliance filed 4-29-75 (Register 75, No. 18).
3. Amendment filed 5-6-75; effective thirtieth day thereafter (Register 75, No. 19).
4. Editorial correction of NOTE filed 3-9-83 (Register 83, No. 11).
5. Amendment of subsections (a) and (b) filed 9-24-2009; operative 10-24-2009 (Register 2009, No. 39). Note: Authority cited: Section 25610, Corporations Code. Reference: Sections 25004 and 25210, Corporations Code.
1. New section filed 12-31-74 as an emergency; designated effective 1-1-75 (Register 75, No. 1).
2. Certificate of Compliance filed 4-29-75 (Register 75, No. 18).
3. Amendment filed 5-6-75; effective thirtieth day thereafter (Register 75, No. 19).
4. Editorial correction of NOTE filed 3-9-83 (Register 83, No. 11).
5. Amendment of subsections (a) and (b) filed 9-24-2009; operative 10-24-2009 (Register 2009, No. 39).