S.D. Admin. R. 20:06:20:01

Current through Register Vol. 50, page 159, June 17, 2024

Section 20:06:20:01 - Definitions

Terms used in this chapter mean:

(1) "Commodity futures trading commission," the federal regulatory agency charged under the Commodity Futures Trading Commission Act of 1974 (7 U.S.C. 1 et seq.) with the regulation of exchanges;

(2) "Deferred gains or losses," the unrecognized increase or decrease in the value of financial futures contracts resulting from uncompleted hedging transactions or terminated financial futures contracts;

(3) "Exchange-traded," traded on an exchange designated as a contract market regulated by the commodity futures trading commission;

(4) "Financial futures contract," an exchange-traded contract to purchase or deliver a specified amount of financial instruments on a specified date;

(5) "Financial instrument," a security, currency, or index of a group of securities or currencies authorized or permitted under SDCL 58-27-9 to 58-27-19, inclusive, 58-27-28, 58-27-29, 58-27-32, 58-27-36, and 58-27-37;

(6) "Hedge," the positioning of a hedged item with one or more hedging transactions for the purpose of reducing an existing risk;

(7) "Hedged item," a company asset or liability, group of company assets or liabilities, or assets or liabilities or groups of assets or liabilities reasonably expected to be acquired or incurred by a company in the normal course of business. The assets or liabilities must bear price or interest rate risks;

(8) "Hedging transaction," the opening or closing, as may be adjusted from time to time, of one or more financial futures contracts reasonably expected to reduce the price or interest rate risk of a hedged item;

(9) "Margin," cash or securities required for deposit with a futures commission merchant, clearinghouse, or safekeeping agent to ensure performance of the terms of the financial futures contract, including maintenance margins, initial deposits to guarantee performance of the contract terms, and variance margins, subsequent deposits required as the market value of the contract fluctuates.

S.D. Admin. R. 20:06:20:01

13 SDR 75, effective 12/21/1986.

General Authority: SDCL 58-4-1, 58-27-7.

Law Implemented: SDCL 58-27-7.