923 F.2d 1270 (1991)
A system for trading options on federal government securities put together by a broker, a clearing agency, and a bank filed an application with respondent Securities and Exchange Commission to register as a clearing agency under the Securities and Exchange Act of 1934,15 U.S.C.S. § 78q-1(b). Respondent thought it unnecessary to decide whether the system was an exchange under the Act, 18 U.S.C.S. § 78c(a)(1) requiring registration.
- The appellate court held respondent could not approve the application without deciding the issue and remanded.
- Respondent held it was not an exchange and adhered to its decision to register it as a clearing house.
- Petitioner trading house sought review, arguing that since the system created an electronic marketplace for securities traders, no more was required to establish that it had to register as an exchange.
- The appellate court affirmed and held the Act was broadly worded and respondent had discretion to interpret it.
- The court ruled the system could not register as an exchange because 15 U.S.C.S. §§ 78f(b)(3) required an exchange to be controlled by its participants, who were to be registered brokers or individuals associated with them.
The decision of respondent Securities and Exchange Commission was affirmed. The court held that the system for trading options on federal government securities put together by a broker, a clearing agency, and a bank, could not register as an exchange because the Securities and Exchange Act of 1934 required that an exchange be controlled by its participants, who had to be registered brokers or individuals associated with such brokers.
Suggested Study Aids For Securities Regulation Law
Securities Regulation in a Nutshell, 10th (Nutshell Series)
Securities Regulation: Examples & Explanations, 5th Edition
Securities Regulations: The Essentials