security-based swap

(68) Security-based swap.— (A) In general .— Except as provided in subparagraph (B), the term “security-based swap” means any agreement, contract, or transaction that— (i) is a swap, as that term is defined under section 1a of the Commodity Exchange Act [ 7 U.S.C. 1a ] (without regard to paragraph (47)(B)(x) of such section); and (ii) is based on— (I) an index that is a narrow-based security index, including any interest therein or on the value thereof; (II) a single security or loan, including any interest therein or on the value thereof; or (III) the occurrence, nonoccurrence, or extent of the occurrence of an event relating to a single issuer of a security or the issuers of securities in a narrow-based security index, provided that such event directly affects the financial statements, financial condition, or financial obligations of the issuer. (B) Rule of construction regarding master agreements .— The term “security-based swap” shall be construed to include a master agreement that provides for an agreement, contract, or transaction that is a security-based swap pursuant to subparagraph (A), together with all supplements to any such master agreement, without regard to whether the master agreement contains an agreement, contract, or transaction that is not a security-based swap pursuant to subparagraph (A), except that the master agreement shall be considered to be a security-based swap only with respect to each agreement, contract, or transaction under the master agreement that is a security-based swap pursuant to subparagraph (A). (C) Exclusions .— The term “security-based swap” does not include any agreement, contract, or transaction that meets the definition of a security-based swap only because such agreement, contract, or transaction references, is based upon, or settles through the transfer, delivery, or receipt of an exempted security under paragraph (12), as in effect on January 11, 1983 (other than any municipal security as defined in paragraph (29) as in effect on January 11, 1983 ), unless such agreement, contract, or transaction is of the character of, or is commonly known in the trade as, a put, call, or other option. (D) Mixed swap .— The term “security-based swap” includes any agreement, contract, or transaction that is as described in subparagraph (A) and also is based on the value of 1 or more interest or other rates, currencies, commodities, instruments of indebtedness, indices, quantitative measures, other financial or economic interest or property of any kind (other than a single security or a narrow-based security index), or the occurrence, non-occurrence, or the extent of the occurrence of an event or contingency associated with a potential financial, economic, or commercial consequence (other than an event described in subparagraph (A)(ii)(III)). (E) Rule of construction regarding use of the term index .— The term “index” means an index or group of securities, including any interest therein or based on the value thereof.

Source

15 USC § 78c(a)(68)


Scoping language

When used in this chapter
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