Rule 36a1-2

Exemption from SIPA for OTC Derivatives Dealers

Preliminary Note: OTC derivatives dealers are a special class of broker- dealers that are exempt from certain broker-dealer requirements, including membership in a self-regulatory organization (Rule 15b9-2), regular broker-dealer margin rules (Rule 36a1-1), and application of the Securities Investor Protection Act of 1970 (Rule 36a1-2). OTC derivative dealers are subject to special requirements, including limitations on the scope of their securities activities (Rule 15a-1), specified internal risk management control systems (Rule 15c3-4), recordkeeping obligations (Rule 17a-3(a)(10)), and reporting responsibilities (Rule 17a-12). They are also subject to alternative net capital treatment (Rule 15c3-1(a)(5)).

OTC derivatives dealers, as defined in Rule 3b-12, shall be exempt from the provisions of the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa through 78lll).