<html> <head> <title>Rule 20:06:19:01 Definitions.</title> <META NAME="Keywords" Content="Administrative Rules 20:06:19:01"> <META NAME="Description" Content="Administrative Rules 20:06:19:01 Definitions."> <meta name=Generator content="Microsoft Office HTML Filter 2.0"> <meta http-equiv=Content-Type content="text/html; charset=windows-1252"> <meta name=Originator content="Microsoft Word 10"> <style> <!-- --> </style> </head> <body lang=EN-US> <div> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>20:06:19:01.</b><b>Definitions.&nbsp;&nbsp;</b>Terms used in this chapter mean:</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (1)&nbsp;&nbsp;&quot;Call option,&quot; an exchange-traded option contract granting the holder of the option the right to purchase a specified amount of the underlying security in accordance with the terms of the option contract;</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (2)&nbsp;&nbsp;&quot;Put option,&quot; an exchange-traded option contract granting the holder of the option the right to sell a specified amount of the underlying security in accordance with the terms of the option;</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (3)&nbsp;&nbsp;&quot;Closing purchase transaction,&quot; the purchase of an exchange-traded call or put option to reduce or eliminate the obligations of a call or put option writer on an option contract or contracts previously sold;</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (4)&nbsp;&nbsp;&quot;Closing sale transaction,&quot; the sale of an exchange-traded call or put option to reduce or eliminate the obligations of a call or put option purchase on an option contract or contracts previously purchased;</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (5)&nbsp;&nbsp;&quot;Escrowed securities,&quot; securities owned by an insurance company subject to a custodial agreement;</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (6)&nbsp;&nbsp;&quot;Exchange-traded,&quot; securities traded on the floor of a national securities exchange registered under the Securities Exchange Act of 1934 (15 U.S.C. 78(a) et seq.) that has been authorized to provide a market for option contracts pursuant to Rule 9b-1 of the Securities Exchange Act of 1934, as amended through October 13, 1982;</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (7)&nbsp;&nbsp;&quot;Guaranteed funds,&quot; cash or cash equivalents, as defined pursuant to Federal Reserve Regulation T in 12 C.F.R. section 220.1, et seq., as amended through June 26, 1985, owned by an insurance company on which a guarantee letter has been issued;</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (8)&nbsp;&nbsp;&quot;Underlying security,&quot; a stock, debt instrument, or index of a group of securities authorized or permitted under SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-27-9">58-27-9</A> to 58-27-19, inclusive, 58-27-21 to 58-27-26, inclusive, 58-27-28, 58-27-29, 58-27-32, 58-27-36, and 58-27-37 on which options are traded in a registered national securities exchange.</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Source:</b> 13 SDR 75, effective December 21, 1986.</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>General Authority:</b> SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-4-1">58-4-1</A>, <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-27-7">58-27-7.</A></p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Law Implemented:</b> SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-27-7">58-27-7.</A></p> </div> </body> </html>