Rev. Rul. 86-7

1986-1 C.B. 295, 1986-4 I.R.B. 6.

REGULATED FUTURES CONTRACTS: QUALIFIED BOARD OR EXCHANGE

Published: January 27, 1986

Section 1256.-Section 1256 Contracts Marked to Market

  Regulated futures contracts: qualified board or exchange. The Mercantile Division of the Montreal Exchange is a qualified board or exchange for purposes of section 1256 of the Code.

ISSUE

  Whether the Mercantile Division of the Montreal Exchange is a qualified board or exchange within the meaning of section 1256(g)(7)(C) of the Internal Revenue Code.

LAW

  Section 1256(g)(7) of the Code provides that the term 'qualified board or exchange' means:

  (A) a national securities exchange which is registered with the Securities and Exchange Commission,

  (B) a domestic board of trade designated as a contract market by the Commodity Futures Trading Commission, or

  (C) any other exchange, board of trade, or other market which the Secretary determines has rules adequate to carry out the purposes of this section.

HOLDING

  The Internal Revenue Service has determined that the Mercantile Division of the Montreal Exchange is a qualified board or exchange within the meaning of section 1256(g)(7)(C) of the Code.

  REGULATED FUTURES CONTRACTS; NONEQUITY OPTION. An optionon the High Technology Index of the Pacific Stock Exchange is a nonequity option for purposes of section 1256 of the Code.