107 STAT. 484 PUBLIC LAW 103-66—AUG. 10, 1993 "(ii) the security is held by a person other than in connection with its activities as a dealer in securities, or " (iii) the security is improperly identified (within the meaning of subparagraph (A) or (B) of paragraph (2)). "(e) REGULATORY AUTHORITY. —The Secretary shall prescribe such regulations as ma^yr be necessary or appropriate to carry out the purposes of this section, including rules— "(1) to prevent the use of year-end transfers, related parties, or other arrangements to avoid the provisions of this section, and "(2) to provide for the application of this section to any security which is a hedge which cannot be identified with a specific security, position, right to income, or liability.** (b) CONFORMING AMENDMENTS.— 26 USC 988. (1) Paragraph (1) of section 988(d) is amended— (A) by striking "section 1256" and inserting "section 475 or 1256", and (B) by striking "1092 and 1256" and inserting "475, 1092, and 1256". (2) The table of sections for subpart D of part II of subchapter E of chapter 1 is amended by adding at the end thereof the following new item: '^c. 475. Mark to market accounting method for dealers in securities." 26 USC 475 note. (c) EFFECTIVE DATE. — (1) IN GENERAL.— The amendments made by this section shall apply to all taxable years ending on or after December 31, 1993. (2) CHANGE IN METHOD OF ACCOUNTING.— In the case of any taxpayer required by this section to change its method of accounting for any taxaole year— (A) such change shall be treated as initiated by the taxpayer, (B) such change shall be treated as made with the consent of the Secretary, and (C) except as provided in paragraph (3), the net amount of the adjustments required to be taken into account by the taxpayer under section 481 of the Internal Revenue Code of 1986 shall be taken into account ratably over the 5-taxable year period beginning with the first taxable year ending on or after December 31, 1993. (3) SPECIAL RULE FOR FLOOR SPECIAUSTS AND MARKET MAK- ERS.— (A) IN GENERAL. —If— (i) a taxpayer (or any predecessor) used the lastin first-out (LlFO) method of accounting with respect to any qualified securities for the 5-taxable year period ending with its last taxable year ending berore December 31, 1993, and (ii) any portion of the net amount described in paragraph (2)(C) is attributable to the use of such method of accounting, then paragraph (2)(C) shall be applied by taking such portion into account ratably over the 15-taxable year period beginning with the first taxable year ending on or after December 31, 1993.
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