[Federal Register Volume 61, Number 15 (Tuesday, January 23, 1996)]
[Rules and Regulations]
[Pages 1709-1711]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-754]
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COMMODITY FUTURES TRADING COMMISSION
17 CFR Part 30
Foreign Option Transactions
AGENCY: Commodity Futures Trading Commission.
ACTION: Order.
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SUMMARY: The Commodity Futures Trading Commission (Commission) is
authorizing option contracts on the Nikkei 300 stock index futures
contract traded on the Singapore International Monetary Exchange
Limited (SIMEX) to be offered or sold to persons located in the United
States. This Order is issued pursuant to: (1) Commission rule 30.3(a),
17 CFR 30.3(a), which makes it unlawful for any person to engage in the
offer or sale of a foreign option product until the Commission, by
order, authorizes such foreign option to be offered or sold in the
United States; and (2) the Commission's Order issued on July 20, 1988,
53 FR 28826 (July 29, 1988), authorizing certain option products traded
on SIMEX to be offered or sold in the United States.
EFFECTIVE DATE: February 22, 1996.
FOR FURTHER INFORMATION CONTACT:
Robert Rosenfeld, Esq., Division of Trading and Markets, Commodity
Futures Trading Commission, 2033 K Street NW., Washington, DC 20581.
Telephone: (202) 254-8955.
SUPPLEMENTARY INFORMATION: The Commission has issued the following
Order:
United States of America Before the Commodity Futures Trading
Commission
Order Under Commission Rule 30.3(a) Permitting Option Contracts on the
Nikkei 300 Stock Index Futures Contract Traded on the Singapore
International Monetary Exchange Limited To Be Offered or Sold in the
United States Thirty Days After Publication of This Notice in the
Federal Register Absent Further Notice
By Order issued on July 20, 1988 (Initial Order), the Commission
authorized, pursuant to Commission rule 30.3(a),\1\ certain option
products
[[Page 1710]]
traded on the Singapore International Monetary Exchange Limited (SIMEX)
to be offered or sold in the United States. 53 FR 28826 (July 29,
1988). Among other conditions, the Initial Order specified that:
\1\ Commission rule 30.3(a), 17 CFR 30.3(a), makes it unlawful
for any person to engage in the offer or sale of a foreign option
product until the Commission, by order, authorizes such foreign
option to be offered or sold in the United States.
Except as otherwise permitted under the Commodity Exchange Act
and regulations thereunder, * * * no offer or sale of any SIMEX
option product in the United States shall be made until thirty days
after publication in the Federal Register of notice specifying the
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particular option(s) to be offered or sold pursuant to this Order.
By letter dated June 15, 1994, SIMEX through its counsel
represented that it would be introducing an option contract based on
the Nikkei 300 Stock Index futures contract. SIMEX has requested that
the Commission supplement its Initial Order and subsequent Orders \2\
authorizing options on the Eurodollar, Japanese Yen, Deutsche Mark, 3-
Month Euroyen Interest Rate, Nikkei Stock Average and Long-Term
Japanese Government Bond futures contracts by also authorizing SIMEX's
option contracts on the Nikkei 300 Stock Index futures contract to be
offered or sold to persons in the United States. Upon due
consideration, and for the reasons previously discussed in the Initial
Order, the Commission believes that the request for authorization to
offer or sell option contracts on the Nikkei 300 Stock Index futures
contract \3\ should be granted.
\2\ See 59 FR 27233 (May 26, 1994); 57 FR 2675 (January 23,
1992); and 55 FR 26428 (June 28, 1990).
\3\ On February 23, 1995, the Commission's Office of the General
Counsel issued a no-action letter permitting SIMEX futures contracts
based on the Nikkei 300 Stock Index to be offered or sold in the
United States.
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Accordingly, pursuant to Commission rule 30.3(a) and the
Commission's Initial Order issued on July 20, 1988, and subject to the
terms and conditions specified therein, the Commission hereby
authorizes SIMEX's option contracts on the Nikkei 300 Stock Index
futures contract to be offered or sold to persons located in the United
States thirty days after publication of this Order in the Federal
Register, unless prior to that date the Commission receives any
comments which may result in a determination to delay the effective
date of the Order pending review of such comments. Under such
circumstances the Commission will provide notice.
Contract Specifications
Options on Nikkei 300 Stock Index Futures Contract
Underlying Interest
One (1) SIMEX Nikkei 300 stock index futures contract.
Contract Months
Options available on three (3) serial months and five quarterly
months in the March, June, September and December cycle.
Trading Hours
8:00 a.m. to 10:15 a.m. (Singapore time)
11:15 a.m. to 2:15 p.m. (Singapore time)
Minimum Price Fluctuation (Tick Size and Value)
0.1 point of Nikkei Stock Index 300 (also known as one
tick)=1,000 per contract.
Strike Prices
Strike prices are set in integer multiples of 5 points on the
Nikkei Stock Index 300. 15 strike prices are set at 5 point intervals
above and 15 strike prices at 5 point intervals below an at-the-money
strike (i.e., a total of 31 strike prices). Additional strike prices
will be established as the underlying Nikkei Stock Index 300 futures
price rises or falls.
Exercise
American style, i.e., buyers of futures options may exercise their
options on any business day when the option is traded.
In the absence of contrary instructions delivered to the clearing
house, an option in the March quarterly cycle will be exercised
automatically on the day of determination of the final settlement
price.
An in-the-money option that expires in a month other than those in
the March quarterly cycle will be exercised automatically on the day of
termination of trading.
An option in the March quarterly cycle is in-the-money if the final
settlement price of the underlying futures contract is above the
exercise price in the case of a call, or is below the exercise price in
the case of a put.
An option that expires in a month other than those in the March
quarterly cycle is in-the-money if the settlement price of the
underlying futures contract at the termination of trading is above the
exercise price in the case of a call, or is below the exercise price in
the case of a put.
Last Trading Day
The last trading day is the business day before the second Friday
of the contract month.
Minimum Margin Requirements
The SPAN margining system shall be applicable to the margining of
options on the Nikkei 300 stock index futures contract.
Position Limits
3,000 futures-equivalent contracts net long or net short in all
contract months combined. Positions will be aggregated with open
positions in the underlying Nikkei Stock Index 300 futures contract.
Trading Halts
There will be no trading in any options contract when the SIMEX
Nikkei Stock Index 300 futures contract is bid or offered:
(1) At its initial daily price limit; or
(2) At its expanded daily price limit, except that the above
provisions shall not apply on an option's last day of trading.
List of Subjects in 17 CFR Part 30
Commodity futures, Commodity options, Foreign transactions.
Accordingly, 17 CFR Part 30 is amended as set forth below:
PART 30--FOREIGN FUTURES AND FOREIGN OPTION TRANSACTIONS
1. The authority citation for Part 30 continues to read as follows:
Authority: Secs. 2(a)(1)(A), 4, 4C, and 8a of the Commodity
Exchange Act, 7 U.S.C. 2, 6, 6c and 12a.
2. Appendix B to Part 30 is amended by adding the following entry
after the existing entries for the ``Singapore International Monetary
Exchange Limited'' to read as follows:
[[Page 1711]]
Appendix B.--Option Contracts Permitted to be Offered or Sold in the
U.s. Pursuant to Sec. 30.3(a)
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Exchange Type of contract FR date and citation
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* * * *
Singapore International Option Contracts on 199____; ____ FR
Monetary Exchange Limited. the Nikkei 300 ____
Stock Index Futures
Contract.
* * * *
* * *
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Issued in Washington, D.C. on January 16, 1996.
Jean A. Webb,
Secretary to the Commission.
[FR Doc. 96-754 Filed 1-22-96; 8:45 am]
BILLING CODE 6351-01-M
