[Federal Register Volume 59, Number 9 (Thursday, January 13, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-710]
[[Page Unknown]]
[Federal Register: January 13, 1994]
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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 Overnight Option contracts on the 10-Year Australian
Treasury Bond, 3-Year Australian Treasury Bond and the All-Ordinaries
Share Price Index futures contracts traded on the Sydney Futures
Exchange Limited (``SFE'') to be offered or sold to persons located in
the United States. This Order is issued pursuant to: Commission rule 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 the Commission's Order issued on July 20, 1988, (53
FR 28832, (July 29, 1988), authorizing certain option products traded
on SFE to be offered or sold in the United States.
EFFECTIVE DATE: January 13, 1994.
FOR FURTHER INFORMATION CONTACT: Robert H. Rosenfeld, Esq., Division of
Trading and Markets, Commodity Futures Trading Commission, 2033 K
Street, NW, Washington, DC 20581, 202-254-8955.
.SUPPLEMENTARY INFORMATION: The Commission has issued the following
Order:
Order Under Commission Rule Sec. 30.3(a) Permitting Overnight
Option Contracts on the 10-Year Australian Treasury Bond, 3-Year
Australian Treasury Bond and All-Ordinaries Share Price Index Futures
Contracts Traded on the Sydney Futures Exchange Limited to be Offered
or Sold in the United States.
By Order issued on July 20, 1988 (``Initial Order''), the
Commission authorized, pursuant to Commission rule Sec. 30.3(a),1
certain option products traded on the Sydney Futures Exchange Limited
(``SFE'') to be offered or sold in the United States. 53 FR 28832 (July
29, 1988). Among other conditions, the Initial Order specified that:
\1\Commission rule Sec. 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.
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Except as otherwise permitted under the Commodity Exchange Act
and regulations thereunder, * * * no offer or sale of any SFE option
product in the United States shall be made until thirty days after
publication in the Federal Register of notice specifying the
particular option(s) to be offered or sold pursuant to this Order *
* * .
By letter dated November 24, 1993, the SFE requested that the
Commission supplement its previous orders authorizing certain SFE
options to be offered or sold to persons in the United States,2 by
also authorizing SFE Overnight Options on 10-Year Australian Treasury
Bond, 3-Year Australian Treasury Bond and the All Ordinaries Share
Price Index futures contracts, which are traded on the Sydney Futures
Exchange Computerized Overnight Market (``SYCOM''), SFE's overnight
electronic trading system, to be offered or sold to persons located in
the United States.
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\2\See 53 FR 28832 (July 29, 1988) (options on 90-day Bank
Accepted Bills, 10-Year Treasury Bonds and Australian Dollars
futures contracts); 53 FR 30673 (August 15, 1988) (options on 3-Year
Treasury Bond futures contracts); and 56 FR 51650 (October 15, 1991)
(options on All-Ordinaries Share Price Index futures contracts).
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Overnight Options are described by the SFE as short term options
which provide investors with a means of hedging overnight risk
exposure. The primary difference between Overnight Options and other
existing SFE options is that Overnight Options have a lifespan that is
valid only for the duration of a single SYCOM trading session
(currently 4:40 p.m. to 4 a.m.). Moreover, Overnight Options are
European style options (i.e., exercise possible only at expiration) and
are traded exclusively on SYCOM. Finally, the strike prices used for
Overnight Options differ from the strike price intervals set for
existing SFE options.
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 SFE's Overnight Options on the 10-Year Treasury Bond, 3-Year
Treasury Bond and All Ordinaries Share Price Index futures contracts to
be offered or sold to persons located in the United States effective as
of the date of publication of this Order in the Federal Register.3
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\3\As noted above, the Commission previously authorized, subject
to a 30-day waiting period, the offer or sale of SFE option
contracts on 3- and 10-year Australian Treasury Bond and All
Ordinaries Share Price Index futures contracts. See n.2. The current
request of the SFE would essentially trade similar option contracts,
differing primarily only as to duration of contract, exercise and
strike price. Under such circumstances, the Commission believes that
a 30-day waiting period is not necessary.
Contract Specifications
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Options on all-
Options on 10-year Options on 3-year ordinaries share
Treasury bond futures Treasury bond futures price index futures
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Trading unit:
One Sydney Futures One SFE three year A$25 times the index.
Exchange (SFE) ten treasury bond
year treasury bond futures contract of
futures contract of A$100,000 notional
A$100,000 notional value.
value.
Trading hours:
Coincide with Sydney Same................. Same.
Futures Exchange
Computerized
Overnight Market
(SYCOM) trading
session (presently
4:40 p.m. to 4:00
a.m.).
Contract months:
March, June, Same................. Same.
September, December
(at present only
futures front month
is traded).
Strike price interval:
0.01% at-the-money Same................. 5 pts, AIM, 6+, 6-.
(latest futures
settlement price) and
four above and four
below.
Minimum price fluctuation:
0.005% of notional 0.01% (approx. 0.1 All-Ordinaries
value (approx. A$28.00). Index points (A$25).
A$37.00).
Expiration:
Conclusion of each Same................. Same.
SYCOM trading session.
Style:
European (exercise Same................. Same.
only at expiration).
Trading medium:
SYCOM................. Same................. Same.
Premiums:
Multiples of 0.005% Same................. 0.1 index points.
per annum.
Settlement:
The arithmetical mean Same except rounded The arithmetical mean
of bid and ask to nearest multiple of bid and ask
quotations in the of 0.01%. quotations in the
underlying futures underlying futures
contract taken at the contract taken at
times of 8:32 a.m., the time of 9:55
8:34 a.m., 8:36 a.m., a.m., 9:56 a.m.,
8:38 a.m. and 8:40 9:57 a.m., 9:58
a.m., rounded to the a.m., 9:59 a.m.,
nearest multiple of 10:00 a.m., 10:01
0.005%. This price is a.m., 10:02 a.m.,
then used to 10:03 a.m., 10:04
determine which a.m. and 10:05 a.m.,
strikes are rounded to the
automatically nearest multiple of
exercised. 0.1 point. This
price is then used
to determine which
strikes are
automatically
exercised.
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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 ``Sydney Futures Exchange'' to read as
follows:
Appendix B to Part 30.--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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*****
Sydney Futures Exchange.......... Overnight Options on 10-Year Treasury January 13, 1994; 59 FR ________.
Bond, 3-Year Treasury Bond and the All-
Ordinaries Share Price Index futures
contracts.
*****
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Issued in Washington, DC on January 6, 1994.
Jean A. Webb,
Secretary of the Commission.
[FR Doc. 94-710 Filed 1-12-94; 8:45 am]
BILLING CODE 6351-01-P