between the SEC and CFTC created serious problems for issuers, market professionals and the U.S. narrow-based indices of such securities were prohibited. oversight by the SEC and the CFTC of single stock futures trading. on futures on exempted securities and broad–based stock indices was left to the CFTC. part on the value of the narrow group of commodities not described in clause (1) (CFTC) concluded that the ability of primary government securities dealers to By using futures contracts based on a broad index of stocks, eq- 59 Studies have also shown that stock spreads do not widen but narrow following the intro-. 26 Feb 2020 of “narrow based security index” and modifying listing standard requirements for security futures products. He also drafted CFTC adjudicatory 2 Apr 2012 By hedging the trades through single-stock futures contracts and narrow-based stock index futures, RBC was able to reduce its exposure to Narrow-Based Security Index: In general, the Commodity Exchange Act defines a narrow-based security index as an index of securities that meets one of the following four requirements (1) it has nine or fewer components; (2) one component comprises more than 30 percent of the index weighting; (3) the five highest weighted components comprise more
(m) Additional contracts on previously-reviewed index: A new non-narrow-based security index futures contract may be offered or sold in the U.S. in reliance on a prior Foreign Security Index No-Action Letter or Commission certification, provided that the new contract is based on an index that was the subject of such Foreign Security Index No The CFTC and SEC previously have issued guidance with respect to volatility indexes and debt security indexes, and how to determine whether such indices are "narrow-based." A volatility index is not considered a narrow-based security index (i.e., it is a broad-based security index) when it meets all of the following criteria: What criteria render an index "broad-based" or "narrow-based"? Depending who you ask, you're likely to receive a wide range of response. Broad-Based vs. Narrow-Based Indices CFTC and SEC The Commissions state that the existing statutory definition of the term “narrow-based security index” and the related rules and guidance, which were enacted to permit the trading of security futures on narrow-based securities indices in certain circumstances, will determine the characterization of Title VII Instruments other than credit
The CFTC and SEC previously have issued guidance with respect to volatility indexes and debt security indexes, and how to determine whether such indices are "narrow-based." A volatility index is not considered a narrow-based security index (i.e., it is a broad-based security index) when it meets all of the following criteria: What criteria render an index "broad-based" or "narrow-based"? Depending who you ask, you're likely to receive a wide range of response. Broad-Based vs. Narrow-Based Indices CFTC and SEC The Commissions state that the existing statutory definition of the term “narrow-based security index” and the related rules and guidance, which were enacted to permit the trading of security futures on narrow-based securities indices in certain circumstances, will determine the characterization of Title VII Instruments other than credit Given the CFTC’s joint jurisdiction over single stock futures and narrow-based security indexes, it is unclear whether the CFTC will take any regulatory action at this point. [1] Order Granting Exception for Certain Persons Effecting Transactions in Foreign Security Futures, Exchange Act Release No. 60,194 (June 30, 2009).
2 Apr 2012 By hedging the trades through single-stock futures contracts and narrow-based stock index futures, RBC was able to reduce its exposure to Narrow-Based Security Index: In general, the Commodity Exchange Act defines a narrow-based security index as an index of securities that meets one of the following four requirements (1) it has nine or fewer components; (2) one component comprises more than 30 percent of the index weighting; (3) the five highest weighted components comprise more (1) Solely with respect to a swap that is traded on or subject to the rules of a designated contract market, swap execution facility or foreign board of trade pursuant to the Commodity Exchange Act (7 U.S.C. 1 et seq.), an index that becomes a narrow-based security index under paragraph (b) of this section solely because it was a narrow-based The agreement provides for joint jurisdiction between the CFTC and the SEC over single stock futures and narrow-based stock indices, both defined as security futures. Broad-based indices, as defined below, will remain under the CFTC’s jurisdiction. Broad-Based Stock Indices. If a futures contract on a stock index satisfies either of the Narrow-Based Stock Index Futures shall be based on such indices consisting of two or more underlying securities, which satisfy the requirements set forth in CFTC Regulation 41.21(b), as determined by the Exchange. 35102.B. Trading Hours Narrow-Based Stock Index Futures shall be traded during such hours, as determined by the Exchange. In general, the Commodity Exchange Act defines a narrow-based security index as an index of securities that meets one of the following four requirements (1) it has nine or fewer components; (2) one component comprises more than 30 percent of the index weighting; (3) the five highest weighted components comprise more than 60 percent of the index weighting, or (4) the lowest weighted components
Listing standards are discussed below. Futures on Narrow-Based Security Indexes A futures contract based on an index of two or more securities may be traded as Indexes Underlying Contracts of Foreign Boards of Trade Authorized by the CFTC until June 21, 2002, a security index is not a narrow-based security index if:. 15 Sep 2015 The issue in contention between the CFTC and the SEC is whether the Dividend Index is a security future (and in particular, a narrow-based 25 Mar 2004 Futures contracts on single securities and on narrow-based security indexes ( collectively, "security futures") are jointly regulated by the CFTC stocks and narrow-based stock indexes; (8) in response to calls to repeal the accord trading prohibitions, SEC, the U.S. securities exchanges, the President's on individual stocks and narrow-based indexes (referred to as "stock fu- indexes. The CFTC's jurisdiction over securities futures, however, was limited. 23 Nov 2009 Futures contracts on single securities and on narrow-based security indexes ( collectively, “security futures”) are jointly regulated by the CFTC