CFTC and SEC Approve Joint Order Excluding from the Definition of Narrow-Based Security Index those Security Indexes that Qualified for the "Grandfather" Exclusion from that Definition under Section 1a(25)(B)(v) of the Commodity Exchange Act and Section 3(a)(55)(C)(v) of the Securities Exchange Act of 1934

FOR IMMEDIATE RELEASE
2002-79

Washington, D.C., May 31, 2002 - Today, the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) jointly issued an order under the Commodity Exchange Act (CEA) and the Securities Exchange Act of 1934 (Exchange Act) excluding certain security indexes from the definition of "narrow-based security index." Specifically, the Commissions are excluding from the definition of the term "narrow-based security index" those security indexes that qualified for the "grandfather" exclusion from that definition under Section 1a(25)(B)(v) of the CEA and section 3(a)(55)(C)(v) of the Exchange Act. Specifically, an index is not a narrow-based security index if: (1) it is traded on or subject to the rules of a foreign board of trade; (2) the offer and sale in the United States of a contract of sale for future delivery on the index was authorized before the date of the enactment of the CFMA; and (3) the conditions of such authorized continue to be met. This order affects the 42 security index futures contracts that received no-action relief from the CFTC prior to the enactment of the Commodity Futures Modernization Act of 2000.

Without further action from the Commissions, some of these existing grandfathered foreign security index futures contracts may not be able to be offered or sold in the U.S. after June 21, 2002 because their underlying indexes are, or could become, "narrow-based security indexes." Therefore, to provide legal certainty and prevent market disruption that could result after June 21, 2002, the Commissions today have issued the joint order.

For a list of these security index futures contracts that qualified for the grandfather exclusion, see the CFTC's Backgrounder on its website at: http://www.cftc.gov/opa/backgrounder/opapart30htm.

The order will be effective June 21, 2002. A copy of the order can be obtained by contacting the CFTC's Office of the Secretariat, Three Lafayette Centre, 1155 21^st Street, N.W., Washington, D.C. 20581, (202) 418-5100, or by accessing the CFTC's website or the SEC's website at www.cftc.gov and www.sec.gov respectively.