Commission Issues Exemptive Order To Permit Principal-To-Principal Trading In Security Futures Products
FOR IMMEDIATE RELEASE
Washington, D.C., August 21, 2001 -- The Commission today issued an order to permit limited trading in security futures products to begin.
The Commodity Futures Modernization Act of 2000, which became law on December 21, 2000, lifted the ban on single stock and narrow-based stock index futures. The legislation, however, does not permit retail customers to trade these new products until December 21, 2001. Certain transactions between "eligible contract participants" may begin as early as August 21, 2001, if certain other conditions are met. Specifically, principal-to-principal trading between eligible contract participants may begin on August 21, if the National Futures Association ("NFA") has adopted rules to meet the requirements for a Limited Purpose National Securities Association.
Today the NFA filed rules with the Commission to satisfy most of these requirements. The Commodity Futures Trading Commission approved these rules on August 20, 2001, and they are effective when filed with the Commission today. The NFA also continues to work with the Commission, other securities self-regulatory organizations, and its members to develop additional rules to fulfill its obligations as a Limited Purpose National Securities Association.
The order issued by the Commission today allows the limited trading otherwise permitted as of August 21, 2001 to commence with only those NFA rules in place that became effective today.
The order will be available on the Commission's website at www.sec.gov.