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As the market is aware, NZX proposes to launch a suite of dairy options contracts (“Options”), with the first, an Option on NZX Derivatives Market Contract No. 1 Global Whole Milk Powder (WMP) Futures Contract, to go live on 30 November 2011.
To facilitate trading of the Options on the Derivatives Market, a number of amendments to the NZX Derivatives Market Procedures (“Procedures”) were required. NZX hereby notifies the market that, effective from market open on 30 November 2011, the Procedures will be amended as follows:
(a) Procedure 8.3.1 will be amended to include that, in the case of Options, the Provisional Daily Settlement Price shall be released by NZX within 60 minutes of the Close;
(b) Procedure 8.3.2 will be amended to include that, in the case of Options, the Final Daily Settlement Price shall be released by NZX within 90 minutes of the Close;
(c) Procedure 8.3.4 will be amended by adding a paragraph (e) which will set out the method used by NZX to calculate the Provisional and Final Daily Settlement Prices for Options;
(d) Procedure 8.3.5 will be amended so that the rounding convention is applicable to the method of calculating the Provisional and Final Daily Settlement Prices for Options;
(e) Part A of Appendix One to the Procedures, will be amended to specify the Trading Algorithm that applies to trading the Options;
(f) Part B of Appendix One to the Procedures, will be amended to specify the Rounding convention that applies when calculating the Daily Settlement Price for the Options;
(g) Part C of Appendix One to the Procedures, will be amended to specify the Minimum Volume Threshold that applies to the Block Trading Facility available for the Options; and
(h) Part D of Appendix One to the Procedures, will be amended to specify the Session States that apply to trading in the Options.
A copy of the relevant amended Procedures is attached. The full Procedures as amended will be available at www.nzx.com and www.nzxfutures.com from 30 November 2011.
NZX also advises that the Financial Markets Authority has approved the Global WMP Option Individual Contract Specification as currently displayed at:
http://www.nzxfutures.com/dairy/contract_specifications/wmp_options.
Trading in this Contract Specification will commence on 30 November 2011. The NZX Derivatives Market Contract No. 4 Options on Dairy Futures Contract Terms and Administrative Procedures will also be available at www.nzxfutures.com/ from 28 November 2011.
For further information, please email dairy@nzx.com.
