CFTC Recognizes New Exchange for Single-Stock Futures - Island Futures Exchange, LLC (Island)

On February 19, 2002, the Commodity Futures Trading Commission (CFTC) granted contract market designation to Island Futures Exchange, LLC (Island). This is the CFTC's second exchange designation to permit trading of futures contracts on individual securities and narrow-based securities indices (together, security futures products or SFPs) as the CFTC continues with its implementation of the Commodity Futures Modernization Act of 2000 (CFMA) that lifted an almost twenty-year ban on these contracts.

Island is owned and operated by Island Holdings, LLC, which also owns and operates The Island ECN, Inc., an Alternative Trading System. According to the Exchange's application for designation, The National Futures Association (NFA) will perform certain self-regulatory functions for the new exchange, including market and financial surveillance, audits, trade practice investigations, and dispute resolution. NFA also will process applications from Island members.

The Options Clearing Corporation (OCC) will provide clearing and settlement services for the new exchange. Under Island rules, all trading must be conducted through exchange members and their authorized employees. Such members must either be clearing members of OCC or have a clearing arrangement with an OCC clearing member. Only clearing members of OCC are eligible to act as Island clearing members and each must meet OCC's minimum capital requirements.

Copies of the CFTC's approval letter and other supporting material prepared by CFTC staff may be obtained by contacting the Commission's Office of the Secretariat, Three Lafayette Centre, 1155 21st Street, N.W., Washington, D.C. 20581, (202) 418-5100.