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“Participants of the Listed Property Trust market have been requesting SFE to list a futures contract on this sector for some time,” said Mr Peter Hiom, General Manager, Exchange Business Development. “This prompted us to carry out a significant amount of research to ensure we provided the market with a product that exactly matched their requirements.”
The contract and Index design are based on the results of extensive market research carried out by independent consultant, Atchinson Consulting and implemented by Dow Jones Indexes. This work has delivered a consistent and transparent methodology to the index and settlement process ensuring only those stocks that truly represent the major Listed Property Trusts in Australia are included in the index and the resulting futures contract.
“We are confident that the design of the contract and support of the three major liquidity providers in Citibank, UBS, and JP Morgan1, will create the conditions necessary for a successful market in LPT exchange futures,” added Mr Hiom. “The SFE provides the equity market with the benchmark index future the SPI 200. We see the SFE LPT Futures contract as a natural extension to this product suite and trust that it will provide a much needed risk management and portfolio enhancement tool for use by participants of the Australian Listed Property Trust market
Typical users of the SFE LPT Futures contract will include domestic and overseas property funds with exposures in Australian property, Australian property trusts, proprietary traders and experienced investors. Uses of the product will include cash equitisation (the process of gaining immediate property exposure with available cash reserves), tactical asset allocation, risk and dividend management, and outright trading.
1 The SFE LPT Futures contract is not sponsored, endorsed or promoted by the liquidity providers and the liquidity providers make no representation regarding the advisability of investing in such products. The liquidity providers will have no liability in connection with the SFE LPT futures contract.
Contract Specifications
| Contract: | SFE Listed Property Trust Futures |
| Contract Unit: | Valued at A$25 per index point (e.g. A$25,000 at 1,000 index points) |
| Contract Months: | March/June/September/December up to two quarter months ahead. |
| Commodity Code: | PT |
| Minimum Price Movement: | One index point (A$25). |
| Last Trading Day: | The third Thursday of the contract month. All trading in expiring contracts ceases at 12:00pm1 on the Last Trading Day. Non-expiring contracts will continue to trade as per the stated trading hours. |
| Cash Settlement Price: | The Special Opening Quotation of the underlying Dow Jones Australia LPT Index on the Last Trading Day. The Special Opening Quotation is calculated using the first traded price of each component stock in the underlying Dow Jones Australia LPT Index on the Last Trading Day, irrespective of when those stocks first trade in the ASX trading day. This means that the first traded price of each component stock may occur at any time between ASX market open and ASX market close (including the Closing Single Price Auction) on the Last Trading Day. Should any component stock not have traded by ASX market close on the Last Trading Day, the last traded price of that stock will be used to calculate the Special Opening Quotation. |
| Trading Hours: | 5.10pm – 7.00am and 9.50am – 4.30pm (during US daylight saving time) 5:10pm – 8.00am and 9:50am – 4.30pm (during US non daylight saving time) |
| Settlement Day: | The first Business Day after expiry, SFE Clearing publishes the final settlement price of the contract. On the second Business Day after expiry, SFE Clearing settles cash flows as a result of the settlement price. |
| Notes: 1 Unless otherwise indicated, all times are Sydney times. | |
SFE Corporation Limited (SFE) is a publicly listed provider of exchange-traded and over-the-counter financial services for investors globally. Fully electronic and with 24-hour trading capability, SFE offers trading products for investment and risk management and disseminates market data and information. SFE Clearing is the fully owned clearing and settlement arm of SFE Corporation Limited, and provides central counterparty clearing, central securities depository and cash settlement services. www.sfe.com.au
