Further to the reference in SFE Corporation’s latest half-year financial report released last week (August 25 th), strong volume growth in SFE’s 3-Year and 10-Year Treasury bond futures markets has heightened SFE’s obligations, as the front-line regulator of its markets, to ensure at all times the long-term interests of the market by providing further clarity on its regulatory oversight of a very dynamic quarterly contract expiry process, in the wake of fast growing derivative market liquidity.
SFE has today provided additional formal guidelines to the market introducing expiry position concentration limits which are designed to ensure appropriate ongoing diversification of open position holdings, such that no single user can hold excessive positions on the day of contract expiry which have the potential to impact upon the orderliness of the expiry process. Whilst these limits are in excess of even the largest positions witnessed in recent quarters, SFE has given a strong signal that it will ensure that market growth continues in an orderly and sustainable way.
Commenting on the guidelines, Mr Robert Elstone, MD and CEO of SFE Corporation, the holding company for the Sydney Futures Exchange said “The high quality feedback received from a wide range of market users has re-affirmed that SFE’s bond futures contracts continue to provide significant, effective and cost-efficient risk transfer mechanisms for all market users, combining substantial liquidity with a straightforward and highly efficient expiry settlement mechanism. Our participants also reiterated their overriding interest in the long-term robustness of the market and have, for the most part, welcomed the new SFE guidelines which represent a further step in the continuing process of improving market integrity. ”
