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The Australian Securities Exchange (ASX) has received no-action relief from the Securities and Exchange Commission (SEC) in the United States for ASX-market equity and index options. As a result of this relief, ASX Exchange Traded Options (ETOs) will be eligible for trading by US institutional investors.
This is the first time ASX has obtained this type of relief from the US regulator, enabling ASX participants to accept ETO orders from certain registered broker-dealers and large financial institutions in the US. Relief for the trading of SFE-market SPI 200® equity index futures and options contracts was obtained from the US Commodity Futures Trading Commission (CFTC) in 2000.
All ETOs, with the exception of FLEX options, LEPOs and those with foreign domiciled underlying stocks, will be eligible for trading by US institutions, amounting to 71 stock and three equity index products (please see attached list). The regulatory approval is expected to generate substantial liquidity from offshore which will further deepen the ETO market. There were 91,000 ETOs traded on average each day on ASX in financial year 2007, valued at A$15 billion (US$12 billion).
Peter Hiom, ASX Group Executive, Business Development said: “The granting of SEC, No-Action Relief is pivotal to the development of the Australian Exchange Traded Options market. The participation of large US institutions in domestic ETOs is expected to diversify the client base and drive volume growth.
“There is keen US interest in ASX ETOs because of the strength of our market and the quality of our leading companies.The move to offer products to US institutions demonstrates the internationalisation of ASX’s markets.”
Click here for a list of the ETOs.
