Outline of Specifications for OSE Dow Jones Industrial Average Futures (Draft)
Considering the recent diversification, sophistication and internationalization of investors’ needs, OSE has decided to introduce Dow Jones Industrial Average Futures and made the outline of the specifications.
OSE will invite public comments on the matter. If you have any comments, please submit them to OSE as follows:
OSE sought the public comments on "Outline of Specifications for OSE Dow Jones Industrial Average Futures (Draft)" from July 26, 2011 to August 25, 2011. OSE appreciates those who made a comment for the cooperation in reviewing these matters.
Please see the following concerning the main comments and OSE's views. The draft is implemented as proposed.
1. Request for Extension of Trading Hours for Night Session
- According to "Outline of Specifications for OSE Dow Jones Industrial Average Futures (Draft)" published last month (July 26), the night session closes at 3:00 a.m. on the next day; however, the NY market opens until 6:00 a.m. (5:00 a.m. in daylight saving time) and the CME until 6:15 a.m. (5:15 a.m. in daylight saving time). Therefore, I request that "OSE DJIA Futures" be also available for trading until the closing of the NY market or CME. (Retail Investor)
- When the night session closes at 3:00 a.m., I/we have to close the position during the period the (CBOT) DIJA Futures are traded. I am/ We are wondering whether it is possible to extend trading hours further by two or three hours. As is true with Nikkei 225 Futures, investors demand liquidity. If we cannot trade at crucial moments, I have to use other products such as CFD. (Retail Investor)
- I would like the closing time of the night session to be extended until the NY market closes. If trading is available until 5:00 a.m. in the U.S. daylight saving time and until 6:00 a.m. in the standard time, it would enhance convenience. (Retail Investor)
OSE will consider further extension of trading hours, in light of the improvement in the system processing and trading situation after the listing, etc.
2. Request regarding "Product Specification"
- Currently, due to purchasing of ETFs by the Bank of Japan, etc., the volatility of Nikkei 225 Futures is so low that retail investors have a difficult time in participating in markets. Considering the current situation, OSE DJIA Futures must be the product that retail investors are willing to trade (i.e. high volatility, sufficient liquidity, high leverage, low fees, many securities companies that operate as an agency of the product and long trading hours). I hope that the new product will be favored by retail investors and the same situation as previously is not realized again.
- I hope that both Large and Mini contracts are introduced for DJIA Futures like Nikkei 225 Futures. (Retail Investor)
- I request OSE to consider listing of futures on S&P 500 or NASDAQ. (Retail Investor)
OSE will refer to the comments received such as the expansion of products for considering the measurements to enhance the convenience of the OSE's markets.
3. Request regarding Margins
There is a description that "in margin calculation, the offsetting of margins with the Nikkei 225 Futures, Mini and Nikkei 225 Options will be allowed to some extent". The margin offsets would make margin calculation complicated and the influence on and the development of the system would increase drastically. We request not to offset margins, because it is not clear whether there is a market needs for OSE DJIA Futures and we concerns about cost benefit. (Securities Company)
- Considering that the correlation between the DJIA and the other indices is confirmed to some extent and CME, which clears Nikkei 225 Futures (U.S. dollar) contracts and DJIA Futures (U.S. dollar) contracts, allows margin offsets between said two contracts, OSE will allow margin offsets between Nikkei 225 products, Nikkei 300 product and RN Prime Index product, as originally proposed.
- Although OSE allows margin offsets between OSE DJIA Futures and other products, securities companies are not required to offset margins in the calculation of margin that customers deposit with securities company (whether to offset margins depends on a securities company).
Please refer to the following page for the rule amendment on this matter.