Change in Trading Rules for Options on Reduced Value Indices
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This notice amends rules to enable the trading of options on the reduced value of the MSCI World, full value of the MSCI ACWI, and reduced value of the MSCI USA Indexes. The changes aim to broaden investor participation by offering lower-valued options, allowing more flexible investment strategies with less capital required. Investors in equity markets, especially those interested in global and domestic indexes, are likely to be affected by these changes.
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Key Changes
- Facilitation of options trading on reduced value indices
- Introduction of WORLD (1/100), ACWI, and USA (1/100) options
- European-style cash-settlement for options
Obligations
What this law requires
NYSE Arca must apply the initial listing criteria currently applicable to the MSCI EAFE and EM Index options to the MSCI World Index (1/100), MSCI ACWI Index, and MSCI USA Index (1/100).
The Exchange must ensure that the options on the MSCI World Index (1/100), MSCI ACWI Index, and MSCI USA Index (1/100) satisfy the initial listing criteria as specified in Rule 5.12-O, Commentary .01.
MSCI must calculate the MSCI World (1/100), MSCI ACWI, and MSCI USA (1/100) Indexes in accordance with the MSCI Global Investable Market Indexes (GIMI) Methodology.
The Exchange must continuously monitor the indices and ensure they meet maintenance listing standards set forth in Rule 5.12-O, Commentary .01(b).
NYSE Arca must trade WORLD (1/100), ACWI, and USA (1/100) options during the same hours as other index options, specifically from 9:30 a.m. to 4:00 p.m. New York time.