CFTC Staff Letter 02-81: No-Action Relief for Eurex Deutschland Futures Contract on Dow Jones Global Titans 50 Index

CFTC Letter 02-81
CFTC Letter No. 02-81
June 28, 2002
No Action
Office of General Counsel
Re: Eurex Deutschland’s Request for No-Action Relief in Connection with the Offer and Sale of its Futures Contract on the Dow Jones Global Titans 50 Index in the United States Dear Mr.Rosen:
This is in response to your letters, attachments, facsimiles and electronic mail dated from November 20, 2001 to June 10, 2002, requesting that the Office of General Counsel (“Office”) of the Commodity Futures Trading Commission (“Commission” or "CFTC") issue a “no-action” letter concerning the offer and sale in the United States (“U.S.”) of a futures contract based on the Dow Jones Global Titans 50 Index (“Global Titans 50” or “Index”) traded on Eurex Deutschland (“Eurex”). We understand the facts to be as follows. Eurex is a futures and options exchange located in Frankfurt, Germany and operated by Eurex Frankfurt AG. Eurex is regulated by and subject to active market surveillance by self-regulatory agencies, the Exchange Supervisory Authority in the State of Hesse, where Eurex is located, and by the German Federal Supervisory Office for Securities Trading (the “BAWe”). Pursuant to the German Securities Trading Act, the BAWe has responsibility for the supervision of German securities and derivatives trading, and has the authority to cooperate with competent authorities of other countries in connection with the supervision of securities and derivatives markets and trading activity thereon, including by sharing non-public market surveillance information. The Global Titans 50 is a broad-based, modified “free float” capitalization-weighted index designed and administered by Dow Jones Indexes, a part of Dow Jones & Company, Inc.[1] The Global Titans 50 consists of the 50 largest stocks in the Dow Jones World Index.[2] Based on data supplied by Eurex, the total market capitalization of the Global Titans 50 was approximately U.S. $5.6 trillion as of October 16,
2001. As of that date, no single stock in the Global Titans 50 represented more than 6.77% of the Index.
The five most heavily weighted stocks in the Global Titans 50 represented 25.52% of the Index. The stocks comprising the lowest 25% of the Global Titans 50 had a six-month aggregate dollar value of average daily trading volume of U.S. $6.2 billion for the period from April to September 2001.[3] The Index is calculated in real time and is disseminated by electronic means through major data vendors in 15-second intervals. Eurex’s futures contract on the Global Titans 50 provides for cash settlement. The notional value for the futures contract is determined by multiplying the relevant index by 100 Euros. Eurex lists for trading the three nearest months of the March quarterly cycle, and the last trading day for the contract is the third Friday of the delivery month. Cash settlement occurs on the first business day after the last trading day. The final settlement price for the contract is calculated on the last day of trading and is the arithmetic file:///S|/Website%20Management/LegacyDataCopyasof2010-04-21/tm/letters/02letters/tm02-81.htm (1 of 6) [5/6/2010 5:52:37 PM]