[KRX] KOSPI 200 Futures night session for CME suspended

https://www.edaily.co.kr/news/read?newsId=03867126625733496&mediaCodeNo=257

`삼성전자 30% 넘게 두다가`..11년만에 美 CME 코스피200선물 야간 거래 중단

 

Korea Exchange (KRX) has announced today that KOSPI 200 Futures night sessions trading via CME will be suspended from 7th April 2020. KOSPI 200 Futures Global Trading via CME (Chicago Mercantile Exchange) is after-hours night session trading from 6 PM KST till 5 AM KST next day.

 

This is the first time the trading is suspended since its opening in the year 2009.

 

The reason behind this action is that Samsung Electronics (005930.KS) has taken up more than 30% weight of the KOSPI 200 Index for more than 45 days over recent three months which makes it a "narrow-based security index" under the Commodity Exchange Act in the United States.

 

According to Commodity Exchange Act Section 1a 35, a narrow-based security index is defined as,

 

(35) NARROW-BASED SECURITY INDEX.—
(A) The term ‘‘narrow-based security index’’ means an

index—
(i) that has 9 or fewer component securities;
(ii) in which a component security comprises more

than 30 percent of the index’s weighting;

 

(B) Notwithstanding subparagraph (A), an index is not a narrow-based security index if—

(II) it has been a narrow-based security index for no more than 45 business days over 3 consecutive calendar months;

(https://legcounsel.house.gov/Comps/Commodity%20Exchange%20Act.pdf)

 

Futures products with underlyings of Narrow-based security indices are regulated both by CFTC (Commodity Futures Trading Commission) and SEC (Securities and Exchange Commission).

 

While KOSPI 200 Futures trading continues during regular market hours, trading via CME will not be available till there is a further notice from the Korea Exchange.