Release Number 8610-22

CFTC Staff Issues No-Action Letter to Korea Exchange, Inc. Concerning the Offer or Sale of KOSPI and Mini KOSPI 200 Futures Contracts

October 17, 2022

The Commodity Futures Trading Commission’s Division of Market Oversight (DMO) announced today that it will not recommend the Commission take enforcement action against Korea Exchange, Inc. (KRX) for the offer or sale of Korea Composite Stock Price Index (KOSPI) 200 Futures Contracts and Mini KOSPI 200 Futures Contracts to persons located within the U.S. while the Commission’s review of KRX’s forthcoming request for certification of the contracts under CFTC Regulation 30.13 is pending. The letter will be effective October 24. DMO issued a similar letter when the KOSPI 200 became a broad-based security index in 2021.

The KOSPI 200 became a narrow-based security index earlier this year. Futures contracts based on narrow-based security indexes are subject to joint CFTC and Securities and Exchange Commission jurisdiction. Products based on non-narrow-based (also known as broad-based) security indexes, by contrast, are subject to exclusive CFTC jurisdiction.

The KOSPI 200 is set to become a broad-based security index on October 22, and October 24 is the first trading day after the index becomes broad-based. KRX has noted that a lag may exist between when the KOSPI 200 index becomes a broad-based security index and when KRX secures certification of the contracts under CFTC Regulation 30.13.