Release: #4685-02
For Release: August 2, 2002


WASHINGTON, D.C. – The Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) today announced that they have approved for publication in the Federal Register final rules relating to margin for security futures products. These rules represent the final step necessary to implement provisions of the Commodity Futures Modernization Act of 2000 (CFMA) that lift the 19-year ban on the trading of single-stock and narrow-based stock index futures in this country.

CFTC Chairman James E. Newsome, in commenting on today’s announcement, said, “Throughout the last 18 months, our respective staffs have labored long and hard to reach agreement on rules necessary to permit domestic trading in security futures products. This has been a challenging process but one that has yielded a market structure that, I believe, is both fair and workable and faithfully adheres to the intent of Congress.” Continuing, Chairman Newsome said, “While each agency has its own unique oversight tradition, applicable to the very different needs of the capital formation markets and the risk allocation markets under our respective jurisdictions, this joint rulemaking reflects a respect for those differences while satisfying my two primary objectives: first, that no rule should be so prescriptive or burdensome that it effectively precludes an economically viable new product from trading and, second, that no rule should create an unfair advantage for one set of market participants over another. I congratulate Chairman Pitt and the SEC staff for their effort in this endeavor.”

The rules adopted by the CFTC and the SEC are the last set of joint rules required for domestic trading of security futures products. The rules set forth minimum initial and maintenance margin levels for outright positions in security futures at 20 percent of current market value. They are consistent with margin requirements established by the Federal Reserve Board, and also allow self-regulatory authorities to set margin levels lower that 20 percent in certain offset positions.

The final rules will become effective 30 days after publication in the Federal Register. Copies of the rules can be obtained by contracting the CFTC’s Office of the Secretariat, Three Lafayette Centre, 1155 21st Street, N.W., Washington, D. C. 20581, (202) 418-5100 or by accessing the CFTC’s website at

# # #