Industry bodies call for single stock futures delay

Industry bodies call for single stock futures delay

The Futures Industry Association and Securities Industry Association say that commencement of trading in US single stock futures should be postponed from mid-December until April next year.

In a joint letter to the US House Committee on Financial Services, Mark Lackritz, president of the SIA and John Damgard, FIA president, argue that the 11 September terrorist attacks have "severely strained the systems, personnel and related operational resources of the firms, exchanges and clearing organisations that provide the infrastructure for the US capital markets".

They say that the highest priority of market participants is to restore and ensure the continued stable operation of systems. "For many firms that have lost the primary data processing and communications systems on which their businesses depend, this is no mean undertaking."

The letter states that a consensus has emerged among SIA and FIA members that a launch of single stock futures trading prior to the end of March 2002 is "unrealistic".

"In addition, our members project that they may require approximately two months following the finalisation of regulations governing these products to implement, test and place into production the systems changes necessary to comply with the new dual regulatory framework applicable to these products," Lackritz and Damgard state.

The FIA and SIA additionally argue that member firms need more time to comment on recent SEC and CFTC new rule proposals governing various aspects of security futures.

Full-scale trading of security futures was due to commence in the US by December 21, 2001.

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