CFTC Issues No-Action Relief to Korea Exchange for KOSPI 200 Futures

The Commodity Futures Trading Commission's (CFTC) Division of Market Oversight (DMO) has issued a no-action letter to the Korea Exchange (KRX) regarding the offer and sale of KOSPI 200 and Mini KOSPI 200 futures contracts to persons located within the United States. Under the terms of the letter, DMO staff will not recommend that the Commission take enforcement action against KRX while the CFTC reviews a forthcoming request from the exchange for contract certification under CFTC Regulation 30.13. The regulatory transition corresponds with a shift in the index's classification. The KOSPI 200 is scheduled to become a broad-based security index on February 6, 2025, at which point the DMO's no-action position takes effect. In February 2024, the KOSPI 200 had shifted to a narrow-based security index. Futures contracts on narrow-based security indexes are subject to joint oversight by the CFTC and the Securities and Exchange Commission (SEC). By contrast, futures contracts on broad-based (non-narrow-based) security indexes fall under the exclusive regulatory jurisdiction of the CFTC. The division previously issued similar no-action letters when the KOSPI 200 attained broad-based status in 2021 and 2022.