The Bourse de Montréal inc. (MX) is extending temporary regulatory relief that was granted due to the disruption caused by Covid-19, and it’s proposing a couple of rule changes.
In a notice to the industry, the derivatives exchange said that it’s extending relief measures that were adopted in response to the pandemic. They were due to expire Sept. 30 and will now be effective up to Jan. 15, 2021.
The extension applies to relief such as reporting delays, including a 30-minute delay for filing certain transaction reports.
At the same time, the exchange is proposing a couple of rule changes.
It’s proposing to create an exemption from position limit requirements for fully-hedged futures contracts on listed stocks, trust units and ETFs.
The proposal follows “significant growth in the level of open interest” in listed share futures, the exchange said.
“The increase mainly results from institutional investor interest,” it said, and the sorts of trades that exceed the position limits are generally hedged.
The exchange said that it has seen a significant rise in exemption requests involving these kinds of trades.
“The resources deployed by the [exchange’s regulatory] division to handle these exemption requests have led to the conclusion that the current request process may not be optimal for these specific transactions,” it said.
As a result, the exchange is proposing to introduce a defined hedge exemption.
Additionally, it’s proposing to eliminate its variable rotating expiry cycles for equity, ETF and index options, “so as to have one single consolidated listing expiry cycle for all options.”
Both sets of proposed rule changes are out for comment until Oct. 19.