Page 40 - Taiwan Futures Exchange 2019 Annual Report

36 2019 Taiwan Futures Exchange II. Progress on Major Projects 1. New Products (1) Product line expansion: Nasdaq-100 Futures and TPEx 200 Futures TAIFEX launched two new index futures products on 1 October 2019: Nasdaq-100 Futures and TPEx 200 Futures. In consideration of the interests and trading needs of Taiwanese investors in US technology stocks, TAIFEX obtained licensing to launch our Nasdaq-100 Futures, making TAIFEX the only offshore exchange to concurrently list DJIA, S&P 500, and Nasdaq-100 futures. These products help traders avoid FX risks, and provide a “one-stop shopping” service. TAIFEX introduced TPEx 200 Futures to address the dynamism and investors' enthusiasm for high-turnover stocks listed on the Taipei Exchange (TPEx). Launched on 27 March 2019, the TPEx 200 index consists of the 200 largest (market cap) and most liquid small and medium- sized enterprises (SMEs) stocks listed on TPEx, and provides the industry with the underlying for a number of derivative products including index warrants, ETNs, and bull/bear options. In listing TPEx 200 Futures, TAIFEX has created a win-win for both the cash and futures markets, one that provides investors with an additional trading channel through which to participate in the price movements of TPEx-listed SMEs, and issuers of TPEx index products with a new trading and hedging channel. (2) Taiwan Strategic Indices Recognizing the vibrancy of domestic futures and securities trading, TAIFEX, Taiwan Stock Exchange Corporation (TWSE) and TIP jointly launched the Taiwan Strategic Indices (TSI) to facilitate the development of index products for cross market strategies and to expand the applications of indexing. TSI began publishing three indices on 16 December 2019: TIP TAIFEX TAIEX Futures Index, the TIP TAIFEX TAIEX Covered Call OTM 5% Total Return Index, and the TIP TAIFEX Smart Multi-factor 30 Market Neutral Index. These indices, the first of their kind in Taiwan, will fulfill different market needs and facilitate financial innovation. 2. New and Amended Rules (1) Added products to the Dynamic Price Banding Mechanism TAIFEX established the Dynamic Price Banding Mechanism on 22 January 2018 to strengthen the futures market's price stabilization and brought the market's rules into better alignment with international norms, applying it first to domestic stock index futures. TAIFEX expanded the mechanism to TAIEX Options and foreign equity index futures on 27 May and 1 October 2019, respectively. We will extend it to FX futures and ETF futures to the mechanism on June 8 2020.