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sd-10-EFTA01353474Dept. of JusticeOther

EFTA Document EFTA01353474

DECEMBER 1997 SUPPLEMENT To accommodate the introduction of trading in cash-settled options on indexes of mutual funds, the February 1994 edition of the booklet entitled Char- acteristics and Risks of Standardized Options is amended by adding the following disclosure to Chapter IV, Index Options. following the third full paragraph on p. 26: Index options may be traded on underlying indexes designed to reflect the net asset values of selected mutual funds in specified categories. For e

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sd-10-EFTA01353474
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DECEMBER 1997 SUPPLEMENT To accommodate the introduction of trading in cash-settled options on indexes of mutual funds, the February 1994 edition of the booklet entitled Char- acteristics and Risks of Standardized Options is amended by adding the following disclosure to Chapter IV, Index Options. following the third full paragraph on p. 26: Index options may be traded on underlying indexes designed to reflect the net asset values of selected mutual funds in specified categories. For e

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EFTA Disclosure
Text extracted via OCR from the original document. May contain errors from the scanning process.
DECEMBER 1997 SUPPLEMENT To accommodate the introduction of trading in cash-settled options on indexes of mutual funds, the February 1994 edition of the booklet entitled Char- acteristics and Risks of Standardized Options is amended by adding the following disclosure to Chapter IV, Index Options. following the third full paragraph on p. 26: Index options may be traded on underlying indexes designed to reflect the net asset values of selected mutual funds in specified categories. For example, an underlying index may be designed to reflect the net asset value of a selected group of growth funds, or a selected group of growth and income funds. These indexes are calculated and disseminated based on the reported net asset val- ues of the mutual funds included in the index. Mutual funds typically report their net asset values only once per day following the close of trading in the primary markets for the securities held in the funds' investment portfolios. Mutual fund indexes are based on these closing values and are not updated during the trading day. Mutual fund indexes as reported during the trading day will thus be based on non-current information, not only because the funds' portfolios may have changed since the previous day's close, but also because the values of the funds' portfolio securities during the trading day may vary from their values at the previ- ous day's close. Therefore, reported fund index val- ues should not be relied upon as indicative of the current values of the mutual funds included in the indexes. In this respect, mutual fund indexes are comparable to other indexes that are not updated during the trading day, including certain foreign stock indexes. These other indexes are not updated because their component stocks may not be traded in their primary home country markets during all or part of the options trading day. 95 CONFIDENTIAL - PURSUANT TOEFEESEIMOS0M856 P. 6(e) CONFIDENTIAL SDNY_GM_00184040 EFTA01353474

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