The Globalization of Stock Index Futures: A Summary of the Market and Regulatory Developments in Stock Index Futures and the Regulatory Hurdles which Exist for Foreign Stock Index Futures in the United States

The twelve-year history of stock index futures contracts has been marked by great success both in the United States and in many other countries. Two years after the product was introduced in 1982, the "notional," i.e., underlying, or dollar value of trading on the Chicago Mercantile Exchange (CME) S&P 500 Stock Price Index futures contract surpassed the dollar volume of trading at the New York Stock Exchange (NYSE).' Moreover, "as investors go increasingly global and market turbulence grows, stock index futures are emerging as the favorite way for nimble money managers to deploy their funds. Indeed, in most major markets, trading in stock index futures now exceeds the buying and selling of actual shares." This article presents an overview of the history of stock index futures products, including an examination of their role in the market decline of 1987 and their broad acceptance in international markets. It concludes with a review of the current regulatory impediments to stock index futures trading.