The Futures Market Explained
The futures market has been introduced as a regulated trading environment where financial instruments are exchanged, governed by Law 42-12 and its associated regulations. This market is designed to accommodate futures contracts on a variety of assets, including securities, indices, currencies, interest rates, and commodities, as well as options and swap agreements. For its inaugural launch, the focus has been placed on a futures contract based on the stock index, specifically the MASI 20.
The MASI 20 has been selected as the underlying asset, characterized as an index comprising the 20 most liquid stocks on the market. The contract size is set at 10 dirhams per index point, with a quotation increment of 0.1 points, equating to 1 dirham. The continuous quotation method has been adopted, reflecting the index points in real-time. The contracts will have quarterly expirations scheduled for March, June, September, and December, with the last trading day falling on the third Friday of the expiration month or the preceding business day if that Friday is not a trading day. The settlement will occur in cash, and at launch, four expiration dates will be simultaneously listed: June 2026, September 2026, December 2026, and March 2027. The operational framework ensures that four quarterly maturities are consistently maintained, with each expiring contract being replaced by a new contract with a later maturity date.
Operational Dynamics of the Futures Market
The presentation further clarifies that the settlement price corresponds to the last traded price, and in the absence of transactions, a theoretical price is adopted. Daily margin calls are executed by the clearinghouse based on this settlement price. The margin deposit is set at 1,500 dirhams per contract, with the understanding that it may be revised at any time due to market fluctuations. Participants outlined the various stages in the life of a contract, from opening positions and daily adjustments through margin calls, to potential closure before expiration or final settlement. It was noted that a position can be closed prior to its expiration by taking an opposite position on the same contract with the same trading member.
In terms of functionality, it was emphasized that an investor does not directly submit their order to the futures market management company; instead, they must go through an authorized trading member licensed to operate in this market. Once an order is executed, the transaction is communicated to the relevant trading members as well as to the clearinghouse, which manages the settlement process. The structure outlined distinguishes between the futures market management company, trading members, the clearinghouse, and clearing members. The conference also reiterated that the futures market ecosystem is aimed at institutional, professional, and individual investors.
Furthermore, it was highlighted that each trading member must be linked to a clearing member through a clearing agreement, unless they possess both trading and clearing member status themselves. It was indicated that several clearing members have been approved at this stage, including CFG Marchés, BMCE Capital Bourse, and CDG Capital Bourse, while Attijariwafa Bank operates under both trading and clearing member roles. It was also noted that the futures market management company interacts solely with trading members, while the clearinghouse maintains relationships with clearing members.
The role of the clearinghouse was elaborated upon during the discussions. It serves as the central counterparty for sellers and buyers, responsible for managing counterparty risk, margin deposits, and margin calls. The presentation also mentioned the existence of a guarantee fund to which clearing members contribute. In this context, it was reiterated that cash settlement is mandatory for index contracts, as they are not physically deliverable.
Market officials presented the MASI 20 Futures as an instrument that allows investors to gain exposure to a stock index with a limited initial investment through margin mechanisms, while also offering exposure to a broad basket of stocks. They emphasized its utility as a hedging tool in times of high volatility.
Finally, the stock exchange announced the launch of a dedicated webpage for the futures market, which includes an educational guide along with notices and directives from the SGMAT related to the go-live.
As reported by boursenews.ma.
