South African Rand

South African rand options provide a way to:

• Limit downside risk while maintaining exposure to the relative value of the U.S. dollar compared to the rand
• Manage risks associated with currency rate fluctuations in the FX markets
• Take advantage of profit opportunities stemming from changes in those rates

Things to know:

• There are 12 consecutive calendar month and 4 weekly options, with a monthly underlying future
• Premium-quoted with American style expiration
  • Exercise permitted at any time on or before the expiration date
• Exercised options result in the delivery of futures contracts
• You can view free real-time prices in spot equivalent terms and in U.S. dollars per South African rand at www.cme.com/e-quivalents
• Trades on the CME Group trading floor during open outcry trading hours

About This Currency
The rand has been the currency of the republic of South Africa since 1961. One rand is equal to 100 cents.

Since the election of President Nelson Mandela in 1994, South Africa has emerged as an economic powerhouse and the engine of growth for the African continent. The Johannesburg Stock Exchange (JSE) ranks sixteenth in the world in terms of market capitalization ($270 billion U.S. as of March 1997), with foreigners accounting for roughly 50% of the equity market turnover (1996 figures). With more than $80 billion U.S. outstanding, South Africa’s bond market is larger than those of many Western European nations. South Africa also boasts a world-class natural resource industry, a modern transportation and power network, and a highly developed banking and financial infrastructure.

Structural reforms are now being implemented that will ensure a steady stream of international funds in the years ahead. The most important of these reforms was the abolition of the financial rand in March 1995 and the removal of all restrictions on non-resident investors regarding convertibility and repatriation of capital and profits. Another aspect of the reform process, designed to boost efficiency and encourage long-term investment, is a program to privatize state-owned enterprises.

Exchange Controls
The South African government is pursuing a policy of gradual abolition of all exchange controls, but certain restrictions are still in place. Under current guidelines, authorized foreign exchange dealers (as designated by the South African Reserve Bank) will be allowed to trade CME South African rand futures and options on futures for their own accounts. Please consult with local authorities for regulations regarding current foreign exchange guidelines. In compliance with current exchange control regulation, delivery of rand to fulfill the CME contract will take place between non-resident accounts in South Africa.