HKEx To Introduce More Mainland-Related Futures

20/05/2013

Hong Kong Exchanges and Clearing Limited (HKEx) plans to introduce new stock index futures and stock futures on three A-share Exchange Traded Funds (ETFs) as part of its continuing efforts to expand its suite of Mainland China-related products.

CES 120 futures

CES China 120 Index (CES 120) futures will be introduced on Monday, 8 July 2013, subject to regulatory approval.

The CES 120 was developed by China Exchanges Services Company Limited (CESC), a joint venture of HKEx, the Shanghai Stock Exchange and the Shenzhen Stock Exchange, to track the performance of the largest and most liquid China stocks listed in Mainland China and Hong Kong.

The CES 120 futures contract will be the world's first exchange-listed derivatives product designed to provide a convenient, cost efficient and simultaneous exposure to leading China stocks from the Mainland and Hong Kong markets through a single exchange-traded futures contract that can be used for trading or hedging purposes. The contract would also serve as an effective risk management tool for institutions and investors with the China-related equity portfolios, including Exchange Traded Fund (ETF) market makers, to hedge their positions in China-related ETFs.

Key features of CES 120 futures’ contract specifications comprise:

 

Contract Multiplier:

$50 per whole index point Minimum Fluctuation:
0.5 index point (or $25)

Contract Months:

Spot month, the next calendar month and the next two calendar quarter months (calendar quarter months are March, June, September and December)

Trading Hours:

9:15 am – 12 noon and 1 pm – 4:15 pm
(Hong Kong time, or HKT), except on Last Trading Day, or LTD.

Trading Hours on LTD:

9:15 am – 12 noon and 1 pm – 3:00 pm (HKT)
Note: No afternoon trading on Christmas Eve, New Year’s Eve or Lunar New Year’s Eve.

Holiday Schedule:

Hong Kong holiday schedule

Liquidity Providers:

HKEx has invited applications from Futures Exchange Participants interested in being liquidity providers for CES 120 futures.

 

(Contract specifications are attached below along with other additional information.)

"CES 120 futures will be the first exchange-traded futures on an index that includes A shares as well as H shares, red chips and other Hong Kong-listed shares of Mainland companies," said HKEx Chief Executive Charles Li. “The launch of CES 120 futures will be a milestone in our equity derivatives strategy of building on our current business and offering an extensive product suite across Hong Kong and Mainland underlying securities."

"We will continue working with our CESC joint venture to offer a suite of products with underlying China-related securities and rolling out cross-market and A share-related products based on CESC indices," Mr Li said. "HKEx is committed to offering a variety of products to our customers and relevant risk management tools for their portfolio management requirements."

Stock futures on 3 A-share ETFs

Stock futures on the CSOP FTSE China A50 ETF, iShares FTSE A50 China Index ETF and China AMC CSI 300 index ETF will be introduced on Monday, 10 June 2013, subject to regulatory approval. Some of the stock futures' key features are shown in the table below.

 

Underlying Stock (Stock Code)

Contract Multiplier
(Board Lots)

Trading Currency

Contract Months

CSOP FTSE China A50 ETF (2822)

5,000 shares (25)

Hong Kong dollars

Spot month, next two calendar months and next two calendar quarter months (calendar quarter months are March, June, September and December)

iShares FTSE A50 China Index ETF (2823)

5,000 shares (50)

China AMC CSI 300 index ETF (3188)

2,000 shares (10)

 

The rollout of the three new stock futures contracts will give HKEx its first stock futures on A-share ETFs, the contracts will provide investors with more choice in Mainland-related equity derivatives, and they will complement HKEx’s stock options on the three A-share ETFs as well as the ETFs themselves.

 

Contract Specifications of CES China 120 Index Futures

The following Contract Specifications shall apply to the CES China 120 Index Futures Contract:

 

Underlying Index/Index

CES China 120 Index (the share price index of that name compiled, computed and disseminated by China Exchanges Services Company Limited)

Contract Multiplier

HK$50 per Index point

Contract Months

Spot Month, the next calendar month, and the next two calendar quarter months
(i.e. quarterly months are March, June, September and December)

Minimum Fluctuation

0.5 Index point

Maximum Fluctuation

Nil

Contracted Price

The price at which a CES China 120 Index Futures Contract is registered by
the Clearing House

Contracted Value

Contracted Price multiplied by the Contract Multiplier

Position Limits

To be announced

Large Open Positions

To be announced

Trading Hours

9:15 am – 12:00 noon and
1:00 pm – 4:15 pm (Hong Kong time)

There is no afternoon trading session on the eves of Christmas, New Year and
Lunar New Year.

Trading Hours on
Last Trading Day

9:15 am – 12:00 noon and
1:00 pm – 3:00 pm (Hong Kong time)

There shall be no afternoon trading session if the Last Trading Day falls on Christmas Eve, New Year’s Eve or Lunar New Year’s Eve.

Trading Method

The Exchange’s Automated Trading System (HKATS)

Final Settlement Day

The first Business Day after the Last Trading Day

Settlement Method

Cash (Hong Kong dollar) settled contract for difference

Last Trading Day

The Business Day immediately preceding the last Business Day of the Contract Month

If it falls on a Mainland China public holiday, the Last Trading Day will be the preceding Business Day which is also a business day in Mainland China.

Final Settlement Price

The Final Settlement Price for CES China 120 Index Futures Contracts shall be a number, rounded up to the nearest 1 decimal place if the figure in the second decimal place is 5 or above and rounded down to the nearest 1 decimal place if it is below 5, determined by the Clearing House and shall be the average of the values of the CES China 120 Index compiled, computed and disseminated by China Exchanges Services Company Limited taken at five (5) minute intervals between 1:00 pm up to 3:00 pm on the Last Trading Day.

The Chief Executive of the Exchange has the power under the Regulations for trading Stock Index Futures Contracts to determine the Final Settlement Price under certain circumstances.

Trading Fee
(per contract per side)

Exchange Fee HK$10.00

The amount indicated above is subject to change from time to time.

Levies
(per contract per side)

Commission Levy and Investor Compensation Levy are payable at the rate or of the amount prescribed from time to time pursuant to the Ordinance.

Commission Rate

Negotiable

 

 

Information Vendor Codes for CES 120 and CES 120 Futures

 

Information Vendor

Access Code

CES 120 Index

CES 120 Futures

Bloomberg Finance LP

CES120

CESA Index DES <GO>

Reuters Limited, a Thomson Reuters Company

.HKCES120

0#HCHH:

AAStocks.com Limited

110056

221360

AFE Solutions Ltd

837501

870800

ET Net Limited

CEC

CHH / Index Futures Quotation

Infocast Limited

CE120

Menu
-> Derivatives
-> Futures
-> Futures Code
-> Select CHH

Telequote Data International Limited

CES120

CHHmy

 

Links to CES 120 Information on CESC Website (http://www.cesc.com/en/index.html)

CES 120’s current level
http://www.cesc.com/en/index.html

CES 120 overview
http://www.cesc.com/en/Indexes/Overview.html

Index Constituents page on CESC website
http://www.cesc.com/en/Indexes/Constituents.html

CES 120 fact sheet
http://www.cesc.com/Content/documents/CESC_120_en_2013q1.pdf

 

Stock Futures Contract Summary

 

Contract Multiplier

Varies*

Contracted Value

Contracted price multiplied by Contract Multiplier

Minimum Fluctuation

HK$0.01

Contract Months

Spot Month, next two calendar months and next two calendar quarter months

Trading Hours

9:30 am - 12:00 noon and 1:00 pm - 4:00 pm

Last Trading Day

The Business Day immediately preceding the last Business Day of the Contract Month

Final Settlement Day

The first business day after the Last Trading Day

Final Settlement Price

 

The average of readings of (i) the midpoints of the best bid and best ask prices for the underlying common share taken at five-minute intervals from five minutes after the start of, and up to five minutes before the end of, the Continuous Trading Session of SEHK and (ii) the closing price of the underlying common share as quoted by SEHK on the Last Trading Day.

Settlement Method

Cash settled contract of difference

Exchange Fee
(per contract per side)

HK$3.50

 

*For details, please refer to the HKEx website