Arrangements for Adjustment of Hang Seng Bank Limited Structured Products, Futures and Options
Market Operations
23 Feb 2016
Hong Kong Exchanges and Clearing Limited (HKEX) has announced the arrangements for the adjustment to Hang Seng Bank Limited (Hang Seng) structured products, futures and options to account for Hang Seng’s distribution of special interim dividend.
Overview
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Company (Stock Code)
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Hang Seng (0011)
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Corporate Action
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Special Interim Dividend of $3.00 per share
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Ex-date
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7 March 2016
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For details, please refer to the announcement made by Hang Seng on 22 February 2016.
Highlights of the adjustment arrangements are set forth below. Investors should consult their brokers for further details, or if they have any questions regarding the adjustment.
Structured products with shares of Hang Seng as underlying asset
The listing documents of all existing structured products with the shares of Hang Seng as underlying asset contain provisions that deal with a cash distribution including a special dividend. Structured product issuers will make announcements in the evening of 4 March 2016 regarding the relevant adjustments (including the adjusted entitlement and adjusted exercise price) and investors should read the contents of such announcements carefully.
Hang Seng Futures
Trading Arrangements
The trading arrangements for the existing Hang Seng stock futures under trading symbol HSB will be as follows:
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1.
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Adjustment and Transfer of Outstanding Positions
Open positions of Hang Seng stock futures series under trading symbol HSB which exist after the market close on the business day immediately before the ex-date will be adjusted and transferred to stock futures series under trading symbol HSA.
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2.
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Introduction of New Stock Futures Series for Trading
On the ex-date, new Hang Seng stock futures series based on the standard contract multiplier will be introduced for trading under the standard trading symbol HSB.
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Details of the adjustment procedures for Hang Seng stock futures series under trading symbol HSB are as follows:
| Adjustment Term |
Formula |
Remarks |
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Adjustment Ratio (AR)
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(underlying stock closing price – ordinary dividend – special dividend) /(underlying stock closing price – ordinary dividend)
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Rounded to the nearest 4 decimal places
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Adjusted Contracted Price (ACP)
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Contracted price of outstanding stock futures series x AR
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Rounded to the nearest 2 decimal places
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Adjusted Contract Multiplier (ACM)
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Contracted price of outstanding stock futures series x (100 shares / ACP)
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Rounded to the nearest 4 decimal places
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Contract
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Trading Symbol
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Contract Multiplier(Shares)
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Availability For Trading
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Addition of New Stock Futures Series on and after the ex-date
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Adjusted
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HSA
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ACM
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From ex-date to
29 September 2016
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No
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Standard
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HSB
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100
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From ex-date onwards
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Yes
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Investors should note that the adjusted and standardstock futuresseries have different contract multipliers.There will not be any changes to the number of open positions and other contract terms after the transfer of positions.
Hang Seng Options
Trading Arrangements
The trading arrangements for the existing Hang Seng stock options under trading symbol HSB will be as follows:
|
1.
|
Adjustment and Transfer of Outstanding Positions
Open positions of Hang Seng stock option series under trading symbol HSB which exist after the market close on the business day immediately before the ex-date will be adjusted and transferred to stock option series under trading symbol HSA.
|
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2.
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Introduction of New Stock Option Series for Trading
On the ex-date, new Hang Seng stock option series based on the standard contract size will be introduced for trading under the standard trading symbol HSB.
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Details of the adjustment procedures for Hang Seng stock option series under trading symbol HSB are as follows:
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Adjustment Term
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Formula
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Remarks
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Adjustment Ratio (AR)
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(underlying stock closing price – ordinary dividend – special dividend) /
(underlying stock closing price – ordinary dividend)
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Rounded to the nearest 4 decimal places
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Adjusted Exercise Price (AEP)
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Exercise price of outstanding stock option series x AR
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Rounded to the nearest 2 decimal places
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Adjusted Contract Size (ACS)
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Exercise price of outstanding stock option series x (100 shares / AEP)
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Rounded to the nearest 4 decimal places
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Contract
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Trading Symbol
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Contract Size(Shares)
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Availability For Trading
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Addition of New Stock Option Series on and after the ex-date
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Adjusted
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HSA
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ACS
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From ex-date to30 March 2017
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No
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Standard
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HSB
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100
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From ex-date onwards
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Yes
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Investors should note that the adjusted and standard stock option series have different contract sizes. There will not be any changes to the number of open positions and other contract terms after the transfer of positions.
For detailed trading and clearing operational arrangement, please refer to the SEHK and HKFE circulars.
Ends