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HKEx Launches Incentive Programmes for RMB Currency Futures Amid Record Trading Volumes

Statistics
Products
15 Dec 2014

RMB currency futures contracts have proven themselves as an effective risk management tool for market users amid increased USD/CNH volatility, and Hong Kong Exchanges and Clearing Limited (HKEx) is introducing additional measures to solidify the development of the RMB currency futures market.

Turnover and Participation

Turnover in HKEx's RMB currency futures product reached an eight-month high on 9 December 2014 at 4,608 contracts with a notional value of RMB2.8 billion.  Trading volumes of the product in the After Hours Futures Trading (AHFT) session also continue to grow, having reached 7.8 per cent of the volume in the day session.  RMB Currency Futures were introduced into AHFT on 7 April 2014 and turnover of the product reached an all-time record high of 6,318 contracts on 19 March 2014.

"We have seen steady growth in our RMB currency futures product since its launch in 2012, and especially recently because of higher volatility," said Romnesh Lamba, Co-head of HKEx’s Global Markets. "The RMB was long seen as a one-way bet, and its movement in both directions this year has attracted more investors who are using it as an effective hedging tool to manage risk.  We expect these new incentive programmes to make the product even more widely traded in 2015."

More Exchange Participants (EPs) are also taking part, with two new EPs trading the contract in early December. Their participation brings the total number of EPs who have traded the product to 79.

Market Makers

HKEx is also welcoming two new market makers for RMB currency futures.  Bank Sinopac Hong Kong Branch will join as a market maker effective Friday 19 December 2014, while Celestial Commodities Limited joined on Monday 25 August 2014. HKEx is continuing to work on recruiting new market makers for RMB currency futures.

Active Trader and Spread Enhancement Programmes

HKEx's wholly owned subsidiary, The Hong Kong Futures Exchange (HKFE), is also implementing two new initiatives for trading RMB currency futures starting on 2 January 2015.

The Active Trader Programme will provide a trading fee rebate for trading RMB currency futures to a limited number of traders approved by HKFE.  The trading fee rebate for Active Traders who meet the specific threshold will be RMB6 per contract.

To be eligible for the rebate, an Active Trader will be required to meet a minimum volume threshold of an average daily volume of 30 RMB currency futures contracts during a given month during the programme period, which concludes on 31 December 2015.

Meanwhile, in order to enhance market liquidity, a Spread Enhancement Programme is also open for application and for market makers of RMB currency futures only.  A 100 per cent trading fee rebate and certain sponsorship for trading RMB currency futures will be available for Spread Enhancement Programme participants who meet certain quoting requirements.  This programme is also valid from 2 January 2015 to 31 December 2015.


Ends

Updated 15 Dec 2014