Arrangements for Adjustment of Digital China Structured Products and Futures
Market Operations
23 Mar 2016
Hong Kong Exchanges and Clearing Limited (HKEX) has announced the arrangements for the adjustment to Digital China Holdings Ltd (Digital China) futures to account for Digital China's special dividend.
Overview
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Company (Stock Code)
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Digital China (861)
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Corporate Action
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Special Cash Dividend of $3.20 per share
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Ex-date
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7 April 2016
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For details, please refer to the announcements made by Digital China on 7 August 2015, 9 August 2015 and 21 March 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 Digital China as underlying asset
The listing documents of all existing structured products with the shares of Digital China 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 6 April 2016 regarding the relevant adjustments (including the adjusted entitlement and adjusted exercise price) and investors should read the contents of such announcements carefully.
Digital China Futures
Trading Arrangements
The trading arrangements for the existing Digital China stock futures under trading symbol DIG will be as follows:
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1.
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Adjustment and Transfer of Outstanding Positions
Open positions of Digital China stock futures series under trading symbol DIG 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 DIA.
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2.
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Introduction of New Stock Futures Series for Trading
On the ex-date, new Digital China stock futures series based on the standard contract multiplier will be introduced for trading under the standard trading symbol DIG.
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Details of the adjustment procedures for Digital China stock futures series under trading symbol DIG 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 – special dividend) /
underlying stock closing price
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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
(5,000 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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DIA
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ACM
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From ex-date to29 December 2016
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No
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Standard
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DIG
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5,000
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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 futures series will 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.
For detailed trading and clearing operational arrangement, please refer to the circular.
Ends