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While both products are China Government bond futures, they are traded separately in the offshore and onshore market. There are also notable contract specification differences between the two in areas such as contract size, trading days and hours, trading mechanism, position limit, and settlement arrangements.

Please refer to the Official Circular for further details on HKEX’s CGB Futures.

A market wide trading fee discount and two incentive programs will be offered from product launch 3 August 2026 to 30 Jul 2027 (both dates inclusive).

Please refer to the Incentive Programs Circular for further details.

The Bond Basket is used to determine the FSP, where it shall be composed of bonds in the Bond Universe which fulfils the following criteria:

1. Publicly issued by the China Ministry of Finance and denominated in RMB;
2. Tradable in the China Interbank Bond Market (“CIBM”);
3. Book-entry treasury bonds with fixed coupon rates (annual coupon payment); and
4. With original term to maturity of no more than 7 years, and remaining term to maturity greater than 4 years and less than 5.25 years as of the Last Trading Day of the futures contract

The two most liquid bonds with the highest Average Daily Turnover (“ADT”) in the observation period will be selected from the Bond Universe to construct the Bond Basket. The observation period shall exclude the bond’s first CIBM trading day, and be measured by the immediately preceding 10 CIBM trading days from the Bond Basket Confirmation Day. Bonds with an observation period of less than 10 CIBM trading days will not be considered as a Bond Basket constituent.

You may reference the below for Bond Basket selection illustration:

HKEX’s CGB Futures is a cash-settled product upon contract expiry, the FSP is based on the Bond Basket of the futures contract, which is determined and announced on the last trading day (“LTD”) (the second Friday of contract month) for each contract. If the LTD is not a Trading Day or it falls on a Chinese Mainland public holiday, the LTD shall be the preceding Trading Day which is also a business day in Chinese Mainland.

ChinaBond Pricing Center Co., Ltd (“CBPC”) is a benchmark pricing platform for bonds with its data widely used by both onshore and offshore participants. The HKFE Clearing Corporation Limited (“HKCC”) will determine the FSP for each contract which shall be the reference price of the relevant Bond Basket provided by CBPC on the LTD. The formula of FSP is as follows:

The Bond Basket will be confirmed and published on HKEX’s website by day-end on the Bond Basket Confirmation Day (a day which is 20 HKFE trading days prior to the Last Trading Day of such contract). If such a day is not also a CIBM trading day, the Bond Basket Confirmation Day will be the preceding HKFE trading day which is also a CIBM trading day. Once confirmed, the Bond Basket for a futures contract shall remain unchanged until contract expiry.

Prior to the Bond Basket announcement, HKEX may publish an indicative Bond Basket on HKEX's website daily to indicate what the confirmed Bond Basket could be. The constituents of the indicative Bond Basket may be adjusted in response to changes in liquidity rankings.

You may reference the below for Bond Basket announcement illustration:

The methodology will be reviewed from time to time to ensure the Bond Basket remains suitable and representative, allowing market participants to achieve their hedging / trading objectives.

The Bond Basket constituents and other relevant information of each futures contract is available under the “Bond Basket Information” section of the HKEX 5-Year China Government Bond Futures product webpage.

The HKEX’s 5-Year CGB Futures will be a Holiday Trading Product (“H Product”), it will follow the same trading calendar for other H Products and be traded on all weekdays (Monday to Friday) except New Year’s Day. Only Holiday Trading Exchange Participants can trade the H Product.

The trading hours will be from 9:30 a.m. to 4:30 p.m. After-Hours trading is not applicable at this stage.

Please refer to HKEX’s Trading Calendar webpage for further details.

Investors can file error trade claims to the Exchange if the trades deviate from the predefined Error Trade Price Parameters. The error trade parameter is 2% from Notation Price. Large-Scale Error Trade claims (“LET”) are also available. HKEX will consider factors such as the number of trades, counterparties, and contract series involved, to determine whether the claim should be handled as a LET claim. A product specific requirement for LET is that the LET price must deviate at least 4% from the Notation Price.

Block trades consist of large buy and sell orders that are privately negotiated outside of the public auction market. The minimum volume threshold for a block trade is set at 50 contracts, and the permissible price range for these trades is within 2%.

Please refer to HKEX’s Block Trade Facility webpage for further details.

HKATS set order size limits for each product to maintain market integrity. Orders that exceed the prescribed limit will be rejected by the system. The maximum order size limit for entering orders into HKATS is 1,000 contracts.

Please refer to HKEX’s Order Size Limit webpage for further details.

HKEX has appointed Liquidity Providers (“LP”) and Active Traders (“AT”) to support the product. LP are responsible for providing continuous two-way price quotations for all outstanding futures contracts, thereby facilitating trading activities. AT contributes to building stable liquidity for investors.

Please refer to the Liquidity Providers section of HKEX’s CGB Futures product webpage for further details.

Exchange Participants (“EP”) are required to adhere to position limits. For the 5-Year HKEX's CGB Futures, the position limit is set at 22,000 net contracts in all Contract Months combined, per Exchange Participant for the Exchange Participant’s own behalf; and 22,000 net contracts in all Contract Months combined per Client.

EP holding positions in excess of the Reporting Level for its own account or for any client shall file a LOP report. The threshold for LOP reporting for HKEX's CGB Futures is 2,500 open contracts in any one Contract Month, per EP for the EP’s own behalf; and 2,500 open contracts in any one Contract Month per Client.

Please refer to HKEX’s Large Open Positions and Position Limits webpage for further details.

The daily settlement price of the product is determined based on the latest available market price before Market closes, if it is not available the daily settlement price shall be calculated in accordance with the HKCC’s waterfall methodology.

Similar to other HKFE products, HKCC shall calculate the margin requirements of its participants at the end of each trading day.

Chinese Mainland holiday margin will be implemented during trading days over Chinese Mainland holidays. It will be different to the margin level on normal trading days to cater for the overnight risks in the onshore market.

Please refer to the Margin table section of HKEX’s CGB Futures product webpage for further details.

Acceptable collaterals for initial margin include cash collateral (in HKD, EUR, RMB, and USD) and non-cash collateral (such as Exchange Fund Bills and Notes, and US Treasuries). For variation adjustment, only cash collateral in the settlement currency (i.e. RMB) is accepted.

When the currency of the cash or non-cash collateral is different from the settlement currency of the contract, a haircut will be applied to the collateral at a pre-determined rate.

HKEX’s website contains the necessary information in relation to the futures contract as well as its Bond Basket. Participants may refer to information vendors’ platform for China Government Bond data, where the historical Bond Basket and theoretical contract price can be constructed and calculated accordingly.

Eligibility is consistent to HKFE’s current guidelines for listed derivatives; investors may refer to HKFE’s rules and procedures for requirements. EPs shall perform due diligence on their clients to ensure trading eligibility. Investors should also perform their own trading eligibility assessment.

For instance, HKEX’s CGB Futures are considered to be foreign security futures products by the U.S. SEC and the U.S. CFTC. As the underliers of HKEX’s CGB Futures are bonds issued by a foreign government eligible to be registered with the U.S. SEC under Schedule B of the Securities Act of 1933, HKEX’S CGB Futures are qualified to be exempted from registration by the U.S. SEC under its order issued on 30 June 2009 (the “SEC Order”). Only eligible U.S. market participants (primarily “qualified institutional buyers”) may trade these foreign security futures products in accordance with the terms and conditions of the SEC Order and subsequent guidance issued by the U.S. CFTC in 2010. U.S. persons and persons located in the United States should review carefully the eligibility requirements and make their own determination. Additional information is available at HKEX’s CGB Futures product webpage.