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HKEX to Implement VCM and POS Enhancement in its Derivatives Market on 12 April

Market Operations
12 Mar 2021

Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to announce today (Friday) that it will implement enhancements to the Volatility Control Mechanism (VCM) and Pre-Opening Session (POS) in its derivatives market on 12 April 2021.

VCM Enhancement

The VCM is currently applied to the spot month and next calendar month contracts in the Hang Seng Index (HSI) Futures, Mini-Hang Seng Index (MHI) Futures, Hang Seng China Enterprises Index (HHI) Futures and Mini-Hang Seng China Enterprises Index (MCH) Futures, which only allows a maximum of one trigger per trading session. The enhancement will allow multiple triggers in each day trading session, to better safeguard market integrity.

POS Enhancement

Separately, a random cutoff mechanism will be introduced to the pre-opening session and the pre-open allocation session to the applicable products1 in the derivatives market for both morning and afternoon sessions. This enhancement aims to deter the possible gaming strategy of manipulating the Calculated Opening Price near the end of the auction process and also to encourage order input at an earlier stage. To facilitate the random cutoff, the pre-opening session will be shortened by one minute while the pre-open allocation session will be extended by one minute.

More details of the enhancements for Volatility Control Mechanism and Pre-Market Opening Session can be found on the HKEX website.

 

Note:

  1. POS is available for the trading of HSI, MHI, HHI and MCH futures contracts, MSCI Taiwan Index related futures contracts and Hang Seng TECH Index futures contracts

 

About HKEX

Hong Kong Exchanges and Clearing Limited (HKEX) is one of the world’s major exchange groups, and operates a range of equity, commodity, fixed income and currency markets.  HKEX is the world’s leading IPO market and as Hong Kong’s only securities and derivatives exchange and sole operator of its clearing houses, it is uniquely placed to offer regional and international investors access to Asia’s most vibrant markets.

HKEX is also the global leader in metals trading, through its wholly owned subsidiaries, The London Metal Exchange (LME) and LME Clear Limited.  This commodity franchise was further enhanced with the launch of Qianhai Mercantile Exchange (QME), in China, in 2018.

HKEX launched the pioneering Shanghai-Hong Kong Stock Connect programme in 2014, further expanded with the launch of Shenzhen Connect in 2016, and the launch of Bond Connect in 2017.

www.hkexgroup.com

 

Ends

Updated 12 Mar 2021