SEHK Options Clearing House Limited will adjust the contract terms of all open options contracts on shares of Hutchison Whampoa Limited (HWL) as at the close of business on May 15, 2000 to take account of the bonus share entitlement of one bonus share for ten existing shares of HWL as announced by HWL .
All HWL options contracts as of the close of business on May 15, 2000 will be adjusted by the adjustment ratio of 0.9091 pursuant to Rule 213 of the Options Clearing Rules. The adjusted exercise price for each contract will be 0.9091 (the adjustment ratio) times the old exercise price. The adjusted contract size will be the old contract value (1000 shares times the old exercise price) divided by the adjusted exercise price.
The adjustment process will be carried out after the close of business on May 15, 2000. Investors should consult their brokers for the adjustment result on or after May 16, 2000.
From May 16, 2000, the adjusted series will be denoted as Version 1. As a result of the adjustment, there will be odd lots and share fractions. Upon exercise, the fractional shares in each contract will be settled in cash on the day of exercise. The integral portion, including odd lots, will be settled in the Central Clearing and Settlement System. Price information on the Version 1 series will be displayed in Teletext pages 3075-6.
The new series of standard contract size, denoted as Version 0, will be generated in accordance with the Operational Trading Procedures after the capital adjustment. The standard contract size will be 1000 shares per contract. Price information on Version 0 series will be displayed in Teletext pages 3015- 6.
Version 1 and Version 0 series will be available for trading in parallel until all Version 1 series expire on Dec 29, 2000, when only Version 0 will remain.
The two versions are distinct series and positions under each version cannot be offset against each other. Investors should consult their options brokers for further details, and pay attention to the series specifications whenever dealing with HWL options contracts, particularly when placing orders or exercising instructions.
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Updated 07 May 2000