Hong Kong Futures Exchange (HKFE), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEx), and the SEHK Options Clearing House (SEOCH), a wholly-owned member of HKEx Group, have jointly announced the arrangements for adjustments to the contract terms of all open futures and options contracts on shares of HKEx before the market open on the ex-dividend date of Wednesday, 24 March 2004 to account for a proposed special dividend of $1.68 per share by HKEx.
Highlights of the adjustment arrangements to HKEx futures and options contracts are attached. Investors should consult their brokers for further details.
For ordinary dividends, HKFE and SEOCH generally will not make capital adjustments to stock futures and options contracts under a policy effective on 8 December 2003. For other cash distributions such as cash bonuses and special dividends, they will only make an adjustment when payment is two per cent or more of the underlying share's closing price on the day the distribution is announced. In addition, both HKFE and SEOCH reserve the right to consider capital adjustments under exceptional cash distribution circumstances on a case-by-case basis. The participants of HKFE and SEOCH were informed of this policy in early December 2003.
HKEx Futures Contracts
Immediately before the market open on 24 March 2004 (the ex-dividend date):
After the adjustments of all outstanding positions in HKEx futures contracts, which are expected to take effect on the ex-dividend date, there will be two sets of HKEx futures contracts. The adjusted contracts with trading symbol HEA and the standard contracts with trading symbol HEX will be available for trading in parallel. The adjusted contracts with the adjusted contract multiplier and the standard contracts with the standard contract multiplier of 2,000 shares of HKEx are distinct contracts.
HKEx Options Contracts
After the close of business on 23 March 2004: