The Hong Kong Futures Exchange Limited (HKFE), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEx), received no-action relief from the US Commodity Futures Trading Commission (CFTC) on 26 September 2006 enabling the offer and sale in the US of futures contracts based on the FTSE/Xinhua China 25 Index (FXC) and the Hang Seng China Enterprises Index (HSCEI).

Exchange Participants (EPs) may now offer and sell futures contracts on FXC and HSCEI in the US based on the relevant CFTC rules. In addition, the contracts may be made available for trading through HKATS electronic terminals in the US in accordance with the terms and conditions of the no-action letter issued by the CFTC in June 2000. Interested parties may refer to the website of the CFTC (www.cftc.gov) for details.

HKEx strives to make its products as accessible to as many global investors as possible, and believes the markets for FXC Futures and HSCEI Futures will benefit from enhanced liquidity with the participation of US investors.  Similar no-action relief was granted to futures contracts based on the Hang Seng Index in June 1994.

The US is a major contributor to overseas investor trading in the local derivatives market, accounting for 26 per cent of turnover, according to the latest Derivatives Market Transaction Survey conducted by HKEx.

Background:

About FXC and FXC Futures

The FXC is a broad-based, modified-free-float-market-capitalisation-weighted security index, composed of 25 of the largest and most liquid Chinese common stocks (red chips and H shares) listed for trading on the Stock Exchange of Hong Kong (SEHK). FTSE/Xinhua Index Limited is responsible for the operation of the FXC. As of 28 September 2006, the total market capitalisation of the FXC was approximately US$470.5 billion.

FXC Futures commenced trading on the HKFE on 23 May 2005.

About HSCEI and HSCEI Futures

The HSCEI is a broad-based, modified-free-float-market-capitalisation-weighted index composed of all H-share common stocks that are listed on the SEHK and included in the Hang Seng Composite Index. The HSCEI is compiled and managed by HSI Services Limited. As of 28 September 2006, there were 37 stocks in the HSCEI, with a total market capitalisation of approximately US$242.3 billion.

HSCEI Futures commenced trading on the HKFE on 8 December 2003. For contract specifications, please see: http://www.hkex.com.hk/eng/prod/drprod/hshares/hhifut.htm.