The Board of Directors of Hong Kong Exchanges and Clearing Limited (HKEx) has approved a plan to invite applications for non-transferable Hong Kong Futures Exchange (HKFE*) Trading Rights from members of the Chinese Gold and Silver Exchange Society (CGSES) or their designated affiliates to encourage gold market professionals’ participation in the trading of the gold futures that will be reintroduced on the HKFE on 20 October.  The plan requires regulatory approval of the related amendments to the HKFE Rules.

Under the plan, applicants must be licensed corporations under Section 116(1) of the Securities and Futures Ordinance for Type 2 regulated activity and will be required to apply to become an HKFE Exchange Participant as well as an HKFE Trading Right holder.  In addition, the applicant must have appeared on the CGSES member list as of the date of the invitation letter, which will be issued after the plan has received regulatory approval.

The plan calls for an application deadline of 20 April 2010, 18 months after the relaunch date for gold futures.  A successful applicant will be charged a fee of $25,000 for a non-transferable HKFE Trading Right.  HKFE Trading Rights issued to eligible CGSES members or their designated affiliates under the arrangement will have the same status as other non-transferable HKFE Trading Rights and holders will have the right to trade any HKFE product.

* HKFE is a wholly-owned subsidiary of HKEx