Hong Kong Exchanges and Clearing Limited (HKEx) announced the arrangements for the adjustment to the contract terms of all open Industrial and Commercial Bank of China (ICBC) futures and options contracts in existence after the market close on 19 November 2010, the business day immediately before the ex-rights day, which is 22 November 2010, to account for ICBC’s 0.45 H rights shares for every 10 existing H shares.
Highlights of the adjustment arrangements are set forth below. Investors should consult their brokers for further details, or if they have any questions regarding the adjustment.
ICBC Futures
Adjustment Procedures
Adjustments will be made to the open positions of ICBC futures contracts which exist after the market close on 19 November 2010, the business day immediately before the ex-rights day. The details of the adjustment procedures are as follows:
|
Adjustment Term |
Formula |
Remarks |
|
Adjustment Ratio (AR) |
10 old shares + (0.45 new shares x $3.49 / $S*)
10 old shares + 0.45 new shares
|
Rounded to the nearest 4 decimal places.
Adjustment will only be made if the AR is smaller than 1.
|
|
Adjusted Contracted Price (ACP) |
Contract price of outstanding futures contract x
AR
|
Rounded to the nearest 2 decimal places.
|
|
Adjusted Contract Multiplier (ACM) |
Contracted price of outstanding futures contract x (1,000 shares / ACP)
|
Rounded to the nearest 4 decimal places.
|
| * |
Where $3.49 is the issue price for the new shares and $S is the underlying stock closing price on the business day (19 November 2010) prior to the ex-rights day. |
Trading of Adjusted and Standard Contracts
After the market close on 19 November 2010, the business day immediately before the ex-rights day, the open positions will be transferred to the adjusted futures contracts. In addition, new contracts based on the standard contract multiplier will be introduced for trading on the ex-rights day, 22 November 2010. Details of the adjusted and standard contracts available for trading on and after the ex-rights day are shown below:
|
Contract |
Trading Symbol |
Contract Multiplier
(Shares) |
Availability for Trading |
Addition of New Futures Contracts
on and after the Ex-rights day |
|
Adjusted |
ICA
|
ACM |
From ex-rights day to
29 June 2011 |
No |
|
Standard |
ICB
|
1,000 |
From ex-rights day onwards |
Yes |
Investors should note that the cash settlement amount of adjusted and standard futures contracts on the last trading day will be calculated using their respective contract multipliers. There will not be any changes to the number of open positions and other contract terms after the transfer of positions.
ICBC Options
Adjustment Procedures
Adjustments will be made to the open positions of ICBC options contracts which exist after the market close on 19 November 2010, the business day immediately before the ex-rights day. The details of the adjustment procedures are as follows:
|
Adjustment Term |
Formula |
Remarks |
|
Adjustment Ratio (AR) |
10 old shares + (0.45 new share x $3.49 / $S*)
10 old shares + 0.45 new share
|
Rounded to the nearest 4 decimal places.
Adjustment will only be made if the AR is smaller than 1. |
|
Adjusted Exercise Price (AEP) |
Exercise price of outstanding option series x
AR |
Rounded to the nearest 2 decimal places. |
|
Adjusted Contract Size (ACS) |
Exercise price of outstanding option series x
(1,000 shares / AEP) |
Rounded to the nearest 4 decimal places. |
| * |
Where $3.49 is the issue price for the new shares and $S is the underlying stock closing price on the business day (19 November 2010) prior to ex-rights day.
|
Trading of Adjusted and Standard Contracts
After the market close on 19 November 2010, the business day immediately before the ex-rights day, the open positions will be transferred to the adjusted option series. In addition, new option series based on the standard contract size will be introduced for trading on the ex-rights day, 22 November 2010. Details of the adjusted and standard contracts available for trading on and after the ex-rights day are shown below:
|
Contract |
Trading Symbol |
Contract Size(Shares) |
Availability for Trading |
Addition of New Option Series
on and after the Ex-rights day |
|
Adjusted |
ICA
|
ACS |
From ex-rights day to
29 September 2011 |
No |
|
Standard |
ICB
|
1,000 |
From ex-rights day onwards |
Yes |
Investors should note that the adjusted and standard option series have different contract sizes. There will not be any changes to the number of open positions and other contract terms after the transfer of positions.
Ends