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HKEX to Launch Mini USD/CNH Futures

Products
21 Jan 2021

  • Mini USD/CNH Futures to launch in the first half of 2021, with contract size of US$20,000
  • Developed in response to market demand from smaller corporates and individuals, allowing for more precise risk management
  • Complements existing HKEX RMB currency products, such as USD/CNH Futures and USD/CNH Options
 
Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to announce the launch of a cash-settled Mini USD/CNH (US dollar/Offshore Renminbi, or RMB) Futures contract -- a smaller-sized contract to complement the popular USD/CNH derivatives products, further diversifying HKEX’s suite of currency derivatives to support the risk-management needs of global investors.
 
“HKEX has been leading Hong Kong’s development as a global fixed-income and currency hub, and these currency derivatives products serve to underscore our commitment to further enhancing the breadth and attractiveness of our markets,” said HKEX Interim Chief Executive Calvin Tai.
 
“The new Mini USD/CNH Futures will expand HKEX’s Renminbi derivatives product suite, providing investors with an enhanced range of risk-management tools. Not only will this help them optimise their capital efficiency, but it will further support the continued internationalisation of the Renminbi,” added Mr Tai.
 
HKEX plans to launch the new Mini USD/CNH Futures in the first half of 2021, subject to market readiness.
 
The Mini USD/CNH Futures contract responds to demand from market participants, particularly medium-sized corporates and individuals, for cash-settled and smaller-sized contracts, helping investors to hedge the RMB currency risk of their positions in different assets, such as equities and commodities.
 
The contract size of Mini USD/CNH Futures is US$20,000, or one-fifth of the size of existing deliverable USD/CNH Futures offered by HKEX, allowing more precise hedging for market participants. The minimum investment will be lower than that of the existing deliverable USD/CNH Futures, as the required initial margin amount per contract will be reduced to around RMB2,000, subject to periodic adjustments.
 
HKEX launched the world’s first deliverable USD/CNH Futures contract in September 2012, and has seen strong growth in its turnover over the years, tracking the rising demand for RMB products. This contract is now one of the most actively-traded RMB futures contracts in the world, with open interest of 28,223 contracts (ie US$2.8 billion in notional amount) at the end of 2020, up 22 per cent from 2019.
 
HKEX has in recent years diversified its currency derivatives product offering with futures contracts on CNH currency pairs against the Japanese yen, Euro, and Australian dollar, USD-denominated CNH/USD Futures, USD/CNH Options, as well as futures on the Indian rupee against the USD and Offshore RMB.
 
Key features of Mini USD/CNH Futures

 

Mini USD/CNH Futures

Price Quotation

RMB per USD

Contract Size

US$20,000

Contract Months

Spot, next 3 calendar months and next 6 calendar quarter months

Settlement Method

Cash-settled in RMB

Trading Hours

8:30 a.m. – 4:30 p.m. (T Session)

5:15 p.m. – 3:00 a.m. (T+1 Session)

Last Trading Day (“LTD”)

Two Hong Kong Business Days prior to the third Wednesday of the Contract Month

LTD Trading Hours

8:30 a.m. – 11:00 a.m.

Final Settlement Price

USD/CNY(HK) Spot Rate published by the Hong Kong Treasury Markets Association (“TMA”) at or around 11:30 a.m. on the LTD

Final Settlement Day

The first Hong Kong Business Day after the LTD

Position Limits

 

Position delta for USD/CNH Futures, Mini USD/CNH Futures, CNH/USD Futures and USD/CNH Options combined of 8,000 long or short in all Contract Months combined

Large Open Position

2,500 open contracts, in any one Contract Month

Trading Fee

(per contract per side)

RMB1.60

Settlement Fee

(per contract per side)

RMB1.60

Commission Levy

Not applicable

 

Additional information of the Mini USD/CNH Futures is available in a circular issued today.

 

About HKEX

Hong Kong Exchanges and Clearing Limited (HKEX) is one of the world’s major exchange groups, and operates a range of equity, commodity, fixed income and currency markets. HKEX is the world’s leading IPO market and as Hong Kong’s only securities and derivatives exchange and sole operator of its clearing houses, it is uniquely placed to offer regional and international investors access to Asia’s most vibrant markets.

HKEX is also the global leader in metals trading, through its wholly owned subsidiaries, The London Metal Exchange (LME) and LME Clear Limited.  This commodity franchise was further enhanced with the launch of Qianhai Mercantile Exchange, in China, in 2018.

HKEX launched the pioneering Shanghai-Hong Kong Stock Connect programme in 2014, further expanded with the launch of Shenzhen Connect in 2016, and the launch of Bond Connect in 2017.

www.hkexgroup.com

 

Ends

Updated 21 Jan 2021