Hong Kong Exchanges and Clearing Limited (HKEx) plans to introduce Renminbi (RMB) currency futures in the third quarter of this year, subject to regulatory approval and market readiness.
The planned USD/CNH futures contract* is designed to provide a way for investors to hedge RMB exposure.
HKEx's USD/CNH futures contract requires delivery of US dollars by the seller and payment of the Final Settlement Value in RMB by the buyer at maturity. Under HKEx’s plan, the contract will be quoted in RMB per US dollar, or USD (for example, RMB 6.2486 per USD) and margined in RMB, with the trading and settlement fees charged in RMB. Key proposed contract specifications are attached below.
HKEx has scheduled a market readiness test for the end of June and invited applications from potential market makers for USD/CNH futures.
"This initiative is part of our strategy to expand beyond equities and equity-related derivatives, offer a wide range of RMB-traded products and take advantage of the opportunities we see in fixed income, currencies and commodities," said HKEx Chief Executive Charles Li. "It also reflects our desire to support Hong Kong’s further development as an offshore RMB centre."
"We have been working with our Participants and information vendors to prepare our derivatives market for RMB-traded products and look forward to introducing our derivatives market’s first RMB-traded futures product," said Calvin Tai, HKEx's Head of Trading.
* USD - US dollar; CNH - Renminbi traded in Hong Kong.
Key Proposed Contract Specifications
- Trading Symbol: CUS
- Contract Month: Spot month, the next three calendar months and the next three calendar quarter months
- Contract Size: USD100,000
- Price Quotation: RMB per USD (for example, RMB6.2486 per USD)
- Minimum Fluctuation: RMB0.0001 (4 decimal places)
- Trading Hours: 9:00 am – 4:15 pm (Hong Kong time) Monday – Friday, excluding Hong Kong’s public holidays; 9 am – 12:00 noon on the eves of Christmas, New Year and Lunar New Year
- Final Settlement Day: The third Wednesday of the Contract Month
- Last Trading Day: Two Hong Kong Business Days prior to the Final Settlement Day
- Final Settlement Price: To be determined by HKEx
- Settlement Method: Delivery of US dollars by the Seller and payment of the Final Settlement Value in RMB by the Buyer in accordance with the mechanism and provisions set forth in the Regulations for trading Currency Futures Contracts and the Clearing House Rules
- Exchange Fee (in RMB): To be announced
- Settlement Fee (in RMB): To be announced
- Commission Levy: Nil
All proposed contract specifications are in the circular.
Ends