HKEx Receives Regulatory Approval for Launch of First Exchange-Traded RMB Currency Futures Settled in RMB

Products

28 May 2012

Hong Kong Exchanges and Clearing Limited (HKEx) has received approval from the Securities and Futures Commission to offer Renminbi (RMB) currency futures and plans to introduce them in the third quarter of this year, subject to market readiness. They will be the first exchange-traded currency futures settled in RMB.

HKEx's RMB currency futures will require delivery of US dollars (USD) by the seller and payment of the Final Settlement Value in RMB by the buyer at maturity. Contracts will be quoted in RMB per USD (for example, RMB 6.2500 per USD) and margined in RMB, with the trading and settlement fees charged in RMB. The final settlement price of the contracts will be based on the spot USD/CNY(HK) fixing published by the Treasury Markets Association (TMA) at 11:15 am on the Last Trading Day* (the fixing is available on TMA’s website). The contract specifications are attached below.

HKEx has announced plans for a RMB readiness test on 30 June and Exchange Participants are strongly encouraged to join the test.

The launch date of RMB currency futures will be announced in due course.

For additional information, please refer to HKEx’s 19 April news release, “HKEx Announces Plans for Renminbi Futures”, which is on the HKEx website.

* The Last Trading Day is two business days prior to the Final Settlement Day, which is the third Wednesday of the Contract Month.

Contract Specifications for US Dollar vs Renminbi (Hong Kong) (“USD/CNH”) Futures

The following Contract Specifications shall apply to the USD/CNH Futures Contract:

Contract Size	USD100,000
Contract Months	Spot month, the next three calendar months and the next three calendar quarter months (i.e. quarter months are March, June, September and December).The Chief Executive may, in consultation with the Commission, introduce additional Contract Months for trading from time to time as he considers appropriate.
Price Quotation	RMB per USD (e.g. RMB 6.2486 per USD)
Minimum Fluctuation	RMB 0.0001 (4 decimal places)
Tick Value	RMB 10
Contracted Price	The price at which a USD/CNH Futures Contract is registered by the Clearing House
Contracted Value	Contracted Price multiplied by the Contract Size (e.g. RMB 6.2486 x 100,000)
Trading Hours	9:00 a.m. – 4:15 p.m. (Hong Kong time) There is no trading after 12:00 noon on the eves of Christmas, New Year and Lunar New Year. The trading hours on those three days shall be 9:00 a.m. – 12:00 noon (Hong Kong time)
Trading Hours on the Last Trading Day	9:00 a.m. – 11:00 a.m. (Hong Kong time)
Trading Method	The Exchange’s Automated Trading System (HKATS)
Position Limits	8,000 net contracts in all Contract Months combined and no more than 2,000 open contracts in the Spot Month Contract during the five Hong Kong Business Days up to and including the Last Trading Day per Exchange Participant for the Exchange Participant’s own behalf; and 8,000 net contracts in all Contract Months combined and no more than 2,000 open contracts in the Spot Month Contract during the five Hong Kong Business Days up to and including the Last Trading Day, per Client
Large Open Positions	500 open contracts, in any one Contract Month, per Exchange Participant for the Exchange Participant’s own behalf; and 500 open contracts, in any one Contract Month, per Client
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
Final Settlement Value	Contract Size x Final Settlement Price
Final Settlement Day	The third (3rd) Wednesday of the Contract Month. If it is not a Hong Kong Business Day, the Final Settlement Day shall be the next Hong Kong Business Day
Last Trading Day	The Last Trading Day of a Contract shall be two Hong Kong Business Days prior to the Final Settlement Day
Final Settlement Price	Spot USD/CNY(HK) fixing published by the Hong Kong Treasury Markets Association at 11:15 a.m. on the Last Trading Day
Trading Fee (per contract per side)	Exchange Fee (in RMB) RMB 8.00 The amount indicated above is subject to change from time to time
Levies (per contract per side)	Investor Compensation Levy are payable at the rate or of the amount prescribed from time to time pursuant to the Securities and Futures Ordinance
Commission Rate	Negotiable

Ends

Updated 28 May 2012