Bringing you live news and features since 2013
Bringing you news, views and analysis since 2013

33395

HKEX launches new products and microstructure enhancements to MSCI index derivatives suite

RELATED TOPICS​

Hong Kong Exchanges and Clearing Limited (HKEX) is adding new products and making microstructure enhancements to its MSCI index derivatives suite.HKEX’s wholly-owned subsidiary, Hong Kong Futures Exchange Limited (HKFE), has expanded its licensing agreement with MSCI Limited to include the broad-based MSCI Taiwan 25/50 Index, and plans to launch US-dollar (USD) denominated MSCI Taiwan 25/50 Index Futures and MSCI Taiwan 25/50 Net Total Return Index Futures (collectively, MSCI Taiwan 25/50 Index Futures) on 28 September 2020, subject to regulatory approvals.

HKEX Head of Markets, Wilfred Yiu, says: “HKEX’s MSCI Taiwan equity index futures are geographically the closest offshore traded futures to the Taiwan market, offering investors the opportunity to optimise latency and enhance price discovery.

“With these latest products, we will complete the current phase of the MSCI futures suite and actively help support our customers in migrating their open interest to HKEX. This reflects HKEX and MSCI’s commitment to building Hong Kong’s derivatives market and to supporting the global trading community in the region.”

To facilitate price discovery of the existing MSCI Taiwan (USD) Index Futures and MSCI Taiwan Net Total Return (USD) Index Futures, a pre-open trading session for these contracts will be introduced starting at 8:30am Hong Kong time and the opening of the trading session will be advanced to 8:45am starting on 28 September 2020, subject to regulatory approvals.

The 100 per cent trading fee waiver for the MSCI Taiwan (USD) Index Futures and MSCI Taiwan Net Total Return (USD) Index Futures, effective on 17 August 2020, as well as the new opening hours, will also apply to the MSCI Taiwan 25/50 Index Futures after the contracts are launched.

In addition, HKFE is working with the Securities and Futures Commission to enhance its Capital-Based Position Limit (CBPL) framework, targeting late August 2020, subject to regulatory approvals. The enhancements will ensure the risk exposures of Clearing Participants are commensurate with their financial strength whilst providing more capacity for activities such as migrating their book of MSCI index derivatives to Hong Kong.

In May 2020, HKFE signed a licensing agreement with MSCI to license a suite of MSCI indexes in Asia and Emerging Markets for the launch of 37 futures and options contracts in Hong Kong. So far, 33 of these contracts have launched on HKEX. HKEX is adding two more products to allow investors to migrate open interest to HKEX ahead of February 2021, as part of the expansion of the number of MSCI-linked derivatives listed on HKEX.

HKEX expects the MSCI Taiwan 25/50 Index Futures to be eligible for Commodity Futures Trading Commission (CFTC) certification in the US, and to be offered to US persons shortly after launch.

Subject to the CFTC certifications, US persons including Regulated Investment Companies (RIC) in the US may trade the new futures contracts on HKEX. The MSCI Taiwan 25/50 Index takes into account certain investment limits that are imposed on RICs under the current US Internal Revenue Code. The new futures products will enable investors around the world to gain exposure to roughly 85 per cent of Taiwan’s listed companies by free float market capitalisation.

HKEX plans to complete the listing of all MSCI futures contracts in the current phase on 28 September 2020. It expects the three non-USD futures products, namely the MSCI Singapore Free (SGD) Index Futures, MSCI Japan (JPY) Index Futures, and MSCI Japan Net Total Return (JPY) Index Futures to launch on 28 September, subject to regulatory approvals.

Latest News

Bequant has announced that it has launched a new capital introduction platform designed specifically for..
ndosuez Wealth Management has announced the launch of Indosuez Funds - Chronos Green Bonds 2028,..
New global research from industry association Global Digital Finance (GDF) shows most major financial institutions..

Related Articles

graph
The exodus from hedge funds continues with investors questioning unswayed by relatively strong performance from the alternative asset class...
The exodus from hedge funds continues with investors questioning unswayed by relatively strong performance from the alternative asset class...
Waves
A joint statement from BNP Paribas Asset Management, Federated Hermes Limited, Mirova, Robeco and Storebrand Asset Management has been published, entitled The urgent need for better ocean-related data to make informed investment decisions...
A joint statement from BNP Paribas Asset Management, Federated Hermes Limited, Mirova, Robeco and Storebrand Asset Management has been published,..
Frozen soap bubble
From the end of this month, the UK’s Sustainability Disclosure Requirements (SDR) regime comes into force which the Financial Conduct Authority says has a simple aim: “Financial products that are marketed as sustainable should do as they claim and have the evidence to back it up.”..
From the end of this month, the UK’s Sustainability Disclosure Requirements (SDR) regime comes into force which the Financial Conduct..
Global ESG Investing
On May 15 Florida’s Republican Governor Ron DeSantis signed legislation that furthers his ongoing campaign to oppose the role of climate change and ESG factors in state policymaking...
On May 15 Florida’s Republican Governor Ron DeSantis signed legislation that furthers his ongoing campaign to oppose the role of..
Subscribe to the Institutional Asset Manager newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by