Trading Arrangements

You can learn some basic features of a derivative warrants from its stock short name. Below are the naming conventions for reference.

You should note that the above naming conventions are applicable in most cases but not exclusive for all circumstances. The stock short names of derivative warrants indicate some basic information only. You should refer to the relevant listing documents of the product and consult your brokers or investment advisers before trading. Listing documents can be found at the HKEXnews website.

Investors can start to buy derivative warrants on the Exchange from the first listing day of the products. To initiate the listing process,  derivative warrants issuers submit product term sheets to the Exchange for approval on the launch day (“Launch Date”). Commencing from 13 July 2020, the listing cycle has been shortened from five trading days to three trading days following the product launch.

For example:

The listing date will be postponed due to an exceptional situation causing the stock market to (i) close for the entire day; or (ii) close prior to its regular hours on any of the two trading days between launch date and the scheduled listing date. No further notice or announcement will be published in respect of such postponement. Below is an illustrative example in respect of a product launched on Monday with a listing date on Thursday:

Trading of derivative warrants will remain available during typhoon signal number 8 or above or the black rainstorm warning issued by the Hong Kong Observatory, or ‘extreme conditions’ issued by the Hong Kong Special Administrative Region Government.  In addition, structured products issuers will provide active quotes and quote requests for structured products as usual.

However, the Exchange will assess specific circumstances in consultation with the Government and the Securities and Futures Commission to decide whether there is an exceptional situation that warrants the markets, including structured products market, to be closed.  In this case, the Exchange will make relevant announcements as required to provide the market with advanced notice and updates.

Yes. Similar to the trading of shares, transaction fees currently include:

(a)  brokerage commission and fees charged by the relevant broker;

(b)  the transaction levies imposed by the SFC and the Accounting and Financial Reporting Council of Hong Kong; and

(c)  a trading fee charged by the Exchange.

No. Currently, all derivative warrants traded on the Exchange are cash settled and trading in such cash settled derivative warrants are not subject to any stamp duty.

No, trading of derivative warrants linked to the affected indices will be halted as soon as practicable after publication of a notice of such failure by Hang Seng Indexes Company on its website.  Where such notice is published within 15 minutes before the end of a continuous trading session, trading halt will take place in the next continuous trading session.

Trading of the derivative warrants will resume as soon as practicable (which may occur during a trading session) after publication of notice of recovery of normal index level dissemination by Hang Seng Indexes Company on its website.  Where such notice is published within 15 minutes before the end of a continuous trading session, trading resumption will take place in the next continuous trading session.

No, outstanding orders will not be automatically cancelled and will remain valid when trading is resumed on the same day.  Investors should contact their brokers before trading resumption if they wish to cancel their orders of the derivative warrants.