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HKEX Publishes Conclusions on Revising Position Limits and LOP Reporting Requirements

Market Operations
28 Jul 2022
  • HKEX will implement new 5-tier position limit regime for single stock options and futures markets
  • HKEX will remove additional position limits for flagship-minis
  • The effective date of the revised position limit requirements will be announced in due course

 

Hong Kong Exchanges and Clearing Limited (HKEX) today (Thursday) published conclusions to its consultation on the revision of: (1) the position limit regime for Single Stock Options (SSO) and Single Stock Futures (SSF); and (2) the additional position limits and Large Open Position (LOP) reporting requirements for mini-Hang Seng Index (mini-HSI) and mini-Hang Seng China Enterprises Index (mini-HSCEI) derivatives contracts (collectively, flagship-minis).

HKEX received 22 responses from a broad range of respondents. Having carefully considered each respondent’s views, HKEX has decided to adopt the proposals to revise the position limit regime for SSO and SSF; and to remove the additional position limits for its flagship-minis contracts. However, the Exchange will not at this stage proceed with the proposal to revise the LOP reporting requirements for its flagship-minis contracts.

HKEX Co-Chief Operating Officer and Head of Operations & Transformation John Buckley said: “Our proposals underscore HKEX’s commitment to continue to develop a strong, vibrant and sustainable derivatives market. A more robust position limit regime will provide enhanced capacity and flexibility for investors as they look to manage their market exposure, further facilitating market growth and consolidating Hong Kong’s position as the leading derivatives and risk-management hub of Asia. We would like to thank all the participants who provided their valuable feedback to the Exchange during this consultation process.”

Under the revised position limit regime:

  • Two additional tiers (ie 200,000 and 250,000 contracts) will be added to the existing three-tier SSO position limit model (ie 50,000, 100,000, 150,000 contracts).
  • The existing 5,000 contracts per expiry month SSF position limit model will be revised to a five-tier model with net position limits (ie 5,000, 10,000, 15,000, 20,000, and 25,000 contracts). A single contract month limit with 2 times the net position limit for all contract months combined will also be introduced.
  • The additional position limits that apply to flagship-minis contracts will be removed.

The effective date of the revised position limits will be announced in due course, subject to regulatory approval.

The Consultation Conclusions and copies of the respondents’ submissions are available on the HKEX website.

 

 

About HKEX

Hong Kong Exchanges and Clearing Limited (HKEX) is a publicly-traded company (HKEX Stock Code:388) and one of the world’s leading global exchange groups, offering a range of equity, derivative, commodity, fixed income and other financial markets, products and services, including the London Metals Exchange.

As a superconnector and gateway between East and West, HKEX facilitates the two-way flow of capital, ideas and dialogue between China and the rest of world, through its pioneering Connect schemes, increasingly diversified product ecosystem and its deep, liquid and international markets.

HKEX is a purpose-led organisation which, across its business and through the work of HKEX Foundation, seeks to connect, promote and progress its markets and the communities it supports for the prosperity of all.

www.hkexgroup.com

 

Ends

Updated 22 Nov 2022