Market Making/Liquidity Providing Obligations and Incentives

Introduction

HKEX’s derivatives market has both Market Maker (MM) Program and / or Liquidity Provider (LP) Program for different derivatives products. The MM obligations and MM incentives under the MM Program for futures contracts and index options contracts are set out in the HKFE Rules. The MM obligations and MM incentives under the MM Program for stock options contracts are set out in the Options Trading Rules of the Stock Exchange. LP Program is a commercial arrangement for the Exchange to appoint LPs to provide liquidity for new products, which require more flexibility in terms of LP obligations and LP incentives and are not stipulated in the exchange rules and procedures.

The derivatives products with MM Program and / or LP Program are as follows:

Product Type	Contract	MM Program	LP Program
Futures Contracts	Stock Index Futures	HSI Volatility Index Futures HSI Dividend Point Index Futures HSCEI Dividend Point Index Futures Hang Seng Mainland Oil & Gas Index Futures Hang Seng Mainland Banks Index Futures Hang Seng Mainland Properties Index Futures Hang Seng Index (Gross Total Return) Index Futures Hang Seng Index (Net Total Return) Index Futures Hang Seng China Enterprises Index (Gross Total Return Index) Futures Hang Seng China Enterprises Index (Net Total Return Index) Futures	Hang Seng TECH Options MSCI Asia ex Japan Net Total Return (USD) Index Futures MSCI Asia ex Japan Net Total Return (USD) Index Futures Calendar Spread MSCI Taiwan (USD) Index Futures MSCI Taiwan (USD) Index Futures Calendar Spread MSCI Taiwan Net Total Return (USD) Index Futures MSCI Taiwan Net Total Return (USD) Index Futures Calendar Spread MSCI Japan Net Total Return (USD) Index Futures MSCI Japan Net Total Return (USD) Index Futures Calendar Spread MSCI India Net Total Return (USD) Index Futures MSCI India Net Total Return (USD) Index Futures Calendar Spread MSCI China Free Net Total Return (USD) Index Futures MSCI China Free Net Total Return (USD) Index Futures Calendar Spread MSCI Indonesia Net Total Return (USD) Index Futures MSCI Indonesia Net Total Return (USD) Index Futures Calendar Spread MSCI Thailand Net Total Return (USD) Index Futures MSCI Thailand Net Total Return (USD) Index Futures Calendar Spread MSCI Malaysia Net Total Return (USD) Index Futures MSCI EM Asia Net Total Return (USD) Index Futures MSCI EM Asia Net Total Return (USD) Index Futures Calendar Spread MSCI Hong Kong Net Total Return (USD) Index Futures MSCI Philippines Net Total Return (USD) Index Futures MSCI Emerging Markets Net Total Return (USD) Index Futures MSCI Emerging Market Net Total Return (USD) Index Futures Calendar Spread MSCI Emerging Markets (USD) Index Futures MSCI Emerging Markets (USD) Index Futures Calendar Spread MSCI Taiwan 25/50 (USD) Index Futures MSCI Taiwan 25/50 (USD) Index Futures Calendar Spread MSCI Singapore Free (SGD) Index Futures MSCI Taiwan (USD) Index Futures Calendar Spread MSCI Taiwan 25/50 (USD) Index Futures Calendar Spread MSCI China (USD) Index Futures MSCI China Net Total Return (USD) Index Futures MSCI China Net Total Return (USD) Index Futures Calendar Spread MSCI China A 50 Connect (USD) Index Futures Calendar Spread MSCI China A 50 Connect (USD) Index Futures
	Stock Futures	Single Stock Futures	N/A
	Currency Futures	USD/CNH Futures EUR/CNH Futures JPY/CNH Futures AUD/CNH Futures CNH/USD Futures	USD/CNH Futures EUR/CNH Futures JPY/CNH Futures AUD/CNH Futures CNH/USD Futures INR/USD Futures INR/CNH Futures
	Interest Rate Futures	1-month HIBOR Futures 3-month HIBOR Futures	N/A
	Commodity Futures	N/A	USD London Aluminum Mini Futures USD London Zinc Mini Futures USD London Copper Mini Futures USD Gold Futures USD Silver Futures
Option Contracts	Stock Index Options	Hang Seng Index (HSI) Options Hang Seng Index Futures Options Weekly Hang Seng Index (WHSI) Options Mini-Hang Seng Index (Mini-HSI) Options Hang Seng China Enterprises Index (HSCEI) Options Hang Seng China Enterprises Index Futures Options Weekly Hang Seng China Enterprises Index (WHSCEI) Options Mini-Hang Seng China Enterprises Index (Mini-HSCEI) Options Hang Seng TECH Index (HTI) Options Hang Seng TECH Index Futures Options	N/A
	Stock Options	Single Stock Options	N/A
	Currency Options	N/A	USD/CNH Options

Quota for Liquidity Providers on HKFE products

Contracts	Tier	Session	Total Quota	Remaining Quota
Basket of MSCI Index Futures: T Session: 17 MSCI Index Futures T+1 Session: 11 MSCI Index Futures Calendar Spread: 11 MSCI Index Futures	1	T , T+1 & Calendar Spread	1	0
MSCI Taiwan (USD) Index Futures	2	T	5	0
MSCI Taiwan (USD) Index Futures	3	T+1	3	0
MSCI Taiwan (USD) Index Futures - Calendar Spread	2	T	3	0
HS TECH Index Options	2	T	Nil	N/A

Eligibility

Product Type	MM	LP
HKFE Futures Contracts and Option Contracts	HKFE Exchange Participant (EP), or Corporate entity as client of EP must has an association to the EP and also must meet at least one of the requirements: i) be a regulated entity by the Securities and Futures Commission (SFC) to deal in securities or futures contracts, except as an introducing agent ; or licensed for similar activity by an overseas authority having a Memorandum of Understanding with SFC; Ii) be a licensed bank; Iii) have a credit rating of A- or above (S&P) or A3 or above (Moody’s); or iv) have a minimum paid-up capital of HK$50 mil. and minimum shareholder funds of HK$100 mil.	HKFE Exchange Participant or the client of the Exchange Participant
SEHK Stock Options	Option Trading Exchange Participant (Affiliates of Option Trading Exchange Participant can be stock options Market Maker via the Option Trading Exchange Participant as its agent)	N/A

For the List of Market Makers/ Liquidity Provider

Please refer the hyperlink below:

https://www.hkex.com.hk/Products/Listed-Derivatives/Market-Maker-Program/List-of-Market-Makers_Liquidity-Providers?sc_lang=en

LP and market making obligations and incentives

The following tables summarise the market making obligations and incentives in futures and options contracts:

Stock Index Futures (Except Sector Index Futures, Dividend Point Index Futures, Volatility Index Futures and HSI and HSCEI Total Return Index Futures, please refer the tables below for the requirements)

Market Making Obligation	Provision of Continuous Quotes (CQ)	Response to Quote Requests (QR)
Assigned Contract	Not less than 2 contract months [i.e. Spot month and the next calendar month]	All contract months
Trading Requirement	Provision of CQ for not less than 70% of the trading hours in each calendar month	Response to not less than 70% of the QR in each calendar month
Maximum Time Limit for Responding to QR	N/A	Response to a QR within 20 seconds of the QR
Minimum Display Time	Not fewer than 10 seconds, unless a change in the level of the underlying index occurs during the 10 seconds display period, in which case, market makers may change their quotes
Maximum Bid/Offer Spread	Not greater than 15 minimum fluctuations
Minimum Quote Size	Not fewer than 5 contracts

Sector Index Futures

Market Maker Obligations

Market Making
Obligation

Provision of
Continuous Quotes (CQ)

Response to
Quote Requests (QR)

Assigned Contract

Not less than 2 contract months
[i.e. Spot month and the next calendar month]

All contract months

Trading Requirement

Provision of CQ for not less than
70% of the trading hours in each calendar month

Response to not less than 70%
of the QR in each calendar month

Maximum Time Limit for Responding to QR

N/A

Response to a QR within 20 seconds of the QR

Minimum Display Time

Not fewer than 10 seconds, unless a change in the level of the underlying index occurs during the 10 seconds display period, in which case, market makers may change their quotes

Maximum Bid/Offer Spread

Hang Seng Mainland Oil & Gas Index Futures	4 Index points or 0.2% of bid price, whichever is higher
Hang Seng Mainland Banks Index Futures	6 Index points or 0.2% of bid price, whichever is higher
Hang Seng Mainland Properties Index Futures	7 Index points or 0.2% of bid price, whichever is higher

Minimum Quote Size

Not fewer than 5 contracts

Dividend Index Point Futures

Market Making Obligation	Provision of Continuous Quotes (CQ)	Response to Quote Requests (QR)
Assigned Contract	All five yearly contracts
Trading Requirement	Provision of CQ for not less than 70% of the trading hours in each calendar month	Response to not less than 70% of the QR in each calendar month
Maximum Time Limit for Responding to QR	N/A	Response to a QR within 20 seconds of the QR
Minimum Display Time	Not fewer than 10 seconds, unless a change in the level of the underlying index occurs during the 10 seconds display period, in which case, market makers may change their quotes
Maximum Bid/Offer Spread	30.00 points or 10% of bid price, whichever is higher
Minimum Quote Size	50 contracts

HSI Volatility Index Futures

Market Making Obligation	Provision of Continuous Quotes (CQ)	Response to Quote Requests (QR)
Assigned Contract	All contract months (Spot month and the next two calendar months)
Trading Requirement	Provision of CQ for not less than 70% of the trading hours in each calendar month	Response to not less than 70% of the QR in each calendar month
Maximum Time Limit for Responding to QR	N/A	Response to a QR within 20 seconds of the QR
Minimum Display Time	Not fewer than 10 seconds, unless a change in the level of the underlying index occurs during the 10 seconds display period, in which case, market makers may change their quotes
Maximum Bid/Offer Spread	0.50 points or 5% of bid price, whichever is higher
Minimum Quote Size	Not fewer than 5 contracts

Hang Seng Index and Hang Seng China Enterprises Index Total Return Index Futures

Obligation

Provision of
Continuous Quotes (CQ)

Response to
Quote Requests (QR)

Assigned Contract

Not less than 2 contract months
[i.e. Spot month and the next calendar month]

All contract months

Trading Requirement

Provision of CQ for not less than
70% of the trading hours in each calendar month

Response to not less than 70%
of the QR in each calendar month

Maximum Time Limit for Responding to QR

N/A

Response to a QR within 20 seconds of the QR

Minimum Display Time

Not fewer than 10 seconds, unless a change in the level of the underlying index occurs during the 10 seconds display period, in which case, market makers may change their quotes

Maximum Bid/Offer Spread

Hang Seng Index (Gross Total Return Index) Futures Contracts	600.00 Index points or 1% of bid price, whichever is higher
Hang Seng Index (Net Total Return Index) Futures Contracts	600.00 Index points or 1% of bid price, whichever is higher
Hang Seng China Enterprises Index (Gross Total Return Index) Futures Contracts	200.00 Index points or 1% of bid price, whichever is higher
Hang Seng China Enterprises Index (Net Total Return Index) Futures Contracts	200.00 Index points or 1% of bid price, whichever is higher

Minimum Quote Size

1 contract

Stock Index Options (Excluding Weekly Index Options)

There are three types of market makers in HKEX’s stock index options market:
- Primary Market Maker (PMM);
- Market maker providing continuous quotes (CQMM); and
- Market maker responding to quote request (QRMM).

For details of PMM Program, please refer to the hyperlink below:

http://www.hkex.com.hk/eng/market/dv_tradfinfo/pmm.htm

Below is a summary of the CQMM and QRMM program (T Session):

Market Making
Obligation

Provision of
Continuous Quotes (CQ)

Response to
Quote Requests (QR)

Assigned Series

Not less than 50 option series* (except that, not less than 25 option series for Mini-Hang Seng Index Options and Mini-HSCEI Index Options**)

All QR issued (except for QR in long dated index options)

Trading Requirement

Provision of CQ not less than 70%
of the trading hours in each calendar month

Response to not less than 70%
of the QR in each calendar month

Maximum Time Limit for
Responding to QR

N/A

Response to a QR within 20
seconds of the QR

Minimum Display Time

Not less than 20 seconds, unless a change in the price level of the Spot Month Futures Contracts of the underlying index occurs during the 20 seconds display period, in which case, market makers may change their quotes

Maximum bid/offer spread
(Except for Long Dated Index Options)

For HSI Options, HSCEI Options and HS TECH Index Options:

Month	Price	Max. bid/offer spread
1^st, 2^nd, 3^rd, 4^th calendar	1-750 points	Max (30 points, 10% of bid)
1^st, 2^nd, 3^rd, 4^th calendar	> 750 points	75 points
1^{st ,} 2^nd quarter	1-750 points	Max (40 points, 20% of bid)
1^{st ,} 2^nd quarter	> 750 points	150 points
3^rd quarter	1-750 points	Max (50 points, 25% of bid)
3^rd quarter	> 750 points	200 points

For Mini-HSI Options and Mini-HSCEI Options:

Month	Price	Max. bid/offer spread
1^st, 2^nd calendar	1-750 points	Max (30 points, 10% of bid)
1^st, 2^nd calendar	> 750 points	75 points
1^st quarter	1-750 points	Max (40 points, 20% of bid)
1^st quarter	> 750 points	150 points
2^nd quarter	1-750 points	Max (40 points, 20% of bid)
2^nd quarter	> 750 points	150 points

Minimum Quote Size

For HSI Options, HSCEI Options and HSTECH index Options

Month	Min. Quote Size
1^st, 2^nd, 3^rd, 4^th calendar	5 contracts
1^{st ,} 2^nd, 3^rd quarter	3 contracts

For Mini-HSI Options and Mini-HSCEI Options

Month	Min. Quote Size
1^st , 2^nd calendar	5 contracts
1^{st ,} 2^nd quarter	3 contracts

* For HSI Options, HSCEI Options and HS TECH Index Options, CQMM should provide bid/offer quotes in at least 50 option series chosen from the following selection pool:

Contract Month	Option Series	Series For Selection
Contract Month	Option Series			Call	Put
Spot month	Out-of-the-Money	15	15
Spot month	In-the-Money	2	2
2^nd Calendar Month	Out-of-the-Money	15	15
2^nd Calendar Month	In-the-Money	2	2
3^rd Calendar Month	Out-of-the-Money	15	15
3^rd Calendar Month	In-the-Money	2	2
4^th Calendar Month	Out-of-the-Money	10	10
4^th Calendar Month	In-the-Money	2	2
1st Quarter Month	Out-of-the-Money	10	10
1st Quarter Month	In-the-Money	2	2
2nd Quarter Month	Out-of-the-Money	10	10
2nd Quarter Month	In-the-Money	2	2
3^rd Quarter Month	Out-of-the-Money	10	10
3^rd Quarter Month	In-the-Money	2	2
Total		198

** For Mini-HSI Options and Mini-HSCEI Options, CQMM should provide bid / offer quotes in at least 25 option series chosen from the following selection pool:

Contract Month	Option Series	Series For Selection
Contract Month	Option Series			Call	Put
Spot month	Out-of-the-Money	15	15
Spot month	In-the-Money	2	2
2^nd Calendar Month	Out-of-the-Money	15	15
2^nd Calendar Month	In-the-Money	2	2
1st Quarter Month	Out-of-the-Money	10	10
1st Quarter Month	In-the-Money	2	2
2nd Quarter Month	Out-of-the-Money	10	10
2nd Quarter Month	In-the-Money	2	2
Total		116

Below is a summary of the CQMM and QRMM program (T +1 Session):

Market Making
Obligation

Provision of
Continuous Quotes (CQ)

Response to
Quote Requests (QR)

Assigned Series

Not less than 50 option series* (except that, not less than 25 option series for Mini-Hang Seng Index Options **)

All QR issued (except for QR in long dated index options)

Trading Requirement

Provision of CQ not less than 35%
of the trading hours in each calendar month

Response to not less than 35%
of the QR in each calendar month

Maximum Time Limit for
Responding to QR

N/A

Response to a QR within 20
seconds of the QR

Minimum Display Time

Maximum bid/offer spread
(Except for Long Dated Index Options)

For HSI Options, HSCEI Options and HSTECH Options:

Month	Price	Max. bid/offer spread
1^st, 2^nd, 3^rd, 4^thcalendar	1-750 points	Max (40 points, 20% of bid)
1^st, 2^nd, 3^rd, 4^thcalendar	> 750 points	150 points
1^{st ,}2^ndquarter	1-750 points	Max (60 points, 30% of bid)
1^{st ,}2^ndquarter	> 750 points	225 points
3^rdquarter	1-750 points	Max (80 points, 40% of bid)
3^rdquarter	> 750 points	300 points

For Mini-HSI Options:

Month	Price	Max. bid/offer spread
1^st, 2^ndcalendar	1-750 points	Max (40 points, 20% of bid)
1^st, 2^ndcalendar	> 750 points	150 points
1^stquarter	1-750 points	Max (60 points, 30% of bid)
1^stquarter	> 750 points	225 points
2^ndquarter	1-750 points	Max (60 points, 30% of bid)
2^ndquarter	> 750 points	225 points

Minimum Quote Size

For HSI Options, HSCEI Options and HSTECH Options

Month	Min. Quote Size
1^st, 2^nd, 3^rd, 4^thcalendar	3 contracts
1^{st ,}2^nd, 3^rdquarter	2 contracts

For Mini-HSI Options

Month	Min. Quote Size
1^st, 2^ndcalendar	3 contracts
1^{st ,}2^ndquarter	2 contracts

* For HSI Options, HSCEI Options and HSTECH Options , CQMM in the T+1 Session should provide bid/offer quotes in at least 50 option series chosen from the following selection pool:

Contract Month	Option Series	Series For Selection
		Call	Put
Spot month	Out-of-the-Money	15	15
Spot month	In-the-Money	2	2
2^ndCalendar Month	Out-of-the-Money	15	15
2^ndCalendar Month	In-the-Money	2	2
3^rdCalendar Month	Out-of-the-Money	15	15
3^rdCalendar Month	In-the-Money	2	2
4^thCalendar Month	Out-of-the-Money	10	10
4^thCalendar Month	In-the-Money	2	2
1st Quarter Month	Out-of-the-Money	10	10
1st Quarter Month	In-the-Money	2	2
2nd Quarter Month	Out-of-the-Money	10	10
2nd Quarter Month	In-the-Money	2	2
3^rdQuarter Month	Out-of-the-Money	10	10
3^rdQuarter Month	In-the-Money	2	2
Total		198

** For Mini-HSI Options, CQMM in the T+1 Session should provide bid / offer quotes in at least 25 option series chosen from the following selection pool:

Contract Month	Option Series	Series For Selection
		Call	Put
Spot month	Out-of-the-Money	15	15
Spot month	In-the-Money	2	2
2^ndCalendar Month	Out-of-the-Money	15	15
2^ndCalendar Month	In-the-Money	2	2
1st Quarter Month	Out-of-the-Money	10	10
1st Quarter Month	In-the-Money	2	2
2nd Quarter Month	Out-of-the-Money	10	10
2nd Quarter Month	In-the-Money	2	2
Total		116

Weekly Stock Index Options

		MM for T Session	MM for T+1 Session
For MM that provides continuous quote (CQ):
Min. % of trading hours coverage		70% of T Session	70% of T+1 Session
Min. Quote series (selected from the pool*)		30 series in total for spot week and next week contracts (or 15 series if only one contract is available.**)	30 series in total for spot week and next week contracts (or 15 series if only one contract is available.**)
Min. Quote Size		5 contracts	5 contracts
Max. bid/offer spread	Price 1-750 points >750 points	Max. bid/offer spread Max (30 points, 10% of bid) 75 points	Max. bid/offer spread Max (40 points, 20% of bid) 150 points
For MM that responds to quote request (QR):
Min. % of QR responses		70% of QR issued in T Session	70% of QR issued in T+1 Session
Max. Time to respond to QR and Min. Display time		20 sec	20 sec
Min. Quote Size		5 contracts	5 contracts
Max. bid/offer spread	Price 1-750 points >750 points	Max. bid/offer spread Max (30 points, 10% of bid) 75 points	Max. bid/offer spread Max (40 points, 20% of bid) 150 points

*CQMM can select options series from the following CQ series selection pool:

Contract Month	Moneyness	Call	Put
Spot Week	Nearest OTM	14	14
Spot Week	Nearest ITM	2	2
Next Week	Nearest OTM	14	14
Next Week	Nearest ITM	2	2
Total		64

Market Maker (MM) Incentives for Stock Index Futures and Options

Product	Market Maker Fee (HK$)	Market Maker in Other Stock Index Products with same underlying Index Fee (HK$)*	Standard Exchange Fee (HK$)
Hang Seng Index Futures (HSIF)	n.a.	3.50 (MM in HSIO, MHIF or MHIO)	10.00
Hang Seng Index Options (HSIO)	2.00**	3.50* (MM in MHIF or MHIO)	10.00
Weekly Hang Seng Index Options (WHSI)	2.00**	3.50* (MM in HSIO, MHIF or MHIO)	10.00
Mini Hang Seng Index Futures (MHIF)	n.a.	1.00 (MM in HSIO, WHSIO or MHIO)	3.50
Mini Hang Seng Index Options (MHIO)	0.40**	0.70* (MM in HSIO, WHSIO or MHIF)	2.00
Hang Seng China Enterprises Index Futures (HHIF)	n.a.	1.00 (MM in HHIO or MCHO)	3.50
Hang Seng China Enterprises Index Options (HHIO)	0.50**	1.00* (MM in HHIF or MCHO)	3.50
Hang Seng TECH Index Futures (HTIF)	n.a.	1.75* (MM in HTIO and HTI OOF)	5.0
Hang Seng TECH Index Options (HTIO)	1.0	1.75*(MM in HTI OOF)	5.0
Weekly Hang Seng China Enterprises Index Options (WHHIO)	0.50**	1.00* (MM in HHIO or MCHO)	3.50
Mini-Hang Seng China Enterprises Index Futures (MCHF)	n.a.	0.70 (MM in HHIO, WHHIO or MCHO)	2.00
Mini-Hang Seng China Enterprises Index Options (MCHO)	0.20	0.35 (MM in HHIO)	1.00
HSI Dividend Futures	0.60	n.a.	3.00
HSCEI Dividend Futures	0.30	n.a.	1.50
Hang Seng (Gross Total Return) Index Futures	6.00	n.a.	30.0
Hang Seng (Net Total Return) Index Futures	6.00	n.a.	30.0
Hang Seng China Enterprises (Gross Total Return) Index Futures	2.00	n.a.	10.0
Hang Seng China Enterprises (Net Total Return) Index Futures	2.00	n.a.	10.0
HSI Volatility Index Futures	2.00	n.a.	10.00
Sector Index Futures	0.40	n.a.	2.00

* The number of contracts that are eligible for a reduced Exchange Fee may be limited as specified in the Trading Procedures relating to Stock Index Futures and Stock Index Options contained in the HKFE Rules
** If the MM performance in T+1 Session is better than the MM Obligation in T+1 Session, trading fees for the products which the MM make market in the T+1 Session may be waived. Please refer to the circular (ref: MO/DT/026/18) http://www.hkex.com.hk/-/media/HKEX-Market/Services/Circulars-and-Notices/Participant-and-Members-Circulars/HKFE/2018/MO_DT_026_18_e.pdf for details.

Additional Waiver of Monthly Sub-licence fee for OAPI (CQMM of Weekly Stock Index Options)

No. of OAPI	MM for T Session	MM for T+1 Session
Weekly HSI Options	1 OAPI (HK$2,600 per month)	4 OAPIs (HK$10,400 per month)
Weekly HSCEI Options	1 OAPI (HK$2,600 per month)	4 OAPIs (HK$10,400 per month)

Liquidity Providers Obligations and Incentives of Hang Seng TECH Index Futures

Tier	Assigned Contract Months	Minimum % Trading Hours (T session)	Maximum Bid/Offer Spread	Minimum Quote Quantity (contracts)	Monthly HSTECH futures volume
A	Spot Month	70%	0.07% of bid price	2	N/A
B	Spot Month	70%	0.10% of bid price	2	N/A
C	Spot Month	50% - 70%	0.10% of bid price	2	1,000
D	Spot Month	less than 50%	0.10% of bid price	2	N/A

Incentives

- Trading fee discount and OAPI sub- license fee wavier

Liquidity Providers Obligations and Incentives of Hang Seng TECH Index Options

Contracts	Trading Requirement	Assigned Series	Maximum bid / offer spread (ticks)	Minimum Quote Size (contracts)	Minimum % of Trading hours
Hang Seng TECH Index Options	CQ	Not less than 50 option series (choose from Table 1)	Refer to Table 2	5	65%

Table 1 (Options series selection pool)

Contract Month	Option Series	Series for selection
Contract Month	Option Series	Call	Put
Spot Calendar Month	Out-of-the-Money	15	15
	In-the-Money	2	2
Next Calendar Month	Out-of-the-Money	15	15
	In-the-Money	2	2
First Quarter Month	Out-of-the-Money	10	10
	In-the-Money	2	2
Second Quarter Month	Out-of-the-Money	10	10
	In-the-Money	2	2
Total		116

Table 2 (maximum options bid/offer spread)

Contract Month	Option Premium	Maximum Bid/Offer Spread
Spot Calendar Month and Next Calendar Month	1-750 points	30 points or 10% of bid price, whichever is higher
Spot Calendar Month and Next Calendar Month	More than 750 points	75 points
First Quarter Month and Second Quarter Month	1-750 points	40 points or 20% of bid price, whichever is higher
First Quarter Month and Second Quarter Month	More than 750 points	150 points

Incentives
- Trading fee discount and OAPI sub- license fee wavier

Liquidity Providers Obligations and Incentives of MSCI Asia and Emerging Markets Index Futures

Tier 1 (T session)

Contracts	Assigned Contract Months	Minimum % Trading Hours (T session)	Maximum Bid/Offer Spread	Minimum Quote Quantity (contracts)	Calendar Spread Contract Month	Max. Bid /Offer (index point)	Min. Quote Quantity (Contracts)
MSCI Asia ex Japan Net Total Return (USD) Index Futures	Nearest First Calendar Quarter Month	70%	0.15% of bid price	15	Nearest First Quarter Month/ 2nd Quarter Month	1.5	20
MSCI Taiwan Net Total Return (USD) Index Futures	Nearest First Calendar Quarter Month	70%	0.38% of bid price	20	Nearest First Quarter Month/ 2nd Quarter Month	1.5	50
MSCI Japan Net Total Return (USD) Index Futures	Nearest First Calendar Quarter Month	70%	0.20% of bid price	20	Nearest First Quarter Month/ 2nd Quarter Month	10	50
MSCI India Net Total Return (USD) Index Futures	Nearest First Calendar Quarter Month	70%	0.50% of bid price	5	Nearest First Quarter Month/ 2nd Quarter Month	3	10
MSCI China Free Net Total Return (USD) Index Futures	Nearest First Calendar Quarter Month	70%	0.20% of bid price	10
MSCI Indonesia Net Total Return (USD) Index Futures	Nearest First Calendar Quarter Month	70%	0.60% of bid price	10	Nearest First Quarter Month/ 2nd Quarter Month	4	50
MSCI Thailand Net Total Return (USD) Index Futures	Nearest First Calendar Quarter Month	70%	0.45% of bid price	15	Nearest First Quarter Month/ 2nd Quarter Month	4	40
MSCI Malaysia Net Total Return (USD) Index Futures	Nearest First Calendar Quarter Month	70%	0.45% of bid price	5
MSCI EM Asia Net Total Return (USD) Index Futures	Nearest First Calendar Quarter Month	70%	0.18% of bid price	15	Nearest First Quarter Month/ 2nd Quarter Month	1.2	40
MSCI Hong Kong Net Total Return (USD) Index Futures	Nearest First Calendar Quarter Month	70%	0.38% of bid price	5
MSCI Philippines Net Total Return (USD) Index Futures	Nearest First Calendar Quarter Month	70%	0.75% of bid price	5
MSCI Emerging Markets Net Total Return (USD) Index Futures	Nearest First Calendar Quarter Month	70%	0.15% of bid price	20	Nearest First Quarter Month/ 2nd Quarter Month	1	50
MSCI Emerging Markets (USD) Index Futures	Nearest First Calendar Quarter Month	70%	0.15% of bid price	20	Nearest First Quarter Month/ 2nd Quarter Month	1.5	20
MSCI Taiwan 25/50 (USD) Index Futures	Spot Month	70%	0.35% of bid price	5	Spot Month/ 2nd Calendar Month	5	20
MSCI Taiwan 25/50 (USD) Index Futures	Nearest First Calendar Quarter Month	70%	0.35% of bid price	5	Spot Month/ 2nd Calendar Month	5	20
MSCI Singapore Free (SGD) Index Futures	Spot Month	70%	0.35% of bid price	5
MSCI Singapore Free (SGD) Index Futures	Nearest First Calendar Quarter Month	70%	0.35% of bid price	5
MSCI China (USD) Index Futures	Nearest First Calendar Quarter Month	70%	0.20% of bid price	5
MSCI China Net Total Return (USD) Index Futures	Nearest First Calendar Quarter Month	70%	0.20% of bid price	10	Spot Month/ 2nd Calendar Month	1	20
MSCI China (USD) Index Futures	Spot Month	70%	0.118% of bid	2
MSCI China (USD) Index Futures	Next Calendar Month	70%	0.139% of bid	2

Tier 1 (T+1 Session)

Contracts	Assigned Contract Months	Minimum % Trading Hours (T+1 session)	Maximum Bid/Offer Spread	Minimum Quote Quantity (contracts)
MSCI Asia ex Japan Net Total Return (USD) Index Futures	Nearest First Calendar Quarter Month	50%	0.15% of bid price	15
MSCI China Free Net Total Return (USD) Index Futures	Nearest First Calendar Quarter Month	50%	0.25% f bid price	10
MSCI Taiwan Net Total Return (USD) Index Futures	Nearest First Calendar Quarter Month	50%	0.38% of bid price	20
MSCI Japan Net Total Return (USD) Index Futures	Nearest First Calendar Quarter Month	50%	0.15% of bid price	20
MSCI India Net Total Return (USD) Index Futures	Nearest First Calendar Quarter Month	50%	0.25% of bid price	5
MSCI Indonesia Net Total Return (USD) Index Futures	Nearest First Calendar Quarter Month	50%	0.60% of bid price	10
MSCI EM Asia Net Total Return (USD) Index Futures	Nearest First Calendar Quarter Month	50%	0.18% of bid price	15
MSCI Emerging Markets Net Total Return (USD) Index Futures	Nearest First Calendar Quarter Month	50%	0.15% of bid price	20
MSCI Taiwan 25/50 (USD) Index Futures	Spot Month	50%	0.35% of bid price	5
MSCI Taiwan 25/50 (USD) Index Futures	Nearest First Calendar Quarter Mont	50%	0.35% of bid price	５
MSCI Singapore Free (SGD) Index Futures	Spot Month	50%	0.35% of bid price	5
MSCI Singapore Free (SGD) Index Futures	Nearest First Calendar Quarter Month	50%	0.3５% of bid price	５
MSCI China Net Total Return (USD) Index Futures	Nearest First Quarter Month	50%	0.128% of bid price	2

Tier 2

Products	Assigned Contract Months	Minimum % Trading Hours (T Session)	Maximum Bid/Offer Spread	Minimum Quote Quantity (contracts)
MSCI Taiwan (USD) Index Futures (T session)	Spot	70%	0.045 - 0.09% of bid price	2
MSCI Taiwan (USD) Index Futures (T +1 session)	Spot/Next Calendar Month	50%	0.050% of bid price	2
MSCI Taiwan (USD) Index Futures Calendar Spread	Spot/Next Calendar Month	70%	2 ticks	20

Products

Assigned Contract Months

Minimum % Trading Hours

(T Session)

Maximum Bid/Offer Spread

Minimum Quote Quantity
(contracts)

MSCI Taiwan (USD) Index Futures (T session)

Spot

70%

0.045 - 0.09% of bid price

MSCI Taiwan (USD) Index Futures (T +1 session)

Spot/Next Calendar Month

50%

0.050% of bid price

MSCI Taiwan (USD) Index Futures Calendar Spread

Spot/Next Calendar Month

70%

2 ticks

Incentives for MSCI Asia and Emerging Market Index Futures (Tier 1 )

- Discounted trading fee of USD 0.3 for USD contracts
- Cash Incentive: Outright: HK$25,000 per contract per trading session per month
- Cash Incentive: Calendar Spread: HK$12,500 per contract per trading session

For the details of the incentive payment, please refer our circular

Incentives for MSCI Asia and Emerging Market Index Futures (Tier 2)

- Discounted trading fee of USD 0.3 for USD contracts
- Cash Incentive T Session: HK$150,000 to HK$ 50,000 per contract per trading session per month
- Cash Incentive: T+1 Session: HK$75,000 per contract per trading session per month
- Cash Incentive: T Session Calendar Spread; HK$50,000 per contract per trading session per monthFor the details of the incentive payment, please refer our circular

Block Trade Participant (BTP) Program

Requirement:
- The minimum block trade execution volume requirement is 20,000 contracts per quarter in total for the MSCI Asia and Emerging Market Index Futures.
Performance measurement:
- BTP will be ranked based on the total number of valid block trade contracts executed in the MSCI Asia and Emerging Market Index Futures.
Only the top three BTPs in any given quarter will receive incentives.

Incentive:

1) The first BTP is entitled HK$1,200,000; the second BTP is entitled HK$450,000 and the third BTP is HK$150,000

Stock Futures

Market Maker Scheme

Market Making Obligation

Market Making Obligation	Provision of Continuous Quotes (CQ)	Response to Quote Requests (QR)
Assigned Contract	At least the first 2 contract months [i.e. Spot Month and the next calendar month]	All contract months
Trading Requirement	Provision of CQ for not less than 70% of the trading hours in each calendar month	Response to not less than 70% of the QR in each calendar month
Maximum Time Limit for Responding to QR	N/A	Response to a QR within 10 seconds
Minimum Display Time	Not less than 20 seconds, unless a change in the nominal price of the underlying stock occurs during that period, in which case, the MM may change its Quote provided
Maximum Bid/Offer Spread	4 times the best bid / offer spread of the underlying stock or HK$0.15, whichever is greater
Minimum Quote Size	A minimum of 10 contracts

Market Maker Incentives for Stock Futures

Product	Market Maker Fee (HK$)	Standard Exchange Fee (HK$)
Stock Futures	Subject to fulfilment the obligations, Market Maker in HK Stock Futures will be entitled to trading fee waiver (except for stock futures on Tracker Fund of Hong Kong and Hang Seng China Enterprises Index ETF)	Tier 1: HK$3.0; Tier 2: HK$1.0; Tier 3: HK$0.5

Stock Options

There are three types of market makers in HKEX’s stock options market:

- Primary Market Maker (PMM);

- Market maker providing continuous quotes (CQMM); and

- Market maker responding to quote request (QRMM).

For details of PMM Program, please refer to the hyperlink below:

http://www.hkex.com.hk/eng/market/dv_tradfinfo/pmm.htm

Below is a summary of the CQMM and QRMM program: (Effective Date: 31 October 2022)

Market Making Obligation	Provision of Continuous Quotes (CQ)	Response to Quote Requests (QR)
Assigned Series #	Not less than50 option series in an option class	QR issued in options series in an option class
Trading Requirement	Provision of CQ for the assigned option series in an option class for 50% or more of the trading hours in a month	Response to 50% or more QR in an option class in a month
Maximum Time Limit for Responding to QR	N/A	Response within 20 seconds on receipt ofa QR
Minimum Display Time (QR)	N/A	At least 20 seconds, unless a change in the underlying stock price occurs during the 20 seconds display period
Maximum Bid/Offer Spread	Option Series	Liquidity Level 1*	Liquidity Level 2*	Liquidity Level 3*
	Spot month with 3 days or less to expiry	20% of the bid price of the quote or 3 times the best bid/offer spread of the underlying securities, whichever is the lower.	20% of the bid price of the quote or 4 times the best bid/offer spread of the underlying securities, whichever is the lower.	30% of the bid price of the quote or 7 times the best bid/offer spread of the underlying securities, whichever is the lower.
	Spot month with 4 days or more to expiry and the next 3calendar expiry months	10% of the bid price of the quote or 3 times the best bid/offer spread of the underlying securities, whichever is the lower.	10% of the bid price of the quote or 4 times the best bid/offer spread of the underlying securities, whichever is the lower.	20% of the bid price of the quote or 7 times the best bid/offer spread of the underlying securities, whichever is the lower.
	The next 2 calendar quarter expiry months	20% of the bid price of the quote or 4 times the best bid/offer spread of the underlying securities, whichever is the lower.	20% of the bid price of the quote or 6 times the best bid/offer spread of the underlying securities, whichever is the lower.	30% of the bid price of the quote or 10 times the best bid/offer spread of the underlying securities, whichever is the lower.
	The 3rd calendar quarter expiry month and any other longer-dated expiry month as the Exchange deems necessary	20% of the bid price of the quote or 8 times the best bid/offer spread of the underlying securities, whichever is the lower.	20% of the bid price of the quote or 12 times the best bid/offer spread of the underlying securities, whichever is the lower.	30% of the bid price of the quote or 20 times the best bid/offer spread of the underlying securities, whichever is the lower.
Maximum Bid/Offer Spread (For ETF Options)	Spot month with 3 days or less to expiry	20% of the bid price of the quote or 7.5 times the best bid/offer spread of the underlying securities, whichever is the lower.	20% of the bid price of the quote or 10 times the best bid/offer spread of the underlying securities, whichever is the lower.	30% of the bid price of the quote or 17.5 times the best bid/offer spread of the underlying securities, whichever is the lower.
	Spot month with 4 days or more to expiry and the next 3calendar expiry months	10% of the bid price of the quote or 7.5 times the best bid/offer spread of the underlying securities, whichever is the lower.	10% of the bid price of the quote or 10 times the best bid/offer spread of the underlying securities, whichever is the lower.	20% of the bid price of the quote or 17.5 times the best bid/offer spread of the underlying securities, whichever is the lower.
	The next 2 calendar quarter expiry months	20% of the bid price of the quote or 10 times the best bid/offer spread of the underlying securities, whichever is the lower.	20% of the bid price of the quote or 15 times the best bid/offer spread of the underlying securities, whichever is the lower.	30% of the bid price of the quote or 25 times the best bid/offer spread of the underlying securities, whichever is the lower.
	The 3rd calendar quarter expiry month and any other longer-dated expiry month as the Exchange deems necessary	20% of the bid price of the quote or 20 times the best bid/offer spread of the underlying securities, whichever is the lower.	20% of the bid price of the quote or 30 times the best bid/offer spread of the underlying securities, whichever is the lower.	30% of the bid price of the quote or 50 times the best bid/offer spread of the underlying securities, whichever is the lower.
Minimum Quote Size	Liquidity Level 1 - 30 contracts Liquidity Level 2 and 3 - 15 contracts

* Liquidity Level Classification
“Notwithstanding the above,
a) For an option class the underlying security is not an ETF, a Market Maker that provides quotes in option classes with a minimum price fluctuation of HK$0.01 or RMB0.01 will not be obliged to quote a spread narrower than the best bid/offer of the underlying security (at the time of issuing the quote) plus 5 minimum price fluctuations (if the numerical value of the nominal price of such underlying security is below 100) or plus 10 minimum price fluctuations (if the numerical value of the nominal price of the underlying security is equal to or above 100);
b) For an option class the underlying security is an ETF, a Market Maker that provides quotes in option classes with a minimum price fluctuation of HK$0.01 or RMB0.01 will not be obliged to quote a spread narrower than the best bid/offer of the underlying security (at the time of issuing the quote) plus 7 minimum price fluctuations (if the numerical value of the nominal price of such underlying security is below 100) or plus 15 minimum price fluctuations (if the numerical value of the nominal price of the underlying security is equal to or above 100);
c) a Market Maker that provides quotes in option classes with a minimum price fluctuation of HK$0.001 or RMB0.001 will not be obliged to quote a spread narrower than HK$0.03 or RMB0.03

Liquidity levels of option classes are determined by the Exchange from time to time based on the trading liquidity in the underlying stocks

Stock Option Class	HKATS Code	From 31 October 2022 to 29 November 2022		From 30 November 2022 to 29 December 2022
		Liquidity Level	Minimum Quote Size	Liquidity Level	Minimum Quote Size
iShares FTSE A50 China Index ETF	A50	2	15 lots	2	15 lots
AAC Technologies Holdings Inc	AAC	3	15 lots	3	15 lots
Anhui Conch Cement Company Limited	ACC	1	30 lots	1	30 lots
AIA Group Limited	AIA	2	15 lots	2	15 lots
Air China Ltd.	AIR	3	15 lots	3	15 lots
Alibaba Group Holding Limited	ALB	3	15 lots	3	15 lots
Aluminum Corporation of China Limited	ALC	3	15 lots	3	15 lots
Alibaba Health Information Technology Ltd.	ALH	3	15 lots	3	15 lots
ChinaAMC CSI 300 Index ETF	AMC	2	15 lots	2	15 lots
ANTA Sports Products Ltd	ANA	3	15 lots	3	15 lots
Bank of Communications Company Limited	BCM	1	30 lots	1	30 lots
The Bank of East Asia, Limited	BEA	2	15 lots	2	15 lots
Baidu, Inc.	BIU	3	15 lots	3	15 lots
Bilibili Inc.	BLI	3	15 lots	3	15 lots
BOC Hong Kong (Holdings) Limited	BOC	1	30 lots	1	30 lots
Budweiser Brewing Company APAC Limited	BUD	2	15 lots	2	15 lots
BYD Company Limited	BYD	3	15 lots	3	15 lots
BYD Electronic International Company Limited	BYE	3	15 lots	3	15 lots
China Communications Construction Company Limited	CCC	1	30 lots	1	30 lots
China Coal Energy Company Limited	CCE	2	15 lots	2	15 lots
China Cinda Asset Management Company Limited	CDA	3	15 lots	1	30 lots
CGN Power Co., Ltd	CGN	1	30 lots	1	30 lots
China Mobile Limited	CHT	1	30 lots	1	30 lots
China Unicom (Hong Kong) Limited	CHU	1	30 lots	1	30 lots
CITIC Limited	CIT	2	15 lots	2	15 lots
CK Hutchison Holdings Limited	CKH	2	15 lots	2	15 lots
CK Asset Holdings Limited	CKP	2	15 lots	2	15 lots
China Life Insurance Company Limited	CLI	1	30 lots	1	30 lots
CLP Holdings Limited	CLP	2	15 lots	2	15 lots
China Merchants Bank Company Limited	CMB	1	30 lots	3	15 lots
CNOOC Limited	CNC	1	30 lots	1	30 lots
Country Garden Holdings Co. Ltd	COG	3	15 lots	3	15 lots
China Overseas Land & Investment Limited	COL	2	15 lots	3	15 lots
COSCO Shipping Holdings Co., Ltd	COS	3	15 lots	3