Hong Kong Futures Exchange Hong Kong Futures Exchange (HKFE) The Hong Kong Futures Exchange, formerly known as the Hong Kong Commodity Exchange, opened at 1977. The Hong Kong Mercantile Exchange started trading raw sugar and cotton, 1979 started trading soybeans, and 1986 started trading May futures contracts. The turnover quickly surpassed other contracts, accounting for 87% of the total turnover at 1987. Initially, the Hong Kong Commodity Exchange was reviewed every five years. 1982 considered that its operation was unsuccessful. 1984 After the reorganization and management regulations of the Exchange were revised, the Hong Kong Commodity Exchange was renamed as a futures exchange, and the Shanghai index futures was designated as the first contract for futures trading. The trading volume of 1998 index futures and options contracts accounts for more than 90% of the total trading volume in the market. At present, there are futures and options of financial products such as red chip index and individual stocks listed on the Hong Kong Futures Exchange. As Hong Kong is an international financial center with developed foreign exchange market, financial derivatives market, stock market, bond market, capital market and gold market, Hong Kong Futures Exchange has a broad development prospect. Hong Kong's small Hang Seng Index futures have experienced many bull markets and stock market crashes, and the Asian financial turmoil 1998 has gradually matured the Hong Kong securities market. 1999 Donald Tsang, the then Financial Secretary, announced a comprehensive reform of Hong Kong's securities and futures markets to enhance Hong Kong's competitiveness and meet the challenges brought about by market globalization. It is suggested that the Stock Exchange of Hong Kong (SEHK) and the Hong Kong Futures Exchange (HKFE) be demutualized and merged with Hong Kong Securities Clearing Company Limited, which is owned by a single holding company. SEHK * * * had 570 member companies at that time. On March 6, 2000, the merger of the three institutions was completed, and the Hong Kong Stock Exchange was listed on the Stock Exchange on June 27, 2000. The derivatives market of the Hong Kong Stock Exchange provides a trading market for various futures and options products, including stock index, stock and interest rate futures and options products. The Stock Exchange of Hong Kong and its subsidiaries, Hong Kong Futures Clearing Company Limited and Options Clearing House Limited of the Stock Exchange of Hong Kong, have implemented a strict risk management system to enable exchange participants and their clients to invest and hedge in a highly liquid and well-regulated market. As for the capital requirements for clearing participants, the Hong Kong Futures Clearing Company will not set minimum capital requirements for direct clearing participants (like the existing brokerage participants in the Central Clearing System), because direct clearing participants must be participants of the Stock Exchange and comply with the "Financial Resources Rules" formulated by the Hong Kong Securities Regulatory Commission. As for becoming a full settlement participant of a registered securities company, its proposed minimum capital requirement is HK$ 25 million, which is the same as that of a full settlement participant of the Hong Kong Futures Clearing Company. In addition, authorized institutions registered under the Banking Ordinance must maintain a minimum paid-in net share capital of HK$ 6,543.8 billion (the same as the existing regulations for participants in the CCASS custodian) if they want to become full clearing participants. Participation fee means that all participants in the central clearing system (including comprehensive settlement participants and direct settlement participants) must pay the participation fee to the Hong Kong Clearing Company. At present, the participation fees charged to direct settlement participants and comprehensive settlement participants are the same as those charged to existing brokers and custodians. At present, the clearing house system used by Hong Kong Futures Clearing House (HKCC) is DCASS, that is, derivatives clearing and settlement system, which is engaged in the settlement of Hong Kong index futures and options. At present, there are about 65,438+028 companies in the market as clearing house participants, of which 65,438+023 are direct clearing participants (CP) and 5 are general clearing participants (GCP). General clearing participant (GCP) means that under the current rules of the central clearing system, only brokerage participants can settle and deliver the exchange transactions in the central clearing system. However, the participants in the overall settlement do not necessarily need to hold the trading rights of the stock exchange, and they can also settle securities transactions for non-settlement participants. All SEHK participants and companies with registered securities firm licenses can become full settlement participants. Authorized institutions under the Banking Ordinance will also be accepted as full settlement participants. A general settlement participant may settle the transaction by himself (if he is a participant of the Stock Exchange) or settle the transaction for a non-settlement participant according to a third-party settlement arrangement. Non-settlement participants must first designate a comprehensive settlement participant to settle on their behalf before trading on the stock exchange. Direct settlement participant (CP) means that only SEHK participants are eligible to become direct settlement participants. Direct settlement participants can only settle their own transactions and cannot accept the entrustment of non-settlement participants for their settlement. Existing brokerage participants will automatically become direct settlement participants. After the merger of the Hong Kong Stock Exchange, the Futures Exchange and the three clearing houses, all derivatives transactions were placed on the Futures Exchange (stock option transactions were once traded on the Stock Exchange). At present, there are four kinds of futures and options products in Hong Kong. (1) Stock market index product series, including: Hang Seng Index Futures and Options, Small Hang Seng Index Futures and China Foreign Free Investment Index Futures; (2) Stock products, including 29 stock futures, 3 1 stock options, 20 international stock futures and 20 options; (3) Interest rate products, including: 1 month Hong Kong dollar interest rate futures, 3-month Hong Kong dollar interest rate futures and 3-year Exchange Fund bond futures; (4) Foreign exchange products, including Japanese yen, British pound and euro. Status quo In the past few decades, the trading volume of derivatives in Hong Kong has increased steadily. In the first half of 2003, a total of 5.4 million futures and options contracts were traded, of which Hang Seng Index Futures accounted for 40.8%, stock options accounted for 39.4%, small Hang Seng Index Futures accounted for 6.8%, Hang Seng Index Futures accounted for 6.4%, and three-month interest rate futures accounted for 6.47%. The total transaction volume ranks second in Asia. 20011119 Hong Kong Stock Exchange launched a new variety of bond (foreign exchange) futures. At present, there is no commodity futures market in Hong Kong. During the period from 1977 to 1980, the then Hong Kong Commodity Exchange Limited (later reorganized into Hong Kong Futures Exchange Limited on 1985) launched four commodity futures contracts: cotton, raw sugar, soybean and gold. However, these contracts were subsequently suspended from 198 1 to 1999 due to the lack of demand from local and international participants. From the distribution of trading volume, taking Hang Seng Index Futures as an example, most of the trading volume comes from retail investors (57.7%), which shows an upward trend in recent years, followed by institutional investors (35%). 78% of the trading volume is speculation, 13.5% is arbitrage and 8.5% is hedging. In order to better serve traders, Hong Kong Stock Exchange began to use HKATS trading system for electronic trading in June 2000, and cancelled open outcry trading at the same time. On August 6, 2000, options and futures were merged and traded in HKATS system. HKEx plans to merge the derivatives settlement system in mid-2002, and conduct settlement and settlement in DCASS system. In April, 2002, the minimum commission requirement for futures dealers was abolished to encourage competition among brokers and improve the service level of Hong Kong's financial industry. In the future, the development of derivatives market in Hong Kong will pay more attention to the electronization and internationalization of transactions. The future development direction is that spot (stock) trading and futures options are traded and settled in one system, which is convenient for market risk management and collateral management, thus improving the operating efficiency of the whole financial derivatives market. Electronic automatic trading technology will make the futures market move from tangible market to intangible market safer and more convenient. Improve the competitiveness of Hong Kong derivatives market through the internationalization of products and dealers. Of course, the high openness of Hong Kong's financial industry is a favorable condition for its internationalization. The basic structure of the Hong Kong futures market The Stock Exchange of Hong Kong is formed by the merger of the Stock Exchange of Hong Kong, the Hong Kong Futures Exchange, futures clearing houses, stock clearing houses and stock option clearing houses. The Stock Exchange of Hong Kong is supervised by the Securities and Futures Commission under the Financial Secretary. The administrative level of the CSRC in the Hong Kong government is relatively low. However, due to the high salaries of staff of exchanges and securities institutions (half of the proceeds from exchange procedures are used to pay salaries), in order to attract outstanding financial talents into the management, the salaries of staff of the CSRC are much higher than those of other staff of the Financial Secretary. The HKEx adopts the corporate system and is listed and traded on the HKEx. HKEx is the second company-based exchange in the Asia-Pacific region (the first is Australia). The company system is conducive to preventing members from interfering with and affecting the management of the exchange, and coordinating the contradictions between large and small members in the investment and development of the exchange. According to the regulations of the CSRC on the merger of exchanges, after the merger and listing of an exchange, any shareholder can't hold more than 5% of the total shares, and the staff of the exchange can hold the shares of the exchange, but during the sensitive period before information disclosure, the staff of the exchange may not buy or sell the shares of the exchange. From the management system, the president of the exchange is recommended by the board of directors and reported to the CSRC for approval. The corporate member of the Stock Exchange of Hong Kong was renamed as "Exchange Participant". Exchange participants have the right to trade, and other traders can only trade futures and options through agents of "participants". Therefore, the "trading right" is valuable at present and can be transferred and bought and sold. It is said that the exchange will liberalize trading rights next year, and other companies can buy trading rights directly from the exchange. Futures and options are settled in the clearing house of the Hong Kong Stock Exchange. At present, only "clearing house participants" can settle accounts, and only "universal clearing house participants" can settle accounts for themselves. Generally speaking, clearing house participants can only settle accounts for themselves. The derivatives market of HKEx has more than 130 exchange participants and 120 comprehensive clearing house participants. Futures products currently listed in Hong Kong need the consent of the CSRC. In order to ensure Hong Kong's status as an international financial center and improve the competitiveness of Hong Kong's futures market, the Hong Kong Securities Regulatory Commission is relatively lax in the examination and approval of varieties, and generally does not reject varieties reported by exchanges. The CSRC only requires the exchange to do a good job in market research and variety design. Comparison of trading varieties and months between the Hong Kong Futures Exchange and the Mainland: The derivatives of the Hong Kong Futures Exchange are characterized by financial futures, and the localized products are combined with international products, but the trading of localized products is more active. At present, mainland futures are mainly listed in mainland commodities. The active varieties in Hong Kong derivatives market are mainly index futures and stock options. The design of the contract month is basically the same as that of the British futures market, generally it is the spot month and the next month, and the last two quarters (March, June, September and 12 are the quarterly months). The stock option contract is an American option, which is conducive to the delivery of spot stocks at any time and convenient for hedging. European options are used for index options, because index options are settled in cash and there is no spot settlement. At present, the active month of stock futures is spot month and the next month of spot month. However, the forward contracts of mainland futures varieties are active in the month, and the contract months in recent months are affected by position restrictions and margin increase, and the degree of activity is very low. Margin (deposit): Hong Kong futures margin is absolute, and Chinese mainland adopts proportional margin (5%). SPAN is used to calculate the margin of futures and options. The margin level is related to the spot price level and price fluctuation of the subject matter. When the margin calculated by SPAN is 25% higher (lower) than the actually adopted margin, the exchange will readjust the margin level. Traders themselves don't know when the clearing house will adjust the margin, and they can only increase or decrease it according to the notice of the clearing house. Traders are used to this method of adjusting margin, so the adjustment of margin seems to have no effect on the prices of futures and options. Exchange participants (brokerage companies) collect deposits from customers, which are divided into account opening deposits and maintenance deposits. At present, the deposit for opening an account of Hang Seng Index futures is about 57,000 yuan/piece, and the deposit is maintained at about 47,000 yuan/piece, which is equivalent to about 10% of the contract value. The deposit collected by the clearing house from the participant (brokerage company) is 80% of the customer deposit collected by the participant. According to Shengli Financial Services Company, an all-round participant in the clearing house, they charge different deposits for different customers. The margin for mainland futures is 5% of the contract value, and the customer margin charged by members is 8%. Position limit and price limit: Exchange participants only have three accounts in the exchange, namely, self-operated account, customer account (one account for all customers) and market maker account. The position limit is aimed at the self-operated accounts of exchange participants, and the exchange does not limit the positions of participants' customer accounts. In addition, the exchange pays more attention to the activity of the market and is unwilling to limit the positions of customer accounts. The risk of customers is controlled by exchange participants. Regardless of the long position or short position, the total monthly positions of exchange participants in Hang Seng Index Futures, Small Hang Seng Index Futures and Hang Seng Index Options shall not exceed 10000delta (a futures contract is a delta, and options are adjusted according to the calculation method of delta). The mainland has stipulated complex position restrictions according to customers, brokerage members and non-brokerage members, contract months and varieties. There is no price limit system for derivatives trading in Hong Kong, and the price limit for all varieties in the Mainland is 3% of the contract value. Market Maker and Arbitrage: At present, there is a market maker for options on the Hong Kong Stock Exchange, and there is only one market maker (HSBC) for futures contracts with a three-month Hong Kong dollar interest rate. Market participants can make market through self-operated accounts or their customers. However, to become a valet market maker, it is necessary to open a market maker account through exchange participants, and then manage and implement preferential treatment for the market maker account. Exchanges generally ask market makers to quote by telephone, and market makers can not quote, but the reply to the exchange's quotation request can not be less than 80% every month. The preferential measure is to reduce the handling fee and rent by 80%. There is currently no market maker system for mainland futures. The Hong Kong Futures Exchange gives preferential treatment to arbitrage trading in terms of margin (margin), and the arbitrage margin is also calculated by span. The mainland futures market has no preference for arbitrage margin, which is the same as speculative margin. Recently, in order to attract over-the-counter traders to enter the futures market, the Hong Kong futures market has implemented a "block trade" system, that is, if two customers make a block trade, they can open or close their positions at the agreed price within the range of the highest and lowest prices of the day. In order to prevent the original transactions in the exchange from evolving into over-the-counter bargaining transactions, block trades require more than 100 transactions per lot. At present, Hong Kong derivatives market has hundreds of big transactions every day. Information disclosure: At present, HKAT system can display the five best selling and buying prices and their quantities in real-time market, the prices and quantities of the top 250 trading orders, the trading volume and positions of the top 10 before daily disclosure, and others will not be published. Recently, when the CSRC revised the information disclosure clause, it also encountered the conflict between information disclosure and the protection of investors' (hedgers') business secrets. The view of the exchange is to pay attention to the balance between the two aspects. The information disclosed in the mainland futures market is not as much as that in Hong Kong, and the information disclosed after trading, including trading volume, positions and delivery matches, is more than that in Hong Kong. Risk fund: Hong Kong derivatives market has a reserve fund and a compensation fund as risk protection for the futures market. When there is a big risk in the market, the futures (rights) trading margin of the participants can't make up for the trading losses, and the settlement institution can use the reserve fund to compensate the profits of other exchange participants. When market participants go bankrupt due to futures trading, customers can apply to the CSRC for investigation and compensation. If the situation is true, the customer can get compensation, and the source of compensation for the customer is the compensation fund. At present, there is no compensation fund in the mainland, only reserve funds.