HKEx: Arrangements For Adjustment Of Cheung Kong Structured Products, Futures And Options

Hong Kong Exchanges and Clearing Limited (HKEx) has announced the arrangements for the adjustment to Cheung Kong (Holdings) Ltd (Cheung Kong) structured products, futures and options to account for Cheung Kong’s distribution of a special dividend.

 Highlights of the adjustment arrangements are set forth below.  Investors should consult their brokers for further details, or if they have any questions regarding the adjustment.

 For details of the special dividend, please refer to the announcement made by Cheung Kong on 16 April 2014.

 Structured Products with shares of Cheung Kong as underlying asset

 The listing documents of all existing structured products with the shares of Cheung Kong as underlying asset contain provisions that deal with a cash distribution including a special dividend.  Structured product issuers will make announcements in the evening of 2 May 2014 regarding the relevant adjustments (including the adjusted entitlement, adjusted exercise price and adjusted call price as appropriate) and investors should read carefully the contents of such announcements.

 Cheung Kong Futures

 Adjustment Procedures

 Adjustments will be made to the open positions of the futures contracts which exist after the market close on 2 May 2014, the business day immediately before the ex-date.  Details of the adjustment procedures are as follows:

Trading of Adjusted and Standard Contracts

 After the market close on 2 May 2014, the business day immediately before the ex-date, the open positions will be transferred to the adjusted stock futures contracts.  In addition, new stock futures contracts based on the standard contract multiplier will be introduced for trading on the ex-date, 5 May 2014.  Details of the adjusted and standard contracts available for trading on and after the ex-date are shown below:

Investors should note that the cash settlement amount of adjusted and standard stock futures contracts on the last trading day will be calculated using their respective contract multipliers.  There will not be any changes to the number of open positions and other contract terms after the transfer of positions.

Cheung Kong Options

 Adjustment Procedures

 Adjustments will be made to the open positions of captioned stock option class which exist after the market close on 2 May 2014, the business day immediately before the ex-date.  The details of the adjustment procedures are as follows:

Trading of Adjusted and Standard Contracts

After the market close on 2 May 2014, the business day immediately before the ex-date, the open positions will be transferred to the adjusted option series.  In addition, new option series based on the standard contract multiplier will be introduced for trading on the ex-date, 5 May 2014.  Details of the adjusted and standard contracts available for trading on and after the ex-date are shown below:

Investors should note that the adjusted and standard option series have different contract sizes.  There will not be any changes to the number of open positions and other contract terms after the transfer of positions.