HKEx Arrangements For Adjustment Of HSBC Futures And Options

Hong Kong Exchanges and Clearing Limited (HKEx) has announced the arrangements for the adjustment to the contract terms of all open HSBC futures and option contracts in existence after the market close on 11 March 2009, the business day immediately before the ex-rights day, which is 12 March 2009, to account for HSBC's five for 12 rights issue.

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.

Underlying Stock	HSBC Holdings plc
Corporate Action	Five for 12 rights issue
Ex-rights day	12 March 2009

HSBC Futures

Adjustment Procedures

Adjustment will be made to the open positions of HSBC futures contracts which exist after the market close on 11 March 2009, the business day immediately before the ex-rights day. The details of the adjustment procedures are as follows:

Adjustment Term	Formula
Adjustment Ratio (AR)	12 old shares + (5 new shares x $28 / $S*) 12 old shares + 5 new shares
Adjusted contracted prices (ACP)	Contracted prices of outstanding stock futures contracts ¡Ñ AR
Adjusted Contract Multiplier (ACM)	Contracted prices of outstanding stock futures contracts ¡Ñ (400 shares / ACP)

*	Where $28 is the issue price for the new shares and $S will be the underlying stock's closing price on 11 March 2009, the business day prior to the ex-rights day.

Trading of Adjusted and Standard Contracts

After the market close on 11 March 2009, the business day immediately before the ex-rights day, the open positions will be transferred to the adjusted futures contracts. In addition, new contracts based on the standard contract multiplier will be introduced for trading on the ex-rights day, 12 March 2009. Details of the adjusted and standard contracts available for trading on and after the ex-rights day are shown below:

Contract	Trading Symbol	Contract Multiplier (Shares)	Available for Trading	Addition of New Contract Months on and after Ex-rights Day
Adjusted	HKC	ACM	From ex-rights day to 29 September 2009	No
Standard	HKB	400	From ex-rights day onwards	Yes

Investors should note that the cash settlement amount of adjusted and standard 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.

HSBC Options

Adjustment Procedures

Adjustment will be made to the open positions of HSBC option contracts which exist after the market close on 11 March 2009, the business day immediately before the ex-rights day. The details of the adjustment procedures are as follows:

Adjustment Term	Formula
Adjustment Ratio (AR)	12 old shares + (5 new shares x $28 / $S*) 12 old shares + 5 new shares
Adjusted Exercise price (AEP)	Exercise price of outstanding option series ¡Ñ AR
Adjusted Contract Size (ACS)	Exercise price of outstanding option series x (400 shares / AEP)

*	Where $28 is the issue price for the new shares and $S will be the underlying stock closing price on 11 March 2009, the business day prior to the ex-rights day.

Trading of Adjusted and Standard Contracts

After the market close on 11 March 2009, the business day immediately before the ex-rights day, the open positions will be transferred to the adjusted option series. In addition, new option series based on the standard contract size will be introduced for trading on the ex-rights day, 12 March 2009. Details of the adjusted and standard contracts available for trading on and after the ex-rights day are shown below:

Contract	Trading Symbol	Contract Size (Shares)	Available for Trading	Addition of New Option Series on and after Ex-rights Day
Adjusted	HKC	ACS	From ex-rights day to 30 December 2009	No
Standard	HKB	400	From ex-rights day onwards	Yes

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.