HKEx: Trading And Clearing Arrangements For Esprit Futures And Options

Hong Kong Exchanges and Clearing Limited (HKEx) has announced the trading and clearing arrangements for Esprit Futures and Option contracts open on Friday, 2 March to account for the change in Esprit's board lot from 500 shares to 100 shares with effect from 2 March.

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

Esprit Option Contracts

Class Symbols

Esprit Option contracts with the old contract size of 500 shares (Old Option Contracts) will have the temporary trading symbol ESA from 2 March. The expiry months available for trading from 2 March will be March, April, May, June and September. On and after 2 March, no new option series under ESA will be introduced.

Esprit Option contracts with the new contract size of 100 shares (New Option Contracts) will have the trading symbol ESP from 2 March. The expiry months available for trading from 2 March will be March, April, May, June and September. New option series under ESP will be introduced according to the normal procedures.

Below is the timetable for trading ESA and ESP Option contracts from 2 March.

Open Positions

The open positions in the Old Option Contracts immediately after market close on 1 March will be transferred to the respective ESA Option contracts. Apart from the change of class symbol to ESA, there will not be any changes to the number of open positions, exercise prices, contract size and expiry months for Old Options Contracts after the transfer of positions. All such open contracts will be traded and settled under the original contract terms from 2 March.

Pending Stock Positions

Pending stock positions resulting from exercise / assignment of Old Option Contracts on or before 1 March will be settled according to the contract terms of 500 shares per contract.

Settlement of Exercised Option Trades

Exercise / assignment of ESP and ESA Option contracts from 2 March onwards will result in stock settlement obligations of 100 and 500 shares per contract respectively.

Shares Used as Cover Collateral

The covered short call positions of Old Option Contracts after the market close on 1 March 2007 will be transferred to the respective ESA Option contracts.

Esprit Futures Contracts

Trading Symbols

Esprit Futures contracts with the old contract multiplier of 500 shares (Old Futures Contracts) will have the temporary trading symbol ESA from 2 March. The expiry months available for trading from 2 March will be March, April, May, June and September. On and after 2 March, no new futures contract months under ESA will be introduced.

Esprit Futures contracts with new contract multiplier of 100 shares (New Futures Contracts) will have the trading symbol ESP from 2 March. The expiry months available for trading from 2 March will be March, April, May, June and September. New futures contracts under ESP will be introduced according to the normal procedures.

Below is the timetable for trading ESP and ESA Futures contracts from 2 March.

Open Positions

The open positions in the Old Futures Contracts immediately after market close on 1 March will be transferred to the respective ESA Futures contracts. Apart from the change of trading symbol to ESA, there will not be any changes to the number of open positions, contract prices, contract multiplier and contract months for Old Futures Contracts after the transfer of positions. All such open contracts will be traded and settled under the original contract terms from 2 March.

Cash Settlement of Futures Contracts on Last Trading Day

ESA Futures contracts will be cash settled on their respective last trading days according to their original contract terms (a contract multiplier of 500 shares per contract).

For ESP Futures contracts, the cash settlement amount on their respective last trading days will be calculated using the new contract multiplier of 100 shares per contract under normal procedures.