Hong Kong Futures Exchange Announces US Treasuries To Be Accepted As Margin Collateral

The Hong Kong Futures Exchange (HKFE) has announced that the HKFE Clearing Corporation (HKCC) will accept US Treasury Bills and Notes from its Clearing Participants as margin collateral from 28 April 2000. In addition, Exchange Participants will be allowed to accept US Treasury Bills and Notes as margin collateral from their customers from the same date.

At present, customers can use cash, Exchange Fund Bills and Notes, or a combination to meet margin requirements.

Like the other highly liquid assets that are accepted as margin collateral, the value of the US Treasury securities will be based on HKCC Rules and Procedures, which include adjustments to reflect the potential for the securities' value to decline.

"The acceptance of US Treasury securities will allow customers to use their capital more efficiently and it will give them more flexibility," a HKFE spokesman said.

"The changes are part of the Exchange's continuing efforts to broaden its international focus to meet the needs of today's marketplace," the spokesman added.