A group of EFBN market makers are designated by the HKMA to provide the reference quotations for computation of the EFBN fixings, i.e. mid-yield for 1-week, 1-month, 3-month, 6-month, 9-month and 12-month Exchange Fund Bills and mid-price for 2-year, 3-year, 4-year, 5-year, 7-year and 10-year Exchange Fund Notes.
The HKMA has appointed Reuters to collect daily from the designated market makers indicative quotes at 11:00 am on benchmark EFBN, and to calculate and publish the EFBN fixings by 11:30 a.m. (Official Fixings). The EFBN fixings will also be carried by other major news wire agencies as well as on HKMA's website.
In addition, on the basis of the EFBN fixings, Reuters will calculate and publish indicative mid-yield and mid-price for off-the-run Exchange Fund Bills and Exchange Fund Notes respectively for reference.
"The EFBN fixings mechanism, which has been put together after extensive market consultation, will provide a reliable basis for issuers of Hong Kong dollar debt securities to price their issues more accurately, hence assisting the issuance of such securities, " said Mr Tony Latter, Deputy Chief Executive of the HKMA. "The fixings should also promote the development of the derivatives market related to EFBN. And the posting of these prices and yields on the HKMA website should serve as a useful reference point for retail investors, and improve market transparency generally."
Details of the operation of the EFBN fixings scheme can be found in the Reference Manual for Exchange Fund Bills and Notes Fixings, carried on HKMA's website (http://www.hkma.gov.hk). Mr Kenneth Tsui, Managing Director Greater China of Reuters, said, "We are delighted to be associated with the Hong Kong Monetary Authority's initiative to provide a set of reference prices and yields for the Hong Kong Exchange Fund Bills and Notes. The appointment confirms Reuters' value and contribution in the Hong Kong fixed income market."
