HKEx: Arrangements For Adjustment Of China Merchants Bank Futures And Options

Hong Kong Exchanges and Clearing Limited (HKEx) announced the arrangements for the adjustment to the contract terms of all open China Merchants Bank's (CMB) futures and option contracts in existence after the market close on 5 March 2010, the business day immediately before the ex-rights day, which is 8 March 2010, to account for CMB's 1.3 H rights shares for every 10 existing H shares.

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	China Merchants Bank Co., Ltd.
Corporate Action	1.3 H rights shares for every 10 existing H shares
Rights Issue Price	$10.06
Ex-rights day	8 March 2010

CMB Futures

Adjustment Procedures

Adjustment will be made to the open positions of CMB futures contracts which exist after the market close on 5 March 2010, the business day immediately before the ex-rights day. The details of the adjustment procedures are as follows:

Adjustment Term	Formula	Remarks
Adjustment Ratio (AR)	10 old shares + (1.3 new shares x $10.06 / $S*) 10 old shares + 1.3 new shares	Rounded to the nearest 4 decimal places. Adjustment will only be made if the AR is smaller than 1.
Adjusted contracted price (ACP)	Contract price of outstanding futures contract x AR	Rounded to the nearest 2 decimal places
Adjusted Contract Multiplier (ACM)	Contract price of outstanding futures contract x (500 shares / ACP)	Rounded to the nearest 4 decimal places

*	Where $10.06 is the issue price for the new shares and $S is the underlying stock closing price on the business day (5 March 2010) prior to the ex-rights day.

Trading of Adjusted and Standard Contracts

After the market close on 5 March 2010, 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, 8 March 2010. 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)	Availability For Trading	Addition of New Futures Contracts on and after the Ex-rights day
Adjusted	CMA	ACM	From ex-rights day to 29 September 2010	No
Standard	CMB	500	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.

CMB Options

Adjustment Procedures

Adjustment will be made to the open positions of CMB option contracts which exist after the market close on 5 March 2010, the business day immediately before the ex-rights day. The details of the adjustment procedures are as follows:

Adjustment Term	Formula	Remarks
Adjustment Ratio (AR)	10 old shares + (1.3 new shares x $10.06 / $S*) 10 old shares + 1.3 new shares	Rounded to the nearest 4 decimal places. Adjustment will only be made if the AR is smaller than 1.
Adjusted Exercise price (AEP)	Exercise price of outstanding option series x AR	Rounded to the nearest 2 decimal places
Adjusted Contract Size (ACS)	Exercise price of outstanding option series x (500 shares / AEP)	Rounded to the nearest 4 decimal places

*	Where $10.06 is the issue price for the new shares and $S is the underlying stock closing price on the business day (5 March 2010) prior to ex-rights day.

Trading of Adjusted and Standard Contracts

After the market close on 5 March 2010 , 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, 8 March 2010. 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)	Availability For Trading	Addition of New Option Series on and after the Ex-rights day
Adjusted	CMA	ACS	From ex-rights day to 30 December 2010	No
Standard	CMB	500	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.