The contract multiplier for Mini-HSI Futures will be HK$10 per index point - one-fifth the contract multiplier for Hang Seng Index (HSI) Futures - and margins will be set at one-fifth the margins for HSI Futures. The mini contract and HSI Futures contracts will be fungible, which means market participants will be able to offset positions at the ratio of five mini contracts per one HSI Futures contract.
The trading hours for Mini-HSI Futures will be the same as HSI Futures: 9:45am-12:30pm and 2:30pm-4:15pm, with half-hour pre-market opening periods from 9:15am-9:45am and 2:00pm-2:30pm. The contract months will also be the same. When Mini-HSI Futures are introduced on 9 October, the following contract months will be available: October, November, December and March 2001.
Exchange transaction fees for Mini-HSI Futures will be HK$3.50 per contract per side (vs HK$10 for HSI Futures). The SFC levy of HK$1 per side and the Compensation Fund levy of HK$0.50 per side also will apply. Minimum commissions of HK$20 per overnight trade and HK$12 per day trade (vs HK$100 and HK$60 for HSI Futures) have been set and will be effective until commissions become fully negotiable on 1 April 2002.
"We are introducing the Mini-HSI Futures contract to meet the varied needs of retail investors and provide market participants with an instrument to fine-tune their trading and risk management activities," HKFE Chief Executive Frederick J. Grede said. "The value of the HSI Futures contract has risen more than nine-fold since it was introduced in 1986 so many individual investors no longer have access to the market. Mini contracts have been very successful in other markets around the world and we think they will do well here in Hong Kong.
"Futures are highly leveraged financial instruments and it is important that investors understand the mechanics and risks involved," Mr Grede added. "We want participants for the long term so we want people to be well informed before they participate in our markets."
