HKEX Launches First MSCI Futures Contracts
- 10 new MSCI index futures contracts have launched today on HKEX
- First tranche of new HKEX / MSCI licensing agreement for 37 futures and options contracts in Hong Kong
Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to today (Monday) welcome the launch of the first futures contracts as part of its new index licensing agreement with MSCI Inc., announced on 27 May 2020. This represents a major step forward in the expansion of HKEX’s derivatives product suite and significantly adds to the breadth and depth of the Hong Kong markets.
10 new @MSCI_Inc index #futures contracts began trading on HKEX’s market today, a major step forward in the expansion of #HKEX’s #derivatives product suite as it adds to the breadth and depth of our markets. https://t.co/4BZPXfmgZY pic.twitter.com/8sM15V8I3C
— HKEX 香港交易所 (@HKEXGroup) July 6, 2020
The 10 MSCI index futures contracts, which are denominated in US dollars (USD) and track underlying equities in markets such as Australia, Mainland China, India, Indonesia, Japan, Malaysia, Taiwan and Thailand, were successfully listed on HKEX’s derivatives market earlier today. A total of 10 market makers are providing liquidity in the order book on day one, helping support a deeper pool of liquidity.
On 20 July, HKEX will launch the second tranche of contracts, with seven more USD-denominated futures contracts listing on HKEX.
“Today’s listing marks an exciting new chapter for HKEX and our markets, as we provide even more choice to our customers, and continue to build the breadth, depth and attractiveness of Hong Kong’s financial markets as a global trading and investment hub,” said HKEX Head of Markets Wilfred Yiu.
“Global connectivity is a central premise of our strategy and our business and these derivatives contracts will greatly expand the coverage of underlying assets beyond Hong Kong and Mainland China, to the rest of Asia and beyond. This will bring enhanced liquidity to our markets and greatly complement our existing product suite. We look forward to the rollout of further contracts and continuing to develop our ecosystem to make our markets even more vibrant, connected and attractive to our customers around the world,” said Mr Yiu.
In May 2020, HKEX signed a 10-year licensing agreement with MSCI to license a suite of MSCI indexes in Asia and Emerging Markets for the launch of 37 futures and options contracts in Hong Kong. The agreement expands the existing partnership between the two companies, and further anchors HKEX and MSCI’s commitment to a long-term product development and innovation programme in the region.
Following the introduction of the first batch of contracts in July, HKEX plans to launch the remainder of the contracts later in the year, subject to regulatory approvals and market conditions.
With the launch of the new derivatives contracts, HKEX has introduced incentive programmes for liquidity providers, proprietary traders and block trade participants to support the liquidity development of the contracts. In addition, the Commission Levy charged by the Securities and Futures Commission will be exempted for the first six months of trading.
The next focal point of the crypto market will be over-the-counter derivatives.
Overall trading volumes across all products fell 8% from 2020.
Development of a transparent derivatives market is a critical inflection point for the nascent asset class.
Institutional traders are finding it harder to achieve their trading and investment objectives.
A change in focus from gross to net exposure means more demand for optimisation and compression to work in tan...