HKEx to introduce renminbi currency futures

HONG KONG - Bourse operator Hong Kong Exchanges & Clearing (HKEx) said Thursday in a statement that it planned to introduce renminbi currency futures in the third quarter of this year, subject to regulatory approval and market readiness.

The planned USD/CNH futures contract is designed to provide a way for investors to hedge RMB exposure, it said referring to the US dollar and renminbi traded in Hong Kong.

HKEx's USD/CNH futures contract requires delivery of US dollars by the seller and payment of the final settlement value in RMB by the buyer at maturity.

Under HKEx's plan, the contract will be quoted in RMB per US dollar, or USD (for example, RMB 6.2486 per USD) and margined in RMB, with the trading and settlement fees charged in RMB.

According to the key proposed contract specifications, the contract month of the renminbi currency futures, under the trading symbol of CUS, will be spot month, the next three calendar months and the next three calendar quarter months. The contract size will be $100,000.

HKEx has scheduled a market readiness test for the end of June and invited applications from potential market makers for USD/CNH futures, said the statement.

"This initiative is part of our strategy to expand beyond equities and equity-related derivatives, offer a wide range of RMB- traded products and take advantage of the opportunities we see in fixed income, currencies and commodities," said HKEx Chief Executive Charles Li.

"It also reflects our desire to support Hong Kong's further development as an offshore RMB center," he said.

"We have been working with our Participants and information vendors to prepare our derivatives market for RMB-traded products and look forward to introducing our derivatives market's first RMB- traded futures product," said HKEx's Head of Trading Calvin Tai.