The Hong Kong Futures Exchange is canvassing support for a new membership scheme that will allow up to 500 prospective market makers to trade in non-equity linked products, according to a consultation paper circulated to exchange members.
The scheme, which is expected to generate interest among banks, oil companies and gold traders, is part of the exchange's strategy of diversifying from equity-related products to various Hong Kong dollar-denominated debt derivative products and other new products.
Under that strategy, the exchange has encouraged active trading in Hang Seng Index futures and options and launched rolling forex contracts - a currency futures product - in 1995.
According to the paper, the exchange is also considering introducing several Hong Kong dollar-denominated debt derivatives products such as Hibor (Hong Kong interbank offered rate) futures and Exchange Fund bill and bond futures. Currency options, gold and oil contracts may also be introduced in the near future.
It said that since most exchange members focused on trading equity-related products, futures brokers might find it difficult to allocate resources to handle the development of products that were non-equity related.
This made it important for the exchange to attract parties active in the underlying market to act as market-makers to provide liquidity.
Under the rules, being a shareholder of the exchange is a prerequisite to becoming a member to trade in the exchange's products.