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Futures scheme secures support

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The Hong Kong Futures Exchange's (HKFE) new membership scheme has received a broad welcome, already securing the membership of Hongkong Bank and Standard Chartered Bank.

The new scheme will allow up to 500 prospective market-makers to trade in non-equity-linked products as part of the futures exchange's strategy of diversifying from equity-related products.

With exchange membership costing about $4 million, most banks would consider it too expensive to join merely to trade one or two products related to their business.

To get around the problem, the exchange plans to introduce a membership scheme that will enable a qualifying market-maker to buy a 'non-voting' share for $10,000, becoming a merchant trader of the exchange.

Futures exchange chief executive Ivers Riley said yesterday the membership proposal had received support from more than half the exchange's members.

'The new non-voting members can act as market-makers of the new products to ensure market liquidity,' he said.

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