Market speculation had suggested the exchange would cut the minimum to $60,000 to compete with the Singapore International Monetary Exchange (Simex), which will launch a Hong Kong futures product on November 23.

'The challenge from Simex is a wake-up call for the futures exchange,' HKFE chief executive Randy Gilmore said. 'The futures exchange has to make all efforts to maintain Hong Kong as an international derivatives trading centre.' The HKFE Clearing Corp board of directors said it would cut the interest rate charge on margin funds from 1.8 per cent to 1.2 per cent.

The move will cost the exchange $30 million to $35 million next year.

The futures exchange last week decided to waive all fees for next month, which would cost it $14 to $15 million.

Mr Gilmore said HKFE Clearing would review the minimum margin level at its regular meeting on November 24.

'The level of the margin rate on Hang Seng Index futures will depend on market volatility and not on competition,' he said. There was a chance the minimum margin would be cut as market volatility had fallen recently.

The exchange had planned to cut its interest rate charge in July next year, but was forced to bring forward the plan because of the Simex launch.

Mr Gilmore said the futures exchange had not received approval from the Securities and Futures Commission for its plan to extend trading hours by 30 minutes.

Responding to opposition from the stock exchange to the HKFE plan, Mr Gilmore said there was no proof that longer trading hours for the futures market would lead to more manipulation in the stock market.

Futures exchange chairman Geoffrey Yeh Meou-tsen said: 'There are many overseas futures markets open longer than their underlying stock markets.'