The Securities and Futures Commission (SFC) says financial authorities are planning a number of measures to protect the Hong Kong market against any fluctuations in world markets during the handover period. The measures will affect stocks, options and futures traded in Hong Kong, as clearing houses seek protection against radical movements of world markets at the time. Hong Kong's financial markets will be closed on Monday, June 30, Tuesday, July 1, and Wednesday, July 2, while banks will also be closed on Saturday, June 28. The measures being planned involve marking stocks to market on the last day of trade before the handover holiday period, and requiring investors to put up a higher margin than normal in dealing in options and futures. Jerry Greiner, senior director of market supervision at the SFC, said clearing houses would take into account movements in interest rates, exchange rates and 'political or military events'. The closures mean there will be four trading days in the US taking place while Hong Kong markets are closed. The most important international event during that period that could affect Hong Kong markets is the July 1 meeting of the US Federal Open-Market Committee - the policy-making board of the US Federal Reserve. Mr Greiner said the measures were being planned in conjunction with the Hong Kong Futures Exchange Clearing House, the stock exchange's options clearing house and Hong Kong Securities Clearing, which clears the stock exchange's normal daily trade. He said the required margin over the handover period may be 50 per cent higher than normal. Margins on options and futures are based on the level of volatility, and are normally measured on a one-day basis, but the lay-off of three trading days would require a higher margin, he said. The likely move to introduce mark-to-market provisions on the afternoon before the lay-off period would also be a significant step. Positions of investors would be brought up to date on that afternoon, rather than being left to be calculated until the morning of the next trading day, as is usual. The implementation of a mark-to-market provision on the Friday afternoon would ensure there were not losses hanging over in relation to market movements on the last day's trade, Mr Greiner said.