HKEX plans to offer derivatives trading in some products on public holidays
- Consultation on offering futures and options trading of non-Hong Kong dollar products to run through December 6
- No intention to offer trading in cash market on public holidays, HKEX says
Public holidays will no longer be considered sacrosanct for some brokers in Hong Kong under a new proposal from the operator of the city’s stock exchange.
There is no plan to offer trading in the so-called cash market – stock trading – on public holidays and it will maintain half-day trading of Hong Kong-dollar denominated products, the bourse operator said.
The consultation will run for four weeks to December 6.
Depending on market feedback and regulatory approval, HKEX plans to launch holiday trading of certain derivatives in April next year, with a readiness test in the first quarter of next year.
SPACs have been one of the hottest fundraising trends since the beginning of 2020, raising nearly US$144 billion this year alone, with the bulk of the listings in the United States.
The holiday trading proposal, which would be optional for market participants, would delineate derivatives trading between brokers who are focused only on the Hong Kong market and those who want to offer a wider array of products.
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Market participants who do not participate in the holiday trading scheme will not be allowed to offer those futures contracts, even on normal business days, under the proposal.
“HKEX had considered measures that would allow [non-holiday] NH Participants to access [holiday] H products on business days, but doing so would require a much more complex model and potentially create market confusion,” the bourse operator said.
Unlike other markets, market participants in Hong Kong will not be required to offer money settlement capabilities, and system and operational availability on public holidays if they only focus on Hong Kong market products.
“As many [exchange participants] EPs have little to no business demand in trading non-[Hong Kong dollar] denominated products, requiring them to meet these requirements would be inefficient and create an unnecessary burden,” the bourse said.
Non-participating brokers will have four weeks after the readiness test in the first quarter to wind down their positions in holiday trading products.