HK securities regulator to implement increased position limits for major stock indices

The Securities and Futures Commission said it will proceed to implement proposed increases of position limits for exchange-traded derivatives based on the three major stock indices after concluding its consultation.

The SFC received a total of 25 submissions from both local and overseas market participants, including market makers, asset managers, industry associations and other stakeholders, with respondents in strong support for the proposal, noting that the changes will facilitate market liquidity, hedging efficiency and further market growth, the market watchdog said in a statement on Wednesday. 

Subject to the legislative process, the new position limits are expected to take effect in July, it said. 

Under the proposal, the position limits for the futures and options contracts of the Hang Seng Index, Hang Seng China Enterprises Index and Hang Seng Tech Index will be increased by 50 percent to 15,000 position delta, 108 percent to 25,000 position delta, and 43 percent to 30,000 position delta, respectively.

The SFC is committed to fostering an adaptive and robust regulatory framework that not only safeguards the integrity of Hong Kong's financial markets but also supports their developments, said Rico Leung Chung-yin, the SFC’s executive director of supervision of markets. 

“The enhancements will reinforce Hong Kong's position as a leading global risk management center. In parallel, we will maintain vigilant oversight and rigorous monitoring of our market operations," Leung said. 

STAFF REPORTER