The Securities and Futures Commission of Hong Kong has suggested relaxing the position limits for trading derivative instruments on the main exchanges.

17:06 27/02/2025

The Securities and Futures Commission of Hong Kong has issued a document stating that, in order to closely follow market developments, it is recommended to increase the position limits for trading exchange-traded derivative products based on the three major stock indices in Hong Kong, and consultations will be held on this recommendation.

On February 27, the Hong Kong Securities and Futures Commission issued a statement proposing to increase the position limits for trading derivative instruments based on the three major stock indexes in Hong Kong in order to align with market developments. They also announced a consultation on the proposal. To facilitate market participants in hedging risks, the proposal suggests increasing the existing position limits for futures and options contracts of the Hang Seng Index, Hang Seng H-Share Index ETF Index, and the Hang Seng TECH Index by 50%, 108%, and 43% respectively, to 15,000, 25,000, and 30,000 contracts for hedging against price changes in specified assets. This move will enable the Hong Kong derivative market to keep up with the market value of major stock indexes and the trading volume of their constituent stocks in recent years, without introducing additional risks to the market. Ms. Angelina Leung, the Executive Director of the Hong Kong Securities and Futures Commission, stated that relaxing position limits will not only allow market participants to manage their positions more flexibly, but also enhance the liquidity and efficiency of derivative instruments and the overall market. She believes that the proposal will help boost the competitiveness of the Hong Kong financial market while maintaining a robust regulatory framework to manage systemic risks, striking an appropriate balance.

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