Renminbi Currency Futures - Introduction

 

Hong Kong is the leading offshore Renminbi Centre with the largest pool of RMB liquidity outside Mainland China. The city is a global hub for offshore RMB trade settlement and has a RMB clearing platform with a global network (RTGS system).

 

Advantages of trading USD/CNH Futures:

 

Exchange of principal at expiration

They are the world’s first deliverable RMB currency futures. Quoted, margined and settled in RMB, the contract will be well positioned to complement the deliverability of the CNH market and the increasing number of RMB hedging and investment products available in Hong Kong.

 

Hedge or take on RMB exchange rate risk

Investors will be able to hedge or take on RMB exposure with USD/CNH futures. There is no restriction on the use of CNH, so the CNH market is a good reflection of supply and demand.

 

Quoted in standard interbank FX terms

The contract is quoted in standard interbank FX terms: RMB to USD (e.g. RMB6.2486 per USD).

 

Delivery of USD for RMB

USD/CNH futures will be settled at expiration by exchanging principal (contract size in USD) versus payment in RMB based on the spot USD/CNY(HK) fixing published by the Treasury Markets Association in Hong Kong.

 

Leverage

Futures contracts are traded on a margin basis so only a small fraction of the total exposure is required upfront.

 

Transparent Pricing

USD/CNH futures will be offered exclusively on HKEx’s electronic derivatives trading platform, which offers transparent pricing in a regulated centralised marketplace.

 

Access for global market participants

Trading of USD/CNH futures at HKEx will give market participants from around the world, including banks, funds, trading companies and individual investor, access to the RMB.

 

Minimal counterparty risk

Trades will be cleared and settled by HKFE Clearing Corporation Limited, an HKEx subsidiary, acting as central counterparty in every transaction.

 

Market makers providing liquidity

Market makers will provide continuous two-sided markets throughout the trading day to enhance liquidity.