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Hong Kong Mercantile Exchange to Close Monday, Gold and Silver Paper Contracts will have Cash Settlements

-- Posted Monday, 20 May 2013 | | Disqus

HONG KONG, 18 May, 2013:

The Hong Kong Mercantile Exchange (HKMEx) announces today it has decided to voluntarily surrender the authorisation to provide automated trading services (“ATS”) granted by the Securities and Futures Commission (“the SFC”).

With immediate effect, no new orders may be placed and all open positions will be financially settled at the settlement price determined by HKMEx and its designated clearinghouse.

The voluntary surrender decision was made to enable the Exchange to re-align its strategy with the new industry environment since its trading revenues have not been sufficient to support operating expenses and, as a result, its inability to meet the required regulatory financial conditions.               

While trading on the Exchange will discontinue, HKMEx as an organisation will continue to operate with its existing staff, and will focus on developing new products including renminbi-denominated precious and base metals contracts that will better meet customer needs. It also intends to re-apply at an appropriate time for an ATS authorization to launch these products with stronger and more effective market maker programs.

“The favourable conditions under which HKMEx was founded have not changed. Global commodity demand continues to shift towards Asia as the region undergoes sustained growth, presenting great opportunities that we will continue to exploit,” said Barry Cheung, Chairman of HKMEx. “Our priorities now are to protect members’ interests by ensuring effective closing of open positions while strengthening our shareholding base and developing new products that play to our distinctive strengths.”

In closing out the open positions, the Exchange has developed a plan in consultation with the SFC to ensure the process is orderly and that investors are well informed of the matter. The Exchange will disseminate settlement prices to its members the morning of next Monday, 20 May 2013. Investors may contact the Exchange’s hotline at +852 3900 9898 for any assistance or enquiry.




Exchange turnover hits US$50 billion 

HONG KONG, 13 February, 2012- The Hong Kong Mercantile Exchange (“HKMEx”), China’s global marketplace, announces that its trading volume surpassed one million contracts, marking a significant milestone in the Exchange’s development since it went live in May last year.

As of 5pm on February 13, trading on HKMEx’s gold and silver futures reached 1,003,210 contracts, representing total turnover of over US$50 billion (around HK$390 billion). Daily average volume for the first eight trading days of February stood at 7,198 contracts, compared to 2,455 per day in the whole of May. Since launch, more than 832 metric tons of gold have been traded.

“HKMEx was founded to bridge China’s fast-growing commodities markets with the rest of the world by providing products adhering to international standards, but tailored to local and regional market participant’s risk management needs. This is especially pertinent amid today’s uncertain global economic climate, characterised by high commodity price volatility,” said Barry Cheung, Chairman of HKMEx. “We are pleased to have reached this significant trading milestone today, and look forward to the continued support from our members as well as exchange partners as we pursue the task of building a vibrant and liquid marketplace for commodities trading in a fast and secure environment.”

In addition to US-dollar gold and silver future contracts currently traded, HKMEx plans to launch a renminbi-denominated gold futures contract along with other precious metals. Also in the pipeline are renminbi contracts in copper and other base metals. The Exchange will also develop other futures contracts in energy, agriculture, and commodity indices.

HKMEx is backed by well-known shareholders including China’s ICBC and COSCO Group, as well as Russia’s En+ Group, among other regional and international institutions. Its membership of 23, up from 18 at launch, include some of the most well-respected futures brokerages and financial institutions in Asia and across the world.





The exchange was announced at a Hong Kong press conference on June 25, 2008 by Chairman Barry Cheung Chun-yuen (Chinese: 張震遠). In attendance was Hong Kong Financial Secretary John Tsang Chun-wah who said there is “a huge opportunity for Hong Kong to develop a commodities futures market” in Hong Kong.[3] In March 2009, HKMEx appointed Albert Helmig, a former Vice Chairman of NYMEX, as President of the exchange to lead day-to-day operations of the bourse.[4]

In June 2009, HKMEx and LCH.Clearnet agreed initial terms for LCH.Clearnet to provide clearing for the exchange.[5] In September, HKMEx signed a contract with Hong Kong International Airport to use HKIA’s Precious Metals Depository as a licensed storage venue for gold traded on the exchange.[6]

In December 2009, ICBC (Asia) acquired a 10% equity stake in the company, and said it intends to participate extensively in the exchange's operations as a trading and clearing member, as well as a settlement bank.[7] This was followed by a June 2010 announcement that En+ Group, owned by Russia's Oleg Deripaska, had also purchased a 10% equity interest.[8]

On May 18, 2011, HKMEx formally began trading with a US Dollar gold futures contract. [9]In an interview with Reuters, Helmig said it plans to launch gold and silver futures contracts denominated in renminbi. He also said HKMEx will follow precious metals products with contracts in base metals, and then energy and agriculture.[10] On July 22, 2011, the exchange launched a second product, a US Dollar silver futures contract.[11]

As of 5pm on February 13, 2012 trading on HKMEx’s gold and silver futures reached 1,003,210 contracts, representing total turnover of over US$50 billion (around HK$390 billion). [12] Trading on the exchange's US-dollar gold futures for the first time surpassed the 10,000 contract mark on June 4, 2012.[13]

On August 2, 2012, the exchange appointed Jane Wang and William Barkshire as Co-Presidents, following the retirement of Albert Helmig. .[14]



HKMEx's gold futures contract is in 32-troy ounce (1-kilogram) bar units and priced in US dollars per troy ounce. There is one contract per board lot. Futures contracts are offered for expiry in the current calendar month, the next two consecutive calendar months, and any even months falling within a 12-month period starting with the current month. The contract will be physically delivered in Hong Kong.[9]


HKMEx's US Dollar silver futures contract trades in units of 1,000 troy ounces with physical delivery in Hong Kong. Contracts are for the current calendar month, the next two consecutive months, and any months of January, March, May, July, September, and December within the succeeding 12-month period.[11]




-- Posted Monday, 20 May 2013 | Digg This Article | Source:

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