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Hong Kong bourse to introduce volatility controls for derivatives market

Published 10/24/2016, 06:09 AM
Updated 10/24/2016, 06:20 AM
© Reuters. A flag of Hong Kong Exchanges and Clearing Ltd flies in front of a Chinese national flag, on the day the stock exchange operator announces their annual results in Hong Kong

HONG KONG (Reuters) - Hong Kong Exchanges and Clearing (HKEX) said on Monday it plans to extend new volatility controls to its derivatives market on Nov. 14.

The volatility control mechanism, which has been operating successfully on the HKEX securities market since Aug. 22, aims to "protect market integrity by preventing extreme price volatility arising from major trading errors and other unusual incidents", the bourse said in a statement.

The new controls, which will apply to the Hang Seng Index (HSI) Futures, Mini-HSI Futures, H-shares Index (HHI) Futures and Mini-HHI Futures contracts, put contracts or stocks that trigger certain price thresholds into a five minute so-called "cooling off" period.

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