Hong Kong Exchanges and Clearing Limited (HKEx) has announced the arrangements for the adjustment to the contract terms of all open Bank of Communications futures and options contracts in existence after the market close on 7 July 2011 to account for Bank of Communications’ bonus issue comprising one share for every 10 shares held.
Highlights of the adjustment arrangements are shown below. Investors should consult their brokers for further details, or if they have any questions regarding the adjustment.
Underlying Stock (Stock Code) |
Bank of Communications Co, Ltd (3328) |
HKATS Code |
BCM |
Corporate Action |
1 bonus share for every 10 existing shares |
Ex-bonus day |
8 July 2011 |
Bank of Communications Futures
Adjustment Procedures
Adjustments will be made to the open positions which exist after the market close on 7 July 2011, the business day immediately before the ex-bonus day. Details of the adjustment procedures are as follows:
Adjustment Term |
Formula |
Remark |
Adjustment Ratio (AR) |
10 shares / (10 shares + 1 bonus share) = 0.9091 |
Rounded to the nearest |
Adjusted Contracted Price (ACP) |
Contracted prices of outstanding stock futures contract |
Rounded to the nearest |
Adjusted Contract Multiplier (ACM) |
Contracted prices of outstanding stock futures contract |
Rounded to the nearest |
Trading of Adjusted and Standard Contracts
After the market close on 7 July 2011, the business day immediately before the ex-bonus day, the open positions will be transferred to the adjusted futures contracts. In addition, new contracts based on the standard contract multiplier will be introduced for trading on the ex-bonus day, 8 July 2011. Details of the adjusted and standard contracts available for trading on and after the ex-bonus day are shown below:
Contract |
Trading Symbol |
Contract Multiplier |
Availability For Trading |
Addition of New Futures Contracts |
Adjusted |
BCA |
ACM |
From ex-bonus day to 29 March 2012 |
No |
Standard |
BCM |
1,000 |
From ex-bonus day onwards |
Yes |
Investors should note that the cash settlement amount of adjusted and standard futures contracts on the last trading day will be calculated using their respective contract multipliers. There will not be any changes to the number of open positions and other contract terms after the transfer of positions.
Bank of Communications Options
Adjustment Procedures
Adjustments will be made to the open positions which exist after the market close on 7 July 2011, the business day immediately before the ex-bonus day. Details of the adjustment procedures are as follows:
Adjustment Term |
Formula |
Remark |
Adjustment Ratio (AR) |
10 shares / (10 shares + 1 bonus share) = 0.9091 |
Rounded to the nearest |
Adjusted Exercise Price (AEP) |
Exercise price of outstanding option series x AR |
Rounded to the nearest |
Adjusted Contract Size (ACS) |
Exercise price of outstanding option series |
Rounded to the nearest |
Trading of Adjusted and Standard Contracts
After the market close on 7 July 2011, the business day immediately before the ex-bonus day, the open positions will be transferred to the adjusted option series. In addition, new option series based on the standard contract size will be introduced for trading on the ex-bonus day, 8 July 2011. Details of the adjusted and standard contracts available for trading on and after the ex-bonus day are shown below:
Contract |
Trading Symbol |
Contract Size |
Availability For Trading |
Addition of New Option Series |
Adjusted |
BCA |
ACS |
From ex-bonus day to 28 June 2012 |
No |
Standard |
BCM |
1,000 |
From ex-bonus day onwards |
Yes |
Investors should note that the adjusted and standard option series have different contract sizes. There will not be any changes to the number of open positions and other contract terms after the transfer of positions.