Hong Kong Futures Exchange: The optimization of the daily settlement price method for flagship products such as the Hang Seng Index will officially take effect on August 31.

On August 17, Hong Kong Futures Clearing Corporation Limited (Hong Kong Futures Exchange) announced that the optimized daily settlement price method for the flagship products of the Hong Kong Futures Exchange will officially take effect on August 31, 2026. These products include futures and options contracts for the Hang Seng Index (HSI), the Hang Seng H-Share Index ETF (HSCEI), and the Hang Seng Tech Index (HSTECH), as well as related Mini Hang Seng Index and Mini Hang Seng H-Share Index ETF contracts. From the effective date, the daily settlement price of these products will be determined according to the optimized daily settlement price method. The optimized method is designed to provide a more robust and market-representative calculation of the daily settlement price, thereby continuously enhancing the effectiveness of risk management and margin calculations. Any margin effects arising from the implementation of the method change will be one-time only and limited to the end-of-day margin calculation on the effective date. According to the announcement made by the Hong Kong Futures Exchange on April 30, under the optimized daily settlement price method, the daily settlement price will be determined based on a revised waterfall structure, including the following: (i) where possible, utilizing qualified and validated observable market data during the pricing process; (ii) using optimized model-derived theoretical prices when market data is insufficient or inappropriate; (iii) where necessary, rolling back to the previous trading day's daily settlement price; and (iv) exercising the clearing house's discretion in special or exceptional circumstances to ensure that the determination of the daily settlement price is fair and reasonable.