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By Christine Gaylican, Opalesque Asia:

To improve transparency in trading transactions, Hong Kong Exchanges and Clearing (HKEX) Ltd. chairman Ronald Arculli says the HK bourse has initiated a set of guidelines on "flexible index options" trading in this Chinese city's bourse.

For pending approval of the regulators, the HKEX has issued possible guidelines for flexible index options for Hang Seng Index and H-shares Index options contracts having customized strike prices and expiry months decided by buyers and sellers.

HKEX chairman Arculli says, if approved b regulators, they could be allowed to trade on the open platform through block trade facilities.

"In Hong Kong, we believe further work can be done. We will introduce options with flexible features to our derivatives market, " said Arculli in his speech to colleagues at Citi's Asia-Pacific Securities Market Infrastructure Conference in Macau recently.

According to a separate statement issued by the HKEX (source), offering flexible index options would help increase market transparency by attracting more over-the-counter (OTC) deals to its block trading facility.

At present, large deals in some over-the-counter (OTC) contracts with the same strike prices and expiry months as exchange-traded contracts are already executed as block trades in HKEX's derivatives market.

HKEX is seeking to expand that part of the market ......................

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