Hong Kong Exchanges and Clearing Ltd (HKEX) signed a license agreement with MSCI Inc. on Monday to introduce futures contracts on the MSCI China A Index, subject to regulatory approval and market conditions, HKEX said on its website.
The MSCI China A Index will comprise 421 large and mid-cap A-shares, on a pro forma basis, accessible via the Stock Connect upon the completion of MSCI's inclusion process in November 2019, according to the online press release.
The MSCI China A Index will represent the A-share portion of the MSCI Emerging Markets Index.
HKEX Chief Executive Charles Li said in the press release, "This new agreement with MSCI will facilitate the development of a key risk management tool for international investors who need to manage their A-share equity exposure."
"The international trading community has wanted a product like this for some time, and HKEX's MSCI China A Index futures contracts will directly address their needs," said Li.
The date of the new contracts and detailed product specifications will be announced once the launch date is set.
In a bid to connect international investors and Chinese mainland's equity markets, HKEX launched the Shanghai-Hong Kong Stock Connect program in 2014, followed by the Shenzhen-Hong Kong Stock Connect in 2016.