Hong Kong Mercantile Exchange
Corporate brand
UnclaimedA defunct Hong Kong electronic commodities exchange that offered gold and silver futures before surrendering its trading authorization in 2013.
Last updated August 31, 2026
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Overview
Hong Kong Mercantile Exchange, commonly abbreviated as HKMEx, was an electronic commodities exchange established in Hong Kong to provide exchange-traded futures, options and other derivatives for participants in the Asia-Pacific time zone. Its stated commercial rationale was to give Asian market participants a locally situated and transparent venue for commodities trading, reducing reliance on exchanges located in London and New York and potentially improving access to the growing mainland Chinese commodities market. The exchange was publicly announced on 25 June 2008 by its chairman, Barry Cheung Chun-yuen. Hong Kong Financial Secretary John Tsang attended the launch event and described commodities futures as an area of opportunity for Hong Kong. HKMEx initially promoted an ambition centered on oil futures and a broader sequence of energy, base-metals and agricultural contracts. Regulatory and market-access constraints affected that strategy. The China Securities Regulatory Commission did not authorize an offshore exchange to establish a commodities-futures delivery business in mainland China, while HKMEx itself operated under authorization from the Hong Kong Securities and Futures Commission for automated trading services rather than as a full brokerage. The exchange developed arrangements intended to support a functioning commodities marketplace. In 2009 it agreed initial terms with LCH.Clearnet for clearing services and contracted with Hong Kong International Airport to use its Precious Metals Depository as a licensed storage venue for gold traded on the exchange. Industrial and financial institutions also became associated with the venture. Industrial and Commercial Bank of China (Asia) acquired a 10 percent equity interest in December 2009 and indicated that it intended to participate as a trading and clearing member and settlement bank. En+ Group acquired a further 10 percent stake in June 2010. HKMEx began formal trading on 18 May 2011 with a US-dollar-denominated gold futures contract. Rather than oil, gold and silver became the exchange's principal products. A US-dollar silver futures contract followed on 22 July 2011. The exchange also discussed future renminbi-denominated precious-metals contracts and a longer-term expansion into base metals, energy and agriculture. By February 2012, its gold and silver contracts had reached more than one million cumulative contracts and reported turnover above US$50 billion. Gold-futures activity later passed 10,000 contracts in a single day for the first time on 4 June 2012. The business nevertheless struggled with low trading volumes, competition from established international exchanges and insufficient financial reserves to sustain its operating costs. Albert Helmig, a former NYMEX vice-chairman who had served as president, retired in 2012; Jane Wang and William Barkshire were appointed co-presidents in August of that year. HKMEx proposed a HK$780 million share issue in March 2013, but postponed it while attempting to secure additional capital. On 18 May 2013, HKMEx surrendered its authorization to provide automated trading services, stating that revenue was insufficient to cover operating expenses. The closure was followed by regulatory and police investigations into suspected irregularities in the exchange's financial affairs. Several people were arrested in connection with matters related to the exchange, and Barry Cheung was later convicted of fraud and conspiracy to defraud and sentenced to four years in prison. The conviction was upheld on appeal. The exchange did not resume operations and is therefore a defunct financial-market brand.
History
HKMEx was conceived as a Hong Kong commodities exchange designed to connect international commodities markets with Asian participants. The proposal was formally announced on 25 June 2008 by chairman Barry Cheung Chun-yuen. Supporters presented Hong Kong's open capital regime, international financial infrastructure and geographic position as advantages for building a commodities venue focused on the Asia-Pacific time zone. The original concept emphasized oil futures, although the exchange ultimately concentrated on precious metals. In March 2009, HKMEx appointed Albert Helmig, formerly vice-chairman of NYMEX, as president. During its preparation phase, the exchange negotiated with LCH.Clearnet over clearing arrangements and secured access to Hong Kong International Airport's Precious Metals Depository as a licensed storage facility for gold. These measures were intended to support the clearing, settlement and physical-delivery infrastructure associated with exchange-traded metals contracts. The exchange also attracted institutional investors. ICBC (Asia) bought 10 percent of the company in December 2009 and indicated that it expected to act as a trading and clearing member and settlement bank. En+ Group acquired another 10 percent in June 2010. HKMEx operated under a Hong Kong Securities and Futures Commission authorization for automated trading services. It was not a full brokerage, and a mainland regulatory decision meant that an offshore exchange could not establish a commodities-futures delivery business in mainland China. This limited the scope of its proposed connection to the mainland market. HKMEx started trading on 18 May 2011 with US-dollar gold futures. It followed that launch with US-dollar silver futures on 22 July 2011. Management discussed future renminbi-denominated gold and silver contracts and a possible progression into base metals, energy and agricultural products. The exchange reported more than one million cumulative gold and silver contracts and turnover above US$50 billion by 13 February 2012. Its US-dollar gold contract exceeded 10,000 contracts traded in a day for the first time on 4 June 2012. Operationally, however, HKMEx faced limited volumes and competition from larger overseas exchanges. Helmig retired, and Jane Wang and William Barkshire were appointed co-presidents on 2 August 2012. The company proposed raising HK$780 million through a share issue in March 2013 but postponed the offering. On 18 May 2013, it surrendered its automated-trading authorization, citing inadequate revenue to meet operating expenses and depleted reserves. Cheung stated that the exchange might seek a new license after recapitalization, but trading did not resume. The shutdown was followed by a regulatory inquiry and police investigation. On 21 May 2013, the SFC said it was investigating suspected irregularities in the exchange's finances and had referred the matter to the police. At least five people were arrested in connection with matters linked to the exchange, including allegations involving false financial instruments. Barry Cheung was subsequently convicted of fraud and conspiracy to defraud and received a four-year prison sentence; the conviction was upheld on appeal. The episode also had political repercussions because Cheung held public positions and was associated with the administration of Hong Kong Chief Executive Leung Chun-ying. Cheung took leave from official duties and later resigned from government and several private-sector positions. HKMEx remains defunct.
- 2013
Trading authorization surrendered
[1]HKMEx ceased trading after surrendering its authorization to provide automated trading services.
- 2013
Financial investigation and arrests
[1]The SFC referred suspected financial irregularities to the police, followed by arrests connected with matters involving the exchange.
- 2012
Trading volume passes one million contracts
[1]Reported cumulative gold and silver futures trading surpassed 1,003,210 contracts, with turnover reported above US$50 billion, by February.
- 2012
Management succession
[1]Jane Wang and William Barkshire were appointed co-presidents after Albert Helmig's retirement.
- 2011
Gold futures trading begins
[1]HKMEx launched its first contract, a US-dollar-denominated gold futures product.
- 2011
Silver futures added
[1]The exchange introduced a US-dollar silver futures contract.
- 2010
En+ Group takes a minority stake
[1]En+ Group acquired a 10 percent interest in the exchange.
- 2009
Albert Helmig appointed president
[1]A former NYMEX vice-chairman was appointed to manage the exchange's day-to-day operations.
- 2009
Clearing and storage infrastructure arranged
[1]HKMEx agreed initial clearing terms with LCH.Clearnet and contracted to use Hong Kong International Airport's Precious Metals Depository for gold storage.
- 2009
ICBC (Asia) takes a minority stake
[1]ICBC (Asia) acquired a 10 percent equity interest and outlined plans to support trading, clearing and settlement.
Products and positioning
A Hong Kong-based, electronically operated commodities derivatives venue intended to serve Asia-Pacific participants with transparent pricing, exchange trading and local time-zone access.
Precious-metals futures · 2011
US-dollar gold futures
HKMEx's first traded contract, launched in May 2011, provided exchange-traded exposure to gold with contracts denominated in US dollars. Gold became one of the exchange's principal products and was supported by the planned use of Hong Kong International Airport's Precious Metals Depository as a licensed storage venue.
Precious-metals futures · 2011
US-dollar silver futures
Introduced in July 2011, the US-dollar silver futures contract was HKMEx's second reported product. It formed part of the exchange's initial precious-metals strategy and was traded alongside the gold contract until the exchange ceased operations.
Commodity derivatives
Commodity options and other derivatives
The exchange was established with a broader mandate covering commodity futures, options and other financial derivatives. Publicly discussed expansion areas included renminbi-denominated precious-metals contracts, base metals, energy and agricultural commodities, but the available record confirms trading primarily in gold and silver futures.
Controversies
2013
Investigation into suspected financial irregularities
After HKMEx surrendered its automated-trading authorization, the Hong Kong Securities and Futures Commission announced an investigation into suspected irregularities in the exchange's financial affairs and referred the matter to the Hong Kong Police. At least five people were arrested in connection with related events. Chairman Barry Cheung was later convicted of fraud and conspiracy to defraud and sentenced to four years in prison; the conviction was upheld on appeal.
Brand decisions
2013
Surrender of automated-trading authorizationStrategyBackground
Low trading volumes, competition from overseas exchanges and depleted reserves left the exchange unable to generate sufficient revenue to cover operating expenses.
Action taken
HKMEx surrendered its authorization to provide automated trading services and ceased trading on 18 May.
Aftermath
A proposed HK$780 million share issue had been postponed, the business did not restart, and regulatory and police investigations followed.
Proposed share issue. Postponed (March-June 2013)
2011
Launch of US-dollar gold futuresProduct launchBackground
HKMEx sought to establish a locally accessible commodities venue for Asian participants and initially moved from its broader oil-futures concept toward precious metals.
Action taken
The exchange began formal trading with a US-dollar-denominated gold futures contract.
Aftermath
Gold became one of the exchange's main traded products and was followed by a silver contract.
2011
Launch of US-dollar silver futuresProduct launchBackground
Following the launch of gold futures, HKMEx expanded its initial precious-metals product range.
Action taken
The exchange introduced a US-dollar silver futures contract in July.
Aftermath
Gold and silver remained the exchange's principal products until its closure.
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