Where the basket relates to shares listed on the Exchange:(1) each class of shares in the basket must be eligible in accordance with rule 15A.30(1) or rule 15A.30(2) or must be a Basket Scheduled Stock eligible for the type of structured product proposed to be issued as defined in rule 15A.35 below; and(2) the minimum weighting for each constituent share in a basket shall be as set out below, unless each share in the basket is eligible in accordance with rule 15A.30(1) or rule 15A.30(2) in which case the minimum weightings shall not apply:
Number of underlying securities comprised in a basket Minimum weighting of each constitutent share Two 25.0% Three 12.5% Four or more 10.0%, and
Note: Weightings for constituent shares in a basket are calculated in accordance with rule 15A.32(3)(b) below.(3) where any share in the basket is a Basket Scheduled Stock, as defined in rule 15A.35 below:(a) the weighting of shares of that class per basket (calculated and expressed as a percentage in accordance with the formula below) shall not exceed(i) 20% in the case of Category 1 Basket Scheduled Stocks;(ii) 30% in the case of Category 2 Basket Scheduled Stocks; and(iii) 45% in the case of Category 3 Basket Scheduled Stocks.(b)
N: is the number of shares (whether a whole or a fraction) of that class per basket,
M: is the closing price of one share of the class in N, and
P: is the total market value of all of the shares of each class per basket obtained by multiplying the number of shares (whether a whole or a fraction) of each class therein by their respective closing prices.(c) The closing price referred to in M and P above shall be the closing price as derived from the Daily Quotation Sheet of the Exchange on the business day prior to the date of launch of the basket.
Where the basket is comprised of:-(1) shares which are not listed on the Exchange each share in the basket must meet the requirements set out in rule 15A.30(3) above, the basket must comprise no more than ten shares and minimum and maximum weightings shall not apply; or(2) other securities, indices or assets the weighting of each of the securities, indices or assets in the basket must first be approved by the Exchange.
The underlying shares of a basket must be such that it allows the holders to gain exposure to a sector, industry, market or other theme recognizable by investors.