Regulators consult on further enhancements to the OTC derivatives regulatory regime

27 Mar 2018

The Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) today issued a joint consultation on further enhancements to the over-the-counter (OTC) derivatives regulatory regime in Hong Kong, including a proposal to mandate the use of the Legal Entity Identifier (LEI) for the reporting obligation (Note 1).

To align with global standards, all entities contained in a transaction report to be submitted to the Hong Kong Trade Repository would be required to be identified by their LEI (Note 2). The timeline for implementation will be staggered for different types of entities.

In addition, as the second phase of the OTC derivatives clearing regime (Note 3), the regulators propose to expand the clearing obligation to specified standardised interest rate swaps denominated in Australian Dollars.

The consultation paper also sets out proposed factors for determining which products would be appropriate for a platform trading obligation (Note 4) in Hong Kong.

Interested parties are invited to submit comments to the HKMA or the SFC by 27 April 2018.

The joint consultation paper can be downloaded from the websites of the HKMA or the SFC.



  1. Phase 2 mandatory reporting of OTC derivatives transactions came into effect on 1 July 2017, and covers all five major asset classes (interest rates, foreign exchange, credit, commodities and equities) of OTC derivatives. See the Consultation Conclusions and Further Consultation on Introducing Mandatory Clearing and Expanding Mandatory Reporting and Further Consultation Conclusions on Introducing Mandatory Clearing and Expanding Mandatory Reporting issued jointly by the HKMA and SFC on 5 February 2016 and 15 July 2016.
  2. A unique 20-digit, alpha-numeric code which identifies entities in a financial transaction.
  3. Phase 1 mandatory clearing, covering specified standardised interest rate swaps, came into effect on 1 September 2016. See the two consultation conclusions papers mentioned in Note 1 above.
  4. The obligation to trade specified OTC derivative products on a designated trading platform in accordance with trading rules to be proposed.

Page last updated : 27 Mar 2018