Securities & Futures Commission of Hong Kong

OTC Derivatives Regulatory Regime

To address the structural deficiencies in the over-the-counter (OTC) derivatives market highlighted by the 2008 global financial crisis, the Legislative Council enacted the Securities and Futures (Amendment) Ordinance 2014 (Amendment Ordinance) on 26 March 2014. The Amendment Ordinance provides a regulatory framework for the OTC derivatives market in Hong Kong.

The Amendment Ordinance is being implemented in stages:-

  • The first stage came into effect on 10 July 2015, involving mandatory reporting of transactions in certain interest rate swaps (IRS) and non-deliverable forwards and related record keeping obligations together with the general framework of the new regime;
  • The second stage involves (i) mandatory clearing of certain transactions of standardised IRS in HKD or one of the G4 currencies (i.e. USD, EUR, GBP or JPY) and related record keeping obligations, together with designation of central counterparties for the purposes of mandatory clearing; and (ii) expanding mandatory reporting so that OTC derivatives under all five key asset classes (namely interest rates, foreign exchange, equities, credit and commodities) are covered.  This was/will be implemented on 1 September 2016 and 1 July 2017 respectively;
  • Other aspects of the regime will follow in later stages.

Legislation:

Commencement Notices:

Gazette Notices:

List of Designated Central Counterparties for the Purposes of Mandatory Clearing:

Public Consultations and Conclusions:

Frequently Asked Questions, Guidelines and Manuals:

  • FAQs on the operation and implementation of the mandatory reporting regime
  • FAQs on the operation and implementation of the mandatory clearing regime
  • OTC Derivatives Trade Repository Reporting Service Reference Manual – click here to access the Hong Kong Trade Repository website
  • Hong Kong Trade Repository Administration and Interface Development Guide – Reporting Service – click here to access the Hong Kong Trade Repository website
  • Hong Kong Trade Repository Administration and Interface Development Guide – Reporting Service Annex – Supplementary Reporting Instructions for OTC Derivative Transactions – click here to access the Hong Kong Trade Repository website
  • Operating Procedures for the Hong Kong Trade Repository – User Manual for Participants (Administrative Functions) – click here to access the Hong Kong Trade Repository website
  • Operating Procedures for the Hong Kong Trade Repository – User Manual for Participants (Trade Functions – Reporting Service) – click here to access the Hong Kong Trade Repository website
  • Operating Procedures for the Hong Kong Trade Repository – User Manual for Participants (Trade Functions – Reporting Service – Appendix) – click here to access the Hong Kong Trade Repository websit

Other Information:

Hong Kong Trade Repository website: http://hktr.hkma.gov.hk/

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