Circular on Clearing Amendment Rules – Addition of Eight New Calculation Periods

7 Dec 2018



The Securities and Futures (OTC Derivative Transactions—Clearing and Record Keeping Obligations and Designation of Central Counterparties) (Amendment) Rules 2018 (Clearing Amendment Rules) is gazetted[1] today.

Subject to negative vetting by the Legislative Council, the Clearing Amendment Rules will be effective on 1 March 2019.

The Clearing Amendment Rules amend the Securities and Futures (OTC Derivative Transactions—Clearing and Record Keeping Obligations and Designation of Central Counterparties) Rules (Clearing Rules) to provide for eight new Calculation Periods[2], and their corresponding Clearing Thresholds[3] and Prescribed Days[4]. The first new Calculation Period is 1 March 2019 to 31 May 2019.

Licensed Persons are reminded that if their average total position in OTC derivatives during a Calculation Period reaches the corresponding Clearing Threshold, relevant OTC derivative transactions they enter into on and after the corresponding Prescribed Day must be centrally cleared in accordance with the Clearing Rules.   

It is the responsibility of Licensed Persons to ensure their compliance with the Clearing Rules. Please refer to the Clearing Rules[5], the Clearing Amendment Rules and the Frequently Asked Questions on the Implementation and Operation of the Mandatory Clearing Regime[6] for more information.

Supervision of Markets

Securities and Futures Commission

End


[1] The gazetted Clearing Amendment Rules can be found on the Government website.

[2] A Calculation Period is a specified period of time for calculating a person’s average total position in OTC derivatives. Each Calculation Period is three months, and there are two Calculation Periods in each calendar year.

[3] The Clearing Threshold for each Calculation Period is set at USD 20 billion. 

[4] A Prescribed Day is the day that is seven months after the end of its corresponding Calculation Period.

[5] The Clearing Rules can be found at :

https://www.sfc.hk/web/EN/files/SOM/OTC/OTC%20-%20Clearing%20(LN28%20of%202016)%20-%20EN.pdf

[6] The Frequently Asked Questions on the Implementation and Operation of the Mandatory Clearing Regime can be found at :      https://www.sfc.hk/web/EN/files/SOM/OTC/FAQ%20CLearing%20Rules%20-%2011%20Nov%202016.pdf


Click here to download the document


Page last updated : 7 Dec 2018