Circular in relation to the clearing and record keeping rules for the OTC derivatives regime – changes to the list of persons designated as financial services providers

14 Dec 2018



The revised list of persons designated as financial services providers (FSPs) for the purposes of the Securities and Futures (OTC Derivative Transactions—Clearing and Record Keeping Obligations and Designation of Central Counterparties) Rules (Clearing Rules) is gazetted[1] today, and becomes effective on 1 January 2019.

Licensed Persons are reminded that if their average total position in OTC derivatives during a Calculation Period[2] reaches the corresponding Clearing Threshold[3], relevant OTC derivative transactions they enter into on and after the corresponding Prescribed Day[4], including those with FSPs must be centrally cleared in accordance with the Clearing Rules.   

Please refer to the Clearing Rules[5], the Clearing Amendment Rules[6] and the Frequently Asked Questions on the Implementation and Operation of the Mandatory Clearing Regime[7] for more information.

Supervision of Markets

Securities and Futures Commission

End


[1] The gazette notice 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 Clearing Amendment Rules refer to the Securities and Futures (OTC Derivative Transactions—Clearing and Record Keeping Obligations and Designation of Central Counterparties) (Amendment) Rules 2018 gazetted on 7 December 2018. Subject to negative vetting by the Legislative Council, they will be effective on 1 March 2019. The gazetted version can be found at : https://www.gld.gov.hk/egazette/pdf/20182249/es220182249259.pdf

[7] 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%2020181213.pdf


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Page last updated : 14 Dec 2018