Joint HKMA-SFC consultation on the OTC derivatives regulatory regime

27 Apr 2017

The Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) today issued a joint consultation on the prescription of additional markets and clearing houses, and the prescription of Delta One Warrants (Note 1), for the purpose of the over-the-counter (OTC) derivatives regulatory regime.

This consultation is in response to a recent request from market participants that certain products be excluded from the upcoming second phase of mandatory reporting (Note 2).

The proposed prescriptions seek to address the concerns raised by excluding the following products from the definition of “OTC derivative product”, and consequently from the mandatory reporting obligation:

Interested parties are invited to submit comments to the HKMA or the SFC by 26 May 2017.

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



  1. Delta One Warrants are call warrants with a strike price set at zero or very close to zero, and they simply replicate price fluctuations in the underlying asset(s) until the exercise date. They enable clients to gain synthetic exposure to assets in closed or difficult-to-access markets.
  2. The first phase of mandatory reporting came into force on 10 July 2015. The second phase of mandatory reporting is scheduled to come into force on 1 July 2017.

Page last updated : 27 Apr 2017