SFC proposes margin requirements for non-centrally cleared OTC derivatives

19 Jun 2018

The Securities and Futures Commission (SFC) today launched a two-month consultation on proposals to impose margin requirements for non-centrally cleared over-the-counter (OTC) derivatives (Note 1).

Under the proposals, a licensed corporation which is a contracting party to a non-centrally cleared OTC derivative transaction entered into with an authorised institution, a licensed corporation or another defined entity would be required to exchange margin with the counterparty if the notional amount of their outstanding non-centrally cleared OTC derivatives exceeds specified thresholds.

The consultation also specifies the instruments which would be subject to the proposed margin requirements and the assets eligible as margin.

"The SFC works closely with other local and international authorities to put in place a legal and regulatory framework to implement the G20 commitments to reform OTC derivatives markets," said Mr Ashley Alder, the SFC’s Chief Executive Officer. "These proposals are part of comprehensive reforms to implement international standards and enhance Hong Kong’s regulatory regime for OTC derivatives activities."

Interested parties are invited to submit their comments to the SFC on or before 20 August 2018 via the SFC website (www.sfc.hk), by email (otcmargin_consultation@sfc.hk), by post or by fax to 2523 4598.





  1. These requirements were set out in a report, Margin requirements for non-centrally cleared derivatives, published in March 2015 by the Working Group on Margining Requirements, a joint initiative of the Basel Committee on Banking Supervision and the International Organization of Securities Commissions.

Page last updated : 19 Jun 2018