The term “Relevant Clients” generally refers to a direct client which has placed or proposes to place orders for Futures and Options Contracts on the HKFE’s trading system through a futures/options trading account with an RRI. Where an order is routed through an intermediating chain of brokers, “Relevant Client” is the first person in the chain who is not an RRI. Generally, the “Relevant Clients” in this case are the overseas affiliates (which are not LCs or RIs) of the RRIs instead of the clients of the overseas affiliates. Hence BCAN should be assigned to the overseas affiliates by the RRI and should be tagged to the orders placed by the overseas affiliates. The CID of the overseas affiliates (but not the CID of the clients of the overseas affiliates) should be collected and included in the BCAN-CID Mapping File. For details, please refer to paragraphs 21-22 of and Appendix B to the Consultation Conclusions.
Q1 : We are an RRI and our overseas affiliates route their clients’ derivatives orders to us for execution on HKFE’s trading system. Are the clients of our overseas affiliates “Relevant Clients” under the HKIDR-DM and therefore BCAN is required to be tagged to those orders?
Q2 : In a trade give-up arrangement, where a fund manager places an order through its futures/options trading account maintained with an RRI and, following execution, the position is given up or allocated to a prime broker, who should be regarded as the “Relevant Client” of the RRI for the purpose of HKIDR-DM, the fund manager or the prime broker? If the fund manager is the “Relevant Client” and the order is tagged with the BCAN of the fund manager, is there any requirement to update or amend the BCAN following the give-up or allocation of the position to the prime broker?
The HKIDR-DM applies to the trading level for the derivatives market in Hong Kong and does not affect post-trade processes, such as give-up arrangements. An individual or entity that opens a futures/options trading account with an RRI and trades through that account should be assigned a BCAN by the RRI. There is no requirement to assign BCANs to the beneficial owners of executed give-up trades.
In this case, the fund manager is the “Relevant Client” of the RRI and the fund manager’s BCAN should be tagged to its order placed with the RRI. The BCAN tagged to the order should not be changed throughout the trade execution, even though the executed trade is subsequently given up to a prime broker.
Q3 : We are the Hong Kong branch of a global financial institution, which is an RRI providing derivatives brokerage services for our overseas branches and overseas head office. The clients of our overseas branches/overseas head office place orders with the overseas branches/overseas head office, which route the order to the Hong Kong branch for execution on HKFE’s trading system. As the overseas branches and overseas head office do not have a separate legal entity status from the Hong Kong branch, are our overseas branches/overseas head office or the clients of our overseas branches/overseas head office “Relevant Clients” under the HKIDR-DM?
For the purposes of the HKIDR-DM, our policy intent is that an overseas branch or an overseas head office of an RRI should be treated as an overseas affiliate, provided that (i) the Hong Kong branch has opened and maintained separate futures/options trading accounts for its overseas branches/overseas head office and orders are placed through these accounts; and (ii) the CID of these overseas branches/overseas head office are distinguishable from one another (i.e. the name of the branch should be included in the CID). If these two criteria are met, in the above case, the “Relevant Client” is the overseas branches/overseas head office but not their clients. Respective BCANs should be assigned by the Hong Kong branch to the overseas branches and overseas head office, and CID of the individual overseas branch and overseas head office should be collected for submission to HKFE or SEHK, as the case may be.
Illustration 1
In this example, the UK branch of RRI A is regarded as the Relevant Client under the HKIDR-DM if the above two criteria are met. The Hong Kong headquarter/branch of RRI A should assign a BCAN to the UK branch and submit the BCAN together with the CID of the UK branch. The underlying client of the UK branch (i.e. Client D) is not regarded as the Relevant Client and its CID is not required to be submitted under the HKIDR-DM.
Illustration 2
In this example, Headquarter E of RRI A is regarded as the Relevant Client under the HKIDR-DM if the above two criteria are met. The Hong Kong branch of E (RRI A) should assign a BCAN to Headquarter E in the UK and submit the BCAN together with the CID of Headquarter E in UK. The underlying client of the Headquarter E (i.e. Client D) is not regarded as the Relevant Client and its CID is not required to be submitted under the HKIDR-DM.
Q4 : We are the Hong Kong trading desk of an RRI which has a shared/cross relationship with our Country X affiliate. Client accounts are opened and maintained by our Country X affiliate. Orders of these clients are placed through these client accounts and are booked with the Country X affiliate, which opens and maintains an omnibus futures/options trading account with the RRI. The clients are managed by the Hong Kong trading desk, which acts as the relationship manager and routes the orders to HKFE’s trading system. Who is our “Relevant Client”, our Country X affiliate or its clients? Is the answer different if the orders are placed to staff with both Hong Kong and Country X licences (e.g. night desk)?
A “direct client” (or “Relevant Client”) is defined under paragraph 5.6A(b)(viii) of the Code of Conduct as the most immediate client of a relevant licensed or registered person (or RRI) which has placed or proposes to place an on-exchange order or block trade order through a futures/options trading account with that person. Therefore, if the RRI does not open and maintain futures/options trading accounts for the clients (in this case the client accounts are opened and maintained by the Country X affiliate), they are not “Relevant Clients” of the RRI. Instead, the Country X affiliate which opens and maintains an omnibus futures/options trading account with the RRI is the “Relevant Client” of the RRI. The same answer applies for a situation where such orders are placed to staff with both Hong Kong and Country X licences.
Last update: 30 Sep 2026