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Mandatory reporting of Over-The-Counter (OTC) derivatives

  • Hong Kong
  • Derivatives


Amendments made to the Securities and Futures Ordinance in March 2014 on mandatory reporting and record keeping obligations in respect of OTC derivative transactions are likely to take effect in 2015, through the introduction of the Securities and Futures (OTC Derivative Transactions – Reporting and Record Keeping) Rules.

The Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA) jointly consulted on the Rules during 2014. The Rules will introduce requirements of mandatory reporting (by way of electronic reporting to HKMA) and record keeping in relation to OTC derivative transactions. The new regime is expected to be introduced in phases, both in terms of the products caught by the regime and the contracting parties. Most significantly, authorised institutions (AIs) and licensed corporations (LCs) will be caught by the obligations first, and will benefit from a 6 month concession period.

Most recent statements from the SFC and HKMA indicate that the Rules are expected to pass through negative vetting in the Legislative Council in Q1 2015 and introduced shortly thereafter. Consultation on proposals for mandatory clearing will follow in 2015.