Published On: Mon, Jul 21st, 2014

Joint HKMA-SFC Consultation On Mandatory Reporting And Related Record Keeping Rules For OTC Derivatives Market

Ashley Alder, HK SFC CEO

Ashley Alder, HK SFC CEO

The Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) on 18 July began a one-month consultation on the detailed requirements relating to the mandatory reporting and related record keeping obligations under the new over-the-counter (OTC) derivatives regime.

The new regulatory regime for OTC derivatives is reflected in the Securities and Futures (Amendment) Ordinance 2014, which was enacted by the Legislative Council in April 2014. Following consultation, the proposed detailed requirements will be set out in subsidiary legislation to be made under the new regime. The requirements aim to enhance financial market stability by increasing transparency in the OTC derivatives market. The proposals have been developed in line with similar reform efforts in other major financial markets, and with input from the industry.

The key proposals cover six main areas –
• which types of transactions will have to be reported
• who will be subject to reporting and in what circumstances
• what exemptions and reliefs may apply
• reporting timeframes and applicable grace periods
• the form, manner and contents of reports
• related record keeping obligations

This consultation marks the first of a series of consultations on the detailed rules for implementing the new OTC derivatives regulatory regime.

The consultation period will end on 18 August 2014.

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