Comment Letter to the Proposed Regulatory Regime for the Over-the-Counter (OTC) Derivatives in Hong Kong

Comment Letters

Submitted on: 30 November 2011
Submitted to: Hong Kong Monetary Authority (HKMA) and Securities and Futures Commission (SFC)
Kha Loon Lee, CFA | James Allen, CFA | Rhodri Preece, CFA | Padma Venkat, CFA



In line with the G20 commitments, the Consultation proposes the establishment of a Trade Repository (HKMA–TR) for collection of data relating to OTC derivatives transactions and the process of establishing a new clearing house in Hong Kong that may serve as a Central Counter Party (CCP) for the OTC derivatives market in Hong Kong.  The Consultation also provides an overview of the current environment, the uniqueness of the Hong Kong derivatives market, an assessment of what HKMA–TR and CCP entail, the phased approach of incorporating certain types of interest rate swaps (IRS) and non-deliverable forwards (NDF) to the mandatory reporting and clearing regime and how this will apply to Authorized Institutions (AIs), Licensed Corporations (LCs) and others who are Hong Kong persons.

In general, CFA Institute is supportive of both the introduction a reporting regime and a CCP for central clearing of OTC derivative contracts in Hong Kong, with an ultimate goal of greater use of exchange trading for derivatives.
  • Derivatives:
    • Types of Derivative Instruments and Their Characteristics

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