Regulators release consultation conclusions, supplemental consultation on proposals to regulate OTC derivatives market

The Hong Kong Monetary Authority (HKMA) and Securities and Futures Commission (SFC) jointly published today the Consultation Conclusions on the Proposed Regulatory Regime for the Over-the-counter (OTC) Derivatives Market in Hong Kong.

In general, respondents were supportive of the proposed regulatory regime and recognise the need for Hong Kong to develop and implement measures in line with G20 Leaders’ objectives of improving transparency, regulatory monitoring and reducing counterparty and systemic risk in the OTC derivatives market. Taking into consideration the responses received, the HKMA and SFC have fine-tuned some of the features of the regime.

The Consultation Conclusions Paper summarises the comments received and the HKMA and SFC’s responses to these comments. It also sets out the conclusions and proposals for taking the OTC derivatives reform initiative forward.

In October 2011, the HKMA and SFC invited the public to comment on proposals for implementation of a new regulatory regime for Hong Kong’s OTC derivatives market. The consultation period ended on 30 November 2011 and 34 written submissions were received. The responses (unless requested to be withheld from publication) can be downloaded from the HKMA website or the SFC website.

The HKMA and SFC also issued today a Supplemental Consultation Paper on the proposed scope of the new regulated activities to be introduced under the proposed OTC derivatives regulatory regime, and the proposed oversight of systemically important players. The consultation period will end on 31 August 2012. Interested parties are invited to submit their comments to the HKMA or the SFC on or before the deadline.

Notes:

1. A factsheet, which provides some background information on the consultation conclusions and supplemental consultation, can be downloaded from the HKMA website or the SFC website.
2. For enquiries, please contact –
   • HKMA : Queenie Yip at 2878 1687 or Natalie Wu at 2878 8246.
   • SFC : Jonathan Li at 2283 6808 or Ernest Kong at 2840 9335.

Hong Kong Monetary Authority
11 July 2012