Regulators release conclusions on the OTC derivatives regulatory regime

Press Releases

27 Jun 2017

Regulators release conclusions on the OTC derivatives regulatory regime

The Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) today published conclusions on a joint consultation paper which proposed adjusting the scope of “OTC derivative product” under the over-the-counter (OTC) derivatives regulatory regime (Note 1). The proposed adjustments were to:

  • prescribe certain additional markets and clearing houses so that products traded and cleared through them will not be regarded as “OTC derivative products”; and
  • exclude Delta One Warrants (Note 2) from the definition of “OTC derivative product”.

After taking market feedback into account, the HKMA and SFC have concluded that the proposed adjustments should be implemented. The conclusions paper also provides further clarification as to how Delta One Warrants will be defined. The HKMA and SFC will work with the Department of Justice on drafting the necessary legislative amendments to implement these changes.

The conclusions paper can be downloaded from the websites of the HKMA and the SFC.



  1. The HKMA and the SFC issued a joint consultation paper on these adjustments on 27 April 2017.
  2. Delta One Warrants are call warrants with a strike price set at zero or very close to zero. They are intended to enable clients to gain synthetic exposure to the underlying assets, in particular, in closed or difficult-to-access markets.
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Last revision date : 27 June 2017