The Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) today issued a joint consultation on the annual update to the list of Financial Services Providers (Note 1) under the over-the-counter (OTC) derivatives clearing regime (Note 2). Eight additional entities are proposed to be included on the list.
Interested parties are invited to submit comments to the HKMA or the SFC by 28 April 2020.
2. The current clearing regime covers transactions between major dealers where at least one of them is a prescribed person (ie, an authorized institution, an approved money broker or a licensed corporation). Transactions in certain standardised interest rate swaps in G4 currencies (ie, US dollar, Euro, British pound and Japanese yen) and Hong Kong dollar between a prescribed person which has reached the prescribed clearing threshold and another major dealer which is not a prescribed person also have to be centrally cleared. To that end, the concept of Financial Services Providers was introduced to identify such major dealers outside of Hong Kong.