HKMA and SFC jointly consult on standard calculation periods under OTC derivative Clearing Rules

The Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) today (29 January) issued a joint consultation on standardising the calculation periods (Note 1) for each year under the Clearing Rules (Note 2) for the over-the-counter (OTC) derivatives regulatory regime.

Under the current approach that requires the central clearing of OTC derivative transactions, the existing list of calculation periods specified in the Clearing Rules needs to be updated regularly. In a move to further increase the efficiency of the operation of the Clearing Rules, the HKMA and the SFC propose to designate, once and for all, standard calculation periods for each year with effect from 1 March 2027 (Note 3).

1. Under the Clearing Rules, a calculation period is used to determine whether a person is subject to mandatory clearing obligation, based on the size of its applicable position in OTC derivative transactions for a calculation period as calculated in accordance with the Clearing Rules.
2. The Securities and Futures (OTC Derivative Transactions – Clearing and Record Keeping Obligations and Designation of Central Counterparties) Rules.
3. Under the proposed approach to be effective from 1 March 2027 onwards, the Clearing Rules will be amended to designate two calendar periods, i.e., 1 March to 31 May and 1 September to 30 November, in each year as calculation periods.