HKMA and SFC conclude joint consultation on amendments to the Clearing Rules for over-the-counter derivative transactions

The Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) today (5 June) issued joint consultation conclusions 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.

Respondents to the consultation expressed broad support for the proposed approach to accommodate future Calculation Periods and the corresponding Prescribed Days under the Clearing Rules. There was general consensus that the proposal increases certainty on the clearing obligation, thus enabling more effective internal planning for market participants.

In a move to further increase the efficiency of the operation of the Clearing Rules, the HKMA and the SFC consulted the public in early 2026 on proposals to designate, once and for all, standard calculation periods for each year with effect from 1 March 2027 (Note 3). This would improve on the current approach where the existing list of calculation periods specified in the Clearing Rules needs to be updated by legislative amendments regularly to facilitate the central clearing of OTC derivative transactions.

In view of broad market support, the HKMA and the SFC will proceed with the legislative process to introduce the proposed amendments to the Clearing Rules, and aim to bring the amendments into effect on 1 March 2027, i.e., the starting date of the proposed new series of Calculation Periods.

Notes:

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 relevant OTC derivative transactions for a specified 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.