CONSULTATION ON ENHANCEMENTS TO THE OTC DERIVATIVES REGULATORY REGIME FOR HONG KONG

In April 2019, the Hong Kong Monetary Authority and the Securities and Futures Commission jointly issued a consultation paper on “Enhancements to the OTC derivatives regime for Hong Kong” (“Consultation Paper”).

The regime is being implemented in phases with Phase 2 Reporting and Phase 1 Clearing already introduced in July 2017 and September 2016 respectively.

In the Consultation Paper, the regulators introduced the following:-

(a) mandate the use of Unique Transaction Identifiers for the reporting obligation;

(b) revise the list of designated jurisdictions for the masking relief of the reporting obligation; and

(c) update the list of Financial Services Providers under the clearing obligation.

The above consultation was considered by Council with the assistance of the Investment Products and Financial Services Committee of the Law Society. The Law Society, in general, supports the proposals in the Consultation Paper. A copy of the submissions can be found on the Law Society’s website:

http://www.hklawsoc.org.hk/pub_e/news/submissions/20190522.pdf

Jurisdictions: