HONG KONG: Regulators Release Conclusions on the OTC Derivatives Regulatory Regime

Tuesday June 27 2017

The Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) on 27 June 2017, published conclusions on a joint consultation paper which proposed adjusting the scope of the “OTC derivative product” under the over-the-counter (OTC) derivatives regulatory regime. 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 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.

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