Circular on Clearing Amendment Rules
27 Oct 2023
Circular on Clearing Amendment Rules
The Securities and Futures (OTC Derivative Transactions—Clearing and Record Keeping Obligations and Designation of Central Counterparties) (Amendment) Rules 2023 (Clearing Amendment Rules) is gazetted[1] today. Subject to negative vetting by the Legislative Council, the Clearing Amendment Rules will be effective on 1 July 2024.
The Clearing Amendment Rules provide for certain interest rate swap transactions referencing alternative reference rates to be subject to the clearing obligation under specified conditions. At the same time, certain interest rate swap transactions referencing interbank offered rates which are or will no longer be published or considered representative would no longer subject to clearing obligation.
Licensed Persons are reminded that if their average total position in OTC derivatives during a Calculation Period[2] reaches the corresponding Clearing Threshold[3], relevant OTC derivative transactions they enter into on and after the corresponding Prescribed Day must be centrally cleared in accordance with the Clearing Rules[4]. It is the responsibility of Licensed Persons to ensure their compliance with the Clearing Rules.
Supervision of Markets
Securities and Futures Commission
End
[1] The gazetted Clearing Amendment Rules can be found on the Government website.
[2] A Calculation Period is a specified period of time for calculating a person’s average total position in OTC derivatives. Each Calculation Period is three months, and there are two Calculation Periods in each calendar year.
[3] The Clearing Threshold for each Calculation Period is set at USD 20 billion.
[4] The Clearing Rules can be found at https://www.elegislation.gov.hk/hk/cap571AN!en@2023-03-01T00:00:00
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Page last updated: 27 Oct 2023