HKMA and SFC Finalize Proposals to Enhance Hong Kong’s OTC Derivatives Reporting Regime

The Hong Kong Financial Authority (HKMA) and the Securities and Futures Fee (SFC) have collectively concluded their session on enhancements to the over-the-counter (OTC) derivatives reporting regime in Hong Kong, in accordance with HKMA.

Session and Suggestions

In March 2024, the HKMA and SFC initiated an extra session to align with worldwide requirements, specializing in the necessary use of Distinctive Transaction Identifier (UTI) and Distinctive Product Identifier (UPI), in addition to the reporting of Vital Information Parts (CDE). These steps are a part of the Group of Twenty’s dedication to reform OTC derivatives markets and goal to facilitate regulatory evaluation of OTC derivatives transactions.

Respondents to the session typically supported the proposals, recognizing the advantages of worldwide standardization and harmonization of information parts reported throughout numerous OTC derivatives reporting regimes worldwide. Based mostly on the suggestions, the HKMA and SFC have fine-tuned sure elements of the proposals to make sure clean implementation.

Implementation Timeline

The conclusions paper, revealed on September 26, 2024, particulars the finalized record of information parts topic to necessary reporting. The implementation of those proposals is about for September 2025. This timeline permits market members ample time to adapt to the brand new necessities.

Worldwide Context and Requirements

Distinctive Transaction Identifier (UTI) is a novel identifier for every reported OTC derivatives transaction, structured in accordance with the Technical Steerage on Harmonisation of the Distinctive Transaction Identifier issued by the Committee on Funds and Market Infrastructures (CPMI) and the Worldwide Group of Securities Commissions (IOSCO) in February 2017. Equally, the Distinctive Product Identifier (UPI) identifies particular OTC derivatives merchandise as per the Technical Steerage on Harmonisation of the Distinctive Product Identifier issued in September 2017 by the identical our bodies.

Vital Information Parts (CDE) embody a standardized set of OTC derivatives transaction information parts, codecs, and allowable values. These requirements have been revealed by CPMI and IOSCO in April 2018 and later by the Regulatory Oversight Committee of the International Authorized Entity Identifier Basis in September 2021 and 2023.

For extra particulars, the conclusions paper and respondents’ suggestions might be accessed on the official web sites of the HKMA and the SFC.

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