Hong Kong introduces use of LEIs
02 July 2018 Hong Kong
Image: Shutterstock
The Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) has issued conclusions to a joint consultation on further enhancements to the over-the-counter (OTC) derivatives regulatory regime in Hong Kong.
Based on market feedback, the mandatory use of legal entity identifiers (LEIs) in trade reporting will only apply to the identification of entities that are on a reporting entity’s side of a transaction.
This requirement will apply to the reporting of new transactions and daily valuation information beginning 1 April 2019.
HKMA and SFC ruled reporting entities should continue to identify their counterparties in transaction reports in accordance with identifiers specified in their Supplementary Reporting Instructions for OTC derivative transactions.
Reporting entities are expected to establish a process to request LEIs from their clients.
Regulators will communicate with reporting entities and keep in view international development to assess the need for further requirements in this area.
The clearing obligation will be expanded to include specified standardised interest rate swaps denominated in Australian dollars.
The regulators have also adopted the trading determination process proposed in a joint consultation paper and are currently using the process to determine for which products it may be appropriate for Hong Kong to introduce a platform trading obligation.
Based on market feedback, the mandatory use of legal entity identifiers (LEIs) in trade reporting will only apply to the identification of entities that are on a reporting entity’s side of a transaction.
This requirement will apply to the reporting of new transactions and daily valuation information beginning 1 April 2019.
HKMA and SFC ruled reporting entities should continue to identify their counterparties in transaction reports in accordance with identifiers specified in their Supplementary Reporting Instructions for OTC derivative transactions.
Reporting entities are expected to establish a process to request LEIs from their clients.
Regulators will communicate with reporting entities and keep in view international development to assess the need for further requirements in this area.
The clearing obligation will be expanded to include specified standardised interest rate swaps denominated in Australian dollars.
The regulators have also adopted the trading determination process proposed in a joint consultation paper and are currently using the process to determine for which products it may be appropriate for Hong Kong to introduce a platform trading obligation.
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