Near Final Hong Kong Rules on Margin and Risk Mitigation Standards for Non-Centrally Cleared OTC Derivatives

On 6 December 2016, the Hong Kong Monetary Authority (HKMA) published to the industry the near final version of the draft module in the HKMA Supervisory Policy Manual on margin and risk mitigation standards for non-centrally cleared OTC derivatives, together with the HKMA’s response to comments from the various industry bodies on the HKMA consultation response from 22 August 2016 . On the same day, the Australian Prudential Regulation Authority and the Monetary Authority of Singapore also announced to the market the implementation timelines for margin requirements for non-centrally cleared derivatives in Australia and Singapore.

Margin requirements will commence in Hong Kong, Singapore and Australia on 1 March 2017, with a six months’ transition period provided in Hong Kong and Singapore for IM and VM and in Australia for VM.

With margin requirements commencing shortly on 1 March 2017, we have included a quick summary at the back of the bulletin on the Hong Kong VM provisions for your ease of reference.

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