Hong Kong Regulators Release Consultation on OTC Derivatives

The Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) today released a consultation paper addressing the Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term of OTC derivatives markets.

Specifically, the paper makes various recommendations regarding surveillance and monitoring market conduct that are intended to strengthen financial markets and manage specific risks related to OTC derivatives.

Citing aligning with global standards relating to the trading of OTC derivatives, the paper recommends OTC transactions to be submitted to the Hong Kong Trade Repository. According to the report, a comprehensive approach to surveillance and monitoring would include enabling the reporting obligation to be identified by unique transaction identifiers.

The regulators also propose to remove 17 jurisdictions from the list of designated domains for the masking relief of the reporting obligation.

Further research also would be undertaken on the development of a comprehensive surveillance system for monitoring OTC derivatives markets to supplement the current ecosystem. This includes updating the list of Financial Services Providers under the OTC derivatives clearing regime.

Regulators have been stepping up compliance efforts

Such regulations not only help enhance Hong Kong’s audit requirements and prevent market manipulation and fraud but also would ensure that the country’s reporting and clearing regimes would keep up with the international standards.

The HKMA or the SFC are accepting comments on the proposals until June 25, 2019.

The Hong Kong regulators have been actively improving their framework for regulating facilities that bring together multiple buyers and multiple sellers of over-the-counter (OTC) derivatives. Previous consultation papers proposed that OTC derivatives that meet certain criteria may be required to trade exclusively on such regulated facilities.

Regulators have been also stepping up their compliance to enforce anti-Money Laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term rules. Earlier last month, the Hong Kong Monetary Authority imposed an HK$12.5 million ($1.6 million) fine on JPMorgan Chase & Co’s Hong Kong branch and reprimanded it over lapses in the bank’s money laundering and terrorist financing rules, between April 2012 and February 2014.