On September 28, 2026, the National Association of Financial Market Institutional Investors (NAFMII) released the OTC Derivatives Trade Reporting Q&A (I) (the “Q&A”), providing clarification on the implementation of the previously issued Notice on Matters Concerning Over-the-Counter (OTC) Derivatives Trade Reporting (NAFMII [2026] No. 115) (the “Notice”) and the Reporting Specifications for OTC Derivatives Transaction Data (Trial Version, July 2026) (the “Specifications”).
I. Scope of Reporting
In the Q&A, the NAFMII clarifies that, for purposes of Table 2 “Transaction Details” and Table 3 “Position Information” under the Specifications, the following transactions are not subject to reporting:
(1) Futures transactions; and
(2) OTC derivatives transactions executed electronically in China’s interbank market through financial market infrastructures such as the China Foreign Exchange Trade System (CFETS) and the Shanghai Gold Exchange (SGE), including “Swap Connect” transactions.
First, since futures transactions are not “OTC derivatives transactions” as defined in the Notice, their transaction details and position information are not subject to reporting.
Second, as both the CFETS and the SGE are trading platforms recognized by the People’s Bank of China (PBOC), pursuant to the Notice and the Q&A, OTC derivatives transactions executed electronically on either of the platforms within the interbank market are also not subject to reporting.
Furthermore, the Q&A expressly exempts transactions under the Swap Connect. We understand that the rationale for this exemption is to avoid duplicate reporting, given that the Swap Connect transactions are already registered with the CFETS and the relevant transaction information has been captured by the financial market infrastructure.
II. Cross-Border OTC Derivatives Transaction Reporting
For cross-border OTC derivatives transactions, the Q&A updates the reporting requirements, requiring domestic and overseas market participants to report the following transaction information:
- For domestic market participants:
1) Transaction Information on OTC derivatives transactions concluded in China’s onshore market with overseas counterparties; and
2) Transaction Information on OTC derivatives transactions concluded in the offshore market with domestic or overseas counterparties.
- For overseas market participants:
1) Transaction details and position information on OTC derivatives transactions concluded in China’s onshore market with domestic or overseas counterparties; but
2) Overseas market participants are not required to report the aggregate statistical information on exchange-traded and OTC derivatives transactions (the “ETD & OTC Derivatives Statistical Information”).
The NAFMII has exempted overseas market participants from the requirement under the Specifications to report Table 6 “ETD & OTC Derivatives Statistical Information”, thereby significantly reducing the reporting burden on such participants. That said, how to interpret OTC derivatives transactions with overseas counterparties that are “concluded in China’s onshore market” remains to be clarified.
In addition, the Q&A grants an exemption to overseas market participants such as central banks, government agencies, public sector entities, multilateral development banks, and the Bank for International Settlements from the reporting obligations. Based on our verbal consultation with the NAFMII, sovereign wealth funds fall within the scope of exemption.
III. “Nil Submission” Requirements
According to the Q&A, if a market participant has not conducted any OTC derivatives transactions specified in the Notice during the monthly reporting period, it is not required to report Table 2 “Transaction Details”. However, with respect to any existing positions it holds, it shall report Table 3 “Position Information” and Table 6 “ETD & OTC Derivatives Statistical Information” (excluding overseas market participants) and shall submit a statement (e.g. “no OTC derivatives transactions were conducted during this reporting period”). If a market participant holds no OTC derivatives positions specified in the Notice, neither Table 3 “Position Information” nor Table 6 “ETD & OTC Derivatives Statistical Information” is required to be reported.
Conclusion
The Q&A concludes by noting that the Specifications remain in a trial stage and will be adjusted by the NAFMII in due course in light of the regulatory requirements and feedback from market participants. Where, for objective reasons, a market participant is unable to report data in full compliance with the Specifications, it shall include explanatory notes in the document submitted.
We also note that the Q&A is numbered “(I)”, suggesting that the NAFMII may issue follow-up Q&As to provide further practical guidance on reporting. However, based on our verbal consultation with the NAFMII, there may not be new Q&As in the very near future.
We will continue to monitor relevant developments and keep our clients updated.
