On 10 March 2023, the HKMA and the Securities and Futures Commission (“SFC”) published a joint consultation paper on the proposed amendments to the mandatory clearing regime, as set out in the Securities and Futures (OTC Derivative Transactions – Clearing and Record Keeping Obligations and Designation of Central Counterparties) Rules.
The proposed changes align with the global interest rate benchmark reform, in particular the transition from the use of interbank offered rates (“IBORs”) to alternative reference rates (“ARRs”). It is proposed that the current requirement under the Clearing Rules to clear certain OTC derivative transactions referencing IBORs that are no longer or will no longer be published or considered representative should be replaced by the new requirement to clear certain OTC transactions referencing the relevant ARRs.
The joint consultation paper is available here.
