OTC derivatives reporting rules updated as HKMA, SFC conclude consultation

This initiative supports G20's commitment to reforming OTC derivative markets.

The Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) have concluded their consultation on enhancements to the over-the-counter (OTC) derivatives reporting regime, HKMA announced.

The consultation, initiated in March, proposed the mandatory use of the Unique Transaction Identifier (UTI), Unique Product Identifier (UPI), and the reporting of Critical Data Elements (CDEs) to align Hong Kong's regime with international developments.

After gaining support from respondents, the HKMA and SFC have adjusted the proposals to ensure smooth implementation.

The UTI will be used to identify each reported OTC derivatives transaction based on the structure outlined in the 2017 Technical Guidance by the Committee on Payments and Market Infrastructures (CPMI) and the International Organisation of Securities Commissions (IOSCO). 

The UPI will uniquely denote specific OTC derivatives products, whilst CDEs, as outlined by CPMI and IOSCO in their 2018 guidance, will standardise key transaction data across the market.

This initiative supports G20's commitment to reforming OTC derivative markets, facilitating more effective regulatory analysis of such transactions.