Hong Kong’s Securities and Futures Fee (SFC) launched a session paper on Friday, proposing danger administration tips for licensed futures brokers.
The rules primarily require futures brokers to incorporate qualitative necessities for controlling and managing vital dangers of futures dealing actions. If permitted, brokers have to set prudent shopper danger limits and additional adjust to further necessities referring to commodity futures.
Moreover, the Hong Kong-regulated brokers could be wanted to conduct due diligence critiques of executing or clearing brokers and put in place extra stringent mechanisms to safeguard shopper belongings. Additionally they have to implement controls round buying and selling in futures markets and maintain belongings for shoppers exterior Hong Kong.
Furthermore, the proposals introduced strict guidelines round margin calls. The futures brokers would wish to gather excellent margin requires shoppers who failed to satisfy two margin calls by the settlement deadline in a interval of 30 days. Brokers have to comply with in-house liquidation insurance policies and have to arrange thresholds for concessionary margining.
A Justified Transfer
The session paper got here after a ‘fact-finding train’ performed by Hong Kong’s regulator in 2021. On prime of that, the rules had been ready by accumulating suggestions from a broad spectrum of market contributors.
In one other survey of fifty licensed buying and selling companies suppliers, the regulator discovered extreme shortcomings within the operations of many corporations.
“Current shocks within the monetary and commodity futures markets have underscored the challenges futures brokers face in occasions of market volatility,” mentioned SFC’s Deputy Chief Government Officer and Government Director of Intermediaries, Julia Leung.
“The proposed danger administration tips intention to supply well timed steerage to futures brokers to assist them higher handle the dangers referring to their enterprise.”
In the meantime, the Hong Kong watchdog is aligning its laws round cryptocurrencies. In October, the SFC confirmed its intentions to launch a session paper with proposed tips and regulatory guidelines for cryptocurrencies or, as formally referred to as digital belongings. Moreover, it considers permitting retail entry to digital belongings via exchange-traded funds.
Hong Kong’s Securities and Futures Fee (SFC) launched a session paper on Friday, proposing danger administration tips for licensed futures brokers.
The rules primarily require futures brokers to incorporate qualitative necessities for controlling and managing vital dangers of futures dealing actions. If permitted, brokers have to set prudent shopper danger limits and additional adjust to further necessities referring to commodity futures.
Moreover, the Hong Kong-regulated brokers could be wanted to conduct due diligence critiques of executing or clearing brokers and put in place extra stringent mechanisms to safeguard shopper belongings. Additionally they have to implement controls round buying and selling in futures markets and maintain belongings for shoppers exterior Hong Kong.
Furthermore, the proposals introduced strict guidelines round margin calls. The futures brokers would wish to gather excellent margin requires shoppers who failed to satisfy two margin calls by the settlement deadline in a interval of 30 days. Brokers have to comply with in-house liquidation insurance policies and have to arrange thresholds for concessionary margining.
A Justified Transfer
The session paper got here after a ‘fact-finding train’ performed by Hong Kong’s regulator in 2021. On prime of that, the rules had been ready by accumulating suggestions from a broad spectrum of market contributors.
In one other survey of fifty licensed buying and selling companies suppliers, the regulator discovered extreme shortcomings within the operations of many corporations.
“Current shocks within the monetary and commodity futures markets have underscored the challenges futures brokers face in occasions of market volatility,” mentioned SFC’s Deputy Chief Government Officer and Government Director of Intermediaries, Julia Leung.
“The proposed danger administration tips intention to supply well timed steerage to futures brokers to assist them higher handle the dangers referring to their enterprise.”
In the meantime, the Hong Kong watchdog is aligning its laws round cryptocurrencies. In October, the SFC confirmed its intentions to launch a session paper with proposed tips and regulatory guidelines for cryptocurrencies or, as formally referred to as digital belongings. Moreover, it considers permitting retail entry to digital belongings via exchange-traded funds.
