FX168 Financial News (Hong Kong) — The Hong Kong Securities Regulatory Commission said on Tuesday (July 25) that the proposed capital supervision system for licensed institutions engaged in OTC derivatives activities and the proposed transition period for the new financial regulations of the Securities Regulatory Commission will be extended from 6 months to 1 year.
Other changes made in the “Securities and Futures (Financial Resources) Rules” published an advisory summary. The authorities indicated that the proposed system would be implemented, but certain changes would be made, including lowering the minimum capital requirement for the central trading counter for fund managers that meet certain conditions, and extending the transition period set for full compliance with the new requirements of the rules from 6 months to 1 year.
The proposed amendments and additions to the Securities and Futures (Financial Resources) Rules, including the addition of 4 mainland commodity exchanges to the list of specified exchanges contained in the rules, and approval of credit ratings issued by Fitch Ratings. The authorities will also further consult the market on the relevant proposals and cover a draft set of amendments to the Securities and Futures (Financial Resources) Rules prepared to implement relevant proposals not specifically designed for OTC derivatives activities. The consultation period will end on August 23.
Furthermore, the Hong Kong Securities Regulatory Commission will introduce an internal model calculation method into the “Securities and Futures (Financial Resources) Rules”, taking into account the latest standards set by the Basel Committee on Banking Supervision.
Chief Executive of the Hong Kong Securities Regulatory Commission, Au Dali, said that in order for regulation to be in line with international standards, it is necessary to make the proposed changes, and is convinced that the proposed system will not only help ensure the stability of the local financial market, but will also promote the development of Hong Kong as a derivatives hub and risk management center in the Asian region.