Regulators conclude consultation on revising OTC derivative Clearing Rules

The Hong Kong Monetary Authority (HKMA) and Securities and Futures Commission (SFC) have jointly issued their consultation conclusions on proposed amendments to the Clearing Rules for over-the-counter (OTC) derivative transactions. The amendments aim to address the transition from interbank offered rates (IBORs) to alternative reference rates (ARRs) in interest rate swap transactions. Under the proposal, certain interest rate swap transactions referencing ARRs would be subject to the clearing obligation under specific conditions, while the requirement to clear IBOR-referencing transactions that are no longer published or considered representative would be repealed. The proposal has garnered general support and will be submitted to the Legislative Council for negative vetting. If approved, the amended Clearing Rules are expected to take effect on or after 1 July 2024.

Joint Consultation Conclusions on Proposed Amendments to the Clearing Rules for Over-the-Counter Derivative Transactions Pursuant to Global Interest Rate Benchmark Reform:



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