On February 27, ISDA responded to a joint consultation by the Hong Kong Monetary Authority (HKMA) and the Securities Futures Commission (SFC) on proposed amendments to schedule 2 of the clearing rules for over-the-counter (OTC) derivatives. The proposed amendments introduce permanent calculation periods going forward – ie, every March 1 to May 31 and September 1 to November 30 each year, with effect from March 1, 2027.
ISDA welcomes the amendment, which provides greater regulatory certainty and removes the need for periodic legislative amendments to update the calculation periods. ISDA also notes that having a permanent way of determining the calculation periods is in line with practices in Europe and the UK.
In addition, ISDA suggests regulators should consider broadening the exemptive relief for clearing, which is limited to transactions resulting from multilateral portfolio compression exercises, to include those resulting from post-trade risk reduction exercises in a future review, like other jurisdictions, such as Australia, Europe and the UK.
Documents (1) for ISDA Response to HKMA SFC Consultation on Clearing Rules
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