The Hong Kong Monetary Authority and the Securities and Futures Commission jointly issued a consultation on introducing the ﬁrst phase of mandatory clearing and the second phase of mandatory reporting.
The mandatory clearing requirements will apply only to certain standardized interest rate swaps traded among major dealers. These swaps consist of ﬁxed-to-ﬂoating swaps, basis swaps and overnight index swaps denominated in seven currencies. The consultation covers issues such as: the types of transactions that will be subject to mandatory clearing; the entities that will be subject to the clearing obligation; exemptions and relief that may apply; and the process for designating central counterparties for the purposes of the clearing obligation.
The mandatory reporting consultation aims to expand the existing reporting regime to all OTC derivative products, rather than just interest rate swaps and non-deliverable forwards. The proposal also would widen the scope of transaction information to be reported, including requiring the reporting of daily valuations and identifying the speciﬁc data ﬁelds to be completed under the expanded reporting regime.