The Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) published today their conclusions on a joint public consultation on the mandatory reporting and related record keeping obligations under the new over-the-counter (OTC) derivatives regime.

The report includes revised proposals which were formulated after taking into account feedback from respondents and also seeks further views on three ancillary matters.

Under the new rules, mandatory reporting and related record-keeping obligations will commence first for authorised institutions, approved money brokers, licensed corporations and central counterparties, but the implementation of the same obligations will be deferred for other bodies that are based in or operating from Hong Kong.

“This approach is adopted in response to market feedback that the reporting obligation should be introduced in phases by type of reporting entity – the more significant players should be subject to mandatory reporting first while others should be given more time to prepare for the new regime,” said the HKMA in a statement.

The report also includes a provision to defer the requirement for authorised institutions and licensed corporations to report transactions that they have entered into in their capacity as a body registered or licensed to carry on Type 9 Regulated Activity (asset management).

“This will allow the market more time to sort out some of the reporting difficulties that arise in view of practices in the fund industry,” said the HKMA.

The new rules are aimed at enhancing financial market stability by increasing transparency in the OTC derivatives market and have been formulated in line with similar reform efforts in other major financial markets.

The deadline to submit feedback on the three ancillary matters to the HKMA or the SFC is December 23, 2014.

Click here to read the report.

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