SFC: wrestling with local versus international

The comment period for the joint Securities and Futures Commission (SFC) and Hong Kong Monetary Authority (HKMA) consultation paper on the regulatory regime for OTC derivatives closed on November 30. SFC chief executive Ashley Alder and executive director Keith Lui talk to Asia Risk about one of the main planks of the new rules – central clearing of OTC derivatives in Hong Kong

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Ashley Alder, SFC

There are plenty in the derivatives industry worried about the springing up of multiple, domestically focused central counterparties (CCPs) – perhaps aided by national regulators mandating that local currency over-the-counter trades have to be cleared by the domestic clearer. In this scenario, dealers complain, globally active banks will be forced to split portfolios between multiple clearing houses, increasing costs and reducing netting efficiencies.

These dealers will not be thrilled, then, by

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