HKMA and SFC Announce Annual Updates to Financial Services Providers List

The
Hong
Kong
Monetary
Authority
(HKMA)
and
the
Securities
and
Futures
Commission
(SFC)
have
jointly
announced
the
completion
of
their
annual
updates
to
the
Financial
Services
Providers
(FSP)
list
under
the
over-the-counter
(OTC)
derivatives
clearing
regime,
according
to
a
recent

press
release
by
the
HKMA.

Consultation
Process
and
Market
Feedback

The
updates,
which
were
concluded
on
June
27,
2024,
were
made
following
a
thorough
consultation
process.
The
HKMA
and
SFC
considered
market
feedback
and
have
decided
to
implement
the
proposed
changes
to
the
FSP
list,
with
a
minor
modification
to
reflect
a
post-consultation
change
in
the
status
of
an
existing
FSP.
The
consultation
conclusions
paper
and
the
updated
FSP
list
can
be
accessed
on
the
websites
of
the

HKMA
and

SFC.

Criteria
for
Inclusion

The
FSP
list
includes
entities
that
meet
two
specific
criteria:

1. They
   belong
   to
   a
   group
   of
   companies
   that
   appears
   on
   either
   the
   list
   of
   global
   systemically
   important
   banks
   published
   by
   the
   Financial
   Stability
   Board
   or
   the
   list
   of
   dealer
   groups
   which
   undertook
   to
   the
   OTC
   Derivatives
   Supervisors
   Group
   to
   work
   collaboratively
   with
   central
   counterparties,
   infrastructure
   providers,
   and
   global
   supervisors
   to
   continue
   making
   structural
   improvements
   to
   the
   global
   OTC
   derivatives
   markets.
2. They
   are
   clearing
   members
   of
   the
   largest
   central
   counterparties
   offering
   clearing
   for
   interest
   rate
   swaps
   in
   the
   United
   States,
   Europe,
   Japan,
   and
   Hong
   Kong.

Implementation
Timeline

The
updated
FSP
list
will
be
gazetted
during
the
fourth
quarter
of
2024
and
is
scheduled
for
implementation
on
January
1,
2025.
This
annual
update
is
part
of
the
HKMA’s
and
SFC’s
ongoing
efforts
to
maintain
a
robust
regulatory
framework
for
OTC
derivatives,
ensuring
the
stability
and
integrity
of
the
financial
markets.

For
more
details,
the
consultation
paper
issued
in
April
2024
can
be
viewed

here.

Image
source:
Shutterstock