On 30 December 2015, FIA together with the International Swaps and Derivatives Association and the Asia Securities Industry & Financial Markets Association submitted a response to the Hong Kong Securities and Futures Commission (SFC) in response to the SFC Consultation Paper on Proposed Amendments to the Guidelines for the Regulation of Automated Trading Services. The changes have been proposed by the SFC primarily to accommodate the introduction of regulation for OTC derivatives in Hong Kong (including the mandatory clearing of certain OTC derivatives) and align the Guidelines with global international standards.
In the Consultation Paper, the SFC had noted that the clearing leg of the expanded definition of Automated Trading Services will be implemented first to be aligned with the introduction of mandatory clearing in Hong Kong (which is expected in mid-2016).
Consequently, the industry response focused on a number of key areas including:
- requesting the timeline take into account the timeline for mandatory clearing obligations under the European Market Infrastructure Regulation (“EMIR”);
- requesting reasonable transitional arrangements to ensure minimal disruption to business and to provide affected market participants with sufficient time to make any necessary applications and obtain the necessary licences, registrations or authorisations under the amended regime;
- the mandatory clearing aspects of the guidelines particularly, the authorisation and designation of CCPs.
UPDATE 1 MARCH 2016: The SFC has released its consultation conclusions which can be acccesed here. The revised ATS Guidelines will take effect in September 2016 when mandatory clearing for OTC derivatives is effective.
