HKMA and the Securities and Futures Commission (SFC) announced conclusions of a joint consultation on the annual update to the list of financial services providers, or FSPs, under the clearing obligation for over-the-counter (OTC) derivative transactions. Appendix B to the conclusions paper presents an updated list of financial services providers. Following the current approach for the annual update, HKMA will gazette the updated list during the fourth quarter of 2020 for implementation on January 01, 2021.
In March 2020, HKMA and SFC had issued a joint consultation paper on the annual update to the list of financial services providers under the OTC derivatives regime, with the consultation period ending on April 28, 2020. Based on the feedback received to the consultation, it was found that, as a result of reorganization related to the provision of broker-dealer services within the Bank of America (BofA) group in 2019, BofA Securities, Inc. now provides the institutional services previously provided by Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S). As BofA Securities, Inc. has already been identified as a new financial services provider in this annual update, HKMA will remove MLPF&S from the updated list. Other than the above, HKMA did not receive any other objection to the proposed list of financial services providers. The consultation paper had proposed to include eight additional entities on the list. These entities were Bank of China (UK) Ltd, BofA Securities Inc., Citibank Europe Plc, Mizuho Securities USA LLC, TD Bank, N.A, TD Bank USA, N.A., The Toronto-Dominion Bank, and UBS Switzerland AG.
The financial services provider list includes entities that meet the following two criteria:
- They belong to a group of companies appearing on the FSB-published list of global systemically important banks, or on the list of dealer groups that undertook to the OTC Derivatives Supervisors Group to work collaboratively with central counterparties, infrastructure providers, and global supervisors.
- They are members of the largest central counterparties offering clearing for interest rate swaps in the US, Europe, Japan, and Hong Kong.
Keywords: Asia Pacific, Hong Kong, Banking, Securities, OTC Derivatives, Financial Service Providers, G-SIBs, Clearing Regime, FSB, SFC, HKMA
The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.
The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.
The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.
The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups
The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.
The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.
The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.
The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.
Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)
The European Commission (EC) recently adopted regulations with respect to the calculation of own funds requirements for market risk, the prudential treatment of global systemically important institutions (G-SIIs)