HKMA Issues Proposal Under Derivatives Regime, Extends SFG Loan Scheme
The Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) concluded a consultation on the addition of new calculation periods and launched a consultation on the annual update to the list of financial services providers, under the over-the-counter (OTC) derivatives regulatory regime. Announcements also included enhancements to the small and medium enterprise (SME) Financing Guarantee Scheme (SFGS), which will take effect from April 01, 2022.
The Financial Secretary in its 2022-23 budget announced that the maximum loan amount per enterprise under the Special 100% Loan Guarantee will be raised from the total amount of employee wages and rents for 18 months to that for 27 months, subject to a ceiling of HKD 9 million (originally HKD 6 million) and the maximum repayment period will be extended from eight years to ten years. Eligibility criteria for this includes enterprises that have been operating for at least three months as of March 31, 2022 and have suffered at least a 30% decline in sales turnover in any month since February 2020 compared with the monthly average of any preceding quarter from January 2019 to March 2022. In addition, the principal moratorium arrangement for the 80% Guarantee Product, the 90% Guarantee Product, and the Special 100% Loan Guarantee of the SME Financing Guarantee Scheme will be extended by six months to a maximum of 30 months in total. An option for borrowers to resume making partial principal repayment for one year will be provided, allowing borrowers to resume normal repayment gradually if they are willing and capable. The application period of the SME Financing Guarantee Scheme has been also extended to June 30, 2023.
With respect to the OTC derivatives regime, one new entity (Nomura Financial Products Europe GmbH) is proposed to be included in the financial service provider list. Comment period on the proposed revision to the financial service provider list ends on May 14, 2022 and the conclusion paper for this consultation is expected in June 2022. The updated list targeted to become effective on January 01, 2023. HKMA also informed that the consultation on addition of new calculation periods to the clearing rules received three submissions and the respondents did not have any comments on the proposed amendments. The proposed legislative amendments for adding eight calculation periods to the clearing rules were submitted before the Legislative Council for negative vetting. The amended rules are expected to come into effect on March 01, 2023, subject to the legislative process.
Keywords: Asia Pacific, Hong Kong, Banking, OTC Derivatives, Financial Service Providers, G-SIBs, Clearing Regime, Credit Risk, SMEs, Loan Guarantee, Basel, Regulatory Capital, Reporting, SFGS, SFC, HKMA
Featured Experts

María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer

Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.

Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
German Regulators Publish Updates for Financial Sector EntitiesNext Article
APRA Connect to Go Live on September 13, 2021Related Articles
EBA Proposes Standards for IRRBB Reporting Under Basel Framework
The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.
FED Issues Further Details on Pilot Climate Scenario Analysis Exercise
The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.
US Agencies Issue Several Regulatory and Reporting Updates
The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.
ECB Issues Multiple Reports and Regulatory Updates for Banks
The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.
HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements
The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.
EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR
The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.
CBIRC Revises Measures on Corporate Governance Supervision
The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.
HKMA Publications Address Sustainability Issues in Financial Sector
The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.
EBA Updates Address Basel and NPL Requirements for Banks
The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.
ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite
The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.