SFC and HKMA conclude joint consultation on amendments to Clearing Rules for over-the-counter derivative transactions

What Changed

• - The Clearing Rules will be amended to designate two fixed calendar periods each year—1 March to 31 May and 1 September to 30 November—as calculation periods for determining mandatory clearing obligations.
• The new standard calculation periods will apply from 1 March 2027 onwards, creating a permanent formulaic approach that generates future calculation periods without requiring further legislative amendments.
• The existing approach of periodically updating the list of calculation periods in the Clearing Rules via legislative amendments will be replaced by this once‑and‑for‑all standardisation.
• The Prescribed Days associated with each calculation period will also be aligned with the new standard periods, providing greater clarity on when clearing obligations are triggered and when positions must be measured.
• The change is intended to increase certainty for derivative dealers in identifying future calculation periods and to facilitate more effective internal planning and compliance monitoring.

Suggested Considerations

• Map current OTC derivative portfolios and position‑monitoring systems to the new standard calculation periods (1 March–31 May and 1 September–30 November) and update internal calendars and compliance checklists accordingly.
• Review and amend internal policies, procedures, and control frameworks for mandatory clearing, including position‑sizing methodologies, threshold calculations, and record‑keeping requirements, to reflect the permanent calculation‑period structure.
• Coordinate with legal and compliance teams to track the progress of the legislative amendments and ensure that internal implementation timelines align with the expected effective date of 1 March 2027.
• Update trade capture, risk, and reporting systems to flag trades and positions that fall within the new calculation periods and to generate alerts when clearing thresholds are approached or breached.
• Train relevant front‑office, middle‑office, and compliance staff on the new calculation‑period regime, including the timing of Prescribed Days and the implications for trade execution, clearing decisions, and documentation.
• Conduct a gap analysis between current practices and the new standardised approach, and document any changes made to internal controls, governance, and oversight processes related to OTC derivative clearing.

Key Dates

Who is Affected