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.