Regulatory Alerts2020-09-11
Added · Updated
Non-centrally Cleared OTC Derivatives Transactions - Margin and Other Risk Mitigation Standards
The Hong Kong Monetary Authority issues this statutory guideline to establish minimum margin and risk mitigation standards for non-centrally cleared over-the-counter derivatives transactions. The document defines covered entities and mandates the exchange of variation and initial margin to reduce counterparty credit risk and systemic contagion. It further requires authorized institutions to implement robust risk mitigation techniques, including standardized trading relationship documentation, trade confirmation, and portfolio reconciliation procedures.
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