HKFE Clearing Corporation Limited (HKCC) and the SEHK Options Clearing House Limited (SEOCH), as recognised clearing house (RCHs), have implemented a comprehensive risk management framework which is designed to ensure the timely settlement of relevant derivatives contracts, and stock options transactions by adequately controlling credit, market and liquidity risks. HKCC and SEOCH also have appropriate policies, procedures and controls in place to manage the additional risks that its services are exposed to, including legal risk, settlement risk, general business risk, custody and investment risks, and operational risk.
The Securities and Futures Commission of Hong Kong (SFC) requires RCH to observe and apply the Principles for Financial Market Infrastructures (PFMI) published by the Committee on Payment and Settlement Systems (CPSS)[1] and the International Organization of Securities Commissions (IOSCO) in April 2012. In addition, RCH are expected to meet the public quantitative disclosure standards which complement the disclosure framework and also form the minimum disclosures of central counterparties under Principle 23 of the PFMI.
HKCC and SEOCH’s approaches to observing each applicable principle in the PFMI are summarised in their disclosure documents, in accordance with the guidelines set forth in the ‘Disclosure framework and Assessment methodology’ published by CPSS-IOSCO in December 2012.
HKCC PFMI Disclosure
SEOCH PFMI Disclosure
HKCC and SEOCH’s disclosure of their quantitative data are summarised in accordance with the guidelines set forth in the “Public quantitative disclosure standards for central counterparties” published by CPMI-IOSCO in February 2015 and the format set out by the Global Association of Central Counterparties (CCP Global).
HKCC Public Quantitative Disclosure Standards for Central Counterparties
SEOCH Public Quantitative Disclosure Standards for Central Counterparties
To enhance accessibility to CCPs’ disclosures, HKCC and SEOCH have provided a series of quick links to CCP rulebooks and disclosures in accordance with the format set out by CCP Global.
HKCC Quick Links
SEOCH Quick Links
On 14 August 2020, the Financial Stability Board (FSB) published a questionnaire for collecting information relevant to continuity of access of financial market infrastructures (FMIs) for firms in resolution. Access to critical clearing, payments, settlement, custody and other services provided by FMIs is essential for firms to be able to continue performing their critical functions. In this regard, HKCC and SEOCH have responded to the questionnaire to inform FMI service users and resolution authorities of the potential actions that HKCC and SEOCH could take, prior to and during, a resolution and how HKCC and SEOCH can support resolution actions where necessary and possible.
HKCC Response to FSB Questionnaire on Continuity of Access to FMIs for Firms in Resolution
SEOCH Response to FSB Questionnaire on Continuity of Access to FMIs for Firms in Resolution
[1] CPSS changed its name to the Committee on Payments and Market Infrastructures (CPMI) on 1 September 2014. Please note that references to reports published before that date use the Committee’s old name.