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SFC consults on financial resources rule enhancements to foster market developments for OTC derivatives and other products
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On July 14, 2025, the Securities and Futures Commission (SFC) launched a public consultation on proposed amendments to the Securities and Futures (Financial Resources) Rules (FRR) to establish internationally comparable capital requirements for licensed corporations (LCs) involved in over-the-counter derivative activities. Key proposals include refined capital requirements aligned with Hong Kong’s Banking (Capital) Rules and the Basel Framework, significant reductions for inter-dealer brokers, and simplified transfer pricing treatments. The amendments aim to support diverse trading activities, including stocks from Mainland China, commodities, and digital asset futures, while promoting central clearing by exempting capital requirements for centrally-cleared repurchase transactions. The public is invited to submit comments by October 13, 2025. Resources: https://apps.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/doc?refNo=25PR111
