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Download the presentations from the  Clearing and Reporting OTC Derivatives held in April 2014 in Hong Kong.



Asia Risk - Hong Kong's OTC Trade Reporting Requirements
Angela Kwan, Founder and CEO, STRATFORD FINANCE

  • Addressing the current challenges for derivative transaction reporting
  • Sharing the observations and expectations for the next phase of rule/regulations
  • Translationg legal and regulatory developments into operationall processes and timelines
  • Enhancing compliance and operational readiness for mandatory OTC clearing and trade reporting requirements


Regulation of OTC Derivatives Reporting and Licensing in Hong Kong
Scott Carnachan, Consultant, DEACONS

  • Progress made in amending the Securities and Futures Ordinance and its impact on the timeline for mandatory trade reporting 
  • Defining the ‘originate or execute' model and the ‘Hong Kong nexus'
  • Understanding requirements of the new trade reporting and repository regimes
  • Who will be impacted by these reporting proposals? Will there be a carve-out for end-users?
  • Overview of the requirements under the new SFC licensing regime



Reviewing the reportable transaction requirements
Liam Cahill, Head of Operations Regulatory Control, APAC, HSBC

  • Defining the ‘Hong Kong nexus'
  • Update on the progress made under Phase I reporting of vanilla IRSs and NDFs
  • Discussion of the lessons learnt from Phase I reporting
  • Anticipating challenges for more complex instruments under Phases II and III




Best practices for adpoting and implementing trade identifies

Kishore Ramakrishnan, Executive Director, Financial Services Advisory, ERNST & YOUNG


  • Prospects for a universal, standardized trade identifier and hierarchy to evolve within the industry
  • Understanding the alphabet soup of trade identifiers:CICI, LEI, UTI and USI
  • Anticipating data granularity requirements: firm-level, individual, and algo trade identifiers 
  • How essential are these trade identifiers to the linking and matching process?



Derivative transaction reporting: Meeting the demands of new reporting obligations



  • What are the reporting requirements for swaps executed on a SEF?
  • Issues surrounding reconciliation of bilateral and cleared trades
  • Will the mandatory fields required in the U.S. also be compulsory in Asian jurisdictions?
  • Developing infrastructure to report derivative transactions across five asset classes 
  • Meeting data granularity requirements: Enhancing systems and processes to integrate detailed inputs, incorporate new fields, and deliver uniform outputs in accordance with regulatory standards




Extraterritorial reach of derivatives regulations

Francis Edwards, Partner, CLIFFORD CHANCE


  • Consequences for Asia-based CCPs not achieving or retaining ESMA equivalency
  • Effect of MIFID2 and Mifir on Asian market liquidity and transaction costs
  • Recovery and resolution planning: Understanding the EU Recovery and Resolution Directive and its possible impact on derivatives, netting and stays 
  • Update on the EU financial transaction tax: Prospect of overcoming its legal challenges and possible extraterritorial impact on repo and fixed income markets 
  • Implications of the Volcker Rule on global derivatives markets 
  • Dealing with uncertainty surrounding the industry lawsuit against the CFTC and its possible impact on cross border guidelines




Development of the regulatory regime for the OTC derivatives market in Hong Kong

Daryl Ho, Head of Market Development, HONG KONG MONETARY AUTHORITY


  • Latest regulatory development of the OTC derivatives market in Hong Kong
  • Overview and key features of Hong Kong's proposed regulatory regime
  • Reform implementation: Challenges & implications




The Hong Kong Clearing Framework and OTC Clear Hong Kong Ltd

Derek Chua, Associate, LINKLATERS


  • Legal and Regulatory Framework for clearing OTC derivatives in Hong Kong
  • Insolvency protections for Recognised Clearing Houses and client clearers under the SFO
  • OTC Clear Hong Kong Ltd as Recognised Clearing House
  • Key features including corporate governance, membership and clearing criteria
  • Collateral, default funds and the default management process
  • Client clearing including segregation and porting under the SFO Amendment Bill 2013
  • Hong Kong and foreign CCPs and mutual recognition framework




Client clearing in practice

Luke Brereton, Co-head of Client Execution, Clearing, Liquidity and Portfolio Services, STANDARD CHARTERED


  • How will the client clearing regime evolve in Hong Kong?
  • Selecting a client clearer: Who chooses whom? What are the key risk factors to consider?
  • Demystifying the client onboarding process
  • Size matters: High volume traders are the industry darling - Are smaller players getting left behind?




Documentation challenges to OTC bilateral and central clearing 

Ross Stewart, Counsel, ALLEN & OVERY


  • Addressing documentation requirements and the legal challenges they pose
  • Will a documentation standard emerge for trading agreements in Asia?
  • Which documents are necessary to support OTC derivatives trading in a new marketplace?
  • Understanding the maze of bilateral agreements, the ISDA Master Agreement/CSA, trade confirmations, and supplemental agreements 
  • Challenges to client clearing documentation




Managing the costs and collateral requirements of central clearing

O'Delle Burke, Executive Director, Collateral Management, J.P. MORGAN


  • Assessing collateral eligibility
  • Initial and variation margin requirements 
  • Establishing a repo line to meet variation margin requirements 
  • How to monitor intraday liquidity and margining levels to post adequate collateral (variation margin) 
  • Collateral pricing and transformation 
  • Limits to re-hypothecation of assets under IOSCO rules




OTC derivatives - Clearing, collateral & margin 

Kishore Ramakrishnan, Executive Director, ERNST & YOUNG


  • Central Clearing and Collateral - Key functional and operational enablers
  • Collateral segregation models
  • Cleared vs uncleared margin cost implications
  • Assessing CCPs' margin models and the pass-through charge from clearing brokers
  • Custody risk: What levels of portability, asset segregation, and other safeguards are necessary to protect client clearers in the event of a clearing member default? 
  • What form of collateral will the main CCPs accept? What are the challenges for banks with a presence in multiple jurisdictions or working across clearing houses?
  • Scaling up volumes, liquidity, and margining benefits on CCPs







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