SFC’s Consultation Conclusions and Further Consultation on Changes to Financial Resources Rules
Introduction
On 24 July 2017, the Securities and Futures Commission (SFC) published consultation conclusions on the proposed regulatory capital regime for licensed corporations (LCs) engaged in over-the-counter derivatives (OTCD) activities and other proposed changes to the Securities and Futures (Financial Resources) Rules (FRR).
New modifications to the proposed regime include reducing the minimum capital requirements for fund managers’ central dealing desks meeting certain conditions and extending the transitional period for full compliance with the new FRR requirements from six months to one year. The SFC will also introduce an internal models approach benchmarking to the latest standards set by the Basel Committee on Banking Supervision.
Subject to the results of the further consultation on the proposals set out in the paper, amendment rules for implementing the proposals will be drafted for consultation. The SFC has attached for consultation in Appendix 1 the draft amendment rules on proposals not specific to OTCD activities, incorporating the revised proposed amendments relating to the 2011 consultation, which will be implemented separately once finalized. The draft amendment rules on the OTCD-related proposals will be published for consultation once available. Read more…
