2018年-FSB全球金融稳定委员会_Peer_Review_of_Hong_Kong_79页_1mb

Summary of Peer Review of Hong Kong

Core Content

This report is the result of the 24th country peer review conducted by the Financial Stability Board (FSB) on Hong Kong, focusing on two key areas: OTC derivatives market reforms and the framework for resolution of financial institutions. The review was carried out in December 2017 and is based on the March 2015 version of the FSB Peer Review Handbook. It evaluates the implementation of FSB standards and policies, including those derived from the IMF-World Bank Financial Sector Assessment Program (FSAP) and Report on the Observance of Standards and Codes (ROSC).

The review is based on responses to a questionnaire from Hong Kong’s financial authorities and includes discussions from the Standing Committee on Standards Implementation (SCSI). It highlights Hong Kong’s progress in implementing international financial stability standards and outlines areas for further improvement.

Main Findings

OTC Derivatives Market Reforms

• Market Overview: Hong Kong has a well-developed and growing OTC derivatives market, particularly in interest rate derivatives and foreign exchange (FX) instruments. It is the largest trading centre for interest rate derivatives in Asia.
• Central Clearing: As of end-September 2017, 43% of OTC interest rate swaps and 25% of non-deliverable FX forwards were centrally cleared.
• Legal and Regulatory Framework: Hong Kong has established a comprehensive legal and regulatory framework aligned with G20 commitments and FSB standards. This includes trade reporting, central clearing, and margin requirements.
• Platform Trading: Although some jurisdictions have implemented platform trading, Hong Kong still lacks a comprehensive mandatory framework. There is a need to define and implement such a framework to meet G20 commitments and ensure equivalence with other jurisdictions.
• Transparency: The current level of public disclosure of market data is limited, with only monthly aggregates published. Enhancing transparency through expanded data publication and platform trading with pre- and post-trade transparency is recommended.
• LEI Usage: The Legal Entity Identifier (LEI) is used in 93% of OTC derivative trades reported to the Hong Kong Trade Repository (HKTR), but only 68% of HKTR members are registered with an LEI. Greater promotion of LEI usage is needed to align with international standards and facilitate cross-border trading under MIFID II.
• NCCD Reforms: Reforms for non-centrally cleared derivatives (NCCDs) are ongoing. Margin requirements and risk mitigation standards are already in place for authorized institutions (AIs), but need to be extended to licensed corporations (LCs). Capital requirements for NCCDs are also under review, with a delay in implementing the final Basel Committee standards.

Framework for Resolution of Financial Institutions

• Legal Framework: Hong Kong has introduced a comprehensive cross-sectoral resolution regime under the Financial Institutions (Resolution) Ordinance (FIRO), which aligns with the FSB Key Attributes.
• Resolution Authorities: The HKMA, SFC, and Insurance Authority (IA) are the main resolution authorities. The HKMA is designated as the lead resolution authority for cross-sectoral G-SIB groups.
• Resolution Office: The HKMA has established a dedicated Resolution Office to support resolution planning and execution.
• Resolution Tools: Work is ongoing to finalise rules on loss-absorbing capacity, temporary stays on early termination rights, and protected arrangements.
• Cross-Border Cooperation: Hong Kong has introduced a statutory framework for cross-border resolution actions, which is crucial given its role as a host for foreign financial institutions, including G-SIBs.
• Coordination and Information Sharing: Coordination between resolution authorities is still evolving. A crisis management Memorandum of Understanding (MoU) is planned to improve cross-sectoral coordination and information sharing.
• Resolvability Assessments: Further work is required to assess resolvability of firms, address valuation capability, and ensure continuity of critical operations and access to financial market infrastructures (FMIs).

Key Recommendations

• Finalise a comprehensive platform trading framework.
• Improve transparency of OTC derivative transactions by expanding data publication and promoting pre- and post-trade transparency.
• Increase the adoption of LEI by requiring all HKTR members to have an LEI and encouraging the establishment of a Local Operating Unit (LOU).
• Extend margin and risk mitigation standards to licensed corporations (LCs) and certain non-covered derivatives.
• Finalise resolution framework elements, including loss-absorbing capacity requirements and temporary stays on early termination rights.
• Enhance cross-border cooperation and internal governance to support group resolution strategies.
• Develop resolution-specific coordination processes and frameworks to improve feasibility and credibility of resolution measures.

Conclusion

Hong Kong has made good progress in implementing OTC derivatives reforms and resolution frameworks, reflecting its commitment to financial stability and international standards. However, there is still room for improvement in completing the reforms, enhancing transparency, and strengthening cross-border coordination. The FSB encourages Hong Kong to continue its efforts and finalise these measures in a timely manner to maintain financial stability and regulatory equivalence.