Amid global efforts to standardize over-the-counter (OTC) derivatives reporting, Hong Kong is set to implement revised regulations in September 2025. Following consultations and drawing from international standards like the Unique Transaction Identifier (UTI), Unique Product Identifier (UPI), Critical Data Elements (CDEs), and ISO 20022 XML schema, these updates aim to enhance regulatory transparency. While the entities responsible for reporting remain largely unchanged, the data format and content requirements have undergone significant modifications. Market participants must now prepare for an expanded list of reportable fields, stricter operational protocols, and enhanced risk management frameworks.
In line with international trends, Hong Kong’s Monetary Authority (HKMA) has introduced a comprehensive overhaul of its OTC derivatives reporting rules. Effective from September 29, 2025, these changes will require firms to electronically submit transaction details to the Hong Kong Trade Repository (HKTR) within two business days. Unlike jurisdictions such as the EU or Singapore, which recognize multiple trade repositories, HKTR stands alone as the designated platform in Hong Kong. This singular focus necessitates specific system adjustments even for entities already compliant in other regions.
The new regime mandates reporting by authorized institutions, including banks, money brokers, Securities and Futures Commission (SFC)-licensed corporations, and clearing houses acting as central counterparties. Transactions conducted on behalf of affiliates also trigger reporting obligations, provided they occur in Hong Kong. However, exemptions exist for entities whose total notional amount of outstanding OTC derivatives does not exceed $30 million. Once this threshold is breached, the exemption is permanently revoked.
A notable distinction lies in the treatment of asset managers. Under Hong Kong’s framework, collective investment schemes are excluded from affiliate definitions, meaning fund trustees do not bear reporting responsibilities unless engaged in proprietary trading. Additionally, while future amendments might extend coverage to Type 9 licensed asset managers, the current iteration retains exemptions for collective investments.
Operational challenges include aligning with the increased number of reportable fields—183 in total—and ensuring all submissions incorporate UTIs, UPIs, and CDEs formatted under ISO 20022 XML standards. Determining who generates the UTI presents another layer of complexity, addressed through a hierarchical process outlined in updated FAQs. In contrast, no regulatory mandate exists for sharing UPIs, leaving individual parties responsible for obtaining them.
Furthermore, enhancements to risk management frameworks introduce stricter margin and collateral management practices. Notably, Hong Kong enforces trade-level reporting exclusively, unlike Europe’s conditional allowance for position-level disclosures. Legacy transactions exceeding one year post-implementation must be re-reported using the new requirements, facilitated by a six-month transition period.
To ensure seamless compliance, market participants should actively engage with the revised rules well ahead of the June 2025 testing phase. System upgrades, vendor coordination, and internal alignment will prove critical in meeting the September 2025 deadline. Early preparation remains essential given the magnitude of these changes, underscoring the importance of proactive measures to avoid disruptions.