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Hong Kong’s SFC issues risk management guidance for futures brokers

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Futures brokers would also be required by law to collect any outstanding margin calls from clients who fail to make two settlement calls within the previous 30 calendar days. Futures brokers would be required to adhere to their internal policies regarding forced liquidation. They also would need to establish thresholds for concessionary marting.

Julia Leung, the SFC’s Deputy Chief Executive Officer and Executive Director of Intermediaries, said:

Recent market shocks have highlighted the difficulties futures brokers face during times of volatility. Futures brokers will benefit from the proposed risk management guidelines, which provide timely guidance that can help them manage risks related to their business.

The consultation paper comes after the regulator’s ‘fact-finding exercise’ conducted in 2021. SFC also noted that the guidelines were based on regulations from major jurisdictions and received feedback from a wide range of market participants.

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