Latest FRR Amendment Updates - OTC Derivatives Reform in Hong Kong
August 2025
The Securities and Futures Commission (SFC) has recently launched a public consultation on proposed amendments to the Financial Resources Rules as of 14 July 2025.
These amendments will bring Hong Kong’s regulatory framework more in line with the revised Basel standards, resulting in significant changes to capital requirements and business models across the securities industry. To help industry players navigate these changes, we’ve developed a comprehensive flyer that summarises the updated capital calculation approaches, enhanced requirements for internal models, and our practical insights on their impact on securities business.
The new FRR rules are expected to take effect after Legislative Council approval. By then, all entities conducting over-the-counter derivatives (OTCD) transactions will be required to operate through a Licensed Corporation, in compliance with the conduct requirements for client-facing affiliates (CFAs) and other regulated activities licensing regimes.
Together, we can navigate this complexity and prepare you for these regulatory changes – from strategy to implementation.
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